Lessons from public bidding for Hanoi's school milk program

Ms. Bui Thi Huong - Vinamilk CEO donated milk to students of Dong Hieu Primary School (Thai Hoa town). Photo: PV

Saving more than 352 billion VND, parents only have to buy 2,954 VND/box of milk

On October 10, 2018, Hanoi organized a public bidding for the School Milk program with strict bidding standards to select a reputable contractor with sufficient production capacity and quality assurance at the lowest price. Hanoi's public bidding was quite fierce with 11 units participating in the bidding. However, in the end, only 3 enterprises participated in the bidding due to high requirements on financial capacity, production and competitive price pressure.

After 32 days, on November 12, Hanoi officially opened the bidding package in the presence of relevant parties. As a result, Vinamilk won the overwhelming bid as the qualified unit, bidding the lowest price of 3,828 billion VND, 130 billion VND lower than the second ranked unit.

The Hanoi School Milk Program was announced with a total estimated implementation cost of over VND4,180 billion, of which the budget supports over VND1,290 billion; businesses contribute over VND890 billion and parents contribute over VND2,000 billion. The program will be implemented from the 2018-2019 school year to the end of 2020 with the goal of having over 90% of preschool and primary school children drink milk...

Thus, with Vinamilk's bid price, Hanoi has saved up to 352 billion VND. This is a very large number that Hanoi has achieved thanks to the public and transparent bidding for a social security program.

Not only choosing the best supplier, Hanoi also sets strict standards on milk quality, ensuring compliance with the requirements of the Ministry of Health. Mr. Pham Xuan Tien - Deputy Director of the Hanoi Department of Education and Training said that milk provided for the program must be supplemented with micronutrients. Specifically, 100ml of the product is supplemented with 3 micronutrients with the following content: vitamin D (1-1.4 ug), iron (1.4-1.9 mg), calcium (114-150 mg).

On the side of the winning bidder, Mr. Do Thanh Tuan - Director of External Relations of Vinamilk said that Vinamilk's winning bid price is 6,286 VND/box for sterilized fresh milk with or without sugar, capacity of 180ml, produced entirely in Vietnam. The product will have the logo "School Milk" and will not be sold commercially in the market.

Vinamilk committed to supporting 23% instead of 20% compared to the bidding price according to the project. This means that the State and parents will only have to contribute 77% of the winning bid price of a carton of milk, of which parents will only have to contribute 47% instead of 50% according to the previously approved project. Thus, parents only need to spend about 2,954 VND/carton of milk for their children to drink milk every day when going to school.

Students of Dong Hieu Primary School (Thai Hoa town) received the milk donation program from Vinamilk's Vietnam Grow Up Milk Fund in 2017. Photo: PV

Efficiency from open and transparent bidding

Reality has proven that public bidding is the "magic wand" that helps Hanoi save thousands of billions of VND. Not only was the School Milk program successful, recently, Chairman of the Hanoi People's Committee Nguyen Duc Chung, during a meeting with voters in Hoan Kiem district, was welcomed by many voters when he announced that through reviewing and organizing bidding for garbage collection in 30 districts, Hanoi's budget saved 4,000 billion VND.

Previously, Mr. Nguyen Duc Chung also requested a review of grass cutting costs. And with just one order from him, the total cost of grass cutting on many avenues and roads in the capital has decreased by 700 billion VND in 1 year.

That reality shows that bidding is always more effective than designated bidding, and saves more than designated bidding. Even though, even in bidding, there are many negative aspects such as blue team, red team... but in general, people basically admit that bidding tends to create competition, reduce costs more than just assigning wages to relatives, "cronies"...

The school milk program to improve nutritional status and contribute to raising the stature of children from kindergarten to primary school by 2020 was approved by the Prime Minister under Decision No. 1340/QD-TT dated July 8, 2016 with the purpose of: "Improving the nutritional status of preschool and primary school children through daily milk feeding activities to improve and reduce the rate of malnutrition, improve the stature and physical strength of Vietnamese children, contributing to the development of human resources in the future".

A program designed for the stature of Vietnamese children must certainly be organized transparently and publicly. From the typical example of public bidding in Hanoi, saving up to 352 billion VND, it can be replicated in localities nationwide. If all other provinces and cities implement the School Milk Program through public bidding, the savings for the state budget and parents will amount to thousands of billions of VND.

In particular, the bidding also selects reputable and capable suppliers to ensure that the program is not interrupted and that the milk supplied meets the quality standards of the Ministry of Health. Public bidding also minimizes incidents that may occur during the implementation of the program.

After a period of piloting the school milk program to evaluate its effectiveness, the People's Committee of Nghe An province recently decided to temporarily stop it to prepare procedures and documents to invite milk suppliers to participate in open bidding, selecting a source of milk with the best quality, lowest cost and most beneficial for students. Hopefully, from the lesson of Hanoi, Nghe An will also choose a capable enterprise to effectively implement the school milk program in the area, ensuring good quality and low cost to bring the best benefits to the State and the people.