Laws of the People's Republic of China

The Standing Committee of the National People's Congress

Order of the President of the People' s Republic of China

No.68

Government Procurement Law of the People's Republic of China has been adopted at the 28th Meeting of the Standing Committee of the Ninth National People's Congress on June 29, 2002, and promulgated by Order No.68 of the President of the People' s Republic of China on June 29, 2002, it will come into force as of January 1, 2003.

President of the People's Republic of China Jiang Zemin

June 29, 2002

Government Procurement Law of the People's Republic of China ContentsChapter I General Provisions

Chapter II Government Procurement Party

Chapter III Forms of Government Procurement

Chapter IV Procedure for Government Procurement

Chapter V Government Procurement Contract

Chapter VI Query and Complaint

Chapter VII Supervision and Inspection

Chapter VIII Legal Responsibilities

Chapter IX Supplementary Provisions

Chapter I General Provisions

Article 1

This Law is hereby enacted in order to standardize the government procurement behavior, improve the efficiency of use of government procurement funds, safeguard the state interests and public interests of society, protect the legitimate rights and interests of government procurement parties, and promote the building of an honest and clean government.

Article 2

Government procurement within the territory of the People's Republic of China shall be governed by this Law.

Government procurement mentioned therein refers to behaviors of state organs at various levels, undertakings and social organizations that procure with fiscal funds commodities, engineering works and related services within the catalogue made for centralized procurement according to law or procure them in excess of their quotas.

The catalogue and quota for centralized government procurement shall be set forth within the limit of authority as prescribed herein.

Procurement mentioned herein refers to the behavior of obtaining compensated commodities, engineering works and related services, including purchase, lease, consignment, employment, etc. by means of contract.

Commodities mentioned herein refer to substances of different kinds in all forms, including raw and semi-finished materials, fuels, equipment, products, etc.

Engineering works mentioned herein refer to construction projects including the construction, reconstruction, extension, fitting, removal, repair of buildings and component parts.

Services mentioned herein refer to all objects other than commodities and engineering works under government procurement.

Article 3

Government procurement shall be conducted in line with the principles of openness, transparency, fair competition, impartiality and honesty.

Article 4

Where government procurement of engineering works takes the form of public bidding, the bidding law shall prevail.

Article 5

No units and individuals are allowed to obstruct and restrict by whatsoever means suppliers from their free access to the government procurement markets in their locality and industry.

Article 6

Government procurement shall be carried out strictly in accordance with the approved budget for the purpose.

Article 7

Government procurement may be conducted in combination of centralized and scattered ways. The scope of centralized procurement shall be determined on the basis of the catalogue for centralized procurement published by the people's government at the provincial level or above.

For those to be procured by government under central budget, the catalogue for centralized procurement of them shall be determined and published by the State Council; for those under local budget, the catalogue for centralized procurement of them shall be determined and published by the governments of province, autonomous region and centrally administered municipality or organizations with their authority.

Items included in the catalogue for centralized government procurement shall be procured in a centralized way.

Article 8

The quotas for government procurement shall be determined and published by the State Council if they fall into those to be procured under central budget; or by the governments of province, autonomous region and centrally administered municipality or organizations with their authority if they fall into those to be procured under local budget.

Article 9

Government procurement shall be helpful to the realization of the state policy targets for economic and social development, including environment protection, support to the underdeveloped areas and areas of minorities, and promotion of development of small and medium-sized enterprises.

Article 10

Government procurement shall target at domestic commodities, engineering works and services, except in the following cases:

(1)

Where commodities, engineering works or services to be procured are not available or cannot be obtained under reasonable commercial conditions within the territory of China;

(2)

Where such items are to be procured for use outside China; and

(3)

Where other laws and administrative regulations prescribe otherwise for such procurement.

Domestic commodities, engineering works and services afore-mentioned shall be defined in accordance with the relevant regulations of the State Council.

Article 11

Information on government procurement shall be timely released to the public on the news media as designated by the government supervisory and administrative department in charge of government procurement, except such information as involves business secret.

Article 12

If, in the activity of government procurement, the procurement personnel and concerned people have a conflict of interest with the suppliers, they must avoid from the activity. In case the suppliers consider the procurement personnel and concerned people have a conflict of interest with them, they can petition for the avoidance of the former.

Concerned people afore-mentioned include members of the bid appraisal committee if the procurement is carried out by public bidding, members of the negotiation team if it is done by competitive negotiation, and members of the inquiry team if it is done at inquiry price, etc.

Article 13

The fiscal department of the people's governments at various levels is one in charge of supervision and administration of government procurement and shall perform its supervisory and administrative functions regarding government procurement activities according to law.

Other relevant departments of the people's governments at various levels shall, according to law, perform their supervisory and administrative functions in connection with government procurement activities.

Chapter II Government Procurement Parties

Article 14

Government procurement parties mentioned herein refer to various kinds of mainstream entities, including procurement personnel, supplier and procurement agency that have rights to and obligations for government procurement activities.

Article 15

Procurement party refers to state organs, undertakings and social organizations.

Article 16

A centralized procurement organization shall be the procurement agency. People's governments of cities and autonomous prefectures with administrative districts shall set up centralized procurement agencies at their respective levels in light of the requirements for items to be procured.

Centralized procurement agencies shall be non-profitable corporate bodies that deal with procurement matters in accordance with the instructions of procurement parties.

Article 17

When centralized procurement agencies conduct government procurement activities, they shall meet the requirements that the procurement price should be lower than the average market price, the procurement efficiency be higher, the quality of procurement be fine and the services be excellent.

Article 18

When a procurement party purchases items that are included in the catalogue for centralized government procurement, such items must be procured by a centralized procurement agency on its behalf; if the intended items are not included in the catalogue for centralized government procurement, the procurement party may purchase them on their own, or request a centralized procurement agency to do instead on its behalf within a given limit.

Where items included in the catalogue for centralized procurement are those to be procured by the government for general use, a centralized procurement agency should be entrusted to do the job; if, however, they are to be used by any department or by the system it belongs to for special purposes, they should be procured by the department in a centralized way; if they are to be used by any department exclusively for special purposes, the department may procure them on its own with the approval of the people's government at the level of province or above.

Article 19

A procurement parties may entrust any procurement agency that the relevant department under the State Council or the relevant department of the people' s government at the provincial level has certified as qualified to carry out government procurement within the limit of authority.

A procurement party has the option to select any procurement agency, and no unit or individual is allowed to designate in whatsoever form any procurement agency for the procurement party.

Article 20

Where a procurement party entrusts according to law a procurement agency to carry out procurement on its behalf, the procurement party shall enter into an agency agreement with the procurement agency, wherein prescribing the items so entrusted and their respective rights and obligations so agreed upon between both sides.

Article 21

Suppliers mentioned herein refer to corporate bodies, other organizations or natural persons that supply commodities, engineering works or services to procurement parties.

Article 22

Suppliers participating in government procurement activities shall meet the following requirements:

(1)

They have the capability of undertaking civil liability;

(2)

They have a fine business reputation and a sound financial accounting system;

(3)

They have the necessary equipment and professional skills to perform contracts;

(4)

They have a fine record of paying taxes and surcharges and social security funds according to law;

(5)

They have no record of material malpractice in its business operation during the three years before participation in the government procurement activity; and

(6)

They meet any other requirements as may be prescribed by laws and administrative regulations.

Procurement parties may, in light of the special requirements for the items to be procured, set forth special terms and conditions for the suppliers to meet, but are not allowed to give suppliers different or discriminative treatment by means of unreasonable requirements.

Article 23

Procurement parties may request suppliers involved in government procurement to provide documents evidencing their qualification and business performance, and carry out examination of their qualification in light of the conditions set for them herein and on the basis of the specific requirements of the items to be procured for them to meet.

Article 24

More than two natural persons, corporate bodies or other organizations may be formed into an associate to participate government procurement in the capacity of one supplier.

Suppliers participating in government procurement in the form of an associate should all meet the requirements as set forth in Article 22 herein and shall provide the procurement party with the agreement of association, indicating the jobs and obligations they undertake respectively. All parties to an associate as one side should enter into a procurement agreement with the procurement party as the other side, assuming several and joint liabilities to the procurement party for the things and matters as agreed upon therein.

Article 25

Government procurement parties are prohibited from colluding with each other to infringe upon state interests, public interests of society and the legitimate rights and interests of others involved or excluding other suppliers from competition by whatsoever means.

Suppliers are prohibited from winning the bid or concluding any transaction by offering a bribe or by any other illicit means towards the procurement party, procurement agency, member of the bid appraisal committee, member of the competitive negotiation team and member of the inquiry team.

Procurement agencies are prohibited from obtaining unlawful benefits from the procurement parties by bribe or any other illicit means.

Chapter III Forms of Government Procurement

Article 26

Government procurement shall take the following forms:

(1)

public bidding;

(2)

invitation for bid;

(3)

competitive negotiation;

(4)

unitary source purchase;

(5)

inquiry; and

(6)

other forms as may be approved by the government procurement supervisory and administrative department under the State Council in charge of government procurement.

Public bidding should be taken as the main form of government procurement.

Article 27

Where procurement parties should purchase commodities or services in the form of public bidding, the specific quotas shall be stipulated by the State Council if they fall into those to be procured under central budget, or by the people's governments of province, autonomous region and centrally administered municipality if they are included in the catalogue for local government procurement under local budget. In special cases where forms other than public bidding have to be adopted, approval should, before start of the procurement activity, be obtained from the procurement supervisory and administrative department of the people's government of city or autonomous prefecture with administrative districts.

Article 28

Procurement parties are prohibited from breaking up the whole of commodities or services into parts that should be procured by public bidding in attempt to avoid procurement by public bidding.

Article 29

Commodities or services in line with either of the following cases may be procured by invitation for bid:

(1)

they are of special nature and can only be procured from a limited number of suppliers; or

(2)

The percentage of expenses in the total value of government procurement is too large if they are procured by public bidding.

Article 30

Commodities or services in line with any of the following cases may be procured by competitive negotiation according to this law:

(1)

after public bidding, there is no supplier tender or qualified tender or re-bidding is not possible;

(2)

specific descriptions or requirements cannot be determined for the sake of complex technology or special nature;

(3)

the time limit cannot meet the demand of users if public bidding is adopted;

(4)

The total price of the commodities or services cannot be worked out beforehand.

Article 31

Commodities or services in line with any of the following cases may be procured by unitary source purchase:

(1)

they can only be procured from a sole supplier;

(2)

procurement from other suppliers is impossible due to the occurrence of an unexpected critical situation;

(3)

Additional procurement should be made from the original suppliers in order to keep consistency with the previous procurement or meet the needs of supportive services, and the total amount of additional procurement does not exceed 10% of the original contract value of procurement.

Article 32

Where the description and standard of commodities to be procured are unified, and commodities on hand are sufficient with a small margin of change in price, they may be procured in the form of inquiry according to this law.

Chapter IV Procedure for Government Procurement

Article 33

When the department with the budgeting function prepares the budget for the ensuing fiscal year, the items of government procurement and capital budget for the year should be listed and reported to the fiscal department for consolidation. The departmental budget shall be approved in accordance with the limit of administrative power and procedure.

Article 34

Where commodities or services are to be procured in the form of invitation for bid, the procurement party shall select at random more than three suppliers from among the qualified suppliers and send them invitation for bid.

Article 35

Where commodities or services are to be procured in the form of invitation for bid, the length of time between the date the bid documents are sent out and the deadline for the submission of tender documents by the tender shall be no less than 20 days.

Article 36

Where procurement takes the form of invitation for bid, the bid should be cancelled in any of the following cases:

(1)

there are no more than three suppliers that are eligible or give essential response to the bid documents;

(2)

there is any illegal and breaching act that affects fair procurement;

(3)

the offer of the tender exceeds the budget for procurement and is not affordable by the procurement party;

(4)

The task of procurement is cancelled for any important change.

After cancellation of the bid, the procurement party should notify the tender of the reason therefor.

Article 37

After cancellation of the bid, arrangement for a new invitation for bid should be made unless the task of procurement is cancelled. If it is necessary to adopt any other form of procurement, approval should, before the start of procurement activity, be obtained from the government procurement supervisory and administrative department of the people's government of city and autonomous prefecture with administrative districts.

Article 38

Where the form of competitive negotiation is adopted for procurement, the following procedure should be observed:

(1)

Formation of a negotiation team. The team shall comprise more than three members in odd number who are representative and relevant experts of the procurement party, among them experts should account for no less than two-thirds (2/3) of the total number of its members.

(2)

Preparation of negotiation documents. These documents shall definitely specify the procedure and contents of negotiation, terms and conditions of the draft contract, the criterion for conclusion of transactions, etc.

(3)

Listing the names of suppliers to be invited to negotiation. The negotiation team shall select no less than three suppliers from among those eligible on the list and send them the negotiation documents.

(4)

Negotiation. All members of the negotiation team shall together negotiate with the candidate suppliers respectively. During the period of negotiation, neither party may disclose the technical know-how, price and other information of any other supplier. If there is any material change in the negotiation documents, the negotiation team shall notify in writing all the suppliers participating the negotiation.

(5)

Determination of the conclusive supplier. After completion of negotiation, the negotiation team shall demand all the participant suppliers to give a final offer within a given deadline, and the procurement party shall select from the candidates suggested by the negotiation team and determine the conclusive supplier under the principle that the procurement requirements in amount, quality, service and lowest offer are all met and notify the result to all the other failing participant suppliers.

Article 39

Where the form of unitary source purchase is adopted, the procurement party and the supplier shall abide by the principles as stipulated herein, and the procurement should be completed on the basis of guaranteeing the quality of the procured items and of the reasonable price as agreed upon between both sides.

Article 40

Where the form of inquiry is adopted for procurement, the following procedure shall be abided by:

(1)

Formation of an inquiry team. The inquiry team shall comprise more than three members in odd number who are representative and relevant experts of the procurement party, among them experts should account for no less than two-thirds (2/3) of the total number of its members. The inquiry team should make stipulations regarding the price structure, the criterion for conclusion of transaction, and other items of the procurement.

(2)

Listing the names of suppliers to be inquired. The inquiry team shall select no less than three suppliers from among those eligible on the list in light of its procurement demand, and issue a notice of inquiry for them to offer price.

(3)

Inquiry. The inquiry team shall demand the inquired supplier to give a one-time offer without alteration.

(4)

Determination of the conclusive supplier. The procurement party shall select and determine the conclusive supplier under the principle that the procurement requirements for amount, quality, service and lowest offer are all met and notify the result to all the other failing participant suppliers.

Article 41

The procurement party or the procurement agency with its authority shall organize an inspection on how the supplier has performed the contract. Where large-size or complex items for government procurement are involved, the state-certified quality testing organization should be invited to participate in the inspection. All the members of the inspection party should sign their names on the certificate of acceptance and bear the corresponding legal liability.

Article 42

The procurement party and the procurement agency shall keep in safe custody the procurement documents for each item under the government procurement catalogue, and are prohibited from forging, altering, concealing or destroying any of them. The duration of custody of procurement documents shall be at least 15 years counting from the date of completion of procurement.

Procurement documents include the record of procurement activities, budget for procurement, bid documents, tender documents, bid appraisal standards, appraisal report, bid decision document, contract, certificate of acceptance, and response to inquiry, decision to settle the complaint and other related documents and information.

The record of procurement activities shall at least contain the following contents:

(1)

category and name of the item to be procured;

(2)

budget for procurement, structure of funds and contract price;

(3)

form of procurement, and the reason if any form other than public bidding is adopted;

(4)

requirements and reasons set for the suppliers to be invited and selected;

(5)

bid appraisal standards, and the reason why the bid winner is determined;

(6)

reason for cancellation of the bid; and

(7)

corresponding record if any form other than public bidding is adopted.

Chapter V Government Procurement Contract

Article 43

Government procurement contracts shall be governed by the Contract Law. The rights and obligations of the procurement party and the supplier shall be agreed upon in the form of contract under the principle of equality and voluntariness.

A procurement party may appoint any procurement agency to conclude, on its behalf, a government procurement contract with the supplier. Where a contract is signed by a procurement agency in the name of the procurement party, the power of attorney issued by the procurement party shall be required and treated as annex to the contract.

Article 44

A government procurement contract shall be made in writing.

Article 45

The procurement supervisory and administrative department under the State Council shall, in consultation with other departments thereunder, stipulate what specific terms and conditions must be contained in a procurement contract.

Article 46

The procurement party, the bid winner and conclusive supplier shall, within 30 days after the issue of notices of winning the bid and concluding the transaction, enter into a government procurement contract on the items as determined by the procurement documents.

The notices of winning the bid and concluding the transaction shall have binding force upon both the bid winner and the supplier. If, after issue of the notices of winning the bid and concluding the transaction, the procurement party alters the results of bid winning and conclusion of transaction, or the bid winner and the supplier give up the bid and the transaction, the breaching party shall bear the legal liability according to law.

Article 47

The procurement party shall, within 7 business days after the date on which the government procurement contract is signed, submit a copy thereof to the procurement supervisory and administrative department of the government at the same level for its record.

Article 48

The bid winner and the conclusive supplier may, with the approval of the procurement party, perform the contract in the form of sub-contract.

Where a government procurement contract is to be performed in the form of sub-contract, the bid winner and the conclusive supplier shall be responsible to the procurement party in respect of the items procured and those sub-contracted, and the sub-conclusive suppliers be responsible to the procurement party in respect of the items sub-contracted .

Article 49

In case the procurement party needs an increase of the same commodities, engineering works or services as the contracted subject in the process of performance, supplementary contracts may be concluded with the procurement party, provided all the other terms and conditions remain unchanged, and the total amount of such supplementary contract prices does not exceed 10% of the original contract price.

Article 50

Both parties to a government procurement contract shall not alter, suspend or terminate the contract without mutual consent.

In case the continuous performance of a government procurement contract would do harm to the interests of the state and society, both parties thereto shall alter, suspend or terminate the contract. The party with fault shall bear the liability of compensating the other; if, however, both parties have faults, they shall bear their respective liability.

Chapter VI Query and Complaint

Article 51

When the supplier has any question about the government procurement activities, the question may be put to the procurement party, and the procurement party shall give a reply but the reply must not involve any business secrete.

Article 52

Where the supplier deems that the procurement documents, the procurement process and the result of winning the bid and concluding the transaction have infringed upon its rights and interests, he may, within 7 business days after he knows or should know such infringement, raise a query in writing to the procurement party.

Article 53

The procurement party shall, within 7 business days after receipt of the written query, give a reply and notify in writing the query supplier and other suppliers, but the reply must not involve any business secrete.

Article 54

Where the procurement party entrusts a procurement agency to make procurement on its behalf, the supplier may consult or make a query of the procurement agency, and the latter shall give a reply to the former within the limit of authority as prescribed in Articles 51 and 53.

Article 55

If the query supplier is not satisfied with the reply given by the procurement party or its agency, or the procurement party or its agency fails to give a reply within the given period of time, he may, within 15 business days after expiry of the given period, lodge a complaint with the government procurement supervisory and administrative department of the people's government at the same level.

Article 56

The government procurement supervisory and administrative department shall, within 30 business days after receipt of any complaint, make a decision on the matter complained about and notify in writing the complainant and the persons involved in the complaint.

Article 57

When the government procurement supervisory and administrative department is dealing with the complaint, it may notify in writing the procurement party to cease its procurement activity if the situation warrants it, provided the duration of suspension does not exceed 30 days at longest.

Article 58

In case the complainant is not satisfied with the decision on his complaint or the government procurement supervisory and administrative department fails to deal with the case within the time limit, the complainant may petition for administrative reconsideration or lodge an administrative lawsuit at the people's court.

Chapter VII Supervision and Inspection

Article 59

The government procurement supervisory and administrative department shall strengthen supervision and inspection of government procurement activities and organizations in charge of centralized procurement.

Supervision and inspection shall include the following main items:

(1)

the implementation of the laws, administrative regulations and rules regarding government procurement;

(2)

the implementation of the requirements in respect of the scope, form and procedure of procurement; and

(3)

the professional quality and technical ability of the government procurement personnel.

Article 60

The government procurement supervisory and administrative department shall set up no organization for centralized procurement and is not allowed to participate any procurement activities in connection with government procurement items.

The procurement agency should have no relationship of subordination to or other relationship of interest with the administrative organ.

Article 61

A centralized procurement organization should have a sound internal supervisory and administrative system. The procedures for making and implementing decisions on procurement activities should be clearly defined, and the decision-makers and the implementers should supervise and restrain each other. The functions and powers of the personnel responsible for procurement and those for examination of contract and check and acceptance of procured goods should be expressly defined and separated.

Article 62

Personnel in charge of centralized procurement should have corresponding professional quality and technical ability, which meet the requirements for one to hold a professional post as prescribed by the regulations of the government procurement supervisory and administrative department.

The centralized procurement organization should strengthen education and training of its working personnel, and at a regular time make appraisal of their professional level, work achievement and professional ethics. Any procurement personnel found to be disqualified after being appraised shall not continue holding their post.

Article 63

The procurement standards for government procurement items should be made public.

If the forms of procurement stipulated by this law are adopted, the procurement party shall, after completion of procurement activities, announce the result of procurement to the public.

Article 64

The procurement party must carry out procurement in the forms and through the procedure as prescribed by this law.

No units and individuals may be allowed to violate the provisions of this law, and the procurement party or its procurement personnel shall make procurement from the designated suppliers.

Article 65

The government procurement supervisory and administrative department shall launch an inspection of the procurement activities regarding government procurement items, and the government procurement party involved should report the real situation and provide related information and documents.

Article 66

The government procurement supervisory and administrative department shall make an appraisal of the centralized procurement organization in respect of price, result of fund-efficiency , service quality, reputation and compliance with law, and make public the result of the appraisal at a regular time.

Article 67

The government administrative departments responsible for government procurement in accordance with laws and administrative regulations shall, in light of division of their duties, intensify supervision over government procurement activities.

Article 68

The audit department shall supervise government procurement by means of audit. The government procurement supervisory and administrative department and all the government procurement parties should accept the supervisory audit by the audit department in respect of their government procurement activities.

Article 69

The supervisory department shall implement supervision over the government organizations, state civil servants and other personnel authorized by state administrative departments who participate government procurement activities.

Article 70

Any units and individuals have the right to make complaint against and accuse of any violation of law in the government procurement activities, and the departments and organizations concerned should duly deal with such offences within and in light of their respective functions and powers.

Chapter VIII Legal Responsibilities

Article 71

In any of the following cases procurement parties and procurement agencies shall be enjoined to make rectification, be given a disciplinary warning and may be fined, and the person in charge and others directly responsible for its occurrence shall be given a punishment and made public by circular by the competent administrative department or the government organization concerned:

(1)

To procure in the form other than public bidding without approval;

(2)

To raise the procurement standards without approval;

(3)

To entrust procurement matters to any institution unqualified to handle government procurement agency business;

(4)

To give different or discriminative treatment to suppliers by means of unreasonable terms and conditions;

(5)

To conduct consultation and negotiation with the tenders in the process of procurement by public bidding;

(6)

To decline concluding a procurement contract with the bid winner and the supplier after issue of the notice of bid winning and conclusion; and

(7)

To refuse supervision and inspection to be conducted by the competent department according to law.

Article 72

In any of the following cases procurement parties and procurement agencies and their working personnel shall be affixed the criminal liability if it constitutes a crime; or punished in the form of a fine if it does not constitute a crime, and by confiscation of their illegal earnings if there are any, or given administrative sanction if the people involved are state civil servants:

(1)

to willfully collude with the supplier or procurement agency;

(2)

to accept bribes or obtain any other illegitimate benefits in the process of procurement;

(3)

to provide false information when the department concerned carries out supervisory inspection according to law;

(4)

to disclose the lower limit on bids before opening of bids.

Article 73

If the offence in any case under the previous two articles affects or would possibly affect the result of bid winning and conclusion, the case shall be handled in light of the following circumstances:

(1)

Termination of the procurement activity if the bid winning and conclusive supplier are not yet determined;

(2)

Cancellation of the contract and re-determination of the bid winner and conclusive supplier from qualified bid winners and candidate conclusive suppliers after the bid winner and conclusive supplier are determined but the procurement contract has not yet been performed;

(3)

Loss caused to the procurement party and the supplier after performance of the procurement contract, the compensation liability shall be assumed by the responsible people.

Article 74

If any procurement party does not request a centralized procurement agency to procure in a centralized way such government procurement items as should be, the government procurement supervisory and administrative department shall enjoin it to make rectification, or stop payment of funds as budgeted if it refuses rectification, and its person in charge and others directly responsible shall be given punishment by its higher administrative department or the department concerned.

Article 75

If any procurement party fails to make public the standard for and result of procurement for government procurement items, it shall be enjoined to make rectification and its directly responsible person in charge be given a disciplinary punishment according to law.

Article 76

If any procurement party or procurement agency conceals, destroys the procurement documents that should be retained, or forges, alters the procurement documents in violation of the provisions of this law, the government procurement supervisory and administrative department shall fine them for over RMB 20,000 up to RMB 100,000, and give a disciplinary punishment to its persons in charge directly responsible for the case according to law, or affix them the criminal liability if the offence constitutes a crime.

Article 77

In any of the following cases the suppliers shall be fined within the range from 0.5% to 1% of the amount of procurement, be included in the name list of those with an unclean record, and prohibited from participating government procurement activities for one to three years. If they have any unlawful gains, such gains shall be confiscated; if the case is serious, their business license shall be revoked by the administration for industry and commerce; if their offence constitutes a crime, they shall be affixed the criminal liability:

(1)

to win the bid and conclude a transaction by providing false information and documents;

(2)

to vilify and squeeze out other suppliers by illicit means;

(3)

to willfully collude with the procurement party, other suppliers or the procurement agency;

(4)

to offer a bribe or provide other unlawful benefits to the procurement party and procurement agency;

(5)

to consult and negotiate with the procurement party during the period of procurement by public bidding;

(6)

to reject the supervision and inspection by the department concerned or to provide false information.

In any case under (l) to (2) above, the bid won and transaction concluded shall be nullified.

Article 78

If a procurement agency commits any illegal activities in the operation of government procurement, it shall be fined according to relevant laws, and its qualification for handling the related business shall be cancelled. Its criminal liability shall be affixed if its act constitutes a crime.

Article 79

Government procurement parties violating laws in any case under Articles 71, 72 and 77 and having caused loss to others shall bear the civil liability in accordance with the relevant provisions of the civil laws.

Article 80

Working personnel of the government procurement supervisory and administrative department abusing their power and position, neglecting their duty and playing favoritism and committing irregularities shall be given an administrative sanction, or be affixed the criminal liability if their act constitutes a crime.

Article 81

If the government procurement supervisory and administrative department fails to dispose of any complaint lodged by suppliers, its people in charge and others directly responsible for the case shall be given an administrative sanction.

Article 82

If, at the time of appraising the performance of a centralized procurement institution, the government procurement supervisory and administrative department gives false presentations and conceals the real situation or it fails to carry out appraisal and announce the result of appraisal at a regular time, it should duly make rectification, and its higher authorities or the supervisory department shall circulate a notice of criticism regarding the directly responsible persons and give an administrative sanction to the directly responsible person in charge.

If any centralized procurement institution reports false achievements to and conceals the real situation from the government procurement supervisory and administrative department, it shall be fined within the range of RMB20, 000 to RMB200, 000, and circulated a notice of criticism, or even its qualification of procurement agency shall be cancelled if the case is serious.

Article 83

If any units or individuals obstruct suppliers from entering the government procurement market of, their locality or in their industry, they shall be enjoined to make rectification within a given time; failing which their higher administrative department or the department concerned shall punish the persons of the units or individuals in charge.

Chapter IX Supplementary Provisions

Article 84

If it is prescribed otherwise in the procurement agreements between the lenders, financing parties on one side and the Chinese party on the other on government procurement by using loans from international organizations and foreign governments, the provisions therein may be applicable, provided the state interests and public interests are not infringed upon.

Article 85

Emergent procurement carried out in case of force majeure including serious natural and other disasters and procurement involving state security and secrete shall not be governed by this law.

Article 86

The laws and regulations for military procurement shall be separately formulated by the Military Commission of the Central Committee of the Chinese Communist Party.

Article 87

The specific steps and methods for the implementation of this law shall be formulated by the State Council.

Article 88

This law shall come into force on January 1, 2003.