Laws of the People's Republic of China

the Ministry of Finance

Order of the Ministry of Finance of the People's Republic of China

No. 18

The "Measures for the Administration of Tenders and Invitations to Bid in Government Procurement of Goods and Services", which have been discussed and adopted at the ministerial affairs meeting, are hereby promulgated, and shall go into effect as of September 11, 2004.

Minister of the Ministry of Finance Jin Renqing

August 11, 2004

Measures for the Administration of Tenders and Invitations to Bid in Government Procurement of Goods and Services

Chapter I General Provisions

Article 1

In order to regulate the procurement activities of the parties involved in government procurement, intensify the supervision and administration of tenders and invitations to bid in government procurement of goods and services, maintain public interests as well as the lawful rights and interests of the parties involved in tenders and invitations to bid in government procurement, the present Measures are hereby enacted in accordance with the "Government Procurement Law of the People's Republic of China" (hereinafter referred to as the Government Procurement Law) and other relevant laws

Article 2

These Measures shall apply to tenders and invitations to bid in government procurement of goods or services (hereinafter referred to as "goods or services") carried out by any purchaser or procurement agency (hereinafter uniformly referred to as "bid-invitation procurement entity").

The procurement agency mentioned in the preceding paragraph means an institution in charge of centralized procurement or any other lawfully accredited procurement agency.

Article 3

Invitations to bid concerning goods or services may be classified into public invitations to bid and invitation-based tenders for bid.

A public invitation for bid means that a bid-invitation procurement entity lawfully invites uncertain suppliers to bid by announcement.

An invitation-based tender for bid means that a bid-invitation procurement entity lawfully and randomly selects three or more suppliers from the qualified ones, whom are invited by an invitation letter to bid.

Article 4

Goods or services must be procured by public invitation for bid if a procurement item reaches the amount limitation for public invitation for bid. If, due to a particular circumstance, a method other than public invitation for bid needs to be adopted, the party concerned shall, prior to the beginning of procurement, win approval from the finance department of the people's government at the level of a city with subordinate districts or at the level of an autonomous prefecture or above.

Article 5

A bid-invitation procurement entity may not break up the whole into parts in respect of the goods or services to be procured by public invitation for bid, or avoid procurement under public invitation to bid by any other means.

Article 6

No entity or individual may impede or restrict suppliers from free participation in bidding activities concerning goods and services, may not designate the brand of goods, the supplier of services or the procurement agency, or illegally interfere with tenders and invitations to bid concerning goods and services by any other means.

Article 7

If, in a tender or invitation for bid concerning goods and services, any staff member of a procurement entity that invites bids, any member of the bid evaluation committee or any other related person has an interest with the suppliers, he must withdraw. If a supplier alleges that any of the aforementioned persons has an interest with any other supplier, it may apply for his withdrawal.

Article 8

The suppliers participating in the bids for supply of goods or services under government procurement (hereinafter referred to as "bidders"), shall be domestic suppliers who supply domestic goods or services. If laws and administrative regulations prescribe that foreign suppliers may participate in tenders and invitations to bid concerning goods and services, they may participate.

If a foreign supplier lawfully participates in the bid for the supply of goods and services, it shall abide by the provisions in these Measures.

Article 9

The tenders and invitations to bid concerning goods and services shall be beneficial to achieving the targets of economic and social development policies of the state, including protecting environment, supporting undeveloped regions and minorities regions, and promoting the development of small-and medium-sized enterprises, and so on.

Article 10

The finance department of each people's government at the county level or above shall lawfully perform its supervision and administration duties over the tenders and invitations to bid concerning goods and services.

Chapter II Invitations to Bid

Article 11

A bid-invitation procurement entity shall organize and arrange the activities of tenders and invitations to bid concerning goods and services in accordance with these Measures.

A purchaser may lawfully entrust a procurement agency to handle an invitation for bid concerning goods or services, or may discretionally organize and arrange the invitation for bid concerning goods or services, provided that it must fulfill the conditions prescribed in Article 12 of these Measures.

An institution of centralized procurement shall independently arrange an invitation for bid for the supply of goods or services in accordance with the law. Other procurement agencies shall handle the matters in the invitation for bid concerning goods or services upon entrustment of the purchaser.

Article 12

Where a purchaser meets the following conditions, it may organize an invitation for bid at its own discretion:

(1)

Having independent capacity to bear civil liabilities;

(2)

Having the capacities of compiling bid-invitation documents and organizing the offer, and having procurement and management staff members in the areas of technology, economy, etc. who are suitable for the project scale and complexity of the procurement in the invitation for bid;

(3)

The purchaser has participated in the government procurement training held by the finance department of the people's government at the provincial level or above.

Where a purchaser fails to fulfill the conditions prescribed in the preceding paragraph, it must entrust a procurement agency to invite bids on its behalf.

Article 13

Where a purchaser entrusts a procurement agency to invite bids on its behalf, it shall conclude an agency agreement with the procurement agency in which the entrusted affairs are specified and the rights and obligations of both parties are included.

Article 14

Where the procurement of goods and services is carried out in the form of public invitation for bid, the bid-invitation procurement entity must promulgate a bid-invitation announcement through a medium designated by the public finance department for releasing government procurement information.

Article 15

Where the procurement of goods and services is carried out in the form of invitation-based tender for bid, the bid-invitation procurement entity shall promulgate an announcement on preliminary qualification examination through a medium designated by the finance department of the people's government at the provincial level or above for releasing government procurement information, and promulgate the qualifications of the bidders. The period of the announcement shall be no less than 7 workdays.

The bidders shall, 3 working days prior to the expiration of the announcement period for pre-examination of qualifications, submit the qualification certificates as required by the announcement. The bid-invitation procurement entity shall randomly select at least three bidders from those who are qualified upon examination, and shall send them bid-invitation documents.

Article 16

Where the procurement of goods and services is carried out in the form of invitation for bid, the time period from the issuance of bid-invitation documents to the bid submission deadline shall be no less than 20 days.

Article 17

An announcement on public invitation for bid shall mainly include the following:

(1)

name, address and contact method of the bid-invitation procurement entity;

(2)

names and number of the bid projects, or the nature of the bid projects;

(3)

qualification requirements for the bidders;

(4)

time, place and method of obtaining bid-invitation documents, as well as the price of the bid-invitation documents; and

(5)

deadline for bidding, time and place for opening of bid.

Article 18

A bid-invitation procurement entity shall compile the bid-invitation documents in light of the characteristics and requirements of the bid projects. The bid-invitation documents shall include the following:

(1)

An invitation for bid;

(2)

Instructions to bidders (including sealing, signing and stamping requirements, etc.);

(3)

Certificates of qualification and creditworthiness that ought to be submitted by the bidders;

(4)

Requirements on quoting bidding prices and compiling bidding documents, and method of paying bid bond;

(5)

Technical specifications, requirements and number of bid projects, including annexes and drawings, etc.;

(6)

Main contract clauses and method of concluding contracts;

(7)

Time of delivery of goods or provision of services;

(8)

Bid evaluation method, bid evaluation standards and clauses of invalidating bids;

(9)

Deadline for bidding, time and place for opening of bid; and

(10)

Other particulars prescribed by the finance department at the provincial level or above.

The tenderee shall prescribe and indicate the substantive requirements and conditions in the bid-invitation documents.

Article 19

The bid-invitation procurement entity shall make paper bid-invitation documents, and may also, through a network medium designated by the finance department, promulgate electronic bid-invitation documents which shall be consistent with the former. The electronic bid-invitation documents shall have the same legal binding force as the paper ones.

Article 20

The bid-invitation procurement entity may require the bidders to submit alternative bid proposals as required by the bid-invitation documents, provided that it shall state the fact in the bid-invitation documents, and clarify the corresponding evaluation standards and treatment measures.

Article 21

All technical standards stated in the bid-invitation documents shall meet the compulsory national standards.

The bid-invitation documents may not require or indicate certain bidders or products, or contain tendentious contents or other contents excluding potential bidders.

Article 22

A bid-invitation procurement entity may, as circumstances demand, ask relevant experts or suppliers for opinions regarding the bid-invitation documents.

Article 23

The price of the bid-invitation documents shall be determined pursuant to the principles of covering the costs of printing such documents, and may not aim at seeking profits, nor may the sum of money for procurement be regarded as the basis for determining the price of the bid-invitation documents.

Article 24

A bid-invitation procurement entity may not terminate its invitation for bid without authorization after having promulgated the announcement on the invitation for bid and sent the invitation letter or the bid-invitation documents to bidders.

Article 25

A bid-invitation procurement entity may, in light of the specific circumstance of the procurement project in the invitation for bid, organize potential bidders to make on-site inspections, or convene a meeting for answering questions prior to the opening of bid, but may not solely or separately organize any on-site inspection which is participated in by one bidder.

Article 26

Before the opening of bid, neither the bid-invitation procurement entity nor the relevant staff members may disclose to others the names or number of the potential bidders who have obtained the bid-invitation documents, or other relevant information on tenders and invitations to bid which might affect fair competition.

Article 27

Where a bid-invitation procurement entity makes necessary clarification or modification to the already sent bid-invitation documents, it shall, at least 15 days prior to the submission deadline of bidding documents as required by the bid-invitation documents, promulgate a modified announcement through a medium designated by the finance department to release government procurement information, and notify in writing all recipients of the bid-invitation documents. Such clarified or modified contents shall be the integral parts of the bid-invitation documents.

Article 28

A bid-invitation procurement entity may, in light of the specific circumstance of the procurement, extend the deadline for bidding and the time for opening of bid, provided that it shall, at least three days prior to the submission deadline of the bidding documents as required by the bid-invitation documents, notify the modified time in writing to all recipients of the bid-invitation documents, and promulgate a modification announcement through a medium designated by the finance department to release government procurement information.

Chapter III Tenders for Bid

Article 29

A bidder is a legal person, other organization or natural person who responds to the invitation for bid, meets the qualifications as stated in the bid-invitation documents, and participates in the bidding competition.

Article 30

A bidder shall compile bidding documents according to the requirements in the bid-invitation documents. The bidding documents shall substantively respond to the requirements and conditions proposed by the bid-invitation documents.

The bidding documents shall be composed of the commercial part, technical part, price part and other parts.

Article 31

A bidder shall, prior to the submission deadline of bidding documents as required in the bid-invitation documents, submit the sealed bidding documents to the bidding place. The bid-invitation procurement entity shall sign to acknowledge the receipt of the bidding documents and preserve them. No entity or individual may unseal the bidding documents prior to the opening of bid.

If the bidding documents are submitted after the submission deadline as required in the bid-invitation documents, they shall be invalid bidding documents. The bid-invitation procurement entity shall refuse to receive them.

Article 32

A bidder may, prior to the deadline for bidding, make supplements or modification to or withdraw the submitted bidding documents, and notify in writing the bid-invitation procurement entity. The supplemented and modified contents shall be signed and affixed with a stamp by the bidder as required by the bid-invitation documents, and be regarded as an integral part of the bidding documents.

Article 33

Where a bidder plans to, in light of the practical situation of the procurement project stated in the bid-invitation documents, deliver the non-principal or non-key tasks of the bid-winning project to others for completion after winning the bid, it shall state such delivery in the bidding documents.

Article 34

Two or more suppliers may form a bidding consortium, and submit a bid in the identity of one bidder.

In the event of bidding in the form of consortium, each party to the consortium shall fulfill the conditions prescribed in Paragraph 1 of Article 22 of the Government Procurement Law. If the purchaser prescribes certain conditions on bidders on the basis of the particular requirements of the procurement project, at least one party to the consortium shall meets the certain conditions prescribed by the purchaser.

All parties to the consortium shall conclude a joint bidding agreement, clearly stipulating the tasks and duties of each party to the consortium, and submit the joint bidding agreement along with the bidding documents to the bid-invitation procurement entity. After all parties to the consortium have signed the joint bidding agreement, none of them may solely bid for the same project in its own name, or form a new consortium to bid for the same project.

The bid-invitation procurement entity may not compel bidders to form a consortium for joint bidding, nor may it restrict competition among bidders .

Article 35

The bidders may not collude with each other to submit bids and quote prices, nor may they impede the fair competition of other bidders, or infringe upon the legitimate rights and interests of the bid-invitation procurement entity or those of other bidders.

No bidder may seek for winning of bid by offering briberies to the bid-invitation procurement entity or any member of the bid evaluation committee, or by other improper means.

Article 36

The bid-invitation procurement entity shall clarify in the bid-invitation documents the sum of guaranty bond for bidding and the method of payment. The sum of bid bond as stipulated by the bid-invitation procurement entity may not exceed 1% of the budgetary estimate of the procurement project.

When submitting a bid, a bidder shall pay the bid bond pursuant to the bid-invitation documents. The bid bond may be paid in the form of cash, check, bank drafts, bank guarantee, etc. If a bidder fails to pay the bid bond pursuant to the requirements in the bid-invitation documents, the bid-invitation procurement entity shall refuse to receive such bidder's bidding documents.

Where a consortium submits a bid, the bid bond may be paid either by one party to the consortium or jointly by all the parties. If the bid bond is paid in the name of one party, it shall be binding upon all parties to the consortium.

Article 37

The bid-invitation procurement entity shall, within 5 working days after the notification of award, refund the bid bond paid by the suppliers who do not win the bid, and within 5 working days after the conclusion of the procurement contract, refund the bid bond paid by the bid-winning supplier. If the bid-invitation procurement entity fails to refund the bid bond within the time limit, it shall, in addition to refunding the principal of the bid bond, pay a fund possession fee at the rate after increasing 20% of the loan interest rate of commercial banks of the corresponding period.

Chapter IV Opening of Bid, Bid Evaluation and Determination of Bid

Article 38

An opening of bid shall be done publicly at the submission deadline of the bidding documents as determined in the bid-invitation documents; the place for opening of bid shall be the place pre-determined in the bid-invitation documents.

The bid-invitation procurement entity shall, prior to the opening of bid, notify the finance department and other relevant departments of the people's government at the same level. The finance department and other relevant departments may supervise the opening of bid on the spot according to circumstances.

Article 39

The opening of bid shall be presided over by the bid-invitation procurement entity, and shall be participated in by the purchaser, the bidders, and representatives from relevant sectors.

Article 40

When a bid is opened, the bidders or their representatives shall inspect whether the bidding documents are sealed, the public notarization institution entrusted by the tenderee may also inspect and notarize such fact. After the bidding documents have been confirmed as inerrable, the tenderee's staff member shall unseal the bidding documents in public, declare the names of the bidders, the bidding prices, price markdowns, the alternative bidding proposals as permitted in the bid-invitation documents, and other main contents of the bidding documents.

Such undeclared substantive contents as the bidding prices, price discounts, and alternative bidding proposals as permitted in the bid-invitation documents, etc. shall not be acknowledged at the time of bid evaluation.

Article 41

If, when a bid is opened, the contents of the schedule on opening of the bid (price quotation schedule) in the bidding documents are inconsistent with those of the detailed list in the bidding documents, the former (i.e., the price quotation schedule) shall prevail.

If the amount in words and the amount in figures in the bidding documents are inconsistent with each other, the amount in words shall prevail. If the amount of total price is inconsistent with the amount calculated from unit prices, the amount calculated from unit prices shall prevail. If the decimal point of the amount of unit price is obviously in a wrong digit position, the total price shall prevail, and the unit price shall be modified simultaneously. In the event of dissents concerning interpreting the bidding documents in different languages, the Chinese version shall prevail.

Article 42

The bid opening process shall be recorded by a special person appointed by the bid-invitation procurement entity, and be kept in archives for future examination.

Article 43

Where there are less than three suppliers participating in the bidding till the end of the deadline for bidding, the bid-invitation procurement entity shall, unless the procurement task is cancelled, report to the finance department of the people's government at the level of a city divided into districts or at the level of an autonomous prefecture or above, and the said finance department shall handle the matter pursuant to the following principles:

(1)

If the bid-invitation documents contain no unreasonable clauses, and the time and procedures for announcing the invitation for bid conform to the provisions, it shall give consent to making the procurement in a way of competitive negotiations, price inquiries or single source;

(2)

If the bid-invitation documents contain any unreasonable clause, or the time and procedures for announcing the invitation for bid do not conform to the provisions, it shall invalidate the bid, and order the bid-invitation procurement entity to make a new invitation for bid in accordance with the law.

If, in the course of the bid evaluation, there are less than three suppliers who fulfill the professional conditions, or less than three suppliers who make substantive response to the bid-invitation documents, the matter may be handled with reference to the preceding paragraph.

Article 44

The bid evaluation shall be organized by the bid-invitation procurement entity, while the bid evaluation committee lawfully established by the bid-invitation procurement entity shall be responsible for the specific bid evaluation affairs, and independently perform the following duties:

(1)

Examining whether the bidding documents meet the requirements in the bid-invitation documents, and making an appraisal accordingly;

(2)

Requiring the bidding suppliers to explain or clarify the matters pertinent to the bidding documents;

(3)

Recommending the name list of the candidate suppliers for winning the bid, or accepting the entrustment of the purchaser to directly determine the bid-winning supplier in a method determined in advance; and

(4)

Reporting illegal acts of interfering with the bid evaluation to the bid-invitation procurement entity or to the relevant departments.

Article 45

The bid evaluation committee shall be composed of the representatives of the purchaser and the relevant experts in technical and economic fields, etc., and the members shall be an odd number of 5 persons or more. Of which, the experts in technical and economic fields, etc. shall be no less than two thirds of the total number of the members. For any technically complicated project whose sum of money for procurement is no less than 3 million Yuan, the experts in technical and economic fields in the bid evaluation committee shall be an odd number of 5 persons or more.

The experts from whom the bid-invitation procurement entity has asked for opinions regarding the bid-invitation documents may no longer act as bid evaluation experts to participate in the bid evaluation. The purchaser may not participate in the bid evaluation of its own procurement project in the identity of an expert. The staff member of a procurement agency may not participate in the bid evaluation of a government procurement item represented by this agency.

The name list of the members of the bid evaluation committee shall be determined prior to the opening of bid in principle, and be kept confidential before the result of invitation for bid is determined.

Article 46

The bid evaluation experts shall be familiar with the relevant policies and regulations on government procurement, tenders and invitations to bid, and acquainted with market conditions, have good professional ethics, obey the disciplines on invitation for bid, have worked for no less than eight years in the related fields, and have senior professional titles or be at the equal professional level.

Article 47

The finance department of the people's government at each level shall manage the experts in a dynamic way.

Article 48

The bid-invitation procurement entity shall randomly select bid evaluation experts from the database of government procurement evaluation experts established by the finance department at the same level or the next higher level.

If it is difficult for the bid-invitation procurement entity to randomly determine suitable bid evaluation experts for a procurement project that is technically complicated and extremely professional, it may, upon consent of the finance department of the people's government at the level of a city with subordinate districts or autonomous prefecture or above, determine the bid evaluation experts selectively.

Article 49

The members of a bid evaluation committee shall perform the following obligations:

(1)

Observing disciplines and laws, performing duties objectively, impartially and incorruptibly;

(2)

Evaluating the bids according to the bid evaluation methods and standards prescribed in the bid-invitation documents, and assuming individual responsibility for their respective evaluation opinions;

(3)

Keeping secret the bid evaluation process and result and the suppliers' business secrets;

(4)

Participating in drawing up the bid evaluation report;

(5)

Cooperating with the finance department in dealing with the complaints; and

(6)

Cooperating with the bid-invitation procurement entity in answering the queries raised by the bidding suppliers.

Article 50

There are three bid evaluation methods for procurement of goods or services in an invitation for bid, namely, the lowest price method, comprehensive scoring method and price quality method.

Article 51

The lowest price method refers to the bid evaluation method in which the determination of candidate suppliers for winning the bid are mainly based on prices, that is, on the premise that all substantive requirements in the bid-invitation documents have been met, the lowest prices are determined according to the uniform price factors, and the bidders who quote the lowest prices shall be regarded as candidate suppliers for winning the bid or the bid-winning supplier.

The lowest price method shall apply to projects of normatively customized commodities and general services.

Article 52

The comprehensive scoring method refers to the bid evaluation method in which the bidders who get the highest total scores in the bid evaluation are regarded as the candidate suppliers for winning the bid or the bid-winning supplier after the bids have been comprehensively evaluated according to all the factors stated in the bid-invitation documents, on the premise that the substantive requirements in the bid-invitation documents are met to the fullest extent.

The main factors of comprehensive scoring include: price, technical and financial status, credit standing, performance, services, the extent of response to the bid-invitation documents, and the corresponding proportion or weight, etc. All the said factors shall be stated in the bid-invitation documents in advance.

At the time of bid evaluation, each member of the bid evaluation committee shall independently evaluate the bidding documents of each effective bidder and score for them, and then add up the scores of each bidder concerning all scoring factors.

Where comprehensive scoring method is adopted, the proportion (weight) of the price score of the involved goods to the total score shall be 30% to 60%, while the proportion (weight) of the price score of the involved services to the total score shall be 10% to 30%. The price of the service to which the unified price is applied, however, shall not be listed as the scoring factor. In case adjustment is needed under a special situation, it shall be approved by the finance department of the people's government at the same level.

Total score in bid evaluation = F1¡ÁA1+F2¡ÁA2+¡­¡­+Fn¡ÁAn

F1, F2¡­¡­Fn are separately the total scores concerning all scoring factors;

A1, A2¡­¡­An are separately the weights of all scoring factors (A1 + A2 + ¡­¡­+An = 1).

Article 53

The price quality method means the bid evaluation method in which the bidding documents are evaluated as required, then the total score of each effective bidder concerning all other scoring factors except the price factor (including technical and financial status, credit standing, performance, services, the extent of response to the bid-invitation documents, etc.) is calculated and divided by the bidding price quoted by the bidder, and the bidder with highest quotient (total score in bid evaluation) is regarded as a candidate supplier for winning the bid or the bid-winning supplier.

Total score in bid evaluation = B/N

B shall be the comprehensive score of the bidders. B = F1¡ÁA1 + F2¡ÁA2 +¡­¡­+ Fn ¡ÁAn, of which: F1, F2, ¡­¡­Fn are separately the total scores concerning all scoring factors except the price factor; A1, A2, ¡­¡­ An are separately the weights of all scoring factors except the price factor (A1+A2+¡­¡­+An = 1).

N is the bidding price quoted by the bidder.

Article 54

The bid evaluation shall conform to the following working procedures:

(1)

Preliminary examinations of bidding documents. The preliminary examinations include qualification examination and conformity examination.

1.

Qualification examination. To, in accordance with the laws, regulations and the stipulations in the bid-invitation documents, examine the qualification certificates, bid bond, etc. in the bidding documents, so as to determine whether the bidding suppliers are qualified for the bidding.

2.

Conformity examination. To, according to the prescriptions in the bid-invitation documents, examine the validity and integrity of the bidding documents, and the extent of response to the bid-invitation documents, so as to determine whether to respond to the substantive requirements in the bid-invitation documents.

(2)

Clarification of relevant issues. As for the contents in the bidding documents, if their meaning is unclear, issues of the same kind are expressed inconsistently with each other, or there is any obvious literal or calculation error, the bid evaluation committee may require in written form (which shall be affixed with the signatures of experts of the bid evaluation committee) the bidders to make necessary clarifications and explanations or to make corrections. A bidder's clarification, statement or supplement and correction shall be made in writing, and be signed by his authorized representative, and may not exceed the scope of the bidding documents or change the substantive contents of the bidding documents.

(3)

Comparison and appraisal. To, according to the bid evaluation methods and standards prescribed in the bid-invitation documents, conduct commercial and technical evaluation, as well as comprehensive comparison and appraisal on the bidding documents whose qualification and conformity are inspected as qualified.

(4)

Recommendation of the name list of the candidate suppliers for winning the bid. The number of the candidate suppliers for winning the bid shall be determined upon the procurement needs; provided, that such candidate suppliers must be listed in sequence.

1.

Where the lowest price method is adopted, they shall be listed in a bottom-to-top order according to the quoted bidding prices. In case the quoted bidding prices are the same, they shall be arranged in an order from superiority to inferiority on the basis of the technical indicators. If the bid evaluation committee considers that, the lowest bidding price of a candidate supplier for winning the bid who is listed in the front or some of its separate price quotations are obviously unreasonable or below the costs, and are possible to affect the quality of the commodity or cause it unable to implement the contract honestly and credibly, the candidate supplier shall be required to provide written documents and make explanations within the prescribed time limit, and submit relevant supporting documents; otherwise, the bid evaluation committee may cancel this bidder's candidacy for winning the bid, and it shall be replaced in sequence by the next following candidate supplier for winning the bid, the rest shall be arranged on the analogy of this.

2.

Where comprehensive scoring method is adopted, they shall be listed in a bottom-to-top order according to the scores in the evaluation. In case the scores are the same, they shall be arranged in a bottom-to-top order on the basis of the quoted bidding prices. In case both the scores and the quoted bidding prices are the same, they shall be arranged in an order from superiority to inferiority on the basis of the technical indices.

3.

Where price quality method is adopted, they shall be listed in a bottom-to-top order according to the quotient scores. If the quotient scores are the same, they shall be arranged in a bottom-to-top order on the basis of the quoted bidding prices. In case both the quotient scores and the quoted bidding prices are the same, they shall be arranged in an order from superiority to inferiority on the basis of the technical indices.

(5)

Compilation of the bid evaluation report. The bid evaluation report is a report compiled by the bid evaluation committee upon the original bid evaluation records and bid evaluation results signed by all the bid evaluation members, its main contents include the following:

1.

The name of the medium through which the announcement on the invitation for bid is published, the date and place for opening of bid;

2.

The name list of the bidders who bought the bid-invitation documents, and the name list of the members of the bid evaluation committee;

3.

Bid evaluation methods and standards;

4.

Records on opening of bid, statement and explanation on the bid evaluation, including the name list of the bidders whose submission of tenders is ineffective, and the reasons thereof;

5.

The result of bid evaluation and the ranked list of the candidate suppliers for winning the bid; and

6.

The bid evaluation committee's suggestion on the award of bid.

Article 55

In the bid evaluation, no one may change the bid evaluation standards or methods, or conditions for wining the bid, which are prescribed in the bid-invitation documents.

Article 56

The bidding documents, at the time of examination on the quality and conformity, shall be treated as ineffective if they are under any of the following circumstances,:

(1)

The bid bond that ought to be paid has not been paid;

(2)

They are not sealed, signed or stamped as required in the bid-invitation documents;

(3)

They fail to fulfill the qualification requirements prescribed in the bid-invitation documents; or

(4)

They do not fulfill other substantive requirements in laws, regulations or the bid-invitation documents.

Article 57

In the case of any of the circumstances prescribed in Items (2) through (4) of Paragraph 1 of Article 36 of the Government Procurement Law during the procurement in an invitation for bid, the bid-invitation procurement entity shall invalidate the bid, and inform all bidding suppliers of the reason.

Unless the procurement task is cancelled, the bid-invitation procurement entity shall, after invalidating the bid, organize the invitation for bid once again. If it is necessary to adopt any other procurement method, it shall, prior to the beginning of the procurement activities, get approval from the finance department of the people's government at the level of a city with subordinate districts or at the level of an autonomous prefecture or above.

Article 58

Necessary measures shall be taken by the bid-invitation procurement entity to guarantee that the bid is evaluated under strict secrecy.

No entity or individual may illegally interfere with or affect the determination of bid evaluation measures, or the process or result of bid evaluation.

Article 59

A procurement agency shall, within 5 working days after the end of bid evaluation, deliver the bid evaluation report to the purchaser.

The purchaser shall, within 5 working days after receipt of the bid evaluation report, determine the bid-winning supplier on the basis of the rank of candidate suppliers for winning the bid as recommended in the bid evaluation report; and may also authorize in advance the bid evaluation committee to determine the bid-winning supplier directly.

If the purchaser organizes an invitation for bid by itself, it shall determine the bid-winning supplier within 5 working days after the end of bid evaluation.

Article 60

Where the bid-winning supplier is unable to implement the government procurement contract due to force majeure or its own reason, the purchaser may conclude the government procurement contract with the candidate supplier for winning the bid who is at the first place following the bid-winning supplier, the rest shall be arranged on the analogy of this.

Article 61

The bid-invitation procurement entity may not, prior to determination of the bid-winning supplier, negotiate with bidding suppliers on such substantive contents as bidding prices, bidding proposals, etc.

Article 62

After the bid-winning supplier has been determined, the bidding result shall be announced through a medium designated by the finance department for releasing government procurement information. The announced contents shall contain the name of the bid project, the name list of the bid-winning supplier, the name list of the members of the bid evaluation committee, the name and telephone number of the bid-invitation procurement entity.

When releasing the announcement, the bid-invitation procurement entity shall send to the bid-winning supplier a notice on winning the bid, which shall have equal binding force on both the purchaser and the bid-winning supplier.

If, after the notice on winning the bid is sent out, the purchaser changes the bidding result, or the bid-winning supplier gives up its bid won, it shall bear legal responsibilities accordingly.

Article 63

If a bidding supplier has any objection against the announcement on wining the bid, it shall, within 7 working days as of the release of the said announcement, raise queries in writing to the bid-invitation procurement entity. The bid-invitation procurement entity shall make a reply on the queried contents within 7 working days after receipt of the bidding supplier's written queries.

In case an querying supplier is not satisfied with the reply of the bid-invitation procurement entity or the bid-invitation procurement entity fails to make a reply within the prescribed time limit, it may, within 15 working days after expiry of the period for reply, make a complaint to the finance department of the people's government at the same level in accordance with the relevant provisions. The finance department shall, within 30 working days after receipt of the complaint, make a decision on handling the matter complained about.

In the course of handling the matters complained about, the finance department may, according to the specific circumstances, notify in writing the bid-invitation procurement entity to suspend concluding the contract or carrying out other relevant activities, provided that the period of suspension may not exceed 30 days.

Article 64

The purchaser or procurement agency shall, within 30 days as of the day when the notice on winning the bid is sent out, conclude a written contract with the bid-winning supplier according to the bid-invitation documents and the bid-winning supplier's bidding documents. The concluded contract may not make substantive modifications to the bid-invitation documents or the bid-winning supplier's bidding documents.

The bid-invitation procurement entity may not bring forward any unreasonable requirement to the bid-winning supplier as the condition for concluding the contract, nor may it conclude privately with the bid-winning supplier an agreement deviating from the substantive contents of the contract.

Article 65

A purchaser or procurement agency shall, within 7 working days as of the conclusion of the procurement contract, submit, in accordance with the relevant provisions, a copy of the procurement contract to the finance department of the people's government at the same level for record.

Article 66

For those contracts provided by laws or administrative regulations to be subject to approval or registration, etc. before taking effect, such provisions shall be abided by.

Article 67

The bid-invitation procurement entity shall set up authentic and complete procurement archives on invitations to bid, for safekeeping of the procurement documents in each procurement activity, and may not forge, alter, conceal or destroy them. The period of keeping the procurement documents shall be at least 15 years from the ending date of the procurement.

Chapter V Legal Responsibilities

Article 68

Under any of the following circumstances, a bid-invitation procurement entity shall be ordered to make corrections within a time limit, be given a warning, and may be imposed upon a fine in accordance with the relevant provisions, moreover, the directly responsible person in charge and other directly responsible personnel shall be legally imposed upon sanctions by their competent administrative authority or the relevant organ, and a notice on this shall be circularized:

(1)

For the procurement that ought to be carried out in the form of public invitation for bid, it carries out such procurement otherwise at its own discretion;

(2)

For the information that ought to be announced through a medium designated by the finance department for releasing government procurement information, it fails to announce such information;

(3)

For a project that must be subject to invitation for bid, it breaks up the whole project into parts, or avoids the invitation for bid by any other means;

(4)

It restricts or exclude potential bidding suppliers with unreasonable requirements, applies differential or discriminatory treatment to potential bidding suppliers; or its bid-invitation documents specify certain suppliers, or contain tendentious contents or other contents excluding potential bidding suppliers;

(5)

The composition of the bid evaluation committee is not in conformity with these Measures;

(6)

It fails to, without any reasonable ground, determine the bid-winning supplier in the lawfully recommended order of the candidate suppliers for winning the bid, or determines the bid-winning supplier out of the candidate suppliers for winning the bid who are lawfully recommended by the bid evaluation committee;

(7)

In the process of inviting bids, it negotiates with any bidder, or concludes the government procurement contract not according to the matters specified in the bid-invitation documents and the bid-winning supplier's bidding documents, or separately concludes with the bid-winning supplier an agreement deviating from the substantive contents of the contract;

(8)

It does not conclude a procurement contract with the bid-winning supplier without any reasonable ground after the notice on winning the bid has been sent out;

(9)

It fails to, according to these Measures, submit the agreement on entrustment for invitation for bid, the bid-invitation documents, the bid evaluation report, the procurement contract and other documents, which ought to be archived, to the finance department of the people's government at the same level for record; or

(10)

It refuses the supervisions or inspections lawfully conducted by the relevant department.

Article 69

Where the bid-invitation procurement entity or any of its employees is under any of the following circumstances, and a crime is constituted, it/he shall be prosecuted for criminal responsibilities in accordance with the law. If no crime is constituted, it/he shall be imposed upon a fine in accordance with the relevant legal provisions, and its/his illegal gains (if any) shall be confiscated. Moreover, it/he shall be imposed upon sanctions by its/his competent administrative authority or the relevant organ in accordance with the law, and a notice on this shall be circularized:

(1)

It collaborates maliciously with any bidder;

(2)

It accepts bribes or obtains other illicit benefits in the course of procurement;

(3)

It provides false information in the supervision or inspection lawfully conducted by the relevant department; or

(4)

It, prior to the opening of bid, divulges the names and number of the potential bidders who have obtained the bid-invitation documents, or the base amount of a tender, or other relevant information on tenders and invitations to bid which might affect fair competition.

Article 70

Where a procurement agency commits any of the unlawful acts in Article 68 or Article 69 of these Measures and the case is serious, it may be disqualified from representing government procurement, and an announcement on this shall be promulgated accordingly.

Article 71

In the event of any of the illegal acts in Article 68 or Article 69 of these Measures, which affects or might affect the bidding result, the matter shall be handled in light of the following circumstances respectively:

(1)

If the candidate suppliers for winning the bid have not been determined, the activity concerning invitation for bid shall be terminated, and the invitation for bid shall be carried out afresh in accordance with the law;

(2)

If the candidate suppliers for winning the bid have been determined but the procurement contract has not been fulfilled, the contract shall be cancelled, and the bid-winning supplier shall be separately determined in sequence from the candidate suppliers for winning the bid; or

(3)

If the procurement contract has been fulfilled, and losses have been caused to the purchaser or the bidders, the person liable shall bear the liabilities for compensation.

Article 72

Where, with regard to a government procurement item that must be subject to centralized procurement, the purchaser does not entrust an institution of centralized procurement to carry out the invitation for bid, or entrusts an intermediary institution unqualified to represent government procurement to handle affairs in the invitation for bid, it shall be ordered to make corrections. If it refuses to make corrections, the payment of funds to it upon the budget shall be ceased, and its superior competent administrative authority or the relevant organ shall lawfully impose sanctions upon the directly responsible person in charge and other directly responsible personnel.

Article 73

Where any bid-invitation procurement entity is in violation of the relevant provisions by concealing or destroying in the process of inviting tenders the relevant documents which ought to be preserved or by forging or altering the relevant documents in the process of inviting tenders, it shall be imposed upon a fine of not less than 20,000 Yuan but mot more than 100,000 Yuan, and its directly responsible person in charge and other directly responsible personnel shall be imposed upon sanctions by its competent administrative authority or the relevant organ in accordance with the law, and a notice on this shall be circularized in addition. If a crime is constituted, it shall be prosecuted for criminal responsibilities in accordance with the law.

Article 74

Where a bidder is under any of the following circumstances, it shall be imposed upon a fine of not less than 0.5% but not more than 1% of the sum for winning the bid in the government procurement item, be listed into the name list of records on misconducts, and be prohibited from participating in government procurement activities within one to three years, in addition, an announcement on this shall be promulgated. If it has any illegal gains, such illegal gains shall be confiscated. If the case is serious, its business license shall be revoked by the administration in charge of industry and commerce. If a crime is constituted, it shall be prosecuted for criminal responsibilities in accordance with the law:

(1)

It provides false documents for winning the bid;

(2)

It defames or repels other bidders by illicit means;

(3)

It collaborates maliciously with the bid-invitation procurement entity or any other bidder;

(4)

It offers bribes or provides other illicit benefits to the bid-invitation procurement entity;

(5)

It negotiates with the bid-invitation procurement entity in the process of inviting tenders, concludes a contract without following the bid-invitation documents or the bid-winning supplier's bidding documents, or separately concludes with a purchaser an agreement deviating from the substantive contents of the contract; or

(6)

It rejects the supervision or inspection conducted by the relevant department, or providing false information.

Where a bidder is under any of the circumstances in Items (1) through (5) of the preceding paragraph, the bid it wins shall be null and void.

Article 75

Where the bid-winning supplier is under any of the following circumstances, the bid-invitation procurement entity may refuse to refund the bid bond already paid. If the circumstance is serious, it shall be listed by the finance department into the name list of records on misconducts, and be prohibited from participating in government procurement activities within one to three years; in addition, a notice on it shall be circularized:

(1)

It does not conclude a contract with the purchaser or procurement agency without any reasonable ground after winning the bid;

(2)

It transfers the bid-winning project to others, or subcontracts the bid-winning project to others without stating the fact in the bidding documents or getting consent from the bid-invitation procurement institution; or

(3)

It refuses to fulfill its contractual obligations.

Article 76

Where any party involved in government procurement commits any of the illegal acts in Article 68 , Article 69 , Article 74 or Article 75 of these Measures, thus causing losses to others, it shall bear civil responsibilities in accordance with the relevant civil laws.

Article 77

In the event of any of the following acts committed by a member of the bid evaluation committee, he shall be ordered to make corrections, be given a warning, and may be imposed upon a fine of not more than 1,000 Yuan in addition:

(1)

He is fully aware that he shall withdraw but does not do so;

(2)

He privately keeps in touch with any bidding supplier within the period from the time when he knows his identity as a member of the bid evaluation committee up to the end of the bid evaluation;

(3)

He leaves his post without permission in the process of bid evaluation, thus affecting the normal progress of the bid evaluation;

(4)

He behaves with unreasonable or improper tendency in the process of bid evaluation; or

(5)

He does not comply with the bid evaluation methods and standards prescribed in the bid-invitation documents to evaluate the bid.

Where any of the above-mentioned acts affects the bidding result, such result shall be invalid.

Article 78

Where a member of the bid evaluation committee or any employee related to the bid evaluation activity commits any of the following acts, he shall be given a warning, his illegal gains shall be confiscated, and in addition, he may be imposed upon a fine of not less than 3,000 Yuan but not more than 50,000 Yuan. For the member of the bid evaluation committee, his qualification as a member shall be revoked, and he shall no longer participate in evaluating the bid for any government procurement item, in addition, his act shall be announced through a medium designated by the finance department for releasing government procurement information. If a crime is constituted, he shall be subject to criminal liabilities in accordance with the law:

(1)

He accepts properties or other illicit benefits from a bidder or any other interested party; or

(2)

He divulges information related to the evaluation and comparison of the bidding documents, recommendation of candidates for winning the bid, and other information concerning the bid evaluation.

Article 79

Where any entity or individual illegally interferes with or affects the process or result of bid evaluation, it/he shall be ordered to make corrections. And the person liable of the entity or the individual shall be imposed upon sanctions by the competent administrative authority at the higher level, or by the relevant organ.

Article 80

Where any functionary in a finance department violates the provisions by abusing his official capacity, neglecting his duties or practicing frauds for personal gain in conducting supervision or inspection on government procurement, he shall be lawfully imposed upon an administrative measure. If a crime is constituted, he shall be prosecuted for criminal liabilities in accordance with the law.

Article 81

Where the finance department, without reason, does not deal with the complaint of a bidder within a time limit, the directly responsible person in charge and other directly responsible personnel shall be imposed upon administrative measures in accordance with the law.

Article 82

In the event of ineffective winning of bid as prescribed in these Measures, such ineffectiveness shall be determined by the finance department at the same level or above. In this case, the bid winner shall be re-determined from other bid winners or candidates for winning the bid in accordance with these Measures, or the invitation for bid shall be carried out afresh in accordance with these Measures.

Article 83

The responsibility to impose the administrative punishment prescribed in these Measures shall be vested in the finance departments of the people's governments at the county level or above.

Article 84

Where a party involved in government procurement refuses to accept an administrative punishment, it may apply for administrative reconsideration in accordance with the law, or directly file an administrative lawsuit to the people's court. In case it does not apply for reconsideration or file a lawsuit to the people's court within the time limit, and does not carry out the decision on the administrative punishment, the organ making the decision on the administrative punishment shall apply for coercive execution to the people's court.

Chapter VI Supplementary Provisions

Article 85

The government procurement of goods or services may be either in the form of procurement upon supply of goods by agreement or in the form of fixed procurement, provided that the procurement upon supply of goods by agreement and the fixed suppliers must be determined by means of public invitation for bid. If, due to a special circumstance, they need to be determined by a means other than public invitation for bid, the party concerned shall get approval from the finance department of the people's government at the provincial level or above.

As for the measures for the administration of procurements upon supply of goods by agreement and fixed procurements, the Ministry of Finance shall separately formulate them.

Article 86

With respect to imported mechanical and electronic products among the goods of government procurement, tenders and invitations to bids shall be carried out in accordance with the relevant measures of the state.

Article 87

With respect to invitations to bids in government procurement of goods and services using the loans of an international organization or foreign government, if the agreement reached between the lender or funds provider and the Chinese party contains other stipulations on the specific conditions for the procurement, such stipulations may apply provided that the national interests and public interests may not be damaged.

Article 88

These Measures shall not apply to urgent procurements carried out due to serious natural disasters or other force majeure, or the procurements involving national security or secret.

Article 89

The responsibility to interpret these Measures shall be vested in the Ministry of Finance.

The finance department of the people's government of each province, autonomous region, or municipality directly under the Central Government may formulate specific enforcement measures in accordance with these Measures.

Article 90

These Measures shall go into effect as of September 11, 2004. The "Interim Measures for the Administration of Tenders and Invitations to bid in Government Procurement", which was promulgated for implementation by the Ministry of Finance on June 24, 1999 (No. 363 [1999] of the Ministry of Finance), shall be abolished simultaneously.