Laws of the People's Republic of China

National Development and Reform Commission, the Ministry of Construction, the Ministry of Railways, the Ministry of Communications, the Ministry of Information Industry, the Ministry of Water Resources and the Civil Aviation Administration of China

Order of the National Development and Reform Commission, the Ministry of Construction, the Ministry of Railways, the Ministry of Communications, the Ministry of Information Industry, the Ministry of Water Resources and the Civil Aviation Administration of China

No.27

With a view to standardizing the bidding and tendering activities for goods used for engineering construction projects, safeguarding the interest of the state, social public interest and legitimate rights and interests of the parties involved in the bidding activities, ensuring the quality of projects and increasing investment returns, and in accordance with the Bidding Law of the People's Republic of China and the division of functions of the relevant departments under the State Council, the National Development and Reform Commission, the Ministry of Construction, the Ministry of Railways, the Ministry of Communications, the Ministry of Information Industry, the Ministry of Water Resources and the Civil Aviation Administration of China have adopted the Measures Governing Tender and Bidding for Goods in Engineering Construction Projects, which are hereby promulgated and shall come into force as of March 1, 2005.

Makai, Director of the National Development and Reform Commission

Wang Guangtao, Minister of the Ministry of Construction

Liu Zhijun, Minister of the Ministry of Railways

Zhang Chunxian, Minister of the Ministry of Communications

Wang Xudong, Minister of the Ministry of Information Industry

Wang Sucheng, Minister of the Ministry of Water Resources

Yang Yuanyuan, Director of the Civil Aviation Administration of ChinaJanuary 18, 2005

Measures Governing Tender and Bidding for Goods in Engineering Construction Projects

Chapter I General Provisions

Article 1

These Measures are formulated with a view to standardizing the bidding and tendering activities for goods used in engineering construction projects, safeguarding the interest of the state, social public interest and legitimate rights and interests of the parties involved in the bidding activities, ensuring the quality of projects and increasing investment returns, and in accordance with the Bidding Law of the People's Republic of China and the division of functions of the relevant departments under the State Council.

Article 2

These Measures shall be applicable to the bidding and tendering activities for goods used in engineering construction projects legally subject to bidding within the territory of the People's Republic of China. The goods as mentioned in the preceding Paragraph refer to important equipment and materials for engineering construction projects.

Article 3

Those engineering construction projects that comply with the scope and standards as prescribed by the Provisions on the Bidding Scope and Scale Standards for Engineering Construction Projects (Order No.3 of the former State Planning Commission) shall be conducted by choosing goods suppliers through bidding.No entity or individual may evade bidding activities by splitting a project legally subject to bidding into parts or by any other means.

Article 4

The principles of openness, fairness, justice and good faith shall be observed in bidding and tendering activities for goods in engineering construction projects. No bidding and tendering activity for goods shall be restricted on the ground of areas or departments.

Article 5

Bidding and tendering activities for goods in engineering construction projects shall be responsible by tenderees pursuant to law.When the tenderee of an engineering construction project carries out an overall contracting bidding for the project, and if the goods outside the overall contracting scope amount reached to the state scale standards, the tenderee of the engineering construction project shall organize the bidding and tendering activities according to law.When the tenderee of an engineering construction project carries out an overall contracting bidding for the project, if the goods in the form of temporarily evaluated price as included in the overall contracting scope amount reached to the state scale standards, the bid winner of the overall contracting and the tenderee of the engineering construction project shall jointly organize the bidding and tendering activities. The assumption of risks and liabilities by both parties involved shall be stipulated in the contract.The tenderee of the engineering construction project or the bid winner of the overall contracting may entrust a bidding agency that has lawfully obtained the qualification to undertake the bid invitation agency services. The guidance price set down by the government shall be implemented for the charges for the bid invitation agency services, which shall be paid by the tenderee; if there are other agreements among the tenderee, the bidding agency and the bidder, such agreements shall prevail.

Article 6

The departments of development and reform, construction, railways, communications, information industry, water resources and civil aviation, etc. at all levels shall, according to the division of functions of administrative supervision over engineering construction projects set forth by the State Council and the people's governments at all levels, conduct supervision over the bidding and tendering activities for goods in engineering construction projects, and investigate and punish illegal acts therein.

Chapter II Invitations to Bid

Article 7

The tenderee of an engineering construction project shall be the legal person or any other organization that proposes the project for bid invitation and that carries out the bid invitation. The bid winner of a overall contracting as set forth in Paragraph 3 of Article 5 of these Measures shall also be a tenderee when carrying out the joint bid invitation.

Article 8

An engineering construction project legally subject to bidding shall meet the following conditions for carrying out bidding for goods:

(1)

The tenderee has been established according to law;

(2)

Where examination, approval or archival formalities are required pursuant to the relevant state provisions, the said formalities have been completed;

(3)

There are corresponding funds or the source of funds has been confirmed; and

(4)

Being able to put forward requirements on the use of goods and on the technologies.

Article 9

For an engineering construction project legally subject to bidding, if the project shall be submitted to the examination and approval department for examination and approval according to the state provisions concerning the examination and approval of investment projects, the tenderee shall include the relevant bid invitation contents such as the bid invitation scope, the bid invitation method (open bid invitation or selective bid invitation) and the bid invitation organizational form (self bid invitation or entrusted bid invitation) in the feasibility study report to the examination and approval department for examination and approval, and the project examination and approval department shall send a copy of its opinions on the bid invitation to the relevant administrative supervision department.For an enterprise investment project that applies to financial funds arranged by government, the bid invitation contents as prescribed in the preceding Paragraph shall be decided in the official reply by the examination and approval department for fund application reports.

Article 10

Bid invitations for goods include open bid invitations and selective bid invitations.

Article 11

The method of open bid invitation shall be adopted for the purchase of goods for state key construction projects and local key construction projects as determined by the people's governments of all provinces, autonomous regions and municipalities directly under the Central Government; and the method of selective bid invitation may be adopted upon approval if it is under any of the following circumstances:

(1)

The technologies of goods are complex or have other special requirements, and there are only a few potential bidders available;

(2)

The project involves state security, state secret or disaster rescue, and is fit for the bid invitation but not for open bid invitation;

(3)

The money saved by the open bid invitation to be carried out is not worth the costs incurred therefrom;

(4)

Other circumstances that are unfit for open bid invitation as provided by laws and administrative regulations.Selective bid invitations for goods for key state construction projects shall be subject to the approval of the development and reform department under the State Council; and selective bid invitations for local key construction projects shall be subject to the approval of the people's governments of the relevant provinces, autonomous regions and municipalities directly under the Central Government.

Article 12

In the case of open bid invitations, the tenderee shall issue announcements on the bid invitation. With respect to the goods legally subject to the bidding, the announcements on the bid invitation shall be published in newspapers or periodicals or information networks designated by the State.In the case of selective bid invitations, the tenderee shall issue bid invitation letters to 3 or more specific legal persons or other organizations with the goods supply capacity and with good credit standing.

Article 13

An announcement on bid invitation or a bid invitation letter shall indicate at least the following information:

(1)

Name and address of the tenderee;

(2)

Names, quantity, technical specifications and the fund source of goods subject to the bid invitation;

(3)

Place and date of delivery;

(4)

Place and time for obtaining bid invitation documents or preliminary qualification examination documents;

(5)

Charges to be collected for bid invitation documents or preliminary qualification examination documents;

(6)

Place and expiry date for submitting applications for preliminary qualification examination or the tender documents; or

(7)

Qualifications required as a bidder.

Article 14

The tenderee shall make the bid invitation documents or preliminary qualification examination documents in public at the time and place as set forth in the announcement on bid invitation or the bid invitation letter. It shall be no less than 5 working days computed from the day when the bid invitation documents or preliminary qualification examination documents are sent out to the day when the sending thereof is stopped. The tenderee shall affix its seal or stamp on the bid invitation documents or preliminary qualification examination documents. The tenderee may issue the bid invitation documents through information networks or other media. The bid invitation documents issued through information networks or other media have the same legal binding force as that of written bid invitation documents and, in the case of inconsistence, the written bid invitation documents shall prevail, unless otherwise provided for by laws, administrative regulations or the bid invitation documents.The charges collected for bid invitation documents or preliminary qualification examination documents shall be reasonable and may not be for the purpose of making profit. No bid invitation document or preliminary qualification examination document may be returned after they are sent out, unless it is due to any force majeure. The tenderee may not illegally terminate the bid invitation after it has issued the announcement on bid invitation, or has sent out the bid invitation letters, the bid invitation documents or preliminary qualification examination documents. In case the bid invitation is terminated due to any force majeure, a bidder shall be entitled to claim for returning the bid invitation documents and take back the charges for purchasing the bid invitation documents.

Article 15

The tenderee may, according to the characteristics and needs of the goods subject to the bidding, make qualification examinations of the potential bidders or bidders where there are provisions in laws or administration regulations on the qualifications of potential bidders or bidders such provisions shall be observed.

Article 16

The qualification examination shall be divided into preliminary qualification examination and post qualification examination.The preliminary qualification examination refers to the qualification examination of the potential bidders made before the tenderee sells the bid invitation documents or sends out bid invitation letters. As a general rule, the said method shall be applicable to open bid invitations with a lot of potential bidders or those for bulk goods or for goods with complex technologies, or to selective bid invitations for which it is necessary to choose potential bidders openly. The post qualification examination refers to the qualification examination of bidders made after the tenders are opened. As a general principle, the post qualification examination shall be carried out when the preliminary appraisal begins in the process of bid evaluation. .

Article 17

Where the preliminary qualification examination is adopted, the tenderee shall issue an announcement on preliminary qualification examination, which shall be governed by the provisions in Articles 12 and 13 of these Measures concerning bid invitation announcements.

Article 18

As a general principle, the preliminary qualification examination documents shall include:

(1)

An invitation letter of preliminary qualification examination;

(2)

Instructions for applicants;

(3)

Requirements in relation to the qualifications;

(4)

Requirements in relation to other outstanding achievements;

(5)

Standards and methods for qualification examination; and

(6)

The method for notifying the results of preliminary qualification examination.

Article 19

Where the preliminary qualification examination is adopted, the tenderee shall explicitly indicate in the preliminary qualification examination documents the standards and methods for qualification examination; where the post qualification examination is adopted, the tenderee shall explicitly indicate in the bid invitation documents the standards and methods for qualification examination. When carrying out the qualification examination, the tenderee may not change or supplement the indicated standards and methods for qualification examination, or make qualification examination to the potential bidders or the bidders according to any standard or by using any method that has not been indicated.

Article 20

After the preliminary qualification examination, the tenderee shall issue notices to those potential bidders passing the preliminary qualification examination and inform them of the time, place and method of acquiring the bid invitation documents, and shall inform unqualified potential bidders of the results of the preliminary qualification examination at the same time. Where potential bidders who pass the preliminary qualification examination are less than 3, the tenderee shall carry out a renew preliminary qualification examination.The bidding by bidder who failed in the post qualification examination shall be handled as the nullified bidding by the bid evaluation committee.

Article 21

As a general rule, bid invitation documents shall include:

(1)

A bid invitation letter;

(2)

Instructions for bidders;

(3)

Formats of tender documents;

(4)

Technical specifications and parameters, and other requirements;

(5)

Standards and methods for bid evaluation; and

(6)

Main terms of the contract.The tenderee shall provide for substantial requirements and conditions in the bid invitation documents and indicate that the failure to meet any substantial requirement or condition will cause the refusal of the bid, and indicate them in an eye-catching fashion. No requirement or condition that has not been stated may be treated as a substantial requirement or condition for tender evaluation. In respect to the non-substantial requirements and conditions, the maximum scope and number of items permissible for variations and the methods for adjusting these variations shall be provided for.Where the State prescribes special demands in the aspects of technologies, standards and quality of goods subject to bidding, the tenderee shall put forward the said special demands in the bid invitation documents, and take them as substantial requirements and conditions.

Article 22

In case the goods subject to bidding need to be divided into different bid packages, the tenderee shall do so in a reasonable manner, and determine the date of delivery of each bid package, and faithfully indicate them in the bid invitation documents.

Article 23

In case the tenderee permits the bid winner to subcontract non-principal goods, it shall indicate it in the bid invitation documents. No main facility or main part of supply contract may be required or permitted to be sub-contracted.Unless the bid invitation documents prescribed that the supplier of standard goods may not be altered, if the bid winner changes the supplier of standard goods with the consent of the tenderee, it shall not be regarded as subcontracting or illegal subcontracting.

Article 24

The tenderee may require the bidders to submit alternative tender schemes, except for tender documents in line with the bid invitation documents, however, explanations shall be made in the bid invitation documents, and no alternative tender scheme of the bidder that is not meet the winning bid conditions may be taken into account.

Article 25

The technical standards provided for in the bid invitation documents shall meet the provisions in the state technical rules.The technical standards provided for in the bid invitation documents may not require or indicate a certain patent, trademark, name, design, place of origin or supplier, or contain other contents that have inclination or that exclude any potential bidder. Where the tenderee must quote the technical standards of a certain supplier so as to correctly or clearly explain the technical standards of the goods to be bid, it shall add the words "or an equivalent to" after the references.

Article 26

The bid invitation documents shall expressly provide for all tender evaluation factors including the price, as well as the methods for evaluating tenders according to such factors.The tender evaluation standards, methods and bid winning conditions may not be changed during the process of tender evaluation.

Article 27

A tenderee may, in the bid invitation documents, require the bidders to submit a tender deposit as the name of themselves. The tender deposit may be, apart from cash, letter of guaranty issued by a bank, confirmed checks, bank drafts or cash checks, or any other lawful form of guaranty as recognized by the tenderee. The tender deposit may not exceed 2% of the total tender price in general , however, the maximum may not exceed RMB 800,000 yuan. The valid period of the tender deposit shall be the same as that of the tenders.A bidder shall submit the tender deposit to the tenderee or the bidding agency prior to the expiry date for submitting tender documents according to the method and amount required by the bid invitation documents.Where a bidder fails to submit the tender deposit as required by the bid invitation documents, its tender document shall be nullified.

Article 28

The bid invitation documents shall fix an appropriate valid period for tenders, so as to ensure that the tenderee have enough time to finish the tender evaluation and sign a contract with the bid winner. The valid period for tenders shall be computed as of the expiry date of submitting tender documents as provided for in the bid invitation documents.If any special circumstance occurs prior to the expiration of the original valid period of tenders, the tenderee may, in written form, ask all bidders to extend the valid tendering period. For bidders agreeing the extension may not require or be allowed to modify substantial contents of their tender documents, however, the valid period of their tender deposits shall be extended accordingly; for bidders refusing the extension, their tenders shall be invalidated, however, such bidders have the right to withdraw their tender deposits. The tenderee shall launch a renew bid invitation if there are less than three bidder agreeing the extension of the valid period of tenders.

Article 29

With respect to the questions raised by the potential bidders during the course of reading bid invitation documents, the tenderee shall give answers in written form or through a preliminary tender meeting or via the internet, however, the tenderee shall notify answers in written form to all potential bidders who have bought the bid invitation documents at the same time. Those answers shall be a part of the bid invitation documents.Unless it is expressly required by the bid invitation documents, the presence of the bid preliminary meeting is not compulsory, upon the decision by the potential bidders themselves, and the possible risks occurred therefrom shall be assumed by themselves

Article 30

The tenderee shall fix a reasonable period of time for the bidders to formulate their tender documents, The goods legally subject to bidding, the period of time shall be no less than 20 days from the date of the issue of the bid invitation documents to the date of the closing of the submission of tender documents.

Article 31

The tenderee may adopt two-phase bidding procedures if the technical standards of goods can not be exactly worked out.At the first phase, the tenderee may firstly require potential bidders to submit technical suggestions, explicitly state technical standards, quality and other characters of the goods. The tenderee may carry out consultations and discussions with the bidders in regard to the suggested contents, so as to form uniform technical standards and then to formulate the bid invitation documents.At the second phase, the tenderee shall provide the formal bid invitation documents including the uniform technical standards to bidders that have submitted technical suggestions at the first phase , and the bidders shall submit final tender documents with the price included pursuant to the requirements of the formal bid invitation documents.

Chapter III Bidding

Article 32

A bidder is a legal person or any other organization that responds to the bid invitation and participates in the bidding competition. Two or more legal persons with the same legal representative, a parent company, wholly-owned subsidiary or any of its holding companies may not simultaneously offer tenders for the same bid invitation for goods.One manufacturer can only entrust one agency to participate in the bidding for the goods with the same model of the same brand, otherwise the tenders shall be nullified.

Article 33

A bidder shall draw up the tender documents pursuant to the requirements provided for in the bid invitation documents. The tender documents shall respond to the substantial requirements and conditions set forth in the bid invitation documents.As a general rule, the tender documents shall include:

(1)

A bid letter;

(2)

A bid table;

(3)

Detailed descriptions of technical performance parameters;

(4)

Business and technical variations list;

(5)

Bid deposit;

(6)

Relevant qualification certificates; and

(7)

Other contents as required in the bid invitation documents.Each bidder shall indicate the actual situation of goods pursuant to the bid invitation documents, and if any bidder plans to contracting out any minor part in the supply contract after winning the bid, he shall state it in the tender documents.

Article 34

A bidder shall serve the sealed tender documents to the place as prescribed in the bid invitation documents prior to the deadline for submission of tender documents as required in the bid invitation documents. The tenderee shall, after receiving the tender documents, issue to the bidder a proof marked with the recipient and time of receipt, and no entity or individual may unseal the tender documents before the opening of tenders.The tenderee may not accept those tender documents or amendments thereof sent by way of telegraph, telex, facsimile or e-mail.The tender documents served after the deadline for submission of tender documents as required in the bid invitation documents are void, and the tenderee shall reject them and turn them back to the bidder intact.Where the bidders that submit tender documents are less than three, the tenderee shall renew a bid invitation. Where there are still less than 3 bidders, the bid invitation for an engineering project must be bidding may not be carried out any more after putting on record in the relevant administrative supervision department, or the bid opening and bid evaluation can be carried out to two qualified bidders

Article 35

Prior to the deadline for submission of tender documents as required in the bid invitation documents, a bidder may supplement, modify, replace or withdraw the submitted tender documents, and notify the tenderee in written form. The contents supplemented and modified shall be a part of the tender documents.

Article 36

After the deadline for submission of tender documents, a bidder may not supplement, modify, replace or withdraw its tender documents. If a bidder does so, the tenderee will not accept them; and if a bidder withdraws its tender documents, it tender deposit will be confiscated.

Article 37

A tenderee shall take good care of the accepted tender documents, notices of modification or withdrawal, alternative tender schemes, etc., and keep them strictly secret.

Article 38

Two or more legal persons or other organizations may form an association to jointly participate in the tendering as one bidder.No party to the said association may solely bid in its own name after signing the agreement on the joint bidding, neither may it form any new association or participate in any other association to bid in the same project; otherwise the bidding shall be invalidated.

Article 39

Each party of the association shall file an application to the tenderee for forming an association at the time of preliminary qualification examination of bidders. If they fail to do so, no association may be formed for the bidding after the preliminary qualification examination is completed.The tenderee may not force the bidders passing the preliminary qualification examination to form an association.

Chapter IV Bid Opening, Bid Evaluation and Award of Bid

Article 40

The bid opening shall be carried out at the same time as the deadline for submitting tender documents as fixed in the bid invitation documents; the place of bid opening shall be the place as fixed in the bid invitation documents.Each bidder or its authorized representative shall be entitled to attend the bid opening meeting, or decide by itself not to attend the bid opening meeting.

Article 41

The tenderee will reject those tender documents that are under any of the following circumstances:

(1)

The tender documents haven't been served within the time limit or to the designated place; or

(2)

The tender documents haven't been sealed as required in the bid invitation documents.The tender evaluation committee will, after the preliminary examination, deal with a tender as nullified if the tender documents are under any of the following circumstances:

(1)

The tender documents bear no entity's stamp or no signature or stamp of the legal representative or the agent authorized thereby;

(2)

There is no letter of attorney issued by the legal representative;

(3)

The tender hasn't been filled out pursuant to the prescribed format, the contents are incomplete or the key words are indistinct and illegible;

(4)

The bidder has submitted two or more tender documents with different contents, or quote two or more prices for the same goods in one copy of tender documents and without declaring which one is final, unless the bid invitation documents provide for the submission of alternative tender schemes;

(5)

The name or organizational structure of a bidder is inconsistent with that in the preliminary qualification examination, and no effective certification has been provided;

(6)

The valid period for bidding doesn't meet the requirements as provided for in the bid invitation documents;

(7)

No tender deposit has been submitted as required in the bid invitation documents;

(8)

In the case of tendering through a bid invitation association, no agreement on the joint bidder as signed by the parties to the association has been submitted; or

(9)

Other circumstances that may result in the nullification of bid as provided for in the bid invitation documents.In case the tender evaluation committee nullifies all bids, or nullifies part of bids bring on less than 3 effective bids, and the bid is evidently lack of competition, so as to decide all bids will be nullified, and the tenderee shall launch a new bid invitation.

Article 42

The tender evaluation committee may, in written form, require a bidder to make necessary clarifications, explanations or amendments with respect to the contents in the tender documents with unclear meaning, inconsistent statements on the same issue or obvious errors in wording or calculation. The tender evaluation committee may not raise any implied or inductive questions to the bidder, or explicitly indicate to the bidder the omissions and mistakes in the tender documents.

Article 43

The tender evaluation committee shall nullify a bid if the tender documents make no response to the substantial requirements and conditions as provided for in the bid invitation documents, and may not allow the bidder to make such a bid to become a responding one by modifying or canceling its differences or reservations not in conformity with the requirements.

Article 44

The minimum bidding pricing method shall generally be adopted for carrying out the bid evaluation for goods with simple technologies or requiring the uniform technical standards, performance and manufacturing technical requirements. As a general rule, the comprehensive evaluation method shall be adopted for carrying out the bid evaluation for goods with complex technologies or technical standards, performance and manufacturing technical requirements that are hard to be unified.The minimum bidding price may not be lower than the cost.

Article 45

The alternative tender schemes submitted by a bidder that complies with the bid invitation documents and with the minimum tender evaluation price or highest comprehensive grades and therefore is recommended as the candidate for the bid winner may be taken into account.

Article 46

After finishing the bid evaluation, the tender evaluation committee shall present to the bidders a written bid evaluation report, which shall be signed by all members of the tender evaluation committee.

Article 47

The tender evaluation committee shall only recommend 1 to 3 candidates for the bid winner, and shall indicate the order of those candidates. The tenderee shall accept the candidates recommended by the tender evaluation committee, and may not determine the bid winner from bidders other than those candidates recommended by the tender evaluation committee.The tenderee shall, as a general principle, determine the bid winner within 15 days after the tender evaluation committee puts forward the written bid evaluation report, however, the bid winner shall be determined within 30 working days prior to the expiration of the valid bidding period.

Article 48

For a project using state capitals or financed by the State, the tenderee shall determine the No.1 candidate as the bid winner. Where the No.1 candidate waives the bid winning, or is unable to perform the contract due to any force majeure, or fails to submit a performance deposit within the time limit as required by the bid invitation documents, the tenderee may determine the No.2 candidate as the bid winner. Where the No.2 candidate is unable to sign the contract for the same reasons as specified in the preceding Paragraph, the tenderee may determine the No.3 candidate as the bid winner.The tenderee may authorize the tender evaluation committee to directly determine the bid winner.If the State Council has other provisions on the determination of the bid winner, such provisions shall prevail.

Article 49

The tenderee may not raise any requirement that goes beyond the prescriptions of the bid invitation documents and against the will of the bid winner, such as lowering the quoted price, adding the fittings or the quantity of after service, as the condition for issuing the notice on bid winning and for signing the contract.

Article 50

The notice on bid winning shall be binding on both the tenderee and the bid winner. After issuing the notice on bid winning, if the tenderee changes the bid winning results or if the bid winner waives the project it wins, they shall bear legal responsibilities.The notice on bid winning shall be released by the tenderee, or a bidding agency entrusted by the tenderee, .

Article 51

The tenderee and the bid winner shall, within 30 days from the date of the issue of the notice on bid winning, conclude a written contract in accordance with the bid invitation documents and the tender documents of the bid winner. The tenderee and the bid winner may not conclude any other agreement that goes against the substantial contents of the contract.Where the tender documents require the bid winner to submit a performance deposit or a performance guarantee in any other form, the bid winner shall do so, and the bid winner shall be regarded as waiving the project it wins if it refuses to submit the guarantee. Where the tenderee requires the bid winner to submit a performance deposit or a performance guarantee in any other form, the tenderee shall at the same time provide the bid winner with guarantee for payment for the goods.The amount of the performance deposit shall not be more than 10% of the bid wining contract price as a general rule, and the tenderee may not illegally raise the performance deposit at its will.

Article 52

The tenderee shall, within 5 working days from signing the contract with the bid winner, return the tender deposits to the bid winner and the losing bidders once and for all.

Article 53

For an engineering construction project subject to examination and approval, the contract price of goods shall be limited within the roughly estimated investments approved; where it is necessary to exceed the said scope, it shall report to the original examination and approval department for examination and approval prior to the conclusion of the bid winning contract. The examination and approval department for projects shall decide in a timely manner whether or not to approve it pursuant to the actual situation of the bid invitation; if the examination and approval department for projects disapproves it, the tenderee shall balance by itself the part exceeding the rough estimation.

Article 54

For the goods for a project legally subject to bidding, the tenderee shall, within 15 days from the day when the bid winner is determined, submit a written report on the bidding and tendering to the relevant administrative supervision department. The written report as referred to in the preceding Paragraph shall at least include:

(1)

Basic conditions on the goods subject to the bidding;

(2)

The bid invitation method and the media through which the announcement on bid invitation or preliminary qualification examination is issued;

(3)

Instructions for bidders, technical terms, evaluation standards and methods, and main contract terms, etc. in the bid invitation documents;

(4)

Composition of the tender evaluation committee and the evaluation report; and

(5)

Bid winning results.

Chapter V Penalty Provisions

Article 55

If a tenderee or bidding agency is under any of the following circumstances, the relevant administrative supervision department shall order it to correct within the time limit and may impose a fine of less than 30,000 yuan according to the circumstances:

(1)

Failing to issue an announcement on bid invitation on the designated media;

(2)

Illegally carrying out any selective bid invitation or failing to carrying out a bid invitation when it is not in line with the prescribed conditions or it is not approved although it meets the conditions;

(3)

For goods legally subject to bidding, the period is shorter than 20 days from the date of the issue of the bid invitation documents to the expiry date for submitting tender documents;

(4)

Failing to carry out an open bid invitation where it is necessary;

(5)

Carrying out any bid invitation without necessary conditions;

(6)

Failing to go through the required ratification formalities;

(7)

Failing to carry out a bid invitation according to the contents ratified by the examination and approval department;

(8)

Accepting any tender document after the deadline for submitting tender documents;

(9)

Failing to carry out a new bid invitation where the number of bidders is not in conformity with the legal requirements;

(10)

Terminating a bid invitation for any reason other than any force majeure after issuing bid invitation announcements, sending out the bid invitation letters or selling preliminary qualification examination documents or bid invitation documents.If any of the circumstances as provided for in the preceding Paragraph occurs and the circumstances are serious, a new bid invitation shall be carried out according to law.

Article 56

If a tenderee restricts or excludes any potential bidder that passed the preliminary qualification examination by unreasonable conditions, applies discriminatory treatments to any potential bidder, compel any bidder to form an association to make a joint bid, or restricts the competition among the potential bidders, it shall be ordered to correct, and may be fined 10,000 to 50,000 yuan.

Article 57

If any of the following situations occurs in the process of bidding evaluation, and thus affects the evaluation results, the relevant administrative supervision department may impose on the offender a fine not exceeding 30,000 yuan:

(1)

to use standards and methods for bid evaluation not defined in the bid invitation documents

(2)

The bid evaluation standards or methods contain any inclination or exclusive contents for or against any bidder, or impair or restrict the fair competition among the bidders;

(3)

Any person who shall withdraw from being a member of the tender evaluation committee participates in the bidding evaluation;

(4)

The formation and composition of the tender evaluation committee are not in conformity with the legal requirements; or

(5)

The tender evaluation committee and its members commit any illegal or irregular or unfair act during the process of bidding evaluation.Any of the circumstances as provided for in the preceding Paragraph shall result in a new bid evaluation or a new bid invitation.

Article 58

If a tenderee fails to determine the bid winner within the time limit, or changes the bid winning results after issuing the notice on bid winning or fails to sign the contract with the bid winner without justified reasons, or raises any additional condition to the bid winner or changes the substantial contents of the contract when signing the contract, the relevant administrative supervision department shall give it a warning and order it to make corrections, and may impose a fine not exceeding 30,000 yuan on the strength of the circumstances; and if the tenderee causes any loss to the bid winner, it shall be liable for compensation.If the bid winner, after the notice on bid winning is issued, waives the project it wins, refuses to sign a contract with the tenderee without justified reasons, raises any additional condition to the tenderee or changes the substantial contents of the contract when signing the contract, or refuses to submit the required performance deposit, the tenderee may cancel its qualification for bid winning and confiscate its tender deposit; if the losses thus caused to the tenderee exceed the amount of the tender deposit, the bid winner shall compensate for the exceeding part; in the case of absence of tender deposit, the bid winner shall be liable for the losses incurred by the tenderee.

Article 59

If a tenderee fails to perform the contract it concluded with the bid winner, it shall return to the bid winner an amount twice the performance deposit; if the losses thus caused to the bid winner exceed the performance deposit returned, the exceeding part shall be compensated; in the case of absence of tender deposit, the tenderee shall be liable for the losses incurred by the bid winner.If the failure to perform the contract is due to any force majeure, the preceding Paragraph shall not apply.

Article 60

If the bid winning is invalidated, the notice on bid winning and the contract concluded shall be invalid retroactively, without prejudice to the effect of the terms concerning settlement of disputes that exist independently in the contract.

Chapter VI Supplementary Provisions

Article 61

Bidding and tendering activities for goods not for engineering construction projects but for the fixed asset investment shall be implemented by referring to these Measures.

Article 62

In case any bid invitation is carried out by using the loans or financial aids from international organizations or foreign governments, if the creditor or fund supplier has other provisions on the conditions and procedures for bidding and tendering activities for goods, such provisions may apply, with the exception of those violating the social pubic interest of the People's Republic of China.

Article 63

The power to interpret these Measures shall remain with the National Development and Reform Commission in conjunction with the relevant departments.

Article 64

These Measures shall come into force as of March 1, 2005.