Laws of the People's Republic of China

Ministry of Finance

Notice of the Ministry of Finance on Printing and Distributing the Revised Measures for Bid Invitation of Purchasing Companies in Projects Using Foreign Government Loans

Cai Jin [2005] No.103

The finance offices or bureaus of all the provinces, autonomous regions, municipalities directly under the Central Government, and cities under separately state planning, and the finance bureau of Xinjiang Production and Construction Corp., as well as all the purchasing companies:

With a view to improving the system of bid invitation for purchasing companies in projects using foreign government loans, regulating and simplifying the working procedures for bid invitation, and improving the work efficiency, this Ministry has revised again the Bid Invitation Measures for Purchasing Companies in Projects Using Foreign Government Loans as now in effect (hereinafter referred to as the Measures), and print and distribute the revised Measures to you, please implement them accordingly. The Notice on Printing and Distributing the Revised Bid Invitation Measures for Purchasing Companies in Projects using Foreign Government Loans (No.22 [2004] of the Ministry of Finance) shall be repealed simultaneously.

The local fiscal departments shall, in strict accordance with the provisions of the Measures, intensify self-discipline, intensify the supervision, examination and administration in the process of bidding, strictly prevent and eradicate any rule-breaking or unlawful circumstance.

Attachment: Measures for Bid Invitation of Purchasing Companies in Projects Using Foreign Government Loans

Ministry of Finance

November 1, 2005 Attachment:Measures for Bid Invitation of Purchasing Companies in Projects Using Foreign Government Loans

Chapter I General Provisions

Article 1

The present Measures are formulated for the purpose of strengthening administration on the work of bid invitation for purchasing companies in projects using foreign government loans, regulating the procedures for bid invitation for purchasing companies, boosting up the transparency of the bid invitation work, and improving the work efficiency of bid invitation, as well as ensuring the carrying out of the bid invitation work fairly, justly, openly, and effectively.

Article 2

The present Measures shall apply to the bid invitation for purchasing companies that make use of "foreign government loans" (including loans supplied without conditions attached from Japanese International Synergy Bank, and loans provided by Nordic Investment Bank) and other foreign loans under preferential terms with reference to the administration of foreign government loans as approved by the State Council (hereinafter referred to as the "loan projects").

Article 3

The "Purchasing companies" in the present Measures shall refer to the companies that have the Class A Qualification Certificate for International Bid Invitation Participation (unless there are different requirements in the loan granting country) as issued by the Ministry of Commerce.

Article 4

The "borrowers" in the present Measures refer to the relevant institutions or legal entities that sign the re-loaning agreement with the re-loaning bank and bear the obligation to pay off the loans in the foreign government loan projects.

Chapter II Procedures for Bid Invitation

Article 5

The Ministry of Finance shall notify the fiscal departments of all provinces, autonomous regions, municipalities directly under the Central Government, and cities under separately state planning (hereinafter referred to as the local fiscal departments) to carry out the work of bid invitation for choosing purchasing companies for those loan projects that meet the requirements.

Article 6

The local finance departments shall, after receiving the notice of the Ministry of Finance, organize or guide or supervise the borrower to carry out the work of bid invitation for purchasing companies. All the work of bid invitation for purchasing companies with loan projects shall be completed with 40 working days as of the date when the Ministry of Finance issues the notice.

Article 7

A borrower shall deliver a tender invitation letter to three or more purchasing companies simultaneously. For a project package involving at least two sub-projects, one tender procedure will apply as a single project.

The deadline as stipulated in the tender invitation letter for a purchasing company to submit agency application form shall be at least ten workdays from the date of delivery of the bid invitation letter to the date of service of the agency application form, as evidenced by postal stamps or the signing in by the entity of the borrower.

Article 8

Any purchasing company that receives a tender invitation letter shall fill in an agency application form as required. The agency application form shall bear the signatures of the general manager or deputy manager of the company and be affixed with the company seal. A purchasing company shall seal the agency application form and submit it to the borrower according to the address and time as stipulated in the tender invitation letter. Where a purchasing company fails to submit the agency application form according to the provisions of the present Article, it shall be deemed that the agency application form is invalid. In case fewer than three purchasing companies have submitted their agency application forms by the designated deadline, the borrower shall invite new purchasing companies to attend the bid tendering apart from those to whom it has submitted a tender invitation letter so that the total number of invited companies amounts to at least 3. If there are still fewer than three purchasing companies in the accumulative total have submitted their agency application forms after the second round of tender invitation, no new invitation may be offered any more, and the appraisal may be carried out within the scope of purchasing companies that have received the agency application forms.

Article 9

Purchasing companies may, according to the principals of voluntary negotiation, make a joint bid. All parties concerned to a joint bid shall clarify one party as the entity that takes the lead and shall jointly conclude a cooperation agreement so as to stipulate the responsibilities, rights and obligations and the scheme for profit distribution of all parties concerned. An entity that takes the lead shall, when reporting an agency application form, attach the cooperation agreement thereto as well as the basic information on the partners concerned, wherein the score of the entity that takes the lead shall function as the base for scoring in the bid appraisal.

Article 10

A borrower shall organize an examination and appraisal committee (hereinafter referred to as the "appraisal body") consisting of five or seven members (hereinafter referred to as the "appraisal members") with a representative of the borrower chairing the appraisal body and assuming the overall responsibilities over the appraisal activities.

The local finance departments may send representatives to the appraisal body and perform the duty of appraisal members in case of Class B projects; and in principle, local finance departments shall not send representatives to the appraisal body in case of Class C projects.

Article 11

A purchasing company shall have its agency application form sealed and submitted to the borrower. The head of the appraisal body shall preside over the appraisal meeting and open all the agency application forms at the same time, and all the appraisal members will give their scores independently on the spot on the basis of the given criteria of the appraisal body as prescribed in Chapter III of the present Measures.

After all the appraisal members have given their respective scores, the highest score and the lowest score of the outcome shall be excluded, and the scores given by the rest of the appraisal members shall be added up, the purchasing company with the highest score shall be the bid winner.

In case two or more purchasing companies have the same score, which is higher than those of other companies, the appraisal members shall take a vote on these companies onsite (with no need to give scores), and the company with the most votes shall be the bid winner.

Article 12

The appraisal body shall keep confidential the contents of agency application forms submitted by any purchasing company, and no appraisal member may disclose the appraisal result before it is announced. The purchasing companies taking part in the bid tendering is prohibited from imposing any influence on any appraisal member by any improper means, and no entity or individual is permitted to interfere with the appraisal work.

Article 13

The appraisal body shall submit to the local finance department a report in detail the composition of the appraisal members, appraisal procedures, scores for each of the applicant purchasing companies and the final appraisal results within five working days after completion of the appraisal procedure. The local fiscal department shall make examination and verification after receiving the appraisal results according to the relevant provisions of the present Measures, report the result of bid appraisal to the Ministry of Finance for archival filing within 5 workdays, with the name of the bid-winner purchasing company and relevant borrowers attached. The local fiscal department may not change the appraisal results of the appraisal body at will. If the local fiscal department has any different opinion on the appraisal results, it may set it forth in the archival report. Where the Ministry of Finance has no different opinion on the result of bid appraisal, the result of bid invitation shall come into force after 10 workdays as of the day when the archival report is served on the Ministry of Finance. In the case of any different opinion thereon, the Ministry of Finance shall, within 10 workdays as of the day when the archival report is received, notify the local fiscal department and the relevant purchasing company of the treatment opinions in a letter form.

A borrower shall, within 15 workdays as of the day when the result of bid appraisal comes into force, conclude a Commission Agreement with the bid-winner purchasing company.

Article 14

After the bid invitation for purchasing companies ends, all the original documents of bid invitation and bid tendering and scoring records shall be kept in the archives by the borrower for 5 years for future reference.

Article 15

The Ministry of Finance shall notify the local finance departments to make bid invitation on purchasing companies through different methods under the following specific circumstances:

(1)

Where a borrower hasn¡¯t been clarified and if it is necessary to decide a purchasing company;

(2)

Implementing project packages on the projects subject to more than two departments or provinces, autonomous regions, municipalities directly under the Central Government, and cities under separate state planning;

(3)

Where any loan granting country has special requirements;

(4)

It is urgent to implement the project, and it is unable to complete the work of bid invitation for purchasing companies in normal time; or

(5)

Other circumstances.

Chapter III Standards for Giving Scores by the Appraisal Body

Article 16

For loan projects of US$ 5 million and above:

(1)

If an accumulated total of US$ 30 million or above of loan projects has been undertaken on commission basis in the past three years, 25 scores; if the amount is US $ 20 million (inclusive of US $ 20 million) up to US$ 30 million, 20 scores; if the amount is US$ 10 million (inclusive of US $ 10 million) up to US $ 20 million, 15 scores; and if the amount is US $ 5 million (inclusive of US $ 5 million) up to US $ 10 million, 10 scores; and 5 scores for the amount of US $ 5 million.

(2)

An accumulated total of US$ 30 million or above of complete set of equipments of non-loan projects has been shipped and delivered in the form of imports in the past three years, 20 scores; if the amount is US$ 10 million (inclusive of 10 million) up to US $ 30 million, 15 scores; and if the amount is US$ 5 million (inclusive of US$ 5 million) up to US$ 10 million, 10 scores; and 5 scores for the amount of less than US $ 5 million.

(3)

The performance of undertaking the bid invitation business of the projects of the same industry, 0-10 scores;

(4)

Being responsible for the self-qualification, ability and performance of the selected personnel for purchasing business, 0-15 scores;

(5)

The work plan and the workload to be put into, 0-15 scores; and

(6)

Other technical factors that need to be taken into consideration according to the character of the projects, 0-10 scores.

Article 17

For loan projects less than US $ 5 million:

(1)

If an accumulated total of US$ 20 million or above of loan projects has been undertaken on commission basis in the past three years, 25 scores; if the amount is US $ 10 million (inclusive of US $ 10 million) up to US$ 20 million, 20 scores; if the amount is US$ 5 million (inclusive of US $ 5 million) up to US $ 10 million, 15 scores; and if the amount is US $ 3 million (inclusive of US $ 3 million) up to US $ 5 million, 10 scores; and 5 scores for the amount of less than US $ 3 million.

(2)

An accumulated total of US$ 20 million or above of a complete set of equipments of non-loan projects has been shipped and delivered in the form of imports in the past three years, 20 scores; if the amount is US$ 10 million (inclusive of US $ 10 million) up to US $ 20 million, 15 scores; and if the amount is US$ 5 million (inclusive of US$ 5 million) up to US$ 10 million, 10 scores; and 5 scores for the amount of less than US $ 5 million.

(3)

The performance of undertaking the bidding business of the projects of the same industry, 0-10 scores;

(4)

Being responsible for the self-qualification, ability and performance of the selected personnel for purchasing business, 0-15 scores;

(5)

The work plan and the workload to be put into, 0-15 scores; and

(6)

Other technical factors that need to be taken into consideration according to the character of the projects, 0-10 scores.

Article 18

In case any purchasing company is praised by the Ministry of Finance by circulating a report due to outstanding achievements in the work or in case it is criticized by the Ministry of Finance through circulating a report due to issues arising in the work, it may be added 0~5 points or be reduced by 0~5 points.

Article 19

In case any purchasing company fails to collect service fees, as scheduled, in accordance with the Interim Provisions on the Administration of Purchasing Work under Foreign Government Loans (No. 34 [1999] of the Ministry of Finance), the tender shall be discarded as useless.

Chapter IV Supervision over, Inspection and Management on Bid Invitation

Article 20

The local fiscal departments at all levels shall strengthen the supervision, inspection and administration of the process of bid invitation and the implementation of commission agreement. Where it is found that any borrower fails to handle the bid invitation of purchasing companies according to the present Measures, the local fiscal department shall adopt effective measures in a timely manner, have it solved and corrected within a time limit and shall circulate a report on relevant problems and treatment to the Ministry of Finance and the relevant administrative departments.

Article 21

Where the local fiscal department finds any serious illegal or rule-breaking act, it shall report it to the department of disciplinary inspection, department of supervision, judicial department and the Ministry of Finance in a timely manner and assist the relevant departments in the work of investigation and verification. Where any problem is confirmed upon investigation, the local fiscal department shall transfer it to the relevant departments for treatment in a timely manner.

Article 22

In case an entity violates any relevant law or regulation of China or the relevant provision of a loan-granting country in the process of handling the bid invitation for purchasing companies in any loan project, the Ministry of Finance shall, according to the circumstances, adopt such necessary measures as public circulation of criticism and suggestion on abolishing the bid qualification.

Chapter VI Supplementary Provisions

Article 23

The local fiscal department shall, according to the present Measures and the relevant provisions of the Ministry of Finance on the purchase work by using foreign government loans, formulate the relevant detailed rules on implementation, which shall not have any conflict with the present Measures.

Article 24

The present measures shall be referred to in the handling of bid invitation for purchasing companies using loan projects of the relevant departments of the State Council, enterprise groups on separate planning or entities directly under the Central Government.

Article 25

In case the existing relevant provisions on the administration of foreign government loans do not correspond with the present Measures, the present Measures shall prevail.

Article 26

The present Measures shall come into force as of the date of promulgation.