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Procedures of Shanghai Municipality on the Administration of Government Purchasing
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| (Promulgated by the Shanghai Municipal People' s Government on December 24, 1998) Article 1 Purpose These Procedures are formulated in order to strengthen the administration and supervision of government purchasing in this Municipality, make more effective use of budgetary funds and ensure the quality of government purchasing. Article 2 Definition Government purchasing as defined in these Procedures refers to the acts of purchasing goods, projects and services in a definite and standardized manner and procedure by the government to fulfill its needs in carrying on day-to-day government affairs and providing services to the public. Article 3 Scope of Application These Procedures shall apply to government organs, and the institutions, social groups and other relevant units in this Municipality that exercise budget control (hereinafter referred to as purchaser) in the purchase of goods, projects and services with fiscal funds and related activities. Fiscal funds referred to in the preceding Section include funds both within and outside the budget. Article 4 Leading Organ The Shanghai Municipal Government Purchasing Committee (hereinafter referred to as the Purchasing Committee) is the leading organ of government purchasing in this Municipality. It is responsible for the formulation of policies concerning government purchasing, the examination of government purchasing catalog and the coordination of the administration of government purchasing. The Purchasing Committee shall set up an administrative office of government purchasing. The Administrative Office of Government Purchasing shall be located in the Municipal Finance Bureau and shall be responsible for the routine administration of government purchasing and perform the following duties: 1. Implementing the policies on government purchasing; 2. Compiling draft catalogs of government purchasing; 3. Examining annual government purchasing plans; 4. Formulating implementation measures for government purchasing; 5. Hearing complaints concerning government purchasing; and 6. Conducting other affairs concerning government purchasing as authorized by the Purchasing Committee. Article 5 Purchasing Center The Shanghai Municipal Purchasing Center (hereinafter referred to as the Purchasing Center) is the purchasing organ of this Municipality at the municipal level. It shall submit itself to the leadership of the Purchasing Committee and perform the following duties: 1. Organizing and executing centralized purchasing; 2. Acting as an agent for making purchases on the commission of the purchaser; 3. Setting up an information system geared to government purchasing in this Municipality; and 4. Other duties as prescribed by the Municipal People' s Government. Article 6 Principles of Purchasing Government purchasing shall follow the principles of openness, fairness and impartiality so as to safeguard public interests, ensure administrative efficiency, and maximize the benefit of the use of fiscal funds. Article 7 Compilation of Purchasing Catalog This Municipality shall adopt the system of government purchasing by catalog. The Administrative Office of Government Purchasing shall compile draft catalogs of government purchasing in light of the practical needs of government purchasing and submit them to the Purchasing Committee for examination. In compiling government purchasing catalogs, the needs for carrying forward the State industrial policy shall be taken into consideration so as to promote economic development, and the scope of government purchasing shall be defined rationally in light of needs and feasibility. Article 8 Approval and Publication of Purchasing Catalog The government purchasing catalog shall be put into effect after approval by the Municipal People' s Government. The government purchasing catalog shall be made public via news media in July every year. Article 9 Drawing up Purchasing Plans Among the purchasers, those units that are run on budget allocations shall draw up annual government purchasing plans while preparing annual budget; the other relevant units that provide services to the public with fiscal funds shall draw up special government purchasing plans. Article 10 Examination and Approval of Purchasing Plans Annual government purchasing plans and special government purchasing plans shall be examined and approved by the Administrative Office of Government Purchasing. Article 11 Execution of Purchasing Plans Approved government purchasing plans that fall within the scope of centralized purchasing shall be organized for execution by the Purchasing Center and those that fall within decentralized purchasing shall be organized for execution by individual purchasers. Article 12 Mode of Centralized Purchasing Centralized purchasing shall be carried out chiefly through competitive bid invitation, limited competitive bid invitation and competitive negotiations, with purchase by inquiry, purchase from fixed sources and purchase from a single source as supplementary modes of purchase. Article 13 Organization of Purchase Through Bid Invitation Purchase through bid invitation shall be organized by an affirmed intermediary entrusted by the Purchasing Center, or by the Purchasing Center itself within the scope prescribed by the Administrative Office of Government Purchasing . Procedures of bid invitation and bidding for government purchasing shall be formulated separately by the Administrative Office of Government Purchasing. Article 14 Application for Qualifications for Intermediary Business in Bid Invitation for Government Bid invitation intermediaries that meet the following conditions may apply to the Administrative Office of Government Purchasing to obtain the qualifications for intermediary business in bid invitation for government purchasing: 1. Being an organization established in accordance with the law and having the legal person status; 2. Being knowledgeable about the laws, regulations and policies in connection with government purchasing; 3. Having a certain number of professionals, of which technical, economic and law personnel with intermediate or higher professional titles account for more than 80% of the total staff; 4. Having a fairly adequate database about the suppliers, a database about experts, and a database about bid invitations; and 5. Having no record of violations of laws, rules and regulations by the legal person, the legal representative or the treasurer within the three years before application. Article 15 Circumstances Requiring Bid Invitation for Purchase When the value of a single purchase or the total value of a batch of purchases goes beyond the prescribed limit, the purchase(s) must be made through bid invitation. Article 16 Circumstances Exempting Bid Invitation Bid invitation is exempted in any one of the following circumstances: 1. The purchase involves state security or state secrets; 2. There is one supplier only; 3. When a force majeure event occurs; or 4. Other circumstances prescribed by the Municipal People' s Government. Article 17 Organization of Purchasing for Major Projects Purchasing for major projects listed in the government purchasing catalog may be organized by the Purchasing Center jointly with relevant administrative departments in charge; with the approval of the Purchasing Committee, the Purchasing Center may also authorize the relevant administrative department in charge, the unit responsible for construction or the legal entity undertaking the project to organize the purchase. The Purchasing Center shall supervise the entrusted purchasing activities for major projects, and may terminate its entrustment in case it discovers violations of the provisions of these Procedures by the entrusted unit in the course of purchasing. Article 18 Priority in Purchasing Government purchasing shall comply with the requirements for environmental protection. The Purchasing Center and the purchasers shall give priority to the purchase of goods and projects of low energy consumption and less pollution. Terms being equal, the Purchasing Center and the purchasers shall give priority to the purchase of products by new industries to which the state industrial policy gives priority and support in their development. Article 19 Signing of Contract Contracts of centralized purchasing shall be signed by the Purchasing Center and the supplier. Contracts in which special requirements are made of goods, projects or services may be signed by the Purchasing Center jointly with each purchaser and the supplier. Contracts of centralized purchasing shall be reported to the Administrative Office of Government Purchasing for the record. Contracts of non-centralized purchasing shall be signed by each purchaser and the supplier. Article 20 Performance and Alteration of Contracts Contracts of government purchasing, once lawfully formed, shall be performed by both parties fully and completely. Arbitrary alteration or cancellation of the contract by either party is not allowed. When a substantive provision needs to be altered as agreed by both parties through consultation, the purchaser shall obtain approval from the Administrative Office of Government Purchasing before alteration of the contract. Article 21 Examination and Acceptance of Purchase Goods, projects and services obtained by centralized purchasing shall be examined and accepted by the Purchasing Center. When special requirements are made of the goods, projects and services in the contract, such examination and acceptance may be performed by the Purchasing Center jointly with the purchaser. Goods, projects and services obtained by decentralized purchasing shall be examined and accepted by the purchaser. The unit performing the examination and acceptance shall write out its opinions on the examination and acceptance. Opinions on the examination and acceptance of goods, projects and services obtained by centralized purchasing shall be reported to the Administrative Office of Government Purchasing for the record. Article 22 Payment for Purchase Payment for government purchasing shall be made (as earmarked) in accordance with relevant stipulations of the Municipal Finance Bureau. Article 23 Financial Supervision The Municipal Finance Bureau shall supervise and inspect government purchasing with respect to the following: 1. Whether government purchasing is carried out in accordance with the approved government purchasing plans; 2. Whether the modes and procedures of government purchasing conform to the provisions of these Procedures; 3. The stipulation of the performance of government purchasing contracts; and 4. Other matters that should be supervised and inspected. The Municipal Finance Bureau, on discovering that a government purchasing activity is carried out violating the provisions of these Procedures, shall notify the Administrative Office of Government Purchasing. The Administrative Office of Government Purchasing shall, on receiving notice from the Municipal Finance Bureau, order the Purchasing Center or the purchaser to suspend the purchase until the provisions violating activities eliminated and the Administrative Office of Government Purchasing has conducted verification and given approval for the purchase to resume. Article 24 Supervision by Auditing The Municipal Auditing Bureau shall supervise government purchasing by auditing in accordance with the law and report the results to the Municipal People' s Government. The Municipal Auditing Bureau may conduct auditing of special items on the Purchasing Center or the purchaser if it deems such auditing necessary. Article 25 Supervision on Purchase of Huge Value The Administrative Office of Government Purchasing shall notify the Municipal Finance Bureau, the Municipal Auditing Bureau, the Municipal Supervisory Committee and other relevant departments of government purchasing of huge value and ask these departments to participate in the supervision. Article 26 Self-Disciplined Management and Submission to Supervision The Purchasing Center and the purchasers shall formulate sound regulations and rules for government purchasing in accordance with the provisions of these Procedures and submit themselves to the supervision and inspection by relevant departments. Article 27 Complaints The supplier may write letters of complaint to the Administrative Office of Government Purchasing within the prescribed period of time in case it has objections to any one of the following: 1. The contents of the bid invitation documents; 2. The subsequent explanations, alterations or supplements to the bid invitation documents; 3. The mode of bid invitation, bid opening or bid awarding; or 4. Other circumstances detrimental to the interests of the supplier. Bid invitation intermediaries may write letters of complaint to the Administrative Office of Government Purchasing within the prescribed period of time in case they find the acts of the Purchasing Center or the purchaser detrimental to their own interests. Article 28 Publication of Government Purchasing The Administrative Office of Government Purchasing shall publicize government purchasing of the previous year at the same time it publicizes its annual government purchasing catalog. Article 29 Penalty on Bid Invitation Intermediaries for Violation of These Procedures Bid invitation intermediaries whose violation of the provisions of these Procedures brings losses to the Purchasing Center, the purchaser or the supplier shall be liable for damages. If the acts of violation of the provisions are serious, bid invitation intermediaries shall be prohibited for 3 years from acting as agents for bid invitation business for government purchasing in this Municipality. Article 30 Penalty on the Supplier for Violations of These Procedures The supplier whose violation of the provisions of these Procedures brings losses to the Purchasing Center, the purchaser, the bid invitation intermediary or other suppliers, shall be liable for damages. If the acts of violation of the provisions are serious, the supplier shall be prohibited for 3 years from entering the market of government purchasing in this Municipality. Article 31 Penalty on Working Staff for Violation of Regulations Working staff involved in government purchasing shall be penalized in accordance with the laws, rules and regulations for neglecting their duties, abusing their power, playing favoritism and committing irregularities, or exacting and accepting bribes. Article 32 Formulation of Operating Rules The Administrative Office of Government Purchasing may formulate operating rules for government purchasing in accordance with the provisions of these Procedures. Article 33 District / County Government Purchasing The district / county governments may formulate operating rules for government purchasing within their own jurisdiction in accordance with the provisions of these Procedures. Article 34 Special Provisions for Government Purchasing When the Purchasing Center or the purchaser buys goods or services from a foreign supplier, or contracts a project to a foreign contractor, relevant State provisions shall be followed. Article 35 Date of Implementation These Procedures shall become effective on January 1, 1999. |
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