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Administrative Measures on Bidding and Tendering for Government Procurement of Goods and Services (the Measures)

Issued: August 11, 2004

Effective: September 11, 2004

Issuing Authority: Ministry of Finance

Main Contents: The Measures reinforce some principles for government procurement in China.  Procurers shall not divide the whole procurement of goods and services subject to tendering into parts or otherwise avoid tendering.  Any relevant personnel participating in the tendering shall withdraw if they are related to the bidders.

The Measures list specific qualification requirements for government procurers to organize tendering on their own.  Government procurers failing to satisfy these requirements must entrust a government procurement agency to conduct tendering.  The Measures set a bidding bond ceiling of no more than 1 percent of the estimated amount of a procurement project, and set forth specific rules for returning the bidding bond and the standard amount of penalty interest to bidders in case of a delay in returning the bidding bond.

Among others, the Measures provide three basic methods for bid evaluation: the Lowest Bid Offer Method, the Comprehensive Grading Method, and the Cost Performance Method.  The Measures explicitly require that the standards, bidding evaluation methods, and conditions for winning a bid be included in the tender document and not be altered during the bidding evaluation.  In addition to the composition of the bidding evaluation committee and its responsibilities, the Measures elaborate on the procedures for bidding evaluations, which include preliminary examination of the bidding documents, clarification of any problems in such documents, a comparison and evaluation of the bids, a recommendation of the leading bid candidates, and a compilation of bidding evaluation reports.