Bid Evaluation Committees and Methods Tentative Provisions

Article 3: Bid evaluations shall adhere to the principles of fairness, impartiality, objectivity and selection of the best.

Article 4: Bid evaluations shall be conducted in accordance with the law. No work unit or individual may unlawfully interfere in or influence a bid evaluation process or the results thereof.

Article 5: Bid inviting parties shall adopt the measures necessary to ensure that bid evaluations are conducted in strict confidentiality.

Article 6: Bid evaluations and the persons involved therein shall be subject to supervision in accordance with the law.

The relevant administrative supervision department shall supervise bid evaluations in accordance with the division of responsibilities between the State Council and local governments and investigate and deal with violations of the law occurring during bid evaluations in accordance with the law.

PART TWO: BID EVALUATION COMMITTEE

Article 7: The bid evaluation committee shall be legally constituted and shall be responsible for the evaluation of bids and recommending the candidate(s) for winning bidder to the bid inviting party or, pursuant to the authority bestowed upon it by the bid inviting party, determining the winning bidder directly.

Article 8: The bid inviting party shall be responsible for forming the bid evaluation committee.

In general, the list of the members of the bid evaluation committee shall be determined before the opening of the bids. The names of the members of the bid evaluation committee shall be kept confidential until the winning bid has been determined.

Article 9: The bid evaluation committee shall be composed of the bid inviting party or a representative of the bid inviting party's appointed bid invitation agency who is familiar with the relevant business and experts in such fields as technology, economics, etc. The bid evaluation committee shall have an odd number of members totalling five or more. Of these members, not less than two-thirds shall be experts in such fields as technology, economics, etc.

If the bid evaluation committee has a person in charge, such person in charge shall be elected by the members of the committee or determined by the bid inviting party. The person in charge of the bid evaluation committee shall have the same voting rights as the other members of the committee.

Article 10: The expert members of the bid evaluation committee shall be selected from the register of experts provided by the relevant department of the people's government at or above the provincial level or from the list of relevant experts drawn from the bid invitation agency's pool of experts.

The bid evaluation experts to be selected in accordance with the preceding paragraph may be selected at random or determined directly. For projects of a general nature, such experts may be selected at random. For tendered projects in which the technology is particularly complex and the expertise requirements are particularly high, and for tendered projects for which the State has particular requirements, such experts may be determined directly by the bid inviting party if experts determined at random would be hard-pressed to perform their duties competently.

Article 11: Bid evaluation experts shall satisfy the following conditions:

(1) having worked at least eight years in the relevant field and having a senior title or having attained an equivalent professional level;

(2) being familiar with laws and regulations on the invitation and submission of bids and having practical experience related to the tendered project; and

(3) having the capability to perform his duties conscientiously, impartially, honestly and with integrity.

Article 12: A person may not sit as a member of a bid evaluation committee if:

(1) he is a close family member of a bidder or the main responsible person of a bidder;

(2) he is a member of the personnel of the principal authority with jurisdiction over the project or the administrative supervisory authority;

(3) he has an economic interest in a bidder that could affect his impartial evaluation of the bids; or

(4) he has been subjected to administrative or criminal punishment for committing a violation of the law during a previous bid submission, bid evaluation or other activity related to bid invitations and submissions.

If a member of a bid evaluation committee is characterized by any of the foregoing circumstances, he shall recuse himself.

Article 13: Members of bid evaluation committees shall perform their duties objectively and impartially, observe professional ethics and bear personal liability for the evaluation opinions put forward by them.

A member of a bid evaluation committee may not have private contacts with any bidder or any person with a vested interest in the outcome of the bid and may not accept any property or other benefit from a bidder, an intermediary or another person with a vested interest in the outcome of the bid.

Article 14: Members of a bid evaluation committee and working personnel connected with the bid evaluation may not disclose the details of the evaluation and comparison of the bid documents, the recommendation of candidates for winning bidder or other information related to the bid evaluation.

For the purposes of the foregoing paragraph, the term "working personnel connected with the bid evaluation" means all persons, other than members of the bid evaluation committee, who are familiar with details of the bid evaluation due to their involvement in the supervision of, or routine work connected with, the bid evaluation.

PART THREE: BID EVALUATION PREPARATIONS AND PRELIMINARY EVALUATION

Article 15: The members of the bid evaluation committee shall prepare forms suitable for use in the bid evaluation, conscientiously study the bid invitation documents and shall, at minimum, understand and become familiar with the following particulars:

(1) the objectives of the bid invitation;

(2) the scope and nature of the tendered project;

(3) the main technical requirements, technical standards and the commercial terms specified in the bid invitation documents; and

(4) the bid evaluation standards, bid evaluation method and the relevant factors to be considered during the bid evaluation process as specified in the bid invitation documents.

Article 16: The bid inviting party or the bid invitation agency appointed thereby shall submit to the bid evaluation committee the important information and data required for the bid evaluation.

If the bid inviting party has set a reserve price, such reserve price shall be kept confidential and reference shall be made thereto when evaluating the bids.

Article 17: The bid evaluation committee shall systematically evaluate and compare bid documents in light of the bid evaluation standards and method specified in the bid invitation documents. Standards and methods not specified in the bid invitation documents may not be taken as the basis for evaluating the bids.

The bid evaluation standards and method specified in the bid invitation documents shall be reasonable, and may not include content that favours, or discriminates against, potential bidders and may not impede or restrict competition between the bidders.

Article 18: The bid evaluation committee shall rank the bid documents by order of bid quotes or in accordance with another method specified in the bid invitation documents. If quotes are submitted in several currencies, such quotes shall be converted into Renminbi at the median of the exchange rates posted by the People's Bank of China on the date the bids are opened.

Provisions concerning exchange rate standards and exchange risk shall be specified in the bid invitation documents. If no such provisions are specified, the exchange risk shall be borne by the bidders.

Article 19: The bid evaluation committee may require a bidder in writing to provide the necessary clarification, explanation, supplementation or correction of the parts of its bid documents that are unclear, statements in its bid documents on the same issue that are inconsistent or obvious typographical or computational errors in its bid documents. Clarifications, explanations, supplementations and corrections shall be made in writing and may not exceed the scope of the bid documents or modify the substantive contents of the bid documents.

In the event of a discrepancy between an amount written in words and the amount written in numbers in bid documents, the amount written in words shall prevail. In the event of a discrepancy between the total price and the unit prices, the unit prices shall prevail, unless there is an obvious error in the decimal point of a unit price. In the event of a difference of opinion in the interpretation of different language versions of bid documents, the Chinese language version shall prevail.

Article 20: If during the bid evaluation process the bid evaluation committee discovers that a bidder has submitted its bid under the name of a third party, or that bidders have colluded with each other in the submission of their bids, or that a bidder has used bribery with a view to winning the bid or used other fraudulent means in the submission of its bid, the
bid(s) of the said bidder(s) shall be treated as invalid.

Article 21: If the bid evaluation committee discovers during the bid evaluation process that a bidder's quote is markedly lower than the quotes of the other bidders or the reserve price (if set), possibly causing its bid to be lower than its costs, the bid evaluation committee shall require the said bidder to present a written explanation thereof and provide relevant supporting materials. If the bidder fails to provide a reasonable explanation or relevant supporting materials, the bid evaluation committee shall consider the said bidder to be competing in the bid on the basis of a below-cost quote and treat its bid as invalid.

Article 22: If a bidder's qualifications do not satisfy the relevant State regulations or the requirements of the bid invitation documents, or the bidder refuses to clarify, explain, supplement or correct its bid documents as required, the bid evaluation committee may reject such bidder's bid.

Article 23: The bid evaluation committee shall examine whether each bid document addresses all the substantive requirements and conditions specified in the bid invitation documents. Bids that fail to address such substantive requirements and conditions shall be treated as invalid.

Article 24: Based on the bid invitation documents, the bid evaluation committee shall examine and itemize all the bid deviations contained in the bid documents.

Bid deviations shall be divided into major deviations and minor deviations.

Article 25: The following are considered major deviations:

(1) the bidder has failed to provide bid security in accordance with the requirements of the bid invitation documents or the bid security provided is flawed;

(2) the bid documents are not signed by the bidder's authorized representative or do not bear the bidder's official seal;

(3) the time limit for completion of the tendered project specified in the bid documents is longer than the time limit stipulated in the bid invitation documents;

(4) the bid clearly fails to satisfy requirements in respect of technical specifications and standards;

(5) the packaging method for goods, inspection standards and method, etc. stipulated in the bid documents fail to satisfy the requirements of the bid invitation documents;

(6) the bid documents attach conditions that are unacceptable to the bid inviting party;

(7) the bid fails to satisfy other substantive requirements stipulated in the bid invitation documents.

If bid documents are characterized by any of the foregoing circumstances, they shall be deemed to fail to substantively address the bid invitation documents and the bid shall be treated as invalid pursuant to Article 23 hereof. If the bid invitation documents provide otherwise concerning major deviations, such provisions shall prevail.

Article 26: The term "minor deviations" refers to instances where the bid documents address the substantial requirements of the bid invitation documents, but in various places there are omissions or the provided technical information or data, etc. is incomplete, and supplementation or correction of such omissions or incomplete technical information or data would not produce a result that is inequitable to the other bidders. Minor deviations do not affect the validity of the bid documents.

The bid evaluation committee shall require in writing bidders whose bid documents contain minor deviations to supplement or correct the same before completion of the bid evaluation. If a bidder refuses to supplement or correct such minor deviations, the bid evaluation committee may, when carrying out the detailed evaluation, quantify the minor deviations in a manner unfavourable to the said bidder. The standards for such quantifications shall be specified in the bid invitation documents.

Article 27: If by the bid evaluation committee's rejection of non-qualifying bids or invalidation of bids pursuant to Article 20, 21, 22, 23 or 25 hereof the number of valid bids falls below three, thus causing a clear lack of competition in the bid, the bid evaluation committee may reject all bids.

If there are less than three bidders or if all the bids have been rejected, the bid inviting party shall invite bids anew in accordance with the law.

PART FOUR: DETAILED EVALUATION

Article 28: The technical and commercial portions of those bid documents that passed the preliminary evaluation shall be further evaluated and compared by the bid evaluation committee pursuant to the bid evaluation standards and method specified in the bid invitation documents.

Article 29: The bid evaluation methods include the lowest evaluated bid price method, the comprehensive assessment method and other bid evaluation methods permitted by laws or administrative regulations.

Article 30: The lowest evaluated bid price method is generally applicable to tendered projects using general technology and performance standards or those with regard to which the bid inviting party has no special technical or performance requirements.

Article 31: Pursuant to the lowest evaluated bid price method, the bidder(s) with the bid(s) that satisfies (satisfy) the substantive requirements of the bid invitation documents and that has (have) the lowest evaluated bid price(s) shall be recommended as the candidate(s) for winning bidder.

Article 32: If the lowest evaluated bid price method is used, the bid evaluation committee shall make the necessary price adjustments to all the bidders' bid quotes and the commercial portion of their bid documents in accordance with the bid evaluation price adjustment method specified in the bid invitation documents.

If the lowest evaluated bid price method is used, the winning bidder's bid shall satisfy the technical requirements and standards stipulated in the bid invitation documents, but the bid evaluation committee shall not be required to effect a price conversion for the technical portion of the bid documents.

Article 33: After completion of a detailed evaluation based on the lowest evaluated bid price method, the bid evaluation committee shall draw up a Bid Price Comparison Table, which it shall submit to the bid inviting party together with the written bid evaluation report. The Bid Price Comparison Table shall indicate the bidders' quotes, the price adjustments made for commercial deviations and an explanation thereof, and the final evaluated bid prices.

Article 34: Bids for tendered projects for which the lowest evaluated bid price method is not suitable shall generally be evaluated using the comprehensive assessment method.

Article 35: Pursuant to the comprehensive assessment method, the bidder(s) with the bid(s) that most closely satisfies (satisfy) all of the overall evaluation standards specified in the bid invitation documents shall be recommended as the candidate(s) for winning bidder.

The monetary conversion method, the scoring method or another method may be used in judging whether bid documents most closely satisfy the various evaluation standards specified in the bid invitation documents. Factors that need to be quantified and their weightings shall be expressly provided for in the bid invitation documents.

Article 36: When quantifying each of the factors to be evaluated, the bid evaluation committee shall establish the quantification norms on the same basis or on the same standards, so that all bid documents are comparable.

After the technical and commercial portions have been quantified, the bid evaluation committee shall weight the results of the quantification of the two portions and calculate the comprehensive assessment price or comprehensive assessment score of each bid.

Article 37: After completion of an evaluation based on the comprehensive assessment method, the bid evaluation committee shall draw up a Comprehensive Assessment Comparison Table, which it shall submit to the bid inviting party together with the written bid evaluation report. The Comprehensive Assessment Comparison Table shall indicate the bidders' bid quotes, any revisions made thereto, the adjustments made for commercial deviations, the adjustments made for technical deviations, the assessment of each evaluated factor and the final results of the evaluation of each bid.

Article 38: If bidders are permitted to submit alternative bids pursuant to the bid invitation documents, the bid evaluation committee may evaluate the alternative bid submitted by the winning bidder in order to decide whether to accept such alternative bid. The alternative bids of bidders who do not satisfy the conditions for winning the bid shall not be considered.

Article 39: For tendered projects that are divided into several single project contracts and for which the bid invitation documents permit bidders to proffer incentives in order to obtain all the project contracts, the bid evaluation committee may examine the incentives proffered by the bidders in order to determine whether to grant the tendered project as a unified contract to the winning bidder. If the tendered project is granted as a unified contract, the bid of the winning bidder of the unified contract shall be the one that is the most favourable to the bid inviting party.

Article 40: The bid evaluation and decision shall be completed within 30 working days before the expiration date of the bids. If the bid evaluation and decision cannot be completed within 30 working days before the expiration date of the bids, the bid inviting party shall notify all the bidders that they should extend the validity of their bids. Bidders that refuse to extend the validity of their bids have the right to recover their bid deposits. Bidders that agree to extend the validity of their bids shall effect a corresponding extension of the validity of their bid security, but they may not amend the substantive contents of their bid documents. If bidders incur losses due to the extension of the validity of their bids, the bid inviting party shall compensate such bidders, unless the validity of the bids needed to be extended due to the occurrence of an event of force majeure.

The bid invitation documents shall specify the term of validity of bids. The term of validity of bids shall commence from the deadline for the submission of the bid documents.

PART FIVE: RECOMMENDATION OF CANDIDATES FOR WINNING BIDDER AND DETERMINATION OF THE WINNING BIDDER

Article 41: If during the bid evaluation process the bid evaluation committee discovers any problems, it shall deal with such problems in a timely manner or submit a proposal for dealing with the problems to the bid inviting party, and make a written record thereof.

Article 42: After completion of the bid evaluation, the bid evaluation committee shall submit a written bid evaluation report to the bid inviting party and forward a copy to the relevant administrative supervisory authority. The bid evaluation report shall truthfully record the following particulars:

(1) basic details and a table of the data;

(2) the list of members of the bid evaluation committee;

(3) the bid opening record;

(4) a table of the qualifying bids;

(5) an explanation of the invalid bids;

(6) a table of the bid evaluation standards and method or bid evaluation factors;

(7) a table comparing the evaluated prices or evaluation scores;

(8) a ranking of the evaluated bidders;

(9) a list of the recommended candidate(s) for winning bidder and the matters that require handling before entry into the contract; and

(10) summary of matters that have been clarified, explained, supplemented or corrected.

Article 43: The bid evaluation report shall be signed by all the members of the bid evaluation committee. Any member of the bid evaluation committee with a dissenting opinion on the conclusions of the bid evaluation may state his differing opinion and the reasons therefor in writing. If a member of the bid evaluation committee refuses to sign the bid evaluation report but does not state his dissenting opinion and the reasons therefor, he shall be deemed to be in agreement with the conclusions of the bid evaluation. The bid evaluation committee shall prepare a written explanation of the foregoing and place the same on file.

Article 44: The bid evaluation committee is dissolved once it has submitted the bid evaluation report to the bid inviting party. The documents, forms and other information used during the bid evaluation process shall be promptly returned to the bid inviting party.

Article 45: The candidates for winning bidder recommended by the bid evaluation committee shall be limited to one to three parties and the ranking thereof shall be indicated.

Article 46: The bid of the winning bidder shall satisfy either of the following conditions:

(1) it most closely satisfies all of the overall evaluation standards specified in the bid invitation documents; or

(2) it satisfies the substantive requirements of the bid invitation documents and its bid price is the lowest among those evaluated, except for bid prices below cost.

Article 47: Until the winning bidder has been determined, the bid inviting party may not hold negotiations with bidders on substantive particulars such as bid prices, bid plans, etc.

Article 48: For projects that make use of investment in the form of State funds or State financing, the bid inviting party shall determine the first ranked candidate for winning bidder to be the winning bidder. If the first ranked candidate declines to be the winning bidder or states to be unable to perform the contract due to force majeure or if the bid invitation documents specify that a performance bond be paid but it fails to pay such bond within the specified time limit, the bid inviting party may determine the second ranked candidate to be the winning bidder.

If the second ranked candidate for winning bidder is unable to enter into the contract for any of the reasons specified in the preceding paragraph, the bid inviting party may determine the third ranked candidate to be the winning bidder.

The bid inviting party may authorize the bid evaluation committee to determine the winning bidder directly.

If State Council regulations provide otherwise concerning the determination of the winning bidder, such regulations shall prevail.

Article 49: After the winning bidder has been determined, the bid inviting party shall issue a letter of acceptance to the winning bidder, simultaneously notify the losing bidders and, within 30 working days, enter into a contract with the winning bidder.

Article 50: The letter of acceptance shall be legally binding on the bid inviting party and the winning bidder. If the bid inviting party changes the result of the determination of the winning bidder, or the winning bidder declines to be winning bidder, after the letter of acceptance has been issued, the relevant party shall assume legal liability therefor.

Article 51: The bid inviting party shall conclude a written contract with the winning bidder in accordance with the bid invitation documents and the winning bidder's bid documents. The bid inviting party and the winning bidder may not subsequently conclude other agreements that contravene the substantive terms of the contract.

Article 52: Within five working days after entering into the contract with the winning bidder, the bid inviting party shall return the bid deposits to the winning bidder and the losing bidders.

PART SIX: PENAL PROVISIONS

Article 53: If a member of a bid evaluation committee abandons his duties without permission during the bid evaluation, thereby affecting the normal progress of such procedure, or if he fails to perform his duties in an objective and impartial manner during the evaluation, he shall be given a warning. If the circumstances are serious, he shall be disqualified as a member of the bid evaluation committee and may not participate in the evaluation of bids for any future project for which the invitation for bids is legally required. In addition, he shall be subjected to a fine of not more than Rmb10,000.

Article 54: If a member of a bid evaluation committee accepts property or other benefits from a bidder or another party with a vested interest in the outcome of the bid or if a member of a bid evaluation committee or a member of the working personnel connected with the bid evaluation discloses to others details of the evaluation and comparison of the bid documents, the recommendation of candidates for winning bidder or other information concerning the bid evaluation, he shall be given a warning and the property accepted shall be confiscated, and he may additionally be subjected to a fine of not less than Rmb3,000 and not more than Rmb50,000. A member of a bid evaluation committee who has committed any of the foregoing acts shall be disqualified as a member of the bid evaluation committee and may not participate in the evaluation of bids for any future project for which the invitation for bids is legally required. If a criminal offence is constituted, his criminal liability shall be pursued in accordance with the law.

Article 55: If the winning bidder determined by the bid inviting party was not among the candidates lawfully recommended by the bid evaluation committee, or if all the bids for a project that legally requires the invitation for bids have been rejected by the bid evaluation committee but the bid inviting party subsequently and on its own authority determines a bidder to be the winning bidder, the acceptance of the winning bidder's bid shall be void and the bid inviting party shall be ordered to rectify the situation and may be subjected to a fine of not less than 0.5% and not more than 1% of the amount of the project for which it determined the winning bidder. The persons directly in charge and other directly responsible personnel of the work unit shall be disciplined according to the law.

Article 56: If the bid inviting party and the winning bidder fail to conclude a contract in accordance with the bid invitation documents and the winning bidder's bid documents, or if the bid inviting party and the winning bidder conclude an agreement that contravenes the substantive terms of the contract, they shall be ordered to rectify the situation and may be subjected to a fine of not less than 0.5% and not more than 1% of the amount of the project won.

Article 57: If the winning bidder does not conclude a contract with the bid inviting party, its bid deposit shall not be returned and its status of winning bidder shall be revoked. If the loss incurred by the bid inviting party as a result thereof exceeds the amount of the bid deposit, the winning bidder shall compensate the bid inviting party for the portion of the loss exceeding the amount of the bid deposit. If the winning bidder did not provide a bid deposit, it shall be liable for compensating the bid inviting party for the loss that it incurred.

If the bid inviting party procrastinates in the determination of the winning bidder or fails to enter into a contract with the winning bidder without a legitimate reason, it shall be given a warning and, in accordance with the circumstances, may be subjected to a fine of not more than Rmb10,000. If the winning bidder incurred losses as a result thereof, the bid inviting party shall additionally compensate for such losses.

PART SEVEN: SUPPLEMENTARY PROVISIONS

Article 58: Bid evaluations for projects other than those legally requiring bid invitations shall be carried out with reference to these Provisions.

Article 59: With regard to bid evaluations for tendered projects that make use of loans or aid funds from international organizations or foreign governments, if the lender or financier has other regulations concerning the bid evaluation committee or the bid evaluation method, such regulations shall apply unless they run counter to the public interest of the People's Republic of China.

Article 60: In the event of a discrepancy between these Provisions and regulations concerning bid evaluation institutions and bid evaluation methods pre-dating the promulgation of these Provisions, these Provisions shall prevail. If laws or administrative regulations provide otherwise, such provisions shall prevail.

Article 61: The State Development Planning Commission, in concert with relevant authorities, is in charge of interpreting these Provisions.

Article 62: These Provisions shall be implemented as of the date of promulgation.