New Procedures Govern Bids Relating To Major State Construction Projects

Freshfields Bruckhaus Deringer

The State Development Planning Commission (SDPC) recently issued new rules governing bids in construction projects in the form of the Supervision of Invitation and Submission of Tenders for Major State Construction Projects Tentative Procedures (the Tentative
Procedures).¹ The main goal of the Tentative Procedures is to strengthen supervision over the invitation and submission of bids in respect of major State construction projects (including infrastructure projects), and to ensure that the bidding activities are conducted in accordance with the law.² The Bidding Law,³ the State Council Notice⁴ and the Inspection and Supervision Measures⁵ serve as the basis for formulating the Tentative Procedures.

"Major State construction projects" are defined under the Tentative Procedures as construction projects that: (i) are funded or financed by the State; (ii) have been examined and approved by the SDPC; and (iii) have been submitted to the State Council for its examination and approval (Article 3). The definition of such projects under the Bidding Law has a wider scope than that in the Tentative Procedures; in the Tentative Procedures, financing from foreign governments or international organizations excludes such projects from qualifying as "major State construction projects". The complicated standards for identifying major construction projects that call for public bidding as stipulated in the Regulations on the Scope and Scale Standards for Construction Engineering Projects Tenders⁶ (the Construction Project Regulations) have now been replaced with the simpler standards as set out above.