Implementing Regulations for the PRC Law on the Invitation for and Submission of Bids

For the purposes of the preceding paragraph, the term “works” means construction works, including the new construction, alteration and expansion of buildings and structures and related renovation, demolition, repair, etc.; the term “goods relating to the construction of works” means equipment, materials, etc. constituting integral parts of the works and that are necessary to realise the basic functions of the works; and the term “services relating to the construction of works” means services such as surveying, design, supervision, etc. that are required to complete the works.

Article 3: The specific scope of and scale standards for construction projects that legally require the invitation for bids shall be formulated by the State Council's development and reform department together with relevant State Council departments, and published and implemented after approval by the State Council.

Article 4: The State Council's development and reform department shall guide and coordinate bid invitation and submission work nationwide and conduct monitoring inspections of the invitation for and submission of bids for works in major state construction projects. The State Council's industry and information technology, housing and urban-rural development, transport, railway, water resource, commerce and other such departments shall monitor relevant bid invitation and submission activities within their specified scopes of responsibility.

The development and reform departments of local people's governments at the county level and above shall guide and coordinate bid invitation and submission work in their jurisdictions. Relevant departments of local people's governments at the county level and above shall monitor bid invitation and submission activities within their specified scopes of responsibility and investigate and deal with, in accordance with the law, violations of the law committed in the course of bid invitation and submission activities. If a local people's government at the county level or above provides otherwise in respect of the division of responsibilities of its subordinate departments for monitoring bid invitation and submission activities, such provisions shall apply.

Finance departments shall, in accordance with the law, monitor the implementation of budgets for government construction projects subject to the invitation for and submission of bids and the implementation of government procurement policies.

Inspection authorities shall, in accordance with the law, inspect subjects of inspection that relate to bid invitation and submission activities.

Article 5: Local people's governments at the level of city divided into districts and above may, as actually required, establish centralised and standardised bid invitation and submission exchanges to provide services for bid invitation and submission activities. A bid invitation and submission exchange shall not be subordinate to the administrative supervision departments and may not be operated for profit.

The government encourages the use of information networks for the invitation for and submission of bids electronically.

Article 6:  Working personnel of the state are prohibited from illegally interfering in bid invitation and submission activities in any manner.

Part Two: Bid invitation

Article 7: The bid invitation scope, bid invitation method and organisational form of the bid invitation for a project that legally requires the invitation for bids and for which, in accordance with relevant state provisions, examination and approval procedures need to be carried out shall be submitted to the project examination and approval/check and approval department for examination and approval/check and approval. The project examination and approval/check and approval department shall, in a timely manner, notify the relevant administrative supervision departments of the bid invitation scope, bid invitation method and organisational form of the bid invitation determined in the examination and approval/check and approval.

Article 8: For a project that legally requires the invitation for bids and in which state-owned funds hold a controlling or predominant position, a public invitation for bids shall be carried out. However, a private invitation for bids may be carried out if:

(1) the technology is complex, there are special requirements or limitations are imposed by the natural environment and only a small pool of potential bidders is available to choose from; or

(2) the expenses for carrying out a public invitation for bids would account for an excessive percentage of the project contract amount.

In the event of the circumstance set forth in Item (2) of the preceding paragraph, if it is a project as specified in Article 7 hereof, the determination shall be made by the project examination and approval/check and approval department at the time it examines/checks the project. For other projects, the bid inviting party shall apply to the relevant administrative supervision departments to make a determination.

Article 9: In addition to the special circumstances specified in Article 66 of the Bidding Law where an invitation for bids may be dispensed with, an invitation for bids may be dispensed with if:

(1) use of an unsubstitutable patent or proprietary technology is required;

(2) the procurer can itself lawfully carry out the construction, production or provision;

(3) a concession project investor that has been selected through an invitation for bids can itself lawfully carry out the construction, production or provision;

(4) works, goods or services need to be procured from the original winning bidder, failing which construction or functional requirements will be affected; or

(5) another special circumstance as specified by the state applies.

If a bid inviting party acts fraudulently in order to apply the preceding paragraph, such act constitutes circumvention of an invitation for bids as specified in Article 4 of the Bidding Law.

Article 10: A bid inviting party that has the capability to prepare the bid invitation documents and organise the bid evaluation as specified in the second paragraph of Article 12 of the Bidding Law means that the bid inviting party has the technical, economic and other such professional personnel consistent with the size and complexity of the project that is the subject of the invitation for bids.

Article 11: The qualifications of a bid invitation agency shall be recognised by the relevant department in accordance with laws and State Council provisions.

The State Council's housing and urban-rural development, commerce, development and reform, industry and information technology and other such departments shall Oversee bid invitation agencies within the scope of their specified responsibilities in accordance with the law.

Article 12: A bid invitation agency shall have a certain number of professional personnel with professional bid invitation qualifications. The specific measures for securing professional bid invitation qualifications shall be formulated by the State Council's human resources and social security department together with the State Council's development and reform department.

Article 13: A bid invitation agency shall carry out its bid invitation agency business within the scope of its qualification permit and the scope of its appointment by the bid inviting party. No entity or individual may illegally interfere therein.

When a bid invitation agency carries out a bid invitation on behalf of another, it shall comply with the provisions on bid inviting parties of the Bidding Law and these Regulations. A bid invitation agency may not bid or submit a bid on behalf of another for a project in which it is acting as the agent, or provide consulting services for a bidder for a project in which it is acting as agent.

A bid invitation agency may not alter, lease, lend or transfer its qualification certificate.

Article 14: A bid inviting party shall execute an engagement contract with the bid invitation agency that it has appointed, and the fee rate specified in the contract shall comply with relevant state provisions.

Article 15: For a project for which a public invitation for bids is to be carried out, a bid invitation announcement shall be published and bid invitation documents prepared in accordance with the Bidding Law and these Regulations.

If the bid inviting party opts to review the qualifications of potential bidders by the advance qualification review method, it shall publish an advance qualification review announcement and prepare the advance qualification review documents.

The advance qualification review announcement and bid invitation announcement for a project that legally requires the invitation for bids shall be published in the media designated in accordance with the law by the State Council's development and reform department. The contents of advance qualification review announcements or bid invitation announcements for the same bid inviting project published in different media shall be identical. When the designated media publish the domestic advance qualification review announcement and bid invitation announcement for a project that legally requires the invitation for bids, they may not charge a fee therefor.

When preparing the advance qualification review documents and bid invitation documents for a project that legally requires the invitation for bids, the model texts formulated by the State Council's development and reform department together with the relevant administrative supervision departments shall be used.

Article 16: A bid inviting party shall sell the advance qualification review documents or bid invitation documents at the time and place specified in the advance qualification review announcement, bid invitation announcement or bid invitation letter. Advance qualification review documents or bid invitation documents may not be on sale for less than five days.

The amount that the bid inviting party charges for the advance qualification review documents or bid invitation documents shall be limited to covering the costs and expenditures for printing and mailing, and may not have profit as its objective.

Article 17: The bid inviting party shall determine a reasonable deadline for submitting the application documents for the advance review of qualifications. The deadline for the submission of application documents for the advance review of qualifications for a project that legally requires the invitation for bids shall not be less than five days from the date on which the sale of the advance qualification review documents stops.

Article 18: The advance review of qualifications shall be conducted based on the criteria and by the method specified in the advance qualification review documents.

For a project that legally requires the invitation for bids and in which state-owned funds hold a controlling or predominant position, the bid inviting party shall assemble a qualification review committee to review the application documents for the advance review of qualifications. The qualification review committee and its members shall comply with the provisions on bid evaluation committees and their members of the Bidding Law and these Regulations.

Article 19: Once the advance review of qualifications is concluded, the bid inviting party shall issue a notice of the results of the advance review of qualifications to the advance qualification review applicants in a timely manner. Those applicants that fail the advance review of their qualifications shall not be qualified to bid.

If fewer than three applicants pass the advance review of their qualifications, a new invitation for bids shall be carried out.

Article 20: If a bid inviting party is to review the qualifications of bidders by the later qualification review method, the bid evaluation committee shall review the qualifications of the bidders based on the criteria and by the method specified in the bid invitation documents after the opening of the bids.

Article 21: A bid inviting party may make necessary clarifications or amendments to the advance qualification review documents or bid invitation documents that it has issued. If the clarifications or amendments could affect the preparation of the application documents for the advance review of qualifications or bidding documents, the bid inviting party shall notify in writing all of the potential bidders that obtained the advance qualification review documents or bid invitation documents at least three days before the deadline for the submission of the application documents for the advance review of qualifications, or at least 15 days before the bid submission deadline. If there are less than three days or 15 days, respectively, remaining when it does so, the bid inviting party shall extend the deadline for the submission of application documents for the advance review of qualifications or the bidding documents accordingly.

Article 22: If a potential bidder or a materially interested party has an objection to an advance qualification review document, it shall raise the same two days before the deadline for the submission of application documents for the advance review of qualifications; if it has an objection to a bid invitation document, it shall raise the same 10 days before the bid submission deadline. The bid inviting party shall give a response within three days from the date of receipt of the objection, and it shall temporarily suspend the bid invitation and submission activities until it gives the response.

Article 23: If the contents of the advance qualification review documents or bid invitation documents prepared by a bid inviting party violate the mandatory provisions of laws or administrative regulations, or violate the principles of transparency, equality, impartiality or good faith, thereby affecting the results of the advance review of qualifications or the submission of bids by the potential bidders, the bid inviting party for a project that legally requires the invitation for bids shall, after revising the advance qualification review documents or bid invitation documents, carry out a new invitation for bids.

Article 24: If a bid inviting party splits up the project for which bids are invited for different sections, it shall comply with the relevant provisions of the Bidding Law and may not use the splitting up of the project to restrict or preclude potential bidders. A bid inviting party for a project that legally requires the invitation for bids may not split up the project in order to circumvent an invitation for bids.

Article 25: A bid inviting party shall specify the term of validity of bids in the bid invitation documents. The term of validity of bids shall start to count from the deadline for the submission of the bidding documents.

Article 26: If a bid inviting party requires, in the bid invitation documents, the bidders to provide a bid deposit, the amount of such deposit may not exceed 2% of the estimated value of the project for which bids are invited. The term of validity of the bid deposits shall be identical to that of the bids.

The bid deposit provided in cash or by cheque by a domestic entity bidding on a project that legally requires the invitation for bids shall be transferred from its basic account.

A bid inviting party may not divert bid deposits for other purposes.

Article 27: A bid inviting party may itself decide whether to set a reserve price. A project for which bids are invited may have only one reserve price. The reserve price must be kept confidential.

An intermediary firm that has been engaged to set a reserve price may not participate in the bidding for the project for which it was engaged to set the reserve price or prepare bidding documents or provide consulting services for bidders on the project.

If a bid inviting party has set a ceiling price for bids, it shall expressly state such ceiling price or the method of calculating the same in the bid invitation documents. A bid inviting party may not set a floor price for bids.

Article 28: A bid inviting party may not arrange for on-the-spot surveys of the project for single or some potential bidders.

Article 29: A bid inviting party may, in accordance with the law, fully or partially carry out a general contract bid invitation for the works and the goods and services relating to the construction of the works. If works, goods or services included within the scope of a general contract in the form of a provisional estimate fall within the scope of a project that legally requires the invitation for bids and reaches the size criterion specified by the state, an invitation for bids shall be carried out therefor in accordance with the law.

For the purposes of the preceding paragraph, the term “provisional estimate” means the amount for works, goods or services provisionally estimated by the bid inviting party in the bid invitation documents when the price cannot be determined for a general contract bid invitation.

Article 30: For a project the technology for which is complex or where it is impossible to precisely draft the technical specifications, the bid inviting party may carry out the invitation for bids in two stages.

During the first stage, the bidders shall submit technical proposals without quotes in accordance with the requirements of the bid invitation announcement or bid invitation letter, and the bid inviting party shall determine the technical standards and requirements based on the technical proposals submitted by the bidders and prepare the bid invitation documents.

During the second stage, the bid inviting party shall provide the bid invitation documents to the bidders that submitted technical proposals at the first stage, and the bidders shall submit, in accordance with the requirements of the bid invitation documents, bidding documents that include their final technical solutions and bid prices.

If the bid inviting party requires the bidders to provide bid deposits, such requirement shall be specified in the second stage.

Article 31: If a bid inviting party terminates the bid invitation, it shall, in a timely manner, publish an announcement or notify in writing the potential bidders that have been invited or that have obtained the advance qualification review documents and bid invitation documents. If the advance qualification review documents and bid invitation documents have already been sold or the bid deposits received, the bid inviting party shall, in a timely manner, refund the charge received for the advance qualification review documents and bid invitation documents and the bid deposits received with interest thereon at the rate for bank deposits over the same period.

Article 32: A bid inviting party may not restrict or preclude potential bidders or bidders by specifying unreasonable conditions.

Any of the following acts by a bid inviting party shall constitute restricting or precluding potential bidders or bidders by specifying unreasonable conditions:

(1) providing different project information in respect of the same project for which bids are invited to different potential bidders or bidders;

(2) the qualifications, technologies and/or commercial conditions it has set are inconsistent with the specific features and actual requirements of the project for which bids are invited or are irrelevant to the performance of the contract;

(3) setting a specific administrative area or the performance in or awards of a particular industry as conditions for additional points or conditions for winning the bid for a project that legally requires the invitation for bids;

(4) using different qualification review criteria or bid evaluation criteria for different potential bidders or bidders;

(5) restricting or designating specific patents, trademarks, brands, origins or suppliers;

(6) illegally placing restrictions on the form of ownership or organisational form of the potential bidders or bidders for a project that legally requires the invitation for bids; or

(7) using other unreasonable conditions to restrict or preclude potential bidders or bidders.

Part Three: Submission of bids

Article 33: Bidders participating in the submission of bids of a project that legally requires the invitation for bids shall not be restricted by region or department, and no entity or individual may illegally interfere therein.

Article 34: Legal persons, other organisations and individuals that have a material interest in the bid inviting party that could affect the impartiality of the bid invitation may not participate in the submission of bids.

Different entities of which the person in charge is the same person, or different entities between which a controlling or management relationship exists, may not participate in the bid for the same section or the bid for a project that is not divided into sections for bid invitation.

In the event of a violation of either of the preceding paragraphs, the relevant bid shall be invalid.

Article 35: If a bidder wishes to withdraw the bidding documents that it has already submitted, it shall notify the bid inviting party thereof in writing before the bid submission deadline. If the bid inviting party has received the bid deposit, it shall refund the same within five days from the date of receipt of the written withdrawal notice from the bidder.

If a bidder withdraws its bid invitation documents after the bid submission deadline, the bid inviting party shall not be required to refund the bid deposit.

Article 36: A bid inviting party shall refuse to accept bidding documents submitted by applicants that failed the advance review of their qualifications or bidding documents that are served late or that are not sealed as required in the bid invitation documents.

The bid inviting party shall truthfully record the date of service of the bidding documents and the manner in which they were sealed, and keep the same on file for future reference.

Article 37: A bid inviting party shall specify in the advance qualification review announcement, bid invitation announcement or bid invitation letter whether bids from consortiums will be accepted.

If the bid inviting party accepts bids from consortiums and will carry out an advance review of qualifications, a consortium shall be assembled before the submission of the application documents for the advance review of qualifications. If a consortium adds, removes or replaces members after the advance review of qualifications, its bid shall be invalid.

If parties constituting a consortium separately submit bids in their own names for the same project for which bids are invited or participate in the submission of bids by other consortiums, the relevant bids shall be invalid.

Article 38: If a material change to a bidder occurs, such as a merger, division or bankruptcy, it shall inform the bid inviting party thereof in writing in a timely manner. If the bidder ceases to satisfy the qualification conditions specified in the advance qualification review documents or bid invitation documents or its bid would affect the impartiality of the bid invitation, its bid shall be invalid.

Article 39: Bidders are forbidden from colluding in the submission of their bids.

Such collusion shall be constituted if:

(1) bidders reach agreement on substantive particulars of their bidding documents, such as their bid prices, through consultations;

(2) bidders reach agreement on the winning bidder;

(3) bidders agree that certain bidders will renounce their bid or winning of the bid;

(4) bidders that are members of the same group, association, chamber of commerce or other such organisation coordinate the submission of their bids as required by the organisation; or

(5) other joint action is taken by bidders with a view to winning the bid or to preclude a specific bidder.

Article 40: Bidders shall be deemed as having colluded in the submission of their bids if:

(1) the bidding documents of different bidders are prepared by the same entity or individual;

(2) different bidders appoint the same entity or individual to carry out bid submission matters;

(3) a project management member specified in the bidding documents of different bidders is the same person;

(4) the bidding documents of different bidders are unusually similar or their bid prices show a regular difference;

(5) the bidding documents of different bidders are bound together; or

(6) the bid deposits of different bidders are transferred from the account of the same entity or individual.

Article 41: Collusion between a bid inviting party and a bidder in the submission of a bid is prohibited.

Such collusion shall be constituted if:

(1) the bid inviting party opens the bidding documents before the bid opening and divulges the relevant information to a bidder;

(2) the bid inviting party directly or indirectly divulges the reserve price, the members of the bid evaluation committee or other such information to a bidder;

(3) the bid inviting party expressly or implicitly indicates to a bidder to lower or increase its bid price;

(4) the bid inviting party suggests a bidder replaces or amends its bidding documents;

(5) the bid inviting party expressly or implicitly indicates to a bidder to provide facilitating conditions for a specific bidder to win the bid; or

(6) other collusive acts are engaged in by a bid inviting party and bidder so that a specific bidder is determined as the winning bidder.

Article 42: Using a qualification certificate obtained through acquisition, renting, borrowing or otherwise to submit a bid constitutes submitting a bid in the name of a third party as specified in Article 33 of the Bidding Law.

Any of the acts set forth below committed by a bidder shall constitute using other fraudulent means as specified in Article 33 of the Bidding Law:

(1) using a forged or altered permit;

(2) providing a fraudulent financial position or performance;

(3) providing (a) fraudulent résumé(s) and/or proof(s) of employment relationship of the person in charge of the project or the main technical personnel;

(4) providing a fraudulent credit rating; or

(5) another act of fraud.

Article 43: An applicant submitting application documents for the advance review of its qualifications shall comply with the provisions on bidders of the Bidding Law and these Regulations.

Part Four: Opening of bids, evaluation of bids and determination of the winning bidder

Article 44: The bid inviting party shall open the bids at the time and place specified in the bid invitation documents.

The bids may not be opened if there are fewer than three bidders. In such a case, the bid inviting party shall carry out a new invitation for bids.

If a bidder has an objection to the bid opening, it shall raise the same on the spot at the bid opening, and the bid inviting party shall respond thereto on the spot and make a record thereof.

Article 45: The state implements uniform profession classification criteria and administration measures for bid evaluation experts. The specific criteria and measures shall be formulated by the State Council's development and reform department together with relevant State Council departments.

People's governments at the provincial level and relevant State Council departments shall establish a comprehensive pool of bid evaluation experts.

Article 46: With the exception of special projects as specified in the third paragraph of Article 37 of the Bidding Law, the expert members of the bid evaluation committee for a project that legally requires the invitation for bids shall be determined at random from the list of experts of the relevant profession in the pool of bid evaluation experts. No entity or individual may use any express or implicit method to designate or designate in a disguised manner the expert members on a bid evaluation committee.

The bid inviting party for a project that legally requires the invitation for bids may not replace the lawfully determined members of the bid evaluation committee for a reason not specified in the Bidding Law or these Regulations. The replacement of an expert member of a bid evaluation committee shall be carried out in accordance with the preceding paragraph.

If a member of a bid evaluation committee has a material interest in a bidder, he or she shall take the initiative to recuse himself or herself.

The relevant administrative supervision departments shall monitor the manner of determining the members of bid evaluation committees, the random selection of bid evaluation experts and the bid evaluation activities within the specified scope of their responsibilities. The working personnel of an administrative supervision department may not serve as members of the bid evaluation committee for a project the monitoring of which the department is responsible for.

Article 47: For the purposes of the third paragraph of Article 37 of the Bidding Law, the term “special project” means a project the technology for which is complex, that is highly specialised or in respect of which the state has special requirements and it would be difficult to ensure that experts determined at random would be competent to carry out the bid evaluation work.

Article 48: The bid inviting party shall provide to the bid evaluation committee the information required for the evaluation of the bids, but may not expressly or implicitly indicate to the committee a specific bidder that it favours or wishes to preclude.

The bid inviting party shall set a reasonable period of time for evaluating the bids based on factors such as the size of the project and its technical complexity. If more than one-third of the members of the bid evaluation committee deem the bid evaluation period insufficient, the bid inviting party shall extend the same appropriately.

If, in the course of the evaluation of the bids, a member of the bid evaluation committee cannot continue to evaluate the bids due to his or her having to recuse himself or herself, absenting himself or herself from his or her duties without authorisation, health reasons, etc., he or she shall be promptly replaced. The evaluation conclusion rendered by the replaced member of the bid evaluation committee shall be invalid, and his or her replacement shall carry out the evaluation anew.

Article 49: Members of a bid evaluation committee shall objectively and impartially issue an evaluation opinion in respect of the bidding documents in accordance with the Bidding Law and these Regulations and based on the bid evaluation criteria and by the method specified in the bid invitation documents. If the bid invitation documents are silent on the bid evaluation criteria and method, they may not serve as the basis for evaluating the bids.

Members of a bid evaluation committee may not have contact with bidders in private, may not accept property or other advantages offered by bidders, may not ask the bid inviting party its intent on the determination of the winning bidder, may not accept an express or implied request made by any entity or individual favouring or precluding a specific bidder and may not commit any other act whereby they perform their duties in a non-objective and non-impartial manner.

Article 50: If a reserve price has been set for a project for which bids are invited, the bid inviting party shall announce the same at the time of the opening of the bids. A reserve price may only serve as a reference in the evaluation of the bids. Whether a bid price is close to the reserve price may not be set as a condition for winning the bid, and whether a bid price exceeds the lower or upper range around the reserve price may not be a condition for denying a bid.

Article 51: A bid shall be denied by the bid evaluation committee if:

(1) the bidding documents do not bear the stamp of the bidding entity and/or the signature of the person in charge of the entity;

(2) a bid consortium fails to submit its joint bid agreement;

(3) the bidder fails to satisfy the qualification conditions specified by the state or in the bid invitation documents;

(4) one bidder submits two or more sets of different bidding documents or two or more bid prices, unless the bid invitation documents require the submission of alternative bids;

(5) the bid price is less than cost or exceeds the ceiling price set in the bid invitation documents;

(6) the bidding documents fail to address the substantive requirements and conditions in the bid invitation documents; or

(7) the bidder has committed a violation of the law, such as collusion in the submission of its bid, fraud or bribery.

Article 52: If a bidding document has content the meaning of which is unclear or contains obvious typographical or calculation errors and the bid evaluation committee deems it necessary for the bidder to give the necessary clarification and/or explanation, it shall notify such bidder in writing. The clarification and/or explanation by the bidder shall be in writing, and may not exceed the scope of the bidding documents or alter substantive contents of the bidding documents.

The bid evaluation committee may not implicitly ask, or induce, a bidder to give a clarification or explanation, and may not accept a clarification or explanation offered by a bidder at its own initiative.

Article 53: Once the evaluation of the bids is completed, the bid evaluation committee shall submit to the bid inviting party its written bid evaluation report and list of candidates for the status of winning bidder. There shall not be more than three candidates for the status of winning bidder and they shall be ranked in order.

The bid evaluation report shall be signed by all of the members of the bid evaluation committee. If a member of the bid evaluation committee holds a dissenting opinion in respect of the bid evaluation results, he or she shall explain his or her dissenting opinion and give the reasons therefor in writing, and the bid evaluation report shall note such dissenting opinion. If a member of the bid evaluation committee refuses to sign the bid evaluation report and fails to explain his or her dissenting opinion and give the reasons therefor, he or she shall be deemed as agreeing to the bid evaluation results.

Article 54: For a project that legally requires the invitation for bids, the bid inviting party shall announce the candidates for the status of winning bidder within three days from the date of receipt of the bid evaluation report, and the announcement period may not be less than three days.

If a bidder or a materially interested party has an objection to the bid evaluation results for a project that legally requires the invitation for bids, it shall raise the same during the announcement period for the candidates for the status of winning bidder. The bid inviting party shall respond within three days from the date of receipt of the objection, and shall temporarily suspend the bid invitation and submission activities until it gives the response.

Article 55: For a project that legally requires the invitation for bids and in which state funds hold a controlling or predominant position, the bid inviting party shall determine the candidate for the status of winning bidder ranked first as the winning bidder. If the candidate for the status of winning bidder ranked first renounces its winning of the bid, is unable to perform the contract due to force majeure, fails to provide a performance bond as required in the bid invitation documents, or is found to have committed a violation of the law that affected the awarding of the bid and therefore does not satisfy the conditions for winning the bid or other such circumstance under which the conditions for winning the bid are not satisfied exists, the bid inviting party may either determine the candidate for the status of winning bidder according to the ranking on the list of candidates for the status of winning bidder submitted by the bid evaluation committee as the winning bidder, or invite bids anew.

Article 56: If a relatively large change in the business or financial position of a candidate for the status of winning bidder occurs or if such candidate commits a violation of the law and the bid inviting party deems that the same could affect its capacity to perform, the same shall be reviewed and confirmed by the original bid evaluation committee based on the criteria and by the method specified in the bid invitation documents before issuance of the letter of acceptance.

Article 57: The bid inviting party and the winning bidder shall execute a written contract in accordance with the Bidding Law and these Regulations. The major provisions of the contract, such as those on the subject matter of the contract, the price, quality and term for performance, shall be consistent with the contents of the bid invitation documents and the winning bidder's bidding documents. The bid inviting party and the winning bidder may not conclude other agreements that run counter to the substantive provisions of the contract.

The bid inviting party shall refund the bid deposits to the winning bidder and the losing bidders with interest at the rate for bank deposits over the same period no later than five days after the execution of the written contract.

Article 58: If the bid invitation documents require the winning bidder to provide a performance bond, it shall do so as required by the bid invitation documents. The performance bond may not exceed 10% of the contract amount.

Article 59: The winning bidder shall perform its obligations, and complete the project that it has won, in accordance with the contract of the project won. The winning bidder may not transfer the project that it has won to a third party, or break up the project that it has won and subsequently transfer the parts to third parties.

Subject to the provisions of the contract or the consent of the bid inviting party, the winning bidder may sub-contract out the completion of some of the non-principal, non-key parts of the work for the project that it has won. The sub-contractors shall possess the appropriate qualifications required and may not further sub-contract their projects.

The winning bidder shall be accountable to the bid inviting party for the sub-contracted projects, and the sub-contractors shall bear joint and several liability for the sub-contracted projects.

Part Five: Complaints and handling thereof

Article 60: If a bidder or a materially interested party is of the opinion that the bid invitation and submission activities were not in conformity with laws or administrative regulations, it may file a complaint with the relevant administrative supervision department within 10 days from the date on which it learnt or ought to have learnt thereof. The complaint shall have clear claims and the necessary supporting documentation.

If a complaint is filed in respect of a matter specified in Article 22, 44 or 54 hereof, an objection shall first be raised in respect thereof to the bid inviting party. The time required to respond to the objection shall not be counted as part of the time period specified in the preceding paragraph.

Article 61: If a complainant files a complaint in respect of the same matter with two or more administrative supervision departments with the authority to accept the same, the administrative supervision department that first receives the complaint shall be responsible for dealing therewith.

An administrative supervision department shall decide on whether or not to accept a complaint within three working days from the date of receipt of the complaint, and render a written handling decision within 30 working days from the date of acceptance of the complaint. If an inspection, testing, assessment or expert evaluation is required, the time required therefor shall not be counted as part of the period.

If the complainant has fabricated facts, forged materials or obtained supporting documentation by illegal means to file the complaint, the administrative supervision department shall reject its complaint.

Article 62: When an administrative supervision department is handling a complaint, it shall have the right to review and take copies of relevant documents and information and investigate relevant circumstances, and relevant entities and personnel shall cooperate therewith. When necessary, the administrative supervision department may order that the bid invitation and submission activities be suspended.

The working personnel of an administrative supervision department shall keep confidential in accordance with the law the state secrets and trade secrets to which they are privy in the course of monitoring inspections.

Part Six: Legal liability

Article 63: If a bid inviting party commits any of the following acts that restrict or preclude potential bidders, the relevant administrative supervision department shall impose penalties in accordance with Article 51 of the Bidding Law:

(1) it fails to publish an advance qualification review announcement or bid invitation announcement in the designated media in accordance with provisions for a project that legally requires a public invitation for bids; or

(2) the contents of the advance qualification review announcement or bid invitation announcement for the same project that it publishes in different media differ, affecting potential bidders' applications for advance review of their qualifications or submission of their bids.

If a bid inviting party for a project that legally requires the invitation for bids fails to publish an advance qualification review announcement or bid invitation announcement in accordance with provisions and the same constitutes circumvention of an invitation for bids, penalties shall be imposed in accordance with Article 49 of the Bidding Law.

Article 64: If any of the following circumstances applies to a bid inviting party, the relevant administrative supervision department shall order it to rectify the matter, and may fine it up to Rmb100,000:

(1) it was required in accordance with the law to carry out a public invitation for bids but instead carried out a private invitation for bids;

(2) the deadline for the sale, clarification or amendment of the bid invitation documents or advance qualification review documents, or the deadline set for the submission of the application documents for the advance review of qualifications or bidding documents is not in conformity with the Bidding Law or these Regulations;

(3) it accepted participation in the bidding by an entity or individual that failed the advance review of its/his/her qualifications; or

(4) it accepted bidding documents the acceptance of which it was required to refuse.

If a bid inviting party commits any of the acts set forth in Item (1), (3) or (4) of the preceding paragraph, the supervisor directly in charge and other directly responsible personnel of the entity shall be disciplined in accordance with the law.

Article 65: If a bid invitation agency itself submits a bid or submits a bid on behalf of another for a project in which it is acting as agent, or provides consulting services to a bidder for such project, or if an intermediary firm that has been engaged to set the reserve price participates in the bidding for the project for which it was engaged to set the reserve price or prepares bidding documents or provides consulting services for a bidder for such project, its legal liability shall be pursued in accordance with Article 50 of the Bidding Law.

Article 66: If a bid inviting party charges a bid deposit or performance bond in excess of the percentage specified herein or fails to refund, in accordance with provisions, the bid deposits with interest thereon at the rate for bank deposits over the same period, the relevant administrative supervision department shall order it to rectify the matter and may fine it up to Rmb50,000; if a third party was caused to incur a loss, the bid inviting party shall be liable for compensation in accordance with the law.

Article 67: If a bidder colludes with one or more other bidders or with the bid inviting party in the submission of its bid, or if a bidder seeks to win the project by offering a bribe to the bid inviting party or a member of the bid evaluation committee, the acceptance of its bid shall be void; if a criminal offence is constituted, its criminal liability shall be pursued in accordance with the law; or if a criminal offence is not constituted, penalties shall be imposed in accordance with Article 53 of the Bidding Law. In the case where the bidder was not the winning bidder, the amount of the fine on the entity shall be calculated based on the contract amount for the project at the percentage specified in the Bidding Law.

any of the acts set forth below, the same shall constitute an act the circumstances of which are serious as specified in Article 53 of the Bidding Law, and the relevant administrative supervision department shall cancel the bidder's qualifications to bid on projects that legally require the invitation for bids for one to two years:

(1) it sought to win the bid by offering bribes;

(2) it colludes in the submission of bids on at least two occasions within a period of three years;

(3) its collusion in the submission of bids harms the lawful rights and interests of the bid inviting party and other bidders or those of the state, the collective or citizens, causing direct economic losses of at least Rmb300,000; or

(4) it commits another act of collusion in the submission of bids the circumstances of which are serious.

if, within three years from the date of expiration of the penalty execution period specified in the second paragraph of this Article, a bidder again commits one of the illegal acts specified in that paragraph, or colludes in the submission of bids or offers a bribe to have its bid accepted and the circumstances thereof are particularly serious, the administration for industry and commerce shall revoke its business licence.

If laws or administrative regulations provide otherwise in respect of the penalties for collusion on the bid price, such provisions shall apply.

Article 68: If a bidder submits its bid in the name of a third party or uses other fraudulent means to have its bid accepted, the acceptance of its bid shall be void; if a criminal offence is constituted, its criminal liability shall be pursued in accordance with the law; or if a criminal offence is not constituted, penalties shall be imposed in accordance with Article 54 of the Bidding Law. In the case where the bidder for a project that legally requires the invitation for bids did not win the bid, the amount of the fine on the entity shall be calculated based on the contract amount for the project at the percentage specified in the Bidding Law.

If a bidder commits any of the acts set forth below, the same shall constitute an act the circumstances of which are serious as specified in Article 54 of the Bidding Law, and the relevant administrative supervision department shall cancel the bidder's qualifications to bid on projects that legally require the invitation for bids for one to three years:

(1) it forges or alters its qualification certificate or other permit to fraudulently have its bid accepted;

(2) it submits its bid in the name of a third party on at least two occasions within a period of three years;

(3) it uses fraudulent means to have its bid accepted causing the bid inviting party to incur direct economic losses of at least Rmb300,000; or

(4) it otherwise uses fraudulent means to win the bid and the circumstances of which are serious.

If, within three years from the date of expiration of the penalty execution period specified in the second paragraph of this Article, a bidder again commits one of the illegal acts specified in such paragraph, or uses fraudulent means to win a bid and the circumstances thereof are particularly serious, the administration for industry and commerce shall revoke its business licence.

Article 69: If a qualification certificate is sold or leased to a third party to submit a bid, administrative penalties shall be imposed in accordance with laws and administrative regulations; if a criminal offence is constituted, criminal liability shall be pursued in accordance with the law.

Article 70: If a bid inviting party for a project that legally requires the invitation for bids fails to assemble a bid evaluation committee in accordance with provisions, or its determination or replacement of a member of the bid evaluation committee violates the Bidding Law or these Regulations, the relevant administrative supervision department shall order it to rectify the matter, may fine it up to Rmb100,000, and shall discipline the supervisor directly in charge and other directly responsible personnel of the entity in accordance with the law; the evaluation conclusions rendered by the illegally determined or replaced member of the bid evaluation committee shall be invalid, and the evaluation shall, in accordance with the law, be carried out anew.

If a member of the working personnel of the state illegally interferes in the selection of the members of a bid evaluation committee in any manner, his or her legal liability shall be pursued in accordance with Article 81 hereof.

Article 71: If a member of a bid evaluation committee commits any of the acts set forth below, the relevant administrative supervision department shall order him or her to rectify the matter; if the circumstances are serious, he or she shall be prohibited from participating for a set period of time in the evaluation of bids for projects that legally require the invitation for bids; if the circumstances are particularly serious, his or her qualifications to serve as a member of a bid evaluation committee shall be cancelled:

(1) he or she ought to recuse himself or herself but does not do so;

(2) he or she absents himself or herself from his or her duties without authorisation;

(3) he or she fails to evaluate the bids based on the criteria and by the method specified in the bid invitation documents;

(4) he or she has contact with bidders in private;

(5) he or she asks the bid inviting party its intent on the determination of the winning bidder or accepts an express or implied request made by any entity or individual favouring or precluding a specific bidder;

(6) he or she does not issue a denial opinion in respect of a bid where such denial is called for in accordance with the law;

(7) he or she implicitly asks, or induces, a bidder to give a clarification or explanation, or accepts a clarification or explanation offered by a bidder at its own initiative; or

(8) he or she commits another act whereby he or she performs his or her duties in a non-objective and non-impartial manner.

Article 72: If a member of a bid evaluation committee accepts property or other advantage from a bidder, the property shall be confiscated, he or she shall be fined not less than Rmb3,000 and not more than Rmb50,000, his or her qualifications to serve as a member of a bid evaluation committee shall be cancelled, and he or she may not again participate in the evaluation of bids for projects that legally require the invitation for bids; if a criminal offence is constituted, his or her criminal liability shall be pursued in accordance with the law.

Article 73: If a bid inviting party for a project that legally requires the invitation for bids commits any of the acts set forth below, the relevant administrative supervision department shall order it to rectify the matter and may fine it up to 1% of the amount of the project based on the accepted bid; if a third party is caused to incur a loss, the bid inviting party shall be liable for compensation in accordance with the law; and the supervisor directly in charge and other directly responsible personnel of the entity shall be disciplined in accordance with the law:

(1) it fails to issue a letter of acceptance without a legitimate reason;

(2) it determines the winning bidder in a manner contrary to provisions;

(3) it changes the result of the determination of the winning bidder without a legitimate reason after the issuance of the letter of acceptance;

(4) it fails to enter into a contract with the winning bidder without a legitimate reason; or

(5) it imposes additional conditions on the winning bidder at the time of entering into the contract.

Article 74: If a winning bidder fails to enter into a contract with the bid inviting party without a legitimate reason, proposes additional conditions to the bid inviting party at the time of entering into the contract, or fails to provide a performance bond as required in the bid invitation documents, its qualifications as winning bidder shall be cancelled and its bid deposit will not be refunded. In the case of a winning bidder for a project that legally requires the invitation for bids, the relevant administrative supervision department shall order it to rectify the matter and may fine it up to 1% of the amount of the project that it won.

Article 75: If the bid inviting party and winning bidder enter into a contract that runs counter to the bid invitation documents and the winning bidder's bidding documents, the major terms of the contract are inconsistent with the contents of the bid invitation documents and the winning bidder's bidding documents or the bid inviting party and winning party enter into an agreement that runs counter to the substantive provisions of the contract, the relevant administrative supervision department shall order them to rectify the matter and may fine them not less than 0.5% and not more than 1% of the amount of the project based on the accepted bid.

Article 76: If a winning bidder transfers the project that it won to a third party or breaks up the project that it won and subsequently transfers the parts to third parties, sub-contracts out some of the principal, key parts of the work for the project that it has won to a third party in violation of the Bidding Law or these Regulations, or a sub-contractor further sub-contracts out its project, the transfer or sub-contract shall be invalid and a fine of not less than 0.5% and not more than 1% of the amount of the transferred or sub-contracted project shall be imposed; if there is any illegal income, the same shall be confiscated; an order to suspend operations and undergo rectification may be given; and if the circumstances are serious, the administration for industry and commerce shall revoke its business licence.

Article 77: If a bidder or a materially interested party fabricates facts, forges materials or obtains supporting documentation by illegal means to lodge a complaint, causing a third party to incur a loss, the bidder or materially interested party shall be liable for compensation in accordance with the law.

If a bid inviting party fails to respond to an objection in accordance with provisions and proceeds with the bid invitation and submission activities, the administrative supervision department shall order it to rectify the matter; if it refuses or fails to rectify the matter, thereby affecting the results of the determination of the winning bidder, the matter shall be dealt with in accordance with Article 82 hereof.

Article 78: If a professional with professional bid invitation qualifications handles bid invitation matters in a manner that violates relevant state provisions, he or she shall be ordered to rectify the matter and be given a warning; if the circumstances are serious, he or she shall be ordered to cease engaging in bid invitation matters for a specific period of time; and if the circumstances are particularly serious, his or her professional bid invitation qualifications shall be cancelled.

Article 79: The state shall establish a bid invitation and submission credibility system. An administrative supervision department shall announce in accordance with the law the administrative handling decisions it renders in respect of violations of the law by bid inviting parties, bid invitation agencies, bidders, members of bid evaluation committees, etc.

Article 80: If a project check/examination and approval department fails to check/examine the bid invitation scope, bid invitation method and organisational form of a bid invitation for a project in accordance with the law, the supervisor directly in charge and other directly responsible personnel of the department shall be disciplined in accordance with the law.

If a relevant administrative supervision department fails to perform its duties in accordance with the law, fails, in accordance with the law, to investigate and deal with an act that violates the Bidding Law or these Regulations, fails to handle a complaint in accordance with provisions or fails to announce in accordance with the law the administrative handling decision it rendered in respect of a violation of the law by a party involved in a bid invitation and submission, the supervisor directly in charge and other directly responsible personnel shall be disciplined in accordance with the law.

If a member of the working personnel of a project check/examination and approval department or administrative supervision department practises favouritism by committing fraud, abuses his or her authority or is derelict in his or her duties, and the same constitutes a criminal offence, his or her criminal liability shall be pursued in accordance with the law.

Article 81: If a member of the working personnel of the state uses the advantages of his or her position to illegally interfere in bid invitation and submission activities by any means, whether direct or indirect, express or implicit, and any of the circumstances set forth below applies thereto, he or she shall be disciplined in accordance with the law by the recording of a demerit or the recording of a major demerit; if the circumstances are serious, he or she shall be disciplined in accordance with the law by demotion or removal from office; if the circumstances are particularly serious, he or she shall be disciplined in accordance with the law by dismissal; or if a criminal offence is constituted, his or her criminal liability shall be pursued in accordance with the law:

(1) he or she demands that no invitation for bids be carried out for a project that legally requires the invitation for bids, or demands that a non-public invitation for bids be carried out for a project that legally requires a public invitation for bids;

(2) he or she demands that a member of the bid evaluation committee or the bid inviting party select the bidder designated by him or her as a candidate for the status of winning bidder or the winning bidder, or otherwise illegally interferes in the bid evaluation activities, thereby affecting the results of the determination of the winning bidder; or

(3) he or she otherwise illegally interferes in bid invitation and submission activities.

Article 82: If the bid invitation and submission activities for a project that legally requires the invitation for bids violate the Bidding Law or these Regulations and materially affect the results of the determination of the winning bidder, an effect that cannot be rectified by taking remedial measures, the bid invitation, bids and acceptance of the bid shall be invalid, and bids shall be invited or evaluated anew in accordance with the law.

Part Seven: Supplementary provisions

Article 83: Bid invitation and submission associations shall carry out their activities in accordance with their charters formulated in accordance with the law, and strengthen industry self-regulation and service.

Article 84: If laws or administrative regulations on government procurement provide otherwise in respect of the invitation for and submission of bids for government procurement of goods or services, such provisions shall apply.

Article 85: These Regulations shall be effective as of February 1 2012.