Administrative Measures for Bidding and Submission of Tendering for Construction Projects

Decree No. 23 Issued by the Ministry of Construction on December 30, 1994

(The Administrative Measures for the Bidding and Submission of Tendering for Construction Projects were approved at the 17th executive meeting of the Ministry on November 6, 1992, and are hereby published, and shall be implemented as of the date of its publishing)

Table of Contents:

Chapter I   General Principles

Article 1.  
These measures are formulated to suit the needs of the socialist market economy economic structure, enhance the government's administration of the bidding and submission of tendering for construction projects to ensure that developers and construction entities trade and compete on a fair and equal basis in the building market, to control the construction schedule, ensure quality of construction, and improve investment efficiency.

Article 2.  

Bidding and tendering shall be required for all construction projects invested by any government department, State-owned enterprise or institution, including those involving new construction, modification, expansion or technological renovation, with the exception of any special projects in which bidding is not suitable.

Article 3.

Bidding and tendering for construction projects shall be conducted under the principles of fairness, equal value, compensation and good faith, with room for competition based on levels of technology and management, social reputation and reasonable quotation, without any regional or departmental restrictions.

Article 4.

Bidding and tendering for construction is an economic activity conducted by the parties to construction projects pursuant to law, and shall be governed and bound by the laws and regulations of the State, and any developer meeting the criteria and construction enterprises with relevant qualifications may participate in the process.

Chapter II   Organization and Function

Article 5.  
The Ministry of Construction shall be responsible for the administration of bidding and tendering for construction projects all over the country. Its major functions are as follows:

    (1)  To comply with and observe the relevant laws, regulations and policies of the State governing bidding and tendering for construction projects, and formulate the relevant rules and regulations thereof;

    (2)  To direct and inspect bidding and tendering work in each region and department;

    (3)  To summarize and exchange experiences regarding bidding and tendering work, and provide relevant services;

    (4)  To protect national interests and supervise the bidding and tendering activities of all major projects; and

    (5)  To examine and approve the inter-provincial agencies for construction bidding and tendering.

Article 6.  
The competent department in charge of construction in the people's government in each province, autonomous region and municipality shall be responsible for the administration of bidding and tendering for construction projects within their jurisdiction. Its major functions are as follows:

    (1)  To comply with and observe the relevant regulations and policies of the State governing bidding and tendering for construction projects, and formulate the relevant rules and regulations thereof;

    (2)  To supervise and inspect the relevant bidding and tendering work, and summarize and exchange work experiences;

    (3)  To examine and approve the qualifications of agencies engaged in consulting and construction supervision for construction bidding and tendering;

    (4)  To mediate any disputes arising from bidding and tendering activities; and

    (5)  To veto any bidding results in violation of the regulations governing bidding and tendering.

Article 7.  
The competent construction department in each province, autonomous region or municipality may, with reference to actual conditions and subject to the approval of the people's government on the same level, determine the institutional set up and source of operating funds of the bodies at each level in charge of bidding and tendering.

As authorized by the competent construction department of the people's government at the same level, the institutional bodies at each level shall be specifically responsible for the administration of the bidding and tendering within their jurisdictions. Their major functions are as follows:

    (1)  To examine the qualifications of bid invitation units;

    (2)  To examine bidding applications and bidding documents;

    (3)  To examine pre-tender estimates;

    (4)  To supervise bid openings, evaluations, selections and negotiations;

    (5)  To mediate any disputes arising from bidding and tendering activities;

    (6)  To veto any bidding results in violation of the regulations governing bidding and tendering;

    (7)  To penalize any act in violation of the regulations governing bidding and tendering; and

    (8)  To supervise the execution and performance of the contract and awards.

Article 8.  
Industrial and communications departments under the State Council shall, in conjunction with the local competent construction departments, complete to the best of their ability the administrative work relevant to the bidding and tendering of any major construction projects invested directly by the department and its affiliated investment company. Their major functions are as follows:

    (1)  To observe the relevant regulations and policies of the State governing bidding and tendering for construction projects;

    (2)  To direct and organize the bidding and tendering work of any major construction projects invested directly by the department and its affiliated investment company, as well as the bidding work of the construction under its direct subordination;

    (3)  To supervise and inspect the bidding and tendering activities conducted by the relevant entities of the department;

    (4)  To handle the relevant matters for project bidding with the competent construction department in the province, autonomous region or municipality where the project is to be conducted.

Chapter III   Bid Invitation

 

Article 9.  
Based on the principle of holding the owner responsible for construction projects, the developer shall be entitled to the following rights and interests as both the investor and the owner:

    (1)  To organize bid invitation in accordance with the relevant procedures;

    (2)  To appropriately select and identify tendering units based on the enterprise qualifications standards stipulated by the government; and

    (3)  To select and determine the bid-winning price and bid winner in accordance with the relevant bid assessment principles and price control stipulations.

Article 10.  
The project developer shall meet the following requirements in order to organize bid invitation:

    (1)  It is a legal person or other type of organization established under the law;

    (2)  It has the economic and technological management personnel required for the project for which bid invitation is organized;

    (3)  It has the ability to organize and prepare bid documents;

    (4)  It has the capability to examine the qualifications of the tendering units;

    (5)  It has the ability to organize bid opening, bid assessment and selection.

If the project developer does not meet the relevant conditions set forth above in Subsection 2-5, it shall entrust a consulting/supervising unit with corresponding qualifications to act as its agent in organizing the bidding.

Article 11.  
Construction projects shall meet the following conditions in order for bid invitation to go ahead:

    (1)  The project budget has been approved;

    (2)  The construction project has been included in the State, departmental or regional annual fixed asset investment plan;

    (3)  Expropriation of land for use by the construction project has been completed;

    (4)  Construction drawings and technical materials are adequate to meet the needs of the construction work;

    (5)  Construction funds and sources of major building materials and equipment have been made available;

    (6)  Approval has been obtained from the local planning department where the construction project is located; the construction site has been leveled and is connected to water, electric supply and to traffic, or the leveling work and connection to water, electricity and roads has been made as a part of the bid package.

Article 12.  
Bidding for construction may utilize such methods as entire project bidding, unit project bidding or special professional project bidding. However, no bidding is permitted for a partial or itemized project of a unit project.

Article 13.  
Bidding for construction may adopt the following methods:

    (1)  Public bidding. The unit offering bid invitation publishes public announcement for bidding through newspapers, radio or television;

    (2)  Invitational bidding. The unit offering bid invitation gives out bid invitation letters to three or more enterprises which have the capability to undertake the construction project;

    (3)  Bid negotiation. With respect to special projects for which neither public bidding nor invitational bidding is appropriate, application shall be made to the department in charge of construction at county or higher level or to a bid institution authorized thereby to conduct bid negotiation upon approval. The number of units participating in the bid negotiation shall not be less than two (including two).

Article 14.  
Bidding for construction shall generally be conducted via the following procedure:

    (1)  Organization of a bid committee by the developer in accordance with the requirements of Article 10 hereof;

    (2)  Submission of a bidding application to the institution in charge of bidding and tendering. The application letter shall mainly include: qualifications of the bid inviting unit, conditions of the bidding project, the proposed bidding method and requirements of the tendering units;

    (3)  Preparation of the bidding documents and pre-tender estimate, which shall be reported to the to the institution in charge of bidding and tendering for approval;

    (4)  Publishing of the bidding announcement or sending of the bid invitations;

    (5)  Submission of the tender applications by the tendering units;

    (6)  Examination of the qualifications of the tendering units and notification of the tender applicants of the examination results;

    (7)  Delivery of bid documents, design drawings and technical materials to the qualified tendering units;

    (8)  Organization of visits to the construction site by the tendering units and answering of questions regarding the bid documents;

    (9)  Organization of a bid appraisal organization and formulation of bid assessment and selection methods;

    (10)  Convention of a bid opening meeting and examination of the tendering offers;

    (11)  Organization of bid assessment work and decision on the bid winner;

    (12)  Sending out the bid winning notice; and

    (13)  Execution of the construction contract between the project developer and the bid winner.

Article 15.  
The bid documents shall generally include:

    (1)  Overall introduction to the project: name, address of the project, projects under bidding, project occupation area, floor space and technical requirements, quality standards and site conditions, bidding method and the required project commencement and completion schedule, and requirements regarding the qualifications of the tendering units;

    (2)  Necessary design drawings and technical materials;

    (3)  Detailed list of project works;

    (4)  Construction fund certificate, project payment method and percentage of advanced payment issued by a bank;

    (5)  Method of supply of major materials (steel, wood, cement, etc.) and equipment; good processing and ordering situation, and method for handling material and equipment price differences;

    (6)  Construction requirements for special projects and the technical specifications to be adopted;

    (7)  Requirements regarding the preparation of bid documents and principles of bid assessment and selection;

    (8)  Agenda for such activities as tender offering, bid opening, bid assessment and selection;

    (9)  "Conditions for the Project Construction Contract" and adjustment requirements;

    (10)  The amount of bid bond required, which shall be determined on the basis of the scale of the construction project and shall be a maximum of RMB1,000.00;

    (11)  Other matters requiring explanation.

Article 16.  
Once the bid documents are issued, the bid inviting unit may not alter their content or add supplementary conditions of its own free will. If any alteration or supplement is indeed required, application shall be submitted to the institution in charge of bidding and tendering, and the notice of such alteration or supplement shall be served to the tendering units seven days before the tender offering deadline.

Article 17.  
Within 10 days of the issuance of the bid documents, the bid inviting unit shall call meetings to answer any questions regarding the bid documents and such meeting minutes shall be regarded as a supplement to the bid documents and shall be filed with the institution in charge of bidding and tendering, and served through written notification to all the tendering units.

Article 18.  
The time period from the date of issuance of bid documents to the deadline of tender submission shall not be fewer than 15 days for small-scale projects and shall not be fewer than 30 days for large or medium-scale projects.

Chapter IV   Pre-tender Estimate

Article 19.  
A pre-tender estimate must be prepared for the bidding invitation of any construction project. The pre-tender estimate shall be prepared by the bid invitation unit on its own or through an entrusted consulting or construction supervising agency approved by the competent construction department as capable of preparing a pre-tender estimate.

Article 20.  
The following principles shall be observed in the preparation of a pre-tender estimate:

    (1)  The volume of construction work shall be determined and the pre-tender estimate shall be prepared in accordance with the designs and relevant materials and bidding documents and with reference to the State-stipulated norm and code for technical and economic standards;

    (2)  The pre-tender estimate price shall consist of the cost, profit and taxes, which shall generally be limited within the amount of the approved general estimate (or the revised estimate) and the investment of the lump sum contract;

    (3)  As a price contemplated by the construction developer, the pre-tender estimate price shall seek to comply with actual market changes, and shall be favorable to competition and guarantee the project quality;

    (4)  The pre-tender price shall take into consideration factors affecting price fluctuation, including labor, materials, number and shift of machinery, etc., as well as the contingency sum, lump sum fee and measure-taking fee. For a project of which excellence is required, relevant fees shall be added;

    (5)  Only one pre-tender estimate shall be prepared per project.

Article 21.  
A pre-tender estimate shall be subject to the examination and approval of an institutional body for bidding and tendering.

Article 22.  
Once it is examined and approved, the pre-tender estimate shall be sealed until the time when it is opened. All those who have had access to the pre-tender estimate shall be liable for keeping the estimate confidential, without any disclosure.

Article 23.  
For a project the price of which is subject to negotiation, its contract price shall be discussed and agreed upon by the parties thereto, and be filed with the institutional body for bidding and tendering.

Chapter V   Tender Submission

Article 24.  
As the producer of the architectural product, the construction enterprise shall be entitled to the following rights during the bidding and tendering process:

    (1)  Any construction enterprise or consortium with the business license and the required certificate of qualifications may participate in the tendering as required in the bidding documents;

    (2)  The enterprise shall have the right to decide the bid price with reference to its operating conditions and the marketing information available;

    (3)  The enterprise shall have the right to decide special prices for any project requiring excellent quality;

    (4)  The enterprise shall have the right decide whether or not to participate in the bid competition in light of its operating conditions.

Article 25.  
The tender submitting entity shall provide the following information to the bid inviting entity:

    (1)  Enterprise business license and qualification certificate;

    (2)  History of the enterprise;

    (3)  Internal capital situation;

    (4)  Number of full-time staff, including the number of technicians and skilled workers, and the average skill levels; a list of main construction equipment and machinery owned by the enterprise;

    (5)  A list of the major construction projects undertaken over the past three years and the status of the quality;

    (6)  A list of current construction projects, including those under construction and those which have not yet commenced.

Article 26.  
The tenderer shall pay a deposit for bidding documents upon receipt of such documents.

Article 27.  
The tenderer shall conscientiously prepare the book of tender as required by the bidding documents. The book of tender shall contain the following:

    (1)  Overall descriptions;

    (2)  The bidding price as calculated per the volume of the construction project and the quantity of consumption of the major materials, including steel, wood and cement. The tenderer may submit the bidding price at its sole discretion based on the unified rules for work volume calculation;

    (3)  The construction plan and the major construction equipment as selected;

    (4)  Major technical measures to guarantee the quality, progress and construction safety of the project;

    (5)  Proposed schedule of commencement and completion and the general schedule;

    (6)  Confirmation of the major terms and conditions of the contract.

Article 28.  
The book of tender shall be sealed by the entity and the legal representative or the proxy authorized by the legal representative. The tenderer shall seal the book of tender and submit it to the bid invitation unit within the stipulated period. If any error is found in the book of tender, amendment shall be made officially in writing before the deadline of the bid, or otherwise the original book of tender shall prevail.

Article 29.  
The tenderer may propose any amendment to the design and the terms and conditions of the contract, work out the corresponding bid price and book of tender, seal these off and send them to the bid invitation unit for reference.

Chapter VI   Bid Opening, Evaluation and Selection

Article 30.  
The activities of the bid opening, evaluation and selection shall be performed by the bid invitation unit under the auspices of the institutional body for bidding and tendering.

Article 31.  
The bid invitation unit shall invite the representatives from the relevant departments to attend the bid opening meeting, publicly announce the methods of bid evaluation and selection, unseal the books of tender and additional materials, and publicize the main contents and pre-tender estimate of the books.

Article 32.  
The book of tender shall become invalid if:

    (1)  It is not sealed;

    (2)  It does not contain the seal or stamp of the tenderer and its legal representative or the proxy as authorized by the legal representative;

    (3)  It fails to follow the stipulated format, or the contents are incomplete, blurred or illegible;

    (4)  It misses the deadline for submission;

    (5)  The tenderer does not attend the bid opening meeting.

Article 33.  
The bid evaluation team shall consist of representatives from the construction developer and its superior competent department (including the consulting and supervising agencies entrusted by the developer) and the entities invited by the developer. Relevant experts shall be invited if it is a special or large-scale project.

Article 34.  
Bid evaluation and selection shall be conducted by using scientific methods and on the basis of equal competition, fairness and justice. The accepted tenderer shall be decided on a selective basis after a general overall evaluation is conducted of the bid price, term of construction, quantity of consumption of major materials, construction plan, actual quality records and the reputation of the tenderer.

Article 35.  
The period from the bid opening (or the commencement of the bid negotiation) to the final bid selection shall be no more than 10 days for a small-scale project, and no more than 30 days for a large-scale project. Such period may be properly extended under special circumstances.

Article 36.  
After the successful tenderer is selected, the bid invitation unit shall send out the tender award notification within 7 days, with copies to each unsuccessful tenderer and submission to the institutional body. Unsuccessful tenderers shall return the bidding documents and relevant materials within 7 days upon receipt of notification, and the bid invitation unit shall refund the tenderer the deposit.

Article 37.  
Thirty days after the tender award notification is sent out, the successful tenderer and the construction developer shall execute the project contract on the basis of the bidding documents and the book of tender.

Chapter VII   Penalty Provisions

Article 38.  
In case of any of the following actions in violation of these Regulations, the administrative department in charge of construction of the people's government at the county or higher level or the agency authorized thereby may, based on the seriousness of the case, give out warnings or mete out such penalties as a public notice of criticism, termination of bidding, cancellation of tendering right for a certain period, disapproval for commencement of work, ordered cessation of construction work, and fines:

    (1)  No bidding is carried out for projects which should be subject to bidding;

    (2)  The bid inviting unit conceals any facts about the project (i.e., the construction scale, construction conditions, guarantee of investment and materials, etc.);

    (3)  The pre-tender estimate is disclosed, which affects the normal proceeding of the bidding work;

    (4)  The bid inviting unit fails to truthfully complete the application form and makes false declaration regarding its enterprise qualification ratings;

    (5)  The tendering units conspire with one another to commit corrupt practices and drive the bid price up, making bid selection difficult or impossible;

    (6)  After bid selection, the winner refuses to sign the construction contract within the stipulated time period.

Article 39.  
If the developer utilizes its bid invitation right to seek bribes or kick-backs, or if the tendering unit wins the bid through such illegal means as bribing or offering kick-backs, they shall be dealt with in accordance with the relevant stipulations of the "Administrative Regulations Governing the Construction Market".

Article 40.  
After the tendering units submit their offers, if the bidding fails due to the fault of the bid inviting unit (developer), the bid inviting unit (developer) shall make certain economic compensations to each of the tendering units.


Article 41.  
In case of any malpractice for personal benefit, such as the seeking or taking of bribes by the staff of the administrative department in charge of construction of the people's government or the agency authorized thereby, the practitioners of such malpractice shall be given administrative penalties by their unit or higher level authorities. If their acts constitute a crime, they shall be pursued for their criminal liabilities by the judicial department in accordance with the law.

Article 42.  
In case of any dispute arising from bidding or tendering activities, the relevant parties shall endeavor to resolve such dispute through mutual consultation or with the mediation of the institution in charge of bidding and tendering. If such mediation fails, the dispute may be resolved through legal proceedings.

Article 43.  
If a relevant party disputes the penalties, such party may apply to the higher level authority of the penalty-issuing agency for review of the penalty decision within 15 days of receipt of the penalty decision. If the party disputes the review decision, such party may file a suit to the people's court within 15 days of receipt of the review decision. Such party may also directly file a suit with the people's court without undergoing the review process. If a party fails both to apply for a review or to file a suit with the people's court and to implement penalty decisions, the penalty-issuing agency may apply to the people's court for enforcement.

Chapter VIII   Supplementary Provisions

Article 44.  
The administrative departments in charge of construction in each of the provinces, autonomous regions and municipalities may, based on local specific actual conditions, formulate detailed implementing rules or regulations governing construction bidding and tendering, which shall be reported to the Ministry of Construction for filing.

Article 45.  
Separate regulations will be formulated for projects involving foreign participation.

Article 46.  
The Ministry of Construction shall be responsible for the interpretation of these Regulations.

Article 47.  
These Regulations shall come into force as of the date of promulgation. If there are any discrepancies between these Regulation and past rules and regulations, these Regulations shall prevail.

 

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