RESTRICTED
ACCORD GENERAL SUR LESTARIFS GPA/IC/W/9
23novembre 1994
DOUANIERS ETLECOMMERCE
(94-2516)
Original: anglais Comité intérimaire desmarchés publics
REGIME DEPASSATION DESMARCHES PUBLICS DU
TERRITOIRE DOUANIER DISTINCT DETAIWAN,
PENGHU, KINMEN ETMATSU
Communication duTerritoire douanier distinct
deTaiwan, Penghu, Kinmen etMatsu
Comme suiteàlademande faiteparleComité intérimaire àsaréunion du29juin1994, le
gouvernement duTerritoire douanier distinct deTaiwan, Penghu, Kinmen etMatsu aprésenté trois
documents, endemandant qu'ilssoient distribués auxmembres duComité intérimaire. Cesdocuments
sontreproduits enannexe1auprésent document, comme suit:
Annexe 1: Description ducadre juridique régissant lesmarchés publics surleTerritoire
douanier distinct deTaiwan, Penghu, Kinmen etMatsu.
Annexe 2: Introduction àlaréforme durégime depassation desmarchés publics du
Territoire douanier distinct deTaiwan, Penghu, Kinmen etMatsu.
Annexe 3: Législation etréglementation relatives auxmarchés publics duTerritoire
douanier distinct deTaiwan, Penghu, Kinmen etMatsu.
1Enanglais seulement.GPA/IC/W/9
Page2
ANNEX 1
DESCRIPTION OFLEGAL FRAMEWORK OFGOVERNMENT PROCUREMENT
INTHE SEPARATE CUSTOMS TERRITORY OFTAIWAN,
PENGHU, KINMEN AND MATSU
15November 1994
I. Laws andRegulations Applied toGovernment Procurement
Thefollowing lawsandregulations apply togovernment entities atalllevels, including
central, provincial andcounty governments, andgovernment-owned enterprises, ontheir
procurement ofproducts andconstruction works.
(1) LawofAudit, Article 59andArticle 60;
(2) Ordinance Concerning Inspection Procedure Governing Construction Work,
Procurement andDisposal ofProperties byGovernment Agencies;
(3) Implementation Rules oftheLawofAudit, Articles 42to68.
II. Main Features oftheGovernment Procurement Rules
1. Exclusion ofapplication:
Contracts inresponse tonatural disasters, economic crises, stateofurgency, orother
special circumstances, maybeexcluded from theapplication ofgovernment procurement
procedures (refer toArticles 28,29,34and35oftheOrdinance Concerning Inspection
Procedure Governing Construction Work, Procurement andDisposal ofProperties by
Government Agencies, andArticles 50and53oftheImplementation Rules oftheLawof
Audit).
2. Threshold:
Opentenderingproceduresshallbeusedforcontractsofproductsorconstructionservices
estimated toequal orexceed NT$50 million, except forspecial reasons. Selective tendering
procedures may beused when value ofthecontract falls within NT$50 million and
NT$5 million, butcertain criteria havetobemet. Single tendering procedures maybeused
atthedecision oftheheadofentity when value ofthecontract fallsbelow NT$5 million (refer
toArticles 6,7and11oftheOrdinance Concerning Inspection Procedure Governing
Construction Work, Procurement andDisposal ofProperties byGovernment Agencies).
3. Principles regarding publication ofinformation:
Thesolicitation notice ofopen tenders ispublished inlocal newspapers foratleast
twodays. Noregulation astowhatinformation shallbecontained inthenotice ofproposed
procurementorwhichnewspapershallbeused.Solicitationsusingselectiveandsingletendering
procedures arenotrequired tobepublished. Contract-awarding information foralltypes ofGPA/IC/W/9
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tendering procedures isnotrequired tobepublished (refer toArticle 10oftheOrdinance
Concerning Inspection Procedure Governing Construction Work, Procurement andDisposal
ofProperties byGovernment Agencies).
4. Technical specifications:
There arenonationwide regulations onpreparation oftechnical specifications fortender
documentation, except inthecaseofconstruction contracts. Forsuchcontracts, ifpatented
products orproducts incertain trade names arerequired duetospecial needs, suchproducts
shall, inprinciple, havenosubstitutes oralternatives available, andadetailed specification
ofsuchproducts shall besetforth inthetender documentation. Ifthevalue ofanyofthe
saidproducts isestimated toequal orexceed acertain threshold amount (NT$50 million
currently), theprocurement entity shallsubstantiate thefactsandreasons andobtain aprior
approval from ahigher authority incharge (refer toArticle 43oftheImplementation Rules
oftheLawofAudit).
5. Procedures tobefollowed:
(a) Open Tendering Procedures: allinterested suppliers maysubmit atender.
(b) Selective Tendering Procedures: twoormore eligible suppliers willbeselected
bytheprocurement entity torespond toasolicitation (refer toArticles 6and
7oftheOrdinance Concerning Inspection Procedure Governing Construction
Work, Procurement andDisposal ofProperties byGovernment Agencies, and
Articles 46and48oftheImplementation Rules oftheLawofAudit).
(c) Single Tendering Procedures: only onesupplier willbeselected bythe
procurement entity torespond toasolicitation (refer toArticles 6and11of
theOrdinance Concerning Inspection Procedure Governing Construction Work,
Procurement andDisposal ofProperties byGovernment Agencies and
Articles 46,47and48oftheImplementation Rules oftheLawofAudit).
6. Selection andcriteria forawarding contract:
Theaward ofcontract will,inprinciple, bemade tothebidder whose bidmeets the
requirements ofthetender andwhose bidpriceisnotonlythelowest oneamong allacceptable
bidders butalsoequal toorlower thanthegovernment estimate. Ifsuchbidder 'sbidprice
ishigher thanthegovernment estimate, hemaybegiven aone-time priority toreduce his
price. Ifthereduced bidprice isstillhigher thanthegovernment estimate, allacceptable
biddersmaybegiventheopportunitytore-bidlowerpricesforpossibleselectionofasuccessful
bidder whose bidprice isthelowest one. Intheevent thatthelowest bidprice ishigher than
thegovernment estimate by20percentorishigher thanthebudget amount, allbidsshall
berejected.
Theaboveawardproceduremakesitimpossibleforprocuremententitiestosetevaluation
criteria andaward acontract tothebidder whoisdetermined tobethemost advantageous.GPA/IC/W/9
Page4
7. Statistical obligations:
There isnoruleconcerning thestatistical obligations forgovernment procurement
entities.GPA/IC/W/9
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ANNEX 2
ANINTRODUCTION ONTHE REFORM OFGOVERNMENT PROCUREMENT
REGIME BYTHE SEPARATE CUSTOMS TERRITORY
OFTAIWAN, PENGHU, KINMEN AND MATSU
15November 1994
TheSeparate Customs Territory ofTaiwan, Penghu, Kinmen andMatsu (hereinafter
referred toas"CT") isconducting awide range ofreforms inthegovernment procurement
régime withthepurpose toaccess theGATT/WTO Agreement onGovernment Procurement
(AGP). Thefollowing isageneral description ofthereforms:
I. Adjustment oftheStructure ofGovernment Procurement Organizations
1. Establish the"Committee onGovernment Procurement" toundertake thefollowing
responsibilities:
(1) tostudy, promulgate andamend policies andregulations ongovernment
procurement;
(2) toliaise among government entities fortheprocurement matters;
(3) toreview andapprove procurement contracts;
(4) tosupervise andevaluate thepractices ofprocurement bygovernment entities;
(5) tosettle procurement disputes;
(6) totrainprocurement specialists; and
(7) togather, publish andanalyse procurement information.
2. Agencies responsible forimplementation ofgovernment procurement
(1) Atcentral government level, there aretwotypes ofgovernment procurement:
(i) centralizedprocurementwhichisapplicabletothecasesincludedinCT's
offer under AGP, thecases withaseparate value exceeding apre-
determined threshold, andthegovernment entities withinsufficient
procurement specialists;
(a) reorganize the"Public Construction Supervisory Board" under
Executive Yuan intothe"Committee forPublic Construction"
toberesponsible fortheprocurement ofconstruction services,GPA/IC/W/9
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(b) authorize the"Central Trust ofChina" under theMinistry of
Finance toberesponsible fortheprocurement ofproducts and
services, and
(c) establish the"Bureau ofMilitary Procurement" toberesponsible
forprocurement ofmilitary supplies.
(ii) decentralizedprocurementwhichisapplicabletothecasesexcludedfrom
CT'soffer under AGP andthose withaseparate value oflessthanthe
threshold;
Specialized agencies (e.g."Bureau ofNational Highway Construction"
intheMinistry ofTransportation andCommunications) andstate-owned
enterprises areresponsible fortheirownprocurement.
(2) Atlocal government level:
(i) thecentralized procurement system forcentral government could apply
tothelocal government bydesignating responsible agencies;
(ii) specialized agencies andgovernment-owned enterprises inprovincial
ormunicipal governments areresponsible fortheirownprocurement.
II. Removal oftheDiscriminatory Policies
1. Toabolish theexisting tendering procedure bydistinguishing between localbidsand
foreign bidsforsome procurement cases.
2. Toamend the"Statute Governing theAssistance toRetired Military Personnel" by
abolishing theprovisions regarding theprivilege totheRet-ser Engineering Agency offirst
priority tonegotiate thetender.
3. Toamendthediscriminatorytreatmentonforeignsuppliersindomesticmarket,including
theabolishment ofthearearestrictions andtherequirement onanewforeign construction
firmtostartthebusiness inlocal market withthec-class licence.
4. Toaccelerate theprocess ofprivatization ofstate-owned enterprises, andgradually
reduce themeasures ofassisting domestic industries through forgovernment procurement.
III. Strengthen Laws andRegulations Related toGovernment Procurement
1. Drafting the"Statute forGovernment Procurement"
CTisnowdrafting anewbasic law,the"Statute forGovernment Procurement", to
replace theexisting audit lawsandregulations governing government procurement. Thenew
basic lawfollows therules andprinciples setforth intheAGP anditsmain contents areas
follows:GPA/IC/W/9
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(1) Scope ofapplication:
(i) Central government agencies
PresidentialOffice,NationalAssemblyandagenciesunderthefiveYuans
(ii) Local government agencies
Provincial (metropolitan) andcounty (municipal) governments andlocal
assemblies
(iii) Government-owned enterprises andnon-profit organizations sponsored
bygovernment.
(Theagencies applied totheAGP willdepend onthecoming negotiations with
signatories ofAGP.)
(2) Principles andrules oftheStatute:
(i) Principle ofcompetition
(a) TheStatute willdistinguish thetendering procedures intoopen
tendering, selective tendering andlimited tendering based onthe
AGP. Thetendering procedures willbeestablished according
totheprinciple ofcompetition. Besides, competitive procedures
willbeformed fortheprocurement oflong-term supply contract,
turnkey construction contract andjointconstruction services
(b) Thegovernment procurement exceeding acertain amount must
beimplemented intheopentendering procedure. Thethresholds
ofprocurement applied totheAGP bydifferent government
entities willdepend onAGP negotiations
(c) Technical specifications andqualification ofsuppliers willbe
established according totheAGP andinternational practices,
soastoprevent thecollusion ofbid-tenderings andunfair
treatment todifferent suppliers
(d) Theceiling priceisapplicable toregular procurement contracts.
Aparallel system without ceiling price willbeapplicable to
purchase ofhigh-tech products andconstruction works involving
special technology.
(ii) Principles oftransparency
(a) Designate agencies topromptly publish information regarding
government procurement covered bytheAGP
(b) Allow areasonable period forinterested tenders tosubmit bidsGPA/IC/W/9
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(c) Establish asystem oftendering procedures toensure afair,
prompt andeffective enforcement oftheprinciple setoutinthe
AGP
(iii) Systematization ofcontract administration
(a) Establish aneffective management system oncontract
performance andprovide thestandards andprocedures on
inspection
(b) Improve subcontract management
(c) Establish guidelines fortheuseofpublic lands andgovernment
properties
(d) Reasonable control oncontract modification
(iv) Effective settlement ofprocurement disputes
(a) Establish the"Committee onDispute Settlement" under
government procurement entities andprovide procedures for
dispute settlement inorder tostrengthen thefunction of
administrative remedies
(b) Improvethefunctionofcommercialarbitrationsinprivatesector.
2. Drafting related administrative regulations
(1) The"Committee onGovernment Procurement" willbeauthorized bytheStatute
toprescriberelatingregulationsgenerallyapplicabletoallprocurementcontracts
(2) Delegate thepower tospecific agencies toprescribe necessary supplementary
orders.GPA/IC/W/9
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ANNEX 3
LAWS AND REGULATIONS RELATED TOGOVERNMENT PROCUREMENT
INTHE SEPARATE CUSTOMS TERRITORY OFTAIWAN,
PENGHU, KINMEN AND MATSU
15November 1994
(Atentative translation inEnglish forreference)GPA/IC/W/9
Page10
Table ofContents
1. LawofAudit page11
2. Implementation Rules oftheLawofAudit page12
3. Rules fortheProcurement ofForeign Goods page19
4. Statute forInspection Procedures Governing Construction
Works, Procurement ofProducts, andDisposal ofProperties
byGovernment Agencies page21
5. Guidelines forProcurement ofTechnical Services from
Technical Consulting Organizations byGovernment Entities page29GPA/IC/W/9
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THE LAW OFAUDIT
Note: Theprovisions ofArticles 59and60arerelated togovernment procurement
Article 59
Procuremententitiesshallcomplywiththeopentenderingprocedures,selectivetendering
procedures, orsingle tenderings forprocurement ofproducts, construction services, orthe
salesofproperties, forwhich thecontract value isestimated toequal orexceed thethreshold
amount prescribed bytheMinistry ofAudit, andinform theauditing authorities within acertain
period oftimetosendauditors toaudit. Auditors shallcorrect anynon-conformity deviating
from theprocedures orfrom contractual andregulatory requirements.
Thesaidthresholdamountandtheauditingprocedureswillbeprescribedbyotherlaws.
Article 60
When acost-plus-fee contract isawarded foraprocurement ofproducts orconstruction
services, thespecific conditions forevaluating thecontract price shall beidentified inthe
contract.Auditingauthoritiesmayaudittheallowabilityofactualcostincurredbythecontractor
andreport theaudit finding totheprocurement entity.GPA/IC/W/9
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THE IMPLEMENTATION RULES OFTHE LAW OFAUDIT
Note: Theprovisions ofArticles 42through 68arerelated togovernment procurement
Article 42
Ifforeign companies arenotabletosubmit atthetimeofbidding thebusiness certificate
andtax-payment certificate applicable tolocalcompanies under theopentendering procedures
forconstruction services andproduct contracts, theprocurement entity shallestablish inthe
solicitation documents what certificates shallbesubmitted bythose foreign companies.
Article 43
Ifpatented products orproducts incertain trade names arerequired foraconstruction
contract forspecial reasons, itmeans inprinciple thatsuchproducts havenosubstitutes or
available alternatives, andadetailed specification ofsuchproducts shallbesetforth inthe
solicitation documents. Ifthevalue ofanyproducts equals orexceeds thethreshold amount,
theprocurement entity shallsubstantiate thefactsandreasons andobtain apriorapproval from
ahigher authority incharge.
Article 44
Inprinciple, thebidder shalldeposit abidbondinacorrespondent bankofthetreasury.
Ifsuchacorrespondent bank isnotavailable initslocality orforother special reasons, the
procurement entity mayappoint another bank toreceive thebidbond.
Article 45
When thebidssubmitted havebeencollusive forafraud, orthebidder hasthreatened
others nottosubmit theirbids, theprocurement entity shalldeclare thesolicitation voidand
report thesituation tothejudicial authority forinvestigation. Ifanyoftheabove illegal
behaviour isdiscovered afterthecontract isawarded, thesame legalproceeding shallapply.
Article 46
Inthecasethatasolicitation could notbeprocessed through opentendering procedures
forreasons ofspecial construction orproduct contracts, oftheneedfortechnical requirement,
oftherequirement ofkeeping secrecy, orofpolicy concerns, itmaybesolicited through
selective orsingle tendering procedures, provided thatsuchreasons shall have been duly
substantiated toandapproved bythehighauthority within therelevant government organization
andanaudit authority. Theaudit authority shallexercise itsapproval through acommittee
resolution.GPA/IC/W/9
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Article 47
Insofar asisnecessary when, forthereason ofacquiring aforeign special technology
tomanufacture aproduct locally, asolicitation could notbeperformed byusing open or
selective tendering procedures, itmaybesolicited byusing single tendering procedures,
provided thatsuchreasons shallhavebeendulysubstantiated toandapproved bytheExecutive
Yuan andaudit authority. Theaudit authority shallmake itsdecision through acommittee
resolution.
Article 48
Thesingle tendering procedures maybeusedforasolicitation duetothereason of
absence ofbids, ofonlyonebidinresponse toanopen tender, ofbidprices exceeding the
government estimate foraconstruction contract oraproduct contract, oftendering twice but
nobidpriceishighenough toreach thegovernment estimate forselling agovernment property,
provided thatsuchreason shall have beendulysubstantiated toandapproved bytheaudit
authority.
Insofar asisnecessary when, forreasons ofonlytwobidsoronebidinresponse to
anopentender forconstruction contract orproduct contract, andthattheprocurement entity
confirms thatthequalification andspecification requirements setforth inthesolicitation
documents arenotinadequate andonlythese twobidders orthesingle bidder isqualified for
contracting, theopentendering procedures may, afterapproval bytheauditor inpresence,
bechanged intoselective orsingle tendering procedures asthecasemaybe.Such reasons
shall berecorded andsuchchange shallbeeffective onlywhen theyaredulysubstantiated
andapproved bytheaudit authority.
Theaudit authority shallmake adecision onapproval ordisapproval within 48hours
afterreceiving awritten application from theprocurement entity.
Article 49
Theprocurement entity mayapply thesingle tendering procedures toacquire an
acceptable realestate atapublished oranevaluated price made byagovernment authority,
orother prices related tothose dealings atnearby places orofsurveyed data, provided that
suchrealestate issolicited byanopen tender andaprior approval hasbeenobtained from
theaudit authority.
Article 50
Insofarastheopen,selectiveandsingletenderingproceduresarenotworkabletoacquire
seasonal agricultural products, mineral products, sand, stone, rawmaterials, orhandiworks,
theprocurement entity maypropose analternative forprocuring these products andtheprices
related thereto. Such proposal shallbesubmitted toagovernment authority incharge andan
audit authority forapproval respectively.GPA/IC/W/9
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Article 51
Agovernment-ownedtradingentitymay,afterobtainingapprovalsfromahighauthority
incharge andanaudit authority, handle byitself fordealings either pursuant toagovernment
policy oratitsownbenefits. Such approvals shallbeobtained yearly.
Article 52
Calculation ofthevalue ofaconstruction service shallinclude thecostofmaterials
andlabour services. Ifsome ofthematerials havealready beenacquired under tendering
procedures audited byanaudit authority, thentheopen orselective tendering oftherest
materials andlabour services maybehandled bytheprocurement entity itself, provided that
thetotalvalue oftherestonesislessthanthethreshold amount.
Article 53
Insofar asisnecessary foragovernment-owned entity tohaveitsmarine vessel repaired
inaforeign country, andtherepair contract orprocurement contract could notbesolicited
pursuant tothelegal procedures concerning open, selective andsingle tendering, the
contract-awarding andacceptance ofsuchrepair andprocurement contracts canbehandled
bytheentity itself. However, theentity shallsubmit thedocuments concerned andreport the
casetotheaudit authority forreviewing.
Article 54
Ifanentity isauthorized tohandle byitselfaconstruction contract oraproduct contract
whose value equals orexceeds thethreshold amount, theentity shallnotonlyfollow thelegal
requirements throughout theprocedures, butalsosubmit thedocuments concerned andreport
thecasetotheaudit authority within twenty daysaftersigning thecontract andfinalizing the
acceptance procedures respectively.
Article 55
When using theopen, selective orsingle tendering procedures, alistofitems and
quantities fortheproducts andservices specified inthesolicitation documents shallbeincluded
inthestatement ofgovernment estimate forcross-checking purposes. Theunitprice ofeach
itemshallrepresent thecurrent market prices, andbeadded withtaxes, regulatory charges,
andareasonable feetoconclude thegovernment estimate. Suchestimate shallbeincorporated
withitemized price analysis orcostanalysis andother supporting dataandbesubmitted to
theaudit authority within atime-limit forreviewing. Ifonlyafewitems aresolicited, the
procurement entity maypresent suchgovernment estimate together withthebasisofcalculation
andother related datatotheauditor-in-presence forreviewing atthetimebefore opening of
bidsorcommencing asingle-source price negotiation.
Provided thatthemarket price hasbeen changed after submitting thegovernment
estimate, theprocurement entity maypresent supporting datatotheauditor-in-presence for
considering arevision totheestimate. Thereasons forrevision, themeans ofcalculation,
andtherelevant datashallberecorded intheminutes ofmeeting.GPA/IC/W/9
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Thegovernment estimate shall bekeptinstrict confidence. Theestimate provided
bytheprocurement entity shallbethebasis fordiscussion among allgovernment officers in
presence atthetimeoffinalizing agovernment estimate before opening ofbidsorcommencing
asingle-source price negotiation. Iftheauditor intends tochange theestimate, heorsheshall
substantiate theposition withreasons andfacts.
Iftheprocurement entity doesnotagree withtheauditor onthematter ofchanging
theestimate, suchentity shallstatethereasons indetail inthestatement ofgovernment estimate
withsignaturesofresponsibleofficers,andtheopeningofbidsshallsubsequentlybesuspended.
Allbidsreceived shalltherefore bepackaged, sealed, andsigned byallofficers inpresence.
Theauditor shallthenreport thematter tohisorheroffice, andaresolution shallbemade
availabletotheprocuremententitywithinforty-eighthours.Afterthat,allthebidscantherefore
beopened.
Article 56
Ifthereisonlyonebidinresponsetosellingofagovernmentproperty,itmaybeopened
forconsideration. Provided thatthebidprice equals orexceeds thegovernment estimate, a
contract canbeawarded accordingly.
Article 57
Iftwo-stepopeningofbidsisusedtosolicitaconstructioncontractoraproductcontract,
i.e.toopen thetechnical proposal firstandthenopen theprice proposal afterevaluation of
technical proposal, theprocurement entity shallnotify theaudit authority tomonitor ateach
step. Theregulations concerning two-step opening shall besetforth inthesolicitation
documents.
Article 58
Ifallthebidprices inresponse toasolicitation ofconstruction contract oraproduct
contract arehigher thanthegovernment estimate, theprocurement entity may, inastateof
urgency ortomeetitsneeds, givethelowest acceptable bidder aone-time priority toreduce
itsbidprice. Ifthereduced bidpriceisstillhigher thanthegovernment estimate, allacceptable
bidders maybegiven equal opportunities tore-bid lower prices. Intheevent thatfollowing
suchprocedure, thelowest bidprice isstillhigher thanthegovernment estimate by20per
centormore, re-tendering isrequired. Ifthelowest bidprice among allacceptable bidders
exceeds thegovernment estimate butisnothigher thansuchestimate by20percentormore,
andtheprocurement entity decides toaward acontract atsuchbidprice foracertain reason,
thefollowing regulations shallbeobserved:
(1) Foraconstruction contract, ifsuchbidprice isnothigher thanthegovernment
estimate by10percentormore, theprocurement entity maysubstantiate thereason
totheauditor-in-presence forhisorherreporting thecasetotheaudit authority for
approval. Ifsuchbidprice ishigher thansuchestimate by10percentormore but
isnothigher thantheestimate by20percentormore, theprocurement entity may
substantiate thereason andobtain prior approvals from ahigher authority incharge
andanaudit authority respectively.GPA/IC/W/9
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(2) Foraproduct contract, ifsuchbidprice isnothigher thanthegovernment
estimate by10percentormore, theprocurement entity maysubstantiate thereason
andrecord itintheminutes fortheauditor-in-presence tohaveaconsent within the
authority concerned or,ifbeyond theauthority concerned, tohaveareserved consent
andtoreport thecasetohisorheroffice foraresolution. Ifsuchbidprice ishigher
thantheestimate by10percentormore butisnothigher thantheestimate by20per
centormore, andtheofficers from ahigher authority incharge would givetheir
approval tosuchcontract-awarding, thentheprocurement entity maysubstantiate the
reason andrecord ittogether withthefactofsuchapproval from suchofficers inthe
minutes fortheauditor tomake areserved consent andtoreport thecasetohisorher
office foraresolution. Intheabsence ofofficers from ahigher authority incharge
atthemeeting, theprocurement entity shallreport thecasetothehigher authority for
itstransmitting totheaudit authority forapproval.
(3) Iftheaudit authority doesnotsendanauditor tomonitor theprocedure and
notify theprocurement entity todoitbyitself, theentity maymake adecision on
contract-awarding provided thattheprice foraward isnothigher thanthegovernment
estimate by10percentormore. However, theentity shallreport anabstract ofbids
andthereason ofcontract-awarding totheaudit authority forreviewing. Iftheprice
foraward ishigher thantheestimate by10percentormore, butisnothigher than
20percentormore,theprocuremententitymayawardwithreservation,andsubstantiate
thereason toahigher authority incharge fortransmitting totheaudit authority for
approval.
Theaudit authority shallmake aresolution andinform thesame totheprocurement
entity within forty-eight hours afterbeing notified.
Theabove-mentioned regulations mayapply totheselective orsingle tendering
procedures.
Article 59
Ifthelowestbidpriceamongallacceptablebiddersinresponsetoaconstructioncontract
oraproduct contract islower thanthegovernment estimate by20percentormore, the
procurement entity mayreserve some oftheother bidprices, suspend thecontract-awarding,
anddemand thebidder oflowest bidtomake anexplanation toitsbidprice onthespotor
tosubmit acostanalysis within aperiod ofthree days. Theprocurement entity shallevaluate
theexplanation orthecostanalysis within thefollowing three days. Iftheprocurement entity
isoftheopinion thatthelowest bidprice among allacceptable bidders isunreasonably low
which mayleadtodeterioration ofquality, theentity mayaward thecontract totheacceptable
bidderwhooffersthesecondlowestbidprice,providedthatitshallhavebeendulysubstantiated
andapproved byahigher authority incharge andanaudit authority. Intheevent thata
construction contract istobeawarded ataprice which islessthanthegovernment estimate
bymore than20percent,theprocurement entity may,inaddition totherequested performance
bond orguarantee, demand thebidder todeposit abond forsuchdifference.GPA/IC/W/9
Page17
Article 60
Iftheopening, negotiation, orcontract-awarding procedures havebeenmonitored by
anauditor, theprocurement entity shalleither sendthecontract documents totheauditor for
verification andfiling purpose, orsendaduplicate copyofthecontract totheauditauthorities.
Article 61
When thevalue ofacontract equals orexceeds thesaidthreshold amount, any
amendment tothecontract which would result inanincrease ofthecontract value byanamount
which equals orexceeds thethreshold amount shallnotbemade untiltheprocurement entity
hassubstantiated thereasons toandobtained anapproval from theaudit authority.
Article 62
Aconstruction contract oraproduct contract shallbesetforth therein themeans and
standards formeasuring, inspection andtesting tobeapplied onperforming theacceptance
procedures.
Article 63
Foraconstruction contract whose value equals orexceeds thethreshold amount, the
procurement entity shallsubmit aprogress schedule totheaudit authority aftercommencing
thework.Bythetimeofaccomplishingthework,theacceptanceproceduresshallbeperformed
immediately, which innoevent shallbesuspended formore thanthirty daysunless forspecial
reasons. Theprocurement entity shallalsosubmit apreliminary acceptance record totheaudit
authority and,atleastfivedaysbefore thescheduled beginning dateforacceptance procedures,
notify theaudit authority tomonitor theacceptance procedures. Anydiscrepancy discovered
during theacceptance procedures shallberecorded, andtheprocurement entity shalldemand
thecontractor toremedy suchdiscrepancies within adesignated period oftime.
Article 64
Onperforming acceptance procedures, arecord concerning theacceptance ofa
construction work oraproduct shall beprepared bytheprocurement entity andsigned by
theofficers inpresence. Ifthere areanydiscrepancies tothedrawings, samples, orcontract
requirements, theauditor shallreject tosignontheacceptance record. Ifforspecial reasons
theprocurement entity would wishtoaccept anon-conformity work orproduct butdemand
acompensationfromthecontractorasasubstitution,suchsubstitutionshallhavetobeapproved
bytheaudit authority inadvance.
Thetransferring procedures forselling agovernment property mayfollow thesame
regulation asmentioned above.
Theacceptance procedures foraproduct maybehandled bytheprocurement entity
itself when itisdifficult tonotify theauditauthority tomonitor theprocedures duetothecase
ofdeliveries insmall quantities orinseveral shipments, ofarrivals indifferent ports, of
immediate service inastateofurgency, orofaquantity toberealized afterunpacking allGPA/IC/W/9
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packages oraccomplishing theinstallation work, provided thatsuchcaseshall have been
substantiated toandapproved byauditauthority. Under suchcircumstances, theprocurement
entity shallsendasummary report totheaudit authority afteraccomplishing allacceptance
procedures.
Article 65
Thewaiver ofapplying audit procedures toastate-owned enterprise foritsfrequently
procuredrawmaterialsandconsumablematerialsbytheapprovalofahigherauthorityincharge
andanauditauthority shallbeeffective forafiscal yearonly. Iftheenterprise wishes toextend
suchprivilege tothenextfiscal year, theenterprise shallsubstantiate thereasons toandobtain
anapproval from ahighauthority incharge andanaudit authority respectively.
Article 66
Insofar asisnecessary when, forreason ofnatural disaster, economic crisis, orastate
ofurgency, aconstruction work oraprocurement ofproducts isnotabletofollow theaudit
procedures, theprocurement entity shallsubstantiate thefactandreason toandobtain aprior
approval from theExecutive Yuan, andnotify theaudit authority thereof.
Within twenty daysaftersigning acontract inaccordance withtheabove regulation,
theprocurement entity shall submit aduplicate copy ofthecontract andother related data
totheaudit authority. Theprocurement entity shallalsonotify theaudit authority tomonitor
theacceptance procedure.
Article 67
Ifthecontract value isrelatively small orforother special reasons, theauditauthority
maydecide whether tosend anauditor tomonitor thetendering procedures concerning
bid-opening, pricenegotiation, contract-awarding, acceptance, andtransferring ofaproperty.
Article 68
Ifanaudit authority doesnotsenditsauditor tomonitor thetendering procedures, the
government entity shallreport thecasetotheaudit authority together withaduplicate copy
ofthecontract, drawings, astatement ofgovernment estimate, anabstract ofbids,anabstract
ofcontract-awarding, andother related dataforreviewing bytheaudit authority. Theaudit
authority maymake enquiries orsendanauditor tothegovernment entity toreview thematters
concerned.GPA/IC/W/9
Page19
RULES FOR THE PROCUREMENT OFFOREIGN GOODS
Article 1
TheRules arepromulgated withaviewtostrengthening thegovernment procurement
system andtoenhance theconsolidated procurement functions.
Article 2
Procurement ofgoods offoreign origin bycentral government entities (hereinafter
referred toas"Entities") shallbeconsolidated through Central Trust ofChina (hereinafter
referred toas"CTC"). State-owned enterprises mayprocure goods offoreign origin ontheir
ownorthrough CTC.
Article 3
GoodsmentionedintheRulesshallincludeagriculturalandmineralproducts,machinery
equipment, traffic andmass transportation equipment, facilities, parts andaccessories, raw
materials, other miscellaneous supplies, andtheservices incidental tothesupply ofgoods.
Article 4
Entities may,inaccordance withtheapplicable procurement regulations, procure goods
offoreign origin ontheirown, provided that:
(1) thevalue ofprocurement contract isbelow thethreshold ofaudit prescribed
bytheMinistry ofAudit; or
(2) theEntities concerned arepublic universities orcolleges, orpublic academic
institutions forresearch ortraining, andthegoods areprocured foreducational,
researching, ortraining programmes; or
(3) theEntities concerned arearmed forces, andtheprocurement programmes
proceed inaccordance withthearmed services procurement regulations; or
(4) theacquisition planisanon-consolidated oneapproved bytheExecutive Yuan.
Article 5
CTCshallaward contracts bymeans ofopentendering procedures, selective tendering
procedures, orsingle tendering procedures, andEntities shallreceive andinspect thegoods
inaccordance withtheapplicable lawsandregulations.
Article 6
Deleted.GPA/IC/W/9
Page20
Article 7
Oncondition thatthecontract signed withthesuccessful tenderer requires thebuyer
tocontract forcarriage orinsurance forimportation ofgoods, CTCshallgivedomestic carriers
andinsurers thepriority tocontract.
Article 8
Entities shalldivide thegoods tobeprocured intosystematized categories. Goods in
thesame category shallnormally beconsolidated intooneprogramme, andtheprogramme
shallnormally proceed forprocurement inonetime.
Article 9
Detailed procurement provisions under theRules shallbeestablished byCTC.
Article 10
TheRules shallbeimplemented from thedateofissuance.
(Effective onSeptember 26,1990)GPA/IC/W/9
Page21
STATUTE FOR INSPECTION PROCEDURES GOVERNING CONSTRUCTION
WORKS, PROCUREMENTS OFPRODUCTS, AND DISPOSAL OF
PROPERTIES BYGOVERNMENT AGENCIES
Note: Theamendment tothisStatute isintheprocess oflegislation
Article 1
ThisStatute isprescribed inaccordance withtheprovision ofArticle 59oftheAudit
Law.
Article 2
Theinspection work, procurement ofproducts, ordisposal ofproperties byvarious
government agencies shallbegoverned bythisStatute.
Article 3
Construction works, procurement ofproducts, ordisposal ofproperties byvarious
government agencies shallbeprocessed inaccordance withbudgetary procedure.
Article 4
Disposal ofproperties through resale byvarious government agencies shallrequire
prior approval ofthehigher governing agency; where theagency concerned isitself a
first-echelon agency, itsofficer-in-charge shallhavetheauthority toapprove.
Article 5
Where there isconstruction work, procurement ofproducts, ordisposal ofproperties
exceeding certain prescribed amount, theagency concerned shallreport thecasetoitshigher
agency,andalsonotifytheauditingagencytodespatchpersonneltosuperviseovertheinvitation
tobid,comparison ofprices, negotiation, signing ofagreement andtaking delivery inand
out;where thereisnohigher governing agency, theofficer-in-charge oftheagency concerned
maydesignate hissenior stafftosupervise; where thecaseisnotuptocertain prescribed
amount, itshallbehandled byadesignated unitunder thesupervision oftheaccounting unit
inconjunction withother relevant units.
Article 6
Public announcement foropentender shallbemade ifconstruction work, procurement
ofproducts, ordisposal ofproperties byvarious agencies involves certain prescribed amount;
comparison ofquotations shall govern similar cases involving sums exceeding 10percent
oftheprescribed amount; where therearesimilar cases buteachamounting tolessthan10per
centoftheprescribed amount, these cases maybeprocessed bythehandling unitdelegatedGPA/IC/W/9
Page22
withauthority bytheofficer-in-charge oftheagency concerned, onthebasis ofnegotiation
orcomparison ofprices quoted bymore thantwosuppliers supported byproforma invoices.
Article 7
Where agovernment agency encounters oneofthefollowing situations inthehandling
ofconstruction work, procurement ofproducts, ordisposal ofproperties, thecasemaybe
processed bymeans ofcomparison ofquotation; where theprice exceeds theprescribed
amount, thewhole case, together withfactsandreasons relative thereto, shallbefirstreferred
totheaudition agency forconcurrence inadopting theprice-comparison process.
(1) Investigation shows thatthere areonlytwocontractors intheareawhoare
qualified toparticipate intheplanned tender forconstruction work;
(2) Investigation shows thattherearelessthanthreesuppliers inthesame areawho
arequalified toparticipate intheplanned tender forprocurement ofproperties;
(3) There arelessthanthree suppliers whohavesubmitted bidsintwosuccessive
tenders oralthough there arethree bidders, theirbidding prices forconstruction work
orprocurement ofproperties exceed theestimated ceiling prices; orinthecaseof
disposal ofproperties byresale, thebidding prices intwoconsecutive auctions were
notuptothefloor prices anditisdifficult toconduct athird auction;
(4) There areonlytwobidders afterthepublic announcement ofthetender and
theurgency ofthecasedoesnotallow another public announcement fortender, nor
aseparate comparison ofprices;
(5) Specified areaofprocurement asauthorized bytheExecutive Yuan;
(6) Itisanemergency casewhich doesnotpermit processing through opentender
bypublic announcement andwhich facthasbeenreported toandapproved bythehigher
governing agency.
Article 8
Forcases oftender, comparison ofprices, orbynegotiation, eachofwhich involves
amounts exceeding theprescribed sum,theinstructions forthetender orcomparison ofprices,
blueprint specifications, unified tender form, estimated ceiling price orfloorprice (including
theschedules ofessential unitprices orcostanalyses), draftcontract, other related documents,
advertisement orpublic announcement shallbesubmitted totheauditing agency concerned
three days before theopening ofbidsornegotiation ofprices. However, forcases of
procurement, ordisposal ofproperty which consist ofsimple items, onlytheestimate oftotal
price maybesubmitted beforehand andtheestimate ofceiling price maybefurnished forthe
occasion.GPA/IC/W/9
Page23
Article 9
Where theestimate ofceiling price iswithin theprescribed amount butthefinaloutcome
exceeds it,theblueprints, specifications andschedule ofunitprices should besubmitted
retroactivelytotheauditingagencyforexamination.Thelattershouldberequestedtosupervise
thetaking ofdelivery.
Article 10
Theagency which issues open tender shallmake public announcement tothiseffect
onthebulletin board infront ofitsoffice building forfivedaysormore, andadvertise in
local newspapers fortwoormore days. Both thepublic announcement andnewspaper
advertisement shallbesubmitted totheauditing agency forexamination. Theabove ruledoes
notapply toasituation where there isnolocalnewspaper andtheconsent ofexemption from
newspaper advertisement hasbeenobtained from theauditing agency.
Article 11
Inthetenderforconstructionwork,procurementordisposalthroughresaleofproperties,
bidsmaybeopened where there areatleastthree participants. Inthecomparison ofprices,
there should atleastbetwoparticipants having submitted theproforma invoices. Where it
isoccasioned byoneofthefollowing situations, themethod ofnegotiation ofprices maybe
employed bytheagency aftersubmission offactsandreasons forsuchcases involving more
thantheprescribed amount eligible fornegotiation:
(1) Investigation shows thatthereisonlyonefirmintheareaqualified toparticipate
inthetender forconstruction work, ortheprocurement ofproperties;
(2) Investigation shows thatthere isonlyonefirmintheareawhich supplies the
planned procurement, orthere isnosupplier whooffers goods conforming withthe
specifications laiddown intheplanned procurement;
(3) Theobject oftheplanned purchase ororder formanufacture isapatented
product, available onlyfrom oneproducer, intrialrunbythedomestic producer, or
being thepartsoftheoriginal maker, allofwhich cannotbesubstituted byother type
ofproperty;
(4) There isonlyoneparticipant intwoconsecutive comparisons ofprices;
(5) Being apurchase, sale, trade-in ofsupplies, rawmaterials, equipment and
accessories, orrealestate between twogovernment agencies, between agovernment
agency andaforeign government, oraninternational organization;
(6) Public owned realestates which cannotbesoldthrough open tender, butwhich
maybesoldatthepublicly assessed price withtheconsent oftheauditing agency;
(7) Duetobusiness requirement, acquisition ofrealestates byagovernment
enterprise orinstitution inanareaspecified;GPA/IC/W/9
Page24
(8) Annual repair ofvessels;
(9) Although there areanumber ofsuppliers answering theprocurement, noneof
them iscapable ofmeeting thewhole requirement;
(10) MilitaryprocurementforwhichtheMinistryofNationalDefensehasdesignated
aspecial supplier fortheorder, trialrun,orurgent supply relative totheresumption
from suspended operation, orsuspended navigation ofavessel orairplane.
Article 12
Where theprices havebeennegotiated andthecontract hasbeensigned onthebasis
ofcost-plus-profit forconstruction work, orprocurement oflocal products byvarious
government agencies which involves sumabove aspecified amount, theauditing agency may
despatch personnel toexamine thebooks ofthecontracting firmrelative toitsactual costs,
andshallinform thevarious agencies concerned oftheresult oftheexamination.
Where theexamination hasproven thatthecostsareuntrue, thereby resulting inprofits
inexcess oftheoriginal agreement, thecompetent agency shallbeinformed ofthisfactand
thelatter should demand theoriginal contracting firmtorefund thedifferences.
Theabove requirement ofrefund forthedifference should beprovided inthecontract.
Article 13
Intheregistration ofbidders required byvarious government agencies inconnection
withtheholding ofopen tender forconstruction work orprocurement ofproperties, the
registrants shallbeasked topresent forexamination theirbusiness licence, certificate oftax
payment, andevidence ofitsability tomeet therequirement.
Article 14
Eachbidder shallputupcashbidbondwiththebankacting astheagent oftheTreasury;
itshallberefunded totheunsuccessful bidders afteraward.
Article 15
Thetender forconstruction ofprocurement ofproperties shallbe,inprinciple, awarded
inaccordance withtheprocedure andother instructions ofthetender, tothelowest bidder
within theestimated ceiling price. Where theprocurement agency deems itnecessary toaward
thebiddespite thattheprice ofthelowest bidder exceeds theestimated ceiling price bynot
more than10percent, itshall report thecase, together withjustifications, totheauditing
agency foradecision, through thepersonnel despatched bythelatter tosupervise thetender.
Where theprocurement agency determines, intheaward oftheabove-mentioned bid,
thatthelowest bidprice iscertainly notreasonable which maypossibly result insubsequent
supply ofinferior goods, orother undesirable developments, theaward maygotothesecondGPA/IC/W/9
Page25
lowest bidder; where thelowest bidprice exceeds theestimated ceiling price bymore than
10percentbutlessthan20percent, theprocurement agency maydecide theaward withthe
approval ofitshigher governing agency andtheconcurrence oftheauditing agency; where
thelowest bidprice exceeds theestimated ceiling price by20percent, another tender shall
beheld. Their estimated ceiling prices asreferred tointheforegoing twoparagraphs shall
bedecided, prior totheopening ofbids, bytheprocurement agency, inconjunction withthe
supervising personnel oftheauditing agency.
Article 16
Theopening ofbidsandcomparison ofprices inconnection withconstruction work,
procurement ordisposal ofproperties shall bemade inpublic; submission ofbidby
correspondence isallowed. When itisdeemed necessary, bidders maynotbeasked tobe
present fortheawarding announcement.
Article 17
Prior toopening ofbidsorcomparison ofprices, boththeestimated ceiling price and
thebidprices sentinbyvarious bidders must bekeptinstrict confidence. However, inthe
event ofdisposal ofproperties through resale andwiththeconcurrence oftheauditing agency,
theestimated floor prices maybeannounced orpublished beforehand.
Article 18
Inconnection withthesigning ofconstruction orprocurement contracts afterthebid
wasawarded, theawardee shallberequired toputcertain amount ofperformance bond or
toproduce aguarantee issued byareputable firm.
Article 19
Where inconnection withtheopening ofbidsthere hasbeendiscovered thecollusion
ofthebidders inorder togain unlawful profits bycheating, aside from on-the-spot
announcement oftheforfeiture ofbids,thebidders maybeprosecuted bylaw.Ifthefraudulent
caseisfound trueaftertheaward ismade, theabove ruleshallbeapplied mutatis mutandis .
Article 20
Where theprocurement agency wants tomodify specifications orother points, orto
increase ordecrease theprices after signing ofthecontract forconstruction work, or
procurement ofproperties exceeding certain prescribed amount, theauditing agency shallbe
notified toexamine thecase. Where thecaseisofmajor significance because itinvolves an
increase inprice above 10percentoftheoriginal totalprice, ortheincrease exceeds certain
prescribed amount andrequires thefixing ofnewunitprices, theauditing agency concerned
shall benotified sothatpersonnel maybedespatched tosupervise theproceedings ofthe
negotiation andsubsequent agreement.GPA/IC/W/9
Page26
Article 21
Innotifying theauditing agency tosupervise thetaking ofdelivery, thevarious
procurement agencies shallsubmit forexamination theschedule ofconstruction work, orthe
schedule ofpurchase ororder forproperties inaccordance withtheprescribed forms.
Therequirement oftheabove schedule maybeexempted ifthedatacontained therein
havebeenconsolidated inthestatement ofacceptance ofdelivery.
Article 22
Where theofficer whosupervises thetaking ofdelivery deems itnecessary tobreak
upthehidden portion ofthegoods being delivered fortesting, orformaking possible detailed
inspection, hemaydoso;during theperiod ofconstruction, theauditing agency maydespatch
personnel tomake spotcheck.
Article 23
Wheretheresultoftakingdeliveryhasfoundoutthatitdoesnotcomplywiththeoriginal
contractual provision ofthecaseandthatsuchdeparture isofsignificant importance, the
officer-in-charge ofthiscaseshallbeheldresponsible forthenon-conformity; theofficer
supervising thetaking ofdelivery shallbeheldjointly responsible ifheisinvolved incollusion
orcorruption.
Article 24
Persons whohandle theconstruction work orprocurement ofproducts shall notbe
charged withthework oftaking andinspection deliveries, ortesting ofsample materials;
thereceiving personnel shallnotparticipate inthesupervision andinspection ofdeliveries;
persons whohandle resale ofproperties shallnotbecharged withmaking delivery.
Article 25
Upon completion oftaking delivery, theprocurement agency shall prepare apaper
certifying delivery tobesigned bythepersons incharge ofsupervising overandactually taking
suchdelivery, andhaveitsubmitted totheauditing agency forexamination.
Article 26
Intheprocessing ofemergency construction work, orprocurement ofproducts prior
totheestablishment oftherespective budgetary provisions, theagencies concerned shallnotify
theaudition agency todespatch personnel tosupervise. However, supervision bytheauditing
agency shallnotconstitute areason forasking forapproval orsupplementary appropriation.
Article 27
Inmaking award during theauction ofproperties, theagencies concerned shallgive
theaward tothehighest bidder whose prices areabove theestimated floorprices. Where thereGPA/IC/W/9
Page27
isprevailing aspecial situation which tends tokeeplowthehighest bidding prices tobeless
thanthefloor prices by10percentandwhere theauctioning agency deems itnecessary to
award, itmaydecide todosoafterhaving submitted thecasewithjustification tothehigher
governing agency, having obtained approval therefrom, andhaving acquired theconcurrence
oftheaudition agency. Where thehighest bidding price islower thanthefloorprice bymore
than10percent, another auction shallbeheld.
Article 28
Where procurement ismade byanagency stationed abroad onbehalf ofadomestic
agency, theprocedure setforth bythisStatute maybewaived. Indoing so,however, the
procurement agency shallsubmit theschedule ofprices ortheschedule ofaward ofbidsand
copy ofcontract totheauditing agency forexamination.
Article 29
Where theprocurement ofmilitary supplies orconstruction ofmilitary work isofa
highly confidential nature, themilitary agency concerned mayproceed inthemanner desired
provided thatithasbeenapproved bytheExecutive Yuan, butshall, expost,gather thefacts
andreasons, together withallrelevant documents, andhavethem submitted totheauditing
agency forexamination andrecord. Where itisofmilitary urgency, orforthesakeofensuring
thetimely usage ofthemilitary supplies, themilitary agency concerned mayproceed with
theprocurement withtheapproval oftheMinistry ofNational Defense, butshall, expost,
gather thefactsandreasons, together withallrelevant documents, andhavethem submitted
totheauditing agency forexamination andrecord.
Article 30
Where theagency concerned purchases materials andhiresworkers tocarry outcertain
construction work, andwhere thetotalcostofmaterials andlabour exceeds certain prescribed
amount, priorapproval bythehigher governing agency andconcurrence bytheauditing agency
shallberequired. After completion, areport about thework done, together withthebudget,
blueprint, schedule ofmaterial andlabour andother relevant documents, shallbesubmitted
totheauditing agency forexamination andrecord.
Wheretheabove-mentionedprocurementofmaterialsexceedscertainprescribedamount,
itshallbeprocessed inaccordance withtheprovisions ofthisStatute.
Article 31
Where theinspection andtesting required byvarious agencies inconnection withthe
procurement ofproducts areofatechnological nature, thecaseshallbereported bytheagency
concerned, through theproper channel, totheExecutive Yuan foradecision.
Article 32
Whereagovernmentagencycarriesouttheconstructionworkorprocurementofproducts
notinaccordance withtheprocedure provided bythisStatute andwhere theauditing agencyGPA/IC/W/9
Page28
does notattend tothematter without giving areason after having been soinformed, the
officers-in-change ofthese agencies shallbeliable toadministrative penalties.
Article 33
Where anagency splits uptheconstruction work, procurement ofproducts, ordisposal
ofproperties intoseveral batches orlotsinorder toevade theinspection procedure setforth
bythisStatute, theofficer-in-charge shallbeliable toadministrative penalties; where theabove
actionhascausedlosstogovernmentfunds,heshallbeheldresponsibleforindemnitypayment.
Article 34
Where agovernment enterprise needs regularly topurchase rawmaterials andsupplies,
andtosellfinished goods, itmaybeexempted from theapplication ofthisStatute withthe
approval ofitshigher governing agency andtheconcurrence oftheauditing agency.
Article 35
Where thenation encounters major natural disaster orsignificant economic setback,
andwhere certain emergency procurement orconstruction work hastobecarried out,the
procedure governing opentender, comparison ofprices ornegotiation provided bythisStatute
maybewaived provided thatithasbeenapproved bytheExecutive Yuan.
Article 36
Theprescribed amount asmentioned inthisStatute shallbedecided bytheauditing
agency.
Article 37
ThisStatute shallbecome effective from thedateofpromulgation.GPA/IC/W/9
Page29
GUIDELINES FOR PROCUREMENT OFTECHNICAL SERVICES
FROM TECHNICAL CONSULTING ORGANIZATIONS
BYGOVERNMENT ENTITIES
Article 1
Government entities shall, when procuring technical services fromdomestic orforeign
technical consulting organizations, handle suchprocuring matters inaccordance withthese
Guidelines, except otherwise required byother lawsandregulations.
Article 2
Thedomestic technical consulting organizations referred tointheGuidelines shallbe
either those technical consulting organizations ofwhich establishment hasbeenpromoted by
government authority, organization isintheform ofjuridical association, business function
isnotaimed atcommercial interest, andbusiness operation issupervised bythegovernment
authority concerned; orother technical consulting organizations which aresupervised bythe
Ministry ofEconomic Affairs andhavepassed evaluation bytheprocuring entity.
Government entities mayalsoprocure technical services fromaqualified technician 's
office inaccordance withtheGuidelines, provided thattheoffice haspassed evaluation by
theprocuring entity.
Article 3
Government entities shall procure technical services from technical consulting
organizations within thebudget appropriated andtheauthority delegated. Theprocuring entity
shallreport thecaseandtherelevant reasons thereto toahigher authority foraprior approval
ifthecaseisbeyond theprocuring entity 'sownauthority.
Article 4
Government entities mayprocure thefollowing technical services from technical
consulting organizations:
1. Project Planning
(a) Planning ofaconstruction project
(b) Evaluation ofaconstruction project
(c) Initial fieldsurvey
(d) Geodetic survey, geology survey, soilsurvey andtest,hydrology and
weather survey, material survey andtest,model test,andother survey
andtestGPA/IC/W/9
Page30
(e) Dataanalysis
(f) Case study andinitial planning
(g) Costestimation andeconomic analysis
(h) Financial analysis andrecommendation
(i) Feasibility report andrecommendation
2. Construction Design
(a) Basic design
(b) Detailed design
(c) Drafting ofconstruction specification
(d) Quantitative estimation ofconstruction work
(e) Selection ofmachinery equipment anddrafting ofitsspecifications
(f) Drafting ofconstruction planandconstruction schedule
(g) Analysis andestimation ofconstruction cost
(h) Drafting offinancial plan
(i) Drafting ofbudget andtender documentation ofconstruction work
(j) Drafting ofinstruction manuals forthemaintenance andoperation of
machinery equipment.
3. Surveillance andInstruction ofConstruction Work
(a) Evaluation ofthequalification ofprospective construction contractor
orequipment manufacturer
(b) Assistance onperforming theopening andevaluation oftenders, and
recommendation ofcontract-awarding
(c) Assistance onpreparing contract documents forsigning with a
construction contractor oranequipment supplier
(d) Review ofcontractor 'swork plan, construction equipment, andwork
scheduleGPA/IC/W/9
Page31
(e) Geodetic survey ofconstruction work, andexamination ofthe
contractor 'slay-out arrangement andsurvey result
(f) Inspection andrecording ofthequality ofconstruction work, andtest
ofmaterials, allinaccordance withapproved design drawings and
specifications. Orchange ofdesign drawings andspecifications ifthe
design engineer soagrees
(g) Consulting service forconstruction work
(h) Review, certifying, andrecommendation ofwork progress
(i) Inspection, certifying, andreport ofthework completed.
4. Supervision ofConstruction Work
Provision ofresiding engineers atjob-site forthesupervision ofconstruction
work.
5. Other Services
(a) Research,evaluationandsupplementworkinrelationtospecialtechnical
dataandreport
(b) Approval ofdrawing, supervision ofmanufacture, inspection, and
supervision ofinstallation inrelation tospecial equipment
(c) Training ofconstruction andoperation personnel
(d) Loan application andequipment acquisition
(e) Enhancement ofbusiness, production andoperation techniques
(f) Other special technical services.
Thetechnical consulting organizations tobequalified forproviding technical services shall
haveemployedfull-timeexpertsspecializingintheservicesrequired,whichshallbeamandatory
criterium ofsourcing.
Article 5
Government entities shallgivepriority todomestic technical consulting organizations
before considering foreign oneswhen procuring technical services.
Article 6
Government entities mayprocure technical services fromdomestic technical consulting
organizations inanyofthefollowing events:GPA/IC/W/9
Page32
1. Theconstruction project orequipment project concerned isaplanned ora
complex onewhere theprocuring entity itself isnotabletohandle duetolack
oftechnology, timeormanpower.
2. Thedomestic technical consulting organization concerned isdesignated bya
foreign company which possess thepatents orengineering secret required.
3. Agreement withaforeign technical consulting organization thatacertain part
oftheservicecontractshallbesubcontractedwithadomestictechnicalconsulting
organization.
4. Anyother technical reasons which make contracting-out necessary.
Article 7
Government entities mayprocure technical services from foreign technical consulting
organizations inanyofthefollowing events:
1. Domestic industries donothavethetechnology orexperience required forthe
provision ofaconstruction work oranequipment, andforeign experts are
therefore needed forplanning anddesigning purposes.
2. Lack oftechnology orexperience bydomestic companies.
3. Requirement ofemploying foreign technical consultants duetoforeign loan
agreement.
4. Requirement offoreign equipment andforeign designer duetopatent rights.
5. Anyother special reasons which make itnecessary toemploy aforeign technical
consultant.
Article 8
ExceptotherwiserequiredintheGuidelines,thetechnicalservicefeemaybedetermined
byoneofthefollowing methods:
1. Cost-plus-fee pricing
2. Rate-to-construction-expense pricing
3. Per-day pricing
4. Lump-sum pricing orper-unit pricing.
Thesaidservice feesshallbenegotiated inconsideration oftheprevailing pricing standards
inthebusiness market, butnotexceeding theamount determined bytheprocuring entity or
itshigher authority. Analysis ofthenegotiated amount shallbeincluded inthecontract forGPA/IC/W/9
Page33
checking. Anyallowance forextra payment, ifrequired, shallbespecified inthecontract
withcoverage, feeandlimit clearly indicated. Anyother payment beyond thecontract
agreement isprohibited.
Article 9
Thecost-plus-fee pricing shallbeapplicable tocomplex projects where service fees
cannot beeasily estimated.
Thecostitems ofsuchpricing method mayinclude thefollowing:
1. Direct Expense
(a) Direct salary: including salaries forthepersonnel directly involved in
theservice work, plusanadditional 20percentofthesalaries tocover
leaves andinsurance premium. Thesaidpersonnel may include
engineers, planners, experts inthefields ofeconomy, finance,
management, business, etc.
(b) Other direct expenses: including allthedirect expenses other thandirect
salary, suchastravel expense, allowance forjob-site residents, data
collection fee,consulting feeandtravel expense foroutside experts,
patent fee,training expense forconstruction andoperation personnel,
rentandprogramme feeforcomputers, survey expense, inspection fee,
testfee,printing expense fordrawings andreports, andthetaxesrelated
tothedirect expenses.
2. Administration Expense
Including those expenses notcovered bythedirect expense, suchasthesalary
andinsurance premium oftheadministration andaccounting personnel, office expense,
utilities fee,depreciation orrentofequipment andfurniture, office supplies expense,
equipmentrelocationexpense,postage,telephonebill,advertisingexpense,socialwelfare
donation, andthetaxes related thereto. However, thetotaladministration expense
shallnotexceed thetotaldirect salary determined intheabove sub-item 1(a).
Thefeeofthecost-plus-fee pricing istheprofit segment ofproviding atechnical
service,whichmayincludebusinesspromotionexpense,productivitypromotionexpense,
workpreparation andclosing expenses, research expense, professional contact expense,
domestic andforeign seminars participation expenses, andtaxes related thereto.
However, thetotal feeshall notexceed 40percentofthesumofdirect salary
(sub-item 1(a)) andadministration expense (sub-item 2).
Thetotalestimated contract amount tobenegotiated byaprocuring entity and
atechnical consulting organization shallbethesumoftheaforesaid costandfee.GPA/IC/W/9
Page34
Article 10
Therate-to-construction-expense pricing method shallbeapplicable tonon-complex
projects ofwhich theservice feesshallbedetermined bytheservice coverage andthefollowing
percentage limits:
Construction Expense FeesofConstruction
Design andSurveillance
andInstruction of
Construction Work, in
percentage tothe
Construction ExpenseFeesofSupervision of
Construction Work, in
percentage tothe
Construction Expense
LessthanNT$10 million 5.1% 4.0%
NT$10 million tolessthan
NT$50 million4.5% 3.5%
NT$50 million tolessthan
NT$100 million3.9% 3.0%
NT$100 million toless
thanNT$500 million3.3% 2.5%
NT$500 million ormore 2.9% 2.2%
Note: Service items 4.1(b) and4.1(c) areincluded intheabove coverage.
Theaforementioned construction expense means theconstruction costrequired for
completionofaconstructionwork,includingwages,materialcost,depreciationandmaintenance
expense ofconstruction equipment, etc.,butexcluding planning expense, design expense,
administration expense, financial expense, landexpense, royalty, andlegal expense.
Ifthetechnical service covers onlyconstruction design anddoes notinclude the
surveillance,instructionandsupervisionoftheconstructionwork,thesaidconstructionexpense
maybecalculated basing ontheconstruction budget determined bytheprocuring entity.
Service feesofthefollowing maybeadded separately totheabove limits:
1. Change ofanalready approved design
2. Initial field survey, geodetic survey, geology survey, soilsurvey andtest,
hydrology andweather survey, material survey andtest,model test,andother
survey, experiment andresearchGPA/IC/W/9
Page35
3. Extra surveillance, instruction, andconstruction supervision inrelation toa
delayed project performing byother contractors
4. Service feesinrelation tore-tendering
5. Service feesinrelation tolegal procedures
6. Printing expenses forextra copies ofdesign report anddrawing.
Alltheaboveadditionalfeesshallbedeterminedaccordingtothecost-plus-feemethodspecified
inArticle 9.
Article 11
Theper-day pricing method shallbeapplicable tocases ofsmall-scale services where
onlyafewtechnical experts andashort period ofservice timearerequired. Theper-day
pricing mayuseonefifteenth oftherelevant person 'smonthly salary asthebaseprice, and
thenaddadministration expense andfeecalculated inaccordance withArticle 9toconclude
adailyservice fee.Direct expenses other thansalaries, suchastravel expenses, maybepaid
inaddition tothesaiddaily fee.
Article 12
Thelump-sum pricing orper-unit pricing method shallbeapplicable tocases where
service coverage issimple anddefinite, andthetotalservice feecanbecorrectly estimated
orcanbecalculated byitemized unitprice ofeachservice. Thesaidtotalservice feeorunit
price maybedetermined inaccordance withthecost-plus-fee method specified inArticle 9.
Article 13
Intheevent thatatechnical consulting organization isinvited totakeoverapartially
completed technical service, theservice feefortheuncompleted portion maybedetermined
inanymethod specified inArticle 8plusthefeerelating toreviewing ofthepartially completed
portion.
Article 14
Servicefeesforspecialconsultingservicesorhi-techtechnicalservicesmaybenegotiated
onacase-by-case basis.
Article 15
Intheevent thatthetimeschedule forcompletion ofatechnical service isrequired
tobeshortened, theservice feesconcerned maybeincreased bynegotiation onacase-by-case
basis.GPA/IC/W/9
Page36
Article 16
Service feesmaybepaidpartially bydown-payment aftercontract-signing, andthe
restmaybepaidmonthly orperiodically.
Article 17
When thetechnical service contract value equals orexceeds NT$10 million basing on
thecalculation methods specified intheGuidelines, theprocuring entity shallreport thecase
toahighauthority forapproval. Fortime-saving purposes, thehighauthority maydelegate
authority totheprocuring entity sothatthelatter maymake decision byitself onperforming
special orimportant construction projects orcases where theprocuring entity procures the
service onbehalf ofanother entity. However, thecontract-awarding forconstruction work
andequipmentshallproceedinaccordancewiththeOrdinanceConcerningInspectionProcedure
Governing Construction Work, Procurement andDisposal ofProperties byGovernment
Agencies.
Intheevent thatchange ofdesign isrequired foracontract forwhich theauthority
hasnotbeendelegated totheprocuring entity, theentity shall report toahigher authority
concerning thereasons ofchange andtheparty which should beresponsible for,andobtain
aprior approval from thehigher authority before execution ofthechange.
Article 18
Theprocuring entity maynegotiate aservice contract withasupplier byusing single
tenderingprocedureswhen,forreasonsconnectedwithpatentsorspecialtechniques,theservices
canbeprovided onlybyaparticular supplier; fortechnical reasons connected withthemain
equipment tobeprocured; orforother reasons approved byahigher authority. Except the
above, theprocuring entity shallinvite atleasttwotechnical service consulting organizations
forevaluation, andselect oneofthem tonegotiate acontract orselect twoormore ofthem
totender. Ifthecontract value equals orexceeds thethreshold specified inArticle 17,the
procuring entity shall invite itshigher authority tosendofficers tosupervise thetendering
procedures.
Intheevent ofinviting consulting organizations forevaluation, theprocuring entity
shallspecify service coverage andrelevant terms andconditions intheinvitation, andinform
experiencedandrenownedconsultingorganizations,domesticorforeign,tosubmittheirservice
proposals. Theproposals shall beevaluated andcompared fairly. Themain criteria of
evaluation shall bethecontent ofproposal, thegoodwill andexperience ofthetechnical
consultingorganization,theeducationbackgroundandworkingexperienceofitsprojectmanager
andother main personnel involved. Forcases related toimportant projects orspecial
technology, theprocuring entity mayrequest theAdvisory Group ofScience andTechnology
oftheExecutive Yuan toorganize anevaluation team toperform theevaluation.GPA/IC/W/9
Page37
Article 19
Domestic technical consulting organizations maybeselected toparticipate inaservice
work contracted withaforeign technical consulting organization. Insuchcase, thecontract
shallspecify inwhat manner thedomestic consulting organizations shallparticipate.
Procuringentitiesmaypermitdomestictechnicalconsultingorganizationstohireforeign
technical consulting organizations toparticipate inaservice work contracted withadomestic
technical consulting organization.
Article 20
Theterms andconditions tobeagreed withaforeign technical consulting organization
shall consider notonlythegeneral practices applicable toservice contracts, butalsothe
following:
1. Thegoverning language ofthecontract shallbeChinese language. Atranslation
copy inforeign language maybeattached therewith.
2. Thegoverning lawofthecontract shallbethelawsoftheRepublic ofChina,
except otherwise negotiated under special circumstances.
3. Themeans ofarbitration andthecourt ofjurisdiction fordispute settlement
shallbespecified.
4. Thetaxes tobepaidshallbespecified, andthetaxpayer shallbetheparty who
isobligated topaythem according tothelawsoftheRepublic ofChina.
5. Theresponsibilities tobeborne andthegood service quality tobeguaranteed
bythecontractor shallbespecified.
6. Theinsurance premium forthepersons andequipment tobeinsured shallbe
specified, andtheamount orpercentage ofthepremium tobeborne byeach
party shallbeindicated.
7. Intheevent thatpayment shallbemade inacertain timeschedule, thework
progress tobecompleted bytheschedule shallbespecified.
8. Iftheservice coverage includes training oftheprocuring entity 'soperation or
maintenancepersonnel,exceptthosefeesrequiredbytheconsultingorganization,
other feessuchastravel andliving expenses ofthetrainees shallnotbeincluded.
These expenses shall bepaidbytheprocuring entity tothetrainees directly.
9. Thecontractshallspecifythatproprietaryrightsoftheprojectplananddrawings
developed bythetechnical consulting organization shallbelong totheprocuring
entity, except patent rights orunder special circumstances.GPA/IC/W/9
Page38
10. There shall benocontract clauses thatallow thetechnical consulting
organization totransfer itswork toathird party. Intheevent that
subcontracting isrequired, thecontractor shallobtain aprior approval from
theprocuring entity, andtherelevant feesshall beadjusted accordingly. A
service where domestic technical consulting organizations areabletosupply
shallnotbeincluded intheservice coverage tobeprovided byforeign technical
consulting organizations, except those items which foreign onesaretechnically
required andhavebeenexplicitly specified inthecontract.
Before contract-awarding, thecontract documents shall bereviewed bypersonnel whoare
familiar withthelaws.
Article 21
Inconsideration ofthespecific features ofaservice contract andtheimportance of
timely completion oftheservice, theprocuring entity mayrequire liquidated damages fordelay
performance andinclude damages clauses inthecontract. Thecoverage andrateofthe
liquidated damages maybenegotiated bytheprocuring entity andtheconsulting organization.
Article 22
Procuring entities shallinsert inservice contracts damages clauses which require the
technical consulting organization tocompensate damages suffered bytheprocuring entity due
toerrors orfaults oftheconsulting organization.
Article 23
Duringserviceperiod,thetechnicalconsultingorganizationshallsubmitmonthlyreports
concerning work progress, dailywork force anddailywork hours inamonth totheprocuring
entity forchecking.
Article 24
Domestic technical consulting organizations shallhireacertified public accountant to
audittheiraccountsyearly,andtheauditreportshallbesubmittedtothesupervisinggovernment
authority specified inArticle 2forreview.
(Effective on4December 1993)