Government Procurement Law of the People's Republic of China (Amended in 2014)

Government Procurement Law of the People's Republic of China (Amended in 2014)
Government Procurement Law of the People's Republic of China (Amended in 2014)

Order of the President of the People's Republic of China No. 14

August 31, 2014,

(Adopted at the 28th Meeting of the Standing Committee of the Ninth National People's Congress on June 29, 2002, and amended according to the Decision of the Standing Committee of the National People's Congress on Amending the Insurance Law of the People's Republic of China and Four Other Laws at the 10th Meeting of the 12th Standing Committee of the National People's Congress on August 31, 2014)

Table of Contents
Chapter I General Provisions
Chapter II Parties to Government Procurement
Chapter III Methods of Government Procurement
Chapter IV Government Procurement Proceedings
Chapter V Government Procurement Contract
Chapter VI Query and Complaint
Chapter VII Supervision and Inspection
Chapter VIII Legal Liabilities
Chapter IX Supplementary Provisions

Chapter I General Provisions

Article 1 This Law is enacted for purposes of regulating government procurement activities, improving efficiency in the use of government procurement funds, safeguarding the interests of the State and the public, protecting the legitimate rights and interests of the parties to government procurements and promoting honest and clean government.

Article 2 This Law is applicable to government procurement activities conducted within the territory of the People's Republic of China.
For purposes of this Law, "Government Procurement" refers to the purchasing activities conducted with fiscal funds by government departments, institutions and public organizations at all levels, where the goods, construction and services concerned are in the centralized procurement catalogue complied in accordance with law or the value of the goods, construction or services exceeds the respective prescribed procurement thresholds.
The centralized procurement catalogue and the prescribed procurement thresholds mentioned above shall be complied within the limits of powers defined by this Law.
For purposes of this Law, "Procurement" refers to activities conducted by means of contract for the acquirement of goods, construction or services for consideration, including but not limited to purchase, lease, entrustment and employment.
For purposes of this Law, "Goods" refer to objects of every kind and form, including but not limited to raw and processed materials, fuel, equipment and products.
For purposes of this Law, "Construction" refers to all construction projects, including construction, reconstruction, expansion, fitting up, demolition and repair and renovation of a building or structure.
For purposes of this Law, "Services" refer to any object of government procurement other than goods and construction.
(Relevant articles: Legislation 1)

Article 3 The principles of openness and transparency, fair competition, impartiality and good faith shall be adhered to in government procurement activities.

Article 4 Where public invitation or invited bidding is adopted for government procurement of construction, the Law on Bid Invitation and Bidding shall apply.

Article 5 No entity or individual may, by any means, deny or restrict free access by outside suppliers to the local markets or the market of the same industry for government procurement.

Article 6 Government procurement shall be conducted strictly in accordance with the budget approved.

Article 7 Government procurement shall be conducted by both centralized and decentralized procurement. The items of centralized procurement shall be determined in accordance with the centralized procurement catalogue published by people's governments at or above the provincial level.
The centralized procurement catalogue for government procurement items that come under the central budget shall be determined and published by the State Council; the centralized procurement catalogue for government procurement items that come under the local budgets shall be determined and published by the people's governments of provinces, autonomous regions or municipalities directly under the Central Government or the departments authorized by them.
Centralized procurement shall be made for government procurement items that are included in the centralized procurement catalogue.

Article 8 The thresholds for government procurement items that come under the central budget shall be prescribed and published by the State Council; the thresholds for items that come under local budgets shall be prescribed and published by the people's governments of provinces, autonomous regions or municipalities directly under the Central Government or the department authorized by them.

Article 9 Government procurement shall be conducted in such a manner as to facilitate achievement of the goals designed by State policies for economic and social development, including but not limited to environmental protection, assistance to underdeveloped or ethnic minority areas, and promotion of the growth of small and medium-sized enterprises.

Article 10 The government shall procure domestic goods, construction and services, except in one of the following situations:
1.where the goods, construction or services needed are not available within the territory of the People's Republic of China or, though available, cannot be acquired on reasonable commercial terms;
2.where the items to be procured are for use abroad; and
3.where otherwise provided for by other laws and administrative regulations.
The definitions for the domestic goods, construction or services mentioned in the preceding paragraph shall be applied in accordance with the relevant regulations of the State Council.

Article 11 Information, with the exception of information related to business secrets, regarding government procurements shall be announced to the public in a timely manner through the media designated by the department for supervision over government procurement.

Article 12 Where in government procurement the procuring person or the person concerned has an interest in the suppliers, he shall withdraw from the procurement proceeding. Where a supplier believes that the person doing the procuring or the person concerned has an interest in other suppliers, it may apply for withdrawal of the said person.
The person concerned as mentioned in the preceding paragraph means any of the members of the bid evaluation committee for procurement through public invitation, of the negotiation team for procurement through competitive negotiations, or the inquiry team for procurement through inquiry of quotations.

Article 13 The finance departments of the governments at all levels are departments for supervision over government procurement, performing the duty of supervision over government procurement activities in accordance with law.
The departments concerned in the government at all levels shall, in accordance with law, perform the duty of supervision over activities related to government procurement.

Chapter II Parties to Government Procurement

Article 14 The parties to government procurement refer to the principal entities of all kinds that enjoy rights and undertake obligations in government procurement, including the procuring entities, the suppliers and the procuring agencies.

Article 15 The procuring entities refer to the government departments, institutions and public organizations that engage in government procurement in accordance with law.

Article 16 The institutions for centralized procurement are the procuring agencies. People's governments at the level of cities divided into districts and of autonomous prefectures or above that make arrangements for centralized procurement on the basis of the items to be procured by the governments, are required to set up institutions for centralized procurement.
The institutions for centralized procurement are non-profit legal persons that conduct procurement as entrusted by the procuring entities.

Article 17 When conducting government procurement activities, institutions for centralized procurement shall meet the requirements for procurement at a lower-than-average market price, at higher efficiency, and of quality goods and services.

Article 18 When procuring items for the government that are included in the centralized procurement catalogue, the procuring entities shall entrust the matter to institutions for centralized procurement; they may do it themselves where the items to be procured are not included in the said catalogue, or they may entrust the matter to institutions for centralized procurement that shall do it on their behalf within the scope entrusted.
Items, included in the centralized procurement catalogue that are for general use by the governments, shall be procured by entrusting the matter to an institution for centralized procurement; items for the special need of a department or set-up shall be procured by the department or set-up in a centralized manner; items for the special need of an individual entity may be procured by the entity itself upon approval by the people's government at or above the provincial level.

Article 19 Procuring entities may entrust procuring agencies other than centralized procurement agencies to handle the matters of government procurement within the scope entrusted.
Procuring entities shall have the right to choose procuring agencies on their own, no unit or individual may, by any means, designate procuring agencies for them.

Article 20 Where a procuring entity, in accordance with law, entrusts a procuring agency with the procurement, the two sides shall conclude an agreement to such an effect, in which the entrusted matters shall be defined and the rights and obligations for both sides shall be specified in accordance with law.
(Relevant articles: Legislation 1)

Article 21 The suppliers refer to the legal persons, other organizations or natural persons that provide goods, construction or services to the procuring entities.

Article 22 A supplier in government procurement shall meet the following requirements:
1.having the capacity to assume civil liabilities independently;
2.having a good business reputation and sound financial and accounting systems;
3.having the equipment and professional expertise needed for performing contracts;
4.having a clean record of paying taxes and making financial contributions to social security funds in accordance with law;
5.having committed no major breaches of law in its business operation in the three years prior to its participation in the procurement; and
6.other requirements provided for in laws and administrative regulations.
A procuring entity may specify special requirements for suppliers on the basis of the special need of a particular item for procurement, provided that they are not unreasonable requirements that result in differential or discriminatory treatment of suppliers.
(Relevant articles: Legislation 3 Legal news 2)

Article 23 The procuring entity may require the suppliers participating in government procurement to provide the documents certifying their qualifications and information about their business performance and examine the qualifications of the suppliers against the requirements provided for in this Law and the special requirements necessitated by the items to be procured.

Article 24 Two or more natural persons, legal persons or other organizations may form a consortium to participate in government procurement in the capacity of a single supplier.
Where the form of consortium is taken in government procurement, each of the suppliers in the consortium shall meet the requirements specified in Article 22 of this law and, in addition, a consortium agreement shall be submitted to the procuring entity, in which the assignments allotted to and the obligations undertaken by each party to the consortium are clearly stated.
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