2. Preventing a supplier from entering the government procurement market by shortlisting a pool of candidate suppliers, a directory of suppliers, and a database of qualifications, with the exception of contractual and designated suppliers of small-sum and sporadic goods or services as well as the circumstances prescribed otherwise by the Ministry of Finance;

3. Setting an explicit or implicit barriers for supplier to enter the procurement process by requiring a supplier to make unnecessary registration or establish subsidiaries  before participating in government procurement activities.

4. Setting an explicit or implicit threshold such as the business scale and years of establishment of a supplier to restrict supplier's participation in government procurement;
  

5. Requiring a supplier to purchase designated software as a necessary condition for participating in electronic government procurement activities;
6. Failing to release or provide the information of a procurement item according to laws and in a timely, effective and complete manner to prevent a supplier from participating in government procurement activities;
7. Setting  mandatory requirement for a procuring entity to select a procuring agency in a random way (such as lucky draw, lottery ticket) or through simple comparisons to interfere in the procuring entity's selection of a procuring agency;

8. Setting up approval, filing, supervision, punishment, or charging requirements without a legal or regulatory basis;

9. Requiring the procuring entity to determine the winning supplier in a random way, except for the circumstances as prescribed in Article 68 of Measures for the Administration of Bid Invitation and Tendering for Government Procurement of Goods and Services; 

10. Other practices in violation of the relevant laws and regulations that impede fair competition.

All regions and departments should clean up existing provisions and practices that hinder fair competition in government procurement, and the results of such efforts should be made public in a timely manner and reported to the Ministry of Finance by October 31, 2019.

II. Rigorously implementing the fair competition review system

When formulating measures for market players in government procurement, all regions and departments should strictly enforce the fair competition review system, fully listen to the views of market players and relevant industrial associations or business groups, evaluate the impact on market competition, and prevent any problematic practices that may eliminate or restrict competition. The review on the measures will mainly look at if there are any unreasonable and discriminatory entry requirements set to exclude potential suppliers, or any administrative approvals or filings with no legal or regulatory basis, or any preferential treatment to certain supplier in violation of laws and regulations. The measures can be promulgated and implemented if they are found not to have the effect of excluding or restricting competition. Upon review, if they are found to have the effect of excluding or restricting competition, they should not be promulgated unless sufficient adjustments are made so that they finally comply with the relevant requirements. No measure shall be introduced without undergoing the fair competition review.

In the process of implementing government procurement measures, their impact on the national unified market and fair competition  should be assessed on a regular or timely basis and any provisions of the measures that could impede the national unified market and fair competition should be revised, improved or repealed in a timely manner.

III. Strengthening management of government procurement

The procedures for procurement affairs should be optimized. If the legal representative of the supplier has issued a Letter of Authorization, there shall be no requirement for the representative to turn up in person in receiving or purchasing the procurement documents, bidding, or negotiation. The procuring entity or the procuring agency shall not require the supplier to provide information when such information can be inquired through the Internet or relevant information system. Except for the necessary original copy for verification purpose, the supplier shall not be required to provide the print version of materials provided online at the same time. When providing all kinds of letters of declaration and commitment in accordance with the regulations, the supplier shall no longer need to offer credentials issued by the relevant departments.

Specific requirements for procurement activities should be set out. Where the procuring entity allows the use of subcontracting for the performance of the contract, the procurement document should specify the content, amount or proportion of the subcontracted part. The procuring entity and the procuring agency should make simple, specific requirements over the format and form regarding the bidding (response) documents, and non-essential matters such as document binding, sequencing and other format or form issues should not restrict and affect the supplier’s bidding (response). In case of procurement by electronic means, the procuring entity and the procuring agency should provide electronic procurement documents to suppliers free of charge. For procurement not by electronic means, the procuring entity and the procuring agency are encouraged to provide printed procurement documents to suppliers free of charge.

Regulating payment and refunding of bid bonds. The procuring entity and the procuring agency should allow the suppliers to make payment of bid bonds by choosing in non-cash transactions such as cheques, drafts, promissory notes and guarantees. The deadline for receiving the bid bond in account or guarantees, determined by the procuring entity and the procuring agency, should be consistent with the deadline for submitting the bidding documents (response), and the bind bond should be refunded to the suppliers in accordance with provisions. When the contract performance bond is required, the method, time and conditions to refund the bond as well as the non-refund conditions should be stipulated in the procurement contract, with the liability for overdue refunding specified. The procuring entity and the procuring agency should not collect contract performance bonds without a legal or regulatory basis

Payment of procurement funds should be timely. The government procurement contract shall prescribe the method, time and conditions for payment of the procurement funds, and clarify the liability for overdue payment. When the payment conditions of the contract are ready, the procuring entity should pay the funds to the account of the supplier as prescribed in contract within 30 days after receiving the invoice. No delayed payment should be allowed on the grounds of organizational changes, staff turnover, policy adjustments or other reasons. No obligation except those stipulated in the procurement document and contract should become a condition for making payment to suppliers.

The remedy and compensation mechanism for damaged interests of suppliers should be improved. The procuring entity and the supplier should clearly stipulate in the government procurement contract the liability of both parties for breach of contract. If a contract is changed, suspended or terminated due to the procuring entity, the procuring entity should, in accordance with the contract, provide a remedy or compensation for damaged interests of the supplier.  

IV. Promoting electronic government procurement

Efforts will be made to further improve electronic trading platforms for government procurement and realize functions of online publication of procurement announcement notices, provision of procurement documents, submission of bidding (response) documents, and bid opening and review in electronic manners. Efforts will be made to gradually connect the electronic trading platforms for government procurement with information systems for fiscal affairs and internal management of the procuring entity, and improve and optimize online operations of contract signing, performance acceptance, credit evaluation, user feedback, submission of invoices, and payment of funds.

The “Internet + government procurement” drive should be accelerated. Efforts will be made to actively promote the development of electronic trading platforms and e-commerce stores for government procurement, establish and improve unified technical standards and data specifications, gradually realize the nationwide interconnection, promote data sharing with public resources trading platforms, and facilitate supplier's participation in government procurement activities.

V. Further improving transparency in government procurement

Efforts will be made to improve the service functions of government procurement information dissemination platforms. The official website for information of Chinese government procurement as well as regional information platforms need to allow convenient and free online searches, and provide all government procurement information to be made public in accordance with laws and free of charge to market players. Efforts will be taken to make bid opening public and allow people other than bidders and their representatives to also observe the process, provided that the bid opening is done in an orderly manner.

Efforts will be made to promote the public disclosure of government procurement intentions including the procurement project, content, demand overview, budget and estimated procurement time. In order to facilitate suppliers to understand procurement information in advance, all regions and departments should create conditions to actively promote the disclosure of procurement intentions (except for confidential information). Starting from 2020, some central government departments and regions will be selected to carry out pilot programs of public disclosure of government procurement intentions. Based on the pilot programs, budget entities at all levels will gradually implement public disclosure of procurement intentions.

VI. Improving the mechanism for challenges, complaints and administrative adjudication

Ensuring smooth access to make challenges and complaints for suppliers. Efforts will be made to establish a fast-track adjudication channel consistent with the “Internet + government procurement” drive, and to provide a unified, standard, efficient and convenient channel to safeguard their rights. For challenges and complaints raised by a supplier, the procuring entity or the procuring agency and finance departments at all levels should offer timely replies and solutions in accordance with the law. Efforts will be made to improve the internal control of the challenge response. The qualified procuring entity and institutions that adopt centralized procurement should separate the post for the challenge response from the post of operation and execution, and the complaint handling mechanism will also be further improved.

Implementing administrative penalties in accordance with the laws and regulations. Finance departments at all levels shall implement administrative penalties in public procurement in accordance with the law, protect the rights of those concerned to be informed, to make statements, to defend themselves, and to request a hearing, and ensure the procedures are legal. On the principle of combining punishment and education, efforts will be made to correctly apply lesser punishment, a mitigated punishment or exemption from punishment to different cases, and the administrative penalties should be commensurate with the facts, nature and circumstances of the violation and the degree of harm done to society.

All regions and departments should fully understand the importance of maintaining a fair and competitive market order and optimizing the business environment of government procurement, strengthen organization and leadership, clarify work responsibilities, make careful arrangements, improve supervision and inspection, and ensure that all requirements are put in place.

This notice is effective from September 1, 2019.