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Jiao Gong Lu Gui [2020] No. 4

Departments (bureaus and commissions) of transport of all provinces, autonomous regions, municipalities and Xinjiang Production and Construction Corp.:

For the purposes of fully implementing the decisions and arrangements of CPC Central Committee and the State Council, advancing the implementation of policies and measures in the tendering and bidding activities for highway maintenance and creating a market environment for fair competition in highway maintenance, the related matters are hereby notified as follows:

I. Attaching high importance to optimizing business environment

Optimizing the business environment is currently an important measure for China to comprehensively deepen reform, build a new open economic system, and promote high-quality economic development. The highway industry is one of China's earliest industries with full opening of the market and implementation of the tendering and bidding system. In 2003, the then Ministry of Communications promulgated and implemented the Interim Provisions on the Administration of the Tendering and Bidding for the Construction of Highway Maintenance Projects, which played a positive role in strengthening the management of tendering and bidding for the construction of highway maintenance projects and regulating the activities in this regard. However, with the development of China's economy and society, the external environment and internal factors of the tendering and bidding activities for highway maintenance projects have undergone major changes, and the contradictions of insufficient and unbalanced market competition have become increasingly prominent, which fell short of the requirements for market-oriented and law-based international business environment. Competent transport authorities at all levels shall attach great importance to optimizing the business environment, locate various unreasonable restrictions and market barriers in the tendering and bidding activities for highway maintenance projects, conduct in-depth analysis of the causes, and, by perfecting the system, improving the mechanism, intensifying the supervision and other measures, solidly promote the marketization level of the highway maintenance market, regulate the tendering and bidding conducts of highway maintenance projects and optimize the management of maintenance projects, thus promoting the quality development of highway maintenance.

II. Further regulating tendering and bidding activities for highway maintenance projects

1. Promote fair competition in the highway maintenance market Local transport authorities at all levels shall urge bidders to conduct bidding activities for highway maintenance projects in an orderly manner in strict compliance with requirements set forth in laws and regulations including the Law of the People's Republic of China on Tenders and Bids and the Government Procurement Law of the People's Republic of China and prohibit the tendering and bidding for projects that fail to meet the statutory conditions for bid invitation. Transport authorities at all levels shall, in line with the requirements in the Regulations on Optimizing the Business Environment, the Work Plan for the Special Rectification of the Business Environment in the Field of Project Tendering and Bidding (Fa Gai Ban Fa Gui [2019] No. 862) and the Notice of the Ministry of Finance on Promoting Fair Competition in Public Procurement and Optimizing Business Environment (Cai Ku [2019] No. 38), correct any phenomena including illegal restriction or exclusion of potential bidders to ensure that all market entities participate equally in tendering and bidding activities.

2. Simplify tendering and bidding processes and supporting documents. In principle, the bidding for highway maintenance projects does not conduct qualification review of the bidders before the bidding, where post-qualification review may apply. The bidding cycle shall be reasonably shortened to facilitate the bidding for bidders. For road maintenance projects with simple construction technical schemes, short construction period and strong seasonality, the deadline for bidding can be further shortened. The requirements for formats and forms of bid documents shall be further simplified and no bids shall be rejected due to binding, paper or incorrect text of non-critical contents. For business licenses, qualification certificates and other matters that can be queried through government websites such as the National Enterprise Credit Information Publicity System, bidders shall not be further required to provide related supporting materials.

3. Fully implement disclosure of tendering and bidding information. Local transport authorities at all levels shall urge tenderees to announce the tendering plan in advance annually, in stages or on a project-by-project basis according to the specific nature and budget arrangement of highway maintenance engineering projects through the legal media for issuing tender announcements and the website of the tender supervision and management agency, and dynamically update according to the project progress for potential bidders to learn and prepare for bidding. The tendering plans that are released on a project-by-project basis shall include such contents as the general information of the project to be tendered, the division of bidding sections and the estimated tendering time, and shall announce them at least 10 days before the notice of invitation for bid. More transparency of tendering and bidding activities shall be required by fully publicizing information including key contents of the tender document (full text of the bidder qualifications and that of the bid evaluation measures), key information of the bid winning candidate, rejected bid information, compliant handling decisions and misconducts of tendering and bidding parties. Bidders who have submitted bids satisfying the requirements of the tender document but have not won the bid shall be notified of the reason(s) in writing.

4. Reasonably divide the bid sections. According to the characteristics of highway maintenance engineering projects, the bid sections can be divided according to the whole route or piece or area, or according to the annual cycle, road mileage or project category. Maintenance projects may be subject to general contract bidding for design and construction. It is encouraged to conduct the integrated tender of highway technical status assessment, design consultation, maintenance construction and quality control to enhance market competitiveness and improve the efficiency of maintenance funds.

5. Reasonably share contract risks. Local transport authorities at all levels shall urge the tenderee to reasonably divide the risks between the two parties in the tender documents, and shall not set up unreasonable clauses that pass t to the bidder he risks that shall be borne by the tenderee. Liabilities for breach of contract between the two parties to the contract shall be clearly prescribed. In the event of any change, suspension or termination of the contract caused by the tenderee, the tenderee shall compensate the loss suffered by the bidder in accordance with the contract.

6. Regulate deposit collection and refund. Local transport authorities at all levels shall urge the tenderees to strictly regulate the collection of various deposits in accordance with the law. In case that deposit collection is required, the method and amount of collection, return time, non-refundable circumstances and liabilities for overdue refund shall be strictly indicated in the tender document. Bidders shall be allowed to autonomously choose to pay or submit deposits in non-cash forms such as check, bank draft, cashier's check, and bank guarantee.

7. Smoothen objection and complaint handling channels. Local transport authorities at all levels shall urge the tenderees to publish the contact person and contact information for accepting objections in the tender announcement and tender documents, and promptly respond to and handle the objections raised by potential bidders or other stakeholders. The transport authorities at all levels shall handle the complaints submitted by the bidders in a timely manner according to law and announce the results of the handling of the complaints.

8. Accelerate the promotion of electronic tendering and bidding. Local transportation authorities at all levels shall actively work with relevant departments such as development and reform commissions to speed up the construction and operation of the electronic tendering and bidding system including the Trading Platform, the Public Service Platform and the Administrative Supervision Platform, actively implement the whole-process electronic tendering and bidding, and gradually realize all functions such as online release of tender announcement, provision of tender documents, online tender Q&A, submission of bid deposit and bids, selection of bid evaluation experts, electronic bid opening, electronic bid evaluation, online objection compliant, publicity of bid winning candidate, announcement of bid result, issuance of notification of award, submission of performance bond and signing of contract. The security of electronic bidding and tendering network shall be strengthened and attention shall be paid to the prevention and control of relevant risks.

III. Further strengthening contract performance management of highway maintenance projects

1. Fully disclose contract performance information. Local transport authorities at all levels shall urge the tenderees to disclose the key contents of the contract (including name of the project, names of both parties to the contract, contract price, signing date and the term of contract) within 10 days after the contract is signed, on the statutory media that issues the tender announcement or the website of the tender supervision and administration agency, and disclose, in a regular and timely manner, performance information including major project changes, major contract changes, major personnel changes, contract suspension and termination, result of handling of material breaches, completion acceptance inspection and project price settlements on the website of the tender supervision and administration agency. The information involving state secrets or trade secrets is excluded.

2. Improve project commencement efficiency. Local transport authorities at all levels shall, according to the actual situation, coordinate with the public security and traffic management departments to simplify the pre-conditions for the commencement of construction and reasonably shorten the time limit for the work procedures that shall be retained for the sake of safety to ensure the project can be commenced in a timely manner after contract signing.
3. Strengthen supervision on project payment. The highway maintenance project contract shall stipulate the payment method, time and conditions for the contract payment (including monthly progress payment, delivery settlement payment, and final contract settlement payment, etc.) and clarify the liability for breach of contract for overdue payment of the contract price. Local transport authorities at all levels shall strengthen supervision on the performance of project payments, and urge tenderees to make contract payments in accordance with the contract. If a highway maintenance project that uses the financial funds satisfies the payment conditions as stipulated in the contract, such as project quality and archives management, the tenderees shall pay the funds to the bidder's account within 30 days after receipt of the invoice (projects with other fund sources shall be governed mutatis mutandis), and shall not delay the payment on the grounds of institutional change, personnel replacement, policy adjustment, etc., and shall not use obligations not specified in the contract as conditions for payment to the bidder.

IV. Further intensifying supervision on tendering and bidding activities

1. Strengthen in-process and ex-post supervision. The competent transport authorities at all levels shall effectively transform the supervision method, strengthen the primary responsibility of the construction units, simplify or cancel pre-examination or approval, and strengthen in-process and ex-post supervision.

2. Establish and consummate the credit management system. The transport authorities at all levels shall actively promote the construction of credit evaluation systems for contracting entities and employees of highway maintenance, gradually improve the credit evaluation standards, strictly enforce the credit evaluation mechanism, and establish electronic credit files. They shall strengthen joint disciplinary measures for dishonesty, and give preferential measures such as reducing or exempting deposits to enterprises with high credit ratings.

V. Work requirements

1. Provincial transport authorities shall attach great importance to the optimization of business environment for the tendering and bidding of highway maintenance projects, strengthen organizational leadership, implement responsible agencies and personnel, clarify work measures and time limits, make elaborate arrangements and intensify supervision and inspection to ensure the true implementation of all requirements.

2. Provincial transport authorities shall, in accordance with the requirements of this "Circular" and on the basis of the actual conditions, study specific implementation measures, follow up and interpret in a timely manner, accurately convey policy guidance, and reasonably guide expectations.

3. Provincial transport authorities shall announce and implement specific measures to the public by the end of July 2020, improve the system for reporting and responding to business environment complaints in tendering and bidding for highway maintenance projects, accept social supervision, and promptly correct any problems found. The evaluation of the business environment for the bidding and tendering of highway maintenance projects in various places will be included in the evaluation of the nationwide highway maintenance management in the "13th Five-Year Plan" period.  

The Ministry of Transport
April 29, 2020

(This document is for public circulation)