Article by Orrick, Herrington & Sutcliffe

On December 20, 2011, the State Council issued the Implementing Regulations for the Law of the People's Republic of China on Bid Invitation and Submission, which became effective on February 1, 2012. Under the implementing regulations, government officials are expressly prohibited from using any means to illegally interfere in the tender process for construction projects. Bid inviters must not impose unreasonable conditions to restrict or exclude potential bidders. Collusion between bidders and bid inviters is also expressly prohibited. The subject matter, price, quality and time of performance of the contract awarded under the bidding procedure must be consistent with the terms of the bidding documents. For government-invested construction projects, the public tender invitation procedure must be followed if the government has a controlling or dominating interest in the project. However, the government is not required to open a project for public bidding where (i) only a small number of potential bidders are available due to complexity of technology, special requirements or due to natural environmental restrictions or (ii) the cost of a public bid invitation would account for too large of a proportion of the contract price of the project.

The full Chinese text of the implementing regulations is available here.

A related Q&A in Chinese is available here.

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