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The Four into One Platform: New Reform Initiatives Compound China's Dissected Public Procurement Governance

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Abstract

For over ten years now, supervision and implementation of public purchasing activities in China has largely been divided among government agencies that jealously guard their share of their regulatory pie and covet the regulatory province of other agencies. Yet vested interests are now on the defensive, as a reform process seeks to collapse the segregated regulatory regimes into a more centralized governance structure. The idea is to combine construction tendering and bidding, government procurement, public land-use auctions and public asset exchanges under one management structure called the “Public Resources Exchange Center.” Hence, some refer to the reforms as the “four into one platform.” This reform challenge seeks to reorder China’s public procurement regulatory system, and the reforms have already gained traction in local government experiments. More recently, pushed nationally by anti-corruption departments, the reforms are gaining some attention at China’s central government level. This article offers a description and analysis of the current governance structure for most Chinese public procurement and the reforms underway, identifying some issues implicated by with the reforms. Despite the promise of reform, unification of Chinese public purchasing management remains distant. As demonstrated in this article, China continues to embrace a dispersed, fluid and arguably experimental framework for public procurement governance. The burdens of such uncertainty and administrative flexibility continue to fall on market participants.
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PEOPLES REPUBLIC OF CHINA
THE FOUR INTO ONE PLATFORM: NEW REFORM INITIATIVES
COMPOUND CHINA’S DISSECTED PUBLIC PROCUREMENT
GOVERNANCE
Daniel J. Mitterhoff1
Professor of Law, Founding Director of the Research Center for Government Procurement and Public
Construction, Central University of Finance and Economics, Beijing (CUFE); Senior Lecturer, University of
Maryland Francis King Carey School of Law, Director of the Maryland-CUFE Cooperative Program
LT: Regulatory Bodies, Vertical Supervisory Structures, Horizontal Supervisory Structures, Institutional
Arrangements for Public Procurement, Separation of Supervision from Implementation,
Counter-Corruption
1. Introduction
For over ten years now, supervision and implementation of public purchasing activities in China has
largely been divided among government agencies that jealously guard their share of their regulatory pie
and covet the regulatory province of other agencies. Yet v ested interests are now on the defensive, as a
reform process seeks to collapse the segregated regulatory regimes into a more centralized governance
structure. The idea is to combine construction tendering and bidding, government procurement, public
land-use auctions and public asset exchanges under one management structure called the “Public
Resources Exchange Center.”2 Hence, some refer to the reforms as the “four into one platform.3
This reform challenge seeks to reorder China’s public procurement regulatory system, and the reforms
have already gained traction in local government experiments.4 More recently, pushed nationally by
anti-corruption departments, the reforms are gaining some attention at China’s central government
level.5
1 The author would like to thank Ms. SONG Ci for her assistance in gathering and interpreting research for this article.
Any error or omissions, however, are mine alone.
This article offers a description and analysis of the current governance structure for most Chinese
2 Wang Huai Jun, “Reflections On the Establishment and Development of the Public Resources Exchange Center”
Transcendent Development: The Superior Paper Collection of the 10th 7 Provinces and Cities Construction Market and
Tender and Bidding Union Conference (2010)(in Chinese) available at
http://www.cncrcc.com/news/xueshujioaliu/xsjl/2010029/6089.shtml
3 The term “four into one platform” is cited by the Government Procurement Information Newspaper in a special report
entitled “Why is Government Procurement Supervisory Power Being Passed in to Other’s Hands,” Government
Procurement Information Newspaper, September 23, 2011 (in Chinese) available at
http://www.caigou2003.com/new/local/news/20110923/news_197171.html. On October 26, 2011, Government
Procurement Information Newspaper held a special expert’s roundtable discussion on the subject in Beijing in which this
author participated. Proceedings of the roundtable (in Chinese) are available at
http://www.caigou2003.com/news/local/news/20111104/news_204783.html.
4 On July 25, 2011, various provincial and local departmerts of supervision (Chinas administrative compliance and
counter-corruption regulator) convened a conference in Wuhan to discuss local reform experiences and promote the new
model. A report on that conference can be found in a new monthly magazine, Public Procurement, August 8, 2011, page
20 (in Chinese).
5 Two national level policy documents are cited as proof of Chinese central level support for the establishment of unified
Public Resource Exchange Centers. These are the October 21, 2007 Work Report of the 17th Conference of the Central
Discipline Inspection Commission of the Communist Party” available
2
public procurement and the reforms underway, identifying some issues implicated by with the reforms.
Despite the promise of reform, unification of Chinese public purchasing management remains distant. As
demonstrated in this article, China continues to embrace a dispersed, fluid and arguably experimental
framework for public procurement governance. The burdens of such uncertainty and administrative
flexibility continue to fall on market participants.
2.0 The Dominant Institutional And Regulatory Framework For Chinas Public
Procurement Regime
2.1 Dissected Governance and Institutional Complexity: Vertical Regulation
Suppliers wishing to sell to the Chinese government must wade into the morass that is Chinas bifurcated,
indeed multiarticular, regulatory environment for public procurement. Different Chinese government
agencies jealously guard their specific regulatory spheres in an effort to maintain their ability to
self-regulate their activities with little interference from other government agencies.6 Comically, while
guarding their own turf, Chinese regulators occasionally claim the turf of other departments. At other
times, administrative departments soberly fear treading on the purchasing world of other Chinese
agencies. Such timidity may also be shared by Chinese courts.7 S adly, tensions among various national
agencies often debilitate China’s reform process. One glaring example is the demise of plans to amend
China’s 1995 Construction Law. Turf battles among the myriad of agencies empowered to supervise
construction in one form or another caused the collapse of the redrafting efforts and the enterprise has
been shelved since 2008.8
The problem lies in Chinas administrative system being divided into xitong” (系统--pronounced
sheetong), a Chinese term delineating a line of administrative power emanating from a national level
ministry down vertically (the tiao,) through lowers levels in the Chinese polity. A number of
these vertical structures monopolize certain public development activities, including project
approval, project design, project/contract award, even administrative resolution mechanisms for
project-related disputes.
Key vertical structures for the management of China’s public procurement include, but are not
limited to, the Ministry of Finance (“MoF”) xitong for the management of purchases of goods and
services for government departments and other public agencies;9
at
the National Development and
http://news.xinhuanet.com/newscenter/2007-10/26/content_6953648_2.htm; and The Work Report of the 5th
Meeting of the 17th Conference of the Discipline Inspection Commission of the Chinese Communist Party (January 11, 2010)
(in Chinese) available at http://news.xinhuanet.com/politics/2010-02/09/content_12960507_10.htm. This documents
speak in generalities, so it is assumed that more forceful arguments are being aired internally within the Chinese polity.
6 See Mitterhoff, Daniel, Grappling with the Regulatory Environment for Chinese Public Procurement,” 3 International
Government Contractor17 (West Publishing, March 2006) available at http://works.bepress.com/daniel_mitterhoff/5/.
7 See discussion of Beijing Modern Wo’Er Trading Company v. Ministry of Finance of the People’s Republic of China, at
page 6, infra.
8 Interview with member of Construction Market Management Division, Ministry of Housing and Urban/Rural Construction
(formerly China’s Ministry of Construction), August 2009.
9 Readers are cautioned to avoid confusion engendered by Chinese nomenclature. Although China’s 2002 Government
Procurement Law, Article 2, defines government procurement as encompassing the purchase of goods, construction and
services, most construction procurement lies outside the Ministry of Finance (and local finance departments) xitong.
Hence, in practice, the term “government procurement” in China relates largely to the public purchase of goods and
services. Indeed, soon after the passage of the government procurement law, the Ministry of Finance passed its own
tender and bidding rules for the procurement of goods and services. “Management Measures for the Government
Procurement of Goods and Services through Tender and Bidding,” Ministry of Finance Document No. 18 (2004). Outside
the reach of the Ministry of Finance xitong, public purchasing largely falls under the provisions of China’s 1999 Tender and
Bidding Law, a regulatory sphere claimed by many xitong depending on the nature of the procurement at issue. See
footnote 13, infra.
3
Reform Commission (“NDRC”) xitong for the management of centrally funded large scale
infrastructure projects; the Ministry of Housing and Urban and Rural Construction (“MOHURD”)
xitong for the management of general construction procurements; the Ministry of Transportation
xitong for the procurement of the nation’s roads and highways; the Ministry of Commerce xitong for
purchases of imported equipment and the Ministry of Railroad’s xitong for the construction and
maintenance of the nation’s rail system. This deeply segmented administrative power structure
imposes a very high compliance burden for those who want to take advantage of Chinas public
procurement market opportunities unless of course one wishes to operate solely within one vertical
regulatory structure (within one xitong). Even then, poorly defined regulatory overlaps present
hazards for the unwary, as in the case where a procurement intermediary who thought it was in
compliance with the requirements of a local municipal construction department got blindsided by a
fine from a provincial level office of the NDRC.10
The drafters of China’s 1999 Tender and Bidding Law punted on issues of system governance, leaving
it to China’s State Council (the Chinese executive) to later name “the relevant department of
administration and supervision” that would have to power to hear complaints and impose sanctions
under the law.11
The following year, the State Council established a rather flimsy division of
supervision and implementation for public (and many private) construction-related project
biddings--along functional lines as infrastructure, general construction, transportation construction,
railway construction, waterworks construction, communications and information infrastructure,
airport construction and the import of large electrical and mechanical machinery as follows:
According to the Tender and Bidding Law of the Peoples Republic of China (referred to as Tender and Bidding
Lawbelow) the following opinions are now submitted for the work division of the administrative/supervisory
functions and responsibilities of the relevant State Council Departments implementing tender and bidding
activities (referred to as tendering and biddingbelow):
1. Personnel from the National Development and [Reform] Commission shall guide and coordinate tender
and bidding work for the whole country, and in coordination with relevant administrative regulatory
departments establish a set of rules for the Tender and Bidding Law, comprehensive policies, and the
concrete scope of projects that must be carried out through tendering—size and scale standards as well as
those projects not suitable for carrying out tendering--reporting [the same] to the State Council-- and
setting the publications for advertising tenders, as well as other media and websites. According to the
Tender and Bidding Law and nationally relevant regulations and policy, relevant administrative regulatory
departments can jointly or separately stipulate concrete implementing measures.
2. Project approval departments, when carrying out required research reports on the feasibility of a tender
project, will determine the tendering methods for the project (entrusted tendering or self-tendering) as
well the scope of national funding for the tender project (issuing initial plan). After project approval,
[there must be] timely reporting to the relevant administrative regulatory department regarding the
situation of the decided tender method and scope, etc.
3. As to supervision and enforcement of illegal activities, like a leak of confidential information, a leak of the
base price, collusive tendering, collusive bidding, discriminatory elimination of bidders, etc. in the course of
10 Hebei Yanzhao Engineering and Construction Management Company v. The National Development and Reform
Commission of Hebei Province, Intermediate Court of Shijiazhuang Municipality (First Level Administrative Division
Decision No. 00011)(2005)(on file with author).
11 1999 Tender and Bidding Law, Articles 61 and 65.
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tendering and bidding (which includes bidding, opening of bids, evaluation of bids and award), complaints
by bidders and other interested persons should be accepted and handled by the relevant administrative
regulator department responsible according to division of work now in force. According to this principle,
the supervision and enforcement of tender and bidding activities on Industrial (including the State
Economic), Water Resources, Transportation, Railways, Civil Aviation, Information Industries etc. business
and industrial projects, are divided among the responsible administrative departments for Economics,
Water Resources, Transportation, Railways, Civil Aviation and Information Industries, etc. The supervision
and enforcement of tender and bidding activities on all building projects, including carrying out subsidiary
installation construction and placement of complete wiring, piping and equipment projects, is the
responsible of the administrative regulatory departments for construction. The relevant administrative
regulatory departments must, upon finding problems in the process of their supervision, timely notify the
project approval department. According to the situation, the project approval department should either
temporarily stop prosecution of the project or temporarily stop payment of funds according to law.
4. Certifications for the qualifications of tender agent enterprises engaged in tender agency business for
various construction projects will be determined by the administrative regulatory department(s) for
construction. Certifications for the qualifications of tender agent enterprises engaged in tender agency
business for the import of construction-related mechanical and electric equipment will be determined by
the administrative regulatory department(s) for international trade. Determination of certification for the
qualifications of tender agency enterprises engaged in other tender agency business, shall be set by the
relevant administrative regulatory departments according to the division of functions and responsibilities
now in force.
5. The National Development and [Reform] Commission is responsible for appointing special supervisory
personnel for the organization of important large scale national construction projects and carries out
supervision and inspection of construction tender and bidding in the process of construction of important
large scale national construction projects.
Each relevant department should perform their separate duties, closely coordinate and jointly, positively
perform the supervision and management work of tender and bidding, strictly in accord with the above division
of functions and responsibilities. According to the provisions of the Tender and Bidding Law, the Peoples
Government of each Province, Autonomous Region and Self-Administered Cities should formulate tender and
bidding management measures according to local realities. 12
See “Opinions on Implementing the Divided Functions of Administrative Supervision of Tender and
Bidding Activities for the Concerned Departments of the State Council,” State Council Office of Legal
Affairs, Document No, 34 (2000)(hereinafter referred to as State Council Document No. 34 (2000).13
12 The closing clause of the State Council Opinion authorizes only the highest level of local government, namely provincial
level governments, to formulate management measures for tendering and bidding. (Mainland China has four autonomous
regions--Inner Mongolia, Xinjiang, Tibet and Guangxiand four self-administered cities--Beijing, Shanghai, Chongqing and
Tianjin--each the same in political status as a province). No lower levels of Chinese government are so empowered, which
raises questions about the legality of municipal governments (other than the self-administered cities) enacting four into
one platform reforms. See discussion Section 5.2, infra.
13 “Opinions on Implementing the Divided Functions of Administrative Supervision of Tender and Bidding Activities for the
Concerned Departments of the State Council,” State Council Office of Legal Affairs, Document No, 34 (2000) available at .
http://www.hljsl.gov.cn/website/ZBNr.aspx?ID_XwFb=3526&XWTYPE=ZCFGCX. Since China often changes the names of
administrative departments names shift sectoral oversight between departments, readers may find it easier to focus mor
5
While the failure of the State Council to more pointedly define power balances among the agencies
designated to regulate tender and bidding activities is troubling, the State Councils repeated
reference to abstract relevant departmentsis downright disturbing.14
State Council Document No. 34 (2000) unleashed a process of both competition and cooperation
among various xitong to develop overarching rules for implementation of the tender and bidding
law, but also rules particular to specific construction sectors, which remain jealously guarded by
government agencies that claim a regulatory monopoly over the same.15 Hence the plethora of
departmental rules under the Tender and Bidding Law, issued jointly or individually by interested
agencies and local governments. The reasons why the State Council embraced, and continues to
embrace in the face of system dysfunction, such rent-seeking and competition among its
departments remains a mystery.16
Notably, State Council Document No. 34 (2000) is silent about the role of Chinas Ministry of
Supervision and local supervisory departments in the oversight of the countrys tender and bidding
activities. Nevertheless, such oversight follows easily from the broad investigative powers granted
the supervision departments pursuant to Chinas 1997 Administrative Supervision Law.17 This power
is recognized by other xitong. When a group of ministries issued Tender and Bidding bid protest
rules, they advised that if in the process of handling bid complaints, regulators discover actions by
government departments and/or personnel in violation of laws, regulations and/or discipline, they
should refer such matters to the Supervision Departments or Discipline Inspection Commissions for
penalty.18
on the functional role, rather than the title of xitongs.
Now, in places adopting the four into one platform reforms, primary authority for
investigating and handling of bid challenges may shift to the Supervisory Departments, with the
14 The uncertainty of Chinese laws and regulations maybe intentional as to ensure administrative flexibility in responding
to a quickly and rapidly changing environment, but the downsides are quite obvious. See Peerenboom, Randall, Chinas
Long March toward Rule of Law (Cambridge University Press 2002) at page 251 (Regardless of the reason, the excessive
generality and vagueness of PRC laws give local authorities great leeway in interpreting and implementing them, often
undermining the predictability and certainty of law. At a minimum, it typically increases transaction costs by making it
more difficult, time consuming and expensive to figure out just what the rules are at any given time or at any given place.
At worse, it breeds corruption and a reliance on connections that erodes the normative force of law.) Chinese public
procurement rules are also “deliberately ambiguous.” Wang, Ping Chinas Evolving Legal Framework on Public
Procurement,”6 P.P.L.R. 285, 302 (2004).
15 China’s National Development and Reform Commission remains the titular head of China’s Tender and Bidding System,
but as this author notes in a previous article, the NDRC’s power in this area is more akin to a “king among autonomous
princes.” Mitterhoff, Grappling With the Regulatory Environment, supra note 6.
16 This author has long held an untested theory that since agencies in China are very powerful, and the State Council needs
them to solve pressing problems (of which there are many in China), the State Council chooses not to create animosity by
clearly designated one agency over another for administrative management of less pressing matters. Why give
administrative departments additional, but seemingly unnecessary, reasons to resist cooperation in solving more
important issues? Another reason to explain the dynamic is provided by George Washington University Law School
Professor Donald Clarke who once opined that an unwritten rule of Chinese constitutional law is that one Chinese
administrative department cannot tell another administrative department what to do. No matter the reason, exploration
of this important political question is well beyond the scope of this article.
17 1997 Administrative Supervision Law of the Peoples Republic of China (as amended), Articles 2 and 6.
18Measures for Handling Complaints Regarding Tender and Bidding Activities on Construction Projects Order No. 11
(2004) issued jointly by the National Development and Reform Commission, Ministry of Construction, Ministry of Railways,
Ministry of Transportation, Ministry of Information Industry, Ministry of Water Resources and China Civil Aviation
Administration (In Chinese) available at
http://www.sdpc.gov.cn/zcfb/zcfbqt/zcfbqt2004/t20050526_4329.htm and available in English with subscription at
www.lawinfochina.com. C.f., Measures for Handling Complaints of Government Procurement Suppliers, Ministry of
Finance Order No. 20 (2004) at Article 25 where investigation and administrative handling of violations of law and
discipline are to be referred to abstract relevant departments,without specifying the Supervision Departments or the
Discipline Inspection Commissions. Available in Chinese at
http://vip.chinalawinfo.com/NewLaw2002/SLC/SLC.asp?Db=chl&Gid=55142 and English with subscription at
http://www.lawinfochina.com/Display.aspx?lib=law&ID=3706.
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traditional xitongs role subordinate, if not eliminated.19
The emergence of China’s 2002 Government Procurement Law on the heels of the 1999 Tender and
Bidding Law also reflects competition among xitong. China’s Ministry of Finance belatedly realized
that, although the impetus behind the Tender and Bidding Law was a response to poor construction
quality and related issues of public safety, it was essentially a public procurement law with
implications for public finance and best value procurements. Such began the drive for a Chinese
government procurement law modeled on those of advanced economies. During the drafting
process for the China’s 2002 Government Procurement Law, the construction supervision xitongs
(identified in State Council Document No. 24 (2000)) lobbied hard to limit the definition of
“government procurement” to the purchase of goods and services only, with construction excepted.
Indeed, this author was designated to debate with an NDRC representative at a government
procurement law drafting conference on this exact issue, arguing successfully (at least as goes the
final text of the law) that the generally accepted international definition of government
procurement, which includes the purchase of “goods, services and construction,” should prevail. It
proved a rather limited victory, however, as while the government procurement law designates the
Ministry of Finance and local finance departments as the supervisory departments for broadly
defined government procurement, the finance department xitong has been unable or unwilling to
assert regulatory authority over most public construction in China.20 Consequently, very little public
construction falls within its jurisdiction.21 Practically then, when one refers to “government
procurement” in China, it generally means only the procurement of goods and services.22 And that
too may find limits, as some goods purchasing (e.g., medical devices for public hospitals and the
import of electrical and mechanical equipment) remains out of the reach of financial department
oversight.23
The 2002 Government Procurement Law shares some of the general ambiguity found in State
19 See discussion Section 4, infra.
20 Confusion over the proper supervisory department forgovernment procurement of construction” in China is due in
part to Article 4 of China’s 2002 Government Procurement Law which states that:Where government procurement of
construction takes the form of public bidding, then the tender and bidding law should be used.It is not clear whether this
is a reference to use the procedural mechanisms in the 1999 Tender and Bidding Law when administering bids for
government procurement of construction, or a substantive referral to the 1999 Tender and Bidding Law which shifts
oversight of government procurement of construction to a regulator other than the Ministry of Finance. For a more
detailed analysis of the implications of 2002 Government Procurement Law, Article 4, see Wang, Ping and Xinglin Zhang,
Chinese Public Procurement Law: An Introductory Textbook, pages 88-90 (in English) available at
http://www.nottingham.ac.uk/pprg/documentsarchive/asialinkmaterials/chinesepublicpocurementlawintroduction.pdf.
21 A recent sop to the Ministry of Finance, and further evidence of the ever-shifting sands of Chinese procurement
regulation, can be found in the newly issued “Implementing Regulations for the Tender and Bidding Lawwhich suggests a
greater oversight role for Ministry of Finance as regards budgetary control and overall policy in the government
procurement of construction. “Implementing Regulations for the Tender and Bidding Law,State Council Order No. 613
(issued December 20, 2011, effective February 1, 2012) at Article 4, discussed further in Section 6, infra. With history as a
guide, however, the more dominant regulators of bidding activities in China will endeavor to prevent any real oversight of
public construction by Chinese finance departments.
22 See footnote 10, supra. See also European Union Chamber of Commerce in China, Public Procurement in China:
European Business Experiences Competing for Public Contracts in China (2011), Section 3 (in English) available at
http://www.europeanchamber.com.cn/images/documents/marketing_department/beijing/publications/2011/PP%20Stud
y%20EN%20Final_0421.pdf (which estimates government procurement under the finance xitong at a value of ¥7 Billion,
but Chinas overall public procurement marketreaching a value of ¥6.8 Trillion).
23 Cao Fuguo, Developments in China: The Regulations Implementing the Chinese Government Procurement Law and
Progress to GPA Accession6 P.P.L.R NA205, note 14. Professor Cao views the Ministry of Finances limited remit as the
Ministry of Finance intentionally yielding to avoid conflict with the regulatory spheres of other departments. Another view,
however, and one to which this author subscribes, is that despite the 2002 Government Procurement Law broadly
covering, the purchase of goods, construction and services, the Ministry of Finance faces administrative and power
balance realities, even possessing a fear of other power centers, that prevents it from asserting its institutional interest for
greater control over Chinas public purchasing regime.
7
Council Document No. 34 (2000). For example, after highlighting the key regulatory role for the
finance departments, the law also muddles about unspecified “other relevant departmentscarrying
out the supervisory and administrative functions in connection with government procurement.24
Additionally, the law designates a general oversight role for both Chinas supervision and auditing
departments, failing, however, to specifically delineate or reconcile the specific supervisory roles of
the supervision and audit department vis-à-vis the financial departments primary supervisory role
over government procurement.25
The 2002 Government Procurement Law does, however, inventively separate government
procurement supervision from purchasing, the former vested in the Ministry of Finance and lower
finance department(s) xitong and purchasing power vested elsewhere.26 Ironically, this may have
blunted the effect of the law, designed to strengthen the power of the finance department xitong,
by weakening the same in relation to other xitong that hoard power related to public procurement.
Indeed, a large segment of the public procurement market is still managed by departments that
serve as both player and refereethus rendering fair and transparent procurement processes
difficult to establish.27 And while there have been some attempts to divide supervisor from
purchaser under the Tender and Bidding Law, the results so far have been less than adequate.28
Hence, those advocating the four into one platform reforms wisely claim the reforms serve further
separation of supervision from implementation in public procurement and asset management,
arguably reducing opportunities for high level government officials to intervene in procurement
processes for illegitimate ends.29
24 2002 Government Procurement Law of the Peoples Republic of China, Article 13, Paragraph 2 and Article 67.
25 Compare Articles 13, 67, 68, 69 and 70 of the 2002 Government Procurement Law. Article 13 states that the financial
departments of the peoples governments at various levels are in charge of supervision and administration of government
procurement and shall perform their supervisory and administrative functions pertaining to government procurement
according to law. Other relevant departments of the peoples governments at various levels shall, according to law,
perform their supervisory and administrative functions in connection with government procurement activities(emphasis
added). Article 67 states that the government administrative departments responsible for government procurement in
accordance with laws and administrative regulations shall, in accord with the division of their duties, strengthen
supervision over government procurement activities. Article 68 states that the audit department shall supervise
government procurement by means of audit. The government procurement supervisory and administrative department
and all government procurement parties shall accept the supervisory audit by the audit department with respect to their
government procurement activities.Article 69 states that the supervision departments shall strengthen supervision over
government organs, state civil servants and other personnel of state administrative organs who participate in government
procurement activities.Article 70 states that any entities and individuals have a right to make complaints and
accusations about illegal actions in government procurement activities and the relevant departments and organs should
timely handle [the same] according to their respective functions and responsibilities (emphasis added). Further compare
Articles 51-58 of the 20002 Government Procurement Law which provides a distinct, staged process for supplier
complaints under the management of the finance departments and the courts.
26 2002 Government Procurement Law, Article 60.
27 Qin Wei Bin, Considerations on Forging a Public Resources Exchange Platform By Relying on A Formal Construction
Market, 3 Construction Market and Tender and Bidding 13 (2009)(in Chinese) available at
http://www.equip.com/Main/Detail.aspx?id=30573046 (noting that the operational method where the referee and
implementer are in the same body lacks a system of mutual constraint and so it’s hard to realize the exchange principles of
openness, fairness and justice). Mr. Qin is from the Chongqing Municipal Construction Exchange Center so,
unsurprisingly, advocates the use of this pre-existing municipal construction center as the foundation for the new
centralized platform. Id. at Page 15, Section 4.2.
28 For example, starting in 2005, in order to distance supervisors from purchasers, Sichuan province required the
mandatory use of purchasing intermediaries on projects where the bid inviting agency also had primary supervisory
functions over the subject project. Sichuan Provincial Measures for Tender Agents on Construction Projects,” 56th
Sichuan Provincial Peoples Congress, May 1, 2005 available at
http://wenku.baidu.com/view/fda1412a3169a4517623a305.html. Of course, the inherent conflict of interest problem is
not really solved by the false front of an intermediary, when that intermediarys principal (the purchaser) and regulator are
essentially the same office.
29 Liu Chang Bao, “The Marketization of the Public Resource Exchange,” 19 China State Finance 70 (2009)(in Chinese)
available at http://www.cnki.com.cn/Articles/CJFDTotal-ZGCE200919030.html; Wang Yan Lun, Exploration of the Standard
Operation and Management Situation of a Local Public Resource Exchange, 19 Management and Tender and Bidding 7, 9
8
Splintered governance also takes a toll on the regulated. Nonsensically, there are at least four
different licensing regimes for the qualification and licensing of commercial purchasing
intermediaries.30 (Both the 2002 Government Procurement Law, Article 19, and 1999 Tender and
Bidding Law, Article 12, contemplate that end-user purchases will entrust their tender/bidding and
other procurement activities to the commercial intermediaries). Consequently, to ply their trade
across China’s whole procurement system, they need to satisfy the demands of different xitong. As
noted earlier, one unwary intermediary who thought it had met the requirements of a local
municipal construction department xitong was unexpectedly fined by the provincial level NDRC
xitong (and lost in court challenging the fine).31 Then there is the amazing case of Beijing Modern
Wo’Er Trading Company v. The Ministry of Finance of the People’s Republic of China,32 where the
Ministry of Finance refused to rule on a supplier’s bid protest on the grounds that the subject project
belong to the regulatory province of another xitong. The Beijing first level instance court, however,
applying the definition of “goods” purchasing under the 2002 Government Procurement Law,
rejected the Ministry of Finance’s attempt to evade supervisory responsibility, finding instead that
the goodspurchase at issue fell clearly within the purview of the government procurement law.33
Affirming that the Ministry of Finance was legislatively tasked with hearing complaints related to
government procurement, the Court ordered the Ministry to rule on Modern WoErs complaints.
Instead of ruling on the complaints as ordered, however, the Ministry of Finance appealed the first
level ruling. Outrageously, that appeal has remained pending for nearly six years.34 Its no stretch
then to conclude that Chinas framework for public procurement management engenders two forms
of maladministration; enabling regulators to assert power in fields where they lack a strong
jurisdictional remit or proper competence, yet shirk responsibility for carrying out public duties
when they should otherwise legally be assumed.35
2.1 Management By Committee: Horizontal Regulation
Confusing matters further, Chinese public administration also has a line of authority reaching horizontally
(2009) (in Chinese) available at http://.www.hnzbcg.org.cn/hk/showArticle.asp?ArticleID=564. See also, Grasp the Primary
Contradictions of Supervision,Carry Out System Innovation: A Conference on Innovations of the Tender and Bidding
Supervision System of Some Provinces, Districts and Cities in the Country Convenes in Wuhan,Public Procurement, August
8, 2011, Page 20 (in Chinese).
30 “Measures for Certification as a Government Procurement Agency Organization,” Ministry of Finance Order No. 61
(2010) (in Chinese) available at http://tfs.mof.gov.cn/zhengwuxinxi/caizhengbuling/201011/t20101105_346129.html;
“Measures for Certification of Tender Agency Organizations for Engineering and Construction Projects,” Ministry of
Construction, Order No. 124 (2007) (in Chinese) available at
http://vip.chinalawinfo.com/NewLaw2002/SLC/SLC.asp?Db=chl&Gid=88285; “Measures for the Qualification Examination
of International Tender Organizations for Electrical and Mechanical Products,” Ministry of Commerce Order No. 6 (2005)
(in Chinese) available at http://www.gov.cn/zwgk/2005-08/15/content_22946.htm; and “Management Measures for
Certification of Tender Agent Organizations on Nationally Invested Projects,” National Development and Reform
Commission, Order No. 36 (2005) (in Chinese) available at
http://vip.chinalawinfo.com/NewLaw2002/SLC/SLC.asp?Db=chl&Gid=60106. The above documents are also available in
English, with subscription at www.lawchinainfo.com.
31 See, supra, Note 11.
32 Beijing First Intermediate Court, Administrative Division First Level Judgment No. 432 (2005) (on file with author). See
also, Mitterhoff, Daniel, Beijing Court Orders Ministry of Finance to Rule on Suppliers Complaints, But Skirts Broader Issue
of Schism in Chinas Procurement Supervision, “ 3 International Government Contractor98 West Thompson 2006)
available at http://works.bepress.com/daniel_mitterhoff/2/.
33 Id.
34 See Li Gang, Its Difficult to Finally Adjudicate Chinas Top Government Procurement Case [Even After] Six Years
Beijing Youth Daily (April 19, 2010) (in Chinese) available at http://news.163.com/10/0419/07/64K9G9S50001124J.html.
35 Wang, Ping and Xinglin Zhang, Chinese Public Procurement Law: An Introductory Textbook at Page 148 (in English)
available at available at
http://www.nottingham.ac.uk/pprg/documentsarchive/asialinkmaterials/chinesepublicpocurementlawintroduction.pdf.
9
(the kuai, ) from provincial and local governments across the descending vertical (xitong) line.36 The
horizontal governance structures are represented at the central, provincial, prefectural, municipal and
even some county levels of Chinese government. The vertical xitong regulators run perpendicular down
across the horizontal levels of government to as low as the municipal level. Consequently, a provincial
construction department is answerable both to the national construction ministry, MOHURD, as well as
the local provincial people’s government. Similarly, a provincial finance department is answerable to
China’s Ministry of Finance and the relevant (horizontal) local provincial people’s government. This
“matrix” is replicated at lower levels of the Chinese polity to the extent that a municipal level construction
department is answerable to the people’s government of the municipality as well as the provincial
construction department, etc.37 At its lowest level, China’s dissected procurement government
manifests in different tender and bidding centers, and separate government procurement centers, in any
given locality. These centers are instrumentalities of the horizontal level of government where a
descending vertical xitong may terminate. The “centers” provide purchasing process implementation
services. They also serve as general information outposts, central repositories for the filing of contract
related documents and fora for opening of bids with attendant services for the certification/notarization
of bidding processes. They may also provide centralized purchasing for various government departments
at the same level.38 A purchasers use of these centers may be required by law (see
2002 Government
Procurement Law, Article 18) or pursuant to other rules and regulations.
Local governments are faced head-on by the debilitating dynamics of competition among agencies for
regulatory share. The battle lines for “departmentalism” as it is called in China may be fixed first at the
national level xitongs, who write rules and policy documents to serve as instructions or guidance for their
lower level counterparts. From there, subordinate level departments both write more rules (of dubious
legislative character under China’s 2000 Law on Legislative) and implement the rules emanating from all
higher levels of the relevant xitong. They also follow rules issued by their respective local people’s
government (the horizontal regulator) which, incorrigibly, often issue their own local administrative
regulations (by local legislatures) or local government rules (by local people’s governments) on the same
subject as those emanating from the central government.39 Amazingly, as if to perpetuate these
dynamics (but more a reflection of the polity trying to reconcile competing power centers), Chinas 2000
Law on Legislation treats departmental rules (emanating from national xitong) and local government
regulations (issued from local kuai peoples governments) as equal in the legislative hierarchy, with
conflicts to be resolved by the State Council, not the Chinese courts.40
36 This creates some fascinating public management (regulatorymatrix) problems, a good description of which can be
found in Lieberthal, Kenneth, Governing China: From Revolution Through Reform, Norton & Co. (2nd Edition 2004), pages
186-187.
37 A horizontal kuai-- also runs along China’s central government, at the level of China’s State Council, tethering all
national ministries and commissions to the Chinese Executive.
38 While tender and bidding centers formed rather organically, Government Procurement Centers for handling centralized
procurement for all agencies at a particularly level of government are a creature of statute. 2002 Government
Procurement Law, Article 16. Any items on the annual government procurement catalogue issued by finance
departments must be purchased by centralized procurement organs. Id. at Article 18. All other procurements can either
be purchased unilaterally by agencies (via hiring a commercial intermediary or otherwise) or the procurement voluntarily
entrusted by the public purchaser to the government procurement center in the same jurisdiction. The list of projects for
which procurements must be entrusted to the government procurement centers continues to grow. See e.g., 80 Types
of Service Projects Recently Enter the Government Centralized Procurement Catalogue,” 172 Government Procurement
Newspaper 1 (February 24, 2012) (in Chinese) available at http://www.gpnews.cn/zctt/9108.htm.
39 For example, most provinces and big cities in China have written their own comprehensive regulations for Tender and
Bidding. See e.g. “Tender and Bidding Regulations For Tianjin Municipality,” Tianjin People’s Congress (November 12,
2004) available in English with subscription at www.lawinfochina.com.
40 2000 Law on Legislation of the Peoples Republic of China, Articles 82 and 86. Similarly, departmental rules issued by
different national level xitong are also of equal authority. Id.
10
Project funding normally derives at the horizontal level of government, heightening competition among
xitong at the same level, be it central, provincial or city. The kuai, being the forum for contest, can either
allow the problem to fester or take action to reign in the wrangling xitong. Conversely any particular
xitong can lobby its commensurate horizontal government in order to increase its power, relative to the
other xitong in the relevant jurisdiction. Consequently, t he power balance among xitong may actually
differ from local government to local government. Alternatively, local governments may try to impose
discipline over local xitong by usurping the power of all. Hence, added to the tension among xitong in any
jurisdiction is the tension between horizontal government on the one hand and vertical regulatory
structures on the other.41 When suppliers complain that Chinese public contract management is
dispersed and to succeed they have to engage a variety of purchasing regimes-- a costly endeavor for
which such suppliers lack adequate resources42
--they have unwittingly entered China’s administrative
matrix. Among the chaos of rules emanating from both vertical and horizontal regulatory agencies, an
interested bidder is best served by trying to discover which specific regulator is ultimately tasked with
responsibility for the project. This, in the absence of a more rational regulatory framework, offers the
best instruction to determine which compliance structures will dictate the ultimate award of any contract.
While the maddening graphics of Chinese governance bedevils contractors, lawyers and compliance
officers alike, it drives some horizontal levels of Chinese government to devise coordination schemes to
rationalize supervision. One often finds departmental rules for specific project initiatives, or even tender
and bidding generally, issued by multiple xitong (perhaps simply disguising the dominant xitong for a
particular project, not a genuine attempt at coordination).43 For project implementation, and to corral
xitong, local (horizontal) governments sometimes create leadership groups made up of officials from
various local xitong to supervise procurement projects. The introduction of the leadership group
mechanism or other “management by committee” project initiatives adds yet another layer of confusing
administration over Chinese public procurement, whereby the government may set up one committee to
supervise the project and another committee to manage the project, the latter which then hires a
commercial intermediary to carry out the bidding for the project as well as other project related activities.
Tender and bidding service centers, in turn, provide the institutional forum for implementation of
project-relevant procurement procedures. With so many entities stacked around the procurement
process, messy problems of agency abound.44 When trouble arises, the ultimate responsible party may
be hard to identify and the different layers of project management and decision-making may try to distant
themselves from, or even blame, each other.45
41 Relations between the central and local (horizontal level) governments in China can prove more horrendously
dysfunctional than competition among xitong. For example, China’s national government has been ordering certain local
governments to stop building golf courses and to tear down redundant highway toll collection booths for years to no avail.
SeeGolf, Toll Stations and the Remnants of Feudalism,” 29 Oriental Outlook (July 18, 2011) (in Chinese) available at
Http://news.sohu.com/20110718/n313756160.shtml.
42 European Union Chamber of Commerce in China, Public Procurement in China: European Business Experiences
Competing for Public Contracts in China (2011), Section 4, at footnote 22, supra.
43 For example, the awkwardly named “standard construction of the Golden Sun model project and application solar
energy light and electricity” program regulatory document was issued by four agencies, the Ministry of Finance, Ministry of
Science and Technology, MOHURD and National Energy Department. See “The Ministry of Finance, Ministry of Science and
Technology, Ministry of Housing and Urban and Rural Construction and National Energy Department Notice Regarding
Strengthening the Standard Construction Management for the Golden Sun Model Construction and for the Application of
Solar Energy Light and Electricity,” Ministry of Finance, Economic Construction Division, Document No. 662 (2010). Given
that the Ministry of Finance is listed first on Document 662, and that the document emanates from a division within that
ministry, one might assume that the finance departments are the key implementers for this project, but that assumption
needs to be tested, especially since the 2002 Government Procurement Law, at Article 60, prohibits the finance
department from directly engaging in purchasing activities.
44 See discussion, Section 5.4, infra.
45 Id.
11
3.0 The Problem of Corruption in Chinese Public Procurement
Understanding the motivations behind the “four into one platform” reforms also requires an
understanding of the operational challenges faced by China’s overall public purchasing system. Of
late, things do not look so good. A growing chorus of public dissatisfaction with Chinese public
procurement floods the internet. Increasingly there are reports of malfeasance and corruption on
even the most high profile of China’s public projects. Even China’s Ministry of Finance admits that
there is a problem of low quality high cost procurement, a phenomenon that has triggered the lyrical
slogan zhi mai gui de, bu mai dui de which translates as just buying expensively, not buying
correctly.46 On the tender and bidding side, similar disgust is expressed through the catchwords
mingzhao anding,meaning open tender, block box award reflecting general belief that Chinas
procurement processes are theater, with contract awards fixed behind the scenes.47
The public
airing shows progress, but repeated scandal and an inadequate administrative response sustains
public dismay.
Much of the shenanigans have become the focus of some embarrassing media reports and telling
public audits. Many laughs were generated when a group of officials from Liaoning Province
purchased Apple’s I-Pad Touch 4 units under the justification that the items could serve as flash disks
to move documents from computer to computer (one journalist mocked that the purchase could just
as well be justified as flashlights).48 Similarly, police in Suzhou felt compelled to justify why the
technologies of the I-Phone were necessary for ensuring public safety.49 And just months before
China suffered a July 2011 crash on its widely heralded new high speed train network, it had sacked
the Minister of Railways for “skimming off 1 billion yuan (U.S.$ 152m) in bribes and keeping 18
mistresses,”50
a connection not lost on the public.
China’s Ministry of Supervision recently circulated 20 classic cases of corruption in the construction
field,51 while China’s State Auditor increasingly reports of projects where bidding was evaded, where
construction is commenced before bidding instituted, where biddings are carried out but in violation
of the required procedures and controls, and where significant project funds are diverted by the use
of false invoicing.52
46 Zhao Jian Hua, “The Finance Department Will Solve The Prominent Problem of ‘Low Quality High Price’ in Government
Procurement” (China News Press February 12, 2007) (in Chinese) available at
http://finance.ce.cn/macro/gdxw/200702/12/t20070212_10405839.shtml.
All this on China’s premier projects; namely the Beijing Olympics Construction,
47 Jie Guo Ren et. al., Problems Existent in Construction Tendering and Bidding and the Exploration of Counter Strategies,
Alliance of Project Managers, October 27, 2011 (in Chinese) available at
http://project.newsccn.com/2011-10-27/95020.html.
48 Han Cong, “Government Tendering: The Wholesale Price Exceeds The Retail Price,” Oriental Outlook (April 21, 2011)
pages 33-34 (in Chinese) available at http://focus.news.163.com/11/0418/18/71UNA7A300011SM9_4.html.
49 “Government Procurement Scandals Occur Frequently: Is There Any Supervision?” (in Chinese) available at
http://www.tianya.cn/publicforum/content/free/1/2066874.shtml.
50 “The new middle classes rise up,” The Economist, September 3, 2011, page 23. See also Li Ming San, “Ministry of
Railways Liu Zhijun Falls Off The Horse,” Phoenix Weekly Hong, Kong (March 5, 2011) pages 20-27(in Chinese).
51 Zhou Ying Feng, “The Supreme People’s Procurate and Ministry of Supervision Expose 20 Classic Cases in the Area of
Construction and Engineering,” (Xin Hua News Agency May 2011) (in Chinese) available at
http://wenku.baidu.com/view/3232b777f46527d3240ce0e4.html.
52 State Auditor Office of the Peoples Republic of China, Audit Findings of the Beijing-Shanghai High-Speed Railway
Construction Project in 2010(March 23, 2011) (in English) available at
http://www.cnao.gov.cn/main/articleshow_ArtID_1132.htm; State Auditor Office of the Peoples Republic of China,
Follow Up Audit Results of the 2nd West-East Gas Pipeline Project for 2010,(February 1, 2011) (in English) available at
http://cnao.gov.cn/main/articleshow_ArtID_1124.htm; State Auditor Office of the Peoples Republic of China, Follow-up
Audit Findings on the Revenues and Expenditures of the Beijing Olympics and the Construction of Olympic Venues,(June
12
the West to East Gas Pipeline Project and the Beijing to Shanghai High Speed Rail.53 Then again,
China’s State Auditor found only 19.7% of 10 randomly selected airport construction projects
suffered irregularities in bid competitions.54
Local procurement scandals also make headlines. Officials in Changsha, Hunan province were
detained pending investigation as to why an air-conditioning project on a government building
ultimately cost ten times a similar project at a four star hotel (while, during official investigation,
contractor gifts to an official’s wife suspiciously get returned).55 In yet another Hunan municipality, a
mayor once praised for his expeditious provision of multi-lane roads to a remote travel/nature
district now faces the vigil of a local policeman who has gone public with the suspiciously high cost
and crumbling low quality of the once marveled access roads.56 Unusual media attention followed a
bid protest through the Courts in Guangdong province, on a project where a higher priced bidder
won under questionable circumstances, until the matter was mysteriously moved off the Court’s
docket for “mediation.57
Despite all the open reportinga very positive development--there remains a lingering sense that
many wayward officials and manipulating contractors are not being adequately punished. Although
each year officials are removed from office and prosecuted for corruption, yet those numbers seem
miniscule compared to the overall sense that public procurement suffers from widespread fraud and
abuse.58 While the State Auditor increasingly describes misdeeds and estimates the cost of the
same for society, its suggested remedies appear too light for any real deterrent effect (and, in any
event, the state auditor lacks powers of enforcement). The number of published administrative
penalty decisions debarring unethical contractors also appears small in relation to perceived
incidents of corruption (most related to the submission of fabricated documents in bids and
sometimes bid collusion).59
19, 2009 (in English) available at http://cnao.gov.cn/main/articlesshow_ArtID_1057.htm.
Indeed prosecutions seem selective, as suggested by one unlucky official
53 Id.
54 State Auditor Office of the Peoples Republic of China, Results of an Audit and Examination of the Airport Construction
Situation of Some Provinces, Districts and Cities,(February 14, 2011)(in Chinese) available at
http://www.audit.gov.cn/n1992130/n1992150/n1992500/2647672.html
55 Bo Tian Ming, More Secrets Revealed on the Tender and Bidding of Changshas Industrial and Commerce Building,
Oriental Outlook, 31, 33 (August 18, 2011) (in Chinese) available at
http://news.sina.com.cn/c/sd/2011-08-15/114022992722.shtml.
56 Wei Yiping, Gong Houqin: From Hero Cop to Challenger of Officialdom,” 34 Lifeweek 80-82 (2011) (in Chinese) available
at http://lifeweek.qikan.com/ArticleView.aspx?titleid=slzk20113409.
57 Television Interview of Professor Wang XiXin, Beijing University Law School, available at
http://xiyou.cntv.cn/v-3b67936a-d211-11de-bb43-001e0bbafb46.htm (in Chinese).
58 In 2010, employees at IBM were caught securing public contracts through offering “training trips” for officials to select
European locations, causing the company to swiftly fire a number of employees.” Wang Lin et al., “IBM’s Storm of Clean
Government,” CBN Weekly (June 17, 2010) (in Chinese) available at
http://finance.ce.cn/macro/gdxw/200702/12/t20070212_10405839.shtml. Notwithstanding this quick action, an
internet survey found that 97% of Chinese netizens believed IBM, the company, engaged in bribery in China. See
http://www.techweb.com.cn/news/2010-06021/625070.shtml. Unsurprisingly, there is no record of any punishment in
China related to the incident, but IBM quickly settled a U.S. Foreign Corrupt Practices Act violation claim related to this and
other incidents. Ando, Ritsuko et al., “IBM Pays 10 Million to Settle Foreign Corrupt Practices Claim,” Claims Journal (March
23, 2011) available at http://www.claimsjournal.com/news/national/2011/03/23/180894.htm.
59 One is able to find administrative decisions debarring contractors, available on line, but considering widespread stench
of corruption in Chinese public procurement, one would expect more such decisions. Moreover, the decisions are largely
conclusory, lacking any detailed analysis of facts or law. See e.g., Punishment Decision Regarding Boade Trading
Company Ltd.s Actions Violating LawFinance Department of Zhejiang Province Penalty Decision No. 3 (2011)(in Chinese)
available at http://www.zjzfcg.gov.cn/new/bgt/302793.htm; Development and Reform Commission of Zhenjiang Province,
Administrative Penalty Decision No. 5 (2006)(in Chinese) available at
http://www.zjbid.cn/dzzw/zwt/cf2006/zfgfz2006-6.htm; Construction Committee of Hangzhou City Administrative Penalty
Decision No. 1 (2005)(in Chinese) available at http://www/zjbd.cn/dzzw/zwt/cf2006/zfgfz2006-5.htm. Occasionally news
reports also advise of debarment actions: The Ministry of Finance Penalizes Two Government Procurement Suppliers,
13
who, upon his six-year conviction for taking kickbacks from suppliers for the public purchase of
automobiles, decried that such kickbacks were not an aberration in the system, but rather an “open
rule.60 Public perception remains that the system suffers deep rot with no end in sight; a monster
gap between ever-growing reports of corruption and the Chinese state’s unwillingness and/or
incapacity to sufficiently correct matters.61
4.0 Herding the Xitong Into A Single Regime
Dysfunctional results from China’s dissected public procurement governance and the seemingly
uncontrollable problem of procurement corruption are the key drivers of the “four into one platform”
reforms. Indeed, experiencing the governance problem first hand, some local Chinese governments
have been experimenting with collapsing the xitong responsible for public asset management and
procurement into a single regulatory structure for some time. (Zhejiang province, somewhat incredibly,
claims that such reforms go back to 2002 and the province prides itself as allegedly being the first to
establish the new regime at the Chinese provincial level).62 In turn, China’s central anti-corruption
officesnamely the Chinese Communist Party’s Discipline Inspection Committee and its civilian
counterpart the Ministry of Supervision--have embraced the idea of a single implementation platform,
eager to merge the splintered regulatory regimes under their primary authority.63
This has sharpened
the debate between the reformers seeking to centralize the management of public assets and the
traditional xitong struggling to maintain regulatory share.
The most radical reforms have come to be known as the Hefei Model,an honor bestowed by China’s
Discipline Inspection Commission on Hefei Municipality, capital of Anhui Province, for combining
dispersed procurement and public asset exchange centers into one platform under the local horizontal
government with a key role for the local Supervision Bureau (the civil counter-corruption agency).64
Hefei
city also represents one of the bigger sized jurisdictions to opt for a fundamental restructuring of the
system. Comparison with other jurisdictions, namely Wuxi city in Jiangsu Province and Zhuzhou City in
Hunan Province, provides a useful backdrop for understanding the different centralized platform reform
models.
November 2, 2009 (In Chinese) available at http://finance.stockstar.com/JL2009110200002047.shtml and Ministry of
Finance for the First Time Penalizes Four Government Procurement Evaluation Experts,October 16, 2009 (in Chinese)
available at http://www.ccgp.gov.cn/cgtt/201009/t20100929_1263642.shtm. Surprisingly, research has uncovered only
one available written judicial opinion evaluating a case where a supplier challenged its debarment, The supplier lost.
Yunnan Te’Anna Medicine Manufacturing Company Inc. v. Board of Health of Jiading District, Shanghai Municipality,
Shanghai No. 2 Intermediate Court, Administrative Final Decision No. 81 (2003) (on file with author).
60 Zhou Wei, Eating Kickbacks Becomes an Open Rule in Some Local Governments,Economic Reference Newspaper
(September 8, 2011) (in Chinese) available at http://business.sohu.com/20110908/n318699737.shtml.
61 Successful procurement reform requires a proper “procurement environment,” meaning the political will and capacity
to enforce the procurement rules. See Arrowsmith, Susan, Donald Wallace and John Linarelli, Regulating Public
Procurement: National and International Perspectives, (Kluwer Law International, The Hague 2000), pages 18-20.
62 Cheng Guang Yao, “Zhejiang is the First in Our Country to Establish a Public Resources Exchange Platform,” Zhejiang
Today (December 2010) (in Chinese) available at http://cpc.people.com.cn/GB/68742/162856/12230953.html.
63 Anti-corruption regulators in Zhejiang Provincenamely the provincial Discipline Inspection Committee and the
Provincial Department of Supervisionseem quite keen on solidifying “gains” in Zhejiang’s four into one platform
experiments. See Ma Guang Ming, “Must Strengthen the Uniform Centralized Management of the Public Resources
Exchange,” 9 Policy Outlook 15-16 (2010) (in Chinese) available with subscription at
http://wuxizazhi.cnki.net/Article/ZCLW201009007.html. Mr. Ma is the Vice Chairman of the Zhejiang Provincial
Discipline Inspection Commission and Head of the Zhejiang Provincial Bureau of Supervision.
64 Promotional Video Prepared by the Hefei Municipality Tender and Bidding Center, April 10, 2011 available at
14
4.1 Scope of Jurisdiction and Activities of the New Public Resources Exchange Platform
Hefei City’s new rules require that the following activities be entrusted to the center platform (which is
still referred to as a Tender and Bidding Center, not the more fashionable “Public Resources Exchange
Center”):
1. All survey, design and construction of new building, renovations, and expansion projects
(including areas such as housing, water treatment, transportation, roads, city government, parks,
information, reconstruction, citizen safety, public electricity, public water, public gas, public heat
and piping and wire installation, etc.), that according to law must use tender and bidding, as well
as the selection of construction management entities and the project-related purchase of
important equipment and materials;
2. The selection of suppliers for various centralized procurement projects at the municipal level;
open bidding government procurement for the selection of suppliers on projects in the four
districts of the municipality; new development districts; government services, cultural and lake
districts; and the selection of suppliers on centralized procurement of pharmaceuticals;
3. The transfer of state or collectively owned asset rights or share rights;
4. The transfer of rights in land use management and industrial land use; as well as the transfer of
exploratory or excavation mining rights; through biddings, auctions, and public price
competitions;
5. Transfers of rights for managing city stations, roads/canals and railways; special industry
management rights; naming rights for bridges and roads; and rights for billboard advertisements;
6. Tran sfer of rights in public bonds or bank mortgages: auction of seized assets by judicial and
administrative enforcement departments, and auction of assets of state-owned enterprises or
bankrupt enterprises where the state is the majority shareholder; as well as auction of car license
plates;
7. Building leases for government organs and state institutions;
8. Bidding determinations for the services of construction consultants, evaluators and commercial
bidding intermediaries on projects using fiscal funds in whole or majority part;
9. Selection of project entities for comprehensive agriculture development, scientific innovation,
and high technology industrial projects using fiscal funds; as well as the selection of project
entities for construction projects using BT and BOT financing methods;
10. Selection of entities for the design, construction and construction management of small scale
construction projects under a limited value that entirely used state-owned investment funds or
state investment in part, and well as project-related procurement of important equipment and
materials; and,
11. Any other matters pertaining to the exchange of social and public resources or state assets where
15
other laws require tendering and bidding.65
Accordingly, the Hefei example of the single platform reforms represents a substantial concentration of
power within one implementation structure. Beyond broad jurisdiction, comprehensive work tasks are
assigned to the Center, such as 1) to enter into an agency entrustment contract with the [end-user] bid
inviter; 2) to compile the solicitation documents and after confirmation with the bid inviter, to report up
to the [supervisory] office; 3) to publish the bid invitation advertisement; 4) to accept the registration
materials of bidders; 5) to check bidders qualifications and distribute/sell solicitation documents; 6) to
respond to inquiries; 6) to accept bid cash security; 7) to organize bid openings and evaluations; 8) to
publicize bid awards and issue bid award notices; 9) to return bid cash deposits and 10) to forward the
written contract to the municipal [supervisory] office for checking and filing.66 This extensive remit is
mirrored in other jurisdictions that have adopted the single, centralized exchange platform.67
4.2 Supervision of the New Centralized Platform
Understanding the revamped oversight structure for supervision of the activities of the new
“four into one centralized platformis a bit more complicated. Three distinct management
frameworks appear to be emerging,68
4.2.1:
although with the reforms so fluid, jurisdictions may
by mixing and matching models:
Kuai Dominant Model
This framework (the Hefei model”) prides itself on separating supervision (first tier
committee), management (second tier committee) and operation (third tier exchange
center).
: Under this model, the relevant local people’s government
establishes a whole new Public Resources Exchange Center (or, as in Hefei, still calling it a
Ten der and BiddingCenter) which is directly supervised by an entity equal in status to
other high level administrative departments within that people’s government (provincial,
prefectural or municipal level). At the top, a supervision committee is established for
which the mayor or vice-mayor serves as committee chairman. Under that committee is a
supervisory office (or secondary committee) whose directorship is staffed by a vice-secretary
of either the local Supervision Bureau (the counter-corruption/administrative malfeasance
regulator) or a vice head-level official from the local office of the [National] Development
and Reform Commission (this official retains his position at the department of supervision or
local NDRC office, while at the same time as assuming leadership in the supervision office).
Below the supervision office is the centralized implementation platform (the new Public
Resource Exchange Center) which is staffed by employees who formerly worked at the
originally dispersed exchange centers in the subject jurisdiction.
69
65 Supervision and Management Measures for Tender and Bidding in Hefei City, Municipal Order No. 126 (2007)., Article 5
(in Chinese) available at
However, rumors are that the first level committee may simply be a coordination
http://www.hfzbtb.cn/hfzbtb/InfoDetail/Default.aspx?InfoID=0321966-0d58-42ec-99e6-1-e5a5ef4f096&CategoryNum=00
6005.
66 Id. at Article 8.
67 See e.g., “Management Measures for the Public Resources Exchange Center of Yi Chun City (For Experimental
Implementation ),” Yi Chun Government Office, Document No. 82 (2011) (in Chinese) available at
http://www.ycggzy.giv.cn/articelWeb!view.action?article.id=920&resourcecode=sjwj&serch=.
68 Descriptions of the three models is drawn from Wang Huai Jun, supra note 2, pages 40-41, but the nomenclature and
categorization are provided by this author.
69 “Break Through Department Barriers, Construct A Sunshine PlatformJiazhou, Guangxi Applies Innovation to its
Government Procurement and Tender and Bidding System,” (July 30, 2010) available at
http://www.zzg.gov.cn/publixh/portal10/tab447/info83386.htm and Liu Chang Bao, “The Marketization of the Public
16
vehicle--a mere talking shopin some jurisdictions.70 The “kuai dominant model strives to
supplant former regulators with an entirely new horizontal oversight structure, although a
single local xitong (either the local supervision bureau or the local NDRC) appears to play a
secondary day to day monitoring role.71
4.2.2
Xitong Coordination Model
The “xitong coordination model” model is applied in the city of Wuxi in Jiangsu Province,
which recently published rules which outline the composition and roles of the relevant
regulators.
: This model strives to impose a horizontal coordinating
committee that includes all relevant local xitong regulators as members (i.e., a “leadership
group)” which supervises the activities of the new centralized “Public Exchange Resource
Center.” The second level supervisory office is staffed by a narrower group of representatives
from interested xitong. At the third tier is the new centralized exchange center. In this
model, both the new horizontal regulatory structure, as well as the originally empowered
xitongs, retain the power to monitor and punish illegal activities in the procurement, bidding
or asset use-rights transfer processes.
72 The first tier “Public Resource Exchange Supervision and Management
Committee” is “responsible for [1] the supervision and administration of public resource
exchange in the entire city, [2] for high level policy decisions in the work of the public
resource exchange and [3] for leadership and coordination of important matters in public
resource exchange.73 Its composition is intensely diverse (nearly all xitong are
represented) with the committee director drawn from the city executive and a broad
membership of functional departments such as the local NDRC, finance service office,74
construction bureau, supervision bureau, finance bureau, city administration and law
enforcement bureau, the organization bureau, the state asset committee, auditors bureau,
land and resources bureau, water resources bureau, the transportation and shipping
bureaus, the environmental protection bureau, the city parks and forest bureau, the civil
defense bureau and pricing bureau, as well as the city’s intermediate court and the Wuxi
customs bureau.75 The second tier supervisory office is composed of a narrower set of
xitong membership, with just the local municipal NDRC, finance service office, finance
bureau, and supervision bureau represented.76
In Wuxi city, the second tier supervisory office is tasked generally with providing guidance,
coordination and management for public resource exchange with enumerated
responsibilities as follows: 1) To research and set the standards and management system for
Resource Exchange,” 19 China State Finance 70 (2009)(in Chinese) (illustrating the application of the kuai dominant model
in Suiping County, Henan Province) available at http://www.cnki.com.cn/Articles/CJFDTotal-ZGCE200919030.html.
70 Interview with reporter from Government Information Newspaper, October 31, 2011.
71 See chart on page __, infra.
72 “Wuxi Municipality’s Management Measures for Public Resource Exchange (For Trial Implementation), Office of the
People’s Government for Wuxi Municipality, Document 236 (September 14, 2011) (In Chinese) at
http://baike.baidu.com/view/6840578.htm.
73 Id.
74 The Finance Service Center is an entity that exists only at the horizontal- kuai level of Chinese provincial, prefectural and
municipal levels of government and is charged with coordination of the financial industry in any given locality (and in some
places supervises local guarantee and microcredit companies). It should not be confused with any finance bureau which is
tied to the Ministry of Finance xitong, tasked with public finance management. See Website of the Beijing Municipal
Finance Service Center (in Chinese) at http://www.bjjrj.gov.cn/jgjs/c10-a15.html.
75 “Wuxi Municipality’ Management Measures, supra note 42, at Article 4.
76 Id. at Article 5
17
the services of public resource exchange; 2) to carry out supervision and inspection as to
whether various types of public resource exchange in the entire city are, according to rules,
being brought within the center as required; 3) to compile and update the “List of Projects of
Public Resource Exchange in Wuxi Municipality;” 4) to guide the business activities of the
Public Resource Exchange Service Center and carry out supervision of public resource
exchange activities; 5) to accept complaints about the resource exchange and check and
handle [the same], and coordinate and handle disagreements and disputes related to public
resource exchange activities and 6) handle any other matters referred by the [first tier]
supervision committee.77 Yet, simultaneously, the “functional departments” (i.e. certain
xitong) retain their legally based power and responsibilities over the process (when it
involves them or perhaps when they want to involve themselves), specifically to 1) entrust
intermediaries or the center to carry out public resource exchange; 2) to supervise and
manage all parts of the process, and accept complaints from exchange participants; 3) to
examine and confirm the exchange procedures, exchange activities and exchange results; 4)
to establish and manage the roster of evaluation experts for local activities, and the training
assessment and management of evaluation experts, as well as guide and supervise the use
of the roster of experts and 5) to apply to the supervisory office to start new resource
exchange projects within their [the functional xitong] scope of authority.78 As if to reinforce
the dual oversight structure, the relevant Wuxi Municipality rules later emphasize that “ if an
interested party believes that the exchange activities are illegal, they can complain to the
relevant functional department or the supervisory office for handling and the functional
department (or the supervisory office) should timely organize an investigation and findings
(emphasis added).79
4.2.3
Loose Unification Model: Under this model, no new integrated public resource
exchange center” is established, but rather the dispersed centers are combined within one
pre-existing center. T itular supervision may be tasked to a particular xitong (usually, but
not necessarily, either the local supervision bureau or the local office of the NDRC).80 The
subordinate centers are attached to the overarching center, but still operate with a
significant measure of independence from the combined structure. Despite the
appearance of centralization, regulatory power still rests with the traditional vertical
regulator (i.e., government procurement under the finance department xitong; general
construction under the construction department xitong; etc.). This model is applied in
Zhuzhou Municipality of Hunan Province whose relevant rules, although merging functions
into one tender and bidding exchange center, make clear that the city “water resources
bureau, transportation bureau, finance bureau, land resources bureau, housing and
construction bureau and the commerce bureau separately supervise and manage tender and
bidding activities for projects in their relevant industries.81 Additionally, however, the city’s
anti-corruption regulator, the city supervision bureau, is empowered to carry out
administrative supervision over all tender and bidding activities in Zhu Zhuo municipality.82
77 Id.
78 Id. at Article 7.
79 Id. at Article 21.
80 Wang Huai Jun, supra, note 2 at page 41.
81 Management Measures for Tender and Bidding in Zhu Zhuo Municipality, Zhu Zhuo Municipality Document No. 7
(2007), Article 6 (in Chinese) available at
http://www/zzztb.net/zzweb/InfoDetail/Default.aspx?InfoID=3b20a3a2-159d-4be8-aae6-9854be11d7ce&CategoryNum=0
03003.
82 Id., Article 7
18
Looking at the above systems, only the Hefei (Kuai Dominant Model) attempts to displace the
traditional xitong regulator, but as shown in Section 5.1 below, this ouster has its limitations. As for
the Xitong Coordination Model or Loose Unification Model, these reforms seem merely to isolate the
problem of regulatory competition, not solve it.
19
Source: Hebei Tendering and Bidding Center Website (in
Chinese) http://www.hfztb.cn/HFZBTB/zwgk/001002
20
5.0 Issues
The four into one platform reforms raise a number of interesting issues, many identified by those
opposing the reforms.
5.1 Push Back By Vertical Regulators
In Hefei municipality, the new centralized platform was physically a merger of all the
dispersed purchasing/resource allocation centers into the city’s pre-existing Tender and
Bidding Center, whose name is retained, but in all other respects, the reform is very much a
“Kuai Dominant Model, where the city is trying to break the supervisory link of the
traditional vertical regulators and assert the dominance of the city horizontal regulator.
Indeed, a series of Hefei Municipal regulatory documents from 2006 to 2007 makes this
intent quite cle a r. 83 However, the effort to completely banish traditional vertical regulators
from the process appears to be weakening. By 2010, a role for the traditional xitong
remerges in yet another municipal regulatory document, the “2010 Management Measures
for Joint Action in Cases of Violations in Tender and Bidding in Hefei Municipality” that puts
the local supervision bureau as the head department for handling complaints--with a leading
role of calling meetings about, determining measures for, and coordinating the joint
investigation and handling of such complaints—yet enumerating, and reaffirming the
traditional role of, vertical regulators in their respective spheres of power, much like Zhu
Zhou city’s primary regulatory document.84 Moreover, for certain administrative penalties
related to violations in tender and bidding, such as cancellation of licenses 85 and
withholding of budget funds, the primary role of the xitong is confirmed.86 This strongly
suggests that vertical regulators are able to push back against efforts to centralize
management of public procurement and public asset exchange, slowly undermining a “kuai
dominant model” and refashioning the same akin to a “xitong coordination model.87
83 See e.g., “Opinions Regarding Establishing a Unified Market in Hefei’s Tender and Bidding and the Further Strengthening
and Standardization of Tender and Bidding Management Work,” Hefei Document No. 20 (2006) at Article 3 (“After the
organization of Hefei’s Tender and Bidding Center, the city’s construction exchange center, government procurement
center, asset rights exchange center will be separated from their original supervisory departments”); “Hefei Municipality
Measures for the Supervision and Management of Tendering and Bidding”, Municipal Government Order, No. 126, Article
17 (2007)(“if a unit or individual violates laws, regulations and rules of asset rights exchange, government procurement or
tender and bidding, and there is a need to assess an administrative penalty, then the relevant departments should entrust
the office of the [first tier supervisory committee of the city] to carry out [the assessment of the penalty]; and “Temporary
Measures for the Handling of Tender and Bidding Complaints in Hefei Municipality,” Hefei City Government General Office,
Document No, 57; Article 3 (2007)(other relevant regulatory department should assist the [first tier city supervisor’s office]
in the latter’s handling of complaints).
84 “2010 Management Measures for Joint Action in Cases of Legal Violations in Tender and Bidding in Hefei City,” No
Document Number Listed (March 3, 2010), Article 4 (in Chinese) available at
http://www.hfztb.cn/hfzbtb/infodetail/Default.aspx?infoid=d70898ac-352c-43e2-b3f5-aaa0b25f7eac&siteid=1&categoryN
um=006001003.
85 Local governments are prohibited from independently creating certain penalties, including revocation of business
licenses. 1996 Administrative Penalty Law of the Peoples Republic of China, Article 11. This presents one barrier to a
local horizontal government seizing full regulatory control over its regional public procurement regime.
86 Id., Article 7(3) and 7(4). For revocation of licenses and certificates, the construction bureau, parks and forest bureau,
transportation bureau, water resources bureau, and business registration bureau are specifically mentioned. For
withholding or cancellation of budget allocations, the finance bureau is specially mentioned. C.f., Supervision and
Management Measures for Tender and Bidding in Hefei City, Municipal Order No. 126 (2007), the key document originally
establishing the Hefei Model,” at Article 17 (Penalties should be imposed on any entity or individual who violate the law,
regulations and rules for asset exchange, government procurement and tender and bidding. Relevant departments
should entrust [the Tender and Bidding Center Supervisory and Management Committee] office to carry out [the
penalties].
87 The centralized platform reforms also raise the issue of which agency or agencies should have the power to debar
21
Interestingly, and unusually, the “2010 Management Measures for Joint Action in Cases of
Violations in Tender and Bidding in Hefei Municipality” specifically expire at the end of five
years, indicating that the document is a compromise among regulators, not a permanent
settlement of regulatory boundaries, which are clearly still in flux. It is likely that further
temporary regulatory compromises among interested power centers (vertical and horizontal)
will show shifting boundaries in various jurisdictions for the foreseeable future. Indeed, as
one knowledgeable commentator advises, the reconfiguration of local systems likely hides
particular xitong vying to capture full regulatory share in process of reform, and that the
particular xitong that succeeds in dominating may prove different in each jurisdiction.88
5.2 Legality of the New Centralized Platform Reforms
Push-back by vertical regulators is buffeted by some strong arguments that the centralized
platform reforms are simply illegal. Strongest among them is that Chinas 2002 Government
Procurement Law already designates China’s financial department xitong as the primary
regulator for such things as setting policy, approving choice of procurement procedures, and
handling complaints in the government procurement process.89 On what basis then, ask
critics, may local governments transgress the law by placing broad supervision of
government procurement activities with other regulators, especially when many of the
reforms are grounded in local people’s government rules-- which stand a lowly fifth in
China’s legislative hierarchy90-- national legislation standing first in the hierarchy, after of
course Chinas 1982 Constitution.91
contractors and suppliers who violate the relevant rules. For example, the “Management Measures for Public Resource
Exchange of Yichun City,” Yichun Municipal Office Document No, 82 (2011) (see footnote no. 67, supra) suggests that this
power rests with the Exchange Center proper, although its language is vague. Id. at Article 23.
Similarly, according to one commentator, China’s 2009
State-owned Assets and Enterprise Law requires asset transfers to be handled at the
provincial level, not the municipal level, calling into question other aspects of the four into
88 Interview with member of Henan Province Tender and Bidding Association, October 27, 2011.
89 2002 Government Procurement Law of the Peoples Republic of China, Article 13. See also Ma Hai Rui, “Constructing
the Uniform Platform, The Finance Departments Supervision Power Is Placed Elsewhere, Government Procurement
Information Newspaper, September 23, 2011 (in Chinese) available at
http://www.caigou2003.com/new/local/news/20110923/news_197171.html; Wang Wei, Displacement of Supervision
Power Over Government Procurement Is Neither Legal or Practical,Government Procurement Information Newspaper,
September 23, 2011 (in Chinese)The illegality of the reforms was also argued at the roundtable held by the Government
Procurement Information Newspaper paper on October 26, 2011 (attended by the author). This is not surprising since the
paper is recognized as official media for the government procurement system, with close connections to the Ministry of
Finance xitong.
90 Chinas 2000 Law of Legislation recognizes five types of legislation/regulation: National laws, State Council Regulations,
Local Peoples Congresss Regulations, Departmental Rules (emanating from national level xitong) and Local Peoples
Government Rules. There is actually a sixth type, treated more as policy statements than rules (although they find
enforcement when applicants go for local project approvals) called Normative Documents. See generally, Chen, Jianfu,
Chinese Law: Context and Transformation (Martin Nijhoff Publishers, Boston 2008) at Chapter 5.
91 Indeed some power transfers are recorded in documents of even lower ranking. For example, the “Document of
Baohe District, Hefei City on Construction Projects and Government Procurement Activities Entering the Hefei Tender and
Bidding Center,” Hefei Tender Office Document No. 1 (2007), Section 2, says that that the Hefei’s first tier supervision office
[for the new platform] will determine the choice of procurement procedure. In Chinese and available at
http://www.hfztb.cn/hfzbtb/InfoDetail/Default.aspx?InfoID=0d5b42c4-db9a-49ff-927b-cdb7c1e9175c&CategoryNum=006
005
22
onepublic resource exchangereforms at lower government levels.92
It would appear then that only new national legislation, passed by the National Peoples
Congress or its Standing Committee, could diminish the finance department xitongs
supreme power over policy, procedure, and disputes in Chinas government procurement
system (again,government procurement already limited to purchasing of goods and
services by public departments and organizations, and not necessarily extending to public
construction, import of mechanical and electric machinery, and/or health-related
procurements). Moreover, the 2002 Government Procurement Law already establishes
government procurement centers to mandatorily handle certain government
procurements within a certain jurisdiction,
93 although there is no reason why such
legislatively-created government procurement centers cannot be merged with other
purchasing and asset exchange centers in a particular local jurisdictionas long as
supervision of the same remains with the Ministry of Finance and local finance departments.
This is true despite the fact that, as a practical matter, the Ministry of Finance and financial
departments hesitate in asserting their legislatively granted regulatory authority to assume
the full control of public purchasing supervision.94
Inexactitude in the oversight of Chinese tender and bidding,” in contrast, arises less from
the timidity of any legally designated regulator, but rather because the relevant primary
legislation, the 1999 Tender and Bidding Law, is silent as to any key regulator.
95 Upon that
omission, the State Council beget a decades worth of chaotic public construction
management, by imprecisely spreading tender and bidding management among multiple
government departments, cultivating a fortress mentality whereby government departments
cling to poorly defined, overlapping, functional roles.96 In turn, indeed in reaction to the
chaos, local governments have now embarked on their own structural and institutional
reforms (namely consolidating supervision and management of public procurement
activities), driven by yet other power centers, absent clear delegation of power from higher
authorities to do so.97
5.3 Role of Counter-Corruption Departments
Accordingly, for the four into one platforms to really take hold,
assuming they ultimately prove a better supervision model, China will be best served by
eventually passing national legislation restructuring, and hopefully rationalizing, the
regulatory framework for management of all Chinese public procurement. In the near term,
however, a clearer statement of the preferred regulatory model, or detailed specification of
distinct acceptable models, would go some ways to legitimizing and properly guiding any
experimental reforms already underway.
The prevalence of corruption in Chinas procurement processes naturally justifies a greater
92 Qiao Jiao, “The Asset Rights Market Does Not Accord With The Public Resource Exchange Center, Property Rights Guide
(September 2009), Page 44 (in Chinese) available at http://finance.jrj.com.cn/200910910308375967534.shtml.
93 2002 Government Procurement Law, Articles 16 and 18. See also, footnote no. 37, supra.
94 This is especially true vis-à-vis the National Development and Reform Commission, often referred pejoratively by other
Chinese government departments as the Little State Council.The Treasury Department of Chinas Ministry of Finance,
largely tasked with management of the government procurement system, is a third tier level office of the Ministry,
ill-positioned and thus too timid to take on the NDRC. This seems to be confirmed by the Ministry of Finances refusal to
rule on the bid protests in the Modern WoEr cases discussed at pages 6-7, supra. The NDRC, along with the Ministry of
Health, were the purchasers at issue in the Modern WoEr cases.
95 1982 Constitution of the Peoples Republic of China (as amended), Article 89(1).
96 See discussion pages 4-6, supra.
97 That is, until very recently. See discussion, Section 6, infra.
23
regulatory role for Chinas counter-corruption departments, namely the Ministry of
Supervision and lower level supervision departments and their Chinese Communist Party
counterparts, the national and local Discipline Inspection Commissions. But do they bring
anything new to the process as to justify the sidelining of the other vertical xitong?
Moreover, is their growing role a product of strengthening horizontal supervision of public
asset management, supported by local governments tired of the maladministration of other
xitong,98 or are they themselves just another rent-seeking xitong? If the former, can they
serve as a disciplined coordinator of other wrangling departments? And if they want to
replace the other xitong, do they have the skilled personnel to supervise the technical
aspects of public procurement, skills very different from those required to control
corruption?99
Chinas counter-corruption apparatus has never been excluded from oversight over Chinas
public purchasing processes. Quite the contrary, as previously noted, Article 69 of the 2002
Government Procurement Law states that the Supervision Departments retain supervisory powers
over government organs, state civil servants and other personnel authorized by state administrative
departments to participate in government procurement activities.100 In turn, under Article 70 of
the law, the supervisory departments, while not specifically mentioned in the article, arguably retain
some power to hear complaints alleging violations of law in the procurement process101 (although
operation of the formal, detailed complaints process under the government procurement law is
delegated to the finance department xitong).102
In any event, Chinas 1997 Administrative
Supervision Law (last amended in 2010) broadly empowers Chinas Ministry of Supervision and lower
level supervision departments to police and administratively punish any violations of law and
discipline by other Chinese government departments and/or government personnel.
A critical problem lies instead in the ongoing failure of the Chinese polity to properly define, balance
and coordinate concurrent supervisory functions and associated processes. The case of Television
Broadcasting Bureau of Huaihua Municipality v, Construction Bureau of Huaihua Muncipality
demonstrates the negative outcomes of such uncoordinated public management, specifically
showing how a rule-based disputes process can be significantly undermined when an unsatisfied
bidder files a complaint with a coincidental regulator.103
In
Television Broadcasting
98 See The Work Report of the 5th Meeting of the 17th Conference of the Discipline Inspection Commission of the Chinese
Communist Party (January 11, 2010) available at
, the project at issue was the construction procurement of a public
broadcasting facility by a local public broadcaster. The primary supervisory department responsible
for the procurement was a local construction bureau. Local rules governing the project provided
specific bid challenge procedures as follows: Within 15 days of a bidding process the bidding results
should be reported by the project owner or by the owner’s tender agent to the local construction
bureau. After such filing, bidders then have five days to submit complaints alleging any illegalities
in the process. If no complaints are raised within the five days, then the project owner is authorized
http://news.xinhuanet.com/politics/2010-02/09/content_12960507_10.htm which advocates for the creating of a unified,
standard exchange center that avoids “conflicts of interest,” meaning, arguably, one that avoids conflicts among xitong.
99 Du Zi Yue, “Supervision Power of Government Procurement Should Not Be Detached From The Finance Departments,”
Government Procurement Information Newspaper, September 23, 2011 available at
http://www.caigou2003.com/news/Local/news/20110923/news_197168.html.
100 2002 Government Procurement Law of the Peoples Republic of China, Article 69. Similarly, Article 68 of the law
retains China State Auditors power to conduct audits of government procurement projects.
101 Id., Article 70.
102 Id. Articles 51-58.
103 Intermediate Court of Huaihua Municipality, Hunan Province, Administrative Divisionm First Level Decision No. 7
(2004)(on file with the author).
24
to make formal contract award, allowing the project to proceed.104
Three bidders submitted offers to build the broadcasting facility. Upon award, one unsuccessful
bidder promptly filed a complaint, but not with the relevant construction bureau per the
above-referenced procedures. Instead, the aggrieved bidder filed its complaint with the local
Chinese Communist Party Discipline Inspection Committee (hereinafter referred to as DIC).
If a complaint is timely filed,
then the construction department has 30 days to dispose of the complaint, making a decision as to
whether the project may proceed with the contract as awarded or corrective action needs to be
taken by the project owner.
105
Following the rule-based procedures, the project owner’s tendering agent proceeded to file the bid
results with the local construction department. However, the statutory filing was rejected on
repeated occasions.106
The DIC, in turn, spent months trying to mediate the dispute (there were about four mediations over
five months), and even recruited the local construction bureau to help with the investigation and
resolution.
The claimed basis for rejecting the filing was that a bidder on the project had
complained to the DIC.
107
The Court rejected the project owners claim, finding that since the construction bureau did not
actually receive a formal complaint from the aggrieved bidder, it did not have the administrative duty
to act on the complaint.
However, during this time, the dismayed project owner was unable to get any
guidance from the construction bureau (the supposed primary supervisor) on how to proceed. The
project was placed in limbo. Frustrated, and obviously suffering delay damages, the project owner
sued the construction bureau seeking compensation for harm arising from the latter’s failure to carry
out its legal duty to handle the complaint and make a decision within the required 30 days.
108 Yet the Court simultaneously found that the construction bureau, as
the supervisory department for tendering and bidding activities was correct in staying the
procurement procedure when it learned that a complaint was pending with the DIC.109 It also
found that the DICs recruitment of the local construction bureau to assist was just thata request
for assistance--and not removal/referral of the complaint from the DIC to the construction
department.110
The entire process, from original bid award to the construction bureau finally making a justiciable
decision, and then administrative appeals to that decision, forced the project owner to wait almost a
year before reinstituting the bidding, the Court seemingly ignorant to the Kafkaesque plight of the
owner stemming from the poorly defined regulatory roles of relevant government agents. Logic
would indicate that if the Court acknowledged the local construction bureauas the supervisory
department for tender and bidding activities,that it, not the DIC, should be primarily responsible for
the complaint, with the local bid protest procedures controlling, thus requiring a ruling on the
Complaint in 30 days. The Courts attempt to reconcile the concurrent complaint processes, as
grounds to avoid government liability, was not only illogical, but unwise for the health of the overall
system. Preferably, the Court should have affirmed the primacy of the more detailed bid protest
rules, highlighted the failure of the local construction department to comply with such rules, and
104 Id.
105 Id. at page 7.
106 Id. at page 8
107 Id.
108 Id. at page 9.
109 Id. at pages8- 9. An interesting aside, the project owner argued, albeit unsuccessfully, that the local DIC, as a
instrumentality of the Chinese Communist Party, was not a government department with the status to hear complaints. Id.
at pages 3 and 9.
110 Id.
25
awarded damages to the Plaintiff sending the message that such administrative inefficiencies as
manifested in the case would not be tolerated.
Similar scenarios are predictable under Chinas 2002 Government Procurement Law as well. Article
70 of that law provides that any enterprises or individuals have the right to make a complaint and
charge relating to any illegal activities in government procurement and the concerned departments
and organs shall handle the same in accord with their individual responsibilities.111 Akin to rules at
issue in Television Broadcasting, this general complaints provision is not reconciled with the
prescribed step-by step complaints procedures found in Articles 51-58 of the government
procurement law.112 Overall, the law simply provides no guidance on the proper relationship
between multiple identified regulators, abstract relevant departments, and their attendant
investigative powers and complaints procedures.113
Commendably, the Hefei Kuai Dominantmodel of the four in one platform reforms attempts to
address this situation. The Hefei Municipal Measures for the Supervision and Management of
Tendering and Bidding, particularly Article 17, seeks a hierarchy of sorts by instructing relevant
departmentsto assist the first tier supervisory office of the new combined bidding center in
handling complaints and to entrust that office to assess any penalties [against parties in the
procurement process].
114 However, that hierarchy easily unravels when the traditional xitong push
back reasserting their authority. 115 For those jurisdictions adopting the xitong coordination
model or the loose unification model, they simply repeat the drafting mistakes of the Chinese
legislature and the State Council by acknowledging commensurate roles for different regulators
without properly reconciling the same through some rationale ordering.116
5.4 The Role of Implementing Agents
China also needs greater clarity with respect to the roles played by agents involved in carrying out
procurements. As described earlier, numerous agents are often stacked above and around individual
procurement projects, with the roles and responsibilities of each often unclear to suppliers and the
public. Such entities include leadership/monitoring groups, tender and bidding centers,
government procurement centers and commercial tendering intermediaries. They present a project
management scheme not only redundant, but also of multiple charactere.g., the supervisor is
distinctly public, project implementing agents largely quasi-public, and tender intermediaries often
commercial.117
Leadership committees and tender and bidding centers often lack formal administrative capacity,
and/or a status as legal persons, so are not proper subjects of administrative law.
Positively, the four into one platform reforms hold promise to reduce the number of
implementing arrangements, and in turn implementing entities. But that still begs the need to
identify the governmental, public, quasi-public or commercial character of the players involved, and
to better formulate the responsibility and the legal relationships among them.
118
111 2002 Government Procurement Law, Article 70.
Consequently,
112 Id. at Articles 51-58.
113 See footnote 25, supra.
114 See footnote 80, supra.
115 See discussion page 17, supra.
116 See discussion page 15, supra.
117 Considering extensive public ownership in the Chinese economy, its better to juxtapose publicwith commercial,
than publicwith private.
118 Whether an entity is subject to administrative law often turns on an inquiry as to whether the entity has been properly
delegatedor merely entrustedwith public power, only the former which confers the status of a subject of
administrative lawon the empowered entity. See 1989 Administrative Litigation Law of the Peoples Republic of China,
Article 25.
26
some other recognized government agency must be responsible for their actions.119 If multiple
regulators are atop the process, it may not be easy to determine the most responsible regulator and,
conversely, some government agency may find itself sued for the actions of an entity that it really
does not control.120 Foremost among these problems is determining the proper respondent(s) in a
bid protest. Due to confusion, commercial tendering agents often find that they must independently
defend lawsuits, only to argue, and for the Courts to agree, that they are mere agents of the
purchaser bearing no liability for problems in the process.121 Then there are recurring issues of the
role of Tender and Bidding Centers and their legal status and authority. As quasi-public entities, such
centers may assume powers they do not have, unnecessarily complicating disputes in the
procurement process.122 Conversely, those responsible may try to distant themselves for the actions
of their subordinates. In one bid protest turned civil law tort case, the ultimate purchaser/project
owner, an airport authority, incredulously tried to claim it was not responsible for the actions of the
subordinate committee managing the project on its behalf.123
5.5 Recent History Repeated
Project implementation frameworks,
like the power balances between procurement regulators, often differ from jurisdiction to
jurisdiction. So far, the four into one platform reforms offer little in terms of clarifying the legal
character of project implementation instrumentalities or the legal relationship among and between
such entities.
The final issue to consider is whether the Four Into One Platform Reforms are simply repackaging of
failed earlier efforts to centralize management of Chinas public purchasing regime, After all, China’s
2002 Government Procurement itself represents a so far unsuccessful attempt to centralize
supervision and management of Chinas public procurement under the leadership of the finance
departments, justifying pessimism that current efforts to create a unified management structure
portend no better outcome. The slogans associated with the current reforms are reminiscent,
arguably identical, to the effort attempted by the finance department xitong to bring all public
119 Id.
120 See Du Zi Yue, footnote no. 99, supra. Journalist Du creatively divides the government procurement process into 12
distinct steps, all linked to the public budgeting process, arguing that breaking any of the links will lead to poorer
government procurement management..
121 See e.g., Beijing Yineng LiDa Technology Company Ltd. v. Guodian Longyuan Electric Power Technology Constrctuon
Ltd., XuanWu District Basic People’s Court of Beijing Municipality, First Level Civil Decision No. 03547 (2010)(on file with
the author) finding that the commercial tendering enterprise a mere innocent agent of the purchaser and thus no liable for
claims related to wrongful forfeiture of bid bond. Of course, if a commercial tendering agency engages in misconduct
independent of its principal purchaser, it should bear liability. See e.g, Hunan Chuangyuan Air Conditioning Ltd. v. Hunan
Province Tendering Co. Ltd. et al., High Peoples Court of Hunan Province, 3rd Civil Division Final Decision No, 85 (200)(on
file with author).
122 In Xixian Bureau of Urban and Rural Construction v. Xixian Construction Company, High Court of Shanxi Province,
Administrative Final Decision No. 5 (1999) , the court found that a local tendering and bidding center lacked the authority
to make a decision on a suppliers complaint, ordering instead, that the local construction bureau rule on the matter. Id.
at page 2 (“only the administrative department for construction is authorized to carry out supervision and administration,
as well as make decision of administrative punishment over tendering and bidding for construction. The Tendering and
Bidding Office cannot make the administrative decision and punishment over tendering and bidding for construction,
unless it is authorized by the administrative department for construction to do so.”)(Case opinion on file with author).
123 See Dalian Xinsheng Fire Engineering Company Co. v. Dalian M&E Engineering Equipment Company et.al., Shenyang
Municipal Intermediate People’s Court, Civil Division No. 3, First Instance Decision No. 7 (2005)(where the court
determined that award to a dishonest bidder amounted to collusion between the owner, the management committee, the
intermediary and the awardee, thus infringing on the protesters right to fair competition. The court specifically ruled that
the project owner was legally responsible for the actions of the underlying management committee)(case opinion on file
with author). Interestingly, the project in Dalian Xinsheng proceeded under the local China Civil Aviation Administration
xitong. The plaintiff pursued administrative [bid protest] litigation under the bid protest rules for that xitong, simultaneous
with tort litigation in the civil decision of the Court.
27
procurement under its public budget management powers nearly a decade ago. 124 Articles
heralding the new four into one platform reforms cite it as the breakthrough to “openness, fairness
and justice,” “transparency,” “corruption preventionand best use of public funds expenditure, much
the same as the fanfare that accompanied the advent of China’s now decade old, finance xitong
driven,government procurementreforms.125
Moreover, centering public procurement supervision within broader public finance management
arguably makes sense, since the primary mission of China2002 Government Procurement La w, li ke
that of some other countries is to foster competition to purchase items on the best monetary terms
for the public agencies, balanced of course with issues of quality.
126
So far, there is no indication
that Chinas departments of supervision and/or horizontal levels of government can better quiet the
jostling xitong that any other Chinese government department. And grounding public procurement
regulation primarily in a counter-corruption framework seems dangerously defeatist. After all, even
with Chinas relatively high levels of corruption, public procurement law is much more than punishing
wayward officials. To the contrary, like all procurement regimes, its about getting best value for
goods, services and construction to fulfill administrative and public needs and welfare.
6.0 Clarity Denied: The State Councils New Implementing Regulations for the
1999 Tender and Bidding Law
Over the last decade, observers of Chinese public procurement reform, including this author,
remained optimistic that the chaos of Chinese public procurement reform would gradually evolve
towards uniformity, if not harmony.127 This optimism appears misplaced, especially given Chinas
State Council very recent reiteration of a dissected regulatory framework for Chinese public
procurement set along ill-defined administrative boundaries. See
Article 4: The Development and Reform Commission of the State Council guides and
coordinates the work of tender and bidding in the whole country and carries out supervision and
Implementing Regulations for the
Tender and Bidding Law d the Peoples Republic of China(State Council Order No. 613, Issued
December 20, 2011, Effective February 21, 2012) (hereinafter T/B Implementing Rules) Worryingly,
Articles 4 and 5 of the T/B Implementing Regulations embraces, even expands, the loose regulatory
boundary scheme first adopted by State Council Document No. 34 (2000).
124 Yan Lihua, Government Procurement Law is the Legal Guarantee of Standardizing Operations in Government
Procurement,” 1 Sichuan Finance 50 Z(2003) (in Chinese) available with subscription at
http://www.cnki.com.cn/Article/CJFDTotal-SCCZ200301022.htm; Li Jianbo, “Zone of Sunshine: A Simple Analysis of the
Government Procurement System,” 10 Economic Tribune 30 (2003) (in Chinese) available with subscription at
http://ckni.com.cn/Article/CJFDTotal-JJLT200310014.htm; Wang Yuping et. al., Realizing the Significance of Government
Procurement and the Systems Establishment,” 2 Theoretical Exploration 73 (2003) (in Chinese) available with subscription
at http://d.wanfangdata.com.cn/Periodical_llts200302033.aspx; Zhang Jungui, Government Procurement: A Must Choice
for the Benefit of People and Country,” 7 Finance, Tax and Accounting 29 (2001) available with subscription at
http://dlib.edu.ckni.net/kns50/detailaspx?dbname=CJFD2001&filename=CSKJ1200107010; and Hu Fengcheng,
Implementing the Government Procurement System is a Necessary Measure for Improving the Management of Fiscal
Expenditures,” 21 Jiangxi Politics Report 32 (1998) (in Chinese available with subscription at
http://www.cnki.com.cn?Article/CJFDTotal-HXZB199821022.htm.
125 See e.g., Lian Wei, Thoroughly Carry Out the Construction of the Public Resource Exchange Market in the Spirit of the
17th Conference,” Property Rights Guide December 2007 available with subscription at
http://wuxizazhi.cnki.net/search.CQDK200712020.html. (Article Author is the CEO of Xiamen Asset Management Center)
126 See Arrowsmith et. al., footnote no. , supra, pages 28-31.
127 See Wang Ping, Chinas Evolving Legal Framework on Public Procurement6 P.P.L.R. 285, 299 (2004)(it could be
argued that the Government Procurement Law is just a new episode instead of the final curtain of the development of
Chinas public procurement regime, since it provides a temporary compromise solution, rather than a uniform and
harmonized regime.)
28
investigation for tender and bidding activities for important large scale construction projects. The
Industry and Informationalzation, Housing and Rural/Urban Construction, Transportation and Cargo,
Railways, Water Resources, Commerce, etc. Departments of the State Council carry out supervision
of relevant tender and bidding activities, according to the stipulated divisions of work functions and
responsibilities
Development and Reform Commissions of Local Peoples Governments at the level of county
or above guide and coordinate the tender and bidding work for local administrative areas. The
relevant departments of the Local Peoples Governments above the county level carry out
supervision of tender and bidding activities according to stipulated division of work functions and
responsibilities, and check and handle illegal actions in tender and bidding activities according to law.
If any Local Peoples Government above the county level has separate provisions for the division of
work functions and responsibilities for supervision of relevant tender and bidding activities by its
subordinate departments, then [proceed] from those provisions.
The finance departments carry out supervision on matters of budget implementation and the
implementation of government procurement policies for tendering and bidding on government
procurement construction projects according to law.
Supervision organs carry out investigations of targets of investigation related to tender and
bidding activities according to law.
Article 5: Local Peoples Government at the level of cities with districts or higher may establish
unified standard platforms for tender and bidding exchange per practical needs, in order to provide
services for tender and bidding services. Tender and bidding exchange platforms must not be
under the command of administrative supervision departments, and must not have the goal of
making profit.
Paragraph 1 of Article 4 of the T/B Implementing Regulations essentially restates the intentions of
State Council Document No, 34 (2000) in more abrupt form. Even reading the two documents
together, and liberally in the drafters favor, Chinas procurement regulatory environment remains
one where multiple administrative departments are invited into the fray; to assert themselves over
regulatory provinces best suitable to others, and to disclaim responsibility for matters that they
should otherwise be primarily responsible for.
More o ve r, Paragraph 2 of Article 4 of the new T/B Implementing Regulations sanctions alternative
power balances among xitong as they may be rearranged by local governments. This, sadly, will
encourage further competition among xitong from jurisdiction to jurisdiction. In turn, those
wishing to participate in the market (be they intermediaries wishing to carryout procurements on
behalf of public owners or suppliers wishing to submit bids) will have to understand the internal ,
and often opaque, administrative dynamics of essentially different public purchasing markets in
China increasing 1) the costs of compliance, 2) the risk of administrative punishment from seemingly
more distant agencies that assert themselves into the process, and 3) the disconnect between
complaint systems which serves to slow down project implementation and/or delay justice while
administrative agents jostle.
Paragraph 3 of Article 4 of the new T/B Implementing Regulations thickens the mystery over which
agency holds primacy over the regulation of the tender and bidding of government procurement of
construction. Score one for Chinas Ministry of Finance and local finance department, with the
State Council nod that the finance xitong should have greater influence over public construction
when it comes to public budget management and government procurement policy. Whether this
really portends any greater role for the Ministry of Finance xitong, given its behavior in the Modern
WoEr cases and practical exclusion from most public construction oversight, remains to be seen.128
128 Another victory for Chinas Finance xitong can be found in the fact that an earlier draft of the T/B Implementing
Regulations broadly defined tender and bidding activities as the use of tendering for the procurement of construction,
goods and services.Implementing Regulations for the Tender and Bidding Law of China (Draft for Soliciting Opinions),
Article 2 available at
http://yijian.chinalaw.gov.cn/lismsPro/law_download/fulltext/1254272026641.doc. This definition
29
Paragraph 4 of the 2011 T/B Implementing Regulations also expands upon State Council
Document No. 34 (2000) by setting out, albeit tersely, that the supervision departments can carry
out investigations related to tender and bidding laws. (State Council Document No. 34 (2000) was
silent on the role of the Ministry of Supervision and local supervision departments in the Tender and
Bidding process). Unfortunately, no effort is made in the 2011 T/B Implementing Regulations to
prioritize or reconcile the oversight powers and complaints process of Chinas supervisory
departments with that of other departments, as to avoid the administrative inefficiencies reflected in
the Television Broadcasting
Finally, Article 5 of the 2011 T/B Implementing Regulations does, however, add the new four into
one platform reforms into the chaotic regulatory mix; tossed in as a discretionary option to
accompany whatever xitong or kuai power balance a local jurisdiction chooses to adopt. No
particular model or key regulator is favored in the terms of the regulations, but clearly local
governments now have greater cover if they want to corral xitong into a more unified management
structures. Importantly, Article 5 embraces a framework where the unified center, (the purchasing
instrumentality), should be separate to any administrative department (the supervision
instrumentality), adopting, as this author interprets it, the basic idea that oversight and purchasing
should not be in a single administrative hand. Whether that principle finds traction in Chinas
broader practice of public procurement remains uncertain. The T/B Implementing Regulations offer
nothing as to legal character of purchasing implementing instrumentalities, nor the legal relations
among implementing instrumentalities and between implementing entities and supervisory
departments, further complicating what should be simple issues of agency in Chinas public
purchasing arrangements.
judicial decision. In turn, nothing in the 2011 T/B Implementing
Regulations suggest a State Council preference for the supervisory departments replacing other
xitong as the key regulator for and expanded four into one public resource exchange/tender and
bidding system.
7.0 Conclusion
After years of public procurement reform, Chinas government still makes little effort to clearly
define the roles of each authorized regulator vis-a-vis similarly situated departments. Moreover, it
continues to embrace a procurement management framework of loosely defined and overlapping
administrative roles, confounding market participants as to the respective power of the multiple
agencies that claim to regulate public purchasing in one form or another. Instead of moving
towards uniformity, additional management models proliferate, increasing competition among
regulators and confusion among the regulated. The resulting vagaries suffered by all involved will
thus remain an unfavorable feature of the system for the near future.
was omitted in the final version of the 2011 T/B Implementing Regulations. Arguably, now, only “construction-related
purchases of goods and services are the subject Chinas Tender and Bidding, as compared to Government Procurement,
regime.
... Linked to the omission of the construction sector, the Chinese GPL does not cover the economically important side of procurement by state-owned enterprises (SOEs), which stands in contrast to international expectations, especially the WTO GPA (Cao & Zhou 2017, p. 376). In addition, the GPL faces similar difficulties as the TL with respect to ambiguous supervisory and enforcement competences along xitong (vertical) and kuai (horizontal) lines of administration (Mitterhoff 2012). ...
Article
Since the 1990s, emerging economies such as Brazil, India, and China have adopted transparency‐enhancing public procurement regulations in line with international norms. Yet they have hesitated to join the World Trade Organization's legally binding Government Procurement Agreement (GPA). Based on the Special Issue framework, this article scrutinizes the underlying domestic and international determinants, and how they influence emerging countries’ positions in two overlapping international procurement regimes. In particular, reform‐oriented state actors, societal pressure, and lesson‐drawing from international templates have induced a strengthening of domestic procurement institutions and turned emerging countries into “promoters” of the international transparency regime. Conversely, the rising powers have remained, to varying degrees, reluctant “spoilers” of the GPA‐based market access regime in order to keep policy space and use procurement for domestic development objectives. The article suggests that this regulatory‐developmental layering of rule‐based governance and interventionist ambitions characterizes the variegated regulatory state in emerging countries.
Problems Existent in Construction Tendering and Bidding and the Exploration of Counter Strategies, Alliance of Project Managers
  • Jie Guo Ren
Jie Guo Ren et. al., "Problems Existent in Construction Tendering and Bidding and the Exploration of Counter Strategies, Alliance of Project Managers, October 27, 2011 (in Chinese) available at http://project.newsccn.com/2011-10-27/95020.html.
Government Tendering: The Wholesale Price Exceeds The Retail Price Oriental Outlook
  • Han Cong
Han Cong, " Government Tendering: The Wholesale Price Exceeds The Retail Price, " Oriental Outlook (April 21, 2011) pages 33-34 (in Chinese) available at http://focus.news.163.com/11/0418/18/71UNA7A300011SM9_4.html.
The Supreme People's Procurate and Ministry of Supervision Expose 20 Classic Cases in the Area of Construction and Engineering
  • Ying Zhou
  • Feng
Zhou Ying Feng, "The Supreme People's Procurate and Ministry of Supervision Expose 20 Classic Cases in the Area of Construction and Engineering," (Xin Hua News Agency May 2011) (in Chinese) available at http://wenku.baidu.com/view/3232b777f46527d3240ce0e4.html.
More Secrets Revealed on the Tender and Bidding of Changsha's Industrial and Commerce Building, Oriental Outlook
  • Ming Bo Tian
Bo Tian Ming, " More Secrets Revealed on the Tender and Bidding of Changsha's Industrial and Commerce Building, Oriental Outlook, 31, 33 (August 18, 2011) (in Chinese) available at http://news.sina.com.cn/c/sd/2011-08-15/114022992722.shtml.
Gong Houqin: From Hero Cop to Challenger of Officialdom (in Chinese) available at http://lifeweek.qikan.com/ArticleView.aspx?titleid=slzk20113409
  • Wei Yiping
Wei Yiping, " Gong Houqin: From Hero Cop to Challenger of Officialdom, " 34 Lifeweek 80-82 (2011) (in Chinese) available at http://lifeweek.qikan.com/ArticleView.aspx?titleid=slzk20113409. 57 Television Interview of Professor Wang XiXin, Beijing University Law School, available at http://xiyou.cntv.cn/v-3b67936a-d211-11de-bb43-001e0bbafb46.htm (in Chinese).
Measures for the Qualification Examination of International Tender Organizations for Electrical and Mechanical Products
"Measures for Certification of Tender Agency Organizations for Engineering and Construction Projects," Ministry of Construction, Order No. 124 (2007) (in Chinese) available at http://vip.chinalawinfo.com/NewLaw2002/SLC/SLC.asp?Db=chl&Gid=88285; "Measures for the Qualification Examination of International Tender Organizations for Electrical and Mechanical Products," Ministry of Commerce Order No. 6 (2005) (in Chinese) available at http://www.gov.cn/zwgk/2005-08/15/content_22946.htm; and "Management Measures for Certification of Tender Agent Organizations on Nationally Invested Projects," National Development and Reform Commission, Order No. 36 (2005) (in Chinese) available at http://vip.chinalawinfo.com/NewLaw2002/SLC/SLC.asp?Db=chl&Gid=60106. The above documents are also available in English, with subscription at www.lawchinainfo.com.
Beijing Court Orders Ministry of Finance to Rule on Supplier's Complaints, But Skirts Broader Issue of Schism in China's Procurement Supervision
Beijing First Intermediate Court, Administrative Division First Level Judgment No. 432 (2005) (on file with author). See also, Mitterhoff, Daniel, "Beijing Court Orders Ministry of Finance to Rule on Supplier's Complaints, But Skirts Broader Issue of Schism in China's Procurement Supervision, " 3 International Government Contractor ¶ 98 West Thompson 2006) available at http://works.bepress.com/daniel_mitterhoff/2/.
It's Difficult to Finally Adjudicate China's Top Government Procurement Case [Even After] Six Years
  • See Li Gang
See Li Gang, "It's Difficult to Finally Adjudicate China's Top Government Procurement Case [Even After] Six Years" Beijing Youth Daily (April 19, 2010) (in Chinese) available at http://news.163.com/10/0419/07/64K9G9S50001124J.html.
Chinese Public Procurement Law: An Introductory Textbook at Page 148
  • Ping Wang
  • Xinglin Zhang
Wang, Ping and Xinglin Zhang, Chinese Public Procurement Law: An Introductory Textbook at Page 148 (in English) available at available at http://www.nottingham.ac.uk/pprg/documentsarchive/asialinkmaterials/chinesepublicpocurementlawintroduction.pdf.
The Finance Department Will Solve The Prominent Problem of 'Low Quality High Price' in Government Procurement
  • Hua Zhao Jian
Zhao Jian Hua, "The Finance Department Will Solve The Prominent Problem of 'Low Quality High Price' in Government Procurement" (China News Press February 12, 2007) (in Chinese) available at http://finance.ce.cn/macro/gdxw/200702/12/t20070212_10405839.shtml. All this on China's premier projects; namely the Beijing Olympics Construction,