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On China's Government Procurement Legislation and Its Improvement

This write-up is quite complete~

Abstract China's government procurement law draws on and absorbs the rules of government procurement that have been adopted in the international arena, but there are still various deficiencies and inadequacies. These defects and deficiencies are directly related to the ability to establish a real and effective government procurement system in China. Whether the basic principles established by the Government Procurement Law can be materialized in the legal provisions, the subjects and objects of government procurement, the methods and modes of government procurement, and the establishment of an effective complaint system and supervision mechanism for government procurement are important issues in the Government Procurement Law.

Keywords government procurement Procurement subjects Procurement methods Complaint system

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In the market economy, the way the government allocates its resources has undergone a fundamental change, transforming from a government-driven allocation to a market-driven one. In order to fulfill its functions, the government must raise funds in the form of taxes and other forms, and then use these funds to purchase public **** products and services needed by the public, that is, to carry out government procurement activities. After joining the World Trade Organization, China's government procurement system should gradually conform to the relevant international practices in the government procurement market and establish a standardized and scientific government procurement system. Starting from April 9, 1999, China embarked on the drafting of a nationwide government procurement law, summarizing the experience of local government procurement practice and legislation, and after repeated research and argumentation. on June 29, 2002, the Twenty-eighth Meeting of the Standing Committee of the Ninth National People's Congress formally adopted the "Government Procurement Law of the People's Republic of China" (hereinafter referred to as the Government Procurement Law), which has been promulgated in 2003, and was adopted by the National People's Congress at the end of 2003, and the Government Procurement Law has been adopted at the end of 2003. ), which has come into effect on March 1, 2003. This article on China's "Government Procurement Law" in a number of issues, combined with the local government procurement legislation and practice and government procurement of the relevant international practices, the government procurement law on the improvement of some suggestions and measures.

I. Definition of Government Procurement

Government procurement refers to the government in order to carry out day-to-day government activities or for the public service needs, the use of financial funds to buy goods, works and services from the market in a legal manner and procedures. Government procurement contains the subject of government procurement, the object of government procurement, and the source of funds for government procurement. From the concept of government procurement, it can be seen that there are four basic elements of government procurement: first, the main body of government procurement, is to carry out the daily government affairs or provide public **** services for the public government, state organs, and other relevant organs or groups; second, government procurement must be in the statutory manner and procedures, the international procurement method is competitive bidding procurement; third, the government procurement of the The source of funds is the government's financial funds; Fourth, the object of government procurement is goods, works and services.

(i) The scope of the subject of government procurement. The Government Procurement Law stipulates that it is the state organs, institutions and organizations, is the main body of government procurement. From the current situation, China's local laws and regulations have not been included in the scope of procurement of state-owned enterprises, state-owned enterprises in a wide range of large quantities, the status of the national economy is pivotal, in order not to affect the implementation of the operational autonomy of state-owned enterprises, to adapt to the future of our country and other countries reciprocal opening of the government procurement market, the procurement of state-owned enterprises is included in the scope of adjustment of the "Government Procurement Law", a distinction should be made. The following are some examples of such a distinction. State-owned enterprises can be divided into two categories, one is the operating state-owned enterprises, the other is the policy state-owned enterprises, for the operating state-owned enterprises should not be included in the scope of government procurement, and the policy state-owned enterprises should be included in the scope of government procurement, its essence is the extension of the government's functions, the fulfillment of the government's functions in the field of production, this kind of state-owned enterprises basically do not have the competitive, the use of financial funds, to provide the community with public *** services, and their losses are also made up by the State. Therefore, in order to strengthen the management of financial expenditures and improve the efficiency of the use of financial expenditures, the procurement activities of policy state-owned enterprises should be included in the scope of adjustment of government procurement.

The second paragraph of Article 2 of the Government Procurement Law stipulates, "Government procurement as referred to in this Law refers to the procurement of goods, projects and services within the centralized purchasing catalog formulated in accordance with the law or above the purchasing limit standard by state organs, institutions and organizations at all levels, using financial funds." The main provisions of government procurement seems to be very clear, but from the operational level, the main body of government procurement is still to be further refined. This issue in the "on & lt; Chinese people * * * and state government procurement law (draft) & gt; the note", the scope of the subject of government procurement made a detailed description, but the scope of application of institutions and organizations has not been exhausted, in government procurement is prone to produce blind spots. Such as Taiwan, the main body of government procurement for government agencies, public schools and public utilities, government agencies, including the "central" and local government agencies. Public schools, according to Taiwan scholars, including not only public primary and secondary schools, public universities, but also public hospitals, libraries, museums and so on. Regarding public utilities, neither Taiwan's government procurement law nor other existing laws have a uniform definition.

In short, the main subjects of government procurement should be state power organs, state administrative organs, state judicial organs, and institutions with financial allocations. However, the Government Procurement Law excludes policy state-owned enterprises from the scope of the main subjects of government procurement, which is an insufficiency of China's Government Procurement Law.

(ii) the mode of government procurement. Bidding procurement is an internationally recognized method of government procurement. Bidding procurement is divided into three ways: competitive bidding procurement, limited competitive bidding procurement and competitive negotiation procurement, of which competitive bidding, also known as open bidding, is the basic way of government procurement. In addition, there are other methods of government procurement, such as request for quotations, targeted procurement and single-source procurement. However, with regard to tendering procurement, there is an improper understanding in practice that the government procurement system is equated with the tendering system, and that government procurement is tendering and tendering is the whole of government procurement. Tendering is a kind of open invitation to qualified domestic and foreign manufacturers or contractors to offer bids in accordance with pre-set procedures and prescribed conditions, and finally, the bidder selects bidders from among them with favorable prices and conditions and concludes a contract with the bidders. Bidding the main work is as follows: first, the preliminary preparatory work, such as the purchaser qualification examination, study of bidding program, the development of bidding documents, to determine the use of the form of bidding used, etc.; secondly, the public release of bidding notice or written invitation to bidders to participate in the bidding; thirdly, the sale of bidding documents; fourthly, the acceptance of bids, bid opening, bid evaluation, bidding, and so on.

Open tendering invites all qualified suppliers to participate in tenders through public notices, which is generally recognized as the most effective way to promote competition, save costs and achieve high efficiency and other procurement objectives, and thus the government procurement legislation of each country will be open tendering as its preferred procurement method. the WTO Agreement on Government Procurement, the United Nations International Law Commission Model Law on International Trade Law, the International Bank for Reconstruction and Development (IBRD) Loan and International Development Association (IDA) Loan Procurement Guidelines, and the EU Council Directive all encourage the use of open tendering procedures for competitive procurement.

However, the use of open tendering procurement methods may be limited by factors such as the procurement environment, the wide variety of procurement objects, the complexity, uniqueness or standardization of the technology, the small value of the procurement object, and the urgency of the objective situation, which may make it impossible to obtain the optimal economic efficiency and achieve the objectives of government procurement, and so on. Therefore, it is necessary to select procurement methods other than open tendering for different procurement environments and the nature of the procurement object, so that the procurement can satisfy the principles of competitiveness, objectivity and transparency in government procurement, and at the same time realize the goal of economic efficiency in government procurement. Based on the above considerations, government procurement rules of various countries and international government procurement rules provide for procurement methods other than open tendering, but stipulate strict conditions for the application of these procurement methods. Procurement methods other than open tendering are, in practice, methods that are used when the use of open tendering proceedings is not possible or appropriate. As provided for in the international public procurement rules, these methods are characterized as follows: each method must be used in accordance with the procurement environment in which it is to be applied; the use of each method is subject to the approval of the competent authority; and the procuring entity should provide a written report detailing the reasons for its use of a particular procurement method.

Other procurement methods provided for in the WTO GPA are selective tendering, restricted tendering; other procurement methods provided for in the UNCITRAL Model Law are two-stage tendering, request for proposals and competitive negotiations, restricted tendering, request for quotations, single-source procurement, and request for proposals for procurement of services, which are applicable to procurement of services in the light of their characteristics. proposals; other procurement methods provided for in the Procurement Guidelines for IBRD Loans and IDA Loans are limited international tendering, domestic competitive bidding, request for quotations for procurement of direct contracts, self-performing works, BOT and similar procurement for private sector investment; and other procurement methods provided for in the EU Council Directive are restricted procedures and negotiated procedures.

Selective tendering differs from open tendering in that the procuring agency invites tenders not by issuing a public notice, but by sending the invitation to tender directly to a certain number of potential bidders, while the rest of the procedure is exactly the same as the open tendering procedure. RFQ procurement is applicable to the procurement of small purchase amounts and readily available standard products, and is one of the simplest and time-saving procurement methods. The use of single-source procurement, on the other hand, is based on the objectivity of a single source of procurement. Negotiated procurement also has a place among procurement methods. Negotiated procurement is first applied as the main procurement method in the private sector and, in the field of government procurement, in the procurement of national defense and services, but because of obvious shortcomings in terms of competitiveness, transparency, etc., the rules of government procurement impose strict conditions and regulatory measures for its application. Solicitation is a relatively new method of government procurement, established in the United States government procurement system in the 1980s. This procurement method is applicable to procurement of services, computer procurement and other situations where the technical specifications cannot be accurately determined in advance or where it is not known that the procurement requirements will be met.

In sum, the international government procurement rules design a package of alternative procedures for different procurement environments and set out specific conditions for the application of each procedure, the selection of which is based on the criterion that the choice of procurement method should maximize the satisfaction of the basic objectives and general principles of government procurement. In addition, online government procurement is a procurement method that has become more popular internationally in recent years. Through this procurement method, tenders for government procurement can be invited directly online, and suppliers' bidding documents can be transmitted over the Internet. The establishment of an online government procurement system can break the spatial limitation, save time, reduce manpower and costs, and at the same time, it can also realize paperless office, save a lot of paper and reduce procurement costs. From the specific provisions of the Government Procurement Law, China's government procurement methods are basically in line with the internationally recognized procurement methods.

(3) the object of government procurement and the source of funds. The objects of government procurement should adopt the internationally recognized practices, namely, goods, works and services. There is no doubt that the source of funds for government procurement is financial funds, however, from the present situation, China's financial funds consist of the following four parts: (1) financial revenue, that is, the budgetary funds, is the state finance to participate in the distribution of social products obtained by the revenue, is the realization of the state functions of the basic security. (2) Extrabudgetary revenues, i.e., all kinds of financial funds not included in the management of the state budget that are collected, withdrawn and arranged for use by state organs, institutions and social organizations in order to perform, or on behalf of the government's functions, in accordance with the state laws, rules and regulations and other legally binding regulations. (3) Extra-systemic income, also known as "extra-budgetary extra-budgetary income", i.e., the broad scope of social security funds, the government to raise funds, through the "income generation" and so on the formation of the "small treasury". (4) Debt income, i.e., domestic (4) Debt revenue, i.e., domestic public debt, treasury bills, loans from foreign governments and international financial institutions, etc. In view of the above, in the government procurement legislation, we should determine the scope of financial funds, and as far as possible, all financial funds into the scope of government procurement, so as to establish a standardized government procurement system. However, the Government Procurement Law does not define financial funds, which is provided for in the notes to the draft Government Procurement Law: "The draft defines government procurement funds as financial funds, i.e., funds within the financial budget and extra-budgetary funds. These two types of funds are derived from taxes and fees collected by government departments and affiliated institutions in accordance with the law, as well as other revenues obtained from the performance of their duties."

(iv) Threshold price of government procurement. Although the body of the WTO's Agreement on Government Procurement (GPA) does not stipulate the threshold price for government procurement, the annex to the agreement makes provisions for the central government to procure goods and services excluding construction engineering services at 130,000 SDRs and construction works at 5 million SDRs, and for the provincial (state) governments to procure goods and services excluding construction engineering services at 200,000 SDRs and construction works at 5 million SDRs. Judging from foreign government procurement legislation and practice, other countries have not fully complied with the provisions of the GPA, and therefore, China should adopt more flexible measures on the issue of threshold price. However, China's Government Procurement Law does not provide for a specific procurement threshold price, but leaves this right to the State Council and provincial people's governments. The threshold price of public procurement left to the provincial government, in fact, easy to breed local protectionism, may, to a certain extent, hinder the development of the market economy, the establishment of a unified domestic market.

Two, the government procurement model

There are three procurement models for government procurement, centralized procurement, decentralized procurement, mixed procurement. Centralized procurement is the establishment of professional procurement agencies to carry out unified procurement activities, procurement agencies and government agencies are separate. In the early stage of the establishment of the government procurement system, this procurement method is conducive to the construction of a standardized government procurement system, the formation of a good market order of government procurement, to facilitate the supervision of government procurement activities, in addition, it can also effectively reduce the cost of government procurement, saving financial expenditure; but its shortcomings is that the procurement cycle is longer, which may reduce the efficiency of the government agencies. Decentralized procurement, in which each government agency purchases on its own, has the advantage of being convenient and efficient, with the disadvantage that it is not easy to supervise. The combination of centralized and decentralized procurement is mixed procurement, which may be better adapted to China's vast territory and the actual situation of large differences in regional economic development. From the history of China's government procurement, the past local legislation mainly adopted a combination of centralized and decentralized procurement mode. In full consideration of China's realities, summarize the practical experience of government procurement on the basis of the Government Procurement Law adopted a combination of centralized and decentralized procurement.

From the point of view of foreign countries, there is no fixed mode of government procurement. There are wide variations from country to country, even among countries practicing similar management systems; and different modes of procurement have been practiced in a country at different times in its history. Hong Kong and Singapore are members of economies that are urban in nature. Hong Kong has a centralized mode of procurement, except for low-value commodities, which are procured centrally by the Government Supplies Department of the Chief Secretary. Singapore practises decentralized procurement, but there has been a process of change in its procurement model. before May 1995, government departments in Singapore practised centralized procurement, with the Central Purchasing Agency (CPA) being responsible for procurement and statutory bodies making their own purchases. in May 1995, CPA was closed down and decentralized procurement was introduced except for a few items. in September 1997, Singapore acceded to the Government Procurement Agreement (GPA) and In September 1997, Singapore acceded to the Government Procurement Agreement (GPA) and enacted the Government Procurement Act (GPA) under the GPA. The Ordinance provides for the application of the GPA to all government departments and 25 statutory bodies in Singapore. That is, the development from a highly centralized to an extremely decentralized procurement model goes some way to explaining that in the early days of the establishment of the government procurement system, centralized procurement was conducive to the establishment of the system. As the system becomes more sophisticated, decentralized procurement may be more conducive to improving the efficiency of government procurement. ......