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Legislative framework

Relevant legislation

What is the relevant legislation regulating the award of public contracts?

The primary central legislation regarding government procurement in Taiwan is the Government Procurement Act, which was promulgated on 27May 1988and came into effect one year later. The Act has been amended several times since then: on 10January 2001, 6February 2002, 4July 2007, 26January 2011and 6January 2016.

The Government Procurement Act (the Act) covers areas such as:

  • invitation to tender;
  • award of contracts;
  • administration of contract performance;
  • inspection and acceptance;
  • dispute settlement; and
  • penal provisions.

Supplementary provisions are also enacted to establish a government procurement system that has fair and open procurement procedures; promote the efficiency and effectiveness of government procurement operation; and ensure the quality of procurement.

Articles 45to 62of the Act detail the requirements of the awarding of public contracts. (For further information, see question 30.)

Sector-specific legislation

Is there any sector-specific procurement legislation supplementing the general regime?

There used to be a regulation for military procurement, which was promulgated on 17November 2003in Taiwan. However, this was abolished on 1January 2015.

There is another act that covers the promotion of private participation in infrastructure projects, which came into effect on 9February 2000. It has been amended several times - on 31October 2011, 25June 2012and 30December 2015 - and is still effective. It was enacted to improve the level of public service; to expedite social economic development; and to encourage private participation in infrastructureprojects.

With regard to the promotion of the private participation in infrastructure projects, this act will prevail. If infrastructure projects are built or operated by private institutions as approved under this act, the provisions under the Act shall not apply.

International legislation

In which respect does the relevant legislation supplement the EU procurement directives or the GPA?

The World Trade Organization (WTO) Government Procurement Committee adopted Taiwan’s accession to the Agreement on Government Procurement (GPA) on 9December 2008. Subsequently, Taiwan’s Executive Yuan approved the Accession Bill to the GPA on 25December 2008and referred it to the Legislative Yuan for review on 26December 2008. After the Accession Bill was adopted by the Legislative Yuan and ratified by the President, the GPA entered into force in Taiwan on the 30th day (15July 2009) following the date when the instrument of accession was received by the director-general of the WTO (15June 2009).

According to the GPA, a supplier may file a protest in writing with an entity if the supplier deems that the entity is in breach of laws or regulations or of a treaty or an agreement to which Taiwan is a party so as to impair the supplier’s rights or interest in a procurement (see article 75).

Proposed amendments

Are there proposals to change the legislation?

There was a proposal to change the legislation on 12October 2017. There are two additional articles, 11amendments and total amendment of 13articles. The essentials regarding the amendments are asfollows:

  • to establish procurement review unit(s) assisting the review of documents and consultation in procurement affairs, so as to promote the efficiency and effectiveness of government procurement operation;
  • to lift the limitation of most advantageous tender, so as to extend the discretion of the procuring entity when conducting the award of contract;
  • to aggravate the penalties of suppliers offering the procuring entities commission, percentage, brokerage, kickback, or any other unjust benefits; and
  • to amend the requirements that suppliers to be published in the Government Procurement Gazette, offering them chances to makeexplanation.

Applicability of procurement law

Contracting authorities

Which, or what kinds of, entities have been ruled not to constitute contracting authorities?

In principle, procurement conducted by any government agency, public school or government-owned enterprise shall be governed by the Act. The following are not covered by the Act:

  • activities falling under the regulation of the Fundamental Science and Technology Act, the Act for Promotion of Private Participation in Infrastructure Projects and the Cultural Heritage Preservation Act; and
  • activities of government, such as:
  • sale of property and venue rental;
  • financial securities service providers’ buying behaviour in the financial securities market;
  • earnings;
  • debit and credit;
  • financial management;
  • auction;
  • payment;
  • expropriation;
  • hiring;
  • personnel in the name of individuals themselves to purchase business tickets and accommodation; and
  • providing social housing via rent and management of private building.

Contract value

Are contracts under a certain value excluded from the scope of procurement law? What are these threshold values?

According to article 5of the Tendering Regulations of Central Government Entities for Procurement of a Value Not Reaching the Threshold for Publication, which was promulgated on 26April 1999and was last amended on 9April 2003, an entity engaged in a procurement of a value not more than one-tenth of the threshold for publication (NT$1million) may directly negotiate with the supplier where public notice and submission of offers or proposals from suppliers are waived.

Regarding article 47of the Act, for small procurement (according to the Thresholds for Government Procurement, which was promulgated on 2April 1999, small-amount procurement by central government entities is classed as any procurement with a value of less than NT$100,000) an entity may conduct procurement without setting a government estimate. However, the reasons for not setting a government estimate and the terms and principles of awarding the contract shall be provided in the tender documentation. Also, the amount of small procurement shall be set, at the central government level, by the responsible entity; and at the local government level, by the municipal or county (city) governments provided that the said amount shall not exceed one-tenth of the threshold for publication. (Where a local government does not set the amount, the amount set by the central government shall govern.)

Amendment of concluded contracts

Does the legislation permit the amendment of a concluded contract without a new procurement procedure?

Besides other procedures prescribed at the local government level and limited tendering procedures, there is the Essential Requirements for Procurement Contracts, which is the main central regulation permitting the special conditions under which contracts can be amended, asfollows:

  • The entity notifies the supplier of a contract amendment:
  • Within the scope of the contract, the entity may notify the supplier to revise the contract. Except where otherwise stipulated in the contract, the supplier shall present documents relating to the subject of procurement, price, time limit of the contract, performance, payment schedule or other contract matters that require revision after receiving the notification.
  • Prohibition: before the entity accepts the related revision documents, the supplier may not change the contract by itself. Unless requested by the entity, the supplier shall not, because of the notification of the preceding paragraph, delay its responsibility of contract performance.
  • The supplier requests a contract amendment: in the following situations the subject of procurement agreed in the contract can be replaced by another entity with the same or better specification, function and effectiveness if the supplier gives a reason and attaches a comparison table including specification, function, effectiveness and price after approval of the entity. However, this must not be used as an excuse for increasing the contract price. When this reduces the supplier’s cost of contract performance, it shall be deducted from the contract price:
  • the original brand or model in the contract is no longer manufactured or supplied;
  • the original subcontractor in the contract is no longer in business or refuses to supply;
  • change is required due to force majeure; or
  • the subject of the amended contract is better than that of the original contract or more advantageous for the entity.
  • An adjustment in contract price due to government actions: where the supplier, when performing the contract, encounters any of the following government actions that result in an increase or reduction in the cost of contract performance, the contract price may beadjusted:
  • introduction of new laws or amendments to the existing laws;
  • new taxes or regulatory fees or changes to existing ones; or
  • changes to the fees and expenses under government control.

Has there been any case law clarifying the application of the legislation in relation to amendments to concluded contracts?

As for the application in courts, when suppliers request for amendments to concluded contracts, the court will look into the details whether the requirements are met or not, but the crucial criterion remains whether the entity has approved or agreed to such amendments and whether there is sufficient evidence showing such approval or agreement. (See Judgment No. 100-Tai-Shang-Zi-1836of the Taiwan Supreme Court.)

Privatisation

In which circumstances do privatisations require a procurement procedure?

Procurement conducted by any government agency, public school or government-owned enterprise shall be governed by the provisions under the Act.

Privatised state-owned enterprises, where the government has less than 50per cent of the shareholding, are not subject to the Act. So the tender does not need to be published in the government procurement bulletin or be posted on the information network.

Public-private partnership

In which circumstances does the setting up of a public-private partnership (PPP) require a procurement procedure?

According to the Act for Promotion of Private Participation in Infrastructure Projects, for any dispute in connection with or arising out of the application and the evaluation procedures between an applicant for participating in an infrastructure project and the authority in charge, the complaint shall be handled in accordance with the provisions under the Act with regard to the dispute resolutions for the invitation to tender, the evaluation of tender and the award of contract. (The competent authority shall prescribe the regulations governing disputeresolutions.)

Advertisement and selection

Publications

In which publications must regulated procurement contracts be advertised?

In accordance with article 27of the Act, for open tendering procedures or selective tendering procedures, an entity shall publish a notice of invitation to tender or of qualification evaluation on the Government Procurement Gazette and also disclose on the responsible entity’s government procurement information website.

Participation criteria

Are there limitations on the ability of contracting authorities to set criteria or other conditions to assess whether an interested party is qualified to participate in a tender procedure?

According to article 36of the Act, when conducting procurement, an entity may prescribe basic qualifications of tenderers based upon actual needs. For a special or large procurement that must be performed by suppliers of substantial experience, performance record, manpower, financial capability, equipment and so on, specific qualifications may be prescribed for tenderers.

There is also a regulation, Standards for Qualifications of Tenderers and Determination of Special or Large Procurement, which was enacted to state more explicit qualifications in detail.

Is it possible to limit the number of bidders that can participate in a tender procedure?

Referring to the Act, there is a ‘limited tendering procedure’, under which, where no public notice is given, two or more suppliers are invited to compete or only one supplier is invited for tendering.

An entity may apply the limited tendering procedure to a procurement of a value reaching the threshold for publication under any of the following circumstances:

(i) where there is no tender in response to an open tender, selective tender, or the open procedures referred to the following conditions ((ix) to (xi)), or where the tenders submitted have been not in conformity with the requirements in the tender, provided, however, that the requirements of the initial tender are not substantially modified in the contract as awarded;

(ii) where the subject of a procurement is an exclusive right, a sole source product or supply, a work of art, or a secret, which can be supplied only by a particular supplier and no reasonable alternative or substitute exists;

(iii) insofar as is strictly necessary when, for reasons of extreme urgency brought about by events unforeseeable by the entity, the subject of the procurement could not be obtained in time by means of open or selective tendering procedures;

(iv) for additional deliveries by the original supplier which are intended either as follow-up maintenance, or parts and components replacement for existing supplies or installations, or as an extension of existing supplies, services or installations where a change of supplier would not meet the requirements of compatibility or interchangeability;

(v) where the subject of a procurement is a prototype or a subject first produced or supplied in the course of research, experiment or original development;

(vi) when additional construction work, which was not included in the initial contract but which was within the objectives of the original tender documentation has, through unforeseeable circumstances, become necessary, and the entity needs to award contracts to the contractor carrying out the construction work concerned to achieve the objectives of the initial contract since the separation of the additional construction work from the initial contract would be too difficult and cause significant inconvenience to the entity. However, the total value of contracts awarded for the additional construction work may not exceed 50per cent of the amount of the main contract;

(vii) for any further procurement whose period, value or quantity to be expanded is indicated in the tender notice and tender documentation;

(iix) for property purchased on a commodity market;

(ix) in the case of contracts for professional services, technical services or information services awarded to the winner selected publicly and objectively;

(x) in the case of contracts awarded to the winner of a design contest and the selection has been conducted publicly and objectively;

(xi) in the case of designating an area for real property procurement in response to a need for business operation provided that the real property procured has been solicited publicly in accordance with its requirements and criteria;

(xii) where the subjects of a procurement are supplies or services not-for-profit provided by the physically or mentally disabled, aboriginal people, prisoners, philanthropic organisations of the physically or mentally disabled, registered organisations of the aborigines, prisoners’ works, or philanthropic organisations;

(xiii) in the case of research and development of science, new technology, administration or academic concern entrusted to a person in a professional area or a leading academic or non-profit organisation screened as a winner by open notice;

(xiv) in the case of inviting or entrusting a professional person, institution or organisation of culture or art concern to perform or join in culture or art activities provided that they have the characteristics or specialities required or have been screened as a winner by opennotice;

(xv) where a procurement is for the purposes of commercial resale or production of goods or provision of services for resale, and is not appropriate for conducting open or selective tender considering the characteristics or actual needs of the party for resale, manufacturing process, or source of supply; or

(xvi) other circumstances as prescribed by the responsible entity.

See article 22of the Act.

Regaining status following exclusion

How can a bidder that would have to be excluded from a tender procedure because of past irregularities regain the status of a suitable and reliable bidder? Is the concept of ‘self-cleaning’ an established and recognised way of regaining suitability and reliability?

Where a procuring entity finds that a supplier has any of the following circumstances, the entity shall notify the supplier of the facts and reasons related thereto, and indicate in the notification that it will be published in the Government Procurement Gazette if the supplier does not file a protest.

The supplier whose name has been published in the Government Procurement Gazette is prohibited from participating in tendering, or being awarded or subcontracted for one or three years, depending on what kind of violation the supplier has committed, except where the original penalty has been revoked or where a ‘not guilty’ verdict has been entered where:

  • the supplier allows any others to borrow its name or certificate to participate in a tender;
  • the supplier borrows or assumes another’s name or certificate or uses forged documents or documents with unauthorised alteration for tendering, contracting or performing a contract;
  • the supplier has substantially reduced the work or materials without obtaining prior approval;
  • the supplier forges or alters without authorisation documents related to tendering, contracting or contract performance;
  • the supplier participates in tendering during the period when its business operation has been suspended by a disciplinary action;
  • the supplier has committed any of the offences prescribed in articles 87to 92of the Act, and has been sentenced by a court of first instance;
  • the supplier refuses to execute a contract without due cause after award;
  • an inspection indicates any serious non-conformity with the contractual requirements;
  • the supplier does not fulfil its obligation of guarantee after inspection and acceptance;
  • the time limit for contract performance is seriously delayed due to causes attributable to the supplier;
  • the supplier is in breach of the requirement to assign a contract to others;
  • a contract is rescinded or terminated for causes attributable to the supplier;
  • the supplier is undergoing bankruptcy proceedings; or
  • the supplier seriously discriminates against women, aborigines or any person of a disadvantaged group.

See articles 87to 92and 101of the Act.

The procurement procedures

Fundamental principles

Does the relevant legislation specifically state or restate the fundamental principles for tender procedures: equal treatment, transparency and competition?

The general principles of the Act are set out in article 1and are to establish a government procurement system that has fair and open procurement procedures, promote the efficiency and effectiveness of government procurement operation, and ensure the quality ofprocurement.

Independence and impartiality

Does the relevant legislation or the case law require the contracting authority to be independent and impartial?

The related regulations are stated under the Act:

  • in conducting any procurement, an entity shall observe the principle of protecting public interests, fairness and reasonableness, and shall not accord differential treatment to suppliers without due cause;
  • in conducting selective tendering procedures, the entity shall give qualified suppliers an equal opportunity to be invited;
  • in conducting a procurement, an entity shall not disclose, before opening of tenders, the government estimate, the names and number of the suppliers that have obtained the tender documentation, or submitted a tender and any other relevant information that may result in competition restraint or unfair competition; and
  • in conducting negotiations (for further information, see question30), no tenderers meeting the requirements shall be discriminated.

See articles 6, 21, 34and 57of the Act.

Conflicts of interest

How are conflicts of interest dealt with?

Where a conflict of interest exists:

(i) former procurement personnel and procurement supervision personnel shall be prohibited from contacting the entity that they previously worked either for their own sake or on a supplier’s behalf for three years following their resignation for matters related to their former duties within five years prior to their resignation; and

(ii) the procurement personnel and procurement supervision personnel shall withdraw themselves from a procurement and all related matters if they or their spouses, relatives by blood or by marriage within three degrees, or other relatives with whom they live have interests involved therein.

Upon finding that the procurement personnel or procurement supervision personnel failed to withdraw themselves when any of the conflicts of interest stated above exist, the head of the entity shall order such personnel to withdraw and shall appoint a replacement.

On the other hand, a supplier shall not participate in the procurement of a procuring entity in the event that the relationship between the head of the procuring entity and the supplier itself or the responsible personnel of the supplier is as mentioned in condition (ii). However, this requirement may be waived where enforcement of it would be against fair competition or public interests and an approval has been obtained from the responsible entity.

See article 15of the Government Procurement Act.

Bidder involvement in preparation

How is the involvement of a bidder in the preparation of a tender procedure dealt with?

A procuring entity shall prescribe in the tender documentation that a supplier is prohibited from participating in tendering, being awarded or subcontracting, or assisting tenderers where any of the following circumstances occurs:

(i) the supplier has provided planning or design services to the entity, and the procurement has resulted from such planning or design;

(ii) the tender documentation has been prepared by the supplier for the entity;

(iii) the supplier provides a tender evaluation service to the entity for the procurement;

(iv) the supplier knows, by fulfilling a contract with the entity, certain information that is unknown to other suppliers or should be kept secret, and the supplier can benefit from the information and win the bid; and

(v) the supplier is a project management service provider entrusted by the entity and the procurement is related thereto.

However, where there is no conflict of interest or concern over unfair competition, the circumstances referred to in (i) and (ii) above, and the other circumstances, may not be applicable to the subsequent procurements after approval of the entity:

  • where the planning or design service provider is a sole source manufacturer or supplier for the subject of a subsequent procurement, and no reasonable alternative or substitute exists;
  • where the supplier has developed a new product for an entity and prepares the tender documentation accordingly for the entity;
  • where the tender documentation is prepared separately for different major parts by two or more suppliers for the entity; or
  • under other circumstances as prescribed by the responsible entity.

See articles 38and 39of the Enforcement Rules of the Act.

Procedure

What is the prevailing type of procurement procedure used by contracting authorities?

Different types of contracts have different procurement procedures. According to the statistics of the Implementation of Government Procurement in 2016, published by the Public Construction Commission, Executive Yuan of Taiwan in March 2017, out of the main three procurement procedures - open tendering, selective tendering and limited tendering - open tendering had the highest accumulative contract value in 2016.

Separate bids in one procedure

Can related bidders submit separate bids in one procurement procedure?

In Taiwan, it is not prohibited that related bidders submit separate bids in one procurement procedure. However, in general such bidders shall not engage in the following activities, or shall be punished with imprisonment up to five years or fined not more than NT$1,000,000:

  • use any other illegal means to cause the opening of tenders to have an incorrect result;
  • not to proceed with price competition by means of contract, agreement or other forms of meeting of minds, with the intent to adversely affect the price of award or to gain illegal benefits; or
  • borrow or assume any other’s name or certificate to tender, with the intent to adversely affect the result of procurement or to gain illegal benefits.

See article 87of the Act.

Negotiations with bidders

Is the use of procedures involving negotiations with bidders subject to any special conditions?

Where an entity plans to award a contract to the lowest tender but cannot do so, the entity may alternatively award the contract through negotiation, provided that such negotiation has been approved by the superior entity and announced in advance in the notice of invitation and the tender documentation.

See articles 53to 55of the Act.

If the legislation provides for more than one procedure that permits negotiations with bidders, which one is used more regularly in practice and why?

In Taiwan, articles 55to 57of the Act provide the negotiation procedure for bidders if the entity cannot grant the award.

See articles 55to 57of the Act.

Framework agreements

What are the requirements for the conclusion of a framework agreement?

The closest concept to a framework Agreement on Government Procurement in Taiwan may be the inter-entity supply contract.

An entity may execute an inter-entity supply contract with a supplier for the supply of property or services that are commonly needed by entities. According to the Regulations for the Implementation of Inter-entity Supply Contracts, this term means property or services that are commonly required by two or more entities.

The different forms of inter-entity supply contract are available in the Procurement section of the Bank of Taiwan’s website.

May a framework agreement with several suppliers be concluded?

The procedure of an inter-entity supply contract is the same as that prescribed under the Act. An entity may prescribe in the tender documentation that contracts may be awarded to different tenderers by different items or different quantities, but the spirit of competition as to the lowest price or the most advantageous tender shall be respected.

Changing members of a bidding consortium

Under which conditions may the members of a bidding consortium be changed in the course of a procurement procedure?

A bidding consortium can be changed in the course of a procurement procedure if there are fewer than five members of the consortium or if the proportion of experts and scholars is less than one-third.

Participation of small and medium-sized enterprises

Are there specific mechanisms to further the participation of small and medium-sized enterprises in the procurement procedure? Are there any rules on the division of a contract into lots? Are there rules or is there case law limiting the number of lots single bidders can be awarded?

According to the Act, the responsible entity may take into account the requirements of the relevant laws and regulations to adopt measures assisting small and medium-sized enterprises (SMEs) in contracting or subcontracting to the extent not less than a certain percentage of government procurement in value.

The responsible entity shall, acting with the Ministry of Economic Affairs, discuss with the National Assembly, the Presidential Office, the National Security Council, the five Yuans and all the first-level entities under each Yuan, and all municipal, and county (city) governments, to set the percentage of the targeted value of annual procurement of respective entities and their subordinate entities that will be contracted or subcontracted to the SMEs, and publish them in the Government Procurement Gazette within two months from the beginning of each fiscal year.

There is also the Regulations Governing Assistance for Small and Medium Enterprises Participating in Government Procurement, which was promulgated in 1999and was last amended in 2002. The Regulations set out the following:

  • in conducting a procurement, an entity may, depending on the characteristic and the scale of the procurement, prescribe that the tenderer must be an SME or encourage the tenderer to invite SMEs for subcontracting, to the extent not contrary to provisions of laws and regulations and the treaties or agreements to which Taiwan is a party; and
  • in conducting a procurement of a value not reaching the threshold for publication, SMEs shall be awarded in principle except where such SMEs are incapable of carrying out the procurement in question, their competitiveness is inadequate or their tendering prices are unreasonable, or where circumstances are prescribed about limited tendering, military procurement and emergentprocurement.

See paragraph 1of article 22, subparagraphs 1and 3of paragraph 1of article 104, and paragraph 1of article 105of the Act.

There is no specific regulation that limits the number of lots single bidders can be awarded at present.

Variant bids

What are the requirements for the admissibility of variant bids?

According to the Enforcement Rules of the Government Procurement Act, each tenderer may only submit one tender during a procurement process. If branch companies of the same company, or a parent company and its branch company, both submitting tenders is deemed as a breach of this requirement.

However, where the procurement is to be awarded to the lowest tender and the tender documentation specifies that tenderers may submit two or more proposals with the same bid price to provide a choice, this requirement does not apply.

Must a contracting authority take variant bids into account?

Apart from the exceptions mentioned in question 27, where a tenderer is found to be in breach of the foregoing conditions, the following requirements shall apply: the tender submitted by such tenderer shall not be opened when such circumstance is found before tender opening; and the tender submitted by such tenderer shall not be accepted when such circumstance is found after tender opening.

Changes to tender specifications

What are the consequences if bidders change the tender specifications or submit their own standard terms of business?

If the tendering does not comply with the requirements of the tender documentation or the content of the tender is inconsistent with the requirements of the tender documentation, an entity shall not open the tender if such circumstance is found before tender opening, nor shall it award the contract to such tenderer if such circumstance is found after tender opening.

See article 50of the Act.

Award criteria

What are the award criteria provided for in the relevant legislation?

The award of contract conducted by an entity shall adhere to one of the following principles and the principle adopted shall be specified in the tender documentation:

(i) where a government estimate is set for the procurement, a tender that meets the requirements set forth in the tender documentation and is the lowest tender within the government estimate shall be awarded;

(ii) where no government estimate is set for the procurement, a tender that not only meets the requirements set out in the tender documentation with a reasonable price, but also is the lowest tender within the budget amount shall win the bid;

(iii) the tenderer whose tender meets the requirements set forth in the tender documentation and is the most advantageous one shall win the bid; or

(iv) the tenderer may adopt multiple awards by prescribing in the tender documentation that contracts may be awarded to different tenderers by different items or different quantities, but the spirit of competition as to the lowest price or the most advantageous tender shall be respected.

Point (iii) shall only be applied to cases where tenderers are allowed to submit tenders for construction work, property and services with different qualities, and, therefore, (i) and (ii) are not suitable for application.

Where the value of a procurement reaching the threshold for publication, and the subject of procurement is professional service, technical service or information service, the award procedures of the most advantageous tender without setting a government estimate may be applied.

Abnormally low bids

What constitutes an ‘abnormally low’ bid?

If, for example, the total or a part of the offered price is so low that it evidently appears to be unreasonable, and the quality of performance is likely to be impaired or the contract is not likely to be performed in good faith, or there are any other extraordinary situations, it may constitute an ‘abnormally low’ bid. The following situations may beincluded:

  • where a government estimate is set, the total price is 20per cent less than the government estimate;
  • where there is a part of the government estimate corresponding to the part of the offered price in question, the latter is 30per cent less than the former;
  • where no government estimate is set, the total price or a part of the price is determined by a committee or evaluation committee to be unreasonably low;
  • where neither a government estimate is set nor a committee or an evaluation committee is established, the total price is 30per cent less than the budget or the estimated procurement value. Where an appropriation bill is pending for legalisation, the estimated procurement value shall govern;
  • where a part of the price is 30per cent less than the award price of the same kind of procurement conducted by other entities recently; and
  • where a part of the offered price is 30per cent less than the regular price available for reference.

See articles 79and 80of the Enforcement Rules of the Act.

What is the required process for dealing with abnormally low bids?

According to the Act, where a contract is to be awarded to the lowest tender, an entity may set a time limit for the tenderer offering the lowest tender to provide an explanation or a security. If such tenderer fails to comply before the deadline set forth by the entity, the contract may not be awarded to the tenderer, and the tenderer offering the second-lowest tender shall then be deemed as the tenderer offering the lowest tender.

Review proceedings

Relevant authorities

Which authorities may rule on review applications? Is it possible to appeal against review decisions and, if so, how?

Where the value of procurement reaches the threshold for publication, a supplier may file a written complaint with the Complaint Review Board for Government Procurement (CRBGP) as established by the responsible entity, or the municipal or the county (city) governments, depending upon whether the procurement is conducted at the level of central government or local government.

The complaining supplier shall prepare a written complaint including the following particulars and affix its signature or sealthereon:

  • the name, address and telephone number of the complaining supplier and the name, gender, birth date, and domicile or residence of the responsible person;
  • the entity that handled the protest;
  • the facts of and reasons for the complaint;
  • evidence; and
  • the year, month and day of the written complaint.

When filing a complaint, the supplier shall also provide a copy of the complaint to the entity. The entity shall present its response in writing to the competent CRBGP within 10days of the day following receipt of such copy.

If more than one authority may rule on a review application, do these authorities have the power to grant different remedies?

CRBGPs have the power to rule on the reviews of applications. If the supplier is not satisfied with such ruling, an administrative litigation can be filed to seek remedies.

Timeframe and admissibility requirements

How long do administrative or judicial proceedings for the review of procurement decisions generally take?

The CRBGP shall complete its review within 40days of the day after the date of receipt of the complaint, and shall notify the supplier and the entity of its decision in writing. If necessary, the foregoing period may be extended for another 40days.

What are the admissibility requirements?

Primarily, applicants have to follow the time limit of submitting the review application. If the application can illustrate the decision or award rendered by an entity has violated the Government Procurement Act (such as article 50and article 101), the CRBGP may make a decision favourable to the applicants.

What are the time limits in which applications for review of a procurement decision must be made?

First, a supplier may, in the period specified below, file a protest in writing with the entity if the supplier deems that the entity is in breach of laws or regulations or of a treaty or an agreement to which Taiwan is a party so as to impair the supplier’s rights or interest in a procurement where:

  • the protest is filed for the content of the tender documentation, one-quarter of the period for tendering starting from the date following the date of publication or invitation to tender and a segment of less than one day shall be counted as one day - provided that the whole period is not be less than 10days;
  • the protest is filed for the interpretations, subsequent explanations, amendments or supplements of the tender documentation, 10days from the date following the date of receipt of the notification from an entity or the date of public notice given by the entity;or
  • the protest is filed for the procedures or the outcome of the procurement, 10days from the date following the date of receipt of the notification from an entity or the day after the date of public notice given by the entity; or 10days from the day after the date when said procedures or outcome are known or can be known if such procedures or outcome are not notified or published; provided that the period shall not exceed 15days from the day following the date of the award of contract.

Subsequently, a supplier may file a written complaint with the CRBGP within 15days from the date of receipt of the disposition rendered by the entity if the supplier objects to the disposition or from the expiry of the period specified in the preceding requirements if the entity fails to settle the case within the period.

Suspensive effect

Does an application for review have an automatic suspensive effect blocking the continuation of the procurement procedure or the conclusion of the contract?

The CRBGP may, before completion of review, notify the procuring entity to suspend the procuring procedures, if necessary. Furthermore, where a procuring entity deems that a protest or complaint filed by a supplier is justifiable after reviewing the causes related thereto, the procuring entity shall nullify or change the initial result or suspend the procurement procedures, except for emergencies or public interest, or where the causes of complaint or protest are not likely to affect theprocurement.

Approximately what percentage of applications for the lifting of an automatic suspension are successful in a typical year?

There are few or no precedents of applications for lifting a suspension of a procurement procedure in the Taiwanese courts at present. On the contrary, there are some cases regarding filing suspension orders with the court.

Notification of unsuccessful bidders

Must unsuccessful bidders be notified before the contract with the successful bidder is concluded and, if so, when?

An entity shall notify each tenderer of the outcome of the review that tenders submitted in accordance with the requirements set forth in the tender documentation and provide reasons for disqualified tenderers. In addition, tenderers need not be notified to be present upon the award of contract but they must be notified of the outcome.

Access to procurement file

Is access to the procurement file granted to an applicant?

According to the Act and the Regulations for Publication of Government Procurement Notices and Government Procurement Gazette, except for extraordinary circumstances, an entity shall publish the outcome of an award on the Government Procurement Gazette and notify all tenderers in writing within a specific period of time after award of contact provided that the procurement is of a value reaching the threshold forpublication.

Disadvantaged bidders

Is it customary for disadvantaged bidders to file review applications?

From the official website of the CRBGP of Taipei City government, there were approximately 51cases dealt with by such authority in 2017.

Violations of procurement law

If a violation of procurement law is established in review proceedings, can disadvantaged bidders claim damages?

A supplier may file a protest in writing with an entity if the supplier deems that the entity is in breach of laws or regulations or of a treaty or an agreement to which Taiwan is a party so as to impair the supplier’s rights or interest in a procurement exercise.

According to article 85of the Act, where a violation of procurement law is established in review proceedings, the supplier may request the procuring entity reimburse the necessary expenses incurred by the supplier for preparing the tender and the filing of protest and review. However, the damages disadvantaged bidders could claim seems only confined to bid bond or review fees. Other than those two, there are few or no precedents of a disadvantaged bidder successfully claiming damages in a Taiwanese court at present.

May a concluded contract be cancelled or terminated following a review application of an unsuccessful bidder if the procurement procedure that led to its conclusion violated procurement law?

When any of the following circumstances are found after award or signing of the contract, the entity shall revoke the award, terminate or rescind the contract, and may claim for damages against such tenderer except where the revocation of the award or the termination or rescission of the contract is against public interests, and is approved by the superior entity:

  • the tendering does not comply with the requirements of the tender documentation;
  • the content of the tender is inconsistent with the requirements of the tender documentation;
  • the tenderer borrows or assumes another’s name or certificate to tender, or tenders with forged documents or documents with unauthorised alteration;
  • the tenderer forges documents or alters documents without authorisation in tendering;
  • the contents of the tender documents submitted by different tenderers show a substantial and unusual connection;
  • the tenderer is prohibited from participating in tendering or being awarded any contract pursuant to paragraph 1of article 103of the Act (regarding the restriction on ‘bad suppliers’); or
  • the tenderer is engaged in any other activities in breach of laws or regulations that impair the fairness of the procurement process.

Generally speaking, a contract should be void under Taiwan Civil Code if the contracting authority and a tenderer deliberately breaks the law or act against public policy or morals.

Legal protection

Is legal protection available to parties interested in the contract in case of an award without any procurement procedure?

Under Taiwanese public procurement regulations, entities must refrain from continuing an illegal direct award, and not award the contract without a proper procurement procedure. If a party’s interests have been damaged because of an authority’s breach of the Act, the relevant authority may bear liability. However, there are few precedents of a bidder successfully claiming such damages in Taiwanese courts.

Typical costs

What are the typical costs of making an application for the review of a procurement decision?

For disputes regarding invitations, evaluations of tenders, or the awards of contracts, the review fee is NT$30,000per complaint; however, no review fee shall be paid if the procuring entity nullifies or changes its disposition prior to the date of first pre-review meeting so that handling of the complaint is no longer necessary.

For the administrative litigation against the decision of the review, the typical cost will be NT$4,000per case. (See Regulation Governing Fees for the Complaint Review for Government Procurement and article 98of the Taiwan Code of Administrative Litigation Procedure.)

For disputes regarding the performance of the contract, the typical costs of the dispute resolution proceedings (including mediation, arbitration or civil litigation) will be decided by the value of the claim. (See also article 5of the Regulation Governing Fees for the Mediation for Government Procurement, article 25of the Rules on Arbitration Institution, Mediation Procedures and Fees and article 77-1and 77-13of the Taiwan Code of Civil Procedure.)

Update and trends

Update and trends

Are there any emerging trends or hot topics in public procurement regulation in your country? In particular, has the scope of applicability of public procurement law been broadened into areas not covered before (eg, sale of land) or on the contrary been restricted?

There was a proposal to change the legislation on 12October 2017. The essentials regarding the amendments are as follows:

  • to establish procurement review unit(s) assisting the review of documents and consultation in procurement affairs, so as to promote the efficiency and effectiveness of government procurement operation;
  • to lift the limitation of most advantageous tender, so as to extend the discretion of the procuring entity when conducting the award of contract;
  • to aggravate the penalties of suppliers offering the procuring entities commission, percentage, brokerage, kickback, or any other unjust benefits; and
  • to amend the requirements that suppliers to be published on Government Procurement Gazette, offering them the chance to provide an explanation.