On March 21, 2008, Ministry of Housing and Urban-Rural Development promulgated Administrative Measures for Design Bidding of Construction Project Schemes(the “Measures”), which has taken into effective on May 1, 2008. Measures are specially drafted regulations for construction project schemes after Invitation and Submission of Bids Law and Regulation on Invitation and Submission of Bids for Survey and Design of Construction Projects Measures are promulgated. Wang Zaosheng, deputy director of Construction Market Administration Department, believed that the Measures are professional, integrated, easy-operative provisions for solving problems in the domestic construction design market, such as tenderees award bidding which price is lowest, owners use design with no compensation and appearance-focused design schemes.

I. Characteristics of the Measures
There are already some laws and regulations for construction bidding. Article 16 of Construction Law provides that invitation to tender and bidding of the tender of contract issuance and contracting of a construction project shall follow the principle of openness, fairness and equal competition and the contracting unit shall be selected on merit. Chapter 3 of Administrative Regulation on Survey and Design of Construction Projects regulates survey and design of construction projects. Invitation and Submission of Bids Law has provisions on different kinds of invitations and bidding and their processes. Regulation on Invitation and Submission of Bids for Survey and Design of Construction Projects Measures, promulgated on August 1, 2003, not only has similar name with the Measures, but also have many same-wording provisions with the Measures. The measures are drafted on the basis of the above-mentioned laws and regulations and revised and established certain provisions according to some special ci rcumstances in China’s construction projects design field. If these new provisions conflict with the above laws and regulations, the Measure shall prevail under the principle of “higher norms prevail over lower norms, new norms prevail over old norms”. On the other hand, the Measures are not all-around provisions for design bidding of construction projects, which means that some other laws and regulations shall also be applied when dealing with certain problems. For instance, the Measures only set conduct codes but have no punishment rules, which shall be inferred to Regulation on Invitation and Submission of Bids for Survey and Design of Construction Projects Measures. In addition, the Measures have 11 annexes, covering all kinds of documents necessary for design bidding of construction projects, such as bidding management processes, bidding conditions, preliminary qualification examination, processes for opening bid, in order to guideline specific works, which is not seen in the previous laws and regulations.

II. Relevant Provisions on Design Bidding of Construction Projects Schemes

1. Types of Design Bidding
Article 11 provides that based on design conditions and design depth, the design bidding of construction project schemes can be divided into the design bidding of conceptual construction project schemes and the design bidding of implementation construction project schemes. However, the Measures have no interpretation for the two terms. According to general understanding, design bidding of conceptual construction project schemes focuses more on style, appearance, space arrangement, ideas and others, but design bidding of implementation construction project schemes focuses more on specific design. It should be noted that Article 7 of Regulation on Invitation and Submission of Bids for Survey and Design of Construction Projects Measures provides that tenderee may have one-time met for the whole design bidding or met for design bidding of specific stage or sub-project on the basis that integration and continuity is not destroyed. These are issues that tenderees must take into consideration.

2. Preliminary Qualification Examination
Laws and regulations promulgated before the Measures also mentioned preliminary qualification examination, but the provisions in the Measures are more specific and strict, so as to prevent tenderee from excluding potential tenders. The Measures provide that preliminary qualification examination can be made for the bidding of a large-sized public construction project or a construction project for which the quantity of tenderers making applications is large. If the preliminary qualification examination will be made, the tenderee shall explicitly indicate this in the bidding announcement, and send out preliminary qualification examination documents. Under the circumstance that the quantity of tenderers is large and the preliminary qualification examination of tenderers will be made, the tenderee shall specify the quantity of tenderers making applications necessary for preliminary qualification examination. The preliminary qualification examination shall be conducted by professionals. The method of scoring shall not be adopted for preliminary qualification examination, and there is only the division of “pass” and “failure”. If the quantity of tenderers that pass preliminary qualification examination is less than three, the tenderee shall revise and promulgate new preliminary qualification examination conditions and conduct a new preliminary qualification examination until there are three or more tenderers that have passed preliminary qualification examination.

3. Invitation documents
As to invitation documents, Article 17 has brief provisions, saying that invitation documents mainly include instructions to tenderers, requirements relating to technical bidding documents, requirements relating to commercial bidding documents, standards for evaluation and award of bid and descriptions of relevant methods, and instructions about award of design contract and compensations for bidding. Further, For a large-sized public construction project invested in by government or state-owned capital, the tenderee shall, in the bid invitation documents, specify that the design schemes for bidding shall contain special topics on functions, energy saving, building costs and operational costs and others of the project.

Compensation for bidding is a breakthrough and is a must item in invitation documents. Meanwhile, Article 38 has corresponding provisions, saying that tenders whose designs have reached requirements of the bidding documents but are not awarded the bid shall be compensated according to different extent. Article 38 also provides that tenderees may set several levels of compensation according to specific circumstances. However, according to Article 44 of Regulation on Invitation and Submission of Bids for Survey and Design of Construction Projects, whether tenderees specify in the bidding documents compensation for bidding is of tenderees’ choice and tenders will only be compensated if bidding documents so stipulate. Provisions in the Measure are obviously more beneficial for the interests of the tenders and shall be impetus for more excellent design works.

III. Relevant Provisions for Design Bidding of Construction Projects Schmes

1. Qualifications of Tenders
In order to avoid some tenderees’ pursuit of foreign designs, Article 20(1) ii stipulates qualifications for foreign enterprises, namely, they shall be members recommended by the construction design trade association or organization of the home country or region of the enterprise and the name list of enterprises recommended by the said trade association or organization shall be confirmed by the construction entity. Article 21 provides that in the case of international bidding, no conditions may be set to exclude domestic tenderers.

2. Alternative Schemes
Article 23 provides that if a tenderee requires tenderers to submit an alternative scheme, it shall specify corresponding measures for assessment and selection through comparison in the bid invitation documents. If the bid invitation documents do not explicitly permit an alterative scheme, no tenderer may submit an alternative scheme. If a tenderer voluntarily submits an alternative scheme, the tenderee shall refuse all the schemes submitted by that tenderer. Please also pay attention to Article 35 of Regulation on Invitation and Submission of Bids for Survey and Design of Construction Projects, which regulates that tenderer’s alternative scheme will not be taken into consideration if it is not conform with the awarding conditions.

IV. Bid Opening, Evaluation and Award

1. Void Bidding
The Measures add provisions for void bidding, which are divided from some circumstances of abandoned bidding. Article 26 of the Measures regulate that bid documents shall be regarded as void and shall be rejected by the tenderee if bid documents are submitted after the deadline or to a non-designated address, or bid documents are not sealed as required by bid invitation documents. Void bidding, abandoned bidding and re-bidding circumstances are different from each other in that void bidding is for tending not in conformity with the procedural requirements, abandoned bidding is for tendering documents not inconformity with the formal requirements and re-bidding is for tendering requirements no in conformity with material requirements.

2. Bid Evaluation Committee
Provisions on bid evaluation committee focuses more on evaluation standard, evaluation methods and some rules that should be observed during evaluation. Article 28 of the Measures stipulates evaluation standards for the first time, which include the following aspects: 1. analyze and evaluate whether the design conforms with requirements in technical rules and standards; 2. comprehensively evaluative quality of the design and its compatibility with the bidding objectives; 3. analyze and evaluate the social, economic and environmental impact; 4. analyze and evaluate the safety and rationalization of the structure design; 5. analyze and evaluate the rationalization of the estimated costs for implementation; 6. analyze and evaluate accuracy of the design and its economic and technical indexes; 7. analyze and evaluate measures for guarantee the design quality, assistance the construction and provision of excellent services; 8. determine abandoned or rejected bidding .

Evaluation methods include signed voting, sequence and comprehensive evaluation method, which shall be determined by tenderers according to practical circumstances. Comprehensive evaluation have similar provisions in Regulation on Invitation and Submission of Bids for Survey and Design of Construction Projects, namely, the committee will determine the achievements, honor and professional skills of the survey and the excellence of the survey and design schemes on basis of the evaluation standard and methods, approved proposals, feasibility study reports or approval documents for the previous stage.

The Measures regulate that tenderers shall guarantee that experts shall be given enough time to review the tendering documents and that time period for reviewing the tendering schemes shall be compatible with the difficulty, design extent, numbers of valid bid and schemes. Evaluation shall be hosted by the personal responsible for the evaluation committee, who shall be an experienced technical expert of the committee. A notetaker shall also be chosen from the committee. In addition, the Measures also regulate that, for the influential or marked building invested or financed by the state, tenderers may invite representative from People’s Congress or Political Consultative Conference or from the general public to participate in the evaluation. But the above representatives shall not put forward any evaluation opinion or interfere in any way the independent work of the evaluation committee. This provision is novel. But it is a question that how could the general public expresses their opinion while not interfering with evaluation committee’s work, as they do not have the mechanism of People’s Congress or Political Consultative Conference to assist them.

As to the composition of the members, Article 37 of Invitation and Submission of Bids Law and Provisional Rules for Bid Evaluation Committee and Evaluation Methods have provisions concerning qualifications of the members, which shall be applied together with Article 27 of the Measures concerning numbers and proportion of the bid evaluation committee.

3. Special Provisions Concerning Large-sized Public Construction Project
Scope of large-sized public construction project is specified in Article 3 of Administrative Opinions for Enhancement of the Construction of Large-sized Public Construction Project. The Measures have special provisions for choice of the evaluation committee members and evaluation processes in the large-sized public construction project. Article 27(3) of the Measures provides that for a large-sized public construction project, if experts selected at random are incompetent , upon approval of the competent administrative department, the tenderee can directly determine experts from the senior expert bank of the design category or invite experts from other regions or countries to participate in the evaluation. Article 30 of the Measures provides that tenderee may conduct special technical proof in the evaluation in respect of planning, safety, techniques, economy, structure, environmental protection, energy saving and others for the large-sized public construction projects such as 1. in the main dis trict and along the main sightseeing roads, whether the design scheme is compatible with surrounding environment; 2. having uncertainties in the design scheme concerning safety, techniques, economy, structure, environmental protection, energy saving and others; 3. having special requirements.

V. Others

Article 40 of the Measures regulates intellectual property issues relevant to the bidding, including copyright of the tenderer, tenderee and winner’s right to use the award(including the technical achievements) and winner’s gurantee of no right defects. According to the provisions of Article 40, tenderee shall not transfer design scheme to any third party or use it for purposes other than the bidding; tenderee or winner shall acquire prior written consent and pay license fees before use of any technical achievements proposed by any tenderers; winner shall guarantee that tenderee will not be sued or claimed by any third party when using winner’s design scheme.