2. Application of the Statutory Procurement Laws
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2. Application of the Statutory Procurement Laws Start Comparison
a. Which public agencies are covered by the laws?

According to Article 3 of the GPL, public procurement conducted by any government agency, public school or government-owned enterprise (entity) will be governed by the GPL. For instance, CPC Taiwan Corporation, the largest state-owned petroleum company in Taiwan, is subject to the GPL.

b. Which private entities are covered by the laws?

According to Article 4 of the GPL, a juridical person or organization which takes a grant of more than NTD 1 million from an entity should conduct procurement in accordance with the GPL provided that the amount of the grant is not less than half of the procurement value and also reaches the threshold for publication. For instance, in the case that a government agency delegates a private company to hold a public event and the cost afforded by the agency reaches 1 million as well as half of the total cost, the GPL will apply.

c. Are co-operations between contracting authorities exempted from public procurement law? If so, what are the conditions for the exemption?

A co-operation between public bodies will be exempted from GPL in the following conditions:

  • when a government agency delegates its power to the subordinate authorities
  • when a government agency requires another authority to assist with conducting certain work and reimburse or share the cost later on
  • other types of co-operations prescribed by laws
d. Which types of contracts are covered?

According to Article 7 of the GPL, the public procurement includes construction work, property and services. As such, the contracts for the construction work, property and services are covered in the GPL.

e. How are changes to an existing contract dealt with? Do changes require a new procurement procedure?

The GPL does not specifically provide for changes to an existing government contract. In practice, a government procurement contract usually stipulates the relevant requirements in which changes to the contract should be made in accordance with. Changes do not necessarily require a new procurement procedure.

f. What is the applicable regime for framework agreements?

The GPL does not have provisions that specifically refer to a "framework agreement." However, under Article 39 of the GPL, when conducting procurement, an entity may entrust a supplier with the project management related to planning, design, supply, or contract performance. This type of provision may be similar to a framework agreement.

g. What is the applicable regime for public-private partnerships (PPPs)?

PPP Projects associated with infrastructure fall under the realm of the "Act for Promotion of Private Participation in Infrastructure Projects" (Promotion Act), promulgated in 2000. Specifically, the following 7 types of PPP models are subject to the Promotion Act instead of the GPL:

  • the private institution invests in the construction and operation of new infrastructure, and following the expiration of the operation period, transfers the ownership of the infrastructure to the government.
  • the private institution invests in the construction of the infrastructure and following the completion of the construction, relinquishes the ownership to the government without compensation. The government then lets the private institution operate the infrastructure. Following the expiration of the operation period, the right to operate reverts to the government.
  • the private institution invests in the construction of the infrastructure. Following the completion of the construction, the government acquires the ownership by paying the construction expenses in a lump sum or in installments. The government then lets the private institution operate the infrastructure. Following the expiration of the operation period, the right to operate reverts to the government.
  • the private institution invests in the extension, reconstruction and/or repair of existing infrastructure, and operates the infrastructure. Following the expiration of the operation period, the right to operate reverts to the government.
  • the private institution operates infrastructure built with investment from the government. Following the expiration of the operation period, the right to operate reverts to the government.
  • to support the national policy, the private institution invests in the construction of infrastructure on private land provided by the private institution itself, has the ownership thereof following the completion of the construction, and then operates the infrastructure itself or commissions a third party to operate it.
  • any other method approved by the competent authority.
h. How are concessions dealt with?

For procurements conducted in accordance with the GPL, no concession of rights will be granted from the procuring entities. Instead of the GPL, PPP models in which concession of certain rights is a vital part fall under the realm of the Promotion Act. As a result, the general procurement provisions will not apply. Pursuant to Article 44 of the Promotion Act, the authority in charge shall organize a Selection Committee which shall establish the evaluation criteria based on the purpose of the infrastructure project concerned, examine and evaluate the materials submitted by the applicants on a fair basis and then select the best applicant therefrom within the evaluation period.

i. Are there anti-avoidance rules (including laws on bid rigging)?

Yes, Articles 87 and 88 of the GPL set forth the anti-avoidance rules. Under Article 87 of the GPL, the following are crimes:

  • a person commits violence or threat, administers drugs, or applies hypnosis with the intent to cause a supplier not to tender or to tender contrary to its real intention, or cause the winning tenderer to forego the award or to assign or subcontract after the award.
  • a person commits fraud or uses any other illegal means to cause the supplier to be unable to tender or cause the opening of tenders to have an incorrect result.
  • a person causes the supplier not to tender or 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 the award or to gain illegal benefits.
  • a person borrows or assumes another's name or certificate to tender, with the intent to adversely affect the result of the procurement or to gain illegal benefits.

Article 88 of the GPL further provides that it is a crime if personnel from a supplier who is entrusted by an entity to conduct planning, design, review, monitoring, project management, or procurement imposes unlawful restrictions or review on the technologies, technical methodology, materials, equipment, or specifications with the intent to gain personal illegal benefits and thereby obtains benefits.

Further, the Fair Trade Law in Taiwan provides regulations, such as Article 24, regarding punishment for anti-competitive conduct.