4. Bidder Selection
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4. Bidder Selection Start Comparison
a. Are there any rules on the selection criteria?

Article 52 of the GPL states that the award of a contract conducted by an entity shall follow one of the following principles and the principle adopted shall be specified in the tender documentation:

  • where a government estimate is set for the procurement, a tenderer whose tender meets the requirements set forth in the tender documentation and is the lowest tender within the government estimate shall be awarded (the principle of the lowest tender when a government estimate is set).
  • where no government estimate is set for the procurement, a tenderer whose tender not only meets the requirements set forth in the tender documentation with a reasonable price, but is also the lowest tender within the budget amount shall be the winning tenderer (the principle of the lowest tender when a government estimate is not set).
  • the tenderer whose tender meets the requirements set forth in the tender documentation and is the most advantageous one shall be the winning tenderer (the principle of the most advantageous tender).
  • in the case that an entity prescribes in the tender documentation that contracts may be awarded to different tenderers for different items or different quantities, the spirit of competition as to the lowest price or the most advantageous tender shall be respected (a mixture of principle of the lowest and the most advantageous tender).
b. Is prequalification an option? If so, what are the requirements? What is the procedure?

Prequalification is an option. According to Article 18 (2) of the GPL, the procuring entity may conduct "selective tendering procedures" under which a public notice is given to invite all interested suppliers to submit their qualification documents for a pre-qualification evaluation based upon specific qualification requirements and, after the evaluation, the qualified suppliers are invited to tender.

Article 20 of the GPL provides for the requirements as follows:

"Under any of the following circumstances, an entity may apply selective tendering procedures to a procurement of a value reaching the threshold for publication:

  1. where there is a recurring demand
  2. where the review of tenders takes a long time
  3. where the supplier's cost to prepare for a tender is high
  4. where the qualification requirements for suppliers are complicated
  5. where it is a procurement concerning research and development."

Article 21 of the GPL provides for the procedures as follows:

"In order to apply the selective tendering procedures, an entity may conduct a qualification evaluation in advance and establish a permanent list of qualified suppliers; provided, however, that the entity shall always allow suppliers to request a qualification evaluation and periodically review and update the permanent list of qualified suppliers."

d. Do “blacklists” for bidders exist? If so, what are the conditions for unlisting?

According to Article 101 of the GPL, suppliers in one of the following situations will be notified by the procuring entity that if the suppliers fail to protest the notification within 20 days after receiving the notification, they will be published in the Government Procurement Gazette:

  1. where the supplier allows any others to borrow its name or certificate to participate in a tender
  2. where the supplier borrows or assumes any other's name or certificate or uses forged documents or documents with unauthorized alteration to tendering, contracting, or performing a contract
  3. where the supplier has substantially reduced the work or materials without obtaining a prior approval
  4. where the supplier forges or alters without authorization documents related to tendering, contracting, or contract
  5. where the supplier participates in tendering during the period when its business operation has been suspended because of a disciplinary action
  6. where the supplier has committed any of the offenses prescribed as violations of comparative bidding in Articles 87 to 92 of the GPL hereof, and has been sentenced by a court of the first instance
  7. where the supplier refuses to execute a contract without due cause after the award
  8. where an inspection indicates any serious non-conformity with the contractual requirements
  9. where the supplier does not fulfil its obligation of guarantee after inspection and acceptance
  10. where the time limit for contract performance is seriously delayed due to causes attributable to the supplier
  11. where the supplier is in breach of the requirements of Article 65 by assigning a contract to others
  12. where a contract is rescinded or terminated for causes attributable to the supplier
  13. where the supplier is undergoing a bankruptcy procedure
  14. where the supplier seriously discriminates against women, aborigines, or persons from disadvantaged groups.

For situations 1 to 5 or a sentence of imprisonment under situation 6, a supplier whose name has been published in the Government Procurement Gazette is prohibited from participating in tendering, or being awarded or sub-contracted within 3 years. As to situations 7 to 14 or imposition of detention, fine, or probation under situation 6, the period in which the suppliers are prohibited to participate in the tendering is 1 year following publication. However, in the case that the original disciplinary action or the judgment has been overruled and that the overruling judgment becomes final, the supplier should be removed from the blacklist.

e. Does the involvement of a company in the set-up of a procurement procedure exclude the company from said procedure due to conflict of interest?

Yes. Article 39 of the GPL states that the supplier entrusted with the project management and the supplier handling the planning, design, construction or supply shall not be affiliated with each other or affiliated with the same other enterprise.

f. Can bidders combine to submit a bid (bidder consortia)? What limitations apply?

According to Article 25 of the GPL, the procurement entity may, by the provisions set forth in the tender documentation, allow the bidders to combine to submit a bid depending on the characteristics of an individual procurement. However, the joint tendering should only be permitted where it can increase the competition among suppliers or not restrain competition without due cause. Article 25 of the GPL also regulates that a joint tendering by suppliers in the same line of business shall meet the following requirements set forth in the Fair Trade Act:

  • where the joint tendering should be able to unify the specifications or models of goods or services for the purpose of reducing costs, improving quality, or increasing efficiency
  • where the joint tendering should be able to promote research and development for goods, services, or markets for the purpose of upgrading technology, improving quality, reducing costs, or increasing efficiency
  • where each of the suppliers should be able to develop a separate and specialized area for the purpose of rationalizing operations
  • in the case that the suppliers enter into agreements concerning solely the competition in foreign markets for the purpose of securing or promoting exports
  • where joint acts with regard to the importation of foreign goods, or services for the purpose of strengthening trade
  • where joint acts limiting the quantity of production and sales, equipment, or prices for the purpose of meeting the demand in an orderly way, because of an economic downturn, that the enterprises in the same industry have difficulty maintaining their business or encounter a situation of overproduction
  • where joint acts for the purpose of improving operational efficiency or strengthening the competitiveness of small and medium enterprises
  • where joint acts required for the purpose of improving industrial development, technological innovation, or operational efficiency.
g. Can members of a bidder consortium be changed during a procurement procedure?

Generally, no. During the tendering procedures, the bidder consortium is not allowed to change its members if its bidding documents have been submitted to the procuring entity. Regarding after the contract is awarded, under Article 10 and 11 of the Regulations for Joint Tendering, in the case that a member supplier becomes insolvent or has encountered serious problems to the extent that the member can no longer jointly fulfil the contract, other member suppliers participating in a joint tendering may, with prior approval of the entity, jointly provide another qualified supplier who has the equivalent qualification as the original member supplier to jointly execute the rights and responsibilities of the contract.

h. Do limitations apply for participation of related bidders in the same procurement procedure with competitive bids?

Under Article 33 of the Enforcement Rules of the GPL, there shall be only one tender submitted by each tenderer for each procurement. In the case of violation, the submitted tender will either not be opened or not accepted. According to an interpretation made by the competent authority, the Public Construction Commission (PCC), the following participation of the related bidders will be deemed as an identical tender:

  1. where two branches of the same parent company participate in the same tender process
  2. where the parent company and its branch participate in the same tender process
  3. where three delegated companies from the same licensing company participate in the same tender process.

However, the situations below do not constitute a violation of Article 33 of the Enforcement Rules of the GPL under the PCC's interpretations of the GPL:

  1. where more than or equal to 3 domestic agents or dealers of the same foreign supplier participate in the same tender process
  2. where both the manufacturer and the dealer of the same product participate in the same tender process, provided that there is no further misconduct between the two entities
  3. where two legally and operationally independent property and life insurance companies from the same holding company participate in the same tender process.
i. Is there a special regulation or a special requirement for a foreign company to participate in a procurement procedure?

According to Article 17 of the GPL, for foreign companies originating from a country with which Taiwan has signed a treaty or an agreement, the terms and conditions listed in the treaty or the agreement will be applicable to their participation in the tender process. On the other hand, for foreign companies not originating from a country with which Taiwan has a treaty or agreement, the procuring entity may state in the tender documentation that the "equality rule" in the GPL will not apply.

With regard to the formality, the qualifications of the supplier and the qualification documents to be submitted by foreign suppliers may be prescribed separately in the tender documentation based on actual needs. A notarized or certified Chinese translation should be attached to the qualification document as required above.