the Ministry of Finance

Order of the Ministry of Finance of the People’s Republic of China

No. 18

The “Measures for the Administration of Tenders and Invitations to Bid in Government Procurement of Goods and Services”, which have
been discussed and adopted at the ministerial affairs meeting, are hereby promulgated, and shall go into effect as of September 11,
2004.

Minister of the Ministry of Finance Jin Renqing

August 11, 2004

Measures for the Administration of Tenders and Invitations to Bid in Government Procurement of Goods and Services

Chapter I General Provisions

Article 1

In order to regulate the procurement activities of the parties involved in government procurement, intensify the supervision and administration
of tenders and invitations to bid in government procurement of goods and services, maintain public interests as well as the lawful
rights and interests of the parties involved in tenders and invitations to bid in government procurement, the present Measures are
hereby enacted in accordance with the “Government Procurement Law of the People’s Republic of China” (hereinafter referred to as
the Government Procurement Law) and other relevant laws

Article 2

These Measures shall apply to tenders and invitations to bid in government procurement of goods or services (hereinafter referred
to as “goods or services”) carried out by any purchaser or procurement agency (hereinafter uniformly referred to as “bid-invitation
procurement entity”).

The procurement agency mentioned in the preceding paragraph means an institution in charge of centralized procurement or any other
lawfully accredited procurement agency.

Article 3

Invitations to bid concerning goods or services may be classified into public invitations to bid and invitation-based tenders for
bid.

A public invitation for bid means that a bid-invitation procurement entity lawfully invites uncertain suppliers to bid by announcement.

An invitation-based tender for bid means that a bid-invitation procurement entity lawfully and randomly selects three or more suppliers
from the qualified ones, whom are invited by an invitation letter to bid.

Article 4

Goods or services must be procured by public invitation for bid if a procurement item reaches the amount limitation for public invitation
for bid. If, due to a particular circumstance, a method other than public invitation for bid needs to be adopted, the party concerned
shall, prior to the beginning of procurement, win approval from the finance department of the people’s government at the level of
a city with subordinate districts or at the level of an autonomous prefecture or above.

Article 5

A bid-invitation procurement entity may not break up the whole into parts in respect of the goods or services to be procured by public
invitation for bid, or avoid procurement under public invitation to bid by any other means.

Article 6

No entity or individual may impede or restrict suppliers from free participation in bidding activities concerning goods and services,
may not designate the brand of goods, the supplier of services or the procurement agency, or illegally interfere with tenders and
invitations to bid concerning goods and services by any other means.

Article 7

If, in a tender or invitation for bid concerning goods and services, any staff member of a procurement entity that invites bids, any
member of the bid evaluation committee or any other related person has an interest with the suppliers, he must withdraw. If a supplier
alleges that any of the aforementioned persons has an interest with any other supplier, it may apply for his withdrawal.

Article 8

The suppliers participating in the bids for supply of goods or services under government procurement (hereinafter referred to as “bidders”),
shall be domestic suppliers who supply domestic goods or services. If laws and administrative regulations prescribe that foreign
suppliers may participate in tenders and invitations to bid concerning goods and services, they may participate.

If a foreign supplier lawfully participates in the bid for the supply of goods and services, it shall abide by the provisions in these
Measures.

Article 9

The tenders and invitations to bid concerning goods and services shall be beneficial to achieving the targets of economic and social
development policies of the state, including protecting environment, supporting undeveloped regions and minorities regions, and promoting
the development of small-and medium-sized enterprises, and so on.

Article 10

The finance department of each people’s government at the county level or above shall lawfully perform its supervision and administration
duties over the tenders and invitations to bid concerning goods and services.

Chapter II Invitations to Bid

Article 11

A bid-invitation procurement entity shall organize and arrange the activities of tenders and invitations to bid concerning goods and
services in accordance with these Measures.

A purchaser may lawfully entrust a procurement agency to handle an invitation for bid concerning goods or services, or may discretionally
organize and arrange the invitation for bid concerning goods or services, provided that it must fulfill the conditions prescribed
in Article 12 of these Measures.

An institution of centralized procurement shall independently arrange an invitation for bid for the supply of goods or services in
accordance with the law. Other procurement agencies shall handle the matters in the invitation for bid concerning goods or services
upon entrustment of the purchaser.

Article 12

Where a purchaser meets the following conditions, it may organize an invitation for bid at its own discretion:

(1)

Having independent capacity to bear civil liabilities;

(2)

Having the capacities of compiling bid-invitation documents and organizing the offer, and having procurement and management staff
members in the areas of technology, economy, etc. who are suitable for the project scale and complexity of the procurement in the
invitation for bid;

(3)

The purchaser has participated in the government procurement training held by the finance department of the people’s government at
the provincial level or above.

Where a purchaser fails to fulfill the conditions prescribed in the preceding paragraph, it must entrust a procurement agency to invite
bids on its behalf.

Article 13

Where a purchaser entrusts a procurement agency to invite bids on its behalf, it shall conclude an agency agreement with the procurement
agency in which the entrusted affairs are specified and the rights and obligations of both parties are included.

Article 14

Where the procurement of goods and services is carried out in the form of public invitation for bid, the bid-invitation procurement
entity must promulgate a bid-invitation announcement through a medium designated by the public finance department for releasing government
procurement information.

Article 15

Where the procurement of goods and services is carried out in the form of invitation-based tender for bid, the bid-invitation procurement
entity shall promulgate an announcement on preliminary qualification examination through a medium designated by the finance department
of the people’s government at the provincial level or above for releasing government procurement information, and promulgate the
qualifications of the bidders. The period of the announcement shall be no less than 7 workdays.

The bidders shall, 3 working days prior to the expiration of the announcement period for pre-examination of qualifications, submit
the qualification certificates as required by the announcement. The bid-invitation procurement entity shall randomly select at least
three bidders from those who are qualified upon examination, and shall send them bid-invitation documents.

Article 16

Where the procurement of goods and services is carried out in the form of invitation for bid, the time period from the issuance of
bid-invitation documents to the bid submission deadline shall be no less than 20 days.

Article 17

An announcement on public invitation for bid shall mainly include the following:

(1)

name, address and contact method of the bid-invitation procurement entity;

(2)

names and number of the bid projects, or the nature of the bid projects;

(3)

qualification requirements for the bidders;

(4)

time, place and method of obtaining bid-invitation documents, as well as the price of the bid-invitation documents; and

(5)

deadline for bidding, time and place for opening of bid.

Article 18

A bid-invitation procurement entity shall compile the bid-invitation documents in light of the characteristics and requirements of
the bid projects. The bid-invitation documents shall include the following:

(1)

An invitation for bid;

(2)

Instructions to bidders (including sealing, signing and stamping requirements, etc.);

(3)

Certificates of qualification and creditworthiness that ought to be submitted by the bidders;

(4)

Requirements on quoting bidding prices and compiling bidding documents, and method of paying bid bond;

(5)

Technical specifications, requirements and number of bid projects, including annexes and drawings, etc.;

(6)

Main contract clauses and method of concluding contracts;

(7)

Time of delivery of goods or provision of services;

(8)

Bid evaluation method, bid evaluation standards and clauses of invalidating bids;

(9)

Deadline for bidding, time and place for opening of bid; and

(10)

Other particulars prescribed by the finance department at the provincial level or above.

The tenderee shall prescribe and indicate the substantive requirements and conditions in the bid-invitation documents.

Article 19

The bid-invitation procurement entity shall make paper bid-invitation documents, and may also, through a network medium designated
by the finance department, promulgate electronic bid-invitation documents which shall be consistent with the former. The electronic
bid-invitation documents shall have the same legal binding force as the paper ones.

Article 20

The bid-invitation procurement entity may require the bidders to submit alternative bid proposals as required by the bid-invitation
documents, provided that it shall state the fact in the bid-invitation documents, and clarify the corresponding evaluation standards
and treatment measures.

Article 21

All technical standards stated in the bid-invitation documents shall meet the compulsory national standards.

The bid-invitation documents may not require or indicate certain bidders or products, or contain tendentious contents or other contents
excluding potential bidders.

Article 22

A bid-invitation procurement entity may, as circumstances demand, ask relevant experts or suppliers for opinions regarding the bid-invitation
documents.

Article 23

The price of the bid-invitation documents shall be determined pursuant to the principles of covering the costs of printing such documents,
and may not aim at seeking profits, nor may the sum of money for procurement be regarded as the basis for determining the price of
the bid-invitation documents.

Article 24

A bid-invitation procurement entity may not terminate its invitation for bid without authorization after having promulgated the announcement
on the invitation for bid and sent the invitation letter or the bid-invitation documents to bidders.

Article 25

A bid-invitation procurement entity may, in light of the specific circumstance of the procurement project in the invitation for bid,
organize potential bidders to make on-site inspections, or convene a meeting for answering questions prior to the opening of bid,
but may not solely or separately organize any on-site inspection which is participated in by one bidder.

Article 26

Before the opening of bid, neither the bid-invitation procurement entity nor the relevant staff members may disclose to others the
names or number of the potential bidders who have obtained the bid-invitation documents, or other relevant information on tenders
and invitations to bid which might affect fair competition.

Article 27

Where a bid-invitation procurement entity makes necessary clarification or modification to the already sent bid-invitation documents,
it shall, at least 15 days prior to the submission deadline of bidding documents as required by the bid-invitation documents, promulgate
a modified announcement through a medium designated by the finance department to release government procurement information, and
notify in writing all recipients of the bid-invitation documents. Such clarified or modified contents shall be the integral parts
of the bid-invitation documents.

Article 28

A bid-invitation procurement entity may, in light of the specific circumstance of the procurement, extend the deadline for bidding
and the time for opening of bid, provided that it shall, at least three days prior to the submission deadline of the bidding documents
as required by the bid-invitation documents, notify the modified time in writing to all recipients of the bid-invitation documents,
and promulgate a modification announcement through a medium designated by the finance department to release government procurement
information.

Chapter III Tenders for Bid

Article 29

A bidder is a legal person, other organization or natural person who responds to the invitation for bid, meets the qualifications
as stated in the bid-invitation documents, and participates in the bidding competition.

Article 30

A bidder shall compile bidding documents according to the requirements in the bid-invitation documents. The bidding documents shall
substantively respond to the requirements and conditions proposed by the bid-invitation documents.

The bidding documents shall be composed of the commercial part, technical part, price part and other parts.

Article 31

A bidder shall, prior to the submission deadline of bidding documents as required in the bid-invitation documents, submit the sealed
bidding documents to the bidding place. The bid-invitation procurement entity shall sign to acknowledge the receipt of the bidding
documents and preserve them. No entity or individual may unseal the bidding documents prior to the opening of bid.

If the bidding documents are submitted after the submission deadline as required in the bid-invitation documents, they shall be invalid
bidding documents. The bid-invitation procurement entity shall refuse to receive them.

Article 32

A bidder may, prior to the deadline for bidding, make supplements or modification to or withdraw the submitted bidding documents,
and notify in writing the bid-invitation procurement entity. The supplemented and modified contents shall be signed and affixed with
a stamp by the bidder as required by the bid-invitation documents, and be regarded as an integral part of the bidding documents.

Article 33

Where a bidder plans to, in light of the practical situation of the procurement project stated in the bid-invitation documents, deliver
the non-principal or non-key tasks of the bid-winning project to others for completion after winning the bid, it shall state such
delivery in the bidding documents.

Article 34

Two or more suppliers may form a bidding consortium, and submit a bid in the identity of one bidder.

In the event of bidding in the form of consortium, each party to the consortium shall fulfill the conditions prescribed in Paragraph
1 of Article 22 of the Government Procurement Law. If the purchaser prescribes certain conditions on bidders on the basis of the
particular requirements of the procurement project, at least one party to the consortium shall meets the certain conditions prescribed
by the purchaser.

All parties to the consortium shall conclude a joint bidding agreement, clearly stipulating the tasks and duties of each party to
the consortium, and submit the joint bidding agreement along with the bidding documents to the bid-invitation procurement entity.
After all parties to the consortium have signed the joint bidding agreement, none of them may solely bid for the same project in
its own name, or form a new consortium to bid for the same project.

The bid-invitation procurement entity may not compel bidders to form a consortium for joint bidding, nor may it restrict competition
among bidders .

Article 35

The bidders may not collude with each other to submit bids and quote prices, nor may they impede the fair competition of other bidders,
or infringe upon the legitimate rights and interests of the bid-invitation procurement entity or those of other bidders.

No bidder may seek for winning of bid by offering briberies to the bid-invitation procurement entity or any member of the bid evaluation
committee, or by other improper means.

Article 36

The bid-invitation procurement entity shall clarify in the bid-invitation documents the sum of guaranty bond for bidding and the method
of payment. The sum of bid bond as stipulated by the bid-invitation procurement entity may not exceed 1% of the budgetary estimate
of the procurement project.

When submitting a bid, a bidder shall pay the bid bond pursuant to the bid-invitation documents. The bid bond may be paid in the form
of cash, check, bank drafts, bank guarantee, etc. If a bidder fails to pay the bid bond pursuant to the requirements in the bid-invitation
documents, the bid-invitation procurement entity shall refuse to receive such bidder’s bidding documents.

Where a consortium submits a bid, the bid bond may be paid either by one party to the consortium or jointly by all the parties. If
the bid bond is paid in the name of one party, it shall be binding upon all parties to the consortium.

Article 37

The bid-invitation procurement entity shall, within 5 working days after the notification of award, refund the bid bond paid by the
suppliers who do not win the bid, and within 5 working days after the conclusion of the procurement contract, refund the bid bond
paid by the bid-winning supplier. If the bid-invitation procurement entity fails to refund the bid bond within the time limit, it
shall, in addition to refunding the principal of the bid bond, pay a fund possession fee at the rate after increasing 20% of the
loan interest rate of commercial banks of the corresponding period.

Chapter IV Opening of Bid, Bid Evaluation and Determination of Bid

Article 38

An opening of bid shall be done publicly at the submission deadline of the bidding documents as determined in the bid-invitation documents;
the place for opening of bid shall be the place pre-determined in the bid-invitation documents.

The bid-invitation procurement entity shall, prior to the opening of bid, notify the finance department and other relevant departments
of the people’s government at the same level. The finance department and other relevant departments may supervise the opening of
bid on the spot according to circumstances.

Article 39

The opening of bid shall be presided over by the bid-invitation procurement entity, and shall be participated in by the purchaser,
the bidders, and representatives from relevant sectors.

Article 40

When a bid is opened, the bidders or their representatives shall inspect whether the bidding documents are sealed, the public notarization
institution entrusted by the tenderee may also inspect and notarize such fact. After the bidding documents have been confirmed as
inerrable, the tenderee’s staff member shall unseal the bidding documents in public, declare the names of the bidders, the bidding
prices, price markdowns, the alternative bidding proposals as permitted in the bid-invitation documents, and other main contents
of the bidding documents.

Such undeclared substantive contents as the bidding prices, price discounts, and alternative bidding proposals as permitted in the
bid-invitation documents, etc. shall not be acknowledged at the time of bid evaluation.

Article 41

If, when a bid is opened, the contents of the schedule on opening of the bid (price quotation schedule) in the bidding documents are
inconsistent with those of the detailed list in the bidding documents, the former (i.e., the price quotation schedule) shall prevail.

If the amount in words and the amount in figures in the bidding documents are inconsistent with each other, the amount in words shall
prevail. If the amount of total price is inconsistent with the amount calculated from unit prices, the amount calculated from unit
prices shall prevail. If the decimal point of the amount of unit price is obviously in a wrong digit position, the total price shall
prevail, and the unit price shall be modified simultaneously. In the event of dissents concerning interpreting the bidding documents
in different languages, the Chinese version shall prevail.

Article 42

The bid opening process shall be recorded by a special person appointed by the bid-invitation procurement entity, and be kept in archives
for future examination.

Article 43

Where there are less than three suppliers participating in the bidding till the end of the deadline for bidding, the bid-invitation
procurement entity shall, unless the procurement task is cancelled, report to the finance department of the people’s government at
the level of a city divided into districts or at the level of an autonomous prefecture or above, and the said finance department
shall handle the matter pursuant to the following principles:

(1)

If the bid-invitation documents contain no unreasonable clauses, and the time and procedures for announcing the invitation for bid
conform to the provisions, it shall give consent to making the procurement in a way of competitive negotiations, price inquiries
or single source;

(2)

If the bid-invitation documents contain any unreasonable clause, or the time and procedures for announcing the invitation for bid
do not conform to the provisions, it shall invalidate the bid, and order the bid-invitation procurement entity to make a new invitation
for bid in accordance with the law.

If, in the course of the bid evaluation, there are less than three suppliers who fulfill the professional conditions, or less than
three suppliers who make substantive response to the bid-invitation documents, the matter may be handled with reference to the preceding
paragraph.

Article 44

The bid evaluation shall be organized by the bid-invitation procurement entity, while the bid evaluation committee lawfully established
by the bid-invitation procurement entity shall be responsible for the specific bid evaluation affairs, and independently perform
the following duties:

(1)

Examining whether the bidding documents meet the requirements in the bid-invitation documents, and making an appraisal accordingly;

(2)

Requiring the bidding suppliers to explain or clarify the matters pertinent to the bidding documents;

(3)

Recommending the name list of the candidate suppliers for winning the bid, or accepting the entrustment of the purchaser to directly
determine the bid-winning supplier in a method determined in advance; and

(4)

Reporting illegal acts of interfering with the bid evaluation to the bid-invitation procurement entity or to the relevant departments.

Article 45

The bid evaluation committee shall be composed of the representatives of the purchaser and the relevant experts in technical and economic
fields, etc., and the members shall be an odd number of 5 persons or more. Of which, the experts in technical and economic fields,
etc. shall be no less than two thirds of the total number of the members. For any technically complicated project whose sum of money
for procurement is no less than 3 million Yuan, the experts in technical and economic fields in the bid evaluation committee shall
be an odd number of 5 persons or more.

The experts from whom the bid-invitation procurement entity has asked for opinions regarding the bid-invitation documents may no longer
act as bid evaluation experts to participate in the bid evaluation. The purchaser may not participate in the bid evaluation of its
own procurement project in the identity of an expert. The staff member of a procurement agency may not participate in the bid evaluation
of a government procurement item represented by this agency.

The name list of the members of the bid evaluation committee shall be determined prior to the opening of bid in principle, and be
kept confidential before the result of invitation for bid is determined.

Article 46

The bid evaluation experts shall be familiar with the relevant policies and regulations on government procurement, tenders and invitations
to bid, and acquainted with market conditions, have good professional ethics, obey the disciplines on invitation for bid, have worked
for no less than eight years in the related fields, and have senior professional post_titles or be at the equal professional level.

Article 47

The finance department of the people’s government at each level shall manage the experts in a dynamic way.

Article 48

The bid-invitation procurement entity shall randomly select bid evaluation experts from the database of government procurement evaluation
experts established by the finance department at the same level or the next higher level.

If it is difficult for the bid-invitation procurement entity to randomly determine suitable bid evaluation experts for a procurement
project that is technically complicated and extremely professional, it may, upon consent of the finance department of the people’s
government at the level of a city with subordinate districts or autonomous prefecture or above, determine the bid evaluation experts
selectively.

Article 49

The members of a bid evaluation committee shall perform the following obligations:

(1)

Observing disciplines and laws, performing duties objectively, impartially and incorruptibly;

(2)

Evaluating the bids according to the bid evaluation methods and standards prescribed in the bid-invitation documents, and assuming
individual responsibility for their respective evaluation opinions;

(3)

Keeping secret the bid evaluation process and result and the suppliers’ business secrets;

(4)

Participating in drawing up the bid evaluation report;

(5)

Cooperating with the finance department in dealing with the complaints; and

(6)

Cooperating with the bid-invitation procurement entity in answering the queries raised by the bidding suppliers.

Article 50

There are three bid evaluation methods for procurement of goods or services in an invitation for bid, namely, the lowest price method,
comprehensive scoring method and price quality method.

Article 51

The lowest price method refers to the bid evaluation method in which the determination of candidate suppliers for winning the bid
are mainly based on prices, that is, on the premise that all substantive requirements in the bid-invitation documents have been met,
the lowest prices are determined according to the uniform price factors, and the bidders who quote the lowest prices shall be regarded
as candidate suppliers for winning the bid or the bid-winning supplier.

The lowest price method shall apply to projects of normatively customized commodities and general services.

Article 52

The comprehensive scoring method refers to the bid evaluation method in which the bidders who get the highest total scores in the
bid evaluation are regarded as the candidate suppliers for winning the bid or the bid-winning supplier after the bids have been comprehensively
evaluated according to all the factors stated in the bid-invitation documents, on the premise that the substantive requirements in
the bid-invitation documents are met to the fullest extent.

The main factors of comprehensive scoring include: price, technical and financial status, credit standing, performance, services,
the extent of response to the bid-invitation documents, and the corresponding proportion or weight, etc. All the said factors shall
be stated in the bid-invitation documents in advance.

At the time of bid evaluation, each member of the bid evaluation committee shall independently evaluate the bidding documents of each
effective bidder and score for them, and then add up the scores of each bidder concerning all scoring factors.

Where comprehensive scoring method is adopted, the proportion (weight) of the price score of the involved goods to the total score
shall be 30% to 60%, while the proportion (weight) of the price score of the involved services to the total score shall be 10% to
30%. The price of the service to which the unified price is applied, however, shall not be listed as the scoring factor. In case
adjustment is needed under a special situation, it shall be approved by the finance department of the people’s government at the
same level.

Total score in bid evaluation = F1￿￿1+F2￿￿2+￿￿￿￿+Fn￿￿n

F1, F2￿￿￿￿Fn are separately the total scores concerning all scoring factors;

A1, A2￿￿￿￿An are separately the weights of all scoring factors (A1 + A2 + ￿￿￿￿+An = 1).

Article 53

The price quality method means the bid evaluation method in which the bidding documents are evaluated as required, then the total
score of each effective bidder concerning all other scoring factors except the price factor (including technical and financial status,
credit standing, performance, services, the extent of response to the bid-invitation documents, etc.) is calculated and divided by
the bidding price quoted by the bidder, and the bidder with highest quotient (total score in bid evaluation) is regarded as a candidate
supplier for winning the bid or the bid-winning supplier.

Total score in bid evaluation = B/N

B shall be the comprehensive score of the bidders. B = F1￿￿1 + F2￿￿2 +￿￿￿￿+ Fn ￿￿n, of which: F1, F2, ￿￿￿￿Fn are separately the
total scores concerning all scoring factors except the price factor; A1, A2, ￿￿￿￿ An are separately the weights of all scoring factors
except the price factor (A1+A2+￿￿￿￿+An = 1).

N is the bidding price quoted by the bidder.

Article 54

The bid evaluation shall conform to the following working procedures:

(1)

Preliminary examinations of bidding documents. The preliminary examinations include qualification examination and conformity examination.

1.

Qualification examination. To, in accordance with the laws, regulations and the stipulations in the bid-invitation documents, examine
the qualification certificates, bid bond, etc. in the bidding documents, so as to determine whether the bidding suppliers are qualified
for the bidding.

2.

Conformity examination. To, according to the prescriptions in the bid-invitation documents, examine the validity and integrity of
the bidding documents, and the extent of response to the bid-invitation documents, so as to determine whether to respond to the substantive
requirements in the bid-invitation documents.

(2)

Clarification of relevant issues. As for the contents in the bidding documents, if their meaning is unclear, issues of the same kind
are expressed inconsistently with each other, or there is any obvious literal or calculation error, the bid evaluation committee
may require in written form (which shall