INVATATION AND SUBMISSION OF BIDS LAW

    Contents

    Chapter 1 General Provisions

    Chapter 2 Invitation of Bids

    Chapter 3 Submission of Bids

    Chapter 4 Opening of Bids, Evaluation of Bids and Determination of the Winning Bidder

    Chapter 5 Legal Liability

    Article 1  This Law is enacted in order to standardize bid invitation and bid submission activities, to protect the interests of
the State, the public interests and the lawful rights and interests of the parties involved in the bid invitation and bid submission
activities, to increase economic benefits and to guarantee project quality.

    Article 2  This Law applies to bid invitation and bid submission activities conducted in the People’s Republic of China.

    Article 3  Bids must be invited for the following construction projects undertaken in the People’s Republic of China, including surveying
for, and design, construction and supervision of, the projects as well as the procurement of import equipment, materials, etc. for
the construction:

    (1) projects with a bearing upon the public interest and public safety such as large-scale infrastructure
projects, public utility projects, etc.;

    (2) projects that are totally or partially funded by the investment of State-owned funds or financed by the
State;

    (3) projects using loans form international organizations or foreign governments, or aid funds.

    The specific range and scale standards for the projects enumerated in the preceding paragraph shall be formulated
by the State Council’s development planning department in conjunction with the other relevant departments of the State Council, and
then submitted to the State Council for approval.

    If any law or the State Council has provisions on the range of other projects that are subject to the invitation
of bids, those provisions shall prevail.

    Article 4  No unit or individual may divide a project which legally requires the invitation of bids into several small parts or otherwise
avoid the invitation of bids.

    Article 5  Bid invitation and bid submission activities shall follow the principle of openness, fairness, impartiality and good faith.

    Article 6  The bid invitation and bid submission activities for a project which legally requires the invitation of bids shall not
be subject to territorial or departmental restrictions. No unit or individual may illegally restrict or preclude the participation
in bid submission by legal persons or other organizations from outside his or its own region or network and may not in any manner
illegally interfere in the bid invitation and bid submission activities.

    Article 7  Bid invitation and bid submission activities and the parties involved shall subject to lawfully implemented supervisions.

    The relevant administrative supervision departments shall supervise bid invitation and bid submission activities
according to law, and shall investigate and handle illegal acts committed during bid invitation and bid submission activities.

    Article 8  A bid inviting party is a legal person or other organization that puts forward a project and invites bids therefor according
to this Law.

    Article 9  If the relevant provisions of the State require that project examination and approval procedures be carried pot for a
certain project for which bids are to be invited, the examination and approval procedures shall be carried out and approval shall
be obtained first.

    The bid inviting party shall have the appropriate amount of funds, or have secured the source of funds, for
conducting an invitation of bids, and the same shall be truthfully specified in the bid invitation documents.

    Article 10  Invitation of bids are divided into public invitation of bids and private invitation of bids.

    The term “public invitation of bids” refers to the method whereby the bid inviting party, through a bid invitation
announcement, invites unspecified legal persons or other organizations to submit bids.

    The term “private invitation of bids” refers to the method whereby the bid inviting party, through a bid invitation
letter, invites specified legal persons or other organizations to submit bids.

    Article 11  If public invitation of bids is not appropriated for a certain project which the development planning department of the
State council has determined to be a key State project or which the people’s government of the province, autonomous region or municipality
directly under the Central Government has determined to be a key local project, a private invitation of bids may be conducted, subject
to the approval of the development planning department of the State Council or the people’s government of province, autonomous region
or municipality directly under the Central Government.

    Article 12  A bid inviting party has the right to appoint a bid invitation agency of its own choice to carry out bid invitation matters.
No unit or individual may in any way designate a bid invitation agency for the bid inviting party.

    A bid inviting party which has the capability to prepare the bid invitation documents and organize the bid
evaluation may carry out the bid invitation matters itself. No unit or individual agency may coerce it into appointing a bid invitation
agency to carry out the bid invitation matters.

    A bid invitation party which carries out bid invitation matters itself for a project for which the invitation
of bids is legally required shall report the same to the relevant administrative supervision departments for the record.

    Article 13  A bid invitation agency is a social intermediary organization which is established according to law and engages in the
bid invitation agency business and provides related services.

    A bid invitation agency shall meet the following requirements:

    (1) possess business premises and the appropriate amount of funds to engage in the bid invitation agency business;

    (2) possess the specialized capability necessary to prepare bid invitation documents and organize bid evaluations;

    Article 14  The qualifications of bid invitation agencies engaging in the bid invitation agency business for construction projects
must be subject to recognition by the competent department of construction administration of the State Council or of the people’s
government of the relevant province, autonomous region or municipality directly under the Central Government. The specific measures
are to be formulated by the competent department of construction administration of the State Council together with the relevant departments
of the State Council. The competent department for recognizing the qualifications of bid invitation agencies engaging in other bid
invitation agency business shall be specified by the State Council.

    No superior-subordinate relationship or other relationship of shared interest may exist between a bid invitation
agency and administrative agencies or other State organs.

    Article 15 A bid invitation agency shall undertake bid invitation matters within the scope of commission of the bid inviting party, and shall
observe the provision of this Law on bid inviting party.

    Article 16  If the bid inviting party employs the public invitation of bids method, it shall issue a bid invitation announcement.
The bid invitation announcement for a project for which the invitation of bids id legally required shall be issued in a State-designated
newspaper or periodical, on a State-designated information network or in other State-designated media.

    The bid invitation announcement shall specify such matters as the name and address of the bid inviting party,
the nature, quantities, location and time of the project, the method of obtaining the bid invitation documents, etc.

    Article 17  If the bid inviting party employs the private invitation of bids method, it shall send a bid invitation letter to at least
three specific legal persons or other organizations which have the ability to handle the project and which have a good credit standing.

    The bid invitation letter shall specify the matters stipulated in Paragraph 2 of Article 16 of this Law.

    Article 18  Depending on the requirements of the project, the bid inviting party may require, in the bid invitation announcement or
the bid invitation letter, that potential bidders provide the relevant documents certifying their qualifications and details of their
business situation and may investigate the qualifications of potential bidders. If there are State regulations on the qualification
requirements of bidders, such regulations shall prevail.

    A bid inviting party may not restrict or preclude potential bidders by specifying unreasonable conditions
and may not discriminate against potential bidders.

    Article 19  The bid inviting party shall prepare bid invitation documents according to the special characteristics and requirements
of the project. The bid invitation documents shall specify all substantive requirements and conditions, including the technical requirements
for the project, the standards for the examination of the bidders’ qualifications, bid price requirements, the bid evaluation standards,
etc. and the principal terms of the contract to be executed.

    If the State has regulations concerning the technology and standards for the project for which bids are invited,
the bid inviting party shall include the corresponding requirements in the bid invitation documents according to those regulations.

    If the project for which bids are invited needs to be split up into phases and the construction period needs
to be specified, the bid inviting party shall split up the project into reasonable phases and specify a reasonable construction period
and specify the same in the bid invitation documents.

    Article 20  The bid invitation documents may not require or specify a specific procedure or supplier or contain other particulars
which favor or preclude potential bidders.

    Article 21  In accordance with the specific circumstances of the project for which bids are invited, the bid inviting party may organize
an on-the-spot survey of the project for the potential bidders.

    Article 22  The bid inviting party may not disclose to a third party the names or number of potential bidders which have received
bid invitation documents or other bid invitation and bid submission details which could affect fair competition.

    If the bid inviting party has set a reserve price, the confidentiality of the reserve price shall be maintained.

    Article 23  If the bid inviting party makes necessary clarification or amendments to the bid invitation documents, it shall notify
in writing all the parties that have received the bid invitation documents at least 15 days before the deadline for the submission
of bidding documents specified in the bid invitation documents. The contents of the clarifications or amendments shall become an
integral part of the bid invitation documents.

    Article 25  A bidder is a legal person or other organization which responds to an invitation of bids and participates in the bidding
competition.

    If a scientific research project for which bids are invited according to law permits individuals to participate
in the bidding, the provisions of this Law concerning bidders shall apply to those individuals submitting bids.

    Article 26  A bidder shall have the capability to undertake the project for which bids are invited. If the relevant provisions of
the State or the bid invitation documents specify requirements as to bidder qualifications, the bidders shall possess the required
qualifications.

    Article 27  A bidder shall prepare its bid documents according to the requirements of the bid invitation documents. The bid documents
shall respond to the substantive requirements and conditions put forward in the bid invitation documents.

    If the project for which bids are invited is for construction work, the particulars of the bid documents shall
include the resumes and business achievements of the person in charge of the project and the principal technical personnel intended
to appoint, and the machinery and equipment intends to use in completing the project, etc.

    Article 28  The bidders shall deliver the bid documents to the bid submission address before the deadline for the submission of bid
documents specified in the bid invitation documents. After receiving the bid documents, the bid inviting party shall sign for receipt
and preserve the same, and may not open them. If there are fewer than three bidders, the bid inviting party shall invite bids anew
according to this Law.

     The bid inviting party shall refuse to accept bid documents which are delivered after the deadline for the
submission of bid documents specified in the bid invitation documents.

    Article 29  Before the deadline for the submission of bid documents specified in the bid invitation documents passes, a bidder may
supplement, amend or withdraw the bid documents it has submitted, and it shall notify the bid inviting party thereof in writing.
The content of the supplementation or amendments shall become an integral part of the bid documents.

    Article 30  If a bidder, on the basis of the actual circumstances of the project as specified in the bid invitation documents, intends
to subcontract out some of the non-principal, non-key parts of the work after its bid is accepted, it shall specify the same in the
bid documents.

    Article 31  Two or more legal persons or other organizations may organize as a consortium and jointly submit a bid as a single bidder.

    Each of the members of a consortium shall have the appropriate capability to undertake the project for which
bids are invited. If the relevant provisions of the State or the bid invitation documents specify requirements as to bidder qualifications,
each of the members of the consortium shall possess the corresponding required qualifications. If the consortium is composed of units
that specialize in the same field, the qualification grade of the consortium shall be determined according to the qualification grade
of the unit with the lowest qualification grade.

    The members of a consortium shall execute an agreement for joint submission of a bid, clearly specifying the
work and responsibilities each member intends to undertake, and shall submit such agreement together with the bid documents to the
bid inviting party. If the wining bid was submitted by a consortium, the member of the consortium shall jointly execute a contract
with the bid inviting party and bear joint and several liability towards the bid inviting party for the project that they have won.

    A bid inviting party may not coerce bidders into organizing a consortium to jointly submit a bid and may not
restrict the competition among the bidders.

    Article 32  Bidders may not collude on the bid price, may not preclude fair competition form other bidders or prejudice the lawful
rights and interests of the bid inviting party or other bidders.

    Bidders and the bid inviting party may not collude in the submission of bids in order to harm the interests
of the State, the public interest or the lawful rights and interests of a third party.

    Bidders are prohibited from bribing the bid inviting party or members of the bid evaluation committee in order
to have their bid accepted.

    Article 34  The bids shall be opened in public at the time of the deadline for submission of the bid documents as determined in the
bid invitation documents. The bids shall be opened at the predetermined place specified in the bid invitation documents.

    Article 35  The opening of the bids shall be presided over by the bid inviting party, and all the bidders shall be invited to attend.

    Article 36  When opening the bids, the bid inviting party or the representative chosen by him shall inspect the status of the seals
on the bids; alternatively, the same may be inspected and notarized by a notarial institution appointed by the bid inviting party.
After the seals have been confirmed to be intact, the working personnel shall break the seals in public and read out the names and
bid prices of the bidders and other major particulars of the bid documents.

    All bid documents received by the bid inviting party by the deadline for submission of bid documents as specified
in the bid invitation documents shall have their seals broken and be read out in public at the time the bids are opened.

    Minutes shall be kept of the bid opening procedures and be filed for future reference.

    Article 37  Bid evaluation shall be the responsibility of a bid evaluation committee organized according to law by the bid inviting
party.

    If a project legally requires the invitation of bids, the bid evaluation committee shall be composed of the
representative of the bid inviting party and the relevant experts in technology, economics, etc. The number of members shall be an
odd number of five or more, and the number of experts in technology and economics, etc. shall account for at least two-thirds of
the total.

    The experts referred to in the preceding paragraph shall have worked in their relevant fields for at least
eight years and have a senior post_title pr attained an equivalent professional level. They shall be selected by the bid inviting party
from the list of experts provided by the relevant departments of the State Council or the relevant departments of the people’s government
of the province, autonomous region or municipality directly under the Central Government or from the list of experts in the relevant
fields forming part of the bid invitation agency’s pool of experts. For ordinary projects, the experts may be selected at random.
For special projects, they may be determined directly by the bid inviting party directly.

    Persons with a material interest in the bid inviting party may not sit on the bid evaluation committee for
the relevant project. Those already sitting on the committee shall be replaced.

    The list of members of the bid evaluation committee shall be kept confidential until the winning bidder has
been determined.

    Article 38  The bid inviting party shall take the steps necessary to ensure that strict confidentiality is maintained during the evaluation
of the bids.

    No unit or individual may illegally intervene in or influence the course and result of the bid evaluation.

    Article 39  The bid evaluation committee may require bidders to give the necessary clarification or explanation of those contents
of the bid documents whose meaning is not clear. However, such clarification or explanation may not exceed the scope of the bid documents
or change the substantive contents of the bid documents.

    Article 40  The bid evaluation committee shall evaluate and compare the bid documents according to the evaluation standards and methods
determined in the bid invitation documents. If a reserve price has been set, reference shall be made thereto. After the bid evaluation
committee has completed the evaluation, it shall submit a written bid evaluation report to the bid inviting party and recommend qualified
candidates for the status of winning bidder.

    The winning bidder shall be determined by the bid inviting party on the basis of the written bid evaluation
report submitted, and the candidates for the status of winning bidder recommended, by the bid evaluation committee. Alternatively,
the bid inviting party may authorize the bid evaluation committee to directly determine the winning bidder.

    If the State Council has special provisions concerning the evaluation of bids for special projects, such provisions
shall prevail.

    Article 41  The bid of the winning bidder shall meet the following conditions:

    (1)it conforms to the greatest possible extent with all of the overall evaluation standards specified in the
bid invitation documents;

    (2) it satisfies the substantive requirements of the bid invitation documents and its bid price is the lowest
among those evaluated, except for bid prices below cost.

    Article 42  If, upon evaluation, the bid evaluation committee consider that none of the bids to meet the requirements of the bid invitation
documents, it may reject all of the bids.

    If all the bids for a project which legally requires the invitation of bids are rejected, the bid inviting
party shall invite bids anew according to this Law.

    Article 43  Until the winning bidder has been determined, the bid inviting party may not hold negotiations with bidders on substantive
contents such as bid price, bid plans, etc.

    Article 44  The members of the bid evaluation committee shall perform their duties in an objective and impartial manner, observe their
professional ethics and bear personal liability for the evaluation opinions put forward by them.

    The member of the bid evaluation committee may not have private contacts with bidders or accept property or
other benefits from bidders.

    The members of the bid evaluation committee and the relevant working personnel participating in the evaluation
may not disclose details of the evaluation and comparison of the bid documents, details of the recommendation of candidates for the
status of winning bidder and other relevant details of the bid evaluation.

    Article 45  After the winning bidder has been determined, the bid inviting party shall issue a letter of acceptance to the winning
bidder and simultaneously inform all the losing bidders of the result of the determination of the winning bidder.

    The letter of acceptance shall be legally binding on the bid inviting party and the winning bidder. If the
bid inviting party changes the result of the determination of the winning bidder, or the winning bidder renounces the project which
it has won, after the letter of acceptance has been issued, it shall assume legal liability therefor according to law.

    Article 46  The bid inviting party and the winning bidder shall conclude a written contract according to the bid invitation documents
and the winning bidder’s bid documents within 30 days of the date of issuance of the letter of acceptance. The bid inviting party
and the winning bidder may not subsequently conclude other agreement which contravene the substantive terms of the contract.

    The winning bidder shall pay a performance bond if the bid invitation documents require the winning bidder
to do so.

    Article 47  For projects which legally requires the invitation of bids, the bid inviting party shall submit a written report on the
invitation and submission of bids to the relevant administrative supervision department within 15 days of the date of determination
of the winning bidder.

    Article 48  The winning bidder shall perform its obligations, and complete the project which it has won, according to the contract.
The winning bidder may not assign the project which it has won to a third party, or break up the project which it has won and subsequently
assign the parts to third parties.

    Subject to the provisions of the contract or the consent of the bid inviting party, the winning bidder may
subcontract out the completion of some of the non-principal, non-key parts of the work for the project which it has won. The subcontractors
shall possess the appropriate qualifications required and may not subcontract its project.

    Article 49  Anyone who violates the provisions of this Law by failing to invite bids for a project for which bids must be invited,
or by breaking up a project for which bids must be invited into several small parts or by otherwise avoiding the invitation of bids,
shall be ordered to make amends within a specified time limit, and may be imposed a fine of mot less than 0.5% nor more than 1% of
the amount of the project contract; if the project is entirely or partially funded with State-owned funds, the implementation of
the project or allocation of funds may be suspended. the persons in charge directly responsible and the other directly responsible
persons of the unit shall be disciplined according to law.

    Article 50  If a bid invitation agency violates the provisions of this Law by disclosing details or materials which relate to the
bid invitation and submission procedures and are subject to maintenance of confidentiality, or if it colludes with the bid inviting
party or a bidder in order to harm the interests of the State, the public interest or the lawful rights and interests of a third
party, it shall be imposed a fine of not less than 50,000 yuan nor more than 250,000 yuan, and the persons in charge directly responsible
and the other directly responsible persons of the unit shall be imposed a fine of not less than 5% nor more than 10% of the amount
of the fine imposed upon the unit; if there are illegal earnings, such illegal earnings shall also be confiscated; if the circumstances
are serious, the agency’s qualifications to act as bid invitation agent shall be suspended or revoked; if a crime is constituted,
criminal liability shall be investigated according to law. If losses are caused to others, liability for compensation shall be assumed
according to law.

    If any of the acts mentioned in the preceding paragraph has an impact on the result of the determination of
the winning bid, the acceptance of the winning bid shall be void.

    Article 51  It the bid inviting party imposes unreasonable conditions to restrict or preclude potential bidders or if it discriminates
against potential bidders, or if it imposes on bidders a mandatory requirement to organize a consortium or if it restricts the competition
among the bidders, it shall be ordered to make amends and may be imposed a fine of not less than 10,000 yuan nor more than 50,000
yuan

    Article 52  If the party inviting bids for a project which legally requires the invitation of bids discloses to others the names or
numbe