On October 10, 2023, the Gansu Provincial Department of Housing and Urban-Rural Development issued the "Notice on Printing and Distributing the ", which explicitly proposed that government-invested projects subject to mandatory tendering in accordance with the law shall completely stop collecting bid bonds. These Implementation Rules shall take effect from the date of issuance and shall be valid for 5 years.

01. Government-invested projects subject to mandatory tendering in accordance with the law shall completely stop collecting bid bonds

◆ From the date of issuance of these Implementation Rules, for government-invested projects subject to mandatory tendering in accordance with the law among housing construction and municipal infrastructure projects in our province, the collection of bid bonds shall be completely stopped.

◆ The tenderee shall not require or in a disguised form require bidders to submit bid bonds in any form.

◆ The bid evaluation committee shall not reject bids on the grounds that no bid bond has been submitted.

02. For projects subject to mandatory tendering in accordance with the law other than government-invested projects and for projects not subject to mandatory tendering in accordance with the law, differentiated payment of bid bonds shall be implemented

◆ From the date of issuance of these Implementation Rules, for projects subject to mandatory tendering in accordance with the law other than government-invested projects and for projects not subject to mandatory tendering in accordance with the law among housing construction and municipal infrastructure projects in our province, tenderees are encouraged, when conducting tendering, to query and use credit information and, in light of the characteristics of the tendered project, to implement differentiated payment of bid bonds for bidders that meet the credit rating requirements.

◆ The maximum amount of a bid bond under differentiated payment shall not exceed 1% of the total bid price, and for construction tendering shall not exceed 500,000 yuan, and for survey, design, supervision and other tendering shall not exceed 50,000 yuan.

◆ Letters of guarantee (insurance) shall be comprehensively promoted, and tenderees are encouraged to accept non-cash transaction guarantee methods for payment of bid bonds. No unit or individual may designate for bidders the bank, guarantee institution or insurance institution that issues bid bond letters of guarantee or policies.

◆ It is strictly prohibited to collect, under various pretexts, deposits or other fees in a disguised form without legal or regulatory basis. No unit may illegally withhold, delay payment of, misappropriate or divert bid bonds.

The original text of Gansu is as follows:

To the housing and urban-rural development bureaus of all cities (prefectures), the housing and urban-rural development bureau of the Gansu mining area, and the urban and rural construction and transportation administration bureau of Lanzhou New Area:

In order to further optimize the business environment in the field of bidding and tendering, reduce transaction costs for market entities, and protect the lawful rights and interests of all parties, our department has formulated the "Implementation Rules for Improving the Bidding and Tendering Guarantee System and Further Reducing Bidding and Tendering Transaction Costs in Housing Construction and Municipal Infrastructure Projects in Gansu Province", which is hereby printed and distributed to you. Please conscientiously implement it in light of actual work.

Attachment: "Implementation Rules for Improving the Bidding and Tendering Guarantee System and Further Reducing Bidding and Tendering Transaction Costs in Housing Construction and Municipal Infrastructure Projects in Gansu Province"

Gansu Provincial Department of Housing and Urban-Rural Development

September 15, 2023

Attachment

Implementation Rules for Improving the Bidding and Tendering Guarantee System and Further Reducing Bidding and Tendering Transaction Costs in Housing Construction and Municipal Infrastructure Projects in Gansu Province

In order to improve the bidding and tendering guarantee system for housing construction and municipal infrastructure projects in our province, further reduce transaction costs for bidding and tendering market entities, protect the lawful rights and interests of all parties, and optimize the business environment in the field of bidding and tendering, these Implementation Rules are formulated in accordance with the "Notice of the National Development and Reform Commission and Other Departments on Improving the Bidding and Tendering Transaction Guarantee System and Further Reducing Bidding and Tendering Transaction Costs" (Fagai Fagui [2023] No. 27) and shall be complied with.

I. Government-invested projects subject to mandatory tendering in accordance with the law shall completely stop collecting bid bonds

1. "Government-invested projects subject to mandatory tendering in accordance with the law" as referred to in these Implementation Rules means projects invested by the government through direct investment or capital injection (i.e., projects using fiscal budget funds) that reach the scope and scale standards for mandatory tendering prescribed by the State, to which these Rules apply.

2. From the date of issuance of these Implementation Rules, for government-invested projects subject to mandatory tendering in accordance with the law among housing construction and municipal infrastructure projects in our province, the collection of bid bonds shall be completely stopped. The tenderee shall not require or in a disguised form require bidders to submit bid bonds in any form. The bid evaluation committee shall not reject bids on the grounds that no bid bond has been submitted.

3. The tenderee may require bidders to make a commitment in their bid documents not to withdraw their bids after the bid deadline and before the winning bidder is determined or within the bid validity period; if losses are caused to the tenderee due to the bidder's withdrawal of its bid within the prescribed period, the bidder shall bear compensation liability in accordance with the law.

4. If, after a bidder is determined as the winning bidder, it fails to conclude a contract with the tenderee without justified reasons, proposes additional conditions to the tenderee when signing the contract, changes the substantive content of its bid documents, or fails to submit a performance bond as required by the bidding documents, its winning qualification shall be cancelled; if losses are thereby caused to the tenderee, it shall bear compensation liability in accordance with the law; the relevant administrative supervision department shall order it to make corrections and may impose a fine of not more than 10‰ of the amount of the winning project.

II. For projects subject to mandatory tendering in accordance with the law other than government-invested projects and for projects not subject to mandatory tendering in accordance with the law, differentiated payment of bid bonds shall be implemented

1. From the date of issuance of these Implementation Rules, for projects subject to mandatory tendering in accordance with the law other than government-invested projects and for projects not subject to mandatory tendering in accordance with the law among housing construction and municipal infrastructure projects in our province, tenderees are encouraged, when conducting tendering, to query and use credit information and, in light of the characteristics of the tendered project, to implement differentiated payment of bid bonds for bidders that meet the credit rating requirements.

2. Where a tenderee implements differentiated payment of bid bonds, it shall clearly state this in the bidding documents. At the same time, it shall state in the bidding documents the conditions for differentiated payment of bid bonds and the corresponding payment (or reduction/exemption) amount (or proportion). The maximum amount of a bid bond under differentiated payment shall not exceed 1% of the total bid price, and for construction tendering shall not exceed 500,000 yuan, and for survey, design, supervision and other tendering shall not exceed 50,000 yuan, and shall be adjusted accordingly when the relevant departments of the State and Gansu Province adjust the amount of bid bonds collected.

3. The tenderee may choose conditions such as the presence or absence of dishonest records, performance or financial status as the classification basis for differentiated payment of bid bonds. The classification indicators shall conform to relevant laws, regulations, rules or standards of relevant State departments, and the channels for information query shall be platforms or websites recognized and made public by relevant laws, regulations, rules or relevant State departments, and must be stated in the bidding documents. Classification indicators that have no legal or regulatory basis, have no public query channel, are established by the tenderee itself, or are not stated in the bidding documents shall not be adopted.

4. Where a tenderee implements differentiated payment of bid bonds, bidders that meet the conditions for reduction or exemption of the bond shall submit a letter of commitment on reduction or exemption of the bond in their bid documents, making commitments regarding conditions such as the presence or absence of dishonest records, performance or financial status, and shall be responsible for their authenticity. If a bidder engages in fraudulent conduct, its bid shall be invalid and it shall bear corresponding legal liability.

5. Letters of guarantee (insurance) shall be comprehensively promoted, and tenderees are encouraged to accept non-cash transaction guarantee methods for payment of bid bonds. Bidders may, within the scope agreed in the bidding documents, choose transaction guarantee methods on their own, and the tenderee, bidding agency and any other unit shall not exclude, restrict or refuse them. No unit or individual may designate for bidders the bank, guarantee institution or insurance institution that issues bid bond letters of guarantee or policies.

6. Standardize the collection and refund of bid bonds. Strictly comply with the relevant provisions on improving the bidding and tendering transaction guarantee system and reducing bidding and tendering transaction costs, and strictly prohibit collecting, under various pretexts, deposits or other fees in a disguised form without legal or regulatory basis. No unit may illegally withhold, delay payment of, misappropriate or divert bid bonds.

III. Strengthen in-process and post-event supervision and fully protect the lawful rights and interests of tenderees

Administrative supervision departments for bidding and tendering at all levels shall continue to advance the collection, sharing and application of credit information, focus on building in-process and post-event credit supervision mechanisms, and effectively constrain bidders' bidding behavior through punishment for dishonesty and incentives for trustworthiness. They shall intensify the investigation and crackdown on illegal acts such as bid rigging and collusion, affiliation, and lending of qualifications, and resolutely prevent losses or potential risks to tenderees caused by stopping the collection of bid bonds for government-invested projects and implementing differentiated payment of bonds. They shall carry out supervision and guidance on the implementation of the bidding and tendering guarantee system, promote the reasonable and standardized application of credit information in the bidding and tendering guarantee system, eliminate acts such as generalized and abusive use of credit information and the use of the differentiated bond payment system to commit fraud and provide convenience to specific bidders, and effectively maintain the order of the bidding and tendering market.

These Implementation Rules shall take effect from the date of issuance and shall be valid for 5 years.