Procurement changes aim to boost national security

By Sean Lin  /  Staff reporter

Wed, May 01, 2019 - Page 3

Lawmakers yesterday approved amendments to the Government Procurement Act (政府採購法), including a provision that says government agencies should adopt restrictive bidding in procurement plans concerning national security.

If necessary, the central governing agency of the act should consult agencies that have proposed a procurement plan concerning national security about a qualification check and review criteria for overseas and local bidders, the amendment says.

The act is currently enforced by the Public Construction Commission, which the Executive Yuan has proposed merging with the National Development Council.

The rules for the qualification review and restrictions should then be published by the commission, the amendment says.

This would prevent foreign entities that have never invested in the nation from participating in bids pertaining to national security — including information security — which is usually the result of insufficient communication between the procuring agency and the Ministry of Economic Affairs’ Investment Commission, said Democratic Progressive Party Legislator Lin Chun-hsien (林俊憲), who sponsored the amendment.

The Investment Commission could be oblivious as to whether a first-time foreign bidder is backed by Chinese funds, as there are no records of investment in Taiwan, he said.

The amendments also seek to reinforce safeguards for government procurement plans against improper benefits and contractors failing to perform the work or deliver products as promised.

The amended act stipulates that government agencies that have proposed large procurement plans — defined as those that would cost in excess of NT$200 million (US$6.47 million) — establish a procurement operations and review panel.

The panel would be responsible for reviewing procurement costs, strategies and paperwork for soliciting tenders, as well as providing consultation for a procurement plan, it says.

Civil servants must not be involved in a procurement plan that could profit their relatives within two degrees of consanguinity, it says, adding that agency heads should stop personnel who have failed to avoid a conflict of interest from overseeing a procurement plan and put others in charge.

To avoid cutthroat price competition that could result in agencies receiving substandard products or services, the amended act stipulates that agencies should in principle accept the most economically advantageous tender — rather than the lowest tender — for technical, information, social welfare, and cultural and innovative services.

The tender bond paid by a project owner is to be confiscated if they are found to have submitted untruthful documents; used a borrowed identity or allowed others to use their identity in the bidding process; refused to sign a contract after winning a bid; failed to pay a part of a surety; or engaged in illegal actions that compromised the fairness of a tendering process, it says.

Agencies that issue a call for bids should specify a bid bond for bidders and a surety for the winning bidder, with the exception of the procurement of labor services, which in principle should not require the payment of a tender bond or surety, it adds.

A project owner has five years to begin the process of seizing or demanding a tender bond from a contractor found guilty of any such offenses, the amendments say, adding that the process shall not exceed 15 years from the closure or cancelation of a solicitation of bids.