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Implementation Measures for Tendering and Bidding in the Transaction of State-Owned Property

Article 1 In accordance with the Auction Law of the People’s Republic of China, the rules on the Transaction of State-owned Property Rights and the Rules for Organizing Transaction and Contract Signing, these measures are introduced to regulate tendering and bidding in the transaction of state-owned property.

Article 2 These rules are applicable when property rights transaction organizations organize tendering and bidding for the transaction of state-owned property.

Article 3 The tendering and bidding activities shall observe relevant laws, regulations, and comply with the principles of openness, fairness, justice, honest and preference.

Article 4 Defined in these measures, the tenderee refers to the transferor of property rights.

Defined in these measures, the bidder refers to the intended transferee that submits transaction application and gains qualification certificate during the period of information release and participates in the bidding for the property rights.

Defined in these measures, the bid-inviting agency refers to the intermediary service body approved by the property rights transaction organization to specialize in tendering and bidding activities.

All bodies above shall observe the rules of the property rights transaction market.

Article 5 The property rights transaction organization is the organizer of the tendering and bidding activity. It is responsible for the organizing, coordinating, supervising and guiding of the tendering and bidding activity. The tendering and bidding activity for property rights transaction may be implemented by bid-inviting agencies.

Article 6 The transferor shall sign a commission contract with the bid-inviting agency and the broker member of the property rights transaction organization, and transfer it to the property rights transaction organization for the record. The commission contract shall include the following elements:

1. The names and addresses of the tenderee, the bid-inviting agency and the broker member

2. The basic information about the bid property

3. The time and location of the bid

4. The commission ratio, method and time of payment of the bid

5. The method and time of payment of the property rights transaction payment

6. Responsibility of breach of contract

7. Other issues agreed upon.

Article 7 The general procedures of bid-inviting includes:

1. The compilation of bid-inviting document and invitation for bids;

2. The submission of bid-inviting document and invitation for bids to the property rights transaction organization and the tenderee for approval;

3. The delivery of invitation for bids;

4. Clarification and Q&A before opening bid;

5. Reception of the bidders’ bidding documents;

6. Opening bid;

7. Bid evaluation by the evaluation committee according to the evaluation method

8. Preparation of evaluation report by the evaluation committee, and recommendation of bid candidates;

9. Determination of the bid winner by the tenderee;

10. Submission of the evaluation report and bidding results to the property rights transaction organization for approval;

11. Signing of Property Rights Transaction Agreement by the tenderee and the bid winner.

Article 8 the bidding document shall include the following contents:

1. Instruction to bidders: including the name, location of the transaction object, the preparation and submission of the bidding document, the time, location of the bid opening, the deadline of the bid, the bid margin, method of payment, time and method of refund, etc;

2. The format and main terms of the property rights transaction agreement;

3. Detailed explanation of the transaction object;

4. Transaction terms, with major business and transaction terms shall be highlighted;

5. Evaluation principles, standards and methods, as well as termination conditions;

6. Relevant qualification certificates required from the bidders;

7. Format and preparation requirements of the bidding document.

Article 9 The bid-inviting agency and the broker member normally compile the bid-inviting document and the investigation for bidders according to the Notice on Property Rights Transaction and relevant regulations within 5 business days after the commission contract is signed, and submit the documents to the property rights transaction organization and the tenderee for approval. The property rights transaction organization will examine and verify the bid-inviting document with the tenderee within 3 business days upon receiving the document and inform the bid-inviting agency and the broker member of the evaluation results in written form.

Article 10 Upon approval of the bid-inviting document, the bid-inviting agency shall deliver the invitation for bidders to the approved intended transferees.

Article 11 The bid evaluation principles, standards and methods in the bid-inviting document shall be the same as the evaluation and weighing methods revealed in the Notice on Property Rights Transaction. The agreed margin usually does not exceed 30 percent of the listed price.

Article 12 The bid-inviting document shall determine the compilation time of the bidding document according to the actual situation of the transaction. There shall be at least 10 business days between the delivery and the arrival of the bid-inviting document.

Article 13 The tenderee and the bid-inviting agency may organize field investigation into the transaction object for the bidders in accordance with the actual situation of the transaction object and the requirement of the bidders.

Article 14 The tenderee, broker member, bid-inviting agency and property rights transaction organization shall keep confidential the name, number of bidders and other information that may influence fair competition.

Article 15 The bid-inviting agency may terminate the bid-inviting procedure in case of the following situations:

1. No bidder has submitted the bidding document after the deadline for submission of bidding document;

2. The bidding document submitted by the bidder does not comply with the requirement of the bid-inviting document and is considered invalid;

3. The number of valid bidding document submitted is fewer than that required by the bid-inviting document, and the bid-inviting is approved by the property rights transaction organization to be terminated;

4. The bidding is terminated by the supervising body of the property rights transaction organization according to relevant rules;

5. Force majeure during the process of bidding that interrupts the normal process of the bid-inviting activity;

6. Other situations applicable for termination agreed upon in the bid-inviting document.

Article 16 The bidder shall entrust its broker member to compile the bidding document according to the requirement in the bid-inviting document. The bidding document shall respond fully to the substantial requirements and terms in the bid-inviting document.

Article 17 The bidding document shall include, but not limited to the following contents:

1. The bidding letter;

2. The bidding quote, method and time of payment, and the performance bond, etc;

3. The transaction scheme (e.g., employee settlement scheme, credit and debt settlement scheme, corporate asset restructuring scheme and long-term development plan, etc);

4. Relevant qualification documents of the bidder;

5. Other documents required by the bid-inviting document.

Article 18 The data and supporting materials provided in the bidding document shall be complete and accurate, and the bidder shall be responsible for the authenticity, completeness and validity of the bidding document and its supplementary materials, and be held responsible for unauthentic data or dishonest statements and their consequences.

Article 19 The bidding document shall be fully and clearly written, signed, bind and sealed according to the requirements specified in the bid-inviting document, and delivered to the set location through the required method and within the required time. Bidding documents failing to conform to the above requirements shall be rejected.

Article 20 If the bid-inviting document requires margin from the bidder, and the bidder does not pay the margin accordingly, the bidding document shall be rejected.

Article 21 Before the deadline of the submission of the bidding document, the bidder may supplement, alter or withdraw the submitted bidding document in written form, and the supplemented and altered contents will be taken as part of the bidding document.

Article 22 The bid shall be open publicly at the same time when the deadline for submission of bidding document is reached. The location of the bid shall be the place determined in the bid-inviting document in advance.

Article 23 The bid opening is conducted by the bid-inviting agency. Before the bid opens, the sealing of the bidding documents shall be examined by the bidder or its representative, or examined and notarized by the notarization body entrusted by the bid-inviting agency. Upon affirmation, the documents shall be opened in public, and the name of the bidder, the letter of bidding, the bidding price and other main contents of the bidding document read out.

The procedure of the bid opening shall be recorded by the bid-inviting agency and kept for the record.

Article 24 The bidding document is invalid in the following cases:

1. The bidding document does not respond substantially to the transaction requirements agreed upon in the bid-inviting document;

2. The bidding price is lower than the bottom line set by the tenderee;

3. Other situations where the bidding document is considered invalid by the bid-inviting document.

Article 25 The period between bid-opening and the release of the bidding result is the evaluation period. The evaluation shall be kept confidential.

Article 26 The evaluation committee is responsible for the bid evaluation. The evaluation committee consists of more than 5 experts and tenderee representatives in odd number who are selected by the property rights transaction organization, the bid-inviting agency and the tenderee according to the basic situation of the transaction and on the principles of justice, fairness and professional specialty. Among the committee members, the number of tenderee representatives shall not exceed 1/3 of the total number of members. The names of the evaluation committee members shall be kept confidential before the bidding result is released.

Article 27 Members of the evaluation committee who have a stake in the bidder shall be exempt from evaluation.

Article 28 The evaluation committee shall conduct the evaluation independently without the interruption or influence from any party or individual on the procedure and result of the evaluation.

Article 29 The bid evaluation committee may ask the bidder to clarify and explain the ambiguous contents in the bidding document, and the bidder shall give a written clarification or explanation. The clarification or explanation shall not exceed the scope of the bidding document or make any substantial change to the bidding document.

Article 30 The bid evaluation committee shall evaluate and grade independently the bidding documents submitted by the bidders according to the evaluation contents and standards set in the bidding document and on the principles of justice, fairness and preference, and prepare a written evaluation report. The bid candidates shall be recommended by the evaluation committee.

Article 31 The evaluation is usually completed within 3 business days after the bid is open.

Article 32 The bid-inviting agency shall classify the records on bid-opening, bid evaluation and other relevant materials within 2 business days after the bid evaluation is completed. It shall also prepare an evaluation report and rank the recommended bid candidates based on the evaluation results from the evaluation committee, and submit the report to the property rights transaction organization.

Article 33 The property rights transaction organization shall inform the tenderee in time of the evaluation reports and the bid winner. The tenderee determines the first candidate as the bid winner according to the written evaluation report provided by the bid-inviting agency and the recommended candidates, and then informs in written form the bid winner, its broker member, the property rights transaction organization and the bid-inviting agency.

Article 34 After the bid winner is determined, the bidding result shall be released on the website of the property rights transaction organization. Meanwhile, the bidder shall inform all bidders that have not won the bid and their broker members in written form of the biding result.

Article 35 After the letter of acceptance is delivered, the margin of the bid winner shall be turned into the property rights transaction payment. The property rights transaction organization shall refund all the other bidders in full within 3 business days after the tendering and bidding activity is completed.

Article 36 The tenderee and the bid winner shall sign a Property Rights Transaction Agreement according to the requirements in the bid-inviting document and the terms in the tendering document within 3 business days after the letter of acceptance is delivered. The bid-inviting document and the tendering document are part of the Property Rights Transaction Agreement.

Article 37 The tender margin, property rights transaction payment and commission fees shall be settled through the property rights transaction organization. The property rights transaction organization shall present the property rights transaction certificate after examining and verifying the Property Rights Transaction Agreement.

Article 38 After the bid-inviting document is delivered, the tenderee and the bidder that collude, terminate at will the bidding procedure, alter the bidding results, or signs property rights transaction agreement with uncertain bid winners, the tenderee, bidder and bid-inviting agency that collude, violate the evaluation principle of the bidding document, the tenderee and bidder that illegally interrupt the normal evaluation procedure by the bid evaluation committee through various means to harm the fairness of the bidding results, shall all be held responsible for legal violation.

Article 39 The bid-inviting agency that leaks confidential information and materials about the bidding activity , that colludes with the tenderee and the bidder to infringe upon the legal rights and interests of the country, the individual and the public welfare shall be held responsible for legal violation.

Article 40 The tender margin submitted by the bidder shall be used as compensation for the party whose interests are infringed upon in the following situations. If the tender margin is not enough for the compensation, the infringed party has the right to pursue further economic and legal responsibility from the responsible person(s).

1. The bidder insists upon withdrawing the submitted bidding documents after the submission deadline;

2. The bidder gives up the transaction after being determined as the bid winner;

3. The bidder fails to sign the Property Rights Transaction Agreement within the set time after being determined as the bid winner;

4. Collusion between the bidder, the tenderee and other bidders which infringes upon the legal rights and interests of the country, the collective and the individual;

5. The bidder exerts influence on or offers bribe to the tenderee, the bid evaluation committee, the employees of the property rights transaction organization and other relevant personnel, or do other acts of illicit competition, which harms the fairness of the bidding procedure and the biding results;

6. Other situations included in laws and regulations.

Article 41 The tenderee, bidder, bid-inviting agency and broker member that intentionally provide inauthentic data, fake certificates or conceal major issues shall assume relevant legal liability according to laws.

Article 42 The property rights transaction organization, as the organizer of the tendering and bidding activity for property rights transaction, shall hold the tenderee, the bidder, the bid-inviting agency and the broker member responsible for their acts of violation of these measures.

Article 43 After the tendering and bidding activity is completed, the bid-inviting agency, the bid evaluation committee and other relevant bodies shall transfer all documents about the tendering and bidding to the property rights transaction organization for the record.

Article 44 These measures shall take effect as from release.

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