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Public Construction Commission Promotes New Settlement of Governing the Mediation for Dispute Regarding the Performance of the Contract for Government Procurement

To enhance the efficiency of dispute regarding the performance of the contract for government procurement, since Minister Jenn-chuan Chern took over Public Construction Commission (PCC) on February 6th, 2012, he promoted “International Construction Dispute Settlement Mechanism,” and conducted seminars to discuss issues that bring concern to the industries with the representatives of related industry associations, and experts and scholars, so as to raise new ways to improve the mechanism for dispute regarding the performance of the contract for government procurement.
The new settlement of governing the mediation for dispute regarding the performance of the contract for government procurement offered by PCC includes revising the upper limits of fee upon the withdrawal of the application for mediation, increasing the number of members on the Complaint Review Board, offering written recommendations during the mediation of engineering procurement, adjusting the appointees’ practices of the mediating cases, strengthening the committee meeting operation of the Complaint Review Board, holding training workshops on decreasing procurement disputes and enhancing contract performance, and advocating the error patterns of procurement to industries, etc. In addition, the main element for adding the contract flaws suspension is “extreme circumstances,” with secondary elements of no double jeopardy for the same offense and notification for the limitation period. And relevant supporting measures of arbitration agreement are added to various procurement contract templates to encourage both contracting parties to resolve the dispute regarding the contract performance for government procurement through arbitration.
PCC says that it has promulgated the revised provisions of Article 14 of “Regulations Governing Fees for the Mediation for Dispute Regarding the Performance of the Contract for Government Procurement” on August 3rd, stating that if the applicant withdraws mediation in writing within ten days after the first date of mediation, the limits of the mediation fee is NT$200,000 to prevent past circumstances, where applicants spent nearly NT$500,000, from happening, thereby protecting both the applicants’ rights and the effective uses of administrative resources. Currently, PCC is drawing up plans to increase the maximum number of committee members on the Complaint Review Board to 35, so as to promote the efficiency of case-solving. During the mediation of engineering procurement, mediation recommendations should be proposed in order for the mediation to perform effectively. Also from August 1st, 2012, the party can recommend two professional committee and legal committee members from Complaint Review Board as appointee references for PCC’s consideration, so as to make mediation proposals more acceptable for the party. By August 31st, the parties that had recommended committee members account for nearly 80% of the paid cases. Apart from this,  PCC strengthened the operation of the Complaint Review Board’s committee meeting, and reinforced the function of the consideration of cases. Also, to reduce the dispute regarding contract performance from the headstream, PCC delivered relevant training lectures on July 12th and 18th at the local governments, where more disputes have occurred within the past two years, so as to reduce procurement dispute through strengthening the awareness of Procurement Law and contract management at these local authorities. PCC also collected frequently seen patterns and cases of procurement disputes and delivered the seminar, “Public Construction Enhancement Program, Reform Organization, and Error Patterns of Government Procurement,” on August 13th, 17th, 27th, and September 3rd in the Northern, Southern, Central, and Eastern areas of Taiwan respectively. Through face-to-face instructions and interactions, companies will be able to avoid repeated disputes, because they have a better understanding of the Procurement Law; also, the industries have expressed affirmation to the seminars held by PCC.
To encourage both contracting parties to resolve the dispute regarding contract performance for procurement through arbitration, PCC revised sections related to disputes, such as the provisions of Article 22 of the “Government Procurement Contract Template” and “Turnkey Contract Template” on June 4th and 11th respectively, and added sections that benefit both contracting parties, including the choice of the arbitration institution, the ways of choosing the arbitrator and presiding arbitrator, making arbitration proceedings and arbitral awards public, and recording of facts and reasons on arbitral awards, etc. In order to coordinate with the PCC’s amendment to Government Procurement Contract Template, Ministry of Transportation and Communications held  the “Discussion on How to Implement the Updated Section on Benefit Arbitration Mechanism of Government Procurement Contract Template” meeting on July 13th, 2012, and offered new ways of resolving contract dispute through arbitration, including that subordinate agencies shall complete the revision of the stereotyped engineering contract template of arbitration agreement within a month, that subordinate agencies are recommended to respect and coordinate with the approach that the industry offers when engineering procurement contract dispute occurs, that subordinate agencies shall regularly report statistics for the cases applying arbitration each year for the first half of that year, that starting from August 30th, subordinate agencies shall provide related databases with lists of arbitrators according to its arbitration needs, so as to serve as the basis of choosing an arbitrator, etc.

As for the new settlement of resolving contract dispute, PCC expressed that it will assess the effectiveness according to the actual implementation, and continuously promote the improvement measures of resolving dispute regarding government procurement.