The Directorate-General for the Internal Market and Services (DG MARKT) of European Commission and the Public Construction Commission (PCC) held the annual regulatory dialogue on government procurement in Taipei on December 12, 2012. During the opening remarks, Minister of PCC, Dr. Jenn-Chuan Chern pointed out that “fairness and openness” are the fundamental principles of Taiwan’s government procurement. He hoped that both sides may benefit from each other by this dialogue. Mr. Nooteboom, Acting Director for Public Procurement of DG MARKT of European Commission, recognized Taiwan’s achievements on electronic procurement and transparency of government procurement procedures, as well as efforts in promoting the most advantageous tender and arbitration mechanism.
Minister Chern said that 99.83% of the construction projects were awarded by the lowest tender in the past, which often resulted in abnormal low price and poor quality. In this regard, PCC encourages government entities to conduct their construction projects by the combination of design-build and the most advantageous tender, which may also inspire suppliers to improve their construction quality and competitiveness. The EU side responded that in EU, approximately 80% of the government procurement above the threshold of WTO Agreement on Government Procurement(GPA) are awarded by the most advantageous tender, which is a good strategy as long as the evaluating criteria are properly adopted.
Acting Director Nooteboom also recognized the improvement measures taken by Taiwan on the contract dispute resolution mechanism, such as mediation by Complaint Review Board and arbitration by arbitration tribunal. In June 2012, PCC amended the Model Contract for Construction Procurement by adding detailed arbitration procedures for contracting parties to follow. For instance, each party may present a list of 10 candidates of arbitrators to the other party for appointing one arbitrator, and the two arbitrators thus appointed may decide the third arbitrator as the chief arbitrator to chair the arbitration tribubnal. Minister Chern anticipated that the well-designed procedures may lead to better credibility on arbitration. The EU side responded with great interests in this new mechanism.
The EU side presented in the dialogue their proposal in amending the EU procurement regulations. For example, the use of competitive procedure with negotiation to modify the submitted tender documents in the most advantageous tender in order to acquire better performance; the deadlines for tendering will be shortened to accelerate the procurement process; specific requirements will be given in order to clarify and facilitate the implementation of green procurement; the requirement for original or certified documents and proofs will be relaxed for easier bidding process; and the electronic files of tendering documentation will be available online for downloading to accelerate e-procurement implementation.
For the tendering and awarding procedures of concessions projects, the EU side indicated that a new directive is being developed to harmonize the procedures among EU Member States. A project will be classified as a concession project if the supplier is fully responsible for the operation risks, which is similar to Taiwan’s view on the private participation project. On the other hand, a project will be subject to the government procurement directive if the supplier is exempted from operation risks. For the market access to concessions projects, EU would like to apply the principle of reciprocity.
Both sides also exchanged viewpoints on the accessions of New Zealand, Moldova, and China to the WTO GPA, which are currently being reviewed by GPA members. The EU side also invited Taiwan to join the GPA work programmes on e-procurement, sustainable procurement, and statistics of procurement along with other core members of GPA. Minister Chern gladly accepted the invitation.