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On 9 November 2001, the Public Construction Commission (PCC) announced its Enforcement Guidelines for Article 26 of the Government Procurement Law. The key aspects are as fol-lows:
The guidelines apply to open tendering pro-cedures, selective tendering procedures, and limited tendering procedures in which the in-vitation to tender does not stipulate the tech-nical specifications of specific suppliers.
The question whether a technical specification adopted by a procuring entity intends to have or does have, the effect of restricting compe-tition should be judged on the basis of whether the specification exceeds the entity's needs, and not on the number of suppliers able to meet the specification.
Where an entity intends to stipulate a technical specification that does not have any interna-tional or national standard to ascribe to, and for which the tender requirements cannot be precisely stated, so that it is necessary to in-dicate specific brand names in the invitation to tender documents, the words "or equivalent" must be added, and the brands indicated must meet the following criteria:
1.The brands indicated are purely for sup-pliers' reference; the suppliers are not re-quired to use them.
2.The brands indicated must be currently manufactured and supplied, easily obtain-able, reasonably priced, with guaranteed quality, and their agents or distributors must not be monopoly or take concerted actions to monopolize the supply within the meaning of the Fair Trade Law.
3.The price, functions, efficiency, standards and characteristics of the brands indicated must be at a relatively acceptable level.
Where the invitation to tender documents al-low suppliers to offer equivalent products, this may be done in either of the following ways:
1.The invitation to tender documents should include the wording "or equivalent," and should provide that if a supplier wishes to offer equivalent products, this must be stated in his tender in advance. The sup-plier will be disqualified, if the product fails the "equivalent" test during the review process.
2.The invitation to tender documents should include the wording "or equivalent," and should provide that if a supplier wishes to offer equivalent products, it may propose such equivalent products to the procuring entity before using them. It should also indicate the time needed by the entity to review such equivalent products.
When a supplier offers an equivalent product, it should provide the entity with the relevant information such as the brand, price, functions, efficiency, and standards, or a characteristics comparison chart for review. Such product may only be used after it has passed the review process and proved to be equivalent.
A product will be accepted as an "equivalent product" if it passed the entity's review proc-ess where its functions, efficiency, standard, characteristics, etc. are no less than those stipulated in the invitation to tender docu-ments. Moreover, the above attributes must be capable of being evaluated by inspection or testing. Where a supplier is permitted to offer an equivalent product after the award of the contract, if the price of the equivalent product is lower than the product originally indicated in the contract, then the difference should be deducted from the contracted price. If related amounts such as tax, profit, or management fees are individually itemized, these should also be reduced pro rata to the difference in price. However, if the price of the equivalent product is higher than the originally con-tracted price, no increase in price is permitted.
