Preface
In 1991, the World Bank Department of the Ministry of Finance organized the preparation and publication of the Chinese Model Bidding Documents (MSDs) for the World Bank financed Projects in China (three volume consisting nine documents). These documents were published for the trial use by the tendering companies and project entities. In may of 1993, the Ministry of Finance and the World Bank decided to revise these model documents by taking the lessons and experiences gained through the trial use period into consideration. As a result, a group consisting representatives from MOF and ITCs was formed to conduct this task. In order to meet the requirement of business development, it was also decided to add the four new documents to the list of MBDs, i.e. ICB-Procurement of Commodities, ICB-Procurement of Information System. Model Contract for Individual Consultant Services and Standard Bid Evaluation Report.
Along with the MBDs revision, the World Bank revised its “Guidelines –Procurement under IBRD Loans and IDA Credit ”, and published the new “Guidelines ” in January 1995. Also, the Bank started to prepare a set of Standard Bidding Documents (SBDs) according to the new Guidelines and requested mandatory use of these SBDs by its borrowers. We found from the issued SBDs, that these documents are very professionalized and reflected the long standing experiences of the World Bank in procurement business. Using the main sections of SBDs is favorable to make the procurement financed by the Bank in China more standardized, more regulated and easier to cope with international standards and good practices. However, we believe it is still worthwhile to make some amendment to the SBDs by taking the specific situations and procurement management experiences in China into account. Through full exceptional case, China can have its MBDs provided that the main sections of MBDs should be the same as those of SBDs. This raised a new requirement to our MBD revision work.
Through three-year endeavor, the task force have completed the revision of several main MBDs. The world bank has also finished the review of these MBDs and agreed to formal publication of these MBDs. According to MOF rules, starting from July 1, 1996, for each ICB and NCB procurement financed by the World Bank in China. No changes can be made to the MBD text. Project entities and procurement agents may prepare necessary changes through the Data/Cover Sheets.
The main characteristics of the new MBDs are as follows:
1. The principles of economy, efficiency and transparency in Bank-financed procurement, which stipulated in the Bank’s new “Procurement Guidelines”. Are fully
reflected in new MBDs. The new MBDs kept the clauses in Instruction to Bidders and General Conditions of Contract of SBDs unchanged, these clauses are unilateral in the biding documents for the Bank-financed procurement all over the World, thus it will improve the transparency in future procurement, ensure the proper balance of risks and interests between the Buyer and the Seller/the Owner and the Contractor, and help to offer a equal opportunity for competition to all eligible bidders. The new MBDs either have Chinese characteristics, or have been considered standardization in line with international practices, therefore, it will actively promote the standardization of the Bank-financed procurement in China and the participation of the local manufacturers in competition in international market.
2. The text of Instruction to Bidders and General Conditions of Contract as well as MOF-prepared Standardized Special Condition of Contract can not be changed. If, according to the special requirements of specific project, it is deemed necessary to change or add clause to Instruction to Bidders and Special Condition of Contract of MBDs, these changed or added clauses should be introduced through the Data/Cover Sheet for the respective section and agreed with MOF and the World Bank as necessary . The procurement agents and project entities should, according to the format in MBD, prepare the Cover Sheet for Instruction to Bidders (Bidding Date), the Date Sheet for Conditions of Contract (Cover Sheet/Appendix to Bid), the Conditions for Particular Application for Works Contract and other required sheets/schedule, such as Schedule of Requirements for Goods and Bill of Quantities for Civil Works, as well as the Technical Specifications. These self-prepared parts should be sent to the government agencies concerned and the World Bank for prior review according to respective requirements.
3. According to the requirement of new “Procurement Guidelines ”, certain clauses of MBDs were revised, such as Eligibility of Bidders, Eligibility of Goods. Bid Price, Currency of Bid, Bid V alidity , Transportation, Domestic Preference and Settlement of Disputes etc. Some new clauses have been introduced and revised to new MBDs according to the Chinese situations, such as Performance Security , Inspection and Test, Marking for Shipment, Shipping Advice, Insurance, Documents, Payment, Warranty, Claim, Force Majeure, Taxes and Duties, Resolution of Disputes and so on, thus making the new MBD more rigorous, more complete and more practical. The new MBDs also stipulate that if a local bidder wins the bid in international competitive bidding, a contract in Chinese could be awarded to him and Chinese then becomes the governing language of such contract. In bidding for works, the perspective contractor could specify the exchange rate to be used for pagment of foreign exchange during contract execution. These aspects show a greater flexibility to both parties of the contract comparing to the old MBDs.
4. The clauses of new MBDs become more standardized and operable. The Clauses of Force Majeure, Resolution of Disputes, Tax and Duties, Performance Security and Fraud and Corruption are almost the same across all MBDs which have
these Clauses. The National Competitive Bidding Document for Procurement of Works replaced the over-complicated FIDIC Clauses with simpler Contract Clauses which are much easier to understand and to implement.
5. The Contract Documents are more specialized. In case of consultants services, the old MBDs only contained one type of Contract suitable for consulting firms for “Complex and Time-based Assignment ”. However, in order to meet different requirement, there are four types of contracts in new MBDs for consultant services, i.e. Contract for Complex and Time-based Assignment, Contract for Lump Sun Remuneration, Contract for Long Term Individual Consultant and Contract for Short Term Individual Consultant. The respective MBD has been prepared by MOF according to different type of procurement and different requirements of each sector.
6. The new MBDs contains clauses dealing with the sensitive issue of fraud and corruption, such as “The bidder shall furnish information as described in paragraph 7 of the Form of Bid on commission or gratuities, if any , paid or to be paid to agents relating to this Bid, and to contract execution if the bidder is awarded the contract”, etc.
In order to enable readers better understand and take command of these MBDs, we have prepared a set of User’s Manual for reference.
Preface
In 1991, the World Bank Department of the Ministry of Finance organized the preparation and publication of the Chinese Model Bidding Documents (MSDs) for the World Bank financed Projects in China (three volume consisting nine documents). These documents were published for the trial use by the tendering companies and project entities. In may of 1993, the Ministry of Finance and the World Bank decided to revise these model documents by taking the lessons and experiences gained through the trial use period into consideration. As a result, a group consisting representatives from MOF and ITCs was formed to conduct this task. In order to meet the requirement of business development, it was also decided to add the four new documents to the list of MBDs, i.e. ICB-Procurement of Commodities, ICB-Procurement of Information System. Model Contract for Individual Consultant Services and Standard Bid Evaluation Report.
Along with the MBDs revision, the World Bank revised its “Guidelines –Procurement under IBRD Loans and IDA Credit ”, and published the new “Guidelines ” in January 1995. Also, the Bank started to prepare a set of Standard Bidding Documents (SBDs) according to the new Guidelines and requested mandatory use of these SBDs by its borrowers. We found from the issued SBDs, that these documents are very professionalized and reflected the long standing experiences of the World Bank in procurement business. Using the main sections of SBDs is favorable to make the procurement financed by the Bank in China more standardized, more regulated and easier to cope with international standards and good practices. However, we believe it is still worthwhile to make some amendment to the SBDs by taking the specific situations and procurement management experiences in China into account. Through full exceptional case, China can have its MBDs provided that the main sections of MBDs should be the same as those of SBDs. This raised a new requirement to our MBD revision work.
Through three-year endeavor, the task force have completed the revision of several main MBDs. The world bank has also finished the review of these MBDs and agreed to formal publication of these MBDs. According to MOF rules, starting from July 1, 1996, for each ICB and NCB procurement financed by the World Bank in China. No changes can be made to the MBD text. Project entities and procurement agents may prepare necessary changes through the Data/Cover Sheets.
The main characteristics of the new MBDs are as follows:
1. The principles of economy, efficiency and transparency in Bank-financed procurement, which stipulated in the Bank’s new “Procurement Guidelines”. Are fully
reflected in new MBDs. The new MBDs kept the clauses in Instruction to Bidders and General Conditions of Contract of SBDs unchanged, these clauses are unilateral in the biding documents for the Bank-financed procurement all over the World, thus it will improve the transparency in future procurement, ensure the proper balance of risks and interests between the Buyer and the Seller/the Owner and the Contractor, and help to offer a equal opportunity for competition to all eligible bidders. The new MBDs either have Chinese characteristics, or have been considered standardization in line with international practices, therefore, it will actively promote the standardization of the Bank-financed procurement in China and the participation of the local manufacturers in competition in international market.
2. The text of Instruction to Bidders and General Conditions of Contract as well as MOF-prepared Standardized Special Condition of Contract can not be changed. If, according to the special requirements of specific project, it is deemed necessary to change or add clause to Instruction to Bidders and Special Condition of Contract of MBDs, these changed or added clauses should be introduced through the Data/Cover Sheet for the respective section and agreed with MOF and the World Bank as necessary . The procurement agents and project entities should, according to the format in MBD, prepare the Cover Sheet for Instruction to Bidders (Bidding Date), the Date Sheet for Conditions of Contract (Cover Sheet/Appendix to Bid), the Conditions for Particular Application for Works Contract and other required sheets/schedule, such as Schedule of Requirements for Goods and Bill of Quantities for Civil Works, as well as the Technical Specifications. These self-prepared parts should be sent to the government agencies concerned and the World Bank for prior review according to respective requirements.
3. According to the requirement of new “Procurement Guidelines ”, certain clauses of MBDs were revised, such as Eligibility of Bidders, Eligibility of Goods. Bid Price, Currency of Bid, Bid V alidity , Transportation, Domestic Preference and Settlement of Disputes etc. Some new clauses have been introduced and revised to new MBDs according to the Chinese situations, such as Performance Security , Inspection and Test, Marking for Shipment, Shipping Advice, Insurance, Documents, Payment, Warranty, Claim, Force Majeure, Taxes and Duties, Resolution of Disputes and so on, thus making the new MBD more rigorous, more complete and more practical. The new MBDs also stipulate that if a local bidder wins the bid in international competitive bidding, a contract in Chinese could be awarded to him and Chinese then becomes the governing language of such contract. In bidding for works, the perspective contractor could specify the exchange rate to be used for pagment of foreign exchange during contract execution. These aspects show a greater flexibility to both parties of the contract comparing to the old MBDs.
4. The clauses of new MBDs become more standardized and operable. The Clauses of Force Majeure, Resolution of Disputes, Tax and Duties, Performance Security and Fraud and Corruption are almost the same across all MBDs which have
these Clauses. The National Competitive Bidding Document for Procurement of Works replaced the over-complicated FIDIC Clauses with simpler Contract Clauses which are much easier to understand and to implement.
5. The Contract Documents are more specialized. In case of consultants services, the old MBDs only contained one type of Contract suitable for consulting firms for “Complex and Time-based Assignment ”. However, in order to meet different requirement, there are four types of contracts in new MBDs for consultant services, i.e. Contract for Complex and Time-based Assignment, Contract for Lump Sun Remuneration, Contract for Long Term Individual Consultant and Contract for Short Term Individual Consultant. The respective MBD has been prepared by MOF according to different type of procurement and different requirements of each sector.
6. The new MBDs contains clauses dealing with the sensitive issue of fraud and corruption, such as “The bidder shall furnish information as described in paragraph 7 of the Form of Bid on commission or gratuities, if any , paid or to be paid to agents relating to this Bid, and to contract execution if the bidder is awarded the contract”, etc.
In order to enable readers better understand and take command of these MBDs, we have prepared a set of User’s Manual for reference.