20 April 2011 | Angeline Albert
public procurement system causes European companies to miss contract
opportunities worth $1 trillion (£611.4 billion).
European businesses are barred from much of this
market through poorly implemented legislation that has led to regulations that
overlap, according to the European UnionChamber of Commerce in China (EUCCC).
The EUCCC, which today published a reportexamining the Chinese public procurement market, is calling for reform after finding the regulatory
framework governing purchasing “is inconsistent and unevenly implemented”.
Common challenges encountered by European business
competing for public contracts included;
• The difficulty
of obtaining timely, accurate information about upcoming projects.
• A lack
of communication of projects’ evaluation criteria.
trend towards decentralisation of tender information - leading to higher costs
and less transparency.
• The unfair
implementation of public procurement awards.
• An unsatisfactory
Gilbert Van Kerckhove, chairman of the EUCCC’s
public procurement working group, said: “The chamber has been working with the
Chinese authorities to continue improving the procurement framework in China
since 2004. This means fixing the little things, often at the local level,
which get in the way of healthy competition.”
The EUCCC, which represents 1,600 companies,
proposed improving the enforcement of existing
public procurement regulations and ensuring this is done consistently nationwide.
It also recommended all details of the
evaluation criteria be disclosed at the time of the bid announcement, that the
evaluation report be distributed to all bidders - both successful and
unsuccessful - promptly when the bid award is announced.
The report added contracting
authorities should ensure price expectations
were in line with market averages in their tenders. These
should also include some calculations and explanation of how this estimate was
Additionally it suggested a standstill
period of seven days be implemented after the tender award (and before
signature of the contract) to allow unsuccessful bidders time to raise
complaints and suggests the creation of an independent, impartial review and
remedies board to enforce the tendering procedure, which companies can complain
The study, Public Procurement in China: European
Business Experiences Competing for Public Contracts in China,estimated
the public procurement market in China represents over 20 per cent of the total
contract opportunities in the country.