【Weekly Topic】10-12-20 Why is it necessary to conduct qualification checks on potential bidders?

Article 18 of the Law on Bidding and Tendering stipulates that the tenderer may, in accordance with the requirements of the bidding project itself, require potential bidders to provide relevant qualification certificates and performance records in the bidding announcement or tender invitation, and conduct a qualification review of such potential bidders； **Where there are provisions regarding the qualifications of bidders, such provisions shall apply. The tenderer shall not impose unreasonable conditions to restrict or exclude potential bidders; potential bidders refer to suppliers or contractors who are aware of the tendering competition announced by the tenderer. Examining the qualifications of potential bidders is both a right of the tenderer and a procedure that is commonly followed in most tendering processes. This program is of great significance for protecting the interests of the tenderer and ensuring the smooth progress of tendering and bidding activities. The qualification review process is intended to eliminate potential bidders or contractors whose qualifications are not suitable for undertaking or fulfilling the contract during the bidding process. Such a procedure is particularly useful for complex or high-value tendering projects, and it is also very helpful for projects with lower value but that are technically complex or highly specialized. If this procedure is bypassed and the bid documents of the bidders are examined and compared directly, it will not only be much more expensive but also take considerably more time. By adopting a qualification process, the number of bid documents that the tenderer needs to evaluate and compare can be reduced. Furthermore, suppliers or contractors with good credit and high capabilities often do not wish to compete with unqualified or poorly-reputed ones, in order to avoid losing their reputation. Therefore, the qualification process may be an important factor for these potentially qualified and capable bidders in deciding whether to submit additional bids. Generally speaking, qualification review can be divided into pre-qualification and post-qualification review. Prequalification is the process of assessing the eligibility of potential bidders prior to issuing a tender ； Post-qualification review is the assessment of bidders’ qualifications conducted after bidding (usually after the bid opening). Whether during the pre-screening or post-screening phase, the main purpose is to determine whether potential bidders or actual bidders meet the following conditions: (1) Having the right to enter into contracts independently ； 　　(2) Having the **capacity to perform the contract, including professional and technical qualifications and capabilities, the condition of funds, equipment, and other physical facilities, management capabilities, experience, reputation, and appropriate staff** ； 　　(3) No crimes or serious illegal acts related to contract fraud within the year. Furthermore, if there are **other provisions regarding the qualifications of bidders, the tenderer must comply with those provisions and must not set requirements that conflict with them or are lower than those provisions. For example, **in the bidding process for major construction projects**, it is required that only first-class construction companies be allowed to undertake the work; therefore, the tenderer cannot permit construction companies of second class or lower to submit bids. Without compromising trade secrets, potential or actual bidders shall submit to the tenderer the statutory certification documents or other materials that can prove the aforementioned qualifications and performance records. 　　The tenderer shall specify in the tender announcement or invitation to bid whether qualification review will be conducted, as well as the requirements and criteria for such review. These requirements and standards should apply equally to all potential bidders or bidders. The tenderer shall not establish any standards, requirements, or procedures that are not objectively reasonable in order to restrict or exclude bidders, as this would result in unfair treatment of those bidders and ultimately limit competition. 　　The tendering authority shall, in accordance with the requirements and standards specified in the tender announcement or invitation to bid, examine the qualifications of potential bidders or bidders by reviewing the certification documents and materials submitted by them, and then make a decision regarding their qualifications. The tenderer shall inform potential tenderers or bidders whether they have passed the review. 　　Currently, in tender documents, tenderers often adopt a prequalification procedure and issue separate prequalification announcements. A prequalification announcement should generally include the following contents: (1) The name and address of the tendering entity ； 　　(2) Nature and quantity of the tendered projects ； 　　(3) Location and time requirements for the bidding project ； 　　(4) Methods, locations, and times for obtaining the prequalification documents ； 　　(5) Fees charged for the prequalification documents ； 　　(6) Location and deadline for submitting the prequalification application ； 　　(7) Schedule for prequalification.

Article 18 of the Law on Bidding and Tendering stipulates that the tenderer may, in accordance with the requirements of the specific bidding project, require potential bidders to provide relevant qualification certificates and performance records in the bidding announcement or invitation to bid, and conduct a qualification review of such potential bidders； **Where there are provisions regarding the qualifications of bidders, such provisions shall apply. The tenderer shall not impose unreasonable conditions to restrict or exclude potential bidders; potential bidders refer to suppliers or contractors who are aware of the tendering competition announced by the tenderer. Examining the qualifications of potential bidders is both a right of the tenderer and a procedure that is commonly followed in most tendering processes. This program is of great significance for protecting the interests of the tenderer and ensuring the smooth progress of tendering and bidding activities. Qualification review can be divided into pre-qualification and post-qualification review. Prequalification is the process of assessing the eligibility of potential bidders prior to issuing a tender ； Post-qualification review is the assessment of bidders’ qualifications conducted after bidding (usually after the bid opening). Whether during the pre-screening or post-screening phase, the main purpose is to determine whether potential bidders or actual bidders meet the following conditions: (1) having the right to enter into contracts independently ； (2) Having the **capacity to perform the contract, including professional and technical qualifications and capabilities, the condition of funds, equipment, and other physical facilities, management capabilities, experience, reputation, and appropriate staff** ； No crimes or serious illegal acts related to contract fraud within (3 years). Furthermore, if there are **other provisions regarding the qualifications of bidders, the tenderer must comply with those provisions and must not set requirements that conflict with them or are lower than those provisions. For example, **in the bidding process for major construction projects**, it is required that only first-class construction companies be allowed to undertake the work; therefore, the tenderer cannot permit construction companies of second class or lower to submit bids. Without compromising trade secrets, potential or actual bidders shall submit to the tenderer the statutory certification documents or other materials that can prove the aforementioned qualifications and performance records.

Article 18 of the Law on Bidding and Tendering stipulates that the tenderer may, in accordance with the requirements of the bidding project itself, require potential bidders to provide relevant qualification certificates and performance records in the bidding announcement or tender invitation, and conduct a qualification review of such potential bidders； **Where there are provisions regarding the qualifications of bidders, such provisions shall apply. The tenderer shall not impose unreasonable conditions to restrict or exclude potential bidders; potential bidders refer to suppliers or contractors who are aware of the tendering competition announced by the tenderer. Examining the qualifications of potential bidders is both a right of the tenderer and a procedure that is commonly followed in most tendering processes. This program is of great significance for protecting the interests of the tenderer and ensuring the smooth progress of tendering and bidding activities. 　　The qualification review process is intended to eliminate potential bidders or contractors whose qualifications are not suitable for undertaking or fulfilling the contract during the bidding process. Such a procedure is particularly useful for complex or high-value tendering projects, and it is also very helpful for projects with lower value but that are technically complex or highly specialized. If this procedure is bypassed and the bid documents of the bidders are examined and compared directly, it will not only be much more expensive but also take considerably more time. By adopting a qualification process, the number of bid documents that the tenderer needs to evaluate and compare can be reduced. Furthermore, suppliers or contractors with good credit and high capabilities often do not wish to compete with unqualified or poorly-reputed ones, in order to avoid losing their reputation. Therefore, the qualification process may be an important factor for these potentially qualified and capable bidders in deciding whether to submit additional bids. 　　Generally speaking, qualification review can be divided into pre-qualification and post-qualification review. Prequalification is the process of assessing the eligibility of potential bidders prior to issuing a tender ； Post-qualification review is the assessment of bidders’ qualifications conducted after bidding (usually after the bid opening). Whether during the pre-screening or post-screening phase, the main purpose is to determine whether potential bidders or actual bidders meet the following conditions: (1) Having the right to enter into contracts independently ； 　　(2) Having the **capacity to perform the contract, including professional and technical qualifications and capabilities, the condition of funds, equipment, and other physical facilities, management capabilities, experience, reputation, and appropriate staff** ； 　　(3) No crimes or serious illegal acts related to contract fraud within the year. Furthermore, if there are **other provisions regarding the qualifications of bidders, the tenderer must comply with those provisions and must not set requirements that conflict with them or are lower than those provisions. For example, **in the bidding process for major construction projects**, it is required that only first-class construction companies be allowed to undertake the work; therefore, the tenderer cannot permit construction companies of second class or lower to submit bids. Without compromising trade secrets, potential or actual bidders shall submit to the tenderer the statutory certification documents or other materials that can prove the aforementioned qualifications and performance records. 　　The tenderer shall specify in the tender announcement or invitation to bid whether qualification review will be conducted, as well as the requirements and criteria for such review. These requirements and standards should apply equally to all potential bidders or bidders. The tenderer shall not establish any standards, requirements, or procedures that are not objectively reasonable in order to restrict or exclude bidders, as this would result in unfair treatment of those bidders and ultimately limit competition. 　　The tendering authority shall, in accordance with the requirements and standards specified in the tender announcement or invitation to bid, examine the qualifications of potential bidders or bidders by reviewing the certification documents and materials submitted by them, and then make a decision regarding their qualifications. The tenderer shall inform potential tenderers or bidders whether they have passed the review. 　　Currently, in tender documents, tenderers often adopt a prequalification procedure and issue separate prequalification announcements. A prequalification announcement should generally include the following contents: (1) The name and address of the tendering entity ； 　　(2) Nature and quantity of the tendered projects ； 　　(3) Location and time requirements for the bidding project ； 　　(4) Methods, locations, and times for obtaining the prequalification documents ； 　　(5) Fees charged for the prequalification documents ； 　　(6) Location and deadline for submitting the prequalification application ； 　　(7) Schedule for prequalification.

Bidders for tendered projects must possess the capability to undertake such projects. This is a prerequisite for ensuring that, once awarded the contract, the bidder can fulfill its contractual obligations effectively and complete the project to the required standard and volume; it is also the key factor determining the success of the tender. To this end, the tenderer has the right and shall examine the qualifications of the bidders to determine whether they possess the capability to undertake a particular tender project. In accordance with Article 18 of the Law on Bidding and Tendering, the tenderer may, based on the requirements of the specific bidding project, require potential bidders to provide relevant qualification certificates and records of past performance in the bidding announcement or invitation to bid, and conduct a qualification review of such potential bidders; **if there are specified qualifications required for bidders, those specifications shall be followed. Therefore, the tenderer’s right to assess the qualifications of bidders includes two aspects: one is the right to require bidders to provide their qualification information, and the other is the right to conduct a actual review of those qualifications. 1. The tenderer may, depending on the specific circumstances of the tender project, require potential bidders to provide relevant qualification certificates and performance records; for example, the bidder may be asked to submit a qualification certificate issued by ** or a relevant department for carrying out leather-related projects, or awards received for completing a particular project, etc ； Bidders may also be requested to provide a description of their production and operation activities during the period prior to this bidding, as well as relevant financial statements, etc. The tenderer’s aforementioned requirements regarding bidders can be clearly stated in the tender announcement or invitation to bid, or in a separately issued prequalification announcement. It should be noted that in regular trade activities outside of tendering processes, due to the specific nature of the trading partners, it is relatively simple for purchasers to conduct credit investigations, and various methods can be employed. In tender projects, however, the number of parties subject to investigation by the tenderer can range from just a few to dozens; as a result, the tenderer is unable to conduct thorough investigations on each of the numerous bidders. Instead, it relies on prequalification procedures, requiring potential bidders to provide information about their credit status in order to assess their bidding capabilities. Therefore, it is an important right of the tenderer to require bidders to provide proof of their qualifications and relevant performance records. Bidders should answer truthfully any questions raised by the tenderer regarding their qualifications; otherwise, they will lose their eligibility to win the bid. The tenderer’s qualification review of bidders usually includes the following aspects: (1) Review of the legality of the bidder’s submission, including whether the bidder is a formally registered legal entity or other organization ； Does it have the ability to sign contracts independently? ； Is it in normal operating condition? ； Such as whether the entity is under an order to suspend operations, whether any of its assets have been seized or frozen, whether there are any instances of collusive bidding, and whether it is currently within a penalty period that prohibits it from participating in bids, etc ； Upon review, if it is confirmed that the bidder has legitimate circumstances, they should be excluded. (2) Review of the bidder’s bidding capability. It mainly includes the following aspects: understanding the general information of the bidder, namely the bidder’s name, address, phone number, business level and capital, financial status over the past few years, as well as the remaining capacity for undertaking projects that have already been assigned ； Examine the bidder’s experience and reputation to determine whether they have prior experience in completing similar projects in terms of type, scale, structure, complexity, as well as the technologies and construction methods used; whether they have a record of delivering high-quality goods or services of a similar nature; whether they have received positive feedback from previous project owners; what their performance has been during the period leading up to the bidding; and their past track record of fulfilling commitments ； To assess the bidder’s financial capacity, it is necessary to examine whether it has sufficient working capital to complete the project as well as guarantee documents provided by reputable banks, and to review its asset situation ； The evaluation of a bidder’s staffing capabilities involves examining the educational background and management experience of the key personnel who will be responsible for carrying out the project specified in the tender, to determine whether there are sufficient individuals with the appropriate qualifications to handle the implementation of the tasks ； Review the equipment allocation and technical capabilities of the completed projects to determine whether they possess the appropriate equipment and machinery needed to carry out the tendered projects, whether such equipment is in good working condition, and whether there is sufficient technical support available. In accordance with the provisions of the first paragraph of this article, **where qualification requirements for bidders are specified, the tenderer shall use these standards to assess the bidding qualifications of the bidders. **Where mandatory standards are specified, bidders must comply with those standards.

Bidders for tendered projects must possess the capability to undertake such projects. This is a prerequisite for ensuring that, once awarded the contract, the bidder can fulfill its contractual obligations effectively and complete the project to the required standard and volume; it is also the key factor determining the success of the tender. To this end, the tenderer has the right and shall examine the qualifications of the bidders to determine whether they possess the capability to undertake a particular tender project. In accordance with Article 18 of the Law on Bidding and Tendering, the tenderer may, based on the requirements of the specific bidding project, require potential bidders to provide relevant qualification certificates and records of past performance in the bidding announcement or invitation to bid, and conduct a qualification review of such potential bidders; **if there are specified qualifications required for bidders, those specifications shall be followed. Therefore, the tenderer’s right to assess the qualifications of bidders includes two aspects: one is the right to require bidders to provide their qualification information, and the other is the right to conduct a actual review of those qualifications.

Article 18 of the Law on Bidding and Tendering stipulates that the tenderer may, in accordance with the requirements of the bidding project itself, require potential bidders to provide relevant qualification certificates and performance records in the bidding announcement or tender invitation, and conduct a qualification review of such potential bidders； **Where there are provisions regarding the qualifications of bidders, such provisions shall apply. The tenderer shall not impose unreasonable conditions to restrict or exclude potential bidders; potential bidders refer to suppliers or contractors who are aware of the tendering competition announced by the tenderer. Examining the qualifications of potential bidders is both a right of the tenderer and a procedure that is commonly followed in most tendering processes. This program is of great significance for protecting the interests of the tenderer and ensuring the smooth progress of tendering and bidding activities. It is divided into pre-qualification and post-qualification review.

The qualification review process is intended to eliminate potential bidders or contractors whose qualifications are not suitable for undertaking or fulfilling the contract during the bidding process. Such a procedure is particularly useful for complex or high-value tendering projects, and it is also very helpful for projects with lower value but that are technically complex or highly specialized. If this procedure is bypassed and the bid documents of the bidders are examined and compared directly, it will not only be much more expensive but also take considerably more time. By adopting a qualification process, the number of bid documents that the tenderer needs to evaluate and compare can be reduced. Furthermore, suppliers or contractors with good credit and high capabilities often do not wish to compete with unqualified or poorly reputed ones; therefore, the qualification process may be an important factor for these highly qualified potential bidders in deciding whether to submit bids or not. Generally speaking, qualification review can be divided into pre-qualification and post-qualification review.

(1) The right to enter into contracts independently； (2) Having the **capacity to perform the contract, including professional and technical qualifications and capabilities, the condition of funds, equipment, and other physical facilities, management capabilities, experience, reputation, and appropriate staff** ； No crimes or serious illegal acts related to contract fraud within (3 years). Furthermore, if there are **other provisions regarding the qualifications of bidders, the tenderer must comply with those provisions and must not set requirements that conflict with them or are lower than those provisions. For example, **in the bidding process for major construction projects**, it is required that only first-class construction companies be allowed to undertake the work; therefore, the tenderer cannot permit construction companies of second class or lower to submit bids. Without compromising trade secrets, potential or actual bidders shall submit to the tenderer the statutory certification documents or other materials that can prove the aforementioned qualifications and performance records.

Article 18 of the Law on Bidding and Tendering stipulates that the tenderer may, in accordance with the requirements of the bidding project itself, require potential bidders to provide relevant qualification certificates and performance records in the bidding announcement or tender invitation, and conduct a qualification review of such potential bidders； **Where there are provisions regarding the qualifications of bidders, such provisions shall apply. The tenderer shall not impose unreasonable conditions to restrict or exclude potential bidders; potential bidders refer to suppliers or contractors who are aware of the tendering competition announced by the tenderer. Examining the qualifications of potential bidders is both a right of the tenderer and a procedure that is commonly followed in most tendering processes. This program is of great significance for protecting the interests of the tenderer and ensuring the smooth progress of tendering and bidding activities. The qualification review process is intended to eliminate potential bidders or contractors whose qualifications are not suitable for undertaking or fulfilling the contract during the bidding process. Such a procedure is particularly useful for complex or high-value tendering projects, and it is also very helpful for projects with lower value but that are technically complex or highly specialized. If this procedure is bypassed and the bid documents of the bidders are examined and compared directly, it will not only be much more expensive but also take considerably more time. By adopting a qualification process, the number of bid documents that the tenderer needs to evaluate and compare can be reduced. Furthermore, suppliers or contractors with good credit and high capabilities often do not wish to compete with unqualified or poorly-reputed ones, in order to avoid losing their reputation. Therefore, the qualification process may be an important factor for these potentially qualified and capable bidders in deciding whether to submit additional bids. Generally speaking, qualification review can be divided into pre-qualification and post-qualification review. Prequalification is the process of assessing the eligibility of potential bidders prior to issuing a tender ； Post-qualification review is the assessment of bidders’ qualifications conducted after bidding (usually after the bid opening). Whether during the pre-screening or post-screening phase, the main purpose is to determine whether potential bidders or actual bidders meet the following conditions: (1) having the right to enter into contracts independently ； (2) Having the **capacity to perform the contract, including professional and technical qualifications and capabilities, the condition of funds, equipment, and other physical facilities, management capabilities, experience, reputation, and appropriate staff** ； No crimes or serious illegal acts related to contract fraud within (3 years). Furthermore, if there are **other provisions regarding the qualifications of bidders, the tenderer must comply with those provisions and must not set requirements that conflict with them or are lower than those provisions. For example, **in the bidding process for major construction projects**, it is required that only first-class construction companies be allowed to undertake the work; therefore, the tenderer cannot permit construction companies of second class or lower to submit bids. Without compromising trade secrets, potential or actual bidders shall submit to the tenderer the statutory certification documents or other materials that can prove the aforementioned qualifications and performance records. The tenderer shall specify in the tender announcement or invitation to bid whether qualification review will be conducted, as well as the requirements and criteria for such review. These requirements and standards should apply equally to all potential bidders or bidders. The tenderer shall not establish any standards, requirements, or procedures that are not objectively reasonable in order to restrict or exclude bidders, as this would result in unfair treatment of those bidders and ultimately limit competition. The tendering authority shall, in accordance with the requirements and standards specified in the tender announcement or invitation to bid, examine the qualifications of potential bidders or bidders by reviewing the certification documents and materials submitted by them, and then make a decision regarding their qualifications. The tenderer shall inform potential tenderers or bidders whether they have passed the review. Currently, in tender documents, tenderers often adopt a prequalification procedure and issue separate prequalification announcements. A prequalification announcement should generally include the following contents: (1) the name and address of the tenderer ； (2) Nature and quantity of the tendered projects ； (3) Location and time requirements for the bidding project ； (4) Methods, locations, and times for obtaining the prequalification documents ； (5) Fees charged for the prequalification documents ； (6) Location and deadline for submitting the prequalification application ； (7) Schedule for prequalification.

Qualification review can be divided into pre-qualification and post-qualification review. Prequalification is the process of assessing the eligibility of potential bidders prior to bidding ； Post-qualification review is the assessment of bidders’ qualifications conducted after bidding (usually after the bid opening). Whether during the pre-screening or post-screening phase, the main purpose is to determine whether potential bidders or actual bidders meet the following conditions: (1) having the right to enter into contracts independently ； (2) Having the **capacity to perform the contract, including professional and technical qualifications and capabilities, the condition of funds, equipment, and other physical facilities, management capabilities, experience, reputation, and appropriate staff** ； (3) Past performance in handling similar projects ； (4) Not under an order to suspend operations, with assets seized or frozen, or in a state of bankruptcy ； (5) No crimes or serious illegal acts related to contract fraud in the recent years (such as the past three years). Furthermore, if there are **other provisions regarding the qualifications of bidders, the tenderer must comply with those provisions and must not set requirements that conflict with them or are lower than those provisions. For example, **in the bidding process for the construction of major infrastructure projects**, it is required that only first-class construction companies be allowed to undertake the work; therefore, the tenderer cannot permit construction companies of second class or lower to submit bids. Without compromising trade secrets, potential or actual bidders shall submit to the tenderer the statutory certification documents or other materials that can prove the aforementioned qualifications and performance records.