Taiwan’s Public Construction Commission Announced a Draft Amendment to the "Regulations Governing the Recognition of Violations of Laws and Regulations Which Affect the Fairness of the Procurement Pursuant to Article 31, Paragraph 2, Subparagraph 7 of the Government Procurement Act"

On February 6, 2025, Taiwan’s Public Construction Commission of the Executive Yuan (hereinafter referred to as the "PCC") announced a draft amendment to the "Regulations Governing the Recognition of Violations of Laws and Regulations Which Affect the Fairness of the Procurement pursuant to Article 31, Paragraph 2, Subparagraph 7 of the Government Procurement Act" (hereinafter referred to as the "Regulations"). The deadline for submitting opinions on this draft amendment is set for April 8. The Regulations are established by the PCC to define what constitutes "other violations of laws and regulations recognized by the competent authority as affecting the fairness of procurement" stipulated in Article 31, Paragraph 2, Subparagraph 7 of the Government Procurement Act. Prior to the amendment, Subparagraphs 1, 2 and 3 of the Regulations defined such violations based on the constituent elements prescribed in Article 48, Paragraph 1, Subparagraph 2; Article 50, Paragraph 1, Subparagraphs 5 and 7; and each Paragraph of Article 87 of the Government Procurement Act, respectively.
The primary basis for this draft amendment is the interpretation provided in the Supreme Administrative Court's 2022 Shang-Zi Precedent No. 43 (最高行政法院111年度上字第43號判決) (hereinafter referred to as the "Supreme Administrative Court Precedent"), which emphasizes that the content of the Regulations must be clear and specific and should not define "other violations of laws and regulations recognized by the competent authority as affecting the fairness of procurement" in abstract terms. The key points of this draft amendment are outlined below.

1. The pre-amendment Subparagraph 1 of the Regulations is entirely deleted, and the latter part of Subparagraph 2 is reduced. Consequently, "other violations of laws and regulations recognized by the competent authority as affecting the fairness of procurement" will no longer be defined by Article 48, Paragraph 1, Subparagraph 2, and Article 50, Paragraph 1, Subparagraph 7 of the Government Procurement Act.
The pre-amendment Subparagraph 1 and the latter part of Subparagraph 2 of the Regulations referred to Article 48, Paragraph 1, Subparagraph 2 (i.e., "violation of laws and regulations which affect the fairness of the procurement") and Article 50, Paragraph 1, Subparagraph 7 (i.e., "other violation of laws and regulations which affect the fairness of the procurement" ) of the Government Procurement Act. However, these articles were general provisions without specific descriptions of any conduct patterns, thus lacking clarity. This draft amendment deletes Subparagraph 1 and reduces the latter part of Subparagraph 2, no longer referring to Article 48, Paragraph 1, Subparagraph 2 and Article 50, Paragraph 1, Subparagraph 7 of the Government Procurement Act for defining "other violations of laws and regulations recognized by the competent authority as affecting the fairness of procurement" in order to align with the interpretation of the Supreme Administrative Court Precedent.

2. In the amended Subparagraph 1 of the Regulations, it is added to include the situation where the suppliers or their representatives, agents, employees, or other personnel, in conjunction with the entity’s personnel, engage in acts violating the provisions of Article 26, Article 34, or Article 37, Paragraph 1 of the Government Procurement Act.
Articles 26, 34, and Article 37, Paragraph 1 of the Government Procurement Act clearly and specifically stipulate that: (1) the entity must not restrain market competition when drafting tender documents; (2) the entity has a confidentiality obligation regarding tender documents prior to their announcement; and (3) the entity must not unduly restrain market competition when setting qualifications for the bidding suppliers. After the amendment, if a supplier or its representatives, agents, employees, or other personnel collaborate with the entity’s personnel to cause the entity to violate the aforementioned provisions of the Government Procurement Act, such violation will be recognized by the PCC as "other violations of laws and regulations recognized by the competent authority as affecting the fairness of procurement."

3. In the amended Subparagraph 3 of the Regulations, it is added to include acts by the suppliers or their representatives, agents, employees, or other personnel that meet the constituent elements prescribed in Articles 90 and 91 of the Government Procurement Act.
Articles 90 and 91 of the Government Procurement Act respectively prohibit the use of violence or threats to cause the entity’s personnel involved in planning, designing, handling, or supervising the procurement, or the personnel of another suppliers entrusted by the entity, either to provide services of planning, designing, or project management of the procurement, or to conduct the procurement, to refrain from making decisions or to make decisions against their will on matters with respect to the procurement, or to disclose or deliver the confidential documents, drawings, information, items, or any other confidential information related to the procurement. After the amendment, if a supplier or its representatives, agents, employees, or other personnel engage in any of the aforementioned prohibited acts under the Government Procurement Act, such actions will be recognized by the PCC as "other violations of laws and regulations recognized by the competent authority as affecting the fairness of procurement. "

4. In the amended Subparagraph 4 of the Regulations, it is added to include the situation where the suppliers or their representatives, agents, employees, or other personnel, in conjunction with the personnel of another supplier entrusted by the entity to provide services of planning, designing, reviewing, monitoring, project management, or to conduct the procurement, engage in acts that meet the constituent elements prescribed in Articles 88 and 89 of the Government Procurement Act.
Articles 88 and 89 of the Government Procurement Act respectively prohibit imposing unlawful restrictions or reviews on the technologies, technical methodology, materials, equipment, or specifications, as well as disclosing or delivering confidential documents, drawings, information, items, or any other confidential information related to the procurement. After the amendment, if a supplier or its representatives, agents, employees, or other personnel collaborate with the personnel of another suppliers entrusted by the entity to provide services of planning, designing, review, monitoring, project management, or to conduct the procurement, to engage in any of the aforementioned prohibited acts under the Government Procurement Act, such actions will be recognized by the PCC as "other violations of laws and regulations recognized by the competent authority as affecting the fairness of procurement. "
Following the recent amendment, there are now clearer and more specific provisions defining "other violations of laws and regulations recognized by the competent authority as affecting the fairness of procurement, " stipulated in Article 31, Paragraph 2, Subparagraph 7 of the Government Procurement Act. Suppliers and the entity’s personnel must therefore ensure fairness when conducting government procurements. LTP heavily focuses on the areas of public construction tendering and the following contract performance and will continue to monitor the development of the laws and practical interpretations of government procurement.