Trade and Industry Department Review Body on Bid Challenges

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Review Body on Bid Challenges

Rules of Operation of the Review Body on Bid Challenges
(under the World Trade Organization Agreement on Government Procurement)
(Revised - July 2007)

Definitions

1.	In this document, unless the context otherwise requires, the following words and expressions shall have the following meanings.

	"procuring entities" means those procuring entities specified in Annexes I to III in Appendix I of Hong Kong, China's schedule of commitments under the World Trade Organization Agreement on Government Procurement (GPA).

	"relevant procurements" means procurements covered by the GPA and referred to in Appendix I thereto of estimated contract value not less than the relevant thresholds specified in Annexes I to V of Hong Kong, China's schedule of commitments under the GPA.

	"Review Body" means the Review Body on Bid Challenges established pursuant to Article XX of the GPA.

	"supplier" means a supplier or a potential supplier (of goods or services) who has or has had an interest in a relevant procurement. Suppliers from Parties to the GPA as well as those from economies which are not Parties to the GPA are included.

	"Panel" means a group of three independent persons comprising the Chairman of the Review Body and two members appointed by the Chairman. It is convened to examine challenges lodged by suppliers against alleged breaches of the GPA by procuring entities in relevant procurements.

	"working day" means any day not being -
	(a)	a Saturday;
	(b)	a general holiday under the General Holidays Ordinance (Cap. 149); or
	(c)	a gale warning day or black rainstorm warning day as defined in section 71(2) of the Interpretation and General Clauses Ordinance (Cap. 1).

The Review Body

The Review Body provides a formal, dedicated, impartial and independent mechanism to consider challenges by suppliers against alleged breaches of the GPA by procuring entities in relation to relevant procurements.

The Review Body may only consider challenges against any alleged breaches of the GPA in the context of a relevant procurement which is preceded by an invitation to tender or an invitation for applications to be pre-qualified to tender issued by the procuring entity after the establishment of the Review Body in the Hong Kong Special Administrative Region.

The duties, functions and powers of the Review Body are to :

(a)	receive from suppliers challenges made in respect of alleged breaches of the GPA by procuring entities arising in the context of relevant procurements in which they have, or have had, an interest;
(b)	conduct inquiries only in respect of challenges made by suppliers in accordance with Clause 4(a) above; and
(c)	make determinations and recommendations in accordance with the Rules of Operation.

Establishment and Composition of the Review Body

5.	The Review Body comprises twelve members, viz. one Chairman, two Deputy Chairmen and nine members. They are appointed by the Secretary for Commerce and Economic Development.

6.	The Chairman, Deputy Chairmen and members are selected from a wide spectrum of society. The Chairman and the two Deputy Chairmen shall have legal qualification. One of the Deputy Chairmen will assume the duties of the Chairman when the latter is not available. In case the Chairman and both of the two Deputy Chairmen are not available and there are matters requiring urgent attention by the Review Body, the Secretary for Commerce and Economic Development will appoint a member with legal qualification as acting Chairman as deemed appropriate to deal with these matters.

7.	The Review Body is serviced by a Secretariat within the Trade and Industry Department. The Secretariat is responsible to the Review Body through the Chairman.

Registration and Declaration of Interests by Members of the Review Body

The Chairman, Deputy Chairmen and members shall register in writing their personal interest (and those of their spouses, and children under 18), direct or indirect, pecuniary or otherwise, when they are first appointed, and annually thereafter, to the Secretariat. They also should advise the Secretariat of any changes to their registrable interests as soon as such changes have occurred. A set of "Guidance Notes on the Possible and Potential Conflict of Interest" is at Appendix I to give details of this subject. Registration form of Members' registrable interests is at Appendix II.

Bid Challenge Process

(i)

Filing of Challenges

A challenge shall be lodged within 10 working days after the supplier knew or reasonably should have known the basis of the challenge. All challenges must be lodged in the prescribed form.

10.

If the complainant wishes to request rapid interim measures, he shall state the request with justification or written representation clearly in the challenge lodged.

11.

The Secretariat will acknowledge receipt of the challenge as soon as it is received. If the challenge is not lodged in the prescribed form or the complainant has not filed sufficient information as required in the prescribed form, the Secretariat shall notify the complainant on the deficiencies to be corrected and the required information must be submitted by the complainant within 14 working days from the issue of the notification by the Secretariat. A "Notification of Receipt of Bid Challenge" shall be issued to the complainant by the Secretariat once the complaint form is confirmed to have been completed and all the required information as required in the prescribed form is received.

12.

The Chairman may receive and consider a late challenge (i.e. a challenge which is not lodged within 10 working days after the complainant knew or reasonably should have known the basis of challenge), if he finds that reasonable cause for the delay is shown. However, a challenge shall not be considered if it is filed later than 30 working days after the complainant knew or reasonably should have known the basis of the challenge.

13.

The Chairman shall decide, within 7 working days from the issue of the "Notification of Receipt of Bid Challenge" under Clause 11, whether a prima facie case is established for the challenge to be accepted for inquiry and a Panel to be appointed to consider the challenge. In making the decision, the Chairman shall, inter alia, take into consideration the following conditions in respect of the challenge -

(a)	the challenge is made in respect of a procurement covered by the GPA;
(b)	the complainant is a supplier or a potential supplier who has or has had an interest in the procurement concerned;
(c)	the information provided by the complainant discloses a reasonable indication that the procurement has not been carried out in accordance with the provisions of the GPA;
(d)	the challenge is filed within the prescribed time limits; and
(e)	the complainant has filed sufficient information.

The Chairman, on the basis of the information provided in the complaint form, may come to the view that the challenge should not be accepted for inquiry or he may request further information from the complainant to help him decide whether the challenge should be accepted for inquiry.

(ii)

Establishment of a Panel

14.

If and when the Chairman considers that a challenge should be accepted for inquiry, he shall appoint a panel to conduct an inquiry. Not later than 2 working days after receipt of the Chairman's decision, the Secretariat shall inform the parties concerned in writing of the decision and the establishment of a Panel together with details of the challenge. The procuring entity shall also be informed of details of the complainant's request for rapid interim measures, if any.

15.

Each Panel shall comprise a Chairman ¹ as the head, and two members to be appointed by the Chairman. The Panel may perform all of the Review Body's duties and functions and may exercise all of its powers including the power to extend the deadlines laid down in the Rules when necessary based on the facts of the challenge.

16.

The Chairman and the members shall have one vote each on a question before a Panel and a decision shall be taken by simple majority. However, if the Panel has three different views on a question, the Chairman can make a ruling which he considers to be the appropriate one in the circumstances.

17.

If two or more challenges are lodged by different suppliers and it appears to the Panel that -

(a)

the challenges arise out of the same procurement; or

(b)

it would be in the interests of justice to do so,

the Panel may decide to hear such challenges together or one immediately after another.

18.

If at any stage of the proceedings, the Panel considers that the bringing of a joint challenge may prejudice the procuring entity or the supplier, it may decide that challenges of all or any of the parties represented shall be inquired into, heard and determined separately.

19.

If the terms of appointment of the Chairman or either one of the Deputy Chairmen presiding at a Panel, or that of a member selected for a Panel, expires during the proceedings of the Panel, the Chairman, Deputy Chairman or member shall continue to exercise his functions in that particular Panel until the proceedings of the challenge are completed.

¹ If a Panel is established with a Deputy Chairman or any other member as acting Chairman, the Deputy Chairman or the member will continue to serve as head of the Panel until the case is over.

(iii)

Recommendation of Rapid Interim Measures

20.

The procuring entity concerned may make representations in writing to the Panel regarding the implementation of rapid interim measures. If the procuring entity concerned so wishes, it may make written representations to the Panel not later than 5 working days after receiving notifications on the establishment of the Panel and details of the complainant's request for rapid interim measures.

21.

The Panel may, not later than 10 working days after the day it is established, recommend any appropriate rapid interim measures to correct breaches of the GPA or to preserve commercial opportunities. The Panel shall take into account the request and justification/written representations from the complainant for rapid interim measures and representations, if any, made by the procuring entity in writing under Clause 20 or on its own initiative, come to the view that such measures may need to be considered by the procuring entity. The Panel shall inform the procuring entity and the complainant as soon as practicable of its decisions on the recommendation of rapid interim measures.

22.

Within 7 working days from the issue of the notification on the recommended rapid interim measures, the procuring entity shall advise the Panel whether it will implement fully the recommended rapid interim measures, and if not, the reasons for not doing so, such as potential damage to the commercial interests of the procuring entity, any other overriding adverse consequences of implementing the recommendation, or the public interest.

(iv)

Panel Review and Hearing

23.

If the procuring entity wishes to submit a written response to the challenge lodged by the supplier, it must do so not later than 30 working days after the issue of the notification of the establishment of the Panel.

24.

Where the Panel conducts an inquiry into a challenge, it shall consider the facts of the challenge, including all the written representations received, and determine whether the procurement was conducted in accordance with the requirements set out in the GPA. Hearings in respect of a challenge will be convened upon the request of the complainant or the procuring entity, or if the Panel, on its own initiative, comes to the view that there is such a need based on the facts of the challenge. The Panel may decide to stay or adjourn the review process on its own initiative or at the request of a party to the proceedings if there is a related judicial proceeding or quasi-judicial proceeding. Any such period of stay or adjournment shall be excluded in reckoning any period of time prescribed by the Rules for doing any act. Detailed procedures and practices for conducting hearings are at Appendix III.

25.

All the parties concerned shall have access to all proceedings. Any communication made by one party to the Panel (save and except information classified as "confidential" which was governed by the procedures as specified in Clauses 33 and 34) shall be copied to the other parties at the same time and all communications to the Panel shall bear a note stating that such copies have been made. Where the Panel sends any communication to one party, it shall send a copy of the same to other parties at the same time unless the said communication contains information which has been classified as "confidential" in which case the procedures as specified in Clauses 33 and 34 shall apply.

(v)

Findings and Recommendations

26.

The Panel will determine the validity of a challenge and the recommended corrective measures or compensation which will be limited to the cost for tender preparation or protest, within 90 working days after the date when "Notification of Receipt of Bid Challenge" is issued. The Panel may, when necessary based on the facts of the challenge, extend the time for arriving at a determination/recommendation, but in no circumstances shall the inquiry process last beyond 180 working days after the date when "Notification of Receipt of Bid Challenge" is issued.

27.

Where the Panel determines that a challenge is valid viz., the Panel finds that there has been a breach of the GPA, it may recommend such remedy as it considers appropriate. The Panel will also make a written report of its opinions or recommendations on the challenge, together with a statement describing the basis of its opinions or recommendations.

28.

The procuring entity shall use reasonable endeavours to implement the recommendations and advise the Panel in writing within 30 working days from the date of notification issued by the Secretariat regarding the measures it intends to take or the reasons for not taking such measures.

29.

If the procuring entity considers that it is unable, notwithstanding the use of such reasonable endeavours, to implement any recommendations made by the Panel, it shall advise the Panel of the reasons for not so doing in writing within 30 working days from the date of notification issued by the Secretariat pursuant to Clause 28 above, which may include, without limitation, potential damage to the commercial interests of the procuring entity, any other overriding adverse consequences of implementing the recommendation, or the public interest. Under this situation, the Panel may, within 30 working days, from the date of receipt by the Panel of the procuring entity's decision, make further recommendations regarding compensation for the loss or damages suffered by the complainant (which will be limited to the cost for tender preparation or protest). The procuring entity shall use reasonable endeavours to comply with any such recommendation and inform the Panel in writing, within 14 working days from receiving the recommendations, the reasons if the procuring entity does not intend to implement fully the recommendations such as potential damage to the commercial interests of the procuring entity, any other overriding adverse consequences of implementing the recommendation, or the public interest.

(vi)

Withdrawal of Challenge

30.

A complainant may withdraw a challenge at any time after it is lodged by notifying the Secretariat in writing.

(vii)

Additional Information

31.

The Panel may at any time upon receipt of a challenge, request any information relating to the relevant procurement including confidential information (please see confidential information as defined in Clauses 33 and 34) in the possession, custody or power of the parties concerned for the purpose of facilitating the investigation into or determination on the challenge. The parties concerned shall provide such information requested by the Panel expeditiously.

32.

The parties concerned may refuse to disclose information if the disclosure of such information would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate commercial interest of particular enterprises, public or private, or might prejudice fair competition between suppliers, or would be in breach of legal professional privilege or confidentiality between the party concerned and a third party (where the party concerned is unable to obtain the consent of the third party to disclose such information). A party who refuses to disclose such information shall state the reasons in writing to the Panel.

(viii)

Confidential Information

33.

In submitting information to the Panel, a party may request the Panel to classify certain information as confidential information which would be made available only to members of the Panel. Under such circumstances, the party must provide the Panel with -

(a)

a statement identifying the information that the party wishes to keep confidential, together with an explanation as to why the information should be classified as confidential;

(b)

a non-confidential description of the confidential information, which should contain sufficient details to convey a reasonable understanding of the substance of the confidential information;

(c)

a non-confidential description of the confidential information, which should contain sufficient details to convey a reasonable understanding of the substance of the confidential information;

(d)

one set of documents from which the confidential information has been deleted.

The party shall copy to other parties concerned a set of documents on (b) and (d) above. All confidential information provided to the Panel will be used for the sole deliberation of the Panel and will be kept strictly confidential.

34.

Where information given or elicited in the course of any proceedings before the Panel is, in the opinion of the Panel, by its nature confidential, the information shall not knowingly be disclosed by any member, the Secretariat or any person attending the hearing. The Panel may hear the views of the parties involved in the proceedings before deciding whether the information shall be classified as confidential.

(ix)

Release of the Panel's Report

35.

The Panel's report shall be made available to the complainant and the procuring entity concerned. Information classified as confidential will be excised from the report. Panel decisions will be made available to the public on request.

(x)

Languages

36.

The proceedings of the Review Body may be conducted in Chinese or English, or both as the Panel thinks fit. An interpretation service shall be provided by the Secretariat as necessary.

(xi)

Others

37.

The Trade and Industry Department may at any time and from time to time devise detailed rules and procedures consistent with the rules contained in this document to formulate the operation of the Review Body.

38.

Members of the Review Body, including the Chairman and the Deputy Chairmen are not liable in law for any act done or omitted to be done by them in relation to the exercise or performance or the purported exercise or performance of the Review Body's duties, functions and powers unless it is proved that the act was done or omitted to be done dishonestly or in bad faith.

39.

The Panel shall have the right to interpret the Rules of Operation in cases of conflict or ambiguity and such interpretation shall be binding on the parties concerned.

Trade and Industry Department
July 2007

APPENDIX I - Guidance Notes on the Possible and Potential Conflict of Interests
(pdf format)

APPENDIX II - Register of Members' Interests of Review Body on Bid Challenges (pdf format)

APPENDIX III - Procedures and Practices for Conducting Bid Challenge Hearing (pdf format)

ANNEX TO APPENDIX III - Proceedings of Bid Challenge Hearing Lodged under Article XX(2) of the World Trade Organisation Agreement on Government Procurement (pdf format)

Last revision date: 26 January 2010