Engineering Committee drafts removal of procurement law’s three‑bid limit; local grassroots strongly support

To continuously promote the modernization and rationalization of the government procurement system, the Public Construction Commission (PCC) of the Executive Yuan held a public briefing in Hualien today regarding the direction of amendments to the Government Procurement Act for the eastern region. The meeting widely invited procurement personnel and practical experts from local government agencies at all levels, schools, and related public enterprises in the eastern region. Following the meeting, the PCC stated that core amendment issues of high public concern—including the abolition of the traditional restriction requiring at least three qualified bidders for the first open tender, the long-debated pros and cons of the reserve price system, and the enhancement of overall procurement information transparency—sparked enthusiastic practical discussions among attendees and gained a considerable degree of consensus and support, laying an important public opinion and practical foundation for subsequent amendment work.

Since its official implementation in 1999, the Government Procurement Act has undergone multiple revisions of varying scales and has served as an important legal basis for regulating various construction, property, and service procurements by central and local governments in Taiwan. However, with rapid changes in domestic and international economic environments, the transformation of the industrial structure, and structural challenges such as labor and material shortages facing public works, current procurement regulations have gradually exposed outdated aspects in practical implementation. Particularly in Taiwan's eastern region, due to its unique geographical environment, relatively few large construction companies, and limited scale of local small and medium-sized enterprises, many rigid regulations in the current laws often become major obstacles for local governments in promoting public infrastructure. The PCC specifically traveled deep into the eastern region to hold this briefing with the aim of listening to the voices of frontline procurement personnel and ensuring that future amendments can genuinely resolve pain points in local execution.

One of the most fiercely debated focal points during this briefing was the proposal to abolish the restriction requiring at least three bidders for the first open tender. Historically, the current Procurement Act has required at least three qualified bidders for the first open tender to proceed with the opening of bids. This rule was originally intended to prevent malpractice and achieve better prices through market competition mechanisms. However, in actual operations—especially in relatively resource-scarce areas such as Hualien and Taitung—many highly specialized or smaller-scale procurement cases frequently face the predicament of failed tenders. Bidders hold back due to concerns over bidding costs or low estimated winning probabilities, causing projects to fail repeatedly, which not only seriously delays the progress of local infrastructure development but also increases the administrative costs for administrative agencies to repeatedly process tenders. Eastern regional agency attendees expressed high agreement with this direction, believing that if appropriately relaxed, it would significantly improve the bidding efficiency for public works in remote and eastern regions.

Another highly anticipated amendment direction is the abolition of the reserve price system. Under the current system, agencies handling open tenders mostly need to set a reserve price as a reference basis for award decisions. In practice, however, the estimation of reserve prices often becomes a mere formality and may even disconnect from actual market conditions due to information asymmetry or drastic market price fluctuations, thereby spawning malpractices such as bid rigging, canceled tenders, or collusive bidding. The PCC proposed exploring the direction of abolishing the reserve price system and replacing it with other methods that offer greater market flexibility and information transparency to determine reasonable prices, which triggered extensive discussion among attendees. Many grassroots procurement personnel pointed out that the current reserve price system not only binds agencies' flexibility but also fails to truly reflect cost fluctuations in the construction market. Reforming toward the abolition of reserve prices and strengthening market mechanisms and rational price assessments will help simplify procurement procedures and reduce unnecessary legal and administrative pressure on agency handlers.

In addition to these two key reforms, enhancing the transparency of procurement information is also one of the core demands of this amendment briefing. With the advent of the big data era and strict societal demands for openness and transparency in government administration, utilizing digital technology to make the procurement process more open and subject to public evaluation has become an irreversible trend. The PCC emphasized that increasing the transparency of procurement information can not only effectively prevent bid-and-rig and corrupt behaviors, but also allow more potential outstanding bidders to participate fairly in competition, expanding market participation. Agency representatives from the eastern region generally held a positive attitude toward this, believing that information transparency helps build a healthier procurement ecosystem and reduces local rumors and unnecessary doubts.

Overall, the eastern region amendment briefing held by Hualien by the PCC has not only successfully built a bridge of dialogue between central regulatory policy makers and local practical executors, but has also proposed forward-looking reform directions targeting long-criticized pain points in the Procurement Act. From abolishing the three-bidder restriction and reviewing the reserve price system to strengthening information transparency, these changes directly address the critical bottlenecks in the current promotion of public works. With the successful conclusion of the eastern briefing and the support gained from the practical sector, the PCC is expected to integrate valuable opinions from briefings across all regions to accelerate the comprehensive amendment project of the Government Procurement Act, aiming to forge a more resilient, efficient, and fair public procurement environment.