Decree No. 102 of the Ministry of Finance of the People's Republic of China on the Administration of Government Purchase of Services

Ministry of Finance of the People's Republic of China

Ministry of Finance Order 102

The Administrative Measures on Government Purchase of Services, which were deliberated and adopted at the first Ministerial Meeting on November 19, 2019, are hereby promulgated and will come into force as of March 1, 2020.

Minister Liu Kun

January 3, 2020

Measures for Administration of government purchase of services

Chapter 1 General provisions

Article 1 In order to regulate government procurement of services, promote the transformation of government functions, and improve the supply of public services, this method is formulated in accordance with the provisions of laws and administrative regulations such as the Budget Law of the People's Republic of China, the Government Procurement Law of the People's Republic of China, and the Contract Law of the People's Republic of China.

Article 2 The term "government procurement of services" as used in these Measures refers to the act of state organs at all levels entrusting service items that fall within their own scope of responsibilities and are suitable for market-oriented provision to qualified service providers in accordance with government procurement methods and procedures, and paying fees to them based on factors such as service quantity and quality.

Article 3 Government procurement of services shall follow the principles of budget constraints, fixed fees, open selection of the best, honesty and credibility, and emphasis on performance.

Article 4 The Ministry of Finance is responsible for formulating a national government procurement service system, guiding and supervising the government procurement service work of various regions and departments.

The finance department of the local people's government at or above the county level is responsible for the management of government procurement services in its administrative region.

Chapter 2 Purchasing and Undertaking Entities

Article 5 State organs at all levels are the purchasing entities for government services.

Article 6 Enterprises, social organizations (excluding mass organizations guaranteed by financial appropriations), public welfare second-class and public institutions engaged in production and business activities, rural collective economic organizations, grassroots mass autonomous organizations, and individuals who meet the conditions can serve as the main recipients of government purchased services established in accordance with the law.

Article 7 The recipient of government procurement services shall meet the conditions stipulated by government procurement laws and administrative regulations.

The purchasing entity may stipulate specific conditions for the undertaking entity based on the characteristics of the purchased service project, but shall not violate government procurement laws and administrative regulations by implementing differential or discriminatory treatment against the undertaking entity under unreasonable conditions.

Article 8 Public welfare first-class institutions and mass organizations that use public institution staffing and are guaranteed by financial appropriations shall not be the purchasing or receiving entities for government procurement services.

Chapter 3 Purchase content and catalog

Article 9 The content of government purchased services includes public services provided by the government to the public, as well as auxiliary services required for government performance.

Article 10 The following items shall not be included in the scope of government procurement services:

（1） Service items that do not fall within the scope of government responsibilities;

（2） Matters that should be directly performed by the government;

（3） Government procurement of goods and projects as stipulated by laws and administrative regulations, as well as projects that package engineering and services;

（4） Financing behavior;

（5） Recruitment and employment of personnel by the purchasing entity, employment through labor dispatch, and establishment of public welfare positions;

（6） Other matters stipulated by laws, administrative regulations, and the State Council that cannot be used as government procurement services.

Article 11 The specific scope and content of government procurement of services shall be subject to guiding directory management, and the guiding directory shall be made public in accordance with the law.

Article 12 The guiding directory for government procurement of services shall be subject to hierarchical management at both the central and provincial levels. The Ministry of Finance and provincial finance departments shall respectively formulate the guiding directory for government procurement of services at their respective levels, and each department shall compile its own guiding directory for government procurement of services within the scope of the guiding directory at their respective levels.

The provincial finance department shall determine the compilation method and procedure of the guidance catalog for the purchase of services by governments below the provincial level based on the local situation.

Article 13 Relevant departments shall compile and adjust guiding catalogs based on the actual economic and social development, the transformation of government functions, and the requirements for equalization and standardization of basic public services.

The compilation and adjustment of guiding catalogs should fully solicit opinions from relevant departments and conduct expert discussions based on actual needs.

Article 14 Service items included in the guiding directory for government procurement services that have already been budgeted may be implemented for government procurement services.

Chapter 4 Implementation of purchasing activities

Article 15 Government procurement of services should highlight their public and philanthropic nature, with a focus on and priority given to projects closely related to improving people's livelihoods, which are conducive to transforming government functions and improving financial performance.

The standard elements such as service content, level, and process of basic public service projects purchased by the government shall comply with the relevant requirements of the national basic public service standards.

Article 16 The funds required for government procurement of service projects shall be coordinated and arranged in the budgets of relevant departments, and shall be linked to the medium-term financial plan. Projects not included in the budget shall not be implemented.

When preparing the annual departmental budget, the purchasing entity shall reflect the government's expenditure on purchasing services. Government expenditure on purchasing services shall comply with relevant budget management regulations.

Article 17 The purchasing entity shall determine the contracting entity through fair competition based on factors such as the purchase content, market conditions, relevant supplier service capabilities, and credit status.

Article 18 When purchasing services from individuals, the purchasing entity shall be limited to situations where it is truly suitable to implement government purchased services and are undertaken by individuals, and shall not use government purchased services as a disguised form of employment.

Article 19 The execution and supervision of the procurement process of government procurement service projects, including centralized procurement catalogs and standards, procurement policies, procurement methods and procedures, information disclosure, questioning and complaints, and punishment for dishonesty, shall be carried out in accordance with government procurement laws, administrative regulations, and relevant systems.

Article 20 When implementing performance management for government procurement service projects, the purchasing entity shall conduct pre performance evaluation, regularly evaluate the implementation of the purchased services, and use third-party evaluation for projects that meet the conditions.

The finance department can conduct performance evaluations on the overall work of government procurement services as needed, or conduct key performance evaluations on government procurement service projects with significant funding and social impact implemented by the department.

Article 21 The purchasing entity and the financial department shall use the performance evaluation results as an important basis for the selection of the contracting entity, budget arrangements, and policy adjustments.

Chapter 5 Contracts and Performance

Article 22 The signing, performance, and modification of government procurement service contracts shall comply with the relevant provisions of the Contract Law of the People's Republic of China.

Article 23 The purchasing entity shall sign a written contract with the designated undertaking entity, and the service content stipulated in the contract shall comply with the provisions of Articles 9 and 10 of these Measures.

The government purchase service contract shall specify the content, duration, quantity, quality, price, fund settlement method, rights and obligations of all parties, and breach of contract responsibilities of the services.

Government purchase service contracts shall be publicly announced in accordance with the law.

Article 24 The performance period of government purchase service contracts generally does not exceed one year; Under the premise of budget guarantee, for government procurement service projects with relatively fixed purchase content, strong continuity, stable funding sources, and small price changes, a government procurement service contract with a performance period not exceeding 3 years can be signed.

Article 25 The purchasing entity shall strengthen the performance management of government procurement service projects, carry out performance monitoring, timely grasp the progress of project implementation and the achievement of performance goals, urge the undertaking entity to strictly fulfill the contract, and pay the undertaking entity in accordance with the contract provisions.

Article 26 The contracting party shall provide services in accordance with the contract and shall not subcontract the service project to other parties.

Article 27 The undertaking entity shall establish a government procurement service project ledger, record and preserve important information related to project implementation in accordance with relevant regulations or contract agreements, and provide the purchasing entity with relevant information.

Article 28 The undertaking entity shall strictly comply with relevant financial regulations, standardize the management and use of government purchased service project funds.

The undertaking entity shall cooperate with relevant departments to supervise, inspect and evaluate the use of funds.

Article 29 The undertaking entity may, in accordance with laws and regulations, use government purchase service contracts to raise funds from financial institutions.

The purchasing entity shall not provide any form of guarantee for the financing activities of the undertaking entity.

Chapter VI Supervision and administration and legal responsibility　

Article 30 Relevant departments shall establish and improve the supervision and management mechanism for government procurement services. The purchasing and receiving entities shall consciously accept financial supervision, audit supervision, social supervision, and supervision from service recipients.

Article 31 If the purchasing entity, undertaking entity, and other government procurement service participants violate government procurement laws and regulations in government procurement service activities, they shall be dealt with and punished in accordance with government procurement laws and regulations; Those who engage in illegal financial activities such as interception, misappropriation, and retention of funds shall be held legally responsible in accordance with laws and regulations such as the Budget Law of the People's Republic of China and the Regulations on Punishing and Punishing Illegal Financial Activities; Those suspected of committing crimes shall be transferred to judicial authorities for handling.

Article 32 If the financial department, purchasing entity, and their staff violate the provisions of these Measures, abuse their power, neglect their duties, engage in favoritism and other illegal and disciplinary violations, they shall be held accountable in accordance with relevant national regulations such as the Budget Law of the People's Republic of China, the Civil Servant Law of the People's Republic of China, the Supervision Law of the People's Republic of China, and the Regulations on Punishing and Punishing Fiscal Illegal Acts; Those suspected of committing crimes shall be transferred to judicial authorities for handling.

Chapter 7 Supplementary Provisions

Article 33 If Party organs, CPPCC organs, democratic party organs, public institutions undertaking administrative functions, and mass organizations using administrative staffing use fiscal funds to purchase services, these measures shall be followed.

Article 34 The implementation of government procurement service projects involving classified information shall be carried out in accordance with relevant national regulations.

Article 35 These Measures shall come into effect on March 1, 2020. The "Interim Measures for the Administration of Government Procurement Services" (Cai Zong [2014] No. 96) issued by the Ministry of Finance, the Ministry of Civil Affairs, and the State Administration for Industry and Commerce on December 15, 2014, are simultaneously abolished.