Ministry of Finance: A 20% price evaluation preference will be given to domestic products in government procurement.

Recently, the Ministry of Finance released the "Notice on Matters Concerning Domestic Product Standards and Implementation Policies in the Field of Government Procurement (Draft for Soliciting Opinions)" on its official website and solicited public opinions from all sectors of society. This notice aims to build a unified, open, competitive and orderly government procurement market system, ensure that all kinds of business entities can participate equally in government procurement activities, and clearly puts forward that in government procurement activities, a 20% price evaluation preference will be given to domestic products compared with non-domestic products.

*Source of the picture: Ministry of Finance

According to the content of the notice, domestic products refer to those that are produced within China and meet a series of specific standards. These standards include that the products must achieve the transformation of attributes from raw materials and components to the final products within China's customs territory. The transformation of attributes must result in new products that are completely different from the raw materials and components, with new names and characteristics (uses); the cost of components produced within China for the products should meet the required proportion; and there are requirements for key components and key processes of specific products to be produced and completed within China.

The formulation of this standard not only ensures the local attributes of the products but also further standardizes the government procurement behavior through specific cost accounting rules and requirements for key processes, preventing confusion caused by minor operations such as OEM and simple packaging.

In terms of implementation policies, the notice puts forward clear requirements. In government procurement activities, when both domestic products and non-domestic products participate in the competition, a 20% price deduction will be given to the quotations of domestic products, and the price after the deduction will be used for the evaluation. Meanwhile, for the situation where a procurement project or procurement package contains multiple products, as long as the sum of the costs of the products that meet the domestic product standards provided by the supplier accounts for more than 80% of the total cost of the products provided by the supplier, all the products provided by the supplier will also enjoy a 20% price deduction preference as a whole.

To ensure the fairness and transparency of the policy, the notice also emphasizes the principle of treating all kinds of business entities equally. State-owned enterprises, private enterprises, foreign-invested enterprises and other business entities will equally enjoy the support policies for domestic products in government procurement. Purchasers and procurement agencies must treat all kinds of business entities equally in terms of government procurement information release, determination of supplier qualification conditions, qualification review and evaluation standards, and shall not set unreasonable conditions to give differential or discriminatory treatment.

In addition, the notice also specifies the dispute handling mechanism in detail. For disputes involving whether products or components are produced within China, whether the cost of components produced within China or the cost of domestic products meets the required proportion, and whether key processes are completed within China, the corresponding handling principles and requirements for proof materials are clearly defined.

Undoubtedly, the notice issued by the Ministry of Finance has won more opportunities and advantages for domestic products in the government procurement market. By giving a 20% price evaluation preference to domestic products, the government not only encourages the development of domestic enterprises but also promotes the upgrading and transformation of local industries. Meanwhile, the transparency and fairness of the policy are fully guaranteed, laying a solid foundation for building a market-oriented, law-based and internationalized business environment.

For the domestic instrument industry, this policy is also beneficial. In government procurement, high-end instruments are still dominated by foreign brands, and domestic enterprises are facing great challenges in both technology and market share. By giving a 20% price evaluation preference to domestic products, the price advantage of domestic instruments in government procurement will be further increased, which is conducive to expanding the market share of domestic instruments. Meanwhile, the support for domestic products in the policy is also beneficial to attracting foreign instrument brands to accelerate the localization process and transfer the entire production chain of products to China, thus promoting the improvement of the overall level of the domestic instrument industry.