The Taipei City Government Bureau of Environmental Protection violated the Fair Trade Law by conducting procurement of garbage cans
Chinese Taipei
Case:
The Taipei City Government Bureau of Environmental Protection violated the Fair Trade Law by conducting procurement of garbage cans
Key words:
garbage cans, private legal acts by an administrative agency
Reference:
Fair Trade Commission Decision of November 26, 1997 (the 318th Commission Meeting); Decision (86) Kung Erh Tzu No. 8603479
Industry:
Government Agencies (9111)
Relevant Laws:
Article 19(ii) of the Fair Trade Law
Summary:
The Taipei City Government Bureau of Environmental Protection (hereinafter the Bureau) conducted its 1997 procurement of garbage cans, which were to be placed on sidewalks for pedestrians. Complaints were brought against the Bureau for having designated “Plaza” garbage cans manufactured by a British company, Glasdon Corporation, in the tender notice. The Bureau required the winning bidder to produce, at the final inspection, the proof of original design or the record of sale by the manufacturer, as well as the manufacturer's certificate of quality (including density and ductility). In fact, Plaza garbage cans have never been sold in Chinese Taipei. In 1997, the Bureau planned to procure as many as 538 garbage cans, but it excluded a large number of local garbage can manufacturers by designating specifications that only one manufacturer could meet, and by requiring the above proofs and certificates. By imposing such restrictions on the qualifications of bidders, the Bureau was alleged to have violated Article 19(ii) of the Fair Trade Law.
According to Article 19(ii) of the Fair Trade Law, an enterprise may not engage in discriminatory treatment against another enterprise or enterprises without proper or justifiable cause, thus raising concerns that fair trade may be hindered. The investigation showed that the specifications, i.e., the shape, color, material, volume and usage, required by the Bureau for the procurement, were exactly the same as the Glasdon Corporation's Plaza brand garbage cans, which were distributed in Chinese Taipei by Yi Ting Enterprise. By making such specifications, the Bureau actually designated a particular brand and excluded other competing manufacturers from participating in the tender. Moreover, there were a few serious flaws in the administrative process:
(1) The Bureau made false statement regarding the number of manufacturers that could provide the garbage cans;
(2) The evaluation process did not mean to identify the advantage of the cans.
(3) The Bureau evaded the relevant auditing laws and regulations by designating a specific manufacturer and attempted to negotiate the prices with it.
(4) With the excuse of limited time, the Bureau evaded the requirement that procurements should be handled by the City Government's Standard Outsourcing Center.
(5) The Bureau retained the procurement budget until the next fiscal year in order to synchronize with the manufacturer's import operations.
The procurement funds for the project were allocated by the Bureau under the section of capital and miscellaneous expenditure in its 1997 budget. In other words, the Bureau intended to use the expenditure to fulfill its function of providing public services. Pursuant to the “Review Criteria for the Applicability of the Fair Trade Law to Private Legal Acts by an Administrative Agency”, the Bureau was not an enterprise that was subject to the regulations of the Law. As for whether the Bureau's personnel were involved in contributing to such flawed administrative procedures or intentionally benefiting particular enterprises, the Fair Trade Commission has transferred this case to the Taipei City Government for further investigation.
Summarized by Li, Yan-hsi
Supervised by Wang, Hung-hsuan