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Provisional Regulations on the Management of Materials Purchase of State-owned Industrial Enterprises
Author: Anonymous Source: Site author Editor: ADMIN

Release Department:   State Economic and Trade Commission  
Issue number: Order of the National Economic and Trade Commission [No. 9]  

The "Interim Provisions on the Management of Materials Purchase of State-owned Industrial Enterprises" is hereby promulgated and will come into effect on May 1, 1999.


Sheng Huaren, Director of the State Economic and Trade Commission April 1, 1999

Chapter I General Provisions

Article 1 These regulations are formulated to regulate the procurement behavior of state-owned industrial enterprises (hereinafter referred to as enterprises), strengthen the supervision and management of enterprise procurement, and prevent the loss of state-owned assets.

Article 2 These regulations are the basic norms for decision-making, price supervision and quality inspection in the process of purchasing raw materials, fuels, auxiliary materials, parts, equipment, accessories, office supplies, labor protection supplies and other materials.

Article 3 An enterprise shall establish and improve various systems of procurement management in accordance with the principles of scientific efficiency, openness and fairness, price comparison, and supervision and control to prevent improper behaviors in the procurement process.

Chapter II Decision Management

Article 4 An enterprise shall establish and improve the procurement decision-making procedures for materials, implement hierarchical management and decentralization management according to the type and amount of purchased materials, and clarify the authority of managers at all levels, relevant departments and personnel.

Article 5 Except for special circumstances, major purchases of the company's main raw materials and other large-scale materials (hereinafter referred to as main materials) shall be carried out by the plant manager, manager (hereinafter referred to as the business operator), deputy plant manager, deputy manager and related The head of the department implements collective decision-making through meetings or other forms.

Article 6 An enterprise shall strengthen the supervision over the price, quality, and quantity of purchased materials. A specialized agency may be set up to perform the supervisory function. If there is no special agency, the department or personnel performing the supervisory function shall be clearly defined.

Article 7 Managers at all levels of the enterprise shall have the responsibility for reviewing and supervising the procurement of materials they have approved.

Chapter III Purchasing by Quality and Price

Article 8 An enterprise shall extensively collect market information such as the quality and price of purchased materials, and grasp changes in the main purchased material information. Purchasing departments and procurement personnel shall purchase products based on market information in a quality and price comparison manner.

Article 9 In addition to only the sole supplier or the enterprise with special requirements for production and operation, the purchase of the company's main materials shall select two or more suppliers, and choose the best purchase from the aspects of quality, price and reputation.

Article 10 The procurement of major materials and materials with special requirements by an enterprise shall review the qualification of the supplier; for the identified supplier, the quality, price and reputation of the supplier shall be grasped in a timely manner.

Article 11 The procurement of bulk raw fuel auxiliary materials for enterprises, the procurement of major materials for infrastructure or technological transformation projects, and the procurement of other large amounts of materials, etc., shall be implemented as far as possible if tender procurement conditions are met.

Chapter IV Price Supervision

Article 12 The department or personnel exercising the price supervision function of an enterprise shall strictly perform its duties, supervise the purchase price, and control the purchase cost.

Article 13 The main materials of an enterprise shall be subject to price review beforehand by the price supervision department, and the material procurement department shall purchase within the price reviewed by the price supervision department, except in special circumstances.

Article 14 The department or personnel of the enterprise exercising the function of price supervision shall review the price documents of the main materials purchased, etc., and if the purchase is not performed within the audited price and harms the interests of the enterprise, it shall promptly notify the enterprise operator or relevant supervisor Reflect and put forward suggestions.

Article 15 The department or personnel exercising the price supervision function of an enterprise shall timely understand and grasp the market prices of the main procurement materials, and shall bear corresponding responsibility for the procurement prices of the materials it audits.

Chapter V Quality Inspection and Supervision

Article 16 An enterprise shall conduct quality inspection or verification of purchased materials, and purchase materials cannot go through formal storage and settlement procedures without quality inspection or verification, except in special circumstances.
When an enterprise inspects or verifies the quality of purchased materials, departments and units that may affect the fair inspection shall not intervene.

Article 17 An enterprise shall improve the necessary quality and measurement testing conditions according to the needs of production and operation. If an enterprise that does not have the testing conditions needs to inspect the purchased materials, it may entrust the inspection or require the supplier to issue a quality inspection report of a nationally recognized inspection agency.

Article 18 The quality inspection or verification personnel shall strictly carry out inspections or verifications in accordance with standards and procedures, and shall bear responsibility for the results of inspections and verifications.

Article 19 For the main procurement materials, the enterprise may keep samples for archiving as needed and conduct re-inspection.

Chapter VI Responsibility and Rewards

Article 20 An enterprise shall establish a responsibility system for the entire process of procurement management, clarify the responsibilities of relevant departments and individuals, formulate assessment and punishment measures and strictly implement them.

Article 21 Enterprise managers and other senior management personnel of enterprises shall implement these regulations and the internal material procurement management system of the enterprise, and support the enterprise material procurement department and the quality and price supervision department in performing their duties.
The close relatives (including spouse, parents, children, brothers and sisters) of the business operator and the deputy plant manager and deputy manager in charge of material procurement shall not, in principle, be the person in charge of the company's material procurement department.

Article 22 Employees of an enterprise shall have the right to report any violation of these regulations to the interests of the enterprise to the enterprise or relevant government departments. Whistleblower shall be protected, and no one shall retaliate.

Article 23 An enterprise shall reward the following personnel:
(1) Purchasing personnel who have made outstanding contributions in reducing procurement costs;
(2) Quality and price supervisors who have performed their duties strictly and have outstanding performance;
(3) Reporting personnel who have verified the purchase behavior in violation of these regulations;
(4) Other personnel who have made outstanding contributions to reducing procurement costs.

Article 24 For those who violate the rules and falsify, use power for personal gain, secretly accept kickbacks and accept bribes off the books, the enterprise shall give notice of criticism, remembering, relocating, dismissing, removing, etc. according to the seriousness of the circumstances; causing direct economic harm to the enterprise Those who have suffered losses shall be compensated according to law; those who constitute crimes shall be investigated for criminal responsibility according to law.

Article 25 An enterprise shall, in accordance with the requirements of these regulations, strengthen and improve procurement management in accordance with the actual conditions of the enterprise. In case of violation of these regulations, damage to the interests of enterprises, and loss of state-owned assets, the person directly responsible, the person in charge directly responsible, and the enterprise operator shall bear corresponding responsibilities.

Article 26 The economic and trade commissions at all levels shall strengthen the supervision and guidance on the procurement management of enterprises, commend or give rewards to enterprises that have significant effects in reducing procurement costs, and shall report and criticize enterprises with confused procurement management and serious capital loss But it must not interfere with the normal material procurement activities of the enterprise.

Chapter VII Supplementary Provisions

Article 27. These regulations apply in principle to state-owned transportation, construction and installation, geological exploration, commerce, foreign trade, post and telecommunications, water conservancy, and science and technology enterprises.

Article 28 The interpretation of these Provisions is the responsibility of the State Economic and Trade Commission.

Article 29 These Provisions shall become effective on the date of promulgation.

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