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Problems of Bidding Process in China

 

STUDENT PAPER

By Peng Wang

SKEMA Business School

Paris, France

 



ABSTRACT

The bidding process is one of the most important processes in a project, it decides whether a group could have a chance to do a project or not. In such a vital process, there are companies making profits by using special method based on relationship. For this paper, the author interviews an employee to get the real data and analyze these data with the MADM method. The author points the deep reason behind the problems of bidding process. That is the relationship plays the key role in the bidding process. To reach a healthy BAU environment, the author gives suggestions to solve the problems in bidding process.

Key words:     Bidding process, relationship, technical parameter, IT, China, culture

INTRODUCTION

Problem Recognition

Bidding process is one of the most important processes in a project, it decides whether a group could have a chance to do a project or not. From the 21st century, Chinese market is becoming more attracting in the whole world. Based on the data from Ministry of Commerce of the PRC, from January to July 2017, there are 17695 foreign companies founded, and the actual foreign capital is used 72.14 billion dollars[1].Therefore, the basic research on Chinese bidding system is necessary in order to get the bid among several competitors. There are a lot of visible and invisible rules and conventions during the bidding process. By interviewing an employee in a Telecommunication/ Network company located in Harbin, North-east of China, second-line city, and seeing through the Chinese bidding laws and some bidding documents in the real business, this paper will provide a different view on Chinese bidding process, choosing IT field as an example, to show some process which does not write down in the Chinese bidding law.

Since there is no effective paper reflecting the system of ‘operating in shadow’, the author will carry on the analysis from an exclusive perspective; Chinese view. One process the author will discuss is that sometimes basing the special relationship between two parties in bidding process, the part of making the bid will communicate the specific parameter of their bid in order to let the only company they want to cooperate have the chance to win the bidding. So the deeper reason is well worth researching.

The purpose of this paper is to let those people who want to do business with Chinese companies know some hidden rules in the bidding documents. This might enable some readers to get higher competitive advantage in Chinese market. By looking through the backgrounds of all the bidding process with corruption, the author can find that there is a black-box operation between bidders, and there are communications between bidder and agency.  Also there is manipulation by employees in the bid management institution, as well as some leaders’ involvement.

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Wang, P. (2018). Problems of Bidding Process in China, PM World Journal, Volume VII, Issue VI – June. Available online at https://pmworldjournal.net/wp-content/uploads/2018/06/pmwj71-Jun2018-Wang-problems-of-bidding-process-in-china-student-paper.pdf



About the Author


Peng Wang

Paris, France

 

 

 

Peng Wang is a MSc student in SKEMA Business school, major in Project Management & Business Development (PPMBD). He graduated from North-East Forestry University, China and holds a Bachelor’s degree in Electrical Information Engineering. He has experience in Customer Service. He has both project management and IT engineering background, and certificated by PRINCE2 and AGILE, as a project controller, project planner. He has potential to be a promising project manager. He lives in Paris, France now, and can be contacted at [email protected].

 

[1] Ministry of Commerce of PRC. (2017, September 1). 2017年1-7月The Statement of Attracting Investment from Foreign Companies Website of Ministry of Commerce of the PRC. Retrieved November 2017 from http://www.mofcom.gov.cn/article/tongjiziliao/v/201709/20170902640365.shtml