How to Make Taiwan’s Infrastructure Projects World-Class

Taiwan’s government is launching plans for an ambitious set of wide-ranging infrastructure projects – many of them of a complex, challenging, and specialized nature.

In the recently published 2017 Taiwan White Paper, the Infrastructure & Engineering Committee of the American Chamber of Commerce in Taipei recommends the government actively encourage more international companies to participate in such projects in the interest of helping Taiwan develop world-class infrastructure.

“Successful delivery of the planned infrastructure program, especially of the power generation projects, is critically important for the continued prosperity of the Taiwan economy,” the Committee’s position paper notes.

The paper specifically highlights the contractor tendering process as an opportunity to improve infrastructure quality, recommending selecting winning bids on the basis of “Most Advantageous Tender” rather than “Lowest Price.” Using “lowest price” as the selection criterion “does not value the qualitative elements which international companies often provide, such as innovative execution approaches, leading-edge project management tools and processes, and enhanced health and safety processes,” the Committee says. It warns that prioritizing lowest price discourages international companies from bidding and that “over-emphasis on low price may cost the government agency more in time and money, as well as cause subsequent reputational harm from failure to meet cost, schedule, or quality requirements.”

In the “Most Advantageous Tender” selection system, bidders submit their price proposals separately from the technical proposals in what is called a “two-envelope process.” Tenderers must first pass the technical and commercial stage before the price envelope is opened. The price and technical scores are then combined to arrive at a weighted price/technical score used to determine the recommended tender winner.

In the Committee’s view, adopting this system to select contractors for public projects will help ensure that the best qualified companies – not simply those with low prices – are chosen to develop Taiwan’s infrastructure.

To read the full Infrastructure & Engineering position paper, click here.

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