Introducing and analyzing the Scope and Benefits of the Regulation「Statute for Upgrading Industries」in The Biotechnology Industry in Taiwan
The recent important regulation for supporting the biopharmaceutical industry in Taiwan has been the 「Statute for Upgrading Industries」 (hereinafter referred to as 「the Statute」).The main purpose of the Statue is for upgrading all industry for future economic development, so it applies to various industries, ranging from agriculture, industrial and service businesses. In other words, the Statute does not offer incentive measures to biopharmaceutical industry in particular, but focuses on promoting the industry development in general.
Statute for Upgrading Industry and Related Regulations
Generally speaking, the Statute has a widespread influence on industry development in Taiwan. The incentive measures provided in the Statute is complicated and covered other related regulations under its legal framework. Thus, the article will be taking a multi-facet perspective in discussing the how Statute relates to the biopharmaceutical industry.
1 、 Scope of Application
According to Article 1 of the Statute, the term 「industries」 refers to agricultural, industrial and service businesses. Consequently, nearly all kinds of industries fall under this definition, and the Statute is applicable to all of them. Moreover, in order to promote the development and application of emerging technology as well as cultivating the recognized industry, the Statute provides much more favorable terms to these industries. These emerging and major strategic industries includes computer, communication and consumer electronics (3C), precise mechanics and automation, aerospace, biomedical and chemical production, green technology, material science, nanotechnology, security and other product or service recognized by the Executive Yuan.
2 、 Tax Benefits
The Statute offers several types of tax benefits, so the industry could receive sufficient reward in every way it could, and promote a sound cycle in creating new values through these benefits.
(1) Benefits for the purchase of automation equipment
The said procured equipment and technology over NTD600, 000 may credit a certain percentage of the investment against the amount of profit-seeking enterprise income tax payable for the then current year. For the purchase of production technology, 5% may be credited. For the purchase of equipment, 7% may be credited. And any investment plan that includes the purchasing of equipment for automation can qualify for a low-interest preferential loan. Besides, for science-based industrial company imported overseas equipment that is not manufacture by local manufactures, from January 1, 2002, the imported equipment shall be exempted from import and business tax. And if the company is a bonded factory, the raw materials to be imported from abroad by it shall also be exempt from import duties and business tax.
(2) Benefits for R&D expenditure
Expenditure concurred for developing new products, improving production technology, or improving label-providing technology may credit 30%of the investment against the amount of profit-seeking enterprise income tax payable for the then current year. Research expenditures of the current year exceeding the average research expenditure for the past two years, the excess in research expenditure shall be 50% deductible. Instruments and equipments purchased by for exclusive R&D purpose, experimentation, or quality inspection may be accelerated to two years. At last, Biotech and New Pharmaceuticals Company engages in R&D activities, such as Contract research Organization (CRO), may credit 30% of the investment against the amount of profit-seeking enterprise income tax payable.
(3) Personnel Training
When a company trained staff and registered for business-related course, may credit 30% of the training cost against the amount of profit-seeking enterprise income tax payable for the then current year. Where training expenses for the current year exceeds the two-year average, 50% of the excess portion may be credited.
(4) Benefit for Newly Emerging Strategic Industries
Corporate shareholders invest in newly emerging strategic industries are entitled to select one of the following tax benefits:
- A profit seeking enterprise may credit up to 20% of the price paid for acquisition of such stock against the profit seeking enterprise income tax. An individual may credit up to 10%. As of January and once every year, there will be a 1% reduction of the price paid for acquisition of such stock against the consolidated income tax payable in the then current year.
- A company, within two years from the beginning date for payment of the stock price by its shareholders, selects, with the approval of its shareholder meeting, the application of an exemption from profit-seeking enterprise income tax and waives the shareholders investment credit against payable income tax as mentioned above. However, that once the selection is made, no changes shall be allowed.
(5) Benefits for Investment in Equipment or Technology Used for Pollution Control
To prevent our environment from further pollution, the Government offers tax benefits to reward companies in making improvements. Investment in equipment or technology used for pollution control may credit 7% of the equipment expenditure, and 5% of the expenditure on technology against the amount of profit-seeking enterprise income tax payable for the then current year. For any equipment that has been verified in use and specialized in air pollution control, noise pollution control, vibration control, water pollution control, environmental surveillance and waste disposal, shall be exempt from import duties and business tax. And for investment plans that planned implementation of energy saving systems can apply for a low interest loan.
(6) Incentive for Operation Headquarter
To encourage companies to utilize worldwide resources and set up international operation network, if they established operation headquarters within the territory of the Republic of China reaching a specific size and bringing about significant economic benefit, their following incomes shall be exempted from profit-seeking enterprise income tax:
- The income derived from provision of management services or R&D services.
- The royalty payment received under its investments to its affiliates abroad.
- The investment return and asset disposal received under its investment to its affiliates abroad.
(7) Exchange of Technology for Stock Option
The emerging-industrycompany recognized by government, upon adoption of a resolution by a majority voting of the directors present at a meeting of its board of directors attended by two-thirds of the directors of the company, may issue stock options to corporation or individual in exchange for authorization or transfer of patent and technologies.
(8) Deferral of Taxes on the Exchange of Technology for Shares
Taxes on income earned by investors from the acquisition of shares in emerging-industry companies in exchange for technology will be deferred for five years, on condition that the shares exchanged for technology amount to more than 20% of the company's total stock equity and that the number of persons who obtain shares in exchange for technology does not exceed five.
3 、 Technical Assistance and Capital Investment
The rapid industry development has been closely tied to the infusion of funds. In addition to tax benefits, the Statute incorporates regulations especially for technical assistance and capital investment as below:
(1) In order to introduce or transfer advanced technologies, technical organization formed with the contribution of government shall provide appropriate technical assistance as required.
(2) In order to advance technologies, enhance R&D activities and further upgrade industries, the relevant central government authorities in charge of end enterprises may promote the implementation of industrial and technological projects by providing subsidies to such R&D projects.
(3) In order to assist the start-up of domestic small-medium technological enterprises and the overall upgrading of the entire industries, guidance and assistance shall be provided for the development of venture capital enterprises.
The Research on ownership of cell therapy products 1. Issues concerning ownership of cell therapy products Regarding the issue of ownership interests, American Medical Association(AMA)has pointed out in 2016 that using human tissues to develop commercially available products raises question about who holds property rights in human biological materials[1]. In United States, there have been several disputes concern the issue of the whether the donor of the cell therapy can claim ownership of the product, including Moore v. Regents of University of California(1990)[2], Greenberg v. Miami Children's Hospital Research Institute(2003)[3], and Washington University v. Catalona(2007)[4]. The courts tend to hold that since cells and tissues were donated voluntarily, the donors had already lost their property rights of their cells and tissues at the time of the donation. In Moore case, even if the researchers used Moore’s cells to obtain commercial benefits in an involuntary situation, the court still held that the property rights of removed cells were not suitable to be claimed by their donor, so as to avoid the burden for researcher to clarify whether the use of cells violates the wishes of the donors and therefore decrease the legal risk for R&D activities. United Kingdom Medical Research Council(MRC)also noted in 2019 that the donated human material is usually described as ‘gifts’, and donors of samples are not usually regarded as having ownership or property rights in these[5]. Accordingly, both USA and UK tends to believe that it is not suitable for cell donors to claim ownership. 2. The ownership of cell therapy products in the lens of Taiwan’s Civil Code In Taiwan, Article 766 of Civil Code stipulated: “Unless otherwise provided by the Act, the component parts of a thing and the natural profits thereof, belong, even after their separation from the thing, to the owner of the thing.” Accordingly, many scholars believe that the ownership of separated body parts of the human body belong to the person whom the parts were separated from. Therefore, it should be considered that the ownership of the cells obtained from the donor still belongs to the donor. In addition, since it is stipulated in Article 406 of Civil Code that “A gift is a contract whereby the parties agree that one of the parties delivers his property gratuitously to another party and the latter agrees to accept it.”, if the act of donation can be considered as a gift relationship, then the ownership of the cells has been delivered from donor to other party who accept it accordingly. However, in the different versions of Regenerative Medicine Biologics Regulation (draft) proposed by Taiwan legislators, some of which replace the term “donor” with “provider”. Therefore, for cell providers, instead of cell donors, after providing cells, whether they can claim ownership of cell therapy product still needs further discussion. According to Article 69 of the Civil Code, it is stipulated that “Natural profits are products of the earth, animals, and other products which are produced from another thing without diminution of its substance.” In addition, Article 766 of the Civil Code stipulated that “Unless otherwise provided by the Act, the component parts of a thing and the natural profits thereof, belong, even after their separation from the thing, to the owner of the thing.” Thus, many scholars believe that when the product is organic, original substance and the natural profits thereof are all belong to the owner of the original substance. For example, when proteins are produced from isolated cells, the proteins can be deemed as natural profits and the ownership of proteins and isolated cells all belong to the owner of the cells[6]. Nevertheless, according to Article 814 of the Civil Code, it is stipulated that “When a person has contributed work to a personal property belonging to another, the ownership of the personal property upon which the work is done belongs to the owner of the material thereof. However, if the value of the contributing work obviously exceeds the value of the material, the ownership of the personal property upon which the work is done belongs to the contributing person.” Thus, scholar believes that since regenerative medical technology, which induces cell differentiation, involves quite complex biotechnology technology, and should be deemed as contributing work. Therefore, the ownership of cell products after contributing work should belongs to the contributing person[7]. Thus, if the provider provides the cells to the researcher, after complex biotechnology contributing work, the original ownership of the cells should be deemed to have been eliminated, and there is no basis for providers to claim ownership. However, since the development of cell therapy products involves a series of R&D activities, it still need to be clarified that who is entitled to the ownership of the final cell therapy products. According to Taiwan’s Civil Code, the ownership of product after contributing work should belongs to the contributing person. However, when there are numerous contributing persons, which person should the ownership belong to, might be determined on a case-by-case basis. 3. Conclusion The biggest difference between cell therapy products and all other small molecule drugs or biologics is that original cell materials are provided by donors or providers, and the whole development process involves numerous contributing persons. Hence, ownership disputes are prone to arise. In addition to the above-discussed disputes, United Kingdom Co-ordinating Committee on Cancer Research(UKCCCR)also noted that there is a long list of people and organizations who might lay claim to the ownership of specimens and their derivatives, including the donor and relatives, the surgeon and pathologist, the hospital authority where the sample was taken, the scientists engaged in the research, the institution where the research work was carried out, the funding organization supporting the research and any collaborating commercial company. Thus, the ultimate control of subsequent ownership and patent rights will need to be negotiated[8]. Since the same issues might also occur in Taiwan, while developing cell therapy products, carefully clarifying the ownership between stakeholders is necessary for avoiding possible dispute. [1]American Medical Association [AMA], Commercial Use of Human Biological Materials, Code of Medical Ethics Opinion 7.3.9, Nov. 14, 2016, https://www.ama-assn.org/delivering-care/ethics/commercial-use-human-biological-materials (last visited Jan. 3, 2021). [2]Moore v. Regents of University of California, 793 P.2d 479 (Cal. 1990) [3]Greenberg v. Miami Children's Hospital Research Institute, 264 F. Suppl. 2d, 1064 (SD Fl. 2003) [4]Washington University v. Catalona, 490 F 3d 667 (8th Cir. 2007) [5]Medical Research Council [MRC], Human Tissue and Biological Samples for Use in Research: Operational and Ethical Guidelines, 2019, https://mrc.ukri.org/publications/browse/human-tissue-and-biological-samples-for-use-in-research/ (last visited Jan. 3, 2021). [6]Wen-Hui Chiu, The legal entitlement of human body, tissue and derivatives in civil law, Angle Publishing, 2016, at 327. [7]id, at 341. [8]Okano, M., Takebayashi, S., Okumura, K., Li, E., Gaudray, P., Carle, G. F., & Bliek, J. UKCCCR guidelines for the use of cell lines in cancer research.Cytogenetic and Genome Research,86(3-4), 1999, https://europepmc.org/backend/ptpmcrender.fcgi?accid=PMC2363383&blobtype=pdf (last visited Jan. 3, 2021).
Review of Taiwan's Existing Regulations on the Access to Bioloical ResourcesThe activities of accessing to Taiwan's biological resources can be governed within certain extent described as follows. 1 、 Certain Biological Resources Controlled by Regulations Taiwan's existing regulation empowers the government to control the access to biological resources within certain areas or specific species. The National Park Law, the Forestry Act, and the Cultural Heritage Preservation Act indicate that the management authority can control the access of animals and plants inside the National Park, the National Park Control Area, the recreational area, the historical monuments, special scenic area, or ecological protection area; forbid the logging of plants and resources within the necessary control area for logging and preserved forestry, or control the biological resources inside the natural preserved area. In terms of the scope of controlled resources, according to the guidance of the Wildlife Conservation Act and the Cultural Heritage Preservation Act, governmental management authority is entitled to forbid the public to access the general and protected wild animals and the plant and biological resources that are classified as natural monuments. To analyse the regulation from another viewpoint, any access to resources in areas and of species other than the listed, such as wild plants or microorganism, is not regulated. Therefore, in terms of scope, Taiwan's management of the access to biological resources has not covered the whole scope. 2 、 Access Permit and Entrance Permit Taiwan's current management of biological resources adopts two kinds of schemes: access permit scheme and entrance permit in specific areas. The permit allows management authority to have the power to grant and reject the collection, hunting, or other activities to access resources by people. This scheme is similar to the international standard. The current management system for the access to biological resources promoted by many countries and international organizations does not usually cover the guidance of entrance in specific areas. This is resulting from that the scope of the regulation about access applies for the whole nation. However, since Taiwan has not developed regulations specifically for the access of bio-research resources, the import/export regulations in the existing Wildlife Conservation Act, National Park Law, Forestry Act, and Cultural Heritage Preservation Act may provide certain help if these regulations be properly connected with the principle of access and benefit sharing model, so that they will help to urge people to share the research interests. 3 、 Special Treatments for Academic Research Purpose and Aborigines Comparing to the access for the purpose of business operation, Taiwan's regulations favour the research and development that contains collection and hunting for the purpose of academic researches. The regulation gives permits to the access to biological resources for the activities with nature of academic researches. For instance, the Wildlife Conservation Act, National Park Law, and theCultural Heritage Preservation Act allow the access of regulated biological resources, if the academic research unit obtains the permit, or simply inform the management authority. In addition, the access by the aborigines is also protected by the Forestry Act, Cultural Heritage Preservation Act, and the Aboriginal Basic Act. The aborigines have the right to freely access to biological resources such as plants, animals and fungi. 4 、 The Application of Prior Informed Consent (PIC) In topics of the access to and benefit sharing of biological resources, the PIC between parties of interests has been the focus of international regulation. Similarly, when Taiwan was establishing theAboriginal Basic Act, this regulation was included to protect the aborigines' rights to be consulted, to agree, to participate and to share the interests. This conforms to the objective of access and benefit sharing system. 5 、 To Research and Propose the Draft of Genetic Resources Act The existing Wildlife Conservation Act, National Park Law, Forestry Act,Cultural Heritage Preservation Act, Aboriginal Basic Act provide the regulation guidance to the management of the access to biological resources within certain scope. Comparing to the international system of access and benefit sharing, Taiwan's regulation covers only part of the international guidance. For instance, Taiwan has no regulation for the management of wild plants and micro-organism, so there is no regulation to confine the access to wild plants and microorganism. To enlarge the scope of management in terms of the access to Taiwan's biological resources, the government authority has authorize the related scholars to prepare the draft of Genetic Resources Act. The aim of the Genetic Resources Act is to establish the guidance of the access of genetic resources and the sharing of interests in order to preserve the genetic resources. The draft regulates that the bio-prospecting activity should be classified into business and academic, with the premise of not interfering the traditional usages. After classification, application of the permit should be conducted via either general or express process. During the permit application, the prospector, the management authority, and the owner of the prospected land should conclude an agreement jointly. In the event that the prospector wishes to apply for intellectual property rights, the prospector should disclose the origin of the genetic resources and provide the legally effective documents of obtaining these resources. In addition, a Biodiversity Fund should be established to manage the profits derived from genetic resources. The import/export of genetic resources should also be regulated. Violators should be fined.
Reviews on Taiwan Constitutional Court's Judgment no. 13 of 2022Reviews on Taiwan Constitutional Court's Judgment no. 13 of 2022 2022/11/24 I.Introduction In 2012, the Taiwan Human Rights Promotion Association and other civil groups believe that the National Health Insurance Administration released the national health insurance database and other health insurance data for scholars to do research without consent, which may be unconstitutional and petitioned for constitutional interpretation. Taiwan Human Rights Promotion Association believes that the state collects, processes, and utilizes personal data on a large scale with the "Personal Data Protection Law", but does not set up another law of conduct to control the exercise of state power, which has violated the principle of legal retention; the data is provided to third-party academic research for use, and the parties involved later Excessive restrictions on the right to withdraw go against the principle of proportionality. The claimant criticized that depriving citizens of their prior consent and post-control rights to medical data is like forcing all citizens to unconditionally contribute data for use outside the purpose before they can use health insurance. The personal data law was originally established to "avoid the infringement of personality rights and promote the rational use of data", but in the insufficient and outdated design of the regulations, it cannot protect the privacy of citizens' information from infringement, and it is easy to open the door to the use of data for other purposes. In addition, even if the health insurance data is de-identified, it is still "individual data" that can distinguish individuals, not "overall data." Health insurance data can be connected with other data of the Ministry of Health and Welfare, such as: physical and mental disability files, sexual assault notification files, etc., and you can also apply for bringing in external data or connecting with other agency data. Although Taiwan prohibits the export of original data, the risk of re-identification may also increase as the number of sources and types of data concatenated increases, as well as unspecified research purposes. The constitutional court of Taiwan has made its judgment on the constitutionality of the personal data usage of National Health Insurance research database. The judgment, released on August 12, 2022, states that Article 6 of Personal Data Protection Act(PDPA), which asks“data pertaining to a natural person's medical records, healthcare, genetics, sex life, physical examination and criminal records shall not be collected, processed or used unless where it is necessary for statistics gathering or academic research by a government agency or an academic institution for the purpose of healthcare, public health, or crime prevention, provided that such data, as processed by the data provider or as disclosed by the data collector, may not lead to the identification of a specific data subject”does not violate Intelligible principle and Principle of proportionality. Therefore, PDPA does not invade people’s right to privacy and remains constitutional. However, the judgment finds the absence of independent supervisory authority responsible for ensuring Taiwan institutions and bodies comply with data protection law, can be unconstitutional, putting personal data protection system on the borderline to failure. Accordingly, laws and regulations must be amended to protect people’s information privacy guaranteed by Article 22 of Constitution of the Republic of China (Taiwan). In addition, the judgment also states it is unconstitutional that Articles 79 and 80 of National Health Insurance Law and other relevant laws lack clear provisions in terms of store, process, external transmission of Personal health insurance data held by Central Health Insurance Administration of the Ministry of Health and Welfare. Finally, the Central Health Insurance Administration of the Ministry of Health and Welfare provides public agencies or academic research institutions with personal health insurance data for use outside the original purpose of collection. According to the overall observation of the relevant regulations, there is no relevant provision that the parties can request to “opt-out”; within this scope, it violates the intention of Article 22 of the Constitution to protect people's right to information privacy. II.Independent supervisory authority According to Article 3 of Central Regulations and Standards Act, government agencies can be divided into independent agencies that can independently exercise their powers and operate autonomously, and non- independent agencies that must obey orders from their superiors. In Taiwan, the so-called "dedicated agency"(專責機關) does not fall into any type of agency defined by the Central Regulations and Standards Act. Dedicated agency should be interpreted as an agency that is responsible for a specific business and here is no other agency to share the business. The European Union requires member states to set up independent regulatory agencies (refer to Articles 51 and 52 of General Data Protection Regulation (GDPR)). In General Data Protection Regulation and the adequacy reference guidelines, the specific requirements for personal data supervisory agencies are as follows: the country concerned should have one or more independent supervisory agencies; they should perform their duties completely independently and cannot seek or accept instructions; the supervisory agencies should have necessary and practicable powers, including the power of investigation; it should be considered whether its staff and budget can effectively assist its implementation. Therefore, in order to pass the EU's adequacy certification and implement the protection of people's privacy and information autonomy, major countries have set up independent supervisory agencies for personal data protection based on the GDPR standards. According to this research, most countries have 5 to 10 commissioners that independently exercise their powers to supervise data exchange and personal data protection. In order to implement the powers and avoid unnecessary conflicts of interests among personnel, most of the commissioners are full-time professionals. Article 3 of Basic Code Governing Central Administrative Agencies Organizations defines independent agency as "A commission-type collegial organization that exercises its powers and functions independently without the supervision of other agencies, and operates autonomously unless otherwise stipulated." It is similar to Japan, South Korea, and the United States. III.Right to Opt-out The judgment pointed out that the parties still have the right to control afterwards the personal information that is allowed to be collected, processed and used without the consent of the parties or that meets certain requirements. Although Article 11 of PDPA provides for certain parties to exercise the right to control afterwards, it does not cover all situations in which personal data is used, such as: legally collecting, processing or using correct personal data, and its specific purpose has not disappeared, In the event that the time limit has not yet expired, so the information autonomy of the party cannot be fully protected, the subject, cause, procedure, effect, etc. of the request for suspension of use should be clearly stipulated in the revised law, and exceptions are not allowed. The United Kingdom is of great reference. In 2017, after the British Information Commissioner's Office (ICO) determined that the data sharing agreement between Google's artificial intelligence DeepMind and the British National Health Service (NHS) violated the British data protection law, the British Department of Health and Social Care proposed National data opt-out Directive in May, 2018. British health and social care-related institutions may refer to the National Data Opt-out Operational Policy Guidance Document published by the National Health Service in October to plan the mechanism for exercising patient's opt-out right. The guidance document mainly explains the overall policy on the exercise of the right to opt-out, as well as the specific implementation of suggested practices, such as opt-out response measures, methods of exercising the opt-out right, etc. National Data Opt-out Operational Policy Guidance Document also includes exceptions and restrictions on the right to opt-out. The Document stipulates that exceptions may limit the right to Opt-out, including: the sharing of patient data, if it is based on the consent of the parties (consent), the prevention and control of infectious diseases (communicable disease and risks to public health), major public interests (overriding) Public interest), statutory obligations, or cooperation with judicial investigations (information required by law or court order), health and social care-related institutions may exceptionally restrict the exercise of the patient's right to withdraw. What needs to be distinguished from the situation in Taiwan is that when the UK first collected public information and entered it into the NHS database, there was already a law authorizing the NHS to search and use personal information of the public. The right to choose to enter or not for the first time; and after their personal data has entered the NHS database, the law gives the public the right to opt-out. Therefore, the UK has given the public two opportunities to choose through the enactment of special laws to protect public's right to information autonomy. At present, the secondary use of data in the health insurance database does not have a complete legal basis in Taiwan. At the beginning, the data was automatically sent in without asking for everyone’s consent, and there was no way to withdraw when it was used for other purposes, therefore it was s unconstitutional. Hence, in addition to thinking about what kind of provisions to add to the PDPA as a condition for "exception and non-request for cessation of use", whether to formulate a special law on secondary use is also worthy of consideration by the Taiwan government. IV.De-identification According to the relevant regulations of PDPA, there is no definition of "de-identification", resulting in a conceptual gap in the connotation. In other words, what angle or standard should be used to judge that the processed data has reached the point where it is impossible to identify a specific person. In judicial practice, it has been pointed out that for "data recipients", if the data has been de-identified, the data will no longer be regulated by PDPA due to the loss of personal attributes, and it is even further believed that de-identification is not necessary. However, the Judgment No. 13 of Constitutional Court, pointed out that through de-identification measures, ordinary people cannot identify a specific party without using additional information, which can be regarded as personal data of de-identification data. Therefore, the judge did not give an objective standard for de-identification, but believed that the purpose of data utilization and the risk of re-identification should be measured on a case-by-case basis, and a strict review of the constitutional principle of proportionality should be carried out. So far, it should be considered that the interpretation of the de-identification standard has been roughly finalized. V.Conclusions The judge first explained that if personal information is processed, the type and nature of the data can still be objectively restored to indirectly identify the parties, no matter how simple or difficult the restoration process is, if the data is restored in a specific way, the parties can still be identified. personal information. Therefore, the independent control rights of the parties to such data are still protected by Article 22 of the Constitution. Conversely, when the processed data objectively has no possibility to restore the identification of individuals, it loses the essence of personal data, and the parties concerned are no longer protected by Article 22 of the Constitution. Based on this, the judge declared that according to Article 6, Item 1, Proviso, Clause 4 of the PDPA, the health insurance database has been processed so that the specific party cannot be identified, and it is used by public agencies or academic research institutions for medical and health purposes. Doing necessary statistical or academic research complies with the principles of legal clarity and proportionality, and does not violate the Constitution. However, the judge believes that the current personal data law or other relevant regulations still lack an independent supervision mechanism for personal data protection, and the protection of personal information privacy is insufficient. In addition, important matters such as personal health insurance data can be stored, processed, and transmitted externally by the National Health Insurance Administration in a database; the subject, purpose, requirements, scope, and method of providing external use; and organizational and procedural supervision and protection mechanisms, etc. Articles 79 and 80 of the Health Insurance Law and other relevant laws lack clear provisions, so they are determined to be unconstitutional. In the end, the judge found that the relevant laws and regulations lacked the provisions that the parties can request to stop using the data, whether it is the right of the parties to request to stop, or the procedures to be followed to stop the use, there is no relevant clear text, obviously the protection of information privacy is insufficient. Therefore, regarding unconstitutional issues, the Constitutional Court ordered the relevant agencies to amend the Health Insurance Law and related laws within 3 years, or formulate specific laws.
Adopting Flexible Mechanism to Promote Public Procurement of Innovation—the Amendment of Article 27 of the Statute for Industrial InnovationAdopting Flexible Mechanism to Promote Public Procurement of Innovation—the Amendment of Article 27 of the Statute for Industrial Innovation I.Introduction To further industrial innovation, improve industrial environment, and enhance industrial competitiveness through a systematic long-term approach, the Statute for Industrial Innovation (hereinafter referred to as the Statute) has been formulated in Taiwan. The central government authority of this Statute is the Ministry of Economic Affairs, and the Industrial Development Bureau of the Ministry of Economic Affairs (henceforth referred to as the IDB) is the administrative body for the formulation of this Statute. Since its formulation and promulgation in 2010, the Statute has undergone four amendments. The latest amendment, passed by the Legislative Yuan on November 3, 2017, on the third reading, is a precipitate of the international industrial development trends. The government is actively encouraging the investment in industrial innovation through a combination of capital, R&D, advanced technologies and human resources to help the promotion of industrial transformation, hence this large scale amendment is conducted. The amendment, promulgated and enacted on November 22, 2017, focuses on eight key points, which include: state-owned businesses partaking in R&D (Article 9-1 of the amended provisions of the Statute), the tax concessions of the limited partnership venture capital businesses (Article 2, Article 10, Article 12-1 and Article 23-1 of the amended provisions of the Statute), the tax concessions of Angel Investors (Article 23-2 of the amended provisions of the Statute), applicable tax deferral of employees' stock compensation (Article 19-1 of the amended provisions of the Statute), tax deferral benefit of stocks given to research institution creators (Article 12-2 of the amended provisions of the Statute), the promotion of flexible mechanism for innovation procurement (Article 27 of the amended provisions of the Statute), the establishment of evaluation mechanism for intangible assets (Article 13 of the amended provisions of the Statute), and forced sale auction of idled land for industrial use (Article 46-1 of the amended provisions of the Statute). This paper focuses on the amendment of Article 27 of the Fourth Revision of the Statute, which is also one of the major focuses of this revision—promoting flexible mechanism for innovation procurement, using the mass-market purchasing power of the government as the energetic force for the development of industrial innovation. II.Explanation of the Amendment of Article 27 of the Statute 1.Purposes and Descriptions of the Amendment of Article 27 of the Statute The original intent of Article 27 (hereinafter referred to as the Article) of the Statute, prior to the latest amendment (content of the original provisions is shown in Table 1), was to encourage government agencies and enterprises to give a priority to using green products through the "priority procurement" provisions of Paragraph 2, which allow government agencies to award contracts to green product producers using special government procurement procedures, so as to increase the opportunities for government agencies to use green products, and thereby promote the sustainable development of the industry. In view of the inherent tasks of promoting the development of industrial innovation, and considering that, using the large-scale government procurement demand to guide industrial innovation activities, has become the policy instrument accepted by most advanced countries, the IDB expects that, with the latest amendment of Article 27, the procurement mechanism policy for software, innovative products and services, in addition to the original green products, may become influential, and that "innovative products and services" may be included in the scope of "Priority Procurement" of this Article namely, make “priority procurement of innovative products and services” as one of the flexible mechanisms for promoting innovation procurement. A comparison of the amended provisions and the original provisions is shown in Table 1, and an explanation of the amendment is described as follows:[1] Table 1 A Comparison of Article 27 Amendment of the Statute for Industrial Innovation Amended Provisions Original Provisions Article 27 (I) Each central government authority in charge of end enterprises of a specific industry shall encourage government organizations (agencies) and enterprises to procure software, innovative and green products or services. (II) To enhance the procurement efficiencies, as effected by supply and demand, the central government authority shall offer assistance and services to the organizations (agencies) that handle these procurements as described in the preceding paragraph; wherein, Inter-entity Supply Contracts that are required for the aforesaid procurements, the common requirements shall be decided, in accordance with policy requirements, upon consultation between the central government authority and each central government authority in charge of end enterprises of a specific industry. (III) Where the software, innovative and green products or services, as described in Paragraph 1, must be tested, audited, accredited and certified, their associated fees and charges may be reduced, exempted, or suspended. (IV) Government organizations (agencies) may specify in the tender document the priority procurement of innovative and green products or services that have been identified to meet the requirements of paragraph 1. However, such a specification shall not violate treaties or agreements that have been ratified by the Republic of China. The measures concerning specifications, categories, and identification procedures of software, innovative and green products or services as prescribed in Paragraph 1; the testing, auditing criteria, accreditation and certification as prescribed in paragraph 3; and the Priority Procurement in paragraph 4 and other relevant items, shall be established by each central government authority in charge of end-enterprises of a specific industry. Article 27 (I) Each central government authority in charge of end enterprises shall encourage government agencies and enterprises to give priority to green products that are energy/resources recyclable/renewable, energy and water saving, non-toxic, less-polluting, or able to reduce the burden on the environment. (II) Agencies may specify in the tender documents that priority is given to green products meeting the requirement set forth in the preceding Paragraph. (III) The regulations governing the specifications, categories, certification procedures, review standards, and other relevant matters relating to the green products as referred to in the preceding Paragraph shall be prescribed by the central government authorities in charge of end enterprises. Source: The Ministry of Economic Affairs (I).Paragraph 1 In order to compel each central government authority in charge of end enterprises of a specific industry to motivate industrial innovation activities and sustainable development on the basis of requirements, and to support the development of the software industry in Taiwan, the provision, that such an authority should encourage government organizations (agencies) and enterprises to procure software and innovative products and services, is added in paragraph 1. (II).Paragraph 2 This procurement, as described in paragraph 1, is different from the property or services procurement of general affairs as handled by various organizations. To enhance procurement efficiencies, as effected by supply and demand, the central government authority, i.e., the Ministry of Economic Affairs, shall provide relevant assistance and services to organizations (agencies) handling these procurements, hence the added provisions in paragraph 2. For purchases using inter-entity supply contracts, which are bound by the requirements of this Article, due to their prospective nature, and that the common demand of each organization is difficult to make an accurate estimate by using a demand survey or other method, the Ministry of Economic Affairs shall discuss the issues with each central government authority in charge of end-enterprises of a specific industry, who consult or promote policies, and are in charge of end enterprises of a specific industry, and then make decisions in accordance with the policy promotion requirements. (III).Paragraph 3 The fee schedule for testing, auditing, accrediting and certifying software, innovative and green products or services is covered by Article 7, Administrative Fees of the Charges And Fees Act. The authorities in charge should determine relevant fee standards.However, considering that the test, audit, accreditation and certification may be conducted during a trial or promotional period, or circumstances dictate that it is necessary to motivate tenderer participation, the fee may be reduced, waived or suspended; hence, paragraph 3 is added. (IV).Paragraph 4 Paragraph 2 of the original provision is moved to paragraph 4 with the revisions made to paragraph 1, accordingly, and the provision for using Priority Procurement to handle innovative products or services is added. However, for organizations covered by The Agreement on Government Procurement (GPA), due to Taiwan's accession to the WTO, ANZTEC, and ASTEP, their procurement of items covered in the aforesaid agreements with a value reaching the legislated threshold, shall be handled in accordance with the regulations stipulated in the aforesaid agreements; hence the stipulation in the proviso that the procurement must not violate the provisions of treaties or agreements ratified by the Taiwan government. (V).Paragraph 5 Paragraph 3 of the original Article is moved to paragraph 5 with the revisions made to paragraph 1, accordingly, and the provision, that authorizes each central government authority in charge of end enterprises of a specific industry to determine appropriate measures concerning the methods of defining software, innovative and green products and services, as well as matters relating to test, accreditation, certification and priority procurement, is added. 2.The Focus of the Amendment of Article 27 of the Statute—Promoting a Flexible Mechanism for Innovation Procurement As previously stated, the amendment of this Article aims to stimulate activities of industrial innovation by taking advantage of the huge demand from government agencies. With the government agencies being the users of the innovative products or services, government's procurement market potential is tapped to support the development of industrial innovation. The original intention of amendment is to incorporate the spirit of Public Procurement of Innovation[2] into this Article, and to try to introduce EU's innovation procurement mechanism[3] into our laws. So that, a procurement procedure, that is more flexible and not subject to the limitation of procurement procedures currently stipulated by the Government Procurement Act, may be adopted to facilitate government sector action in taking the lead on adopting innovative products or services that have just entered their commercial prototype stage, or utilizing the demand for innovation in the government sector to drive industry's innovative ideas or R&D (that can not be satisfied with the existing solutions in the marketplace). However, while it is assessing the relevant laws and regulations of our government procurement system and the practice of implementation, the use of the current government procurement mechanism by organizations in the public sector to achieve the targets of innovation procurement is still in its infancy. It is difficult to achieve the goal, in a short time, of establishing a variety of Public Procurement of Innovation Solutions (PPI Solutions) as disclosed in the EU's Directive 2014/24 / EU, enacted by the EU in 2014, in ways that are not subject to current government procurement legislation. Hence, the next best thing: Instead of setting up an innovative procurement mechanism in such a way that it is "not subject to the restrictions of the current government procurement law", we will focus on utilizing the flexible room available under the current system of government procurement laws and regulations, and promoting the "flexible mechanism for innovation procurement” paradigm. With the provisions now provided in Article 27 of the Statute for Industrial Innovation, the government sector is authorized to adopt the "Priority Procurement" method on innovative products and services, thus increasing the public sector's access to innovative products and services. With this amendment, in addition to the "green products" listed in the original provisions of paragraph 1 of the Statute, "software" and "innovative products or services"[4] are now incorporated into the target procurement scope and each central government authority in charge of end enterprises of a specific industry should now encourage government organizations and enterprises to implement; however, the provisions of this paragraph do not have the specific effect of law, they are declaratory provisions. Two priorities are the１ primary focus of the provisions of paragraph 2 and paragraph 4 of this Article for promoting flexible mechanism for innovation procurement: (I)The procurement of software, innovative and green products or services that uses Inter-entity Supply Contracts may rely on the "policy requirement" to establish the common demand. According to the first half of the provisions of paragraph 2 of this Article, the Ministry of Economic Affairs, being the central government authority of the Statute, may provide assistance and services to organizations dealing with the procurement of software, innovative and green products and services.This is because the procurement subjects, as pertaining to software, products or services that are innovative and green products (or services), usually have the particularities (especially in the software) of the information professions; different qualities (especially in innovative products or services), and are highly profession-specific. They are different from the general affairs goods and services procured by most government agencies. Hence, the Ministry of Economic Affairs may provide assistance and service to these procurement agencies, along with the coordination of relevant organizations, in matters relating to the aforesaid procurement process in order to improve procurement efficiency as relates to supply and demand. Pursuant to the second half of Paragraph 2 of this Article, if the inter-entity supply contract method is used to process the procurement of software, innovative products and services, green products (or services) and other related subjects, there could be "Commonly Required" by two or more organizations concerning the procurement subjects, so in accordance with the stipulations of Article 93 of the Government Procurement Act, and Article 2 of the Regulations for The Implementation of Inter-entity Supply Contracts[5], an investigation of common requirements should be conducted first. However, this type of subject is prospective and profession-specific (innovative products or services in particular), and government organizations are generally not sure whether they have demand or not, which makes it difficult to reliably estimate the demand via the traditional demand survey method[6], resulting in a major obstacle for the procurement process. Therefore, the provisions are now revised to allow the Ministry of Economic Affairs to discuss procurement with each central government authority in charge of end enterprises of a specific industry, who consult or promote policies (such as the National Development Council, or central government authority in charge of end enterprises of a specific industry relevant to the procurement subjects), and then make decisions based on the quantities of goods and services of common requirements in accordance with the demand for promoting the policy. The provisions explicitly stipulate such flexibility in adopting methods other than the "traditional demand survey" method, as is required by laws for the common demand of Inter-entity Supply Contracts. Thus, agencies currently handling procurement of prospective or innovative subjects using inter-entity supply contracts, may reduce the administrative burden typically associated with conducting their own procurement. In addition, with a larger purchase quantity demand, as generated from two or more organizations, the process can more effectively inject momentum into the industry, and achieve a win-win situation for both supply and demand. (II)Government organizations may adopt "Priority Procurement" when handling procurement of innovative and green products or services. Prior to the amendment, the original provision of paragraph 2 of this Article stipulates that organizations may specify in the tender document Priority Procurement of certified green products; Additionally, a provision of paragraph 3 of the original Article stipulates that each central government authority in charge of end enterprises of a specific industry is authorized to establish the specifications, categories and other relevant matters of the green products[7] (according to the interpretation of the original text, it should include "Priority Procurement" in paragraph 3 of the Article).After the amendment of the Article, paragraph 2 of the original Article is moved to paragraph 4. In addition to the original green products, "innovative products or services" are included in the scope of "Priority Procurement" that organizations are permitted to adopt (but, the "software" in paragraph 1 was not included[8]). However, for organizations covered by The Agreement on Government Procurement (GPA), due to Taiwan's accession to the WTO, ANZTEC, and ASTEP, their procurement of items covered by the aforesaid agreements with a value reaching the stated threshold, shall be handled in accordance with the regulations stipulated in the aforesaid agreements; hence the stipulation in the proviso that the procurement must not violate the provisions in treaties or agreements ratified by the Taiwan government. Additionally, paragraph 3 of the original Article is moved to paragraph 5. Each central government authority in charge of end enterprises of a specific industry is authorized to use their own judgment on matters concerning the specifications, categories, certification processes of software, innovative and green products or services and the method for Priority Procurement of paragraph 4. In accordance with the authorization in paragraph 5 of the amended provision of this Article, each central government authority in charge of end enterprises of a specific industry may, depending on the specific policy requirement that promotes innovation development of its supervised industry, establish methods of identification and the processes of Priority Procurement for “Specific categories of innovative products or services", especially on products or services fitting the requirements of the method of using the demands of government organizations to stimulate industrial innovation. The established "Regolations for priority procurement of Specific categories of innovative products or services" is essentially a special regulation of the government procurement legislation, which belongs to the level of regulations, that is, it allows the organizations to apply measures other than the government procurement regulations and its related measures to the procurement process, and adopt "Preferential Contract Awarding" for qualified innovative products or services. Any government agency that has the need to procure a particular category of innovative product or service may, in accordance with the provisions of paragraph 4 of this Article, specify the use of Priority Procurement in the tender document, and administer the procurement, in accordance with the process of this particular category of innovative products, or priority procurement. The agency is now enabled to follow a more flexible procurement process than that of the government procurement regulations to more smoothly award contracts for qualified innovative products or services. Citing two examples of this applied scenario: Example one, "innovative information services": The central government authority in charge of information services is IDB. Thus, IDB may, according to the authorization provided for in paragraph 5 of the Article, establish the identification methods for innovative information services (the purpose of which is to define the categories and specifications of innovative services covered in the scope of priority procurement) and priority procurement processes, pertaining to emerging information services that are more applicable to the requirements of government agencies, such as: cloud computing services, IoT services, and Big Data analysis services.Example two, "Innovative construction or engineering methods": The central government authority in charge of construction affairs is the Construction and Planning Agency of the Ministry of the Interior. Since the agency has already established the "Guidelines for Approval of Applications for New Construction Techniques, Methods, Equipment and Materials", the agency may establish a priority procurement process for new construction techniques, methods or equipment, in accordance with the stipulations in paragraph 5 of the Article. Government agencies may conduct procurement following any of these priority procurement practices, if there is a requirement for innovative information services, or new construction techniques, methods or equipment. In addition to the two aforementioned flexible mechanisms for innovation procurement, where government agencies are granted flexible procedures to handle the procurement of innovative products or services via the use of the flexible procurement mechanism, paragraph 3, concerning the incentive measures of concessionary deductions, is added to the Article to reduce the bidding costs for tenderers participating in the tender. For the Procurement of software, innovative and green products or services encouraged by each central government authority in charge of end-enterprises of a specific industry (not limited to those handled by the authorities themselves, using inter-entity supply contracts or priority procurement methods), if the procurement subjects are still required to be tested, audited, accredited and certified by the government agencies, such a process falls under the scope of administrative fees collection, pursuant to paragraph 1 Article 7 of the Charges And Fees Act. However, considering that the item subject to test, audit, accreditation and certification may be in a trial or promotional period, or that it may be necessary to motivate tenderer participation, the provisions of paragraph 3 are thusly added to the Article to reduce, waive, or suspend the collection of aforementioned fees. Executive authorities in charge of collecting administrative fees shall proceed to reduce, waive, or suspend the collection pursuant to the stipulations of paragraph 3 of the Article and Article 12 subparagraph 7 of the Charges And Fees Act.[9] III.The direction of devising supporting measures of flexible mechanism for innovation procurement The latest amendment of the Statute for Industrial Innovation was promulgated and enacted on November 22, 2017, it is imperative that supporting measures pertaining to Article 27 of the Statute be formulated. As previously stated, the flexible mechanism for innovation procurement, as promoted in this Article, is designed specifically for the products or services that are pertinent to the government procurement requirements and are capable of stimulating industrial innovation, and providing a more flexible government procurement procedure for central authorities in charge of a specific industry as a policy approach in supporting industry innovation. Thus, the premise of devising relevant supporting measures is dependent on whether the specific industry, as overseen by the particular central authority, has a policy in place for promoting the development of industrial innovation, and on whether it is suitable in promoting the flexible mechanism for innovation procurement as described in this Article. The purpose of this Article is to promote the flexible mechanism for innovation procurement. Supporting measures pertaining to this Article will focus on the promotion of devising an "Innovation Identification Method", and of the "Priority Procurement Process" of the innovative products or services of each industry that central government authorities oversee. The former will rely on each central government authority in charge of a specific industry to charter an industry-appropriate and profession-specific planning scheme; while, for the latter, the designing of a priority procurement process, in accordance with the nature of the various types of innovative products or services, does not have to be applicable to all. However, regardless what type of innovative products or services the priority procurement process is designed for, the general direction of consideration should be given to - taking the different qualities of innovative products or services as the core consideration. Additionally, the attribute of the priority procurement procedures focusing specifically on the different qualities of the innovative subjects relates to the special regulation relevant to the government procurement regulations. Thus, the procurement procedures should follow the principle that if no applicable stipulation is found in the special regulation, the provisions of the principal regulation shall apply. The so-called "Priority Procurement" process refers to the "Preferential Contract Awarding" on tenders that meet certain criteria in a government procurement procedure. The existing Government Procurement Act (GPA, for short) and its related laws that have specific stipulations on "Priority Procurement" can be found in the "Regulations for Priority Procurement of Eco-Products" (Regulations for Eco-Products Procurement, for short), and the "Regulations for Obliged Purchasing Units / Institutions to Purchase the Products and Services Provided by Disabled Welfare Institutions, Organizations or Sheltered Workshops" (Regulations for Priority Procurement of Products or Services for Disabled or Shelters, for short). After studying these two measures, the priority procurement procedures applicable to criteria-conformed subjects can be summarized into the following two types: 1.The first type: Giving preferential contract awarding to the tenderer who qualifies with "the lowest tender price”, as proposed in the tender document, and who meets a certain criteria (for example, tenderers of environmental products, disabled welfare institutions, or sheltered workshops). There are two scenarios: When a general tenderer and the criteria-conformed tenderer both submit the lowest tender price, the criteria-conformed tenderer shall obtain the right to be the "preferential winning tender" without having to go through the Price Comparison and Reduction Procedures. Additionally, if the lowest tender price is submitted by a general tenderer, then the criteria-conformed tenderers have the right to a "preferential price reduction” option, that is, the criteria-conformed tenderers can be contacted, in ascending order of the tender submitted, with a one time option to reduce their bidding prices. The first tenderer who reduces their price to the lowest amount shall win the tender. Both the Regulations for Eco-Products Procurement[10] and Regulations for Priority Procurement of Products or Services for Disabilities or Shelters[11] have such relevant stipulations. 2.The second type: It is permitted to give Preferential Contract Awarding to a criteria-conformed tenderer, when the submitted tender is within the rate of price preference. When the lowest tenderer is a general tenderer, and the tender submitted by the criteria-conformed tenderer is higher than the lowest tender price, the law permits that if the tender submitted is "within the rate of price preference ", as set by the procuring entity, the procuring entity may award the contract preferentially to "the tender submitted by the criteria-conformed tenderer." The premise for allowing this method is that the tender submitted by the criteria-conformed tenderer must be within the preferential price ratio. If the submitted tender is higher than the preferential price ratio, then the criteria-conformed tenderer does not have the right to preferential contract awarding. The contract will be awarded to theother criteria-conformed tenderer, or to a general tenderer. This method is covered in the provisions of the Regulations for Eco-Products Procurement[12]. However, the important premise for the above two priority procurement methods is that the nature of the subject matter of the tender is suitable for adopting the awarding principle of the lowest tender (Article 52, Paragraph 1, Subparagraphs 1 and 2 of the Procurement Act), that is, it is difficult to apply these methods to the subjects if they are different qualities. Pursuant to the provisions of Article 66 of the Enforcement Rules of the Government Procurement Act, the so-called "different qualities" refers to the construction work, property or services provided by different suppliers that are different in technology, quality, function, performance, characteristics, commercial terms, etc. Subjects of different qualities are essentially difficult to compare when based on the same specifications. If just looking at pricing alone it is difficult to identify the advantages and disadvantages of the subjects, hence, the awarding principle of the lowest tender is not appropriate. The innovative subjects are essentially subjects of different qualities, and under the same consideration, they are not suitable for applying the awarding principle of the lowest tender. Therefore, it is difficult to adopt the lowest-tender-based priority procurement method for the procurement of innovative subjects. In the case of innovative subjects with different qualities, the principle of the most advantageous tender should be adopted (Article 52 Paragraph 1 Subparagraph 3 of the Procurement Act) to identify the most qualified vender of the subjects through open selection. Therefore, the procedure for the priority procurement of innovative subjects with different qualities should be based on the most advantageous tender principle with focus on the "innovativeness" of the subjects, and consideration on how to give priority to tenderers, who qualify with the criteria of innovation. Pursuant to the provisions of Article 56 Paragraph 4 of the Procurement Act, the Procurement and Public Construction Commission has established the "Regulations for Evaluation of the Most Advantageous Tender". The tendering authorities adopting the most advantageous tender principle should abide by the evaluation method and procedures delineated in the method, and conduct an open selection of a winning tender. According to the Regulations for Evaluation of the Most Advantageous Tender, in addition to pricing, the tenderers' technology, quality, function, management, commercial terms, past performance of contract fulfillment, financial planning, and other matters pertaining to procurement functions or effectiveness, maybe chosen as evaluation criteria and sub-criteria. According to the three evaluation methods delineated in the provisions of Article 11 of the Regulations for Evaluation of the Most Advantageous Tender (overall evaluation score method, price per score point method, and ranking method), pricing could not been included in the scoring. That is, "the prices of the subjects" is not the absolute criterion of evaluation of the most advantageous tender process. The priority procurement procedures designed specifically for innovative subjects with different qualities may adopt an evaluation method that excludes "pricing" as part of the scoring criterion so as to give innovative subject tenderers the opportunity to be more competitive in the bidding evaluation process, and due to the extent of their innovativeness, obtain the right to preferential tenders. If it must be included in the scoring, the percentage of the total score for pricing should be reduced from its usual ratio[13], while stipulating explicitly that "innovation" must be included as part of the evaluation criteria. In addition, its weight distribution should not be less than a ratio that highlights the importance of innovation in the evaluation criteria. Furthermore, when determining how to give preference to tenderers who meet certain innovation criteria in the contract awarding procedures, care should be taken to stay on focus with the degree of innovation of the subject (the higher the degree of innovation, the higher the priority), rather than giving priority to arbitrary standards. In summary, with consideration of priority procurement procedures designed specifically for innovative subjects with different qualities, this paper proposes the following preliminary regulatory directions: 1.Adopt the awarding principle of the most advantageous tender. 2.Explicitly stipulate the inclusion of "innovation" in the evaluation criteria and sub-criteria, and its ratio, one that indicates its importance, should not be less than a certain percentage of the total score (for example 20%). 3.Reduce the distributed ratio of "price" in the scoring criteria in the open selection. 4.After the members of the evaluation committee have concluded the scoring, if more than two tenderers have attained the same highest overall evaluated score or lowest quotient of price divided by overall evaluated score, or more than two tenderers have attained the first ranking, the contract is awarded preferentially to the tenderer who scores the highest in the "innovation" criterion. 5.When multiple awards (according to Article 52 Paragraph 1 Subparagraph 4 of the Procurement Act) are adopted, that is, there is more than one final winning tender, the procuring entity may select the tenderers with higher innovation scores as the price negotiation targets for contract awarding, when there are more than two tenderers with the same ranking. Using the above method to highlight the value of innovative subjects will make these suppliers more competitive, because of their innovativeness ratings in the procurement procedures, and not confine them to the limitation of price-determination. So that, subject suppliers with a high degree of innovation, may attain the right to the preferential contract awarding that they deserve due to their innovativeness, and the procuring entity can purchase suitable innovative products in a more efficient and easy process. It also lowers the threshold for tenderers with innovation energy to enter the government procurement market, thus achieving the goal of supporting industrial innovation and creating a win-win scenario for supply and demand. [1] Cross-reference Table of Amended Provisions of the Statute for Industrial Innovation, The Ministry of Economic Affairs, https://www.moea.gov.tw/MNS/populace/news/wHandNews_File.ashx?file_id=59099 (Last viewed date: 12/08/2017). [2] According to the Guidance for public authorities on Public Procurement of Innovation issued by the Procurement of Innovation Platform in 2015, the so-called innovation procurement in essence refers to that the public sector can obtain innovative products, services, or work by using the government procurement processes, or that the public sector can administer government procurement with a new-and-better process. Either way, the implementation of innovation procurement philosophy is an important link between government procurement, R & D and innovation, which shortens the distance between the foresighted emerging technologies/processes and the public sector/users. [3] The EU's innovative procurement mechanism comprises the "Public Procurement of Innovation Solutions" (PPI Solutions) and "Pre-Commercial Procurement" (PCP). The former is one of the government procurement procedures, explicitly regulated in the new EU Public Procurement Directive (Directive 2014/24 / EU), for procuring solutions that are innovative, near or in preliminary commercial prototype; The latter is a procurement process designed to assist the public sector in obtaining technological innovative solutions that are not yet in commercial prototype, must undergo research and development process, and are not within the scope of EU Public Procurement Directive. [4] The "software, innovative and green products or services", as described in paragraph 1 of Article 27 of the amended Statute for Industrial Innovation, refers to, respectively, "software", "innovative products or services", and "green products or services" in general. There is no co-ordination or subordination relationship between the three; the same applies to "innovative and green products or services" in paragraph 4. [5] Article 93 of the Government Procurement Act stipulates: "An entity may execute an inter-entity supply contract with a supplier for the supply of property or services that are commonly needed by entities." Additionally, Article 2 of the Regulations for The Implementation of Inter-entity Supply Contracts stipulates: "The term 'property or services that are commonly needed by entities' referred to in Article 93 of the Act means property or services which are commonly required by two or more entities. The term 'inter-entity supply contract (hereinafter referred to as the “Contract”)' referred to in Article 93 of the Act means that an entity, on behalf of two or more entities, signs a contract with a supplier for property or services that are commonly needed by entities, so that the entity and other entities to which the Contract applies can utilize the Contract to conduct procurements." Therefore, according to the interpretation made by the Public Construction Commission, the Executive Yuan (PCC, for short), organizations handling inter-entity supply contracts should first conduct a demand investigation. [6] In general, organizations in charge of handling the inter-entity supply contracts will disseminate official documents to applicable organizations with an invitation to furnish information online about their interests and estimated requirement (for budget estimation) at government's e-procurement website. However, in the case of more prospective subjects (such as cloud services of the emerging industry), it may be difficult for an organization to accurately estimate the demand when filling out the survey, resulting in a mismatch of data between the demand survey and actual needs. [7] In accordance with the authorization of paragraph 3 of the Article, the IDB has established "Regulations Governing Examination and Identification of Advanced Recycled Products by Ministry of Economic Affairs" (including an appendix: Identification Specification for Resource Regenerating Green Products), except that the priority procurement process was not stipulated, because the Resource Regenerating Green Products, that meet the requirements of the Ministry of Economic Affairs, are covered by the "Category III Products" in the provisions of Article 6 of the existing "Regulations for Priority Procurement of Eco-Products", set forth by the PPC and The Environmental Protection Administration of the Executive Yuan. Hence, organizations that have the requirement to procure green products, may proceed with priority procurement by following the regulations in the "Regulations for Priority Procurement of Eco-Products". [8] After the amendment of the Article, the "software" in the provisions of paragraph 1 was excluded in paragraph 4, because the objective of paragraph 4 is to promote industry innovation and sustainable development with the use of a more flexible government procurement procedure. Thus, the subjects of the priority procurement mechanism are focused on "innovative" and "green" products or services, which exclude popular "software" that has a common standard in the market. However, if it is an "innovative software", it may be included in the "innovative products or services" in the provisions of paragraph 4. [9] According to the provisions of Article 12 of the Charges And Fees Act: "In any of the following cases, the executive authority in charge of the concerned matters may waive or reduce the amount of the charges and fees, or suspend the collection of the charges and fees: 7. Waiver, reduction, or suspension made under other applicable laws." [10] Refer to Article 12, Paragraph 1, Subparagraphs 1 and Article 13, Paragraph 1 and 2 of Regulations for Priority Procurement of Eco-Products. [11] Refer to Article 4 of Regulations for Obliged Purchasing Units / Institutions to Purchase the Products and Services Provided by Disabled Welfare Institutions, Organizations or Sheltered Workshops. [12] Refer to Article 12, Paragraph 1, Subparagraphs 2 and Article 13, Paragraph 3 of Regulations for Priority Procurement of Eco-Products. [13] The provisions of paragraph 3 Article 16 of the Regulations for Evaluation of the Most Advantageous Tender stipulates: Where price is included in scoring, its proportion of the overall score shall be not less than 20% and not more than 50%.
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