Executive Yuan Yuan Promoted “Productivity 4.0” to Boost Global Competitiveness
Executive Yuan Yuan Promoted “Productivity 4.0” to Boost Global Competitiveness
1.Executive Yuan held the “Productivity 4.0: Strategy Review Board Meeting” to boost industrial transformation
The Executive Yuan held the “Productivity 4.0: Strategy Review Board Meeting” on June 4-5th , 2015. The GDP per capita of manufacturing and service industries, including machinery, metal processing, transportation vehicles, 3C, food, textile, logistics, health care, and agriculture, are expected to be over 10 million NT dollars by 2024.
This meeting focuses on three topics: Productivity 4.0 industry and technology development strategy, advanced development strategy on advanced manufacturing and innovation application, and strategy on engineering smart tech talents cultivation and Industry-academic Cooperation. The three main themes to be used to put the advanced manufacturing into force are smart automation and robots, sensing and control technologies from Internet of Things (IoT), and technologies used in analyzing the big data. As a result, the digitalization of small- and medium-sized business and smart operation of big business are as the cornerstones to build service-oriented systems and develop advanced manufacturing in R.O.C.. Facing challenges of labor shortages and aging labor forces, the Executive Yuan is planning to implement “Productivity 4.0” to stimulate the process of industry transformation of value-added innovation and provide new products and services in global market.
In implementing the above-mentioned policy goals, the Executive Yuan is planning three directions to be followed. First, global competitiveness is depended upon key technologies. As OEMs, manufacturing industry in R.O.C. is unable to provide products of self-owned brand and is vulnerable while facing challenges from other transnational companies. Second, the Premier, Dr. Mao Chi-kuo, made reference of the bicycle industry’s successful development model as an example for the Productivity 4.0 “A-Team” model. Through combining technologies and organizations, the aim is to build competitive supply chains across all the small- and medium-sized business. Finally, the new skills training and the cultivation of talents are more urgent than ever before. While technical and vocational schools, universities and postgraduate studies are needed to be equipped with sufficient fundamental knowledge, those already in the job market have to learn the skills and knowledge necessary for industrial transformation so that they could contribute their capabilities and wisdom for Ourfuture.
2.Executive Yuan Approved “Productivity 4.0 Initiative” to Promote Industry Innovation and Transformation
The Executive Yuan has approved the Productivity 4.0 Initiative on September 17, 2015. Before its approval, the Office of Science and Technology (OST) gave a presentation on the Draft of the Productivity 4.0 Initiative on July 23, 2015 detailing the underlying motives behind the program. Confronted with the challenges our traditional industries and OEMs meet, including labor shortages (the national laboring population ranging from age 15 to 65 has seen a substantial decrease of 0.18 to 0.2 million annually) and a aging labor force, the the Productivity 4.0 Initiative sets the directions for industrial development tackling these issues through six main strategies: enhancing and fine-tuning flagship industries’ smart-supply-chain ecosystems, encouraging the establishing of startups, localizing production and services, securing autonomy in key technologies, cultivating practical and technical talents and injection of industrial policy tools.
After hearing the presentation on the Initiative, the Premier, Mao Chi-kuo, made reference to the core ideas of the Productivity 4.0 Initiative in his concluding remarks. “The core concept of the Productivity 4.0 Initiative is to propel R.O.C. to a pivotal position in the global manufacturing supply chain by capitalizing on the nation’s core strength in industrial technology, while fostering an outstanding work environment stimulating synergy between employees and automotive systems in order to cope with R.O.C.’s imminent labor shortage,” Mao said
Also focusing on the Productivity 4.0 Initiative, the Premier gave a keynote speech titled ‘Views on the current economic and social issues’ at the Third Wednesday Club. He takes the view that the GDP downslide is of a structural nature and the government is going to guide the economy towards an upward path by assisting industries to innovate and transform. In an effort to remove the three major obstacles to innovation and entrepreneurship— discouraging laws and regulations, difficulty in raising capital and gathering financing as well as lack of international partnerships, the government has been diligently promoting the Third Party Payment Act as well as setting-up R.O.C. Rapid Innovation Prototyping League for Enterprises.
Among these measures, Industry 4.0 has been at the core of the Initiative, in which cyber-physical production system (CPS) would be introduced by integrating Cloud-computing and Internet of Things technology to spur industrial transformations, specifically industrial manufacturing, added-value services and agricultural production. The Productivity 4.0 Initiative is an imperative measure in dealing with R.O.C.’s imminent issues of labor shortage, and the aging society, its promising effects are waiting to unfold.
3.Executive Yuan’s Further Addendum to “Productivity 4.0 Plan”: Attainment of Core Technologies and the Cultivation of Domestic Technical Talents
In an continual effort to put in place the most integrated infrastructural setting for the flourishing of its “Productivity 4.0 Plan”, Executive Yuan Premier Mao Chi-Kuo announced on the 22nd October that the overhaul infrastructural set-up will be focused on the development of core technologies and the cultivation of skilled technical labor. To this end, the Executive Yuan is gathering participation and resources from the Ministry of Economic Affairs (hereafter MOEA), Ministry of Education, Ministry of Science and Technology, Ministry of Labor, the Council of Agriculture, among other governmental bodies, collecting experiences and knowledge from academia and researchers, in order to improve the development of pivotal technologies, the training of skilled technical labor and consequently to improve and reform the present education system so as to meet the aforementioned goals.
Premier Mao Chi-Kuo pointed out that Productivity 4.0 is a production concept in which the industry is evolved from mere automation- to intelligent-based manufacturing, shifting towards a “small-volume, large-variety” production paradigm, closing the gaps between production and consumption sides through direct communication, hence allowing industry to push itself further on changing its old efficiency-based production model to an innovation-driven one.
Apart from the Research and Development efforts geared towards key technologies, Premier Mao stressed that the people element, involved in this transformative process, is what dictates Productivity 4.0 Plan’s success. The cross-over or multi-disciplinary capability of the labor force is especially significant. In order to bring up the necessary work force needed for Productivity 4.0, besides raising support for the needed Research and Development, an extensive effort should be placed in reforming and upgrading the current educational system, as well as the technical labor and internal corporate educational structure. Moreover, an efficient platform should be implemented so that opinions and experiences could be pooled out, thus fostering closer ties between industry, academia and research.
The MOEA stated that the fundamental premise behind the Productivity 4.0 strategy is that by way of systematic, brand-orientated formation of technical support groups, constituted by members of industry, academia and research, will we able to develop key sensor, internet and core technologies for our manufacturing, business and agriculture sector. It is estimated that by the end of year 2016, the Executive Yuan will have completed 6 major Productivity 4.0 production lines; supported the development of technical personnel in smart manufacturing, smart business and smart agriculture, amounting to 2,500 persons; established 4 inter-university, inter-disciplinary strategic partnerships in order to prepare much needed labor force for the realization of the Productivity 4.0 Plan. It is estimated that by the year 2020, industry has already developed the key technologies through the Productivity 4.0 platform, aiding to decrease by 50% the time currently needed to for Research and Development, increasing the technological sovereignty by 50% and accrue production efficiency by 15% and above. Furthermore, through the educational reforms, the nation will be able to lay solid foundations for its future labor talents, as well as connecting them to the world at large, effectively making them fit to face the global markets and to upgrade their production model.
Experiences about opening data in private sector Ⅰ. Introduction Open data is the idea that data should be available freely for everyone to use and republish without restrictions from copyright, patents or other mechanisms of control. The concept of open data is not new; but a formalized definition is relatively new, and The Open Definition gives full details on the requirements for open data and content as follows: Availability and access: the data must be available as a whole with no more than a reasonable reproduction cost, preferably by downloading over the internet. The data must also be available in a convenient and modifiable form. Reuse and redistribution: the data must be provided under terms that permit reuse and redistribution including the intermixing with other datasets. The data shall be machine-readable. Universal participation: everyone must be able to use, reuse and redistribute the data— which by means there should be no discrimination against fields of endeavor or against persons or groups. For example, “non-commercial” restrictions that would prevent “commercial” use, or restrictions of use for certain purposes are not allowed. In order to be in tune with international developmental trends, Taiwan passed an executive resolution in favor of promoting Open Government Data in November 2012. Through the release of government data, open data has grown significantly in Taiwan and Taiwan has come out on top among 122 countries and areas in the 2015 and 2016 Global Open Data Index[1]. The result represented a major leap for Taiwan, however, progress is still to be made as most of the data are from the Government, and data from other territories, especially from private sector can rarely be seen. It is a pity that data from private sector has not being properly utilized and true value of such data still need to be revealed. The following research will place emphasis to enhance the value of private data and the strategies of boosting private sector to open their own data. Ⅱ. Why open private data With the trend of Open Government Data recent years, countries are now starting to realize that Open Government Data is improving transparency, creating opportunities for social and commercial innovation, and opening the door to better engagement with citizens. But open data is not limited to Open Government Data. In fact, the private sector not only interacts with government data, but also produces a massive amount of data, much of which in need of utilized. According to the G20 open data policy agenda made in 2014, the potential economic value of open data for Australia is up to AUD 64 billion per annum, and the potential value of open data from private sector is around AUD 34 billion per annum. Figure 1 Value of open data for Australia (AUD billion per annum) Source: McKinsey Global Institute The purpose for opening data held by private entities and corporations is rooted in a broad recognition that private data has the potential to foster much public good. Openness of data for companies can translate into more efficient internal governance frameworks, enhanced feedback from workers and employees, improved traceability of supply chains, accountability to end consumers, and with better service and product delivery. Open Private Data is thus a true win-win for all with benefiting not only the governance but environmental and social gains. At the same time, a variety of constraints, notably privacy and security, but also proprietary interests and data protectionism on the part of some companies—hold back this potential. Ⅲ. The cases of Open Private Data Syngenta AG, a global Swiss agribusiness that produces agrochemicals and seeds, has established a solid foundation for reporting on progress that relies on independent data collection and validation, assurance by 3rd party assurance providers, and endorsement from its implementing partners. Through the website, Syngenta AG has shared their datasets for agricultural with efficiency indicators for 3600 farms for selected agro-ecological zones and market segments in 42 countries in Europe, Africa, Latin America, North America and Asia. Such datasets are precious but Syngenta AG share them for free only with a Non-Commercial license which means users may copy and redistribute the material in any medium or format freely but may not use the material for commercial purposes. Figure 2 Description and License for Open data of Syngenta AG Source: http://www.syngenta.com Tokyo Metro is a rapid transit system in Tokyo, Japan has released information such as train location and delay times for all lines as open data. The company held an Open Data Utilization Competition from 12 September to 17 November, 2014 to promote development of an app using this data and continues to provide the data even after the competition ended. However, many restrictions such as non-commercial use, or app can only be used for Tokyo Metro lines has weakened the efficiency of open data, it is still valued as an initial step of open private data. Figure 3 DM of Tokyo Metro Open data Contest Source: https://developer.tokyometroapp.jp/ Ⅳ. How to enhance Open Private Data Open Private Data is totally different from Open Government Data since “motivation” is vital for private institutions to release their own data. Unlike the government data can be disclosed and free to use via administrative order or legislation, all of the data controlled by private institutions can only be opened under their own will. The initiative for open data therefore shall focus on how to motivate private sectors releasing their own data-by ensuring profit and minimizing risks. Originally, open data shall be available freely for everyone to use without any restrictions, and data owners may profit indirectly as users utilizing their data creating apps, etc. but not profit from open data itself. The income is unsteady and data owners therefore lose their interest to open data. As a countermeasure, it is suggested to make data chargeable though this may contradict to the definition of open data. When data owners can charge by usage or by time, the motivation of open data would arise when open data is directly profitable. Data owners may also worry about many legal issues when releasing their own data. They may not care about whether profitable or not but afraid of being involved into litigation disputes such as intellectual property infringement, unfair competition, etc. It is very important for data owners to have a well protected authorization agreement when releasing data, but not all of them is able to afford the cost of making agreement for each data sharing. Therefore, a standard sample of contract that can be widely adopted plays a very important role for open private data. A data sharing platform would be a solution to help data owners sharing their own data. It can not only provide a convenient way to collect profit from data sharing but help data owners avoiding legal risks with the platform’s standard agreement. All the data owners have to do is just to transfer their own data to the platform without concern since the platform would handle other affairs. Ⅴ. Conclusion Actively engaging the private sector in the open data value-chain is considered an innovation imperative as it is highly related to the development of information economy. Although many works still need to be done such as identifying mechanisms for catalyzing private sector engagement, these works can be done by organizations such as the World Bank and the Centre for Open Data Enterprise. Private-public collaboration is also important when it comes to strengthening the global data infrastructure, and the benefits of open data are diverse and range from improved efficiency of public administrations to economic growth in the private sector. However, open private data is not the goal but merely a start for open data revolution. It is to add variation for other organizations and individuals to analyze to create innovations while individuals, private sectors, or government will benefit from that innovation and being encouraged to release much more data to strengthen this data circulation. [1] Global Open Data Index, https://index.okfn.org/place/（Last visited: May 15, 2017）
A Before and After Impact Comparison of Applying Statute for Industrial Innovation Article 23-1 Draft on Venture Capital Limited PartnershipsA Before and After Impact Comparison of Applying Statute for Industrial Innovation Article 23-1 Draft on Venture Capital Limited Partnerships I. Background Because the business models adopted by Industries, such as venture capital, film, stage performance and others, are intended to be temporary entities, and the existing business laws are not applicable for such industries,[1] the Legislature Yuan passed the “Limited Partnership Act” in June 2015,[2] for the purpose of encouraging capital injection into these industries. However, since the Act was passed, there are currently only nine limited partnerships listed on the Ministry of Economic Affairs' limited partnership information website. Among them, “Da-Zuo Limited Partnership (Germany) Taiwan Branch” and “Stober Antriebstechnik Limited Partnership (Germany) Taiwan Branch”, are branch companies established by foreign businesses, the remaining seven companies are audio video production and information service businesses. It is a pity that no venture capital company is adopting this format.[3] In fact, several foreign countries have set up supporting measures for their taxation systems targeting those business structures, such as limited partnerships. For example, the pass-through taxation method (or referred to as single entity taxation) is adopted by the United States, while Transparenzprinzip is used by Germany. These two taxation methods may have different names, but their core ideas are to pass the profits of a limited partnership to the earnings of partners.[4] However, following the adoption of the Limited Partnership Act in Taiwan, the Ministry of Finance issued an interpretation letter stating that because the current legal system confers an independent legal entity status to the business structure of a limited partnership, it should be treated as a profit-seeking business and taxed with Profit-Seeking Enterprise Income Tax.[5] Therefore, to actualize the legislative objective of encouraging innovative businesses organized under tenets of the Limited Partnership Act, the Executive Yuan presented a draft amendment for Article 23-1 of the Statute for Industrial Innovation (hereinafter referred to as the Draft), introducing the "Pass Through Taxation Principle" as adopted by several foreign countries. That is, a Limited Partnership will not be levied with the Profit-Seeking Enterprise Income Tax, but each partner will file income tax reports based on after-profit-gains from the partnership that are passed through to each partner. It is expected that the venture capital industry will now be encouraged to adopt the limited partnership structure, and thus increase investment capital in new ventures. II. The Pass Through Taxation Method is Applicable to Newly Established Venture Capital Limited Partnerships 1. The Requirements and Effects (1) The Requirements According to the provisions of Article 23-1 Paragraph 3 of the Draft, to be eligible for Pass Through Taxation, newly established venture capital limited partnerships must meet the following requirements: 1. The venture capital limited partnerships are established between January 1, 2017 and December 31, 2019. 2. Investment threshold of the total agreed capital contribution, total received capital contribution, and accumulated total capital contribution, within five years of the establishment of venture capital limited partnerships: Total Agreed Capital Contribution in the Limited Partnership Agreement Total Received Capital Contribution Accumulated Investment Amount for Start-up Companies The Year of Establishment 3 hundred million ✕ ✕ The Second Year ✕ ✕ The Third Year 1 hundred million ✕ The Fourth Year 2 hundred million Reaching 30 percent of the total received capital contribution of the year or 3 hundred million NT dollars. The Fifth Year 3 hundred million 3. The total amount, that an overseas company applies in capital and investments in actual business operations in Taiwan, reaches 50% of its total received capital contribution of that year. 4. In compliance with government policies. 5. Reviewed and approved by the central competent authority each year. (2) The Effects The effects of applying the provisions of Article 23-1 Paragraph 3 of the Draft are as follows: 1. Venture capital limited partnerships are exempt from the Profit-Seeking Enterprise Income Tax. 2. Taxation method for partners in a limited partnership after obtaining profit gains: (1) Pursuant to the Income Tax Act, Individual partners and for-profit business partners are taxed on their proportionally-calculated, distributed earnings. (2) Individual partners and foreign for-profit business partners are exempt from income tax on the stock earnings distributed by a limited partnership. 2. Benefit Analysis Before and After Applying Pass Through Taxation Method A domestic individual A, a domestic profit-making business B, and a foreign profit-making business C jointly form a venture capital limited partnership, One. The earnings distribution of the company One is 10%, 80% and 10% for A, B, and C partners, respectively. The calculated earnings of company One are one million (where eight hundred thousand are stock earnings, and two hundred thousand are non-stock earnings). How much income tax should be paid by the company One, and partners A, B, and C? (1) Pursuant to the Income Tax Act, before the amended draft: 1. One Venture Capital Limited Partnership Should pay Profit-Seeking Enterprise Income Tax = (NT$1,000,000 (earning) - NT$500,000[6])x12% (tax rate[7])=NT$60,000 2. Domestic Individual A Should file a comprehensive income report with business profit income =(NT$1,000,000-NT$60,000) x 10% (company One draft a voucher for net amount for A) + NT$60,000÷2×10% (deductible tax rate)= NT$97,000 Tax payable on profit earnings＝NT$91,500×5%(tax rate)＝NT$4,850 Actual income tax paid＝NT$4,850 - NT$60,000÷2×10% (deductible tax rate) ＝NT$1,485 3. Domestic For-Profit Business B Pursuant to the provisions of Article 42 of the Income Tax Act, the net dividend or net income received by a profit-seeking company is not included in the income tax calculation. 4. Foreign For-Profit Business C Tax paid at its earning source＝(NT$1,000,000 - NT$60,000) ×10% (earning distribution rate) ×20% (tax rate at earning source)＝NT$18,800 (2) Applying Pass Through Taxation Method After Enacting the Amendment 1. One Venture Capital Limited Partnership No income tax. 2. Domestic Individual A Should pay tax＝NT$800,000 (non-stock distributed earnings)×10% (earning distribution rate)×5% (comprehensive income tax rate)＝NT$1,000 3. Domestic For-Profit Business B Pursuant to the provisions of Article 42 of the Income Tax Act, the net dividend or net income received by a profit-seeking company is not included in the income tax calculation. 4. Foreign For-Profit Business C Tax paid at its earning source＝NT$800,000 (non-stock distributed earnings)×10%(earning distribution rate)×20% (tax rate at earning source)＝NT$4,000 The aforementioned example shows that under the situation, where the earning distribution is the same and tax rate for the same taxation subject is the same, the newly-established venture capital limited partnerships and their shareholders enjoy a more favorable tax benefit with the adoption of pass through taxation method: Before the Amendment After the Amendment Venture Capital Limited Partnership NT$60,000 Excluded in calculation Shareholders Domestic Individual NT$1,850 NT$1,000 Domestic For-Profit Business Excluded in calculation Excluded in calculation Foreign For-Profit Business NT$18,800 NT$4,000 Sub-total NT$80,650 NT$5,000 III. Conclusion Compared to the corporate taxation, the application of the pass through taxation method allows for a significant reduction in tax burden. While developing Taiwan’s pass through tax scheme, the government referenced corporate taxation under the U.S. Internal Revenue Code (IRC), where companies that meet the conditions of Chapter S can adopt the “pass through” method, that is, pass the earnings to the owner, with the income of shareholders being the objects of taxation;[8] and studied the "Transparenzprinzip" adopted by the German taxation board for partnership style for-profit businesses. Following these legislative examples, where profits are identified as belonging to organization members,[9] the government legislation includes the adoption of the pass through taxation scheme for venture capital limited partnerships in the amended draft of Article 23-1 of the Statute for Industrial Innovation, so that the legislation is up to international standards and norms, while making an important breakthrough in the current income tax system. This is truly worthy of praise. [1] The Legislative Yuan Gazette, Vol. 104, No. 51, page 325. URL:http://misq.ly.gov.tw/MISQ//IQuery/misq5000Action.action [2] A View on the Limited Partnership in Taiwan, Cross-Strait Law Review, No. 54, Liao, Da-Ying, Page 42. [3] Ministry of Economic Affairs - Limited Partnership Registration Information URL: http://gcis.nat.gov.tw/lmpub/lms/dir.jsp?showgcislocation=true&agencycode=allbf [4] Same as annotate 2, pages 51-52. [5] Reference Letter of Interpretation dated December 18, 2015, Tai-Cai-Shui Zi No. 10400636640, the Ministry of Finance [6] First half of Paragraph 1 of Article 8 of the Income Basic Tax Act [7] Second half of Paragraph 1 of Article 8 of the Income Basic Tax Act [8] A Study on the Limited Partnership Act, Master’s degree thesis, College of Law, Soochow University, Wu, Tsung-Yeh, pages 95-96. [9] Reference annotate 2, pages 52.
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%.
Innovative Practice of Israel's Government ProcurementInnovative Practice of Israel's Government Procurement Government procurement is an important pillar of government services. Because of the huge number of government purchases, government procurement management play an important role in promoting public sector efficiency and building citizenship. Well-designed government procurement systems also help to achieve policy such as environmental protection, innovation, start-ups and the development of small and medium-sized enterprises. Nowadays, countries in the world, especially OECD countries, have been widely practiced with innovative procurement to stimulate innovation and start-ups, and call Innovation procurement can deliver solutions to challenges of public interest and ICTs can play a major role in this. However, in the OECD countries, in addition to the advanced countries that have been developed, many developing countries have also used government procurement to stimulate national R & D and innovation with remarkable results. Israel is one of the world's leading technology innovation centers, one of the most innovative economies in the world, continues to leverage its own strengths, support of technology entrepreneurship and unique environment, an international reputation in the high-tech industry, the spirit of technological innovation and novelty. Government procurement is a core element of the activities of Israeli government, agreement with suppliers and compliance with the Mandatory Tenders Law. The main challenge is how to ensure efficiency and maintain government performance while ensuring an equitable and transparent procurement process. Israel’s Mandatory Tenders Law has shown the central role played by the Israeli Supreme Court in creating and developing this law, even in the absence of any procurement legislation, based instead on general principles of administrative law. Once the project of creating a detailed body of public tendering law had been completed, and the legislator was about to step in, the Supreme Court was prepared to step out and transferring the jurisdiction to lower courts. The Knesset passed the Mandatory Tenders Law, and based on it the Government issued the various tendering regulations. Besides, Israel's various international agreements on government procurement, mainly GPA and other bilateral international agreements such as free trade agreements with Mexico and Colombia and free trade agreements and memoranda of understanding with the United States. The practical significance of these commitments can only be understood on the backdrop of Israel’s domestic preference and offset policies. These policies were therefore discussed and analyzed as they apply when none of the international agreements applies. The Challenge Tenders "How to solve the problem of overcrowding in the emergency department and the internal medicine department?" is the first of a series of "problem solicitations" released by the Israeli Ministry of Health which seeks to find a digital solution to the public health system problem, questions from the government while avoiding preconceived prejudices affect the nature of the solution, allowing multiple innovative ideas from different fields to enter the health system, make fair and transparent judgments about the ideal solution to the problem. In order to ensure transparency and integrity, equality, efficiency and competition in the decision-making process, the tender proposed by the Israeli Ministry of Health defines a two-stage tender process. The Ministry of Health of Israel, in order to improve the quality of medical care, shorten the waiting time for hospitalized patients, protect the dignity of patients and their families with patients as its center, and ensure their rights, while alleviating the burden of hospital staff, so as to pass the targeted treatment areas reduce the gap between various residential areas. The Israeli government deals with these issues through challenging tenders and offers a digital solution combined with innovative ideas. The initiative proposed through the development of public service projects can raise the level of public services in the country and help the government to reduce costs and achieve the purpose of promoting innovation with limited conceptual, technical and financial capabilities. In addition, due to the online operation of the challenging tender process throughout the entire process, fair and transparent procedures can be ensured, while public-private partnerships are encouraged to facilitate the implementation of the implementation plan.
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