(Issued on March 28, 2012 in accordance with Decree No. 69 of the People’s Government of Guangzhou Municipality, amended for the first time on September 30, 2015 in accordance with Decree No. 132 of the People’s Government of Guangzhou Municipality, amended for the second time on November 14, 2019 in accordance with Decree No. 168 of the People’s Government of Guangzhou Municipality and amended for the third time on April 19, 2023 in accordance with Decree No. 199 of the People’s Government of Guangzhou Municipality)

　　Chapter I     General Provisions

　　Article 1     These Rules are formulated in accordance with the Civil Code of the People’s Republic of China and other relevant laws and regulations, on the basis of the actual conditions of this Municipality and with a view to regulating the management of government contracts, preventing contract risks and reducing disputes, ensuring the safety of state-owned assets and financial funds and the effective use of natural resources and public resources.

　　Article 2     The term “government contracts” herein refers to the agreements in relation to the use of state-owned assets and financial funds as well as natural/public resources concluded by the municipal people’s government and the government sectors thereof as a party during administrative management, public services and civil economic activities, including the following types:

　　(1) Contracts on such state-owned assets (including intangible assets) as urban infrastructures, including the investment, construction, lease, contracting, trusteeship, rent, trading, guarantee, property management, etc.;

　　(2) Contracts on law-based transfer, assignment, lease and contracting of the right to use state-owned natural resources, such as land, forests, wastelands, water currents, sea areas, tidal flats, mineral deposits, etc.;

　　(3) Contracts on administrative expropriation, requisition and entrustment;

　　(4) Contracts on loans, subsidies, allowances, etc.;

　　(5) Franchise contracts for urban public utilities;

　　(6) Contracts on attracting investment;

　　(7) Other government contracts.

　　Article 3     These Rules are applicable to the activities of the municipal people’s government and the government sectors thereof to conclude, perform and manage government contracts.

　　These Rules shall not apply to any government contract concluded for taking measures in response to emergencies.

　　Article 4     Each municipal government sector shall, according to these Rules and on the basis of its own actual conditions, formulate the contract management system by itself, and strengthen the contract conclusion and performance management by itself and its subordinate institutions.

　　Any contract in relation to the use of state-owned assets and financial funds as well as natural/public resources with the contract amount of more than RMB 100 million yuan (included) concluded by a subordinate institution of any municipal government sector as one party shall be reported to the municipal government sector for review.

　　Article 5     The conclusion and performance of government contracts shall follow the principles of law compliance, prudence, fairness and good faith, and shall ensure the safety of state-owned assets and financial funds and the effective utilization of natural and public resources.

　　The management of government contracts shall follow the principles of taking the advance legal risk prevention and in-process legal risk control as the major tasks and ex-post legal supervision and remediation as the minor tasks.

　　Article 6     The municipal judicial authority is responsible for supervising and guiding the contract concluded by the municipal people’s government, and organizing the implementation of these Rules.

　　The municipal judicial authority shall participate in the whole process of negotiation, drafting, review, execution and performance of government contracts by the municipal people’s government as a party.

　　Article 7     The municipal people’s government and the government sectors thereof shall not commit any of the following acts when concluding any government contract:

　　(1) Entering into the contract in violation of legal procedures and legal conditions;

　　(2) Entering into the contract by a temporary agency and the internal agency as a party;

　　(3) Acting as a contract guarantor in violation of laws and regulations;

　　(4) Making commitments to the unlawful demands made by the other party to the contract or by a third party;

　　(5) There is any other content of the contract that violates laws, regulations or rules or damages the interests of the State, the collective or a third party.

　　Chapter II   Standard Formats for Contracts

　　Article 8     When drafting a government contract, the standard contract format shall be adopted with priority. Where the State or the Province has not formulated any standard format, the municipal people’s government and the government sectors thereof may organize the formulation of the standard format.

　　Article 9     The formulation of standard formats for the contracts concluded by the municipal people’s government shall be led by the municipal judicial authority. The formulation of standard formats for the contracts concluded by government sectors shall be organized by the corresponding government sectors; if two or more government sectors are involved, the standard format may be jointly formulated by both/all of them.

　　Article 10  The formulation of standard formats shall strictly abide by the provisions of relevant laws and regulations, follow the principles of preventing legal risks in contracts, ensuring the safety of state-owned assets and financial funds and the effective use of natural resources and public resources.

　　Article 11    The format of any contract concluded by a government sector shall be reported to the municipal judicial authority for review, and shall not be used unless reviewed by the municipal judicial authority.

　　The submission of the format of any contract concluded by a government sector for review shall be accompanied by the drafting instructions and background information for the formulation of the standard format.

　　Article 12   The municipal judicial authority shall review the standard format of any contract concluded by a government sector with a focus on the following contents:

　　(1) Whether the content of the standard format will bring in legal risks and adverse impact on the safety of state-owned assets and financial funds and the effective use of natural resources and public resources;

　　(2) Whether the content of the standard format is complete and exhaustive, and conforms to the provisions of Article 470 of the Civil Code of the People’s Republic of China;

　　(3) Whether the wording of the standard format is accurate and rigorous;

　　(4) Whether the standard format has normative stipulations on the method for dispute resolution;

　　(5) Whether there is any other illegal content in the standard format.

　　Article 13   The formulation and review of a standard format of any government contract may be based on the opinions of the public and social organizations if necessary, so as to ensure the fairness and reasonableness of contract terms and conditions.

　　Experts, scholars and professional institutions may be entrusted or invited to participate in the formulation and review of the standard format of any government contract involving professional and technical fields.

　　Chapter III  Negotiation and Drafting of Contracts

　　Article 14   The municipal people’s government and the government sector thereof shall determine the counterparty to a government contract in accordance with the procedures and conditions prescribed by laws and regulations.

　　The determination on the counterparty to a government contract by means of government procurement or bidding, shall strictly follow the provisions of the Government Procurement Law of the People’s Republic of China, the Bidding Law of the People’s Republic of China and other relevant laws and regulations.

　　Article 15   A government contract shall be drafted by a municipal government sector. During the drafting of a government contract, all parties to the contract shall conduct full consultations. If a standard format is available, full consultations shall be conducted on the basis of the standard format.

　　Article 16   During the negotiation and drafting of a government contract, the municipal government sector shall conduct a preliminary analysis of the risks in the legal, economic, technological and social stability aspects of the contract, and may conduct risk demonstration when necessary. If it involves major and difficult problems or relatively high risks, relevant experts may be invited to participate in the demonstration.

　　Article 17   During the negotiation and drafting of a government contract, the municipal government sector shall have a good master of the assets, credit and performance capabilities of the counterparty to the contract, and may conduct credit investigations when necessary. If it involves major and difficult problems or relatively high risks, the investigation may be entrusted to a professional institution.

　　Chapter IV  Legality Review

　　Article 18   Legality review shall be conducted before the signing of a government contract. Without undergoing/passing the legality review, neither the municipal people’s government nor any government sector thereof shall enter into a government contract.

　　The costs arising from the legality review of government contracts are included into the government sector’s annual budget.

　　Article 19   The legality review of contracts concluded by the municipal people’s government as a party shall be undertaken by the municipal judicial authority. For contracts concluded with any municipal government sector as a party, its internal legal department or audit department shall be responsible for the legality review.

　　If a contract concluded with any municipal government sector as a party falls under the circumstances specified in Article 22 herein, it shall be reported to the municipal judicial authority for examination after the government sector’s legality review.

　　During the legality review, a professional legal service agency may be entrusted to provide related advices.

　　Article 20   The legality review mainly includes:

　　(1) Whether the content of the contract will bring in legal risks and adverse impact on the safety of state-owned assets and financial funds and the effective use of natural and public resources;

　　(2) Whether the subject of the contract is eligible and proper;

　　(3) Whether the statutory procedures for the conclusion of the contract is conformed to;

　　(4) Whether the terms and conditions of the contract are complete and valid;

　　(5) Whether the provisions of Article 7 herein are violated.

　　For any government contract that adopts the standard format formulated by the relevant national, provincial or municipal government sector without any modification or adjustment of the main clauses, the legality review will focus on whether the contract subject is eligible and proper and whether the conclusion procedures conform to statutory procedures.

　　Article 21   In order to ensure the quality of contract review and prevent legal risks of government contracts, the submitter shall reserve a period of not less than 5 working days for legality review.

　　Article 22   Any of the following contracts concluded by any municipal government sector as one party shall be submitted to the municipal judicial authority for review before signing the contract:

　　(1) The contract with the contract amount exceeding RMB 100 million yuan (included);

　　(2) The contract with the contract amount of less than RMB 100 million yuan involving matters that are relatively complex and of relatively high legal risks, which is thus deemed by the municipal people’s government as a contract subject to review by the municipal judicial authority.

　　The provisions of the preceding paragraph shall not apply to the government contracts that adopt the standard formats formulated by the relevant national, provincial or municipal government sectors without any modification or adjustment of the main clauses.

　　Article 23   When submitting a government contract to the municipal judicial authority for review, the municipal government sector shall submit the following documents as well:

　　(1) A request for review;

　　(2) The text of the contract;

　　(3) Descriptions and background information related to the contract, including the drafting process, the information on risk demonstration, the credit investigation of the counterparty to the contract, and the issues that need to be highlighted;

　　(4) The review comments of the internal legal department or audit department;

　　(5) Other documents deemed necessary by the municipal judicial authority.

　　Where the documents submitted do not conform to the above provisions, the municipal judicial authority may request the submitter to supplement relevant documents within a specified time limit; if it fails to make the supplements within the specified time limit, the municipal judicial authority may return the documents to the submitter.

　　Article 24   The municipal judicial authority shall complete the review of the government contract submitted by the municipal government sector within 10 working days from the date of receiving all the documents submitted, and inform in writing the submitter of the review comments.

　　Article 25   After the legality review by the municipal judicial authority, if the municipal government sector and the counterparty to the contract make substantial changes to the content of the contract in the negotiation process, the changed content shall be sent to the municipal judicial authority for re-review.

　　Article 26   The review comments from the legality review authority are only for the internal use of government sectors. Neither the municipal government sectors nor the relevant insiders shall disclose such contents.

　　Chapter V   Signing and Performance of Contracts

　　Article 27   The municipal government sector shall revise the draft contract according to the legality review opinions to form the official text of the contract.

　　The official text of the contract shall be signed by the legal representative of the municipal people’s government and any government sector thereof or the person in charge authorized by the legal representative, and affixed with the administrative official seal or the special contract seal.

　　Where the contract shall be reported to relevant authorities for approval and registration as stipulated by the laws, regulations and rules, the municipal people’s government and the government sector thereof shall handle it in accordance with legal procedures.

　　Article 28   After the government contract specified in Article 22 herein has been formally signed by all parties to the contract, the municipal government sector shall send a copy of the official text of the contract to the municipal judicial authority within 7 working days.

　　Article 29   In the event of any of the following situations, the competent municipal government sector bearing the performance responsibility shall claim its rights timely, and take measures to prevent and respond to the occurrence of contract risks:

　　(1) The occurrence of force majeure that may affect the normal performance of the contract;

　　(2) The modification or repeal of laws, regulations and rules on which the contract is based that may affect the normal performance of the contract;

　　(3) The objective circumstances at the time of the conclusion of the contract have undergone major changes, which may affect the normal performance of the contract;

　　(4) The financial condition of the counterparty to the contract deteriorates, resulting in the counterparty’s incapability or possible incapability to perform the contract;

　　(5) The counterparty to the contract conducts the anticipatory breach of the contract;

　　(6) Other situations with potential contract risks.

　　Where any of the above situations occur during the performance of a government contract concluded by the municipal people’s government as a party or a government contract specified in Article 22 herein, the competent municipal government sector bearing the performance responsibility shall timely submit an early warning report to the municipal people’s government, with a copy to the municipal judicial authority.

　　Article 30   For any dispute arising during the performance of a government contract, the municipal government sector bearing the performance responsibility shall deal with it timely.

　　Where a major dispute arises during the performance of a government contract concluded by the municipal people’s government as a party, the municipal government sector bearing the performance responsibility shall collect evidential documents timely, and submit a resolution plan to the municipal people’s government for approval before its implementation.

　　The municipal judicial authority shall participate in the coordination and settlement of disputes over any government contract concluded by the municipal people’s government as a party.

　　Article 31   In the case of a dispute over a government contract, consultation and mediation shall be adopted at first to resolve it. If a consensus is reached through negotiation or mediation, a written agreement shall be signed.

　　If a consensus cannot be reached after negotiation or mediation, the municipal government sector bearing the performance responsibility shall timely initiate an arbitration or litigation, comprehensively collect evidence in accordance with the requirements of the limitation of action and the arbitration and litigation rules, and make well preparations to prevent the risk of losing the lawsuit due to improper responding. When necessary, external lawyers may be hired or the municipal judicial authority may be entrusted to handle it.

　　Article 32   For a government contract concluded by the municipal people’s government as a party, in the dispute resolution process, the municipal government sector shall not waiver the legal rights and interests enjoyed by the municipal people’s government without the consent of the municipal people’s government.

　　For a government contract concluded by the municipal government sector as a party, in the dispute resolution process, no institution or individual may waiver the legal rights and interests enjoyed by the municipal government sector without the consent of the legal representative of the municipal government sector.

　　Article 33   When it is necessary to conclude a supplementary contract or to change/cancel the contract after the conclusion of a government contract or in the course of its performance, the municipal government sector shall go through in accordance with the procedures for contract conclusion stipulated in these Rules.

　　Article 34   The following archival documents obtained during the conclusion and performance of government contracts shall be numbered, registered and filed by the municipal government sector timely:

　　(1) The official text of the contract and the supplementary contract;

　　(2) Investigation documents on the assets, credit, performance capacity and other profiles of the counterparty to the contract;

　　(3) Documents on contract negotiation and consultation;

　　(4) The basis and approval documents for the conclusion of the contract;

　　(5) Legality review opinions;

　　(6) Court judgment documents, arbitration institution’s awards, and mediation agreements;

　　(7) Other documents that need to be filed for record.

　　General government contract files shall be kept for more than 10 years after the expiration of the contract term, while the government contract files stipulated in Article 22 herein shall be kept permanently from the date of conclusion.

　　Chapter VI  Legal Liability

　　Article 35   Where the relevant authority or its staff member, in violation of these Rules, commits any of the following acts, the competent authority shall order it/him/her to make corrections and impose sanctions on the person-in-charge and other persons directly responsible; if a crime is constituted, criminal liabilities shall be investigated and affixed according to law:

　　(1) Failing to submit the contract standard format newly drafted to the municipal judicial authority for review;

　　(2) Signing a government contract without the legality review or failing to pass the review;

　　(3) Committing maliciouscollusion with others and damaging the lawful rights and interests of the municipal people’s government and the government sectors thereof in the process of contract conclusion, review and performance;

　　(4) Neglecting duties, abusing power or accepting bribes in the process of contract conclusion, review and performance;

　　(5) Entering into a government contract in violation of the prohibitive provisions of Article 7 herein;

　　(6) Failing to keep secrets confidential as required;

　　(7) Waiving the lawful rights and interests enjoyed by the municipal people’s government and the government sectors thereof without authorization;

　　(8) Failing to safekeep government contract documents and archival documents.

　　Article 36   Where the legality review authority or its staff member is guilty of gross negligence during legality review, thereby causing relatively great economic losses, the competent authority shall order it/him/her to make corrections and impose sanctions on the person-in-charge and other persons directly responsible; if a crime is constituted, criminal liabilities shall be investigated and affixed according to law.

　　Chapter VII Supplementary Provisions

　　Article 37   The agencies (including non-standing agencies) of the municipal people’s government as well as the district governments and the government sectors thereof shall refer to these Rules when entering into government contracts.

　　Article 38   These Rules shall come into force on July 1, 2012.