Procurement Risk:
Moderate
Score:
58/100
Government Policy
Q57
75/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This indicator is not assigned a score in the GDI. Taiwan’s legal framework of government procurement falls under the umbrella of the “Government Procurement…
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Risks of corruption and bribery are generally regulated by the legal framework of the “Government Procurement Act”, “Enforcement Rules of the Government Procurement Act”,…
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There were 28,721 defence procurement cases from 2016 to 2019. Those cases were all implemented under the “Government Procurement Act” and sub-laws. [1, 2,…
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Q58
83/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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By design, Taiwan’s defence procurement cycle follows the logic of the “Planning, Programming, Budgeting and Execution (PPBE) Process” [1]. In theory, the defence procurement…
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Detailed policies and procedures for each step of the implementation process of the procurement cycle are illustrated in the roadmap of the Ten-year Military…
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Detailed policies and procedures for each step of the implementation process of the procurement cycle are illustrated in the roadmap of the Ten-year Military…
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Q59
58/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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The five external and internal defence procurement oversight mechanisms are stated as following: (1) National Audit Office: NAO audits defence procurement by Article 109…
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Procurement oversight mechanisms are active. They include demanding documents and explanations, issuing recommendations or and conclusions that are being followed or implemented. In some…
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Evidence of activity of external overseeing is generally public. The procurement supervision statements of LY and Control Yuan are published on their website. For…
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Forward planning for potential purchases is discussed during the process of policy design and strategy formulation through the roadmap of Ten-year Military Build Concept…
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There may be some information on forward purchase plans for the next few years disclosed in the National Defence Report; however, discussion tends to…
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In general, defence procurements are made public; however, there are still specific defence purchases that are classified. Certain procurement programmes that are kept in…
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Specific procurement programmes kept secret are protected by the “The Classified National Security Information Protection Act” and the “The Enforcement Rules of the Classified…
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Capability Gap and Requirements Definition
Q62
50/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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The defence industry in Taiwan is expected to carry out several tasks, ranging from the creation of job opportunities to building domestic deterrence capacity…
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The implementation of integrity measures within bids for working for the Ministry of National Defence is strictly regulated by the “National Defence Industry Development…
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Q63
58/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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Taiwan’s procurement requirements are derived from a national defence policy military strategy [1]. There is logical flow down from strategy to individual procurements. It…
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Whether or not procurements are aligned with national security strategy is under the authority of the Ministry of National Defence [1]. Legislators exercise powers…
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Generally speaking, Taiwan’s armament procurements are based on clearly identified requirements derived from national defence policy and military strategy [1, 2, 3]. However, there…
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Tender Solicitation, Assessment and Contract Award
Q64
25/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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For decades, most defence procurements from Taiwan’s indigenous defence industries have been supplied by government-affiliated organisations such as the National Chung-Shan Institute of Science…
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The MND has administrative powers to question the single/sole/restricted competition procedure used to make selections and purchases, and occasionally does so. In the mean…
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Q65
69/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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Mechanisms for “Conflicts of interest” are covered by laws and acts of the “Government Procurement Act” and the “Enforcement Rules of the Government Procurement…
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There is an audit trail of which officials are involved in selecting suppliers and designing tender specification. Audit trails for officials from the Ministry…
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Tender board regulations of conduct are fully transparent. The public can access relevant information from the internet. Regulations and codes of conduct for tender…
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External verifications by the LY or CY to examine tender specifications are regulated by the “Government Procurement Act”, “Audit Act”, and “Regulations for Coverage…
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Q66
81/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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The legal framework for counter-measures against collusion between bidders can be found in the “Government Procurement Act”, “Enforcement Rules of the Government Procurement Act”,…
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Clear legislation and implementing guidelines within the “Government Procurement Act” and “Anti-corruption Act” empower procurement officials to exclude companies and senior company officials where…
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Cases are investigated or prosecuted through formal processes and without third-party interference in accordance with the “Anti-corruption Act”, “Government Procurement Act”, and the “Audit…
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General training for procurement officials is required by the “Enforcement Rules of the Government Procurement Act”[1]. Ethics, integrity and pricurement malpractices form part of…
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Contract Delivery and In-Service Support
Q67
69/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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Formal policies and procedures that outline how to monitor, assess and report upon a supplier’s service and or delivery obligations are well defined by…
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All government procurement contracts are supervised and regulated by the Public Construction Commission (PCC). All information from the notice of open tender, tendering process,…
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Chapter V of “Government Procurement Act” sets the legal framework and obligations for inspection and acceptance of contracted works, products and services. Inspection and…
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Breaches of contract are acted upon in accordance with the “Government Procurement Act” and the “Audit Act” [1, 2, 3]. Issues are either dealt…
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Q68
83/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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Complaint mechanisms within judicial processes are in place and are accounted for in the “Government Procurement Act” [1]. In addition, the “Complaint Review Board”…
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With the regulations and directions of the “Regulations Governing the Complaint Review for Government Procurement”, “Regulations Governing Fees for the Mediation for Dispute Regarding…
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Regular surveys of tenders’ complaints are conducted as a mechanism for counter-corruption measures to ensure companies making complaints will be treated in an unbiased…
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The “Government Procurement Act” has clear regulations to expel suppliers with records of wrongdoing or of undertaking bad practices from further bidding processes [1].…
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Once a case concerning wrongdoing enters the formal judicial process, it will follow formal processes without undue political influence, since any attempts of political…
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Sanctions set out in the “Government Procurement Act” and the “Anti-corruption Act”, include expulsion from further government procurement, fine, or imprisonment [1, 2, 3,…
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Offset Contracts
Q70
25/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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Offset programmes derived from industrial cooperation of defence procurements are permitted by laws and guided by the “Ministry of National Defence’s Guidelines on Industrial…
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Offset programmes derived from industrial cooperation of defence procurements are guided by the “Ministry of National Defense’s Guidelines on Industrial Cooperation” which do not…
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Some formal policies and procedures that outline reporting and delivery obligations for offset contracts are provided in the “Ministry of National Defense’s Guidelines on…
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The Ministry of Economic Affairs reveals the progress of offset programmes annually; the latest report available to the public was published on December 26,…
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CY points out that monitoring mechanisms are needed since several flaws in Taiwan’s offset programmes (including unprofessional coordination, insufficient monitoring, and incoherent execution) have…
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There is not enough evidence to score this indicator. Experts have criticised the enforcement of implementing offset programmes in Taiwan; according to rough estimates…
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Prospects of offset are open to the public and local industries in the “List of Prospective Items for Offset” for competition [1]. Due to…
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Agents / Brokers
Q73
0/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
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There are no government regulations for using agents or intermediaries for defence and security procurements [1, 2, 3]. The government of Taiwan imposes no…
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There is no government regulation for using agents or intermediaries in defence and security procurement. As such, this indicator is marked ‘Not Applicable’. The…
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Financing Package
Q74
50/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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Currently, there are two mechanisms through which Taiwan can acquire armaments from foreign countries (especially the US): foreign military sales (FMS), and direct commercial…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This indicator is not assigned a score in the GDI. Due to Taiwan’s unique “status quo”, the US is Taiwan’s major armament supplier. The…
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This indicator is not assigned a score in the GDI. For example, M1A2 Abram tanks have been on Taiwan’s wish list since 2000 in…
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This indicator is not assigned a score in the GDI. Experts across the Pacific have speculated over the real reasons behind this unexpected change…
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