Laws and Regulations Retrieving System of Ministry of National Defense, R.O.C.

These Regulations are duly enacted in accordance with Article 11, Paragraph 2 of the Act (Hereinafter referred to as the Act) for Statute Governing Reconstruction of Old Military Dependents' Villages.

The terms used in these Regulations are defined as follows:
Subparagraph (1) Professional consultants: The professional organizations as an architect office, professional engineer office, Attorney-at-Law office, CPA office, financial consultation company, construction management company, technological consultation services or other professional organization accredited by the competent authority of the government.
Subparagraph (2) Land in disposal: The land taken as the target of disposal for innovation under the Act, the building lot of innovation area less the remaining land for construction of buildings or land vacated after relocation of a living quarter.
Subparagraph (3) Construction of living communities: The living communities built by the competent authority of the government in accordance with the Act.
Subparagraph (4) Total project price: The expenses necessitated by the living communities built by the competent authority of the government in accordance with the Act. The detailed items shall be pursuant to the items promulgated by the competent authority during invitation phase, in the Instructions to Tenderers and the public announcement of tender invitation.

For encouragement to private sector to participate and to invest in buildings innovated from Old quarters for military dependents, the competent authority may retain the professional consultants to carry out the following tasks:
Subparagraph (1) Re-survey of land and buildings concerned and survey of the superficies.
Subparagraph (2) Application on behalf for land zoning classification in urban planning and reclassification of land zoning classification beyond the urban planning areas
Subparagraph (3) Swap, division, consolidation of land concerned.
Subparagraph (4) Application on behalf for transfer of ownership of the land in disposal.
Subparagraph (5) Draw-up of plans for tender invitation.
Subparagraph (6) Preparation for tender and contract execution for encouragement to private sector for participation and investment.
Subparagraph (7) Construction and management of the living communities built.
Subparagraph (8) Other supporting acts as required under the Regulations.

For encouragement to private sector to participate and to invest in buildings innovated from Old quarters, investors may be solicited in an open manner in any of the following single manner or manners in combination:
Subparagraph (1) In-package: The competent authority invite investors through open tenders for the land in disposal and the living communities to be built. The Successful Tenderer shall take the responsibility to build the living communities and will obtain the ownership of the land in disposal in the package after handing the living communities to the competent authority. The Successful Tenderer shall pay the competent authority the land disposal fee at 0.7% of the tender price of the land in disposal.
Subparagraph (2) In-cooperation: The competent authority provides land and the investor shall take the responsibility to build the living communities. After the construction is completed, the investor obtains part of the ownership over the building and the building lot based on the tender regulations and the attribute of the project.
Subparagraph (3) In-contracting: The competent authority invites contractor to do the planning, design, construction, maintenance and management of the project, either in whole or in part, through open tender based on the attributes of the Project of the living communities to be built, the requirements for efficiency and quality.
Subparagraph (4) Other manners which the competent authority considers conducive to the construction of the living communities.

To live up to the tenor of encouragement to private sector to invest, the competent authority may, when soliciting investors through an open tender for construction in-package, may select the building lots in any of the following manners:
Subparagraph (1) Select the land in disposal at the value roughly equivalent to the total project price for the construction of living communities and invite the investor in one package.
Subparagraph (2) The land in disposal in package and the living communities to be built may be located in different municipalities, counties (cities), and may be in different areas of development potential.

In the manner in package, the upset price of the tender is equivalent to the balance of the total price of the land in disposal less total price for construction of the living communities.
The total price of the land in disposal in the aforementioned handling manner in package shall be duly determined in accordance with the Operating Guidelines for Appraisal and Sales through Open Tender of National Realty Consigned to the National Property Bureau, Ministry of Finance by the Ministry of National Defense as enacted and promulgated by the competent authority.
The total price of the living communities built in-package under Paragraph I shall not exceed the maximum ceiling set forth in the budget of the unit of the Fund of the Buildings Innovated from Old Quarters for Military Dependents (Hereinafter referred to as the Innovation Fund).

The matters to coordinate with the Co., Ltd. Of living communities may be provided as the prerequisites in the tender invitation provided through an open tender. The estimated amount may be counted into the total project price and shall be provided by the tenderer (investor).

The tenderers as the will-be investors shall live up to the following qualification requirements, or other qualification requirements specifically set forth in other laws, if any:
Subparagraph (1) In case of the tender bidden by a tenderer in-package, in-cooperation, in-contracting, the qualification requirements shall be:
Item (1) In case of the tender bidden by a tenderer in-package, in-cooperation: The tenderers must be an accredited company for construction and house sale (rent) and must be a Class A construction company. In case of the tender bidden by a tenderer in-contracting: The tenderers must be a construction business and be a Class A construction company.
Item (2) Other qualifications: All subject to the Guidelines for the Executive Yuan (the Cabinet) and Organizations thereunder in Tender Invitation, Government Procurement Law and other laws and regulations concerned.
Subparagraph (2) Where in other manners: The competent authority shall, upon tender invitation, provide the qualification requirements for investors in the Instructions to Tenderers or public announcement in tender invitation.
The supporting certificates and qualification requirements set forth in the preceding paragraph shall be subject to the updates as promulgated by the competent authority during invitation phase, in the Instructions to Tenderers and the public announcement of tender invitation

The competent authority shall review the will-be investors in three phases, i.e., qualification tender review in Phase I, technology tender review in Phase II and price tender review in Phase III, in the following manners:
Subparagraph (1) Qualifications tender: The investors shall live up to the qualification requirements set forth in the preceding article.
Subparagraph (2) Technology tender: The competent authority shall judge the investors in the aspects of their competence in construction, soundness in organization, financial standing and analyze into the construction costs and shall pick up a minimum of three will-be investors to enter the price tender.
Subparagraph (3) Price tender: The amounts bidden by the investors shall be higher (lower) than the upset tender price. The investor who offers the highest (or lowest) amount or who proves to be maximum in favor of the competent authority will be awarded the right to go into the contract.
The contents and items of reviews as set forth in Subparagraph II of the preceding paragraph shall be subject to the items as promulgated by the competent authority during invitation phase, in the Instructions to Tenderers and the public announcement of tender invitation.

The upset price set forth in Paragraph I, Subparagraph III of the preceding article may be in either positive or negative value. In case of a positive value, it shall be paid by the Successful Tenderer and entered as the revenue of the Special Budget of the Buildings Innovated From Old Quarters (Hereinafter referred to as Special Budget). In case of a negative value, the sum shall be taken from the Innovation Fund to make good the tender amount to the investor.

In case of a need in overall planning for the land to build the living communities, the competent authority may, for such land, authorize the Successful Tenderer either before the tender or in the invitation documents to sell, purchase, swap or consolidate with the neighboring plot(s) or proceed with the development in concert with the neighboring plot(s).

The competent authority may, prior to tender invitation, consign the professional consultant(s) for planning and design of the living communities and for application for and acquirement of the construction licenses. Or the Successful Tenderer shall complete the planning, design and obtain the construction license within the specified time limit after execution of the contract.
The planning and design mentioned in the preceding paragraph shall live up to the Living Communities Planning & Design Principles promulgated by the competent authority and the de factor requirements of the subject case.
For living communities as mentioned in Paragraph I for which the construction license(s) is (are) obtained by the competent authority, the investor may, at the same time upon submitting the tender, offer technological process which could economize costs, cut short construction period or boost efficiency, or may offer a substitute; provided, that such process or substitute shall not reduce the floor space, height of the construction, and shall not go contrary to the Living Communities Planning & Design Principles and laws and regulations concerned in construction.
In the event that the process or substitute mentioned in the preceding paragraph requires a change in the design, the costs so incurred by the change in the design shall be solely borne by the investor.

In case of a change in design as mentioned in Paragraph III of the preceding article, the Successful Tenderer may request a postponement of the time to start up construction, provided, that the total number of days of the postponement shall not exceed a half of total construction period reduced as proposed in the phase of technology tender.

After award of the tender, the competent authority may hand over the land-in-disposal on the "as it is" basis into the Successful Tenderer's custody. The Successful Tenderer shall, nevertheless, not use such land without authority unless consented by the competent authority.
In the in-package manner, the Successful Tenderer shall not proceed with the ownership transfer registration for the land in disposal until the construction of the living communities is completed and satisfactorily accepted. To meet the need for bank loan as required for the project, nevertheless, the Successful Tenderer may, after official commencement of the construction of the living communities and after obtaining the Letter of Guarantee from bank for performance bond, request ownership transfer registration ahead of schedule for the land in disposal awarded in the tender. At the same time when the competent authority transfers the land ownership to the Successful Tenderer, the Successful Tenderer shall complete mortgage procedures with the bank and obtain loan in line with the construction progress. The loaning bank shall set an earmarked account and appropriate the loan only into the earmarked account. The loan shall not be used beyond the project.
The Letter of Guarantee of the bank for performance bond mentioned in the preceding paragraph shall be calculated based on the amount of the total project price less the portion having been completed, plus 50% extra.
After the ownership for the land in disposal in the in-package mode is transferred, the Successful Tenderer shall solely take charge of the development, planning, construction, leasehold, sales unless otherwise set forth in the tender invitation or provided by the competent authority.

The amount for construction of the living communities under these Regulations and the proceeds from the land disposal shall be duly handled in accordance with Articles 8, 9, 13 and 14 of the Act.
Except in the in-contracting mode, the input, output budget and accounting affairs as mentioned in the preceding paragraph shall be handled in both accounting entry & makeup accounting and account transfer without appropriation. The operating guidelines for the account handling shall be enacted by the competent authority.

For the loan as required for the construction of the living communities under the renovation project, the Successful Tenderer may, subject to review and consent from the competent authority, apply for mid-term/long-term fund loans through the Council of Economic Planning & Development (CEPD), Executive Yuan (the Cabinet).

A dispute between the competent authority and the Successful Tenderer on investment and construction of the living communities under these Regulations, if any, shall be referred to arbitration in accordance with the Arbitration Law.

The Regulations will be put into practice from the promulgation date.