The Root Of The Problem Of The Construction Of Public Works Projects In The Bidding Market, A Number Of Government Failure To Explore And Countermeasures

Bidding system is the product of a market economy. More than 200 years ago, it was originated in the United Kingdom. After a long application in the market economy of developed countries, It reflects a fair, just, open, merit-based competition and to curb corruption, and is proved to be an effective market mechanism of contracting of construction project, especially investment projects of public funds. Therefore, bidding system is widely applied in the international arena, and so far has developed a comprehensive set of mechanisms and theories. Many countries and international agencies have formulated their own methods and mechanisms of project bidding, which greatly facilitated the construction market and the construction industry's healthy development.After China's reform and opening up, bidding system was introduced in the early 80s and began to be promoted in the 90s. The system quickly demonstrated a strong advantage. In the late 90s, contracting of public funds investment project basically has adopted bidding. However, the project bidding system, at this time, is still implemented in a planned economy, far from the system with international practice and playing its role.With the "Bidding Law" (1999), "Government Procurement Law" (2002) introduced, public project bidding system has become a requirement of the mandatory legal level. These two laws adopted in a large number of international practice and principle. These laws and many administrative regulations, departmental rules and regulations, local laws and regulations, which were issued soon, has formed a set of detailed and strict system of laws and regulations to regulate every link of the bidding activities detailly. After 2003, China, in terms of legal system in form, has basic integration with international practice.It should be said to be a great step forward that the new bidding system, with international standards is carried out, and its meaning can be no less than the initial introduction of bidding system. This has led to good results, mainly reflecting in that: it makes a significant saving of public funds, ensures that bidding of public investment project are in a fair, just and open, and great holds back corruption in the contracting links of public funds investment projects. However, with the passage of time, there also are new problems that:the phenomenon of Affiliated, bid-rigging and illegal subcontracting become increasingly rampant; Although the governments from the central to local repeatedly demand and strike these, it takes no effect; while the principles of international practice, such as the lowest bid winning which reflects the merit-based selection in the new bidding system, are against strongly by government owners of public works and construction industry, it becomes more and more difficult to carry out these. These phenomena cause that:merit-based competition function, efficiency and economy of the project bidding system in the role are seriously reduced; Although it has put international bidding system into practice in the form in china, it is still unable to give full play to its advantages and the effect is far less than which it is in the economy market of developed countries.In this paper, it conducts in-depth study of public project bidding activity problems, which are a big hazard and closely interrelate with phenomena of Government Failure, such as affiliated, bid-rigging, illegal subcontracting. Through making a case study of Wenzhou's ordinary public works construction project bidding activity and the market its regulatory practice by the empirical analysis and comparative analysis methods, it points out that the main root of the above problems lies in that:the current unreasonable entry qualification management system of the construction industry, the shortcomings of the market regulatory mechanism in force and other factors. And referring to the traditional incentive theory, principal-agent theory, it proposes a new, integrated legal, economic and psychosocial, improvement program, which is systematically about bidding market regulatory mechanism and industry entry management mechanism. It unite bidding regulatory agencies, government administrative departments of construction, the project owner (the tender), the bidders and the public to form a joint force for the sound development of the project bidding market, ensure a fair and just, give full play of bidding mechanisms to reduce transaction costs, make merit-based competition, promote the role of optimal allocation of resources, and form a Pareto improvement.