Bid-Winning Triggers Complaints, Complaints Lead to Cancellation: How to Address the Chaos in China's Centralized Procurement of Medical Equipment?

China’s Centralized Procurement of Medical Devices: Bidding Documents and Legal Teams Elevated to Unprecedented Heights

In March 2026, an announcement was issued to annul the tender for a procurement project of ultra-high-end CT equipment in Guangxi. After all 12 complaints filed were rejected, the regulatory authorities still decided to annul the tender, citing concerns that the process had “compromised the fairness and impartiality of the procurement.”

Previously, centralized procurement projects for medical equipment in Chongqing, Anhui, Gansu, and other regions frequently encountered complaints leading to bid cancellations. Industry data shows that in 2025, the national bid cancellation rate for medical device procurement due to challenges and complaints increased by 15% year-on-year, while the number of “challenge and rights protection” cases rose by 40%. In the first quarter of 2026 alone, there were more than 20 publicly reported cases of canceled or failed bids in centralized procurement of medical equipment.

Amid intensifying involution, the reasonableness of complaints has become less critical. Today, the announcement of bid winners no longer marks the end of the procurement process but rather the starting point for a new round of strategic maneuvering. The phenomenon wherein “a winning bid triggers complaints, and complaints lead to bid annulment” has evolved from occasional isolated cases into another systemic dilemma facing medical device companies.

As an important auxiliary supervisory tool for maintaining fairness in procurement and market order, the complaint mechanism in the medical device industry can effectively expose bidding irregularities such as “specification-tailored bidding” and “fraudulent bidding.”

However, as the impact of centralized procurement on corporate operations has grown increasingly significant, market competition has intensified exponentially. For blockbuster deals worth hundreds of millions, winners can capture market share without cultivating hospital relationships, while losers face existential crises characterized by idle production lines and squeezed market shares.

Thus, a new strategy emerged: suing whenever one wins.

“If I’m not the winning bidder, I’ll file a complaint.” This is how a senior industry insider summarized the current trend. “A company only needs to review the tender documents, prepare a few materials, and pay a bid bond to lodge a complaint. The cost is extremely low, while the potential gains are substantial. Once a complaint is accepted, the project must be suspended; even if the complaint is ultimately dismissed, the competitor’s business rhythm will still be disrupted.”

This strategy has even given rise to a new class of companies that specialize in identifying loopholes in winning bid documents and filing corresponding complaints with finance departments, thereby extending the competition in bidding processes from technical comparisons to administrative procedures.

Returning to the Guangxi project. At that time, competitors lodged complaints based on 12 allegations, citing reasons such as “false response parameters,” “tender documents restricting competition,” and “unfair bid evaluation.” After several months of review, all 12 complaints were dismissed as “lacking factual basis or failing to meet the conditions for acceptance.”

Under normal legal reasoning, the complaint would be deemed unsubstantiated, and the bid award results should be upheld. However, the regulatory authority, citing Article 36 of the Government Procurement Law of the People's Republic of China, ordered the annulment of the bid on the grounds that “circumstances arose affecting the fairness and impartiality of the procurement.”

According to insiders, the primary reason for the annulment of the bid was the existence of two different interpretation standards for the core parameter “maximum gantry rotation speed”: one based on the “physical limit” and the other on the “clinical application value.”

In responding to regulatory inquiries, all bidders strictly adhered to the literal requirements of the tender documents. However, only the winning bidder specified the physical limit values of the equipment, while some other bidders provided clinical application values.

This discrepancy in criteria led to an inconsistent basis for technical evaluation, ultimately resulting in the winning bidder’s disqualification even after all 12 complaints filed against them were dismissed item by item.

If the strategy of litigating every win is widely adopted, centralized procurement of medical devices will inevitably shift rapidly to a new landscape.

On the positive side, there is a push toward process standardization. Under stringent regulatory oversight, tendering entities will refine their rules, and companies will improve their bid documents, thereby fostering healthy industry development.

The downside is that it may create perverse incentives during the process. On one hand, an excessive number of frivolous complaints can disrupt normal procedures, and such disruptions may in turn encourage companies to file even more complaints. On the other hand, if a company incurs high compliance costs only to have its bid invalidated due to complaints, the intrinsic value of compliance will be undermined, leading to reduced willingness among medical device manufacturers to maintain compliance.

For companies, the most unsettling aspect of the Guangxi incident for the industry was not the bid cancellation itself, but the allocation of costs.

As of the announcement date, no official documents have determined that the winning bidder engaged in any violations. This means that while the winner incurred compliance costs, it must bear losses including bidding expenses, business development investments, and disruptions to already-initiated supply chain and production schedules.

“It’s like a race where you finish first by following the rules, but the referee disqualifies everyone because other competitors complained that ‘the rules might be unfair,’” said a head of a medical device manufacturer, with a sense of helplessness.

Furthermore, it may also prompt some companies to file a large number of complaints to delay project progress and increase competitors’ costs when they are at a disadvantage in terms of technology or price.

If this strategy of “using litigation to force cessation” is not effectively curbed over the long term, it could indeed lead to a situation where bad money drives out good.

To address the many issues in the Guangxi incident, we need to first discuss some of the details: Does high parameter equate to high energy efficiency?

Objectively speaking, the “fastest gantry rotation speed” of CT equipment is only one of the evaluation dimensions. An exceptionally high parameter does not necessarily mean that the device can cover a broader range of needs in clinical practice. Currently, there is a common dilemma in the industry: many “high-performance” indicators cannot be expressed with quantifiable figures like rotation speed or the number of slices.

This precisely reflects a common challenge currently facing the evaluation framework for centralized procurement: overreliance on a few explicit parameters may lead to a situation where “the specifications look impressive on paper, but the products are not necessarily practical in clinical settings.” The Guangxi project’s eventual annulment of the bid and re-tendering, while having tangible impacts, has also prompted deeper industry recognition that the “parameter-only” approach must transition toward a more scientific evaluation system.

Revisiting the Bidding Process: For a procurement project valued at over 100 million yuan, a decision to annul the bid—which directly determines the survival of an enterprise, affects hospital equipment configuration, and impacts the efficiency of fiscal fund utilization—should, at a minimum, clearly address three questions:

1. Where exactly did the problem occur? Was it due to expert misconduct, corporate fraud, or bias in the documents?

2. If no valid evidence of violations can be provided, and only a vague conclusion of “affecting fairness and impartiality” is drawn, how can market entities trust the system?

3. If the issue indeed stems from flawed rule design, how should the losses incurred by compliant enterprises be compensated?

Amid these unresolved issues, there is currently no universally accepted answer; however, within the context of centralized procurement, Zhejiang’s model has, to some extent, provided reference insights on “how to file complaints properly” and “how to return complaints to their fundamental purpose.”

In brief: The characteristics of Zhejiang’s centralized procurement model can be summarized in three points:

First: Look beyond parameters; focus more on clinical capabilities.

Tender documents in Zhejiang Province require bidders to upload actual spectral imaging scans provided by user hospitals, which are then evaluated by experts for clinical utility. This means that equipment evaluation is not based solely on data; rather, it is presented in a clear, quantifiable, and visible manner, thereby enabling fairer and more impartial assessment outcomes.

Second: Incorporate the “full life cycle” into the evaluation.

Zhejiang implements a tiered scoring system based on the service life of medical equipment. Whether a device can operate stably for 15 years or only 8 years has a significant impact on the long-term costs of healthcare institutions. This advantage cannot be reflected in a system that adheres solely to "parameter-centric" evaluation, whereas Zhejiang’s framework enables clear quantification of customer needs.

Third: Maintain a high level of transparency throughout the entire bidding process.

Zhejiang Province publicly discloses all documents related to challenges and complaints, as well as details of bid evaluations, on public websites. Once exposed to public scrutiny, malicious complaints often have nowhere to hide—their logical flaws are examined by the public, media, and competitors alike.

As Zhejiang’s centralized procurement program is still undergoing validation, the above three points are not absolutely definitive. However, it is foreseeable that when the evaluation system becomes more scientific and the procurement process sufficiently transparent, companies that operate in compliance, possess strong technical capabilities, and demonstrate long-term service capacity will hold a competitive advantage.

Furthermore, as the operational space for malicious complaints is effectively curtailed, the complaint mechanism will gradually return to its original institutional intent: to uphold fairness in procurement activities, rather than serving as a tool for mutual suppression among enterprises.

Overall, the high rate of bid rejections and the storm of complaints from 2025 to 2026, while representing growing pains for the industry, have also served as a catalyst for standardizing medical equipment procurement.

As the old model of “relationship marketing + parameter-based bid rigging + opportunistic false reporting” loses its effectiveness, centralized procurement of medical equipment is evolving toward a mature, fair, and just new ecosystem.

Certainly, the catalytic process should not come at the expense of harming compliant enterprises. A healthy procurement ecosystem should ensure that verified bid-winning results are not easily overturned, rather than leaving winners perpetually shrouded in unfalsifiable suspicions.

Optimizing regulatory frameworks takes time. In the interim, we hope to see broader adoption of models like that in Zhejiang, thereby ensuring that decisions to “invalidate bids” are made more prudently, transparently, and traceably.

Only in this way can the centralized procurement of medical equipment truly achieve its original intent: acquiring better equipment at more reasonable prices, ultimately benefiting patients, rather than falling into a prisoner’s dilemma characterized by litigation-driven suspensions.