Beijing's Government Procurement Office has announced on its website that a Microsoft agent has become its supplier of operating systems and office suites, a deal valued at 29.25 million yuan (US$3.52 million).

Beijing Center Electronic Technology won the process, in which three other Chinese software companies were involved, and is expected to sign a government software procurement agreement today.

The success is one of several that Microsoft has achieved in recent months, but the capital deal may be influential elsewhere in the country.

However, government officials and experts have raised many objections to bidding processes and systems.

"Related government procurement departments in some provinces and municipalities, regardless of national interests and information security, have bought a lot of foreign software and procured no or little domestic software," said Li Wuqiang in a personal statement late Wednesday.

"The moves are against Government Procurement Law and deal a fatal blow to the development of the domestic software industry."

Li is deputy director-general of the department of high-tech industry of the Ministry of Sciences and Technology.

Government Procurement Law requires domestic products and services to be given preference in government projects. Foreign products and services can only be used if there are no domestic alternatives.

However, there is not a clear distinction between foreign and domestic software vendors, as government software procurement regulations are still in the pipeline.

The capital's municipal government website responded to criticism yesterday saying that they had found that some departments could not provide proper licenses for software they were using, most of which were Microsoft products.

So the government decided to solve the issue by buying a certain amount of Microsoft software now, but requiring that domestic software should be preferred in future projects.

Ni Guangnan, an academician at the Chinese Academy of Engineering, said it is not correct to use foreign software, just because users are not used to domestic software.

Ding Wenwu, deputy director-general of the electronic product department of the Ministry of Information Industry, said his ministry would investigate the issues and report on them to the State Council or the Government Procurement Leading Group.

Microsoft was not immediately available for comment.

(China Daily November 26, 2004)