The government has recently proposed improvements to the public works tendering system, including replacing the “lowest bid wins” criterion with a “reasonable price” mechanism, and setting a minimum local participation ratio, with the aim of benefiting the sector’s ecosystem. For sustainable development of the industry, it is recommended to refer to the **Regime for the Systematisation of the Public Works Contracting Process**, as this would help establish a tiered mechanism for the awarding of public works contracts based on the size and value of the projects, allowing local construction companies of varying sizes to access development opportunities.
In recent years, some government public works contracts have been awarded through non-public procedures, such as a consultation process involving requests for quotations from designated companies. For public works valued under MOP 100 million, the consultation process invites local companies, but many still face challenges competing with large foreign enterprises due to their smaller scale. In previous projects, tender documents explicitly required local company participation and set minimum percentages, or allowed joint ventures between local and foreign companies, aiming to increase success rates in tenders and facilitate participation in large-scale projects. However, in current consultation and joint venture models, the effective participation of local SMEs remains quite limited.
The awarding of public works should be based on the principle that “public tendering is the norm, with exceptions only in special circumstances.” When non-public tenders or consultation procedures are used, the government should proactively disclose the reasoning and specific considerations behind such decisions, in order to address public concerns. At the same time, a structured support system should be put in place for the local construction industry, including mechanisms for tiered tendering, technical certification, professional training programmes, and systems for accumulating project experience. For contracts above a certain scale, exclusive tender categories for local companies should be created, and it must be ensured that local SMEs participate substantially in the technical management of joint ventures, rather than being involved only on paper — thereby gradually enhancing their technical capabilities and project management standards.
Lastly, the government has proposed establishing a minimum percentage of local participation in public works contracts. However, since these projects often involve multiple levels of subcontracting, it is recommended to implement mechanisms to ensure that main contractors comply with local labour ratio requirements throughout the entire subcontracting process.
Macau Federation of Trade Unions
