In Macau, there is no general law or statute governing public procurement. Besides some very broad provisions in the Code of Administrative Procedure, the following pieces of legislation are worthy of note.

• Decree-Law 122/84/M – legal framework of expenses with construction works and procurement for goods and services.
• Decree-Law 63/85/M – legal framework of procurement for the provision of goods and services by tender made pursuant to Decree-Law 122/84/M.
• Order 52/GM/88 – establishes the procedure for the acquisition of real estate assets by public authorities.
• Law 3/90/M – legal framework of public works and services concessions.
• Law 14/96/M – establishes the obligation for public works and services concessionaires under Law 3/90/M to make their balance sheet and the reports issued by their board of directors and supervisory board publicly available on a yearly basis.
• Order 39/GM/96 – establishes mechanisms for the acquisition and rental of IT equipment by public authorities.
• Decree-Law 74/99/M – legal framework of procurement for public construction works, including provisions on contract negotiation, applicable administrative procedures and contract performance.
• Order 66/2006 – provides instructions on the economic classification of public revenues and expenses.
• Administrative Regulation 6/2006 – financial framework of public services.

The Macau government, public departments granted administrative autonomy, independent public services and public funds are all subject to the relevant procurement laws and regulations as purchasers.

Procurement laws and regulations apply to the procurement of goods and services, public construction works and public services.

Pursuant to Decree-Law 74/99/M, only entities based in Macau and listed in the official registry of public contractors are admitted as bidders in open tendering procedures for public construction works. Nevertheless, foreign entities are still admitted in limited situations, such as when the Macau SAR must honour international agreements or when the specific characteristics of the public works in question require the specialised skills and labour of a foreign entity. In such instances, those foreign entities must provide evidence of their registration as public works contractors in their own jurisdiction.

Law 3/90/M includes a similar provision whereby entities bidding to become public works and services concessionaires must be based in the Macau SAR. Unlike Decree-Law 74/99/M, no exception such as the ones outlined above is made with regard to foreign entities.

When it comes to procurement for the provision of goods and services by tender, Decree-Law 63/85/M does not include any prerequisites on the eligibility of bidders, thus leaving the door open to foreign entities, without prejudice to the conditions set out in the tender programme.

The Code of Administrative Procedure foresees that all public authorities should abide by the following principles: legality, impartiality, equality, proportionality, good faith, pursuit of public interest and protection of the rights and interests of citizens.

The Code of Administrative Procedure establishes a general principle of publicity which determines the openness of all administrative procedures. An open tendering procedure therefore starts with its announcement in the official gazette and advertisement in two of the most widely circulated and read Chinese- and Portuguese-language newspapers in Macau SAR. Among other relevant elements, these must include details regarding the contracting authority, the public entity in charge of the procedure, the base value of the tender, the deadline for the submission of tenders and the amount of the provisional guarantee that bidders must provide in order to be admitted to take part in the procedure, the contract’s deadlines and the rules on the evaluation of tenders.

Further to the above, Law 3/90/M, containing the legal framework of public works and services concessions, states that the following must be announced in the official gazette:

• the decision not to start an open tendering procedure;
• the decision to put an end to an open tendering procedure already started;
• the decision not to award the contract to any of the bidders; and
• the decision to suspend or terminate a concession.

Contracting authorities are not prevented from collecting market information before launching a procedure, as it is prudent to collect as much information to better pursue the public interest. In certain instances, such information is also necessary to assess which open tendering procedure should be launched.

Pursuant to the Code of Administrative Procedure, public contracts in general may be the result of an open tendering procedure, of a limited open tendering procedure with or without prior qualification, or of direct negotiation. In certain cases, however, the law itself might specify a determined procurement procedure, such as, inter alia:

• provision of goods and services by tender – open tendering procedure, limited open tendering procedure with prior qualification, or direct negotiation; and
• acquisition of real estate assets by public authorities – open tendering procedure or direct negotiation.

An open tendering procedure comprises the following steps:

• announcement of the open tendering procedure and tender conditions;
• tender submission and provision of a provisional guarantee by the bidder;
• opening and assessment of the tenders;
• awarding of the contract to the winning bidder;
• provision of a performance guarantee by the contractor; and
• execution of the public contract.

A limited open tendering procedure with prior qualification follows the same rules as those regulating open tendering procedures, but only bidders pre-selected by the contracting authority and able to meet certain requirements and conditions (eg, technical, professional or financial) are allowed to take part in the procedure. Among those eligible, three bidders are invited to submit their tender, and the most inexpensive is then selected. In turn, a limited open tendering procedure without prior qualification foregoes the necessity of bidders meeting certain requirements and conditions.

Direct negotiation can be used by contracting authorities when an open tendering procedure is either not mandatory, or has been waived (in the instances where the law expressly provides for that possibility). A procurement procedure with direct negotiation will usually start by surveying at least three specialised entities domiciled in Macau. This survey must necessarily take place in writing when the estimated cost of the public construction works or of the goods or services sought by the contracting authority exceeds MOP90,000 or MOP900,000, respectively.

A contracting authority’s choice of procedure is not fully discretionary. Generally, minimum financial thresholds serve as indicators to determine the type of procedures used in public procurement. Pursuant to Decree-Law 122/84/M, when the cost of construction works exceeds MOP15 million, or when the cost of acquiring goods and services exceeds MOP4.5 million, the contracting authority must necessarily carry out an open tendering procedure.

On the other hand, Decree-Law 122/84/M also states that a limited open tendering procedure with prior qualification must take place when the cost of construction works exceeds MOP90 million, when the complexity and particularity of construction works so demands it (for example, due to very tight deadlines or the need to use specialised methods of construction), or when the cost of acquiring goods and services exceeds MOP45 million.

In the particular case of the acquisition of real estate by public authorities, the Financial Services Bureau must first assess which is the most adequate procedure and submit their proposal to the contracting authority.

The choice to waive a procedure and award a contract by private treaty (ajuste directo) is also not a discretionary one, with contracting authorities only being allowed to do so under specific conditions, such as public safety.

Refer to 2.3 Tender Procedure for the Award of a Contract with regard to direct negotiation.

The law does not impose mandatory deadlines for the publication of documents.

Time limits for the submission of tenders vary greatly depending on what is being procured. For instance, when procuring goods or services, time limits can range between 15 and 180 days, depending on the importance and nature of the goods or services in question. In the case of procurement for public construction works, time limits may range from 20 to 90 days, depending on the volume and complexity of the project. Nevertheless, all relevant deadlines are expressly set forth either in the tender conditions or in the law.

The specific criteria that potential bidders must meet in order to be eligible to take part in a procurement procedure depend on the nature of the public contract in question. The legislation governing certain specific contracts in more or less detail sets forth some criteria; where no criteria are set forth by the law, the tender documents must provide it in detail.

In the case of Law 3/90/M, an entity is considered eligible to become a public works and services concessionaire if it is considered suitable, possesses the necessary technical qualifications and financial capacity, is based in Macau SAR and its main business activity is the same as the concession it is vying for.

In turn, further to the eligibility criteria outlined in 1.4 Openness and International Competition, Decree-Law 74/99/M also mandates that public works contractors interested in taking part in an open tendering procedure fully paid all taxes owed to the Financial Services Bureau in the previous five years and that it has no debts to the Social Security Fund.

Refer to 2.4 Choice/Conditions of a Tender Procedure with regard to the situations where contracting authorities are allowed to make use of limited open tendering procedures (with or without prior qualification) and direct negotiation. In these types of procedures, shortlists can be determined with reference to potential bidders’ special qualifications, such as when particular skills or prior experience are required to provide certain goods or services or to execute certain works.

In the case of limited open tendering procedures (with or without prior qualification), contracting authorities must shortlist at least three qualified potential bidders, who will then be invited to submit their tenders. Likewise, the procedure for direct negotiation also starts with contracting authorities surveying at least three specialised entities.

Without prejudice to the indication of other criteria in the tender conditions, as a general rule contracts are awarded to the bidder with the most inexpensive tender. In the particular case of procurement for public construction works, the contracting authority further takes into account the proposed deadline for construction, profitability, and technical value, among other things.

Refer to 2.3 Tender Procedure for the Award of a Contract regarding the situations where the contracting authority initiates a limited open tendering procedure.

Pursuant to Decree-Law 63/85/M and Decree-Law 74/99/M, following the deadline for the submission of tenders in an open tendering procedure, a committee appointed by the contracting authority opens all tenders and examines the bidders’ qualifications, which enables them to draft a shortlist of admitted bidders. The committee then analyses the tenders and decides which bidder will be awarded the contract.

If there is a tie, the contracting authority summons the bidders in question to improve their tenders and, if neither of them is able to lower their price, the award decision will be issued at the authority’s own discretion.

Following an open tendering procedure’s announcement as detailed in 2.1 Prior Advertisement, the tender programme and specifications, which include the evaluation methodology and other relevant information and elements, must be disclosed and made publicly available on the official website of the contracting authority, with hard copies also made available for public consultation at the authority’s offices.

Pursuant to Decree-Law 63/85/M and Decree-Law 74/99/M, following the deadlines for the submission of tenders, the contracting authority hosts a public event where these are opened and assessed in the presence of all bidders. This event is led by a commission appointed by the contracting authority, which, after reading a list of all admitted bidders, opens and looks into each tender in the order of their respective submission so as to assess their admissibility. Bidders who have not been admitted can then file a verbal claim against the decision of the commission, the merits of which will be decided immediately.

In the case of a limited open tendering procedure with prior qualification, the contracting authority notifies the entities who have met the technical, professional or financial prerequisites and then invites them to submit a tender. Should a limited open tendering procedure take place without prior qualification, only the entities directly invited by the contracting authority may submit a tender.

There is no obligation to a prior hearing of bidders before a decision is taken.

As noted in 3.3 Obligation to Notify Bidders of a Contract Award Decision, there is no obligation to a prior hearing of bidders before a decision is taken.

There is no requirement for a “standstill period”.

In general terms, a contracting authority’s decision may be reviewed by the authority itself, in the context of an administrative claim (reclamação), or by its immediate superior, through an administrative appeal (recurso hierárquico). Administrative claims and appeals can be filed by individuals and entities vested in the interests or rights affected by an authority’s decision.

A third and highest level of review is provided for in the form of a judicial appeal (recurso contencioso), filed with courts either directly or, subject to particulars, following a previous administrative claim or appeal dismissing the claimant or appellant’s challenge. Under certain circumstances, a judicial appeal may also take the form of a class action lawsuit.

Likewise, public procurement contracts can be challenged through a specific lawsuit (acção sobre contratos administrativos) whereby plaintiffs file suit to:

• petition the annulment of a decision taken by the contracting authority during the award procedure (pre-award decision) and the consequent termination of an administrative contract;
• challenge the validity, interpretation or performance of an administrative contract; or
• seek compensation for damages.

See 4.1 Responsibility for Review of the Awarding Authority’s Decisions.

Administrative acts performed by a contracting authority in the context of a tendering procedure (such as the award decision) may be suspended if:

• the performance of the administrative act in question is likely to cause damages which would prove difficult for the applicant to repair;
• the suspension does not seriously injure the public interest pursued by the contracting authority through the performance of such act; and
• there is no strong indication of the illegality of the challenge.

In the instances where the damages that the immediate performance of the act whose suspension is sought will cause to the applicant are disproportionately higher, the law waives the second of these requisites.

Upon being notified by a court of law of the applicant’s request for the suspension of an administrative act, contracting authorities must immediately pause its performance or abstain from initiating it, unless within the next three days they acknowledge in writing that complying with the court-ordered measure would cause significant damage to the public interest and provide all necessary details to back this claim.

Administrative claims, administrative appeals and judicial appeals may be filed by the individuals and entities vested in the interests or rights affected by the contracting authority’s decisions. Judicial appeals may furthermore be filed by the Public Prosecutor’s Office and by entities charged with defending certain rights and interests, or take the form of a class action lawsuit.

Different limitation periods exist depending on the nature of the procurement procedure and the challenging mechanism. Unless otherwise provided for in the law, the following generally apply to administrative acts:

• 15 days to file an administrative claim;
• 30 days to file an administrative appeal; and
• 30 to 365 days to file a judicial appeal, depending on the residency of the appellant or on the type of decision in question.

If an administrative act is challenged on the grounds of its supposed nullity, no limitation period applies.

Other special limitation periods exist, such as the following.

• In procurement for the provision of goods and services by tender, the resolutions taken by the tender commission during the public act of opening and accepting the proposals can be challenged in the course of the public act itself in what amounts to an administrative appeal, with the appellant’s statement of claim sent in writing within the next ten days.
• In procurement for public construction works, an administrative claim against the acts or omissions of the contracting authority can be filed within a limitation period of ten days and the contract itself can be challenged in court within a limitation period of 180 days.

The law provides for general time limits of 15 and 30 days for a decision on an administrative claim or on an administrative appeal to be issued, respectively. If no decision is issued within these periods, the claim or appeal is deemed as rejected by the contracting authority in question.

There are no mandatory time limits for a court to issue a decision on a judicial appeal. The length of these proceedings varies depending on multiple factors, such as the complexity of the matter, the number of parties involved, or the workload of the judge. However, the judicial appeal of pre-award decisions in procurement for public construction works, continuous supply contracts and services contracts for purposes with immediate public benefit are urgent in nature and therefore a decision must be issued no more than seven days after all other procedural formalities are completed.

There is insufficient publicly available information to provide an accurate figure for the annual number of procurement claims in the Macau SAR.

Although the filing of administrative claims and administrative appeals is generally free, judicial appeals are subject to the payment of court fees, which vary depending on the stages the proceedings go through during their course.

Contracting authorities are broadly granted the power to unilaterally change the content of the contract by the Code of Administrative Procedure, provided that the contract’s original scope and financial balance are respected.

Pursuant to Decree-Law 79/99/M, which regulates contracts for public construction works, contractors can propose amendments to a project’s work plan and, in the event of an abnormal and unpredictable change in circumstances, are granted the right to review the contract with the objective of being compensated for an increase in effective costs or of updating prices.

Contracts may be terminated by contracting authorities for reasons of duly substantiated overriding public interest, without prejudice to the contractor’s right to compensation.

Contracting authorities are granted far-reaching powers by law, namely:

• to unilaterally change the content of the contract, provided that the contract’s original scope and financial balance are respected;
• to manage the performance of the contract;
• to supervise the performance of the contract; and
• to enforce penalties.

Apart from the general framework of the Code of Administrative Procedure outlined above, other powers are provided for in separate laws and regulations with regard to specific contracts, such as the power to terminate a contract for the provision of goods and services in the event that the contractor does not comply with the authority’s written instructions on the contract’s performance.

There have not been any important court decisions over the course of the past year.

Although there are currently no legislative amendments under consideration, the newly elected Chief Executive Sam Hou Fai already mentioned that one of his administration’s priorities is to review and reform the Code of Administrative Procedure, along with other relevant pieces of administrative legislation.