Gov’t considers mandating local resident employment in subcontractors

While committing to safeguarding local employment opportunities, the government has stated that it will study and consider incorporating subcontracting requirements into the tendering process.

In response to Legislator Leong Sun Iok’s written inquiry about ensuring compliance with local employment quotas during subcontracting, Lai Weng Leong, director of the Land and Urban Construction Bureau (DSSCU), stated that the portfolio of the Secretary for Transport and Public Works is actively working to optimize the bidding system and enhance employment opportunities for local workers.

The Public Works Bureau (DSOP) was cited as stating that the following measures will be implemented in engineering contracting and service procurement procedures.

These include listing requirements to prioritize the hiring of local employees in tender documents; establishing a minimum proportion for hiring local employees under eligible conditions; encouraging contractors to gradually increase the share of local employees in technical, managerial, and professional positions; and exploring the inclusion of subcontracting requirements in the tender documents.

For its part, the DSSCU will require contractors to prioritize hiring local workers for the demolition of illegal structures and the remediation of state-owned land, particularly when the scale of construction is relatively small and the construction period is short.

It also pointed out that since 2020, the proportion of local workers employed has been included in the scoring criteria for municipal engineering tenders under the Municipal Affairs Bureau (IAM), along with a regulatory mechanism to penalize contractors who fail to fulfill their commitments.

Meanwhile, regarding the effectiveness and improvement plans for the structured system designed for the bidding and consultation processes in public works projects established in 2009, which was a particular concern for the lawmaker, the DSSCU director responded that, due to societal development, the relevant system ceased operations as early as 2021.

However, Lai added, all public works consultation bids are currently conducted in accordance with the law, stating that the government is analyzing and continuously communicating with the industry to optimize the bidding system for public works projects.

This includes replacing the traditional “lowest bidder wins” model with a “reasonable price” approach in the quotation bidding process to promote healthy competition and sustainable development within the industry.

To facilitate this, the Municipal Affairs Bureau will determine the appropriate bidding procedure – public tender or consultation – based on factors such as the scale of the project, construction costs, uniqueness, and complexity.

Additionally, a grading and scoring mechanism for suppliers has been established to ensure a fair evaluation process.

At Leong’s suggestion to establish a tiered subcontracting mechanism for local companies based on project scale, Lai noted that the government has always maintained an open attitude toward industry classification mechanisms and continues to study their feasibility.

However, since this issue concerns the overall business environment of the construction industry, it is essential to fully communicate with all stakeholders and reach a consensus before implementation.