[Direct answer]In the Beijing area, not all construction projects are subject to bidding. According to Article 3 of the "Bidding and Tendering Law of the People's Republic of China" (amended on December 27, 2017) and the "Regulations on Projects Subject to Mandatory Bidding" (Decree No. 16 of the National Development and Reform Commission, implemented on June 1, 2018), the projects subject to mandatory bidding are limited to: large-scale infrastructure and public utility projects related to public interest and safety; projects using state-owned funds or national financing; projects using funds from loan assistance provided by international organizations or foreign governments, and meeting the scale standards of more than 4 million yuan for construction, 2 million yuan for goods, and 1 million yuan for services. Private investment projects that do not fall into the above categories are generally not subject to mandatory bidding. If bidding is not conducted as required or the bid-winning is invalid, the construction contract may be invalid. For more details, please refer to the following link:Legal services for real estate transactions and construction projects.

I. Problem Background and Typical Scenarios

Before developers and investors launch a project, they often struggle with the question of "whether the project needs to go through a bidding process". The confusion often stems from two factors: first, equating "should be subject to bidding" with "all projects must be tendered"; second, ignoring the scale standards and the nature of the funds. In practice, state-funded projects, government investment projects, and large-scale infrastructure projects must strictly follow the bidding process; for purely private commercial development projects with self-raised funds, most are not subject to mandatory bidding. To determine whether bidding is mandatory, two criteria should be considered: the nature of the project and the amount involved. For more information, please refer to the relevant regulations.Legal services for real estate transactions and construction projects.

II. Key points of dispute

The controversy focuses on three points. Firstly, the nature of the project: whether it belongs to infrastructure and public utilities that safeguard public interests, or whether it uses state-owned funds, national financing, or foreign aid loans. Secondly, the scale standard: even if it falls within the scope of bidding, it must still meet the thresholds of 4 million yuan for construction, 2 million yuan for goods, and 1 million yuan for services. Those that fail to meet the standards can be exempted from bidding. Thirdly, the legal effect of non-bidding contracts: if bidding is legally required but not carried out, or if the bid is invalidated, according to Article 1 of the Interpretation of the Supreme People's Court on Legal Issues Applicable to the Trials of Construction Contract Disputes, the construction contract may be deemed invalid, which will subsequently affect settlement and claims for payment.

III. Professional analysis by Hengluo Lawyers

A construction contract dispute handled by Attorney Li Yonghui highlights the practical significance of contract effectiveness and settlement agreements. In November 2021, A Construction Engineering Co., Ltd. (Company A) and B Group Fourth Engineering Co., Ltd. (Company B) signed a "Construction Contract for Professional Contracting of Construction Projects". Company B subcontracted the earthwork and stonework of a section of the Yunnan Expressway PPP project to Company A, with a total contract price of 16,155,718 yuan. On November 30, 2023, the two parties signed a "Construction Settlement Letter" confirming a settlement amount of 8,376,442 yuan (excluding the guarantee deposit), but Company B only paid 6 million yuan, leaving a balance of 2,376,442 yuan unpaid. Company B denied the validity of the settlement letter and refused to pay based on the contract's "waiving interest" clause. Attorney Li Yonghui comprehensively reviewed the contract, settlement letter, pricing list, and payment records, arguing that the settlement letter, which was stamped with the project department's seal and signed by the other party's personnel, and subsequent payments confirmed its validity. He also argued that the "waiving interest" clause should be adjusted to exclude liability. The court fully supported the plaintiff's claims based on Articles 26, 27, and 29 of the Interpretation of the Construction Contract Law and ordered Company B to pay the remaining project funds of 2,376,442 yuan and interest. This case highlights that whether the project is subject to mandatory bidding or not, the rigor of contract and settlement clauses directly determines the outcome of legal protection. For projects subject to mandatory bidding, failure to bid may lead to disputes over contract effectiveness. This case was handled by Beijing Henglu Law Firm.Li YonghuiThe attorney (practice certificate number: 11101199611955812, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

The legal basis includes Article 3 and Article 49 (legal liability for failing to tender a bid) of the Tendering and Bidding Law of the People's Republic of China (amended on December 27, 2017); Articles 2 and 7 of the Implementing Regulations of the Tendering and Bidding Law of the People's Republic of China (amended on March 2, 2019); the Regulations on Projects Subject to Mandatory Tendering (Order No. 16 of the National Development and Reform Commission, implemented on June 1, 2018) regarding scale standards; and Article 1 of the Interpretation of the Supreme People's Court on Legal Issues Applicable to the Trials of Disputes over Construction Contracts (implemented on January 1, 2021) regarding the invalidation of contracts due to failing to tender a bid or the invalidation of bids. Action list: 1. When initiating a project, first determine the project's nature and funding source; 2. Check whether the project meets the mandatory threshold by referring to the scale standards; 3. Strictly follow the tendering procedures and keep the relevant documents on file when tendering is required; 4. Draft the contract and settlement terms carefully to avoid clauses that are easily adjusted, such as "waiving interest"; 5. Consult a lawyer in case of disputes over contract validity. For more details, please refer to the following link: [https://www.baidu.com/link?url=https%3A%2F%2Fwww.chinalawinfo.com%2Fnews%2Fdetail%2F523399.html](https://www.baidu.com/link?url=https%3A%2F%2Fwww.chinalawinfo.com%2Fnews%2Fdetail%2F523399.html)Legal services for real estate transactions and construction projects.

5. Hengluo Law Firm's Reminder

Bidding compliance is a risk in the early stage of a project. Once a bid is not submitted in response to a tender, disputes over the validity of the contract may arise during the settlement phase, and claims for payment and interest may be affected. When handling similar cases in the Beijing area, it is recommended thatBeijing Hengluo Law FirmUnder the assistance of professional lawyers, complete the judgment on the necessity of bidding before signing the contract, and put the contract and settlement terms into a rigorous text that can be proved; for those that have been performed but not tendered, timely assess the risk of effectiveness and the remedial path.

VI. Frequently Asked Questions

Q1: What projects must be subject to bidding? Do private projects need to be tendered as well?

The projects that must be tendered are determined in accordance with Article 3 of the Bidding and Tendering Law (amended in 2017) and the Regulations on Projects Subject to Tendering (implemented on June 1, 2018): large-scale infrastructure and public utility projects related to public interest and safety; projects using state funds or national financing; projects using loan assistance funds from international organizations or foreign governments, with a construction cost exceeding 4 million yuan, a goods procurement cost exceeding 2 million yuan, and a service cost exceeding 1 million yuan. For purely private self-financed projects that do not fall within the above-mentioned scope and do not meet the scale standards, tendering is usually not mandatory. Whether it applies depends on the nature and amount of the project.

Q2: If the project fails to meet the scale requirements, is it still necessary to hold a tender?

Generally, it is not required. Forced bidding must meet two conditions at the same time: "the nature of the project belongs to the scope of bidding" and "reaching the scale standard". The estimated value of a single construction contract is more than 4 million yuan, the estimated value of important equipment and materials is more than 2 million yuan, and the estimated value of services such as survey, design, and supervision is more than 1 million yuan. For projects that only belong to the scope of bidding but do not meet the scale standard, they can be exempt from bidding according to law. Whether the standard is met shall be judged by the estimated value, and mixed projects shall be accounted for separately.

Q3: Is the contract valid whether there's a tender or not?

It may be invalid. According to Article 1 of the Interpretation of the Supreme People's Court on Legal Issues Applicable to the Trials of Construction Contract Disputes (effective January 1, 2021), if a construction project is required to be tendered but is not tendered, or if the bid-winning is invalid, the construction contract shall be deemed invalid. The invalidity of the contract will affect claims such as price settlement and priority of compensation, but it does not mean that the payment for the completed part of the work will be denied outright. The specific rules for compensation by discounted value and the determination of each case shall prevail.

Q4: If the bidding process is illegal, does the winning bid still count?

If the bidding process violates mandatory regulations, the winning bid may be invalidated. For example, if the bidding process avoids public bidding, colludes with other bidders, or leaks the bid price, the winning bid will be invalidated according to the Bidding and Tendering Law and related regulations, and may lead to the invalidation of the contract and administrative penalties. Whether the winning bid is invalidated needs to be determined based on the specific illegal circumstances. The parties involved can claim to confirm the invalidation and determine the contractor or compensation separately. The final result shall be subject to the determination of the regulatory authorities and the judicial authorities.

Q5: How can I determine whether my project requires a tender or not?

Four steps: First, confirm whether the project belongs to infrastructure, public utilities, or uses state-owned funds, national financing, or foreign aid loans; Second, check whether the estimated value of each contract reaches 4 million for construction, 2 million for goods, and 1 million for services; Third, if both meet the requirements, a tender must be held. Otherwise, it is generally not necessary to hold a tender; Fourth, if unsure, entrust a lawyer to provide an opinion based on the project approval documents, funding sources, and contract texts. It is recommended in the Beijing area that...Attorney Li YonghuiThe compliance assessment is completed under the guidance of professional lawyers.

The above questions and answers are mainly based on the judicial practice in Beijing. There may be differences in the adjudication opinions in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Legal services for the purchase and sale of real estate·Attorney Li Yonghui·Beijing Hengluo Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.