Competitive bidding for public subsidy allocation for welfare services has been widely applied in established welfare states since the 1980s. Studies conducted in these countries have inclined to understand competitive bidding as a financing initiative and use an array of “failure theories” to explain its challenges and failures. In contrast to these studies, the present study focuses on Hong Kong, a residual and semi-democratic welfare state, and investigates competitive bidding as a governmental policy instrument designed to increase the legitimacy of subsidy award decisions. Based on an analysis of submissions in a recent policy review and a review of existing policy documents, we suggest that the government may have increased its decision-making power over NGOs, resulting in little advancement, neither regarding welfare mix, nor concerning the legitimacy of resource allocation.