National development plan 2018-2022- reforms to strengthen the Public Procurement Regime

On February 7^th, 2019 bill -draft legislation- No. 311/219 (House of Representatives) and No. 227/2019 (Senate) was filed before the Colombian Congress (the “BILL”).  The BILL, which is currently under discussion in Congress (second debate), contains the provisions proposed by the National Government for the country´s “National Development Plan 2018-2022” (“NDP”).

Please note, there is a deadline for Congress to adopt the BILL which expires on May 7^th.  If Congress fails to enact the NDP before expiration of said deadline, the Colombian Government -President- shall approve it by means of a decree -decreto con fuerza de ley-.

This document provides a short summary of the objectives the National Government aims to accomplish with the NDP between 2018 and 2022 in relation to the country´s public procurement regime.

In addition, we point out some of the changes that would be introduced should the final provisions are approved by the Congress as they are.

E-procurement and the use of framework agreements

The BILL includes an amendment to paragraph 5 of article 2 of Law 1150 of 2007, regarding the mandatory use of framework agreements by all the contracting authorities to which the General Public Procurement Statute applies.  Please note, under current regulation said obligation applies only to entities belonging to the executive branch.

Paragraph 3 of article 94 of Law 1474 of 2011 would also be amended under the BILL, by making it mandatory to use the State’s E-Shop (Tienda Virtual del Estado) for the acquisition of products in a minimum amount (as defined for each contracting authority).

These amendments aim to incentivize and strengthen e-public procurement processes.

Debarment for fines or repeated breaches of state contracts

The BILL aims to modify article 90 of Law 1474 of 2011, amending the term of sections a) and b), according to which a contractor will be debarred from contracting with the state (inhabilidad) if any contracting authority imposes five (5) or more fines or issues administrative acts declaring the breach of at least two (2) contracts during one fiscal year (a fiscal year goes from January 1^st to December 31^st).

The BILL proposes to modify the term from “one fiscal year” to “three (3) years”.  All in all, if the BILL is enacted as it is, a contractor will be debarred from contracting with the state (inhabilidad) if any contracting authority imposes five (5) or more fines or issues administrative acts declaring the breach of at least two (2) contracts during the last three (3) years.

State-owned companies as contracting authorities for PPP projects

Lastly, under article 79 of the BILL, the Industrial and Commercial State-Owned Entities, the State-Owned Entities in which the State owns more than 50% of its shares, their subsidiaries, the Companies created between Public Entities in which the State owns more than 50% of its shares and the official or mixed-capital public utility companies, can act as contracting authorities for the purposes of public-private partnerships.  Please note, such entities do not have such possibility under current regulation.