Public procurement regulation in Peru

March 2019

• All public procurement procedure information is accessible online through SEACE, which is the Peruvian electronic procurement platform. Contrary to what happens in other jurisdictions, contracting authorities only use this platform to publish procurement procedure information.

• The first threshold lies at 8 tax units (equivalent to approximately USD 11,000). If the contract value is below this amount, the authority does not have to follow an open public procedure and may contract directly.
• The second kind of thresholds determine which procedure is applicable (public tender/bidding or simplified allocation). These thresholds are determined in relation to the contract value. The public tender (used for works) is applicable for contracts valued above USD 550,000 (approx.). The public tender (used for goods) and the public bidding (used for services) applies to contracts valued above USD 120,000 (approx.). The simplified allocation (as well as price comparison procedure and reverse auction, among others) applies to contracts valued below the values mentioned.

• Open procedure: Peruvian PPL establishes that all public procurement must follow open procedures for procuring works, services and goods.
• Restricted procedure: The PPL establishes restricted procedures in specific cases. For example, Framework Agreements must be formalized by the Central Purchasing Office (PERU Compras, to give it its Spanish name). PERU Compras tenders for goods and services required by public entities through the Electronic Catalogue of Framework Agreements and selects companies to supply them from the bids it receives.
• Negotiated procedure: The PPL foresees several cases where there is no requirement to procure the goods, services or works through an open procedure (e.g. when the amount is low or when there is an emergency). In these cases, the entities may contract directly with the supplier.
• Competitive dialogue: Not applicable for public procurement, but it has recently been adopted in the PPP legislation.

• The contracting authority decisions that can be appealed are all related to the award. If a party wants to challenge any decision within the procedure, they must challenge it with the award.
• Depending on the contract value, the award must be appealed before the same contracting authority or the Peruvian Public Procurement Court, a government agency responsible for supervising public procurement.
• Any decisions issued by the Peruvian Public Procurement Court may be challenged by judicial action before the Peruvian Administrative Courts.
• The decisions taken when executing the contract can only be challenged in an arbitration procedure.

• The time limits depend on the procedure: 8 working days for tenders and 5 working days for simplified allocations.
• Once the time limits have passed, no further appeals may be made.

• The procedure remains suspended until the appeal is complete.

• The highest authority within the contracting authority oversees the appeal review if the contract value is less than USD 60,000 (approx.).
• The Peruvian Public Procurement Court oversees the appeals review if the contract value is more than USD 60,000 (approx.).
• The Peruvian Administrative Court oversees the judicial review of the administrative decisions issued by the Peruvian Public Procurement Court.
• Arbitration tribunals deal with controversies arising from the contract execution.

• There are no fees, but the interested party has to guarantee the appeal with a deposit equivalent to 3% of the contract value – and may not exceed 300 tax units (equivalent to approximately USD 400,000). If the appellant loses, they will forfeit the deposit and the Public Procurement Court will receive the money.

• The appeal has a suspensive effect.
• When the decision is challenged before the Peruvian Administrative Court, the suit does not suspend the procedure. It is therefore necessary to apply for precautionary measures.

• Peru is not a member state of the European Union, which means the Directive 66/2007/EC is not applicable. However, both ineffectiveness and penalties can be ordered by the courts.

• Yes, it is possible to amend the contract value (up to 25% and 50%, but the authorization of the Comptroller General's Office must be obtained in the latter case) and extend the contract term if an external cause makes it impossible to execute the contract in the original timeframe.
• The contract can also be amended in order to improve the quality of the goods or services that the contractor is obliged to deliver or perform.

• E-procurement is mandatory for certain procedures, such as the simplified allocation, reverse auction and pricing comparison.
• Recent regulations have established the progressive implementation of e-procurement for every procedure.
• E-signatures are not mandatory and are not required in any procedure.