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Issuance of Law 1882 of 2018

Fri, 02/02/2018 - 16:01
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Infrastructure and Public Utilities 

the public procurement in Colombia 2018

Issuance of Law 1882 of 2018 “Whereby provisions are added, modified and dictated to strengthen the public procurement in Colombia, the infrastructure Law and issues other provisions”. 

On January 15th, 2018, the President of the Republic passed Law 1882 of 2018 1(“Law 1882” or the “Law”), which has the purpose of modifying current provisions regarding public contracts. The following explains the main modifications provided by Law 1882 and how it is related to the following aspects: (i) the structure of the public tenders; (ii) the responsibility of advisors, auditors and consultants; (iii) the implementation of mandatory standard documents in the public procurement procedures; (iv) inter-administrative agreements; (v) transport infrastructure projects; and (v) Public-Private Partnerships (“PPP”).

I. Structure of the public tenders

Through Law 1882, article 30 of Law 80 of 1993 2 is added, to regulate in the public tenders for construction contracts: (i) the submission of the required conditions and the economic proposal; and (ii) the establishment of the order of eligibility and the submission of observations to the proposals. For that purpose, subsequently we carry out a description of different aspects referencing the afore mentioned themes

 

a) Submission of the required conditions and the economic proposal:

Law 1882 obliges bidders on public tenders for construction contracts to submit two envelopes: a first envelope that shall contain the documents verifying compliance to the required conditions and the qualification factors, different from those of the economic offer, and a second envelope that shall only contain the economic offer, which will only become known in the adjudication hearing .3.

Additionally, Law 1882 establishes that in the “(…) effective adjudication hearing”, the eligibility order will be determined “(…) through a mechanism of random selection established in the agreement specifications”4. Once this mechanism is applied, it shall inform of the authorised proposers in the same diligence, solely for the review of subjects concerning the economic offer, with the purpose of establishing the eligibility order5.

b) Observations to the proposals in public bidding to select public construction contractors:

The evaluation report shall be published for five (5) working days in the Electronic System for Public Procurement (el Sistema Electrónico de Contratación Pública (SECOP), term in which the bidders will be able to submit the observations that they deem relevant and deliver the documents and information requested by the public agency6.

Once this period has elapsed, the final evaluation report of the required conditions and score requirements different from the economic offer will be published7.

c) The responsibilities of the advisors, auditors and consultants

Within the modifications raised by Law 1882, the consultants, external advisors and auditors will be responsible on civil, penal, fiscal and disciplinary grounds for damages to entities derived from the performance and execution of agreements with respect to those who have performed or perform consulting, advisory or auditing activities8. Although this principle was already embodied in article 53 of Law 80 of 19939, the criterion to determine the responsibility is modified, as now it extends only to the damages derived from acts or omissions which, in turn, will imply non-compliance of obligations contained in the agreement in which it develops the consulting, advisory or auditing activities previously mentioned. This same clarification is made for PPP projects.

It is important to note that, in the terms of article 53 of Law 80 of 1993 10, the auditors were responsible not only to the obligations derived from the auditing agreement, but also to the acts or omissions that were attributable to them in relation to the agreements that corresponded to their supervision.

d) The implementation of mandatory standard documents in public procurement, known as “Pliegos Tipo”

Law 1882 obliges the National Government to develop, implement and issue standard documents as the request for proposals that will be mandatory in the “(…) public procurement procedures of public constructions, audits for public constructions, consultancy of studies and designs, (and) consulting engineering for constructions”11. Likewise, it empowers the National Government so that, in the cases in which it deems necessary, it can also issue standard documents for other type of procurement processes. These standard documents shall be used for all state entities to which the General Contracting Statute of Administration applies.

The standard documents shall establish the required conditions, technical and financial, technical and economic factors of choice, “(…) as applicable to each procurement procedure12 along with the “(…) precise and detailed consideration of the same, that should be included in the agreement specifications, considering the nature and total value of agreements13” and shall be put into categories according to the total value of the agreement, according to regulation issued by the National Government14

In any case, in order to promote local employment, the Government shall consider the specific characteristics of the regions when it takes said documents15

e) Causes for the rejection of proposals in public procurement procedures.

Law 1882 clarifies that constitutes causes for the rejection of the proposals: (i) when the bidders do not provide the information and/or documentation requested by the public agency, within the term to submit observations for evaluation reports; and (ii) when the bidders do not submit the bid bond along with the proposal16.

 

II. Transportation infrastructure projects

With regards to the transportation infrastructure projects, Law 1882 modifies aspects of the procedures of acquisition and real estate management, allowing that in these processes the offer is notified not only to the owner that is registered on the land’s register, or to the respective possessor, but also to the “determined and undetermined heirs, understood as the people that have the right and proven expectation of stepping in as representative of the deceased owner in all legal relationships on account of their passing in accordance with existing laws”17.

Complimenting the above, the Law also authorises the entity to underwrite with the regular owner or the determined heirs of the real estate asset to be expropriated, a voluntary intervention authorisation of said real estate, which before could only be underwritten by the owner registered on the respective land register18.

Finally, it authorises the acquiring entity to directly issue the expropriation decision without needing to submit a purchase offer, in the following events19:

 

  1. When it is verified that the true registered proprietor of domain has passed and it is not possible to determine who their heirs are.

  2. In the event in which any of the of the true registered proprietors on the land register of the real state are subject to acquisition or the respective enrolled owner is reported in any of the prevention of money laundering or financing terrorism lists.

 

III. Public-Private Partnerships (PPP)

With respect to the PPPs, Law 1882 modifies the following aspects:

 

  1. It clarifies that in cases in which the state entity hands over, to a private investor, an existing infrastructure in working conditions, the right to retribute the activities of operation and maintenance of this existing infrastructure can be agreed in condition of its availability and in compliance with the service and quality standards20. Initially, this provision referenced the remuneration of operation costs, which didn’t allow that the concessionaire gained financially from the execution of said activities21.

  2. It allows to stablish functional units for airports and water treatment plants, in addition to those of tunnels and railways in which they were already permitted22.

  3. In terms of the open system or preselection (precalificación), it allows the exclusion of a preselected bidder when they don’t contribute to the performance of additional studies23.

  4. It authorises Bogotá, the districts and municipalities of special category that are department capitals, the special category departments and/or its decentralised entities to enter into these types of agreements within the final year of governance, additionally allowing the approval of compromising future budget allocations in said year, and for the period of duration of the respective project24.

  5. When the PPP comes from a private initiative, the project originator will assume in its totality the costs of structuring and of the evaluation of prefeasibility and feasibility stages25.

  6. It regulates the liquidation of the possible reciprocal benefits for the parties whenever the agreements terminate in advance26. Equally dispose the rules for the payment of investment costs and expenditures enforced or realised by a contractor, whenever the respective contract is declared absolutely null, or its termination is ordered with the occurrence of absolute nullity. Equally, dispose of the payment of a pecuniary penal clause of 5%, whenever it hasn’t already been agreed upon and in the case in which a contract is declared to be null. Finally, it established that, in relation with the liquidation of contracts before a declaration of nullity, the liquidation of the infrastructure concession agreements executed previous to the enforcement of Law 1508 of 2012 shall also be applicable.  

 

This document doesn’t constitute legal advice, but simply a general description of Law 1882 of 2018. If you want additional information regarding Law 1882 of 2018, please contact: 


 

  1. See Diario Oficial 50.477 of January 15, 2018
  2. Whereby it issues the General Contracting Statute of Public Administration (el Estatuto General de Contratación de la Administración Pública).
  3. Law 1882 of 2018. 1st Article. Sub-paragraphs 1 and 2.
  4. Law 1882 of 2018. 1st Article. Sub-paragraph 6.
  5. Law 1882 of 2018. 1st Article. Sub-paragraph 6.
  6. Law 1882 of 2018. 1st Article. Sub-paragraph 4.
  7. Law 1882 of 2018. 1st Article. Sub-paragraph 5.
  8. Law 1882 of 2018. 2nd Article, which amends article 53 of Law 80 of 1993, amended by law 1471 of 2011, article 82.
  9. Amended by Law 1474 of 2011, article 82.
  10. Amended by Law 1474 of 2011, article 82.
  11. Law 1882 of 2018. Article 4, which amends article 2 of Law 1150 of 2007.
  12. Law 1882 of 2018. Article 4, which amends article 2 of Law 1150 of 2007.
  13. Law 1882 of 2018. Article 4, which amends article 2 of Law 1150 of 2007.
  14. Law 1882 of 2018. Article 4, which amends article 2 of Law 1150 of 2007.
  15. Law 1882 of 2018. Article 4, which amends article 2 of Law 1150 of 2007.
  16. Law 1882 of 2018. Article 5, which amends article 5 of Law 1150 of 2007.
  17. Law 1882 of 2018. Article 10, which amends article 25 of Law 1682 of 2013.
  18. Law 1882 of 2018. Article 11, which amends article 27 of Law 1682 of 2013.
  19. Law 1882 of 2018. Article 10, which amends article 25 of Law 1682 of 2013
  20. Law 1882 of 2018. Article 13, which amends article 5 of Law 1508 of 2012.
  21. See article 5 of Law 1508 of 2012 that was found enforceable before the amendment of Law 1882 of 2018.
  22. Law 1882 of 2018. Article 13, which amends article 5 of Law 1508 of 2012.
  23. Law 1882 of 2018. Article 15, which amends article 10 of Law 1508 of 2012.
  24. Law 1882 of 2018. Article 416 which amends article 27 of Law 1508 of 2012.
  25. Law 1882 of 2018. Article 19.
  26. Law 1882 of 2018. Article 20.

 

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