Amendments to Law 22 on Public Procurement

By. Magter. Jindriska Barakat – Lawyer and Commercial Consultant – Former Deputy Director of the General Directorate of Public Procurement of Panama

The Public Procurement Legislation of the Republic of Panama has been modified over the last 15 years in order to modernize the Procurement system, make it more transparent and efficient. This year, through Law 153 of May 8, 2020, new modifications are made to Law No. 22 of 2006, which deserve to be cited, so that our readers and clients are aware of the aforementioned, which entered to take effect in the month of September of this year, and so we update ourselves on the various Contractor Selection procedures. On this occasion, we will analyze Article 1, where numeral 33 was repealed and numerals 8, 20, 31, 32, 38, 42, 43, 54 have been modified; as well as the additions of numerals 57 and 58 of article 2 of Law 22 of 2006.

Let's explain the changes of each of these numerals:

Numeral 8, modifies the term of Electronic Catalog of Products and Services, by the term of Virtual Store, eliminating from this Showcase, the works that were previously included in the Catalogs of the Framework Agreement.

In numeral 20, a complete modification arises, by virtue that it will no longer refer to the definition of Performance Bond and, when the definition of the Framework Agreements is given, the regulation of Low Complexity Level Works is eliminated, within of the showcase. Numeral 31 would no longer define the Electronic Certificate. In this modification, the Framework Agreement Bidding is defined, and everything related to the execution of works with a low level of complexity, an economic cap of B/.250,000.00 and the definition of the level of complexity are eliminated. Numeral 32 used to refer to purchase orders, now it will refer to Bidding for Best Value, and the economic limit is increased from B/.100,000.00 to B/.500,000.00. Numeral 38 will define the Reference Price and it will be established that before the public act is held, the entities must establish the reference price and the General Directorate of Public Procurement is granted the power to require the bidding entity to indicate as structured the calculation to define the reference price, so that there is better control when entities establish reference prices. Numeral 42 adheres to the Claim Action, the possibility that the proponent can initiate a process, when the entity has rejected all the proposals. This numeral would be forcing the entity to justify in due form when all the proposals presented are rejected and in turn grants the right to the proponents who feel affected, to raise their claim before the General Directorate of Public Procurement.

Numeral 43 enables the Appeal against the Resolution that disqualifies the successful bidders, if they refuse to sign the Contract, opening the bidders to appeal and decide not to sign a contract of a Tender where they have benefited, and their reasons. They must support it in said writing. Numeral 54 modifies the functions of the Superior Court of Public Procurement, where new functions are granted to guarantee that the Appeal Resources are complied with. In the same way, new functions are granted in terms of Appeals against Resolutions of disqualification of companies on the refusal to sign contracts, on sanctions against public officials for contracting issues, on fines for delay in deliveries by the contractor, In the same way, they will begin to analyze unresolved Claim actions in the General Directorate of Public Procurement within the term established by law and may also impose fines against public servants, for not complying with decisions. Then we have the two new numerals that are added to this article and the repeal of numeral 33 that referred to the Advance Payment of Works, which is a way of forcing the Contractors that compete, to have economic solvency to comply with the Procedures of Selection of Contractors, in which they have decided to participate. Numeral 57 establishes for the first time the Claim Action Bond, through which it would be guaranteed that there is no delay in the processes and possible damages arising from these claim actions can be compensated.

Finally, with numeral 58, it is possible to define Multidimensional Poverty and this will serve to raise bidding processes based on this important concept introduced by the United Nations Development Program (UNDP) and continue social projects, to help satisfy the needs of people who suffer deficiencies in the dimensions of education, health, work, social security, housing and standard of living in general. We are of the opinion that with the modifications approved in article 1 of Law 153 of May 8, 2020, the terms of the Glossary have been modernized, with the intention that there is clarity in many of the Contracting procedures carried out by entities. of the Panamanian State.