On 15January 2018, Colombia’s Congress issued Law 1,882of 2018, which added, modified and set provisions to strength the government procurement regime, the infrastructure law and other provisions. The Law addressed matters that had not been addressed in the past and modified previous regulations. Law 1,882of 2018regulates the following matters:
Structure of the public tenders carried out to select contractors for public works contracts
The Law states that during the bidding process for public works contracts, a bid proposal must be divided into two envelopes: one containing all of the documents that prove that the bidder and its proposal fulfil the minimum requirements set by the public entity, and a second with the economic proposal.
The envelope with the economic proposal is only opened during the awarding hearing.
During the awarding hearing the formula to evaluate the economic proposals is chosen through the aleatory mechanism established in the tender documents, the economic proposal envelopes are unsealed, and the order of eligibility is revealed.
Liability of the advisers, owner’s representatives and consultants
Advisers, owner’s representatives and external consultants will be civilly, fiscally, criminally and disciplinarily liable for the damages caused to the entities as a result of their acts and omissions; particularly, those related to the consulting, advisory or auditing activities they perform as part of the contracts executed with those public entities.
Mandatory standard documents for public bids (pliegos tipo)
Within the six months following the enactment of Law 1,882, the government must issue the standard bidding documents for proposals in public procurement processes, particularly for:
- public works;
- supervisors (owner’s representatives) for public works;
- supervisors (owner’s representatives) for consulting on studies and designs of public works; and
- consulting on engineering for public works.
In those documents, the government shall establish identical minimum requirements, and the technical and economic criteria to select its contractors, depending on the amount of the contracts involved.
This is a new development in Colombian legislation, as public tender documents have always been different, despite the fact that they share the same principles and a similar structure.
An offer cannot be rejected if it is missing some or all of the documents that do not count towards their awarding score.
An offer can be rejected when the bidder does not submit the information requested by the entity within the period of time provided to do so, or the bid bond is not submitted along with the offer.
The Law also states that when evaluating the bidder’s experience, the entity has to take into account its experience in performing privatecontracts.
There is no need for the public entity to have the available budget before publishing tender documents. Before this Law was enacted, it was mandatory to have the available budget when the tender documents were published.
PPPs encumbrances, attachments, liens, taxes, public utilities, appreciation, property management, early termination and absolutenullity
Acquisition of real estate in transportation infrastructure projects
- When acquiring real estate needed for the project the registered owner and their determined or undetermined heirs are notified of the offer to buy the land.
- The acquiring entity will issue the expropriation resolution, but will not have to make a purchase offer, when the registered owner has passed away and if any of the registered owners are included in money laundering or financing terrorism lists.
- The deadline to pay is 90days after a purchase agreement has been executed. If the term expires and the payment is not made, the seller can initiate a collection claim.
- Law 1,882of 2018provides a voluntary intervention permit. The regular possessor or the determined heirs of a real estate property, by means of a written document, can grant the governmental entity a voluntary intervention permit over the real estate property subject to expropriation.
- Real estate rights over real estate properties that are not required in order to provide the contracted service may be considered as part of the concessionaire’s compensation.
- The concessionaire and the governmental entity can agree that the concessionaire will receive compensation for the activities related to the operation and maintenance of the infrastructure. The latter applies to PPPs in which the government hands to the private investor an existing infrastructure in working condition. Previously, the Law only referred to a compensation for the costs of operation and maintenance and not for the activities related to the operation and maintenance.
- The PPP bids can use a pre-qualification system to select contractors, subject to regulation. This is a list of potential bidders. The regulation can provide that a potential bidder can be excluded from the bidding process if the bidder does not participate in the performance of additional studies when they are necessary.
- During the past year of government, PPP contracts cannot be executed unless they are entered into by a capital district, that is districts or municipalities of a special category that are department capitals or their decentralised entities.
- Originators of PPPs of private initiative will assume all the costs regarding the project’s assembly, including the costs originated during the pre-feasibility and feasibility stages.
- PPP contracts will include a clause that sets the mathematical formula that will determine the reciprocal benefits that the parties will be entitled to in case of an early termination - either by mutual agreement or a unilateral decision. This type of clause did not exist before the Law was enacted.
- If the PPP contract terminates because it is declared null and void, the contract’s liquidation must recognise the updated value of the costs, investments and expenditures incurred by the contractor. It will include interest, minus the payments and retributions (payment or compensation a contractor receives for investing, maintenance and operation costs, and the cost of capital when executing a PPP contract) received by the contractor, corresponding to the performance of the contract. This provision also applies to the contracts executed before Law 1,508of 2012was enacted. This type of clause did not exist before the Law was enacted.
- The governmental entity that executes the PPP contract is entitled to receive a payment from the contractor, equivalent to the penalty clause (if it was not agreed, the amount will be 5per cent over the value of the contract). Payment of the penalty clause will apply if the concessionaire, or any of its members, is responsible for the conduct that led to the declaration of absolute nullity of the agreement or there was a wilful misconduct in the execution of the crime or the administrative infraction that caused the declaration of the absolute nullity of the contract.
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