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Public Procurement The Peruvian Experience

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Title: Public Procurement The Peruvian Experience


1
Public ProcurementThe Peruvian Experience
  • Dr. Gonzalo de la Cruz Salas
  • Administration Manager
  • National Registry of Identification and Civil
    Status
  • PerĂº

2
PREVIOUS LEGISLATION
Single Procurement Regulations (RUA) Single
Regulations for Biddings and Public Works
Contracts (RULCOP) General Regulations for
Consultancy Activities (REGAC)
R.U.A
RULCOP
REGAC
Advisory and Consultancy
Public Works Construction
Goods and Services
Government Procurement and Contracting Law
3
CURRENT PERUVIAN LEGISLATION
Ethics Free competition Nonpartisanship E
fficiency Accountability Economy Updated
technology Fairness
4
CURRENT PERUVIAN LEGISLATION
  • It provides for the types of Selection Procedures

In US Ddollars ()
Goods
Services
Public Works
Public Bidding
gt 132,353
gt 338,235
Open Request for Tenders
gt 58,824
TYPES OF PROCEDURES
Direct Contract Award
lt 132,353
lt 58,824
lt 338,235
Public
Selective
Awarding of Minor Contract
() Exchange rate S/. 3.40 per US Dollar
5
GROUNDS FOR EXEMPTION
Impending Shortage of Supplies
Emergency
Irreplaceable Goods or Services (Single
Supplier)
  • Technical-legal report
  • Establishment of responsibility
  • Resolution by the maximum State authority

Other grounds for exemption
  • Classified military procurement
  • Public services
  • Contracting between State entities
  • Sole sourcing

6
ANNUAL PROCUREMENT AND CONTRACTING PLAN
  • Management instrument, whereby contracting and
    procurement procedures are scheduled for a budget
    year, in order to meet the needs of the Entity,
    according to the sectoral strategic purposes of
    the State Entity and its annual budget so as to
    fulfull its institutional goals.

7
ANNUAL PROCUREMENT AND CONTRACTING PLAN
PURPOSE
  • Schedule, disseminate and assess the procurement
    of goods, services, consultancy and public works
    by State Entities.

FEATURES
  • Public nature.
  • Formal nature in terms of its approval and
    amendment through a document issued by the
    competent authority.
  • Compulsory for all entities subject to the
    Government Procurement and Contracting Law.
  • Comprehensive for it contains all procurement and
    contracting procedures to be performed by the
    Entity.

8
PROCUREMENT COMMITTEES
SPECIAL COMMITTEE
  • A professional body responsible for conducting
    and executing a Public Bidding or Open Request
    for Tenders.
  • Prepares bidding terms and conditions, answers
    inquiries and observations, assesses tenders, and
    awards contracts.
  • Comprised of three (3) or five (5) members with
    an equal number of substitutes.

STANDING COMMITTEE
  • Designated for the Procurement of Goods, Services
    or Public Works in the case of
  • Public Direct Contract Awarding
  • Selective Direct Contract Awarding
  • Awarding of Minor Contracts (not exceeding a
    certain amount - equal to or below the 1/10th
    portion of the maximum limit established in the
    Annual Budget Law).

9
ELECTRONIC SYSTEM FOR GOVERNMENT PROCUREMENT AND
CONTRACTING (SEACE)
  • A comprehensive system based on the compulsory
    use of Internet between State Entities.
  • Allows transparency, and optimizes, updates and
    yield savings in public contracting procedures.

State Entities
Register Annual Plans and procedures called.
Free access to information via Internet.
Suppliers and Public in General
Performance
Prompt oversight and timely follow-up of
selection procedures.
Control Entities
10
CURRENT PERUVIAN LEGISLATION
PROMOTION OF NATIONAL PRODUCTION
  • In all goods procurement and contract awarding
    procedures, an additional 20 shall be added to
    the sum of the technical and economic rating
    obtained by the bidders that have manufactured
    their goods or have rendered services within the
    national territory. A sworn statement shall be
    duly submitted.

11
CURRENT PERUVIAN LEGISLATION
  • Should a tie arise between or among two or more
    bidders in the technical and economic rating, the
    contract award procedure shall be carried out as
    follows
  • Micro and small-sized enterprises shall be given
    preference in the case of direct contract
    awarding and awarding of minor contracts.
  • The contract shall be awarded to the bidder that
    obtained the highest score of economic tender in
    the case of goods and public works, and the
    highest score of technical tender in the case of
    services.
  • The contract shall be awarded by random draw in
    the same act.

12
ENTREPRENEURIAL INTEREST
The entrepreneurial interest shows the following
trends
  • Micro and Small-Sized Enterprises (MYPES) prove
    to be more interested in procedures for selective
    direct contract awarding and awarding of minor
    contracts not exceeding certain amount.
  • That is to say, in 99 of the contracts that
    account for 40 of the expenses.
  • Medium and Large-Sized Enterprises prove to be
    more interested in procedures for public direct
    contract awarding, open request for tenders and
    public bidding.
  • That is to say, in 1 of the contracts that
    account, nevertheless, for 60 of the expenses.

13
SPECIAL PROCUREMENT METHODS
Corporate Procurement
Reverse Auction
Framework Agreement for Prices
14
SPECIAL PROCUREMENT METHODS
  • State Entities, by agreement or legal ruling,
    gather together in order to jointly procure or
    contract goods and/or services.

PURPOSE
  • Decrease transaction costs and enjoy the
    advantages of the economy of scale.

15
SPECIAL PROCUREMENT METHODS
ADVANTAGES
  • Uniformity of goods and services contracted by
    the Government.
  • Easier ovesight of procedures.
  • Increased added value to public funds.
  • Obtaining of better prices and additional
    benefits.
  • Greater incentive for manufacturers involvement.
  • Appropriate streamlining of resources.

16
SPECIAL PROCUREMENT METHODS
CASE 1 Procurement of motor vehicles by the
FONAFE (National Fund for the States
Entrepreneurial Activity)
PARTICIPANTS
METHOD
GOODS
REFERENTIAL AMOUNT
80 trucks
13 State-owned firms
Facultative, Corporate Procurement
US 1,844,300
Advantages obtained
US 147,000 Price improvement
US 467,500 Savings
US 320,000 Additional benefits
17
SPECIAL PROCUREMENT METHODS
CASE 2 Procurement of office supplies and others
by the PCM (Prime Ministers Office)
PARTICIPANTES
MODALIDAD
BIENES
VALOR REFERENCIAL
PARTICIPANTS
METHOD
GOODS
REFERENTIAL AMOUNT
Paper, ink, toner, files, CDs, etc.
16 Empresas Estatales
Compra Corporativa Facultativa
US 1,800,000 aprox.
16 State-owned firms
Facultative, Corporate Procurement
Ventajas obtenidas
Advantages obtained
US 130,000 Price improvement
US 200,000 Estimated savings
US 70,000 Additional benefits
18
SPECIAL PROCUREMENT METHODS
  • State Entities procure common goods through an
    open bid, where the tender that offers the lowest
    price will be the successful bidder it may be
    electronic or may require attendance of the
    participants, and it may apply to procedures for
    public bidding, public direct awarding, selective
    direct awarding and awarding of minor contracts
    not exceeding certain amount (equal to or below
    the 1/10th Portion of the Maximum Limit
    Established in the Annual Budget Law)

ADVANTAGES
  • No waste of time or money, greater
    accountability.

19
SPECIAL PROCUREMENT METHODS
PROCEDURE
Invitation to bidders
Contract Award
8 business days min.
Bidding
Submission of tenders
Registration of participants
OFFICIAL ACT
20
SPECIAL PROCUREMENT METHODS
  • Direct contracting of goods and services by means
    of a catalogue (virtual supermarket) where
    determined conditions and prices are previously
    established.

AGREEMENT MANAGER
  • Control Council for Government Procurement and
    Contracting (CONSUCODE)
  • This body manages the definition and supervision
    of all related procedures, as well as the
    handling and registration of the Commitment
    Accords.
  • It constitutes a special committee, with a
    representative of the Civil Society.

21
SPECIAL PROCUREMENT METHODS
WHEN IT IS USED
  • If it is necessary to subscribe frequent
    contracts due to the features of the goods or
    services.
  • Periodic supply of goods with partial deliveries
    is more advisable.
  • The nature of the object does not make it
    possible to previously define or quantify the
    demand.
  • It is more convenient for dealing with more than
    one entity.

22
ESTIMATED VALUE OF PUBLIC PROCUREMENT
  • The Governments annual average expenses amount
    to 14 billion Nuevos Soles or 4 billion US
    Dollars in the procurement of goods and service
    contracting.
  • This figure accounts for
  • 40 of the State budget.
  • 1.5 times all the State payroll.
  • 75 of the funds collected by the Tax Authority.

23
THE GOVERNMENT IS THE BIGGEST CONTRACTOR
In Peru contracts are entered into for around 14
billion Nuevos Soles each year (4 billion US
Dollars)
Public Works
10
Goods
Services
53
37
2706 State Entities execute contracts
24
NUMBER OF CONTRACTS
CENTER
NORTHEAST
Contracts 3.45
Contracts10.52
METROPOLITAN LIMA
SOUTH
Contracts 76.97
Contracts 9.05
Total Selection Procedures 850,000Total
Estimated Amount 14 Billion Nuevos Soles or 4
Billion US Dollars
25
PUBLIC PROCUREMENT CONTROL
  • There are around 2,400 State entities, which have
    some 120,000 suppliers.
  • Each year, the government machinery enters into
    70,000 monthly contracts on average, i.e. 2,300
    daily transactions for the purchasing of goods
    and services. Against these figures we have the
    following
  • The Comptroller Generals Office (CGR) conducted
    931 control actions and activities of all kinds.
  • For its part, CONSUCODE processes 802 complaints
    on average.

26
Should the CGR and CONSUCODE devote all their
efforts to supervise public contracting
procedures, the almost 2,500 actions they would
jointly conduct would not cover all contracting
acts performed by the Government in one single
day of the year.
PUBLIC PROCUREMENT CONTROL
27
PROCUREMENT AND CONTRACTING CONTROL
BY
PERUVIAN COMPTROLLER GENERALS OFFICE Governing
Body
Regulates and provides guidelines on control
procedures, and carries out external supervision.
NATIONAL CONTROL SYSTEM
INSTITUTIONAL CONTROL BODY (O.C.I)
Execute control subject to guidelines and
policies established by the Governing Body.
AUDITING FIRMS
Comprised of institutions representatives with
the purpose of following-up on the fulfillment of
obligations, committments, competences and
duties of State entities. It monitors the
procedures through SEACE.
CITIZENS OVERSIGHT COMMITTEE
28
PROCUREMENT AND CONTRACTING CONTROL
CONTROL METHODS
PREVIOUS INTERNAL CONTROL
Exclusive responsibility of public officers and
civil servants as part of the duties inherent to
their positions.
SUBSEQUENT INTERNAL CONTROL
Carried out by the responsible parties or
executing officers as an activity of the
administrative cycle - OCI
SUBSEQUET EXTERNAL CONTROL
Responsibility of the Peruvian Comptroller
Generals Office, or any other body appointed by
the Governing Body.
29
CHALLENGES FOR THE FUTURE
  • Less complex procedures and document handling.
  • Common terminology at regional level.
  • Streamlining of transactions
  • Seek greater participation of citizens in
    accountability of procedures.

30
CHALLENGES FOR THE FUTURE
  • Systematization of suppliers in a regional
    integrated system (Software).
  • Seek and optimize common legal frameworks at
    regional level and be able to manage a common
    technology.
  • Active exchange of documents relating to
    procurement and contracting procedures.
  • Incorporation of an Association that brings
    together all institutions responsible for
    procurements and contracts throughout the
    continent in order to make viable the challenges
    mentioned above.
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