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
• Perú

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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
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CURRENT PERUVIAN LEGISLATION
Ethics Free competition Nonpartisanship E
fficiency Accountability Economy Updated
technology Fairness
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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
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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

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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.

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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.

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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).

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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
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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.

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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.

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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.

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SPECIAL PROCUREMENT METHODS
Corporate Procurement
Reverse Auction
Framework Agreement for Prices
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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.

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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.

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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
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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
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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.

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SPECIAL PROCUREMENT METHODS
PROCEDURE
Invitation to bidders
Contract Award
8 business days min.
Bidding
Submission of tenders
Registration of participants
OFFICIAL ACT
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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.

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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.

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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.

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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
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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
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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.

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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
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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
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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.
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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.

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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.