Amendments to the National Administration Contracting Regime Regulation No. 1030/2016 and the Regulation of the Law on Financial Administration and Control Systems of the National Public Sector No. 1344/2007 are approved.

On October 26, Decree No. 820/2020 (hereinafter, the “Decree”) was published in the Official Gazette of the Nation. This decree approved amendments to the Regulations of the National Administration Procurement Regime No. 1030/2016 and also introduced amendments to the Regulations of the Law on Financial Administration and Control Systems of the National Public Sector No. 1344/2007.

The Decree will take effect five days after its publication and will apply to selection procedures authorized from that date.

Regulations of the National Administration Contracting Regime

The changes arise within the framework of the recent expansion of the Chief of Staff’s powers established in Ministry Law No. 22,520, to include the authority to “understand the design and execution of policies related to the purchasing and contracting system.”[1]

When contracting under the “Framework Agreement” modality is chosen, the Chief of Staff will be responsible for issuing the following administrative acts: (i) approval of the selection procedure; (ii) award; and (iii) declaration of the failure of the selection procedure. The Minister of Modernization was excluded from the authority to issue these acts.

Furthermore, amendments were made to the Annex to Article 9:

1. The Secretary General of the Presidency of the Nation’s authority to: (i) authorize the call for tenders and the selection of the procedure; (ii) approve the procedure and award the contract; (iii) approve the specifications and the multi-stage preselection; (iv) annul the procedure; (iv) declare it void, and finally, (v) declare it unsuccessful, in those bidding and public or private competition procedures or public auctions where the value exceeds one hundred thousand modules, or in those procedures via abbreviated competition and simple award, where the value exceeds sixty-five thousand modules, has been eliminated.
2. The highest authorities of the decentralized agencies were included as competent authorities to issue the following administrative acts: (i) approval of the procedure and award; (ii) declaration of failure, for bidding procedures and public or private competition or public auction, when the amount exceeds one hundred thousand modules, or in those procedures via abbreviated compulsory examination and simple award, when the amount exceeds sixty-five thousand modules.

Finally, a change was introduced in Article 29 of the Regulations regarding the modification of the module value. This value may be modified by an administrative decision issued by the Chief of Staff, with the prior intervention of the Ministry of Finance and the National Procurement Office, excluding the Ministry of Modernization.

The Decree also adjusted the value of the module, which currently stands at $3,000 (three thousand pesos). This directly impacts the estimated value of the contracts, which will be as follows:

1. Direct contracting: with a scale of up to 1,000 modules (one thousand), it will amount to $3,000,000 (three million pesos).
2. Private bidding or private competition, the corresponding amount will be calculated up to the value of 5,000 modules (five thousand), which results in the amount of $15,000,000 (fifteen million pesos).
3. Public bidding or public contest, the value of the estimated amount corresponds to more than 5,000 modules (five thousand), therefore, the value will rise to more than $15,000,000 (fifteen million pesos).

Regulations of the Law on Financial Administration and Control Systems of the National Public Sector

The Decree amended Section I of Article 6 of Regulation No. 1344. While the coordination of the systems comprising the National Public Sector Financial Administration is exercised jointly by the Secretariat of the Treasury and Finance, the Decree introduced a differentiation in responsibilities. On the one hand, the direction and supervision of the treasury, budget, and accounting systems will be exercised by the Secretariat of the Treasury. On the other hand, the direction and supervision of public credit will be the responsibility of the Secretariat of Finance. In both cases, the Secretariats will be assisted by the respective Undersecretariats that comprise them.

Following the abolition of the Government Secretaries by Decree No. 50/2019, Regulation No. 1344 was amended in its section b) of article 35. In line with the current Organizational Chart of the centralized Administration, the powers of the Government Secretaries to approve expenses were eliminated.

This report should not be considered as legal or any other type of advice by Allende & Pitch.

[1] Section 33, Article 16 of Law No. 22,520: “Understand the design and execution of policies related to public employment, management innovation, modernization of the National Public Administration, the purchasing and contracting regime, information technologies, telecommunications, audiovisual communication services and postal services.”