Law 41, which was passed and published in the Official Gazette last week, changed the rules of the game for two state institutions: the General Office of Public Contracts and the Administrative Tribunal for Public Contracts.
"They also strengthened the shape of bidding for framework agreements, which have been very successful and have allowed purchases of more than 15 million dollars just in 2008," said the head of general contracting, Edilberto Ruiz Miró.
"Now we can extend the application of these actions for up to two years, and then for two years more."
It will be easier for government officials to buy items like airplane tickets and other items that have required a lot of red tape in the past.
The government may not use more than 20% of its investment budget for projects undertaken under this modality.
When projects are implemented using the turnkey model, contractors are responsible for financing, which the state then pays for upon completion of the work. The current limit for this type of contracting was introduced at the request of the rating agencies.
The bill to be approved by congress seeks to make procurement easier for the government by reducing tender timescale requirements, among other reforms.
Economy Minister, Alberto Vallarino, explains that the aim is to speed up the purchase of goods and services by the Panamanian government. However, businesses are concerned that this may damage the principal of competitive tender and that it encourages direct purchase.
Nicaraguan opposition legislators and the private sector organization, Cosep, are proposing a reform in the law that governs government contracts.
The proposal challenges a government plan to change the law. The opposition says the government plan will merely encourage more cronyism in the award of contracts. "What we want is a level playing field," an opposition spokesman said.
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