A new law initiative pretends to forbid the participation of companies that have been convicted in other countries for crimes against the public administration in contracts with the State.
The bill that was presented on January 23, requests the modification of texts in the legal framework that regulate Panamanian public procurement, to avoid awarding contracts to companies that are accused of acts of corruption in Panama and also abroad.
President Varela signaled the need to include medicine purchases in the law, among other objections, and did not make mention of the debarment of companies with foreign convictions for corruption.
The main objection put forward by various social groups to the new law on state procurement is that it does not establish the exclusion of businesses convicted abroad for corruption from being state providers, andthese groups have asked President Varela to veto the law for that reason .The president vetoed 8 articles of the law, but did not say anything in his observations about that particular topic.
The bill to be discussed in the Assembly proposes removing the changes that were made during the Martinelli administration that were intended to streamline and simplify procurement processes.
The draft law which will be discussed by the National Assembly in a first debate, proposes eliminating, among other things, procedures for abbreviated and best value procurements, and increasing funds for appeals.
The construction union is calling for the Public Procurement Act to be amended to give more participation to domestic firms, generating more transparency and eliminating cronyism and corruption in government procurements.
The Panamanian Chamber of Construction (CAPAC), resents the number of works that have been granted to foreign companies at the expense of local businesses.
An initiative in the Legislature is attempting to remove modifications made to the law during the Martinelli administration, which currently allows more flexible processes, such as abbreviated tenders.
Since 2009, Law 22 of 2006 on public procurement has been amended nine times, which is why an attempt is being made to go "back to basics" of the legislation by removing some of the changes.
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 reform to regulate the procurement process undertaken by the Government becomes effective from today, May 12, 2011.
Law number 22, which regulates the country’s procurement process, has been reformed and signed by President Martinelli, and will take effect from this week.
As part of the changes, the Ministry of Economy and Finance will have the authority to approve public procurements of less than $300 thousand, following an exceptional process. Contracts above this threshold but less than $3 million, will be assessed by the National Economic Council.
To adjust to the current conditions of the global advertising and communications market, authorities seek to enable direct purchases to foreign companies for up to $800.000.
Martinelli keeps managing the country in a very business-like way, now looking to loft the restrictions imposed by the public purchases law to hire advertising services abroad. The Panamanian Tourism Authority (ATP) will be the agency that will benefit the most with the new regulations.
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.
Panama's National Assembly has passed a law decreasing the transparency of public spending.
The new Law of Public Contracts allows the Executive Branch to contract consulting services of up to 300,000 dollars without going through the bidding process.
The legislation also includes a paragraph which includes in the category of "urgent local interest or social benefit" all energy and water projects.
It's getting easier for government to buy public goods.
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.