Growing Rejection of the New Contracting Law

In Guatemala, the Chambers of Industry, Construction, Commerce and Agriculture agree that the reforms to the State Contracting Law constitute a step backwards in terms of transparency and open the door to greater opacity in public spending.

Thursday, May 20, 2021

In April 2021, the deputies approved the amendments to Decree 57-92, which among other things allow for an increase in the amounts of direct and low value purchases.

According to the Legislative, the new regulation favors the timely execution of state projects, without forgetting the standards of probity, transparency and quality of public spending, a mechanism that translates into new projects in health, education, road infrastructure, drinking water and sanitation at the local level.

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After analyzing the approved reforms, the business sector agrees that the reforms constitute a step backwards in terms of transparency and have united to ask President Giammattei to veto what was endorsed by Congress.

Through a press release issued by the Chamber of Commerce and the Chamber of Agriculture on May 12, the business sector requests President Alejandro Giammattei "to veto Decree 4-2021 to the Law of State Contracting in accordance with the provisions of article 178 of the Political Constitution of the Republic."

Eduardo Giron, president of the Chamber of Industry of Guatemala (CIG), told Prensalibre.com that "... the increase in the ceilings and the discretion with which officials may make purchases within the amounts allowed for this modality must be accompanied by a strengthening of the capacities of the entities in charge of oversight, to avoid overvaluation and corruption in the purchasing processes."

By means of a statement dated May 19, the Guatemalan Chamber of Construction (CGC) also stated its position on these modifications. In the document the guild indicated that "... instead of contributing to strengthen transparency and probity in public procurement processes, they open the door to greater opacity in public spending."

"A deep and technical discussion of the procurement system should be promoted, which should not be limited to the reform of the Contracting Law. It is important to review regulatory frameworks at the level of regulations, public policies, institutional frameworks and management capacity, since there are several elements involved in a procurement system," said the CGC.

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