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The Key Aspects of the Project «Organic Law on Economic Emergency for the Recovery of Assets of Illicit Origin and Transparency in Public Procurement»: An Information and Opinion Analysis.
On 15 January 2024, President Daniel Noboa Azín presented a crucial project: the «Organic Law on Economic Emergency for the Recovery of Assets of Illicit Origin and Transparency in Public Procurement». This article provides an informative and opinion analysis of the reforms proposed to the Organic Law of the National Procurement System (LOSNCP), highlighting the following essential points.
Leading Role of the Financial Analysis Unit (UAFE) and the National Public Procurement Service (SERCOP)
A leading role is established in the Financial and Economic Analysis Unit (UAFE), in coordination with the National Procurement Service (SERCOP) to cross information from state suppliers and officials from public entities related to recruitment. Its objective is to provide items for asset laundering.
Procurement under Special Regime
In the area of public procurement under the Special Regime figure, specific recruitments will be permitted, adding:
Contracts of works, goods and services, including consulting, necessary for the internal and external security and defense of the State. Including detention centres of the National Social Rehabilitation System.
That is to say, if this Law is passed, the constructions of prisons or other security and defence centres planned by the President of the Republic are to be carried out by direct recruitment under the special regime.
It would be valuable for this issue to be further elaborated on the Regulations to be updated, as areas of internal and external security and defence are required to be accompanied by processes of «Compliance in public procurement».
In addition, there is a need to deepen the acquisitions of defence by the Ministry of Defence and the different military units, since they have so far managed processes «independent» and «Reserved» for their military acquisitions, showing that they have never been transparent, but we see that they have not been prepared with updated equipment for operational and tactical activities.
The leading role of public enterprises, supported by the Organic Law on Public Enterprises
Public enterprises will have the possibility of strengthening their partnership capacities, establishing strategic alliances, forming joint economy societies with public or private sectors both at the national and international levels. In addition, these companies may constitute subsidiaries, acquire actions and/or participations in national and foreign companies, and adopt any relevant associative figure as stipulated in articles 315 and 316 of the Constitution of the Republic.
It is essential to define precisely this issue in order to avoid possible abuses of public enterprises and their ‘Strategic Alliances’. In fact, the proposal to reform the LOSNCP puts a limitation to avoid the «triangulation» as follows: «Inter-administrative procurement shall not apply when the supplier public entity or company participates in association or consortium with a private sector supplier, regardless of the percentage of the participants.»
This regulatory approach seeks to mitigate risks and safeguard transparency in recruitment processes, learning from past experiences and establishing specific safeguards.
It is established that the pre-contractual phase of public procurement processes is an administrative procedure
This aspect is underlined because many public entities fail to comply with the Law on the Optimization and Efficiency of Administrative Procedures, complicating the fluidity needed at the pre-contractual stage in their institutions and in the interaction with suppliers.
Operating System Update USHUAY
Once qualified, the offers must be of public access. This implies that the SERCOP's technological operating system must be technologically expedited and updated to provide all the facilities that allow any citizen to see and corroborate the offer presented. We believe that this valid reform should be accompanied by sufficient economic support to update the obsolete technological operating system called USHUAY.
Digital Repository
The SERCOP should create a digital repository of total public access information and strengthen open data activities, as it had already done.
Citizen Observatory on Public Procurement
The creation of Citizen ' s Public Procurement Observatorys will be promoted, with the aim of developing independent diagnostics, reports or reports and technical criteria to promote, evaluate, monitor and monitor compliance with public procurement regulations and principles. They will also have the power to review, analyse and identify issues in public procurement and generate proposals.
Without a doubt the academy plays a key role in this issue, not only to study the dynamics of public procurement, its deviations, its best practices; but also to generate student participation processes, accompaniment in actions of denunciation and monitoring of public procurement processes, to provide citizen spaces of struggle for transparency in public procurement.
It is proposed to eliminate the requirement of the Report of Pertinence and Favorability of current Article 22.1 (2)
It is proposed within the procedure for obtaining the report of relevance and favourability Article 22.1 (2) of the LOSNCP, to remove the phrase "emergency or state of emergency". The Presidency of the Republic in coordination with Comptrollers shall define the amounts and procedures in which this report shall apply.
Implementation of the In Dubio Pro Managed Principle
Implementation of the principle «in dubio pro administered» in the process of validation of errors. This principle dictates that, in the light of doubts as to whether an offer should be submitted to be validated, the procuring entity shall opt for such a procedure. This will involve internal reforms of SERCOP to improve the times of convalidation.
Elimination of pre-trial and pre-contractual phase
The elimination of the entire preparatory and pre-contractual phase established by article 49 of the LOSNCP currently in force is provided.
For special procedures the new figure called «Engineering, Office and Construction»
To better understand this new public procurement figure, we could refer to the processes «Key in Hand», understanding this concept when the contractor is responsible for the design and construction of the work; performs all the work necessary for its commissioning, for an agreed price and at a given time. In some cases the execution of the complete work including equipment is delivered. This modality will be used for the contractual amounts of the quotation and tendering processes. Recruitment processes, folds and internationally accepted contract models may be used, with corresponding adjustments under warranty conditions. The minimum period between the provisional and final reception will be two (2) years.
Emergency Contracts Under Modality «Engineering, Office and Construction»
With regard to emergency recruitments, the possibility is opened that it is under the procedure «Engineering, Proceedings and Construction» I mean, «Wash in hand», being of an exceptional nature, being able to consolidate in a single contractor where necessary, the development of the complete, definitive and updated studies and designs, as well as the construction or rehabilitation services of a work and/or equipment and/or the provision of maintenance and/or other related services.
In works, the maximum time for emergency execution will be 210 days, counted from the subscription of the contract, unless it affects strategic sectors or public services, in which it will be up to 365 days".
Presidential Regulation of Special Procedures
The President of the Republic has the authority to regulate additional special procedures, such as the acquisition of air tickets or fuels.
Exemption of Contracts for Suppliers
The exemption from contracting with the procuring entity for suppliers participating in the procurement modalities provided for in article 56.1 and the final subparagraph of article 57.1 of this Act, i.e. those operating under the modality «key in hand».
Formalization of contracts through Public Scripture
It is provided that only contracts expressly provided for in the General Regulations of this Law shall be signed before the Public Notary.
Modifying contracts to amend cases of errors
With regard to the Modifying Contracts to amend cases of errors, the possibility of generating them is extended. Amendments to the initial contract may be signed, provided that there are unforeseen or properly motivated cases or techniques and it is proved that contractual execution has been difficult. This is done under the principle of good faith. It is important to note that these modification contracts will not be able to alter the object and scope of the contract, increase the price or the time limit, or correct voids at any time.
