Public-Private Participation Procurement Law
On November 16, 2016 the National Congress passed the Public-Private Participation Procurement Law (hereinafter, the “Law”), as an alternative for procurement of public works.

Public-private participation contracts are those concluded between the agencies within the national public sector, as contractors, and private or public entities, as contracting parties, with the objective of developing infrastructure projects, housing, services, productive investment, applied research and/or technological innovation areas.

The object of said projects should be one or more of the following activities of design, construction, improvements, maintenance, equipment and goods supply, exploitation or operation and financing. The outlays and commitments undertaken in these projects must be consistent with the financial programming of the Government.

The Law establishes that procurement specifications could allow for the incorporation of a company with a specific purpose, of trusts and other kind of vehicles or partnerships. The National Executive will be allowed to act as contractor or as a party to the contractor group and incorporate corporations and/or financial trusts, as it may correspond.

The contractor shall be selected through a public biding or contest, domestic or international, depending on the project’s complexity. Before calling for the public biding or contest, the authorities must issue a report regarding the following items of the project: feasibility and procurement election, fiscal impact, financial and budget effect of the contract, the impact on employment generation and in the domestic industry generally, and the socio-environmental impact. The report shall also include a cost-benefit and a risk evaluation.

In cases where the complexity or the amount of the project justifies it, a transparent consultation and exchange of opinions procedure between the contractor and the prequalified stakeholders could be established.

The awarding should be granted on the offer that provides the most convenience for the public interest.

Payment commitments assumed can be settled and/or guaranteed through specific allocation or transfer of resources or public income, the settlement of trusts or the use of the existing ones, or the granting of bails, endorsements and guarantees.

The Law instructed the National Executive to create a public-private participation unit to oversee the contracts established by the Law. Likewise, a Bicameral Commission of Public-Private Participation Procurement, composed by members of the National Congress, was created, whose mission will be to follow-up the projects devolved under this method.