Generally, all Government-owned Entities are subject to the Procurement Statute. Such term is defined broadly and includes the Nation and national level agencies, the territorial subdivisions such as departments, municipalities and districts and their agencies. There are several decentralized entities both at the national and local level which are specialized by the scope of their duties but are also owned or controlled by other national or local entities which are subject to provisions of the Procurement Statue as well. Mainly, the following entities are subject to procurement laws:

• Entities from the national order
• Entities from the departmental order
• Entities from the municipal order
• Provinces
• Capital district
• Special districts
• Metropolitan areas
• Municipalities associations
• Native territories
• Municipalities
• Public establishments
• Industrial and commercial state-owned corporations
• Companies majority-owned by the nation or any public entities
• Indirect decentralized corporations
• All other legal entities majorly owned by the state

However, some specialized entities, either because of their special regimes of organization or because of the application of other specific statutes, are wholly or partially exempted from observing the Public Procurement Statute. Nonetheless, even though these entities are not required to apply the Public Procurement Statute, their contracts shall still uphold the general principles determined in the Public Procurement Statute.

Ecopetrol, for example, is a corporation and a national level Government- owned Entity that is subject to private contractual regime. Additionally, some specialized and decentralized entities are subject to the Public Procurement Statute unless they undertake activities in competition with private players. These entities include the so-called industrial and commercial establishments of the State, or corporations in which Government- owned Entities have participation greater than 50%. Public Utilities companies are not subject to statutory procurement laws either.

As a general rule, when purchasing goods or retaining services, private entities are never subject to the Public Procurement Statute. Only when they intend to act as supplier of goods or service providers to a Government-owned Entity which is subject to the Procurement Statute, private entities must follow the Public Procurement Statute.

Co-operations between public bodies are not exempted from the Public Procurement Law. However, they are not subject to the general rule on public tender. With the exception of insurance contracts, contracts between public entities are not subject to a public bid and may be contracted directly.

Contracts between public entities through direct contracting may only proceed when the contract is related to the undertaking partie's corporate purpose. Nonetheless, Co-operations between public entities must abide by the objective selection, public interest, economic and transparency principles detailed in the Public Procurement Statute.

In principle, the procedure performed prior to the selection of a contractor with a Government-owned Entity subject to the Public Procurement Statute must comply with such statute. However, as a general rule, the contents of the agreement, rather than the procedure to select a contractor, are subject to the applicable private commercial or civil rules.

Therefore, all the types of contracts foreseen in private commercial law are covered by the Procurement Statute as long as one of the parties is a Government-owned Entity subject to the Procurement Statute.

The Procurement Statute specifically states that it directly regulates the following contracts:

• civil works (construction) contracts;
• concession contracts;
• public trusts; and
• public credit contracts.

As a general rule, state contracts may be modified when necessary to achieve their purpose. Amendments or changes to a contract must be done in writing and shall be agreed upon by following the same solemnities that were required when signing the original contract (public contracts and their amendments can only be perfected in writing).

The modification may be agreed upon between the parties, or if no agreement is reached, it may be unilaterally imposed by the administration when deemed necessary.

Changes to contract must be exceptional under the principles of planning and legal certainty. For this reason, modifications must obey a real and certain cause, and must be in accordance with the purpose originally being served by the contract. Therefore, changes to a contract can not alter its essence, since this would entail the undertaking of a new contract, which would require a new procurement procedure.

Price and time frames are not necessarily of the essence of the contract, and therefore may be modified, unless said modification is excessive (e.g. a 50% increase in price), which would alter the essence of the contract. Additional rules may apply for specific changes, such as transfers or assignment to new contractors, which are possible if the public entity expressly agrees to the change.

No additional or special conditions are set forth for framework agreements. Therefore theses type of contracts must comply with the Public Procurement Statute. Contractors who have been awarded a contract, may sub contract or hire third parties without a selection proceeding in order to help them perform the contract that has been awarded to them.

Public-private partnerships are regulated by Law 1508 of 2012, which determine the scope and reach of PPPs. Nonetheless, PPP projects of public initiative will proceed under public tender, as indicated by the Public Procurement Statute. Additional requirements may apply as stated by Law 1508 of 2012 and Decree 1467 of 2012.

Private entities may structure and submit confidential proposals, which will be subjected to the competent authority´s consideration. However, once the feasibility of the project is determined, the contractor shall be selected through public tender if the initiator of the project considers that public resources are necessary to fund the project.

On the other hand, if the originator of the project considers that it does not require public resources for its financing, then the contractor will be chosen by means of an abbreviated selection proceeding with prequalification.

Concessions are considered PPP's under law 1508 of 2012 and therefore, are subject to selection proceedings in accordance to law 1508 of 2012 and the Public Procurement Statute when applicable. Any concessions that were awarded prior to law 1508 of 2012, will be regulated in accordance to the law that was in effect at the time of its undertaking.

Yes. Colombian competition and criminal laws establish measures in order to assure that procurement contracting takes place under normal and unaltered competition procedures. In this sense, the Anticorruption Statute enacted by Law 1474 of 2011 provides that the act of entering into an agreement in order to unlawfully alter the procurement procedure in a public bid, public auction, abbreviated selection or merits qualification is considered a crime, punishable with imprisonment from 6 to 12 years and penalties between 200 minimum monthly wages (approximately US$66,000) and 1,000 minimum monthly wages (approximately US$330,000).

Additionally, the Procurement Statute sets forth strict limits to the use of trust funds by the Government-owned Entities to avoid the use of these funds to skip the selection procedures set forth by the law.