2. Application of the Statutory Procurement Laws
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2. Application of the Statutory Procurement Laws Start Comparison
a. Which public agencies are covered by the laws?

Within the scope of the LCE are the national government and its departments and offices, the regional governments and their departments and offices, the local governments and their departments and offices. Additionally, the Legislative Branch, the Judicial Branch, the Autonomous Constitutional Bodies, public universities, the Armed Forces, the Peruvian National Police, government companies, as well as other public organizations, funds, agencies and all institutions that are subject to the Public Debt Law and the cooperation agreements signed between Peruvian entities or different governments are covered by the laws of public procurement.

b. Which private entities are covered by the laws?

 

 

The laws of public procurement generally refers to public entities. However, the procurement framework also covers funds wholly or partly constituted by private funds.

c. Are co-operations between contracting authorities exempted from public procurement law? If so, what are the conditions for the exemption?

As an exception, public procurement law is not applicable in the following cases:

  • Banking and financial contracts resulting from a financial service, including all services incidental or auxiliary to a service of a financial nature, except for insurance contracts and leasing.
  • Procurements made by bodies of the Foreign Service of the Republic, exclusively for their operations and management, outside of Peru.
  • Procurements made by the Ministry of Foreign Affairs aimed to perform the broadcast of the induction into office, international summits, and related side events held in Peru, which have previously been declared to be of national importance, involving the participation of Chiefs of State, government leaders as well as high-level officers and commissioners, provided that such procurements are within the standards set forth by international treaties or other international commitments.
  • The procurement of public notaries to perform duties provided in the public procurement framework.
  • Services provided by conciliators, arbitrators, conciliation centers, arbitral institutions, members or contracting authorities of the Dispute Resolution Board, other services arising from the conciliatory or arbitral function and other means of dispute settlement provided for within the public procurement framework for the contract execution stage.
  • Procurements made in accordance with the requirements and specific procedures of an international organization, States or cooperating entities, provided that they come from transactions of foreign debt and/or donations related to these transactions.
  • Service agreements signed with the chairs of boards of directors, who perform full-time roles in the State-owned Enterprises or Entities.
  • Purchases of goods performed by Entities through public tender, in accordance with the pertinent rules.
  • Entities comprised of public and private funds (Legislative Decree N.° 1224 and Legislative Decree N.° 674)

Also, as an exception, it is possible to exempt certain government entities from the scope of application of the LCE if and only if said exemption is stated by law. Currently, the LCE exempts the following public entities from its scope of application: the Private Investment Promotion Agency (Proinversión), the government oil company (Petróleos del Perú S.A.), the government company of shipbuilding and metalworking industry (SISA Peru), and the Cajas de Ahorro y Crédito.

d. Which types of contracts are covered?

The LCE applies to procurement contracts which are used to obtain goods, services and works, assuming payment of the price or of the corresponding remunerations with public funds and other obligations derived from the contracting party.

e. How are changes to an existing contract dealt with? Do changes require a new procurement procedure?

The LCE regulates the cases in which extension of the contract term or modification of the contract proceeds:

  • Extension of the contract period: the term of the contract can be extended (i) when an addition is approved or (ii) because of delays of the execution of the contract not attributable to the contractor.
  • Modification of the contractual position: the contractor can transfer its rights on the contract due to a transfer of ownership of the assets that are leased to the entities; when mergers or splits occur; or when a law expressly permits.
  • Contract Addendum: the parties may agree on contractual addendum that are not related to the extension of time or additional works, provided that the following conditions are met: (i) the modification is necessary in order to achieve the purpose of the contract in a timely and efficient manner; (ii) provided that the material elements of the contract are not changed.; and (iii) the modification is necessary in order to achieve the purpose of the contract, which has been frustrated by supervening events.
f. What is the applicable regime for framework agreements?

Any party can terminate the agreement in these cases:

  1. force majeure or an incidental event that frustrates the purpose of the contract.
  2. the other party fails to fulfill their obligations.
  3. supervening events.
g. What is the applicable regime for public-private partnerships (PPPs)?

There is a specific legal framework applicable to public-private partnerships contracts, which is composed of Legislative Decree No. 1224 and its Regulation, approved by Supreme Decree No. 410-2015-EF. It is important to mention that in 2017 some articles of this framework were modified by the Legislative Decree No. 1251, which was published on 30 of November 2016, and the Supreme Decree No. 068-2017-EF, which was published on 28 of March 2017. As a result, the public-private partnerships is not regulated by the public procurement framework, because this type of contract has its own unique framework.

h. How are concessions dealt with?

Concessions are regulated in a separate regime; therefore, the public procurement provisions are not applicable. In general, the concessions, such public-private partnerships, are regulated by Legislative Decree No. 1224 and its Regulation, approved by Supreme Decree No. 410-2015-EF (some articles of this framework were modified b the Legislative Decree No. 1251 and the Supreme Decree No. 068-2017-EF). Additionally, different types of concession have different laws which apply, for example in an electronic concessions the Law Decree No. 25844 will also be applicable

i. Are there anti-avoidance rules (including laws on bid rigging)?

There are some alternatives, which motivate the fulfilment of the articles of the LCE and the RLCE. For example, penalty fees, resolution of contracts, inability, anti corruption clauses, etc.