3. Legal framework for public sector procurement

3.1 Legal framework

What is the legal framework for public sector procurement? Please list and describe provisions of relevant constitutional articles, laws, decrees, regulations, rules, guidelines, decisions and other measures governing government procurement.


Domestically, the basic legal framework for the procurement of goods and services is contained in the Government Procurement Regulations included in Accounting Decree-Law Number 23,354/56, implemented by Decree Number 5,720/72 and amendments.

Additionally, the provisions of Act Number 24,156 on Financial Administration and Control Systems of the National Public Sector, its regulating Decrees and other complementary Decrees Number 2,662/92 on Jurisdiction for the Authorization and Approval of Expenses and Number 2,380/94 and Administrative Decision Number 148/96 on Revolving Funds and Petty Cash from the Central Administration agencies are applicable.

In matters of public works, the regime in force is defined in the Procurement of Public Works Act Number 13,064, revised by Acts 16,798 and 17,804, and amending Decrees.

The Public Work Concession regime is contained in Act Number 17,520, and modified by Act 21,691, Act 23,696 and its regulatory Decree Number 1,105/89.

Regarding public works and concessions, the procedures contained in the specific legislation are preemptive and, additionally, the provisions of Accounting Act (Sections 3 and 61, subsection 147 of Decree 5,720/72) may be applied.

According to the provisions of Section 63 of Decree-Law 23,354/56, the procurement carried out by the armed forces and decentralized entities will be governed by the specific provisions on such matter contained in their respective special laws and bylaws and, additionally, by the regime established by this law and its regulatory decrees. In the specific case of the armed forces, their procurement regime was established by Act Number 20,124 and Decrees 265/73; 3961/73; 4027/73.


The laws governing public sector procurement are as follows:

  1. The Bahamas Independence Order (1973); Chapter IX of the Constitution of the Bahamas (1973).
  2. The Financial Administration and Audit Act, 1973. This is the principal Act which governs Accounting within the Public Service.
  3. The Financial Regulations 1975, made under the Financial Administration and Audit Act, 1973.
  4. Current Policies which are formulated form time to time.
  5. The terms of loan contracts with the international Financial Institutions (IBRD,IDB, CDB, EIB and EV)

The limits for approval for procurements are as follows:

  1. Ministries and departments have been given autonomy to incur purchases up to a value of $500 without reference to the central Purchasing Unit or the Treasury for prior approval. However, it is required that two or three quotations are obtained so as to obtain competitive prices, where possible and practical.
  2. Purchases over $500 and up to a value of $50,000. Require an official Purchase Order with not less than three quotations, where possible. These must be approved by the Central Purchasing Unit and then the Treasury.
  3. Purchases in excess of $50,000 but not exceeding $250,000 must be submitted to the Tenders Board which submits recommendations to the Minister in accordance with regulation 57 of the Financial Regulations, 1975.
  4. Purchases in excess of $250,000 must be referred to Cabinet for approval (Regulation 58 of the Financial Regulations,1975)

The procurement of goods and services carried out by Government Corporations are regulated by its own laws and regulations.


The policies and procedures for government procurement are contained in the following documents:

  1. Stores orders 1968
  2. Financial orders 1965

These two Orders are issued by the Ministry of Finance, which, in turn, is authorized to do so by the Finance and Audit Ordinance of 1972. The manual for the Control of Public Finances provides the framework for the registration of government funds and their use for the procurement of goods and services. The "Stores" and "Financial Orders" can be amended by means of a Circular issued by the Ministry of Finance.


It has the following legal provisions:

  1. Law Number 1,178, of July 20, 1990, which approved the governmental administration and control systems.
  2. Supreme Resolution Number 216,145; of August 3, 1995, which approved the Basic Norms of the Administration System of Goods and Services.
  3. Secretary of the Treasury Resolution Number 387-96, of April 26, 1996, which approved the Standard Procedures for construction work in the public sector.
  4. Secretary of the Treasury Resolution Number 388-96, of April 26, 1996, which approved the standard procedures insurance in the public sector.
  5. Secretary of the Treasury Resolution Number 389-96 of April 26, 1996, which approved the standard procedures for proposals for consulting services in the public sector.
  6. Ministry of the Treasury Resolution Number 142-96, of May 6, 1996, which established the National Registry of Consultants and the National Registry of Specialized Consulting Companies.
  7. CGR Resolution - 1/078/96, of October 11, 1996, of the General Controller of the Republic, which approved and expedited the "Regulation Governing the Contracting of External Auditors or Special Consultants in Auditing".
  8. Ministry of the Treasury Resolution Number 841, of December 12, 1996, which approved the "Standard Procedures of National Public Bidding for construction work, purchases of goods and consulting services".

    These arrangements are used when the projects are financed with World Bank resources

  9. Secretary of the Treasury Resolution Number 1,173, of December 12, 1996, which approved the standard instructions for national public bidding for construction work, purchases of goods and consulting services.

This arrangement is used for contributing to and facilitating the employment of the standard procedures of national public bidding.


Section 37 of the Constitution determines the existence of General Regulations applicable, by federal law, to all government levels and branches, which may be complemented by the additional non-conflictive regulations. The present regulation is governed by Law 8,666 of June 21, 1993, partially amended by Law 8,883 of June 8, 1994.

A Draft Bill for a new procurement law which will substitute Law 8,666 was recently produced. With the objective of allowing wide dissemination and to guarantee the transparency of the process, the Brazilian Government published the Draft Bill on its entirety in the Official Gazette of the Union on February 19,1997, in order to gather eventual suggestions in view of perfecting the document. After processing these suggestions the Bill will be presented before the National Congress.

Important note: taking into account the current use in Brazil, and from a grammatical standpoint, we will cite the above mentioned legislation as "8,666", implying that the reference is made to both 8,666/8,883.


Canada's legal framework for federal government procurement is found in the following instruments:

  1. Financial Administration Act
  2. Annual Appropriation Acts
  3. Treasury Board Contracting Policy and Guidelines
  4. Departmental enabling legislation
  5. Departmental policies and practices.

Each department and agency has individual spending authority. Individual departmental authorities for contracting are generally in the legislation constituting each department and conferring certain powers to its Minister. These authorities are reinforced by the Appropriation Acts passed by Parliament each year which provide funds to carry out departmental mandates. The Financial Administration Act provides for the establishment of financial limits above which Governor in Council or Treasury Board approval is required.


In Chile, there is no legal document which deals with the legal regime applicable to government procurement from a global standpoint. As a general rule, government procurement is governed by the procedures derived from the imperium of the law (bidding terms and administrative rules and regulations) and which are specific to each public service, public company and municipality.


Decree Law 1,939, of 1977, Ministerio de Hacienda [Ministry of Finance], articles 24 to 54 establishes rules on government procurement of goods (modified by DL 3001 and 3474).

Decree-Law 2,763, of 1979 establishes the functions of the Central de Abastecimineto del Sistema Nacional de Servicios de Salud (CENABAS). Regulations of the CENABAS in DL 78, of 1980, and amendments in Decree N° 546, of October, 1990.

The Civil Code, on everything related to the procurement of property in those situations in which ordinary civil Law is applied to the Public Sector or supplementary when the Law does not constitute nor the title neither the way to procure.


The agreements entered into between legal persons or public sector entities, with municipalities, universities and government professional associations or with universities or private professional associations recognized by the government are regulated by:

Section 16 of Decree Law (D.L.) Number 1,608 and its regulation, Financial Supreme Decree (S.D.) Number 98 of 1991, if the provision of personal services of dependents is involved.

The provisions of Act Number 18,803 and its regulation, Financial S.D. Number 21 of 1990, constitute the procurement of support actions to the functions of the Ministry of Education, that do not correspond to the same exercise of its powers.

In both cases, the rules and regulations allow direct contracting with the indicated entities, since the call for quotation or private proposal is waived for less than three legal persons. Furthermore, the requirement to prove that such entities do not have government employees is waived in both cases; or, that they may have among their partners, one or more persons who provide services to the State as employees and whose participation is equal or greater than 50% in the corporate capital.

Construction Services:

  1. Supreme Decree Number 294, of 1984, Ministerio de Obras Públicas [Ministry of Public Works]. Defines the system for the contracting of public works.
  2. Supreme Decree Number 15 of 1992, Ministry of Public Works. Sets forth the rules and regulations that govern execution of works contracts between the Ministry of Public Works and entities dependent therefrom. Furthermore, it establishes that the completion of studies, construction, repair and conservation of public buildings carried with government funds, notwithstanding those that must be exclusively executed by other services in accordance with their internal institutional regulations, corresponds to the Architecture Office of the Ministry of Public Works.
  3. Decree Number 48 of 1994, Ministry of Public Works. Regulation on the procurement of consultant projects of the Ministry of Public Works. It also regulates the procurement of contractors.
  4. Decree Number 164, of 1991, Ministerio de obras Públicas. Legal regime for the concession of public works. Amendements in Law Number 19,464.


Act Number 80 of 1993 sets out, based in the final subsection of Section 150 of the Political Constitution that grants Congress the jurisdiction to issue the General Law of Government Procurement and, especially, of the national administration. Such law has been regulated by different provisions, among which the following may be highlighted:

It should be taken into account that Law 80 of 1993 (Contracting Statute) expressly authorizes the state owned hydrocarbon companies to have special contracting systems.

In addition, the contracting carried out by public utilities and activities dedicated to the promotion of scientific research and technological development are also ruled by special contracting procedures.


Considering the fact that the question is very comprehensive, and mostly related to the procedural aspects described in the fifth section, in this opportunity we opted to present the constitutional regulations that govern administrative procurements in detail, not only for its primacy because of the hierarchy of the procedures, but also for setting forth a series of absolutely special provisions, both for the set forth procedure and the goods deal with. We also enclose a brief reference to some aspects of interest, issued by the Office of the General Attorney, and by the Constitutional Court.

Therefore, at constitutional level, Section 121, subsections 14 and 15 establish that the following corresponds to the Legislative Assembly:

Subsection 14 "Decree the sale of goods owned by the nation or their application to public use.

The following may not be divested from the domain of the government:

  1. The energy that can be obtained from public domain waters within the national territory;
  2. Coal deposits, oil sources and fields and whatever other hydrocarbon substances, as well as the deposits of existing radio-active minerals in the national territory;
  3. Wireless services;

The goods mentioned in items a), b) and c) above may only be exploited by the government or by individuals, pursuant to the law or by means of a special concession granted for a limited time and in accordance with the conditions and stipulations established by the Legislative Assembly. The railways, docks and national airports-the latter while in service-may not be directly or indirectly sold, leased or encumbered, nor be divested in any way from the domain of the government ".

It is important to indicate that the Office of the General Attorney has construed that the exploitation of such resources can be carried out by the government, and by an individual when the law specifically authorizes him/her to do so or that it is a concession approved by the Legislative Assembly. By virtue of that interpretation, the country counts , among other, with laws such as the Mining Code and the Law of Hydrocarbons.

Subsection 15 " Approve the loans or similar agreements related to the public credit, and entered into by the executive branch.

To contract foreign loans or loans which, though agreed upon in -country, may be financed with capital foreign, it is accurate that the corresponding project will be approved by two-thirds of the total votes of the members of the Legislative Assembly".

The Constitutional Court, whose votes are binding, established the concept of "public loan" as a "a contract of credit in which the debtor is a public entity, in such a way that so are those contracted by the State itself as debtor, as much as for its decentralized entities, municipalities, corporations or, as a rule, any public law entity and the same if it is in favor of a foreign or national, public or private creditor, or even, of an international legal entity, without changing in either case, or having a reason to change its nature, scopes or effects, always contractual in themselves... " (Vote 6,240-93 and 1,027-90).

This judicial instance also stated that the fact that the loans are approved by the Legislative Assembly does not change their administrative and contractual nature, neither does it exempt them from the legal and administrative regime, nor, does it confer them character of law, though the law that approves them is a law in itself.

As a consequence of the aforementioned reasons, and above all, loan contracts do not become commitments to execute the public power itself, or to modify or impose the permanent modification of national legislation in the country in debt, or to establish conditions which may put public order in jeopardy. Nevertheless, it has been widely accepted that those public contracts be exempted of these laws or other regulations. This is why there has to be, approval of the legislative branch, which should not be reason to transform them into treaties or laws, but should not make them void or inefficient, taking into account that these exeptions are to be temporal and should be reasonably adequate to the objective of the contract.

In this way, the boundaries of not applying the legislation are set by the Constitution and, specifically rules and regulations of public order.

Additionally, Section 140 subsection 19 of the Constitution provides that:

"Duties and attributions that correspond jointly to the President and the respective Minister of Government:

19) Subscribe the administrative contracts not included in subsection 14 of Section 121 of this Constitution, with the reservation of the right to submit them to the approval of the Legislative Assembly when they stipulate a tax or rate exemption, or have the purpose of exploiting public services, resources or natural resources of the government.

The legislative approval of these contracts does not turn them into laws nor does it exempt its legal and administrative regime. The provisions of this subsection will not apply to loans or other similar agreements described in subsection 15) of the Section 121, which will be governed by the special rules and regulations".


In relation with government procurement, the Ecuadorian legislation is governed by the following legal provisions:




Summary of government procurement legislation

Name of the law

Institution subject to regulation of the law

Date of entry into force


Procurement Law Central Government and decentralized entities December 19, 1945, and February 4, 1946 Applies to the related institutions
Guidelines Number 6,023-A of the Ministry of Finance and the Republic?s Accounts Court Central and decentralized and autonomous agencies January 24, 1991 Applied to the related institutions
Internal guidelines or regulations of autonomous institutions Autonomous Depends on when the institution has created it Each regulation or instructive applies to each one the institutions which have created it


Decree Number 57-92 of the Congress of the Republic, and its amendments: Government Contracting Law, which contains substantial provisions regulating government procurement. Governmental Agreement Number 1,056-92 and its amendments: Regulation to the Government Contracting Law, which contains dispositions which complement the law. (Decree number 119-95 of the Congress of the Republic: The Contentious Administrative Law is a general law, which contains the protests and appeals which can be presented before the Public Administration and also regulates the contentious administrative procedure which can be presented before the Contentious Administrative Tribunal (judicial appeals)


  1. Government Procurement Law (Decree 148-85).
  2. Decree Number 164-87 modifying the Government Procurement Law.
  3. The bidding amounts are annually set forth by the Income and Expenditures Budget General Provisions.
  4. Agreement Number 1,346 published in the Official Gazette, La Gaceta, of September 16, 1986, referring to the General Regulation of Purchases, Supplies and Surplus Goods.
  5. Decree 40 Internal Regulation of the National Procurement Office and amendments.
  6. General Public Administration Law, which establishes the procedures held by the Public Administration.

Other decrees and laws, which are in one way or another related to the purchases of the public sector, also exist, but the above described are the most important ones.


Government?s procurement/contracting regime is currently in transition. In the interim, official documents which guide the process are as follows:

  1. Financial Administration and Audit Act, Section 19B. A general overview informs that the terms of contractual agreements for the acquisition of goods, services or the carrying out of public works are subject to conditions which the Minister may prescribe;
  2. Ministry of Finance Circular Number 43, dated November 1963, which establishes the Government Contracts Committee (GCC);
  3. Contractor General?s Act, which sets the guidelines for permits, leases, licenses, etc., and monitors the award and implementation of government contracts; and
  4. Ministry of Finance Circular Number 14, dated May, 1996 - Interim for Awarding Contracts, which informs of contract value thresholds and corresponding procedures.



  1. Government Administrative and Procurement Law, independent or decentralized entities and municipalities; and
  2. General Regulation to the Central Government Administrative and Procurement Law.


Act 56 of December 27, 1995, which regulates Government Procurement;

Executive Decree Number 18 of January 25, 1996, which regulates Act 56;

Executive Decree Number 19 of January 26, 1996, which regulated the "Transparency Principle";

Resolution Number 46, which regulates the requests for extension to suppliers who contract with the State through extension requests;

Commercial Code, certain provision contained in reference to this matter;

Political Constitution of the Republic, Title IX The Public Treasury, Chapter 1, Government Goods and Section 263 which establishes the way in which the State must procure its goods and services.


Domestically, the legal framework which subjects the procedures for the procurement and supply of goods and services, is given by:

Act Number 25/91 that regulates the purchase, supply, lease of goods for use and consumption of the public administration;

Act Number 26/91 that regulates the purchase, supply, lease of works and services of decentralized, independent, self-sufficient and mixed economy entities;

Act Number 1,045/83 that establishes the regime of public works.


Legal framework for the procurement of goods and services

Political Constitution of Peru, Section 76:

The works and procurement of supplies, and the purchase and sale of goods, with public funds or resources must be executed by contract and public bidding. The law sets forth the procedure, the exceptions and the corresponding responsibilities.

Law Number 26,703 ? Government Budget Management Law, Sections 47, 53 and 54 through 58:

Determines the requisites for the modalities of procurement of goods, the execution of works and the contracting of non- personal services, for the preparation of studies, advising services, consulting services, expert services, external audits, inspections and supervisions, as well as the treatment of exceptions to public bidding and contest on quotes and or merits.

Law Number 26,706 Budget Law for the Public Sector 1997, Article 6:

Establishes the amounts (thresholds) for the procurement process, according to the methods of public bidding, public price quotations, public merit contests, direct contact for the procurement of goods, services, as well as works and the contracting of non-personal services for the preparation of studies, assessments, consulting services, expert studies, external audits, inspections and supervisions.

Decree Law Number 25,565:

Creates and regulates the "assessment of processes" of the public bidding system. Through this system, the government agencies and public companies entrust specialized entities with the accomplishment of the public bidding processes for the procurement of goods, services and execution of works and merit contests for the procurement of consulting services, supervisions, expert studies, studies, counseling and inspections.

Supreme Decree Number 065-85-PCM:

Approves the Solely Guidelines for Acquisition and Nonpersonal Services [Reglamento Único de Adquisiciones y Prestación de Servicios no Personales] (RUA)

Supreme Decree Number 133-92-EF:

Approves the Guidelines of Decree-Law Number 25,565

Directive Number 06-96:

Issued by the Government Organisms and Institutions Office on the acquisition of goods and non-personal services for 1996.

Directive Number 06-96-CONADE:

Issued by CONADE on the acquisition of goods and non-personal services.

Legal framework for the construction (procurement) of public works

Political Constitution of Peru, Section 76:

The procurement of works and supplies with public funds or resources are executed compulsorily by contracting and public bidding.

The law establishes the procedure, the exceptions and the corresponding responsibilities.

Law Number 26,703- Government Budget Management Law, Sections 47, 53 and 54 through 58.

Determines the requisites for the modalities of procurement of goods, the execution of works and the contracting of non- personal services, for the preparation of studies, advising services, consulting services, expert services, external audits, inspections and supervisions, as well as the treatment of exceptions to public bidding and public price or merit contests.

Law Number 26,706 Budget Law for the Public Sector 1997, Section 6:

Establishes the amounts (thresholds) for the procurement process, according to the methods of public bidding, public price quotations, public merit contests, direct contract for the procurement of goods, services, as well as works and the contracting of non-personal services for the preparation of studies, assessments, consulting, expert studies, external audits, inspections and supervisions.

Act Number 23,317, Section 13

Which establishes the creation of the Consejo Superior de Licitaciones y Contratos de Obras Públicas (CONSULCOP) Bids and Public Work Contracts Superior Council, the entity that resolves the cases mentioned in Section 30 of the Legislative Decree Number 143 in the last administrative instance.

Act Number 23,350, Section 167. Budget Law for 1982:

By means of which the Sole Regulation of Bids and Public Work Contracts is conferred act status, approved by Supreme Decree Number 034-80-VC, of November 21, 1980.

Act Number 24,977, Section 218. Budget Law for Year 1989:

Through which the Ministry of Housing and Construction is authorized to establish registration and re-registration rates, and increase the procurement capacity of companies in the National Public Works Contractors Registry, as well as the rate to present challenges before the CONSULCOP.

Decree Law Number 25565:

Creates and regulates the "Assessment of Processes" of the Public Bidding System. Through this system, the government agencies and public companies entrust specialized entities with the accomplishment of the public bidding processes for the procurement of goods, services and execution of works and merit contests for the procurement of consulting services, supervisions, expert studies, studies, counseling and inspections.

Law Number 26,143, Article 19:

Approves the Law of Bids and Public Work Contracts Superior Council -CONSULCOP the entity that resolves in the last administrative instance the discrepancies between bidding entities, offerers and contractors and answer questions.

Legislative Decree Number 556, Section 403:

Which establishes that in accordance to Sections 2.2.1 and 2.2.2. of the RULCOP, the representatives of the Ministries before the CONSULCOP, shall have the category of General Directors, under the responsibility of the respective bearers procurements.

Legislative Decree No 710:

Through which the awards are regulated for open tendering procedures in the acquisition of works.

Legislative Decree No 807:

Through which the existent regulations are adequately unified, simplified and organized to give assurance to the economic agents in relation with the procedures followed before INDECOPI, making it easy and efficient and applicable to the areas related to the protection of consumer rights and the repression of unfair competition in the markets.

Supreme Decree Number 034-80-VC

Which approves the Solely Guidelines for Bids and Public Works Contracts, which has the rank of a law according to Law N° . 23350.

Supreme Decree Number 14-81-VC:

Through which some provisions are added to the RULCOP, with the purpose of guaranteeing the availability of the machinery and equipment by the offeror for the construction of roads, contracted in conformance with open tendering procedures. This requirement is considered necessary in the bidding documents.

Supreme Decree Number 057-84-PCM:

Which regulates the rescission of public works contracts by causes not imputed to the contractor, provided in Article 5.5.8 of the RUCOLP.

Supreme Decree Number 024-85-VC:

Which specifies the authority, which supports the resolutions and judgments of the CONSULCOP in order to provide legal guarantees.

Supreme Decree Number 10-86-VC

Through which complementary stipulations to the RUCOLP are introduced, which allow for the streamlining of procedures and the resolution of petitions, protests and challenges in public works contracts.

Supreme Decree Number 17-86-VC:

Through which the RUCOLP is modified to streamline and simplify the procedures in the different sector of the Public Administration in order to give impulse to the economic and social activities of the country.

Supreme Decree Number 021-87-VC:

Regulates the assessment of requests for deadline extensions made by contractors.

Supreme Decree Number 006-88-VC:

Which introduces provisions to make compatible the application of Decree-Law Number 20,024, Section 4, and the Director?s Resolution N° 46-71-TRTI, in reference to the guarantee.

Supreme Decree Number 011-88-EF:

Which repeals the amendment introduced by Supreme Decree Number 017-86-VC Article 5.5.6 of the RULCOP on the existence or legal provisions for payments orders in public works contracts.

Supreme Decree Number 09-89-VC:

Which establishes procedures to calculate the general expenses due to extensions conceded as a consequence of stopping a public work or the reduction in pace of the same.

Supreme Decree Number 09-90-VC:

Which substitutes and adds text to the Supreme Decree Number 010-86-VC with the goal of avoiding the increase of the number of files which has not been processed en the time limits established by the procuring entities.

Supreme Decree Number 04-91-VC:

Which dictates the regulation related to private public works, studies, projects, consulting and professional services in engineering specialties subscribed as form January 1, 1990

Supreme Decree Number 14-94-MTC:

Which dictates the rules to carry out open tendering procedures for the execution of public works according with Legislative Decree Number 710.

Supreme Decree Number 22-94-MTC:

Which includes, within the scope of the RUCOLP, the cost of crossing urban areas and the improvements of the designs utilized for the execution of works form the National Road Rehabilitation and Maintenance Program.

Ministerial Resolution Number 290-85-VC:

Which stipulates that procuring entities provide interested bidders information on the loan agreements along with the bidding documents.

Ministerial Resolution Number 291-85-VC:

Which dictates complementary provisions for improved application of Article 5.5.12 of the RUCOLP.

Resolution Number 094-90-VC-9100:

Which approves the regulations for the application of sanctions for contractors which incur in a violation.

Resolution Number 012-94-P:

Issued by the CONSULCOP and which approves the regulations of the National Register of Public Works Contractors.

Resolution Number 013-96/CONSULCOP-P:

Through which CONSULCOP dictates provisions related to the economic intervention of Public Works.

Controllership Resolution Number 002-96-CG:

Through which the General Controllership of the Republic approves Directive Number 001-96-CG/OAJ-API on the guidelines to warrant the adequate procedure to control payments for additional public works budgets.

Directive Number 005-96:

Directive issued by the Office of Institutions and State Agencies to apply the RUCOLP.

Directive Number 005-96-CONADE:

Directive issued by the National Development Commission on RUCOLP applicable to government financing companies reached by Law Number 249.



United States Code, Titles 10 and 41 contain the bulk of the laws upon which the FAR is based. On an annual basis, authorization and appropriation acts passed by Congress and signed by the President may provide additional authority and requirements.

The FAR System codifies and publishes uniform policies and procedures for acquisition by all U.S. executive agencies (central government entities). The FAR System consists of the FAR itself, which is the primary legal document, and agency-specific acquisition regulations that implement or supplement the FAR. The FAR does not permit agency acquisition regulations that unnecessarily repeat, paraphrase, or otherwise restate the FAR; limits agency acquisition regulations to those necessary to implement FAR policies and procedures within an agency; and provides for coordination, simplicity, and uniformity in the U.S. Federal acquisition process. Title 41 of the U.S. Code and the FAR are available on the Internet at http://www.findlaw.com.

Executive agencies receive appropriations from Congress each year. These appropriations stipulate the programs that entities are authorized to fund and the dollar amounts they are authorized to spend. Executive Agencies are required in some instances to satisfy requirements for goods or services from or through centralized government supply sources. One example is obtaining goods or services from wholesale supply sources such as the General Services Administration (GSA) or the Defense Logistics Agency (DLA). See Attachment 1 for a list of pertinent laws.


The legal framework for government procurement is basically formed by the Texto Ordenado de la Ley de Contabilidad y Administración Financiera del Estado [Orderly Text of the State Accounting and Financial Administration Law] (TOCAF), Act of November 10, 1987. In addition, there are special provisions of the organic laws of the autonomous entities and decentralized services, (this is mentioned in another part of the report), for example, provisions on the procurement of supplies, non-personal services, personal services, etc.


The Bidding Law, dated August 10, 1990, published in La Gaceta Number 34,528, of the same date; Presidential Decree Number 1,411 dated July 25, 1996, which updates the amounts set forth in the mentioned Law; the Regulation of the Bidding Law, dated December 27, 1990, published in the La Gaceta Number 34,628, dated January 4, 1991, amended on October 17, 1991; Decree 1906, published in the La Gaceta Number 34,830 and Free Trade Agreement of the Group of Three (T.L.C.G-3), (Chapter XV)

Articles 126 and 127 of the National Constitution establish some provisions regarding contracts of national interest granted by the Republic. There is also Decree Number 13 on concessions of national public works and services, published on the official newspaper La Gaceta Number 4.179 of April 26, 1994.

3.2 Exemptions to the elements of coverage.

Are there exemptions to the elements of coverage? If so, please describe their content (e.g., thresholds, sectors, regions) and how their regulation and administration differs from normal procurement processes.


Purchases carried out by the Armed Forces and decentralized entities within the scope of the Ministry of Defense are governed by their specific regimes. Where exceptions to open tendering procedures are concerned, the Argentine law allows selective tendering and direct contracting below certain specified thresholds. In addition, when it is urgent or when the tendering procedure is declared void or no admissible offers have been submitted, when the procurement takes place among two government agencies or the procurement is a scientific, artistic or technical, when there is only one offerer of a certain product in the market without convenient substitutes, etc., direct contracting is accepted.


There is no general exemption on goods for government operations; however, exemptions of duty apply on goods which are "Gifts to the Government" imported from abroad. Customs duties of varying percentages are exempted for purchases of good/services (abroad) related to operations.


Given an acceptable quality, purchases are made from the cheapest source. Quotations of prices are normally obtained from three suppliers of any good or service. Verbal contracts may be made for works or services under $1,500. Accounting Officers may make written contracts to a limit of $10,000 with the permission of their Ministers. Tenders are normally (but may not be) invited for purchases over $10,000 but are invited for contracts over $20,000 (chapter 10 of Financial Orders Section 701). These limits are adjusted and regularly reviewed. Procurement procedures generally applied to purchases of a value of more than $10,000. While it is not explicitly stated by the Stores and Financial Orders, the Minister of Finance may waive the tender procedure in cases of urgency, sole supplier or by international agreements. The authority is invoked from the Finance and Audit ordinance 1972.


The application of the Basic Norms are mandatory in all contracts with public entities, except for the procurement of weapons for National Defense and Internal Security.


The Brazilian legislation has different elements of distinction related to the methods of tendering, which in turn, are determined by specific thresholds. The response to question 5.1 describes in detail each one of the modalities adopted in government procurement.

The limits for each modality are periodically revised by the Ministry of Federal Administration and Reform of the State (MARE) and in January 1997 (date of the last revision), the following levels were determined (figures have been rounded):

A. For goods and engineering services

1) Convite [Invitation] up to R$154,200.00

2) Tomada de preç os [price quotation] up to R$1,542,000.00

3) Concorrencia [competition] up to R$1,542,000.00

B. For procurement not specified in the previous item

1. Convite up to R$38,500.00

2. Tomada de preç os up to R$616, 000.00

3. Concorrencia up to R$616,000.00

To avoid the possibility of categorizing a work or services in inferior thresholds, such as, for example, convite or tomada de preç os, Article 23 subsection 5 of Law 8,666 prohibits fractionating or dividing any work or service to be procured.

Observation: The exchange rate US$/R$, as of May 1, 1997, was US$1/R$1,063 (commercial dollar).

The law also determines in Articles 25 and 25, the situations when an exception to this rule may apply. Tendering procedures for the acquisition of defense related material might follow different procedures than the general ones.


The Treasury Board Contracting Policy (federal government) applies to all elements of procurement, that is, goods, services and construction, except for legal services and real property transactions. Consistent with Canada's international trade obligations, the policy provides for four exceptions to competitive bidding procedures: (i) when items are of a value of less than C$25,000 (US$18,006) and C$100,000 (US$72,025) for architectural and engineering services, foreign aid and printing; (ii) when only one source of supply is available; (iii) when it is an emergency, and (iv) when it is considered to not be in the public interest. Under its international agreements, Canada maintains specific exceptions, which are detailed in those agreements.


The general legal framework is not applicable to the procurement of a small number of goods and services. For example, purchase of goods by the Ministry of Defense, and some procurement carried out by the system of leasing.


Colombian legislation determines some exceptions, which are the following:

In general, the above mentioned procedures differed from the Administrative Contractual Law (Act 80); the financial aspect, type of contract awarded through public bidding or direct contracting, suppliers registration which are managed by the entities and the specialized technical factors applied for the selection of proposals.

Contract loans, leasing, real estate, and those qualified as "urgent matters", and the procurement of goods for national defense and security are submitted by direct contracting.


Exceptions set forth in the administrative procedures are established through assumptions that are expressly contemplated by the law.

The Contractual Administrative Law excludes only what is related to employment, public loans, or any other activity submitted to a special contractual regime, and those concerning with nongovernmental public entities, which more than 50% of its financing resources derive from their own; contributions from their members and public entities which social funds are mainly privately owned, and not from the public sector.

The following activities are excepted from the open bids established in the law: The regular activities of the administration, understood as the direct supply to the final user of the services or obligations, legally established, within its attributes; agreements entered into with other States or public international law entities; the contractual activity developed among public law entities; the contracting activity which, by its nature, concurrent circumstances or scarce quantity, it is not possible or not convenient because there is only one supplier, because of special security reasons, pressing urgency or other reasons qualified in such way by this law; purchases carried out with petty cash, in accordance with the regulations for that effect, provided that they do not exceed the limits established in accordance with the previous point; contracts carried out for the construction, installation or provision of offices or services overseas; activities which result excluded according to the law or international legal instruments in effect, and activities which, through justified resolution, the General Controllership of the Republic authorizes when there are sufficient motives for public interest.

All activities mentioned above are also regulated by the Contractual Administrative Law, or the law itself indicates which is the normative regulating them. This should be emphasized, because the country has established the cases in which direct contracting is allowed as well as the dispositions to carry them out. We repeat that these are exceptions to the open tendering procedures properly without leading to think that there is a lack of regulations for such cases. On the contrary, these cases are part of the general legal framework on government procurement and are always subject to subsequent revisions.


In Ecuadorian law there are no exceptions to the coverage of the public procurement regime by concept of thresholds, sectors, or geographical regions. However, procurement of the state-owned oil company, PETROECUADOR, and its subsidiaries, are governed by their own regulations.


The legislation concerning this material pertains to all national territory, however, the legislation does allow exceptions, most importantly those which concern the purchase of goods through direct contracting, when neither open tendering nor limited tendering is required, or in the case of emergency purchases when the emergency has been justified, therefore omitting the tendering procedure that would normally be adhered, and finally, other cases involved in the internal legislation of the country.


  1. Open tendering procedures and price quotation are not mandatory for public entities in the following cases:
    1. The acquisition of goods, contracting of works, services and supplies to protect the boarders, bridges and natural resources subject to international regimes or the territorial integrity of Guatemala.
    2. The purchase and contracting of goods, supplies, works or services that are indispensable to solve situations derived form exceptional circumstances.
    3. The purchase and contracting of goods, supplies, works or services that are necessary and urgent to solve situations of national interest or social benefit. In each situation declared, the works, goods, services or supplies authorized will be indicated as well as their amount and the time limit until when these operations are allowed.
    4. The purchase of movable goods or real estate and conditioning of embassies, consulates, representations or Guatemalan missions overseas.
    5. The contracting of works and services for the dependencies of the government overseas.
    6. The purchase of weapons, munitions, equipment, construction materials, airplanes, ships and other vehicles, gasoline, lubricants, supplies and the contracting of services for the Army of Guatemala.
    7. The purchase of metals necessary for the minting of currency, systems, equipment and printing of bills and securities.
    8. The purchase of real estate, which is indispensable due to location to carry out public works or provide public services.
    9. The contracting of individual professional services in general.
    10. The purchase and contracting of goods, supplies and services with sole suppliers of that product or service.
  1. Open tendering procedures are not mandatory, but the quotation of prices are subject to the methods determined by this law or its regulations in the following cases:
    1. The leasing of real estate, machinery and equipment with or without an option within or outside national territory.
    2. The contracting of studies, design, supervision of works and the contracting of technical services.
    3. the acquisition of scientific, artistic or literary works.
    4. The acquisition of bench materials for the construction of public works.
    5. The contracts signed by the Electoral Supreme Tribunal in order to carry out electoral events.


Does not provide an answer.


There is exemption for the purpose of national security, e.g., certain military supplies; passports; and compelling urgency, e.g., natural disasters.


Indicates that procurement contracts for goods and services originating from loans of governments, international organizations, or deriving from international agreements, will be governed by their respective agreements or contracts.


The Mexican Constitution establishes the sovereignty and autonomy of the States concerning its interior regime, which includes the regime on public procurement, therefore the states (federate entities) are not subject to the Procurement and Public Works Law unless the purchase is carried out partially or totally with federal funds. Additionally, the contracts entered into among entities themselves or between entities and government enterprises are also excluded from the scope of the Law on Procurement and Public Works.


There are certain public entities, governed by special laws, which are allowed to carry out direct purchasing whiteout holding a public bid such as the system of concessions and special permits. There is also an exception in the case of emergencies; when a bid has been declared void; natural disasters; contracts by the central governments with municipalities or its associations or autonomous entities; contracts and the renewal of those contracts with the indigenous regions for public investment projects of up to $10,000.


The regulations of the decentralized entities, autonomous, autarkic and of mix economy which by the nature of their functions, are governed by their by-laws and therefore use their own procurement regime.


Decree Law Number 25,565 and Supreme Decree Number 133-92-EF.

A bidding system called "International Processes Assessment" was created through which Public Sector Agencies and companies performing public activities are able to contract specialized entities through a Supreme Resolution to provide organization and execution services of:

The following are considered specialized entities:

Such processes will be governed by their administrative bases which will be prepared by the supplier organizations together with the specialized entity, in compliance with the applicable legislation., establishing adequate mechanisms to satisfy, in the most economical way, the requirements and needs of the organization that requested the process.

The Single Regulation of Procurements of Goods and Non Personal Services (RUA), the Single Regulation of Public Works Bids Contracts (RULCOP), Law Number 23,554 and its Regulations, approved by Supreme Decree Number 208-87-EF, or other special regulations that could be issued for the procurement of goods, services and works execution are not applicable.


The exemptions are:

  1. In cases of emergency situations - as a result of the occurrence or anticipation of flooding, earthquake or other natural disasters. The Minister is empowered to act and report on the matter (including expenditure) to Parliament within 30 days of completion of action.
  2. Procurement for national security: There are no thresholds. The Special Ministerial Committee reports to the Minister and the Prime Minister.
  3. Procurement with loans from international funding agencies. These are governed by signed Agreements.


There are only certain conditions where contracting without providing full and open competition is allowed. The conditions include:

  1. only one responsible source and no other supplies or services can meet agency requirements;
  2. unusual and compelling urgency;
  3. eindustrial mobilization, engineering, developmental, or research capability, or expert services;
  4. international agreement;
  5. authorized or required by statute, e.g., national industries for the blind and severely handicapped; Federal prison industries (UNICOR); government printing and binding;
  6. national security;
  7. public interest, which is rarely used because it requires notification to Congress not less than 30 days prior to contract award.

The Department of Defense (DOD), in particular has specific requirements to procure from domestic sources which are set forth in the Defense Federal Acquisitions Regulations (DFAR) and are exempt from US obligations under the WTO, GPA, and NAFTA, chapter 10.


There are no exceptions to the elements of coverage, there are no provisions in Uruguay?s legislation establishing special purchase regimes by sector or regions of the economy.


The exceptions to the covered elements are:

  1. Purchases carried out by States or Municipalities when the amount of the contract is paid with funds from the Central Government. (Section 2 of the Law of Tender Procedures)
  2. The suppliers selection procedures carried out by PDVSA and its affiliates (Section 74 of the Law of Tender Procedures).
  3. Those contracts for the execution of works; acquisition of goods or for the procurement of services, where the total or partial value needs to be paid with loans granted by international financial entities (Section 74 of the Law of Tender Procedures).
  4. The acquisition of real estate and the procurement of services related to scientific, professional, technical, artistic, intellectual, creative, or teaching activities (Section 2 of the Regulations of the Law of Tender Procedures).
  5. Contracts other than those for public works, acquisition of movables, supply of commercial services, such as guarantees, insurance, leasing, and bank deposits. (Section.2 of the Regulations of the Law of Tender Procedures).

3.3 Application of rules regarding the joint procurement of goods, services and/or public works.

How is the application of rules determined in cases of joint procurement involving goods, services, and/or public works?


The same regime applies to the procurement of goods and services. Section 3 of Decree 5,720/72 establishes that the procurement of material or services for national public works are subject the provisions set forth by the authority with jurisdiction in accordance with the provisions contained in the legislation on this matter currently in force (Act 13,064) or, should this not be the case, to the provisions set forth in the regulation approved by that decree.


There is no differentiation made in relation to joint procurement involving goods, services and/or public works.


Does not answer the question.


In the specifications which each contract outlines public entities are required to remain clear as to whether or not related purchases of goods, services and/or construction work and parallel to this are required to retain specific standard procedures which the proposals utilized. See the response in number 3.1 (iii, iv and v).


There are no distinctions between the rules for the joint or separate purchase of goods and services.


Canada applies no special rules to joint (mixed) procurement. Mixed procurements are classified as a good, service or construction contract according to the component of the contract that accounts for more than 50% of the total projected cost. Each type of procurement is clearly identified in calls for bids.


The Chilean legislation applies a different procedure for each sort of bidding and special provision for each procurement method.


The joint procurement of goods, services and/or works is not expressly set out in the Law. But since contractual freedom is the ruling principle of government contracting, it has been established that it is possible to carry out different types of contracts, according to the disposition of the parties which is only limited by the public interest. From that contractual freedom have originated contracting modalities such as "turn key", "global fixed sum" and "concession" contracts which have the goal to provide services, supply, construct, build and put in functioning conditions the contracted work.


The contractual method to be applied will depend on the purpose and the value of the procurement, which also determines the procedure to be applied. In our case, the procurement of goods and services can be joint, as required by the situation, in which case the corresponding procedure should be applied, according to the value of the procurement in question, and as long as allowed by the purpose. Concerning the concession of public works, this should result from a public bidding and, if necessary, additional procurement should be included in that procedure.


There is no incompatibility in the cases of joint procurements of goods, provision of services not regulated by the Law of Consulting Services, and public works execution.

Pursuant to the provisions of the Government Procurement Law, legal or natural persons who perform the study and design, or develop the works engineering or architecture project, and those which establish the specifications of the goods to be procured, cannot enter into contracts for the procurement of goods, execution of works and provisions of services not regulated by the Law of Consulting Services. In the case of PETROECUADOR, the above mentioned limitation does not exist.


The application of regulations for goods and services is done separately, and not jointly.



The regulations are generally applicable. No distinctions are made for the procurement of goods, provisions, works and services, or in joint purchases.


Provisions are generally applicable to goods, services, public works or any combination thereof.


The same regulation is applied, with no distinction regarding the procurement of goods, services and public works.


As previously mentioned, the Law of Procurements and Public Works in force constitutes the only legal framework applicable to the procurement of goods and contracting of services, public works and services related. Therefore, this law establishes which procedure prevails when there is joint contracting.


The provisions are applicable to any combination of goods and services and/or public works.


There is no distinct regime regarding the procurement of goods and services,. There is a separate regime for public works.


In Peru, since 1992 and through the Annual Budget Laws, the joint procurement of vehicles has been centralized by the Ministry of Economy and Finance.

These purchases centralized in the Ministry of Economy and Finances Ministry are carried out through bidding through international invitation, referring to the process established in the Only Regulation for the Supply of Goods and Provision of Non-personal Services - RUA, approved by Supreme Decree Number 065-85-PCM.



FAR provisions generally apply to any combination of goods and services, although there may be specialized additional rules that apply to specific services.


In our legislation, the application of regulations is set forth in Section 44 and in Section 45 of the TOCAF, which establish, on the one hand, the need for the General Bidding Conditions (Section 44) and, on the other hand, the Special Bidding Conditions (Section 45). But the applications of regulations is generic, that is to say, it applies to the procurement of goods, as well as to the procurement of goods and services, as to public works; therefore, our legislation does not discriminate between procurement of goods or joint procurement of goods and services for example, but there is only one procedure, whatever the purpose of the procurement may be. The bidding documents establish the specificity of each contract whatever the procedure applied may be.


The procurement of goods, services and/or public works is not expressly provided for by national legislation. However, the second clause of Article 74 of the Law of Tender Procedures established that: "The acquisition of goods, the execution of civil works, and the provision of services can be excluded when the tender is carried out together with the main works, or when such works are additional to the main one".