4. Administrative structure

Please describe how central government procurement activities are administered, including appropriate description of the centralization or decentralization of that procurement.


The National Procurement Office, which depends on the Finance Secretariat ? Ministry of Economy, Public Works and services ? is responsible for proposing the policies, establishing the regulations, and developing operating management systems. At the same time, each ministry, decentralized agency, official bank, and state company, through their own procurement agency, carries out the necessary contracting. Consequently, the procurement regime is subject to the same regulations (see Section 3), with some differences in the case of goods and services on the one hand and public works on the other. In addition, there are special procedures for the concession of public works and the additional specifications applied to each particular case.


Centralized procurement of goods is carried out by the Central Purchasing Unit on behalf of the various government agencies. Contracts are negotiated by the Central Purchasing Unit for selected categories of items and the prices of these are then circulated to all of the government agencies. All other items are procured on a decentralized basis by individual government agencies within the legal framework outlined in 3.1. Centralized procurement has now been discontinued for the central government and a contracting system has now been implemented.

A far as the public corporations are concerned, goods and services are procured centrally and then distributed to their various satellite stations.


Does not answer.


Regulatory and consulting level:

Under the Regulatory Agency, Ministry of Economy, through its specialized technical divisions. Within the System of Goods and Services Administration, the specialized technical unit is the Direction of Administrative Organization, Regulations and Procedures (DONPA), which depends on the National Finance Secretariat and has the following powers:

  1. Sets forth basic procedures and regulations for the System of Goods and Services Administration.
  2. Establish the time limits and conditions to develop specialized or secondary procedures, and the progressive implementation of systems.
  3. Compatibility or assessment, as appropriate, of the specific provisions to be developed by each entity or group of entities performing similar activities, pursuing to their nature and basic regulations.
  4. Monitor the adequate functioning of specific decentralized systems and integrate the information generated by such systems.

Operation and execution level:

Under the public entities, with the following powers and responsibilities:

  1. Comply and monitor compliance with the SABS? basic regulations.
  2. Design their specific regulations within the framework of the basic procedures.
  3. Implement their specific regulations and monitor compliance with their applications.
  4. Implement records of the systems? operations and data for their administration and monitoring.


There are no centralized purchases internationally understood as such. Every government entity capable of making payments can carry out a purchase, provided that it constitutes a bidding commission and complies with Regulation 8,666. Besides, a ministry or public company can establish its centralized entities if deemed convenient.


All government procurement is decentralized to departments and agencies except the procurement of goods, which generally rests with the Department of Public Works and Government Services (PWGSC). Overall, 75% of procurement over C$25,000 (US$18,006) is handled by PWGSC, while the remaining 25% is carried out directly by other departments and agencies. The Treasury Board is responsible for the establishment of the procurement policy of the federal government departments and agencies. Crown corporations are generally responsible for their own set of procedures.


The public sector in Chile, as well as the form of government, corresponds to a unitary system (nonfederal). It is structured around public services, public companies, and the Municipalities.

  1. Public services (entities): Public services include Ministries, City Councils, Provincial Governments and all services created with administrative purposes.
  2. State-owned companies: include those established by the law and those established as corporations where the State is a major shareholder
  3. Municipalities (local government): They are public law, independent corporations, with legal personality and independent budget, with their own resources, who exercise the local government of the country?s districts.

Chile does not have a single system or procedures for public sector procurement; this means that in general terms, procurement processes are highly decentralized. In fact, most government purchases are carried out by each service, company or municipality. Notwithstanding this, the central government has two specialized entities for public procurement, one for the health sector (CENABAS) and the other to supply services with certain goods (DAE). Government procurement will also be structured in accordance with the systems used by public services, state-owned companies, and municipalities.


The Public Administration contracting regime in Colombia is decentralized, which means that there is not a single entity responsible for contracting, but each competent entity, according to its needs, service requirements and budget resources, can carry out the necessary contracting. At a central government level, the following are empowered to carry out contracting: The nation, the ministries, administrative departments, superintendencies, special administrative units, public institutions, commercial and industrial companies, and mixed economy corporations related or linked to the central sector. In addition, such powers are enjoyed by the Senate of the Republic, the House of Representatives, the Superior Awarding Council, the Nation?s General District Attorney's Office, the Nation?s General Controllership, the Nation?s General Procurement Office, and the Civil Registry Office.


In accordance with the Law of Administrative Procurement, central government purchases are carried out by an agency of the Ministry of Finance called Proveedurķa Nacional [National Supply or Purchasing Office], which is part of the basic financial organization of the State.

Section 103 of such Law establishes that the mentioned agency is in charge of carrying out all stages, including the award of contracts, of the procedures for the Executive, which are assigned to institutional procurement agencies.

Therefore, the purchases of the executive branch are centralized. However, the Executive Decree N. 25,291-H was enacted on May 16, 1996, and published in La Gaceta Number 134 on July 15, 1996, which created, as deconcentration pilot plans, two decentralized procurement offices, with the possibility of opening more, through the enactment of the corresponding Executive Decree. The National Procurement Office is, for such purpose, the technical and consulting body governing administrative contracts; therefore, institutional procurement offices created in other entities will be subject to its guidelines, policies, instructions, and communications. Through this body, the Nation?s General Controllership is informed of the contracting activity carried out by the executive branch.

This agency will begin operations once the agreement entered into between the National Procurement Office and the corresponding Ministry has been published twice in the official newspaper La Gaceta. The executive branch is empowered to revoke the operation or the existence of decentralized procurement offices.

Institutional procurement offices are required to have a suitable organizational structure, previously approved by the National Procurement Office, without the possibility of using other units for the application of administrative contracting procedures.

The determination of the contracting that such agencies can carry out on their own is performed by the National Procurement Office, through a resolution determining what goods and services remain centralized. The National Procurement Office is responsible for common and continuous procurement for all ministries, while the institutional procurement offices are responsible for the procurement of goods and services for the Ministry. They are not authorized to carry out any procedure implying procurement abroad or tax exemption, since the National Procurement Office performs this function.


There is no centralization in public sector procurement.

In each entity of the public sector there is a Contracting Committee (contracts for an amount higher than 2,000 vital minimum wages), or a Committee for Selective Prices Competition (contracts over 1,000 vital minimum wages, and inferior to 2,000 vital minimum wages) that have administrative authority in public sector procurement.

The vital minimum wage is of 100, 000 sucres (approximately US$25).

Committees established in each institution administer consultancy contracts.

In relation to purchases regulated by the Law of PETROECUADOR, there are different sectors within those companies, which are responsible for procurement (Contracting committees, Managerial Offices).


The offices of the central government, decentralized institutions and autonomous institutions, are directly responsible for the purchasing of goods and services; through the purchasing commission, units of provisions, or through units from the supplier depending on the varying laws. In that way, the procedure used for tendering is determined (depending on the amount of the acquisition); this procedure is the same for both the offer and the refusal. The institution completes this procedure, and that is where the offer and appropriation took place. However, the comptroller role is to verify if the expenditure of the institution, in the form of a purchase, has been accomplished legally and will go to the original bidder. This Comptroller institution is the Republic Court of Accounts.


Decentralized procurement. Each public sector entity carries out its own planning and makes purchases based on such planning and the financial availability at that moment.


Government procurement/contracting activities are decentralized to ministries, departments and agencies. The Ministry of Finance is currently responsible for establishing the procurement policy guidelines. The Government Contracts Committee recommends the thresholds for approval by Cabinet.


The entity responsible for the administration of the Law of Public Sector Contracting (procurement of goods, services and public works contracting) is the Procurement General Directorate that depends on the Ministry of Finance (MIFIN). The procurement and/or contracting process is decentralized. Each institution applies the country?s Contracting Law and the Procurement General Directorate supervises its application.


In Mexico, each agency of the federal government and each government entity is responsible for the programming and execution of its expenses. Accordingly, the government procurement system does not operate through offices that centralize all federal government procurements.


In Panama, all government sectors carry out their purchases in accordance with the parameters established by the Law and its regulations. Nevertheless, each entity presides the procedures directly, while the Ministry of Finance and Treasury is the regulatory agency of the system, in charge of addressing complaints made by the bidders in any contracting bidding process. However, each entity imposes the technical specifications in the bidding terms and conditions according to its requirements and the way in which the purchases have been carried out.


Procurement in the central administration is operatively decentralized. This means that with the corresponding legislation in the matter, institutions have their own procurement divisions. Each institution follows its own procedures from the moment in which the need arises until the provision of the required good or service.

Within the institutions procurement procedures, there are regulations or procedures to be taken into account for procurement that state the responsibilities for operations during the processing of such actions. Therefore, public bidding and/or price bidding are to be submitted to the consideration of the executive branch for its approval in compliance with Section 213 of the Law of Administrative Organization. This does not apply to purchases carried out by institutions that use other types of tendering procedures.


Goods and services procurement activities

Government procurement of the central government, in general, is decentralized, since each entity carries out its institutional procurement procedures, including procurement of goods and services and public works construction contracting, through the corresponding administration office (supply).

The administration offices (supply), depending on the amount of the purchase, use the following procedure for minor purchases:

Direct Contracting

In the case of a purchase, according to the amounts indicated by Law, the application of a public bidding or tender processes is required, an Award Committee is established formed by the representatives appointed by each entity, including the chiefs of the Administration, Supply, Financial and Legal Counseling Offices.

Such procurements comply with the following procedures:

  1. Development of administrative terms and technical specifications
  2. Publication of the call for tender (in the newspapers)
  3. Sale of the bidding documents
  4. Presentation and reception of questions
  5. Public act (to submit and open the offers)
  6. Evaluation and qualification of offers
  7. Award of the bid (public act)
  8. Publishing of results
  9. Reception of objections to the bidding process, if applicable
  10. Contract

Activities for the procurement of public works construction (contracting)

These are carried out by the Reception and Award Commission, formed by a minimum of three officials of the entity, two of which must be engineers or architects.

The procedure is the following:


The Ministries and Departments may acquire goods and services on their own, following the rules and regulations as set out in the Central Tenders Board Ordinance.


See discussion of the FAR under Question 3.1 above. Although federal executive agencies are covered by the same framework of laws and regulations on their procurement activities, they generally conduct procurements individually, except when procuring from GSA or DLA supply schedules.


The administration of procurement activities defines the levels of authorities to spend and pay, as established in Article 26 which states that the highest authorities of any administration, regardless of its legal nature, are primarily responsible for expenses, within the budget allocations limits.

Article 27 establishes who are the primary authorities:

  1. The President of the Republic;
  2. in the executive branch, the President acting in agreement with the Minister or respective Ministers or acting as Ministers Council;
  3. in the legislative branch, the President of the General Assembly and the Presidents of each Chamber , according to the case;
  4. in the Judiciary, the Supreme Justice Court;
  5. the Electoral Court, the Central Auditing Office, and the Administration Court;
  6. in the departmental governments, the City Superintendent and President of the Departmental Board, each one within his jurisdiction; and
  7. in the decentralized and autonomous Administration, the Directories, Executive Councils or General Directors of each one of these agencies or public entities.

These primary authorities will be able to authorize expenses for any amount within the limit of the corresponding budget allocation.

When the primary authority becomes a collegiate body, the responsibility of authorizing expenses will be carried out by such body, but the President of this entity will be the representative for the purpose of signing the respective order, or the member or members appointed by such entity when appropriate.

There are more provisions in Article 28 which state that the secondary authorities of expenses are those in the highest positions in agencies with jurisdiction to authorize expenses within the framework of objective regulations.

Secondary authorities include:

  1. Ministers in their Ministries, the Secretary of the Presidency of the Republic, the Director of the Planning and Budget Office , and the Director of the National Office of Civil Service, within their agencies, with the limit of four times the maximum of short bids;
  2. Directors, managers or other authorities of agencies depending directly on primary authorities, or on the secondary authorities mentioned in the previous subsection , determined with the maximum limit of twice as much the short bids.
  3. Officials in charge of the agencies that will have to establish the regulations, taking into account their nature and characteristic and the line of authority of such officials, within the limits established by such regulation, which shall not be higher than the maximum limit of short bids.

Article 30 establishes that secondary and primary authorities will be able to delegate authority to officials within their agencies.

These delegates will act under the supervision and responsibility of the authority that appointed them. Delegates will not be empowered to delegate their authority but will be able to authorize procurement officers and other services for the purpose of enabling them to carry out minor expenses for an amount not higher than the maximum limit established for direct contracting, excluding those of exception.

Article 31 establishes that the directors of administrative services or officials authorized to such effect are payment authorities, besides the expenses authorities, empowered to authorize the orders established in Article 22 without any limitation of amounts.

In addition, this provision presents the possibility of delegating, under their responsibility, on officials presiding dependent services, the power to authorize payments within the limit established for direct contracting.

Article 32 establishes that the official ordering any expenditure without being authorized to do so will be responsible for its payment, notwithstanding other corresponding penalties.

The breakup of an expense, that is to say its division both of time and amount, is also explicitly determined and, if the "artificial" breakup is proven, will constitute a serious mistake and the corresponding sanctions will be applied.

Article 33 of the TOCAF, which has been previously mentioned and included, establishes procurement mechanisms and their exceptions.


Procurement activities of decentralized and central administration are included within the annual budget to take the necessary provisions to guarantee the availability of funds for contracting and payments. State-owned companies procurement is decentralized.