RESTRICTED
WORLD TRADE WT/ACC/PAN/15
10April 1996
ORGANIZATION(96-1256)
Original: Spanish
ACCESSION OFPANAMA
Questions onGovernment Procurement
AreanystatisticsavailableontheGovernmentProcurementmarketinPanama,concerning:
- theoverall value ofpublic procurement (figures later than 1991 and 1992, if
possible)?
- thebreakdown oftheprocedures employed (i.e. normal procedures, those not
requiring bidding, competitions, price requests ordirect contracts)?
- thenumber ofcalls fortenders published?
- thenumber ofbidding certificates issued inrelation torejected applications?
- thenumber ofbidding certificates issued toforeign suppliers?
- thepercentage oftheEvaluation Committee 'sopinions rejected byreasoned
decisions?
- thenumber ofcomplaints lodged through governmental channels and recourse
totheThird Division oftheSupreme Court ofJustice?
SeeTable attached.
How isgovernment procurement forpublic utilities regulated?
Telecommunications sector: TheState enterprise known asINTEL, which hadthemonopoly
inthisarea, wasreorganized under Law No.5of9February 1995, establishing theconditions for
privatization ofINTEL. Article 33provides thataslong astheState holds 100percent ofINTEL
shares, government procurement provisions willapply; once theprivate sector acquires shares, then
private procurement willapply. INTEL iscurrently studying thepossibility ofputting shares upfor
salebythemiddle ofthisyear.
Electricity sector: This sector iscurrently governed bytheLaw onGovernment Procurement,
LawNo.56of27December 1995. Adraft lawistobetabled intheLegislative Assembly inApril 1996
toprivatize theState corporation which hasthemonopoly ofthissector, within 18months atthelatest.
This draft lawenvisages splitting thecorporation intovarious companies which willprovide generation,
distribution andtransmission services. Only thetransmission company willcontinue tobeState-owned
andwilltherefore begoverned bythegovernment procurement regime.
Drinking water, sewerage andsanitation (garbage collection) sector: This sector iscurrently
governed bytheLaw onPublic Contracting, Law No.56of27December 1995. Adraft lawistoWT/ACC/PAN/15
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betabled intheLegislative Assembly inApril 1996 toprivatize theState corporation which hasthe
monopoly ofthissector. Inthisdraft law, itisenvisaged thattheState willdecide ontheprocedures
forinvestment ofprivate capital through management, administration, lease andconcession contracts.
Should theState decide onmanagement andadministration contracts, theprocurement regime willbe
implemented through government procurement.
Note: Article 2ofLaw56of1996 establishes thatcompanies inwhich theState holds shares orenjoys
effective control, orwhich aretotally State-owned, andengage incommercial andindustrial
activities, shall begoverned bytheprovisions ofprivate law(Civil Code andCommercial Code)
fortheprocurement ofgoods andservices, orcontractual relations with third parties, based
ontheprinciple offree competition. The provisions ofLaw No. 56shall apply ona
supplementary basis.
How long does itusually take toreceive abidding certificate? Why isthebidding certificate
valid foronly four months? Isiteasily renewable?
Bidding certificates arenormally delivered inthecourse ofthedayonwhich theapplication
ispresented, accompanied byallthenecessary documentation. They may beissued onthefollowing
day, depending onwhat time theapplication issubmitted.
Under Article 8ofLaw No.31of30December 1994, whereby Article 40-A oftheFiscal
Code wasamended, bidding certificates remain inforce forsix(6)months.
Allthatisrequired forrenewal ofabidding certificate isthatanyout-of-date documents in
thefilebeupdated: these arethePeace andNational Security Stamp, theTaxClearance Certificate
andthePublic Registration Certificate, ifacorporate body isinvolved.
Why, although bidders may berepresented, istheir physical presence required atthe
opening oftheenvelopes during thebidceremony?
When thebids areopened, theperson directing thebidding may reject outright anybids not
accompanied byabid-bond orbidding certificate. Bidders, ortheir representatives orproxies, may
contest oroppose therejection onthespot orasmuch astwocalendar days later. Their physical
presence isrequired inorder toensure thetransparency oftheprocess, aswell astoguarantee the
defence andprotection ofbidders 'rights.
Arethere anyplans foranelectronic bidding system?
Notatthemoment.
Does Panamanian lawallow "offset requirements", such as"buy-back arrangements"?
No.
Does Panamanian lawprovide forpreferential provisions tofavour Panamanian suppliers?
No.
Why areforeign companies required tobidthrough anagent orrepresentative established
inPanama?WT/ACC/PAN/15
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Thelawdoes notspecifically make thisrequirement. However, thepublic bidding andprice
competition procedures provide forprior meetings forinformation andcomment, thephysical presence
ofbidders ortheir representatives during theprocess andappropriate participation oftheparty, in
addition totherequirements forobtaining bidding certificates, andtherefore bidpresentation isexpedited
byuseofrepresentatives oragents established inPanama.
May wehave anexample ofcontracts "authorized orregulated byaspecial law", forwhich
bidding isnotrequired?
Yes. One example ofdirect procurement authorized orregulated byaspecial lawisthat
authorized forCooperative Associations, which maypurchase orrentState-owned property orproperty
belonging toautonomous orsemi-autonomous entities, without being required tocompete inpublic
bidding orprice competitions, asprovided forinArticle 82ofLaw No.38of22October 1980.PURCHASES MADE AND BIDDING CERTIFICATES ISSUED
Period 1992 to1995
(Inamounts andthousands ofbalboas)WT/ACC/PAN/15
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ItemAmount Thousands ofbalboas
1995 1994 1993 1992 1995 1994 1993 1992
TOTAL PURCHASE ORDERS 18,388 21,052 32,751 29,441 50,136.40 57,369.60 79,951.10 60,113.30
Directorate 1,636 1,889 4,421 4,819 3,993.00 366.80 9,096.10 6,791.50
Sectoral planners 16,752 19,163 28,330 24,622 46,143.40 53,706.80 70,855.00 53,321.80
TOTAL 2,197 1,546 4,398 1,666 35,877.70 19,214.20 30,609.80 28,831.30
Resolutions 2,072 1,396 4,129 1,472 35,832.20 17,971.00 28,564.90 21,745.60
Resolved 125 150 269 194 45.50 1,243.20 2,044.90 7,085.70
TOTAL 879 1,100 1,602 991 283,877.20 585,437.30 422,965.90 248,283.80
Public bidding 356 295 741 433 261,345.60 556,565.40 305,708.00 177,251.20
Price competition 366 285 861 558 22,531.60 28,871.90 117,257.90 71,032.60
Price requests 11,274 9,374 8,173 6,372 50,136.40 57,369.60 79,951.10 60,113.30
Prior meetings 89 396 0 0
Void 68 124 0 0
Bidding certificates 4,896 4,137 4,726 4,809 24.00 20.30 23.20 23.60
Corporate bodies 4,117 3,628 4,082 3,952 20.20 17.80 20.00 19.40
Natural persons 779 509 644 857 3.80 2.50 3.20 4.20
New 902 511 620 1,027 4.40 2.50 3.00 5.00
Renewed 3,994 3,626 4,106 3,782 19.60 17.80 20.10 18.50
Cancelled 46 202 287 208 0.20 1.00 1.40 1.00
Authenticated copies 133,677 56,683 65,693 46,711 93.60 39.70 46.00 32.70
Disabilities 15 66 67 47
Publications 4,374 3,748 490.08 402.34
Source: Department ofEstimates andStatistics, Directorate ofProcurement andExpenditure, Ministry ofFinance andtheTreasury.