The public contract is a type of contract in which at least one of the parties is a public Administration when it acts as such, and in which it is subject to a legal regime that places the contracting party in a situation of legal subordination to the Administration.
The concept of public contract, at first glance, does not differ from the concept of contract in private law, but since the State (or one of its Administrations) is one of the parties to it, it has its own characteristics. The administrative contract can be defined as one in which the Administration exercises certain prerogatives regarding its interpretation, execution and termination, taking care not to alter its financial equation.
The object of this contract is, consequently, governed by public law. At least one public body must participate in every administrative contract. However, it is the Law that defines what is properly understood by a state body, which in certain circumstances may include non-state entities governed by internal public law.
An additional cause of the importance of the administrative contract comes from the idea of collaboration of private subjects with the Administration, where the individual does not behave like an ordinary contractor. The administrative contract is then one of the techniques of collaboration between those administered and the administration. The contractor, although seeking an economic benefit, obtains said benefit by fulfilling the task of contributing to the fulfillment of public tasks by the State.
Regulation by countries and continents
Europe
In Europe, Regulation (EC) No. 2195/2002 of the European Parliament and of the Council, of November 5, 2002, approving the Common Public Contract Vocabulary (CPV) is applied.[1] and different sectoral Directives, one for works, supplies and services and another for the water, energy, transport and telecommunications sectors, missing the lack of a Directive or Framework Regulation for all procurement. public.
The importance that the European Union gives to the contractual activity of the States is such that there is a specific rule, which we will call the Community Contract Directive (Directive 2004/18/EC), dedicated to regulating this matter. This is due to the community's commitment to achieving freedom of access to public tenders and true market competition. Public contracts subject to this rule are called SARA contracts. However, not all contracts entered into by the public sector are subject to it. There are subjective, amount and objective requirements.
Asset management contract
Introduction
The public contract is a type of contract in which at least one of the parties is a public Administration when it acts as such, and in which it is subject to a legal regime that places the contracting party in a situation of legal subordination to the Administration.
The concept of public contract, at first glance, does not differ from the concept of contract in private law, but since the State (or one of its Administrations) is one of the parties to it, it has its own characteristics. The administrative contract can be defined as one in which the Administration exercises certain prerogatives regarding its interpretation, execution and termination, taking care not to alter its financial equation.
The object of this contract is, consequently, governed by public law. At least one public body must participate in every administrative contract. However, it is the Law that defines what is properly understood by a state body, which in certain circumstances may include non-state entities governed by internal public law.
An additional cause of the importance of the administrative contract comes from the idea of collaboration of private subjects with the Administration, where the individual does not behave like an ordinary contractor. The administrative contract is then one of the techniques of collaboration between those administered and the administration. The contractor, although seeking an economic benefit, obtains said benefit by fulfilling the task of contributing to the fulfillment of public tasks by the State.
Regulation by countries and continents
Europe
In Europe, Regulation (EC) No. 2195/2002 of the European Parliament and of the Council, of November 5, 2002, approving the Common Public Contract Vocabulary (CPV) is applied.[1] and different sectoral Directives, one for works, supplies and services and another for the water, energy, transport and telecommunications sectors, missing the lack of a Directive or Framework Regulation for all procurement. public.
Only contracts entered into by the Contracting Authorities, as defined above, can be SARA contracts. It does not matter whether or not they are Public Administrations, or private or administrative contracts. The important thing is that they are Adjudicating Powers.
Only the following contracts regulated in the Public Sector Contracts Law (LCSP) can be SARA contracts:
• - Works contracts.
• - Public works concession contracts.
• - The supply contracts "Supply contract (Spain)").
• - Service contracts.
• - Collaboration contracts between the public sector and the private sector.
To be SARA contracts: (amounts updated January 1, 2020).
• - The works contract and the public works concession contract must have an estimated value equal to or greater than 5,350,000 euros.
• - The supply contract and the service contract must have an estimated value equal to or greater than 139,000 euros if it is the State Public Sector or 214,000 euros if it is the Autonomous or Local Public Sector.
• - The public-private collaboration contract is always a SARA contract regardless of its amount.
After the entry into force in 2007 of the Public Sector Contracts Law (LCSP), the traditional definition is relegated simply to public contracts concluded by Public Administrations. Along with them, there are other public contracts that, despite being concluded by Entities whose ownership is public, have a private legal regime. Thus, more appropriately, we must speak of "public sector contracts" that can be concluded by various types of subjects:
• - 1. Subjects considered Adjudicating Powers by the LCSP.
• - 2. Subjects that are not considered Adjudicating Powers by the LCSP.
The Adjudicating Powers are:
• - a) Public Administrations (territorial and non-territorial).
• - b) Entities, organizations or entities with their own legal personality that meet the following requirements:
have been created to satisfy needs of general interest that do not have an industrial or commercial nature and
that a Contracting Authority finances more than 50 percent of its activity or controls its management or appoints more than half of the members of its administration, surveillance or control body.
• - c) Associations, under private law, constituted by entities, organizations or entities that are Contracting Powers.
Only contracting authorities may carry out Contracts Subject to Harmonized Regulation") (SARA Contracts), which are those to which the Community Directive regulating public contracts applies.
The rest of the entities whose ownership is public will not be able to carry out SARA contracts.
Article 70.2 of the consolidated text of the Public Sector Contracts Law")[2] establishes that in order to maintain the classification, the maintenance of the economic and financial solvency") and, every three years, that of the technical and professional solvency") of the company must be justified.[3].
The legal regime of public contracts. In order to address it, we must distinguish between administrative contracts and private contracts.
They are those signed by a Public Administration, with some specialty, since there are contracts signed by a Public Administration that must be considered private (such as those for artistic creation and interpretation, shows or certain financial services).
They are completely governed by the Public Sector Contracts Law (or, if it is a special administrative contract not classified therein, by its specific regulations), its implementing provisions and by the rest of the administrative law regulations. Only in cases of interpretative gaps should private law be resorted to.
In this sense, we choose to define the contractual concept of the Public Administration as the agreement of two or more parties to create, regulate, modify or extinguish a patrimonial legal relationship, of which at least one of the parties is an entity of the Public Administration.
It should be noted that, according to this definition, it is clear that the distinctive element of the contract is not the fact that the administrative entity that celebrates the contract has special prerogatives in its favor, since it may or may not even condition such prerogative to certain circumstances, but that at least one of the parties that celebrate the contract is a Public Administration.
• - In principle, it could be understood that it is a declaration of common will. In the sense that the concurrent will of the State or another entity in the exercise of the administrative function, on the one hand, and of an individual or other public entity (state or non-state) on the other, is required. It is important to note that this "will of the state" is actually not precisely a "will", given that the State is subject to the regulation contemplated in the State Contracting and Acquisitions Law.
• - It is a bilateral act that emanates from the manifestation of the coincident will of the parties. Insofar as it matters a bilateral concurrence of wills and is distinguished from the administrative act, which is essentially unilateral.
• - Producer of legal effects. The Administration contract reciprocally determines powers and obligations with its own, direct and immediate legal effects (unlike simple acts of the Administration) and individually for each of the parties (as opposed to regulations, which produce general legal effects.
• - Formalism. In administrative contracts, their validity and effectiveness are subject to compliance with the formalities required by the current provisions regarding the form and contracting procedures. These formalities run through a series of preparatory acts for the contract.
They are private contracts:
• - a) Those celebrated by the rest of the Public Sector entities that are not Public Administrations.
• - b) Those held by Public Administrations whose purpose is artistic creation and interpretation, shows or certain financial services.
This type of private contracts is where the theory of separable acts has been designed, essential to understand their legal regime. Under the same:
• - The preparation and award phases of the contract will be governed by administrative law (LCSP and others mentioned above).
• - The execution and extinction phases will be governed by the rules of private law.
This is important since administrative law grants the Administration a series of prerogatives during contractual execution (unilateral interpretation, unilateral modification, imposition of penalties...) that cease to exist in the private contract. Therefore, the public sector contract cannot be defined as a contract where one of the parties has exorbitant powers, since that can only be predicated of the administrative contract which, as we see, is a subtype of public contract.
America
The applicable regime for the Federal Administration is established in Decree 1023 of 2001, "National Administration Contracting Regime", complementary to Law 24,156 on Financial Administration and Control Systems of the National Public Sector.[4] Establishes as its main mission "that the works, goods and services are obtained with the best technology provided to the needs, at the right time and at the lowest possible cost, as well as the sale of goods at the best bidder, contributing to the efficient performance of the Administration".
Establishes as general principles of public procurement reasonableness, efficiency, promotion of competition, transparency, publicity, responsibility of organizations and authorities, and equal treatment. After indicating the contracts included and excluded from the norm, it establishes that each institution will formulate its contracting program adjusted to the nature of its activities and the credits assigned in the Budget Law of the National Administration. It specifically establishes the rejection of those applications or tenders that are involved in acts of corruption.
The public call and choice of the election procedure are indicated as essential formalities of the tenders; the approval of Particular Bases and Conditions Documents; the preselection of bidders or the declaration of a void result; the approval of the selective procedure; the awarding of the project, or the declaration of nullifying it; the application of sanctions to bidders for failure to comply with their obligations; and the suspension, resolution, termination, rescue or declaration of expiration of the contract, as well as the revocation of the administrative acts of the respective procedure.
Public bidding as a supplementary rule, as well as public auction, private tender and direct contracting, the latter applicable in an exceptional and restrictive manner, are established as essential methods of public procurement.
Likewise, rules are established for electronic contracting, and the National Contracting Office is established as the body in charge of monitoring compliance with these regulations.
In Chile, public procurement is essentially governed by Law 19,886, on the Bases of Administrative Contracts.[5] This law regulates contracts for the supply of goods for the administrative function, excluding public works contracts, transactions of financial titles, fees of natural persons, the contracting of war material and other contracts governed by special laws.
It is established that the general and supplementary procedure for public procurement is public bidding, which consists of stages of advertising the offer, opposition to the background of the interested companies, their study and choosing the proposal to be contracted. By exception, the tender may be private when the amount does not exceed a legal minimum, or in cases of urgency, lack of bidders in the public proposal or need for confidentiality. Direct dealings with a single candidate are allowed as a last alternative when it is impossible to carry out a public or private tender.
The Directorate of Public Procurement and Contracting, also known as Chilecompra, is established for the direction and coordination of public service contracting, supervised by the Ministry of Finance, which will be in charge of setting policies for the sector, monitoring compliance with the law, and managing the electronic system of offers and candidate entities.
Likewise, to resolve disputes between public services and contracted entities, the Public Procurement Court is established, made up of three legal judges chosen by the President of the Republic from shortlists drawn up by the Supreme Court.
Mer-link[6] is the current technological platform for public purchases in almost all Costa Rican state institutions, it is mandatory for the Central Administration (as of January 1, 2017), and commonly used in autonomous, semi-autonomous institutions, deconcentrated bodies, municipalities, among others, which will allow State suppliers and private companies (BAC San José and Costa Rican Red Cross Association) to carry out the purchase and sale operations of products and services in a manner electronics. It works in the form of an e-commerce portal that operates as a one-stop shop, accessible through the Internet. To adapt it to the Costa Rican computer system, the ICE (Costa Rican Institute of Electricity) had to disburse more than 14 million dollars.
The selection of the purchasing model for the Costa Rican state was made after an analysis of the best practices of countries such as Chile, Panama, Korea, Mexico and Brazil. This study culminated in the adoption of the public procurement model of South Korea, as it is a world leader in electronic procurement, through its management system called Koneps (Korea On Line e-Procurement System). The Korean system is defined as the largest electronic “Marketplace” in the world. This model has been taken as best practice worldwide. It has been the basis for the development of purchasing models in several countries and has received awards from international organizations, such as the UN, the Organization for Economic Co-Operation and Development (OECD) and the Asia Pacific Council, as the best practice in public procurement.
The adoption of the Korean model is based on the signing of a cooperation agreement between Costa Rica and the Republic of South Korea, carried out during the first decade of this century. Through this agreement, the donation of the source code of the public procurement system is obtained. The adaptation of the model to Costa Rica is carried out with the participation of multiple entities representing various sectors (municipalities, banking, universities, health, insurance, services and technology), which little by little has been incorporated into the platform implementation process, coupled with all the support received from the Korean public entity Public Procurement Services and the Technical Secretariat of Digital Government. In addition, the company Samsung SDS, which developed the public procurement system in Korea, participated.
• - Concession.
• - Electronic government.
• - Official Registry of Bidders and Classified Companies of the State").
• - Regulation (EC) No. 2195/2002 of the European Parliament and of the Council, of 5 November 2002, approving the Common Public Procurement Vocabulary (CPV).
• - The influence of Community Law on the Spanish Law on Public Sector Contracts Archived December 3, 2008 at the Wayback Machine.
• - Directive 2004/18/EC of the European Parliament and of the Council, of 31 March 2004, on the coordination of procedures for the award of public works, supply and service contracts (known as the "classic" Directive) and the appeal procedure.
• - Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of contract award procedures in the water, energy, transport and postal services sectors (known as the "special sectors" Directive) and appeal procedure.
• - Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 July 2008 on greener public procurement.
[5] ↑ «LEY-19886 30-JUL-2003 MINISTERIO DE HACIENDA - Ley Chile - Biblioteca del Congreso Nacional». www.leychile.cl. Consultado el 19 de marzo de 2016.: http://www.leychile.cl/Navegar?idNorma=213004
The importance that the European Union gives to the contractual activity of the States is such that there is a specific rule, which we will call the Community Contract Directive (Directive 2004/18/EC), dedicated to regulating this matter. This is due to the community's commitment to achieving freedom of access to public tenders and true market competition. Public contracts subject to this rule are called SARA contracts. However, not all contracts entered into by the public sector are subject to it. There are subjective, amount and objective requirements.
Only contracts entered into by the Contracting Authorities, as defined above, can be SARA contracts. It does not matter whether or not they are Public Administrations, or private or administrative contracts. The important thing is that they are Adjudicating Powers.
Only the following contracts regulated in the Public Sector Contracts Law (LCSP) can be SARA contracts:
• - Works contracts.
• - Public works concession contracts.
• - The supply contracts "Supply contract (Spain)").
• - Service contracts.
• - Collaboration contracts between the public sector and the private sector.
To be SARA contracts: (amounts updated January 1, 2020).
• - The works contract and the public works concession contract must have an estimated value equal to or greater than 5,350,000 euros.
• - The supply contract and the service contract must have an estimated value equal to or greater than 139,000 euros if it is the State Public Sector or 214,000 euros if it is the Autonomous or Local Public Sector.
• - The public-private collaboration contract is always a SARA contract regardless of its amount.
After the entry into force in 2007 of the Public Sector Contracts Law (LCSP), the traditional definition is relegated simply to public contracts concluded by Public Administrations. Along with them, there are other public contracts that, despite being concluded by Entities whose ownership is public, have a private legal regime. Thus, more appropriately, we must speak of "public sector contracts" that can be concluded by various types of subjects:
• - 1. Subjects considered Adjudicating Powers by the LCSP.
• - 2. Subjects that are not considered Adjudicating Powers by the LCSP.
The Adjudicating Powers are:
• - a) Public Administrations (territorial and non-territorial).
• - b) Entities, organizations or entities with their own legal personality that meet the following requirements:
have been created to satisfy needs of general interest that do not have an industrial or commercial nature and
that a Contracting Authority finances more than 50 percent of its activity or controls its management or appoints more than half of the members of its administration, surveillance or control body.
• - c) Associations, under private law, constituted by entities, organizations or entities that are Contracting Powers.
Only contracting authorities may carry out Contracts Subject to Harmonized Regulation") (SARA Contracts), which are those to which the Community Directive regulating public contracts applies.
The rest of the entities whose ownership is public will not be able to carry out SARA contracts.
Article 70.2 of the consolidated text of the Public Sector Contracts Law")[2] establishes that in order to maintain the classification, the maintenance of the economic and financial solvency") and, every three years, that of the technical and professional solvency") of the company must be justified.[3].
The legal regime of public contracts. In order to address it, we must distinguish between administrative contracts and private contracts.
They are those signed by a Public Administration, with some specialty, since there are contracts signed by a Public Administration that must be considered private (such as those for artistic creation and interpretation, shows or certain financial services).
They are completely governed by the Public Sector Contracts Law (or, if it is a special administrative contract not classified therein, by its specific regulations), its implementing provisions and by the rest of the administrative law regulations. Only in cases of interpretative gaps should private law be resorted to.
In this sense, we choose to define the contractual concept of the Public Administration as the agreement of two or more parties to create, regulate, modify or extinguish a patrimonial legal relationship, of which at least one of the parties is an entity of the Public Administration.
It should be noted that, according to this definition, it is clear that the distinctive element of the contract is not the fact that the administrative entity that celebrates the contract has special prerogatives in its favor, since it may or may not even condition such prerogative to certain circumstances, but that at least one of the parties that celebrate the contract is a Public Administration.
• - In principle, it could be understood that it is a declaration of common will. In the sense that the concurrent will of the State or another entity in the exercise of the administrative function, on the one hand, and of an individual or other public entity (state or non-state) on the other, is required. It is important to note that this "will of the state" is actually not precisely a "will", given that the State is subject to the regulation contemplated in the State Contracting and Acquisitions Law.
• - It is a bilateral act that emanates from the manifestation of the coincident will of the parties. Insofar as it matters a bilateral concurrence of wills and is distinguished from the administrative act, which is essentially unilateral.
• - Producer of legal effects. The Administration contract reciprocally determines powers and obligations with its own, direct and immediate legal effects (unlike simple acts of the Administration) and individually for each of the parties (as opposed to regulations, which produce general legal effects.
• - Formalism. In administrative contracts, their validity and effectiveness are subject to compliance with the formalities required by the current provisions regarding the form and contracting procedures. These formalities run through a series of preparatory acts for the contract.
They are private contracts:
• - a) Those celebrated by the rest of the Public Sector entities that are not Public Administrations.
• - b) Those held by Public Administrations whose purpose is artistic creation and interpretation, shows or certain financial services.
This type of private contracts is where the theory of separable acts has been designed, essential to understand their legal regime. Under the same:
• - The preparation and award phases of the contract will be governed by administrative law (LCSP and others mentioned above).
• - The execution and extinction phases will be governed by the rules of private law.
This is important since administrative law grants the Administration a series of prerogatives during contractual execution (unilateral interpretation, unilateral modification, imposition of penalties...) that cease to exist in the private contract. Therefore, the public sector contract cannot be defined as a contract where one of the parties has exorbitant powers, since that can only be predicated of the administrative contract which, as we see, is a subtype of public contract.
America
The applicable regime for the Federal Administration is established in Decree 1023 of 2001, "National Administration Contracting Regime", complementary to Law 24,156 on Financial Administration and Control Systems of the National Public Sector.[4] Establishes as its main mission "that the works, goods and services are obtained with the best technology provided to the needs, at the right time and at the lowest possible cost, as well as the sale of goods at the best bidder, contributing to the efficient performance of the Administration".
Establishes as general principles of public procurement reasonableness, efficiency, promotion of competition, transparency, publicity, responsibility of organizations and authorities, and equal treatment. After indicating the contracts included and excluded from the norm, it establishes that each institution will formulate its contracting program adjusted to the nature of its activities and the credits assigned in the Budget Law of the National Administration. It specifically establishes the rejection of those applications or tenders that are involved in acts of corruption.
The public call and choice of the election procedure are indicated as essential formalities of the tenders; the approval of Particular Bases and Conditions Documents; the preselection of bidders or the declaration of a void result; the approval of the selective procedure; the awarding of the project, or the declaration of nullifying it; the application of sanctions to bidders for failure to comply with their obligations; and the suspension, resolution, termination, rescue or declaration of expiration of the contract, as well as the revocation of the administrative acts of the respective procedure.
Public bidding as a supplementary rule, as well as public auction, private tender and direct contracting, the latter applicable in an exceptional and restrictive manner, are established as essential methods of public procurement.
Likewise, rules are established for electronic contracting, and the National Contracting Office is established as the body in charge of monitoring compliance with these regulations.
In Chile, public procurement is essentially governed by Law 19,886, on the Bases of Administrative Contracts.[5] This law regulates contracts for the supply of goods for the administrative function, excluding public works contracts, transactions of financial titles, fees of natural persons, the contracting of war material and other contracts governed by special laws.
It is established that the general and supplementary procedure for public procurement is public bidding, which consists of stages of advertising the offer, opposition to the background of the interested companies, their study and choosing the proposal to be contracted. By exception, the tender may be private when the amount does not exceed a legal minimum, or in cases of urgency, lack of bidders in the public proposal or need for confidentiality. Direct dealings with a single candidate are allowed as a last alternative when it is impossible to carry out a public or private tender.
The Directorate of Public Procurement and Contracting, also known as Chilecompra, is established for the direction and coordination of public service contracting, supervised by the Ministry of Finance, which will be in charge of setting policies for the sector, monitoring compliance with the law, and managing the electronic system of offers and candidate entities.
Likewise, to resolve disputes between public services and contracted entities, the Public Procurement Court is established, made up of three legal judges chosen by the President of the Republic from shortlists drawn up by the Supreme Court.
Mer-link[6] is the current technological platform for public purchases in almost all Costa Rican state institutions, it is mandatory for the Central Administration (as of January 1, 2017), and commonly used in autonomous, semi-autonomous institutions, deconcentrated bodies, municipalities, among others, which will allow State suppliers and private companies (BAC San José and Costa Rican Red Cross Association) to carry out the purchase and sale operations of products and services in a manner electronics. It works in the form of an e-commerce portal that operates as a one-stop shop, accessible through the Internet. To adapt it to the Costa Rican computer system, the ICE (Costa Rican Institute of Electricity) had to disburse more than 14 million dollars.
The selection of the purchasing model for the Costa Rican state was made after an analysis of the best practices of countries such as Chile, Panama, Korea, Mexico and Brazil. This study culminated in the adoption of the public procurement model of South Korea, as it is a world leader in electronic procurement, through its management system called Koneps (Korea On Line e-Procurement System). The Korean system is defined as the largest electronic “Marketplace” in the world. This model has been taken as best practice worldwide. It has been the basis for the development of purchasing models in several countries and has received awards from international organizations, such as the UN, the Organization for Economic Co-Operation and Development (OECD) and the Asia Pacific Council, as the best practice in public procurement.
The adoption of the Korean model is based on the signing of a cooperation agreement between Costa Rica and the Republic of South Korea, carried out during the first decade of this century. Through this agreement, the donation of the source code of the public procurement system is obtained. The adaptation of the model to Costa Rica is carried out with the participation of multiple entities representing various sectors (municipalities, banking, universities, health, insurance, services and technology), which little by little has been incorporated into the platform implementation process, coupled with all the support received from the Korean public entity Public Procurement Services and the Technical Secretariat of Digital Government. In addition, the company Samsung SDS, which developed the public procurement system in Korea, participated.
• - Concession.
• - Electronic government.
• - Official Registry of Bidders and Classified Companies of the State").
• - Regulation (EC) No. 2195/2002 of the European Parliament and of the Council, of 5 November 2002, approving the Common Public Procurement Vocabulary (CPV).
• - The influence of Community Law on the Spanish Law on Public Sector Contracts Archived December 3, 2008 at the Wayback Machine.
• - Directive 2004/18/EC of the European Parliament and of the Council, of 31 March 2004, on the coordination of procedures for the award of public works, supply and service contracts (known as the "classic" Directive) and the appeal procedure.
• - Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of contract award procedures in the water, energy, transport and postal services sectors (known as the "special sectors" Directive) and appeal procedure.
• - Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 July 2008 on greener public procurement.
[5] ↑ «LEY-19886 30-JUL-2003 MINISTERIO DE HACIENDA - Ley Chile - Biblioteca del Congreso Nacional». www.leychile.cl. Consultado el 19 de marzo de 2016.: http://www.leychile.cl/Navegar?idNorma=213004