Título IV

Open contract.

An open contract is the procurement modality coordinated by the Ministry of Public Finance, through the General Directorate of State Procurement, for the purpose of selecting suppliers of goods, supplies and services of general and constant use, or of considerable demand, upon prior qualification and award of the different categories that have been called for public competition, at the request of two or more institutions among those contemplated in Article 1 of this Law, with the exception of the Ministries of Public Health and Social Assistance, Education, the Interior and the Guatemalan Institute of Social Security, which may do so individually. The regulation shall establish the minimum procedures and requirements for open contract requests.

For purposes of the open contract, volume purchasing that leads to better prices and the standardization of specifications that make procurement more economical and practical shall be taken into account.

The purchase and contracting of goods, supplies and services carried out by the entities referred to in Article 1 of this Law are exempt from the bidding and quotation requirements, which they may carry out directly with the suppliers selected through open contract by the Ministry of Public Finance.

Under no circumstances shall open contracts be entered into with sole suppliers.

Executing units, prior to issuing the purchase order for procurements under open contract, must verify the reference prices published by the National Institute of Statistics -INE- and place on record such verification to ensure that in the market, the prices of the goods to be acquired are equal to or higher than those under open contract.

Contracting shall conform to the following procedure:

a)Call: The open contract proceedings shall be initiated with the written request to the General Directorate for State Procurement, in accordance with the provisions of this Law.

b)Procedure: For the open contract, the procedure established for the public bidding regime is applicable, and compliance shall be given to the provisions of Articles 18 to 23, as well as other aspects applicable thereto in this Law. The Office of the Comptroller General of Accounts shall accompany the bidding proceedings through concurrent audits.

c)Bases: The preparation of the bases of the competition and technical specifications of the open contract is the liability of the requesting institutions, with the technical support of the General Directorate for State Procurement, within its jurisdiction. The requesting entities shall appoint technical personnel for the proceedings of preparation of the bases. For the appointment of such technical personnel, the requirements, disqualifications, excuses and challenges established in this Law for qualification boards shall apply.

For medicinal products, surgical medical material, medical devices, medical gases, infant formulas, imaging diagnostic material and breast-milk substitutes, due to their nature, the bases of the competition and technical specifications shall be prepared by the requesting entities, under the stewardship of the Ministry of Public Health and Social Assistance, in coordination with the General Directorate for State Procurement, taking into account the provisions of the Regulation for the Sanitary Control of Medicines and Related Products, with regard to safety, efficacy and quality.

Once the bases have been prepared, the following shall apply:

1.The requesting institutions shall appoint technical personnel in the subject matter, one for each entity, to issue an opinion on its content. For the appointment of such technical personnel, the requirements, disqualifications, excuses and challenges established in this Law for qualification boards shall apply.

award, if the price of the offer is equal to or

2.Once the opinion has been received, the Ministry of Public Finance, through the legal advisory unit, shall issue a legal opinion on the respective bases of each competition.

3.After analysis of the legal opinion, the requesting institutions shall express their consent, in writing, to the content of the bases of the open contract, to continue with the contracting procedure, and shall transfer the file to the General Directorate for State Procurement.

4.Once the file has been received, the General Directorate for State Procurement may approve or disapprove the bases, within a time limit of no more than five (5) working days following, with justified cause in accordance with the provisions of the law, of which written record shall remain.

In the event of non-approval, the decision must be duly reasoned, and within two (2) working days following such decision, the General Directorate for State Procurement shall return the file to the requesting entities and shall request the reformulation of the bases, addressing the reasoning set forth in the decision. If the requesting authorities, on the basis of what was decided by the General Directorate for State Procurement, confirm or modify the content of the bases, they shall return the file to the General Directorate for State Procurement, which within the subsequent five (5) working days may approve or disapprove the bases.

d)Call: The call for an open contract competition shall be national or regional in scope, as indicated in the bases and technical specifications. For publication of the call, action shall be taken in accordance with the bidding procedure contemplated in this Law.

e)Assistant: The Ministry of Public Finance shall appoint an open contract assistant, who shall be responsible for the custody and processing of the respective administrative file; likewise, he shall support the qualification board in the preparation of the documents that may be necessary, in accordance with the instructions issued by said Board.

f)Register: The Ministry of Public Finance, through the General Directorate for State Procurement, shall keep a computerized register, by means of a database, of the goods, supplies or services of general and constant use, or of considerable demand, needed by the public sector and required under the open contract purchase modality. In said register the goods, supplies or services shall be grouped according to their nature, and it shall contain, at a minimum, the identification code, line-item number, technical specification, price and awarded provider in each of the price-offer competitions carried out under this modality. This register shall be public and shall be available to all entities covered by Article 1 of this Law.

g)Reference Prices: The General Directorate for State Procurement, once the open contract competition has been requested and the technical specifications provided, shall request reference prices from the National Institute of Statistics -INE-, in accordance with Article 8 of this Law. Once these prices have been received, the General Directorate for State Procurement shall publish the reference prices in GUATECOMPRAS and shall transfer them to the qualification board.

For those line items for which the National Institute of Statistics -INE- does not have a reference price, within a time limit of no more than five (5) days, in accordance with Article eight of this Law, it shall require from the requesting entities, from the General Directorate for State Procurement and from any entity it deems pertinent, information and data to determine the reference price. Once this procedure has been carried out, the National Institute of Statistics -INE- shall transfer these reference prices to the General Directorate for State Procurement.

h)Award: The qualification board shall award in whole or in part, as established in Articles 28, 33 and 34 of this Law, and as established for such purpose in the bases.

The qualification board is obligated to use the reference prices regulated in the preceding paragraph.

The qualification board may award up to three providers per offered brand, with a maximum of eight brands per line item, provided that the price difference between the bidder qualified with the lowest price and the others does not exceed a price variation greater than three percent (3%) in relation to the lowest price. If for each brand there are more than three bidders with the same price, the qualification board shall conduct a public drawing to award to three bidders. If for each brand there are more than three bidders with different prices, award shall be made to the three bidders presenting the lowest prices.

Approval of the award shall be carried out in accordance with Article 36 of this Law. Against approval of the award made by the superior authority of the entity administering and coordinating the open contract, only the motion for reconsideration contemplated in Articles 100 and 101 of this Law lies, which shall be decided in accordance with the law on the matter.

The qualification board shall not carry out the [award] above the reference prices registered by the National Institute of Statistics -INE-, in accordance with Article 8 of this Law.

If for any reason the corresponding open contract is not signed for a competition awarded by the qualification board, or if a signed contract is rescinded in whole or in part, in order to ensure supply and not repeat the procedure, award may be made to the next qualified bidder in order, provided that the offered price does not exceed three percent (3%) in relation to the lowest price.

i)Contracts: Open contracts shall be executed by the Ministry of Public Finance and shall be signed, for formalization, by the public official delegated by the superior authority of the entity administering and coordinating the open contract, jointly with the public official delegated in each case by the superior authorities of the requesting entities and the owner or legal representative of the awarded company or entity, within ten (10) working days from the final award, after exhaustion of the time limit for filing an appeal established in Article 101 of this Law.

Approval of open contracts shall be made by the superior authority of the administering and coordinating entity, in accordance with Article 48 of this Law, and they shall be in force for the time limit determined in each competition.

Open contracts shall be in force for the time limit determined in each competition, which may not exceed two years; in case of extension, it may not exceed one year.

j)Cases of Non-Compliance: For all cases of non-compliance with open contracts, notice shall be given to the superior authority of the affected entity or whomever it designates, so that the corresponding analysis is carried out.

For the particular case of non-compliance with delivery and variation of the contracted conditions to the superior authority of the affected entity, it may authorize the purchase of the goods and supplies subject to non-compliance so that they may be acquired outside the open contract, following the procedures established in this Law.

For any of the cases established in the preceding paragraphs, the documented file shall be transferred to the General Directorate for State Procurement of the Ministry of Public Finance, to apply the sanctions regulated in this Law.

Non-compliances with quality shall be heard by the Open Contract Surveillance, Follow-up and Monitoring Commission, which is appointed in accordance with the bases of the competition, which after exhausting the pertinent instances, shall refer the corresponding sanction to the General Directorate for State Procurement, for the appropriate actions, as the entity administering and coordinating the open contract.

Sanctions applied as a consequence of non-compliances, when applicable, must be recorded in the GUATECOMPRAS Register of Providers.

k)Performance: For the effective performance of the open contracts executed pursuant to the procedural rules regulated in this article, an Open Contract Surveillance, Follow-up and Monitoring Commission shall be integrated in a coordinated manner, constituted according to the nature of the supplies and goods contracted in accordance with the bases of the competition. The open contract documents governing the negotiation in each case shall establish all matters relating to this Commission.

For open contracts derived from competitions requested by the health sector, due to their nature, the Open Contract Surveillance, Follow-up and Monitoring Commission shall hear cases of quality non-compliance, which after exhausting the pertinent instances, shall refer the temporary sanction to the General Directorate for State Procurement, for the appropriate actions, as the entity administering and coordinating the open contract, to safeguard the right to health of the users of the hospital network. In accordance with the bases of the competition, said Commission shall be a collegiate entity composed of the requesting entities, chambers, guilds and corresponding associations, which must be chaired by the Ministry of Public Health and Social Assistance, or by whomever it designates.

l)Prohibitions: The authorities indicated in Article 9 of this Law shall not authorize payment for acquisitions made through other purchase modalities, if the prices are equal to or higher than those appearing in the lists of goods and supplies awarded under open contract, as well as the purchase of open contract products, if they are not in force; if any of the indicated actions is carried out, it shall be the liability of the authority authorizing it.

m)Publication: The lists of goods and supply products awarded under open contract shall be published in the GUATECOMPRAS system, within ten (10) days counted from the date of approval of the respective contract.

Signing of the contract.

Contracts entered into in application of this law shall be signed within the time limit of ten (10) days counted from the final award on behalf of the State when the negotiations are for departments without legal personality by the respective line minister. Said public official may delegate the execution of such contracts, in each case, to the vice ministers, general directors or directors of executing units.

When the contracts must be entered into with the decentralized entities and the municipalities, they shall be signed by the corresponding authority in accordance with its Organic Law or pursuant to the Municipal Code, supplementarily in application of the first paragraph of this article.

When dealing with negotiations to be carried out by the departments of the Presidency of the Republic, they shall be signed by the secretary general, who may delegate said power, in each case, to the heads of the aforementioned departments.

Congress of the Republic). For the negotiations of the Legislative and Judicial Bodies, of the Supreme Electoral Tribunal and Constitutional Court, the contract must be signed by the president of each body; said public officials may delegate the signing of the contract to the authority next in hierarchy, in accordance with its organizational structure.

The contract referred to in the preceding article shall be approved by the same authority determined in Article 9 of this law, as applicable. When the contracts are entered into by the Legislative and Judicial bodies, approval shall correspond to its Board of Directors or to the Supreme Court of Justice.

The contracts shall be drawn up on letterhead paper of the interested department or on plain paper with the seal thereof. When they must be registered or annotated in the registries, they shall be embodied in a public deed, authorized by the Government Notary. However, another notary may authorize the contract, provided that the professional fees incurred are not paid by the State.

Where merchandise, works, property or services acquired in the local market or for immediate delivery are concerned, execution of the written contract may be omitted, provided that the amount of the negotiation does not exceed one hundred thousand quetzales (Q.100,000.00), with all particulars of the negotiation to be stated in a record, adding the relevant supporting documents to the respective file.

At the request of the contractor, the contractual time limit for the completion of the works, the delivery of goods and supplies, or the provision of a service, may be extended one (1) single time for the same time limit or a shorter time limit due to fortuitous event or cause of force majeure or for any other cause not attributable to the contractor. If the first and sole extension is approved, the procedure for the purchase or procurement under any of the competitive regimes established in this Law shall be initiated immediately.

The Regulation of the State Procurement Law shall define the requirements and procedures for cases of sole extension at the request of the contracting entity and mandatory sole extension by unilateral decision of the contracting entity.

Variations in the value of contracts for works or for supply of installed equipment may be made up to twenty percent (20%) more or less than the original value of the adjusted contract as established by the regulation of the present law. For such purpose, the following shall be issued: change orders, supplementary work orders or extra work agreements, which shall be approved by the superior administrative authority of the interested entity. When the variations exceed the above-indicated percentage, and do not exceed forty percent (40%) of the adjusted original value of the contract, a new additional contract shall be entered into. All matters relating to this subject matter shall be addressed in the regulation of the present law.

Amounts resulting from the application of the rules contained in the present law for payments for price fluctuation shall not be considered within the variations to which this article refers.

The contractor may only subcontract specified parts of the work when stipulated in the contract and upon obtaining written authorization from the contracting authority. Subcontractors shall be registered in the Register of Prequalified and shall not be covered by any of the prohibitions established in this law.

Non-governmental organizations, associations, foundations, boards of trustees, cooperatives, committees, regional and international organizations, trusts and any private or mixed entity, national or foreign, that receives and/or administers public funds, shall publish and manage in GUATECOMPRAS the purchases, procurements and acquisitions they carry out, when they exceed the direct purchase amount established in this Law, publishing for such purpose, at a minimum, the following documentation: bidding documents or terms of reference, technical specifications, evaluation criteria, questions, answers, list of bidders, award records and contracts. Likewise, they shall use competitive acquisition procedures and evaluate bids with impartial and public criteria.

The Comptroller General's Office shall audit the negotiation and all contracts executed in application of this article, which for their validity and execution must be registered in the Register of Contracts of said Comptroller's Office.

If anomalies are detected in the audit, the Comptroller General's Office shall report them to the respective bodies, according to the subject matter concerned, after exhaustion of the corresponding administrative procedure.

In the case of direct purchase, the provisions of Article 43 of this Law shall be observed.

In the contracts and agreements entered into by the entities regulated in this Law, which do not derive from the procedures established therein, the rules of ordinary law shall apply, with the obligation to publish and manage in GUATECOMPRAS the respective negotiation and contract. The regulation of this Law shall establish the conditions relating to this matter.

Reverse electronic auction.

The reverse electronic auction is a dynamic public procurement modality for public work, constructions by contract, standardized or approved goods and services, operated in the GUATECOMPRAS system, in which qualified bidders bid publicly, electronically and in real time, during a pre-established time limit, based on a publicly known reference price prior to the event, which shall serve as the starting ceiling for the process. Bids during the bidding shall not propose prices higher than the reference price and only bids with prices lower than the previous bid shall be accepted. The award shall be made to the bid with the lowest price obtained during the process.

The ceiling reference price shall be provided by the National Institute of Statistics -INE-, in accordance with the provisions of Article 8 of this Law and its regulation.

For purposes of the reverse electronic auction, volume purchasing that results in better prices and the standardization of specifications that make the acquisition more economical and practical must be taken into account.

The contracting entity shall establish the requirements and criteria to be met to qualify as bidders in a reverse electronic auction event. In addition, it shall be responsible for defining the technical specifications and the conditions of the negotiation, ensuring that said documents allow competition. The superior administrative authority of the contracting entity shall be responsible for approving the award.

Bidding through this type of procedure shall only be authorized when the number of qualified bidders is greater than or equal to three.

The contracting entity shall make in the GUATECOMPRAS system the call for the reverse electronic auction, with a time limit of not less than eight (8) days before the start of the process.

The regulation of the Law shall regulate all the conditions of the stages on which this modality is based.

When the work is completed, the contractor shall furnish the bonds for conservation of the work or for quality, or for operation, as applicable under the contract, and for debtor balances and give written notice to the supervisor or his equivalent of the completion of the works, and with this action the execution time limit shall be interrupted. The supervisor shall carry out the final inspection within the following fifteen (15) working days, a time limit within which, if the work is not in conformity with the plans and specifications, he shall state his observations in writing to the contractor so that the latter proceeds to correct the deficiencies, and if the works were correctly completed, the supervisor shall submit a detailed report to the superior administrative authority of the corresponding entity, which within the following five (5) days shall appoint the Receiving and Liquidating Commission for the work, composed of three members, with which the supervisor or his equivalent and the representative of the contractor shall collaborate.

According to the magnitude of the work, the Commission shall prepare the record of final acceptance thereof within the thirty-five (35) days following the date of notification of its appointment. If the commission verifies that the works have been satisfactorily executed, it shall sign the record of final acceptance thereof, and otherwise it shall cause to be stated in the record:

a)The corrections or extra works to be carried out by the contractor.

b)The time to be used.

c)Whether the time to execute the works is included within the contractual time limit or whether additional time should be granted to execute them.

Upon receipt of the written notice from the resident delegate or his equivalent that the requirements of the Receiving Commission have been satisfied, the latter shall, within the period of five (5) days, proceed to carry out a new inspection, signing the corresponding record. The date of final acceptance of the work shall be that of the closing of the last record. From the date of this record the entity concerned shall be responsible for the conservation of the work.

In matters of goods, supplies and services, the provisions of this article shall apply to the extent applicable.

Immediately after the works, goods or services have been received, the Commission within a time limit of ninety (90) days shall proceed, in case of delay in payments, in accordance with to carry out the settlement of the contract and to establish the amount of the payments or collections to be made to the contractor. The same procedure shall be observed in case of rescission or termination of the contract.

The Commission shall carry out the settlement within the ninety (90) days following the date of the record of final acceptance of the work. If, upon expiration of said time limit, the Commission has not signed the corresponding record, the contractor may submit a draft settlement to the administrative authority of the interested entity. This authority shall approve or disapprove the settlement or the draft submitted by the contractor within the month following receipt of the respective documentation. If, upon expiration of this time limit, no decision is issued, it shall be deemed favorably resolved on the basis of the approval request submitted by the contractor.

In construction of works, a supervised advance of up to twenty percent (20%) of the value of the contract may be granted. The foregoing percentage shall be calculated on the original value of the contract without taking into account the value of the equipment acquired through letters of credit opened by the contracting entity.

A supervised advance of up to twenty percent (20%) may be granted in contracting of goods to be manufactured locally and of up to ten percent (10%) in the case of consulting services. The percentages shall be calculated on the adjusted original value of the contract as established by the regulation of this law. When dealing with works with external financing, what is established in the respective agreements shall govern, but without reducing the percentages established in this article. The contractor shall amortize the advance by means of the deduction made to him in each payment, in accordance with the procedure established in the regulation.

If the contractor does not commence the work and invests the advance received, within the contractual terms, it shall pay legal interest (active rate) on the advance received, in favor of the State, or shall refund the advance.

The contracting entity may make partial payments to the contractor against periodic estimates of work executed and accepted, which may be made monthly in accordance with the agreed stipulations.

In the case of works with equipment requiring payments abroad, such payments shall be made by means of letters of credit to be opened only at the correspondent banks of the Bank of Guatemala. The form of payment shall be stipulated in the contract. In any event, any bank charges incurred shall be borne by the contractor.

They shall be authorized as follows:

1.Contracts for works, supplies, goods and services: The superior administrative authority of the interested entity or agency shall recognize and authorize payment of additional costs to the contractor and, where applicable, shall require from the contractor the differences in favor of the State, when price fluctuations affecting the following are recorded:

a)Materials and other elements connected to the work, supplies, goods or services.

b)Transportation, fuels, lubricants and other petroleum-derived products.

c)Machinery, equipment, spare parts and tires.

d)Labor, employment benefits and employer contributions established by law.

Payments shall be made in accordance with the amounts resulting from the application of the formulas for price readjustment established by the regulation of this law.

2.Imported goods. When the contracts stipulate the importation of goods by the contractor, the superior administrative authority of the interested entity or agency shall recognize and authorize payment for price fluctuation, verifying for such purpose the price in quetzales of each of the goods stated in the bid or incorporated into the contract and the equivalent price in quetzales paid by the contractor when carrying out the importation, taking into account the exchange differential and the variation in costs. In any case, the contractor is obligated to submit to the corresponding entity the documentation establishing the differences against or in favor of the State.

Payments for work estimates, derived from works contracts for services rendered or for goods and supplies, shall be made to the contractor within the time limit of thirty (30) days following the date on which the complete documentation stipulated in the contract was submitted.

Payment shall be deemed effected when the check or bank credit to the account covering it is made available to the contractor.

The Ministry of Public Finance is the entity responsible for guaranteeing public and free access to the systems in which payments are recorded.

The State bodies, their entities and other dependencies referred to in Article 1 of this law, at the request of the contractor, shall recognize interest responsibilities for destruction or deterioration of the work Article 62, to which they are legally obligated. Such interest shall be calculated on the amount of the debt, taking as a basis the maximum annual interest rate determined by the Monetary Board for tax purposes, and shall be included in the settlement of the respective contract for its payment or compensation, in the event of imposition of fines on the contractor.