Título VII

The following may not compete or enter into contracts with the State, or hold any other status relating to suppliers and contractors of the State:

a)Persons who are required to register in the registries established in this Law and who have not registered or are disqualified in any of such registries at the time of participating in a public procurement competition. Any contracting entity that determines that, in accordance with the applicable legislation, a person must be disqualified as a supplier or contractor of the State, shall record the disqualification where appropriate.

Upon conclusion of the administrative procedures of the contracting entity, suppliers and contractors of the State that have failed to perform the purpose of the contract for reasons attributable to the supplier or contractor shall be disqualified for a minimum time limit of two (2) years in the registries established in this Law. In the event that the supplier or contractor is a legal person, upon conclusion of the administrative procedure before the contracting entity, the disqualification shall apply for a minimum time limit of two (2) years to the owners and legal representatives of the contractor.

b)Persons who have formal tax obligations pending compliance, or who have liquidated sums due pending payment before the tax administration. In such cases, the tax administration shall record the disqualification.

c)Persons who have obligations pending before the Guatemalan Institute of Social Security -IGSS-. In such cases, the Guatemalan Institute of Social Security -IGSS- shall record the disqualification.

d)Any person who is deprived, by final judgment, of the exercise of his or her civil rights.

e)Entities whose legal representatives, directors or managers have been convicted of the commission of crimes against the public administration, against public faith, tax fraud, smuggling, customs fraud, or crimes defined in the international conventions to which Guatemala is a signatory.

f)The Dignitaries of the Nation, public officials, public employees or the authorities of the entities referred to in article 1 of this Law, as well as their spouses. This prohibition shall apply during the exercise of office. Excepted from the prohibition are hirings of individual persons carried out in an employment relationship or under budget lines 029 or 189, or any other form of hiring for technical or professional services.

g)Relatives within the degrees established by law of the Dignitaries of the Nation, public officials, public employees or of the authorities of the entities referred to in article 1 of this Law, when the contracts must be entered into with the entities in which the relative serves, works, provides services or is under their authority. This prohibition shall not apply to spouses, pursuant to the provisions of subparagraph f) above.

h)Persons who have participated in the public procurement procedures, particularly the issuance of opinions, determination of technical characteristics and reference values, preparation of bidding documents, selection and evaluation of bids, award, approval, execution of contracts and authorization of payments. This prohibition is extended to relatives within the degrees established by law.

i)Persons who have financed political organizations or electoral campaigns in the electoral process immediately preceding the current presidential term or legislature, and the amount of the contribution made exceeds thirty thousand quetzales (Q.30,000.00) annually.

j)State suppliers, companies engaged in the production, manufacture and marketing of medicines that directly or indirectly grant any type of incentive, benefits, bonuses, discounts, premiums or gifts to health sector employees who are involved in the purchase, prescription, dispensing and administration of medicines, shall likewise be excluded as State suppliers; likewise, those suppliers that directly provide trips, seminars or scholarships that are not strictly of professional scientific interest or that include recreational activities or acceptance of companions, and in cases where applicable, must be granted through the superior authorities of the corresponding entity, who under their responsibility may authorize this type of activities.

Within the scope and time limits applicable to the cases contemplated in this article and to the legislation in force, the legal persons in which a participation greater than 5% of the capital or equity is or was held, within the twelve (12) months prior to the call for the public procurement process, under any of the legal regimes established in this Law.

five thousand quetzales (Q.5,000.00). The regulation shall establish the time limit and procedures for the application of the prohibitions established in this article.

It shall be understood that splitting exists when the same executing unit carries out several acquisitions with the purpose of evading public quotation and bidding.

The public official or public employee who in any manner splits the transaction, with the object of evading the conduct of quotation and bidding, shall be sanctioned with a fine equivalent to two point five percent (2.5%) of the total value of the transaction, whether or not the contract has been signed. Executing units of the Ministry of Education that execute resources related to the School Feeding Program are excepted from this provision.

Splitting shall also be incurred when the same executing unit carries out several quotations for the same good or service, within the same fiscal year, whose sum exceeds the amount as of which public bidding is mandatory.

The public official or public employee who has authorized acquisitions that incurred splitting shall be sanctioned with a fine equivalent to five percent (5%) of the total value of the transaction, without prejudice to the administrative, civil and criminal liabilities derived from the act.

The public official or public employee who without just cause fails to comply, within the corresponding time limits, with the obligations assigned to him by this law and its regulation, shall be sanctioned with a fine equivalent to two percent (2%) of the amount of the negotiation, without prejudice to his removal, if applicable.

Other Violations.

Any other violation of this Law or its regulations committed by public officials or public employees, as well as any for which whoever has direct or indirect involvement in the negotiation process is liable, shall be sanctioned with a fine of up to the equivalent of zero point two per thousand (0.2 o/oo) of the total value of the contract, without prejudice to other legal liabilities.

The awardee who does not sign the contract within the time limit indicated to the awardee shall be suspended for a time limit of one year in the corresponding register of Prequalified; without prejudice to enforcement of the bid maintenance guarantee. In case of a repeat offense, the respective registration shall be definitively cancelled.

The determination of delay in the delivery of the work or of the services and supplies shall be made on the basis of the completion dates, partial or total, established in the agreed execution schedule, with the fines to be applied without prejudice to the power of the contracting entity to demand performance of the contract or to rescind it.

For purposes of the fine, only the proportional part of the delay shall be taken into account, so its application must not affect the portion of partial performance.

It shall be sanctioned with payment of a fine to be applied to the contractor of between one and five per thousand of the amount of the works, services, goods or supplies that were not timely executed or provided, for each day of delay incurred by the contractor from the agreed completion date until their total completion; in no case may they in the aggregate exceed the amount of the performance guarantee.

The regulation shall specify the corresponding percentages and procedures regulated in this Article.

Variation in quality or quantity.

The contractor who, in total or partial contravention of the contract, harms the State by varying the quality or quantity of the object thereof, shall be sanctioned with a fine of one hundred percent (100%) of the value represented by the affected part of the transaction. The supervisory companies and the supervisory public officials or employees, as well as those who receive the work, good or service on behalf of the State, under such circumstances, shall be sanctioned with a fine equivalent to three per thousand (3 o/oo) of the value represented by the affected part of the transaction.

The sanctions established in this law and its regulation shall be imposed without prejudice to the establishment of any other applicable liabilities.

Imposition of pecuniary sanctions.

The pecuniary sanctions referred to in this law and its regulation shall be imposed by the Comptroller General of Accounts or by the Superintendency of Banks, as applicable, when it concerns public officials or employees of the State; when it concerns private individuals, the fines shall be imposed by the corresponding superior authority, in accordance with this law.

* When the remedies contemplated in Article 99 and 100 of this Law are filed and it is declared manifestly frivolous and/or manifestly inadmissible, the filing party shall be sanctioned with a fine equivalent to one percent (1%) of the total value of the negotiation, in no case may it exceed the contracting of natural or legal persons the contributed property be described in detail.