Main Benefits & Advantages

Structuring of the project aimed at encouraging the PPP Contractor to comply with the deadlines to start the service, thus avoiding cost overruns due to longer permanence.

The goal is to provide quality services to users, with measurement criteria based on indicators to measure the PPP Contractor’s performance.

Remuneration is conditioned to infrastructure availability, service levels and quality standards at each stage of the project.

The PPP Contractor executes the work with the goal of recovering the invested capital. Therefore, it will have the interest of not delaying its construction and entry into operation.

The PPP Contractor is responsible for maintaining the project in optimal condition and operation, resulting in the execution of quality works, ensuring the maintenance of these during the term of the contract and guaranteeing that the public purpose of providing the services is fulfilled.

Each risk is assigned to whoever can best manage it, either to the Contracting Public Entity and/or the PPP Contractor, unlike other traditional contracting alternatives. This risk allocation translates into benefits for the State in the development and execution of infrastructure, as well as public service in the country.

Comparative Chart

Given that there are different types of contracts where private and public actors work together, we present a comparative (indicative) to point out some differences between PPP contracts (established in Law No. 93 of 2019) and traditional public procurements:

Contractual
Provisions

Contracting under
the PPP modality

Traditional Public Procurement

Legal Basis

Law No. 93 of September 19, 2019, and Executive Decree No. 840 of December 31, 2020, which regulates Law 93 of September 19, 2019, modified by Executive Decree No. 119 of April 27, 2023.

Sole Text of Law No. 22 of June 27, 2006, ordered by Law No. 153, 2020, and Executive Decree No. 439 of September 10, 2020, which regulates Law No. 22, 2006.

Types of contractor selection procedures for infrastructure works, goods, and services.

Bidding
Contracts with an amount of + B/. 15,000,000.00. The proposal is evaluated in two stages, compliance with the technical requirements and in the second stage the economic proposals that have complied with the technical requirements are opened.

As a rule, two types of procedures are applied:
Best Value Bidding (BVB)
Contracts with an amount of + B/. 500,000.00. The aspects requested in the RFP will be weighted in a single stage.
Public Bidding (PB)
Contracts with an amount of + B/. 500,000.00. The price is the determining factor, provided that all requirements and technical aspects are met.

Award

The award will be made to the bidder that has complied with the technical requirements and submits the most beneficial economic offer.

In the BVB, the award will be made to the bidder that obtains the highest score according to the weighting methodology, provided that it complies with the requirements.

In the PB, the award is made to the bidder that complies with the requirements and has the lowest price.

Claims

Admit claims before the General Directorate of Public Contracting and challenges before the Administrative Tribunal of Public Contracting.

Contratos

Ambos son contratos públicos, suscritos entre una Entidad del Estado y un Particular, y refrendados por la Contraloría General, del cual surgen derechos y obligaciones para ambas partes y cuya finalidad es de carácter público.

Purpose

Its purpose is the provision of public goods (infrastructure) and related services.

Initiatives

Both must be originated from the Public Sector.

Resources

Managed through trusts.

Usually managed by the contractor, by means of progress payments or interim financing.

Financing

The Contracting Entity does not require budgetary availability, on the understanding that it is the private party that carries out the project and recovers the cost through the payments made by the project users (self-financed). Except in the case of co-financed projects where the State contributes.

The Contracting Entity pays the contractor’s consideration through its budget.

Terms

Long-term contractual relationship, with a maximum of 30 years, extendable for an additional maximum term of 10 years.

Audit

In both cases the contracts are audited by the Comptroller General of the Republic.

Focus

Focus on results and as a central objective to provide and maintain, in the long term, a quality service in favor of the users.

Focus on complying with technical specifications.

Risk Sharing

A substantial part of the risk is transferred to the private sector.

The State shares risks with the private sector.