COVID-19 in Public Procurement in Chile - Directive of the Department of Public Procurement and Contracting

COVID-19 has been categorised as a fortuitous event or force majeure by the Chilean Public Administration, determining various impacts on the processes and administrative contracts for supplies and services.

Particularly, there is a flexibility and adaptation of the Administration regarding the application of the principles and norms of Public Law in these circumstances.

In this scope of adaptation and flexibility, the Public Procurement and Contracting Department has issued Exempt Resolution No. 237 B, dated 13 April 2020, which approves Directive No. 34, with the following recommendations on public procurement for purchasing institutions:

Optimisation of the purchasing process

Public entities are recommended to prioritise remote procedures during purchases. In particular, the adoption of the following measures is urged:

• Receipt of documents through digital formats. This includes the guarantee instruments.
• Extension of deadlines in bidding, especially for the submission of offers, their evaluation, and the subsequent processing of the award and signing of the respective contract.
• Electronic certification of documents, with electronic signature (simple and advanced), or in the case of electronic processing systems, through the logs that record the workflow and processes.
• The signing and extension of contracts in public purchases equal to or greater than approximately USD 60,000 is allowed, through electronic signatures and documents, respectively.

Supplier support

It is recommended to adopt the following measures in favour of suppliers:

• Require guarantees only to the extent that is strictly necessary, such as, for example, in contracts greater than approximately USD 120,000 (guarantee of seriousness of the offer) and greater than approximately USD 60,000 (guarantee of faithful performance).
• Consider the special situation and context in the amount of the guarantees, if applicable, so that they are reasonable and appropriate.
• The establishment of amounts close to the regulatory minimum (5% of the total amount of the contract) is suggested.
• The payment to suppliers in shorter periods is encouraged.
• Consider the fortuitous event or force majeure as exemptions from or mitigations of liability.

You can review Directive No. 34 of the Department of Public Procurement and Contracting at the following link (Spanish): https://www.chilecompra.cl/2020/04/conoce-la-nueva-directiva-de-compras-con-recomendaciones-para-contrataciones-publicas-durante-la-pandemia-covid19/

We recommend that our clients review the public procurement processes in which they are participating, or those in which they were considering to participate, in order to be clear about the adjustments that have been made or can be made by the Administration as a consequence of this Directive.