One of the major stumbling blocks in getting road works, for one, completed was the inability of the government applying tough sanctions to contractors, who after starting a project, failed to complete it.
With the approval in second and final debate on Thursday of the reform to the Ley de Contratación Administrativa (Law on Administrative Contracting), contractors will now face punishments if they fail to comply with public works contracts.
The bill, that will be become law once President Carlos Alvarado signs it and is published in the official government newsletter La Gaceta, eliminates a previous process that has prevented the suspension of contractors who incur faults of various types.
Currently, if an institution, such as the MOPT (Ministry of transport and public works) verifies that a contractor failed, it can only impose a warning.
According to PLN legislator, Karine Niño, author of the bill, this reform will directly punish contractors that fail to comply and avoid impunity. For example, they may be barred for up to ten years from being awarded future public contracts.
The bill, that was approved in first debate last July, was, as is customary when dealing with controversial issues, sent to the Constitutional Court for analysis to avoid any possible constitutional challenges later on.
On Thursday, the bill was approved by 42 votes (of the 57).
Opponents to the bill pointed out in discussion that the current law already allows for sanctions, that is barring contractors of between 2 and 10 years from future works.
However, as Niño argued, her bill does away with the ‘warning’ that stalls public works to the point of never being completed and creates a particular disqualification process for roadwork contractors that are bad for the State, “without just cause and without having received a prior warning”.
The new procedure implies a sanction barring of between 3 and 10 years for a person or corporation who “fails to comply with a contract or fails to comply with the object of the contract, or who violates the agreed work programs”.
The sanction will include barred from participating in projects of the central government, autonomous institutions, and municipalities.