New Regulatory Decree of Paraguay's APP Law

By BKM-BERKEMEYER

On April 4, 2024, Decree No. 1467/24 ("The Decree") was promulgated, regulating Law 5102/13 ("The Law"), better known as the APP Law, which improves the conditions and mechanisms of public-private participation, private investments in public infrastructure and provision of services to which they are intended, as well as the production of goods and the provision of public services.

Throughout the time that the Law has been in force, a certain slowness in the general contracting processes has been observed.

In view of the need to introduce changes that better fit the principle of legality, optimizing the evaluation system, the times and adapting the procedures to modern standards similar to those applied internationally, the State observed the need to incorporate changes, improving and modernizing the regulatory provisions.

The most significant changes in the new Decree are:

-Establish in the Bidding Documents the possibility of implementing the system of submitting bids in a single technical-economic envelope. This is because, since there is a prior prequalification, the Administration considers the inclusion of the double envelope system (one administrative and with technical and economic offer and the other with the economic offer) unnecessary in all cases.

-The system of evaluation of bids in the case of a single envelope:

Components: Economic Offer, Administrative Documentation amd Technical Evaluation.

-Even if there is only one bidder, the tender may be awarded. To do this, the Contracting Authority will be required to justify the reasons and issue a favorable Opinion from the Ministry of Economy and Finance ("MEF").

-The possibility that the performance guarantee includes the construction and operation guarantees in a single instrument. However, the possibility of presenting each of the guarantees independently is maintained.

-The MEF will be the rector through the General Directorate of Public Investment ("DGIP"). The MEF will be responsible for issuing policies, programs and plans related to PPP projects.

-As for the review and evaluation periods, they will be shortened, considering that the Technical Planning Secretariat has been absorbed by the MEF.

-The Decree establishes greater clarity regarding the processes and deadlines for submitting Private Initiatives.

In light of the changes introduced in the Decree, it is expected to encourage greater participation of the private sector in contracting processes with the State under the modality presented by the APP Law, also improving the legality, speed and execution of projects.