Draft bill 198.

Summary.

The draft bill establishes the procurement of specialized Project Supervision services to support contracting public entities during the execution of infrastructure projects. The service covers monitoring, inspection, coordination, technical assessment and risk management against the conditions in tender documents and contracts. It would apply to public procurement projects valued at 40 million balboas or more and public-private partnership projects valued at 75 million balboas or more. Technical support would not transfer the public functions of directing, auditing, controlling, approving or accepting works, or imposing sanctions.

Its stated objectives include identifying risks, deviations and breaches; checking deadlines, costs and quality standards; and supplying technical information for the contracting entity’s decisions. The draft bill amends the glossary in Law 22 of June 27, 2006, to define the Project Supervisor as a specialized individual or legal entity engaged under a service contract. The supervisor must remain technically independent of the contractor and other project participants and provide analyses, reports and recommendations without exercising administrative powers.

For public procurement proceedings involving state investment of 40 million balboas or more, the bill adds to Law 22 of June 27, 2006, a requirement to engage a supervisor. Selection must follow the legally applicable procedures and assess the bidder’s specific experience, the qualifications of proposed professional staff and technical capacity. Regulations and tender documents will develop the requirements according to each project. Reports on contractual progress, assessments and recommendations will be nonbinding technical inputs.

The supervisor must continuously monitor execution; check progress against deadlines, costs, targets and quality through metrics and indicators; follow construction processes and physical and financial targets; and technically verify materials, equipment and components. The supervisor must also submit periodic reports, identify risks and recommend preventive or corrective measures. The service provider must have the required personnel, equipment and technical resources, check that technical documentation is available and current, and assist coordination among participants. The supervisor will answer to the contracting entity for performance of the service, while that entity will retain project direction and administrative management and set the supervision phases, deliverables and deadlines.

The draft bill adds rules to Law 93 of September 19, 2019, for public-private partnership projects with an estimated value of 75 million balboas or more. Supervision will cover the PPP contractor’s obligations and, where the contract so provides, those of the trustee, subcontractors and creditors. The supervisor must be engaged before the execution phase begins and remain for the period set by the PPP contract. The supervision contract will specify activities, outputs, deliverables, staff and monitoring arrangements. The supervisor will provide periodic reports, physical and financial progress analyses, risk assessments and nonbinding technical recommendations. The contracting entity will retain powers including approval, rejection, contract amendment and sanctions; the supervisor may neither issue administrative acts nor make binding decisions.

The Executive Branch (Órgano Ejecutivo) would allocate the necessary budget appropriations in the fiscal year following promulgation and, through the General Directorate of Public Procurement (Dirección General de Contrataciones Públicas), issue regulations within six months of promulgation. Article 14 lists the amended and added provisions and also refers to Law 12 of June 27, 2006. The bill sets commencement six months after promulgation. Its provisions concern the Executive Branch and the General Directorate of Public Procurement and may interest contracting entities, infrastructure firms, technical supervisors, PPP contractors, trustees, subcontractors and creditors.