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2007 Assessment

Ecuador: Integrity Indicators Scorecard

Ecuador: Integrity Scorecard Report > Sub-Category: Procurement
Indicators		Score
48	Is the public procurement process effective?	93
49	Can citizens access the public procurement process?	50

Indicator and sub-Indicator Details

Is the public procurement process effective?

48a: In law, there are regulations addressing conflicts of interest for public procurement officials.

Score:

YES

Comments: The article 56 lit. c) And lit d) from Ley de Contratación Pública does not allow to contract in cases such as: public official or civil servants that were participating in the precontractual stage and whom boiled up the Committee of Contracts. The regulations are applied to the relatives of the officials government until the fourth degree of consanguinity and second of affinity.

And additionally, in cases of conflict of interest between public institutions the Office of the Judge Advocate General of the State(PGE--Procuraduría del Estado (PGE), could resolve it.

References: Article 56 lit. c) and d), Ley de Contratación Pública.

Peer Review Comments: Public procurement officials in Ecuador must observe regulations regarding the functioning of the National Procurement Agency (PGE, Procuraduría General del Estado).

48b: In law, there is mandatory professional training for public procurement officials.

Score:

YES

Comments: The law clearly establishes objective qualifications of human resources in the public sector. The law indicates that the National Secretariat of Remunerations (SENRES--Secretaría Nacional de Remuneraciones) must establish general programs and training that it will execute over public sector. The training programs must be in accordance with the characteristic functions of the respective unit in the public sector.

References: Article 54 Ley Orgánica de Servicio Civil y Carrera Administrativa. Article 54 lit. i) Ley Orgánica de Servicio Civil y Carrera Administrativa.

Peer Review Comments: This law is not really observed.

48c: In practice, the conflicts of interest regulations for public procurement officials are enforced.

Score:

100

Comments: Ecuador during the analyzed period has increase the transparency in procurement. There were no reported cases of public officials participating actively in this process. Additionally, the law precludes the participation of the persons that have a conflict of interests.

There is also a system called Contratanet. This is a system in which the different institutions in the public sector publicize their requirements and the private sector offer goods and services that could satisfies the demand of public sector.

Lastly the government has implemented a program of public buying, toward the ministries of Industry, Economy and the National Secretariat of Planning and Development. The objectives of this agreement is basically to increase the transparency in procurement.

References: www.contratanet.gov.ec 2007/04/17 www.eluniverso.com Estado administrará compras públicas a través de Consejo.

Peer Review Comments: A better information source would be the Civic Commission of Corruption Control (CCCC Comisión de Control Cívico de la Corrupción) and Congress's Fiscalization Commission (Comisión de Fiscalización del Congreso Nacional).

Peer Review Comments: These regulations are not observed.

48d: In law, there is a mechanism that monitors the assets, incomes and spending habits of public procurement officials.

Score:

YES

Comments: The Controller General of the State (CGE--Contraloría General del Estado), is the agency created by law to control activities concerning expenditures and public resources. In law, the CGE can monitor income and expenditures of those in the public sector, including procurement officers.

References: National Constitution: Article 211 and 212 Ley Orgánica de la Contraloría General del Estado.

Peer Review Comments: The CGE does not monitor this.

48e: In law, major procurements require competitive bidding.

Score:

YES

Comments: Article four of the Law on Public Procurement (Ley de Contratación Pública) has as one of the principal goals to assure in the pre-contractual procedures the best bidder.

References: Article 4 Ley de Contratación Pública.

Peer Review Comments: This is another law that is not observed.

48f: In law, strict formal requirements limit the extent of sole sourcing.

Score:

YES

Comments: The Law on Public Procurement (Ley de Contratación Pública) demands three sources to contract be with the State.

The selection is realized through different processes, which depends on the type of bid, which is related to the value of the contract. There are cases of direct hiring, and cases of exception in the pre-contractual procedures. Pre -ontractual proceeds are skipped in an emergency state.

References: Article 6 Ley de Contratación Pública Article 48 Ley de Contratación Pública.

Peer Review Comments: A better source of information would be the National Comptroller Agency (Contraloría General del Estado).

48g: In law, unsuccessful bidders can instigate an official review of procurement decisions.

Score:

YES

Comments: Unsuccessful bidders can ask for a reconsideration. But this is difficult to do, because there must be indications of illegal activity.

References: Article 72 Ley de Contratación Pública

48h: In law, unsuccessful bidders can challenge procurement decisions in a court of law.

Score:

YES

Comments: However, if fraud was involved in the awarding, this resource can be used. The reclamation is applied to the pre-contractual procedures or awarding procedures.

References: Article 72 Ley de Contratación Pública

Peer Review Comments: A better source of information would be the National Comptroller's Agency (Contraloría General del Estado). Recently, the organization Friends of Live (Amigos por la Vida) questioned a bidding decision made by the Quito municipal government. The organization processed its demand with the National Constitutional Tribunal (TC, Tribunal Constitucional).

48i: In law, companies guilty of major violations of procurement regulations (i.e. bribery) are prohibited from participating in future procurement bids.

Score:

YES

Comments: These articles hint the causes of inability to participate in procurement bids. Additionally, the Controller General of the State (GGE--Contraloría General del Estado has a black list.

References: Article 55 and 56 "Ley de Contratación Pública".

48j: In practice, companies guilty of major violations of procurement regulations (i.e. bribery) are prohibited from participating in future procurement bids.

Score:

100

Comments: The Public Procurement Law ask a certificate of the Controller General of the State (CGE--Contraloría General del Estado) about the fulfillment contracts in the past of the enterprises interested in the next procurement. The CGE has a record of enterprises that failed to fulfill contracts with the public sector in the past.

References: Media outlets

Peer Review Comments: A better information source would be the Fiscal Policy Observatory (Observatorio de la Política Fiscal), which is a CSO.

Peer Review Comments: This is not enforced in practice.

Can citizens access the public procurement process?

49a: In law, citizens can access public procurement regulations.

Score:

YES

Comments: Natural persons or legal institutions can bid and therefore can participate and access the procedures.

References: Article 55 Ley de Contratación Pública (Incapacidades Generales) Article 56 Ley de Contratación Pública (Incapacidades Especificas) Ley de Transparencia y Acceso a la Información Pública.

49b: In law, the government is required to publicly announce the results of procurement decisions.

Score:

YES

Comments: The announcement of the results are between the contracting parts, except in oil contracts, or contracts of general interest. The Public Procurement Law arranges that the president of the committee will notify in writing, to the bidders within the term of three days after the awarding.

References: Article 27 Ley de Contratación Pública.

Peer Review Comments: The National Comptroller's Agency (Contraloría General del Estado) demands such information from the government. The Law of Access to Public Information establishes that bidding decisions must be made public.

49c: In practice, citizens can access public procurement regulations within a reasonable time period.

Score:

100

Comments: There is a difference between what the law says and what happens in reality. Usually the common citizen can know about public procurement regulation from newspapers with the biggest circulation in the country, but it is not easy for the common citizen to access to this documentation.

The different institutions that belong to the central government have the obligation to update their Web sites with the public procurement regulations, but this is the exception. Additionally, there is no free access to documentation of different procurement´s documents.

References: [ LINK ]

[ LINK ]

Informe de Sociedad Civil, Segunda Ronda de Evaluación CICC, Corporación Latinoamericana para el Desarrollo CLD, julio 2006.

Media outlets.

49d: In practice, citizens can access public procurement regulations at a reasonable cost.

Score:

100

Comments: Most of them are not published online. The common citizen, journalist and CSO have to pay a fee to access to this documentation. Additionally, this cost could vary between the sectors, for example the petroleum area it is expensive. But in general, there are a lot of process and regulations, in the end the cost is high.

References: [ LINK ]

[ LINK ]

Informe de Sociedad Civil, Segunda Ronda de Evaluación CICC, Corporación Latinoamericana para el Desarrollo CLD ,julio 2006 .

49e: In practice, major public procurements are effectively advertised.

Score:

100

Comments: The central government has improved the advertising on its Web sites, especially using the system of Contratanet. But these Web sites should be updated with more frequency.

References: www.contratanet.gov.ec

[ LINK ]

Peer Review Comments: There are recent reports of major procurements that were granted without an effective advertisement and bidding process and that involve the executive office. A better information source would be the Fiscal Policy Observatory (Observatorio de la Política Fiscal, which is a CSO), the National Congress and the Civic Commission of Corruption Control (CCCC Comisión de Control Cívico de la Corrupción).

Peer Review Comments: Procurements are advertised when the government desires to do so, but not always.

49f: In practice, citizens can access the results of major public procurement bids.

Score:

100

Comments: There are exceptions, not all results of public procurement bids are available online.

References: www.contratanet.gov.ec

[ LINK ]