Costa Rica: COVID-19 and emergency procedures in administrative contracting

Written by:

Juan Pablo Vargas

jpvargas@consortiumlegal.com

 

It is no secret that the pandemic caused by the COVID-19 virus has set off alarm bells in governments around the world. In countries like Colombia, for example, the National Public Procurement Agency called for all suppliers who were able to provide the goods and services critical to the emergency caused by the spread of COVID-19 to be “Directly Procured” in accordance with a series of provisions that were issued through a well-founded resolution [2].

In the case of Costa Rica, although there is no agency, ministry or public institution in charge of administrative contracting, the fact is that since March 16, the Government declared a state of emergency, a situation that -from a legal standpoint- makes it possible to avoid certain formalities in administrative contracting procedures, as well as enabling the possibility of using innovative or different contracting procedures from those that should normally be applied.

In this brief article, we will go into greater depth on the subject of administrative contracting in emergency situations in order to provide guidance to both the public official in charge of the purchasing process and the possible private sector bidder, on the issues that must be observed in the processing of this type of contractual procedure, at a time when the State needs to supply itself with products that are essential to meet the COVID-19 emergency.

 

  1. Regulatory basis for administrative recruitment in emergency situations

The well-known national treatise writer, Ernesto Jinesta Lobo, considers that the procedures for administrative hiring and contracts in states of emergency and need have a constitutional basis in Article 180.3 of our Magna Carta. In this sense, he maintains that it is from this norm that the Constitutional Chamber – through its jurisprudence – has developed the theory of anomalous circumstances or states of necessity and urgency, which implies that the principle of legality is displaced by that of necessity, and that for this reason the ordinary regulations can be disregarded or replaced by another extraordinary and transitory one that is adapted to the attention and satisfaction of the needs that occur in these abnormal circumstances. [3]

Under this intelligence and with regard to the matter of administrative contracting, the principle of necessity implies that one or more formalities are dispensed with in the tendering procedures and even empowers the creation of substitute or special procedures in order to avoid any type of injury to the public interest, or serious damage to persons or irreparable damage to things.

At the infraconstitutional level, the Administrative Contracting Law (Law No. 7494) regulates what concerns administrative contracting procedures in cases of urgency in Ordinal 80; while at the regulatory level (Executive Decree 33411) it is Article 140 that regulates what concerns this type of contracting, the latter providing -in the interest of the former- the following:

“When the Administration faces a situation whose attention is qualified as urgent, regardless of the causes that originated it, it may dispense with one or all of the formalities of the contracting procedures, or create substitute procedures for these, in order to avoid injury to the public interest, serious damage to persons or irreparable damage to things. To use this emergency mechanism, the Administration requires prior authorization from the Comptroller General of the Republic”.

In view of the above, it is convenient to explain some points contained in the previous paragraph, as well as to explain the procedure to be carried out in order to use this exceptional form of administrative contracting.

 

 

  1. A situation described as urgent regardless of the cause

The legal and regulatory norms are extremely broad in establishing as an indispensable element for this type of contracting the existence of a situation qualified as urgent, regardless of the cause that generated it.

Under that intelligence, the assumption contemplates from unforeseen situations originated by a fortuitous case or force majeure[4], to those generated by a deficient public management, caused -for example- as a consequence of a bad planning or a deficient budgeting[5].

Following this line of thought, the current situation we are facing as a result of a pandemic caused by the COVID-19 is a situation that is qualified as urgent, which configures the causal required by the regulations.

 

 

  1. Power to dispense with any or all of the formalities of the recruitment procedures, or to create substitute procedures

In an emergency situation, he goes on to explain the regulations, it will be possible to dispense with one or all of the formalities of the contracting procedures, or to create substitute procedures, in order to avoid injury to the public interest, serious damage to persons or irreparable damage to things.

In the national panorama that we are currently facing, due to the pandemic produced by COVID-19, the Principle of Necessity displaces the Principle of Legality, which translates – as indicated by the norm – into the possibility of dispensing with one or all of the formalities involved in ordinary administrative contracting procedures, or creating procedures that replace the existing ones.

The first scenario -that is, the possibility of dispensing with one or all of the formalities of the contracting procedures- are those that enable the Administration to use the mechanism of “direct purchase” for cases in which it is not normally possible to apply it, since in “normal” situations such a purchase would have to be made through a public tender or an abbreviated one.

Through the second scenario, the Public Administration can use both contractual forms typical of private law and novel figures of its invention for the purpose of acquiring the goods, works or services it requires to meet the state of urgency or need it is facing and thus be able to adequately satisfy the public interest.

 

 

  1. Previa Autorización de la Contraloría General de la República

It is important to point out that the regulations require the authorization of the Comptroller General’s Office as a requirement for the issuance and execution of the exceptional administrative contracting procedure.

Regarding the authorization, understood as an administrative act of control that operates as a fundamental requirement for the final administrative act (the administrative contract) to be perfect in its elements, Jinesta Lobo[6] has stated the following:

“It is an act of control, since through it one organ or entity empowers another to dictate. an act, deploy an activity or perform a behaviour. In these cases, before the issuance of the final administrative act, an authorizing act must be issued, since the first without the second is relatively null, the authorization integrates the administrative will and its omission can only be remedied by express and subsequent confirmation”.

(…)

“The authorizing act produces ex nunc effects, as soon as it is issued, since the authorization is a requirement for the validity of the subsequent definitive act, which is why it must take place before the main act is issued, and so Article 145, paragraph 3, LGAP states that “When the act requires authorization from another body, it must be prior.

 

Thus, as a mechanism of prior control and in accordance with the aforementioned article 140 of the regulation to the law on administrative contracting, the public entity that, for the purpose of guaranteeing the best possible public interest in an emergency or necessity, wishes to deviate from one or more formalities of the contracting procedures, or requires the creation of a special procedure, must require the corresponding authorization from the Comptroller’s Office, for which the request must be a duly substantiated administrative act that will necessarily have to provide the relevant information to the Comptroller General, who has up to five working days to resolve it, and the configuration of positive silence cannot be interpreted, if it exceeds that period.

Although the legal norm is questionable, in that it grants a very long period of time to the General Comptroller to resolve whether or not to grant authorization, which could have serious repercussions on the time available to the Administration to deal with the emergency, the truth of the matter is that the General Body tries to resolve these matters in the shortest time possible.

To address this pandemic, we have already seen cases in which public entities and bodies have requested authorization from the Office of the Comptroller General of the Republic to use direct contracting procedures and these have been resolved favorably in short response times. This was the case with the request for authorization processed by the Costa Rican Social Security Fund, for the purpose of being allowed to buy directly from a suitable supplier, a reagent for the automated detection of SARS-CoV-2 (RT-PCR) Gene Xpert , which was carried out on April 6, 2020 and was authorized the following day by means of official letter No. 05169 (DCA-1261). Another case was that of San Vicente Paul Hospital, which through official notices dated April 6 and 7, 2020, requested authorization from the Comptroller’s Office to purchase four pulmonary ventilators for critical care of adults, pediatric and neonatal patients directly from a suitable supplier, and obtained authorization on April 7 through official notice No. 05168 (DCA-1260).

In all of these cases, the Comptroller General’s Office has also recommended – based on the principle of transparency – that public entities include the contractual activity performed on their websites so that citizens can be informed about the management of public funds in times of emergency.

 

 

[1] https://www.colombiacompra.gov.co/content/adquisicion-de-bienes-y-servicios-para-la-atencion-del-covid-19-formulario-de-registro

[2] https://www.colombiacompra.gov.co/sites/cce_public/files/cce_documentos/01_-_resolucion_iad_covid-19.pdf

[3] Jinesta Lobo, Ernesto. “Tratado de Derecho Administrativo. Tomo IV”. P.92

[4] Al respecto puede consultarse el Oficio  N° DGCA336-97 del 12 de marzo de 1997 de la Contraloría General de la República

[5] Véase a respecto el Oficio N° 5937 del 12 de junio de 2007 y en igual sentido el Oficio N° 3083 del 09 de abril de 2008, ambos de la Contraloría General de la República.

[6] Jinesta Lobo, Ernesto. “Tratado de Derecho Administrativo. Tomo I”. P.449-450

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