Peru dictates measures to reactivate nationally paralyzed public works

Perú - 11 / 04 / 2019

Peru Administrative Law Alert

The past October 31, the Urgency Decree N° 008-2019 was published, which, with a validity period of 1 year, provided certain measures in order to guarantee the continuity of nationally paralyzed public works. These provisions sought the culmination of these projects, in order to achieve an effective provision of the public services involved.

The following are the main changes:

The projects that may be incorporated are:

Works contracted under the scope of the Public Contracting Law,
The work must have a physical advance equal to or higher than 50%, and
Proceed from a valid contract that does not report execution for 3 months or more, or come from a contract terminated or declared void.

Entities will have 20 working days to prepare an inventory of paralyzed public works, and may update it up to December 31, 2019. Based on said inventory, they must prepare a Report on the situational status of the works that should include (i) a legal-financial technical analysis of the work and (ii) everything that is necessary to finish it. This Report will allow entities to identify which works fulfill the conditions indicated in the previous point and, thus, no later than April 30, 2020, approve the prioritized list of paralyzed public works.
Considering this prioritized list, the entity may adopt any of the following measures:

Propose the contractor to continue with the execution of the work, adjusting to the modifications indicated in the Situational Status Report. In this case, the contractor could accept or not the continuity of the project under these conditions, which must be indicated within 5 working days of receiving the decision of the entity.
Terminate the contract, in which case the entity is authorized to elaborate the technical file of the unperformed balance of works, or to contract it with a third party. Hiring the consultant in charge of preparing the technical file, the contractor to execute the unperformed balance of works and the supervisory company, may be carried out by the exception of “direct contracting” regime regulated in the Public Contracting Law.

This indication may also be implemented for those cases of contracts already terminated or declared void before the entry into force of this Urgency Decree.

For direct contracting the execution of the unperformed balance of works, it is not mandatory to invite the other bidders who participated in the bidding process which was developed to contract this project. However, this requirement is still in force for the direct hiring of the consultant in charge of preparing the technical file and of the supervisory company.