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Puerto Rico Oversight Board approves standard gov’t procurement framework

The Financial Oversight and Management Board for Puerto Rico approved a set of rules that “should substantially improve the government of Puerto Rico’s practices in purchasing goods and services and should prevent the irregularities and inefficiencies that have plagued the Commonwealth’s Rico’s procurement system for too long,” the regulatory body announced.

The Uniform Regulation for Purchases and Bids of Goods, Works, and Nonprofessional Services of the General Services Administration, is meant to align with best procurement practices, the Board said.

The approved regulation establishes a single procedure for all procurement, including exceptional purchases in emergencies or other situations during which the government must act quickly. The regulation will promote market competition, transparency and accountability, and necessary controls in the acquisition of goods and services.

“This regulation is a big step forward for Puerto Rico,” said the Oversight Board’s Executive Director Natalie Jaresko. “The regulation will enable Puerto Rico to efficiently and effectively procure goods and services at the best possible prices. Competitive bidding for goods and services, transparent contracting, and sound controls are the guiding principle of well-functioning procurement process, and that’s what this new regulation enables.”

“Procurement is like the wiring behind the walls of any house: it is essential to the lives of every resident, but mostly noticed only when it isn’t working – and when it isn’t working, it’s dangerous. Puerto Rico’s faulty wiring has done tremendous harm,” she said.

“From procurement of emergency electricity grid services to inefficient supply purchases, contracting has been opaque and problematic, and the new regulation puts in place the rules, policies and procedures that should put an end to many of the shortcomings that resulted in faulty contracts,” Jaresko said.  

Many of the significant deficiencies of the government procurement process came to light during the Oversight Board’s review of the contracts to purchase COVID-19 test kits earlier this year, revealing a lack of uniform rules for purchases during a government-declared emergency.

The Oversight Board’s review of the regulation proposed by GSA led to substantial changes, including:

  • Minimization of what qualifies as exceptional procurement, allowing direct purchases of goods and services outside the normal procurement processes;
  • Establishment of a defined process for exceptional procurement, including purchases during emergencies;
  • Requirement that a re-bid process take place when no offers or proposals were received in the process of procuring ordinary contracts for goods and services;
  • Bids in open-book format (also known as cost-plus contracts) to require suppliers to include all of their costs, mark ups, and services to assist in the transparency of decision making; and,
  • Publication of all purchase orders, in addition to all contracts, following the same procedure.

“This isn’t just another regulation. It’s the instrument that will allow us to generate significant savings and greater fiscal efficiency,” said GSA Administrator Karla Mercado-Rivera.

“Transparency translates into savings and trust in all sectors. We want to restore trust in government in citizens,” she said. “This way, we’re moving toward complying with the plan entrusted to us by the Board, when it ordered the creation of the new agency model.”

She explained that the process of developing the new regulation, for which it took months to reach a consensus, had the input of representatives of different industries, such as the Puerto Rico Manufacturers Association, the United Retailers Association, and the Contractors Association, among others.

There were public hearings prior to the approval of the new regulatory framework, Mercado-Rivera said.

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This story was written by our staff based on a press release.

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