Decision

21 April 2022: Joint minutes of the first UK-Andean Countries Government Procurement Sub-Committee

Updated 22 January 2024

Joint minutes of the first meeting of the sub-committee on government procurement under the trade agreement between the United Kingdom of Great Britain and Northern Ireland and Colombia, Ecuador and Peru.

UK hosted virtually, 21 April 2022.

The Sub-Committee on Government Procurement under the Trade Agreement between the United Kingdom of Great Britain and Northern Ireland and, Colombia, Ecuador and Peru.

The first meeting took place on 21 April 2022 via videoconference.

1. Opening remarks and introductions

Following introductions, all Parties welcomed each other and expressed their hopes for a productive discussion. Parties agreed to deepen a shared mutual understanding on the topic of government procurement within our respective countries and to strengthen mutual cooperation on trade. Colombia thanked the parties for the opportunity to participate as an Observer.

2. Adoption of the agenda

The agenda was adopted.

3. Sharing understanding of rules of procedure

The parties agreed to adopt the EU-Andean trade committee rules of procedure mutatis mutandis. All parties agreed to adhere to this shared understanding in good faith for this initial government procurement sub-committee. Parties agreed to apply the UK-Andean rules of procedure at a later date once they are adopted by the trade committee.

4. Domestic procurement policy update

Ecuador

Ecuador delivered an update on their government procurement reform, including the regulation to the organic law of the national public procurement system.

Ecuador explained that the last update to the public procurement law was made in 2021. However, the regulation or secondary legislation has not been updated since 2009. Large-scale discussions on the draft of a new procurement regulation text begun in May 2021 with various stakeholders proving feedback. These stakeholders consisted of public universities, domestic businesses, international business, CAF, civil society and more. This work was delivered by the national service on public procurement (SERCOP). The draft regulation has been sent to the Presidency for their analysis and approval.

The proposed secondary legislation will enhance procurement guidelines, including providing more concise language and enforcing stronger consideration of companies that align with Ecuador’s social reforms. These social reforms consisting of environment, gender equality, and female empowerment. Ecuador re-iterated that this inclusion of social value reforms in their domestic policy will not breach any of their international agreements. They expect the secondary legislation will be signed in Q2 of 2022.

Ecuador action

Ecuador agreed to circulate an executive summary on government procurement reform legislation prepared for their president. Ecuador also agreed to produce a summary highlighting amendment to share with all interested parties once the regulation is signed.

Peru

Peru provided an update on their plans for procurement legislation reform. They stated that their government procurement law is in permanent review, but they are not currently working on a new reform to their primary law.

Peru also shared an update on their response to the coronavirus (COVID-19) pandemic. Peru stated that a significant change in procurement had been made during the pandemic to ensure goods could be obtained in the most efficient manner. Peru explained that they are currently working on reforming their regulation and secondary legislation. This focusing on seeking innovation and ensuring that businesses can demonstrate their ability to fulfil the needs of the procuring entity. Peru stated that they will be improving their system for the purchase of medicines. This amendment will improve efficiency alongside the introduction of their new procurement related cancer legislation.

Peru action

Peru agreed to share any final updates on their current government procurement secondary legislation. Peru also agreed to share with the UK the draft of a new primary law if raised with their Congress.

Colombia

Colombia provided updates on new legislation and secondary legislation. The new legislation (law 2195, articles 53, 56 and 58) targets issues relating to corruption in procurement by increasing the transparency of the procurement process. Decree 1860 of 2021 introduces legislation focusing on small- and (or to) medium-sized enterprises (SMEs). This decree ensures SMEs do not receive differential treatment and have advantages for processes in below the internationally agreed thresholds. The new regulation will apply extra rules of origin to the procurement of goods from international providers that Colombia does not have government procurement commitments. These goods will need to include a certain level of national component in order to receive national treatment. Colombia confirmed that this complies with national treatment obligations in the trade agreement.

Four further decrees introduced legislation regarding social policy reforms. These decrees provided new criteria that supports the hiring of women, those with disabilities, and those over the age of 45.

The UK reiterated their interest in receiving more information on the regulation on rules of origin in government procurement.

UK

The Cabinet Office delivered a presentation on domestic procurement reform in the UK. They highlighted the development and implementation of a new procurement regime and stated their focus is now on preparing legislation for parliament. The bill will be introduced when parliamentary time allows. The new regime could come into force as early as 2023.

UK action

The UK offered to share links to their rules reform draft legislation consultations and their domestic procurement updates presentation. The UK will send further follow-up questions to Ecuador regarding their new secondary legislation.

5. Implementing the UK-Andean trade agreement

Ecuador

Ecuador explained that the UK-Andean agreement’s procurement framework is very similar to that of the EU-Andean agreement. Ecuador have decided against issuing new guidance for their procuring entities on the implementation of the UK agreement. They have instead issued a document informing suppliers that UK businesses are not to be treated any differently from EU suppliers.

Peru

Peru stated that international obligations adopted in their trade agreements have already been included in their domestic legislation. Moreover, capacity building has taken place to inform all procuring entities of how to implement the international trade obligations on government procurement. This includes the UE – Andean countries and the UK-Andean agreement effectively, starting in April 2021. Seminars and training courses were delivered to ensure staff in procuring entities were provided with the necessary information to understand the obligations of the agreement.

Colombia

Colombia confirmed that they are preparing for the entry-into-force of the UK-Andean agreement. They are awaiting final signature of the implementing legislation by the necessary ministries and entities now that their constitutional court has already approved the instrument. The next step will be the exchange of diplomatic notes notifying the conclusion of the internal procedures to allow entry into force.

Colombia stated that they have developed a light-touch regulatory mechanisms, through a manual. This manual provides the procuring entities with guidance to take into account the commitments of the trade agreements. Colombia updated the manual in November 2021, stating that the UK is to be considered as beneficiary of the trade agreement’s commitments. However, it mentions that the EU-Andean trade agreement should apply to the UK, considering that we are applying the bridging mechanism. Now that the agreement will shortly enter into force, Colombia will analyse the need to update the manual. This will be done to acknowledge the formal application of the UK-Andean trade agreement.

UK

The Cabinet Office delivered a presentation on the UK’s procurement policy notices (PPNs). The presentation provided instructions and guidance to procuring entities on best practice for public sector procurement.

6. Discussion on procurement market access

The UK made a general remark that not all the issues raised by UK companies can be considered as a breach of the agreement.

In regard to Ecuador

The UK highlighted issues raised by UK firms regarding limitations that exist in Ecuador for accessing the public procurement market for services auxiliary to insurance. This has been an ongoing issue since Ecuadorian executive decree 829 was established in 2008.

Ecuador stated that the agreement covers ancillary/services to insurance, but not auxiliary insurance services conducted by an intermediary such as an agent or insurance broker. Under their current public procurement framework, the limitations to the use of intermediaries of all kinds. This includes insurance brokers and applies to all companies irrespective of national origin (domestic or foreign). This is therefore not a matter of national treatment in potential violation of the government procurement commitments of the trade agreement. They also explained the restriction of intermediaries in any government procurement process has been included as a general limitation to avoid the increase of costs.

The UK highlighted that UK companies have reported concerns about the application of limited tendering open only to Ecuadorian companies for the acquisition of medicines. They are aware that these processes have been carried out by the Ministry of Public Health within ‘emergency’ needs procedures.

Ecuador stated that they have provided clear guidance about the application of national treatment and that they have not heard of any such discriminatory processes. Ecuador also mentioned that they are currently in the process of opening a new reverse auction for the procurement of pharmaceuticals. Ecuador have carefully built the specifications to ensure compliance with international commitments as well as to ensure that only reliable companies participate in the process. Once implemented, individual hospital or health centres will no longer be able to procure pharmaceuticals. The Ministry of Health will procure pharmaceuticals for the entire health system.

The new process was trialled recently and proved to be successful, however more trials will be conducted in the near future. The new process means only companies with a minimum of 3 years of existence can bid on contracts. Foreign companies will also be obliged to provide health certificates when bidding on these contracts. New companies can tender in the Ecuadorian market without the necessary 3-year history. To do this they must provide documentation to prove they are bona fide companies who are able to fulfil the terms of their contractual obligations.

In regard to Peru

The UK informed Peru about the concerns expressed by UK companies regarding restrictive/overly prescriptive and complex requirements that are included in Peruvian tender specifications. These requirements are not always aligned with international standards. UK companies bidding for contracts in Peru have found the tender requirements to be problematic. This has limited UK companies from participating in the tender processes.

Peru agreed that the technical specifications that do not meet international standards can be restrictive. They stated that this can go against the spirit and intent of the trade agreement. Thus, they have put a lot of effort in explaining to the procuring entities about the need of using international standards in the specifications. Peru have established contact points in the Ministry of Foreign Trade and in the Ministry of Economy and Finance. Procuring entities can reach out to both contacts, in order to assist them with tender specifications before launching a procuring process.

Peru highlighted that they have developed different manuals for specific sectors in order to provide them with guidance on the application of national procurement legislation. They shared the links of the public portal where those manuals can be found and agreed to share more detailed information if requested.

Peru acknowledged the cooperation and technical work that has been provided by the UK in this field and both agreed to continue the collaborative work.

UK action

The UK will continue to collaborate with Peru and Ecuador going forward. The parties agreed to keep lines of communication open and address any issues raised in future.

7. e-Procurement portals

The UK gave a presentation on its single online procurement portal, find a tender. The presentation explained that the system is used for displaying notices, and that it is not an end-to-end e-procurement system. The website is fully accessible, free to use, has no geo-blocking, and was created to replace the EU’s tenders electronic daily. The UK further explained that find a tender covers the entirety of UK public procurement contracts above threshold in the government procurement agency. This including contracts in the devolved administrations of Scotland, Wales, and Northern Ireland, but does not cover any tenders from before 1 January 2021. The UK gave a demonstration of the website. 

UK action

The UK offered to circulate their find a tender presentation to Parties and await any follow-up questions.

8. Any other business

No further business.

9. Closing remarks

Following this first constructive specialised committee on government procurement the UK and Andean co-chairs expressed gratitude for the productive dialogue. Both parties shared their hopes for further cooperation in this area in the future.