In Colombia’s unitary state model, there is uniform regulation of public procurement across the entire national territory, and subnational authorities lack regulatory competence in public procurement matters.

This regulation is structured along two dimensions of complexity: a first hierarchical dimension, comprising legislative regulations and administrative regulations that develop the details of legislative mandates, both applicable throughout the national territory. The second dimension involves special regulations based on the specificity of the activity, the source of funds, or the contracting entity.

Regarding the first dimension, the General Statute of Public Administration Procurement Law 80/1993 governs the award, execution, modification, termination and liquidation of public contracts. Most administrative regulations governing contractual activity in general are compiled in Decree 1082/2015, by which the single regulatory decree of the National Planning Administrative Sector is issued, without prejudice to special sector regulations on procurement contained in other compilatory or non-compilatory administrative regulations.

From the perspective of specialism, there are special regulations for specific activities, among which the following stand out:

• Law 1508/2012, which regulates the legal framework for public-private partnerships (PPPs);
• Law 142/1994, on contracts entered into by public entities providing public utility services;
• Law 143/1994, on contracts entered into by public entities providing electricity services;
• Law 1523/2012, on disaster risk management and procurement; and
• Law 685/2001, the National Mining Code, which regulates procurement in the special area of national mining resource management.

Unless otherwise provided by law, gaps in these legislative provisions are supplemented by the general regime mentioned above. Additionally, to ensure consistency in public contractual activity, Article 13 of Law 1150/2007, which amends Law 80/1993, introduced the following obligations common to all entities subject to the procurement regime:

• the mandatory application of constitutional principles from Articles 209 and 267 regarding administrative function and public spending;
• the application of the general regime of prohibitions and incompatibilities under the general law; and
• the obligation to publish all documents related to their contractual activity on the single electronic procurement platform.

The applicability of public procurement rules stems from a definition of public entities, which is constructed based on an organic criterion, such that the rules of the General Statute apply to all organisms, offices and authorities classified as public entities, including:

• all those classified as such by law;
• all dependencies or organisms of the public sector with the capacity to contract; and
• all entities, regardless of their nature, holding more than 50% public capital participation.

However, the applicability of public law rules is not absolute for all entities, as the specificity of their activity or the market in which they operate may result in a light, medium, or full level of applicability.

Levels of Applicability

Light level

The light level of applicability allows certain entities to contract under private law rules, subject only to the aforementioned obligations of applying general constitutional principles on procurement, the general regime of prohibitions and incompatibilities, and publication of their contractual documentation on the single electronic procurement platform.

Medium level

Under the medium level of applicability, a legal authorisation exists to adopt a public procurement legal regime aligned with private law rules, whereby, in addition to the obligations of the light applicability level, these entities may or must incorporate public law provisions on the award or execution of public contracts, such as unilateral public law powers for monitoring contractual performance.

Full level

At the full level of applicability, the general public procurement statute or public law rules apply fully, whereby, in the award phase, public law rules apply as a baseline, complemented by common regime rules, and in the contractual phase – after the award and formalisation of the contract – private law rules apply, with public law rules applying exceptionally, depending on the type of contract, according to Article 13.L.80/93.

Article 32 of Law 80/1993 authorises public entities to enter into any type of contract, governed either by public law or private law provisions, thereby allowing even atypical contracts. In this way, the applicability of public law provisions does not depend on the contract value, but rather on the nature of the public entity and on whether public law applies to it in full, to an intermediate degree, or only residually.

Administrative law specifically regulates the provisions governing certain contracts, such as: public works, consultancy, public service, public funded trusts, and general and special concessions contracts (eg, for transportation, ports, mining, energy and telecommunications).

There is no limitation on foreign bidders’ access to the national public procurement market, beyond registering in the Single Bidders Registry. If awarded – with the exception of certain types of excluded special contracts or those executed abroad – it will be necessary to establish a branch or subsidiary of the company in Colombia during the contract execution period, guaranteeing the contractor’s existence and presence in the market for the contract execution term plus one additional year.

Regarding award criteria, Article 21 of Law 80/1993 allows preference to be given to bids with a higher component of national resources. However, Article 20 of the aforementioned legislation limits this possibility under the principle of responsibility, whereby the Colombian State commits to providing foreign bidders with non-discriminatory treatment, equating their bids to those of nationals.

Reciprocity may be accredited through:

• the bidder originating from one of the member states of the Andean Community of Nations;
• the existence of a free trade agreement applicable to the contract entered into between Colombia and the state from which the bidder originates; or
• in the absence of an applicable free trade agreement, this advantage could be proven through a certificate of reciprocity issued by the Ministry of Foreign Affairs of Colombia.

Awarding authorities are subject to several obligations arising from the constitutional principles of Articles 209 and 269, which permeate all contractual activity. In the pre-contractual phase, public entities must:

• conduct the corresponding market studies to identify viable alternatives for addressing their need;
• plan procurement by identifying budgetary needs and a possible contract execution timeline, on a general annual basis;
• establish and publicise the tender documents (pliego de condiciones) in which the objective solvency requirements for those wishing to participate in the process are set forth; the corresponding selection procedure, the objective scoring criteria for bids, the cost and quality of the goods, works or services to be contracted are clearly established; and the contract liquidation period is identified; and
• publish their contractual actions and make the corresponding documentation available to interested parties.

In the execution phase, the authorities must ensure the execution of the contracted object, such that arrangements must be sought to maintain the equivalence between the rights and obligations established at the time of contracting, and they must exercise control mechanisms through the use of public powers to compel the execution of the contracted object, or safeguard the public interest in the event of impossibility of fulfilment.

Pursuant to the principles of transparency and publicity (Article 24 L. 80/1993 and Article 74 L. 1474/2011), awarding authorities must publish their annual procurement plan, as well as the individual calls for bids for each selection procedure. Calls for bids in public procurement processes must be conducted through the electronic procurement platform.

In such calls for bids, awarding authorities must disclose: 

• the name and address of the contracting entity;
• the address, email and telephone number where the contracting entity will attend to interested parties in the procurement process, and the address and email where bidders must submit documents during the procurement process;
• the subject matter of the contract to be entered into, identifying the quantities to be acquired;
• the selection method;
• the estimated term of the contract;
• the deadline by which interested parties must submit their bid, and the place and manner of submission;
• the estimated value of the contract and the express statement that the contracting entity has budgetary availability;
• mention of whether the procurement is covered by a trade agreement;
• mention of whether the call for bids may be limited to SMEs;
• enumeration and a brief description of the conditions for participating in the procurement process;
• indication as to whether the procurement process includes prequalification;
• the timetable; and
• the manner in which interested parties may consult the process documents.

Tender documents will indicate: 

• a detailed description of the good or service that is the subject matter of the contract, identified with the fourth level of the Goods and Services Classifier, if possible, or otherwise with the third level thereof;
• the selection procedure modality and its justification;
• the selection criteria, including tie-breaking factors and incentives, where applicable;
• the cost and/or quality conditions that the contracting entity must take into account for objective selection, in accordance with the contractor selection method;
• the rules applicable to the submission of bids, their evaluation, and the award of the contract;
• the grounds for rejecting a bid;
• the value of the contract, the term, the payment schedule, and the determination of whether an advance payment must be made, and if so, its value, which must take into account the yields it may generate;
• the risks associated with the contract, the manner of mitigating them, and the allocation of risk between the contracting parties;
• the guarantees required in the procurement process and their conditions;
• mention of whether the contracting entity and the contract subject matter of the tender documents are covered by a trade agreement;
• the terms, conditions, and draft contract;
• the terms of contract supervision and/or management; and
• the period within which the contracting entity may issue addendums.

Under the planning principle, contracting authorities are obliged to carry out prior studies of the goods, services and works required for the fulfilment of the purpose of the contract. In that sense, they must conduct preliminary market consultations that will allow verification of market conditions and will serve as justification for the technical specifications as the foundational administrative act for the procurement process.

Contracting authorities can carry out these preliminary market consultations by asking public and private actors about the current state of the market, and even by conducting technical dialogues for the development of innovative or technically complex solutions.

These preliminary consultations do not commit the contracting authority, nor do they form the basis for obtaining scores subsequently during the selection procedure established in the procurement documents.

The general public procurement regime contemplates one general mandatory award procedure and four exceptional procedures: 

• The general procedure is the open bidding (licitación) under Article 30.L.80/1993.
• The process begins with a planning phase where the entity justifies the need for the contract through preliminary studies and drafts of the tender documents (pliego de condiciones), which establish the rules for participation.
• Following the official opening via a reasoned administrative act, notices are published on the electronic procurement system (Sistema Electrónico para la Contratación Pública or SECOP), and a hearing is held to clarify enquiries and allocate risk.
• Interested parties submit their proposals, adhering strictly to the bidding terms, which the entity then evaluates from technical, economic and legal perspectives. 
• Once the evaluation reports are published for bidders to submit observations, the entity proceeds to award the contract, typically in a public hearing. This award is irrevocable and obliges both parties to sign the contract.

Exceptional procedures are regulated in Decree 1082/2012, and explained in 2.4 Choice/Conditions of a Tender Procedure.

Open bidding (licitación) is the general procurement method. However, the following exceptional selection procedures are permitted depending on the specific matter to be contracted according to Article 2 L.1150/2007. 

• Simplified open bidding (selección abreviada) for the acquisition or supply of goods and services with uniform technical characteristics and commonly used by entities; health services contracts; contracts of lesser amount below the thresholds set by law; disposal of state-owned assets; agricultural products offered through commodity exchanges; contracts for the execution of programmes to protect vulnerable persons; national defence and security contracts; contracts under framework price agreements and demand aggregation instruments; and relaunching of processes previously conducted via open bidding with no bids.
• A merit contest (concurso de méritos) for consultancy services and projects where open contest or pre-qualification procedures may be used to qualify bidders’ experience, intellectual capacity, and organisational ability.
• A minimum amount (minima cuantía) procurement for processes not exceeding 10% of the entity’s budget, regardless of subject matter.
• Direct contracting (contratación directa), which only applies in exceptional cases described in 2.5 Direct Contract Awards.
• Special procedures provided for in special laws that may apply private or public law rules to bid selection. The procedures applied in these specific regimes tend to be similar to the above.

Contracting authorities must identify the applicable selection procedure according to the subject matter of the contract, and this determination may be challenged by interested parties and subject to judicial review.

Direct contracting only applies in the following cases:

• manifest urgency;
• loan agreements;
• inter-administrative contracts;
• intelligence, security, and defence contracts requiring confidentiality;
• contracts for scientific and technological development activities;
• trust arrangements;
• absence of multiple offerors in preliminary market studies;
• professional and management support services;
• personal services contracts;
• artistic works;
• leasing or acquisition of real property;
• expert services;
• agreements with indigenous organisations, Afro-descendant groups, and other specially protected ethnic collectives.

Specific timing obligations for publishing procurement documents vary by selection procedure. For public tenders, up to three notices must be published 10–20 calendar days before bid opening, with two to five calendar days between each, on the contracting entity’s website, depending on the contract’s nature, subject matter, and value.

Within three business days after the bid submission period begins – and upon any interested party’s request – a public hearing must be held to clarify tender and review risk allocation (per Article 4 of Law 1150/2007), with minutes signed by attendees. If needed, the contracting authority may then amend documents and extend the tender period by up to six business days.

Time limits for public tender submission will be set in the tender documents based on the contract’s nature, subject matter, and value. Greater complexity requires longer submission periods.

Contracting authorities may extend deadlines – sua sponte or at more than one bidders’ request – before expiry, by up to half the original term. No addendums may be issued within the three days before the selection process closes (even for extensions), and addendum publication is restricted to business days and hours.

Contracting entities must establish minimum qualifying requirements in the tender documents or invitation to participate, based on the procurement process risk, contract value, and economic sector. These requirements aim to assess eligibility in accordance with:

• legal capacity – the ability to enter into contracts per Article 6 of Law 80/1993, and the absence of ineligibility per Article 8 of this legislation;
• financial capacity – proof of solvency; and
• experience and technical capacity – relevant prior contracts, personnel qualifications, and equipment for the subject matter of the contract.

Depending on the contracted activity or for the purpose of promoting the participation of SMEs in the public procurement market, in merit-based selections (competitive selections), it is possible to shortlist the number of participants for project and consultancy contracts through a pre-qualification process. This allows for the selection of the most suitable candidates based on their experience, as well as their intellectual and organisational capacities.

Regarding SMEs, Article 2.2.1.2.4.2.2 of Decree 1082 establishes that state entities, regardless of their procurement regime, must restrict the solicitation to (set aside the tender for) Colombian SMEs that have been established for at least one year when:

• the procurement value is less than USD125,000;
• requests for restriction have been received from at least two Colombian SMEs; and
• said request for restriction is submitted at least one business day prior to the issuance of the administrative act opening the selection process.

There is also the possibility of restricting the solicitation to those SMEs domiciled within the territorial jurisdiction where the scope of the contract will be executed.

Only bids from tenderers who meet the qualifying requirements will be eligible for evaluation. The scoring criteria are established in the bidding terms issued by the contracting authorities, unless mandatory standardised bidding documents must be applied. Bids may be scored based on price, quality, the inclusion of social or environmental criteria, and national content.

Price must be the sole award criterion in procurement processes conducted through public tenders via reverse auctions, as well as for the acquisition of goods with uniform technical characteristics. Other components may be established as bonus points for bids that meet the minimum requirements, allowing the awarding authority to grant preference to offers that include any of the elements listed under Article 35 of Law 2069/2020.

Contracting authorities can only exclude a bid for specific, objective reasons established in the law or the bidding documents. The following are the primary circumstances under which an awarding authority may exclude a tender:

• failure to meet the qualifying (economic, technical or legal capacity) requirements;
• supervening loss of capacity of the bidder pursuant to Articles 6 and 8 of Law 80/1993;
• if an anomalously low bid is submitted, the contracting authority must require the bidder to justify the bid; if the justification is unacceptable, the bid must be excluded from the selection process; and
• where bids are submitted late or are incomplete, since bids must address all aspects required in the tender documents.

Pursuant to the principles of transparency and objective selection, contracting authorities must clearly establish in the tender documents the manner in which bids will be evaluated in the selection process. Once evaluated, all actions carried out by the contracting authority will be public, and anyone can access them. Evaluations are documented and motivated in the administrative act of award. This act is subject to judicial review.

Irrespective of the applicable regime, contracting authorities must notify their decisions to all participants in the selection process, regardless of whether or not they are awardees. Depending on the selection procedure, notifications may be made directly at the notification hearing or by any of the effective communication means available to the authorities.

Notification of the bidders must occur immediately after the award decision is made, typically during or following the public notification hearing in competitive processes, or if it is not possible or not necessary to have a public hearing depending on the procedure, by other effective means of communication. Award decisions must also be published on the electronic public procurement platform. The award decision must specify the winning bidder, the evaluation method and scores applied to bids, reasons for selection, and any disqualifications.

Mandatory Hearings

In public bidding procedures it is mandatory to have two hearings during the award procedure. 

Risk allocation hearing

Within three days following the commencement of the bid submission period and at the request of any party, a hearing must be held to clarify the tender documents. During that hearing, risk allocation will be reviewed and as a consequence of this, the awarding authority will issue the pertinent amendments to said documents.

Adjudication hearing

Bidders may comment on the responses given by the state entity to the observations submitted regarding the evaluation report, which does not imply a new opportunity to improve or modify the bid. If there are comments that, in the judgment of the state entity, require additional analysis and may affect the sense of the decision to be made, the hearing may be suspended for the period necessary to verify the matters discussed and substantiate the claims made.

There is no mandatory standstill period after the award decision is communicated under Article 25(8) of Law 80/1993. Nonetheless, after the signing and prior to the execution, approval of guarantees is required, along with certification of the contractor’s social security status and the budget availability certificate.

Post-award, the adjudication act exhausts the administrative route, admitting no further internal appeals to the awarding authority. However, if within the period between the award of the contract and its execution, an incompatibility arises, or if it can be proved that the award was obtained by unlawful means, it may be revoked. In such a case, the entity may revoke the award and give it to the second bidder. The specialised administrative jurisdiction is responsible for reviewing award decisions.

During the selection process and prior to execution of the contract, awarding authorities have several remedies that may be exercised. In administrative proceedings, they may correct formal arithmetic errors at any time, provided they do not alter the substance of the decision; and they may address irregularities that may have arisen during the administrative stage before the issuance of the administrative act, to ensure legal compliance either sua sponte or at the request of a party.

If such irregularities persist, judicial authorities may control the decisions. Thus, at the pre-contractual stage, administrative judges may exercise judicial review over the legality of pre-contractual acts within the aforementioned period. Once the contract is executed, the administrative jurisdiction will hear all kinds of disputes between the parties arising from the performance and liquidation of the contract within two years of their occurrence.

Furthermore, if potential violations of fundamental rights occur during the selection process or throughout the performance of the contract, the constitutional judge may order the authority to rectify its conduct in order to prevent or halt such an infringement.

Interim measures are available to suspend the effects of the award prior to the final judicial decision. However, they must: 

• ensure the claim is reasonably well founded and has an appearance of good law;
• evidence a peril in delay in a way that if the measure is not granted, the final judgment would be useless; and
• ensure that suspension does not affect the public interest more than it affects the party making the claim.

Awarding authority’s decisions can be challenged by: 

• the successful bidder or contractor;
• third parties who are affected directly – clearly the case for participants in the bidding process, who have a direct interest in the nullity of the adjudication act being declared;
• the Public Ministry Office, when protecting public integrity and patrimony; and
• the contracting entity, which is generally not empowered to revoke the adjudication act directly.

For controversies regarding decisions prior to contract execution, the corresponding action may be exercised within four months following their notification. For disputes arising after the contract is executed and relating to its liquidation, the awarding authority’s decision may be challenged up to two years from the occurrence of the disputed fact or decision.

The duration of dispute resolution proceedings in public procurement matters depends on whether the parties chose arbitration – available for contract disputes, not for challenges to the legality of the awarding authority’s decisions – or opted for state courts.

In the case of arbitration, the typical average duration is 11 months, depending on the complexity of the matter. In the case of state judicial proceedings, processes may last between four and six years for a first-instance decision, to which an average of two additional years must be added when the second instance is heard by the Council of State – the superior court of the contentious-administrative jurisdiction.

Based on data averages from the Public Procurement Agency, the contentious-administrative jurisdiction, major arbitration centres, the Colombian State Defence Agency, and the General Comptroller’s Office, fewer than 1,000 public procurement claims are generated per year, with more than 25,000 pending cases. Litigation rates are approximately 2% of all contracts, with a success rate below 16%. Claims by value are concentrated in transportation, defence, and public finance-related matters.

Main claims arise from:

• breach of contract due to lack of planning;
• alteration of economic equilibrium;
• failures in contract execution;
• illegality in the imposition of fines and other sanctions; or
• improper contractual interpretation.

The judicial system operates under the principle of free access to administrative courts. Arbitration fees are divided into two main concepts: arbitration centre costs (0.5–2% of the dispute value) and arbitrator fees (around 2% of the claim value), up to a legal limit of approximately USD130,000, as of the date this report was submitted.

Article 27 of Law 80/1993 imposes on the parties the obligation to adopt, in the shortest possible time, the necessary measures to restore the economic equilibrium of the contract if it has been affected, allowing for the required modifications. Such modifications may not exceed an addition of 50% of the contract’s initial value as a general rule. These modifications must not only be technically and legally motivated but also supported by the corresponding budgetary availability and the extension of the relevant guarantees.

Contracts may be terminated upon fulfilment of their object or by mutual agreement between the parties. Exceptionally, the contracting authority may unilaterally terminate the contract in the provision of public services, public works, contracts related to the school feeding programme, or the exploitation and concession of state assets, supply and services contracts in the following circumstances:

• when the demands of public service so require or the public order situation imposes it;
• due to the death, dissolution or incapacity of the contractor;
• due to judicial interdiction or declaration of bankruptcy of the contractor;
• due to cessation of payments, a creditors’ contest, or judicial attachments on the contractor that gravely affect contract performance; or
• due to a declaration of contract forfeiture as a result of a breach on the part of the contractor that gravely and directly affects contract execution, threatening its paralysis.

As an instrument for controlling contract execution, contracting authorities may exceptionally agree on public law clauses that allow them to impose their will over that of the contractor. These clauses are mandatory in contracts subject to the general procurement regime for the provision of public services, public works, contracts related to the school feeding programme or the exploitation and concession of state assets, and may also be agreed upon in supply and services contracts. Such clauses are prohibited in all other contracts. These clauses are intended to ensure contract execution through the following mechanisms:

• unilateral interpretation of contract provisions;
• unilateral modification of the contract (if the modifications alter the contract value by 20% or more of the initial value, the contractor may withdraw from continuing execution);
• unilateral termination of the contract, based on the exhaustive grounds established in Article 17 of Law 80/1993;
• forfeiture (caducidad), when a serious breach occurs that threatens contract paralysis; and
• reversion, when concession or public asset exploitation contracts end, transferring the directly affected elements and assets to the contracting entity without the latter having to pay any compensation.

A legal controversy arose from a lawsuit against Circular 16.2 issued by Colombia Compra Eficiente Agency (CCE), which extended the prohibition to celebrate contracts through the direct award procedure.

The plaintiffs argued that the CCE exceeded its authority by using an expansive interpretation to apply a restrictive rule to both inter-administrative agreements (convenios) and inter-administrative contracts (contratos) when the rule was originally limited by the legislature to “agreements” under Article 38 of Law 996/2005. The central analysis revolved around whether an administrative agency could use an analogy to broaden a legal prohibition that restricts the fundamental capacity of state entities to award contracts using the direct awarding procedure during electoral periods.

The Council of State, as Supreme Judicial Court of the contentious-administrative jurisdiction, upheld the provisional suspension of the circular, ruling that prohibitions must be interpreted restrictively and could not be extended by analogy. The court clarified that while both belong to the genus of “public contracts”, they are legally distinct: inter-administrative contracts involve a direct quid pro quo where one entity provides a service or good in exchange for payment as part of its business purpose; conversely, inter-administrative agreements involve entities associating to co-operate or co-ordinate administrative functions without a primary profit motive or reciprocal exchange of services for price. Consequently, because the law specifically banned “agreements” to prevent the misuse of public funds for electoral support, the CCE could not unilaterally include “contracts” in that prohibition.

Currently, several reform proposals are being processed, of which the following stand out:

• Draft law to strengthen the legal framework for public innovation procurement.
• Draft reform to the administrative regulation to create a preference system for persons with disabilities in public procurement.