The Tribunal de Defensa de la Libre Competencia (TDLC) published on March 26 the ICG N°6, which establishes mandatory criteria for the design of bids for municipal public works, with the aim of reducing discretionalities, increasing transparency and promoting competition.
These instructions are the result of a procedure initiated in 2020, promoted by companies in the construction industry and enriched with information from agencies such as the National Economic Prosecutor’s Office, the Comptroller’s Office, the Undersecretariat of Regional and Administrative Development, Chile Compra and multiple municipalities in the country.
Some of the most relevant points of these new guidelines are:
1. The bidding conditions must be clear, objective and non-discriminatory, avoiding subsequent modifications.
2. Minimum award prices are prohibited, a practice that limited effective competition.
3. Minimum deadlines are established for submitting bids, adjusted to the cost of the work (15 to 60 days).
4. Bidding should be carried out in two stages, prioritizing the economic offer (minimum 80%) over other static factors.
5. Prior contacts between bidders are restricted, eliminating simultaneous technical visits.
6. The guarantees required should not exceed the expected economic damages, avoiding unnecessary entry barriers.
These new instructions not only modernize and systematize the criteria that the TDLC had been applying on a case-by-case basis, but also provide legal certainty to all market players, especially municipalities, bidders and control entities.
Pro-Competitive Measures in Public Bidding: Valentina Chin
