National Congressional Library

Rule
Identification: Law 19,886
Date Published: 07-30-2003
Date Enacted: 07-11-2003
Institution: MINISTRY OF FINANCE
Title: LAW ON TERMS AND CONDITIONS FOR ADMINISTRATIVE
SUPPLY AND SERVICE CONTRACTS
Version Type
:Latest Version
From: 03-01-2010
Enters as Law
:03-01-2010
Norm ID
:213004
Latest Modification : 01-MAR-2010 Executive Order 11
URL
:http://www.leychile.cl/N?1=213004&f=2010-03-01&p=
LAW No. 19,886
LAW ON TERMS AND CONDITIONS FOR ADMINISTRATIVE SUPPLY
AND SERVICE CONTRACTS
Bearing in mind that the Honorable National Congress has
approved the
following:
B I L L:
CHAPTER I
General Provisions
Article 1.- All contracts subscribed by the State, for good and valuable
consideration, for the supply of goods and services required for the
performance of its duties, shall comply with the rules and principles of this
Law and its regulations. Additionally, these contracts shall also comply
with all rules of Public Law and, in default thereof, with all rules of Private
Law.
For the purposes of this Law, the State shall be defined as the
agencies and services described in Article 1 of Law No. 18,575, except for
public corporations created by law and all other cases provided for by law.
Article 2. For the purposes of this Law, a supply contract shall be
defined as a contract for the purchase or rental or with the option to buy of
goods or movable assets.
The concept of supply contract shall include the following contracts,
among others:
a) The acquisition and rental of data processing equipment and
systems, as well as their devices, software and intellectual property rights
of use.

However, the acquisition of custommade software shall be

considered service contracts
b) The maintenance of data processing equipment and systems, as
well as their devices and software, when contracted jointly with
acquisitions or rental and
c) Manufacturing agreements by which the goods to be delivered by
the supplier must be built according to characteristics previously
established by the State, even when the State is obliged to provide all or
part of the materials.
Article 3.- The following items are excluded from the application of
this Law:
a) Contracting of State employees that are regulated by special
statutes, and independent service contracts subscribed between
individuals and public agencies, regardless of the legal source on which
they are founded
b) Agreements subscribed between the public agencies listed in
Article 2, Section 1 of Decree No. 1,263 (1975), Organic Law of State
Financial Administration, and its modifications
c) Contracts subscribed according to the specific procedures of
international organizations, involving loans or contributions made by this
type of institution
d) Contracts for the purchase, sale and transfer of negotiable
securities or other financial instruments
e) Contracts for the award and execution of public works
All public works contracts subscribed with the Ministry of Housing
and Urban Works for the performance of its duties are also excluded from
this Law, as well as all contracts for the execution, operation and
maintenance of urban works subscribed with third parties according to Law
No. 19,865, which ratified the Shared Urban Funding System.
Notwithstanding the exceptions listed in this section, these
contracts shall comply with the provisions contained in Chapter V of this
Law, as well as all its other provisions and
f) Contracts for defense supplies, subscribed according to Law No.
7,144 and Law No. 13,196 and their subsequent modifications as well as
those subscribed for the acquisition of the following items by the Armed
Forces or the Law Enforcement and Public Security Forces (hereinafter
referred to as the Police Force): military or police vehicles (excluding
pickup trucks, automobiles and buses) advanced and emerging
information technology equipment and systems (used exclusively for
command, control, communications, computer and intelligence systems)
elements or parts for the manufacture, integration,maintenance, repair,
improvement or assembly of weaponry, as well as their spare parts, fuels
and lubricants.
Also excluded are all contracts for goods and services necessary to
prevent exceptional risks to national or public security, as qualified by
Supreme Decree issued by the Ministry of National Defense upon request

by the corresponding Commander-in-Chief or, as the case may be, by the

General Director of the Police Force (Carabineros) or the Director of the
Investigative Police (Investigaciones).
All contracts described in this Article shall be governed by their own
special rules, notwithstanding that stated the final section of Article 20 of
this Law.
CHAPTER II
Requirements for Contracting with the State
Article 4.- All Chilean or foreign individuals and legal entities who
accredit their financial status and technical suitability according to these
rules and regulations shall be eligible for subscribing contracts with the
State, as long as they comply with all other requisites contained herein
and with those established by common law. Suppliers that have been
found guilty of antiunion practices or infractions to fundamental workers
rights within the two years prior to placing bids or submitting proposals for
a contract or agreement in public tendering, private tendering or direct
contracting processes, shall be ineligible.
If the supplier that is awarded a contract or subscribes an
agreement has unresolved debts related to salaries or social security
benefits of its current workers, or workers hired during the two years prior
to being awarded the contract, the first payments of this contract must be
used to settle these debts, and the supplier must prove that all such
obligations have been fulfilled halfway through the period of execution of
the contract, with a maximum limit of six months. Each public agency
must require that the contracted supplier proceed with these payments,
presenting payrolls and spreadsheets that prove complete fulfillment
of these obligations. If these obligations are not fulfilled by the contracted
supplier, the agency has the right to terminate the corresponding contract,
publishing a new call for tenders in which the supplier previously awarded
the contract may not participate.
If the supplier contracted to provide a service has subcontracted
any part of the contracts tasks, the subcontracted party must also comply
with the requisites of this Article.
In the corresponding bidding specifications, each procuring agency
may require the successful bidder, as soon as the contract is awarded and
as the case may be, to grant a power of attorney or to establish a Chilean
or foreign partnership or corporation, in order to subscribe the contract the
object of which must include the execution of this contract according to the
provisions of this Law.
The aforementioned section shall only apply to contracts for the
purchase of goods or services which the successful bidder agrees to
deliver successively.
No public agency, or corporation partially or totally owned by the
State, may subscribe administrative contracts for goods or services with
highranking employees of the same agency or corporation, or with persons
who are related to them as described in letter b), Article 54 of Law N

18,575, the Organic Constitutional Law on General Terms and Conditions

of the State
LAW 20238
Art. N 1 a)
E.O. 19.01.2008
LAW 20238
Art. N 1 b)
E.O. 19.01.2008
LAW 20088
Art. 13
E.O. 05.01.2006
NOTE
Administration or with public corporations in which these persons
participate or with limited liability corporations in which these persons are
partners or with joint stock corporations in which these persons have
stock representing 10% or more of the total capital or with the managers,
representatives or directors of any of the types of corporations mentioned
herein.
The same prohibitions listed in the aforementioned section shall
apply to both Chambers of the National Congress, to the Administrative
Body of the Judicial System, and to all Municipalities and their
corporations, as pertains to members of Congress, members of the First
Level of the Judicial System, and Mayors and City Council members,
respectively.
All contracts subscribed in infringement of the rules established in
the aforementioned section shall become null and void, and the
employees participating in them shall have incurred in infringement of the
principle of administrative probity contained in numeral 6 of Section 2,
Article 62 of Organic Constitutional Law N 18,575 on General Terms and
Conditions of the State Administration, notwithstanding any civil and
criminal responsibilities that may also apply.
However, under exceptional circumstances, the agencies and
corporations described in section four may subscribe these contracts, as
long as they guarantee conditions of equal opportunity similar to those
normally prevalent in the market. This contract must be approved by a well
founded resolution delivered to the superior officer of the procuring
agency, the General Comptrollership of the Republic, and the Chamber of
Deputies. In the case of the National Congress, the resolution shall be
sent to the Senate Ethics Committee or the Chamber of Deputies Conduct
Committee, respectively, and in the case of the Judicial System, to its
Ethics Committee.
NOTE:
Transitory Article 2 of LAW 20,088, published on May 1st, 2006,
modifies this rule, establishing that the modifications made to the Law shall

enter into effect 90 days after the publication of the regulations

establishing the requisites of property statements, according to Transitory
Article 1 of this Law. These regulations are established in DTO 45,
General Secretariat of the Presidency, published on March 22nd, 2006.
CHAPTER III
Procurement Actions
PARAGRAPH 1
Procurement Procedures
Article 5.- The State shall award its contracts through public
tendering, private tendering or direct contracting processes. Public
tendering shall be mandatory for contracts exceeding 1,000 monthly tax
units (UTM), except as provided for in Article 8 of this Law.
Article 6.- The bidding specifications must establish the conditions
that allow for the most advantageous combination between the benefits of
goods or services to be purchased and all their present and future related
costs. In the case of services that are required regularly, and which must
be contracted through periodic tendering processes, higher scores shall
be given to suppliers that offer better salaries and employment conditions.
These bidding specifications may not establish arbitrary differences
between bidding suppliers, nor base their decisions solely on the price of
bids.
Likewise, in the case of service contracts for primary and preschool
Educational establishments, all work contracts for food workers must
consider the payment of salaries during the months of January and
February.
Under all circumstances, the State must promote effectiveness,
efficiency and savings in its procurement and contracting.
Article 7.- For the purposes of this Law, the following definitions
shall apply:
a) Public Tendering: administrative procedure involving a contest in
which the State publishes a call for tenders, inviting all interested
suppliers to submit proposals according to the corresponding bidding
specifications, after which the most convenient bidder is awarded the
contract.
In public tendering processes, anybody may place a bid, and the
call for tenders must be published using the public access systems
provided by the Public Procurement and Contracting Bureau, according to
the provisions established in the regulations. Also, in order to further
advertise its call for tenders, the procuring agency may publish one or
more notices according to the provisions established in the regulations.

b) Private Tendering: administrative procedure consisting of a

contest, which must be previously approved through a well founded
resolution, in which the State invites certain suppliers to submit proposals
according to the corresponding bidding specifications, after which the most
convenient bidder is awarded the contract.
c) Direct Contracting: procurement procedure which, given the
nature of the negotiation involved, must be carried out without following
the requisites of a public or private tendering process. In each specific
case, these circumstances must be duly accredited as provided in the
regulations.
The State may not divide its purchases into several contracts in
order to vary the procurement procedure.
Article 8.- Private tendering or direct contracting processes shall
proceed in the following wellfounded cases:
LAW 20238
Art. nico N 2 a)
D.O. 19.01.2008
LAW 20238
Art. nico N 2 b)
D.O. 19.01.2008
a) If no suppliers place bids in a public tendering process. In this
event, a private tendering process must first be executed, and if once
again no suppliers place bids, only then may the procuring agency resort
to direct contracting.
The bidding specifications for the public tendering process must be
the same as those used for direct contracting or private tendering
processes. If the bidding specifications are modified, the procuring agency
must once again proceed according to the general rules
b) If a contract has been terminated before the deadline as a result
of supplier negligence or other grounds, and the remainder of which does
not exceed 1,000 UTM
c) In cases of emergency, urgency or unforeseen circumstances,
established through a wellfounded resolution by the superior officer of the
procuring agency, notwithstanding the special provisions in cases of
earthquakes and natural catastrophes as provided for by all applicable
laws.
Notwithstanding the validity or invalidity of the contract, the superior
officer of the agency that has improperly qualified a situation as an
emergency, urgency or unforeseen circumstance, shall be punished with
a fiscal fine of 10 to 50 UTM, depending on the total value of the contract.
This fine shall be applied independently from any other administrative
sanctions that may apply under the current legislation, and shall be
enforced according to Article 35 of Decree No. 1,263 (1975)
d) If only one supplier offers the goods or services
e) In the case of service contracts to be subscribed with foreign
suppliers and executed abroad

f) In the case of confidential services, the publication of which might

adversely affect national security or interests (this situation must be
determined by Supreme Decree)
g) In cases where, given the nature of the negotiation, the contract
may have characteristics that make it absolutely necessary to resort to
direct contracting, according to the criteria listed in the regulations of this
Law and
h) When the amount of the purchase is under the limit established
in the regulations.
In all the cases set forth above, the particular circumstances must
be accredited, including the specific proposals or bids in the cases
described in the regulations.
In the cases described in the previous sections, except for letter f),
the wellfounded resolutions authorizing direct contracting must be sent to
the Public Procurement Information System within 24 hours. The
resolutions or agreements issued by public agencies according to this
Law, and authorizing private tendering processes, must be published in
the same way and within the same deadline.
Whenever direct contracting is used, a minimum of three quotations
shall be required, except in the cases described in letters c), d), f) and g)
of this Article.
Article 9.- The procuring agency must declare inadmissible all bids
that do not comply with the requirements established in the bidding
specifications. It shall also declare a public tendering process abandoned
whenever no bids are submitted or when the bids submitted do not serve
its interests.
In both cases, the statement must be made through a wellfounded
resolution.
Article 10.- The contract shall be awarded through a wellfounded
resolution by the competent authority, which shall be communicated to the
successful bidder.
The successful bidder shall be the one that submits the overall most
advantageous proposal, according to the conditions described in the
respective bidding specifications and the evaluation criteria set forth in the
regulations.
Both suppliers and procuring entities shall carry out their tendering
procedures in strict compliance with the administrative and technical
specifications that govern these proceedings. Bidding specifications must
always be previously approved by the competent authority.
The regulations shall determine the requirements to be included in
the bidding specifications.
PARAGRAPH 2
Guarantees Required for Contracting

Article 11.- According to the regulations, the procuring agency shall

specify any guarantees that are considered necessary in order to ensure
the seriousness of the bids submitted, as well as proper and timely
execution of the final contract, according to the conditions and means
established in the corresponding bidding specifications. In the case of
service contracts, these guarantees must also ensure payment of the
salaries and social security obligations of the workers hired,
notwithstanding the provisions established in Article 20 of Law N 17,322,
and shall be valid up to 60 business days after completion of the services
or termination of the contract. The superior officers of the procuring
agency shall be directly responsible for the custody, maintenance and
validity of the requested guarantees.
The guarantees deemed necessary to ensure seriousness of the
bids, fulfillment of worker salaries and social security obligations, and
proper and timely execution of the final contract, shall consider an amount
that adequately serves its purpose without discouraging the participation
of other suppliers in the tendering process.
In order to ensure these situations, fines and other sanctions
against suppliers may be made effective.
Cash advances may only be given to a supplier if their value is
appropriately and fully guaranteed.
LAW 20238
Art. nico N 3 a)
D.O. 19.01.2008
LAW 20238
Art. nico N 3 b)
D.O. 19.01.2008
PARAGRAPH 3
Powers of the State
Article 12.- Each institution must periodically create and evaluate an
annual procurement and contracting plan, with minimum contents defined
by the regulations.
Each institution must establish a methodology for the annual
evaluation of the results of the contracts subscribed, as well as accounting
for the goods purchased and services contracted. This information must
be published on the Public Procurement Information System and the
National Supplier Registry, as provided for by the Public Procurement and
Contracting Bureau.
Article 13.- The administrative contracts governed by this Law may
be modified or terminated in advance in the following cases:
a) Mutual consent between the contracting parties.
b) Gross nonfulfillment of the obligations of the supplier.

c) Notorious insolvency of the contracting party, unless its

guarantee is improved or the existing one is sufficient to ensure fulfillment
of the contract.
d) If so required by the public interest or national security.
e) In all other cases established in the corresponding bidding
specifications or in the contract. These conditions may establish
mechanisms of compensation and indemnity for the contracting
parties.
The resolutions or decrees that establish such measures must be
wellfounded.
PARAGRAPH 4
Releases and Subcontracting
Article 14.- The rights and obligations arising from a tendering
process shall be nontransferable.
This shall be understood without prejudice of any special law
that expressly provides for the release of these rights and obligations.
All documents justifying the loans deriving from the tendering
process shall be transferable according to the rules of common law.
Article 15.- Although the procuring agency may arrange the partial
execution of a contract with third parties, the liability and obligations for its
enforcement shall rest exclusively on the successful bidder.
However, subcontracting shall not be permitted in cases specifically
described in the regulations, or as a result of an express prohibition in the
corresponding bidding specifications.
PARAGRAPH 5
Supplier Registry
Article 16.- The State shall establish an Official Online Supplier
Registry under the Public Procurement and Contracting Bureau.
All Chilean and foreign individuals or legal entities that are eligible
for subscribing contracts with public agencies may register with this
Supplier Registry. The Public Procurement and Contracting Bureau may
establish semestral or annual registration fees to be paid by suppliers, in
order to finance the direct operating costs of the Supplier Registry,
ensuring that this shall not hinder or prevent free and equal access of
suppliers.
This Supplier Registry shall be public and shall comply with the
rules and regulations of this Law.
Procuring agencies may require suppliers to register with the
Procurement Bureaus Supplier Registry in order to subscribe their final
contracts.

The Public Procurement and Contracting Bureau may entrust the

economic, financial and legal evaluation of suppliers to external
professionals and technicians (whether individuals or legal entities),
through a prior public tendering processes.
Notwithstanding, the decision to approve or reject supplier
applications shall be made by the Public Procurement and Contracting
Bureau and may be challenged according to the provisions of Chapter V.
In order to subscribe certain types of contracts, suppliers may also
be required to participate in other official supplier registries for certain
public agencies or contracting categories. These registries shall be
governed by Supreme Decree issued by the corresponding Ministry.
These registries may be online or otherwise. If they are online, they must
be compatible with the format and characteristics of the registry described
in Section 1. These registries must always be public.
Notwithstanding, the Armed Forces and Police Force may keep
classified or secret registries for goods and services that are not governed
by this Law, according to their own internal laws.
Article 17.- The Regulations shall establish the system and
classification criteria for suppliers, registration requisites for each category,
and grounds for ineligibility, incompatibility, suspension or elimination from
the registry due to nonfulfillment of obligations or other grounds. The
regulations must guarantee suppliers free access to the registry and an
objective and wellfounded evaluation.
CHAPTER IV
Procurement and Contracting Through Electronic Means and Information
System for Procurement and Contracting by Public Agencies
Article 18.-The public agencies governed by this Law must quote,
tender, contract, award, request delivery and, in general, proceed with all
their procurement and contracting processes for goods, services and
works included in this Law, using only the online or digital systems
established for those purposes by the Public Procurement and Contracting
Bureau. Such use may be direct or indirect, through open or closed
networks, operating on e-commerce platforms or digital trading markets,
either individually or subject to the benefits of the framework agreements
subscribed by the Procurement Bureau. These activities must comply with
the corresponding organic laws, the law of electronic signatures and the
rules established by this Law and its regulations.
Generally, the public agencies governed by this Law may not award
contracts if they have not published calls for tenders through the online or
digital systems established by the Public Procurement and Contracting
Bureau. However, the regulations may determine specific cases in which it
is possible to conduct procurement and contracting processes without
using these systems.

Article 19.- This Law hereby establishes the Public Procurement

and Contracting Information System, under the responsibility of the Public
Procurement and Contracting Bureau, which shall govern the procurement
processes of the agencies listed in Article 1 of this Law, and which shall be
made available to the general public according to provisions established in
the regulations.
This Information System shall be open to the public and free of
cost.
Article 20.- Public agencies must use the information systems
established by the Public Procurement and Contracting Bureau to publish
the basic information regarding their procurement processes and all other
information required by the regulations. Such information must be
comprehensive and appropriate, including the calls for tenders, reception
of bids, clarifications, replies and changes to the bidding specifications, as
well as the results of the tendering processes for the acquisition of goods
and contracting of services, manufacture and works, all according to the
regulations.
The public agencies governed by this Law shall not be obliged to
use the abovementioned Information System to publish any information
regarding purchases and contracting qualified as secret, classified or
confidential according to law. The Armed Forces and Police Force shall
comply with this obligation according to their current legislation on
document handling, use and processing.
Article 21.- The public agencies that are not governed by this Law,
except for public corporations created by law, must comply with the rules
of Articles 18, 19 and 20 of this Law, providing the basic information
regarding their contracting of goods, services and works, as well as all
other purchases described in the regulations.
CHAPTER V
Public Procurement Court
Article 22.- This Law hereby creates a court, called the Public
Procurement Court, with its headquarters in Santiago.
This Court shall be composed of three lawyers, with their
corresponding substitutes, designated by the President of the Republic
from among a prior set of candidates submitted by the Supreme Court.
This set of candidates shall be defined successively, taking names
from a list created specifically for this purpose by the Court of Appeals of
Santiago, through public contest. This list may include only Chilean
lawyers with an outstanding professional or academic background proven
experience in the field and no less than ten years of professional practice
or who have belonged to the Highest Level of the Judicial System, as long

as they have been on the Outstanding List for the last five years. Under no
circumstances may this list include professionals who have been demoted
from their judicial positions, whether in the annual evaluation process or as
a result of any other situation.
The members of the Court shall select one of its members to act as
chairman for a period of two years, with the possibility of reelection.
The members appointed as substitutes shall hold the position that
has been assigned to them in cases in which, for any reason, this role is
not being performed by the senior member. This substitute role may not
extend beyond six consecutive months, at the end of which the position
must necessarily be filled by a senior member, through the procedure
described above, for the remainder of the period.
The members of the Court shall be paid a sum equivalent to
onethirtieth of the Grade IV salary (corresponding to a judge of the Court
of Appeals) for each session they attend, with a maximum of twelve
monthly sessions.
The members of the Court may hold this position for a period of five
years, and may be redesignated in the same manner as before.
This Court shall rule according to the law and shall be subject to the
managing, correctional and economic supervision of the Supreme Court,
according to Article 79 of the Political Constitution of the Republic.
A decree issued by the Supreme Court shall regulate all matters
related to its internal administrative operation, watching over the efficient
resolution of the matters dealt with by the Court.
Article 23.- The Court shall implement a public contest to designate
an independent lawyer of utmost confidence and subordination, who shall
act as a notary for the Court and perform any other duties that this Court
deems necessary.
The Public Procurement and Contracting Bureau must provide the
infrastructure, technical support, human resources and materials
necessary for the proper operation of the Court.
Article 24.- The Court shall have jurisdiction try challenges against
illegal or arbitrary acts or omissions occurring during the administrative
procurement procedures of public agencies governed by this Law.
The challenging procedure shall proceed against any illegal or
arbitrary act or omission that takes place during a tendering process,
between the approval of the bidding specifications and the award of the
contract, including both actions.
The challenging procedure may be presented by any individual or
legal entity that has an ongoing interest in the corresponding procurement
procedure.
This claim must be filed within a maximum period of ten business
days from the moment the affected party takes notice of the act or
omission that is to be challenged, or from its publication. It shall be
presented directly to the Public Procurement Court, but when the

interested partys address is outside the city where the Court is located, it
may be presented through the corresponding Regional Intendancy or
Provincial Government. In such an event, the Intendant or Governor, as
the case may be, must refer it to the Court on the same day, or at the
latest on the next business day after it is received.
The claim must present the facts that constitute the alleged illegal
or arbitrary act or omission, the identification of the rules or regulations on
which the challenge is founded, and the specific petitions being submitted
to the Court.
The Court may declare inadmissible any challenges that fail to
comply with the requisites listed in the previous sections, and the
challenger shall have five straight days from the notification of
inadmissibility to correct the challenge.
Article 25.- Once a challenge is admitted for trial, the Court shall
notify the corresponding public agency, forwarding the complete text of the
claim filed so that, within a maximum period of ten business days from this
notification, the public agency may report back to the Court regarding the
challenge and any other matters the Court may require.
Through a wellfounded resolution, the Court may decree
suspension of the administrative procurement process involved in the
challenging procedure.
Once the report is received, or after the maximum period of ten
business days indicated in Section 1 has elapsed without the public
agency having reported back, the Court shall try the matter and, if it finds
that there has been or may have been a dispute regarding substantial and
pertinent facts, it shall admit the case for the presentation of evidence and
establish, in the same resolution, the substantial controversial facts that
apply.
As soon as this resolution has been notified to all parties, a
common discovery period of ten business days shall begin, during which
the challenger must submit all the evidence required by the Court. If the
challenger wishes to provide testimony, a list of witnesses shall be
submitted within the first two business days of the discovery period. The
Court shall appoint one of its members to examine the evidence.
After the discovery period, the Court shall summon the parties to
hear judgment. After this notification, no further evidence of any nature
shall be admitted.
After receiving the claim, the Court may, on its own accord, decree
any of the measures listed in Article 159 of the Civil Procedure Code or
other procedures designed to verify the disputed facts. These measures
must be carried out within ten business days from the date of the decree.
At any rate, they must be decreed and completed before the end of the
discovery period in order to deliver a sentence.
The incidents that might emerge in the trial shall not suspend its
course, and shall be substantiated in a separate branch.

The final sentence must be passed within ten business days from
the date of the decree summoning the parties to hear judgment.
Article 26.- In the final sentence, the Court shall deliver its verdict
regarding the legality or arbitrariness of the challenged act or omission,
and shall accordingly order the measures necessary to restore the rule of
law.
The final sentence shall be notified by a judicial resolution. The
party affected by this resolution may, within five business days of
notification, present the Court with an appeal, which shall be tried by the
Court of Appeals of Santiago. The appeal shall be tried for restorative
purposes only.
The appeal shall be tried without hearing arguments from either
party, unless the Court requests them. In such an event, the case shall be
added to the schedule extraordinarily. The trial of the case shall not be
suspended for the reasons established in No. 5 of Article 165 of the Civil
Procedure Code. At any rate, the Court of Appeals may use a wellfounded
decree ordering not to innovate for a period of up to thirty days,
renewable.
The ruling on the appeal must de delivered within ten business days
of the reception of the case, and no further recourses shall proceed.
Article 27.- The challenging procedure shall be tried according to
the rules contained in this Chapter. Additionally, the provisions common to
all procedures established in Book I of the Civil Procedure Code shall
apply, as well as those common to all ordinary civil trials of the same brief
and summary nature as this procedure.
CHAPTER VI
Public Procurement and Contracting Bureau
Article 28.- This Law hereby creates a decentralized public agency,
the Public Procurement and Contracting Bureau, under the supervision of
the President of the Republic through the Ministry of Finance, with its main
headquarters in the city of Santiago.
Article 29.- The executive management, organization and
administration of the Public Procurement and Contracting Bureau shall
correspond to a Director of absolute confidence of the President of the
Republic, who shall be the highest authority of this agency.
Article 30.- This agency shall have the following duties:
a) To advise public agencies in the planning and management of
their procurement and contracting processes. For this purpose, the
Procurement Bureau may subscribe agreements for consultancies to
design their training, assessment and contract evaluation programs.

b) To tender the operation of the Information System and other

means of online procurement and contracting for public agencies, to
supervise its proper operation, and to act as counterpart for the system
operators.
However, in specific cases described in the regulations, the Public
Procurement and Contracting Bureau shall be authorized to operate the
system directly.
c) To subscribe agreements with the appropriate public and private
entities for the purposes of gathering information to complement the
background information of the supplier registry described in Article 16.
d) On its own accord, or at the request of one or more public
agencies, to tender goods and services through framework agreements
that shall be governed by the provisions of this Law and its regulations. In
terms of the goods and services included in these framework agreements,
the public agencies bound by this Law shall be obliged to purchase their
products using the agreements, contacting the successful bidder directly
through the Procurement Bureau, except whenever they may obtain more
advantageous conditions directly on their own account. In such a case, the
agency must record all corresponding background information for its later
verification and control by the corresponding supervising entity.
Public agencies that independently obtain more advantageous
conditions for goods or services for which the Public Procurement and
Contracting Bureau currently maintains framework agreements, must
report these conditions to the Public Procurement Bureau. With this
information, the Bureau must take the necessary steps to include these
conditions in the framework agreement and extend them to the rest of the
public agencies.
Municipalities shall not be obliged to subscribe framework
agreements, without prejudice of which they may individually or collectively
adhere to them voluntarily.
The Armed Forces and the Police Force shall not be obliged to
subscribe framework agreements, for certain goods and services
respectively determined by the Army Director of Logistics, the Director
General of the Navy Services, the Commander of the Air Force Logistic
Command, the Director of Logistics of Carabineros and the Head of the
Logistics Department of the Investigative Police, according to the criteria
defined in the regulations.
e) To represent or act as an attorney for one or more public
agencies governed by this Law, in the tendering processes for goods or
services according to the provisions established in the regulations.
f) To manage, update and tender operation of the Supplier Registry
described in Article 16, granting technical and financial certification
according to the regulations.
g) To promote the most possible competition in the States public
procurement procedures, developing initiatives to include the highest
number of bidding suppliers. It must also inform current and prospective

bidding suppliers of the rules, procedures and technologies currently being

used by the State.
h) To establish the policies and conditions of use of the online or
digital information and procurement systems that are available.
According to letter b) of this Article, the Public Procurement and
Contracting Bureau may charge a fee for the operation of the information
systems and other means of online procurement and contracting to be
tendered.
These fees must be established through a wellfounded
resolution issued by the Public Procurement and Contracting Bureau.
The functions and duties set forth above must in no way limit or
restrict the powers established by special statutes for the Commanders-inChief of the Armed Forces, the General Director of Carabineros and the
General Director of the Investigative Police.
Article 31.- The assets of this agency shall include:
a) The funds allocated each year in the Budget Law
b) The goods acquired and the proceeds of these acquisitions
c) The contributions from other public or private entities, whether
domestic or international and
d) All other income generated by its own operations and those that
lawfully pertain to it.
Article 32.- The Public Procurement Bureau staff shall be governed
by the provisions of Law No. 18,834, the Administrative Regulations for
Public Employees. The Public Procurement Bureaus superior officers
(department heads) shall be of absolute confidence of the Director.
The system of salaries for the Bureaus regular staff and
independently contracted workers shall correspond to that of the
supervising institutions, according to the terms of Title I of Decree No.
3,551 (1981), and the rules that have modified it, including the allocation
described in Article 17 of Law No. 18,091, which replaced Article 11 of
Law No. 19,301, according to that provision, in which the Director must
report annually to the Ministry of Finance on this matter. The bonus
established in Article 5 of Law No. 19,528 shall also be applied.
Article 33.- The following staff structure for the Public Procurement
and Contracting Bureau is hereby created:
Staff Categories Degree
(scale of
supervisors)
Number of
Positions
Superior Officers
National Director 1 1
Department Heads 3 4
Professional Staff

Professionals 4 3
Professionals 6 3
Professional 9 1
Technical Staff
Computer Technicians 14 1
Administrative Staff
Administrative 16 1
Administrative 18 2
Administrative 19 1
Auxiliary Staff
Auxiliary 20 1
TOTAL STAFF 18
In addition to the general requirements contained in Law No. 18,834
for State workers, these positions shall also require the following:
Superior Officers and Professional Staff:
a. Professional or academic degree, granted by a Stateowned
or Stateaccredited university, and
b. Experience in information technologies, supply management or
administrative law.
NOTE

Article 1 from the Executive Order 11 of the Ministry of Finance,

issued on 03-01-2010, creates in the list of the staff in the The Public
Procurement Bureau, contained within this article, the position that is
indicated below
Staff Categories Degree
(scale of
supervisors)
Number of
Positions
Degree Director affected by article 8 of the Adminstration Statute
Director
Total Staff

10

1
1

Article 34.The modes that govern the agreements with the legal
entities described in Article 16 of Decree No. 1,608 (1976), and its
regulations, are provided by the regulations of this Law. Until these
regulations are passed, Supreme Decree No. 98 of the Ministry of
Finance (1991) shall continue remain in effect.
The contracting of complementary actions such as those described
in Law No. 18,803 must be made according to Section 3, Article 8 of Law

No. 18,575, in cases in which a private tendering process is conducted for

those contracts.
Article 35.- The Public Procurement and Contracting Information
System shall be the legal successor of the system established by
Supreme Decree No. 1,312 of the Ministry of Finance (1999).
Article 36.- This Law hereby modifies Section 2, Article 3, letter b) of
Supreme Decree No. 104 of the Ministry of the Interior (1977), and
establishes the renewed, coordinated and systematized text of Law No.
16,282, including permanent provisions for earthquakes or natural
catastrophes, inserting the expression or private between the word
public and the phrase to the agencies.
Article 37.This Law hereby revokes Article 28 of Decree No. 3,529
(1980) Article 16 of Decree No. 2,879 Article 84 of Law No. 18,482 and
Supreme Decree No. 404 of the Ministry of Finance (1978), which
established the renewed, coordinated and systematized text of Delegated
Law No. 353 (1960).
This Law hereby replaces Article 66 of the Organic Constitutional
Law of Municipalities, with the following:
Article 66.- The administrative procurement procedures carried out
by the Municipalities shall be governed by the Law on Terms and
Conditions for Administrative Supply and Services Contracts and its
regulations.
Notwithstanding the aforementioned, in the case of framework
agreements, these must be established according to Section 3, letter d)
of Article 30 of this Law.
Article 38.- This Law hereby establishes the following modifications
and revocations to Law No. 18,928, which established rules regarding
purchases and transfer of goods, movable property and services for the
Armed Forces:
a.This Law hereby substitutes Section 1 of Article 1 with the
following:
Article 1.This Law hereby authorizes the Army Director of
Logistics, the General Director of the Navy Services, and the
Commander of the Air Force Logistics Command to purchase physical
or intangible goods and contract or convene services in representation
of the State, for free or for good and valuable consideration, according
to the Law on Terms and Conditions for Administrative Supply and
Services Contracts. They may also transfer physical or intangible
goods, whether for free or for good and valuable consideration, and
subscribe contracts for the rental, commodatum or other agreements
allowing for the use or enjoyment of these goods by the corresponding
institution.

b.This Law hereby revokes Section 1 of Article 3.

c.This Law hereby substitutes Section 1 of Article 4 with the
following:
Article 4.The procedures for procurement processes shall be
established in the special regulations that shall be issued jointly to this
effect by the Ministries of Finance and National Defense. As for the
transfers, they shall be governed by the regulations of Decree No. 42
of the Ministry of Defense National (1995).
d.This Law hereby substitutes letter c) of Article 4 with the following:
c) To authorize the purchase of food, clothing, equipment, fodder,
fuel and lubricants in the last quarter, to be charged to the funds of the
subsequent years Budget Law, provided that these goods are
consumed during the term of the corresponding Budget Law and
according to the regulations issued jointly for this purpose by the
Ministries of Finance and National Defense. In the event that such
purchases require advances of funds, the provisions of the preceding
letter b) must be complied with.
e) This Law hereby revokes Article 6.
f) This Law hereby substitutes Article 11 with the following:
Article 11.The rules of this Law and the Law on Terms and
Conditions for Administrative Supply and Services Contracts shall
apply, whenever they may be pertinent, to the Police Force, and the
powers given to the Commanders-in-Chief of the Armed Forces and
the Army Director of Logistics, the General Director of the Navy
Services and the Commander of the Air Force Logistics Command
shall be deemed conferred upon the General Director of the Police
Force, the Director General of the Investigative Police, the Director of
Logistics of the Police Force and the Head of Logistics of the
Investigative Police.
g) This Law hereby substitutes the Transitory Article with the
following final Article:
Final Article.The rules regarding the acquisition of physical and
intangible goods and services by the Armed Forces shall be
complemented by the regulations dictated jointly by the Ministries of
Finance and of National Defense within one year after the Law on
Terms and Conditions for Administrative Supply and Services
Contracts enters into effect.
Article 39.- This Law shall enter into effect 30 days after its date of
publication.
In the case of the Municipalities, this Law shall enter into effect on
January 1, 2004. However, these institutions may voluntarily choose to
follow the provisions of this Law before this date, through an agreement
adopted by the majority of the Council members.
As regards the Armed Forces and the Police Force, this Law shall
enter into effect on January 1, 2005, notwithstanding a Supreme Decree

issued by the Ministry of National Defense that may establish an earlier

incorporation of these entities to this Law.
Transitory Articles
Article 1.- Within a period of one year after the date of publication of
this Law, the President of the Republic, through one or more decrees
issued by the Ministry of Finance, shall adopt all regulations necessary for
the enforcement of the law.
The Municipalities that had established previous regulations for
their procurement processes must adjust them to the new rules and
regulations by January 1, 2004.
Article 2.- The rights and obligations set forth in Supreme Decree
No. 1,312 of the Ministry of Finance (1999), for the operator of the
computer support procedures for the Public Procurement and Contracting
Information System, shall continue according to the terms of the
corresponding contract.
Article 3.- The administrative contracts with bidding specifications
that had been approved before the law entered into effect shall be
governed by the law in effect on the date of approval of those bidding
specifications.
Article 4.- The first provision of the job positions at the Public
Procurement and Contracting Bureau shall be filled by public contest, to
be executed within 60 days of the entry into effect of this Law. In this
contest, the selection committee shall be composed of the department
heads of the Public Procurement Bureau, complying with Law No. 18,834
in all other aspects.
Article 5.- The employees of the State Supply Bureau that are not
transferred to Public Procurement and Contracting Bureau shall preserve
their seniority regarding the two year period bonuses they had been
entitled to, as well as the corresponding time in the case of a new one,
and shall preserve their right to retire under the terms provided for in
Article 132 of Delegated Law No. 338 (1960), regarding the conditions
established in Transitory Articles 14 and 15 of Law No. 18,834, while they
shall not be affected by the rights established by Transitory Article 2 of
Law No. 18,972, if applicable.
Article 6.The employees of the State Supply Bureau that are not
transferred to the Public Procurement and Contracting Bureau or any other
public agency and, accordingly, cease to be public employees, shall be
entitled to receive the compensation provided for in Article 148 of Law No.
18,834, notwithstanding any other retirement, pension or annuity to which
they may be entitled within their social security system. This compensation
shall be compatible with any other severance pay they may be entitled to.

The employees that receive the benefits indicated in the previous

section may not be appointed or hired (whether as regular employees or
as independent workers) to work for the Public Procurement and
Contracting Bureau, for a period of five years after the termination of their
work relationship, unless they previously refund the compensation
received, expressed in UF (unidades of fomento, the Chilean unit of
account) plus the regular interests applicable to readjustment.
Article 7.- The obligations and rights derived from the procurement
procedures carried out by the State Supply Bureau that are pending when
this Law enters into effect, shall be transferred to the new Public
Procurement and Contracting Bureau, which shall be understood as its
successor for all legal purposes, up to the time when those procedures are
concluded.
The rights and obligations relating to the Information System and all
other online procurement services tendered by the Ministry of Finance
through its Subsecretariat, by virtue of Supreme Decree No. 1,312 (1999),
modified by Supreme Decree No. 826 (2002), both of the Ministry of
Finance, shall also correspond to the Public Procurement and Contracting
Bureau.
Article 8.- The assets of the Public Procurement and Contracting
Bureau shall include all the physical or intangible goods that were
exclusively reserved for the operation of the State Supply Bureau, which
shall be understood as transferred along with the enactment of this Law.
In order to implement the appropriate registrations in the
corresponding Real Estate Registrar or National Registry of Motor
Vehicles, the Director of Public Procurement and Contracting shall issue a
public resolution containing an inventory of all the real estate and vehicles
that, by virtue of this provision, are to be transferred.
Article 9.- Beginning on the date when the staff structure
established in Article 33 enters into effect, this Law hereby authorizes the
Public Procurement and Contracting Bureau to hire a maximum of 22
workers, according to the current Budget Law for the Public Sector. This
shall not include the limitations contained in Section 2, Article 9 of Law No.
18,834, regarding the independent positions considered in this allotment.
Article 10.- The expenses incurred through the application of this
Law for the present year shall be funded with the current resources
allocated in the budget of the State Supply Bureau. However, should it
prove impossible to cover these expenses with its own resources, the
Ministry of Finance may supplement this budget through item 50-01-03-2533.104, corresponding to a budgetary allowance of the Public Treasury.

Article 11.- The Ministry of Finance must establish, through

Supreme Decree, the gradual inclusion of the public agencies governed by
this Law into the systems described in Articles 18, 19 and 20 of this Law.
Having fulfilled the conditions established in No. 1 of Article 82 of
the Political Constitution of the Republic, and having considered it
convenient to approve and sanction it therefore it is hereby enacted as a
Law of the Republic.
Santiago, July 11, 2003.JOSE MIGUEL INSULZA SALINAS,
VicePresident of the Republic.Mara Eugenia Wagner Brizzi, Deputy
Minister of Finance.Francisco Huenchumilla Jaramillo, Minister Secretary
General of the Presidency.
To be transcribed for your information.Greetings and salutations,
Mara Eugenia Wagner Brizzi, Subsecretary of Finance.
Constitutional Tribunal
Bill on Terms and Conditions for Administrative Supply and Services
Contracts.
The undersigned, Clerk of the Constitutional Court, does hereby
certify that the Honorable Chamber of Deputies has referred this Bill,
approved by the National Congress, for this Tribunal to exercise its control
of the constitutionality of Articles 1, 22, 23, 24, 25, 26, 27, 37 Section 2
and 39 Section 2, of this bill, and by a ruling dated on June 18, 2003, it
has found:
1. That Articles 1, 22, 23, 24, Sections 1 and 2, 26, 37, Section 2, and 39,
Section 2, of this Bill, are in fact constitutional.
2. That this Tribunal offers no comment on Articles 24, Sections 3, 4, 5
and 6, 25 and 27 of the aforementioned bill, since they pertain to matters
that are not part of the jurisdiction of the Organic Constitutional Law.
Santiago, June 20, 2003.Rafael Larran Cruz, Clerk.__