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Provisions are Established to Improve and Optimize the Execution of Public Investments 

by Carlos Carpio, Hugo Silva

Published: May, 2020

Submission: June, 2020


Today, May 10, Legislative Decree No. 1486 that establishes new provisions, and modifies and/or expands various regulations for the effective execution of investments by public entities has been published. New provisions are detailed as follows:

(i) Public entities holding investment projects are authorized to submit their applications for the Certificate of Non-Existence of Archaeological Remains (CIRA) and the Archaeological Monitoring Plan (PMA) through the CIRA Management System and the PMA of the Ministry of Culture, respectively. The Ministry of Culture shall issue the corresponding provisions for the progressive implementation of this provision.

(ii) It is provided that public entities of the National Government may approve the application of Building Information Modeling (BIM) methodologies or others, in public investments that are within the scope of their functional responsibility, in accordance with the guidelines established by the General Directorate for Multiannual Investment Programming (DGPMI).

(iii) Public entities at the three levels of government that execute optimization, marginal expansion, replacement and rehabilitation investments under Act No. 31015, which authorizes the execution of interventions in basic, productive social infrastructure and naturally through executing agencies, they must record the execution modality by executing agency in the Investment Bank’s software application, and the requirements for this must be established.

(iv) Special Public Investment Projects (PEIP) created under Emergency Decree No. 021-2020, which require the acquisition and release of areas during the execution phase, may apply the procedure for acquisition land release of premises regulated in the Emergency Decree No. 003-2020, which establishes extraordinary provisions for the acquisition and release of areas necessary for the National Infrastructure Plan for Competitiveness and the Comprehensive Plan for Reconstruction with Changes.

(v) Agreements entered into in the framework of the contests of the Fund for the Promotion of Public and Regional Investment (FONIPREL) between 2014 and 2017, which have not been concluded due to the breach of the obligations assumed by the beneficiaries, may be decided after evaluation by the Technical Secretariat of the Invest for Territorial Development Fund (FIDT).

(vi) Special public investment projects are exempted from the obligation to apply for urban development and building licenses until June 30, 2021, being able to regularize such licenses at a later date; following the provisions of Emergency Decree No. 021-2020, which establishes the model for the execution of public investments through special public investment projects.

(vii) In the context of the reactivation of public works contracted pursuant to the general state procurement regime, which would have been paralyzed by the declaration of the State of Emergency approved by Supreme Decree No. 044-2020-PCM, an exceptional procedure — that differs from that indicated in the Regulations of the State Procurement Act — to obtain extensions of the deadline. Within fifteen (15) calendar days following the completion of the social immobilization and/or the start of activities as provided by the competent authority, the executing agency shall submit a request, in person or virtually, including the quantification of the extension of the deadline, the new execution schedule, the work execution program, the workers’ health and safety plan, and a proposal to replace key personnel, among others. The application shall be evaluated within 15 calendar days.

If the entity fails to approve the application within said period, it shall be deemed to be approved as proposed.Likewise, it is established that the public entity may grant direct advances of up to 15% of the original amount and advances for materials of up to 25% of the original contract, even in contracts in which delivery has not been foreseen. In case the advances have been delivered —10% and 20%, respectively—the delivery of the difference proceeds.

The Supervising Agency of the Government Procurement (OSCE) must issue a directive setting out the scope and procedures for the recognition of general expenses and/or direct costs related to time extensions; procedures and scope for the contractual incorporation of the measures for the prevention and control of the spread of COVID-19 laid down by the competent sectors; the procedure for the request and delivery of advances; among others as necessary.

(viii) For a period of 12 months from the entry into force of this Legislative Decree, Emergency Decree No. 008-2019 may be applied, which establishes extraordinary measures for the reactivation of paralyzed public works at the national level, public works at a standstill which are part of an investment project under the National Multi-Annual Programming and and Investment Management System, and that have been contracted under the scope of application of the State Procurement Act, provided that they have a physical advance equal to or greater than 40%.Public entities must carry out an inventory of paralyzed works until July 31, 2020, and approve a prioritized list of paralyzed public works until December 31, 2020.

(ix) Legislative Decree No. 1152, Legislative Decree establishing the National Multi-Annual Programming and and Investment Management System, has been amended to empower the Ministry of Economy and Finance (MEF) to carry out, ex officio, the deactivation of investments in accordance to criteria established for this purpose, as well as managing and implementing mechanisms for the follow-up and monitoring of the execution of investments.

(x) Act No. 30556, which approves special provisions for the National Government’s response to disasters and provides for the creation of the Authority for Reconstruction with Changes, has been amended, specifying that:

a. In the State-to-State contracting modality, a Declaration of Feasibility or approval is required under the National Multi-Annual Programming and Investment Management System.

b. In special public procurement procedures, bids will be submitted electronically through the Electronic System of State Procurement (SEACE). This procedure shall enter into force after the OSCE has made the necessary adjustments in SEACE, for which it has a maximum term of sixty (60) calendar days from the effective date of this Legislative Decree.

c. Public entities at the three levels of government are empowered to execute the release of interferences in order to continue with the execution of infrastructure works of their ownership, including said costs in the investment budget, after signing an agreement with the public service provider company. The expenses associated with it are recorded as part of the same investment project and not through an Optimization, Marginal Expansion, Replenishment and Rehabilitation Investment (IOARR).

d. It provides that the works execution and supervision contracts, to be signed by public entities holding investments with infrastructure work components, must include a clause for automatic suspension of the contract execution period in view of the need to release interference during the investment execution phase carried out by a third party, for the duration of the interference release and/or the availability of areas, as appropriate.

(xi) Finally, with regard to Act No. 28056, Participatory Budget Framework Law, it has been established that, for the purposes of prioritizing investments within the participatory process, the annual and multi-annual approach must be considered within the period of management of the authorities, as well as the processes of Multiannual Budget Programming and Multiannual Investment Programming, under the National System of Public Budget and the National Multi-year Programming and Investment Management System, respectively. The Ministry of Economy and Finance, through the General Directorate for Multi-Annual Investment Programming, shall establish the corresponding directives and guidelines.

Any query on the matter may be absolved by the lawyers of our Administrative Office



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