The Government Procurement Review: Dominican Republic


On 5 August 2004, the US signed the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA), with five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua) and the Dominican Republic, in which one of the main concerns was government procurement. In fact, a whole chapter was dedicated to the matter.2

Because of the DR-CAFTA, government procurement regulation in the Dominican Republic underwent a major modification in order to comply with the Free Trade Agreement's requirements. A new bill had to be enacted to comply with the requirements of Chapter 9 of the DR-CAFTA. This led to the enactment on 18 August 2006 of Law No. 340-06 on Government Procurement and Contracting of Goods, Services, Works and Concessions (the Government Procurement Law), which governs any purchase made with taxpayer money nationwide.

Furthermore, on 6 September 2012, the Dominican government issued Decree No. 543-12,3 which constitutes a relatively new norm in government procurement. This Decree serves to develop in a more specific fashion the regulations of the Government Procurement Law. Besides managing everything related to the different procurement procedures, this norm incorporates a mechanism that is new for the Dominican legal framework, but well known in the government procurement world – a mechanism to fulfil collateral policies through state acquisitions.

Decree No. 543-12 establishes the obligation for every contracting agency to set aside 20 per cent of its purchases to be contracted from micro, small and medium-sized businesses, as long as the good or service to be acquired can be effectively delivered by a small business. In addition to the 20 per cent set-aside for every government procurement process, the Decree establishes the possibility of presenting partial offers within the remaining 80 per cent. As a result, since 2012 the Dominican Republic has been familiar with the notion of making the trade-off of 'full and open competition', which is one of the main desiderata in government procurement, in order to fulfil other high-priority social and economic goals, such as the growth of small business to create jobs.

EU directives and the Agreement on Government Procurement (GPA) do not apply in the Dominican Republic; however, Dominican procurement law was highly influenced by US procurement regulation, most of the best practices recommended in both the GPA's and UNCITRAL's Model Law in government procurement are somewhat included in the Dominican Republic's procurement culture.

The main body with the faculty for setting government procurement policy and enforcing compliance, embodied also with the power to oversee the bidding process, is the General Directorate of Public Procurement, which depends of the Ministry of Finance, a part of the central government.

Dominican procurement law is founded on the core principle of full and open competition, as a corollary of equal access to government procurement contracts as a right. In addition, the law enshrines the principles of efficiency, transparency, flexibility, responsibility, participation, fairness and reciprocity, which allows equal treatment to foreign offerers and contractors. The whole system is designed around these objectives.

Year in review

In the past year a new policy in government procurement was enacted with the issuance of Decree No. 168-19, which provides that the institutions in charge of poverty alleviation programmes must call for processes of purchase of agricultural products of a national nature directly to producers, without intermediaries. In addition, Decree No. 86-20 was issued, which instructs the institutions in charge of the execution of programmes aimed at poverty alleviation, food, school nutrition, protection of women, disabled, children and adolescents, when calling for purchase processes to acquire the necessary supplies for the operation of these programmes to make calls directed exclusively to the agribusiness and national industry.

However, the main legislative development in government procurement happened on 21 February 2020, with the approval of the Public Private Partnerships Law in the Dominican Republic. This law partially modifies the Procurement Law regarding concession contracts directly derogating the articles of the law that used to govern concession contracts and procedures. This law brings a completely new system for collaboration between the government and the private sector for big infrastructure projects and public service works. With a high need for these types of development contracts, the Dominican Republic will surely be benefiting from PPPs, which is also an appeal for foreign investors in health, communication, IT and road projects.

Scope of procurement regulation

i Regulated authorities

The Government Procurement Law states that its provisions regulate the central government, decentralised and autonomous institutions, local and city governments and public enterprises, and provides a main principle that regulates any entity that contracts the acquisition of goods, services and works using public funding.

ii Regulated contracts

All supply of goods, services, works, consulting and leasing for the government are regulated by procurement rules. Additionally, 'concession' contracts are now regulated by the Public Private Partnerships Law regarding infrastructure and development contracts. However, the law has a rule of thumb: the law covers any government contract that is not expressly excluded by the law, or is not subject to a special regime.

The following are excluded from the application of the Government Procurement Law:

  1. loans or grant agreements with other states or entities of international public law, when stipulated in said agreements, in which case they will be governed by the agreed rules;
  2. public credit operations and public employment contracting, which are governed by their respective norms and laws;
  3. purchases with petty cash funds, which will be made in accordance with the corresponding regime;
  4. any acquisition activity that is contracted between public sector entities;
  5. those who, for reasons of security or national emergency, could affect the public interest, lives or the economy of the country, after declaration and support by decree;
  6. the acquisition of scientific, technical and artistic, or restoration of historical, monuments, whose execution must be entrusted to companies, artists or specialists provided that they are the only ones who can carry this out;
  7. the purchase and contracting of exclusive goods or services or those that can only be supplied by a certain supplier;
  8. those that, due to emergency situations, do not allow the carrying out of another selection procedure in time (in all cases, this scenario must be based on objective reasons, prior qualification and support by resolution of the highest competent authority);
  9. purchases and contracts made for the construction, installation or acquisition of offices for foreign diplomats;
  10. rescinded contracts whose termination does not exceed 40 per cent of the total amount of the project, work or service;
  11. purchases aimed at promoting the development of micro, small and medium-sized companies; and
  12. the hiring of advertising through social media.

Contracts cannot be transferred to a different supplier; however, it is possible for contractors to subcontract to complete the awarded contract. In the case of contract modification or variation, the Government Procurement Law provides that work contracts can be modified to an extent of 25 per cent of the object contracted, and services contracts to an extent of 50 per cent of the contract without the need to tender the varied contract. However, contracts for the acquisition of goods cannot be varied at all.

There is a financial threshold below which contracts are not regulated, which is determined in accordance with the yearly government planned budget. The law contemplates a formula, and the exact amount is updated annually by the government procurement agency. The current threshold is approximately US$3,000.

Special contractual forms

i Framework agreements and central purchasing

Framework agreements and central purchasing are not regulated in the Government Procurement Law. This type of contracting, such as indefinite delivery/indefinite quantity contracts, is not used.

ii Joint ventures

Joint ventures are admitted by Dominican procurement law in the bidding process. Foreign companies can team up with locals to create consortiums to present a joined offer in any tender procedure. The rule of thumb in this case is that the consortium can jointly meet the qualifications as if were one participant. Joint ventures can also work as a subcontracting relationship, where one company supplies the other company that won the award for the government contract.

Public-private partnerships are ruled by special legislation. The followed procedure is that first there has to be an initiative brought by the private (interested party) or the public sector (any government agency with a PPP initiative). The presentation, evaluation and selection of initiatives and winners of public-private alliances is held over the five next phases: presentation of the initiative; evaluation of the initiative by the National Council of Public Private Partnerships with the further declaration of public interest; a competitive selection process to determine the successful bidder; and finally the award of the public-private partnership.

The bidding process

i Notice

It is mandatory for every procurement procedure that a notice be published in a local newspaper. The notice is also published on the respective government agency's website, and on the General Directorate of Public Procurement's portal. There is no central journal for contract opportunities, although there are some companies that provide a service informing potential offerors of contract opportunities in their field. After someone registers as interested in a procedure, the government sends out direct emails of every update during the process, until the final notice award.

ii Procedures

There are six prescribed procedures that awarding authorities must follow for contractor selection. Depending on the type of contract and the amount involved, government agencies can choose between the following:

  1. National public tender: this is the main procedure and almost every procurement process is carried out using this procedure. Although it is meant only for big contracts, some contracting authorities prefer it because it guarantees high levels of competition and transparency.
  2. International public tender: this is for procedures that involve international and foreign offerors.
  3. Restricted tender: reserved for procedures where only a handful of potential offerors exist in the market. These possible interested parties are directly contacted to participate in the tender, and no one else can.
  4. Raffle of works: this is a very infrequently used procedure, where, haphazardly, offerors are awarded with a contract.
  5. Price comparison: this procedure is similar to what in US government procurement law is known as the 'lowest price technically acceptable' process. In this process, the contract should be awarded to the lowest price offer from amog those that comply with the minimum technical requirements.
  6. Reverse auction: offerors bid for the prices at which they are willing to sell their goods to the government. This procedure is seldom used in the Dominican Republic.

All these procedures are conducted physically. Although there is a portal through which awarding authorities send out notices and information, the procurement process is not electronic.

iii Amending bids

Limits to changes in offers during the procurement process are set out in the procedure specifications. Usually, there is a deadline before which the government can ask for corrections to the offer. However, there is no limit on the changes the contracting authority can make to the process. It is normal for several amendments to be made to conditions, among other things.


i Qualification to bid

Article 8 of the Government Procurement Law states that anyone who wishes to contract with the state shall demonstrate its capacity by satisfying the following requirements:

  1. they must possess the professional and technical qualifications that ensure capacity, financial resources, equipment, physical means, reliability, experience and staff are necessary to execute the contract;
  2. their commercial purposes and activity must be compatible with the contractual object;
  3. they must be solvent and not in a bankruptcy or liquidation process, or their commercial activities must not have been suspended; and
  4. they have complied with their tax and social security obligations.

These requirements are not restrictive, however, and the contracting authority can require any additional elements it deems necessary to ensure the contractor is responsive and able to properly carry out the awarded contract.

In addition, any contractor must be registered as a state provider in order to be able to participate.

ii Conflicts of interest

Conflicts of interest are strictly regulated by the procurement law in the Dominican Republic. As a principle, government officials and their relatives cannot directly or indirectly participate in a procurement process. Also, some types of organisational conflicts of interest are in place.

Article 14 of the Government Procurement Law states that the following persons may not be bidders or contract with the state:

  1. the President and Vice President of the Republic; the Secretaries and Undersecretaries of State; the Senators and Deputies of the Congress of the Republic; the Supreme Magistrates of the Supreme Court of Justice, of the other courts of the judicial order, the Chamber of Accounts and the Central Electoral Board; the Trustees and Aldermen of the Municipalities and from the National District; the Comptroller General of the Republic and the Deputy Comptroller; the Budget Director and Deputy Director; the National Planning Director and the Deputy Director; the Attorney General of the Republic and the other members of the Public Ministry; the National Treasurer and the Deputy Treasurer and other officials of the first and second level of hierarchy of the institutions included in Article 2, Numerals l to 5;
  2. the Chief and Deputy Chiefs of staff of the Armed Forces, as well as the Chief and Deputy Chiefs of the National Police;
  3. public officials with decision-making power at any stage of the administrative contracting procedure;
  4. all personnel of the contracting entity;
  5. relatives by blood relationship to the third degree or by affinity to the second degree, themselves included, of officials related to the procurement covered by the ban, as well as spouses, couples in free union, people linked with an analogous relationship of affective coexistence or with whom they have fathered children, and descendants of these persons;
  6. legal entities in which natural persons to those referred to in (a) to (d) have a participation greater than 10 per cent of the share capital, within six months prior to the date of the notice;
  7. any person or company who has intervened as an adviser at any stage of the recruitment procedure or has participated in the creation of the technical specifications or the respective designs, except in the case of supervision contracts;
  8. any person or company that has been convicted by means of a sentence that has acquired the authority of the thing irrevocably judged for crimes of falsehood or against property, or for bribery offences, public embezzlement, influence peddling, prevarication, disclosure of secrets, use of privileged information or crimes against public finances, until a period has elapsed equal to double the sentence (if the conviction was for a crime against public administration, the prohibition on hiring with the state will be perpetual);
  9. companies whose managers have been convicted of crimes against public administration, crimes against public faith or crimes covered by international conventions of which the country is a signatory;
  10. any person or company that is disabled under any legal system;
  11. people who supply false information or who engage in related illegal or fraudulent activities related to hiring;
  12. any person or company that has been sanctioned administratively with temporary or permanent disqualification from contracting with public sector entities, in accordance with the provisions of this law and its regulations; and
  13. natural or legal persons who are not up to date with their tax or social security obligations, in accordance with what is established by current regulations.

These conflicts of interest are screened during the first step of the evaluation process, which is the qualification of the offers.

iii Foreign suppliers

Foreign suppliers can only bid in an international public tender. However, foreign suppliers can participate in any other procurement process if they set up a local branch or subsidiary, or have local tax residence through a mercantile registry.


i Evaluating tenders

The criteria for evaluating tenders are left to contracting authorities to determine following the principles of best value and full and open competition guidelines established by the Government Procurement Law and depending on the type of procurement procedure selected. For example, public tender evaluation criteria will be based on best value while price comparison criteria will be the lowest priced bid.

To ensure certain uniformity in evaluation standards in contracting authorities, the Dominican Republic government, through its Decree No. 543-12, made it mandatory for government agencies to follow model specifications established by the General Directorate of Public Procurement. These specifications are sent out as soon as the procurement procedure is published and are very similar to what is known in the US as a request for proposal.

Nonetheless, evaluation guidelines will vary depending on the type of contract and the goods or services that are sought, which will directly influence the specifications and criteria for the award.

ii National interest and public policy considerations

In Dominican procurement law there is no such thing as 'buy Dominican'. However, domestic suppliers are usually favoured when it comes to food production. The government gives preference to local producers instead of imported products. But authorities cannot specify that goods and services must have national quality marks and usually when they ask for certain quality specifications they accept those that are of equivalent or superior quality. Full and open competition is at the core of the Dominican Republic government procurement system.

Collateral policies in government procurement are highly sought after in the Dominican Republic. Environmental products and procedures, energy-efficient electronic products, women-owned businesses, small and medium-sized enterprises, depressed areas, etc. are elements taken into account at the evaluation procedure. In any case, if these considerations will be taken into account, they must be expressly stated in the procedure specifications.

Information flow

Disclosure obligations are limited to the information required to identify the offeror and its corporate structure as well as the representatives that will sign the contracts and so on. They will vary depending on the type of contract object. The information bidders have access to is limited to what is included in the procurement specifications.

There is a closed period of time where bidders can ask questions and request any information they require. The government is obligated to debrief bidders by responding to all of these questions within reason. After this period of time, no further questions or requests for information can be made.

For complicated procurements, some contracting authorities hold public debriefing hearings so interested parties can ask questions and request information, but this is not mandatory.

There is a general obligation of information and transparency of every stage and decision concerning procurement procedures. Changes, amendments, and unsuccessful and disqualified bidders must be properly notified.

Confidentiality is usually mandated in procedures where special and security items are procured; apart from that, all information must remain public.

Challenging awards

Bid protests and award challenges are not very frequent mainly because of the low chance of success, which is influenced by the very low response rate. It is not costly, but time frames for award challenges in the administrative court and with the General Directorate of Public Procurement range from two to three years.

i Procedures

Complaints procedures can be brought by disgruntled offerors to the contracting authority directly, appealed to the enforcement body and later challenged in court. One can also go directly to each of those stages without having to previously exhaust the other.

Limitation periods for challenges vary depending of the type of procedure. Court challenges must be brought within 30 days starting from the date of the act that is being challenged. Challenges brought to the contracting authority must be made within 10 days. The decision rendered by the awarding agency can be appealed within 10 days.

ii Grounds for challenge

Challenges can be brought on almost any grounds of breach of the procurement law, whether a specific statute or a violation of a principle such as transparency or competition. It is possible to challenge the specifications, particular decisions taken by the contracting authority, the award and even the contract.

iii Remedies

Courts have broad powers to grant relief in government procurement; however, they cannot rule on discretionary government faculties. They usually order new tenders and fines for breach of procurement procedures such as suspension and debarment sanctions, which are provided by the law.


There is a major modification of the Government Procurement Law in the works. The last stage of the project is still unknown at the time of writing. However, some key aspects have been discussed among government procurement scholars: automatic stay for bid protests, a reduced time frame for procurement processes, and an autonomous government procurement agency, among other things. It is highly possible that this modification of the law will be presented by the government to Congress in 2020.



1 Luis Ernesto Peña Jiménez is the managing partner at Martínez, Peña & Fernández.

2 DR-CAFTA (Dominican Republic-Central America FTA), Chapter 9, Government Procurement. Source:

3 A decree in the Dominican Republic is the similar to an executive order in the US.

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