Public Procurement is a Growing Market in Colombia…

Economic studies estimate that public contracting in Colombia made up approximately 5% of GDP between 1996 and 2002. Ten years ago that percentage would have been equivalent to approximately $7 billion. Today, after a decade of solid economic growth  and assuming the same share of GDP, that amount would have increased by 150% to almost $11 billion.

According to Colombia’s National Infrastructure Agency, the country has already set in motion a plan to double its investments in roads, ports, railways and airports over the next 8 years. Furthermore, Colombia’s transportation Minister announced that only in 2012 the country would be spending approximately $5.3 billion in infrastructure alone.

…and the U.S.-Colombia FTA levels the playing field for U.S. businesses

That is thanks to Chapter 9 of the Agreement, which stipulates that U.S. companies participating in public procurement bids in Colombia shall be given “[...] treatment no less favorable than the most favorable treatment the Party accords to domestic goods, services, and suppliers [...]“.

Which basically means that U.S. companies will be able to supply their goods and services to the Colombian government enjoying many benefits, including protection against corruption and discrimination.

That is why we want to provide you with some basic knowledge regarding Public Procurement in Colombia

1) You need to constitute a legal presence in the country

In order to participate in any type of public procurement process in Colombia, your company must be constituted as a legal entity in Colombia.

The Government of Colombia has an Official Investment Portal with an abundance of practical resources such as:

* a step-by-step guide on how a foreign company can establish a presence in Colombia,

* what investment incentives are available for companies to benefit from,

* the tax regime appicable in Colombia,

* comparative operational costs for the country, and

* key sectors considered ripe for investment by the Government.

2) You need to understand how public procurement works in Colombia (or find somebody who does)

In spite of major reforms to reduce bureaucracy in the country, to participate in public procurement in Colombia businesses should seek out local partners with knowledge and experience in this area, who can advise or associate with them.

Depending on the nature of your business, the local U.S. Embassy’s Economic, Commercial and Agricultural sections can serve as a good starting point.

In addition, the Colombian-American Chamber of Commerce (AmCham) and the Council for American Enterprises (CEA) can serve as facilitators, contacting you with the country’s top legal firms, Colombian companies and other U.S. businesses with a presence in the country.

In general terms, Colombia has a reasonable, if complex, public procurement legal framework. Within it, there are four types of public contracting, as well as four general mechanisms for the Government of Colombia to award a  public procurement contract.

3) You need to identify relevant public procurement opportunities…and that’s what we’re here for!

U.S. Embassy Bogotá will be providing through its blog a periodic report on Public Procurement Opportunities in Colombia, which will be readily accesible through our archive.

If you feel like doing some research on your own, Colombia has a very complete Electronic Public Procurement System, where you can find aopportunities across all entities at the National and Regional levels.

Finally, by following this blog, you will have regular updates on macroeconomic data, sector performance and business leads that may be helfpful to gain a better understanding of where hidden (or not so hidden) opportunities may be.