Selling to the Panamanian government

Monday, April 12, 2021 - 14:06


Alvaro Aguilar Alfú - Member of the Trade & Investment Steering Committee


The Panamanian Government is a potential market for businesses of all sizes.  Government departments and agencies purchase from foreign suppliers a wide variety of goods and services ranging from advertising and cleaning services to engineering and office equipment, and from training and project management to research and recruitment.

A potential supplier to the government needs to know who to contact and, also how to find business opportunities and effectively compete. Prevously-written rules and processes apply to how the government buys goods and services.

While prospective sellers firstly approach the entity in charge of buying the goods or services, the Direccion Nacional de Contrataciones Publicas (National Procurement Office) is also important as the online procurement system All purchases must be announced in this system and prospective sellers must have registered their due diligence documents in advance of the date of tender in its Registry of Suppliers (Registro de Proveedores).  Sellers can list a high-turnover items in a Catalog used by government buyers.  The online system provides more expedited information access for all participants in the procurement process, wherever they are located.  Around 1,000 business opportunities are listed at any given time in different areas and $60 Million are awarded monthly.

While some bidders for important government contracts have complained of lack of transparency, excessive delays, requirements tailored to exclude, and bureaucracy in the bid selection process, these are situations which risk can be managed in advance.  Use of a local partner or distributor, constant communication of the seller government relations staff with all actors, online follow up – and if necessary challenge – of the progress of the tender, are some of those measures.  Once a bidder is awarded a project, it may assign the contract to a local bank who will advance financing during the time the government may delay payment of invoices.

Law 153 of May 8, 2020, was enacted to amend Law 22 of 2006 on Procurement, and seeks to improve rendering of accounts, efficiency, transparency and digital innovation in government purchases.   A Digital Observatory has been created for citizens to supervise provedures and small and medium-size business are given preferrence.  Every April 1 the different government entities must disclose and publish their Annual Plan of Purchases open to inspection by prospective sellers. However, challenges are subject to filing only upon the second verifcation or evaluation report and with a bond for 10% of the contract value.

New penalties for misconduct of public officials in procurement procedures are enacted.  Evaluators of bids will be appointed from a Panamacompra database of accredited professionals in their fields, instead of the discretionary appointments.  Digital modelling systems are incorporated for bids involving public works projects and uniform environmental criteria are enacted.

The government is an important buyer of surveillance systems, satellite communications and cybersecurity systems.  For 2021 the government infrastructure plans several transportation projects including the construction of a cable car system connected to the Panama Metro, a 24 km coastal highway, and maintenance of a 2000 km road network. Panama’s public-private partnership framework creates opportunities for US businesses to take part in major infrastructure projects for US$ 5 billion over the next few years, covering a wide range of areas such as water, rail, social infrastructure and road works.


Alvaro Aguilar Alfú
Lombardi Aguilar Group