Describes how major projects are secured and financed. Explains activities of the multilateral development banks in and other aid-funded projects.
Guatemala’s Government Procurement Law requires most government purchases over GTQ 900,000 (about USD 116,580) to be submitted for public competitive bidding. Any government acquisition of goods supplies or services that exceeds GTQ 90,000 (approximately USD 11,658) is subject to price quotation procedures, which also require public competition through Guatecompras (Official website for Government Tenders). Since March 2004, government entities are required to use Guatecompras, an internet-based electronic system to track government procurement processes, open to the public. Guatemalan government entities must also comply with government procurement commitments under CAFTA-DR. Tender proceedings are public in the Republic of Guatemala.
The U.S. government advises that any foreign company interested in engaging into a commercial relationship with an official or governmental entity to be associated with a local market participant. Foreign companies can participate in any government procurement modality without a local business associate but must show that the company has provisionally registered with the Mercantile Registry. If the foreign company is awarded a public contract, it must demonstrate that it is properly registered to operate in the country through an authorized branch. Although it is technically possible to provisionally register a company during the bidding process, in practice it is hard to complete the process before the deadline for submitting a bid.
Government procurements executed by one government administration are occasionally challenged, breached or unpaid by the subsequent administration. In some of these cases, the Embassy of the United States of America can assist and service U.S. firms by encouraging the government to respect the legally binding executed agreements.
Guatemala is not a signatory to the WTO Agreement on Government Procurement.
The U.S. government advocates for U.S. companies on the whole and for the use of open, fair, and transparent tenders in government procurement and in accordance with CAFTA-DR obligations allowing open participation by U.S. companies.
However, in recent years many U.S. company representatives have expressed a reluctance to take the time and expense to evaluate and bid on Guatemala government tenders on what they view as an unlevel playing field. Specifically, companies do not bother to bid on Guatemalan public procurement tenders (goods, services, or infrastructure) published on the Guatecompras website, seeing Guatemala’s public procurement system as wholly corrupted and designed to favor local companies with “ties” to federal ministry, municipal authority, or congressional players. In addition, we have heard complaints that procurements lack transparency and often pre-favor a particular foreign company as well as “flash tenders” uploaded at night or weekdays and closed and awarded in a few hours.
Due to these challenges, we do not proactively encourage U.S. company participation in Guatemala government procurements. Having said that, below are some points of information:
- Potential opportunities: The principal Guatemalan Government public procurement sectors are healthcare, construction, defense, safety & security projects, ICT & IT and general consumer goods and services.
- Competitiveness factors: All tenders conducted by the Guatemalan Government are based on a 100-point system, the procurement board along with subject matter experts work on the requirements and specifications and the winner is the company with the most awarded points. They assess value and assign points to qualifications and certifications by the company and product as well as price and delivery dates. There are other factors to consider depending on the nature of the requirement.
- All tenders are posted in https://www.guatecompras.gt/ and only that are legally registered locally or have appointed a local partner can participate according to the Guatemalan Government Procurement regulation.
- As stated, all the tender events conducted by the central, regional, or local Government entities are uploaded in the Guatemalan Government Procurement website “Guatecompras” and need to comply with the Guatemalan procurement regulation.
- Guatemala is not a signatory to the World Trade Organization Agreement on Government Procurement.
- Guatemala is part of the CAFTA-DR free trade agreement, that requires procurement entities use fair and transparent procedures that include advance notice of purchases as well as timely and effective bid review procedures. U.S. suppliers are permitted to bid on procurements of Guatemalan Government entities, including Government ministries and state-owned entities. The anti-corruption provisions of the Agreement require each government procurement, is treated as a criminal offense or is subject to comparable penalties.
U.S. Government Advocacy
U.S. companies bidding on Government tenders may also qualify for U.S. Government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international governments and government agencies. The Advocacy Center works closely with our network of the U.S. Commercial Service worldwide and inter-agency partners to ensure that exporters of U.S. products and services have the best possible chance of winning government contracts. Advocacy assistance can take many forms but often involves the U.S. Embassy or other U.S. Government agencies expressing support for the U.S. bidders directly to the foreign government. Consult Advocacy for Foreign Government Contracts for additional information.
Multilateral Development Banks and Financing Government Sales
Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from the Multilateral Development Banks (MDB). A helpful guide for working with the MDBs is the Trade Finance Guide. The U.S. Department of Commerce’s (USDOC) International Trade Administration (ITA) has a Foreign Commercial Service Officer stationed at each of the five different Multilateral Development Banks (MDBs): the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the World Bank.
Learn more by contacting the:
- Commercial Liaison Office to the Inter-American Development Bank
- Commercial Liaison Office to the World Bank