The Organic Law on Public Integrity, approved by the National Assembly and signed into law by the President of Ecuador, was published in the Third Supplement of Official Gazette No. 68 on June 26, 2025.
The transition provision of the Law stipulates that the General Regulations for the Organic Law on the National Public Procurement System shall be issued within 45 days.
On July 22, 2025, President Daniel Noboa issued Executive Decree No. 57 containing the General Regulations for the Organic Law on Public Integrity, which introduces structural changes to the public procurement system in Ecuador. These reforms modernize the legal framework, strengthen transparency, and promote the participation of new actors.
The main changes include:
- Mandatory certification for public operators
All public servants who take part in any phase of the procurement process must have official certification issued by the national public procurement service (SERCOP). This measure aims to ensure that those who manage public resources have up-to-date and sufficient technical knowledge. Even those who aspire to enter the public sector must be certified in advance. The certification will be valid for two years and will be renewed by means of a new exam.
- A 100% digital and open Public Procurement Portal
The new regulations consolidate the Portal as the sole official platform for managing public procurement. Its use is mandatory, save for specific exceptions. The Portal must guarantee traceability, interoperability with other entities, information security, and public access to open data. Paper-based processes are eliminated, and automation of all stages is promoted.
- A New Approach: “Value for Money”
Public procurement will no longer be evaluated solely on the basis of the lowest price. Priority will now be given to achieving optimal results, taking into account quality, sustainability, innovation, efficiency, and life cycle costs. This approach seeks to ensure that every dollar invested generates the greatest possible benefit for the State and its citizens.
- Fines
Penalties for breach of contract shall be applied as a corrective rather than punitive measure, calculated specifically on the basis of the value of the breached obligation. That is, on the part of the contract that was not performed in accordance with the terms thereof, excluding taxes and taking into account any applicable price adjustments. Additionally, the contracting entities may establish in the tender documents other conduct that warrants being sanctioned with a fine, which may be set as a percentage of the value of the breached obligation or as a specific amount.
- Preferential subcontracting in public works
In public works contracts worth more than USD 1 million, there is an obligation to subcontract at least 15% of the amount to local suppliers or preferred actors. This measure seeks to boost local economies and ensure that the benefits of public investment are distributed more equitably.
- A more rigorous and transparent Register of Suppliers
The Register of Suppliers (RUP) is being strengthened with new evaluation criteria. Now, integrity, tax compliance, and labor and social security records will be considered, as well as technical experience and categorization by type of supplier. Clear grounds for suspension and exclusion are established to prevent the participation of shell companies or companies with a negative track record.
- Controls on the importation of goods and services
Before importing goods or contracting services abroad, entities must verify whether domestic production is available. Only if it is not available, and with prior authorization from SERCOP, may the importation proceed. This measure protects domestic industry and promotes the consumption of Ecuadorian products.
- New rules for consortiums and associations
Partnership or consortium agreements are regulated in detail, from their formation to contract execution. Joint and several liability among members, transparency in contributions and roles, and compliance with technical and legal requirements are required. The aim is to prevent fictitious or evasive consortia.
- Sanctions for misuse of the Portal
The regulations classify unauthorized access, data manipulation, identity theft, and the publication of information unrelated to the processes as offenses. These behaviors will be punished administratively and, if applicable, criminally. This reinforces the security and reliability of the system.
- Supervision with Artificial Intelligence
SERCOP may use artificial intelligence, data mining, and predictive analysis tools to detect patterns of risk, collusion, overpricing, or irregularities in procurement processes. An Anti-Money Laundering and Anti-Corruption Unit is created with powers to investigate and report findings to the competent authorities.
- New grounds for contract termination
The list of grounds for early or unilateral contract termination has been expanded. These grounds include failure to submit a certificate of compliance from the Financial and Economic Analysis Unit (UAFE), changes in the supplier's ownership, breach of subcontracting commitments, or breach of essential contractual conditions. This provides greater legal certainty for the State.
- Stricter payment deadlines
Contractual payments must be regulated in a specific clause, with a maximum payment deadline of 30 days from the fulfillment of requirements. Pre-payment control must be timely and coordinated; in case of discrepancies, the criteria of the contract manager prevail (who must document and publish the criteria).
If payment is not made within 30 days of the request, it is presumed to be undue withholding, entitling the contractor to claim legal interest and damages, except if the entity completed the procedures but faces liquidity problems. In addition, entities cannot demand contractual advance payments in the event of unjustified late payments (except in cases of legal exceptions).
- Whistleblower protection
A protection system is established for those who report acts of corruption in public procurement. Reports must be substantiated and not anonymous. The confidentiality of the whistleblower is guaranteed, and retaliation is prohibited. This measure seeks to encourage citizen participation and social control.
Highlighted transition provisions
The Regulations establish a differentiated transitional regime depending on when the procurement procedures begin. For those whose preparatory or pre-contractual phase began before it came into force, SERCOP will issue specific guidelines based on the Fourth Transition Provision of the Organic Law on Public Integrity, ensuring continuity during the adaptation of systems such as the Public Procurement Portal. For procedures that begin after its entry into force, SERCOP will also provide transitional guidelines and identify which articles of the Regulations will remain in transition until the necessary technical tools are implemented.
SERCOP assumes immediate obligations: its Board of Directors must issue complementary regulations in key areas (financing, open government, supplier compliance, and oversight criteria) as soon as the Regulations are published. Additionally, within 30 days, it must conduct a thorough analysis of all existing secondary regulations (including Resolution R.E-SERCOP-2023-0134 and its amendments), repeal any incompatible provisions, and issue new regulations to implement the Regulations. At the same time, it will focus its efforts on implementing the principles of open government in the Public Procurement Portal, strengthening the Register of Suppliers, and exercising supervision with objective criteria, within the time frame established by the Law on Public Integrity.
If you would like more information, please contact us at comunicacionpbp@pbplaw.com.
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