Public contract – What it is, definition and concept

A public contract is a document that includes an agreement between two parties, and in which the details and conditions of a certain operation appear. Since it is a public contract, one of the interested parties must be the Public Administration.

When we talk about contracts, one of the most common classifications that we can make is the one that establishes the differences between a private contract and a public contract.

In both cases, we are talking about a document that contains the agreement between two interested parties, and which contains the details and conditions to carry out an operation. However, the difference is found in the stakeholders.

In the case of the public contract, one of the parties is the Public Administration itself.

What is a public contract for?

Let’s imagine that the Administration needs to hire a cleaning company to clean the offices and public buildings. In this case, why doesn’t the Administration make a contract with the private company and is obliged to do so through a public contract?

Well, for the simple fact that the Administration cannot use public resources to hire what it wants and whoever it wants.

That is what public procurement is for.

In a democracy, if the Administration wants to hire a certain service, it must follow a democratic selection process in case there are more interested companies.

In this way, the State is in charge of publishing the conditions of the service it wants to hire, the requirements and what it is willing to spend. When we have the offer, those companies interested in offering the service to the Administration, and that meet the conditions required in the offer, apply and submit their proposals.

See also  Security Token - What is it, definition and concept | 2022

Subsequently, the proposals are evaluated and, after the development of this democratic process, the State selects the winning company and that, therefore, will perform the service.

What is a public tender?

In order for the Administration to sign a public contract, there must first be a public tender. What we have defined in the last paragraph of the interior section, roughly, is a public tender.

Thus, we are talking about an administrative procedure that the Administration must follow to acquire some type of good, contract a service to a private company or contract, for example, the construction of some type of infrastructure.

To understand it better, a public tender is the same as a public tender.

Let’s imagine that the state wants to buy 10 cars for the police.

The State, since it will use public resources, cannot freely select a private company, as well as a specific car. Well, he could select his brother’s dealership, and buy very high-end cars that leave a lot of profit.

To avoid this, that is, to avoid corruption, the State is obliged to launch a public tender. In this contest, an expert committee assesses what these police officers need. Having assessed what they need, the State issues an announcement indicating the number of cars they need, the available budget, as well as the technical requirements that the car model that companies will offer must meet.

When we have the announcement, the different companies issue their offers and are pending the valuation. When the State has issued the valuation, the tender or tender will be awarded to the company that obtains the highest valuation and that, therefore, best meets the requirements of the State. And, once the tender has been awarded, the public contract is signed in which, on the one hand, the State or the Administration participate and, on the other hand, the company that won said tender.

See also  Abandonment rate - What is it, definition and concept

Direct award public contracts

Sometimes, the Administration or the State can afford to contract a service or acquire a good without having to publish a public tender.

When this happens, we say it is a “direct award.” The fact that it is called that is because it does not follow any democratic procedure, such as the one described above.

However, on very few occasions it can be done this way. Let’s say that this way of formalizing a public contract is reserved for services or goods that do not require a high outlay by the Administration. In Spain, for example, minor contracts are awarded in this way.

Well, as its name indicates, a minor contract does not represent a large outlay of public resources, so it is allowed to do so to expedite the process.

Me too? How can I apply for a public contract?

If you already know what a public contract is and what you want is to reach an agreement with the Administration, you should know that what you think is very possible.

The State, as we have said previously, must publish those services that it needs, or those goods that it wishes to acquire.

Once it has been published, we must review a document called “specifications”. It specifies the requirements that the company offering the good or service must meet, as well as the requirements that this good or service must meet.

After reading the announcement and the specifications, if we comply and our product or service also, we will issue our proposal through the channels indicated in the announcement and we will wait to see if we are lucky.

See also  Contemporary art shoots up its price by 400% | Fortune

If we are lucky, we will be awarded the tender and we will sign the contract. If they award it to someone else, they will communicate it. In the same way that if it is not awarded to anyone, we will say that the contest has been deserted.

Leave a Comment