Law No. 20/16, of 29 December 2016 (“Law 20/16”), approved the legal regime on mandatory compensatory measures to be provided by contractors entering into goods and services agreements with public entities. As a condition for entering into such agreements, public entities must establish compensatory measures to be complied with by the selected provider of goods and services. This aims at increasing the economic value related with the acquisition of goods and services, so as to develop the national economy through interlocked technological, industrial and commercial benefits. Compensatory measures contemplated in Law 20/16 include inter alia the transfer of technology and know-how, subcontracting of and/or entering into joint ventures with local companies, purchase of local goods or services.
When launching a public procurement procedure for provision of goods or services, irrespective of the type of public procurement procedure adopted, public entities are required to include in the tender documents the terms of reference for the compensatory measures to be provided by the prospective contractors. Said terms of reference are to detail the type of compensatory measures to be complied with, as well as its objectives and amount, which may not be less than 30% of the total amount of the goods or services agreement. Similarly, when submitting a proposal for provision of goods or services, prospective contractors are required to include in their proposals also the type of compensatory measures to be provided, the objectives to be achieved through the same, proposed amounts, and beneficiaries thereof. Such proposed compensatory measures will be assessed alongside the bidding proposal, in light of the Public Contracts Law provisions.
The mandatory compensatory measures apply to all goods and services agreements of an amount equal to or higher than USD 10,000,000, or in respect of goods and services agreements to be paid in Kwanzas (AOA) in an amount equal to or higher than AOA 700,000,000 (roughly USD $ 4.000.000, at current exchange rate). To ensure compliance with the agreed compensatory measures, contractors are required to provide the relevant public entities with a first demand guarantee in the amount of 20% of the total amount of the compensatory measures to be implemented.
The economic sectors of priority interest in respect of which compensatory measures must be adopted include National Defense and Security, Energy and Water, Mining, Agriculture, Transports, Industry, Telecommunications, Health, Trade, Education, Fisheries, Science and Technology, Tourism and the Environment.
Law No. 20/16, of 29 December 2016, entered into force on same date.
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