Direct Contracting Regime in Public Purchases Limitations to the Decision-Making Power of Contracting When There Is No Plurality of Bidders in the Market

Abstract

The Public Administration Contracting Statute endowed State entities with particular discretionary powers for them to dispense with the competitive contractual selection processes, proceeding to directly purchase goods or services in the market when they verify the non-existence of a plurality of suppliers. The exercise of these prerogatives implies a certain freedom of choice between different decision alternatives to achieve a goal of general interest. However, to validate this administrative decision, it must be in accordance with particular values, rules, ​​and principles that limit the decisional margin. Likewise, by nature, the foregoing decision-making process for public procurement faces market failures linked to imperfect competition, imperfect information, and public goods. These matters affect decision-making processes for public procurement and the possibility of achieving the expected ends of hiring. In this framework, this article examines the inefficiency of this contracting modality due to its failures in the allocation of public resources, giving rise to welfare losses for the entire community.