Costa Rica - Selling to the GovernmentCosta Rica - Selling to the Govt
The Costa Rican Government procurement system is governed by the Costa Rican Financial Administration Law.
Government entities generally acquire their goods and services through public tenders, which are published in the official newspaper, La Gaceta. During 2018 Costa Rica government acquired good and services by US $ 2,319 billion.
In 2010, the Government of Costa Rica created an electronic platform for public procurement called Mer-Link. Mer-Link is a technological platform for public purchases. Its virtual purchasing model allows government entities to purchase products and services electronically. In 2016 Costa Rica government announced that it was migrating to the Sistema de Compras Públicas (SICOP) in March 2017. Mer-Link/ SICOP has partially published the requirements of more than 140 government entities (of the more than 300 entities). However, the system is still not being used to its full capacity. The government office in charge of managing this system (Gobierno Digital) is strongly encouraging government entities to utilize the electronic platform. Local and foreign companies that wish to participate in this electronic method of public procurement may do so online at www.sicop.go.cr. Early 2019, local government announced the full integration to SICOP of three of the largest state-owned enterprises, the Costa Rican Institute of Electricity and Telecommunications (ICE), The Costa Rican Institute of Social Security (Caja Costarricense de Seguro Social-CCSS) is the second largest government entity that requires products and services for their operations (drugs, pharmaceuticals, medical equipment, supplies, etc.) CCSS’ website publishes their requirements for all public hospitals (10), clinics (500) and “EBAIS” (Small medical units with basic equipment-1000) and the National Institute of Insurance (INS).
Certain purchases are made directly from suppliers that have been pre‑qualified and pre‑registered with government entities. However, public procurement still lacks transparency. There are plans to migrate the system, making SICOP the primary platform used for public procurement; but it is unclear when, or if, this complete system migration will occur.
Foreign companies may establish a representative through a Power of Attorney for a specific tender. This representative does not need to be from Costa Rica. A general Power of Attorney can also be given to an individual or company to represent the foreign company in various tenders for a specified period of time.
The local representative should be able to translate tender documents from Spanish into English and assist in preparing bid offers in Spanish. Some large projects may require the presence of U.S. company officials in Costa Rica in order to better evaluate the requirements and prepare competitive offers to the Costa Rican Government entity.
Foreign companies may bid directly on government tenders in Costa Rica. However, when competing for government contracts, there is a significant advantage in having a strong local partner or representative. The local representative should be established, reputable, well-known and respected in business circles, and knowledgeable about Costa Rican business culture and practices.
As noted earlier, the Gold Key Service (GKS) and the International Partner Search (IPS) are available through the Commercial Section at the U.S. Embassy in San Jose or through a U.S. Export Assistance Center. These options are an excellent economic strategy for identifying potential partners or representatives in Costa Rica. (See “Web Resources” at the conclusion of this chapter.)
The Costa Rican General Comptrollers Authority administers the Public Procurement law. The law establishes financial limits for determining the administrative procedures the Government entities or ministries must observe when issuing the necessary tenders for goods or services. The following is a chart with the latest economic limits for 2019 (in U.S. Dollars):
Table 1 – 2019 Costa Rica U.S. Tender Limits
*Exchange rate used as of April 2019: US$1=Costa Rican Colones 607
(Note: Public tenders are announced in the official newspaper La Gaceta. Abbreviated tenders are circulated among pre-registered suppliers. Direct Purchases are made to pre-registered suppliers).
Through the tender schedule, the government is attempting to avoid unnecessary delays in the bidding process and the payment of interest charges on undisbursed loans provided by international lenders. The system exempts tenders of certain amounts made by registered suppliers from the possibility of appealing to the Comptroller's Office. The procuring entity must handle any complaints from bidders. Under CAFTA-DR, U.S companies will be given “national treatment” for most government procurement of goods and services. The agreement sets certain dollar thresholds for these procurements ($58,550 for national governments and $477,000 for “sub-central” governments). For more information, please see the United States Trade Representative’s CAFTA webpage.
Five important government entities follow the above-mentioned guidelines: the telecommunications/electricity institute, the Costa Rican Institute of Electricity (ICE), the Costa Rican Petroleum Refinery (RECOPE), the Costa Rican Institute of Social Security (CCSS), the National Insurance Institute (INS), and the Government's National Procurement Department (Proveeduria Nacional). These entities are the most important Costa Rican Government buyers/contractors and have traditionally been the largest generators of public tenders in Costa Rica. Recently National Railway Institute has been included in these guidelines.
CS Costa Rica encourages U.S. manufacturers and exporters of goods and services to register their firms with the relevant Costa Rican Government institutions by contacting their procurement departments. More importantly, we recommend that U.S. companies interested in exporting to Costa Rica have contract with a local representative who can lead the registration process with corresponding government entities. Registration will allow the procurement departments of government institutions to invite foreign firms to bid on tenders and to be considered for direct purchases.
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. Click here for more information: https://2016.export.gov/advocacy/
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). Please refer to the Project Financing Section in Trade and Project Financing for more information. A helpful guide for working with the MDBs is the Guide to Doing Business with the Multilateral Development Banks.
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.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
Government entities generally acquire their goods and services through public tenders, which are published in the official newspaper, La Gaceta. During 2018 Costa Rica government acquired good and services by US $ 2,319 billion.
In 2010, the Government of Costa Rica created an electronic platform for public procurement called Mer-Link. Mer-Link is a technological platform for public purchases. Its virtual purchasing model allows government entities to purchase products and services electronically. In 2016 Costa Rica government announced that it was migrating to the Sistema de Compras Públicas (SICOP) in March 2017. Mer-Link/ SICOP has partially published the requirements of more than 140 government entities (of the more than 300 entities). However, the system is still not being used to its full capacity. The government office in charge of managing this system (Gobierno Digital) is strongly encouraging government entities to utilize the electronic platform. Local and foreign companies that wish to participate in this electronic method of public procurement may do so online at www.sicop.go.cr. Early 2019, local government announced the full integration to SICOP of three of the largest state-owned enterprises, the Costa Rican Institute of Electricity and Telecommunications (ICE), The Costa Rican Institute of Social Security (Caja Costarricense de Seguro Social-CCSS) is the second largest government entity that requires products and services for their operations (drugs, pharmaceuticals, medical equipment, supplies, etc.) CCSS’ website publishes their requirements for all public hospitals (10), clinics (500) and “EBAIS” (Small medical units with basic equipment-1000) and the National Institute of Insurance (INS).
Certain purchases are made directly from suppliers that have been pre‑qualified and pre‑registered with government entities. However, public procurement still lacks transparency. There are plans to migrate the system, making SICOP the primary platform used for public procurement; but it is unclear when, or if, this complete system migration will occur.
Foreign companies may establish a representative through a Power of Attorney for a specific tender. This representative does not need to be from Costa Rica. A general Power of Attorney can also be given to an individual or company to represent the foreign company in various tenders for a specified period of time.
The local representative should be able to translate tender documents from Spanish into English and assist in preparing bid offers in Spanish. Some large projects may require the presence of U.S. company officials in Costa Rica in order to better evaluate the requirements and prepare competitive offers to the Costa Rican Government entity.
Foreign companies may bid directly on government tenders in Costa Rica. However, when competing for government contracts, there is a significant advantage in having a strong local partner or representative. The local representative should be established, reputable, well-known and respected in business circles, and knowledgeable about Costa Rican business culture and practices.
As noted earlier, the Gold Key Service (GKS) and the International Partner Search (IPS) are available through the Commercial Section at the U.S. Embassy in San Jose or through a U.S. Export Assistance Center. These options are an excellent economic strategy for identifying potential partners or representatives in Costa Rica. (See “Web Resources” at the conclusion of this chapter.)
The Costa Rican General Comptrollers Authority administers the Public Procurement law. The law establishes financial limits for determining the administrative procedures the Government entities or ministries must observe when issuing the necessary tenders for goods or services. The following is a chart with the latest economic limits for 2019 (in U.S. Dollars):
Table 1 – 2019 Costa Rica U.S. Tender Limits
| Budget Brackets | Annual Budget | Public Tenders | Abbreviated Tenders | |
| (U.S. $) | (U.S. $) | (U.S. $) | ||
| More than | More than | From | To | |
| A | 125,864,910 | 1,695,222 | 244,481 | 1,695,222 |
| B | 84,019,770 | 1,459,638 | 75,848 | 1,459,638 |
| C | 42,009,884 | 1,023,064 | 68,253 | 1,023,064 |
| D | 20,988,468 | 730,313 | 60,691 | 730,313 |
| E | 4,200,989 | 511,202 | 53,097 | 511,202 |
| F | 2,098,847 | 438,056 | 45,502 | 438,056 |
| G | 1,258,650 | 292,092 | 37,940 | 292,092 |
| H | 420,098 | 219,110 | 22,751 | 219,110 |
| I | 125,864 | 145,963 | 15,156 | 145,963 |
| J | 73,031 | 7,742 | 73,031 | |
| Instituto Costarricense de Electricidad (ICE) | 11,918,552 | 157,600 | 11,918,552 | |
| Junta Administrativa del Servicio Eléctrico de Cartago (JASEC) | 1,127,615 | 43,986 | 1,127,615 | |
| Instituto Costarricense de Ferrocarriles (INCOFER) | 513,871 | 39,110 | 513,871 | |
(Note: Public tenders are announced in the official newspaper La Gaceta. Abbreviated tenders are circulated among pre-registered suppliers. Direct Purchases are made to pre-registered suppliers).
Through the tender schedule, the government is attempting to avoid unnecessary delays in the bidding process and the payment of interest charges on undisbursed loans provided by international lenders. The system exempts tenders of certain amounts made by registered suppliers from the possibility of appealing to the Comptroller's Office. The procuring entity must handle any complaints from bidders. Under CAFTA-DR, U.S companies will be given “national treatment” for most government procurement of goods and services. The agreement sets certain dollar thresholds for these procurements ($58,550 for national governments and $477,000 for “sub-central” governments). For more information, please see the United States Trade Representative’s CAFTA webpage.
Five important government entities follow the above-mentioned guidelines: the telecommunications/electricity institute, the Costa Rican Institute of Electricity (ICE), the Costa Rican Petroleum Refinery (RECOPE), the Costa Rican Institute of Social Security (CCSS), the National Insurance Institute (INS), and the Government's National Procurement Department (Proveeduria Nacional). These entities are the most important Costa Rican Government buyers/contractors and have traditionally been the largest generators of public tenders in Costa Rica. Recently National Railway Institute has been included in these guidelines.
CS Costa Rica encourages U.S. manufacturers and exporters of goods and services to register their firms with the relevant Costa Rican Government institutions by contacting their procurement departments. More importantly, we recommend that U.S. companies interested in exporting to Costa Rica have contract with a local representative who can lead the registration process with corresponding government entities. Registration will allow the procurement departments of government institutions to invite foreign firms to bid on tenders and to be considered for direct purchases.
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. Click here for more information: https://2016.export.gov/advocacy/
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). Please refer to the Project Financing Section in Trade and Project Financing for more information. A helpful guide for working with the MDBs is the Guide to Doing Business with the Multilateral Development Banks.
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.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.