Published on Jan 29, 2024

January 2024, Nicaragua.

On December 11th, 2023, the National Assembly of Nicaragua approved Law No. 1178 "Law of Additions to Law No. 606, Organic Law of the Legislative Power of the Republic of Nicaragua and Law No. 737, Law of Administrative Contracting of the Public Sector" ("Law No. 1178") and published in the Official Gazette No. 228 on December 15th, 2023. Law No. 1178 will enter into force ninety days after its publication, on March 15th, 2024.

Law No. 1178 created the State Suppliers Verification Commission ("SSVC"), which will oversee and guarantee compliance with the suitable requirements for contracting with public entities by potential bidders, as well as to determine the prohibition regime for them to participate in contracting procedures exceeding five hundred thousand cordobas (C$500,000.00).

With the creation of the SSVC, bidders must request the issuance of a Certificate of Verification of State Suppliers (the "Certificate of Verification"), which will be an essential document required by the agencies and entities of the public sector to all suppliers wishing to participate in procurement processes above the amount previously indicated. The Certificate of Verification shall be valid for a maximum of one year from the date of its issuance and may be cancelled by the SSVC, when there is merit in doing so.

For the issuance of the Certificate of Verification, interested parties must submit to the SSVC, through the person in charge of the State Suppliers Verification Office, the following documentation:

  • letter of request for the issuance of the Certificate of Verification, signed by the legal representative, attaching the power of attorney;
  • in the case of legal entities, they must submit a copy of their articles of incorporation duly registered in the corresponding public registry, a copy of the certificate of registration as a merchant, a copy of the general power of administration and a certificate of the final beneficiary. In the case of individuals, they must submit a copy of the certificate of registration as a merchant issued by the corresponding public registry;
  • copy of the Tax ID;
  • copy of the registration before the municipality;
  • depending on the economic activity, submit a copy of permits or licenses issued by the competent authority;
  • a copy of the supplier's certificate issued by the State Suppliers General Office; and
  • original of a notarized public deed of declaration, in which the bidder declares to comply with the suitability requirements and not to have any impediment to be a bidder.

Likewise, the SSVC is granted powers by law that tend to guarantee due diligence in the confirmation of the information provided by the State's suppliers, and among such powers are the following:

  • verify that all documents, information, and data submitted by suppliers comply with the requirements of the Law;
  • the SSVC may carry out supervisions, as well as the necessary inspections for each supplier of the State requesting the Certificate of Verification. If necessary, for the fulfillment of this power, the CVPE may be assisted by the authorities of the National Police;
  • request the pertinent public institutions to provide information regarding the State supplier;
  • issue the Certificate of Verification; and
  • issue the technical and functional regulations.

Please do not hesitate to contact us if you would like more information on this topic.

The information provided by ARIAS® is presented for informational purposes only. This information is not legal advice and is not intended to create, and does not constitute, an attorney-client relationship. Readers should not act upon this information without seeking advice from professional advisers.

Gustavo-Adolfo Vargas
Partner, Arias Nicaragua.

Josernesto Peña
Associate, Arias Nicaragua.