A local agent or legal representative is required for all government contracts. Therefore, U.S. companies interested in government procurement or contracts should conduct due diligence and appoint an agent or representative as quickly as possible.
Ecuador is not a signatory to the WTO Agreement on Government Procurement. Ecuador’s Organic Law of the National System of Public Procurement (LOSNCP) regulates most areas of public contracting, except for contracts for exploration and exploitation of hydrocarbon resources, mining, and purchases of strategic goods necessary for national defense. However, non-strategic defense contracting/purchases are subject to the Public Contracting Law. The law also establishes a system of “Catalog Purchases” and an Inverse Bid System through which any contractor can submit an offer to provide a specific product to a public institution. Effective August 2022, the Executive issued a comprehensive reform to the LOSNCP regulations which seeks for efficient and transparent public procurement processes. The regulations determine that the National Public Procurement Service (SERCOP) must manage the public procurement data and information under open data/information principles. The amended regulations establish specific procedures for the different contracting stages such as the presentation and qualification of offers, price readjustment, or contractual terms.
Ecuador’s National Service for Public Procurement (SERCOP) Servicio Nacional de Contratación Pública – Ecuador (compraspublicas.gob.ec) is responsible for public contracting processes, though every process is independently managed by the contracting institution with its own budget and referral terms. For a company (even an Ecuadorian branch of a foreign company) to qualify as a State supplier or competent bidder, it must submit a list of shareholders, stakeholders, and affiliates. If any of the shareholders, stakeholders, or affiliates is a corporate entity domiciled in a “tax haven,” the bidder or supplier is disqualified from the bidding process. Branches must present a list of their headquarters’ shareholders. The goal is to identify the individual that is the shareholder, unless it is a publicly traded company where shareholders can change constantly. Key competitiveness factors include price, training, and after-sales services. All information on public procurement in Ecuador is posted at the SERCOP website.
Bidding for government contracts can be cumbersome, and competitors from other countries do not operate under the restrictions of the U.S. Foreign Corrupt Practices Act. There is no formal discrimination against U.S. suppliers, but the Public Contracting Law establishes the criteria for minimum participation by local suppliers.
To sell to the government, suppliers must be registered in the Unique Registry for Suppliers (RUP). This electronic procedure is mandatory and is the only means to participate in the public contracting process. Offers must be in Spanish, using the format specified by the inviting agency, provincial, or decentralized autonomous governments (municipal city councils), and delivered to the contracting agency as called for in the specification sheets.
The guarantees of faithful fulfillment of the contract are five percent of the total amount. The contracting public institution signs contracts after the revision and award, and do not require further approval by any other authority. SERCOP provides the model contract.
Ecuador renounced its Bilateral Investment Treaty with the United States in 2017, effective in 2018, though prior investments have a ten-year grace period. Specific clauses involving arbitration in any contract must be duly authorized by the Attorney General. The 2018 Organic Law for Productive Promotion, Investment Attraction, Job Creation, and Fiscal Stability and Balance, regarding investment contracts, establishes that for investment contracts exceeding $10 million, both parties can directly agree to a national or international arbitration.
In 2015, the government passed a Public Private Partnership law. This law provides certain tax incentives for foreign and domestic firms that invest in public-private partnership projects. It also created an interagency committee that will approve proposed private investment projects in certain strategic sectors.
Ecuador’s challenging fiscal situation complicates the government’s ability to secure funding for the purchase of products and services. The U.S. Embassy encourages U.S. companies interested in government contracts, or in business activities requiring government licensing or approvals, to consult with U.S. Embassy Quito’s Commercial Unit early in the process.
Potential business opportunities in the public sector are as follows: electric generation, oil and gas upstream and downstream operations, roads, LNG terminals, mining, ICT, and healthcare.
U.S. companies bidding on foreign government tenders also may qualify for U.S. government Advocacy. Within the U.S. Department of Commerce’s International Trade Administration, the Advocacy Center coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters in competition with foreign firms in foreign government projects or procurement opportunities. 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 agency officials expressing support for the U.S. exporters directly to the foreign government. Consult the Advocacy Center’s program web page on trade.gov for additional information.
Financing of Projects
Recent Ecuadorian administrations have sought greater transparency in government procurement and assign the private sector a relevant role, including through public-private partnership models for future investments to attract more well qualified investors. Tender processes for projects tend to take a long time, requiring extended engagement by project developers and financiers. Please contact the U.S. Embassy in Quito for the latest updates on project financing.
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). The Guide to Doing Business with Multilateral Development Banks overviews how to work with MDBs. The 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.
Learn more by contacting the:
- Commercial Liaison Office to the Inter-American Development Bank
- Commercial Liaison Office to the World Bank.
The Export-Import Bank (EXIM) of the United States (https://exim.gov/ provides a full range of services in Ecuador. EXIM offers a range of loan, insurance, and loan guarantee programs to facilitate exports of U.S. goods and services to Ecuadorian governmental institutions and private companies.
The U.S. International Development Finance Corporation (DFC - https://www.dfc.gov/) is the U.S. Government’s development finance institution and it has focused on Ecuador as a priority country. DFC invests across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights, and worker rights. Its financial instruments include debt financing, equity investments, feasibility studies, investment funds, political risk insurance, and technical assistance.