New administrative procurement law in Nicaragua
Nicaragua published Law No. 1238, “State Administrative Procurement Law,” in the Official Gazette on February 21, 2025, which will come into effect in one month. The new regulation governs the procedures and general rules that will regulate administrative procurement in the public sector.
This law unifies the procurement processes with the public sector and municipal entities. Previously, these procurements were regulated by two separate laws: Law No. 737, “Public Sector Administrative Procurement Law,” and Law No. 801, “Municipal Administrative Procurement Law,” along with their respective regulations, which have now been repealed.
Changes in procurement amounts
The Law establishes new thresholds for different types of administrative procurement, which can be updated by the Ministry of Finance and Public Credit (MHCP) through a Ministerial Agreement, considering the accumulated inflation rate and after consultation with the Central Bank of Nicaragua (BCN). The current reference amounts are as follows:
- Framework agreements: Apply to the procurement of standardized and commonly used goods and services through an Electronic Goods and Services Catalog. They do not have a reference amount.
- Public tender: Applies to procurements over C$10,000,000.00 (US $272,071.83).
- Selective tender: Applies to procurements between C$2,000,001.00 (US $54,414.39) and C$10,000,000.00 (US $272,071.83).
- Simplified procurement: Applies in cases expressly provided for in the law, regardless of the procurement amount.
- Minor procurement: Applies to procurements that do not exceed C$2,000,000.00 (US $54,414.37).
- Consultant contest: Applies to the hiring of individual consultants or firms, with no monetary limit.
Modifications in procedures
Changes have been introduced to the procurement procedures, including:
- State Supplier Verification Certification: Now mandatory for any state procurement exceeding the threshold for minor procurement. Previously, this requirement applied only to procurements exceeding C$500,000.00 (US $13,603.59).
- Appeals and legal recourses:
- In public tenders, selective tenders, and contests, an appeal can be filed with the Attorney General’s Office (PGR) or, in the case of municipalities, with the Mayor or highest municipal authority.
- A nullity appeal can be filed with the General Comptroller’s Office (CGR), exhausting the administrative route.
New provisions for businesses and the public financial sector
Businesses and the public financial sector will be authorized to contract under private law, following a procurement manual approved through an administrative agreement from the highest authority and validated by the General Directorate of State Procurement (DGCE).
Additionally, procurement processes exclusively for micro, small, and medium-sized enterprises will be allowed.
It is expected that the Presidency of the Republic will issue the regulations to ensure the law’s proper implementation.
Dania Navarrete
dania.navarrete@garciabodan.com
Senior Associate
García & Bodán
Nicaragua
