Keep an eye on this “BULLSHIT”. Contract has $3.5 Million of FLUFF baked in.


Ten contracts drawn up in November 2019, by the Urban and Home Cleaning Authority (AAUD), for the rental of heavy equipment for the amount of $ 19.5 million, rest in the Comptroller General of the Republic pending endorsement.

The contracts, whose endorsement was rejected in December last year by the then comptroller, Federico Humbert , were re-entered into that institution by the AAUD after taking over Gerardo Solís.

Through these contracts, carried out by “exceptional procedure”, that is, by direct contracting, the AAUD manages the rental of 64 dump trucks and 27 backhoes, to help in the collection of waste.

The cost of the services to be acquired, in no case exceeds $ 3 million, and all are destined to a different company. However, all companies charge the same rates for the rental, regardless of the model or the year of manufacture of the equipment.

Having re-entered the endorsement system, the contracts must be accepted by insistence. They have been in the Comptroller’s office for more than a month without being endorsed.

AAUD seeks endorsement of $ 19.5 million in direct contracts

The Urban and Home Cleaning Authority (AAUD) awaits the endorsement of the Comptroller General of the Republic of 10 direct contracts, for the sum of $ 19.5 million, for the rental of heavy equipment (91) that will be used for garbage collection in The capital district

The contracts, which the entity manages since November 2019, include the rental of 27 backhoes and 64 dump trucks for a period of one year.

Each contract stipulates a different amount of equipment, daily work hours and the weight of the load per trip.

These contracts were rejected by the Comptroller. However, they were re-admitted to the institution on January 3, one day after the then comptroller Federico Humbert transferred the position to his replacement, Gerardo Solís.

AAUD will spend about $ 20 million on direct contracts
Slimy little bastard.


The contracts in question share several characteristics.

First. The AAUD presented them all for the first time to the Comptroller General of the Republic between November 14, 2019 and December 5 of that year.

Second. Although all contracts are awarded to companies that apparently have nothing in common, the price to pay for the rental of all equipment is the same, regardless of the company or the brand of equipment. That is, in all contracts the AAUD will pay a rent of $ 45 per hour of use per backhoe, and $ 49.50 per hour, in the case of dump trucks.

Third. All contracts have one year term.

Fourth: In no case, the total amount of the contracts exceeds $ 3 million, amount for which the entity would have to request the approval of the Cabinet Council.

Fifth: A notable similarity is the date of re-entry of contracts to the Comptroller. In December last year, the institution denied them the endorsement and they were returned to the AAUD. All contracts re-entered the Comptroller’s Office on January 3, 2020, as stated, one day after the new comptroller took office.

According to the online monitoring system of the Comptroller’s procedures, two of the contracts re-entered for “correction”. The rest were re-entered twice.

Article 77 of the Organic Law of the Office of the Comptroller General of the Republic details that the Comptroller’s Office “will improper any payment order … provided that it is based on legal or economic reasons that merit such measure.”

But the same article explains that the authority that issues the order – in this case, the AAUD – can insist on endorsement through its board of directors. In that case, the Comptroller would be obliged to endorse the contract.

However, the law warns that, after the endorsement by insistence, “any responsibility arising therefrom will fall … on its members [of the board] who voted affirmatively.”

Since the contracts have been re-entered for approval after they have been rejected, it is assumed that these contracts await an endorsement endorsement.

The documents published in Panama Compra detail the area of ​​the capital district in which the contracted teams would provide their services. Of the 10 contracts, 6 specify that the equipment will be used in the area of ​​northern Panama, and the rest, in the sector of eastern Panama.

AAUD will spend about $ 20 million on direct contracts


Why a direct contracting and not a tender?

The AAUD found a justification for not calling for public bidding – according to documents published on the Panama Compra portal – in an article of Law 22 of 2006, on Public Procurement. The article indicates that it can be done in the case of “social benefit” contracts, which are understood as “the acquisition of a good, service and work whose exclusive, punctual and main destination includes the satisfaction of the basic needs of citizens” .

Likewise – in documents published in Panama Compra – the AAUD presents “objective reasons as to why the entity cannot carry out the selection procedure” or tender. Among its reasons, it includes that “more than 30% of the trucks of the AAUD are damaged and in indefinite repair processes”. In addition, the AAUD ensures that it is “necessary and indispensable to proceed with the immediate hiring” of these equipment.


Constitutionalist lawyer Ernesto Cedeño argues that the choice of these companies should be questioned directly, and wonders why a tender was not held in advance. ( I/E – No open bid )

The technical report that accompanies the contract details that the previous rental contracts had an expiration date, which is why Cedeño wonders, what is the lack of planning for the transparent contracting of the equipment.

“Why not bidding, if when you see the contracts you can see that there are several companies with the equipment and there may be competition?” Cedeño questions. The competition, he argued, could mean lower costs for the State.

Rent, more expensive

In this case it is worth asking what is more expensive for the State: buy or rent these equipment?

In the past, the Government has tendered the purchase of equipment similar to those that the AAUD decided to rent. This is the case, for example, of the Ministry of Housing and Land Management (Miviot). In February 2019, this ministry held a tender to buy a dump truck with the same specifications as those that the AAUD now intends to rent.

The Miviot received five proposals with prices ranging between $ 87,000 and $ 163,000 per unit.

Now, the AAUD intends to rent 64 dump trucks. The total purchase price – paying the highest price, that is $ 163 thousand each – would be $ 10.4 million. Instead, the AAUD will pay for its rent – and for just one year –

$ 13.9 million.

Something similar happens with backhoes. In April 2019, the Municipality of Arraiján held a tender to buy a unit with specifications similar to the backhoes that AAUD intends to rent. Five companies submitted proposals, with a price range from $ 63,000 to $ 74,000 for the purchase of a team.

In its direct contracting, the AAUD manages the rental of 27 backhoes. If these equipment is acquired, the total price to be paid – if purchased at the highest price offered to the Municipality of Arraiján – would be about $ 2 million. Instead, the AAUD plans to allocate $ 5.5 million to rent these equipment, and only for one year.

The contracts do not indicate whether the equipment they propose to rent is new or used. A search conducted on imports registered with the Customs Directorate reveals that the companies to which these contracts have been granted have not imported any trucks of this type in recent years.

The published technical reports indicate that the contracted companies must provide the personnel – and their salary – to operate the equipment, and will be responsible for its maintenance.

AAUD will spend about $ 20 million on direct contracts
Not answering the phone……..

This media tried to contact the general administrator of the AAUD, Pedro Castillo, through his cell phone and a close advisor, but at the end of this edition, no official response was obtained.

More contractors

Another contract with different specifications, but with several similarities, was re-entered into the Comptroller General of the Republic on January 3.

This is the rental of three compactor trucks to the company Cleaning, Cleanliness and Recycling, SA, for a period of one year. The amount to be paid for this contract is $ 961 thousand.

The selection of this company and the elaboration of this contract – as in the cases described above – was made directly, through an exceptional procedure.

As with the rental of dump trucks and backhoes, the AAUD claimed to have based its decision on the “social benefit” that is contemplated in the Public Procurement Law. This contract is also awaiting the endorsement of the Comptroller.

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