The Administration, once due process has concluded, shall disqualify from participating in administrative contracting procedures related to public road infrastructure projects, for a period of three to ten years, depending on the seriousness of the offense, any natural or legal person who, without just cause, incurs a serious breach of contract, for any of the causes established in this article. The sanction provided herein shall prevent the contractor's participation in future administrative contracting procedures related to public road infrastructure projects.
The disqualification (inhabilitación) shall be communicated to the Office of the Comptroller General of the Republic, which shall maintain a public-access registry thereof.
The application of the warning (apercibimiento) sanction indicated in Article 99 of this law shall not be necessary as a prerequisite for the application of the disqualification (inhabilitación) sanction, in cases of serious breaches in contracts related to public road infrastructure projects.
Public road infrastructure projects shall be understood as those involving the construction, reconstruction, conservation, maintenance, and rehabilitation of national and cantonal roads, executed by the State or local governments respectively, including any type of works related to bridges and other connected road structures, as well as contracts performed for quality control of the works, administration, supervision, or inspection of this type of project on behalf of the State or the municipalities.
The disqualification (inhabilitación) is not extinguished by the merger, transformation, or change of corporate name or business name of the sanctioned entity. In the event that a merger gives rise to a new entity, or if the sanctioned company is absorbed by another or forms a consortium to participate in new contracts with the State, the effects of the sanction shall fall upon the entity that remains.
The establishment of a new company for the purpose of evading the effects of the disqualification (inhabilitación) sanction shall be considered a fraud of law, in which case the effects of the sanction shall fall under equal conditions upon the company thus constituted.
For the purposes of the disqualification (inhabilitación) sanction provided for in this article, any of the following shall be considered serious offenses:
- a)Actions or omissions by the contractor that cause breaches in the public road infrastructure project, endangering the life or safety of persons.
- b)Conduct attributable to the contractor that causes unforeseen delays and cost overruns for the work that cannot be fully remedied through the execution of other sanctioning mechanisms regulated in the bidding terms (cartel) and the contract.
- c)Recurrent breaches by the contractor in the execution of the contractual object for which it has already been previously sanctioned through other mechanisms regulated in Law No. 7494, Public Administrative Contracting Law (Ley de Contratación Administrativa), of May 2, 1995, and its regulation.
- d)Causes attributable to the contractor that lead to contractual termination in the jurisdictional venue, when such action is brought by the administration and there is a final judgment against the contractor.
- e)Other serious offenses as established in the bidding terms (cartel) and the contract.
In those cases where a public official, by reason of their position, becomes aware of the presumed existence of a contractual breach, they must immediately inform the corresponding head (jerarca), so that a preliminary investigation can be carried out to determine if there is merit to open a sanctioning procedure, under penalty of incurring a serious offense, without prejudice to other liabilities established by the legal system.
When the Office of the Comptroller General of the Republic, in the exercise of its powers, indicates a possible contractual breach, it shall recommend, through its technical opinion to the competent administrative authority, the opening of the respective procedure to determine if the application of the disqualification (inhabilitación) sanction is appropriate, as provided in this article. The Administration shall guarantee at all times sufficient opportunity for a hearing and defense.
It shall be the responsibility of the Office of the Comptroller General of the Republic to keep the registry of contractors that have been disqualified updated, and it shall be the obligation of the Administration and the Office of the Comptroller General of the Republic to verify this registry during the bid evaluation phase of those contracting procedures whose object is the one provided for in this article; this is for the purpose of declaring inadmissible any bid coming from a company disqualified for the causes indicated herein.
(Thus added by the sole article of Law No. 9743 of November 5, 2019, "to disqualify the contractor who breaches the construction, reconstruction, conservation, maintenance, and rehabilitation of public road infrastructure projects")