P.R. Laws tit. 21, § 4366
The municipality may contract whatever professional, technical, and advisory services that are necessary to carry out municipal activities, programs, and operations or to comply with any other public end authorized by this subtitle, or by any other applicable statute. Nevertheless, any contract executed or subscribed in contravention to the provisions of this section shall be deemed to be null and ineffective, and the public funds invested in its administration or execution shall be recovered on behalf of the municipality through the proper action filed to such effect.
The municipality shall not grant any contract in which any of the legislators, officers, or employees have, directly or indirectly, any pecuniary interest, unless authorized by the Governor of Puerto Rico, upon the recommendation of the Secretary of Justice and of the Commissioner.
Likewise, no legislator, municipal official or employee shall lend or borrow money, nor accept donations or gifts from any contractor who is providing services or supplies to the municipality.
Furthermore, any contract that is executed or subscribed in contravention to the following special provisions shall be null:
(a) Contracts for training services.— No contracts shall be subscribed with private entities for the performance of training services until the competent municipal authority certifies in writing that there are no competent and qualified municipal employees or officials nor government agencies or entities engaged in providing low-cost training services, such as the University of Puerto Rico or the Central Labor Advisory and Human Resources Administration Office, that may offer the required services.
(b) Contracts for auditing services.— The municipality shall contract the services of an external auditor duly qualified and certified as certified public accountant, who shall receive orientation by the personnel of the Office of the Comptroller and shall be responsible for the annual auditing of the municipal financial statements.
The report on the municipal financial statement, which shall be prepared by the external auditor contracted by the municipality shall pass judgment on the reliability and correction of said financial statements and compliance with the provisions of the Single Audit Act of 1984, Public Law 98-502, as amended, with the recommendations of the Comptroller and the correction of the deficiencies found in his/her previous reports.
(c) Contracts for the performance of public works and improvements.— The contracts for the performance of public works and improvements shall not be signed until:
(1) The contractor gives evidence before the municipality of the payment of the corresponding State Insurance Fund policy and the corresponding municipal license;
(2) delivers the bond issued to guarantee the payment of wages and the materials used in the work, and
(3) delivers or deposits any other performance bond required by the Bidding Board.
Any contract for the construction or improvement of public works shall provide for the withholding of ten percent (10%) from each partial payment until the work is completed, inspected and accepted by the municipality, and until the contractor gives evidence that he has been relieved of all obligations as an employer. Provided, That the municipality may disburse part of the withheld ten percent (10%) when the work is substantially finished or between phases of the construction or improvement of public works project.
The municipalities shall keep a record of all contracts granted, including the amendments thereto, and shall remit a copy of them and the deeds for the acquisition and disposition of assets to the Office of the Comptroller of Puerto Rico, pursuant to §§ 97 et seq. of Title 2 and its Regulations.
The authority to execute contracts by virtue of the powers and faculties granted to municipalities under §§ 4051 and 4054 of this title, and to execute contracts for services, as well as for professional, technical, and consulting services, shall be exercised solely by the mayor, except as otherwise expressly provided in this subtitle. The mayor shall not be required to submit such contracts to the Municipal Legislature in order to exercise the powers and authorities granted to municipalities under §§ 4051 and 4054 of this title, except as otherwise expressly provided by the law, or when the intervention of the Municipal Legislature is expressly required by the law.
History —Aug. 30, 1991, No. 81, § 8.016; Dec. 18, 1997, No. 153, § 1; Dec. 20, 1997, No. 178, § 1; Sept. 2, 2000, No. 344, § 2; Sept. 7, 2004, No. 258, § 22; Mar. 3, 2016, No. 14, § 1.