Mexico. Government Procurement: Amendments to the Law for Public Acquisitions

August 5, 2020

As we have been reporting, the Public Sector Procurement, Leasing and Services Law is currently under analysis and discussion by the Lower Chamber at the Mexican Congress. The main objective of the proposed amendments is to include in the law a new comprehensive legal framework to regulate public procurement in order to fulfill certain commitments by the current government in matters of transparency and overcome corruption.

However, due to the health emergency caused by the COVID-19 pandemic and the accumulated shortage of various health supplies, recently, the Mexican Congress, as a matter of urgency, approved a Decree amending only one provision of the current Procurement Law.

The amendment provides the Mexican Government with faculties to acquire medicines and other health services through international organizations without having to observe the procedures set forth in the applicable Regulations on public procurement. The rationale behind the amendment is to expand the possibilities of acquiring medicines at lower prices, through transparent and efficient processes.

This reform has generated great controversy by including an exception to the current procurement regime and allowing the Federal Government to purchase medicines through international organizations such as the United Nations Office for Project Services (UNOPS) and the World Health Organization (WHO).

The criticism also derives from the ambiguity of the rules to verify the entire acquisition process and whether the supplies that are acquired comply with domestic regulations and regulatory standards. It seems that it will be on the entire discretion of the authority to determine the application of this exception, instead of the regular public bidding process.

Within the legal framework of this reform passed by the two chambers, the Government already signed the first agreement with UNOPS and the WHO to acquire medicines through these mechanisms, in accordance to which an initial investment of $ 6,800,000 million dollars is expected by the year 2021.

The publication of this decree in the Federal Official Gazette is pending. OLIVARES will continue to analyze the possible actions to be taken by the companies and individuals that are eventually affected by this amendment once it enters into force or when applied in prejudice of certain civil rights, as some violations to the Constitution, international treaties and others laws are foreseen.