Mexico. Government Procurement: Proposal to reform the Law for Public Acquisitions

May 15, 2020

A proposal with a draft decree by which various provisions of the Public Sector Procurement, Leasing and Services Law are reformed, added and repealed was recently published, which has the purpose of establishing a new legal framework to regulate public contracting in order to fulfill certain commitments acquired by the current government in matters of transparency and the fight against corruption, where the following modifications are of particular relevance:

• Implementation of a new model of consolidated purchases which favors the saving of public resources and the obtaining of better conditions of price and quality, creating for this purpose a Consolidated Contracting Committee.
• Exception regime with international intergovernmental organizations through collaboration mechanisms that will not be subject to the provisions of the new procurement law.
• National tenders in which only Mexican nationals can participate, it is established that the goods to be acquired must be produced in the country and have at least 65% national content, when previously it was 55%. Except in those exceptional cases where the agencies or entities are subject to free trade agreements that contain provisions on public sector purchases.
• Concerning open international tenders, in which Mexican and foreign bidders can participate, regardless of the origin of the goods to be acquired or leased and the services to be contracted, it is included that such modality may be chosen when it is convenient in terms of price, or because the existing supplier(s) or goods cannot meet the dependency’s requirement regarding quantity, quality and opportunity.

• In public bidding procedures, invitation to at least three people and direct awards, bidders may only submit one proposal in each procurement procedure and, in the case of legal representatives of legal entities, they may only submit proposals on behalf of a single bidder. A certain preference continues on substitute goods for products subject to exclusive rights, which we consider unconstitutional.

These are some of the most relevant modifications in this proposal that should be widely discussed in order to give contractors clarity and legal certainty about their implementation in harmony with the Mexican Constitution, other provisions of our current legal framework and international treaties.

Although the face-to-face sessions of the Chamber of Deputies are suspended due to the measures implemented for the mitigation and control of the COVID-19 pandemic, the commissions continue to work virtually and the possibility of holding plenary sessions in the same way is being considered, and taking into consideration the priority of this initiative, the intention is to discuss it shortly. OLIVARES will continue to monitor and follow up on the corresponding discussions and possible actions to be taken once it is approved.