Mexico Amends Public Sector Procurement and Public Works Laws

June 18, 2009
Mexico Amends Public Sector Procurement and Public Works Laws

On May 28, 2009 various amendments to Mexico's Acquisitions, Leasing and Public Sector Services Law (Ley de Adquisiciones, Arrendamientos y Servicios del Sector Público or by its initials in Spanish, LAASSP) and the Public Works and Related Services Law (Ley de Obras Públicas y Servicios Relacionados con las Mismas or by its initials in Spanish, LOPSRM). These amendments will enter into force thirty (30) calendar days following their publication. With respect to procurement, one of the most important reforms consist of the modification of contract awarding criteria to establish, when two or more feasible proposals have been submitted, a system of "points and percentages" or, as the case may be, a "cost/benefit" analysis. The existing "lowest price" standard will continue to apply in those cases in which the points and percentages or cost/benefit methods are not used, with the understanding that the contract will be awarded to the lowest price according to the terms of a market study carried out by the authorities prior to conducting the bidding process. Additionally, various provisions of the LAASSP have been modified in regard to existing public bidding processes, establishing among other things, the existence of electronic bids to be submitted as proposals through electronic means via the CompraNet (PurchaseNet) electronic system that will be managed by the Mexican Department of Public Function (Secretaría de la Función Pública). The amendments to both laws foresee the participation of citizen witnesses (Testigos Sociales) when the amounts involved in a public procurement process exceed those standards established in each law. In addition, with respect to nullifying contracting procedures, both the LAASSP and the LOPSRM reduce the time period for filing a protest from ten (10) working days to six (6) working days and also establish the basis under which such protests may be filed, as well as conditions that must be met in order to complete a protest filing. Taken together, the amendments to both laws represent an important development, and given the formalities that typically accompany public bidding processes, make it indispensible to analyze the reforms to understand how they might impact a specific public bidding procedure, and especially given the different considerations that may exist in particular procurement practices of Mexican governmental agencies

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