In December 2002 Mexico's House of Representatives passed a bill amending the Law on Public Works and Related Services and the Law on Acquisitions, Leases and Services of the Public Sector. These two statutes regulate all acquisitions made by the federal government, as well as all public works projects initiated by governmental agencies and entities. Most of the main energy projects are regulated by this legislation, including Pemex oil and gas production contracts.

The bill will become effective following Senate approval and publication in the Federal Register. This is expected in the first semester of 2003.

The bill will significantly change the way bids are implemented by Pemex, CFE (the electricity power utility company), and other government agencies and entities.

The bill introduces a number of significant amendments, including:

  • the establishment of a points and percentages mechanism to evaluate proposals, rather than the current price-driven criteria;

  • the creation of the Federal Commission of Governmental Contracting, a governmental agency under the ambit of the Comptroller Bureau, which will interpret the government procurement laws and conduct infringement procedures, including the resolution of non-compliance complaints;

  • the encouragement of arbitration as an alternative dispute resolution mechanism between contractors and public entities, and the authorization of the inclusion of arbitration clauses in the contract or in any amendment agreement signed thereafter; and

  • a requirement for governmental agencies to disclose to the general public the draft bidding guidelines of major projects for review and comments (the so-called 'pre-bid package') before the beginning of the tender procedure.

For further information in this topic please contact Rogelio L√≥pez-Velarde at Lopez Velarde, Heftye, Abogados by telephone (+52 55 50 81 1424) or by fax (+52 55 50 81 1425) or by email ([email protected]).