In accordance with the Works Law and the Acquisitions Law, the public entities covered are:

• all administrative units of Mexico’s federal executive branch (except for those that have their own special procurement regime, such as PEMEX, CFE, etc.);
• the Ministries of State and the Legal Counsel of the federal executive power;
• the Attorney General’s Office;
• the decentralized entities;
• the state-owned entities and trusts where the settlor is the federal government or a state-owned entity; and
• the States, the Municipalities and their public entities when federal funds form part of funding, in accordance with the covenants entered with the federal executive power.

In another example, in accordance with PPP Law, the public entities covered are:

• the agencies and entities of the federal public administration;
• federal public trusts not considered quasi government entities;
• persons of federal public law, with autonomy derived from the Mexican Constitution; and
• the States and municipalities when using federal funds, in accordance with the covenants entered with agencies or entities of the federal public administration. 

For instance, public entities covered by the Procurement Laws include, among others, the SCT, SEP, the Ministry of the Interior, ISSSTE, IMSS, CONAGUA, the Army and the Navy, among others. 

Moreover, under the energy secondary laws published in August 2014, the public agencies covered are: (i) under the Hydrocarbons Law, the National Hydrocarbons Commission (“CNH’’); (ii) under the PEMEX Law, PEMEX and its subsidiary productive companies; (iii) under the CFE Law, CFE and its subsidiary productive companies; (iv) under the Electric Law, the National Center for the Control of Energy (CENACE) and (v) under the Third Title Activities Regulations, the Mexican Energy Regulatory Commission (the “CRE”) and the National Center of Natural Gas Control (the “CENAGAS”).

There are no private entities covered by these Procurement Laws.

Yes. For instance, under the Acquisitions Law, contracts entered into agencies or public entities, are not covered under this law, unless the agency or entity that is obligated to deliver or perform, has not capacity to do it by itself and retains a third party to perform or deliver. However, the Acquisitions Law will not apply if the amount of the contract with such third party does not exceed 49% of the amount of the contract entered into between the agencies or entities. A similar principle applies under the Works Law. 

Now, there are also co-operations between public bodies. For instance, under the Acquisitions Law, public agencies may agree to contract certain goods or services under one single joint negotiation. This not only applies to goods and services of general use, but also to other products such as medicines, medical equipment and vaccines, as well as insurance coverage. This structure allows them to join efforts to procure goods and services reducing prices and improving conditions. One single entity conducts the process, while the relevant contracts will be entered with each specific entity separately.

The contracts that are covered are those that relate to the procurement of: (i) public works and related services, (ii) acquisitions, leases, rendering of services of any nature, (iii) public-private partnerships agreements, (iv) hydrocarbons exploration and extraction contracts (under the modalities of (a) production sharing contracts; (b) profit sharing contracts; (c) license contracts; and (d) services contracts), (v) coverage agreements to sell electricity and/or other associated products to the CFE in its character of basic service supplier; and (vi) those contracts for the development of strategic projects related with the expansion of the natural gas transportation system and natural gas integrated national storage to be entered with CENAGAS. 

In other words, the types of contracts include acquisitions (sale and purchase), lease agreements, services agreements, master agreements, public works contracts - unitary price and lump sum, services related to public works, PPP contracts, PPAs, open contracts and upstream related contracts, among others.

In principle, the changes to an existing contract do not require a new procurement procedure.

For instance, the Acquisitions Law provides that with the prior acceptance of the supplier, the public entities may modify the contracts up to twenty percent of the amount or maximum budget originally agreed.

Also, except for contracts under the Acquisitions Law and Works Law, contracts may be transferred with the prior written authorization from the public entity, and as long as the assignee complies with all the requirements of the original public bidding procedure, or as set forth in the relevant contract.

Under the laws covering the contracts entered by the energy public agencies, such changes are typically regulated in accordance with the provisions of the respective contract.

For instance, the Acquisitions Law and its Regulations describe the applicable regime for framework agreements. It establishes that the Ministry of Public Function (“SFP”) can promote framework agreements with the prior determination of the technical and quality characteristics to be agreed with the relevant agencies. The framework agreements are the contracts entered by a public agency with one or more possible suppliers. These agreements specify the technical and quality requirements, terms and conditions, including pricing that will later on regulate the specific acquisition, lease or services contract.

The execution of framework agreements is not subject to the provisions of the Acquisitions Law, but to the applicable procedure determined by the SFP, which will contemplate the principles of economy, effectiveness, efficiency, impartiality and honesty. A market research should be previously conducted. Any party can subsequently adhere to the framework agreement. The specific contracts deriving from a framework agreement, will not be subject to a public tender process, but will be directly awarded.

The PPP Law and its Regulations regulate procurement of PPPs and their operation; generally, the procurement process is similar to those conducted under the Works Law and Acquisitions Law.

However, for the first time in Mexico, unsolicited proposals are regulated under the PPP Law. Anyone interested in sponsoring a public-private partnership may submit their proposal to the competent federal entity. The public entities publish in the Official Federal Gazette and in their own web page goals, sectors and kind of projects under which they are willing to receive unsolicited proposals for their analysis and subsequent tender. The sponsor of the unsolicited proposal will have a benefit in the evaluation of its economic proposal that may not exceed ten percent in relation to the economic criteria indicated to award the contract, as part of a tender process. The Regulations establish the methods and procedures for calculating this benefit.

Concessions are regulated as per the applicable legislation of the corresponding industry sector. For instance, concessions of federal highways are regulated and awarded by the SCT in terms of the Federal Highways Law, while ports and certain port activities are also subject to concession under the Ports Law, and while railways are subject to concession under the Railway Service Law. The concessions shall be awarded by public tender according to a public call published in the Official Federal Gazette.

In addition, article 27 of the Mexican Constitution provides that in connection with petroleum and other solid, liquid and gaseous hydrocarbons located in the subsoil, the Nation will have ownership and no concessions shall be granted. With the purpose to secure revenues for the Mexican State for the long term development of the Nation, it will carry out hydrocarbons exploration and extraction activities through (i) the award of allocations to State Productive Companies, or (ii) the award of contracts with such State Productive Companies or private entities, in accordance with the corresponding regulatory laws.

The Procurement Laws and the tender rules set forth anti-avoidance rules including bid rigging consequences. They generally set forth economic penalties and sanctions for the bidders, service providers or contractors who violate these laws. For instance, in any typical tender process, bidders will be required to file statements related to: (i) who is participating in the tender, (ii) the identity of consortium parties and parent entities, (iii) integrity (not conducting any actions to influence a result), (iv) they not implementing structures to circumvent any sanctions or participation restrictions under the relevant law, and (v) fair and market prices, not under collusion with other bidders, etc. Note that under the Acquisitions Law and the Works Law, economic penalties are generally imposed by the SFP. In addition, the SFP may temporally bar anyone from directly or indirectly participating in procurement procedures, or enter into contracts, upon the occurrence of certain circumstances, including without limitation, submitting false information or acting with bad faith or willful misconduct during any procurement procedure, performance of a contract or during its term, or in the submission of one conciliation or non-conformity action. This ban may range from 3 months to 5 years. In other regimes, such as those related to power and oil and gas, different agencies may impose sanctions or penalties.