As a general rule, public entities must procure or contract through public bidding. However, when a public entity requiring the work or the acquisitions duly justifies that the public bidding procedure does not satisfy the best condition test in connection with price, quality, financing, opportunity, efficiency, effectiveness, impartiality, honesty and transparency, it may elect not to carry out the public bidding procedure and award the contract through: (i) a restricted invitation procedure, or (ii) a direct award.

Restricted invitation and direct award are considered exception procedures to the public bidding and shall be properly justified, including the reasons why public tender is not the most appropriate route to ensure the best contract conditions in terms of price, quality, timing, etc. Exceptional procedures are also allowed, for example, when a public tender process does not result in an award provided that the essential and original contract requirements remain unchanged from the tender.

For instance, the PPP Law allows a direct award when there are insufficient options for the development of infrastructure or equipment, or when there is only one possible developer in the market.

Additionally, the Works Law and the Acquisitions Law allow the direct award when the works or services, or when the goods to be acquired, deal with the Army or the Navy, or when a tender process may put national security or public safety at risk.

On the other hand, the Hydrocarbons Law does not contemplate the exceptional procedures of direct award or restricted invitation procedure. Therefore, the hydrocarbons exploration and extraction contracts can only be awarded through a public tender.

As already mentioned, the granting of concessions related to highways, railroads, ports and airports only allow public tender processes.

The Procurement Laws contemplate economic penalties for the bidders, service providers or contractors who violate the competitive bidding requirement. In addition, the authority may temporally disqualify or ban anyone from directly or indirectly participating in procurement procedures or entering into contracts regulated under the Procurement Laws for breaching their provisions. Likewise, there are administrative laws that impose sanctions on the public officers that circumvent the provisions of the Procurement Laws.