As a federal state, in Argentina the federal government as well as each of its 23 provinces and the autonomous City of Buenos Aires are vested with authority to enact their own public procurement frameworks.
At a federal level, public procurement is principally regulated by the following statutes and regulations:
The following are subject to federal procurement regulations:
Acts Nos 18.875 and 27.437, which establish certain preferences in the benefit of domestic vendors of goods and providers of services, are also applicable to (i) federal state-owned enterprises and companies; ie, all companies in which the federal government holds a controlling interest either in capital stock or in corporate decision making; and (ii) concessionaires of public works and services, and their direct contractors.
Federal public procurement regulations are applicable to the following contracts, without limitation: purchase and sale of real estate and personal property; provision of services; leases; public works construction, repair and maintenance contracts; public-private participation agreements (PPP); consulting services agreements; and concessions for the use of public property and utility services provision.
Petty purchases – ie, those expenses that do not exceed eight modules, which is currently equivalent to ARS12,800 – are excluded from the scope of the public procurement general framework (Article 5, item (b) of Executive Decree No 1023/01 and Article 81, item (k) of Executive Decree No 1344/07).
As a general rule, public procurements must be conducted by means of public tender or call for bids procedures, open to any individual or legal entity capable of undertaking obligations and not subject to any statutory exclusion, as is the case of individuals convicted of certain crimes and those delinquent in payment of taxes and social security contributions (Article 24 et seq of Executive Decree No 1023/01).
If the procurement price does not exceed the ARS8 million threshold, contractor selection may be conducted by a private tender or call for bids procedure. In this case, the invitation to bid is exclusively addressed to suppliers registered with the Suppliers Information System (Sistema de Información de Proveedores, or SIPRO, for its acronym in Spanish); however, bids submitted by non-invitees must also be taken into account (Article 12 of Executive Decree No 1023/01).
Public and private tenders and calls for bids may be either domestic or international. In the case of domestic tenders or calls for bids the invitation to bid is addressed to interested parties and bidders whose domicile or main business offices are located in Argentina or who have branches in Argentina that are duly registered with the relevant agencies. In the case of international tenders or calls for bids, the invitation to bid is extended also to interested parties and bidders from abroad; ie, those whose main business offices are located abroad and have no duly registered branch in Argentina. The domestic or international scope of the tender or call for bids is determined by the convening authority in view of the subject matter of the contract or the complexity of the procurement deliverables (Article 26, item (b) of Executive Decree No 1023/01).
As to public-private participation agreements, Act No 27.328 provides that contractor selection must be made, in all cases, by public tender or a call for bids, either domestic or international depending on the technical complexity of the project, the capacity of local companies to participate in the bid, economic and/or financial reasons related to the characteristics of the project and/or the origin of the funds in the case of projects that have or require financing from abroad.
Notwithstanding the foregoing, it should be noted that pursuant to Act No 18.875, the building of works and the provision of services must be exclusively procured with local companies, except for exceptional cases previously approved by a resolution issued by the relevant ministry providing and evidencing due grounds for conducting an international tender or call for bids. If an international tender is launched, bidding companies from abroad must associate with local companies. The referred-to Act defines as “local” any company that complies with the following requirements: (i) it has been created or authorised to operate pursuant to Argentine laws, (ii) it has its legal domicile established in Argentina, and (iii) it evidences that 80% of its directors, executive officers and professionals have their actual domicile in Argentina (Articles 7 and 8 of Act No 18.875). In the case of engineering and consulting services, in order to be deemed “local”, companies must also (i) evidence that 100% of the capital and votes belong to persons domiciled in Argentina; and (ii) have their management actually established in Argentina, in compliance with the economic reality principle, without any direct or indirect dependency bond with public or private entities from abroad (Article 11 of Executive Decree No 2930/70).
Public procurement, depending of the specific features of each procurement, must abide by the following general principles:
From the commencement of the procurement procedure until performance of the contract is completed, all matters must be construed on the basis of strict compliance with the above-mentioned principles (Article 3 of Decree No 1023/01).
Pursuant to Executive Decree No 1023/01 (Article 32), any invitation to bid in public tenders and calls for bids that is not made in digital format must be made by notice published in the Argentine Official Bulletin for two days, at least 20 days in advance of the bid opening date, calculated as from the day following the last publication. Such terms shall be extended when necessary by virtue of the importance, complexity or other features of the procurement.
In the case of international tenders or calls for bids, notices must be given in the relevant countries abroad, at least 40 calendar days in advance.
Any invitation to bid in private tenders and calls for bids shall be made at least seven days in advance of the date set for bid opening.
All notices, regardless of the bid selection method chosen, must also be publicised on the internet, on the official site www.comprar.gob.ar, from the date of commencement of publication by applicable means until the bid opening date.
In order to satisfy the transparency principle, the web page www.comprar.gob.ar must make available documents such as the bidding terms and conditions drafts pertaining to procurement that the relevant authority submits to public consideration, bid opening minutes, awards and purchase orders.
Notices and invitations to tender and call for bids must contain at least the following data: (i) the name of the procurement authority or entity; (ii) the type, class, subject matter and identification number of the procurement method; (iii) the file identification number; (iv) the cost of the bidding terms and conditions, if any; (v) the place, deadline and time where bidding terms may be obtained, purchased or examined, which may also be downloaded from the web page www.comprar.gob.ar; (vi) the place, date and time for the submission of bids and for the opening of bids; and (vii) the email of the procurement authority or entity (Article 17 of Rule No 62-E/16 of the Federal Procurement Office).
The regulatory framework applicable to public-private participation agreements includes specific provisions as to publicity, similar to the ones described above, but provides for longer periods of publication (three days) and advance from the bid opening date (at least 30 calendar days). In the case of international tenders, notice must be given at least 60 calendar days in advance and the invitation to bid must also be given by publication of notice on the UN Development Business site, or on the World Bank DG Market site, and on the equivalent site of the Inter-American Development Bank for a term of three days (Article 12, item 8, of Executive Decree No 118/17).
Act No 13.064, applicable to public works contracts, also provides for the publication of the notice of the tender in the Argentine Official Bulletin and other means deemed appropriate. Notices must be published for 5, 10 or 15 days, according to the monetary amount of the procurement (Article 10 of Act No 13.064).
Executive Decree No 1023/01 (Article 8) provides that whenever the complexity or the procurement monetary amount involved would justify so, at the procurement authority’s criterion, a period shall be set prior to the publication of the call for bids notice so that interested parties may raise comments regarding the particular bidding terms and conditions.
During such period, the procurement authority may convene meetings in order to receive the respective comments or promote debates among interested parties as to the content of the bidding terms. No debate or exchange of opinions is allowed between procurement officers and interested parties outside the referred-to meetings, to which all interested parties must have access. The technical, economic and legal criteria that may arise from the comments made by interested parties, provided they are deemed relevant, shall be included in the respective bidding terms and conditions draft (Article 12 of Rule No 62-E/16 of the Federal Procurement Office).
As to public-private participation agreements, Act No 27.328 (Article 14) provides that whenever the complexity or monetary amount of the project would justify so, a transparent consultation, debate and opinion exchange procedure may be established between the procurement agency and pre-qualified interested parties who, based on their own experience, technical know-how and best available practices, would allow for the development and definition of the most adequate solution according to the public interest, on which basis the offers shall be made. The implementation of this procedure must guarantee transparency, access, publicity, disclosure, effective competition and simultaneous participation and on equal footing treatment for all pre-qualified interested parties.
Executive Decree No 1023/01 (Articles 24 and 25, item (a)) provides that selection of the contractor must be made, as a general rule, by means of a public tender or call for bids procedure, which is a procedure addressed to an indeterminate number of potential bidders capable of undertaking obligations.
If the procurement monetary amount does not exceed the ARS8 million threshold, contractor selection may be conducted by a private tender or call for bids. In this case, the invitation to bid is exclusively addressed to providers registered with the Suppliers Information System; however, bids submitted by non-invitees must also be taken into account (Article 12 of Executive Decree No 1023/01).
As explained in 1.4 Openness of Regulated Contract Award Procedure, public and private tenders and calls for bids may be domestic or international. The domestic or international scope of the tender or call for bids is determined by the convening authority in view of the subject matter or the complexity of the deliverables to be procured (pursuant to Article 26, item (b), of Executive Decree No 1023/01).
Furthermore, public and private tenders and calls for bids may be single or multi-staged, depending on the number of phases in which bid comparison is broken down. The procedure must be implemented as multi-staged when the specific features of the procurement deliverable – such as the degree of complexity of the subject matter or the duration of the term of the contract – would justify so (Article 26, item (a), of Executive Decree No 1023/01).
If the subject matter of the contract is the purchase or sale of real estate or personal property, the contractor must be selected by public auction (Article 25, item (b), of Executive Decree No 1023/01).
In certain limited cases, Executive Decree No 1023/01 authorises direct awards (see 5.2 Direct Contract Awards).
Act No 13.064, applicable to public works contracts, also provides, as a general rule, that contractors must be selected by a public tender procedure; however, in certain limited and expressly established cases, private tenders and direct awards procedures are allowed (Article 9 of Act No 13.064).
The legal framework applicable to public-private participation agreements provides that the selection of contractors must be made by public tender or a call for bids, either domestic or international, with no exception (pursuant to Article 12 of Act No 27.328).
It should be noted that Executive Decrees Nos 966/2005 and 1030/2016 provide for the possibility of procurement being initiated by the submission of a private initiative, declared of public interest by the relevant authority. In such case, the private initiative proponent has certain preferences, which vary according to the applicable legal framework.
In line with the above paragraph, contractor selection must be made, as a general rule, by means of public tender or a call for bids, and the procurement authority shall only be authorised to resort to other procedures specifically provided under the specific regulations applicable to the case.
As mentioned in 2.1 Prior Advertisement of Regulated Contract Award Procedures, each of the different public procurement regulations imposes the obligation of publicising in advance the call for bids or tender as well as the respective bidding terms and conditions. Such advance shall vary according to the applicable framework and the scope of the respective tender; ie, whether it is domestic or international.
The deadline for the submission of bids is established in each case in the respective administrative act involving the call for bids: the applicable regulations shall provide the minimum advance notice for the publication of the call for bids and the respective bidding terms and conditions so that prospective bidders have sufficient time to prepare their bids (see 2.1 Prior Advertisement of Regulated Contract Award Procedures and 2.5 Timing for Publication of Documents).
Pursuant to Executive Decree No 1023/01, any individual or legal entity capable of undertaking obligations – which has not been expressly excluded, such as individuals convicted of certain crimes (against property, federal public administration or public faith) or those delinquent in payment of tax and social security contributions – can participate in public procurement procedures (Article 24 et seq of Executive Decree No 1023/01).
It should be noted that in domestic tenders and calls for bids, only bidders domiciled or with their principal business seat or branch in Argentina duly registered with the relevant authority are eligible to participate (see 1.4 Openness of Regulated Contract Award Procedure).
In order to be entitled to participate in a public procurement procedure, a bidder must comply with all the requirements established in the respective general and particular bidding terms that establish the minimum background credentials required, taking into account the specific features of the procurement involved. If the bidder fails to comply with such requirements, the bid must be rejected.
Prior registration with the Argentine Supplier Information System is not mandatory to submit a bid; however, the bidder must be pre-registered at the time of assessment of the bids submitted. Failure to comply with such requirement shall result in rejection of the bid (Articles 66 and 112 of Executive Decree No 1030/16). Foreign bidders and awardees are exempted from the duty of registration with SIPRO (Article 25 of Rule No 62-E/16 of the Federal Procurement Office). If the procurement involves the award of a public works contract governed by Act No 13.064, bidders must register with the Federal Registry of Public Works Builders and Consulting Firms (Registro Nacional de Constructores y de Firmas Consultoras de Obras Públicas) (Article 1 of Annex to Rule 16/19 of the Federal Procurement Office).
Regulations in force also provide for ineligibility in specific cases, such as (i) whenever there is consistent and precise indicia that lead to the presumption that bidders have engaged in bid rigging or concerted practices in the selection procedure; (ii) whenever any judicial or administrative sanction has been imposed on the bidder, within three calendar years prior to its presentation, for abuse of a dominant position or dumping, any type of disloyal competition or bid rigging or concerted practices in selection procedures; and (iii) whenever a final and non-appealable judgment issued abroad has convicted the bidder of transnational passive or active bribery in the terms of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Article 68 of Executive Decree No 1030/16).
Likewise, a bid shall be rejected forthwith at any stage of the tender whenever the bidder has given or offered money or any gift in order that (i) officers or public employees with authority as regards the tender or procurement do or refrain from doing any act related to their duties, or so that they use the influence of their position as against any other officer or public employee with the referred-to authority, so that they do or refrain from doing something related to their duties; or (ii) any person exerts their influence over or uses their relationship with an officer or public employee with the referred-to authority, in order that they do or refrain from doing something related to their duties.
Act No 27.328 imposes restrictions to become a bidder specifically applicable to public-private participation agreements; eg, (i) to have acted as adviser retained by the procurement authority in the implementation of the project in which the adviser is trying to participate as prospective bidder; (ii) to be an officer under an employment relationship with the procurement authority, or to be a firm, company or entity to which the officer is related by way of direction, participation or employment; (iii) to have been sanctioned for infringement of environmental laws provided that the administrative sanction is final and would have been imposed within 24 months prior to the public call for bids; (iv) to owe taxes and/or tax contributions to the Argentine Tax Authority as determined by administrative act or final judgment; and (v) those indicted by final judgment and convicted of crimes against federal public administration, public faith or economic and financial order (Article 23 of Act No 27.328). The regulations applicable to public-private participation agreements also provide for grounds for disqualification of bidders based on the commission of acts of corruption, similar to those described in the above paragraphs (Article 24 of Act No 27.328 and Executive Decree No 117/18).
As stated in 2.3 Tender Procedure for Award of Contract, if the procurement monetary amount does not exceed the ARS8 million threshold, the procurement method can be by private tender or a call for bids. In this case, the invitation to bid is exclusively addressed to suppliers registered with SIPRO; however, bids submitted bynon-invitees must also be considered (Article 12 of Executive Decree No 1023/01).
At least five suppliers of the industry registered with SIPRO must be invited to bid by the procurement authority. Whenever invitations cannot be addressed exclusively to registered suppliers, either because of non-existence of suppliers registered as regards the specific area under procurement or otherwise, the procurement authority may extend the call to other non-registered interested parties (Article 41 of Executive Decree No 1030/16).
Act No 13.064, applicable to public works contracts, provides that contractors may be selected by private tender in limited specific cases, in which direct awards are also allowed (Article 9 of Act No 13.064). Such limited specific cases will be analysed in 5.2 Direct Contract Awards.
As to private-public participation agreements, Act No 27.328 does not provide for the private tender procurement method. In this type of agreement, the tender or call for bids must be addressed to the largest indeterminate possible number of bidders (Article 12, item 1, of Executive Decree No 118/17).
Pursuant to Executive Decree No 1023/01, the award must go to the offer considered to be the most convenient for the procurement authority, taking into account the price, quality, competence of the bidder and further conditions of each of the bids. In the case of the purchase of goods or the procurement of standard or common use services in which the technical features may be unequivocally specified or identified, the most convenient bid shall be, in principle, the one offering the lowest price (Article 15 of Executive Decree No 1023/01).
Acts Nos 13.064 (Article 18) and 27.328 (Article 15) also establish that the award must go to the bid that is deemed most convenient for the public interest.
The specific guidelines to determine which is the most convenient bid in each tender shall be established in the respective bidding terms and conditions, and shall vary depending on the subject matter of the contract to award.
At the time of comparing bids, according to the type of contract at stake, the procurement authority must apply the preferences in favour of domestic industry, established by Acts Nos 18.875, 27.328 and 27.437.
The bidding terms and conditions applicable to each tender or call for bids shall specify the criteria to be applied to assess the bids submitted.
Furthermore, the bid assessment report must be notified to all bidders within two days from its issue, accounting for the marks obtained by each bid submitted (Article 72 of Executive Decree No 1030/16 and Article 6.13 of Annex to Rule 22/19 of the Federal Procurement Office).
In multi-stage procurement procedures, the bid pre-selection report – in which the technical proposal is assessed – must be notified to all bidders (Article 65 of Rule 62/16 of the Federal Procurement Office and Article 6.17 of Annex to Rule 22/19 of the Federal Procurement Office).
Bidders and interested parties may challenge the pre-selection report within two days of notification, previously furnishing the applicable guarantee (Article 66 of Rule 62/16 of the Federal Procurement Office and Article 6.17 of the Annex to Rule 22/19 of the Federal Procurement Office).
The award shall be notified to the awardee and the rest of the bidders within three days of the issue thereof (Article 74 of Executive Decree No 1030/16; Article 12, item 35, of Executive Decree No 118/17; and Article 7.2 of Annex to Rule 22/19 of the Federal Procurement Office).
Applicable regulations provide for different means of notice, such as legal notice, certified letter and email (Article 7 of Executive Decree No 1030/16). Currently, bidding terms provide for notice by electronic means.
The regulations in force do not provide for a mandatory standstill period between the notification of the award and the execution of the contract.
All acts issued by the procurement authority during the contractor selection procedure may be challenged by administrative remedies regulated by Act No 19.549 (Federal Law of Administrative Proceedings) and Executive Decree No 1759/72 (consolidated text 2017) (Article 6 of Executive Decree No 1030/16).
Such administrative remedies are heard (i) by the authority that issued the act, if the petitioner files an administrative petition for reversal (Article 84 of Executive Decree No 1759/72); and (ii) by the executive branch, Chief of the Cabinet of Ministers or the relevant Ministry or Secretariat, if the petitioner files a hierarchical appeal.
Once administrative remedies have been exhausted, the appellant may seek judicial remedies (Article 23 et seq of Act No. 19.549).
The regulations in force allow for the challenge of pre-selection and assessment reports issued by Assessment Commissions. The challenge shall be resolved by the procurement authority upon issuing the pre-selection act or the award act, respectively (Articles 73 and 74 of Executive Decree No 1030/16, Article 66 of Rule 62/16 of the Federal Procurement Office and Article 6.16 of the Annex to Rule 22/19 of the Federal Procurement Office).
In the event of an infringement of the applicable regulations, the act issued by the procurement authority may be challenged by the administrative remedies described in the above paragraph.
Challenges raised against acts issued during the selection procedure do not trigger, in principle, a stay in the procurement steps. However, the petitioner may seek the procurement authority to order steps to be stayed on the grounds of (i) the existence of public interest reasons that would justify such stay; (ii) the need to avoid serious damage; or (iii) the allegation, supported by justification, of absolute nullity (Article 5 of Executive Decree No 1030/16).
If the request is dismissed or remains unanswered for a term of five days, the appellant may file a court action seeking a precautionary measure in order to stay the procurement steps until the challenges raised have been resolved (Article 13 of Act No 26.854).
In principle, the acts issued by the procurement authority may be challenged by any interested party affected by the challenged decision.
Additionally, some public authorities, such as the Federal Ombudsman, also have standing to such effect.
Administrative remedies against acts issued by the procurement authorities must be filed within the general time periods provided in Executive Decree No 1759/72 (Article 84 et seq); ie, ten days in the case of an administrative petition for reversal and fifteen days for a hierarchical appeal.
Any challenge to the pre-selection and assessment reports issued by the Assessment Commissions must be brought, respectively, within two and three days following notice of the report (Article 73 of Executive Decree No 1030/16, Article 66 of Rule 62/16 of the Federal Procurement Office and Articles 6.14 and 6.17 of the Annex to Rule 22/19 of the Federal Procurement Office).
Any administrative remedies taken from the acts issued by the procurement authority must be resolved within 30 business days. If the hierarchical appeal is not resolved within the referred-to time period, the petitioner may deem it tacitly denied and thus initiate the respective court action (Article 86 et seq of Executive Decree No 1759/72).
Any challenge to assessment reports must be resolved by the procurement authority upon issuing the award act (Article 74 of Executive Decree No 1030/16 and Article 6.16 of the Annex to Rule 22/19 of the Federal Procurement Office).
Given that administrative petitions are not heard by a centralised agency, there are no statistics as to the number of petitions annually filed.
There are also no official statistics on the number of legal actions seeking to challenge acts issued in the framework of procurement procedures.
In order to challenge pre-selection and assessment reports, a petitioner must furnish, respectively, a guarantee equivalent to (i) the amount set in the respective bidding terms and conditions, and (ii) 3% of the bid price at which the award of the contract was advised (Article 78, items (d) and (e), of Executive Decree No 1030/16).
The filing of administrative remedies for reversal and administrative petitions to the higher authority has no cost for the petitioner.
In the case of filing a court action, the appellant must pay court tax in a sum equivalent to 3% of the value at litigation (Article 2 of Act No 23.898).
Executive Decree No 1023/01 (Article 12, item (b)) provides that the procurement authority is vested with authority to unilaterally increase or reduce by up to 20% of the total amount of the contract, in the conditions and prices agreed upon and with the adjustment of the respective time periods. It also provides for the possibility of early termination of the contract on public interest grounds. In these cases the contractor is entitled to be compensated for the damages suffered, but the compensation to be received does not include loss of profits.
In public work contracts, the procurement authority is vested with similar authority, given that it can unilaterally provide alterations to the project resulting in an increase or reduction of costs or works procured, which shall be mandatory for the contractor to the extent they do not exceed 20%, paying, in the first case, the increase. If a reduction is disposed, the contractor is not entitled to claim damages for loss of benefits (Articles 30 and 53, item (a), of Act No 13.064). Case decisions have allowed the procurement authority to unilaterally rescind this type of contract on the grounds of opportunity, merit or convenience.
Act No 27.328 provides that public-private participation agreements may empower the procurement authority to unilaterally establish variations only in matters related to the execution of the project and to a maximum cap, more or less, of 20% of the total value of the contract, duly compensating the alteration, preserving the original economic-financial equation of the contract, and financing possibilities and conditions (Article 9, item (i) of Act No 27.328). The agreement must regulate the events of termination, which may include rescission on public interest grounds, and the compensations that shall be paid in such events, which may include loss of profits if the bidding terms and/or the respective agreement would stipulate so (Article 9, item (p), of Act No 27.328).
Notwithstanding the quantitative caps provided in the regulations in force, it is understood that the authority to unilaterally amend the agreement must abide by certain qualitative limits, such as (i) amendments must be reasonable and supported on specific public interest grounds that have been alleged and evidenced by the administration, and (ii) amendments may not alter the essence of the contract or the economic or financial aspects of the contract.
Executive Decree No 1023/01 (Article 25, item (d)) authorises direct awards only in the following cases.
Direct awards must be made by (i) abbreviated comparison, whenever there is more than one potential bidder capable of performing the deliverable; and (ii) by simple award, whenever, by legal grounds, factual circumstances, grounds related to the subject matter of the contract or for the co-contractor, the administration can only procure from a specific person or is entitled to choose one co-contractor of a public nature (Article 14 of Executive Decree No 1030/16).
In addition to the above cases, Act No 13.064 (Article 9) provides for the possibility of direct awarding when the deliverables that are indispensable for works in the course of execution would not have been foreseen in the project or cannot be included in the respective contract.
Act No 27.328 does not authorise direct awards in public-private participation agreements.
No especially relevant judgments have been rendered in the last year in relation to the issues here analysed.
There are no bills under consideration promoting significant amendments to public procurement regulations in force.