The provision of goods and services to public authorities is a lucrative but competitive activity. In Mexico, knowledge of the intricacies of applicable legislation may give bidders a competitive advantage that helps them to prepare a winning bid. Labour aspects are often overlooked during the bidding process, but they play a key role in government procurement processes and may even decide the outcome. Several Mexican laws and regulations indicate labour-related criteria for the award of particular types of contract.
The Law on Public Sector Acquisition, Leases and Performance of Services and its regulations provide that, all other factors being equal, the government may give precedence to a bidder that employs a higher proportion of Mexican nationals. These provisions are in line with the Federal Labour Law, which imposes a general requirement on all companies in Mexico to have a minimum of 90% Mexican nationals among their workforces, with exceptions for technicians, management personnel and certain other skilled employees.
The public sector acquisition legislation provides that government institutions must organise tenders according to so-called 'points and percentages' criteria, whereby the elements of each bid can be assigned a point or percentage value. These weighted elements may include job creation alongside factors such as price, quality, financing methods, energy efficiency, responsible use of water supplies, optimisation and sustainable use of resources and environmental protection. Similarly, the Public Works and Related Services Law and its regulations establish that government entities must prefer bidders that employ a higher proportion of Mexican nationals and disabled employees; additional points or percentages will be awarded accordingly.
On September 9 2010 the Ministry of Public Administration issued guidelines for public acquisitions, leases and services, public works and related services. They describe the distribution of points and percentages in tender processes. Bidders must provide properly documented information on the personnel used in projects over the preceding 10 years. In the assessment of a bid proposal, points or percentages will be awarded to reflect the professionals and technicians in the organisational structure; the inclusion of employment contracts that clearly describe the technical and professional qualifications of the employees involved will make a proposal more robust. Bidders are also required to demonstrate their experience in prior work or projects with similar characteristics and to demonstrate the skills and competencies of their personnel. For example, points will be awarded for proficiency in the use of certain tools and machinery, and a well-prepared bidder will be able to submit certification of its employees' training and skills programmes.
Certain tender structures will require compliance with additional labour-related requirements. For example, when the tender calls for one entity to hire the necessary personnel and another entity to provide the machinery, equipment or technology, both entities will require an inter-company service agreement. Many government entities require that service providers have a collective bargaining agreement in place with the union that represents the workforce of the government entity. In other cases, the application of the government entity's collective bargaining agreement to the service provider may be a requirement of the bid. Compliance with such requirements must be considered and evaluated as part of the bidder's preparations.
A properly drafted bid for a government procurement project cannot overlook employment and labour matters. The composition, skills and other elements of a company's workforce are a strategic part of its proposal and should be carefully considered when participating in a tender process. Documenting particular characteristics of the workforce (eg, nationality, disability and experience) will help to achieve the highest point or percentage score. Particular labour law requirements, such as the existence of service agreements, may arise in particular tender processes. In a competitive environment, attention to such details can make the difference between winning and losing a contract.
For further information on this topic please contact Alfredo Kupfer-Dominguez at Sanchez-DeVanny Eseverri SC's Mexico City office by telephone (+52 55 5029 8500), fax (+52 55 5029 8501) or email (akupfer@sanchezdevanny.com). Alternatively, contact David Puente-Tostado at Sanchez-DeVanny Eseverri SC's Monterrey office by telephone (+52 81 8153 3900), fax (+52 81 8153 3901) or email (dpt@sanchezdevanny.com).
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