A new implementing decree on the Public Procurement Regime of the Government of the City of Buenos Aires was approved

On May 23, 2019, Decree No. 168 issued by the Executive Branch of the City of Buenos Aires entered into force, introducing a series of modifications to the Government of the City of Buenos Aires’ procurement regime of the Government of the City of Buenos Aires. This regulation enhances the application of technologies to public procurement, to continue speeding up the contractors’ selection process and make public procurement more efficient.

Below we describe the new regulation and the main innovations.

I. New procurement regulations of the Government of the City of Buenos Aires

Decree No. 168/2019 approved the new implementing regulation of Law No. 2095 on the City of Buenos Aires procurement regime. This new regulation (the "Implementing Regulation") derogates Decrees No. 326/17 and No. 287/2018.

The Implementing Regulation is applicable to the contractors’ selection process for those procurement proceedings authorized or called as of May 23, 2019. Those procurement proceedings initiated before the issuance of Decree No. 168/2019 are governed by the regulations in force at that time.

II. Main amendments

1. Inclusion of a Compulsory Purchase Framework Agreement

The Implementing Regulation incorporates a new procurement modality: Compulsory Purchase Framework Agreement.

Under the Compulsory Purchase Framework Agreement suppliers are selected to procure the direct supply of goods and services to the Administration, and the suppliers awarded are entitled to have their products make up the catalogue of goods during the term of validity of the agreement so that any agency within the City of Buenos Aires Government may acquire them.

Through the Compulsory Purchase Framework Agreement, once the awardees’ products become part of the catalogue, when acquiring any of those goods the government agency must make a request for quotation from all those who have been awarded with a framework agreement. This provision aims to achieve consistency between the offered price of the goods and their market price at the time of acquisition, in an inflationary context.

2. New guidelines for the lease or acquisition of real estate

The Implementing Regulation amends the proceedings for leases of property owned by private third parties. Although it retains most of the proceedings established by the former implementing regulation, it appoints the Directorate General for Relocation and Comprehensive Management of Government Buildings as the competent authority ─although certain tasks remain in charge of the Directorate General for Administration of Assets and Concessions─ and includes guidelines for the amendment of the lease contracts.

3. Sale of real estate owned by the City of Buenos Aires’ Government

The new Implementing Regulation regulates a series of aspects on sales of privately-owned real estate property of the Government of the City of Buenos Aires, which were not previously regulated.

Firstly, it provides that the General Directorate for the Administration of Real Estate and Concessions must have intervention, which is in charge of the execution of the disposal and/or sale proceeding, regardless of the administrative acts that must be issued for authorizing the proceeding and approving the bidding terms and conditions.

With respect to the approval of the sale, the new Implementing Regulation provides that when the sale has a law of prior authorization, the operation will be executed with the administrative act of award or with the subscription of the purchase agreement.

Moreover, with respect to the exercise of the call option, it provides that if the tenants, possessors or owners accept the purchase priority, they must prove the availability of funds to purchase  the property in the same deed in which they declare their acceptance, according to the applicable payment method.

4. Technical failures of “Buenos Aires Compra” system and bid openings

Given the total digitalization of the procurements proceedings of the City of Buenos Aires’ Government, the new Implementing Regulation includes a provision in the event of a general interruption ─duly checked and verified─ of the computer-based system Buenos Aires Compra (the “BAC” after its Spanish acronym), if said interruption impairs the date and time set for the opening of bids. Under such circumstances, the Implementing Regulation foresees that the bid opening ceremony will take place on the following working day, at the same time.

5. Adjustment of prices in the open purchase order

The Implementing Regulation incorporates the possibility for awarded suppliers in open purchase order procedures to request price adjustment of the goods or services offered, and it regulates the proceeding for making such a request, as well as the conditions under which price adjustment are applicable.

6. Consultations and circulars

While the derogated regulation provided for the procurement agency to issue circulars clarifying or modifying the bidding terms and conditions ─ex officio or in response to queries─ the new Implementing Regulation includes that said amendments may not refer to substantial matters. If substantial matters are amended, they will be interpreted as a new approval of bidding terms, which must be published in accordance with the corresponding means and deadlines set in the applicable regulations.

7. Guaranties

For the Open Purchase Order and Framework Agreement modalities, guidelines are included for calculating the amount of the bid maintenance guarantee as well as for the release of the contract compliance guarantee; and it is foreseen ─for the open Purchase Order─ that once the agreement has been awarded, the bid maintenance guarantee may continue as a contract compliance guarantee.

III. Closing Comments

The issuance of the Implementing Regulation demonstrates the Government of the City of Buenos Aires’ acknowledgement of issues arising from the practice of public procurement. Thus, most of the amendments included in the Implementing Regulations tend not only to speed up the contractors’ selection proceedings and give greater transparency to the sale proceedings of State assets, but also to ease problem-solving regarding conflicts that may take place in electronic public procurement proceedings.