New Amendments to the Argentine Public Procurement Framework

On December 5, 2022, the Argentine Executive Branch published in the Official Gazette the Decree No. 811/2022. This Decree included some amendments to the Regulation of the Public Procurement Framework approved by Decree No. 1030/2016 regarding causes for penalties, sanctions, and dismissal of bids.

The amendments introduced by the Decree have entered into force as of December 6, 2022 and apply to all selection processes authorized as of that date.

1. Causes for dismissal of bids due to non-rectifiable mistakes

The amendments respond to the need of introducing some cases not contemplated in the previous text, and of eliminating those that are no longer in use due to the incorporation of new technologies.

The Decree 811 eliminated the cause provided in subsection a) section 66 of the Procurement Regulation, which established that the offer would be rejected if it was made by individuals or legal entities not included in the Supplier’s Information System. Given that the selection procedures are currently processed by COMP.AR’s website and pre-registration is necessary to submit the bid, it is not possible for non-registered suppliers to submit offers.

Further, the Decree 811 eliminated subsection g) section 66, which stated that the offer would be rejected if it was written in pencil or in a way that allowed erasure and rewriting without leaving traces. At present, all offers are submitted electronically, so this is no longer possible.

Finally, the Decree 811 incorporated two new causes for dismissing bids: (i) when the offer contains false or adulterated documentation or information (subsection a), and (ii) for engaging in the illegal behaviors described in section 10 of the Decree No. 1023/2001, which approves the Federal Procurement Regime (subsection k).

On the other hand, the Decree 811 amended subsection b) of section 66, which states that the offer will be dismissed if it is submitted by individuals or legal entities not authorized to entered into contracts, by exempting the application from the offer rejection if the offeror has breached its tax and social security obligations.

2. Rectifiable causes for dismissal

In section 67 of the Procurement Regulation, the Decree 811 expressly includes the consequence of not correcting errors or omissions in bids within the term set for it. The amendment states that once the term expires, if the errors or omissions were not corrected, the offer will be rejected.

3. Penalties

The Decree 811 introduced amendments to section 102 of the Procurement Regulation, which regulates the types of penalties.

There, it expressly incorporated subcontracting without previous authorization from the contracting entity as a ground for losing the contract-compliance guarantee and terminating the contract due to contractual breach.

Likewise, it clarified how to proceed when the penalty of guarantee loss should apply and the offeror, the awardee, or the contractor are exempted from presenting a guarantee. In this sense, the Decree 811 states that the penalty will also apply, and the offeror will have to respond for the guarantee not posted according to the order of affectation set forth in the Procurement Regulation.

4. Sanctions

The Decree 811 eliminated the case of dismissal of bids as a cause for applying a warning sanction. According to the recitals of the decree, said amendment responds  to the fact that the warning does not suspend the private party’s entering into a contract with the Administration.

Likewise, the Decree 811 reformulated some grounds for suspension to enter into contracts due to the new causes for dismissal of bids included in the amendments to section 66 of the Procurement Regulation.

In cases of suspension to enter into contracts for a period of up to one year, established in subsection b.1) section 106, the Decree 811 adds  cases where a greater sanction can be applied if: (i) the awarded bidder has had the contract revoked due to the bidder’s own fault (subsection 1.1 ) and (ii) if the reason a contract was partially or fully terminated was the contractor’s fault (subsection 1.3),.

In the cases of suspension to enter into contracts for a period between one and two years, as established in subsection b.2) of section 106, if the bidder submits false or adulterated documentation or information, the Decree 811 eliminated the corresponding clarification included in the previous text. This clarification stated that if a criminal case is pending to determine the falsehood or adulteration of the documentation, the statutes of limitations for the application of sanctions will not apply until said case ends.

Likewise, if the offeror had the offer rejected for being ineligible under the terms of section 16 of the Decree 1023/2001, the Decree 811 excluded the application of the suspension if the offeror was ineligible for not having complied in previous contracts.

Lastly, sanction to the offeror whose offer was rejected for being made by individuals or legal entities not authorized to enter into a contract, pursuant to the provisions of section 28 of the Decree No. 1023/2001, was eliminated.