Amendment to the Public Works and Related Services Law

Below is an executive summary of the most relevant aspects of the Amendment: 1. Digital Platform for Public Procurement • The creation of a Digital Platform for Public Procurement (the “Platform”) is established, which will replace CompraNet as the sole authorized means for carrying out procurement procedures, formalizing contracts, documentary tracking, and transparency. 2. New restrictions on participation in public procurement procedures • The Amendment establishes new grounds for disqualification from participating in public procurement procedures, among which the following stand out: - Companies that have partners or associates disqualified from contracting by the Ministry of Anti-Corruption and Good Governance (the “Ministry”) or the Federal Court of Administrative Justice. This restriction applies to both individuals and legal entities that have been disqualified by a final resolution issued by a competent authority. - Contractors whose contracts have been administratively terminated on three occasions by any convening agency or entity for reasons attributable to them. This criterion represents an expansion of the prior regime, under which a single termination triggered the disqualification. - Companies sanctioned by the economic competition authority for having engaged in absolute monopolistic practices. Such disqualification will remain in effect for two years, counted from the notification of the sanctioning resolution. - Companies that are not current in the fulfillment of their tax obligations, which will be a direct cause for exclusion from public procurement procedures. 3. New pre-contracting instruments • Strategic dialogues: this mechanism is introduced as a stage prior to the commencement of the procurement procedure, allowing agencies and entities to make known to interested parties in the sector the description of the public work or related service and its characteristics. • Mandatory market research: prior to procurement procedures, agencies and entities will be required to conduct market research. 4. Changes to the procurement procedure • The use of subsequent discount offers is established. It is permitted to submit electronically, over a determined period of time, one or more subsequent offerings that improve upon the price initially offered, without this implying the possibility of modifying the specifications or characteristics originally contained in the technical proposal. • A new adjustment factor is included, so that contracts under the unit-price scheme may be updated when the commencement of the works occurs more than 60 days after the date the quotation was accepted. • The minimum time periods for the submission of proposals and the issuance of awards are modified. Among the most relevant changes, the following stand out: - The period to disseminate and receive comments on draft invitations to bid in public tenders is reduced from 10 to 5 business days. - The minimum period for the submission and opening of proposals in national tenders is reduced from 15 to 10 calendar days. - The period for the issuance of the award is reduced from 30 to 20 calendar days. • In the event that the interested party does not sign the contract within the period established in the procurement procedure, the contract must be awarded to the participant who obtained second place, provided that the price difference with respect to the proposal initially awarded is no greater than 10%. 5. Rules on direct award and subcontracting • The limit on the sum of the amounts of contracts granted through direct award is reduced from 30% to 20% of the authorized budget for carrying out public works and related services within a fiscal year. • Subcontracting is limited to a maximum of 49% of the total contract amount, and subcontracting to other participating bidders that took part in the same procedure is prohibited. 6. Execution and control of works • The use of an electronic logbook will be mandatory for each works or services contract. Its preparation, control, and monitoring will be carried out through the software program to be implemented by the Ministry. 7. Changes to the conditions for amending works contracts • The restriction that limited contractual modifications to a maximum of 25% of the amount or term originally agreed upon is modified. This provision applies to contracts entered into under the unit-price scheme and, where applicable, to mixed contracts in the corresponding part. Under the new scheme, modifications may be carried out provided there are well-founded and explicit reasons. • When the modification entails an increase or reduction greater than 50% of the amount or the original term of the contract (or both), the contractor may request adjustments for indirect and financing costs from the corresponding entity or agency. • Special regime for lump-sum contracts or the corresponding part of mixed contracts. As a general rule, these contracts cannot be modified in amount or term, nor are they subject to cost adjustments. However, the Amendment provides for three exceptions: - External economic changes occurring after the award, such as fluctuations in exchange rates or international prices. - Delays in the commencement of the works for reasons not attributable to the contractor exceeding 120 days, which enables adjustments in accordance with official indices. - Recognition of extraordinary works not originally contemplated, provided that the respective agreements are entered into. 8. Transitory provisions • Contracts entered into before April 17, 2025 will continue to be governed, until their termination, by the provisions of the LOPSRM in force at the time of their execution. • The necessary amendments to the Regulations of the LOPSRM must be made within a period of no more than 90 business days, counted from April 17, 2025. • Procurement procedures and contract signings that are in process as of April 17, 2025 will continue to be processed until their conclusion in accordance with the provisions in force at the time of their commencement. At Von Wobeser y Sierra we are at your disposal to assist you in analyzing the impact and implications arising from the provisions established in the Amendment. Should you require additional information, please do not hesitate to contact our partners with expertise in this matter: For additional information, contact: Edmond Grieger, Partner: +52 (55) 5258-1007 | egrieger@vwys.com.mx Ariel Garfio, Partner: +52 (55) 5258-1008 | agarfio@vwys.com.mx