How to combat sanctions in Public Procurement procedures if you are a supplier

The relationship between the Public Administration and individuals in Public Procurement procedures

The relationship between the Public Administration and individuals in government contracting procedures is fundamental to the country's development. La Public Sector Acquisitions, Leases and Services Act (LAASSP) establishes a regulatory framework to ensure that these interactions are carried out under principles of transparency, efficiency and legality.

However, supplier companies and contractors must comply with strict legal and contractual obligations. If they don't, they may face administrative sanctions which seek to preserve the integrity of public spending and trust in government institutions.

Obligations of Individuals in Public Procurement Procedures

Since their participation in the procedure, individuals acquire a series of commitments derived from the LAASSP and the concluded contract. These obligations include:

• Provide truthful information: All data and documents submitted during the process must be authentic.
• Comply with the object of the contract: The delivery of goods or services must be carried out as agreed, respecting deadlines, quality and specifications.
• Respect the competition rules: Refrain from collusive or fraudulent practices in public tenders.
• Collaborate in audits and controls: Facilitate oversight by the authorities at any stage of the contract.

Causes for which a private individual is punished in these proceedings

Individuals can be sanctioned for a variety of reasons, such as:

• Providing false or incomplete information: Declare inaccurate data or submit apocryphal documentation.
• Breach of the terms of the contract: Deliver goods or services of lower quality than required or out of time.
• Engaging in unfair practices: Collusion with other suppliers or public servants to alter the results of a tender.
• Bribing public servants: Provide undue incentives to gain advantages in hiring procedures
• Obstructing audits: Refusing to provide the information necessary to monitor compliance with the contract.

Procedure for the Imposition of a Sanction

In the event of the commission of any of the above-mentioned violations, a sanctioning procedure must be initiated that may result in the imposition of one of the sanctions that will be discussed later; however, for now we explain the steps of the procedure, which are:

1. Start: Through a complaint, audit or contractual review.
2. Research: The Internal Control Body collects evidence and notifies the individual about the procedure.
3. Audience: Individuals have the right to present evidence and arguments in their defense.
4. Resolution: The administrative authority determines the sanction, which may include:
   • Economic fines.
   • Disqualification from participating in future public contracts.
   • Publication of the sanction in the Official Gazette of the Federation (DOF) and in the CompraNet Directory of Sanctioned Suppliers and Contractors.

Conciliation Procedure

Before the imposition of sanctions and in general any conflict, the LAASSP contemplates a Conciliation procedure, through which the parties can resolve disputes arising from the execution of the contract.

Means of Defense against Administrative Sanctions

Individuals have the right to challenge sanctions through:

• Administrative Resource: Presented to the same authority that issued the sanction.
• Judgment of Nullity: Processed before the Administrative Court of Justice, either Local or Federal, to invalidate the decision.
• Indirect Protection: It is appropriate if constitutional rights are considered violated during the administrative procedure.

Conclusion

The regulation of public contracts seeks to ensure an efficient use of State resources. However, individuals must be cautious and comply with their obligations to avoid sanctions. If you are faced with a sanctioning procedure, it is crucial to have specialized legal advice to guarantee an adequate defense and the protection of your rights, all the more so when many of these sanctions lack reason and foundation.

Are you facing an administrative sanction?

In Rodriguez, Manzano and Garcia we are specialists in administrative litigation, we are responsible for designing solid and effective legal strategies to resolve any conflict arising from government contracts, do not hesitate to contact us.