Competition

Review of procurement rules and practices of PEMEX in Mexico

 

Date of publication
11 January 2017

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OFFICIAL LAUNCH

This report was launched in Mexico City on 11 January 2017 in the presence of OECD Secretary-General Angel Gurría.

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11 January 2017 - PEMEX, one of the largest oil companies in the world with 150 000 employees and an annual budget in 2015 of about MXN 570 billion, is also the largest purchaser of goods and services in the Mexican public sector. In 2013, a reform opened the energy sector to competition while keeping the ownership of Mexico’s hydrocarbons under state control. Following this reform, PEMEX is subject to new procurement rules that aim to make procurement processes more efficient and effective.

The OECD analysed the new regime and procurement procedures of PEMEX. The resulting report presents the main findings and provides recommendations to promote competition and fight bid rigging in accordance with international best practices. 

Read more about the Mexico-OECD partnership for fighting bid rigging in government contracts

 

Key findings and recommendations

The OECD recognised that the new internal procurement regime included important improvements in relation to the general public procurement regime previously in place. For example, the pre-tender market analysis, which is the main source of information to take decisions about procurement strategies, now takes into consideration a wider set of sources.

Also, PEMEX uses a new methodology to identify procurement strategies that get the best deal in terms of value for money on the basis of an analysis of historical spending, the needs of the company and the results of market analysis. It also created new electronic tools to get to know better its suppliers. 

On top of these positive developments, the OECD report identifies areas for improvement and discusses how PEMEX can continue developing its internal regime to render its procedures more competitive and immune to collusion. 

Some of the most salient findings of the report are that PEMEX does not have a specialised department to conduct market analysis, it often uses exceptions to open public tenders and there is no mechanism in place to detect red flags for bid rigging.

Amongst the 27 recommendations made by the OECD to PEMEX, the main ones include:

 
  • Stay informed about the market through the setting up of a specialised department dedicated to market analysis for all procurement procedures, in order to collect more comprehensive and reliable procurement information.

  • Maximise the potential participation of genuinely competing bidders by limiting the use of exceptions to open tender procedures, by abolishing restriction to participation of foreign bidders, by boosting participation of SMEs and by adopting e-procurement as default bidding system.

  • Reduce communication among bidders by avoiding disclosing sensitive bidding information to third parties, by limiting opportunities for bidders to meet before and during the tender process and by adopting a standard certificate of independent bid determination.

  • Carefully choose criteria for evaluating and awarding the tender by refraining from publishing reference prices and avoiding splitting contracts.

  • Raise awareness among its public procurement officials though regular trainings and closer co-operation with Mexico’s competition authority, the Comisión Federal de Competencia Económica.

The implementation of the OECD recommendations, together with the awareness among procurement officials on the nature, risks and costs of collusion should enable PEMEX to increase the effectiveness of its procurement strategy and generate important savings. 

OECD Guidelines for Fighting Bid Rigging in Public Procurement

‌The OECD Guidelines for Fighting Bid Rigging in Public Procurement were designed to reduce the risks of bid rigging through careful design of the procurement process and to detect bid rigging conspiracies.

Countries like Mexico and Colombia have already partnered with the OECD to improve procurement practices and step up their fight against bid rigging.

Mexico: More about the Mexico-OECD partnership and related reports

Colombia: 2014 report on Fighting Bid Rigging in Public Procurement in Colombia

Guidelines: Download the text of the guidelines (Available in 26 different languages)

Recommendation of the OECD Council on Fighting Bid Rigging in Public Procurement

More OECD work on Competition

 

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