Mexico: Government corruption leads to overpricing of up to 30% in public purchases, regulator claims

Mexico’s Federal Commission of Economic Competition (COFECE) has stated that federal government entities show signs of corruption among officials and suppliers, causing overpricing of up to 30% in public purchases. This is in addition to simulations of competition intended to benefit private companies, said COFECE president Alejandra Palacios.

Palacios pointed out that in 2017 the amount of resources involved in government procurement totalled $585 billion pesos (US$30 billion approximately)”.

[…] that would have been maximized with greater competition and translated into services and infrastructure of better quality.” She pointed out, however, that methods of circumventing state tender processes have been detected, using ambiguous or subjective justifications, while participation is restricted by means of unnecessary requirements.

COFECE’s president then presented a competition agenda for the full exercise of public procurement, which proposes, among other things: the issuance of a presidential decree that requires the participation of COFECE in relevant tenders, as well as recommendations for creating a virtual market and to force, through a decree, all entities within the Federal Public Administration to make small purchases through this system; to allow the participation of other bidders interested in the restricted procedures; and restrict the simultaneous participation of companies from the same Interest Group.

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