Mexican Military Increases Bidless Contracts by 64 Percent

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Throughout the last year under the administration of Mexican President Andrés Manuel López Obrador (AMLO), Mexico’s Secretariat of Defense (Sedena) has increased its spending on bidless contracts by 64 percent, with many of the awarded contracts going to recently created companies or enterprises billed at a residential address.

In 2020, Sedena directly distributed some 6.3 billion pesos for work without tender, more than 64 percent higher than it did in 2019, revealed data from the Mexican Institute of Competitiveness’ (IMCO) Corruption Risk Index.

The military’s budget likewise saw a massive surge over the year’s course, spending 17.4 billion pesos in 2020 compared to 10.78 billion pesos the year previous.

While many bids have been put out for lucrative government contracts, such as the quotes from more than 23 suppliers for the purchase of 2,200 pickup trucks at the end of 2019, Sedena has still chosen to harness direct awards given to them by section VIII of Article 41 of the Law on Acquisitions, Leases and Services of the Public Sector, choosing to offer the aforementioned contract to one of its top five providers, Angar Azcapotzalco, for 1.2 billion pesos instead.

Another preferred Sedena provider, Soluciones Integrales en Gestión de Riesgo de Desastres, likewise received a contract for 1.16 billion pesos to acquire mechanical fans amid the covid-19 pandemic, with the enterprise documented to be owned by former government official and Institutional Revolutionary Party (PRI) Senator José María Tapia Franco.

While the military has shown its prioritization to certain providers throughout its contracts, Sedena has likewise come under criticism for regularly hiring newly minted businesses without proven experience to fulfill its contracts.

“The greatest risk for Sedena is the continual hiring of recently created companies, since in 2020 it awarded contracts for 199 million pesos to companies that had been in existence less than a year,” said the IMCO.

Less than three weeks after it was legally founded, Mexican company Distribuidora Yovic was awarded 10 contracts totaling 1.9 billion pesos by the Sedena, despite the business being registered to a private residential address instead of a place of business.

Similarly, company Losequi received a direct contract for 10.4 million pesos from the government within three months of opening and subsequently received 26 million pesos in direct contracts throughout the rest of 2020, while Bohol Comercio Internacional was awarded 61 million pesos to purchase vital signs monitors and disposable coveralls within its first year on the market.


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