Describes how major projects are secured and financed. Explains activities of the multilateral development banks in and other aid-funded projects.
Selling to the Government
Procurement regulations apply to all federal public agencies (including autonomous or decentralized institutions) but exclude federal banks. Government purchases of less than AR$1,300,000 can be done via direct purchase. Purchases between AR$1,300,000 and AR$6,000,000 generally require competition, and purchases over that amount generally require an open public tender. More information and open tenders can be found on the website of the National Contracting Office (Oficina Nacional de Contrataciones, ONC); https://comprar.gob.ar/. Terms of public tenders must also be published in the Official Bulletin and the publications of supplier associations.
Most provincial governments have their own websites with procurement information. A prominent NGO looking out for the interests of companies participating in national, provincial, and municipal procurements is the Unión Argentina de Proveedores del Estado (UAPE). UAPE (https://www.uape.org.ar/ ) has a database of government procurements.
Procurement from Local Companies (“Buy Local” Regime)
In September 2018, Executive Order 800/2018 and the Secretary of Industry’s Resolution 91/2018 regulated Law 27437 implementing a new buy local program, “Buy Argentine.” This regime grants preference to domestic goods, provides for greater participation of local SMEs in infrastructure projects, and favors productive investment.
The program’s highlights are:
- Infrastructure projects should include local SMEs in up to 20 percent of the tender value or compensate with local investment, research and development, or transfer of technology.
- Priority for micro- and small-sized enterprises on small purchases of up to AR$1.3 million for goods or up to AR$100 million in public housing and building projects.
- First refusal mechanism for SMEs: In small public tender purchases of less than AR$20 million, this mechanism allows for SMEs to improve their offer if they have not exceeded the best quote by more than 20 percent.
- National Program to Develop Suppliers - (PRODEPRO): The program aims to develop local suppliers in strategic sectors and to connect them with a global value chain to improve their competitiveness and incorporate new technologies.
Preferences by Sector
Goods: Preference is given to domestic goods. The origin of the goods is determined by the nature/composition of the goods themselves and not based on the nationality or ownership of the manufacturing company. Goods containing imported parts shall be considered domestically produced when the value of the imported parts is no more than 40 percent of the sales value of the finished good, or when the imported product undergoes substantial in-country transformation or processing such that the MERCOSUR tariff classification code of the transformed item differs from that of the imported part.
Services: Preference will be given to bids submitted by a domestic company or consultant.
Public Works: Preference will be given to domestic materials and to domestic services. (i.e., project design, management, and construction services) as defined above.
Preferential margins for domestic goods increased from 7 to 15 percent in the case of micro and small and medium-sized firms, and from 5 to 8 percent for large companies.
When a bidder offers to supply foreign goods not available in country, he or she must guarantee “nationalization” of the goods by depositing a bond on behalf of the contracting party. In addition, the Secretariat of Industry will issue a certificate verifying the value of the goods to be purchased abroad at the request of the contracting party within 96 hours of receiving said request. To obtain the Certificate of Verification (certificado de verificación, CDV), the contracting party must submit a sworn statement declaring (1) that it has complied with the “Compre Argentino” regime, (2) the end price or value of the foreign goods, and (3) that said price or value is lower than that of domestic goods offered or that no domestic goods were offered.
The National Office of Buy Argentine and Supplier Development (Dirección Nacional de Compre Argentino y Programa de Desarrollo de Proveedores), under the Ministry of Productive Development, is the authority in charge of overseeing the regime and applying relevant sanctions. Note: Argentina is not a signatory to the WTO Agreement on Government Procurement but is an observer of the WTO Committee on Government Procurement.
U.S. Government Advocacy Center
U.S. companies bidding on government tenders may also qualify for U.S. Government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international government agencies. Advocacy assistance can take many forms but often involves the U.S. Embassy or other U.S. Government agency officials leveling the playing field by advocating for potential U.S. suppliers to foreign government officials. For additional information contact U.S. Commercial Service Buenos Aires at Office.Buenosaires@trade.gov
Multilateral Development Banks and Financing Government Sales
Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from multilateral development banks (MDB). A helpful guide for working with MDBs is the Guide to Doing Business with the Multilateral Development Banks (PDF); https://comprar.gob.ar/. The U.S. Department of Commerce’s International Trade Administration (ITA) has a Foreign Commercial Service Officer stationed at each of the five different MDBs. Learn more by contacting the Commercial Liaison to the Inter-American Development Bank or the World Bank.