Aerial view of building under construction in Mexico City, Mexico. Credit: Erich Sacco/Adobe Stock

Orlando Federico Cabrera Colorado
Hogan Lovells, Mexico City

On 16 April 2025, the Mexican Government published a reform (the ‘Reform’) to the Public Works Law and Related Services (the ‘Works Law’) in the Federal Official Gazette (Diario Oficial de la Federación (DOF)). The President stated that the Reform seeks to enhance traceability, streamline procurement procedures and address corruption risks, secure more competitive pricing and strengthen domestic production chains. The Reform modernises public contracting processes and enhances oversight mechanisms for public works projects. Key changes include establishing a new digital contracting platform and imposing additional requirements on contractors and supervising authorities. Notably, the Reform introduces strategic dialogues between government entities and the private sector to improve project information-sharing and bolster more accurate bid submissions. The Reform also mandates market research to promote transparency. However, it preserves the fundamental structure of the existing contracting procedure. This article highlights the Reform’s principal amendments.

New platform

Mexico introduced the new Digital Platform of Public Procurement (the ‘Platform’) to facilitate public procurement procedures for public works and related services, as well as contract execution and management. The Platform offers free public access and serves as the exclusive channel for conducting contracting procedures. However, in limited circumstances, the Anti-Corruption and Good Governance Ministry (the ‘Ministry’) may authorise contracting procedures outside the Platform (Article 74).

The Platform collects information on public contracting, annual programmes, the electronic registry of individuals and legal entities, sanctioned contractors, calls for bidding and their amendments, minutes of clarifications, proposal submissions, contract awards, contract details and amendments, challenges, notices and other relevant data (Article 74 bis).

New features in the contracting procedure

Market research

Prior to the commencement of contracting procedures, agencies and entities shall conduct market research (Articles 24 bis and 1 ter).

Strategic dialogues

Before conducting market research and initiating the contracting procedure, agencies and state entities may hold strategic dialogues with interested parties in the relevant sector. Through these dialogues, agencies and entities will disclose the description and location of the public work or service, enabling interested parties to propose technical and economic considerations for the proposal. Strategic dialogues may last up to five calendar days (Article 26 bis).

Subsequent discount offers

Agencies and entities may request subsequent discount offers in public tenders and invitations to at least three participants to secure the best prices for the state. They must justify the use of this method and verify that sufficient competition exists before proceeding (Article 30).

Direct awards of contracts

If a procedure inviting at least three participants is declared void, the contracting officer in the agency or entity may directly award the contract, provided the requirements in the original invitation remain unchanged. Additionally, agencies and entities may directly award contracts for extraordinary work not covered by the scope of lump-sum contracts (Article 42).

Construction logbook

The construction logbook is mandatory for all public works and related services contracts. It must be prepared, managed and monitored through electronic communication. To facilitate this process, the Ministry will implement dedicated software (Article 52 bis).

The Reform establishes exceptions to the mandatory use of the electronic construction logbook in the following circumstances:

• technological difficulties at the worksite hinder the use of the electronic logbook;

• the works performed arise out of force majeure events;

• the use of the electronic logbook may compromise national security; and

• the agencies and state entities perform works and services on an ad hoc basis.

The Ministry and the audit office may access the logbook information when exercising their inspection, oversight and control powers (Article 52 ter).

The resident engineer

The area manager responsible for the project must appoint a public servant as the resident engineer, considering the candidate’s expertise, skills and capacity to supervise, monitor, control and review the work. The manager must also consider the candidate’s academic qualifications, experience in administering and constructing works and providing services, professional development and familiarity with similar projects.

The site management office (residencia) may consist of one or more public servants appointed by the agency or entity, based on the characteristics, magnitude and complexity of the work or related service. Each resident will assume responsibility according to its speciality and will directly supervise, monitor, control and review the work, including approving contractors’ work estimates.

The supervisor shares joint and several liability with the resident engineer(s) for the scope covered by its contract, including the authorisation of work contract estimates under its supervision (Article 53).

Work estimates

For unit price contracts, parties must prepare work estimates at intervals not exceeding one month. For lump-sum contracts, parties may agree to pay either upon completion of the entire work or upon completion of each main activity, as specified in the schedule of planned progress and payments.

Estimated payments authorised by the site management office do not constitute final acceptance of the work or payment, as they may remain subject to further review. Agencies and state entities retain the right to seek reimbursement for incomplete work, defective execution or overpayments (Article 54).

Original prices

Bidders must use the prevailing supply prices at the time of proposal submission and opening. They may not modify or replace these prices based on any fluctuations occurring between the submission or notification of acceptance and the last day of the month in which the proposal or notification was submitted.

For unit price contracts, agencies and entities may authorise an adjustment factor if they justify the need and the work begins more than 60 days after the proposal submission or notification of acceptance (Article 56).

Additional work

If additional quantities or items of work become necessary during execution, agencies and state entities may authorise payment estimates for the extra work before finalising the corresponding amendment agreements, provided these increases do not exceed the contract’s authorised budget.

Agencies and entities must pay for additional quantities at the original unit prices agreed upon in the contract. For items not included in the contract’s catalogue, parties must reconcile and authorise their unit prices before making any payment (Article 59).

Amendments of more than 50 per cent

If a contract modification increases or reduces the original contract amount or execution period by more than 50 per cent, the contractor may request from the agency or entity concerned an adjustment of indirect costs and financing within 15 calendar days from the date of physical acceptance of the work. During this period, the agency or entity may also request a downward adjustment of indirect costs and financing.

Once the period specified in the previous paragraph has expired, contractors may no longer request adjustments to indirect costs and financing, nor may the agency or entity seek downward adjustments (Article 59 bis).

New contractor after notification of the termination

Once the agency or state entity provides notification of the termination (rescisión), it may award a new contract to the bidder offering the most favourable terms. The agency or entity will focus on continuing and completing the remaining work or service, as specified in the detailed termination report (Article 61).

Conclusion

The Reform demonstrates the government’s ongoing commitment to modernise and enhance transparency in public procurement. By introducing a centralised digital platform, an electronic construction logbook and new procedural rules for contract execution, the Reform signals a decisive move towards digital governance and greater accountability. Both contractors and public entities must now adjust their operations to meet these strengthened requirements, which, if effectively implemented, promise to streamline processes and bolster confidence in Mexico’s public works contracting framework. From a practical perspective, the Reform will have significant operational implications for both contractors and public entities. Nonetheless, the Regulations to the Works Law have not been updated yet. The new Regulations must clarify aspects of the Platform, clarify the electronic construction logbook and specify how the revised procedures may impact the day-to-day procurement process, contract administration, compliance requirements or internal workflows.

Orlando Federico Cabrera Colorado is a senior associate at Hogan Lovells in Mexico City. He can be contacted at orlando.cabrera@hoganlovells.com.