Rivada Consortium Seeks to Reverse SCT Decision on the Shared Network Competition

MEXICO CITY--()--

  • The Rivada Consortium fulfilled the requirements set out in the Competition Rules, including having delivered the Bid Security.
  • The time at which the Rivada Consortium delivered the Bid Security to the SCT does not constitute a substantive deficiency of its Proposal.
  • The SCT did not demand the delivery of the Rivada Consortium’s Bid Security, as established by the applicable regulatory framework.
  • The Rivada Consortium has taken the decision to exercise its right to a fair defense and to submit the case to the consideration of the Federal Courts of the country.

On Friday, November 4th, the SCT announced the disqualification of the Rivada Consortium from the procurement procedure for the Shared Network project. Rivada Consortium has challenged said decision and has sought a protective order (amparo) from the Judiciary of the Federation, for the following reasons:

1. The Bid Security presented by the Rivada Consortium fully complies with the requirements set out in the Shared Network’s Competition Rules. The Bid Security was presented days before the public meeting to communicate the results of the evaluation of the Technical Offers. The time of the presentation of the Bid Security is a non-substantive requirement and its does not affect the technical soundness of the Proposal presented by the Consortium.

The Federal Government, by issuing in 2015 the General Provisions on Securities, has recognized and expressly regulated that the deficiencies of securities can be remedied and that the federal agencies are obliged to personally contact individuals for that purpose. These General Provisions on Securities are applicable to this competition by express provision of the Competition Rules. Therefore, the SCT was obliged to request the correction or presentation of a new Bid Security from the Rivada Consortium. This legal obligation was not fulfilled by the SCT.

2. The Law on Public-Private Partnerships favors the validity and soundness of proposals over the non-substantive formalities. In reviewing the proposal of the Rivada Consortium, the SCT was obliged to analyze the soundness of the presented proposals and to dismiss the non-substantive requirements and formalities that do not affect their soundness. In disregarding the proposal of the Rivada Consortium, the SCT acted in contravention of the spirit and the express provisions of the Law on Public-Private Partnerships.

The Shared Network is one of the Federal Government’s most ambitious and significant projects and has the potential to benefit millions of Mexicans, thus, the SCT should have chosen to evaluate the proposals with the goal of achieving the largest population coverage of the Shared Network, for the benefit of Mexicans.

The Rivada Consortium is confident that its arguments will be analyzed with autonomy and responsibility by the Federal Courts of the country.

Mexico is a great country and an attractive destination for the investment. The Rivada Consortium will persevere in its efforts to preserve the legal principles and the enormous benefits that underpin the Shared Network.

Appendix

The Competition Rules of the Shared Network set out, at section 4.3.1, third paragraph, the following:

4.9.1 Bid Security. […]

The Bid Security must be provided in the form of an irrevocable bond or letter of credit denominated in pesos, National Currency, considering the provision in the “General Provisions which apply to guarantees provided in favor of the Federal Government in fulfillment of the obligations other than tax obligations that agencies and entities establish in the acts and contracts that they observe”, published in the DOF on 8 September 2015.

[…]

In that respect, the Eighth provision of said General Provisions establishes the following:

Eighth. Should the security not comply with that which is set out in the immediately preceding provision, the Agency shall reject it through the “Office for the Qualification and Rejection of the Security”, which must personally notify this to the duty holder, by way of the “Act of Personal Notification” and, if applicable, “Subpoena”, in the event that the interested party is not found, shall proceed by way of the “Act of Notification performed by a Third Party”.

In the above-mentioned the office must set out the reasons for the rejection and request that the offeror, within a period not exceeding five working days, counted from the date of the relevant notification, rectifies the omitted requirements, or, if applicable, present a new duly constituted bid”.

As regards the above, Article 52, fourth paragraph, 53 and 57, section I, of the PPP Law sets out the following:

Article 52. […]

[…]

No requirement shall be the subject of evaluation where the failure to fulfil it, of itself, does not affect the validity and soundness of the proposal. The failure to observe said requirements shall not be reason for rejecting the proposal.

[…]”

“Article 53. Where in order to achieve the correct evaluation of the proposals, the convener needs to request clarifications or additional information from one or more of the competitors, it will do so in the terms indicated in the Regulation.

In no case must these requests give rise to a change in the proposal originally presented, or infringe the principles set out in Article 38 of this Law”.

“Article 57. The following shall be causes for disqualification, in addition to those identified in the rules:

I. The failure to fulfil one of the requirements set out in the rules, with the provisos set out in Article 52 of this Law;

[…]”

In the same vein, Articles 83 and 84 of the Regulation for the PPP Law sets out the following:

“Article 83.- The conditions that have the purpose of facilitating the presentation of the proposals and the development of the Competition, as well as any other requirement, the non-fulfilment of which, of itself, does not affect the validity and soundness of the proposals, shall not be the subject of evaluation. Its non-fulfilment shall not be reason to reject the proposals.

[…]”

Article 84.- When in order to achieve the correct evaluation of the proposals, clarifications or additional information are required in accordance with Article 53 of the Law, the convener must:

I. Ensure that it is clarification or mere additional information that is required, which does not result in the provision of new relevant documentation, or encourage conditions in which the competitor may remedy substantive deficiencies in its proposal;

II. Formulate the requests in writing or electronic means established by the Competition, which allows a record to be kept of them;

III. Set in its requests a deadline by which the competitor must respond, without such deadline delaying the Competition,

IV. Keep in the record of the Competition the original proposal, the requests for clarification, the clarifications obtained, and other elements that permit the subsequent verification that it complied with the second paragraph of Article 53 of the Law”.

On the other hand, Article 17-A of the Law of Federal Administrative Procedure, supplemental legal order to the PPP Law in accordance with that set out in Article 9 of the said law, sets out the following:

“Article 17-A. When the documents presented by the interested parties do not contain information or do not fulfil the applicable requirements, the agency or its corresponding decentralized body must notify the interested parties, in writing and on only one occasion, that they may remedy the omission within the period set out by the agency or its decentralized body, which may not be less than five working days counted from the day on which the notice takes effect; should the corresponding deadline expire without a remedy being affected, the proceeding shall be thrown out.

[…]

In case of failure to achieve the action noted in the preceding paragraph within the applicable deadline, the proceeding cannot be thrown out by reason that it is incomplete. In the event that the requirement for information is made in time, the deadline by which the corresponding agency must decide the proceeding shall be suspended and shall resume from the working day immediately following that on which the interested party responds.

The original source-language text of this announcement is the official, authoritative version. Translations are provided as an accommodation only, and should be cross-referenced with the source-language text, which is the only version of the text intended to have legal effect.

Contacts

Rivada Networks
Brian Carney: +1-929-245-8331
New York
bcarney@rivada.com

Release Summary

The SCT has presented an unbalanced and incomplete view of the tender rules for Red Compartida. Rivada Networks responds.

Contacts

Rivada Networks
Brian Carney: +1-929-245-8331
New York
bcarney@rivada.com