On August 21, 2024, Decree No. 747/2024 (the “Decree 747”) was officially published in the Official Gazette. Decree 747 repeals several regulations that imposed on the National Public Sector the obligation to contract exclusively with companies in which the State held a shareholding interest.
This decree is based on the provisions of Decree No. 70/23 (“Decree 70”), which establishes that companies in which the National State has a shareholding interest will not be entitled to any type of public law advantage, nor may they receive preferences in the contracting or acquisition of goods and services. Furthermore, they will not be granted any kind of benefit or priority in any legal relationship in which they are involved.
The main points of Decree 747 are highlighted below:
1.Revocation of previous decrees:
- Decree No. 1,187/12: Required the entities and jurisdictions indicated in Article 8, subsection a) of the Law of Financial Administration and Control Systems of the National Public Sector No. 24,156 (“LAF”) to make the payment of personnel salaries only through Banco de la Nación Argentina.
- Decree No. 1,189/12: Obligated the same entities and jurisdictions to contract exclusively with YPF for the supply of fuels and lubricants for motor vehicles, vessels and official aircrafts, except for a specific authorization from the Chief of Cabinet of Ministers (“JGM”).
- Decree No. 1,191/12: Imposed on the entities and jurisdictions included in Section 8 of the LAF the obligation to use only the services of Aerolíneas Argentinas and Austral for the purchase of domestic and international tickets for their employees, except when there were justified reasons for not doing so.
- Decree No. 823/21: It established that all jurisdictions and entities mentioned in Section 8 of the LAF had to contract exclusively with Nación Seguros for all insurance required for public management.
In addition, paragraphs g) and h) of Article 80 of Decree No. 1030/16, which exempted certain entities of the National Public Sector, as well as other provincial, municipal or Government of the Autonomous City of Buenos Aires agencies, from the obligation to submit guarantees in selection procedures, are eliminated.
2.Preparation of reports on contracts, agreements or covenants.
In order to carry out an exhaustive analysis of the contracts, agreements or arrangements with companies in which the National State is a shareholder, the entities and jurisdictions of paragraphs a) and b) of Section 8 of the LAF are requested to submit a report. This report must include, at least: (i) the contracts or agreements in force entered into under the decrees now repealed, and (ii) all contracts, agreements or inter-administrative agreements entered into with entities contemplated in subsection (b) of Article 8 of the LAF.
Decree 747 establishes that an advantage, benefit or preference will be considered to exist when, in a selection procedure, favorable criteria or differential scores have been established for the entities of subsection b) of Article 8 of the LAF, or when a direct contracting has been made with such entities.
However, an advantage will not be considered to exist when the only available supplier is an entity or jurisdiction of Article 8(a) or (b) of the LAF.
This report must be sent to the JGM and the Ministry of Deregulation and State Transformation within a maximum period of thirty (30) business days from August 22, 2024.
3. Modification or Termination of Contracts with Advantages
Within a maximum period of one (1) year as of August 22, 2024, the jurisdictions and entities mentioned in paragraphs a) and b) of Article 8 of the LAF must terminate all contracts and agreements that grant advantages, preferences or benefits. However, Decree 747 allows the competent authorities to extend, for a maximum period of one (1) year, the contracts entered into under the now repealed decrees if deemed necessary.
4. Updating of the annual contracting plan and regulatory adjustments
The National Contracting Office is ordered to take the necessary measures so that the jurisdictions and entities of the National Public Administration update their annual contracting plan and adjust the regulations in force to comply with the provisions of Decree 747.
Additionally, Decree 747 provides that the National Public Administration, together with State enterprises and corporations, must promote selection procedures that are competitive and transparent for the provision of goods and services.
This decree became effective on August 21, 2024.
