Fraud in Mexico's Government Procurement Sector

Abstract

This thesis analyzes the problem of corruption in the Mexican government procurement system, aiming to provide a mix of legal and policy solutions to combat and prevent it. Comparing the policies and laws that make up the regulatory framework of public procurement in Canada and Mexico, this study seeks to extract the best practices that can improve the Mexican system. This text illuminates how the weaknesses within Mexico’s procurement system has provoked the current exploitation of alternative procurement methods (known as “adjudicación directa” and “invitación a cuando menos tres personas”) to embezzle public resources through fictitious contract awards. Although we have seen a tendency towards including requirements for “transparency” and “accountability” into Mexican procurement law, this on its own is insufficient to combat corruption. Consequently, I argue that procurement units have to enhance these transparency policies by disclosing the rationale behind every procurement and contract award prior to the disbursement of the resources; having competition as the maximum principle to fulfill while doing so. This will allow auditing bodies (and Mexican citizens) to scrutinize the rationale behind these disbursements. The Public Function Secretary could oversee this process to validate the legality and the social benefit justifications claimed by the procurement units prior to utilizing alternative procurement methods.