15 Ago 24 Regulation of the Bases Law– Chapters I and II of Title III – Contracts and settlement agreements.

On August 12, 2024, Decree No. 713/2024 (the «Decree») was published in the Official Gazette, through which the regulation of Chapters I and II of Title III – State Reform – of the Bases Law No. 27,742 («Bases Law») was approved. Specifically, the Decree regulates the provisions related to contracts and transactional agreements.

Below is a summary of the most important aspects:

Title III, Chapter I – Force Majeure in Current Contracts and Transactional Agreements

Through Annex I of the Decree, articles 63 to 65 of Chapter I of Title III are regulated, covering public work contracts; public work concession contracts, including the concession for the administration, expansion, repair, maintenance, conservation, exploitation, and/or operation of infrastructure; construction or supply of goods and services; as well as their ancillary and associated contracts, entered into by the bodies and entities that comprise the National Public Sector, under the terms of article 8 of Law No. 24,156.

Contracts that are financed by international credit organizations, of which Argentina is a member, shall be governed by the conditions agreed upon in the respective Loan Agreements and, subsidiarily, by national regulations.

The renegotiation or termination procedure may be initiated ex officio or at the contractor’s request. The renegotiation or termination of the contract shall be approved by the National Executive Branch (“PEN”). The renegotiation of contracts whose continuation is financially or economically advantageous for the public interest may proceed, and it will be subject to certain guidelines and stages.

The highest competent authorities shall submit a report with the proposed renegotiation agreement to the PEN for approval.

Regarding the termination of contracts due to emergency reasons, a specific procedure is established, involving technical and legal analyses, and an evaluation by the highest relevant authorities.

Under no circumstances shall adherence to the renegotiation or termination procedure authorize the parties to suspend or alter the fulfillment of their obligations, unless expressly provided otherwise. Additionally, the minimum conditions to which transactions must conform are determined.

Title III, Chapter II – Concessions

Through Annex II of the Decree, Articles 66 to 72, 74, and 75 of Chapter II of Title III are regulated.

– It is established that concessions may be for a fixed or a variable term.

In fixed-term concessions, the determination of the concession contract’s term must take into account the estimated time required for the amortization of the capital invested by the concessionaire, the payment of financial services, the recovery of maintenance, conservation, administration, and operation expenses of the work or infrastructure, and the concessionaire’s profit. Concessions will be variable-term when it is not possible to establish with sufficient accuracy the volume of traffic or users of the works, infrastructure, or the concessioned service, at the discretion of the technical bodies of the bidding entity.

-Public Services: Concessions or licenses for public services regulated by special regulations shall be subject to the provisions of their respective regulatory frameworks.

– Governing Authority: The governing authority shall be the Ministry of Economy.

– National or International Public Bidding Procedures: The types of bidding procedures, whether single-stage or multi-stage, and the requirements for participation are specified. Regarding the call for tenders, it must be published in the Official Gazette and on official websites with sufficient notice. The amendment of tender documents through notifications is permitted. Additionally, the creation of evaluation committees and the criteria for awarding concessions are established, with a focus on prioritizing the public interest.

Private Initiative Regime

Finally, the Private Initiative Regime (the “Regime”) is approved, which will apply to various contracts within the framework of the contracting systems governed by Laws Nos. 13,064 (Public Works), 17,520 (Public Works Concession), 23,696 (State Reform), and 27,328 (Public-Private Partnership Contracts).

All proposals submitted by a private party, whose object is regulated by the aforementioned laws, fall under this Regime. The governing authority is the Ministry of Economy.

Private initiatives may be submitted: (a) by a call made by the competent authority in the matter; or (ii) without a call, in which case the initiator of the initiative must state and prove the public interest reasons justifying the execution of the project, which must meet certain minimum requirements.

After the evaluation stage, if a project is declared to be of public interest, a public bidding process is called, a selection process is established, and the initiator has certain rights, such as the possibility of receiving fees if they are not awarded the contract, and the protection of their authorship for a period of two years.