New businesses with no history win contracts with AMLO’s government

The arrival of the Lopez-Brador government generated a ‘boom’ of new companies eager to become government suppliers: 171 companies emerged during the first year of the six-year period. They won contracts for 366 million pesos with 92 federal agencies. 77% of the members of its boards of directors lack business experience.

MEXICO CITY (Proceso) – Ana Gabriela Guevara became Mexico’s most successful female sprinter by breaking world records almost 20 years ago before she retired from athletics and jumped into the political arena. Today, the National Commission for Physical Culture and Sport (Conade), which is headed by the former Olympic medalist, is trying to break other records: awarding direct contracts to companies less than two months old.

The former champion is not the only official in this situation. This phenomenon is widespread throughout the new government of the working class. During the first year of the six-year term, companies emerged that did not exist before and showed up out of “thin air” at the same time as the federal administration was starting up, they were favored with contracts granted by almost a hundred public agencies.

An investigation developed by “Quinto Elemento Lab” found that a beehive of 171 companies created between November 2018 and December 2019 received during the first year of government economic transfers for a total of 366 million pesos from 92 agencies of the Administration of Andres Manuel Lopez Obrador.

In total, these companies captured 561 government contracts during the first year of government, and seven out of ten were awarded directly by the agencies, ie, without a public call, according to a review in the database of Compranet.

Quinto Elemento Lab detected the date of creation of these companies by examining in Compranet the alphanumeric keys of the Federal Taxpayer Registry (RFC) of the new government suppliers. That is how they unraveled who the partners and businessmen were who founded these companies by reviewing more than a hundred property documents in public registries in Mexico, the United States, and Panama.

Of the total contracts awarded to these companies that were born shortly before the arrival of the new government and during the entire first year of the administration, 398 (71%) got by direct award; 92 (16%) under the three-person invitation system, and only 71 (13%) of them tendered under a public bidding process.

Before he arrived at Palacio Nacional, López Obrador used to criticize the allocation of government contracts without competition. Still, in April 2019, the president justified the method of direct awards in his administration as having the objective of “fighting corruption.” The president accused previous governments of simulating bidding processes that favored foreign companies.

The Yucatan Times