On October 6, 2023, Decree No. 509/2023 was published in Argentina’s Official Gazette, approving modifications to the Argentine Purchasing Regime and the Supplier Development Program. The Decree establishes amendments to improve the implementation and impact of Productive Cooperation Agreements (PCA) and expand investment and technology transfer possibilities within the national territory.
The Decree’s objective is to rectify the omission of Law No. 27437, which did not consider the possibility for the local contracting party to also act as the local provider for the supplier as a local goods-producing company and service provider. Therefore, to ensure greater participation, the content of PCAs is expanded to include the specific commitment by the awardee to acquire, contract, produce, or provide local goods and/or services related to the purpose of the selection process.
However, the regulations clarify that purchasing shares in local companies or expenses associated with marketing activities, advertising promotion, or similar activities will not be productive cooperation. Whenever feasible, Micro, Small, and Medium-sized Enterprises (“MiPyMEs”) participation must be promoted.
The Decree also sets forth that when contracting entities proceed to the acquisition, renting, or leasing of goods not produced in the country that represents a value equal to or greater than 240,000 Modules (equivalent to approximately 1 billion Argentine Pesos ),[1]they have to provide for the awardee’s obligation to sign a PCA for a percentage not less than 20% of the total value of the bid.
However, in cases where reaching the required amount through an PCA is not feasible, the implementing authority may authorize that the amount be completed through investments in the national territory, technology transfer, research and development investments, and technological innovation within the same productive sector of the contracted good and/or its value chain. The implementing authority may authorize that the amount be completed through the following categories, within the same productive sector of the contracted goods and/or its value chain: Investments: acquisitions of capital goods and productive installations and/or investments in Research and Development (R&D) carried out by the awardee in the national territory. Technology transfer: acquisitions of local rights to use patents, non-patented inventions, licenses, trademarks, designs, and industrial models, know-how or technical assistance for introducing improvements and/or innovations in processes, products, or organizational or marketing techniques. Research and technical training: research and training activities related to producing or maintaining the acquired goods, its productive sector, and/or its value chain. This category cannot exceed 20% of the total PCA amount. If the PCA amount exceeds the minimum requirement, the same awardee may use the corresponding excess value in future contracts. However, the excess cannot be computed if the percentage of the ACP has been decreased.
[1] Administrative Decision 76/2023. 1 module = 8000$ URL: https://www.boletinoficial.gob.ar/detalleAviso/primera/280590/20230202
