Municipalities manage billions of pesos in public works each year. The applicable regulation is complex and non-compliance can result in liability for officials and loss of federal resources.
Applicable legal framework
Municipal public works in SLP are governed by:
- Federal Public Works and Related Services Law when federal resources are involved
- SLP State Public Works Law for state and own-source municipal funds
- OSFAE guidelines for contracting and executing public works in Potosí municipalities
- Operating rules of federal funds (FISM, Metropolitan Fund, etc.)
Contractor registry: why it matters
Only companies registered in the State contractor registry can participate in public works tenders in SLP. Contracting with unregistered companies can void the contract and automatically generate OSFAE findings. Municipalities must verify current registration status before formalizing any contract.
Bonds: the financial backbone of public works
The law requires performance bonds, advance payment bonds (when an advance is granted to the contractor), and hidden defects bonds (at project completion). A municipality that executes works without bonds loses its primary remedy if the contractor abandons the project or delivers deficient work.
- Performance bond: 10% of the contract amount
- Advance payment bond: equivalent to 100% of the advance granted
- Hidden defects bond: 10% of the amount, valid for 12 months after delivery
Project supervision: a critical and frequently neglected function
Project supervision is not optional: it is a legal obligation and the only guarantee that the contractor executes what was contracted. In smaller municipalities, supervision often falls to staff without technical training. We recommend hiring certified external supervision, especially for projects over $1M.