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Government Purchases

According to the Federal Constitution, article 37, item XXI, the government purchases should be regulated by a specific law. So reads the Constitution: "XXI. With the exception of the cases specified in law, public works, services,purchases and disposals shall be contracted by public bidding proceedings that ensure equal conditions to all bidders, with clauses that establish payment obligations, maintaining the effective conditions of the bid. as the law provides, which shall only allow the requirements of technical and economic qualifications indispensable to guarantee the fulfilling of the obligations."
The Portuguese word for public biddings is Licitação (singular) or Licitações (plural).
The regulatory law is Law nr. 8666, 21st June 1993. Click the next link to read a
integral and updated version of the law regulating public purchases in Brazil.Given its nature, it's not surprising that this is probably one of the most ammended Brazilian laws; click here to see the the historic of ammendments of this law.

Biddings currently happening
There are hundreds of public biddings going on at any given time. Visit ComprasNet (registering required) to check out biddings and other related news in the Federal government; for biddings in the States level, visit the official page of each of the Brazilian States and look for the link to "Licitações". For a more comprehensive site, try one of the search engines or a specific site like Licitaçõ or Licitaçã

There are several people and companies in Brazil whose business is to assist in the interpretation of and correct abidance to this law. Many apparent small details may become major stumbling blocks because of the Brazilian bureaucracy. The comments below are a very superficial highlight of some of the most important topics of the law.

  • Article 1 mentions the entities subject to the law: all the three branches; all the three levels of government (Federal, State and Municipalities); all agencies and foundations; all public companies, including those with private participation (this means that big businesses like Petrobras, Banco do Brasil and others are subject to the law)
  • Article 3 mentions that the nationality of the bidders will be considered only as a tie breaking criterium; otherwise, Brazilian and foreigner companies compete equally. Also, article 3 states that all the bidding process is open to the public, except, of course, for the value of biddings while not disclosed
  • Article 4: all bids are in national currency, except in the cases prescribed in article 42 (international purchases); article 42 also mentions other conditions to which international biddings are subject
  • Articles 7 - 12 detail the procedures to be followed when civil work and respective services are the subject of the bidding
  • Article 14 states the guidelines for purchase of goods
  • Articles 20 - 21 establishes the way that biddings must be publicized, and the deadlines which must be followed
  • Article 22 establishes the modalities of bidding: depending on value and/or subject of the bidding, more or less bureaucracy must be followed. Article 23 estates the value brackets (out of date) to define which modality must be adopted
  • Article 24 estates the situations where bidding is not mandatory. Some examples: purchases of small value (as defined by law); emergency situations which put people or premises in risk; when previous bidding processes had no bidders; to purchase or rent specific buildings; several others
  • Article 25 estates situtations when a bidding process is not feasible. Examples: there is only one possible contractor for a given product or service (it is the case, for example, of electricity supply, still a monopolium in Brazil); a professional is so outstandingly better than all the others that a bidding competition would be meaningless (famous architect Oscar Niemeyer has won several contracts based on this idea)
  • Articles 27 - 33 establish the documentation necessary to participate in the bidding processes. The number of documents depend on the modality of bidding. For national biddings, a Tax Number (CNPJ) is required
  • Articles 38 - 53 define how the Bidding Comission must behave. Who must be desqualified, and why. Who is the winner. How to give publicity to the results. Article 45 estates that, besides the price bid, technical factors may also define the winner.
  • Articles 54 - 64 specify the guidelines of the terms of the contract which will be signed with the winning bidder
  • Article 65 establishes the situations when the contract can be modified; these include the cases where the price can be changed
  • Articles 77 - 80: how breaches of contract are dealt with
  • Articles 81 - 99: administrative, civil and penal punishments for misconducting acts

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