6.1. Introduction
The bidding procedure is the procedure provided for in the 1988 Constitution of the Federative Republic of Brazil, which guarantees a fair competition between agents who intend to contract with the Public Administration.
The contracting may have as its object the provision of services or acquisition of goods, and all must observe the formal administrative procedure before the contract itself, conducted by a specific governmental body, responsible for all the development of the respective public contracting.
The rigor and observance of these processes reflect a duty of the Public Administration, embodied in Article 37, item XXI of our Federal Constitution, to ensure the preservation of the public interest in hiring.
Regarding the stages of a bidding process, it is essential to note that the bids have at least two major phases: one internal and one external.
The internal period, also known as preparation phase, begins with the declaration of the need for the good or service and ends with the publication of the invitation to tender. The external phase of public knowledge starts with the release of the invitation to bid and ends with the signing of the administrative contract.
6.2. Regulation and Principles
Law 14,133/2 regulates the bidding process and administrative contracts and is based on the principles that govern Public Administration:
Legality: the public Administration is bound to act under the Law, within the legal limits established. Thus, in contrast to the freedom to contract inherent in Private Law, the Public Administration can only act within limits provided for by the Law.
Impersonality: determines that Public Administration decisions will be based on objective criteria, free from any personalities. The purpose of this principle is to guarantee the best hiring conditions for the Public Administration, always privileging the public interest to the detriment of any personal advantages of those involved in the hiring.
Administrative Morality and Probity: related to the principle of impersonality, its purpose is to prevent the public administrator from extrapolating the public interest to the benefit of personal, own, or other investments; since the primary objective of all bidding is to satisfy a public interest or need.
Equality: represents the obligation of the public administrator to grant the same treatment to all participants in the event, who must compete on equal terms.
Publicity: establishes the commitment of the public bidding entity to give knowledge and publicity of its acts to the common interest.
Binding to the Calling Instrument: it means the obligation of the Public Administration, as well as the bidder, to submit to the terms of the calling instrument. Thus, all rules applicable to the bidding in question must be contained in the public notice or letter of invitation.
Economy and efficiency: reflect the unavailability of public goods. Besides, economics is also a duty of efficiency, insofar as it imposes the choice of the best decision in the management of public resources.
Objective Judgment of Proposals: Public Administration, in choosing the most advantageous proposal, must necessarily adhere to the criteria set out in the invitation to bid.
6.3. Modalities of public bidding
There are five (5) modalities of public biddings (i) live reverse auction; (ii) competition; (iii) contest; (iv) reverse auction; and (v) competitive dialogue.
Besides these modalities, the Public Administration may establish accessory procedures to the public bidding process and public contracts, as long they are fixed in a formal regiment, with clear purposes.
(i) Live reverse auction (pregão): shall be adopted whenever the object of the bidding requires performance and quality standards that can be objectively defined by the calling instrument, through usual market specifications.
The live reverse auction does not apply to the contracting of specialized technical services of a predominantly intellectual nature and engineering works and services.
The live reverse auction can be applied to engineering contracts that the Law designates as “common engineering service” which, as defined in the legal text, is “(…) any engineering service whose object is actions, objectively standardizable in terms of performance and quality, maintenance, adaptation and adaptation of movable and immovable assets, with preservation of the original characteristics of the assets (…)”.
(ii) Competition: just like the live reverse auction, it will be adopted whenever the object of the bidding requires performance and quality standards that can be objectively defined by the calling instrument, through usual market specifications.
It shall be adopted for contracting special goods and services and common and special engineering works and services, whose judging criteria may be: lowest price; better technique or artistic content; technique and price; greater economic return; and/or greater discount.
(iii) Contest: is the procedure that seeks to select technical, scientific or artistic works. The calling instrument will indicate the qualifications required of participants; the guidelines and forms of presentation of the work; and the conditions of performance and the prize or remuneration to be awarded to the winner.
In contests aiming the development of a project, the winner must transfer to the Public Administration all property rights related to the project and shall authorize its execution in accordance with competent authorities’ convenience and opportunity.
(iv) Reverse Auction: type of bidding for the sale of real estate property or goods that is unusable or legally seized to the highest bidder.
(v) Competitive Dialogue: the competitive dialogue is restricted to contracts on which the Public Administration aims to contract an object that involves the following conditions:
a) technological or technical innovation;
b) it is impossible for the body or entity to have its needs met without adapting solutions available on the market; and
c) impossibility for technical specifications to be defined with accuracy by the Public Administration.
This bidding modality will also be adopted when the Public Administration verifies the need to define and identify the means and alternatives that can satisfy its demands, with emphasis on the following aspects:
a) the most appropriate technical solution;
b) the technical requirements capable of implementing the already defined solution;
c) the legal or financial structure of the contract.
Regardless the bidding modalities, bidding process must be conducted by a bidding commission, whether permanent or special, except for the auction, which is held by the official auctioneer or designated public official.
Therefore, for every bidding, it shall have a public administration in charge of the observance of the legal provisions. However, every public bidding entity, in turn, designates an internal agency to develop the bidding procedure, which is called a judging agency.
There are also different criteria in public bids to meet the needs of the public entity. Different standards will be adopted to determine how the proposals shall be judged by the Public Administration, as follows:
Lowest price: used when the selection shall be based on of the most advantageous proposal by the Administration that meets the specifications of the public invitation and offers the lowest price.
Highest discount: the judgment based on highest discount will be based on the global price set in the bidding notice, and the discount that shall be extended to any additional terms.
Best technique or artistic content: the judging by best technique or artistic content will exclusively consider the technical or artistic proposals presented by the bidders, and the public invitation shall define the prize or remuneration that will be awarded to the winners.
Technique and Price: the judgment by technique and price will consider the highest score obtained from the ponderation, according to the bid purposes provided for in the notice, of the scores attributed to the technical and price aspects of the proposal. This criteria will be chosen when a preliminary technical study demonstrates that the evaluation and consideration of the technical quality of the proposals that exceed the minimum requirements established in the public invitation are relevant to the purposes intended by the Administration in the tenders for contracting specialized technical services of a predominantly intellectual nature, in which case that the criterion for judging technique and price should preferably be used; services mostly dependent on sophisticated technology and restricted domain, as certified by technical authorities with recognized qualifications; special information and communication technology goods and services; special engineering works and services; and objects that admit specific and alternative solutions and execution variations, with significant and concretely measurable repercussions on their quality, productivity, performance and durability, when these solutions and variations can be adopted at the free choice of bidders, according to criteria objectively defined in the call for proposals of the bidding.
Highest bid: exclusive to the auction modality and consists of the best bid given by the bidder participating in the auction.
Greater economic return: the judgment for greater economic return will be used exclusively for the execution of an efficiency contract and will consider the greatest savings for the Public Administration, and the remuneration must be fixed in a percentage that will apply in proportion to the savings actually obtained in the execution of the contract. In bids that adopt these judging criteria, bidders will submit:
I – work proposal, which must include:
a) works, services or goods, with the respective deadlines for completion or supply;
b) the savings estimated to be generated, expressed in a unit of measurement associated with the work, good or service and in monetary units; and
II – price proposal, which will correspond to the percentage of the savings estimated to be generated during a given period, expressed in currency.
6.4. Exemption and non-requirement of bidding
The bidding duty, provided for in the Federal Constitution, is the general rule for contracting with the Public Administration. Notwithstanding, Law 14,133/21 provides for exceptions to this legal duty, so that the Government may, in some cases, carry out direct contracting, without bidding.
The situations of exemption from bidding are provided for in Article 75, of Law 14,133/21, and the Public Administration may not, its own discretion, waive bidding in other cases not listed in this provision.
Bidding is not required when competition is not possible, especially in cases of:
I – acquisition of materials, equipment or supplies or hiring of services that can only be provided by an exclusive producer, company or commercial representative;
II – hiring a professional from the artistic sector, directly or through an exclusive entrepreneur, as long as it is recognized by specialized critics or public opinion;
III – contracting the following specialized technical services of a predominantly intellectual nature with professionals or companies with notable specialization, with no requirement for advertising and dissemination services:
a) technical studies, planning, basic projects or executive projects;
b) opinions, expertise and evaluations in general;
c) technical advice or consultancy and financial or tax audits;
d) inspection, supervision or management of works or services;
e) sponsorship or defense of judicial or administrative causes;
f) training and improvement of personnel;
g) restoration of works of art and assets of historical value;
h) quality and technological controls, analyses, tests and field and laboratory trials, instrumentation and monitoring of specific parameters of works and the environment and other engineering services;
IV – objects that must or can be contracted through accreditation;
V – acquisition or rental of real estate property whose installation and location characteristics make it necessary its choose.
6.5. Administrative Contracts
Administrative contracts are governed by Law 14,133/21 and are regulated by its clauses and by the precepts of public law, and the principles of the general theory of contracts and the provisions of private law will be applied to them in addition.
Contracts must clear and precisely on the establishment of the conditions for their execution, expressed in clauses that define the rights, obligations and responsibilities of the parties, in accordance with the terms of the instrument calling for the bid and those of the winning proposal or with the terms of the act that authorized direct contracting and those of the respective proposal.
A draft of the administrative contract is part of the bidding invitation, which allows bidders to become aware of its terms even before they start participating in the bidding.
Once the bidding procedure is completed, the Public Administration will regularly call on the winning bidder to sign the contract term or to accept or withdraw the equivalent instrument, within the deadline and under the conditions established in the calling instrument. If the winning bidder does not appear to formalize the contract, the right to contract will be void, without prejudice to suffering sanctions provided for in Law 14,133/21.
6.6. Recommendations to engagement in public biddings
Anyone interested in contracting with the Public Administration in Brazil, whether national or foreign, must pay attention to the provisions of the invitation to bid, and, prepare in advance to complete and deliver their records, public registrations, in addition to training agents who may well represent you during bidding procedures.
Another valuable recommendation is the periodic obtaining of certificates that prove its legal and fiscal regularity, issued by the public bodies to which it is submitted (jurisdiction).
In case of doubts regarding the interpretation of the public notice or eventual omission, it is possible and also recommended that interested parties send questions, in accordance with the terms of the public notice regarding the means of communication, in a public form, before the documents protocol, so that those responsible for the bidding can settle the subject.
In cases of direct hiring by the Public Administration, such as in cases of exemption and non-requirement of bidding, it is important to thoroughly assess whether the contracting meets all legal, ethical and integrity requirements.
This analysis must be carried out considering the specificities of each case and the justifications that supported the exemption, or unenforceability must be duly recorded, in event of future audits.
Authors: Vanessa Cristina Santiago
Updated by: Livia Fabor de Queiroz
Gaia, Silva, Gaede & Associados
Av. Pres. Juscelino Kubitschek, 1830
Itaim Bibi, São Paulo – SP
CEP 04543-900
Telefone: (11) 3797-7400
E-mail: [email protected]
Internet: www.gsga.com.br