Law No. 14.133 of April 1, 2021 is now the sole legal basis for bidding and contracting with the Brazilian public administration. Since December 30, 2023, under Article 193, II, as amended by Supplementary Law No. 198 of 2023, Law No. 8.666/1993, Law No. 10.520/2002 and Articles 1 to 47-A of Law No. 12.462/2011 have been repealed. For a company that sells to the government, five points concentrate both the risk and the opportunity: the available modalities, the sequence of phases, the short deadlines to challenge and appeal, the contract risk matrix and the sanctions regime. This guide follows that path, from the bid notice to the sanction, citing the applicable articles.
The five bidding modalities
Article 6 of Law No. 14.133/2021 defines the modalities in items XXXVIII to XLII:
- Concorrência (XXXVIII), open competition: for special goods and services and for common and special engineering works and services, with award criteria ranging from lowest price to best technique and highest economic return.
- Concurso (XXXIX), design contest: to select technical, scientific or artistic work, with a prize or payment to the winner.
- Leilão (XL), auction: to dispose of real property or of unusable or legally seized movable property, to the highest bidder.
- Pregão (XLI), reverse auction: mandatory for the acquisition of common goods and services, awarded by lowest price or highest discount.
- Diálogo competitivo (XLII), competitive dialogue: for procurements in which the administration holds dialogues with previously selected bidders to develop alternatives, and only then receives the final proposal.
Reading any bid notice starts there: the modality defines the procedure, the deadlines and the room for technical negotiation.
The phases, in the order they happen
Article 17 sets the sequence: preparatory phase, publication of the bid notice, submission of proposals and bids, award decision, qualification, appeal phase and homologation. Two practical consequences deserve attention.
The first is that qualification comes after the award decision. As a rule, only the documents of the best ranked bidder are examined, which speeds up the process and changes the supplier's routine: the documentation must be ready before, not during. Article 17, paragraph 1, allows the inversion, that is, qualification preceding the proposal and award phases, provided there is a reasoned act explaining the benefits and express provision in the bid notice.
The second is that procurements are carried out preferably in electronic form (Article 17, paragraph 2), with the in person form allowed on reasoned grounds and the session recorded in audio and video.
Qualification: what may be required
Qualification conditions are set in the bid notice (Article 65) and fall into four fronts:
- Legal (Article 66): limited to proof of the legal existence of the entity and, where applicable, of authorization to perform the contracted activity.
- Technical (Article 67): certificates of professional and operational technical capacity. Requiring certificates is restricted to the most relevant or significant portions of the object, meaning those with an individual value equal to or greater than 4% of the total estimated value, and required minimum quantities are capped at 50% of those portions.
- Tax, social security and labor (Article 68): CNPJ registration, enrollment as a taxpayer where applicable, good standing with federal, state and municipal tax authorities, with social security and the FGTS fund, and with the Labor Courts.
- Economic and financial (Article 69): fitness proven objectively, through coefficients and indexes set in the bid notice and justified in the file.
Article 64 is the provision behind most avoidable disqualifications: once documents are submitted, no replacement or new document is accepted, except through a formal inquiry to complete information about documents already filed or to update documents whose validity expired after the proposals were received.
Challenges and appeals: deadlines you cannot recover
A bid notice with restrictive requirements or tailored specifications must be attacked before, not after. Under Article 164, any person may challenge the bid notice or request clarification, filing the request up to 3 business days before the date the session opens. The answer is published on an official website within 3 business days, limited to the last business day before the opening.
Article 165 provides for an appeal within 3 business days, counted from notice or from the recording of the minutes, against the granting or denial of pre-qualification and registration, the award decision, qualification or disqualification, the annulment or revocation of the procurement and the termination of the contract by a unilateral act of the administration. For award and qualification decisions, the intention to appeal must be stated immediately, on pain of preclusion (Article 165, paragraph 1, I), and the matter is examined in a single phase. Counterarguments have the same deadline as the appeal (paragraph 4). The authority that issued the decision has 3 business days to reconsider; failing that, it forwards the appeal to the higher authority, which decides within 10 business days (paragraph 2). Against the sanctions of warning, fine and debarment, the appeal period is 15 business days (Article 166).
Risk matrix: where the contract decides who pays
The risk matrix is defined in Article 6, XXVII, as the contractual clause that allocates risks and responsibilities between the parties and characterizes the initial economic and financial balance of the contract. Article 22 allows the bid notice to include it, with a compatible risk rate reflected in the estimated value, and makes it mandatory for large scale works and services and under the integrated and semi-integrated contracting regimes. The contract must mirror that allocation, including the grounds for restoring the economic and financial equation, termination when the event prevents performance and the mandatory insurance policies.
Economic and financial rebalancing
Article 124, II, letter d, allows the contract to be amended by agreement between the parties to restore the initial balance in cases of force majeure, fortuitous event, act of the prince or unforeseeable events, or foreseeable events with incalculable consequences, that make performance unfeasible as agreed, always respecting the objective risk allocation set out in the contract. That is why the risk matrix and the rebalancing request are the same subject: what was allocated to the contractor will hardly be rebalanced later.
If a unilateral amendment increases or decreases the contractor's burden, the administration must restore the balance in the same amendment instrument (Article 130). Termination of the contract does not prevent recognition of the imbalance, in which case compensation is granted through an indemnity instrument (Article 131). And the administration has a duty to expressly decide on requests and complaints, within one month after the request is fully instructed, extendable on reasoned grounds for an equal period (Article 123).
Sanctions: the risk that outlives the contract
Article 155 lists the infractions, from partial non-performance to fraud and to the practice of an unlawful act under Article 5 of Law No. 12.846/2013. Article 156 provides for warning, fine, debarment from bidding and contracting, and a declaration of unfitness. The fine, calculated as set in the bid notice or contract, may not be lower than 0.5% nor higher than 30% of the contract value (paragraph 3). Debarment applies within the federative entity that imposed the sanction, for up to 3 years (paragraph 4). A declaration of unfitness applies before all federative entities, for a minimum of 3 and a maximum of 6 years (paragraph 5).
The defense period is 15 business days (Articles 157 and 158) and the limitation period is 5 years from the administration's awareness of the infraction (Article 158, paragraph 4). Rehabilitation depends, among other requirements, on payment of the fine, full compensation for the damage and the lapse of 1 year from the debarment or 3 years from the declaration of unfitness (Article 163).
How the firm can help
Oliveira & Jacobovitz advises companies that sell to the public sector at every stage: critical review of the bid notice and advance verification of qualification documents, challenges and requests for clarification within the deadline of Article 164, appeals and counterarguments, negotiation and review of the risk matrix, requests for economic and financial rebalancing and defense in sanctioning proceedings. We also follow contract performance, where most problems begin. Each case is assessed individually, with no promise of outcome.
