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The bidding process

i Notice

The public authority must publish the bidding notice as an RFP in the Official Gazette. In the RFP, the public authority defines all the conditions for the bidders' participation, the bidding and contracting time frames, acts and procedures adopted in the course of the bidding proceeding and, eventually, the guarantees required to the bidders. In addition, the RFP must contain a draft form of the intended public contract, designs and other forms relevant to the RFP or the future public contract.

Moreover, the public authority must define the tender model adopted for the public bidding in the RFP. Federal Law 8,666/1993 allows the following models:

  1. competitive bidding (most commonly used);
  2. price quotations (preferred for routine purchases using a preselected list of providers);
  3. invitation to bid (used for lower value purchases);
  4. bidding contests (used for technical, scientific or artistic works); and
  5. auction (used for selling of goods).

With respect to the auction, Federal Law 10,520/2002 prescribes simplified conditions to procurement for the purchase of ordinary goods and services by the public authority (Federal Decree 5,450/2005 also prescribes conditions to the electronic version of auctions).

Pursuant to the principle of strict adherence to the request for proposal, which is one of the most important principles prescribed in Federal Law 8,666/1993, the conditions set forth in the RFP bind the public authority and the bidders during the bidding proceeding and the performance of the public contract.

ii Procedures

Following the publishing of the RFP, the bidders must present their qualification documentation and commercial (and technical, if applicable) proposals in the form and date prescribed in the RFP's conditions. The qualification documentation serves to evidence the due legal existence and the financial good standing of the bidders and to attest that the bidders comply with the conditions and requirements established by the public authority in the RFP to perform the future public contract. Foreign bidders, when allowed to participate, must present documentation from their jurisdictions, observing the rules related to the public appositive prescribed in Hague Convection (in force in Brazil since August 2016).

Through the ordinary procedure prescribed in Federal Law 8,666/1993, the analysis of the bidders' qualification takes place before the opening of the commercial proposals. The public authority will rank only the qualified proposals under the RFP's conditions, and adjudicate the winning bid in accordance with the criteria chosen for the bidding proceedings, which may be (1) best price; (2) best proposal in technical terms; or (3) a combination of best price and best technical proposal.

In addition to the procedure established in Federal Law 8,666/1993, there are some special procedure forms set forth in specific legislation. For instance, in the case of reverse auctions, after the presentation of the relevant documentation by the bidders, the public authority should initiate a phase of oral bidding or an electronic auction with the purpose of increasing the value of the proposals offered by the bidders. The main difference in that case is the inversion of phases of the bidding proceeding, which means that the public authority will analyse the qualification documentation of the winning bidder.

It is worth mentioning that the trend to simplify the bidding procedure (such as the inversion of phases prescribed to reverse auctions) has been incorporated in the Brazilian public procurement framework. Specific legislation on the regulatory agencies for certain market sectors (such as telecommunication and oil and gas) already prescribed the adoption of simplified procedures to the bidding proceedings that were not concerned with the hiring of civil engineering works. In addition, the recent Federal Law 13,303/2016 established that all state-owned companies should adopt simplified bidding rules in their internal proceedings.

iii Amending bids

In accordance with the ordinary procedure, after the presentation of the relevant documents to the public authority, bidders are not able to change or amend their qualification documents or commercial proposals.