consistency and equivalence requirements for international competitive bidding vis- -vis the
Post on 04-Feb-2022
5 Views
Preview:
TRANSCRIPT
1
Brazil – Federal Government and the State of São Paulo
Consistency and Equivalence requirements for international competitive bidding vis-à-vis the provisions of Sections I and II of the Procurement Guidelines
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices
Section I
Eligibility
paragraphs 1.6 -
1.8
Conditions for participation to be
limited to those that are essential
to fulfill the contract requirements.
Exceptions indicated in para 1.8.
Those provisions of the Guidelines
would be made applicable through
the Legal Agreement (LA).
The policy requirements are met:
Conditions for participation are limited to those necessary
to perform the contract as stated in Articles 27 to 33 of
the procurement law. Nationals and foreigners are treated
equally when bidding for government contracts as
required by Article 3 of the procurement law.
The following policy requirement is not met:
Foreign bidders need to be locally incorporated in order
to bid for government contracts—a requirement primarily
instituted in order to make any prospective government
supplier, whether domestic or foreign, subject to the same
legal and judicial system (and therefore as a way of
making all bidders compete for and execute government
contracts under equal rules and conditions).
Local incorporation implies registering in the Cadastro
Nacional de Pessoas Jurídicas (CNPJ), the taxpayer
registry administered by the country’s Ministry of
Finance (Ministério da Fazenda). Since obtaining a CNPJ
number requires a Brazilian address, foreign company
applicants must either establish a local branch office in
the country or designate a local agent that would act as a
bidder’s legal representative. Once incorporated in the
country, foreign companies (and foreign capital) are
2
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices legally treated as local.
According to the World Bank’s Doing Business in 2010
report, applying for a CNPJ number takes about 22 days
and the service is provided at no cost to the applicant.
Joint ventures
Paragraph 1.10
Mandatory association between
firms is not acceptable.
Those provisions of the Guidelines
would be made applicable through
the LA.
The policy requirement is not met:
Foreign bidders are never required to associate with local
companies to bid for government contracts. But in case of
an association between a foreigner and a local, the
Brazilian company (or technically, the company with
local legal representation) is required to be the leader
according to Article 33 of the procurement law. Such
requirement does not apply for competitive bidding
subject to international competition as defined by local
procurement law 8.666/93.
Section II
Two-stage
Bidding
paragraph 2.6
Turnkey contract
Paragraph 2.22
Applies to large and complex, or
turnkey, contracts that potentially
attract the participation of foreign
bidders.
Procedure may follow two stages:
1) non-priced technical proposals;
2) issuance of BDs to bidders, and
submission of technical priced
proposals.
Bank review of complex, high
value, and non-standardized
bidding processes as part of its
assessment of the country systems.
Possibility to use Bank SBDs or
harmonized MPDs for specific
bids/contracts to be identified in
the Procurement Plan (PP) for the
pilot project.
Modifications as may be needed by
the country institutional and legal
framework to allow for the country
policies and procedures to apply.
The policy requirement is not met:
The legal framework does not provide for two-stage
bidding as described in this requirement.
Notification and
Advertisement
paragraphs 2.7-
General Procurement Notice
(GPN) and Specific Procurement
Notices (SPN) for ICB contracts
The executing agency of each pilot
project will be required to publish
in UNDB, and on an electronic
The policy requirement is met:
Transparency is a valued principle by Brazilian rules and
procedures for public procurement. Other than sole-
3
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices 2.8 to be published on UN
Development Business online and
Dg market.
free access portal, all contracts
identified as likely to attract
foreign competition.
Such contracts to be flagged in the
Procurement Plan (PP).
Publication of all mandatory
documents at the pilot project level
on a fully functional and freely
accessible website of the executing
agency.
source transactions, every procurement process carried
out by the federal government (including price
quotations) is publicly advertised in both the ComprasNet
website and the federal official gazette, irrespective of
estimated contract size and procurement method. In
addition to these two (widely accessible) public
advertising channels, and depending on the procurement
method, some procurement opportunities may be
advertised in newspapers of national, state, and/or
municipal circulation. Finally, for those SICAF-
registered suppliers who sign up for the service,
ComprasNet can notify them of upcoming reverse
auction procurement events via e-mail immediately after
the events are advertised online.
In São Paulo, all procurement opportunities and contract
awards are published in the website of the state official
gazette, known as e-negociospublicos. In addition, all
reverse auction invitations to tender are published in
Pregão.sp, including detailed, process-specific
information such as bidding documents, clarifications,
complaints, and minutes of bid sessions.
Prequalification
paragraphs 2.9-
2.10
Use of prequalification for large
complex requirements limited to
capability and resources to
perform the particular contract
with regard to experience, past
performance, personnel, facilities
and financial position.
The PP will be used to identify
bidding processes that would
benefit from pre-qualification.
Advertisement as per requirements
above.
Prequalification requirements to be
assessed by comparison with the
harmonized pre-qualification
MPD.
The policy requirement is met:
Use of prequalification is regulated by Article 114 of the
procurement law. According to the procurement law,
bidder pre-qualification may only be used (i) for large
contracts procured through open competitive process,
known as ―concorrências‖, which is used for large works,
and (ii) if justified by the technical complexity of the
contract. The use of pre-qualification must be approved
in advance by the agency’s highest procurement authority
on the basis of a detailed (written) justification for the use
4
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices of the procedure by the bid evaluation committee.
Pre-qualification is carried out on a pass/fail basis.
Article 114 of the procurement law establishes that the
pre-qualification procedure must be consistent with the
qualification assessment guidance set forth by the
procurement law for open competitive bidding
procurement in general and concorrências in particular,
which is based on objective criteria and the pass/fail
principle.
Bidding
Documents
paragraphs 2.11-
2.12, and 2.16 –
2.18
Bidding documents must provide
information sufficient for a
prospective bidder to prepare a
bid. Use of Bank standard bidding
documents is mandatory for ICB -
this requirement will have to be
modified for the pilots.
Existence of national sample
bidding documents (NSBDs) not
required, but mandatory use of
standard bidding documents
acceptable to the Bank when
international competition is sought
under pilot projects.
Specific provisions to be validated
vis-à-vis the checklist below, and
to be stated in the LA.
The policy requirement is met:
São Paulo has nine standard bidding documents, covering
the procurement of goods, works, and non-consulting
services. The use of standard bidding documents is
mandatory. The documents’ standard content complies
with the minimum content requirements introduced by
the federal procurement law and provides all relevant
information for bidders to prepare a responsive bid.
The federal government does not publish standard
bidding documents of mandatory use.
Validity of bids
and bid security
paragraphs 2.13-
2.14
Bidding documents must state bid
validity period.
Bid security not mandatory
Review of clauses in the bidding
documents accepted for use under
pilot projects when international
competition is anticipated.
The policy requirements are met:
When required, the amount of the bid security is limited
to 1% of the estimated cost in convites, tomadas de preço
and concorrências (Articles 31 and 32 of Law 8.666/93).
For reverse auctions (which are mostly done
electronically), bid securities are not required (Article 5
of Law 10.520/2002).
Article 60 of law 10.520/2002 and Article 64 of law
5
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices 8.666/93 provide for 60 days of bid validity period unless
otherwise stated in bidding documents.
Language
paragraph 2.15
English, French, or Spanish, in
addition to the national language
of the country.
National language can be used
provided that it is used
internationally and that a
translation in English, French or
Spanish be made available to
foreign bidders for contracts that
have been identified for
international bidding in the PP.
Advertisement and bidding
documents should be issued in an
international language (English,
French or Spanish) in addition to
the national language, and
contracts with foreign entities
should be signed in the
international language the bidders
used for their bids.
The policy requirement is not met:
All documents concerning procurement processes are
prepared in the national language, Portuguese.
While complying with the language requirement under
current Bank projects, Brazilian counterparts have often
indicated to the Bank that this requirement represents a
burden for them. Given the size of the Brazilian market,
the growing importance of its economy both within and
outside the region, and the fact that companies interested
in doing business in Brazil typically operate through local
offices or representatives, the Region proposes that the
OPRC considers allowing the use of Portuguese for the
purposes of a possible UCS pilot project in Brazil. A
review of data from 384 forms (i.e., information on ICB
contracts) over several years up to 2007 showed that 98%
of all Bank-financed civil works contracts in Brazil were
awarded to firms registered in Brazil. Similarly, 85% of
all ICB contracts for procurement of goods were awarded
to suppliers registered in Brazil, and this percentage
climbs to 93% if several large contracts for procurement
of condoms financed by HIV/AIDS projects are
excluded.
Standards/Brand
Names
paragraphs 2.19-
2.20
Use of standards and
specifications that promote
competition or based on "or
equivalent" if brand name is used.
National standard may be specified
after review of their non
discriminatory nature in the
bidding documents accepted for
use under pilot projects.
The policy requirements are met:
The procurement law forbids the use of brands and labels
(Article 15). Technical specifications need to be prepared
using technical and functional characteristics. Use of
brand names are especially relevant for procurement of
goods and, in this respect, the reverse auction law
6
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices (Article 3) demands the use of neutral specifications and
forbids any reference or statement in the specifications
that might limit or restrict competition. If a brand or label
is mentioned in the bidding documents, it shall be
followed by the expression ―or similar‖. Compliance with
the law is enforced by information technology as
databases of goods and services are reviewed and
audited.
The procurement law forbids the use of conditions or
requirements that could restrict competition or favor
specific companies, including standards (Article 3, para.
1).
Pricing
paragraphs 2.21
& 2.23
Bid must be invited on the basis of
specified INCOTERMS
Mandatory use of INCOTERMS
for comparison purposes, or fully
equivalent provisions.
The policy requirement is not met:
Bidders are required to submit the total price for the
goods, works or services, including taxes, fees, levies,
insurance, transportation and any other costs incidental to
have goods, works and services delivered to the final
destination. For procurement of goods, bids are invited on
terms similar to the INCOTERM DDP.
Price Adjustment
paragraphs 2.24-
2.25
Bidding documents must specify if
price adjustment applies and price
adjustment must be based on a
prescribed formula.
Requirement for price adjustment
as a contractual term to be included
in the bidding documents accepted
for use under pilot projects when
international competition is
anticipated.
The policy requirement is met
Bidding documents must indicate whether or not price
adjustment will apply (Article 40 of the procurement
law). When applicable, the adjustment formula will use
specific inflation indexes that will refer to the date of the
submission of bids or the date when the official estimated
cost was prepared.
Currency and
Payments
paragraphs 2.28-
Bids documents must state
currency provisions and the
conversion mechanism. Payment
National currency acceptable
provided it is freely and fully
convertible and country does not
The policy requirement is met:
Bidding processes subject to international competition
7
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices 2.36 provisions must also be stated in
the bidding documents.
apply restriction or control on
foreign exchange.
Contract terms to allow payment in
foreign currency directly and/or as
percentage of contract price at
predefined exchange rates (in no
more than 3 currencies) expressed
in the bidding documents accepted
for use under pilot projects when
international competition is
anticipated.
allow foreigners and locals to submit bids in foreign
currency (Article 42). All other bidding processes require
bids expressed in local currency (Article 5). The
Brazilian currency, the Real, is freely and fully
convertible.
Alternative bids
Conditions of
Contract
paragraphs 2.37
& 2.38
Contract documents must clearly
define the procedure to submit
alternative bids, and the scope of
work, rights and obligations of the
parties, and provide for fair and
clear allocation of risk.
General Conditions of Contracts
(GCC) for contracts covering
goods, works and services to be
consistent with international
requirements when international
competition is sought.
To be part of the bidding
documents accepted for use under
pilot projects when international
competition is anticipated (see
checklist below).
The following policy requirement is substantially met:
Alternative bids:
Alternative bids are only allowed in processes that follow
the procedures ―best technical proposal‖ and ―best
technical proposal and price combination‖. These
procedures are used for hiring consulting services and, on
exceptional basis, for procurement of major equipment
when the options available in the market present
significant differences in terms of quality, productivity
and reliability and these differences can be objectively
measured. In such exceptional cases, the top official of
the purchasing agency, usually the Minister, will have to
clear the process.
The following policy requirement is met:
Conditions of Contract:
São Paulo has GCCs for contracts of goods (single
delivery or multiple deliveries), non-consulting services
(services based on unit prices and services based on
lump-sum charges), and works (small works, medium-
8
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices size works, and large/complex works). Implementing
agencies are required to use the appropriate standard
GCCs and an attorney from PGE must approve the
contract before signature.
The content of GCCs is consistent with internationally
accepted practices and also compatible with Article 55 of
the federal procurement law, which sets out the minimum
content for every government contract. All GCCs
include, at a minimum, the following:
- Description of the item
- Contract period and delivery requirements
- Prices, payment conditions, and price
adjustment formula if applicable
- Timeframes for contract implementation and
responsibilities of supplier and employer
- Performance guarantees if required
- Rights and responsibilities of each party,
including penalties and fines
- Conditions for contract termination
- Explicit linkage between the contract, the
bidding documents and the supplier’s bid
- Legislation applicable to contract
- Dispute resolution procedures
9
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices
The federal government does publish GCCs of mandatory
use.
Performance
Security,
Liquidated
Damages
Force Majeure
paragraphs
2.39/2.40, 2.41&
2.42
Format and provisions to be
included in the bidding
documents.
(to be assessed as part of the
assessment of the country legal and
institutional framework).
The policy requirements are met:
Performance securities are not mandatory but if required,
bidders can choose one of the following formats: cash,
government bonds, insurance bonds, and bank guarantee
(Article 56). The law limits the amount of the
performance security to 5% of the contract price and, in
case of large and complex works, this amount can go to
the maximum of 10% of the contract price. Suppliers and
contractors that provide cash as performance security will
receive their money back adjusted for inflation.
If a price offered by a bidder is considered to be too low
and risky, the performance security shall include an
additional premium equivalent to difference between the
price offered and the estimated price (Article 48).
For contracts that are terminated based on force majeure,
the contractor or supplier will have its performance
security returned and will be paid for the services or
goods delivered up to the date of contract termination and
for demobilization costs (Articles 78 and 79).
Assessment of liquidated damages are defined in specific
bidding documents and the law requires that penalties be
collected firstly through the performance security,
secondly from payment deductions and finally through
court order (Articles 86, 87 and 88).
Applicable law
and settlement of
The conditions of contract shall
provide for settlement of disputes
National law to apply. The policy requirement is met:
10
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices disputes
paragraph 2.43
and state the applicable law. For the procurement of goods, works, and services, the
procurement law provides an alternative dispute
resolution (ADR) mechanism, or amicable settlement
process, that has proved to work well over the years.
Unsatisfied parts to a contract that has gone through the
ADR process can seek recourse through the country’s
courts of law.
Time for bid
preparation
paragraph 2.44
Time allowed for the preparation
and submission of bids shall be
determined on the basis of the
magnitude and complexity of the
requirement.
Requirement to be stipulated for
each executing agency
implementing pilot projects.
To be closely monitored as one key
compliance indicator (see Stage
III).
The policy requirements are met:
Timeframes for preparation and submission of bids are
adequate in providing enough time for potential bidders
to obtain the bidding documents and response to an
invitation to bid. Timeframes are also consistent with the
method, nature, and complexity of the procurement
process at hand. Specifically, for the non-auction open
competitive bidding procurement method, the time
provided for submission of bids varies (per the
procurement law) according to the complexity of the
contract. For example, procurement processes for
consulting services with an estimated award size of at
least R$1.5 million (about $840,000) and awarded on the
basis of ―best technical proposal‖ have a minimum bid
preparation period of 45 days. In contrast, processes for
procurement of goods and works in the same award size
bracket but awarded on the basis of the lowest offered
price (among qualified bidders) have a minimum of 30
days for bid preparation.1
1 Besides the 45 and 30 day periods, other minimum proposal preparation time periods stipulated under law 8.666/93, depending on the nature of the process and
in strict accordance with the proposal preparation’s expected underlying complexity (as proxied by estimated award size), include 15 and 5 days.
11
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices For reverse auctions, as defined by law 10.520/02, the
minimum time allowed for the submission of bids is eight
days regardless of the estimated award size (and since
there is no variation in award criteria for this procurement
method). Bids for reverse auctions are relatively simple
and most of the times submitted electronically.
Bid opening
procedures
paragraph 2.45
Bids to be opened in public at the
time and place designated in the
bidding documents.
Rejection of late bids.
Assessment of legal framework to
ensure that the national law covers
this requirement, and evaluation of
compliance at the pilot project
executing agency level, and
monitoring during pilot project
implementation.
The policy requirements are met:
Bids must be opened in a public proceeding, as defined
and regulated in Article 43 of the procurement law (for
non-auction competitive bidding) and Article 4 of the
reverse auction law (for reverse auctions). All bids
submitted after the bid submission deadline are rejected.
For non-auction competitive bidding, it is a de facto
practice in the country to open bids immediately
following the bid submission deadline. The reverse
auction law does explicitly stipulate that the public
opening of bids will immediately follow the submission
deadline (in the case of electronic reverse auctions—
which account for 97% of all reverse auctions
implemented by the federal government—the practice is
automatically enforced by the ComprasNet electronic
auction hosting system).
For all procurement methods and invitation modalities,
minutes with details of the proceedings at bid opening
ceremonies are kept electronically and are freely
available for review online on the ComprasNet website.
Confidentiality After bid opening, evaluation and National law to apply.
12
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices paragraph 2.47 recommendations and other
information shall not be disclosed
until after publication of the
award.
The policy requirement is met:
After bid opening, the evaluation process is confidential
and all documents related to this process can only be
handled by the bid evaluation committee. After
publication of the award, bidders are entitled to dispute
the result by filing a complaint, which is locally known as
―recursos‖.
Disclosure of bid information during post award
debriefing, as required by the Constitution, is full.
Submitted bids are considered public documents and are
made available to any interested party upon request, as
clearly defined in the legal framework.
Examination,
evaluation and
comparison of
bids;
Post-qualification
paragraphs 2.48 -
2.54, and 2.58
Bids to be evaluated and awarded
on the basis of the criteria stated in
the bidding documents and
quantified using cost to the
maximum extent.
Post-qualification applies when
there is no pre-qualification.
To be part of the bidding
documents accepted for use under
pilot projects when international
competition is anticipated (see
checklist below).
The policy requirements are met:
For reverse auctions, price is the sole evaluation criterion,
as defined in Article 4 of law 10.520/2002. Post-
qualification of the winner is done before award.
For non-auction competitive methods, there are three
types of evaluation mechanisms: lowest price (goods and
works), quality and cost (consultants), and best quality
(consultants). For lowest price bidding processes, the
evaluation of bids and award decision will take into
account only the price offered. For quality and cost and
for best quality, bidding documents shall spell out the
evaluation criteria as well as the weights for technical and
price proposals in the case of the former. Works can only
be procured through lowest price. Consultants can be
selected using any of the three evaluation mechanisms
(Articles 45 and 46).
13
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices
In the Federal Government only and for non-auction
procurement methods only, Law 8.666/93 provides for a
two or three-step open, competitive bidding procedure.
For procurement of goods and works, a two step process
is followed (for consultants, three steps) whereby bidders
submit two sealed envelopes to the implementing Agency
at the same time. The first envelope contains a price
proposal. The second envelope contains the bidder’s
legal, financial, and technical qualification documents, in
accordance with the requirements of the bidding
documents. The evaluation process includes two distinct
evaluation steps. In the first step, only the envelopes
containing the qualification documents for all bidders are
opened and reviewed by the bid evaluation committee.
Only the bidders deemed in full compliance with the
bidding documents advance to the second step, during
which the envelopes containing the price proposal are
opened. The contract is awarded to the qualified bidder
who submitted the lowest price. Price envelopes for
unqualified bidders—as determined by the bid evaluation
committee on the basis of the bidding documents—are
returned unopened after the award decision is made.
In São Paulo, the State’s legal framework was modified
to adopt a post qualification procedure by requiring that
financial envelopes in paper based procurement be
opened first2. The qualifications of the three lowest
bidders are evaluated on a second step, which takes place
immediately after ranking the price proposals. This
procedure of opening prices before the qualification
documents is locally named ―inversão das fases‖.
2 This practice was introduced by State Law 13.121/08 and further regulated by State Decree 54.010/09.
14
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices
Domestic
preference for
goods
GL 2.55-2.56
Defines the Bank's procedures for
use of domestic preference.
Use of discriminatory domestic
preferences (e.g. by nationality)
will not be allowed in the bidding
documents accepted for use under
pilot projects when international
competition is anticipated (see
checklist below).
The policy requirements are not met:
The law does not allow the use of any provision to grant
preferences to locals (Article 3). Foreigners and locals are
treated equally in government procurement.
If there is a tie between two or more bids, law 8.666/93
establishes that, as tie-break criteria, preference should be
given to goods, works, and services that are produced or
rendered (i) by Brazilian firms funded with domestic
capital; (ii) in Brazil; (iii) by Brazilian firms (regardless
of how they are funded); and (iv) by firms that invest in
research and development in Brazil (in that order). If a tie
persists even after applying these criteria, the winner is to
be named based on a random draw among tied bidders.
As an exception to the first paragraph, in procurement of
goods and services of the information technology sector,
local bids as defined by the law are allowed an
opportunity to match or beat the winning bid when local
bids are within a 10% range of the winning bid. If local
bidders forgo the opportunity, ranking and award will
follow usual procedures defined in the procurement law
or the reverse auction law. Local bids are those offering
goods and services manufactured in the country or that
contain technology developed in Brazil, according to
Decree 7.174 dated May 2010.
Also an exception to the legal requirement that all
companies be treated equally (Article 3), Law 123 of
15
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices 2006, or the general Law of small and medium
enterprises (SMEs)3 introduces a tie-breaking criterion
that favors such businesses in the context of competitive
public procurement. Specifically, any bid from a
qualified SME bidder (i.e. bidding document responsive)
that is equal to or within 10% of the lowest priced
proposal when the latter was submitted by a qualified
non-SME bidder (5% in the case of reverse auctions) will
be considered as ―tied‖ with it. The SME bidder(s) in
question will then be given the opportunity to, if they so
desire, re-issue a price proposal that is lower than the
originally-lowest priced bid, in order to win the contract.
Bid validity,
Award of
Contract
Rejection of bids
Publication
paragraphs 2.57,
2.59-2.60, and
2.61-2.64
Award to the lowest evaluated
bidder which meets the
requirements of the bidding
documents including technical
capacity and financial resources.
Publication of awards is required
within two weeks.
Rejection of all bids to be
justified.
Assessment of legal framework to
ensure that the national law covers
bid validity, contract award, and
rejection of bids requirements, and
evaluation of compliance at the
pilot project executing agency
level, and monitoring during pilot
project implementation.
The executing agency for each
pilot project would be required to
have (a) a functioning electronic
system for retaining information on
its procurement processes and
managing invoices and certificates
payments; and (b) a fully
functional website that is freely
accessible to all stakeholders,
including bidders and civil society,
The policy requirements are met:
For reverse auctions, the award is made to the bidder
offering the lowest price that meets the requirements set
in the bidding documents (Article 4 of law 10.520/2002).
For non-auction competitive procurement, the
procurement law requires that the award be made to the
lowest price in case of lowest price-type of bidding
(Article 45), and to the bidder with the highest score in
the case of quality and cost and best quality types of
bidding processes.
All contract awards, irrespective of the amount, need to
be published no later than the fifth business day of the
month following the award (Article 61). Contract awards
are posted on the ComprasNet website and published in
3 The Law refers to SMEs as micro and small enterprises. Micro enterprises are defined as those with annual revenues of up to R$240,000 (about $133,000);
small enterprises are defined as those with annual revenues above R$240,000 and up to R$2.4 million ($1.3 million).
16
Guidelines
paragraph(s)
Policy requirements Required for the Piloting
Program
Review of the Brazilian procurement
practices for posting information regarding
its organization, procurement
regulations, SBDs, procurement
opportunities, information related
to the award of contracts, and
procurement plans.
the federal official gazette. In São Paulo, all contract
awards are published at enegociospublicos.com.
Rejection of all bids needs to be justified and approved
by the OD (Article 49). Publication of the decision is
required and bidders are allowed to complain.
17
Standard Bidding Documents – Federal Government and the State of São Paulo
Checklist of Clauses and Key Findings
The government of the state of São Paulo has nine standard bidding documents of mandatory use. Specifically, São Paulo’s
Office of the Solicitor-General (Procuradoria Geral do Estado de São Paulo, or PGE) has developed and disseminated the following
standard bidding documents (SBDs), corresponding to the various procurement methods:
Two SBDs for the concorrência method (with and without inversão das fases)
Two SBDs for the tomada de preços method (with and without inversão das fases)
One SBD for the convite method
Four SBDs for reverse auctions (single-delivery of off-the-shelf goods, multiple deliveries of off-the-shelf goods, non-
consulting services based on unit prices, and non-consulting services based on lump-sum prices)
All nine SBDs were crafted by PGE subject-matter expert attorneys (in effect, the São Paulo counterparts of AGU legal
advisors at the federal level). Moreover, PGE has a clear authority to review and periodically update the SBDs in order to both reflect
market needs and continue to contribute towards improving procurement efficiency.
Besides standard bidding documents, PGE has developed and disseminated a standard contract document, including general
conditions of contract, for the execution of public works. The use of standard contracts, as the use of SBDs, is mandatory to state
government agencies.
The Bank reviewed all nine standard bidding documents and the standard contract issued by the State of São Paulo as part of
the preparation work to propose a pilot for country systems in Brazil. The federal government does not issue standard bidding
documents of mandatory use. The team that reviewed the documents issued by São Paulo found that the Brazilian procurement law
8.666/93 provides granular details about issues concerning the implementation of procurement processes. As a result, bidding
documents tend to be short compared to Bank’s standard bidding documents as Brazilian bidding documents will typically refer to the
18
procurement law rather than duplicate its content. In fact, the longest bidding documents issued by São Paulo are only 21 pages long.
On the other hand, the procurement law 8.666/93 is significantly longer than the Bank’s Guidelines as it covers in detail procurement
procedures that the Bank rather leaves to the bidding documents. As a consequence of this characteristic of the legal and regulatory
framework, the review of São Paulo’s standard bidding documents according to the checklist provided in the methodology to pilot
country systems is separated into two broad groups: first, this report will only present the issues of the checklist that are actually
regulated by the procurement law and, consequently, apply to all bidding documents issued in the country; unless those issues are not
covered by the report on assessment of the OECD/DAC benchmarking tool, this report will not discuss those issues in detail again and
it will rather refer the reader to the specific part of the report of the OECD/DAC benchmarking tool. Secondly, the report will present
and discuss only the clauses of the checklist that are dealt with at the level of bidding documents published by São Paulo.
Clauses covered by the Procurement Law (8.666/93) and that apply to all bidding documents issued in the country, including
the federal government and the State of São Paulo
Clause Subject Reference in the
procurement law Reference in the report of assessment of the OECD/DAC
Benchmarking Tool; or
Comment to the relevant clause in the law
Comments
1. Fraud and
Corruption
Articles 89 to 108 Sub-indicator 12 (a), Page 86 It is substantially
equivalent but
specific clause to
cover Bank’s right
of inspection and
audit needs to be
added.
2. Eligible Bidders
Article 3 Sub-indicator 1(d), Pages 42-44 Equivalent, except
for the
requirement to
have a CNPJ as
described earlier
in this report and
in sub-indicator 1
19
(d) of the
benchmarking
report.
3. Sections of
Bidding Documents
Article 42,
paragraph 2
Note: Bidding documents must include engineering designs,
technical specifications, estimated costs and unit costs, bill of
quantities, and draft contract.
Equivalent.
4. Documents
Comprising the Bid
Articles 27 to 33 Note: Bids should have a set of documents demonstrating legal,
fiscal, financial and technical qualifications of the bidder.
Documents showing legal qualifications:
Identification of the person signing the bid
Statutes
Corporate acts identifying the current board of the company
Articles of incorporation
Foreigners should also include authorization to operate in the
country.
Documents showing technical qualifications:
For procurement of works, registration at the council of
engineering and architecture
Certificates showing previous experience in similar works and
services
Résumé of the project manager
When required, certification of visit to site of works
Résumé of key technical team that will work on the contract
List of plant and equipment available to perform the contract
Documents showing financial qualifications:
Certification that the company has not filed for bankruptcy
Balance of sheets for the last fiscal year
Equivalent.
20
Documents showing fiscal qualifications:
Taxpayer identification number
Registration with local tax collection agencies
Non-arrears tax statements
Clearance certificate from the social security office
In São Paulo, companies that are registered at CAUFESP, the State’s
database of suppliers, do not need to submit copies of the documents
showing technical, financial, legal and fiscal qualifications with their
bids. The state administration will check the corresponding
information online.
According to Article 32 of the procurement law, foreign bidders may
submit notarized and certified translated documents that are
equivalent to the ones issued in Brazil.
5. Alternative Bids
Article 46,
paragraph 3 Note: The procurement law requires implementing agencies to
prepare engineering designs (and impact assessments) before a
bidding process for works can be advertised. As a result, government
agencies usually have detailed specifications and designs by the time
bidding documents are written. Because of this detailed preparation
work that leads to a procurement process, bidding documents for
works typically will not consider alternative bids. It should be noted
however that the procurement law does allow for specific processes
to consider alternative bids but this is considered an exception that
requires prior approval from the Ordenador de Despesas.
It is substantially
equivalent.
6. Currencies of Bid
Article 5 Note: Except for bidding processes subject to international
competition, all bids shall be submitted in national currency.
Equivalent.
21
7. Documents
Establishing the
Qualifications of the
Bidder
Articles 27 to 33 Note: As presented in 4 above ―Documents comprising the bid‖, bidders are
required by law to submit a set of documents showing that they comply
with technical, financial, legal and fiscal requirements to bid.
According to Article 32 of the procurement law, foreign bidders may
submit notarized and certified translated documents that are
equivalent to the ones issued in Brazil.
Equivalent.
8. Period of Validity
of Bids
Article 64 of law
8.666/93 and
Article 60 of law
10.520/2002
Note: Article 60 of law 10.520/2002 and Article 64 of law 8.666/93 define
that bids shall be valid for a period of 60 days unless otherwise stated in
bidding documents. Bid validity has never been an issue on reverse
auctions, which are largely done through the internet and the award is swift.
Equivalent.
9. Bid Security and
Bid-Securing
Declaration
Articles 31 and 32
of law 8.666/93 and
Article 5 of law
10.520/2002
Note: For reverse auctions (which are mostly done electronically), bid
security is forbidden by the reverse auction law. For the other procurement
methods (convite, tomada de preço and concorrência), the amount of the
bid security is limited to 1% of the estimated cost. When required, bid
securities can be presented in one of the following formats: cash,
government debts bonds, insurance bond, or bank guarantee.
In São Paulo, bid securities are not required by default. Bidders who fail to
sign a contract will be debarred for a period of up to five years.
Equivalent.
10. Bid Opening Article 43 of law
8.666/93 and
Article 4 of law
10.520/2002
Sub-indicator 1(g), Page 47 Equivalent.
11. Confidentiality Article 3 of law
8.666/93
Sub-indicator 1(f), Page 46
Equivalent.
12. Clarification of
Bids
Article 43 of law
8.666/93
Note: The procedure for clarification of bids described in the procurement
law is similar to the one presented in the Bank’s SBDs. The bid evaluation
committee may contact bidders for purposes of clarification of bids but
change in the substance of the bid or inclusion of new documents is not
Equivalent.
22
permitted.
13. Domestic
Preference
Article 3 of law
8.666/93
Note: Local and foreign registered bidders are treated on equal footing
when bidding for government contracts. The use of domestic preference is
not permitted by the law (except for procurement of goods and services of
the information technology sector and, even in such case, locals will have to
offer a bid that matches or beats the winning bid to get the award).
Equivalent.
14. Performance
Security
Article 56 of law
8.666/93
Note: When required in the bidding documents, performance security is
normally equivalent to 5% of the contract amount and it can go up to 10%
in case of risky bids. Performance securities can be presented in one of the
following formats: cash, government debts bonds, insurance bond, or bank
guarantee.
Equivalent.
15. Notification of
Award
Article 61 of law
8.666/93 and
mandatory use of
procurement
information
systems
Note: All awards are published in the internet (Comprasnet in the case of
federal government and BEC/SP and e-negociospublicos.com.br, in the
case of São Paulo). In addition, a summary of all contracts signed by the
government must be published no later than the fifth business day of the
month following the award (also available in the internet).
Equivalent.
15. Comparison of
bids
Law 123/2006 Note: The only issue worth mentioning is that law 123/2006
introduces a tie-breaking criterion that favors small and medium
enterprises4 in the context of competitive public procurement.
Specifically, any bid from a qualified (i.e., bidding document
responsive) SME bidder that is equal to or within 10% of the lowest
priced proposal when the latter was submitted by a qualified non-
SME bidder (5% in the case of reverse auctions) will be considered
as ―tied‖ with it. The SME bidder(s) in question will then be given
the opportunity to, if they so desire, re-issue a price proposal that is
lower than the originally-lowest priced bid, in order to win the
Equivalent.
4 The law refers to SMEs as micro and small enterprises. Micro enterprises are defined as those with annual revenues of up to R$240,000 (about $133,000); small
enterprises are defined as those with annual revenues above R$240,000 and up to R$2.4 million ($1.3 million).
23
contract.
16. Settlement of
Disputes
Sub-indicator 8(b), Page 76. Equivalent.
17. Terms of
Payment
Article 40 of law
8.666/93 Note: Payment must take place within 30 days of invoice receipt.
Suppliers are entitled to receive compensation in the event of
payment delay. Payments for works are based on measurements that
take place according to the work plan. Payments for goods are made
after delivery and acceptance.
Equivalent.
Review of specific clauses on São Paulo’s standard bidding documents and GCCs
1. Language of Bid
Bids should be prepared in Portuguese language. Comments
2. Bid Submission Form
and Price Schedules
The bid submission form has to include name, address, taxpayer identification number, name
and number of the bidding process, brief description of the scope of the works, total price and
bid validity.
Price schedules need to have the bill of quantities with unit prices.
Equivalent.
3. Bid Prices and
Discounts
Bidders are required to submit the total price for the goods, works or services, including taxes,
fees, levies, insurance, transportation and any other costs incidental to have goods, works and
services delivered to the final destination. For procurement of goods, bids are invited on terms
similar to the INCOTERM DDP. For procurement of works, bidders are required to quote unit
prices and such prices to include all duties, taxes and other levies.
Not equivalent.
4. Submission, Sealing
and Marking of Bids
For reverse auctions, bids are submitted electronically using the internet. For the other
methods, particularly for procurement of works, bids will be hand-delivered at the venue of
the opening ceremony, at the date and time specified in the bidding documents.
Equivalent.
24
5. Late Bids For reverse auctions, the information system will not allow bidders to submit a bid after the
deadline. For the other procurement methods, late bids are rejected.
Equivalent.
6. Contractor’s
Responsibilities
Contracts for works have a long and detailed list of contractor’s responsibilities as follows:
Correction of defects in the works and services delivered during the defects liability
period, which is set at five years after issuance of the completion certificate
Contracting insurance against civil liability, work-related accidents, physical accidents
Contractor is liable for work accidents not covered by insurance
Surveillance of the site of works
To inform the employer of the name and position of all workers
To store and keep materials that will be used to execute the contract
To ensure that workers follow safety and hygiene regulations
To appoint a representative who will be the contact person with the employer
To make and display a billboard with information provided by the employer about the
contract
To provide free access to the site of works as well as to provide any requested information
to supervisors appointed by the employer
To carry required labor and social security documentation for all workers
To be liable to damage caused to the employer or to a third party during execution of the
contract
To pay for utilities used in the site of works
To familiarize with the conditions of the site of works
To oversee the professional and personal conduct of workers and forbid drink of alcoholic
beverages
To replace personnel at the request of the employer
To provide uniform to workers
To train workers on prevention of fire accidents
To warn the employer in writing of unforeseen situations during contract execution
To provide prompt medical assistance to workers involved in accidents
Equivalent.
top related