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Brazilian Congress approves new public procurement law

14/12/2020

On December 11, 2020 the Brazilian Senate finally approved the bill of a new public procurement general law, which will substitute Law nº 8,666/1993 (“New Public Procurement Law“), and will be applicable to public entities in Federal, State and Municipal levels. State controlled companies, however, will only be reached by the new definitions of crimes related to public procurement, since they are subject to a specific legal regime set forth by Law n º13,303/2016.

The Brazilian President has 15 days to sign the new legislation and/or impose vetoes to the text approved by the Congress – if such deadline expires without any of such acts, the law is automatically approved in the terms defined by Brazilian Congress. We have been following closely and collaborated with the discussions of the new legislation and will keep you informed of the next developments in the matter, in special potential presidential vetoes.

This is a long waited update on the public procurement legislation, since the current law dates from 1993 and quickly became outdated, in special due to developments in technology, ways of providing goods and rendering services and changes in the economic landscape.

One of the most relevant aspects of the New Public Procurement Law is that it results in a new consolidation of several applicable rules on public procurement, both by including elements of other legal norms and also by codifying relevant case law – which also has a stabilizing effect, since decisions by courts and authorities are more easily subject to changes.

In addition, the New Public Procurement Law also sets forth completely new rules and concepts, some of them aiming to make procurement procedures more adequate to current times. An important example is the creation of the “competitive dialogue” modality of procurement, under which the Public Administration will be able to conduct discussions with bidders (previously selected based on objective criteria) in order to develop different alternatives to attend to its needs. After such discussions, the bidders will need to present their final proposals. Despite of its limited scope, being solely to procurement procedures for works, goods and/or services related to technical or technological innovation without market available solutions, this may be a game changer for the hiring of complex goods and services, becoming a game changer for industries such as IT and Life Sciences.

We are preparing materials to assist in the comprehension of the new rules and will hold events to discuss the New Public Procurement Law in a comprehensive way (the invitation for the first of such events will be sent soon).

Meanwhile, our Public Law team is available to assist you and discuss the consequences of this legislative change.

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