By José Guilherme Giacomuzzi – Assistant Professor of Law, The Federal University of Rio Grande do Sul, Porto Alegre, RS, Brazil; S.J.D., George Washington University Law School, Washington, D.C., USA (2007)
Brazil has been enacting many legal norms to tackle the Covid-19 pandemic since the Secretary of Health decreed Administrative Rule 188 on February 3rd, 2020, which officially declared an “emergency in public health.” (For all Brazilian legal norms on Covid-19, see the official site here.)
In what follows, I will briefly refer to and review a few norms that deal with government procurement law.
The most critical norm is Law 13,979, promulgated on February 6th, 2020, which has been modified by successive provisional measures as the pandemic evolves and requires normative guidance. According to the Brazilian Constitution, article 62, “provisional measures with the force of law” may be adopted by the President in “important and urgent cases” and shall be submitted to the National Congress immediately; if not converted into law within 120 days, the provisional measures “shall lose effectiveness from the day of their issuance,” under paragraph 3 of article 62. (An English version of the Brazilian constitution, though not updated, is available here.)
Law 13,979 addresses the problem of government contracts in article 4. It temporarily derogates the Federal Law # 8,666, from June 23rd, 1993, known as the General Law of Bids and Administrative Contracts (GLBAC), which contains the basic general norms for bidding and procurements dealing with public works, services, purchases, and disposals (for an overview of government procurement in Brazil in English, though again not updated, see here).
Legal academics and lawyers in practice have been considering the GLBAC ineffective and too costly to private contractors and the government. Notwithstanding the more than one hundred bills proposed since 1993 to partially or wholly alter it, the GLBAC is still in force.
The main purpose of Law 13,979 is to make public bidding and contracts more flexible during the pandemic. I shall mention what I see as the essential norms contained in Article 4 of Law 13,979.
Article 22, Subsection XXXI, of the Brazilian Constitution states that, “except for the cases specified in the law, public works, services, purchases, and disposals shall be contracted by public bidding proceedings.”
Article 24 of GLBAC lists 35 circumstances which are exempt from the public bidding proceedings. Two of them involve caps in estimated prices: Subsection I exempts from bidding all purchases of engineering goods and services up to BRL 33,000 (around USD 6,000). Subsection II exempts from bidding all purchases of goods and services other than engineering up to BRL 17.600 (around USD 3,300).
However, article 4 of Law 13,979 creates an unlimited exemption to the rule of mandatory public bidding for all purchases of goods, services, including engineering, and inputs, provided that they are intended to address Covid-19 health necessities. Therefore, during the pandemic, no caps apply at all.
The idea is to allow the government to buy medicine, equipment, and other goods and services without public bidding. The burdensome requirements of the Law 8,666 were altered, but not eliminated.
Moreover, auctions to purchase goods for combating Covid-19 will have their durations cut in half, with public audiences excluded.
Finally, purchases of goods and services are not restricted to new equipment (as in the GLBAC), provided suppliers hold responsibility for the goods’ use and functioning. The norm’s primary goal is to permit purchases of used respirators.
As one can see on the news, some Brazilian mayors and governors face investigations and charges for buying super-overpriced respirators or even misappropriation of public funds.
During the Senate debates over Provisional Measure 926, senators called attention to the importance of the many external controlling institutions (such as the Controlling Office and Prosecution system, which in Brazil is independent of any authority) in supervising the application of the Law 13,979.
