Publications - 26/04/21

Main Changes Introduced by the Brazilian New Bidding Law, Law Nº 14.133/2021

On April 1st, 2021, Law Nº 14.133/21, The Brazilian New Bidding Law, was sanctioned and came into force on the date of its publication. However, the new regulation establishes a transitional rule. In the two years following the publication of the new law, the Public Administration may still have biddings according to the established in the previous legal regime, provided in Law Nº 8.666/93, if it so wishes. The purpose of this determination, as stated, is to gradually grant the transition between the old and new provisions on the topic.

The recently created law replaces, after this biennium of transition, the Brazilian General Bidding Law, Law Nº 8.666/93, The Brazilian Auction Law, Law Nº 10.520/02, and the Brazilian Differentiated Procurement Regime, Law Nº 12,462/11, as well as deals with various topics related to public procurement.

The new standard establishes rules for the federal, state and city levels, and dictates five types of biddings: concorrência (competition), concurso (tender), leilão (auction), and diálogo competitivo (competitive dialogue). The tomada de preço (pricing) and convite (invitation) modalities no longer exist under the new rules.

In competitive dialogue the selected bidders, chose by objective criteria, will have to present a final proposal after the dialogues are closed. This new bidding modality will be restricted to contracts that the public administration aims to engage with an object that involves: (i) technological or technical innovation, (ii) impossibility for the agency or entity to have its needs met without the adaptation of solutions available on the market, and (iii) the impossibility of technical specification to be defined with sufficient precision by the Public Administration.

Arbitration as the dispute resolution option and the preferential use of the Building Information Modeling (BIM) for construction bidding procedures are equally significant changes established in the new regulation. The BIM is a kind of technology that connects all parties involved in a specific construction project, providing information that can be accessed and worked on simultaneously, so that each party can contribute with their respective area of expertise during the development and execution of the project, essentially all its phases.

Another significant change was the addition of a specific chapter in the Brazilian Criminal Code that deals with crimes in biddings and administrative contracts, establishing criminal sanctions for several criminal types related to the theme, such as: illegal direct contracting, frustration of the competitive character of the bidding,  sponsorship of improper hiring, among others.

Other innovation was the creation of the Portal Nacional de Contratações Públicas (National Public Procurement Portal), a database that will be responsible for gathering information regarding bidding of the three levels of federative entities (federal, state and city levels), with the objective of granting more transparency to public contracts.

The Brazilian New Bidding Law represents an important instrument of renewal, as it unifies sparse norms, contained in different legal diplomas, addressing topics that were the target of constant criticism under the regime of Law 8.666/93, and turning into law consolidated understandings from the past few years of the Tribunal de Contas da União (Brazilian Federal Accounts Tribunal).

This article is the initial general and introductory note on the topic, the first in a series of articles that will address, in more depth, the various changes brought by the Brazilian New Bidding Law.

Our article on the Criminal Aspects of the Brazilian New Bidding Law is available at: http://dprlaw.com.br/publications/criminal-aspects-of-the-brazilian-new-bidding-law-law-n-14-133-2021/?lan=_en