New Procurement Law No. 14,133/2021

To contract products and services, the administration needs, in most cases, to carry out a bidding process in accordance with current legislation, currently regulated by Law No. 14,133, of April 1, 2021, called the Law of Public Tenders and Contracts and popularly known as the new Bidding Law.

The new Bidding Law dictates the following objectives for the bidding process:

I – Ensure the selection of the most advantageous proposal for the Public Administration;

II – Ensure equal treatment among bidders;

III – Avoid contracts with inflated prices;

IV – Encourage innovation and sustainable national development.

This law is the result of an evolution that has been occurring since the Federal Constitution of 1988, and has incorporated characteristics of the following regulations:

• Law No. 8,666/1993 (former Bidding Law), regulation that defined all procedures to be carried out in the bidding process, from the request to its approval;
• Law No. 10,520/2002 (Auction Law), law whose motivation was to introduce a bidding modality that would result in greater speed and efficiency in the contracting process, hence the auction;
• Law No. 12,462/2011 (Differentiated Contracting Regime - RDC), regulation that introduced as a major novelty the criterion for judging the highest economic return.

It is noteworthy that the new Bidding Law repeals Laws No. 8,666/1993, No. 10,520/2002 and articles 1 to 47-A of Law 12,462/2011, however, they remain in force until April 1, 2023.

Therefore, Law 14,133/2021 contemplates the most modern in terms of public law.

tenders. Figure 1 summarizes the main characteristics of the regulatory framework for tenders.

Figure 1 – Main characteristics of the regulatory framework for public procurement

As previously presented, several aspects and characteristics of the public procurement process were improved with the publication of the new Public Procurement Law, highlighting the changes and novelties that occurred in the public procurement modalities and in the judgment criteria.

Within the scope of public procurement modalities, Figure 2 outlines the flow of incorporations into Law No. 14,133/2021. It is noted that the Invitation and Price Quotation modalities were extinguished, the Competition, Auction and Contest modalities were absorbed from Law No. 8,666/1993, the auction modality comes from Law No. 10,520/2002 and, as a novelty, there is the creation of the Competitive Dialogue, which we consider to be the great highlight in the sphere of public bidding modalities.

Figure 2 – Flow of incorporations to Law No. 14,133/2021 within the scope of bidding modalities

In summary, the Competitive Dialogue works as follows: the Public Administration develops the alternatives for technical solutions that are most appropriate to its needs through conversations with previously selected bidders. After the alternatives are defined, with the in-depth analysis of experts in the subject, the notice is prepared and the bidders present their final proposals. Therefore, this modality allows the Public Administration to technically improve the product or service that is the object of the contract.

Regarding the judgment criteria, the great highlight is the incorporation of the criterion of the Highest Economic Return of Law No. 12,462/2011 – RDC, as illustrated in Figure 3. This criterion allows the service to be remunerated by setting a percentage that will apply to the savings actually obtained. In other words, it enables the execution of performance contracts and is considered ideal for contracting Energy Efficiency and Renewable Energy services.

Figure 3 – Flow of incorporations to Law No. 14,133/2021, within the scope of the judgment criteria.

It is known that for each bidding modality there is one or more judgment criteria that can be applied. Figure 4 shows the relationship between the bidding modalities and the judgment criteria according to the new Bidding Law. For the Competition, any criterion can be applied, except the Highest Bid, which is exclusive to the Auction. The contest modality only allows the Best Technique or Artistic Content criterion. With the Auction, it is possible to use the Lowest Price and the Highest Discount. In the case of the Competitive Dialogue, the Law does not explicitly state the judgment criteria that can be used, it only informs that the notice will contain objective criteria for selecting the most advantageous proposal.

Figure 4 – Relationship between bidding modalities and judgment criteria according to the new Bidding Law.

That said, it can be said that the new Bidding Law resulted in several positive aspects for the regulatory framework for public procurement, summarized as:

• Updating of a regulation that had several rules linked to the 90s;
• Incorporation of innovations that improve the bidding process (e.g., competitive dialogue);
• Compilation of aspects of the bidding process, previously divided into several laws, into a single document, bringing more practicality to activities (e.g., RDC, Auction Law).

However, change processes naturally also include negative aspects and points for improvement, with the new Law 14.133/2021 it is no different, below are some of these vulnerabilities:

• Difficulty in adapting public managers to the new bidding process rules;
• The evaluation of the competitive dialogue can be subjective, it would be important to have technicians on the contracting party's side for such evaluation;
• The Competitive Dialogue requires massive participation of bidders to guarantee quality;
• In the case of the competitive dialogue, there is concern about the possibility of specific favoritism to one company, due to the history of corruption in the country, thus opening risks of targeted bidding;
• The use of the judgment criterion Greatest Economic Return tends to favor larger companies that really have the capacity to absorb the risk of a performance contract;
• Still within the scope of the Greatest Economic Return, there is still a lack of remuneration for diagnoses and services to quantify the savings.

It is concluded that the new Bidding Law has improved the bidding process, bringing new features and incorporating important aspects of the previous laws, however it presents some weaknesses that require a lot of attention from the Public Administration to avoid illegalities and mistakes in the evaluation of the content technical, ensuring its objectives.

References:

BRAZIL. Law No. 8,666 of June 21, 1993. Institutes standards for public administration bids and contracts. Official Gazette of the Union: Brasília, DF, July 6, 1994.

BRAZIL. Law No. 10,520 of July 17, 2002. Institutes a bidding modality called auction, for the acquisition of common goods and services. Official Gazette of the Union: Brasília, DF, July 30, 2002.

BRAZIL. Law No. 12,462 of August 4, 2011. Institutes the Differentiated Public Procurement Regime – RDC. Official Gazette of the Union: Brasília, DF, August 10, 2011.

BRAZIL. Law No. 14,133, of April 1, 2021. Public Procurement and Contracts Law. Official Gazette of the Union: Brasília, DF, June 10, 2021.