Administrative Law - updated on Mar 27 at 11:00 am
New (and big) changes to emergency public procurement
The current COVID-19 pandemic crisis has been generating a legislative momentum in order to meet arising emergency needs. In this scenario, the Federal Government has promoted new amendments in rules for government acquisitions. Enforcement of these rules is restricted to COVID-19 crisis period. These legislative initiatives seek to grant faster contracting conditions and greater security for public agents who are working to provide supplies and services as quickly as the crisis demands.
On Saturday, March 20, the Federal Government amended the Law No. 13,979/2020 (Coronavirus Law) – which was in force for only 40 days (published on February 7, 2020) – through the Provisional Measure No. 926. While the Provisional Measure has immediate effectiveness, its content is subject to approval by the Brazilian National Congress. The Provisional Measure establishes a particular legal framework for COVID-19 emergency. In following paragraphs we will highlight some features introduced by the Provisional Measure vis-à-vis the original text of the Coronavirus Law and the Public Procurement Act (Law No. 8,666/1993).
- Inputs: The Provisional Measure makes it clear that public agencies may procure any inputs required to face COVID-19 emergencies through procurement waivers. Originally, the Coronavirus Law made it possible to waive bidding requirements only for “health” inputs purchases.
- Absence of eligibility requirements: New rules authorize contracting companies declared ineligible or suspended from contracting with government, as long as it is proven that such companies are the only suppliers of a certain good or service. The emergency legal framework also dismisses the submission of tax and labor good standing certificates. Companies must still submit Social Security good standing certificate, proving compliance with obligations relating to the employment of underage professionals provided for in Article 7, XXXIII, of the Brazilian Constitution.
- Second-hand purchases: It is possible to purchase used goods as long as the supplier is responsible for the full conditions of use and operation of the goods (there is no restriction on imported second-hand goods).
- Inclusion of engineering services: Provisional Measure No. 926 allows procurement of engineering services through the emergency special regime. The previous text of the Coronavirus Law did not include this type of service as an object of emergency procurement processes.
- Characterizing emergency: While in regular public procurement process public bodies must duly demonstrate the urgent character of emergency contracting, in contracts to face COVID-19 epidemic the emergency is presumed.
- Flexible procedures: Provisional Measure No. 926 removed the requirement of presenting Preliminary Assessments when contracting common goods and services. In addition, both the Reference Instrument and the Project will also be simpler than the ones in regular procurement processes.
- Prices: Exceptionally, it is possible to waive the obligation to survey prices, based on justification by a competent authority. Public bodies may contract for higher prices stemming from justifiable fluctuations even when it carries out a price survey.
- Deadlines: New rules cut bidding procedures deadlines by half both in electronic and on-site trading sessions. Besides, appeals will not suspend the continuity of the process and further hiring. Contracts under this framework will have a six-month term that is extendable for successional terms as long as there is an emergency need.
- Contract amendments: According to emergency rules, contract may provide that the contractor has to accept additions or deductions on the object up to 50 percent of the amount originally set (Public Procurement Act provides for a limit of 25 percent in general, and 50 percent only for repairing building or equipment).