12/8/2024
Public procurements are essential procedures for the public sector to effectively apply its resources.
In June 2024, the Office of the Comptroller General (“CGU”) published the “Practical Guide to Contracting in Public Calamity Situations” (“Guide”). According to the CGU, the main purpose of the Guide is to assist officials in correctly applying public resources, increasing the efficiency of processes, enhancing the results of governmental actions and ensuring greater effectiveness in responses and reconstruction actions.
The CGU published the Guide based on Provisional Measure No. 1,221 of May 17, 2024, issued by the federal government (“PM”), which provided for “exceptional measures for the acquisition of goods and contracting of works and services, including engineering services, aimed at addressing the impacts resulting from a state of public calamity“, in response to the floods that occurred in the State of Rio Grande do Sul.
The PM sets forth the rules applicable in cases of public calamity, that consist in abnormal situations caused by disasters that result in damage and losses, substantially compromising the public sector’s response capacity when formally declared by the Head of the Executive Branch of the State, Federal District or Federal Government.
The Guide serves as a step-by-step manual for public officials intending to undertake procurements based on the PM, without incurring penalties resulting from infringement of the applicable laws and regulations.
The Guide is divided into seven steps that oriented the decision-making process: (i) direct hiring; (ii) contracting planning (preparatory phase); (iii) supplier selection; (iv) contract management; (v) price registration system; (vi) transparency; and (vii) penalties.
According to the Guide, the main innovations brought by the PM are:
“(i) the possibility of waiving procurement lifting the requirements of the Public Procurement and Contracts Law (Law No. 14,133/2021);
(ii) the exemption from preparing procurement planning to carry out the waiver of procurement in a simplified manner;
(iii) the reduction by half of the minimum deadlines provided for in Law No. 14,133/2021 for the submission of proposals and bids in procurements or direct electronic contracting;
(iv) the extension of contracts beyond the deadlines established in the former Procurement Law (Law No. 8,666/1993) and Law No. 14,133/2021 for a maximum of twelve months from the contract’s termination date;
(v) the promotion of value increases of up to 100% in existing contracts entered into before the events that led to the public calamity;
(vi) the permission of increases or reductions of up to 50% in contracts entered into under the terms of the PM, while the general rule is 25%;
(vii) the possibility of entering into a verbal contract under the terms of Law No. 14,133/2021, provided its value does not exceed R$ 100,000.00 in situations where urgency does not allow the formalization of the contractual instrument; and
(viii) the possibility of adopting the special regime for price registration.”
The Guide has also two attachments: a checklist for waiving purchases of goods and/or services and a risk and control matrix directed at procurements resulting from a state of public calamity. This matrix presents risk events arising from these procurement procedures (such as irregular links among companies that submit budgets, irregular qualification, collusion among bidders etc.) as well as their causes, consequences, preventive measures, and contingency measures.
It is also noteworthy that the PM ensures the transparency of contracts entered by providing for their registration and availability on the National Public Procurement Website (PNCP) within 60 days, providing society with power to control and monitor contracts entered during these specific occasions.
With the publication of the Guide, officials have significant support for decision-making in times of calamity.
On the other hand, the Guide is an important instrument for suppliers as it clarifies the limits in cases of calamity, potentially avoiding liabilities that could affect the business with the public sector.
The Antitrust, Compliance, and Regulatory team at L.O. Baptista Advogados is available for any clarifications.
Co-authored by: Patricia Agra Araújo, João Pedro Marques, Laura Silva Oliveira and Mateus Rodrigues Batista
