RESTRICTED
WORLD TRADE S/WPGR/W/11/Add.3
2September 1996
ORGANIZATION
(96-3432)
Working Party onGATS Rules
COMMUNICATION FROM BRAZIL
Response tothequestionnaire ongovernment procurement ofservices
Thefollowing communication isbeing circulated attherequest ofBrazil toMembers ofthe
Working Party onGATS Rules.
_____________
I. EXISTING PROCUREMENT REGIMES
Where aMember 'sprocurement regime isdifferent forcentral government entities, sub-central
government entities, andother entities, suchaspublic undertakings (e.g.public utilities), it
would beuseful ifthesedifferences werespecified under eachoftheheadings indicated below.
Definition
1. What isthedefinition ofgovernment procurement employed incompleting thisquestionnaire?
Bidding onGovernmental Contracts isaformal administrative act,practised inanysphere of
thePublic Administration. Itsobjective istoguarantee theobservance oftheConstitutional
principal ofisonomy orequality before thelawtopermit theselection ofthemostadvantageous
proposal fortheAdministration (Sole Paragraph ofArticle 4combined withArticle 3ofLaw
No.8666 dated 21June1993).
Administrative Structure
2. Howaregovernment procurement activities administered? Towhatextent areprocurement
activities centralized? Please specify theidentity ofanycentral procurement agencies and
theirrespective responsibilities.
Thebidding process isadministered directly bythepublic Institutions interested, obeying the
legislation inforceestablished bytheUnion, inaccordance withthatprovided forintheFederal
Constitution, dated 5October 1988, which says: "ItfallstotheUnion exclusively tolegislate
on:General Norms forBidding andContracting, inallitsforms forthePublic Administration,
direct andindirect, including theFoundations instituted andmaintained bypublic authority,
inthevarious spheres oftheGovernment andenterprises under itscontrol". TheMinistry
oftheFederal Administration andState Reform -MARE, isincharge oftheelaboration of
theNorms andRegulations about thismaterial.S/WPGR/W/11/Add.3
Page2
Laws andRegulations inForce
3.(a) Please specify thelaws, regulations, rules, guidelines, decrees, decisions andother measures
governing government procurement. What isthescope oftheirapplication? Inparticular,
please describe anyexemptions thatexist. Please provide abrief summary ofthecontent
ofeachofthese measures.
Oriented bytheprinciples oflegality, impersonality, morality, equality andpublicity, defined
byArticle 37oftheFederal Constitution, LawNo8666 dated 21June 1993, withthe
modifications made byLawNo.8883, dated 8June 1994 establishes thegeneral norms
concerning thismaterial inthecontext oftheFederal Authority, theStates, theFederal District
andtheMunicipalities. Also subordinated tothislaw, besides theOrgans ofDirect
Administration, aretheSpecial Funds, theAutocracies, thePublic Foundations, Public
Enterprises, theSocieties ofMixed Economy andother entities directly orindirectly controlled
bytheUnion,States,FederalDistrict,andMunicipalities.Theinvitationalinstrumentisdefined
andinstructedbytheinstitutioninterestedinthebidding,servingasthepublicagent,constituting
thenormative division fundamental totheprocess, within theforce ofthelaw,hierarchically
subordinated.
(b) Does theprocurement regime distinguish between theprocurement ofgoods andservices?
Ifso,thenhowistheapplication ofrulesdetermined incases ofjointprocurement involving
bothgoods andservices?
Thesame legislation applies totheacquisition ofgoods andservices, without distinction.
Procedures applying toGovernmental Bidding
4.(a) What procedures arefollowed intheprocurement process?
Firstofall,itshould beunderscored thatthebidding process isaconstitutional requirement,
whichaimstoassureequalconditionstoallcompetitorswithexplicitclausesregardingpayments,
andwithrequirements fortechnical andeconomic qualification indispensable toguarantee the
fulfilling ofobligations (Clause XXIofArticle 37oftheFederal Constitution). Thebidding
process issubordinated tothecompletion ofstages withthefollowing sequence:
1. basic project;
2. executive project;
3. execution ofservices.
Inaccordance withthefirstparagraph ofArticle 7ofLawNo.8666/93: "The execution of
eachstage shallbeobligatorily preceded bytheconclusion oftheevaluation, bycompetent
authority, ofthework relative totheprevious stages, theaccomplishment oftheexecutive
project, which maybedeveloped concomitantly withtheexecution oftheworks andservices,
whenever thisisalsoauthorized bytheAdministration."
"Paragraph 2-Works andServices mayonlybebidupon whenever:
I-there isabasic project approved bycompetent authority andavailable forexamination by
theparties interested inparticipating inthebidding;S/WPGR/W/11/Add.3
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II-there isadetailed budget inspreadsheet thatexpress thecomposition ofalltheunitary
costs;
III-there isprovision ofbudget resources thatassure thepayment oftheobligations arising
from theworks andservices tobeexecuted inthefiscal yearincourse, according tothe
respective chronograph;
IV-theproduct hoped forbythebidding iscontemplated intheobjectives established inthe
Multi-year Planastreated intheArticle 165oftheFederal Constitution, whenever thisisthe
case.
Paragraph 3ofthesame Article: "The inclusion intheobject ofthebidding, theobtainment
offinancial resources from whatsoever origin foritsexecution, isforbidden..."
Paragraph 4:"Itismoreover forbidden, toinclude intheobject ofthebidding, theprovision
ofmaterials andservices without specifying quantities orwhen suchquantities donotcorrespond
totheactual projections ofthebasic orexecutive plan."
Paragraph 5:Therealization ofcompetitive bidding whose object includes goods andservices
whose trademarks arenotsimilar incharacteristics andexclusive specifications isforbidden,
except inthecaseinwhich itistechnically justifiable, orwhenever theprovision ofsuch
materials andservices wasmade under aregime ofcontracted administration, foreseen and
discriminated atthetimeoftheinvitational act.
Theprocedures forbidding ongovernmental services maydiffer inaccordance withthedegree
ofopenness oftheinvitations:
- public: allinterested parties maysubmit bids;
- selective: selected bidders mayparticipate topresent theiroffers; and
- private contract (onesolebidder); bywhich theauthority contracts individual suppliers,
andsometimes onesolesupplier.
(b) Under whatcircumstances aredifferent procedures used? Forinstance, ifthemethod used
depends onthevalue oftheprocurement, thethresholds should begiven.
Public bidsmaytakeplace in5(five) different forms.
1. Competition
2. Estimate taking
3. Invitation
4. Contest and
5. Auction (does notapply toservices)
Inaccordance withArticle 22ofLawNo.8666/93, thesemodalities aredefined inthefollowing
way:
"Competition isthemodality ofbidding among anyinterested parties, which intheinitial phase
ofqualification, prove thattheyhavetheminimum necessary requirements tomeetthose called
forinthecallforbids."S/WPGR/W/11/Add.3
Page4
"Estimate taking isthemodality ofcompetition among interested parties dulyregistered or
whohavequalifications toberegistered bythethirddaybefore theproposals arereceived,
observing thenecessary qualifications.
"Invitation isthemodality ofbidding among interested parties ofthebranch pertinent toits
object, registered ornot,chosen andinvited with aminimum number ofthree bythe
administrative unit,which shallfixinanappropriate place acopyofthecallforbidsandshall
extend toallotherregistered parties inthecorresponding specialty whomanifest interest within
24hours preceding thepresentation oftheproposals.
"Contest isthemodality ofcompetition between anyinterested parties fortheselection of
technical scientific, orartistic services, through theestablishment ofprizes orremuneration
ofthewinners, according tothecriteria inthepublished callforcontestants intheOfficial
Gazette withaminimum antecedence of45(forty-five) days."
Thepresent modalities aredetermined infunction oftheestimated value ofthecontract,
discriminated inthefollowing way:
- forworks andengineering services:
invitation -uptoR$126,658.40 (onehundred twenty-six thousand, sixhundred
fifty-eight reaisandforty centavos);
estimate taking -uptoR$1,266,584.03 (onemillion, twohundred sixty-six thousand
fivehundred eighty-four reaisandthree centavos); and
competition -above R$1,266,584.03 (onemillion, twohundred sixty-six thousand
fivehundred eighty-four reaisandthree centavos).
- forpurchases andother services:
invitation -uptoR$31,664.60 (thirty-one thousand, sixhundred sixty-four reaisand
sixty centavos);
estimate taking -uptoR$506,633.61 (fivehundred sixthousand sixhundred thirty-
three reaisandsixty-one centavos);
competition -above R$506,633.61 (fivehundred sixthousand sixhundred thirty-three
reaisandsixty-one centavos).
ThesevaluesarecorrectedautomaticallybytheGeneralIndexofPricesoftheMarket("IGPM"),
withthesame periodicity andproportion asthis,taking asthebasepoint themonth of
December 1991. Thenewvalues arepublished bytheExecutive Powers intheFederal Gazette
oftheUnion, without considering fractions smaller thanR$1.00(One Real).
Forsome cases, theLawdispenses thebidding process, asdescribed inthediverse paragraphs
ofArticle 24oftheLawNo.8666/93.
ByArticle 25ofthesame law:"Itisnotnecessary torequire thebidding process when
competition isunfeasible, especially:S/WPGR/W/11/Add.3
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I-...
II-tocontract thetechnical services enumerated inArticle 13ofthislaw,ofasingular nature,
withprofessionals orbusinesses ofwellknown specialization, ineligibility isforbidden for
services ofpublicity anddivulgation;
III-forcontracting professionals ofwhatever artistic sector, directly orthrough anexclusive
agent, aslongastheyareconsecrated byspecialized critics orbypublic opinion.
Paragraph 1-Theprofessional orbusiness ofwellknow specialization, isconsidered tobe
such inhisorherfield ofspecialization, depending onprevious performance, studies,
experiences,publications,organisation,equipment,technicalstaff,orotherrequirementsrelated
tosuchactivities, permitting inference thathis/her work isessential andunquestionably the
most adequate forthefullsatisfaction oftheobject ofthecontract.
Paragraph 2-inthecaseofthisArticle andinanyevent inwhich there isdispensation ofthe
callforbids, ifoverpricing isproved, theprovider ofgoods orservices willrespond jointly
fordamages caused totheFederal Treasury withthepublic agent responsible, without prejudice
toother applicable legalsanctions."
(c) What arethetimelimits forsubmission ofbids?
Thesecond paragraph ofArticle 21ofLawNo.8666 defines these limits, which varyfrom
5to45days, inaccordance withthemodality ofthebidding.
Publication oftheCallforBids
5.(a) How areintended procurements publicised? Areinvitations totender published? Ifso,
where, andinwhat languages?
Theproposed callsforbidding aremade public bymeans ofproclamations, instruments of
invitation, published intheOfficial Gazette oftheUnion, oftheState, oroftheFederal District,
andinadaily newspaper ofwide circulation intheState orMunicipality where there are
interested parties.
Whenever thecallforbidsisofinternational ambit, theinvitation ispresented alsointhe
language ofthecountry where divulgation occurs.
(b) Dotheextent andform ofpublicity differ according totendering procedures applied and/or
onthevalue ofprocurement?
Forallmodalities ofbidding -except invitation -aresume oftheproclamation should be
published. TheLawdoesnotspecify thecontent thatshould make uptheresume ofthe
proclamation which istobecirculated. Nevertheless, there aresixelements thatshould be
included: (I)Themodality ofthecallforbids(competition, estimate taking, contests orauction);
(II)asynthesis ofitsobject, defining thenucleus; (III)theregime ofexecution: (IV)typeof
bid:(lowest price, besttechnique, technique andprice, orhighest offer) (V)dateandhour
ofthejudgement session: and(VI)thelocation where theinterested parties mayobtain the
entire textoftheinvitation andother information regarding thecompetition.S/WPGR/W/11/Add.3
Page6
(c) What details oftheintended procurement arenormally published? Isthere aminimum set
ofinformation thatisrequired tobepublished? Ifso,please specify.
Thedetails referred tomayinclude adescription ofservices, initial andfinaldatesoftheoffer,
conditions forparticipation, identification oftheacquiring organs, enquiry point, plans for
thecallforbids, withnotices regarding contracts, etc.
Seethereply contained intheprevious item5(b).
(d) Arethere anycharges forobtaining thefullsetoftender documents? Ifso,please specify
anddescribe howthese charges areset?
Forthequalification ofbidders, there arenocosts, except relative totheprovision ofthe
Proclamation, when requested, andother documents which accompany it,limited tothevalue
oftheeffective costofgraphic reproduction (Paragraph 5ofArticle 32).
(e) Areelectronic means usedtoadvertise procurement opportunities? What isthenature of
systems thatareinplace? Aredifferent tendering provisions applied tocontracts advertised
inthismanner? Ifso,please describe.
Thepresent system ofdivulgation doesnotusethese electronic means. Nevertheless, there
isaproject being elaborated bytheMinistry ofFederal Administration andReform -MARE,
thatforesees theimplantation ofaSystem ofElectronic Divulgation ofcallsforbids-SIDEC.
Requirements forPotential Bidders
6.(a) Arethere registration, residence orother requirements forpotential suppliers?
AsperArticle 34ofLawNo.8666/93, theorgans andentities ofthePublic Administration
should maintain organized registers ofqualified potential bidders andproviders ofservices,
according toregulations, which register shallhaveamaximum validity ofoneyear. Articles 34
to37andtheirparagraphs, ofthecitedlawtreatexclusively oforganized registers.
Previous registry, however isrequired onlyforthe"estimate taking modality". Inaneffort
toimprove thepresent system ofregistry, theGovernment, through theMinistry ofFederal
AdministrationandReform-MARE,isimplantingtheUnifiedRegistryofSuppliers("SICAF")
(b) What isthenature ofanyconditions forparticipation required from suppliers -such as
financial guarantees, commercial standing andtechnical qualifications? Dotheconditions
ofparticipation varyaccording tothenature ofthetender process and/or thevalue ofthe
intended procurement?
Foracandidate toqualify forthebidding itisnecessary: (Article 27)
- juridical qualification;
- technical qualification;
- economic andfinancial qualification; and
- tobeuptodatefiscally.S/WPGR/W/11/Add.3
Page7
(c) Dothere existlistsofapproved suppliers? Ifso,what aretheprocedures forchecking the
capability offirms applying forinclusion ontenderers 'mailing lists? Arelistsofapproved
suppliers, ifany,regularly reviewed/updated?
Thisquestion hasalready beenpartially answered by6(a). Inaddition itshould beobserved
thatthequalification ofnewpotential candidates isalways possible, aslongasthelegal
requirements ofLawNo.8666/93 aremet,some ofwhich havealready beenmentioned in
thisquestionnaire.
Criteria forassessing bidsandawarding contracts
7.(a) What criteria aretaken intoaccount intheaward oftenders? Arecriteria foraward of
contracts made available inadvance topotential suppliers?
Thecriteria utilized intheevaluation ofproposals areestablished anddivulged beforehand,
observing thetypes ofbidding, constituted according totheLawNo.8666/93, which are:
1. thatofthelowest price -thebidder whopresents thelowest price willbethewinner,
ifallthespecifications oftheproclamation oftheinvitation arefollowed;
2. thatofthebesttechnique;
3. thatofbesttechnique andprice; and
4. thatofthebestbid,oroffer(only applies tocases oftransfer ofgoods orconcession
oflegalrighttouse).
(b) Isprocurement subject toanyoffset provisions, suchaslocal content, technology transfer
orcountertrade requirements?
With respect tothis, thelawdoes notestablish mechanisms with aview toobtaining
compensation/correspondence between thegovernment andthirdparties.
(c) Ispreference given toanyparticular enterprises orgroup ofenterprises? Ifso,please specify.
No.
(d) Dotheprocurement criteria differ according tosector orregion oftheeconomy?
There isnodifferentiation inthecriteria ofgovernment bids,infunction ofgeographic location.
(e) What isthemargin ofchoice ordiscretion allowed tothepurchasing authority? What does
theextent, ifany,ofdiscretion allowed depend upon?
Themargin ofchoice orfreewillmayberelated assuch:
(i) theimportance given toeachcriterion;
(ii) themargin ofpreference orspecific criteria; and
(iii) "value ofscope", above which higher authority must intervene.S/WPGR/W/11/Add.3
Page8
Thefreewilloftheauthority mayvaryif:
(i) there areautomatic bids, within which thecontract issigned onthebasis of
predetermined criteria instead ofsimply price orprice andanother criterion;
(ii) discretionary procedures thatinvolve theacceptance ofthatoffermostadvantageous
totheapproval ofthecontract based onnumerous criteria, some ofwhich are
predetermined, butwhich ingeneral, leave theauthority acertain degree ofchoice;
and
(iii) negotiated offers, inwhich theauthority freely negotiates theconditions ofthecontract.
With reference tothemargin ofchoice intheprocess ofjudging theproposals, theLaw
No.8666/93 establishes thatsuchshould beobjective, carried outinconformity tothepre-
established criteria intheinvitation proclamation, andinaccordance withfactors referred to
exclusively intheproclamation, inorder topermit transparency andthepossibility of
verification, onthepartofthebidders andtheorgans ofcontrol (Article 45oftheLawcited).
Registration ofProposals andApproved Contracts
8.(a) How aretenders received, registered andopened?
Theopening oftheproposals ofthequalified competitors inthebidding isdonebypublic act,
previously established, theminutes ofwhich areregistered withcircumstances andissigned
bymembers ofthecommission andbythecompetitors whoarepresent. These proposals may
onlyberevealed aftertheopening oftheenvelopes containing thedocumentation relative to
thequalification ofthecompetitors anditsconsideration hasbeen made. Incaseof
disqualification,therespectiveproposalsarereturnedtotheinterestedpartiesinclosedenvelopes.
(b) Areentities required topublish details ofthecontracts awarded and/or notify unsuccessful
tenderers?
Thecontracts arepublished insummary form intheofficial press, acondition indispensable
foritsefficiency, bythefifthdayofthesubsequent month aftersigning, nomatter whatits
value.
(c) Areentities required topublish, orprovide tounsuccessful bidders, pertinent reasons why
theirbidwasrejected?
Theactual judgement itself isapublic act,accompanied bytheinterested parties without
restrictions ofaccess bythegeneral public, without prejudice toward theformal explanations
owed thecompetitors whowere passed by.
Treatment conceded toNational andForeign Bidders forRendering Services
9. What laws, regulations, procedures orpractices accord domestic services and/or suppliers
treatment more favourable thanthataccorded toforeign services and/or suppliers, oraccord
services and/or suppliers ofaMember more favourable treatment thanthose ofanother
Member? Please specify how, ifatall,more favourable treatment isaccorded. Please also
specify theworking definition of"domestic" inrelation todomestic services andsuppliers.S/WPGR/W/11/Add.3
Page9
Inthatwhichreferstothetreatmentdispensedtoforeigncompetitors,Law8666/93inArticle42
Paragraph 4establishes thatforpurposes ofjudgement ofproposals presented byforeign
competitors, theproposals willbeincreased bytheamount oftribute which would fallonly
onnational competitors inthefinalstage saleoperation.
LawNo8666/93 establishes yet,thatinthecaseofequal conditions, ascriteria forgiving
thetiebreaking vote, preference willbegiven togoods andservices produced inthecountry.
Procedures forAudiences andConsideration ofAppeals andComplaints
10. What, ifany, aretheprocedures available forparties, domestic andforeign, tolodge
complaints against theaward ofacontract? Please provide details.
- institutional status: whether challenges areheard byanadministrative tribunal, acourt
oranyother review body;
- timelimits forcomplaints orappeal;
- typeofremedy, ifany,thatmaybegranted.
TheLawNo.8666/93 foresees thepossibility ofadministrative appeals against actswithin
theprocess ofevaluating bids. Besides "appeals" there arealso"representations", and
"solicitation forreconsideration".
Article 109ofthecitedlawdefines itinthefollowing way:
"I-Appeals, within alimitof5(five) dayscounting fromthesummons oftheactorthedrafting
oftheact,incases of:
a) qualification ordisqualification ofthebidder;
b) judgement ofproposals;
c) annulment orcancelation ofthebidding;
d) rejection ofarequest forenrolment inaregistry, itsalteration orcancelation;
e) cancelation ofcontract, thatwhich isreferred toinClause IofArticle 79ofthislaw;
f) application ofthepenalty ofnotification, temporary suspension, orfine;
II-representation, within thelimitof5(five) working daysfrom thecitation ofthedecision
related totheobject ofbidding orofthecontract, ofwhich there isnohierarchical appeal
possible;
III-Request forreconsideration, adecision oftheMinister ofState, orState orMunicipal
Secretary, depending onthecase, when Paragraph 4ofArticle 87ofthisLawapplies, within
tenworking daysofthesummons oftheact.
Paragraph 1-Thesummons fortheactsreferred toinclause I,linesa,b,c,ande,ofthis
Article, excluding those ofnotification andpenalty fordelay, andinClause 111shallbemade
bypublication intheOfficial Gazette, except forthecases foreseen inlinesaandbofClause I,S/WPGR/W/11/Add.3
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iftheproposals ofthebidders arepresent attheactinwhich thedecision wasadopted, when
itcould bemade bydirect communication totheinterested parties anddrafted intheact.
Paragraph 2-Theappeal foreseen inlinesaandbofClause IofthisArticle shallhaveeffect
ofsuspension, thecompetent authority being abletosuspend further appeal, ifthereispresent
sufficient motive andifinthepublic interest tointerpose such.
Paragraph 3-Interposed, theappeal shallbecommunicated totheotherbidders, whocancontest
itwithin 5(five) working days.
Paragraph 4-Theappeal shallbedirected tosuperior authority, through theonewhopractised
theappealed act,andwhich maybereconsidered within 5(five) days, orwithin thissametime,
cause ittobesentup,dulyinstructed, which decision shallbemade within 5(five) working
daysunder penalty ofresponsibility.
Paragraph 5-Noappeal, representation, orrequest forconsideration shallbeinitiated ortake
itscourse unless thedocuments oftheprocess areavailable forviewing bytheinterested parties.
Paragraph 6-When referring tobideffected inthemodality ofinvitation, thetimelimits
established inClauses IandIIandinParagraph 3ofthisArticle shallbe2(two) working days."
Beyondtheadministrativeforum,anybidder,orcontractedindividual,orbusinessmayrepresent
themselvesbeforetheAccountsTribuneorbeforetheorganswhomakeuptheSystemofInternal
Control, against anypossible irregularities arising during thecaseinprocess. (Paragraph 1
ofArticle 113ofthecitedLaw.)
Besides this,theLawprovides thatanycitizen isalegitimate party tooppose aproclamation
forabidwhich isirregular, andthatthisshould occur atleastfivedaysbefore thedatemarked
fortheopening ofthequalifying envelopes, andthattheadministration should judge thisand
respond within 3(three) working days.
II. ADHESION TOMULTILATERAL, REGIONAL AND/OR BILATERAL TREATIES
11. IstheMember party toanyplurilateral, regional and/or bilateral agreements withprovisions
ongovernment procurement? Ifso,please describe therelevant provisions.
No,theydonotparticipate.
III. ECONOMIC IMPORTANCE OFTHE ACQUISITION OFSERVICES
12.(a) Please provide statistics (ifavailable) onthenumber andvalue ofservices procurements
- onbothanaggregate andsectoral basis;
- byorigin ofservices andsuppliers.
Inordertoenhancethecomparabilityofthedata,usetheclassificationsofservicesectorsutilized
inthefollowing document: MTN.GNS/W/120 (10.7.91) inanappropriate aggregation level.
Noinformation available.S/WPGR/W/11/Add.3
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(b) Please provide statistics (ifavailable) onthe
- share ofservices procurement intotalprocurement;
- share ofprocurement ofeachservice intotaldomestic output oftheservice;
- share ofprocurement ofeachservice intotaldomestic consumption oftheservice.
Noinformation available.