Assessment of the Procurement Systems of the Brazilian Federal Government and the Brazilian State of São Paulo
In Support of a Use of Country Systems Pilot Project
in Procurement in São Paulo State
The World Bank
Latin America and the Caribbean Region
December 2010
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Acronyms
ABRAJI Associação Brasileira de Jornalismo Investigativo, or the Brazilian
Association of Investigative Journalism
AGU Advocacia-Geral da União, or the Office of the Solicitor-General
BEC/SP Bolsa Eletrônica de Compras do Governo do Estado de São Paulo, or
the Electronic procurement portal of São Paulo
CA Contas Abertas, a civil society organization
CADTERC Cadastro de serviços terceirizados, or the Outsourced Services Registry
CATMAT/CATSER Catálogos de Materiais e de Serviços, or the catalogue of goods and
services of the Federal government
CAUFESP Cadastro Unificado de Fornecedores do Estado de São Paulo, or the
database of suppliers of the State of São Paulo
CEDC
Coordenadoria de Entidades Descentralizadas e de Contratações
Eletrônicas, or the Department of electronic procurement and
decentralized agencies of the State of São Paulo
CEIS Cadastro Nacional de Empresas Inidôneas e Suspensas, or the database
of debarred firms of the Federal government
CESP Companhia Energética de São Paulo, or the Power utility of the State of
São Paulo
CGA Corregedoria Geral da Administração, or the internal auditors of the
State of São Paulo
CGU Controladoria-Geral da União, or the internal auditors of the Federal
government
CNPJ Cadastro Nacional de Pessoas Jurídicas, or the Federal taxpayer card
COAF Conselho de Controle de Atividades Financeiras, or the Council for
Control of Financial Transactions
CQGP Comitê de Qualidade da Gestão Pública, or the Committee for Quality
on Public Sector Management of the State of São Paulo
DCA Departamento de Controle e Avaliação, or the Department for Internal
Control and Evaluation
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DNIT Departamento Nacional de Infraestrutura de Transportes, ot the
National Department for Transport Infrastructure
ENAP Escola Nacional de Administração Pública, or the National Academy of
Public Administration
ESAF Escola Superior de Administração Fazendária, or the School for
Finance Administration
FAZESP Escola Fazendária do Estado de São Paulo, or the finance school of the
government of São Paulo
FUNDAP Fundação para o Desenvolvimento Administrativo, or the school for
public administration development in São Paulo
GAO Government Accountability Office
GCC General Conditions of Contracts
IBASE Instituto Brasileiro de Análises Sociais e Econômicas, or the Brazilian
institute for social and economic analyses
LOA Lei Orçamentária Anual, or the Federal annual budget Law
OECD-DAC Organization for Economic Cooperation and Development -
Development Assistance Committee
PAC Programa de Aceleração do Crescimento, or the Growth Acceleration
Program – a stimulus package of the Federal goverment
PGE Procuradoria Geral do Estado, or the São Paulo’s Office of the
Solicitor-General
PPA Plano Plurianual, or the multi-year budget plan
PPP Public-private partnerships
PRODESP Companhia de Processamento de Dados do Estado de São Paulo, or the
IT company of the State of São Paulo
PT Portal da Transparência, or the Transparency Portal
QBS Quality-Based Selection
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QCBS Quality-and Cost-Based Selection
SABESP Companhia de Saneamento Básico do Estado de São Paulo, or the
Water and sewage utility of São Paulo
SAI Sistema de Administração de Investimentos, or the Investment
Monitoring Information System
SBD Standard Bidding Documents
SEBRAE Serviço Brasileiro de Apoio às Micro e Pequenas Empresas, or the
Association to support small and medium enterprises
SEP Secretaria de Economia e Planejamento do Estado de São Paulo, or the
Ministry of Planning and Economics of the State of São Paulo
SERPRO Serviço Federal de Processamento de Dados, or the IT company of the
Federal government
SIAFEM/SP
Sistema Integrado de Administração Financeira para Estados e
Municípios, or the Integrated Financial Management Information
System for States and Municipalities
SIAFI Sistema Integrado de Administração Financiera do Governo Federal, or
the Integrated financial management system of the Federal government
SIAFISICO Sistema Integrado de Informações Físico-Financeiras, or the Integrated
Physical and Financial Information System of São Paulo
SIASG Sistema Integrado de Administração de Serviços Gerais, or the
Integrated General Services Management System
SICAF Sistema de Cadastramento de Fornecedores, or the Supplier Unified
Registration System
SICON Sistema de Contratações, or the Contract Management System
SIDEC Sistema de Divulgação Eletrônica de Compras, or the Procurement
Electronic Announcement System
SIGEO Sistema de Gestão Orçamentária, or the Budget Execution Information
Management System
SISME Sistema de Minuta de Empenho, or the Budget Assignment Clearance
System
SISPP Sistema de Preços Praticados, or the Historical Price Posting System
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SLTI Secretaria de Logística e Tecnologia da Informação, or the Secretariat
for Logistics and Information Technology
SMEs Small and Medium Enterprises
SOF Secretaria de Orçamento Federal, or the Secretariat for the Federal
Budget
TB Transparência Brasil, a civil society organization
TCE/SP Tribunal de Contas do Estado de São Paulo, or the Supreme Auditors of
São Paulo
TCU Tribunal de Contas da União, or the Supreme Audit Institution of the
Federal government
UCS Use of Country Systems
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Table of Contents
Acronyms ........................................................................................................................................ 3
Executive Summary ........................................................................................................................ 8
Matrix of Issues and Proposed Action Plan .................................................................................. 13
Chapter I. Brief Profile of the Brazilian Economy ..................................................................... 19
Chapter II. Overview of Brazil’s Public Procurement System ..................................................... 25
Introduction ....................................................................................................................... 27
Public Financial Management........................................................................................... 27
Legal and regulatory framework ....................................................................................... 28
Bidding Documents .......................................................................................................... 35
The Institutional Framework............................................................................................. 36
The Regulatory Bodies ..................................................................................................... 36
The Implementing Agencies ............................................................................................. 37
The Supreme Audit Institution (TCU) .............................................................................. 40
Technology and the Procurement System......................................................................... 41
Overview of the Procurement Process .............................................................................. 46
Bid Protest System ............................................................................................................ 47
Integrity ............................................................................................................................. 49
Facts and performance indicators of the Federal government procurement system ......... 50
Chapter III: Scoring for the Federal Government ......................................................................... 52
Summary of scoring by area – Federal Government ........................................................ 53
I. The Legislative and Regulatory Framework ................................................................. 55
II. Institutional Framework and Management Capacity ................................................... 72
III. Procurement Operations and Market Practices ........................................................... 83
IV. Integrity and Transparency of the Public Procurement System. ................................ 93
Chapter IV. Scoring for São Paulo State .................................................................................... 106
Summary of scoring by area - Government of the State of São Paulo ........................... 107
I. Legislative and Regulatory Framework ..................................................................... 109
II. Institutional Framework and Management Capacity ................................................. 114
III. Procurement Operations and Market Practices ......................................................... 123
IV. Integrity and Transparency of the Public Procurement System ............................... 125
References ................................................................................................................................... 131
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Executive Summary
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1. In 2001, Goldman Sachs referred for the first time to Brazil, Russia, India, and China as
the BRICs: a group of countries expected to be the engine of global growth in the medium term
and an increasingly important source of economic activity in the long term—lifting millions out
of poverty and building competitive, globally inter-connected economies in the process. A recent
assessment found that Brazil has achieved sustained growth and macro- and socio-economic
stability, thus starting to effectively deliver on its BRIC promise.
2. In the five years preceding 2008, Brazil grew at a healthy average annual rate of 4.8%,
while (a) keeping average consumer price inflation to 5.4%, well within the central bank’s target
and (b) reducing income inequality, primarily through highly-targeted social programs like
conditional cash transfers. In 2009, during the global financial and economic crisis, Brazil’s
economy remained flat, while Latin America as a whole contracted by about 1.8%, and Mexico,
widely seen as Brazil’s regional peer, contracted by about 6.6%. In 2010, Brazil is expected to
grow at 7%, significantly faster than LAC countries in general and approaching the growth rates
of other BRIC countries such as China and India.
3. The dynamism of its economy, while benefiting from external forces like rising
commodity prices and stable demand for raw materials from China, India, and elsewhere, is
primarily the result of strong economic and social policies: The latter chiefly include (a) the
central bank controlling inflation (promoted by a floating exchange rate); (b) Federal and state
governments’ financial prudence (regulated by a Fiscal Responsibility Law, which limits
spending and sets fiscal targets); (c) transparency in the financial sector; and (d) more predictable
public management, as evidenced by consistent macro-economic policy over the last 10 years,
spanning two Federal administrations.
4. Coupled with a promising domestic market—Brazil’s population is nearly 200 million,
with an expanding middle class—policy-driven stability has contributed to rapidly growing
foreign direct investment (FDI), which has created jobs and improved competitiveness. Not
surprisingly, the UN Conference on Trade and Development (UNCTAD) ranked Brazil as the
third most attractive country for FDI in 2010-2012, just behind China and India.1 As a result of
FDI and the export of commodities and manufactured goods, Brazil’s central bank has
accumulated enough foreign exchange reserves (approximately $260 billion at present) to
cushion the economy from short-term shocks. Thus, fiscal discipline, pro-growth policies, and
macro-economic stability have earned Brazil an investment grade rating from the three major
international rating agencies.
5. In short, Brazil is a rapidly growing, increasingly affluent, modernizing, and stable
democracy which, along with the other BRICs, will continue to play an important role in shaping
global economic activity for decades to come.
6. The modernization and development that Brazil has achieved over the past 15 years is
reflected in government procurement, both at the Federal level and in São Paulo2, the largest
Brazilian state and the third largest economy in Latin America (after Brazil itself and Mexico).
Procurement operations in both are sound, relative to international standards. They:
1 World Investment Prospects Survey 2010-2012, UNCTAD, 2010.
2 Unless otherwise noted, in this paper São Paulo will refer to the State, not the city.
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Are based on an almost identical legal and regulatory framework that has evolved since a
1993 landmark national procurement law was passed to reflect international best practices
and address current country needs and market conditions—eg. by fully embracing
technology;
Use competitive procurement methods as a given and provide open, fair ways for bidders to
protest procurement decisions, including appeals to an independent entity;
Allow domestic and foreign bidders to compete for government contracts under equal
conditions. According to the Economist Intelligence Unit, ―legally registered companies—
foreign or domestic—now enjoy the same rights and privileges, and they compete on an
equal footing when bidding on contracts or seeking government financing.‖3
Are evidence-based and data-driven, relying on statistics, reports, indicators and raw data
processed by state-of-the-art information systems. Such systems integrate the entire logistics
chain—from procurement planning to contract management and payment—and establish the
crucial link between financial management and procurement;
Are innovative. In 2002, they mainstreamed the reverse auction procurement method (see
Chapter 2 for more details), which enhanced efficiency and transparency for off-the-shelf
goods and non-consulting services nationwide and promoted Internet-based procurement in
government processes; transparency is also achieved because all relevant information on
government procurement is publicly available (at no cost) to any interested party with access
to the Internet;
Operate with strong controls, supervised by respected, and independent oversight agencies
which make regular reviews and audits;
Are implemented by agencies that have impressive capacity and internal controls, are
familiar with regulations, and employ trained procurement staff who are competitively
recruited and compensated;
Are competitive: Since 2006, Federal government reverse auctions have had an average of no
less than 12 bidders per event;
Are implemented in the context of an active, engaged private sector and civil society.
7. As a result, both the Federal and São Paulo systems comply with international standards
in the Bank’s methodology for assessing the strength of country procurement systems. Both
systems score well in each area covered: (a) legislative and regulatory framework; (b)
institutional framework and management capacity; (c) procurement operations and market
practices; and (d) integrity and transparency of the public systems.
8. The Bank’s detailed assessment of the two systems for the purpose of applying the Use of
Country Systems (UCS) methodology builds on years of analytical work and intense policy
dialogue in the country. This level of analysis allowed the Bank to identify a few issues that
require further discussion (see below). However, the Region believes the issues do not
undermine the system’s strengths or conflict with any of the principles in the Bank’s
Procurement Guidelines. These issues include the following:
3 Brazil – Country Commerce Report. The Economist Intelligence Unit. September 2010.
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The institutional framework does not provide for systematic outcome-based performance
evaluation of procurement staff—although this area is quickly advancing, with positive
results in Minas Gerais4 state government and some majority state-owned enterprises (eg.
São Paulo’s largest water and sewage utility).
Despite the country’s success in achieving inflation targets and sustaining growth, the
average cost of market-based credit for private sector entities remains high—even when
compared to other emerging markets. Still, total private sector credit as a share of GDP has
expanded over recent years and it is expected the country’s investment grade status will
improve the terms/availability of credit over the medium to long term.
Inbound logistics (eg. reception of goods at warehouses) and the periodic evaluation of
suppliers can be improved by, for example, making greater use of technology (eg. hand-held
devices and customized software tools).
The appeal mechanisms (for procedures/decisions in the procurement process), although
transparent and generally seen as fair and competent, can be time- and resource-consuming,
since the appeals body (at the Federal level, the nation’s Supreme Auditor) is not legally
required to issue decisions in a specified time. Federal authorities, particularly the
procurement regulatory body, are aware of the negative impact from a protracted appeals
process, particularly for procuring public works. Thus, they proposed an amendment to the
procurement law, being reviewed by Congress, which will inter alia establish timeframes for
decisions.
The country has an effective way to resolve disputes during contract execution, and
unsatisfied parties can use the courts for judicial reviews. However, government agencies,
which can use arbitration in contracts for concessions, PPPs (private-public partnerships) and
companies where the government is a shareholder, cannot use this process for contracts
involving goods, works and services.
9. In preparing this proposal for piloting the country systems in Brazil, a second stage of the
UCS assessment was conducted to determine if (a) procurement policies/procedures were
consistent with those of the Bank, and (b) São Paulo’s standard bidding documents were
acceptable for ICB. It was found that the country’s procedures were appropriate, but some issues
were noted (see below). The findings are presented in a separate report5. The issues include the
following:
Foreign bidders are not required to associate with local companies to bid for government
contracts. When an association is made, the Brazilian company is required to take the
lead (see Chapter III for more details). This does not apply to processes subject to
international competition.
The laws do not adopt two-stage bidding processes for procuring goods and works as
defined by Bank Guidelines.
4 The state of Minas Gerais was not part of the assessment and has not yet been proposed as a pilot for using country
systems in procurement.
5 The mentioned report, which is part of the UCS package submitted for review by OPRC, is named ―Brazil –
Federal Government and the State of São Paulo: Consistency and Equivalence requirements for international
competitive bidding vis-à-vis the provisions of Sections I and II of the Procurement Guidelines‖.
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The Federal government does not have standard bidding documents or mandatory,
general contract conditions. However, São Paulo, which is to conduct the pilot program,
has nine standard bidding documents for procuring goods, works and non-consulting
services as well as mandatory, general contract conditions. The documents and contracts
published by São Paulo do not contain a clause on Bank inspections that are required
under the sanctions regime; this issue will have to be addressed at the project level if a
pilot is approved.
All documents on procurement processes are prepared in Portuguese, the national
language, and translations to one of the three languages of the Bank’s Procurement
Guidelines (English, French of Spanish) are not available.
Bidders must submit the total price for goods, works or services—including taxes, fees,
levies, insurance, transportation and any other costs. For procuring goods, bids are invited
on terms similar to the INCOTERM DDP and not on CIP terms as the Bank’s
procurement Guidelines.
The procurement Law requires that estimated costs be presented in detail, and bids over
certain amounts may be rejected.
10. Given the strengths of its procurement system, operating environment and responsiveness
to UCS methodology benchmarks, the LAC Region recommends São Paulo for a pilot program
in the use of country systems in procurement, subject to OPRC’s identifying and approving such
a project. The main issues noted in the diagnosis of the OECD/DAC benchmark tool and the
consistency and equivalence review, which are included in Phases I and II of the methodology to
pilot country systems, are summarized in the matrix below along with the action plan. As noted
throughout this report, all issues identified in the assessment and presented in the matrix are
minor, since they have little or no impact on the procurement system’s performance. Thus, the
country’s laws will not need to change.
11. This report is organized as follows: (a) Chapter I presents an economic profile of Brazil
and São Paulo; (b) Chapter II discusses key features of Brazil’s procurement system as they
apply to the 54 sub-indicators in the UCS assessment methodology; (c) Chapter III reviews the
Federal procurement system, which is needed to assess the system as it operates at the state level;
and (d) Chapter IV assesses São Paulo’s system.
Matrix of Issues and Proposed Action Plan
Issue/reference to supporting documents6
Description of Issue Action Plan
Rules of participation, Chapter III of the Benchmark Indicators Report, sub-indicator 1(d)
and
Consistency and Equivalence Report, paragraphs 1.8 (eligibility), 1.10 (joint ventures), and 2.55-2.56 (domestic preference for goods)
(a) Foreign firms must be locally represented in order to bid for government contracts. This requirement, contained in the legal framework, is designed so as to settle disputes in local courts. Such representation means obtaining a taxpayer card, issued by the country’s tax collecting agency. To comply, firms must either have a locally incorporated branch or a local legal representative who bids on their behalf for government contracts.
(b) Foreign firms are not required to associate with local ones; if they do, the law requires that the Brazilian partner (the one with legal representation in the country) must head the joint venture. This requirement does not apply for competitive bidding subject to international competition, as defined by local procurement law 8.666/93.
(c) For procuring goods/services in the information technology (IT) sector, the laws allows for a tie-breaking mechanism to favor those manufactured locally or that use technology developed in Brazil. According to Decree 7.174 (2010), local bids that
(a) The Region will address the issue of local legal representation at the project level as occurs on all current projects; local requirements for legal/tax documents would not apply to bids submitted by foreign firms.
This requirement does not reflect the quality of the procurement system. Rather, the goal is to accurately track suppliers’/contractor’s qualification information, promote a fair and objective enforcement of the law, identify fraudulent information, and ultimately treat all companies equally.
The application for a taxpayer card takes about 22 days and the service is provided at no cost to the applicant, as reported by the World Bank’s 2010 Doing Business report.
(b) The Region will address the issue of leadership in joint-venture bids through the bidding documents that must be agreed upon for the pilot project. As
6 All references to specific clauses of the Guidelines are related to the version of the Procurement Guidelines published in May 2004, revised in October 2006
and May 2010.
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fall within 10% of the lowest evaluated bid— provided it is not local in the law’s terms—will be considered “tied” with that bid and allowed to offer a new price to match or beat it. In the case of “best technical proposal and price combination,” preference will only apply to the price and the new one should outbid the best ranked proposal. To win the contract, the local bid (as defined in the law) must match or beat the lowest bid that does not meet the local content defined in the law. Local bids may provide a counter-proposal to obtain a contract, after being informed of the price of all other bids.
A similar mechanism exists to favor small and medium enterprises (SMEs). Law 123 (2006) introduces a tie-breaking criterion, under which a bid from a qualified SME that is equal to or within 10% of the lowest priced proposal when the latter is from a qualified non-SME bidder (5% in reverse auctions) will be considered “tied.” The SME bidder may then re-issue a price that is lower than the original lowest priced bid, to win the contract.
such, the documents will not require that, under an international joint-venture bid with local participation, the Brazilian partner (or firm with local legal representation), head the project.
(c) The Region will address the issue of preferences for locals in procuring IT goods/services, and those to SMEs, at the project level. Such preferences will not apply to the pilot, and enforcement will occur through the bidding documents for the pilot, which shall be agreed upon.
Complaint resolution mechanism, Chapter III of the Benchmark Indicators Report, sub-indicators 1(h) id 10 (b)
The process to resolve complaints is straightforward, and
the authority for decision-making/enforcement is clearly
assigned. Bidders may voice complaints through three
different channels. While the system is transparent and
effective, it could be more efficient. The Supreme Auditor
(TCU), which handles the appeals, has high credibility in
procurement and is seen as an honest broker vis-à-vis the
government; but, TCU is not bound to reach decisions
Brazilian authorities are aware of the efficiency issue and Congress is reviewing a proposal (PL 7709) to amend the procurement law to include timeframes for TCU’s decisions. The Bank did a technical analysis of this issue by studying procurement of public works.
The issue pertains to current Bank projects as well as the proposed UCS pilot, since TCU always decides on appeals
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within a specific time; this occasionally lengthens the
processes.
under its regulations. Until now, there are no recorded cases of this potential inefficiency ever affecting a Bank project. Thus, the Region does not consider it a special issue for the pilot.
Language, Consistency and Equivalence Report, paragraph 2.15 (language)
All documents on procurement processes are in Portuguese, the national language.
The Region proposes to allow Portuguese to be used for the proposed UCS pilot. A review of data from 384 forms (from ICB contracts) over several years until 2007 showed that 98% of Bank-financed civil works contracts in Brazil were awarded to firms registered there. Similarly, 85% of all ICB contracts for goods were awarded to suppliers registered there, and the percent climbs to 93% if several large contracts for procuring condoms financed by HIV/AIDS projects are excluded.
The loan agreement for the pilot will require the Borrower to translate documents if the Bank needs and requests this.
Dispute Resolution, Chapter III of the Benchmark Indicators Report, sub-indicator 8(b)
and
Consistency and Equivalence Report, paragraph
Arbitration is used as a contract dispute resolution mechanism only in concessions and PPPs (private-public partnerships). It can also be used by companies in which the government is a shareholder. But, arbitration cannot be used by government agencies in traditional contracts for provision of goods, works and services.
The use of arbitration in government contracts for goods, works and services is considered unconstitutional by important stakeholders. Thus, Congress would have to amend the Constitution before agencies could use arbitration to settle disputes in these areas.
Contract disputes with the government are usually resolved amicably; if not, parties can use an administrative dispute resolution mechanism or appeal to the courts. This three-tiered system has proved effective.
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2.43 For this reason, the Region does not propose any new measures.
This issue affects all projects equally—whether a UCS pilot or a regular project—because government agencies are legally forbidden to use arbitration to settle contract disputes.
Pricing in procurement of goods, Consistency and Equivalence Report, paragraphs 2.21 and 2.23
Bidders must submit the total price for the goods, works or services, including taxes, fees, levies, insurance, transportation and any other costs, to be delivered to the final destination. For goods, bids are invited on terms similar to the INCOTERM DDP.
The Region will address this issue at the project level with a specific clause in the bidding documents that will allow CIP prices to be used in all processes that are subject to international competition, as defined in project’s procurement plan.
Disclosure of estimated costs and use of maximum prices for accepting bids , Chapter II of the Benchmark Indicators Report
The procurement law requires the estimated cost to be detailed and disclosed; bids exceeding the amount may be rejected.
The Region will deal with this issue at the project level. Procurement processes financed by the pilot will not be required to disclose estimated costs and bids will not be rejected based on a maximum price.
Standard bidding documents and general conditions of contract, Chapter III of the Benchmark Indicators Report, sub-indicators 1(e)
The Federal government does not have standard bidding documents or mandatory, general contract conditions.
The Region will conduct a pilot program in São Paulo, which has nine standard bidding documents for procuring goods, works and non-consulting services, as well as mandatory, general contract conditions for government agencies. The state’s documents/contracts do not contain a clause on Bank inspections (required under the Sanctions regime); thus, this issue must be addressed at the project level if a pilot is approved. When it is
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and 2(f)
and
Consistency and Equivalence Report, paragraphs 2.11-2.12, and 2.16-2.18
prepared, the Bank will require that clauses needed for the sanctions regime be included in the bidding documents agreed upon by the Bank and São Paulo.
The procurement law contains provisions regarding fraud and corruption, to which bidding documents/contracts refer.
Two-stage bidding, Consistency and Equivalence Report, paragraph 2.6
The laws do not provide for two-stage bidding (defined by the Bank’s Guidelines) for goods/works—a first stage for technical proposals and a second for revised ones with prices.
The Region will address this when the pilot project is selected. Specifically, the Bank will not consider a project that includes complex contracts; thus, the use of two-stage procedures is not expected for the pilot.
Use of a 2-envelope process (or 3-envelopes when selecting consultants) in non-auction procurement, Consistency and Equivalence Report, paragraphs 2.48 - 2.54, and 2.58
For non-auction procurement, Law 8.666/93 provides for a two or three-step open, competitive bidding process. Most cases involve two steps: Bidders submit two sealed envelopes to the implementing agency at the same time. The first contains a price proposal and the second has the bidder’s legal, financial, and technical qualification documents, as required by the bidding documents7.
The evaluation process includes two steps. In the first, the envelopes containing the qualification documents for all bidders are reviewed by the evaluation committee. Only those that fully comply with the bidding documents can advance to the second step, when the envelopes with the
The use of 2-envelopes in non-auction procurement will not be an issue for the pilot because São Paulo changed the state’s law to adopt a post-qualification procedure that requires the financial envelopes be opened first.8 The three lowest bidders’ qualifications are evaluated during a second step, which occurs immediately after the price proposals are ranked. This process—opening the price envelopes before the qualification documents—is called “inversão das fases”. At present, the Federal government is considering adopting the “inversão das fases” approach, changing the procurement Law 8.666/93.
7 As explained later in Chapter II of this report, the two-step approach under the Brazilian procurement Law is different from the two-stage procedure defined by
the Bank’s Guidelines for procurement of goods and works, in which the first stage is a technical proposal only, and the second stage is a revised technical
proposal along with price.
8 This practice was introduced by State Law 13.121/08 and further regulated by State Decree 54.010/09.
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price proposals are opened. Contracts are awarded to qualified bidders who submit the lowest price. Envelopes from unqualified bidders—as determined by the bid evaluation committee, based on the bidding documents—are returned unopened after the contracts are awarded.
Chapter I. Brief Profile of the Brazilian Economy
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Brazil’s macro-economic environment
Over the last decade, Brazil created a stable macro-economic framework that
sustained long-term growth. Since the early 2000s, Brazil successfully implemented rigorous
fiscal and monetary policies, and the floating exchange rate regime helped the country respond to
external shocks: It is now better prepared to overcome external crises, as in 2008-2009, based on
a dynamic economy (agriculture 6%, industry 31%, and services 63%), buoyant domestic
demand, improved credit markets, and large international reserves (of over $250 billion). Real
GDP growth is forecast for about 7.2% in 2010 and 4.5% for 2011.
The Central Bank was able to control inflation. By strictly maintaining the inflation-
targeting regime adopted in the late 1990s, the country experienced declining interest rates which
reduced bank spreads—which still are among the highest in the world—and, in turn, eased
access to credit. Since 2006, the credit stock increased at an annual rate of 23%, driven mainly
by a buoyant demand for durables (e.g. vehicles) and real estate financing. The inflation forecast
for the end of 2010 is now 4.6%, just 0.1% above the center of the official target (4.5% +/- 2%).
In 2009, fiscal policy played a counter-cyclical role that helped Brazil weather the
financial crisis; in 2010, given the economic recovery, fiscal policy turned pro-cyclical. The
primary surplus in the first half of 2010 was 2.4% (as compared to 5.6% for the same period of
2008) so that forecasts anticipate an end-of-year result slightly below the official target of 3.3%.
Federal current expenditures continue to grow, while state and local governments exhibit more
prudence mainly because of the Fiscal Responsibility Law, which imposes strict limits on sub-
national entities. The current pro-cyclical fiscal stance may partly reflect the political cycle and
partly the National Bank of Economic and Social Development (BNDES) expanded credit to
support the government flagship Programa de Aceleração do Crescimento (Growth Acceleration
Program). The financing of BNDES operations (R$180 billion in 2009-2010), together with the
large increase in reserve accumulation (from $85 billion in December 2006 to $260 billion in
July 2010), explains most of the increase in gross public sector debt, from 57.4% in 2008 to
61.6% in 2009.
The government’s Programa de Aceleração do Crescimento (PAC) reflects its
concerns with long-term growth. The program fosters modernization by removing many
supply-side bottlenecks. The Ministry of Finance projected that public and private infrastructure
spending from 2007-2010 will be over R$700 billion (about $380 billion). PAC measures
include an increase in Federal funding for housing through the Caixa Econômica Federal (CEF),
which runs the Minha Casa, Minha Vida program (which provides public collateral and better
financing conditions to first-time home buyers), and large infrastructure financing through
BNDES.
Brazil’s financial system is one of the largest among emerging markets; it is well
capitalized and strictly supervised by the Central Bank. Capital adequacy for the system is
well above 17%, and private banks are showing record profits. However, due to the public
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policies described above, the relative share of total credit attributable to public banks increased
significantly since the crisis, from 35.3% in October 2008 to 40.5% in June 2010.
In the last decade, millions of individuals escaped from poverty and extreme
poverty. The remarkable aspect of Brazil’s growth is that is has truly been pro-poor (see figure
above): .Extreme poverty levels dropped by 8.7%, and reached 8.8% overall, well below the
Millennium Development Goals. This partly reflects social policies (the well known Bolsa
Familia conditional cash transfer program) and the explosion of the formal labor market, where
roughly 10 million jobs were created from 2003-2009. This helped reduce inequality and
strengthened the credit market and further growth.
Investment climate in Brazil
The profile of Brazil’s capital inflows has changed in recent years, reflecting the
more stable economic environment. While in 2003, short-term finance was the main source of
capital inflows, since 2004 (with the notable exception of the crisis period) long-term finance has
been responsible for most of it. Such a shift makes investors less vulnerable to rapid changes in
the market and, together with a sound macro-economic framework, has led to the upgrade of
Brazil’s sovereign debt to investment grade by all three major rating agencies (Standard &
Poor’s in April 2008, Fitch in May 2008, and Moody’s in September 2009). This change in asset
class not only boosted investor confidence but also allowed large institutional investors such as
US pension funds, which follow strict rules on risk-exposure, to invest in Brazil’s sovereign debt
bonds.
22
Source: Central Bank of Brazil
Beyond the sound macro-economic framework and positive financial market,
Brazil’s investment climate has also improved. Central Bank data shows that the country’s
credit-to-GDP ratio has steadily increased since 2003, from less than 25% of GDP in 2003 to
more than 45% in 2010, reflecting the improved quality of investment projects and emergence of
a new middle class that, with stable formal jobs, can access the credit market. According to the
World Bank’s Investment Climate Assessment of 2003 and 2007, entrepreneurs’ perceptions are
not only improving but are more favorable for Brazil than for the average LAC countries in
several dimensions (eg. practices of the informal sector, crime and theft, and access to finance).
However, it is widely recognized that there is space for significant improvement and an
ambitious micro reform agenda could further enhance the business climate.
The State of São Paulo
Macro-economic policies are defined by the Federal government for the whole country.
And, while the overall macro situation relates to São Paulo, it is important to note that this state
alone represents 34% of Brazil’s economy, making it the third largest economy in the Latin
America region after Brazil itself and Mexico. São Paulo is one of the most advanced Brazilian
states in term of public administration, financial sector, market capacity, strategic use of
technology, and overall capacity in the public and private sectors. With its capital city firmly
established as the financial and commercial hub for the country, São Paulo also has by far the
Brazil’s Finance Profile: 12-month accumulated inflows
US$
20
09
(m
illio
ns)
23
largest internal market in Brazil. This market is dynamic and competitive and home to many
multinational corporations.
Box 1. The State of São Paulo
São Paulo is the most populous state and largest sub-national economy in Brazil. It accounts for 3% of the
country’s territory (248,000 km2), 22% of its population (42 million), and 34% of its GDP (about $535
billion). It is the most populous sub-national entity in the Western Hemisphere, the largest sub-national
economy in Latin America, and the third largest economy (whether national or sub-national) in Latin
America, after Brazil and Mexico.
São Paulo’s economic activity is diversified. It:
Generates 43% of the country’s manufacturing value-added
Accounts for 29% of national exports by value; it has Brazil’s largest maritime port (Santos) and
air cargo terminal (at São Paulo-Guarulhos International Airport), by volume
Accounts for 42% of Brazil’s oil refinery capacity, 39% of natural gas consumption, 59% of fuel
ethanol production, 80% of aerospace manufacturing, 44% of motor vehicle manufacturing, 80%
of oranges harvested, and 76% of pharmaceutical sales
Is home to BM&F Bovespa (Bolsa de Valores, Mercadorias & Futuros de São Paulo), the largest
stock and futures exchange in Latin America by market capitalization (and tenth largest in the
world)
The State’s capital, the city of São Paulo, has a metropolitan area with about 20 million inhabitants,
making it the world’s seventh largest city. The city and its metropolitan area account for about half the
State’s GDP. The State government and various public institutions, including those related to
procurement and public financial management, are located here.
24
25
Chapter II. Overview of Brazil’s Public Procurement System
27
Introduction
This report assesses the strengths and weaknesses of Brazil’s Federal and São Paulo’s
public procurement systems at a macro level, relative to international standards established by
the OECD/DAC-World Bank Base-Line Indicators on procurement (BLIs).9 The assessment is 5
the result of analyses conducted from 2008-2010 by senior procurement specialists from LCSPT,
the World Bank’s Procurement Unit for the LAC region. The most detailed unit of diagnosis
within the OECD/DAC-World Bank procurement benchmarking tool is the procurement sub-
indicator: There are 54 in total, subsumed in12 BLIs (ie., each base-line indicator consists of an
average 4-5 sub-indicators). The BLIs, in turn, belong to one of four large procurement 10
categories: (a) the legislative and regulatory framework; (b) the institutional framework and
management capacity; (c) procurement operations and market practices; and (d) the integrity and
transparency of the public procurement system. The OECD/DAC-World Bank procurement
benchmarking tool proposes that each of the 54 sub-indicators be scored on a scale from 0 to 3,
where 3 represents full country compliance with the standard. 15
For each sub-indicator, the descriptions in this chapter, as well as the proposed
compliance score relative to an agreed-upon benchmark in the context of the Use of Country
Systems piloting program,10
are based on inputs from various sources. The LCSPT team visited
members of the Federal and São Paulo public procurement system, such as government agencies
(including, but not limited to, the procurement regulatory agency), government oversight bodies 20
(internal and external), public research institutions, the Federal and State Prosecution Office, the
Office of the Solicitor-General, and civil society organizations. In addition, the team conducted
secondary research using government, multilateral development bank, and private sector sources
(such as reports and surveys). Last, it reviewed various legal texts in the Federal procurement
legal and regulatory framework, from the country’s Constitution through to operating manuals. 25
Public Financial Management
The World Bank has been actively supporting the modernization of Brazil’s public
financial management. In 2008, the Bank prepared a policy note regarding the performance of
the country’s Federal financial management systems. This analysis concluded there is currently 30
―a high degree of transparency, underpinned by a sound public financial management system that
9 The BLIs were originally proposed in the context of the 2003-2004 OECD/DAC-World Bank Round Table
Initiative on Strengthening Procurement Capacities in Developing Countries, and were further (and subsequently)
advanced by the OECD/DAC Joint Venture for Procurement. Today, the BLIs are the backbone of the OECD/DAC
Methodology for Assessment of National Procurement Systems, now in its fourth version (dated July 2006).
10 In ―Use of Country Procurement Systems in Bank-Supported Operations: Proposed Piloting Program‖ (June
2008), a minimum score for each sub-indicator was suggested (in some cases with the additional requirement that
the country develop an action plan to improve its score when the minimum benchmark was set at less than 3), under
the premise that a country which substantially meets the score (and related action plan) requirements ―is highly
likely to be able to implement pilot projects [in the Use of Country Systems] successfully.‖
28
provides reasonable assurance over the use of government and other public resources.‖11
The
Brazilian government places a great deal of importance in disclosure of government actions and
since 2010 all budget commitments and payments to suppliers are required to be disclosed in the
internet per Federal Law 131 of 2009 so that the public can follow implementation of the budget 35
Law in detail.
Further Bank diagnostic and analytical work in 2009 found that Brazil’s public financial
management system is on par with OECD countries in terms of budget planning, accounting,
expenditure control and reporting. This assessment was based on the PEFA methodology, which
indicated the Federal government developed a sophisticated culture of control, compliance and 40
transparency in the public sector that produced a successful program to restore aggregate fiscal
discipline and enhance fiscal transparency. Brazil has showed the most significant progress in the
region in auditing performance.
The current priority on the country’s PFM agenda is to improve effectiveness and cost
efficiency of public spending with the aim of achieving better value for taxpayers’ money. 45
Attaining this goal will likely require reforming current budgetary processes and procedures to
allow more flexibility during implementation.
World Bank operations in Brazil have relied on the country’s systems for financial
management and audits since the early 2000s, as well as on Federal, state and large municipal
systems, which were used in Bank projects for accounting and budgeting. Currently, the Bank is 50
working with the Brazilian government to better apply the government’s account structure to
enhance the financial reporting capabilities of government information systems.
Brazil’s public procurement system
To discuss the BLIs and their sub-indicators as they apply to Brazil’s procurement, it is 55
useful to describe the system’s laws and regulations, participants, tools, and procedures, as well
as recent data. Given this objective, this chapter will provide an overview of how the
procurement system functions, presenting the various agencies and participants involved, the
interactions and responsibilities of these agencies, as well as the information systems used to
support enforcement, compliance and statistics. Next, Chapter III will describe the proposed 60
scoring for the Federal government based on the OECD/DAC benchmarking tool, and Chapter
IV will suggest scoring for the State of São Paulo. As will be stated in this report, the workings
of the Federal system must be understood to better comprehend sub-national systems because
many of the latter’s features originate in Federal legal texts, practices and institutions.
65
Legal and regulatory framework
11
See the World Bank Policy Note: Issues and Recommendations Enhancing the Performance of Federal Financial
Management Systems (Report No. 39780-BR), June 2008, and the World Bank Country Financial Accountability
Assessment, (Report No. 25685-BR), June 30, 2002.
29
Box 2. Brazil’s Legal System and Relevance for Federal Government Procurement
Brazil is a Federal republic. The federation stems from the ―indissoluble union‖ of 26 states, the Federal
District (where the capital, Brasilia, is located), and 5,661 municipalities. The Union, states (along with
the Federal District), and municipalities represent the country’s three levels of government. Brazil’s
Federal Constitution, promulgated in October 1988, separates powers into an executive, legislature and
judiciary. All three have an independently organized and democratically elected executive and legislature,
while the judiciary is established (and appointed) only at the Federal and state level.
Brazil’s legal system is based on Civil Law and the Constitution (October 5, 1988) is the supreme legal
text. Since it is a federation, states have their own constitutions and legal texts, but all state laws (as well
as court decisions) must be consistent with the Federal Constitution. Municipalities have restricted
legislative autonomy, since laws at this level must occur within the framework of the state legislation and,
therefore, be consistent with the Federal framework.
Parliament is the primary source of statutes (though some lower-level norms, such as ordinances, may be
enacted by the Executive). There is a bicameral Federal Congress consisting of an 81-member Senate
(upper house) and a 513-member Chamber of Deputies (lower house), where members are directly
elected (for 8- and 4-year terms, respectively) to represent the 26 states and the Federal District. There are
unicameral parliaments for all states and the Federal District, elected simultaneously with the Federal
Congress. Municipalities have city councils whose members are elected for 4-year terms, 2 years after
Congressional and legislature elections.
According to Article 22, clause XXVII of Brazil’s Constitution, procurement regulations are the authority
of the Federal government. Specifically, only it can legislate on general rules, methods, and norms carried
out by Federal, state, and municipal agencies, state-owned enterprises and other public sector entities at
all government levels. The implication is that state-level procurement legal texts may only complement—
and never contradict—Federal texts, including those defining and regulating procurement methods and
practices.
Accordingly, Article 1 of the Federal procurement Law (a legal text discussed at length throughout this
report) says that the norms, rules, and procedures apply with equal force at the Federal, state, and
municipal levels. State-level procurement laws, regulations, and other legal texts must therefore be
consistent with the Federal procurement regulatory framework.
Brazil’s procurement legal and regulatory framework is based on the country’s
Constitution. Article 37, paragraph XXI says that the procurement of goods, works, and services 70
shall be conducted through open, competitive bidding (except in exceptional and unambiguously
defined cases) in a way that ensures equal treatment of bidders, economy, and efficiency. This
approach is grounded in the country’s primary source of law and this Constitutional requirement
is implemented throughout the procurement law and all lower level sources of rules.
Since 2002, the procurement legal framework—which applies to both the Federal and 75
sub-national levels of government (Box 2)—has been based on a two-pronged structure, as
described below: the Procurement Law and the Reverse Auction Law.
The Procurement Law
30
The first element is Law 8.666 of 1993 (8.666/93), which regulates government
procurement (including all goods, works, and services for all size contracts). In addition to 80
indicating how and under what circumstances various procurement methods shall be
implemented, Law 8.666/93 provides critical requirements for drafting and executing contracts,
regulates the administrative complaint resolution mechanism, and defines procurement-related
administrative and criminal sanctions.
This law regulates every type and method of procurement, except for reverse auctions, 85
which are covered by a different law (see below). However, its basic principles apply equally to
all government procurement, and other laws only provide complementary procedural details.
Open Bidding. The law provides for a two or three-step open, competitive bidding
process.12
Usually, a two step process is followed where bidders submit two sealed envelopes to
the implementing agency at the same time: The first contains a price proposal and the second 90
contains the bidder’s legal, financial, and technical qualification documents (and technical
proposal, if needed under the particular type of procurement),13
as required in the bidding
documents.14
The evaluation process includes two separate steps. In the first, the bid evaluation
committee reviews only the envelopes that contain the qualification documents. Only those 95
bidders considered to fully comply with the bidding documents move to the second step, when
the envelopes with the price proposals are opened. The contract is awarded to the qualified
bidder who submits the lowest price. Price envelopes for unqualified bidders—as determined by
the bid evaluation committee—are returned unopened after the award decision is made.
The law provides for several variations of open competitive bidding, depending on the 100
estimated contract amount (see Box 3).
Box 3. Competitive procurement methods
in Brazil’s Federal government procurement system
Open competitive bidding is the default procurement method as defined by Article 37 of the Constitution.
The non-auction open competitive bidding procurement method set forth by Law 8.666/93 equally applies
to all procurement events, regardless of (a) the estimated award size and (b) the type of item put up for
bid (although the method, in practice, mostly applies to the procurement of public works and consulting
12
It also contemplates the use of direct contracting under specific circumstances (and for certain award sizes), all of
them fully and unambiguously detailed in the Law (Articles 24 and 25).
13 A technical proposal contains details on a bidder’s approach to delivering the task at hand, including, for example,
size and characteristics of the technical team to carry out the work, project risk mitigation measures, etc. While the
need for technical proposals is common in the procurement of large works construction services, technical proposals
are not always needed. The requirement for submitting technical proposals, as well as guidance on their content, is
noted in the bidding documents.
14 As explained, the two-stage approach under the Brazilian procurement Law is different from the two-stage
procedure defined by the Bank’s Guidelines for procurement of goods and works, in which the first stage is a
technical proposal only, and the second stage is a revised technical proposal along with price.
31
services). However, the invitation mode for the non-auction competitive process changes, based on the
estimated award size (which is a common proxy for procurement complexity). In increasing order of
estimated award size, the invitation modalities provided by Law 8.666/93 for non-auction open
competitive bidding are the following:
1. For works/engineering services with an estimated cost of up to R$150,000, or about $83,000 (and
goods estimated up to R$80,000 or about $44,000), public agencies can use an invitation
procedure known as convite, where the invitation of at least three interested bidders is enough to
launch the bidding process. However, any uninvited bidders must be allowed to participate in a
convite event upon request up to 24 hours before the deadline for submitting bids (regardless of
whether the bidder is registered in the government supplier database). Uninvited bidders have
ample access to information on convite events, since tender invitations are published in both the
Federal government procurement web portal and the Federal official gazette.
2. For works/engineering services over R$150,000 and up to R$1.5 million, about $830,000 (and
goods estimated up to R$650,000 or about $357,500), public agencies must use an invitation
procedure known as tomada de preços, where the bidding process is open to any interested
bidders (i.e. no direct invitation or participation request is required), provided they have
registered in the Federal government supplier database (bidders have access to an online pre-
registration site through the Federal government procurement web portal, with the full
registration pending the deliver of hard-copy at a designated registration location; registration is
straightforward and free of charge). Bidders may register in the supplier database up to three days
before a tomada de preços bid submission deadline. Once registered, bidders remain in the
database for easy access to future events. Invitations to tender in tomada de preços events are
published in the Federal official gazette, the procurement web portal, and in at least one
newspaper of ―large circulation‖ at the state (and if available, municipal) level.
3. For works/engineering services with an estimated contract size over R$1.5 million (or R$650,000
for goods), public agencies must use the concorrência invitation, where the bidding process is
open to any interested bidders regardless of registration status at the bid submission deadline. In
fact, as it is the most open of the three invitation modes, concorrência can be used for any
procurement event—regardless of award size—if the implementing agency agrees (the tomada de
preços mode may also be used in lieu of a convite process at the discretion of the implementing
agency). Invitations to tender in concorrências are published in the same manner as with the
tomada de preços.
In the reverse auction procurement method set forth by Law 10.520/02 (and further regulated, in its
electronic variety, by presidential Decree 5.450/05), while there are no invitation modalities (events are
open to interested bidders regardless of estimated award size), differences arise in terms of both
registration requirements as well as advertising means, depending on whether the auction takes place on-
or offline.
For offline reverse auctions, participating bidders need not be registered in the Federal government
supplier database, as all documents required can be presented physically during the auction. Moreover, all
offline reverse auctions must be advertised in the Federal official gazette, but only optionally (though in
practice, this occurs on a de facto mandatory basis) in the Federal government procurement web portal
and a newspaper of ―wide circulation.‖
For online reverse auctions, all participating bidders must be registered in the Federal government
supplier database; such registration is a necessary input to obtain credentials to access the procurement
web portal (where auctions are hosted). Decree 5.450/05 also stipulates that all auctions with an estimated
32
award size up to R$650,000 (about $360,000) must be advertised in the Federal official gazette and the
procurement web portal; for those over R$650,000 and below (or equal to) R$1.3 million (about
$720,000), the advertisement must also appear in a local newspaper; and, for estimated awards above
R$1.3 million, it must also appear in a regional or national newspaper.
Direct Contracting. The Law also defines exceptions to open competition. Direct
contracting may be appropriate in the following instances: (1) emergency response situations 105
(e.g. natural disasters); (2) sourcing from fully state-owned enterprises explicitly created for that
purpose; (3) contracting utility services (water, electricity); (4) leasing real estate; (5) procuring
maintenance and repair parts for machinery/equipment from the original supplier and during the
equipment period under warranty, when the use of such parts is required under the warranty
clauses; (6) procuring (typically highly specialized) items where no competitive market exists 110
(accompanied with evidence of such conditions from the public commercial authority in the
jurisdiction where the procurement is to occur); (7) procuring small-value items, which is
defined in the Law as 10% of the threshold for the simplest procurement method—Convite—
R$8,000 for goods/non-consulting services and R$15,000 for works/consulting services
(however, small-value procurement is increasingly being procured through competitive e-115
quotations, as explained below); (8) during war periods; (9) when a previous bidding process
received no bids, provided the administration justifiably cannot re-bid; (10) when the Federal
government needs to get involved to regulate prices or restore normalcy to supply; (11) when all
bids received for a specific procurement are higher than current market prices; (12) when it
involves national security (requires Presidential approval); (13) when it is necessary to complete 120
works that are unfinished due to contract termination; (14) purchasing perishable food; (15)
when hiring not-for-profit research and development agencies; (16) purchasing goods/services
from an international agreement approved by Congress, provided that prices/conditions clearly
benefit the government; (17) purchasing or restoring art or historical objects; (18) buying
goods/services during military operations outside a home station; (19) buying military equipment 125
that requires standardization; (20) when CAPES, FINEP and CNPq (scientific research centers
funded by the government) purchase science or technology equipment; (21) hiring low-income
associations or communities to collect recyclable trash; (22) buying high technology equipment
that will be used for national defense.
Low-Value Quotations. A 2001 Ordinance to complement the Law (portaria 306) 130
introduced an electronic quotation mechanism as the preferred method for low-value
procurement (estimated up to R$15,000 (about $8,300) for works/consulting services, and
R$8,000 (about $4,430) for off-the-shelf goods and non-consulting services.
E-quotation is an internet-based competitive procurement procedure where awards are
made to the lowest price bid. It is similar to a reverse auction in that e-quotation bidders compete 135
for the underlying award by offering steadily decreasing prices on a dynamic basis and with
knowledge of the lowest-priced offer at all times (while keeping bidder identities confidential).
No auctioneer is present.
The process starts with the publication of a standard e-quotation invitation in the Federal
public procurement web portal including specifications (invariably market-based, and thus 140
33
widely used by and familiar to suppliers), contract conditions, length of the bidding session
(which cannot be under four hours), timing and internet address where the bidding will occur.
When the bidding time expires, the bidder with the lowest offer is awarded the contract, subject
to administrative sanctions if it cannot fulfill the contract according to the invitation to quote.
Consulting Services. Procurement of ―intellectual services‖15
are selected based on either 145
the ―best technical proposal‖ or the ―best technical proposal and price combination,‖ similar to
the Bank’s QBS and QCBS methods, except an additional envelope containing only the firm’s
qualification documents (legal, technical, etc.) is requested and opened first.
The Reverse Auction Law
The system’s second method follows Law 10.520 of 2002 (10.520/02), which regulates a 150
new procurement mode reserved exclusively for off-the-shelf goods and non-consulting services
(items referred to in the Law as ―common goods and services‖16
): These must be procured
through the reverse auction method, commonly known to Brazilians as Pregão—where bidders
compete to provide goods/services to one or more contracting agencies by offering decreasing
prices through dynamic bidding online in real time. 155
The reverse auction is administered by an auctioneer who is a procurement specialist
employed by the auction’s implementing agency and explicitly trained and certified for that role
by the Escola Nacional de Administração Pública (ENAP),17
using materials developed by the
Secretariat for Logistics and Information Technology (SLTI).
A reverse auction is based on a previously published invitation to bid and bidding 160
documents providing detailed guidance to bidders. Initial prices, along with the bidders’
technical, financial, and legal qualifications, are the starting point of the process.
On the date and time specified (in the invitation to bid), the auctioneer launches the
process by verifying the validity of each price proposal received, according to the bidding
documents (e.g. product description, delivery schedules, etc.). Only valid proposals may 165
advance to the auction stage; as it progresses, bidders continue submitting improved offers (ie.
each offer is lower than what the same bidder submitted in the previous turn), always knowing
what the current lowest offer is, until the auctioneer announces the impending closing of the
bidding session (typically prompted by the absence of new offers). After the closing
15
According to articles 45 and 46 of Law 8.666/93, ―intellectual‖ services include calculation/estimation,
supervision/management, information technology, and consulting services—particularly engineering consulting
services of the kind involved in the design of public works.
16 ―Common‖ goods and services are defined by Law 10.520/02 as those where performance and quality
characteristics can explicitly be defined a priori in the bidding documents using widely-known and unambiguous
market specifications. For goods, this typically refers to off-the-shelf items; for services, it typically refers to those
where inputs and outputs can be fully defined a priori and, preferably, quantitatively (for example, meal services).
Consulting services, which are knowledge- and/or advice-based, are not considered ―common services‖ because
their characteristics are largely intangible, their progress tends to have a degree of unpredictability, and their inputs
and outputs typically vary from project to project (and therefore are hard to define a priori).
17 ENAP, or National Academy of Public Administration, is a public educational institution affiliated with the
Ministry of Planning whose purpose is to further the capacity of Brazilian Federal government employees as it
relates to policy making and various other public administration functions.
34
announcement, the bidding session continues for a randomly-defined period of time, but always 170
under 30 minutes, after which the session is declared closed.
When the bidding time expires, the winning bidder is the one that offered the lowest
price, provided that, upon subsequent review, the bidder’s technical, financial, and legal
qualifications substantially respond to the requirements in the bidding documents. Unlike the
processes regulated under the procurement law 8.666/93, the ―post-qualification‖ is conducted 175
only for the winning bidder. The auctioneer may seek clarifications and bids are rejected only
for material deviations from the bidding documents’ requirements. If this occurs, the next lowest
substantially qualified bidder wins the contract.
Where appropriate, the reverse auction has important advantages compared to the offline,
open competitive bidding process because most carried out by the Federal government are 180
internet-based.18
As a result, they typically generate more competition, have substantially lower
transaction costs (including a lower cost of doing business with the government for the bidders),
and are more transparent.
The reverse auction method is much faster to implement than its non-auction based
counterpart (by as much as 4-5 weeks). Law 10.520/02 requires a minimum of 8 business days 185
between advertisement and electronic auction, regardless of the size of the contract. Thus, bid
preparation time for Federal government reverse auctions averages 13.5 business days. It is
estimated that most such auctions (from the time they are advertised to contract awards) are
implemented in 23 business days or less.
A 2008 Presidential Decree (5.504/05) required the use of electronic reverse auctions for 190
procuring all off-the-shelf goods and non-consulting services.19
They were used 34,350 times in
2009 for contracts worth R$20.5 billion and generated savings of 21% over estimates (calculated
from market-representative reference prices). A key reason is the level of competition it
promotes: eg. In 2008, there was an average of 14.2 bidders per electronic reverse auction.20
195
The State of São Paulo
As discussed, the Federal procurement law also applies to states, and its key features
cannot be over-ruled by state or municipal regulations. This regulatory framework is
18
For example, in 2009, 97% of Federal government reverse auction events were conducted online. The auction
implementation procedure for brick-and-mortar reverse auctions (the latter are known in Brazil as Pregão
Presencial) and electronic reverse auctions (known as Pregão Eletrônico), though not identical, is substantially the
same. One key difference between the two, which is inherent in the use of the internet, is the ability to review and
send documents (e.g. price proposals, qualification documents, etc.) online (or sometimes via fax) rather than on
paper, which makes electronic reverse auctions faster and more flexible to implement.
19 According to the Decree, the use of non-electronic auctions may be allowed by the highest procurement authority
in the implementing agency, but only when clearly justified.
20 The average number of bidders per Federal government electronic reverse auction event remained above 12
during 2006-2008.
35
complemented in São Paulo by a series of state legal texts that are fully consistent with their
Federal counterparts and provide further guidance on implementation. The most important are: 200
State Decree 47.297 (2002), which regulates the use of reverse auctions
State Decree 49.722 (2005), which regulates the use of electronic reverse auctions
State Decree 51.469 (2007), which establishes: (a) the electronic reverse auction as the
State’s mandatory procurement method for off-the-shelf goods and non-consulting services;
(b) the mandatory use of e-quotations under the same circumstances as at the Federal level; 205
and (c) the mandatory use of electronic convite (e-convite), which is implemented through
the same procedure as in the Federal law, but conducted online rather than on paper.
State Decree 52.205 (2007), which regulates the use of the state supplier registry and
database system, known as Cadastro Unificado de Fornecedores do Estado de São Paulo
(CAUFESP) by the state administration and prospective suppliers. Prior registration in 210
CAUFESP is required for bidding electronically. Bidders can register online and do not need
to submit additional legal/financial documents when bidding for non-electronic procurement
processes, as the government can verify this information online through the system
State Law 13.121 (2008), which complements Federal regulations on the procedures for non-
auction competitive bidding 215
State Law 13.122 (2008), which regulates the treatment of SMEs when they bid for
government contracts in the State of São Paulo
The regulatory framework for Federal procurement that defines procurement methods,
rules, and procedures applies to São Paulo, with one notable exception. São Paulo changed its
legal framework to adopt a post-qualification procedure which requires that financial envelopes 220
in paper-based procurement be opened first, except in special circumstances that need to be fully
justified.21
The qualifications of the three lowest bidders are evaluated in a second step, which
occurs immediately after ranking the price proposals. This procedure (opening prices before the
qualification documents) is locally called ―inversão das fases.‖ Bids are rejected only for
material deviations in their qualification documents. This approach is being considered by the 225
Federal government.
Bidding Documents
Federal
Bidding documents are regulated by the Federal procurement law which defines their 230
minimum content. They are prepared for specific procurement processes and are reviewed/
cleared by a legal advisor in the implementing unit from the office of the Solicitor General (see
the section on the institutional framework). The government does not issue standard bidding
21
This practice was introduced by State Law 13.121/08 and further regulated by State Decree 54.010/09.
36
documents for mandatory use although several agencies have developed their own model
documents in consultation with the Office of the Solicitor General. 235
São Paulo
São Paulo’s Office of the Solicitor General (Procuradoria Geral do Estado de São Paulo,
or PGE) developed and widely disseminated nine standard bidding documents (SBDs) for
different procurement methods. They are mandatory for all open bidding in the State.
The adoption of these SBDs is consistent with PGE’s responsibility, defined in the state 240
law, to approve and periodically update bidding documents so as to address market conditions
and make procurement more efficient.
PGE also developed/disseminated mandatory standard contract documents, including
general conditions of contract, for public works.
These documents were developed in consultation with the private sector and are 245
consistent with both Brazilian procurement law and the content recommended by the OECD-
DAC benchmarking indicators.
The Institutional Framework
Brazil’s procurement system is implemented by highly qualified, competitively selected 250
and remunerated public servants in the regulatory entity or SLTI, the various implementing
agencies, the Supreme Audit Institution, and the Office of the Solicitor General. These
professionals interact on the basis of clearly defined processes and responsibilities emanating
from a sound legal and regulatory framework comprising Laws, regulations, and operational
Manuals. 255
As for the legal framework, this institutional framework is closely mirrored by São
Paulo’s State procurement system.
The Regulatory Bodies
Federal 260
Brazilian Federal government procurement is centrally regulated by the Secretariat for
Logistics and Information Technology (SLTI), an agency of the Ministry of Planning, Budget,
and Management. SLTI’s activities with respect to public procurement are divided into four
areas: (a) regulations (including creating legal texts of various levels, as well as disseminating
technical guidance and operating manuals); (b) information systems (it manages the use of 265
information technology to support procurement22
); (c) strategic information (eg. measuring,
22
In practice, SLTI outsources the software development and systems maintenance portion of this mandate to a fully
State-owned enterprise called Serviço Federal de Processamento de Dados, or SERPRO, as it is widely known.
Affiliated to the Ministry of Finance, SERPRO provides IT services, including software development and datacenter
services, to public sector clients. SLTI sets the strategic direction for the use of IT in procurement, provides
37
monitoring, and evaluating procurement performance); and (d) contracts (eg. updating and
standardizing content). As a regulatory entity, one of SLTI’s most important roles is to originate
legal texts—whether ordinary laws, which it may propose to the Federal Congress, or lower-
level ones (such as ordinances), which it can design and enact independently. While most legal 270
texts that SLTI proposes or issues apply to all levels of government, the Agency is mainly
concerned with procurement at the Federal level.
São Paulo
In São Paulo, the responsibility to regulate public procurement, complementing SLTI’s
role, is assigned to a multi-disciplinary high-level committee known as Comitê de Qualidade de 275
Gestão Pública (CQGP): It consists of the highest civil servants from eight ministries
(Secretários de Estado) and the State’s Solicitor General. Its mandate, presented in State Decree
51.870 (2007), involves overseeing public administration, such as the use of information
technology (IT), human resources, assets, procurement, contracting, and outsourcing. CQGP
focuses mainly on assessment, policy formulation, and strategy, while a sector agency or task 280
force deals with implementation. Three agencies implement policies and contribute to CQGP’s
regulatory functions: (a) the Ministry of Finance, which has historically taken the lead to
promote electronic procurement through technology;23
(b) the Ministry of Public Management,
which is mainly concerned with measuring, assessing, and improving system-wide performance;
and (c) the State’s Solicitor General’s office, which is mainly concerned with legal aspects, 285
including the use of standard documents.
The Implementing Agencies
Procurement responsibilities in these agencies are the same at the Federal level and at the
State level, although some terms are different (eg. the State Solicitor General has a different 290
name, but the same functions).
The ultimate responsibility for procurement rests with the agency heads. In practice,
ministers and other agency heads delegate it to the agency’s Ordenador de Despesa (Controller),
who is responsible for (a) authorizing the commitment of budget funds to projects; (b) approving
procurement awards and associated disbursements; and (c) presiding over the administrative 295
complaint resolution mechanism (embodied in the procurement law and discussed in more detail
later in this section).
An agency multi-disciplinary team sends the budget commitments, contract awards,
payments, and complaint resolution recommendations to the Controller for approval.
technical guidance to Federal government agencies, and acts as the first point of contact for all IT-related issues in
procurement.
23 It therefore plays a similar role as the SLTI at the Federal level. And, as SLTI outsources the software
development and maintenance portion of its mandate to SERPRO, so too does São Paulo’s Ministry of Finance
outsource such functions to the Companhia de Processamento de Dados do Estado de São Paulo, PRODESP. Fully
state-owned and linked to the Ministry of Public Management, PRODESP provides IT and communications services
to state government agencies.
38
Each team member is responsible for part of the procurement process, as defined in an 300
agency’s regulations; and, all are required to report on their actions/decisions (through minutes,
official reports, and other means, all of which are public) and are held accountable. This team
consists of:
I. A budget and financial management unit staffed with career civil-servant (servidores 305
públicos) accounting and financial management specialists. It is responsible for: (a)
determining if budget resources exist for a procurement event to occur; and (b) processing
payment orders and paying suppliers during contract execution.
II. A procurement unit, staffed with procurement specialists (who are also civil servants) and an
administrative front desk. The specialists carry out various tasks, including: (a) preparing and 310
publishing invitations to bid, bidding documents, and contracts; (b) addressing questions
from bidders before the start of a procurement process; and (c) entering data (eg. bidding
process details) into the Federal government procurement management systems (described
later in this section). The administrative front desk handles the ―logistics‖ of paper-based
bidding processes, such as receiving bids, designating and preparing a venue for the public 315
opening of bids, and providing general administrative support.
III. A permanent bid evaluation committee and one or more permanent auctioneers (for the
reverse-auction processes), responsible for managing the bidding processes (from receiving
bids to recommending bidders for contract awards). This includes (a) approving or rejecting
bids at various stages in the process; (b) resolving complaints; and (c) recommending 320
contract awards. As these staff are civil servants with permanent positions at the
implementing agencies or elsewhere,24
they are appointed by the Controller.
The bid evaluation committee has three or more members who are selected, based on their
experience and expertise, to evaluate the bidders’ qualification documents and price
proposals (usually, at least one member is a procurement specialist). One member is 325
appointed by the Controller to the position of head/chairman. Members are appointed for 12-
month terms, which may be renewed (the procurement law does not allow the entire
committee to be renewed; thus, at any point, at least one member per 12-month term must be
new to the committee).
The auctioneer is a procurement specialist specifically trained (under the supervision of 330
SLTI) and professionally certified to perform that function. Auctioneers are appointed to 12-
month renewable terms.
Both the evaluation committee and auctioneer are assisted by a support team appointed by
the Controller and exclusively comprised of civil servants (who are normally staff at the
implementing agency). A key requirement for support team members is a strong technical 335
familiarity with the goods, services, or public works being procured.
24
According to the procurement Law, at least two members of the bid evaluation committee, as well as the
auctioneer, must belong to the implementing agency’s career staff.
39
According to the Federal Civil Servant Code in Law 8.112/90 (Regime Jurídico dos
Servidores Públicos Civis da União), evaluation committee members and auctioneers are
accountable for their decisions.25
Thus, they may incur administrative and other penalties
(including criminal) if wrongdoing on their part is determined (through internal and external 340
audits and/or criminal investigations).
IV. Special bid evaluation committees and specially-appointed auctioneers, appointed as needed
on an ad hoc basis to manage ―non-standard‖ bidding processes. Such processes require
knowledge, skills, and experience that substantially differ from those needed in more typical
procurement activities (ie., ones that repeatedly occur) at the implementing agency. 345
However, other than the length and nature of their appointments, these committees and
auctioneers function and are held accountable in much the same way as their permanent
counterparts.
V. A legal advisor, who is an attorney with Brazil’s Office of the Solicitor-General (Advocacia-
Geral da União, or AGU), permanently assigned to and located at the implementing agency. 350
The agency’s procurement team is required to receive independent input and clearance from
the AGU legal advisor on all key procurement materials, such as bidding documents and
supplier contracts (see Box 4 below).
VI. A logistics and operations team, consisting of civil servants who function at the receiving
end of the goods/services/works) procured (eg. in the case of off-the-shelf-goods, warehouse 355
personnel in charge of inbound logistics); they report on whether deliveries were made
accurately and on time, according to the legally-binding contractual relationship.
Box 4. The Role of Advocacia-Geral da União (AGU)
in Federal Procurement
Implementing agencies need competent legal advice to successfully conduct the procurement process,
which they obtain from expert attorneys (known as procuradores, or legal advisors) with the Advocacia-
Geral da União (AGU), the country’s Office of the Solicitor-General. These advisors are recruited
through a competitive, open, nationwide recruiting process, as set forth by Article 131 of the Constitution;
all AGU candidates must be certified by Ordem dos Advogados do Brasil, the Brazilian Bar association.
The AGU was established in 1993 by a lei complementar, no. 73. (a particular type of law designed to
complement, rather than amend, the Constitution). Under it, AGU legal advisors are responsible for
examining/approving all bidding documents and supplier contracts associated with Federal government
procurement before their publication. Among other tasks, these advisors ensure the documents comply
with the minimum content requirements specified in the procurement law. The AGU has offices at most
Federal government ministries, to which the procuradores are assigned.
The AGU also manages an education institution called Escola da AGU (AGU Academy). Since 2000, in
25
Decisions made by the bid evaluation committee (eg. award decisions) need not be unanimous. For accountability
purposes, individual committee members who disagree with the committee’s final decision have a right to express
their dissent in the decision briefing report (which is widely published).
40
association with private universities, the academy has offered various postgraduate legal and business
courses (Master’s, MBA, and Ph.D., or their equivalent) as well as training programs for current and
aspiring legal advisors. Through this academy, the AGU provides its professional staff with ongoing
access to training.
360
The Supreme Audit Institution (TCU)
Federal
Brazil’s Tribunal de Contas da União (TCU) is the country’s supreme auditor. On behalf
of the National Congress (to which it reports), it is an oversight entity that investigates and
evaluates the actions and performance of people, institutions, agencies or companies (public or 365
private) that receive Federal money or manage Federal assets with respect to the receipt,
management, and use of public funds. TCU derives its authority from Articles 71 and 73 of the
Constitution, which establish TCU’s role, which is similar to that of the Government
Accountability Office (GAO) in the US.
370
The Constitutional provision that describes its functions includes the following:
I. The entity’s competencies and mandate, including but not limited to:
Assessing any sector-specific results presented annually by the President of the
Republic 375
Assessing the accounts (―contas‖) of public sector managers, at all levels in the
Federal administration, who are responsible, directly or indirectly, for the handling of
public funds and other public assets
Assessing the legality of recruiting decisions at all levels of the Federal
administration 380
Carrying out, either autonomously or by order of the national Congress,
investigations and audits regarding accounting, financial management, budgeting,
asset management, and operations at all administrative units in the Federal
government
Applying, in case of wrongdoing in fund disbursement or account management, all 385
sanctions stipulated by Law, including pecuniary sanctions proportional in size to the
illegal use of public funds, if applicable
Assigning, as a result of a finding of irregularities, timeframes for public agencies and
institutions to correct their practices.
II. The manner in which the entity shall be staffed and, in particular, the characteristics of 390
the TCU ministers (highest decision making authorities for the institution) and the way in
which they shall be appointed.
41
TCU, which has operated for almost 120 years, is considered among the most qualified
and trusted institutions in the country, due to its proven autonomy (protected by the Constitution) 395
and its well-known role as the ―watchdog‖ of taxpayer money and public sector performance. Its
oversight actions—audits, investigations, or reviews—can be triggered by its staff and
complaints/leads from citizens, corporations, and/or civil society organizations that can contact
TCU in various ways, including a toll-free nationwide ―hot line‖ and an online site. This has
strengthened its reputation as an honest broker. 400
Also, its leaders are appointed for life and thus independent of political cycles and
external pressures. The Constitution, which lists their minimum qualifications, requires that the
leaders include nine ministers, three nominated by the President and six by the Congress, all
confirmed by the latter. Their roles and those of the Agency are described in the 1992 Law
8.443. 405
TCU’s role in Federal government procurement, as noted in Article 113 of the
procurement law, is to oversee disbursements for public contracts and hold public agencies
accountable for all stages/steps of the process. As part of its mandate, TCU issues a
comprehensive (and extensively used) operations’ manual for public procurement, which the
Agency updates periodically (it is now in its third edition, released in 2006). 410
São Paulo
São Paulo’s TCU counterpart, the Tribunal de Contas do Estado de São Paulo (TCE/SP),
is responsible for certifying the legality and accuracy of all state agencies’ annual accounts: Its
auditors review various agencies’ performance, including procurement, contract management 415
and execution. It is also a forum for bidder protests (its Federal counterpart is described below).
Technology and the Procurement System
Brazil’s procurement relies on advanced technology, both internally (eg. management
and database systems) and externally (eg. the Internet). Its strategic use at the Federal level and 420
in São Paulo is key to producing efficient and transparent results and exercising effective control
over expenditures. Also, it allows for meaningful assessments of performance and helped
modernize the process as a core government function subject to active, informed management,
rather than an administrative, back-office process. Thus, it is important to understand its structure
and the function of various key systems. 425
Federal
For suppliers and the general public, the face of Federal procurement is ComprasNet, a
website which can be easily accessed with only a computer, Internet connection and web
browser. ComprasNet has several key features. (a) As with other web-based public procurement 430
sites in Latin America, it is a virtual posting board through which all relevant documents
42
associated with Federal procurement are made available (eg. calls for proposals, bidding
documents, notices to suppliers, award decisions, contracts, etc.). Further, it includes a wealth of
information on procurement, including legal texts, research publications, operations’ manuals,
training materials, and news. (b) It can respond to queries—an uncommonly advanced feature in 435
procurement databases. (c) It provides records on bidding processes (past or curent), supplier
lists, reference prices, and catalogs for goods and services. (c) Unlike similar sites in the region,
it is a fully transactional platform where Federal reverse auctions (as well as e-quotations) are
conducted in their entirety, from advertisements to contract awards (as occur in the most modern
public procurement methods worldwide). Also, the system is the only repository in the region 440
(besides in the state of Minas Gerais) with complete online information on public works
procurement.
ComprasNet is only the external interface of the IT system that supports the daily
management of Federal procurement. It is seamlessly linked to Sistema Integrado de
Administração de Serviços Gerais—the Integrated General Services Management System—445
(SIASG), which supports the implementation, management, and control of all types of
procurement at all stages (from planning to contract execution). SIASG communicates directly
with the Sistema Integrado de Administração Financiera do Governo Federal (SIAFI)—the
Federal financial management system—creating the crucial link between procurement and the
management of funds, for monitoring, control, and accountability. 450
SIASG, which is accessed by government users and administrators through dedicated
terminals, has fully interconnected modules that cover a particular function in the procurement
process: It is a network of sub-systems that can process information at the individual contract
level without compromising system performance. The six SIASG modules for procurement are: 455
I. Sistema de Cadastro Unificado de Proveedores (SICAF), or Supplier Unified
Registration System, is a comprehensive database of government suppliers that provides
current data on their legal, fiscal and financial status; SICAF is also seamlessly connected
to other government databases, such as for the tax and revenue service and social
security, which allows it to continuously retrieve supplier-specific information. It also 460
pre-registers suppliers online through a direct link to ComprasNet. As noted earlier,
bidder participation in some procurement processes (eg. online reverse auctions and
tomada de preços non-auction events) require SICAF registration. Since bid evaluation
committees can consult it during procurement events (as in electronic reverse auctions),
this greatly hastens the qualification assessment process. As of August 2009, SICAF had 465
registered 373,000 suppliers.
II. Sistema de Divulgação Eletrônica de Compras (SIDEC), or Procurement Electronic
Announcement System, publishes invitations to procurement events (ie. calls for bids) on
both ComprasNet and in Brazil’s Federal official gazette; it allows for bidding documents 470
to be downloaded and publishes bidding decisions as they occur.
III. Sistema de Preços Praticados (SISPP), or Historical Price Posting System, publishes and
receives queries about past contract awards/prices in Federal government bidding. It is
43
the main source, along with primary market research, for agencies to reference prices 475
when assessing bid proposals.
IV. Sistema de Minuta de Empenho (SISME), or Budget Assignment Clearance System, uses
a direct connection to SIAFI to generate budget assignment orders before invitations to
tender are published. SISME provides a critical control mechanism by which 480
procurement processes that lack a budget assignment clearance cannot be launched.
V. Sistema de Gestão de Contratos (SICON), or Contract Management System, allows the
financial and physical progress of Federal government contracts to be registered and
monitored. It also makes key parts of contracts publicly available in both ComprasNet 485
and the Federal official gazette.
VI. Catálogos de Materiais e de Serviços (CATMAT/CATSER) is the system’s goods and
services catalog. It identifies those the government commonly acquires and provides their
technical specifications and performance descriptions. This information is useful for 490
designing bidding documents, among other things. Both CATMAT and CATSER can
readily be queried, and their contents downloaded via ComprasNet. As of August 2009,
the catalogs listed approximately 194,000 goods and 2,550 services (including public
works construction services).
495
The SIASG modules are interrelated throughout the procurement process. Before a
procurement event can formally be advertised, the implementing agency commits the required
budget funds through SISME. At the same time, fund commitments are automatically recorded
in SIAFI through the SISME-SIAFI direct link. Once a budget assignment is cleared, the call for
bids and related documents (eg. bidding documents) are entered into SIDEC, which ensures the 500
materials will be automatically published at the official gazette and ComprasNet website. If the
procurement involves off-the-shelf goods or non-consulting services, a reverse auction is
arranged and implemented through ComprasNet. Otherwise, a non-auction competitive bidding
process is conducted offline. For both, authorities rely on supplier-specific information available
through SICAF (especially during reverse auctions) to asses bidder qualifications. Similarly, 505
prices offered by suppliers are compared against reference prices listed in SISPP (and sometimes
augmented by input from market research).
Every decision of the bid evaluation committee or auctioneer, in reverse auctions (not
only the ultimate award decision but others that may precede it) is published through SIDEC as it
is made. When the contract is awarded, its contents—particularly terms and conditions—are 510
entered into SICON (manually for offline, paper-based processes or automatically via
ComprasNet, for online reverse auctions). Meanwhile, SIDEC publishes the contract award
information in both ComprasNet and the Federal official gazette.
As an added control, payments to suppliers can only be made for contracts entered into
the system as described above (ie. registered through SICON and cleared by SISME). During 515
contract execution, invoices are registered in SIAFI, which connects to SIASG’s SISME to
corroborate budget commitments and, subsequently, make payments.
44
São Paulo
As with the Federal government, São Paulo has sophisticated technology to support 520
procurement, including four easily accessed external sites that function the same as ComprasNet.
They include:
(a) Bolsa Eletrônica de Compras do Governo do Estado de São Paulo, or BEC/SP, run by the
State’s Ministry of Finance, hosts all its electronic reverse auctions, e-convite, and e-525
quotation transactions. Its database and information are available to suppliers and the general
public. To use BEC/SP to bid electronically, suppliers must be registered at CAUFESP, the
database of suppliers of São Paulo; they can register online, which involves submitting
certain documents to the Ministry of Finance on paper. The site provides access to:
The State’s procurement legal and regulatory framework 530
Standard bidding documents for electronic reverse auctions
Data on current and past electronic reverse auctions, e-convite, and e-quotation
events, through a query link
Online CAUFESP pre-registration for suppliers
The State’s goods and services catalog 535
Statistics on past transactions conducted through the site
Operations’ manuals
Training material for suppliers on the CAUFESP registration process, electronic
reverse auction process on BEC/SP, and the BEC/SP site
Notices to suppliers and/or the public 540
General news on electronic government procurement
(b) Pregão (www.pregao.sp.gov.br), run by the Ministry of Public Management, is a virtual
posting board and database for reverse auctions (both on- and offline). The site provides
access to:
The legal and regulatory framework 545
Standard bidding documents for both electronic and brick-and-mortar reverse
auctions
A list of the reverse auctions announced for the day
A database of current and past reverse auctions with details on the agencies involved,
item(s) procured, bidding documents, event dates, times, physical/electronic 550
addresses, publication dates for bids, and auctioneers’ names
Performance indicators as well as operations’ and financial statistics on reverse
auctions
45
A database of reference prices for off-the-shelf goods and non-consulting services
Support features for auctioneers, including training material, operations’ manuals, and 555
access to a web-based auction registration tool
Training material for suppliers
Frequently asked questions
(c) Cadastro de Serviços Terceirizados (Outsourced Services Registry), or CADTERC, jointly
run by the Ministry of Public Management and the administration’s internal auditor 560
(Corregedoria Geral da Administração, (CGA), is an online database where all information
for non-consulting services contracted by the State is consolidated. CADTERC was created
to provide the administration, suppliers, and public with easy access to (1) service contracts,
(2) the status of payments under the contracts, (3) reference prices for services contracted by
the State, (4) technical studies by service type, and (5) performance indicators and 565
quantitative data on the procurement of non-consulting services.
(d) e-negociospúblicos (www.imesp.sp.gov.br), the website of the State official gazette, known
as Diário Oficial, is where all major actions/decisions on any procurement process—
regardless of method and invitation mode—are published, from the call-for-bids to contract
signature. The site allows users to review procurement events by economic segment, 570
implementing agency, region, or municipality, as well as bidding documents.
The internal IT with which these four sites communicate is connected through two
systems: (1) Sistema Integrado de Administração Financeira para Estados e Municípios
(Integrated Financial Management Information System for States and Municipalities), or 575
SIAFEM/SP26
, and (2) a real-time Sistema Integrado de Informações Físico-Financeiras
(Integrated Physical and Financial Information System), or SIAFISICO. SIAFEM/SP simplifies
and standardizes budget and financial planning, asset management, and accounting. SIAFISICO
manages all data on budget commitments and implementation. Together, they are São Paulo’s
counterpart to SIASG and SIAFI, the Federal public management systems; as such, payments to 580
state suppliers cannot be authorized without prior budget commitment obtained through the
SIAFISICO-SIAFEM/SP connection. Further, all states and municipalities must publically
disclose detailed records on budget commitments/payments (according to Federal Law 131 of
2009); thus, São Paulo publishes the records online through the Ministry of Finance webpage,
using data generated by SIAFEM/SP. 585
São Paulo also created the Sistema de Acompanhamento de Investimentos (Investment
Monitoring System), or SAI, to physically and financially monitor all public works contracts in
the state. It provides more detailed information than SIAFISICO, such as current progress on
execution (with a user-friendly, color-coded view of their status), explanations for delays,
26
Both SIAFEM/SP and SIAFISICO are further supported by a data warehousing system called Sistema de
Informações Gerenciais da Execução Orçamentária (Budget Execution Information Management System), or
SIGEO. It allows for the rapid access to vast amounts of stored data on procurement and financial management.
46
amounts paid to contractors, and planned contract cash flows. Since SAI’s data can quickly be 590
accessed and evaluated, the site is particularly helpful to high-level administrators and senior
state government officials.
Overview of the Procurement Process
Federal 595
The procurement process starts with by identifying the end-user’s needs. These range
from relatively simple single-item procurement, eg. off-the-shelf goods, to complex projects, eg.
public works and consulting services. This step always includes a price estimate (based on
market prices) and the procurement method to be adopted (eg. reverse auction, or other open
competitive bidding). The next step is to obtain the Controller’s clearance to commit the 600
corresponding budget, as required by Brazil’s Fiscal Responsibility Law, whereby no
procurement process may be started without an ex-ante budget allocation consistent with the
Federal government’s annual budget and multi-annual expenditure plan. These budgets and
plans are very detailed and include both cost estimates and types of expenditures (recurrent
versus capital costs, and goods, works or services). 605
Once the budget is committed, invitations to bid and bidding documents must be
published on the Federal government procurement Internet site, in the Federal official gazette
(Diário Oficial da União), and, depending on the procurement mode, in a widely circulated
newspaper in the State and (if available), immediate area (eg. a municipality) where the
procurement will occur. Detailed estimated costs, including unit prices, are in the bidding 610
documents released to bidders. The estimated cost is usually the ceiling for maximum bid prices
and bids above it might be rejected.
Bids must be received by the date and time specified in the invitation, and late bids are
rejected.27
Bid evaluation is confidential and the authority managing the process (ie. the
auctioneer or the bid evaluation committee) selects the winning bid according to award criteria as 615
specified in the bidding documents. The award decision and a description of the process
followed are immediately published on the Federal procurement website and in the Federal
official gazette.
For five business days (two business days for convites) after the award is published,
bidders and other interested parties may challenge it (see Complaint Resolution28
below). The 620
controller then must approve it (a procedure called homologação), and formally awards it to the
27
In the case of offline competitive procurement methods (non-auction competitive bidding and bricks-and-mortar
reverse auctions), bids are rarely submitted significantly in advance of the deadline (ie., almost all bid packages are
submitted on the deadline date and slightly prior to the deadline time). For electronic reverse auctions, bids must be
submitted at the date and time specified in the call for bids, as the submission process is fully supported online.
28 The length of the complaint and counter-complaint submission period, regulated by Law, varies according to the
procurement method and (if applicable) mode. Such filings are processed through a resolution and appeals
mechanism explicitly provided by the procurement Law, (described below).
47
winning bidder (the adjudicação). Both the homologação and adjudicação decisions are
published on the Federal procurement website and in the Federal official gazette.
Next, the AGU legal advisor reviews and clears the contract document, confirming that it
fully complies with minimum content required by the procurement Law. Finally, the contract is 625
signed by the Controller and it is published in both venues.
Strong contract management processes are also in place; payments must be made within
30 days of receiving an invoice.
São Paulo
While some of the institutions have different names, procurement processes in São Paulo 630
closely resemble those in the Federal administration.
The budgetary and planning controls apply equally at the Federal and State level:
Every year, State implementing agencies prepare comprehensive spending plans (including
for procurement), which each then submits to the Ministry of Planning and Economics
(Secretaria de Economia e Planejamento, SEP). 635
After assessing the agency-specific plans, SEP submits an aggregate State budget proposal to
the Legislative Assembly (State Congress), which votes on the proposed budget; if approved,
it then becomes the annual budget law (Lei Orçamentária Annual, or LOA).
A key input to the legislature assessing the budget plan’s merits is the multi-year Plano
Plurianual (PPA), which is a medium-term expenditure framework prepared by the executive 640
branch (and approved by Congress) once in every four-year term. The LOA must reflect the
PPA goals.
The LOA carries Congressional authorization for the administration to execute expenditures,
by type, over a 12-month period.
Procurement transactions proposed by end-users at the agencies may only be authorized if 645
consistent with the LOA (under the Controller’s supervision)
No procurement process may begin without an explicit budget commitment; as with Federal
procurement, this fundamental control mechanism is enforced through a direct link between
the procurement and financial management systems. 650
Both the controller and procurement team are supported and approved by legal advisors
from the State’s Office of the Solicitor General (Procuradoria Geral do Estado, or PGE). Like
their AGU counterparts at the Federal level, PGE legal advisors are trained in procurement and
permanently assigned to implementing agencies. It is their responsibility to ensure that agencies
use the standard bidding and contract documents and to provide advice on legal issues during all 655
procurement processes.
Bid Protest System
Federal
48
Transparency and due process at all stages of procurement are addressed in the regulatory 660
framework and considered a priority by all institutions involved. According to the Constitution,
all government documents must be publicly available, including those used in procurement.
Thus, bidders may inspect every bid received by an implementing agency as the public bid
opening ceremony occurs (whether an auction or another mode). Bidders are informed of all the
auctioneers’ and bid evaluation committee decisions29
and may protest at certain points in the 665
bidding process—with respect to the invitation and bidding documents, and cancellation of the
process.
Bidders wanting to protest must first do so with the authorities that managed the
process—either the auctioneer or bid evaluation committee (Article 109 of the procurement
Law). The authorities’ decisions (about the protest) may be appealed to the implementing 670
agency’s controller. The Law sets strict time requirements: eg. Bidders may protest the bidding
documents up to five business days before the bid opening, which is known as impugnação, and
implementing agencies (both in the first instance and for the appeals) must respond within three
days of the filing. During the bidding process, bidders must protest within two-five days
(depending on the procurement method) after the decision is publicized, and the agency must 675
decide on the protest (known as recurso) within five days.30
If bidders are dissatisfied with the decision, they may appeal to the Supreme Audit
Institution (TCU), an independent authority with strong capacity and reputation, that reports to
the legislative branch. While the usual practice is to follow this approach, Article 113 allows
interested parties to go directly to the TCU without first protesting or waiting for an agency to 680
make a decision. However, unlike the administrative channel, the Law sets no time periods for
the TCU to decide. Thus, when a protest is submitted to the TCU, the procurement process may
be protracted, as it is suspended pending this authority’s decision on the case.
Finally, bidders and interested parties can access the courts at any time during the
procurement process (besides the administrative remedies), to protest a decision by an 685
implementing agency. As with the TCU, this may delay the process, since no specific time is
prescribed for a court’s decision.
São Paulo
The complaint resolution mechanism in São Paulo is essentially the same as that of the 690
Federal government, since both rely on the Federal law. However, there are some minor
differences. Appeals are based on a two-pronged approach, depending on the funding source: If a
contract is funded by State revenues, the responsibility rests with the State Supreme Auditor,
TCE/SP. If it is Federal, appeals fall under the Federal Supreme Auditor, TCU.
29
Authorities’ deliberations, on the basis of which award and related decisions are made, are conducted under strict
confidentiality.
30 The response time may take a few more days if one or more counter-complaints are filed by bidders who consider
themselves affected by the original filing. Such counter-complaints must be filed within two-five days of the original
complaint (depending on the procurement method and, if applicable, the invitation mode).
49
695
Integrity
Federal Government
Various entities oversee the procurement system. At the agency level, an internal auditor
exercises the first level of control. CGU, which reports to the Ministry of Finance, provides
oversight for the entire Federal executive branch. TCU serves as the external auditor, based on 700
its Constitutional mandate and is responsible for validating the accounts of all agencies
implementing Federally-funded contracts.
The Federal government coordinates all levels of oversight; and, in a recent diagnosis of
Brazil’s control mechanisms, the World Bank said it performs well.
Overall, the GOB has been able to clarify, systematize, regulate and coordinate 705 the control framework and distinguish roles and responsibilities among the
various oversight agencies. This has resulted in greater integration and sharing
of information. These changes have resulted in improved overall control of
capital and social program expenditures and have engendered increased public
confidence in the oversight mechanisms. They also have enhanced the IFI’s 710 ability to rely positively on such procedures when designing and supervising
operations that increasingly rely on national public financial management
systems and accountability arrangements31
.
CGU has many tools to exercise its control function, assess risks and provide inputs to 715
manage risk. Besides traditional annual financial audits, it can review special accounts at any
time during the fiscal year to identify, follow-up and, when necessary, reverse financial
transactions that may have resulted improper use of taxpayer funds. Also, CGU can conduct
special audits in response to independent allegations of wrongdoings received at one of the many
public sources (website, toll-free phone number, letter) or exposed by the media. These can also 720
be launched as part of CGU’s regular risk management procedures; they are usually done in
conjunction with Federal prosecutors. Further, CGU is responsible for overseeing the integrity of
government officials. It also performs a more detailed civil service conduct review.
The Federal government actively encourages citizens to help oversight agencies perform
their controls. CGU maintains a website, the Transparency Portal, which presents, inter alia, 725
current data on public revenues and expenditures, details on bidding processes and contract
implementation, and a database of debarred and suspended firms. The Transparency Portal
collects huge amounts of data from various public information systems, such as SIASG, SIAFI,
SICAF, SISME and others. For specific information on Federal procurement, Comprasnet
provides information on all bidding processes for goods, works and services, including those not 730
subject to competition. TCU keeps a data system with information on Federal procurement; and,
31
Report No. 39780-BR Brazil Policy Note: Enhancing the Performance of Federal Financial Management Systems.
June 30, 2008.
50
through data-mining processes, the supreme auditor can greatly improve the effectiveness of its
oversight and implement modern risk management processes.
The Federal government has a comprehensive anti-corruption framework. The Polícia
Federal, or Brazil’s FBI, runs an anti-corruption program that investigates allegations of fraud 735
that can be filed through several different means—from audits, allegations from citizens, private
sector companies or civil society organizations, or in the press. When obtained from audits (done
either by internal auditors, CGU or TCU), cases are referred to the Polícia Federal for
investigation and, if appropriate, to the Attorney-General’s Office (Ministério Público) for
prosecution. Because procurement processes and contract implementation are fully presented 740
online, the private sector, civil society organizations and the press play an important role in
controlling Federal government actions. Several civil society groups, such as Contas Abertas,
Transparência Brasil, ABRAJI and others, are active in this area.
São Paulo 745
Procurement control and oversight in São Paulo are conducted through a three-tier
structure, similar to in the Federal government. These include agency-level auditors, the internal
auditing agency of the executive branch (CGA), which reports to the Office of the Chief of Staff,
and the State’s external auditor (reporting to the legislative branch), Tribunal de Contas do
Estado de São Paulo, or TCE/SP. CGA, which is São Paulo’s counterpart of the CGU (the 750
Federal internal auditor), (1) reviews prices paid for non-consulting services, (2) monitors the
use of electronic reverse auctions by all government agencies, and (3) assesses agencies’ requests
for exceptions to the (mandatory) use of reverse auctions and order-inversion of bid assessment
stages in non-auction competitive bidding (such requests may be filed online). As mentioned
earlier, CGA also shares responsibility for maintaining the CADTERC system, which manages a 755
great deal of data on the procurement of non-consulting services. Last, it administers an open-
access website through which it receives complaints/allegations from the public, and on which it
can respond by launching special investigations.
TCE/SP is the external auditor and reports to the State legislature. It is responsible for
certifying the legality and accuracy of the annual accounts of all state agencies. 760
Facts and performance indicators of the Federal government procurement system
In 2009, Brazil’s Federal procurement was R$49.7 billion (about $25 billion), or 1.6% of
GDP, according to SLTI:32
77% of this amount was awarded through open competitive bidding 765
processes—either reverse auctions (47% of the total) or non-auction competitive bidding—in
32
SLTI, Ministério do Planejamento, Orçamento e Gestão, ―Estatísticas Gerais das Compras Governamentais:
Número de Processos/Itens e Valor de Compra 2009‖ (2010). It should be noted that the R$50 billion is solely for
Federal procurement—excluding states and municipalities (whether organically funded or funded through Federal
transfers), as well as procurement by the legislature, judiciary, and state-owned enterprises.
51
40,177 bidding events. Of the 40,000+ competitive bidding events, 88% were reverse auctions.
Of these, 88% were conducted online.
Non-auction competitive bidding was used to award another 31% in one of three modes:
95% was through the concorrência, 4% through the tomada de preços, and 0.4% through the 770
convite.
As to the types of item procured, 46% was used for goods, while 54% was for services
and the construction of public works; regarding type of supplier, 29% was awarded to small and
medium size enterprises.33
Since the reverse auction law was passed in 2002, the growth in the use of this method 775
has been remarkable. This was due to (a) its procedural advantages (supported by technology)
and (b) the legal mandate in the regulatory framework. While in 2002, there were only 4,710
reverse auction events (a mere 9% online) for about R$3.5 billion,34
by 2009, 35,433 occurred—
97% online—for R$23.2 billion.
Electronic reverse auctions—the fastest growing segment among all procurement 780
methods—were used 34,350 times in 2009 to award contracts worth R$20.5 billion. This amount
represented a savings of 21% with respect to the a priori estimated award sizes provided by
implementing agencies (which are calculated from market-representative reference prices). A
key reason (an average saving of 19% a year from 2002-2009), is the amount of competition
attracted to these events: eg. In 2008, there was an average of 14.2 bidders per electronic reverse 785
auction.35
Scholars and practitioners note that a minimum of 5-6 bidders is generally consistent
with savings-generating events.36
33
The Federal government refers to these suppliers as ―micro and small enterprises,‖ with annual revenues of up to
R$2.4 million (about $1.3 million).
34 In 2009, Brazilian reais, adjusted by the country’s benchmark IPCA inflation index.
35 The average number of bidders per Federal government electronic reverse auction event remained above 12 from
2006-2008.
36 For example, Smeltzer, Larry R. and Amelia Carr, ―Reverse Auctions in Industrial Marketing and Buying,‖
Business Horizons, March-April 2002.
Chapter III: Scoring for the Federal Government
Summary of scoring by area – Federal Government
I. Legislative and Regulatory Framework Proposed
Score
Benchmark
score
1) The public procurement legislative and regulatory framework achieves the agreed
standards and complies with obligations
(a) Scope of application /coverage of the legislative and regulatory framework. 3 3
(b) Procurement methods 2 2
(c) Advertising rules and time limits 3 3
(d) Rules on participation 2 3
(e) Tender documentation and technical specifications 3 3
(f) Tender evaluation and award criteria 3 3
(g) Submission, receipt and opening of tenders 3 3
(h) Complaints 2 3
2) Existence of implementing regulations and documentation
(a) Implementing regulations that define processes and procedures not included in higher-level
legislation 3 2
(b) Model tender documents for goods, works, and services 2 2
(c) Procedures for pre-qualification 3 2
(d) Procedures for contracting for services or other requirements in which technical capacity is a
key criterion 3 2
(e) User’s guide or manual for contracting entities 3 2
(f) General conditions of contracts (GCC) for public sector contracts covering goods, works and
services consistent with national requirements 2 3
II. Institutional Framework and Management Capacity Proposed
Score
Benchmark
score
3) The public procurement system is mainstreamed and well integrated into the public
sector governance system
(a) Procurement planning and expenditures are part of the budget creation process and contribute to
multi-year planning 3 2
(b) Budget law and financial procedures support timely procurement, contract execution, and
payment. 3 2
(c) No procurement actions without existing budget appropriations. 3 2
(d) Completion reports are prepared for certifying budget execution and reconciling delivery with
budget programming. 3 2
4) The country has a functioning regulatory body
(a) The status and basis for the normative/regulatory body is covered in the legislative and
regulatory framework 3 2
(b) The body has a defined set of responsibilities 3 2
(c) The body’s organization, funding, staffing, and level of independence and authority (formal
power) to exercise its duties should be sufficient and consistent with the responsibilities. 3 2
(d) Responsibilities should be clearly delineated to avoid conflicts of interest and direct
involvement in procurement transactions. Pass Pass/Fail
5) Institutional development capacity
(a) The country has a system for collecting and disseminating procurement information, including
tender invitations, requests for proposals, and contract award information. 3 2
(b) The country has systems and procedures for collecting and monitoring national procurement
statistics. 3 2
(c) A sustainable strategy and capacity exist to train, advise and improve the government’s
procurement function and private sector 3 2
(d) Quality control standards are used to evaluate staff performance and address capacity
development issues. 2 2
III. Procurement Operations and Market Practices Proposed
Score
Benchmark
score
54
6) The country’s procurement operations are efficient
(a) Government officials’ procurement competence is consistent with their responsibilities. 3 2
(b) Procurement training and information programs for government officials and private sector
participants are consistent with demand. 3 2
(c) Norms exist to safeguard records and documents related to transactions and contract
management. 3 2
(d) Provisions exist to delegate authority to others who have the capacity needed. 3 2
7) Functioning of the public procurement market
(a) Effective mechanisms exist for partnerships between the public and private sector. 3 2
(b) Private sector institutions are well organized and able to access the procurement market. 3 2
(c) There are no major systemic constraints (eg. inadequate access to credit, contracting practices,
etc.) blocking the private sector’s involvement in procurement. 2 2
8) Provisions for contract administration and dispute resolution
(a) Procedures are clearly defined for undertaking contract administration responsibilities 2 2
(b) Contracts include procedures that provide an efficient and fair process to resolve disputes during
the performance of the contract. 2 3
(c) Procedures exist to enforce the outcome of the dispute resolution process. 3 3
IV. Integrity and Transparency of the Public Procurement System Proposed
Score
Benchmark
score
9) The country has effective control and audit system
(a) A legal framework, organizations, policies, and procedures for internal and external control and
audit of public procurement exist. 3 2
(b) Enforcement and follow-up on findings and recommendations provide an environment that
fosters compliance. 3 2
(c) The internal control systemd provide timely information on compliance to management. 3 2
(d) The internal control systems are sufficiently defined to conduct performance audits. 3 2
(e) Auditors are sufficiently informed about procurement requirements 3 2
10) Efficiency of appeals mechanism
(a) Decisions are taken on the basis of available information; final decisions can be reviewed and
ruled upon by a body (or authority) with legal enforcement capacity. 3 3
(b) The review system can handle complaints efficiently. 2 3
(c) The system operates in a fair manner. 3 3
(d) Decisions are published and made available to all interested parties and the public 3 2
(e) The system ensures that the review body has full authority and independence to resolve
complaints. Pass Pass/Fail
11) Access to information
(a) Information is published and distributed through available media. 3 2
12) Ethical standards and anti-corruption measures are in place
(a) The legal and regulatory framework for procurement addresses corruption, fraud, conflict of
interest, and unethical behavior. 3 3
(b) The legal system defines responsibilities, accountabilities, and penalties for individuals and
firms that engaged in fraudulent or corrupt practices. 3 3
(c) Rules and penaltiesa are enforced. 3 2
(d) Special measures exist to prevent and detect fraud and corruption. 3 3
(e) Stakeholders (private sector, civil society, and end-users) support an ethical procurement
market. 3 2
(f) The country has a secure mechanism for reporting fraudulent, corrupt, or unethical behavior. 3 3
(g) Codes of Conduct/Ethics are in place for participants in the public financial management
systems. 3 2
55
Assessment of the Federal procurement system and proposed scores
This section summarizes the results of LCSPT’s assessment with respect to the OECD
benchmarking standards. Based on the OECD/DAC tool (see Annex B, ―Use of Country
Procurement Systems in Bank-Supported Operations: Proposed Piloting Program,‖ 2008), each
indicator was assigned a score.
A score of 3 indicates the generally-accepted international practice was achieved.
A score of 2 indicates the system needs to be improved in the specific area noted, but
there has been substantive compliance with the standard.
This section focuses on the critical factors that affect whether the system is either in full,
partial or non-compliance with the benchmarks.
I. The Legislative and Regulatory Framework
Indicator 1. The public procurement legislative and regulatory framework s meet standards and compliance obligations.
Summary for Indicator 1
Sub-indicators Proposed
Score
Benchmark
score
(a) Scope of application and coverage of the legislative and regulatory
framework. 3 3
(b) Procurement methods 2 2
(c) Advertising rules and time limits 3 3
(d) Rules on participation 2 3
(e) Bid documents and technical specifications 3 3
(f) Bid evaluations and award criteria 3 3
(g) Submission, receipt and opening of bids 3 3
(h) Complaints 2 3
(a) Scope of application and coverage of the legislative and
regulatory framework.
The legislative and regulatory body complies with the following:
(1) Is adequately recorded and organized hierarchically (laws, decrees,
regulations, procedures) and precedence is clearly established.
(2) All laws and regulations are published and easily accessed by the
public at no cost.
(3) It covers goods, works, and services (including consulting
services) for all procurement using national budget funds.
Proposed
Score
Benchmark
Score
3 3
56
(1) The legislative and regulatory framework governing Federal government procurement is
strictly hierarchical and statute-based, reflecting the legal structure of the country’s civil law
system. The highest-level legal text in the framework is Brazil’s Constitution (Constituição).
In Article 37, paragraph XXI, it states that procurement of goods, works, and services, except
where explicitly specified in the procurement law, must be conducted through open
competitive bidding mechanisms and in a way as to guarantee fairness, economy, and
efficiency. All lower-level legal texts in the framework contain more detailed procedural
guidance on implementing the Constitutional mandate on procurement. These texts include
the following:
- Lei ordinária (ordinary law) is a legal text with general norms that directly apply the
Constitution. Approving ordinary laws is the exclusive responsibility of the legislative
branch. The most important one in the procurement framework is Law 8.666/93, the
Procurement Law, complemented by Law 10.520/02, the Reverse Auction Law.
- Decreto (Decree) is a legal text created by the chief of the executive branch (in the case
of Federal decrees, Brazil’s President) to detail and regulate the application of an
ordinary law (it is thus synonymous with a regulation). A prominent example is Decree
5.450/05, which regulates the use of electronic reverse auctions. The Bank team
reviewed all procurement decrees and found them consistent with the primary sources.
- Instrução Normativa (IN, or normative instruction) is a legal text to regulate public
management practices (in this case, procurement) at the micro level (much more specific
than with ordinary laws or decrees). For example, an IN can describe the procedures and
special provisions that apply to procuring cleaning and security services for Federal
government agencies.
- Portaria (Ordinance) is an agency-level regulation which provides further guidance for
applying and interpreting ordinary laws, decrees, and INs.
Decree 1.094 of 1994 empowers SLTI—the Federal procurement regulatory agency— to be
the only authority that issues INs and portarias to regulate procurement practice.
International treaties are incorporated into the legal framework as ordinary laws. Where
contradictions arise among ordinary laws, the most recent law applies.
(2) All laws and regulations are made widely available to the public at no cost, primarily
through the Internet.37
The ComprasNet website is the repository of procurement
information, including the legal documents. Its home page has a Legislação (legislation) link
with sub-links to Laws, Decrees, INs, and portarias. In addition to ComprasNet, the Federal
government maintains a dedicated webpage within the Presidência (Office of the President)
website,38
where all the country’s laws and decrees are available. From it, laws and decrees
37
The Brazilian Constitution has a provision (Article 5, paragraph XXXIII) requiring mandatory disclosure of all
government documents, including those related to procurement.
38 http://www.presidencia.gov.br/legislacao/.
57
relevant to procurement may easily be retrieved. Legal texts are also made available to the
general public in hard copy upon request at no cost.
(3) Procurement Law (8.666/93) and the Reverse Auction Law (10.520/02) together
constitute the legal framework, regulating all types of procurement (goods, works, and
services, including consulting services). At the Federal level, the SIASG-SIAFI network
ensures that no procurement is launched without proper budget commitment approval.
Condition status: All are fully met.
(b) Procurement methods
The legal framework meets the following conditions:
(1) Allowable procurement methods are established at a partiacular level in
the hierarchy, along with the conditions under which each may be used,
including a requirement for approval by the official held accountable.
(2) Competitive procurement is the default method.
(3) Fractioning of contracts to limit competition is prohibited.
(4) Standards for international competitive tendering are specified, consistent
with international standards
Proposed
Score
Benchmark
Score
2 2
(1) Procurement methods and thresholds are defined in Articles 20 to 26 of Law 8.666/93.
Open competitive bidding is the mandatory method, as defined in Article 23, paragraph 3 of
Law 8.666/93. Law 10.520/02, a complementary legal text to Law 8.666/93, introduces the
reverse auction procurement method, which can only be used for off-the-shelf goods and
non-consulting services, regardless of the estimated cost. Reverse auctions are open
competitive processes as required by the law. Presidential Decree 5.504/05 made the use of
reverse auctions mandatory for procuring goods and non-consulting services (to be done
electronically whenever possible). All procurement methods must obtain the Controller’s
approval to commit budget resources. The Controller is the official accountable for
procurement at the agency level.
(2) Federal procurement, as set forth in the Constitution and regulated in the legislative
framework, can only be implemented (with narrowly defined exceptions, according to Law
8.666/93) through competitive methods—reverse auctions and non-auction (two- or three-
stage) open competitive bidding processes.
(3) It is illegal to break a contract down into smaller contractual units to avoid the use of a
more competitive procurement process, according to Law 8.666/93.39
This regulation is
enforced automatically by controls in the procurement and financial management information
systems (SIASG and SIAFI). Even when a contract is financed from multiple budgets, the
39
Article 23, paragraph 5.
58
systems can block any attempt to separate contracts by recognizing the expenditure category
and commodity type. Thresholds for each method are detailed below.
To procure works and engineering services with an estimated cost up to R$150,000 (about
$83,000) and goods up to R$80,000 (about $44,000), government agencies can use a method
known as convite.
To procure works and engineering services above R$150,000 and up to R$1.5 million, (about
$830,000), and goods up to R$650,000 (about $357,500), agencies can use a method known
as tomada de preços.
To procure works and engineering services above R$1.5 million (R$650,000 for goods),
agencies must use the concorrência method. However, this method may be used for any
procurement—regarless of the cost—if an agency prefers it. Similarly, the tomada de preços
mode may be used in place of a convite.
See Box 3 in Chapter II for details on each method.
With regard to the reverse auction presented in Law 10.520/02 (and further regulated, in its
electronic variety, by presidential Decree 5.450/05), no threshold limits its use. However, it
can only be used for off-the-shelf goods and non-consulting services (see Chapter II for
details).
(4) Both procurement methods—reverse auctions and non-auction open competitive
bidding—are consistent with the international standard for competitive tendering: Any
interested bidder must be allowed to participate. With reverse auctions, openness and
competition are further enhanced by the ease of the processes which are conducted online.
These processes can be accessed from any Internet connection. Bidders are invited to offer a
total price for goods, works and services, including all taxes, fees, levies, insurance,
transportation and any other costs to have them delivered to the final destination. Thus, bids
to procure goods are invited on terms similar to the INCOTERM DDP.
Condition status: All are fully met. But, bids for procuring goods are asked to list
the total price (for delivery to the final destination), which is not considered an
international standard as required by item (4) of this sub-indicator. For this
reason, a score of 2 is proposed. The Region proposes to address this issue at the
project level with a specific clause in bidding documents for processes subject to
international competition.
(c) Advertising rules and time limits
The legal framework meets the following conditions :
(1) Requires that procurement opportunities other than sole source or price
quotations be publicly advertised.
(2) Publication of events provides enough time, consistent with the method,
nature and complexity of the procurement, for bidders to obtain documents
and respond to the advertisement. Such timeframes are extended when
international competition is sought.
(3) Publication of open tenders is mandated in at least a newspaper of wide
Proposed
Score
Benchmark
Score
3 3
59
national circulation or an Internet official site, where all public procurement
opportunities are posted, that is easily accessible.
(4) Content of publication includes enough information for potential bidders
to determine their ability and interest in bidding.
(1) Other than sole-source transactions (see Chapter II for where these are legally permitted)
every Federal procurement (including price quotations) is publicly advertised on the
ComprasNet website and in the Federal official gazette, regardless of estimated contract size
and procurement method. Besides these arenas, depending on the method and mode, some
opportunities may be advertised in national, state, and/or municipal newspapers. ComprasNet
can also email any SICAF-registered supplier who requests this service of upcoming reverse
auctions immediately after they are advertised online.
(2) Prospective bidders are provided adequate time to obtain documents and respond to bid
invitations. Timeframes specified in the Law are consistent with the procurement method and
complexity of the particular process. For example, for consulting services estimated at R$1.5
million (about $840,000) and awarded on the basis of ―best technical proposal,‖ a minimum
period of 45 days is required for preparation. For a goods or works contract of the same
amount (awarded on the basis of the lowest offered price), a minimum of 30 days is required.
Shorter times are required for smaller contracts.
For reverse auctions, as defined by Law 10.520/02, the minimum time to submit bids is eight
days regardless of the estimated award size. This short period is justified by the simple
requirements associated with preparing bids for reverse auctions (off-the-shelf goods with
standard specifications and a streamlined administrative process) and has worked well,
increasing efficiency and savings.
(3) ComprasNet is the official single website where all public procurement opportunities are
advertised. These notices are supported by technology that guarantees compliance with the
goal of widespread, comprehensive, easily accessed advertisements for public procurement.
All bid notices are electronically launched through SIASG’s SIDEC, which automatically
publishes them in the Federal official gazette as well as on ComprasNet. As an added control,
CATMAT/CATSER classifications of the goods, works, or services must be listed. SLTI
maintains this classification system.
Further, Law 8.666/93 requires that all non-auction open competitive bidding events with an
estimated award size of over R$150,000 (about $84,000) be advertised in a widely circulated
newspaper (besides the ComprasNet website and official gazette).
(4) Bid notices must provide enough information for bidders to determine their qualifications
for, and interest in the procurement; also, they must comply with minimum content
requirements established by SLTI. Such compliance is also enforced through the SIDEC
tool, as the system may not publish a bid notice without listing the required minimum
content.
60
Required minimum content includes the buyer’s contact information, procurement method,
description of goods, works, or services to be procured, date the bidding documents are
issued, Internet link where bidding documents can be downloaded, bid opening date, and
contact information for venue where bid openings will occur (if offline).
Condition status: All are fully met.
(d) Rules on participation
The legal framework meets the following conditions:
(1) Establishes that participation of any contractor, supplier or group of
suppliers/contractors is based on qualification or according to international
agreements; requires the use of pass/fail basis to determine qualifications to
the extent possible; limits domestic price preferential, if allowed, to a
reasonable amount (eg.15% or less); and requires justification for set-asides
that limit competition.
(2) Ensures that registration (if required) does not constitute a barrier to
participation or require mandatory association with other firms.
(3) Provides for exclusions for criminal or corrupt activities, administrative
debarment under the Law (subject to due process), or prohibition of
commercial relations.
(4) Establishes rules that promote fair competition for the participation of
government-owned enterprises.
Proposed
Score
Benchmark
Score
2 3
(1) Participation is based on qualification requirements that are objective (eg. quantifiable or
verifiable rather than subject to interpretation), and always applied on a pass/fail basis.
Law 8.666/93 defines the type/nature of the technical, financial, legal, and tax compliance
documents required as a condition of responsiveness, as well as the specific circumstances
under which some or all of them may be required. Failure to submit them, or the submission
of documents that do not meet requirements, causes bids to be rejected.
With reverse auctions, bidders may remedy non-material deviations in these documents (eg. a
missing financial statement from a past year when the more recent ones were originally
submitted). When performed online, reverse auctions streamline the qualification assessment
process (as well as the bid preparation process) by allowing the auctioneer to review fiscal
and legal qualification documents electronically via the SICAF database.
Finally, no preference is granted to local bidders over foreign bidders. However, if two or
more bidders submit the same bid price, which is the lowest evaluated bid, Law 8.666/93
states that preference should be given (in the following order) to goods, works, and services
produced or rendered: (i) by Brazilian firms funded with domestic capital; (ii) in Brazil; (iii)
by Brazilian firms (regardless of how they are funded); and (iv) by firms that invest in
research and development in Brazil. If a tie persists, the winner is named based on a random
draw among them.
61
However, for IT goods and services, the legal framework allows for preference to those
manufactured locally or which involve technology developed in Brazil. According to Decree
7.174 (2010), local bids that fall within the range of 10% of the lowest evaluated bid –
(provided it is not local in the terms of the Law) - may offer a new price that will match or
beat the lowest evaluated bid. If locals forgo this opportunity (to beat the lowest evaluated
bid), the ranking of bids will follow normal procedures defined in the procurement or reverse
auction laws. With the ―best technical proposal and price combination‖ process, preference
will only apply to the price proposed, and the new price proposal should outbid the best
ranked proposal. As explained in sub-indicator 1(f) of this Chapter, this process only applies
for procuring intellectual services or in very specific circumstances for major goods; in these
cases, the top official of the purchasing agency must approve the action.
Another exception to the requirement that all companies be treated equally (Article 3) is
stated in Law 123 (2006), or the general law of small and medium enterprises (SMEs)40
which introduces a tie-breaking criterion that favors such businesses. Specifically, any bid
from a qualified SME that is equal to or within 10% of the lowest-priced proposal when the
latter was submitted by a qualified non-SME bidder (5% in the case of reverse auctions) will
be considered as ―tied‖ with it. The SME bidders will then be allowed, if they wish, to re-
issue a price proposal that is lower than the originally-lowest priced bid, to win the contract.
(2) Foreign bidders need to be locally incorporated to bid for government contracts—a
requirement mainly created in order to make any prospective government supplier, domestic
or foreign, subject to the same legal and judicial system (thus making all bidders compete for
and execute government contracts under equal rules and conditions).
Local incorporation implies registering in the Cadastro Nacional de Pessoas Jurídicas
(CNPJ), the taxpayer registry run by the Ministry of Finance (Ministério da Fazenda). Once
registered, applicants are issued an identification code known as the CNPJ number. Since
obtaining a CNPJ number requires a Brazilian address, foreign company applicants must
either establish a local branch office (in fact, many choose to develop production and/or
service facilities in Brazil, where a large domestic market justifies such investments) or
designate a local agent to serve as the legal representative. Once incorporated in Brazil,
foreign companies (and foreign capital) are legally treated as local. In 1995, Brazil’s
Constitution eliminated all legal distinctions between majority foreign-owned and majority
locally-owned companies. Thus, domestic and foreign companies incorporated in Brazil are
treated equally when bidding for government contracts. This corresponds to a widely held
perception in the international market, as recently noted by the Economist’s Intelligence
Unit:
Legally registered companies—foreign or domestic—now enjoy the same rights
and privileges, and they compete on an equal footing when bidding on contracts or
seeking government financing.41
40
The Law refers to SMEs as micro and small enterprises. Micro enterprises are defined as those with annual
revenues of up to R$240,000 (about $133,000); small enterprises are those with annual revenues above R$240,000
and up to R$2.4 million (about $1.3 million).
41 Brazil – Country Commerce Report. The Economist Intelligence Unit. September 2010.
62
All procurement processes, regardless of method (ie., auctions and non-auctions), require
single bidders (as opposed to joint, or consortium-based) to provide their CNPJ number.
With joint bids prepared by one or more foreign and one or more Brazilian companies, Law
8.666/93 states that only a Brazilian company among the consortium members can act as the
bid’s legal representative (such a company is referred to by the Law as the bid’s ―leader‖).42
Since the legal representative in a consortium must be a domestic firm (which by definition
will have CNPJ registration), foreign parties to a consortium are not required to possess a
CNPJ number at the time of bid submission. According to the World Bank’s Doing Business
in 2010 report, applying for a CNPJ number takes about 22 days and the service is provided
at no cost to the applicant.43
While Law 8.666/93 allows for the submission of joint bids between foreign and national
firms, foreign bidders are never required to associate with local companies in order to
participate in public procurement events.
(3) Law 8.666/93 excludes companies from bidding if they have been convicted of criminal
or corrupt activities as well as for administrative debarment. Under the Law, due process
must be followed before any sanctions are applied, and court decisions are subject to appeal.
Companies found guilty of fraud and corruption or any other criminal activities are debarred
and excluded from signing contracts at all government levels. All supplier-specific sanctions
and debarment decisions are registered in SICAF, the Federal supplier registration system,
which ensures automatic enforcement.
(4) Fully state-owned enterprises created with the sole purpose of supporting the public
administration,44
based on the procurement law, may not bid for government contracts (nor
provide services to the private sector). Companies partly owned by the government (many of
which are publicly traded) are legally and financially autonomous, operate under commercial
law, are treated as private enterprises, and can bid for government contracts, according to
Article 37, clause XXI of the Constitution.
Condition status: (3) and (4) are fully met; (1) is only partially met because of
preferences given to SMEs and to bids with local content in procuring IT goods and
services; (2) is only partially met since, while no mandatory association with local
firms exists, the requirement to have local legal representation may pose a barrier
to participation in tenders to some bidders. For the reasons presented, a score of 2
42
Bidding documents normally distinguish between requirements that must be observed by a consortium’s leader
from those followed by the rest of the consortium. The qualification assessment for a consortium also follows
particular rules, which are stated in the procurement law and must be clearly explained in the bidding documents
(along with special requirements for the bid’s leader).
43 A special CNPJ registration bypass routine was developed for foreign bidders interested in participating in
procurement events under Bank-financed projects. As of this writing, however, none have requested the special
bypass provision for procurement financed by the Bank.
44 Serviço Federal de Processamento de Dados, or SERPRO as it is commonly known, is an example of such an
enterprise. Fully state-owned, it is attached to the Ministry of Finance and provides IT services and support to the
Federal government (as such, it supports SIASG, among other major systems).
63
(out of 3) is proposed. The Region proposes to address the issues at the project
level as is now done on all current projects. More details on the proposed
corrective measures are discussed in the action plan.
(e) Bidding documents and technical specifications
The legal framework meets the following conditions:
(1) Sets the minimum content of the bidding documents and requires that
content is relevant and sufficient for bidders to respond.
(2) Requires the use of neutral specifications citing international
standards when possible.
(3) Requires equal standards when neutral specifications are unavailable.
Proposed
Score
Benchmark
Score
3 3
(1) Article 40 of procurement Law 8.666/93 sets forth the minimum content for tender
documents so as to provide enough information for potential bidders to successfully respond
to a call for bids. These include:
A clear description of items (goods, services, works) for tender
Bidding process timeframes, including the one for contract signing and
goods/services delivery
For public works, the physical address and/or Internet location where general and
detailed project designs can be obtained
Requirements for submitting bids (both content and format)
Bid evaluation and award criteria
Supplier payment schedules and conditions
Article 4 of the reverse auction law also stipulates minimum content for bidding documents,
with substantially the same requirements as those above.
To ensure that Federal agencies comply with the legal requirements on minimum content, all
bidding documents must be reviewed and cleared by an expert legal advisor hired, trained,
and appointed (on an agency-specific basis) by the Federal Office of the Solicitor-General
(Advocacia-Geral da União).
(2) Article 15 of the law explicitly forbids the use of brand names in defining technical
specifications, which can only include technical and functional characteristics. Since the risk
of using brand names and other non-neutral descriptions is especially important in procuring
off-the-shelf goods, the reverse auction law (Article 3) echoes Article 15 of the procurement
law by requiring neutral specifications and forbidding any references or statements that might
limit or restrict competition. If a brand or label is given, it must be followed by the
expression ―or similar.‖ CATMAT, the goods database, does not include brand names or
labels as part of the system’s specifications.
64
(3) Both Article 15 of the procurement law and Article 3 of the reverse auction law are
designed to eliminate limits to competition on the basis of standards, brand names, or any
other item- or supplier-specific characteristics.
Condition status: All are fully met.
(f) Bid evaluations and award criteria
The legal framework mandates that:
(1) Evaluation criteria are relevant to the decision, and specified in the
bidding documents so the award is made solely on the basis of those
presented.
(2) Criteria not evaluated in monetary terms are evaluated on a
pass/fail basis to the extent possible.
(3) Evaluation of proposals for consulting services gives adequate
importance to the quality and regulates how price and quality are
considered.
(4) During the evaluation period, information about the examination
and clarification of bids is not disclosed to participants or others not
involved officially in the process.
Proposed
Score
Benchmark
Score
3 3
(1) Article 40 of the procurement law requires that evaluation criteria and qualification
requirements be clearly described in the bidding documents and based on ―objective
parameters;‖ Article 3 of the reverse auction law performs the same function.
(2) Qualification requirements are objective by law (as noted above), and assessed, without
exception, on a pass/fail basis. For evaluations, price is the sole criterion in the reverse
auction, which is the default method for procuring off-the-shelf goods and non-consulting
services; also, price is the only criterion for procuring works. Under exceptional
circumstances (which must be cleared by ministers or their equivalent), the procurement law
allows the use of ―best technical proposal and price combination‖ or ―best technical
proposal‖ for major equipment with sophisticated technology or when the alternatives
available in the market will present significant differences with respect to productivity,
quality, and reliability—provided such differences can be measured objectively.
(3) The procurement law provides award criteria for consulting and similar ―intellectual‖ (ie.
knowledge- and/or advice-based) services based on the ―best technical proposal‖ and ―best
technical proposal and price combination.‖ For either, the law explicitly regulates how price
and quality are considered.
(4) The bid evaluation process is strictly confidential. All information related to the
examination/evaluation of bids, as well as deliberations in the qualification decision and
award processes, is of the exclusive concern of the bid evaluation committee.
65
Condition status: All are fully met.
(g) Submission, receipt and opening of bids
The legal framework provides for the following conditions:
(1) Public opening of bids in a defined, regulated proceeding immediately
after the closing date for submitting bids.
(2) Records of proceedings for bid openings are retained and available for
review.
(3) Security and confidentiality is maintained before bid opening; disclosure
of specific sensitive information during deliberations is prohibited.
(4) The government clearly defines the way bids are submitted to avoid any
from being unnecessarily rejected.
Proposed
Score
Benchmark
Score
3 3
(1) Bids must be opened in a public proceeding, as defined and regulated in Article 43 of the
procurement law (for non-auction competitive bidding) and Article 4 of the reverse auction
law (for reverse auctions). All bids submitted after the deadline are rejected; only those
submitted before the deadline may participate in the public opening.
While the procurement law does not explicitly state that the bid opening ceremony for a non-
auction competitive event must occur immediately after the submission deadline, it is the de
facto practice. However, the reverse auction law does explicitly state that the public opening
of bids will immediately follow the submission deadline (in the case of electronic reverse
auctions—which account for 97% of all reverse auctions by the Federal government—the
practice is automatically enforced by the ComprasNet electronic system).
(2) For all procurement methods and invitation modes, detailed minutes of the proceedings at
bid-opening ceremonies are kept electronically and freely available for review on
ComprasNet.
(3) With electronic reverse auctions, bids are submitted online before the deadline under
appropriate Internet security protocols (ie. using international authentication and encryption
standards). The e-procurement platform for hosting electronic reverse auctions only allows
for opening bids at the day and time set for the event exclusively by the auctioneer.
For other procurement methods, the procurement law requires that bids received before the
deadline to be securely and confidentially kept by the evaluation committee (bids must be
submitted in sealed envelopes). The early submission of bids, however, is rare in Brazil;
rather, bidders usually deliver their packages just before the deadline.
Disclosure of bid information during post award debriefing is full, as required by the
Constitution. Submitted bids are considered public documents and are made available to any
interested party upon request, as clearly defined in the legal framework.
66
(4) Bid submission procedures are clearly defined and accessible to all through various
means. Reverse auction bids are submitted electronically through the Federal government
procurement web portal, and ComprasNet includes significant information, manuals and
guidance on how to participate. Bids for procuring civil works and consulting services under
Law 8.666/93 are delivered in hard-copy before the submission deadline, usually at the site
of the bid opening ceremony (which typically occurs just after the bid submission deadline
expires) and according to clearly-defined rules in the bidding documents. Rejection rules, as
they relate to submission, receipt, and opening of bids, are also clearly defined. For example,
late submission causes bids to be rejected; Federal agencies have a front desk that stamps
each bid package with date and time of delivery.
Condition status: All are fully met.
(h) Complaints
The legal framework provides for the following:
(1) Participants have the ight to review the procurement process
(2) Provisions to respond to a request for review at the procuring-agency level
with administrative review by another body independent from it, with the
authority to grant remedies; also, provisions for judicial review.
(3) Establishes the matters that are subject to review
(4) Establishes timeframes for issuing decisions by the procuring agency and
administrative review body.
Proposed
Score
Benchmark
Score
2 3
(1) As stated in the procurement law, bidders (and all citizens) have a right to review
decisions made by procurement authorities (auctioneers and bid evaluation committees)
through two channels:
An agency-level administrative complaint resolution process (generally the
mechanism of first resort), which has full authority to issue enforceable decisions that
are final, subject to appeal;
An appeals body, which is the country’s Supreme Auditor (TCU). TCU’s decisions
are enforceable and final.
(2) While the two-tiered administrative complaint resolution process is administered by the
procuring agency, TCU may also be involved directly, without complaints first being
submitted to the agency. TCU is fully independent not only from the agency but also from
the executive branch. Also, it has the authority to grant remedies as final and to order judicial
reviews.
(3) Matters subject to review are stipulated in the procurement law, and include:
Bidder qualification assessment decisions
Bid rejection decisions
67
Award decisions
Bid event cancellations or withdrawals
SICAF registration decisions (eg., denying a bidder the opportunity to register in the
system)
Contract termination
Decisions on fines and other administrative measures
(4) The administrative complaint resolution process has clearly defined timeframes for
issuing decisions, as noted in the procurement law (see Chapter II for details). There are no
timeframes for reviews by TCU.
Condition status: All conditions are fully met, except for item (4) which is partly
met because there are no timeframes for TCU. For this reason, a score of 2 is
proposed.
Indicator 2. Implementing Regulations and Documents
Summary for Indicator 2
Sub-indicators Proposed
score
Benchmark
score
(a) Regulations that define processes and procedures not included in
higher-level legislation. 3 2
(b) Sample bidding documents for goods, works, and services 2 2
(c) Pre-qualification procedures 3 2
(d) Procedures for contracting services or other requirements in which
technical capacity is a key criterion 3 2
(e) User’s guide or manual for contracting entities 3 2
(f) General conditions of contracts (GCC) for goods, works and
services consistent with national requirements and, when applicable,
international requirements
2 3
(a) Regulations that define processes and procedures not included
in higher-level legislation
Regulations supplement the procurement law, meeting the following
requirements:
(1) They are clear, comprehensive and consolidated as a set, available
in one accessible location.
(2) They are updated regularly.
(3) The responsibility for maintenance is defined.
Proposed
Score
Benchmark
Score
3 2
68
(1) Regulations that supplement and detail the provisions of the procurement and reverse
auction laws are comprehensive (ie. cover the full range of topics as defined in the laws),
clear (ie. detailed enough to provide guidance on the legal framework), and readily available
in consolidated fashion in one accessible location (ComprasNet).
(2) SLTI, the Federal procurement regulatory body, is responsible for updating regulations
according to presidential Decree 1.094 (1994).
(3) Because it originates from a presidential Decree, SLTI’s responsibility is clearly defined.
Condition status: All are fully met.
(b) Sample bidding documents for goods, works, and services
(1) Invitation and bidding documents are provided for a wide range of
goods, works and services procured by government agencies;
(2) A standard and mandatory set of clauses or templates reflect the legal
framework, for use in competitive bidding documents.
(3) Documents are up-dated, with responsibility for preparing and up-
dating clearly assigned.
Proposed
Score
Benchmark
Score
2 2
(1) To ensure that public procurement funds are lawfully awarded and disbursed, TCU issues
(and periodically updates) a comprehensive operations’ manual45
for Federal employees,
public procurement specialists, suppliers, and the general public. The manual provides
sample invitation and bidding documents that Federal agencies use to procure goods, works,
and services.
Also,various Federal agencies (a good example is the National Department for Transport
Infrastructure (DNIT), which conducts all major transportation procurement at the Federal
level) have developed their own standard bidding documents to promote compliance with the
regulatory framework.
(2) Article 40 of the procurement law introduces mandatory minimum-content, legally
acceptable standards to which all bidding documents must comply. They are observed by all
agencies and apply to all types of goods, works, and services. AGU legal advisors assigned to
various Federal agencies enforce this part of the law, providing guidance on and approving
all bidding and contract documents.
45
Tribunal de Contas da União, ―Licitações & Contratos: Orientações Básicas,‖ 3ª Edição, Brasilia, 2006.
69
(3) TCU is responsible for producing and periodically updating a comprehensive
procurement manual that includes sample invitation documents and sections of bidding
documents. Other parts of the standard minimum content, such as technical specifications of
the items to be procured, are kept curent with the aid of technology, through SIASG’s
CATMAT and CATSER goods and services registration and catalog modules.
Condition status: All conditions are partially met as explained above. A score of 2
is proposed for this sub-indicator because the Federal government does not
publish standard, mandatory bidding documents to all Federal agencies.
(c) Pre-qualification procedure
This procedure:
(1) Limits the content of pre-qualification criteria based on the needs of the
specific procurement
(2) Specifies the use of pass/fail.
(3) Provides guidance on when to apply it.
Proposed
Score
Benchmark
Score
3 2
(1) The legal and regulatory framework includes a clear procedure for pre-qualification. It
stems from Article 114 of the procurement law, which sets conditions for applying it and the
manner in which it will be applied.
Bidder pre-qualification may only be required if the concorrência method is applied under
the non-auction, open competitive bidding method (which typically has the largest awards),
and if the particular process is appropriate for pre-qualification, given its scope and
objectives. Moreover, its use must be approved in advance by an agency’s highest
procurement authority (usually the controller) based on detailed (written) justification by the
bid evaluation committee.
(2) Pre-qualification is conducted on a pass/fail basis. Article 114 says it must be consistent
with the procurement law’s rules for open competitive bidding in general, and concorrências
in particular, which are based on objective criteria and the pass/fail principle.
(3) As mentioned above, the procurement law provides specific guidance on when to apply
the procedure and how to use it (under the agency’s controller, and adhering to all the
invitation and bid evaluation assessment principles described in the law).
Condition status: All three are fully met.
(d) Procedures for contracting services or where technical capacity is a
key criterion
The legal framework and its regulations provide for the following:
Proposed
Score
Benchmark
Score
3 2
70
(1) Conditions where selection based exclusively on technical capacity or
price/quality are appropriate.
(2) Procedures and methods for assessing technical capacity and combining
price and technical capacity under different circumstances.
(1) Selection procedures exclusively based on either technical capacity alone or the
combination of price and technical capacity/quality, as well as the conditions for their use,
are presented in the procurement law. Article 45 introduces the ―best technical proposal‖ and
―best technical proposal and price combination‖ criteria along with those of ―lowest offered
price.‖ Article 46 states the conditions under which these criteria should apply—specifically
when procuring services that are ―intellectual in nature,‖ especially those associated with the
production of designs (eg. for public works), calculations, estimates, supervision,
management, engineering, and other types of consulting services, and technical studies.
(2) Article 46 also offers procedures and methods for applying the criteria. With
―intellectual‖ services,46
awards are based on either the ―best technical proposal‖ or the ―best
technical proposal and price combination.‖ For these, bidding documents always require the
proposal to be an integral part of the bid package and bidders must submit three sealed
envelopes: The first has the legal, financial, fiscal, and technical qualification documents; the
second has the technical proposal; and the third has the price proposal. Qualification
envelopes are opened first. Only bidders considered to have fully responded to the bidding
documents move to a second stage, when technical proposal envelopes are opened. These are
scored on the basis of objective criteria, and only those which attain a minimum pre-defined
score (based on the bidding documents) move to the (third and final) price stage. The nature
of the price stage varies by award criterion, as follows:
Using the ―best technical proposal‖ criterion, the bidder with the highest technical (second-
stage) score is given the first chance to present (ie., negotiate) a price that the agency could
consider acceptable. The negotiation is guided by two parameters: (i) a price ceiling, which is
stated in the bidding documents as the highest amount the agency will pay (calculated on
market-based reference prices); and (ii) the lowest offered price among third-stage bidders. If
both parties cannot agree on a price, the bidder with the second-highest technical score would
be invited to negotiate, and so on, until an agreement is reached and a winner declared.
Using the ―technical proposal and price‖ criterion, instead of negotiating in the third stage,
the prices offered by third-stage bidders are weighted with their second-stage technical scores
to obtain a weighted average score for the entire process (based on a formula presented in the
bidding documents). The bidder with the highest weighted score wins the contract.
Condition status: All are fully met.
46
According to Articles 45 and 46, ―intellectual‖ services include calculation/estimation, supervision/management,
information technology, and consulting services—particularly engineering, for designing public works.
71
(e) User’s guide or manual for contracting entities
(1) A manual describes all procedures for administering procurement
regulations and laws.
(2) The manual is regularly updated.
(3) Responsibility for maintaining the manual is clearly established.
Proposed
Score
Benchmark
Score
3 2
(1) As mentioned earlier, TCU prepared a manual that describes the procedures for
administering procurement regulations and laws. More than 400 pages long, the manual
covers every aspect from planning to contract execution, relating its content to the legal and
regulatory framework.
(2) TCU periodically updates the manual, which is in its third edition (2006); a second was
published in 2003. It is updated when the laws and regulations change, or when there is
enough material to require a new version.
(3) Through its Supreme Auditor mandate, TCU has clear responsibility over the manual’s
development, circulation and updating.
Condition status: All are fully met.
(f) General condition of contracts (GCC) for public sector contracts
covering goods, works and services consistent with national requirements
and, when applicable, international requirements
Both of the following apply:
(1) GCCs exist for the most common types of contracts and their use is
mandatory.
(2) Their content is generally consistent with internationally accepted practice.
Proposed
Score
Benchmark
Score
2 3
(1) GCCs appear in the legal framework in the form of minimum content requirements for all
types of contracts. Besides regulating procurement processes, Procurement Law 8.666/93
devotes a chapter to preparing and executing government contracts. Articles 54-56 define
minimum contract content. Also, as with bidding documents, the law requires all contract
documents to be approved by an AGU legal advisor before they are signed and published.
This ensures consistent enforcement of the minimum content requirement.
(2) According to Article 55, minimum content requirements include:
Nature of the item and commercial relationship between the supplier and agency that
originates the contract
Contract execution and delivery conditions
Prices, payment conditions, and price and/or payment adjustment criteria (if any)
Timeframes for contract execution stages, contract closure, deliveries, final payment, and
other aspects that apply to the transaction and commercial relationship
72
When required, nature and conditions of performance guarantees
Rights and responsibilities to which each party subscribes, including penalties and fines,
if any
Conditions for a contract cancellation
Nature of handling imports, including monetary adjustments, if relevant
Explicit link between the contract and the bidding documents, and the supplier’s winning
bid
The laws/regulations that apply to the contract and its execution
The obligations the supplier must meet throughout the contract, based on the bidding
documents and its own winning bid
Such minimum requirements are compatible with internationally accepted practice.
Conditions status: All conditions are partly met as explained above. A score of 2 is
proposed because the Federal government does not publish mandatory GCCs for
all Federal agencies. The required score for this sub-indicator is 3 but a corrective
measure is not recommended because the Region proposes a pilot project in the
State of São Paulo that has mandatory GCCs for the agencies. All bidding
documents and GCCs published by São Paulo were assessed during the pilot’s
preparation (see Chapter IV for details).
II. Institutional Framework and Management Capacity
Indicator 3. The public procurement system is mainstreamed and well integrated with the governance system.
Summary for Indicator 3
Sub-indicators Proposed
score
Benchmark
score
(a) Procurement planning and associated expenditures are part of the
budget formulation process and contribute to multi-year planning 3 2
(b) Budget law and financial procedures support timely procurement,
contract execution, and payment. 3 2
(c) No initiation of procurement actions without budget appropriations. 3 2
(d) Systematic completion reports are prepared to certify budget
execution and reconcile delivery with budget programming. 3 2
(a) Procurement planning and associated expenditures are part of the
budget formulation process and contribute to multi-year planning
(1) A regular planning exercise (responding to laws or regulations) includes:
Proposed
Score
Benchmark
Score
3 2
73
• First, preparing multi-year plans for government agencies, from which
annual operating plans are derived
• Second, preparing annual procurement plans and estimates for associated
expenditures
• Third, creating the annual budget
(2) Procurement plans are prepared to support the budget planning and
formulation process.
(1) Procurement planning is regulated in the legal framework. Articles 165-167 of the
Constitution describe the key elements of budget preparation, approval, and execution; the
procurement law provides more details on how parts of the Federal budget allocated to
procurement must be used. Such planning includes all three layers defined by this indicator:
a multiyear plan, an annual procurement plan consistent with the multi-year plan, and
agency-level budgets that are consistent with the annual procurement plan.
Federal procurement is ultimately linked to a four-year plan called Plano Plurianual (PPA),
prepared by the executive branch and approved by Congress (Federal administrations, which
are elected for four-year terms, prepare a PPA during their first year in office, which
becomes effective at the start of the second year). A similar process is followed to prepare
and approve a yearly budget plan, known as Lei de Orçamento Annual (LOA): The annual
budget is prepared by the executive branch and approved by Congress. All LOA components
must be linked to the PPA.
(2) Federal agencies prepare their own procurement and investment plans which are
submitted to the Secretaria de Orçamento Federal (SOF), or Secretariat for the Federal
Budget, an entity within the Ministry of Planning. SOF consolidates the agencies’
procurement plans and submits them to Congress. Federal agencies may only launch a
procurement process if a related budget has been approved by Congress in the LOA—thus
creating the link between procurement and budget planning/execution.
Condition status: All are fully met.
(b) Budget law and financial procedures support timely procurement,
contract execution, and payment.
(1) Budget funds are committed or appropriated within a week from when
the contract is awarded to cover the full amount of the contract (or the
amount to cover the part performed within the budget period).
(2) Business standards are published on the way in which agencies’ process
invoices—to meet contract obligations for timely payments.
(3) Payments are authorized within four weeks after invoices or monthly
certifications for progress payments are approved.
Proposed
Score
Benchmark
Score
3 2
74
(1) The Fiscal Responsibility Law47
requires mandatory commitment of sufficient funds
before the signing of contracts. In fact, budget allocation and commitment of funds are a
necessary condition to advertise the bidding process: SIDEC, the SIASG module that allows
procurement events to be publicized, will not publish an invitation to bid if the budget
allocation has not been assigned.48
AGU legal advisors review the budget commitment and
bidding documents (a mandatory activity) for clearance.
(2) A well-defined process exists for reviewing and paying invoices. Once goods, works or
services are delivered, as defined under the contract, suppliers/consultants/contractors submit
invoices that must be approved by the contract supervisors. A payment order is processed
through the SIAFI electronic system—a process known as liquidação---and SIAFI releases
funds to the supplier’s bank account.
(3) According to TCU’s procurement manual and the procurement law, certain payment
standards must be followed by Federal contracting agencies:
For amounts up to R$8,000 (about $4,430), payments must occur within five business
days after invoices are received
For amounts over R$8,000, payments must occur within 30 days.
Based on the law, suppliers accrue interest on delayed payments.
Condition status: All are fully met.
(c) No initiation of procurement actions without budget appropriations.
(1) The law requires that funds are certified as available before bids can be
requested.
(2) A paper or electronic system exists that links the financial management
and procurement systems, ensuring the law will be enforced.
Proposed
Score
Benchmark
Score
3 2
(1) Closely related to what was described above, both the Fiscal Responsibility and
Procurement Laws require not only that funds be certified as available but also that a budget
is fully commited before the solicitation of bids can occur.
47
Approved by Congress in 2000, the Fiscal Responsibility Law regulates budgetary planning, execution, and
reporting at all government levels. One key goal is the sustainability of government debt. To achieve it, the law
stresses the need for multi-year planning and uses tools such as financial performance indicators and the setting (and
monitoring) of fiscal targets.
48 Budget commitment, or empenho, is processed in SIASG’s SISME, which then records the commitment in SIAFI,
the Federal financial management system, using the workflow feature linking the procurement and financial
management systems at the Federal level.
75
(2) SISME (within SIASG)49
is an electronic system that ensures the Fiscal Responsibility Law
is enforced: Funds are committed through its interface with SIAFI, the Federal government
financial management system, before a procurement process can be launched. SISME
automatically generates the budget assignment orders required as a condition to advertise a
contract.
Condition status: All are fully met.
(d) Systematic completion reports are prepared to certify budget
execution and reconcile delivery with budget programming.
Proposed
Score
Benchmark
Score
3 2
SIAFI maintains detailed, updated data on the budgetary, financial, and physical status
of all Federal contracts and their implementation. Their availability is a requirement for
payments to be made.
Agencies may produce their own consolidated reports directly from SIAFI, and
supplement them with more information from SIASG, the Federal procurement
management system, since the systems are interconnected.
Condition status: All are fully met.
Indicator 4. The country has a functional normative/regulatory body.
Summary for Indicator 4
Sub-indicators Proposed
score
Benchmark
score
(a) The status and basis for the normative/regulatory body (SLTI)
is covered in the legislative and regulatory framework 3 2
(b) The body has defined responsibilities that include but are not
limited to the following: 3 2
(c) The body’s organization, funding, staffing, and level of
independence and authority (formal power) to exercise its duties
should be sufficient and consistent with the responsibilities.
3 2
(d) The responsibilities should also provide for separation and
clarity to avoid conflicts of interest and direct involvement in the Pass Pass/Fail
49
See ―Technology and the Procurement System‖ in Chapter II of this report for details about SISME, SIASG and
SIAFI.
76
execution of procurement transactions.
(a) The status and basis for the normative/regulatory body is covered in
the legislative and regulatory framework
Proposed
Score
Benchmark
Score
3 2
Presidential Decree 5.719 (2006) assigns coordination, planning, supervision, and policy
making authority for Federal procurement to SLTI, the Secretariat for Logistics and
Information Technology within the Ministry of Planning. SLTI’s status is reinforced by
Article 5 of Decree 1.094 (1994) which states that only the Ministry (ie. the agency to which
SLTI belongs) has the authority to regulate government procurement.
Condition status: Fully met.
(b) The body has a defined set of responsibilities that include but are not
limited to the following:
Advising contracting entities;
Drafting amendments to the legislative and regulatory framework and
implementing regulations;
Monitoring procurement;
Providing procurement information;
Managing statistical databases;
Reporting on procurement to other parts of government;
Developing/supporting initiatives to improve the procurement system;
Providing implementation tools and documents to support staff training
and capacity development
Proposed
Score
Benchmark
Score
3 2
Decree 5.719/06 assigns all eight functions to SLTI:
- It can draft amendments to the legislative framework to submit to Congress through the
President. It can also implement regulations: For example, SLTI developed and proposed
to Congress the reverse auction law No. 10.520, which was passed in 2002. It has also
presented proposals to amend the procurement law, most recently in 2008.
- SLTI’s continual monitoring of Federal procurement, as well as its periodic reporting on
performance and outcomes, is aided by SIASG and ComprasNet.
- SLTI specialists, known as the Strategic Information Unit, define, maintain and update
statistical databases on procurement.
- SLTI designs new features to improve the information systems supporting procurement
(SIASG, ComprasNet).
77
- The Secretariat provides training to Federal agency officials at various levels: In
particular, an outstanding capacity-building effort to support the rapidly-growing reverse
auction practice has been underway since 2002.
- SLTI is leading the development/implementation of a major information system to
support procurement/contract management at the state and municipal levels for all
processes funded by Federal earmarked transfers.
Condition status: All are fully met.
(c) The body’s organization, funding, staffing, level of independence and
authority (formal power) to exercise its duties should be sufficient and
consistent with its responsibilities.
Proposed
Score
Benchmark
Score 3 2
SLTI’s power to exercise its duties stems from the Ministry of Planning, Budget, and
Management, which makes it responsible for regulating procurement and contracting, and
providing norms and guidelines on the technology used in Federal management.
SLTI’s staffing and funding are sufficient and consistent with its responsibilities, as
evidenced by the agency’s record over the past 10 years. During that time, its staffing and
funding allowed it to:
- Develop the proposal for, and eventually support the enactment of, the landmark reverse
auction law (2002)
- Develop and implement regulations and training content (eg. operations’ manuals) to
launch the reverse auction law
- Develop, along with SERPRO,50
the transactional, web-based system that handles the
many thousands of Federal agency electronic reverse auctions each year
- Reduce the incidence of direct contracting in Federal procurement51
- Integrate a team of analysts to continually monitor key procurement performance
indicators system-wide
- Support the enactment of Law 123 (2006)--for small and medium enterprises (SMEs)52
–
which introduces a tie-breaking criterion that favors such businesses duing competitive
50
SERPRO is the technology development agency of the Federal government, a fully state-owned company linked
to the Ministry of Economy. See footnote 3 for details.
51 Between 2006-2009, the number of direct Federal contracting procurement processes decreased at an average
annual rate of 2.8%, even as the period saw a marked increase in Federal procurement spending due to the
introduction of the Programa de Aceleração do Crescimento, the R$500 billion Brazilian stimulus package set to
expire in 2010.
78
public procurement: Any bid from a qualified SME bidder that is equal to or within 10%
of the lowest-priced proposal submitted by a qualified non-SME bidder (5% in the case
of reverse auctions) is considered ―tied‖ with it. The SME bidder(s) are then given the
opportunity to re-issue a price proposal that is lower than the original lowest priced bid,
to win the contract.
- Propose various amendments to the procurement law, which continue to be assessed by
Congress
- Propose and develop, along with SERPRO, an information system that will support
procurement and contract management at the state and municipal levels for procurement
funded by Federal transfers
SLTI’s authority to carry out these initiatives is consistent with the Agency’s mandate.
Condition status: Fully met.
(d) The responsibilities should also provide for separation and clarity to
avoid conflicts of interest and direct involvement in executing
procurement transactions.
Proposed
Score
Benchmark
Score
Pass Pass/Fail
SLTI’s role is well defined: It is a centralized regulatory/normative body for Federal
procurement.
It is not responsible for implementing procurement processes or executing contracts.
It is free from any possible conflicts of interest regarding procurement transactions, since it
does not make any decisions on bid evaluations.
Procurement is decentralized (while SLTI is a centralized, secretariat of the Ministry of
Planning). Each agency has its own auctioneer, bid evaluation committee, AGU legal
advisor, and controller: The latter and the procurement team are responsible for the inputs,
outputs, and outcomes associated with the procurement they conduct.
Condition status: Fully met.
52
The law refers to SMEs as micro and small enterprises: Micro enterprises have annual revenues up to R$240,000
(about $133,000); small enterprises have annual revenues over R$240,000 and up to R$2.4 million ($1.3 million).
79
Indicator 5. Existence of institutional development capacity.
Summary for Indicator 5
Sub-indicators Proposed
score
Benchmark
score
(a) The country has a system for collecting/disseminating
procurement information, including bid invitations, requests for
proposals, and contract awards.
3 2
(b) The country has systems/procedures for collecting/monitoring
national procurement statistics. 3 2
(c) A sustainable strategy and capacity exists to provide training,
advice and assistance to improve government and private sector
participants’ understandstanding of the rules/regulations and how
they should be implemented.
3 2
(d) Quality control standards are used to evaluate staff
performance and address capacity development issues. 2 2
(a) The country has a system for collecting/disseminating procurement
information, including bid invitations, requests for proposals, and
contract awards.
Proposed
Score
Benchmark
Score
3 2
One of the greatest strengths of Brazil’s procurement system is its collection/dissemination of
information, which receives strong technological support. Bid invitations, requests for
proposals, and contract awards are presented on ComprasNet, the Federal procurement
website, and through SIASG, the Federal procurement management system, in the official
gazette. The two systems are connected.
The private sector relies heavily on ComprasNet to identify bid invitations and requests for
proposals, and follow up on contract awards. ComprasNet also has an alert feature that
automatically sends e-mails to SICAF-registered suppliers, contractors, and consultants,
about newly-posted invitations to bid.
ComprasNet is an open access website that can be used anywhere through an Internet
connection. Its information can be accessed without the need for registration and at no cost.
Condition status: All are fully met.
(b) The country has systems and procedures for collecting/monitoring
national procurement statistics.
Proposed
Score
Benchmark
Score
80
(1) A system collects data.
(2) The data lists the method, duration of different stages of the procurement
cycle, contract awards, unit prices for most common types of goods/services
and other information that allows trends, levels of participation, efficiency and
economy of the purchases and compliance with requirements to be analyzed.
(3) The data is very reliable (verified by audits)
(4) The data is routinely analysed, published and fed back into the system.
3 2
(1) SIASG/ComprasNet (the general service management system and the procurement
website) and SIAFI (the financial management system) collect, disseminate, and provide for
the reporting of procurement data. Collecting data at the procurement event level is required
by design, since many downstream transactions (especially suppliers’ payments) depend on
upstream transactions (eg. budget commitments and procurement milestones) being
accurately accounted for in the system.
(2) Through dedicated modules, SIASG/ComprasNet and SIAFI collect data on procurement
in great detail: At the process level, they include the paticular ID (by method and modality),
duration (by stage in the process), bid opening minutes, administrative complaints, contract
awards and amendments (if any). At the system level, SIASG/ComprasNet collects and
makes available data on goods and services procured, item-level unit prices (both past and
reference prices), and registered suppliers (with a detailed profile on each). Finally, the two
produce consolidated monthly and annual reports for management and policy making
purposes.
(3) All SIASG and SIAFI information is reliable. Its integrity is supported by SLTI
monitoring and regular, independent auditing by SERPRO (the IT company of the Federal
government). Also, several internal tools help the system police itself: For example, since
2001, when SIASG and SIAFI were fully integrated, the system does not allow Federal
agencies to process payments to suppliers if the SIASG-originated information feeding into
SIAFI is not accurate or lacks content.
(4) SLTI’s Strategic Information Unit produces monthly reports for senior management.
Also, the ComprasNet website has a great deal of SIASG-retrieved information on Federal
procurement, which is available to the public at any time.
Condition status: All are fully met.
(c) A sustainable strategy and training capacity exists to provide training,
advice and assistance to improve government and private sector
participants’ understanding of the rules/regulations and how they should
Proposed
Score
Benchmark
Score
3 2
81
be implemented.
The training and capacity building strategy provides for:
(1) Permanent training programs of suitable quality and content.
(2) Evaluation and periodic adjustment based on feedback and need.
(3) Advisory services and a help desk to respond to procuring entities’,
suppliers’, contractors’ and the public’s questions.
(1) The Federal government made SLTI responsible for developing/implementing a training
and capacity-building strategy for Federal agencies. Along with ENAP, the National
Academy of Public Administration, it develops the content and produces materials for
training on procurement’s legal framework, information systems, and general operations.
Also, SLTI routinely provides complementary training to the agencies according to the
demand for such services.53
Agency staff may also seek self-guided training, which is available in two ways: Staff may
download SLTI training materials from ComprasNet, which also offers an interactive training
module on procurement information sub-systems that allows staff to put the training material
into practice.
The private sector also offers training courses on virtually all aspects of government
procurement through companies such as RHS Licitações and Zênite, which provide online,
in-classroom, and customized courses for companies of all sizes.
(2) SLTI training incorporates feedback from users through its on-demand service, which
responds to staff requests for information on content and timing.
(3) Besides the formal training, government agencies, contractors and prospective suppliers
can obtain just-in-time advice: For example, at the agencies, the AGU legal advisors are the
main source of information on procedures, regulations and difficult cases, while SLTI staff
can be contacted for further clarification. For IT issues, agencies can contact SERPRO,
which has a toll-free telephone service—the Assistance Community.
For suppliers, contractors, and the general public, ComprasNet maintains a help desk with a
nationwide toll-free number; users may also contact ComprasNet by e-mail at an address
provided for that purpose).
Condition status: All conditions fully met.
53
Federal agencies can apply for training from SLTI via e-mail (with information on exactly how to do so available
in SIASG). SLTI training is delivered once enough applications are received.
82
(d) Quality control standards are used to evaluate staff performance and
address capacity development.
As a minimum, they should:
(1) Provide quality assurance and a monitoring system for procurement
processes and products
(2) Provide an evaluation of staff performance based on outcomes and
professional behavior.
(3) Ensure that operations’ audits are conducted regularly to monitor
compliance.
Proposed
Score
Benchmark
Score
2 2
(1) Standards to provide quality assurance for the processes and products are applied through
the monitoring, measuring, and reporting of performance indicators, supported by
SIASG/ComprasNet, which produces raw data from which they are constructed. The
indicators routinely assessed at the Federal level include:
Number of days between publication of the invitation to bid and the opening of bids
Number of days between bid opening and award publication
Average number of bidders per procurement event
Number of bidding events using a method and mode that was less competitive than that
specified by law
Percentage of contracts (in quantity and value) awarded on a single-source basis
Percentage of bidding documents cancelled before the award decision
Ratio of complaints to bids received
Number of days between the filing of a complaint and the response, using the complaint
resolution mechanism
Percentage of awards for which the decision was changed due to a complaint
Percentage of supplier payments made 45 days or later than the invoices received
Percentage of contracts whose value was adjusted after procurement due to modifications
and amendments
For each indicator, SLTI sets a minimum acceptable level standard. Failure to meet it is a key
input used by SLTI as it assesses the system’s performance, challenges, and needs.
(2) Outcome-based evaluation of performance is still embryonic in Brazil. For example, there
is no systematic, electronic tool to monitor staff performance by outcomes. However,
government agencies use a broad evaluation mechanism based on general professional
behavior (according to the civil servant code) and tied to the compensation review process.
Also, the procurement function is being ―professionalized‖ as some staff certification
procedures have become mandatory (eg. for auctioneers and AGU advisors).
83
(3) SLTI regularly monitors compliance with quality assurance standards through
SIASG/ComprasNet. Also, TCU may audit operations at any time based on its mandate to
protect the proper use and allocation of public funds.
Condition status: (a) and (c) are fully met; (b) is only partially met, since
outcome-based staff performance evaluations are very new. On that basis, a 2 out
of 3 score is proposed.
III. Procurement Operations and Market Practices
Indicator 6. The country’s procurement operations and practices are efficient.
Summary for Indicator 6
Sub-indicators Proposed
score
Benchmark
score
(a) The level of competence among government officials within
the entity is consistent with their procurement responsibilities.
3 2
(b) Procurement training and information programs for
government officials and private sector participants are consistent
with demand.
3 2
(c) Norms are established for the safekeeping of records and
documents related to transactions and contract management 3 2
(d) Provisions delegate authority to those who have the capacity to
exercise responsibilities. 3 2
(a) The level of competence among government officials within the entity
is consistent with their procurement responsibilities.
(1) Skill and knowledge profiles exist for specialized procurement jobs.
(2) Skills are systematically matched against requirements for competitive
recruitment.
(3) Staff required to conduct procurement on an ad hoc basis have the
knowledge they need or access to professional staff that can provide it.
Proposed
Score
Benchmark
Score
3 2
(1) Specialized functions, such as that of the auctioneer (for reverse auctions) or the legal
advisor (for all procurement processes), under the procurement and reverse auction laws are
defined on the basis of skills and knowledge profiles. A certificate of compliance with the
profile is a requirement for any candidate seeking either position.
(2) Procurement and financial management specialists (as other career civil servants), are
recruited competitively (Article 37 of the Constitution) and on the basis of skills. Public
84
sector positions are filled through a formal, open, nationwide recruitment. Job descriptions
are designed according to the positions to be filled and applicants complete job-specific tests.
Test scores are supplemented by qualification documents (eg. education records).
(3) Staff working on procurement on an ad hoc basis have access to the support described in
5(c), including ComprasNet training materials, guidance from AGU legal advisors and expert
SLTI staff, the SERPRO help desk, and in-classroom training at ENAP (or directly from
SLTI, based on demand).
Condition status: All are fully met.
(b) Procurement training and information programs for government
officials and private sector participants are consistent with demand.
(1) The programs are designed to fill the gap in the skill set.
(2) Programs for the private sector are offered regularly by the government or
private institutions.
(3) The waiting time to be enrolled (for public or private sector participants) is
reasonable, ie. one or two terms.
Proposed
Score
Benchmark
Score
3 2
(1) SLTI routinley monitors performance and its training programs respond to the skills it
finds are needed. The in-classroom public programs (ENAP, SLTI) are only available to the
civil service (unlike the online manuals and materials, which are available to the public on
ComprasNet),
(2) Within the private sector, a similar process occurs. Training providers regularly evaluate
changes in the legal and regulatory framework, as well as the de facto practices, and design
courses to meet the needs. Many options exist for private sector professionals at private
institutions: Besides those mentioned in 5(c)—RHS Licitações and Zênite (which are for-
profit professional training and educational organizations), there are also non-profit
organizations that offer programs on business development and job creation. For example,
the Serviço Brasileiro de Apoio às Micro e Pequenas Empresas (SEBRAE), a non-profit that
helps small and medium enterprises (SMEs), particularly with respect to their growth and
access to market, offers in-classroom and online training on doing business with the
government that is free or subsidized.
(3) For the public sector, the waiting time for ENAP courses is one or two terms; for SLTI’s
―on-demand‖ training, the wait depends on the number of SIASG-generated applications.
However, the period is reasonable. Both ENAP and SLTI on-demand programs are free.
Private sector courses usually charge fees (except with non-profit educational institutions that
may offer some or all services free of charge); there is generally no waiting time.
Condition status: All are fully met.
85
(c) Norms are established for the safekeeping of records and documents
related to transactions and contract management
(1) Laws and regulations require that agencies, etc. keep certain records and
make them available to the public, including conditions for access.
(2) The records include:
• Public notices of bidding opportunities
• Bidding documents and addenda
• Bid opening records
• Bid evaluation reports
• Formal appeals by bidders and their outcomes
• Final signed contract documents, addenda and amendments
• Claims and dispute resolutions
• Final payments
• Disbursement data (required by the financial management system).
(3) A document retention policy is compatible with the statute of limitations
for investigating/prosecuting cases of fraud/corruption and with audit cycles.
(4) Security protocols are created to protect physical and electronic records.
Proposed
Score
Benchmark
Score
3 2
(1) Law 8.159 (1991), issued by the National Archives, regulates record-keeping for Federal
agencies. It lists the documents that must be kept and the way they should be archived (for
public inspection). Compliance with these requirements is continually audited.
(2) With respect to procurement, the records include bid advertisements, bidding documents,
complaints (about the process), contracts, contract amendments, questions and clarifications,
minutes (for all stages of the process), bid evaluation reports, bid opening records, payments
and disbursements, and internal procedural documents (eg. legal reviews, procedural
clearances, staff appointments, etc.).
(3) Records of electronic reverse auctions (in 2009, these accounted for 85% of the Federal
government’s competitive processes), are in electronic form and available at ComprasNet.
For offline competitive processes, paper copies are kept for five years after TCU completes
the financial audit (of the agencies involved). Also, the most important materials from these
documents are made available electronically, at ComprasNet.
According to Article 109 of the Penal Code (Código Penal, 2.848/40), procurement-related
criminal charges may be brought under a statute of limitations of up to 12 years, depending
on the charge. While the 12-year limit does not match the five-year post-audit period for
which paper documents are kept, two factors mitigate the risks of a mismatch. First, the ―post
TCU audit‖ nature of the five-year record keeping means it reviewed the documents and
taken measures to address wrongdoings. In other words, TCU reviews Federal accounts
annually, regardless of the length of time it (or any other party) may file criminal charges
against procurement (or other types of) illegalities. Second, electronic records of the most
relevant material of recent paper documents are kept online.
86
(4) Electronic documents are protected by a state-of-the-art computer network operated,
maintained, and constantly monitored by SERPRO.
Condition status: All are fully met.
(d) Provisions delegate authority to those who have the capacity to
exercise responsibilities.
(1) Delegation of decision making is decentralized to the lowest levels
consistent with the risks and amounts involved.
(2) Delegation is regulated by law.
(3) Accountability for decisions is precisely defined.
Proposed
Score
Benchmark
Score
3 2
(1) Federal procurement is conducted by delegating decision making on a decentralized
(agency-level) basis and to the lowest appropriate level. As noted in the Chapter II, this
begins at the top agency level: The minister, or equivalent, delegates authority for managing
it to the controller, who is the senior official ultimately responsible for procurement decision-
making, agency-wide.
The controller oversees decisions submitted to his/her desk by an operations’ team of bid
evaluators, auctioneers, procurement specialists, financial management specialists, and legal
experts (the latter appointed by AGU). This team is responsible for day-to-day procurement
processes, but the approval of funds and budget decisions are the controller’s exclusive
responsibility. For example, agency end-users are responsible for starting the procurement
cycle by processing procurement needs (by law, these must be included in or consistent with
the LOA54
), but only the controller can authorize the budget commitment. Similarly, bid
evaluation committees (in non-auction competitive procurement) and auctioneers (in reverse
auctions) decide procurement awards (for which they are individually accountable), but the
controller is accountable for signing off.
All decision-making at the procurement process level, other than budget commitment and
execution decisions (eg. rejecting non-responsive bids, observing legally mandated
procurement procedures), is delegated to the auctioneers, bid evaluation committees, and
their support staff who are held fully accountable. While only the controller may sign a
procurement contract for the Federal administration, responsibility for approving its content
(as well as that of bidding documents and invitations to bid) is delegated to one or more
AGU legal advisors (whom AGU assigns to work full time at the implementing agency).
(2) The controller’s role/responsibilities are regulated by Article 80 of Law 200 (1967) which
establishes the authority to allocate budget commitments, authorize payments, and provide or
54
The LOA, or Lei de Orçamento Annual, is the Federal annual budget, to which procurement must be linked. See
indicator 3(a) for details.
87
deny public funds: The controller must perform these functions to protect the integrity of
public funds. He/she is subject to audits, both internal (by the Controladoria-Geral da
União, or CGU, Brazil’s Office of the Inspector-General) and external (by TCU). However,
members of the procurement team—who make recommendations to the controller—are
responsible for their acts, if they contravene or exceed legal/proper orders from the
controller. Conversely, team members (eg. auctioneers, bid evaluation committee members,
etc.) are not liable for improper rulings by the controller when they disagree on the record
(eg, in official minutes and award decision reports).
For public procurement, Article 11 of Law 73 (1993) delegates the approval of documents
and legal advisory authority to AGU staff.
(3) Accountability for decisions is explicitly defined in the legal framework, as explained in
section (2) above.
Condition status: All are fully met.
Indicator 7. Functions of the public procurement market.
Summary for Indicator 7
Sub-indicators Proposed
score
Benchmark
score
(a) Effective mechanisms exist for partnerships between the public
and private sector. 3 2
(b) Private sector institutions are well organized and able to access
the procurement market. 3 2
(c) No major systemic constraints (eg. inadequate access to credit,
contracting practices, etc.) inhibit private sector access to the
market.
2 2
(a) Effective mechanisms facilitate for partnerships between the public
and private sector. (1) The government encourages open dialogue with the private sector and
has several formal mechanisms through associations or other means.
(2) It has programs to build capacity within private companies (including
small businesses) and training to help new ones acess the procurement
market.
(3) It encourages public/private partnerships through mechanisms in the
legal framework.
Proposed
Score
Benchmark
Score
3 2
(1) The Federal government encourages dialogue with the private sector through various
means. At the central level, there is a help desk with a toll-free number (listed on
88
ComprasNet) for the private sector, taxpayers and general public who have questions on
procurement or want direct access to specialists in the field. Moreover, SLTI generally holds
open meetings with the private sector on proposed regulatory initiatives that may
significantly change the way procurement is conducted. For example, in 2008, SLTI held a
long consultation with the private sector, nationwide, before it proposed amending sections
of the law (the proposal, sent to Congress the same year, is still being reviewed).
At a decentralized level, the laws and regulations establish minimum time periods between
the invitations to bid and their opening, consistent with the complexity expected. Such time
requirements allow for dialogue between the private sector and agencies, that can resolve
questions about the bidding documents and/or the process.
(2) As part of its capacity building mandate, SLTI routinely partners with private companies
to hold workshops and training. It also organizes national and international conferences and
events, such as an annual international forum on electronic government, where
representatives from both sectors exchange views on procurement and related topics. Also,
SLTI and the Federal government indirectly support private sector capacity-building through
transparency and open communications (eg. training materials on ComprasNet free of
charge; wide publication, in many cases preceded by public consultations, of changes in the
regulatory framework; and legislation that eases SME access to contracts in a fair and
competitive environment).
Further, private sector entities that offer capacity-building services are well known and
effective. As noted earlier, SMEs are helped by SEBRAE, a non-profit created to offer
training and advice the SMEs’ doing business with all levels of government.
(3) The government encourages public-private partnerships (PPPs), as seen by recent
advancements in the transport, energy, and water sectors, among others. The mechanisms for
these arrangements are established by a Federal law, 11.079 (2004) dealing exclusively with
PPPs.
Condition status: All are fully met.
(b) Private sector institutions are well organized and able to access the
procurement market.
Proposed
Score
Benchmark
Score
3 2
Brazil’s private sector is well organized and competitive, and actively accesses the
procurement market. For example, since 2006, electronic reverse auctions (which account for
60% of Federal procurement spending) have had at least 12 bidders per event—about twice
the minimum level of competition recognized as needed to achieve truly competitive auctions
(and related savings).
89
The private sector’s organizational capacity is not limited to large companies. From 2002-
2008, the average annual growth rate of SICAF-registered suppliers—12.5%--was the same
for SMEs (those with annual revenues of up to R$2.4 million, or about $1.3 million) and
larger companies. The 2002-2008 average annual growth rate in public funds for contracts to
SMEs was 29% compared to 9% for larger companies.
Sustained growth in registered government suppliers and procurement spending through open
processes over the past few years shows a well organized private sector whose
competitiveness helped generate important taxpayer savings (eg. through electronic reverse
auctions, the government saved about 19% a year from 2004-2008, compared to reference
prices).
Condition status: All are fully met.
(c) No major systemic constraints (eg. inadequate access to credit,
contracting practices, etc.) inhibit private sector access to the
market.
Proposed
Score
Benchmark
Score
2 2
No major constraints inhibit the private sector from doing business with the Federal
government, whether for goods and non-consulting services, works, or
consulting/advisory services. Indeed, the government is often a key customer of many
businesses.
Access to credit is facilitated through various financial institutions. Brazil not only has
Latin America’s largest bank by assets (Banco de Brasil S.A., which is majority state-
owned), but also a large, competitive banking industry that has been instrumental in
supporting the country’s recent rapid growth: Total private sector credit from the
domestic financial system was 43% of GDP in July 2009, up from 36% in July 2008,
exhibiting the recent credit expansion. The cost of credit may still be higher than in other
emerging markets at comparable levels of development; but, access to credit is improving
and the country’s sovereign debt has earned investment grade from the three major
international rating agencies. It is expected this will translate into improved financing
terms for private sector entities over the medium term.
Monetary policy authorities with Banco Central do Brasil, the independent, central bank,
continually set targets for the inflation rate. According to their mandate, they ensure that
credit availability is commensurate to the country’s production capacity, to minimize the
risk of (inflation inducing) spikes in demand.
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Condition status: Since the relatively high cost of credit creates some constraints
on access (although competition is sufficient), a score of 2 out of 3 is proposed.55
Indicator 8. Contract administration and dispute resolution provisions.
Summary for Indicator 8
Sub-indicators Proposed
score
Benchmark
score
(a) Procedures are clearly defined for contract administration
responsibilities that include inspection and acceptance, quality
control, and methods to review and issue contract amendments in a
timely manner.
2 2
(b) Contracts include dispute resolution procedures that provide for
an efficient and fair process to resolve disputes arising during
execution of the contract.
2 3
(c) Procedures enforce the outcomes of the dispute resolution
process. 3 3
(a) Procedures are clearly defined for contract administration
responsibilities that include inspection and acceptance, quality control,
and methods to review and issue contract amendments in a timely
manner.
(1) Procedures for accepting final products and issuing contract amendments
are part of the legal/regulatory framework or incorporated as standard clauses
in contracts.
(2) Clauses are generally consistent with internationally accepted practices
(see IFI standard contracts for examples).
(3) Quality control (QC) procedures for goods are well defined in the model
contracts/documents or regulations. QC is conducted by capable officers,
inspection firms or special testing facilities.
(4) Civil works are supervised by independent engineering firms or qualified
government supervisors and inspectors.
(5) Final payments are processed promptly, as stipulated in the contract.
Proposed
Score Benchmark
Score
2 2
(1) The procurement law defines contract administration responsibilities and procedures to
receive and accept goods/services.
55
Though required by the methodology presented in Annex B of ―Use of Country Systems in Bank-Supported
Operations: Proposed Piloting Program‖ (2008), no particular action plan of corrective measures is proposed here, as
such a plan would fall outside the scope of the procurement function. Authorities are well aware of the impact of the
cost of credit on the investment and commercial climate, economic growth, and reduction of poverty and inequality,
and mitigation measures from the Central Bank and executive branch are ongoing.
91
Articles 66-76 of the procurement law describe the procedures and responsibilities for
receiving goods, works, and services. They define minimum content for all contracts, whose
compliance is approved by legal advisors before contracts are issued. The law also provides
for amendments.
(2) Minimum content is broadly consistent with international practice and there is no record
of major and/or persistent complaints from private sector entities on Federal standard
contract clauses. Agency-level legal advisors are responsible for ensuring that contract forms
and language are consistent with the law.
(3) Procedures for receiving and accepting goods, works, and services and responsibilities for
this function are clearly defined. However, staff capacity could be strengthened, especially in
contract administration, as suggested by the frequency of end users’ complaints about the
quality of goods/services delivered and the relatively low recourse they have to contractual
remedies.
(4) Qualified public officials supervise works and can obtain advice from engineering firms.
For example, DNIT, the National Department for Transport Infrastructure, acquires it from
engineering consulting companies for contracts in road construction and rehabilitation.
(5) The procurement law sets minimum standards for payments in contracts: Payments must
be made within 30 days, or suppliers are entitled to compensation. SIASG and SIAFI are the
corporate information systems that are used to process payments.
Condition status: All are met, except for (c), which is only partly met due to
perceived capacity gaps (their true extent is hard to measure and no hard
evidence exist). On this basis, a score of 2 out of 3 is proposed.
(b) Contracts include dispute resolution procedures that provide for an
efficient and fair process to resolve disputes arising during the execution
of the contract.
(1) The Arbitration Law is consistent with generally accepted practices for the
neutrality of arbitrators, due process, expediency and enforceability.
(2) The country accepts international arbitration for international competitive
bidding.
(3) Contracts have provisions for alternative dispute resolution (ADR).
(4) ADR provisions conform to international standards (may refer to IFI
standard bidding documents for sample of good international practice).
Proposed
Score
Benchmark
Score
2 3
(1) Brazil’s arbitration law, No. 9.307 (1996) is consistent with generally accepted practices:
Chapter III deals with the due neutrality of arbitrators, Chapter IV with due process, Chapter V
with expediency and Chapter VI with enforceability.
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(2) Since the Arbitration Law was passed, international arbitration in Brazil has primarily been
used for concession contracts. Also, companies in which the government is a shareholder have
included arbitration clauses in their contracts. However, TCU considers arbitration with regard
to contracts for goods, works and services to be unconstitutional. For these, disputes can be
resolved by the implementing agencies or law courts. Suppliers, contractors and consultants can
complain to the Ordenador de Despesa when disagreements occur during contract
implementation. The Ordenador de Despesa is responsible for issuing a final administrative
decision to which he/she will be held accountable. Companies dissatisfied with the decision can
appeal to the courts. If companies believe the agencies are deviating from the law or the
contract itself, they can refer cases to TCU, as another resource. These procedures have worked
well.
(3) For procuring goods, works, and services, the procurement law provides an alternative
dispute resolution (ADR) mechanism, or amicable settlement process, that has worked well
over the years. Dissatisfied parties (to a contract) that have gone through the ADR process can
seek recourse through the country’s courts.
(4) The ADR provisions and language in the procurement law are consistent with international
standards.
Condition status: Conditions (1), (3) and (4) are fully met. Condition (2) is only
partly met because arbitration is mainly used in contracts for concessions and
PPPs. Since TCU issued a decision that arbitration should not be used in traditional
contracts for goods, works and services, Federal agencies follow this course, and
do not use arbitration unless Congress passes a law authorizing otherwise. For
this reason, a score of 2 is proposed for this sub-indicator.
(c) Procedures enforce the outcomes of the dispute resolution process.
(1) Brazil is a member of the New York Convention on enforcement of
international arbitration awards.
(2) Its procedures allow the winner in a dispute to seek enforcement through
the courts.
(3) It has a process to monitor this area of contract administration and address
performance issues.
Proposed
Score
Benchmark
Score
3 3
(1) Brazil became a party to the New York Convention on June 7, 2002.
(2) A contractual party may seek enforcement from the courts, whose decisions are binding
and enforceable.
(3) Sound contract administration is a key SLTI priority. To that end, contract monitoring has
been strengthened by the use of technology via SICON, the SIASG module that displays
contract contents, monitors milestones, and benchmarks results.
Condition status: All are fully met.
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IV. Integrity and Transparency of the Public Procurement System.
Indicator 9. Control and audit systems .
Summary for Indicator 9
Sub-indicators Proposed
score
Benchmark
score
(a) A legal framework, organization, policy, and procedures provide
internal/external controls and audits of public procurement. 3 2
(b) Enforcement and follow-up on findings/recommendations
provide an environment that fosters compliance. 3 2
(c) The internal controls provide timely information on compliance
allowing management to take actions. 3 2
(d) The internal controls are sufficiently defined to allow
performance audits to be conducted. 3 2
(e) Auditors are sufficiently informed about procurement
requirements and control systems to conduct quality reviews that
contribute to compliance.
3 2
(a) A legal framework, organization, policy, and procedures provide
internal/external controls and audits of public procurement.
(1) Adequate independent controls and audit mechanisms/institutions oversee
the procurement function.
(2) Internal controls in individual agencies involve clearly defined procedures.
(3) There is a balance between timely and efficient decision making and
adequate risk mitigation.
(4) Periodic assessments and controls are tailored to risk management.
Proposed
Score
Benchmark
Score
3 2
(1) Controls and audit mechanisms to ensure the integrity, transparency, and efficiency of
Federal procurement are adequate. Besides the agencies’ own internal audits, procurement is
audited by CGU (internal auditors, reporting to the executive branch) and TCU (external
auditors, reporting to the legislative branch). Both monitor processes on an ongoing basis.
Also, TCU may become involved whenever serious allegations of misconduct, fraud and
corruption arise (which come to TCU’s attention through various means, many of which are
available to the private sector and civil society).
(2) Agencies’ internal controls are based on clearly defined procedures, supported by
information systems.
(3) The balance between timeliness and efficient decision making, as well as the principle of
risk mitigation, are part of the CGU and TCU regulatory framework.
94
(4) Risk assessments and controls, applied by CGU and TCU, are periodic and respond to the
needs of risk management. The Federal government has regulated and coordinated the
control framework, providing CGU and TCU wih clear roles/responsibilities. Thus, the
agencies have improved their integration and information sharing, and internal auditors have
laid the ground for effective risk management based on up-to-date assessments. Also, the
government appropriately controls capital and social program expenditures, which is
confirmed by public confidence in the oversight mechanisms and the use of Federal control
agencies as auditors of World Bank-financed projects.
CGU reviews financial statements to determine if government agencies have properly used
financial resources in audits of efficiency, economy and effectiveness. CGU also conducts
QCRs (Quality Control Reviews) every two months in at least 60 municipalities; these are
based on terms of reference and benchmarks listed in CGU’s procedures’ manuals. Findings
are shared with the agency audited, the corresponding line ministry, the TCU, Congress,
Office of the Federal Prosecutor, and, if necessary, the Federal police.
Condition status: All are fully met.
(b) Enforcement and follow-up on findings foster compliance. Proposed
Score
Benchmark
Score
3 2
Internal and external audits are conducted at least annually, but may (and routinely do)
happen at any time, without notice, depending on investigations, allegations, and other
risk management tools, as applied by CGU and TCU.
Both auditing agencies may refer cases to Ministério Público (public prosecutors) for
prosecution if their recommendations are not complied with in a reasonable time. Long
delays are rare.
Condition status: All are fully met.
(c) The internal controls provide timely information on compliance which
allows management to act, when necessary.
(1) Following written standards, the internal control unit (CGU) conveys
issues to management.
(2) It submits periodic reports to management throughout the year.
(3) It complies with both the time frame (for the reports) and standards.
Proposed
Score
Benchmark
Score
3 2
(1) Based on written standards that define the level of urgency, CGU, the internal auditor,
alerts management about issues. The standards offer four types of internal control:
95
A general public management and financial audit (known as Auditoria de Prestação de
Contas) is conducted annually, certifying the agencies’ financial and managerial accounts are
accurate and appropriate.
Special audits (Auditorias Especiais) are conducted throughout the year, along with Federal
prosecutors, either as a result of independent allegations of wrongdoing or as part of CGU’s
broader oversight operations.
Special account reviews (Auditoria das Tomadas de Contas Especial) are targeted audits
conducted throughout the year that identify, follow-up on, and, when the legal case arises,
reverse financial transactions that resulted in improper use of funds.
Civil servant conduct reviews (Correição) are more detailed audits conducted by CGU,
reviewing civil servants’ behavior (servidores públicos) based on the Civil Servant Code in
Law 8.112 (1990) (Regime Jurídico dos Servidores Públicos Civis da União).
(2) As explained in (1), periodic reports are sumitted to management throughout the year;
they occur depending on the audit instrument used (one of the four instruments listed in (1))
and based on risk assessment inputs.
(3) CGU, an institution with highly skilled staff, applies strong follow-up controls, meeting
auditing and timeliness standards.
Conditions’ status: All are fully met.
(d) The internal controls are sufficiently defined to allow performance
audits to be conducted.
Proposed
Score
Benchmark
Score
3 2
Internal control systems are based on manuals and written procedures. CGU’s website
publishes the manuals and related information on operations that guide its staff’s audits.
A unit within CGU, the Secretaria Federal de Controle Interno, ensures (through
planning, training, target-setting, and other means) that audit and control standards are
applied institution-wide.
The manuals provide internal auditors with process control checklists that are assessed
periodically. Agencies are required to give auditors the information they need to test the
validity of internal controls against the checklist. Audit reports then flag any failure in the
process and recommend prompt management action.
Condition status: Fully met.
96
(e) Auditors are sufficiently informed about procurement requirements
and control systems to conduct quality reviews that contribute to
compliance.
Proposed
Score
Benchmark
Score
3 2
TCU and CGU auditors are highly qualified specialists on the various aspects of public
administration, especially procurement and its control systems, and conduct meaningful
audits.
TCU’s recommendations/opinions are periodically compiled and frequently used in
nationwide training programs on public administration. Also, they are strictly followed
by Federal agencies (even state and municipal agencies, although they are not under
TCU’s jurisdiction).
By offering attractive compensation packages and solid career streams, TCU attracts and
retains top professionals. Its auditors receive training on procurement as frequently as
staff at other Federal agencies.
It is not uncommon for SLTI to consult with TCU when new laws are prepared or when
designing/testing new IT features for the procurement information systems.
Condition status: All are fully met.
Indicator 10. Efficiency of appeals mechanism.
Summary for Indicator 10
Sub-indicators Proposed
score
Benchmark
score
(a) Decisions, based on available information, can be reviewed by
a body (authority) with enforcement capacity. 3 3
(b) The review system can handle complaints efficiently and has a
means to enforce the ruling. 2 3
(c) The system operates fairly 3 3
(d) Decisions are published and available to all. 3 2
(e) The system ensures that the entity reviewing the complaints is
independent and has full authority. Pass Pass/Fail
(a) Decisions, based on available information, can be reviewed by Proposed Benchmark
97
a body (authority) with enforcement capacity.
(1) Decisions are made on the basis of available evidence submitted
by the parties to an entity that has authority to issue a ruling that is
binding, unless the case is appealed.
(2) Appeals can be made to an entity that has the authority to review
decisions and issue final, enforceable judgments.
(3) The amount of time allotted for submitting/reviewing complaints
and issuing decisions does not substantially delay the procurement
process .
Score Score
3 3
(1) Complaints are reviewed at two levels: The first, which is the auctioneer or bid evaluation
committee, and the second, which is the controller of the agency involved. These authorities
take decisions based on evidence submitted by bidders. Also, their decisions are binding,
unless appealed.
(2) The TCU56
operates as an independent appellate body; it has legal authority to review
decisions with respect to protests and issue decisions that are final and binding.
(3) The law sets reasonable time limits for filing, assessing, and resolving complaints at the
agency level.57
Condition status: All are fully met.
(b) The review system can handle complaints efficiently and has a means
to enforce the ruling.
Proposed
Score
Benchmark
Score
2 3
(1) Timeframes for submitting and reviewing complaints58
at the administrative level are clearly
defined and reasonable, which prevents long delays. The procurement law and regulatory
framework provide the mechanisms and enforcement authority.
(2) TCU (the appellate body), has authority to issue final decisions and enforce remedies. Its
decisions are not subject to specific timeframes, which may delay the procurement process.
However, delays are rare and they have not affected a Bank-financed procurement, where this
risk also applies. TCU’s decisions are fully enforceable and its authority as Supreme Auditor
allows it to follow-up on its decisions and hold parties accountable.
56
See Section ―The Supreme Audit Institution (TCU)‖ in Chapter II for details on TCU.
57 See Section ―Bid Protest System‖ in Chapter II for details on the complaint resolution system, including
timeframes for submitting and resolving complaints.
58 See Section ―Bid Protest System‖ in Chapter II for details.
98
Condition status: While the mechanism to resolve complaints is straightforward
and the authority for decision making and enforcement is clearly assigned, the
efficiency condition is only partly met, since TCU’s rulings are not subject to
timeframes (although the administrative channel is). Thus, a score of 2 out of 3 is
proposed. It must be noted that SLTI submitted a proposal to Congress to amend
the procurement law59 which, inter alia, would establish timeframes for TCU
complaint resolution rulings.
(c) The system operates fairly.
(1) Decisions are based on information relevant to the case.
(2) They are not biased.
(3) They can be appealed to a higher level.
(4) They present remedies that will correct the process or procedures.
Proposed
Score
Benchmark
Score
3 3
(1) The law states that all decisions, including those in the complaint review process, be based on
objective criteria and rules be applied equally/transparently to all parties.
(2) Complaints can be registered with either the agency involved in the procurement, TCU, and
the courts (the last two are totally independent from the agency). The first two review complaints
at no charge. Bidders usually first launch complaints with the agency, which has two levels for
reviews: The bid evaluation committee assesses the complaint and if bidders are dissatisfied with
the response, they may take it to the ―Ordenador de Despesa‖ (controller) for the agency’s final
decision. Both the committee and controller are administratively and criminally liable for their
decisions. If bidders are still dissatisfied, they may take the case to TCU or the courts.60
(3) The complaint review mechanism (i) requires the use of relevant (preferably quantitative or
measurable) information to ensure objectivity; (ii) is balanced and unbiased, based on the
principle of equality under the law; (iii) is subject to higher level review, under the clearly
defined avenue for appeal; and (iv) offers a satisfactory remedy because it is subject to many
layers of reviews, free of charge.
Condition status: All are fully met.
59
The proposed amendment to the procurement Law is named PL-7709/2007 and it is with Congress for review.
60 For details on the complaint resolution mechanism, see ―The Bid Protest System‖ in Chapter II.
99
(d) Decisions are published and available to all. Proposed
Score
Benchmark
Score
3 2
Administrative decisions are publicly available on ComprasNet and in the Federal official
gazette, free of charge. Details on TCU rulings are promptly made available on TCU’s
website.
Condition status: Fully met.
(e) The system ensures that the entity reviewing the complaints is
independent and has full authority.
Proposed
Score
Benchmark
Score
Pass Pass/Fail
TCU, which reviews complaints, reports to the legislative branch, is fully independent (ie.
separate from the executive branch) and autonomous.
Condition status: Fully met.
Indicator 11. Access to information.
Summary for Indicator 1
Sub-indicator Proposed
score
Benchmark
score
(a) Information is published/distributed through available media
with support from information technology (IT) when feasible
3 2
Access to information is one of the strongest components of the Federal procurement
system. First, the Constitution states that access to information—in all aspects of public
administration—is a basic right. Second, and specific to procurement, the system is
supported by modern technology that allows for easy access.
Information on Federal procurement (bid invitations, bidding documents, awards,
complaint resolution, contracts, contract execution, registered suppliers, registered goods
and services, and more) is available on ComprasNet. Also, most of the information is
published in the Federal official gazette, which has a website. Further, depending on the
100
estimated size of the award (see Box 3 for details), invitations to bid are published in
widely-circulated newspapers.
Besides ComprasNet, the Federal government internal auditor (CGU) maintains a website
Portal da Transparência (Transparency Portal), PT. Because it is thought that
transparency is the most effective tool to combat corruption, PT provides current data on
public revenues and expenditures, including detailed information on bidding processes
and contracts at the most detailed level (eg. for each agency’s procurement opportunity).
The website also provides access to a CGU-administered central list of debarred and
suspended firms (known as Cadastro Nacional de Empresas Inidôneas e Suspensas, or
CEIS), which is continually updated with data on sanctions applied by Federal agencies,
TCU, and many state administrations.
The law sets stricts time requirements for disseminating information: It requires that all
contract awards, regardless of amount, be published no later than the fifth business day of
the month following the award. Contract awards are posted on ComprasNet and
published in the Federal official gazette, a process that occurs electronically through
SICON, SIASG’s contract management module.
Condition status: Fully met.
Indicator 12. Ethics and anticorruption measures
Summary for Indicator 12
Sub-indicators Proposed
score
Benchmark
score
(a) The legal and regulatory framework for procurement,
including tender and contract documents, addresses corruption,
fraud, conflicts of interest, and unethical behavior and presents
(directly or refering to other laws) actions to correct such behavior.
3 3
(b) The legal system defines responsibilities, accountabilities, and
penalties for individuals/firms that engage in fraudulent/corrupt
practices.
3 3
(c) Rules and penalties are enforced. 3 2
(d) Special measures prevent and detect fraud/corruption in public
procurement. 3 3
(e) Stakeholders (private sector, civil society, and beneficiaries of
procurement/end-users) support a system known for its integrity. 3 2
(f) The country has a secure mechanism for reporting fraudulent,
corrupt, or unethical behavior. 3 3
(g) Codes of conduct/ethics exist for those involved in public
financial management systems. 3 2
101
(a) The legal and regulatory framework for procurement, including
tender and contract documents, addresses corruption, fraud, conflicts of
interest, and unethical behavior and presents (directly or refering to other
laws) actions to correct such behavior.
Proposed
Score
Benchmark
Score
3 3
(1) Fraud and corruption and applicable actions are addressed in the legal and regulatory
framework. Specifically, provisions are stated in Chapter IV, Articles 89-108 of the law. They
define the following as punishable offenses (along with monetary sanctions and jail terms).
These include:
- Obstruction and fraud at any stage in the procurement (regardless of method and mode)
and contract execution
- Bribes, at any stage
- Breaking the non-bias principle by favoring bidders/contractors (and providing the means
for this to occur)
- Impeding, disrupting, or committing fraud in bidding events
- Violating confidentiality at any stage (eg. related to price envelopes in non-auction
competitive bidding)
- Purposely expelling (or attempting to do) bidders before or during a procurement.
- Engaging in unlawful commercial and contractual practices, including arbitrary price
hikes; selling counterfeited or damaged/expired items presented as genuine or in top
condition; deliberately shipping the wrong items; altering items (whether goods/services)
of any kind; inappropriately increasing a proposal’s price or the cost of executing a
contract
- Inappropriately awarding contracts (eg. to bidders previously determined unqualified)
- Impeding or obstructing a bidder from registering
(2) All monetary sanctions associated with the offenses must be expressed as a percent of the
damage or potential advantage caused or sought.
(3) If public officials comit the offenses, they may be removed from office.
(4) Bidding documents, regardless of the procurement method or mode, must refer to Chapter IV
of the law and include adequate provisions for dealing with fraud/corruption.
(5) Article 9 (of the procurement law) relates to conflicts of interest. The law does not allow
consultants (individuals or firms) that prepared engineering designs or technical specifications
for procuring goods, works or services to bid. Affiliates and subcontractors (as well as personnel
of consultanting firms) are also forbidden to bid in assignments that conflict. Government staff,
including those on bid evaluation teams, may not bid for government contracts implemented by
102
the agency where they work. The law also provides criminal sanctions for conflict of interest
violations in Article 91.
(6) Government officials (managers and above, as well as any who handle privileged
information) cannot work for private sector companies with which they maintained business
relationships during their government employment for at least four months after leaving office.61
When this report was prepared, a bill on conflict of interest proposed extending the time period
to one year and was sent to Congress. The bill will align Brazil’s regulatory framework with
provisions in the United Nations Convention against Corruption.
(7) Brazil was among the first to sign the United Nations Convention in 2003; it was ratified in
2005. The country also complies with requirements in Article 9 of the Convention on
government procurement. Implementation of the UN Convention is monitored by CGU.62
Condition status: Fully met.
(b) The legal system defines responsibilities, accountabilities, and
penalties for individuals/firms that engage in fraudulent/corrupt
practices.
Proposed
Score
Benchmark
Score
3 3
(1) As mentioned in 12 (a), Articles 89-108 explicitly deal with fraud/corruption by defining
what constitutes such practices, who is accountable, and the penalties for individuals/firms
involved.
(2) Article 101 empowers any citizen to report fraud/corruption to Federal prosecutors.
Condition status: Fully met.
(c) Rulings and penalties are enforced. Proposed
Score
Benchmark
Score
3 2
(1) SICAF, the Federal database of government suppliers, maintains and updates a list of
individuals/companies found guilty of fraud/corruption. They are automatically prevented from
doing business with the government.
61
See MP 2.225-45 for more information about conflict of interest rules that apply to government officials.
62 Details can be found at http://www.cgu.gov.br/onu/convencao/implementacao/medidas.asp
103
(2) CEIS, the CGU-administered central database of disbarred and suspended firms, listed 2,222
firms as of August 2010.
(3) Cases of fraud/corruption are extensively covered by the media.
Condition status: Fully met.
(d) Special measures prevent and detect fraud/corruption in public
procurement.
Proposed
Score
Benchmark
Score
3 3
(1) A comprehensive anti-corruption effort regarding Federal procurement involves actors at all
levels: public officials, the Congress, internal and external auditors, prosecutors, investigators,
and civil society. These include:
- Polícia Federal, Brazil’s FBI, along with the Ministry of Justice, has an anti-corruption
program and special team to monitor/investigate allegations of fraud/corruption.
- The procurement law allows citizens to report fraud/corruption to the Attorney-General’s
office (Ministério Público) and provides various ways to do so. Investigations are
conducted by the Polícia Federal, and the Ministério Público handles prosecutions.
- TCU, the Supreme Auditor, may engage agencies at any time to review allegations of
fraud/corruption. Citizens can report these to TCU.
- In late 2005, CGU, the Federal internal auditor, created a unit—the Secretariat for
Corruption Prevention and Strategic Information—to prevent and fight corruption, which
still functions.
- The media widely cover cases of fraud and corruption.
Condition status: Fully met.
(e) Stakeholders (private sector, civil society, and beneficiaries of
procurement/end-users) support a system known for its integrity.
(1) Strong, credible civil society organizations exercise social audits and
controls.
(2) Governments provide organizations guarantees to operate and cooperation;
these groups are generally promoted and respected by the public.
(3) Civil society contributes to shape and improve the integrity of public
procurement.
Proposed
Score
Benchmark
Score
3 2
(1) Brazil has strong, credible civil society organizations that conduct social audits and
impose controls with respect to procurement and the use of public funds. These include:
104
- Transparência Brasil (TB) is a well-known NGO that aims to improve transparency and
ethics in public administration. Its staff, either seperately or with others (eg. research
institutions, consulting firms, pollsters), produce reports (which get media attention) on
integrity, corruption, campaign finance, elections and voting, and the size of government.
TB is usually present at government-sponsored events related to its mission.
- Contas Abertas (CA) is a non-profit group that reports on, monitors, and fosters debate
on the allocation of funds and public budgets at all government levels. CA, like TB, has a
staff of journalists and experts who keep the public informed about government actions
and plans for expenditures. CA uses a well-organized website to publish news, studies,
commentaries, and analyses. It has been particularly active since the 2007 launching of
Brazil’s R$500 billion (about $280 billion) stimulus package known as Programa de
Aceleração do Crescimento (PAC), or Growth Acceleration Program (which is
procurement-intensive), as it sought to track the ways in which PAC finances are funded
and spent. In 2010, CA launched a ―Transparency Index,‖ which ranks how well
government agency websites (at all government levels) provide information on the way
governments spend their budgets.
- Associação Brasileira de Jornalismo Investigativo (ABRAJI) is a non-profit run by
journalists that promotes investigative journalism, including media (books, newspapers,
journals, Internet) coverage of public administration and procurement.
- Instituto Brasileiro de Análises Sociais e Econômicas (IBASE) is a research institution,
with no political or religious affiliations, created to further democracy by monitoring
public policy.
(2) The Constitution affords these organizations the right to freely access information and
associate.
(3) Perhaps the clearest evidence that civil society can affect procurement is the large number
of corruption/fraud cases the press uncovered in 2009 and 2010.
Condition status: All are fully met.
(f) The country has a secure mechanism for reporting fraudulent,
corrupt, or unethical behavior.
Proposed
Score
Benchmark
Score
3 3
(1) Article 101 of the law presents a secure (ie. accessible and confidential) mechanism to report
fraud/corruption to Federal prosecutors who, in turn, use the Polícia Federal (the Federal
criminal investigative body) to conduct investigations; results determine whether there is a case
to prosecute, based on factual evidence.
105
(2) TCU created an ombudsman service, Ouvidoria Pública, through which citizens can report
on fraud/corruption.
Condition status: Fully met.
(g) Codes of conduct/ethics exist for those in public financial management
systems.
(1) The codes contain provisions for those in public financial management,
including procurement.
(2) It defines accountability for decision making and requries decision makers
to disclose financial information.
(3) It requires compliance; consequences are administrative or criminal.
Proposed
Score
Benchmark
Score
3 2
(1) A code of ethics, presented in Decree 1.171 (1994),includes provisions that, while not
explicit for those in public financial management and procurement (the code is general, and
applies to all public sector employees), protects the public interest against actions designed to
divert public resources for private gain. However, the procurement law includes special
provisions that are binding and include detailed penalties, according to the case, for officials
working on government procurement.
(2) The code defines accountability for decision making. Also, Article 13 of Law 8.429
(1992) requires all government officials (civil servants and political appointees) to disclose
all assets (local and offshore) once every calendar year as a condition to accepting
government employment and as long as they are employed in the public sector. They must
again list their assets when they leave government service.
Financial disclosure can be made by either (i) allowing the government direct access to tax
returns filed with the Secretaria da Receita Federal (the Brazilian IRS) or (ii) submitting
forms provided by the human resources department at the employee’s agency.
CGU is in charge of monitoring government officials’ finances. It can peform special audits
as a response to allegations or when suspicious transactions are flagged by the Council for
Control of Financial Transactions (COAF). If an official refuses to disclose assets, or reports
false information, employment may be terminated.
(3) The code of ethics is mandatory and compliance is monitored by agency-level ethics
commissions. Failure to comply may carry administrative and/or criminal consequences,
depending on the nature of the actions.
Condition status: All are fully met.
106
Chapter IV. Scoring for São Paulo State
107
Summary of scoring by area - Government of the State of São Paulo
I. Legislative and Regulatory Framework Proposed
Score
Benchmark
score
1. The public procurement legislative and regulatory framework achieves the agreed
standards and complies with obligations
(a) Scope and coverage of the legislative and regulatory frameworks 3 3
(b) Procurement methods 2 2
(c) Advertising rules and time limits 3 3
(d) Rules on participation 2 3
(e) Bidding documents and technical specifications 3 3
(f) Bid evaluations and award criteria 3 3
(g) Submission, receipt and opening of bids 3 3
(h) Complaints 2 3
2. Implementing regulations and documents
(a) Implementing regulations that define processes and procedures not included in higher-level
legislation 3 2
(b) Model bidding documents for goods, works and services 3 2
(c) Procedures for pre-qualification 3 2
(d) Procedures for contracting services or other requirements where technical capacity is a key
criterion 3 2
(e) User’s guide or manual for contracting entities 3 2
(f) General conditions of contracts (GCC) for public sector contracts covering goods, works and
services consistent with national requirements 3 3
II. Institutional Framework and Management Capacity Proposed
Score
Benchmark
score
3. Public procurement is mainstreamed and integrated with public sector governance
(a) Procurement planning and associated expenditures are part of the budgeting process and
contribute to multi-year planning 3 2
(b) Budget law and financial procedures support timely procurement, contract execution, and
payments. 3 2
(c) Procurement may not begin without existing budget appropriations. 3 2
(d) Completion reports are prepared for certifying budget execution and reconciling delivery with
budget programming. 3 2
4. Sao Paulo has a functioning regulatory body
(a) The basis for the normative/regulatory body is covered in the legislative and regulatory
framework 3 2
(b) It has a defined set of responsibilities that include but are not limited to the following: 3 2
(c) Its organization, funding, staffing, and level of independence/authority (formal power) to
exercise its duties should be sufficient and consistent with its responsibilities. 3 2
(d) Responsibilities should be clearly delineated to avoid conflicts of interest and direct
involvement in executing procurement transactions. Pass Pass/Fail
5. Institutional development capacity
(a) The state has a system to collect and disseminate procurement information, including bid
invitations, requests for proposals, and contract awards 3 2
(b) The state has systems and procedures to collect and monitor the state’s procurement statistics. 3 2
(c) A sustainable strategy and capacity exist to train, advise and help develop government and
private sector abilities. 3 2
(d) Quality control standards are disseminated and used to evaluate staff performance and address
capacity development issues. 2 2
III. Procurement Operations and Market Practices Proposed
Score
Benchmark
score
6. The state’s procurement operations and practices are efficient
(a) Government officials’ procurement competence is consistent with their responsibilities. 3 2
108
(b) Procurement training and information programs for government officials and for private sector
participants are consistent with demand. 3 2
(c) Norms safeguard records and documents related to transactions and contract management 3 2
(d) Provisions delegate authority to others who have the capacity needed 3 2
7. Fuuctioning of the public procurement market
(a) Effective mechanisms exist for partnerships between the public and private sector. 3 2
(b) Private sector institutions are well organized and able to access to the procurement market. 3 2
(c) There are no major systemic constraints (eg. inadequate access to credit, contracting practices,
etc.) blocking the private sector’s involvement in procurement. 2 2
8. Provisions for administering contracts and resolving disputes
(a) Procedures are clearly defined for undertaking contract administration responsibilities 2 2
(b) Contracts include procedures that provide an efficient and fair process to resolve disputes that
arise during the performance of the contract. 2 3
(c) Procedures enforce the outcome of the dispute resolution process. 3 3
IV. Integrity and Transparency of the Public Procurement System Proposed
Score
Benchmark
score
9. The state has effective control and audit systems
(a) A legal framework, organizations, policies, and procedures for internal and external controls
and audits of public procurement operate well. 3 2
(b) Enforcement and follow-up on findings and recommendations provide an environment that
fosters compliance. 3 2
(c) The internal control systems provide timely information on compliance to management. 3 2
(d) The internal control systems are sufficiently defined to conduct performance audits. 3 2
(e) Auditors are sufficiently informed about procurement requirements. 3 2
10. Appeals mechanisms
(a) Decisions are taken on the basis of available information; final decisions can be reviewed and
ruled upon by a body (or authority) with legal enforcement capacity. 3 3
(b) The review system can handle complaints efficiently. 2 3
(c) The system operates in a fair manner 3 3
(d) Decisions are published and made available to all interested parties and the public. 3 2
(e) The system ensures that the review body has full authority and independence to resolve
complaints. Pass Pass/Fail
11. Access to information
(a) Information is published and distributed through available media. 3 2
12. Ethical standards and anti-corruption measures in place
(a) The legal and regulatory framework for procurement addresses corruption, fraud, conflicts of
interest, and unethical behavior 3 3
(b) The legal system defines responsibilities, accountabilities, and penalties for individuals and
firms that engage in fraudulent or corrupt practices. 3 3
(c) Rules and penalties are enforced. 3 2
d) Special measures prevent and detect fraud and corruption. 3 3
(e) Stakeholders (private sector, civil society, and end-users) support an ethical procurement
market. 3 2
(f) The state has a secure mechanism for reporting fraudulent, corrupt, or unethical behavior. 3 3
(g) Codes of conduct/ethics exist for participants in the public financial management systems. 3 2
109
Results of the São Paulo procurement system assessment and proposed scores
This section presents the assessment of São Paulo’s public procurement system using
OECD/DAC measures. Scores range from 0-3, based on the criteria described in Chapter II. The
state’s procurement system draws heavily on Federal laws, texts, practices, institutions, and
tools63
(described in Chapter III). Specifically, this assessment of São Paulo will only deal with
those features which are specific to the state. Any topic not explicitly assessed here would
suggest that the discussion presented in Chapter III (i.e., at the Federal level) for that very topic
equally (or substantially) applies at the São Paulo level.
I. Legislative and Regulatory Framework
Indicator 1. The public procurement legislative and regulatory framework s meet standards and comply with obligations.
Summary for Indicator 1
Sub-indicators Proposed
Score
Benchmark
score
Any additions to
Chapter II
(Federal)?
(a) Scope of application and coverage of the
legislative and regulatory frameworks. 3 3 Yes
(b) Procurement methods 2 2 No
(c) Advertising rules and time limits 3 3 Yes
(d) Rules on participation 2 3 No
(e) Bid documents and technical specifications 3 3 No
(f) Bid evaluations and award criteria 3 3 No
(g) Submission, receipt and opening of bids 3 3 Yes
(h) Complaints
2 3 No
(a) Scope of application and coverage of the legislative and
regulatory frameworks
(1) Laws, decrees, regulations and procedures are adequately recorded
and organized hierarchically,and precedence is clearly established.
(2) Laws and regulations are published; the public can easily access
them, at no cost.
(3) The frameworks cover goods, works and services (including
consulting) for all procurement using national budget funds.
Proposed
Score
Benchmark
Score
3 3
63
The OECD/DAC benchmarking tool was primarily designed to assess national procurement systems. However,
the materials note that the tool ―can be adapted for use in sub-national or agency level assessments.‖
110
The Federal government has a Constitutional mandate to regulate public procurement at all
levels. States and municipalities may only complement Federal procurement legal texts—not
contradict them. Thus, the only item that differs from the Federal government is that São Paulo
uses state media to publish its legal procurement texts. For this reason, only item (2) will be
discussed for São Paulo.
(2) All laws/regulations issued by São Paulo are available on the state Congress website, the
Assembléia Legislativa. Also, the laws/regulations are easily accessed on
Pregão.sp.gov.br (which this paper will refer to as Pregão.sp). The name should not be
confused with pregão, the Portuguese term for reverse auctions) and BEC/SP.
Condition status: All are fully met.
(c) Advertising rules and time limits
The legal framework meets the following conditions:
(1) Requires that procurement opportunities other than sole source or
price quotations be publicly advertised.
(2) Publication of opportunities provides sufficient time, consistent
with the method, nature and complexity of procurement, for bidders to
obtain documents and respond to the advertisement. Such timeframes
are extended when international competition is sought.
(3) Publication of open tenders is mandated in at least a newspaper of
wide national circulation or on an Internet official site, where all
public procurement opportunities are posted, that is easily accessible.
(4) Content of publication includes enough information for potential
bidders to determine their ability and interest in bidding.
Proposed
Score
Benchmark
Score
3 3
The only difference between the rules that apply in São Paulo and at the Federal level involve the
media used for advertisement. As explained in the Chapter II, the Federal procurement law
regulates advertising rules and time limits. Consequently, only item (3) of this indicator will be
discussed for São Paulo.
(3) All procurement opportunities and contract awards are published on the state’s official
website, known as e-negociospublicos. The controls do not allow a contract to be awarded
unless an advertisement was posted there. Also, all reverse auction invitations to bid are
published in Pregão.sp, including detailed information such as bidding documents,
clarifications, complaints, and minutes of bid opening sessions.
Condition status: All are fully met.
111
(g) Submission, receipt and opening of bids
The legal framework provides for the following conditions:
(1) Public opening of bids in a defined, regulated proceeding
immediately after the closing date for submitting bids.
(2) Records of proceedings for bid openings are retained and available
for review.
(3) Security and confidentiality is maintained before bid opening;
disclosure of specific sensitive information during deliberations is
prohibited.
(4) The government clearly defines the mode of submitting bids to
avoid any being unnecessarily rejected.
Proposed
Score
Benchmark
Score
3 3
The regulations for submitting, receiving and opening bids are the same for São Paulo as for the
Federal government. Only the site, e-negociospublicos, where minutes from the bid opening are
placed, differs. Also, minutes from the reverse auction events are available through BEC/SP.
Condition status: All are fully met.
Indicator 2. Implementing Regulations and Do cuments
Summary for Indicator 2
Sub-indicators Proposed
score
Benchmark
score
Any
additions to
Chapter II
(Federal)?
(a) Regulations that define processes and procedures not
included in higher-level legislation 3 2 Yes
(b) Sample bidding documents for goods, works, and
services 3 2 Yes
(c) Pre-qualification procedures 3 2 No
(d) Procedures for contracting services or other
requirements in which technical capacity is a key
criterion
3 2 No
(e) User’s guide or manual for contracting entities 3 2 No
(f) General conditions of contracts (GCC) for goods,
works and services consistent with national
requirements and, when applicable, international
requirements
3 3 Yes
(a) Regulations that define processes and procedures not included
in higher-level legislation
Proposed
Score
Benchmark
Score
3 2
112
Regulations supplement the procurement law,and meet the following
requirements:
(1) They are clear, comprehensive, consolidated as a set and are
available in one accessible location.
(2) They are updated regularly.
(3) Responsibility for maintaining them is defined.
(1) Regulations that complement the Federal procurement and reverse auction laws are clear,
comprehensive, consolidated as a set, and are available in BEC/SP. The same regulations can
be easily accessed in Pregão.sp.
(2) To respond to the state’s evolving needs, regulations are updated continually and posted
on BEC/SP and Pregão.sp. For example, from 2007-2010, the state passed regulations on
CAUFESP,64
the participation of SMEs in state procurement, environmentally-responsible
procurement, and framework agreements.
(3) According to Decree 51.870 (2007), CQGP, a multi-agency committee, is responsible for
the regulations. It relies on the Ministry of Finance to prepare them for e-procurement and on
the state’s Office of the Attorney-General to update standard bidding documents.
Condition status: All are fully met.
(b) Documents for goods, works, and services
(1) Invitation and bidding documents are used for a wide range of
goods, works and services procured by government agencies;
(2) They include standard and mandatory clauses related to the legal
framework,for competitive bidding.
(3) Documents are updated; responsibility for preparing and updating
them is clearly assigned.
Proposed
Score
Benchmark
Score
3 2
(1) São Paulo has nine standard, mandatory bidding documents covering goods, works, and non-
consulting services. When launching a reverse auction or e-convite procurement process, the
BEC/SP e-procurement system automatically prompts the government official in charge to
choose from one of them.
(2) The use of standard bidding documents is mandatory. Their content complies with the
minimum content requirements in the Federal law and provides the information bidders need to
participate.
64
CAUFESP is explained in greater detail in the Chapter II.
113
(3) PGE (the Office of the Solicitor General) is responsible for preparing and updating the
bidding documents; its attorneys must approve them before an event is advertised. All nine
documents can be downloaded from the PGE website.
Condition status: All are fully met.
(f) – General conditions of contracts (GCC) for goods, works and services
are consistent with national requirements and, when applicable,
international requirements.
(1) GCCs exist for the most common types of contracts; their use is
mandatory.
(2) The GCC content is generally consistent with internationally accepted
practices.
Proposed
Score
Benchmark
Score
3 3
(1) Agencies are required to use the standard GCCs for contracts of goods (single delivery or
multiple deliveries), non-consulting services (based on unit prices and/or lump-sum
payments), and works (small, medium and large/complex). A PGE attorney must approve the
contracts before they are signed.
(2) The GCCs content is consistent with both internationally accepted practices and Article
55 of the Federal law, which defines the minimum content for every government contract. At
a minimum, all GCCs describe the:
Nature of the item
Contract period and delivery requirements
Prices, payment conditions, and price adjustment formula, if applicable
Timeframes for contract implementation and the supplier’s/employer’s
responsibilities
Performance guarantees, if required
Rights and responsibilities of each party, including penalties and fines
Conditions for contract termination
Explicit links between the contract, bidding documents and supplier’s bid
Legislation that applies to the contract
Dispute resolution procedures
Condition status: All are fully met.
114
II. Institutional Framework and Management Capacity
Indicator 3. The public procurement system is mainstreamed and integrated into the public sector governance system.
Summary for Indicator 3
Sub-indicators Proposed
score
Benchmark
score
Any
additions to
Chapter II
(Federal)?
(a) Procurement planning and associated expenditures are
part of the budget process and contribute to multi-year
planning
3 2 No
(b) Budget law and financial procedures support timely
procurement, contract execution, and payment. 3 2 Yes
(c) Procurement may not begin without budget
appropriations. 3 2 Yes
(d) Completion reports are prepared to certify budget
execution and reconcile delivery with budget programming. 3 2 Yes
(b) Budget law and financial procedures support timely procurement,
contract execution, and payment.
(1) Budget funds are committed/appropriated within a week from when the
contract is awarded to cover the full contract amount (or the part to be
performed within the budget period).
(2) The government must adhere to standards regarding the timeliness of
payments, stated in the contract.
(3) Payments are authorized within four weeks after invoices are approved or
monthly certifications of progress are produced.
Proposed
Score
Benchmark
Score
3 2
Both the Federal government and São Paulo budget and planning processes are regulated by the
(Federal) Fiscal Responsibility Law. Thus, this discussion will only describe the information
technology tools that are unique to the state.
Both levels of government use the same payment processing procedures: Payments to suppliers
must be made within five business days of an invoice being received for amounts up to R$8,000
(about $4,430), and within 30 days for larger payments. If payments are late, suppliers are
entitled to receive extra compensation.
SIAFEM/SP, the state’s financial management system, manages and enforces the
mandatory commitment of funds before a procurement process is launched. BEC/SP
performs the same function for reverse auctions, and the system will only allow
processes to move forward when funds have been assigned. PGE legal advisors (the
115
Office of the Solicitor General) must review the budget commitments when bidding
documents are submitted for approval.
Information about payments is available online. Thus, suppliers are routinely
informed about expected payment times: Federal Law 131 (2009) requires the all
levels of government - Federal, states and municipalities - to present detailed
information about budget implementation on the Internet. In São Paulo, budget
commitments (empenhos) and payments to suppliers are listed on the Ministry of
Finance website.
Condition status: All are fully met.
(c) Procurement may not begin unless a budget has been
appropriated.
(1) The law requires that funds be certified as available before bids
can be solicited.
(2) A system (eg. paper or electronic interface between the financial
management and procurement systems) ensures the law will be
enforced.
Proposed
Score
Benchmark
Score
3 2
(1) According to Article 7 of the procurement law, and the fiscal responsibility law, funds
must be certified as fully committed and available, before procurement begins.
(2) SIAFEM/SP is the system that ensures the fiscal responsibility law will be enforced with
respect to the commitment of funds. The e-procurement transactional system, BEC/SP, is
integrated with SIAFEM/SP.
Condition status: All are fully met.
(d) Completion reports are prepared to certify budget execution
and reconcile delivery with budget programming.
Proposed
Score
Benchmark
Score
3 2
(1) Based on the fiscal responsibility law, reports must be prepared to certify budget execution
and reconcile delivery with programming.
(2) SIGEO is the datawarehouse/data mining system that supports SIAFEM/SP and SIAFISICO;
all its reports—many of which are online—are based on data entered into SIAFEM/SP,
SIAFISICO, and BEC/SP. SIGEO provides both consolidated and real-time budget execution
reports. The annual reconciliation of the budget is also online at the Ministry of Finance website.
116
(3) SIGEO also provides detailed contract information online.
Condition status: All are fully met.
Indicator 4. The normative/regulatory body.
Summary for Indicator 4
Sub-indicators Proposed
score
Benchmark
score
Any
additions to
Chapter II
(Federal)?
(a) The basis for the regulatory body is covered in the
legislative and regulatory framework 3 2 Yes
(b) The body has multiple, defined responsibilities 3 2 Yes
(c) The body’s organization, funding, staffing, and
level of independence and authority (formal power) to
exercise its duties should be sufficient and consistent
with its responsibilities.
3 2 Yes
(d) Its responsibilities should also be separated in a
way that avoids conflicts of interest and direct
involvement in executing procurement transactions.
Pass Pass/Fail Yes
(a) The basis for the regulatory body is covered in the legislative
and regulatory framework. Decree 51.870 (2007) assigns policy
making authority to the Committee forQuality on Public Sector
Management (CQGP).
Proposed
Score
Benchmark
Score
3 2
Decree 51.870 of 2007 assigns policy making authority to CQGP, the Committee for
Quality on Public Sector Management.
Condition status: Fully met.
(b) The body responsibilities include the following:
Providing advice to contracting entities
Drafting amendments to the legislative and regulatory framework
and implementing regulations
Monitoring public procurement
Providing procurement information
Proposed
Score
Benchmark
Score
3 2
117
Managing statistical databases
Reporting on procurement to other government entities
Developing/supporting initiatives to improve procurement
Providing tools and documents to support training and capacity
development for implementing staff.
CQGP, the central regulatory body, primarily creates policies and strategies. Of the eight
functions listed above, CQGP is directly involved in drafting amendments to the legislative and
regulatory framework, as well as developing initiatives to improve the procurement system with
respect to efficiency and obtaining better value for money. However, it is not directly involved in
implementing policy, although it delegates some tasks (such as advising agencies, or managing
databases) to specific agencies, through legal texts, called Resoluções. For example,
- PGE provides legal advice to agencies and updates the content of standard bidding
documents.
- The Ministry of Finance maintains and operates the e-procurement transactional
platform, BEC/SP, and supporting information systems.
- The Ministry of Public Management is responsible for procurement reports and training.
Condition status: All are fully met.
(c) The body’s organization, funding, staffing, and level of independence
and authority (formal power) to exercise its duties should be sufficient
and consistent with the responsibilities.
Proposed
Score
Benchmark
Score 3 2
(1) CQGP is a multi-sector committee of nine heads of ministries. Since it reports directly to the
Office of the Chief of Staff, CQGP has a level of authority consistent with its mandate. The
authority for the other three agencies involved in government procurement regulations (PGE,
the Ministry of Finance, and the Ministry of Public Management) is legally granted by
CQGP through the issuance of resoluções.
(2) CQGP funds and staff are sufficient for both it and the other three agencies regulating
procurement to operate. Recent evidence shows these agencies worked on government
procurement regulations in order to fulfill their mandate:
- CQGP created CADTERC, a web-based, comprehensive source of information on the
public procurement of non-consulting services. CADTERC disseminates updated
reference prices, provides detailed technical specifications, and assesses productivity
standards.
118
- Under CQGP, 17 studies were conducted to (i) identify savings opportunities with respect
to non-consulting services, and (ii) develop specifications and contract management tools
to help the government achieve better value-for-money.
- CQGP proposed legislation, which was passed by the State’s Congress, requiring
agencies to open financial envelopes first in non-auction competitive procurement, unless
an exception is fully justified.
- CQGP issued guidance for environmentally-responsible procurement.
- PGE developed nine standard bidding documents for various types of goods, works, and
non-consulting services.
- The Ministry of Finance developed CAUFESP, the administration’s supplier registration
and database system.
- The Ministry of Public Management trained about 5,300 auctioneers in 2010, through
both online training and in-classroom programs.
Condition status: Fully met.
(d) Its responsibilities should also be separted in a way that avoids
conflicts of interest and direct involvement in executing
transactions.
Proposed
Score
Benchmark
Score
Pass Pass/Fail
CQGP is a multi-sector committee and does not execute procurement transactions of any
kind.
The other three agencies (PGE, Ministry of Planning, and the Ministry of Public
Management) operate as policy making bodies and do not execute procurement transactions.
According to the legal/regulatory framework, procurement is decentralized. Each agency has
its own auctioneer, bid evaluation committee, PGE legal advisor, and controller; the latter
and the broader team are responsible for transactions.
Condition status: Fully met.
Indicator 5. Institutional development capacity.
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Summary for Indicator 5
Sub-indicators Proposed
score
Benchmark
score
Any
additions to
Chapter II
(Federal)?
(a) The country has a system to collect and
disseminate procurement information, including bid
invitations, requests for proposals, and contract
awards.
3 2 Yes
(b) Systems and procedures are applied to collect and
monitor national procurement statistics. 3 2 Yes
(c) The state has a strategy and capacity to train,
advise and help government and private sector
participants understand the rules/regulations and how
to implement them.
3 2 Yes
(d) Quality control standards are applied to evaluate
staff performance and address capacity development. 2 2 Yes
(a) – The country has a system to collect and disseminate
procurement information, including bid invitations, requests for
proposals, and contract awards.
Proposed
Score
Benchmark
Score
3 2
(1) As with the Federal government, one of São Paulo greatest strengths is its handling of
procurement information. Bid invitations, requests for proposals, and contract awards are on the
e-negociospublicos website, managed by the state official gazette; it offers detailed information,
from the publication of bid invitations to contract award notices, and allows bidding documents
to be downloaded. Pregão.sp presents the same information, as well as a complete record of the
state’s reverse auctions. Details on all e-procurement processes (reverse auctions, e-quotations,
and e-convites) are available online at BEC/SP, for viewing and downloading.
(2) The private sector relies on BEC/SP to identify procurement opportunities for goods and non-
consulting services and follow-up on contract awards. BEC/SP automatically generates e-mail
alerts to all CAUFESP-registered suppliers on upcoming events and award information. For
works and consulting services, the official gazette and its website, e-negociospublicos, identify
the opportunities.
(3) SIAFEM/SP provides detailed contract information on contract size, duration, payment
schedules, and various physical and financial aspects.
Condition status: All are fully met.
120
(b) The country has systems and procedures to collect and
monitor national procurement statistics.
(1) Several systems collect data.
(2) Data is collected on the type of procurement, duration of stages in
the cycle, contract awards, unit prices for the most common
goods/services; such information allows the trends, levels of
participation, efficiency and economy of the purchases and
compliance with requirements to be analyzed.
(3) Information is highly reliable (verified by audits).
(4) The information is routinely analyzed, published and fed back into
the system.
Proposed
Score
Benchmark
Score
3 2
(1) BEC/SP, SIAFEM/SP, SIAFISICO and SIGEO are the systems in operation; they collect,
disseminate, and generate reports out of procurement data.
(2) SIAFISICO collects data on procurement by method, stage duration, contract award, and unit
prices (which feed the state’s reference price database). SIAFEM/SP collects information about
contract implementation. These two are integrated with SIGEO, which generates reports that can
cross-reference the data.
(3) The information about procurement is reliable, based on internal controls and must align with
budget commitments, contract awards, and contract prices. If it does not, payments will not be
processed. Further, CGA regularly audits the system, both for data reliability and system
integrity.
Condition status: All are met.
(c) The state has a strategy and capacity to train, advise and help
government and private sector participants understand the rules
and regulations and how to implement them. It provides for:
(1) Permanent training to meet the system’s needs.
(2) Evaluation and periodic adjustment based on feedback.
(3) Services to answer questions from procuring entities, suppliers,
contractors and the public.
Proposed
Score
Benchmark
Score
3 2
(1) São Paulo has two agencies that build capacity: (i) FAZESP, Escola Fazendária do
Estado de São Paulo, and (ii) FUNDAP, Fundação para o Desenvolvimento Administrativo.
They provide a wide range of in-classroom and online training to government employees
year-round. Courses cover all aspects of procurement—planning, reverse auctions,
government contracts, non-auction competitive opportunities, inbound logistics, and
complaint and dispute resolution. They also develop inter-personal and ―soft‖ skills, such as
for negotiations and communications.
121
Both FAZESP and FUNDAP are supported by the regulatory agencies. For example, a
Ministry of Finance team known as Coordenadoria de Entidades Descentralizadas e de
Contratações Eletrônicas, or CEDC provides material on e-procurement, contract
management, inbound logistics, and the use of IT systems. The team also regularly provides
supplementary training to state agencies, based on demand. PGE develops content and
training materials about the legal aspects of procurement and financial management.
Also, material for self-guided training can always be downloaded from both BEC/SP and
Pregão.sp.
The private sector offers numerous training courses about government procurement. For
example, RHS Licitações (based in São Paulo), Zênite, Conlicitação, and others provide
online, in-classroom, and customized courses.
(2) CEDC courses/materials are regularly updated from feedback, and thus demand-driven.
Also, BEC/SP has a feature that allows officials who take the courses to provide feedback
online. Further, FUNDAP and FAZESP have regular quality control processes to improve the
training they provide that includes end-of-course evaluations.
(3) As with the Federal government, government agencies, suppliers, and the public have
many ways to obtain advice on procurement. PGE has attorneys assigned to every agency
who serve as the first source of information on procedures/regulations. If an issue is not
resolved at this level, it may be referred to the CEDC team in the Ministry of Finance. For
help on IT issues, agencies may refer to the Ministry of Finance or to PRODESP, the state-
owned IT enterprise linked to the Ministry of Public Management.
Condition status: All are fully met.
(d) Quality control standards are applied to evaluate staff performance
and address capacity development.
(1) Quality assurance standards help monitor procurement processes and
products.
(2) Staff performance is evaluated based on outcomes and professional
behavior.
(3) Operations’ audits monitor compliance with quality assurance standards.
Proposed
Score
Benchmark
Score
2 2
(1) São Paulo has made a priority of evaluating procurement processes and procedures:
CQGP’s main objective is to increase efficiency and effectiveness of public spending. The
committee creates technical working groups to develop state-wide quality standards for the
main items it procures; also, since 2007, it has commissioned several technical studies to help
devise policies that can assure quality and value-for-money for goods/services. In addition,
CQGP has four permanent technical working groups to improve the quality and efficiency of
122
procurement in the following areas: (i) off-the-shelf computer software and computer
application development services; (ii) green products/services; (iii) goods/services for
geographic information systems activities; and (iv) maintenance of the computer network
infrastructure supporting government operations.
Each permanent working group conducts regular technical studies that focus on savings and
achieving value-for-money. The studies’ results/recommendations are sent to CQGP to be
reviewed and may become law (for government agencies to observe). For example, outcomes
have included (i) standard specifications to feed into CADMAT and become mandatory; (ii)
reference prices; and (iii) processes/procedures to consolidate demand and thus leverage the
state’s purchasing power.
Good examples include the sustainable green procurement working group, which created
specifications for goods/services that are more energy efficient and environmentally friendly
than conventional items. After this, CADMAT incorporated them and they are now
mandatory. Similarly, the working group for computer software developed standards for
high-volume software packages and services to ensure quality and thus contribute to
delivering value-for-money. The group working on geographic information system drafted
pre-bidding processes that consolidate inter-agency demand, with the aim of using the state’s
purchasing power to achieve better quality and lower prices for this type of high-end product.
The group also devised tools for agencies to share maps and images and thus avoid duplicate
purchases.
CADTERC provides standard specifications, productivity requirements, reference prices, and
instructions for procuring the State’s 17 most frequently purchased non-consulting services,
including cleaning, security, transportation, fueling, and food services. The Ministry of
Public Management reported that CADTERC helped save R$17 billion (about $10 billion)
from 1995-2009, while ensuring that quality standards for such services were met at all
times. CGA regularly audits contracts for the 17 services included in CADTERC. CGA
findings feed into the technical studies commissioned every year.
(2) Outcome-based performance evaluations of procurement staff are in an early stage. The
State has no systematic tool to evaluate them relative to agreed-upon outcomes. However,
majority state-owned enterprises, such as SABESP (the water and sewage utility) and CESP
(power utility), introduced tools that link performance to outcomes. Most government
agencies use a staff evaluation based on professional behavior.
(3) CGA regularly monitors compliance with quality assurance standards and findings are
incorporated as inputs for future CQGP technical assessments. Also, TCE/SP may launch
operations’ audits at any time given its mandate to protect the use of public funds.
123
Condition status: Conditions (1) and (3) are fully met. Condition (2) is only partly
met since staff evaluations are still embryonic. Thus, a score of 2 out of 3 is
proposed.
III. Procurement Operations and Market Practices
Indicator 6. Procurement operations and practices are efficient.
Summary for Indicator 6
Sub-indicators Proposed
score
Benchmark
score
Any
additions to
Chapter II
(Federal)?
(a) Government officials’ level of procurement
competence is consistent with their procurement
responsibilities.
3 2 No
(b) Procurement training and information programs
for government officials and private sector participants
are consistent with demand.
3 2 No
(c) Established norms help guard records and
documents related to transactions and contract
management.
3 2 No
(d) Authority is delegated to those with the capacity to
exercise responsibilities. 3 2 No
São Paulo operates under the same rules, processes, and procedures as does the Federal level for
recruiting procurement officials, training them and the private sector, recordkeeping, and
delegating authority in procurement. However, São Paulo has its own institutions.
PGE is São Paulo’s counterpart to AGU
The CEDC team in São Paulo’s Ministry of Finance trains participants about reverse
auctions, as does SLTI, the Federal regulator
FUNDAP and FAZESP are the State’s capacity-building agencies, functioning like ENAP
and ESAF (the School for Finance Administration or Escola de Administração Fazendária
that reports to the Ministry of Finance) at the Federal level
PRODESP is São Paulo’s state-owned IT enterprise. It provides datacenter services, and
customer assistance to all users of government IT systems (SERPRO plays the same role at
the Federal level).
124
Indicator 7. The public procurement market
Summary for Indicator 7
Sub-indicators Propos
ed
score
Benchmar
k score
Any additions
to Chapter II
(Federal)?
(a) Mechanisms for partnerships between the public
and private sector are effective. 3 2 No
(b) Private sector institutions are well organized and
able to access to the market. 3 2 No
(c) No major systemic constraints (eg. inadequate
access to credit, contracting practices, etc.) inhibit the
private sector accessing the procurement market.
2 2 No
For Indicator 7, no additional information is necessary. Private institutions operate and interact
with the public sector on the same basis regardless of location. The regulatory framework for
partnerships between the public and private sectors is in Federal Law 11.079 (2004), which
applies equally to all levels of government. Credit and monetary policies also apply nationwide.
Indicator 8. Contract administration and dispute resolution provisions
Summary for Indicator 8
Sub-indicators Proposed
score
Benchmark
score
Any additions
to Chapter II
(Federal)?
(a) Procedures for administering contracts are well
defined; they include inspecting and accepting
contracts, quality control, and reviewing/issuing
amendments in a timely manner.
2 2 No
(b) Contracts include efficient and fair processes to
resolve disputes that arise during execution. 2 3 No
(c) Procedures exist to enforce the outcome of the
dispute resolution process. 3 3 No
Contract administration and dispute resolution, as well as arbitration procedures are defined by
Federal laws.
125
IV. Integrity and Transparency of the Public Procurement System
Indicator 9. Control and audit systems.
Summary for Indicator 9
Sub-indicators Proposed
score
Benchmark
score
Any
additions to
Chapter II
(Federal)?
(a) A legal framework, organization, policy, and
procedures for internal/external control and audit of
public procurement provide a functioning framework.
3 2 No
(b) Enforcement and follow-up on findings and
recommendations provide an environment that fosters
compliance.
3 2 No
(c) The internal control system provides timely
information on compliance to promote management
action.
3 2 Yes
(d) The internal controls are sufficiently defined to
allow performance audits to be conducted. 3 2 No
(e) Auditors are sufficiently informed about
procurement requirements and control systems to
conduct quality audits that contribute to compliance.
3 2 No
(c) The internal control system provides timely information on
compliance to promote management action.
(1) Written standards define the way the internal control unit conveys
issues to management, depending on the urgency of the matter.
(2) These reports are made on a regular, periodic basis throughout the
year.
(3) The established timeframes and standards are followed.
Proposed
Score Benchmark
Score
3 2
(1) CGA is São Paulo’s internal auditor. Communication between CGA officials and
management follows written standards that vary according to urgency. CGA conducts
internal control in three ways:
Special audits, at the request of the governor or government agency senior management
Periodic audits scheduled according to CGA’s annual strategic plan
Emergency or non-scheduled audits triggered by private-party reports to CGA through the
Internet, a toll-free telephone line, or other means
126
Besides these traditional exercises, CGA audits the integrity of information systems and
reliability of databases. Also, it periodically reviews contracts during the year, particularly
for high-volume, non-consulting services regulated by CADTERC.
(2) Regular periodic reports are made to management throughout the year, based on the audit
instrument used and associated risks.
(3) Audit standards and timeliness are in compliance. The Department for Internal Control
and Evaluation (Departamento de Controle e Avaliação, or DCA) of the Ministry of Finance
ensures that audit recommendations are implemented in a timely manner and that written
standards are complied with.
Condition status: All are fully met.
Indicator 10. The appeals mechanism.
Summary for Indicator 10
Sub-indicators Proposed
score
Benchmark
score
Any
additions to
Chapter II
(Federal)?
(a) Decisions are made on the basis of available
information; a final decision may be reviewed and
ruled upon by a body (or authority) with legal
enforcement capacity.
3 3 No
(b) The review system can handle complaints
efficiently and enforce the finding. 2 3 No
(c) The system operates fairly, with balanced
decisions justified by the information available. 3 3 No
(d) Decisions are published and made available to all
interested parties and the public 3 2 Yes
(e) The system ensures that the review body has full
authority and independence for resolving complaints. Pass Pass/Fail No
(d) Decisions are published and made available to all interested
parties and the public.
Proposed
Score
Benchmark
Score
3 2
(1) Decisions are legally required to be publicly available at no cost. The State’s official
gazette publishes all decisions online through e-negociospublicos.com.br and in the printed
127
version of the paper. For e-procurement processes, all decisions are also available at the
BEC/SP website.
(2) Citizens may request access at no cost to decisions and the full content of all documents
regarding procurement processes directly from government agencies.
Condition status: Fully met.
Indicator 11. Access to information.
Summary for Indicator 1
Sub-indicator Proposed
score
Benchmark
score
(a) Information is published and distributed through available
media with IT support when feasible
3 2
(1) Access to information is strongly valued and a main element of government procurement.
The Constitution requires that information be available on all aspects of public administration. In
São Paulo, access is promoted by several systems that present data on websites.
(2) Information on São Paulo procurement (invitations to bid, download-ready bidding
documents, award decisions, contracts, and complaint resolution decisions) is available at the
State official gazette website (e-negociospublicos.com.br). For e-procurement processes, the full
files (including bids received, minutes, and signed contracts) are available in BEC/SP. For many
procurement processes, (see Box 3 in Chapter II for details), invitations to bid are also advertised
in newspapers of wide circulation.
(3) Federal Law 131 (2009) requires detailed information on budget execution be displayed on
the Internet. In São Paulo, all budget commitments (empenhos) and supplier payments are on the
Ministry of Finance website.
(4) A list of disbarred firms and individuals is available on a website called Sanções
Administrativas, which appears after due process is completed, with the right to appeal. TCE/SP
also publishes a list of firms/individuals penalized by the government for poor performance
(however, they are not disbarred and may still bid for government contracts). The aim is to keep
a record government suppliers’ performance.
(5) Access to information is also subject to timeframes: All contract awards, regardless of
amount, must be published no later than the fifth business day of the month after the award.
Contract awards are placed on e-negociospublicos.com.br.
128
(6) Contracts procured by states and municipalities but financed with Federal transfers are
advertised on the Federal website, Portal de Convênios.
Condition status: Fully met.
Indicator 12. Ethics and anti-corruption measures
Summary for Indicator 12
Sub-indicators Proposed
score
Benchmark
score
Any
additions to
Chapter II
(Federal)?
(a) The legal/regulatory framework for procurement,
including bid and contract documents, addresses
corruption, fraud, conflicts of interest, and unethical
behavior and states (directly or by reference to other
laws) the actions that can be taken.
3 3 No
(b) The legal system defines responsibilities,
accountabilities, and penalties for individuals/firms
that engaged in fraudulent/corrupt practices.
3 3 No
(c) Rulings and penalties are enforced. 3 2 Yes
(d) Special measures prevent and detect fraud/
corruption in public procurement. 3 3 No
(e) Stakeholders (private sector, civil society, and
beneficiaries of procurement/end-users) support a
procurement market known for its integrity and ethical
behavior.
3 2 No
(f) The country should has a secure mechanism for
reporting fraudulent/corrupt/unethical behavior. 3 3 No
(g) Codes of conduct/ethics for participants in public
financial management systems also provide for
disclosure for those in decision-making positions.
3 2 Yes
(c) Rulings and penalties are enforced.
Proposed
Score
Benchmark
Score
3 2
(1) The Ministry of Public Management and PGE together maintain and update the Sanções
Administrativas website, which lists companies/individuals that have been tried and found guilty
of fraud/corruption/other criminal and administrative charges. Due process is followed before
they are sanctioned, with a right to appeal; names of guilty parties are only displayed on the
website after due process is completed.
129
(2) As of August 2010, there were 705 firms/individuals listed in Sanções Administrativas as
either temporarily or permanently disbarred.
(3) As mentioned earlier, TCE/SP provides online information about firms/individuals that have
been penalized by the State due to poor performance during contract execution. Firms/
individuals listed in the database are not necessarily disbarred. Rather, the aim is to track the
performance of government suppliers (and thereby enhance transparency).
Condition status: Fully met.
(g) Codes of conduct/ethics for participants involved in public financial
management systems also provide for disclosure for those in decision
making positions.
(1) A code of conduct/ethics for government officials has particular provisions
for those involved in public financial management, including procurement.
(2) The code defines accountabilities for decision-making and subjects
decision makers to specific financial disclosure requirements.
(3) The code requires compliance; consequences are administrative or
criminal.
Proposed
Score
Benchmark
Score
3 2
(1) The code of ethics for all government employees is regulated by Law 10.261 (1968). The
law does not have particular provisions for those in public financial management, since it
was designed to apply equally to all public sector employees. Both Law 6.544 (1989) and the
Federal procurement law have specific provisions on the conduct of procurement officials;
penalties are defined according to the case.
(2) Law 10.261 defines accountability for decision making, complemented by the
procurement law. Financial disclosure is mandatory for all civil servants and political
appointees, according to Decrees 41.865 (1997) and 54.264 (2009). Financial disclosure
filings of high-level officials—governors and vice-governors, ministers, the state attorney-
general, and senior managers of public enterprises—are published in the official state gazette.
All government officials must list their personal assets in the country and abroad as a
condition of employment. The list must be updated annually (no later than 90 days after the
deadline for filing tax returns) and when employment ends. Financial disclosure filings are
kept by CGA: Officials may file their lists through an online form on CGA’s website. CGA
reports non-compliance with the timeframe to the office of the Chief of Staff.
(3) The code of ethics is mandatory and penalties are listed in Articles 251-267 of Law
10.261. Depending on the offence, penalties may result in imprisonment and/or termination
of contract. Due process described in Articles 268-311 must be followed before penalties are
applied.
130
Condition status: All are fully met.
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LEI Nº 10.176, DE 11 DE JANEIRO DE 2001
LEI Nº 9.648, DE 27 DE MAIO DE 1998
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LEI N° 9.327 DE 9 DE DEZEMBRO DE 1996
LEI N° 9.069 DE 29 DE JUNHO DE 1995
LEI Nº 8.883, DE 08 DE JUNHO 1994
LEI Nº 8.666, DE 21 DE JUNHO DE 1993
LEI N° 8.248, DE 23 DE OUTUBRO DE 1991
LEI Nº 7.450, DE 23 DE DEZEMBRO DE 1985
LEI Nº 8.987, DE 13 DE FEVEREIRO DE 1995
LEI Nº 9.307, DE 23 DE SETEMBRO DE 1996
LEI COMPLEMENTAR Nº 123, DE 14 DE DEZEMBRO DE 2006
LEI Nº 8.112, DE 11 DE DEZEMBRO DE 1990
LEI COMPLEMENTAR Nº 101, DE 4 DE MAIO DE 2000
LEI No 11.079, DE 30 DE DEZEMBRO DE 2004
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Medida Provisória nº 2.182-16, de 28 de Junho de 2001
Medida Provisória nº 2.200, de 28 de Junho de 2001
Medida Provisória nº 2.108-15, de 21 de Junho de 2001
Medida Provisória nº 2.108-14, de 24 de Maio de 2001
Medida Provisória nº 2.147, de 15 de Maio de 2001
133
Medida Provisória nº 2.108-13, de 27 de Março de 2001
Medida Provisória nº 2.108-12, de 27 de Março de 2001
Medida Provisória nº 2.108-11, de 23 de Fevereiro de 2001
Medida Provisória nº 2.108-9, de 27 de Dezembro de 2000
Medida Provisória nº 2.026-8, de 21 de dezembro de 2000
Medida Provisória nº 2.026-7, de 23 de novembro de 2000
Medida Provisória nº 2.026-6, de 26 de outubro de 2000
Medida Provisória Nº 2.026-5, de 27 de setembro de 2000
Medida Provisória No 2.026-4, de 28 de agosto de 2000
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DECRETO Nº- 6.428, DE 14 DE ABRIL DE 2008.
DECRETO Nº- 6.403, DE 17 DE MARÇO DE 2008.
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DECRETO Nº 6.258, DE 19 DE NOVEMBRO DE 2007.
DECRETO Nº 6.204, DE 05 DE SETEMBRO DE 2007.
DECRETO Nº 6.170, DE 25 DE JULHO DE 2007.
DECRETO Nº 6.087, DE 20 DE ABRIL DE 2007.
DECRETO Nº 5.913, DE 27 DE SETEMBRO DE 2006.
DECRETO Nº 5.906, DE 26 DE SETEMBRO DE 2006.
DECRETO Nº 5.732, DE 23 DE MARÇO DE 2006.
DECRETO Nº 5.715, DE 7 DE MARÇO DE 2006.
DECRETO Nº 5.644, DE 28 DE DEZEMBRO DE 2005.
DECRETO Nº 5.635, DE 26 DE DEZEMBRO DE 2005.
DECRETO Nº 5.586, DE 19 DE NOVEMBRO DE 2005.
DECRETO Nº 5.504, DE 5 DE AGOSTO DE 2005.
DECRETO Nº 5.450, DE 31 DE MAIO DE 2005.
DECRETO Nº 5.379, DE 25 DE FEVEREIRO DE 2005.
DECRETO Nº 5.355, DE 25 DE JANEIRO DE 2005.
DECRETO Nº 4.992, DE 18 DE FEVEREIRO DE 2004.
134
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DECRETO Nº 4.358, DE 05 DE SETEMBRO DE 2002
DECRETO Nº 4.342, DE 23 DE AGOSTO DE 2002
DECRETO Nº 4.232, DE 14 DE MAIO DE 2002
DECRETO DE 14 DE NOVEMBRO DE 2001
DECRETO Nº 4.004, DE 08 DE NOVEMBRO DE 2001
DECRETO Nº 4.002, DE 07 DE NOVEMBRO DE 2001
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DECRETO Nº 3.892, DE 20 DE AGOSTO DE 2001
DECRETO Nº 3.818, DE 15 DE MAIO DE 2001
DECRETO Nº 3.784, DE 6 DE ABRIL DE 2001
DECRETO Nº 3.771, DE 13 DE MARÇO DE 2001
DECRETO Nº 3.722, DE 9 DE JANEIRO DE 2001
DECRETO Nº 3.697, DE 21 DE DEZEMBRO DE 2000
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DECRETO Nº 2.783, DE 17 DE SETEMBRO DE 1998
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DECRETO Nº 2.271, DE 07 DE JULHO DE 1997
DECRETO Nº 2.031, DE 11 DE OUTUBRO DE 1996
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DECRETO Nº 1.094, DE 23 DE MARÇO DE 1994
DECRETO N° 1.070, DE 2 DE MARÇO DE 1994
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DECRETO N° 99.509, DE 05 DE SETEMBRO DE 1990
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INSTRUÇÃO NORMATIVA Nº 02, DE 11 DE OUTUBRO DE 2010.
INSTRUÇÃO NORMATIVA NO 01, DE 19 DE JANEIRO DE 2010.
INSTRUÇÃO NORMATIVA NO 05, DE 18 DE DEZEMBRO DE 2009.
INSTRUÇÃO NORMATIVA NO 04, 11 DE NOVEMBRO DE 2009.
INSTRUÇÃO NORMATIVA NO 03, DE 15 OUTUBRO DE 2009.
INSTRUÇÃO NORMATIVA Nº 02, DE 16 DE SETEMBRO DE 2009.
INSTRUÇÃO NORMATIVA NO 02, 30 DE ABRIL DE 2008.
INSTRUÇÃO NORMATIVA Nº 4, DE 19 DE MAIO DE 2008.
INSTRUÇÃO NORMATIVA Nº 3, DE 15 DE MAIO DE 2008.
INSTRUÇÃO NORMATIVA Nº 02, DE 30 DE ABRIL DE 2008
INSTRUÇÃO NORMATIVA Nº 1, DE 5 DE MARÇO DE 2008
INSTRUÇÃO NORMATIVA Nº 02, DE 11 DE DEZEMBRO DE 2007
INSTRUÇÃO NORMATIVA Nº 01, DE 21 DE JUNHO DE 2007
INSTRUÇÃO NORMATIVA Nº 103, DE 30 DE ABRIL DE 2007
INSTRUÇÃO NORMATIVA STN Nº 2, DE 31 DE MAIO DE 2006 - NORMAS PARA AS ELEIÇÕES
INSTRUÇÃO NORMATIVA STN Nº 3, DE 25 DE SETEMBRO DE 2003
INSTRUÇÃO NORMATIVA Nº 82, DE 17 DE SETEMBRO DE 2002
INSTRUÇÃO NORMATIVA Nº 01, DE 08 DE AGOSTO DE 2002
INSTRUÇÃO NORMATIVA Nº 01, DE 17 DE MAIO DE 2001
INSTRUÇÃO NORMATIVA Nº 04, DE 08 DE ABRIL DE 1999
INSTRUÇÃO NORMATIVA Nº 03, DE 31 DE MARÇO DE 1999
INSTRUÇÃO NORMATIVA N° 28, DE 1º DE MARÇO DE 1999
INSTRUÇÃO NORMATIVA Nº 08, DE 04 DE DEZEMBRO DE 1998
INSTRUÇÃO NORMATIVA Nº 06, DE 10 DE SETEMBRO DE 1998
INSTRUÇÃO NORMATIVA Nº 2, DE 17 DE ABRIL DE 1998
INSTRUÇÃO NORMATIVA Nº 18, DE 22 DE DEZEMBRO DE 1997
INSTRUÇÃO NORMATIVA N° 13, DE 12 DE SETEMBRO DE 1997
INSTRUÇÃO NORMATIVA N° 12, DE 05 DE SETEMBRO DE 1997
INSTRUÇÃO NORMATIVA CONJUNTA N° 4, DE 18 DE AGOSTO DE 1997
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INSTRUÇÃO NORMATIVA Nº 6, DE 16 DE JUNHO DE 1997
INSTRUÇÃO NORMATIVA Nº 03, DE 20 DE FEVEREIRO DE 1997
INSTRUÇÃO NORMATIVA STN Nº 01, DE 15 DE JANEIRO DE 1997
INSTRUÇÃO NORMATIVA Nº 13, DE 30 DE OUTUBRO DE 1996
INSTRUÇÃO NORMATIVA Nº 06, DE 03 DE NOVEMBRO DE 1995
INSTRUÇÃO NORMATIVA Nº 05, DE 21 DE JULHO DE 1995
INSTRUÇÃO NORMATIVA Nº 09, DE 26 DE AGOSTO DE 1994
INSTRUÇÃO NORMATIVA Nº 205, DE 08 DE ABRIL DE 1988
PORTARIA Nº 23 DE 28 DE OUTUBRO DE 2010.
PORTARIA Nº 22, DE 11 DE OUTUBRO DE 2010.
PORTARIA Nº 19, DE 9 DE SETEMBRO DE 2010.
PORTARIA Nº 18, DE 9 DE SETEMBRO DE 2010.
PORTARIA Nº 16, DE 16 DE AGOSTO DE 2010.
PORTARIA Nº 12, DE 29 DE JULHO DE 2010
PORTARIA SLTI/MP Nº 11 DE 29 DE JULHO DE 2010
PORTARIA SLTI/MP Nº 7, DE 21 DE JUNHO DE 2010
PORTARIA Nº 03, DE 28 DE ABRIL DE 2010.
PORTARIA Nº 205, DE 22 DE ABRIL DE 2010.
PORTARIA SLTI/MP Nº 02, 16 DE MARÇO DE 2010.
PORTARIA Nº 01, DE 29 DE JANEIRO DE 2010.
PORTARIA Nº 505, DE 29 DE DEZEMBRO DE 2009.
PORTARIA INTERMINISTERIAL Nº 12, DE 23 DE NOVEMBRO DE 2009
PORTARIA Nº 11 DE 29 DE OUTUBRO DE 2009
PORTARIA Nº 10, DE 07 DE OUTUBRO DE 2009.
PORTARIA Nº 9, DE 07 DE OUTUBRO DE 2009.
PORTARIA Nº 7 DE 31 DE JULHO DE 2009
PORTARIA Nº 02 , DE 8 DE ABRIL DE 2009
PORTARIA Nº 3 DE 30 DE ABRIL DE 2009
PORTARIA Nº 06, DE 10 DE JULHO DE 2009
PORTARIA Nº 05, DE 07 DE JULHO DE 2009
PORTARIA Nº 90, DE 24 DE ABRIL DE 2009.
PORTARIA Nº 04 , DE 18 DE MAIO DE 2009.
PORTARIA Nº 03 , DE 30 DE ABRIL DE 2009.
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PORTARIA Nº 02 , DE 8 DE ABRIL DE 2009.
PORTARIA Nº 1, DE 2 DE FEVEREIRO DE 2009
PORTARIA Nº10, DE 22 DE DEZEMBRO DE 2008
PORTARIA Nº 9, DE 31 DE OUTUBRO DE 2008
PORTARIA NORMATIVA Nº 1, DE 28 DE AGOSTO DE 2008
PORTARIA Nº 6, DE 31 DE JULHO DE 2008.
PORTARIA INTERMINISTERIAL 165, DE 20 DE JUNHO DE 2008.
PORTARIA INTERMINISTERIAL 128, DE 29 DE MAIO DE 2008.
PORTARIA INTERMINISTERIAL 127, DE 29 DE MAIO DE 2008.
PORTARIA Nº 4, DE 29 DE ABRIL DE 2008.
PORTARIA INTERMINISTERIAL 75, DE 9 DE ABRIL DE 2008.
PORTARIA INTERMINISTERIAL 24, DE 19 DE FEVEREIRO DE 2008.
PORTARIA Nº 3, DE 21 DE FEVEREIRO DE 2008
PORTARIA Nº 1, DE 29 DE JANEIRO DE 2008
PORTARIA Nº 6, DE 28 DE DEZEMBRO DE 2007
PORTARIA Nº 5, DE 30 DE OUTUBRO DE 2007
PORTARIA Nº 4 , DE 31 DE JULHO DE 2007
PORTARIA INTERMINISTERIAL Nº150, DE 18 DE MAIO DE 2007
Portaria Nº 2, de 7 de maio de 2007
Portaria Nº 1, de 31 de janeiro de 2007
Portaria Nº 950, de 12 de dezembro de 2006
Portaria Nº 6, de 22 de novembro de 2006
Portaria Nº 5, de 18 de outubro de 2006
Portaria Nº 140, de 16 de março de 2006
Portaria Nº 4, de 31 de agosto de 2006
Portaria Nº 3, de 15 de agosto de 2006
Portaria Nº 217, de 31 de julho de 2006
Portaria Nº 3, de 12 de julho de 2006
Portaria Nº 2, de 4 de maio de 2006
Portaria Nº 44, de 14 de março de 2006
Portaria Nº 1, de 20 de fevereiro de 2006
Portaria Nº 1, de 4 de janeiro de 2006
Portaria Nº 9, de 22 de dezembro de 2005
138
Portaria Nº 6, de 22 de julho de 2005
Portaria Nº 4, de 7 de julho de 2005
Portaria Nº 3, de 7 de julho de 2005
Portaria Nº 41, de 4 de março de 2005
Portaria Nº 7, de 17 de dezembro de 2004
Portaria Nº 4, de 20 de julho de 2004
Portaria Nº 3, de 27 de maio de 2004
Portaria Nº 98, de 16 de julho de 2003
Portaria Nº 5, de 11 de junho de 2003
Portaria Nº 3, de 16 de maio de 2003
Portaria Nº 57, de 9 de maio de 2003
Portaria Nº 47, de 29 de abril de 2003
Portaria Nº 2, de 26 de fevereiro de 2003
Portaria Normativa Nº 5, de 19 de dezembro de 2002
Portaria Normativa Nº 4, de 19 de dezembro de 2002
Portaria Nº 1514, de 19 de novembro de 2002
Portaria Nº 08, de 1º de outubro de 2002
PORTARIA NORMATIVA Nº 4, DE 29 DE OUTUBRO DE 2001
Portaria Normativa nº 01, de 06 de agosto de 2002
Portaria nº 05, de 21 de maio de 2002
Portaria nº 207, de 20 de maio de 2002
Portaria nº 04, de 15 de maio de 2002
Portaria nº 95, de 19 de abril de 2002
Portaria nº 03, de 21 de março de 2002
Portaria nº 307, de 13 de dezembro de 2001
Portaria nº 1.534, de 13 de dezembro de 2001
Portaria nº 306, de 13 de dezembro de 2001
Portaria nº 265, de 16 de novembro de 2001
Portaria Normativa nº 04, de 29 de outubro de 2001
Portaria Normativa nº 03, de 29 de outubro de 2001
Portaria Nº 137, de 28 de junho de 2001
Portaria Nº 110, de 29 de maio de 2001
Portaria Normativa nº 1.657, de 28 de dezembro de 2000
139
Portaria Normativa nº 1.642, de 22 de dezembro de 2000
Portaria Normativa nº 02, de 27 de outubro de 2000
Portaria nº 1250, de 25 de agosto de 2000
Portaria Normativa nº 01, de 04 de julho de 2000
Portaria Normativa nº 171, de 28 de dezembro de 1999
Portaria nº1.321, de 02 de setembro de 1999
Portaria Interministerial nº3.534, de 29 de dezembro de 1998
Portaria nº 3.324, de 19 de novembro de 1998
Portaria nº 2.650, de 26 de agosto de 1998
Portaria nº 2.081, de 16 julho de 1998
Portaria nº 1.591, de 15 de junho de 1998
Portaria nº 1.580, de 12 de Junho de 1998
Portaria nº 1.359, de 21 de maio de 1998
Portaria nº 607, de 20 de Março de 1998
Portaria nº 4.061, de 26 de Dezembro de 1997
Portaria nº 2.433, de 30 de julho de 1997
Portaria nº 2.296, de 23 de julho de 1997
Portaria nº 1.986, de 26 de junho de 1997
Portaria nº 1.823, de 12 de junho de 1997
Portaria nº 1.510, de 14 de maio de 1997
Portaria nº 1.285, de 25 de abril de 1997
Portaria nº 1.008, de 09 de Abril de 1997
Portaria nº 3.256, de 11 de Novembro de 1996
Portaria nº 3.194, de 06 de Novembro de 1996
Portaria nº 3.065, de 23 de Outubro de 1996
Portaria nº 2.050, de 18 de Maio de 1992
Resolução Nº 22205, de 10 de Maio de 2006.
Resolução Nº 004, de 28 de Julho de 2005.
Resolução nº 2 do Comitê Executivo do Governo Eletrônico, de 30 de Julho de 2001
São Paulo State’s Laws:
140
Constituição Estadual de São Paulo, atualizada até Emenda 32, 10 de Dezembro de 2009
Lei nº 6.544, de 22 de novembro de 1989
Lei Estadual nº 12.799, de 11 de Janeiro de 2008
Lei Estadual nº 13.121, de 7 de Julho de 2008
Lei Estadual nº 13.122, de 7 de Julho de 2008
Lei Nº 10.261, de 28.10.1968.
Decreto Estadual nº 47.297, de 6 de Novembro de 2002
Decreto Estadual nº 47.945, de 16 de Julho de 2003
Decreto Estadual nº 48.176, de 23 de Outubro de 2003
Decreto Estadual nº 48.326, de 12 de Dezembro de 2003
Decreto Estadual nº 48.405, de 06 de Janeiro de 2004
Decreto Estadual nº 48.796, de 14 de Julho de 2004
Decreto Estadual nº 48.999, de 29 de Setembro de 2004
Decreto Estadual nº 49.722, de 24 de Junho de 2005
Decreto Estadual nº 50.170, de 4 de novembro de 2005
Decreto Estadual nº 50.589, de 16 de Março de 2006
Decreto Estadual nº 51.370, de 14 de Dezembro de 2006
Decreto Estadual nº 51.469, de 2 de Janeiro de 2007
Decreto Estadual nº 51.473, de 2 de Janeiro de 2007
Decreto Estadual nº 51.479, de 11 de Janeiro de 2007
Decreto Estadual nº 51.636, de 9 de Março de 2007
Decreto Estadual nº 51.809, de 16 de Maio de 2007
Decreto Estadual nº 52.205, de 27 de Setembro de 2007
Decreto Estadual nº 52.228, de 5 de Outubro de 2007
Decreto Estadual nº 52.480, de 17 de Dezembro de 2007
Decreto Estadual nº 52.610, de 4 de Janeiro de 2008
Decreto Estadual nº 52.658, de 23 de Janeiro de 2008
Decreto Estadual nº 53.047, de 2 de junho de 2008
Decreto Estadual nº 53.336, de 20 de Agosto de 2008
Decreto Estadual nº 53.455, de 19 de Setembro de 2008
Decreto Estadual nº 53.546, de 13 de Outubro de 2008
Decreto Estadual nº 53.938, de 6 de Janeiro de 2009
Decreto Estadual nº 53.963, de 21 de Janeiro de 2009
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Decreto Estadual nº 53.980, de 29 de Janeiro de 2009
Decreto Estadual nº 54.010, de 12 de Fevereiro de 2009
Decreto Estadual nº 54.229, de 13 de abril de 2009
DECRETO Nº 54.704, de 21 de agosto de 2009
DECRETO Nº 54.939, DE 20 DE OUTUBRO DE 2009
DECRETO Nº 55.312, DE 5 DE JANEIRO DE 2010
DECRETO Nº 55.357, DE 18 DE JANEIRO DE 2010
DECRETO Nº 55.938, DE 21 DE JUNHO DE 2010
Resolução CEGP-10, de 19-11-2002
Resolução CC-68, de 23 de Outubro de 2003
Resolução CC-76, de 28-11-2003
Resolução CC-79, de 12-12-2003
Resolução CC-50, de 23-06-2004
Resolução CC-74, de 7-10-2004
Resolução CC-77, de 10-11-2004
Resolução CC-52, de 19-7-2005
Resolução CC-53, de 19-7-2005
Resolução SF-23, de 25-7-2005
Resolução CC-27, de 25-5-2006
Resolução SF-3, de 26-1-2007
Resolução SF-4, de 6-2-2007
Resolução SF-15, de 19-3-2007
Resolução SGP - 14, de 10-10-2007
Resolução CC-48, de 5-11-2007
Resolução CQGP-1, de 12-2-2008
Resolução SF-44, de 19-9-2008
Resolução CC-24, de 16-6-2009
Resolução CC-52, de 26-11-2009
Portaria CEDC - 1, de 3-4-2007
Deliberação CPI – 8, de 4-12-2009
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World Wide Web Resources:
http://www.presidencia.gov.br/legislacao/.
http://www.comprasnet.gov.br
http://www.bec.sp.gov.br
http://www.pregao.sp.gov.br
http://www.contasabertas.com.br
http://www.planejamento.gov.br
http://www.tcu.gov.br
http://www.cgu.gov.br
http://www.portaltransparencia.gov.br
http://www.portaldatransparencia.gov.br/ceis/
http://www.corregedoria.sp.gov.br
http://www.fazenda.gov.br
https://www.convenios.gov.br/portal/
http://www.cqgp.sp.gov.br
http://www.pge.sp.gov.br
http://www.agu.gov.br
http://www.gestorpublico.sp.gov.br
http://www.enap.gov.br
http://www.licitacao.com.br
http://www.transparencia.org.br
http://www.dnit.gov.br
http://www.serpro.gov.br
http://www.prodesp.sp.gov.br
http://www.imprensaoficial.com.br
http://www.e-negociospublicos.com.br
http://www.dou.gov.br
http://www.tce.sp.gov.br
http://www.fazenda.sp.gov.br
http://www.saopaulo.sp.gov.br
http://www.planejamento.sp.gov.br
http://www.esaf.fazenda.gov.br
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http://www.brasil.gov.br
http://www.investe.sp.gov.br
http://www.cidadao.sp.gov.br
http://www.cade.gov.br
http://www.mpu.gov.br
http://www.dpf.gov.br
http://www.mj.gov.br
