Coronavirus: Provisional Measure relaxes bidding rules

Provisional Measure 961 was published last May 6, authorizing advance payments in bids and contracts, adjusting the limits for waiving bids and expanding the use of the Special Regime for Public Contracting (RDC) during a state of public calamity, recognized by Legislative Decree no. 6 of March 20, 2020.

MP 961 provides for an increase in the limit for contracts with bidding waiver: (i) for engineering works and services up to R$100,000.00 as total value; and (ii) for other services and purchases in the amount of up to R$50,000.00, as total value.

Fragmented contracting of services of the same nature and in the same place, which may occur jointly, is not allowed, only for the purpose of framing the values in the case of waiver of bidding.

There is a provision for advance payment by the public administration when it is an indispensable condition for obtaining the good or providing the service, or when it represents significant economy of resources for the administration.

This hypothesis of anticipated payment may bring risks to the government if the contractor does not fulfill its part of the contract, even if there is a provision for full repayment of the amount. However, such a measure may bring benefits to the emergency situation of facing the pandemic of COVID-19, in view of the need for cash flow so that suppliers can satisfactorily meet public demands, added to the fact that the public administration does not always comply with its payments on time, keeping suppliers away.

Finally, MP 961 also extended the application of the Special Regime for Public Procurement (RDC) to include bidding and contracting of any works, services, purchases, sales and leases during the public disaster period.

Originally instituted to enable the works necessary for the 2013 Confederations Cup, 2014 World Cup and 2016 Olympic Games sporting events, the RDC streamlines contracting and ensures transparency in the process. Its scope has been expanded over the years, as occurs with the current provisional measure.

It is important to emphasize that the provisions of this rule apply to acts performed during the period of public calamity, regardless of the extension of the contracts signed, or any extensions, which may exceed the end of this period.

The Infrastructure and Energy team at Barcellos Tucunduva Advogados is at your disposal - [email protected]