Public Bidding in Brazil
This article will give you an overview of Brazilian Public Bidding and what are the main requirements foreign companies have to meet in order to participate.
In a country where there is a tendency to valorize not only national, but public companies when it comes to public bidding, foreigners may ask themselves whether they can participate or not.
Law 8.666/93 allow foreign companies to participate in public bidding. The question is whether the right of participation is limited to foreigners that are in regular operation in the country or if it can be applied to the foreigners that do not have permission to operate in Brazil, those that are headquarted abroad.
Also, it is important to clarify exactly to what extent it is viable for foreign companies to compete with the public Brazilian ones.
Overall, there is no formal barrier against the participation of foreign companies in public bidding, even in the so-called domestic ones, but there are bureaucratic requirements that must be met.
In order to participate in public bidding, companies must provide documents related to:
- Legal license;
- Technical skills;
- Economic and financial qualification;
- Tax regularity.
The foreign proposal may be written in the language of the supplier's country of origin as long as a translation is provided as well. In this case, the translation does not has to be done by an official translator.
The proposal must contain a FOB (Free on Board) price, for import purposes, and CIF ( Cost, Insurance and Freight) price, for hiring purposes, and also the internal transport value.
It is also important to say that in case of domestic bidding, foreign companies will be paid in Brazilian currency.
In case of ties, the preference will be given to goods and services, taking in consideration the following attributes:
- Jobs generation;
- Taken effects in the collection of municipal, state and federal taxes;
- Technological development and innovation in the country;
- Additional costs to the products and services;
- National manufacture;
- Those that were made or provided by companies that invest in research and in the development of the national technology.
It is important to mention that these criteria were significantly changed by the Buy Brazilian Act, launched in 2010 as a way of promoting the development of national technology.
Preference to Brazilian Products and Services
Last December the Brazilian Federal government decreed a new law that gives preference to Brazilian products and technology.
Since then, national development has become a public bidding matter. It is a measure that aims to protect the Brazilian market, generate jobs and provide technological improvement.
The law gives preference, on public bidding, to companies that offer products and services that comply Brazilian technical regulation and are produced in Brazil. The specific margin of preference will be defined in a presidential decree, but there is already a provision defining that it can not exceed the amount of 25% above the price of foreign manufactured products and services.
Such measure has been controversy since its launch. There are those who support the government and believe that the measure does not aim to impose acquisition of products of inferior quality or less technologically developed.
Some others, however, believe that law 12.349 is a barrier instead of an incentive, as it penalizes smaller foreign companies.
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