The most common mistakes in international bidding

It is not enough to talk about international competition as one in which foreigners can participate, nor is it limited to the definition of Article 6, Point XXXV, Law no. 14,133/2021: “a tender that is processed on the territory of the state in which the participation of foreign bidders is allowed, with the possibility of quoting the price in a foreign currency, or a tender in which the contractual object can or must be fully or partially performed on foreign territory”.

Precisely because of this limitation of ideas, the most frequent mistakes are repeated:

1) Consider optional international bidding
This is a mandatory contracting procedure when, due to the limitations or conditions of the national market, the state must necessarily invite, in an explicit way and through national and international means of dissemination, foreign bidders to participate in the dispute and whose notice of invitation is specially prepared for this (example: if the regulation products controlled by the military does not close the market, a public entity cannot decide to conduct a national tender when the security and defense market is mostly abroad);

two) Do not publish the notice abroad
With warnings such as the one in judgment no. 2672/2017 — Plenary, TCU, it is not enough to claim that Law no. 14,133/2021 does not require the publication of an international tender abroad, since the isonomy of advertising for access to information about the event, in the sense of Article 37 of the Constitution, occurs only when the notice of the international tender is published in the media such as
www.dgmarket.coma portal created by the World Bank 21 years ago and has more than 170 countries (the standard for countries is to publish opportunities abroad) and several organizations, such as the IDB, Bird and others, not forgetting the duty to circulate tender notices on a complete list of sectors for promotion of trade in Brazil (Secoms of the Ministry of Foreign Affairs) and notification, as standard, in English, the most common language on all specialized portals;

3) Insist on national competition with a foreigner (before GPA)
Brazil is still awaiting entry into the Agreement on Public Procurement (GPA)World Trade Organizations, for the presence of foreigners in national offers, and the current national notices do not have rules on the accreditation of foreign representatives, tax equalization of offers, model of Brazilian and foreign offers, allowed currencies, treatment of foreign documents (legalization and translation), Incoterms, payment to foreigners (including letters of credit), draft contracts prepared for foreigners and many other points (it is not enough to talk in theory, when the reality is “Currently” indicates that international bidding is still the right door for foreigners and that public notice is 100% ready);

4) Insist on face-to-face competition
After the opening of SICAF for foreigners, Normative instructions no. 10, dated February 10, 2020, of the Management Secretariat of the Special Secretariat for Debureaucratization, Management and Digital Administration of the Ministry of Economy, began to provide full access to foreigners to the trading environment in Brazil, and it is unjustified that some entities insist on their trading sessions face-to-face, which generates high costs for foreigners, waste of time, infeasibility of obtaining and legalizing documents abroad and sworn translation in Brazil, on time to participate in, as they say, international trade (in person, today, implies serious nullity, since there is already an operational means for the presence of foreigners in electronic mode, and competition is limited to face-to-face, and no norm of any entity in any sphere it cannot impose one or the other system to the extent of making the competitive purpose of the isonomie of bidding unfeasible, which is possible with complete and easy access to foreigners, as the Brazilians can for electronic trading );

5) To think that the tax equalization rule “finished”
Regardless of the doctrine and legal differences, the fact is that the equalization of the proposals of foreigners, in the tax part, provided for in article 42, § 4, of Law 8.666/93, which was related to taxes on the final Brazilian sale, moved to article 52. paragraph 4 of Law no. 14.133/2021, with the difference that now taxes will appear in the public notice by definition based on estimates or averages, but the equalization still exists, whether questionable or not, and the public agent or consultant of a private company must never fail to take into take into account the text of the applicable legal norm in their work;

6) Direct specifications only for Brazilians or companies from certain countries
It does not make sense to launch an international procedure if the technical descriptions show that only Brazilians can meet the target specifications, because it is not possible to direct the specifications from the preparatory phase of the event to manufacturers or distributors in certain countries, even because this is valid against rules such as article 37 point XXI . of the Constitution, Article 3, Paragraph 1, Point II. Act no. 8.666/93 and Article 9, paragraph II. Act no. 14.133/2021, bearing in mind that the match does not start the game predicting who will be the winner;

7) Abuse of exclusivity cards
Some time ago it was easy to use a letter from some Brazilian trade body to argue that there is no possible competition and go for a direct national contract rather than a tender, even for a product that is imported, but this distortion has been resolved with internet searches that have existed today, when for several markets there are periodical reports with the main manufacturers, competitors, distributors and even a list of products from their respective portfolios, as there are in many areas, examples of which can be cited are aircraft, vessels, armaments, appliances and supplies, doctors, research equipment, radio and other telecommunication products, etc., so that research today should be global opportunities for that competition; and

8) Thinking that a foreign company needs a work permit to participate in the tender
Article 28, point V, of Law no. 8.666/93 never forbade foreigners to participate in tenders, as proof of this are the large tenders not only for public security, national defense, aid to the Covid pandemic and, a little further into the past, those of the infrastructure for the World Football Championship and the Olympic Games, all without any impositions like the one made by many, since the provision of the law dealt only with the decree on the authorization of companies operating in the country (Art. 1.134 of the Civil Code), that is, that they decided to remain operating in Brazil, so that Law no. 14.133/2021 only “turned off” a rule that was not an obstacle to foreigners, since it is obvious that the activities that are developed will have, for the contract, for example, special needs, such as the temporary registration of a foreign engineering company to work in Brazil, permission for a foreign engineer to work in public works or when, in fact, the authorization from Article 1.134 of the Civil Code is essential for the activity that will be performed in Brazil, but for the contract, and not in the bidding phase, it is worth repeating.

In the end, this text is not a set of criticisms, but a realistic, simple and objective summary of useful information that will help public officials and bidders, so that the same problematic situations are not repeated in international tenders.

Jonas Lima is a lawyer specializing in offers and contracts, with a postgraduate study in public law and compatibility Regulator and partner Jonas Lima Sociedade de Advocacia.

Leave a Reply

Your email address will not be published. Required fields are marked *