The Brazilian government proposes new bidding rules. A slow week in Congress. State-owned companies’ profits up by 132 percent.
Government proposes new bidding rules
Congress is analyzing a bill to establish a brand new regulatory framework for public bidding processes. The new law would make rules more flexible, altering selection criteria for companies and establishing better conditions for companies to fight the government if the administration fails to pay for the service that has been performed. The economic team defends that it will increase competition and make Brazil more attractive to foreign companies.
The bill was approved by a special House committee last December, and the Economy Ministry is trying to change it before it goes to a floor vote. Here are the main changes proposed:
- Local bias. The government wants to scrap protectionist measures that are not cost-effective for the state. As it is, Brazilian suppliers can offer prices up to 20 percent higher than foreign companies and still be awarded the contracts. The rule is championed by the Workers’ Party—but reduces competition.
- Insurance. For projects above BRL 200m, companies must have...