Commented Jurisprudence: New Bidding Law. Judgment of proposals. Examination of unenforceability.
Posted: Wed Feb 19, 2025 5:27 am
The criterion defined in art. 59, § 4, of Law 14.133/2021 leads to a relative presumption of unenforceability of prices, and the Administration must, in accordance with art. 59, § 2, of said law, give the bidder the opportunity to demonstrate the feasibility of its proposal. (TCU, Bidding and Contracts Information 478/2024)
One of the biggest concerns of Contracting Agents, especially those responsible for judging bids and contract managers, is the receipt of unfeasible proposals [1] . This specter gained a lot of strength with the arrival, in the early 2000s, of the Auction modality, and it gained more momentum with the greater use (today, almost all) of the electronic form of bidding. It is easy to understand this movement.
Before the Auction, all bidding processes korea telegram data for purchases, works and contracting of services (Invitation, Price Quotation and Competition) were guided by the presentation of proposals in sealed envelopes. Let us remember that the use of the internet until the beginning of the 2000s was completely incipient.
With this feature, the company presented a single proposal and, after the envelopes were delivered, it was no longer possible to change its content. The most that some companies did to have a little flexibility in presenting the proposal was to go to the judging session with two or three proposal envelopes and, depending on the competitors present, choose the one that would guide their participation. But, let us repeat, once the envelope was presented, it was no longer possible to replace it. Many readers will remember the beginning of the privatization movement, during the FHC government (in the 1990s), when open TV channels broadcast the privatization auctions. In these broadcasts, we saw that the representatives of the competing consortiums left the delivery of the envelopes containing the proposals and documentation until the last seconds. It was a one-card contest!
With the advent of the Auction, this scenario changed drastically. The written proposal, delivered inside the envelope, no longer had a definitive effect. If it remained within 10% of the lowest value indicated, the bidder proceeded to the bidding phase and could, even if he had not presented the lowest initial proposal, be declared the winner with a more aggressive bid than his competitors. And it is precisely here that the specter of the unfeasible proposal begins to haunt government agencies more latently. This is because businessmen and sales representatives, more frequently, in their eagerness to be declared winners, began to make very aggressive bids, sometimes impossible to maintain. With the increasing use of electronic form, this (bad) habit became even more common, because, protected by a computer screen, it was more difficult to contain the entrepreneur's impetus.
This movement coincided with the growth of outsourcing in the Public Administration. Many basic public positions were eliminated and replaced by contracts with facilities companies. And with the growth of outsourcing, the risk of the contractor's eventual failure to fulfill its obligations had its variable impact greatly increased, due to the subsidiary liability that the Administration began to assume. If the winning proposal was not viable, at some point, the contractor would not be able to sustain the execution and would abandon the contract, leaving salaries and charges uncovered. Hence the great fear of auctioneers and contract managers of accepting an apparently unfeasible proposal that would not be sustainable. It is worth noting that this concern also haunted public works bids, precisely because an unfeasible proposal would result, at some point, in the abandonment of the project.
Due to the lack of specific guidance, many bid judges began to “act on their own”, disqualifying proposals based on their personal understanding of what would be an unfeasible proposal. And, not infrequently, on other occasions, they allowed weak proposals to pass, which culminated in non-compliance or contract abandonment.
One of the biggest concerns of Contracting Agents, especially those responsible for judging bids and contract managers, is the receipt of unfeasible proposals [1] . This specter gained a lot of strength with the arrival, in the early 2000s, of the Auction modality, and it gained more momentum with the greater use (today, almost all) of the electronic form of bidding. It is easy to understand this movement.
Before the Auction, all bidding processes korea telegram data for purchases, works and contracting of services (Invitation, Price Quotation and Competition) were guided by the presentation of proposals in sealed envelopes. Let us remember that the use of the internet until the beginning of the 2000s was completely incipient.
With this feature, the company presented a single proposal and, after the envelopes were delivered, it was no longer possible to change its content. The most that some companies did to have a little flexibility in presenting the proposal was to go to the judging session with two or three proposal envelopes and, depending on the competitors present, choose the one that would guide their participation. But, let us repeat, once the envelope was presented, it was no longer possible to replace it. Many readers will remember the beginning of the privatization movement, during the FHC government (in the 1990s), when open TV channels broadcast the privatization auctions. In these broadcasts, we saw that the representatives of the competing consortiums left the delivery of the envelopes containing the proposals and documentation until the last seconds. It was a one-card contest!
With the advent of the Auction, this scenario changed drastically. The written proposal, delivered inside the envelope, no longer had a definitive effect. If it remained within 10% of the lowest value indicated, the bidder proceeded to the bidding phase and could, even if he had not presented the lowest initial proposal, be declared the winner with a more aggressive bid than his competitors. And it is precisely here that the specter of the unfeasible proposal begins to haunt government agencies more latently. This is because businessmen and sales representatives, more frequently, in their eagerness to be declared winners, began to make very aggressive bids, sometimes impossible to maintain. With the increasing use of electronic form, this (bad) habit became even more common, because, protected by a computer screen, it was more difficult to contain the entrepreneur's impetus.
This movement coincided with the growth of outsourcing in the Public Administration. Many basic public positions were eliminated and replaced by contracts with facilities companies. And with the growth of outsourcing, the risk of the contractor's eventual failure to fulfill its obligations had its variable impact greatly increased, due to the subsidiary liability that the Administration began to assume. If the winning proposal was not viable, at some point, the contractor would not be able to sustain the execution and would abandon the contract, leaving salaries and charges uncovered. Hence the great fear of auctioneers and contract managers of accepting an apparently unfeasible proposal that would not be sustainable. It is worth noting that this concern also haunted public works bids, precisely because an unfeasible proposal would result, at some point, in the abandonment of the project.
Due to the lack of specific guidance, many bid judges began to “act on their own”, disqualifying proposals based on their personal understanding of what would be an unfeasible proposal. And, not infrequently, on other occasions, they allowed weak proposals to pass, which culminated in non-compliance or contract abandonment.