Abstract
Law 8,883/93, the so-called “procurement law”, includes the main provisions related to the purchases of the Brazilian government. Some key changes to this legislation have been introduced since 2002, altering the whole format of the auctions for the sake of government procurement. Our goal in this article is to assess the impact of the new rules of procurement on bid-rigging and steering of contracts. On the one hand, the transition from a first-price sealed bid auction to an (English) open bid auction facilitated cartels. On the other hand, electronic auctions introduced a welcome bidder anonymity, which had the opposite effect. The article also comments on the impact of some other new rules on the possibility of bid-rigging in Brazilian government procurement like the introduction of the possibility for post-auction negotiation on prices and the change in the time for checking bidder eligibility.
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Notes
- 1.
Se the report of the Brazilian competition Agency, CADE on the case, http://www.cade.gov.br/upload/HC%20Vers%C3%A3o_P%C3%BAblica.pdf
- 2.
From the point of view of economic theory, all modalities are auctions, which should not be mistaken for this specific modality, as defined by law.
- 3.
- 4.
Assuming the calls for technical and financial eligibility are sufficient to eliminate opportunists, which is not the case.
- 5.
Article 4, subsection XVIII.
- 6.
In addition to anonymity, Klemperer (2008) recommends that float values be prohibited and that minimum increases be determined for each bid, so as to hinder communication via bids.
- 7.
Pursuant to article 46 of Law No. Lei 8,666/93 “services of a predominantly intellectual nature, in particular the project development, calculations, inspections, oversight, management, and engineering consulting in general and, especially, the development of preliminary technical studies and basic and executive project designs.”
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Mattos, C. (2016). Procurement Procedures and Bid-Rigging in Brazil. In: Jenny, F., Katsoulacos, Y. (eds) Competition Law Enforcement in the BRICS and in Developing Countries. International Law and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-30948-4_6
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