Strategies for foreign firms in relation to government contracts in Brazil
(VOLTAR)Ernani Teixeira Ribeiro Jr.Chief administrative law attorney with the law firm of Fraga, Bekierman & Pacheco Neto Advs.
Brazil's current economic scenario represents good business opportunities not only for companies focusing on the private sector, but also for companies which are interested in government contracts.
Brazilian government has played in the re¬cent period a key role in generating new business in the country and boosted seg¬ments in which there is significant state presence such as infrastructure, energy, transport, and technology.
This trend has not only encouraged companies with a history of directly signing government contracts, but has also attracted several investors, especially foreigners, for their first direct experiences of gov¬ernment contracts here.
From our experience in assisting several foreign conglomerates with Brazilian government procure¬ment, we understand that a crucial point for their success is developing a strategic plan that will also cover the legal aspects of the bidding processes and administrative contracts.
In many cases, companies tend to concentrate their efforts on the commercial aspects of the project, such as preparing budget schedules, finding al¬ternatives in order to submit a more competitive business proposal, and they end up neglecting the formal requirements for their participation in public bidding procedures as posed by the legislation and the bidding notice.
An important point is that under Brazilian law for in¬ternational public bidding procedures, requirements for foreign companies must obey the principle of equality and be the same as those applicable to Bra¬zilian companies, excepting certain particularities.
Although bidding criteria for proof of legal, eco¬nomic, financial and technical capacity of companies participating in the process are usually quite clear, foreign companies in many cases face interpretation issues as to how documents required in the bidding notice correspond to those covered by legislation in their country of origin.
Moreover, the above mentioned documents must be executed before a notary public, legalized by the Brazilian consulate with jurisdiction over their place of execution and then translated into Portu¬guese by a sworn translator In order to be legally recognized in Brazil.
These procedures require considerable time. In many cases, foreign companies are fully capable of fulfilling bidding requirements and their bids are highly competitive, but by not being sufficiently informed of legal procedures in Brazil, they may be disqualified over a formal item.
Needless to say, only four (4) years from the World Cup and six (6) from the Olympics, both local and international investment projects are already un¬derway. Initial studies obtained by Agenda Brasil indicate that the amounts involved reach BRL 130 billion. Therefore, when dealing with highly complex projects, the interested companies must watch for opportunities and have a defined strategy, always observing the legal procedures involved in bidding procedures here in Brazil.