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Fighting bid rigging in Brazil: A review of federal public procurement

 

Português 

Fighting Bid Rigging in Brazil 2021 350px

DATE OF PUBLICATION:

19 MAY 2021

Download the report

Read the highlights brochure in English 

Read the highlights brochure in Portuguese

 

Public procurement plays a strategic role in a country’s economy, and the quality of services that the government provides to its citizens. In 2020, Brazil spent around BRL 35.5 billion in the procurement of goods, services and works. In 2017, public procurement represented around 13.5% of Brazil’s total government expenditures and approximately 6.5% of the country’s GDP.

Due to the size of the involved financial flows, public procurement is exposed to risks of collusion among suppliers as well as fraud and corruption. In Brazil, bid rigging is an administrative and a criminal offence and has long been an enforcement priority for the Brazilian Competition Authority, CADE. Against this background, Brazil has invited the OECD to assess the Brazilian public procurement framework in light of the OECD Recommendation and the Guidelines for Fighting Bid Rigging in Public Procurement

The report shows that Brazil’s federal procurement regime acknowledges and attempts to limit bid-rigging risks. Brazilian enforcement authorities have actively prosecuted and punished bid rigging. However, further efforts to make federal procurement more competitive would be useful, and the report proposes ways of achieving this objective.

The report was launched virtually on 19 May 2021 at 10h00 Brasilia time - 15h00 Paris Time.

 

Watch the launch event (in Portuguese).

 
The project

Brazil’s competition authority (CADE) has invited the OECD to assess the Brazilian public procurement framework in light of the OECD Recommendation and the Guidelines for Fighting Bid Rigging in Public Procurement.  

During the process, the OECD assessed the main rules governing public procurement in Brazil at the federal level as well as procurement practices of major federal procurers. The OECD’s assessment was presented in a report including recommendations to improve competition in public procurement and an accompanying highlights brochure.

As part of the project, the OECD also:

  • trained senior public procurement officials on the risks of bid-rigging, the forms it can take and OECD good practices to design competitive tenders;
  • trained senior officials from various public organisations on actions for damages for harm caused by anticompetitive acts; and
  • delivered a training manual for procurement officials.

Background

‌Bid rigging in public tenders involves firms conspiring to raise prices or lower the quality of their bid. It is an illegal anti-competitive practice which costs governments and taxpayers billions of dollars every year across the world.

A significant share of cartel enforcement in many OECD countries concerns bids rigging cases. This shows that there is awareness of the importance of stopping collusive practices, but also that there is room to improve compliance with competition rules in public procurement and ensure that the public sector buys the right thing, at the right price.  

The OECD Recommendation and the Guidelines for Fighting Bid Rigging in Public Procurement were designed to reduce the risks of bid rigging through careful design of the procurement process and to help detect bid rigging conspiracies.

Project stages

The OECD project team:

1

Analysed Brazil’s public procurement laws and regulations as well as the institutional setting, all at the federal level.

2

Interviewed national stakeholders to collect facts and insights.

3

Identified good practices on fighting bid rigging from other jurisdictions.

4

Recommended legal and practical improvements.

5

Provided capacity building on preventing and detecting bid rigging as well as on competition damage claims.

Links

Fighting Bid Rigging in Public Procurement

OECD Recommendation on Fighting Bid Rigging in Public Procurement

More OECD competition work on Brazil

Mexico-OECD partnership for fighting bid rigging in government contracts

Competition in Latin America

Latin American and Caribbean Competition Forum

OECD competition home page

 

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