by Camillo Giamundo

Law 8,666/93 did not devote a specific chapter or section to award criteria, as Law 14,133/21 does. The definitions and instructions for evaluating bids in tenders were tied to the “types of tender”, an expression no longer used in the new statute.

Under Law 8,666/93, article 44 provided that, when evaluating bids, the Committee must take into account objective criteria, previously defined in the tender notice or invitation, which must not contradict the rules and principles established in the law.

In article 45, the statute provided that, in addition to the objective criteria previously defined in the notice, the tender Committee or the person responsible for the invitation should, when evaluating bids, do so in accordance with the types of tender: (i) lowest price; (ii) best technique; (iii) technique and price; and (iv) highest bid or offer, in cases of disposal of assets or grant of real right of use.

With the update, Law 14,133/21 kept the four criteria identified above in similar form, and also introduced, in article 33, items II and VI, the criteria of highest discount and highest economic return.

Despite the novelty of the legal provision, the new criteria established in Law 14,133/21, in truth, merely codify practices already customary in tenders, and their inclusion and provision are timely.

Defining the award criterion binds the tendering Public Administration in the analysis and selection of bids, specifically regarding the particular focus intended and prioritized in the choice.

This is because, by way of example, although a tender using the “lowest price” award criterion will require bidders to meet minimum technical qualification requirements, in a tender adopting the “technique and price” criterion, such requirements must have much greater importance, complexity and depth of definition.

The importance of defining the award criterion, therefore, binds the Public Administration, which must establish clear, objective rules suited to the “type” it has selected and that best fits the object of the future contract, avoiding subjectivity, doubts and uncertainties regarding the procedure to be followed not only by it, but also by interested bidders.

 

• Lowest price (Art. 33, item I)

The former Law 8,666/93, in its art. 45, §1, item I, defined “lowest price” as the criterion for selecting the most advantageous bid for the Administration, under which the winner was the bidder that submitted a bid in accordance with the specifications of the notice or invitation and offered the lowest price.

The “lowest price” criterion was maintained in article 33, item I, of Law 14,133/21, and the concept of this evaluation gained prominence in article 34, which provides that evaluation by lowest price “will consider the lowest expenditure for the Administration, provided that the minimum quality parameters defined in the tender notice are met”.

In other words, under the new Law 14,133/21, the legislator’s concern is clear: it is not enough for the bidder’s proposal to be the cheapest. It will only be the most advantageous if the bidder also meets the minimum quality parameters defined in the tender notice.

The novelty introduced by Law 14,133/21 concerns §1 of art. 33, which provides that indirect costs related to maintenance, use, replacement, depreciation and environmental impact of the tendered object may be considered in defining the lowest expenditure, provided they are objectively measurable, as set forth in regulations.

In addition, adopting the lowest price award criterion must also observe, when receiving, analyzing and evaluating bidders’ proposals, the provisions of article 23 of Law 14,133/21 (with no equivalent in Law 8,666/93), which provides that the previously estimated value of the contract must be compatible with market prices, considering prices in public databases and the quantities to be contracted, taking into account potential economies of scale and the particularities of the place where the object will be performed.

It should be noted that reading the statute’s new provisions leads to the following conclusion: the nominally lowest price may not always mean the most advantageous bid. One must observe (i) compatibility with market prices – avoiding unfeasible and unrealistic amounts – and (ii) compliance with the minimum quality parameters defined in the tender notice – a factor that affects the identification of the price and the advantageousness of the bid – in pursuit of the goal of the lowest expenditure for the Administration.

 

• Highest discount (Art. 33, item II)

Although not provided for in the repealed Law 8,666/93, the “highest discount” criterion is not exactly a legislative novelty. This is because Federal Law 12,462 of August 4, 2011, which established the Differentiated Public Procurement Regime (RDC), already provided in its article 18, item I, for the “highest discount” criterion, equating it to the “lowest price” criterion, with the lowest expenditure for the Public Administration to be considered, using as a reference the global price set in the call for bids, with the discount extended to any amendments (art. 19, §2), and, in the case of construction works or engineering services, the percentage applied must be applied linearly to the prices of all items in the budget estimated in the call for bids (art. 19, §3).

Likewise, Federal Law 13,303 of June 30, 2016, which provides for the legal statute of public companies, mixed-capital companies and their subsidiaries, introduced in its article 54, item II, the “highest discount” award criterion, adding that the percentage offered in the winning proposals or bids extends to any amendments (§4, item I).

Finally, Decree 10,024 of September 20, 2019, which regulates electronic reverse auctions for the acquisition of goods and the contracting of common services, including common engineering services, and provides for the use of electronic waivers within the Federal Public Administration, also provided for “highest discount” as an award criterion in its article 7.

Law 14,133/21, in turn, established highest discount as one of the award criteria, providing that the estimated price or the maximum acceptable price will be stated in the tender notice (art. 24, sole paragraph), and that it will use as a reference the global price set in the tender notice, so that the discount will be extended to any amendments (art. 34, §2).

Therefore, under the new Procurement Law, bidders must bear in mind, when offering the discount, that the percentage applied will remain binding until the end of the contract, even in subsequent amendments.

Although this is not the subject of this article and relates to award criteria, it is our understanding that the rule of applying the same discount percentage from the winning bid to future amendments is not an absolute condition.

This is because, if it is found that the discount, at a future time, no longer reflects market prices, it should be reconsidered, avoiding excessive onerousness for the private contractor.

 

• Best technique or artistic content (Art. 33, item III)

A criterion used for contracting projects and works of a technical, scientific or artistic nature, best technique or artistic content consists of the exclusive evaluation of the technical or artistic proposals submitted by bidders, and the notice must define the prize or remuneration to be awarded to the winners (art. 35, Law 14,133/21).

When evaluating bids, the procedure set forth in art. 37 of Law 14,133/21 must be followed, beginning with verification of the bidder’s technical capacity and experience, through technical certificates.

Scores must also be assigned to qualitative items by an evaluation panel designated for this purpose, in accordance with guidelines and limits defined in the notice, taking into account the demonstration of knowledge of the object, the methodology and work program, the qualifications of the technical teams and the list of products to be delivered.

The evaluation panel must consist of at least three members and may be composed of permanent civil servants or public employees belonging to the permanent staff of the Public Administration, or of hired professionals with technical knowledge, experience or renown in evaluating the items specified in the notice, provided that their work is supervised by professionals designated by the competent authority.

The last stage of the evaluation consists of assigning scores for the bidder’s performance in previous contracts, which must be assessed through supporting documents (art. 88, § 3 of Law 14,133/21) and in the unified registry available on the National Public Procurement Portal (PNCP).

Law 8,666/93 did not provide for the expression “best artistic content”, adopted in the new statute. Its inclusion is timely, as it seeks to reduce contracting through non-competitive procurement in the artistic sector and brings greater competitiveness to the process, with requirements to be observed and met by the Public Administration in choosing the content sought.

 

• Technique and price (Art. 33, item IV)

Already provided for in the repealed Law 8,666/93 (art. 45, §1, item III), the technique and price award criterion was maintained in the new procurement law, and takes into account the highest score obtained from weighting, according to objective factors to be set out in the notice, the scores assigned to the technical and price aspects of the bid.

The technique and price award criterion should be chosen by the Administration when the preliminary technical study shows that the evaluation and weighting of the technical quality of bids exceeding the minimum requirements established in the notice are relevant to the purposes of the tender.

Note that the objective scoring factors are mandatory and binding, in accordance with the principle of objective evaluation, enshrined in article 5 of Law 14,133/21, which simultaneously combines the principles of equality, impersonality and adherence to the call for bids – which must guide the entire tender procedure, and from which it follows that the evaluation must be based on the criteria objectively set out in the notice.

This means there is no room for subjectivity, for evaluating a bidder’s proposal based on obscure, intangible or hard-to-measure values and criteria.

The notice must set out, clearly and objectively, the criteria that will be taken into account when evaluating bids, identifying the points to be presented by bidders to justify the grading of scores or the determination of which proposal is most suitable for the object of the future contract.

As for scoring bidders, Law 14,133/21 provides that technical proposals must be evaluated and weighted first, followed by price proposals, with a maximum weighting of 70% (seventy percent) for the technical proposal.

Such proportions and percentages for evaluating the technical proposal and the commercial proposal were not provided for in Law 8,666/93, but were commonly used by tendering entities and even recognized by the Federal Court of Accounts (TCU).

The evaluation of bids follows the same dynamics as the best technique or artistic content criterion, set forth in art. 37 of Law 14,133/21, starting with verification of the bidder’s technical capacity and experience through technical certificates, with scores assigned to qualitative items by an evaluation panel designated for this purpose, in accordance with guidelines and limits defined in the notice, taking into account the demonstration of knowledge of the tendered object, the planned methodology and work program, the qualifications of the technical teams and the list of products to be delivered.

No less important, the last stage of evaluating the technical proposal must take into account the score for the bidder’s performance in previous contracts, to be assessed through supporting documents (art. 88, § 3 of Law 14,133/21).

Furthermore, scoring related to technical-professional qualifications, as in tenders using the best technique criterion, will require the direct and personal participation of the corresponding professional in performing the respective contract (art. 38).

Finally, there is an important point in the new procurement law, in its article 34: evaluation by technique and price will also consider the lowest expenditure for the Administration, provided that the minimum quality parameters defined in the tender notice are met. At first glance, reading this provision alongside the technique and price evaluation procedure could lead to a confusion of concepts: after all, should the Administration consider the weighted average of the technical and commercial scores – which does not always represent the lowest amount proposed among bidders – or the lowest amount among all price proposals?

The answer lies in the meaning of “lowest expenditure”, which is not synonymous with “lowest price”. Lowest expenditure is the combination of several factors, namely: (i) compatibility with market prices – avoiding unfeasible and unrealistic amounts – and (ii) compliance with the minimum quality parameters defined in the tender notice – a factor that affects the identification of the price and the advantageousness of the bid – in pursuit of the goal of the lowest expenditure for the Administration.

A bidder offering the lowest price will not always demonstrate the best and most sufficient knowledge of the tendered object, the planned methodology and work program, the qualifications of the technical teams and the list of products to be delivered. Likewise, a bidder demonstrating mastery and superiority in technical aspects over other bidders may not manage to offer the best price. The key lies in the most satisfactory fulfillment of the tendered object, according to the weighting percentages.

 

• Highest bid, in the case of auction (Art. 33, item V)

Law 8,666/93 provided for the criterion of “highest bid or offer – in cases of disposal of assets or grant of real right of use”, and the wording of the new procurement law changed it to “highest bid, in the case of auction”.

An auction is the tender modality through which the Public Administration intends to dispose of real estate or unserviceable or legally seized movable property to whoever offers the highest bid (art. 6, item XL). Hence the application of the highest bid award criterion, in which the greatest financial return is the objective of the tender.

It is important to note that the definition introduced by art. 6, item XL, of Law 14,133/21 ended up excluding auctions for the grant of real right of use, previously provided for in Law 8,666/93. This means the new statute provides for the highest financial offer criterion (highest bid) only for real estate or unserviceable or legally seized movable property, and not for cases of grant of real right of use.

 

• Highest economic return (Art. 33, item VI)

As with other changes introduced by the new Procurement Law, highest economic return is not exactly a novelty in tenders. Law 12,462/11, which established the Differentiated Public Procurement Regime (RDC), as well as Law 13,303/16, which governs state-owned companies, already provided for this award criterion.

With the update of the procurement law, the highest economic return criterion becomes a general rule, since it was not provided for in the former Law 8,666/93.

Evaluation by the highest economic return criterion must be used exclusively for entering into efficiency contracts, in which the contractor undertakes to generate cost savings for the Administration, so that its remuneration will be conditioned on the efficient performance of such activity.

The procedure set forth in the new statute requires bidders to submit a work proposal covering the works, services or goods, with the respective deadlines for completion or supply, as well as the savings expected to be generated, expressed in a unit of measurement associated with the work, good or service and in monetary units (art. 39, §1, item I, “a” and “b”).

As for the commercial proposal, the rule is that it must correspond to a percentage of the savings expected to be generated over a given period, expressed in monetary units (art. 39, §1, item II).

The Public Administration undertakes to draft a notice setting out objective parameters for measuring the savings generated by performance of the contract, which will serve as the calculation basis for the remuneration owed to the contractor. For the purpose of evaluating the bid, the economic return will be the savings expected to be generated by performing the work proposal, minus the price proposal.

Thus, when evaluating bids, the Committee in charge of the tender must determine the highest economic return by deducting the price proposal from the savings the bidder expects to generate; and, in cases where the savings provided for in the efficiency contract are not achieved, the contractor’s remuneration will be reduced if its performance falls below the expectation set when the proposal was formalized.

This is a mechanism devised by the law to encourage the private contractor to perform the contract with a view to the public interest, through cost savings, insofar as its remuneration will be directly affected. The goal is for the private party to seek profitability in its business without departing from the public interest in that contract.

A point of attention is raised by item II of §4 of article 39 of Law 14,133/21, which provides that if the difference between the contracted savings and those actually achieved exceeds the maximum limit established in the contract, the contractor will also be subject to other applicable sanctions.

Clearly, in unforeseeable and unavoidable scenarios in which the contracted savings may not be achieved, the sanction must be assessed on a case-by-case basis, carefully examining the private contractor’s conduct and whether its work and price proposals reflected a feasible reality, affected by a situation that was difficult – or impossible – to foresee, such as a market crisis resulting from a pandemic, for example.

In the absence of such circumstances, the private contractor must be careful when preparing the work and price proposals in order to avoid sanctions.

Article originally published on the Consultor Jurídico portal (in Portuguese), on 02.29.2024.