IntroductionMany public challenges cross municipal boundaries. Several cities may send their waste to the same landfill, a regional hospital serves residents across an entire area, and a municipality of 8,000 people may struggle on its own to buy ambulances, hire specialists or attract a company to bid for a concession. A public consortium is the legal mechanism that allows Brazil's federal entities—the federal government, states, Federal District and municipalities—to work together on tasks they would struggle to carry out alone.The legal basis is Law 11.107 of April 6, 2005, implemented by Decree 6.017/2007. It has been amended several times since the original lessons were written, notably by Laws 13.822/2019 (employment rules), 14.026/2020 (the sanitation framework) and 14.662/2023 (amendment and dissolution of consortia). It also operates alongside Law 14.133/2021, which replaced Law 8.666. This lesson covers how a consortium is formed, funded and able to make purchases, and why it is so useful for making public-private partnerships possible.What it is and what it doesA public consortium is a legal entity formed exclusively by federal entities to cooperate across levels of government and pursue shared goals. Its members set those goals themselves, subject to constitutional limits (Art. 2). Common examples in Brazil include intermunicipal consortia for healthcare, solid waste, infrastructure (such as equipment for local roads), purchasing and regional development.To pursue its goals, a consortium may (Art. 2, § 1):enter into agreements, contracts and other arrangements of any kind, and receive assistance, contributions and social or economic subsidies from other entities and government bodies;carry out expropriations and establish easements pursuant to a public authority's declaration of public utility, public necessity or social interest;be hired by the direct or indirect administration of its member entities without a competitive bidding process.It may also issue bills and collect fees and other public charges for its services. If authorized by its founding agreement, it may award concessions, permits or authorizations for public works or services (Art. 2, §§ 2 and 3).One rule applies to the federal government: it may join a consortium only if every state containing a member municipality also belongs to it (Art. 1, § 2). It cannot, therefore, form a consortium with municipalities in a state unless that state also joins.Do not confuse it with a consortium of companiesIn public procurement, "consortium" can also mean a group of companies joining forces to bid on a large contract. That is a different arrangement, governed by Art. 15 of Law 14.133. The companies commit to forming the consortium, designate a lead company, pool their technical qualifications and financial capacity, and assume joint and several liability for the contract. To account for that pooling, the tender notice must impose financial qualification requirements 10% to 30% higher than those for an individual bidder, unless an exception is justified. The increase does not apply to consortia made up solely of micro and small businesses (Art. 15, §§ 1 and 2). The public consortium discussed in this lesson is formed by federal entities, not companies.Three construction companies pool their technical qualifications to bid on a bridge contract. Two neighboring municipalities create an entity to manage a landfill together. How are these arrangements classified?Answer: The first is a consortium of companies (Art. 15 of Law 14.133), and the second is a public consortium (Law 11.107) — a public consortium must be formed exclusively by federal entities. Companies that join forces to bid form a consortium of companies, subject to separate qualification rules and joint and several liability.How a consortium is formedStages in the creation and operation of a public consortium.Protocol of intentA consortium is established by an agreement, which can be signed only after the members have signed a protocol of intent (Art. 3). This sets out the ground rules. Its required provisions (Art. 4) include:the consortium's name, purpose, duration and headquarters;the identity of its members and its area of operation, comprising their combined territories (the municipalities' territories when the members are municipalities alone or a state and municipalities within it; the states' territories when more than one state is involved; and so on), whether or not the federal government participates;whether the consortium will be a public association or a private-law legal entity with no economic purpose;the criteria under which the consortium may represent its members before other levels of government on matters of shared interest;the rules for convening and running the general assembly, the consortium's highest decision-making body, and each member's number of votes, with at least 1 vote guaranteed to each (Art. 4, § 2);how the legal representative is elected and how long that person serves; the representative must be the head of the executive branch of a member entity;the number of employees, how they are appointed and paid, and the circumstances allowing temporary hiring in cases of exceptional public interest;the conditions for entering into a management contract or partnership agreement;authorization for the joint management of public services, specifying the powers transferred, the services and area covered, authorization to hold tenders or award concessions, permits or authorizations, the terms of the program contract, and the criteria for calculating and adjusting fees;the right of any member that is up to date with its obligations to demand full compliance with the consortium agreement.Ratification by lawThe consortium agreement can be signed only after each member has ratified the protocol of intent by law (Art. 5). In other words, each municipality's council—or a state's legislative assembly—must approve it. If ratification occurs more than 2 years after the protocol was signed, that member's admission requires approval by the general assembly (Art. 5, § 3).Legal personalityA consortium acquires legal personality (Art. 6):under public law when it forms a public association, effective when the ratifying laws take effect. It then becomes part of the indirect administration of every member entity (Art. 6, § 1) and is considered a type of autonomous public agency (Art. 41, item IV, of the Civil Code);under private law when it meets the requirements of civil law, such as registering its bylaws as an association.In both cases, the consortium must follow public-law rules on procurement, contracting, accountability and hiring, while its employees are governed by the CLT (Art. 6, § 2). Under the previous wording: the CLT and public-law requirements expressly applied only to private-law consortia. Law 13.822/2019 extended them to both types.How a consortium is fundedCost-sharing agreementMember entities may provide funds to a consortium only through a cost-sharing agreement (Art. 8). A new agreement is drawn up for each financial year and cannot remain in force beyond the budget appropriations that fund it, unless it covers only projects included in the multi-year plan or the joint management of public services funded by fees (Art. 8, § 1). Key rules include:cost-sharing funds cannot be used for unspecified expenses, including transfers or credit operations (§ 2);members, individually or together, and the consortium itself may demand compliance with cost-sharing obligations (§ 3);the consortium must provide the information needed to consolidate spending from each member's contributions into that member's accounts, as required by the Fiscal Responsibility Law (Complementary Law 101/2000) (§ 4);a member that fails to include sufficient appropriations in its budget to cover its agreed contribution may be excluded from the consortium after first being suspended (§ 5).Entering into a cost-sharing agreement without sufficient budget appropriations, or without observing the required legal formalities, constitutes administrative misconduct (Art. 10, item XV, of Law 8.429/1992, added by Law 11.107 itself).A municipality passed the ratifying law and signed the consortium agreement but did not budget for the contribution it agreed to make under the cost-sharing agreement that year. What does Law 11.107 provide?Answer: The municipality may be excluded from the consortium after first being suspended — as provided in Art. 8, § 5. Exclusion is not automatic: suspension must come first. Nor are contributions voluntary once the agreement is signed: the other members and the consortium may demand payment.Program contractWhen one federal entity assumes obligations to another entity or to a consortium under a joint management arrangement involving public services or the transfer of duties, services, personnel or assets, those obligations must be governed by a program contract for the arrangement to be valid (Art. 13). The contract must:comply with legislation on public-service concessions and permits, particularly the rules on calculating fees and regulating services;provide procedures that ensure transparent financial management of each service in relation to each entity responsible for it.If essential duties, services, personnel or assets are transferred, the contract must, or it will be void, specify the duties transferred and the transferring entity's secondary liability; penalties for noncompliance; when the transfer takes effect and the obligations to maintain service continuity; who is responsible for liabilities associated with transferred personnel; which assets are transferred; and how assets that may revert to the original owner will be identified and valued. A clause giving the contractor responsibility for planning, regulating and overseeing the services it provides is void. The program contract remains in force even if the consortium or cooperation agreement that authorized it is dissolved or terminated.A program contract may be signed without a competitive bidding process (Art. 75, item XI, of Law 14.133). Under the previous law: the same exemption appeared in Art. 24, item XXVI, of Law 8.666.There is an important exception: since the sanitation legal framework (Law 14.026/2020), new program contracts for basic sanitation services have been prohibited. Those services now require a concession awarded through competitive bidding, under Art. 175 of the Constitution (Art. 13, § 8, of Law 11.107). Older materials often cite sanitation as a classic use of program contracts; that no longer applies to new contracts.Withdrawal, amendment and dissolutionA member may withdraw through a formal act by its representative at the general assembly (Art. 11). Amending or dissolving the consortium agreement requires an instrument approved by the general assembly and ratified by law by the members, under the rules established by Law 14.662/2023 (Arts. 12 and 12-A). Withdrawal or dissolution does not affect obligations already incurred, including program contracts.Consortia and public procurementA consortium is itself a major purchaser, and Law 14.133 gives it certain advantages:Double the thresholds for direct awards. For purchases, construction work and services contracted by a public consortium, the value thresholds for awarding a contract without competitive bidding are doubled (Art. 75, § 2). Under the amounts set by Decree 12.807/2025, the 2026 thresholds are R$ 261.968,40 for construction work, engineering services and vehicle maintenance, and R$ 130.984,22 for purchases and other services.Centralized purchasing. The law requires government entities to establish purchasing centers for large-scale procurement. Municipalities with up to 10.000 residents should preferably do so through public consortia (Art. 181).Shared price registration. A consortium can administer a price registration agreement in which its member municipalities participate (lesson 19), combining their demand.Under the previous rules: Law 11.107 amended Law 8.666 to double the thresholds for procurement procedures—and therefore for direct awards—for consortia formed by up to 3 government entities, and triple them for those formed by more than 3 (Art. 23, § 8). Law 14.133 simplified the rule: the double threshold applies to every public consortium, regardless of how many entities it has.A public consortium formed by 5 municipalities plans to buy medicines in 2026 without competitive bidding, relying on the value threshold for direct awards. What is the threshold?Answer: R$ 130.984,22, double the threshold for purchases, regardless of the number of municipalities — 2 × 65.492,11 = 130.984,22 (Art. 75, § 2, of Law 14.133, together with Decree 12.807/2025). The triple threshold for consortia with more than 3 members was a rule under Law 8.666 that no longer applies; R$ 261.968,40 is the doubled threshold for construction work and engineering, not purchases.Public consortia and PPPsConsortia can range from simple, one-off arrangements resembling contracts for a specific purpose to permanent institutions: joint ventures among government entities with their own legal personality that form part of the indirect administration of every member (Art. 6, § 1). They can be empowered to enter into contracts and receive financial assistance and subsidies (Art. 2, § 1). If provided for in the protocol of intentions and the laws ratifying it, they can also exercise their members’ powers in the joint management of public services.Consortia can provide public services directly and, in that capacity, be contracted by their members without competitive bidding. More often, though, the consortium acts as the contracting authority on its members’ behalf: it can award service provision to private parties through a concession, permit or authorization (Art. 4, item XI, subitem c). A public consortium can therefore represent the government in a public-private partnership, which is a type of concession (lesson 19).This arrangement offers two advantages:Scale. A municipality on its own may not generate enough demand to attract investors to a solid-waste collection and disposal project. Together with its neighbors, it may be able to make the project viable.PPP Law thresholds. Law 11.079 prohibits PPPs worth less than R$ 10 milhões (Art. 2, § 4, item I; Law 13.529/2017 reduced the threshold from R$ 20 milhões). It also cuts off federal guarantees and voluntary transfers to states, the Federal District and municipalities whose PPP spending exceeds 5% of net current revenue (Art. 28). For a small municipality, a contract of its own may fall short of the minimum value or place too great a burden on its revenue. By joining other municipalities, a state or the federal government in a consortium, it can build a project of sufficient scale and share the cost among the members.Four neighboring municipalities each need a waste-treatment service that would cost R$ 4 milhões over the life of the contract if contracted separately. How could a public consortium make a PPP viable?Answer: Because the combined contracts total R$ 16 milhões, above the R$ 10 milhões minimum, and the project gains scale — 4 × 4 = 16 milhões. Separately, none of the municipalities reaches the minimum under Art. 2, § 4, I. The consortium remains subject to Law 11.079 and must put the PPP out to tender through an open competition or competitive dialogue.ReferencesBRAZIL. Law No. 11.107 of April 6, 2005. General rules for contracting through public consortia.BRAZIL. Decree No. 6.017 of January 17, 2007. Implements Law 11.107.BRAZIL. Law No. 14.133 of April 1, 2021, Arts. 15, 75 and 181.BRAZIL. Law No. 11.079 of December 30, 2004. Public-private partnerships.BRAZIL. Law No. 14.026 of July 15, 2020. Basic sanitation legal framework.ExercisesEasy1) What is a public consortium? Give examples of consortia that exist or could exist in your region.2) What are the advantages of a public consortium for small municipalities? Consider purchasing, hiring specialized staff and providing public services.3) Explain the difference between a consortium agreement, a cost-sharing agreement and a program agreement.4) Why is the Public Consortia Law useful for PPPs?5) Why can a new program agreement no longer be used for basic sanitation services?6) A tender notice requires an individual bidder to demonstrate minimum net assets of R$ 2.000.000. Three companies that are neither microenterprises nor small businesses form a business consortium to bid. What range applies to the consortium’s minimum net assets if the notice gives no justification for a different rule?Difficult7) In 2026, an intermunicipal healthcare consortium bought medicines through direct awards based on value: R$ 70.000 in March and R$ 45.000 in July.a) What is the consortium’s direct-award threshold for purchases?b) Are both purchases lawful? How much more can it spend on medicines on this basis during the year?c) The consortium wants to renovate its headquarters for R$ 240.000. Does that fall within the direct-award threshold?d) If each municipality bought these medicines on its own, what threshold would apply to each?8) Four municipalities form a consortium with an annual budget of R$ 2.400.000, divided under the cost-sharing agreement in proportion to population: A has 40.000 residents, B has 25.000, C has 10.000 and D has 5.000.a) How much does each municipality contribute for the year? What is the amount per resident?b) Municipality D did not include an appropriation for its contribution in its budget. What does Law 11.107 allow the consortium to do?c) If D is excluded and the consortium’s budget remains the same, how much does each of the other three municipalities contribute?d) Can the consortium use part of the shared funds for an unspecified expense, such as a transfer to an association with no defined project?9) Five municipalities are considering a waste-treatment PPP with annual payments of R$ 9 milhões for 25 years. Their annual net current revenue (RCL) is A: R$ 120 milhões, B: R$ 60 milhões, C: R$ 45 milhões, D: R$ 30 milhões and E: R$ 25 milhões.a) Does the contract meet the minimum value and term requirements under Law 11.079?b) If municipality D entered into a PPP on its own with annual payments of R$ 2,5 milhões, what share of its RCL would be committed? What would happen?c) Through the consortium, the R$ 9 milhões annual payment is shared in proportion to RCL. How much does each municipality pay, and what percentage of its RCL does each commit, assuming each counts its share toward the limit in Art. 28?10) For each situation, identify the instrument or action under Law 11.107:a) the mayors agree on the consortium’s name, headquarters, duration and the number of votes each municipality has in the assembly;b) the Municipal Council approves what the mayors agreed;c) the municipality commits to contributing R$ 300 mil to the consortium this year;d) the municipality transfers management of school transportation, along with vehicles and drivers, to the consortium;e) in 2026, the municipalities want to delegate water supply and sewage services to a provider;f) a municipality ratifies the protocol of intentions by law 2 years and 3 months after signing it.11) The federal government wants to form a public consortium with three municipalities in Minas Gerais and two in São Paulo for a regional development project. The protocol of intentions allocates votes in the assembly in proportion to population, rounded down, leaving one of the municipalities in Minas Gerais with zero votes.a) Who else must join the consortium for the federal government to participate?b) Is the voting rule valid?c) What type of legal personality makes the consortium part of the indirect administration of all its members, and when does that take effect?Answers1) It is a legal entity formed exclusively by entities of the Federation to cooperate in pursuing objectives of common interest (Art. 2 of Law 11.107). Examples include an intermunicipal healthcare consortium (regional hospital, specialists), a solid-waste consortium (shared landfill), a pool of equipment for local roads and a joint purchasing consortium.2) Greater purchasing scale (and double the direct-award thresholds); sharing the cost of professionals and equipment that one municipality could not support alone; providing regional services (a landfill or hospital); and making concessions and PPPs viable where a municipality acting alone would fall short of the minimum value or put too much strain on its revenue.3) The consortium agreement establishes the consortium after the protocol of intentions has been ratified by law. The cost-sharing agreement is the only means by which members can transfer funds to the consortium and is concluded each fiscal year. The program agreement governs obligations one member undertakes toward another or toward the consortium in the joint management of public services or the transfer of responsibilities, personnel or assets.4) A consortium can represent its members and award concessions, including PPPs, by combining demand. This allows a project to reach the R$ 10 milhões minimum, achieve the scale needed to attract investors and spread costs, helping members stay within the 5% of RCL limit.5) The sanitation framework (Law 14.026/2020) added a prohibition on new program agreements for basic sanitation to Law 11.107 (Art. 13, § 8). These services now require a concession awarded after competitive bidding (Art. 175 of the Constitution).6) The business consortium must meet a minimum net-assets requirement 10% to 30% higher than that for an individual bidder (Art. 15, § 1, of Law 14.133): 2.000.000 × 1,10 = R$ 2.200.000 and 2.000.000 × 1,30 = R$ 2.600.000.7) a) Double the threshold for purchases (Art. 75, § 2, of Law 14.133): 2 × 65.492,11 = R$ 130.984,22.b) Total for the fiscal year: 70.000 + 45.000 = R$ 115.000, below 130.984,22, so both purchases are lawful. The consortium can spend another 130.984,22 − 115.000 = R$ 15.984,22.c) Renovation is construction work; the doubled threshold for construction work and engineering is 2 × 130.984,20 = R$ 261.968,40. Since 240.000 is less, it qualifies (provided other work of the same kind during the year does not push the total over the threshold).d) R$ 65.492,11, the standard threshold. The March purchase (70.000) alone would exceed it.8) a) Total population: 40.000 + 25.000 + 10.000 + 5.000 = 80.000. Amount per resident: 2.400.000 ÷ 80.000 = R$ 30. A: 40.000 × 30 = R$ 1.200.000; B: 25.000 × 30 = R$ 750.000; C: 10.000 × 30 = R$ 300.000; D: 5.000 × 30 = R$ 150.000.b) Suspend the municipality and then exclude it from the consortium (Art. 8, § 5). The other members and the consortium can also demand that it fulfill its obligation (§ 3).c) New population: 75.000; per resident: 2.400.000 ÷ 75.000 = R$ 32. A: R$ 1.280.000; B: R$ 800.000; C: R$ 320.000.d) No. Cost-sharing funds cannot be used for unspecified expenses, including transfers (Art. 8, § 2).9) a) Contract value: 9 × 25 = R$ 225 million, above the R$ 10 million minimum; a 25-year term, above the 5-year minimum and within the permitted range of 5 to 35 years (Arts. 2, § 4, and 5, I, of Law 11.079). Meets the requirements.b) 2,5 ÷ 30 = 8,33% of RCL, above 5%: D would no longer receive guarantees and voluntary transfers from the Union (Art. 28).c) Total RCL: 120 + 60 + 45 + 30 + 25 = R$ 280 million. Each municipality's share = 9 × the municipality's RCL ÷ 280: A, R$ 3,857 million; B, R$ 1,929 million; C, R$ 1,446 million; D, R$ 0,964 million; E, R$ 0,804 million. Because the allocation is proportional to RCL, each municipality commits the same percentage: 9 ÷ 280 = 3,21%, below 5%.10) a) Protocol of intentions (Art. 4).b) Ratification law (Art. 5).c) Cost-sharing agreement (Art. 8).d) Program contract (Art. 13), which must include clauses on obligations, personnel and transferred assets.e) It cannot be a program contract (Art. 13, § 8): the service must be awarded through a competitive bidding process.f) Because more than 2 years have passed, admission requires approval by the general assembly (Art. 5, § 3).11) a) The states of Minas Gerais and São Paulo: the Union may participate in a consortium only if it includes every state in which the member municipalities are located (Art. 1, § 2).b) No: the protocol may assign different numbers of votes, but it must guarantee each member at least 1 vote (Art. 4, § 2).c) As a public-law association, from the date the laws ratifying the protocol of intentions take effect (Art. 6, I, and § 1).
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