Public procurement: Principles and bidding methods

•0•0Comment iconComment iconComment iconComment icon

What competitive bidding is for, the principles that govern it, who runs it, the five bidding methods under Law 14.133, and the stages of the process, including what has changed since Law 8.666.

Writer image

翻訳者Editorial

Writer image

改訂者Editorial

記事を編集する

Introduction

So far, we have looked at purchasing in the private sector: buyers choose their suppliers, negotiate as they see fit and answer to the owner for the results. Public procurement works differently. Because taxpayers’ money is at stake, the Federal Constitution requires public works, services, purchases and asset disposals to be contracted through public procurement that gives all bidders equal standing (art. 37, inciso XXI, of the Federal Constitution). The federal government is responsible for setting the general procurement and contracting rules that apply to all levels of government (art. 22, inciso XXVII).

This lesson covers the purpose of public procurement, its governing principles, who runs it, the available procedures and how the process unfolds, phase by phase. The next lessons continue the subject: direct contracting, bidder qualification and contracts (lesson 18); price registration, pregão and public-private partnerships (lesson 19); and public consortia (lesson 20).

The law changed: from 8.666 to 14.133

Many exam-preparation materials and study guides still discuss Law 8.666/1993, Law 10.520/2002 (pregão) and the RDC (Law 12.462/2011). All three were superseded by Law 14.133/2021, the New Public Procurement and Contracts Law. It was published on April 1, 2021, and coexisted with the previous laws during a transition period: a public body could choose which law to apply, provided it stated its choice in the tender notice. That option ended on December 30, 2023, when Law 8.666, Law 10.520 and arts. 1º to 47-A of the RDC Law were repealed (art. 193, with the date set by Complementary Law 198/2023).

Two practical points:

  • A contract signed under a previous law remains governed by that law until it expires (arts. 190 and 191). That is why you will still see Law 8.666 cited in contracts that remain in force.
  • Municipalities with up to 20,000 residents were given 6 years from the law’s publication to meet certain requirements, including electronic procurement and the rules governing procurement officers (art. 176). That deadline falls in April 2027.

The purpose of public procurement

Under the previous law, public procurement had two aims: ensuring equal treatment and selecting the most advantageous bid. Law 14.133 retained both and added others. Under art. 11, the procurement process has four objectives:

  1. select the bid that delivers the most advantageous contracting outcome for the public administration, taking the asset’s life cycle into account (not just its purchase price, but also the cost of maintaining, operating and disposing of it);
  2. ensure equal treatment of bidders and fair competition;
  3. prevent contracts at inflated prices or prices that are clearly too low to be viable, and prevent overbilling during contract performance;
  4. encourage innovation and sustainable national development.

The first objective connects directly to what we saw in inventory costs and private-sector purchasing: the lowest sticker price is not always the lowest total cost. Over five years, a cheap printer with expensive cartridges may cost more than a pricier printer with inexpensive cartridges.

A public body plans to buy 100 printers. Brand A costs R$ 900 and uses R$ 400 a year in supplies; brand B costs R$ 1.300 and uses R$ 250 a year. Assuming a useful life of 4 years and applying the objective in art. 11 of Law 14.133, which is the more advantageous bid per printer?

Loading icon

Answer: Brand B, because its life-cycle cost is R$ 2.300, compared with R$ 2.500 for brand A — A: 900 + 4 × 400 = 2.500; B: 1.300 + 4 × 250 = 2.300. The law requires consideration of the asset’s life cycle, provided the tender notice sets out this criterion objectively; focusing only on the sticker price is the trap.

Principles of public procurement

Art. 5º of Law 14.133 lists the principles governing all public procurement and contracting: legality, impartiality, morality, openness, efficiency, the public interest, administrative integrity, equality, planning, transparency, effectiveness, separation of duties, reasoned decision-making, adherence to the tender notice, objective evaluation, legal certainty, reasonableness, competitiveness, proportionality, speed, economy and sustainable national development. The rules of the Law of Introduction to Brazilian Law (LINDB) also apply.

It is a long list, but these are the principles that come up most often in practice (and in exams):

  • Legality: a public official may act only as the law permits and in the manner it prescribes, without personal interference from those in authority.
  • Impartiality: the public interest takes precedence over personal interests; all interested parties receive the same treatment, whether a company is small, medium-sized or large.
  • Morality and integrity: conduct must be honest as well as lawful. The state is funded by citizens who pay taxes in return for services.
  • Equality: a public official cannot include terms that restrict or undermine competition and end up favoring certain participants, even unintentionally.
  • Openness and transparency: every phase is public. Today, there is a dedicated place for that information: the National Public Procurement Portal (PNCP), where tender notices, official records and contracts from across the country must be published (art. 174).
  • Adherence to the tender notice: the public administration and bidders must follow the notice at every stage, from documentation and bids to evaluation and the contract. Requirements or factors not included in the notice cannot be imposed or considered.
  • Objective evaluation: bids are assessed against the criteria in the tender notice, not the preferences of the people assessing them.
  • Planning: a principle explicitly included in the 2021 law. Rushed purchases without planning are behind most problems: poorly drafted specifications, manufactured emergencies and unfavorable prices.
  • Separation of duties: the same person should not simultaneously perform functions intended to check one another (for example, requesting a purchase, running the procurement process and overseeing the contract). This reduces the risk of errors going undetected and of fraud (art. 7º, § 1º).

Under the previous law: art. 3º of Law 8.666 contained a shorter list (legality, impartiality, morality, equality, openness, integrity, adherence to the tender notice and objective evaluation). The new law retained them all and added planning, transparency, separation of duties, efficiency and economy, among others.

At a municipal government, the same employee writes the product specification, runs the procurement process and then certifies receipt of the goods. Which principle of Law 14.133 does this most directly violate?

Loading icon

Answer: Separation of duties — specifying what is needed, running the procurement process and overseeing delivery should be assigned to different people, because each function checks the others. The process may well be open to the public; the problem is that one person holds all three roles.

Who runs the procurement process

Under the previous law: Law 8.666 required bids to be evaluated by a Permanent Procurement Committee (CPL) or Special Procurement Committee (CEL), with at least three members, two of them permanent civil servants, serving terms of up to one year. Pregão had its own auction officer and support team.

Under Law 14.133, the standard arrangement is a procurement officer: a person appointed by the competent authority from among permanent civil servants or public employees on the permanent staff. The officer makes decisions, oversees the proceedings and moves the process forward until final approval (art. 8º). A support team assists the officer, who is individually accountable for their actions unless the team led them into error. In a pregão, the procurement officer is called a pregoeiro (art. 8º, § 5º).

For a specialized good or service (one too complex to describe using standard market specifications), the officer may be replaced by a procurement committee of at least three members. Committee members are jointly liable for its decisions unless they record a reasoned dissent in the minutes (art. 8º, § 2º). At the federal level, Decree 11.246/2022 sets the rules for procurement officers, support teams, committees and contract inspectors.

People running the procurement process are also subject to conflict-of-interest restrictions. They cannot be the spouse or a relative, up to the third degree, of a regular bidder, or have technical, commercial, economic, financial or employment ties with one (art. 7º, inciso III). Nor may they participate, directly or indirectly, in the bidding process or contract performance (art. 9º, § 1º).

Procurement procedures

This is the change most likely to confuse anyone who studied under the previous law. Law 8.666 provided for five procedures (concorrência, tomada de preços, convite, concurso and leilão), and Law 10.520 added pregão. Under the previous system, the choice among concorrência, tomada de preços and convite depended chiefly on the contract’s estimated value.

Law 14.133 provides for five procedures (art. 28): pregão, concorrência, concurso, leilão and diálogo competitivo. Tomada de preços and convite no longer exist. The basis for choosing a procedure has changed, too: it now depends on the nature of what is being procured, not its value. Creating other procedures or combining existing ones is prohibited (art. 28, § 2º).

Law 8.666/1993 and Law 10.520/2002Law 14.133/2021
Concorrência (high-value contracts, real estate, international tenders)Concorrência (specialized goods and services, public works and engineering services)
Tomada de preços (mid-value contracts, registered suppliers)Abolished
Convite (low-value contracts, at least 3 invitees)Abolished (small purchases may instead qualify for a value-based exemption from competitive bidding; see lesson 18)
Pregão (Law 10.520, standard goods and services)Pregão, now part of the general law and mandatory for standard goods and services
ConcursoConcurso
LeilãoLeilão
Did not existDiálogo competitivo

Pregão

This procedure is mandatory when purchasing standard goods and services whose performance and quality standards can be defined objectively in the tender notice using customary market specifications (art. 6º, incisos XIII and XLI). Paper, fuel, standard-configuration computers, cleaning and security services are typical examples. Bids are evaluated on the basis of the lowest price or the largest discount.

Pregão cannot be used for specialized technical services that are predominantly intellectual in nature, or for public works and engineering services, with one exception: standard engineering services (art. 29, sole paragraph). Lesson 19 covers pregão in detail.

Concorrência

This procedure is used to procure specialized goods and services and both standard and specialized public works and engineering services (art. 6º, inciso XXXVIII). Bids may be evaluated by lowest price, best technical merit or artistic content, a combination of technical merit and price, highest economic return, or largest discount. Pregão and concorrência follow the same process: the standard procedure in art. 17, covered next. Alongside diálogo competitivo, concorrência is also used for public-private partnerships and concessions.

Concurso

This specialized procedure is used to select technical, scientific or artistic work, with a prize or payment for the winner (art. 6º, inciso XXXIX, and art. 30). Examples include an architectural design for a public square, a program logo or a paper on the municipality’s history. The tender notice sets out participants’ required qualifications, the guidelines and submission format for the work, the conditions of the competition and the prize. When the work is a design, the winner transfers its economic rights to the public administration.

Under the previous law: the concurso notice had to be published 45 calendar days in advance. The minimum is now 35 working days, the same period that applies when bids are evaluated on technical merit or artistic content (art. 55, inciso IV).

Leilão

This procedure is used for the disposal (sale) of real estate or of movable assets that are no longer needed or have been legally seized. They go to the highest bidder (art. 6º, inciso XL, and art. 31). A leilão may be run by an official auctioneer or an appointed public employee. There is no advance supplier registration or bidder-qualification phase: final approval follows the bids, appeals and payment (art. 31, § 4º). At the federal level, electronic leilão is regulated by Decree 11.461/2023.

Under the previous law: Law 8.666 generally required real estate to be sold through concorrência, reserving leilão for movable assets and real estate acquired through legal proceedings or in settlement of a debt. Under the new law, leilão is the general procedure for asset disposals.

Competitive dialogue

Competitive dialogue is a new procurement method under the law, inspired by European law. It is used to procure works, services and goods when the government knows what problem it needs to solve but does not know the best solution: procurements involving technological or technical innovation, needs that cannot be met without adapting solutions available on the market, or requirements whose technical specifications cannot be defined precisely (art. 32).

The process has two stages. First, the government publishes a tender notice setting out its needs and gives interested parties at least 25 business days to express interest. It then holds discussions with preselected participants until it identifies a solution. Next comes the competitive stage, with at least 60 business days allowed for final proposals. A committee of at least three permanent civil servants or public employees conducts the dialogue. At the federal level, the method is regulated by Instrução Normativa SEGES/MGI 512/2025.

A municipality plans to buy 2.000 school chairs of a standard design, at an estimated cost of R$ 600 mil. Under Lei 14.133, which procurement method should it use?

Loading icon

Answer: Pregão, because a standard chair is a common good, regardless of value — under the new law, the procurement method depends on the nature of what is being purchased, not its value. Tomada de preços and convite no longer exist; choosing a method by value bracket reflects the approach under Lei 8.666.

A state wants to procure a solution to reduce waiting lists for elective surgery, but does not know whether the best approach is scheduling software, a reorganization of the healthcare network or a combination of solutions that no company offers off the shelf. Which procurement method was created for this situation?

Loading icon

Answer: Diálogo competitivo — it is designed for cases in which the government knows what it needs but cannot define the solution without consulting the market. A concurso selects a completed technical or artistic work for a prize; it is not a way to develop a solution with bidders.

How the procurement process works

The stages

Art. 17 sets out the sequence of the procurement process. It applies to pregão and concorrência:

The seven stages of the procurement process under Lei 14.133. As a rule, bids are evaluated before bidders' qualifications are checked.
The seven stages of the procurement process under Lei 14.133. As a rule, bids are evaluated before bidders' qualifications are checked.
  1. Preparation: the planning stage. It begins with a document formally stating the need and includes a preliminary technical study (ETP), a terms of reference or project plan, price research, a risk assessment, and draft tender and contract documents (art. 18). It ends with a legal opinion (art. 53).
  2. Publication of the tender notice: the full notice is posted on the PNCP, while a summary is published in the relevant government's official gazette and a widely circulated daily newspaper (art. 54).
  3. Submission of proposals and bids: bidding may be open (public, successive bids), closed (confidential proposals until opening), or a combination of the two (art. 56).
  4. Evaluation: proposals are assessed under the criteria in art. 33 (lowest price, largest discount, best technical merit or artistic content, technical merit and price, highest bid, and greatest economic return). After evaluating them, the government may negotiate better terms with the top-ranked bidder (art. 61).
  5. Qualification: verification of the winning bidder's documents (lesson 18).
  6. Appeals: a single stage, with 3 business days to appeal (art. 165).
  7. Final approval: the senior authority reviews the process and awards the contract to the winner. The authority may also send the process back for correction, cancel the tender because of a subsequent development, or annul it for illegality (art. 71).

How it worked before: under Lei 8.666, qualification came before proposals were evaluated. Officials opened every bidder's qualification documents, allowed time for appeals on that issue alone, and only then opened the price envelopes. Pregão was the sole exception. Lei 14.133 made the pregão sequence the rule: proposals are evaluated first, and only the winner's documents are examined. The old sequence may still be used if the decision is justified and provided for in the tender notice (art. 17, § 1º).

Procurement must preferably be conducted electronically. An in-person process must be justified, and the public session must be documented in minutes and recorded in audio and video (art. 17, § 2º). Federal electronic tenders take place on Compras.gov.br (formerly Comprasnet).

Minimum time allowed for proposals

The law sets minimum periods, in business days, between publication of the tender notice and the proposal deadline (art. 55):

What is being procured and evaluation criterionMinimum period
Goods, evaluated by lowest price or largest discount8 business days
Goods, evaluated under other criteria15 business days
Common services and common engineering works and services, evaluated by lowest price or largest discount10 business days
Specialized services and specialized engineering works and services, evaluated by lowest price or largest discount25 business days
Integrated contracting60 business days
Semi-integrated contracting and other cases involving services and works35 business days
Highest bid (auction)15 business days
Technical merit and price, or best technical merit or artistic content35 business days

Under Lei 14.133, what is the usual order for evaluating proposals and checking bidders' qualifications, and whose qualification documents are examined?

Loading icon

Answer: Proposals are evaluated before qualifications are checked, and only the top-ranked bidder's documents are examined — the reversal of stages began with pregão and became the general rule. Checking every bidder's qualifications before evaluating proposals was the procedure under Lei 8.666. It remains possible only as a justified exception specified in the tender notice.

Other ways to make purchases

In addition to the five procurement methods, the law provides for five supporting procedures (art. 78): supplier accreditation, prequalification, a procedure for expressions of interest, a price registration system (lesson 19), and supplier registration (lesson 18). It also allows direct contracting, either through an exemption from competitive bidding or where competition is not feasible, as covered in lesson 18.

For small, urgent expenses, there is suprimento de fundos: an advance given to a public employee for expenses that cannot wait for the normal process, followed by an accounting of the spending (at the federal level, arts. 45 to 47 of Decreto 93.872/1986). The preferred means of paying these expenses and purchases exempted from bidding because of their value is the Cartão de Pagamento do Governo Federal (art. 75, § 4º, of Lei 14.133, and Instrução Normativa SEGES/MGI 11/2023), which records each expense and makes it available for review.

In November 2025, Lei 15.266/2025 amended Lei 14.133 and created Sicx (Sistema de Compras Expressas), an accreditation-based system that lets government bodies buy standardized common goods and services through an e-commerce platform resembling an online store. Its operation depends on federal executive regulations, so check the status of those regulations before treating Sicx as an established procedure.

References

  • BRASIL. Lei nº 14.133, of 1º April 2021. Public Procurement and Administrative Contracts Law.
  • BRASIL. Constitution of the Federative Republic of Brazil of 1988, arts. 22, XXVII, and 37, XXI.
  • BRASIL. Decreto nº 11.246, of 27 October 2022 (procurement officers, committees and contract inspectors at the federal level).
  • BRASIL. Decreto nº 11.461, of 31 March 2023 (electronic auctions at the federal level).
  • MINISTÉRIO DA GESTÃO E DA INOVAÇÃO EM SERVIÇOS PÚBLICOS. Federal Government Procurement Portal and list of regulations implementing Lei 14.133.
  • ENAP. Procurement in Public Administration. Course material by professor Antonieta, Escola Nacional de Administração Pública, 2005 (the basis for the original lessons, written under Lei 8.666).

Exercises

Easy

1) Explain the pregão procurement method, giving examples. When is it mandatory, and when can it not be used?

2) Explain the concorrência procurement method, giving examples. How does it differ from pregão if both follow the same procedure?

3) When is competitive dialogue more appropriate than concorrência?

4) Under Lei 14.133, which method is used to:
a) sell a municipality's vehicles that are no longer needed;
b) select an architectural design for a public square, with a prize for the winner;
c) buy reams of A4 paper?

5) Put the stages of the procurement process in art. 17 of Lei 14.133 in order: qualification; evaluation; preparation; final approval; publication of the tender notice; appeals; submission of proposals and bids.

Hard

6) Lei 8.666 provided for convite and tomada de preços. Why did these methods cease to make sense under Lei 14.133? How are low-value purchases handled today?

7) Explain at least three procurement principles and, for each, give an example of a situation that violates it.

8) A government body plans to buy 10 vehicles, each to be used for 5 years and driven 20.000 km per year, with fuel costing R$ 6,00 per liter. Model A costs R$ 110.000, travels 12 km per liter, costs R$ 3.000 per year to maintain and is expected to sell for R$ 40.000 at the end. Model B costs R$ 125.000, travels 16 km per liter, costs R$ 2.500 per year to maintain and is expected to sell for R$ 50.000. Ignoring interest, calculate each model's life-cycle cost and identify the better-value proposal. What condition must the tender notice meet for this criterion to be used?

9) In 2026, a municipality in a city of 100 mil inhabitants held a tender to buy 500 standard-configuration computers. Identify what is wrong with each of the following and state the correct rule under Lei 14.133:
a) the method chosen was tomada de preços because of the contract value;
b) the procurement officer is the brother-in-law of the owner of a company that frequently bids on the municipality's contracts;
c) every bidder's qualification documents were examined before proposals were opened, without justification in the tender notice;
d) the tender notice was published only in the municipality's official gazette;
e) bidders had 5 business days between publication of the tender notice and the proposal deadline.

10) For each transaction, state the procurement method and the minimum number of business days between publication of the tender notice and submission of proposals:
a) purchase of 300 standard chairs, evaluated by lowest price;
b) cleaning services for a public building, evaluated by lowest price;
c) construction of a school as a common engineering work, evaluated by lowest price;
d) detailed engineering design for a hospital, evaluated by technical merit and price;
e) sale of 20 vehicles no longer needed, evaluated by highest bid.

Answer key

1) Pregão is mandatory for buying common goods and services, whose performance and quality standards can be defined objectively in the tender notice using standard market specifications: paper, fuel, standard-configuration computers, cleaning and security services. Bids are evaluated by lowest price or largest discount. It cannot be used for specialized technical services that are predominantly intellectual in nature, or for engineering works and services other than common engineering services (art. 29, sole paragraph).

2) Concorrência is used for specialized goods and services and common and specialized engineering works and services (examples include building a bridge and developing a custom IT system). Both methods follow the same procedure (art. 17); the differences lie in what is being procured and the evaluation criteria. Pregão permits only lowest price or largest discount, while concorrência also permits best technical merit or artistic content, technical merit and price, and greatest economic return.

3) When the government knows what problem it needs to solve but not the best solution: procurements involving technological or technical innovation, needs that cannot be met without adapting market solutions, or requirements whose specifications cannot be defined precisely (art. 32). In a concorrência, the government must already be able to specify what it wants to buy.

4) a) Leilão (sale of movable property no longer needed, awarded to the highest bidder); b) concurso (technical, scientific or artistic work, with a prize); c) pregão (common good).

5) Preparation → publication of the tender notice → submission of proposals and bids → evaluation → qualification → appeals → final approval. As a rule, evaluation comes before qualification.

6) Under the old law, competitive bidding, price quotation and invitation procedures were chosen mainly according to the estimated value. Under Law 14.133, the procedure depends on the nature of the contract: common goods or services require a reverse auction, while specialized goods or services and construction work require competitive bidding, regardless of value. Without value-based tiers, the intermediate procedures no longer serve a purpose. Low-value purchases are now made through an exemption from competitive bidding based on value (art. 75), with thresholds updated annually by decree (see lesson 18).

7) Examples: legality (an official may do only what the law permits; violation: creating a procedure not provided for by law); impartiality and equal treatment (everyone must be treated equally; violation: requiring a specific brand without technical justification, thereby favoring one supplier); transparency (the stages are public and announced on the PNCP; violation: posting the solicitation notice only on a city hall bulletin board); adherence to the solicitation notice (the notice sets the rules; violation: disqualifying a bidder for failing to provide a document the notice did not require); segregation of duties (violation: having the same official specify the requirements, conduct the procurement and accept delivery of the goods).

8) Annual fuel cost: A = 20.000 ÷ 12 × 6,00 = R$ 10.000; B = 20.000 ÷ 16 × 6,00 = R$ 7.500.
Life-cycle cost per vehicle (purchase + 5 years of fuel + 5 years of maintenance − resale value):
A = 110.000 + 5 × 10.000 + 5 × 3.000 − 40.000 = 110.000 + 50.000 + 15.000 − 40.000 = R$ 135.000.
B = 125.000 + 5 × 7.500 + 5 × 2.500 − 50.000 = 125.000 + 37.500 + 12.500 − 50.000 = R$ 125.000.
Model B is the better-value bid, saving R$ 10.000 per vehicle, or R$ 100.000 across the 10 vehicles, despite costing R$ 15.000 more to purchase. To use this criterion, the solicitation notice must objectively specify which life-cycle costs will be considered and how they will be measured (art. 11, item I, and art. 34, § 1º, which permits indirect costs for maintenance, use, depreciation and other factors to be considered, provided they can be measured objectively).

9) a) The price quotation procedure no longer exists. A standard-configuration computer is a common good, so the required procedure is a reverse auction, regardless of value.
b) The procurement officer may not be related, including by marriage, within the third degree to regular bidders (art. 7º, item III). A brother-in-law is a relative by marriage in the second degree: the officer must be replaced for this procurement.
c) The rule is to evaluate bids first and review only the highest-ranked bidder’s documents. Reversing that order, with qualification review first, is permitted only through a reasoned decision and if provided for in the solicitation notice (art. 17, § 1º).
d) The solicitation notice must be published on the PNCP (art. 54 and art. 174), with a summary also published in the official gazette and a widely circulated newspaper. The city has more than 20 thousand residents, so it does not qualify for the transition period under art. 176.
e) For goods awarded on the basis of lowest price, the minimum period is 8 business days (art. 55); 5 days falls short of that minimum.

10) a) Reverse auction, 8 business days (goods, lowest price).
b) Reverse auction, 10 business days (common service, lowest price).
c) Competitive bidding (construction work cannot be procured through a reverse auction), 10 business days (common engineering work, lowest price).
d) Competitive bidding, 35 business days (technical merit and price).
e) Auction, 15 business days (highest bid).

この記事はいかがでしたか?

0%
ユーザー評価 (0)

この記事をシェアしよう!