Rousseff promises to reform Brazil's public bidding model

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Tuesday, October 7, 2014

Brazil's President Dilma Rousseff has promised to reform public bidding laws to make national tender models more flexible if she is elected for a second term.

The objective is to reduce the length of bidding processes and cut costs, as well as strengthen contract guarantees, local paper Folha de S.Paulo reported.

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The president will be facing pro-business senator Aécio Neves in a runoff on October 26.

CURRENT TENDER MODEL

Brazil carries out public bidding through its differentiated contracting system (RDC) adopted under the current federal government. Originally meant to speed up work for 2014 World Cup projects, RDC bidding has been extended to projects under the country's growth acceleration plan, PAC.

Under the model, tender budgets are not disclosed and contracts are signed in one step, hiring the same contractor to carry out basic plans as well as civil works.

Although this speeds up tender processes and reduces the chance of cartel forming, critics have said that the model results in bad basic planning as that responsibility falls on the winning contractor as opposed to the government.

A new model is being prepared and will only be announced after the election, the report said.