European Gaming Lawyer magazine Spring 2014 | Page 35

All bidding procedures must be designed to select the most advantageous bid for the government and must be processed and decided strictly in accordance with the principles of legality, impartiality, morality, equality, publicity, absence of administrative corruption, compliance with the bid rules and objective judgment. Under the applicable law (Law No. 8,666/93 and Law 10,520/02), there are six types of bidding procedures: Competitive bidding (concorrência): • engineering projects and services valued in excess of BRL1.5 million; or • purchases of goods and services valued in excess of BRL650,000 Request for quotation (tomada de preços): • engineering projects and services valued up to BRL1.5 million; or • purchases of goods and services valued up to BRL650,000. Invitation to bid (convite): • engineering projects and services worth up to BRL150,000; or • purchases of goods and services worth up to BRL80,000. Bidding contest (concurso): • used when the public administration entity invites parties to submit technical, scientific, or artistic works. The winners receive prizes or remuneration. Auction (leilão): • used when the public entity decides to sell public goods, including assets that are no longer of any use to it, and seized goods. Live or electronic reverse auction (pregão): • used for purchases of ordinary goods and services, particularly those that are widely available on the market and whose performance and quality standards can be objectively defined in the bid notice. Due to the nature of the services to be hired by Caixa, the bidding procedure will probably be a competitive bidding (concorrência). In this case, the interested company must submit documents relating to legal eligibility, technical qualification, economic and financial qualification and evidence of good standing with the tax authorities. The winning bid is objectively decided based on the lowest price, best technology or technology and price, according to the bidding terms. In order to participate in public procurement processes, foreign companies that do not operate in Brazil must appoint a legal representative in Brazil with express power to receive service of, and reply to, legal or administrative proceedings, as well as fulfil, as much as possible, all the bidding terms requirements by submitting equivalent documents, certified at the respective consulates and translated by sworn public translators. These procedures are usually slow and risky, because the competitors can argue that the documents presented do not fulfill the legal requirements. Hence, most international companies who intend to participate in public tenders in Brazil decide to set up a local subsidiary. The incorporation of a company in Brazil usually takes from 20 to 45 days. Consortium bids are also accepted, but to participate in the bidding procedure, the companies must provide evidence of a public or private commitment to organize the consortium and the information about the company responsible for the consortium (if a foreign company is part of the consortium with a Brazilian company, the Brazilian company must be the head of the consortium), as well as all the applicable documents for each consortium member. Please note that it is usual for the bidding terms to demand joint and several liability for all consortium members for the consortium’s obligations. According to the newspaper “O Estado de São Paulo”, Caixa has been discussing technical and market issues with some international players such as Scientific Games, which has already set up a Brazilian subsidiary to participate in the upcoming bid. We strongly advise all the international companies that may be interested in bidding for this license to incorporate a local entity for this purpose and to start discussions with Caixa, in order to be able to contribute with the definition of the business model and regulatory framework. LUIZ FELIPE MAIA is a founding partner of Law Firm OLIVEIRA RAMOS, MAIA E ADVOGADOS ASSOCIADOS and head of the corporate and negotiation team. Attorney at Law, [email protected] Tel: [phone] European Gaming Lawyer | Spring Issue | 2014 | 35