Untitled Document

“DIFFERENTIATED PUBLIC CONTRACTINGSYSTEM FOR THE 2014 WORLD CUP AND
2016 OLYMPIC GAMES"

Rodrigo da Fonseca Chauvet *

By meansof Law No.12462ofAugust 5th, 2011, the“Differentiated Public Contracting System”(RDC) was instituted.This new systemwas createdwith the primary aimof making possible, in a timely manner, the implementation ofnecessary infrastructure forrealization ofthe 2014 WorldCupand2016 Olympics. This article will presenthypotheses ofimplementing such new regime,in addition to itsmain aspects, such as: integratedhiring,phase reversalin biddingand efficiency contract.We will also lookat the points thathave already been born controversial, such as waiving presentation of the basic projectby bidder entities,ifadoptedintegratedhiring, as well as the confidentiality ofbudget.
Firstissue to be addressedis an evaluationofthe hypotheses through which Public Administrationwill be able touse theRDC.According to Article1 of LawNo.12.462/2011, the system maybe adoptedfor biddingand contractsneeded for fruition on:
a)Olympic andParalympic Games in 2016, containedin theOlympic Projects Portfolioand defined by theOlympic Public Authority(APO);
b) 2013 Confederations Cupand2014World Cup, being restricted,in the case ofpublic works,to thosecontained in thearray ofresponsibilitiesagreed between theUnion, State, Federal District and the Cities;
c) Infrastructure construction workand serviceto airports locatedin the State Capitals of the Federationand up to350kmdistantfrom the hosting citiesof such events;

Fora full understandingonhypotheses of application,it is important to evaluatewhat constitutesthe mentioned OlympicProjectsPortfolio, as well asthe referredarray of responsibilities. Looking at thefirst of these,we have that,with the Cityof Rio de Janeiro being electedto host the2016 Olympic Games, the Union, the State and the Cityof Rio de JaneiroformalizedaProtocol of Intentions, converted into Law No.12.396, on March 21st, 2011. Its basic objectivewas the establishmentof theOlympic Public Authority(APO), a special agencyresponsible for approving theOlympic Projects Portfoliodefined as the"body of worksand services selectedby theAPOas being essential to the fruition of the Olympic Gamesand Paralympic Gamesin 2016.”1Thereby,the worksand services includedin theOlympicProjects Portfoliomay besubject to the newcontracting system.

Thearray of responsibilities, in turn, is defined as"binding document that sets out theobligationsof eachof the signatoriestowardsthe organization and the accomplishmentof the Games" .2 In such document, therefore, signed by the Union,States and Citieshosting thegames of the 2013 Confederations Cupand2014 FIFA World Cup, werelistedthe works andservices needed to completethethreeevents3,whichcan also becontracted throughRDC use.

Surpassedthe hypotheses ofimplementingthe new system,it becomes necessarythe approachof its main characteristics. A novelty brought by RDCisthe so-calledintegrated contracting4which, as definedin Article9, § 1st,Law No.12.462/2011, "comprisesdesign and developmentofbasic and executive project, execution of works andengineering services,assembling,testing, pre-operation and all othernecessary operationsfor final deliveryof the object."

Along RDC agility line (after all,we are gettingcloser and closer to theWorld Cup andthe Olympicsand muchhas been said aboutthe delayin the works5), the contractor shall operateat all phasesof the works or provisionof services, includingdrafting ofthe basic project 6, an issue that has generatedmajor debates.

That is because in the traditional system, ruled byLaw No. 8.666/93,Public Administrationitself
is responsible for drafting thebasic project.It is inferredfromits own denominationbeing aproject thatsets allcharacteristicsof works orservice, allowingan exact definition on the object of biddingand on the purposeto be reachedby Public Administrationwith execution ofworks or service. Despite validity of theargument thatprivate sector initiativecanelaboratethe said project with greater efficiency and quality, theabsence ofits submission by Public Administrationmay hinder anobjective judgment of thebidding,given the lack ofaclear objectto be tendered.

It is only necessary to elucidatethat RDC foresees, in replacing theaforementionedbasic project,the submission by the bidder, of an"engineering preliminary blueprint which addresses thetechnical documentsintendedto enablethe characterizationof worksor service(...)".7 It is argued, however, that a preliminary blueprint,simpler andless detailed, hamper,as already stated, the definition of the realobject of biddingand can impair judgmentof the eventbased ondifferentbasic projectsdevelopedby thebidders themselves.

Apoint of heated debates concerning RDC refers to estimated budget for contracting. And that's because the Administration is allowed to maintain the budget in secrecy until bidding closure, while subject to open information access at any time by the control agencies.

Fleeing fromaManicheanevaluation it is possible toseepros andcons withinthis measure. On the one hand, it has been argued thatpartialconcealmentof the budgetmay favorbidderswho illegallyhave accessto the amountsthe Public Administration disposes for contracting. On the other hand, not to disclose theBudgetmay grant greater bargaining power to Public Administration, since no bidderwould know,in advance, the amountthe Governmentiswilling topay for the works, reducing, in theory, the value of proposals.

Another aspect tobe considered, andwhich is also directlyrelated to scopeof the new regimein acceleratingcontracting,consists of abidding phase inversion, with postponement, as a rule,of thequalifying phase, a mechanism already provided forby Law No.10.520/028. In this fashion, only the bidderwho submits thebestproposal willhave theirrequiredqualifying documentationevaluated in thetender.Such procedurereducesunnecessary examination time ofdocuments andminimizesthe chances oflegal disputesconcerning qualification,compared to thetraditional system, in whichdocumentationof all participantsof the event isanalyzedprior tobid opening.

One lastfactor to beaddressedrefers to theefficiencycontract,provided for inRDC.In summary, the referred contractwill be concludedwhenjudging criteriaadoptsmaximum financial return,under Article18, paragraph V of LawNo.12.462/2011. Its goalis to providegreatersavings forPublic Administration incurredfrom implementationof the contract,with reduction ofexpenses,being the contractorpaidaccordingto a percentage ofachieved savings.

These then, are some of the relevant aspects of the Differentiated Public Contracting System, which will require the judiciary performance, demanding attention and preparation of the private sector involved in the chain of projects related to 2014 World Cup and the Olympic and Paralympic Games in 2016.

1 Law No. 12.396 of March 21st, 2011, appendix, clause 3, section VII.
2 Law No. 12.396 of March 21st, 2011, appendix, clause 3, section IV.
3 The list of works and services related to the array of responsibilities can be found on the website:
http://www.portaltransparencia.gov.br/copa2014/matriz/
4 In addition to integrated contracting, Law No.12.462/2011 provides in Article 8, the following types of contracts: contract per unit price, global price contract, contract by task and whole project contract.
5 On the topic, it is noteworthy to read an article published on Veja Magazine, titled “Race Against Time” written by Jonas Oliveira, dated 07/27/2011, pages 31/42.
6 In the new system (Law No. 12.462/2011), the basic project is defined, in Article 2, paragraph IV, as "the set of elements necessary and sufficient with the appropriate level of accuracy , for, observing the provisions in the sole paragraph of this article: a) characterize the works or service, or complex of works or services, object of bidding, based on indications of preliminary technical studies; b) ensure the technical feasibility and appropriate treatment of the project's environmental impact , and c) enable the evaluation of the works cost and define the methods and the implementation period. "It is necessary to keep in mind that, as provided by Law No. 8.666/93, the Public Administration establishes that the bidder will be solely responsible only for the preparation of the executive project, and in any case the Basic Project shall be under the Public Administration’s responsibility.7 Law No.12.462/2011, Article 9, § 2, section I.
8 Law No. 10.520 of July 17th 2002, regulates the Trading Floor, bidding method used for the purchase of common goods and services, defined as those whose standards of performance and quality can be objectively defined by public notice, throughusual specifications in the market.

* Rodrigo da Fonseca Chauvetis aTRIGUEIRO FONTES Advogados Lawyer in São Paulo-SP.