Historically, price is the primary factor for public sector entities when selecting suppliers. Public sector entities, at the national and sub-national level, are precluded from making a distinction between domestic and foreign-owned companies during the tendering process.

Recent reform to government procurement has made it easier for foreign companies to compete in public sector bids.  As of October 2020, foreign companies can bid without needing to first establish a local representative.  Only at the contract signing will a foreign company be required to have a local partner. The Finance Ministry believes this streamlined process will bring more competition to the public sector, a market of about $13 billion per year.

For an international company to successfully compete in public procurement it must understand the rules and regulations, which typically depend on the sector.  Bids may require presentations on financing, engineering, equipment capabilities, training, and after-sale services. Winning bids are chosen based on lowest price, best technology, or a combination of the two. When two equally qualified vendors are considered, the law’s implementing regulations provide a preference to Brazilian goods and services.

Brazil permits foreign companies with established legal entities in Brazil to compete for procurement financed by multilateral development bank loans.

Brazil is implementing a new bidding law (PL 4.253/2020), which entered into force in April 2021, and will become fully implemented in April 2023.  U.S. and international companies participating in Brazil’s public procurements should experience substantial improvements including standardized bidding deadlines, implementation of electronic bidding processes, publishing of government bids in a national procurement portal, and additional flexibility in access and equality for foreigners regarding required documentation. This law applies to procurements at the national and sub-national levels.  For projects in architectural and engineering services, Brazil will require that bidders use Building Information Modeling or a similar international standard in their projects. There will continue to be national preferences, for small businesses for example, however, the overall goal is for public bids at the federal, state and municipal levels to align with WTO and international standards.  

Project Financing

The U.S. Export Import Bank (EXIM) provides both export insurance and working capital for U.S. exporters and guaranteed loans for Brazilian importers. Contact the international department of your bank for information regarding correspondent banks in Brazil and to see if they work with EXIM. You will also find contact information for EXIM insurance brokers and guaranteed lenders at https://www.exim.gov/.

Multilateral Development Banks

The U.S. Commercial Service maintains Commercial Liaison Offices in each of the main multilateral development banks, including the Inter-American Development Bank (IDB) and the World Bank. These institutions lend billions of dollars to developing countries for projects aimed at accelerating economic growth and social development by reducing poverty and inequality, improving health and education, and advancing infrastructure development. The Commercial Liaison Offices help U.S. businesses learn how to get involved in bank-funded projects, and advocate on behalf of U.S. bidders.  

For more information, please contact US Commercial Service Industry Specialist Patrick Levy at Patrick.Levy@trade.gov

Resources

• Export-Import Bank of the United States (Exim): https://www.exim.gov/
• U.S. International Development Finance Corporation (DFC): https://www.dfc.gov/
• USTDA (U.S. Trade and Development Agency) https://www.ustda.gov/
• SBA (Small Business Administration) - Office of International Trade: https://www.sba.gov/oit/ 
• USDA (U.S. Department of Agriculture) Commodity Credit Corporation: https://www.fsa.usda.gov/ccc/default.htm
• USAID (U.S. Agency for International Development): https://www.usaid.gov/
• Commercial Liaison Office to the World Bank https:/www.trade.gov/world-bank
• Commercial Liaison Office to the Inter-American Development Bank https://www.trade.gov/idb
• Brazilian Central Bank: https://www.bcb.gov.br/

Brazilian Federation of Banks (Febraban): https://portal.febraban.org.br/