By Christian Fernandes Rosa and Beatriz Wehby

In view of the advance of COVID-19 and the resulting social challenges to be faced by the Brazilian State, Law No. 13,979/2020 was enacted, establishing legal instruments to confront the pandemic.

With regard to relations between the Public Administration and the market, the rule stands out for establishing a quick alternative for the Public Authorities to contract health goods, services and supplies.

According to its article 4, the bidding process is waived for the acquisition of health goods, services, materials and equipment intended for the treatment of health emergencies arising from this new disease, while the medical emergency continues.

This is a new hypothesis of direct contracting and, therefore, without bidding, which may be used by the Union, States and Municipalities, in addition to the Federal District. This is because, as we understand it, the rule was instituted in the exercise of the exclusive competence of the Union to legislate, on a national (not merely federal) basis, on general rules for public bidding and contracts, as provided for in art. 22, item XXVII, of the Constitution of the Republic.

In order to use this new instrument, however, it is essential that the public agent and private partner pay attention to a series of requirements, which must be clearly demonstrated and documented in a specific procedure, in order to avoid future questions regarding the legality of the contract entered into.

As we know, the Public Administration has the duty to protect the public interest, so that the exemption does not exempt the public partner from seeking the most beneficial partnership, motivating its choice on the advantageous nature of the contract entered into. This means that it is the responsibility of both the public agent and the interested parties to document the economic reasonableness and, thus, demonstrate the adequacy and legality of the terms of the contract. To demonstrate the absence of undue advantage or overpricing, it is possible, for example, to parameterize the submitted proposal based on other, past proposals with similar subject matter and proportions.

This becomes particularly important when considering that, due to its exceptional nature, the contracting procedure in question will be subject to careful review by the Audit Courts, without prejudice to its assessment by the Public Prosecutor's Office and any citizens. Both the public agent and the contracted company may be held liable for damages caused by any abusive contracting.

The team of Public Law & Compliance of Mazzucco & Mello Lawyers believes that the instrument can be very useful for the Union, States and Municipalities to provide adequate services to the population in these challenging circumstances. Our team has extensive experience in public-private contracts and is available to provide any clarifications regarding the legal model and economic-financial structuring rules for these contracts between the Public Administration and the private sector.