Top

28-09-2023

Impact of the Flexibility of Procurement Processes on Public Purchases in the Tackling of the Public Health Emergency Caused by COVID-19: Evidence from Brazil

Authors: Rodrigo Nobre Fernandez, PhD, Thais Waideman Niquito, PhD, Gibran da Silva Teixeira, PhD, Andressa Mielke Vasconcelos, PhD

Published in: Public Organization Review

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract

In order to speed up the purchases of essential products and services required by the public administration to tackle the sanitary crisis caused by COVID-19, the Brazilian federal government enacted laws No. 13,979 and No. 14,035 in 2020, exempting such items from the procurement process. This research aimed to investigate the impact of the flexibility in Brazilian law on government bids. For this purpose, a database composed of items acquired between January 2019 and December 2020 was built, and the empirical strategy was based on Difference-in-Differences models. The results indicate that the effect of this legal provision on the price of potentially affected items was an increase of approximately 5%. Some explanations for this price increase are due to the pressure of demand, changes in the strategic planning of companies and in the way they allocate their workers, which affect the costs of these companies.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Subsequently replaced by Decrees No. 5,450/2005 and No. 10,024/2019 (Brasil, 2000a, b, c, 2002, 2005, 2019).

Arrieta, L. B. (2014). Taking the “Jeitinho” out of Brazilian procurement: The impact of Brazil’s anti-bribery law. Public Contract Law Journal, 44(1), 157–178. http://www.jstor.org/stable/44742590

Bajari, P., & Hortaçsu, A. (2003). The winner’s curse, reserve prices, and endogenous entry: Empirical insights from eBay auctions. The RAND Journal of Economics, 34(2), 329–355. https://doi.org/10.2307/1593721CrossRef

Bajari, P., & Tadelis, S. (2001). Incentives versus transaction costs: A theory of procurement contracts. The RAND Journal of Economics, 32(3), 387–407. https://doi.org/10.2307/2696361CrossRef

Bajari, P., McMillan, R., & Tadelis, S. (2009). Auctions versus negotiations in procurement: an empirical analysis. The Journal of Law, Economics, & Organization., 25(2), 372–399.

Bastos, E. F., & Cavalcante, L. R. T. (2021). Electronic bidding and bidding exemption: An analysis of values of procurement processes in units of the Brazilian Federal Public Administration. Revista Do Serviço Público, 72(1), 41–66. https://doi.org/10.21874/rsp.v72i01.4880CrossRef

Bolton, P., & Dewatripont, M. (2005). Contract theory. MIT press.

Brazil. [Constitution (1988)]. Constitution of the Federative Republic of Brazil of 1988. Brasília, DF: Presidency of the Republic, [2023]. Available at: https://www.planalto.gov.br/ccivil_03/constituicao/constituicao.htm

Brazil. (1993). Law No. 8,666, of June 21, 1993. Regulates art. 37, item XXI, of the Federal Constitution, establishes rules for Public Administration tenders and contracts and provides other measures. Official Gazette [of] the Federative Republic of Brazil. Available at: https://www.planalto.gov.br/ccivil_03/leis/l8666cons.htm

Brazil. (2000a). Complementary Law No. 101, of May 4, 2000a. Establishes public finance standards aimed at responsibility in fiscal management and provides other measures. Official Gazette [of] the Federative Republic of Brazil. Available at: https://www.planalto.gov.br/ccivil_03/leis/lcp/lcp101.htm

Brazil. (2000b). Decree No. 3,697, of December 21, 2000. Regulates the sole paragraph of art. 2nd of Provisional Measure n°2,026–7, of November 23, 2000, which deals with the auction through the use of information technology resources. Official Gazette [of] the Federative Republic of Brazil. Available at: http://www.planalto.gov.br/ccivil_03/decreto/d3697.htm

Brazil. (2000c). Provisional Measure No. 2,026, of May 4, 2000c. Establishes, within the scope of the Union, in accordance with art. 37, item XXI, of the Federal Constitution, type of bidding called auction, for the acquisition of common goods and services. Official Gazette [of] the Federative Republic of Brazil. Available at: https://www.planalto.gov.br/ccivil_03/mpv/antigas/2026-4.htm

Brazil. (2002). Law No. 10,520, of July 17, 2002. Establishes, within the scope of the Union, States, Federal District and Municipalities, in accordance with art. 37, item XXI, of the Federal Constitution, a type of bidding called auction, for the acquisition of common goods and services, and provides other measures. Official Gazette [of] the Federative Republic of Brazil. Available at: http://www.planalto.gov.br/ccivil_03/leis/2002/l10520.htm

Brazil. (2005). Decree No. 5,450, of May 31, 2005. Regulates the auction, in electronic form, for the acquisition of common goods and services, and provides other measures. Official Gazette [of] the Federative Republic of Brazil. Available at: https://www.planalto.gov.br/ccivil_03/_ato2004-2006/2005/decreto/d5450.htm

Brazil. (2011). Law No. 12,527, of November 18, 2011. Regulates access to information provided for in section XXXIII of art. 5th, in item II of § 3rd of art. 37 and in § 2 of art. 216 of the Federal Constitution; amends Law No. 8,112, of December 11, 1990; repeals Law No. 11,111, of May 5, 2005, and provisions of Law No. 8,159, of January 8, 1991; and takes other measures. Official Gazette [of] the Federative Republic of Brazil. Available at: https://www.planalto.gov.br/ccivil_03/_ato2011-2014/2011/lei/l12527.htm

Brazil. (2019). Decree No. 10,024, of September 20, 2019. Regulates bidding, in the auction mode, in electronic form, for the acquisition of goods and the contracting of common services, including common engineering services, and provides for the use of electronic dispensation, within the scope of federal public administration. Official Gazette [of] the Federative Republic of Brazil. Available at: https://www.planalto.gov.br/ccivil_03/_ato2019-2022/2019/decreto/d10024.htm

Brazil. (2020a). Legislative Decree No. 6, of 2020. Recognizes, for the purposes of art. 65 of Complementary Law No. 101, of May 4, 2000, the occurrence of a state of public calamity, in accordance with the request of the President of the Republic sent through Message No. 93, of March 18, 2020. Official Gazette [of] Federative Republic of Brazil. Available at: https://www.planalto.gov.br/ccivil_03/portaria/dlg6-2020.htm

Brazil. (2020b). Law No. 13,979, of February 6, 2020. Provides for measures to address the public health emergency of international importance resulting from the coronavirus responsible for the 2019 outbreak. Official Gazette [of] the Federative Republic of Brazil. Available at: https://www.planalto.gov.br/ccivil_03/_ato2019-2022/2020/lei/l13979.htm

Brazil. (2020c). Law No. 14,035, of August 11, 2020. Amends Law No. 13,979, of February 6, 2020, to provide for procedures for the acquisition or contracting of goods, services and inputs intended to face public health emergencies of international importance resulting from the coronavirus responsible for the 2019 outbreak. Official Gazette [of] the Federative Republic of Brazil. Available at: https://www.planalto.gov.br/ccivil_03/_ato2019-2022/2020/lei/l14035.htm

Brazil. (2020d). Provisional Measure No. 926, of March 20, 2020. Amends Law No. 13,979, of February 6, 2020, to provide for procedures for the acquisition of goods, services and inputs intended to face the public health emergency of international importance resulting from the coronavirus. Official Gazette [of] the Federative Republic of Brazil. Available at: https://www.planalto.gov.br/ccivil_03/_ato2019-2022/2020/mpv/mpv926.htm

Brazilian Office of the Comptroller General - CGU. (2017). Technical Note nº 1,081 2017a CGPLAG DG SFC. Avaliable at: https://www.gov.br/cgu/pt-br/assuntos/noticias/2017/07/cgu-divulga-estudo-sobre-eficiencia-dos-pregoes-realizados-pelo-governo-federal/nota-tecnica-no-1-081-2017-cgplag-dg-sfc.pdf

CEPAL, N., & Adenauer, F. K. (2021). Post pandemic Covid-19 economic recovery: Enabling Latin America and the Caribbean to better harness e-commerce and digital trade. Available at: https://repositorio.cepal.org/handle/11362/46858

Cook, J. A. (2014). The effect of firm-level productivity on exchange rate pass-through. Economics Letters, 122(1), 27–30. https://doi.org/10.1016/j.econlet.2013.10.028CrossRef

Cunningham, S. (2021). Causal inference: The mixtape. Yale University Press. Available at: https://mixtape.scunning.com/CrossRef

Decarolis, F. (2014). Awarding price, contract performance, e bids screening: Evidence from procurement auctions. American Economic Journal: Applied Economics., 6(1), 108–132.

Decarolis, F., & Palumbo, G. (2015). Renegotiation of public contracts: An empirical analysis. Economics Letters, 132, 77–81. Elsevier.CrossRef

Dunlop, C. A., Ongaro, E., & Baker, K. (2020). Researching COVID-19: A research agenda for public policy and administration scholars. Public Policy and Administration, 35(4), 365–383.CrossRef

Fernandez, R. N., & Ribas, T. G. (2021). A quantitative analysis of the competition process in public purchases of Pelotas’ reverse auctions. In Revista Do Serviço Público, 72(1), 67–100. Escola Nacional de Administração Pública (Enap).

Fernandez, R. N., Medeiros, N. X., & Shikida, C. (2018). Public procurement bids and efficiencies: A case study for the Federal University of Pelotas. Economic Analysis of Law Review, 9(3), 208–228 Universidade Católica de Brasília UCB.

Hong, H., & Shum, M. (2002). Increasing competition e the winner’s curse: Evidence from procurement. The Review of Economic Studies, 69(4), 871–898. Wiley-Blackwell.CrossRef

International Monetary Fund - IMF. (2023). World economic outlook: A rocky recovery (n. 04). Available at: https://www.imf.org/en/Publications/WEO/Issues/2023/04/11/world-economic-outlook-april-2023

Levin, J., & Tadelis, S. (2010). Contracting for government services: Theory e evidence from US cities. The Journal of Industrial Economics, 58(3), 507–541. Wiley Online Library.CrossRef

Lewis, G., & Bajari, P. (2014). Moral hazard, incentive contracts, e risk: evidence from procurement. Review of Economic Studies, 81(3), 1201–1228.

LICITACON. (2023). Procurement and Contracts System - TCE/RS - Citizen bidding. http://www1.tce.rs.gov.br/aplicprod/f?p=50500:1:::NO:::.

Lino, A. F., & Aquino, A. C. B. (2017). The diversity of the Brazilian regional Audit Courts on government auditing. Revista Contabilidade & Finanças, 29, 26–40. SciELO Brazil.CrossRef

Masri, D. A., Flamini, V., & Toscani, F. (2021). The short-term impact of covid-19 on labor markets, poverty and inequality in Brazil. Avaliable at https://www.imf.org/-/media/Files/Publications/WP/2021/English/wpiea2021066-print-pdf.ashx

OECD. (2021). Fighting bid rigging in Brazil: A review of Federal Public Procurement. https://www.oecd.org/competition/fighting-bid-rigging-in-brazil-a-review-of-federal-publicprocurement.htm

OECD (2021a). Tax and fiscal policies after the COVID-19 crisis. OECD. https://read.oecd-ilibrary.org/view/?ref=1112_1112899-o25re5oxnb&title=Tax-and-fiscal-policies-after-the-COVID-19-crisis. Accessed 9 Aug 2023

Rhouma, T. B., & Zaccour, G. (2012). An empirical investigation of late bidding in online auctions. Economics Letters, 117(3), 715–717. Elsevier.CrossRef

Rio Grande do Sul. (2017a). Resolution 1,073/2017. Amends item II of article 5 of Resolution No. 1050, of November 4, 2015, which provides for the sending and making available, through the Tenders and Contracts System - LicitaCon, of data, information and documents related to tenders and contracts administrative functions of the powers, bodies and entities under the jurisdiction of the Court of Auditors of the State of Rio Grande do Sul. Available at: https://atosoficiais.com.br/tcers/resolucao-n-1073-2017-altera-o-inciso-ii-do-artigo-5-da-resolucao-n-1050-de-04-de-novembro-de-2015-que-dispoe-sobre-o-envio-e-a-disponibilizacaopor-meio-do-sistema-de-licitacoes-e-contratos-licitacon-de-dados-informacoes-e-documentos-relativos-a-licitacoes-e-contratosadministrativos-dos-poderes-orgaos-e-entidades-jurisdicionados-do-tribunal-de-contas-do-estado-do-rio-grande-do-sul

Rio Grande do Sul. (2017b). Resolution 1,073/2017. Amends item II of article 5 of Resolution No. 1050, of November 4, 2015, which provides for the sending and making available, through the Tenders and Contracts System - LicitaCon, of data, information and documents related to tenders and contracts administrative functions of the powers, bodies and entities under the jurisdiction of the Court of Auditors of the State of Rio Grande do Sul. Official Gazette [of] Rio Grande do Sul. Available at: https://atosoficiais.com.br/tcers/resolucao-n-1073-2017-amends-item-ii-of-article-5-of-resolution-n-1050-of-04-November-2015-which-provides-for-sending-and-availability-through-the-system-of-tenders-and-contracts-bid-of-data-information-and-documents-related-to-tenders-and-administrative-contracts-of-the-powers-organs-and-entities-jurisdictions-of-the-court-ofaccounts-of-the-state-of-rio-grande-do-sul

Roth, A. E., & Ockenfels, A. (2002). Last-minute bidding e the rules for ending second-price auctions: Evidence from eBay e Amazon auctions on the Internet. American Economic Review., 92(4), 1093–1103.CrossRef

World Bank. (2017). A fair adjustment : Efficiency and equity of public spending in Brazil : Volume 1 - Overview (English). World Bank Group. http://documents.worldbank.org/curated/en/643471520429223428/Volume-1-Overview

Title: Impact of the Flexibility of Procurement Processes on Public Purchases in the Tackling of the Public Health Emergency Caused by COVID-19: Evidence from Brazil
Authors: Rodrigo Nobre Fernandez, PhD
Thais Waideman Niquito, PhD
Gibran da Silva Teixeira, PhD
Andressa Mielke Vasconcelos, PhD
Publication date: 28-09-2023
Publisher: Springer US
Published in: Public Organization Review
Print ISSN: 1566-7170
Electronic ISSN: 1573-7098
DOI: https://doi.org/10.1007/s11115-023-00748-8