Federal government prepares a fine-tooth comb for all contracts over R$ 1 million

All federal government contracts with amounts above R$ 1 million will have to go through a fine-tooth comb for eventual renegotiation and until the expense is extinguished.

Included in the package announced on Thursday (12), the measure is contained in Interministerial Ordinance No.

In the economic team, the review is considered the first step towards a program of periodic updating of spending and public policies, at a time when the government is also evaluating a new fiscal framework to replace the spending ceiling — a rule in force that links the growth of inflation expenses.

By ordinance, the contracts may be reviewed and renegotiated with the aim of increasing the Union’s investment capacity. It also establishes that the amounts may be reduced “by agreement between the parties” and that there may be “abolition of a quantitative portion of the contractual object”.

“The renegotiation of administrative contracts must aim at obtaining a reduction in residual values”, says the ordinance. The norm also provides that, once the “no need” to maintain a contract is verified, the possibility of termination by agreement between the parties, unilateral termination or “discharge” of its validity without further extension must be evaluated.

Reaction to revision of values

The fiscal adjustment measure – similar to what exists in other countries, which monitor and evaluate public policies to see if they are yielding results – already causes apprehension among companies that have contracts with the government, especially those in the areas of infrastructure and civil construction , which called for an upward revision of contract values ​​to compensate for the economic effects caused by the war in Ukraine and the increase in the value of inputs.

“Although the text of the norm has given room for negotiation between the contracting parties, the attention on the part of the private side is due to the possibility of federal agencies determining the reduction of scope or even the termination of contracts unilaterally”, says Luis Fernando Biazin Zenid, partner in the construction and infrastructure area at DSA Advogados.

Investors are insecure about the scope of the review. They want to know if it can also reach the concession contracts already signed during the Jair Bolsonaro government. “What is the scope? The ordinance does not respond to this”, criticizes Zenid.

In the announcement of the package, it was up to the Minister of Planning, Simone Tebet, to announce the measure. She specifically cited the contracts signed during the Bolsonaro administration.

“They will not cancel or cancel, but analyze. They will have power if they are going to maintain or annul it.” The savings potential was not detailed, but the worksheet presented by the government foresees a total reduction of R$ 25 billion in expenses with the permanent effect of revising contracts and programs.

The bodies will have a period of 60 days to forward to the Council for Monitoring and Evaluation of Public Policies (CMAP) a report containing a description of the stage in which the review and renegotiation of the contracts is found.