Pursuing ways to improve the Brazilian procurement system: a comparison between the framework agreements in the United Kingdom and the Brazilian price registration system

Abstract

PurposeThe purpose of this paper is to conduct a literature review on framework agreements, an instrument for demand aggregation adopted in the UK, to recommend improvements to the price registration system (SRP), a mechanism often used with reverse online auctions in Brazil envisaged to promote more flexibility in centralized tenders, allowing public bodies to establish contracts when the need arises, based on registered prices.Design/methodology/approachA literature review was undertaken to analyze the UK framework agreement approach and the Brazilian SRP. In addition, in-depth interviews with civil servants from the Brazilian Ministry of Economy were conducted to examine the SRP.FindingsThe experience with framework agreements in the UK reveals at least four ways to improve the Brazilian SRP: i) extending the legal maximum duration of a price registration minute (ARP) ; ii) allowing the registration of additional suppliers in the ARP, instead of only the first lowest bidder; iii) conducting mini-competitions when a contracting authority decides to use the ARP to enter into a contract; and iv) including additional criteria for awarding suppliers, in line with the most economically advantageous tender (MEAT) approach.Social implicationsThe flow of government financial resources into procurement accounted for approximately 16.5% of gross domestic product in Brazil and for an average of 12% in OECD countries in 2017 (OECD, 2019: 135). Public procurement is a strategic function for enabling an efficient public services delivery and infrastructure deployment. It is, therefore, relevant to examine instruments of demand aggregation to improve the outcomes of public procurement.Originality/valueFramework agreements are currently not used in Brazil. This paper examines the UK experience with framework agreements to propose potential improvements to the Brazilian SRP, a procurement instrument vastly used in the country.