Most international tenders are for registering prices in foreign currency
Jonas LimaÂą
1. Concept and Legal Definition of International Bidding
From a doctrinal perspective, an international bidding process is a mandatory procurement procedure when, due to limitations or conditions of the domestic market, the State must expressly invite foreign bidders—through national and international means of publication—to participate in the competition. The bidding notice is specifically designed for this purpose.
Law No. 14,133/2021 was the first to provide a legal definition:
“Art. 6. For the purposes of this Law, the following are considered: (…)
XXXV – international bidding: bidding conducted in national territory in which the participation of foreign bidders is allowed, with the possibility of price quotations in foreign currency, or bidding in which the contractual object may or must be carried out wholly or partially abroad.”
It is essential that public notice ensures equal treatment, in accordance with Article 37 of the Federal Constitution, so that both Brazilian and foreign bidders have equal access to information about opportunities to contract with the Brazilian government. In this context, serious criticism is made of “national tenders” that merely allow the participation of foreigners—an approach that often results in considerable losses—when a true international bidding process, including a notice designed to ensure full and effective competition among foreign bidders, should have been adopted.
2. Focus of the Article – Foreign Currency
The paradigm that pricing in foreign currency in public procurement leads to loss of cost-efficiency needs to be overcome. In practice, the opposite effect is observed: a significant increase in cost-efficiency and advantage in international procurement procedures.
Data from the former Comprasnet platform and other systems, including the National Public Procurement Portal, show that more than half of international bids are for registering prices in foreign currency. This phenomenon is explained by the increased competitiveness and alignment with the principles of the Public Procurement Law.
3. Article 12, Item II of Law No. 14,133/21 and Systematic Integration
The referenced provision states that:
“Values, prices, and costs used must be expressed in national currency, except as provided in Article 52 of this Law.”
This exception is not a mere procedural deviation but a specific rule recognizing the need to adapt to the particularities of international trade.
The systematic coherence between Articles 12(II) and 52 of Law No. 14,133/21 shows that the legislator not only allowed but encouraged the use of foreign currency in international bids.
Article 52 establishes that, in international bids, the notice must conform to monetary policy and foreign trade guidelines and comply with the requirements of the competent agencies. Paragraph 1 states that:
“When foreign bidders are allowed to quote prices in foreign currency, Brazilian bidders may do so as well,”
and paragraph 2 adds:
“Payments made to Brazilian bidders eventually contracted under the terms of §1 shall be made in national currency.”
This regulatory framework enables competitiveness, equal treatment, and advantageous procurement. Practice clearly shows that trying to conduct international bidding with national currency only is extremely detrimental.
4. Harmonization with Exchange Regulations
Law No. 14,286/21, which governs the Brazilian foreign exchange market, in Article 13(I and IX), allows payment obligations enforceable in Brazilian territory to be denominated in foreign currency for:
- “Contracts and instruments related to foreign trade in goods and services, including financing and guarantees”
- “Other situations provided for by law”
This includes contracts resulting from international tenders.
This provision updates Article 1, sole paragraph, item I of Law No. 10,192/01, which already made exceptions for payment obligations in foreign currency when authorized by law or Central Bank regulation, as well as Article 318 of the Civil Code, which prohibited such arrangements except where provided by special legislation. Thus, the provisions of the Public Procurement Law are now aligned and consistent with exchange control legislation.
5. Advantage and Competitiveness
The principle of competitiveness, enshrined in Article 5 of Law No. 14,133/21, finds practical application in price quotations in foreign currency. Foreign companies often hesitate to participate in bids requiring pricing in Brazilian reais, drastically reducing the number of participants—and, consequently, competition.
Practice shows that national tenders that attempt to attract foreign participants but require pricing in reais yield negligible results in terms of savings or efficiency. In many cases, only Brazilian intermediaries participate, reselling already nationalized products—resulting in substantial losses for the public purse.
Pricing in foreign currency is therefore an inherent and essential element of true international competition.
One of the objectives of public procurement, according to Article 11(I) of Law No. 14,133/21, is to select the proposal that offers the most advantageous result for the Public Administration. Foreign currency pricing directly contributes to this, as exchange rate fluctuations are offset by the savings gained through increased competition and reciprocal tax immunity (when importing through a public entity’s CNPJ).
The reduction in tax burden alone often exceeds 60% or 70%, depending on the product’s NCM code, due to Article 150(VI)(a) of the Federal Constitution, which prohibits the taxation of property, income, or services of the Union, States, Federal District, and Municipalities—benefiting imports carried out by the Public Administration and expanding cost-efficiency in international bids.
This dual benefit—savings from competitiveness and tax immunity—more than compensates for exchange rate fluctuations, resulting in undeniable advantage for the Public Administration.
6. Operational and Regulatory Aspects
The operational framework established by law preserves monetary sovereignty by requiring that Brazilian bidders contracted in international processes be paid in national currency, with currency conversion done at the time of the bank transaction, in accordance with foreign exchange regulations.
For foreign suppliers, payment is made using typical international trade instruments, such as letters of credit for goods imports or international transfers for services—maintaining alignment with monetary policy and foreign trade guidelines.
7. Conclusions
A systematic reading of Article 12(II) of Law No. 14,133/21 shows that quoting in foreign currency in international tenders not only has solid legal grounding—consistent with foreign exchange rules—but is also essential for implementing the principles of competitiveness, cost-efficiency, and advantageous procurement. Far from being a barrier, the use of foreign currency proves to be a tool for enhancing the efficiency and value of public contracting.
Âą Jonas Lima, attorney specializing in national and international public procurement.Source:Sollicita Portal Article
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