Skip to main content

  • AddRemove
Legal Update

New Law Makes Compliance Programs Mandatory for Contracting with the Federal District’s Public Administration

7 February 2018
Tauil & Chequer Legal Update
Following the lead established by the State of Rio de Janeiro with the publication of Law No. 7,753/2017, the Legislative Chamber of the Federal District published Law No. 6,111/2018 (“ Law”) on February 6, following the Governor's sanction on February 2, requiring the implementation of Compliance Programs in companies that contract with the Federal District’s Public Administration.

Its provisions apply to legal entities that enter into contracts, consortia, partnership agreements, concessions or public-private partnerships with the Public Administration, at all levels of public authority, whose amounts are equal to or greater than those of the “submission of prices” bidding procedure type, estimated between BRL 80,000.00 and BRL 650,000.00 (, and whose contractual term is equal to or greater than 180 days.

This rule differs from the one adopted by the state of Rio de Janeiro’s legislationsince, for instance, the latter applies to contracts whose limits are higher than those of the competitive bidding procedure type, namely, BRL 1,500,000.00 for engineering works and services and BRL 650,000.00 for purchases and services.

The provisions of the new Law are broadly applicable, covering business companies to civil partnerships, incorporated or not, irrespective of the form of organization or corporate model adopted, as well as any foundations, civil associations, or foreign companies that have their headquarters, branches or representation in Brazilian territory, constituted in fact or in law, even temporarily. In addition, it applies to contracts already in force with terms longer than 12 months and to contracts concluded with or without a waiver of bidding, provided that the aforementioned value criteria are met.

According to the new Law, the Compliance Program must be structured, applied and updated according to the current features and risks of the activities of each legal entity, which, in turn, must guarantee the constant improvement and adaptation of such Program, aiming to ensure its effectiveness. These parameters will be evaluated through the profile and compliance reports, as established by the specific federal and district regulations.

The new Law determines a period of 180 days from the signing of the contract or the publication of the Law for the implementation of the Program in the contracts in force with terms longer than 12 months, whose costs will be borne by the contracted company, without the possibility of reimbursement. Failure to comply will subject the company to a fine of 0.1%, limited to 10% of the contract value.

The contract manager will be responsible for supervising the implementation of the Program and, in his absence, the contract inspector.

The purpose of this Law is to promote compliance, ethics, and transparency in the contractual relationship between the public and private sectors, providing integrity in the business environment and raising the level of trust and legitimacy of public acts before society.

Authors

  • Luís Inácio Lucena Adams
    T +55 61 3221 4321
  • Michel Sancovski
    T +55 11 2504 4672
  • Maria Eugenia Kanazawa
    T +55 11 2504 4208
  • Arturo Vecchi
    Associate
    T +55 11 2504 4611
The Build a Report feature requires the use of cookies to function properly. Cookies are small text files that are placed on your computer by websites that you visit. They are widely used in order to make websites work, or work more efficiently. If you do not accept cookies, this function will not work. For more information please see our Privacy Policy

You have no pages selected. Please select pages to email then resubmit.