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Date: June 10, 2022
Posted by: CPDMA Team

Bidding law and the use of Dispute Boards

Wooden blocks forming two bridges with a connection demonstrating bids and dispute boards.

In large-scale contracts, complexity, amounts involved, and time are common causes of conflict between the parties. An effective option to help prevent and resolve these disputes is called a dispute board. This method, unlike mediation, arbitration and conciliation, consists of creating a council of technicians, appointed by both parties, who have the obligation to monitor the execution of the contracted service and issue opinions and opinions, which may be binding. Thus, the dispute board acts before the existence of a conflict, and allows the parties to be able to agree eventual contractual changes with lower costs and in a faster way.

In this sense, public sector bids are conducive to the use of dispute boards in the prevention and resolution of possible obstacles that may impair the performance of the contract. Although this type of method has already been used in previous projects, such as the construction of Line 4 (Yellow) of the São Paulo subway, the contracts signed for the renovation of the stadiums for the 2014 World Cup, the international contracts related to the 2016 Olympic and Paralympic Games, the public-private partnership of Rodovia MG-050 and the contracts for the northern section of the Rodoanel de São Paulo, there was no provision in law.

Now, Law 14.133/21 brought, in its article 151, the use of this type of method for application in public administration contracts. In this regard, the provision of the sole paragraph of this article is highlighted, which limits the application of dispute boards to disputes involving available property rights, specifically arising from possible breach of contract. Therefore, access to the judiciary for other disputes is protected.

Reference: Legal Consultant - Rodrigues and Varela

By: Álvaro Scarpellini Campos
CPDMA Team - Civil


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