Manufacturer and reseller bidding in the same Brazilian public tender: what is allowed and how to keep bids independent

This note covers tenders governed by Law No. 14,133/2021. Tenders run by state-owned companies follow Law No. 13,303/2016 and are not covered here.

At a glance: what is allowed and what is not

Why simultaneous participation is allowed

Article 14 of Law No. 14,133/2021 lists who may not take part in a tender: the author of the project and companies linked to it, bidders subject to a sanction that bars participation, anyone with ties to officials of the contracting body, companies convicted of child labor or forced labor, and controlling companies, controlled companies or affiliates competing against each other. A commercial relationship between manufacturer and reseller is not on the list.

Article 9, I, a, of the same law prohibits public officials from allowing situations that compromise, restrict or frustrate competition in the tender. A clause that, without relevant and demonstrated grounds, bars a reseller from competing with the manufacturer, or two resellers of the same brand from competing with each other, restricts competition with no legal basis. Anyone may challenge the tender notice, and the challenge must be filed no later than three business days before the scheduled opening of the tender (article 164).

The exception in article 14, V, refers to the Brazilian Corporations Law (Law No. 6,404/1976). A controlled company is one in which the controlling company, directly or through other controlled companies, holds on a permanent basis a decisive say in shareholder resolutions and the power to elect the majority of the managers. An affiliate (coligada) is a company over which the investor has significant influence, meaning the power to take part in its financial or operating decisions without controlling it. Significant influence is presumed when the investor holds 20% or more of the voting capital of the investee (article 243, paragraphs 1, 2, 4 and 5). A reseller in which the manufacturer holds an equity stake should check this point before bidding.

When assessing collusion, the Federal Court of Accounts (TCU), which audits federal spending, looks at the evidence as a whole. In Decision 1,798/2024 (Plenary), concerning reverse auctions (pregões) held before the new law, it upheld the debarment (declaração de inidoneidade) of companies owned by members of the same family that bid for the same items. Sham bids and shared premises, accountant and IT infrastructure were part of that body of evidence.

When a commercial relationship becomes collusion

The relationship between manufacturer and reseller involves a legitimate exchange of information: the reseller needs the supply price, lead times and technical support to prepare its bid. The problem arises when the information that circulates is the price each competitor intends to bid, or when the companies agree on who will win. Brazil’s antitrust authority, the Administrative Council for Economic Defense (CADE), treats this arrangement as bid rigging, and a manufacturer or distributor that organizes it may be held liable alongside the resellers. The following conduct amounts to or indicates coordination:

• Sharing, among companies that will bid in the same tender, the price each one intends to offer or its bidding strategy.
• A manufacturer or distributor passing on one reseller’s intended bid to the others.
• Submitting cover bids: a high price or an incomplete bid filed only to simulate competition.
• Allocating contracting bodies, regions or lots among resellers, or rotating winners.
• Bid suppression: agreeing not to bid, or not to place lower bids, so that another company wins.

Where the manufacturer also bids, its direct sales team should not have access to the resellers’ pricing strategy.

In 2023, CADE fined 18 companies and 20 individuals for bid rigging in tenders for projectors and interactive whiteboards. The brand’s distributor received the customer details and the reseller’s intended bid price, then passed that information on to the other resellers, which submitted cover bids. CADE’s Tribunal described the scheme as a hub-and-spoke cartel and imposed fines of about R$ 7.9 million (Administrative Proceeding No. 08012.007043/2010-79). What made it a cartel was the distributor’s use of sensitive information to organize the bids; the decision did not treat as unlawful, in itself, the policy of giving priority to the reseller that first brought in the customer.

In March 2026, CADE’s General Superintendence recommended to the agency’s Tribunal that companies and individuals be found liable for bid rigging in reverse auctions for business intelligence software and services. The investigation began with a leniency agreement entered into by a software manufacturer.

What is at stake

• Under the Public Procurement Law, defrauding a tender, engaging in dishonest conduct and committing a wrongful act under the Anti-Corruption Law are violations (article 155, IX, X and XII) punishable, after proceedings, by debarment for 3 to 6 years from contracting with any level of government (article 156, paragraph 5).
• Under Brazil’s Anti-Corruption Law (Law No. 12,846/2013, also known as the Clean Company Act), frustrating or defrauding competition in a tender through an agreement or arrangement is a wrongful act (article 5, IV, a). The fine ranges from 0.1% to 20% of gross revenue for the year before the proceeding is opened, net of taxes (article 6, I). The company is strictly liable for acts committed in its interest or for its benefit (article 2).
• Under the Competition Law (Law No. 12,529/2011), agreeing on prices, conditions, advantages or abstention in a public tender is an antitrust violation (article 36, paragraph 3, I, d), with a fine of 0.1% to 20% of gross revenue in the line of business where the violation occurred (article 37, I).
• Under the Criminal Code, frustrating or defrauding competition in a tender in order to obtain, for oneself or for others, an advantage from the contract award is a crime punishable by 4 to 8 years’ imprisonment and a fine (article 337-F). Criminal liability falls on individuals and requires proof of that conduct.

The same conduct may have different consequences under each of these laws. Where a procurement violation is also a wrongful act under the Anti-Corruption Law, Law No. 14,133/2021 requires both to be investigated and decided together, in the same proceeding (article 159).

Safeguards for companies that sell through resellers

Simultaneous participation is legitimate when each company decides on its own whether to bid, at what price and how to bid in the auction. The measures below help show that independence. They are organizational recommendations, not express legal requirements.

Manufacturer

• Adopt written rules for the reseller network on public tenders, prohibiting resellers from sharing intended prices and customer information with one another.
• Separate the team that sells directly to the government from the team that supports resellers, with controlled access to pricing information.
• Apply objective, documented criteria for deal registration and for issuing manufacturer declarations and letters of joint liability (cartas de solidariedade), without using them to decide who wins. The contracting body may request a letter of joint liability, on stated grounds, when the bidder is a reseller or distributor (article 41, IV).
• Train sales teams and resellers, and maintain a whistleblowing channel.

Reseller

• Decide the bid internally, through the reseller’s own people, and keep a record of how the price was calculated.
• Take from the manufacturer only what the bid requires, such as the supply price, lead time and technical support, without sharing the bid or bidding strategy with the manufacturer or other resellers before the result.
• Restrict access to bids and to procurement system credentials to the reseller’s own staff.
• Record in writing the reasons for any decision not to bid in a tender.

A compliance program (programa de integridade) also counts under Law No. 14,133/2021. It is a tiebreaker (article 60, IV), is mandatory for the winning bidder in large-scale contracts within six months of signing (article 25, paragraph 4), is taken into account when sanctions are set (article 156, paragraph 1, V), and is a condition for reinstatement after sanctions for false statements or wrongful acts under the Anti-Corruption Law (article 163, sole paragraph). In the federal administration, Decree No. 12,304/2024 regulates these points, with assessment by the Office of the Comptroller General (CGU).

Frequently asked questions

May a tender notice bar a reseller from bidding if the manufacturer also bids?

As a rule, no, unless there is a legal bar or relevant and demonstrated grounds. Law No. 14,133/2021 contains no such prohibition, and an undue restriction on competition breaches article 9, I, a. Anyone may challenge the tender notice; the challenge must be filed no later than three business days before the scheduled opening of the tender (article 164). The legal bar applies to controlling companies, controlled companies and affiliates, which may not compete against each other (article 14, V).

May two resellers of the same brand bid in the same reverse auction?

Yes, provided each one sets its bid independently and no legal bar applies between them, such as control or significant influence. The manufacturer’s channel policy, such as deal registration, may not be used to decide the winner in advance.

Is a price similar to another reseller’s a sign of collusion?

On its own, it does not prove collusion, especially when the product and the purchase cost are the same. What draws closer scrutiny is the overall picture: minimal price gaps across many items, bids with the same error or format, shared infrastructure or coinciding abstentions.

What happens to the company if collusion is proven?

After proceedings, it may face debarment for 3 to 6 years under the Public Procurement Law and revenue-based fines under the Anti-Corruption Law and the Competition Law, as described above. Its officers may face criminal liability if it is proven that they acted to obtain an advantage from the contract award.

Does a compliance program protect the company?

It does not remove liability. Under Law No. 14,133/2021, it serves as a tiebreaker, is taken into account when sanctions are set and is a condition for reinstatement in certain cases. It also helps show that the company acted independently.