In this multi-part series, we’re addressing questions related to corruption leading up to the XXXI Olympic Games in Rio. The Olympic Games require a vast amount of equipment, supplies, and services to be a success, and Rio 2016 is no exception. Efforts to address these procurement needs have already begun and the bidding process is ongoing. As part of our study, we will review the legal and cultural framework for procurement in Brazil and the procurement measures in place for Rio 2016. Our previous posts can be found here and here.
Procurement for the Rio 2016 games is being spearheaded by the Rio 2016 Organizing Committee, a public/private hybrid tasked with putting on both the Rio 2016 Olympic and Paralympic games. In the interest of transparency, the Rio 2016 Organizing Committee has established the Rio Procurement Portal for suppliers interested in helping fulfill the needs outlined in its public purchase plan.
The record of public procurement in Brazil has been questioned in the past with allegations including over-invoicing and widespread use of facilitation fees. Additionally, there has been some question regarding the fairness of the public bidding process to foreign companies. For example, Public Law 8666/93 gives preference in public procurement to domestic companies, often requiring foreign companies to subcontract with domestic firms in order to gain a competitive advantage.
The Brazilian government has implemented an exception to bidding procedures and Differential Regimen of Public Contracts (DRC) for the Rio Olympics. These bidding procedures are very controversial, but the government is experimenting with this to streamline the bidding process as well as cut down on corruption. On the other hand, the Federal Prosecutor’s Office has declared the DRC unconstitutional. Either way the experiment turns out, this demonstrates that Brazil, from all sectors, is participating in a large conversation about how to fix corruption in their country.
Furthermore, Brazil is taking the results of their application of their Matrix of Responsibility from the World Cup and using their experience to improve that structure for the Rio Olympics. In reporting on the excess of corruption during the World Cup, a myriad of reports have gone directly to the Matrix of Responsibility in order to analyze numbers and distributions of funds. While perhaps optimistic, this reliance on government transparency efforts to discover corruption is itself progress.
This new emphasis on transparency and a seemingly level playing field for foreign companies shows a desire to take the procurement process out of the darkness and into the light of public scrutiny. Will these transparency efforts be successful?
Our research team from the University of Richmond wants to find out first hand.
You can read our preliminary paper on the subject and our proposed research here.
If you have insight or experience with these issues, we would love to hear from you. Please contact Prof. Andy Spalding at [email protected]. We are also seeking donations, whether in-kind or cash, to help defray the students’ travel and research expenses. If you want to support our work, please contact us here or follow this link. We greatly appreciate your help!
Shaun Freiman is a third-year student at the University of Richmond School of Law, and Managing Editor of the Journal of Global Law & Business. He is a graduate from Michigan State University and a former US Senate and Executive Branch staffer. He plans to apply his academic interests in criminal, contract, and international law to a career in public service.
Kat Gavin is a second-year law student at the University of Richmond, where she is pursuing a Certificate in Intellectual Property law. She received a B.A. in Russian and Post-Soviet Studies from the College of William & Mary, and previously worked as a translator for the School of Russian & Asian studies while studying in Moscow, Russia.
We also wish to thank Tyler Klink for his help in drafting this post.