The TCE-SP (Court of Auditors of the State of São Paulo) investigates possible irregularities in contracts without bidding that total R$ 161 million made by the Butantan Foundation with a software supplier.
Among other issues, the analysis of the agency’s technicians points to risks of overpricing in the process.
The agreements were signed with the company SAP Brasil Ltda between 2021 and 2022 for the implementation and licensing of an integrated business management system at the foundation and are valid for five years. The contracting took place in the unenforceability of bidding model.
wanted by Sheet, Butantan and SAP denied any irregularities and stated that they will provide all clarifications to the control body. They also affirmed that the values are within the practiced by the market.
TCE technicians considered the contracting to be a high risk for a number of reasons: the possibility of overbilling, possible failures in the execution process and the possibility of the return on investment being below the contracted cost. The agency then demanded explanations from Butantan, which has not yet registered its responses.
The Butantan Foundation is a private entity and works in support of the Butantan Institute, which is linked to the state government.
In an order, TCE counselor Cristiana de Castro Moraes demanded explanations on various aspects raised by the agency’s inspection team.
Court technicians state that the law is clear “in stating that the unenforceability [de licitação] applies when competition is unfeasible, however, this is not the case, as there are numerous national or nationalized Corporate Management Systems (ERP) on the market, which serve organizations of all branches and sizes”.
The document also states that there is no evidence that the purchased product does not have similar products on the market. The existence of a similar national product, according to the report, would also contravene the law.
“The lack of market price research and the excessive specificity of the object made it impossible to consider the adequacy of the contracted amount”, states the document. With that, says the court, there is a risk of overpricing in the contract.
The technicians point out that only ample competition could provide the comparison of existing solutions and evaluation of the best cost benefit. In the text, they stated that the Butantan Foundation is “repeating the mistaken understanding that the bidding process was unenforceable”.
Álvaro Martim Guedes, a specialist in public administration at Unesp (Universidade Estadual Paulista) explained that the appeal of unenforceability should be used when a technical opinion indicates that a single company offers such a product or service.
“Butantan, for example, works with very rare inputs, so it would be unenforceability in this situation for a vaccine or input, when only that supplier has that product or patent. Now for a management system, the characterization of unenforceability is very fragile” , says the professor.
“As much as SAP is robust and internationally renowned, it does not mean that there are no others with the same quality. ERP systems (business management) have a history of more than 20 years and extensive competition”, completes Guedes.
For lawyer Anderson Medeiros Bonfim, a specialist in contracts and bids, unenforceability has high risks and should only be exercised when competition is unfeasible.
“Among the risks, the first is the artificial creation of an exceptional hypothesis, to the detriment of impersonality and efficiency in choosing the best solution for the public interest”, says Bonfim.
“The second is the high possibility of overpricing. The price justification must be robust enough to prove that the private performer [fornecedor] did not use the contract to obtain more expressive benefits than those obtained by him until then.”
The TCE’s analysis also states that certain conditions provided for in the contract “benefit the SAP contractor more, which can pose a serious risk to the operational normality of the Butantan Foundation”.
During the investigation, the agency also verified a possible connection between people from the company and from Butantan.
SAP was founded in Germany in 1972 and its Brazilian unit is headquartered in São Paulo. In 2015, the company ended up in the crosshairs of the CPI (Parliamentary Commission of Inquiry) of Petrobras. At the time, a company executive denied overpricing and payment of bribes related to contracts signed with the oil company.
In a note to SheetButantan denies that there have been any irregularities and that it will provide all clarifications to the agency.
“At the moment there is a request for explanations from the control body, which happens every time there is some kind of doubt or questioning”, says the note.
The foundation explains the choice for the unenforceability model. “Thus, the parameter for verifying the price is the average value charged by the contractor in the market. In this way, there is the certainty that an abusive value is not being practiced, in any way”, says the agency.
According to Butantan, SAP software serves most pharmaceutical industries located in Brazil and abroad. “Currently, 18 of the 20 largest vaccine producers in the world are running their production on SAP solutions, which cover the end-to-end process, from production, through controlled distribution, administration, to post-vaccine monitoring”, says the foundation.
SAP, in turn, highlighted in a note the leadership in the pharmaceutical segment. According to the company, the contracted service cannot be compared with the previous one and covers “the supply of purchasing management software, human resources, outsourced labor, supply chain, digital signature, analytical tools and cloud platform” .
The company states that its pricing “aims to offer prices compatible with the average prices charged by SAP in Brazil at that time, as well as discounts and benefits consistent with the volume, configuration, payment method, term and other conditions that integrated the proposal technical and commercial presentation presented by SAP to Fundação Butantan”.
When questioned, the Court of Auditors states that after the justifications given by Butantan are sent, they “will be analyzed by the internal technical bodies that will issue opinions that will subsidize the Councilor’s later dispatch with new determinations”.
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