Decree No. 1,214 published by the CGU, which establishes the requirements and the restoration procedure for companies declared not in good standing by the government

On June 8, 2020, Decree No. 1,214 (“Decree”) was published by the Office of the Comptroller General (“CGU”), which deals with the requirements and the restoration procedure for natural or legal persons declared unfit by the government, according to section “IV”, §3º of Article 87, Law No. 8,666/93, known as Public Procurement Law.

Although such sanction was created 27 (twenty-seven) years ago, the restoration procedure has only been regulated now, with the passing of the Decree.

Thus, in order to be restored, the natural or legal person declared unfit to participate in a bidding process or enter into agreements with the Public Administration, must prove that all the following requirements are being observed:

1) The lapse of the two-year period in which the party was declared unfit to participate in a bidding process or enter into agreements with the Public Administration, from the date of the publication of the declaration of lack of good standing status;

2) The full compensation of the damages caused by the acts that gave rise to the application of the declaration of lack of good standing status, if applicable; and

3) The implementation of measures that attest to the overcoming of the reasons that caused the penalty, which includes the implementation of a Compliance Program, in accordance with the standards established by Federal Decree No. 8,420/15[1].

The request for restoration, along with all the documents proving compliance with the requirements set out above, must be filed before the National Disciplinary Board (“CRG”).

CRG will then apply the necessary measures to process the request, which includes the evaluation of the Compliance Program implemented by the legal person seeking restoration.

Once the technical analysis has been prepared, the CRG will forward the case file to the CGU Legal Consultancy for a legal opinion, and then to the Minister of State of the CGU, for a final decision.

In case of rejection of the request for restoration, the party may, at any time, file a new request, provided it is based on new evidence or facts.

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[1] This requirement is not applicable to natural persons.