Performance administrative contracts with success fee clause: possibilities and limits in the light of Law 8.666/1993

Abstract

This legal opinion addresses the legality of administrative contracts celebrated under the Brazilian Administrative Law in which the remuneration is conditioned on the success of the hired party. The Court of Auditors of the State of Rio de Janeiro (“TCE/RJ”) case law, which, theoretically, would indicate the impossibility of variable remuneration. Favorable opinion regarding said contractual model, within specific conditions. Compatibility of the ad exitum remuneration with the Brazilian general bidding procedures law systematic. Compatible practice with contractual standards adopted by the Federal Government and different States. Federal Audit Court (“TCU”) case law, which recognizes the validity of the model. Fulfillment of the principle of administrative efficiency (Article 37, caput of the Constitution) and of the results-oriented Public Administration policy. The need for the Public Administration to observe and adopt cautions. The mandatory provision establishing the total contract value in case all of the stipulated objectives are accomplished, in accordance with Sections III and IV of Article 55 of Law 8.666/1993 and Article 16 of Complementary Law 101/2000 (Fiscal Responsibility Law). Mandatory evaluation of the contracting types in which said variable remuneration model would be admissible and beneficial to the Government so that the private party's additional gain would be compatible and proportional to the benefit earned by the Public Administration. Proposition regarding the development of studies for the issue of normative rulings and the subsequent development of administrative contracts standard drafts.