CADE investigates bid rigging in public works

On 10 December, the Administrative Council for Economic Defense (CADE) launched an administrative proceeding to investigate alleged antitrust violations in public procurements for engineering works and services conducted by Brazilian government bodies at federal, regional and local levels from 2016 to 2024.

The investigation results from an analysis done as part of the Cérebro Project, which identified, based on information from the Brazilian Court of Accounts (TCU), a group of companies with suspicious activity in procurements conducted by the Brazilian Department of Transport Infrastructure (DNIT) and the Company for Development of the São Francisco and Parnaíba Valleys (CODEVASF).

Subsequently, CADE launched the “Novo Rumo Operation” in the end of 2024 in partnership with the Office of the Comptroller General of Brazil (CGU) and the Brazilian Federal Highway Police (PRF).

The establishment of joint ventures, aimed at subcontracting competitors who acted in favour of the bid winner, through strategies such as bid rigging and bid suppression, are among the main measures identified for implementing the alleged cartel.

Consequently, CADE launched an administrative proceeding against 16 companies and 15 individuals. The highway engineering works and services market is characterised by the significant number of budgetary resources allocated to tendered works. Between 2021 and 2024, the procurements affected reached up to BRL 10 billion.

After the administrative proceeding is launched, the defendants are to be notified to file answers, specifying the evidence to be produced, and name up to three witnesses to contribute to the clarification of the case. 

If convicted, the companies may be fined up to 20% of their gross revenue. Individuals are subject to fines ranging from BRL 50,000 to BRL 2 billion.

According to data from OECD, cartels increase prices around 20% compared to prices in a competitive market, causing annual loses of billions to the State and consumers. In addition to being an administrative offence, cartel practices also qualify as criminal offence.

CADE's efforts to fight against bid rigging reinforce its commitment in promoting competition, and protecting the public interest, ensuring competitiveness in public procurements. Access Case no. 08700.013148/2025-95.