Electronic reverse auctions step by step: from notice to signed contract

What happens in each phase of a reverse auction, what you need to do at each one and where the deadlines are that knock out anyone who gets distracted. Open mode, closed mode, negotiation, qualification and appeals.

Published Aug 25, 2026 · Updated Oct 23, 2026 · Busca Licitações Team · 11 min read

This text was written for companies registered in Brazil. Foreign suppliers should also read how foreign companies can bid in Brazilian public tenders.

The electronic reverse auction (pregão eletrônico) is the most widely used procurement method in Brazil and accounts for most of the tenders open on any given business day. It is used to buy common goods and services — those whose quality standard can be described objectively in the tender notice (edital), which covers almost everything the government buys on a regular basis.

If you understand the sequence of phases, you can take part with far more confidence, because you know what comes next and what needs to be ready at each point. This guide walks through the entire reverse auction, in the order it happens, pointing out the deadlines that tend to eliminate inattentive bidders.

Phase 1 — Publication of the tender notice

Everything starts with publication on the PNCP (Brazil's National Public Procurement Portal), which has been mandatory since Law 14,133/2021 (Brazil's Public Procurement Law). The tender notice is made available together with its annexes: terms of reference, item spreadsheet, declaration templates and draft contract.

Between publication and the opening of bids there is a legal minimum period — as a rule, eight business days for common goods and services, extended depending on the subject matter and the award criterion. This is your time to read, calculate and gather documents. It sounds like a lot, but it isn't: once you take out the weekend and the company's day-to-day routine, only a few working hours are left.

What to do in this phase: download the tender notice and its annexes, read the terms of reference to check whether the specification matches what you supply, go through the list of items and their estimated unit values, check the qualification (habilitação) requirements and calculate your price. If anything is ambiguous or restrictive, now is the time to request clarification or file a challenge.

Phase 2 — Clarifications and challenges

Anyone can request clarification on an unclear point in the tender notice or file a challenge to it (impugnação) on grounds of illegality. The deadline is usually up to three business days before the opening date, and the request is free of charge, filed through the system or by the email address given in the notice.

It isn't a fight: requesting clarification is routine and settles specification questions that, if left open, lead to inconsistent bids and disqualification. A challenge comes in when there is a defect — a specification that describes a single brand without accepting an equivalent, a technical capacity certificate (atestado de capacidade técnica) requirement demanding a quantity close to the total being tendered, a delivery deadline that is out of line with the market. We cover this in detail in challenges and requests for clarification.

The agency's answer becomes part of the tender notice and applies to everyone. If a challenge is upheld and changes how bids must be put together, the deadline is reopened.

Phase 3 — Submitting your proposal

You enter your proposal in the system by the deadline date and time. It remains confidential until the opening — no one, not even the auctioneer (pregoeiro), can see the prices beforehand.

Three precautions decide the fate of your proposal. First, the item description: state the brand, model and features as required, and don't copy the text of the tender notice without checking it. Second, the mandatory attachments: catalog, technical data sheet and cost breakdown spreadsheet, when requested. Third, the system declarations: status as a micro or small business (ME/EPP), acknowledgment of the conditions, independent preparation of the proposal.

Submit with time to spare. Systems slow down in the final minutes, and the cutoff has zero tolerance: at 09:00:01 on a deadline that ended at 09:00, the proposal will not go through.

Phase 4 — Opening and ranking

At the scheduled time, the auctioneer opens the proposals and checks whether they meet the specification. Proposals offering a non-matching item, missing a mandatory attachment or priced above the estimated value are disqualified before the bidding begins. The rest move on to the bidding phase.

Disqualification over small details is common at this stage: a model that is no longer in the manufacturer's catalog, a specification below the minimum, the wrong unit of measure (a box of 50 when the notice asked for a box of 100). Rereading your own proposal before submitting it prevents almost all of these.

Phase 5 — The bidding phase

This is where the auction picks up pace. The tender notice sets the bidding mode, and each one calls for a different strategy.

Open mode

The most common. The phase lasts ten minutes and is automatically extended whenever a bid is placed in the last two minutes, restarting the clock. A hotly contested auction can last more than an hour. Bids are public, but companies are identified only by a code — no one knows who is on the other side.

Open-then-closed mode

There is a phase of public bidding and, at the end, a closed round among the top-ranked bidders, who each submit one last confidential bid. This reduces the "penny auction" effect and rewards those who calculated their floor well, because there is no way to react to a competitor in the final round.

Closed-then-open mode

It starts with sealed proposals, and then the best-ranked bidders compete in open bidding. Less frequent, but it shows up in more complex procurements.

The discipline that works

Have your minimum price calculated in advance and in plain sight. Don't chase your competitors: their costs may be different from yours. Bid in meaningful steps, not cent by cent. And if you are an ME, EPP or individual microentrepreneur (MEI), remember the tie preference (empate ficto): if your bid is no more than 5% above the lowest bid from a larger company, the system calls on you to beat it. The math that sets your floor is in how to price your bid when selling to the government.

Phase 6 — Negotiation

Once bidding closes, the auctioneer calls the first-ranked bidder and negotiates a further reduction. This is provided for by law and happens in virtually every reverse auction.

You can accept or decline. Declining does not eliminate your bid — the auctioneer simply records it and moves on. Having your floor defined lets you answer with confidence: "the price offered is the limit of my proposal." Those who haven't done the math accept on reflex and discover the loss later.

Phase 7 — Acceptance and qualification

Once the price is accepted, the auctioneer asks for the proposal adjusted to the final price and the qualification documents, with a short deadline — often two hours, sometimes one business day. That's why your document folder needs to be ready beforehand: there's no way to issue certificates, ask your accountant for a balance sheet and hunt down capacity certificates in that window.

The agency reviews only the winner's documents — this is known as the inversion of phases. If the winner fails qualification, the auctioneer calls the second-ranked bidder, and so on. The list of what can be required is in qualification documents.

If you are an ME, EPP or MEI and have a pending tax issue, submit the document anyway, restriction and all: Complementary Law 123/2006 (Small Business Statute) guarantees a period to regularize your situation after you are declared the winner — but only for those who submitted it.

Phase 8 — Appeal

Once the winner is declared, a window opens to state your intention to appeal, right there in the session and within a few minutes. Anyone who doesn't state it loses the right, even if they are in the right. Once the intention has been stated, deadlines start running for filing the grounds of appeal and for the other party's response.

Appealing is worthwhile when there is a concrete defect: wrongful disqualification, qualification of a company that did not meet a requirement, failure to follow the tender notice itself. A generic appeal only delays the process and wears down your relationship with the agency. The full procedure is in administrative appeals in public tenders.

Phase 9 — Award, ratification and contract

If there are no appeals, or once any appeals have been decided, the contract is awarded to the winner and the competent authority ratifies the result. Then comes the signing of the contract or the issuance of the commitment note (nota de empenho), as applicable, and the supply order that starts the delivery clock.

Under price registration, what you sign is the price registration record (ata de registro de preços): it locks in the price for up to twelve months, and the agency buys as needed. Winning the record doesn't mean invoicing right away — a topic covered in how price registration works.

Award criteria: it's not always the lowest price

Most reverse auctions use lowest price, but not all of them, and mixing up the criterion leads to poorly built proposals. The tender notice states which one applies, right in the first pages, and the strategy changes in each case.

Under lowest price per item, each item is competed for separately. This is the format most favorable to small, specialized companies: you compete only in what you know well and ignore the rest of the notice. Under lowest price per lot, items are grouped and the winner is whoever offers the lowest total for the group — which means supplying all the items in the lot, including the ones you don't carry. Before bidding on a lot, check it item by item: a single product you can't deliver makes the whole lot unworkable.

There is also highest discount, common for auto parts and for services with a reference price table: you offer a percentage off a public price table, and performance is measured against it. And there is technique and price, for procurements where the quality of the solution matters — here the technical score weighs as much as the price, and careful documentation is worth more than aggressive bidding.

Notice the practical effect: under lowest price per lot, your calculation has to account for the fact that you may have a good margin on some items and a thin one on others, and what matters is the result for the lot as a whole. Many companies lose money by looking only at the main item in the lot.

What happens when an auction fails or draws no bids

Two situations are worth their weight in gold for anyone who follows the market closely. An auction is deserted when no one submits a proposal, and failed when all proposals are disqualified or all bidders fail qualification.

In both cases, the agency still needs to make the purchase — and Law 14,133/2021 authorizes direct contracting through a direct award (dispensa de licitação) when the tender falls through, keeping the conditions of the tender notice. In practice, this means a new opportunity shows up quickly, often with a short deadline and minimal competition.

How to take advantage: follow the results of tenders in your line of business, not just the open ones. A failed reverse auction for office supplies at a nearby city government often turns into a direct award within a few days. Anyone who saw the original notice already has the specification studied and the price calculated — and gets there first.

Summary of deadlines

Frequently asked questions

Do I need to stay in front of the computer for the entire auction?

Yes, during the bidding phase. The automatic extensions make the end time unpredictable, and there is no way to hand your bidding over to a scheduler. Block out plenty of time: an auction scheduled for 9 a.m. may end at 11 a.m.

Can I take part in more than one reverse auction at the same time?

Technically yes, but it's not recommended if you're just starting out. Splitting your attention between two screens in extension time is a recipe for a wrong bid — and a submitted bid cannot be undone.

What happens if I win and can't deliver?

Administrative sanctions: a warning, a fine, debarment from bidding for up to three years within the government entity concerned and, in serious cases, a declaration of ineligibility. Beyond the direct loss, the record stays on file. See sanctions in public tenders.

Can I find out who the competitors are during the session?

Not during bidding — bidders are identified by code, precisely to prevent collusion. After ratification, everything becomes public: participants, bids and final prices.

Why did the system reject my bid?

Usually because it didn't respect the minimum interval between bids set in the tender notice, or because it was higher than your own previous bid. Each platform shows the rule on the auction screen; it's worth checking before the start.

How to practice without risk

Before bidding for real, watch two or three sessions as an observer — most platforms let you follow an auction in progress. You'll get a feel for the pace of bidding, how the extensions behave and the auctioneer's language, with no pressure at all.

Then, for your debut, pick a simple item with a low value and easy delivery, preferably in a direct award or in a reverse auction reserved for ME/EPP. See what's open right now in tenders with open deadlines and start with what your company already sells every day.

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