What is an electronic reverse auction (pregão eletrônico) and how the bidding works

Brazil's most widely used procurement method, explained from the publication of the tender notice to the final bid — including open mode, closed mode and the tie preference for small businesses.

Updated Oct 23, 2026 · Busca Licitações

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 procurement method for buying common goods and services: those whose quality can be described objectively in the tender notice (edital), without subjective judgment. Paper, computers, fuel, security, cleaning, building maintenance — almost everything the government buys regularly fits here. It is Brazil's most frequent procurement method and accounts for most of the tenders open on any given day.

Why "electronic"

The whole session happens online, on a procurement platform. This widened competition — a company from Pernambuco can bid on a purchase in Paraná — and reduced the room for collusion among participants, since nobody knows who else is in the room. Law 14,133/2021 (Brazil's Public Procurement Law) made the electronic format the rule: to hold an in-person reverse auction, the agency must justify it in writing.

The phases, in order

1. Publication of the tender notice on the PNCP (Brazil's National Public Procurement Portal), at least eight business days before bids are opened (the period varies with the object and the award criterion).
2. Submission of bids through the system, by the deadline date and time. Bids stay confidential until opening.
3. Opening and ranking: the auctioneer (pregoeiro) checks whether bids meet the specification.
4. Bidding phase (fase de lances), where prices drop in open competition.
5. Negotiation with the top-ranked bidder, to push the price down further.
6. Qualification (habilitação): only the winner's documents are reviewed — which speeds everything up.
7. Appeals, if an intention to appeal was stated in the session.
8. Award and ratification (adjudicação and homologação), when the authority confirms the result.

Open, closed and combined modes

The open mode is the most common: bids are public (without identifying the companies) and the bidding lasts ten minutes, automatically extended whenever a bid comes in during the last two minutes. In practice, a tight contest can last an hour.

In the closed mode, each participant submits a single sealed bid and the best one wins. In the open-and-closed mode, public bidding is followed by a final sealed round among the top bidders — which reduces the "penny auction" effect.

Tie preference: the ME/EPP advantage

If a micro or small business (ME/EPP) is up to 5% above the lowest bid from a company that is not an ME/EPP, it has the right to beat that bid and win. This is the tie preference (empate ficto), and the system applies it automatically. It pays to declare your company size correctly when you register.

Award criteria

Lowest price is the most common, but not the only one. There are also highest discount (on a reference price list), best technique and price, and highest economic return. The tender notice says which one applies, and that completely changes your bidding strategy.

What usually goes wrong

Three things: a bid whose specification differs from the terms of reference, forgetting to attach a mandatory document, and emotional bidding. The system forgives none of them. Before entering the competition, have your calculated minimum price and your complete documentation at hand.

See the electronic reverse auctions open now and read the tender notice of one of them to follow this sequence in practice.