Is it possible to replace payment retention with alternative measures in contracts?
Posted: Sun Dec 22, 2024 5:31 am
The Federal Court of Auditors (TCU), in its role of monitoring public management, must use instruments capable of ensuring that the reimbursement of funds to the public treasury is fully implemented. In this regard, there has been much discussion about the TCU's authority to issue precautionary orders to suspend payments or any act related to administrative contracts.
From a reading of Article 71 of the Federal Constitution, it is not clear that the TCU has jurisdiction to provisionally determine the suspension of contracts or the withholding of payments. Law No. 8,443 of July 16, 1992 – the Organic Law of the TCU – specifically in the articles that deal with the Court's jurisdiction, also does not contain this provision. Furthermore, Article 71, § 1 of the Constitution determines that, in order to suspend contracts, the act must be issued directly by the National Congress, thereby eliminating the jurisdiction of the TCU.
The issue was settled, however, by the Federal Supreme Court (STF) in Writ of Mandamus No. 24510/DF, under the reporting of Justice Ellen Gracie. In the judgment1, the Court ruled that the TCU enjoys a “general power of caution”, a power implicit in the Court’s attributions set forth in Article 71 of the Federal Constitution. For the STF, the power to issue various precautionary email database australia measures is an indispensable instrument for the TCU’s mission of control, especially when they are intended to prevent the consummation or irreversibility of losses to the public treasury.
Although the STF has already attested to the power of caution, it is certain that the retention of resources should be used as a last resort, when there is no other way to offer the Administration any guarantee.
In this sense, in a judgment of appeal2 against a precautionary measure that determined the retention of payments, the ministers admitted that such measure be replaced by the provision of guarantees in one of the modalities provided for in art. 56, § 1, of Law 8,666/1993.
Among the guarantees included in the article, the following are noted: cash or public debt bonds, insurance guarantee or bank guarantee. The Court, however, makes it clear that the adoption of the alternative measure in that case does not revoke the precautionary measure of withholding payments, but merely suspends its effectiveness while the alternative measure is in force. With this, the company can continue its activities while discussing the merits of the lawsuit.
The ministers emphasized that the guarantee provided must cover the total amount of the overpricing under discussion in the proceedings and contain clauses that establish a monthly adjustment criterion and a validity period linked to the final judgment that may be handed down. The retention of payments, however, should only be suspended after the guarantee provided has been accepted, which depends on prior examination of the contractual conditions specified in the respective instrument.
For control purposes, after the guarantee is accepted, the supporting documents must be immediately forwarded to the TCU so that the Court can monitor the contract.
From a reading of Article 71 of the Federal Constitution, it is not clear that the TCU has jurisdiction to provisionally determine the suspension of contracts or the withholding of payments. Law No. 8,443 of July 16, 1992 – the Organic Law of the TCU – specifically in the articles that deal with the Court's jurisdiction, also does not contain this provision. Furthermore, Article 71, § 1 of the Constitution determines that, in order to suspend contracts, the act must be issued directly by the National Congress, thereby eliminating the jurisdiction of the TCU.
The issue was settled, however, by the Federal Supreme Court (STF) in Writ of Mandamus No. 24510/DF, under the reporting of Justice Ellen Gracie. In the judgment1, the Court ruled that the TCU enjoys a “general power of caution”, a power implicit in the Court’s attributions set forth in Article 71 of the Federal Constitution. For the STF, the power to issue various precautionary email database australia measures is an indispensable instrument for the TCU’s mission of control, especially when they are intended to prevent the consummation or irreversibility of losses to the public treasury.
Although the STF has already attested to the power of caution, it is certain that the retention of resources should be used as a last resort, when there is no other way to offer the Administration any guarantee.
In this sense, in a judgment of appeal2 against a precautionary measure that determined the retention of payments, the ministers admitted that such measure be replaced by the provision of guarantees in one of the modalities provided for in art. 56, § 1, of Law 8,666/1993.
Among the guarantees included in the article, the following are noted: cash or public debt bonds, insurance guarantee or bank guarantee. The Court, however, makes it clear that the adoption of the alternative measure in that case does not revoke the precautionary measure of withholding payments, but merely suspends its effectiveness while the alternative measure is in force. With this, the company can continue its activities while discussing the merits of the lawsuit.
The ministers emphasized that the guarantee provided must cover the total amount of the overpricing under discussion in the proceedings and contain clauses that establish a monthly adjustment criterion and a validity period linked to the final judgment that may be handed down. The retention of payments, however, should only be suspended after the guarantee provided has been accepted, which depends on prior examination of the contractual conditions specified in the respective instrument.
For control purposes, after the guarantee is accepted, the supporting documents must be immediately forwarded to the TCU so that the Court can monitor the contract.