Companies contracting with RJ Government should join the Integrity Program

The Law 7753 was published on Oct-18-2017 establishing the Programa de Integridade (Integrity Program, in English) and requiring companies signing contract, consortium agreement, concession or public-private partnership with direct, indirect, and basic public administration from State of Rio de Janeiro to join the compliance rules making it up.

The requirement is for contracts whose amounts limits are greater than the competition bidding mode, of which BRL 1,500,000.00, for works and engineering services, and BRL 650,000.00, for purchases and services, even in electronic trading, and the contract term is equal to or higher than one hundred eighty days, regardless the organization or corporate model the contractor adopts.

The program is a set of mechanisms and internal integrity procedures, auditing and encouraging whistleblowing and effective deployment of ethics and conduct, policies and guidelines codes in order to detect and remedy deviations, fraud, irregularities and illegal acts committed against the State of Rio de Janeiro public administration.

Deadline

The deployment of Integrity Program will occur within one hundred eighty (180) days from the agreement date. The incurred costs/expenses will run under the contracted company responsibility, and its compensation is not under contracting agency responsibility.

Penalties

When there are penalties, the contractor that fails to comply with requirements in Law 7753 may suffer application of two-tenths percent (0.02%) of penalty, per day, calculated on contract value. The amount corresponding to the sum of basic amounts of default penalties will be limited to ten percent (10%) of contract amount.

The compliance with deployment requirement will cease the penalties, but will not result in compensation of what was already paid.

Note that failure to comply with the requirement during the contract period will result in impossibility of agreement between the company and State of Rio de Janeiro until settle its situation.

Duration

The law will be in force as of Nov-17-2017. Thus, companies that negotiate with State of Rio de Janeiro should be prepared for the new requirements, not forgetting one hundred eighty (180) days period from the contract for adjustment to the program.