Public Procurement as an Instrument of Economic Policy: What Brazil Can Learn from the United States

How U.S. federal procurement shapes markets, drives innovation, and offers key insights for strengthening Brazil’s institutional and economic framework

ORLANDO, FL, UNITED STATES, May 5, 2026 /EINPresswire.com/ -- Public procurement in Brazil has traditionally been guided by principles such as legality, equality, competitiveness, and strict oversight. While these elements remain essential to ensuring transparency and fairness, they are no longer sufficient to explain—nor to guide—the role of the State in a modern economic environment. In international practice, particularly in the United States, public procurement has evolved from a primarily operational mechanism into a strategic tool used to shape markets, foster innovation, and implement broader public policies. This shift reflects a broader understanding of the State not only as a buyer, but as an active economic agent.

In the United States, federal procurement—amounting to approximately $650 to $750 billion annually—is deliberately used to influence economic outcomes and guide market behavior. Rather than focusing solely on acquiring goods and services, it plays a central role in promoting domestic industry, strengthening supply chains, and encouraging technological development. Policies such as domestic preference programs and targeted investments in key sectors illustrate how procurement is used to support economic priorities. In addition, approximately 23% of federal contracts are reserved for small businesses, creating a structured mechanism for economic inclusion and diversification.

This approach expands the traditional concept of the “most advantageous proposal.” Instead of being limited to price and technical compliance, procurement decisions incorporate broader economic and strategic considerations, including innovation, long-term efficiency, and alignment with public policy objectives. As a result, procurement is no longer merely an administrative process, but an instrument capable of generating systemic economic impact.

Brazil has taken an important step in this direction with the enactment of Law No. 14,133/2021. The new legal framework expressly incorporates objectives such as sustainable development, innovation, and the promotion of public policies. It also introduces mechanisms aligned with international practices, including preference margins, sustainability criteria, the use of competitive dialogue, and a stronger emphasis on planning. From a regulatory perspective, this represents a clear shift toward a more strategic model of public procurement.

However, despite this progress, implementation remains a significant challenge. There is still a considerable gap between what the legal framework allows and what public institutions are able to execute in practice. In many cases, procurement processes continue to be conducted in a risk-averse and highly procedural manner, limiting their effectiveness as tools for economic transformation.

Three main factors help explain this limitation. First, a formalistic oversight culture tends to prioritize procedural compliance over substantive outcomes, discouraging innovative or strategic decision-making. Second, legal uncertainty persists, as there are still no fully consolidated parameters defining how procurement can be legitimately used as an instrument of public policy. This creates a high-risk environment for public managers. Third, institutional capacity remains uneven across public administration, with varying levels of technical expertise, planning capability, and market understanding.

These constraints have direct practical consequences. Public managers often avoid innovative approaches, companies face regulatory unpredictability, and the broader economic potential of procurement remains underutilized. As a result, procurement continues to operate below its strategic capacity, particularly when compared to more mature systems.

For Brazil, the challenge is not to replicate the U.S. model, but to adapt its underlying principles to local institutional realities. The effectiveness of strategic procurement depends on legal certainty, institutional coordination, and a balanced relationship between control and flexibility. Without these elements, the expansion of discretionary decision-making may lead to inefficiencies or unintended distortions.

If properly implemented, public procurement can become a powerful instrument of economic policy, capable of driving innovation, strengthening markets, and promoting sustainable development. Otherwise, Brazil risks maintaining a system that is modern in law but limited in practice.

About the Author

Fabio Ferreira Menezes is a legal professional specializing in public procurement and government contracts, with over 20 years of experience advising private companies and public institutions on bidding processes, regulatory compliance, and strategic contracting. Throughout his career, he has developed a strong focus on translating complex legal frameworks into practical and results-oriented solutions, particularly in highly regulated and competitive environments. His work reflects consistent engagement with procurement processes and public sector dynamics, contributing to more efficient, compliant, and strategically aligned contracting practices.

FABIO FERREIRA MENEZES
F2MNZ BUSINESS CONSULTING LLC
ffm.adv@hotmail.com

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