Brazilian government limits value of Microsoft contracts

The Brazilian government has started to set limits to prices that it will pay for technology services provided by Microsoft.

A list has been published by the Digital Government Secretariat (SGD) at the Ministry of Economy, with maximum prices that should be paid for any Microsoft offerings.

The new rules apply for all the 217 central government departments and bodies. Spending with Microsoft at the Brazilian government between 2012 and 2018 has reached 1 billion reais ($246 million) and the objective is to reduce that by at least 35 percent.

The approach should be replicated with other major technology providers that do business with the Brazilian government, which include IBM, Oracle, Red Hat and VMware.

According to the SGD, the main goal is to achieve savings, but also standardize and simplify the procurement process for central government.

The prices will be set either via agreements with the vendors, or unilaterally by the government. The amounts were defined according to the lowest price paid between 2017 and 2019 for each of the services listed.

According to the SDG, the other large suppliers will be called in to discuss their new prices for the government before the end of 2019.

This follows the approach adopted by other countries such as Australia, where limits to the value of IT contracts has been enforced since 2017. Contract lengths have also been shortened, with aims including the ability to bring in innovative technology and services earlier.

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