TCU Recommends the Use of Dispute Boards in Public Works Contracts

Published on: November 4, 2025
Free Translation

1. The Arbitration Committee of OAB/MG issues its opinion on the grounds of Decision No. 2191/2025/Plenary of the TCU, reported by Minister Antonio Anastasia, in which the Court recommended that the Companhia de Transportes do Estado da Bahia (CTB), in a project concerning the expansion of the Salvador/BA Subway, incorporate in the bid notice, in the contract, or in future procurements, the use of a Dispute Board (“DB”), in its permanent and binding modality (“DAAB”).

2. A Dispute Board is an extrajudicial mechanism aimed at preventing and resolving disputes, in which a committee composed of specialized and independent professionals periodically monitors contract performance. Its purpose is to avoid work stoppages, reduce litigation costs, and offer specialized and swift solutions, enabling timely delivery of the project and preserving the relationship between the parties.

3. The Dispute Board is compatible with contemporary Administrative Law, since, notably due to the advantages listed above, it ensures the public interest and the proper use of public resources.

4. In this respect, one may say that the DB, especially in its DAAB modality, is an instrument that promotes greater efficiency in contractual outcomes. Indeed, considering that one of the main advantages of implementing a DAAB is the reduction in the likelihood that technical disagreements escalate into disputes capable of halting the project or generating significant additional costs, implementing the mechanism aligns with the principles of efficiency and cost-effectiveness set forth in Article 31 of Law 13.303/2016 [1].

5. Moreover, the use of this method contributes to improving the structure of contractual governance, promoting benefits such as the prevention of disputes or their immediate resolution through a consensual mechanism, whose use is a legal obligation of the Public Administration. Thus, the DAAB is fully compatible with the pillars of the administrative legal regime.

6. The use of Dispute Boards in public contracts is repeatedly recommended for administrative contracts, as can be seen from regulatory provisions [2], especially Law 14.133/2021, Articles 151 to 154 [3], and from decisions issued by the TCU itself.

7. Under the terms of the TCU Decision under analysis, it is advisable that the DB model used be, preferably, the permanent and binding model (DAAB), which allows for the exploration of a unique characteristic: dispute prevention (“avoidance”), ensuring effectiveness in its performance. It is noted, however, that the “ad hoc” DB model also exists, used only in exceptional cases when a dispute arises.

8. Among the advantages of using the DAAB model, as highlighted in the recent TCU Decision, are: (i) increased likelihood that the project will be completed within the contracted time; (ii) significantly lower costs compared to frequent litigation in construction projects; (iii) high rate of immediate dispute resolution between the parties; (iv) speed in resolving disputes submitted to the DB; (v) improvement of the business environment; (vi) prevention of conflicts, avoiding project suspension; (vii) mitigation of the risk of “claim inflation” or frivolous or technically/juridically unfounded claims; and (viii) enhancement of contract management.

9. As an example, the Decision expressly states that the use of a DB promotes “greater effectiveness of investments” and “a more effective Public Administration,” which is corroborated by the requirement of its use, since 1995, in contracts financed by the World Bank. The acceptance of DBs in public contracts can also be seen in other TCU decisions [4].

10. It is emphasized, however, that the mechanism is an intra-contractual tool, without jurisdictional power, which remains the exclusive competence of the Judiciary or Arbitration. Nonetheless, in the First Conference on Prevention and Extrajudicial Resolution of Disputes by the Federal Justice Council (CJF) in 2016, the Judiciary not only recognized the method but referenced it in three Statements (Nos. 49, 76, and 80) [5], offering clarifications and recommending its use. In these statements, the CJF notes that the DB fits within the consensual methods of dispute resolution encouraged by the Brazilian Code of Civil Procedure.

11. The use of DBs is also timely and advisable given the public manager’s need to consider the consequences of public decisions, as required by Article 20 of the LINDB, particularly in complex works, mitigating the scenario evident since the creation of Fiscobras, with thousands of paralyzed projects (BRAZIL, 2016), which, notably in public works such as the Salvador Subway, would generate harmful effects on the population’s quality of life, urban mobility, tourism, and public finances.

12. Aiming to promote appropriate use of this dispute-resolution method, the Specialized Arbitration Unit of the Office of the Attorney General of the Union (NEA-AGU) [6] has announced a Public Consultation regarding the draft Ordinance regulating Dispute Prevention and Resolution Committees at the Federal level.

13. In conclusion, the TCU, appropriately and with the technical and legal rigor highlighted by the illustrious Reporting Minister Antonio Anastasia, recognized that the use of Dispute Boards in public infrastructure and construction contracts, in the DAAB modality, is not only legally possible but constitutes a good practice of contractual governance, preventing or reducing disputes, avoiding project stoppages, and safeguarding public funds. This understanding represents an evolution from more restrictive positions previously adopted, indicating that its use is recommendable even before any internal regulation on the matter, as long as it is provided for in the bid notice or contract.

Francisco Maia Neto (President of the Arbitration Committee of OAB/MG)
Renata Faria Silva Lima (Vice-President of the Committee, Rapporteur of the Technical Note)
Deborah Kelly Martins de Mello (Secretary-General of the Arbitration Committee of OAB/MG)
Rapporteur: Roberto Vasconcelos Novais
Drafting Committee: Danielle Ziade, Felipe Moraes, Murilo Melo Vale

[1] “Art. 31. The bidding procedures carried out and the contracts executed by state-owned companies and mixed-capital companies are intended to ensure the selection of the most advantageous proposal, including with regard to the life cycle of the object, and to prevent operations involving overpricing or overbilling. They must observe the principles of impartiality, morality, equality, publicity, efficiency, administrative probity, cost-effectiveness, sustainable national development, adherence to the bid notice, competitiveness, and objective judgment.”

[2] It is also worth noting the existence of municipal legislation regulating Dispute Boards, prior to the New Public Procurement Law, such as Law 16.873/2013 and Decree 60.067/2021 of the Municipality of São Paulo; Law 11.241/2020 of the Municipality of Belo Horizonte. These norms reflect international best practices, such as: (i) the choice between a reviewing, adjudicative, or hybrid model; (ii) formation by three specialists (usually with backgrounds in Engineering or Law); (iii) the need to observe the essential impartiality and independence of all Committee/Board members.

[3] One should mention the initiative of ANTT in convening public hearings and subsequently issuing Resolution 6.040/2024, which regulates the use of Dispute Boards in contracts governed by that Agency, in compliance with Decision 4.036/2020-TCU Plenary.

[4] Decisions 614/2025, 199/2025, 1,369/2025, 2,101/2024, 1,062/2024, 768/2024, 1,142/2023, among others.

[5] “Statement 49 – Dispute Resolution Boards (Dispute Boards) are a method of consensual dispute resolution, as provided in §3 of Art. 3 of the Brazilian Code of Civil Procedure;
Statement 76 – The decisions issued by a Dispute Resolution Board (Dispute Board), when the contracting parties have agreed to its mandatory adoption, bind the parties to comply with them until the Judiciary or the competent arbitral tribunal issues a new decision or confirms them, should the dissatisfied party seek such review;
Statement 80 – The use of Dispute Resolution Boards (Dispute Boards), through the inclusion of the corresponding contractual clause, is recommended for construction or infrastructure contracts, as a mechanism aimed at preventing disputes and reducing related costs, allowing the immediate resolution of conflicts arising during contract performance.”

[6] Available at: https://www.gov.br/agu/pt-br/comunicacao/noticias/agu-abre-consulta-publica-sobre-regulamentacao-de-comites-de-prevencao-e-solucao-de-disputas. Accessed on Nov. 3, 2025.
https://www.gov.br/participamaisbrasil/regulamentacao-dos-comites-de-prevencao-e-solucao-de-disputas. Accessed on Nov. 3, 2025.