The Federal Government established an assessment process for currently operating sanitation services providers to demonstrate their adherence to the universalization targets provided by the legal framework for sanitation (Law n. 11.445/2020). Non-compliance entails contractual irregularity.

The Federal Government, through Decree n. 10.710/2021, established the methodology and procedure for currently operating sanitation service providers to demonstrate they possess the economic and financial capabilities required for the universalization of sanitation in Brazil, proving adherence to the new legal framework for sanitation (Law n. 11.445/2020).

As provided by article 11-B of the legal framework, sanitation service providers must provide 99% water supply coverage and 90% sewage coverage by the end of 2033. The new decree regulated article 10-B of the aforementioned legal framework, which requires current sanitation service provision contracts to demonstrate their economic and financial capabilities to implement the universalization targets.

In case current service providers fail the required conditions, their contracts will be considered irregular (article 20 of the new decree) and a new bidding process may be required. The decree is applicable to the listed sanitation service providers in article 1, while the economic and financial capabilities assessment procedure is established in article 4. The methodology for that assessment procedure is provided in articles 5 to 9.

The submission process for demonstrating compliance with the universalization targets is described in articles 10 to 14 – the process must be initiated until the end of 2021 and must be concluded by March 31, 2022. It also established a transition process for government-owned state service providers that seek privatization, which must be concluded by March 31, 2024 (article 22).