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Act), which structures the PPP as a new form of concession, which are substantially more dynamicwhen compared with those provided in the Bidding Act and Public Service Concession and PermissionActs.The PPP Act innovated with respect to guarantees and other provisions. The main aspects of this actare:a) Definition and ObjectA public-private partnership is construed as an administrative agreement with the purpose of:(i) the concession of public services or public works referred to in Law 8,987/95, when theynecessarily involve, in addition to the rate charged from the users, also pecuniary remuneration fromthe public partner to the private partner; it is the so-called Sponsored Concession;(ii) the rendering of services of which the Public Administration is the direct or indirect user, even wheninvolving the execution of works or supply and installation of property; it is the so-called AdministrativeConcession.The following PPPs are prohibited: (i) in amounts of less than R$ 20 million (equivalent toapproximately US$ 11.12 million), (ii) whose service rendering term is less than 5 years or (iii) whenintended solely for the supply of labor, the supply and installation of equipment or the execution ofpublic works.The following guidelines shall be observed in the contracting of PPPs: (i) efficiency; (ii) respect of theinterests and rights of the end users of the services and of the private entities in charge of theirexecution; (iii) non-delegability of the regulation and jurisdictional functions, of the exercise of policingpower and of other activities that are exclusive to the State; (iv) tax liability; (v) transparency; (vi)objective sharing of risks between the parties; (vii) financial sustainability and social-economicadvantages of the partnership project.b) AgreementsIn addition to the essential clauses set forth in Law 8,987/95, PPP agreements shall also determine:(i) a validity term that is compatible with the amortization of the investments made, which shall not beless than 5 years or more than 35; this provision solved the problem of the term established in thebidding act, which cannot exceed 5 years;66