CHAPTER 15

GOVERNMENT PROCUREMENT

Article 15.1: Definitions

For the purposes of this Chapter:

build-operate-transfer contract and public works concession contract means a contractual arrangement the primary purpose of which is to provide for the construction or rehabilitation of physical infrastructure, plants, buildings, facilities or other government-owned works and under which, as consideration for a supplier’s execution of a contractual arrangement, a procuring entity grants to the supplier, for a specified period of time, temporary ownership or a right to control and operate, and demand payment for the use of those works for the duration of the contract;

commercial goods or services means goods or services of a type generally sold or offered for sale in the commercial marketplace to, and customarily purchased by, non-governmental buyers for non-governmental purposes;

in writing or written means any worded or numbered expression that can be read, reproduced and may be later communicated.  It may include electronically transmitted and stored information;

limited tendering means a procurement method whereby the procuring entity contacts a supplier or suppliers of its choice;

multi-use list means a list of suppliers that a procuring entity has determined satisfy the conditions for participation in that list, and that the procuring entity intends to use more than once;

notice of intended procurement means a notice published by a procuring entity inviting interested suppliers to submit a request for participation, a tender or both;

offset means any condition or undertaking that requires the use of domestic content, a domestic supplier, the licensing of technology, technology transfer, investment, counter-trade or similar action to encourage local development or to improve a Party’s balance of payments accounts;

open tendering means a procurement method whereby all interested suppliers may submit a tender;

procuring entity means an entity listed in Annex 15-A;

publish means to disseminate information through paper or electronic means that is distributed widely and is readily accessible to the general public;

qualified supplier means a supplier that a procuring entity recognises as having satisfied the conditions for participation;

selective tendering means a procurement method whereby the procuring entity invites only qualified suppliers to submit a tender;

services includes construction services, unless otherwise specified;

supplier means a person or group of persons that provides or could provide a good or service to a procuring entity; and

technical specification means a tendering requirement that: (a)       sets out the characteristics of:

(i)        goods  to  be  procured,  including  quality,  performance, safety and dimensions, or the processes and methods for their production; or

 (ii)       services to be procured, or the processes or methods for their provision, including any applicable administrative provisions; or

 (b)       addresses terminology, symbols, packaging, marking or labelling requirements, as they apply to a good or service.

Article 15.2: Scope

Application of Chapter

1.         This Chapter applies to any measure regarding covered procurement.

2.         For the purposes of this Chapter, covered procurement means government procurement:

 (a)       of a good, service or any combination thereof as specified in each

Party’s Schedule to Annex 15-A;

 (b)       by any contractual means, including: purchase; rental or lease, with or without an option to buy; build-operate-transfer contracts and public works concessions contracts;

(c)       for which the value, as estimated in accordance with paragraphs 8 and  9,  equals  or  exceeds  the  relevant  threshold  specified  in  a Party’s Schedule to Annex 15-A, at the time of publication of a notice of intended procurement;

 (d)       by a procuring entity; and

 (e)       that   is   not   otherwise   excluded   from   coverage   under   this

Agreement.

Activities Not Covered                                                   

3.         Unless  otherwise provided  in  a Party’s  Schedule to  Annex  15-A,  this

Chapter does not apply to:

 (a)       the  acquisition  or  rental  of  land,  existing  buildings  or  other immovable property or the rights thereon;

 (b)       non-contractual agreements or any form of assistance that a Party, including its procuring entities, provides, including cooperative agreements, grants, loans, equity infusions, guarantees, subsidies, fiscal incentives and sponsorship arrangements;

 (c)       the  procurement  or  acquisition  of:  fiscal  agency  or  depository services; liquidation and management services for regulated financial institutions; or services related to the sale, redemption and distribution of public debt, including loans and government bonds, notes and other securities;

 (d)       public employment contracts; (e)       procurement:

(i)     conducted  for  the  specific  purpose  of  providing international assistance, including development aid;

 (ii)     funded by an international organisation or foreign or international grants, loans or other assistance to which procurement procedures or conditions of the international organisation   or   donor   apply.      If   the   procedures   or conditions of the international organisation or donor do not restrict the participation of suppliers then the procurement shall be subject to Article 15.4.1 (General Principles); or

 (iii)     conducted under the particular procedure or condition of an international agreement relating to the stationing of troops or  relating  to  the  joint  implementation  by the  signatory

countries of a project; and

 (f)        procurement of a good or service outside the territory of the Party of the procuring entity, for consumption outside the territory of that Party.

Schedules

4.         Each  Party shall  specify  the  following  information  in  its  Schedule  to

Annex 15-A:

 (a)       in Section A, the central government entities whose procurement is covered by this Chapter;

 (b)       in   Section   B,   the   sub-central   government   entities   whose procurement is covered by this Chapter;

 (c)       in Section C, other entities whose procurement is covered by this

Chapter;

 (d)       in Section D, the goods covered by this Chapter;

 (e)       in Section E, the services, other than construction services, covered by this Chapter;

 (f)        in Section F, the construction services covered by this Chapter; (g)       in Section G, any General Notes;

(h)       in Section H, the applicable Threshold Adjustment Formula;

 (i)        in Section I, the publication information required under Article

15.6.2 (Publication of Procurement Information); and

 (j)        in Section J, any transitional measures in accordance with Article

15.5 (Transitional Measures).

Compliance

5.         Each Party shall ensure that its procuring entities comply with this Chapter in conducting covered procurements.

6.         No procuring entity shall prepare or design a procurement, or otherwise structure or divide a procurement into separate procurements in any stage of the procurement, or use a particular method to estimate the value of a procurement, in order to avoid the obligations of this Chapter.

7.         Nothing in this Chapter shall be construed to prevent a Party, including its procuring entities, from developing new procurement policies, procedures or contractual means, provided that they are not inconsistent with this Chapter.

Valuation

8.         In estimating the value of a procurement for the purposes of ascertaining whether it is a covered procurement, a procuring entity shall include the estimated maximum total value of the procurement over its entire duration, taking into account:

 (a)       all   forms   of   remuneration,   including   any   premium,   fee, commission, interest or other revenue stream that may be provided for under the contract;

 (b)       the value of any option clause; and

 (c)       any contract awarded at the same time or over a given period to one or more suppliers under the same procurement.

9.         If the total estimated maximum value of a procurement over its entire duration is not known, the procurement shall be deemed a covered procurement, unless otherwise excluded under this Agreement.

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