(ii) would cause significant inconvenience or substantial duplication of costs to the procuring entity;
(d) to the extent strictly necessary when, for reasons of extreme urgency (1) identified in the legal system of each Party, due to events that could not have been foreseen by the procuring entity, it is not possible to obtain the goods or services in a timely manner through competitive or selective tendering and the use of such procedures would result in serious prejudice to the entity or to the performance of its functions. For the purposes of this subparagraph, an entity's failure to plan for funds available within a specified period shall not constitute an unforeseen event;
(e) for goods purchased in a commodity market;
(f) where a procuring entity contracts for a prototype or a first good or service developed or created at its request in the course of and for a particular contract for research, experimentation, study or original development. The original development of such a good or service may include its production or supply in limited quantity for the purpose of incorporating the results of practical tests and of demonstrating that the service lends itself to large-scale production or supply in accordance with acceptable standards of quality, but may not include its large-scale production or supply for the purpose of determining its commercial viability or recovering research and development costs;
(g) for purchases made under exceptionally favourable conditions that only occur for a very short period of time for extraordinary reasons, such as those arising from liquidation, disposal, bankruptcy, but not for ordinary purchases from regular suppliers;
(h) when a contract is awarded to the winner of a design competition provided that:
(i) the competition has been organized in a manner consistent with the principles of this Chapter, in particular with respect to the publication of the notice of intended procurement, and
(ii) entrants are judged by an independent panel of judges for the purpose of awarding the design contract to the winner;
(i) when contracting additional construction services not included in the initial contract that have been necessary to complete the construction, provided that they do not exceed 50% of the initial contract;
(j) in the case of a contract for works, services or supplies corresponding to the performance or termination of a contract that was due to be performed by, be terminated or terminated early for non-performance by the contracting party or for other reasons;
(k) when a procuring entity is required to contract for consulting services that involve matters of a confidential nature, the disclosure of which could reasonably be expected to compromise confidential government information, cause economic instability, or otherwise be contrary to the public interest, or
(l) in contracts with professionals or entities considered, in their field of action, of notorious specialization, derived from the security and confidence derived from previous performance, studies, experience, publications, organization, equipment, technical personnel or other requirements related to their activities, which allow inferring that their work is essentially and indisputably the most adequate for the full satisfaction of the contract, provided that it is reasonably considered that there are no other suppliers that provide such security and confidence.
2. It should be noted that the grounds for direct contracting set out in this Article shall apply to the extent that they are provided for in the legal system of each Party and shall be applied in accordance with the provisions of those provisions.
3. The procuring entity shall prepare a written report, or administrative act, on each procurement contract awarded in accordance with paragraph 1. The report, or administrative act, shall contain the name of the procuring entity, the value and type of goods or services to be procured and an indication of the circumstances and conditions described in paragraph 1 that justify the use of direct procurement. That document shall be duly published or circulated by the entity concerned within a short period of time.
Article 12.17. Treatment of Offers
1. A procuring entity shall receive, open and process all tenders in accordance with methods that ensure fairness and impartiality in the procurement proceedings and shall treat tenders confidentially, at least until the tenders are opened.
2. A procuring entity shall not penalize a supplier whose tender is received after the time specified for the receipt of tenders if the delay is due solely to a cause attributable to the procuring entity.
3. The contracting entities may grant the possibility of correcting formal errors or omissions in the content of the bids, during the corresponding evaluation stage, without implying any modification to the substantive content of the bid. To this end, they must guarantee equality to the bidders in strict compliance with the provisions of the procurement documents, without the exercise of this power implying that it grants an advantage to any of the participants, and they must publish the requests for correction and their responses, so that all participants are aware of them.
Article 12.18. Award of Contracts
1. In order for a tender to be considered for award, it must be in writing and meet, at the time of opening, the essential requirements set out in the notices and procurement documents, and be from a supplier that is eligible to participate.
2. Unless an entity decides not to award a procurement contract in the public interest, the entity shall award the procurement contract to the supplier that has been determined by the entity to have the ability to perform the contract and that, on the basis of the evaluation criteria set out in the notices and procurement documents, has submitted the most advantageous tender or, where the sole determining factor is price, the lowest price.
3. In the event that a procuring entity receives a tender whose price is abnormally lower than the prices of the other tenders submitted, the entity may take measures to ensure that the supplier meets the conditions for participation and has the capacity to perform the terms of the contract.
4. A procuring entity shall not use options, terminate a procurement, or modify awarded contracts in a manner that circumvents the obligations of this Chapter.
5. The contracting agency may, in accordance with its national legislation, declare all bids void or reject all bids when appropriate and well-founded.
6. An entity shall require that a bid, in order to be considered for an award, must: (a) comply with the requirements set out in the tender documents, and (b) be submitted by a supplier that has satisfied the conditions for participation that the procuring entity has provided to all participating suppliers. Article 12.19: Transparency of Procurement Information 1. A procuring entity shall promptly publish its decisions on contract awards. Subject to Article 12.20, a procuring entity shall, on request, provide to suppliers whose tenders were not selected an explanation of the reasons why the entity did not select their tender, or the relative advantages of the successful supplier's tender.
2. A procuring entity shall, after the award of a procurement contract for a covered procurement, promptly publish in an electronic or written medium listed in Appendix 7 of Annex 12.1, a notice that includes at least the following information about the contract:
(a) a description of the goods or services contracted;
(b) the name and address of the contracting entity;
(c) the name of the awarded supplier;
(d) the value of the winning bid, or of the highest and lowest bids taken into account for the award of the contract;
(e) the date of the award, and
(f) the type of procurement method used and, where direct procurement was used in accordance with Article 12.16, a description of the circumstances justifying the use of restricted procurement.
3. Where the procuring entity publishes the notice only in an electronic medium, the information shall remain available for a reasonable period of time.
4. Each procuring entity shall maintain documentation, records and reports of procurement proceedings and contract awards relating to covered procurement for a period of at least three (3) years from the date of contract award, including documentation in cases of the procurement modality set out in Article 12.16 and data to ensure appropriate traceability of the conduct of covered procurement conducted by electronic means.
Article 12.20. Disclosure of Information
1. On request of another Party, a Party shall promptly provide any information necessary to determine whether a procurement was conducted fairly and impartially and in accordance with this Chapter, including information on the characteristics and relative advantages of the successful tender.
2. Where disclosure of such information might prejudice competition in future tenders, the Party receiving the information shall not disclose it to any supplier, except after consulting with and obtaining the consent of the Party that provided the information.
3. Notwithstanding any other provision of this Chapter, a Party, including its procuring entities, shall not provide information to a particular supplier that may prejudice fair competition between suppliers.
4. Nothing in this Chapter shall be construed to require a Party, including its procuring entities, authorities and review bodies, to disclose confidential information, if such disclosure would:
(a) impede the enforcement of laws;
(b) harm fair competition between suppliers;
(c) prejudice the legitimate commercial interests of individuals, including the protection of intellectual property, or
(d) otherwise be contrary to the public interest.
Article 12.21. Challenge Procedures
1. Each Party shall have a timely, effective, transparent and non-discriminatory method of administrative or judicial review in accordance with the principle of due process through which a supplier may challenge:
(a) a violation of this Chapter, or
(b) where a supplier does not have the right to directly challenge a breach of this Chapter under a Party's law, the failure to comply with measures taken by a Party to implement this Chapter arising in the context of a covered procurement in which the supplier has, or has had, an interest. The procedural rules for challenges shall be in writing and shall be publicly available.
2. In the event that a supplier submits, in the context of a covered procurement in which it has or has had an interest, a complaint of a breach or non-compliance referred to in paragraph 1, the procuring entity Party shall, if appropriate, encourage that entity and the supplier to seek a resolution of the complaint through consultations.
3. Each supplier shall be given sufficient time to prepare and submit an appeal, which in no case shall be less than ten (10) days from the time the supplier became aware of the basis for the challenge, or reasonably should have become aware of it.
4. Each Party shall establish or designate at least one impartial administrative or judicial authority that is independent of its procuring entities to receive and review a challenge from a supplier arising in the context of a covered procurement.
5. Where a body other than the authority referred to in paragraph 4 initially reviews a challenge, the Party shall ensure that the supplier may appeal the initial decision to an impartial administrative or judicial authority that is independent of the procuring entity whose procurement is the subject of the challenge.
6. Each Party shall ensure that a review body, other than a court, shall have its decisions subject to judicial review or have methods in place that provide that:
(a) the procuring entity shall respond in writing to the challenge and disclose all relevant documents to the review body;
(b) participants in the proceedings have the right to be heard before the review body decides on the challenge;
(c) participants have the right to be represented and accompanied;
(d) participants have access to all performances;
(e) participants have the right to request that the proceedings be open to the public and that witnesses may be present; and
(f) the review body shall make its decisions or recommendations in writing and in a timely manner, including an explanation of the basis for each decision or recommendation.
7. Each Party shall adopt or maintain methods, in accordance with its respective legal system, that provide for:
(a) rapid interim measures to preserve the supplier's ability to participate in the procurement. Such interim measures may have the effect of suspending the procurement proceedings. The methods may provide that the prevailing adverse consequences for the interests concerned, including the public interest, may be taken into account in deciding whether to apply such measures. Good cause shall be stated in writing for not taking such measures, and
(b) where the review body has found a breach of this Chapter or of the non-compliance referred to in paragraph 1, corrective measures or compensation for loss or damage suffered, which may be limited to the costs of preparing the tender or the costs related to the challenge, or both.
Article 12.22. Cooperation
1. The Parties recognize the importance of cooperation, with the objective of achieving a better understanding of their respective public procurement systems, as well as better access to their respective markets, in particular for Micro, Small and Medium Enterprises (hereinafter referred to as "MSMEs"), as well as the Actors of the Popular and Solidarity Economy (hereinafter referred to as "AEP YS"), acting as suppliers.
2. The Parties agree to use their best efforts to cooperate with respect to:
(a) exchange of experiences and information on topics such as regulatory framework, best practices and statistics, among others;
(b) use and development of electronic means of information in public procurement systems,
(c) exchange of experiences and information related to public procurement;
(d) institutional strengthening for compliance with the provisions of this Chapter, including training for public officials, and
(e) training and technical assistance to suppliers on access to the public procurement market.
Article 12.23. Facilitation of the Participation of Micro, Small and Medium-sized Enterprises and of the Actors of the Popular and Solidarity Economy
1. The Parties recognize the important contribution that MSMEs and SSMEs can make to economic growth and employment, and the importance of facilitating their participation in government procurement.
2. The Parties also recognize the importance of business partnerships between suppliers of the Parties and in particular MSMEs and SSMEs, including joint participation in procurement procedures.
3. Where a Party maintains measures that provide preferential treatment to its MSMEs and SSMEs vis-a-vis MSMEs and SSMEs of other Parties, the Party shall make efforts to reduce such measures.
4. Where a Party maintains measures that provide preferential treatment for its MSMEs and SSMEs, it shall ensure that such measures, including eligibility criteria, are objective and transparent.
5. The Parties may:
(a) provide information regarding their measures used to assist, promote, encourage or facilitate the participation of MSMEs and SSMEs in government procurement, and
(b) cooperate in the development of mechanisms to provide information to MSMESs and SSMEs on the means to participate in government procurement covered by this Chapter.
6. In order to facilitate the participation of MSMEs and SSMEs in covered procurement, each Party shall, to the extent possible:
(a) provide information related to public procurement, including a definition of MSMESs and SSMEs on an electronic portal;
(b) ensure that procurement documents are available free of charge;
(c) identify MSMEs and SSMEs interested in becoming business partners of other enterprises in the territory of the other Party;
(d) develop databases on MSMEs and SSMEs in its territory, for use by entities of the other Party, and
(e) carry out other activities aimed at facilitating the participation of MSMEs and SSMEs in public procurement covered by this Chapter.
Article 12.24. Public Procurement Committee
1. The Parties hereby establish a Committee on Government Procurement (hereinafter referred to as the "Committee"), composed of representatives of each Party.
2. The functions of the Committee shall include:
(a) monitor and evaluate the implementation and administration of this Chapter, including its use, and recommend appropriate activities to the Commission;
(b) report to the Commission on the implementation and administration of this Chapter, as appropriate;
(c) follow up on cooperative activities;
(d) consider conducting additional negotiations with the objective of expanding the coverage of this Chapter, notwithstanding Article 12.26, and
(e) to deal with any other matter related to this Chapter.
3. Unless otherwise agreed by the Parties, the Committee shall meet at least once a year, at the time, place and according to the agenda previously agreed by the Parties, either in person or virtually.
Article 12. Modifications and Amendments to Cover
1. The Parties may modify their lists contained in Annex 12.1, provided that:
(a) notify the other Party in writing;
(b) include in the notification a proposal for appropriate compensatory adjustments to the other Party to maintain a level of coverage comparable to that existing prior to the modification, except as provided in paragraphs 2 and 3; and
(c) the other Party does not object in writing within forty-five (45) days of such notification.
2. Parties may make rectifications of a purely formal nature to their lists contained in Annex 12.1, such as:
(a) a change in the name of an entity listed in Annex 12.1;
(b) merger of two or more entities listed in Annex 12.1, and
(c) the separation of an entity listed in Schedule 12.1 into two or more entities that are aggregated from Schedule 12.1,
provided that the other Party is notified in writing and does not object in writing within forty-five (45) days of the notification. The Party making such rectification shall not be obliged to provide compensatory adjustments.
3. A Party need not provide compensatory adjustments in circumstances where the proposed modification to its Schedule to Annex 12.1 covers an entity in respect of which the Party has effectively eliminated its control or influence. Where the Parties do not agree that such governmental control or influence has been effectively eliminated, the objecting Party may request additional information or consultations with a view to clarifying the nature of any governmental control or influence, and reach agreement on the entity's continuation or removal from coverage in accordance with this Chapter.
4. Where the Parties have agreed to a modification or rectification of a purely formal nature to their schedules contained in Annex 12.1, including where no Party has objected within forty-five (45) days in accordance with paragraphs 1 and 2, the Commission shall take a decision to that effect.
Article 12.26. Future Negotiations
In the event that a Party offers in the future to a non-Party additional benefits in relation to its respective coverage of access to government procurement markets under this Chapter, it shall agree, on request of the other Party, to enter into negotiations with a view to extending coverage on a reciprocal and mutually advantageous basis. Reciprocity may be understood to extend beyond the coverage of this Chapter.
Chapter 13. COMPETITION POLICY
Article 13.1. Definitions
For purposes of this Chapter:
enforcement proceedings means administrative proceedings or judicial proceedings following an investigation into an alleged violation of competition laws.
Article 13.2. Objectives
Recognizing that anti-competitive business practices have the potential to distort the proper functioning of markets and undermine the benefits of trade liberalization, the Parties shall seek to adopt appropriate measures to prohibit such conduct, implement policies promoting competition and cooperate on matters covered by this Chapter to help secure the benefits of this Agreement.
Article 13.3. Competition Law and Authorities and Anti-Competitive Business Practices
1. Each Party shall adopt or maintain competition laws that prohibit anti-competitive business practices, with the objective of fostering competition to promote economic efficiency and consumer welfare, and shall take appropriate action with respect to such practices.
2. Each Party shall ensure that the measures it adopts or maintains to prohibit anticompetitive business practices, and the enforcement actions it takes pursuant to those measures, are consistent with the principles of transparency, non-discrimination and due process.
3. Each Party shall endeavour to apply its competition laws to all commercial activities in its territory. This does not preclude a Party from applying its competition laws in its territory to commercial activities conducted outside its borders that have anticompetitive effects within its jurisdiction.
4. Each Party may provide for certain exemptions and exclusions from the application of its competition laws, provided that such exemptions and exclusions are transparent and based on public policy or public interest grounds.
5. Each Party shall maintain an authority or authorities responsible for the enforcement of its competition laws (hereinafter referred to as "competition authorities").
6. Each Party shall ensure that its competition authority or authorities apply its competition laws in accordance with the objectives set out in this Chapter, and shall not discriminate on the basis of nationality.
7. Each Party shall ensure the independent decision-making of its competition authority or authorities with respect to the application of its competition laws.
Article 13.4. Procedural Fairness In the Application of the Competition Act
1, Each Party shall adopt or maintain written procedures pursuant to which investigations relating to its competition laws shall be conducted. If such investigations are not time-bound, the competition authorities of each Party shall endeavour to conduct their investigations within a reasonable period of time.
2. Each Party shall ensure that, before imposing sanctions or remedial measures against a person for violating its competition laws, that person is given information about the competition concerns of the competition authority, including identification of the alleged violations of specific competition laws and the associated potential maximum sanctions, if not publicly available, and a reasonable opportunity to be represented by counsel.
3. Each Party shall ensure that, before imposing sanctions or remedial measures against a person for violating its competition laws, the person is given a reasonable opportunity to be heard and to present evidence, except that provision may be made for the person to be heard and to present evidence within a reasonable time after an interim sanction or remedial measure is imposed.
4. Each Party shall provide a person who is subject to the imposition of a sanction or remedial measure for a violation of its competition laws with an opportunity to seek review of the sanction or remedial measure in a court or other independent tribunal established under that Party's legal system.
5. Each Party shall adopt or maintain rules of procedure and evidence that apply to enforcement proceedings regarding alleged violations of its competition laws and the determination of sanctions and remedies thereunder. These rules shall include procedures for the presentation of evidence, including expert evidence if applicable, and shall apply equally to all persons in the proceeding.
6. If a Party's competition authority alleges a violation of its competition laws, that authority shall be responsible for establishing the legal and factual basis for the alleged violation in an enforcement proceeding. Nothing in this paragraph shall preclude a Party from requiring that a person against whom the allegation is made be responsible for establishing certain elements in defense of the allegation.
7. Each Party shall provide for the protection of confidential information obtained by its competition authorities during the investigation process. If a Party's competition authority uses or intends to use such information in an enforcement proceeding, that Party shall, if permissible under its legal system and as appropriate, allow the person subject to investigation timely access to the information necessary to prepare an adequate defence to the competition authority's allegations.
8. Each Party shall ensure that its competition authorities afford the person under investigation for the alleged violation of its competition laws a reasonable opportunity to consult with such competition authorities on legal, factual or procedural matters arising in the course of the investigation.
Article 13.5. Cooperation
1. The Parties recognize the importance of cooperation and coordination between their respective competition authorities to promote the effective enforcement of competition laws between the Parties.
2. The Parties agree to cooperate, as appropriate, on competition policy strategies, including through the exchange of joint actions.
3. The Parties agree to cooperate in a manner consistent with their respective legal systems and interests, including through consultation and exchange of information and in consideration of available resources.
4. The competition authorities of a Party may consider entering into an arrangement or cooperation agreement with the competition authorities of the other Party that sets out mutually agreed terms of cooperation.
Article 13.6. Technical Cooperation
Recognizing that the Parties may benefit from sharing their diverse experiences in developing, promoting, implementing and enforcing competition law, the Parties will consider undertaking mutually agreed technical cooperation activities, subject to available resources.
Article 13.7. Transparency
1. The Parties recognize the value of developing their competition enforcement policies in a transparent manner.
2. Each Party shall ensure that its competition laws and public guidelines are publicly available, including on an official website. This excludes internal operating procedures, unless their disclosure is required by the Parties' legal system.
3. Upon request of a Party, the other Party shall make available to the other Party public information relating to:
(a) its competition law enforcement policies and practices, and
(b) exemptions and exclusions from their competition laws, provided that the request specifies the particular good or service and market involved, and includes information explaining how the exemption or exclusion may hinder trade or investment between the Parties.
4. Each Party shall ensure that the final decision finding a violation of its competition laws is made available in writing and sets forth, in non-criminal matters, the findings of fact and reasoning, including the legal and, if applicable, economic analysis, on which the decision is based.
5. Each Party shall further ensure that the final decision referred to in paragraph 4 and any order implementing that decision are publicly available, or if publication is not practicable, are otherwise publicly available, in a manner that allows interested persons and the other Party to become aware of them. Each Party shall ensure that the version of the decision or order that is published, or is publicly available, does not contain confidential information, in a manner consistent with its respective legal system.
Article 13.8. Consultations
At the request of a Party, the Parties shall consult with a view to promoting understanding between them or addressing specific matters arising under this Chapter. Such request shall indicate, if relevant, how the matter affects trade or investment between the Parties. The Party to which the request is addressed shall give full and sympathetic consideration to the concerns of the requesting Party.
Article 13.9. Non-Application of Dispute Settlement
Neither Party may have recourse to the dispute settlement mechanism provided for in Chapter 22 (Dispute Settlement) with respect to any matter arising under this Chapter.