3. Except as provided in annexes and 16.01 16.02, this chapter applies to procurements covered by the respective laws of the Parties and make its Entities, relating to:
a) Goods; and
b) Services, subject to the provisions in annexes I and II of chapter 11 (cross-border trade in services).
4. Notwithstanding paragraph 3 (b), this chapter shall not apply to:
b) Subsidies or grants provided by a party or a state enterprise, including loans, guarantees and insurance supported by a party;
b) Government services or functions such as law enforcement services, social rehabilitation, pension or unemployment insurance or social security services, social welfare, education, training and public health care or protection of children; and
c) Cross-border financial services.
Article 16.03. General Rights and Obligations
1. The parties agree to the following rights and obligations pursuant to this chapter:
a) Implementation of the measures regarding government procurement, so as to enable maximum possible competition and respecting the principles of transparency and non-discrimination, as well as the other provisions in this chapter;
b) Promoting business opportunities for suppliers compete in the public procurement preferably based on the principle of value for money, insofar as the application of this principle is compatible with the nature of the procurement. the application of this principle is designed to achieve the most efficient with the financial resources allocated to public entities, considering conducting procurement needs;
c) To ensure maximum simplicity and publicity of government procurement measures;
d) Maintenance and promotion of business opportunities in public procurement for the suppliers of another Party, during implementation processes required to fulfil the commitments made under international agreements relating to the matter to which they are party;
e) Accorded equitable opportunities to suppliers of another party in the procurement procedures; and
f) Does not apply to a measure that:
i) Is discriminatory;
ii) Arbitrary; or
iii) Has the effect of denying equal access or opportunity to a supplier of another party.
2. Nothing in this chapter shall prevent a party to develop a new recruitment policy, provided that this does not contravene the provisions of this chapter.
Article 16.04. National Treatment and Non-discrimination
1. With respect to procurement by entities through competitive procedures, each Party shall accord to the goods and services suppliers of another party treatment no less favourable than that accorded to its own like similar goods and services suppliers of goods and similar services.
2. Without prejudice to the foregoing, in public procurement procedures that use other than those set out in paragraph 1, the Parties shall take the necessary measures that are reasonably available to it to ensure compliance with the obligations under article 16.03 (1) (f).
3. Each Party shall ensure that its entities do not require special conditions to countervailing suppliers of the other Party to participate in the procurement.
4. This article shall not apply to measures concerning customs duties or on other charges of any kind or in connection with the method of importation; levying charges or such other duties and import regulations, including restrictions and formalities.
Article 16.05. Provision of Information and Transparency
1. In addition to the provisions of article 17.04 (disclosure of information), each Party shall ensure that its entities provide for effective dissemination and understanding of:
a) Their respective government procurement systems;
b) Business opportunities generated by the relevant government procurement processes, to provide suppliers of the other Party with all the information required to take part in such procurement; and
c) The results of government procurement processes.
2. Each Party shall ensure that the award criteria are duly substantiated in the manner prescribed by its entities.
3. Each Party undertakes to notify the other party (1) Within one year from the Entry into Force of this Treaty, the legislation governing public procurement in their respective countries and entities covered by this chapter. this obligation extends to any modification of the said information.
Article 16.06. Technical Specifications
Each Party shall ensure that its entities do not develop, adopt or apply technical specifications which have the purpose or effect of creating unnecessary obstacles to trade.
Article 16.07. Denial of Benefits
Subject to prior notification and consultation in accordance with articles 17.04 (provision of information) and article 19.06 (consultations), a Party may deny the benefits of this chapter to a service supplier of another party where it determines that the service is being provided by an enterprise that has no substantial business activities in the territory of the other party and that, in accordance with the other party of legislation that is owned or controlled by persons of a non- party.
Article 16.08. Avoidance Proceedings
Each Party shall maintain or establish administrative or judicial procedures which allow, at the request of an affected supplier of another party, the prompt review of administrative decisions affecting procurements covered by this chapter. each Party shall ensure that such avoidance proceedings are timely, effective, transparent and conform to the principle of non-discrimination and due process.
Article 16.09. Modifications to Coverage
1. The Parties shall conduct consultations at the request of any of them to examine the possibility of incorporating the scope of application of this chapter the entities listed in annex 16.01.
2. The Parties shall adopt these agreements subject to article 18.01 (3) (b) (Free Trade Commission).
Article 16.10. Privatization
1. Nothing in this chapter shall be construed as preventing a party to privatise an entity covered in this chapter. in such cases, the other party may not require compensation.
2. Privatized entities shall not be subject to the implementation of this chapter.
Article 16.11. Information Technology
1. The Parties shall, as far as possible, use electronic means of communication to permit efficient dissemination of information on Government Procurement, in particular those relating to business opportunities offered by entities.
2. With the aim of reaching an enlarged market of public procurement, the Parties shall endeavour to implement an electronic information system and brokerage binding for their respective entities. the main objective of the system shall consist in the dissemination of business opportunities offered by entities.
Article 16.12. Committee on Government Procurement
1. The parties establish a committee on Government Procurement comprising representatives of each, which shall be appointed within three (3) months from the date of Entry into Force of this Treaty.
2. The Committee shall hear matters relating to this chapter and without prejudice to the provisions of article 18.05 (2) (Committees), shall have the following functions:
a) Unless the parties otherwise agree, reviewed every two (2) years of the results of the implementation of this chapter;
b) Consultations and studies to incorporate the scope of application of this chapter the entities listed in annex 16.01;
c) To promote the development and implementation of electronic information system and brokerage mentioned in article 16.11 (2);
d) Coordinate the exchange of statistical information of its public procurement; and
e) Coordinate and promote the development of training programmes for the competent authorities of the Parties.
Article 16.13. Cooperation and Technical Assistance
The Parties shall endeavour to provide technical assistance and cooperation through the development of training programmes with a view to achieving a better understanding of their respective government procurement systems and statistics and better access to their respective markets.
Article 16.14. Relationship to other Chapters
In the event of incompatibility between any provision of this chapter and any other provision of the chapter shall prevail to the extent of the inconsistency.
In the case of Chile:
a) Office of the Controller-General;
b) Central Bank;
c) Armed forces;
d) Security forces;
e) Municipalities;
f) National Council of Television;
g) The State enterprises;
h) Judiciary (Courts of Justice);
i) National legislature (Congress);
j) Constitutional Court;
k) Electoral Commission;
l) Regional electoral courts;
m) Higher Education Council; and
n) Public prosecutor.
In the case of Costa Rica:
a) Office of the Controller-General;
b) The Ministry of Interior and Police;
c) Ministry of Public Security;
d) The Central Bank of Costa Rica;
e) The autonomous and semi-autonomous institutions or any other public entity and state enterprise;
f) Legislature;
g) Judiciary;
h) Supreme Electoral Tribunal;
i) The Office of the Ombudsman;
j) Municipalities;
k) Non-State public authorities;
l) Duty-free shops and similar entities subject to private law in its procurement; and
m) The Council of Higher Education.
In the case of El Salvador:
a) Court of Auditors of the Republic;
b) Reserve Bank of El Salvador;
c) Ministry of Defence;
d) National Public Security Academy;
e) National Civil Police;
f) Municipalities;
g) Directorate-General of Public Entertainment, Radio and Television;
h) Judicial body;
i) Legislative body;
j) Supreme Electoral Tribunal;
k) Public Prosecutor;
l) National Charitable Lottery;
m) Directorate-General for mail;
n) Autonomous Port Executive Commission, CEPA; and
o) Hydroelectric Executive Commission of the Lempa River, CEL.
In the case of Guatemala:
a) Ministry of Defence;
b) National Institute of rural electrification;
c) Office of the Comptroller General of Accounts;
d) Bank of Guatemala;
e) The Ministry of Interior;
f) Judicial body;
g) Congress;
h) Constitutional Court;
i) Supreme Electoral Tribunal;
j) Public Prosecutor;
k) Attorney General's Office;
l) State and municipal government enterprises;
m) Municipalities; and
n) Public entities, decentralized and autonomous, in accordance with its establishment by law or provision or another are excluded from the application of procurement procedures contained in the Law of the Contracting State and its Rules of Procedure, Decree No 57-92 of the Congress of the Republic and its regulation.
In the case of Honduras:
a) National tribunal of elections;
b) State public enterprises;
c) Municipalities;
d) The President of the Republic;
e) Ministry of National Defence;
f) Ministry of Security;
g) Family Assistance Programme (PRAF);
h) National Supply of Basic Products (BANASUPRO);
i) Standing Committee on Contingencies (COPECO); and
j) Public entities, in accordance with its law or establishment or by another provision, are excluded from the application of public procurement procedures.
Annex 16.02 . Classes of recruitment
The classes of public procurement that are excluded from this chapter are the following:
a) Defence procurements of strategic nature and other procurements that relate to national security;
b) Public procurement staff to compliance functions of the entities; and
c) Procurements made with financing institutions of States, Regional or multilateral or persons requiring conditions inconsistent with the provisions of this chapter.
Part Seventh. Administrative and Institutional Provisions
Chapter 17. Transparency
Article 17.01. Definitions
For purposes of this chapter, Administrative Ruling of general application, an administrative ruling or interpretation that applies to all persons and fact situations that generally fall within its scope, and that establishes a standard of conduct, but does not include:
a) Orders or judgements in administrative procedures applicable to a person, in particular goods or service of another Party in a specific case; or
b) A decision to deal with respect to a particular act or practice.
Article 17.02. Information Center
1. Each Party shall designate a branch or office as an information centre to facilitate communication between the parties on any matter covered by this Treaty.
2. When a party so requests, the Information Centre of the other party shall indicate the office or official responsible for the matter and provide the required support to facilitate communication with the requesting party.
Article 17.03. Publication
1. Each Party shall ensure that its laws, regulations, procedures and administrative rulings of general application relating to any matter covered by this Agreement are promptly published or otherwise made available to the parties and to any interested person.
2. To the extent possible, each Party shall:
a) Publish in advance any such measure that it proposes to adopt; and
b) Provide interested persons and the other party a reasonable opportunity to comment on such proposed measures.
Article 17.04. Information Supply
1. Each Party shall notify the other party to the extent possible, any existing or proposed measure considers that it might affect or substantially affect the interests of the other party under the terms of this Treaty.