ARTICLE 12.10
Cooperation on cybersecurity matters
The State Parties recognise the importance of:
(a) building the capabilities of their national entities responsible for cyber security, including computer security incident response; and
(b) using existing collaboration mechanisms to cooperate on matters related to cyber security, including to identify and mitigate malicious intrusions or dissemination of malicious code that affect the electronic networks of the State Parties.
Chapter 13. GOVERNMENT PROCUREMENT
ARTICLE 13.1
Introduction
This Chapter is based on Special and Differential Treatment for Signatory MERCOSUR States with a view to enabling the opportunity for Signatory MERCOSUR States to enjoy the full benefits of this Chapter in an effective and balanced manner. Special and Differential Treatment provisions for Signatory MERCOSUR States ̶ necessary to preserve and promote their economic development through, inter alia, differentiated thresholds, the possibility to apply offsets, policies favoring Micro, Small and Medium Enterprises (hereinafter referred to as "MSMEs"), or excluding specific goods and services ̶ shall be reflected in this Chapter, taking into consideration the different levels of development amongst the State Parties. Paraguay's double asymmetric condition being landlocked and of a relatively lower economic development shall be given additional considerations than those given to other Signatory MERCOSUR States in general.
ARTICLE 13.2
Scope and coverage
1. This Chapter shall apply to any measure regarding covered procurement, whether or not it is conducted by electronic means.
2. For the purposes of this Chapter, covered procurement means procurement for governmental purposes:
(a) of goods, services, or any combination thereof:
(i) as specified in each State Party's Appendix in Annex 13-A (Schedule of Commitments on Government Procurement); and
(ii) not procured with a view to commercial sale or resale, or for use in the production or supply of goods or services for commercial sale or resale;
(b) by any contractual means, including: purchase; lease; and rental or hire purchase, with or without an option to buy;
(c) for which the value, as estimated in accordance with Article 13.4 (Valuation of Contracts), equals or exceeds the relevant threshold specified in a State Party's Appendix in Annex 13-A (Schedule of Commitments on Government Procurement) at the time of publication of a notice in accordance with Article 13.13 (Notices);
(d) by a procuring entity; and
(e) that is otherwise not excluded from coverage in paragraph 3 or in a State Party's Appendix in Annex 13-A (Schedule of Commitments on Government Procurement).
3. Except where provided otherwise in a State Party's Appendix, this Chapter shall 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 State Party provides, including cooperative agreements, grants, loans, equity infusions, guarantees and fiscal incentives;
(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 conducted:
(i) for the specific purpose of providing international assistance, including development aid;
(ii) 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; or
(iii) under the particular procedure or condition of an international organisation, or funded by international grants, loans or other assistance where the applicable procedure or condition would be inconsistent with this Chapter.
(f) public procurement undertaken among public entities, regardless of whether they are included in Sections A, B and C of a State Party’s Appendix in Annex 13-A (Schedule of Commitments on Government Procurement) ; or
(g) procurement made outside the territory of a State Party, for consumption outside the territory of that State Party;
4. Each State Party shall specify the following information in its Appendix in Annex 13-A (Schedule of Commitments on Government Procurement):
(a) in Section A (Central Entities), the central government entities whose procurement is covered by this Chapter;
(b) in Section B (Sub-central Entities), the sub-central government entities whose procurement is covered by this Chapter;
(c) in Section C (Other Entities), all other entities whose procurement is covered by this Chapter;
(d) in Section D (Goods), the goods covered by this Chapter;
(e) in Section E (Services), the services, other than construction services, covered by this Chapter;
(f) in Section F (Construction Services), the construction services covered by this Chapter;
(g) in Section G (General Notes), any General Notes;
(h) In Section H (Means of Publication), means of publications; and
(i) In Section I (Threshold Adjustment Formula), the applicable Threshold Adjustment Formula.
ARTICLE 13.3
Definitions
For the purposes of this Chapter:
(a) "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, nongovernmental buyers for nongovernmental purposes;
(b) "construction service" means a service that has as its objective the realisation by whatever means of civil or building works, based on Division 51 of the United Nations Provisional Central Product Classification ("CPC");
(c) "days" means calendar days;
(d) "electronic auction" means an iterative process that involves the use of electronic means for the presentation by suppliers of either new prices, or new values for quantifiable non-price elements of the tender related to the evaluation criteria, or both, resulting in a ranking or re ranking of tenders;
(e) "in writing" or "written" means any worded or numbered expression that can be read, reproduced and later communicated. It may include electronically transmitted and stored information;
(f) "juridical person" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any branch, corporation, trust, partnership, joint venture, sole proprietorship or association;
(g) "limited tendering" means a procurement procedure whereby the procuring entity contacts a supplier or suppliers of its choice;
(h) "measure" means any law, regulation, procedure, administrative guidance or practice, or any action of a procuring entity relating to a covered procurement;
(i) "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;
(j) "natural person" means a national or permanent resident of a Signatory MERCOSUR State or a national of Singapore;
(k) "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;
(l) "offsets" means any condition or undertaking that encourages local development or improves a State Party’s balance-of-payments accounts, such as the use of domestic content, the licensing of technology, investment, counter trade and similar action or requirement;
(m) "open tendering" means a procurement procedure whereby all interested suppliers may submit a tender;
(n) "person" means a natural person or a juridical person;
(o) "procuring entity" means an entity covered under a State Party's Sections A, B or C to this Chapter;
(p) "publish" means to disseminate information through paper or electronic means that is distributed widely and is readily accessible to the general public;
(q) "qualified supplier" means a supplier that a procuring entity recognises as having satisfied the conditions for participation;
(r) "selective tendering" means a procurement procedure whereby only qualified suppliers are invited by the procuring entity to submit a tender;
(s) "services" includes construction services, unless otherwise specified;
(t) "standard" means a document approved by a recognised body that provides for common and repeated use, rules, guidelines or characteristics for goods or services, or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a good, service, process or production method;
(u) "supplier" means a person or group of persons that provides or could provide goods or services to a procuring entity; and
(v) "technical specification" means a tendering requirement that:
(i) lays down the characteristics of goods or services to be procured, including quality, performance, safety and dimensions, or the processes and methods for their production or provision; or
(ii) addresses terminology, symbols, packaging, marking or labelling requirements, as they apply to a good or service.
ARTICLE 13.4
Valuation of contracts
1. In estimating the value of a procurement for the purpose of ascertaining whether it is a covered procurement, a procuring entity shall:
(a) neither divide a procurement into separate procurements nor select or use a particular valuation method for estimating the value of a procurement with the intention of totally or partially excluding it from the application of this Chapter; and
(b) include the estimated maximum total value of the procurement over its entire duration, whether awarded to one or more suppliers, taking into account:
(i) all forms of remuneration, including premiums, fees, commissions, interest or other revenue stream that may be provided for under the contract; and
(ii) where the procurement provides for the possibility of options, the total value of such options.
2. Where an individual requirement for a procurement results in the award of more than one contract, or in the award of contracts in separate parts ("recurring contracts"), the calculation shall be based on the estimated maximum total value of the procurement. The estimation of the maximum total value may be based on:
(a) the value of recurring contracts of the same type of good or service awarded during the preceding 12 (twelve) months or the procuring entity's preceding fiscal year, adjusted, where possible, to take into account anticipated changes in the quantity or value of the good or service being procured over the following 12 (twelve) months; or
(b) The estimated value of recurring contracts of the same type of good or service to be awarded during the 12 (twelve) months following the initial contract award or the procuring entity's fiscal year.
3. In the case of procurement by lease, rental or hire purchase of goods or services, or procurement for which a total price is not specified, the basis for valuation may be:
(a) in the case of a fixed-term contract:
(i) where the term of the contract is 12 (twelve) months or less, the total estimated maximum value for its duration; or
(ii) where the term of the contract exceeds 12 (twelve) months, the total estimated maximum value, including any estimated residual value;
(b) where a State Party's laws and regulations allow for contracts to be concluded for an indefinite period and a total price is not specified, the estimated monthly installment multiplied by 48 (forty-eight); and
(c) where it is not certain whether the contract is to be a fixed-term contract, valuation based on subparagraph (b).
ARTICLE 13.5
Security and general exceptions
1. Nothing in this Chapter shall be construed to prevent any State Party from taking any action or not disclosing any information that it considers necessary for the protection of its essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defence purposes.
2. Subject to the requirement that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between State Parties where the same conditions prevail, or a disguised restriction on international trade, nothing in this Chapter shall be construed to prevent any State Party from imposing or enforcing measures:
(a) necessary to protect public morals, order or safety;
(b) necessary to protect human, animal or plant life or health;
(c) necessary to protect intellectual property; or
(d) relating to goods or services of persons with disabilities, philanthropic institutions or prison labour.
3. The State Parties understand that subparagraph (b) of paragraph 2 includes environmental measures necessary to protect human, animal, or plant life or health.
Article 13.6
National Treatment and non-discrimination
1. With respect to any measure related to covered procurement:
(a) Singapore, including its procuring entities, shall accord immediately and unconditionally to the goods and services of the Signatory MERCOSUR States and to the suppliers of the Signatory MERCOSUR States offering such goods and services, treatment no less favorable than the treatment accorded to its own goods, services and suppliers; and
(b) each Signatory MERCOSUR State, including its procuring entities, shall accord immediately and unconditionally to the goods and services of Singapore and to the suppliers of Singapore offering such goods and services, treatment no less favorable than the treatment accorded to its own goods, services and suppliers.
2. With respect to any measure regarding covered procurement, Singapore and each Signatory MERCOSUR State, including their respective procuring entities, shall not:
(a) treat a locally established supplier of another State Party less favourably than another locally established supplier on the basis of degree of foreign affiliation to, or ownership by, a person of that other State Party; nor
(b) discriminate against a locally established supplier on the basis that the goods or services offered by that supplier for a particular procurement are goods or services of another State Party.
3. This Article shall not apply to customs duties and charges of any kind imposed on, or in connection with, importation, the method of levying such duties and charges, or to other import regulations or formalities and measures affecting trade in services different from the ones which specifically regulate covered procurement under this Chapter.
ARTICLE 13.7
Use of electronic means
1. The State Parties shall conduct covered procurement by electronic means to the widest extent possible and may cooperate in developing and expanding the use of electronic means in government procurement systems.
2. When conducting covered procurement by electronic means, a procuring entity shall:
(a) ensure that the procurement is conducted using information technology systems and software, including those related to authentication and encryption of information, that are generally available and inter-operable with other generally available information technology systems and software; and
(b) maintain mechanisms that ensure the integrity of requests for participation and tenders, including establishment of the time of receipt and the prevention of inappropriate access.
ARTICLE 13.8
Conduct of procurement
1. A procuring entity shall conduct covered procurement in a transparent and impartial manner that:
(a) is consistent with this Chapter, using procedures such as open tendering, selective tendering and limited tendering;
(b) avoids conflicts of interest; and
(c) prevents corrupt practices.
2. A State Party may establish or maintain sanctions against such corrupt practices consistent with its laws and regulations.
3. For greater certainty, nothing in this Chapter shall be construed to prevent a State Party from developing new procurement policies, procedures or contractual means, provided that they are not inconsistent with this Chapter.
ARTICLE 13.9
Rules of origin
For the purposes of covered procurement, a State Party shall not apply rules of origin to goods imported from another State Party that are different from the rules of origin that the State Party applies at the same time in the normal course of trade to imports of the same goods from the same State Party.
ARTICLE 13.10
Denial of benefits
A State Party may deny the benefits of this Chapter to a service supplier of another State Party if such supplier:
(a) is a juridical person of that other State Party not engaged in substantive business operation in the territory of that other State Party; or
(b) is a person that supplies the service from the territory of a non-Party.
ARTICLE 13.11
Offsets
Signatory MERCOSUR States may, in the qualification and selection of suppliers, goods or services, or in the evaluation of tenders and award of contracts, impose, seek or consider offsets.
ARTICLE 13.12
Information on the procurement system
Each State Party shall:
(a) promptly publish any law, regulation, judicial decision or administrative ruling of general application, standard contract clause mandated by law or regulation and incorporated by reference in notices or tender documentation and procedure regarding covered procurement, and any modifications thereof, in an officially designated electronic or paper medium that is widely disseminated and remains readily accessible to the public; and
(b) provide an explanation thereof to another State Party, on request.
2. Each State Party shall list in Section H (Means of Publication) of its Appendix in Annex 13-A (Schedule of Commitments on Government Procurement):
(a) the electronic or paper media in which the State Party publishes the information described in subparagraph (a) of paragraph 1; and
(b) the electronic or paper media in which the State Party publishes the notices required by Article 13.13 (Notices), Article 13.15(7) (Qualification of Suppliers), and Article 13.22(2) (Transparency of Procurement Information).
3. Each State Party shall promptly notify the other State Parties of any modification to the State Party's information listed in Section H (Means of Publication) of its Appendix in Annex 13-A (Schedule of Commitments on Government Procurement).
ARTICLE 13.13
Notices
1. For each covered procurement, a procuring entity shall publish a notice of intended procurement in the appropriate paper or electronic medium listed in Section H (Means of Publication) of the State Party’s Appendix in Annex 13-A (Schedule of Commitments on Government Procurement), except in the circumstances described in Article 13.19 (Limited Tendering). Such medium shall be widely disseminated and such notice shall remain readily accessible to the public, at least until the expiration of the time period indicated in the notice. Procuring entities are encouraged to publish their notices by electronic means free of charge through a single point of access.
2. Unless otherwise provided for in this Chapter, each notice of intended procurement shall include the following information, unless that information is provided in the tender documentation that is made available free of charge to all interested suppliers at the same time as the notice of intended procurement:
(a) the name and address of the procuring entity and other information necessary to contact the procuring entity and obtain all relevant documents relating to the procurement, and their cost and terms of payment, if any;
(b) a description of the procurement, including the nature and the quantity of the goods or services to be procured or, where the quantity is not known, the estimated quantity;
(c) for recurring contracts, an estimate, if possible, of the timing of subsequent notices of intended procurement;
(d) a description of options, if any;
(e) the timeframe for delivery of goods or services or the duration of the contract;
(f) the procurement procedure that will be used and whether it will involve negotiation or electronic auction;
(g) where applicable, the address and any final date for the submission of requests for participation in the procurement;
(h) the address and the final date for the submission of tenders;
(i) the language or languages in which tenders or requests for participation may be submitted, if they may be submitted in a language other than an official language of the State Party of the procuring entity;
(j) a list and brief description of any conditions for participation of suppliers, including any requirements for specific documents or certifications to be provided by suppliers in connection therewith; and