5. Each Party shall apply to covered procurement of goods or services imported from or supplied by the other Party, the rules of origin that it applies in the normal course of trade in such goods or services.
Special Compensatory Conditions
6. A procuring entity shall not seek, consider, impose or use special countervailing terms and conditions at any stage of a covered procurement.
Non-Specific Measures for Public Contracting
7. Paragraphs 1 and 2 shall not apply to: customs duties and charges of any kind imposed on or in connection with importation; the method of collection of such duties and charges; other import regulations or formalities; or measures affecting trade in services, other than measures governing covered procurement.
Article 10.4. Use of Electronic Means In Public Contracting
1. The Parties recognize the need and importance of the use of electronic means for the dissemination of information relating to covered procurement.
2. In order to facilitate business opportunities for suppliers of the other Party under this Chapter, each Party shall maintain or make best efforts to adopt an electronic single point of entry for the purpose of allowing access to complete information on procurement opportunities in its territory, as well as on procurement-related measures, especially those set out in Articles 10.5, 10.6.1, 10.6.3, 10.8.1, 10.8.7, and 10.13.2.
Article 10.5. Publication of Procurement Information
Each Part:
(a) publish in a timely manner all regulations of general application with respect to covered procurement, and any amendments to such regulations, in an electronic medium listed in Exhibit 10.1 (Coverage Annex); and
(b) at the request of the other Party, provide an explanation concerning such information.
Article 10.6. Publication of Notices
Notice of Future Hire
1. For each covered procurement, a procuring entity shall publish in a timely manner a notice inviting suppliers to submit tenders, or where appropriate, a request to participate in the procurement, except in the circumstances described in Article 10.10.2. Such notice shall be published in an electronic medium listed in Annex 10.1 (Coverage Annex).
2. Each notice of future hiring shall include:
(a) the description of future public procurement;
(b) the method of procurement to be used;
(c) any conditions that suppliers must satisfy in order to participate in public procurement;
(d) the name of the contracting entity publishing the notice;
(e) the address and/or point of contact where suppliers can obtain all relevant procurement documentation;
(f) where applicable, the address and final date for the submission of requests for participation in the procurement;
(g) the address and final date for submission of bids;
(h) the dates of delivery of the goods or services to be contracted or the duration of the contract; and
(i) an indication that the procurement is covered by this Chapter.
Notice of Hiring Plans
3. Each Party shall encourage its procuring entities to publish in an electronic medium listed in Annex 10.1 (Annex on Coverage), as early as practicable in each fiscal year, a notice regarding its future procurement plans. Such notices shall include the subject matter or category of goods and services to be procured and the estimated period in which the procurement will be conducted.
Article 10.7. Conditions for Participation
1. Where a Party requires suppliers to comply with registration, qualification or any other requirement or condition of participation in a procurement, the procuring entity shall publish a notice inviting suppliers to apply for such participation. The procuring entity shall publish the notice sufficiently in advance to allow interested suppliers sufficient time to prepare and submit their applications and for the procuring entity to evaluate and make its determinations on the basis of such applications.
2. At the time of establishing the conditions of participation, a procuring entity:
(a) shall limit these conditions to those that are essential to ensure that the supplier possesses the legal and financial capabilities, and the commercial and technical skills, to meet the requirements and technical specifications of the procurement on the basis of the supplier's business activities conducted both within and outside the territory of the Party of the procuring entity;
(b) base its decision solely on the terms and conditions that the procuring entity has specified in advance in the procurement documents or notices;
(c) shall not make it a condition of participation in a procurement or the award of a procurement contract that the supplier has previously been awarded one or more procurement contracts by a procuring entity of the Party concerned;
(d) may require prior relevant experience when it is essential to comply with procurement requirements; and
(e) shall allow all domestic suppliers and suppliers of the other Party that have satisfied the conditions for participation to be recognized as qualified and to participate in the procurement.
3. Where there is evidence to justify it, a Party, including its procuring entities, may exclude a supplier from a procurement on grounds such as:
(a) bankruptcy;
(b) false statements;
(c) significant or persistent deficiencies in the fulfillment of any substantive requirement or obligation arising from one or more previous contracts;
(d) final sentences for felonies or other serious offenses;
(e) professional misconduct or acts or omissions that call into question the business integrity of the supplier; or
(f) non-payment of taxes.
4. Procuring entities shall not adopt or apply a registration system or qualification procedure with the purpose or effect of creating unnecessary obstacles to the participation of suppliers of the other Party in their respective procurement.
5. The process of, and the time required for, registration and qualification of suppliers shall not be used to exclude suppliers of the other Party from being considered for a particular procurement.
6. A procuring entity shall promptly inform any supplier that has applied for qualification of its decision with respect to that application. When a procuring entity rejects an application for qualification or ceases to recognize a supplier as one that meets the conditions for participation, the procuring entity shall promptly inform the supplier, and upon request, provide the supplier with a timely written explanation of the reasons for the entity's decision.
Article 10.8. Information on Future Procurements
Contracting Documents
1. A procuring entity shall provide in a timely manner to suppliers interested in participating in a procurement procurement, procurement documents that include all necessary information to enable them to prepare and submit suitable bids in accordance with Annex 10.8.1 (Procurement Documents). These documents shall be published in an electronic medium listed in Annex 10.1 (Coverage Annex).
Technical Specifications
2. A contracting entity shall not prepare, adopt or apply any technical specification or require any conformity assessment procedure that has the purpose or effect of creating unnecessary obstacles to trade between the Parties.
3. In establishing any technical specifications for the goods or services to be procured, a procuring entity shall, where appropriate:
(a) state the technical specification in terms of performance and functional requirements, rather than descriptive or design characteristics; and
(b) base the technical specification on international standards, where applicable, or otherwise on national technical regulations, recognized national standards or building codes.
4. A procuring entity shall not prescribe technical specifications that require or refer to a particular trademark or trade name, patent, copyright, design, type, specific origin, producer or supplier, unless there is no other sufficiently precise or intelligible way of describing the procurement requirements, and provided that, in such cases, expressions such as "or equivalent" shall also be included in the procurement documents.
5. A procuring entity shall not solicit or accept, in a manner that may have the effect of precluding competition, advice that could be used in preparing or adopting any technical specification for a specific procurement from any person that may have a commercial interest in that procurement.
6. For greater certainty, this Article is not intended to prevent a contracting entity from preparing, adopting or applying technical specifications to promote the conservation of natural resources or protect the environment.
Modifications
7. When, in the course of a covered procurement, a procuring entity modifies the criteria or technical requirements set forth in a notice or procurement document provided to participating suppliers, or modifies a notice or procurement document, it shall transmit such modifications in writing:
(a) to all suppliers that are participating at the time of the modification of the information, if the identification of such suppliers is known, and in all other cases, in the same manner as the original information was transmitted; and
(b) with sufficient time to allow suppliers to modify and resubmit their corrected bids, as appropriate.
Article 10.9. Deadlines
1. A procuring entity shall provide suppliers with sufficient time to submit applications to participate in a procurement and to prepare and submit suitable tenders, taking into account the nature and complexity of the procurement. A procuring entity shall allow a period of not less than forty (40) days from the date on which the notice of intended procurement is published and the final date for submission of tenders.
2. Notwithstanding the provisions of paragraph 1, a procuring entity may establish a period of less than forty (40) days, but in no case less than ten (10) days, in the following circumstances:
(a) where the procuring entity has published a separate notice containing a description of the procurement, the approximate deadlines for submission of bids or, where appropriate, conditions for participation in a procurement and the address where documentation relating to the procurement may be obtained, at least forty (40) days and not more than twelve (12) months in advance.
(b) in the case of a new, second or subsequent publication of notices for a public procurement of a recurring nature;
(c) when an emergency situation duly justified by a procuring entity makes it impracticable to meet the deadline stipulated in paragraph 1; or
(d) when the procuring entity purchases commercial goods or services.
3. A Party may provide that a procuring entity may reduce the deadline for submission of tenders set forth in paragraph 1 by five (5) days for each of the following circumstances:
(a) when the notice of intended procurement is published by electronic means;
(b) when all procurement documents that are made available to the public by electronic means are published as of the date of publication of the notice of intended procurement; and
(c) when the bids can be received by electronic means by the contracting entity.
The use of this paragraph, in conjunction with paragraph 2, may not result in reducing the bidding deadlines set forth in paragraph 1 to less than ten (10) days from the date of publication of the notice of intended procurement.
Article 10.10. Procurement Procedures
Open Bidding
1. A procuring entity shall award its contracts through open tendering procedures, except where Article 10.10.2 applies.
Other Procurement Procedures
2. Provided that this provision is not used to prevent competition among suppliers or in a manner that discriminates against suppliers of the other Party, or protects domestic suppliers, a procuring entity may use other procurement procedures only in the following circumstances:
(a) provided that the requirements of the procurement documents are not substantially modified, when:
(i) no bid was submitted or no supplier has requested to participate;
(ii) no bid meeting the essential requirements of the bidding documents was submitted;
(iii) no supplier complied with the conditions of participation; or
(iv) there has been collusion in the submission of bids;
(b) when the goods or services can be supplied only by a particular supplier and there is no reasonable alternative or substitute goods or service due to any of the following reasons:
(i) the requirement is for the realization of a work of art;
(ii) the protection of patents, copyrights or other exclusive intellectual property rights; or
(iii) due to the absence of competition for technical reasons, as in the case of intuitu personae service contracting;
(c) for additional deliveries or services from the initial supplier of goods or services that were not included in the initial procurement, when the change of supplier of such additional goods or services:
(i) cannot be done for economic or technical reasons, such as interchangeability or compatibility requirements with existing equipment, software, services or facilities of the initial contracting; and
(ii) would cause significant inconvenience or substantial duplication of costs to the procuring entity,
in the case of construction services, the total value of contracts awarded for such additional services shall not exceed fifty (50) percent of the amount of the initial contract, provided that such services have been contemplated in the objectives contained in the procurement documents and have become necessary to complete the work due to unforeseen reasons;
(d) to the extent strictly necessary, when for reasons of extreme urgency caused by events unforeseen by the procuring entity, the goods or services cannot be obtained in a timely manner through open or selective competitive bidding, and the use of such procedures would result in serious prejudice to the procuring entity;
(e) for purchases of goods made in a market of commodities;
(f) when a procuring entity procures a prototype or first commodity in limited quantity or contracts for a service that is developed upon request in the course of, and for, a particular contract for research, experiment, study or original development; or
(g) when a contract is awarded to the winner of a design competition, provided that:
(i) the competition has been organized in a manner that is consistent with the principles of this Chapter, in particular with respect to the publication of the notice of intended procurement; and
(ii) the participants are rated or evaluated by an independent jury or body with a view to the conclusion of a design contract that is awarded to a winner.
3. A procuring entity shall maintain records or prepare a written report for each procurement awarded under paragraph 2, in a manner consistent with Article 10.13.3. Where a Party prepares written reports under this paragraph, they shall include the name of the procuring entity, the value and nature of the goods or services procured, and a justification indicating the circumstances and conditions described in paragraph 2 that justify the use of alternative procurement procedures. Where a Party maintains records, the records shall indicate the circumstances and conditions described in paragraph 2 that justify the use of alternative procurement procedures.
Article 10.11. Electronic Auctions
Where a procuring entity intends to conduct a covered procurement using an electronic auction, the procuring entity shall provide each participant, before the electronic auction commences, with the following information:
(a) the automatic evaluation method, including the mathematical formula, that is based on the evaluation criteria set forth in the procurement documents and that will be used in the automatic ranking or reclassification during the auction;
(b) the results of any initial evaluation of the elements of its bid when the contract is awarded on the basis of the most advantageous bid; and
(c) any other relevant information on the conduct of the auction.
Article 10.12. Opening of Bids and Award of Contracts
Treatment of Offers
1. A procuring entity shall receive and process all bids under procedures that ensure the equality and fairness of the procurement process, and the confidentiality of bids.
2. Where a procuring entity provides suppliers with the opportunity to correct any unintentional errors of form between the bid opening period and the award of the contract, the procuring entity shall provide the same opportunity to all participating suppliers.
Awarding of Contracts
3. A procuring entity shall require that, in order to be considered for an award, the bid:
(a) is submitted in writing by a supplier that meets all the conditions for participation; and
(b) at the time of opening, shall be in accordance with the essential requirements specified in the notices and procurement documents.
4. Unless a procuring entity determines that the award of a procurement contract would be contrary to the public interest, the procuring entity shall award the contract to the supplier that the procuring entity has determined meets the conditions of participation and is fully capable of performing the contract and whose tender is considered the most advantageous based solely on the requirements and evaluation criteria specified in the procurement notices and documents, or, where price is the sole evaluation criterion, the lowest price.
5. When a procuring entity receives a tender whose price is abnormally lower than the prices of the other tenders submitted, the entity may verify with the supplier whether the supplier complies with the conditions for participation and has the capacity to perform under the contract.
6. A procuring entity may not cancel a procurement or terminate or modify a procurement contract that has been awarded for the purpose of evading this Chapter.
Article 10.13. Transparency of Procurement Information
Information to be Provided to Suppliers
1. A procuring entity shall promptly inform participating suppliers of its decision on the award of a procurement contract and, upon request, shall do so in writing. Subject to Article 10.14, a procuring entity shall, upon request, provide the supplier whose tender was not successful with the reasons for its decision and the relative advantages of the successful tender.
Publication of Award Information
2. As soon as practicable after an award, a procuring entity shall publish in an electronic medium listed in Exhibit 10.1 (Coverage Annex), a notice that includes, at a minimum, the following information about the contract award:
(a) the name of the contracting entity;
(b) a description of the goods or services contracted;
(c) the date of the award;
(d) the name of the supplier to whom the contract was awarded; and
(e) the value of the contract.
Record Keeping
3. A procuring entity shall maintain reports or records of procurement proceedings relating to covered procurement, including the reports referred to in Article 10.10.3, and shall maintain such reports or records for a period of at least three (3) years after the date of award of a contract.
Article 10.14. Disclosure of Information
Delivery of Information to the other Party
1. On request of a Party, the other Party shall provide in a timely manner information necessary to determine whether a procurement has been conducted fairly, impartially and in accordance with this Chapter. Such information shall include information on the characteristics and relative advantages of the successful tender.
Non-Disclosure of Information
2. No Party, including its contracting entities, authorities or review bodies, may disclose information that the person who provided it has designated as confidential, in accordance with its national legislation, except with the authorization of that person.
3. Notwithstanding any other provision of this Chapter, no Party, including its procuring entities, shall provide to any particular supplier information that may prejudice fair competition between suppliers.
4. Nothing in this Chapter shall be construed to require a Party, including its contracting entities, authorities and review bodies, to disclose confidential information under this Chapter, if such disclosure would:
(a) prevent compliance with the law;
(b) harm fair competition among suppliers;
(c) prejudice the legitimate commercial interests of private parties, including the protection of intellectual property; or
(d) otherwise be contrary to the public interest.
Article 10.15. Article 10.15: National Review Procedures for the Lodging of Appeals
1. Each Party shall ensure that its procuring entities give fair and timely consideration to any complaint by its suppliers regarding an allegation of noncompliance with this Chapter arising in the context of a covered procurement in which they have or have had an interest. Each Party shall encourage its suppliers to seek clarification from its procuring entities through consultations with a view to facilitating the resolution of any such complaints.
2. Each Party shall provide a timely, effective, transparent and non-discriminatory administrative or judicial review procedure, in accordance with the principle of due process, through which a supplier may file a complaint alleging a breach of this Chapter arising in the context of covered procurement in which the supplier has or has had an interest.
3. Each Party shall establish or designate at least one impartial administrative or judicial authority, independent of its procuring entities, to receive and review a challenge filed by a supplier in a covered procurement, and to issue appropriate determinations and recommendations.
4. Where a body other than the authority referred to in paragraph 3 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.
5. Each Party shall adopt or maintain procedures that establish:
(a) rapid interim measures to preserve the supplier's ability to participate in the procurement that are applied by the procuring entity or by the impartial authority referred to in paragraph 3. The procedures may provide that the prevailing adverse consequences for the interests concerned, including the public interest, may be taken into account in deciding whether such measures should be applied. The reason for not taking such measures shall be stated in writing; and
(b) where a review body has determined the existence of a breach referred to in paragraph 2, corrective measures or compensation for loss or damage suffered, in accordance with the national legislation of each Party.
Article 10.16. Modifications and Amendments to Coverage
1. When a Party modifies its procurement coverage under this Chapter, the Party:
(a) notify the other Party in writing; and
(b) shall 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.
2. Notwithstanding subparagraph 1(b), a Party need not grant compensatory adjustments where:
(a) the modification in question is a minor amendment or a rectification of a purely formal nature; or