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 encourages local development or the improvement of a 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;
open tendering means a procurement method whereby all interested suppliers may submit a tender;
procuring entity means an entity listed in Annex 14-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 recognizes 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 include construction services, unless otherwise specified; supplier means a person 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; or
(b) addresses terminology, symbols, packaging, marking or labelling requirements, as they apply to a good or service.
Article 14.2. Scope Application of Chapter
1. This Chapter applies to any measure adopted or maintained by a Party regarding covered procurement. For purposes of this Chapter, covered procurement means procurement for governmental purposes:
(a) of goods, services, or any combination thereof in accordance with that Party's Schedule to Annex 14-A;
(b) 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;
(c) by a procuring entity;
(d) by any contractual means, including purchase, rental or lease, with or without an option to buy, and build-operate-transfer contracts and public works concessions contracts;
(e) for which the value of the contract, as estimated in accordance with Article 14.5, equals or exceeds the relevant threshold specified in that Party's Schedule in Annex 14-A, at the time of publication of a notice of intended procurement; and
(f) that is not otherwise excluded from coverage under this Agreement.
Activities Not Covered
2. Unless otherwise provided in a Party's Schedule to Annex 14-A, this Chapter does not apply to:
(a) non-contractual agreements or any form of assistance that a Party, including its procuring entities, provides, including grants, loans, equity infusions, fiscal incentives, subsidies, guarantees, sponsorship arrangements and cooperative agreements;
(b) government provision of goods or services to persons or to regional or local level governments;
(c) procurement conducted for the specific purpose of providing foreign assistance, including developmental aid;
(d) procurement conducted under the particular procedure or condition of an international organisation, or funded by international loans, grants or other assistance, where the applicable procedure or condition would be inconsistent with this Chapter;
(e) procurement 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;
(f) hiring of government employees and related employment measures;
(g) 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, derivatives and other securities. For greater certainty, this Chapter shall not apply to procurement of banking, financial, fiduciary or specialised services related to the following activities:
(i) the incurring of public indebtedness; or
(ii) public debt management;
(h) procurement made by a procuring entity from another government entity of that same Party whether or not covered by this Chapter;
(i) the acquisition or rental of land, existing buildings or other immovable property or the rights thereon; or
(j) procurement of a good or service outside the territory of the Party of the procuring entity, for consumption outside the territory of that Party.
3. Each Party shall ensure that its procuring entities comply with this Chapter in conducting covered procurements.
4. 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.
5. Where a procuring entity awards a contract that is not covered under this Chapter, nothing in this Chapter shall be construed to cover any good or service component of the contract.
6. 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.
Schedules
7. Each Party shall specify the following information in its Schedule to Annex 14-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; and
(i) in Section I, the publication information required under Article 14.7.
Article 14.3. General Principles National Treatment and Non-Discrimination
1. With respect to any measure regarding covered procurement, each Party, including its procuring entities, shall accord immediately and unconditionally to the goods and services of the other Party and any other Party to the Pacific Alliance and to the suppliers of the other Party, treatment no less favourable than the treatment that the Party, including its procuring entities, accords to:
(a) its domestic goods, services and suppliers; and
(b) goods, services and suppliers of any other Party to the Pacific Alliance.
2. With respect to any measure regarding covered procurement, no Party, including its procuring entities, shall:
(a) treat a locally established supplier less favourably than another locally established supplier on the basis of degree of foreign affiliation or ownership; or
(b) discriminate against a locally established supplier on the basis that the good or service offered by that supplier for a particular procurement is a good or service of the other Party.
3. All orders under contracts awarded for covered procurement shall be subject to paragraphs 1 and 2.
Measures Not Specific to Procurement
4. Paragraphs 1 and 2 shall not apply to:
(a) customs duties and charges of any kind imposed on or in connection with importation, the method of levying such duties and charges, other import regulations or formalities; or
(b) measures affecting trade in services other than measures governing covered procurement.
Procurement Methods
5. A procuring entity shall use an open tendering procedure for covered procurement unless Article 14.9 or Article 14.13 applies.
Rules of Origin
6. Each Party shall apply to covered procurement of a good the rules of origin that it applies in the normal course of trade to that good.
Article 14.4. Offsets
With regard to covered procurement, a Party, including its procuring entities, shall not seek, take account of, impose or enforce any offset, at any stage of a procurement.
Article 14.5. Valuation
1. In estimating the value of a procurement for the purposes 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 avoiding the obligations in this Chapter;
(b) include the maximum total value of the procurement over its entire duration, taking into account all forms of remuneration, including any premium, fee, commission, interest or other revenue stream that may be provided in the relevant procurement and, where the procurement provides for the possibility of options, the total value of such options; and
(c) where the procurement is to be conducted in multiple parts, with contracts to be awarded at the same time or over a given period to one or more suppliers, base its calculation of the total maximum value of the procurement over its entire duration.
2. If the total estimated maximum value of a procurement over its entire duration is not known, the procurement shall be deemed as a covered procurement, unless otherwise excluded under this Agreement.
Article 14.6. Technical Specifications
1. A procuring entity shall not prepare, adopt or apply any technical specification or prescribe any conformity assessment procedure with the purpose or effect of creating an unnecessary obstacle to trade between the Parties.
2. In prescribing the technical specifications for the good or service being procured, a procuring entity shall, if appropriate:
(a) set out the technical specifications in terms of performance and functional requirements, rather than design or descriptive characteristics; and
(b) base the technical specifications on international standards, if these exist; otherwise, on national technical regulations, recognised national standards or building codes.
3. 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 these cases, the procuring entity includes words such as "or equivalent" in the tender documentation.
4. A procuring entity shall not seek or accept, in a manner that would have the effect of precluding competition, advice that may be used in the preparation or adoption of any technical specification for a specific procurement from a person that may have a commercial interest in the procurement.
5. For greater certainty, this Article is not intended to preclude a procuring entity from preparing, adopting or applying technical specifications to promote the conservation of natural resources or the protection of the environment.
6. For greater certainty, a procuring entity may conduct market research in developing specifications for a particular procurement.
7. For greater certainty, this Chapter is not intended to preclude a Party, or its procuring entities, from preparing, adopting or applying technical specifications required to protect sensitive government information, including specifications that may affect or limit the storage, hosting or processing of such information outside the territory of the Party.
Article 14.7. Publication of Procurement Information
1. Each Party shall promptly publish any measure of general application relating to covered procurement, and any change or addition to this information.
2. Each Party shall list in Section I of its Schedule to Annex 14-A the paper or electronic means through which the Party publishes the information described in paragraph 1 and the notices required by Article 14.8, Article 14.13 and Article 14.15.
3. Each Party shall, on request, respond to an inquiry relating to the information referred to in paragraph 1.
Article 14.8. Notice of Intended Procurement
1. For each covered procurement, except in the circumstances described in Article 14.9, a procuring entity shall publish a notice of intended procurement through the appropriate paper or electronic means listed in Section I of its Schedule to Annex 14-A. The notices shall remain readily accessible to the public until at least the expiration of the time period for responding to the notice or the deadline for submission of the tender.
2. The notices shall, if accessible by electronic means, be provided free of charge:
(a) for central government entities that are covered under Annex 14-A, through a single g point of access; and
(b) for sub-central government entities and other entities covered under Annex 14-A, through links in a single electronic portal.
3. Unless otherwise provided in this Chapter, each notice of intended procurement shall include at least 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) a description of the procurement, including, if appropriate, the nature and quantity of the goods or services to be procured and a description of any options, or the estimated quantity if the quantity is not known;
(b) the procurement method that will be used;
(c) alist anda brief description of any conditions for participation that suppliers must fulfil to participate in the relevant procurement, that may include any related requirements for specific documents or certifications that suppliers must provide;
(d) the name of the procuring entity publishing the notice;
(e) the address and/or the contact point information where suppliers may obtain all relevant documents relating to the procurement, and the cost and terms of payment to obtain the relevant documents, if any;
(f) where applicable, the address and any final date for the submission of requests for participation in the procurement;
(g) the address and any final date for the submission of tenders;
(h) the time-frame for delivery of goods or services to be procured or the duration of the contract, except when this information is provided in the tender documentation;
(i) if, pursuant to Article 14.13, a procuring entity intends to select a limited number of qualified suppliers to be invited to tender, the criteria that will be used to select them and, if applicable, any limitation on the number of suppliers that will be permitted to tender; and
(j) an indication that the procurement is covered by this Chapter unless that indication is publicly available through information published pursuant to Article 14.7.
4. For greater certainty, paragraph 3 does not preclude a Party from charging a fee for tender documentation if the notice of intended procurement includes all of the information set out in paragraph 3.
Notice of Planned Procurement
5. Each Party shall encourage their procuring entities to publish in an electronic means listed in Section I of its Schedule to Annex 14-A, as early as possible in each fiscal year, a notice regarding their future procurement plans. Such notices shall include the subject matter of the procurement and the planned date of publication of the notice of intended procurement.
Article 14.9. Limited Tendering
1. Provided that it does not use this provision for purposes of avoiding competition among suppliers or in a manner that discriminates against suppliers of the other Party or protects domestic suppliers, a procuring entity may use limited tendering.
2. If a procuring entity uses limited tendering, it may choose, according to the nature of the procurement, not to apply Article 14.6, Article 14.8, Article 14.10, Article 14.11, Article 14.12, Article 14.13 or Article 14.14. A procuring entity may use limited tendering, only under the following circumstances:
(a) if, in response to a prior notice, invitation to participate or invitation to tender:
(i) no tenders were submitted or no suppliers requested participation;
(ii) no tenders were submitted that conform to the essential requirements in the tender documentation;
(ii) no suppliers satisfied the conditions for participation; or
(iv) the tenders submitted were collusive. For greater certainty, a Party may provide under its laws and regulations that a declaration that tenders are collusive must be made by a competent authority;
provided that the procuring entity does not substantially modify the requirements set out in the notices or the tender documentation;
(b) if the goods or services can be supplied only by a particular supplier and no reasonable alternative or substitute good or service exists for any of the following reasons:
(i) the requirement is for a work of art;
(ii) the protection of patents, copyrights or other exclusive rights; or
(iii) due to an absence of competition for technical reasons;
(c) for additional deliveries by the original supplier or its authorised agents of goods or services that were not included in the initial procurement where a change of supplier for such additional goods or services:
(i) cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, software, services or installations procured under the initial procurement or due to conditions under original supplier warranties; and
(ii) would cause significant inconvenience or substantial duplication of costs for the procuring entity;
(d) for goods purchased on a commodity market;
(e) if a procuring entity procures a prototype or a first good or service that is intended for limited trial or that is developed at its request in the course of, and for, a particular contract for research, experiment, study or original development. Original development of a prototype or a first good or service may include limited production or supply in order to incorporate the results of field testing and to demonstrate that the prototype or the first good or service is suitable for production or supply in quantity to acceptable quality standards, but does not include quantity production or supply to establish commercial viability or to recover research and development costs. Subsequent procurements of these newly developed goods or services, however, shall be subject to this Chapter;
(f) if additional construction services that were not included in the initial contract but that were within the objectives of the original tender documentation have, due to unforeseeable circumstances, become necessary to complete the construction services described therein. However, the total value of contracts awarded for additional construction services may not exceed 50 per cent of the value of the initial contract;
(g) insofar as is strictly necessary, if, for reasons of extreme urgency brought about by events unforeseeable by the procuring entity, the goods or services could not be obtained in time by means of open or selective tendering;
(h) if a contract is awarded to the winner of a design contest, provided that:
(i) the contest has been organised in a manner that is consistent with this Chapter; and
(ii) the participants are judged by an independent jury with a view to award a design contract to the winner; or
(i) for purchases made under exceptionally advantageous conditions that only arise in the very short term, such as from unusual disposals, liquidation, bankruptcy or receivership, but not for routine purchases from regular suppliers.
3. A procuring entity shall prepare a report in writing or maintain a record for each contract awarded in accordance with paragraph 2. Such report or record shall include the name of the procuring entity, the value and kind of goods or services procured, and a statement that indicates the circumstances and conditions described in paragraph 2 that justified the use of limited tendering.
Article 14.10. Time Periods for the Submission of Tenders
General
1. A procuring entity shall, consistent with its own reasonable needs, provide sufficient time for a supplier to obtain the tender documentation and to prepare and submit a request for participation and a responsive tender, taking into account factors such as:
(a) the nature and complexity of the procurement; and
(b) the time necessary for transmitting tenders by non-electronic means from foreign as well as domestic points if electronic means are not used.
Deadlines
2. A procuring entity that uses selective tendering shall establish that the final date for the submission of a request for participation shall not, in principle, be less than 25 days from the date of publication of the notice of intended procurement. If a state of urgency duly substantiated by the procuring entity renders this time period impracticable, the time period may be reduced to no less than 10 days.
3. Except as provided in paragraphs 4 and 5, a procuring entity shall establish that the final date for the submission of tenders shall not be less than 40 days from the date on which:
(a) in the case of open tendering, the notice of intended procurement is published; or
(b) in the case of selective tendering, the procuring entity notifies the suppliers that they will be invited to submit tenders, whether or not it uses a multi-use list.
4. A procuring entity may reduce the time period for tendering set out in paragraph 3 by five days for each one of the following circumstances:
(a) the notice of intended procurement is published by electronic means;
(b) the tender documentation is made available by electronic means from the date of the publication of the notice of intended procurement; and
(c) the procuring entity accepts tenders by electronic means.
5. A procuring entity may reduce the time period for tendering set out in paragraph 3 to no less than 10 days if:
(a) the procuring entity has published a notice of planned procurement under Article 14.8 at least 40 days and no more than 12 months in advance of the publication of the notice of intended procurement, and the notice of planned procurement contains:
(i) adescription of the procurement;
(ii) the approximate final dates for the submission of tenders or requests for participation;
(iii) the address from which documents relating to the procurement may be obtained; and
(iv) as much of the information that is required for the notice of intended procurement as is available;