For the purposes of this Chapter:
in writing or written means any worded or numbered expression that can be read, reproduced and may be later communicated, and may include electronically transmitted and stored information;
limited tendering means a procurement method whereby the procuring entity contacts a supplier or suppliers of its choice;
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;
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 requires the use of domestic content, a domestic supplier, the licensing of technology, technology transfer, investment, counter- trade or similar action to encourage local development or to improve a Party’s balance of payments accounts;
open tendering means a procurement method whereby all interested suppliers may submit a tender; procuring entity means an entity listed in Annex 10;
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 recognises 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 includes construction services, unless otherwise specified;
supplier means a person or group of persons 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, including any applicable administrative provisions, or
(b) addresses terminology, symbols, packaging, marking, or labelling requirements, as they apply to a good or service.
Article 10.2. Objectives
The Parties recognise the importance of government procurement in trade relations and set as the objective of this Chapter the effective, reciprocal and gradual opening of their government procurement markets, in order to maximize, inter alia, competitive opportunities for the suppliers of the Parties.
Article 10.3. Scope
Application of Chapter
1. This Chapter shall apply to any measure regarding covered procurement.
2. For the purposes of this Chapter, covered procurement means government procurement:
(a) of a good, service or any combination thereof as specified in each Party’s Schedule set out in Annex 10;
(b) by any contractual means, including: purchase; rental or lease, with or without an option to buy;
(c) for which the value, as estimated in accordance with paragraphs 8 and 9, equals or exceeds the relevant threshold specified in a Party’s Schedule set out in Annex 10, at the time of publication of a notice of intended procurement;
(d) by a procuring entity, and
(e) that is not otherwise excluded from coverage under this Agreement.
Activities Not Covered
3. Unless otherwise provided in a Party’s Schedule set out in Annex 10, 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 Party, including its procuring entities, provides, including cooperative agreements, grants, loans, equity infusions, guarantees, subsidies, fiscal incentives and sponsorship arrangements;
(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:
(i) conducted for the specific purpose of providing international assistance, including development aid;
(ii) funded by an international organisation or foreign or international grants, loans or other assistance to which procurement procedures or conditions of the international organisation or donor apply. If the procedures or conditions of the international organisation or donor do not restrict the participation of suppliers then the procurement shall be subject to Article 10.5.1, or
(iii) 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, and
(f) procurement of a good or service outside the territory of the Party of the procuring entity, for consumption outside the territory of that Party.
Schedules
4. Each Party shall specify the following information in its Schedule set out in Annex 10:
(a) in Section A, the central government entities for which procurement is covered by this Chapter;
(b) in Section B, other entities for which procurement is covered by this Chapter;
(c) in Section C, the goods covered by this Chapter;
(d) in Section D, the services, other than construction services, covered by this Chapter;
(e) in Section E, any General Notes and Derogations;
(f) in Section F, the applicable Threshold Adjustment Formula;
(g) in Section G, the publication of information required under Article 10.6.2, and
(h) in Section H, the relevant time periods.
Compliance
5. Each Party shall ensure that its procuring entities comply with this Chapter in conducting covered procurements.
6. 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.
7. 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.
Valuation
8. In estimating the value of a procurement for the purposes of ascertaining whether it is a covered procurement, a procuring entity shall include the estimated maximum total value of the procurement over its entire duration, taking into account:
(a) all forms of remuneration, including any premium, fee, commission, interest or other revenue stream that may be provided for under the contract;
(b) the value of any option clause, and
(c) any contract awarded at the same time or over a given period to one or more suppliers under the same procurement.
9. If the total estimated maximum value of a procurement over its entire duration is not known, the procurement shall be deemed a covered procurement, unless otherwise excluded under this Agreement.
Article 10.4. Exceptions
1. Subject to the requirement that the measure is not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between Parties where the same conditions prevail, or a disguised restriction on international trade between the Parties, nothing in this Chapter shall be construed to prevent a Party, including its procuring entities, from adopting or maintaining a measure:
(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 the good or service of a person with disabilities, of philanthropic or not-for-profit institutions, or of prison labour.
2. The Parties understand that subparagraph 1(b) includes environmental measures necessary to protect human, animal or plant life or health.
Article 10.5. 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 to the suppliers of the other Party, treatment no less favourable than the treatment that the Party, including its procuring entities, accords to domestic goods, services, and suppliers.
2. With respect to a 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 to, or ownership by, a person of the other Party, 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.
Procurement Methods
4. A procuring entity shall use an open tendering procedure for covered procurement unless Article 10.9 or Article 10.10 applies.
Rules of Origin
5. For the purposes of covered procurement, a Party shall not apply rules of origin to goods or services imported from or supplied from the other Party that are different from the rules of origin the Party applies at the same time in the normal course of trade to imports or supplies of the same goods or services from the other Party.
Offsets
6. With regard to covered procurement, no Party, including its procuring entities, shall seek, take account of, impose or enforce any offset, at any stage of a procurement, except as otherwise provided in Annex 10. Measures Not Specific to Procurement
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 levying such duties and charges, other import regulations or formalities, and measures affecting trade in services other than measures governing covered procurement.
Use of Electronic Means
8. The Parties shall seek to provide opportunities for covered procurement to be undertaken through electronic means, including for the publication of procurement information, notices and tender documentation, and for the receipt of tenders, and in general for the entire cycle of procurement until payment.
9. When conducting covered procurement by electronic means, a procuring entity shall:
(a) ensure that the procurement is conducted using financial systems, information technology systems, and software, including those related to authentication and encryption of information, that are generally available and interoperable with other generally available financial systems, information technology systems, and software, and
(b) establish and maintain mechanisms that ensure the integrity of information provided by suppliers, including requests for participation and tenders.
Article 10.6. 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 G of its Schedule set out in Annex 10 the paper or electronic means through which the Party publishes the information described in paragraph 1 and the notices required by Article 10.7 and Article 10.9.3.
3. Each Party shall, on request, provide an explanation in response to an inquiry relating to the information referred to in paragraph 1.
Article 10.7. Notices of Intended Procurement
1. For each covered procurement, except in the circumstances described in Article 10.10, a procuring entity shall publish a notice of intended procurement through the appropriate paper or electronic means listed in Annex 10. 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 10, to extent possible through a single point of access, and
(b) for other entities covered under Annex 10, to extent possible through links in a single electronic portal.
3. Unless otherwise provided 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 the cost and terms of payment to obtain the relevant documents, if any;
(b) 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;
(c) if applicable, the time-frame for delivery of goods or services or the duration of the contract;
(d) if applicable, the address and any final date for the submission of requests for participation in the procurement;
(e) the address and the final date for the submission of tenders;
(f) the language or languages in which tenders or requests for participation may be submitted, if other than an official language of the Party of the procuring entity;
(g) a list and a brief description of any conditions for participation of suppliers, that may include any related requirements for specific documents or certifications that suppliers must provide;
(h) if, pursuant to Article 10.9, 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
(i) an indication that the procurement is covered by this Chapter, unless that indication is publicly available through information published pursuant to Article 10.6.2.
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. Procuring entities are encouraged to publish as early as possible in each fiscal year a notice regarding their future procurement plans (notice of planned procurement), which should include the subject matter of the procurement and the planned date of publication of the notice of intended procurement.
Article 10.8. Conditions for Preparation
1. A procuring entity shall limit any conditions for participation in a covered procurement to those conditions that ensure that a supplier has the legal and financial capacities and the commercial and technical abilities to fulfil the requirements of that procurement.
2. In establishing the conditions for participation, a procuring entity:
(a) shall not impose the condition that, in order for a supplier to participate in a procurement, the supplier has previously been awarded one or more contracts by a procuring entity of a given Party or that the supplier has prior work experience in the territory of that Party, and
(b) may require relevant prior experience if essential to meet the requirements of the procurement.
3. In assessing whether a supplier satisfies the conditions for participation, a procuring entity shall:
(a) evaluate the financial capacity, the commercial and technical abilities, the regulatory compliance practices, and the corporate social responsibility practices of a supplier on the basis of that supplier’s business activities both inside and outside the territory of the Party of the procuring entity (1), and
(b) base its evaluation solely on the conditions that the procuring entity has specified in advance in notices or tender documentation.
4. If there is supporting evidence, a Party, including its procuring entities, may exclude a supplier on grounds such as:
(a) bankruptcy or insolvency;
(b) false declarations;
(c) significant or persistent deficiencies in the performance of any substantive requirement or obligation under a prior contract or contracts;
(d) final judgments in respect of serious crimes or other serious offences;
(e) professional misconduct or actions or omissions pursuant to the laws of that Party, that adversely reflect on the commercial integrity of the supplier, or
(f) failure to pay taxes.
Article 10.9. Qualification of Suppliers
Registration Systems and Qualification Procedures
1. A Party, including its procuring entities, may maintain a supplier registration system under which interested suppliers are required to register and provide certain information and documentation.
2. No Party, including its procuring entities, shall:
(a) adopt or apply any registration system or qualification procedure with the purpose or the effect of creating unnecessary obstacles to the participation of suppliers of the other Party in its procurement, or
(b) use such registration system or qualification procedure to prevent or delay the inclusion of suppliers of the other Party on a list of suppliers or prevent those suppliers from being considered for a particular procurement.
Selective Tendering
3. If a procuring entity intends to use selective tendering, the procuring entity shall:
(a) publish a notice of intended procurement that invites qualified suppliers to submit a request for participation in a covered procurement, and
(b) include in the notice of intended procurement the information specified in Article 10.7.3(a), (b), (d), (g), (h), and (i).
4. The procuring entity shall:
(a) publish the notice sufficiently in advance of the procurement to allow interested suppliers to request participation in the procurement;
(b) provide, by the commencement of the time period for tendering, at least the information in Article 10.7.3 (c), (e), and (f) to the qualified suppliers , and
(c) allow all qualified suppliers to submit a tender, unless the procuring entity stated in the notice of intended procurement a limitation on the number of suppliers that will be permitted to tender and the criteria or justification for selecting the limited number of suppliers.
5. If the tender documentation is not made publicly available from the date of publication of the notice referred to in paragraph 3, the procuring entity shall ensure that the tender documentation is made available at the same time to all the qualified suppliers selected in accordance with paragraph 4(c).
Multi-Use Lists
6. A Party, including its procuring entities, may establish or maintain a multi-use list provided that it publishes annually, or otherwise makes continuously available by electronic means, a notice inviting interested suppliers to apply for inclusion on the list. The notice shall include:
(a) a description of the goods and services, or categories thereof, for which the list may be used;
(b) the conditions for participation to be satisfied by suppliers for inclusion on the list and the methods that the procuring entity or other government agency will use to verify a supplier’s satisfaction of those conditions;
(c) the name and address of the procuring entity or other government agency and other information necessary to contact the procuring entity and to obtain all relevant documents relating to the list;
(d) the period of validity of the list and the means for its renewal or termination or, if the period of validity is not provided, an indication of the method by which notice will be given of the termination of use of the list;
(e) the deadline for submission of applications for inclusion on the list, if applicable, and
(f) an indication that the list may be used for procurement covered by this Chapter, unless that indication is publicly available through information published pursuant to Article 10.6.2.
7. A Party, including its procuring entities, that establishes or maintains a multi-use list, shall include on the list, within a reasonable period of time, all suppliers that satisfy the conditions for participation set out in the notice referred to in paragraph 6.
8. If a supplier that is not included on a multi-use list submits a request for participation in a procurement based on the multi-use list and submits all required documents, within the time period referred to in Article 10.14.2, a procuring entity shall examine the request. The procuring entity shall not exclude the supplier from consideration in respect of the procurement unless the procuring entity is not able to complete the examination of the request within the time period allowed for the submission of tenders.
Information on Procuring Entity Decisions
9. A procuring entity or other entity of a Party shall promptly inform any supplier that submits a request for participation in a procurement or application for inclusion on a multi- use list of the decision with respect to the request or application.