Regarding government procurement covered [by this Chapter], an entity may not consider, request or impose offsets at any stage of a government procurement process.
Article 8.5. Valuation
1. In calculating the value of a government procurement for the purpose of determining whether it is covered by this Chapter, an entity:
(a) Shall not divide it into separate procurements nor use a particular method to estimate its value for the purpose of avoiding the application of this Chapter;
(b) Shall include the calculation of the maximum total value over its lifetime, taking into account all forms of remuneration, such as premiums, dues, fees, commissions and interest such as may be stipulated in the procurement; and
(c) Shall, where the procurement results in the award of contracts at the same time or in a given period to one or more suppliers, base the calculation on the maximum total value of the procurement throughout the period of its validity.
2. When the total maximum value of a procurement over the entire period of its duration is unknown, the procurement shall be covered by this Chapter.
Article 8.6. Technical Specifications
1. An entity shall not prepare, adopt or apply any technical specification or prescribe any procedure for assessing conformity with the purpose or effect of creating unnecessary obstacles to trade between the Parties.
2. In establishing the technical specifications for the goods or services to be procured, the entity shall, as appropriate:
(a) Establish them in terms of performance and functional requirements, rather than design or descriptive characteristics; and
(b) Base them on international standards, where applicable, or on national technical regulations, recognised national standards or building codes.
3. An entity shall not prescribe technical specifications that require or refer to a brand or trade name, patent, copyright, design or type, specific origin or producer or supplier, unless there is no other sufficiently precise or intelligible way of describing the requirements of the procurement, provided that, in such cases, phrases such as "or equivalent" are used in the procurement documents.
4. An entity shall not seek or accept, in a manner that would have the effect of impeding competition, advice that could be used in the preparation or adoption of any technical specification for a specific procurement on behalf of a person who may have a commercial interest in the government procurement.
5. For greater certainty, this Article is not intended to prevent an entity from preparing, adopting or applying technical specifications to help in the conservation or protection of natural resources or the environment.
Article 8.7. Publication of Government Procurement Measures
Each Party shall promptly publish its general measures specifically regulating government procurement covered by this Chapter, as well as any changes to said measures in the same manner as the original publication in an electronic medium listed in Appendix 8.2.
Article 8.8. Government Procurement Notice
1. For each government procurement process covered by this Chapter, an entity shall publish, in advance, a notice inviting interested suppliers to submit tenders, or when appropriate, requests to participate in the procurement, except as provided in Article 8.9.4.
2. Each procurement notice shall include at least the following information:
(a) A description of the procurement;
(b) The procurement method to be used;
(c) Any conditions that suppliers must fulfil to participate in the procurement;
(d) The name of the entity issuing the notice;
(e) Address and/or point of contact where providers may obtain all the relevant documents relating to the government procurement;
(f) Where applicable, the address and deadline for submission of applications for participation in the government procurement;
(g) The address and deadline for submission of tenders;
(h) The dates for delivery of the goods or services to be procured or the duration of the contract, unless this information is included in the tender documentation; and
(i) An indication that the government procurement is covered by this Chapter.
3. The entities shall publish the procurement notices in media which offer the widest possible non-discriminatory access to the Parties' interested suppliers. Access to said notices shall be available by means of an electronic location specified in Annex 8.2 throughout the period established for tendering for the relevant procurement.
Planned Procurement Notices
4. Each Party shall encourage its entities to publish a notice regarding their future procurement plans in one of the electronic media listed in Appendix 8.2 as early as possible in each fiscal year. These notices shall include the object to be procured and the estimated period in which the procurement shall be conducted.
Article 8.9. Procurement Procedures
Open Tender
1. Entities shall award contracts through open tendering procedures, through which any of the Parties' interested suppliers may submit a tender.
Selective Tender
2. Where the legislation of one of the Parties provides for selective tendering, an entity shall, for each procurement:
(a) Publish a notice inviting suppliers to apply for participation in a procurement early enough for interested suppliers to prepare and submit applications and for the entity to evaluate and make its determination based on such applications, and
(b) Allow all domestic suppliers and all the suppliers of the other Parties that the entity has determined satisfy the conditions for participation to submit a tender, unless the entity has imposed a limit on the number of suppliers that will be permitted to tender and the criteria for such limitation in the notice or in the publicly available tender documentation.
3. Entities maintaining publicly available permanent lists of qualified suppliers may select suppliers included in said lists and invite them to tender. Any selection must allow for equitable opportunities for the suppliers in such lists.
Other Procurement Procedures
4. Provided that an entity does not use this provision to avoid competition so as to protect its domestic suppliers or to discriminate against the other Parties' suppliers, an entity may award contracts by means other than open or selective tendering in any of the following circumstances:
(a) Provided that the requirements of the tender documentation are not substantially modified, when:
(i) No tender has been submitted or no suppliers have applied to participate;
(ii) No tender that meets the essential requirements set out in the tender documents has been submitted;
(iii) No provider has complied with the participation conditions; or
(iv) Collusion has been declared by competent authority in the submission of tenders;
(b) Where the goods or services can be supplied by one supplier only and there is no reasonable substitute or alternative goods or services due to any of the following reasons:
(i) The requirement is for the production of a work of art;
(ii) The protection of patents, copyrights or other exclusive rights; or
(iii) Due to the absence of competition for technical reasons;
(c) In the event of the original supplier making additional deliveries of goods or services intended as replacements, extensions or continuations to the service of existing equipment, software, services or installations, where a change of supplier would compel the entity to procure goods or services not meeting the requirements of compatibility with existing equipment, software, services or installations;
(d) For acquisitions carried out in a commodity market;
(e) When an entity acquires a prototype or a first good or service that has been developed at its request in the course of, and for, a particular contract for research, experimentation, study or original development. When said contracts have been fulfilled, subsequent procurement of such goods or services will be awarded through open tendering procedures;
(f) When, in the case of public works, construction services additional to those originally contracted are required in response to unforeseen circumstances that are strictly necessary for the fulfilment of the objectives of the contract that brought them into being. However, the total value of contracts awarded for additional construction services may not exceed 50% of the value of the main contract;
(g) Insofar as is strictly necessary where, for reasons of extreme urgency brought about by events which the entity could not have foreseen, the goods or services could not be obtained in time by means of open or selective tendering and the use of such procedures could result in serious prejudice to the entity or the performance of its duties. For the purposes of this subparagraph, an entity's failure to manage funds available within a specified period shall not constitute an unforeseen event;
(h) When a contract is awarded to the winner of a design contest, provided that:
(i) The contest was organised in a manner consistent with the principles of this Chapter, in particular with regard to the publication of a government procurement notice; and
(ii)The participants are judged or evaluated by a jury or independent body;
(i) In the case of purchases made under exceptionally advantageous conditions that only arise in the very short term in the case of unusual disposals such as those derived from situations of liquidation, receivership or bankruptcy, but not in the case of ordinary purchases made from regular suppliers and
(j) When an entity needs to procure consulting services involving matters of a confidential nature, the disclosure of which could reasonably be expected to compromise confidential government information, cause economic instability or otherwise be contrary to the public interest.
5. An entity shall prepare a written report or maintain a record for each contract awarded under paragraph 4. Said report or record shall include the name of the entity, the value and nature of the goods or services procured and an indication of the circumstances and conditions justifying the use of a procedure other than open tender.
Article 8.10. Deadlines for Submission of Bids
1. An entity shall provide suppliers sufficient time to submit applications to participate in a government procurement process and to prepare and submit appropriate tenders, taking into account the nature and complexity of the procurement. An entity shall provide a term of no fewer than 30 days from publication of the procurement notice for submission of tenders.
2. Notwithstanding the provisions of paragraph 1, an entity may establish a period of fewer than 30 days, but in no case fewer than 10 days, in the following circumstances:
(a) When the entity has published a separate notice containing a description of the procurement, approximate deadlines for the submission of tenders or, where appropriate, conditions for participation in a procurement and an address where documents concerning the procurement have been made available, at least 30 days and not more than 12 months in advance;
(b) In the case of a new, second or subsequent publication of government procurement notices of a recurring nature;
(c) Where a state of urgency duly substantiated by an entity makes meeting the deadline stipulated in paragraph 1 impracticable; or
(d) When the entity acquires goods or services that are generally sold or offered for sale in the commercial market to non-governmental buyers, and are usually purchased by said buyers for non-governmental purposes.
3. A Party may provide that a company can reduce the bidding deadline set down in paragraph 1 by five days for each of the following circumstances, where:
(a) The notice of intended procurement is published by electronic means;
(b) All procurement documents that are made available to the public by electronic means are published from the date of publication of the procurement notice; or
(c) Tenders can be received by the procuring entity through electronic means.
4. The application of paragraphs 2 and 3 may not result in a reduction of the periods specified in paragraph 1 to fewer than 10 days from the date of publication of the procurement notice.
Article 8.11. Procurement Documents
1. An entity shall provide suppliers all information necessary to enable them to prepare and submit appropriate tenders.
2. The tender documentation should include, as a minimum, a full description of the following:
(a) The nature and quantity of goods or services to be procured or, if the amount is not known, the estimated quantity and any requirement that must be met, including technical specifications, certificates of conformity assessment, plans, drawings or instruction manuals;
(b) The conditions for participation of suppliers, including information and documents that suppliers are required to submit in relation to those conditions;
(c) The evaluation criteria to be considered in the awarding of a contract and, unless price is the sole criterion, the relative importance of those criteria;
(d) When an entity holds an electronic auction, the rules applicable to the auction, including identification of the elements of the tender related to the evaluation criteria;
(e) The date, time and place of opening of bids;
(f) The date or period for delivery of the goods or the supply of services or the duration of the contract; and
(g) Any other term or condition, such as payment terms and the format in which bids will be submitted.
3. When an entity does not publish all tender documentation electronically, it must ensure that it is available to any provider who requests it.
4. When, during the course of a procurement, an entity modifies the criteria referred to in paragraph 2, it shall communicate such modifications in writing:
(a) To all suppliers participating in the procurement at the time of the modification of the criteria, if the identities of such suppliers are known, and in other cases, in the same way the original information was communicated, and
(b) With sufficient time to allow said suppliers to modify and resubmit their tenders, as appropriate.
Article 8.12. Conditions for Participation
1. Where a Party, including its entities, requires suppliers to comply with registration or eligibility requirements or any other condition to participate in a government procurement process, the entity shall publish a notice inviting the suppliers to submit tenders for such participation. The entity shall publish the notice sufficiently in advance to provide interested suppliers sufficient time to prepare and submit tenders, and for the entity to evaluate and make determinations on the basis of said tenders.
2. Each entity must:
(a) Limit the conditions for participation in a government procurement process to those that are essential so as to ensure that a potential supplier has the legal, commercial, technical and financial capabilities to meet the requirements and the technical requirements of government procurement on the basis of the provider's business both within and outside the territory of the Party of the entity;
(b) Base its decision on eligibility solely on the conditions to participate that were specified in advance in notices or the tender documents, and
(c) Allow all suppliers of other Parties who have satisfied the conditions for participation to be recognised as eligible and able to participate in the government procurement.
3. Entities may establish permanent, publicly available lists of suppliers eligible to participate in government procurements. Where an entity requires suppliers to appear as eligible in said list as a condition for participation in a government procurement and a supplier that has not yet been deemed eligible requests to be included in the list, the Parties shall ensure that the procedure for inclusion in the list starts promptly and they shall allow the supplier to participate in the government procurement, provided that there is sufficient time to complete the procedures for eligibility within the timeframe set down for submission of tenders.
4. No entity may impose previously having been awarded one or more contracts by an entity of that Party or having prior work experience in the territory of that Party as a condition for a supplier to participate in a government procurement process.
5. An entity shall promptly notify any suppliers that have submitted bids for eligibility of that entity's decision on the bid. When an entity rejects a bid for eligibility or ceases to recognise a supplier as meeting the conditions for participation, the entity shall promptly provide the supplier, at its request, a written explanation of the reasons for the entity's decision.
6. Nothing in this Article shall preclude an entity from excluding a supplier of a procurement on grounds established by a Party, such as bankruptcy, liquidation or insolvency, false declarations during a government procurement process or significant or persistent deficiencies in the performance of any substantive requirement or obligation arising from one or more previous contracts.
Article 8.13. Treatment of Tenders and Awarding of Contracts
1. An entity shall receive, open, and treat all tenders using procedures that ensure equality and impartiality in the government procurement process and shall treat tenders as confidential, at least until they are opened.
2. For a bid to be considered for award, an entity shall require that it be presented in writing and at the time of the opening of tenders:
(a) That it conform to the essential requirements set out in the procurement documents; and
(b) That it come from a supplier that has satisfied the conditions for participation.
3. Unless an entity determines that the award of a contract is against the public interest, the entity shall award the contract to the supplier that the entity has determined meets the conditions for participation, is fully capable of undertaking the contract and whose bid is considered the most advantageous based solely on the requirements and evaluation criteria specified in the procurement documents.
4. An entity may not cancel a government procurement or terminate or modify an awarded contract in order to avoid the obligations of this Chapter.
Article 8.14. Information on Awards
1. An entity shall promptly publish its decision on the award of a contract. If so requested, an entity shall provide a supplier whose tender was not selected for award with the reasons for not selecting its tender and the relative advantages of the bid that the entity selected.
2. After an award under this Chapter, an entity shall promptly publish, in an electronic medium listed in Annex 8.2, a notice that includes as a minimum the following information on the award of the contract:
(a) The name of the entity;
(b) A description of the goods or services procured;
(c) The award date;
(d) The name of the provider to whom the contract was awarded;
(e) The value of the contract; and
(f) The government procurement method used.
3. An entity shall maintain records and reports related to government procurement processes covered by this Chapter, including the records and reports stipulated in Article 8.9.5, for a period of at least three years.
4. Subject to the provisions of Article 8.19, at the request of a Party, the other Party shall promptly provide the information necessary to determine whether a government procurement was conducted fairly, impartially and in accordance with this Chapter, including information on the characteristics and relative advantages of the winning bid.
Article 8.15. Integrity In Government Procurement Practices
Each Party shall ensure the existence of administrative or penal sanctions to tackle corruption in its government procurement processes, and that its entities establish policies and procedures to eliminate any potential conflict of interest on the part of those involved in government procurement or having an influence over it.
Article 8.16. Appeal Procedure
1. Each Party shall establish a procedure for administrative or judicial review that is timely, effective, transparent and non-discriminatory, in accordance with the principle of due process, by means of which a supplier can make appeals related to a government procurement covered by this Chapter in which the provider has an interest, alleging a violation of this Chapter.
2. Each Party shall establish or designate at least one impartial administrative or judicial authority independent of its entities to receive and review the appeals referred to in paragraph 1 and to formulate relevant conclusions and recommendations.
3. When an appeal by a supplier is initially reviewed by an authority other than those referred to in paragraph 2, the Party shall ensure that the supplier may appeal the initial decision before an independent impartial administrative or judicial authority of the entity that is the subject of the appeal.
4. Each Party shall make provisions for the authority established or designated pursuant to paragraph 2 to have the authority to take prompt interim measures to preserve the supplier's opportunity to participate in government procurement processes and to ensure that the Party complies with this Chapter. Such measures may result in the suspension of the procurement process.
5. Notwithstanding any other appeal procedures provided or developed by each of the Parties, each Party shall ensure that the authority established or designated pursuant to paragraph 2, provides at least the following:
(a) Sufficient time for the supplier to prepare and submit written appeals, which in no case may be fewer than 10 days from the time the act or omission which gave rise to the appeal became known to the supplier or reasonably should have become known to it; and
(b) Prompt delivery in writing of the decisions relating to the appeal, with an explanation of the rationale for each decision.
Article 8.17. Use of Electronic Media
1. The Parties shall provide information regarding future government procurement opportunities through electronic means.
2. The Parties shall encourage, to the extent possible, the use of electronic media for the delivery of procurement documents and the receipt of tenders.
3. When government procurements covered by this Chapter are conducted through electronic means, each Party:
(a) Shall ensure that the procurement is conducted using information technology and software systems, including those related to the authentication and encryption of information, which are accessible and interoperable with generally available information technology and software systems; and
(b) Shall maintain mechanisms that ensure the security and integrity of requests to participate and bids, and which determine the time of receipt thereof.
Article 8.18. Amendments and Corrections
1. Any Party may change its lists contained in Annex 8.2, provided that:
(a) It notifies the other Parties in writing;
(b) It includes intended compensatory adjustments in said notification which permit the other Parties to maintain a level of coverage comparable to that existing prior to the amendment, except as provided in paragraphs 2 and 3; and
(c) The other Parties do not object in writing within 30 days of notification.
2. Any Party may make corrections of a purely formal nature to its lists contained in Annex 8.2, such as:
(a) A change to the name of an entity listed in Annex 8.2;
(b) Merger of two or more entities listed in Annex 8.2; and
(c) Separation of an entity listed in Annex 8.2 into two or more entities that are added to Annex 8.2;
Provided that it notifies the other Parties in writing and they do not object in writing within 30 days of such notification. The Party making such amendment shall not be obliged to provide compensatory adjustments.
3. A party need not provide compensatory adjustments in circumstances in which the proposed amendment to its lists in Annex 8.2 covers an entity over which the Party has effectively eliminated its control or influence. Where the Parties do not agree that said government control or influence has been effectively eliminated, the objecting Party may request additional information or consultations in order to clarify the nature of any government control or influence and to reach agreement on the retention or removal of the entity's coverage under this Chapter.
4. Where the Parties have agreed to an amendment or correction of a purely formal nature to their Schedules in Annex 8.2, including where no party has objected within 30 days in accordance with paragraphs 1 and 2, the Free Trade Commission shall adopt a decision to that effect.
Article 8.19. Undisclosed Information
1. The parties, their entities and their review authorities shall not disclose confidential information without the written consent of the supplier that has provided such information, where said disclosure could prejudice the legitimate commercial interests of a particular person or could prejudice fair competition between suppliers.
2. No provision in this Chapter shall be construed to require a Party or its entities to disclose confidential information which could impede compliance with the law or otherwise be contrary to the public interest.
Article 8.20. Exceptions
1. Nothing in this Chapter shall be construed to prevent a Party from taking any action or abstaining from disclosing any information deemed necessary for the protection of its essential security interests relating to the procurement of arms, munitions or war materials, or government procurement indispensable for national security or for national defence purposes.
2. Provided that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between the Parties, or imply a disguised restriction on trade between the Parties, nothing in this Chapter shall be construed to prevent a Party from adopting or maintaining measures: