(e) that is not otherwise excluded from coverage by this Chapter; and subject to the conditions specified in Annex 11A (Government Procurement Coverage); and
(f) 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.
Activities Not Covered
3. This Chapter does 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 and fiscal incentives;
(c) the procurement or acquisition of: fiscal agency or depository services; liquidation and management services for regulated financial institutions; or services related to the sale, redemption and distribution of public debt, including loans and government bonds, notes and other securities; 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.
(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 11.5.1;
(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;
(f) procurement of goods and services for specific contracts. Compliance
4. Each Party shall ensure that its procuring entities comply with this Chapter in conducting procurements.
5. 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, in order to avoid the obligations of this Chapter.
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.
7. 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 use a particular valuation method for estimating the value of a procurement with the intention of totally or partially excluding it from the application of this Chapter;
(b) taking into account all forms of remuneration, including premiums, fees, commissions and interest.
8. Where the estimated maximum total value of a procurement over its entire duration is not known, the procurement shall be covered by this Chapter.
Article 11.4. 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 (b) includes environmental measures necessary to protect human, animal, or plant life or health.
Article 11.5. General Principles
National Treatment and Non-Discrimination
1. With respect to any measure regarding covered procurement without prejudice of the notes in Sections A (Central Government Entities), B (Other Covered Entities), C (Services) and Section D (General Notes) of Annex 11A (Government Procurement Coverage) 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 any measure regarding covered procurement, each Party, including its procuring entities, without prejudice of the notes in Sections A (Central Government Entities), B (Other Covered Entities), C (Services) and Section D (General Notes) of Annex 11A (Government Procurement Coverage) shall not:
(a) treat a locally established supplier less favourably than another locally established supplier on the basis of the 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.
Procurement Methods
1. A procuring entity shall use an open tendering procedure for procurement unless Article 11.9 or Article 11.10 applies.
Rules of Origin
1. For the purposes of 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 same Party.
Measures Not Specific to Procurement
2. Paragraphs 1 and 2 shall not apply to customs duties and charges of any kind imposed on or in comnection 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 procurement.
Use of Electronic Means
3. The Parties shall seek to provide opportunities for procurement to be undertaken through electronic means, including for the publication of procurement information, notices, and tender documentation, and for the receipt of tenders, generally, the full cycle of procure to pay.
4. When conducting procurement by electronic means, a procuring entity shall:
(a) ensure that the procurement is conducted using Procurement System, information technology systems, and software, including those related to authentication and encryption of information, that are generally available and interoperable with other generally available Procurement System, 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 11.6. Publication of Procurement Information
1. Each Party shall promptly publish any measure of general application relating to procurement, and any change or addition to this information.
2. Each Party shall list the paper or electronic means through which the Party publishes the information described in paragraph 1 and the notices required by Article 11.7, Article 11.9.3, and Article 11.16.3.
3. Each Party shall, on request, respond to inquiries relating to the information referred to in paragraph 1.
Article 11.7. Notices of Intended Procurement
1. For each procurement, except in the circumstances described in Article 11.10, a procuring entity shall publish a notice of intended procurement through the appropriate paper or electronic means. 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 for covered procuring entities through a single point of access.
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 11.9, 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.
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 11.8. Conditions for Participation
1. A procuring entity shall limit any conditions for participation in a 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, unless this condition is objectively justifiable and linked to the subject matter of the procurement; 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 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 that adversely reflect on the commercial integrity of the supplier; or
(f) failure to pay taxes.
Article 11.9. 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.
Selective Tendering
2. 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 procurement; and
(b) include in the notice of intended procurement the information specified in Article 11.7.3. (a), (b), (d), (g), (h), and (i).
3. 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 11.7.3. (c), (e), and (f) to the qualified suppliers that it notifies as specified in Article 11.14.2; 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.
4. 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.
List of Suppliers
5. A Party, including its procuring entities, may establish or maintain a 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 supplierâs 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 11.6.2.
6. A Party, including its procuring entities, that establishes or maintains a 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 5.
7. If a supplier that is not included on a list submits a request for participation in a procurement based on the list and submits all required documents, within the time period provided for in Article 11.14.2, 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
8. 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 list of the decision with respect to the request or application.
9. If a procuring entity or other entity of a Party rejects a supplier's request for participation or application for inclusion on a list, ceases to recognize a supplier as qualified, or removes a supplier from a list, the entity shall promptly inform the supplier and on request of the supplier, promptly provide the supplier with a written explanation of the reason for its decision.
Article 11.10. Limited Tendering
1. Subject to paragraph 2, 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 11.7, Article 11.8, Article 11.9, Article 11.11, Article 11.12, Article 11.13, Article 11.14, or Article 11.15. A procuring entity may use limited tendering taking into consideration the following circumstances:
(a) if, inresponse 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;
(iii) no suppliers satisfied the conditions for participation; or
(iv) the tenders submitted were collusive, provided that the procuring entity does not substantially modify the essential requirements set out in the notices or tender documentation.
(b) if the good or service 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 authorized agents, of goods or services that were not included in the initial procurement if a change of supplier for such additional goods or services:
(i) cannot be made for 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 a good purchased on a commodity market or exchange;
(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 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 services may not exceed 50 per cent of the value of the initial contract;
(g) for new services consisting of the repetition of similar services which conform to a basic project for which an initial contract was awarded and for which the entity has indicated in the notice of intended procurement concerning the initial service that limited tendering procedures might be used in awarding contracts for such new services;
(h) 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;
(i) if a contract is awarded to the winner of a design contest, provided that:
(i) the contest has been organized in a manner that is consistent with this Chapter; and
(ii) the contest is judged by an independent jury with a view to award a design contract to the winner.
(j) in so far as is strictly necessary if, for reasons of extreme urgency brought about by events unforeseeable by the procuring entity, the good or service could not be obtained in time by means of open or selective tendering.
3. For each contract awarded in accordance with paragraph 2, a procuring entity shall prepare a report in writing, or maintain a record, that includes the name of the procuring entity, the value and kind of good or service procured, and a statement that indicates the circumstances and conditions described in paragraph 2 that justified the use of limited tendering.
Article 11.11. Negotiations
1. A Party may provide for its procuring entities to conduct negotiations in the context of procurement if:
(a) the procuring entity has indicated its intent to conduct negotiations in the notice of intended procurement required under Article 11.7;
(b) it appears from the evaluation that no tender is obviously the most advantageous in terms of the specific evaluation criteria set out in the notice of intended procurement or tender documentation;
(c) there is a need to clarify the terms and conditions; or
(d) all bids exceed the allocated prices provided for in the procuring entity's budget.
2. A procuring entity shall:
(a) ensure that any elimination of suppliers participating in negotiations is carried out in accordance with the evaluation criteria set out in the notice of intended procurement or tender documentation; and
(b) when negotiations are concluded, provide a common deadline for the remaining participating suppliers to submit any new or revised tenders.
Article 11.12. 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, recognized 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, a procuring entity may conduct market research in developing specifications for a particular procurement.
6. 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.
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.