3. The Committee:
a) shall be composed of an equal number of representatives of each Party. Each Party shall establish its procedures for the selection of its representatives;
b) meet at least once a year, as well as when requested by any Party, unless otherwise agreed by the Parties;
(c) establish its rules of procedure; and d) shall make its decisions by consensus.
4. When the Committee considers it appropriate, it may establish such subcommittees and working groups as it deems pertinent and determine their scope of action and mandate. Each subcommittee and working group shall be composed of representatives of each Party and may:
a) when it deems it necessary, call to participate in its meetings or consult with:
i) representatives of non-governmental organizations, such as standardization bodies, or private sector chambers and associations;
ii) scientific; or
iii) technical experts; and
b) determine its work program, taking into account relevant international activities.
5. In addition to the provisions of paragraph 4, the Committee shall establish:
a) the Subcommittee on Health Standardization Measures; and
b) any other subcommittees and working groups it deems appropriate to discuss, among others, the following topics:
i) the identification and nomenclature of the goods and services subject to the standardization measures;
ii) technical regulations and quality and identity standards;
iii) packaging, labeling and presentation of information for consumers, including measurement systems, ingredients, sizes, terminology, symbols and other related matters;
iv) programs for product approval and post-sale surveillance;
v) principles for the accreditation and recognition of testing facilities, inspection bodies and conformity assessment bodies;
vi) the development and implementation of a uniform system for the classification and reporting of hazardous chemicals and the communication of chemical hazards;
vii) programs to ensure compliance with the provisions in force, including training and inspection by the personnel responsible for regulation, analysis and verification of compliance;
viii) the promotion and application of good laboratory practices;
ix) the promotion and application of good manufacturing practices;
x) criteria for the evaluation of potential damage to the environment due to the use of goods or services;
xi) analysis of the procedures for the simplification of the requirements for the importation of goods and for the provision of specific services;
xii) guidelines for testing of chemicals, including industrial, agricultural, pharmaceutical and biological chemicals; and
xiii) means to facilitate consumer protection, including consumer redress.
Article 14-18. Technical Consultations.
1. When a Party has doubts about the interpretation or application of this Chapter with respect to the standardization measures, metrology or related measures of another Party, the Party may alternatively resort to the Committee or the dispute settlement mechanism of the Agreement. The Parties involved may not use both avenues simultaneously.
2. When a Party decides to approach the Committee, it shall inform the Committee so that it may consider the matter or refer it to a subcommittee or working group, or other competent forum, with a view to obtaining non-binding technical advice or recommendations from them.
3. The Committee shall consider any matter referred to it pursuant to paragraphs 1 and 2 as expeditiously as possible and, likewise, shall bring to the attention of the Parties any technical advice or recommendations it develops or receives in relation to that matter. Once the Parties concerned receive from the Committee any technical advice or recommendation that they have requested, they shall send to the Committee a written response regarding that technical advice or recommendation, within a period of time to be determined by the Committee.
4. Pursuant to paragraphs 2 and 3, in the event that the technical recommendation issued by the Committee does not resolve the dispute between the Parties involved, they may invoke the dispute settlement mechanism of the Treaty. If the Parties concerned so agree, consultations held before the Committee shall constitute consultations for the purposes of Article 19-05.
5. A Party asserting that a standardization measure of another Party is inconsistent with the provisions of this Chapter shall have to demonstrate such inconsistency.
Chapter XV. Public Sector Procurement
Section A. Scope of Application and National Treatment
Article 15-01. Definitions.
For the purposes of this chapter, the following definitions shall apply:
construction services contract: a contract for the performance by any means of civil or building works as indicated in the appendix to annex 5 of article 15-02.
entity: an entity included in Annexes 1 and 2 to Article 15-02 and in the Protocol to be developed by the Parties pursuant to Article 15-26 for state or departmental government entities.
technical specification: a specification that establishes the characteristics of goods or processes and related production methods, or the characteristics of services or their related methods of operation, including the applicable administrative provisions. It may also include or deal exclusively with terminology, symbols, packaging, marking or labeling requirements applicable to a good, process, or method of production or operation.
bidding procedures: open bidding procedures, selective bidding procedures or restricted bidding procedures. open bidding procedures: procedures in which all interested suppliers may submit bids.
restricted tendering procedures: procedures by which an entity communicates individually with suppliers only in the circumstances and in accordance with the conditions described in Article 15-16.
selective bidding procedures: procedures in which, under the terms of Article 15-12, suppliers invited by the entity may submit bids.
supplier: a person who has provided or may provide goods or services in response to an entity's invitation to tender.
locally established supplier: inter alia, a natural person resident in the territory of the Party, an enterprise organized or established under the laws of the Party, and a branch or representative office located in the territory of the Party.
services: among others, construction services contracts, unless otherwise specified.
Article 15-02. Scope of Application and Coverage of Obligations.
1. This Chapter applies to measures that a Party adopts or maintains in relation to purchases:
(a) a central or federal government entity listed in Annex 1 to this Article; a government enterprise listed in Annex 2 to this Article; or a state or departmental government entity as the Parties may establish in the Protocol referred to in Article 15-26;
(b) of goods, in accordance with Annex 3 to this Article, of services, in accordance with Annex 4 to this Article, or of construction services, in accordance with Annex 5 to this Article; and (c) of services, in accordance with Annex 5 to this Article.
(c) when the value of the contract to be awarded is estimated to equal or exceed the value of the following thresholds, calculated and adjusted in accordance with the inflationary rate of the United States of America as set forth in Annex 6 to this article, for the case of:
i) central or federal government entities, of US$50,000 for contracts for goods, services or any combination thereof, and US$6.5 million for contracts for construction services;
ii) governmental enterprises, of US$250,000 thousand for contracts for goods, services or any combination thereof, and US$8 million for contracts for construction services; and
(iii) state and departmental government entities, the value of the applicable thresholds, in accordance with what the Parties shall establish in the Protocol referred to in Article 15-26.
2. Paragraph 1 shall be subject to the reservations and general notes indicated in Annexes 7 and 8 to this article, respectively.
3. Subject to paragraph 4, where the procurement contract that an entity is to award is not subject to this chapter, its provisions shall not be construed to cover the components of any goods or services of that contract.
4. No entity of the Parties shall conceive, develop or structure a purchase contract in such a way as to avoid the obligations of this Chapter.
5. Purchases include acquisitions by methods such as purchase, lease or rental, with or without an option to purchase. Purchases do not include:
a) non-contractual agreements or any form of governmental assistance, including cooperative agreements, transfers, loans, capital transfers, guarantees, tax incentives and governmental provision of goods and services to individuals or to state, departmental and regional governments; and
b) the acquisition of fiscal agency or depository services, liquidation and administration services for regulated financial institutions, nor the sale and distribution services of public debt.
Article 15-03. Valuation of Contracts.
1. Each Party shall ensure that, in determining whether a contract is covered by this chapter, its entities apply the provisions of paragraphs 2 through 7 to calculate the value of that contract.
2. The value of the contract shall be the estimated value at the time of publication of the call for bids in accordance with Article 15-11.
3. When calculating the value of a contract, entities shall take into account all forms of remuneration, including bonuses, fees, commissions and interest.
4. In addition to the provisions of Article 15-02, paragraph 4, an entity may not choose a valuation method or split the purchase requirements into separate contracts for the purpose of evading the obligations contained in this chapter.
5. When an individual requirement results in the award of more than one contract or the contracts are awarded in separate parts, the basis for valuation shall be:
a) the actual value of similar successive or recurring contracts entered into during the preceding fiscal year or the preceding twelve months, adjusted where possible for changes in quantity and value anticipated for the following twelve months; or
b) the estimated value of successive or recurring contracts to be entered into during that fiscal year or in the twelve months following the initial contract.
6. In the case of lease or rental contracts, with or without an option to purchase, or contracts in which a total price is not specified, the basis for valuation shall be:
a) in the case of contracts entered into for a specified term, if the term is twelve months or less, the calculation shall be made on the basis of the total value of the contract during its term, or, if greater than twelve months, on the basis of the total value including the estimated residual value; or
b) in the case of contracts for an indefinite term, the basis shall be the estimated monthly payment multiplied by 48.
If the entity is uncertain as to whether a contract is for a definite or indefinite term, it shall calculate the value of the contract using the method indicated in paragraph b).
7. When the bidding conditions require optional clauses, the basis for valuation will be the total value of the maximum allowable purchase, including all possible optional purchases.
Article 15-04. National Treatment and Non-discrimination, and Most Favored Nation Treatment.
1. With respect to the measures covered by this Chapter, each Party shall accord to goods of another Party, to suppliers of such goods and to service suppliers of another Party, treatment no less favorable than the most favorable treatment accorded:
a) to its own assets, and suppliers; and
b) to goods and suppliers of another Party.
2. With respect to the measures covered by this Chapter, no Party may:
a) giving a supplier established in its territory less favorable treatment than that accorded to another supplier established in that territory, by reason of the degree of foreign affiliation or ownership; or
b) discriminate against a supplier established in its territory on the ground that the goods or services offered by that supplier for a particular purchase are goods or services of another Party.
3. Paragraph 1 does not apply to measures relating to import taxes or other charges of any kind on or in connection with importation, to the method of levying such taxes and charges, or to other import regulations, including restrictions and formalities.
Article 15-05. Rules of Origin.
For the purposes of government procurement covered by this Chapter, no Party shall apply rules of origin to goods imported from any other Party other than, or inconsistent with, the rules of origin set out in Chapter VI.
Article 15-06. Denial of Benefits.
A Party may deny benefits under this Chapter to a service supplier of another Party, after notice and consultations, where the Party determines that the service is being supplied by an enterprise that does not engage in substantial business activities in the territory of any Party and is owned or controlled by persons of a non-Party.
Article 15-07. Prohibition of Special Compensatory Conditions.
1. Each Party shall ensure that its entities do not take into account, request or impose special countervailing conditions in the qualification and selection of suppliers, goods or services, in the evaluation of tenders or in the award of contracts. For the purposes of this Article, special countervailing conditions are conditions that an entity imposes or takes into account prior to or during the procurement process to promote local development or improve balance of payments accounts through local content requirements, licensing of technology, investment, countertrade or similar requirements.
2. The Parties shall exchange information on the results of the implementation of programs aimed at supporting local industry, or the performance of any type of committee for the same purposes, such as advisory committees.
3. Each Party may have recourse to the Dispute Settlement Mechanism of Chapter XIX if, as a result of the implementation of the programs or the performance of the committees referred to in paragraph 2, its suppliers are discriminated against.
Article 15-08. Technical Specifications.
1. Each Party shall ensure that its entities do not develop, adopt or apply any technical specification that has the purpose or effect of creating unnecessary obstacles to trade.
2. Each Party shall ensure that, where appropriate, any technical specifications established by its entities:
(a) defined in terms of performance criteria rather than design or descriptive characteristics; and
(b) is based on international standards, national technical regulations, recognized national standards, or building codes.
3. Each Party shall ensure that the technical specifications established by its entities do not require or make reference to a particular trademark or trade name, patent, design or type, specific origin or producer or supplier, unless there is no other sufficiently precise or comprehensible way of describing the requirements of the purchase and provided that, in such cases, words such as "or equivalent" are included in the bidding documents.
4. Each Party shall ensure that its entities do not solicit or accept, in a manner that would have the effect of impeding competition, advice that could be used in preparing or adopting any technical specification in respect of a particular procurement from a person that may have a commercial interest in that procurement.
Section B. Bidding Procedures
Article 15-09. Bidding Procedures.
1. The bidding procedures shall be applied in accordance with the provisions of the annex to this article, for the parts indicated therein.
2. Each Party shall ensure that the tendering procedures of its entities:
a) applied in a nondiscriminatory manner; and
b) are consistent with this article and with articles 15-10 to 15-16.
3. Each Party shall ensure that its entities:
a) do not provide any supplier with information about a particular purchase in such a way that it has the effect of preventing competition; and
b) provide all suppliers with equal access to information regarding a purchase during the period prior to the issuance of any solicitation or bidding documents.
Article 15-10. Qualification of Suppliers.
1. Pursuant to Article 15-04, in the qualification of suppliers during the tendering procedure, no entity of a Party may discriminate between suppliers of the other Parties or between domestic suppliers and suppliers of the other Parties.
2. An entity's rating procedures shall be consistent with the following:
(a) the conditions for supplier participation in tendering procedures shall be published sufficiently in advance to allow suppliers adequate time to initiate and, to the extent consistent with the efficient operation of the procurement process, complete qualification procedures;
(b) conditions for participation in tendering procedures, including financial guarantees, technical qualifications and information necessary to demonstrate the financial, commercial and technical capacity of suppliers, as well as verification of the supplier's compliance with such conditions, shall be limited to those essential to ensure the performance of the contract in question;
(c) the financial, commercial and technical capacity of a supplier shall be determined on the basis of its overall activity, including both its activity exercised in the territory of the Party of the supplier and its activity in the territory of the Party of the purchasing entity, if any;
(d) an entity may not use the supplier qualification process, including the time it requires, for the purpose of excluding suppliers of another Party from a list of suppliers or not considering them for a particular purchase;
(e) an entity shall recognize as qualified suppliers those suppliers of another Party that are eligible to participate in a particular purchase;
(f) an entity shall consider for a particular purchase those suppliers of another Party that apply to participate in the purchase and have not yet been qualified, provided that sufficient time is available to complete the qualification procedure;
(g) an entity maintaining a permanent list of qualified suppliers shall ensure that suppliers may apply for qualification at any time, that all qualified suppliers so requesting are included in the list within a reasonably short period of time, and that all suppliers included in the list are notified of the cancellation of the list or their removal from the list;
(h) where, after publication of the invitation pursuant to Article 15-11, a supplier that has not yet been qualified applies to participate in a particular procurement, the entity shall promptly initiate the qualification procedure;
(i) an entity shall communicate to any supplier that has applied for qualification, the decision on whether it has been qualified; and
(j) where an entity rejects an application for qualification, or ceases to recognize the qualification of a supplier, upon the supplier's request, the entity shall promptly provide relevant information on the reasons for its action.
3. Each Part:
(a) shall ensure that each of its entities uses a single qualification procedure; where the entity establishes the need for a different procedure and, at the request of another Party, is prepared to demonstrate such need, it may use additional qualification procedures; and
(b) shall endeavor to minimize the differences between the rating procedures of its entities.
4. Nothing in paragraphs 2 and 3 shall prevent an entity from excluding a supplier for reasons such as bankruptcy or misrepresentation.
Article 15-11. Invitation to Participate.
1. Except as provided in Article 15-16, an entity shall publish an invitation to participate for all purchases in accordance with paragraphs 2, 3 and 5 in the appropriate publication listed in the annex to this Article.
2. The invitation to participate shall take the form of a call for proposals, which shall contain the following information:
a) a description of the nature and quantity of the goods or services to be acquired, including any future purchase options and, if possible:
(i) an estimate of when such options may be exercised; and
(ii) in the case of recurring contracts, an estimate of when subsequent solicitations may be issued;
b) an indication of whether the bidding is open or selective;
c) any date for starting or concluding the delivery of the goods or services to be purchased;
d) the address to which the application to be invited to bid or to qualify for the list of suppliers must be sent and the deadline for receipt of the application;
e) the address to which the bids shall be sent and the deadline for their receipt;
f) the address of the entity that will award the contract and that will provide any information necessary to obtain specifications and other documents;
g) astatement of any economic or technical conditions, and of any financial guarantees, information and documents required from suppliers;
h) the amount and method of payment of any amount to be paid for the bidding documents; and
i) whether the entity invites bids for purchase, lease or rental, with or without an option to purchase.
3. Notwithstanding paragraph 2, an entity identified in Annex 2 to Article 15-02 or in the Protocol to be developed by the Parties pursuant to Article 15-26 for state or departmental government entities, may use as an invitation to participate a scheduled solicitation to purchase, which shall contain the information in paragraph 2 to the extent available to the entity, but which shall include, at a minimum, the following information:
a) a description of the object of the purchase;
b) the deadlines set for the receipt of bids or requests to be invited to bid;
c) the address from which documentation related to the purchase may be requested;
d) an indication that interested suppliers will express to the entity their interest in the purchase; and
e) identification of an information center in the entity where additional information may be obtained.
4. An entity that uses as an invitation to participate a scheduled procurement solicitation shall subsequently invite suppliers that have expressed interest in the procurement to confirm their interest, based on information provided by the entity that shall include, at a minimum, the information set forth in paragraph 2.
5. Notwithstanding paragraph 2, an entity identified in Annex 2 to Article 15-02 or in the Protocol that the Parties develop pursuant to Article 15-26 for state or departmental government entities may use a solicitation relating to the qualification system as an invitation to participate. An entity using such a solicitation shall provide in a timely manner, in accordance with the considerations referred to in Article 15-15, paragraph 8, information that provides all suppliers that have expressed an interest in participating in the procurement with a realistic opportunity to evaluate their interest. The information shall normally include the information required for the solicitation referred to in paragraph 2. The information provided to one interested supplier shall be provided without discrimination to all other interested suppliers.
6. In the case of selective tendering procedures, an entity that maintains a permanent list of qualified suppliers shall insert annually, in the appropriate publication referred to in the annex to this article, a notice containing the following information:
a) an enumeration of all lists in force, including their headings, in relation to the goods or services, or categories of goods or services to be purchased through the lists;
b) the conditions to be met by suppliers in order to be included in the lists and the methods by which each of those conditions will be verified by the entity concerned; and
c) the period of validity of the lists and the formalities for their renewal.
7. Where, after publication of an invitation to participate, but before the expiration of the time limit for opening or receipt of tenders as stated in the invitations or tender documentation, the entity considers it necessary to make changes to or reissue the invitation or tender documentation, the entity shall ensure that the new or amended invitation or tender documentation is given the same publicity as the original documentation. Any important information provided to a supplier about a particular purchase shall be provided simultaneously to other interested suppliers in sufficient time to allow all interested suppliers adequate time to review the information and to respond.
8. An entity shall indicate in the solicitations referred to in this article that the purchase is covered by this chapter.