1. In order to ensure optimal effective competition among suppliers of the Parties in selective tendering procedures, an entity shall invite, for each purchase, as many domestic suppliers and suppliers of the other Parties as is consistent with the efficient operation of the procurement system.
2. Subject to paragraph 3, an entity that maintains a standing list of qualified suppliers may select from among the suppliers on the list those suppliers that will be invited to bid on a particular purchase. In the selection process, the entity shall provide an equal opportunity to suppliers on the list.
3. Pursuant to Article 15-10, paragraph 2(f), an entity shall permit a supplier requesting to participate ina particular procurement to submit a tender and shall consider that tender. The number of additional suppliers permitted to participate shall be limited only for reasons of efficient operation of the procurement system.
4. When not inviting or admitting a supplier to tender, an entity shall, at the request of the supplier, promptly provide the supplier with relevant information on the reasons for not inviting or admitting the supplier to tender.
Section B. Bidding Procedures
Article 15-13. Time Limits for Bidding and Delivery.
1. One entity:
(a) by setting a deadline, provide suppliers of another Party sufficient time to prepare and submit tenders prior to the closing of the tender;
(b) in establishing a time limit, in accordance with its own reasonable needs, take into account such factors as the complexity of the purchase, the anticipated degree of subcontracting and the time normally required for transmitting bids by mail from both overseas and domestic locations; and
(c) when establishing the deadline for the receipt of bids or applications for admission to bidding, shall give due consideration to delays in publication.
2. Subject to paragraph 3, an entity shall provide that:
(a) in open tendering procedures, the time limit for receipt of a bid shall not be less than forty days from the date of publication of a call for bids, in accordance with Article 15-11;
(b) in selective tendering procedures not involving the use of a standing list of qualified suppliers, the time limit for the submission of an application for admission to tender shall be not less than twenty-five days from the date of publication of a solicitation in accordance with Article 15-11, and the time limit for the receipt of tenders shall be not less than forty days from the date of publication of a solicitation; and
(c) in selective tendering procedures involving the use of a standing list of qualified suppliers, the period for the receipt of tenders shall be not less than forty days from the date of the first invitation to tender, but where the latter date does not coincide with the date of publication of an invitation to tender referred to in Article 15-11, not less than forty days shall elapse between the two dates.
3. An entity may reduce the time periods provided for in paragraph 2 in accordance with the following:
(a) as provided in article 15-11, paragraph 3 or 5, when a call for bids has been published within a period of not less than forty days and not more than twelve months, the forty-day period for the receipt of bids may be reduced to not less than twenty-four days;
(b) in the case of a second or subsequent publication relating to recurring contracts, pursuant to article 15-11, paragraph 2, subparagraph (a), the forty-day period for receipt of tenders may be reduced to not less than twenty-four days;
(c) where, for reasons of urgency duly justified by the entity, the time limits specified cannot be complied with, such time limits shall in no case be less than ten days from the date of publication of a notice of convocation pursuant to Article 15-11; or
(d) where 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 uses a solicitation referred to in Article 15-11, paragraph 5, as an invitation to participate, the entity and the selected suppliers may establish, by mutual agreement, the time limits; however, in the absence of agreement, the entity may establish time limits sufficiently long to allow for the proper submission of tenders, which in no case shall be less than ten days.
4. In establishing the delivery date for goods or services and in accordance with its reasonable requirements, an entity shall take into account factors such as the complexity of the purchase, the anticipated degree of subcontracting, and the time realistically required for the production, dispatch and transportation of the goods from the various places of supply.
Article 15-14. Bidding Conditions.
1. When entities provide tender documentation to suppliers, the documentation shall contain all information necessary to enable suppliers to properly submit their tenders, including the information required to be published in the invitation to tender referred to in Article 15-11, paragraph 2, except for the information required under Article 15-11, paragraph 2(h) of that Article. The documentation shall also include:
a) the address of the entity to which the bids are to be sent;
b) the address to which requests for additional information should be sent;
c) the date and time of the closing date for the receipt of bids and the period during which the bids shall remain in effect;
d) the persons authorized to attend the bid opening and the date, time and place of the bid opening;
e) astatement of any economic or technical conditions, and of any financial guarantees, information and documents required from suppliers;
f) a full description of the goods or services to be purchased and any other requirements, including technical specifications, certificates of conformity and any necessary drawings, designs and instructions;
g) the criteria on which the award of the contract will be based, including any factors, other than price, to be considered in the evaluation of bids and the cost elements to be taken into account in evaluating bid prices, such as transportation, insurance and inspection charges and, in the case of goods or services of the other Parties, import duties and other import charges, taxes and currency of payment;
h) payment terms; and
i) any other requirement or condition.
2. One entity:
a) provide the bidding documents upon request of a supplier participating in open tendering procedures or requesting to participate in selective tendering procedures, and respond promptly to any reasonable request for clarification of the bidding documents; and
b) respond promptly to any reasonable request by a supplier participating in the tendering proceedings for relevant information, provided that such information does not give that supplier an advantage over its competitors in the procurement proceedings.
Article 15-15. Submission, Receipt and Opening of Bids and Award of Contracts.
1. The entity shall use procedures for the submission, receipt and opening of bids and award of contracts that are consistent with the following:
(a) bids shall normally be submitted in writing, either directly or by mail;
(b) where tenders transmitted by telex, telegram, telefacsimile or other means of electronic transmission are accepted, the tender submitted shall include all information necessary for evaluation, including the final price proposed by the supplier and a statement that the supplier accepts all terms and conditions of the invitation to tender;
(c) Tenders submitted by telex, telegram, telefacsimile or other means of electronic transmission shall be confirmed promptly by letter or by a signed copy of the telex, telegram, telefacsimile or electronic message;
(d) the contents of the telex, telegram, telefacsimile or electronic message shall prevail in the event of any difference or contradiction between it and any other documentation received after the deadline for receipt of bids has expired;
(e) telephone bidding shall not be permitted;
(f) applications to participate in selective bidding may be submitted by telex, telegram, telefacsimile and, where permitted, by other means of electronic transmission; and
(g) Opportunities to correct formal errors, which are given to suppliers during the period between bid opening and contract award, may not be used in such a way as to discriminate between suppliers.
2. For the purposes of paragraph 1, "means of electronic transmission" includes the means by which the recipient can produce a hard copy of the offer at the place of destination of the transmission.
3. No entity shall penalize a supplier whose bid is received at the office designated in the bidding documents after the expiration of the deadline, when the delay is due only to an oversight on the part of the entity.
4. All tenders solicited by an entity in public or selective tendering procedures shall be received and opened in accordance with procedures and under conditions that ensure the regularity of the opening of tenders. The entity shall retain information relating to the opening of tenders. The information shall remain available to the competent authorities of the Party for use, if required, in accordance with Articles 15-17, 15-18 or Chapter XIX.
5. An entity shall award contracts in accordance with the following:
(a) in order for a bid to be considered for award, it must comply, at the time of opening, with the requirements established in the invitation to bid or in the bidding conditions and come from suppliers that comply with the conditions for participation;
(b) if the entity receives a bid that is abnormally lower in price than the other bids, the entity may check with the supplier to ensure that the supplier satisfies the conditions of participation and is or will be capable of fulfilling the terms of the contract;
(c) unless the entity decides not to award the contract in the public interest, the entity shall award the contract to the supplier that it has determined to be capable of performing the contract and whose bid is the lowest priced or most advantageous in accordance with the specific evaluation criteria set forth in the invitation to tender or in the bidding documents;
(d) awards will be made in accordance with the criteria and requirements set forth in the bidding documents; and
(e) option clauses shall not be used to circumvent this chapter.
6. No entity of a Party may condition the award of a procurement contract on a supplier having previously been awarded one or more contracts by an entity of that Party, or on the supplier's previous work experience in the territory of that Party.
7. One entity:
(a) upon specific request, promptly inform participating suppliers of decisions on contracts awarded and, if so requested by them, in writing; and
(b) upon specific request of a supplier whose bid was not selected, provide relevant information to that supplier as to the reasons why its bid was not selected, the characteristics and advantages of the selected bid, and the name of the successful supplier.
8. Not later than seventy-two days after the award of the procurement contract, an entity shall communicate directly to participating suppliers or insert a notice in the appropriate publication referred to in the annex to Article 15-11 containing the following information:
a) adescription of the nature and quantity of the goods or services that are the object of the contract;
b) the name and address of the entity awarding the contract;
c) the date of the award;
d) the name and address of each supplier selected;
e) the value of the contract, or of the highest and lowest price bids considered for the award of the contract; and
f) the bidding procedure used.
9. Notwithstanding paragraphs 1 through 8, an entity may refrain from disclosing certain information about the award of the contract where such disclosure:
a) could impede the enforcement of laws or would be contrary to the public interest;
b) would prejudice the legitimate commercial interests of a particular person; or
c) was detrimental to fair competition among suppliers.
Article 15-16. Restricted Bidding.
1. An entity of a Party may, in the circumstances and in accordance with the conditions described in paragraph 2, use restricted tendering procedures and thereby deviate from the provisions of Articles 15- 09 through 15-15, provided that restricted tendering procedures are not used to avoid the maximum possible competition or in a manner that constitutes a means of discriminating between suppliers of the other Parties or of protecting domestic suppliers.
2. An entity may use restricted tendering procedures in the following circumstances and under the following conditions, as appropriate:
a) in the absence of bids in response to a call for public or selective bidding or when the bids submitted have resulted from collusion or do not comply with the essential requirements of the bidding conditions, or when the bids have been formulated by suppliers that do not comply with the conditions of participation provided for in accordance with this chapter, provided that the requirements of the initial purchase are not substantially modified in the award of the contract;
b) when, in the case of works of art, or for reasons related to the protection of patents, copyrights or other exclusive rights, or proprietary information, or when for technical reasons there is no competition, the goods or services can only be supplied by a particular supplier and there are no reasonable alternatives or substitutes;
c) to the extent strictly necessary when, for reasons of extreme urgency due to events beyond the entity's control, it would not be possible to obtain the goods or services in a timely manner through competitive or selective bidding;
d) for additional deliveries from the initial supplier either as replacement parts or ongoing services for existing materials, services or facilities, or as an extension of existing materials, services or facilities, where a change of supplier would require the entity to purchase equipment or services that do not conform to the requirement of being interchangeable with existing equipment or services, including software, to the extent that the initial purchase of the software was covered by this chapter;
e) where an entity purchases prototypes or a first good or service to be manufactured at its request in the course of and for the performance of a particular contract for research, experimentation, study or original manufacture. Once such contracts have been fulfilled, the purchase of goods or services made as a result thereof shall be in accordance with Articles 15- 09 through 15-15. The original development of a first good may include its production in limited quantity in order to take into account the results of tests in practice and to demonstrate that the product lends itself to mass production meeting acceptable standards of quality, but does not include mass production to determine commercial viability or to recover research and development costs;
f) for goods purchased in a commodity market;
g) for purchases made on exceptionally favorable terms that are only offered at very short notice, such as extraordinary disposals made by companies that are not normally suppliers; or the disposal of assets of companies in liquidation or under receivership, but does not include ordinary purchases made from regular suppliers;
h) for contracts to be awarded to the winner of an architectural design competition, provided that the competition is:
(i) organized in accordance with the principles of this chapter, including the publication of the invitation to qualified suppliers to bid;
(ii) organized in such a way that the design contract is awarded to the winner; and iii) submitted to an independent panel of judges; and
i) when an entity requires consulting services related to aspects of a confidential nature, the disclosure of which could reasonably be expected to compromise confidential public sector information, cause serious economic harm or, similarly, be contrary to the public interest.
3. Each report shall contain the name of the procuring entity, the value and type of goods or services procured, the country of origin, and a statement of the circumstances and conditions described in paragraph 2 that justified the use of restricted tendering. Each report shall be retained by the entity. They shall be made available to the competent authorities of the Party for use, if required, in accordance with Articles 15-17, 15-18 or Chapter XIX.
Section C. Challenge and Dispute Resolution Procedures.
Article 15-17. Challenge Procedures.
1. The challenge procedures shall be applied in accordance with the provisions of the annex to this article for the Parties indicated therein.
2. In order to promote fair, open and impartial procurement procedures, each Party shall adopt and maintain challenge procedures for purchases covered by this Chapter in accordance with the following:
(a) each Party shall permit suppliers to have recourse to the challenge procedure in relation to any aspect of the procurement process which, for the purposes of this Article, commences from the time an entity has defined its procurement requirement and continues until the award of the procurement contract;
(b) before initiating a challenge procedure, a Party may encourage the supplier to seek with the procuring entity a solution to its complaint;
(c) each Party shall ensure that its entities consider in a timely and impartial manner any complaints or challenges regarding purchases covered by this Chapter;
(d) whether or not a supplier has attempted to resolve its complaint with the entity, or after failure to reach a satisfactory resolution, a Party may not prevent the supplier from initiating a challenge or other remedy;
(e) a Party may request a supplier to notify the entity of the initiation of a challenge procedure;
(f) a Party may limit the period within which a supplier may initiate the challenge procedure, but in no case shall this period be less than ten working days from the time the supplier knows or should have known of the basis of the complaint;
(g) each Party shall establish or designate a review authority with no substantial interest in the outcome of the procurement to receive challenges and issue relevant rulings and recommendations;
(h) upon receipt of the challenge, the reviewing authority shall proceed to investigate it expeditiously;
(i) a Party may require its reviewing authority to limit its considerations to the challenge itself;
(j) in investigating the challenge, the reviewing authority may delay the award of the proposed contract until the challenge is resolved, except in cases of urgency or where delay would be contrary to the public interest;
(k) the reviewing authority shall issue a recommendation to resolve the challenge, which may include directions to the entity to reevaluate the bids, terminate the contract, or rebid the contract;
(l) Generally, entities shall follow the recommendations of the reviewing authority;
(m) at the conclusion of the challenge procedure, each Party shall empower its reviewing authority to make further written recommendations to an entity regarding any phase of its procurement process that has been found to be problematic during the challenge investigation, including recommendations for changes to the entity's procurement procedures, in order to be consistent with this Chapter;
(n) the reviewing authority shall provide in a timely manner and in writing the result of its findings and its recommendations with respect to the challenges, and shall make them available to the Parties and interested persons;
(o) each Party shall specify in writing and make generally available all its challenge procedures; and
(p) in order to verify that the procurement process was conducted in accordance with this Chapter, each Party shall ensure that each of its entities maintains complete documentation relating to each of its purchases, including a written record of all communications substantially affecting each purchase, for a period of at least three years from the date on which the contract was awarded.
3. A Party may request the initiation of the challenge procedure only after the invitation to tender has been published or, if not published, after the tender documentation is available. Where a Party establishes such a requirement, the ten working day period referred to in paragraph 2(f) shall not begin to run before the date on which the invitation has been published or the tender documentation is available.
Article 15-18. Settlement of Disputes.
1. Where a Party considers that a measure of another Party is inconsistent with the obligations of this Chapter or would cause nullification or impairment within the meaning of the Annex to Article 19-02, it shall apply at the option of the complaining Party:
(a) the provisions of Chapter XIX; or
(b) the provisions of chapter XIX with the modifications provided for in paragraphs 2 to 9.
2. Any consulting Party may request in writing the constitution of an arbitral tribunal whenever a matter is not resolved in accordance with Article 19-05 within thirty days following the request for consultations.
3. For the participation of the third Party as complaining Party, instead of the time limit established in article 19-07, paragraph 3, a time limit of five days shall be observed.
4. For the constitution of the arbitral tribunal, instead of the time limits established in Article 19-09, the following shall be observed:
a) the time periods established in paragraph 1, subparagraph b), shall be ten days and three days, respectively;
b) the time limit established in paragraph 1, subparagraph c), shall be five days;
c) the time limits set forth in paragraph 2, subparagraph b), shall be 10 days and three days, respectively; and
d) the time limit established in paragraph 2, subparagraph c), shall be five days.
5. For the challenge, instead of the time limit established in article 19-10, a ten-day period shall be observed.
6. For the preliminary decision, instead of the time limits established in article 19-14, the following shall be observed:
a) the period provided for in paragraph 1 shall be sixty days; and
b) the time limit established in paragraph 2 shall be ten days.
7. For the final decision, instead of the time limits established in article 19-15, the following shall be observed:
a) the period provided for in paragraph 1 shall be twenty days; and
b) the time limit established in paragraph 3 shall be ten days.
8. Pursuant to Article 19-16, paragraph 1, when ordering the period of time for the Parties to comply with the final decision, the arbitral tribunal shall take into account the need for a reduced period of time in the case of disputes arising under this chapter.
9. For the final decision, instead of the term established in article 19-17, a term of forty days shall be observed.
10. The provisions of this article do not prevent a supplier of a Party from initiating the judicial or administrative proceedings available under the domestic law of each Party.
Section D. General Provisions
Article 15-19. Exceptions.
1. Nothing in this Chapter shall be construed to prevent a Party from taking any action or refraining from disclosing information that it considers necessary to protect its essential security interests in connection with the procurement of arms, ammunition or war material, or any other procurement indispensable for national security or national defense purposes.
2. Provided that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between the Parties where the same conditions prevail or a disguised restriction on trade between the Parties, nothing in this Chapter shall be construed to prevent a Party from establishing or maintaining such measures:
a) necessary to protect public morals, order or safety;
b) necessary to protect human, animal or plant life and health;
c) necessary to protect intellectual property; or
d) related to the goods or services of handicapped persons, charitable institutions or prison labor.
Article 15-20. Provision of Information
1. This Article shall be applied in accordance with the provisions of Annex 1 to this Article, for the Parties indicated in that Annex.
2. In accordance with Chapter XXI, each Party shall promptly publish any laws, regulations, case law, administrative rulings of general application and any procedures, including model contract clauses relating to government procurement covered by this Chapter, by insertion in the relevant publications referred to in Annex 2 to this Article.
3. Each Part:
(a) explain to another Party, upon request, its government procurement procedures;
(b) ensure that its entities, upon request from a supplier, promptly explain their government procurement practices and procedures; and
(c) designate upon entry into force of this Treaty one or more information centers for:
(i) facilitate communication between the Parties; and
ii) answer, upon request, all reasonable questions from the other Parties with a view to providing relevant information on matters covered by this chapter.
4. A Party may request additional information on the award of the contract that may be necessary to determine whether a purchase was made in accordance with the provisions of this Chapter with respect to unsuccessful bids. For this purpose, the Party to which the procuring entity belongs shall provide information on the characteristics and relative advantages of the successful bid and the contract price. Where disclosure of this information may prejudice competition in future tenders, the requesting Party may not disclose the information except after consulting with and obtaining the consent of the Party that provided the information.
5. Each Party shall provide to another Party, upon request, information available to that Party or its entities on covered purchases by its entities and on individual contracts awarded by its entities.
6. No Party may disclose confidential information, the disclosure of which may prejudice the legitimate commercial interests of a particular person or be detrimental to fair competition between suppliers, without the formal authorization of the person who provided that information to the Party.
7. Nothing in this Chapter shall be construed to require a Party to furnish confidential information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest.
8. In order to enable effective monitoring of purchases covered by this Chapter, each Party shall collect statistics and provide to the other Parties an annual report in accordance with the following requirements, unless the Parties agree otherwise:
a) statistics on the estimated value of contracts awarded, both below and above the applicable threshold values, broken down by entity;
b) statistics on the number and total value of contracts above the value of the applicable thresholds, broken down by entity, by categories of goods and services established in accordance with the classification systems developed under this chapter and by country of origin of the goods and services procured;
c) statistics on the number and total value of contracts awarded pursuant to Article 15-16, broken down by entity, by category of goods or services, and by country of origin of the goods or services procured; and
d) statistics on the number and total value of contracts awarded in accordance with the exceptions to this chapter established in Annex 7 to Article 15-02, broken down by entity.