(c) the procuring entity accepts tenders by electronic means.
6. The use of paragraph 5, in conjunction with paragraph 4, shall in no case result in the reduction of the time period for tendering established in accordance with paragraph 3 to less than 10 days from the date on which the notice of intended procurement is published.
7. Notwithstanding any other provision of this Article, if a procuring entity purchases commercial goods or services, or any combination thereof, it may reduce the time period for tendering established in accordance with paragraph 3 to not less than 13 days, provided that it publishes by electronic means, at the same time, both the notice of intended procurement and the tender documentation. In addition, if the procuring entity accepts tenders for commercial goods or services by electronic means, it may reduce the time period established in accordance with paragraph 3 to not less than 10 days.
8. If a procuring entity covered under Section B or C of Annexes 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico) has selected all or a limited number of qualified suppliers, the time period for tendering may be determined by mutual agreement between the procuring entity and the selected suppliers. In the absence of agreement, the time period shall not be less than 10 days.
ARTICLE 21.11
Negotiation
1. A Party may provide for its procuring entities to conduct negotiations with suppliers if:
(a) the procuring entity has indicated its intent to conduct negotiations in the notice of intended procurement required pursuant to Article 21.6.2; or
(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.
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 21.12
Limited Tendering
1. Provided it is not used for the purpose of avoiding competition among suppliers or in a manner that discriminates against suppliers of the other Party or protects domestic suppliers, a procuring entity may use limited tendering and choose not to apply Articles 21.6 to 21.8, 21.9.8 to 21.9.12 and Articles 21.10, 21.11, 21.13 and 21.14 under any of the following circumstances:
(a) provided that the requirements of the tender documentation are not substantially modified in the case:
(i) no tenders were submitted or no suppliers requested participation;
(ii) no tenders that conform to the essential requirements of the tender documentation were submitted;
(iii) no suppliers satisfied the conditions for participation; or
(iv) the tenders submitted have been collusive;
(b) the goods or services can be supplied only by a particular supplier and no reasonable alternative or substitute goods or services exist for any of the following reasons:
(i) the tendering is for a work of art;
(ii) the protection of patents, copyrights or other exclusive rights; or
(iii) an absence of competition for technical reasons;
(c) for additional deliveries by the original supplier 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 economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, software, services or installations procured under the initial procurement; and
(ii) would cause significant inconvenience or substantial duplication of costs for the procuring entity;
(d) insofar as is strictly necessary if, for reasons of extreme urgency brought about by events unforeseeable by the procuring entity, the goods or services could not be obtained in time using open tendering or selective tendering;
(e) for goods purchased on a commodity market;
(f) if a procuring entity procures a prototype or a first good or service 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 first good or service may include limited production or supply in order to incorporate the results of field testing and to demonstrate that the 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;
(g) for purchases made under exceptionally advantageous conditions that only arise in the very short term in the case of unusual disposals such as those arising from liquidation, receivership or bankruptcy, but not for routine purchases from regular suppliers; or
(h) if a contract is awarded to a winner of a design contest provided that:
(i) the contest has been organised in a manner that is consistent with the principles of this Chapter, in particular relating to the publication of a notice of intended procurement; and
(ii) the participants are judged by an independent jury with a view to a design contract being awarded to a winner.
2. A procuring entity shall prepare a report in writing on each contract awarded under paragraph 1. The report shall include the name of the procuring entity, the value and kind of goods or services procured and a statement indicating the circumstances and conditions described in paragraph 1 that justified the use of limited tendering.
ARTICLE 21.13
Electronic Auctions
If a procuring entity intends to conduct a covered procurement using an electronic auction it shall provide, before commencing the electronic auction, each participant with:
(a) the automatic evaluation method, including the mathematical formula, that is based on the evaluation criteria set out in the tender documentation and that will be used in the automatic ranking or re-ranking during the auction;
(b) the results of any initial evaluation of the elements of its tender if the contract is to be awarded on the basis of the most advantageous tender; and
(c) any other relevant information relating to the conduct of the auction.
ARTICLE 21.14
Treatment of Tenders and Awarding of Contracts
Treatment of Tenders
1. A procuring entity shall receive, open and treat all tenders under procedures that guarantee the fairness and impartiality of the procurement process, and the confidentiality of tenders.
2. If a procuring entity provides a supplier with an opportunity to correct unintentional errors of form between the opening of tenders and the awarding of the contract, the procuring entity shall provide the same opportunity to all participating suppliers.
Awarding of Contracts
3. To be considered for an award, a tender shall be submitted in writing and shall, at the time of opening, comply with the essential requirements set out in the notices and tender documentation and be from a supplier that satisfies the conditions for participation.
4. Unless a procuring entity determines that it is not in the public interest to award a contract, it shall award the contract to the supplier that the procuring entity has determined to be capable of fulfilling the terms of the contract and that, based solely on the evaluation criteria specified in the notices and tender documentation, has submitted:
(a) the most advantageous tender; or
(b) if price is the sole criterion, the lowest price.
5. If a procuring entity receives a tender with a price that is abnormally lower than the prices in other tenders submitted, it may verify with the supplier that the supplier satisfies the conditions for participation and is capable of fulfilling the terms of the contract.
6. A procuring entity shall not use options, cancel a procurement or modify awarded contracts in a manner that circumvents the obligations under this Chapter.
7. Each Party may provide, as a general rule, for a standstill period between the award and the conclusion of a contract in order to give sufficient time to unsuccessful bidders to review and challenge the award decision.
ARTICLE 21.15
Transparency of Procurement Information
Information Provided to Suppliers
1. A procuring entity shall promptly inform participating suppliers of its contract award decisions and, on the request of a supplier, shall do so in writing. Subject to Articles 21.16.2 and 21.16.3, a procuring entity shall, on request, provide an unsuccessful supplier with an explanation of the reasons why the procuring entity did not select its tender and the relative advantages of the successful supplier's tender.
Publication of Award Information
2. A procuring entity shall publish a notice in the appropriate paper or electronic medium listed in Section I of the Annex 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico) no later than 72 days after the award of each contract covered by this Chapter. If the procuring entity publishes the notice only in an electronic medium, the information shall remain readily accessible for a reasonable period of time. The notice shall include at least the following information:
(a) a description of the goods or services procured;
(b) the name and address of the procuring entity;
(c) the name and address of the successful supplier;
(d) the value of the successful tender or the highest and lowest offers taken into account in the award of the contract;
(e) the date of award; and
(f) the type of procurement method used, and in cases where limited tendering was used in accordance with Article 21.12, a description of the circumstances justifying the use of limited tendering.
Maintenance of Documentation, Reports and Electronic Traceability
3. A procuring entity shall, for a period of at least three years from the date it awards a contract, maintain:
(a) the documentation and reports of tendering procedures and contract awards relating to covered procurement, including the reports required under Article 21.12; and
(b) data that ensure the appropriate traceability of the conduct of covered procurement by electronic means.
Exchange of Statistics
4. Each Party shall collect and exchange on an annual basis statistics on its procurements covered by this Chapter. 13 Those statistical reports shall contain, with respect to contracts awarded by all procuring entities of the Party concerned covered under this Chapter statistics on the estimated value of contracts awarded for covered procurement on a global basis and broken down by categories of procuring entities.
5. To the extent that such information is available, each Party shall provide statistics on the country of origin of products and services purchased by its procuring entities. With a view to ensuring that such statistics are comparable, the Sub-Committee on Public Procurement established pursuant to Article 21.19 shall provide guidance on the methods to be used. With a view to ensuring effective monitoring of procurements covered by this Chapter, the Joint Council may decide to modify the requirements set out in paragraph 4.
6. If a Party requires notices concerning awarded contracts to be published electronically, pursuant to paragraph 2, and if such notices are accessible to the public through a single database in a form permitting analysis of the awarded contracts, the Party may, instead of reporting to the Sub-Committee on Public Procurement, provide a link to the website, together with any instructions necessary to access and use such data.
ARTICLE 21.16
Disclosure of information
Provision of Information to Parties
1. On request of the other Party, a Party shall provide promptly any information necessary to determine whether a covered procurement was conducted fairly, impartially and in accordance with this Chapter, including information on the characteristics and relative advantages of the successful tender. The Party that receives the information shall not disclose that information to any supplier if this would prejudice competition in future tenders, except after obtaining the consent of the Party that provided the information.
Non-Disclosure of Information
2. Notwithstanding any other provision of this Chapter, a Party, including its procuring entities, shall not provide to any particular supplier information that might prejudice fair competition between suppliers.
3. Nothing in this Chapter shall be construed as requiring a Party, including its procuring entities, authorities and review bodies, to disclose confidential information if such disclosure:
(a) would impede law enforcement;
(b) might prejudice fair competition between suppliers;
(c) would prejudice the legitimate commercial interests of particular persons, including the protection of intellectual property; or
(d) would otherwise be contrary to the public interest.
ARTICLE 21.17
Domestic Review Procedures
1. Each Party shall provide a timely, effective, transparent and non-discriminatory administrative or judicial review procedure through which, in the context of a covered procurement in which the supplier has, or has had, an interest, a supplier may challenge:
(a) a breach of this Chapter; or
(b) if the supplier does not have a right to challenge directly a breach of this Chapter under the law of a Party, a failure to comply with a Party's measures implementing this Chapter.
The procedural rules for all challenges shall be in writing and made generally available.
2. In case of a complaint by a supplier, arising in the context of covered procurement in which the supplier has, or has had, an interest, that there has been a breach or a failure as referred to in paragraph 1, the Party of the procuring entity conducting the covered procurement shall encourage the procuring entity and the supplier to seek resolution of the complaint through consultations. The procuring entity shall accord impartial and timely consideration to any such complaint in a manner that is not prejudicial to the supplier's participation in ongoing or future procurement or its right to seek corrective measures under the administrative or judicial review procedure.
3. Each supplier shall be allowed a sufficient period of time to prepare and submit a challenge, which in no case shall be less than 10 days from the time when the basis of the challenge became known or reasonably should have become known to the supplier.
4. Each Party shall establish or designate at least one impartial administrative or judicial authority that is independent of its procuring entities to receive and review a challenge by a supplier arising in the context of a covered procurement.
5. If a body other than an authority referred to in paragraph 4 initially reviews a challenge, the Party shall ensure that the supplier may appeal the initial decision to an impartial administrative or judicial authority that is independent of the procuring entity whose procurement is the subject of the challenge.
6. Each Party shall ensure that a review body that is not a court shall have its decision subject to judicial review or have procedures that provide that:
(a) the procuring entity shall respond in writing to the challenge and disclose all relevant documents to the review body;
(b) the participants to the proceedings (hereinafter referred to as "participants") shall have the right to be heard prior to a decision of the review body being made on the challenge;
(c) the participants shall have the right to be represented and accompanied;
(d) the participants shall have access to all proceedings;
(e) the participants shall have the right to request that the proceedings take place in public and that witnesses may be presented; and
(f) the review body shall make its decisions or recommendations in a timely fashion, in writing, and shall include an explanation of the basis for each decision or recommendation.
7. Each Party shall adopt or maintain procedures that provide for rapid interim measures to preserve the supplier's opportunity to participate in the procurement. Those interim measures may result in suspension of the procurement process. The procedures may provide that overriding adverse consequences for the interests concerned, including the public interest, may be taken into account when deciding whether such measures should be applied. Any justification for not acting shall be provided in writing.
8. Each Party shall adopt or maintain procedures that provide for corrective action or compensation for the loss or damages suffered if a review body has determined that there has been a breach or a failure as referred to in paragraph 1. The compensation for the loss or damages suffered may be limited to either the costs for the preparation of the tender or the costs relating to the challenge, or both.
ARTICLE 21.18
Modifications and Rectifications to Coverage
1. The European Union may modify or rectify Annex 21-A (Covered Procurement of the European Union) and Mexico may modify or rectify Annex 21-B (Covered Procurement of Mexico).
Modifications
2. If a Party intends to modify Annex 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico) respectively, that Party shall:
(a) notify the other Party in writing; and
(b) include in the notification a proposal for appropriate compensatory adjustments to the other Party to maintain a level of coverage comparable to that existing prior to the modification.
3. Notwithstanding subparagraph 2(b), a Party does not need to provide compensatory adjustments if the modification covers a procuring entity over which the Party has effectively eliminated its control or influence. Government control or influence over the covered procurement of procuring entities covered under Section C of Annexes 21-A (Covered Procurement of the European Union), or under Sub-list 2 of each State of Section B or Section C of Annex 21-B (Covered Procurement of Mexico) is presumed to be effectively eliminated if the procuring entity is exposed to competition on markets to which access is not restricted.
4. The other Party may object to the proposed modification, notified pursuant to paragraph 2, if it disputes that:
(a) an adjustment proposed in accordance with subparagraph 2(b) is adequate to maintain a comparable level to the existing coverage provided for in this Chapter;
(b) the modification covers a procuring entity over which the Party has effectively eliminated its control or influence in accordance with paragraph 3.
The objection shall be made in writing within 45 days of receipt of the notification referred to in subparagraph 2(a) or that Party shall be deemed to have accepted the adjustment or modification, including for the purposes of Chapter 31 (Dispute Settlement).
Rectifications
5. The following changes to Annexes 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico) shall be considered a rectification of a purely formal nature, provided that they do not affect the existing coverage provided for in this Chapter:
(a) a change in the name of a procuring entity;
(b) a merger of two or more entities covered under Section A to C of Annexes 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico); and
(c) the separation of an entity covered under Section A to C of Annexes 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico) into two or more entities that are all added to the procuring entities covered under the same Section of Annexes 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico).
6. Each Party shall notify the other Party every three years following the entry into force of this Agreement of proposed rectifications to Annexes 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico).
7. A Party may notify the other Party of an objection to a proposed rectification within 45 days from having received the notification. If a Party submits an objection, it shall explain why it considers the proposed rectification is not a change provided for in paragraph 5, and describe the effect of the proposed rectification on the coverage provided for in this Chapter. If no objection is submitted in writing within 45 days after the date of receipt of the notification, the other Party shall be deemed to have accepted the proposed rectification.
Consultations and Dispute resolution.
8. If the other Party objects to the proposed modification or rectification, the Parties shall seek to resolve the issue through consultations. If no agreement is found within 60 days after the date of receipt of the objection, the Party seeking to modify or rectify Annex 21-A (Covered Procurement of the European Union) or Annex 21-B (Covered Procurement of Mexico) may refer the matter to dispute settlement under Chapter 31 (Dispute Settlement). The proposed modification or rectification shall take effect only when both Parties have agreed or if so provided for in the ruling of a panel in a final report in accordance with Article 31.13 (Final Report).
ARTICLE 21.19
Sub-Committee on Public Procurement
The Sub-Committee on Public Procurement established pursuant to Article 1.10 (Sub-Committees and other Bodies of Part III of this agreement) shall address matters related to the implementation and operation of this Chapter, such as:
(a) the modification of Annexes 21-A (Covered Procurement of the European Union) and 21-B (Covered Procurement of Mexico);
(b) the preparation for the Joint Council of the decisions modifying Annexes 21-A (Covered Procurement of the European Union) and 21-B (Covered Procurement of Mexico;
(c) matters regarding government procurement related to this Chapter that are referred to it by a Party; and
(d) any other matter related to the operation of this Chapter.
Chapter 22. STATE-OWNED ENTERPRISES, ENTERPRISES GRANTED SPECIAL RIGHTS ORPRIVILEGES AND DESIGNATED MONOPOLIES
ARTICLE 22.1
Definitions
For the purposes of this Chapter:
(a) "Arrangement" means the Arrangement on Officially Supported Export Credits, developed within the framework of the OECD or a successor undertaking, whether developed within or outside of the OECD framework, that has been adopted by at least 12 original WTO Members that were Participants to the Arrangement as of 1 January 1979;
(b) "commercial activities" means activities the end result of which is the production of a good or supply of a service, which will be sold in the relevant market in quantities and at prices determined by an enterprise through the conditions of supply and demand, and are undertaken with an orientation towards profit-making 14 ;
(c) "commercial considerations" means price, quality, availability, marketability, transportation and other terms and conditions of purchase or sale; or other factors that would normally be taken into account in the commercial decisions of a private enterprise operating according to market economy principles in the relevant business or industry;
(d) "designate" means to establish or authorise a monopoly, or to expand the scope of a monopoly to cover an additional good or service;
(e) "designated monopoly" means an entity, public or private, including a consortium or a government agency, that in any relevant market in the territory of a Party is designated as the sole supplier or purchaser of a good or service, but does not include an entity that has been granted an exclusive intellectual property right solely by reason of the grant; 15
(f) "enterprise granted special rights or privileges" means an enterprise, public or private, including a subsidiary, to which a Party has granted special rights or privileges, in law or in fact; special rights or privileges arise if a Party designates, or limits the number of, enterprises authorised to supply a good or a service according to criteria that are not objective, proportional and non-discriminatory, thereby substantially affecting the ability of any other enterprise to supply the same good or service in the same geographical area under substantially equivalent conditions;
(g) "financial institution" and "financial service", have the same meaning as in Article 18.1 (Definitions);
(h) "service supplied in the exercise of governmental authority" means a service supplied in the exercise of governmental authority as defined in GATS and, if applicable, the Annex on Financial Services to GATS; 16
(i) "state-owned enterprise" means an enterprise owned or controlled by a Party 17 .
ARTICLE 22.2
Delegated Authority
Unless otherwise specified in this Agreement, each Party shall ensure that any person, including a state-owned enterprise, an enterprise granted special rights or privileges or a designated monopoly that has been delegated regulatory, administrative or other governmental authority by a Party, acts in accordance with the Party's obligations as set out under this Agreement in the exercise of that authority.
ARTICLE 22.3