WORLD TRADE
ORGANIZATIONGPA/W/113
24 May 2000
(00-2102)
Committee on Government Procurement Original:  English
REVIEW OF THE AGREEMENT ON GOVERNMENT PROCUREMENT
STREAMLINING THE PROVISIONS OF ARTICLES VII, IX, X, XI, AND XV RELATING
TO THE DEFINITION AND USE OF TENDERING PROCEDURES, INVITATIONS TO
PARTICIPATE, AND TIME-PERIODS FOR TENDERING
Submission by the United States
The following communication, dated 19 May 2000, has been received from the Permanent
Mission of the United States with the request that it be circulated to the Committee on Government
Procurement.
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Introduction
As noted in the Chairman's report on the Committee's informal meeting on 7 March 2000
(Job No. 1454, dated 9 March 2000), the Committee has agreed that its ongoing work under
Article XXIV:7(b) will focus in its next meeting on Articles VII-XV and paragraphs 1, 3 and 4 of
Article XVIII.  In order to facilitate progress, the United States is submitting the following drafting
proposals relating to Articles VII, XI, X, XI, XIV and XV of the Agreement's current text.  The
United States believes that the combined approach to these Articles is appropriate, given the close
interrelationships between them.  The drafting proposals are followed by a point-by-point explanation
of the changes being proposed.
The United States welcomes other delegations' comments on these proposals and hopes that
delegations will consider them to be a useful basis for progress.  We reserve the right to amend this
submission or to propose additional text on these issues in the light of the Committee's discussions
and ongoing domestic consultations.
Proposed Text
Article A:  General Provisions Relating to Tendering Procedures
1. The Parties shall ensure that their procuring entities, in conducting procurement subject to this
Agreement, use tendering procedures that are in accordance with the provisions of Article B (open
tendering and qualified open tendering), Article C (Selective Tendering) or Article E (Limited
Tendering).
2. The Parties shall ensure that their procuring entities use open tendering or qualified open
tendering procedures to conduct procurement subject to this Agreement, except:
(a) where selective tendering procedures are appropriate because most potential suppliers
of the goods or services being procured may have difficulty meeting governmentrequirements which are unusual or more demanding than the requirements of typical
private sector buyers, and the efficient conduct of the procurement requires thatGPA/W/113
Page 2
competition be limited to a closed list of suppliers whose qualifications have been
established in advance;  or
(b) in the specific circumstances identified in Article E of this Agreement for the use of
limited tendering.
General Provisions Relating to Time-Periods for Suppliers' Responses to Notifications3. Except in the exceptional circumstances identified in Article D:1(d) and Article E:4(g) of this
Agreement, any prescribed time-periods for the tendering process shall be adequate to allow
participating suppliers of all Parties to this Agreement to prepare and submit responsive tenders.
1
4. Procuring entities shall apply the same time-periods for all suppliers.
5. If, as a result of a need to amend information provided to suppliers during the procurement
process, a procuring entity must extend the time-peri od for the tendering procedures, such entity shall
permit all participating suppliers to submit final tenders in accordance with a common deadline.
General Provisions For the Dissemination of Information Relating to Specific Tendering Procedures6. Procuring entities shall not provide to any s upplier information with regard to a specific
procurement in a manner which would have the effect of precluding competition.
7. If it becomes necessary to amend information provided to suppliers during the procurement
process, procuring entities shall provide the amended information:
(a) to all of the suppliers that are participating at the time the information is amended;
and
(b) in adequate time to allow such suppliers to modify and re-submit their initial tenders,
as appropriate.
Article B:  Procedures for Open Tendering and Qualified Open Tendering
Definitions1. For the purposes of this Agreement:
(a) "open tendering" procedures are those procedures in which the procuring entity
permits all interested suppliers to partic ipate in a procurement competition;  and
(b) "qualified open tendering" procedures are those procedures in which the procuring
entity:
(1) requires each supplier to be qualified before such supplier may participate in
the tendering process;  and
(2) permits interested suppliers to apply for qualification while the tendering
process is under way.
                                                     
1 In determining the adequacy of such time-periods, entities should, consistent with their own
reasonable needs, take into account such factors as the complexity of the intended procurement, the extent of
subcontracting anticipated and the normal time for transmitting tenders from foreign as well as domestic points.GPA/W/113
Page 3
2. Procuring entities using open tendering and qualified open tendering procedures shall publish
a notice of intended procurement for each contract to  be awarded.  The notice shall be published in the
appropriate publication listed in Appendix II.  Such publications shall be in an electronic or paper
media which is widely disseminated and readily accessible to the general public.
3. Procuring entities shall include the following information in each notice of intended
procurement:
(a) a description of the intended procurement, including the nature and quantity of the
goods or services to be procured;
(b) the name and address of the procuring entity and other information necessary to
contact the entity and obtain all relevant documents relating to the contract;
(c) the procurement method that will be used and whether it will involve negotiation;(d) the time-limits set for the submission of tenders and, if qualified open tendering
procedures are used, the time-limits for the submission of applications to qualify for
participation in the intended procurement;
(e) the amount and terms of payment of any sum payable for the tender documentation;
and
(f) an indication that the procurement is covered by the Agreement.
Time-Periods for Suppliers' Responses to Notifications Under Open Tendering and Qualified Open
Tendering Procedures
4. Except as provided for in Article D of this Agreement:
(a) A procuring entity using open tendering or qualified open tendering procedures shall
provide no less than 40 calendar days between the date on which a notice of intended
procurement is published and the date on which the tendering procedures relating to
that notice are closed.
(b) A procuring entity using qualified open tendering procedures shall provide no less
than 25 calendar days, beginning on the date on which the notice of intended
procurement is published, for interested suppliers to submit their applications for
qualification.
Article C:  Procedures for Selective Tendering
Definition
1. For the purposes of this Agreement, "selective tendering" procedures are those procedures in
which a procuring entity:
(a) requires each supplier to be included on a closed list of qualified suppliers before
such supplier may participate in the tendering process;  and
(b) does not provide an opportunity for interested suppliers to apply for inclusion on the
relevant closed list of qualified suppliers while the tendering process is under way.GPA/W/113
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Notification of Procurement Opportunities Under Selective Tendering Procedures
2. Procuring entities using selective tendering procedures shall distribute a notice of each
intended procurement to each of the suppliers on the entity's closed list of qualified suppliers for that
procurement.  Such entities may choose, when they deem it appropriate, not to publish such notice inone of the publications listed in Appendix II.
3. At least 60 days before establishing a closed list of qualified suppliers for the purposes of
conducting a selective tendering procedure, procuring entities shall publish, in one of the publications
listed in Appendix II, a notice of the opportunity for interested suppliers to apply for inclusion in that
list.  Such notice shall contain the following information:
(a) a description, in as much detail as is available, of the goods or services to be procured
from suppliers included on that list;
(b) the conditions to be fulfilled by suppliers in order to be included on that list;
(c) the period of validity of the list;  and
(d) a statement that the notice constitutes a notice of the opportunity to apply for
qualification to be included on the list.
4. For as long as a procuring entity maintains a closed list of qualified suppliers, such entity
shall publish a notice of the opportunity for interested suppliers to apply for inclusion on that list, in
accordance with the requirements of paragraph 3 above, at least once each year.
5. Procuring entities maintaining such closed lists shall, on request, provide additional
information in a timely manner which allows all suppliers who have expressed an interest to have a
meaningful opportunity to assess their interest and, if they choose, apply for inclusion on a closed list
of qualified suppliers.  This information shall include the information contained in the notices referred
to in Article B:3 of this Agreement, to the extent available.
Time-Periods for Suppliers' Responses to Notifications Under Selective Tendering Procedures
6. Except as provided for in Article D of this Agreement, procuring entities using selective
tendering procedures shall provide no less than 40 calendar days between the date on which a notice
of intended procurement is distributed to participating suppliers and the date on which the tendering
procedures relating to that notice is closed.
Article D:  Provisions for Shorter Time-Periods in Open Tendering, Qualified Open Tendering, and
Selective Tendering Procedures
1. Under the following circumstances, procuring entities may replace the time-periods referred
to in Articles B:4 and C:6 with a period which is sufficiently long to enable suppliers to submitresponsive tenders, but which in no case shall be less than 10 calendar days from the date on which
the notice of intended procurement is published:
(a) if a separate notice has been published at least 40 calendar days and not more than
12 months in advance, and the notice contains:  a description of the subject-matter ofthe procurement; the time-limits for the submission of tenders or, when appropriate,
applications for qualification; and the address from which documents relating to the
procurement may be requested;GPA/W/113
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(b) in the case of the second or subsequent publications dealing with contracts of a
recurring nature;
(c) in the case of procurement of commercial goods and services which are sold or
offered for sale to and customarily purchased and used by non-governmental buyersfor non-governmental purposes, except that a procuring entity shall not reduce
time-periods for this reason if the entity uses qualified open tendering procedures or
selective tendering procedures;  and
(d) when, for duly substantiated reasons of extreme urgency brought about by events
unforeseeable by the entity, the adherence to the time-periods referred to in
Articles B:4 and C:6 would result in serious injury to the entity or the relevant Party;
however, concerns relating to the amount of  funds available to an entity within a
particular period of time shall not be considered to be a reason of extreme urgency for
these purposes.
2. When a procuring entity publishes a notice of intended procurement in accordance with
Articles B, C and D of this Agreement in an electronic media listed in Appendix II, the entity may
reduce the time-periods provided for in this Agreement by up to five calendar days.  The use of this
provision, however, shall in no case result in the reduction of those time-periods to less than
10 calendar days from the date on which the notice of intended procurement is published.
Article E:  Limited Tendering
Definition
1. For the purposes of this Agreement, "limited tendering procedures" are procedures in which a
procuring entity invites tenders only from a supplier or suppliers that the entity identifies through an
internal, non-competitive selection process.
Provisions on the Use of Limited Tendering Procedures2. When a procuring entity uses a limited tendering procedure, it may choose not to publish or
distribute a notice of intended procurement prior to the award of the procurement contract.
3. Procuring entities shall not use limited tendering procedures for the purpose of avoiding
competition among suppliers or in a manner that constitutes a means of discrimination between
suppliers of the other Parties or protection of domestic suppliers.  Notwithstanding any of the
provisions of Article E:4, below, entities shall not use limited tendering because of a lack of advanceplanning by the requiring activity or concerns relating to the amount of funds available to an entity
within a particular period of time.
4. Procuring entities may use limited tendering procedures in the following circumstances and
subject to the following conditions, as applicable:
(a) in the absence of tenders that conform to the essential requirements in the tender
documentation provided in a prior open, qualified open, or selective tendering
procedure, on condition that the requirements of the initial procurement are not
substantially modified in the contract as awarded;
(b) in the absence of tenders from suppliers which meet qualification requirements
established for a prior open qualified or selective tendering procedure;GPA/W/113
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(c) where, for works of art, or for reasons connected with the protection of exclusive
rights, such as patents, copyrights or proprietary information or where there is an
absence of competition for technical reasons, the goods or services can be supplied
only by a particular supplier and no reasonable alternative or substitute exists;
(d) for additional deliveries by the original supplier that are intended either as
replacement parts, extensions, or continuing services for existing equipment,
software, services or installations, where a change of supplier would compel the
entity to procure products or services not meeting requirements of interchangeability
with existing equipment, software, services, or installations;
(e) for goods purchased on a commodity market;(f) where an entity needs to procure consulting services regarding matters of a
confidential nature, the disclosure of which could reasonably be expected to
compromise government confidences, cause economic disruption or similarly be
contrary to the public interest.
(g) insofar as is strictly necessary where, for reasons of extreme urgency brought about
by events unforeseeable by the entity, the goods or services could not be obtained in
time by means of open or selective tendering procedures and the use of such
procedures would result in serious injury to the entity, the entity's programmeresponsibilities, or the responsible Party;
5. Procuring entities shall prepare a report in writing on each contract awarded under
paragraph 4.  Each such 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 inparagraph 4 that justified the use of limited tendering.  Entities shall retain each such report for a
minimum of three years.
Section 2:  Discussion
A:1. The current text of the GPA is neutral with respect to the choice of procurement methods.
While the GPA must continue to provide the flexibility to use different methods, as appropriate to thecircumstances, the United States believes it would be appropriate to establish a presumption in favour
of open (i.e., fully transparent) tendering procedures.  Therefore, this Article proposes specific rules
for the use of different procurement procedures.
This proposal also defines a new type of procedure, "qualified open tendering", which
corresponds to a subset of the procedures defined in the current GPA as "selective tendering", i.e.,
"selective tendering" procedures in which qualification is continuously open to interested suppliers.
This also requires modification of the current definition of "selective tendering" (see below).  The
United States believes that re-defining tendering procedures in this way is desirable in order to
emphasize that tendering procedures involving a qualification requirement need not be lesstransparent or competitive than "normal" open tendering procedures.
In the view of the United States, each of these categories of procurement procedures should
be considered to be broad, with each one potentially encompassing a range of detailed tendering
practices – some of which may be complex, and some very simple.  The basic rules proposed for eachcategory, then, should be flexible enough to be applied to the full range of procedures that may be
used under each category.   Draft Article A:1 would ensure that each procurement covered by the
GPA would be subject to the provisions for one of the four categories of tendering procedures
proposed in this draft.GPA/W/113
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A:2. This paragraph reflects the view, noted above, that use of open tendering procedures should
be the preferred procurement method.  Draft subparagraphs (a) and (b) specifically define the
circumstances in which other than open tendering procedures could be used.
Draft subparagraph A:2(a) defines the circumstances in which the United States believes it
may be appropriate to limit competition for a contract covered by the GPA to a closed list of potential
suppliers that have been pre-qualified to participate in that procurement.  This category of
procurement methods is referred to as "selective tendering" in this proposal (see also the discussion of
draft Article C, below).  The United States believes that the use of such procedures is only appropriate
in circumstances where the use of "open tendering" or "qualified open tendering" procedures may be
inefficient and excessively burdensome to the procuring entity because most suppliers that have not
been pre-qualified would not be capable of meeting government requirements that are unusual ormore demanding than is typical in private sector markets.
Similarly, draft subparagraph A:2(b) would limit the use of "limited tendering procedures" to
the specific circumstances identified in draft Article E.  We call delegations' attention to the
streamlining of the specific justifications for the use of "limited tendering proposed in this draft(see below).
A:3. Draft paragraphs A:3, 4 and 5 set out some general principles relating to time-periods used in
tendering procedures subject to the GPA.  Draft paragraph A:3 notes that there are certain exceptional
circumstances in which entities should be able to  reduce standard tendering time-periods.  Draft
Article D proposes other opportunities to reduce th e normal time-periods, including when electronic
communications are used and when entities are procuring commercial items (see below).  However,
except for emergency situations, the draft proposes that procuring entities' tendering procedures must
in any case provide sufficient time for interested suppliers of all Parties to "prepare and submit
responsive tenders".
A:4-5. Draft paragraph A:4 is intended to ensure non-discrimination in the application of tendering
and qualification time-periods.  This issue is most likely to arise in situations in which a procuring
entity decides to extend a previously notified time-period.  Frequently, such extensions may be
announced in order to allow entities to negotiate with a small group of suppliers who have been
determined, through competitive tendering, to have offered the most attractive tenders.  Draft
paragraph A:5, therefore, is based on the current text of Article XIV:4(d).
A:6-7. These provisions, which are drawn from Artic le VII:2 and Article IX:10 of the existing GPA
text, help to ensure non-discrimination in the exchan ge of information between procuring entities and
potential suppliers.  It is important to recognize that these provisions do not necessarily require
procuring entities to provide all interested suppliers with exactly the same amount of information on aparticular procurement.  In some circumstances, some suppliers may not seek as much information as
others, and the procuring entities' responses to more detailed requests from some suppliers would not
necessarily preclude effective competition.  In tendering procedures where entities choose to negotiate
with a small group of suppliers who have been de termined, through competitive tendering, to have
offered the most attractive tenders, it may not be appropriate to provide the same amount ofinformation to suppliers whose tenders have been eliminated as to those that continue to participate in
the negotiated competition.
It is not uncommon for entities, after publishing an initial invitation to tender, to have to
revise the information provided in that invitati on.  In order to ensure effective competition and
non-discrimination among GPA Parties' suppliers, it is important to ensure that such information be
provided in sufficient time for all interested suppliers to respond and, if necessary, to modify their
tenders.  In these circumstances, it may be appropriate for the entity to extend the time-period for
tendering, as discussed above.GPA/W/113
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B:1. Article B of this proposal establishes basic requirements for the use of "open tendering" and
"qualified open tendering" (newly defined in this paper).  So that the Parties and their procuring
entities can more clearly understand which requirements of this draft would apply in which
circumstances, we have re-arranged the current text of the GPA so that each article begins by defining
the categories of procurement procedures to which the provisions of that article apply.
The procedures that would fall within the newly-defined category of "qualified open
tendering" are very similar to the existing procedures for "open tendering", in that an entity using such
procedures publishes an advance notice of the procurement and invites all interested parties to
participate in the tendering competition.  The princi pal difference is that the category of "qualified
open tendering" includes a qualification requirement.  The United States believes that the existence of
a qualification requirement does not, in itself, indicate that the procurement process should be lesstransparent or competitive than "normal" open tendering procedures.
The key difference in this proposal between "selective tendering" and "qualified open
tendering" is that entities using "qualified open tendering" procedures are able to process applications
for qualification while the tendering procedures are under way.  By contrast, entities using selectivetendering procedures, as defined in this proposal, will only allow suppliers who have been included in
a pre-existing "closed list" of qualified suppliers to participate in tendering for those procurements.
Under this proposal, "selective tendering" procedures would only be used in the circumstances
identified in draft paragraph A:2(a).  If those circumstances do not exist, an entity that uses
qualification requirements would do so in accordance with the provisions for qualified open tenderingin draft Article B.
B:2. This paragraph would require publication of a notice of intended procurement for each
covered contract that is awarded through the use of  "open tendering" or "qualified open tendering"
procedures.  The United States believes that entities should have the choice of publishing such noticesin either paper or electronic media (or both), provided that such media are widely disseminated and
readily accessible to the general public.
B:3. This paragraph would require that each notice of intended procurement subject to this chapter
include certain basic information about the procurem ent.  The information requirements included in
this proposal are less detailed than those applying to Annex 1 entities in current Article IX, but would
slightly increase the amount of information required of Annex 2 and Annex 3 entities using opentendering or qualified open tendering procedures (i.e., the information provided by Annex 2 and
Annex 3 entities using such procedures would in clude information on the procurement procedure to
be used and on the cost of the tendering).  The United States believes that the information that would
be required under this draft paragraph is the minimal amount of information that is needed for
suppliers to make informed decisions as to whether they may have an interest in a notifiedprocurement.
B:4. This paragraph would maintain the minimum time-period of 40 days for tendering and, where
"qualified open tendering" procedures are used, would maintain the minimum time-period of 25 days
for the submission of suppliers' applications for qualification.  However, under circumstances outlinedin draft Article D, such time-periods could be reduced to 10 days (see below).  The United States
believes that these provisions would, in normal circumstances, provide suppliers with adequate time
to submit tenders and applications for qualification.  At the same time, they would provide sufficient
flexibility for entities to reduce the normal time-periods in a manner that improves efficiency without
significantly affecting suppliers' ability to participate effectively in tendering procedures.
It is important to stress that these time-periods are minimum requirements.  For procurements
with extremely complicated and detailed requirements, it may be appropriate to allow more than
40 days for suppliers to prepare and submit their tenders.GPA/W/113
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C:1. We call delegations' attention to the fact that, in this proposal, the definition of "selective
tendering" is narrower than the definition of that te rm in the current text.  The United States suggests
that any deviations from the normal notification requirements for open and qualified open tendering
should be limited to situations in which entities restrict competition to closed lists of qualified
suppliers (defined in this proposal as "selective tendering") or where they use "limited tendering".
C:2. This paragraph is intended to ensure that all suppliers included on a permanent list of
qualified suppliers are treated equally in the distribution of invitations to participate in a procurement
being conducted on the basis of that list.  It also permits entities to choose not to publish such
invitations, when appropriate.
C:3-4. These paragraphs are based closely on the existing Article IX:9.C:5. In the periods between Parties' invitations for applications to be included in a closed list, draft
paragraph 5 would allow interested suppliers to obtain information on how to establish their
qualifications when the opportunity arises.  The existing text does not include this provision.
C:6. This paragraph would maintain the minimum time-period for selective tendering procedures
in the existing text, subject to the possibilities fo r flexibility in reducing those time-periods provided
for in draft Article D (see below).
D:1. This paragraph sets out circumstances in which entities conducting procurements subject to
the GPA could reduce the normal time-periods for tendering and, when appropriate, the submission of
applications, to a minimum of 10 calendar days.  Draft subparagraphs (a) and (b) correspond to the
existing GPA Article XI:3(a) and (b).
Draft subparagraph (c) would provide new flexibility for entities to reduce time-periods when
they purchase commercial items which are normally boug ht and sold in the private sector.  The United
States believes that, in such circumstances, the Parties can be assured that suppliers will enjoy
non-discriminatory competitive opportunities in shorter time-periods than would normally apply
under this Agreement.  At the same time, we do not believe it would be appropriate to allow such
shorter time-periods when entities use qualification requirements, since the use of such requirements
indicates that the procurement need is sufficiently complex to warrant a longer time-period.
Draft subparagraph (d), which corresponds to the existing Article XI:3(c), provides the
flexibility to reduce time-periods in urgent situations that are beyond the control of the procuring
entity.  However, the United States believes that a lack of planning or concerns about the availability
of budgeted funds within a particular time-period should not be considered to be situations of
"extreme urgency brought about by events unforeseeable by the entity".
D:2. The United States believes it is appropriate to provide the flexibility for entities to reduce all
time-periods by five calendar days when they publish a notification of intended procurement in an
appropriate electronic media.  The use of such media typically allows interested suppliers to obtain
the information more quickly than is the case when no tifications must be transferred by the entity to a
publisher, published in paper format, and distributed by mail.  In situations where entities publish in
an electronic media and one or more of the circum stances described in paragraph D:1 apply, however,
the United States does not believe it is appropriate to allow the minimum time-periods to be reduced
to less than 10 calendar days.
E:1. This paragraph offers a slightly more detailed definition than the existing Article VII:3(c).
E:2. This paragraph simply clarifies entities' right to award contracts under limited tendering
procedures without publishing an advance notice or invitation for tenders.GPA/W/113
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E:3-4. As in the existing text, these paragraphs set out the conditions in which the use of limited
tendering procedures is appropriate.  However, this draft departs in two significant ways from the
existing text.  First, draft paragraph 3 would specify that a lack of planning and foreseeable fiscal
constraints would not, in themselves, constitute an appropriate justification for the use of limited
tendering.  This, of course, would not prevent the use of limited tendering if one of the conditionslisted in draft paragraph 4 also applied.
Second, the list of conditions for the use of limited tendering in draft paragraph 4 excludes a
number of conditions currently provided for in Article XV of the existing text.  The elements of
Article XV:1 that are excluded are:
• in subparagraph (a), the reference to situations in which "the tenders submitted have
been collusive";
• (e), relating to the procurement of "prototypes";
• (f), relating to the procurement of "additional construction services";
• (g), relating to the procurement of "new construction services consisting of the
repetition of similar construction services which conform to a basic plan";
• (i), relating to procurement "under exceptionally advantageous conditions";  and
• (j), relating to design contests.
Because unnecessary use of limited tendering procedures may have serious implications for the
achievement of the Parties objectives under this Agreement, the United States believes it isappropriate, in the context of the Article XXIV:7(b) mandate, for the Parties to review the
appropriateness of the above provisions.  From our perspective, it is not clear why more open and
transparent procurement procedures would not be appropriate in the circumstances described in these
provisions.
E:5. This draft paragraph streamlines the existing text of Article XV:2.
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