RESTRICTED
WORLD TRADE S/WPGR/W/20
7July1997
ORGANIZATION
(97-2833)
Working Party onGATS Rules
SYNTHESIS OFTHE RESPONSES TOTHE QUESTIONNAIRE
ONGOVERNMENT PROCUREMENT OFSERVICES
Note bytheSecretariat
This notepresents asynthesis oftheresponses received sofartotheQuestionnaire on
Government Procurement ofServices (S/WPGR/W/11). Responses havebeencirculated asseparate
documents asaddenda todocument S/WPGR/W/11. Theannex tothisnotegivesthelistoftheresponses
received sofarandthereference under which theyhavebeencirculated.
Incertain cases, thissynthesis refers totheresponses ofindividual Members toillustrate specific
aspects ofprocurement regimes. Thereferences areselective rather thanexhaustive, i.e.thereferences
donotnecessarily include allMembers whose regimes havetherelevant features. Thereferences also
donotimply adefinitive interpretation ofprovisions inMembers 'procurement regimes. Thefollowing
abbreviations areused:
EC European Communities andtheirMember States
HK Hong Kong
Korea Republic ofKorea
NZ NewZealand
US United StatesS/WPGR/W/20
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I. DEFINITION
1. What isthedefinition ofgovernment procurement employed incompleting this
questionnaire?
Several Members havestated thatthereisnolegislative orregulatory definition ofgovernment
procurement (Colombia, NZ). Inmost cases, government procurement isdefined simply asthe
procurement ofgoods andservices bythecentral, provincial andlocal governments, aswellasby
otherpublic entities, which incertain casesinclude "utilities" -i.e.suppliers ofenergy, water, transport
andtelecommunicationsservices(EC,India,Norway,Switzerland).WhilesomeMembershaveincluded
allstateprocurement forthepurpose ofthecurrent survey, others havelimited coverage tofederal
government departments (Canada). OneMember hastaken theprocurement ofservices covered by
theGPAasitsdefinition (Japan), while another hastreated theuseofpublic funds tofinance purchases
either fullyorpartially asthedefining criterion (Poland).
Some havestated thattheterm"procurement" includes allstages oftheprocess bywhich
government agencies acquire from external sources theresources theyneedtofulfil theirmandates
(Australia). Others haveindicated, explicitly orimplicitly, thatprocurement generally doesnotinclude
non-contractual agreements oranyformofgovernment assistance (Korea, US). OneMember hasnoted
thatprocurement includes bothpurchases andsales, aswellasanycontract concerning leasing, rental,
work orsupplies (Argentina).
II. ADMINISTRATIVE STRUCTURE
2. Howaregovernmentprocurementactivitiesadministered?Towhatextentareprocurement
activities centralized? Please specify theidentity ofanycentral procurement agencies andtheir
respective responsibilities.
(Seeresponse toQuestion 3)
III. LAWS AND REGULATIONS INFORCE
3.(a) Please specify thelaws, regulations, rules, guidelines, decrees, decisions andother measures
governing government procurement. What isthescope oftheirapplication? Inparticular, please
describe anyexemptions thatexist. Please provide abrief summary ofthecontent ofeachof
these measures.
(b) Doestheprocurement regime distinguish between theprocurement ofgoods andservices?
Ifso,thenhowistheapplication ofrules determined incases ofjointprocurement involving both
goods andservices?
Adominant theme isthecentralization ofrule-making, andthedecentralization ofoperational
functions. Ingeneral, there arenational (andsometimes provincial) legislation and/or guidelines on
procurement, buttheresponsibility foraward andexecution ofcontracts remains witheachcontracting
entity. Inonecase,therulesoftheregional integration agreement apply toprocurement above certain
threshold values while national lawsapply toprocurement below thethreshold values (EC). National
lawsthemselvesmayonlyapplytoprocurementabovespecifiedthresholdvalues(Norway).Thenational
rules differ indepth, incertain cases specifying relatively detailed procedural obligations, while in
other cases theycontain onlygeneral guidelines. Insome Members, anational public procurement
agency isresponsible formonitoring andenforcement ofprocurement lawsandthedetermination ofS/WPGR/W/20
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procurement policy (Hungary). Inafewcases, however, there arenolawsorregulations relating
specifically toprocurement andeachentity isfreetodetermine itsownprocurement procedures within
thegeneral parameters setbythegovernment 'spurchasing policy (NZ).
Theactual procurement ofservices isinvariably decentralized, andtends totakeplace close
totheend-users. However, incertain cases, procurement above specified thresholds (Korea) and
procurement ofparticular services, likeconstruction services (Norway), takes place through acentral
specialized agency.
Inthelarge majority ofcases, theprocurement regime doesnotdistinguish between the
procurementofgoodsandservices(Brazil,Chile,manyMemberstatesoftheEC,Japan,Korea,Mexico,
Poland, Singapore, Switzerland). Insome cases, eventhough thebasicregime isthesame, theremay,
nevertheless, bespecialized additional rulesthatapply tospecific services suchasafter-sales services
(India), consultancy (HK), design contests (France), construction, major systems, andutilities (US).
Inalimitednumberofcases,thereisoneregulationfortheprocurementofgoods,oneregulation
fortheprocurement ofservices andonefortheprocurement ofconstructions andconstruction works
(Norway, EC,Hungary) eventhough thedifferences between regulations maynotbesignificant. The
threshold values forservice contracts andforgoods contracts areusually thesame. Thethreshold
forconstruction works maybehigher. Ifanentity wishes topurchase something which isconsidered
partly aservice andpartly agood, thecontract isregarded asagoods contract ifthevalue ofthegoods
exceeds thevalue oftheservice involved andviceversa. Inorder tobecovered bytheworks regulation,
theservice hastobearthecharacter ofaworks contract, i.e.concern work onbuildings andsimilar
projects. Services aresometimes treated astheresidual category, i.e.acontract thatisneither asupply
noraworks contract isdeemed tobeaservice contract.
Inonecase, theprocurement ofservices isdecentralized todepartments andagencies while
theprocurement ofgoods isrelatively centralized (Canada). InoneMember, preferences areapplied
bystategovernments onlytogoods andrelated services, andnottoprocurement ofservices alone
(Australia). Inanother case, theregime distinguishes notonlybetween goods andservices, butalso
between specific types ofservices, forinstance between construction works, consultancy, professional
services, execution ofartistic works, telecommunication services andpostal services (Colombia).
IV. PROCUREMENT PROCEDURES APPLIED
4.(a) What procedures arefollowed intheprocurement process?
Thebasicrange ofpermissible procurement procedures arethesameinmostMembers, though
there aresome variations. Asanticipated inthequestionnaire, three broad categories ofprocedures
arecommonly distinguished: (i)public oropentendering procedures under which allinterested parties
maysubmit atender; (ii)selective orrestricted tender procedures under which participation islimited
toacertain number ofselected suppliers, andonlythese suppliers areinvited tosubmit atender;
(iii)limitedtendering,privatecontractorsingletenderinwhichtheawardingauthoritycontactssuppliers
individually, andsometimes onlyasingle supplier. Some Members havespecified thattheterms of
thecontract maybedetermined through negotiations inthecontext oflimited tendering (Chile, India),
while others seem toallow thepossibility ofnegotiations alsoinother cases (EC, Poland).
Insome Members, eveninopentendering procedures, onlyqualified suppliers areinvited to
participate (Brazil, Japan). OneMember conducts astratified tendering procedure (Mexico). Inthe
first"technical" phase, onlytheaspects ofbidspertaining totherequired technical specifications of
theproduct orservice inquestion areexamined. Those bidswhich meetthetechnical requirementsS/WPGR/W/20
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setforthinthebidding conditions qualify forthesecond "financial phase", where priceisthedominant
criterion. Several Members sometimes employ design orother"contests" inthecaseofservice contracts
(Brazil, EC). Under thisprocedure, thecontracting authority mayacquire aplanordesign selected
byajuryafterhaving beenputintocompetition withorwithout theaward ofprizes. Design contests
canbeorganized asapartofanother procedure leading totheaward ofaservice contract, orcan
constitute anindependent procedure ontheirown(EC). Other members havementioned, without further
explanation,proceduressuchas"two-stagetendering","negotiations-with-retaining-competition"(Poland),
and"repeat orders" (India).
InoneMember, public sector purchasers use,onavoluntary basis, theservices ofseveral
private sector supply brokerage companies which specialise inservicing thepurchasers through
consolidated period supply contracts which areestablished through competitive tendering (NZ).
InoneMember, itisstipulated bylawthattechnical specifications generally befreefromany
restrictive requirements soastoallow maximum competition among potential suppliers (US). The
order ofpreference forspecifications is:(1)voluntary standards; (2)commercial itemdescriptions
intheacquisition ofcommercial items; (3)government product descriptions stated predominantly
interms offunctions tobeperformed orperformance required; (4)government product descriptions
stated predominantly interms ofmaterial, finishing schematics, tolerances, operating characteristics,
component parts andother design requirements.
(Itispossible thatother Members havenotaddressed thisaspect oftheirprocurement regimes
because itwasnotexplicitly covered inthequestionnaire.)
(b) Under what circumstances aredifferent procedures used? Forinstance, ifthemethod
useddepends onthevalue oftheprocurement, thethresholds should begiven.
Even though thebasic range ofprocurement methods arethesame inmost Members, there
aresignificant differences intheconditions under which apurchasing agency canresort todifferent
procedures. Insome Members, theprocuring agency hassignificant discretion inchoosing theprecise
procurement procedure within theparameters ofthegovernment 'spurchasing policy andguidelines
(NZ,Australia). InmostMembers, public orselective tendering procedures aretherule,andselective
tenders areexceptions which mayberesorted toinspecial circumstances. Insome cases, these
circumstances arespecified intheplurilateral agreement towhich theMember isparty, while inother
cases these arespecified innational legislation. Itisalsooften thecasethatprocurers havegreater
discretion, andmore freedom toresort tolesscompetitive methods, ifprocurement isbelow specified
thresholds -either specified inaplurilateral agreement orthenational legislation.
Whether acontracting authority usesanopen procedure, aselective procedure oraproject
competition canalsodepend onthetypeofservice which istobeprocured andthecomplexity ofthe
procurement (US). Ifthere aretenders forbasic services thatareeasytocompare andcontracts are
awarded according toprice only, anopenprocedure tends tobeused. Ifevaluation ofthetenders
would betimeconsuming, entities tendtouseselective procedure toensure thatexcessive timeisnot
spent onevaluation (Norway). Thisisalsothecasewhen theservice inquestion cannot bedefined
sufficiently precisely.
Several members permit selective tendering when onlyalimited number ofbidders aresuitable
forfulfilling thecontract duetotheparticular nature ofthesubject ofpublic procurement. Inone
Member, inthecaseofaconstruction project above certain thresholds, acontract official mayrestrict
qualification ofabidder onthebasis ofpastperformance oftheparticipants (Korea). Inother cases,
however,selectiveorlimitedtenderingarepermittedonlywhenthereareatleastsomeminimumnumber
(sometimes three) ofqualified bidders suitable forsubmitting abid(EC, Korea, Hungary).S/WPGR/W/20
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Theconditions onlimited tendering imposed incertain Members arebased onprovisions in
plurilateral agreements, butevenMembers notparty tosuchagreements frequently stipulate similar
conditions. These include: nosatisfactory offers havebeenobtained intheopenorselective procedure;
tenders submitted havebeencollusive; forworks ofartorwhen forreasons ofprotection ofintellectual
property there isonlyonesupplier possible; asaresult ofunforeseen circumstances theprocurement
becomes toourgent toorganise anopenorselective procedure; additional deliveries bytheoriginal
supplierwhichareintendedeitheraspartsorreplacementsforexistingsupplies;unforeseencircumstances
making additional construction services necessary which cannot beseparated from theinitial order,
etc.Some Members havealsostated thatlimited tendering maybeusedwhen itisnotinthepublic
interest tocallfortenders byadvertisement (India). Others permit suchmethods when procurement
isconfidential orsensitive (Singapore). Onemember allows aprivate contract when itispursuant
toaprivate group contract withsmall andmedium enterprises (Korea).
Theconditions forresort tonegotiations varybetween Members. Insome Members, these
conditions aresimilar tothose under which limited tendering ispermitted (Chile, Hungary). Inone
Member, negotiated procedures aresometimes usedintheutilities sector afterthepublication ofcalls
forcompetition (Norway). InthesameMember, stateentities canalsousenegotiated procedures when
itisextremely difficult tospecify thetender documentation tosuchanextent thatbidscanbecompared.
Inyetanother Member, negotiations areundertaken inextreme urgency tomeetthe"emergent demand
within agiven timeframe where sources ofsupplies areknown" (India).
OneMember hasstated thatcontracts involving foreign assistance orcredit maybesubject
totheregulations ofthecompetent entities, interalia,inmatters relating toprocurement procedures
andsystems (Colombia). Another Member states thatinternational tenders shalltakeplace onlywhen
theycanbejustified bytheentity, subject tomarket research, when theresources areobtained through
foreign credits, orwhen thecontract iscovered byinternational agreements (Mexico).
(c) What arethetimelimits forsubmission ofbids?
Most Members require thatsuppliers submit theirbidsbefore thedeadline mentioned inthe
notice fortenders. Theactual deadline varies. Several Members havetimelimits which areinline
withtheprovisions ofaplurilateral agreement. Minimum limits along thefollowing linesarefrequently
observed: 1)public oropentendering procedure: 40daysafterpublication; 2)selective tendering
procedures: 25daysafterpublication forsubmission ofapplications forparticipation, and40days
afterinvitation tosubmit forsubmission ofbids: Some Members, whogiveprocurers freedom in
defining procedures within theparameters ofgeneral guidelines, donotstipulate precise timelimits
(Australia, NZ).
InsomeMembers, timelimits differ according totheentity (Chile), thevalue oftheprocurement
(Korea), thecomplexity oftheprocurement (US), andtheservice inquestion (EC,Chile). OneMember
stipulates alonger timelimit forcontracts advertised bothlocally andoverseas thanforcontracts
advertised onlylocally (Singapore) while another makes asimilar distinction between international
anddomestic tenders (Mexico). InoneMember, required timelimits havebeenrecently reduced for
commercial, off-the-shelf acquisitions andaretobereduced further asmoreprocurements areconducted
electronically (US).
Thetimelimitforreceipt oftenders maybefixed, insome cases, bymutual agreement between
thecontracting entity andtheselected candidates, provided thatalltenderers aregiven equal timeto
prepare andsubmit tenders (EC). OneMember allows, injustified cases, theinviter ofbidstoextend
thedeadline forsubmitting thebidsononeoccasion -provided thattheextension ofthedeadline is
published inanannouncement priortotheexpiry oftheoriginal deadline, andthereason forextending
thedeadline isindicated (Hungary). Insome cases, theinviter ofbidsmayapply anacceleratedS/WPGR/W/20
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procedureinthecourseofprocurementbyinvitationornegotiationwhenthisisjustifiedbyextraordinary
urgency, butthecircumstances must notarise from thenegligence oftheinviter ofbids, andan
accelerated procedure maynotbeapplied inconstruction projects (Hungary).
V. PUBLICITY FOR INVITING TENDERS
5.(a) Howareintended procurements publicised? Areinvitations totender published? Ifso,
where, andinwhat languages?
Inmostcases, procurement opportunities areadvertised insome formofofficial gazette and/or
newspapers ofwidecirculation. Theformer isfrequently obligatory, andthelatter atthediscretion
oftheprocurer. Often these means aresupplemented bypublication inrelevant trade journals or
magazines,contactpointsongovernmentprocurement(Japan),periodichandouts(US)andnotice-boards
(Argentina).SomeMembersalsorequirethepublicationofpreliminarysummaryinformationorperiodic
indicative notices containing theessential characteristics andvalue ofthecontracts thataretobeawarded
overthefollowing 12months (US,EC). Insome cases, while itiscompulsory forfederal entities
topublicise notices, provincial andlocalgovernments maydosoonavoluntary basis(Norway). Only
inoneMember arethere nocentral laws, regulations, orrules forpublication ofnotices (NZ).
There islittleuniformity inlanguage requirements. Sometimes itisonlythelanguage ofthe
country inquestion, while inother cases theuseofoneormore foreign languages isalsorequired.
(b) Dotheextent andformofpublicity differ according totendering procedures applied and/or
onthevalue ofprocurement?
Predictably, invitations totender areinvariably published inthecaseofopen orpublic
procedures, maybepublished inthecaseofselective procedures, butarenotpublished inthecase
ofprivate contracts. Inonemember, thetime-frame forpublication differs between public andselective
tendering procedures (Argentina). Publishing requirements areusually lessrigorous forprocurements
falling below certain thresholds (EC,US).Forinstance, notices intheofficial gazette areonlypublished
insome Members forprocurements above thethreshold values, while notices forother procurements
arepublicised inlocal, regional ornational newspapers (Norway). Thethresholds maydiffer according
totheservice inquestion (Canada). InoneMember, invitations totender for"non-priority services"
contracts (presumably covering services deemed tobeless"tradeable") arenotpublished, while
invitations inthecaseofcertain utilities liketransport andtelecommunication maynotbepublished
(EC).SomeMembersstatethattheextentandformofpublicitydoesnotdependontenderingprocedures
(Japan, Colombia) oronthevalue ofprocurement (Australia, India, Chile, Colombia, Japan).
(c) What details oftheintended procurement arenormally published? Isthere aminimum
setofinformation thatisrequired tobepublished? Ifso,please specify.
Thetypeofinformation thatmust bemade available innotices publicising procurement
opportunities issimilar formostMembers though there aredifferences inthedegree ofdetail. Most
responses mention information suchasname andcontact address ofinviting entity: cleardescription
oftheservice tobeprovided; tender opening andclosing dates; duration ofcontract and/or timelimit
forcompletion oftheservices; address ofenquiry point forfurther information andtender
documentations; deposits andguarantees required; technical standards, qualifications andanyspecial
conditions ofparticipation inthetender; andcriteria fortheaward ofthecontract. Insome cases,
theinformation required tobepublished differs forpublic works fromthoseforotherservice (Argentina,
Mexico).S/WPGR/W/20
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(d) Arethere anycharges forobtaining thefullsetoftender documents? Ifso,please specify
anddescribe howthese charges areset.
Practicewithregardtochargesforobtainingtenderdocumentsvariessomewhat.SomeMembers
donotcharge anyfees,while others leave openthepossibility ofdoing so.Inmostcases where fees
arecharged,however,theirlevelhastoberelatedtotheactualcostofprovisionoftenderdocumentation.
Insome cases, adeposit mayberequired fordocuments which arehanded outfreeofcharge butmust
bereturned totheprocuring entity (EC). Insome Members, advertised tender setsaresoldonpayment
offeeswhich depend onthevalue oftheprocurement (India, Argentina). Inonecase,theGovernment 's
purchasing guidelines statethattheprice charged ordeposit required, ifany,fortender orrelated
documents should notbesohighastodiscourage bonafidecompetent contractors orproducers from
participating inthetendering proceedings (NZ).
(e) Areelectronic means usedtoadvertise procurement opportunities? What isthenature
ofsystems thatareinplace? Aredifferent tendering provisions applied tocontracts advertised
inthismanner? Ifso,please describe.
Theuseofelectronic means forpublicising procurement opportunities isnotuniform. While
someMembershavemadeasubstantialinvestmentinthedevelopmentofelectronicinformationsystems,
several others haveonlytaken preliminary, experimental steps inthisdirection. Insome cases, only
tenders above certain thresholds areadvertised electronically (Norway), andthesethreshold maydiffer
according totheservice sector concerned (EC). Inother cases, information forelectronic databases
isstillbeing provided voluntarily bythepurchasing agencies (HK, NZ). Some agencies have"home
pages" ontheInternet andinclude tender notices atthese websites (HK, US).
InoneMember, itisplanned tocreate electronic datainterchange (EDI) networks which will
beabletoautomatically update inventories, invoice customers, paysuppliers, advertise federal
government requirements andperform many other tasksthatarenowtime, labour, andpaper intensive
(US). Itisestimated thatthenewelectronic purchasing could cuttheMember 'sfederal procurement
costs by10percent by1997 andspeed delivery times byathird. Another Member hascreated an
"open bidding service" which isauser-friendly automated bidding system designed togivepotential
suppliers fast,equal access toinformation ongovernment contracting opportunities (Canada). Athird
Member hasbegun work onanelectronic public procurement network aiming tomake theprocess
moreefficient,morereliable,lesstime-consuming,andultimatelymorecosteffective,bothforprocurers
andsuppliers (EC).
OneMember hasstated thatitslegalsystem doesnotcurrently permit theuseofelectronic
means toparticipate intendering procedures, butanewsystem isbeing created through which invitations
totender maybeconsulted electronically (Mexico). Another Member hasstated thattheuseofelectronic
means toadvertise government procurement opportunities isnotprovided forstatutorily (Argentina).
VI. REQUIREMENTS LAID DOWN FOR POSSIBLE SUPPLIERS
6.(a) Arethere registration, residence orother requirements forpotential suppliers?
(There issignificant overlap intheresponses toparts (a),(b)and(c),which should beread
together.)S/WPGR/W/20
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Registration requirements
Members 'procurement rulesdiffer significantly inrespect ofregistration requirements, which
arecompulsory incertain Members anddonotexistinothers. Incertain Members (Colombia, India,
Japan, Korea, Poland, Singapore) alllocalandforeign suppliers interested inparticipating inpublic
sector tenders arerequired toregister asgovernment contractors orbequalified assuch. Several
Members statethattheircompulsory registration system isnon-discriminatory, inthatitisequally
andobjectively applicable tobothlocalandoverseas suppliers (Singapore). Insome Members, non-
registered firms could beallowed toparticipate onlyinadhoctenders fornon-recurring services or
works contracts (India, Singapore). InoneMember, whooperates acompulsory registration scheme,
unregistered suppliers canonlybeconsidered iflocalexpertise islacking, orincases where thelocal
contractors areunable toexecute their contracts orareunable toreach acertain highstandard
(Singapore). Theregistration system inthisMember istobereviewed withaview toeliminating
anydiscriminatory effects.
Some Members haveprovided reasons fortheoperation ofregistration systems. Onestates
thattheobjective ofthesystem istofacilitate thequalification process. Thesystem helps theprocuring
entity tocreate areadily available poolofinformation oneachregistered firm, which reduces thetime
needed toexamine qualifications during thetender evaluation. Theregistered suppliers alsobenefit
because theyarenotburdened bytheneedtoprovide thesame information eachtimetheyparticipate
inapublic tender (Singapore). Another Member hasstated thattheregistration system helps toreduce
theriskthatthedesignated supplier willnotbeabletoimplement thecontract properly. Furthermore,
oncethecompetition isnarrowed down toqualified suppliers, itispossible toevaluate bidsonlyon
thebasis ofprice, which helps toenhance thetransparency oftheprocurement procedures (Japan).
AnotherMembermaintainsaregisterofsmall-scaleindustrieswhobenefitfrompreferentialprocurement
(India).
There aremany Members whodonotnormally require registration orqualification, but
nevertheless allow itincertain situations. Forinstance, oneMember allows forlistsofregistered
suppliers forcertain services iftheprocurement fallsbelow specified sectoral thresholds (Canada).
Another states thatintheutilities sector, contracting entities mayuselistsofqualified suppliers (Norway)
while inanother registration isessential forconstruction services (Argentina).
Residence requirements
Residence requirements seemtoberelatively rare. Insome Members, itisrequired thatforeign
natural persons without domicile inthecountry orforeign legalpersons without abranch inthecountry
must accredit anagent domiciled inthecountry whoisdulyempowered tosubmit tenders andsign
contracts andalsotorepresent themlegally andinnon-legal matters (HK, Colombia). InoneMember,
theinviters ofbidsmayprescribe intheinvitation thatonlybidders resident inthecountry maytake
partintheprocedure (Hungary). Inanother Member, inorder toconclude acontract withtheState,
afirmmustnormally beestablished inthecountry, butforeign firms areexempted fromthisrequirement
inthecaseofinternational tenders (Argentina). OneMember hasstated thatthegovernment may
sometimes require thecontractor tobewithin acertain distance ofthesiteofcontract performance
where thereisalegitimate needofthecontracting entity tohavethecontractor incloseproximity (US).
(Fortherelationship between localestablishment andnational treatment, seeQuestion 9).S/WPGR/W/20
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(b) What isthenature ofanyconditions forparticipation required from suppliers -suchas
financial guarantees, commercial standing andtechnical qualifications? Dotheconditions of
participation varyaccording tothenature ofthetender process and/or thevalue oftheintended
procurement?
Many Members require thatpotential suppliers provide evidence oftheirability tofulfil the
contract,forinstancethroughdemonstratingfinancialsoundness,professionalandtechnicalqualifications
andexperience, adequate production capacity, andmeeting anynecessary legal requirements. For
instance, contracting stateentities mayrequire ataxdeclaration fromsuppliers toshow thatthesupplier
hasmetalltaxobligations (Norway), statement frombanks, professional riskindemnity insurance (EC),
etc.Insome cases, thesubmission ofbidsecurity, anamount tobedetermined inadvance, maybe
required, andfailure tomake asubmission mayrender thebidnon-responsive (Canada, Hungary,
Mexico). Fines andotherpenalties imposed onthesupplier fordelay ornon-performance canbeapplied
against these guarantees (Chile).
Theability ofservice providers toperform services maybeevaluated inparticular withregard
totheirskills, efficiency, experience andreliability. Thecontracting authority mayspecify which
references itwishes toreceive, ortheproduction ofcertificates issued byindependent bodies attesting
conformity oftheservice withcertain quality assurance systems. Insome cases, tenderers maybe
required toprove theirenrolment inoneoftheprofessional ortrade registers. Furthermore, legal
persons mayberequired toindicate thenames andrelevant professional qualifications ofthestaffto
beresponsible fortheperformance oftheservice. Insome cases, iftenders aresubmitted bygroups
ofservice providers, aspecific legalformcanberequired oncethecontract hasbeenawarded, even
though itmaynotberequired inorder tosubmit thebid(EC). Insome Members, tenderers have
tocomplywithhealth,safetyandemploymentequityconsiderations(Canada,Switzerland).Additionally,
forsensitive procurements, acontractor mayhavetohaveappropriate security clearance, which may
alsobeobtainable byforeign suppliers.
Some Members givecredit forpastperformance (Singapore), while others onlyuseinadequate
pastperformance asabasisfordisqualification (Mexico). OneMember hasputinplace an"endorsed
supplier arrangement", under which suppliers ofinformation technology andmajor office machine
products under common usearrangements havetodemonstrate acommitment toworld bestpractice
interms ofquality standards andservice, andlong-term value adding activities incountries party to
therelevant regional integration agreement (Australia). Some Members identify thenatural andlegal
persons whoarenotentitled tosubmit tenders. These could include persons whohavefamily orbusiness
tieswiththecivilservant involved intheprocurement process andpersons who,individually orthrough
thecorporate group towhich theybelong, issueopinions, expert appraisals orassessments inconnection
withthesettlement ofdisputes (Mexico). Insome Members, entities havefreedom toestablish the
objective requirements forparticipation which theydeem necessary (Colombia, NZ).
(Forreciprocityconditionsinprocurement,whichamounttorequirementstobeservicessuppliers
ofparticular countries, seeQuestion 9).
(c) Dothere exist listsofapproved suppliers? Ifso,what aretheprocedures forchecking
thecapability offirms applying forinclusion ontenderers 'mailing lists? Arelistsofapproved
suppliers, ifany,regularly reviewed/updated?
Members donotusually make asharp distinction between registration orqualification
requirements andthemaintenance oflistsofapproved suppliers. Some allow listsofapproved suppliers
tobeusedonlyinexceptional cases, andthentherecourse tolistsmustbejustified andapproved (US).
Certified registration inofficial listsbythecompetent bodies usually constitutes apresumption of
suitability interms ofthecriteria forqualitative selection (EC). Theguidelines forprocurement inS/WPGR/W/20
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oneMember, advise organisations which purchase items specifically designed andmanufactured to
meet theirrequirements, toconsider developing alistof"approved suppliers" (NZ). Thisprocess
would involve potential suppliers being evaluated under appropriate criteria. Itisargued thatwhile
building upan"approved supplier" network could beexpensive, there could belong-term benefits
inconsolidatingeffectiverelationshipswithreliablesuppliers.However,toensurefairness,organisations
areadvised tobecareful toavoid exclusivity, andensure thatlistsarecontinually reviewed.
Companiesorfirmsseekingregistrationorqualificationareusuallyrequiredtomakeadeclaration
(Colombia, Poland) and/or havetheirbackground, finances andability toprovide asatisfactory service
checked bytheregistration authorities (Japan, Poland). Insome cases, anon-refundable registration
feeischarged (Singapore). Where suchlistsaremaintained, theyarevalid foracertain period, are
regularly updated, andinterested suppliers aregiven adequate opportunities tobeincluded (Colombia,
India, Japan). Qualifying criteria usually havetobepublished annually together withthelist.Suppliers
mayapply foradmission atanytimeoratregular intervals. Iftheprocuring entity refuses toaccept
asupplier onthelist,itmaybepossible tochallenge thisdecision before anindependent body
(Switzerland).
Onemember maintains "common usearrangements" (CUAs) which arestanding offers with
companies tosupply goods andservices based onpre-negotiated terms andconditions andatagreed
prices (Australia). Issues suchastradeterms, delivery arrangements, discount schedules andallother
contract details areagreed prior tosuppliers being added tothelists. CUAs cover mostrequirements
forrecurring needs across departments andarecontinually monitored toensure thatsuppliers meet
required standards.
VII. CRITERIA FOR ASSESSING BIDS AND AWARDING CONTRACTS
7.(a) What criteria aretaken intoaccount intheaward oftenders? Arecriteria foraward
ofcontracts made available inadvance topotential suppliers?
Ingeneral, contracts areawarded onthebasis ofcriteria suchaslowest price, bestvalue for
money spent ortheeconomically most advantageous tender. Thelatter arebased onevaluation of
price, quality, technical merit, qualifications andexperience, aesthetic andfunctional aspects, service
andtechnical assistance, environmental impact, dateofdelivery, etcetera .Inacouple ofcases, it
ismentioned thattheprocuring entity estimates aprice which serves asthestandard forawarding
contracts (Japan, Korea).
Itisinvariably required thatallthecriteria fortheaward ofcontracts bemade available in
advance through publication inthetender notice orinthetender documents. Insome cases itisalso
required thatifcriteria other thanprice aretobetaken intoaccount, theirrelative importance must
bespecified inadvance where possible (Poland, EC).
(b) Isprocurement subject toanyoffset provisions, suchaslocalcontent, technology transfer
orcountertrade requirements?
Inmostcases, procurement isnotsubject toanyoffset provisions. Defence procurement may
wellbethemostsignificant exception (Norway, NZ). InoneMember, certain industry development
programs involve offsets (Australia), while inanother there isaprovision inconsultancy contracts
which requires thatgovernment staffbetrained (HK).
(Criteria which relate tolocalcontent requirements arediscussed under Question 9).S/WPGR/W/20
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(c) Ispreference given toanyparticular enterprises orgroup ofenterprises? Ifso,please
specify.
Ingeneral, preference isnotgiven toanyparticular group ofenterprises. However, insome
cases, preferences aregiven tosmall andmedium sized enterprises. InoneMember, itisrequired
thatawards ofanysizebesetasideforsmall business participation when thereisareasonable expectation
thatoffers willbeobtained fromatleasttwosmall businesses andawards willbemade atfairmarket
prices (US). Inanother Member, stateentities areauthorized togivepreference inselection, other
things being equal, tolocalcooperatives, micro-enterprises, foundations, communal action associations
andsimilar entities oftheplace where thecontract istobeimplemented (Colombia). InoneMember,
small-scale sector bidders areentitled toaprice preference ofupto15percentoverthelarge scale
sector, aswere public sector undertakings untilrecently (India).
(SeealsoQuestion 6)
(d) Dotheprocurement criteria differ according tosector orregion oftheeconomy?
Inmostcases, procurement criteria donotdiffer according tothesector orregion. However,
inonecase, geographical location isdesignated inthecontext ofalabour surplus areaset-aside (US).
Another Member allows forconditions intheinvitation forbidding which further theobjectives of
jobcreation, thedevelopment ofunderdeveloped regions, theprotection oftheenvironment, aswell
asincreasing thechances ofparticipation forsmall andmedium sizeenterprises (Hungary). Inone
Member, evaluation criteria inprocurements thatarenotsubject tointernational agreements maybe
usedtoachieve industrial andregional benefits, aslongasthebenefits aresought inanon-discriminatory
manner withrespect toregions forwhich there exists ageneral framework ofregional development
(Canada). InoneMember, eventhough there isnochange inthebasic criteria forprocurement there
isaspecial regime forexploration andexploitation ofnatural resources, andfortrading, industrial
andmarketing activities byStateentities thatcarry outsuchactivities (Colombia). OneMember has
specified thatthere maybearestriction onparticipating intendering by"location ofprincipal office"
forcontracts below certain thresholds (Korea). InoneMember, certain regions aregiven concessions
intaxes andduties bythecentral/state government (India).
(Fordifferences inpreference margins associated withprovincial orlocalprocurement, see
question 9).
(e) What isthemargin ofchoice ordiscretion allowed tothepurchasing authority? What
doestheextent, ifany,ofdiscretion allowed depend upon?
Ingeneral, thepurchasing authority isrequired tofollow thepre-specified evaluation criteria
andmake adecision solely onthebasisofthesecriteria. Insome cases, where criteria other thanprice
areused, discretion isreduced byrecourse tostratified procedures, i.e.qualifying suppliers inadvance
onanon-discriminatory basis using non-price criteria, andthenfollowing straightforward price
competition (Japan, Mexico). Insome cases, however, thepurchasing authority hassome discretion
indefining thecriteria and/or choosing thespecific procedure followed (Colombia, Hungary, Poland).
OneMember hasmentioned thattheprocuring authority hastherighttocancel thetender atanystage
prior tothedefinitive award provided ithasgood cause todoso,ortomake apreliminary award of
allorpartoftheitems.
Inonecase, onlyprocurements above acertain threshold aresubject toreview byastate
administrative authority toensure compliance withadministrative regulations (Chile). Inanother case,
financial responsibility isdelegated toMinisters orChief Executives depending onthevalue ofthe
procurement andassociated payments (NZ).S/WPGR/W/20
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(Forsituations inwhich aprocurer mayenter intonegotiations, seeQuestion 4)
VIII. DISCLOSURE OFBIDS RECEIVED AND CONTRACTS AWARDED
8.(a) How aretenders received, registered andopened?
Members havealotincommon concerning thebasic principles ofhowtenders arereceived,
registered andopened. Insome cases, theprinciples must beinaccordance withinternational
agreements. Itisfrequently required thatthedate,timeandplace ofopening, aswellasthepersons
allowed tobepresent attheopening, mustbepublished inthetender notice (EC, Norway, Poland).
Most emphasize theimportance ofpreserving thesecrecy ofbidsprior totheclosure oftenders, for
instance through sealed envelopes orsealed tender boxes. Most Members specify thataproper record
bekeptofallbids, usually through aregistration system orarecord ofproceedings atapublic bid
opening meeting. Therecord, insome cases, isrequired toinclude atleastthefollowing information:
names ofpersons attending theopening procedure, names oftenderers, submission dates ofoffers,
prices offered, andvariety ofoffers (Switzerland). Itisalsoinvariably required thatimpartial observers
bepresent atbidopening, e.g.more thanoneofficial must bepresent orthebidsmust beopened
publicly.
InoneMember, where astratified tendering procedure isemployed, tenders arereceived in
twosealed envelopes (Mexico). Thefirstenvelope contains thedocumentation bywhich itispossible
toidentify andconfirm theexistence andparticipation ofthebidder, andadescription oftherequired
technical specifications oftheproduct orservice inquestion. Thesecond envelope contains thefinancial
bidfortheproduct orservice together withthebidsecurity document. During thefirstphase, known
asthe"technical phase", allofthebidsareopened inthepresence oftheparticipants, andtheircontents
verified. Only those which meet thetechnical requirements setforth inthebidding conditions are
qualified fortheirsecond orfinancial phase, where thefinaldecision ismade. Another Member has
elaborated that,innegotiated procurements, prices arekeptconfidential untilanaward ismade. The
reason fordoing sorelates totheproprietary nature ofthepricing information. Anadditional concern
isthattheknowledge ofprices could leadtoasituation inwhich theincumbent contractor hasanunfair
advantage overitscompetitors which could affect theintegrity oftheprocurement system (US).
There arealsosome cases inwhich theindividual purchasing agency isfreetodetermine its
ownprocedures forreceiving, opening andregistering tenders inaccordance withbestpractice and
certain guidelines (Colombia, NZ).
(b) Areentities required topublish details ofthecontracts awarded and/or notify unsuccessful
tenderers?
There issimilarity inpost-award procedures, buttherearealsosomevariations. Mostresponses
indicate thatallbidders areinformed oftheaward ofacontract within afixedtimeperiod individually,
through public notice orinbothways(Norway). Butinsome cases, thereisnorequirement forentities
topublish details ofthecontracts awarded ortonotify unsuccessful tenderers (Chile, Korea, NZ,
Singapore). Inonecase, unsuccessful tenderers areinformed ofthedecision iftheaward wasnot
made inapublic hearing (Colombia).
Insome cases, thecontracts arepublished insummary formintheofficial press (Brazil). Some
require thatmore information bepublished, forinstance thetypeofprocedure, thenature andquantity
ofservices procured, name andaddress oftheprocuring entity, dateofaward, name andaddress of
thewinning tenderer, price ofthewinning award orthehighest andlowest offer taken intoaccount
intheaward ofthecontract (Japan, Switzerland). Relevant information onthecontract award may,
incertain cases, bewithheld ifthiswould haveharmful effects onthewinning firm, might prejudiceS/WPGR/W/20
Page13
faircompetition between suppliers, impede lawenforcement orotherwise becontrary tothepublic
interest (EC,Switzerland). Inonecase,therequirement topublish depends onthevalue ofthecontract
(Australia).
(c) Areentities required topublish, orprovide tounsuccessful bidders, pertinent reasons
whytheir bidwasrejected?
Suchinformation isusually notpublished. Butinmostinstances itispossible forunsuccessful
bidders toobtain information onthereasons whytheirbidsdidnotsucceed andonthecharacteristics
andrelative advantages ofthetender selected aswellasthename ofthewinning tenderer, either as
amatter ofcourse oronrequest (sometimes inwriting) (EC,Norway). Thisrequirement sometimes
exists ininternational agreements. Insome cases, therequest mustbereceived within stipulated time
limits (US). OneMember states thatdebriefings mayalsoassist suppliers whohavewoncontracts
previously andwanttoknow howtheyperformed against theevaluation criteria soastocontinue to
enhance theirperformance (Australia).
Inseveral Members, thereisnolegalrequirement foranentity toinform unsuccessful bidders
ofthereasons whytheirbidwasnotselected (Poland, Singapore). InonesuchMember, tenderers
maynevertheless learn about aspects ofthetender orcompetition through thefreedom ofaccess to
information provided bylaw,orbyrecourse totherightofpetition (Colombia). InoneMember, where
there arenolawsandregulations governing procurement, communication tounsuccessful tenderers
ofreasons fornotbeing selected isnevertheless encouraged under theGovernment 'spurchasing
guidelines where tenderers request this(NZ). Inanother Member, eventhough there isnolegal
requirement, inpractice itiscustomary toprovide thereasons forrejecting bidsattherequest ofthe
interested parties (Chile). InoneMember, thecompetent authority isrequired torecord thereason
forrejection ofthebidsbutunsuccessful tenderers arenotinformed (India). Inanother Member,
eventhough thereisnoobligation toinform, nevertheless, ifaninterested partycontests thepreliminary
award, thetendering authorities must make thefullproceedings ofthetender available tothatparty
forexamination (Argentina).
IX. TREATMENTGRANTEDTODOMESTICANDFOREIGNSERVICESAND/ORSUPPLIERS
9. What laws, regulations, procedures orpractices accord domestic services and/or suppliers
treatment more favourable than thataccorded toforeign services and/or suppliers, oraccord
services and/or suppliers ofaMember more favourable treatment thanthose ofanother Member?
Please specify how,ifatall,more favourable treatment isaccorded. Please alsospecify theworking
definition of"domestic" inrelation todomestic services andsuppliers.
Theresponses ofseveral Members indicate thatthere arenolaws, regulations orprocedures
which accord domestic services and/or suppliers preferential treatment, ordiscriminate inanyway
between theservices andservice suppliers ofother Members (Chile, HK,India, Japan, Korea, India,
NZ). Insome ofthese Members, government entities must nevertheless ensure theparticipation of
suppliers ofdomestic origin, without prejudice totheobjective selection procedure (Colombia, NZ).
Insome cases, preference tonationals isonlyrelevant inthecaseofotherwise equal bids, asa"tie-
breaker"(Brazil,Colombia).Insomeothercases(Colombia,Hungary),itisonlywhenforeignsuppliers
submit otherwise equal bidsthatpreference isgiven tothose whoincorporate greatest localcontent
(interms ofhuman resources orother components) and/or offer thebestconditions oftechnology
transfer.
Most oftheMembers whoresponded tothequestionnaire grant nolessfavourable treatment
toservices/service suppliers ofother Members inthecontext ofbilateral, regional orplurilateralS/WPGR/W/20
Page14
agreements (except Argentina, Brazil andIndia). Thegranting ofnational treatment onareciprocal
basisisarecurrent theme -eveninthecontext ofinternational agreements onprocurement. Treatment
ofservices/service suppliers ofMembers notpartytosuchagreements isfrequently notclearly specified.
Incertain Members, foreign suppliers mayberefused therighttoparticipate ininternational tenders
ifanagreement hasnotbeenconcluded withtheircountry (EC). Incertain cases, there isaclear
preference rulewhich maydiffer according tothecategory ofpurchases (EC,Hungary, US). Insome
cases, forthepurpose ofprice comparison, theprice ofthegood offoreign origin includes current
import duties andother taxes andcharges required forittobeimported byaprivate importer without
special privileges (Argentina, Brazil).
Incertain cases, thecentral government doesnotgrant preferences butprovincial andlocal
governments do(Australia). Insome Members, procurement below certain thresholds maybelimited
todomestic suppliers (Poland). Some Members apply domestic source requirements onlytospecific
servicessectors,e.g.inthetransportationsector(US).Purchasesforspecificuses,mostnotablydefence-
related, mayalsorequire procurement from domestic sources. Insome cases, alocalcontent policy
isoperated provided there isadequate competition, which isusually taken tomean theexistence of
three ormore suppliers.
Thenotion ofdomestic isdefined insome cases tomean those services which arewholly or
partly produced inthecountry inquestion (NZ)orinthecaseofcertain regional integration agreements,
inanymember stateparty totheagreement (EC). Insome cases, bidsareconsidered domestic provided
localcontent isinexcess of50percent(Hungary, Mexico). Incertain cases, domestic services include
services provided through commercial presence established inthecountry andcompanies owned or
controlled bynationals ofthecountry, aswellasbynationals whoareresident inthecountry (Japan.).
Incertain other countries, companies withforeign capital participation maybetermed domestic for
thepurpose ofprocurement provided theyareestablished under national lawand/or theirprincipal
business takes place inthecountry (EC). Inonecasethedefinition ofdomestic inthecaseof
construction services includes anexamination ofownership, nationality ofdirectors andplace of
incorporation (US).
X. PROCEDURES FOR HEARING AND REVIEWING COMPLAINTS/APPEALS
10. What, ifany,aretheprocedures available forparties, domestic andforeign, tolodge
complaints against theaward ofacontract? Please provide details.
AllMembers haveprocedures available forpotential suppliers tolodge complaints atanytime
throughout theprocurement cycle andagainst theaward within fixed timelimits. There isusually
provision intheprocurement legislation foreffective legalremedies. Review procedures areavailable
inmostcases toanyperson whohasorhadaninterest inobtaining aparticular contract andwhohas
beenorrisksbeing harmed byanalleged infringement. Butsome responses seemtosuggest thatcertain
remedies maybeavailable onlytosuppliers from countries withwhich thecountry inquestion has
concluded anagreement ongovernment procurement. Onlyafewcountries haveexplicitly noted that
theprocedures areavailable tobothdomestic andforeign suppliers (US).
Foraggrieved suppliers, there isusually aprescribed sequence inwhich different types of
controllingagenciesmaybeinvoked:internalcontrolsoftheprocuringentity,independentadministrative
control, judicial control orpolitical control. Anysupplier whoclaims tobeunfairly treated isusually
firstencouraged totakeupthematter directly withtheentity concerned. Ifthisdoesnotprovide
satisfactory results, theformal procedure istobring anaction against thecontracting entity before
either anindependent review body orcompetent national judicial court (Norway, Switzerland). InS/WPGR/W/20
Page15
some cases, where review bodies atfirstinstance arenotjudicial incharacter, itisrequired thattheir
decision besubject tojudicial review.
Inonecase,theMinistryofCommercewhichhasresponsibilityforthegovernment'spurchasing
policy, mayalsoinvestigate complaints ofunfair treatment (NZ), while inother cases itistheMinistry
ofFinance(Singapore),MinistryofComptrollershipandAdministrativeDevelopment(Mexico),auditor-
general (Brazil), commissions against corruption (HK), orother organs which make upthesystem
ofinternal control. Inanother case, there isnoprovision forappeal through administrative channels,
butcomplaints maybebrought before courts (Colombia). Insome Members, suppliers maycomplain
toanombudsman (Australia). Inthiscase,agencies arenotcompelled toaccept arecommended remedy,
butiftheagency doesnotactupon therecommendations adequately, theombudsman mayreport to
thePrime Minister andthentoParliament. Some Members havealsomentioned arbitration ormediation
procedures which havetheeffect of"out-of court" settlements (Korea).
Reviewbodiesfrequentlyhave,firstly,powertotakeinterimmeasuresattheearliestopportunity,
including measures tosuspend theprocedure fortheaward ofacontract ortheimplementation ofany
decision taken bythecontracting entity. Secondly, theymaysetaside decisions taken unlawfully.
Thirdly, theyhavethepower toaward damages topersons injured bytheinfringement. Insome cases
thecourt orindependent review bodyisempowered tostopanongoing procurement procedure before
thecontract hasbeenawarded, butnottorevoke anaward (Switzerland). Inother cases, forinstance,
insome Members intheutilities sector, procurement procedures cannot bestopped during theprocess,
butthecourt mayfinecontracting entities whoarefound guilty ofbreaking therules, andadjudge
indemnities tothecomplaining enterprises (Norway). Suppliers mayalsochallenge thecancellation
oftheaward ofacontract (US).
Parties tointernational agreements sometimes alsohavethepossibility oflaunching complaints
tosurveillance authorities setupinthecontext oftheagreement inaddition tonational procedures
(EC).S/WPGR/W/20
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ANNEX
Government Procurement
Current Situation oftheResponses totheQuestionnaire
Responses Country
S/WPGR/W/11/Add.1 Norway
S/WPGR/W/11/Add.1/Corr.1
S/WPGR/W/11/Add.2 Switzerland
S/WPGR/W/11/Add.3 Brazil
S/WPGR/W/11/Add.4 NewZealand
S/WPGR/W/11/Add.5 Japan
S/WPGR/W/11/Add.6 United States
S/WPGR/W/11/Add.7 Canada
S/WPGR/W/11/Add.8 Colombia
S/WPGR/W/11/Add.9 Hong Kong
S/WPGR/W/11/Add.10 EC&theirMember States
S/WPGR/W/11/Add.11 Australia
S/WPGR/W/11/Add.12 Poland
S/WPGR/W/11/Add.13 Republic ofKorea
S/WPGR/W/11/Add.13/C.1
S/WPGR/W/11/Add.14 India
S/WPGR/W/11/Add.15 Chile
S/WPGR/W/11/Add.16 Singapore
S/WPGR/W/11/Add.17 Hungary
S/WPGR/W/11/Add.18 Mexico
S/WPGR/W/11/Add.19 Argentina