RESTRICTED  
  
GPA/ACC/AUS/37  
 
7 March 2018  
(18-1421) Page: 1/3 
Committee on Government Procurement  Original: English  
 
ACCESSION OF AUSTRAL IA TO THE AGREEMENT ON GOVERNMENT PROCUR EMENT  
COMMUNICATION FROM AUSTRALIA  
The following communication, dated 7 March 2018 , is being circulated at the request of the 
Delegation of Australia . 
 
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AUSTRALIA'S REPLIES TO COMMENTS FROM UKRAINE (GPA/ACC/AUS /34)   
REGARDING ITS SECOND REVISED OFFER  (GPA/ACC/AUS/29)  
Annex 1 - List of Central Government Entities  
 
1. Ukraine thanks Australia for the inclusion of two additional central government 
entities under its Annex 1 and Annex 3. Ukraine would like to reiterate its request for 
Australia to clarify whether all central government entities of Australia that are subject 
to the Australian Government's procurement framework are included to the indicative 
list of Central Government ent ities? If some central government entities were not 
explicitly included to the list, could Australia provide justification for that?  
The lists of entities in Annex 1 and Annex 3 represent a list of central government entities that are 
subject to the Austr alian Government's procurement framework. Australia 's initial and subsequent 
offers have been very comprehensive, reflecting our open, non -discriminatory, and transparent 
government procurement framework. Our second revised offer now covers all entities in  trade 
agreements Australia has with the United States (US) , Japan, Korea and Singapore as well as 
agreed in the Tr ans-Pacific Partnership.  
Annex 2 - Sub-Central Government Entities  
 
2. We invite Australia to lower thresholds for goods and services for sub -central 
government entities to SDR 200,000 in order to match the majority of GPA Parties (most 
of GPA Parties have the thresholds for sub -central government entities - SDR 200,000 
and only the USA and Canada have thresholds for sub -central government entitie s - SDR 
355,000. At the same time, the USA and Canada have lower thresholds for the entities 
under Annex 3: SDR 355,000 for Canada and USD 250 ,000 for listed goods and services 
in the USA.  
Australia notes Ukraine 's request. The threshold offered for Annex  2 entities is independent of that 
offered for Annex 3 entities and is as low as Australia is able to offer. As is the case with Ukraine, 
Australia uses a negative list approach for coverage of services, which means that Australia is 
offering more services  than Canada, the US and most other GPA members. This high level of 
ambition on market access for services is only possible for Australia 's sub -central governments at 
a threshold of SDR 355,000.  GPA/ACC/AUS/37  
 
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  3. Could  Australia clarify whether the N ote about a phased withd rawal of the 
exception for motor vehicles covers entities under Annex 2? If not, please provide the 
justification for this.  
The phased withdrawal of the exception for motor vehicles only applies to entities covered under 
Annex 1 and Annex 3. Australia has already improved coverage of motor vehicle procurement in 
relation to Annex 2 entities by removing the Note from Annex 7, which resulted in coverage of 
motor vehicles for Annex 2 entities in the Northern Territory, Tasmania and Western Australia.  
Annex 3 – Other Entities  
 
4. Ukraine would appreciate Australia's elaboration on the exclusion of government 
business enterprises (government -owned corporations) from its offer, e.g. the 
Australian Rail Track Corporation? What are the criteria for procurement by 
gover nment -owned enterprises to be excluded from the scope of procurement 
framework?  
Government business enterprises (GBEs), including the Australian Rail Track Corporation, are not 
offered in Australia 's trade agreements because as commercial entities they are  not covered by the 
Australian Government 's procurement framework. GBEs operate essentially as a company, being 
required to earn at least a commercial rate of return to justify the retention of assets in the 
business, and to pay commercial dividends from t hose returns. Australia 's limited number of GBEs 
operate independently of other government entities, but may be subject to strategic control from 
relevant government ministers. The directors of a GBE develop business strategies and handle 
day-to-day manage ment policies, including procurement. The Australian Government does not 
directly control the procurement decisions of GBEs, and accordingly, they are not able to be 
covered.  
Annex 5 - Services  
 
5. Ukraine invites Australia to delete the reciprocity Note found  in Australia's Note to 
Annex 5.  
Australia, through a negative list approach with few exceptions, has offered ambitious and 
comprehensive coverage of services. The reciprocity note is required for Australia to be able to 
provide this high level of cov erage. Australia notes that Ukraine similarly uses a negative list 
approach to services with few exceptions, which means that suppliers from Ukraine will receive 
comprehensive access to services procurements in Australia.  
Annex 7 - General notes  
 
6. Could Australia ensure the use of small business and other set asides in a manner 
that, while not precluding their use, would provide an acceptable security of access to 
suppliers from all GPA Parties, namely Ukraine? Is the purpose of the preference 
schemes to benefit Australian small and medium enterprises, or also small and medium 
enterprises from other countries, namely Ukraine?  
Australia does not set aside procurement opportunities for SMEs. Rather, Australia's SME polices at 
central and sub -central levels t ypically require government entities to consider how to support 
participation by local SMEs. The relatively small size of the Australian market, coupled with its 
geographical distance from the major markets of Europe and North America, and the trend 
toward s greater use of established supply chains by international investors, can create significant 
impediments to Australian industry participation in major projects.  
Australian policies aim to assist competitive Australian SMEs to participate in major projects  by 
encouraging innovation, expansion of capability and investment opportunities.  GPA/ACC/AUS/37  
 
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  The Australian Government promotes participation by SMEs in a number of ways that may be of 
benefit to SMEs from other GPA members, including Ukraine. For example:  
 online pub lication of tendering notices and use of electronic tendering through 
AusTender ; 
 tendering terms and conditions that are proportionate to the value and complexity of the 
procurement; and  
 simplified and streamline d contracting practices used uniformly by procuring entities.  
It is also open to SMEs from Ukraine and other GPA members to register on AusTender  to receive 
email notification of new open business opportunities a nd planned procurements.  
7. For the sake of clarity and transparency Ukraine invites A ustralia to delete its 
General N ote about the procurement of unsolicited innovative proposals, because we 
find the exclusion with respect to procurements made under "excepti onally 
advantageous conditions" too vague. Or could Australia provide a detailed guidance on 
the use of unsolicited innovative proposals?  
Australia's note is for greater certainty that limited tendering procedures under Article XIII:1 may 
be used for procu rements in response to unsolicited innovated proposals.  
Unsolicited innovative proposals are offers to the Government to purchase goods or services made 
under exceptionally advantageous conditions that arise only in the very short term and are not 
routine procurement from regular suppliers. These products and services are not typically 
commercially available. It is open to suppliers from GPA members, including Ukraine, to submit 
unsolicited innovative proposals to government entities.  
As an example, refer t o the Defence Innovation Hub , which provides details on how the 
Department of Defence treats unsolicited innov ative proposals.  
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