RESTRICTED  
 
GPA/ACC/AUS/11  
25 January 2016  
(16-0502)  Page: 1/8  
Committee on Government Procurement  Original: English  
 
  ACCESSION OF AUSTRALIA TO THE AGREEMENT ON GOVERNMENT PROCUREMENT 
REPLIES FROM AUSTRALIA TO QUESTIONS FROM ICELAND, LIECHTENSTEIN, NORWAY AND 
SWITZERLAND (GPA/ACC/AUS/5) REGARDING AUSTRALIA'S INITIAL APPENDIX I OFFER 
The following communication, dated 20 January 2016, is being circulated at the request of the 
Delegation of Australia. 
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AUSTRALIA'S RESPONSE TO REQUESTS FROM ICELAND, LIECHTENSTEIN, NORWAY AND 
SWITZERLAND FOR IMPROVEMEN TS AND CLARIFICATIONS  
IN THE INITIAL OFFER OF AUSTRALIA 
Australia thanks the Members of the European Fr ee Trade Association (EFTA) for their questions 
and requests for improvements on Australia's initial offer for accession to the Agreement on 
Government Procurement (GPA/ACC/AUS/1). Australia provides the following responses to the questions circulated by the Members of EFTA. 
 
Annex 1 - Central Government Entities  
1.  Australia uses a positive list of covered en tities at central level. The EFTA States 
propose to Australia to use a functional defi nition of covered entities and to transform 
the positive list into an indicative list of co vered entities. This will ensure a full coverage 
of central level entities, and questions and/or  uncertainties with regard to the effective 
scope of covered procurement w ill be avoided in the future. 
Australia is unable to consider a definitional approach for coverage at the central level. Not all 
Commonwealth entities listed in the Public Go vernance, Performance and Accountability Act 2013 
are required to comply with the Commonwealth procurement framework; this prevents Australia 
from providing a definitional approach. The current listing ensures that Australian Government entities know that they are covered under an ag reement and that they comply with Australia's 
international trade obligations. 
 2.  The EFTA States propose to Australi a to delete Note 1 to Annex 1. 
Note 1. to Annex 1 which refers to the Agreement only covering entities listed in the Annex is 
provided for greater certainty and ensures that wh ere an entity is listed, the functions performed 
by that entity are covered, unless expressly excl uded in our market access offer. This Note is 
included in all of Australia's trade agreements. 
3.  The EFTA States seek clarification from Au stralia on the need for the exclusion in 
Note 2 to Annex 1. 
On 1 July 2015 the Australian Government Solicitor was absorbed by the Attorney General's 
Department. The functions of the Australian Government Solicitor are not subject to the 
obligations of the Commonwealth's procurement framework and cannot be part of a government procurement offer in an Australian trade agreement.  GPA/ACC/AUS/11 
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  4.  The EFTA States seek clarification from Au stralia on the need for the exclusion in 
Note 3, lit. b to Annex 1 in addition to pa ragraph 1 of Article III (Security and General 
Exceptions). 
Note 3.b. provides a list of goods and services  required by the Australian Government to be 
excluded for the Department of Defence only. The Department of Defence works in unique and 
remote locations in Australia and internationally. The list of exclusions reflects the operational requirements of these locations. Procurements made under an exemption must be documented 
and justified. 
 These government procurement exclusions are required by the Australian Government and are included in all of Australia's trade agreements. 
 
5.  The EFTA states seek clarification from Aust ralia on the need for the full exclusion in 
Note 3, lit. c for entities in the field of security. 
The Defence Intelligence Organisation, Australian Signals Directorate and the Australian 
Geospatial-Intelligence Organisation are divisions that function under the Department of Defence. For national security reasons these divisions are not covered by the Agreement. The Department 
of Defence may conduct procurements on behalf of these divisions, the Note is clarifying that such 
procurements are not covered under the Agreement.  This exclusion is required by the Australian Government and is included in all of Australia's existing 
trade agreements. 
 6.  The EFTA States seek clarification from Aust ralia on the rationale, objective and need 
for Note 3, lit. d to Annex 1 (in addition to paragraph 1 of Article III) regarding the 
exclusions aiming at maintaining the Aust ralian industry capability program and its 
successor programs and policies. 
The Australian industry capability program aims to build capacity for Australian industry to 
participate in Defence procurement within Australia and internationally. The Australian industry capability program applies to complex procurements where value for money is still the prime consideration when determining whether defence capability is to be sourced from Australian or 
overseas suppliers. For further information on the Australian industry capability program please 
refer to the Defence Procurement Policy manual available at: "http://www.defence.gov.au/dmo/doi ngbusiness/procuremen tdefence/policies/de fencepolicyprocur
ementmanual/ ". The Australian Government does not intend for this program to be used at any 
time to exclude any particular procurement or procurements that would otherwise be covered. 
Defence procurement must demonstrate value for money. 
 
This exclusion is required by the Australian Government and is included in all of Australia's existing trade agreements.  
 
Annex 2 - Sub-Central Government Entities 
 7.  Australia offers a positive list of covered enti ties at state/territorial level and a list of 
entities in the states/territories are found in the checklist of issues. The EFTA States 
would appreciate to receive an indicative list of other possible levels of entities at sub 
central level responsible for public procurem ent, including local government areas and 
cities. 
The Commonwealth Government consulted widely and at length with the States and Territories at 
head of government level on which entities to commit to in the negotiations. The States and Territories have not proposed any other entities th an those currently included in Australia's offer. 
 
Australia has never made commitments at the local government level, given the small size, large number, and nature of local councils in Australia. The main roles of local government are 
governance, planning, community development, service delivery, asset management and 
regulation. The States and Northern Territory (the Australian Capital Territory has no local councils) pass the legal and regulatory framework for the creation and operation of local GPA/ACC/AUS/11 
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  government, and as a consequence there are often significant differences in the systems for 
overseeing local councils.  8.  As indicated above for Annex 1, the EFTA states would propose to Australia to use a 
functional definition for the coverage of  procurements at sub-territorial levels. 
Australia is unable to consider a definitional approach for coverage at the sub-central level. The 
current listing reflects State and Territory legislative coverage for sub-central entities. 
 
9.  The EFTA States propose to Australi a to delete its Note to Annex 2. 
The Note to Annex 2, which refers to the Agreement only covering entities listed in the Annex, is 
provided for greater certainty and ensures that wh ere an entity is listed, the functions performed 
by that entity are covered, unless expressly excl uded in our market access offer. This Note is 
included in all of Australia's trade agreements.  
10.  The EFTA States request that Australia lowe rs its thresholds for goods and services 
coverage in Annex 2 to SDR 200'000 in order to assure consistency with the thresholds applied by most of the Members of the GPA, including the EFTA States. 
The current thresholds for sub-central entities in Australia's offer are similar to other GPA Parties' 
thresholds, including the United States and Canada. The Commonwealth Government consulted widely and at length with the States and Territories, and the mandate from State and Territory Premiers and Chief Ministers for GPA Annex 2 thresholds is consistent with state and territory 
commitments in Australia's trade agreements. 
 11.  The EFTA States kindly ask Australia to provide information on the way that 
financial flow downs from the central author ities to local authorities are considered 
under the commitments of the future accession of Australia to the GPA. 
Australia's central level government provides funding to sub-central governments both generally, 
without conditions, and for specific functions, such as health, education, skills and workforce 
development, community services, housing, Indigenous reform, infrastructure, and environment. Funding in these areas is broadly provided to sub-central governments to achieve national policy objectives, and is not generally linked to specific procurements. Further information about funding 
between levels of government is available at: " http://www.budget.gov.au/2015-
16/content/bp3/html/bp3_02_part_1.htm ". 
 
12.  The EFTA States seek clarification from Au stralia on the scope of and need for the 
exclusion in paragraph 2 for New South Wales regarding transport. 
The Transport Construction Authority was abol ished on 1 November 2011 and the Country Rail 
Infrastructure Authority was abolished on 1 July  2012. The functions of both Authorities were 
absorbed into Transport for NSW. The exception refers to legacy projects commenced under the 
Transport Construction Authority and the Country Rail Infrastructure Authority.  
Annex 3 - Other Entities 
 13.  The EFTA States seek an explanation of th e types of bodies that are covered under 
Annex 3. 
Entities covered in Annex 3 of Australia's market access offer are corporate Commonwealth 
entities which are subject to the Commonwealth Procurement Rules. In Australia, Annex 3-type 
entities are responsible for their own procur ements, within the context of Commonwealth's 
procurement framework.  GPA/ACC/AUS/11 
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  14.  The EFTA States noted during the Se ptember meeting of the Committee of 
government procurement in Geneva that Austra lia plans to carry out in the near future 
important activities for the development of significant infrastructure projects. EFTA 
States understand that these activities co uld cover the production, construction or 
supply in sectors such as water, energy, roads, ports, airports, railways, urban 
transport, transport by cable, etc. EFTA States propose that  Australia provides a list of 
utilities sectors and relevant entities. 
Projects which involve the construction of roads and urban transport are covered under transport 
departments. Transport projects conducted by the Commonwealth are conducted by the 
Department of Infrastructure and Regional Development which is a covered entity in Annex 1 of Australia's initial market access offer. 
 
Utility services such as sewage and services incidental to energy are covered in Annex 5 (Services) of Australia's market access offer. The other utility sectors and relevant entities referenced in this 
question that are not covered by Australia's existing free trade agreements are unable to be 
offered.  
Australia is not able to offer these types of entities, including: water, energy, ports, airports, 
because Australia has gone through 30 years of divestment and/or privatisation of public assets. Examples of privatised entities include:  
 Airports Phase 1 (Melbourne, Brisbane, Perth); 
 Airports Phase 2 (Adelaide, Parafield, Coolangatta, Darwin, Alice Springs, Tennant Creek, 
Canberra, Hobart, Launceston, Townsville, Mount Isa, Moorabbin, Jandakot, Archerfield); 
 Australian River Co. Limited (formerly Australian National Line Limited); 
 AUSSAT; 
 Australian National Railways; 
 Avalon Airport Geelong; 
 Broadcast Australia; 
 Essendon Airport Corporation; 
 Moomba - Sydney Gas Pipeline; 
 National Rail Corporation (combined sale of the National Rail Corporation & NSW's 
Freightcorp); 
 National Transmission Network; 
 QANTAS; 
 Snowy Mountains Engineering Corporation; 
 Sydney (Kingsford Smith) Airport Corporation; 
 Sydney Basin Airports (Bankstown, Camden, Hoxton Park); 
 Telstra (1997) (Telstra 2: 1999) (Telstra 3: 2006); 
 Port Botany; 
 Port Kembla; GPA/ACC/AUS/11 
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   Allgas Energy; 
 Australian Railway Group; 
 Collinsville Power Station; 
 Gladstone Power Station; 
 Millmerran Power Station; 
 Powerdirect State Gas Pipeline; 
 ElectraNet; 
 Electricity Trust of South Australia (ETSA); 
 Flinders Port (2001); 
 SAGASCO (South Australian Gas Company); 
 Torrens Island Power Station; 
 Bell Bay Power Station; 
 Roaring 40s Renewable Energy; 
 Citipower; 
 Eastern Energy; 
 Ecogen Energy; 
 Energy Brix Corporation; 
 Gascor; 
 Gasnet; 
 GFE (Gas and Fuel Exploration) Resources; 
 Hazelwood Power Station; 
 Heatane Gas; 
 Loy Yang A Power Station; 
 Loy Yang B Power Station; 
 MurrayLink Power Connector; 
 Multinet/Ikon; 
 Port of Geelong; 
 Port of Portland; 
 Powercor; 
 Powernet Victoria; GPA/ACC/AUS/11 
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   Solaris Power; 
 Southern Cross Station; 
 Southern Hydro; 
 Stratus/Energy 21; 
 Transmission Pipelines Australia; 
 Transurban; 
 United Energy; 
 Water Training Centre; 
 Westar/Kinetik; 
 Yallourn Energy/Yallourn Power Station; 
 Alinta Gas; 
 Dampier to Bunbury Natural Gas Pipeline; 
 Rail Freight System (Westrail); 
 The Water Corporations' Engineering and Construction Division. 
15.  The EFTA States request Australia to includ e the National Offshore Petroleum Safety 
and Environmental Authority (NOPSEMA). 
The National Offshore Petroleum Safety and Environmental Authority is not subject to the 
Commonwealth procurement framework and cannot be offered in Australia's trade agreements. 
 16.  The EFTA States propose to Australia to delete its Note 1 to Annex 3. 
Note 1 to Annex 3 which refers to the Agreement only covering entities listed in the Annex is 
provided for greater certainty and ensures that wh ere an entity is listed, the functions performed 
by that entity are covered, unless expressly excl uded in our market access offer. This note is 
included in all of Australia's trade agreements. 
 
Annex 5 - Services  
17.  The EFTA States request Australia to extend the scope of coverage to the following 
additional services: maintenance and repa ir services (CPC 6112, 6122, 8865-8868), 
insurance services (CPC 812, CPC 814), transport services (CPC 712, 73, 7512), 
telecommunication services (CPC 752), market research  and public opinion polling 
services (CPC 864), advertis ing services (CPC 871), prop erty management services 
(CPC 822) and publishing and pr inting services (CPC 88442). 
Australia has made a reciprocal offer based on the overall services coverage of other Parties. 
 
Australia will consider the EFTA States request for these additional services to be covered.  GPA/ACC/AUS/11 
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  Annex 7 - General Notes 
 18.  About 99% of the suppliers in EFTA States are SMEs. The EFTA States therefore 
consider that any set asides or preferences,  such as price preferences in favour of 
national SMEs, generate conflicts with the co mmitments of non-discrimination of Article 
IV of the revised GPA. Other measures de signed to accommodate national SMEs and 
SMEs located in other GPA States alike are no t discriminatory. The EFTA States estimate 
that this is for example the case for measures such as the division of contracts into lots, 
etc. In the light of this, the EFTA States would like to understand the scope of and the 
need for Note 1, lit. a, especially in the light  of Articles IV and XXII of the GPA (2012). 
Australian governments recognise the important contribution SMEs make to the economy and 
employment in particular. For this reason, Commonwealth and State and Territory governments 
seek to ensure that Australian SMEs have the same opportunities as international competitors to participate in procurement opportunities. SME participation schemes aim to assist competitive 
Australian SMEs to participate in major projects by encouraging innovation, expansion of capability 
and investment opportunities. These schemes do not provide price preferences.  
The Commonwealth and sub-central governments pr ovided responses to question 14 of the WTO 
GPA Checklist regarding favourable treatment. These responses provide information on any preferencing which may be used by Commonwealth Government and sub-central governments.  
The Commonwealth Procurement Framework allows Commonwealth entities to procure goods and 
services from an SME with at least 50% Indigenous ownership. 
 
The Indigenous Procurement Policy (IPP) is also with in the scope of this exclusion. The policy has 
three key components: a target for purchasing from Indigenous enterprises; a mandatory set-
aside to direct some Commonwealth contracts to Indigenous enterprises; and minimum 
Indigenous participation requirements for certain Commonwealth contracts. Further information on 
the IPP can be found at "http://www.dpmc.gov.au/indigenous-affairs/public ation/commonwealth-indigenous-procurement-
policy ". 
 
This exclusion is required by the Australian Government and is included in all of Australia's existing trade agreements. The Note is also required by sub-central governments. 
 
19.  The EFTA States request Australia to clarify the scope of and need for Note 1, lit. i. 
Note 1.i. relates to a covered entity conducting a procurement on behalf of a non-covered entity. 
This note is required for situations where a procuring entity conducts a bulk purchase on behalf of 
a number of small non-covered entities (e.g. community organisations) in order to aggregate their demand to achieve better value outcomes. Examples of this note include:  
 the bulk purchase of disability access fitted motor vehicles and then on selling them to 
group homes who are contracted to deliver services to the disabled; and 
 the bulk purchase by Department of Health  for hospital sheets on behalf of various 
hospitals. 
This is an exclusion required by Australia's sub-central governments and is included in all of 
Australia's existing trade agreements. 
 
20.  The EFTA States request Australia to clarify the need for Note 2, in light of the 
exclusions already provided under Article III of the GPA(2012). 
Articles III (security exceptions) and II (exceptions in case of international aid/international 
agreements) in the text of WTO-GPA relate to national security only. Australia requires an 
exception which covers international peace and security.  
This Note is required by the Australian Government and is captured in the chapter text of 
Australia's trade agreements, including GATS. This Note is included as an exemption at paragraph 2.6 in the Commonwealth Procurement Rules. GPA/ACC/AUS/11 
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  21.  The EFTA States request Australia to clar ify the scope of and need for Note 3. 
This Note relates to government purchasing which is funded from grants and sponsorship from the 
private sector. For example, in the 2013-14 financial year the Australian War Memorial received a A$1,000,000 sponsorship from BHP to fund the es tablishment of a World War One gallery. In the 
2013-14 financial year the National Museum of Australia received A$302,000 from the Australian 
Council for Arts to support travelling exhibitions.  
This Note is required by the Australian Government and is captured in the chapter text of 
Australia's trade agreements. This Note is also contained in exemption 4 of Division 2 of the 
Commonwealth Procurement Rules.  
22.  The EFTA States request Australia to clar ify the scope of and need for Note 4. 
Unsolicited innovative proposals in the Commonwealth Procurement Rules are procurements which 
are made under exceptionally advantageous conditions that arise only in the very short term and 
are not routine procurement from regular suppliers. 
 The procurement of unsolicited innovative proposals is a condition for limited tendering and is 
included at paragraph 10.3 (c) in the Commonwealth Procurement Rules. 
 This Note is required by the Australian Government and is included in all of Australia's trade agreements. This note is also required by Australia's sub-central governments. 
 
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