RESTRICTED  WORLD TRADE  
ORGANIZATION  GPA/O/USA/4 
28 July 2008 
 
 (08-3608) 
Committee on Government Procurement Original: English 
  
 
NEGOTIATIONS ON EXTENSION OF COVERAGE AND ELIMINATION OF  
DISCRIMINATORY MEASURES AND PRACTICES PURSUANT TO 
ARTICLE XXIV:7(b) AND (c) OF THE AGREEMENT 
ON GOVERNMENT PROCUREMENT 
 
Communication from the United States
 
   The following communication, dated 24 July 2008, is being circulated at the request of the Delegation of the United States. 
 
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ANSWERS OF THE UNITED STATES 
TO 
QUESTIONS FROM THE EUROPEAN COMMUNITIES TO THE UNITED STATES ON 
THE UNITED STATES' CURRENT COMMITMENTS/REVISED OFFER IN THE 
NEGOTIATIONS UNDER ARTICLE XXIV:7 OF THE AGREEMENT ON  
GOVERNMENT PROCUREMENT 
  
Annex 1 - Central government entities 
 1. Does the proposed list of central entities include  all entities at the central level in the United 
States?  
 The United States' list of Annex 1 entities includes most federal agencies.  
 
2. Could the United States please provide figures on the size of procurement by the proposed 
additional entity (Social Security Administration)?  
 The Social Security Administration has a procurement budget of over US$600 million for 
Fiscal Year 2008 (1 October 2007 – 30 September 2008).  
 
3. Could the United States please explain what is the meaning of notes to Annex 1, 2(c) and (d):  "the Agreement generally  does not cover the procurement of any good described in any of the 
following FSC classification, due to the applicatio n of paragraph 1 of Article III" and "the Agreement 
generally  covers the procurement of the following FSC categories subject to United States 
Government determinations und er paragraph 1 of Article III"? 
 
 This question appears to refer to Note 3(c) and (d ), rather than Note 2(c) and (d).  Note 3(c) 
and (d) in the United States' Revised Offer (3 Octobe r 2006) relate to the coverage of the Department 
of Defense (DoD).  Note 3(c) lis ts goods that DoD may purchase fro m GPA Parties, but generally will 
not because the procurement would be subject, in most cases, to the essential security exception GPA/O/USA/4 
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  (Article III:1 of Revised GPA).  In contrast, Note  3(d) lists the goods the procurement of which in 
most cases the DoD will open to GPA Parties, but  which DoD reserves the right to close to GPA 
Parties when the essential security exception applies.  
 
Annex 2 - Sub-central government entities 
 
4. Which entities are covered under the term "executive branch agencies"?  Has any change 
taken place concerning the entities fa lling under this generic reference?  If so, do the United States 
intend to notify any change in coverage pursuant to the procedures foreseen un der the Agreement?  If 
the changes are not of a purely formal nature, do th e United States intend to compensate?  If yes, in 
what manner?  
 The entities that are covered under "executiv e agencies" vary among the states depending 
upon the structure of each state's government.  The entities covered under this term would not include 
any legislative or judicial entities.  This approach is comparable to the practice of other GPA Parties 
that define coverage by definition or description,  rather than listing the specific entities.  As the 
United States has done repeatedly, it will submit an Article XXIV:6 notification if its listing of entities 
in any Annex needs to be rectified or modified.  
5. The state of Maryland is listed under Annex 2.  In May 2005, the Maryland General Assembly 
revoked the commitment taken by the Governor of Maryland in 1993 to allow Maryland's state 
procurement rules to be bound by the GPA.  Coul d the United States please explain the state of play 
regarding the state of Maryland as regards the United States' obligations under the GPA? 
 
 There is no change in the status of the State of Maryland with respect  to its coverage under 
Annex 2. 
 
6. Could the United States please clarify the meaning and the scope of item 1 under notes to 
Annex 2? 
 
 When the 12 states covered by Note 1 to Anne x 2 agreed to cover their procurement under the 
GPA, they had restrictions on the procurement of construction-grade steel (including requirements for 
subcontracts), motor vehicles and coal.  The Note indicates that those states may continue to apply 
such restrictions and have no obligation to ope n up procurements for those three goods under the 
GPA.  
7. Could the United States please provide a list as well as a description of the functioning of the 
preferences or the restrictions whic h may be applied by the States in the framework of programmes 
promoting the development of distressed areas or bus inesses owned by minorities, disabled veterans 
or women? 
 
 The US Federal Government does not maintain a list or description of such preferences or 
restrictions. 
 
8. Could the United States please clarify the scope and the meaning of item 5 under notes to 
Annex 2?  Detailed information will be appreciated  as, according to the EC's understanding of data 
published by the Federal Highway Administrati on in 2006, expenditures under the Highway Trust 
Fund would have reached US$38.5 billion. 
  Note 5 to Annex 2 means that when the US  Federal Government a ttaches domestic content 
requirements to federal funds provided to states for mass transit projects or highway projects, suppliers of the GPA Parties may participate in the procurements for those projects, but must comply 
with the domestic content requirements.   GPA/O/USA/4 
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  Annex 3 - Other entities 
 9. Could the United States please indicate whether the Port of Baltimore (State of Maryland, see question 5) is still offered?  Could the United Stat es please give figures on the size of procurement by 
the Port of Baltimore? 
  As set out in the United States' Revised Offe r (3 October 2006), the United States continues 
to cover the Port of Baltimore.  As for the size of its procurement, the United States will provide 
statistics when it completes its overhaul of the Fede ral Procurement Data Syst em (FPDS) and submits 
its outstanding government procurement notifications to the WTO Secretariat.  
 10. As far as procurement by the Port Aut hority of New York and New Jersey are concerned, 
quite a large number of restrictions apply (item 6 under notes to Annex 1;  item 2 under notes to Annex 3 and item 5 under notes to Annex 3 (restric tions attached to federal funds for airport 
projects).  In addition, the state of New Jersey is not offered under Annex 2.  Could the United States 
please explain what procurement by this entity is offered?  
 The Port Authority of New York and New Jersey is a financially self-supporting public 
agency that receives no tax revenues from any stat e or local jurisdiction.  The United States 
Government does not maintain a list of the procurem ent covered by the Port Authority of New York 
and New Jersey since its coverage is b ased on exceptions and not a positive list. 
 
11. Could the United States please explain the meaning and the scope of item 1 under Annex 3?  
In particular, what is the impact for a GPA supplier wishing to participate to a tender by the Rural 
Utilities Service of the fact that "the Rural U tilities Service undertakes no other commitments with 
respect to its financing of power generation and telecommunications projects"? 
 
 Note 1 to Annex 3 of the United States' Revised  Offer (3 October 2006) means that the Rural 
Utilities Service (RUS) only commits to not impose any domestic purchase requirement as a condition 
of its financing of any power generation or tel ecommunication project that exceeds the specified 
threshold.  The RUS does not make any commitments as to how the procurements in the projects that 
it funds are conducted.  Also, the RUS does not con duct the procurement for the projects that it funds. 
 
Annex 5 - Services 
 12. Could the United States please provide th e corresponding CPC categories for those services 
which are not part of their proposed commitments? 
 
 For the services that the United States exclud es in Annex 4 of its current commitments and 
Annex 5 of its Revised Offer (3 October 2006), the United States is providing the CPC categories on an informational basis only:   (a) All transportation services, including launching services: 
 
- CPC 71 Land transport services 
- CPC 72 Water transport services 
- CPC 73 Air transport services 
- CPC 74 Supporting and auxiliary transport services 
- CPC 8859 Manufacture of other transport equipment 
- CPC 8868 Repair services of other transport equipment. 
 GPA/O/USA/4 
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   (b) Services associated with  the management and operation of government facilities, or 
privately owned facilities used for governme ntal purposes, including federally funded 
research and development centres.  There are no precise CPC categories that would apply to the excluded services, but they wo uld include CPC 9114 (General services 
for the government, n.e.c.). 
 
 (c) Public utilities services:  The CPC cate gories do not adequately encompass all public 
utilities, with the exception of telecommunica tions.  In its current commitments, the 
only telecommunications services that the United States covers are enhanced (i.e. valued-added) telecommunications services for which there are no precise CPC 
categories. 
  (d) In its Revised Offer (3 October 2006 ), the United States offers to cover all 
telecommunications services (CPC 752) for entities listed in Annex 1 and on List A of Annex 3 of the Revised Offer except: 
 
- CPC 75211 Public local telephone services 
- CPC 75212 Public long distance services 
- CPC 7525 Interconnection services. 
  (e) Research and development: 
 
- CPC 85 Research and development services. 
 
13. The EU-US Open Skies Agreement was signed on 30 April 2007, and it became effective on 
30 March 2008.  Under this Agreement, some spec ific provisions of the Fly America Act will no 
longer apply.  As a result, do the United States in tend to offer CPC 73 (air transport of passengers)? 
 
 In the US-EU Open Skies Agreement, the pr ovision on United States Government Procured 
Transportation applies only to carriers of the Europ ean Communities.  It is in accordance with the Fly 
America Act (Act), which allows foreign air carrier s to provide transportati on covered by the Act only 
if the transportation is provided un der a bilateral or multilateral air transportation agreement to which 
the United States and the home government of the forei gn air carrier are parties.  As a consequence, 
the United States does not anticipate offering CPC 73 under the GPA.  
14. Could the United States please explain the meaning and the scope of item 2 under notes to 
Annex 5?  In particular, could the United States please provide the corresponding CPC codes for the 
procurement which are proposed for the entities listed in Annex 1 and in list A of Annex 3?  
 
 See response to Question 12 regarding th e CPC codes excluded from the United States' 
Revised Offer (3 October 2006) for entities listed in  Annex 1 and in list A of Annex 3.  Based on 
Note 2(a) to Annex 5 of the United States' Revised Offer, the United States is offering to open to GPA 
Parties, on a reciprocal basis, the procurement of  the following telecommunications services by the 
entities listed in Annex 1 and on List A of Annex 3 of the Revised Offer: 
  (1) public and private (i.e. customized, non-common carrier) mobile services, including 
the commercial supply of mobile voice, fax and data services; 
 
 (2) public data services, which are data services that are offered on a common carrier 
basis.  One example of public data services is the tariffed services offered by local exchange carriers such as ATM transport services and frame relay services: 
  GPA/O/USA/4 
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   (3) private data services, which are services that are offered on a non-common carrier 
basis;  and 
  (4) Information services, which are the offe ring of a capability for generating, acquiring, 
storing, transforming, processing, retr ieving, utilizing or making available 
information via telecommunications.  Info rmation services are a broad category of 
value-added services.  Under the current c overage of the United States, value-added 
services are limited to "enhanced services", which are a set of functionally defined services offered over the facilities of a common carrier.  While information services would include enhanced services, they are broader.  For example, cable modem 
services, which are not offered over a common carrier facility, are considered 
information services. 
  For these entities, the only telecommunication services that would not be opened under the 
United States' Revised Offer are wire-based tele communications services connecting to the public-
switched network. 
  Based on Note 2(b) to Annex 5, a procuring entity could include a condition for participation 
that a supplier of another Party may not particip ate in a procurement where a foreign government 
owns or controls, directly or indirectly, more than 25 per cent of the supplier's capital stock.  It is not 
expected that this condition would be attached to all procurements.  Note 2(c) to Annex 5 clarifies that 
the essential security exception could be invoked,  where appropriate, in the procurement of 
telecommunications services. 
 
Annex 6  - Construction services  
 15. Could the United States please clarify thei r proposed coverage of construction services?  
Could the US confirm they offer to cover CPC 51?  If so, could they mention it clearly in their 
proposed Annex 6? 
 
 In its current Annex 4 (Services), the United States excludes the coverage of dredging (Item No. 2) and covers "All services listed in Di vision 51" in Annex 5 (Cons truction Services).  In 
the United States' Revised Offer (3 October 2006), the United States maintained its exclusion of 
dredging and continued to cover all of CPC 51.  However, it moved the dredging exclusion to 
Annex 5 (Construction Services).  As this cha nge has caused confusion regarding United States 
coverage, the United States intends to move the dre dging exclusion back to Annex 5 (Services) and to 
indicate in Annex 6 that it continues to cover all of CPC 51. 
 
Annex 7 - General notes 
 16. Small and Minority Businesses:  the United St ates circulated to the Committee a summary on 
this issue in December 2007. 
 
 An important element relates to the so-ca lled "procurement goals" established by the US 
Congress for Federal Procurement.  According to the submission circulated by the United States, 
23 per cent of all prime contracts are currently reserved for small businesses.  It is the EC's 
understanding that this percentage has varied over  time.  Could the United States please confirm 
whether this information is correct?  If yes, coul d the United States please indicate the evolution of 
this percentage since the ent ry into force of the GPA? 
 
 The US Congress has established a goal of 23  per cent participation by small businesses in 
federal prime contracts.  The 23 per cent is only a goal;  it does not indicate the contracts reserved for small businesses because a significant portion of the 23 per cent goal is met through the award of GPA/O/USA/4 
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  contracts using open competition with other suppliers.  In 1998, the (then) 20 per cent prime contracts 
goal was increased to 23 per cent pursuant to Sec tion 603(b) of Pub. L.105-135 (December 1997), 
which created the HUBZone Program with a 3 per cent goal of prime contracts awarded to small businesses in Historically Underutili zed Business Zones (HUBZones). 
  Could the United States please provide statisti cs on how the use of set-asides relates to the 
United States proposed coverage under the GPA? 
 
 The United States will provide statistics on small and minority business set-asides when the United States completes its overhaul of the Federal Procurement Data System (FPDS) and submits its 
outstanding government procurement notifications to the WTO Secretariat. 
 
 According to information made available to  the EC, the Buy American Act provides for a 
tender evaluation preference of 12 per cent where  small businesses are competing against non-US 
suppliers.  Could the United States please confirm wh ether this is correct?  If yes, could the United 
States please explain in more detail the scope of this  provision and to what extent it may affect the 
United States proposed coverage under the GPA? 
 
 The Federal Acquisition Regulation (FAR) 25.105(b)(2 ) provides that:  if there is a domestic 
offer that is not the low offer, and the restrictions  of the Buy American Act apply to the low foreign 
offer, the contracting officer must determine the reasonableness of the cost of the domestic offer by 
adding to the price of the low foreign offer, inclusiv e of duty, 12 per cent, if the lowest domestic offer 
is from a small business concern.  The contracting officer must use this factor, or another factor established in agency regulations, in small business set -asides if the low offer is from a small business 
concern offering the product of a small business concern that is not a domestic end product.  The 
12 per cent tender evaluation preference does not a pply to procurement of goods covered by the GPA 
(FAR 25.105(a)(2)). 
 
17. Could the United States please explain the meaning and the scope of general note No. 4? 
 
 General Note 4 of the United States' Revised O ffer (3 October 2006) ("Where a contract to be 
awarded by an entity is not covered by this Agreement, this Agreemen t shall not be construed to cover 
any good or service component of that contract.") is  carried over from General Note 4 in the current 
United States' General Notes.  It is intended as a clarif ication to ensure that no part of a contract that is 
not covered by the Agreement could be cons idered to be covered by the Agreement. 
 
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