Complete Home & Office Legal Guide/Complete Home and Office Legal Guide (Chestnut) (1993).ISO/stat/nafta/10pro_a.asc

Text File | 1993-09-14 | 41KB | 953 lines

                                Chapter Ten

                          Government Procurement


Article 1001: Objectives

     The Parties shall strive to achieve the liberalization of
their measures regarding government procurement, as specified by
the obligations in this Chapter, so as to provide balanced,
non-discriminatory, predictable and transparent government
procurement opportunities for the suppliers of each Party.


Article 1002: Scope and Coverage

1.   Subject to Annexes 1002.1 through 1002.7, this Chapter
applies to any measure regarding the procurement of goods or
services or any combination thereof, by any entity listed in
Annex 1002.1 (Federal Government Entities), Annex 1002.3
(Government Enterprises) and, when completed, Annex 1002.2 (State
and Provincial Government Entities), where the value of the
contract to be awarded is estimated, at the time of publication
of a notice in accordance with Article 1010 (Invitation to
Participate), to equal or exceed the applicable threshold as set
forth in paragraph 3.

2.   Where the contract to be awarded by the entity is not
covered by this Chapter, this Chapter shall not be construed to
cover any good or service component of that contract. However, no
Party shall prepare, design or otherwise structure any
procurement contract in order to avoid the obligations of this
Chapter.

3.   Subject to Annex 1002-A, the applicable thresholds in U.S.
dollars are:

     (a) for entities listed in Annex 1002.1 (Federal Government
Entities),

     (i) $50,000 for goods contracts,

     (ii) $50,000 for services contracts, except for construction
services contracts, and

     (iii) $6.5 million for construction services contracts; and

     (b) for entities listed in Annex 1002.3 (Government
Enterprises)

     (i) $250,000 for goods contracts,

     (ii) $250,000 for services contracts, except for
construction services contracts, and

     (iii) $8.0 million for construction services contracts.

4.   Threshold values are denominated in real terms and therefore
shall incorporate the inflation rate of the United States. The
United States shall, every two years, calculate and notify to the
other Parties the threshold values denominated in nominal terms
according to of Annex 1002.8 (1) (Indexation and Conversion of
Thresholds).

5.   Each Party shall comply with Annex 1002.8 with respect to
the calculation and conversion of the value of thresholds into
national currencies.

6.   For purposes of this Chapter, procurement includes
procurement by such methods as purchase, lease or rental, with or
without an option to buy, in accordance with the thresholds and
coverage applicable in this Chapter. Procurement does not include
the acquisition of fiscal agency or depository services,
liquidation and management services for regulated financial
institutions and sale and distribution services for government
debt.

7.   As between any Parties who are also party to the GATT
Agreement on Government Procurement or any successor agreement to
which such Parties are party, this Chapter shall prevail to the
extent of any inconsistency between the provisions of such
agreement and this Chapter.


Article 1003: Valuation of Contracts

1.   Each Party shall ensure that its entities, in determining
whether any contract is subject to this Chapter, apply paragraphs
2 through 6 in calculating the value of that contract.

2.   An entity, in calculating the value of a contract, shall
take into account all forms of remuneration, including premiums,
fees, commissions and interest.

3.   An entity shall not select a valuation method, or divide
procurement requirements into separate contracts, to avoid the
application of this Chapter.

4.   Where an individual requirement for a procurement results in:

     (a) the award of more than one contract, or

     (b) in contracts being awarded in separate parts,

the basis for valuation shall be either:

     (c) the actual value of similar recurring contracts
concluded over the previous fiscal year or 12 months adjusted,
where possible, for anticipated changes in quantity and value
over the subsequent twelve months; or

     (d) the estimated value of recurring contracts in the fiscal
year or 12 months subsequent to the initial contract.

5.   In the case of a contract for lease or rental, with or
without an option to buy, or in the case of a contract that does
not specify a total price, the basis for valuation shall be:

     (a) in the case of a fixed-term contract, where the term is
12 months or less, the total contract value for its duration or,
where the term exceeds 12 months, the total contract value
including the estimated residual value; or

     (b) in the case of a contract for an indefinite period, the
estimated monthly installment multiplied by 48.

If the entity is uncertain as to whether a contract is for a
fixed or an indefinite term, the entity shall calculate the value
of the contract using the method set forth in subparagraph (b).

6.   In cases in which tender documentation specifies the need
for optional purchases, the basis for valuation shall be the
total value of the maximum permissible procurement, inclusive of
all possible optional purchases.


Article 1004: National Treatment and Non-discrimination

1.   With respect to all measures regarding government
procurement covered by this Chapter, each Party shall accord to
goods of any other Party, as determined in accordance with the
rules of origin referred to in Article 1005(1) (Rules of Origin),
to services of any other Party, as determined in accordance with
Article 1005(2), and to the suppliers of such goods or services,
treatment no less favorable than the most favorable treatment
that it accords to:

     (a) goods, services and suppliers of that Party; and

     (b) goods, services and suppliers of any other Party.

2.   With respect to all measures regarding government procurement
covered by this Chapter, no Party may:

     (a) treat a locally established supplier less favorably than
another locally established supplier on the basis of degree of
foreign affiliation or ownership; or

     (b) discriminate against a locally established supplier if
the goods or services offered by that supplier for the particular
procurement are goods or services of any other Party.

3.   Paragraph 1 does not apply to customs duties and charges of
any kind imposed on or in connection with importation, the method
of levying such duties and charges, and other import regulations,
including restrictions and formalities.

4.   Each Party reserves the right to deny to an enterprise of
any other Party the benefits of this Chapter in accordance with
the provisions of Article 1113 (Denial of Benefits), except
subparagraph (a).


Article 1005: Rules of Origin

1.   No Party shall apply to goods that are imported from any
other Party for purposes of government procurement covered by
this Chapter, rules of origin that are different from or
inconsistent with the rules of origin the Party applies in the
normal course of trade, which will be the non-preferential rules
set out in Chapter Three (for country of origin marking purposes)
at such time as they become the rules of origin applied in the
normal course of trade.

2.   Notwithstanding any other provision of this Chapter, a Party
may deny to an enterprise that is a supplier of services of
another Party the benefits of this Chapter if:

     (a) nationals of any non-Party own or control that
enterprise; and

     (b) that enterprise has no substantial business activities
in the territory of the Party under whose laws it is constituted.


Article 1006: Prohibition of Offsets

     Each Party shall ensure that its entities do not, in the
qualification and selection of suppliers, goods or services, or
in the evaluation of bids and the award of contracts, consider,
seek or impose offsets.


Article 1007: Technical Specifications

1.   Each Party shall ensure that its entities do not, wi