The recent revision of the procedural rules of the WTO Government Procurement Agreement should facilitate its use by Parties and accessions by developing countries.
The Parties to the WTO Government Procurement Agreement (GPA) approved a major revision of the Agreement in March 2012, which is now awaiting implementation. The revision — the first since the GPA was implemented in 1996 – significantly improves the GPA by overhauling its procedural rules and expanding the procurement covered by the Agreement. The revision modernizes the GPA text to reflect current procurement practices, in particular the use of electronic procurement, and makes it more user friendly by clarifying obligations, removing ambiguities and redundancies and adopting a more coherent structure that reflects the conduct of procurement. Yet, the revision changes neither the fundamental obligations nor rights of the Parties under the Agreement.
The revised text includes the following improvements:
- Expands transitional measures for developing countries that join the GPA to encourage and facilitate their accession to the GPA. Measures include:
- Higher temporary thresholds (monetary values above which the GPA applies to a procurement);
- Phase-in coverage of specific entities or sectors;
- Price preferences;
- Delayed application of specific provisions of the agreement for specified obligations.
- Encourages the use of electronic procurement by allowing for a five-day reduction in the 40-day tendering period in each of the following cases:
- Notice of intended procurement is published by electronic means;
- All tender documentation is published by electronic means from the time the notice is published; and
- Tenders are received by electronic means.
- Specifies disciplines for conducting procurement by electronic means, including requirements that the information technology systems and software are generally available and interoperable and ensure the integrity of tenders.
- Accelerates the purchase of commercial (off-the-shelf) goods and services by allowing the tendering period to be reduced to not less than 13 days – if both the notice of intended procurement and the tender documentation are published by electronic means.
- Allows use of electronic auctions in conducting procurement and specifies rules for their use and required information.
- Requires procuring entities to conduct procurement so as to avoid conflicts of interest and prevent corrupt practices.
- Elaborates on conditions for participation, such as prohibiting a procuring entity from requiring a supplier to have had a previously awarded contract by the entity. But, it may require relevant prior experience where essential to meet the requirements.
- Expands grounds for exclusion of suppliers to include significant or persistent deficiencies in performance under prior contracts, criminal convictions, professional misconduct that adversely reflects on the supplier’s commercial integrity and failure to pay taxes.
- Requires all qualified suppliers to be allowed to participate in procurement unless the procuring entity indicates in the notice any limitations on the number and the criteria for selecting the limited number.
- Requires notices of intended procurement of central government entities to be accessible by electronic means through a single point of access. Notices for other entities must be provided at least through links in a gateway electronic site.
- Encourages consideration of tenders of equivalent goods or services where design or descriptive characteristics are used in technical specifications.
- Adds clarification that environmental considerations may be included in technical specifications.
- Incorporates concept of covered procurement to simplify references to procurement covered under the GPA, e.g., exclude purchases for commercial sale or resale.
- Adds list of activities not covered by the GPA, including acquisition or rental of land and buildings, non-contractual agreements or any form of assistance (such as grants and loans) and public employment contracts.
- Simplifies reporting of statistics when they are available on an official website.
- Provides for adoption of arbitration procedures to facilitate resolution of objections to a Party’s proposed withdrawal of an entity from GPA coverage on the basis that government control or influence has been effectively eliminated.
- Removes transparency requirement for observers to the GPA.
- Provides for future work programs on new issues and issues not resolved during negotiations on the revision.
- Adds definitions, such as commercial goods and services and electronic auction, and consolidates definitions into a single article.
- Adds a Goods Annex to parallel annexes for services and construction services.
The revision of the GPA procedures should facilitate implementation of the Agreement by the Parties with its increased transparency and flexibility. In addition, the revision, in particular the transitional measures available for developing countries, should make the GPA more attractive to membership by other WTO members.
The second element of the revision – the expansion of coverage – will be addressed in a subsequent posting.
Jean Heilman Grier
November 11, 2013