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Session 6 : SCOPE AND COVERAGE OF Session 6 : SCOPE AND COVERAGE OF GOVERNMENT PROCUREMENT RULESGOVERNMENT PROCUREMENT RULES

14-17 January 2003, Dar es Salaam14-17 January 2003, Dar es Salaam

Vesile Kulaçoglu, WTO SecretariatVesile Kulaçoglu, WTO Secretariat

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Scope and coverageScope and coverage

General conceptGeneral concept

a main building block of instruments a main building block of instruments

Discussion in WGTGP including S&DDiscussion in WGTGP including S&D

Definition of ‘government procurement’Definition of ‘government procurement’ General conceptGeneral concept Discussion in WGTGPDiscussion in WGTGP

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Coverage of commitmentsCoverage of commitments

Who is doing the procuring?Who is doing the procuring?

What is being procured ?What is being procured ?

What types of transactions are What types of transactions are

covered?covered?

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SCOPE OF GOVERNMENT PROCUREMENT AND SCOPE OF GOVERNMENT PROCUREMENT AND COVERAGE OF COMMITMENTS UNDER LEGISLATIVE COVERAGE OF COMMITMENTS UNDER LEGISLATIVE

INSTRUMENTSINSTRUMENTS

ENTITY COVERAGEENTITY COVERAGE

SECTOR COVERAGESECTOR COVERAGE

SIZE OF PROCUREMENT (THRESHOLDS)SIZE OF PROCUREMENT (THRESHOLDS)

TRANSACTIONS TO BE COVEREDTRANSACTIONS TO BE COVERED

EXCEPTIONS EXCEPTIONS

ENTITY COVERAGEENTITY COVERAGE

SECTOR COVERAGESECTOR COVERAGE

SIZE OF PROCUREMENT (THRESHOLDS)SIZE OF PROCUREMENT (THRESHOLDS)

TRANSACTIONS TO BE COVEREDTRANSACTIONS TO BE COVERED

EXCEPTIONS EXCEPTIONS

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Example of the GPA -Basic StructureExample of the GPA -Basic Structure

Text of the AgreementText of the Agreement: rules : rules in Article I-XXIVin Article I-XXIV

GPA Parties’ Schedules GPA Parties’ Schedules

Appendix IAppendix I on coverage on coverage (Annexes 1 to 5 and General (Annexes 1 to 5 and General Notes) Notes)

Appendices II to IVAppendices II to IV on the on the media used for publicationsmedia used for publications

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Coverage in the Guidelines of the MDBs and Coverage in the Guidelines of the MDBs and the UNCITRAL Model Lawthe UNCITRAL Model Law

Guidelines of MDBsGuidelines of MDBs

Most public sector activities (except defense) to Most public sector activities (except defense) to the extent that they are funded by the MDB the extent that they are funded by the MDB concernedconcerned

All goods, works, equipment, and services, All goods, works, equipment, and services, including consulting services, and including consulting services, and BOT/concessionsBOT/concessions

Obligations of the Borrower derive from a Loan Obligations of the Borrower derive from a Loan Agreement (LA), which covers procurement under Agreement (LA), which covers procurement under the Projectthe Project

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UNCITRAL Model LawUNCITRAL Model Law Scope of application is as specified in the Scope of application is as specified in the

law (art 1)law (art 1) Usually national defense and national Usually national defense and national

security may be excluded security may be excluded Exclusions from coverage are to be Exclusions from coverage are to be

specified in the lawspecified in the law

BOT/Concession in principle not excluded. BOT/Concession in principle not excluded. Subsequently, a Legislative Guide on Subsequently, a Legislative Guide on Privately Financed Infrastructure Projects Privately Financed Infrastructure Projects was adopted, complementing the Model was adopted, complementing the Model LawLaw

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ENTITY COVERAGE - LEVELS OF ENTITY COVERAGE - LEVELS OF GOVERNMENT ENTITIES GOVERNMENT ENTITIES

(who is doing the procuring?)(who is doing the procuring?)

CENTRAL GOVERNMENT LEVELCENTRAL GOVERNMENT LEVEL

SUB-CENTRAL GOVERNMENT SUB-CENTRAL GOVERNMENT

LEVELLEVEL

OTHER PUBLIC ENTITIES OR OTHER PUBLIC ENTITIES OR

ENTREPRISESENTREPRISES

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GPA Example -Coverage in Appendix IGPA Example -Coverage in Appendix I Entity Annexes Entity Annexes

Annex 1 - Central Government bodies (above 200,000 Annex 1 - Central Government bodies (above 200,000 SDR)SDR)

Annex 2 - Sub-central Government bodies (above Annex 2 - Sub-central Government bodies (above

400,000 SDR)400,000 SDR)

Annex 3 - Other public entities and enterprises (above Annex 3 - Other public entities and enterprises (above 400,000 SDR)400,000 SDR)

Services Annexes Services Annexes Annex 4 – Services (above 400,000 SDR)Annex 4 – Services (above 400,000 SDR)

Annex 5 - Construction services (above Annex 5 - Construction services (above 5 million SDR) 5 million SDR)

General NotesGeneral Notes

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Who is doing the procuring?Who is doing the procuring? (GPA Example)(GPA Example)

Entity lists:Entity lists:

Annex 1 - Central Government bodies

Annex 2 - Sub-central Government bodies

Annex 3 - Other public entities and enterprises

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Questions raised in the WTO Working Group Questions raised in the WTO Working Group under item Iunder item I

Whether transparency rules should Whether transparency rules should apply to procurements by all or only apply to procurements by all or only some government entities (levels of some government entities (levels of entities)entities)

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Questions raised in the WTO Working Questions raised in the WTO Working Group under item I (contn’d)Group under item I (contn’d)

Whether procurement of services as Whether procurement of services as well as of goods should be covered well as of goods should be covered (sectors)(sectors)

Whether only procurement contracts Whether only procurement contracts above a certain threshold value above a certain threshold value should be covered (size)should be covered (size)

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GPA Example -What is being GPA Example -What is being procured?procured?

All goods (All goods (no particular listno particular list))

Services listed in Services listed in Annex 4Annex 4

Construction services listed Construction services listed in in Annex 5Annex 5

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Questions raised under in the WTO Working Questions raised under in the WTO Working Group under item I (cont’d)Group under item I (cont’d)

What type of transactions should be What type of transactions should be covered (concessions and BOT covered (concessions and BOT contracts)contracts)

what provisions should be made for what provisions should be made for exceptions (general, S&D)exceptions (general, S&D)

other matters (only procurement other matters (only procurement open to competition)open to competition)

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What types of transactions are covered?What types of transactions are covered?

Any contractual means including:Any contractual means including: PurchasePurchase LeaseLease RentalRental Hire purchase, with or without option Hire purchase, with or without option

to buyto buy BOT contracts and concessionsBOT contracts and concessions

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Procurement of BOT ConcessionsProcurement of BOT Concessions

Issue is specifically addressed in MDB Issue is specifically addressed in MDB GuidelinesGuidelines

WB Guidelines provide for competitive WB Guidelines provide for competitive bidding (Open or Limited) with PQ and/or bidding (Open or Limited) with PQ and/or one or two-stage bidding processone or two-stage bidding process

If competitive bidding has not been used If competitive bidding has not been used for selection of concessionaire, then it for selection of concessionaire, then it must be used for procurement of goods must be used for procurement of goods and services financed by the WBand services financed by the WB

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EXCEPTIONS FROM COVERAGEEXCEPTIONS FROM COVERAGE

General exception clauses in GATT General exception clauses in GATT Articles XX and XXI and in GPA Articles XX and XXI and in GPA Article XXI :Article XXI :

NATIONAL SECURITYNATIONAL SECURITY

HEALTH AND SAFETY HEALTH AND SAFETY

OTHER OTHER

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Issues raised in WTO Working Group Issues raised in WTO Working Group under item I (contn’d)under item I (contn’d)

Definition of Definition of

‘ ‘government procurement’government procurement’

a general definition a general definition

or or

reference to GATT and GATS ?reference to GATT and GATS ?

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Existing definitions in GATT and GATSExisting definitions in GATT and GATS GATT Article III:8(a)GATT Article III:8(a)…….. shall not apply to laws regulations and requirements .. shall not apply to laws regulations and requirements governing governing

the procurement by the procurement by agencies of products agencies of products purchased for purchased for governmental purposes and not with a view to commercial governmental purposes and not with a view to commercial resaleresale or with a view to use in the production of goods for or with a view to use in the production of goods for commercial resalecommercial resale

GATT Article XVII:2GATT Article XVII:2 ……..shall not apply to imports of products ..shall not apply to imports of products for immediate and for immediate and

ultimate consumption in governmental useultimate consumption in governmental use … …

GATS Article III:2GATS Article III:2……..s..shall not apply to laws, regulations or requirements hall not apply to laws, regulations or requirements

governing the procurement governing the procurement by governmental agencies of by governmental agencies of services services purchased for governmental purposes and not with a purchased for governmental purposes and not with a view to commercial resaleview to commercial resale or with a view to use in the supply of or with a view to use in the supply of services for commercial resaleservices for commercial resale