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Session 6 : SCOPE AND COVERAGE OF GOVERNMENT PROCUREMENT RULES 14-17 January 2003, Dar es Salaam Vesile Kulaçoglu, WTO

Session 6 : SCOPE AND COVERAGE OF GOVERNMENT PROCUREMENT RULES 14-17 January 2003, Dar es Salaam Vesile Kulaçoglu, WTO Secretariat. Scope and coverage General concept a main building block of instruments Discussion in WGTGP including S&D Definition of ‘government procurement’

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Session 6 : SCOPE AND COVERAGE OF GOVERNMENT PROCUREMENT RULES 14-17 January 2003, Dar es Salaam Vesile Kulaçoglu, WTO

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  1. Session 6 : SCOPE AND COVERAGE OF GOVERNMENT PROCUREMENT RULES 14-17 January 2003, Dar es Salaam Vesile Kulaçoglu, WTO Secretariat

  2. Scope and coverage • General concept a main building block of instruments • Discussion in WGTGP including S&D Definition of ‘government procurement’ • General concept • Discussion in WGTGP

  3. Coverage of commitments Who is doing the procuring? What is being procured ? What types of transactions are covered?

  4. SCOPE OF GOVERNMENT PROCUREMENT AND COVERAGE OF COMMITMENTS UNDER LEGISLATIVE INSTRUMENTS • ENTITY COVERAGE • SECTOR COVERAGE • SIZE OF PROCUREMENT (THRESHOLDS) • TRANSACTIONS TO BE COVERED • EXCEPTIONS

  5. Example of the GPA -Basic Structure • Text of the Agreement: rules in Article I-XXIV • GPA Parties’ Schedules Appendix I on coverage (Annexes 1 to 5 and General Notes) Appendices II to IV on the media used for publications

  6. Coverage in the Guidelines of the MDBs and the UNCITRAL Model Law Guidelines of MDBs • Most public sector activities (except defense) to the extent that they are funded by the MDB concerned • All goods, works, equipment, and services, including consulting services, and BOT/concessions • Obligations of the Borrower derive from a Loan Agreement (LA), which covers procurement under the Project

  7. UNCITRAL Model Law • Scope of application is as specified in the law (art 1) • Usually national defense and national security may be excluded • Exclusions from coverage are to be specified in the law • BOT/Concession in principle not excluded. Subsequently, a Legislative Guide on Privately Financed Infrastructure Projects was adopted, complementing the Model Law

  8. ENTITY COVERAGE - LEVELS OF GOVERNMENT ENTITIES (who is doing the procuring?) • CENTRAL GOVERNMENT LEVEL • SUB-CENTRAL GOVERNMENT LEVEL • OTHER PUBLIC ENTITIES OR ENTREPRISES

  9. GPA Example -Coverage in Appendix I • Entity Annexes Annex 1 - Central Government bodies (above 200,000 SDR) Annex 2 - Sub-central Government bodies (above 400,000 SDR) Annex 3 - Other public entities and enterprises (above 400,000 SDR) • Services Annexes Annex 4 – Services (above 400,000 SDR) Annex 5 - Construction services (above 5 million SDR) • General Notes

  10. Who is doing the procuring?(GPA Example) Entity lists: • Annex 1 - Central Government bodies • Annex 2 - Sub-central Government bodies • Annex 3 - Other public entities and enterprises

  11. Questions raised in the WTO Working Group under item I • Whether transparency rules should apply to procurements by all or only some government entities (levels of entities)

  12. Questions raised in the WTO Working Group under item I (contn’d) • Whether procurement of services as well as of goods should be covered (sectors) • Whether only procurement contracts above a certain threshold value should be covered (size)

  13. GPA Example -What is being procured? • All goods (no particular list) • Services listed in Annex 4 • Construction services listed in Annex 5

  14. Questions raised under in the WTO Working Group under item I (cont’d) • What type of transactions should be covered (concessions and BOT contracts) • what provisions should be made for exceptions (general, S&D) • other matters (only procurement open to competition)

  15. What types of transactions are covered? Any contractual means including: • Purchase • Lease • Rental • Hire purchase, with or without option to buy • BOT contracts and concessions

  16. Procurement of BOT Concessions • Issue is specifically addressed in MDB Guidelines • WB Guidelines provide for competitive bidding (Open or Limited) with PQ and/or one or two-stage bidding process • If competitive bidding has not been used for selection of concessionaire, then it must be used for procurement of goods and services financed by the WB

  17. EXCEPTIONS FROM COVERAGE General exception clauses in GATT Articles XX and XXI and in GPA Article XXI : • NATIONAL SECURITY • HEALTH AND SAFETY • OTHER

  18. Issues raised in WTO Working Group under item I (contn’d) Definition of ‘government procurement’ a general definition or reference to GATT and GATS ?

  19. Existing definitions in GATT and GATS GATT Article III:8(a) ….. shall not apply to laws regulations and requirements governing the procurement by agencies of products purchased for governmental purposes and not with a view to commercial resale or with a view to use in the production of goods for commercial resale GATT Article XVII:2 …..shall not apply to imports of products for immediate and ultimate consumption in governmental use … GATS Article III:2 …..shall not apply to laws, regulations or requirements governing the procurement by governmental agencies of services purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of services for commercial resale

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