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Canada-Honduras Free Trade Agreement

Chapter Seventeen: Government Procurement

Article 17.1: Definitions

For the purposes of this Chapter:

in writing or written means a worded or numbered expression that can be read, reproduced and later communicated; it may include electronically transmitted and stored information;

limited tendering means a procurement method by which the procuring entity contacts a supplier of its choice and may, in the circumstances set out in Article 17.11(2), choose not to apply Articles 17.6, 17.7, 17.9, 17.10, 17.12 and 17.13;

offsets means a condition or undertaking that encourages local development or improves a Party’s balance-of-payments accounts, such as the use of domestic content, investment, counter-trade, the licensing of technology or similar actions or requirements;

open tendering procedure means a procurement method by which all interested suppliers may submit a tender;

original development includes limited production or supply in order to incorporate the results of field testing and to demonstrate that the good or service is suitable for production or supply in quantity to acceptable quality standards, but does not include quantity production or supply to establish commercial viability or to recover research and development costs;

procurement means the process by which a procuring entity obtains the use of or acquires a good or service for a governmental purpose and not with a view to commercial sale or resale, or use in the production or supply of a good or service for commercial sale or resale;

procuring entity means an entity of a Party listed in Annexes 17.1 or 17.2;

publish means to disseminate information in an electronic or paper medium that is widely distributed and that is readily accessible to the general public;

service includes a construction service, unless otherwise specified;

supplier means a person that has provided, provides or could provide a good or service to a procuring entity; and

technical specification means a tendering requirement that:

Article 17.2: Scope and Coverage

1. This Chapter applies to a measure regarding a covered procurement.

2. For the purposes of this Chapter, covered procurement means procurement for a governmental purpose:

3. This Chapter does not apply to:

4. If a procuring entity awards a contract that is not covered by this Chapter, this Chapter does not cover a good or service component of that contract.

5. Nothing in this Chapter prevents a Party from developing new procurement policies, procedures or contractual means, provided they are not inconsistent with this Chapter.

Valuation

6. In estimating the value of a procurement in order to ascertain whether it is a procurement covered by this Chapter, a procuring entity shall:

Article 17.3: Security and General Exceptions

1. This Chapter does not prevent a Party from taking an action or not disclosing information that it considers necessary for the protection of its essential security interests relating to procurement:

2. Provided that a measure is not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination against a Party if the same conditions prevail, or a disguised restriction on trade between the Parties, a Party may adopt or maintain a measure:

Article 17.4: General Principles

National Treatment and Non-Discrimination

1. With respect to a measure regarding a covered procurement, each Party, including its procuring entities, shall accord to a good or service of the other Party, and to a supplier of the other Party of that good or service, treatment no less favourable than the most favourable treatment the Party or entity accords to a domestic good, service or supplier.

2. With respect to a measure regarding a covered procurement, a Party, including its procuring entities, may not:

Rules of Origin

3. With regard to the procurement of a good covered by this Chapter, each Party shall apply the rules of origin that it applies to that good in the normal course of trade.

Offsets

4. Subject to this Chapter, a Party, including its procuring entities, shall not seek, take account of, or impose offsets at a stage of a procurement process.

Measures Not Specific to Procurement

5. This Article does not apply to:

Article 17.5: Information on the Procurement Process

1. Each Party shall promptly:

specifically governing procurement covered by this Chapter.

2. At the request of a Party, the other Party shall provide it with a copy of a judicial decision or administrative ruling of general application or procedure.

Article 17.6: Publication of Notices

Notice of Intended Procurement

1. Unless otherwise provided in Article 17.11(2), a procuring entity shall, for each procurement covered by this Chapter, publish a notice of intended procurement that remains readily accessible to the public inviting suppliers to submit tenders. A procuring entity shall publish the notice in publications that are widely disseminated and remain readily accessible to the public.

2. Each notice of intended procurement shall include:

Notice of Planned Procurement

3. Each Party shall encourage its procuring entities to publish, as early as possible in each fiscal year, a notice regarding that procuring entity’s future procurement plans.

Article 17.7: Conditions for Participation

1. If a procuring entity requires a supplier to satisfy a registration, qualification, or other requirement or condition for participation in order to participate in a procurement process, the procuring entity shall publish a notice inviting suppliers to apply for registration, qualification or demonstration of suppliers’ satisfaction of any other conditions for participation. The procuring entity shall publish the notice sufficiently in advance to provide interested suppliers sufficient time to prepare and submit applications and to provide the procuring entity with sufficient time to evaluate and make its determinations based on those applications. The procuring entity may establish a final date for the submission of requests for participation, provided that date allows suppliers a reasonable time to prepare and submit such requests, taking into account the nature and complexity of the procurement.

2. In establishing the conditions for participation, a procuring entity shall:

3. To assess whether a supplier satisfies the conditions for participation, a procuring entity shall:

List of Suppliers

4. A procuring entity may establish or maintain a publicly available list of suppliers qualified to participate in a procurement process. If a procuring entity requires a supplier to qualify for a list as a condition for participation in a procurement process, and a supplier that has not yet qualified applies for inclusion in the list, the procuring entity shall promptly start the qualification procedures and shall allow the supplier to submit a tender, if it is determined to be a qualifying supplier, provided there is sufficient time to fulfill the conditions for participation within the time period established for tendering.

Information on Procuring Entity Decisions

5. A procuring entity shall promptly inform a supplier that applies for participation in a procurement process or for inclusion on a list of suppliers of the procuring entity’s decision with respect to the application.

6. If a procuring entity:

the procuring entity shall promptly inform the supplier of its decision and, at the request of the supplier, promptly provide the supplier with a written explanation of the reasons for its decision.

7. A procuring entity may exclude a supplier from a procurement process on grounds such as bankruptcy or false declarations.

Article 17.8: Technical Specifications

1. A procuring entity may not prepare, adopt or apply a technical specification with the purpose or the effect of creating an unnecessary obstacle to trade between the Parties.

2. In prescribing a technical specification for a good or service being procured, a procuring entity, shall, if appropriate:

3. A procuring entity shall not prescribe a technical specification requiring or referring to a particular trademark or trade name, patent, design, type, specific origin, or producer or supplier, unless there is no other sufficiently precise or intelligible way of describing the procurement requirement, provided that, in those cases, the procuring entity includes words such as “or equivalent” in the tender documentation.

4. A procuring entity shall not seek or accept, in a manner that would have the effect of precluding competition, advice that may be used to prepare or adopt a technical specification for a specific procurement from a person that may have a commercial interest in that procurement.

5. For greater certainty, this Article does not preclude a procuring entity from preparing, adopting, or applying a technical specification to promote the conservation of natural resources.

Article 17.9: Tender Documentation

1. A procuring entity shall make available to interested suppliers tender documentation that includes the information necessary for a supplier to prepare and submit a responsive tender. The documentation shall include the evaluation criteria that the procuring entity intends to use to award the contract, including the cost factors and the weights or, if appropriate, the relative values, that the procuring entity will assign to the criteria in evaluating tenders.

2. A procuring entity may make available the tender documentation required by paragraph 1 by publishing that documentation by electronic means accessible to interested suppliers. If a procuring entity does not publish tender documentation by electronic means accessible to interested suppliers, it shall promptly make the documentation available at the request of a supplier.

Modifications

3. If, in the course of a procurement process, a procuring entity modifies the criteria referred to in paragraph 1, it shall transmit the amended tender documentation in writing:

Article 17.10: Time Limits for the Submission of Tenders

1. A procuring entity shall provide suppliers sufficient time to submit applications to participate in a procurement and to prepare and submit responsive tenders, taking into account the nature and complexity of the procurement.

Deadlines

2. Except as provided for in paragraphs 3 and 4, a procuring entity shall establish that the final date for the submission of tenders is not less than 40 days from the date on which the notice of intended procurement is published.

3.  If domestic law allows, a procuring entity may reduce by 5 days the time limit established under paragraph 2 for the submission of tenders, for each one of the following circumstances:

4. A procuring entity may establish a time limit of less than 40 days for suppliers to submit tenders, but not less than 10 days, if:

Article 17.11: Limited Tendering

1. Subject to paragraph 2, a procuring entity shall award a contract by means of open tendering procedures.

2. Provided that a procuring entity does not use this paragraph to avoid competition among suppliers or to protect domestic suppliers, the procuring entity may award a contract by limited tendering or other equivalent tendering procedures if:

3. A procuring entity shall maintain a record or prepare a written report for each contract awarded under paragraph 2 in a manner consistent with Article 17.13(3). The record or report shall indicate the circumstances and conditions described in paragraph 2 that justify the use of limited tendering.

Article 17.12: Awarding of Contracts

1. To be considered for award, a tender shall be submitted in writing by a supplier that has satisfied the conditions for participation and shall, at the time it is submitted, conform to the essential requirements of the tender documentation.

2. Unless a procuring entity determines that it is not in the public interest to award a contract, it shall award the contract to the supplier that the procuring entity determines is fully able to undertake the contract and, based on the requirements and evaluation criteria set out in the tender documentation, submits the most advantageous tender.

Article 17.13: Information on Awarded Contracts

Information Provided to Suppliers

1. A procuring entity shall promptly inform suppliers that submit tenders of the procuring entity’s contract award decision. Subject to Article 17.14, a procuring entity shall, on request, provide an unsuccessful supplier with the reasons why the procuring entity did not select that supplier’s tender and the relative advantages of the successful supplier’s tender.

Publication of Award Information

2. Promptly after awarding a contract, a procuring entity shall publish a notice that includes the following information about the contract award:

Maintenance of Records

3. A procuring entity shall maintain records and reports of tendering procedures and contract awards, including the records and reports provided for in Article 17.11(3), and shall retain those records and reports for a period of at least 3 years after the award of a contract.

Article 17.14: Non-Disclosure of Information

1. A Party, including its procuring entities, administrative authorities, and judicial authorities, may not disclose confidential information that would prejudice the legitimate commercial interests of a particular person or that could prejudice fair competition between suppliers, without the formal authorization of the person that provided the information to the Party.

2. A Party, including its procuring entities, is not required under this Chapter to release confidential information if the release:

Article 17.15: Domestic Review Procedures

1. Each Party shall establish or designate at least one impartial administrative or judicial authority that is independent from its procuring entities to:

2. Each Party shall ensure that an authority it establishes or designates under paragraph 1 provides a supplier with:

3. Each Party shall ensure that an authority it establishes or designates under paragraph 1 may take a prompt interim measure to preserve the supplier’s opportunity to participate in the procurement process, including the suspension of the procurement process. The procedures for taking an interim measure may provide that overriding adverse consequences for the interests concerned, including the public interest, may be taken into account when deciding whether an interim measure should be applied.

4. Each Party shall ensure that its review procedures are made generally available in writing and that those procedures are timely, transparent, effective, and consistent with the principle of due process.

5. Each Party shall ensure that a document related to a supplier’s challenge of a procurement process is available to the authority established or designated under paragraph 1.

6. A procuring entity shall respond in writing to a supplier’s challenge.

7. Each Party shall ensure that a supplier’s challenge is reviewed in a manner that does not prejudice that supplier’s participation in an ongoing or future procurement process.

8. If a body other than an authority established or designated under paragraph 1 initially reviews a supplier’s challenge, the Party shall ensure that the supplier may appeal the initial decision to an impartial administrative or judicial authority that is independent of the procuring entity whose procurement process is the subject of the challenge.

Article 17.16: Modifications and Rectifications to Coverage

1. A Party may make technical rectifications of a purely formal nature to its coverage under this Chapter, or minor amendments to the Annexes to this Chapter, provided that it notifies the other Party in writing and that the other Party does not object in writing within 30 days of receipt of the notification. A Party is not required to provide compensatory adjustments to the other Party for these technical rectifications or minor amendments.

2. A Party may modify its coverage under this Chapter if it:

3. Notwithstanding paragraph 2(b), a Party is not required to provide compensatory adjustments if the proposed modification covers a procuring entity on which the Parties decide that the Party has effectively eliminated its control or influence.

4. If a Party disputes that government control or influence has been effectively eliminated, the objecting Party may request further information or discussions with a view to clarifying the nature of any government control or influence and jointly determining the procuring entity’s status under this Chapter.

5. If the Parties at the Commission agree to the proposed modification, rectification, or minor amendment, or if a Party has not objected within 30 days under paragraphs 1 or 2(a), they shall give effect to the agreement by promptly modifying the relevant Annex according to national legislation.

6. If a Party does object within 30 days under paragraphs 1 or 2(a), or does not accept the compensatory adjustment offered under paragraph 2(b), then the change to coverage proposed by the other Party under that paragraph does not take effect.

Article 17.17: Updating Provision

In the interest of promoting the modernization of procurement systems and ensuring consistency with the procedural obligations of the Parties’ other trade agreements relating to procurement, if one Party enters into another international agreement that updates procurement procedures and practices, then, at the request of either Party, the Parties shall consider whether they should modify this Chapter.

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