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, with the

purpose or the effect of creating unnecessary obstacles to trade,

prepare, adopt or apply any technical specification laying down:

(a) the characteristics of the goods or services to be

procured such as quality, performance, safety and

dimensions, symbols, terminology, packaging, marking and

labelling;

(b) the processes and methods for their production related to

the goods characteristics; or

(c) requirements relating to conformity assessment.

2. Each Party shall ensure that any technical specification

prescribed by its entities is, where appropriate:

(a) specified in terms of performance criteria rather than

design or descriptive characteristics; and

(b) based on international standards, national technical

regulations, recognized national standards or building

codes.

3. Each Party shall ensure that the technical specifications

prescribed by its entities do not require or refer to a particular

trademark or name, patent, design or type, specific origin or

producer or service provider unless there is no sufficiently

precise or intelligible way of otherwise describing the procurement

requirements and provided that, in such cases, words such as "or

equivalent" are included in the tender documentation.

4. Each Party shall ensure that its entities do not seek or

accept, in a manner that would have the effect of precluding

competition, advice that may be used in the preparation or adoption

of any technical specification for a specific procurement from a

person that may have a commercial interest in that procurement.

Article 1008:Tendering Procedures

1. Each Party shall ensure that the tendering procedures of its

entities:

(a) are applied in a non-discriminatory manner; and

(b) are consistent with the provisions of this Article and

with Articles 1009 (Qualification of Suppliers) through

1016 (Limited Tendering).

2. In this regard, each Party shall ensure that its entities:

(a) do not provide to any supplier information with regard to

a specific procurement in a manner that would have the

effect of precluding competition; and

(b) provide all suppliers equal access to information with

respect to a procurement during the period prior to the

issuance of any notice or tender documentation.

Article 1009: Qualification of Suppliers

1. No entity of a Party may, in the process of qualifying

suppliers in tendering procedures, discriminate between suppliers

of the other Parties or between domestic suppliers and suppliers of

the other Parties.

2. The qualification procedures followed by an entity of a Party

shall be consistent with the following:

(a) any conditions for participation by suppliers in

tendering procedures shall be published sufficiently in

advance so as to provide the suppliers adequate time to

initiate and, to the extent that it is compatible with

efficient operation of the procurement process, to

complete the qualification procedures;

(b) any conditions for participation by suppliers in

tendering procedures, including financial guarantees,

technical qualifications and information necessary for

establishing the financial, commercial and technical

capacity of suppliers, as well as the verification of

whether a supplier meets those conditions, shall be

limited to those that are essential to ensure the

fulfillment of the contract in question;

(c) the financial, commercial and technical capacity of a

supplier shall be judged both on the basis of that

supplier's global business activity and its activity, if

any, in the territory of the Party of the procuring

entity;

(d) no entity may misuse the process of, including the time

required for, qualification in order to exclude suppliers

of any other Party from a suppliers' list or from being

considered for a particular procurement;

(e) an entity shall recognize as qualified suppliers those

suppliers of any other Party that meet the conditions for

participation in a particular procurement;

(f) an entity shall consider for a particular procurement

those suppliers of any other Party that request to

participate in the procurement and that are not yet

qualified, provided there is sufficient time to complete

the qualification procedure;

(g) an entity that maintains a permanent list of qualified

suppliers shall ensure that suppliers may apply for

qualification at any time, that all qualified suppliers

so requesting are included in the list within a

reasonably short period of time and that all qualified

suppliers included in the list are notified of the

termination of any such list or of their removal from it;

(h) if, after publication of a notice in accordance with

Article 1010 (Invitation to Participate), a supplier that

is not yet qualified requests to participate in a

particular procurement, the entity shall promptly start

the qualification procedure;

(i) an entity shall advise any supplier that requests to

become a qualified supplier of its decision as to whether

that supplier has become qualified; and

(j) where an entity rejects a supplier's application to

qualify or ceases to recognize a supplier as qualified,

the entity shall, upon request of the supplier, promptly

provide pertinent information concerning the entity's

reasons for doing so.

3. Each Party shall:

(a) ensure that each of its entities uses a single

qualification procedure, except that an entity may use

additional qualification procedures where the entity

determines the need for a different procedure and is

prepared, upon request of any other Party, to demonstrate

such need; and

(b) make efforts to minimize differences in the qualification

procedures of its entities.

4. Nothing in paragraphs 2 and 3 shall prevent an entity from

excluding any supplier on grounds such as bankruptcy or false

declarations.

Article 1010: Invitation to Participate

1. An entity shall, in accordance with paragraphs 2, 3 and 5,

publish an invitation to participate for all procurements, except

as otherwise provided for in Article 1016 (Limited Tendering), in

the appropriate publication listed in Annex 1010.1 (Publications).

2. The invitation to participate shall take the form of a notice

of proposed procurement, which notice shall contain the following

information:

(a) a description of the nature and quantity of the goods or

services to be procured, including any options for

further procurement and, if possible

(i) an estimate of the timing when such options may be

exercised, and

(ii) in the case of recurring contracts, an estimate of

the timing of the subsequent tender notices for the

goods or services to be procured;

(b) a statement as to whether the procedure is open or

selective and whether it will involve negotiation;

(c) any date for starting delivery, or completion of

delivery, of goods or services to be procured;

(d) the address to which an application to be invited to

tender or to qualify for the suppliers' lists must be

submitted, the final date for receiving such an

application and the language or languages in which it may

be submitted;

(e) the address to which tenders must be submitted, the final

date for receiving tenders and the language or languages

in which tenders may be submitted;

(f) the address of the entity that will award the contract

and that will provide any information necessary for

obtaining specifications and other documents;

(g) a statement of any economic and technical requirements to

be met and of any financial guarantees, information and

documents required from suppliers;

(h) the amount and terms of payment of any sum payable for

the tender documentation; and

(i) a statement as to whether the entity is inviting offers

for purchase, lease or rental with or without an option

to buy, or more than one of these methods.

3. Notwithstanding paragraph 2, any entity listed in Annex 1002.2

(State and Provincial Government Entities) or Annex 1002.3

(Government Enterprises) may use, as an invitation to participate,

a notice of planned procurement, which shall contain as much of the

information referred to in paragraph 2 as is available to the

entity but which shall include, at a minimum, the following

information:

(a) a description of the subject matter of the procurement;

(b) the time limits set for the receipt of tenders or an

application to be invited to tender;

(c) the address at which requests for documents relating to

the procurement should be made;

(d) a statement that interested suppliers should express

their interest in the procurement to the entity; and

(e) the identification of a contact point within the entity

from which further information may be obtained.

4. Any entity that uses a notice of planned procurement as an

invitation to participate shall subsequently invite suppliers that

have expressed an interest in the procurement to confirm their

interest on the basis of information provided by the entity, which

information shall include at least the information referred to in

paragraph 2.

5. Notwithstanding paragraph 2, any entity listed in Annex 1002.2

(State and Provincial Government Entities) or Annex 1002.3

(Government Enterprises) may use, as an invitation to participate,

a notice regarding a qualification system. Any entity that uses

such a notice shall, subject to the considerations referred to

Article 1015 (8) (Submission, Receipt and Opening of Tenders and

Awarding of Contracts), provide in a timely manner information that

allows all suppliers that have expressed an interest in

participating in the procurement to have a meaningful opportunity

to assess their interest. The information shall normally include

the information contained in the notices referred to in paragraph

2. Information provided to one interested supplier shall be

provided in a non-discriminatory manner to all other interested

suppliers.

6. In the case of selective tendering procedures, any entity that

maintains a permanent list of qualified suppliers shall publish

annually in one of the publications listed in Annex 1010.1

(Publications) a notice containing the following information:

(a) an enumeration of any lists maintained, including their

headings, in relation to the goods or services or

categories of goods or services to be procured through

the lists;

(b) the conditions to be fulfilled by suppliers in view of

their inscription on the lists referred to in

subparagraph (a) and the methods according to which each

of those conditions will be verified by the entity

concerned; and

(c) the period of validity of the lists and the formalities

for their renewal.

7. If, after publication of an invitation to participate, but

before the time set for the opening or receipt of tenders as

specified in the notices or the tender documentation, an entity

finds that it has become necessary to amend or reissue the notice

or tender documentation, the entity shall ensure that the amended

or reissued notice or tender documentation is given the same

circulation as the original. Any significant information given by

an entity to one supplier with respect to a particular procurement

shall be given simultaneously to all other suppliers concerned and

sufficiently in advance so as to provide all suppliers concerned

adequate time to consider such information and to respond to it.

8. An entity shall indicate, in the notices referred to in this

Article or in the publication in which the notices appear, that the

procurement is covered by this Chapter.

Article 1011: Selective Tendering Procedures

1. To ensure optimum effective competition between the suppliers

of all Parties under selective tendering procedures, an entity of

a Party shall, for each procurement, invite tenders from the

maximum number of domestic suppliers and suppliers of the other

Parties, consistent with the efficient operation of the procurement

system.

2. Subject to paragraph 3, any entity that maintains a permanent

list of qualified suppliers may select suppliers to be invited to

tender for a particular procurement from among those listed. In the

process of making any selection, the entity shall provide for

equitable opportunities for suppliers on the list.

3. Subject to Article 1009 (2)(f) (Qualification of Suppliers),

an entity shall allow any supplier that requests to participate in

a particular procurement to submit a tender and shall consider the

tender. The number of additional suppliers permitted to participate

shall be limited only by the efficient operation of the procurement

system.

4. If an entity does not invite or admit a supplier to tender,

the entity shall, upon request of the supplier, promptly provide

pertinent information concerning its reasons for not doing so.

Article 1012: Time Limits for Tendering and Delivery

1. An entity of a Party shall:

(a) in prescribing any time limit, provide adequate time to

allow suppliers of the other Parties to prepare and

submit tenders before the closing of the tendering

procedures;

(b) in determining any time limit, consistent with its own

reasonable needs, take into account such factors as the

complexity of the procurement, the extent of

subcontracting anticipated, and the time normally

required for transmitting tenders by mail from foreign as

well as domestic points; and

(c) take due account of publication delays when setting the

final date for receipt of tenders or applications to be

invited to tender.

2. Subject to paragraph 3, an entity shall provide that:

(a) in open procedures, the period for the receipt of tenders

is no less than 40 days from the date of publication of

the notice referred to in Article 1010 (Invitation to

Participate);

(b) in selective procedures not involving the use of a

permanent list of qualified suppliers, the period for

submitting an application to be invited to tender is no

less than 25 days from the date of publication of the

notice referred to in Article 1010 (Invitation to

Participate), and the period for receipt of tenders is no

less than 40 days from the date of issuance of the

invitation to tender; and

(c) in selective procedures involving the use of a permanent

list of qualified suppliers, the period for receipt of

tenders is no less than 40 days from the date of the

initial issuance of invitations to tender. If the date of

initial issuance of invitations to tender does not

coincide with the date of publication of the notice

referred to in Article 1010 (Invitation to Participate),

there shall not be less than 40 days between those two

dates.

3. An entity may reduce the periods referred to in paragraph 2 in

accordance with the following:

(a) where a notice referred to Article 1010 (3) or (5)

(Invitation to Participate) has been published for a

period of no less than 40 days and no more than 12

months, the 40 day limit for receipt of tenders may be

reduced to no less than 24 days;

(b) in the case of the second or subsequent publications

dealing with recurring contracts within the meaning of

Article 1010 (2) (Invitation to Participate), the 40 day

limit for receipt of tenders may be reduced to no less

than 24 days;

(c) where a state of urgency duly substantiated by the entity

renders impracticable the periods in question, the

periods may be reduced to no less than 10 days from the

date of publication of the notice referred to in Article

1010 (Invitation to Participate); or

(d) where an entity listed in Annex 1002.2 (State and

Provincial Government Entities) or Annex 1002.3

(Government Enterprises) is using as an invitation to

participate a notice referred to in of Article 1010 (5)

(Invitation to Participate), the periods may be fixed by

mutual agreement between the entity and all selected

suppliers; but in the absence of agreement, the entity

may fix periods which shall be sufficiently long to

enable responsive bidding and shall not be less than 10

days.

4. An entity shall, in establishing any delivery date for goods

or services and consistent with its own reasonable needs, take into

account such factors as the complexity of the procurement, the

extent of subcontracting anticipated and the time realistically

required for production, destocking and transport of goods from the

points of supply.

Article 1013: Tender Documentation

1. Where an entity provides tender documentation to suppliers,

the documentation shall contain all information necessary to permit

suppliers to submit responsive tenders, including information

required to be published in the notice of procurement, except for

Article 1010 (2)(h) (Invitation to Participate). It must also

include the following information:

(a) the address of the entity to which tenders should be

sent;

(b) the address where requests for supplementary information

should be sent;

(c) the language or languages in which tenders and tendering

documents may be submitted;

(d) the closing date and time for receipt of tenders and the

length of time during which any tender should be open for

acceptance;

(e) the persons authorized to be present at the opening of

tenders and the date, time and place of the opening;

(f) a statement of any economic and technical requirement to

be met and of any financial guarantee, information and

documents required from suppliers;

(g) a complete description of the goods or services required

and any requirements to be fulfilled, including technical

specifications, conformity certification and necessary

plans, drawings and instructional materials;

(h) the criteria for awarding the contract, including any

factors other than price that are to be considered in the

evaluation of tenders and the cost elements to be

included in evaluating tender prices, such as transport,

insurance and inspection costs, and in the case of goods

or services of any other Party, customs duties and other

import charges, taxes and currency of payment;

(i) the terms of payment; and

(j) any other terms or conditions.

2. An entity shall:

(a) forward tender documentation at the request of any

supplier that is participating in open procedures or has

requested to participate in selective procedures, and

reply promptly to any reasonable request for explanations

relating thereto; and

(b) reply promptly to any reasonable request for relevant

information made by a supplier participating in the

tendering procedure, on condition that such information

does not give that supplier an advantage over its

competitors in the procedure for the award of the

contract.

Article 1014: Negotiation Disciplines

1. An entity may conduct negotiations:

(a) in the context of procurements in which the entity has,

in the notice referred to in Article 1010 (Invitation to

Participate), indicated its intent to negotiate; or

(b) when it appears from the evaluation of the tenders that

no one tender is obviously the most advantageous in terms

of the specific evaluation criteria set forth in the

notices or tender documentation.

2. Negotiations shall be used primarily to identify the strengths

and weaknesses in the tenders.

3. An entity shall treat all tenders in confidence. In

particular, an entity may not provide to any person information

intended to assist any supplier to bring its tender up to the level

of any other tender.

4. An entity may not, in the course of negotiations, discriminate

between different suppliers. In particular, an entity shall:

(a) carry out any elimination of suppliers in accordance with

the criteria set forth in the notices and tender

documentation;

(b) provide in writing all modifications to the criteria or

to the technical requirements to all suppliers remaining

in the negotiations;

(c) permit all remaining suppliers to submit new or amended

tenders on the basis of the revised criteria or

requirements; and

(d) when negotiations are concluded, permit all remaining

suppliers to submit final tenders in accordance with a

common deadline.

Article 1015: Submission, Receipt and Opening of Tenders and

Awarding of Contracts

1. An entity shall use procedures for the submission, receipt and

opening of tenders and the awarding of contracts that are

consistent with the following:

(a) tenders shall normally be submitted in writing directly

or by mail;

(b) if tenders by telex, telegram, telecopy or other means of

electronic transmission are permitted, the tender made

thereby must include all the information necessary for

the evaluation of the tender, in particular the

definitive price proposed by the supplier and a statement

that the supplier agrees to all the terms, conditions and

provisions of the invitation to tender;

(c) a tender made by telex, telegram, telecopy or other means

of electronic transmission must be confirmed promptly by

letter or by the dispatch of a signed copy of the telex,

telegram, telecopy or electronic message;

(d) the content of the telex, telegram, telecopy or

electronic message shall prevail where there is a

difference or conflict between that content and the

content of any documentation received after the time

limit for submission of tenders;

(e) tenders presented by telephone shall not be permitted;

(f) requests to participate in selective tendering procedures

may be submitted by telex, telegram or telecopy and if

permitted, may be submitted by other means of electronic

transmission; and

(g) the opportunities that may be given to suppliers to

correct unintentional errors of form between the opening

of tenders and the awarding of the contract shall not be

permitted to give rise to any discriminatory practice.

In this paragraph, "means of electronic transmission" consists of

means capable of producing for the recipient at the destination of

the transmission a printed copy of the tender.

2. An entity may not penalize a supplier whose tender is received

in the office designated in the tender documentation after the time

specified for receiving tenders if the delay is due solely to

mishandling on the part of the entity. An entity may also consider,

in exceptional circumstances, tenders received after the time

specified for receiving tenders if the entity's procedures so

provide.

3. All tenders solicited by an entity under open or selective

procedures shall be received and opened under procedures and

conditions guaranteeing the regularity of the openings. The entity

shall retain the information on the opening of tenders and the

information shall remain at the disposal of the competent

authorities of the respective Party so that it may be used if

required under the procedures of Article 1017 (Bid Challenge),

Article 1019 (Provision of Information) or Chapter Twenty

(Institutional Arrangements and Dispute Settlement Procedures).

4. An entity shall award contracts in accordance with the

following:

(a) to be considered for award, a tender must, at the time of

opening, conform to the essential requirements of the

notices or tender documentation and have been submitted

by a supplier that complies with the conditions for

participation;

(b) if the entity has received a tender that is abnormally

lower in price than other tenders submitted, the entity

may enquire of the supplier to ensure that it can comply

with the conditions of participation and is or will be

capable of fulfilling the terms of the contract;

(c) unless the entity decides in the public interest not to

award the contract, the entity shall make the award to

the supplier that has been determined to be fully capable

of undertaking the contract and whose tender is either

the lowest tender or the tender that in terms of the

specific evaluation criteria set forth in the notices or

tender documentation is determined to be the most

advantageous;

(d) awards shall be made in accordance with the criteria and

essential requirements specified in the tender

documentation; and

(e) option clauses shall not be used in a manner that

circumvents the provisions of this Chapter.

5. No entity of a Party shall make it a condition of the awarding

of a contract that the supplier has previously been awarded one or

more contracts by an entity of that Party, or that the supplier has

prior work experience within the territory of that Party.

6. An entity shall:

(a) upon request, promptly inform suppliers participating in

tendering procedures of decisions on contract awards and,

if so requested, inform them in writing; and

(b) upon request of a supplier whose tender was not selected

for award, provide pertinent information to that supplier

concerning the reasons for not selecting its tender and

the characteristics and relevant advantages of the tender

selected, as well as the name of the winning supplier.

7. An entity shall publish a notice in the appropriate

publication listed in Annex 1010.1 (Publications) no later than 72

days after the award of a contract, which notice shall contain the

following information:

(a) a description of the nature and quantity of goods or

services included in the contract;

(b) the name and address of the entity awarding the contract;

(c) the date of the award;

(d) the name and address of each winning supplier;

(e) the value of the contract, or the highest and lowest

tenders considered in the process of awarding the

contract; and

(f) the tendering procedure used.

8. Notwithstanding any other provision of this Article, an entity

may withhold certain information on the award of a contract, where

disclosure of such information would impede law enforcement or

otherwise be contrary to the public interest or would prejudice the

legitimate commercial interest of a particular person, or might

prejudice fair competition between suppliers.

Article 1016: Limited Tendering

1. An entity of a Party may, in the circumstances and subject to

the conditions specified in paragraph 2, deviate from the

provisions of Articles 1008 (Tendering Procedures) through 1015

(Submission, Receipt and Opening of Tenders and Awarding of

Contracts), provided that such limited tendering is not used with

a view to avoiding maximum possible competition or in a manner that

would constitute a means of discrimination between suppliers of the

other Parties or protection of domestic suppliers.

2. An entity may use limited tendering in the following

circumstances and subject to the following conditions, as

applicable:

(a) in the absence of tenders in response to an open or

selective tender, or when the tenders submitted either

have resulted from collusion or do not conform to the

essential requirements of the tender documentation, or

when the tenders submitted come from suppliers who do not

comply with the conditions for participation provided for

in accordance with this Chapter, on condition that the

requirements of the initial procurement are not

substantially modified in the contract as awarded;

(b) when, for works of art or for reasons connected with the

protection of patents, copyrights or other exclusive

rights, proprietary information, confidential consulting

services or, when there is an absence of competition for

technical reasons, the goods or services can be supplied

only by a particular supplier and no reasonable

alternative or substitute exists;

(c) in so far as is strictly necessary when, for reasons of

extreme urgency brought about by events unforeseeable by

the entity, the goods or services could not be obtained

in time by means of open or selective tendering

procedures;

(d) for additional deliveries by the original supplier that

are intended either as replacement parts or continuing

services for existing supplies, services or

installations, or as the extension of existing supplies,

services or installations, when a change of supplier

would compel the entity to procure equipment or services

not meeting requirements of interchangeability with

already existing equipment or services, including

software to the extent that the initial procurement of

the software was covered by this Chapter;

(e) when an entity procures a prototype or a first good or

service that is developed at its request in the course

of, and for, a particular contract for research,

experiment, study or original development. When such

contracts have been fulfilled, subsequent procurements of

goods or services shall be subject to Articles 1008

(Tendering Procedures) through 1015 (Submission, Receipt

and Opening of Tenders and Awarding of Contracts).

Original development of a first good may include limited

production in order to incorporate the results of field

testing and to demonstrate that the good is suitable for

production in quantity to acceptable quality standards.

It does not extend to quantity production to establish

commercial viability or to recover research and

development costs;

(f) for goods purchased on a commodity market;

(g) for purchases made under exceptionally advantageous

conditions that only arise in the very short term. This

provision is intended to cover unusual disposals by firms

which are not normally suppliers; or disposal of assets

of businesses in liquidation or receivership. It is not

intended to cover routine purchases from regular

suppliers; and

(h) for a contract awarded to the winner of an architectural

design contest, on condition that the contest

(i) has been organized in a manner that is consistent

with the principles of this Chapter, notably as

regards the publication, in the sense of Article

1010 (Invitation to Participate), of an invitation

to suitably qualified suppliers to participate in

the contest,

(ii) has been organized with a view to awarding the

design contract to the winner, and

(iii) is to be judged by an independent jury.

3. An entity shall prepare a report in writing on each contract

awarded by it under the provisions of paragraph 2. Each report

shall contain the name of the procuring entity, indicate the value

and kind of goods or services procured, the name of the country of

origin, and a statement indicating the circumstances and conditions

described in paragraph 2 that justified the use of limited

tendering. Each report shall remain with the entity concerned at

the disposal of the competent authorities of the respective Party,

so that it may be used if required under the procedures of Article

1017 (Bid Challenge), Article 1019 (Provision of Information) or

Chapter 20 (Institutional Arrangements and Dispute Settlement Procedures).

Article 1017: Bid Challenge

1. In order to promote fair, open and impartial procurement

procedures, each Party shall adopt and maintain bid challenge

procedures for procurements covered by this Chapter in accordance

with the following:

(a) each Party shall allow suppliers of any good or service

of another Party to submit bid challenges concerning any

aspect of the procurement process, which for purposes of

this Article begins after an entity has decided on its

procurement requirement, leading up to and including the

contract award;

(b) a Party may encourage a supplier to seek a resolution of

any complaint with the entity concerned prior to

initiating a bid challenge;

(c) each Party shall ensure that its entities accord fair and

timely consideration to any complaint regarding

procurement covered by this Chapter;

(d) whether or not a supplier has attempted to resolve its

complaint with the entity, or upon an unsuccessful

attempt at such a resolution, no Party shall prevent the

supplier from initiating a bid challenge or seeking any

other relief available to such supplier;

(e) a Party may require a supplier to notify the entity upon

initiation of a bid challenge;

(f) a Party may limit the period within which a supplier may

initiate a bid challenge, but in no case shall the period

be less than 10 working days from the time when the basis

of the complaint became known, or reasonably should have

become known, to the supplier;

(g) each Party shall establish or designate a reviewing

authority with no substantial interest in the outcome of

procurements to receive bid challenges and make findings

and recommendations concerning them;

(h) upon receipt of a bid challenge, the reviewing authority

shall expeditiously investigate the challenge, and may be

required to limit its considerations to the challenge

itself;

(i) in investigating the challenge, the reviewing authority

may delay the awarding of the proposed contract pending

resolution of the challenge, except in cases of urgency

or where such a delay would be contrary to the public

interest;

(j) the reviewing authority shall issue a recommendation to

resolve the challenge, which may include directing the

entity to reevaluate offers, terminate or re-compete the

contract in question;

(k) entities normally shall follow the recommendations of the

reviewing authority;

(l) each Party should authorize its reviewing authority,

following the conclusion of a bid challenge, to make

additional recommendations in writing to an entity

respecting any facet of the entity's procurement process

that is identified as problematic during the

investigation of the challenge, including recommendations

for changes in the procurement procedures of the entity

to bring them into conformity with the obligations of

this Chapter;

(m) the reviewing authority shall provide its findings and

recommendations respecting bid challenges in writing and

in a timely manner, and shall make them available to the

Parties and all interested persons;

(n) each Party shall specify in writing and shall make

generally available all its bid challenge procedures; and

(o) each Party shall ensure that each of its entities

maintains complete documentation concerning each of its

procurements, including a written record of all

communications substantially affecting each procurement,

for at least three years from the date the contract was

awarded, to allow verification that the procurement

process was carried out in accordance with the

obligations of this Chapter.

2. A Party may require that a bid challenge be initiated only

after the notice of procurement has been published or, where a

notice is not published, after tender documentation has been made

available. If a Party imposes such a requirement, the 10 working

day period described in paragraph 1(f) shall begin not earlier than

the date that the notice is published or the tender documentation

is made available.

Article 1018: Exceptions

1. Notwithstanding Article 2102 (National Security), for purposes

of this Chapter nothing shall be construed to prevent a Party from

taking any action or not disclosing any information which it

considers necessary for the protection of its essential security

interests relating to the procurement of arms, ammunition or war

materials, or to procurement indispensable for national security or

for national defense purposes.

2. Provided that such measures are not applied in a manner that

would constitute a means of arbitrary or unjustifiable

discrimination between Parties where the same conditions prevail or

a disguised restriction on trade between the Parties, nothing in

this Chapter shall be construed to prevent any Party from adopting

or maintaining measures:

(a) necessary to protect public morals, order or safety;

(b) necessary to protect human, animal or plant life or

health;

(c) necessary to protect intellectual property; or

(d) relating to goods or services of handicapped persons, of

philanthropic institutions or of prison labor.

Article 1019: Provision of Information

1. Each Party shall promptly publish any law, regulation,

precedential judicial decision, administrative ruling of general

application and any procedure, including standard contract clauses,

regarding government procurement covered by this Chapter in the

appropriate publications listed in Annex 1010.1 (Publications).

2. Each Party shall:

(a) be prepared, upon request, to explain to any other Party

its government procurement procedures; and

(b) ensure that its entities, upon request from a supplier,

promptly explain their procurement practices and

procedures.

3. A Party may seek such additional information on the award of

the contract as may be necessary to determine whether the

procurement was made fairly and impartially, in particular with

respect to unsuccessful tenders and further to Article 1015(6)

(Submission, Receipt and Opening of Tenders and Awarding

Contracts). To this end, the Party of the procuring entity shall

provide information on both the characteristics and relative

advantages of the winning tender and the contract price. In cases

where release of this information would prejudice competition in

future tenders, the information shall not be released except after

consultation with and agreement of the Party which gave the

information to the requesting Party.

4. Each Party shall provide, upon request, to any other Party,

information available to that Party and its entities concerning

covered procurement of its entities and the individual contracts

awarded by its entities.

5. No Party shall disclose confidential information the

disclosure of which would prejudice the legitimate commercial

interests of a particular person or might prejudice fair

competition between suppliers, without the formal authorization of

the person that provided the information to that Party.

6. Nothing in this Chapter shall be construed as requiring any

Party to disclose confidential information the disclosure of which

would impede law enforcement or otherwise be contrary to the public

interest.

7. With a view to ensuring effective monitoring of procurement

covered by this Chapter, each Party shall collect statistics and

provide to the other Parties each year an annual report in

accordance with the following reporting requirements, unless the

Parties unanimously agree to modify such requirements:

(a) statistics on the estimated value of all contracts

awarded, both above and below the applicable threshold

values, broken down by entities;

(b) statistics on the number and total value of contracts

covered by this Chapter above the applicable threshold

values, broken down by entities, categories of goods or

services according to uniform classification systems to

be determined by the Parties, and country of origin of

the contract;

(c) statistics, broken down by entities, and by categories of

goods or services, on the number and total value of

contracts awarded under each use of the procedures

described in Article 1016 (Limited Tendering), and

country of origin of the contract; and

(d) statistics, broken down by entities, on the number and

total value of contracts awarded under derogations to the

Chapter listed in the appropriate annexes.

8. With respect to the reports described in paragraph 7 that

pertain to entities listed in Annex 1002.2 (State and Provincial

Government Entities), each Party may organize such reports by state

or province.

9. Each Party shall give favorable consideration, where

appropriate, to a request from any other Party for the exchange of

additional information on a reciprocal basis.

10. The Parties shall undertake and complete by the date of entry

into force of this Agreement further technical work to make

available the complete goods and services classification list to be

used by their entities in procuring goods and services under this

Chapter and develop concordances between each of these systems,

and, if necessary, the agreed uniform system.

Article 1020: Technical Cooperation

1. The Parties shall cooperate, on mutually agreed terms, to

increase understanding of their respective government procurement

systems, with a view to maximizing access to government procurement

opportunities for the suppliers of all Parties.

2. Each Party shall provide to the other Parties and to the

suppliers of such Parties, on a cost recovery basis, information

concerning training and orientation programs regarding its

government procurement system, and access on a non-discriminatory

basis to such programs as it conducts.

3. The training and orientation programs referred to in paragraph

2 include:

(a) training of personnel directly involved in government

procurement procedures;

(b) training of suppliers interested in pursuing government

procurement opportunities;

(c) explanation and description of specific elements of each

Party's government procurement system, such as the bid

challenge mechanism; and

(d) information about government procurement market

opportunities.

4. Each Party shall establish at least one contact point to

provide the information regarding the training and orientation

programs pertaining to its government procurement system.

Article 1021: Joint Programs for Small Business

1. The Parties shall establish, within 12 months after the date

of entry into force of this Agreement, the Committee on Small

Business comprising representatives of the Parties. The Committee

shall meet as mutually agreed, but no less than once a year, and

shall report annually to the Commission on the efforts of the

Parties to promote government procurement opportunities for their

small businesses.

2. The Committee shall work to facilitate the following

activities of the Parties:

(a) identification of available opportunities for the

training of small business personnel in their government

procurement procedures;

(b) identification of small businesses interested in becoming

trading partners of small businesses in the territory of

any other Party;

(c) development of data bases of small businesses in the

territory of each Party for use by entities of any other

Party wishing to procure from small businesses;

(d) consultations regarding the factors that each Party uses

in establishing its criteria for eligibility for small

business programs, if any; and

(e) actions to address any related matter.

Article 1022: Rectifications or Modifications

1. A Party may make modifications to its coverage under this

Chapter only in exceptional circumstances.

2. Where a Party makes modifications to its coverage under this

Chapter, the Party shall:

(a) notify the other Parties and its Section of the

Secretariat of the modification;

(b) reflect the change in its schedule of the appropriate

Annex; and

(c) propose to the other Parties appropriate compensatory

adjustments to its coverage in order to maintain a

comparable level of coverage as existed prior to the

modification.

The other Parties shall consider whether any proposed adjustment

made pursuant to subparagraph (c) is adequate to maintain a

comparable level of the mutually agreed coverage under this

Chapter. Where any Party does not agree that the proposed

adjustment is sufficient, it may have recourse to dispute

settlement procedures under Chapter Twenty (Institutional

Arrangements and Dispute Settlement Procedures).

3. Notwithstanding paragraphs 1 and 2, a Party may make

rectifications of a purely formal nature and minor amendments to

its Annexes 1002.1 through 1002.7, provided that it notifies such

rectifications to the other Parties and its Section of the

Secretariat, and any other Party does not object to such proposed

rectification within 30 days. In such cases, subparagraph 2(c)

shall not apply. If a Party does object that the proposed

rectification would result in a substantive change in the balance

of coverage under this Chapter, it may have recourse to dispute

settlement procedures under Chapter Twenty (Institutional

Arrangements and Dispute Settlement Procedures).

4. Notwithstanding any other provision of this Chapter, a Party

may undertake legitimate reorganizations of its government

procurement entities covered by this Chapter, including programs

through which the procurement of such entities is decentralized or

the corresponding government functions cease to be performed by any

government entity, whether or not subject to this Chapter. In such

cases, subparagraph 2(c) shall not apply. No Party shall undertake

such reorganizations or programs to avoid the obligations of this

Chapter. If a Party objects to the withdrawal on the grounds that

the functions continue to be performed by a government entity, that

Party may have recourse to dispute settlement procedures under

Chapter Twenty (Institutional Arrangements and Dispute Settlement

Procedures).

Article 1023: Divestiture of Entities

1. Nothing in this Chapter shall be construed to prevent a Party

from divesting an entity subject to the obligations of this

Chapter.

2. If, upon the public offering of shares of an entity listed in

Annex 1002.3 (Government Enterprises), or through other methods,

such entity is no longer subject to federal government control, the

respective Party may delete the entity from Annex 1002.3

(Government Enterprises), and withdraw the entity from the

obligations of the Chapter, upon notification to the other Parties.

3. If a Party objects to the withdrawal on the grounds that the

entity remains subject to federal government control, that Party

may have recourse to dispute settlement procedures under Chapter

Twenty (Institutional Arrangements and Dispute Settlement Procedures).

Article 1024: Further Negotiations

1. The Parties shall commence further negotiations no later than

December 31, 1998, with a view towards the substantial

liberalization of their respective procurement markets. The Parties

recognize that such liberalization would ensure more competitive

opportunities for all suppliers of the Parties in their respective

procurement markets.

2. The Parties will review all features of government procurement

practices for the purposes of:

(a) assessing the workings of the procurement system;

(b) seeking to expand the coverage of this Chapter;

(c) including within the obligations of this Chapter

(i) government enterprises, and

(ii) legislated and administrative exceptions; and

(d) reviewing thresholds.

3. Prior to the review specified in paragraph 2, the Parties will

endeavor to consult with their state and provincial governments

with a view to obtaining commitments, on a voluntary and reciprocal

basis, to include within the obligations of this Chapter

procurement by state and provincial government entities and

enterprises.

4. If the negotiations pursuant to Article 96B of the GATT

Agreement on Government Procurement (the Code) are completed prior

to the new review specified in paragraph 2, the Parties shall:

(a) immediately begin consultations with their state and

provincial governments with a view to obtaining

commitments, on a voluntary and reciprocal basis, to

include within the obligations of this Chapter

procurement by state and provincial government entities

and enterprises; and

(b) increase the obligations and coverage of this Chapter to

a level at least commensurate with that of the Code.

5. The Parties shall undertake further negotiations no later than

December 31, 1998, on the subject of electronic transmission of

tender information with a view to exploring the feasibility of

amending this Chapter to permit electronic transmission as an

additional or alternate means of publication.

Article 1025: Definitions

For purposes of this Chapter:

construction services contract means a contract which has as its

objective the realization by whatever means of civil or building

works, as specified in the Appendix of Annex 1002.5 (Construction

Services);

entity means an entity listed in Annexes 1002.1 (Federal Government

Entities), Annex 1002.2 (State and Provincial Government Entities)

or Annex 1002.3 (Government Enterprises) to this Chapter;

offsets means conditions imposed or considered by an entity prior

to or in the course of its procurement process that encourage local

development or improve its Party's balance of payments accounts,

and can involve requirements of local content, licensing of

technology, investment, counter-trade or similar requirements.

services includes construction services contracts, unless otherwise

specified;

supplier means a person that has provided or could provide goods or

services in response to an entity's call for tender; and

tendering procedures means:

(a) open tendering procedures, being those procedures under

which all interested suppliers may submit a tender;

(b) selective tendering procedures, being those procedures

under which, consistent with Article 1011 (3) (Selective

Tendering Procedures), those suppliers invited to do so

by an entity may submit a tender; and

(c) limited tendering procedures, being those procedures

where an entity contacts suppliers individually, only in

the circumstances and under the conditions specified in

Article 1016 (Limited Tendering).

ANNEX 1002.1

Federal Government Entities

Schedule of Canada

1. Department of Agriculture

2. Department of Communications

3. Department of Consumer and Corporate Affairs

4. Department of Employment and Immigration

5. Immigration and Refugee Board

6. Canada Employment and Immigration Commission

7. Department of Energy, Mines and Resources

8. Atomic Energy Control Board

9. National Energy Board

10. Department of the Environment

11. Department of External Affairs

12. Canadian International Development Agency (on its own account)

13. Department of Finance

14. Office of the Superintendent of Financial Institutions

15. Canadian International Trade Tribunal

16. Municipal Development and Loan Board

17. Department of Fisheries and Oceans

18. Department of Forestry

19. Department of Indian Affairs and Northern Development

20. Department of Industry, Science and Technology

21. Science Council of Canada

22. National Research Council of Canada

23. Natural Sciences and Engineering Research Council of Canada

24. Department of Justice

25. Canadian Human Rights Commission

26. Statute Revision Commission

27. Supreme Court of Canada

28. Department of Labour

29. Canada Labour Relations Board

30. Department of National Health and Welfare

31. Medical Research Council

32. Department of National Revenue

33. Department of Public Works

34. Department of Secretary of State of Canada

35. Social Sciences and Humanities Research Council

36. Office of the Co-ordinator, Status of Women

37. Public Service Commission

38. Department of the Solicitor General

39. Correctional Service of Canada

40. National Parole Board

41. Department of Supply and Services (on its own account)

42. Canadian General Standards Board

43. Department of Transport (Pursuant to Article 1018 the national

security considerations applicable to the Department of

National Defence are equally applicable to the Canadian Coast

Guard.)

44. Secretariat and the Office of the Controller General

45. Department of Veterans Affairs

46. Veterans Land Administration

47. Department of Western Economic Diversification

48. Atlantic Canada Opportunities Agency

49. Auditor General of Canada

50. Federal Office of Regional Development (Quebec)

51. Canadian Centre for Management Development

52. Canadian Radio-television and Telecommunications Commission

53. Canadian Sentencing Commission

54. Civil Aviation Tribunal

55. Commission of Inquiry into the Air Ontario Crash at Dryden,

Ontario

56. Commission of Inquiry into the Use of Drugs and Banned

Practices Intended to Increase Athletic Performance

57. Commissioner for Federal Judicial Affairs

58. Competition Tribunal Registry

59. Copyright Board

60. Emergency Preparedness Canada

61. Federal Court of Canada

62. Grain Transportation Agency

63. Hazardous Materials Information Review Commission

64. Information and Privacy Commissioners

65. Investment Canada

66. Multiculturalism and Citizenship

67. The National Archives of Canada

68. National Farm Products Marketing Council

69. The National Library

70. National Transportation Agency

71. Northern Pipeline Agency

72. Patented Medicine Prices Review Board

73. Petroleum Monitoring Agency

74. Privy Council Office

75. Canadian Intergovernmental Conference Secretariat

76. Commissioner of Official Languages

77. Economic Council of Canada

78. Public Service Staff Relations Office

79. Office of the Secretary to the Governor General

80. Office of the Chief Electoral Officer

81. Federal Provincial Relations Office

82. Procurement Review Board

83. Royal Commission on Electoral Reform and Party Financing

84. Royal Commission on National Passenger Transportation

85. Royal Commission on New Reproductive Technologies

86. Royal Commission on the Future of the Toronto Waterfront

87. Statistics Canada

88. Tax Court of Canada, Registry of the

89. Agricultural Stabilization Board

90. Canadian Aviation Safety Board

91. Canadian Centre for Occupational Health and Safety

92. Canadian Transportation Accident Investigation and Safety

Board

93. Director of Soldier Settlement

94. Director, The Veterans' Land Act

95. Fisheries Prices Support Board

96. National Battlefields Commission

97. Royal Canadian Mounted Police

98. Royal Canadian Mounted Police External Review Committee

99. Royal Canadian Mounted Police Public Complaints Commission

100. Department of National Defence

The following goods purchased by the Department of National

Defence and the Royal Canadian Mounted Police are included in

the coverage of this Chapter, subject to the provisions of

Article 1018(1) (Exceptions).

(Numbers refer to the Federal Supply Classification code)

22. Railway equipment

23. Motor vehicles, trailers and cycles (except buses in

2310, military trucks and trailers in 2320 and 2330 and

tracked combat, assault and tactical vehicles in 2350)

24. Tractors

25. Vehicular equipment components

26. Tires and tubes

29. Engine accessories

30. Mechanical power transmission equipment

32. Woodworking machinery and equipment

34. Metal working equipment

35. Service and trade equipment

36. Special industry machinery

37. Agricultural machinery and equipment

38. Construction, mining, excavating and highway maintenance

equipment

39. Materials handling equipment

40. Rope, cable, chain and fittings

41. Refrigeration and air conditioning equipment

42. Fire fighting, rescue and safety equipment (except 4220

Marine Life-saving and diving equipment, 4230

Decontaminating and impregnating equipment)

43. Pumps and compressors

44. Furnace, steam plant, drying equipment and nuclear

reactors

45. Plumbing, heating and sanitation equipment

46. Water purification and sewage treatment equipment

47. Pipe, tubing, hose and fittings

48. Valves

49. Maintenance and repair shop equipment

52. Measuring tools

53. Hardware and abrasives

54. Prefabricated structures and scaffolding

55. Lumber, millwork, plywood and veneer

56. Construction and building materials

61. Electric wire and power and distribution equipment

62. Lighting fixtures and lamps

63. Alarm and signal systems

65. Medical, dental and veterinary equipment and supplies

66. Instruments and laboratory equipment (except 6615:

Automatic pilot mechanisms and airborne Gyro components

6665: Hazard-detecting instruments and apparatus)

67. Photographic equipment

68. Chemicals and chemical products

69. Training aids and devices

70. General purpose automatic data processing equipment,

software, supplies and support equipment (except 7010

ADPE configurations)

71. Furniture

72. Household and commercial furnishings and appliances

73. Food preparation and serving equipment

74. Office machines, text processing system and visible

record equipment

75. Office supplies and devices

76. Books, maps and other publications (except 7650 drawings

and specifications)

77. Musical instruments, phonographs and home-type radios

78. Recreational and athletic equipment

79. Cleaning equipment and supplies

80. Brushes, paints, sealers and adhesives

81. Containers, packaging and packing supplies

85. Toiletries

87. Agricultural supplies

88. Live animals

91. Fuels, lubricants, oils and waxes

93. Non-metallic fabricated materials

94. Non-metallic crude materials

96. Ores, minerals and their primary products

99. Miscellaneous

Notes:

1. Notwithstanding anything in this Annex, this Chapter does not

apply to procurements in respect of:

(a) the Departments of Transport Canada, Communications

Canada and Fisheries and Oceans respecting FSCs 70

(automatic data processing equipment, software supplies

and support equipment), 74 (office machines, text

processing systems and visible record equipment) and 36

(special industry machinery); and

(b) agricultural products made in furtherance of agricultural

support programs or human feeding programs.

2. The General Notes for Canada as set out in Annex 1002.7 apply

to this Annex.

=============================================================================

ANNEX 1002.1

Schedule of Mexico

1. Secretaría de Gobernación

- Centro Nacional de Estudios Municipales

- Comisión Calificadora de Publicaciones y Revistas

Ilustradas

- Consejo Nacional de Población

- Archivo General de la Nación

- Instituto Nacional de Estudios Históricos de la

Revolución Mexicana

- Patronato de Asistencia para la Reincorporación Social

- Centro Nacional de Prevención de Desastres

- Consejo Nacional de Radio y Televisión

- Comisión Mexicana de Ayuda a Refugiados

2. Secretaría de Relaciones Exteriores

- Sección Mexicana de la Comisión Intercional de Límites y

Aguas México-EEUU

- Sección Mexicana de la Comisión Internacional de Límites

y Aguas México-Guatemala

3. Secretaría de Hacienda y Crédito Público

- Comisión Nacional Bancaria

- Comisión Nacional de Valores

- Comisión Nacional de Seguros y Fianzas

- Instituto Nacional de Estadistica , Geografía e

Inform tica

4. Secretaría de Agricultura y Recursos Hidraulicos

- Instituto Mexicano de Tecnología del Agua

- Instituto Nacional de Investigaciones Forestales y

Agropecuarias

- Apoyos a Servicios a la Comercialización Agropecuaria,

Aserca

5. Secretaría de Comunicaciones y Transportes (including the

Instituto Mexicano de Comunicaciones and the Instituto

Mexicano de Transporte)

- Comisión Nacional Coordinadora de Puertos

6. Secretaría de Comercio y Fomento Industrial

7. Secretaría de Educación Pública

- Instituto Nacional de Antropología e Historia

- Instituto Nacional de Bellas Artes y Literatura

- Radio Educación

- Centro de Ingeniería y Desarrollo Industrial

- Consejo Nacional para la Cultura y las Artes

- Comisión Nacional del Deporte

8. Secretaría de Salud

- Administración del Patrimonio de la Beneficencia Pública

- Centro Nacional de la Transfusión Sanguinea

- Gerencia General de Farmacias

- Gerencia General de Biológicos y Reactivos

- Consejo Interno del Centro de Obras y Equipamiento en

Salud

- Instituto de la Comunicación Humana Dr. Andrés Bustamante

Gurría

- Instituto Nacional de Medicina de la Rehabilitación

- Instituto Nacional de Ortopedia

- Consejo Nacional para la Prevención y Control del

Síndrome de la Inmunodeficiencia Adquirida, Conasida

9. Secretaría del Trabajo y Previsión Social

- Procuraduría Federal de la Defensa del Trabajo

- Unidad Coordinadora del Empleo, Capacitación y

Adiestramiento

10. Secretaría de la Reforma Agraria

- Instituto de Capacitación Agraria

11. Secretaría de Pesca

- Instituto Nacional de la Pesca

12. Procuraduría General de la República

13. Secretaría de Energia Minas e Industria Paraestatal

- Comisión Nacional de Seguridad Nuclear y Salvaguardias

- Centro de Promoción y Evaluación de Proyectos

- Centro Nacional de Ahorro Energético

14. Secretaría de Desarrollo Social

15. Secretaría de Turismo

16. Secretaría de la Contraloría General de La Federación

17. Comisión Nacional de Zonas Aridas

18. Comisión Nacional de Libros de Texto Gratuito

19. Comisión Nacional de Derechos Humanos

20. Consejo Nacional de Fomento Educativo

21. Secretaría de la Defensa Nacional

22. Secretaría de Marina

The following products purchased by the Secretaría de la

Defensa Nacional and the Secretaría de Marina are included in

the coverage of this Chapter, subject to the application of

paragraph 1 in Article 1018(1) (Exceptions).

(Numbers refer to the Federal Supply Classification Code, FSC)

22. Railway equipment

23. Motor vehicles, trailers and cycles (except buses in

2310, military trucks and trailers in 2320 and 2330 and

tracked combat, assault and tactical vehicles in 2350)

24. Tractors

25. Vehicular equipment components

26. Tires and tubes

29. Engine accessories

30. Mechanical power transmission equipment

32. Woodworking machinery and equipment

34. Metal working machinery

35. Service and trade equipment

36. Special industry machinery

37. Agricultural machinery and equipment

38. Construction, mining, excavating and highway maintenance

equipment

39. Materials handling equipment

40. Rope, cable, chain and fittings

41. Refrigeration and air conditioning equipment

42. Fire fighting, rescue and safety equipment

43. Pumps and compressors

44. Furnace, steam plant, drying equipment and nuclear

reactors

45. Plumbing, heating and sanitation equipment

46. Water purification and sewage treatment equipment

47. Pipe, tubing, hose and fittings

48. Valves

49. Maintenance and repair shop equipment

52. Measuring tools

53. Hardware and abrasives

54. Prefabricated structures and scaffolding

55. Lumber, millwork, plywood and veneer

56. Construction and building materials

61. Electric wire and power and distribution equipment

62. Lighting fixtures and lamps

63. Alarm and signal systems

65. Medical, Dental, and Veterinary Equipment and Supplies

66. Instruments and laboratory equipment

67. Photographic equipment

68. Chemicals and chemical products

69. Training aids and devices

70. General purpose ADPE, software, supplies and support

equipment

71. Furniture

72. Household and commercial furnishings and appliances

73. Food preparation and serving equipment

74. Office machines, text processing system and visible

record equipment

75. Office supplies and devices

76. Books, maps and other publications (except 7650: Drawings

and specifications)

77. Musical instruments, phonographs and home-type radios

78. Recreational and athletic equipment

79. Cleaning equipment and supplies

80. Brushes, paints, sealers and adhesives

81. Containers, packaging and packing supplies

85. Toiletries

87. Agricultural supplies

88. Live animals

93. Non-metallic fabricated materials

94. Non-metallic crude materials

96. Ores, minerals and their primary products (except 9620:

minerals, natural and synthetic)

99. Miscellaneous

Notes:

1. National security exceptions include procurements made in

support of safeguarding nuclear materials or technology.

2. The General Notes for Mexico as set out in Annex 1002.7 apply

to this Annex.

=============================================================================

ANNEX 1002.1

Schedule of the United States

1. Department of Agriculture (This Chapter does not apply to

procurement of agricultural products made in furtherance of

agricultural support programs or human feeding programs.)

Federal buy national requirements imposed as conditions of

funding by the Rural Electrification Administration will not

apply to products and services of Mexico and Canada.

2. Department of Commerce

3. Department of Education

4. Department of Health and Human Services

5. Department of Housing and Urban Development

6. Department of the Interior, including the Bureau of

Reclamation (For suppliers of goods and services of Canada,

the obligations of this Chapter will apply to procurements by

the Bureau of Reclamation of the Department of Interior only

at such time as the obligations of this Chapter take effect

for procurements by Canadian Provincial Hydro utilities.)

7. Department of Justice

8. Department of Labor

9. Department of State

10. United States Agency for International Development

11. Department of the Treasury

12. Department of Transportation (Pursuant to Article 1018, the

national security considerations applicable to the Department

of Defense are equally applicable to the Coast Guard, a

military unit of the United States.)

13. Department of Energy (This Chapter does not apply, pursuant to

Article 1018, to national security procurements made in

support of safeguarding nuclear materials or technology and

entered into under the authority of the Atomic Energy Act; and

to oil purchases related to the Strategic Petroleum Reserve.)

14. General Services Administration (except Federal Supply Groups

51 and 52 and Federal Supply Class 7340)

15. National Aeronautics and Space Administration

16. The Department of Veterans Affairs

17. Environmental Protection Agency

18. United States Information Agency

19. National Science Foundation

20. Panama Canal Commission

21. Executive Office of the President

22. Farm Credit Administration

23. National Credit Union Administration

24. Merit Systems Protection Board

25. ACTION

26. United States Arms Control and Disarmament Agency

27. The Office of Thrift Supervision

28. The Federal Housing Finance Board

29. National Labor Relations Board

30. National Mediation Board

31. Railroad Retirement Board

32. American Battle Monuments Commission

33. Federal Communications Commission

34. Federal Trade Commission

35. Inter-State Commerce Commission

36. Securities and Exchange Commission

37. Office of Personnel Management

38. United States International Trade Commission

39. Export-Import Bank of the United States

40. Federal Mediation and Conciliation Service

41. Selective Service System

42. Smithsonian Institution

43. Federal Deposit Insurance Corporation

44. Consumer Product Safety Commission

45. Equal Employment Opportunity Commission

46. Federal Maritime Commission

47. National Transportation Safety Board

48. Nuclear Regulatory Commission

49. Overseas Private Investment Corporation

50. Administrative Conference of the United States

51. Board for International Broadcasting

52. Commission on Civil Rights

53. Commodity Futures Trading Commission

54. The Peace Corps

55. National Archives and Records Administration

56. Department of Defense, including the Army Corps of Engineers

This Chapter will not apply to the following purchases of the

DOD:

(a) Federal Supply Classification (FSC) 83 - all elements of

this classification other than pins, needles, sewing

kits, flagstaffs, flagpoles, and flagstaff trucks;

(b) FSC 84 - all elements other than sub-class 8460 (luggage);

(c) FSC 89 - all elements other than sub-class 8975 (tobacco

products);

(d) FSC 2310 - (buses only);

(e) speciality metals, defined as steels melted in steel

manufacturing facilities located in the United States or

its possessions, where the maximum alloy content exceeds

one or more of the following limits, must be used in

products purchased by DOD: (1) manganese, 1.65 per cent;

silicon, 0.60 per cent; or copper, 0.06 per cent; or

which contains more than 0.25 per cent of any of the

following elements: aluminium, chromium, cobalt,

columbium, olybdenum, nickel, titanium, tungsten, or

vanadium; (2) metal alloys consisting of nickel, iron-

nickel and cobalt base alloys containing a total of other

alloying metals (except iron) in excess of 10 per cent;

(3) titanium and titanium alloys; or (4) zirconium base

alloys;

(f) FSC 19 and 20 - that part of these classifications

defined as naval vessels or major components of the hull

or superstructure thereof;

(g) FSC 51; and

(h) the following FSC categories are not generally covered

due to application of Article 1018(1) (Exceptions): 10,

12, 13, 14, 15, 16, 17, 19, 20, 28, 31, 58, 59 and 95.

This Chapter will generally apply to DOD purchases of the

following FSC categories subject to United States Government

determinations under the provisions of Article 1018(1)

(Exceptions):

22. Railway Equipment

23. Motor Vehicles, Trailers, and Cycles (except buses in

2310)

24. Tractors

25. Vehicular Equipment Components

26. Tires and Tubes

29. Engine Accessories

30. Mechanical Power Transmission Equipment

32. Woodworking Machinery and Equipment

34. Metalworking Machinery

35. Service and Trade Equipment

36. Special Industry Machinery

37. Agricultural Machinery and Equipment

38. Construction, Mining, Excavating, and Highway Maintenance

Equipment

39. Materials Handling Equipment

40. Rope, Cable, Chain and Fittings

41. Refrigeration and Air Conditioning Equipment

42. Fire Fighting, Rescue and Safety Equipment

43. Pumps and Compressors

44. Furnace, Steam Plant, Drying Equipment and Nuclear

Reactors

45. Plumbing, Heating and Sanitation Equipment

46. Water Purification and Sewage Treatment Equipment

47. Pipe, Tubing, Hose and Fittings

48. Valves

49. Maintenance and Repair Shop Equipment

52. Measuring Tools

53. Hardware and Abrasives

54. Prefabricated Structures and Scaffolding

55. Lumber, Millwork, Plywood and Veneer

56. Construction and Building Materials

61. Electric Wire, and Power and Distribution Equipment

62. Lighting Fixtures and Lamps

63. Alarm and Signal Systems

65. Medical, Dental, and Veterinary Equipment and Supplies

66. Instruments and Laboratory Equipment

67. Photographic Equipment

68. Chemicals and Chemical Products

69. Training Aids and Devices

70. General Purpose ADPE, Software, Supplies and Support

Equipment

71. Furniture

72. Household and Commercial Furnishings and Appliances

73. Food Preparation and Serving Equipment

74. Office machines, text processing system and visible

record equipment

75. Office Supplies and Devices

76. Books, Maps and Other Publications

77. Musical Instruments, Phonographs, and Home Type Radios

78. Recreational and Athletic Equipment

79. Cleaning Equipment and Supplies

80. Brushes, Paints, Sealers and Adhesives

81. Containers, Packaging and Packing Supplies

85. Toiletries

87. Agricultural Supplies

88. Live Animals

91. Fuels, Lubricants, Oils and Waxes

93. Non-metallic Fabricated Materials

94. Non-metallic Crude Materials

96. Ores, Minerals and their Primary Products

99. Miscellaneous

Note:

The General Notes for the United States as set out in Annex 1002.7

apply to this Annex.

=============================================================================

ANNEX 1002.2

State and Provincial Government Entities

Coverage under this Annex will be addressed following

consultations with state and provincial governments under the terms

and conditions set out in Article 1024 (Further Negotiations).

Note:

The General Notes as set out in Annex 1002.7 apply to this Annex.

=============================================================================

ANNEX 1002.3

Government Enterprises

Schedule of Canada

1. Canada Post Corporation

2. National Capital Commission

3. St. Lawrence Seaway Authority

4. Royal Canadian Mint

5. Canadian National Railways

6. Via Rail

7. Canadian Museum of Civilization

8. Canadian Museum of Nature

9. National Gallery of Canada

10. National Museum of Science and Technology

11. Defence Construction (1951) Ltd.

Notes:

1. With respect to procurements by Canadian National Railways,

St. Lawrence Seaway Authority and Via Rail, coverage is subject to

Article 1019(5) (Provision of Information), respecting the

protection of the commercial confidentiality of information

provided.

2. The General Notes for Canada as set out in Annex 1002.7 apply

to this Annex.

Schedule of Mexico

Printing and Editorial

1. Talleres Gr ficos de la Nación

2. Productora e Importadora de Papel S.A de C.V., Pipsa

Communications and Transportation

3. Aeropuertos y Servicios Auxiliares, ASA

4. Caminos y Puentes Federales de Ingreso y Servicios Conexos,

Capufe

5. Puertos Mexicanos

6. Servicio Postal Mexicano

7. Ferrocarriles Nacionales de México, Ferronales

8. Telecomunicaciones de México, Telecom

Industry

9. Petróleos Mexicanos, Pemex (This Chapter does not apply to

procurement of fuels and gas.)

10. Comisión Federal de Electricidad, CFE

11. Consejo de Recursos Minerales

12. Comisión de Fomento Minero

Commerce

13. Compañía Nacional de Subsistencias Populares, Conasupo (This

Chapter does not apply to procurement of agricultural products

made in furtherance of agricultural support programmes or

human feeding programmes.)

14. Bodegas Rurales Conasupo, S.A. de C.V.

15. Distribuidora e Impulsora de Comercio, Diconsa

16. Leche Industrializada Conasupo, S.A. de C.V., Liconsa (This

Chapter does not apply to procurement of agricultural products

made in furtherance of agricultural support programmes or

human feeding programmes.)

17. Procuraduría Federal del Consumidor

18. Instituto Nacional del Consumidor

19. Laboratorios Nacionales de Fomento Industrial

20. Servicio Nacional de Información de Mercados

Social Security

21. Instituto de Seguridad y Servicios Sociales de los

Trabajadores del Estado, ISSSTE

22. Instituto Mexicano del Seguro Social, IMSS

23. Sistema Nacional para el Desarrollo Integral de la Familia,

DIF (This Chapter does not apply to procurement of

agricultural products made in furtherance of agricultural

support programmes or human feeding programmes.)

24. Servicios Asistenciales de la Secretaría de Marina

25. Instituto de Seguridad Social para las Fuerzas Armadas

Mexicanas

26. Instituto Nacional Indigenista, INI

27. Instituto Nacional Para la Educación de los Adultos

28. Centros de Integración Juvenil

29. Instituto Nacional de la Senectud

Others

30. Comite Administrador del Programa Federal de Construcción de

Escuelas, Capfce

31. Comisión Nacional del Agua, CNA

32. Comisión Para la Regularización de la Tenencia de la Tierra

33. Consejo Nacional de Ciencia y Tecnología, Conacyt

34. Notimex, S.A . de C.V.

35. Instituto Mexicano de Cinematografía

36. Lotería Nacional para la Asistencia Pública

37. Pronósticos Deportivos

Notes:

1. National security exceptions include procurements made in

support of safeguarding nuclear materials or technology.

2. The General Notes for Mexico as set out in Annex 1002.7 apply

to this Annex.

Schedule of the United States

1. Tennessee Valley Authority

2. Power Marketing Administrations of the Department of Energy

- Bonneville Power Administration

- Western Area Power Administration

- Southeastern Power Administration

- Southwestern Power Administration

- Alaska Power Administration

3. St. Lawrence Seaway Development Corporation

Notes:

1. For suppliers of goods and services of Canada, the obligations

of this Chapter will apply to procurements by the Tennessee Valley

Authority and the Power Marketing Administrations of the Department

of Energy only at such time as the obligations of this Chapter take

effect for procurements by Canadian Provincial Hydro utilities.

2. The General Notes for the United States as set out in Annex

1002.7 apply to this Annex.

=============================================================================

ANNEX 1002.4

Services

I. General Provisions

1. Except for the services listed in Part II of this Annex, all

services procured by the entities listed in Annex 1002.1 (Federal

Government Entities) and Annex 1002.3 (Government Enterprises) are

subject to this Chapter.

2. Contracts for construction services are subject to this

Chapter as specified in Annex 1002.5 (Construction Services).

3. The Parties shall adopt a universal list of services for

reporting purposes, which is indicative of the services procured by

the entities of the Parties, and is contained in the Appendix to

this Annex.

4. The Parties shall update, as appropriate, the list of

universal services included in the Appendix to this Annex at such

time as they mutually agree.

5. Notwithstanding paragraph 1, for Mexico only the services

included in the Temporary Schedule of Mexico will be subject to

this Chapter, until such time as Mexico has completed its schedule

under Part II pursuant to paragraph 6.

6. Mexico will develop and, after consultations with the other

Parties, complete its list of services set out under the Schedule

of Mexico in Part II of this Annex no later than July 1, 1995.

Temporary Schedule of Mexico: Services Included

(Based on the United Nations Central Product Classification, CPC)

Professional Services

863 Taxation services (excluding legal services)

8671 Architectural services

86711 Advisory and pre-design architectural services

87612 Architectural design services

87713 Contract administration services

86714 Combined architectural design and contract

administration services

86719 Other architectural services

8672 Engineering services

86721 Advisory and consultative engineering services

86722 Engineering design services for foundations and

building structures

86723 Engineering design services for mechanical and

electrical installations for buildings

86724 Engineering design services for civil engineering

construction

86725 Engineering design for industrial processes and

production

86726 Engineering design services n.e.c.

86727 Other engineering services during the construction

and installation phase

86729 Other engineering services

8673 Integrated engineering services

86731 Integrated engineering services for transportation,

infrastructure turnkey projects

86732 Integrated engineering and project management

services for water supply and sanitation works

turnkey projects

86733 Integrated engineering services for the

construction of manufacturing turnkey projects

86739 Integrated engineering services for other turnkey

projects

8674 Urban planning and landscape architectural services

Computer and Related Services

841 Consultancy services related to the installation of

computer hardware

842 Software implementation services, including systems and

software consulting services, systems analysis, design,

programming and maintenance services

843 Data processing services, including processing,

tabulation and facilities management services

844 Data base services

845 Maintenance and repair services of office machinery and

equipment including computers

849 Other computer services

Real Estate Services

821 Real estate services involving own or leased property

822 Real estate services on a fee or contract basis

Rental/Leasing Services without Operators

831 Leasing or rental services concerning machinery and

equipment without operator, including computers

832 Leasing or rental services concerning personal and

household goods (excluding in 83201, the rental of

prerecorded records, sound cassettes, CD's and excluding

83202, rental services concerning video tapes)

Other Business Services

865 Management consulting services

86501 General management consulting services

86503 Marketing management consulting services

86504 Human resources management consulting services

86505 Production management consulting services

86509 Other management consulting services, including

agrology, agronomy, farm management and related

consulting services

8676 Technical testing and analysis services including quality

control and inspection

8814 Services incidental to forestry and logging, including

forest management

883 Services incidental to mining, including, drilling and

field services

5115 Site preparation for mining

8675 Related scientific and technical consulting services

86751 Geological, geophysical and other scientific

prospecting services, including those related to

mining

86752 Subsurface surveying services

86753 Surface surveying services

86754 Map making services

663 Repair services of personal and household goods

8861 Repair services incidental to metal products, to

machinery and equipment including computers,

8866 and communications equipment

874 Building-cleaning

876 Packaging services

Environmental Services

940 Sewage and refuse disposal, sanitation and other

environmental protection services, including sewage

services, nature and landscape protection services and

other environmental protection services n.e.c.

Hotels and restaurants(including catering)

641 Hotel and other lodging services

642/3 Food and beverage serving services

Travel agency and tour operators services

7471 Travel agency and tour operator services

II. Services Excluded from Coverage

[Subject to review]

The following services contracts are excluded in their entirety by

the Parties:

Schedule of Canada

(Based on the United Nations Central Product Classification, CPC)

CPC

1. Transport, storage and communication services

- Land Transport services 71

- Water Transport services 72

- Air Transport Services 73

- Supporting and Auxiliary Transport services (except

7471: Travel Agencies and Tour Operator services) 74

- Post and Telecommunication services (except 7512:

Courier services and 7523: Data Transmission

services) 75

Note: All transportation services, including related

repair and overhaul and launching services and

transportation services, where incidental to procurement

contracts, are not subject to this Chapter.

2. Business services; agricultural, mining and manufacturing

services

- Financial, Intermediation services and Auxiliary

services therefor 81

- Leasing or rental services concerning televisions,

radios, video cassette recorders and related

equipment and accessories 83201

- Leasing or rental services concerning video tapes 83202

- Research and Development services 85

- Legal services (except: Advisory services on

Foreign Law) 861

- Legal services incidental to Taxation Services 863

- Market Research and Public Opinion Polling

services 864

- Financial Management consulting services (except

corporate tax) 86502

- Public relations services 86506

- Services related to management consulting 866

- Related scientific and technical consulting

services 8675

- Business Services, n.e.c. (except 8740: Building

cleaning services and 8760: Packaging services) 87

- Services incidental to agriculture, hunting and

forestry (except 8814: services incidental to

forestry and logging; and 8830: services incidental

to mining) 881

- Services incidental to fishing 882

- Services incidental to manufacturing, except to the

manufacture of metal products, machinery and

equipment 884

- Services incidental to the manufacture of metal

products, machinery and equipment (except 8852:

Manufacture of fabricated metal products, except

machinery and equipment on a fee or contract

basis) 885

- Repair services, n.e.c. of motor vehicles, trailers

and semi-trailers, on a fee or contract basis 8867

- Repair services of other transport equipment, on a

fee or contract basis 8868

- Services incidental to energy distribution 887

- Intangible assets 89

3. Community, Social and Professional Services

- Education services 92

- Health and Social Services 93

- Services of Membership Organizations 95

- Recreation, cultural and sporting services 96

- Other services 97

- Services provided by extraterritorial organizations

and bodies 99

4. Contracts of the departments of Transport Canada,

Communications Canada and Fisheries and Oceans respecting FSCs

70 (automatic data processing equipment, software supplies and

support equipment), 74 (office machines, text processing

systems and visible record equipment), 36 (special industry

machinery).

5. Research and development services.

6. Dredging.

7. All services purchased in support of military forces located

overseas.

8. Management and operation contracts awarded to federally-funded

research and development centers or related to carrying out

government sponsored research programs.

9. Public utilities services.

10. Printing and publishing.

Note:

The General Notes for Canada as set out in Annex 1002.7 apply to

this Annex.

Schedule of Mexico

(Based on the United Nations Central Product Classification, CPC)

CPC

1. All transportation services, including transportation

services incidental to procurement contracts:

- Land transportation 71

- Water transport 72

- Air transport 73

- Supporting and auxiliary transport 74

- Post and telecommunication 75

- Repair services of other transport equipment, on a

fee or contract basis 8868

2. All risk-sharing contracts by Pemex.

3. Public utilities services (including telecommunications,

transmission, water or energy services).

4. Management and operation contracts awarded to federally-funded

research and development centers or related to carrying out

government sponsored research programs.

5. Financial services

6. Research and development services

7. Confidential consulting services (provided that they are not

used with a view to avoiding maximum possible competition or

in a manner that would constitute a means of discrimination

among suppliers of the other Parties or protection to Mexican

suppliers).

Note:

The General Notes for Mexico as set out in Annex 1002.7 apply

to this Annex.

Schedule of the United States

(Based on the Procurement Data System Services Codes)

FSC

1. Transportation and related services (except V231:

Lodging and Hotel/Motel; and V302: travel agent)

- Transportation V

- Maintenance, Repair and Rebuilding of Ships JO19

- Non-nuclear Ship Repair J998 and J999

- Modification of Ships KO19

In addition, transportation services, where incidental

to procurement contracts, are not subject to this Chapter.

2. Dredging Y216

3. All services purchased in support of military forces

overseas.

4. Management and operation contracts awarded to

- federally-funded research and development centers

(FFRDCs) or related to carrying out

government-sponsored research programs

(classification to be clarified) M181-184

- by DOD, DOE, and NASA M

5. Public utilities and telecommunications services:

- Utilities S1

- ADP Telecommunications and Transmission Services D304

- ADP Teleprocessing and Timesharing Services D305

- Telecommunications Network Management Services D316

- Automated News Services, Data Services, or other

information D317

- Other ADP and Telecommunications services D399

6. Research and Development services A

Note: The General Notes for the United States as set out in Annex

1002.7 apply to this Annex.

Appendix to ANNEX 1002.4

Universal List of Services

ANNEX 1002.5

Construction Services

I. General Provisions

1. Except for the construction services listed in Part II of this

Annex, all construction services as specified in the Appendix to

this Annex, which are procured by the entities listed in Annex

1002.1 (Federal Government Entities) and Annex 1002.3 (Government

Enterprises) are subject to this Chapter.

2. The Parties will update, as appropriate, the list of

construction services included in the Appendix at such time as they

mutually agree.

II. Construction Services Excluded from Coverage

The following services contracts are excluded in their entirety by

the Parties:

Schedule of Canada

1. Dredging.

2. Construction contracts tendered by or on behalf of Department

of Transport.

Note: The General Notes for Canada as set out in Annex 1002.7

apply to this Annex.

Schedule of Mexico

All risk-sharing contracts by Pemex.

Notes:

The General Notes for Mexico as set out in Annex 1002.7 apply

to this Annex.

Schedule of the United States

Dredging.

Notes:

1. In accordance with the obligations of this Chapter, buy

national requirements on articles, supplies, and materials acquired

for use in construction contracts subject to the obligations of

this Chapter will not apply to products of Canada or Mexico.

2. The General Notes for the United States as set out in Annex

1002.7 apply to this Annex.

Appendix to ANNEX 1002.5

List of Construction Services

List of contracts for construction services which are subject to

the obligations of this Chapter, except as otherwise provided:

(Based on the United Nations Central Product Classification, CPC)

Division 51 Construction work

511 Pre-erection work at construction sites

5111 Site investigation work

5112 Demolition work

5113 Site formation and clearance work

5114 Excavating and earthmoving work

5115 Site preparation work for mining

5116 Scaffolding work

512 Construction works for buildings

5121 For one and two dwelling buildings

5122 For multi-dwelling buildings

5123 For warehouses and industrial buildings

5124 For commercial buildings

5125 For public entertainment buildings

5126 For hotel, restaurant and similar buildings

5127 For educational buildings

5128 For health buildings

5129 For other buildings

513 Construction work for civil engineering

5131 For highways (except elevated highways), streets, roads,

railways and airfield runways

5132 For bridges, elevated highways, tunnels and subways

5133 For waterways, harbours, dams and other water works

5134 For long distance pipelines, communication and power

lines (cables)

5135 For local pipelines and cables; ancillary works

5136 For constructions for mining and manufacturing

5137 For constructions for sport and recreation

5139 For engineering works n.e.c.

514 5140 Assembly and erection of prefabricated constructions

515 Special trade construction work

5151 Foundation work, including pile driving

5152 Water well drilling

5153 Roofing and water proofing

5154 Concrete work

5155 Steel bending and erection, including welding)

5156 Masonry work

5159 Other special trade construction work

516 Installation work

5161 Heating, ventilation and air conditioning work

5162 Water plumbing and drain laying work

5163 Gas fitting construction work

5164 Electrical work

5165 Insulation work (electrical wiring, water, heat, sound)

5166 Fencing and railing construction work

5169 Other installation work

517 Building completion and finishing work

5171 Glating work and window glass installation work

5172 Plastering work

5173 Painting work

5174 Floor and wall tilling work

5175 Other floor laying, wall covering and wall papering work

5176 Wood and metal joinery and carpentry work

5177 Interior fitting decoration work

5178 Ornamentation fitting work

5179 Other building completion and finishing work

518 5180 Renting services related to equipment for construction or

demolition of buildings or civil engineering works, with

operator

=============================================================================

ANNEX 1002.6

Transition Provisions for Mexico

Notwithstanding any other provision of this Chapter, Annexes 1002.1

through 1002.5 are subject to the following:

Pemex, CFE and Non-Energy Construction

1. The obligations of this Chapter shall not apply to:

(a) 50 percent of the total annual procurement above

thresholds of goods, services and construction services

by Pemex;

(b) 50 percent of the total annual procurement above

thresholds of goods, services and construction services

by CFE; and

(c) 50 percent of the total annual procurement above

thresholds of construction services, excluding

construction services procured by Pemex and CFE.

2. Loans from regional and multilateral financial institutions

will not be included for purposes of calculating the reservations

specified in paragraph 1 or subject to other restrictions.

3. As of January 1st, 1994, the reservation specified in

paragraph 1 will decrease according to the following schedule:

1994 1995 1996 1997 1998

50% 45% 45% 40% 40%

1999 2000 2001 2002 2003 and thereafter

35% 35% 30% 30% 0%

4. For Pemex and CFE, no more than 10 percent of their respective

reserved procurement under paragraphs 1 and 3 shall be applied

within a single Federal Supply Classification (FSC) class (or other

classification system as agreed by all Parties) in a single year.

5. After December 31, 1998, Pemex and CFE each will make all

reasonable efforts to assure that their respective total

reservation in each FSC class (or other classification system as

agreed by all Parties) shall not exceed 50 percent in a single year.

Pharmaceuticals

6. The provisions of this Chapter shall not apply to drugs whose

patents have expired or are not currently patented (FSC class 6505)

procured by the Secretaría de Salud, IMSS, ISSSTE, Secretaría de

Defensa and the Secretaría de Marina. This exception shall be

eliminated after 8 years from the date of entry into force of this

Agreement. Procurement of biologicals and patented drugs shall not

be exempted under any other provision of the Annexes of this

Chapter. Nothing in this Chapter shall be interpreted in a way

which will impair the protection provided by Chapter 17

(Intellectual Property) of this Agreement.

Time Limits for Tendering and Delivery

7. Upon the date of entry into force of this Agreement in January

1, 1994, Mexico will make best efforts to comply with the

provisions of Article 1012 (Time Limits for Tendering and Delivery)

with respect to the 40 day time limits. However, Mexico will fully

comply with such obligations as from January 1, 1995.

Provision of Information

8. The Parties recognize that Mexico may be required to undertake

extensive retraining of personnel, introduce new data maintenance

and reporting systems and make major adjustments to the procurement

systems of certain entities in order to comply with the obligations

of this Chapter. The Parties also recognize that Mexico may

encounter difficulties in making the transition to procurement

systems that facilitate full compliance with the obligations of

this Chapter.

9. The Parties shall, therefore, consult on an annual basis for

the first five years that the Agreement is in effect to review

transitional problems and to develop mutually agreed solutions.

Such solutions may include, when appropriate, temporary adjustment

to the obligations of Mexico under this Chapter, such as those

related to reporting requirements.

10. In addition, the United States and Canada shall cooperate with

Mexico to provide technical assistance, as appropriate and mutually

agreed pursuant to Article 1020 (Technical Cooperation) of this

Chapter, to aid Mexico's transition.

11. Notwithstanding any other provision of this Annex, each Party

shall assume all of its obligations specified in this Chapter upon

the date of entry into force of this Agreement.

Note: The General Notes for Mexico as set out in Annex 1002.7

apply to this Annex.

=============================================================================

ANNEX 1002.7

General Notes

Schedule of Canada

1. Notwithstanding any other provision of this Chapter, this

Chapter does not apply to procurements in respect of:

(a) shipbuilding and repair;

(b) urban rail and urban transportation equipment, systems,

components and materials incorporated there in as well as

all project related materials of iron or steel;

(c) contracts respecting FSC 58 (communications, detection

and coherent radiation equipment);

(d) set-asides for small and minority businesses;

(e) pursuant to Article 1018 national security exemptions

include oil purchases related to any strategic reserve

requirements; and

(f) national security exceptions include procurements made in

support of safeguarding nuclear materials or technology.

2. Procurement in terms of Canadian coverage is defined as

contractual transactions to acquire property or services for the

direct benefit or use of the government. It does not include

non-contractual agreements or any form of government assistance,

including but not limited to, cooperative agreements, grants,

loans, equity infusions, guarantees, fiscal incentives, and

government provision of goods and services, given to individuals,

firms, private institutions, and sub-central governments.

Schedule of Mexico

1. Notwithstanding any other provision of this Chapter, this

Chapter does not apply to procurements made:

(a) with a view to commercial resale by government-owned retail

stores;

(b) pursuant to loans from regional or multilateral financial

institutions to the extent that different procedures are

imposed by such institutions (except for national content

requirements); and

(c) between entities.

2. Notwithstanding any other provision in this Chapter, Mexico

may allocate a non-specific sector set-aside as follows:

(a) upon the date of entry into force of this Agreement, up

to the equivalent in real terms of $1.0 billion USD of

1994 shall annually be available to all procurements of

entities subject to this Chapter, except Pemex and CFE

and construction services procured by other entities

subject to this Chapter as well as those procurements of

goods in FSC class 6505;

(b) after December 31, 2002, up to the equivalent in real

terms of $1.2 billion USD of 1994 shall annually be

available to all procurement of entities subject to this

Chapter, except Pemex and CFE and construction services

procured by other entities subject to this Chapter as

well as those procurements of goods of FSC class 6505;

(c) after December 31, 2002, up to the equivalent in real

terms of $300 million USD of 1994 shall annually be

availble to Pemex and CFE combined; and

(d) for purposes of this paragraph

(i) no more than 10 percent of the total procurement

reserved shall be applied within a single FSC

category (or other classification system as agreed

by all Parties) in a single year, and

(ii) no more than 20 percent may be used by a single

entity.

These values shall remain constant in real terms.

3. Notwithstanding any other provision of this Chapter, the

entities subject to this Chapter may impose a local content

requirement of no more than:

(a) 40 percent, for labor intensive turnkey or major

integrated projects; and

(b) 25 percent, for capital intensive turnkey or major

integrated projects.

For purposes of these provisions, a turnkey or major integrated

project means, in general, a construction, supply or installation

project undertaken by a person pursuant to a right granted by an

entity subject to this Chapter with respect to which:

(c) the prime contractor is vested with the authority to

select the general contractors or subcontractors;

(d) Mexico does not fund the project itself;

(e) the person bears the risk of performance; and

(f) the facility will be operated by an entity subject to

this Chapter or through a procurement contract of that

entity.

4. Regardless of the thresholds, Pemex shall apply the

disciplines of Article 1004 regarding national treatment and

non-discrimination to:

(a) procurements of oil and gas field supplies and equipment,

when such supplies and equipment are procured at the

location where works pursued by Pemex are being

performed; and

(b) the selection of suppliers, when such suppliers are

established at the location where works pursued by Pemex

are being performed.

5. If the obligations of the procurements covered by this Chapter

are not met, the Parties may seek compensation in the form of more

market opportunities during the following year, or through reliance

of Chapter 20 (Institutional Arrangements and Dispute Settlement

Procedures).

6. Procurement in terms of the Mexican coverage is defined as

contractual transactions to acquire property or services for the

direct benefit or use of the government. It does not include

non-contractual agreements or any form of government assistance,

including, but not limited to, cooperative agreements, grants,

loans, equity infusions, guarantees, fiscal incentives, and

governmental provisions of goods and services, given to

individuals, firms, private institutions and state governments.

Schedule of the United States

1. Notwithstanding any other provision of this Chapter, this

Chapter does not apply to set asides on behalf of small and

minority businesses.

2. Procurement in terms of U.S. coverage is defined as

contractual transactions to acquire property or services for the

direct benefit or use of the government. It does not include

non-contractual agreements or any form of government assistance,

including, but not limited to, cooperative agreements, grants,

loans, equity infusions, guarantees, fiscal incentives, and

governmental provision of goods and services, given to individuals,

firms, private institutions, and subcentral governments.

=============================================================================

ANNEX 1002.8

Indexation and Conversion of Thresholds

1. The calculations described in Article 1002(4) (Scope and

Coverage) shall be made in accordance with the following:

(a) the United States inflation rate shall be measured by the

the Producer Price Index for Finished Goods published by

the United States Department of Commerce; and

(b) the inflationary adjustment shall be estimated according

to the following formula

T0 x (1+ pi) = T1

T0= threshold value at base period

pi= accumulated U.S. inflation rate for the ith two

year-period

T1= new threshold value.

2. Mexico and Canada shall calculate and convert the value of the

thresholds specified in paragraph 3 into their national currencies

using the conversion formulas set out in paragraph 3 or 4, as

appropriate. Mexico and Canada shall notify each other and the

United States of the value, in their respective currencies, of the

newly calculated thresholds not less than one month before the

respective thresholds take effect.

3. Canada shall base the calculation on the official conversion

rates of the Bank of Canada. From January 1, 1994 through December

31, 1995, the conversion rate shall be the average of the weekly

values of the Canadian dollars in terms of the U.S. dollars over

the period October 1, 1992 through September 30, 1993. For each

subsequent two-year period, beginning January 1, 1996, the

conversion rate shall be the average of the weekly values of the

Canadian dollar in terms of the U.S. dollar over the two-year

period ending September 30 of the year preceding the beginning of

each two-year period.

4. Mexico shall use the conversion rate of the Banco de México.

The conversion rate shall be the existing value of the Mexican peso

in terms of the US dollar as of December 1 and June 1 of each year,

or the 1st working day after. The conversion rate as of December 1

shall apply from January 1 to June 30 of the following year, and as

of June 1 shall apply from July 1 to December 31 of that year.

=============================================================================

ANNEX 1002-A

Country-Specific Thresholds

As between Canada and the United States,

a) for covered federal entities, thresholds on procurement

between Canada and the United States are as follows:

i) goods and services: goods -- US$25,000; services --

US$50,000. Canada and the United States shall consult

regarding these threshold values, and

ii) Construction: US$6,500,000; and

b) for covered government enterprises, thresholds on procurement

between Canada and the United States are as follows

i) goods and services: US$250,000, and

ii) construction: US$8,000,000.

=============================================================================

ANNEX 1010.1

Publications

I. Publications for Notices of Procurement in Accordance with

Article 1010 (Invitation to Participate)

Schedule of Canada

1. Government Business Opportunities (GBO).

2. Open Bidding Service, ISM Publishing.

Schedule of Mexico

1. Major daily newspapers of national circulation.

2. Mexico will endeavor to establish a specialized publication

for purposes of notices of procurement. When such publication is

ready, it will substitute those referred to in paragraph 1.

Schedule of United States

Commerce Business Daily (CBD).

II. Publications for Measures in Accordance with Article 1019

(Provision of Information)

Schedule of Canada

1. Precedential judicial decisions regarding government

procurement:

(a) Dominion Law Reports;

(b) Supreme Court Reports;

(c) Federal Court Reports;

(d) National Reporter.

2. Administrative rulings and procedures regarding government

procurement:

(a) Government Business Opportunities; and

(b) Canada Gazette.

3. Laws and regulations:

(a) Revised Statutes of Canada;

(b) Canada Gazette.

Schedule of Mexico

1. Diario Oficial de la Federación.

2. Semanario Judicial de la Federación (for precedential judicial

decisions only).

3. Mexico will endeavor to establish a specialized publication

for administrative rulings of general application and any

procedure, including standard contract clauses.

Schedule of United States

1. All United States laws, regulations, judicial decisions,

administrative rulings and procedures regarding government

procurement covered by this Chapter are codified in the Defense

Federal Acquisition Regulation Supplement (DFARS) and the Federal

Acquisition Regulation (FAR), both of which are published as a part

of the United States Code of Federal Regulations (CFR). The DFARS

and the FAR are published in title 48 of CFR. Copies may be

purchased from the Government Printing Office. These regulations

are also published in loose-leaf versions that are available by

subscription from the Government Printing Office. Changes are

provided to subscribers as they are issued.

2. For those who wish to consult original sources, the following

published sources are provided:

Material Publication Name

United States Laws U.S. Statutes at Large

Decisions:

- United States Supreme Court U.S. Reports

- Circuit Court of Appeals Federal Reporter - 2nd Series

- District Courts Federal Supplement Reporter

- Court of Claims Court of Claims Reports

Decisions:

- Boards of Contract Appeals Unofficial publication by Commerce Clearing

House

Decisions:

-Comptroller General of the Those not officially United States

published as decisions of the Comptroller General are published

unofficially by Federal Publications, Inc.