WORLD TRADE
ORGANIZATIONWT/GC/W/385
WT/WGTGP/W/27
9 November 1999
(99-4840)
General Council
Working Group on Transparency    in Government ProcurementOriginal:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
The WTO's Contribution to Transparency in Government Procurement
Communication from Hungary, Korea, Singapore and the United States
The following communication has been received from the Permanent Mission of the United
States with the request that it be circulated to the General Council and the Working Group on
Transparency in Government Procurement.
_______________
Attached1 please find a submission made by the United States on behalf of the delegations of
Hungary, Korea and Singapore of a draft consolidated text for an agreement on transparency ingovernment procurement.  This text is the result of ongoing informal consultations with a number of
delegations, drawing upon the four draft texts that have been submitted to the Working Group on
Transparency in Government Procurement and the discussions that have occurred in the Working
Group to date.  It is submitted by the delegations of Hungary, Korea, Singapore and the United States
with a view to early conclusion of a WTO agreement on transparency in government procurement and
in light of paragraph 76 of the revised draft of the Ministerial Declaration and with the hope that it
may provide a useful basis for further Working Group discussions.
_______________
Proposal
That Members use the attached
1 text as the basis for continued efforts to conclude an
agreement on transparency in government procurement at the Third Ministerial Conference.  In the
view of the Members making this submission, this draft text reflects the tremendous progress that
Members have already made in this area, building on the comprehensive study and consultations inthe Working Group on Transparency in Government Procurement, and provides a strong basis for
advancing these efforts.  This submission is without prejudice to individual Members' views on the
specific elements of the attached text.
Rationale
Recent instability in global financial markets has underscored the importance of capacity
building in the public sector and, in particular, of continuing to improve economic management.
Members recognize that transparent and predictable procurement procedures are a critical element of
                                                     
1 Reproduced in the Annex.WT/GC/W/385
WT/WGTGP/W/27
Page 2
good economic governance, and help to build public confidence, encourage long-term business
commitments, and provide a solid foundation for sustained economic growth and development.
Transparency in procurement also helps to ensure that governments obtain the best value for
the money they spend, freeing up resources to address pressing economic and social needs.  For
example, the Ministry of Health of one Member recently reported that it was able to reduce by
20 per cent the price of medicines supplied to patients as a result of the introduction of transparent
procurement procedures.  All Members can clearly benefit, often on an even greater scale, from the
consistent use of such procedures.
Achieving concrete results in this area at the Third Ministerial Conference provides an
important opportunity for the WTO to demonstrate that it can respond promptly and flexibly to the
needs and interests of all Members.  In the view  of the delegations making this submission, the
achievement of concrete results in this area at the Ministerial Conference can make an important
contribution to Members' efforts to strengthen the rules-based international trading system.WT/GC/W/385
WT/WGTGP/W/27
Page 3
ANNEX
DRAFT TEXT FOR AN AGREEMENT ON TRANSPARENCY
IN GOVERNMENT PROCUREMENT
Members,
Recognizing that government procurement may provide a means of achieving or supporting
Governments' social, environmental and economic objectives for the betterment of their
communities,
Recognizing that efficient, effective and appropriate government procurement enhances the
management of government resources, the quality of governance and the economic
performance of the community as a whole,
Recognizing  that transparency, integrity and predictability are integral to efficient and
effective government procurement and to the functioning of the multilateral trading system,
and
Desiring  to establish a multilateral framework of transparency obligations to assure all parties
that government procurement shall be conducted fairly, ethically and predictably,
Hereby agree  as follows:
I. GENERAL OBJECTIVE
This Agreement aims at ensuring transparency [, integrity and predictability] in government
procurement.  Each Member shall adopt and apply its procurement laws, regulations and requirements
in good faith and in a manner that does not undermine the aims of this Agreement.
II. NON-DISCRIMINATION IN TRANSPARENCY
In carrying out  its obligations under this Agreement, each Member shall accord to suppliers
from any other Member treatment no less favorable than that which it accords to its own suppliers orto suppliers from any other country.
III. SCOPE AND APPLICATION
1. This Agreement shall apply to any law, regulation or requirement governing the procurement
by governmental agencies of goods and services pu rchased for governmental purposes and not with a
view to commercial resale nor to use in the production of goods or services for commercial sale.
[2. This Agreement
Option 1:   [applies to all procurement [within the jurisdiction] of a Member]
Option 2:   [does not apply to procurement by government agencies other than those of a
Member's central or Federal government and the highest level of sub-central government]WT/GC/W/385
WT/WGTGP/W/27
Page 4
Option 3:   [applies to all procurement of a Member's central or Federal government
[, including departments that perform administrative, research, supervisory, advisory or regulatory
functions of a governmental nature]].[1]]
3. This Agreement shall not apply to a procurement contract with a value of less than [the
de minimus  threshold specified in domestic procurement rules, which shall in no case be greater than]
Option 1:   [... SDRs]
Option 2:   [... SDRs for goods and services and ... SDRs for construction services].
3.1 Each Member shall ensure that its procuring entities do not divide intended
procurements for the purposes of avoiding application of this Agreement.
IV. EXCEPTIONS
Nothing in this Agreement shall prevent any Member and its procuring entities from taking
any action which that Member considers necessary for the protection of its essential security interests
or any action which is necessary under GATT Articl e XX or GATS Article XIV.  Any Member and
its procuring entities may refrain from disclosing confidential business information or information
that would impede law enforcement.
V. TRANSPARENCY OF  PROCUREMENT RULES
1. Without prejudice to the obligations of Arti cle X:1 of GATT and Article III:1 and 2 of GATS,
each Member shall publish in a timely manner all laws, regulations, and requirements that specifically
relate to government procurement and are of general application (hereinafter collectively referred to
as "procurement rules") in officially designated media which are readily accessible to the public.Each Member shall publish in the same media and in a timely manner all additions and changes to its
procurement rules.
[1.1 Members' procuring entities shall not be required to publish materials which could be
prejudicial to the objective and non-discriminatory evaluation of bids or applications
for qualification.]
2. Option 1 :  [Such procurement rules shall describe the conditions under which it is appropriate
to use different procurement methods.  A procuring entity's choice of procurement method shall be in
accordance with those conditions.
2.1 When a procuring entity uses a procurement method in which information on the
procurement is provided only to one supplier or to a limited number of suppliers who
are selected in advance by the procuring entity through a selection process other than
a qualification process, it may depart from the provisions of Articles VI and VII
[and VIII] of this Agreement.]
Option 2 :  [In selecting a procurement method, which may include open, sole source,
pre-qualification arrangements, short-listing, staged procurement and other methods of procurement,
entities may select the most efficient and effective method to achieve their procurement objective,
taking into account market circumstances and the costs and benefits of each procurement method.]
                                                     
1 [This Agreement shall not apply to the granting of exclusive rights by a Member.]WT/GC/W/385
WT/WGTGP/W/27
Page 5
3. Each Member shall, upon request by another Member, provide in a timely manner,
information and explanations of their procurement rules, procedures, practices and policies, affecting
the implementation and operation of this Agreement.
[4. Within one year from the date on which this Agreement takes effect, each Member shall
notify to the WTO Committee on Transparency in Government Procurement a list of the titles of its
laws, regulations and administrative rulings of general application specifically relating to government
procurement [and its officially designated media for publishing information].  Such notifications shall
be made in an official WTO language.]
[5. Each Member shall establish an enquiry point which shall disseminate information and
provide answers to all reasonable questions from other Members and interested parties in other
Members' countries or territories relating to government procurement policies and procedures.  Each
Member shall notify to the Committee on Transparency in Government Procurement, established in
accordance with Article XI of this Agreement, the name, address and other appropriate contact
information for this enquiry point.]
VI. TRANSPARENCY OF INFORMATION ON PROCUREMENT OPPORTUNITIES
Invitations to participate in the procurement process
1. Whenever a procuring entity issues an open invitation for bids, or, where appropriate, an
invitation to participate in a qualification process, it shall publish the invitation in a medium of
general distribution which is readily accessible to the public.
1.1 Where an invitation for bids is extended only to suppliers that the entity has
pre-qualified or selected in advance, it sh all ensure that the invitation is provided to
all such suppliers.
2. The invitations shall include sufficient information to allow suppliers to assess their potential
interest in a particular procurement process and to submit responsive bids, and shall include at least
the following:
2.1 a description of the proposed procurement, including the nature of the goods and
services to be procured and all relevant time-periods;
2.2 the procurement method to be used and information on any applicable preferences or
other conditions for participation [, or an explicit reference to procurement rules
setting out applicable preferences or other conditions for participation];  and
2.3 information on how to contact the procuring entity to obtain relevant information on
the bidding or qualification process and requirements.
Time-periods
3. Procuring entities shall disseminate such invita tions in sufficient time to enable interested
suppliers to obtain qualification documentation, where appropriate, and tender documentation, and to
prepare and transmit responsive submissions.
3.1 Procuring entities shall ensure that such time-periods are the same for all suppliers.WT/GC/W/385
WT/WGTGP/W/27
Page 6
3.2 Entities shall ensure that time-periods for the receipt of bids are determined with due
consideration of the particular circumstances of the procurement, including the
conditions and the complexity of the procurement.
Invitations relating to closed lists of qualified suppliers
4. Whenever a qualification process covers multiple procurements over a period of time and is
not open at all times to applications from interested suppliers:
[4.1 an invitation to apply for qualification shall be published [at least once a year]
[regularly]];
4.2 current lists of qualified suppliers shall, on request, be made available in a timely
manner;  and
4.3 each invitation to apply for qualification shall include the date and time for receipt of
applications for qualification.
Changes to information provided
5. Procuring entities shall disseminate any changes to information provided in an invitation for
bids or an invitation to participate in a qualification process in the same medium in which the
invitation was provided.
VII. TRANSPARENCY IN QUALIFICATION AND BID DOCUMENTATION
1. With regard to qualification and bid documentation, procuring entities shall provide complete
documentation in a timely manner to any interested supplier, upon request, and inform participating
suppliers in a timely manner of any changes to the documentation.
2. Where a procuring entity uses a qualification process, qualification documentation shall
clearly set out all the criteria that the entity will use to evaluate a supplier's qualifications to
participate in the procurement process.
3. Bid documentation shall specify all the information necessary for an interested supplier to
prepare and submit responsive bids.  Such information, if not already provided in a prior invitation to
participate, shall include:
3.1 all specifications and criteria the entity will use to evaluate the offered goods or
services;  and
3.2 the date and time for the receipt of tenders and, where appropriate, the date and time
for the opening of tenders.
4. Procuring entities shall specify explicit and objective requirements that are, to the greatest
extent possible, defined in terms of required functional performance.
5. Option 1 :  [Whenever a procuring entity obtains advice or assistance in the preparation or
development of specifications from a supplier [that has a potential interest in the relevantprocurement, the entity shall inform suppliers pa rticipating in the procurement of such advice or
assistance and] [, such supplier shall not be eligible to participate in the relevant procurement].]WT/GC/W/385
WT/WGTGP/W/27
Page 7
Option 2:   [When an entity obtains advice or assistance on the development of specifications
from a potential supplier, the entity shall apply that advice in a non-discriminatory manner.]
VIII.  TRANSPARENCY OF DECISIONS ON QUALIFICATION AND CONTRACT
AWARDS
1. Procuring entities shall base contract award decisions and qualification decisions solely on the
criteria and other requirements that have been specified in the bid or qualification documentation or
other information that has been provided to all participating suppliers.
2. Having awarded a contract, entities shall:
2.1 inform suppliers that have submitted bids of the contract award decision;
2.2 provide suppliers, upon request, with information as to why their bid was rejected or,
where applicable, the reasons for the denial of their request to become a qualified
supplier;  and
2.3 ensure that any debriefing provided by the entity is available to all participating
suppliers.
Other post-award information
3. Each entity shall make information on contra ct awards [publicly available] [available to
participating suppliers] for a reasonable period of time.  Such information shall include the name of
the procuring entity, a description of the goods and services procured, [and] the name of the winning
supplier [, and the value of the contract award].
[3.1 In cases where procurements are conducted under conditions set forth in
Article V:2.1, the entity shall cite in such in formation the condition in its procurement
rules allowing the use of that procurement method.]
IX. OTHER PROVISIONS ON INFORMATION RELATING TO PROCUREMENTS
1. Procuring entities shall maintain [, and make available upon request by another Member,]
records of tendering procedures relating to procur ements subject to this Agreement.  Such records
shall be maintained for a period of at least three years.
[1.1 In cases where procurements are conducted under conditions set forth in
Article V:2.1, the entity shall include in the records the condition in its procurementrules allowing the use of that procurement method.]
2. Members and procuring entities may utilise electronic or paper-based communication
methods in all stages of the procurement process, provided that whatever media is chosen complies
with the requirements of this Agreement.  Member s and procuring entities are encouraged to use, to
the extent possible, electronic communications at al l stages of the procurement process, provided that
it complies with the requirements of this Agreement.
3. Except as provided for in Article V.4 of this Agreement, information required under this
Agreement shall be provided either in an official national language or in an official WTO language.WT/GC/W/385
WT/WGTGP/W/27
Page 8
X. DOMESTIC REVIEW PROCEDURES
1. Members shall encourage the resolution of procurement disputes relating to the
implementation of this Agreement, in the first instance, through consultations between the procuring
entity and suppliers.
2. Each Member shall maintain fair and transparent judicial, arbitral or administrative bodies or
procedures for the purpose of the prompt review of procurement practices or actions that may be
inconsistent with the requirements of this Agreement, as implemented by the Member.
3. Such bodies or procedures shall be operated independently of the procuring entities and shall
provide all interested parties who participated in the procurement process and are affected by thepractice or action with access to review and timely decisions [that, as appropriate, can address any
inconsistent practice or action].
4. Each Member shall ensure that information about domestic review bodies, procedures and
decisions is publicly available.  Each Member shall maintain an administrative record of the reviewproceeding for a three-year period.
XI. REVIEW AND INSTITUTIONAL PROVISIONS
1. A Committee on Transparency in Government Procurement (hereinafter referred to as "the
Committee") shall oversee the functioning of this Agreement and perform such additional functionsrelated to government procurement as assigned by the General Council.
2. The Committee shall review the implementation of this Agreement [two] years from the date
on which it enters into force.
XII. DISPUTE SETTLEMENT
1. Consultations and the settlement of disputes among Members regarding the implementation
[in domestic procurement rules] of this Agr eement shall be in accordance with Articles XXII
and XXIII of GATT 1994 [and Articles XXII and XXIII of GATS], as elaborated and applied by the
Understanding on Rules and Procedures Governing the Settlement of Disputes under the WTO
Agreement [, except as otherwise specifically provided below].
2. Panels established by the Dispute Settlement Body to examine disputes under this Agreement
shall include persons qualified in the area of government procurement.
3. [With regard to any dispute relating to the implementation of this Agreement, each Member
should, as appropriate, encourage its interested parties to use the domestic review procedures providedfor in Article IX of this Agreement before the Member invokes the provisions of Article XII:1.]
[Members recognize that there must be no further judicial remedies available under domestic law
against the inconsistent measure before the provision of Article XII:1 is invoked.]
4. [If a panel or the Appellate Body concludes that a measure is inconsistent with this
Agreement, it shall only make recommendations that do not affect prior contract awards.]
XIII.  TECHNICAL COOPERATION
1. In order to facilitate the implementation of this Agreement, Members shall provide, on
request and on mutually agreed terms and conditions, technical cooperation in favour of developingand least developed country Members.WT/GC/W/385
WT/WGTGP/W/27
Page 9
2. In order to ensure the greatest possible efficiency of such technical cooperation, the
Committee on Transparency in Government Procurement shall identify specific priorities for
individual Members, including with respect to the following areas:
2.1 development of national legislation and procedures;
2.2 training;
2.3 institution building;
2.4 access to information by suppliers [, including establishment of enquiry points];  and
2.5 the use of information technology.
3. The Committee on Transparency in Government Procurement shall develop a plan to assess
and monitor assistance on an ongoing basis, and to coordinate such efforts with other relevant
organizations.
XIV. FINAL PROVISIONS
Acceptance and entry into force
[1. Subject to Article X of the Marrakesh Agreement Establishing the World Trade Organization,
this Agreement shall enter into force on 1 January 2001 for those Members which have
ratified the Agreement by that date.]
Reservations
2. Reservations may not be entered in respect of any of the provisions of this Agreement.
[Transitional provisions]
Operation of other agreements
[3. Members' implementation of the provisions of this Agreement shall not affect their rights and
obligations under the WTO Agreement on Government Procurement or any other international
agreement covering government procurement.]  [The rights and obligations of a Member under theWTO Agreement on Government Procurement or any other international agreement relating to
government procurement to which a Member is a party shall prevail to the extent of any inconsistency
between the rights and obligations of a Member under this Agreement and the rights and obligations
of a Member under the WTO Agreement on Governme nt Procurement or those other international
agreements.]
__________