GOVERNMENT PROCUREMENT 27
AGREEMENT ON GOVERNMENT PROCUREMENT*
PREAMBLE
Parties to this Agreement (hereinafter referred to as "Part ies"),
Considering that Ministers agreed in the Tokyo Declaration of 14 Septemb er 1973
that comprehensive Multilateral Trade Negotiations in the framework of the General
Agreement on Tariffs and Trade (hereinafter referred to as " General Agreement"
or "GATT") should aim, inter alia, to reduce or eliminate non-tariff measures or,
where this is not appropriate, their trade restricting or di storting effects, and to bring
such measures under more effective international discipli ne;
Considering that Ministers also agreed that negotiations should aim to s ecure
additional benefits for the international tradeof develop ing countries,and recognized
the importance of the application of differential measures in ways which will provide
special and morefavourabletreatmentfor them wherethis is feasible and appropriate;
Recognizing that in order to achieve their economic and social objective s to
implement programmes and policies of economic development aimed at raising the
standard of living of their people, taking into account thei r balance-of-payments
position, developing countries may need to adopt agreed dif ferential measures;
Considering that Ministers in the Tokyo Declaration recognized that the particular
situation and problems of the least developed among the deve loping countries shall
be given special attention and stressed the need to ensure th at these countries receive
special treatment in the context of any general or specific m easures taken in favour
of the developing countries during the negotiations;
Recognizing the need to establish an agreed international framework of r ights
and obligations with respect to laws, regulations, procedu resand practices regarding
government procurement with a view to achieving greater lib eralization and expansion
of world trade and improving the international framework fo r the conduct of world
trade;
Recognizing that laws, regulations, procedures and practices regardin g government
_______________
*Theannexestothe Agreement,whichcontain,inparticular, listsofgovernmententitiesand products
covered by its terms, are not included in this text. They are m ost conveniently available in the "Practical
Guide to the GATT Agreement on Government Procurement" whic h has been published by the GATT
secretariat.28 TOKYO ROUND AGREEMENTS
procurement should not be prepared, adopted or applied to fo reign or domestic products
or suppliers and should not discriminate among foreign prod ucts or suppliers;
Recognizing that it is desirable to provide transparency of laws, regula tions,
procedures and practices regarding government procuremen t;
Recognizing the need to establish international procedures on notifica tion,
consultation, surveillance and dispute settlement with a v iew to ensuring a fair, prompt
andeffective enforcementof the internationalprovisions ongovernmentprocurement
and to maintain the balance of rights and obligations at the h ighest possible level;
Hereby agree as follows:
Article I
Scope and Coverage
1. This Agreement applies to:
(a) any law, regulation, procedure and practice regarding the p rocurement
of products by the entities1subject to this Agreement. This includes
services incidental to the supply of products if the value of these incidental
services does not exceed that of the products themselves, bu t not service
contracts per se;
(b) any procurement contract of a value of SDR 150,000 or more.2No
procurement requirement shall be divided with the intent of reducing the
value of the resulting contracts below SDR 150,000. If an ind ividual
requirement for the procurementof a product or products of t he same type
results in the award of more than one contract or in contracts being awarded
in separate parts, the value of these recurring contracts in the twelve months
subsequent to the initial contract shall be the basis for the application of
this Agreement;
(c) procurement by the entities under the direct or substantial control of Parties
and otherdesignated entities,with respectto their procur ementprocedures
and practices. Until the review and further negotiations re ferredto in the
Final Provisions, the coverage of this Agreement is specifi ed by the lists
of entities, and to the extent that rectifications, modific ations or amendments
may have been made, their successor entities, in Annex I.
_______________
1Throughout this Agreement, the word entities is understood to include agencies.
2For contracts below the threshold, the Parties shall consid er, in accordance with paragraph 6 of
Article IX, the application in whole or in part of this Agreem ent. In particular, they shall review the
procurement practices and procedures utilized and the appl ication of non-discrimination and transparency
for such contracts in connection with the possible inclusio n of contracts below the threshold in this
Agreement.GOVERNMENT PROCUREMENT 29
2. The Parties shall inform their entities not covered by thi s Agreement and the
regional and local governments and authorities within thei r territories of the objectives,
principles and rules of this Agreement, in particular the ru les on national treatment
and non-discrimination, and draw their attention to the ove rall benefits of liberalization
of government procurement.
Article II
National Treatment and Non-Discrimination
1. With respect to all laws, regulations, procedures and pra ctices regarding
government procurement covered by this Agreement, the Part ies shall provide
immediately and unconditionally to the products and suppli ers of other Parties offering
products originating within the customs territories (incl uding free zones) of the Parties,
treatment no less favourable than:
(a) that accorded to domestic products and suppliers; and
(b) that accorded to products and suppliers of any other Party.
2. The provisions of paragraph 1 shall not apply to customs du ties and charges
of any kind imposed on or in connection with importation, the method of levying
such duties and charges, and other import regulations and fo rmalities.
3. The Parties shall not apply rules of origin to products imp orted for purposes
of government procurement covered by this Agreement from ot her Parties, which
are different from the rules of origin applied in the normal c ourse of trade and at
the time of importation to imports of the same products from t he same Parties.
Article III
Special and Differential Treatment for Developing Countri es
Objectives
1. The Parties shall, in the implementation and administrat ion of this Agreement,
through the provisions set out in this Article, duly take int o account the development,
financial and trade needs of developing countries, in parti cular the least-developed
countries, in their need to:
(a) safeguard their balance-of-payments position and ensure a level of reserves
adequate for the implementation of programmes of economic d evelopment;
(b) promote the establishment or development of domestic indus tries including
the development of small-scale and cottage industries in ru ralor backward
areas; and economic development of other sectors of the econ omy;30 TOKYO ROUND AGREEMENTS
(c) support industrial units so long as they are wholly or substa ntially dependent
on government procurement;
(d) encourage their economic development through regional or g lobal
arrangements among developing countriespresented to theC ONTRACTING
PARTIES to the GATT and not disapproved by them.
2. Consistently with the provisions of this Agreement, the P arties shall, in the
preparationandapplication of laws, regulationsand proce duresaffectinggovernment
procurement,facilitate increasedimportsfrom developin g countries,bearingin mind
the special problems of the least-developed countries and o f those countries at low
stages of economic development.
Coverage
3. With a view to ensuring that developing countries are able to adhere to this
Agreement on terms consistent with their development, fina ncial and trade needs,
the objectives listed in paragraph 1 above shall be duly take n into account in the course
of the negotiations with respect to the lists of entities of d eveloping countries to be
covered by the provisions of this Agreement. Developed coun tries, in the preparation
of their lists of entities to be covered by the provisions of t his Agreement shall
endeavour to include entities purchasing products of expor t interest to developing
countries.
Agreed exclusions
4. Developing countries may negotiate with other participa nts in the negotiation
of this Agreement mutually acceptable exclusions from the r ules on national treatment
with respect to certain entities or products that are includ ed in their lists of entities
having regard to the particular circumstances of each case. In such negotiations, the
considerations mentioned in paragraph 1 (a)-(c)above shall be duly taken into account.
Developing countries participating in regional or global a rrangements among developing
countries referred to in paragraph 1 (d)above, may also negotiate exclusions to their
lists, having regard to the particular circumstances of eac h case, taking into account,
inter alia , the provisions on government procurement provided for in t he regional
or global arrangements concerned and taking into account, i n particular, products
which may be subject to common industrial development progr ammes.
5. After entry into force of this Agreement, the developing c ountry Parties may
modify their lists of entities in accordance with the provis ions for modification of
such lists contained in paragraph 5 of Article IX of this Agre ement, having regardGOVERNMENT PROCUREMENT 31
to their development, financial and trade needs, or may requ est the Committee to
grant exclusions from the rules on national treatment for ce rtain entities or products
that are included in their lists of entities, having regardt o the particularcircumstances
of each case and taking duly into account the provisions of pa ragraph 1 (a)-(c)above.
The developing country Parties may also request, after entr y into force of this
Agreement, the Committee to grant exclusions for certain en tities or products that
are included in their lists in the light of their participati on in regional or global
arrangements among developing countries, having regard to the particular
circumstances of each case and taking duly into account the p rovisions of
paragraph 1 (d)above. Each request to the Committee by a developing country Party
relating to modification of a list shall be accompanied by do cumentation relevant to
the request or by such information as may be necessary for con sideration of the matter.
6. Paragraphs 4 and 5 above shall apply mutatis mutandis to developing countries
acceding to this Agreement after its entry into force.
7. Such agreed exclusions as mentioned in paragraphs 4, 5 and 6 above shall be
subject to review in accordance with the provisions of parag raph 13 of this Article.
Technical assistance for developing country Parties
8. Developed country Parties shall, upon request, provide a ll technical assistance
which they may deem appropriate to developing country Parti es in resolving their
problems in the field of government procurement.
9. This assistance which shall be provided on the basis of non -discrimination among
the developing country Parties shall relate, inter alia, to:
the solution of particular technical problems relating to t he award of a
specific contract;
any other problem which the Party making the request and anot her Party
agree to deal with in the context of this assistance.
Information centres
10. The developed country Parties shall establish, individ ually or jointly, information
centres to respond to reasonable requests from developing c ountry Parties for
information relating to, inter alia, laws, regulations, procedures and practices regarding
government procurement, notices about proposed purchases which have been published,
addresses of the entities covered by this Agreement, and the nature and volume of
products purchased or to be purchased, including available information about future
tenders. The Committee may also set up an information centre .32 TOKYO ROUND AGREEMENTS
Special treatment for least-developed countries
11. Having regard to paragraph 6 of the Tokyo Declaration, sp ecial treatment shall
be granted to the least-developed country Parties and to the suppliers in those countries
with respect to products originating in those countries, in the context of any general
or specific measures in favour of the developing country Par ties. The Parties may
also grant the benefits of this Agreement to suppliers in the least-developed countries
which are not Parties, with respect to products originating in those countries.
12. Developed country Parties shall, upon request, provide assistance which they
may deem appropriate to potential tenderers in the least-de veloped countries in
submitting their tenders and selecting the products which a re likely to be of interest
to entities of developed countries as well as to suppliers in the least-developed countries
and likewise assist them to comply with technical regulatio ns and standards relating
to products which are the subject of the proposed purchase.
Review
13. The Committee shall review annually the operation and ef fectiveness of this
Article and after each three years of its operation on the bas is of reports to be
submitted by the Parties shall carry out a major review in ord er to evaluate its effects.
As part of the three-yearly reviews and with a view to achievi ng the maximum
implementation of the provisions of this Agreement, includ ing in particular Article II,
and having regard to the development, financial and trade si tuation of the developing
countries concerned, the Committee shall examine whether e xclusions provided for
in accordancewith the provisions of paragraphs4 to 6 of this Article shall be modified
or extended.
14. In the course of further rounds of negotiations in accord ance with the provisions
of Article IX, paragraph 6, the developing country Parties s hall give consideration
to the possibility of enlarging their lists of entities havi ng regard to their economic,
financial and trade situation.
Article IV
Technical Specifications
1. Technical specifications laying down the characteristi cs of the products to be
purchased such as quality, performance, safety and dimensi ons, testing and test
methods, symbols, terminology, packaging, marking and lab elling, and conformity
certification requirements prescribed by procurement ent ities, shall not be prepared,GOVERNMENT PROCUREMENT 33
adopted or applied with a view to creating obstacles to inter national trade nor have
the effect of creating unnecessary obstacles to internatio nal trade.
2. Any technical specification prescribed by procurement e ntities shall, where
appropriate:
(a) be in terms of performance rather than design; and
(b) be based on international standards, national technical re gulations, or
recognized national standards.
3. There shall be no requirement or reference to a particular trade mark or name,
patent, design or type, specific origin or producer unless t here is no sufficiently precise
or intelligible way of describing the procurement requirem ents and provided that words
such as "or equivalent" are included in the tenders.
Article V
Tendering Procedures
1. The Parties shall ensure that the tendering procedures of their entities are
consistent with the provisions below. Open tendering proce dures, for the purposes
of this Agreement, are those procedures under which all inte rested suppliers may
submit a tender. Selective tendering procedures,for the pu rposes of this Agreement,
are those procedures under which, consistent with paragrap h 7 and other relevant
provisions of this Article, those suppliers invited to do so by the entity may submit
a tender. Single tendering procedures, for the purposes of t his Agreement, are those
procedureswherethe entity contacts suppliersindividual ly, only under the conditions
specified in paragraph 15 below.
Qualification of suppliers
2. Entities, in the process of qualifying suppliers, shall n ot discriminate among
foreign suppliers or between domestic and foreign supplier s. Qualification procedures
shall be consistent with the following:
(a) any conditions for participation in tendering proceduress hall be published
in adequate time to enable interested suppliers to initiate and, to the extent
that it is compatible with efficient operation of the procur ement process,
complete the qualification procedures;
(b) any conditions for participation required from suppliers, including financial
guarantees, technical qualifications and information nec essary for
establishing the financial, commercialand technical capa city of suppliers,
as well as the verification of qualifications, shall be no le ss favourable
to foreign suppliers than to domestic suppliers and shall no t discriminate
among foreign suppliers;34 TOKYO ROUND AGREEMENTS
(c) the process of, and the time required for, qualifying suppli ers shall not
be used in order to keep foreign suppliers off a suppliers list or from being
considered for a particular proposed purchase. Entities sh all recognize
as qualified suppliers such domestic or foreign suppliers w ho meet the
conditions for participation in a particular proposed purc hase. Suppliers
requesting to participate in a particular proposed purchas e who may not
yet be qualified shall also be considered, provided there is sufficient time
to complete the qualification procedure;
(d) entities maintaining permanentlists of qualified supplie rsshall ensurethat
all qualified suppliers so requesting are included in the li sts within a
reasonably short time;
(e) any supplier having requested to become a qualified supplie r shall be
advised by the entities concerned of the decision in this reg ard. Qualified
suppliers included on permanent lists by entities shall als o be notified of
the termination of any such lists or of their removal from the m;
(f) nothing in sub-paragraphs (a)to(e)above shall preclude the exclusion
of any supplier on grounds such as bankruptcy or false declar ations,
provided that such an action is consistent with the national treatment and
non-discrimination provisions of this Agreement.
Notice of proposed purchase and tender documentation
3. Entities shall publish a notice of each proposed purchase in the appropriate
publication listed in Annex II. Such notice shall constitut e an invitation to participate
in either open or selective tendering procedures.
4. Each notice of proposed purchase shall contain the follow ing information:
(a) the nature and quantity of the products to be supplied, or env isaged to be
purchased in the case of contracts of a recurring nature;
(b) whether the procedure is open or selective;
(c) any delivery date;
(d) the address and final date for submitting an application to b e invited to
tender or for qualifying for the suppliers lists, or for receiving tenders,
as well as the language or languages in which they must be subm itted;
(e) the address of the entity awarding the contract and providin g any
information necessary for obtaining specifications and ot her documents;
(f) any economic and technical requirements, financial guaran tees and
information required from suppliers;GOVERNMENT PROCUREMENT 35
(g) the amount and terms of payment of any sum payable for the tend er
documentation.
The entity shall publish in one of the official languages of t he GATT a summary
of the notice of proposed purchase containing at least the fo llowing:
(i) subject matter of the contract;
(ii) time-limits set for the submission of tenders or an appl ication to be invited
to tender; and
(iii) addresses from which documents relating to the contra cts may be
requested.
5. Toensureoptimum effectiveinternationalcompetitionu nderselectivetendering
procedures, entities shall, for each proposed purchase, in vite tenders from the
maximum number of domestic and foreign suppliers, consiste nt with the efficient
operation of the procurement system. They shall select the s uppliers to participate
in the procedure in a fair and non-discriminatory manner.
6. (a) In the case of selective tendering procedures, entities mai ntaining permanent
lists of qualified suppliers shall publish annually in one o f the publications
listed in Annex III, a notice of the following:
(i) the enumeration of the lists maintained, including thei r headings, in
relation to the products or categories of products to be purc hased
through the lists;
(ii) the conditions to be filled by potential suppliers in vi ew of their
inscription on those lists and the methods according to whic h each
of those conditions be verified by the entity concerned;
(iii) the period of validity of the lists, and the formalitie s for their renewal.
(b) Entities maintaining permanent lists of qualified supplie rs may select
suppliers to be invited to tender from among those listed. An y selection
shall allow for equitable opportunities for suppliers on th e lists.
(c) If, after publication of the notice under paragraph 3 above, a supplier not
yet qualified requests to participate in a particular tende r, the entity shall
promptly start the procedure of qualification.
7. Suppliers requesting to participate in a particular prop osed purchase shall be
permitted to submit a tender and be considered provided, in t he case of those not
yet qualified, there is sufficient time to complete the qual ification procedure under
paragraphs 2-6 of this Article. The number of additional sup pliers permitted to
participate shall be limited only by the efficient operatio n of the procurementsystem.36 TOKYO ROUND AGREEMENTS
8. If after publication of a notice of a proposed purchase but before the time set
for opening or receipt of tenders as specified in the notices or the tender
documentation, it becomes necessary to amend or re-issue th e notice, the amendment
or the re-issued notice shall be given the same circulation a s the original documents
upon which the amendment is based. Any significant informat ion given to one supplier
with respect to a particular proposed purchase shall be give n simultaneously to all
other suppliers concerned in adequate time to permit the sup pliers to consider such
information and to respond to it.
9. (a) Any prescribed time-limit shall be adequate to allow foreig n as well as
domestic suppliers to prepare and submit tenders before the closing of the
tendering procedures. In determining any such time-limit, entities shall,
consistent with their own reasonable needs, take into accou nt such factors
as the complexity of the proposed purchase, the extent of sub -contracting
anticipated, and the normal time for transmitting tenders b y mail from
foreign as well as domestic points.
(b) Consistent with the entity s own reasonable needs, any delivery date shall
take into account the normal time required for the transport of goods from
the different points of supply.
10. (a) In open procedures, the period for the receipt of tenders sha ll in no case
be less than thirty days from the date of publication referre d to in
paragraph 3 of this Article.
(b) In selective procedures not involving the use of a permanent list of qualified
suppliers, the period for submitting an application to be in vited to tender
shall in no case be less than thirty days from the date of publi cation referred
to in paragraph 3; the period for receipt of tenders shall in n o case be
less than thirty days from the date of issuance of the invitat ion to tender.
(c) In selective procedures involving the use of a permanent lis t of qualified
suppliers, the period for receipt of tenders shall in no case be less than
thirty days from the date of the initial issuance of invitati ons to tender.
If the date of initial issuance of invitations to tender does not coincide with
the date of the publication referred to in paragraph 3, there shall in no
case be less than thirty days between those two dates.
(d) The periods referred to in (a), (b) and(c)above may be reduced either
where a state of urgency duly substantiated by the entity ren ders
impracticable the periods in question or in the case of the se cond or
subsequent publications dealing with contracts of a recurr ing nature within
the meaning of paragraph 4 of this Article.GOVERNMENT PROCUREMENT 37
11. If, in tendering procedures, an entity allows tenders to be submitted in several
languages, one of those languages shall be one of the officia l languages of the GATT.
12. Tender documentation provided to suppliers shall conta in all information necessary
to permit them to submit responsive tenders, including the f ollowing:
(a) the address of the entity to which tenders should be sent;
(b) the address where requests for supplementary information s hould be sent;
(c) the language or languages in which tenders and tendering doc uments must
be submitted;
(d) the closing date and time for receipt of tenders and the lengt h of time
during which any tender should be open for acceptance;
(e) the persons authorized to be present at the opening of tender s and the date,
time and place of this opening;
(f) any economic and technical requirement, financial guarant ees and
information or documents required from suppliers;
(g) a complete description of the products required or of any req uirements
including technical specifications, conformity certific ation to be fulfilled
by the products, necessary plans, drawings and instruction al materials;
(h) the criteria for awarding the contract, including any facto rs 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 transpor t, insurance
and inspection costs, and in the case of foreign products, cu stoms duties
and other import charges, taxes and currency of payment;
(i) the terms of payment;
(j) any other terms or conditions.
13. (a) In open procedures, entities shall forwardthe tender docum entation at the
request of any supplier participating in the procedure, and shall reply
promptly to any reasonable request for explanations relati ng thereto.
(b) In selective procedures, entities shall forward the tender documentation
at the request of any supplier requesting to participate and shall reply
promptly to any reasonable request for explanations relati ng thereto.
(c) Entities shall reply promptly to any reasonable request for relevant
information submitted by a supplier participating in the te ndering38 TOKYO ROUND AGREEMENTS
procedure, on condition that such information does not give that supplier
an advantage over its competitors in the procedure for the aw ard of the
contract.
Submission, receipt and opening of tenders and awarding of c ontracts
14. The submission, receipt and opening of tenders and award ing of contracts shall
be consistent with the following:
(a) tenders shall normally be submitted in writing directly or b y mail. If
tenders by telex, telegram or telecopy are permitted, the te nder made
thereby must include all the information necessary for the e valuation of
the tender, in particular the definitive price proposed by t he tenderer and
a statement that the tenderer agrees to all the terms, condit ions and
provisions of the invitation to tender. The tender must be co nfirmed
promptly by letter or by the despatch of a signed copy of the te lex, telegram
or telecopy. Tenders presented by telephone shall not be per mitted. The
content of the telex, telegram or telecopy shall prevail whe re there is a
difference or conflict between that content and any documen tation received
after the time-limit; requests to participate in selective tendering procedures
may be submitted by telex, telegram or telecopy;
(b) the opportunities that may be given to tenderers to correct u nintentional
errors between the opening of tenders and the awarding of the contract
shall not be permitted to give rise to any discriminatory pra ctice;
(c) a supplier shall not be penalized if a tender is received in th e office
designated in the tender documentation after the time speci fied because
of delay due solely to mishandling on the part of the entity. T enders may
also be considered in other exceptional circumstances if th e procedures
of the entity concerned so provide;
(d) all tenders solicited under open and selective procedures b y entities shall
be received and opened under procedures and conditions guar anteeing the
regularity of the openings as well as the availability of inf ormation from
the openings. The receipt and opening of tenders shall also b e consistent
with the national treatment and non-discrimination provis ions of this
Agreement. To this effect, and in connection with open proce dures, entities
shall establish provisions for the opening of tenders in the presence of either
tenderers or their representatives, or an appropriate and i mpartial witness
not connected with the procurement process. A report on the o pening of
tenders shall be drawn up in writing. This report shall remai n with the
entities concerned at the disposal of the government author ities responsibleGOVERNMENT PROCUREMENT 39
for the entity in order that it may be used if required under th e procedures
of Articles VI and VII of this Agreement;
(e) to be considered for award, a tender must, at the time of openi ng, conform
to the essential requirements of the notices or tender docum entation and
be from suppliers which comply with the conditions for parti cipation. If
an entity has received a tender abnormally lower than other t enders
submitted, it may enquire with the tenderer to ensure that it can comply
with the conditions of participation and be capable of fulfi lling the terms
of the contract;
(f) unless in the public interest an entity decides not to issue t he contract, the
entity shall make the award to the tenderer who has been deter mined to
be fully capable of undertaking the contract and whose tende r, whether
for domestic or foreign products, is either the lowest tende r or the tender
which in terms of the specific evaluation criteria set forth in the notices
or tender documentation is determined to be the most advanta geous;
(g) if it appears from evaluation that no one tender is obviously the most
advantageous in terms of the specific evaluation criteria s et forth in the
notices or tender documentation, the entity shall, in any su bsequent
negotiations, give equal consideration and treatment to al l tenders within
the competitive range;
(h) entities should normally refrain from awarding contracts o n the condition
that the supplier provide offset procurement opportunitie s or similar
conditions. In the limited number of cases where such requis ites are part
of a contract, Parties concerned shall limit the offset to a r easonable
proportion within the contract value and shall not favour su ppliers from
one Party over suppliers from any other Party. Licensing of t echnology
should not normally be used as a condition of award but instan ces where
it is required should be as infrequent as possible and suppli ers from one
Party shall not be favoured over suppliers from any other Par ty.
Use of single tendering
15. Theprovisionsof paragraphs1-14 abovegoverningopen a ndselective tendering
procedures need not apply in the following conditions, prov ided that single tendering
is not used with a view to avoiding maximum possible competit ion or in a manner
which would constitute a means of discrimination among fore ign suppliers or protection
to domestic producers:
(a) in the absence of tenders in response to an open or selective t ender, or
when the tenders submitted have been either collusive or do n ot conform
to the essential requirements in the tender, or from supplie rs who do not
comply with the conditions for participation provided for i n accordance40 TOKYO ROUND AGREEMENTS
with this Agreement, on condition, however, that the requir ements of the
initial tender are not substantially modified in the contra ct as awarded;
(b) when, for works of art or for reasons connected with protecti on of exclusive
rights, such as patents or copyrights, the products can be su pplied only
by a particular supplier and no reasonable alternative or su bstitute exists;
(c) insofar as is strictly necessary when, for reasons of extrem e urgency
brought about by events unforeseeable by the entity, the pro ducts could
not be obtained in time by means of open or selective tenderin g procedures;
(d) for additional deliveries by the original supplier which ar e intended either
as parts replacement for existing supplies or installation s, or as the
extension of existing supplies or installations where a cha nge of supplier
would compel the entity to purchase equipment not meeting re quirements
of interchangeability with already existing equipment;
(e) when an entity purchases prototypes or a first product which are developed
at its request in the course of, and for, a particular contrac t for research,
experiment, study or original development. When such contr acts have
been fulfilled, subsequent purchases of products shall be s ubject to
paragraphs 1-14 of this Article.1
16. Entities shall prepare a report in writing on each contra ct awarded under the
provisions of paragraph 15 of this Article. Each report shal l contain the name of
the purchasing entity, value and kind of goods purchased, co untry of origin, and a
statement of the conditions in paragraph 15 of this Article w hich prevailed. This
report shall remain with the entities concerned at the dispo sal of the government
authorities responsible for the entity in order that it may b e used if required under
the procedures of Articles VI and VII of this Agreement.
Article VI
Information and Review
1. Any law, regulation, judicial decision, administrative ruling of general application,
and any procedure (including standard contract clauses) re garding government
procurement covered by this Agreement, shall be published p romptly by the Parties
_______________
1Original development of a first product may include limited production in order to incorporate
the results of field testing and to demonstrate that the prod uct is suitable for production in quantity to
acceptable quality standards. It does not extend to quantit y production to establish commercial viability
or to recover research and development costs.GOVERNMENT PROCUREMENT 41
in the appropriate publications listed in Annex IV and in suc h a manner as to enable
other Parties and suppliers to become acquainted with them. The Parties shall be
prepared, upon request, to explain to any other Party their g overnment procurement
procedures. Entities shall be prepared, upon request, to ex plain to any supplier from
a country which is a Party to this Agreement their procuremen t practices and
procedures.
2. Entities shall, upon request by any supplier, promptly pr ovide pertinent
information concerning the reasons why that supplier s application to qualify for the
suppliers list was rejected,or why that supplier was not invited or adm itted to tender.
3. Entities shall promptly, and in no case later than seven wo rking days from the
date of the award of a contract, inform the unsuccessful tend erers by written
communication or publication that a contract has been award ed.
4. Upon request by an unsuccessful tenderer, the purchasing entity shall promptly
provide that tenderer with pertinent information concerni ng the reasons why the tender
was not selected, including information on the characteris tics and the relative
advantages of the tender selected, as well as the name of the w inning tenderer.
5. Entities shall establish a contact point to provide addit ional information to any
unsuccessful tenderer dissatisfied with the explanation f or rejection of his tender or
who may have further questions about the award of the contrac t. There shall also
be procedures for the hearing and reviewing of complaints ar ising in connection with
any phase of the procurement process, so as to ensure that, to the greatest extent
possible, disputes under this Agreement will be equitably a nd expeditiously resolved
between the suppliers and the entities concerned.
6. The government of the unsuccessful tenderer, which is a Pa rty to this Agreement,
may seek, without prejudice to the provisions under Article VII, such additional
information on the contract award as may be necessary to ensu re that the purchase
was made fairly and impartially. To this end, the purchasing government shall provide
information on both the characteristics and relative advan tages of the winning tender
and the contract price. Normally this latter information ma y be disclosed by the
government of the unsuccessful tenderer provided it exerci ses this right with discretion.
In cases where release of this information would prejudice c ompetition in future tenders
this information shall not be disclosed except after consul tation with and agreement
of the Party which gave the information to the government of t he unsuccessful tenderer.
7. Available information concerningindividual contract a wardsshall be provided,
upon a request, to any other Party.42 TOKYO ROUND AGREEMENTS
8. Confidential information provided to any Party which wou ld impede law
enforcement or otherwise be contrary to the public interest or would prejudice the
legitimate commercial interest of particular enterprises , public or private, or might
prejudice fair competition between suppliers, shall not be revealed without formal
authorization from the party providing the information.
9. The Parties shall collect and provide to the Committee on a n annual basis statistics
on their purchases. Such reportsshall contain the followin g information with respect
to contracts awarded by all procurement entities covered un der this Agreement:
(a) global statistics on estimated value of contracts awarded, both above and
below the threshold value;
(b) statistics on number and total value of contracts awarded ab ove the
thresholdvalue, brokendown by entities, categoriesof pro ductsand either
nationality of the winning tenderer or country of origin of t he product,
according to a recognized tradeor other appropriateclassi fication system;
(c) statistics on the total number and value of contracts awarde d under each
of the cases of Article V, paragraph 15.
Article VII
Enforcement of Obligations
Institutions
1. There shall be established under this Agreement a Committ ee on Government
Procurement (referred to in this Agreement as "the Committe e") composed of
representatives from each of the Parties. This Committee sh all elect its own Chairman
and shall meet as necessary but not less than once a year for th e purpose of affording
Parties the opportunity to consult on any matters relating t o the operation of this
Agreement or the furtherance of its objectives, and to carry out such other
responsibilities as may be assigned to it by the Parties.
2. The Committee may establish ad hoc panels in the manner and for the purposes
set out in paragraph 8 of this Article and working parties or o ther subsidiary bodies
which shall carry out such functions as may be given to them by the Committee.
Consultations
3. Each Party shall afford sympathetic consideration to, an d shall afford adequate
opportunity for consultations regarding, representation s made by another Party with
respect to any matter affecting the operation of this Agreem ent.GOVERNMENT PROCUREMENT 43
4. If any Party considers that any benefit accruing to it, dir ectly or indirectly, under
this Agreement is being nullified or impaired, or that the ac hievement of any objective
of this Agreement is being impeded, by another Party or Parti es, it may, with a view
to reaching a mutually satisfactory resolution of the matte r, request in writing
consultations with the Party or Parties in question. Each Pa rty shall afford sympathetic
consideration to any request from another Party for consult ations. The Parties
concerned shall initiate requested consultations promptl y.
5. The Parties engaged in consultations on a particular matt er affecting the operation
of this Agreement shall provide information concerning the matter subject to the
provisions of Article VI, paragraph 8, and attempt to conclu de such consultations
within a reasonably short period of time.
Dispute settlement
6. If no mutually satisfactory solution has been reached as a result of consultations
under paragraph 4 between the Parties concerned, the Commit tee shall meet at the
request of any party to the dispute within thirty days of rece ipt of such a request to
investigate the matter, with a view to facilitating a mutual ly satisfactory solution.
7. If no mutually satisfactory solution has been reached aft er detailed examination
by the Committee under paragraph 6 within three months, the C ommittee shall, at
the request of any party to the dispute establish a panel to:
(a) examine the matter;
(b) consult regularly with the parties to the dispute and give fu ll opportunity
for them to develop a mutually satisfactory solution;
(c) make a statement concerning the facts of the matter as they re late to
application of this Agreement and make such findings as will assist the
Committee in making recommendations or giving rulings on th e matter.
8. In order to facilitate the constitution of panels, the Cha irman of the Committee
shall maintain an informal indicative list of governmental officials experienced in
the field of traderelations.This list may also include pers onsother than governmental
officials. In this connection, each Party shall be invited t o indicate at the beginning
of every year to the Chairman of the Committee the name(s) of t he one or two persons
whom the Parties would be willing to make available for such w ork. When a panel
is established under paragraph 7, the Chairman, within seve n days, shall propose
to the parties to the dispute the composition of the panel con sisting of three or five44 TOKYO ROUND AGREEMENTS
members and preferably government officials. The parties d irectly concerned shall
react within seven working days to nominations of panel memb ers by the Chairman
and shall not oppose nominations except for compelling reas ons.
Citizens of countries whose governments are parties to a dis pute shall not be
eligible for membership of the panel concerned with that dis pute. Panel members
shall serve in their individual capacities and not as govern mental representatives nor
as representativesof any organization. Governments or org anizations shall therefore
not give them instructions with regard to matters before a pa nel.
9. Each panel shall develop its own procedures. All Parties, having a substantial
interest in the matter and having notified this to the Commit tee, shall have an
opportunity to be heard. Each panel may consult with and seek information from any
source it deems appropriate. Before a panel seeks such infor mation from a source
within the jurisdiction of a Party it shall inform the govern ment of that Party. Any
Party shall respond promptly and fully to any request by a pan el for such information
as the panel considers necessary and appropriate. Confiden tial information provided
to the panel shall not be revealed without formal authorizat ion from the government
or person providing the information. Where such informatio n is requested from the
panel but release of such information by the panel is not auth orized, a non-confidential
summary of the information, authorized by the government or person providing the
information, will be provided.
Where a mutually satisfactory solution to a dispute cannot b e found or where
the dispute relatesto an interpretationof this Agreement, the panel should first submit
the descriptive part of its report to the Parties concerned, and should subsequently
submit to the parties to the dispute its conclusions, or an ou tline thereof, a reasonable
period of time before they are circulated to the Committee. W here an interpretation
of this Agreement is not involved and where a bilateral settl ement of the matter has
been found, the report of the panel may be confined to a brief d escription of the case
and to reporting that a solution had been reached.
10. The time required by panels will vary with the particular case. Panels should
aim to deliver their findings, and where appropriate, recom mendations, to the
Committee without undue delay, taking into account the obli gation of the Committee
to ensure prompt settlement in cases of urgency, normally wi thin a period of four
months from the date the panel was established.
Enforcement
11. After the examination is complete or after the report of a panel, working party
or other subsidiary body is presented to the Committee, the C ommittee shall giveGOVERNMENT PROCUREMENT 45
the matter prompt consideration. With respect to these repo rts, the Committee shall
take appropriate action normally within thirty days of rece ipt of the report unless
extended by the Committee, including:
(a) a statement concerning the facts of the matter;
(b) recommendations to one or more Parties; and/or
(c) any other ruling which it deems appropriate.
Any recommendations by the Committee shall aim at the positi ve resolution of the
matter on the basis of the operative provisions of this Agree ment and its objectives
set out in the Preamble.
12. If a Party to which recommendations are addressed consid ers itself unable to
implement them, it should promptly furnish reasons in writi ng to the Committee.
In that event, the Committee shall consider what further act ion may be appropriate.
13. The Committee shall keep under surveillance any matter o n which it has made
recommendations or given rulings.
Balance of rights and obligations
14. If the Committee s recommendations are not accepted by a party, or parties,
to the dispute, and if the Committee considers that the circu mstances are serious
enough to justify such action, it may authorize a Party or Par ties to suspend in whole
or in part, and for such time as may be necessary, the applicat ion of this Agreement
to any other Party or Parties, as is determined to be appropri ate in the circumstances.
Article VIII
Exceptions to the Agreement
1. Nothing in this Agreement shall be construed to prevent an y Party from taking
any action or not disclosing any information which it consid ers necessary for the
protection of its essential security interests relating to the procurement of arms,
ammunition or war materials, or to procurement indispensab le for national security
or for national defence purposes.
2. Subject to the requirementthat such measures are not appl ied in a manner which
would constitute a means of arbitrary or unjustifiable disc rimination between countries
where the same conditions prevail or a disguised restrictio n on international trade,
nothing in this Agreement shall be construed to prevent any P arty from imposing
or enforcing measures necessary to protect public morals, o rder or safety, human,
animal or plant life or health, intellectual property, or re lating to the products of
handicapped persons, of philanthropic institutions or of p rison labour.46 TOKYO ROUND AGREEMENTS
Article IX
Final Provisions
1. Acceptance and accession
(a) This Agreement shall be open for acceptance by signature or o therwise,
by governments contracting parties to the GATT and by the Eur opean
Economic Community whose agreed lists of entities are conta ined in
Annex I.
(b) Any government contracting party to the GATT not a Party to th is
Agreement may accede to it on terms to be agreed between that g overnment
and the Parties. Accession shall take place by the deposit wi th
Director-General to the CONTRACTING PARTIES to the GATT of a n
instrument of accession with states the terms so agreed.
(c) This Agreement shall be open for acceptance by signature or o therwise
by governments having provisionally acceded to the GATT, on terms
related to the effective application of rights and obligati ons under this
Agreement, which take into account rights and obligations i n the
instruments providing for their provisional accession, an d whose agreed
lists of entities are contained in Annex I.
(d) This Agreement shall be open to accession by any other govern ment on
terms, related to the effective application of rights and ob ligations under
this Agreement, to be agreed between that government and the Parties,
by the deposit with the Director-General to the CONTRACTING PARTIES
to the GATT of an instrument of accession which states the ter ms so
agreed.
(e) In regard to acceptance, the provisions of Article XXVI:5 (a)and(b)of
the General Agreement would be applicable.
2. Reservations
Reservations may not be entered in respect of any of the provi sions of this
Agreement.
3. Entry into force
This Agreement shall enter into force on 1 January 1981 for th e governments1
which have accepted or acceded to it by that date. For each oth er government, it shall
_______________
1For the purpose of this Agreement, the term "government" is d eemed to include the competent
authorities of the European Economic Community.GOVERNMENT PROCUREMENT 47
enter into force on the thirtieth day following the date of it s acceptance or accession
to this Agreement.
4. National legislation
(a) Each government accepting or acceding to this Agreement sha ll ensure,
not later than the date of entry into force of this Agreement f or it, the
conformity of its laws, regulations and administrative pro cedures, and the
rules, procedures and practices applied by the entities con tained in its list
annexed hereto, with the provisions of this Agreement.
(b) Each Party shall inform the Committee of any changes in its la ws and
regulations relevant to this Agreement and in the administr ation of such
laws and regulations.
5. Rectifications or modifications
(a) Rectifications of a purely formal nature and minor amendmen ts relating
to Annexes I-IV to this Agreement shall be notified to the Com mittee and
shall become effective provided there is no objection withi n thirty days
to such rectifications or amendments.
(b) Any modifications to lists of entities other than those refe rred to in
sub-paragraph (a)may be made only in exceptional circumstances.In such
cases, a Party proposing to modify its list of entities shall notify the
Chairman of the Committee who shall promptly convene a meeti ng of the
Committee. The Parties shall consider the proposed modific ation and
consequent compensatory adjustments, with a view to mainta ining a
comparablelevel of mutually agreedcoverage providedin th is Agreement
prior to such modification. In the event of agreement not bei ng reached
on any modification taken or proposed, the matter may be purs ued in
accordancewith the provisionscontained in ArticleVIIof t his Agreement,
taking into account the need to maintain the balance of right s and
obligations at the highest possible level.
6. Reviews and negotiations
(a) The Committee shall review annually the implementation and operation
of this Agreement taking into account the objectives thereo f. The Committee
shall annually inform the CONTRACTING PARTIES to the GATT of
developments during the periods covered by such reviews.
(b) Not later than the end of the third year from the entry into for ce of this
Agreement and periodically thereafter,the Parties theret oshall undertake48 TOKYO ROUND AGREEMENTS
further negotiations, with a view to broadening and improvi ng this
Agreement on the basis of mutual reciprocity, having regard to the
provisions of Article III relating to developing countries . In this connection,
the Committee shall, at an early stage, explore the possibil ities of expanding
the coverage of this Agreement to include service contracts .
7. Amendments
The Parties may amend this Agreement having regard, inter alia, to the
experience gained in its implementation. Such an amendment , once the Parties have
concurred in accordance with the procedures established by the Committee, shall not
come into force for any Party until it has been accepted by suc h Party.
8. Withdrawal
Any Partymay withdraw from this Agreement.The withdrawal s hall take effect
upon the expiration of sixty days from the day on which writte n notice of withdrawal
is received by the Director-Generalto the CONTRACTING PART IES to the GATT.
Any Party may upon such notification request an immediate me eting of the Committee.
9. Non-application of this Agreement between particular Part ies
This Agreement shall not apply as between any two Parties if e ither of the Parties,
at the time either accepts or accedes to this Agreement, does not consent to such
application.
10. Notes and Annexes
The notes and annexes to this Agreement constitute an integr al part thereof.
11. Secretariat
This Agreement shall be serviced by the GATT secretariat.
12. Deposit
This Agreement shall be deposited with the Director-Genera l to the
CONTRACTING PARTIES to the GATT, who shall promptly furnish to each Party
and each contracting party to the GATT a certified copy there of, of each rectification
or modification thereto pursuant to paragraph 5 and of each a mendment thereto
pursuant to paragraph 7, and a notification of each acceptan ce thereof or accession
thereto pursuant to paragraph 1 and of each withdrawal there from pursuant to
paragraph 8, of this Article.GOVERNMENT PROCUREMENT 49
13. Registration
This Agreement shall be registered in accordance with the pr ovisions of
Article 102 of the Charter of the United Nations.
Done at Geneva this twelfth day of April nineteen hundred and seve nty-nine
in a single copy, in the English, French and Spanish language s, each text being
authentic, except as otherwise specified with respect to th e lists of entities annexed
hereto.
NOTES
Article I, paragraph 1
Having regard to general policy considerations relating to tied aid, including
the objective of developing countries with respect to the un tying of such aid, this
Agreement does not apply to procurement made in furtherance of tied aid to developing
countries so long as it is practised by Parties.
Article V, paragraph 14 (h)
Having regard to the general policy considerations of devel oping countries in
relation to government procurement, it is noted that under t he provisions of
paragraph 14 (h)of Article V, developing countries may require incorporati on of
domestic content, offset procurement, or transfer of techn ology as criteria for award
of contracts. It is noted that suppliers from one Party shall not be favoured over
suppliers from any other Party.