Title:Government Procurement -- Chapter ten
Author: White House
Document-Date: 29 Sept 1993
Content-Type: text/plain; CHARSET=US-ASCII
Content-Length:196086                                       PART FOUR 
                                 GOVERNMENT PROCUREMENT 
 
                                      Chapter Ten 
 
                                 Government Procurement 
 
 
                             Section A - Scope and Coverage 
                                 and National Treatment 
 
 
            Article 1001:  Scope and Coverage 
 
            1.   This Chapter applies to measures adopted or maintained by 
            a Party relating to procurement: 
 
                 (a)  by a federal government entity set out in Annex 
                      1001.1a-1, a government enterprise set out in Annex 
                      1001.1a-2, or a state or provincial government entity 
                      set out in Annex 1001.1a-3 in accordance with Article 
                      1024; 
 
                 (b)  of goods in accordance with Annex 1001.1b-1, services 
                      in accordance with Annex 1001.1b-2, or construction 
                      services in accordance with Annex 1001.1b-3; and 
 
                 (c)  where the value of the contract to be awarded is 
                      estimated to be equal to or greater than a threshold, 
                      calculated and adjusted according to the U.S. 
                      inflation rate as set out in Annex 1001.1c, of 
 
                      (i)  for federal government entities, US$50,000 for 
                           contracts for goods, services or any combination 
                           thereof, and US$6.5 million for contracts for 
                           construction services, 
 
                      (ii) for government enterprises, US$250,000 for 
                           contracts for goods, services or any combination 
                           thereof, and US$8.0 million for contracts for 
                           construction services, and 
 
                      (iii)     for state and provincial government 
                                entities, the applicable threshold, as set 
                                out in Annex 1001.1a-3 in accordance with 
                                Article 1024. 
 
            2.   Paragraph 1 is subject to: 
 
                 (a)  the transitional provisions set out in Annex 1001.2a; 
 
 
 
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                 (b)  the General Notes set out in Annex 1001.2b; and 
 
                 (c)  Annex 1001.2c, for the Parties specified therein. 
 
            3.   Subject to paragraph 4, where a contract to be awarded by 
            an entity is not covered by this Chapter, this Chapter shall 
            not be construed to cover any good or service component of that 
            contract.  
 
            4.   No Party may prepare, design or otherwise structure any 
            procurement contract in order to avoid the obligations of this 
            Chapter. 
 
            5.   Procurement includes procurement by such methods as 
            purchase, lease or rental, with or without an option to buy.  
            Procurement does not include: 
 
                 (a)  non-contractual agreements or any form of government 
                      assistance, including cooperative agreements, grants, 
                      loans, equity infusions, guarantees, fiscal 
                      incentives, and government provision of goods and 
                      services to persons or state, provincial and regional 
                      governments; and 
 
                 (b)  the acquisition of fiscal agency or depository 
                      services, liquidation and management services for 
                      regulated financial institutions and sale and 
                      distribution services for government debt. 
 
 
            Article 1002:  Valuation of Contracts 
 
            1.   Each Party shall ensure that its entities, in determining 
            whether a contract is covered by this Chapter, apply paragraphs 
            2 through 7 in calculating the value of that contract. 
 
            2.   The value of a contract shall be estimated as at the time 
            of publication of a notice in accordance with Article 1010. 
 
            3.   In calculating the value of a contract, an entity shall 
            take into account all forms of remuneration, including 
            premiums, fees, commissions and interest. 
 
            4.   Further to Article 1001(4), an entity may not select a 
            valuation method, or divide procurement requirements into 
            separate contracts, to avoid the obligations of this Chapter. 
 
            5.   Where an individual requirement for a procurement results 
            in the award of more than one contract, or in contracts being 
            awarded in separate parts, the basis for valuation shall be 
            either: 
 
 
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                 (a)  the actual value of similar recurring contracts 
                      concluded over the prior fiscal year or 12 months 
                      adjusted, where possible, for anticipated changes in 
                      quantity and value over the subsequent 12 months; or 
 
                 (b)  the estimated value of recurring contracts in the 
                      fiscal year or 12 months subsequent to the initial 
                      contract. 
 
            6.   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 out in subparagraph 
            (b). 
 
            7.   Where tender documentation requires option clauses, the 
            basis for valuation shall be the total value of the maximum 
            permissible procurement, including all possible optional 
            purchases. 
 
 
            Article 1003:  National Treatment and Non-Discrimination 
 
            1.   With respect to measures covered by this Chapter, each 
            Party shall accord to goods of another Party, to the suppliers 
            of such goods and to service suppliers of another Party, 
            treatment no less favorable than the most favorable treatment 
            that the Party accords to: 
 
                 (a)  its own goods and suppliers; and 
 
                 (b)  goods and suppliers of another Party. 
 
            2.   With respect to measures covered by this Chapter, no Party 
            may: 
 
                 (a)  treat a locally established supplier less favorably 
                      than another locally established supplier on the 
 
 
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                      basis of degree of foreign affiliation or ownership; 
                      or 
 
                 (b)  discriminate against a locally established supplier 
                      on the basis that the goods or services offered by 
                      that supplier for the particular procurement are 
                      goods or services of another Party. 
 
            3.   Paragraph 1 does not apply to measures respecting customs 
            duties or other charges of any kind imposed on or in connection 
            with importation, the method of levying such duties or charges 
            or other import regulations, including restrictions and 
            formalities. 
 
 
            Article 1004:  Rules of Origin 
 
                 No Party may apply rules of origin to goods imported from 
            another Party for purposes of government procurement covered by 
            this Chapter that are different from or inconsistent with the 
            rules of origin the Party applies in the normal course of 
            trade, which may be the Marking Rules established under Annex 
            311 if they become the rules of origin applied by that Party in 
            the normal course of its trade. 
 
 
            Article 1005:  Denial of Benefits 
 
            1.   Subject to prior notification and consultation in 
            accordance with Articles 1803 (Notification and Provision of 
            Information) and 2006 (Consultations), a Party may deny the 
            benefits of this Chapter to a service supplier of another Party 
            where the Party establishes that the service is being provided 
            by an enterprise that is owned or controlled by persons of a 
            non-Party and that has no substantial business activities in 
            the territory of any Party. 
 
            2.   A Party may deny to an enterprise of another Party the 
            benefits of this Chapter if nationals of a non-Party own or 
            control the enterprise and: 
 
                 (a)  the circumstance set out in Article 1113(1)(a) 
                      (Denial of Benefits) is met; or 
 
                 (b)  the denying Party adopts or maintains measures with 
                      respect to the non-Party that prohibit transactions 
                      with the enterprise or that would be violated or 
                      circumvented if the benefits of this Chapter were 
                      accorded to the enterprise. 
 
 
 
 
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            Article 1006:  Prohibition of Offsets 
 
                 Each Party shall ensure that its entities do not, in the 
            qualification and selection of suppliers, goods or services, in 
            the evaluation of bids or the award of contracts, consider, 
            seek or impose offsets.  For purposes of this Article, 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, by means of  requirements of local content, licensing 
            of technology, investment, counter-trade or similar 
            requirements. 
 
 
            Article 1007:  Technical Specifications 
 
            1.   Each Party shall ensure that its entities do not prepare, 
            adopt or apply any technical specification with the purpose or 
            the effect of creating unnecessary obstacles to trade. 
 
            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 supplier 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. 
 
 
 
 
 
 
 
 
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                            Section B - Tendering Procedures 
 
 
            Article 1008:  Tendering Procedures 
 
            1.   Each Party shall ensure that the tendering procedures of 
            its entities are: 
 
                 (a)  applied in a non-discriminatory manner; and 
 
                 (b)  consistent with this Article and Articles 1009 
                      through 1016. 
 
            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.   Further to Article 1003, no entity of a Party may, in the 
            process of qualifying suppliers in a tendering procedure, 
            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 shall 
            be consistent with the following: 
 
                 (a)  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)  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 
 
 
 
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                      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, including its 
                      activity in the territory of the Party of the 
                      supplier, and its activity, if any, in the territory 
                      of the Party of the procuring entity; 
 
                 (d)  an entity shall not misuse the process of, including 
                      the time required for, qualification in order to 
                      exclude suppliers of another Party from a suppliers' 
                      list or from being considered for a particular 
                      procurement; 
 
                 (e)  an entity shall recognize as qualified suppliers 
                      those suppliers of another Party that meet the 
                      conditions for participation in a particular 
                      procurement; 
 
                 (f)  an entity shall consider for a particular procurement 
                      those suppliers of another 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 the list or of their 
                      removal from it; 
 
                 (h)  where, after publication of a notice in accordance 
                      with Article 1010, 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, on request of the 
                      supplier, promptly provide pertinent information 
                      concerning the entity's reasons for doing so. 
 
 
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            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, on request of another Party, to 
                      demonstrate that need; and 
 
                 (b)  endeavor to minimize differences in the qualification 
                      procedures of its entities. 
 
            4.   Nothing in paragraphs 2 and 3 shall prevent an entity from 
            excluding a supplier on grounds such as bankruptcy or false 
            declarations. 
 
 
            Article 1010:  Invitation to Participate 
 
            1.   Except as otherwise provided in Article 1016, an entity 
            shall publish an invitation to participate for all procurements 
            in accordance with paragraphs 2, 3 and 5, in the appropriate 
            publication referred to in Annex 1010.1. 
 
            2.   The invitation to participate shall take the form of a 
            notice of proposed procurement that 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 when such options may be 
                           exercised, and  
 
                      (ii) in the case of recurring contracts, an estimate 
                           of when the subsequent notices will be issued; 
 
                 (b)  a statement as to whether the procedure is open or 
                      selective and whether it will involve negotiation; 
 
                 (c)  any date for starting or completion of delivery of 
                      the 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 the 
                      application and the language or languages in which it 
                      may be submitted; 
 
 
 
 
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                 (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 or technical requirements 
                      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. 
 
            3.   Notwithstanding paragraph 2, an entity listed in Annex 
            1001.1a-2 or 1001.1a-3 may use as an invitation to participate 
            a notice of planned procurement that shall contain as much of 
            the information referred to in paragraph 2 as is available to 
            the entity, but that 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 
                      applications to be invited to tender; 
 
                 (c)  the address to which requests for documents relating 
                      to the procurement should be submitted; 
 
                 (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.   An 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 shall include at least the information referred 
            to in paragraph 2. 
 
 
 
 
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            5.   Notwithstanding paragraph 2, an entity listed in Annex 
            1001.1a-2 or 1001.1a-3 may use as an invitation to participate 
            a notice regarding a qualification system.  An entity that uses 
            such a notice shall, subject to the considerations referred to 
            Article 1015(8), 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 required for notices referred 
            to in paragraph 2.  Information provided to any interested 
            supplier shall be provided in a non-discriminatory manner to 
            all other interested suppliers. 
 
            6.   In the case of selective tendering procedures, an entity 
            that maintains a permanent list of qualified suppliers shall 
            publish annually in the appropriate publication referred to in 
            Annex 1010.1 a notice containing the following information: 
 
                 (a)  an enumeration of any such 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 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.   Where, 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 a supplier with respect to a 
            particular procurement shall be given simultaneously to all 
            other interested suppliers and sufficiently in advance so as to 
            provide all suppliers concerned adequate time to consider the 
            information and to respond. 
 
            8.   An entity shall indicate in the notices referred to in 
            this Article that the procurement is covered by this Chapter. 
 
 
 
 
 
 
 
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            Article 1011:  Selective Tendering Procedures 
 
            1.   To ensure optimum effective competition between the 
            suppliers of the Parties under selective tendering procedures, 
            an entity 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, an 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 a selection, the entity 
            shall provide for equitable opportunities for suppliers on the 
            list. 
 
            3.   Subject to Article 1009(2)(f), an entity shall allow a 
            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.   Where an entity does not invite or admit a supplier to 
            tender, the entity shall, on 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 shall: 
 
                 (a)  in prescribing a time limit, provide adequate time to 
                      allow suppliers of another Party to prepare and 
                      submit tenders before the closing of the tendering 
                      procedures; 
 
                 (b)  in determining a 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: 
 
 
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                 (a)  in open tendering procedures, the period for the 
                      receipt of tenders is no less than 40 days from the 
                      date of publication of a notice in accordance with 
                      Article 1010; 
 
                 (b)  in selective tendering 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 a notice in accordance with Article 
                      1010, 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 tendering 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, but where the date of initial issuance of 
                      invitations to tender does not coincide with the date 
                      of publication of a notice in accordance with Article 
                      1010, 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) 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)(a), 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 a notice in 
                      accordance with Article 1010; or 
 
                 (d)  where an entity listed in Annex 1001.1a-2 or 1001.1a- 
                      3 is using as an invitation to participate a notice 
                      referred to in Article 1010(5), 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 that shall be sufficiently 
 
 
 
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                      long to allow for responsive bidding and in any event 
                      shall be no less than 10 days. 
 
            4.   An entity shall, in establishing a 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 
            referred to in Article 1010(2), except for the information 
            required under Article 1010(2)(h).  The documentation shall 
            also include: 
 
                 (a)  the address of the entity to which tenders should be 
                      submitted; 
 
                 (b)  the address to which requests for supplementary 
                      information should be submitted; 
 
                 (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 tenders 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 or technical requirements 
                      and of any financial guarantees, information and 
                      documents required from suppliers; 
 
                 (g)  a complete description of the goods or services to be 
                      procured and any other requirements, 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 
 
 
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                      included in evaluating tender prices, such as 
                      transportation, insurance and inspection costs, and 
                      in the case of goods or services of another Party, 
                      customs duties and other import charges, taxes and 
                      the currency of payment; 
 
                 (i)  the terms of payment; and 
 
                 (j)  any other terms or conditions. 
 
            2.   An entity shall: 
 
                 (a)  forward tender documentation on the request of a 
                      supplier that is participating in open tendering 
                      procedures or has requested to participate in 
                      selective tendering 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 only: 
 
                 (a)  in the context of procurement in which the entity 
                      has, in a notice published in accordance with Article 
                      1010, indicated its intent to negotiate; or 
 
                 (b)  where it appears to the entity from the evaluation of 
                      the tenders that no one tender is obviously the most 
                      advantageous in terms of the specific evaluation 
                      criteria set out in the notices or tender 
                      documentation. 
 
            2.   An entity shall use negotiations primarily to identify the 
            strengths and weaknesses in the tenders. 
 
            3.   An entity shall treat all tenders in confidence.  In 
            particular, no entity may provide to any person information 
            intended to assist any supplier to bring its tender up to the 
            level of any other tender. 
 
            4.   No entity may, in the course of negotiations, discriminate 
            between suppliers.  In particular, an entity shall: 
 
 
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                 (a)  carry out any elimination of suppliers in accordance 
                      with the criteria set out in the notices and tender 
                      documentation; 
 
                 (b)  provide in writing all modifications to the criteria 
                      or 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 modified 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)  where 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 and conditions 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; 
 
 
 
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                 (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 administered in a manner that would 
                      result in discrimination between suppliers. 
 
            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.   No entity may 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 
            tendering procedures shall be received and opened under 
            procedures and conditions guaranteeing the regularity of the 
            opening of tenders.  The entity shall retain the information on 
            the opening of tenders.  The information shall remain at the 
            disposal of the competent authorities of the Party for use, if 
            required, under Article 1017, Article 1019 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 inquire 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 
 
 
                                         10-16  
 
 
 
 
 
 
  
 
 
 
 
 
                      fully capable of undertaking the contract and whose 
                      tender is either the lowest-priced tender or the 
                      tender determined to be the most advantageous in 
                      terms of the specific evaluation criteria set out in 
                      the notices or tender documentation; 
 
                 (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 this Chapter. 
 
            5.   No entity of a Party may 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 in the territory of 
            that Party. 
 
            6.   An entity shall: 
 
                 (a)  on request, promptly inform suppliers participating 
                      in tendering procedures of decisions on contract 
                      awards and, if so requested, inform them in writing; 
                      and 
 
                 (b)  on 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, the relevant characteristics 
                      and advantages of the tender selected and the name of 
                      the winning supplier. 
 
            7.   No later than 72 days after the award of a contract, an 
            entity shall publish a notice in the appropriate publication 
            referred to in Annex 1010.1 that 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-priced and 
                      lowest-priced tenders considered in the process of 
                      awarding the contract; and 
 
 
                                         10-17  
 
 
 
 
 
 
  
 
 
 
 
 
                 (f)  the tendering procedure used. 
 
            8.   Notwithstanding paragraphs 1 through 7, an entity may 
            withhold certain information on the award of a contract where 
            disclosure of the information: 
 
                 (a)  would impede law enforcement or otherwise be contrary 
                      to the public interest; 
 
                 (b)  would prejudice the legitimate commercial interest of 
                      a particular person; or 
 
                 (c)  might prejudice fair competition between suppliers. 
 
 
            Article 1016:  Limited Tendering Procedures 
 
            1.   An entity of a Party may, in the circumstances and subject 
            to the conditions set out in paragraph 2, use limited tendering 
            procedures and thus derogate from Articles 1008 through 1015, 
            provided that such limited tendering procedures are 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 procedures 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 where the tenders submitted 
                      either have resulted from collusion or do not conform 
                      to the essential requirements of the tender 
                      documentation, or where the tenders submitted come 
                      from suppliers that 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)  where, for works of art, or for reasons connected 
                      with the protection of patents, copyrights or other 
                      exclusive rights, or proprietary information or where 
                      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 where, for reasons 
                      of extreme urgency brought about by events 
 
 
                                         10-18  
 
 
 
 
 
 
  
 
 
 
 
 
                      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, where 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)  where 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.  Where 
                      such contracts have been fulfilled, subsequent 
                      procurement of goods or services shall be subject to 
                      Articles 1008 through 1015.  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, but does 
                      not include 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, 
                      such as unusual disposals by enterprises that are not 
                      normally suppliers or disposal of assets of 
                      businesses in liquidation or receivership, but not 
                      routine purchases from regular suppliers;  
 
                 (h)  for a contract to be awarded to the winner of an 
                      architectural design contest, on condition that the 
                      contest is 
 
                      (i)  organized in a manner consistent with the 
                           principles of this Chapter, including regarding 
                           publication of an invitation to suitably 
                           qualified suppliers to participate in the 
                           contest, 
 
 
 
 
                                         10-19  
 
 
 
 
 
 
  
 
 
 
 
 
                      (ii) organized with a view to awarding the design 
                           contract to the winner, and  
 
                      (iii)     to be judged by an independent jury; and 
 
                 (i)  where an entity needs to procure consulting services 
                      regarding matters of a confidential nature, the 
                      disclosure of which could reasonably be expected to 
                      compromise government confidences, cause economic 
                      disruption or similarly be contrary to the public 
                      interest. 
 
            3.   An entity shall prepare a report in writing on each 
            contract awarded by it under 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.  The entity shall retain each report.  They 
            shall remain at the disposal of the competent authorities of 
            the Party for use, if required, under Article 1017, Article 
            1019 or Chapter Twenty (Institutional Arrangements and Dispute 
            Settlement Procedures). 
 
 
                               Section C - Bid Challenge 
 
 
            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 procurement covered by this Chapter in 
            accordance with the following: 
 
                 (a)  each Party shall allow suppliers to submit bid 
                      challenges concerning any aspect of the procurement 
                      process, which for the purposes of this Article 
                      begins after an entity has decided on its procurement 
                      requirement and continues through 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 following an 
 
 
                                         10-20  
 
 
 
 
 
 
  
 
 
 
 
 
                      unsuccessful attempt at such a resolution, no Party 
                      may prevent the supplier from initiating a bid 
                      challenge or seeking any other relief; 
 
                 (e)  a Party may require a supplier to notify the entity 
                      on 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)  on receipt of a bid challenge, the reviewing 
                      authority shall expeditiously investigate the 
                      challenge; 
 
                 (i)  a Party may require its reviewing authority to limit 
                      its considerations to the challenge itself; 
 
                 (j)  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 the delay would be 
                      contrary to the public interest; 
 
                 (k)  the reviewing authority shall issue a recommendation 
                      to resolve the challenge, which may include directing 
                      the entity to re-evaluate offers, terminate or 
                      re-compete the contract in question; 
 
                 (l)  entities normally shall follow the recommendations of 
                      the reviewing authority; 
 
                 (m)  each Party should authorize its reviewing authority, 
                      following the conclusion of a bid challenge 
                      procedure, 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 this Chapter; 
 
                 (n)  the reviewing authority shall provide its findings 
                      and recommendations respecting bid challenges in 
 
 
                                         10-21  
 
 
 
 
 
 
  
 
 
 
 
 
                      writing and in a timely manner, and shall make them 
                      available to the Parties and interested persons; 
 
                 (o)  each Party shall specify in writing and shall make 
                      generally available all its bid challenge procedures; 
                      and 
 
                 (p)  each Party shall ensure that each of its entities 
                      maintains complete documentation regarding 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 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.  Where a Party imposes such a requirement, 
            the 10-working day period described in paragraph 1(f) shall 
            begin no earlier than the date that the notice is published or 
            the tender documentation is made available. 
 
 
                             Section D - General Provisions 
 
 
            Article 1018:  Exceptions 
 
            1.   Nothing in this Chapter 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  
 
 
                                         10-22  
 
 
 
 
 
 
  
 
 
 
 
 
                 (d)  relating to goods or services of handicapped persons, 
                      of philanthropic institutions or of prison labor. 
 
 
            Article 1019:  Provision of Information 
 
            1.   Further to Article 1802(1) (Publication), 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 referred to in Annex 1010.1. 
 
            2.   Each Party shall: 
 
                 (a)  on request, explain to another Party its government 
                      procurement procedures; 
 
                 (b)  ensure that its entities, on request from a supplier, 
                      promptly explain their procurement practices and 
                      procedures; and 
 
                 (c)  designate by January 1, 1994 one or more contact 
                      points to 
 
                      (i)  facilitate communication between the Parties, 
                           and 
 
                      (ii) answer, on request, all reasonable inquiries 
                           from other Parties to provide relevant 
                           information on matters covered by this Chapter. 
 
            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.  To this end, the Party of the 
            procuring entity shall provide information on the 
            characteristics and relative advantages of the winning tender 
            and the contract price.  Where release of this information 
            would prejudice competition in future tenders, the information 
            shall not be released by the requesting Party except after 
            consultation with and agreement of the Party that provided the 
            information. 
 
            4.   On request, each Party shall provide to another 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 may disclose confidential information the 
            disclosure of which would prejudice the legitimate commercial 
 
 
                                         10-23  
 
 
 
 
 
 
  
 
 
 
 
 
            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 an annual report in 
            accordance with the following reporting requirements, unless 
            the Parties otherwise agree: 
 
                 (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 
                      above the applicable threshold values, broken down by 
                      entities, by categories of goods or services 
                      established in accordance with classification systems 
                      developed under this Chapter and by the country of 
                      origin of the goods and services procured; 
 
                 (c)  statistics on the number and total value of contracts 
                      awarded under each use of the procedures referred to 
                      in Article 1016, broken down by entities, by 
                      categories of goods or services, and by country of 
                      origin of the goods and services procured; and 
 
                 (d)  statistics on the number and total value of contracts 
                      awarded under derogations to this Chapter set out in 
                      Annexes 1001.2a and 1001.2b, broken down by entities. 
 
            8.   Each Party may organize by state or province any portion 
            of a report referred to in paragraph 7 that pertains to 
            entities listed in Annex 1001.1a-3. 
 
 
            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, 
 
 
                                         10-24  
 
 
 
 
 
 
  
 
 
 
 
 
            information concerning training and orientation programs 
            regarding its government procurement system, and access on a 
            non-discriminatory basis to any program it conducts. 
 
            3.   The training and orientation programs referred to in 
            paragraph 2 include: 
 
                 (a)  training of government personnel directly involved in 
                      government procurement procedures; 
 
                 (b)  training of suppliers interested in pursuing 
                      government procurement opportunities; 
 
                 (c)  an explanation and description of specific elements 
                      of each Party's government procurement system, such 
                      as its bid challenge mechanism; and 
 
                 (d)  information about government procurement market 
                      opportunities. 
 
            4.   Each Party shall establish by January 1, 1994 at least one 
            contact point to provide information on the training and 
            orientation programs referred to in this Article. 
 
 
            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 not less than once 
            each 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 government 
                      procurement procedures; 
 
                 (b)  identification of small businesses interested in 
                      becoming trading partners of small businesses in the 
                      territory of another Party; 
 
                 (c)  development of data bases of small businesses in the 
                      territory of each Party for use by entities of 
                      another Party wishing to procure from small 
                      businesses;  
 
 
 
                                         10-25  
 
 
 
 
 
 
  
 
 
 
 
 
                 (d)  consultations regarding the factors that each Party 
                      uses in establishing its criteria for eligibility for 
                      any small business programs; and 
 
                 (e)  activities to address any related matter. 
 
 
            Article 1022:  Rectifications or Modifications 
 
            1.   A Party may modify its coverage under this Chapter only in 
            exceptional circumstances. 
 
            2.   Where a Party modifies 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 the appropriate Annex; and 
 
                 (c)  propose to the other Parties appropriate compensatory 
                      adjustments to its coverage in order to maintain a 
                      level of coverage comparable to that existing prior 
                      to the modification. 
 
            3.   Notwithstanding paragraphs 1 and 2, a Party may make 
            rectifications of a purely formal nature and minor amendments 
            to its Schedules to Annexes 1001.1a-1 through 1001.1b-3 and 
            Annexes 1001.2a and 1001.2b, provided that it notifies such 
            rectifications to the other Parties and its Section of the 
            Secretariat, and another Party does not object to such proposed 
            rectification within 30 days.  In such cases, compensation need 
            not be proposed. 
 
            4.   Notwithstanding any other provision of this Chapter, a 
            Party may undertake 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, compensation need not 
            be proposed.  No Party may undertake such reorganizations or 
            programs to avoid the obligations of this Chapter. 
 
            5.   Where a Party considers that: 
 
                 (a)  an adjustment proposed under paragraph (2)(c) is not 
                      adequate to maintain a comparable level of mutually 
                      agreed coverage, or 
 
 
 
 
                                         10-26  
 
 
 
 
 
 
  
 
 
 
 
 
                 (b)  a rectification or a minor amendment under paragraph 
                      3 or a reorganization under paragraph 4 does not meet 
                      the applicable requirements of those paragraphs and 
                      should require compensation, 
 
            the 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 covered by this Chapter. 
 
            2.   If, on the public offering of shares of an entity listed 
            in Annex 1001.1a-2, or through other methods, the entity is no 
            longer subject to federal government control, the Party may 
            delete the entity from its Schedule to that Annex, and withdraw 
            the entity from the coverage of this Chapter, on notification 
            to the other Parties and its Section of the Secretariat. 
 
            3.   Where 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 to the further 
            liberalization of their respective government procurement 
            markets.  
 
            2.   In such negotiations, the Parties shall review all aspects 
            of their government procurement practices for purposes of: 
 
                 (a)  assessing the functioning of their government 
                      procurement systems; 
 
                 (b)  seeking to expand the coverage of this Chapter, 
                      including by adding 
 
                      (i)  other government enterprises, and 
 
                      (ii) procurement otherwise subject to legislated or 
                           administrative exceptions; and 
 
                 (c)  reviewing thresholds. 
 
 
                                         10-27  
 
 
 
 
 
 
  
 
 
 
 
 
            3.   Prior to such review, the Parties shall endeavor to 
            consult with their state and provincial governments with a view 
            to obtaining commitments, on a voluntary and reciprocal basis, 
            to include within this Chapter procurement by state and 
            provincial government entities and enterprises. 
 
            4.   If the negotiations pursuant to Article IX:6(b) of the 
            GATT Agreement on Government Procurement ("the Code") are 
            completed prior to such review, 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 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, to 
            commence no later than one year after the date of entry into 
            force of this Agreement, on the subject of electronic 
            transmission. 
 
 
            Article 1025:  Definitions 
 
            1.  For purposes of this Chapter: 
 
            construction services contract means a contract for the 
            realization by any means of civil or building works listed in 
            Appendix 1001.1b-3-A; 
 
            entity means an entity listed in Annex 1001.1a-1, 1001.1a-2 or 
            1001.1a-3; 
 
            goods of another Party means goods originating in the territory 
            of another Party, determined in accordance with Article 1004; 
 
            international standard means "international standard", as 
            defined in Article 915 (Definitions - Standards-Related 
            Measures); 
 
            limited tendering procedures means procedures where an entity 
            contacts suppliers individually, only in the circumstances and 
            under the conditions specified in Article 1016; 
 
            locally established supplier includes a natural person resident 
            in the territory of the Party, an enterprise organized or 
 
 
 
                                         10-28  
 
 
 
 
 
 
  
 
 
 
 
 
            established under the Party's law, and a branch or 
            representative office located in the Party's territory; 
 
            open tendering procedures means those procedures under which 
            all interested suppliers may submit a tender; 
 
            selective tendering procedures means procedures under which, 
            consistent with Article 1011(3), those suppliers invited to do 
            so by an entity may submit a tender;  
 
            services includes construction services contracts, unless 
            otherwise specified; 
 
            standard means "standard", as defined in Article 915; 
 
            supplier means a person that has provided or could provide 
            goods or services in response to an entity's call for tender; 
 
            technical regulation means "technical regulation", as defined 
            in Article 915; 
 
            technical specification means a specification which lays down 
            goods characteristics or their related processes and production 
            methods, or services characteristics or their related operating 
            methods, including the applicable administrative provisions.  
            It may also include or deal exclusively with terminology, 
            symbols, packaging, marking or labelling requirements as they 
            apply to a good, process, or production or operating method; 
            and 
 
            tendering procedures means open tendering procedures, selective 
            tendering procedures and limited tendering procedures. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         10-29  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-1                                            
                _______________ 
 
 
                                    Annex 1001.1a-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 
 
 
                                         10-30  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-1                                            
                _______________ 
 
 
            41.  Department of Supply and Services (on its own account) 
            42.  Canadian General Standards Board 
            43.  Department of Transport (For purposes of 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.  Department of 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 
 
 
                                         10-31  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-1                                            
                _______________ 
 
 
            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 
 
 
                                   Schedule of Mexico 
 
            1.   Secretar a de Gobernaci n (Ministry of Government) 
                 -    Centro Nacional de Estudios Municipales (National 
                      Center for Municipal Studies)   
                 -    Comisi n Calificadora de Publicaciones y Revistas 
                      Ilustradas (Illustrated Periodicals and Publications 
                      Classification Commission) 
                 -    Consejo Nacional de Poblaci n (National Population 
                      Council) 
                 -    Archivo General de la Naci n (General Archives of the 
                      Nation) 
                 -    Instituto Nacional de Estudios Hist ricos de la 
                      Revoluci n Mexicana (National Institute of Historical 
                      Studies on the Mexican Revolution) 
                 -    Patronato de Asistencia para la Reincorporaci n 
                      Social (Social Reintegration Assistance Foundation) 
                 -    Centro Nacional de Prevenci n de Desastres (National 
                      Disaster Prevention Center) 
                 -    Consejo Nacional de Radio y Televisi n (National 
                      Radio and Television Council) 
                 -    Comisi n Mexicana de Ayuda a Refugiados (Mexican 
                      Commission on Refugee Assistance) 
            2.   Secretar a de Relaciones Exteriores (Ministry of Foreign 
                 Relations) 
                 -    Secci n Mexicana de la Comisi n Internacional de 
                      L mites y Aguas M xico-EEUU (Mexican Section of the 
 
 
                                         10-32  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-1                                            
                _______________ 
 
 
                      International Boundary and Water Commission, Mexico 
                      and the United States) 
                 -    Secci n Mexicana de la Comisi n Internacional de 
                      L mites y Aguas M xico-Guatemala  (Mexican Section of 
                      the International Boundary and Water Commission, 
                      Mexico and Guatemala) 
            3.   Secretar a de Hacienda y Cr dito P blico (Ministry Finance 
                 and Public Credit) 
                 -    Comisi n Nacional Bancaria (National Banking 
                      Commission) 
                 -    Comisi n Nacional de Valores (National Securities 
                      Commission) 
                 -    Comisi n Nacional de Seguros y Fianzas (National 
                      Insurance and Bonds Commission) 
                 -    Instituto Nacional de Estad stica, Geograf a e 
                      Inform tica (National Institute of Statistics, 
                      Geography, and Informatics) 
            4.   Secretar a de Agricultura y Recursos Hidr ulicos (Ministry 
                 of Agriculture and Water Resources) 
                 -    Instituto Mexicano de Tecnolog a del Agua (Mexican 
                      Institute of Water Technology) 
                 -    Instituto Nacional de Investigaciones Forestales y 
                      Agropecuarias (National Forestry and Agricultural 
                      Research Institute) 
                 -    Apoyos a Servicios a la Comercializaci n Agropecuaria 
                      (Aserca) (Support Services for Agricultural 
                      Marketing) 
            5.   Secretar a de Comunicaciones y Transportes (including the 
                 Instituto Mexicano de Comunicaciones and the Instituto 
                 Mexicano de Transporte) (Ministry of Communications and 
                 Transport, including the Mexican Institute of 
                 Communications and the Mexican Institute of 
                 Transportation) 
            6.   Secretar a de Comercio y Fomento Industrial (Ministry of 
                 Commerce and Industrial Development) 
            7.   Secretar a de Educaci n P blica (Ministry of Public 
                 Education) 
                 -    Instituto Nacional de Antropolog a e Historia 
                      (National Institute of Anthropology and History) 
                 -    Instituto Nacional de Bellas Artes y Literatura 
                      (National Institute of Fine Arts and Literature) 
                 -    Radio Educaci n (Radio Education) 
                 -    Centro de Ingenier a y Desarrollo Industrial 
                      (Engineering and Industrial Development Center) 
                 -    Consejo Nacional para la Cultura y las Artes 
                      (National Council for Culture and the Arts) 
                 -    Comisi n Nacional del Deporte (National Sports 
                      Commission) 
 
 
                                         10-33  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-1                                            
                _______________ 
 
 
            8.   Secretar a de Salud (Ministry of Health) 
                 -    Administraci n del Patrimonio de la Beneficencia 
                      P blica (Public Charity Fund 
                      Administration) 
                 -    Centro Nacional de la Transfusi n Sangu nea (National 
                      Blood Transfusion Center) 
                 -    Gerencia General de Biol gicos y Reactivos (Office of 
                      General Management for Biologicals and Reagents) 
                 -    Centro para el Desarrollo de la Infraestructura en 
                      Salud (Center for Infrastructural Development in 
                      Health) 
                 -    Instituto de la Comunicaci n Humana Dr. Andr s 
                      Bustamante Gurr a (Dr. Andr s Bustamante Gurr a 
                      Institute of Human Communication) 
                 -    Instituto Nacional de Medicina de la Rehabilitaci n 
                      (National Rehabilitative Medicine Institute) 
                 -    Instituto Nacional de Ortopedia (National Orthopedics 
                      Institute) 
                 -    Consejo Nacional para la Prevenci n y Control del 
                      S ndrome de la Inmunodeficiencia Adquirida, 
                      (Conasida) (National Council for the Prevention and 
                      Control of the Autoimmune Deficiency Syndrome) 
            9.   Secretar a del Trabajo y Previsi n Social (Ministry of 
                 Labor and Social Welfare) 
                 -    Procuradur a Federal de la Defensa del Trabajo 
                      (Office of the Federal Attorney for Labor Defense) 
            10.  Secretar a de la Reforma Agraria (Ministry of Agrarian 
                 Reform) 
                 -    Instituto de Capacitaci n Agraria (Institute of 
                      Agricultural Training) 
            11.  Secretar a de Pesca (Ministry of Fisheries) 
                 -    Instituto Nacional de la Pesca (National Institute of 
                      Fisheries) 
            12.  Procuradur a General de la Rep blica (Office of the 
                 Attorney General of the Republic) 
            13.  Secretar a de Energ a Minas e Industria Paraestatal 
                 (Ministry of Energy, Mines, and Parastatal Industry) 
                 -    Comisi n Nacional de Seguridad Nuclear y 
                      Salvaguardias (National Commission on Nuclear Safety 
                      and Safeguards) 
                 -    Comisi n Nacional para el Ahorro de Energ a (National 
                      Commission for Energy Conservation) 
            14.  Secretar a de Desarrollo Social (Ministry of Social 
                 Development) 
            15.  Secretar a de Turismo (Ministry of Tourism) 
            16.  Secretar a de la Contralor a General de La Federaci n 
                 (Ministry of the Comptroller General of the Federation) 
 
 
 
                                         10-34  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-1                                            
                _______________ 
 
 
            17.  Comisi n Nacional de Zonas Aridas (National Commission on 
                 Arid Zones) 
            18.  Comisi n Nacional de Libros de Texto Gratuito (National 
                 Commission on Free Textbooks) 
            19.  Comisi n Nacional de Derechos Humanos (National Commission 
                 on Human Rights) 
            20.  Consejo Nacional de Fomento Educativo (National 
                 Educational Development Council) 
            21.  Secretar a de la Defensa Nacional (Ministry of National 
                 Defense) 
            22.  Secretar a de Marina (Ministry of the Navy) 
 
            Note:     This Schedule covers the numbered entities and those 
            listed thereunder. 
 
 
                             Schedule of the United States 
 
            1.   Department of Agriculture (Not including procurement of 
                 agricultural goods 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 
                 goods of Mexico and Canada, suppliers of such goods, and 
                 service suppliers 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 goods of Canada, suppliers of such goods 
                 and service suppliers of Canada, this Chapter will apply 
                 to procurements by the Bureau of Reclamation of the 
                 Department of Interior only at such time as this Chapter 
                 applies to procurements by the Canadian provincial, not 
                 including local, 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 (For purposes of 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 (Not including national security 
                 procurements made in support of safeguarding nuclear 
                 materials or technology and entered into under the 
 
 
                                         10-35  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-1                                            
                _______________ 
 
 
                 authority of the Atomic Energy Act, and 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 (NASA) 
            16.  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.  Office of Thrift Supervision 
            28.  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.  Interstate 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.  Peace Corps 
            55.  National Archives and Records Administration 
            56.  Department of Defense, including the Army Corps of 
                 Engineers 
 
 
 
                                         10-36  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-2 
 
 
                                    Annex 1001.1a-2 
 
                                 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 Railway Company 
            6.   Via Rail Canada Inc. 
            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. 
 
 
            Note: 
 
            1.   For greater certainty, Article 1019(5) applies to 
            procurements by Canadian National Railway Company, St. Lawrence 
            Seaway Authority and Via Rail Canada Inc., respecting the 
            protection of the commercial confidentiality of information 
            provided. 
 
            2.   This Chapter does not apply to procurement by or on behalf 
            of the Royal Canadian Mint of direct inputs for use in minting 
            anything other than Canadian legal tender. 
 
            3.   With respect to the Canadian National Railway Company, 
            this Chapter applies to the procurement of goods, services and 
            construction services for its railway operations, subject to 
            any other exceptions in this Chapter. 
 
                                   Schedule of Mexico 
 
            Printing and Editorial 
 
            1.   Talleres Gr ficos de la Naci n (National Printers) 
            2.   Productora e Importadora de Papel, S.A. de C.V. (PIPSA) 
                 (Producer and Importer of Paper, S.A. de C.V.) 
 
            Communications and Transportation 
 
            3.   Aeropuertos y Servicios Auxiliares (ASA) (Airports and 
                 Auxillary Services) 
 
 
                                         10-37  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-2 
 
 
            4.   Caminos y Puentes Federales de Ingresos y Servicios 
                 Conexos (Capufe) (Federal Toll Roads and Bridges and 
                 Related Services) 
            5.   Servicio Postal Mexicano (Mexican Postal Service) 
            6.   Ferrocarriles Nacionales de M xico (Ferronales) (National 
                 Railways of Mexico) 
            7.   Telecomunicaciones de M xico (Telecom) (Telecommunications 
                 of Mexico) 
 
            Industry 
 
            8.   Petr leos Mexicanos (Pemex) (Mexican Petroleum) (Not 
                 including procurements of fuels or gas) 
            9.   Comisi n Federal de Electricidad (CFE) (Federal 
                 Electricity Commission) 
            10.  Consejo de Recursos Minerales (Mineral Resources Council) 
            11.  Consejo de Recursos Mineros (Mining Resources Council) 
 
            Commerce 
 
            12.  Compa  a Nacional de Subsistencias Populares (Conasupo)  
                 (National Company for Basic Commodities) (Not including 
                 procurements of agricultural goods made in furtherance of 
                 agricultural support programs or human feeding programs.) 
            13.  Bodegas Rurales Conasupo, S.A. de C.V. (Conasupo Rural 
                 Storage Facilities, S.A. de C.V) 
            14.  Distribuidora e Impulsora de Comercio, S.A. de C.V. 
                 (Diconsa) (Commercial Distributor and Trade Promotion S.A. 
                 de C.V.) 
            15.  Leche Industrializada Conasupo, S.A. de C.V. (Liconsa) 
                 (Conasupo Industrialized Milk, S.A. de C.V.) (Not 
                 including procurements of agricultural goods made in 
                 furtherance of agricultural support programs or human 
                 feeding programs.) 
            16.  Procuradur a Federal del Consumidor (Office of the Federal 
                 Attorney for Consumers) 
            17.  Instituto Nacional del Consumidor (National Consumer 
                 Institute) 
            18.  Laboratorios Nacionales de Fomento Industrial (National 
                 Industrial Development Laboratories) 
            19.  Servicio Nacional de Informaci n de Mercados (National 
                 Markets Information Service) 
 
            Social Security 
 
            20.  Instituto de Seguridad y Servicios Sociales de los 
                 Trabajadores del Estado (ISSSTE) (Social Security and 
                 Services Institute for Government Workers)  
 
 
                                         10-38  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-2 
 
 
            21.  Instituto Mexicano del Seguro Social (IMSS) (Mexican 
                 Social Security Institute) 
            22.  Sistema Nacional para el Desarrollo Integral de la Familia 
                 (DIF) (National System for Integrated Family Development) 
                 (Not including procurements of agricultural goods made in 
                 furtherance of agricultural support programs or human 
                 feeding programs.) 
            23.  Servicios Asistenciales de la Secretar a de Marina (Social 
                 Security Services of the Department of the Navy)  
            24.  Instituto de Seguridad Social para las Fuerzas Armadas 
                 Mexicanas (Social Security Institute for the Mexican Armed 
                 Forces)  
            25.  Instituto Nacional Indigenista (INI) (National Institute 
                 of Indian Peoples) 
            26.  Instituto Nacional Para la Educaci n de los Adultos 
                 (National Institute for Adult Education) 
            27.  Centros de Integraci n Juvenil (Youth Integration Centers) 
            28.  Instituto Nacional de la Senectud (National Institute on 
                 Old Age) 
 
            Others 
 
            29.  Comit  Administrador del Programa Federal de Construcci n 
                 de Escuelas (CAPFCE) (Administrative Committee of the 
                 School Construction Federal Program) 
            30.  Comisi n Nacional del Agua (CNA) (National Water 
                 Commission) 
            31.  Comisi n Para la Regularizaci n de la Tenencia de la 
                 Tierra (Commission for the Regularization of Land Tenure) 
            32.  Consejo Nacional de Ciencia y Tecnolog a (Conacyt) 
                 (National Science and Technology Council) 
            33.  Notimex, S.A. de C.V.  
            34.  Instituto Mexicano de Cinematograf a (Mexican Institute of 
                 Cinematography) 
            35.  Loter a Nacional para la Asistencia P blica (National 
                 Lottery for Public Assistance) 
            36.  Pron sticos Deportivos (Sports Lottery) 
 
 
 
                             Schedule of the United States 
 
            1.   Tennessee Valley Authority 
            2.   Bonneville Power Administration 
            3.   Western Area Power Administration 
            4.   Southeastern Power Administration 
            5.   Southwestern Power Administration 
            6.   Alaska Power Administration 
 
 
                                         10-39  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-2 
 
 
            7.   St. Lawrence Seaway Development Corporation 
 
            Note:     For goods of Canada, suppliers of such goods and 
                      service suppliers of Canada, this Chapter will apply 
                      to procurements by the authorities and power 
                      administrations listed as items 1 through 6 only at 
                      such time as this Chapter applies to the procurements 
                      by the Canadian provincial, not including local, 
                      hydro utilities. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         10-40  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1a-3                                            
                _______________ 
 
 
                                    Annex 1001.1a-3 
 
                        State and Provincial Government Entities 
 
 
                 Coverage under this Annex will be the subject of 
            consultations with state and provincial governments in 
            accordance with Article 1024. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         10-41  
 
 
 
 
 
 
  
 
 
 
 
 
                                                           Annex  1001.1b-1                                           
                ________________ 
 
 
                                    Annex 1001.1b-1 
 
                                         Goods 
 
                             Section A - General Provisions 
 
            1.   This Chapter applies to all goods, except to the extent 
            set out in paragraphs 2 through 5 and Section B. 
 
            2.   With respect to Canada, the goods listed in Section B 
            purchased by the Department of National Defence and the Royal 
            Canadian Mounted Police are included in the coverage of this 
            Chapter, subject to Article 1018(1). 
 
            3.   With respect to Mexico, the goods listed in Section B 
            purchased by the Secretar a de la Defensa Nacional and the 
            Secretar a de Marina are included in the coverage of this 
            Chapter, subject to the application of Article 1018(1). 
 
            4.   With respect to the United States, this Chapter will 
            generally apply to Department of Defense purchases of the FSC 
            categories listed in Section B subject to United States 
            Government determinations under Article 1018(1). 
 
            5.   This Chapter does not apply to the following purchases of 
            the U.S. Department of Defense:  
 
                 (a)  Federal Supply Classification (FSC) 83 - all elements 
                      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)  specialty 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 percent; silicon, 0.60 percent; or copper, 0.06 
                      percent; or which contains more than 0.25 percent of 
                      any of the following elements: aluminum, chromium, 
                      cobalt, columbium, molybdenum, 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 
 
 
 
                                         10-42  
 
 
 
 
 
 
  
 
 
 
 
 
                                                           Annex  1001.1b-1                                           
                ________________ 
 
 
                      excess of 10 percent; (3) titanium and titanium 
                      alloys; or (4) zirconium base alloys; 
                 (f)  FSC 19 and 20 - that part 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): 10, 
                      12, 13, 14, 15, 16, 17, 19, 20, 28, 31, 58, 59 and 
                      95. 
 
 
                           Section B - List of Certain Goods 
 
            (Numbers refer to the Federal Supply Classification code) 
 
            22.  Railway equipment  
            23.  Motor vehicles, trailers and cycles (except buses in 2310; 
                 and, for Canada and Mexico, except 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 (for Canada, 
                 except 4220: Marine life-saving and diving equipment; and 
                 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 
 
 
                                         10-43  
 
 
 
 
 
 
  
 
 
 
 
 
                                                           Annex  1001.1b-1                                           
                ________________ 
 
 
            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 (for Canada, except 
                 6615: Automatic pilot mechanisms and airborne Gyro 
                 components; and 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 (for Canada, 
                 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 (for Canada and Mexico, 
                 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 (Canada and United 
                 States only) 
            93.  Non-metallic fabricated materials 
            94.  Non-metallic crude materials 
            96.  Ores, minerals and their primary products (for Mexico, 
                 except 9620: minerals, natural and synthetic) 
            99.  Miscellaneous 
 
 
 
 
 
 
 
 
 
                                         10-44  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
                                    Annex 1001.1b-2 
 
                                        Services 
 
                             Section A - General Provisions 
 
            1.   This Chapter applies to all services that are procured by 
            the entities listed in Annex 1001.1a-1 and Annex 1001.1a-2, 
            subject to: 
 
                 (a)  paragraph 3 and Section B; and 
 
                 (b)  Appendix 1001.1b-2-A, for the Parties specified in 
                      that Appendix. 
 
            2.   Appendix 1001.1b-2-B sets out the Common Classification 
            System for the services procured by the entities of the 
            Parties.  The Parties shall use this System for reporting 
            purposes and shall update Appendix 1001.1b-2-B at such times as 
            they mutually agree. 
 
            3.   Annex 1001.1b-3 applies to contracts for construction 
                 services. 
 
 
                             Section B - Excluded Coverage 
 
                                   Schedule of Canada 
 
                                  Services Exclusions 
                               by Major Service Category 
 
            The following service contracts are excluded: 
 
 
            A.   Research and Development 
 
                      All Classes 
              
 
            B.   Special Studies and Analysis - not R&D  
 
            B002      Animal and fisheries studies 
            B003      Grazing and Range Studies 
            B507      Legal studies (Except Advisory Services on Foreign 
                 Law) 
            B503      Medical and health studies 
            B400      Aeronautic/Space Studies 
 
 
                                         10-45  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
 
            C.   Architecture and Engineering Services  
 
            C112      Airfield, Communication and Missile Facilities 
            C216      Marine architect and engineering services 
 
 
            D.   Information Processing and Related Telecommunications 
            Services  
 
            D304      ADP Telecommunications and Transmission Services, 
                      except those classified as "enhanced or value-added 
                      services" as defined in Article 1310 and that are 
                      expressly excluded from the reservations set out in 
                      Annex II, Schedule of Canada, II-C-3 or II-C-5.  For 
                      the purposes of this provision, the procurement of 
                      "ADP Telecommunications and Transmission services" 
                      does not include the ownership or furnishing of 
                      facilities for the transmission of voice or data 
                      services.    
 
            D305      ADP Teleprocessing and timesharing services 
            D309      Information and data broadcasting or data 
                      distribution services  
            D316      Telecommunications Network Management Services 
            D317      Automated News Service, Data Services, or Other 
                      Information Services.  Buying data, the electronic 
                      equivalent of books, periodicals, newspapers, etc. 
            D399      Other ADP and Telecommunications Services 
 
 
            F.        Natural Resources and Conservation Services  
 
            F004      Land Treatment Practices Services (plowing/clearing, 
                      etc). 
            F005      Range Seeding Services (ground equipment) 
            F006      Crop services inc. Seed Collection/Production 
                      Services  
            F007      Seedling Production/Transplanting Services 
            F011      Pesticides/Insecticides Support services 
            F010      Other Range/Forest Improvements services 
            F021      Veterinary/Animal Care services (inc. Livestock 
            services) 
            F029      Other Animal Care /Control services 
            F030      Fisheries Resources Management Services 
            F031      Fish Hatchery Services 
            F050      Recreation Site Maintenance services (non- 
            construction) 
 
 
                                         10-46  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            F059      Other natural resource and conservation services  
 
 
            G.        Health and Social Services 
 
                      All classes 
 
 
            H.        Quality Control, Testing and Inspection and Technical 
                 Representative Services  
 
                      Services for the Departments of Transport, 
                      Communications and Fisheries and Oceans respecting 
                      FSC 36 - (Special Industry Machinery), FSC 70 - 
                      (Automatic Data Processing Equipment, software 
                      supplies and support equipment) and FSC 74 (Office 
                      machines, text processing systems and visible record 
                      equipment). 
 
                      FSC 58 (Communications, Detection, and Coherent 
                      Radiation Equipment)  
 
                      Services with reference to transportation equipment. 
 
 
            J.   Maintenance, Repair, Modification, Rebuilding and 
                 Installation of Equipment (J) 
 
                      Services for the Departments of Transport, 
                      Communications and Fisheries and Oceans respecting 
                      FSC 36 - (Special Industry Machinery), FSC 70 - 
                      (Automatic Data Processing Equipment, software 
                      supplies and support equipment) and FSC 74 (Office 
                      machines, text processing systems and visible record 
                      equipment). 
 
                      FSC 58    (Communications, Detection, and Coherent 
                                Radiation Equipment)  
 
                      Services with reference to transportation equipment. 
 
            J019      Maintenance, Repair, Modification, Rebuilding and 
                      Installation of Equipment related to Ships 
 
            J998      Non-nuclear Ship Repair 
 
 
            K.        Custodial Operations and Related Services 
 
 
                                         10-47  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            K0        Personal care services 
            K105      Guard Services 
            K109      Surveillance services 
            K115      Preparation and Disposal of Excess and surplus 
            property 
 
 
            L.        Financial and Related Services 
 
                      All classes  
 
 
            M.        Operation of Government Owned Facilities 
 
                      All facilities operated by: 
                           The Department of Defence 
                           The Department of Transport 
                           The Department of Energy, Mines and Resources 
                      and for all Departments: 
                           M180 and M140 
 
 
            R.        Professional, Administrative and Management Support 
                      Services  
 
            R003      Legal services (Except Advisory Services on Foreign 
                      Law) 
            R004      Certifications and accreditations for products and 
                      institutions other than Educational Institutions 
            R007      Systems Engineering Services 1/ 
            R012      Patent and Trade Mark Services 
            R101      Expert Witness 
            R102      Weather Reporting/Observation services 
            R104      Transcription services 
            R106      Post Office services 
            R109      Translation and Interpreting services (inc. sign 
            language) 
            R113      Data Collection services 
            R114      Logistics Support Services  2/                      
            R116      Court Reporting Services 
            R117      Paper Shredding Services 
            R201      Civilian Personnel Recruitment 
                       (inc. Services of Employment Agencies) 
 
            1/ with reference to transportation systems 
            2/ with respect to transportation and defence 
 
 
 
 
                                         10-48  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            S.        Utilities  
 
                      All classes 
 
 
            T.        Communications, Photographic, Mapping, Printing and 
                      Publications Services  
 
                      All classes 
 
 
            U.        Education and Training Services  
 
            U010      Certifications and accreditations for Educational 
                      Institutions  
 
 
            V.        Transportation, Travel and Relocation Services  
 
                      All classes (except V503 Travel Agent Services [not 
                      including Tour Guides.])  
 
 
            W.        Lease or Rental of Equipment  
 
                      Services for the Departments of Transport, 
                      Communications and Fisheries and Oceans respecting 
                      FSC 36 - (Special Industry Machinery), FSC 70 - 
                      (Automatic Data Processing Equipment, software 
                      supplies and support equipment) and FSC 74 (Office 
                      machines, text processing systems and visible record 
                      equipment). 
 
                      FSC 58    (Communications, Detection, and Coherent 
                                Radiation Equipment)  
 
                      Services with reference to transportation equipment. 
 
            General Notes:   
 
                 1.   All services, with reference to those goods purchased 
                      by the Department of National Defence, the Royal 
                      Canadian Mounted Police and the Canadian Coast Guard 
                      which are not identified as subject to coverage by 
                      this chapter (Annex 1001.1b-1), will be exempt from 
                      the disciplines of the Chapter. 
 
 
 
 
                                         10-49  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
                 2.   All services purchased in support of military forces 
                      located overseas will be exempt from coverage by this 
                      chapter.   
 
                 3.   The General Notes as identified in Annex 1001.2b and 
                      Annex 1001.1b -3 will apply. 
 
                 4.   In the absence of agreed definitions for service 
                      classes under the proposed NAFTA classification 
                      system, and until such time as they are mutually 
                      agreed, Canada will continue to apply appropriate CPC 
                      definitions to identify classes which it considers 
                      exempt. 
 
 
                                   Schedule of Mexico 
 
 
            The following service contracts are excluded: 
 
            (Based on the United Nations Central Product Classification 
            (CPC))                                                      CPC 
 
            1.   All transportation services, including: 
 
                 -    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.   Public utilities services (including telecommunications, 
                 transmission, water or energy services) 
 
            3.   Management and operation contracts awarded to 
                 federally-funded research and development centers or 
                 related to carrying out government sponsored research 
                 programs 
 
            4.   Financial services 
 
            5.   Research and development services 
 
 
 
 
 
 
                                         10-50  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
                             Schedule of the United States 
 
                                   Service Exclusions 
                               by Major Service Category 
 
 
            A.        Research and Development 
 
                      All classes 
 
            D.        Information Processing and Related Telecommunications 
                      Services 
 
            D304      ADP Telecommunications and Transmission Services, 
                      except for those services classified as "enhanced or 
                      value-added services," as defined in Article 1310 and 
                      that are expressly excluded from the reservation set 
                      out in Annex II, Schedule of the United States, II-U- 
                      3 or II-U-5.  For the purposes of this provision, the 
                      procurement of "ADP Telecommunications and 
                      Transmission services" does not include the ownership 
                      or furnishing of facilities for the transmission of 
                      voice or data services. 
 
            D305      ADP Teleprocessing and Timesharing Services 
            D316      Telelcommunications Network Management Services 
            D317      Automated News Services, Data Services or Other 
            Information Services 
            D399      Other ADP and Telecommunications Services 
 
 
            J.        Maintenance, Repair, Modification, Rebuilding and 
                      Installation of Equipment 
 
            J019      Maintenance, Repair, Modification, Rebuilding and 
                      Installation of Equipment Related to Ships 
 
            J998      Non-nuclear Ship Repair 
 
 
            M.        Operation of Government-Owned Facilities 
 
                      All facilities operated by the Department of Defense, 
                      Department of Energy and the National Aeronautics and 
                      Space Administration; and for all entities: 
 
            M181      Government-Owned Contractor Operated R&D Facilities 
            M182      Government-Owned-Operated R&D Facilities 
 
 
                                         10-51  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            M183      Government-Owned Contractor Operated Environmental 
                      Laboratories 
            M184      Government-Owned Operated Environmental Laboratories 
 
 
            S.        Utilities 
 
                      All Classes 
 
 
            V.        Transportation, Travel and Relocation Services 
 
                      All Classes except V503 Travel Agent Services 
 
            Notes: 
 
                 1.   All services purchased in support of military forces 
                      overseas will be excluded from coverage by this 
                      Chapter. 
 
                 2.   For services of Canada, suppliers of such services of 
                      Canada, this Chapter will apply to procurements by 
                      the authorities and the power administrations listed 
                      as items 1 through 6 in the U.S. Schedule in Annex 
                      1001.1a-2 (Government Enterprises) and to 
                      procurements by the Bureau of Reclamation of the 
                      Department of Interior only at such time as this 
                      Chapter applies to the procurements by the Canadian 
                      provincial, not including local, hydro utilities.   
 
                                  Appendix 1001.1b-2-A 
 
                       Temporary Schedule of Services for Mexico 
 
            1.   Until Mexico has completed its Schedule to Section B of 
            Annex 1001.1b-2, pursuant to paragraph 2, this Chapter applies 
            only in respect of the services set out in the Temporary 
            Schedule. 
 
            2.   Mexico shall develop and, after consultations with the 
            other Parties, complete its list of services set out in its 
            Schedule to Section B of Annex 1001.1b-2 no later than July 1, 
            1995. 
 
            3.   When Mexico completes its list pursuant to paragraph 2, 
            each Party may, after consultation with the other Parties, 
            review and revise its Schedule to Section B to Annex 1001.1b-2. 
 
 
 
                                         10-52  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
                                   Temporary Schedule 
 
            Based on the United Nations Central Product Classification 
            (CPC) 
 
            CPC  Professional Services 
            863  Taxation services (excluding legal services) 
                 Architectural services 
                 86711     Advisory and pre-design architectural services 
                 86712     Architectural design services 
                 86713     Contract administration services 
                 86714     Combined architectural design and contract 
                           administration services 
                 86719     Other architectural services 
                 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 
                 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  
 
 
                                         10-53  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            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 
                 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  
                 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 
            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 
 
 
                                         10-54  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
                 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  Food services 
            643  Beverage serving services 
 
            Travel agency and tour operators services 
            7471 Travel agency and tour operator services 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         10-55  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
                                  Appendix 1001.1b-2-B 
 
                              Common Classification System 
 
                                        Services 
 
            Notes: 
 
            1.   It is understood that the Parties will continue to work on 
            the development of definitions related to the categories and 
            other ongoing enhancements to the Classification System. 
 
            2.   The Parties will continue to review outstanding technical 
            issues that may arise from time to time. 
 
            3.   This common classification system follows the format 
                 described below: 
 
                 Group = one digit 
 
                 Sub-group = two digit 
 
                 Class = four digit 
 
 
            A - Research and Development 
 
                 Definition of research and development contracts: 
 
                 Procurement of research and development services include 
                 the acquisition of specialized expertise for the purposes 
                 of increasing knowledge in science; applying increased 
                 scientific knowledge or exploiting the potential of 
                 scientific discoveries and improvements in technology to 
                 advance the state of art; and systematically  using 
                 increases in scientific knowledge and advances in state of 
                 art to design, develop, test, or evaluate new products or 
                 services. 
 
            R&D Codes: 
 
                 The R&D code is composed of two alphabetic digits.  The 
                 first digit is always the letter "A" to identify R&D, the 
                 second digit is alphabetic "A to Z" to identify the major 
                 sub-group. 
 
            Code   Descriptions 
 
 
 
                                         10-56  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            AA   Agriculture 
            AB   Community Services and Development 
            AC   Defense Systems 
            AD   Defense - Other 
            AE   Economic Growth and Productivity 
            AF   Education 
            AG   Energy 
            AH   Environmental Protection 
            AJ   General Science and Technology 
            AK   Housing 
            AL   Income Security 
            AM   International Affairs and Cooperation 
            AN   Medical 
            AP   Natural Resources 
            AQ   Social Services 
            AR   Space 
            AS   Transportation - Modal 
            AT   Transportation - General 
            AV   Mining Activities 
            AZ   Other Research and Development 
 
 
            B - Studies and Analysis - (not R&D) 
 
                 Definition of studies and analysis: 
 
                 Procurement of special studies and analyses are organized, 
                 analytic assessments that provide insights for 
                 understanding complex issues or improving policy 
                 development or decision making.  Output obtained in such 
                 acquisitions is a formal, structured document including 
                 data or other information that form the basis for 
                 conclusions or recommendations. 
 
            B0   Natural Sciences 
 
            B000 Chemical/Biological Studies and Analyses 
            B001 Endangered Species Studies - Plant and Animal 
            B002 Animal and Fisheries Studies 
            B003 Grazing/Range Studies 
            B004 Natural Resource Studies 
            B005 Oceanological Studies 
            B009 Other Natural Sciences Studies 
 
            B1   Environmental Studies 
 
            B100 Air Quality Analyses 
            B101 Environmental Studies Development of Environmental Impact 
 
 
                                         10-57  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
                 Statements and Assessments 
            B102 Soil Studies 
            B103 Water Quality Studies 
            B104 Wildlife Studies 
            B109 Other Environmental Studies 
 
            B2   Engineering Studies 
 
            B200 Geological Studies  
            B201 Geophysical Studies 
            B202 Geotechnical Studies 
            B203 Scientific Data Studies 
            B204 Seismological Studies 
            B205 Building Technology Studies 
            B206 Energy Studies 
            B207 Technology Studies 
            B208 Housing and Community Development Studies (incl. 
                 Urban/Town Planning Studies) 
            B219 Other Engineering Studies 
 
            B3   Administrative Support Studies 
 
            B300 Cost Benefit Analyses 
            B301 Data Analyses (other than scientific) 
            B302 Feasibility Studies (non-construction) 
            B303 Mathematical/Statistical Analyses 
            B304 Regulatory Studies 
            B305 Intelligence Studies 
            B306 Defense Studies 
            B307 Security Studies (Physical and Personal) 
            B308 Accounting/Financial Management Studies 
            B309 Trade Issue Studies 
            B310 Foreign Policy/National Security Policy Studies 
            B311 Organization/Administrative/Personnel Studies 
            B312 Mobilization/Preparedness Studies 
            B313 Manpower Studies 
            B314 Acquisition Policy/Procedures Studies 
            B329 Other Administrative Support Studies 
 
            B4   Space Studies 
 
            B400 Aeronautic/Space Studies 
 
            B5   Social Studies and Humanities 
 
            B500 Archeological/Paleontological Studies 
            B501 Historical Studies 
            B502 Recreation Studies 
 
 
                                         10-58  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            B503 Medical and Health Studies 
            B504 Educational Studies and Analyses 
            B505 Elderly/Handicapped Studies 
            B506 Economic Studies 
            B507 Legal Studies 
            B509 Other Studies and Analyses 
 
            C  - Architect and Engineering Services 
 
            C1 - Architect and Engineering Services - Related To 
            Construction 
 
            C11  Building and Facility Structures 
 
            C111 Administrative and Service Buildings 
            C112 Airfield, Communication and Missile Facilities 
            C113 Educational Buildings 
            C114 Hospital Buildings 
            C115 Industrial Buildings 
            C116 Residential Buildings 
            C117 Warehouse Buildings 
            C118 Research and Development Facilities 
            C119 Other Buildings 
 
            C12  Non-Building Structures 
 
            C121 Conservation and Development 
            C122 Highways, Roads, Streets, Bridges and Railways 
            C123 Electric Power Generation (EPG) 
            C124 Utilities 
            C129 Other Non-Building Structures 
            C130 Restoration 
 
            C2 - Architect and Engineering Services - Not Related to 
            Construction 
 
            C211 Architect - Engineer Services (incl. landscaping, interior 
            layout and designing) 
            C212 Engineering Drafting Services 
            C213 A&E Inspection Services  
            C214 A&E Management Engineering Services 
            C215 A&E Production Engineering Services (incl. Design and 
                 Control and Building Programming) 
            C216 Marine Architect and Engineering Services 
            C219 Other Architect and Engineering Services 
 
 
 
 
 
                                         10-59  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            D - Information Processing and Related Telecommunications 
            Services 
 
            D301 ADP Facility Operation and Maintenance Services 
            D302 ADP Systems Development Services 
            D303 ADP Data Entry Services 
            D304 ADP Telecommunications and Transmission Services 
            D305 ADP Teleprocessing and Timesharing Services 
            D306 ADP Systems Analysis Services 
            D307 Automated Information System Design and Integration 
            Services 
            D308 Programming Services 
            D309 Information and Data Broadcasting or Data Distribution 
            Services 
            D310 ADP Backup and Security Services 
            D311 ADP Data Conversion Services 
            D312 ADP Optical Scanning Services  
            D313 Computer Aided Design/Computer Aided Manufacturing 
            (CAD/CAM) Services 
            D314 ADP System Acquisition Support Services (Includes 
                 preparation of statement of work, 
                 benchmarks,specifications, etc.) 
            D315 Digitizing Services (Includes cartographic and geographic 
            information) 
            D316 Telecommunications Network Management Services 
            D317 Automated News Services, Data Services, or Other 
                 Information Services.  Buying data (the electronic 
                 equivalent of books, periodicals, newspapers, etc.) 
            D399 Other ADP and Telecommunications Services (incl. data 
                 storage on tapes, Compact Disk (CD), etc. 
 
 
            E - Environmental Services 
 
            E101 Air Quality Support Services 
            E102 Industrial Investigation Surveys and Technical Support 
                 Related to Air Pollution 
            E103 Water Quality Support Services 
            E104 Industrial Investigation Surveys and Technical Support 
                 Related to Water Pollution 
            E106 Toxic Substances Support Services 
            E107 Hazardous Substance Analysis 
            E108 Hazardous Substance Removal, Cleanup, and Disposal 
                 Services and Operational Support 
            E109 Leaking Underground Storage Tank Support Services 
            E110 Industrial Investigations, Surveys and Technical Support 
                 for Multiple Pollutants 
 
 
 
                                         10-60  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            E111 Oil Spill Response including Cleanup, Removal, Disposal 
                 and Operational Support 
            E199 Other Environmental Services 
 
 
            F - Natural Resources Services 
 
            F0   Agriculture and Forestry Services 
 
            F001 Forest/Range Fire Suppression/Presuppression Services 
                 (incl. Water Bombing) 
            F002 Forest/Range Fire Rehabilitation Services 
            (non-construction) 
            F003 Forest Tree Planting Services 
            F004 Land Treatment Practices Services (plowing/clearing, etc.) 
            F005 Range Seeding Services (ground equipment) 
            F006 Crop Services (incl. Seed Collection and  Production 
            Services) 
            F007 Seedling Production/Transplanting Services 
            F008 Tree Breeding Services (incl. ornamental shrub) 
            F009 Tree Thinning Services 
            F010 Other Range/Forest Improvements Services 
            (non-construction) 
            F011 Pesticides /Insecticides Support Services 
 
            F02  Animal Care / Control Services 
 
            F020 Other Wildlife Management Services 
            F021 Veterinary/Animal Care Services (incl. Livestock Services) 
            F029 Other Animal Care/Control Services 
 
            F03  Fisheries and Ocean Services 
 
            F030 Fisheries Resources Management Services 
            F031 Fish Hatchery Services 
 
            F04  Mining 
 
            F040 Surface Mining Reclamation Services (non-construction) 
            F041 Well Drilling 
            F042 Other Services Incidental to Mining Except Those Listed in 
            F040 and F041 
 
            F05  Other Natural Resources Services 
 
            F050 Recreation Site Maintenance Services (non-construction) 
            F051 Survey Line Clearing Services 
            F059 Other Natural Resources and Conservation Services 
 
 
                                         10-61  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
 
            G - Health and Social Services  
 
            G0   Health Services 
 
            G001 Health Care  
            G002 Internal Medicine 
            G003 Surgery 
            G004 Pathology 
            G009 Other Health Services 
 
            G 1  Social Services 
 
            G100 Care of Remains and/or Funeral Services 
            G101 Chaplain Services 
            G102 Recreational Services (incl. Entertainment Services) 
            G103 Social Rehabilitation Services 
            G104 Geriatric Services 
            G199 Other Social Services 
 
 
            H - Quality Control, Testing, Inspection and Technical 
            Representative Services 
 
            HO   Technical Representative Services  
 
            Hl   Quality Control Services 
 
            H2   Equipment and Materials Testing 
 
            H3   Inspection Services (incl. commercial testing and 
                 Laboratory Services,Except Medical/Dental) 
 
            H9   Other Quality Control, Testing, Inspection and 
            TechnicalRepresentative  Services 
 
 
            J - Maintenance, Repair, Modification, Rebuilding and 
            Installation of Goods/Equipment 
 
            JO   Maintenance, Repair, Modification, Rebuilding  and 
                 Installation of  Goods/Equipment; includes as examples:   
 
                 1. Textile Finishing, Dying and Printing 
                 2.  Welding services not related to Construction. 
                       (see  CPC 5155 for Construction Welding) 
 
 
 
 
                                         10-62  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            J998 Non-nuclear Ship Repair (including overhauls and 
                 conversions)  
 
 
            K - Custodial Operations and Related Services 
 
            K0   Personal Care Services (incl. services such as Barber and 
                 Beauty Shop, Shoe Repairs and Tailoring etc.) 
 
            K1   Custodial Services 
 
            K100 Custodial - Janitorial Services 
            K101 Fire Protection Services 
            K102 Food Services 
            K103 Fueling and Other Petroleum Services - Excluding Storage 
            K104 Trash/Garbage Collection Services - Including Portable 
                 Sanitation Services 
            K105 Guard Services 
            K106 Insect and Rodent Control Services 
            K107 Landscaping/Groundskeeping Services 
            K108 Laundry and Dry Cleaning Services 
            K109 Surveillance Services 
            K110 Solid Fuel Handling Services 
            K111 Carpet Cleaning 
            K112 Interior Plantscaping 
            K113 Snow Removal/Salt Service (also spreading aggregate or 
                 other snow meltings material) 
            K114 Waste Treatment and Storage 
            K115 Preparation and Disposal of Excess and Surplus Property 
            K116 Other Salvage Services 
            K199 Other Custodial and Related Services 
 
            L - Financial and Related Services 
 
            L000 Government Life Insurance Programs 
            L001 Government Health Insurance Programs 
            L002 Other Government Insurance Programs 
            L003 Non-Government Insurance Programs 
            L004 Other Insurance Services 
            L005 Credit Reporting Services 
            L006 Banking Services 
            L007 Debt Collection Services 
            L008 Coin Minting 
            L009 Banknote Printing 
            L099 Other Financial Services 
 
 
            M - Operation of Government - Owned Facilities 
 
 
                                         10-63  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            M110 Administrative Facilities and Service Buildings  
            M120 Airfield,  Communications, and Missile Facilities 
            M130 Educational Buildings 
            M140 Hospital Buildings 
            M150 Industrial Buildings  
            M160 Residential Buildings 
            M170 Warehouse Buildings 
            M180 Research and Development Facilities 
            M190 Other Buildings 
            M210 Conservation and Development Facilities 
            M220 Highways, Roads, Streets, Bridges and Railways 
            M230 Electric Power Generation (EPG) Facilities 
            M240 Utilities 
            M290 Other Non-Building Facilities 
 
 
            R - Professional, Administrative and Management Support 
            Services 
 
            R0   Professional Services 
 
            R001 Specifications Development Services 
            R002 Technology Sharing/Utilization Services 
            R003 Legal Services 
            R004 Certifications and Accreditations for products and 
                 institutions other than Educational Institutions 
            R005 Technical Assistance 
            R006 Technical Writing Services 
            R007 Systems Engineering Services 
            R008 Engineering and Technical Services (incl. Mechanical, 
                 Electrical, Chemical, Electronic Engineering) 
            R009 Accounting  Services 
            R010 Auditing Services 
            R011 Ongoing Audit Operations Support 
            R012 Patent and Trade Mark Services 
            R013 Real Property Appraisals Services 
            R014 Operations Research Studies / Quantitative Analysis 
            Studies 
            R015 Simulation 
            R016 Personal Services Contracts 
            R019 Other Professional Services 
 
            R1   Administrative and Management Support Services 
 
            R100 Intelligence Services 
            R101 Expert Witness 
            R102 Weather Reporting/Observation Services 
            R103 Courier and Messenger Services 
 
 
                                         10-64  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            R104 Transcription Services 
            R105 Mailing and Distribution Services (Excluding Post Office 
            Services) 
            R106 Post Office Services 
            R107 Library Services 
            R108 Word Processing/Typing Services 
            R109 Translation and Interpreting Services (Including Sign 
            Language) 
            R110 Stenographic Services 
            R111 Personal Property Management Services 
            R112 Information Retrieval (non-automated) 
            R113 Data Collection Services 
            R114 Logistics Support Services 
            R115 Contract, Procurement, and Acquisition Support Services 
            R116 Court Reporting Services 
            R117 Paper Shredding Services 
            R118 Real Estate  Brokerage Services 
            R119 Industrial Hygienics 
            R120 Policy Review/Development Services 
            R121 Program Evaluation Studies 
            R122 Program Management/Support Services 
            R123 Program Review/Development Services 
            R199 Other Administrative and Management Support Services 
 
            R2   Personnel Recruitment 
 
            R200 Military Personnel Recruitment 
            R201 Civilian Personnel Recruitment (incl. Services of 
            Employment Agencies) 
 
 
            S - Utilities 
 
            S000 Gas Services 
            S001 Electric Services 
            S002 Telephone and/or Communications Services (incl. Telegraph, 
                 Telex and Cablevision Service) 
            S003 Water Services 
            S099 Other Utilities 
 
 
            T - Communications, Photographic, Mapping, Printing and 
            Publication Services 
 
            T000 Communications Studies 
            T001 Market Research and Public Opinion Services (Formerly 
                 Telephone and Field Interview Services incl. Focus 
                 testing, Syndicated and attitude Surveys) 
 
 
                                         10-65  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            T002 Communications Services (incl. exhibit Services) 
            T003 Advertising Services 
            T004 Public Relations Services (incl. Writing Services, Event 
                 Planning and Management, Media Relations, Radio and TV 
                 Analysis, Press Services) 
            T005 Arts/Graphics Services 
            T006 Cartography Services 
            T007 Charting Services 
            T008 Film Processing Services 
            T009 Film/Video Tape Production Services 
            T010 Microfiche Services 
            T011 Photogrammetry Services 
            T012 Aerial Photographic Services 
            T013 General Photographic Services - Still 
            T014 Print/Binding Services 
            T015 Reproduction Services 
            T016 Topography Services 
            T017 General Photographic Services - Motion 
            T018 Audio/Visual Services 
            T019 Land Surveys, Cadastral Services (non-construction) 
            T099 Other Communication, Photographic, Mapping, Printing and 
                 Publication Services 
 
 
            U - Educational and Training Services 
 
            U001 Lectures For Training 
            U002 Personnel Testing 
            U003 Reserve Training (Military) 
            U004 Scientific and Management Education 
            U005 Tuition, Registration, and Membership Fees 
            U006 Vocational/Technical 
            U007 Faculty Salaries for Schools Overseas 
            U008 Training/Curriculum Development 
            U009 Informatics Training 
            U010 Certifications and Accreditations for Educational 
            Institutions 
            U099 Other Education and Training Services 
 
 
            V - Transporation, Travel and Relocation Services 
 
            V0   Land Transport Services 
 
            V000 Motor Pool Operations 
            V001 Motor Freight 
            V002 Rail Freight 
            V003 Motor Charter for Things 
 
 
                                         10-66  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
            V004 Rail Charter for Things 
            V005 Motor Passenger Service 
            V006 Rail Passenger Service 
            V007 Passenger Motor Charter Service 
            V008 Passenger Rail Charter Service 
            V009 Ambulance Service 
            V010 Taxicab Services 
            V011 Security Vehicle Service 
 
            V1   Water Transport Services 
 
            V100 Vessel Freight 
            V101 Marine Charter for Things 
            V102 Marine Passenger Service 
            V103 Passenger Marine Charter Service 
 
            V2   Air Transport Services 
 
            V200 Air Freight 
            V201 Air Charter for Things 
            V202 Air Passenger Service 
            V203 Passenger Air Charter Service 
            V204 Specialty air Services including Aerial Fertilization, 
            Spraying  and Seeding 
 
            V3   Space Transportation and Launch Services 
 
            V4   Other Transport Services 
 
            V401 Other Transportation Travel and Relocation Services 
            V402 Other Cargo and Freight Services 
            V403 Other Vehicle Charter for Transportation of Things 
 
            V5   Supporting and Auxiliary Transport Services 
 
            V500 Stevedoring 
            V501 Vessel Towing Service 
            V502 Relocation Services 
            V503 Travel Agent Services 
            V504 Packing/Crating Services 
            V505 Warehousing and Storage Services 
            V506 Salvage of Marine Vessels 
            V507 Salvage of Aircraft 
            V508 Navigational Aid and Pilotage Services 
 
            W - Lease and Rental of Equipment 
 
            WO   Lease or Rental of Equipment 
 
 
                                         10-67  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         10-68  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-3 
 
 
                                    Annex 1001.1b-3 
 
                                 Construction Services 
 
 
                             Section A - General Provisions 
 
            1.   This Chapter applies to all construction services set out 
            in Appendix 1001.1b-3-A, except those listed in Section B, that 
            are procured by the entities listed in Annex  
            1001.1a-1 and 1001.1a-2. 
 
            2.   The Parties shall update Appendix 1001.1b-3-A at such 
            times as they mutually agree. 
 
 
                             Section B - Excluded Coverage 
 
                                   Schedule of Canada 
 
            The following services contracts are excluded: 
 
            1.   Dredging 
 
            2.   Construction contracts tendered by or on behalf of 
                 Department of Transport 
 
 
 
                             Schedule of the United States 
 
            The following services contracts are excluded: 
 
            Dredging 
 
            Note:     In accordance with this Chapter, buy national 
                      requirements on articles, supplies and materials 
                      acquired for use in construction contracts covered by 
                      this Chapter shall not apply to goods of Canada or 
                      Mexico. 
 
 
 
 
 
 
 
 
 
 
                                         10-69  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-3 
 
 
                                  Appendix 1001.1b-3-A 
 
 
                              Common Classification System 
 
                                Construction Work Codes 
 
            Note:     Based on the United Nations Central Product 
                      Classification (CPC) Division 51. 
 
            Definition of Construction work: 
 
                 Pre-erection work; new construction and repair, 
                 alteration, restoration and maintenance work on 
                 residential buildings, non-residential buildings or civil 
                 engineering works.  This work can be carried out either by 
                 general contractors who do the complete construction work 
                 for the owner of the project, or on own account; or by 
                 subcontracting parts of the construction work to 
                 contractors specializing, e.g., in installation work, 
                 where the value of work done by subcontractors becomes 
                 part of the main contractor s work.  The products 
                 classified here are services which are essential in the 
                 production process of the different types of 
                 constructions, the final output of construction 
                 activities. 
 
 
            Code Descriptions 
 
            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 (except for mining of oil 
                 and gas which is classified under FO42) 
            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 
 
 
                                         10-70  
 
 
 
 
 
 
  
 
 
 
 
 
                                                            Annex 1001.1b-3 
 
 
            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 ,subways and 
                 railroads 
            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 
            5138 Dredging Services 
            5139 For engineering works n.e.c. 
 
            514  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 Glazing work and window glass installation work 
            5172 Plastering work 
            5173 Painting work 
            5174 Floor and wall tiling work 
 
 
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                                                            Annex 1001.1b-3 
 
 
            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  Renting services related to equipment for construction or 
                 demolition of buildings or civil engineering works, with 
                 operator. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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                                                              Annex 1001.1c 
 
 
                                     Annex 1001.1c 
 
                        Indexation and Conversion of Thresholds 
 
            1.   The calculations referred to in Article 1001(1)(c) (Scope 
            and Coverage) shall be made in accordance with the following: 
 
                 (a)  the U.S. inflation rate shall be measured by the 
                      Producer Price Index for Finished Goods published by 
                      the U.S. Bureau of Labor Statistics; 
 
                 (b)  the first adjustment for inflation, to take effect on 
                      January 1, 1996, shall be calculated using the period 
                      from November 1, 1993 through October 31, 1995; 
 
                 (c)  all subsequent adjustments shall be calculated using 
                      two-year periods, each period beginning November 1, 
                      and shall take effect on January 1 of the year 
                      immediately following the end of the two-year period; 
 
                 (d)  the United States shall notify the other Parties of 
                      the adjusted threshold values no later than November 
                      16 of the year before the adjustment takes effect; 
                      and 
 
                 (e)  the inflationary adjustment shall be estimated 
                      according to the following formula 
 
                                   T0 x (1+  i) = T1 
 
                      T0=  threshold value at base period 
                       i=  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 set out in Article 1001(1)(c) into their 
            national currencies using the conversion formula 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 no 
            later than one month before the respective thresholds take 
            effect. 
 
            3.   Canada shall base its 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 dollar in terms of 
 
 
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                                                              Annex 1001.1c 
 
 
            the U.S. dollar over the period October 1, 1992 through 
            September 30, 1993.  For each subsequent two-year period 
            beginning January 1, 1996, its 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 Bank of Mexico 
            ("Banco de M xico").  Its conversion rate shall be the existing 
            value of the Mexican peso in terms of the U.S. dollar as of 
            December 1 and June 1 of each year, or the first working day 
            thereafter.  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. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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                                                              Annex 1001.2a 
 
 
                                     Annex 1001.2a 
 
                           Transitional Provisions for Mexico 
 
 
            Notwithstanding any other provision of this Chapter, Annexes 
            1001.1a-1 through 1001.1b-3 are subject to the following:  
 
            Pemex, CFE and Non-Energy Construction 
 
            1.   Mexico may set aside from the obligations of this Chapter 
            for a calendar year set out in paragraph 2 the percentage 
            specified in that paragraph of: 
 
                 (a)  the total value of procurement contracts for goods 
                      and services and any combination thereof and 
                      construction services procured by Pemex in the year 
                      that are above the thresholds set out in Article 
                      1001(1)(c); 
 
                 (b)  the total value of procurement contracts for goods 
                      and services and any combination thereof and 
                      construction services procured by CFE in the year 
                      that are above the thresholds set out in Article 
                      1001(1)(c); and 
 
                 (c)  the total value of procurement contracts for 
                      construction services procured in the year that are 
                      above the thresholds set out in Article 1001(1)(c), 
                      excluding procurement contracts for construction 
                      services procured by Pemex and CFE. 
 
            2.   The calendar years to which paragraph 1 applies and the 
            percentages for those calendar years are as follows: 
 
                 1994 1995 1996 1997 1998 
 
                 50%  45%  45%  40%  40% 
 
 
                 1999 2000 2001 2002 2003 and thereafter 
 
                 35%  35%  30%  30%  0% 
 
            3.   The value of procurement contracts that are financed by 
            loans from regional and multilateral financial institutions 
            shall not be included in the calculation of the total value of 
            procurement contracts under paragraphs 1 and 2.  Procurement 
 
 
                                         10-75  
 
 
 
 
 
 
  
 
 
 
 
 
                                                              Annex 1001.2a 
 
 
            contracts that are financed by such loans shall also not be 
            subject to any restrictions set out in this Chapter. 
 
            4.   Mexico shall ensure that the total value of procurement 
            contracts under any single FSC class (or other classification 
            system agreed by Parties) that are set aside by Pemex or CFE 
            under paragraphs 1 and 2 for any year does not exceed 10 
            percent of the total value of the procurement contracts that 
            may be set aside by Pemex or CFE for that year. 
 
            5.   Mexico shall ensure that, after December 31, 1998, Pemex 
            and CFE each shall make all reasonable efforts to ensure that 
            the total value of procurement contracts under any single FSC 
            class (or other classification system agreed by the Parties) 
            that are set aside by Pemex or CFE under paragraphs 1 and 2 for 
            any year does not exceed 50 percent of the total value of all 
            Pemex and CFE procurement contracts under that FSC class (or 
            other classification system agreed by the Parties) for that 
            year. 
 
            Pharmaceuticals 
 
            6.   Until January 1, 2002, this Chapter shall not apply to the 
            procurement by the Secretar a de Salud, IMSS, ISSSTE, 
            Secretar a Defensa Nacional and the Secretar a de Marina of 
            drugs that are not currently patented in Mexico or whose 
            Mexican patents have expired.  Nothing in this paragraph shall 
            prejudice rights under Chapter Seventeen (Intellectual 
            Property). 
 
            Time Limits for Tendering and Delivery 
 
            7.   Mexico shall use its best efforts to comply with the 40- 
            day time limit requirements of Article 1012, and in any event 
            shall fully comply with that obligation no later than 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 Article 1019.  The Parties also recognize that Mexico may 
            encounter difficulties in making the transition to procurement 
            systems that facilitate full compliance with this Chapter. 
 
 
 
 
                                         10-76  
 
 
 
 
 
 
  
 
 
 
 
 
                                                              Annex 1001.2a 
 
 
            9.   The Parties shall consult on an annual basis for the first 
            five years after the date of entry into force of this Agreement 
            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.  Canada and the United States shall cooperate with Mexico 
            to provide technical assistance, as appropriate and mutually 
            agreed pursuant to Article 1020, to aid Mexico's transition. 
 
            11.  Nothing in paragraphs 8 through 10 shall be construed to 
            excuse compliance with the obligations of this Chapter. 
 
            Note:     The General Notes for Mexico set out in Annex 1001.2b 
                      apply to this Annex. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         10-77  
 
 
 
 
 
 
  
 
 
 
 
 
                                                              Annex 1001.2b 
 
 
                                     Annex 1001.2b 
 
                                     General Notes 
 
                                  Schedule of Canada  
 
            1.   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)  the Departments of Transport, Communications and 
                      Fisheries and Oceans respecting Federal Supply 
                      Classification (FSC) 70 (automatic data processing 
                      equipment, software supplies and support equipment), 
                      FSC 74 (office machines, text processing systems and 
                      visible record equipment) and FSC 36 (special 
                      industry machinery); and 
 
                 (f)  agricultural products made in furtherance of 
                      agricultural support programs or human feeding 
                      programs. 
 
            2.   This Chapter does not apply to the procurement of 
            transportation services that form a part of, or are incidental 
            to, a procurement contract. 
 
            3.   Pursuant to Article 1018, national security exemptions 
            include oil purchases related to any strategic reserve 
            requirements. 
 
            4.   National security exceptions include procurements made in 
            support of safeguarding nuclear materials or technology. 
 
            5.   The most-favored-nation obligation of Article 1003 does 
            not apply to procurements covered by Annex 1001.2c. 
 
 
                                   Schedule of Mexico 
 
 
                                         10-78  
 
 
 
 
 
 
  
 
 
 
 
 
                                                              Annex 1001.2b 
 
 
            1.   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); or 
 
                 (c)  by one entity from another entity of Mexico. 
 
            2.   This Chapter does not apply to the procurement of 
            transportation services that form a part of, or are incidental 
            to, a procurement contract. 
 
            3.   Notwithstanding any other provision in this Chapter, 
            Mexico may set aside procurement contracts from the obligations 
            of this Chapter, subject to the following: 
 
                 (a)  the total value of the contracts set aside that may 
                      be allocated by all entities, except Pemex and CFE, 
                      may not exceed the Mexican peso equivalent of 
 
                      (i)  US$1.0 billion, in each year until December 31, 
                           2002, and 
 
                      (ii) US$1.2 billion, in each year beginning January 
                           1, 2003; 
 
                 (b)  no contract may be set aside under this paragraph by 
                      Pemex or CFE prior to January 1, 2003; 
 
                 (c)  the total value of the contracts set aside by Pemex 
                      and CFE under this paragraph may not exceed the 
                      Mexican peso equivalent of US$300 million, in each 
                      year beginning January 1, 2003; 
 
                 (d)  the total value of contracts under any single FSC 
                      class (or other classification system agreed by the 
                      Parties) that may be set aside under this paragraph 
                      in any year shall not exceed 10 percent of the total 
                      value of contracts that may be set aside under this 
                      paragraph for that year; and 
 
                 (e)  no entity subject to subparagraph (a) may set aside 
                      contracts in any year of a value of more than 20 
 
 
 
                                         10-79  
 
 
 
 
 
 
  
 
 
 
 
 
                                                              Annex 1001.2b 
 
 
                      percent of the total value of contracts that may be 
                      set aside for that year. 
 
            4.   Beginning one year after the date of entry into force of 
            this Agreement, the dollar values referred to in paragraph 3 
            shall be adjusted annually for cumulative inflation from the 
            date of entry into force of this Agreement, based on the 
            implicit price deflator for U.S. Gross Domestic Product (GDP) 
            or any successor index published by the Council of Economic 
            Advisors in "Economic Indicators".   
 
            The dollar values adjusted for cumulative inflation up to 
            January of each year following 1994 shall be equal to the 
            original dollar values multiplied by the ratio of: 
 
                 (a)  the implicit U.S. GDP price deflator or any successor 
                      index published by the Council of Economic Advisors 
                      in "Economic Indicators", current as of January of 
                      that year, to  
 
                 (b)  the implicit U.S. GDP price deflator or any successor 
                      index published by the Council of Economic Advisors 
                      in "Economic Indicators", current as of the date of 
                      entry into force of this Agreement, 
 
            provided that the price deflators under paragraphs (a) and (b) 
            have the same base year. 
 
            The resulting adjusted dollar values shall be rounded to the 
            nearest million dollars.   
 
            5.   National security exceptions include procurements made in 
            support of safeguarding nuclear materials or technology. 
 
            6.   Notwithstanding any other provision of this Chapter, an 
            entity may impose a local content requirement of no more than: 
 
                 (a)  40 percent, for labor-intensive turnkey or major 
                      integrated projects; or 
 
                 (b)  25 percent, for capital-intensive turnkey or major 
                      integrated projects. 
 
            For purposes of this paragraph, 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 with respect to which: 
 
 
 
                                         10-80  
 
 
 
 
 
 
  
 
 
 
 
 
                                                              Annex 1001.2b 
 
 
                 (c)  the prime contractor is vested with the authority to 
                      select the general contractors or subcontractors;  
 
                 (d)  neither the Government of Mexico nor its entities 
                      fund the project;  
 
                 (e)  the person bears the risks associated with non- 
                      performance; and  
 
                 (f)  the facility will be operated by an entity or through 
                      a procurement contract of that entity. 
 
            7.   Notwithstanding the thresholds set out in Article 
            1001(1)(c), Article 1003 shall apply to any procurement from 
            locally-established suppliers of oil and gas field supplies or 
            equipment by Pemex at any project site where it performs works.  
 
 
            8.   In the event that Mexico exceeds in any given year the 
            total value of the contracts it may set aside for that year in 
            accordance with paragraph 3 or the reserved procurement under 
            Annex 1001.2a(1)(2) or (4), Mexico shall consult with the other 
            Parties with a view to agreement on compensation in the form of 
            additional procurement opportunities during the following year.  
            The consultations shall be without prejudice to the rights of 
            any Party under Chapter Twenty (Institutional Arrangements and 
            Dispute Settlement Procedures). 
 
            9.   Notwithstanding Annex 1001.2a(6), Mexico may not set aside 
            from the obligations of this Chapter procurement contracts by 
            its entities of biologicals and drugs patented in Mexico.   
 
            10.  Nothing in this Chapter shall be construed to require 
            Pemex to enter into risk-sharing contracts. 
 
                             Schedule of the United States 
 
            1.   This Chapter does not apply to set asides on behalf of 
            small and minority businesses. 
 
            2.   This Chapter does not apply to the procurement of 
            transportation services that form a part of, or are incidental 
            to, a procurement contract. 
 
            3.   The most-favored-nation obligation of Article 1003 does 
            not apply to procurements covered by Annex 1001.2c. 
 
 
 
 
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                                                              Annex 1001.2c                                            
                  _____________ 
 
 
                                     Annex 1001.2c 
 
                              Country-Specific Thresholds 
 
 
                 As between Canada and United States, 
 
                 (a)  for any entity listed in the Schedule of Canada or of 
                      the United States in Annex 1001.1a-1, the applicable 
                      threshold for goods contracts, which may include 
                      incidental services such as delivery and 
                      transportation, shall be US$25,000 and the equivalent 
                      in Canadian dollars, as the case may be; 
 
                 (b)  Annex 1001.1c, except paragraphs 2 and 3 of that 
                      Annex for the purpose of calculating and converting 
                      the value of the threshold set out in subparagraph 
                      (a), does not apply to such goods contracts; and 
 
                 (c)  Chapter Thirteen of the Canada - United States Free 
                      Trade Agreement shall govern any procurement 
                      procedures that began before January 1, 1994, and 
                      that Chapter is hereby incorporated and made a part 
                      of this Agreement solely for that purpose. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         10-82  
 
 
 
 
 
 
  
 
 
 
 
 
                                                               Annex 1010.1                                             
                  ____________ 
 
 
                                      Annex 1010.1 
 
                                      Publications 
 
                  Section A - 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 or the 
            Official Gazette of the Federation ("Diario Oficial de la 
            Federaci n"). 
 
            2.   Mexico shall endeavor to establish a specialized 
            publication for purposes of notices of procurement.  When 
            established, the publication shall substitute for those 
            referred to in paragraph 1. 
 
 
                               Schedule of United States 
 
            Commerce Business Daily (CBD) 
 
 
                         Section B - Publications for Measures 
              in Accordance with Article 1019 (Provision of Information)  
 
                                   Schedule of Canada 
 
            1.   Laws and regulations: 
 
                 (a)  Statutes of Canada; and 
                 (b)  Canada Gazette. 
 
            2.   Precedential judicial decisions: 
 
                 (a)  Dominion Law Reports; 
                 (b)  Supreme Court Reports; 
                 (c)  Federal Court Reports; and 
                 (d)  National Reporter. 
 
 
 
                                         10-83  
 
 
 
 
 
 
  
 
 
 
 
 
                                                               Annex 1010.1                                             
                  ____________ 
 
 
            3.   Administrative rulings and procedures: 
 
                 (a)  Government Business Opportunities; and 
                 (b)  Canada Gazette. 
 
 
                                   Schedule of Mexico 
 
            1.   Official Gazette of the Federation ("Diario Oficial de la 
            Federaci n")  
 
            2.   Judicial Weekly of the Federation ("Semanario Judicial de 
            la Federaci n") (for precedential judicial decisions only). 
 
            3.   Mexico shall endeavor to establish a specialized 
            publication for administrative rulings of general application 
            and any procedure, including standard contract clauses 
            regarding procurements.  When established, the publication 
            shall substitute for those set out in paragraphs 1 and 2 for 
            this purpose. 
 
 
                               Schedule of United States 
 
            1.   Laws and regulations: 
 
                 (a)  U.S. Statutes at Large 
                 (b)  U.S. Code of Federal Regulations. 
 
            2.   Precedential decisions: 
 
                 (a)  U.S. Reports (U.S. Supreme Court); 
                 (b)  Federal Reporter (Circuit Court of Appeals); 
                 (c)  Federal Supplement Reporter (District Courts); 
                 (d)  Claims Court Reporter (Claims Court); 
                 (e)  Boards of Contract Appeals (unofficial publication by 
                      Commerce Clearing House); and 
                 (f)  Comptroller General of the United States (Those not 
                      officially published as decisions of the Comptroller 
                      General are published unofficially by Federal 
                      Publications, Inc.). 
 
            3.   All U.S. 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 
 
 
 
                                         10-84  
 
 
 
 
 
 
  
 
 
 
 
 
                                                               Annex 1010.1                                             
                  ____________ 
 
 
            published as a part of the U.S. Code of Federal Regulations 
            (CFR).  The DFARS and the FAR are published in title 48 of CFR. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         10-85  
 
 
 
 
 
 
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