International Public Procurement Law

by Reich, Arie

• ISBN13: 9789041196859
• ISBN10: 9041196854
• Format: Hardcover
• Copyright: 1998-11-01
• Publisher: Kluwer Law Intl

Summary

In an attempt to reduce barriers to international trade, public procurement agreements have evolved during the past three decades at both global and regional levels. These agreements give rise to a number of complex, topical issues. Yet apart from studies on European Union procurement rules, there are few books on public procurement, particularly covering regional procurement agreements. This important new study fills this informational void by providing a detailed assessment of these agreements, focusing on the problem of protectionism in government procurement, long recognized as a major barrier to international trade. Its coverage includes: A thorough analysis of all of the important international procurement agreements--EFTA, The EC's first and second attempts, The GATT Code of the Tokyo Round, The Israel-US and Canada-US Free Trade Agreements, NAFTA, And The Uruguay Round WTO Procurement Code--with special attention To The bid challenge mechanisms of the various regimes. A discussion and evaluation of judicial decisions of the various tribunals An examination of the reasons why many of these agreements have achieved only limited success, Proposed solutions To The various problems encountered An analysis of approaches taken in the regulation of public procurement, comparing their relative advantages and disadvantages Suggestions for ways to overcome current problems in order to both widen and deepen the application of international procurement standards.

Table of Contents

Foreword	v
Abbreviations	xvii
Preface	xix
The Problem of Protectionist Procurement Policies	1	(18)
Introduction to the Chapter	1	(1)
Governments as Purchasers of Goods and Services	1	(1)
Government Procurement as an Instrument of General Policy Promotion	2	(1)
Domestic Preference Policies	3	(2)
Other Reasons for Domestic Preferences	5	(1)
Forms of Discrimination against Foreign Suppliers	6	(2)
Overt Discrimination	6	(1)
Less Visible Forms of Discrimination	7	(1)
An Effect-Based Taxonomy : Restrictive Tendering Procedures and Margins of Preference	8	(2)
Margins of Preference	10	(4)
The Canadian Content Premium	10	(2)
The ``Buy American'' Differential	12	(1)
Margins of Preference in Relation to Tariffs and Subsidies	13	(1)
Restrictive Tendering Procedures	14	(2)
Procurement Preference Policies as a Disguised Subsidy Scheme	16	(1)
Retaliatory Protectionism in Government Procurement	17	(1)
Conclusion	18	(1)
Normative Analysis of Protectionist Procurement Policies: Are They Economically or Morally Sound?	19	(36)
Introduction	19	(2)
Economic Analysis: Domestic Preference Policies and Efficiency	21	(5)
The Economic Effects of Restrictive Tendering Procedures	22	(2)
The Economic Effects of a Margin of Preference	24	(1)
The Problem of Collusion	25	(1)
Positive Externalities: Are there External Benefits from Domestic Preference Policies?	26	(9)
Protectionism and Employment	27	(1)
Procurement Policies and Depressed Regions	28	(1)
Procurement Policies and Infant Industries	29	(2)
Procurement Policies and Strategic Trade Policy	31	(1)
Procurement Policies and National Security	32	(2)
Retaliatory Procurement Policies: Are They Wise?	34	(1)
Empirical Evidence on the Costs of Protectionist Procurement Policies	35	(5)
Studies on General Trade Restrictions	35	(1)
The Costs of Protection in the Government Procurement Sector: Some US Studies	36	(2)
A European Study	38	(2)
Ethical Perspectives on Protectionist Preference Policies	40	(8)
Judaism	40	(1)
Biblical Ethics	40	(1)
Talmudic Law	41	(2)
Kantian Social Contractarianism	43	(2)
Utilitarianism	45	(1)
Communitarianism	46	(2)
A Political Perspective	48	(2)
Conclusion: The Benefits from a New International Order	50	(5)
Early Attempts to Eliminate Domestic Preference Policies: The European Free Trade Association	55	(14)
Introduction: International Agreements on Government Procurement	55	(1)
The European Free Trade Association	55	(3)
Background: The Formation of EFTA	55	(1)
The Stockholm Convention: Institutional Structure	56	(1)
Consultations and Complaints Procedure	57	(1)
Tariffs and Quantitative Restrictions	58	(1)
Article 14: Public Undertakings	58	(2)
The Rules of Competition	58	(1)
Protectionist Procurement Policies	59	(1)
State Trading Activities	59	(1)
Further Clarification: The Lisbon Ministerial Agreement	60	(5)
Preparatory Work	60	(1)
An ``Authoritative Interpretation'' of Article 14	61	(2)
Future Co-operation and Surveillance	63	(1)
Dispute Resolution	64	(1)
Implementation	65	(1)
Assessment of EFTA's Procurement Regime	65	(4)
The European Community: The First Try	69	(34)
The EC: History and Institutional Structure	69	(2)
Government Procurement Policies under the EC Treaties	71	(5)
Prohibition on Discrimination	71	(1)
Quantitative Restrictions and Measures of Equivalent Effect	72	(1)
Commission Directive 70/32	73	(1)
Right of Establishment and Freedom to Provide Services	74	(2)
The Co-ordination Directives	76	(22)
The Need to Prescribe and Co-ordinate Procurement Procedures	76	(1)
The Legal Status of the Directives	77	(1)
The Public Works Directive	78	(1)
Basic Principles	78	(1)
Scope and coverage	79	(2)
The Public Supplies Directive	81	(1)
Tendering Procedures under the Directives	82	(1)
Open tendering procedures	83	(1)
Restricted tendering procedures	84	(2)
Exceptions: non-competitive procurement	86	(2)
Rules on Technical Specifications	88	(1)
Criteria for Qualitative Selection	89	(2)
Award of Contracts	91	(1)
Award criteria	91	(1)
Abnormally low tenders	92	(1)
Preferences for under-developed regions	93	(1)
Procedural requirements and post-award information	94	(1)
Surveillance and Enforcement	94	(1)
An Advisory Committee for Public Contracts	94	(1)
Enforcement: complaints to the Commission	95	(1)
National courts	96	(2)
Amendments following the GATT Code	98	(1)
Conclusion: Assessment of the EC Procurement Regime	98	(5)
On the Multilateral Level: The Gatt Code on Government Procurement	103	(38)
The Initial Position: Government Procurement as an Exception to the National Treatment Obligation	103	(3)
The Negotiations towards an International Agreement on Government Procurement	106	(4)
Discussions in the OECD	106	(1)
The Problems in Connection with an International Agreement	106	(1)
The Tokyo Round and the Reduction of Non-Tariff Barriers to Trade	107	(1)
The Sub-Group on Government Procurement and its Discussions	108	(2)
The Agreement on Government Procurement (the Code) - An Analysis of its Provisions	110	(23)
Scope and Coverage of the Code	111	(1)
Government procurement	111	(1)
Service contracts excluded	112	(2)
Limited government entities	114	(1)
The value threshold	115	(1)
Exceptions to the agreement	115	(1)
National Treatment and Non-Discrimination	116	(1)
Transparency in Tendering Procedures	117	(1)
Open tendering procedures	118	(1)
Selective tendering procedures	119	(1)
Single tendering procedures	120	(2)
Technical specifications	122	(2)
Opening of tenders and awarding of contracts	124	(2)
Enforcement and Dispute Settlement	126	(1)
Surveillance on the Code's implementation	126	(1)
Private bid challenge	127	(1)
Inter-governmental measures of enforcement	128	(2)
Panel cases under the Code	130	(3)
Evaluation of the Code's Efficacy	133	(3)
Limited Coverage	133	(1)
Extensive Use of Single Tendering	134	(1)
Other Problems of Non-Compliance	135	(1)
Actual Impact on World Trade	135	(1)
The 1987 Amendments to the Agreement	136	(5)
Background	136	(1)
Improvements: The Threshold Value	137	(1)
Foreign-Owned Local Firms	138	(1)
Improved Tendering Procedures	138	(1)
Better Post-Award Information	139	(2)
A Bilateral Approach: Government Procurement Under the Israel-United States Free Trade Agreement	141	(26)
Israeli Government Procurement Policies	142	(7)
Tendering Procedures	142	(1)
Domestic Preference Policies	142	(1)
The Government decision	142	(1)
Implementation	143	(1)
Preferential procurement procedures	144	(1)
Enforcement measures	144	(1)
The Industrial Offset Policy	145	(1)
The policy	145	(1)
The procedures	146	(1)
Israel's Implementation of the GATT Agreement on Government Procurement	147	(1)
Government agencies covered by the Procurement Code	147	(1)
Implementing directives	148	(1)
Government Procurement Policies of the United States	149	(5)
Domestic Preference Policies	149	(1)
The Buy American Act: history	149	(1)
Implementation	150	(1)
Other Buy American restrictions	150	(1)
Set-asides	151	(1)
Department of Defense Memoranda of Understanding	151	(1)
US Implementation of the Procurement Code	152	(1)
The Trade Agreements Act 1979	152	(1)
The Trade Agreements Act versus bilateral procurement agreements	153	(1)
The impact and coverage of the Code	153	(1)
The Israel-United States Free Trade Agreement: Background	154	(2)
Bilateral FTAs and GATT	154	(1)
Why Israel and the US sought an FTA	155	(1)
The Government Procurement Chapter of the FTA	156	(5)
Background: The Procurement Code and Defence Co-operation Agreements	156	(1)
Description and Analysis of the FTA's Procurement Provisions	157	(1)
Lowering the threshold	158	(1)
What rules of origin apply to procurement?	159	(1)
Relaxation of offset requirements	159	(1)
Inclusion of some procurements by Israel's Ministry of Defence	160	(1)
Further trade liberalisation	161	(1)
Private Enforcement of the Code and the FTA's Procurement Chapter in Israel and the United States	161	(5)
In Israel	162	(1)
Judicial review of government procurement	162	(1)
The Code and the FTA in Israeli domestic law	163	(1)
Can discriminatory treatment of a foreign supplier be challenged in the High Court of Justice?	163	(1)
In the United States	164	(1)
The Code and the FTA in US domestic law	164	(1)
Judicial review of government procurement in the US	165	(1)
Conclusion	166	(1)
Government Procurement Under the Canada-United States Free Trade Agreement	167	(30)
Government Procurement in Canada	168	(7)
Legislative and Regulatory Framework	168	(1)
Competition in Contracting	169	(1)
The ``Buy Canadian'' Policy	169	(1)
The Canadian Sourcing Policy	169	(2)
The Canadian Content Premium Policy	171	(1)
Provincial preferences	172	(1)
The Procurement Review Committee and Major Crown Projects	172	(1)
Canada's Implementation of the Tokyo Round GATT Code	173	(2)
The Canada-United States Free Trade Agreement	175	(6)
Background	175	(1)
A Disappointing Achievement	176	(2)
The Israel-US FTA as a Model	178	(1)
``Expanded Procedural Obligations''	178	(2)
The Obligation to Publish a Prior Notice on Single Tendering: The LANsPLUS Decision	180	(1)
The Procurement Review Board of Canada	181	(16)
An Innovation in the Canadian Procurement System	182	(1)
The Establishment of the Board	183	(1)
The Jurisdiction of the Board	184	(1)
Determining Jurisdiction: The Actual Value or the Estimated Value Rule?	185	(2)
Postponement of Contract Awards	187	(1)
Practice and Procedure before the Board	188	(1)
Inquisitorial Procedures	189	(2)
Standard of Review	191	(1)
The Board's Decisions are Recommendatory	192	(1)
The Remedy of Compensation in the Board's Practice	192	(2)
Conclusion: Evaluation of the Board	194	(3)
Opening Up Procurement Markets in the European Community: A Second Try	197	(64)
Introduction	197	(2)
Amendments to the Co-ordination Directives	199	(18)
Scope: Amendments and Clarifications	199	(1)
The excluded sectors	199	(1)
Defence procurement	200	(1)
Value thresholds and other amendments	201	(2)
Improvements in Tendering Procedures	203	(1)
Choice of procedures	203	(1)
Regulating restricted procedures	204	(1)
Negotiated procedures	205	(2)
Extended time limits and improved contract information	207	(1)
May negotiations be used in open or restricted procedures?	208	(1)
Rules on Technical Specifications	209	(1)
Award Criteria and Post-Award Information	210	(1)
Abnormally low tenders	210	(2)
Regional preferences	212	(2)
Award Procedures and Post-Award Information	214	(1)
Statistics on Contract Awards	215	(1)
Implementation	216	(1)
The Review Directive	217	(10)
Background	217	(1)
Scope	218	(1)
National Review Procedures	218	(1)
General approach	218	(1)
Cause of action and legal standing	219	(1)
Remedies	219	(3)
Non-judicial review bodies	222	(1)
Commission Intervention	222	(1)
Implementation and Surveillance	223	(1)
Assessment of the Review Directive	224	(3)
The Utilities Directive	227	(16)
Introduction	227	(1)
Field of Application	228	(1)
General approach: to target the protectionist entities	228	(2)
Defining the covered entities	230	(2)
Oil, gas and coal exploration	232	(1)
Covered contracts	232	(2)
Tendering Procedures	234	(1)
The approach	234	(1)
Free choice of award procedures	235	(1)
Qualification systems	236	(1)
Negotiated procedures without call for competition	237	(1)
Criteria for Qualitative Selection	237	(1)
Post-Award Information	238	(1)
The Community Preference Rule	239	(2)
Implementation and Surveillance	241	(1)
Assessment of the Utilities Directive	242	(1)
The Utilities Review Directive	243	(8)
National Review Procedures	244	(2)
The Attestation System	246	(2)
Commission Intervention	248	(1)
Conciliation	248	(2)
Implementation and Review	250	(1)
Conclusion	250	(1)
Service Contracts	251	(4)
Legislative Measures	252	(1)
Categories of Services Covered	252	(2)
Tendering Procedures	254	(1)
Implementation, Enforcement and Review	255	(1)
Conclusion: Assessment of the Community's Second Try to Open Up Procurement Markets	255	(6)
Public Procurement Under the North American Free Trade Agreement (NAFTA)	261	(18)
Introduction	261	(1)
Scope and Coverage	262	(5)
Federal Government Entities and Enterprises	262	(1)
State and Provincial Government Entities	263	(1)
Construction and Service Contracts	264	(2)
Threshold Values	266	(1)
Special Concessions to Mexico	266	(1)
Small Businesses Set-Asides	267	(1)
National Treatment and Non-Discrimination	268	(2)
Prohibition on Offsets	268	(1)
Rules of Origin and Denial of Benefits	269	(1)
Tendering Procedures	270	(2)
Bid Challenge	272	(3)
Wider Jurisdiction	272	(1)
Weakened Bid Challenge Procedures	273	(2)
Final Provisions	275	(1)
Assessment of NAFTA's Procurement Chapter	275	(4)
Back to the Multilateral Level: The Uruguay Round and the Gatt Procurement Code	279	(40)
Introduction	279	(1)
The Uruguay Round and the Procurement Code	280	(4)
The Negotiations Towards a New Code	280	(1)
Outside the ``Single Undertaking''	281	(2)
``Semi-Membership'' in the Code	283	(1)
Expanded Coverage	284	(14)
Service Contracts	286	(2)
Construction services	288	(1)
Other services	288	(2)
Rules of origin in relation to services	290	(2)
Expanded Entity Coverage	292	(1)
Central government entities	293	(1)
Sub-central government entities	293	(2)
``Other entities''	295	(3)
Tendering Procedures: Mostly Minor Changes	298	(7)
Greater Flexibility for Annex 2 and 3 Entities	298	(1)
Negotiation during Tendering	299	(1)
Limited Tendering	300	(1)
Technical Specifications	301	(2)
The TRIPs Agreement and the Procurement Code	303	(2)
Prohibition of Offsets	305	(2)
Bid Challenge Tribunals	307	(5)
Cause of Action and Legal Standing	308	(1)
Independent Review Bodies	308	(1)
Remedies	309	(3)
Inter-Governmental Dispute Resolution	312	(4)
The New WTO Dispute Settlement Mechanism	312	(2)
Applying the DSU to the Code	314	(1)
Non-Violation Cases under the Code	315	(1)
Conclusion: An Assessment of the New Code	316	(3)
Summary and Conclusions: What's Next?	319	(40)
Introduction	319	(1)
Substantive vs. Procedural Rules: The Importance of a Detailed Code of Tendering Procedures	320	(7)
Substantive Rules	320	(3)
Rules of Procedures	323	(4)
Enforcement and Dispute Resolution	327	(13)
Introduction	327	(1)
Dispute Resolution between Governments	328	(3)
Governmental Surveillance and Enforcement Mechanisms	331	(2)
Private Enforcement Mechanisms	333	(1)
The role of a private enforcement mechanism	334	(1)
The evolution of private enforcement in procurement agreements	334	(1)
A critique of the existing regimes	335	(5)
Implementation	340	(1)
Scope and Coverage of the Agreements	341	(5)
What is the Optimal Coverage of a Public Procurement Regime?	341	(2)
Coverage of Existing Agreements	343	(3)
Expanding the Code's Coverage	346	(4)
Multilateralising the Code	350	(9)
The Problem	350	(4)
Ongoing Negotiations: An Interim Agreement on Transparency	354	(2)
A Possible Extension of GATS to Government Procurement of Services	356	(3)
Appendix	359	(30)
Index	389