Comparison 2011 ML and revised WTO GPA Печать E-mail
1. Objectives, Implementation and AMBIT
 

MODEL LAW
 

GPA
Non-binding template vs binding agreement The Model Law is a non-binding template available to national governments. It provides governments with tools to design and implement national legisla-tion. It reflects best practice from around the world and allows governments to adapt it to local circumstances.

 
The GPA is a plurilateral agreement within the WTO system, currently covering 42 WTO members. It lays down binding rules and gives GPA parties enforceable market access rights.
Implementation - Provisions of the Model Law are, as a general rule, adopted as they are laid out in the text into the relevant national laws. The Model Law provides states with a varied menu of options from which to choose in order to address different procurement situations and to suit local circumstances.

- There is no obligation to notify the United Nations when the text is used.

- The Model Law is supplemented by a comprehensive consensus-based methodology (the "Guide to Enactment"). The guide's purpose is to provide background and explanatory information on policies in the Model Law, to discuss objectives and advice on options in the Model Law.
- The GPA requires parties to ensure the conformity of its laws and regulations with the GPA obligations. Existing national public procurement rules are, therefore, as a general rule, adapted to GPA requirements., If (national) procurement laws have not been amended to reflect GPA requirements, the extent to which the GPA has automatic effect (ie that legal entities can directly invoke provisions of the GPA before national courts and authorities) depends on the specific national jurisdiction. The Model Law's Guide to Enactment notes that international agreements (like the GPA) of the enacting state have precedence over its procurement law where they conflict

- Formal accession to the GPA takes place on the 30th day following the depositing of an instrument of accession stating terms of accession.

- The GPA is not supplemented by a methodology that explains its motivations but contains a (brief) preamble describing the main objectives of the GPA.

 
AMBIT The Model Law focuses on the contract formation phase and does not address the terms of contract for procurement, the contract performance or the implementation phase. The GPA focuses on the contract formation phase and does not address the terms of contract for procurement, the contract performance or the implementation phase. 
























































2. General Principles
General Model Law GPA
Transparency - Transparency is a key feature of both the Model Law and the GPA. Its main aim is to ensure that the rules are followed, and, conversely, that non-compliance can be both identified and addressed.

- Importantly, it is transparency that facilitates the achievement of other objectives of a procurement sys-tem. Transparency makes it more difficult to disguise and maintain discriminatory procurement decisions.

- The Model Law names transparency as one of its six objectives; the GPA cites its 'cornerstone' principle of transparency in its preamble.

- Both texts address transparency at all stages of the public procurement process.

- Transparency under both the Model Law and the GPA involves (a) publicity both of procurement opportunities and of the disclosure of the rules that will be followed; (b) the visible conduct of procurement processes according to prescribed rules and procedures that limit the discretion of officials, and (c) the provisions of a system for monitoring and enforcing applicable rules.
Under the Model Law, provisions regarding transparency include:

- Prompt and public availability and accessibility of all procurement-related texts (including judicial decisions and administrative rulings).

- Obligation to justify reasons for using methods other than open tender procedure.

- Publication of contract award notices or invitations to pre-qualify in local and international newspapers in a language used in international trade.

- Specification of qualification requirement, applicable specifications and criteria for evaluating requests to par-ticipate and tenders.

- Informing of candidates/bidders on modification or alterations of tenders requirements during procurement procedure.

- Right to attend bid opening sessions where names of tenderers and prices are announced.

- Obligation to provide reason for the rejection of a tender (for instance, in case of bribery or similar conduct).

- Obligation to provide reason for an award decision (can-cellation decision).

- Obligation to keep a record of the procurement procedure.

- Right to make use of e-procurement which assists in the dissemination of information.
Under the GPA, provisions regarding transparency include:

- Prompt and public availability and accessibility of all pro-curement-related texts (including judicial decisions and ad-ministrative rulings).

- Obligation to justify reasons for using methods other than open tender procedure.

- Publication of summary contract award notices or invita-tions to pre-qualify in one of the WTO languages.

- Specification of qualification requirement, applicable specifications and criteria for evaluating requests to participate and tenders (to permit suppliers to submit responsive tenders).

- Informing of candidates/bidders on modification or altera-tions of tenders requirements during procurement procedure (amended tender notices must be given the same circulation given to the original tender notice).

- Obligation to provide reason for the rejection of a tender (for instance, in case of bribery or similar conduct).

- Obligation to provide reason for an award decision (including the characteristics and relevant advantages of the tender selected) as well as the name of the successful bidder on request of an unsuccessful tenderer.

- Obligation to keep a record of the procurement procedure.

- Right to make use of e-procurement which assists in the dissemination of information.
Economy and efficiency - Fostering economy and efficiency is considered essential under the Model Law and expressly named as one of the six Model Law's objectives. In contrast, the GPA, whose main objective is to promote international trade, does not explicitly mention the principle of economy and efficiency but does do justice to these principles in its provisions.
In this regard, 'economy and effi-ciency' involves both value for money in what is purchased and administrative efficiency in the process.

- Economy is, as a general rule, obtained with the widest possible competition; competition will therefore have a direct influence on the principle of economy.
Efficiency refers to the relationship between transaction costs and administrative time of each procurement and whether the value is proportionate.
Under the Model Law, provisions regarding economy and efficiency include:

- Discretion to decide what to purchase, to determine what will be considered responsive to the procuring entity's needs, who can participate on what terms, and the criteria that will be applied to select candidates and award con-tracts (including life-cycle costs and quality) as well as the consideration of socio-economic objectives.

- The availability of multiple procurement procedures allows procuring entities to tailor the process according to the subject matter of the procurement and the procurement entity's needs. For instance, procedures for low-value or simple procurement and for repeated or indefinite procurement processes like framework agreements. The Model Law gives preference to open tender procedures.

- Possibility of centralized purchasing due to better quality tender documents and better supplier understanding (as mentioned in the Guide to Enactment)

- Right to shorten (minimum) timelines in exceptional circumstances.

- The right to clarify and modify tender documents to guarantee that the procuring entity's needs are met.

- Obligation to reject abnormally low tenders due to the risk of non- or substandard performance.

- E-procurement tools like e-reverse auctions, e-catalogues and e-framework agreements allow procurement proce-dures to be completed in hours or days rather than weeks or months.

- The right to make use of e-communication allows for the reductions of paper costs.

- Obligation to keep a record of the procurement proce-dures facilitates, for instance, the assessment of the cost-to-value ratio of each procurement.
Under the GPA, provisions regarding economy and efficiency include:

- Discretion to decide what to purchase, to determine what will be considered responsive to the procuring entity's needs, who can participate on what terms, and the criteria that will be applied to select candidates and award contracts (including life-cycle costs and quality) as well as the consideration of socio-economic objectives.

- The availability of multiple procurement procedures allows procuring entities to tailor the process according to the sub-ject matter of the procurement and the procurement entity's needs. The GPA does not indicate any preference between the tender procedures available (ie between the open, selective and limited tender procedure). Contracts below certain thresholds must not be tendered internationally, assuming that such contracts lack any cross-border interest.

- Right to shorten (minimum) timelines in exceptional circum-stances.

- The right to clarify and modify tender documents to guarantee that the procuring entity's needs are met.

- Right to correct unintentional errors by tenderers.

- Right to verify abnormally low tenders so as to ensure the tenderer's ability to perform.

- Right to enter into negotiations if no single tender is the most advantageous.

- E-procurement tools like e-reverse auctions, e-catalogues and e-framework agreements allow procurement procedures to be completed in hours or days rather than weeks or months.

- The right to make use of e-communication allows for the reductions of paper costs.

- Obligation to keep a record of the procurement procedures facilitates, for instance, the assessment of the cost-to-value ratio of each procurement.
Competition - Competition in public procurement means that two or more bidders act independently to secure the contract of the procuring entity by offering the most favourable terms.

- Although there are no explicit references to the notion of competition in the texts of either the Model Law or the GPA, both texts have a high regard for competition. Moreover, the rationale behind the GPA is, in essence, to enable competition by guaranteeing non-discriminatory access of foreign suppliers to the procurement market of the other GPA parties. Hence, competition is implicit in the procedures mandated by the Model Law and the GPA.
Under the Model Law, provisions regarding competition include:

- Prompt and public availability and accessibility of all procurement-related texts (including judicial decisions and administrative rulings)

- Specification of qualification requirement, applicable specifications and criteria for evaluating requests to par-ticipate and tenders

- Publication of contract award notices or invitations to pre-qualify in local and international newspapers in a language used in international trade

- Preference is given to open tender procedures

- Technical specifications may not restrict the participation of suppliers or contractor in their access to the procure-ment proceeding; technical specifications shall be objec-tive, functional and generic.

- Although the Model Law allows for price preferences and domestic-only procurement, the Guide to Enactment indicates that total insulation from foreign competition would perpetuate lower levels of economy, efficiency and competitiveness, and would not operate to give a source of competitive exports.
Under the GPA, provisions regarding competition include:

- Prompt and public availability and accessibility of all pro-curement-related texts (including judicial decisions and ad-ministrative rulings)

- Specification of qualification requirement, applicable specifications and criteria for evaluating requests to participate and tenders

- Publication of summary contract award notices or invita-tions to pre-qualify in one of the WTO languages.

- No preference between available procurement procedures. However, limited tendering can be used only where it is not being undertaken 'with a view to avoiding maximum possible competition' and the provisions on selective tendering are expressly subject to the aim of ensuring 'optimum effective international competition'.

- Negotiations may, under all procurement procedures avail-able, be entered into if so specified in the tender documents or if no tender is obviously the most advantageous

- Technical specifications may not be drafted in a way that 'would have the effect of precluding competition', ie must be based on performance rather than design or descriptive characteristics and in principle be based on international standards.
Non-descrimination - 'Non-discrimination' is one of the two cornerstone principles of the GPA, implementing national treat-ment in that suppliers in all GPA parties will be treated no less fa-vourably than domestic suppliers, and that there can be no less fa-vourable treatment of a supplier because of foreign affiliation or ownership, or because its goods and services are of foreign origin.

- The Model Law's and GPA's gen-eral derogations (eg for national security and health) apply to the national treatment and offsets rules.

- It is in this area of non-discrimination that the Model Law and GPA are considered to diverge most significantly, reflecting their different status as texts for national and international systems. However, both texts are based on the principle of equal treatment of all covered procurement and suppliers, with very limited exemptions, supported by transparency provisions.

- With regard to national preferences and offsets which are allowed un-der the Model Law but in principle prohibited under the GPA, the Model Law explicitly establishes a general prevalence of the GPA (be-ing an international treaty) over the provisions of the national procure-ment regulations.
- The Model Law does not include 'non-discrimination' in its objectives as stated in the preamble; rather it talks of 'fair and equitable treatment'. The Model Law does, however, refer to non-discrimination in several instances. For example, it requires non-discriminatory methods of communication and that participating suppliers must be selected in a non-discriminatory manner.

- Under the Model Law, enacting states can restrict foreign participation 'with a view in particular to protecting cer-tain vital economic sectors of their national industrial ca-pacity against deleterious effects of unbridled foreign competition' (regarding national preferences and offsets see below). The Model Law's intention in this regard is that such measures are implemented on a temporary basis only.
- Parties must, in relation to covered procurement, not treat the industry of other parties less favourably than national industry. Also, GPA parties must not treat the industry of one GPA party less favourably than another. Consequently, GPA parties may not 'protect' national industry from foreign competition, ie the GPA in principle prohibits national preferences (regarding national preferences and offsets see below).
National pref-erences and offsets - Procuring entities can engage in domestic-only procure-ment, provided that the restriction to domestic suppliers is based only on grounds specified in the procurement regulations or is authorized by other laws. The procuring entity can also engage in domestic-only procurement where the purchase is of such a low value that it is unlikely to be of interest to foreign suppliers.

- The Model Law provides for 'margins of preference' (ie a price preference) in favour of local suppliers and contractors
- The GPA in principle prohibits national preferences. It recognizes, however, 'the need to take into account the development, financial and trade needs of developing countries, in particular the least-developed countries'. Therefore, the GPA allows special and differential treatment in order to meet the specific development of such countries (in particular when negotiating coverage as part of the ac-cession process).

- The use of offsets (eg measures to encourage local develop-ment or improve the balance-of-payment accounts by means of domestic content, licencing of technology, investment requirements, counter-trade, etc) is explicitly prohibited in the GPA. However, developing countries may negotiate (at the time of their accession) the use of offsets as qualification criteria (those used to identify suppliers qualified to participate in the process), but offsets may not be used as evaluation or award criteria.

- The intention of the GPA is to allow special and differential treatment (in particular national preferences and offsets) on a temporary basis only. Acceding countries will thus, after a certain transition period, be obliged to phase such special and differential treatment out.
Integrity - Integrity is referred to as an objec-tive in both the Model Law and the GPA.

- The principle of integrity in par-ticular requires objectivity at all stages of the procurement process, and ethical conduct by all parties involved and an independent and effective remedy system (see be-low).

- Integrity and objectivity facilitate other objectives such as avoiding corruption and promoting participation by suppliers. Importantly, integrity is a manner of demonstrating how the corner-stone principle of non-discrimination is applied in practice.
Objectivity The Model Law contains few provisions that expressly refer to objectivity. Provisions regarding objectivity include:

- The description of the procurement process (including technical specifications) requires that the description re-fers to 'the relevant objective technical and quality characteristics' of the subject matter.

- The Guide to Enactment notes, for instance, that the provisions regarding the content of tender documents are 'included to make the tender evaluation stage as objective [...] as possible, by the provision of full information to all' and that, with regard to evaluation criteria, 'non-price criteria should be objective'.
The GPA, like the Model Law, hardly features the word 'objectivity'.

- The principle of objectivity is, however, implemented by many provisions; for instance, through requirements to disclose all criteria for participation and qualification of suppli-ers, rules on technical specifications drafted with the express intention of ensuring that procuring entities do not discriminate against and among foreign suppliers through the technical characteristics of products and services, that different suppliers may not be discriminated against in the course of negotiations, that the procuring entity must reply to any reasonable request for relevant information by any interested or participating supplier, etc.

 
Ethical Conduct - The principle of ethical conduct refers in particular to the avoidance of corruption and conflicts of interests. Under the Model Law, provisions regarding ethical conduct include:

- Procuring entities must disqualify a tenderer if any infor-mation provided by the tenderer regarding its qualification is false.

- Procuring entities must reject a tender if the tenderer offers to bribe or bribes any officer or employee of the procurement entity or other government authority.

- Provision regarding conflicts of interest (as requested by UNCAC) thereby recommending that these provisions be reflected in other than public procurement regulations.

- The requirement for a code of conduct to address conflicts of interest.
Under the GPA, provisions regarding ethical conduct include:

- The GPA recognizes the importance of avoiding conflicts of interests and corrupt practices in its preamble. The preamble makes reference to the United Nations Convention against Corruption (UNCAC) although many of the GPA parties are not parties to this convention. The GPA reflects the UN-CAC's requirement of establishing 'appropriate systems of procurement based on transparency, competition and objective criteria in decision-making that are effective, inter alia, in preventing corruption. UNCAC's requirement regarding conflicts of interests is mirrored in the GPA.

- A procuring entity shall conduct procurement in a manner that prevents corrupt practices.

- A procuring entity shall conduct procurement in a manner that prevents conflicts of interests.

- Procuring entities may exclude any tenderer on grounds such as false declarations, final judgements in respect of serious crimes, professional misconduct, etc.
 
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