PREPARING FOR THE PROCUREMENT PROVISIONS IN THE CANADA-EU COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT

Transcription

1 PREPARING FOR THE PROCUREMENT PROVISIONS IN THE CANADA-EU COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT London, England March 3, 2014 Brenda C. M. Swick

2 DISCUSSION OVERVIEW 1. Changing Dynamic in Government Contracting 2. How CETA fits into Spaghetti Bowl of Procurement Agreements 3. Status of CETA 4. Procurement Provisions in CETA 5. What it means to your organization

3 RULES OF THE GAME ARE CHANGING Spaghetti Bowl expanding as Canada signs new treaties with foreign governments to open up their public procurement markets Canadian procurement being opened up at federal, provincial and municipal level Pressure from Canada s trading partners is being fuelled by their own suppliers who want access to the entire Canadian procurement market Why: public procurement is BIG BUSINESS: At least $150 billion is spent annually on government contracts by all governments Very high priority on federal government agenda Enhanced and Revised WTO Agreement on Government Procurement Canada-EU Comprehensive Economic Trade Agreement (CETA) According to the EU, The public procurement market access off that Canada made is the most ambitious and comprehensive offer Canada and its Provinces have made to any partner, including the US. The outcome regarding the inclusion of provincial and territorial governments, regional and local government entities, including agencies, crown corporations, and the MASH sector is highly satisfactory. Trans Pacific Partnership Agreement (TPP) Bottom Line: Procurements by provincial Crown corporations, provincial and municipal governments /MASH will become much more competitive over the next decade

4 SPAGHETTI BOWL: PROCUREMENT AGREEMENTS Canada-US Agreement on Government Procurement (Can-US GPA) NAFTA-Chapter Ten WTO Agreement on Government Procurement Agreement on Internal Trade (AIT) Applies to provincial procurements being bid on by US suppliers Exempts provincial crown corporations Requires compliance with the WTO Government Procurement Agreement Each province required to have bid review mechanism and rapid interim measures to preserve supplier s ability to participate in the procurementt Applies to federal contracts being bid on by US, Canadian and Mexican suppliers Not applicable to provinces or municipalities CITT is the bid review mechanism and provides rapid interim measures Applies to federal contracts being bid on by Canadian and foreign suppliers from 37 countries Not applicable to provinces or municipalities CITT is bid review mechanism Applies to federal, provincial and municipal contracts being bid on by Canadian suppliers CITT is bid review mechanism for federal contracts only Dispute settlement mechanism for provincial./municipal/ MASH New West Trade Partnership Agreement (NWPTA) Canada-EU Comprehensive Economic and Trade Agreement Applies to B.C. Alberta and Saskatchewan provincial and municipal procurements being bid on by suppliers carrying on business in those provinces State to state and private party bid review mechanism Will apply to procurements by federal, provincial, municipal, Crown corporations, MASH and utilities/ being bid on by EU suppliers * MFN implications for commitments made under Can-US GPA and any future TPP Agreement Trans-Pacific Partnership Agreement Currently being negotiated among Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam

5 STATUS OF CETA February 17th (Brussels) to finalize the CETA text Legal scrub (6 months) Translation Iteration of the text Summer/Fall Europe Final text voted on in the European Council/European Parliament. Ratification (2015) Canada Governor in Council s approval Federal implementation legislation tabled in House of Commons where it will be debated prior to ratification (late 2014 or early 2015) Provincial implementation legislation

6 CETA COVERED ENTITIES Broad coverage and federal, provincial and municipal entities MASH sector Municipal, Academia, School Boards, Hospitals Unprecedented 75-80% of procurements by Utilities Unprecedented Mass transit by all provinces and territories Quebec & Ontario retain a 25% Canadian value requirement in their purchases of rolling stock

7 CETA: KEY EXCLUDED PROCUREMENTS Maintain ability to five preferences to domestic companies for: Procurements below thresholds Excluded procurements: Health care services Research and development procurements Public-private partnerships for services and Utilities Sensitive goods when procured by security mandated police forces and related services Canadian airport authorities and Canadian Port Authorities Consulting services regarding matters of a confidential nature below CDN355,000 In-house procurements

8 CETA THRESHOLDS (CDN$) Trade Agreement Government Entity Crown Corporations Utilities Goods Services Construction Goods Services Construction CETA Federal Contracts Provincial/ Territory Contracts MASH Contracts (Municipal, Academic, School boards, Hospitals) 205, ,000 7,800, , ,000 7,800, , , ,000 7,800, , ,000 7,800, , , ,000 7,800,000 N/A N/A N/A 630,000

9 CETA: KEY EXCLUDED PROCUREMENTS Maintain ability to five preferences to domestic companies for: Procurements below thresholds Excluded procurements: Health care services Research and development procurements Public-private partnerships for services and Utilities Sensitive goods when procured by security mandated police forces and related services Canadian airport authorities and Canadian Port Authorities Consulting services regarding matters of a confidential nature below CDN355,000 In-house procurements

10 CETA PROCUREMENT RULES Devil in the detail: some caution - still have not seen final text Will apply the WTO Agreement on Government Procurement (GPA/113) 2 April 2012 Commitment to create a single point of electronic access to ALL subject procurement opportunities within 5 years of entry into force Detailed requirements on the Notices of Intended Procurements Non- Discrimination: Canadian and sub-federal procuring entities must provide treatment no less favourable to European suppliers and goods/services than that provided to domestic suppliers Prohibits discrimination against locally established suppliers based on foreign ownership or links with foreign supply Ability to choose form of procurement (open or selective ) or negotiate with potential suppliers based on criteria in the WTO Agreement

11 CETA PROCUREMENT RULES Rules on tendering procedures Must not be applied in a discriminatory manner or have effect of precluding competition Detailed requirements for 3 types of tendering procedures Open tendering Procedures all interested suppliers may bid Selective tendering procedures only those suppliers invited to bid may do so Limited tendering procedures sole source Qualification of suppliers Must be consistent with 8 categories of requirements Must be limited t those which are essential to determine the firm capabilities to fulfill the contract Rules for Electronic auctions Very detailed rules on Time Periods for Bidders to file bids Sufficient time to prepare bids Selective tendering general rule is bid to be submitted not less than 25 days from the date of publication of the procurement Open tendering not less than 40 days from publication Exceptions to exceptions

12 CETA PROCUREMENT RULES Rules on Technical Specifications Cannot apply to create unnecessary obstacle to trade General rule is that specifications should be based on generic functional and performance requirements and not refer to particular design or description or type If design or description used, then must indicate that other equivalent goods or services that demonstrably fulfill the requirement of the procurement by including the words or equivalent in the tender document Rules on Contract Awards and Debriefing Rules on Transparency of Procurement Information Rules on Tender Documentation Disclosure of Information

13 CETA PROCUREMENT RULES Domestic Review Procedures Timely, effective, transparent and non-discriminatory administrative or judicial review procedure to challenge the award or process Procedural rules for challenge must be in writing and easily available Suppliers should have sufficient time to prepare and submit a challenge which in no case shall be less than 10 days from when the basis of the challenge became knows or reasonably should have become known to the supplier Independent administrative or judicial authority to review challenge Federal Contracts this is CITT Must have rapid interim measures to preserve the ability of the supplier s opportunity to participate Such as suspension of procurement or contract award If breach, corrective action or compensation for the loss or damages suffered, which may be limited to either the costs for the preparation of the tender or the costs for the challenge, or both

14 CETA PROCUREMENT RULES CITT May award the complainant its reasonable costs incurred in filing and proceeding with a complaint, its reasonable costs incurred in preparing a response to the solicitation. such remedy as it considers appropriate, including for example, the re-solicitation of the designated contract, that the designated contract be terminated and that the contract be awarded to the complainant. that the complainant be compensated for the loss of the contract or for the opportunity it lost Plethora of CITT jurisprudence on all these issues

15 WHAT DOES THIS MEAN FOR YOUR ORGANIZATION? Will make it more difficult for provincial /municipal entities to use procurement as a tool for local economic/ social development for strategic purposes such as creating markets for innovative goods and services that favour Canadian suppliers Will require provinces and municipalities to shoulder the administrative costs associated with: providing information about procurements practices publishing detailed notices of intended procurements issuing terms in accordance with CETA procedures and technical specifications accounting to unsuccessful suppliers for their procurement decisions introducing a bid review mechanism and rapid interim measures defending their actions, if challenged before administrative, judicial and appellate bodies or before WTO panels Put provinces and municipalities in jeopardy of their procurement processes being slowed or derailed by having to Provide unsuccessful EU bidders with sufficient time to appeal their decisions Deal with an order suspending the procurement pending the resolution of an appeal; or Compensate unsuccessful bidder where they failed to comply with CETA rules All of this already happens at the federal government level which has been subject to international trade agreements since 1994 Trade Agreements are now reaching down further to sub-federal entities

16 BEST PRACTICES If you are a bidder/supplier: 1. Identify which Agreement applies to the government entity that you want to sell to 2. Understand that government entity s procurement obligations to your company under that Agreement(s) 3. Understand which recourses and remedies are available if the government entity does not comply with its obligations under that Agreement 4. Canadian suppliers will have better access to sub-federal procurement opportunities in the EU and eventually other countries which negotiate similar commitments with Canada

17 Questions?