ARCHIVED Canada-Korea Procurement of Telecommunications Equipment Agreement (CKTEA)

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Item Information

The CKTEA is a bilateral agreement between Canada and Korea which covers federal government procurement of telecommunications goods and incidental services (services included in goods contracts). The CKTEA was signed in early July 1999. The Policy implementing the Agreement was approved by Treasury Board Ministers on May 17, 2001. The CKTEA will take effect on September 1, 2001.

The CKTEA applies to government procurement of telecommunications goods over $261,216. It does not apply to procurement of telecommunications services.

Implementation of the CKTEA is different from implementation of NAFTA and the WTO-AGP in that, when a procurement is covered by the CKTEA, preference may be given to suppliers of Canadian and/or Korean goods.

Procurement covered by both the CKTEA and the WTO-AGP should follow procedures set out for the WTO-AGP. With the exception of items listed under Federal Supply Classification (FSC) 58, procurement which may be considered procurement of a Covered Good under the CKTEA is also covered by the WTO-AGP.

Procurement covered by the CKTEA, but not the WTO-AGP, should follow the special procedures set out in the changes to the Supply Manual. Special procedures for procurement covered by the CKTEA combine elements from procedures applying to the WTO-AGP and to the Canadian Content Policy.

Supply Manual changes are attached.

Eight new SACC Manual clauses have been drafted: K5000D; K5001T; K5002T; K5003T; K5004T; K5005T; K5006T; K5100C. One SACC Manual clause, A9110T, has been revised. These clauses are attached.

These changes take effect 1 September 2001.

Any questions on application of the CKTEA should be directed to the Strategic Policy Directorate (SPD), at telephone number 819-956-6497.


SACC CLAUSES

K5000D (XX/XX/XX) CKTEA Definitions

Remarks: THIS CLAUSE IS TO APPEAR IN FULL TEXT IN PROCUREMENT DOCUMENTS. Use the following clause whenever definitions are required for procurement covered by the special procedures under the Canada-Korea Agreement on the Procurement of Telecommunications Equipment (CKTEA). This clause should not be used when the procurement is also covered by the WTO-AGP. The special procedures under the CKTEA should only be used for procurement not covered by the WTO-AGP. For procurement covered by both the CKTEA and the WTO-AGP, procedures for the WTO-AGP are followed. This clause must always be used whenever clauses K5001T, K5002T, K5003T, K5004T, K5005T and K5006T are used.

Text:

For the purpose of the CKTEA:

1. (a) A Good is considered a Canadian or Korean good, for the purpose of this Policy, if it is considered so under Canada's "Determination of Country of Origin for the Purposes of Marking Goods (NAFTA Countries) Regulations". Article 8 of these Regulations, which provides for a NAFTA tariff preference override, cannot be used for determining whether a good is Canadian.

(b) An "Incidental Service" means any service that is included in a tender for the procurement of a Covered Good under this Agreement.

A Service provided by an individual based in Canada or Korea is considered a Canadian or Korean service, respectively. Where a requirement consists of only one service, which is being provided by more than one individual, the service will be considered Canadian or Korean if a minimum of 60 percent of the total bid price for the service is provided by individuals based in Canada or Korea.

(c) "Territory" means:

  • (i) with respect to Korea, the territory of Korea as well as those maritime areas, including the seabed and subsoil adjacent to the outer limit of the territorial areas over which Korea exercises, in accordance with international law, sovereign rights or jurisdiction for the purpose of exploration and exploitation of natural resources of such areas.
  • (ii) with respect to Canada, the territory to which its customs laws apply, including any areas beyond the territorial seas of Canada within which, in accordance with international law and its domestic laws, Canada may exercise rights with respect to the seabed and subsoil and their natural resources;

2. Variety of goods: When requirements consist of more than one good, the evaluation can be done in two ways:

  1. aggregate evaluation: no less than 60 percent of the total bid price must consist of Canadian and/or Korean goods; or,
  2. item by item evaluation: in some cases, the bid evaluation may be conducted on an item-by-item basis and contracts may be awarded to more than one supplier. In these cases, suppliers will be asked to identify separately each item that meets the definition of Canadian or Korean goods.

3. Mix of goods and services: when requirements consist of a mix of goods and services, no less than 60 percent of the total bid price must consist of Canadian and/or Korean goods and services (as defined above).


K5001T (XX/XX/XX) CKTEA Certification

Remarks: THIS CLAUSE IS TO APPEAR IN FULL TEXT IN PROCUREMENT DOCUMENTS. Use the following clause in all competitive bid solicitations in which the special procedures under the CKTEA are applicable (see Supply Manual) and where competition is being solely limited to bids offering Canadian and/or Korean Goods and Services. This clause is to be used for single item requirements and multi-item requirements that are being certified on an aggregate basis. This clause must be used in conjunction with clause K5000D, CKTEA Definitions.

Text:

1. This procurement is limited to Canadian and/or Korean Goods and Services as defined in clause K5000D, CKTEA Definitions.

2. The Bidder represents and warrants that, of the Goods and Services being offered, no less than 60 percent of the bid price consists of Canadian and/or Korean Goods and Services as defined in clause K5000D, CKTEA Definitions.

3. The Bidder acknowledges that the Minister relies upon such representation and warranty to evaluate bids and to enter into any contract resulting from this bid. Such representation and warranty of Canadian or Korean content may be verified in such manner as the Minister may reasonably require.

4. Should a verification by the Minister disclose a breach of such covenant, the Minister shall have the right to treat any contract resulting from this bid as being in default.

5. If a Bidder is unable to verify the origin of Goods or Services offered in the bid, then the bid will be considered non-responsive.

6. Failure to execute this representation and warranty on the signature block immediately following this paragraph and to include it with the bid will render the bid non-responsive.

___________________
Signature
___________________
Date


K5002T (XX/XX/XX) CKTEA Certification

Remarks: THIS CLAUSE IS TO APPEAR IN FULL TEXT IN PROCUREMENT DOCUMENTS. Use the following clause in all competitive bid solicitations in which the special procedures under the CKTEA are applicable (see Supply Manual) and where competition is being conditionally limited to bids offering Canadian and/or Korean Goods and Services. This clause is to be used for single item requirements and multi-item requirements that are being certified on an aggregate basis. This clause must be used in conjunction with clause K5000D, CKTEA Definitions.

Text:

1. This procurement is subject to a preference for Canadian and/or Korean Goods and Services as defined in clause K5000D, CKTEA Definitions.

2. Bids that include this representation and warranty will be given preference over other bids, if there are two or more bids with a valid certification.

3. By executing this representation and warranty, the Bidder Represents and warrants that, of the goods and services being offered, no less than 60 percent of the bid price consists of Canadian and/or Korean Goods and Services, as defined in the clause K5000D, CKTEA Definitions.

4. The Bidder acknowledges that the Minister relies upon such representation and warranty to evaluate bids and to enter into any contract resulting from this bid. Such representation and warranty of Canadian or Korean content may be verified in such manner as the Minister may reasonably require.

5. Should a verification by the Minister disclose a breach of such covenant, the Minister shall have the right to treat any contract resulting from this bid as being in default.

6. If a Bidder is unable to verify the origin of Goods or Services offered in the bid, then the bid will be considered non-responsive.

7. Failure to execute this representation and warranty on the signature block immediately following this paragraph and to include it with the bid will result in the Goods and Services offered being treated as non-Canadian and/or non-Korean.

___________________
Signature
___________________
Date


K5003T (XX/XX/XX) CKTEA Certification

Remarks: THIS CLAUSE IS TO APPEAR IN FULL TEXT IN PROCUREMENT DOCUMENTS. Use the following clause in all competitive bid solicitations in which the special procedures under the CKTEA are applicable (see Supply Manual) and where competition is being solely limited to bids offering Canadian and/or Korean Goods and Services. This clause is to be used for multi-item requirements that are being certified on an individual item basis and where the bidder will be required to indicate beside each item, listed in the bid, whether the item is Canadian or Korean. This clause must be used in conjunction with clause K5000D, CKTEA Definitions.

Text:

1. This procurement is limited to Canadian and/or Korean Goods and Services as defined in clause K5000D, CKTEA Definitions.

2. By executing this representation and warranty, the Bidder represents and warrants that, of the goods and services being offered, items individually identified as such in the bid are Canadian or Korean Goods and Services as defined in clause K5000D, CKTEA Definitions, and acknowledges that only those items will receive consideration.

3. Bids may be accepted in whole or in part.

4. The Bidder acknowledges that the Minister relies upon such representation and warranty to evaluate bids and to enter into any contract resulting from this bid. Such representation and warranty of Canadian or Korean content may be verified in such manner as the Minister may reasonably require.

5. Should a verification by the Minister disclose a breach of such covenant, the Minister shall have the right to treat any contract resulting from this bid as being in default.

6. If a Bidder is unable to verify the origin of Goods or Services offered in the bid, then the bid will be considered non-responsive.

7. Failure to execute this representation and warranty on the signature block immediately following this paragraph and to include it with the bid will render the bid non-responsive.

___________________
Signature
___________________
Date


K5004T (XX/XX/XX) CKTEA Certification

Remarks: THIS CLAUSE IS TO APPEAR IN FULL TEXT IN PROCUREMENT DOCUMENTS. Use the following clause in all competitive bid solicitations in which the special procedures under the CKTEA are applicable (see Supply Manual) and where competition is being solely limited to bids offering Canadian and/or Korean Goods and Services. This clause is to be used for multi-item requirements that are being certified on an individual item basis and where the bidder is to list in the clause those items in its bid that are to be considered Canadian or Korean Goods and Services. This clause must be used in conjunction with clause K5000D, CKTEA Definitions.

Text:

1. This procurement is limited to Canadian and/or Korean Goods and Services as defined in clause K5000D CKTEA Definitions.

2. Bids may be accepted in whole or in part.

3. The Bidder represents and warrants that, of the Goods and Services being offered, the following items are Canadian or Korean Goods and Services as defined in clause K5000D, CKTEA Definitions, and acknowledges that only those items will receive consideration.

____________________
____________________
____________________
____________________
____________________
____________________
____________________

4. The Bidder acknowledges that the Minister relies upon such representation and warranty to evaluate bids and to enter into any contract resulting from this bid. Such representation and warranty of Canadian or Korean content may be verified in such manner as the Minister may reasonably require.

5. Should a verification by the Minister disclose a breach of such covenant, the Minister shall have the right to treat any contract resulting from this bid as being in default.

6. If a Bidder is unable to verify the origin of Goods or Services offered in the bid, then the bid will be considered non-responsive.

7. Failure to execute this representation and warranty on the signature block immediately following this paragraph and to include it with the bid will render the bid non-responsive.

___________________
Signature
___________________
Date


K5005T (XX/XX/XX) CKTEA Certification

Remarks: THIS CLAUSE IS TO APPEAR IN FULL TEXT IN PROCUREMENT DOCUMENTS. Use the following clause in all competitive bid solicitations in which the special procedures under the CKTEA are applicable (see Supply Manual) and where competition is being conditionally limited to bids offering Canadian and/or Korean Goods and Services. This clause is to be used for multi-item requirements that are being certified on an individual item basis and where the bidder will be required to indicate beside each item, listed in the bid, whether the item is Canadian or Korean. This clause must be used in conjunction with clause K5000D, CKTEA Definitions.

Text:

1. This procurement is subject to a preference for Canadian and/or Korean Goods and Services as defined in clause K5000D, CKTEA Definitions.

2. On an item-by-item basis, items that include this representation and warranty will be given preference over other bids, if there are two or more bids with a valid certification. Bids may be accepted in whole or in part.

3. By executing this representation and warranty, the Bidder represents and warrants that, of the goods and services being offered, items individually identified as such in the bid are Canadian or Korean Goods and Services as defined in clause K5000D, CKTEA Definitions.

4. The Bidder acknowledges that the Minister relies upon such representation and warranty to evaluate bids and to enter into any contract resulting from this bid. Such representation and warranty of Canadian or Korean content may be verified in such manner as the Minister may reasonably require.

5. Should a verification by the Minister disclose a breach of such covenant, the Minister shall have the right to treat any contract resulting from this bid as being in default.

6. If a Bidder is unable to verify the origin of Goods or Services offered in the bid, then the bid will be considered non-responsive.

7. Failure to execute this representation and warranty on the signature block immediately following this paragraph and to include it with the bid will result in all Goods and Services offered being treated as non-Canadian and non-Korean.

___________________
Signature
___________________
Date


K5006T (XX/XX/XX) CKTEA Certification

Remarks: THIS CLAUSE IS TO APPEAR IN FULL TEXT IN PROCUREMENT DOCUMENTS. Use the following clause in all competitive bid solicitations in which the special procedures under the CKTEA are applicable (see Supply Manual) and where competition is being conditionally limited to bids offering Canadian or Korean Goods and Services. This clause is to be used for multi-item requirements that are being certified on an individual item basis and where the bidder is to list in the clause those items in its bid that are to be considered Canadian or Korean Goods and Services. This clause must be used in conjunction with clause K5000D, CKTEA Definitions.

Text:

1. This procurement is subject to a preference for Canadian and/or Korean Goods and Services as defined in clause K5000D, CKTEA Definitions.

2. On an item-by-item basis, items that include this representation and warranty will be given preference over other bids, if there are two or more bids with a valid certification. Bids may be accepted in whole or in part.

3. The Bidder represents and warrants that, of the Goods and Services being offered, the following items are Canadian or Korean Goods or Services as defined in clause K5000D, CKTEA Definitions:

____________________
____________________
____________________
____________________
____________________
____________________
____________________

4. The Bidder acknowledges that the Minister relies upon such representation and warranty to evaluate bids and to enter into any contract resulting from this bid. Such representation and warranty of Canadian or Korean content may be verified in such manner as the Minister may reasonably require.

5. Should a verification by the Minister disclose a breach of such covenant, the Minister shall have the right to treat any contract resulting from this bid as being in default.

6. If a Bidder is unable to verify the origin of Goods or Services offered in the bid, then the bid will be considered non-responsive.

7. Failure to execute this representation and warranty on the signature block immediately following this paragraph and to include it with the bid will result in all Goods and Services offered being treated as non-Canadian and non-Korean.

___________________
Signature
___________________
Date


K5100C (XX/XX/XX) CKTEA Certification

Remarks: THIS CLAUSE IS TO APPEAR IN FULL TEXT IN PROCUREMENT DOCUMENTS. Use the following clause in all contracts where the winning bidder's eligibility for consideration required the completion and submission of a signed CKTEA certification.

Text:

1. The Contractor represents and warrants that the certification of Canadian and/or Korean content submitted with its bid is accurate and complete, and that the goods and services to be provided to Canada pursuant to this Contract will be in accordance with the said certification. The Contractor acknowledges that the Minister has relied upon such representation and warranty to enter into this Contract. Such representation and warranty may be verified in such manner as the Minister may reasonably require.

2. The Contractor acknowledges that in the event of a breach of such covenant, the Minister shall have the right to treat the Contract as being in default in accordance with the default provisions of the Contract.

3. The Contractor shall keep proper records and documentation relating to the origin of the goods and services provided to Canada. The Contractor shall not, without the prior written consent of the Minister, dispose of any such records or documentation until the expiration of six (6) years after final payment under this Contract, or until settlement of all outstanding claims and disputes, whichever is later. All such records and documentation shall at all times during the aforementioned retention period be open to audit, inspection and examination by the authorized representatives of the Minister, who may make copies and take extracts thereof. The Contractor shall provide all facilities for such audits, inspections and examinations, and shall furnish all such information as the representatives of the Minister may from time to time require with respect to such records and documentation.

4. Nothing in this clause shall be interpreted as limiting the rights and remedies which Canada or the Minister may otherwise have in relation to or pursuant to this Contract.


A9110T (XX/XX/XX) Land Claims Set-Aside

Remarks: THIS CLAUSE IS TO APPEAR IN FULL TEXT IN PROCUREMENT DOCUMENTS. Insert the following clause in full text at the beginning of the bid solicitation when the procurement is being set aside under the Land Claims Set-Aside Policy. Ensure that the applicable trade agreement is identified in the clause. Treasury Board of Canada Secretariat Contracting Policy Notice 1997-8 of December 10, 1997, provides further detail into the implementation of contracting obligations under the Comprehensive Land Claims Agreements.

Text:

This procurement is set aside from ______ (insert as applicable: the North American Free Trade Agreement Annex 1001.2b, Article 1(d); World Trade Organization - Agreement on Government Procurement, Appendix I, article 1(d) or the Canada-Korea Procurement of Telecommunications Equipment Agreement (CKTEA), Article 1, part 5 (see Annex 4.2), and/or Agreement on Internal Trade (AIT), Article 1802 [see Annex 4.7].)


SUPPLY MANUAL CHANGES

CHAPTER 4 - NATIONAL AND INTERNATIONAL TRADE AGREEMENTS

  • Comprehensive Land Claims Agreements
  • Procurement Obligations
  • Requirements Definition
  • Notification of Procurement
  • NAFTA
  • WTO-AGP
  • CKTEA
  • Agreement on Internal Trade (AIT)
  • Canadian International Trade Tribunal
  • Annex 4.1: SERVICES COVERAGE FOR THE WTO-AGP DEFINED BY THE COMMON CLASSIFICATION SYSTEM (CCS)
  • Annex 4.2: CANADA-KOREA AGREEMENT ON THE PROCUREMENT OF TELECOMMUNICATIONS EQUIPMENT(CKTEA)
  • Annex 4.3: TREASURY BOARD POLICY IMPLEMENTING THE CKTEA
  • Annex 4.4: AGREEMENT ON INTERNAL TRADE
  • Annex 4.7: AIT: EXCERPTS FROM PART I, GENERAL DEFINITIONS, CHAPTER TWO; AND, PART VI, FINAL PROVISIONS, CHAPTER EIGHTEEN

CHAPTER 5 - SOURCING STRATEGY

  • Determining the Extent of Competition
  • Use of the National Security Exceptions
  • Comprehensive Land Claims Agreements
  • NAFTA, WTO-AGP, CKTEA and AIT
  • Competitive Processes
  • Procurements Subject to Trade Agreements
  • Procurements Not Subject to Trade Agreements
  • NAFTA, WTO-AGP, CKTEA and AIT Tendering Approaches
  • Determining Eligible Bidders
  • Set-Aside Program for Aboriginal Business
  • CKTEA
  • Canadian Content Policy
  • Procurement Review for Socio-Economic Benefits
  • Shipbuilding, Repair, Refit and Modernization
  • Printing
  • Employment Equity
  • Science and Technology
  • Supplier Qualifications
  • Requirements less than $25,000
  • Procurement Business Number
  • Solicitation Methods
  • Invitation to Tender
  • Request for Proposal
  • Request for Quotation
  • T-Buy
  • Standing Offer
  • Industrial Security
  • Supply Arrangements (SA)
  • Annex 5.1: SPECIAL OPERATING AGENCIES
  • Annex 5.2: DETAIL DOCUMENT - PSC
  • Annex 5.3: CONTRACT AWARD PROCESS (CAP) CODES
  • Annex 5.5: THE RULES OF ORIGIN DETERMINATION

CHAPTER 7 - COMPETITIVE PROCUREMENT

SECTION 7A: PREPARING A BID SOLICITATION

  • Documents
  • Terms and Conditions
  • Bid Solicitation and Comprehensive Land Claims Agreements
  • NAFTA and WTO-AGP
  • CKTEA
  • Canadian Content
  • Bid Closing
  • Bid Security
  • Performance
  • Bidders' Conference and Site Visits
  • Progress Payments and Advance Payments
  • Interest Payments on Overdue Accounts
  • Cash Discount Considerations
  • Payment by Credit Card
  • Audit Clauses
  • Cost Reimbursable
  • Fixed Time Rate
  • Method of Bid Response
  • Canadian Arsenals Limited Certification
  • Transportation Costs
  • Truck Haulage Rates
  • Multi-Item Bids
  • Royalty Payments and Licence Agreements
  • Intellectual Property
  • Exchange Rate Fluctuations
  • Soliciting Standing Offers
  • Services - Non-Permanent Residents
  • Former Public Servants
  • Taxes and Duties
  • Customs Duty
  • Withholding of 15% on Service Contracts with Non-Residents
  • Defence Supplies
  • Duty and Taxes on Tools, Equipment or Spare Parts in Contracts for Services by Non-residents
  • Excise Taxes
  • Goods and Services Tax/Harmonized Sales Tax
  • Employment Equity
  • Joint Ventures
  • U.S. Defense Priorities and Allocations System

SECTION 7D: BID HANDLING

  • Authority
  • Bid Timeliness
  • Bid Receiving
  • Bid Opening
  • Handling of Sensitive Documents
  • Public Opening of Tenders
  • Modification and Withdrawal of Bids
  • Modification
  • Withdrawal
  • Bid Discrepancies
  • Evaluation of Responses
  • Employment Equity
  • CKTEA
  • Canadian Content
  • Unsolicited Offers
  • Qualifying Joint Venture Bids
  • Clarifications
  • Client Review
  • Taxes and Duties
  • Financial Security
  • Transportation Costs
  • Exchange Rate Issues
  • Identical Low Bids
  • Multi-Item Bids
  • Bid Rigging/Collusion/Fraud
  • Non-Standard Terms and Conditions
  • No Responsive Bid
  • One Responsive Bid
  • Negotiations
  • Bypassing a Supplier
  • Extending the Bid Validity Period
  • Cancelling and Reissuing a Bid Solicitation
  • Notification to Unsuccessful Bidders
  • Ship Construction and Refit
  • Other Requirements

CHAPTER 4 - NATIONAL AND INTERNATIONAL TRADE AGREEMENTS

4.001(XX/XX/XX) Comprehensive Land Claims Agreements (CLCAs), the North American Free Trade Agreement (NAFTA), the World Trade Organization - Agreement on Government Procurement (WTO-AGP), the Canada - Korea Procurement of Telecommunications Equipment Agreement (CKTEA) and the Agreement on Internal Trade (AIT) require Public Works and Government Services Canada (PWGSC) to comply with specific procedures when carrying out certain procurements. Therefore, a decision must be made as to whether or not the requisition is subject to a particular agreement, or a combination of agreements.

To determine coverage under the NAFTA, WTO-AGP, CKTEA and AIT agreements, the requisition value, the client, the type of good or service, and any exceptions or exclusions must be reviewed. Coverage under CLCAs is based on where the service will be performed or the good will be delivered.

The estimated amount of the Goods and Services Tax (GST) and/or the Harmonized Sales Tax (HST) must be included when determining the requisition value.

Comprehensive Land Claims Agreements

4.002 (XX/XX/XX) CLCAs contain specific government contracting obligations which PWGSC is legally obligated to comply with. These obligations apply when contracting for the provision of goods, services or construction in areas subject to CLCAs.

Procurement that is subject to CLCAs, and one or more of the trade agreements (NAFTA, WTO-AGP, CKTEA, AIT) may involve special procedures. (See 4.009, 4.010, 4.011, 4.012.) Procurement that is subject to CLCAs, but not to any of the trade agreements, must adhere to all procurement policies applicable to non NAFTA , WTO-AGP, CKTEA and AIT procurements. For example, application of the Canadian Content Policy for requirements over $25,000.

To the extent possible the procedures and policies which implement the individual CLCAs are designed to achieve the following objectives which have been established by Treasury Board Secretariat (TBS):

  1. increase the participation by aboriginal groups in business opportunities in the settlement area;
  2. improve the capacity of aboriginal firms to compete for government contracts in the settlement area; and
  3. employ aboriginals at a representative level in the workforce of the settlement areas.

For any procurement which has contracting activities that take place within Comprehensive Land Claims Settlement Areas (CLCSAs), contracting officers should consult the Operational Policy Directorate (OPD), at telephone number 819-956-0863 to determine whether a CLCA may affect the overall procurement strategy. OPD will assist contracting officers in identifying these obligations and in developing methods of meeting them on a case-by-case basis.

NEW Canada-Korea Agreement on the Procurement of Telecommunications Equipment (CKTEA)

4.011 (XX/XX/XX) The CKTEA is a bilateral agreement between Canada and Korea which covers federal government procurement of telecommunications goods and incidental services (services included in a covered goods contract). The CKTEA was signed in early July 1999. The Treasury Board Policy implementing the CKTEA was approved in May 2001 (See Annex 4.3).

Implementation of the CKTEA is different from implementation of NAFTA and the WTO-AGP in that, when a procurement is covered by the CKTEA, preference may be given to suppliers of Canadian and/or Korean goods.

Procurement covered by both the CKTEA and the WTO-AGP should follow procedures set out for the WTO-AGP, as Canada has committed through the WTO-AGP to open these procurements to Korea and the other WTO-AGP members.

With the exception of items listed under FSC 58, procurement which may be considered procurement of a Covered Good in accordance with the above definition is also covered by the WTO-AGP.

Procurement covered by the CKTEA, but not the WTO-AGP, should follow the special procedures set out in this Manual.

Special procedures for procurement covered by the CKTEA combine elements from procedures applying to the WTO-AGP and to the Canadian Content Policy. Any questions on application of the CKTEA should be directed to the Strategic Policy Directorate (SPD), at telephone number 956-6497.

The national treatment and non-discrimination provisions and procurement procedures of the CKTEA are similar to those for the WTO-AGP.

To determine whether the CKTEA is applicable, the Agreement and the TB Policy implementing the Agreement must be consulted. (see Annexes 4.2 and 4.3).

If all of the following four CKTEA criteria are met, the procurement is subject to CKTEA. If any one of the criteria is not met, the procurement is not subject to CKTEA.

  1. Determine if procurement is for mainly telecommunications goods, rather than for services or construction. See Annex 1 of CKTEA (Annex 4.2);
  2. Determine the value of the requisition.
    See CKTEA, Article I, Objective, Definitions and Scope of the Agreement, (Annex 4.2);
    WTO-AGP, Article II, Valuation of Contracts, and

    The thresholds in the CKTEA are presented in Special Drawing Rights (SDRs), the unit of account of the International Monetary Fund. For the period January 1, 2000 to December 31, 2001, a procurement may be subject to CKTEA if the requisition has a value in Canadian dollars of $261,200. See Article 1 of CKTEA (Annex 4.2);

  3. Determine the coverage by client. See Annex 1 of CKTEA (Annex 4.2).
  4. Determine that the requirement is covered by the Agreement:
    1. The CKTEA does not apply to the following contracts:
      • procurement of goods and services with a view to commercial resale or use in the production of goods for commercial sale;
      • procurement in respect of set-asides for small and minority businesses; or
      • procurement for the Departments of Transport, Fisheries and Oceans, and Communications respecting Federal Supply Classifications 36, 70 and 74.
    2. Exceptions to the Agreement are the same as in Article XXIII of the WTO-AGP.
      (http://www.wto.org/english/tratop_e
      /gproc_e/agrmnt_e.htm#Article XXIII.)

Section 4.011 currently in the Supply Manual should be renumbered 4.012.

4.013 (XX/XX/XX) Contracting officers should note that when the procurement is covered by more than one agreement, the procedures to be followed are the procedures which are considered the most rigorous, for example, for limited tendering reasons, procurements covered by NAFTA, WTO-AGP and AIT, only the limited tendering reasons that are common to all three agreements are available as options. (See 5.031.)

4.014 (XX/XX/XX) NAFTA, WTO-AGP, CKTEA and AIT require that each party to the specific agreement maintain an independent bid challenge authority. The Canadian International Trade Tribunal (CITT) (http://www.citt.gc.ca/menu_e.htm) has been designated as the bid challenge authority for Canada for NAFTA, WTO-AGP, CKTEA and AIT. A potential supplier may file a complaint concerning a procurement action to the CITT, on the grounds that any aspect of the procurement process relating to a requirement covered by NAFTA, WTO-AGP, CKTEA or AIT is unfair or discriminatory.

Complaints to the CITT should be addressed to:

Canadian International Trade Tribunal
Procurement Review Division
Standard Life Centre
333 Laurier Avenue West
Ottawa, Ontario K1A 0G7

Telephone: 613-990-1988
Facsimile: 613-992-3686

4.015 (XX/XX/XX) The Tribunal's mandate authorizes it to receive complaints pertaining to any aspect of the procurement process up to and including contract award, conduct inquiries and make determinations. In dealing with a complaint, the Tribunal must determine whether the government institution responsible for the procurement under review has complied with the requirements of NAFTA, WTO-AGP, CKTEA and AIT and such other procedural requirements, as prescribed in the Canadian International Trade Tribunal Procurement Inquiry Regulations.

Sections 4.015 to 4.017 currently in the Supply Manual should be renumbered 4.016 to 4.018.

CHAPTER 5 - SOURCING STRATEGY

5.010 (XX/XX/XX) The Canadian International Trade Tribunal (CITT), in its decision PR-98-005, has found that the Assistant Deputy Minister of the Supply Operations Services Branch (ADM/SOSB) has the authority to invoke the use of the national security exception, to exclude a procurement from the WTO-AGP, NAFTA, CKTEA and the AIT trade agreements.

5.012 (XX/XX/XX) Therefore, to comply with this interpretation, the following procedure is now in effect:

  1. All proposals invoking the national security exceptions to exclude a procurement from the WTO-AGP, or NAFTA, or CKTEA or the AIT or any combination of the agreements must be submitted to the ADM/SOSB for approval, regardless of dollar value. A formal Procurement Plan will be used as the approval mechanism. The formal Procurement Plan must be approved by the ADM before the Notice of Proposed Procurement, Advance Contract Award Notice or bid solicitation document is released.
  2. If none of the conditions listed in 6E.662 which normally require a formal Procurement Plan apply, a Contract Planning and Advance Approval (CPAA) may be prepared and submitted for approval with the formal Procurement Plan. Approval of the CPAA, in addition to approval of the formal Procurement Plan, would allow award of the contract without further reference to the approval authority if there are no significant changes from the approved CPAA. Without approval of the CPAA, the appropriate Contract Request Form will have to be executed prior to contract award.
  3. The utilization of the national security exceptions must be documented. Contracting officers must explain clearly in the Sourcing section of the Procurement Plan that the National Security exception is being invoked, specifying each of the trade agreements from which the procurement is being excluded.

NAFTA, WTO-AGP, CKTEA and AIT

5.030 (XX/XX/XX) With the introduction of trade agreements like NAFTA, WTO-AGP, CKTEA and AIT, the non-competitive approach to the procurement process is limited tendering. Limited tendering is a process which allows deviations from the competitive process including the ability to contact a sole or single supplier or a number of suppliers individually. This in fact means that it is possible to have a competitive procurement within a limited tendering procurement. This concept should be kept in mind when examining the following circumstances (limited tendering reasons) for NAFTA, WTO-AGP, CKTEA and AIT. (see 5.031, see 5.032, see 5.033, see 5.036 and see 5.037.). For procurement covered by the CKTEA, the limited tendering rules of the WTO-AGP are applied (CKTEA, Article 3).

In procedures 5.031, 5.032, 5.033, 5.036 and 5.037 the applicable Contract Award Process (CAP) Code is included with each of the limited tendering reasons. This was done in order to ensure that the comparable limited tendering reason for each of the agreements (NAFTA, WTO-AGP, CKTEA and AIT) will be coded by contracting officers in a consistent manner. Annex 5.3 - Contract Award Process (CAP) Codes illustrates the permissible CAP Codes depending on the type of solicitation chosen for the particular procurement.

"...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." (NAFTA Agreement, Article 1016,1.)

5.031 (XX/XX/XX) For procurements subject to either NAFTA, WTO-AGP, CKTEA and AIT, limited tendering procedures may only be used under the following conditions:

  1. 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, on condition that the requirements of the initial procurement are not substantially modified in the contract as awarded; (CAP Code 05)
  2. 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; (CAP Code 71)
  3. where, for reasons of extreme urgency brought about by events unforeseeable by the entity, the goods or services could not be obtained in time by means of open or selective tendering procedures; (CAP Code 81)
  4. 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; (CAP Code 74) and

    * For procurements subject to AIT only, compatibility with existing equipment or services is acceptable and would be subject to a less stringent test than the interchangeability under NAFTA/WTO-AGP/CKTEA.

  5. 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. 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. Where such contracts have been fulfilled, subsequent procurement of goods or services shall be competed, where applicable; (CAP Code 72)
  6. for goods purchased on a commodity market; (CAP Code 20)
  7. 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; (CAP Code 21) and
  8. for a contract to be awarded to the winner of an (architectural) design** contest (CAP Code 22), on condition that the contest is:
    1. organized in a manner consistent with the principles of openness and fairness and is publicly advertised to suitably qualified suppliers to participate in the contest; and
    2. organized with a view to awarding the design contract to the winner; and
    3. to be judged by an independent jury.***
  9. ** For procurements subject to NAFTA only, the design contest is specifically architectural.
  10. *** For procurements subject to AIT only, conditions for an independent jury are not required.

5.041 (XX/XX/XX) For procurements subject to NAFTA, WTO-AGP, CKTEA or AIT, or a combination of these, public advertisement/notification provisions specified within these trade agreements must be followed. The procedures to be followed are generally consistent for all of the agreements. When there are inconsistencies, the contracting officer must select the procedures that demonstrate the highest example of openness, e.g. The longer of two bidding periods.

Competitive procurements covered by NAFTA and/or the WTO-AGP must be advertised on the Government Electronic Tendering Service (GETS) and in the Government Business Opportunities (GBO) only. Procurements that are covered by the AIT and/or CKTEA must be advertised on GETS only. A procurement that is covered by the AITand/or the CKTEA, and is also covered by NAFTA or the WTO-AGP must be advertised on both GETS and in the GBO. Additional notification processes (e.g. direct contact with suppliers), are not permitted.

Publication on the GETS, and, in the GBO for NAFTA or the WTO-AGP procurements is required when using:

  1. Open tendering; and,
  2. Selective tendering,
    1. Covered by NAFTA and WTO-AGP (or these agreements in combination with other agreements including the AIT and/or CKTEA):

      When using a one-time source list, notice must be published to invite suppliers to qualify for inclusion on the list. Notice must also be given to solicit bids. This would normally require the publishing of two separate notices.

      - When using a permanent source list, a notice must be published annually identifying the existence of the source list and how to qualify and notice must also be published for each bid solicitation involving the use of the list; and,

    2. Covered by AIT only when using a one-time or permanent source list a notice must be published annually identifying the existence of the source list and how to qualify.

    For procurements subject to the Comprehensive Land Claims Agreements (CLCAs), contracting officers must check the particular CLCA to ensure that correct notification has been provided.

5.047 (XX/XX/XX) Except for those procurements covered under NAFTA, WTO-AGP, CKTEA or AIT, public advertising (GETS or other public media) is not required for the following:

  1. Procurements for the protection of Canada's essential security interests; this can only be exercised when:
    1. the Department of National Defence (DND) certifies that the requirement meets national security requirements, or
    2. the bid documentation from any client is classified "TOP SECRET", "SECRET" or "CONFIDENTIAL" or designated "PROTECTED";
  2. procurements from government rehabilitation institutions (e.g. CORCAN);
  3. local procurements made by Public Works and Government Services Canada (PWGSC) offices abroad;
  4. Major Crown Projects;
  5. procurements for bulk foods and fertilizer made in furtherance of "tied aid" to developing countries;
  6. procurements subject to direction by Cabinet, legislation or regulations such as the Small Arms Replacement Project, Munitions Supply Programs, Defence Industry Productivity Program (DIPP), FMS, and Shipbuilding;
  7. procurements subject to the Canada/U.S. Defence Production Sharing Program, or the European Research, Development and Production agreeements;
  8. procurements for the Canadian Commercial Corporation (CCC).

    For these requirements, source lists may be appropriate.

NAFTA, WTO-AGP, CKTEA and AIT Tendering Approaches

5.050 (XX/XX/XX) For procurements under NAFTA, WTO-AGP, CKTEA or AIT, there are three tendering approaches.

  1. Open Tendering - where a Notice of Proposed Procurement (NPP) is advertised, any individual, firm or other eligible supplier is free to submit a bid.

    Open Tendering is the preferred approach.

  2. Selective Tendering -
    1. Selective Tendering not involving the use of a permanent list of suppliers* - a two stage procurement where potential bidders express an interest in participating and meet predetermined qualifications for participation publicized in the NPP at the first stage. Bid documentation is issued to those bidders meeting the qualifications at the second stage. For NAFTA, WTO-AGP and CKTEA, an NPP must be published at both stages of the procurement (it is also acceptable to amend the original NPP once the bid closing date has been determined). Any supplier who wishes to bid at the second stage may do so, as long as there is sufficient time to carry out the qualification process.
    2. Selective Tendering involving the use of a permanent list of suppliers - where a source list is developed and maintained and qualified suppliers for the product or service in question are issued the bid documentation. Any other potential supplier who requests bid documentation must be considered. For NAFTA, WTO-AGP, CKTEA and AIT, an annual notice of the existence of the source list must be published (use the NPP form). For AIT, when using a source list, all qualified suppliers in a given category on a source list must be invited to bid for all procurement in that category.
  3. Limited Tendering - a process which allows for deviations from the above procurement practices. In situations, where a specific limited tendering justification can be applied, limiting the number of suppliers, to one or more suppliers, is allowed (see 5.030).

    *A permanent list of suppliers is a source list.

CKTEA

5.067 (NEW) (XX/XX/XX) The CKTEA is an international trade agreement signed by the Government of the Republic of Korea and the Government of Canada covering the procurement of telecommunications equipment (see 4.011). Any questions on application of the CKTEA should be directed to the Strategic Policy Directorate (SPD), at telephone number 956-6497.

5.068 (NEW) (XX/XX/XX) Under the CKTEA, a Covered Good is defined as:

  • telecommunications (wireline and wireless) equipment and materials originating in the territories of Canada and Korea that are components of telecommunications networks, including switching, transmission, access and terminal equipment, or that are used in the development, configuration, installation, operation, maintenance, repair and management of telecommunications networks; and
  • research and development equipment, testing and measurement equipment and training equipment that are included in a tender for the procurement of telecommunications equipment and materials covered by the CKTEA.

For procurements involving the following Federal Supply Classification (FSC) 58 categories, the procedures detailed in this policy must always be followed:

N5805 Telephone and Telegraph Equipment
N5815 Teletype and Facsimile Equipment
N5820020 to N5820700 Radio Transmitters, Receivers and Transceivers

Other categories of FSC 58 may also be covered by the CKTEA if the good could be considered a Covered Good as defined above.

With the exception of items listed under FSC 58, procurement which may be considered procurement of a Covered Good in accordance with the above definition is also covered by the World Trade Organization Agreement on Government Procurement (WTO-AGP). Procurement covered by both Agreements should follow procedures set out for the WTO-AGP, as Canada has committed through the WTO-AGP to open these procurements to Korea and the other WTO-AGP members.

For procurement covered by the CKTEA, but not by the WTO-AGP), the following definitions are applicable:

  1. A good is considered a Canadian or Korean Good, for the purpose of this Policy only, if it is considered so under Canada's "Determination of Country of Origin for the Purposes of Marking Goods (NAFTA Countries) Regulations". Article 8 of these Regulations, which provides for a NAFTA tariff preference override, cannot be used to determine whether a good is Canadian.
  2. "Incidental Service" means any service that is included in a tender for the procurement of a Covered Good under this Agreement.

    A service provided by an individual based in Canada or Korea is considered a Canadian or Korean service, respectively. Where a requirement consists of only one service, which is being provided by more than one individual, the service will be considered Canadian or Korean if a minimum of 60 percent of the total bid price for the service is provided by individuals based in Canada or Korea respectively.

  3. "Territory" means:
    1. with respect to Korea, the territory of Korea as well as those maritime areas, including the seabed and subsoil adjacent to the outer limit of the territorial areas over which Korea exercises, in accordance with international law, sovereign rights or jurisdiction for the purpose of exploration and exploitation of natural resources of such areas.
    2. with respect to Canada, the territory to which its customs laws apply, including any areas beyond the territorial seas of Canada within which, in accordance with international law and its domestic laws, Canada may exercise rights with respect to the seabed and subsoil and their natural resources.

5.069 (XX/XX/X) The bidder will certify Canadian and/or Korean content by signing a statement that the products offered meet the definition of Canadian and/or Korean Goods and Services. The certification forms are contained in the Standard Acquisition Clauses and Conditions (SACC) Manual under clause numbers K5001T, K5002T, K5003T, K5004T, K5005 and K5006T.

Canadian Content Policy

5.071 (XX/XX/XX) The Canadian Content Policy applies to competitive procurements, publicly advertised, with an estimated value of $25,000 or more, except for the following:

  1. government procurements subject to the NAFTA, WTO-AGP or CKTEA;
  2. procurements made in furtherance of aid to developing countries, but does apply to purchases made by the Canadian International Development Agency (CIDA) on its own account;
  3. procurements made by Public Works and Government Services Canada (PWGSC) Supply Operations Offices located outside Canada; and
  4. Cabinet-mandated Sourcing, including Sourcing Relating to Shipbuilding, Ship Repair, Refit and Mid-Life Modernization

Procurement Review for Socio-Economic Benefits

5.094 (XX/XX/XX) The PSC divides procurements into the following categories:

A. WTO-AGP/NAFTA/CKTEA requirements

G. All other including requirements subject to AIT with the following exceptions: Foreign Military Sales, Security Services, Temporary Help Services, procurements under the Munitions Supply Program and requirements subject to the Shipbuilding Policy.

Cases for detailed review by the PRC are normally selected from Category G. Although the PRC does not review procurements that are subject to WTO-AGP NAFTA and CKTEA , these must still be screened by the PSC.

Shipbuilding, Repair, Refit and Modernization

5.104 (XX/XX/XX) The PWGSC procedures for sourcing suppliers for work on Canadian government vessels derive from the government's Shipbuilding Procurement Policy. The objective of the policy is to encourage competition amongst Canadian shipyards. For all competitive shipbuilding requirements as defined in the Shipbuilding Procurement Policy, subject to AIT, contracting officers must ensure that the details of the restrictions or practices are highlighted in the Notice of Proposed Procurement (NPP)/solicitation documentation.

The NPP/solicitation documentation must contain the following statement:

"The sourcing strategy relating to this procurement will be limited to suppliers in the (as applicable) Region of Origin or the (as applicable) Area of Origin in accordance with the Shipbuilding Procurement Policy."

For procurements below $2 million subject to the Shipbuilding Procurement Policy, the CAN must also contain these details.

The following procedures (5.105 to 5.110) apply only when the procurement is not subject to NAFTA, WTO-AGP or CKTEA. NAFTA Chapter 10, Annex 1001.2b, paragraph 1.(a) and WTO-AGP Annex 4 exempts "shipbuilding and repair". The CKTEA covers telecommunications equipment.

Employment Equity

5.112 (XX/XX/XX) The eligibility of suppliers to bid on procurement opportunities may be limited by the Federal Contractors Program for Employment Equity. Contracts for requirements for goods and services valued at $200,000 or more must be awarded to vendors who:

  1. have signed the Certificate of Commitment;
  2. choose to comply with the employment equity requirements by sending the Certificate of Commitment or providing the certification number, prior to contract award; or
  3. are exempted from the employment equity policy.

When the bid is accompanied by an original certificate, the contracting officer will forward that original to the:

Chief, Federal Contractors Program
Human Resources Development Canada (HRDC)
Place du Portage, Phase II
165 Hotel de Ville Street, 10th Floor
Gatineau, Québec K1A 0J2

OR fax at 613-953-8768.

For requirements falling under the scope of NAFTA, WTO-AGP or CKTEA, the employment equity requirements only apply to vendors operating under Canadian jurisdiction

Supplier Qualifications

5.116 (XX/XX/XX) Suppliers to the Canadian government must demonstrate to the satisfaction of the Canadian government that they have the legal, technical, financial and management competence to discharge the contract. The eligibility of suppliers to bid may be restricted by requiring bidders to meet pre-established qualification criteria. (See Section 6B)

For procurements subject to NAFTA, WTO-AGP, CKTEA or any combinations of these agreements, interested potential bidders who do not meet such a specified standard must be able to apply for the qualification after the notice of procurement is advertised, and the process of qualification must be started promptly. No discrimination between foreign suppliers or between domestic or foreign suppliers shall be made when establishing qualification criteria.

A particular area for attention is personnel security screening and/or organization's security clearance, where, due to the time it can take to process such requirements, it may be necessary to stipulate appropriate security screening requirements as a mandatory element of bids. (See 6C.270 and 7E.540)

Request for Proposal

5.144 (XX/XX/XX) The preparation of proposals is often costly to industry. To keep the total cost to industry down while ensuring freedom of access to potential suppliers, consideration should be given to soliciting proposals in two steps.

During the first step of this process, suppliers are requested to provide letters of interest and qualifications, from which a short list is developed. During the second step, suppliers on the short list are requested to submit detailed proposals.

Suppliers not included on the short list can request the RFP and submit proposals.

Such a process might be appropriate where many potential suppliers are known. Contracting officers should note, however, the special procedures required under NAFTA, WTO-AGP and CKTEA for selective tendering.

Standing Offer Forms

5.160 (XX/XX/XX) The process of preparing an SO is subject to normal contracting policies and procedures including NAFTA, WTO-AGP, CKTEA, AIT, or the involvement of the PRC, where appropriate. For the purposes of internal review, approval and quality control only, SOs are approved and signed at the same level of authority as contracts.

Annex 5.3: CONTRACT AWARD PROCESS (CAP) CODES

Listed below are the Solicitation Types, the permissible Contract Award Process (CAP) Codes and the reason for using a particular CAP Code. (Revised 01/01/96)

SOLICITATION TYPES

N = North American Free Trade Agreement (NAFTA)
W = World Trade Organization - Agreement on Government Procurement (WTO-AGP)
CK = Canada-Korea Agreement on the Procurement of Telecommunications Equipment
I = Agreement on Internal Trade (AIT)
S = Science and Technology
O = Open Bidding
L = Comprehensive Land Claims Agreements

CAP Code: 01
Solicitation Types: N, W, CK, I, S, O, L

Lowest/lower Bid

CAP Code: 04
Solicitation Types: N, W, CK, I, S, O, L

Best Overall Proposal

CAP Code: 05
Solicitation Types: N, W, CK, I, S, O, L

In the absence of tenders in response to a competitive bid solicitation or when bids submitted have been either collusive or assessed as non-responsive or received from non-qualified suppliers.

CAP Code: 06
Solicitation Types: N, W, CK, I, S, O, L

Only One Response to Bid Solicitation

CAP Code: 10
Solicitation Types: S, O, L

Rotational Sourcing

CAP Code: 11
Solicitation Types: S, O, L

Subsequent/Follow-on Contracts

CAP Code: 20
Solicitation Types: N, W, CK, I, S, O, L

For goods purchased on a commodity market.

CAP Code: 21
Solicitation Types: N, W, CK, I, S, O, L

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.

CAP Code: 22
Solicitation Types: N, W, CK, I, S, O, L

To be awarded to the winner of a design contest.

CAP Code: 23
Solicitation Types: N, I, S, O, L

For consulting services regarding matters of a confidential nature.

CAP Code: 24
Solicitation Type: W, CK

When additional construction services which were not included in the initial contract but which were within the objectives of the original tender documentation.

CAP Code: 25
Solicitation Type: W, CK

For new construction services consisting of the repetition of similar construction services which conform to a basic project for which an initial contract was awarded.

CAP Code: 71
Solicitation Types: N, W, CK, I, S, O, L

For reasons connected with protection of exclusive rights, such as patents and copyrights, and no reasonable alternative or substitute existed.

CAP Code: 72
Solicitation Types: N, W, CK, I, S, O, L

For reasons involving the procurement of prototypes or a first product which is developed under a contract for research, experiment, study or original development.

CAP Code: 74
Solicitation Types: N, W, CK, I, S, O, L

For logistic reasons (i.e. where additional deliveries by the original supplier are intended either as replacement parts for existing supplies, or installations, or for continuing services, or as the extension of existing supplies, services or installations, where a change of supplier would compel the client to procure equipment or services not meeting requirements of interchangeability with already existing equipment or services).

CAP Code: 81
Solicitation Types: N, W, CK, I, S, O, L

For reasons connected with extreme urgency, brought about by events unforeseeable by the client, where time did not permit competitive solicitation.

CAP Code: 85
Solicitation Types: S, O, L

Low Dollar Value

CAP Code: 86
Solicitation Types: I, S, O, L

Prices and/or sources fixed by Government regulations

CAP Code: 87
Solicitation Types: I, S, O, L

Government objectives representing best interests/value to Government.

CAP Code: 88
Solicitation Types: I, S, O, L

National Security Consideration

CAP Code: 89
Solicitation Type: I

Exceptional circumstances under AIT Article 508(l)

CAP CODE: 90
Solicitation Type: I

Protection of human, animal, or plant life or health under AIT Article 506.11 (e)

SECTION 6B: DEFINING THE REQUIREMENT

6B.090 (XX/XX/XX) A bid solicitation should not specify a product with no substitute. The salient physical, functional or other characteristics essential to the client's needs should be stated. Products known to be equivalent to a "brand name" can also be cited, but caution must be exercised to ensure that there is no conflict between the brand names specified and the description provided.

For procurement subject to either the North American Free Trade Agreement (NAFTA), World Trade Organization - Agreement on Government Procurement (WTO-AGP) or the Canada - Korea Procurement of Telecommunications Equipment Agreement (CKTEA), technical specifications shall 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 bid documentation.

6B.144 (XX/XX/XX) Where there is no alternative to specifying a product with no substitute, the solicitation should whenever possible include provision for equivalent products, and the criteria that will be used to determine equivalency.

For procurements subject to NAFTA, WTO-AGP, CKTEA or AIT, provision for equivalent products must be made.

Economic Price Adjustments in Firm Price Contracts

6C.297 (XX/XX/XX) Under unstable market conditions, one or more elements of the cost of a good or service may be subject to significant fluctuations in price so that neither the buyer nor the seller would have confidence in accepting a fixed or firm price over an extended period of time. Contracting officers should seek to reduce the risk of uncertainty.

Economic price adjustments should not normally be included in contracts with delivery schedules of less than 12 months, or contracts valued under $100,000.

There are a number of possible actions:

  • postponing the procurement;
  • using available substitute materiel;
  • providing advance information on requirements to potential contractors so as to benefit from their improved ability to control costs by forward planning and to make full use of the commodity futures market in appropriate circumstances;
  • reducing the period of term contracts or the quantities ordered on production contracts;
  • increasing production rates to compress the duration of contracts;
  • reducing administrative time allowances in the procurement process (solicitation, award decision, issuance of contract and authority to commence work) - but taking into account required time frames under the North American Free Trade Agreement (NAFTA), the World Trade Organization - Agreement on Government Procurement (WTO-AGP) and the Canada - Korea Procurement of Telecommunications Equipment Agreement (CKTEA);
  • procuring the unstable element separately (in the construction industry, this technique is known as pretendering);
  • isolating the unstable element in pricing the work and providing for price adjustment, both upward and downward, on it alone, in accordance with a reliable predetermined formula such as an established economic index.

Transportation Charges

6E.621 (XX/XX/XX) All goods requirements with an estimated expenditure of $25,000 (including GST/HST) or more, and with transportation charges exceeding $1,500 are subject to a detailed analysis of such charges by the Traffic Management Directorate, with the following exceptions:

  1. contracts for repair and overhaul, development, engineering services, technical studies and tooling;
  2. capital assistance;
  3. construction of complete ships or complete aircraft;
  4. contracts in which clients retain control of all or part of delivery;
  5. contracts for perishable foods;
  6. purchases from Canadian suppliers on behalf of a foreign government or agency, unless assistance is requested by that government or agency;
  7. standing offers, where order quantities and destination are unknown;
  8. food and bulk fertilizer purchases under an external aid program;
  9. requirements for multiple items which may result in more than one contract and for which identification of individual transportation costs is not practicable;
  10. contracts for complete systems where multiple components may be shipped from multiple sources and locations and for which establishment of an FOB Origin cost is impractical;
  11. service contracts; and
  12. procurements covered by NAFTA, WTO-AGP or the CKTEA unless a non-competitive process under one of the Limited Tendering reasons in the Agreement is used.

6E.663 (XX/XX/XX) The Procurement Plan must include the following elements:

DESCRIPTION

Give a brief description of the requirement.

ESTIMATED COST AND NAME OF CLIENT

ANTICIPATED CONTRACT APPROVAL AUTHORITY REQUIRED

SOURCING

Identify applicable trade agreements (NAFTA, WTO-AGP, CKTEA, AIT and CLCAs) and any significant policies governing sourcing decisions (Set-aside Program for Aboriginal Business; Canadian Content; Transportation Equalization Program; Shipbuilding, Repair, Refit and Modernization, etc.)

Explain the sourcing strategy i.e. GETS, GBO, other public advertising, source lists (one time, ongoing).

Substantiate any decision to go sole source.

POLICY ISSUES

Attach relevant Procurement Strategy Committee/Procurement Review Committee documents (see 5.090).

Identify any other relevant socio-economic considerations.

Outline any special or unusual aspects of the procurement.

Recommend a course of action to resolve or handle any problems involving potential major risks or deviations from sourcing policy or other PWGSC policy. Where there are major risks inherent in the proposed approach, they must be examined in consultation with PWGSC financial and legal officers.

EVALUATION CRITERIA

Identify the evaluation criteria and the selection method to be used with any bid solicitation, including pricing basis, point rating or mandatory/desirable criteria for the technical evaluation.

MILESTONES

Give target dates for important milestones (e.g. bid solicitation, contract award, delivery schedule).

ADDITIONAL COMMENTS

Include any information that should be brought to the approval authority's attention.

CONTRACTING OFFICER

State the name, sector/region, division and telephone number of the officer responsible for the project.

COMMENTS

Leave two or three lines for comments by the approval authority.

Annex 6.1.8: CONTRACT APPROVAL AND SIGNING AUTHORITIES IN SUPPORT OF CLIENTS' PROGRAMS ONLY - OTHER THAN FOR CANADIAN COMMERCIAL CORPORATION

4. Limited Tendering Reasons

4.1 A new information field entitled Limited Tendering Reasons has been added after the "Non-competitive" field, to identify reasons for pursuing a non-competitive or limited competition procurement. This field will be used to identify one of the 15 Limited Tendering Reasons detailed in Annex B.

Architectural and engineering services requirements that were previously identified as being sourced using SPEC (Selection, Prequalification and Evaluation of Consultants) will now be identified as Limited Tendering Reason # 85, which makes reference to the TB Exception to the requirement to solicit bids for A&ES that do not exceed $100,000 (TB Contracting Policy, Ref. 10.2.1 (b)).

Annex B

LIMITED TENDERING REASONS
Coverage Permissable CAP Code Abbreviated Limited Tendering Reason Actual TB/Agreement Reference
NAFTA, WTO-AGP, AIT or any combination thereof; or ABSA*; or None* 5 no responses to bid solicitation... NAFTA 1016.2 (a)
WTO-AGP XV.1 (a)
CKTEA 3.1
AIT 506.11 (f)
20 goods purchased on a commodity market... NAFTA 1016.2 (f)
WTO-AGP XV.1 (h)
CKTEA 3.1
AIT 506.12 (d)
21 purchases made under exceptionally advantageous conditions, short term... NAFTA 1016.2 (g)
WTO-AGP XV.1 (i)
CKTEA 3.1
AIT 506.12 (i)
22 awarded to the winner of a design contest... NAFTA 1016.2 (h)
WTO-AGP XV.1 (j)
CKTEA 3.1
AIT 506.12 (g)
71 exclusive rights... TB Man 10.2.1 (d)
NAFTA 1016.2 (b)
WTO-AGP XV.1 (b)
CKTEA 3.1
AIT 506.12 (b) (j)
72 prototype purchase... NAFTA 1016.2 (e)
WTO-AGP XV.1 (e)
CKTEA 3.1
AIT 506.12 (h)
74 interchangeable parts... NAFTA 1016.2 (d)
WTO-AGP XV.1 (d)
CKTEA 3.1
AIT 506.12 (a)
81 extreme urgency... TB Man. 10.2.1 (a)
NAFTA 1016.2 (c)
WTO-AGP XV.1 (c)
CKTEA 3.1
AIT 506.11 (a)
NAFTA and/or AIT 23 consulting services regarding matters of a confidential nature... NAFTA 1016.2 (i)
CKTEA 3.1
AIT 506.11 (b)
WTO-AGP only 24 additional construction services... WTO-AGP XV.1 (f)
CKTEA 3.1
25 new construction services... WTO-AGP XV.1 (g)
CKTEA 3.1
AIT only 86 prices and/or sources fixed by government regulations... AIT 506.12 (c)
90 protection of human, animal or plant life or health... AIT 506.11 (e)
AIT and/or None
*ABSA*
87 government objectives representing best interests/ value to government... TB Man. 10.2.1 (c)
TB CPN 1997-3
AIT 506.11 (c) (d)
AIT 506.12 (e) (f) (k) (l)
ABSA*
None*
85 low dollar value... TB Man. 10.2.1 (b)

CKTEA

(Note: Special procedures only apply to procurement covered by the CKTEA, but not by the WTO-AGP)

7A.006 (XX/XX/XX) When requirements consist of more than one good, the certification for Canadian and/or Korean content can be done in the following ways:

  1. Aggregate. Multi-item requirements will be certified on an aggregate basis; or,
  2. Item by Item. Multi-item requirements will be certified on an item-by-item basis. In these cases, suppliers will be asked to identify separately, each item that meets the definition of Canadian or Korean goods in 5.068.

7A.007 (XX/XX/XX) For procurement to which the special procedures under the CKTEA applies, the procurement officer shall decide, at the procurement planning stage, whether a competition is:

  1. Solely Limited: The solicitation should be solely limited to suppliers who could offer Canadian and/or Korean goods and services when the procurement officer believes there exists in the marketplace, two or more such suppliers (solely limited certifications are provided in the SACC Manual under clause numbers K5001T, K5003T, K5004T); or
  2. Conditionally Limited: The solicitation may be conditionally limited when the procurement officer is uncertain whether two or more suppliers of Canadian and/or Korean goods and services exist (conditionally limited certifications are provided in the SACC Manual under clause numbers K5002T, K5005T or K5006T); or
  3. Open: When the procurement officer is of the opinion that two or more suppliers of Canadian and/or Korean goods and services do not exist, the solicitation shall be open to all suppliers. Bidders are not required to provide a certification.

7A.008 (XX/XX/XX) Once the sourcing strategy is determined, the procurement officer will prepare a Notice of Proposed Procurement (NPP). The procurement opportunity will be coded on the GETS as:

Solely Limited, per procedure 7A.007 a);

Conditionally Limited, per procedure 7A.007 b); or,

Open, per procedures 7A.007 c).

Publicly Advertised Procurement

7B.160 (XX/XX/XX) Public advertising using the Government Electronic Tendering Service (GETS) is Public Works and Government Services Canada's (PWGSC) preferred notification process for competitive procurements. Procedures 5.047 and 5.048 identify when a different notification method may be considered .

The GETS is the only recognized medium for public advertising under the Agreement on Internal Trade (AIT) and Canada -Korea Procurement of Telecommunications Equipment Agreement (CKTEA), whereas the GETS and the Government Business Opportunities (GBO) are the recognized media under the North American Free Trade Agreement (NAFTA), and the World Trade Organization - Agreement on Government Procurement (WTO-AGP). All Notices of Proposed Procurement (NPPs) for CKTEA and AIT procurements must be advertised on the GETS and all NPPs for NAFTA and/or WTO-AGP procurements must be simultaneously advertised on both the GETS and in the GBO. Contracting officers must indicate in the NPP which agreement or agreements apply, using the Agreement Type Code.

For those contracting officers not on the Automated Buyer Environment (ABE) system, the following statements must be typed in manually, for all requirements, as part of the NPP or Advance Contract Award Notice (ACAN):

"The Crown reserves the right to negotiate with suppliers on any procurement."

"Documents may be submitted in either official language of Canada."

The ABE system will perform this function automatically.

7B.183 (XX/XX/XX) For procurements not subject to NAFTA and/or the WTO-AGP , if the electronic notice is received at MERX by 17:00 on a given day, and all the elements (notice, document, attachments) match and are correct, then the notice will be posted on GETS for the next day.

For NAFTA and/or WTO-AGP procurements, the commencement of the publishing period must coincide with the publication of the notice in the GBO. Therefore, the publication of any notice on the GETS will be delayed as necessary to coincide with its publication in the GBO. The GBO is published on Tuesdays and Fridays, and the processing of a GBO notice will generally take up to 5 days.

7B.186 (XX/XX/XX) MERX returns a confirmation of postings to PWGSC, on a daily basis. GTIS, upon receipt of the daily feed from MERX, puts the confirmations in a "readable" format and then arranges for the dissemination of this information to each area of procurement, for further distribution to each contracting officer. (See 7B.192)

With the exception of procurements subject to NAFTA, WTO-AGP, CKTEA and AIT, contracting officers may send a copy of the NPP to suppliers when it is considered necessary to ensure adequate competition. However, these suppliers are still required to purchase the solicitation documents from MERX. A covering letter should also be sent to suppliers. (See Annex 7.6 for samples.)

Determining the Bidding Period

7B.211 (XX/XX/XX) For procurements that are not subject to NAFTA, WTO-AGP or the CKTEA, (whether publicly advertised or not) the bidding period should not be less than fifteen (15) calendar days either from the date the requirement is posted publicly or, in the case of procurements not publicly advertised, from the date the bid solicitations are released.

When notices are advertised in more than one public medium (i.e. GETS and other public media) every effort should be made to ensure that the notices appear concurrently. Notices for procurements subject to NAFTA and/or WTO-AGP must be posted simultaneously on GETS and in the GBO for the specified minimum periods. (See 7B.183)

A decision to reduce the prescribed bidding period is a business decision made by the contracting officer, dependent on the circumstances of the procurement and the established minimum periods. The contracting officer must ensure that there is sufficient documented support for the decision.

7B.212 (XX/XX/XX) For procurements that are subject to NAFTA, WTO-AGP and/or the CKTEA, the following periods for receipt of bids shall apply.

  1. For open tendering procedures, the period for the receipt of bids shall not be less than 40 calendar days from the date the NPP is first published in the GBO (in the GETS for CKTEA).
  2. For selective tendering procedures not involving the use of a permanent list of qualified suppliers, the period for submitting an application to be invited to bid is no less than 25 calendar days from the date of publication of the NPP in the GBO (in the GETS for CKTEA). The period for the receipt of bids shall not be less than 40 calendar days from the date of issuance of the tender documents.
  3. For selective tendering procedures involving the use of a permanent list of qualified suppliers, the period for the receipt of bids shall not be less than 40 calendar days from the date of issuance of the tender documents, and shall not be less than 40 calendar days from the date of publication of the NPP in the GBO (in the GETS for CKTEA).
  4. For an enterprise (Crown corporation) subject to NAFTA only, the period for the receipt of bids shall be 24 calendar days for Crown corporations that have published a notice of proposed procurement for a minimum of 40 calendar days but not more than 12 months.
  5. Where an enterprise (Crown corporation) subject to NAFTA only is using, as an invitation to participate, a notice of proposed procurement regarding a qualification system, the period for the receipt of bids may be fixed by mutual consent but may not be less than 10 calendar days.

Any time period for publication may be reduced to no less than:

  • 24 calendar days for second or subsequent publications relating to recurring contracts, providing the original NPP stated when the subsequent publication notice would be issued; or
  • 10 calendar days when a state of urgency can be substantiated.

NAFTA, WTO-AGP and the CKTEA specify minimum publication periods. Operational Policy Directorate can assist in determining whether a proposed reduction to the minimum bid period is within the provisions of the agreements. At that point, the business decision as to how much the bid period is to be reduced is to be made by the contracting officer.

Changes to a Bid Solicitation

7C.256 (XX/XX/XX) A decision to extend the bidding period beyond the initially established closing date is a business decision that can be made by the contracting officer, based on the circumstances of the particular procurement. It may be possible to process an extension of the bidding period in a relatively short time frame (more or less 24 hours) where bids have been invited using source lists, or where the publicly advertised procurement is not subject to NAFTA, WTO-AGP or the CKTEA. However, since all notices related to publicly advertised solicitations subject to NAFTA and the WTO-AGP must be published in the Government Business Opportunities (GBO) at the same time as it is published in GETS, the posting of such notices will be delayed until the GBO is ready for publication, which generally takes five (5) working days.

Canadian Content

CKTEA

Certification of the Bid

7D.361 (XX/XX/XX) When requirements consist of more than one good, the evaluation of certification under the special procedures of the CKTEA can be done the following ways:

  1. Aggregate: a minimum of 60 percent of the total bid price must consist of Canadian and/or Korean goods; or,
  2. Item by Item: The bid certification is conducted on an item-by-item basis.

When the requirements consist of a mix of goods and incidental services, 60 percent of the total bid price must consist of Canadian and/or Korean goods and Canadian and/or Korean services.

An incidental service is any service that is included in a tender for the procurement of a Covered Good under this Agreement.

A service provided by an individual based in Canada or Korea is considered a Canadian or Korean service, respectively. Where a requirement consists of only one service, which is being provided by more than one individual, the service will be considered Canadian or Korean if a minimum of 60 percent of the total bid price for the service is provided by individuals based in Canada or Korea respectively.

A bid can be accepted in part without resubmission of a certification.

Application of the Special Procedures under the CKTEA

(Note: When a procurement is covered by both the CKTEA and the WTO-AGP, the procedures under the WTO-AGP are followed.)

7D.362 (XX/XX/XX) Bids to which the special procedures under the CKTEA apply, will be evaluated as follows:

  1. For Solely Limited solicitations, only bids with valid certifications will be evaluated. The bid evaluation process can proceed where there is at least one bid with a valid certification, otherwise the procurement must be retendered.
  2. For Conditionally Limited solicitations, the procurement officer will, prior to the further evaluation of the bids, determine whether there are two or more bids with a valid certification. In this event, the evaluation will be limited to the bids with certification, otherwise all bids will be considered. If the bids with a valid certification are later determined to be non-responsive or withdrawn, and only one responsive bid of Canadian and/or Korean goods and services remains, the bid evaluation process will proceed. If all bids with a valid certification are subsequently found to be non-responsive or if their bids are withdrawn, then all other bids received should be evaluated.

7D.363 (XX/XX/XX) The onus is on the supplier to demonstrate that its bid meets the definition of Canadian and/or Korean goods and services. The supplier must execute and submit the certification form with bid (see 5.069). When the Standard Acquisition Clauses and Conditions (SACC) Manual clauses K5003T, K5004T, K5005T or K5006T (Individual Item Evaluation) are used, the supplier must clearly identify the status of each individual product.

PWGSC may verify the validity of the certification. If the certification is found to be invalid, then the offered goods or services are deemed not to meet the definition of Canadian or Korean under the CKTEA. Verification of the certification shall in no way alter the price quoted or any substantive element of the bid.

Negotiations

7D.449 (XX/XX/XX) For all procurements that are subject to the North American Free Trade Agreement (NAFTA), the World Trade Organization - Agreement on Government Procurements (WTO-AGP), or the Canada - Korea Procurement of Telecommuniations Equipment Agreement (CKTEA), the contracting officer may only enter into negotiations if one of the two conditions specified in NAFTA or the WTO-AGP is present; conditions under the WTO-AGP apply to CKTEA-covered procurement). Negotiations must proceed in accordance with the steps outlined in these agreements. (Refer to NAFTA, Article 1014 (http://www.dfait-maeci.gc.ca/nafta-alena/chap10-e.asp#Section B); or WTO-AGP, Article XIV (http://www.wto.org/english/tratop_e/gproc_e/agrmnt_e.htm#Article XIV), as appropriate. When both agreements apply, refer to NAFTA Article 1014.)

7D.450 (XX/XX/XX) For procurements that are not subject to NAFTA, the WTO-AGP or the CKTEA,

  1. when a Request for Proposal (RFP) was used, negotiations may be entered into
    1. prior to the completion of proposal evaluation, provided that they are held with all bidders that submitted responsive bids; or,
    2. after the proposal evaluation, with only one bidder, provided that the bidder submitted the only responsive proposal, or the bidder was selected after evaluating more than one responsive proposal and it can be demonstrated that if the negotiations had been held with all of the bidders that submitted responsive proposals, there would have been no change in the firm selected;

    The ability to prove that the same supplier will be selected regardless of whether negotiations are conducted with all responsive bidders presupposes that the requirement (e.g. Technical specifications) will not change during negotiations, and, therefore, that other bidders given the same opportunity, could not submit different, and, perhaps, better offers.

  2. when an Invitation to Tender (ITT) was used, where there is more than one responsive bid, but neither the lowest bid nor the other bids represent fair value, the contracting officer must have determined before considering entering into negotiations, that it would not be more effective to cancel the solicitation and meet the requirement using another supply method. When urgency is a major factor, the results of the original ITT might be capable of being used as the basis for entering into negotiations with bidders;
  3. when an RFQ was used, negotiations should be avoided, with the exception that some negotiations may be necessary if the requirement was not adequately defined originally.

Bypassing a Supplier

7D.455 (XX/XX/XX) If it is proposed to bypass the supplier who would be awarded a contract based on the published evaluation criteria and selection method, approval to enter into the proposed contract must be sought at the appropriate non-competitive level. The award must be fully justified and documented on file.

This procedure is not permitted for procurements subject to NAFTA, the WTO-AGP, CKTEA or the Agreement on Internal Trade (AIT). For example, NAFTA Article 1015, 4 (c) states that "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 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." Provisions with the same effect exist in the other two agreements.

Cancelling and Reissuing a Bid Solicitation

7D.468 (XX/XX/XX) Contracting officers may reissue a bid solicitation, with the approval of the director (headquarters)/manager (regions) or above, where:

  1. a significant change has occurred in a requirement before a contract is awarded;
  2. all bids are non-responsive or do not represent fair value; or
  3. the bid acceptance period has expired before a contract is placed.

For procurements that are subject to NAFTA, the WTO-AGP, CKTEA or the AIT, when there are no responsive bidders or the procurement is substantially modified, the bid solicitation must be cancelled.

Contracting officers may reissue a bid solicitation, with the approval of the manager (headquarters)/division chief (regions) or above, where no bids were received in response to a competitive solicitation.

Forms of Contract Award

7E.502 (NEW) (XX/XX/XX) Contracts awarded on the basis of the bid having met the definition of Canadian or Korean content under the CKTEA will include SACC Manual clause K5100C.

7E.503 (XX/XX/XX) Contracts awarded on the basis of the bid having met the definition of Canadian content under the Canadian Content Policy will include SACC Manual clause K4100C.

Posting of Award Notices

7F.718 (XX/XX/XX) For procurements that are subject to, NAFTA and WTO-AGP, an Award Notice must be published on the GETS as well as in the Government Business Opportunity within seventy-two (72) days of awarding the contract. For procurements that are subject to the CKTEA, an Award Notice must be published on the GETS within seventy-two (72) days of awarding the contract. Although there are no minimum time periods identified for the AIT, the seventy-two (72)-day limit applies for reasons of consistency.

Award notices are generated by ABE and sent to MERX once the contracting officer releases the procurement summary with the electronic coding sheet. An Award Notice will be generated for all solicitations that have been publicly advertised on MERX, regardless of the value of the resultant contract.

Annex 7.7

REMARKS

23. If deviations from the provisions of the World Trade Organization - Agreement on Government Procurement (WTO-AGP), the North American Free Trade Agreement (NAFTA), the Canada - Korea Procurement of Telecommunications Equipment Agreement (CKTEA) or the Agreement on Internal Trade (AIT) are recommended, provide reasons for the deviation.

Advance Contract Award Notice

8.017 (XX/XX/XX) ACANs shall be posted for a minimum of fifteen (15) calendar-days on GETS. Where the procurement is subject to either the NAFTA or the WTO-AGP, the fifteen (15) calendar days shall commence on the date the ACAN is published in the GBO. For procurements covered by the CKTEA and the Agreement on Internal Trade, the publishing period commences with the publication of the ACAN on the GETS. (See 7B.183)

If there are no challenges within this fifteen (15) calendar-day period, the contracting officer may proceed with the award.

Notwithstanding the above, when a Statement of Capabilities is received after the specified date but before the award of the contract, the contracting officer must nevertheless consider the statement of capabilities prior to proceeding with the procurement. To do otherwise would contravene the Government Contracts Regulations.

SECTION 9A: PURCHASES FROM CORRECTIONAL SERVICES CANADA

9A.4 (XX/XX/XX) Article 1018 2(d) of the North America Free Trade Agreement (NAFTA) allows for the exemption of procurements relating to goods or services of prison labour. A similar provision exists in the World Trade Organization - Agreement on Government Procurement (WTO-AGP), and the Canada - Korea Procurement of Telecommunications Equipment Agreement (CKTEA) and in the Agreement on Internal Trade (AIT), Article 507 (c).

SECTION 9B: UNITED STATES FOREIGN MILITARY SALES

9B.13 (XX/XX/XX) PWGSC headquarters shall determine, before procurement through FMS is initiated, whether the provisions of the North American Free Trade Agreement (NAFTA), the World Trade Organization - Agreement on Government Procurement (WTO-AGP) or the Canada - Korea Procurement of Telecommunications Equipment Agreement (CKTEA) apply and shall take action accordingly. When these provisions do not apply, PWGSC shall determine whether there is an existing or potential source of supply in Canada and after consultations with DND, or any other client, shall establish whether in the circumstances, it would be more advantageous for the Government of Canada to procure in Canada or directly from the original equipment manufacturer in the U.S. or from the U.S. DOD.

9B.16 (XX/XX/XX) PWGSC contracting officers shall determine the price and availability of material, which is reported by DND to be available through FMS/Defined Order and Blanket Cases and when the procurement in question is not subject to the procurement provisions of NAFTA, WTO-AGP, or CKTEA.

SECTION 9D: DEFENCE INDUSTRY PRODUCTIVITY PROGRAM CONTRIBUTION

AGREEMENT SERVICES

9D.1 (XX/XX/XX) Public Works and Government Services Canada (PWGSC) provides services relating to the preparation and management of contribution agreements for Defence Industry Productivity Program (DIPP) projects in accordance with the terms of the Memorandum of Agreement established between PWGSC and Industry Canada (IC) in 1981. Contribution agreements are not subject to the North American Free Trade Agreement (NAFTA), the World Trade Organization - Agreement on Government Procurement (WTO-AGP), the Canada-Korea Procurement of Telecommuniations Equipment Agreement (CKTEA) or the Agreement on Internal Trade (AIT).

SECTION 9J: SUPPLY ARRANGEMENTS

9J.2 (XX/XX/XX) Solicitations made under an SA, depending on the circumstances, may be subject to all North American Free Trade Agreement (NAFTA), World Trade Organization - Agreement on Government Procurement (WTO-AGP), the Canada-Korea Procurement of Telecommunications Equipment Agreement (CKTEA) and the Agreement for Internal Trade (AIT) procedures (see Chapter 4). An SA solicitation meeting the NAFTA, WTO-AGP and/or CKTEA requirements would be considered Selective Tendering not involving the use of a permanent list of qualified suppliers (see 5.050 (b)) and a solicitation meeting the AIT requirement would be considered as using a source list (see Article 506, AIT). For procurements covered under NAFTA, WTO-AGP, CKTEA and AIT, the following procedures should be modified, if necessary, to take into account the obligations of the Agreements.

SECTION 9L: SET-ASIDE PROGRAM FOR ABORIGINAL BUSINESS - CONDUCTING SET-ASIDE PROCUREMENTS

9L.050 (XX/XX/XX) Procurements set aside for Aboriginal business are not subject to the provisions of either the North American Free Trade Agreement (NAFTA), Annex 1001.2b, Article 1(d) (http://www.dfait-maeci.gc.ca/nafta-alena
/chap10ac-e.asp#Annex 1001.2b) or World Trade Organization - Agreement on Government Procurement (WTO-AGP), Appendix I, article 1(d) (http://www.wto.org/english/tratop_e/gproc_e/can-note.doc), or the Canada-Korea Procurement of Telecommunications Equipment Agreement (CKTEA), Article 1, part 5 (see Annex 4.2), or Agreement on Internal Trade (AIT), Article 1802 (see Annex 4.7).

9L.110 (XX/XX/XX) In support of the PSAB, departments may designate that a proportion of subcontracts on projects be reserved for Aboriginal business, or that bidders are to be encouraged through the use of incentives - e.g. additional evaluation points to engage Aboriginal businesses as subcontractors. The inclusion of Aboriginal businesses as subcontractors as an evaluation criterion must be clearly identified in the bid solicitation. This is not permitted for procurements subject to either NAFTA (Article 1006 - Prohibition of Offsets); WTO-AGP (Article XVI - Offsets) or CKTEA (Article 3 - Procurement Procedures). (See 9L.050)

SECTION 9M: LAND CLAIMS SET-ASIDE POLICY

9M.010 (XX/XX/XX) The Land Claims Set-aside Policy establishes procedures for setting aside procurements covered by the North American Free Trade Agreement (NAFTA) and the World Trade Organization - Agreement on Government Procurement (WTO-AGP) that are subject to Comprehensive Land Claims Agreements, National Park Agreements, or Department of National Defence (DND) Co-operation Agreements. For procurement covered by the CKTEA, the procedures for procurement covered by the WTO-AGP should be followed.

9M.030 (XX/XX/XX) Determine whether a procurement is covered by both a land claims agreement and NAFTA, the WTO-AGP and/or the CKTEA. (See 4.002, 4.009, 4.010 and 4.011 Respectively.)

If a procurement is subject to NAFTA, the WTO-AGP and/or the CKTEA, and one or more of the land claims agreements, the portion for delivery within the Comprehensive Land Claims Settlement Areas (CLCSA) should be procured separately from the portion for delivery outside of the CLCSA, where this is feasible.

The portion of the procurement for delivery outside of the CLCSA will continue to be procured according to the provisions in the NAFTA, the WTO-AGP and/or CKTEA.

The procurement (or portion of the procurement) for delivery within the CLCSA is to be set aside from NAFTA, WTO-AGP and the CKTEA. The provision for "set-asides for small and minority businesses" is found in NAFTA, Annex 1001.2b, Article 1(d) (http://www.dfait-maeci.gc.ca/nafta-alena
/chap10ac-e.asp#Annex 1001.2b); the WTO-AGP, Appendix I, Article 1(d) (http://www.wto.org/english/tratop_e/gproc_e/can-note.doc) and the CKTEA, Article 1, part 5 (see Annex 4.2). In order to effect that set-aside, specific references from the applicable land claims agreements must be inserted into the NPP and the bid solicitation document. This procurement will be known as a Land Claims Set-Aside" or "LCSA".

9M.050 (XX/XX/XX) Insert the following information (SACC clause A9110T) at the beginning of the text box in the NPP for the procurement which is being set aside.

"This procurement is set aside from ________ (insert as applicable: the North American Free Trade Agreement Annex 1001.2b, Article 1(d); World Trade Organization - Agreement on Government Procurement, Appendix I, article 1(d) or the Canada-Korea Procurement of Telecommunications Equipment Agreement (CKTEA), Article 1, part 5 (see Annex 4.2), and/or Agreement on Internal Trade (AIT), Article 1802 (see Annex 4.7).)

Insert the following information at the end of the text box in the NPP, indicating the applicable section, corresponding land claims agreement, and clause numbers from the Treasury Board of Canada Secretariat Contracting Policy Notice 1997-8. Refer to the Chart for this information. Do not include the text of the provisions in the NPP. For procurement covered by the CKTEA, the procedures for procurement covered by the WTO-AGP should be followed.

"The benefits that apply to this procurement are contained in: ... ."

For example, a procurement that is subject to the Inuvialuit Final Agreement might read as follows:

"The benefits that apply to this procurement are contained in: Section 2, the Inuvialuit Final Agreement, clauses

16(8), (b), (c)."

9M.060 (XX/XX/XX) Insert the following information (SACC clause A9110T) at the beginning of the bid solicitation document.

"This procurement is set aside from _________ (insert as applicable: the North American Free Trade Agreement Annex 1001.2b, Article 1(d); World Trade Organization - Agreement on Government Procurement, Appendix I, article 1(d) or the Canada-Korea Procurement of Telecommunications Equipment Agreement (CKTEA), Article 1, part 5 (see Annex 4.2), and/or Agreement on Internal Trade (AIT), Article 1802 (see Annex 4.7).)

Insert the applicable SACC clause(s) at the end of the bid solicitation document, but before any annexes or appendices. Refer to the Chart for the list of SACC clauses.

Coding

9M.080 (XX/XX/XX) Procurements to which NAFTA, the WTO-AGP and/or the CKTEA are applied must be coded accordingly; procurements which were set-aside under this Land Claims Set-Aside Policy must be coded as LCSA and identified as a "set-asides for small and minority businesses" derogation.

When a procurement has been divided and the same supplier is successful on both solicitations, separate contractual documents must be issued in order to satisfy system coding requirements for the respective agreement types.

Audits

11.081 (XX/XX/XX) The authority for discretionary audits results from either the contractual terms, or statute ("Defence Production Act," section 19). If a contracting officer determines that a discretionary audit is required, a request is to be made to the Contractual Costing Services Directorate (CCSD). The cost of discretionary audits will be borne by CCSD.

Procurement officers may refer any supplier certification of Canadian and/or Korean content to CCSD for audit of compliance to the policy.

Chapter 12 - Glossary

Canadian Goods

(1) For the purposes of the CKTEA, Canadian goods if it is considered so under Canada's "Determination of Country of Origin for the Purposes of Marking Goods (NAFTA Countries) Regulations". Article 8 of these Regulations, which provides for a NAFTA tariff preference override, cannot be used to determine whether a good is Canadian.

(2) For the purposes of the Canadian Content Policy. With the exception of goods listed in 5.073, Canadian goods are those wholly manufactured or that originate in Canada or products containing imported components that have undergone sufficient change in Canada to be considered Canadian (See 5.072). (3) For the purposes of Taxes and Duties. Goods that are the growth, produce or manufacture of Canada or which are of foreign origin but are duty and tax paid and have thus been entered for consumption into Canada. (4) Addition to Canadian Goods Abroad. Goods that are exported from Canada for the purpose of being incorporated with foreign articles abroad. (5) Processing of Canadian Goods Abroad. Goods that are exported for a phase of production which cannot be completed in Canada. (XX/XX/XX) (marchandises canadiennes)

Procurement Review Committee (PRC)

The PRC carries out a detailed review of individual procurements of goods and services over $2M referred by the Procurement Strategy Committee (PSC), and recommends procurement strategies aimed at the achievement of socio-economic benefits. The reviews are conducted within parameters set by the PSC, in a manner that is fully consistent with the Treasury Board Policy on procurement review and subject to Canada's national commitments under the AIT, plus the international commitments under WTO-AGP, NAFTA, CKTEA and other international trade rights and obligations. While PRC membership may vary slightly, there is core representation from the client, the contracting authority, Treasury Board Secretariat, Finance, Human Resources Development, National Research Council, Industry Canada, Atlantic Canada Opportunities Agency, Western Diversification, Federal Office of Regional Development (Quebec), Department of Indian and Northern Affairs, Environment Canada and International Trade for certain DND requirements. (XX/XX/XX) (Comité d'examen des acquisitions [CEA])

Annex 4.2: CANADA-KOREA AGREEMENT ON THE PROCUREMENT OF TELECOMMUNICATIONSEQUIPMENT (CKTEA)

AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF KOREA AND THE GOVERNMENT OF CANADA ON THE PROCUREMENT OF TELECOMMUNICATIONSEQUIPMENT

THE GOVERNMENT OF THE REPUBLIC OF KOREA (hereinafter "Korea"), of the one part, and THE GOVERNMENT OF CANADA (hereinafter "Canada"), of the other part (hereinafter collectively referred to as the "Parties" and singularly as a "Party"),

RECOGNIZING the vital role played by telecommunications services and infrastructures in promoting and sustaining economic growth;

REAFFIRMING the Parties' obligations under the World Trade Organization ("WTO") agreements, including the WTO Agreement on Government Procurement (the "AGP"), the Ministerial Declaration on Trade in Information Technology Products (the "ITA") and the WTO Fourth Protocol to the General Agreement on Trade in Services (the "GATS"), also referred to as the WTO Agreement on Basic Telecommunications ("the GBT Agreement");

CONSIDERING the Parties' commitment to liberalize their respective telecommunications equipment, government procurement and basic telecommunications service markets to foreign competition in accordance with GATT 1994, the AGP and the GBT Agreement, respectively;

UNDERSTANDING that the increased competition resulting from the implementation of these WTO agreements by Korea and Canada will encourage telecommunications equipment manufacturers and service providers to compete vigorously with one another and to offer the best goods and services for the most competitive prices possible;

SEEKING to extend reciprocal, transparent and non-discriminatory access for the Parties' telecommunications equipment manufacturers and service providers to procurement by entities covered by this Agreement; and

AFFIRMING that the competitiveness of suppliers and service providers, not government intervention, should be the principal determinant of industrial success and international trade;

HAVE AGREED as follows:

ARTICLE 1

Objective, Definitions and Scope of the Agreement

1. The purpose of this Agreement is to secure reciprocal, transparent and non-discriminatory access for the Parties' suppliers and service providers to the procurement of goods and incidental services by the entities listed in Annex 1(a) and 1(b) (hereinafter collectively referred to as the "entities" and singularly as an "entity").

2. For the purpose of this Agreement:

  1. "goods" means:
    1. telecommunications (wireline and wireless) equipment and materials originating in the territories of the Parties that are components of telecommunications networks, including switching, transmission, access and terminal equipment, or that are used in the development, configuration, installation, operation, maintenance, repair and management of telecommunications networks; and
    2. research and development equipment, testing and measurement equipment and training equipment that are included in a tender for the procurement of telecommunications equipment and materials covered by this Agreement.
  2. "incidental service" means any service that is included in a tender for the procurement of a good covered by this Agreement.
  3. "territory" means:
    1. with respect to Korea, the territory of Korea as well as those maritime areas, including the seabed and subsoil adjacent to the outer limit of the territorial areas over which Korea exercises, in accordance with international law, sovereign rights or jurisdiction for the purpose of exploration and exploitation of natural resources of such areas.
    2. with respect to Canada, the territory to which its customs laws apply, including any areas beyond the territorial seas of Canada within which, in accordance with international law and its domestic laws, Canada may exercise rights with respect to the seabed and subsoil and their natural resources;

3. This Agreement applies to any laws, regulations, procedures or practices of the Parties relating to procurement:

  1. by entities listed in Annex 1(a) in the case of Korea and in Annex 1(b) in the case of Canada;
  2. of goods and incidental services; and
  3. where the value of the contract to be awarded is a minimum of 130,000 SDR (Special Drawing Rights).

4. The value of SDR in Korean Won and Canadian Dollars shall be fixed in accordance with the procedures established by the WTO Committee on Government Procurement and specifically the Decision on Procedural Matters under the AGP (1994) - Modalities for Notifying Threshold Figures in National Currencies (GPA/1 - Annex 3).

5. This Agreement does not apply to the following contracts:

  1. procurement of goods and services with a view to commercial resale or use in the production of goods for commercial sale;
  2. for Korea:

    - single tendering procurement involving set-asides for small and medium-sized businesses;

    - procurement of satellites pursuant to Korea's Aviation and Space Industry Development Promotion Law for a five-year period commencing on January 1, 1997 on which Korea's accession to the AGP became effective; and

  3. for Canada:

    - procurement in respect of set-asides for small and minority businesses;

    - procurement for the Departments of Transport, Fisheries and Oceans, and Communications respecting Federal Supply Classifications 36, 70 and 74.

ARTICLE 2

Market Access and Principles of Non-discrimination

With respect to the procurement of goods and incidental services by the entities, each Party shall provide to the goods and incidental services of the other Party, and to the suppliers of such goods and incidental services of the other Party, treatment no less favourable than that accorded to its own goods, incidental services and suppliers, and the goods, incidental services and suppliers of any third country.

ARTICLE 3

Procurement Procedures

1. Subject to paragraph 2 of this Article, the Parties agree, for the entities' procurement covered by this Agreement, to incorporate into this Agreement by reference the following articles of the AGP, as amended from time to time, mutatis mutandis, except to the extent that the procedures and practices contained therein are modified by this Agreement:

  • Article II Valuation of Contracts
  • Article IV Rules of Origin
  • Article VI Technical Specifications
  • Article VII Tendering Procedures
  • Article VIII Qualification of Suppliers
  • Article IX Invitation to Participate Regarding Intended Procurement
  • Article X Selection Procedures
  • Article XI Time-limits for Tendering and Delivery
  • Article XII Tender Documentation
  • Article XIII Submission, Receipt and Opening of Tenders and awarding of Contracts
  • Article XIV Negotiation
  • Article XV Limited Tendering
  • Article XVII Transparency
  • Article XVIII Information and Review as Regards Obligations of Entities
  • Article XIX Information and Review as Regards Obligations of Parties
  • Article XXIII Exceptions to the Agreement

2. The Parties agree that, for the purposes of AGP Article IX and XVIII incorporated by reference into this Agreement, notice shall be published in the appropriate publication listed in Annex 3 of this Agreement.

3. In the qualification and selection of suppliers, goods and incidental services, evaluation of bids and award of contracts:

  1. the entities shall not, either explicitly or implicitly, impose, seek or consider offsets 1; and
  2. the private sector telecommunications operators in the territories of the Parties shall not be required or encouraged by the Parties, explicitly or implicitly, to impose, seek or consider offsets.

4. A Party or an entity of a Party may limit suppliers who qualify to those that can demonstrate that accepting their bid will not result in incompatibility, technical difficulty or disproportionately high costs in the operation and maintenance of the network of the Party or the entity of the Party. Such a limitation of suppliers may not be applied to avoid maximum possible competition or to constitute a means of discriminating against suppliers of the other Party or protecting domestic suppliers.

ARTICLE 4

Bid Challenge Procedures

With respect to procurement by the entities, the Parties shall provide non- discriminatory, timely, transparent and effective procedures enabling suppliers and service providers to challenge alleged breaches of this Agreement arising in the context of procurement in which they have, or have had, an interest. Consultation and challenge procedures involving the entities and bodies reviewing bid challenges shall include, as a minimum, those procedures set out in Article XX of the AGP, mutatis mutandis. The entities shall normally follow the recommendations of their respective review bodies.

ARTICLE 5

Consultations and Dispute Settlement

1. Unless otherwise mutually agreed, the Parties shall meet no less than once a year to discuss any matter affecting the operation and implementation of this Agreement, including a review of the Annexes to this Agreement, with a view to updating the Annexes to reflect changes in the Parties' telecommunications services and equipment markets, as well as any other issue relating to this Agreement.

2. Where necessary, either Party may request a consultation to discuss any aspect of this Agreement. When a Party requests consultations on any matter affecting the operation of this Agreement, such consultations shall be held not later than 30 days following the date on which the request is received, unless otherwise mutually agreed by the Parties.

3. To the extent necessary to ensure effective implementation of this Agreement, the Parties shall, upon the request of either Party, exchange information on legislation, other measures or imminent changes affecting or likely to affect procurement policies or practices of entities covered by this Agreement.

4. Each Party shall give sympathetic consideration to the concern of the other Party and work to reach a mutually acceptable resolution of any issue arising in connection with the interpretation or application of this Agreement.

5. If either Party considers that any benefit accruing to it, directly or indirectly, under this Agreement is being nullified or impaired, it may request consultations under this Article.

6. In the event of a dispute under this Agreement, the Parties shall endeavour to resolve the dispute by means of consultations within 90 days of the date of the initial request for consultations. The consultation period can be extended upon the mutual agreement of the Parties.

7. If a dispute is not resolved through consultations between the Parties within 90 days of the date of the initial request for consultations or such other period of time as may be mutually agreed upon, either Party may initiate an arbitration proceeding. The arbitration proceeding shall be initiated and governed according to the Arbitration Procedures set forth in Annex 2 to this Agreement.

ARTICLE 6

Application of Other Agreements

The Parties affirm their rights and obligations pursuant to the WTO, the AGP and other multilateral agreements negotiated under the auspices of the WTO. In the event of any inconsistency between this Agreement and any agreement between the Parties other than those multilateral agreements mentioned above, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement or agreed by the Parties in writing.

ARTICLE 7

Final Provisions

1. This Agreement shall enter into force on the first day of the month following the date on which the Parties have notified each other that their implementation process has been completed.

2. The Parties may agree on any modification of, or addition to, this Agreement, including the updating of the list of the entities of the Parties due to, among other things, a change in the legal status of an entity, by mutual consent.

3. When so agreed and approved in accordance with the applicable legal procedure of each Party, a modification or addition shall constitute an integral part of this Agreement.

4. If a Party wishes to terminate this Agreement, it shall notify the other Party in writing of such intention, and the termination of this Agreement will take effect 180 days after the date on which the notification is received.

5. The Annexes attached to this Agreement shall form an integral part of this Agreement.

6. The provisions of this Agreement shall apply to the entities' successors.

IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Agreement.

DONE in duplicate at Ottawa, this 5th day of July 1999, in the English, French and Korean languages, each text being equally authentic.

FOR THE GOVERNMENT OF THE REPUBLIC OF KOREA

_______________________

FOR THE GOVERNMENT OF CANADA

_______________________

ANNEX 1

ENTITY COVERAGE

ANNEX 1 a) - Korea

Entities which procure in accordance with the provisions of this Agreement

Korea Telecom (KT)

ANNEX 1 b) - Canada

Entities which procure in accordance with the provisions of this Agreement

  • Department of Agriculture
  • Department of Communications
  • Department of Consumer and Corporate Affairs
  • Department of Employment and Immigration
  • Immigration and Refugee Board
  • Employment and Immigration Commission
  • Department of Energy, Mines and Resources
  • Atomic Energy Control Board
  • National Energy Board (on its own account)
  • Department of the Environment
  • Department of External Affairs
  • Canadian International Development Agency (on its own account)
  • Department of Finance
  • Office of the Superintendent of Financial Institutions
  • Canadian International Trade Tribunal
  • Municipal Development and Loan Board
  • Department of Fisheries and Oceans
  • Department of Forestry
  • Department of Indian Affairs and Northern Development
  • Department of Industry, Science and Technology
  • Science Council of Canada
  • National Research Council of Canada
  • Natural Sciences and Engineering Research Council of Canada
  • Department of Justice
  • Canadian Human Rights Commission
  • Statute Revision Commission
  • Supreme Court of Canada
  • Department of Labour
  • Canada Labour Relations Board
  • Department of National Health and Welfare
  • Medical Research Council
  • Department of National Revenue
  • Department of Public Works
  • Department of Secretary of State of Canada
  • Social Science and Humanities Research Council
  • Office of the Coordinator, Status of Women
  • Public Service Commission
  • Department of the Solicitor General
  • Correctional Service of Canada
  • National Parole Board
  • Department of Supply and Services (on its own account)
  • Canadian General Standards Board
  • Department of Transport (except the Canadian Coast Guard)
  • Treasury Board Secretariat and the Office of the Controller General
  • Department of Veterans Affairs
  • Veterans Land Administration
  • Department of Western Economic Diversification (on its own account)
  • Atlantic Canada Opportunities Agency (on its own account)
  • Auditor General of Canada
  • Federal Office of Regional Development (Quebec)(on its own account)
  • Canadian Centre for Management Development
  • Canadian Radio-Television and Telecommunications Commission (on its own account)
  • Canadian Sentencing Commission
  • Civil Aviation Tribunal
  • Commissioner for Federal Judicial Affairs
  • Competition Tribunal Registry
  • Copyright Board
  • Emergency Preparedness Canada
  • Federal Court of Canada
  • Grain Transportation Agency (on its own account)
  • Hazardous Materials Information Review Commission
  • Information and Privacy Commissioners
  • Investment Canada
  • Department of Multiculturalism and Citizenship
  • The National Archives of Canada
  • National Farm Products Marketing Council
  • The National Library
  • National Transportation Agency (on its own account)
  • Northern Pipeline Agency (on its own account)
  • Patented Medicine Prices Review Board
  • Petroleum Monitoring Agency
  • Privy Council Office Canadian Intergovernmental Conference Secretariat
  • Commissioner of Official Languages
  • Public Service Staff Relations Board
  • Office of the Secretary to the Governor General
  • Office of the Chief Electoral Officer
  • Federal Provincial Relations Office
  • Procurement Review Board
  • Statistics Canada
  • Tax Court of Canada, Registry of the
  • Agricultural Stabilization Board
  • Canadian Aviation Safety Board
  • Canadian Centre for Occupational Health and Safety
  • Canadian Transportation Accident Investigations and Safety Board
  • Director of Soldier Settlement
  • Director, The Veterans Land Act
  • Fisheries Prices Support Board
  • National Battlefields Commission

ANNEX 2

ARBITRATION PROCEDURES

1. In the event of a dispute under this Agreement which the Parties are unable to resolve within 90 days of the date of the initial request for consultations or such other period of time as may be mutually agreed upon, either Party may initiate an arbitration proceeding, pursuant to Article 5, paragraph 7 of this Agreement. Such proceedings shall be subject to the procedures set out in this Annex.

2. Within 60 days after receipt of a request for arbitration through diplomatic channels, an arbitral panel shall be constituted by each Party appointing one member to the arbitral panel. The two members shall then select a national of a third party country who, upon approval by the Parties, shall be appointed the Chairman of the arbitral panel. The Chairman shall be appointed within 60 days from the date of appointment of the other two members of the arbitral panel.

3. If, within the periods specified in paragraph 2 of this Annex, the necessary appointments have not been made, either Party may, in the absence of any other agreement, invite the President of the International Court of Justice to make the necessary appointments. If the President is a national of either Party or is otherwise prevented from discharging the said function, the Vice President shall be invited to make the necessary appointments. If the Vice President is a national of either Party or is prevented from discharging the said function, the Member of the International Court of Justice next in seniority, who is not a national of either Party, shall be invited to make the necessary appointments.

4. The arbitral panel shall determine its own procedures. The arbitral panel shall reach its decision by a majority of votes. Such decision shall be binding on both Parties. Unless otherwise agreed, the decision of the arbitral panel shall be rendered within 180 days of the appointment of the Chairman in accordance with paragraphs 2 or 3 of this Annex.

5. Each Party shall bear the costs of its own member of the panel and of its representation in the arbitral proceedings; the costs related to the Chairman and any remaining costs shall be borne equally by the Parties. The arbitral panel may, however, in its decision direct that a higher proportion of costs shall be borne by either of the Parties, and this award shall be binding on both Parties.

6. The Parties shall implement the panel decision. If either Party cannot agree on the manner for resolution of the dispute, it will notify the other Party within 30 days of the rendering of the panel decision. The non-complying Party may propose compensation or other remedial action to the other Party and to the panel. If the other Party cannot agree to such proposed compensation or other remedial action within 60 days after the rendering of the panel decision, it may propose to the panel the suspension or withdrawal of equivalent benefits under this Agreement. Such suspension or withdrawal shall take effect 30 days after it is proposed, unless the panel disapproves such action; in the latter event, the panel shall make a ruling binding on the Parties respecting suspension or withdrawal of equivalent benefits.

ANNEX 3

PUBLICATIONS UTILIZED

Korea -

Major daily newspapers of national circulation

Planned internet homepage of KT
Contact point: The Quality Assurance and Logistics Support Group of KT

Canada -

Government Electronic Tendering System

ANNEX 4

ORIGIN OF GOODS AND SERVICES

1. The Parties agree to review their existing non-preferential rules of origin regimes for the purpose of establishing mutually acceptable rules of origin governing the scope of goods subject to this Agreement, as referenced in Article 1.2(a), within 180 days after the signing of this Agreement. In establishing such rules of origin, the Parties shall take into account principles applied in the normal course of international trade, such as the use of changes in tariff classification to reflect substantial transformation.

2. The Parties agree, for the entities' procurement covered by this Agreement, to incorporate into this Agreement by reference Article IV, paragraph 1 of the AGP.

3. The Parties agree to examine the results of the work programme for the harmonization of rules of origin for goods currently underway under the Agreement on Rules of Origin in Annex 1A of the WTO Agreement and the negotiations regarding trade in services with the objective of adopting those results as the rules of origin for the purpose of implementing their commitments under this Agreement.

4. For the purpose of the provision of an incidental service, each Party shall grant temporary entry to service suppliers of the other Party who qualify according to its immigration laws and regulations and are otherwise qualified for entry under applicable measures relating to public health and safety and national security.

5. Incidental services shall be deemed to originate in the territory of a Party if at least 50% of the value of such incidental services is provided by a person or persons of that Party.

6. For the purposes of this Agreement, "person" has the same meaning as in Article XXVIII of the GATS.

7. If a Party or an entity of a Party is unable to verify the origin of goods or services tendered in a procurement subject to this Agreement, pursuant to the rules of origin established by the Parties under this Annex, that Party or the entity of that Party may refuse to consider the tender.

NEW Annex 4.3: TREASURY BOARD POLICY IMPLEMENTING THE CKTEA

POLICY IMPLEMENTING THEAGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF KOREA AND THE GOVERNMENT OF CANADAON THE PROCUREMENT OF TELECOMMUNICATIONS EQUIPMENT

Purpose

This policy describes how to implement the Agreement, dated July 5, 1999, between the Government of the Republic of Korea (Korea) and the Government of Canada (Canada) on the Procurement of Telecommunications Equipment (KC Telecom Agreement).

The purpose of the KC Telecom Agreement is to secure reciprocal, transparent and non discriminatory access for Canadian and Korean suppliers and service providers to opportunities for the procurement of goods and incidental services required by the entities specified in Annex 1 of the KC Telecom Agreement.

Product Coverage

Under the KC Telecom Agreement, a Covered Good is defined as:

iii)telecommunications (wireline and wireless) equipment and materials originating in the territories of Canada and Korea that are components of telecommunications networks, including switching, transmission, access and terminal equipment, or that are used in the development, configuration, installation, operation, maintenance, repair and management of telecommunications networks; and

iv)research and development equipment, testing and measurement equipment and training equipment that are included in a tender for the procurement of telecommunications equipment and materials covered by the KC Telecom Agreement.

For procurements involving the following Federal Supply Classification (FSC) 58 categories, the procedures detailed in this policy must always be followed:

N5805 Telephone and Telegraph Equipment
N5815 Teletype and Facsimile Equipment
N5820020 to
N5820700 Radio Transmitters, Receivers and Transceivers

Other categories of FSC 58 may also be covered by the KC Telecom Agreement if the good could be considered a Covered Good as defined above. With the exception of items listed under FSC 58, procurement which may be considered procurement of a Covered Good in accordance with the above definition is also covered by the World Trade Organization Agreement on Government Procurement (WTOAGP). Procurement covered by both Agreements should follow procedures set out for the WTOAGP, as Canada has committed through the WTOAGP to open these procurements to Korea and the other WTOAGP members.

Implementation Procedures

The KC Telecom Agreement applies to any laws, regulations, procedures or practices of Korea and Canada relating to procurement:

(d)by entities listed in Annex 1(a) in the case of Korea and in Annex 1(b) in the case of Canada;

(e)of goods and incidental services; and

(f)where the value of the contract to be awarded is a minimum of 130,000 SDR (Special Drawing Rights).

The Agreement does not apply to the following contracts:

(g)procurement of goods and services with a view to commercial resale or use in the production of goods for commercial sale;

(h)procurement in respect of setasides for small and minority businesses; and,

(i)procurement for the Canadian Departments of Transport, Fisheries and Oceans, and Communications respecting Federal Supply Classifications (FSC) 36, 70 and 74 2.

Definitions

For the purpose of the KC Telecom Agreement:

(j)A good is considered a Canadian or Korean Good, for the purpose of this Policy only, if it is considered so under Canada's "Determination of Country of Origin for the Purposes of Marking Goods (NAFTA Countries) Regulations". Article 8 of these Regulations, which provides for a NAFTA tariff preference override, cannot be used to determine whether a good is Canadian.

(k)"Incidental Service" means any service that is included in a tender for the procurement of a Covered Good under this Agreement.

A service provided by an individual based in Canada or Korea is considered a Canadian or Korean service, respectively. Where a requirement consists of only one service, which is being provided by more than one individual, the service will be considered Canadian or Korean if a minimum of 60 percent of the total bid price for the service is provided by individuals based in Canada or Korea respectively.

(l)"Territory" means:

iii)with respect to Korea, the territory of Korea as well as those maritime areas, including the seabed and subsoil adjacent to the outer limit of the territorial areas over which Korea exercises, in accordance with international law, sovereign rights or jurisdiction for the purpose of exploration and exploitation of natural resources of such areas.

iv)with respect to Canada, the territory to which its customs laws apply, including any areas beyond the territorial seas of Canada within which, in accordance with international law and its domestic laws, Canada may exercise rights with respect to the seabed and subsoil and their natural resources.

Procurement Procedures

1. Subject to paragraph 2 below, Canada and Korea agree, for the procurement covered by the KC Telecom Agreement, to incorporate into the Agreement by reference the following articles of the WTO-AGP, as amended from time to time, mutatis mutandis, except to the extent that the procedures and practices contained therein are modified by this Agreement:

  • Article II Valuation of Contracts
  • Article IV Rules of Origin
  • Article VI Technical Specifications
  • Article VII Tendering Procedures
  • Article VIII Qualification of Suppliers
  • Article IX Invitation to Participate Regarding Intended Procurement
  • Article X Selection Procedures
  • Article XI Timelimits for Tendering and Delivery
  • Article XII Tender Documentation
  • Article XIII Submission, Receipt and Opening of Tenders and awarding of Contracts
  • Article XIV Negotiation
  • Article XV Limited Tendering
  • Article XVII Transparency
  • Article XVIII Information and Review as Regards Obligations of Entities
  • Article XIX Information and Review as Regards Obligations of Parties
  • Article XXIII Exceptions to the Agreement

2. Canada and Korea have agreed that, for the purposes of WTO-AGP Article IX and XVIII incorporated by reference into this Agreement, notice of potential procurement opportunities shall be given in the publication listed below:

  1. for Korea:

    Major daily newspapers of national circulation
    Planned internet homepage of Korea Telecom (KT)
    Contact point: The Quality Assurance and Logistics Support Group of KT

  2. for Canada:

Government Electronic Tendering Service

3. In the qualification and selection of suppliers, goods and Incidental Services, evaluation of bids and award of contracts:

  1. the entities shall not, either explicitly or implicitly, impose, seek or consider offsets 3; and
  2. the private sector telecommunications operators in the territories of Canada and Korea shall not be required or encouraged by their governments, explicitly or implicitly, to impose, seek or consider offsets.

4. Canada or Korea, or a Canadian or Korean government entity, may limit suppliers who qualify to those that can demonstrate that accepting their bid will not result in incompatibility, technical difficulty or disproportionately high costs in the operation and maintenance of the network of Canada or Korea, or a Canadian or Korean government entity. Such a limitation of suppliers may not be applied to avoid maximum possible competition or to constitute a means of discriminating against suppliers of the other country or protecting domestic suppliers.

Preparing a Bid Solicitation

When requirements consist of more than one good, the KC Telecom Agreement permits the procurement officer to indicate in the bid solicitation that the bids will be evaluated in the following ways:

  1. Aggregate. Multi item requirements will be evaluated on an aggregate basis. In these cases, a minimum of sixty (60) percent of the total bid price must consist of Korean and/or Canadian Goods;
  2. Item by Item. Multi item requirements will be certified on an item by item basis. In these cases, suppliers will be asked to identify separately, each item that meets the definition of Goods under the KC Telecom Agreement

Type of Bid

For a procurement to which the KC Telecom Agreement applies the procurement officer shall decide at the procurement planning stage whether a competition is:

  1. Solely Limited: The solicitation should be solely limited to suppliers who could offer Canadian or Korean Goods when the procurement officer has reason to believe that there exists in the marketplace, two or more such suppliers.
  2. Conditionally Limited: The solicitation may be conditionally limited when the procurement officer is uncertain whether two or more suppliers of Canadian or Korean Goods exist.
  3. Open: When the procurement officer has reason to believe that two or more suppliers of Canadian or Korean Goods do not exist, the solicitation shall be open to all bidders.

Certificationof the Bid

Bidders are required under this Policy to submit a Certification with their bids attesting to the fact that:

  1. in the case of a requirement for a single good, the Good is Canadian or Korean as defined in this policy; or,
  2. in the case of a requirement for multiple goods, or goods and services, a minimum of sixty (60) percent of the total bid price consists of Korean and/or Canadian Goods and Incidental Services, if applicable; such Certification will be supplied on an aggregate basis, addressing the total bid, or on an item by item basis depending upon instructions in the request for proposal.

Application of the Policy

Bids to which the Agreement applies will be evaluated as follows:

  1. For Solely Limited solicitations, only bids with valid certifications will be evaluated. The bid evaluation process can proceed where there is at least one bid with a valid certification, otherwise the procurement must be re-tendered.
  2. For Conditionally Limited solicitations, the procurement officer will, prior to the further evaluation of the bids, determine whether there are two or more bids with a valid Certification.
    1. If less than 2 bids with a valid Certification are received, all bids are considered.
    2. If 2 or more bids with a valid Certification are received, the evaluation process will be limited to those bids. If bids with a valid certification are later determined to be nonresponsive or withdrawn, and only one responsive bid remains, evaluation will continue with that bid which contains a valid certification. If all bids with a valid certification are subsequently found to be nonresponsive or if their bids are withdrawn, then all other bids received should be evaluated.

The onus is on the supplier to demonstrate that its bid meets the definition of Korean or Canadian Goods and Incidental Services. The supplier must execute and submit the Certification form with the bid.

The Canadian government may verify the validity of the Certification. If the Certification is found to be invalid, then the offered goods or services are deemed not to meet the definition of Korean or Canadian Goods and Incidental Services under the Agreement.

If a bidder is unable to verify the origin of goods or services tendered in a procurement subject to this Agreement, pursuant to Canada's "Determination of Country of Origin for the Purposes of Marking Goods (NAFTA Countries) Regulations", the Canadian government shall refuse to consider the tender.

ANNEX 1

ENTITY COVERAGE

ANNEX 1 a) Korea

Entities which may procure in accordance with the provisions of the KC Telecom Agreement

Korea Telecom (KT)

ANNEX 1 b) Canada

Entities which may procure in accordance with the provisions of the KC Telecom Agreement

  • Department of Agriculture
  • Department of Communications
  • Department of Consumer and Corporate Affairs
  • Department of Employment and Immigration
  • Immigration and Refugee Board
  • Employment and Immigration Commission
  • Department of Energy, Mines and Resources
  • Atomic Energy Control Board
  • National Energy Board (on its own account)
  • Department of the Environment
  • Department of External Affairs
  • Canadian International Development Agency (on its own account)
  • Department of Finance
  • Office of the Superintendent of Financial Institutions
  • Canadian International Trade Tribunal
  • Municipal Development and Loan Board
  • Department of Fisheries and Oceans
  • Department of Forestry
  • Department of Indian Affairs and Northern Development
  • Department of Industry, Science and Technology
  • Science Council of Canada
  • National Research Council of Canada
  • Natural Sciences and Engineering Research Council of Canada
  • Department of Justice
  • Canadian Human Rights Commission
  • Statute Revision Commission
  • Supreme Court of Canada
  • Department of Labour
  • Canada Labour Relations Board
  • Department of National Health and Welfare
  • Medical Research Council
  • Department of National Revenue
  • Department of Public Works
  • Department of Secretary of State of Canada
  • Social Science and Humanities Research Council
  • Office of the Coordinator, Status of Women
  • Public Service Commission
  • Department of the Solicitor General
  • Correctional Service of Canada
  • National Parole Board
  • Department of Supply and Services (on its own account)
  • Canadian General Standards Board
  • Department of Transport (except the Canadian Coast Guard)
  • Treasury Board Secretariat and the Office of the Controller General
  • Department of Veterans Affairs
  • Veterans Land Administration
  • Department of Western Economic Diversification (on its own account)
  • Atlantic Canada Opportunities Agency (on its own account)
  • Auditor General of Canada
  • Federal Office of Regional Development (Quebec) (on its own account)
  • Canadian Centre for Management Development
  • Canadian Radio Television and Telecommunications Commission (on its own account)
  • Canadian Sentencing Commission
  • Civil Aviation Tribunal
  • Commissioner for Federal Judicial Affairs
  • Competition Tribunal Registry
  • Copyright Board
  • Emergency Preparedness Canada
  • Federal Court of Canada
  • Grain Transportation Agency (on its own account)
  • Hazardous Materials Information Review Commission
  • Information and Privacy Commissioners
  • Investment Canada
  • Department of Multiculturalism and Citizenship
  • The National Archives of Canada
  • National Farm Products Marketing Council
  • The National Library
  • National Transportation Agency (on its own account)
  • Northern Pipeline Agency (on its own account)
  • Patented Medicine Prices Review Board
  • Petroleum Monitoring Agency
  • Privy Council Office
  • Canadian Intergovernmental Conference Secretariat
  • Commissioner of Official Languages
  • Public Service Staff Relations Board
  • Office of the Secretary to the Governor General
  • Office of the Chief Electoral Officer
  • Federal Provincial Relations Office
  • Procurement Review Board
  • Statistics Canada
  • Tax Court of Canada, Registry of the Agricultural Stabilization Board
  • Canadian Aviation Safety Board
  • Canadian Centre for Occupational Health and Safety
  • Canadian Transportation Accident Investigations and Safety Board
  • Director of Soldier Settlement
  • Director, The Veterans Land Act
  • Fisheries Prices Support Board
  • National Battlefields Commission

1 For the purpose of this Agreement, offsets include measures used to encourage local development or improve the balance of payments accounts by means of domestic content, licensing and/or transfer of technology, counter-trade, investment requirements, or similar requirements. (Return to original footnote 1)

2 The following is the proposed wording that has been suggested to NAFTA participants to update the exception respecting FSC 70 (automatic data processing equipment, software supplies and support equipment), FSC 74 (office machines, etc.) and FSC 36 (special industry machinery). (Return to original footnote 2)

This Agreement does not apply to procurement in respect of:

  • the Department of Transport;
  • the Department of Fisheries and Oceans;
  • the Canadian Food Inspection Agency in respect of the administration and enforcement of the Fish Inspection Act ;
  • the Department of Canadian Heritage in respect of those functions that were formerly the responsibility of the Department of Communications and became the responsibility of the Department of Canadian Heritage;
  • the Department of Industry in respect of telecommunications, except in relation to (a) the planning and coordination of telecommunication services for departments, boards and agencies of the Government of Canada, and (b) broadcasting, other than in relation to spectrum management and the technical aspects of broadcasting; and
  • the Department of Public Works and Government Services in respect of the Government Telecommunications Agency.

3 For the purpose of this Agreement, offsets include measures used to encourage local development or improve the balance of payments accounts by means of domestic content, licensing and/or transfer of technology, countertrade, investment requirements, or similar requirements. (Return to original footnote 3)