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Even though this Agreement was an important first step in creating international disciplines on procurement, it was limited in membership and narrow in scope since it only covered the procurement of goods above a certain threshold by central government entities.  Furthermore, there is evidence that even within this limited domain, covered entities avoided the GPA's obligations through a variety of means (Hoekman and Stern, 1993).   These included the use of non-competitive procurement procedures such as single tendering, and splitting large contracts into smaller lots so as to fall below the GPA threshold.  The problems encountered in monitoring the implementation of the GPA and enforcing its rules suggested that the GPA dispute settlement rules needed to be adapted to the specific nature of procurement - often a single event, costly to reverse, and where modifications to national rules of general application would not necessarily provide adequate guarantees of non-recurrence.3

The renegotiation of the GPA in parallel with the Uruguay Round focused primarily on expanding its coverage, strengthening its enforcement provisions and expanding its membership.4  Services contracts, including construction, were included in the GPA, and the reach of the Agreement was extended to sub-central government entities and public undertakings.5  Enforcement provisions were strengthened, in particular, by the introduction of a bid-challenge mechanism, which allows aggrieved private parties to invoke the GPA before national courts.  Attempts to widen the membership of the Agreement, however, were not successful:  even though Korea joined the new Agreement, Hong Kong and Singapore, both signatories to the old Agreement, did not.

    (One of the key problems in the old GPA was the lack of provision for timely remedies (Mavroidis, 1993).  For instance in the case involving Norway's procurement of toll collection equipment for the city of Trondheim, the dispute settlement panel found that the procurement procedures that were employed violated the GPA (GATT, 1995, pp. 319-47).  However, the panel also concluded that it was too late to remedy the situation and decided to accept an undertaking by Norway that the procedures that were followed would not be repeated in the future.  Only one other dispute settlement panel report was adopted under the old GPA:  the United States' complained that the EC had failed to take value added tax into account in determining whether a procurement was above the GPA threshold (GATT, 1985, pp. 247-56).  The panel ruled in favour of the United States.

    (Blank (1995), Hoekman and Mavroidis (1995), and Messerlin (1994) contain useful discussions of the new GPA.  The Agreement applies to any law, regulation, procedure or practice regarding any procurement, above a certain threshold value, by entities which are specifically listed by each party.

    (Appendix 1 of the GPA contains five Annexes for each signatory.  The first three Annexes contain lists of covered entities, the fourth an indication of covered services, and the fifth pertains to construction services.  In the case of goods, all procurement is covered unless otherwise specified in the Annex - except in the case of procurement of goods by Defence Ministries which is often subject to a positive list, i.e. only items explicitly scheduled are covered.  Procurement of services is also generally subject to a positive list, i.e. only services expressly indicated by the signatory are covered by the GPA.  The telecommunications sector, for instance, remains outside the scope of the GPA.


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