Chapter 20: (Institutional Arrangements and Dispute Settlement Procedures) (1)

Article 1017: Bid Challenge

1. In order to promote fair, open and impartial procurement procedures, each Party shall adopt and maintain bid challenge procedures for procurements covered by this Chapter in accordance with the following:

(a) each Party shall allow suppliers of any good or service of another Party to submit bid challenges concerning any aspect of the procurement process, which for purposes of this Article begins after an entity has decided on its procurement requirement, leading up to and including the contract award;

(b) a Party may encourage a supplier to seek a resolution of any complaint with the entity concerned prior to initiating a bid challenge;

(c) each Party shall ensure that its entities accord fair and timely consideration to any complaint regarding procurement covered by this Chapter;

(d) whether or not a supplier has attempted to resolve its complaint with the entity, or upon an unsuccessful attempt at such a resolution, no Party shall prevent the supplier from initiating a bid challenge or seeking any other relief available to such supplier;

(e) a Party may require a supplier to notify the entity upon
initiation of a bid challenge;

(f) a Party may limit the period within which a supplier may initiate a bid challenge, but in no case shall the period be less than 10 working days from the time when the basis of the complaint became known, or reasonably should have become known, to the supplier;

(g) each Party shall establish or designate a reviewing authority with no substantial interest in the outcome of procurements to receive bid challenges and make findings and recommendations concerning them;

(h) upon receipt of a bid challenge, the reviewing authority shall expeditiously investigate the challenge, and may be required to limit its considerations to the challenge itself;

(i) in investigating the challenge, the reviewing authority may delay the awarding of the proposed contract pending resolution of the challenge, except in cases of urgency or where such a delay would be contrary to the public interest;

(j) the reviewing authority shall issue a recommendation to resolve the challenge, which may include directing the entity to reevaluate offers, terminate or re-compete the contract in question;

(k) entities normally shall follow the recommendations of the
reviewing authority;

(l) each Party should authorize its reviewing authority, following the conclusion of a bid challenge, to make additional recommendations in writing to an entity respecting any facet of the entity's procurement process that is identified as problematic during the investigation of the challenge, including recommendations for changes in the procurement procedures of the entity to bring them into conformity with the obligations of this Chapter;

(m) the reviewing authority shall provide its findings and recommendations respecting bid challenges in writing and in a timely manner, and shall make them available to the Parties and all interested persons;

(n) each Party shall specify in writing and shall make
generally available all its bid challenge procedures; and

(o) each Party shall ensure that each of its entities maintains complete documentation concerning each of its procurements, including a written record of all communications substantially affecting each procurement, for at least three years from the date the contract was awarded, to allow verification that the procurement process was carried out in accordance with the obligations of this Chapter.

2. A Party may require that a bid challenge be initiated only after the notice of procurement has been published or, where a notice is not published, after tender documentation has been made available. If a Party imposes such a requirement, the 10 working day period described in paragraph 1(f) shall begin not earlier than the date that the notice is published or the tender documentation is made available.

Article 1018: Exceptions

1. Notwithstanding Article 2102 (National Security), for purposes of this Chapter nothing shall be construed to prevent a Party from taking any action or not disclosing any information which it considers necessary for the protection of its essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defense purposes.

2. Provided that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between Parties where the same conditions prevail or a disguised restriction on trade between the Parties, nothing in this Chapter shall be construed to prevent any Party from adopting or maintaining measures:

(a) necessary to protect public morals, order or safety;

(b) necessary to protect human, animal or plant life or
health;

(c) necessary to protect intellectual property; or

(d) relating to goods or services of handicapped persons, of
philanthropic institutions or of prison labor.

Article 1019: Provision of Information

1. Each Party shall promptly publish any law, regulation, precedential judicial decision, administrative ruling of general application and any procedure, including standard contract clauses, regarding government procurement covered by this Chapter in the appropriate publications listed in Annex 1010.1 (Publications).

2. Each Party shall:

(a) be prepared, upon request, to explain to any other Party
its government procurement procedures; and

(b) ensure that its entities, upon request from a supplier, promptly explain their procurement practices and procedures.

3. A Party may seek such additional information on the award of the contract as may be necessary to determine whether the procurement was made fairly and impartially, in particular with respect to unsuccessful tenders and further to Article 1015(6) (Submission, Receipt and Opening of Tenders and Awarding Contracts). To this end, the Party of the procuring entity shall provide information on both the characteristics and relative advantages of the winning tender and the contract price. In cases where release of this information would prejudice competition in future tenders, the information shall not be released except after consultation with and agreement of the Party which gave the information to the requesting Party.

4. Each Party shall provide, upon request, to any other Party, information available to that Party and its entities concerning covered procurement of its entities and the individual contracts awarded by its entities.

5. No Party shall disclose confidential information the disclosure of which would prejudice the legitimate commercial interests of a particular person or might prejudice fair competition between suppliers, without the formal authorization of the person that provided the information to that Party.

6. Nothing in this Chapter shall be construed as requiring any Party to disclose confidential information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest.

7. With a view to ensuring effective monitoring of procurement covered by this Chapter, each Party shall collect statistics and provide to the other Parties each year an annual report in accordance with the following reporting requirements, unless the Parties unanimously agree to modify such requirements:

(a) statistics on the estimated value of all contracts awarded, both above and below the applicable threshold values, broken down by entities;

(b) statistics on the number and total value of contracts covered by this Chapter above the applicable threshold values, broken down by entities, categories of goods or services according to uniform classification systems to be determined by the Parties, and country of origin of the contract;

(c) statistics, broken down by entities, and by categories of goods or services, on the number and total value of contracts awarded under each use of the procedures described in Article 1016 (Limited Tendering), and country of origin of the contract; and

(d) statistics, broken down by entities, on the number and total value of contracts awarded under derogations to the Chapter listed in the appropriate annexes.

8. With respect to the reports described in paragraph 7 that pertain to entities listed in Annex 1002.2 (State and Provincial Government Entities), each Party may organize such reports by state or province.

9. Each Party shall give favorable consideration, where appropriate, to a request from any other Party for the exchange of additional information on a reciprocal basis.

10. The Parties shall undertake and complete by the date of entry into force of this Agreement further technical work to make available the complete goods and services classification list to be used by their entities in procuring goods and services under this Chapter and develop concordances between each of these systems, and, if necessary, the agreed uniform system.

Article 1020: Technical Cooperation

1. The Parties shall cooperate, on mutually agreed terms, to increase understanding of their respective government procurement systems, with a view to maximizing access to government procurement opportunities for the suppliers of all Parties.

2. Each Party shall provide to the other Parties and to the suppliers of such Parties, on a cost recovery basis, information concerning training and orientation programs regarding its government procurement system, and access on a non-discriminatory basis to such programs as it conducts.

3. The training and orientation programs referred to in paragraph 2 include:

(a) training of personnel directly involved in government
procurement procedures;

(b) training of suppliers interested in pursuing government
procurement opportunities;

(c) explanation and description of specific elements of each Party's government procurement system, such as the bid challenge mechanism; and

(d) information about government procurement market
opportunities.

4. Each Party shall establish at least one contact point to provide the information regarding the training and orientation programs pertaining to its government procurement system.

Article 1021: Joint Programs for Small Business

1. The Parties shall establish, within 12 months after the date of entry into force of this Agreement, the Committee on Small Business comprising representatives of the Parties. The Committee shall meet as mutually agreed, but no less than once a year, and shall report annually to the Commission on the efforts of the Parties to promote government procurement opportunities for their small businesses.

2. The Committee shall work to facilitate the following activities of the Parties:

(a) identification of available opportunities for the training of small business personnel in their government procurement procedures;

(b) identification of small businesses interested in becoming trading partners of small businesses in the territory of any other Party;

(c) development of data bases of small businesses in the territory of each Party for use by entities of any other Party wishing to procure from small businesses;

(d) consultations regarding the factors that each Party uses in establishing its criteria for eligibility for small business programs, if any; and

(e) actions to address any related matter.

Article 1022: Rectifications or Modifications

1. A Party may make modifications to its coverage under this Chapter only in exceptional circumstances.

2. Where a Party makes modifications to its coverage under this Chapter, the Party shall:

(a) notify the other Parties and its Section of the
Secretariat of the modification;

(b) reflect the change in its schedule of the appropriate
Annex; and

(c) propose to the other Parties appropriate compensatory adjustments to its coverage in order to maintain a comparable level of coverage as existed prior to the modification.

The other Parties shall consider whether any proposed adjustment made pursuant to subparagraph (c) is adequate to maintain a comparable level of the mutually agreed coverage under this Chapter. Where any Party does not agree that the proposed adjustment is sufficient, it may have recourse to dispute settlement procedures under Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures).

3. Notwithstanding paragraphs 1 and 2, a Party may make rectifications of a purely formal nature and minor amendments to its Annexes 1002.1 through 1002.7, provided that it notifies such rectifications to the other Parties and its Section of the Secretariat, and any other Party does not object to such proposed rectification within 30 days. In such cases, subparagraph 2(c) shall not apply. If a Party does object that the proposed rectification would result in a substantive change in the balance of coverage under this Chapter, it may have recourse to dispute settlement procedures under Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures).

4. Notwithstanding any other provision of this Chapter, a Party may undertake legitimate reorganizations of its government procurement entities covered by this Chapter, including programs through which the procurement of such entities is decentralized or the corresponding government functions cease to be performed by any government entity, whether or not subject to this Chapter. In such cases, subparagraph 2(c) shall not apply. No Party shall undertake such reorganizations or programs to avoid the obligations of this Chapter. If a Party objects to the withdrawal on the grounds that the functions continue to be performed by a government entity, that Party may have recourse to dispute settlement procedures under Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures).

Article 1023: Divestiture of Entities

1. Nothing in this Chapter shall be construed to prevent a Party from divesting an entity subject to the obligations of this Chapter.

2. If, upon the public offering of shares of an entity listed in Annex 1002.3 (Government Enterprises), or through other methods, such entity is no longer subject to federal government control, the respective Party may delete the entity from Annex 1002.3 (Government Enterprises), and withdraw the entity from the obligations of the Chapter, upon notification to the other Parties.

3. If a Party objects to the withdrawal on the grounds that the entity remains subject to federal government control, that Party may have recourse to dispute settlement procedures under Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures).

Article 1024: Further Negotiations

1. The Parties shall commence further negotiations no later than December 31, 1998, with a view towards the substantial liberalization of their respective procurement markets. The Parties recognize that such liberalization would ensure more competitive opportunities for all suppliers of the Parties in their respective procurement markets.

2. The Parties will review all features of government procurement practices for the purposes of:

(a) assessing the workings of the procurement system;

(b) seeking to expand the coverage of this Chapter;

(c) including within the obligations of this Chapter

(i) government enterprises, and

(ii) legislated and administrative exceptions; and

(d) reviewing thresholds.

3. Prior to the review specified in paragraph 2, the Parties will endeavor to consult with their state and provincial governments with a view to obtaining commitments, on a voluntary and reciprocal basis, to include within the obligations of this Chapter procurement by state and provincial government entities and enterprises.

4. If the negotiations pursuant to Article 96B of the GATT Agreement on Government Procurement (the Code) are completed prior to the new review specified in paragraph 2, the Parties shall:

(a) immediately begin consultations with their state and provincial governments with a view to obtaining commitments, on a voluntary and reciprocal basis, to include within the obligations of this Chapter procurement by state and provincial government entities and enterprises; and

(b) increase the obligations and coverage of this Chapter to
a level at least commensurate with that of the Code.

5. The Parties shall undertake further negotiations no later than December 31, 1998, on the subject of electronic transmission of tender information with a view to exploring the feasibility of amending this Chapter to permit electronic transmission as an additional or alternate means of publication.

Article 1025: Definitions

For purposes of this Chapter:

construction services contract means a contract which has as its objective the realization by whatever means of civil or building works, as specified in the Appendix of Annex 1002.5 (Construction Services);

entity means an entity listed in Annexes 1002.1 (Federal Government Entities), Annex 1002.2 (State and Provincial Government Entities) or Annex 1002.3 (Government Enterprises) to this Chapter;

offsets means conditions imposed or considered by an entity prior to or in the course of its procurement process that encourage local development or improve its Party's balance of payments accounts, and can involve requirements of local content, licensing of technology, investment, counter-trade or similar requirements.

services includes construction services contracts, unless otherwise specified;

supplier means a person that has provided or could provide goods or services in response to an entity's call for tender; and

tendering procedures means:

(a) open tendering procedures, being those procedures under
which all interested suppliers may submit a tender;

(b) selective tendering procedures, being those procedures under which, consistent with Article 1011 (3) (Selective Tendering Procedures), those suppliers invited to do so by an entity may submit a tender; and

(c) limited tendering procedures, being those procedures where an entity contacts suppliers individually, only in the circumstances and under the conditions specified in Article 1016 (Limited Tendering). ANNEX 1002.1

Federal Government Entities

Schedule of Canada

1. Department of Agriculture 2. Department of Communications 3. Department of Consumer and Corporate Affairs 4. Department of Employment and Immigration 5. Immigration and Refugee Board 6. Canada Employment and Immigration Commission 7. Department of Energy, Mines and Resources 8. Atomic Energy Control Board 9. National Energy Board 10. Department of the Environment 11. Department of External Affairs 12. Canadian International Development Agency (on its own account) 13. Department of Finance 14. Office of the Superintendent of Financial Institutions 15. Canadian International Trade Tribunal 16. Municipal Development and Loan Board 17. Department of Fisheries and Oceans 18. Department of Forestry 19. Department of Indian Affairs and Northern Development 20. Department of Industry, Science and Technology 21. Science Council of Canada 22. National Research Council of Canada 23. Natural Sciences and Engineering Research Council of Canada 24. Department of Justice 25. Canadian Human Rights Commission 26. Statute Revision Commission 27. Supreme Court of Canada 28. Department of Labour 29. Canada Labour Relations Board 30. Department of National Health and Welfare 31. Medical Research Council 32. Department of National Revenue 33. Department of Public Works 34. Department of Secretary of State of Canada 35. Social Sciences and Humanities Research Council 36. Office of the Co-ordinator, Status of Women 37. Public Service Commission 38. Department of the Solicitor General 39. Correctional Service of Canada 40. National Parole Board 41. Department of Supply and Services (on its own account) 42. Canadian General Standards Board 43. Department of Transport (Pursuant to Article 1018 the national security considerations applicable to the Department of National Defence are equally applicable to the Canadian Coast Guard.) 44. Secretariat and the Office of the Controller General 45. Department of Veterans Affairs 46. Veterans Land Administration 47. Department of Western Economic Diversification 48. Atlantic Canada Opportunities Agency 49. Auditor General of Canada 50. Federal Office of Regional Development (Quebec) 51. Canadian Centre for Management Development 52. Canadian Radio-television and Telecommunications Commission 53. Canadian Sentencing Commission 54. Civil Aviation Tribunal 55. Commission of Inquiry into the Air Ontario Crash at Dryden, Ontario 56. Commission of Inquiry into the Use of Drugs and Banned Practices Intended to Increase Athletic Performance 57. Commissioner for Federal Judicial Affairs 58. Competition Tribunal Registry 59. Copyright Board 60. Emergency Preparedness Canada 61. Federal Court of Canada 62. Grain Transportation Agency 63. Hazardous Materials Information Review Commission 64. Information and Privacy Commissioners 65. Investment Canada 66. Multiculturalism and Citizenship 67. The National Archives of Canada 68. National Farm Products Marketing Council 69. The National Library 70. National Transportation Agency 71. Northern Pipeline Agency 72. Patented Medicine Prices Review Board 73. Petroleum Monitoring Agency 74. Privy Council Office 75. Canadian Intergovernmental Conference Secretariat 76. Commissioner of Official Languages 77. Economic Council of Canada 78. Public Service Staff Relations Office 79. Office of the Secretary to the Governor General 80. Office of the Chief Electoral Officer 81. Federal Provincial Relations Office 82. Procurement Review Board 83. Royal Commission on Electoral Reform and Party Financing 84. Royal Commission on National Passenger Transportation 85. Royal Commission on New Reproductive Technologies 86. Royal Commission on the Future of the Toronto Waterfront 87. Statistics Canada 88. Tax Court of Canada, Registry of the 89. Agricultural Stabilization Board 90. Canadian Aviation Safety Board 91. Canadian Centre for Occupational Health and Safety 92. Canadian Transportation Accident Investigation and Safety Board 93. Director of Soldier Settlement 94. Director, The Veterans' Land Act 95. Fisheries Prices Support Board 96. National Battlefields Commission 97. Royal Canadian Mounted Police 98. Royal Canadian Mounted Police External Review Committee 99. Royal Canadian Mounted Police Public Complaints Commission 100. Department of National Defence

The following goods purchased by the Department of National
Defence and the Royal Canadian Mounted Police are included in
the coverage of this Chapter, subject to the provisions of
Article 1018(1) (Exceptions).

(Numbers refer to the Federal Supply Classification code)

22. Railway equipment
23. Motor vehicles, trailers and cycles (except buses in
2310, military trucks and trailers in 2320 and 2330 and
tracked combat, assault and tactical vehicles in 2350)
24. Tractors
25. Vehicular equipment components
26. Tires and tubes
29. Engine accessories
30. Mechanical power transmission equipment
32. Woodworking machinery and equipment
34. Metal working equipment
35. Service and trade equipment
36. Special industry machinery
37. Agricultural machinery and equipment
38. Construction, mining, excavating and highway maintenance
equipment
39. Materials handling equipment
40. Rope, cable, chain and fittings
41. Refrigeration and air conditioning equipment
42. Fire fighting, rescue and safety equipment (except 4220
Marine Life-saving and diving equipment, 4230
Decontaminating and impregnating equipment)
43. Pumps and compressors
44. Furnace, steam plant, drying equipment and nuclear
reactors
45. Plumbing, heating and sanitation equipment
46. Water purification and sewage treatment equipment
47. Pipe, tubing, hose and fittings
48. Valves
49. Maintenance and repair shop equipment
52. Measuring tools
53. Hardware and abrasives
54. Prefabricated structures and scaffolding
55. Lumber, millwork, plywood and veneer
56. Construction and building materials
61. Electric wire and power and distribution equipment
62. Lighting fixtures and lamps
63. Alarm and signal systems
65. Medical, dental and veterinary equipment and supplies
66. Instruments and laboratory equipment (except 6615:
Automatic pilot mechanisms and airborne Gyro components
6665: Hazard-detecting instruments and apparatus)
67. Photographic equipment
68. Chemicals and chemical products
69. Training aids and devices
70. General purpose automatic data processing equipment,
software, supplies and support equipment (except 7010
ADPE configurations)
71. Furniture
72. Household and commercial furnishings and appliances
73. Food preparation and serving equipment
74. Office machines, text processing system and visible
record equipment
75. Office supplies and devices
76. Books, maps and other publications (except 7650 drawings
and specifications)
77. Musical instruments, phonographs and home-type radios
78. Recreational and athletic equipment
79. Cleaning equipment and supplies
80. Brushes, paints, sealers and adhesives
81. Containers, packaging and packing supplies
85. Toiletries
87. Agricultural supplies
88. Live animals
91. Fuels, lubricants, oils and waxes
93. Non-metallic fabricated materials
94. Non-metallic crude materials
96. Ores, minerals and their primary products
99. Miscellaneous

Notes:

1. Notwithstanding anything in this Annex, this Chapter does not
apply to procurements in respect of:

(a) the Departments of Transport Canada, Communications Canada and Fisheries and Oceans respecting FSCs 70 (automatic data processing equipment, software supplies and support equipment), 74 (office machines, text processing systems and visible record equipment) and 36 (special industry machinery); and

(b) agricultural products made in furtherance of agricultural
support programs or human feeding programs.

2. The General Notes for Canada as set out in Annex 1002.7 apply to this Annex.

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ANNEX 1002.1

Schedule of Mexico

1. Secretar¡a de Gobernaci¢n
- Centro Nacional de Estudios Municipales
- Comisi¢n Calificadora de Publicaciones y Revistas
Ilustradas
- Consejo Nacional de Poblaci¢n
- Archivo General de la Naci¢n
- Instituto Nacional de Estudios Hist¢ricos de la
Revoluci¢n Mexicana
- Patronato de Asistencia para la Reincorporaci¢n Social
- Centro Nacional de Prevenci¢n de Desastres
- Consejo Nacional de Radio y Televisi¢n
- Comisi¢n Mexicana de Ayuda a Refugiados

2. Secretar¡a de Relaciones Exteriores - Secci¢n Mexicana de la Comisi¢n Intercional de L¡mites y Aguas Mxico-EEUU - Secci¢n Mexicana de la Comisi¢n Internacional de L¡mites y Aguas Mxico-Guatemala

3. Secretar¡a de Hacienda y Crdito P£blico
- Comisi¢n Nacional Bancaria
- Comisi¢n Nacional de Valores
- Comisi¢n Nacional de Seguros y Fianzas
- Instituto Nacional de Estadistica , Geograf¡a e
Inform tica

4. Secretar¡a de Agricultura y Recursos Hidraulicos
- Instituto Mexicano de Tecnolog¡a del Agua
- Instituto Nacional de Investigaciones Forestales y
Agropecuarias
- Apoyos a Servicios a la Comercializaci¢n Agropecuaria,
Aserca

5. Secretar¡a de Comunicaciones y Transportes (including the
Instituto Mexicano de Comunicaciones and the Instituto
Mexicano de Transporte)
- Comisi¢n Nacional Coordinadora de Puertos

6. Secretar¡a de Comercio y Fomento Industrial

7. Secretar¡a de Educaci¢n P£blica
- Instituto Nacional de Antropolog¡a e Historia
- Instituto Nacional de Bellas Artes y Literatura
- Radio Educaci¢n
- Centro de Ingenier¡a y Desarrollo Industrial
- Consejo Nacional para la Cultura y las Artes
- Comisi¢n Nacional del Deporte

8. Secretar¡a de Salud
- Administraci¢n del Patrimonio de la Beneficencia P£blica
- Centro Nacional de la Transfusi¢n Sanguinea
- Gerencia General de Farmacias
- Gerencia General de Biol¢gicos y Reactivos
- Consejo Interno del Centro de Obras y Equipamiento en
Salud
- Instituto de la Comunicaci¢n Humana Dr. Andrs Bustamante
Gurr¡a
- Instituto Nacional de Medicina de la Rehabilitaci¢n
- Instituto Nacional de Ortopedia
- Consejo Nacional para la Prevenci¢n y Control del
S¡ndrome de la Inmunodeficiencia Adquirida, Conasida

9. Secretar¡a del Trabajo y Previsi¢n Social
- Procuradur¡a Federal de la Defensa del Trabajo
- Unidad Coordinadora del Empleo, Capacitaci¢n y
Adiestramiento

10. Secretar¡a de la Reforma Agraria
- Instituto de Capacitaci¢n Agraria

11. Secretar¡a de Pesca
- Instituto Nacional de la Pesca

12. Procuradur¡a General de la Rep£blica

13. Secretar¡a de Energia Minas e Industria Paraestatal
- Comisi¢n Nacional de Seguridad Nuclear y Salvaguardias
- Centro de Promoci¢n y Evaluaci¢n de Proyectos
- Centro Nacional de Ahorro Energtico

14. Secretar¡a de Desarrollo Social

15. Secretar¡a de Turismo

16. Secretar¡a de la Contralor¡a General de La Federaci¢n

17. Comisi¢n Nacional de Zonas Aridas

18. Comisi¢n Nacional de Libros de Texto Gratuito

19. Comisi¢n Nacional de Derechos Humanos

20. Consejo Nacional de Fomento Educativo

21. Secretar¡a de la Defensa Nacional

22. Secretar¡a de Marina

The following products purchased by the Secretar¡a de la
Defensa Nacional and the Secretar¡a de Marina are included in
the coverage of this Chapter, subject to the application of
paragraph 1 in Article 1018(1) (Exceptions).

(Numbers refer to the Federal Supply Classification Code, FSC)

22. Railway equipment
23. Motor vehicles, trailers and cycles (except buses in
2310, military trucks and trailers in 2320 and 2330 and
tracked combat, assault and tactical vehicles in 2350)
24. Tractors
25. Vehicular equipment components
26. Tires and tubes
29. Engine accessories
30. Mechanical power transmission equipment
32. Woodworking machinery and equipment
34. Metal working machinery
35. Service and trade equipment
36. Special industry machinery
37. Agricultural machinery and equipment
38. Construction, mining, excavating and highway maintenance
equipment
39. Materials handling equipment
40. Rope, cable, chain and fittings
41. Refrigeration and air conditioning equipment
42. Fire fighting, rescue and safety equipment
43. Pumps and compressors
44. Furnace, steam plant, drying equipment and nuclear
reactors
45. Plumbing, heating and sanitation equipment
46. Water purification and sewage treatment equipment
47. Pipe, tubing, hose and fittings
48. Valves
49. Maintenance and repair shop equipment
52. Measuring tools
53. Hardware and abrasives
54. Prefabricated structures and scaffolding
55. Lumber, millwork, plywood and veneer
56. Construction and building materials
61. Electric wire and power and distribution equipment
62. Lighting fixtures and lamps
63. Alarm and signal systems
65. Medical, Dental, and Veterinary Equipment and Supplies
66. Instruments and laboratory equipment
67. Photographic equipment
68. Chemicals and chemical products
69. Training aids and devices
70. General purpose ADPE, software, supplies and support
equipment
71. Furniture
72. Household and commercial furnishings and appliances
73. Food preparation and serving equipment
74. Office machines, text processing system and visible
record equipment
75. Office supplies and devices
76. Books, maps and other publications (except 7650: Drawings
and specifications)
77. Musical instruments, phonographs and home-type radios
78. Recreational and athletic equipment
79. Cleaning equipment and supplies
80. Brushes, paints, sealers and adhesives
81. Containers, packaging and packing supplies
85. Toiletries
87. Agricultural supplies
88. Live animals
93. Non-metallic fabricated materials
94. Non-metallic crude materials
96. Ores, minerals and their primary products (except 9620:
minerals, natural and synthetic)
99. Miscellaneous

Notes:

1. National security exceptions include procurements made in support of safeguarding nuclear materials or technology.

2. The General Notes for Mexico as set out in Annex 1002.7 apply to this Annex.

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ANNEX 1002.1

Schedule of the United States

1. Department of Agriculture (This Chapter does not apply to procurement of agricultural products made in furtherance of agricultural support programs or human feeding programs.) Federal buy national requirements imposed as conditions of funding by the Rural Electrification Administration will not apply to products and services of Mexico and Canada. 2. Department of Commerce 3. Department of Education 4. Department of Health and Human Services 5. Department of Housing and Urban Development 6. Department of the Interior, including the Bureau of Reclamation (For suppliers of goods and services of Canada, the obligations of this Chapter will apply to procurements by the Bureau of Reclamation of the Department of Interior only at such time as the obligations of this Chapter take effect for procurements by Canadian Provincial Hydro utilities.) 7. Department of Justice 8. Department of Labor 9. Department of State 10. United States Agency for International Development 11. Department of the Treasury 12. Department of Transportation (Pursuant to Article 1018, the national security considerations applicable to the Department of Defense are equally applicable to the Coast Guard, a military unit of the United States.) 13. Department of Energy (This Chapter does not apply, pursuant to Article 1018, to national security procurements made in support of safeguarding nuclear materials or technology and entered into under the authority of the Atomic Energy Act; and to oil purchases related to the Strategic Petroleum Reserve.) 14. General Services Administration (except Federal Supply Groups 51 and 52 and Federal Supply Class 7340) 15. National Aeronautics and Space Administration 16. The Department of Veterans Affairs 17. Environmental Protection Agency 18. United States Information Agency 19. National Science Foundation 20. Panama Canal Commission 21. Executive Office of the President 22. Farm Credit Administration 23. National Credit Union Administration 24. Merit Systems Protection Board 25. ACTION 26. United States Arms Control and Disarmament Agency 27. The Office of Thrift Supervision 28. The Federal Housing Finance Board 29. National Labor Relations Board 30. National Mediation Board 31. Railroad Retirement Board 32. American Battle Monuments Commission 33. Federal Communications Commission 34. Federal Trade Commission 35. Inter-State Commerce Commission 36. Securities and Exchange Commission 37. Office of Personnel Management 38. United States International Trade Commission 39. Export-Import Bank of the United States 40. Federal Mediation and Conciliation Service 41. Selective Service System 42. Smithsonian Institution 43. Federal Deposit Insurance Corporation 44. Consumer Product Safety Commission 45. Equal Employment Opportunity Commission 46. Federal Maritime Commission 47. National Transportation Safety Board 48. Nuclear Regulatory Commission 49. Overseas Private Investment Corporation 50. Administrative Conference of the United States 51. Board for International Broadcasting 52. Commission on Civil Rights 53. Commodity Futures Trading Commission 54. The Peace Corps 55. National Archives and Records Administration 56. Department of Defense, including the Army Corps of Engineers

This Chapter will not apply to the following purchases of the
DOD:

(a) Federal Supply Classification (FSC) 83 - all elements of this classification other than pins, needles, sewing kits, flagstaffs, flagpoles, and flagstaff trucks; (b) FSC 84 - all elements other than sub-class 8460 (luggage); (c) FSC 89 - all elements other than sub-class 8975 (tobacco products); (d) FSC 2310 - (buses only); (e) speciality metals, defined as steels melted in steel manufacturing facilities located in the United States or its possessions, where the maximum alloy content exceeds one or more of the following limits, must be used in products purchased by DOD: (1) manganese, 1.65 per cent; silicon, 0.60 per cent; or copper, 0.06 per cent; or which contains more than 0.25 per cent of any of the following elements: aluminium, chromium, cobalt, columbium, olybdenum, nickel, titanium, tungsten, or vanadium; (2) metal alloys consisting of nickel, iron- nickel and cobalt base alloys containing a total of other alloying metals (except iron) in excess of 10 per cent; (3) titanium and titanium alloys; or (4) zirconium base alloys; (f) FSC 19 and 20 - that part of these classifications defined as naval vessels or major components of the hull or superstructure thereof; (g) FSC 51; and (h) the following FSC categories are not generally covered due to application of Article 1018(1) (Exceptions): 10, 12, 13, 14, 15, 16, 17, 19, 20, 28, 31, 58, 59 and 95.

This Chapter will generally apply to DOD purchases of the
following FSC categories subject to United States Government
determinations under the provisions of Article 1018(1)
(Exceptions):

22. Railway Equipment
23. Motor Vehicles, Trailers, and Cycles (except buses in
2310)
24. Tractors
25. Vehicular Equipment Components
26. Tires and Tubes
29. Engine Accessories
30. Mechanical Power Transmission Equipment
32. Woodworking Machinery and Equipment
34. Metalworking Machinery
35. Service and Trade Equipment
36. Special Industry Machinery
37. Agricultural Machinery and Equipment
38. Construction, Mining, Excavating, and Highway Maintenance
Equipment
39. Materials Handling Equipment
40. Rope, Cable, Chain and Fittings
41. Refrigeration and Air Conditioning Equipment
42. Fire Fighting, Rescue and Safety Equipment
43. Pumps and Compressors
44. Furnace, Steam Plant, Drying Equipment and Nuclear
Reactors
45. Plumbing, Heating and Sanitation Equipment
46. Water Purification and Sewage Treatment Equipment
47. Pipe, Tubing, Hose and Fittings
48. Valves
49. Maintenance and Repair Shop Equipment
52. Measuring Tools
53. Hardware and Abrasives
54. Prefabricated Structures and Scaffolding
55. Lumber, Millwork, Plywood and Veneer
56. Construction and Building Materials
61. Electric Wire, and Power and Distribution Equipment
62. Lighting Fixtures and Lamps
63. Alarm and Signal Systems
65. Medical, Dental, and Veterinary Equipment and Supplies
66. Instruments and Laboratory Equipment
67. Photographic Equipment
68. Chemicals and Chemical Products
69. Training Aids and Devices
70. General Purpose ADPE, Software, Supplies and Support
Equipment
71. Furniture
72. Household and Commercial Furnishings and Appliances
73. Food Preparation and Serving Equipment
74. Office machines, text processing system and visible
record equipment
75. Office Supplies and Devices
76. Books, Maps and Other Publications
77. Musical Instruments, Phonographs, and Home Type Radios
78. Recreational and Athletic Equipment
79. Cleaning Equipment and Supplies
80. Brushes, Paints, Sealers and Adhesives
81. Containers, Packaging and Packing Supplies
85. Toiletries
87. Agricultural Supplies
88. Live Animals
91. Fuels, Lubricants, Oils and Waxes
93. Non-metallic Fabricated Materials
94. Non-metallic Crude Materials
96. Ores, Minerals and their Primary Products
99. Miscellaneous

Note:

The General Notes for the United States as set out in Annex 1002.7 apply to this Annex.

=============================================================================
ANNEX 1002.2

State and Provincial Government Entities

Coverage under this Annex will be addressed following consultations with state and provincial governments under the terms and conditions set out in Article 1024 (Further Negotiations).

Note:

The General Notes as set out in Annex 1002.7 apply to this Annex.

=============================================================================
ANNEX 1002.3

Government Enterprises

Schedule of Canada

1. Canada Post Corporation 2. National Capital Commission 3. St. Lawrence Seaway Authority 4. Royal Canadian Mint 5. Canadian National Railways 6. Via Rail 7. Canadian Museum of Civilization 8. Canadian Museum of Nature 9. National Gallery of Canada 10. National Museum of Science and Technology 11. Defence Construction (1951) Ltd.

Notes:

1. With respect to procurements by Canadian National Railways, St. Lawrence Seaway Authority and Via Rail, coverage is subject to Article 1019(5) (Provision of Information), respecting the protection of the commercial confidentiality of information provided.

2. The General Notes for Canada as set out in Annex 1002.7 apply to this Annex.

Schedule of Mexico

Printing and Editorial 1. Talleres Gr ficos de la Naci¢n 2. Productora e Importadora de Papel S.A de C.V., Pipsa

Communications and Transportation 3. Aeropuertos y Servicios Auxiliares, ASA 4. Caminos y Puentes Federales de Ingreso y Servicios Conexos, Capufe 5. Puertos Mexicanos 6. Servicio Postal Mexicano 7. Ferrocarriles Nacionales de Mxico, Ferronales 8. Telecomunicaciones de Mxico, Telecom

Industry 9. Petr¢leos Mexicanos, Pemex (This Chapter does not apply to procurement of fuels and gas.) 10. Comisi¢n Federal de Electricidad, CFE 11. Consejo de Recursos Minerales 12. Comisi¢n de Fomento Minero

Commerce 13. Compa¤¡a Nacional de Subsistencias Populares, Conasupo (This Chapter does not apply to procurement of agricultural products made in furtherance of agricultural support programmes or human feeding programmes.) 14. Bodegas Rurales Conasupo, S.A. de C.V. 15. Distribuidora e Impulsora de Comercio, Diconsa 16. Leche Industrializada Conasupo, S.A. de C.V., Liconsa (This Chapter does not apply to procurement of agricultural products made in furtherance of agricultural support programmes or human feeding programmes.) 17. Procuradur¡a Federal del Consumidor 18. Instituto Nacional del Consumidor 19. Laboratorios Nacionales de Fomento Industrial 20. Servicio Nacional de Informaci¢n de Mercados

Social Security 21. Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado, ISSSTE 22. Instituto Mexicano del Seguro Social, IMSS 23. Sistema Nacional para el Desarrollo Integral de la Familia, DIF (This Chapter does not apply to procurement of agricultural products made in furtherance of agricultural support programmes or human feeding programmes.) 24. Servicios Asistenciales de la Secretar¡a de Marina 25. Instituto de Seguridad Social para las Fuerzas Armadas Mexicanas 26. Instituto Nacional Indigenista, INI 27. Instituto Nacional Para la Educaci¢n de los Adultos 28. Centros de Integraci¢n Juvenil 29. Instituto Nacional de la Senectud

Others 30. Comite Administrador del Programa Federal de Construcci¢n de Escuelas, Capfce 31. Comisi¢n Nacional del Agua, CNA 32. Comisi¢n Para la Regularizaci¢n de la Tenencia de la Tierra 33. Consejo Nacional de Ciencia y Tecnolog¡a, Conacyt 34. Notimex, S.A . de C.V. 35. Instituto Mexicano de Cinematograf¡a 36. Loter¡a Nacional para la Asistencia P£blica 37. Pron¢sticos Deportivos

Notes:

1. National security exceptions include procurements made in support of safeguarding nuclear materials or technology.

2. The General Notes for Mexico as set out in Annex 1002.7 apply to this Annex.

Schedule of the United States

1. Tennessee Valley Authority
2. Power Marketing Administrations of the Department of Energy
- Bonneville Power Administration
- Western Area Power Administration
- Southeastern Power Administration
- Southwestern Power Administration
- Alaska Power Administration
3. St. Lawrence Seaway Development Corporation

Notes:

1. For suppliers of goods and services of Canada, the obligations of this Chapter will apply to procurements by the Tennessee Valley Authority and the Power Marketing Administrations of the Department of Energy only at such time as the obligations of this Chapter take effect for procurements by Canadian Provincial Hydro utilities.

2. The General Notes for the United States as set out in Annex 1002.7 apply to this Annex.

=============================================================================
ANNEX 1002.4

Services

I. General Provisions

1. Except for the services listed in Part II of this Annex, all services procured by the entities listed in Annex 1002.1 (Federal Government Entities) and Annex 1002.3 (Government Enterprises) are subject to this Chapter.

2. Contracts for construction services are subject to this Chapter as specified in Annex 1002.5 (Construction Services).

3. The Parties shall adopt a universal list of services for reporting purposes, which is indicative of the services procured by the entities of the Parties, and is contained in the Appendix to this Annex.

4. The Parties shall update, as appropriate, the list of universal services included in the Appendix to this Annex at such time as they mutually agree.

5. Notwithstanding paragraph 1, for Mexico only the services included in the Temporary Schedule of Mexico will be subject to this Chapter, until such time as Mexico has completed its schedule under Part II pursuant to paragraph 6.

6. Mexico will develop and, after consultations with the other Parties, complete its list of services set out under the Schedule of Mexico in Part II of this Annex no later than July 1, 1995.

Temporary Schedule of Mexico: Services Included

(Based on the United Nations Central Product Classification, CPC)

Professional Services
863 Taxation services (excluding legal services)
8671 Architectural services
86711 Advisory and pre-design architectural services
87612 Architectural design services
87713 Contract administration services
86714 Combined architectural design and contract
administration services
86719 Other architectural services
8672 Engineering services
86721 Advisory and consultative engineering services
86722 Engineering design services for foundations and
building structures
86723 Engineering design services for mechanical and
electrical installations for buildings
86724 Engineering design services for civil engineering
construction
86725 Engineering design for industrial processes and
production
86726 Engineering design services n.e.c.
86727 Other engineering services during the construction
and installation phase
86729 Other engineering services
8673 Integrated engineering services
86731 Integrated engineering services for transportation,
infrastructure turnkey projects
86732 Integrated engineering and project management
services for water supply and sanitation works
turnkey projects
86733 Integrated engineering services for the
construction of manufacturing turnkey projects
86739 Integrated engineering services for other turnkey
projects
8674 Urban planning and landscape architectural services

Computer and Related Services
841 Consultancy services related to the installation of
computer hardware
842 Software implementation services, including systems and
software consulting services, systems analysis, design,
programming and maintenance services
843 Data processing services, including processing,
tabulation and facilities management services
844 Data base services
845 Maintenance and repair services of office machinery and
equipment including computers
849 Other computer services

Real Estate Services
821 Real estate services involving own or leased property
822 Real estate services on a fee or contract basis

Rental/Leasing Services without Operators 831 Leasing or rental services concerning machinery and equipment without operator, including computers 832 Leasing or rental services concerning personal and household goods (excluding in 83201, the rental of prerecorded records, sound cassettes, CD's and excluding 83202, rental services concerning video tapes)

Other Business Services
865 Management consulting services
86501 General management consulting services
86503 Marketing management consulting services
86504 Human resources management consulting services
86505 Production management consulting services
86509 Other management consulting services, including
agrology, agronomy, farm management and related
consulting services
8676 Technical testing and analysis services including quality
control and inspection
8814 Services incidental to forestry and logging, including
forest management
883 Services incidental to mining, including, drilling and
field services
5115 Site preparation for mining
8675 Related scientific and technical consulting services
86751 Geological, geophysical and other scientific
prospecting services, including those related to
mining
86752 Subsurface surveying services
86753 Surface surveying services
86754 Map making services
663 Repair services of personal and household goods
8861 Repair services incidental to metal products, to
machinery and equipment including computers,
8866 and communications equipment
874 Building-cleaning
876 Packaging services

Environmental Services 940 Sewage and refuse disposal, sanitation and other environmental protection services, including sewage services, nature and landscape protection services and other environmental protection services n.e.c.

Hotels and restaurants(including catering)
641 Hotel and other lodging services
642/3 Food and beverage serving services

Travel agency and tour operators services 7471 Travel agency and tour operator services II. Services Excluded from Coverage

[Subject to review]

The following services contracts are excluded in their entirety by the Parties:

Schedule of Canada

(Based on the United Nations Central Product Classification, CPC)

CPC
1. Transport, storage and communication services
- Land Transport services 71
- Water Transport services 72
- Air Transport Services 73
- Supporting and Auxiliary Transport services (except
7471: Travel Agencies and Tour Operator services) 74
- Post and Telecommunication services (except 7512:
Courier services and 7523: Data Transmission
services) 75
Note: All transportation services, including related
repair and overhaul and launching services and
transportation services, where incidental to procurement
contracts, are not subject to this Chapter.

2. Business services; agricultural, mining and manufacturing
services
- Financial, Intermediation services and Auxiliary
services therefor 81
- Leasing or rental services concerning televisions,
radios, video cassette recorders and related
equipment and accessories 83201
- Leasing or rental services concerning video tapes 83202
- Research and Development services 85
- Legal services (except: Advisory services on
Foreign Law) 861
- Legal services incidental to Taxation Services 863
- Market Research and Public Opinion Polling
services 864
- Financial Management consulting services (except
corporate tax) 86502
- Public relations services 86506
- Services related to management consulting 866
- Related scientific and technical consulting
services 8675
- Business Services, n.e.c. (except 8740: Building
cleaning services and 8760: Packaging services) 87
- Services incidental to agriculture, hunting and
forestry (except 8814: services incidental to
forestry and logging; and 8830: services incidental
to mining) 881
- Services incidental to fishing 882
- Services incidental to manufacturing, except to the
manufacture of metal products, machinery and
equipment 884
- Services incidental to the manufacture of metal
products, machinery and equipment (except 8852:
Manufacture of fabricated metal products, except
machinery and equipment on a fee or contract
basis) 885
- Repair services, n.e.c. of motor vehicles, trailers
and semi-trailers, on a fee or contract basis 8867
- Repair services of other transport equipment, on a
fee or contract basis 8868
- Services incidental to energy distribution 887
- Intangible assets 89

3. Community, Social and Professional Services
- Education services 92
- Health and Social Services 93
- Services of Membership Organizations 95
- Recreation, cultural and sporting services 96
- Other services 97
- Services provided by extraterritorial organizations
and bodies 99

4. Contracts of the departments of Transport Canada,
Communications Canada and Fisheries and Oceans respecting FSCs
70 (automatic data processing equipment, software supplies and
support equipment), 74 (office machines, text processing
systems and visible record equipment), 36 (special industry
machinery).

5. Research and development services.

6. Dredging.

7. All services purchased in support of military forces located
overseas.

8. Management and operation contracts awarded to federally-funded
research and development centers or related to carrying out
government sponsored research programs.

9. Public utilities services.

10. Printing and publishing.

Note:

The General Notes for Canada as set out in Annex 1002.7 apply to this Annex.

Schedule of Mexico

(Based on the United Nations Central Product Classification, CPC)

CPC
1. All transportation services, including transportation
services incidental to procurement contracts:
- Land transportation 71
- Water transport 72
- Air transport 73
- Supporting and auxiliary transport 74
- Post and telecommunication 75
- Repair services of other transport equipment, on a
fee or contract basis 8868

2. All risk-sharing contracts by Pemex.

3. Public utilities services (including telecommunications,
transmission, water or energy services).

4. Management and operation contracts awarded to federally-funded
research and development centers or related to carrying out
government sponsored research programs.

5. Financial services

6. Research and development services

7. Confidential consulting services (provided that they are not
used with a view to avoiding maximum possible competition or
in a manner that would constitute a means of discrimination
among suppliers of the other Parties or protection to Mexican
suppliers).

Note:
The General Notes for Mexico as set out in Annex 1002.7 apply
to this Annex.

Schedule of the United States

(Based on the Procurement Data System Services Codes)
FSC
1. Transportation and related services (except V231:
Lodging and Hotel/Motel; and V302: travel agent)
- Transportation V
- Maintenance, Repair and Rebuilding of Ships JO19
- Non-nuclear Ship Repair J998 and J999
- Modification of Ships KO19
In addition, transportation services, where incidental
to procurement contracts, are not subject to this Chapter.

2. Dredging Y216

3. All services purchased in support of military forces
overseas.

4. Management and operation contracts awarded to
- federally-funded research and development centers
(FFRDCs) or related to carrying out
government-sponsored research programs
(classification to be clarified) M181-184
- by DOD, DOE, and NASA M

5. Public utilities and telecommunications services:
- Utilities S1
- ADP Telecommunications and Transmission Services D304
- ADP Teleprocessing and Timesharing Services D305
- Telecommunications Network Management Services D316
- Automated News Services, Data Services, or other
information D317
- Other ADP and Telecommunications services D399

6. Research and Development services A

Note: The General Notes for the United States as set out in Annex 1002.7 apply to this Annex.

Appendix to ANNEX 1002.4
Universal List of Services

ANNEX 1002.5

Construction Services

I. General Provisions

1. Except for the construction services listed in Part II of this Annex, all construction services as specified in the Appendix to this Annex, which are procured by the entities listed in Annex 1002.1 (Federal Government Entities) and Annex 1002.3 (Government Enterprises) are subject to this Chapter.

2. The Parties will update, as appropriate, the list of construction services included in the Appendix at such time as they mutually agree.

II. Construction Services Excluded from Coverage

The following services contracts are excluded in their entirety by the Parties:

Schedule of Canada

1. Dredging.

2. Construction contracts tendered by or on behalf of Department of Transport.

Note: The General Notes for Canada as set out in Annex 1002.7 apply to this Annex.

Schedule of Mexico

All risk-sharing contracts by Pemex.

Notes:

The General Notes for Mexico as set out in Annex 1002.7 apply
to this Annex.

Schedule of the United States

Dredging.

Notes:

1. In accordance with the obligations of this Chapter, buy national requirements on articles, supplies, and materials acquired for use in construction contracts subject to the obligations of this Chapter will not apply to products of Canada or Mexico.

2. The General Notes for the United States as set out in Annex 1002.7 apply to this Annex.

Appendix to ANNEX 1002.5

List of Construction Services

List of contracts for construction services which are subject to the obligations of this Chapter, except as otherwise provided:

(Based on the United Nations Central Product Classification, CPC)

Division 51 Construction work

511 Pre-erection work at construction sites
5111 Site investigation work
5112 Demolition work
5113 Site formation and clearance work
5114 Excavating and earthmoving work
5115 Site preparation work for mining
5116 Scaffolding work

512 Construction works for buildings
5121 For one and two dwelling buildings
5122 For multi-dwelling buildings
5123 For warehouses and industrial buildings
5124 For commercial buildings
5125 For public entertainment buildings
5126 For hotel, restaurant and similar buildings
5127 For educational buildings
5128 For health buildings
5129 For other buildings

513 Construction work for civil engineering
5131 For highways (except elevated highways), streets, roads,
railways and airfield runways
5132 For bridges, elevated highways, tunnels and subways
5133 For waterways, harbours, dams and other water works
5134 For long distance pipelines, communication and power
lines (cables)
5135 For local pipelines and cables; ancillary works
5136 For constructions for mining and manufacturing
5137 For constructions for sport and recreation
5139 For engineering works n.e.c.

514 5140 Assembly and erection of prefabricated constructions

515 Special trade construction work
5151 Foundation work, including pile driving
5152 Water well drilling
5153 Roofing and water proofing
5154 Concrete work
5155 Steel bending and erection, including welding)
5156 Masonry work
5159 Other special trade construction work

516 Installation work
5161 Heating, ventilation and air conditioning work
5162 Water plumbing and drain laying work
5163 Gas fitting construction work
5164 Electrical work
5165 Insulation work (electrical wiring, water, heat, sound)
5166 Fencing and railing construction work
5169 Other installation work

517 Building completion and finishing work
5171 Glating work and window glass installation work
5172 Plastering work
5173 Painting work
5174 Floor and wall tilling work
5175 Other floor laying, wall covering and wall papering work
5176 Wood and metal joinery and carpentry work
5177 Interior fitting decoration work
5178 Ornamentation fitting work
5179 Other building completion and finishing work

518 5180 Renting services related to equipment for construction or demolition of buildings or civil engineering works, with operator

=============================================================================
ANNEX 1002.6

Transition Provisions for Mexico

Notwithstanding any other provision of this Chapter, Annexes 1002.1 through 1002.5 are subject to the following:

Pemex, CFE and Non-Energy Construction

1. The obligations of this Chapter shall not apply to:

(a) 50 percent of the total annual procurement above thresholds of goods, services and construction services by Pemex;

(b) 50 percent of the total annual procurement above thresholds of goods, services and construction services by CFE; and

(c) 50 percent of the total annual procurement above thresholds of construction services, excluding construction services procured by Pemex and CFE.

2. Loans from regional and multilateral financial institutions will not be included for purposes of calculating the reservations specified in paragraph 1 or subject to other restrictions.

3. As of January 1st, 1994, the reservation specified in paragraph 1 will decrease according to the following schedule:

1994 1995 1996 1997 1998
50% 45% 45% 40% 40%

1999 2000 2001 2002 2003 and thereafter
35% 35% 30% 30% 0%

4. For Pemex and CFE, no more than 10 percent of their respective reserved procurement under paragraphs 1 and 3 shall be applied within a single Federal Supply Classification (FSC) class (or other classification system as agreed by all Parties) in a single year.

5. After December 31, 1998, Pemex and CFE each will make all reasonable efforts to assure that their respective total reservation in each FSC class (or other classification system as agreed by all Parties) shall not exceed 50 percent in a single year.

Pharmaceuticals

6. The provisions of this Chapter shall not apply to drugs whose patents have expired or are not currently patented (FSC class 6505) procured by the Secretar¡a de Salud, IMSS, ISSSTE, Secretar¡a de Defensa and the Secretar¡a de Marina. This exception shall be eliminated after 8 years from the date of entry into force of this Agreement. Procurement of biologicals and patented drugs shall not be exempted under any other provision of the Annexes of this Chapter. Nothing in this Chapter shall be interpreted in a way which will impair the protection provided by Chapter 17 (Intellectual Property) of this Agreement.

Time Limits for Tendering and Delivery

7. Upon the date of entry into force of this Agreement in January 1, 1994, Mexico will make best efforts to comply with the provisions of Article 1012 (Time Limits for Tendering and Delivery) with respect to the 40 day time limits. However, Mexico will fully comply with such obligations as from January 1, 1995.

Provision of Information

8. The Parties recognize that Mexico may be required to undertake extensive retraining of personnel, introduce new data maintenance and reporting systems and make major adjustments to the procurement systems of certain entities in order to comply with the obligations of this Chapter. The Parties also recognize that Mexico may encounter difficulties in making the transition to procurement systems that facilitate full compliance with the obligations of this Chapter.