The U.S.-Mexico-Canada Agreement (USMCA): Some Surprising Outcomes in Procurement

Article available at:  https://ssrn.com/abstract=3268740

Christopher R. Yukins – George Washington University Law School

The Trump administration recently released the proposed text of the U.S.-Mexico-Canada Agreement (USMCA), a major regional trade agreement that, if ratified, would replace the North American Free Trade Agreement (NAFTA).  While the government procurement chapter of the proposed USMCA was largely a copy-and-paste from the abandoned Trans-Pacific Partnership agreement (TPP), the procurement chapter of the USMCA did contain a few major surprises — including the omission of Canada.  This article reviews the background to the USMCA, some of the most important elements of the agreement, and the lessons learned for future international cooperation in procurement policy and law.

This article draws in part upon a paper that Professor Yukins will present at an interdisciplinary conference in procurement at the Sorbonne University, Paris in October 2018.

European Commission Proposes Expanding the European Defence Fund—A Major Potential Barrier to Transatlantic Defense Procurement

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3204844

The European Commission has proposed expanding the European Defence Fund, an initiative to fund defense technology developed in Europe. As a general matter, only European firms would have access to the fund for development, and participating European nations would need to commit themselves to purchasing the defense materiel developed under the fund. In effect, this could lock U.S. firms out of billions of euros worth of European defense procurement over the coming years—despite long-standing reciprocal agreements under which the U.S. and its European allies agreed to open their defense markets. The fund was announced quietly last year and now, in the shadow of a trade war launched by the Trump administration, has evolved into a substantial potential barrier in the transatlantic defense market, and potentially another brick in a rising wall of protectionism between the U.S. and Europe.

60 Gov. Contractor para. 196 (June 27, 2018)

The Trade War Comes To Defense Procurement

In response to the Trump administration’s demands that Europe spend more on its own defense, and as part of a broader hardening of trade positions between the United States and Europe as a result of the Trump administration’s trade policies, Europe is moving forward with the European Defence Fund,  which will block non-European firms (including U.S. firms) from billions of dollars in European defense spending.  (Ironically, the Trump administration’s own “Buy American” initiative in procurement apparently has been stalled over the past year, and the Trump administration has pushed recently to expand foreign military sales by U.S. defense firms.)  The European initiative, which goes beyond the protections of the 2009 European defense directive, may be a violation of the many reciprocal defense procurement agreements between the United States and its European allies.  European officials have defended these bars against non-European contractors as “reciprocity” for U.S. security constraints on foreign ownership and control in the U.S. defense industrial base, but the protectionism of the European initiative appears to go well beyond normal security concerns — inspired, perhaps, by the Trump administration’s expansive use of “national security” as a rationale for protectionism.

Section 809 and ‘E-Portal’ Proposals, by Cutting Bid Protests in Federal Procurement, Could Breach International Agreements and Raise New Risks of Corruption

SSRN Link:  https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3176223

60 GOV’T CONTRACTOR ¶ 138 (2018)

GWU Law School Public Law Research Paper No. 2018-26

GWU Legal Studies Research Paper No. 2018-26

7 Pages Posted: 10 May 2018

Christopher R. Yukins

George Washington University – Law School

Dan Ramish

George Washington University – Law School

Date Written: 2018

Abstract

Bid protests — vendors’ challenges to contracting officials’ errors, either before or after award — have been an established part of federal procurement for at least a century. Protests (sometimes called “challenges” or “remedies proceedings” abroad) are a recognized bulwark against corruption in the United States, and have become a standard part of procurement systems around the world, often at the urging of the United States. But new proposals being considered for U.S. government procurement in practice could dramatically limit bid protests, in the name of streamlining the procurement process. This drastic change to U.S. procurement practices could violate international agreements under which the United States has agreed to maintain an effective bid protest system, and could raise new risks of corruption in procurement.

Special Procurement Investment Contracts – Russia

Russia’s Srussian-flagpecial Procurement Investment Contracts (SPIC).

From the Public Procurement Institute (Moscow, www.roszakupki.com):

SPIC is an agreement between investor and the Russian Federation and/or region of the Russian Federation under which investor commits to invest certain amount of money in creation, development or modernization of production facilities at the territory of Russia while the government guarantees freezing of tax burden and stability of normative requirements to products for the duration of an investment project and is obliged to apply stimulating measures to the investor, including tax benefits. And procurement idea is that starting from September 1, 2016 SPIC investors are entitled to claim the right to sell up to 30 % of produced merchandise under public procurement procedure on a non-competitive basis.

Background paper:  investment-contract-russia

An Introduction to Procurement in the Russian Federation

russian-flag

The Public Procurement Institute, Moscow, kindly provided these slides, procurement-in-russia, which were delivered at a briefing at George Washington University Law School on September 21, 2016.  Russia may join the WTO Government Procurement Agreement, as Jean Grier discussed in a recent blog posting, and so this sharing of information on the Russian procurement system is both timely and welcome.

Professor ZHAO Yong, University of International Relations – Beijing – New Text on U.S. “Green” Procurement

An Analysis of American Governance through the U. S. Federal Government’s Green Procurement System

 ZHAO Yong, University of International Relations, Beijing, email: yongjao@hotmail.com

(Text is in Mandarin, and available from the author)

 

[Abstract]

The formation of the green procurement system of the U. S. Federal Government is complex, the influence factors being numerous and the contents being comprehensive. This dissertation aims to provide a reference for the improvement of China’s government procurement system through exploring the cause, contents, features and evolution of the American green procurement system. Furthermore, by in-depth studying the American green procurement system as a breakthrough point so as to analyse  the social problem conduction mechanism, interest distribution mechanism and the power allocation mechanism of the U. S. Federal Government, this dissertation tried to discover the characteristics and means of the American governance, promote transforming the mode of China’s Governance and enhance Chinese Governments’ ability of governance and solving the practical problems of the current Chinese society.

After the World War II, the rapid development of American economy aggravated the degree of environment deterioration. An endless stream of environmental incidents and the enhancement of environmental awareness have promoted the awakening of public environmental interests. With the help of environmental organizations and research institutions, the public environmental interests can be effectively expressed, which prompted the politicians to address environmental issues into the political agenda. Then the environmental policies were shaped after the multi-player game. From 1960’s, the importance of environmental policy in the United States has been rising, with the changing of its connotation and the value orientation. In the same period, the Federal Government’s procurement policy stepped into the policy-stage after the liberalization-stage and the standardization-stage. The the overlap of the dense introduction stage of environmental policies and the policy-period of government procurement formed the basis for establishing green procurement laws and actions.

In the process of the formation of the environmental legislation system in America, the macro path is the self-generation and the micro path is bargaining. Citizens, environmental protection organizations, interest groups, administrative agencies, the sub-committees of the Congress and other parties in the process of the legislation played different roles. The development of the governance system is embodied in the progressive development path, during which the interests’ equilibrium of the participating parties in the evolution has been reached. Through environmental legislation, the federal government expanded its powers. In the aspect of government procurement, the laws were becoming more and more plentiful. The objectives were increasingly rich. The maturity of the procurement system makes it possible to combine the the social-economic laws and the procurement laws.

Due to the vast scale of government procurement, the multiplier effect and the little political resistance, the executive branch of the Federal Government launched a series of green procurement programs based on environmental legislation and procurement legislation. By studying the green procurement programs with different legal bases, various objects and goals, diversified implementation bodies and multiple challenges, we could recognize the complexity of governance of the environmental problems.

In order to achieve the objectives of environmental governance, it is necessary to transform the policies, laws and programs into government procurement activities by the contracting officers’ and suppliers’ behavior. The contracting officer will, under the guidance of the policy, laws and the green procurement programs, weigh a variety of the procurement factors and the environmental factors, formulate the green procurement plans and implement green procurement through a variety of procurement tools. Finally, the green governance on the supplier was achieved through the government contract. During the process, the Federal administrative agencies, the Congress, the courts, and the public oversight or supervise the procurement in different forms.

From China’s perspective, the enlightenment of the U. S. Federal Governments’ green procurement system and the governance mode is: it is necessary to establish and improve the environmental problems transmission mechanism and a balanced interest distribution mechanism; to advance green procurement programs cautiously; to actively participate in the GPA negotiation; and to react the climate change negotiations carefully.

[Keywords]  U. S. Federal Government, Green Procurement, Governance

“Modern Ghana” Posting on the World Bank’s New Procurement Framework — Now Effective

New World Bank Procurement Framework Promotes Strengthened National Procurement Systems

By World Bank
Flexible approach will help countries make the best use of public spending

The World Bank’s new Procurement Framework becomes effective tomorrow, July 1, 2016. Aimed at helping countries make the best use of their public spending, the new Framework will enhance the strategic role of procurement in development effectiveness.

“The new Procurement Framework reflects the views, knowledge, and expertise of a wide range of stakeholders from across the globe. The Bank can now offer a more modern and nimble procurement system to help promote sustainable development,” said Hart Schafer, World Bank Vice President for Operations Policy and Country Services .

The new Procurement Framework will allow the World Bank to better respond to the needs of client countries, while preserving robust procurement standards throughout Bank-supported projects. It provides an expanded range of procurement tools to enable a better fit for varying country contexts and client needs.

“With this modernization of the procurement system, the Bank looks forward to working together with its partner countries to strengthen efficiency in public spending and to strengthen procurement systems around the world. This will help assure that public resources are being well used, and countries can better deliver critical services such as education, health, and infrastructure” says Deborah Wetzel, Senior Director of the Governance Global Practice .

The World Bank’s Board of Executive Directors initially approved this new policy framework in July 2015. It governs procurement in Bank-financed projects in 172 countries worth about USD 56 billion. This new Framework is a result of an extensive review and three-year consultation process involving over 5,000 people in 100 countries including partner countries, CSOs, and private sector.

“Reflecting the latest thinking in procurement, including greater use of technology, the new Framework emphasizes greater choice and flexibility, quality, and accountability while enabling greater adaptation to country contexts,” said Robert Hunja, Director, Governance Global Practice .

The new Framework enables the Bank to work more closely with country partners in improving their own procurement systems. Furthermore, under this framework, clients can use the procurement arrangements of other multilateral development partners or of national agencies in some circumstances.

The new Framework will introduce an ICT based tracking and monitoring tool Systematic Tracking of Exchanges in Procurement (STEP) to make procurement processes speedier, while promoting transparency and accountability. The Bank will also step up its approach to resolving procurement related complaints.

http://www.modernghana.com/news/703203/new-world-bank-procurement-framework-promotes-strengthened-n.html?