Government Procurement in the U.S.-Colombia Trade Promotion Agreement
Government procurement typically represents 10 to 15 percent of a country’s Gross Domestic Product. Trade agreements that open foreign government procurement markets provide significant export opportunities for U.S. companies and American workers. When U.S. companies are able to sell into those foreign government procurement markets, they can boost exports and support better, higher-paying U.S. jobs.
The U.S.-Colombia Trade Promotion Agreement’s Government Procurement Chapter provides significant opportunities for U.S. companies to supply their goods and services to the Colombian government with strong procedures that apply to the conduct of the procurement. At the same time, the Agreement’s government procurement rules ensure that certain American business sectors – such as small businesses or textile companies bidding on Department of Defense procurement – continue to receive the same protections they have in other agreements, and also ensure that American environmental and labor safeguards will be maintained.
The Agreement’s government procurement obligations will open Colombia’s government procurement market to U.S. firms, creating significant new opportunities for exporters, and ensure that U.S. firms will get to bid on contracts on a level playing field with Colombian firms.
The Agreement grants U.S. firms rights to non-discriminatory treatment in bidding on the procurement of a broad range of Colombian government ministries, regional governments, and state-owned enterprises.
The Agreement provides U.S. suppliers with access to extensive opportunities to participate in procurement in all three branches of Colombia’s central government – executive, legislative, and judicial. It also gives U.S. firms access to the procurement of sub-central entities and government enterprises.
The Agreement covers the purchases of 28 key Colombian central government agencies, including ministries and departments and the Colombian Senate (Senado de la República) and House of Representatives (Cámara de Representantes). For all Colombian central government agencies covered under the agreement, American contractors will be able to bid on procurements of goods and services valued at $64,786 and above and procurement of construction services valued at $7,407,000. (The thresholds are subject to adjustment every two years on January 1, with the next adjustment set for January 1, 2012.)
The Agreement also applies to the purchases of Colombia’s first tier of sub-central entities -- 32 “Gobernaciones” (comparable to U.S. states) where the procurement is above specified thresholds: $526,000 or more for goods and services and $7,407,000 for construction services.
The Agreement also covers important state-owned enterprises, including ECOPETROL (national oil company), ISS (healthcare provider), and ADPOSTAL (postal service).
The Agreement sets thresholds for these enterprises at either $250,000 or $593,000 for goods and services, and $7,407,000 for construction services.
In addition, the Agreement requires certain Colombian telecommunications and electric utilities that would not otherwise be covered by the Agreement to comply with the national treatment obligations in making purchases.
The Agreement preserves the U.S. right to set aside contracts for U.S. small and minority businesses. The Agreement also does not give Colombian firms the right to bid on textile purchases by the Department of Defense.
The Agreement clarifies that build-operate-transfer contracts (BOTs) are within the scope of its government procurement obligations. BOTs act as financing vehicles for large-scale construction projects and the building or rehabilitation of public work facilities.
The Agreement encourages Colombia to adopt the latest and best emerging practices in government procurement, such as the use of electronic procurement tools, which will help U.S. small businesses – and all U.S. firms – more easily participate in government procurement in Colombia.
The Government Procurement Chapter of the Agreement requires the use of transparent, predictable, and fair procedures in conducting the procurement covered by the Agreement. Each Party must publish its laws, regulations, and other measures governing procurement, along with any changes to those measures. The Chapter sets out basic requirements for each step of the procurement process. These include that procuring entities must publish notices of procurement opportunities in advance and provide effective bid review procedures.
The Agreement clarifies that U.S. Government agencies can include provisions in their procurements to promote environmental protection.
The Agreement also clarifies that requirements can be inserted into government contracts requiring suppliers to comply with generally applicable laws regarding principles and rights in the country where the good is produced or the service is performed. These include freedom of association, collective bargaining, elimination of all forms of compulsory or forced labor, effective abolition of child labor and a prohibition on the worst forms of child labor, and elimination of employment and occupation discrimination based on gender, race, or other factors.
The Agreement includes strong anti-corruption provisions that ensure integrity in government procurement. Each Party must maintain procedures to declare suppliers that have engaged in fraudulent or other illegal actions in relation to procurement ineligible for participation in the Party’s procurement.