General Issue
Vol. VII, No. 1
(Summer '15)

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Corruption is a serious problem in almost all jurisdictions and has become an issue of global concern. Accordingly, it needs to be addressed at an international level. The anti-corruption provisions in the revised Government Procurement Agreement (“new GPA”) under the WTO, which came into force in April 2014, emphasize on recognizing the importance of preventing corruption. This is reflected in the Preamble coupled with the requirement of prevention of the corrupt practices in the conduct of procurement as provided in Article IV:4. This points to the seriousness of corruption issues and the importance of coping with the problem even under a trade agreement. Although the anti-corruption provisions themselves are either soft or not clear enough, they serve as a good foundation for further development of a workable mechanism to implement the main theme of anti- corruption in connection with government procurement activities. This paper argues that additional mechanisms could be established through treaty interpretation based on the VCLT to ensure that these provisions are made operable in reducing, eliminating or preventing procurement-related corruption. This paper further suggests that the non-binding provision in the Preamble of the new GPA can help interpret the binding provisions in Article IV:4 so as to bring the United Nations Convention against Corruption and the OECD Anti-Corruption Convention under the ambit of operation of the new GPA, thereby allowing a breach of a requirement under the conventions to be considered as a violation of the new GPA. This paper additionally argues that such obligations can be enforced through the domestic challenge procedures established under GPA Article XVIII:1 and through the dispute settlement procedures under GPA Article XX:2 (a).

This article reports on recent developments regarding the revised WTO Agreement on Government Procurement (GPA). 2014 was a year of significant developments concerning the Agreement and the first months of 2015 have shown significant movement. A new version of the Agreement, which manifests the Agreement’s increasing importance as an instrument for the promotion of good governance in emerging markets, in addition to market access, entered into force on 6 April 2014. The role that the revised GPA is playing in contributing to the world trading system, as a driver of global growth, is further demonstrated by its increasing membership. Since the entry into force of the revised Agreement in 2014, two accessions to the Agreement – those of Montenegro and New Zealand – were concluded and good progress was made on other pending accessions. Furthermore, work has been initiated on a new set of work programmes and other tools to enhance the transparency of the GPA Parties’ measures and operations under the Agreement. These represent an opportunity for Parties - and, in more limited ways, observers - to the GPA to shape the future of procurement policy with regard to such important issues as sustainable procurement and the furtherance of SME participation in procurement markets. Over and above its direct impact on the governments that are formally Parties to the WTO GPA, the Agreement also serves as the inspiration and template for chapters on government procurement that are incorporated in bilateral free trade or other preferential agreements around the globe, including recent "mega-regionals". This article elaborates on these themes and describes how each of these developments makes the GPA a new, emerging pillar of the international trading system.

This article considers how, and the extent to which, the process of international law-making, as witnessed in UNCITRAL in its work on public procurement and in other topics, contributes to the universalisation of international private law, in the sense of body of rules governing commercial relationships of a private nature involving different countries. Having considered UNCITRAL’s working methods, it concludes that these methods when designed in the 1960s offered an excellent opportunity to fulfil its mandate to further the progressive harmonisation and unification of the law of international trade. This is done through the multi-lingual, transparent and inclusive approach to negotiation and development of UNCITRAL’s texts that the methods entail. Nonetheless, there are indications that attempts to reach truly harmonised or consistent international instruments should not seek to move forward faster than the pace at which international consensus on novel ideas can emerge through international cooperation. Trying to force the pace may tempt States to promote their national models, whether in the genuine belief that they represent the best solution, or for political or other advantage. Countering such a tendency requires broad and representative participation in UNCITRAL’s activities, particularly from developing countries. Thus, it is suggested that all countries should consider participating in UNCITRAL as a worthwhile investment.

Many member nations of the World Trade Organization (WTO) have joined the Government Procurement Agreement (GPA), a plurilateral agreement which aims to open public procurement markets. Joining the agreement reflects a commitment to international free trade, and to the rule of law in public procurement. A revised version of the GPA entered into force in 2014, and incorporated many amendments intended to make it easier for developing nations to join the GPA. Among other things, the revised GPA now allows developing nations acceding to the GPA to open their public procurement markets more slowly, through various transitional measures. This article reviews those changes, and discusses possible solutions to some of the practical and legal hurdles which nations face, as they consider accession to the GPA.

Life cycle costing (LCC) is an extremely alluring procurement technique for government contracting professionals in developing countries, given its potential for reducing budgetary outgoes through lowered total cost of ownership during the entire life cycle of procured public assets. However, proper implementation of LCC in a public procurement context inherently requires strict cost visibility, verifiability and contracting discipline during comparative evaluation of proposals as well as during contract administration and implementation, making it an extremely difficult and challenging process, particularly in developing countries with relatively unskilled acquisition workforce and unresponsive legal systems as compared to developed country jurisdictions. Within this background, this short academic note explores certain LCC techniques employed under India’s defence procurement procedures, while also attempting quick comparisons with NATO, US and Canadian guidance on the subject. The underlying intent is to use rigorous academic analysis for the purpose of formulating recommendations for suitable reforms in India that could perhaps also be useful for other developing countries interested in implementing LCC-based procurement for obtaining effectiveness and efficiency in their defence acquisition programmes.

There seems to be strong evidence and growing consensus that public procurement can be a significant factor in supporting broad-based innovation, which can be a promising tool for states to support innovation. The sheer volume of public procurement and the possibility to tailor that significant buying power towards innovative outcomes results in a powerful demand-side measure in support of innovation, a mechanism that any economy that is serious about innovation cannot ignore. However, from a regulatory point of view, there are numerous questions that will have to be carefully considered in order to calibrate a procurement system to achieve maximum innovation policy objectives. In some respects, these are fairly fundamental questions about how we conceptualise the procurement function in law and how we subsequently design the institutional framework within which this function operates. This contribution explores the linkages between public procurement and innovation and then turns to the regulatory frameworks governing public procurement to assess the questions that must be addressed if public procurement is to serve as a vehicle in support of innovation. Particular attention is given to international regimes of procurement regulation such as the WTO’s Government Procurement Agreement as paradigmatic regulatory frameworks. Three main areas of concern are investigated under the regulatory frameworks, namely, risk management rules, the transactional nature of public procurement and public procurement as a policy tool.

This article critically analyses the scope and coverage of the exemption for development procurement introduced in Art II of the revised text of the GPA. It considers the implications of this exemption in terms of coherence and consistency with the GPA negotiations’ objectives of encouraging developing countries’ accession to the agreement and of expanding the GPA coverage. The paper also reflects on the repercussions of the exemption in terms of aid effectiveness more generally, questioning in particular whether the exclusion of development procurement from the GPA coverage has been a missed opportunity to promote good governance and transparency in the public procurement process for aid-financed projects.