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    EU-US FTA / TTIP Public Procurement Chapter – Coverage of public private partnerships (“PPP”)

    [This document is part of the european TTIP-requests to the United States, which are kept secret from the public of both sides. The European Union demands the opening of public procurement markets – this paper shows, that not only public companies, but all companies with any investment of public institutions – private public partnerships – shall be covered. This paper was handed over to the american negotiation team in 2014.]

    This document contains information classified RESTRAINT EU/EU RESTRICTED whose unauthorised disclosure could be disadvantageous to the interests of the European Union or of one or more of its Member States. All addressees are therefore requested to handle this document with the particular care required by the Council’s Security Rules for documents classified RESTRAINT EU/EU RESTRICTED


    As already mentioned in the EU initial concept paper fort he public procurement related negotiations, the EU proposes to explore how public partnership arrangements could be coverd under the public procurement chapter und how the public procurement chapter could bring additional clarity on the legal regime applicable to public partnership establishments in both jurisdictions.

    In the EU, PPP may fall either into the category of public works[1] / services contracts or into the category of works / services concessions. In addition to committing internationally public construction services, the EU has initiated the expansion of coverage with regard to public-private partnerships that are works concessions in the sense of the EU market access commitments within the revised GPA an in some bilateral FTAs, where the EU has enlarged its commitments on construction services to include works concessions (under the EU’s Annex 6 to Appendix 1 of the GPA). In parallel the US has included build-operate-transfers (BOT) contracts in the scope of the GP chapter of some of its bilateral agreements (US-Singapore FTA, KORUS).

    An overview of the EU and the US’s procurement policies shows however that public-private partnership arrangements take much more various forms than expressed in the revised GPA agreement. There is therefore an added value in trying to take a comprehensive look at public-private partnerships set up as they have been developed in both jurisdictions with a view to include relevant elements in the Public Procurement Chapter with a particular focus on the possible coverage of PPP contracts and rules likely to be applied to them, in terms of tendering procedures and contract management. Basic common rules aiming at preventing discrimination of bidders in the context of PPP would serve as an important element in a bilateral deal on procurement.

    Such undertaking might imply certain methodological an legal difficulties. The comprehensive approach proposed by the EU implies that the two Parties should reach an understanding on the communalities between the EU and the US experiences and legislation in the PPP domain, despite the different legal concepts developed in both sides.

    In order to overcome these potential hurdles, the EU suggested working on the following basis:

    • Exchange on the EU and US experiences in the field of PPP, explain and compare the various legal regimes for PPPS both in the EU and the US with the help of international classification on PPP such al the one developed by the IMF (see annex I)
    • In the course of the negotiations, discuss to which extent PPPs could be effectively covered under the Public Procurement Chapter both with respect to the scope of application and market access commitments. In this context, it wold be worth exploring also the rules applicable to the award of PPP contracts (tenderin procedures and remedies) and to the performance of such contracts, in particular concerning the duration or modifications of contractual terms.
    • Identify and reach a common understand on the best way to include PPPs in the coverage of the Public Procurement Chapter (both text and schedules), notably on working on the most appropriate architecture.

    With regard to the modalities of this inclusion, the EU suggests the following architechture based on its experience in previous FTA negotiations:

    1) Inclusion of Public Private Partnership contractual arrangement within the scope of the PP chapter.

     The EU takes the view that public-private partnerships of a contractual nature should in principle fall within the scope of the public procurement chapter, provided that they present certain features relating to procurement activities.

    2) Elaboration of the notion of public private partnership contracts and rules applicable thereto in an annex

    The EU suggests that the clarifications on the notion of public private partnerships contracts and the implication for the coverage are developed in a separate annex.

    The proposed annex world include at least following elements:

    • A generic definition of public-private partnership contracts identifying the main features of these contracts both in the EU and in the US,
    • A description of the possible public-partnership set-up that likely to be used for various projects both in the EU and in the US,
    • The domestic legal regime applicable to public private partnerships in the EU and in the US, possibly including a reference to the relevant pieces of legislation,
    • A clarification on the common bilateral rules applicable to the award an the performance of PPP contracts, by comparison to the general rules set for public procurement (having in mind that under EU legislation, PPP might be subject either to the rules for public works/public services contracts or to the rules for public works/services concessions, as prescribed in the Union’s relevant legislation).

    In addition, the annex could incorporate also information on business opportunities relating to PPPs such as the sectors in which the Parties largely use /intend to use of PPPs.


    [1] in the EU the wording “works” corresponds to construction services

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