Identifier
Created
Classification
Origin
09UNVIEVIENNA347
2009-07-22 15:13:00
UNCLASSIFIED
UNVIE
Cable title:  

UNCITRAL Reviews Revised Model Law on Procurement

Tags:  ABUD AORC EAID EINV ETRD KCRM KUNR UNCITRAL AU UN 
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P 221513Z JUL 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 9851
RUCNDT/USMISSION USUN NEW YORK 1715
RUEHBS/AMEMBASSY BRUSSELS 0309
RUEHRN/USMISSION UN ROME 0058
INFO RUEHVI/AMEMBASSY VIENNA 1454
RUEHXX/GENEVA IO MISSIONS COLLECTIVE
RUEHSW/AMEMBASSY BERN 0207
RUEHBY/AMEMBASSY CANBERRA 0735
RUEHLO/AMEMBASSY LONDON 1255
RUEHOT/AMEMBASSY OTTAWA 0743
RUEHFR/AMEMBASSY PARIS 1111
UNCLAS SECTION 01 OF 02 UNVIE VIENNA 000347 

DEPT FOR IO/T, EB/IFT/ODF AND L/PIL
EMBASSIES FOR ECON/POL

SIPDIS

E.O. 12958: N/A
TAGS: ABUD AORC EAID EINV ETRD KCRM KUNR UNCITRAL AU UN
SUBJECT: UNCITRAL Reviews Revised Model Law on Procurement

UNCLAS SECTION 01 OF 02 UNVIE VIENNA 000347

DEPT FOR IO/T, EB/IFT/ODF AND L/PIL
EMBASSIES FOR ECON/POL

SIPDIS

E.O. 12958: N/A
TAGS: ABUD AORC EAID EINV ETRD KCRM KUNR UNCITRAL AU UN
SUBJECT: UNCITRAL Reviews Revised Model Law on Procurement


1. (U) SUMMARY: The forty-second session of the United Nations
Commission on International Trade Law (UNCITRAL) met in Vienna from
June 29 to July 17, 2009. During the Commission meeting, a
Committee of the Whole was formed to engage in a second reading of
the revised UNCITRAL model law on procurement. For the past several
years, the Working Group on Procurement has been engaged in an
effort to update UNCITRAL's 1994 Model Law on Public Procurement and
its accompanying Guide to Enactment to reflect new practices and
technological developments, in particular those resulting from the
use of electronic communications in public procurement. The
Committee of the Whole did not complete a second reading of the
model law, in part because many delegations participated in the
session that had not attended earlier meetings of the Working Group.
After the Committee session, the Commission met briefly and adopted
the report of the Committee. (Note: Further information on this
initiative is available through the UNCITRAL website, at
http://www.uncitral.org.) END SUMMARY.



2. (U) The Committee of the Whole spent the entire session
reviewing chapter I of the seven-chapter revised model law. The
most significant issue slowing progress was the inclusion of defense
and national security procurement. The 1994 Model Law on
Procurement includes a blanket exemption for procurement relating to
defense and national security, due to its sensitive and often
confidential nature. The Working Group on Procurement had decided
in 2004, however, that the procurement regime of the revised Model
Law should apply to all sectors of procurement. The U.S. and other
delegations sought a series of amendments to the text that would
address inter alia classified procurement. These amendments,
however, were opposed by several delegations that suggested
revisiting the working group's decision to include defense and
national security procurement within the model law. Mexico proposed

on the final day keeping defense and national security procurement
in the Model Law, and that the Secretariat propose specific
amendments to implement this new coverage in the Model Law with
respect to direct procurement, sole source procurement, and the
protection of confidential information. That approach was approved
by the group.


3. (U) Another significant issue was the inclusion of socioeconomic
factors within the model law. The text of the 1994 Model Law
provides that in the selection of the lowest evaluated tender,
consideration could be given to the effect that acceptance of a
submission would have on such factors as the balance of payments
position of the State, countertrade arrangements offered by
suppliers or contractors, and the extent of local content. The
debate in the Committee of the Whole centered on whether it would be
appropriate to abandon a listing of these somewhat dated
socioeconomic initiatives and simply make a reference to use of
socioeconomic factors. Some delegations favored a more modern list
of socioeconomic programs that states often use in procurement,
while several delegations expressed concern with any expanded list
of socioeconomic programs in procurement. The chair deferred the
issue for future consideration.


4. (U) At the close of the session the Secretariat was instructed
to redraft the open issues in Chapter I before the next session of
the Working Group in December 2009 so delegations would have a
complete revised version of the model law before them.


5. (U) In order to expedite the work, after the first two days,
when little progress had been made in the Committee of the Whole,
the U.S. and other delegations formed an informal drafting group
that reviewed the text of the draft model law and offered proposed
changes. The U.S. delegation informally chaired that drafting group
which operated on the margins of the Committee of the Whole
sessions. Many of the changes proposed by the drafting group with
respect to Chapter I were accepted during the Committee of the Whole
debate. At the final Committee of the Whole session, various
members of the drafting group (Angola, Austria, Czech Republic,
France, Germany, Morocco, Nigeria, Senegal, Turkey, the United
Kingdom, and the United States) submitted a conference room paper
offering proposed changes and comments on those provisions of the
model law that were not reviewed by the Committee of the Whole
(i.e., Chapters II through VII of the proposed revised UNCITRAL
Model Law on Procurement). The Chairperson accepted the paper,
requested that it be made available in English for the current
session and translated and posted on the UNCITRAL web site.

UNVIE VIEN 00000347 002 OF 002




6. (U) After the Committee of the Whole session, the Commission
adopted the report of the Committee, as well as the reports on the
September, February and May (i.e. the 14th -16th) sessions of the
Working Group. During the Commission session, several developing
countries again stressed the need to complete the model law as
quickly as possible. Kenya noted that it was in the process of
updating its laws and would like to have a completed text within the
next year so that it could benefit from the new provisions in the
law on new procedures for electronic reverse auctions, framework
agreements, and competitive negotiation.


7. (U) The Working Group will resume the second reading of the
draft text at its next session scheduled for December 2009, and
probably will require at least the proposed December and February
sessions to complete the second reading. Thus, it is unclear
whether the revised model law will be ready for adoption at next
Commission session in June 2010. After the revised model law is
adopted, the Working Group will need to consider revisions to the
accompanying Guide to Enactment.


8. (U) The U.S. delegation was led by Michael Dennis from L/PIL.
The delegation had two advisers for the Committee of the Whole
session: Don Wallace, Jr., of the International Law Institute and
the Georgetown University Law Center, and Christopher Yukins,
co-director of the government contracts program at the George
Washington University Law School. Both advisers have been involved
in this UNCITRAL reform initiative since it was launched in 2004,
and Professor Wallace was directly involved in the drafting of the
original UNCITRAL model procurement law, which was published in

1994.

PYATT