The International Agreement on Government Procurement:

An Assessment of Its Commercial Value and U.S. Government Implementation

NSIAD-84-117: Published: Jul 16, 1984. Publicly Released: Jul 16, 1984.

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GAO reviewed the government's implementation of the multilateral Agreement on Government Procurement, which was meant to limit signatory governments' use of discriminatory procurement practices as barriers to trade.

GAO found that, while the agreement was an important step toward less restrictive trade, it has had less commercial value than originally anticipated because: (1) foreign signatory governments opened a smaller value of procurements to international competition than was projected; (2) some foreign signatory governments did not comply with the agreement; (3) previous agreements and national practices had already opened to American competition procurements covered by the agreement; and (4) American firms were unable to competitively sell products demanded by foreign governments. The U.S. Government opened a greater value of procurements to foreign competition than did all other signatories. GAO also found that the Department of Commerce's efforts to familiarize American firms with the agreement were ineffective because: (1) budgetary constraints and an internal reorganization hampered such efforts; (2) Commerce did not make an effort to reach the firms most capable of benefiting from the agreement through their overseas representatives; and (3) of inefficiencies in Commerce's Trade Opportunities Program (TOP). In addition, GAO found that: (1) embassies devoted little time to efforts to monitor compliance with the agreement because they were unsure about what actions to take regarding noncompliance; and (2) information collection difficulties have prevented the U.S. Government from fully assessing the benefits of the agreement.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Commerce instructed overseas posts to intensify their efforts to help firms benefit from the agreement. It recommended that the posts enhance their efforts to help in-country U.S. firms take advantage of procurement opportunities opened by the agreement through seminars, published articles, business surveys, and informational materials.

    Recommendation: The Secretaries of State and Commerce, in consultation with the U.S. Trade Representative, should direct U.S. embassies and Commerce district offices to include, as part of their ongoing commercial activities, programs devoted to informing U.S. business officials about the Government Procurement Agreement, their rights under it, and sources of information on covered procurements.

    Agency Affected: Department of Commerce

  2. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of State and Commerce, in consultation with the U.S. Trade Representative, should direct U.S. embassies and Commerce district offices to include, as part of their ongoing commercial activities, programs devoted to informing U.S. business officials about the Government Procurement Agreement, their rights under it, and sources of information on covered procurements.

    Agency Affected: Department of State

  3. Status: Closed - Implemented

    Comments: Commerce, the lead agency in implementing this recommendation, plans to address only the portion of the recommendation dealing with dissemination of notices to in-country representatives of U.S. firms. It does not intend to discontinue the high priority dissemination of notices domestically and, instead, rely on weekly distribution of compilation of notices.

    Recommendation: The Secretaries of State and Commerce, in consultation with the U.S. Trade Representative, should revise efforts to distribute notices of procurements covered by the Government Procurement Agreement by: (1) discontinuing the high priority distribution of individual notices through the TOP system and, instead, relying on the weekly distribution of compiled notices; and (2) instructing embassies in signatory countries to establish systems for distributing notices to in-country representatives of U.S. firms, where appropriate.

    Agency Affected: Department of Commerce

  4. Status: Closed - Implemented

    Comments: Commerce, the lead agency in implementing this recommendation, plans to address only the portion of the recommendation dealing with dissemination of notices to in-country representatives of U.S. firms. It does not intend to discontinue the high priority dissemination of notices domestically and, instead, rely on weekly distribution of compilations of notices.

    Recommendation: The Secretaries of State and Commerce, in consultation with the U.S. Trade Representative, should revise efforts to distribute notices of procurements covered by the Government Procurement Agreement by: (1) discontinuing the high priority distribution of individual notices through the TOP system and, instead, relying on the weekly distribution of compiled notices; and (2) instructing embassies in signatory countries to establish systems for distributing notices to in-country representatives of U.S. firms, where appropriate.

    Agency Affected: Department of State

  5. Status: Closed - Implemented

    Comments: Commerce instructed the overseas posts to intensify their efforts to solicit feedback from U.S. firms on host-government compliance with the agreement and asked them to report periodically on their monitoring efforts. A number of embassies have taken or planned specific action in this regard.

    Recommendation: The Secretaries of Commerce and State, in consultation with the U.S. Trade Representative, should instruct U.S. embassies in signatory countries to more vigorously monitor foreign-government compliance with the Government Procurement Agreement by actively seeking information from the in-country American business community. These instructions should cover: (1) the level of resources embassies should devote to monitoring host-government compliance with the agreement; (2) the types of tasks they should perform; (3) the extent to which they can follow up on complaints brought to their attention; and (4) whether they should assist subsidiaries of U.S.-based firms offering goods made outside the United States.

    Agency Affected: Department of Commerce

  6. Status: Closed - Implemented

    Comments: Commerce instructed the overseas posts to intensify their efforts to solicit feedback from U.S. firms on host-government compliance with the agreement and asked them to report periodically on their monitoring efforts. A number of embassies have taken or planned specific action in this regard.

    Recommendation: The Secretaries of Commerce and State, in consultation with the U.S. Trade Representative, should instruct U.S. embassies in signatory countries to more vigorously monitor foreign-government compliance with the Government Procurement Agreement by actively seeking information from the in-country American business community. These instructions should cover: (1) the level of resources embassies should devote to monitoring host-government compliance with the agreement; (2) the types of tasks they should perform; (3) the extent to which they can follow up on complaints brought to their attention; and (4) whether they should assist subsidiaries of U.S.-based firms offering goods made outside the United States.

    Agency Affected: Department of State

 

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