8868)Note: Transportation services, where incidental to procurement contracts are not subject to this Agreement.2. Dredging3. All services purchased in support of military forces located overseas4. Management and operation contracts of certain government or privately-owned facilities used for government purposes, including federally-funded research and development centers (FFRDCs).5. R & D servicesANNEX 7 Mandate for the joint study ObjectiveThe objective of the study is to estimate the value and also to assess qualitatively the international bidding potential of procurement opportunities which would be likely to arise under the GPA, as a result of offers and requests of either Party, at the time of it expected implementation in 1995. The study shall be without prejudice to either Party's final offer.The study should be conducted on the basis of a projection of available information on current performance, potential and trends. The effect of measures which are currently planned, or in course of execution, should be taken into account. The consultant should make a critical assessment of the validity of the data on which the projections are based and should draw attention to any data whose reliability cannot be verified. Any exemptions and qualifications which are proposed, including thresholds, should be taken into account. Where necessary, the consultant may make estimates. The consultant should take the views of both Parties into account.Results should be presented as far as possible on the basis of common definitions and methodologies and in such a way as to enable any subsequent offers to be evaluated.CoverageThe study should cover procurement of goods and services, including public works, by:- central (federal) government (category A),- sub-central (State, regional and local) government (category B),- other entities, offered or requested by either Party, excluding telecoms (category C).Reports, timing and acceptanceThe study should result in two reports:- an intermediate report, setting out the issued to be examined, items in need of quantification, data availability and proposed methodology,- a final report setting out the results of the study.The draft intermediate report should be presented not later than two months from commencement of the study. The final report should be commenced only if both Parties are satisfied, on the basis of the intermediate report, that completion of the study would yield useful results.The draft final report should be presented not later than four months from acceptance of the intermediate report.Draft reports shall be considered final only after they have been accepted by both Parties.Dear Vice-President Brittan,In the context of our Memorandum of Understanding of ... May 1993 (MOU), I would like to describe to you the process the US Trade Representative's Office will undertake in accordance with Article 6 of the MOU between now and 31 January 1994 to seek the voluntary commitment of US subfederal entities to be included in the final entity lists.As we agreed, the immediate bilateral commitments to open our respective procurement markets contained in the MOU are a 'down payment` towards a final procurement agreement. The inclusion of subfederal entities in the US offer can only be accomplished after the results of our jointly-commissioned study are known. On this basis, we will be prepared to conclude a balanced comprehensive agreement on procurement.To this end, I will immediately initiate the following actions with regard to subfederal procurement:1. urge the 33 States from which we have already received preliminary commitments to provide final voluntary commitments; and2. press ahead with work to obtain voluntary commitments from:(a) the 17 States from which we currently have no commitment; and(b) major municipalities, defined as cities with populations exceeding 500 000 and other subfederal entities operating in or serving those municipalities.We will work with a view to obtaining final commitments in order to be in a position to submit our entity lists in time, so that the final phase of negotiations can start in January 1994. Any commitments by subfederal entities will be bound in legislation implementing a final procurement agreement.In addition, during this period, the US will consider ways in which, as part of a balanced agreement, federally-mandated measures affecting subfederal procurements would be removed in a timely manner. In the context of a balanced agreement, both sides would oppose the enactment of legislation that would render ineffective the bidding opportunities provided by that agreement.Sincerely,AmbassadorMICHAEL KANTORUS Trade Representative