MEMORANDUM OF UNDERSTANDING between the United States of America and the European Economic Community on government procurementMEMORANDUM OF UNDERSTANDING BETWEEN THE UNITED STATES OF AMERICA (THE USA) AND THE EUROPEAN ECONOMIC COMMUNITY (THE EEC):WHEREAS the USA and the EEC are parties to the GATT Agreement on Government Procurement (the Code), which entered into force on 1 January 1981;WHEREAS Article 6: of the Code states that the parties to the Code shall undertake further negotiations with a view to broadening and improving the Code on the basis of mutual reciprocity;WHEREAS the USA and the EEC have been involved in multilateral negotiations to expand coverage of the Code since 1984;WHEREAS in the interest of facilitating agreement on a new Code, the USA and the EEC undertook bilateral negotiations to resolve certain outstanding problems between them;WHEREAS the USA and the EEC expect that any bilateral agreement on these issues will provide appropriate reciprocal competitive government procurement opportunities that are intended to become part of the expanded Code;WHEREAS the USA and the EEC have decided to make certain reciprocal commitments to open their respective procurement markets as a downpayment towards an expanded Code;THEREFORE, the USA and the EEC have agreed as follows:Article 1 Scope and definitions1. This Agreement shall apply to:- contracs for goods, works (otherwise 'construction services`), and other services, which are awarded by entities included in Annexes 1 and 2, and- contracts for goods and works, which are awarded by entities listed in Annexes 3 and 4.2. 'Works contracts` shall be those contracts which have as their objective the realization by whatever means of civil or building works, in particular in the sense of division 51 of the Central Product Classification of the United Nations or of Annex 2 to Council Directive 71/305/EEC.'Other services` shall be those contracts for which the principal object is the obtaining of one or more of the services which are included in both Annexes 5 and 6.Article 2 Central and Federal Government entities1. In the award of contracts by entities which are included in Annex 1, the Community shall afford to the suppliers, contractors and service providers of the USA and to goods and services originating within the customs territory of the USA the award procedures of Council Directive 77/62/EEC which shall apply to goods contracts, the estimated value of which, net of VAT, is not less than the Code threshold, currently ECU 125 576, of Council Directive 92/50/EEC, which shall apply to services contracts, the estimated value of which, net of VAT, is not less than ECU 200 000, and of Council Directive 71/305/EEC, which shall apply to works contracts the estimated value of which, net of VAT, is not less than ECU 5 000 000;2. The USA shall waive the application of the Buy America Act (41 USC 10a) to the award of contracts by entities which are included in Annex 2, above a threshold of $ 6 500 000 for works contracts, and above the Code threshold (which is currently $ 176 000) for goods and other services contracts. In the award of such contracts the USA shall afford to the suppliers, contractors and service providers of the Community and to goods and services originating within the customs territory of the Community, the award procedures of the Federal Acquisition Regulations, other than those pertaining to the application of the Buy America Act.3. Each Party may maintain its current derogations under the Code.Article 3 Electrical utilities1. The EEC shall extend the benefits of the provisions of Council Directive 90/531/EEC to US products, suppliers and contractors in the award of contracts by entities included in Annex 3 and will make the benefits of Directive 92/131/EEC available to US suppliers and contractors for such awards.2. The USA shall waive the application of the Buy America Act (41 U.S.C. 10 a) to the award of contracts by entities which are included in Annex 4, above a threshold of US $ 6 500 000 for works contracts, and US $ 450 000 for goods contracts. In the award of such contracts the USA shall afford to the suppliers, contractors and service providers of the EEC and to goods and services originating within the customs territory of the EEC, award procedures substantially equivalent to the Federal Acquisition Regulations, other than those pertaining to the application of the Buy America Act.Article 4 Joint studyThe USA and the EEC shall jointly sponsor a study of the procurement opportunities that would arise from their respective offers and requests in the negotiations for the expanded Code. The study, the terms of reference of which are attached at Annex 7, will be conducted by an independent consultant and should be completed by 31 January 1994.Article 5 Continuation of negotiations1. Following completion of the study, the USA and the EEC shall negotiate with a view to reaching a balanced comprehensive agreement on procurement, with