Hello everyone. Last time we talked about overall concept over the public procurement and definition and comparison with the commercial procurement, and also we covered various issue related to other global public procurement market, not only for US government, but other procurement market like United Nation. Later on, we are going to allocate one session, talk about UN procurement today. Next couple of sessions, we are going to talk about a key element of the global public procurement legal framework, and in particular, US Federal Government procurement and also the free trade agreement in-between US government and Korean government. Let's have a look at what legal framework we have it for global or public procurement agreement. The World Trade Organization, you definitely hear about that, World Trade Organization is special agency under United Nation. Under WTO, we have a special arrangement among the country who respect free trade agreement among the member. We have about 47 signatory countries for the Government Procurement Agreement. Basically, World Trade Organization, the entire spirit or the principle of the WTO is encourage the member country engaged in some legal framework to do free trade. Core principle of the global public procurement under WTO is three major elements in there, especially for the government procurement agreement. Government Procurement Agreement, so-called GPA, is a legal framework, enable member country to do free trade for government procurement. For example, if US government and also Korean government under both country are anyway signatory countries for GPA. US and Korea, they can engage in free trade for the government procurement, for central government and some part of the state or the provincial government is also open for the government public procurement also. They're three major element we can see. The first one is non-discrimination. This is very important because under GPA, a spirit of GPA is free trade agreement among the member country. Therefore, any country enter into bilateral free trade agreement, they should not discriminate other country entry into public procurement market. The number 1 element of GPA legal framework spirit is non-discrimination. Number 2 is transparency. Transparency is a very important element because transparency is actually to do with conflict of interest. We'll have opportunity later on to talk about conflict of interest, because conflict of interest is something that we come across all the time with major problem because when we have a situation where the buyer on behalf of government, and the supplier, the industry, when they enter into some illegal activity or improper relationship in exchange of some benefit or the compensation, something along line, including bribery act, this will make entire public procurement practice very difficult. We can see obviously many third world country or underdeveloped country, we can see a lot of problem to respect or implementing a very clear transparency and also policy on toward not getting into conflict of interest. Transparency is basically all the processes and procedure for public procurement should be open so anybody can watch it, anybody can monitor it, anybody can ask for the information; what has happened? For example, as we discussed earlier, you might remember three principles of public procurement number one was source of funding. The source of funding normally is all tax money; public fund, because we use public fund, we also have rules and regulation. The reason we have rules and regulation for any country and we're going talk about today for example, Federal Acquisition Regulation for United States government. We have a similar Rules and Regulation in Korea or any other country. I have no doubt that all the OECD member country or any other developing country even with underdeveloped country they should have their own Rules and Regulation to provide transparency for their public procurement. Transparency is actually very closely connected with how we have to avoid the conflict of interest. Because rules and regulation is very important as we have public fund and we have rules and regulation. The third element of the public procurement is basically who is going to be beneficiary of all this public procurement. We go back as public procurement as the definition. A core important element of public procurement is where the fund come from, source of funding and therefore we have to have rules and regulation without getting into any conflict of interest. That will ensure basically and guarantee public interest is the main focus of why we're doing only public procurement. Transparency, which is the second element of WTO, the Government Procurement Agreement is very important and very much in line with the core principle of Public Procurement Practice. The third element of the WTO GPA is procedural fairness. Procedural fairness is basically, even we have a transparency if there is no fairness in the procedure itself it will be very difficult whether we're going to have fair competition. Public procurement is interwoven with the concept of fair procedure. A fair procedure means that we want to have a equal opportunity for the all the vendor all the supplier come together and also we will compete with one key evaluation criteria. We have one standard applied to all other vendor. You cannot discriminate A versus B because B is close to me. That's why we have to understand the core principle of GPA and the importance of the Free Trade Agreements. In terms of implementing these three key element, all of the signatory country under GPA, they must respect non-discrimination policy, transparency policy and the procedural fairness implementation when it comes to introducing public procurement legal framework for each country. Let's have a look at overall. I want to share maybe just chat with you. If you look at overall Free Trade Agreement and its legal framework, we can say on the top of the pyramid we have WTO, World Trade Organization. Under the World Trade Organization, we have GPA, Government Procurement Agreement. Under that, I want to use the Korea-US Free Trade Agreement as example of the GPA. Under the GPA, I want to use this sample Korea-US Free Trade Agreement. Under this legal framework, company from Korea legally had entitlement to do business in the United State for Public Procurement. Same thing apply for US company will allow to participate any Public Procurement Practice in Korea issued by Korean government. Of course, there is a lot of Rules and Regulation applying. Some agency may not open for the public procurement other country comes in and also some special sector, we're going to talk about later on, for example, national security industry or the defense industry are normally limited access for other country coming in. Under Korea-US Free Trade Agreement, we have US public procurement market open, same as the Korean public procurement market open for US company. When we look at the gluten regulation for US Federal Government, we have a special provision called Federal Acquisition Regulation. We call it FAR. Under the FAR, because we have a law regulation, how to do business or how to participate public procurement business for US Federal Government, the US company or non-US entity, as long as the non-US entity is a part of the GPA and the signature to country and under the legal frame or a free trade agreement, non-native country can participate in the public procurement and the fund issued by US Federal Government. Because it is a regulated market, there are a number of different step to register as a vendor, for example, for US federal market, you have to register under System for Award Management, we call it SAM, S-A-M. Before you actually register under SAM, you have to go through a number of different steps like a prerequisite step to properly register. First of all, you have to go through, we call it DUNS number registering, Data Universal Numbering System. The number basically is like a record of the company, your address, your EIN number, TIN number, all other information about the ownership of the company and the industry, all this is the key data for the company to enter. Once you have a DUNS number, apply, obtain, and then you need to have a CAGE number. CAGE number is the Commercial and Government Entity. This will define a type of business you're doing, things about your organization background, where you come from, and also some degree of the ownership information is in there. Before any company register under SAM, you have to register first with a DUNS number, and then you have to get another registration for the CAGE number. Having to a system in place, DUNS and CAGE number. Then the final step of the vendor registration is actually apply a registry under SAM. What we're saying over here under the legal framework of WTO or a trade organization, we have a government public procurement agreement, under that framework, we have a Korea-US Free Trade Agreement. Because we have this free trade agreement between two countries and each country's allowed to enter public procurement market. There are some limited, I said, industry and some specific item for national security. There are no access for that one, but most of the general industries are open for the fair competition. If Korean company, for example, want to participate in US Federal Government public procurement, firstly, what you have to do, you have to go through registration process. First step is DUNS number, the second step which CAGE number, third step is registry in the SAM. This process, we are not going to go a specific detail or information how you're getting into the page after page of the data input. We are not going to go through online training. But it's quite easy, it's not that complicated, especially if you are in the United States, getting number for DUNS and CAGE free of charge. If you are in Korea, there is a special agreement made between the DUNS and also company in Korea. So there is some charge involve. Any other country under GPA agreement also can go through the similar system, you can register under SAM. Once we have our registration validated at SAM and then you can go further the acquisition business development side, we call it the FBO.gov, where most of the federal government acquisition solicitation is basically. [inaudible]. These are the step, what we have to do. As I said, the spirit of the Global Public Procurement and how the each government will have a free access to enter into other government is very important. US, the government, enter into free trade agreement with the Korean government, therefore both country will have access or entitlement to participate, and they are public procure market. Because this course is focused on non-US actor and teach them a shared information about the how Korean company for, in this instance, how do Korean company and participating with federal governments? My focus in this lecture is basically on non-US actors. Instead of talking about the company in the US, we are going to talk about company outside the US for Korean companies. The rest of my lecture will focus on how the Korean company A, the going through this system registering various types of registration, append registration, validation process so they can get into visions. Importance of the WHO, or GPA is a very crucial element of understanding Global Public Procurement. When Korean government enter GPA agreement, we also have another free trade agreement for example, with many other country. Korea currently have a GPA as a member, a country we have a free trade agreement with the EU and the most of OECD country. Therefore, technically, Korean company has, sorry, a legal entitlement to participate in all the public procurement market, whether you can get the business or not is something different matter. Let's have a look at the US, the government point of view. We can see the number of the country currently has a free trade agreement with United State of America. Currently is it about 20 country? There maybe there's a little bit variation, but so far what we have now is about 20 country, most of the ally of US Government enter into free trade agreement, but as we go through trade war between US and China, obviously two countries does not have free trade agreements. When you do not have a free trade agreement, that mean country where you come from, you are not allowed to participate a public procurement official manner for US federal government. Some of the country, we can see over here Australia here and Canada, then most of the Latin American, South American country here in Colombia and Costa Rica, Dominican Republic, and also Jordan and Israel and Korea 2012 we Mexico, Morocco, and Singapore. It is very interesting to look at ancient point of view. Among those countries from Asia entered Free Trade Agreement, there are not that many Asian country, that's Korea and Singapore. If you look at Australia as Asian located in Asian Pacific. We can call that Australia located in Asia. We have only a number of the country entry into free trade agreement. If you come from these country, your company there may eligible to apply for the number and CAGE number and the register under SAM. You can do the business with US government. Let's have a look at the GPA within the country. As I said, we have about 47 different countries are the member. You got to be the member or the signatory country for GPA agreement that enable you or your country to exchange goods and service with different country. If we look at how the Korean government working with the US government in terms of public procurement, a currently very small market share, less than 0.2 percent of the US entire public procurement. The budget basically allocated or actually the use by the Korean company, the public procurement participate in a very small number, that is why we have a lecture like this open session where trying to educate the general public awareness and understanding about the public procurement, encourage a more Korean company enter into US public procurement market. We look at it overall structure of the WTO and GPA, and the next section we are going to talk a lot more specific issue about free trade agreement between Korea and America. Thank you.
