## Facts

- Norway’s Norwegian Public Roads Administration procured electronic toll-collection equipment for a new toll-ring system around Trondheim.
- Norway awarded the contract directly to a Norwegian supplier (Micro Design) using a single-tender procedure, without open competitive tendering.
- The United States asserted that U.S. suppliers (including Amtech) were capable and willing to compete but were excluded by the single-tender award.
- The dispute proceeded under the 1979 Agreement on Government Procurement within the GATT 1947 framework.
- Norway did not contest that single-tendering occurred; it argued the procurement was justified under the prototype/R&D single-tender exception in Article V:16(e).
- The Panel confirmed the procurement fell within Norway’s GPA coverage before reaching the exception and breach questions.

## Issues

1. Whether the Trondheim procurement was covered by Norway’s obligations under the Agreement on Government Procurement.
2. Whether Norway proved that the contract qualified for single-tendering under Article V:16(e) as procurement of a prototype or first product developed under an R&D-type contract.
3. If Article V:16(e) did not apply, whether Norway’s single-tendering violated the GPA’s non-discrimination and tendering obligations (Articles II and IV).
4. What recommendations, if any, the Panel could make regarding remedies sought by the United States, including compensation-like measures.

## Decision

- The Panel found the Trondheim procurement was covered by the GPA.
- The Panel held Article V:16(e) is an exceptions provision to be interpreted narrowly, with the burden on Norway to prove its requirements were met.
- Norway failed to demonstrate that the contract’s principal purpose was to procure results of research/original development, or that the procured equipment’s principal purpose was testing and further development of such knowledge.
- Because the exception was inapplicable, the single-tender award was inconsistent with GPA obligations, including national treatment/non-discrimination and required tendering procedures (Articles II and IV).
- The Panel did not order contract annulment or compensation-like relief; it limited itself to findings and general recommendations consistent with GPA practice.

## Legal Principles

- Exceptions permitting non-competitive procurement under the GPA must be construed narrowly.
- The party invoking a GPA exception bears the burden to demonstrate conformity with the exception’s conditions.
- Article V:16(e) requires proof that the procurement is genuinely tied to R&D/original development (including that the contract and equipment have an R&D/testing principal purpose), not merely acquisition of an operational commercial system.
- When a covered procurement is single-tendered without a valid exception, the procuring entity breaches GPA obligations on non-discrimination and competitive tendering disciplines.
- Panels under the pre-WTO GPA generally confine remedies to findings and conformity-oriented recommendations, leaving compensation or withdrawal of benefits to the Parties and the Committee process.

## Conclusion

The Panel concluded that Norway’s direct award of the Trondheim toll-collection equipment contract could not be justified as a prototype/R&D procurement under Article V:16(e), and therefore violated the GPA’s core competitive tendering and non-discrimination rules, while declining to prescribe compensation-like remedies.


Norway—Procurement of Toll Collection Equipment for the City of Trondheim, GATT Doc. GPR.DS2/R (May 13, 1992)