Turkey: Procurement In Turkish Defense Industry: From Government To Tenderer

Last Updated: 29 September 2014
Article by Safak Herdem

With reference to exception in Public Procurement Law #4734, goods, services and works procurement which are decided by the ministry of national defense that these are related to the defense, security or intelligence or that these require to be treated confidentially, or procurements requiring special security measures during the performance of the contract pursuant to related legislation or those concerning the cases in which the basic interests of the state's security needs to be protected shall not be governed by this Law except prohibition and criminal provisions.

At this point, some principles and procedures (dated 2009) for goods, services and works formed by Ministry of National Defense constitutes legal basis for procurement process.

In the projects of Undersecretariat for Defense Industries, the direct procurement methodincluding the supply from one single real or legal person without numerical limits is determined. However, Defense Industry Executive Committee approval is required for projects to be supplied from one single natural or legal person. This method is used only in case of presence in one place of the national interest, confidentiality and technological know-how, ensuring standardization and in order to meet urgent operational requirements used in the project.

In accordance with PPL#4734, in procurement of goods, services and works by contracting authorities, one of the following procedures shall be applied: Open procedure, restricted procedure and negotiated procedure. The direct procurement method is an exceptional method other than these procedures. With direct procurement method, it's intended to meet easily the qualifications of requirements specified in article 22 of PPL#4734.

Works in projects begin when a written request of consumer (Turkish Armed Forces) reached to Undersecretariat for Defense Industries. A project group is created in the relevant Departments for reported needs. Project Group is constituted with consumer's and Undersecretariat's staffs in technical, tactical and logistical branches.

Procurement activities officially start with the decision of Defense Industry Executive Committee. Exceptionally R & D projects may be initiated upon Undersecretariat's proposal and Defense Industry Executive Committee's decision in the absence of consumer's demand. Project work schedule is formed subsequent to creation of group and notifying the requirement to Undersecretariat. Tender documents including the "Request for Proposals (RFP)" are prepared as required. The tender dossier is prepared and published by taking into account of project's technical, tactical and logistical demands and considering the defense industry strategy. The procurement process begins with submission of the files approved by Undersecretary directly to the companies, institutions and organizations or publishing the announcement related to procurement on Undersecretariat's website.

Following the publication of the RFP, "Bid Evaluation Committee" is formed with the approval of the Undersecretary prior to the receipt of proposals. Before the opening of the bids received, the bid evaluation plan, evaluation criteria and weights are prepared by the bid evaluation committee. Following the approval of the plan by the Undersecretariat the bid evaluation is initiated. Evaluation studies are based on the protection of competition and cost-effectiveness. Before the completion of evaluation studies, it may be demanded that the candidate contractors submit their final and the best offers in writing. Evaluations are completed considering their final and the best offers and the "Bid Evaluation Final Report" is prepared. After final report is presented to Undersecretary, it may be demanded that the contractor candidates renew their price offers if deemed necessary.

Evaluation results for decisions of contractor selection are presented to the Defense Industry Executive Committee and it's followed the Committee's decision. Procurement process is completed with Defense Industry Executive Committee's decision for contractor selection. However, in the case of a company designated by the Defense Industry Executive Committee as the second company, the second company's bid bond will be retained until the contract is signed.

The Undersecretariat can sign different types of contracts according to the characteristics of the projects. The negotiations of prospective contracts and its annexes with contractor are implemented in accordance with the Defense Industry Executive Committee's decision and provided that they remain within the specified source. Demands that will arise within the projects and require additional costs during negotiations are evaluated by the Undersecretariat on condition that stays within the resource boundaries designated by Defense Industry Executive Committee's decisions. The demands that will exceed the resources are evaluated separately by the Defense Industry Executive Committee.

The projects designated by the Defense Industry Executive Committee in its project front-end decision as sale from state to state and international consortium shall be carried out notwithstanding the provisions set forth herein.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Safak Herdem
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