Turkey: Eighth Amendment to the Public Tender Law is on the Way

Since its entry into force on 1 January 2003, the Public Tender Law ("PTL") has been amended seven times in less than four years. The major change proposed by the draft law for amending the PTL ("Draft Law") is the Public Tender Authority’s ("PTA") determination of the goods and service procurements of State Economic Enterprises and Municipal Economic Enterprises that shall not be subject to the PTL, upon the request of the relevant public entity. The principles and procedures applicable for such procurement process shall be determined by the public entity organizing the tender and the regulations thereon shall be announced in the Official Gazette. Other amendments introduced by the Draft Law are summarized below.

Evaluation of Extremely Low Bids

The Draft Law introduces a distinction in the evaluation of extremely low bids in terms of goods or services procurement tenders, and tenders for construction work. With respect to goods and services procurement tenders, the regulation of the Draft Law tracks Article 38 of the current PTL. According to the Draft Law, the tender commission shall determine extremely low bids while evaluating other bids and the approximate cost calculated by the public administration organizing the tender. Before rejecting these bids, the tender commission shall request from such bidders explanations, in writing, regarding the components of their bids that the tender commission deems important. Then, the tender commission shall reject the bids submitted by the bidders who provide insufficient explanations or do not provide any written explanation at all.

On the other hand, the Draft Law sets forth a new procedure for evaluating extremely low bids in terms of construction work tenders. In this respect, the tender commission is required to determine an ‘extremely low bid’ threshold and detect extremely low bids while evaluating the bids submitted and the cost of the tendered work. Apart from the bids that are close to the extremely low bid threshold, the Draft Law requires elimination of the extremely low bids that are 10% below the threshold regardless of their amounts. The bidders that are close to the threshold shall be requested to submit an "additional definitive guarantee" in the amount corresponding to the difference between the bid and the threshold. In the event such bidders do not agree to provide the additional definitive guarantee, then their bids shall be disqualified.

Limitation on PTA’s Examinations

The Draft Law sets forth limitations on the PTA’s authority to review complaints filed by the bidders in respect of tenders. Under the Draft Law, the relevant public entity organizing the tender shall first conduct the necessary examinations upon such complaints. Although the PTA still stands as the final administrative authority for the decisions rendered by such public entities. According to the Draft Law, the PTA shall review complaints only on the basis of claims raised by the applicants and the issues contained in the decisions of the public entities with respect to such complaints.

Accelerated Complaint and Evaluation Process

The Draft Law foresees a shortened timeframe for complaint filings and their evaluation process. Accordingly, complaints against the acts and transactions that are not in compliance with the applicable laws in the tender process should be filed within five days (instead of fifteen days) to the public entity organizing the tender. Such public entities are required to render their decisions, and the reasons thereof, within five days (instead of thirty days) with such decisions being served to the applicant within three days (instead of seven days). In the event a decision cannot be rendered within the abovementioned period or the applicant disagrees with such decision, such applicant can apply to the PTA, as the final administrative authority, within five days (instead of fifteen days).

Guarantee Requirement for Complaints to PTA

Another amendment proposed by the Draft Law is the requirement to deposit a cash guarantee corresponding to 0.05% of the bid amount to the bank account of the public entity organizing the bid in respect of complaints filed to the PTA. In the event the cash guarantee has not been deposited, the public entity shall be allowed to carry on the tender process and sign the tender agreement with the winning bidder. For cases in which the PTA rejects the claims in the complaint filing, such cash guarantee shall be qualified as revenue to the public entity. Otherwise, the cash guarantee shall be returned to the applicant within ten days following the service of the PTA’s decision to the relevant public entity.

Progressive Tenders

According to the Draft Law, service procurements such as cleaning, security, catering, personnel transportation and goods procurement such as fuel or food shall be tendered for a period not exceeding two years. For the purpose of mitigating announcement costs, certain tenders that should be announced in a local newspaper shall be briefly announced. Such brief announcement shall include basic information regarding the tender and shall make reference to the Public Tender Bulletin for details.

The Draft Law is still open for discussion and could be changed in accordance with the opinions rendered by various public entities and administrations.

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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