Turkey: The Regulation On Application Of Industry Cooperation Projects

Introduction

The Regulation on Application of Industry Cooperation Projects ("Regulation") entered into force through publication in the Official Gazette dated 17.02.2018 and numbered 30335. As indicated in the general preamble of the Public Procurement Law ("PPL"), the purpose of the PPL is to realize new practices regarding the works that require public expenditure and regulating tenders, and which are intended to generate income under separate laws in such a way so that the specific needs of the tenders are satisfied. The Regulation on Application of Industry Cooperation Projects is regulated in parallel with this purpose. The Regulation determines the rules and procedures that shall be applied to construction works and the purchase of goods and services that include industry cooperation applications that ensure innovation, naturalization and technology transfer pursuant to Public Tender Law numbered 4734. In this article, arrangements made under the Regulation shall be examined.

Industry Cooperation Projects

According to the definition made under subparagraph (p) of Article 3 of the Regulation, "industry cooperation project" explains a project that involves the purchase of goods/services or construction works of the administration, and which involves innovation, endenization, and/or technology transfer.

Fundamental Principles Regarding the Tender Process

Transparency, competition, equal treatment, reliability, confidentiality, public opinion scrutiny, fulfillment of needs in appropriate conditions and on time, as well as the effective use of resources are the rules for tenders that shall be made pursuant to the Regulation. Aside from the price, management and maintenance costs, productivity, quality, technical superiorities and Industry and Technology Participation ("ITP") obligations will also be assessed in tenders that are made within this scope. Furthermore, the Regulation stipulates that construction works, services and goods purchases shall not be considered together as tenders, unless they have an acceptable natural link amongst them.

Supply Group and ITP Group

The Regulation stipulates the principles regarding formation of the Supply Group and ITP Group, determination and submission of tender procedure, preparation of tender documents, tender commissions, preparation and presentation of offers, preparation of offer evaluation plans, opening of the offer file, opening and evaluation of offers, and the conclusion of supply and ITP contracts. In this regard, pursuant to the Regulation, the negotiations for the contract shall start with the bidder, if there is only one bidder or, with the first bidder, if there is more than one bidder. The supply tender commission shall pursue the Supply contract negotiations, whereas the ITP Commission pursues ITP contract negotiations. There shall be no increase in the bidder's price offer during contract negotiations.

Industry and Technology Participation Categories

The Regulation addresses ITP categories. Local contribution, technologic cooperation and exportation are stipulated under Category-A, Category-B and Category C, respectively.

In this respect, "local contribution" is defined as activities performed inside the country by domestic companies and institutions and establishments, under the procurement contract, under Category- A.

Under Category–B, "technologic cooperation" is defined as endorsements, such as infrastructure, hardware, software, service, information, document, education, intellectual and industrial property, certification and financial endorsements that shall be provided for research-development, design, production, software development, test and such studies/ activities that are to be realized by the domestic companies, institutions and establishments for the purpose of industrialization, endenization and commercialization in the areas determined by the Ministry, except for those that shall be conducted regarding Category-A activities under the procurement contract.

Under Category-C, "exportation" is defined as the exportation of goods, services or construction work procured under the procurement contract, or in areas that are determined by the Ministry.

Liability of Contractors and Credit Facilities

In addition, the Regulation encompasses provisions regarding the liability of contractors and credit facilities. According to the Regulation, contractors cannot place any financial burden on the administration or the ministry while fulfilling his obligations. General acceptance of ITP principles, and providing minimal ITP liability ratios determined regarding every category under ITP principles, is obligatory.

Under ITP contracts, the contractor submits a letter of guarantee that is in the ratio of 6% of the ITP liability, and which is valid for at least one year after the end of the period of the ITP liability, to the Ministry, under the ITP contract.

In the event of increase or decrease in the amount of the procurement contract for any reason, including price gap, the total liability of the contractor increases or decreases, proportionally.

In the event of complete cancellation of the procurement contract, the ITP liability of the contractor ends. In the event of partial cancellation of the procurement contract, the part of the ITP liability proportional to the cancelled section is deemed as invalid. In the event of cancellation, the situations where the ITP letter of guarantee shall be propounded are regulated under the ITP contract.

According to the Regulation, credit facilities shall be pursued under the conditions determined in the preliminary approval stage, and through using the index approved by the Ministry of Science, Industry and Technology, among the indexes indicated in the ITP index table.

Penalty Ratio

It is important to note that in the event that the obligations regarding Category-A, Category-B, Category-C, sub-industry business shares and small and medium-sized enterprises business shares are not fulfilled within the indicated time and conditions stipulated in the ITP contract, a penalty shall be applied, which amounts to 6% of the ITP obligation that remains unfulfilled.

Conclusion

The Regulation abrogated the Regulation on the Rules and Procedures of the Industry Cooperation Programme regarding purchase of Goods and Services pursuant to Article 3 sub-paragraph (u) of Public Tender Law numbered 4734, published in the Official Gazette dated 15.02.2015 and numbered 29268. However, the tenders, the announcement of which are made prior to the entry into force of the Regulation, shall be carried out according to the Regulation on the Procedures and Principles of Industry Cooperation Projects Regarding the Purchases of Goods and Services according to Subparagraph (u) of Article 3 of Public Procurement Law numbered 4734 that was in force on the announcement date of the tender. The Regulation that is summarized in this article has brought with it vital changes regarding the implementation of Industry Cooperation Projects.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions