Turkey: Turkish Public Procurement Law In Practice

Last Updated: 26 April 2018
Article by Şahin Ardiyok and İlker Kıl

The importance of the PPA

The public procurement system has great importance in terms of effective use of public resources considering the public procurements' 24% share in the gross domestic product of Turkey.1 In order to attract privite investments, there is no doubt that an effective public procurement system must be transparent, competitive and reliable. These requirements satisfied by the 4734 numbered Public Procurement Act (PPA), which complies with the EU acquis. In addition to all this, the PPA also employs the principles of equal treatment, confidentiality, public supervision and efficient use of resources.  Moreover, the PPA not only includes the general principles of public procurements, procurement procedures and rules regarding the enforcement of tenders, it also establishes the Public Procemerent Authority, which is an administratively and financialy independent authority and the main regulatory body in the public procurement market. In short, we may say that PPA governs the pre-contract periods.

On the other hand, the 4735 numbered Public Procurement Contrats Act involves the principles and procedures that pertain to making and implementing public procurement contracts under the public procurement law.

In principle, the rules of PPA govern the procurement process of goods, services and the construction works of the public agencies. We should state that even though there are too many exemptions listed in the PPA, the scope of this article is restricted with presenting the main legal structure of public procurements, since we do not want to distract the reader with all those exemptions. However, being an administrative action, all those exemptions  are also subject to judicial review, and, in practice, the administrative courts apply the general rules and principles of PPA to them.

The Scope of PPA

The procurement of goods, works and services, the cost of which is covered by any kind of resources that are at the disposal of the contracting entities mentioned below, shall be executed in accordance with the provisions of PPA:

  • Departments included in the general budget, annexed budget, special provincial administrations and municipalities and their related revolving funds organizations, associations, legal entities.
  • State economic enterprises, consisting of public corporations and state economic establishments,
  • Social security establishments, funds, entities of legal personalities that are established in accordance with special laws and that are assigned with public duties (except for professional organizations and foundation institutions of higher education) and establishments with independent budgets,
  • Any institutions, organizations, associations, enterprises and corporations where more than half of their capital, directly or indirectly, together or separately are owned by those stated above.
  • The construction tenders of banks within Law No: 4603. (Ziraat Bank, Halk Bank and Emlak Bank).

In fact, TCDD's Ankara- İzmir High Speed Train Project initiated on November 14, 2017, İSKİ's Silahtarağa Advenced Biological Waste Water Treatment Plant Construction Project and the construction of İstanbul Enerji Sanayi ve Ticaret A.Ş Seymen Energy Generation Plant are just  a few recent examples of the tenders initiated pursuant to the PPA.

The Main Public Procurement Methods

Even though the PPA was amended several times in order to comply with the EU acquis and social changes, the main characteristic of the act has been reserved.2 In this context, PPA defines three main types of procurement which are;

  • Open tender procedure
  • Restricted tender procedure
  • Negotiated tendering procedure

On the other hand, exceptional situations defined in the PPA a public agency may get its requirements by direct procurement. We should address that direct procurement is simply purchasing of the requirement at the market price. Pursuant to PPA an assigned official should do market price research.

The first method is an open tender procedure, which is the most common procedure where all the tenderers submit their tenders in accordance with the PPA. In addition, in the restricted tender procedure only the ones who meet the minimum requirements of the qualification criteria are allowed to participate to the tender process. The negotiated tendering procedure shall be applied to the specific circumstances defined in the PPA such as immediate situations or in the situations where there is no valid tender under other procedures, etc. Finally, the public agencies exceptionally may directly supply their requirements in the limited situations defined in the PPA. Briefly, the choice of procedure depends on the nature of the requirements and the volume of the work.

We should state that regardless of which method is chosen, the public procurement process until the signing of the contract is governed by administrative law. In other words, any conflict arising from the public procurement process is subject to the judicial review before the state courts.

Public Procurement Authority

Public Procurement Authority (Authority) of Turkey, which was established in 2002 with the enactment of PAA, is a regulatory and supervisory body with its power of secondary legislations over public procurements.  Authority is assigned and authorized for the accurate implementation of the principles and procedures specified in PPA. Under the PPA, the main responsibilities of the Authority are regulations, dispute resolutions, international relations, monitoring and the establishing of an e-procurement system. Authority has a linkage to the Ministry of Treasury, though, it does not restrict the Authority's independency from any authority while fulfillment of its duties.

The decision organ of the Authority shall be the Public Procurement Board, consisting of nine members including one chairperson, and one secondary chairperson. The members of the Board shall be appointed by the Council of Ministers upon the proposal of the Ministry of Treasury.

Additionally, one of its outstanding duty is to evaluate and conclude any complaints of the related parties regarding the proceedings carried out by the tendering public agency. Let's take a look to the complaint process in the public procurement process.

Complaint Process

A tenderer, potential tenderer or anyone who thought he has loss of a right related to the tender for non-compliance with the PPA may submit its objection to the contracting agency within the time period described in the PPA. The contracting agency may approve the complaint and re-correct its administrative act or may reject the complaint. In case of rejection, the plaintiff may appeal against the decision of the contracting agency to the Public Procurement Authority.

After the reviewing of the appeal file Authority may;

  • Order the termination of the procurement process in case of the violation of PPA
  • Determine a corrective action in suitable cases
  • Reject the application in cases where the application does not comply with related procedural rules or where no violation is determined

We should address that likewise all the other administrative acts, the decision of the Authority is subjected to the judicial review before the state courts.

According to the public procurement monitoring report 2017 of the Authority, in 2017, 135260 tenders were made and 20.161 of them had been nullified afterward3. The nullification of the one in six tenders shows us that the public procurement area might be deemed as a stage for a tough legal battle.

In addition to this, the increase in the usage of "Electronic Public Procurement Platform" (EPPP) or in other word, electronization of the public procurement process creates an inevitable efficiency and transparency. Let's touch briefly to the EPPP.

Electronic Public Procurement Platform

There is an electronic registration system called "Electronic Platform of Public Procurement" ("EPPP") which the bidders shall submit in the required information and documentation during the steps of the procurement process. Public Procurement Agency is authorized to determine the methods and principles regarding the use of EPPP. Beyond any doubt EPPP is a fruitful tree. First of all, it is an effective tool to implement the main principles of PPA such as transparency and public supervision. Second, it promotes; standardization of the process, speed of the transactions and the coherency.  Third, EPPP is a cost-effective platform considering that it led up to 20 percentage saving in the procurement costs. Finally, yet importantly, EPPP and its transparent process eliminate the corruption perception of the public over the procurement process.

According to the EPPP statics as of 2017, announced tender number is 86.900, notified contract number is 480.507 and the number of the entity who are not allowed to bid to the tenders is 1.933.5984.

Conclusion

Public procurements have an important share (approximately 20 percentage) in the gross domestic products of Turkey. Therefore, the process should be transparent, competitive and reliable. The legislative framework of the process envisaged by the enactment of the PPA and an Public Procurement Authority authorized to monitor the procurement process of goods, services and the construction works of the public agencies. Even though, the procurement methods determined in the PPA, there are a lot of exemptions which we did not prefer to mention here considering the scope of the work. Thus, we would like to inform the reader regarding the basic procedures of the public procurement process in Turkey. Last but not least,  we should mention that the tenderers have a penal liabilitiy under the Turkish Penal Code if their acts or conducts constituting bid rigging crime.

Footnotes

1. Kanca, Cenk Osman; Bayrak Metin: Türkiye'de Kamusal harcamaların Gelişimi (Dönemsel Bir Analiz 1980-2011), s.19, Anemon – Muş Alparslan Üniversitesi Sosyal Bilimler Dergisi, Cilt:3,Sayı 2, Aralık 2015.

2. Alyanak, Servet: Public Contract Law Journal, p.203., Vol.36. No.2, pp203-227, ABA, (winter 2017),

3. http://dosyalar.kik.gov.tr/genel/Raporlar/2017_kamu_al%C4%B1mlar%C4%B1_izleme_raporu_rev3.pdf

4. http://www.ihale.gov.tr/default.aspx

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
Şahin Ardiyok
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