23 Feb

English Translation of the new legislation (‘Industrial cooperation’ as defined in the relevant regulation) is now available on our web-site.

LEGAL NOTICE: The official text of the Regulation is in Turkish language. Translation by HERDEM Attorneys at Law is intended solely as a convenience, serves to raise awareness purposes and only be used for information purposes. HERDEM Attorneys at Law does not guarantee the accuracy of the translated text. Some provisions may not be accurately translated due to the possible misinterpretations.

Any discrepancies or differences in the translation are not binding and have no legal effect for compliance or enforcement purposes. HERDEM Attorneys at Law takes no responsibility for the use of any content of this document. Nothing contained herein should be relied or acted upon without the benefit of legal advice based upon the particular facts and circumstances presented, and nothing herein should be construed otherwise. Neither HERDEM Attorneys at Law nor any party involved in translating this document shall be liable for any damages, misinterpretation or errors. If any question arises related to the accuracy of a translation, please refer to the official version of the document.

REGULATIONS
From the Ministry of Science, Industry and Technology:

REGULATIONS CONCERNING THE INPLEMENTATION OF

INDUSTRIAL COOPERATION PROJECTS

 

SECTION ONE

Purpose, Scope, Basis and Definitions

Purpose and Scope

ARTICLE 1 – (1) The purpose of this Regulation is to determine the principles and procedures which are to be implemented during the acquisition of goods and services and construction work consisting of industrial cooperation practices directed at ensuring innovation, indigenisation and technology transfers, pursuant article 3, paragraph one, sub-paragraph (u) of the Public Procurement Law dated 04.01.2002 and numbered 4734.

Basis

ARTICLE 2 – (1) This Regulation has been prepared on the basis of article 3, paragraph one, sub-paragraph (u) and provisional article 4 of the Law numbered 4734.

DEFINITIONS

ARTICLE 3 – (1) The following terms used in this Regulation carry the following meanings:

a) The open tender procedures: The procedures whereby all of the candidates are able to submit bids;

b) The candidates: The real or legal entities and the joint ventures established by these, which have obtained the tender documents;

c) Research and Development (R&D): The activities defined under article 2, paragraph one, sub-paragraph (a) of the Law on Supporting Research and Development and Design Activities, dated 28.02.2008 and numbered 5746;

d) The Ministry: The Ministry of Science, Industry and Technology;

e) Senior official of the Ministry: The Undersecretary to the Ministry;

f) The procedures of tender among certain bidders: The procedures where the candidates determined by the administration or the candidates who have been invited as a result of a preliminary competence assessment, are able to submit bids;

g) The consultants: The service providers, who perform consultancy, use their knowledge and experience for the benefit of the administration, have no direct or indirect connection with the contractors of the work they are performing and provide consultancy services;

h) The price difference: The increase or decrease in the supply agreement as determined by the Administration, or in line with the principles and formula determined in the Law numbered 4734 and other relevant legislation;

i) The Administrations: The Administrations set out in article 2 of the Law numbered 4734;

j) The tender documents: The documents have been prepared within the scope of the tender and consist of the technical, administrative, financial and legal matters and the matters concerning the participation of industry and technology, and the annexes to the said documents;

k) Tender process file: The file, which has been prepared for each project which is to take part in the tender, and where all of the documents related to the tender process, such as the ICP decision, tender documents, tender announcement and addendums are maintained;

l) The tender officials: The individuals or organisations with the authority and responsibility to conduct tenders and expenditures on behalf of the administration or the officials to whom authority has been transferred in the proper manner;

m) The bidders: The candidates who have bid in the tender;

n) The Credit Facility: The determination of the realised industry and technology participation by the Ministry;

o) The Criteria Schedules: The schedules which contain the criteria, criteria weightings and the methods with which the criteria are to be evaluated, which are to be taken as the basis in the bid evaluation studies, and the example of which is set out in Annex-1;

p) Small and medium-sized enterprise (SME) work share: The activities performed by the small and medium-sized enterprises defined in article 4, paragraph one, sub-paragraph (b) of the Regulations Concerning the Definition, Characteristics and Classification of Small and Medium-Sized Enterprises, which entered into force with the decision of the Council of Ministers dated 19.10.2005 and numbered 2005/9617, within the scope of Category-A industry and technology participation activities;

q) The cost-effectiveness formula: The formula set out in Annex-2;

r) The preliminary approval: The approval which needs to be obtained from the Ministry prior to the commencement of the activities, in order for the activities which are planned to be accepted as the participation of industry and technology and be granted credit facilities;

s) The programme periods: The periods of time determined in the industry and technology participation agreement for the performance of the obligations for the participation of industry and technology;

t) The Industrial Cooperation Project (ICP): The project which comprises the acquisition of goods and services or the performance of the construction work which consist of the innovation, indigenisation and transfer of technology by the Administration;

u) The principles of industry and technology participation (ITP): The document which consists of the general principles directed at the preparation of ITP bids, the minimum ITP obligations, the information concerning the activities which are required to be performed domestically and the draft ITP agreement, as well as the annexes thereto;

v) The industry and technology participation (ITP) agreement: The agreement which sets out the provisions and conditions for the performance of the obligations of the contractor, for the participation of industry and technology, which has been signed between the Contractor and the Ministry;

w) Standardisation: The process whereby the unity of quality, brands, models or producer companies are ensured with the purpose of ensuring that operating and administrative costs are minimised or compliance with the existing systems;

x) The supply agreement: The agreement signed between the contractor and the administrator, which consists of the technical, administrative, financial and legal matters;

y) Sub-industry work share: The activities conducted by companies, organisations and institutions other than the contractor and the SMEs, within the scope of the Category-A industry and technology participation activities;

z) Domestic Value Added (DVA): The sum total of all of the costs of the raw materials, materials, products and services acquired domestically and the labour costs, apart from those paid to foreign nationals; the general management costs, apart from administrative expenses, such as travel, accommodation, meals and postal services; the profits obtained domestically and the relevant taxes, during the production of a good and / or service, within the invoice amount for the said good or service;

aa) The contractor: The real or legal entities, or the joint ventures established by these, which have signed the supply agreement with the Administration and the ITP agreement with the Ministry.

 

SECTION TWO

The Tender Process

Fundamental Principles

ARTICLE 4 – (1) There is a requirement for transparency, competition, equal treatment, reliability, confidentiality, public scrutiny, the meeting of the needs under suitable conditions and in a timely manner and the efficient use of resources, in the tenders which are to be conducted in accordance with this Regulation.

(2) Non-price matters, such as operating and maintenance costs, efficiency, quality, technical superiorities and the ITP obligations will also be included in the evaluation, as well prices, in the tenders which are to be conducted.

(3) As long as there is no acceptable natural connection between them, the acquisition of goods and services and the construction work may not be tendered together.

(4) Administrations will implement open tender procedures, without any restrictions on the numbers of candidates or bidders, or tender procedures between certain bidders, in the tenders which are to be conducted in accordance with this Regulation. However, Administrations may also obtain bids from a single candidate for reasons such as strategic priorities, national interests, the requirement for special expertise due to the fact that technology is accumulated in a single place, original characteristics and high technology.

Supply Group and ITP Group

ARTICLE 5 – (1) Following the decision by the Administration to implement an ICP, the Administration will establish a supply group (within its own body) which possesses the characteristics and number of individuals to be determined by the Administration and technical competence, in connection with the work which is the subject of the project.

(2) Once the Administration has notified the Ministry of its decision to implement an ICP, an ITP group will be established within the body of the Ministry, possessing the characteristics and number of individuals to be determined by the Ministry.

(3) Where there are insufficient numbers of skilled personnel at the Administration or the Ministry, members may be accepted into the supply group or the ITP group from other administrations.

(4) The supply group or the ITP group may undertake activities for the purposes of providing information to the public and private sector concerning the ICP and establishing an environment of cooperation.

(5) The principles and procedures for the establishment and operational duties and activities of the supply group will be determined by the Administration, while the principles and procedures for the establishment and operational duties and activities of the ITP group will be determined by the Ministry.

The Determination of the Tender Procedures

ARTICLE 6 – (1) The tender procedures which are to be implemented within the scope of the ICP will be determined by the supply group, in a manner which is consistent with the scope of the project and the characteristics of the work which is the subject of the project, and presented for the approval of the tender official, together with the reasons underlying the tender procedures. The tender procedures approved by the tender official will be implemented.

The Preparation of the Tender Documents

ARTICLE 7 – (1) The supply group will prepare the tender documents within the scope of the project. The tender documents will contain the following matters, as a minimum:

a)                 The structure of the tender procedures, project model and candidates and bidders, which is to be implemented within the scope of the tender;

b)                 The administrative list of specifications and technical list of specifications;

c)                 The draft supply agreement;

d)                 The ITP principles prepared by the ITP group;

e)                 The validity periods of the bids and the circumstances and conditions whereby they can be extended;

f)                  The circumstances where the bids will be deemed to be invalid;

g)                 The circumstances under which bids are to be excluded from the evaluation;

h)                 The cost-effectiveness formula;

i)                  The mandatory criteria, which will be taken as a basis in the evaluation of the bids;

j)                  The valid price difference formula, in the event that a price difference is to be implemented;

k)                 The currency which is to be used in the tender and the manner, amount and principles of the provisional and final letters of guarantee;

l)                  The matters related to the methods of requesting and providing explanations in the tender documents and the matters related to the issue of an addendum;

m)                The corrective procedures to be implemented by the Administration and the procedures for complaints;

n)                 The statement that the Administration is completely free to accept or reject the bids which have been submitted, evaluate or fail to evaluate the said bids, request new bids, reject bids and cancel the tender, without any obligation on its part;

o)                 Other matters.

(2)

a) The ITP principles contained in the tender documents will be prepared by the ITP group. In order to ensure that the ITP principles are prepared in accordance with the scope of the project and the characteristics of the work which is the subject of the project, all of the information and documents which have been requested (including, in particular, the administrative and technical lists of specifications and the draft supply agreement) will be shared by the supply group with the ITP group.

b) The weight related to the ITP score in the cost-effectiveness formula (in the tender documents) will be determined jointly with the ITP group.

c) The draft supply agreement (in the tender documents) will include the ITP provisions which have been prepared by the ITP group and which establish the connection between the supply agreement and the ITP agreement.

(3) The ITP obligations requested in the ITP principles will be determined as a specific percentage of the price offer. Within this framework, and as a minimum,

a) ITP obligations may be requested in one or more categories. The Category-A, Category-B and Category-C minimum obligation rates and the sub-industry work share And SME work share obligation rates may be determined separately in the ITP principles.

b) The activities which are required to be performed domestically may be determined within the scope of the Category-A obligations.

(4) The documents prepared by the supply group and the ITP group will be evaluated jointly, for the purposes of ensuring coordination, before the tender documents are finalised.

The Submission of the Tender Documents

ARTICLE 8 – (1) The tender approval documents, which are prepared by the supply group and presented for the approval of the tender official, will include the tender documents and information as to whether a tender announcement is to be made, as a minimum. The matters related to the tender announcement will be determined by the Administration.

(2) Should any material or technical errors or shortcomings which may affect the preparation of bids or the performance of the work be determined by the supply group or the ITP group, or notified by the candidates, after he tender documents have been issued to the candidates, an addendum may be issued and amendments made in the tender documents, with the approval of the tender official. The addendum is a binding part of the tender documents and any amendments which have been made will be notified to the candidates.

(3) Where an addendum has been issued, bidders who had submitted their bids prior to these amendments, will be given the opportunity to re-submit the part of their bids affected by the addendum.

(4) The candidates may request explanations concerning the matters for which they deem an explanation to be necessary, in the tender documents. The explanations made by the supply group, with the approval of the tender official, are a binding part of the tender documents, and will be notified to the parties.

(5) Where there are any amendments and / or explanations which affect the ITP principles, the supply group will coordinate the said amendments and / or explanations together with the ITP group.

Tender Committees

ARTICLE 9 – (1) A supply tender committee, comprised of a chairperson and full and reserve members possessing proficiency on the work which is the subject of the project and / or technical competence, will be established within the body of the Administration, while an ITP committee, comprised of a chairperson and full and reserve members, will be established within the body of the Ministry. The committees will consist of an odd number of members, subject to this being a minimum of three. At least one member of the supply tender committee will also take part in the ITP committee.

(2) Matters such as the formation of the supply tender committee, the characteristics and numbers of the members and its principles and procedures of operation will be determined by the Administration, while matters such as the formation of the ITP committee, the characteristics and numbers of the members and its principles and procedures of operation will be determined by the Ministry.

(3) In the event that the Administration or the Ministry does not possess a sufficient number of staff, or staff with a sufficient competence, members may be accepted into the committees from other administrations. Where necessary, consultant personnel may also be appointed to the committees, subject to the approval of the Administration or the Ministry, and without giving them the right to vote or give points.

(4) Each committee will work within the scope of its own duties. Information may be shared between the committees through a report, where deemed to be appropriate by the chairpersons of the committees.

The Preparation and Submission of Bids

ARTICLE 10 – (1) The bid of the bidder will be comprised of an administrative bid, technical bid and an ITP bid.

(2) The bid letter, offer price, provisional guarantee and other documents set out in the tender documents will constitute the administrative bid of the bidder. This bid will be placed in an envelope, with the statement that it is an administrative bid written on it. The offer price, which is contained within the administrative bid, will be placed in a separate sealed envelope. The price information within the scope of the bid will only be contained within this envelope.

(3) All of the documents requested for the purposes of technical evaluation within the tender documents will constitute the technical bid. This bid will be placed in a separate envelope, with the statement that it is a technical bid written on it.

(4) All of the documents requested for the purposes of the evaluation of the ITP bid within the tender documents will constitute the ITP bid. This bid will be placed in a separate envelope, with the statement that it is an ITP bid written on it.

(5) The sealed envelopes for the administrative, technical and ITP bids will be placed together, in a separate file, with the name and surname or commercial title, full notification address, the work for which the bid is being submitted and the full address of the Administration being written on the file, and the document will be presented to the Administration by the specified time. Bids submitted after this time will not be accepted and will be returned without being opened.

(6) The principles concerning the preparation and submission of the bids will be determined by the Administration and set out in the tender documents.

The Preparation of Bid Evaluation Plans

ARTICLE 11 – (1) Once all bids have been received, but prior to them being opened, the tender procedure file will be examined, and a supply bid evaluation plan will be prepared by the supply tender committee and an ITP bid evaluation plan will be prepared by the ITP committee. The supply bid evaluation plan will be presented for the approval of the tender official and the ITP bid evaluation plan will be presented for the approval of a senior official of the Ministry or the director authorised by him/her.

(2) Bid evaluation plans will consist of the matters of the procedures for the opening, evaluation and scoring of bids, the evaluation formula and the calendar for evaluation, as a minimum.

(3) Once the bid evaluation plans have been approved, but prior to the opening of the bids, the technical and administrative criteria schedules will be prepared by the supply tender committee, while the ITP criteria schedule will be prepared by the ITP committee. The technical and administrative criteria schedules will be presented for the approval of the tender official and the ITP criteria schedule will be presented for the approval of a senior official of the Ministry or the director authorised by him/her.

(4) The technical and administrative criteria schedules will be prepared by taking into account technical, administrative and financial matters, such as technical performance in accordance with the characteristics of the work which is the subject of the project, the work programme and work experience, while the criteria schedule will be prepared by taking into account the matters set out in the ITP principles.

(5) Matters which are not contained in the tender documents may not be included in the criteria schedules. The criteria schedules may not be altered after the bids have been opened.

The Opening of Bid Files

ARTICLE 12 – (1) The date on which the bid files are to be opened will be determined by the chairperson of the supply tender committee, and notified to the bidders. The files will be opened in the presence of all committee members and bidders.

(2) This will be followed by a determination, with a report, as to whether the sealed envelopes for the technical, administrative and ITP bids are missing in the files, and where there are any envelopes missing, the bid will be excluded from the evaluation.

(3) The session will be declared closed without the bid envelopes being opened, with the bids to be evaluated by the relevant committees. The sealed envelopes for the administrative and technical bids will be maintained by the chairperson of the supply tender committee, while the sealed envelopes for the ITP bids will be delivered to the chairperson of the ITP committee with a report.

The Opening and Evaluation of Bids

ARTICLE 13 – (1) The sealed envelopes for the administrative and technical bids will be opened by the supply tender committee, while the sealed envelopes for the ITP bids will be opened by the ITP committee. The administrative and technical bids will be evaluated by the supply tender committee and the ITP bids by the ITP committee, in accordance with the relevant bid evaluation plan and criteria schedule.

(2) First of all, any deficient or non-conforming documents will be determined by the relevant committees  during the evaluations, and the bidders will be asked by the relevant committee to complete or correct the relevant documents, within a period of time to be determined by the relevant committee, in writing. At the end of this period of time, the relevant committee will evaluate whether the required criteria have been met.

(3) For bids which have been determined not to have met the required criteria, the relevant commissions will request from the bidders in writing, that these be met within a period of time to be determined by the relevant committee. The bid will be excluded from the evaluations in the event that the bidder fails to meet the criteria.

(4) The relevant committees may also request in writing from the bidders, that any matters which are not clear in connection with their bids are explained and / or any criteria which are not mandatory are also met.

(5) The explanations, declarations and undertakings provided by the bidders will not be included in the evaluation unless they have been presented to the Administration in writing. These explanations, declarations and undertakings will be deemed to be an integral part of the bids of the bidders.

(6) The committees may have the documents they deem necessary, from among the bids, verified by the relevant authorities. Any requests made by the committees in this respect will be met by the relevant authorities as a matter of urgency. The committees may conduct on site inspections where necessary, during the process of evaluating bids.

(7) The administrative and technical bids will be scored by the supply tender committee and the ITP bids by the ITP committee, in accordance with the relevant bid evaluation plan and criteria schedule. The weighted score will be calculated by multiplying the weight of each criteria, as set out in the relevant criteria schedule, with the points awarded to the bid for this criteria. The weighted scores will be summed in order to calculate the technical and administrative scores (by the supply tender committee) and the ITP score (by the ITP committee) for the bids. The chairperson of the ITP committee will deliver the ITP scores to the chairperson of the supply tender committee with a report.

(8) The price offer envelope should not be opened until the technical, administrative and ITP scoring have been completed. However, where it is deemed to be necessary, and with the approval of the tender official, the price offer envelope may also be opened before the completion of the technical scoring.

(9) In the event that a difference is determined between the amount in figures and the amount in words, or an arithmetic error is determined in the multiplications or totals of the price offer amounts, bidders will be asked in writing to correct these differences or errors, within a period of time to be determined by the supply tender committee, subject to there being no increase in the price offer. Should the bidder fail to make the necessary correction within the specified time, the bid will be excluded from the evaluation.

(10) Following the completion of the scoring and the opening of the price offer envelope, the cost-effectiveness score of the bids will be calculated using the formula set out in Annex-2. The bids will be listed according their cost-effectiveness scores.

(11) Before the bid evaluation activities are completed, the bidders may be asked to submit their final best bids – the scope of which is to be determined by the supply tender committee. Where the best and final bids have been obtained, the score will be recalculated within the framework of the principles set out in this article.

(12) The supply tender committee will prepare the bid evaluation report. The bid evaluation report will set out all of the activities, reports, plans, criteria, weightings, scores, questions and answers, conclusions and cost-effectiveness sequence. The ITP section of the bid evaluation report will be prepared by the ITP committee and delivered to the chairperson of the supply tender committee with a report.

(13) The chairperson of the supply tender committee will present the bid evaluation report to the tender official. The tender official will assess the bid evaluation report, and,

a) May decide for contract negotiations to begin with the bidder or bidders he/she has selected in sequence, in line with the principles set out in sub-paragraphs one and two of article 4. This will be notified to all bidders. The provisional guarantees of the selected bidder or bidders will be maintained until the supply and ITP agreements have been signed, while the provisional guarantees of the other bidders will be returned;

b) The tender may be cancelled for reasons such as the bids not being fit for the purposes of innovation, indigenisation and / or technology transfer, or due to the costs being deemed to be too high. This will be notified to all bidders, and their provisional guarantees returned.

(14) The Administration will not be liable in any way as a result of bids being excluded from the evaluation or the tender being cancelled.

(15) Where it has become evident that the evaluation of the bids will not be able to be completed within the validity period of the bids, the bidders will be asked in writing to extend the validity period of their bids, together with the term of their provisional guarantees.

(16) After the bids have been opened, the bidders may not – without the request of the Administration – submit bids directed at changing their bids in part or in full. Should they do so, these bids will not be accepted and will be returned without any explanation.

(17) All written communications required by the bid evaluation process will be conducted between the Administration and the relevant bidder.

The Signing of Supply and ITP Agreements

ARTICLE 14 – (1) Contract negotiations will begin with the bidder, where the bidder determined in accordance with article 13, paragraph thirteen, sub-paragraph (a) is a single bidder, or with the bidder which is first on the list, in the event that more than one bidder has been determined. The negotiations for the supply agreement will be conducted by the supply tender committee, and the negotiations for the ITP agreement will be conducted by the ITP committee. Price offers of the bidder may not be increased during the contract negotiations.

(2) The information and documents requested by the ITP committee (in particular related to price, calendar and technical specifications) in order to ensure that the ITP agreement is prepared in a manner which is consistent with the supply agreement, will be shared by the supply tender committee, with the ITP committee.

(3) Where an agreement has been reached as a result of the contract negotiations, the matter of the signing of the supply agreement is presented to the approval of the tender official, while the matter of the signing of the ITP agreement is presented to the approval of a senior official of the Ministry or the director authorised by him/her.

(4) Following the approval of the tender official and the receipt of the final (performance) guarantee, a supply agreement will be signed between the bidder and the Administration, while simultaneously, an ITP agreement will be signed between the bidder and the Ministry, following the approval of the senior official of the Ministry or the director authorised by him/her and the receipt of the ITP performance guarantee. The ITP agreement is an annex to the supply agreement.

(5) The provisional guarantees of the bidders will be returned once the agreements have been signed.

(6) Where the agreement is not signed due to the bidder avoiding entering into an agreement which contains the provisions it has undertaken in its bid, or fails to provide a performance guarantee, the provisional guarantee of the bidder will be recorded as revenue.

(7) Where it has not been possible to reach an agreement as a result of the contract negotiations, contract negotiations will be conducted in the sequence set out in article 13, paragraph thirteen, sub-paragraph (a). The provisions of this article will also apply in the contract negotiations to be conducted with these bidders.

SECTION THREE

The Participation of Industry and Technology

Industry and Technology Participation Categories

ARTICLE 15 – (1) The contractor will perform its ITP obligations within the scope of the ITP categories set out below:

a)      Category A-Domestic Contribution: The activities performed domestically by domestic companies and organisations and institutions, within the scope of the supply agreement.

b)     Category B-Technological Cooperation: Apart from those to be performed in connection with the Category-A activities within the scope of the supply agreement, the infrastructure, hardware, software, services, information, documents, training, intellectual and industrial property rights, certifications, financial and similar support provided to the R&D, design, production, software development, testing and similar activities to be performed by domestic companies, organisations and institutions, for the purposes of industrialisation, indigenisation and commercialisation in the fields determined by the Ministry.

c)      Category C- Exports: The exports of the goods, services or construction work acquired within the scope of the supply agreement or the exports of the goods, services or construction work in the fields determined by the Ministry.

The principles of industry and technology participation

ARTICLE 16 – (1) When performing its ITP obligations, the contractor may not incur any additional burden for the administration and the Ministry.

(2) It is mandatory for the ITP principles to be accepted unconditionally and for the minimum ITP rates determined in connection with every category in the ITP principles, to be ensured.

(3) The contractor will present an ITP letter of guarantee which is to be valid for a minimum of one year from the date on which the ITP obligation period is to come to an end, at a value of 6% of the ITP obligation, within the scope of the ITP agreement, to the Ministry.

(4) The views of the Ministry will be obtained prior to any changes such as changes to the scope, prices, calendar, technical specifications, work distributions and work definitions, the materials / devices / systems to be acquired domestically and the supplier information, engineering and agreements, which may affect the ITP agreement, in the supply agreement.

(5) All changes to the supply agreement, which have an effect on the ITP agreement, will be notified to the Ministry within 10 business days after the change has been made.

(6) In the event that the price of the supply agreement is increased or decreased for any reason, including differences in prices, the value of the total ITP obligation of the contractor will also be increased or reduced in a manner which is proportional to this. The Ministry may make changes in the distribution of the ITP obligations according to the ITP categories, by taking into account the reasons for the increase or decrease in the supply agreement price.

(7) Subject to the provisions of paragraph six remaining reserved, no transfers of obligations may be made between the ITP categories contained within the ITP agreement.

(8) In the event that the supply agreement is terminated in full, the ITP obligation of the contractor will also come to an end. On the other hand, where the supply agreement has been terminated in part, the section of the ITP obligation of the contractor relating to the terminated part will be deemed to be null and void. The circumstances where the ITP letter of guarantee is to be registered as revenue, in the form of a penalty, in the event of a termination will be set out in the ITP agreement.

(9) Preliminary approvals, the ITP reports, credit facilities, provisional credit facilities, preliminary credit facilities, the transfer of surplus ITP credits, the principles and procedures related to the penalty conditions and the ITP agreement, the ITP plan, the ITP credit facility coefficient table and similar matters will be determined by the Ministry.

The industry and technology participation plan

ARTICLE 17 – (1) The contractor will perform its ITP obligations within the scope of Category A, in line with the ITP plan, which is annexed to the ITP agreement.

(2) The ITP plan will consist of the activities which are required to be carried out domestically, within the scope of Category-A.

Preliminary Approval

ARTICLE 18 – (1) There is no need to obtain a preliminary approval for the Category-A ITP activities which are to be performed in the manner set out in the ITP plan. However, in the event of any changes in the ITP plan for these activities, a preliminary approval is to be obtained from the Ministry.

(2) A preliminary approval is to be sought for each ITP activity prior to the commencement of any procedures directed at the performance of Category-B and Category-C ITP activities, prior to the signing of any contract, agreement, purchase order and similar documents or in the event of any changes in connection with the activity.

(3) Preliminary approvals may be restricted by the Ministry in respect of matters such as time, price, company, country, product and service, where necessary.

The Credit Facility

ARTICLE 19 – (1) The crediting of ITP activities will be performed following the presentation of the ITP report, which shows the position of the fulfilment of the ITP obligations, to the Ministry, and the evaluation of the said report.

(2) Crediting will be performed by the Ministry, under the conditions set out in the preliminary approval, using the coefficient deemed to be appropriate by the Ministry, from among the coefficients set out in the ITP credit facility coefficient table.

(3) Credits will not be provided for administrative expenses, such as travel, accommodation, meals and postal services, which the contractor has incurred during the performance of its ITP obligations, but which are not directly related to the subject of the obligations.

(4) The coefficient is to be applied as 1 in the crediting of the ITP activities within the scope of Category – A. However, in the event that the ITP activities within the scope of Category – A are performed by SMEs and / or are related to the sectors and fields which have been determined by the Ministry to be priority sectors and fields, coefficients which are consistent with the ITP credit facility coefficient table may be used.

(5) The Category – A and Category – C activities within the scope of the ITP obligations will be credited on the basis of the DVA. The verification of the DVA amounts in the ITP activities which have been realise will be performed by the Ministry. All of the information and documents requested for the purposes of verifying the DVA amounts will be presented to the Ministry. Where necessary, the Ministry may have all types of inspections carried out (subject to the costs thereof being met by the contractor), for the purposes of having the DVA amounts verified.

(6) The actual market value and / or equivalent value of the technology which has been gained, the investment and the other activities set out in the definition of Category – B will be taken as the basis when crediting the ITP activities within the scope of Category – B. This value and the amount of the credits will be determined by the Ministry.

(7) The Ministry may request export / order undertakings for the products / services which will emerge as a result of the use of the technology and / or investments gained by the domestic companies / organisations and institutions, within the scope of Category – B. Any exports realised within this scope will be credited separately within the scope of Category – C.

(8) The technological gains and investments realised within the scope of Category – B may not be transferred to third parties, their rights of use may not be revoked, they may not be withdrawn or excluded from use in any manner, without the approval of the Ministry. Otherwise, the said Category – B credit will be cancelled.

(9) In the event of any repeated crediting of the ITP activities, or any excessive crediting due to material errors, by the Ministry, these excessive credits can be cancelled within a period of five years following the expiry of the ITP obligation period. These circumstances will be notified to the contractor, and it will be given a suitable amount of time to perform any deficient obligations (if any), in connection with the part which has been cancelled.

Provisional Credit Facility

ARTICLE 20 – (1) A credit facility may be provisionally granted for the ITP activities planned by a contractor in connection with its ITP obligations within a programme period, in accordance with the principles of granting credit facilities determined by the Ministry.

(2) Any late performance penalties which may arise in connection with the amount of the provisional credit facility of the ITP obligations of the contractor within the relevant category, will be suspended for the validity period of the provisional credit facility.

(3) In the event that the activities, for which a provisional credit facility has been granted, are performed at the end of the validity period determined by the Ministry, the amount of the provisional credit facility will be converted into a final credit facility by the Ministry.

(4) In the event that the activities, for which a provisional credit facility has been granted, have failed to be performed at the end of the validity period determined by the Ministry, the part of the late performance penalties which have been suspended, in connection with the obligations which have not been performed, will be collected from the contractor together with late payment interest.

(5) The transfers set out in Article 21 will not be applied for provisional credit facilities.

The Transfer of Surplus Credits

ARTICLE 21 – (1) Any surplus ITP credits, which have been performed by the contractor within the scope of an ITP agreement, over and above its obligations within the same ITP category, may be used for the obligations of the contractor in the following period, within the scope of the same ITP agreement and the same ITP category, on the request of the contractor and the approval of the Ministry, at the end of each programme period.

(2) Any surplus Category B and Category C credits performed over and above its Category B and Category C obligations, within the scope of an ITP agreement, by a contractor, may be used for the obligations within the scope of the same ITP category in a different ITP ach the same contractor is a party, on the request of the contractor and the approval of the Ministry, at the end of each programme period.

Preliminary Credit Facility

ARTICLE 22 – (1) A preliminary credit facility will be granted by the Ministry for the ITP activities performed by a company / organisation and institution, which has no current ITP obligations, within the scope of Category B and / or Category C (having obtained preliminary approval), to be used in the instance of any potential future ITP obligations.

(2) A preliminary credit facility will be granted by the Ministry for the surplus ITP activities performed within the scope of Category B and / or Category C, to be used in the instance of any potential future ITP obligations of the contractor within the scope of the ITT agreement, at the end of the ITP obligation period.

(3) The preliminary credit facility granted for a specific ITP category may not be used for the obligations under a different ITP category.

Penalty Clause

ARTICLE 23 – (1) Should the Category-A, Category-B, Category-C, sub-industry work share and SME work share obligations not be fulfilled within the period and under the conditions set out in the ITP agreement, a penalty of 6% of the ITP obligation, which has not been fulfilled, will be implemented.

(2) Should the contractor fail to pay the penalty under the conditions set out in the ITP agreement, this amount will be collected from the ITP letter of guarantee. The contractor will complete the value of the ITP letter of guarantee to the amount set out in the ITP agreement, within the period stated in the ITP agreement.

(3) The implementation of the penalty will not relieve the contractor of its responsibilities to fulfil its ITP obligations. After the penalty, which has been accrued, has been collected, the ITP obligations of the contractor, which have not been performed, will be added to its ITP obligations in the same category, in the next programme period, under the conditions set out in the ITP agreement.

(4) In the event that there still remain ITP obligations which have yet to be performed at the end of the ITP obligation period, and following the collection of the accrued penalty,

a) These obligations will be added to the obligations of the contractor within the scope of the other ITP agreements, to which the contractor is a party, in the categories and manner deemed appropriate by the Ministry.

b) Where there are no other ITP agreements to which the contractor is a party, the Ministry and the contractor will begin discussions for the purposes of entering into an agreement directed at the performance of the ITP obligations which were not fulfilled, within 60 days. Should the parties fail to reach an agreement within this period, or should the ITP obligations still remain unfulfilled despite an agreement having been reached, a penalty of 6% of the ITP obligation, which has not been performed, will be implemented.

The Authority to Monitor and Audit

ARTICLE 24 – (1) The Ministry has the right to demand all types of information and documents it deems necessary and carry out controls or have them carried out, in connection with the monitoring or performance of the ITP activities.

SECTION FOUR

Various and Final Provisions

Complaints

ARTICLE 25 – (1) An application of complaint can be made to the Administration within five days from the notification of the bidders of the outcome of the tender, in connection with the procedures or actions within the tender process, which are alleged to be in violation of the law. The principles related to complaints will be determined by the Administration.

(2) No complaint or appeal applications may be made to the Public Procurement Authority for the procedures within the scope of this Regulation.

Penalties and Banning From Tenders

ARTICLE 26 – (1) The provisions of the Law numbered 4734 and the other relevant legislation will apply in connection with the penalties and banning from tenders, in relation to the implementation of this Regulation.

Circumstances for which there are no provisions

ARTICLE 27 – (1) The Ministry and Administrations may establish their own organisational structures, carry out regulatory procedures, and prepare documents related to the render, the evaluation of bids and the agreements, in compliance with the provisions of this Regulation.

(2) The provisions of the Legislation numbered 4734 and the other relevant legislation may be implemented in connection with matters which have not been determined with this Regulation and those which not been determined in the regulatory procedures or tender documents which have been prepared within this framework.

(3) The Ministry possesses the authority to make regulations and eliminate reservations for the purposes of ensuring unity in implementation, subject to not being in violation of this Regulation.

Coordination

ARTICLE 28 – (1) The duties and responsibilities related to the circumstances requiring coordination within the scope of this Regulation will be determined with a protocol to be signed between the Administration and the Ministry.

Repealed Regulations

ARTICLE 29 – (1) The Regulations Concerning the Principles and Procedures of the Programme of Industrial Cooperation Related to the Acquisitions of Goods and Services Pursuant to Article 3, Sub-Paragraph (u) of the Public Procurement Law numbered 4734, which was published in the Official Gazette dated 15.02.2015 and numbered 29268, has been repealed.

Commenced Tenders

PROVISIONAL ARTICLE 1 – (1) Tenders, which were published prior to the date on which this Regulation entered into force, will be conducted in accordance with the provisions of the Regulations Concerning the Principles and Procedures of the Programme of Industrial Cooperation Related to the Acquisitions of Goods and Services Pursuant to Article 3, Sub-Paragraph (u) of the Public Procurement Law numbered 4734, which were in force on the date on which the tender was published.

Entry into Force

ARTICLE 30 – (1) These Regulations will enter into force on the date on which they are published.

Execution

ARTICLE 31 – (1) The provisions of this Regulation will be executed by the Minister for Science, Industry and Technology. 

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