26 Feb

Presidential Decree No. 758 (“Decree”) published on Turkish Official Gazette, dated February 14 2019, which would not have effect on on-going tenders, sets the procedures and principles on the procurement of defense, security, and intelligence related goods and services as subject to the Code of Public Procurement. Law no. 4734 (“Code”) providing certain exceptional provisions in the Turkish public procurement system. As it is stated by the Code, the procurement of those sensitive goods and services are subject to specific statutory provisions as to national security is the primary concern.

Government Bodies

The Decree shall be applied to related procurements by Interior Ministry and its authorized organs including, General Command of Gendarmerie, Coast Guard Command, Immigration Authority, Security General Directorate and their affiliated institutions.

The Scope of the Procurement

A quite wide range of goods or services procurements[1] is included within the scope of this new legislation. The 2nd article of the Decree provides a list of procurements that are covered by the Decree’s principles and procedures. However, any type of goods and services to be procured shall be included in the scope of the Decree in case the President or Interior Ministry decides that procurement requires secrecy for defense, security or intelligence purposes.

However, the goods and services funded by external financing resources in accordance with international agreements may be excluded from provisions of this Decree if a different procedure is prescribed by the financing memorandum.

General Principles of Public Procurement System Remain to Apply Same

Although the Decree regulates an exceptional procedure, the government’s responsibility to ensure confidentiality, reliability, competition, equal treatment and efficiency of resource utilization remains. However, national interest, protection of standardization and emergency operation requirements are the primary concern.

As subject to procurement regime, the administrations will continue to require allocating the budget in order to conduct procurement. Pursuant to the 5th article of the Decree, goods, services, consultation and construction works can be procured together without an admissible, natural connection. Besides, government authorities are allowed to sign a protocol to open a joint tender for procurement of more than one agency’s need.

Pre-Tender Proceedings

The administrative body shall determine an approximate cost before the procurement. Nevertheless, it may also procure with a planned budget when the first option is not possible due to industrial and technological reasons or urgent need.

Participants may be required to present certain information and documents proving their financial and technical ability to perform the relevant procurement. Participants are also liable for the accuracy and on-time delivery of requested information and documents. Those who do not comply with certain provisions in this respect shall be excluded from the procurement and their bid bond registered as revenue.

With respect to conditions to qualify ineligible bidders, the general conditions of public procurement law remain the same and also apply under this Decree.

Tender Procedures and Direct Procurement

Procedures of the open procedure (In open tender procedure, it is compulsory to issue a procurement document before proceeding to tender phase. The administrative bodies simply receive and evaluate the bids and the parties’ offers.), restricted procedure (The procuring organ invites determined applicants to attend bidding. Beside of research and development projects, this procedure may be used for procurements that require expertise, advanced technology, confidentiality. The administration may also apply this procedure if it is considered as the most appropriate method for national interest or if procurement is about intelligence requirements.), competitive negotiated procedure (This procedure is applied when technical and financial features can’t be determined as required due to the complexity and authenticity of the goods and services. Research and development projects are a good example of where the competitive negotiation method fits well.

The administration invites potential applicants following preliminary qualification evaluation. Firstly, applicants make their offers to the procuring agency including technical details and implementation methods regarding procurement without price information. The administration makes an interview with every single applicant about the most appropriate method and solutions for the needs. After the interviews, the government contacts applicants whose interview considered successful to receive price offers and land a contract with the optimal offer.) or negotiated procedure (This procedure may be applied for all kinds of procurements by the condition that the Interior Minister’s approval. In this procedure, the government invites more than three applicants to make an offer regarding the procurement. The tender is finalized with the ideal contractor after evaluation of the offers.) may apply to such procurement. Moreover, the direct supply procedure may also be applied only if conditions set out in the Decree are met.

The decree counts situations when the administration may use the method of direct supply in numerus clausus by its 14th Article. For instance, procurements that are made from Aselsan, Havelsan, Roketsan etc. can be subject to direct supply.

Contracting

Economically most advantageous offer may be decided upon only the price or the administration may also consider operation and maintenance expenses, efficiency, quality, technic value etc. The administration lands a contract with the owner of the most advantageous offer.  The contract may be prepared in a foreign language as an addition to the original Turkish version. The functional currency shall be regulated within the certificate and administrative specifications.

In conclusion, the Decree regulates procurement of defense-related goods and services which have been excluded from the main legislation that regulates general procedure and principles of public procurement. The legislator provides relatively more relative provisions to the procuring body in order to enhance secrecy during the procedure. The Decree brought new regulations regarding procuring committee, electronic procurement etc. along with introducing additional procurement procedures such as competitive negotiated procedure and negotiated procedure. The principles and procedures are updated by a more detailed regulation.

[1]The list covers various items from directly defense-related ones such as weapon and ammunition to regular goods and services such as nutrition and fuel oil under security procurement regime.

Author: Kaan Erdoğan, LL.M.

 

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