On July 6, 2022, Presidential Decree No. 1548 dated 17/9/2019 Determining the Procedures and Principles for the Procurement of Goods and Services to be Made within the Scope (b) of Article 3 of the Public Procurement Law No. 4734 (“Presidential Decree”) by the Turkish Ministry of National Defense (“Ministry”) (except General Directorate of Military Factories and General Directorate of Shipyards (“ASFAT”) and their affiliates) was amended and published in the Official Gazette. With this amendment, a provisional article has been added to Presidential Decree.

As per the previous amendment, dated May 13, 2022, in contracts made in Turkish Lira regarding goods and services purchases and construction works purchased within the scope of the Presidential Decree, excluding works purchased under the NATO Security Investment Program, additional price differences may be calculated and/or these contracts transferred under the Principles Regarding the Implementation of Provisional Article 5 of Law No. 4735.

Accordingly, within the provisional article brought with the current amendment, in contracts made in Turkish Lira regarding goods and services purchases and construction works purchased within the scope of the Presidential Decree, excluding works purchased under the NATO Security Investment Program, incremental price difference and additional price difference may be calculated, a time extension may be granted and/or contracts may be terminated upon the contractor's written application within thirty days from the effective date of this provisional article, under the Principles Regarding the Implementation of Provisional Article 6 of Law No. 4735.

Pursuant to the Principles Regarding the Implementation of Provisional Article 6 of Law No. 4735;

Contracts made in Turkish Lira regarding the procurement of goods and services and construction works, the tender of which was made under the Public Procurement Law No. 4734 before 1/4/2022 and which continues as of 15/4/2022, for the parts performed between 1/1/2022 and 31/12/2023 including these dates;

- For those who have a provision regarding the calculation of price difference in the tender document, the price difference calculated according to the contract will be paid incrementally (by applying B=0.90 coefficient B=1.00 for construction works and service purchases, and by increasing the price difference by 10% for goods purchases).

- For those who do not have a provision regarding the calculation of price difference in the tender document and for those whose price difference is calculated only for some of the inputs, 25% of the change in the Turkish Statistical Institute's Domestic Producer Price Index in 2022 and 15% in 2023 will be given for the parts that are not calculated.

In order to calculate the incremental price difference, the contractor will not be required to make a written application to the administration. However, to calculate the incremental price difference for the progress payments made before the effective date of the Principles Regarding the Implementation of Provisional Article 6 of Law No. 4735, the contractor must apply to the administration in writing until 13/6/2022.

Moreover, regardless of whether there is a provision regarding the calculation of price difference in the tender documents of the contracts in question, if the contractor applies in writing to the administration until 13/6/2022, an "additional price difference" will be given for the parts performed between 1/1/2022 and 31/3/2022 including these dates.

In the contracts regarding the construction works, the tender of which was made according to Law No. 4734 before 1/4/2022 and which continues as of 15/4/2022, if the contractor applies in writing to the administration until 13/6/2022, a time extension may be granted for the amount of work that cannot be performed according to the work schedule between 1/1/2022 and 31/3/2022, including these dates.

Further the contracts signed in Turkish lira for goods and services procurement and construction works, tendered according to Law No. 4734 before 1/1/2022, with a realization rate of up to 15 percent of the first contract value as of 15/4/2022 (including this rate), will be terminated and liquidated, if the contractor makes a written application to the administration until 13/6/2022 (including this date). In determining the realization rate, the ratio of the progress payments approved for the productions/works/delivery carried out until this date to the first contract price will be taken into account.

Goods and services purchases and construction work subject to the terminated contracts cannot be re-tendered unless the approval of the Ministry of Treasury and Finance is obtained.

Contracts signed by the administrations within the scope of Law No. 4734 regarding the purchase of goods and services and construction works are exempted from this Law No. 4734, provided that the relevant legislation is amended within 120 days;

a) Incremental price difference can be calculated for the parts realized between 1/1/2022 - 31/12/2023 (including these dates).

b) Additional price differences can be calculated for the parts realized between 1/1/2022 - 31/3/2022 (including these dates).

c) Between 1/1/2022 and 31/3/2022 (including these dates), a time extension (limited to construction works) may be granted for the amount of work that cannot be performed according to the work schedule.

d) Contracts with a realization rate of up to 15 percent (including this rate) of the initial contract value as of 15/4/2022 may be terminated and liquidated upon the application of the contractor.

Şafak Herdem, Esra Temur