On May 13, 2022, the 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, two provisional articles have been added to Presidential Decree No. 1548 dated 17/9/2019.
Pursuant to Presidential Decree, the Ministry, the unions, institutions, and organizations authorized to purchase by the Ministry, Fuel Supply and NATO POL Facilities Operation Presidency, and other administrations that make purchases on behalf of the Ministry are defined as Administration.
This Presidential Decree covers; defense and security-related weapons, ammunition, and other war materials, systems, equipment, machinery, equipment, construction, and all kinds of purchases directly related to these; procurements that are related to situations that are decided by the Ministry to be related to the fields of defense, security or intelligence or that they should be carried out in secrecy, or that require special security measures during the execution of the contract under the legislation or that require the protection of the fundamental interests of state security; purchases related to nutrition, food preparation, and distribution services, apparel accommodation needs, and; purchases of the Fuel Supply and NATO POL Facilities Operations Presidency regarding their duties and needs within the scope of Presidential Decree No. 4, with the resources allocated to the Ministry.
Furthermore, the Presidential Decree applies to procurement conducted with external finance under international agreements when distinct procurement methods and principles are not stipulated in the financing agreement. Furthermore, it has been indicated that procurement within the scope of the Presidential Decree may be performed on behalf of the Ministry by other administrations.
The Administration is responsible for ensuring that demands are fulfilled under acceptable conditions and on schedule and that resources are used efficiently in procurements made under the Presidential Decree. However, when fulfilling the requirements of defense, security, or intelligence, or when requiring anonymity, factors such as national interest, standardized preservation, and urgent operational needs are also considered. Another fundamental concept is that no work may be procured if allowances or resources are not planned. Furthermore, works that do not have an appropriate natural link between them would be procured jointly.
Provisions for the procurement commission were specified in the Presidential Decree. In this regard, the bid officer shall appoint the procurement commission, which would consist of at least three and odd individuals, including one of the chairmen, provided that at least one of them is an expert on the subject of procurement.
As per the Presidential Decree, the approximate cost excluding value added tax shall be calculated before procurement by conducting the necessary price research, and it should be displayed in a chart of accounts together with its justification. The estimated cost cannot be revealed to bidders or other individuals or entities that do not have an official involvement with the procurement process. However, if the approximate cost cannot be calculated owing to industrial or technological prerequisites or urgent needs, or if establishing the approximate cost proves problematic, purchases can be made with the planned budget, as long as the explanation is specified in the approval document. Any approximate cost information should not be contained in any document other than the chart of accounts linked to the approval document.
The Presidential Decree governs the documents and qualification standards required to participate in the procurement. As a result, provided they are presented in the procurement document, bidders may be required to give information and documents about the determination of their economic and financial credentials, as well as their professional and technical qualifications.
Moreover, except for establishments such as foundations, associations, unions, funds, which are within the body of the purchasing Administration or for any purpose related to the Administration, and the companies in which these organizations are partners, those specified in Article 11 of Law No. 4734 cannot participate in purchases, directly or indirectly, or as subcontractors, on behalf of themselves or others. However, it has been indicated that bidders who participate in the bid despite these prohibitions would be rejected and their bid bonds would be recorded as income. Furthermore, because this scenario could not be ascertained during the bid evaluation, it was stated that if a bid was made on one of them, the bid would be annulled by recording the bond as revenue. Real and legal individuals excluded from the procurement under subparagraph (g) of the first paragraph of Article 11 of Law No. 4734 have their bid bonds refunded, and if a purchase decision is made on one of them, the procurement is annulled.
The Presidential Decree also requires administrative and technical specifications outlining all aspects of the works under consideration for procurement, however, there is an exemption to this rule.
Stipulations concerning bid procedures and direct procurement were made within the scope of the Presidential Decree. In this context, clarifications about the bargaining method were provided under the suggested bid procedures. Furthermore, precise provisions about purchases that can be made through direct procurement are included.
While the preparation and submission of bids are detailed, it has been required that no changes to the procurement document be made after the announcement/invitation is issued. However, questions concerning the issuing of an amendment and the request for an explanation are handled by the procurement document.
It is also critical to receive bid offers in Turkish Lira. However, offers in foreign currencies are required in some circumstances. Price differences in purchases made in Turkish Lira may be issued in line with the terms of Law No. 4735, provided that they are specified in the approval certificate or document. There is no pricing difference when the currency used to make purchases is a foreign currency. However, if an exception is allowed, a price difference may be permitted for purchases, as long as it is specified in the approval document.
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, in contracts made in Turkish Lira regarding goods and services purchases and construction works purchased within the scope of Presidential Decision, excluding works purchased under the NATO Security Investment Program, according to the provision made with the provisional article brought with the amendment.
In addition, it has been regulated that the issues regarding whether temporary and performance bonds will be taken in purchases, the receipt, opening, and evaluation of bids, whether the extremely low bid will be questioned or not will be made as specified in the procurement document. Provided that it is stated in the bidding document, the Administration is free to cancel the bid by rejecting all the bids given, at any stage.
The purchase decision, approval, and notification were also regulated, and it has been explained that the most economically advantageous offer would be determined based on the lowest price or taking into account the price as well as other factors such as operating and maintenance costs, cost-effectiveness, efficiency, quality, and technical value.
According to Presidential Decree, the outcome of the procurement is reported to all bidders, including the bidder who was granted the procurement, within five days of the procurement decision being approved by the procurement officer, per Article 65 of Law No. 4734. If the tender authority cancels the procurement choices, the bidders are notified in the same manner.
Further, situations that can be accepted as force majeure are regulated. However, conditions have been introduced for these situations to be accepted as force majeure. It has been stipulated that if the contract is terminated due to force majeure, the account will be liquidated following the general provisions and the performance bond and, if any, additional guarantees will be returned.
The failure of the Administration to fulfill its obligations regarding the performance of the contract within the stipulated time, or the occurrence of delays that are not the responsibility of the contractor, due to reasons arising from the Administration without the fault of the contractor, if this situation prevents the fulfillment of the commitment and the contractor is unable to remove this obstacle, the period for some or all of the work is extended at least until the delay time, depending on the obstacles to the work and the nature of the work to be done. The way to be followed in cases of increase or decrease in the work to be done within the scope of the contract is also regulated.
Moreover, the provisions of Law No. 4734 and Law No. 4735 shall apply to matters related to prohibited acts and behaviors and transfer of contract, termination of the contract, and transactions related to joint ventures.
Another issue governed by the Presidential Decree is that purchases required in Turkey or abroad within the scope of any task assigned to the Turkish Armed Forces in cross-border or counter-terrorism operations should be procured or made by the Ministry or other public institutions and organizations, subject to the Minister of Ministry's approval, and are not subject to Presidential Decision.
Finally, before the Presidential Decree's effective date, it has been announced that the works for which purchase had been announced or informed in writing would be completed under the terms of the legislation to which they were subject.
Şafak Herdem, Esra Temur