On September 29, 2021, the Purchasing and Tender Regulation for Goods and Services Procurement to be made by Turkish Railway Vehicle Industry Inc. (‘TÜRASAŞ’) within the Scope (g) of Article 3 of the Public Procurement Law No. 4734 (“Regulation”) was published in the Official Gazette and entered into force after being published.

The purpose of this Regulation is to determine the principles and procedures to be applied for the purchases of goods and services that are subject to an exemption within the Scope (g) of Article 3 of the Public Procurement Law No. 4734.

Initially, the basic principles to be followed in the bids to be made within the scope of this Regulation are specified, and it is stipulated that it is essential to meet the needs promptly, under appropriate conditions, per the determined procedures, to ensure openness, competition, transparency, equal treatment, reliability, confidentiality, public scrutiny, and efficient use of resources.

In addition, it has been explained that the procurement of goods and services cannot be bid together unless there is a natural and acceptable connection between them, and it has been stated that the procurement of goods or services cannot be divided into parts to remain below the authorization limits. It has also been stated that purchases of goods and services that constitute a whole cannot be divided into parts.

According to the Regulation, bids, expenditures, and supplies cannot be made for works that are not included in the annual lodgment program and operating budget and for which there is no allowance. However, bids can be made before the end of the previous fiscal year for goods and services that may be realized in the next fiscal year or that are continuous and whose allowance is routinely scheduled every year.

However, the purchase is made based on profitability and efficiency. Profitability in purchasing is achieved by determining not only the cheapest price but also the most economically advantageous offer. The most economically advantageous offer can be the lowest price offered, or it can be determined by proportional consideration of other factors other than prices, such as operation, maintenance cost, efficiency, quality, and technical value.

Under the last principle stated in the Regulation, in cases where the technical, administrative, and special provisions constituting the bid documents and a contract are required to be concluded, the procurement and bidding bodies cannot initiate the bid process before the draft contract and the necessary information and documents are prepared.

It has been regulated that the bid authorization limit of the General Manager for the works within the scope of this Regulation is determined by the Board of Management and that the General Manager may delegate some of these powers to his subordinates, provided that they do not exceed their limits of authority. In addition, it has been clarified that the authorization limits cannot be exceeded unless the requesting unit obtains approval from the General Manager or the Board of Management within the framework of the authorization limits, for procurements and bids exceeding the authorization limits when necessary. Moreover, the decision approval and change of the authorization given is made only by the authorized Bidding Official or the top Bidding Official.

In the Regulation, it is stipulated that the approximate cost calculation is made by the Approximate Cost Commission and price notifications and proforma invoices that do not reflect the real market prices and may cause errors in the calculation of the approximate cost will not be taken into consideration. In addition, the points that the Approximate Cost Commission takes into account while calculating the approximate cost are mentioned, and it is stated that all kinds of information and documents used in the calculation of the approximate cost are included in the annex of the chart of accounts and signed by the preparers. Further, it was stated that the approximate cost is not included in the procurement notices and is not disclosed to the bidders or other persons who have no official relationship with the bid process.

The Regulation, which also determines the notification process of the requests and the documents in the bid process file, made explanations about the Bidding Commission and the Expertise Commission and explained the working principles and duties of the Bidding Commission in detail.

Additionally, the Regulation stipulates the qualification rules for participation in the bid. Further, explained the information and documents that may be requested from the bidders regarding the determination of their economic and financial qualifications and professional and technical qualifications. In this context, it has been stated in the bidding document which information or documents will be requested according to the nature of the work subject to the bid, and how the qualification assessment will be made.

It is regulated that those specified in Article 11 of Law No. 4734 cannot participate in bids. However, it has been stated that the bidders participating in the bid despite these prohibitions will be excluded from the bid and their bid bonds will be recorded as income. In addition, since this situation could not be determined during the evaluation of the bids, it was announced that in cases where a bid was made on one of them, the bid would be canceled by recording the bond as income.

It has been stipulated that it is essential that the technical specifications specifying all the characteristics of the procurement of goods or services, which are the subject of the bid, are prepared by the administration. However, if it is approved by the Bidding Official that it is not possible to be prepared by the administration due to the nature of the procurement of goods or services, it has been explained that the technical specifications can be prepared following the provisions of this Regulation. Additionally, the issues to be covered by the technical specifications are specified.

As per the Regulation, the Administration can make purchases without preparing the technical specifications, due to the necessity arising from the technical projects it implements, or because the work subject to the bid will be met from a single source, or for projects related to research and development that are not subject to mass production, by specifying in the bidding approval document. Further, in the purchases of goods that require a special manufacturing process, arrangements can be made in the technical specifications for the contractor to first present the prototype of the product to the administration and to produce it after the acceptance of this prototype. The Regulation also introduces provisions on the preparation and enforcement of type bidding documents.

Within the scope of the Regulation, stipulations regarding bid procedures and direct procurement were made. In this context, explanations regarding the bargaining procedure, and open bid procedure were made under the bid procedures to be applied. In addition, detailed provisions regarding the purchases that can be made through direct procurement are also included.

In addition, the way to be followed if the needs are met by public institutions and organizations is also mentioned. Also, the conditions and principles in which a framework agreement can be made are regulated. The obligatory matters to be included in the procurement notice, the procurement notice periods and rules, the situations in which the bid can be canceled before the bid time and what needs to be done, the scope of the bidding document and the obligatory matters to be included in the administrative specification are also regulated. In this context, the bidding document contains the administrative specifications, including the instructions to the bidders, as well as the technical specifications, technical drawings, contract draft, explanations, if any, and other necessary documents and information, including the project of the work to be done.

The Regulation, which also clarifies the issue of issuing the bidding document, making changes or explanations in the announcement and bidding documents, brings provisions regarding joint ventures and subcontractors.

While the preparation and submission of the bids are explained, it is stated that the bids cannot be withdrawn for any reason, except in the case of issuing an addendum. The validity period of the bids is specified in the bidding document. In case of need, this period can be extended, provided that the bid and contract conditions are not changed, and the bidder accepts.

Afterward, explanations were made about the valid currency in offers and payments. Accordingly, the situations where offers can be received in foreign currency were counted and it was regulated that the payments would be made in the contract currency.

It has been regulated that in case of requesting a bid bond, a bid bond shall be taken at an amount to be determined by the bidder, not less than 3% of the bid price. In case the bid validity period is extended, the term of the bid bonds will be extended in the same period. Bid bonds of the bidders other than the bid bond belonging to the bidder who won the bid are returned. In addition, after the performance bond is submitted to the Administration and the contract is signed, the bid bond letter of the bidder who won the bid is returned. Finally, the values that can be accepted as bonds are explained.

The process of receiving, opening, and evaluating the bids has been regulated. Provided that it is stated in the bidding document, the Administration is free to cancel the bid by rejecting all the bids given, upon the decision of the Bidding Commission, at any stage, with the approval of the Bidding Official. In this case, the bidders who bid for the bid cannot claim any rights against the Administration. In case of cancellation of the bid, this situation shall be notified to all bidders who submitted a price offer, together with their justifications. In addition, the notification of the bid result and the invitation to the contract process are also explained by considering the foreigners.

If a performance bond is requested, a performance bond not less than 6% of the bid price is taken from the bidder who won the bid before the contract is concluded. The duration of the performance bonds is determined by the Administration, considering the completion date of the work subject to the bid and the guarantee period, if any. However, in the case of an increase in the price to be paid as price difference and the contract price in the works bid with the expectation of paying a price difference, an additional performance bond of at least 6% of this increased amount is taken. The additional performance bond calculated over the price to be paid as a price difference can also be covered by deducting the progress payments. The Regulation also determines the conditions and process of returning the performance bond and, if any, additional performance bond, giving the advance.

The bidder who won the bid must sign the contract by giving the performance bond and other required documents within the given period. The bid bond is returned immediately after the contract is signed. If these obligations are not complied with, except in cases of force majeure, the bid bond of the bidder who won the bid is recorded as revenue, by obtaining the approval of the Bidding Official, without the need for protest and judgment. Detailed explanations regarding the contracting process of the bid are also given.

The matters that must be specified in the contracts to be drawn up per this Regulation are listed. However, force majeure situations that are the reasons for a time extension, reasons arising from the administration, and other situations are determined. For a time, extension to be granted due to force majeure, the conditions for the force majeure to occur outside of the control and fault of the contracting parties and to prevent the implementation of the contract partially or completely must occur together. For the situations listed in the Regulation to be accepted by the administration as force majeure, including the extension of time, termination of the contract, it is not caused by a fault arising from the contractor, it prevents the fulfillment of the commitment, the contractor notifies the administration in writing, and the competent authorities’ documentation is required. For the cases listed among other cases to be grounds for a time extension, they must be documented.

The Regulation, which stipulates the processes of audit, inspection, and acceptance in detail, also makes explanations about what should be done in case of the price difference, increase and decrease in business. The provisions that should be applied in cases of death, bankruptcy, serious illness, detention, or conviction of the contractor are also included.

The contract may be transferred to another person in obligatory cases by obtaining the written permission of the competent authority authorized to sign the contract. However, the conditions in the first bid are sought from the companies that will take over. In addition, no other contract may be transferred or taken over by the same contractor within three years following the date of transfer of a contract, except for transfers due to name and status changes. Contracts that have been transferred or taken over without permission or that have been transferred or taken over within three years following the date of transfer of a contract shall be terminated, and the relevant articles of the Law on Public Procurement Contracts numbered 4735 shall apply to the transferor and transferee. Receivables arising from the contract cannot be assigned without the approval of the Administration. If the contractor declares in writing, together with the reasons, that he will not be able to fulfill his commitment due to financial insolvency, except in cases of force majeure, after the contract is made, the performance and additional performance bond are recorded as revenue without the need to make a separate protest, and the contract is terminated, and his account is liquidated under the general provisions.

In the termination of the contract, the bonds recorded as income cannot be deducted from the contractor's debt. The damage and loss suffered by the administration shall be compensated to the contractor. In case the contract is terminated due to force majeure, the account will be liquidated under the general provisions and the performance and additional performance bond will be returned.

The provisions of Article 17 of Law No. 4734 and Article 25 of Law No. 4735 shall apply to matters related to prohibited acts and behaviors. In addition, suppliers are directly responsible for hidden defects, damages, and losses arising from the delivery or use of defective or non-standard materials within the framework of their commitments, failure to fulfill the commitment by the provisions of the contract and specification, and similar reasons. This loss and damage are supplied and compensated by the supplier under the general provisions.

Works announced in writing, announced, ordered, or contracted in writing to be bid before the entry into force of this Regulation is concluded per the provisions of the legislation on the date the announcement is made, announced, ordered, or contracted. Finally, approved supplier lists regarding the purchase of goods and services are created within a maximum of 24 months from the effective date of the Regulation. For the purchases of goods and services to be made during this period, contractors that have been purchased in the past and whose competence in terms of technical competence, product suitability, quality, delivery performance, and after-sales services have been proven can be accepted as temporarily approved suppliers.

Şafak Herdem, Esra Temur