TURKISH PUBLIC PROCUREMENT SYSTEM

1. TURKISH PUBLICPROCUREMENT SYSTEM

2. What I am going to talk about …… • The New System and Its Innovation • Legal Reform • Institutional Reform • Review Procedures • A Little Bit of Theory…… • Prospective Key Changes

3. 1 - “Turkish Procurement Policy….” • After considerable controversy, the new Turkish Public Procurement Law : 4734) regime entered into force on January 1, 2003. • It contains fundamental changes to the former Turkish procurement law system. Historically, Turkish procurement rules had given much more importance tosafeguard correct and economic administration of public money than to protect the bidders or undertakings. • Furthermore, as a new instrument, Public Procurement Contracts Law ( Law No: 4735) also came into force on 1 January 2003. Ultimately, Turkey has made major changes in its procurement regime. New legislative framework is, in general, based on UNCITRAL Model Law. Several amendments have been made on these laws. Amendments are generally related to the thresholds, scope and exceptions to the Law.

4. 2 - “Legal Reform….” - Basic Principles (Article 5 of PPL) - Procurement procedures Basic Principles (Article 5 of PPL) Contracting Entities are liable for ensuring transparency, competition, equal treatment, reliability, confidentiality, public supervision, and procurement of needs are being carried out under appropriate conditions in a timely manner, and for the efficient use of resources.   Article 12 of the same Law reads as follows: “...The technical criteria for the goods, services and works to be procured shall be specified in the technical specifications, which constitute an integral part of the tender documents. The specified technical criteria shall aim efficiency and functionality and shall not consist of elements impeding competition and shall ensure equal opportunities for all tenderers...”

5. Procurement Announcement Rules and Time Limits are specified in Article 13 of the Law. In achieving the transparency in announcements, according to article 13, apart from the compulsory announcement of notices, the contracting entities may also advertise the procurement notices by means of other newspapers or publications having national and international circulation, data processing networks or electronic media (internet), depending on the significance and characteristics of the procurement. Various provisions related to receiving and opening of tenders (Article 36), Notification of finalised tender decisions (Article 41), Notification of the result of the tender (Article 47), Complaint for Review (Article 54), Review by Contracting Entities (Article 55) Judicial Review (Article 57) are all aimed to ensure transparency.

6. “Procurement procedures…..”

7. “Conditions for the choice of eachdifferent procedure…” Excluding the prescribed circumstances set forth by the law for the special use of restricted or negotiated procedure the contracting authority shall award a contract by the open procedure. In an event of open procedure is not applicable due to the complexity of the nature of the subject and/or the requirement for high technology a restricted proceduremay be used (only consultancy service contracts shall be awarded by restricted procedure as the main procedure) Only in exceptional events specified in the lawthe contracting authority may award contracts by the negotiated procedure

8. “Award of the contract…”Contract should be awarded in accordance with the following criteria foreseen in the notice and tender documentation.

9. 3 - “Institutional Reform” Establishment of Public Procurement Autority (PPA) Establisment of the PPA is a stunning institutional reform as in the previous system there were too many actors like The Ministry of Public Works and Settlement, The Ministry of Finance, The Court of Accounts and none of them were responsible for the whole sector. The Authority is independent in fulfilment of its duties. No organ, office, entity or person can issue orders or instructions for the purpose of influencing the decisions of the Authority. The Authority may request documents, information and comments from all private and official institutions, establishments or persons, when fulfilling its duties. The requested documents, information or comments must be provided within the given time limits.

10. “The main tasks of the PPA….” • Review Procedure (Settlement of Complaints); • Tender notice publication(Public Procurement Bulletin); • Blacklist publication; The PPA keep the records of legal or naturalpersons those who are prohibited from participating in tenders • Amendment of the secondary legislation. The PublicProcurement Authority is an important bulwark in reducing corruption through regulating the procurement process and reviewing breaches of procurement legislation – including those covering corruption and bidder collusion. The Procurement Authority is an important actor in the anti-corruption process, through enhancing transparency and curbing corruption, starting from the tender publication till the signing of contract.

11. 4 - “Review Procedures” The new public procurement law regime provides for special review procedures. Awards of public contracts are subject to basically three lines of review. “Internal” review is mandatory and be obtained from public procurement review offices, first from the contracting authority and Public Procurement Authority, respectively. The PPL establishes a three-tier system of reviewing complaints lodged by disappointed contractors. - Contracting Entities - PPA - Administrative Courts The complainant has to follow the above stated phases in order to raise a complaint. With regard to the tender proceedings, a contractor, supplier or service provider shall first of all submit a written complaint to the contracting entity. A protester must exhaust all administrative remedies with the grantee before lodging a case to the Administrative Court. Proceedings can be brought only after the complainant informs the contracting authority of the breach or apprehended breach to give an opportunity to correct the irregularity.

12. Locus standi (legal standing) The conditions of standing for review of the decisions of the entity are set out in article 5 of theImplementing Regulation on Complaint Procedure to the Public Contracts. Article 5 of that regulation provides that; -Candidates and bidders, may apply for all the decisions and acts of theawarding authority, -The providers who did not buy the tender documents to participate in thetender may apply, it is merely, for the matters mentioned in the tender notice, tender and pre-qualification documents and the administrative practices that are in conflict with theLaw andrelated legislation. The implementation of the PPA shows that all participants in an award procedure have standing to challenge the acts taken in its course. Standing in annulment proceedings is granted to natural or legal persons that have a legitimate interest in seeking judicial protection. There are clear legal procedural provisions enabling the tenderers to know that to whom the contract was awarded and why they had been eventually excluded. Therefore, the tenderers, even without takinga legal action, have a right to obtain certain information on the award decision of the contracting authority.

13. Review by Contracting Entities The complaint shall be heard by the contracting entity only where:   a) no procurement contract has been signed; b) the complaint is submitted within fifteen days following the date upon which the contractor, supplier or service provider submitting the complaint became aware of the circumstances giving rise to the complaint or the date upon which the contractor, supplier or service provider should have become aware of those circumstances. At the first stage, The plea must be lodged with the contracting entity, be contained the necessary data and be submitted directly to the contracting entity in written form. The contracting entity shall, within thirty days after the submission of the complaint, issue a reasoned decision. If the complaint is upheld in whole or in part, the decision shall also indicate the corrective measures to be taken. The decision shall be notified to all tenderers following the date of the decision.

14. In cases where no decision can be taken within the specified period or thedecision taken is found unacceptable, the candidate or the tenderer; may appeal to thePublic Procurement Authority within fifteen days following the end of decision period or decision date. Thus, the awarding authority must issue a reasoned decision within a time limit of 30 days from lodging of the recourse and, if it considers that it has merit, must take all the necessary measures.

15. Review by the Public Procurement Board The newly created Public Procurement Authority forms the core of the new system of legal protection in Turkish Public Procurement Law. The Public Procurement Authority is part of the administration, but shall exercise its functions independently and on its own responsibility within the limits of the law. As of January,1 2003, public procurement law rights as well as other claims against contracting entities, in the first instance, only be asserted to the PPA on receipt of the contracting entity’s decision or omission of an act within (30) thirty days after receives on the plea submitted to it. The plea must be lodged with in writing, and must contain thenecessary data. As the organ co-ordinating public procurement activity, and the body responsible for inspecting the implementation of the public procurement law the PPA has the authority to annul the procurement procedure at any time prior to concluding a procurement contract if only the case, in merit and in formal conditions, has duly brought in front of the PPA. The decisions of the PPA on review of the complaint are binding on both parties to the tendering process. The fee of the review procedure fixed annually by the PPA to be paid and submitted by the plaintiff in advance with the application before starting the inquisition.

16. Provided that the contracting entity is notified by the contractor, supplier or service provider of all alleged breaches with regard to the tender proceedings that are requested to be remedied, together with an indication that the right to refer to legal action is reserved, then it may be appealed to the Public Procurement Authority prior to the signing of the contract, within the time limits and under the conditions stated in PPL. The PPA takes one of the decisions counted below, provided that it specifies the reasons and grounds relating to the appeals to the Authority: a) Determines the corrective operation in cases where no suspension of the tender proceeding is necessary and remedies by the contracting entity would be sufficient. b) Orders the termination of the procurement proceedings in case of non-compliance with the Law and the related legislation, which would constitute an obstacle for the continuation of the tender proceeding and which cannot be removed by taking corrective measures. c)Decides that the appeal is irrelevant.

17. Judicial Review As all other administrative decisions, any decision of the Board may be subject to judicial supervision by the common Turkish Administrative Courts. The number of such cases was 140 in 2004. The constitution of the Turkish Republic declares that everyone whose rightstand freedoms are violated has the right of recourse to the courts. In addition, everyone has the right to compensation for moral and material damage caused by the unlawful action of any person. However, no pleas can be lodged to the administrative court before the resolution of the PPA. A complaint may be submitted to the administrative court within one month of the day when the complainant became informed upon receipt of a notice from the PPA.

18. All decisions taken by the Administrative Court, apart from decisions on interim measures in which these decisions of the Administrative Court can be reviewed by the upper ReigonalAdministrative Court upon request by the plaintiff, may be appealed before Turkish Supreme Administrative Court, the Council of State, as it is in France, French counterpart, the Conseil d’Etat. Turkish Supreme Administrative Court, the Council of State, having reached conflicting judgements, put an end to the controversy. The Council of State’s judgment on an application for annulment is not capable of being reviewed by another court. A party harmed by infringements of the Law may always claim for damages through a civil procedure in the court. The performance of the procurement contract is not considered to be a part of procurement procedure regulated by the Turkish Public Procurement Law. Any disputes over contractual matters have to be resolved by the judicial proceedings in the civil court.

19. 5 - “A little bit of theory……” Can you make rules for every step of life? Can you create effectivity and control parallelly? What does the clean procurement cost? Is it necessary having rigid adherence to the procurement legislation?

20. 6 - “ Prospective Key Changes ......” • Central purchasing bodies (cpbs) • Competitive dialogue • Framework agreements • Dynamic purchasing systems • E-auctions

21. THANKS FOR YOUR ATTENTION Servet ALYANAK