Even though Turkish procurement law, especially the nature of the procedures, announcements, deadlines and awarding criteria, has been adapted ever more to conform to EU guidelines, the law is still different to that of the EU member states in some aspects. Three points are particularly prominent, not least because extremely strict rules are in place here: low thresholds for direct procurement, the exclusion of bidders if they fail to respect certain basic principles and a central procurement register.
Foreign investors planning to expand into Turkey will of course ask themselves what the state of public procurement practice in Turkey is. There is, in principal, a very clear answer to this: Thanks to a reformed procurement law and well-structured procedures and rules which have, to some extent, been made stricter, a sound practice for public procurement procedures has been guaranteed. But what does this look like in detail?
Thresholds for direct procurement
Turkish procurement law divides public procurement into upper and lower threshold areas, just like in every other European state. However, the definition of these thresholds means that direct procurement is restricted. Direct procurement is, as a result, only possible when the threshold is not exceeded, or in exceptional cases as defined by the law. In order to ensure that public resources are used and distributed efficiently, direct procurement is only possible in limited cases. This is why the thresholds are set much lower than in other European states. The threshold for the procurements needs of a contracting authority within the boundaries of metropolitan municipalities is TRY 53,261 (approx. EUR 16,120), and the threshold for the procurement needs of other administrative authorities outside the boundaries of metropolitan municipalities is TRY 17,744 (approx. EUR 5,370).
The statistics published by the Turkish procurement authorities prove that these rules have had an impact: Only 4% of the procurements made by the public sector take place using direct procurement. And the contracting authority is of course free to apply stricter procurement procedures in the area below the threshold too.
No compromise on illegal activities
The falsification of documents, fraud, bribery– these are just some of the activities forbidden by Turkish procurement law, which contains an exact list of forbidden activities. This ensures that certain principles are observed throughout the public procurement procedure. If natural or legal persons demonstrably take part in such illegal actions, then they shall be excluded from participation in the procurement procedure for a period of one to two years, depending on the severity of the offense. But also those who win tenders and then afterwards refuse to conclude the contract, in the cases other than force majeure, with the contracting authority can be excluded from participating in various procurement procedures for a period from six months up to one year.
It is important to note here that not only may legal persons be forbidden from participating in procurement procedures, but also any shareholders who hold more than 50% of the share capital in the company involved. The decision on whether a natural or legal person shall be excluded from participation in the procurement process is, incidentally, decided by the contracting authority in question. Repeated criminal convictions for illegal activities mean a natural or legal person may also be permanently excluded from the procurement process. Turkey is very concerned to ensure that those carrying out the aforementioned illegal activities are criminally prosecuted to the severest extent possible, which would seem to differentiate Turkey from some other European jurisdictions.
The central register: A symbol of transparency
A modern and efficient administration has been the declared goal of Turkey for some years now and e-government plays a decisive role in this. This form of modernisation affects communication between the economy and the state, as well as the processes within the public administration. For this purpose a central and publicly available electronic public procurement platform known as EKAP (Elektronik Kamu Alımları Platformu) was created. This platform makes it possible to not only access, from a central location, information about public tenders and their results, but also to take part in public procurement procedures and send tenders by using a registered electronic signature.
A further accomplishment of EKAP is that it maintains a central list, open to public inspection, of all bidders who have been excluded from procurements procedures on legal grounds.
Contract awarded, or contract revoked?
If a bidder believes their rights have been infringed, or if they feel they have suffered damages due to an unlawful decision or because of the irregular nature of the proceedings, then they can then initiate review procedures to contest the contracting authority’s decision. Four different legal remedies are available in this case. The complaint must be submitted to the contracting authorities within ten days of the date on which the unlawful decision or action of the contracting authority becomes known, or from the date upon which this would have become known. An application for review by the Turkish Public Procurement Authority must be made before the contract of services is signed and within five days of the decision about the complaint being issued, at the latest. The procurement authority’s decision can, in turn, be contested by lodging a claim with the competent administrative court, but this must be done within thirty days of notification about the decision. The administrative court’s decision may also be appealed against before the Supreme Administrative Court. This must be done within fifteen days of being notified about the decision.