Significant amendments were introduced to the Public Procurement Code No. 4734 ("PPC") and Public Procurement Contracts Code No. 4735 ("PPCC") in the Omnibus Bill No. 7161, published in the Official Gazette dated 18 January 2019 and numbered 30659 ("Omnibus Bill").
Option to transfer or terminate agreements in case of unexpected cost increases
The most significant amendment introduced by the Omnibus Bill is the appendage of a Provisional Article 4 to the PPCC ("Provisional Article"). The Provisional Article allows contractors to terminate or assign public procurement contracts by reason of unexpected increases in manufacturing costs. In order to terminate or assign public contracts, public procurement contractors must apply to the relevant administration in writing within 60 days of 18 January 2019, when the Provisional Article took effect. The relevant administrations will assess the applications they receive and decide whether to approve them after consulting with the Ministry of Treasury and Finance.
The Provisional Article applies to contracts that were executed before 3 August 2018 under the terms of the PPC, and which were still in force as of 18 January 2019.
Termination and assignment agreements to be executed as per the Provisional Article will be exempted from the stamp tax.
Narrowed scope of application scope for the PPC
Another important amendment concerns the scope of application of the PPC. The following purchases will now be exempt from the scope of the PPC: (i) purchases by institutions subject to the PPC of tea and tea products from the General Directorate of Tea Enterprises; (ii) purchases by institutions subject to the PPC of goods and services from Uluslararasi Salik Hizmetleri Anonim irketi (the International Health Services Corporation) that fall within its scope of activity; and (iii) purchases by responsible administrations of goods and services for the benefit of certain international organizations and meetings organized by the Republic of Turkey.
Changes in the qualification documents
With the recent amendments, as from 17 May 2019, bidders participating in procurement proceedings will no longer be required to submit documentation indicating the volume of work that they have undertaken or completed for the assessment of their economic, financial and professional qualifications. Instead, they may be required to submit documents indicating their turnover relating to the subject matter of the procurement proceedings.
As from 17 March 2020, among documentation drawn up for works completed overseas, certificate holders and corporate groups or similar partnerships in which they are involved will only be permitted to use certificates of completion, except for documents issued for works carried out by administrations subject to the PPC.
Again as from 17 March 2020, where the bidder is a consortium, certificate holders who use certificates of completion obtained for works completed overseas will be required to post bonds to secure the execution of the contract and the performance of the works in proportion to their shares in the consortium.
Additional discretion granted to the Public Procurement Authority
Lastly, the Public Procurement Authority has been authorized to take the following actions, effective as from 17 Mart 2020:
- To impose restrictions on the total amount of business experience certificates to be issued and the persons to whom the certificate will be issued in connection with the work performed under the contract;
- To determine the procedures and principles for the use of certificates of completion in group companies or similar partnerships.