RESTRICTEDWORLD TRADE
ORGANIZATIONWT/WGTGP/W/21
2 October 1998
(98-3824)
Working Group on Transparency
in Government ProcurementOriginal:  English
COMMUNICATION FROM TURKEY
The following communication, dated 28 September 1998, has been received from the
Permanent Mission of Turkey with the request that it be circulated to Members.
_______________
GOVERNMENT PROCUREMENT IN TURKEY AND NATIONAL PROCEDURES
AND PRACTICES ON TRANSPARENCY IN GOVERNMENT PROCUREMENT
I. INFORMATION ON LEGISLATION AND PROCEDURES
The primary legislation on public procurement in Turkey is the "Government Procurement
Law" (GPL), Law No. 2886, which entered into force in 1984, altering the old one which had been ineffect since 1934.
The Law applies to all types of procurement activities (supply, work and service contracts) of
the administrations of general budget, annexed budget, city and town municipalities and other local
administrations.  Procurement contracts between a supplier/contractor and a contracting authority are
executed according to the provisions of this Law.
Utilities which are carried out by either state economic enterprises or some other autonomous
administrations are not subject to the provisions of this Law, since these administrations have theirown regulations which are not very different from the GPL in many respects.
The GPL not only lays down rules on the selection of contractors and the award of contracts
setting out the general principles of good business practice, but also states the conditions of
conducting procurement activities, showing the process to be followed, in detail.
The main objectives of the GPL are value for money, efficiency, transparency and
non-discrimination.  Public procurements are open to all foreign suppliers and there is no restriction
on the supplier's nationality or the place of origin.  Foreign suppliers have full and non-discriminatory
access to procurement information at all stages of the procurement process.
Technical specifications are prepared with the details needed to define the performance
criteria rather than design or descriptive characteristics without any reference to a particular trademarkor patent, specific origin, producer or supplier.
Contracting entities do not have the discretion of giving preference to domestic suppliers.
The GPL permits only the Council of Ministers to do so.  According to the Law, if a domesticWT/WGTGP/W/21
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preference has to be given, the contracting entity has to obtain permission from the Council of
Ministers.  The preference margin has to be specified in the bidding documents.
At present, there is no decree in effect giving preference margin to domestic suppliers adopted
by the Council of Ministers.
As a general rule, contracting entities have to follow closed and sealed envelope procedures
(open tendering) with a prior call for competition.  By way of exception, in certain cases specified in
the GPL, either restricted or negotiated procedures can be followed.
For each procurement, a contract notice is published with relevant information about the
subject-matter of the procurement and bidding procedure.
II. SCOPE OF GOVERNMENT PROCUREMENT
A. PROCURING ENTITIES
Departments of general budget, administrations of annexed budget, local administrations and
city and town municipalities are covered by the GPL.
Public entities which are under the coverage of the GPL are shown below.
1. General Budget (including their regional and local sub-divisions)
National Assembly
Presidency of The Republic
Court of Accounts
Constitutional Court
Prime Ministry
State Planning OrganizationUndersecretariat of Treasury
Undersecretariat of Foreign Trade
Council of State
Court of Cassation
State Institute of StatisticsPresidency of Religious Affairs
General Directorate of Title Deeds and Cadas
General Directorate of Meteorology
Ministry of Justice
Ministry of Defence
Ministry of Interior
General Directorate of SecurityGeneral Command of Gendarmery
Coast Guard Forces
Ministry of Foreign Affairs
Ministry of Finance
Ministry of National EducationMinistry of Public Works and Settlement
Ministry of Health
Ministry of Transportation
Ministry of Agriculture and Rural Affairs
Ministry of ForestryWT/WGTGP/W/21
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Ministry of Labor and Social Security
Ministry of Industry and Commerce
Ministry of Energy and Natural Resources
Ministry of Culture
Ministry of TourismMinistry of Environment
Undersecretariat of Customs
Undersecretariat of Marine
2. Annexed Budget (Including their Regional and Local Sub-Divisions)
General Directorate of Agriculture Reform
General Directorate of FoundationsGeneral Directorate of Physical Education
General Directorate of Highways
General Directorate of State Hydraulic Works
General Directorate of Coast and Frontier Guard
General Directorate of ForestryGeneral Directorate of Village Service
General Directorate of Petroleum Affairs
General Directorate of Social Service and Child Protection
General Directorate of Wireless Media
Higher Education CouncilState Universities
3. City and Town Municipalities
4. Local Administrations
B. T
RANSACTIONS
The scope of the GPL extends to all purchases, sales, services, construction, leasing,
exchange, establishment of incorporeal right on property and transportation.
C. ENTITIES WHICH ARE NOT IN THE COVERAGE OF GPL HAVING THEIR OWN REGULATIONS
1. Entities which provide:
- Production, transport and distribution services of electricity.
- Transport by train.
- Services of airports or other terminal facilities by air.- Telecommunication services.
2. State Economic Enterprise (SEEs)
III. TRANSPARENCY
A. N
OTICE OF INVITATION TO TENDER
Regardless of the estimated value of the intended procurement, the procurement must be
advertised twice in a daily newspaper in the town or city where bidding is to be held [Article 17(1),
Law No. 2886].WT/WGTGP/W/21
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The time interval between the first advertisement in the paper and the date of bidding can not
be less than ten days and the time interval between the last advertisement and the bidding day can not
be less than five days.
On the other hand, for works whose estimated value exceeds the amount to be determined
every year by the budget law, in addition to the advertisements in the Article 17(1), the procurementmust be advertised in a daily newspaper of major cities at least ten days prior to the date of bidding.
Works whose estimated value exceeds three times the amount of above paragraph will be
advertised in the Official Journal at least ten days prior to the date of bidding.
Administrations may advertise these notices also in other papers published domestically or
abroad and through other means of publication according to the importance and nature of the work.
In the bidding to be held by way of negotiated procedures the administrations are free to
advertise or not to advertise.
Advertisements can be made in foreign countr ies to ensure sufficient competition for the
biddings in which participation of foreign bidders is deemed advantageous by the administrations
concerned.  Such advertisement is made at least 45 days before the date of the bidding.
B. THE DETAILS THAT MUST BE CONTAINED IN ADVERTISEMENTS
Indicating the following points in advertisements is obligatory:(a) Nature, place and amount of the subject-matter of the bidding.
(b) Where and under what conditions the specification and its enclosures can be obtained.
(c) The place, date, time and method of procurement.
(d) Estimated value, if any, and the amount of bid-security.
(e) The documents that the bidders are required to present.
(f) In the biddings to be held by submitting bids in sealed and closed envelopes, the
deadline and time for submitting the bids.
C. S
PECIFICATIONS (TOR)
The specifications and enclosures of any documents, describing all type of specifications of
the subject-matter of the bidding, are prepared by the administrations.
In these specifications, in addition to the special and technical conditions to be imposed
according to the nature of the procurement, gene rally the following matters are obligatory to be
included:
(a) The nature, type and quantity of the work.
(b) The location, boundary, size, section, plot and block number and situation if
available.  And conditions according to the land registration in selling, leasing,
exchanging and creating incorporeal rights on immovables.
(c) Estimated value, amount and conditions of bid-security and performance security.WT/WGTGP/W/21
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(d) The place of execution of the work, mode and conditions of delivery and receiving of
the work.
(e) The date of commencement and termination of the work, penal interest to be
collected in case of delay.
(f) Qualifications and documents required from the bidders.
(g) The conditions that the contracting authority shall be free, to award and decide
against awarding contract and in determining the suitable price.
(h) The conditions that the decision of award shall be approved or may be cancelled at
the latest within 15 working days from the date of award by the superior authorized to
issue payment order.
(i) The party to pay taxes, duties, charges, and contracting expenses.
(j) Place and terms of payment and whether an advance payment shall be made;  if so
conditions and amount thereof.
(k) Price adjustment clauses in case the variations in the material or unit prices of the
works are to be paid.
(l) The cases and conditions under which extensions may be granted.
(m) If a premium is to be paid in case of completing the work before its duration, where it
is deemed to be advantageous, its conditions and term of payment.
(n) Mode of settlement of disputes.
IV. REVIEW
Although, there is no independent and special ized Review Body in the GPL, a review
procedure is available to all bidders.  Bidders may lodge complaints against the application of the
procurement procedures and the award of a contract with the procuring entity.  If the procuring entity
does not accept the complaints, any time, the bidders may lodge appeals according to the general
rules.
On the other hand, prior to signing the contract any bidder, company or person who believes
that a procurement has been carried out in a manner inconsistent with any provisions of regulations,
may file complaint in writing with the Ministry of Finance (that exercises control over the contracting
entities' contracting procedures and gives visa to procuring entities to sign contract) or the Court of
Account.  If the Ministry of Finance or the Court of Account finds any misuse of rules or contracting
procedures, etc. during the preparation, execution and conclusion phases of procurement, they may
suspend the award of contract.
It is clear that, after the signing the contract, the winner may lodge complaints against the
application of the contract with the contracting entity.  If the contracting entity does not accept the
complaints, the winner may lodge appeals.  Also, the procuring entity has a right to go to the court
about the application of the contract.WT/WGTGP/W/21
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V. METHODS OF PROCUREMENT
Five procurement procedures are applied in Turkey:
1. Closed and Sealed Envelopes Procedure
This procedure is an open tendering method.  In this procedure, proposals have to be written
and submitted in a closed and sealed envelope.
2. Selective Limited Tendering Procedure
Contracts should be awarded with competition.  As it is explained in Article 44 of
Law No. 2886, those works such as procurement of aircrafts, warships, war ammunition, military
installation and supplies, dams, power stations, harbours, docks, railways, highways, bridges may be
procured by employing the method of selective limited tending procedure.  But, in this procedure, at
least three bidders must be invited.  Also, Article 44 states that, if it is necessary to invite less thanthree candidates to submit a bid, it is essential to obtain a special permission from the Council of
Ministers for this purpose based on the opinion of the Ministry of Finance.
But, in practice, the invitation is not extended to fewer than three bidders.
Under this procedure, proposals have to be written and submitted in a closed and sealed
envelope.
Article 2 of Law No. 2886 states that competition is an essential principle.  Competition is
also an essential principle for the selective limited tendering procedure.
3. Public Tendering Procedure
Those works of which the estimated value does exceed the amount (US$177,800,
February 1998) to be established each year by the budget law, may be procured by employing themethod of public tendering.  Under this tendering procedure, offers are made verbally by the bidders
to the bidding commissions.  However, bidders may also submit their offers in writing.
This procedure is a form of open tendering. It is open to all suppliers.  The differences
between the closed and sealed envelope procedure and public tendering are the amount of works and
the type of submission of proposals.
4. Negotiated Procedure
Those works of which the estimated value does not exceed the amount to be established each
year by the budget law and also those works explained in Article 51 of GLP may be procured by
employing the method of negotiated procedure.
The mode of receiving offers is not limited with a given form in the negotiated procedure.
Biddings are concluded by receiving oral or written offers from one or several candidates according to
the nature and requirements of the procurement and by reaching an agreement on the price.
The mode of negotiation, what kind of offers  have been received and the reasons why the
bidder who was awarded the bid has been preferred and explained in the commission's decision.WT/WGTGP/W/21
Page 7
5. Direct Competition Procedure
Administrations may require all their study, planning and project works and the works related
to fine arts to be accomplished by employing competition procedure.  A contract may be awarded to
the competitor whose project is to be applied through negotiation for the professional supervision
related to such works.
In the GPL, also there are some specific procurement modes that are explained below:
1. Procuring entities falling within the scope of the GPL may procure any goods and services
from each other by appraising the value after the favourable opinion of the Ministry of Finance.
In this case, production and execution of the goods and services being the subject-matter of
the contracts have to be done by the mentioned public entities (in suppliers position), themselves.
2. As is described in Article 81(a) of the GPL, certain construction works up to TL 16 billion
(US$53,731, February 1998) (this value is changed each year by the budget law) and those works
explained in Article 81 of the GPL may be procured by the concerned administration and carried out
through force account commissions to be composed of the officials of the administration.  In this case,
the closed and sealed envelope (open tendering) procedure is used.
3. Article 89 of the GPL states that:
- In the cases when it is not possible to enforce the provisions of this Law
- Procurements for the reorganization of the Turkish Armed Forces and Security
Department, modernization of their weapons, vehicles and equipment according to
the modern technical developments
- For the procurement of the goods and services required to achieve the strategic
objectives of the Turkish Armed Forces
the provisions of this Law may be disregarded by the Council of Ministers upon the proposal of the
Ministry concerned.  The procedures and rules to be employed in such biddings are determined by the
concerned administrations and become final after the approval of the Minister concerned.WT/WGTGP/W/21
Page 8
VI. A SUMMARY OF OBJECTIVES OF GPL, BIDDING DOCUMENTS AND
QUALIFYING CONDITIONS
A. OBJECTIVES OF GPL
1. Economy
- Use of Competition
- Most Advantageous Offer
- Procurement Under Most Suitable Conditions and During the Season
2. Efficiency
- Decentralization
- Procurement Process
3. Non-Discrimination
- Open Tender Preferred
- Neutral Objective Specifications
- Rational and Non-discriminatory Qualifications
- Open to Foreign Bidders
4. Transparency
- Clear Rules
- Criteria Stated in Bid Documents
- Advertising
5. Accountability
- Responsible Decision-Makers
- Anti-Corruption Measures
- Control of Major Procurements- General Guidance to Contracting Agencies
B. STANDARD BIDDING DOCUMENTS CONTAIN PROVISIONS RELATED TO:
- The Scope Of Work To Be Performed Or The Goods To Be Supplied
- Place, Date And Hour Of The Bidding
- Eligibility To Bid
- Method Of Bidding- Preparation Of Bids
- Deadline For Bid Submission
- Procedure For Bid Opening
- Preparation Of Joint Venture Declaration
- Criteria For Bid Evaluation- Definition Of Employer/Contractor And Ri ghts And Obligations Of Both Parties
- Procedure For Bid Security And Performance Security
- Procedure For Payment Of The Taxes, Duties, Charges And Expenses
- Starting And Completion Date Of The Work
- Procedure For Measurement, Inspection And Acceptance Of The Work Performed- Terms Of Payment And Advance PaymentWT/WGTGP/W/21
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- Price Adjustment Procedure
- Procedure For Variations Of The Work
- Procedure For Damages, Penalties And Delay
- Procedure For Termination Of Contract
- Force Majeure- Settlement Of Disputes
- Applicable Law
C. MINIMUM QUALIFYING CONDITIONS
 REGARDING THE CAPABILITY AND
CAPACITY OF BIDDERS TO UNDERTAKE THE WORK
- Legal Domicile (Not Necessarily In Turkey)
- Address For Notification (In Turkey)
- Document From Chamber Of Commerce/Industry
* Enrolled To The Chamber Of Commerce/Industry, or
* Foreign Legal Person Not Having A Branch In Turkey Must HaveDocuments Approved By The Turkish Cons ulate In Relevant Country Or By The
Turkish Ministry Of Foreign Affairs.
- Signature Circular
- Bid Security (If Required)- The Bid
- Other Documents
* Proof Of The Bidders Financial And Economic Standing
* Proof Of The Bidders Technical Knowledge (Tools, Plant, Equipment Etc.)* Tax Payment Certificate
* Proof Of The Bidders Past Performance
- In Case Of Joint Venture Associated Undertaking Declaration Signed By The
PartnersWT/WGTGP/W/21
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THRESHOLD VALUES*
(1998)
WITH RESPECT TO TURKISH LIRA US$**
ARTICLE 17/2 OF GPL 12,000,000,000 53,300
(PROCUREMENTS WHOSE ESTIMATED VALUE EXCEEDS THIS AMOUNT ARE
ADVERTISED THROUGH NATION-WIDE DAILY NEWSPAPER)
ARTICLE 17/3 OF GPL 36,000,000,000 159,900
(PROCUREMENTS WHOSE ESTIMATED VALUE EXCEEDS THIS AMOUNT ARE
ADVERTISED THROUGH OFFICIAL GAZETTE)
ARTICLE 45 OF GPL 40,000,000,000 177,800
(PROCUREMENTS WHOSE ESTIMATED VALUE DOES NOT EXCEED THIS AMOUNT CAN
BE HELD THROUGH PUBLIC BIDDING PROCEDURE)
ARTICLE 51/a OF GPL 2,500,000,000 11,100
(PROCUREMENTS WHOSE ESTIMATED VALUE DOES NOT EXCEED THIS AMOUNT CAN
BE HELD THROUGH NEGOTIATED PROCEDURE)
ARTICLE 81/a OF GPL 16,000,000,000 53,731
(CONSTRUCTION WORKS WHOSE ESTIMATED VALUE DOES NOT EXCEED THIS
AMOUNT CAN BE DONE THROUGH FORCE ACCOUNT)
ARTICLE 64 OF GENERAL
ACCOUNTING LAW 40,000,000,000 134,327
(ANY COMMITMENT OR DRAFT CONTRACT REQUIRING EXPENDITURE OVER THIS
VALUE, GENERAL BUDGET OR ANNEXED BUDGET NEEDS VISA FROM THE MINISTRY
OF FINANCE)
__________
                                                     
* Threshold values are determined every year by the Budget Law.
** February 1998