Public Procurement Conference BRNO, Czech Republic26-27 November, 2007

PUBLIC PROCUREMENT REVIEW PROCEDURE IN

TURKEY

Şakire KuralChief Legal Adviser

Public Procurement AuthorityThe Republic of TURKEY

LEGISLATIVE FRAMEWORKLEGISLATIVE FRAMEWORK

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The public procurement regime in Turkey The public procurement regime in Turkey is regulated by two separate lawsis regulated by two separate laws::

No. 4734 of 4 January 2002 – Public No. 4734 of 4 January 2002 – Public Procurement Law Procurement Law

(PPL - published in the Official Journal 22 (PPL - published in the Official Journal 22 January 2002January 2002))

No. 4735 of 5 January 2002 – Law on Public No. 4735 of 5 January 2002 – Law on Public Procurement Contracts (LPPC - published in Procurement Contracts (LPPC - published in the Official Journal 22 January 2002the Official Journal 22 January 2002

REFORMING THE PUBLIC PROCUREMENT SYSTEM IN TURKEY

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Turkey’s candidacy to the European Turkey’s candidacy to the European UnionUnion

Under the structural reforms effortsUnder the structural reforms efforts with World Bank (WB) and the with World Bank (WB) and the International Monetary Fund (IMF)International Monetary Fund (IMF)

PPublic procurement law ublic procurement law much more much more based onbased on UNCITRAL and EU Directives UNCITRAL and EU Directives..

STRUCTURE OF PP LAWSTRUCTURE OF PP LAW

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The PPLThe PPL covers all stages of procurement covers all stages of procurement procedure, except the execution (and procedure, except the execution (and termination) of contracts, which is covered termination) of contracts, which is covered exclusively by the LPPC.exclusively by the LPPC.Moreover, the PPL defines the procurement Moreover, the PPL defines the procurement procedures and describes in a detailed manner procedures and describes in a detailed manner all steps to be taken in the course of the all steps to be taken in the course of the proceedings.proceedings.The PPL also establishes an institution to The PPL also establishes an institution to regulate procurement matters (Public regulate procurement matters (Public Procurement Authority).Procurement Authority).The PPL grants to tenderers the right to The PPL grants to tenderers the right to appeal, and the proper review procedures are appeal, and the proper review procedures are defined.defined. The PPL provides some penal provisionsThe PPL provides some penal provisions..

STRUCTURE OF PP LAW REVIEW PROCEDURE

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General FrameworkGeneral Framework

Basic principles concerning settlement of Basic principles concerning settlement of disputes in public procurement exist in Public disputes in public procurement exist in Public Procurement Law No 4734 (PPL). Procurement Law No 4734 (PPL).

In accordance with Art. 81 of 2004/18/EC In accordance with Art. 81 of 2004/18/EC European Union Council Directive, an European Union Council Directive, an independent administrative body with expertise independent administrative body with expertise in public procurement has been established in in public procurement has been established in Turkey. Turkey.

PUBLIC PROCUREMENT AUTHORITY

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PPA is composed ofPPA is composed of;; •the Presidencythe Presidency,,•the Public Procurement Boardthe Public Procurement Board (PPB),(PPB),•the Service Units.the Service Units. Duties of this Authority can be summarized as:

To publish the Public Procurement Bulletin;To resolve complaints To identify any discriminatory action against Turkish economic operators in foregin contract awards and to furnish proposals to the Council of Ministers in reciprocity To prepare, develop and guide the implementationTo provide training for public and private sectorTo compile and publish statistics, to keep the records of prohibited tenderers.

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Legal Framework

The related provisions in PPL regarding review for complaint procedures are as follows:

Article 53 Article 54 Article 55 Article 56 Article 57

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Secondary Legislation

Regulation on Administrative Applications Against Procurements

Communiqué on Administrative Applications Against Procurements

Regulatory Decisions of the Board

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Review Procedure

review by the contracting entity

review by PPA

judicial review

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All alleged breaches with regard to the tender proceeding of public procurement under the scope of the Law regardless of the estimated cost are subject to review for procedure by PPA.

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Administrative Acts Subject to Review

All administrative acts by the contracting entity, especially, finalized tender decision shall be subject to review.

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Notification of the Finalized Tender Decisions

Another important aspect of the system is the establishment of a mechanism for notification of finalized tender decisions as in the EU, as well as the existence of an authority to which the complaints are submitted.

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Tender decisions shall be acknowledged to all tenderers who have submitted an offer, including the tenderer awarded, in return of signature or by means of registered mail sent to the notification addresses of all tenderers within maximum three days following the day of decision approval by the contracting officer.

In cases where the tender decisions are cancelled by the contracting officer, the tenderers shall be likewise notified.

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Competence of Complaint

Any contractor, supplier or service provider who claims that s/he has suffered a loss of rights or suffered or is likely to suffer loss or damage resulting from an alleged breach of such duty, can demand review.

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Regulation on Administrative Applications Against Procurements

Establishes the rules and principles within the scope of the PPL for review of the complaints, conclusion of review procedures and implementation of resolutions. In line with the administrative applications;

candidate: Natural or legal persons or their joint ventures applying for pre-qualification

tenderer: The supplier, service provider or works contractor bidding for contracts of goods, services or works

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Regulation on Administrative Applications Against Procurements The scope of Article 3 has been expanded to cover;

“the persons who have the competence of being tenderer”...

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Review Procedure

complaint to contracting entities

objecting complaint to PPA

judicial review on decision made by PPB

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Complaint to Contracting Entity

tenderers have the right to complain directly to the contracting entity against the finalized tender decisionrequest an explanationwritten complaint to contracting entity

The scope of a complaint to the contracting entity may cover notice, all infringements related to tender procedures including procurement documents.

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Who claims that s/he has suffered a loss of rights or damage or s/he is likely to suffer loss or damage;

candidates and tenderers may complain, in relation to all proceedings and actions in the procurement process

those that can be tenderers may complain, only in relation to the matters provided in the procurement announcement and the procurement and prequalification documents, and the conflicts between such matters and the administrative practices

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Time Limits of the Review for Complaints to the Contracting Entity

no procurement contract has been signed

complaint is submitted within 15 days after the notification of finalised tender decision

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The formal requirements of the review for complaint to the contracting entity

complaints shall be accepted provided that the formal requirements of the review for complaint to the contracting entity are met

application of complaints to the contracting entity is not subject to any charge or fee

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Decisions Made by Contracting Entity upon a Complaint

decision to finalize the complaint

decision to continue the tender proceedings

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Decision to Finalize the Complaint

The Contracting Entity may take any of the following decisions as a result of review within thirty days:

determining the corrective action

cancelling the procurement proceedings

disapproving the application for complaint The decision shall be notified to all tenderers within 7 days following the date of the decision.

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Decision to Continue the Tender Proceedings

Following the submission of a complaint, the contracting entity shall be prohibited from signing a contract unless the contracting officer certifies that urgency and public interest considerations require the tender proceedings to continue. Otherwise the tender decision and the contract shall be rendered null and void.

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Objecting Complaints to Public Procurement Authority

In order to carry out the duties assigned with PPL, PPA evaluates and concludes any complaints claiming that the transactions carried out by the contracting entity until the signing of the contract are in violation of this Law and the related legislative provisions.

Applications made to the PPA can be submitted in two ways: objecting complaint reviews through claims

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Provided that the contracting entity has been notified by the contractor, supplier or service provider of all alleged breaches are requested to be remedied, a complaint may be submitted to the Authority prior to the signing of the contract.

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Time Limit and Formal Requirements

In cases where no decision can be made within thirty days or the decision taken, is found unacceptable by the tenderer; the contractor, supplier or service provider can request PPA to review the case at the end of decision period or fifteen days after the decision date.If the contracting entity notifies the contractor, supplier and service provider that the tender proceedings may continue and the contract may be signed, then the contractor, supplier and service provider may request a review to be undertaken by PPA, within at least three days, following the date of the aforementioned notification. Objecting complaints made after signing of the contract shall not be taken into account by the Board.

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Application Fee for Objecting Complaint

The applicant shall deposit 285 YTL (approximately 160 €) as application fee for review to PPA.

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Time Limits and the Category of the Decisions by the Public Procurement Board (PPB)

Decisions of PPB fall into two categories:

temporary decision as interim measure ( tender proceeding would continue whether or not)final decision (within 45 days following the date of application)

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Effects of the Temporary Decisions Made by the PPB

Contracting entity is liable to conduct the proceedings and actions required by the decision of the Board to such extent to cause any change to the legal condition immediately.

Final decision of the board shall be waited, and the requirements of such resolution shall be fulfilled except for signing the contract.

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Final Decision Made by the PPB on Objecting Complaint

Provided that it specifies the reasons and grounds relating to the complaints submitted to the Authority, the Board;

determines the corrective operation

termination of the procurement proceedings

decides that complaint is irrelevant

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Effects of the Final Decision Made by the PPB

Contracting entity is liable to conduct the proceedings and actions required by decisions of the Board to such extent to cause any change to the legal condition immediately.

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Review through claims of violation by the PPB

PPA may, if deems necessary, review and bring to conclusion any claims of violation of PPL and the related legislative provisions.

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Decisions Taken upon Claims of Violation by PPB

As a result of review through claims, either of the following decisions shall be taken;

the claims being disapproveddetermines the corrective operationtermination of the procurement proceedings

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Notification and Publication of the PPB’s Decision

All decisions of the PPB shall be notified to the parties within five days following such decisions’ dates.

PPA shall also have these decisions, published in the Official Gazette.

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Notification to Public Prosecution and Listening to the Parties by PPA

The Board may listen to the parties. But inclusion of parties in investigation procedure consists of only listening to the parties when deemed necessary, and to request documents and information from contracting entity.

The Board, if deemed necessary, may resolve on informing the contract entities to be designated and/or proclaiming the acts of crimes to the public prosecution offices for further actions in administrative and/or penal aspects in relation to the acts that are found to be contrary.

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Compensation of Loss

no provision exists in PPL regarding the loss compensationrequests on compensation of losses in public procurements shall be made to the courtrequests for compensation of losses may be relevant to losses arising from the cost of tender preparing, or relevant to depriving of profits due to the decision taken as well.

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Judicial Review of Decisions Made by PPB

The final decisions made by the PPB with regard to the complaints shall be under the jurisdiction of the courts.

In this stage, the legal procedure is subject to general rules of administrative law.

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THE AUTHORITY HAS DECLAREDTHE AUTHORITY HAS DECLARED

700 interim decisions and 897 final decisions on 700 interim decisions and 897 final decisions on complaints in 2003complaints in 20031.148 interim decisions and 1.892 final decisions 1.148 interim decisions and 1.892 final decisions on complaints in 2004on complaints in 2004 1.11.19696 interim decisions and interim decisions and 24692469 final decisions final decisions on complaints in 200on complaints in 20055 1767 1767 interim decisions and interim decisions and 3348 3348 final decisions final decisions on complaints in 200on complaints in 200661126 1126 interim decisions and interim decisions and 2288 2288 final decisions final decisions on complaints in on complaints in first half of first half of 20020077

THANK YOU FOR YOUR ATTENTION

Şakire KURALChief Legal Adviser

Public Procurement Authority, TURKEY