Barriers to be lifted on foreign firms in public procurement tenders

Turkey – A new bill currently being drafted by the Public Procurement Authority (KİK) will lift all barriers before foreign interests to bid in public procurement tenders in an attempt to reconcile existing rules with the EU acquis communautaire.

Once implemented after Parliament’s approval, the new law will reduce the number of exemptions in tenders in favor of domestic companies while removing the threshold value in procurement tenders below which foreigners are not allowed to bid, the Anatolia news agency reported yesterday.

However, the bill includes an article that envisages a transition period for the abolishment of the threshold which states that a procurement tender or a design competition may exclude foreigners from participation by putting a specific article in the bid specifications that introduces a threshold value until Turkey becomes a full member of the European Union. Furthermore, public institutions will be able to offer a 15 percent price advantage over domestic companies until full membership.

KİK President Hasan Gül said the bill will facilitate the opening of the negotiation chapter on public procurements. He also noted that the removal of barriers before foreign companies will only be exclusive to companies of European origin. Turkey will both consider international agreements such as the founding treaty of the World Trade Organization (WTO) and mutual agreements with individual countries while deciding on what companies from which countries may bid freely in Turkish public tenders, Gül said.

“There will probably not be one single formula valid for every country. We will surely not introduce any limit on EU members, but for other countries, limitations may continue as long as international agreements allow.” The draft bill also aims to harmonize the definition of the threshold value with that of the EU acquis. In this context, tenders beyond the threshold value will be organized in full compromise with relevant EU directives. However, the draft envisages a more flexible structure for tenders below the threshold value.

According to the bill, the threshold, which will take the approximate appraisal value for the tender as its basis, was determined to be the lira equivalent of 5.15 million euros. This quantity will be 133,000 euros for goods and services procurements of the central administration and for design competitions. On the other hand, the amount will be 206,000 euros for goods and services procurements and design competitions of local administrations.

Similarly, the threshold value will be 206,000 euros for the procurements of research and development and all relevant design competitions.

The bill also removes exceptions to a large extent. The only fields in which exceptions will continue to favor Turkish companies will be procurements in defense, emergency, radio and television and public telecommunications services.

Meanwhile, KİK is also working on another draft bill to regulate procurements in energy, water, transportation and mail services. This bill, which is expected to be brought to Parliament’s agenda in the next year, aims to introduce more flexible procurement methods in these sectors.

Article Today’s Zaman