image Regulation on the Implementation of Turkish Industrial Cooperation Program Entered into Force

Recent Development

The Ministry of Science, Industry and Technology (“Ministry”) published the Regulation on the Implementation of the Turkish Industrial Cooperation Program (“Regulation”), which entered into force on February 17, 2018.

What Does the Regulation Say?

The Regulation establishes the procedures and principles for the procurement of goods, services and construction works comprising the industrial cooperation practices of innovation, localization and technology transfer in accordance with Article 3(1)(u) of the Law No. 4734 on Public Procurement.

The Regulation introduces the following rules:

• The tendering authorities will base their decisions on factors such as management and maintenance costs, efficiency, quality, technical superiorities, and industry and technology participation requirements in addition to price.

• The tendering authorities will implement an open tender process or tender among specified bidders without imposing any quota in relation to the number of applicants or bidders. The authorities can receive bids only from one applicant due to strategic priorities, national interests, or maintaining standardization.

• Upon the tendering authority’s decision to implement an industrial cooperation program, a procurement group with technical expertise will be established.

• The contractor will carry out the contractor’s obligations within the scope of industry technology participation categories, listed as categories A, B, and C. The contract must not impose any additional financial obligations on the tendering authority or the Ministry.

• Following the completion of works, the contractor must submit to the Ministry a letter of guarantee for 6% of the contractor’s obligation arising from the industry and technology participation contract. The letter of guarantee must be valid for one year.

• If the contractor fails to fulfill its obligations under the agreed terms and within the deadline, 6% of the non-performed obligation will be imposed as a fine.

The relevant tenders announced before the Regulation’s entry into force will be subject to the Regulation on the Procedures and Principles on Industrial Cooperation Project of Procurement of Goods and Services under Article 3(u) of the Law No. 4734 on Public Procurement.

Conclusion

Companies should take into account the rules on the tender process and the obligations of bidders and contractors under the Regulation prior to bidding in relevant tenders announced after the Regulation’s entry into force.