REGULATION ON IMPLEMENTATION OF WORKS PROCUREMENTS

CHAPTER ONE

General Provisions

SECTION ONE

Implementation Principles

Purpose and Scope

Article 1- This Regulation hereby has been prepared to govern the principles and procedures to be applied by the contracting entities within the scope of Public Procurement Law #4734 dd. 04/01/2002 in the works procurements.

This Regulation enacted in relation to the implementation of Public Procurement Law #4734 and Public Procurement Contracts Law #4735 is integral with annexes hereto.

Legal Basis

Article 2- This Regulation has been prepared on the basis of Article 53 of Public Procurement Law #4734.

Definitions

Article 3- The following definitions shall be applicable in the implementation of this Regulation other than the ones set forth in Article 4 of Law #4734:

Threshold Value: (Amended: 08/06/2004 – 25486 Official Gazette/ Art. 1) Refers to the monetary limites defined under Article 8 of Law #4734 and updated under Article 67 of the same Law for use in the application of the provisions concerning the procurement proclamation periods and rules as well as the participation of domestic tenderers solely in works procurements or application of price advantage in favor of the domestic tenderers in the procurements;

Similar Work: Refers to the works that are similar in respect of quality and size with the works or portion of works, which constitute the subject matter of procurement, and that require the same or similar construction procedures and techniques, and that have similar properties with respect to plants, machinery, tools, other equipment, financial power, expertise and organization;

Work Experience Certificate: Refers to the work completion certificate, work status certificate, work supervision certificate and work management certificate that provide the professional experience in the works or similar works, which constitute the subject matter of the procurement, and that are issued, given and evaluated according to the principles and procedures set forth in this Regulation;

Estimated Cost: Refers to the anticipated cost of the works, which constitute the subject matter of procurement, and which is calculated with any kind of price inquiry before holding the procurement exclusive of value added tax and which is indicated in an estimation schedule with the bases thereto, and which are not specified in the procurement and prequalification proclamations, and which are not released to the tenderers or other persons that do not have an official relation with the procurement process.

Basic Principles

Article 4- (Amended: 08/06/2004 – 25486 Official Gazette / Art. 2) The Contracting Entities shall be obliged to ensure transparency, competition, equal treatment, reliability, confidentiality, supervision by public opinion, and that the needs are met at appropriate conditions and in a timely manner, and that the resources are efficiently used.

The goods procurements, works procurements and works procurements may not be held as long as there is not an acceptable natural relation among them.

(Amended: 08/06/2004 – 25486 Official Gazette / Art. 2) The works procurements cannot be divided in parts so as not to be less than the threshold values or the monetary limits or in order not to implement the other provisions set forth in this Regulation.

(Amended: 08/06/2004 – 25486 Official Gazette / Art. 2) Open procedure and restricted procedure constitute basic procedures in the procurements. Negotiated procedure and direct procurement are only possible in the specific cases provided in the Law.

The procurement shall not be opened for any work without any appropriation.

EIA approval certificate is a must for holding the procurement of works requiring the Environmental Impact Assessment (EIA) report as per the pertinent legislation. However, EIA report shall not be required for the works that shall be tendered urgently owing to the natural disasters.

The matters that the contracting entities have to comply with in the works procurements

Article 5- In the works procurements, the contracting entities have to comply with the following matters before holding the procurement:

a) In order to be able to hold the procurement covering more than one year, it is compulsory to make programming to ensure the availability of appropriations in the budgets in different years according to the duration of work. The appropriation stipulated for the first year may not be less than 10% of the project cost, and the parts of appropriations programmed for the subsequent years may not be reduced in the subsequent years.

b) It is essential that the procurement is held in a timely manner, and that the procurement is concluded within the first nine months of the year in the works that cover more than one year and that have the nature of investment (except for the ones to be held owing to the natural disasters) in view of the period when the estimated appropriations can be used.

c) The procurement cannot be held before acquiring the land, and completing the ownership, expropriation and public improvements, where necessary, and drawing up the implementation projects. It is compulsory to hold the procurement by receiving the turn key lump sum tenders in the works with an implementation project. However, the procurement may be held with the preliminary or final design in the works without any sufficient period to draw up the implementation project, and with the final design in the works, for which the implementation project cannot be drawn up since the land and ground surveys are required during the performance of work except for the building works. In these works, the procurement can be held by receiving turn key lump sum tenders for the portions of work, for which the implementation project is performed, and unit price tenders for each item of works in respect of the portions, for which the implementation project cannot be drawn up. The repair works to be performed according to the survey, restoration and restitution projects may be tendered by receiving unit price tenders for each item of works. The requirements of acquisition of land, ownership and expropriation shall not be applicable for the dam, large irrigation, oil and natural gas pipeline projects.

d) In respect of the mass houses projects under the Mass Houses Law #2985, the procurement may be held without applying the provisions set forth in paragraphs five and six of Law #4734 and paragraphs (a) and (b) of Article 62 and irrespective of the requirements of expropriation, ownership, acquisition of land, public improvements and implementation project set forth in paragraph (c) of Article 62. However, in cases where the EIA report is compulsory, such report has to be received before concluding the contract.

e) (Amended: 08/06/2004 – 25486 Official Gazette / Art. 3) Unless approved by the Board, the annual total amount of the expenditures to be made within the monetary limits set forth in paragraph (d) of Article 22 of Law #4734 cannot exceed 10% of the appropriations allocated by the contracting entities to the budget for works. The contracting entities shall take into account the amount of appropriations allocated for the works to be carried out under this Law and allocated in the annual budgets in the works that will be carried out within the said monetary limits.

f) (Annex: 08/06/2004 – 25486 Official Gazette / Art. 3) The proclamation or solicitation cannot be made before preparation of the tender document in the procurements with open and negotiated procedure, and of the prequalification and tender document in the procurements with restricted procedure.

Domestic Tenderer

Article 6- Domestic tenderer refers to the physical bodies that are the citizens of the Republic of Turkey and the legal entity incorporated under the laws of the Republic of Turkey.

In order to be assumed as domestic tenderers, the physical bodies shall submit the copy of identity card evidencing the citizenship to the Republic of Turkey, and the legal entity shall submit the documents evidencing incorporation under the laws of the Republic of Turkey.

The following documents shall be provided to evidence incorporation of the tenderers having the capacity of legal entity under the laws of the Republic of Turkey:

a) Trade registers gazette or the certificate issued by the associated trade registers office indicating the principal office of the company in respect of the companies;

b) Certificate of receipt issued by the relevant governmental office in respect of the Associations;

c) Copy of the register extract or the Official Gazette released to evidence registration to the central register kept by the General Directorate of Foundations in respect of Foundations;

d) Certificate issued by the relevant ministry in respect of the Cooperatives;

e) Certificate issued by the relevant authorities in respect of other legal entity.

(Amended: 08/06/2004 – 25486 Official Gazette/ Art. 4) These requirements shall be applicable for each partner comprising the joint venture separately.

(Amended: 08/06/2004 – 25486 Official Gazette/ Art. 4) The Contracting Entities shall be obliged to require the documents listed above from the candidates or tenderers in relation to being a domestic tenderer in the procurements, in which it is specified that only the domestic tenderers can participate and the price advantage shall be applied in favor of the domestic tenderers.

SECTION TWO

Estimated Cost

Estimated Cost

Article 7- The Contracting Entity determines the estimated cost of the works, which constitute the subject matter of the procurement, according to the principles and procedures set forth in this Regulation before holding the procurement.

The Contracting Entities shall ascertain whether the estimated cost of the works, which constitutes the subject matter of the procurement, is below the threshold value of the procurement or not.

The estimated cost shall be determined on actual basis through detailed amount and price inquiry as per the principles and procedures set forth in this Regulation and indicated in an estimation schedule with the bases thereto.

The estimated cost ascertained by the contracting entities before the procurement shall not be announced and released to the tenderers or other persons that do not have an official relation with the procurement process.

Determination of amounts taken as basis for the calculation of estimated cost

Article 8- Firstly, the following efforts have to be made to determine the amounts taken as basis for the calculation of estimated cost.

a) Land and ground survey: It is compulsory to conduct the land and ground surveys in the works to be tendered by receiving turn key lump sum tenders over the implementation project; and to conduct the possible land and ground surveys in the works to be tendered by receiving unit price tenders over the preliminary and/or final design.

b) Project requirement: It is required to draw up the implementation project for the building works, and the implementation project for the portions of other works, for which the implementation project can be drawn up, and the final design for the portions, for which the implementation project cannot be drawn up, and the preliminary and/or final design for the works, for which there is not sufficient time to draw up the implementation project due to the natural disasters, and calculate the estimated cost on the basis of the said projects.

c) Drawing up location lists: The location lists shall be drawn up to indicate the names and locations of the items within the scope of works and constituting basis for drawing up the estimated costs on the basis of the preliminary and final designs and implementation projects.

d) Drawing up bills of quantities: The bills of quantities shall be drawn up in the forms of work items and/or work groups for the works that shall be procured by receiving the turn key lump sum tenders, and in the forms of work items for the works that shall be procured by receiving the unit price tenders in order to determine in which portion and what quantity of works shall be performed according to the dimensions and tariffs in the projects and location lists concerning the works, which constitute the subject matter of procurement.

e) Repair works, for which the implementation project cannot drawn up: In respect of the repair works, for which it is impossible to draw up the implementation projects, the estimated cost shall be calculated according to the location lists and bills of quantities issues on the basis of the surveys conducted.

f) Drawing up unit price and construction tariffs: In respect of works to be procured by receiving unit price tenders on the basis of the preliminary and/or final designs, the contracting entities shall draw up unit price tariffs that describe the name of item, construction requirements, type of measure, unit, the factors inclusive and exclusive of the unit price technically without causing any dispute.

In respect of the turn key lump sum works, the technical descriptions and specifications of the construction items or the work groups shall be defined on the basis of the implementation projects and location lists.

Determining prices and market values taken as basis for calculation of estimated cost

Article 9- The estimated cost for the works, which constitute the subject matter of procurement, shall be determined using one or more of the following items and making the other necessary inquiries:

a) Estimates costs, market values and unit prices suitable for the nature of works as determined by the public authorities;

b) Prices determined by the relevant chambers of profession, universities or similar organizations;

c) Construction costs, prices and values quoted by the persons and entities acting as contractors or subcontractors and that are experienced in their respective fields;

d) Determination of prices by the contracting entity based upon the market inquiry.

In cases where the construction estimated costs, unit prices, market values and the price analyses of the public authorities are not in consistent with the nature of the works or items to be performed, and do not reflect the technological stage and/or actual market values concerning the construction technique of works, the said prices and analyses shall not be taken as basis, but the real cost analyses and determinations to be made by the contracting entity shall be applied.

In price determinations based upon the market inquiry on the basis of the market values of the whole work, work group, item and material, the appropriate prices shall be determined by receiving prices or proforma invoices from the manufacturers, producers, main distributors, wholesalers, authorized sellers and sellers of the works, constructions and/or materials and making the necessary comparisons. The matter whether the prices in hesitation are in consistent with the actual market values or not shall be clarified with the written market values to be obtained from the Chambers of Commerce and/or Industry.