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Public tender complaint system heavily abused
Public Procurement Authority President Hasan Gül, speaking to a group of reporters, says the current law is hindering the contracting system from running efficiently.
Monday, 11 August 2008 10:21

Public Procurement Authority (KİK) President Hasan Gül has said the public complaint system for tenders is vulnerable to abuse but that a bill calling for a clarification of the complaint mechanism has been sent to Parliament for discussion.

The bill seeks to introduce an application fee for complaints submitted to the KİK system as well as set a due date by which parties are allowed to submit their objections to a tender.
The KİK president was addressing members of the Economy Correspondents Association at the institution's new building in Ankara. He noted that Turkey saw the highest number of tender-related complaints in the world filed, adding that 2,882 complaints were submitted in connection with 60,910 tenders in the first half of this year. One person alone filed complaints in connection with 103 separate tenders in the first six months of the year. Gül, who noted that an individual is entitled to file a complaint by paying YTL 100 for the application documents and YTL 301 for the application fee, said:

"Reports we have received indicate that the right to file a complaint has been made a subject of bargaining. Some have made it their profession to file complaints. They go to the winners of the tender and threaten to file complaints to ensure the cancellation of the tender if they are not paid a certain amount. These people review the tender specifications very carefully and know the procedures very well. For this reason, even if the complaint does not ensure a cancellation, it may delay the initiation of works in relation to the tender for a significant period of time."

Gül noted that under the proposed draft, a complaint against a particular tender would be made three business days before the tender, adding that no complaint would be possible after the tender has been made.

The institution has dismissed complaints on 813 tenders in this period. In regard to 173 tenders, it also ruled that the complaints were not admissible because of prior decisions on the same case.

Gül said Turkey sees the highest number of complaints for tenders, followed by Italy, where only 1,000 complaints were filed so far this year. England sees the lowest number of complaints. Gül noted that the complaint mechanism was connected to the judiciary in England, where only four to five complaints have been filed this year. Noting that the situation in Turkey may be taken as a sign of the effectiveness of the tender system and public confidence in this system, Gül declined to comment on a question asking about the connection between this issue and levels of corruption as well as the issue of confidence in the country.

According to the statistics announced by Gül, 79,096 tenders have been held in the first half of the year. Of these, 67,913 tenders were concluded. Last year, 53,986 tenders were completed in the same period. This suggests that the number of public tenders rose by 25.8 percent this year; the public sector's total purchases amounted to YTL 24.2 billion in the first six months.

While the authorities estimated a total cost of YTL 24.2 billion, the tender agreements came out to YTL 19.7 billion. This means that the public saved a total of YTL 4.5 billion.

The Ministry of Health made the highest number of tenders with 7,344, followed by the Ministry of Defense with 3,667 and the Ministry of Education with 2,581.

As far as public economic corporations are concerned, the mass housing administration spent the most for tenders with YTL 1.5 billion. It was followed by the State Stationary Office with YTL 777 million and the Turkish Electricity Distribution Company (TEDAŞ) with YTL 637 million.

The municipalities held 10,220 tenders in the same period. İstanbul-based municipalities and their affiliate companies ranked first with 3,209 tenders, followed by Ankara municipalities and affiliate companies with 574 and İzmir with 558 tenders.

İstanbul University ranked first among institutions of higher learning with 160 tenders, followed by Süleyman Demirel University with 141 and Hacettepe University with 89.

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