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Impact of COVID-19 Outbreak on Public Procurement Contracts

Overview

Circular issued by the Presidency on the “Impact of COVID-19 Outbreak on Public Procurement Contracts” numbered 2020/5 and dated April 1, 2020 (“Circular”) has been published on the Official Gazette dated April 2, 2020 and numbered 31087. With the Circular, to summarize, the option of termination and time extension of the contract in respect of the public procurement contracts influenced by the COVID-19 outbreak (New Type of Coronavirus), which increases its impact in Turkey and around the world with each passing day, has been arranged.

Amendment Brought by the Circular

According to the Circular, option of termination or time extension of the contract has been brought for the contracts signed as a result of tenders carried out within the scope of Public Procurement Law (“Law”) (including exceptions) and regulations exempted from the Law, due to COVID-19 outbreak, in case it becomes impossible for contractor to carry out the work temporarily or permanently, partially or completely.

Application Procedure

In the event that the abovementioned situation is realized, this situation will be certified by the contractor and an application will be filed to the administration, which is party to the contract.

Evaluation by the Administration

Applications to the administration will be evaluated in accordance with the Article 10 entitled “Force Majeure” of the Law on Public Procurement Contracts (“PPC Law”) and other provisions relating to force majeure in the legislation.

The administration, which is a party to the convention, will receive the evaluation of the Treasury and Finance Ministry before the decision is taken.

If the following conditions are met together in the evaluation to be made by the administration, decisions may be made by the administration to grant a time extension or to terminate the contract:

  • The present situation did not arise from a defect caused by the contractor,
  • The present situation prevents the contractor from fulfilling its contractual obligations,
  • The contractor cannot afford to remove this obstacle.

Evaluation

With the Circular, any doubts may arise as whether the COVID-19 outbreak can be assessed under the “General Pandemic” included in Article 10/1-c of the PPC Law, has been resolved. Additionally, it has also been noted that the procedure in Article 10/2 of the PPC Law has been repeated in the procedural section on the force majeure, in the Circular.

In this context, it is thinkable to say that the Circular is not regulatory, but descriptive and interpretive.

Circular issued by the Presidency on the “Impact of COVID-19 Outbreak on Public Procurement Contracts” numbered 2020/5 and dated April 1, 2020 can be accessed here.

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Adar UÇAR – Attorney at Law

Uçar Law & Consultancy Office

 

This legal memorandum is prepared by Uçar Law & Consultancy Office for information purposes only, and the information and visual materials contained in it cannot be used, reproduced, published, transmitted to a third party or translated without prior written permission from us. This legal memorandum is not a comment or legal opinion and was prepared on 02/04/2020 and our attorney’s office is not responsible for its failure to update continuously.