CMS Expert Guide: Right Bidding vs Bid Rigging in Turkiye

  1. Which legislation regulates: (i) the bidding process; and (ii) bid rigging in your country? Please provide brief details.
  2. What sanctions are envisaged for bid rigging and which authority can impose these? Can the awarded contract be considered null and void? Can bidders be excluded from the process and at which stage and under what circumstances?
  3.  Can a decision by your national competition authority (NCA) finding an infringement (for bid rigging or any other cause) result in a tender ban (i.e. exclusion for future bidding processes)? If yes, what is the duration of the tender ban and when does it start (e.g. does it start even if the NCA decision is challenged before a court)? Is there a possibility to be exempted from the tender ban before the expiry of its full duration (e.g. self-cleaning) and under what circumstances?
  4.  Are there any guidelines from your national competition authority (NCA) for combatting bid rigging? Are there any guidelines on lawful joint bidding/consortia in the tender process? Please provide brief details.
  5. How many bid rigging proceedings were opened from 2020 to 2022? How many bid rigging decisions were issued from 2020 to 2022?
  6.  What is the percentage of bid rigging cases to the overall number of cartel cases in each year from 2020 to 2022?
  7.  What is the total amount of fines imposed for bid rigging in each year from 2020 to 2022?
  8.  Does leniency happen in bid rigging cases in your country?
  9.  Is there criminal liability for bid rigging in your country?
  10.  Is bid rigging an enforcement priority for the NCA in your country?
  11.  Which sectors are mostly affected by bid-rigging investigations in your country in the last ten years?
  12.  Any other interesting information/statistics/cases concerning bid rigging. 

1.Which legislation regulates: (i) the bidding process; and (ii) bid rigging in your country? Please provide brief details.

The main legislations for bidding processes under Turkish law are the Public Procurement Law No. 4734 (“Law No. 4734”), the Public Procurement Contracts Law No. 4735 (“Law No. 4735”) and the State Procurement Law. There is also numerous secondary legislation that provides further details on public procurement procedures.

Whilst Law No. 4734 and Law No. 4735 stipulate banned actions and behaviours including bid rigging, and outline administrative liabilities and sanctions related to them, criminal liabilities and sanctions are regulated under the Turkish Penal Code. Additionally, the Law on the Protection of Competition (the “Competition Law”) addresses administrative fines and civil liability for competition infringements, which can also be incurred through bid rigging schemes.

2. What sanctions are envisaged for bid rigging and which authority can impose these? Can the awarded contract be considered null and void? Can bidders be excluded from the process and at which stage and under what circumstances?

Persons who are found to have engaged in banned behaviour or actions regulated under Law No. 4734 and Law No. 4735 will be prohibited from participating in any tenders arranged by any administrative institution and organisation in Türkiye for from one year to two years, depending on the nature of their actions.

Those who are found to have engaged in banned behaviour or actions during or after a bidding process will be prohibited from participating in the relevant tender and other tenders that will be arranged by the same administration until a countrywide tender ban order enters into force.

A countrywide tender ban order is issued within the following 45 days after the determination of the banned action and such orders are published in the Official Gazette of Türkiye. The Public Procurement Authority (the “PPA”) tracks and records these orders.

Persons who have been prohibited from participating in tenders can be checked on the Electronic Public Procurements Platform (the EKAP (Elektronik Kamu Alımları Platformu) - Yasaklı Sorgulama (kik.gov.tr)).

The authorities responsible for prohibiting bidders from participating in tenders include the tenderer and contracting ministry, the tendering official if their relevant administration does not associate with any ministry, the Ministry of the Interior on behalf of provincial administrations and their relevant directorates, and the Ministry of the Environment on behalf of municipalities and their relevant directorates.

According to Law No. 4735, the awarded contract will be terminated by the relevant administration when the banned actions of a contractor are determined during the implementation of the contract. In such cases, performance guarantees and collateral guarantees related to the terminated awarded contract will be cashed out and registered as revenue by the administration.

If the banned actions of a contractor are determined after the execution of the contract, the same procedure applies. However, provided that 80% of the project has already been completed and the completion of the project is in the public benefit, if:

  1. there is insufficient time to carry out a new tender process for the remaining portion of work due to the urgency of the matter;
  2. it is unfeasible to have a different contractor carry out the contract; and
  3.  the contractor has not engaged in actions or behaviour that would prevent the completion of its remaining obligations,

the administration may request that the contractor to complete the work and fulfil its obligations under the contract.

Contractors are liable to indemnify damages that the administration suffers because of the termination of the contract.

Banned actions or behaviours may also be criminally prosecuted under Article 235 of the Turkish Penal Code. Those facing criminal prosecution are banned from participating in tenders until a final court decision is issued.

Article 4 of the Competition Law, on the other hand, provides the basic principles of cartel regulations, which can also apply to bid rigging schemes. In the event of proven cartel activity, the Competition Board may impose penalties on companies of up to 10% of their Turkish turnover generated in the financial year preceding the date of the decision to fine them. 

3. Can a decision by your national competition authority (NCA) finding an infringement (for bid rigging or any other cause) result in a tender ban (i.e. exclusion for future bidding processes)? If yes, what is the duration of the tender ban and when does it start (e.g. does it start even if the NCA decision is challenged before a court)? Is there a possibility to be exempted from the tender ban before the expiry of its full duration (e.g. self-cleaning) and under what circumstances?

The tender ban orders that can be issued by authorised administrations without the need of a court decision are detailed in the answer to question 2.

Various procedures and actions taken during the bidding process can be appealed to the PPA by the candidates, bidders or potential bidders who claim that they have suffered a loss of right or damage or likely to suffer a loss of right or damage due to unlawful procedures or actions. However, tender ban orders issued by administrations cannot be appealed to the PPA. Whilst the PPA does not have the authority to impose a tender ban because of appeals made to it, it can notify the relevant administration in order them to take necessary steps such as issuing a tender ban and the PPA can also file a criminal complaint with the public prosecutor. 

To request the cancellation of a tender ban order issued by an administration, bidders can appeal to administrative courts. However, filing a lawsuit does not prevent the enforcement of the order, and claimants should also request a suspension of the execution order from the court for the tender ban to be ineffective.

Please refer to the answers to question 2 and question 9 for information on the duration of the process.

4. Are there any guidelines from your national competition authority (NCA) for combatting bid rigging? Are there any guidelines on lawful joint bidding/consortia in the tender process? Please provide brief details.

The Competition Authority has not issued any guidelines, however bid rigging and lawful joint bidding/consortia in the tender process are regulated under the primary and secondary legislation of public procurement. Joint bidders, consisting of one or more individuals or legal entities, can participate in tenders through either a joint venture or consortium. The joint bidders may submit a bid for any tender for which they meet the eligibility and qualification requirements as specified in the tender documents. However, the tendering administration may prohibit consortium bids in certain cases, such as when the work to be performed requires diverse expertise. At the tender stage, the tendering authority may require proof of a formal agreement between the joint bidders establishing the joint venture or consortium.

5. How many bid rigging proceedings were opened from 2020 to 2022? How many bid rigging decisions were issued from 2020 to 2022?

This information cannot be obtained through official reports. However, the PPA’s annual reports do contain the number of individuals and legal entities that have been banned from participating in tenders.

  • The number of bans that was recorded in 2020 and active on the list as of 31 December 2020 was 3,572.
  • The number of bans that was recorded in 2021 and active on the list as of 31 December 2021 was 3,906.

The annual report for 2022 has not been published.

6. What is the percentage of bid rigging cases to the overall number of cartel cases in each year from 2020 to 2022?

This information is unavailable.

7. What is the total amount of fines imposed for bid rigging in each year from 2020 to 2022?

This information is unavailable.

8. Does leniency happen in bid rigging cases in your country?

Leniency is governed by the Regulation on Active Cooperation for Discovery of Cartels (the “Regulation on Leniency”) and the Competition Authority provides a detailed guide on the Regulation on Leniency. The Regulation on Leniency defines cartels as agreements restricting competition or concerted practices between competitors for fixing prices; allocation of customers, providers, territories, or trade channels; restricting the amount of supply or imposing quotas and bid rigging. The leniency programme is available to cartel members and members can benefit from it within the scope of the sanctions imposed under Competition Law. 

9. Is there criminal liability for bid rigging in your country?

YYes. Even after the completion of the project, a criminal complaint can be filed with the public prosecutor to initiate criminal proceedings if the banned actions or behaviours constitute a crime under the Turkish Penal Code. In addition to criminal convictions, individuals undergoing criminal proceedings are banned from participating in any tenders arranged by any administrative institution and organisation for up to three years but at least one year. This tender ban order is issued by the court, as opposed to the tender ban order issued by authorised administrations, and takes effect the day after the administration’s tender ban order expires. Individuals who have been repeatedly convicted for banned actions and behaviours outlined in Law No. 4734 and Law No. 4735, as well as companies in which these individuals own more than 50% of the share capital, are permanently prohibited from participating in tenders by a court decision. According to the Turkish Penal Code, individuals who implement bid rigging schemes can be punished with imprisonment for one to seven years.

10. Is bid rigging an enforcement priority for the NCA in your country?

The PPA is responsible for enforcing the laws and regulations in the context of public procurement and it would be an enforcement priority for the PPA to take action against bid-rigging schemes. However, the investigation and prosecution of bid-rigging cases is not only the responsibility of PPA, but also the duty of other relevant authorities such as the Competition Authority.

11. Which sectors are mostly affected by bid-rigging investigations in your country in the last ten years?

This information is not available.

12. Any other interesting information/statistics/cases concerning bid rigging. 

As per the regulations on public procurement, individuals convicted of crimes outlined in the Anti-Terrorism Law, or convicted of organised crime, or convicted of bribing public officials either domestically or internationally are prohibited from participating in tenders either directly, indirectly, or as subcontractors, on their own or on behalf of others.