A Brief Overview of Turkish Public Procurement Statistics in 2016
The overall value of public procurement was 173,7 billion TL (57,5 billion USD) in 2016. This amount is approximately 6,6 % of Turkish GDP of 2,59 billion TL (current prices) in 2017. Most of this amount was spent based on the Public Procurement Law (PPL) no. 4734, which is the main legal piece regulating public procurement in Turkey.
The allocation of 155,6 billion TL of tenders conducted according to the PPL is shown in the chart below. 51% of the contract value was spent for construction. More than goods, services and consultancy combined. This is a reflection of Turkish economic and development policy that is extensively reliant on construction.
Around 81% of 155,6 billion TL of tenders conducted according to the PPL was spent by tenders of open procedures. However, 14% for negotiated procedures is also very high and its share should be decreased.
The reason is simple. As you can see in the chart below, when open procedures are used contract value/estimated cost ratio is low and vice versa when negotiated procedures are used.
A total of 89.319 tenders wer conducted according to the PPL in yeear 2016, by a total of 12.300 contracting entities. Most contracting entities belong to central government (ministries, universities, social security institutions) as can be seen on the chart below.
The allocation of procurement under the PPL tenders and exemptions among contracting entity types are shown on the chart below. 44% central government and 36% local governments (municipalities and special provincial administrations). This means even though the number of contracting entities belonging to the central government is high, the value of their procurement is not so high. Also this means that a lot of infrastructure investment is going on at local governments.
More than 99% of contract value was awarded to Turkish contractors. This figure shows that Turkey's public procurement is far away from globalization and internationalization of public procurement markets. However, this figure should not lead misinterpretations as well. Because so many Turkish contractors are affiliates of global companies (like Siemens, Fujitsu, Microsoft, General Electric etc.)
I want to conclude my article with the average number of bids. The average number of bids was highest in construction tenders (7,57) and lowest in services tenders (3,72).
However, the contract value/estimated cost ratio was highest in services contracts (90%) and lowest in consultancy service and construction contracts (75%). This is a clear illustration that as competition (the number of bids) increase, public procurement costs decrease and public saves.
Umit ALSAC
Public Procurement, E-procurement and EKAP Consultant
Former Public Procurement Expert at the Turkish Public Procurement Authority
ualsac@gmail.com
ualsac@gmail.com
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