Contracting out of Public Services in Turkey
There is a well-known type of privatization model
called contracting out. In fact,
this type of privatization can be classified as the preliminary step of
privatization. It is a preliminary step since it doesn’t involve sales of
public assets or full delegation of state responsibilities. In this type,
various services and works are contracted out to private contractors due to
some apparent advantages of this approach and weaknesses of the public sector.
The most cited advantage of contracting out is efficiency and effectiveness. If
a public service or works is contracted out, it is expected that the private
contractor, who is chosen after competitive bidding, will be able to fulfill
the public need with lower amount of resources (personnel, financial or
capital) and higher quality (satisfaction of end users who are either citizens
or public administration and institutions themselves).
The
intensity of contracting out of public services increased substantially since
the beginning of this millennium. Turkey has not been an exception in this
regard. With the enactment of the Public Procurement Law No.4734 (PPL) in 2002,
the main law regulating public procurement in Turkey, this trend found a legal
background. Considering its advantages briefly mentioned above, Turkish public entities, both at the
central level and local level, started to contract out many public services.
I will classify the type of contracted out public services below according to
the ends they are supposed to meet:
-
- Services contracted out to meet needs of either public
entities themselves or staff (civil servants) of public entities:
In
this type, public entities contract out services that are needed for daily
management of their offices. Citizens whom the public entity serves are not
anyway involved in this process. They are not beneficiaries of these services.
Typically beneficiaries of such services are staff of public entities. Examples
of such services include cleaning of
office buildings, meal preparation
and delivery services (generally lunch) for staff, private security services to control exit and entry into public
entity buildings, transportation
services for staff, rental services to
rent vehicles that will be used in daily operations of public entities. These services are ones that are most
commonly contracted out in Turkey. There is little doubt about advantages
of contracting out of this kind of services. For example, if meal preparation
is contracted out, the public entity doesn’t have to manage kitchens and cooks.
Or if transportation services are contracted out, there is no need for public
entity to buy buses or minibuses. Also, staff is transported to public entity
on time so their working times are increased due to elimination of tardiness.
-
Services contracted out to meet needs of citizens whom
the public entity serves but indirectly:
In
this type, public entities contract out some services that were traditionally
performed by themselves, but due to efficiency expectations or due to their
technical incapability (e.g. lack of technical staff), selected for contracting
out. The citizens whom the public entity is supposed to serve are not directly
faced with contractors or contractor staff in this case. But, they are somehow
affected by end products of contractors. These services are generally
consulting related. Some examples are software
development, preparation of plans,
maps or projects for construction projects, training of public entity staff so that they can serve better for
needs of citizens, medical testing
services. For example in the case of software development, public entities
salary and wage structures and regulations don’t attract enough number of
software engineers to work as staff of public entities. In order to meet their
software needs, public entities contract out software development services to
private contractors who hire talented engineers at higher pay rates.
-
Services contracted out to meet directly needs of citizens
whom the public entity serves:
In
this type, public entities contract out services that are their
responsibilities to citizens who they serve. This way, contracting entities
directly relegate their traditional responsibilities to third party private
contractors. Again, the primary motive behind this phenomenon is efficient and
timely meeting of citizen needs. Examples of such services are garbage collection services, pavement and road cleaning services, call center services, meal preparation and delivery services
for citizens who are beneficiaries of services rendered by the public entity (e.g.
for patients staying at hospitals), scanning
of metering devices for preparation of utility bills (water, gas,
electricity), firefighting services,
data entry services (e.g. the first
contact point at hospitals where patient information are recorded). This type of contracting out is the most
debated one. Because, these are services traditionally performed by public
entities themselves under their legal rights and responsibilities. However,
after contracting out there is a third party, called contractor, between public
entity and citizens. In cases of malpractice, responsibility issue is difficult
to determine. In legal suits related to this kind of services, disputes become
so complicated. Particularly in Turkey, constitutionality of this type of
contracting out is disputed. Because, the 128th article of the
Turkish Constitution stipulates that primary duties pertaining to public
service have to be performed by civil servants. Each service contracted out has
to be examined in this regard as well. However, the approach in Turkey has been
namely writing down public services that can be contracted out into laws. For
example, the law on municipalities lists kinds of services that can be
contracted out by municipalities. However, this fact does not end the
discussion of constitutionality debate.
According
to the 2016 statistics of the Public Procurement Authority, the total of public
services contracted out was around 18,2 billion USD. This amount is 31,7% of
total public procurement of 57,5 billion USD. This figure is likely to increase
in coming years as public entities contract out an increasing number of
services under their responsibilities. However, this fact is likely to bring
about new problems which will be my next articles subject.
Umit ALSAC
Public Procurement, E-Procurement and Public Procurement Contracts Consultant
Former Public Procurement Expert at the Turkish Public Procurement Authority
ualsac@gmail.com
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