Etimesgut Municipality: Pre-election tender irregularities

In this article, we continue our examination of tenders conducted before elections in municipalities where the mayoral office has changed hands. As we will explain in detail in the tenders analyzed below, long-term contracts signed before elections not only violate regulations but also serve to tie the hands of the newly elected mayor, rendering them unable to perform their duties. Furthermore, the necessity of examining these tenders in detail is evident even from the irregularities on paper.

Article 67 of Law No. 5393, titled 'Service commitments extending to future years,' states: 

In the municipality, with the decision of the municipal council, and in municipal subsidiaries, with the decision of the authorized body, services such as park, garden, greenhouse, median, sidewalk, and pool maintenance and repair; vehicle rental, supervision, cleaning, security, and catering services; machinery-equipment maintenance and repair works; computer systems and switchboards and electronic information access services; health-related support services; fair, bazaar, and exhibition services; services related to dams, treatment, and solid waste facilities; channel maintenance and cleaning, infrastructure and asphalt construction and repair, traffic signaling and lighting maintenance, meter reading and meter removal-installation works; public transportation and transit services; and the operation of social facilities may be outsourced to third parties through tenders, provided that the duration does not exceed the end of the sixth month following the first local government general elections. it is stated. 

The purpose of Article 67 of Law No. 5393 is to allow the newly elected mayor to implement the 2024-2028 strategic plans, which form the institutional strategies for the management style and the projects promised during the election period.

In order to make service commitments extending to future years;

1-There must be a decision by the municipal council

2-Permitted Tender Subjects 

Maintenance and repair of parks, gardens, greenhouses, medians, sidewalks, and pools

Vehicle rental, supervision, cleaning, security, and catering services

Machinery and equipment maintenance and repair works

Computer systems, switchboards, and electronic information access services

Health-related support services

Fair, festival, and exhibition services;

Services related to dams, treatment plants, and solid waste facilities

Services related to Sewer Maintenance and Cleaning, Infrastructure and Asphalt Construction and Repair, Traffic Signaling and Lighting Maintenance, Meter Reading, and Meter Removal-Installation

Public Transportation and Transit Services; 

Works related to the operation of social facilities

SINCE 31.03.2024 IS THE DATE OF THE GENERAL LOCAL ADMINISTRATION ELECTIONS, IT CAN BE TENDERED UNTIL 30.09.2024.

In the examination conducted within the framework of Article 67 of Law No. 5393 regarding the works tendered by the ETİMESGUT MUNICIPALITY; 

FOURTH FINDING

EXPENDITURES MADE FOR THE 100TH YEAR REPUBLIC CULTURE AND ART CENTER LOCATED AT ERYAMAN NEIGHBORHOOD, BLOCK 46484, PARCEL 2

With Tender Registration Number 2022/1113927 "100th Year Republic Culture and Art Center Completion Construction" With a contract value of 112,000,000.00 Regarding the work carried out between 02.01.2023 and 30.10.2023 by the "Cansu Yapı Turizm Otomotiv San. ve Tic. Ltd. Şti., Ays Yıldız Yapı İnşaat Madencilik Otomotiv Harita Nakliyat Sanayi ve Tic. Ltd. Şirketi Joint Venture";

1- It is a turnkey lump-sum contract, and the contractor submitted a bid for the entire project based on the implementation projects and their corresponding lists of premises included in the tender documents.

2- In the documents for the "100th Year Republic Culture and Art Center Completion Construction" with tender registration number 2022/1113927;

There is a provision.

The works with tender registration numbers 2024/236441 for "100th Year Republic Culture Center (CKM) Movable Furniture Procurement" and 2024/174949 for "Procurement of Furnishing Materials to be Used in the Arrangement of the 100th Year Republic Culture Center Foyer Area" must be examined, as there is a risk of duplicate procurement in these purchases. The term 'duplicate procurement' refers to the risk of providing an advantage to the initial contractor by having work performed under this tender that should have been paid for under a different scope.

3- In the documents and project for the "100th Year Republic Culture and Art Center Completion Construction" with tender registration number 2022/1113927, there is a provision for planting 735 trees for landscaping. Since the contractor submitted a bid based on the project, and therefore the planting of the trees was included in the contractor's price;

Since the works with tender registration numbers (İKN) 2023/950382 'Republic Square Structural Landscape Construction Work' and 2023/1321332 'Procurement of Plants and Landscape Materials to be Used in the 100th Year Republic Cultural Center Landscape Works' were conducted via negotiated procedure, the tender documents could not be found on EKAP. A careful examination of the tree planting and manufacturing works is required.

In the document for tender registration number 2022/1113927 '100th Year Republic Culture and Arts Center Completion Construction'; the file under the electrical heading contains the e-06-100th year CKSM sound system – CCTV - TV installation plan and the e-06-100th year CKSM-theater hall installation plans. Since the contractor submitted a bid based on the project;

It can be concluded that the total of 10,866,000 TL (9,446,000.00 + 1,420,000.00) paid to firms due to the TENDERING of 2023/441204 İKN '100th Year Republic Culture and Arts Center Professional Sound and Light Systems Procurement' AND 2023/754914 İKN 'Procurement of 4 Items of Professional Sound and Light Materials' may constitute PUBLIC LOSS. The matter must be urgently examined by the relevant authorities.

FIFTH FINDING

IN THE EXAMINATION OF VEHICLE RENTAL SERVICE PROCUREMENT WORKS FOR THE PURPOSE OF WASTE COLLECTION, TRANSPORTATION, AND MECHANICAL SWEEPING OF STREETS, AVENUES, SQUARES, AND MARKETPLACES 

5.1. FINDING

The tender with registration number 2023/1024939 for '12-Month Vehicle Rental Work for Waste Collection, Transportation, and Cleaning Services Between 01/01/2024-31/12/2024' is subject to Article 67 of the Municipal Law No. 5393, titled 'Service commitments extending over future years'.  In accordance with (Vehicle Rental, Supervision, Cleaning service tender), the tender should have been issued so as not to exceed the date of 30.09.2024, which is the local government election date of 31.03.2024 + 6 months (The tender period for the work in question was set as 01.01.2024 - 31.12.2024). The tender in question was conducted in violation of the law.

5.2. FINDING

Regarding the tender with IKN (Tender Registration Number) 2020/528856 for the “36-MONTH COLLECTION AND TRANSPORTATION OF WASTE, AND MECHANICAL SWEEPING OF STREETS, AVENUES, SQUARES, AND MARKETPLACES BETWEEN 01/01/2021 AND 31/12/2023, INCLUDING VEHICLE RENTAL SERVICE PROCUREMENT”

Article 7, titled “QUALIFICATION CRITERIA,” of the Administrative Specification states:

7.5.2. It is required to certify, via a notary-certified report, a report from a sworn-in financial advisor, a report from an independent accountant and financial advisor, or a report from an independent accountant, that the following are registered in the license, fixed asset, or depreciation ledger: 1 garbage truck with at least 15+1.5 m3 capacity, 2019 model or newer; 1 crane-equipped garbage truck with at least 15+1.5 m3 capacity, 2019 model or newer; 1 vacuum road sweeper with at least 8 m3 capacity, 2019 model or newer; 1 mobile jet-type container washing vehicle, 2019 model or newer; and 1 open-bed dump truck with at least 5 m3 capacity, 2019 model or newer.”

With this regulation, bidders participating in the tender are required to:

In Article 41 of the Service Procurement Tenders Implementation Regulation, titled “Documents regarding machinery, equipment, and other hardware and capacity report” “(1) (Amended paragraph: 30/09/2020-31260 Official Gazette/Art. 4, effective: 20/10/2020) Information regarding the machinery, equipment, and other gear deemed necessary for the execution of the work is included in the draft contract. However, the aforementioned machinery, equipment, and other gear cannot be determined as a qualification criterion...With this provision, it has been decided that 'OWN PROPERTY' cannot be requested in service tenders.

The tender must be canceled as it is contrary to Article 5 of Law No. 4734 (as it would not ensure competition).

5.3. FINDING

In Article 25.3.1, titled 'OTHER EXPENSES INCLUDED IN THE BID PRICE,' of the Administrative Specification for the tender with IKN 2020/528856, titled 'VEHICLE RENTAL SERVICE PROCUREMENT FOR THE COLLECTION AND TRANSPORTATION OF WASTE, AND THE MECHANICAL SWEEPING OF STREETS, AVENUES, SQUARES, AND MARKETPLACES FOR THE 36-MONTH PERIOD BETWEEN 01/01/2021 AND 31/12/2023': 'Contract expenses and general overhead costs related to the tender (contract stamp duty, tender decision stamp, and Public Procurement Authority share) shall be calculated at a rate of 1.567% of the offered price and included in the unit bid price' provision and in the unit price bid schedule;

In the form of bidders were requested to submit bids for Contract Expenses (Public Procurement Authority share, tender stamp duty, and contract decision stamp total).

As is known, the Regulation on the Implementation of Service Procurement Tenders under the heading "Calculation and updating of the estimated cost" in Article 9.3 states: "The general total amount obtained by multiplying the quantities related to the work items or work groups necessary for the realization of the service by the determined prices is determined excluding contract expenses, general expenses, and VAT. To this amount, considering the nature of the work, a contractor profit of no more than 7% (Amended phrase: 25/01/2017-29959 Official Gazette/Art. 1) is added. This amount is added to the contract expenses and general expenses calculated over the general total amount determined excluding profit, and the estimated cost is calculated. After the calculation table regarding this is signed by those who prepared it, it is attached to the tender approval document and submitted to the tender authority. (Added: 16/7/2011-27996 Official Gazette/Art. 1) It is mandatory to show the profit amount foreseen for the contractor in this table." it is stated that contract expenses are included in the estimated cost under the provision.

Furthermore, the documents listed in Table (1) attached to Law No. 488 are subject to Stamp Duty. Additionally, transactions related to the renewal, extension, modification, or transfer of the provisions of documents subject to tax are also subject to Stamp Duty.

To determine the tax applicable to a document, the nature of that document is examined, and the tax specified in Table (1) is applied accordingly.

In accordance with the provision in Article 3 of the Stamp Duty Law No. 488, which states, 'The taxpayer of the stamp duty is the party signing the documents. Individuals pay the stamp duty for documents related to transactions between official offices and individuals,' it is evident that the contractors are the ones responsible for paying the stamp duty (TENDER STAMP DUTY, CONTRACT DECISION STAMP, etc.) (a similar provision applies to the Public Procurement Authority (KİK) share). Therefore, the inclusion of 'contract expenses (total of KİK share, tender stamp duty, contract decision stamp)' in the bid schedule will cause PUBLIC LOSS.

Whatever bid the contractor submitted for the item in the 23rd row, including price differences, this amount should not be paid to the contractor. 

6. FINDING

-2023/1260588 Goods – Open: 2024 BREAD PROCUREMENT AND DISTRIBUTION WORK

- 2022/1391552 Goods – Open 2023 BREAD PROCUREMENT

- 2022/304787 Goods - Open BREAD PROCUREMENT

- 2019/512109 Goods – Open BREAD PROCUREMENT

It has been observed that the BREAD PROCUREMENTS (tenders with the registration numbers shown above) were purchased by the municipality from its own company, "AHİKENT TAAHHÜT TİCARET TEK. YAT. LTD. ŞTİ."

 When the status of AHİKENT TAAHHÜT TİCARET TEK. YAT. LTD. ŞTİ. under the Public Procurement Law is examined;

As can be seen, "Etimesgut Municipality" has been appointed as the manager of the company.

As is known, in the decision of the 10th Chamber of the Council of State of the Republic of Turkey, E. 2001/4312 K. 2003/5197   dated 16.12.2003;

“...it is inconsistent with the principles set forth in Article 2 of Law No. 2886, as well as the provisions of Article 6, for mayors, who have the authority to approve or cancel tenders in their capacity as authorizing officers, or those tasked with preparing, executing, finalizing, and auditing municipal tender procedures, their spouses, their blood relatives and relatives by marriage (up to the second degree), and municipal companies where these individuals serve on the boards of directors or supervisory boards (excluding joint-stock companies where these individuals do not serve on the boards), to participate in tenders opened by the same municipalities.” This statement clarifies that municipal companies are prohibited from participating in municipal tenders. 

The relevant provision in Article 11 of the Public Procurement Law No. 4734 states: “Foundations, associations, unions, funds, or similar organizations established within the administration conducting the tender or related to the administration for any purpose, as well as companies in which these organizations are partners, cannot participate in the tenders of these administrations.”

On the other hand, Article 11 of the law also includes the following: “c) Individuals who are the tender authorities of the administration conducting the tender and those serving on boards with such authority. d) Those tasked with preparing, executing, finalizing, and approving all kinds of tender procedures related to the subject of the tender for the administration conducting the tender. e) The spouses of the individuals mentioned in clauses (c) and (d), their blood relatives up to the third degree, their relatives by marriage up to the second degree, as well as their adoptees and adopters.” This provision prohibits these individuals from participating in the tenders of the relevant administrations. 

The same Council of State decision states that if a municipal company, in which officials conducting tender procedures serve on the board of directors or supervisory board, participates in a tender held by that municipality, it means the party conducting the tender and the party participating in the tender are the same; it is further expressed that this situation prevents the tender from being conducted in accordance with the principles of transparency and impartiality, and eliminates equal competition conditions.

IN CONCLUSION, since Etimesgut Municipality was appointed as the Company Manager for 'AHİKENT TAAHHÜT TİCARET TEKNİK YATIRIM LİMİTED ŞİRKETİ', the participation of Etimesgut Municipality in tenders constitutes a violation of Article 11 of Law No. 4734.

Unfortunately, the result remains the same in this installment of our research series, where we examine tenders conducted by municipalities before elections. We continue to encounter hastily conducted tenders, tender entry requirements determined in violation of legislation, numerous work items whose completion is questionable, and tenders covering the term of the new mayor despite legislation not permitting such actions. The painful part is that Etimesgut Municipality, or the other municipalities we have examined previously, are not alone in this regard. These behaviors, which are contrary to the legislation and ethical values we examine in our articles, have unfortunately become a tradition and are utilized by many municipalities. We will continue these studies in the coming weeks.