1. Turkish Public Procurement Procedures: Health of Competition Ayten Huseyin Georgetown University Research Objective: What are the types of procurement procedures used? What is the relation between the procurement procedure used and the cost of the tender? What are the implications for the infrastructure sector? Background Since adopting electronic procurement in 2008, the Public Procurement Authority of Turkey publishes daily tender announcements and results from the goods, services, infrastructure and consulting sectors. Public procurement in total constitutes approximately 6-7% of Turkey’s GDP, which is unusually low considering its importance. As a comparison, EU’s total procurement makes up around 15-16% of its GDP. This low statistic might be attributed to Turkey’s Public Procurement Law, which, in speculation might have allowed exemptions of contracts for more than $32.5 billion. These large set of exemptions might indicate a negative shift in the health of procurement competition, or corruption. An analysis of procurement procedures based on empirical data can be one of the only reliable methods of testing the health of competition. In this study, we have particularly looked at the infrastructure sector which has constituted between 17-20% of total public expenditures between 2008 and 2013, and is an important tool for economic growth. 1 Procedure Analysis Data for over 25,000 bids in the infrastructure sector have been gathered for 2013. Among 10 different procedure types under infrastructure, open, negotiation and restricted procedures have been chosen as the focus due to frequency. References 1.Emek, Ugur. 1ublic 1rocurement in Infrastructure of Turkey. August 2014 2.Data from Public Procurement Authority. 2014 Procedure types Open : all tenderers may submit their tenders. Optimal for competitive procurement. Invitation/Restricted: tenderers who are invited following pre- qualification by the contracting authority, can submit their tenders. Negotiation: under exceptional circumstances such as unforeseen events, natural disasters, inability to conduct tender procedures immediately due to events relating to defense and security, complexity in the characteristics of the works, negotiation may be applied to invited tenderers either with or without public announcement of procurement. Use of Procurement Procedures* 2 Years200820092010201120122013 open procedure0.810.790.780.660.740.70 restricted procedure0.02 0.040.070.09 negotiated procedure0.100.110.090.060.080.10 Procurement Procedures Used in Infrastructure Tenders in 2013 Data Results MEAN: Although open procedure contained the highest valued contract awarded among the three, its mean valued bid was the lowest. The restricted procedure showed the highest mean, indicating that despite its lower frequency, most of the contracts awarded under this procedure must have had generally higher values. MEDIAN: The median size of bids under restricted procedure is again, the highest, contributing to the inference that most of the contracts awarded under restricted procedure had greater values than contracts awarded under open or negotiation procedure. MAX: Interestingly, the highest valued contract awarded for the year was done under open procedure and was more than 7 times higher than the highest valued contract awarded under restricted procedure. *includes all procurement sectors Conclusions Since 2008, the percentage of procurement under restricted procedure has grown significantly from 2% to 9% in 2013, while the number of open procedure bids have significantly decreased by 10%, indicating decrease in healthy competition. Contracts awarded under restricted competition valued significantly higher than those awarded under open or negotiation procedures. individually than goods or services bids. Despite the significantly large volume of open procedure bids, this study shows that the government prefers to award its highest valued bids under invitation or restricted procedure. Such high concentration of value placed on the restricted procedure where tenderers are pre-selected by government authorities to submit offers indicates decrease in healthy competition.