The Presidency of the Republic of Turkey published force majeure guidelines for public tender contracts (“Guidelines“) in the Official Gazette dated April 2, 2020, No. 31087. The guidelines detail the procedures for contractors’ force majeure notifications.
What do the Guidelines say?
The Guidelines cover contracts executed under the Public Tender Law No. 4734 (along with its exceptions). The Guidelines indicate that an application should be made to the contracting authority documenting the impossibility of performance, if the performance of a contract is not possible due to the COVID-19 outbreak, temporarily or permanently, in part or in whole.
The contracting public authority will review these applications of impossibility of performance under Article 10 of the Public Tender Contract Law No. 4735, which regulates the circumstances for force majeure events and other regulations. The Guidelines also require contracting public authorities to consult with the Ministry of Treasury and Finance before issuing a decision. During this review, the contracting public authority will categorize an outbreak as a force majeure event when:
- the event is not caused by the contractor’s fault;
- the event prevents the contractor from performing the contract; and
- the contractor is unable to remove the effects of the event.
Pursuant to the contracting public authority’s review, (i) the duration of the contract may be extended to allow the performance of contract, or (ii) the contract may be terminated. The Guidelines do not provide any clarification on whether the public authority’s decision is limited to the contractor’s request.
On a separate note, Article 10 of the Public Tender Contracts Law No. 4735 states that a contractor should apply to the relevant public authority in writing within 20 days after the force majeure event occurs.
Please refer to https://www.esin.av.tr/coronavirus-desk/ for our client alerts regarding the legal consequences of COVID-19 on public procurement and other areas.