IS CORONAVIRUS A FORCE MAJEURE EVENT UNDER PUBLIC PROCUREMENT CONTRACTS? (APRIL 2020)

The Public Procurement Contracts Law numbered 4735 (“Law”) explicitly regulates the force majeure event and its criteria, which is not similar under the provisions of Turkish Code of Obligations.  

It has been regulated in Article 10 of the Law that natural disasters, legal strikes, general epidemics, partial or general mobilization announcements and other similar situations to be determined by the Public Procurement Authority are accepted as a force majeure event. Accordingly, it can be said that the coronavirus (Covid-19), declared as a pandemic by the World Health Organization, is a force majeure event pursuant to afore mentioned article of Law.  

In case of a force majeure event the following conditions must be fulfilled to be entitled to time of extension, termination of the contract and other results;  

  • The force majeure event shall not be originated from any failure of contractor,
  • The force majeure event must prevent fulfillment of the commitment under the contract,
  • The contractor's attempts to prevent such situation must be inadequate,
  • The contractor should notify the administration in writing and submit certifying documents s to be provided from the competent authorities within twenty days following the force majeure event,  

Since the coronavirus (Covid-19) epidemic has a worldwide spread, a series of new legal regulations have entered into force. One of the such legal regulations is the Presidency Circular, which has been published in the Turkish Official Gazette dated 02.04.2020. The miles stones of the mentioned circular are as follows.                                 

  • The work subject to the tender contract wholly or partially must be suspended temporarily or permanently due to Covid-19,
  • This situation must be certified by contractors,
  • The notice of contractor to be served to related contracting authority is subject to evaluation as per Article 10 the Law,
  • Besides, the evaluation of the Ministry of Treasury and Finance is required before final decision of the related contracting authority.  

As a result; in case the work subject to the tender contract becomes partially or completely or temporary or permanent impossible due to the coronavirus (Covid-19) pandemic, the contractor must notify the related contracting authority, on condition that such notification must be certified with written evidence. Besides, such application of the contractor is also subject to evaluation of the Ministry of Treasury and Finance before granting of time extension or taking other measures such as termination of the contract. However, as can be seen from the regulations, whether the execution of the tender contract is really impossible or not impossible due to the Covid-19 outbreak, will be strictly evaluated by both the Administration and the Ministry of Treasury and Finance. For this reason, in applications to be made by contractors, it is important to provide the documents certifying that force majeure has adverse effect on the tender contract and to prove that legal conditions are fulfilled pursuant to Article 10 of the Law numbered 4735.