World Bulletin / News Desk
The Foundation to Strengthen the Turkish Armed Forces (TSKGV) has lost its privileged status following a recent decision by the Public Procurement Authority (KİK) that a procurement law applies to the foundation like all other state institutions.
The foundation has shares in 18 military companies, including Turkish Aerospace Industries (TAI), Turkish rocket and missile maker Roketsan and Turkish defense industry giant ASELSAN. The TSKGV is exempted from automatic state auditing and can only be audited in the event of a parliamentary request.
Earlier this year, the foundation announced a tender for the organization of the International Defense Industry Fair (IDEF), which is scheduled to be held in İstanbul in 2013. The TÜYAP Fair and Exhibition Organization -- which has organized previous IDEFs -- and İstanbul Trade Fairs (ITF) competed in the tender. The ITF proposed to pay $6 million to the TSKGV for the fair, while TÜYAP proposed $5 million. The ITF was expected to win the tender, but TSKGV announced that the event would be organized by TÜYAP.
The ITF filed a complaint against the TSKGV at the KİK, which immediately ruled that it would not interfere as the foundation is not subject to the Public Procurement Law. Undeterred, the ITF later initiated a lawsuit against the foundation at the Ankara 16th Administrative Court. The court in response decided to stop the execution of the tender, ruling that the TSKGV is subject to the Public Procurement Law. The decision of the Ankara court was forwarded to the KİK. The KİK made a landmark decision, announcing that the TSKGV is subject to the said law. In its reasons, the KİK said the foundation and military companies in which the TSKGV has shares must act in accordance with the Public Procurement Law.
The TSKGV is expected to open a new tender for the organization of the IDEF soon.
The Public Procurement Law replaced the State Tender Law on Jan. 1, 2003. The law stipulates that all state institutions are subject to it. The TSKGV, however, ignored the law for years and acted like a private company in its tenders.
The KİK decision is reminiscent of an earlier decision by the authority to strip the Turkish Armed Forces Assistance Center (OYAK) of its privileges in public tenders. After the KİK decision in 2011, OYAK lost its privileged status and was forced to compete with other businesses on an equal footing. OYAK operates with a unique structure among world armies. It has more than 60 companies involved in very diverse industries, from bed frames to mining.