Oh, the sweet order of state tenders

One of the world’s most important economists, maybe the number one economist, Prof. Daron Acemoğlu, was in Turkey last week. Hülya Güler from daily Hürriyet interviewed him and he expressed warnings about economic aspects he found risky. 

One of the aspects he found risky was the relationship between politicians and those who are involved in state tenders.  

He asked, “Where does the biggest money come from? Well, from tenders. Look at who wins the tenders; those are the companies that are very close with politicians… The general managers of companies in Turkey, instead of sparing 60 to 70 percent of their time for innovation and R&D, have to spend time for relationships with politicians. Imagine the opportunities missed because of that…”

Acemoğlu’s interview came at a time when I read about the “lunch wars” at the Foreign Affairs Ministry, the 2-million-Turkish-Lira tender to provide meals for the 850 ministry personnel that turned into a long-winded story before it was finalized.  

The tender was organized last November and a company won. Then another company filed an objection stating they were unjustifiably not included in the tender. The higher body examined the objection and cancelled the tender. Another tender was organized; this time the company that had fled the complaint won.

But again there was an objection. The meat amount in the chickpea casserole should have been 60 grams but that winning company had declared 50 grams per person. Lemon and tarhana soup were also points of objections. Anyway, the higher body decided that the amounts were best for the Foreign Affairs Ministry personnel for a balanced and healthy diet.

This was a long journey but it was not controversial; it was a transparent tender. 

However, not all tenders are like this. 

For instance, there was the Zonguldak Public Hospital Union General Secretariat lunch tender worth 7 million liras in the Black Sea province. For this tender, Zonguldak providers were neglected and a company from the eastern province of Kars was invited. Local firms gathered and went to Ankara to explain the situation to Zonguldak deputies. The deputies called officials and also Zonguldak Governor Ali Kaban. The incident was even told to Heath Minister Mehmet Müezzinoğlu. The tender was cancelled. 

However, in the second tender, it was again not possible for Zonguldak firms to participate and again it was the firm from Kars that won. 

Mutual accusations make one think about the risky fields Acemoğlu pointed out. 

Those firms not able to join the tender were accused of having connections to the “parallel structure.” In other local news stories, it was claimed union officials and local Justice and Development Party (AK Party) officials were close relatives and this relationship played an important role in the tender. 

These tenders of “a few million” in the public sector and in the municipalities add up to an enormous amount in total.

This is such a “sweet order” that, as in the Turkish proverb, whoever handles the honey licks his finger, meaning anybody in charge of handling money or resources gets to keep or enjoy some benefits. 

How strong is this scam, that even those who claim to be honest cannot break it? In the past 10 to 15 years the tender law has been amended, intervened, cut, shaped and added to many times.

In 2014, Finance Minister Mehmet Şimşek said the tender law was amended 32 times and changes were made in 135 articles. 

Sometimes, I am very close to understanding those boutique tenders, etc… I am so cute…