ARTICLES

Information Asymmetry and Legal Consultancy in Public Procurements

Public procurement law is complicated, particularly due to the significant number of secondary legislations that make procurement processes even more confusing for all parties involved. The complicated nature of public procurement law leads to additional transaction costs both for public and private sector actors. 

One of the most important problems of public procurement in Turkey is the incomplete information and evaluation procedures of the parties in public procurement transactions. Public officials working in government administrations often do not have professional expertise when it comes to public procurement. They try to operate within the framework of public procurement law, which is a topic of administrative law in a broad sense but a part of financial legislation in a more particular sense. However, detailed and complex regulations of the legislation appeal to people who are experts in direct procurement. As a result, in many cases, public officials make bad decisions and buy goods or services that do not meet their needs in terms of public service.

When the issue is examined from the perspective of the private sector, the legislation's complexity leads companies to lose tenders that they may have won because their main purpose does not require them to follow-up on legal regulations. Because of a simple mistake, despite their good intentions, they might be subjected to sanctions such as being banned, guarantee being registered as revenue, and being accused of rigging the tender.

The situation described above is an issue of administrative and professional competency. The aforementioned situation is not due to a lack of competence on the part of public officials or companies in their respective fields. However, it is necessary to mention a problem that arises due to the poor understanding of transaction costs in public procurement.

In order to increase administrative and professional capacities for public procurement in Turkey, it is important to receive support from specialized agencies. The legal consultancy industry of the 21st century encourages law firms and their partners to specialize. For this reason, working directly with agencies specializing in this field regarding any dispute will minimize errors.