Introduction
Subcontracting in Turkish public procurement contracts is a critical legal issue for contractors, suppliers, service providers, construction companies, foreign investors and public authorities. In many public contracts, the contractor may need to use subcontractors for technical, operational or specialist parts of the work. This is particularly common in construction works, infrastructure projects, installation works, maintenance services, software implementation, technical support, logistics, facility management and complex goods procurement involving assembly or after-sales service.
However, subcontracting in Turkish public procurement is not the same as ordinary private-sector outsourcing. It is regulated by Public Procurement Law No. 4734, Public Procurement Contracts Law No. 4735, tender documents, administrative specifications, technical specifications, standard contracts, general conditions and Public Procurement Authority practice. A contractor cannot freely transfer all or most of the public contract to third parties. It cannot use prohibited persons as subcontractors. It cannot assume that approval of a subcontractor releases the main contractor from liability.
Article 15 of Law No. 4734 provides that, where necessary due to the characteristics of the procurement subject, tenderers may be asked at the tender stage to specify the portions of the contract they plan to assign to subcontractors, and to submit the subcontractor list for contracting authority approval before contract signing. The same provision states that subcontractor liability for the assigned portion does not release the main contractor from its own liabilities.
For companies, the practical message is clear: subcontracting must be planned before bid submission, structured according to tender documents, approved by the administration where required, documented by written contracts and managed through strict compliance controls during performance.
Legal Framework of Subcontracting in Turkish Public Procurement
The legal framework begins with Article 15 of Law No. 4734, which deals specifically with subcontractors at the tender stage. The provision allows the contracting authority to request information about planned subcontracted portions and to require submission of subcontractor lists before contract signing where the nature of the procurement makes this necessary.
The contract-stage framework is found in Law No. 4735. Article 7 of Law No. 4735 requires public procurement contracts to include, where applicable, information about subcontractors and their responsibilities. The same article requires contracts to include many related issues such as performance bond, warranty, delivery, penalties, inspection, acceptance, termination, personnel responsibilities and occupational health and safety obligations.
This means subcontracting is not merely an operational arrangement between the contractor and a third party. If subcontractors are used, the public procurement contract, tender documents and general conditions must define or allow the subcontracting structure. The administration’s approval, the scope of subcontracted works, the contractor’s continuing liability and the subcontractor’s eligibility must all be checked.
What Is a Subcontractor?
In Turkish public procurement practice, a subcontractor is generally understood as a real or legal person who performs a specific part of the contract under a contract with the main contractor. In construction practice, the Public Procurement Board has quoted the Construction Works General Conditions definition: a subcontractor is a real or legal person who performs a part of the contract work, by type, based on a contract with the contractor.
This definition is important because subcontracting is different from ordinary supply. A company selling standard materials to the contractor may not always be a subcontractor. However, a company that undertakes a defined part of the contractual work, such as mechanical installation, electrical works, excavation, façade systems, software implementation, maintenance operation or specialized testing, may be treated as a subcontractor.
The distinction matters because subcontractors may require administrative approval, may be subject to prohibition checks, and may create direct legal consequences for work experience, liability and performance management.
Subcontracting Must Be Allowed by Tender Documents
The first question is whether the tender documents allow subcontracting. In some tenders, subcontracting may be expressly permitted. In others, the tender documents may require bidders to list the parts they intend to subcontract. In some contracts, subcontracting may be limited or prohibited for sensitive, security-related or highly specialized obligations.
The Public Procurement Board has referred to standard construction tender language under which the administration may allow subcontractors, but the entire work cannot be performed by subcontractors, and subcontractor responsibility does not eliminate the contractor’s responsibility.
Therefore, before bidding, the contractor should review the tender notice, administrative specification, technical specification, draft contract and general conditions. If the contractor intends to rely on subcontractors for important parts of the work, this should be assessed before the bid price is finalized.
A contractor that wins a tender and later discovers that subcontracting is restricted may face major performance risk. Conversely, a tender document that unlawfully restricts necessary subcontracting may need to be challenged before the tender deadline.
The Entire Work Cannot Be Subcontracted
One of the most important rules is that the entire public contract cannot be performed through subcontractors. Public Procurement Board practice and standard construction documentation expressly state that the whole work cannot be subcontracted.
This rule reflects a core principle of public procurement: the contracting authority selected the main contractor based on qualification, work experience, technical capacity, financial strength and bid price. If the contractor were allowed to pass the entire work to another party, the tender result would lose its meaning. It could also undermine competition, equal treatment and public supervision.
This does not mean that subcontracting is prohibited. It means subcontracting must be partial, controlled and compatible with the tender documents. The main contractor must remain the real performer and responsible party before the administration.
Approval of Subcontractors by the Administration
Subcontractor approval is central. Article 15 of Law No. 4734 allows the contracting authority to require the list of subcontractors before contract signing. In construction practice, the Public Procurement Board has quoted general-condition rules stating that, where the tender documents require the list to be submitted before signing, the administration must notify the contractor within fifteen days whether it approves the listed subcontractors.
Approval is not a formality. The administration may check whether the proposed subcontractor is eligible, technically suitable and not prohibited. In some projects, the administration may also consider whether the subcontractor has capacity to perform the relevant part of the work.
The contractor should not allow an unapproved subcontractor to begin work where approval is required. According to the Construction Works General Conditions provisions quoted by the Public Procurement Board, subcontractors not approved by the administration cannot work on the site.
Written Subcontractor Agreements
Subcontracting should be documented by a written contract between the main contractor and the subcontractor. Public Procurement Board quotations from the Construction Works General Conditions state that the contractor must conclude a contract with approved subcontractors before they start work and provide a copy to the administration.
This written contract is important for several reasons. First, it defines the scope of the subcontracted work. Second, it helps show that the subcontractor is performing a defined part, not the entire public contract. Third, it creates evidence for payment, responsibility, quality control, work experience and dispute resolution. Fourth, it allows the administration to verify that the subcontracting arrangement is consistent with the approved list and tender documents.
A weak or vague subcontractor agreement may create problems later. For example, if the subcontractor claims additional payment, if the administration rejects the work, if defects appear, or if a subcontractor work completion certificate is later requested, the written scope and price will become decisive.
Subcontractor Approval Does Not Release the Contractor
The most important liability rule is that subcontractor approval does not release the main contractor. Article 15 of Law No. 4734 expressly states that subcontractor liabilities regarding the assigned portion do not release the contractor from its own liabilities.
The Public Procurement Board has also quoted construction general-condition rules stating that the contractor is responsible to the administration for all work performed by subcontractors, and that approval of subcontractors by the administration does not change this responsibility.
This is the central legal risk. The administration’s contractual counterparty is the main contractor. If the subcontractor performs defective work, delays its portion, uses non-compliant materials, fails to pay workers, abandons the site or violates technical rules, the administration will usually hold the main contractor responsible under the public procurement contract.
The contractor may have recourse rights against the subcontractor under their private subcontract, but that does not normally prevent public-law and contract consequences against the main contractor.
Subcontractors Who Cannot Be Used
Not every person or company can be a subcontractor in Turkish public procurement. Article 11 of Law No. 4734 states that certain persons cannot participate in procurement directly, indirectly or as subcontractors, including those prohibited from public procurements, certain convicted persons, contracting officers and procurement officials, their close relatives and related companies.
Public Procurement Board quotations from the Construction Works General Conditions also state that persons who cannot participate under Article 11, persons debarred under Article 58 of Law No. 4734, certain foreign tenderers covered by relevant reciprocity measures, and persons debarred under Article 26 of Law No. 4735 cannot act as subcontractors.
This is a serious compliance issue. A contractor should check subcontractor eligibility before signing any subcontract. Using a prohibited subcontractor may create termination, debarment and criminal-law risks depending on the circumstances.
Subcontracting and Contract Assignment Are Different
Subcontracting should not be confused with contract assignment. In subcontracting, the main contractor remains party to the public procurement contract and remains responsible to the administration. In assignment, the contract itself is transferred to another party.
Article 16 of Law No. 4735 regulates assignment. It provides that a public procurement contract may be assigned only in compulsory cases and with written permission of the contracting officer; the assignee must satisfy the original tender conditions. Unauthorized assignment results in termination, and Articles 20, 22 and 26 apply.
This distinction is critical. If the contractor gives too much of the work or control to another party, the arrangement may be viewed not as lawful subcontracting but as an unauthorized assignment in substance. That may lead to termination, forfeiture of guarantees and debarment risk.
A subcontract should therefore be carefully drafted to show that the main contractor retains control, responsibility, coordination and performance obligations.
Subcontracting in Construction Works
Construction works are the most common area for subcontracting. Large public construction projects may require excavation, concrete works, steel structures, mechanical installation, electrical works, HVAC systems, façade works, landscaping, road works, water infrastructure, tunnel works, testing, commissioning and other specialized tasks.
In construction contracts, subcontractors can be useful and often necessary. However, construction subcontracting is heavily regulated. The Public Procurement Authority announced that construction contract regulations published in August 2019 introduced rules determining who cannot be used as subcontractors, setting limits on subcontractable work amounts and allowing direct payment to subcontractors where arranged in the tender documents.
Construction contractors must also consider long-term liability. Article 30 of Law No. 4735 provides that, in construction works, contractors and subcontractors are jointly and severally liable for damages arising from failure to construct according to engineering and technical rules, use of fraudulent materials and similar reasons; liability covers the whole structure until final acceptance and continues for fifteen years from final acceptance approval.
This means a subcontractor’s defective work can create long-term exposure not only for the subcontractor but also for the main contractor.
Subcontractor Liability in Construction Works
Article 30 of Law No. 4735 is one of the strongest provisions concerning subcontractor liability. It expressly refers to both contractors and subcontractors in construction works and imposes joint and several liability for certain damages.
This rule is particularly important in public buildings, bridges, roads, hospitals, schools, water infrastructure, energy facilities and other works where defects may appear years after completion. If damage arises because the work was not performed according to technical rules or because fraudulent materials were used, the contractor and subcontractor may both face claims.
For contractors, this means subcontractor selection is not merely a price decision. The contractor should evaluate technical capacity, prior experience, personnel, machinery, financial reliability, quality management, insurance, occupational safety, materials and compliance history.
For subcontractors, the rule creates serious responsibility. A subcontractor cannot assume that it is invisible to the administration or protected by the main contractor. In construction works, the law expressly recognizes subcontractor liability.
Subcontracting in Service Procurement
Subcontracting may also arise in service procurement. Public service contracts may include cleaning, security, catering, transportation, maintenance, facility management, call centre services, software support, IT operation and technical repair. Depending on the tender documents, certain parts may be subcontracted, such as equipment maintenance, specialized software modules, logistics, technical testing or regional service operations.
However, service contracts may involve personnel, labour-law and social security risks. If the service is personnel-based or performed at public workplaces, subcontracting must be analysed carefully together with labour law. Law No. 4735 includes provisions concerning public-sector service procurements and collective labour agreements in certain personnel-based contexts, especially where workers are employed by subcontractors at public workplaces.
The main contractor should monitor payroll, social security, occupational safety, working hours, uniforms, service quality and reporting obligations. If the subcontractor fails in these areas, the public authority may still treat the main contractor as responsible for contract performance.
Subcontracting in Goods Procurement
Goods procurement may also involve subcontracting or subcontract-like arrangements. A supplier may use third parties for manufacturing, installation, assembly, commissioning, training, maintenance or after-sales service. Whether these third parties are subcontractors depends on the tender documents and the nature of their role.
If a public contract is simply for delivery of standard goods, ordinary manufacturers or distributors may not always be treated as subcontractors. But if the contract includes installation, system integration, testing, software deployment, warranty service, spare parts management or maintenance, the companies performing these parts may need to be evaluated as subcontractors or authorized service providers.
The contractor should review whether the tender documents require manufacturer authorization, authorized service network documents, subcontractor approval or after-sales support commitments. A failure by the installation or service subcontractor may cause rejection at acceptance, payment delay, warranty disputes or termination.
Subcontracting and Work Experience Certificates
Subcontracting may also be relevant for future tender participation because subcontractors may seek work experience certificates. Public Procurement Board practice has addressed subcontractor work completion certificates, including conditions under construction tender implementation rules. In a 2022 Board decision, the Board referred to rules under which a subcontractor work completion certificate may be issued to subcontractors who complete a part of a contract undertaken from a contractor, provided that statutory and regulatory conditions are met.
The Board also quoted rules requiring, among other things, a contract between the contractor and subcontractor, invoices or certified copies, social security documents and performance of a defined part of the work.
This is important for subcontractors because public procurement experience can be commercially valuable. It is also important for main contractors because the accuracy of subcontractor documentation may later be disputed. Subcontractor work experience should be documented properly from the beginning, including scope, price, invoices, acceptance, employer approval and EKAP records where applicable.
Subcontracting and EKAP
EKAP is increasingly relevant in subcontracting. Tender documents, standard administrative specifications, contract drafts, subcontractor lists, work experience documents and Public Procurement Board decisions may be accessed or processed through EKAP depending on the procurement type and stage.
The Public Procurement Board decision cited above involved an EKAP-recorded subcontractor work experience certificate dispute, showing how subcontractor documentation can become part of electronic public procurement review.
Contractors should preserve EKAP records relating to tender documents, subcontracting clauses, approved subcontractor lists, work experience documents, notifications and administrative correspondence. In future disputes, EKAP records may prove whether the contractor disclosed subcontractors, whether the administration approved them and whether subcontractor-related documents were properly recorded.
Direct Payment to Subcontractors
Direct payment to subcontractors may be possible where arranged in the tender documents. The Public Procurement Authority’s 2019 announcement on construction contract practice amendments stated that, if regulated in the tender documents, direct payment to subcontractors was made possible.
This mechanism may protect subcontractors in certain construction works and improve project continuity. However, it does not automatically make the subcontractor a party to the main public procurement contract. It also does not eliminate the main contractor’s responsibility unless the specific legal framework provides otherwise.
Contractors and subcontractors should carefully review whether direct payment is permitted, how the amount will be calculated, what documents are required, how progress payments will be handled and whether the administration’s direct payment affects the contractor-subcontractor account.
Subcontracting and Prohibited Acts
Subcontracting can create prohibited-act risks. Article 25 of Law No. 4735 prohibits several acts during contract performance, including fraudulent interference with contract transactions, false documents, fraudulent materials or methods, defective works contrary to technical rules, harming the administration, misuse of knowledge and experience, failure to perform outside force majeure and unlawful assignment.
If a subcontractor uses fraudulent materials, submits false documents, performs defective work or participates in corruption, the main contractor may face serious consequences under the public contract. Even if the subcontractor is the immediate wrongdoer, the administration may still proceed against the contractor because the contractor remains responsible for the contract.
Article 26 of Law No. 4735 provides debarment consequences for persons who commit prohibited acts listed in Article 25. Therefore, subcontractor compliance should be part of the contractor’s public procurement compliance system.
Subcontracting and Termination Risk
Improper subcontracting may lead to termination. If the contractor unlawfully assigns the contract in violation of Article 16, termination and debarment-related provisions may apply. If the contractor fails to perform according to the tender documents and contract, Article 20 allows termination after the required warning process in relevant circumstances.
Subcontractor failure can therefore become contractor default. If the subcontractor delays, abandons the work, fails to mobilize, uses defective materials or violates technical rules, the administration may warn and later terminate the main contract.
Contractors should include strong default, replacement, indemnity, quality-control and documentation clauses in subcontractor agreements. They should also monitor subcontractor performance continuously instead of waiting for the administration to detect the problem.
Subcontracting and Performance Bond Risk
The main contractor’s performance bond secures performance of the public procurement contract. If subcontractor failure causes contractor default and termination, the performance bond and additional performance bond may be recorded as revenue under Law No. 4735 termination provisions. Article 20 provides for recording guarantees as revenue in termination based on failure to perform or prohibited acts during performance.
The contractor may later claim against the subcontractor under the subcontract, but that does not prevent the administration from using contractual remedies against the contractor. Therefore, contractors should consider obtaining subcontractor guarantees, retention, insurance, performance bonds or parent company guarantees depending on the project size and risk.
Subcontracting and Occupational Health and Safety
Public procurement contracts must include occupational health and safety obligations under Article 7 of Law No. 4735. Subcontracting does not eliminate the need to manage these obligations. In construction works and personnel-based services, subcontractor safety failures can create severe civil, administrative and criminal consequences.
The main contractor should require subcontractors to comply with occupational safety legislation, site rules, training requirements, personal protective equipment obligations, reporting systems and incident investigation procedures. Site access should be controlled. Safety records should be preserved.
In public construction projects, occupational safety failures may also affect project delays, penalties, insurance coverage and administrative confidence in contractor performance.
Subcontracting and Foreign Companies
Foreign companies participating in Turkish public procurement often rely on local subcontractors. This may be necessary for site works, local labour, permits, logistics, installation, maintenance, Turkish-language support, spare parts, regional service networks or local compliance.
However, foreign companies should not assume that a local subcontractor solves all Turkish performance issues. The foreign main contractor remains responsible to the administration if it is the contracting party. Local subcontractor failure may still expose the foreign contractor to delay penalties, termination, guarantee forfeiture and debarment risks.
Foreign contractors should conduct due diligence on Turkish subcontractors. This should include trade registry status, debarment checks, tax and social security compliance, technical capacity, work experience, insurance, litigation history, financial reliability and occupational safety record.
Subcontractor Due Diligence Checklist
Before using a subcontractor in a Turkish public procurement contract, the contractor should complete a legal and practical due diligence process.
The contractor should verify whether subcontracting is allowed under the tender documents. It should identify the part of the work to be subcontracted. It should check whether the whole work would unlawfully be transferred. It should confirm that the proposed subcontractor is not prohibited under Law No. 4734 or Law No. 4735. It should obtain administrative approval where required. It should sign a written subcontract before work begins. It should provide a copy to the administration where the applicable rules require it. It should define scope, price, deadlines, quality standards, reporting duties, insurance, occupational safety obligations, default remedies and documentation duties.
The contractor should also monitor performance continuously. Approval at the beginning is not enough. The contractor must supervise quality, timing, personnel, materials, invoices, progress, safety and compliance throughout the project.
Common Mistakes in Subcontracting
The first common mistake is assuming that subcontracting is always allowed. It depends on the tender documents and the nature of the work.
The second mistake is subcontracting too much of the work. The entire public contract cannot be subcontracted.
The third mistake is starting subcontractor work before administrative approval where approval is required.
The fourth mistake is using prohibited persons or debarred companies as subcontractors.
The fifth mistake is confusing subcontracting with assignment.
The sixth mistake is failing to sign a proper written subcontract.
The seventh mistake is assuming that administration approval releases the contractor from responsibility.
The eighth mistake is failing to document subcontractor work for future work experience certificates.
The ninth mistake is ignoring occupational safety and labour-law compliance.
The tenth mistake is failing to replace a non-performing subcontractor quickly.
Legal Remedies in Subcontracting Disputes
Subcontracting disputes may arise between the contractor and administration, between contractor and subcontractor, or between subcontractor and administration where direct payment or work experience issues arise.
If the administration rejects a subcontractor list unlawfully, refuses approval without valid reason, orders replacement, rejects work performed by a subcontractor or imposes penalties based on subcontractor performance, the contractor may need to use contractual and administrative remedies. The correct route depends on the procurement stage and the nature of the decision.
If the dispute concerns tender documents, such as unlawful subcontracting restrictions, the bidder may need to file a complaint before the tender deadline under Law No. 4734. If the dispute arises during contract performance, the contractor may need to submit written objections, request administrative reconsideration, preserve progress payment objections or pursue litigation depending on the contract and dispute.
Subcontractor claims against the main contractor are generally private-law disputes under the subcontract. However, where the issue concerns subcontractor work experience certificates or direct payment mechanisms, public procurement rules may also become relevant.
Practical Clauses for Subcontractor Agreements
A subcontractor agreement for a public procurement project should be more detailed than an ordinary private subcontract. It should include the public procurement contract reference, tender registration number, scope of subcontracted work, technical specification obligations, compliance with tender documents, deadlines aligned with the main contract, quality-control obligations, inspection and acceptance procedure, reporting duties, site access rules, occupational safety obligations, insurance requirements, confidentiality, anti-corruption obligations, prohibition and debarment warranties, right of the administration to inspect, replacement rights, penalty back-to-back clauses, indemnity, document retention, invoice rules, work experience documentation cooperation and dispute resolution.
The subcontract should also state that the subcontractor understands the public nature of the main contract and must comply with all relevant public procurement obligations affecting its work.
Frequently Asked Questions
Can subcontractors be used in Turkish public procurement contracts?
Yes, subcontractors may be used where the nature of the procurement and tender documents allow it. Under Article 15 of Law No. 4734, tenderers may be asked to identify portions planned for subcontracting and submit subcontractor lists for approval before contract signing.
Can the entire public contract be subcontracted?
No. Public Procurement Board practice and standard construction tender provisions state that the entire work cannot be performed by subcontractors.
Does approval of a subcontractor release the main contractor?
No. Article 15 of Law No. 4734 states that subcontractor liability does not release the contractor from its own liabilities.
Can prohibited persons act as subcontractors?
No. Article 11 of Law No. 4734 prohibits certain persons from participating in procurements directly, indirectly or as subcontractors.
Are subcontractors liable in construction works?
Yes. Article 30 of Law No. 4735 provides that contractors and subcontractors in construction works are jointly and severally liable for damages caused by failure to comply with technical rules, fraudulent materials and similar reasons, including a fifteen-year liability period after final acceptance approval.
Is subcontracting the same as contract assignment?
No. Subcontracting keeps the main contractor responsible. Assignment transfers the contract and is allowed only in compulsory cases with written permission of the contracting officer under Article 16 of Law No. 4735. Unauthorized assignment may lead to termination and sanctions.
Can subcontractors receive direct payment?
In construction contract practice, the Public Procurement Authority announced that direct payment to subcontractors may be possible where arranged in the tender documents.
Conclusion
Subcontracting in Turkish public procurement contracts is legally possible but strictly controlled. It must be compatible with the tender documents, approved by the administration where required, limited to part of the work and managed without weakening the main contractor’s responsibility.
The core rule is that the main contractor remains responsible to the administration. Subcontractor approval does not release the contractor. The entire work cannot be subcontracted. Prohibited persons cannot be used as subcontractors. Unauthorized arrangements may be treated as unlawful assignment and may lead to termination, guarantee forfeiture and debarment.
In construction works, the risk is even greater because contractors and subcontractors may be jointly and severally liable for technical defects, fraudulent materials and related damages for fifteen years after final acceptance approval. For services and goods procurement, subcontracting may also create labour, warranty, technical support, installation, maintenance and acceptance risks.
For Turkish and foreign contractors alike, the safest approach is early planning. Subcontracting should be reviewed before bid submission, disclosed where required, approved before work begins, documented through a detailed written subcontract and monitored throughout performance.
A well-managed subcontractor can help the contractor perform a public contract successfully. A poorly managed subcontractor can cause delay, penalties, rejection of work, termination, loss of guarantees, debarment and long-term liability. In Turkish public procurement, subcontracting is not merely a commercial convenience; it is a legal risk-management issue.
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