Conformed Copy - L4048 - Road Improvement and Traffic Safety Project - Supplemental Letter 1

Page 1 June 24, 1996 Ms. Seniz Bakkal Chief Economic and Commercial Counselor Embassy of the Republic of Turkey 2523 Massachusetts Avenue, NW Washington, DC 20008 Re: Loan No. 4048 TU (Road Improvement and Safety Project) National Procurement Procedures Dear Madam: We refer to the provisions of Schedule 4, Section I, Part C. 1 of the Loan Agreement (Road Improvement and Safety Project) of even date herewith between the Republic of Turkey (the Borrower) and the International Bank for Reconstruction and Development (the Bank), We hereby inform you that, for purposes of items to be financed out of the Loan for the above\1ementioned Project and for which contracts will be procured pursuant to said provisions, the Bank will consider the sealed Bidding Procedures, as described in the Borrower's Bids Law No. 2996 of September 3, 1983, and Law No. 2990 of March 17, 1984, as acceptable, provided that the following are reflected in the application of those procedures: (i) Prospective bidders shall be allowed at least 30 days from the date of the first advertisement to submit bids. (ii) Bids shall not be rejected solely on the grounds that they exceed an "estimated price". In the event that bid amounts are significantly higher than estimated, all relevant information shall be provided to the Bank, and the Borrower shall determine, in agreement with the Bank, whether to adjust the specifications and rebid or to negotiate with the lowest evaluated bidder. (iii) The right to challenge procedures followed in connection with the bidding shall be available to all bidders irrespective of whether those bidders of their representatives are present at the bid opening. (iv) No provision for the preferential treatment of national companies shall be applied to Bank-financed items. (v) Contracts shall be awarded to the bidder whose bid has been determined to be the lowest evaluated bid and who meets appropriate technical standards of capability and financial resources. Bid documents shall specify the relevant factors in addition to price to be considered in bid evaluation and the manner in which they will be applied for purposes of determining the lowest evaluated bidder. (vi) Contracts shall provide for equitable adjustments for overruns or underruns in the originally anticipated scope of the works. 2. Furthermore, it is our understanding that the Borrower will keep the Bank informed or any amendments to Law No. 2886 and 2990, and of any new legislation applicable to procurement pursuant to the above-mentioned procedures. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Kenneth G. Lay Acting Regional Vice President Europe and Central Asia Page 2 CONFIRMED: REPUBLIC OF TURKEY By /s/ Aydin Karaoz Authorized Representative