Procurement Process
PROCUREMENT PROCESS:
Depending on the nature and size of the project and its procurement elements, UNDP may use any of the following competitive methods set out in these Guidelines to procure goods, civil works or services. Commonly used competitive methods include:
- Open International Competition
- Limited International Competition
- Local and/or National Competition
UNDP regards open international competition (OIC) as the preferred method of procurement with its overall ability to achieve all principal objectives of the intended programme. However, in many circumstances where it is determined that OIC is not feasible, staff may employ use of an alternative method. In such, UNDP requires its staff to ensure that the selected method is both economic and efficient (i.e., obtains the best value for money). All methods of procurement irrespectively must be open and fair to all interested Offerors to the extent possible.
PROCEDURE:
Open International Competition
Open international competition intends to provide all eligible and qualified Offerors adequate and timely notification of UNDP’s requirements and to provide them equal access and fair opportunity to compete for contracts of required goods, civil works or services valued at USD 100,000 or more. Initiated by an advertisement, OIC invites interested Offerors to request the solicitation documents from the Business Unit.
For contracts valued between USD 100,000 and USD 500,000, advertisements should be posted on IAPSO’s website and/or as a Procurement Notice on UNDP’s website for ten to thirty days depending on the complexity and nature of the goods, civil works or services to be obtained.
Limited International Competition
Limited international competition (LIC) narrows competition amongst an ongoing shortlist of qualified Suppliers selected in a non-discriminate manner by the Business Unit either from rosters, prequalification, expressions of interest, etc. LIC is appropriate where OIC is unsuitable, exigent circumstances persist or the global market retains a limited availability of the required goods, civil works or services.
Local Competition
Local competition, unlike the aforementioned international competitive methods is generally exercised for procurement in the country where the programme is to be deployed. Business Units may use local competition where:
- civil works are scattered geographically or spread over time and the country has a sufficient base of Suppliers (i.e., minimum of three);
- professional services are valued at USD 30,000 or less;
- goods are available locally at prices below the global market price; or
- programmes require knowledge of the local/national system (e.g., Human Development Report).
Where applicable, advertisements shall be published in the national gazette or national or local newspaper or local publications to ensure thorough competition.
PROCUREMENT METHODS:
- Request for Quotation (RFQ)
- Invitation to Bid (ITB)
- Request for Proposal (RFP)
- Direct Contracting/Local Shopping
Request for Quotation (RFQ)
- Most flexible / Least formal
- < $2,500 and > $100,000
- Written quotations
- Pre-selected Suppliers
- Standard format available
- Basis of award is Price.
Invitation to Bid (ITB)
- > $100,000
- Used for Goods Procurement
- Open advertising preferred
- Lowest priced, qualified, responsive offer
- Should not be negotiated
- Model bidding document available
Request for Proposal (RFP)
- Services, complex goods
- Detailed evaluation criteria
- Two envelope system
- Combination of price and services/solution
Direct Contracting/Local Shopping
- < $2,500
- No Competitive Market
- Standardization
- Co-operation with other UN Organization
- Previous identical requirement
- No previous satisfactory results of bidding
- Real Estate
- Genuine urgency
- IAPSO
Evaluation of offers
Depending on the procurement method, different factors take on the key role in the evaluation process.
When evaluating RFQs and ITBs, the price is the most important element. In contrast to this, and RFP requires a technical evaluation. The technical component primarily determines whether the proposal will be accepted or declined. Additionally, UNDP evaluates its products and services based on the following criteria:
Goods:
* Meet technical specifications
* Delivery
* Environmentally sound
* Quality Assurance
* Accuracy of documentation
* Speed of response
* Customer service
Services:
* Provides Technical Solutions
* Competency of Service providers
Contract modalities/Types of contracts
UNDP has several contract modalities, amongst others:
* Lump Sum (Fixed Price Contract)
* Time and Material Contract
* Retainer Fee contract
* Percentage Contracts
* Long Term Agreements (Call off through contracts)
Long-term agreements (LTA) reduce administrative efforts by a single tendering exercise over the life of the arrangement. They are awarded on a 1-year renewable basis and exist on the country level as well as globally, administered by HQ.
Advantages include:
* quality assurance and legal requirements will have been dealt with at the outset
* the supplier benefits in terms of planning stock levels and continuity of supply
* a mutually beneficial longer-term working relationship can be established
Conditions of Contract
In order to be a future supplier for the United Nations Development Programme, you have to accept our General Terms and Conditions. Depending on your deliverables, the following applies:
* General Terms and Conditions for Goods
* General Conditions of Contract for Professional Services
* UNDP General Conditions for Purchase Orders
* General Conditions of Contract for Civil Works
* Supplier Code of Conduct
Hiring consultants
70% of UNDP' s procurement expenditures are spent for services. They could be executed by companies or individuals. At the country office level, the first step in selecting Suppliers is often market research, particularly if the product or service has not previously been procured. Business Units may source Suppliers through an expression of interest for commonly procured goods, registration of prospective Suppliers at UNGM and/or business seminars, where applicable.
UNDP country office manages its own supplier database. Once a roster of potential qualified Suppliers has been generated, Business Units evaluate each Supplier' s capabilities and resources to successfully perform on a contract, if awarded. The key parameters, which guide Supplier appraisal, include:
a) Technical capacity to deliver the goods and/or services as per schedule;
b) Financial strength, where the quick ratio is the most widely used test of a company's financial strength and liquidity.
c) The commitment of management to comply with UNDP General Terms and Conditions; and
d) Evidence of meeting national or international quality standards for the product offered; or evidence of national and international acceptance of its services;
e) Production capacity to provide after-sales-service for the goods or services provided;
f) Environmental compliance (i.e. ISO 14000 Certification) ; and
g) Participation in the UN Global Compact.