Procurement Processes in UNOPS; An Overview

1. Procurement Processes in UNOPS; An Overview January 2014 1

2. What is procurement? Procurement is the acquisition of: • Goods • Works or services • Property, plant and/or equipment Through • Purchase • Hire, lease, rental or exchange

3. Procurement principles Best Value for Money: UNOPS defines ‘best value for money’ as the trade-off between price and performance that provides the greatest overall benefit under the specified selection criteria. Fairness, Integrity and Transparency: Free from favouritism, impartial, honest and applies visibility and openness in all transactions. All information on procurement policies, procedures, opportunities and processes are clearly defined and made widely known and available, and rules and procedures are applied consistently to all potential bidders. Effective Competition: UNOPS fosters competition in all procurement processes, as a means of ensuring fairness, integrity and transparency. Therefore, competition should be as open as possible. Best Interest of UNOPS and its Clients: Maintaining the highest personal and institutional integrity, upholding the image and reputation of UNOPS, and promoting the public good as specified in the principles of the United Nations in every aspect of UNOPS’ procurement operations.

4. Types of procurement • Formal • The best offer is found by comparing several offers from different suppliers with UNOPS requirements, following a formal procurement process. This is the standard procurement method • Amendments • An extension or change to an existing contract • Used when related goods/services/works are to be provided by the same supplier in furtherance of the original contract. • Variation orders for works • Emergency • A simplified process which can be used in emergencies if pre-approved by the ECPO. • Informal • Awards of procurement contracts on the basis of exceptions to the use of formal methods of solicitation • The award must be properly justified • Shopping (< $2,500) • RFQ (<$50,000) • Pre-selection • Used when the funding source wants particular suppliers. • UNOPS must also justify that the costs are reasonable • Post Facto and Retroactive • Post-facto/Retroactive cases are not procurement processes; an administrative procedure to be followed for review and possible ratification of actions

5. Types of competitions Open Limited • Default/preferred method of competition for ≥ USD 50k • Advertisement: UNOPS website & other media specified as mandatory in the project agreement and wherever suppliers can be reached • A valid reason for not conducting an open competition must exist • Can be international, regional or national • Short-list must be pre-cleared by a Procurement Advisor and approved by relevant Procurement Authority Exception Pre-selection • UNOPS standard solicitation documents (RFP (for services with estimated cost of USD 50,000 or above) / ITB (for goods with estimated cost of USD 50,000 and above)) must be used • Offer to be received in writing and evaluated • Justify the reasonableness of the price • Funding source has pre-selected the suppliers according to its procurement rules & pursuant to the project agreement. • Reasonableness of cost must still be justified

6. Solicitation method RFP – REQUEST FOR PROPOSAL SERVICES above 50,000 USD GOODS, WORKS ITB – INVITATION TO BID ALL TYPES RFQ – REQUEST FOR QUOTATION 2,500 USD to 50,000 USD below 2,500 USD ALL TYPES SHOPPING

7. Solicitation method Solicitation documents ITB/RFP*: Used for Procurement valued ≥50K RFQ: Used for Procurement valued <50K • 10 calendar days advertisement • No Pre-clearance RFP: 30 calendar days advertisement ITB: 20 calendar days advertisement *documents require pre-clearance by Procurement Advisor before approval and issuance

8. Overview of milestones Definition of needs Sourcing process Solicitation process Evaluation of offers Review of award of contract Contract signature Delivery – completion of contract

9. Before you start a procurement process, be aware and aligned with… Before purchasing SUSTAINABLE PROCUREMENT POLICIES ETHICS PLANNING Purchasing process DEFINE NEEDS FIND SUPPLIERS GET OFFERS EVALUATE OFFERS REVIEW PROCESS AND AWARD CONTRACT ISSUE CONTRACT PURCHASE ORDER / CONTRACT METHOD AND COMPETITION SOLICITATION DOCUMENTS TENDER PERIOD BID RECEIPT AND OPENING Dealing with suppliers EMERGENCY PROCUREMENT LOGISTICS CONTRACT ADMINISTRATION

10. Definition of needs Milestone Formulation of technical specifications (for goods) or terms of reference (for services); considerations like ethics and sustainability shall flow into the process Activity Approx. timeline in weeks 2 - 12 weeks Subject to involvement of technical experts and pre - clearance and approval process of terms of reference/scope of works; design review if provided by partner/donor etc. What can go wrong? Delay incurred by stakeholders involved; misunderstanding in what the requirement really is

11. Sourcing process Milestone Activity Review supplier base and determine level of dissemination of bidding document, market research (local / international) Approx. timeline in weeks 1 - 3 weeks Subject to whether an Expression of Interest or pre - qualification exercise will be conducted What can go wrong? Failed or flawed tender results caused by identification of insufficient numbers of qualified bidders; limitation to competition through inappropriate dissemination of tender; no understanding of localconditions, i.e., what is available, local practices and techniques,climate, soil etc.

12. Solicitation process Milestone Activity Issuance of solicitation document (ITB/RFP) – when the estimated value of your purchase is $50,000 or above Approx. timeline in weeks 2 - 3 weeks preparation plus: 4 weeks ITB 6 weeks RFP What can go wrong? Delay through non pre - clearance/approval of documentation by Procurement Advisor/PA for quality etc. reasons

13. Evaluation of offers Milestone Activity Evaluation of formal compliance (capacity, etc.), technical and financial proposal, final recommendation Approx. timeline in weeks 1 - 3 weeks Subject to complexity, stakeholders involved What can go wrong? Delay panel cannot reach agreement through clarifications with bidders; delay if technical evaluation Sustainable Procurement Practice Group – Introduction to Procurement for Project Management Foundation Course

14. Review of award of contract Milestone Activity Contract negotiations, Review, pre-clearance, clearance, approval, contracts committee/s etc. if applicable Approx. timeline in weeks 1 - 2 weeks 3- - 5 weeks after approval of award Subject to value, complexity, reviews required as per procurement authority etc. What can go wrong? Failure of negotiations , Delays caused by poor withdrawal of selected bidder submission to the CPCs and resulting rejection

15. Contract signature Milestone Physical signing of the contract Activity Approx. timeline in weeks What can go wrong? If no negations, contractor may not agree with UNOPS contract Delays through official signing ceremony in the presence of donors and community format and/or general conditions of contract

16. Delivery – completion of contract Milestone Activity Contract administration / Mobilization time as of contract management phase signature, if applicable In accordance with the delivery Approx. timeline in weeks 2 weeks schedule in the contract after contract signature What can go wrong? Delay in delivery Delays in mobilizing resources inability of contractor to perform like staff and equipment; delay in force majeure delivery of materials

17. Approximate timelines of formal methods of solicitation until contract signature: Invitation to Bid (ITB) Min: 14 weeks Max: 34 weeks Request for Proposal (RFP) Min: 10 weeks Max: 36 weeks It is possible that the ITB / RFP process will be shorter than this but when planning we should provide for an appropriate time contingency. The above timelines to not take into consideration the actual delivery and completion times of a procurement activity.

18. CAP-NET Project and Pre-selection • UNDP has pre-selected the Networks and their hosts according to its procurement rules & pursuant to the project agreement • No need for UNOPS to undertake a complete procurement process • Thresholds for review and award of contracts with pre-selected suppliers follow the thresholds and delegation of authority for award of contracts resulting from the use of formal methods of solicitation • Reasonableness of cost must still be justified (entered in the Award Document)

19. CAP-NET Project and Pre-selection; Milestones and time-frame Definition of Needs: Networks together with CAP-NET Secretariat develops TOR for a specific activity Time-frame: 2-3 weeks Sourcing Process: N/A Time-frame: N/A Solicitation Process: N/A Time-frame: N/A Evaluation of Offers: CAP-NET Secretariat verifies the offers/proposals submitted by the Networks Time-frame: 2 weeks – depending on availability of staff

20. CAP-NET Project and Pre-selection; Milestones and time-frame Review and Award of Contract: CAP-NET Secretariat reviews the offers/proposals and draws up an Award Document. If the single value is below $50,000 the contract can be awarded by DOA* Level 1 (Themba). If the single value is $50,000 or above or the cumulative value of contracts issued to the same network in the last 12 months is $50,000 or above it needs to be awarded by DOA Level 2 or above (Sr. Portfolio Manager at UNOPS in CPH). Time-frame: 1-2 weeks *Delegation of Authority

21. CAP-NET Project and Pre-selection; Milestones and time-frame Contract Signature: Once the Award Document has been approved, the contract can be signed Time-frame: 1-2 weeks Delivery – Completion of Contract: Depends on nature of services carried out Time-frame: N/A

22. CAP-NET Project and Pre-selection; Milestones and time-frame Overall: 5 milestones Minimum 6 weeks; maximum 8 weeks for the complete process N.B. Often the time-frame is shorter than this but when planning we should provide for an appropriate time contingency.