DOING BUSINESS WITH THE UNITED NATIONS (UN) Presented by Niels Ramm United Nations Office for Project Services (UNOPS) Prague, 21 November 2011

How to do Business with the United Nations (UN) HLCM Procurement Network UN Procurement Statistics UN System of Organisations Finding Information – UNGM General UN Procurement Procedures

High Level Committee of Management’s Procurement Network The Procurement Network - Heads and Directors of 40 UN Agencies. Focuses on: Increased Access for Suppliers Business seminars Special focus on suppliers from developing countries Harmonisation Guidelines for Harmonized UN Procurement at the Country Level Common Financial Regulations and Rules and General Terms & Conditions Sustainable Procurement Guidelines on IT, Furniture, Cleaning Products, Catering, Vehicles etc. Sustainable Procurement Guide Professional Development Recognition of procurement as strategic function Professional Certification Knowledge Sharing Vendor Management (UNGM) UNGM = Common UN Procurement Portal Vendor Eligibility UNCCS (material codes) Projects on Collaborative Procurement

Statistics (UN procurement system)

Total UN procurement of goods and services (UN System) 2006-2010 USD Million 14,544 13,797 13,594 10,113 9,404

Volume of procurement of the 10 principal UN Agencies Total volume 2010: USD 14.5 billion USD Million

10 major countries of supply to the UN System 2010 USD Million Total UN 2010 procurement volume: $14.5 Bn No. of supplier countries: 191 Procured from USA: 10% Procured from France: 3%

Major items procured by the UN System Goods Food & Nutrition Pharmaceuticals & vaccines Motor vehicles & parts Textiles, incl. clothing, tents, blankets, mosquito nets etc. Medical, lab. & hospital equipment Computer & IT equipment, incl. software Petroleum & fuel products Books, paper, office stationery & supplies Furniture Services Transport services Construction, engineering and architectural services HR, consultants and project staff Building & machinery maintenance & repair Travel & tourism Leasing & rental services Computer & IT services Financial & auditing services Management services & consultancy

UN procurement from Czech Republic Buying from Czech Republic (USD1000) 2010 UN/PD 5,176.46 IAEA 4,025.94 FAO 1,638.33 UNDP 827.02 UNICEF 369.20 UNOPS 157.03 Thousand USD

Major goods and services supplied by Czech Republic Radiotherapy Equipment Motor Vehicles Tyres Software   Services Training Services HIV Prevention Study Final Report Best practices in the Czech Republic Intravenous Drug Users and HIV/AIDS - 2 Study Tours to the CR   Introduction, project objectives The company ResAd, Ltd. won a tender and was contracted by UNDP´s Bratislava Regional Centre in order to organize 2 study tours on „Best practices in the Czech Republic: Intravenous Drug Users and HIV/AIDS”. The substance of the contract was organization and conduction of the educational tour for 20 persons of Serbia experts from drug field whose work is related to methadone maintenance treatment (MMT) services (including medical doctors working in free settings and in prisons, nurses with the same background, and social workers); representatives of NGOs or community representatives who are dealing with NEP programs; policy makers and other professionals working in- or with specialized services for drug users. The study tour participants were divided into two consecutive groups. The main objective of the study tours was to scale up governance aspect of HIV/AIDS through improvement of capacity of services and programmes for intravenous drug users, and through sharing of experiences with the Czech experts in this field.

UN System of Organisations There are many organisations of the UN and this can be somewhat confusing. With the upcoming slides I hope to help explain the structure of the UN to you.

Overview The United Nations is not a single organisation but is in fact made up of a variety of organisational entities (agencies, organisations, commissions, programmes, funds, etc). A market in itself where each organisation has a different function and it’s own characteristics and requirements i.e. UNICEF, WFP, UNHCR Important to recognise the above if you wish to do business with the UN as each organisation has its own procurement department and processes and procedures may differ.

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Le Nazioni Unite nel mondo Budapest UNHCR OPCW UNEP UNAIDS Copenhagen UNOPS HQ - UNGM UNDP/Procurement Support Office UNICEF Supply Division UNFPA Procurement Unit 1 1

Overview EACH ORGANISATION . . . has its own special requirements for goods and services may conduct its own procurement activities follows, in general, common principles for procurement rules and regulations constitutes a separate and distinct customer/partner

Finding Information

United Nations Global Marketplace (UNGM) Web-based Information UN Procurement’s single commercial and procurement portal: United Nations Global Marketplace (UNGM) www.ungm.org

Business Information 1. The Annual Statistical Report UN procurement by country UN Agency procurement by country, commodity or service Purchase orders and Contracts (over USD 30,000) placed by agency, by country of vendor, value and description of goods or services Top Ten items procured by Agency 2. The General Business Guide Lists all UN Organisations, fields of activity, contact persons, procurement activities and requirements and registration procedures Available from www.ungm.org

Registering as a Potential Supplier

The United Nations Global Marketplace (UNGM) UNGM = the procurement portal of the UN System UNGM brings together UN procurement staff and the supplier community UNGM acts as a single window, through which potential suppliers may register with the 20 UN Agencies using the UNGM as their supplier roster  the UNGM therefore provides an excellent springboard to introduce your goods and services to many UN organisations, countries and regions by only completing one registration form.

Procurement & the United Nations ultimate goals The UN is committed to sustainable and equitable development World leaders and the UN have formed a new global partnership to reduce extreme poverty with a deadline of 2015 – a number of targets known as the Millennium Development Goals The UN Secretary General has asked all UN agencies, funds and programmes to become climate neutral and “go green” Procurement is now recognised as a relevant component of the common effort towards sustainability

First steps: the UN Global Compact and the Supplier Code of Conduct The UN strongly encourages all vendors to actively participate in the Global Compact The Global Compact promotes principles of human rights, labour, environment and anti-corruption www.unglobalcompact.org The UN supplier Code of Conduct spells out the principles that should inspire the business practice of suppliers The Global Compact is a voluntary initiative promoted by the UN Secretary General and aimed at businesses that are committed to align their operations and strategies with recognised principles of human rights, environment, labour and anti-corruption. The UN recognizes that reaching the standards established in this Code of Conduct is a dynamic rather than static process and encourages suppliers to continually improve their workplace conditions. The UN supplier Code of Conduct provide the minimum standards expected of suppliers to the UN Reaching the standards is a dynamic process; suppliers are encouraged to continually improve their workplace conditions

Procurement from Global Compact members

UN Procurement Procedures

Common Guidelines for UN Procurement system Procurement activities of the UN system are based on the following principles: Advancing the interests of the organisation Obtaining value for money Ensuring probity through inter alia, fairness, integrity, transparency and effective competition Accountability for outcomes These Common Guidelines cover procurement stages from sourcing to execution of a procurement contract

How is the procurement method decided? the value of the procurement the nature of the goods and services to be procured critical dates for delivery

Types of solicitation Request for Quotation (RFQ) - less formal solicitation used for lower value procurement (i.e. USD 30,000 *) Invitation to Bid (ITB) - formal solicitation method for well-defined goods (or services); contract award is based on lowest acceptable bid. Request for Proposal (RFP) - formal solicitation whereby the contract award is based on a combined (weighted) evaluation of both the technical solution and price. * Thresholds may vary

Thresholds/Types of solicitation Up to 30,000 USD* - Informal, simplified acquisition procedure - Requests for Quotation (RFQ) - Lowest priced, technically acceptable bidder or best value bidder (evaluated). Above 30,000 USD* - Invitation to Bid (ITB) and Request for Proposal (RFP) - Open and formal: advertised (on the web) generally larger shortlist (minimum 6 potential bidders, 3 to comply) - Public bid opening - Review and Recommendation by Contract Committees * Thresholds may vary

Other steps in the procurement process Expression of Interest Used as part of market research Identifying and prequalifying suppliers Keep abreast with new developments Does not necessarily result in procurement Prequalification Can form part of ITB/RFP Used for high-risk goods such as pharmaceuticals, condoms Used for where high impact if delivery fails, such as elections Confirming manufacturing, quality standards, other issues Very specialised for pharmaceuticals Post Qualification/Preshipment Inspection Used as part of testing pre-contract stage Ensuring equipment works under special conditions

In addition . . . Long Term Agreement (LTA)/Frame Agreement Based on ITB or RFP process 2-4 years period Potentially more than one LTA for same goods/service Single tendering exercise reduces administrative effort The supplier benefits in terms of continuity of supply Direct Contracting Exception to the rule In case of extreme emergency Sole source If competitive bidding process has failed for valid reason Very stringent controls and has to be well justified

How are vendors identified? Competitive suppliers of previous procurement - Past performance Suppliers of the required goods or services, found on the UN Global Market - Codification Through calls for Expression of Interest (EOI) - Notices Search of World Wide Web Trade Missions, Chambers of Commerce Exchange with other UN Agencies

Evaluation Criteria Technical Requirements Acceptance of UN payment terms, terms & conditions, contract template, liability, legal capacity, etc. Technical Requirements Delivery Terms (INCOTERMS 2000) Delivery Time Recognised International/National Standards Supporting Documentation Proven Production Capacity & Financial Strength Warranty Conditions Appropriate After-sales Service Previous Contract References Price

Evaluation Criteria for Requests for Proposal (RFP) Proposals are always evaluated according to the principle of “Best Value“ Best value: best overall benefit, both technically and financially → Lowest cost may not necessarily be best value for money The evaluation criteria are set out in the RFP Generally, the technical proposal will be given 70%-80% of the overall score, and 20%-30% will given to the financial proposal

Evaluation Criteria for Invitations to Bid (ITB) Proposals are always evaluated according to the principle of … “lowest price meeting technical specifications and stated requirements”

Thank you & good luck! Possibility for Question and Answers.