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

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 2

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. 3

4. 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 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) 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 Pre-selection Used when the funding source wants particular suppliers. UNOPS must also justify that the costs are reasonable Emergency A simplified process which can be used in emergencies if pre-approved by the ECPO. 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 Types of procurement 4

5. Types of competitions Open 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 Limited 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 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 Pre-selection Funding source has pre-selected the suppliers according to its procurement rules & pursuant to the project agreement. Reasonableness of cost must still be justified 5

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

7. Solicitation method 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 Solicitation documents 7

8. Overview of milestones 8 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… 9 Dealing with suppliers CONTRACT ADMINISTRATIONLOGISTICS Purchasing process PLANNINGETHICSPOLICIES SUSTAINABLE PROCUREMENT EMERGENCY PROCUREMENT DEFINE NEEDS FIND SUPPLIERS GET OFFERS EVALUATE OFFERS REVIEW PROCESS AND AWARD CONTRACT METHOD AND COMPETITION SOLICITATION DOCUMENTS TENDER PERIOD BID RECEIPT AND OPENING PURCHASE ORDER / CONTRACT ISSUE CONTRACT Before purchasing

10. 10 Milestone Definitionof needs Activity Approx.timeline in weeks - - 212 weeks Subject to involvement of technical experts and preclearance and approval process of terms of reference/scope of works; design review if provided by partner/donor etc. What can go wrong? Delayincurred by stakeholders involved; misunderstanding in what the requirement really is Formulation of technical specifications (for goods) or terms of reference (for services); considerations like ethics and sustainability shall flow into the process

11. 11 Milestone Sourcing process Activity Review supplier baseand determine level of dissemination of bidding document, market research (local / international) Approx.timeline in weeks - - 13 weeks Subjectto whether an Expression of Interest or prequalification 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 local conditions, i.e., what is available, local practices and techniques, climate, soil etc.

12. 12 Milestone Solicitation process Activity Approx.timeline in weeks -23 weeks preparation plus: 4 weeks ITB 6 weeks RFP What can go wrong? -Delaythrough non preclearance/approval of documentation by Procurement Advisor/PA for quality etc. reasons Issuance of solicitation document (ITB/RFP) – when the estimated value of your purchase is $50,000 or above

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

14. 14 Milestone Review of award of contract Activity Approx.timeline in weeks 5-12 weeks after approval of award 3--weeks Subject to value, complexity, reviews required as per procurement authority etc. What can go wrong?,Failure of negotiations withdrawal of selected bidder Delays caused by poor submission to the CPCs and resulting rejection Contract negotiations, ifapplicable Review, pre-clearance, clearance, approval, contracts committee/s etc.

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

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

17. Approximate timelines of formal methods of solicitation until contract signature: 17 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 18 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 19 Definition of Needs Definition of Needs: Networks together with CAP-NET Secretariat develops TOR for a specific activity Time-frame Time-frame: 2-3 weeks Sourcing Process Sourcing Process: N/A Time-frame Time-frame: N/A Solicitation Process Solicitation Process: N/A Time-frame Time-frame: N/A Evaluation of Offers Evaluation of Offers: CAP-NET Secretariat verifies the offers/proposals submitted by the Networks Time-frame Time-frame: 2 weeks – depending on availability of staff

20. CAP-NET Project and Pre-selection; Milestones and time-frame 20 Review and Award of Contract 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 Time-frame: 1-2 weeks *Delegation of Authority

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

22. CAP-NET Project and Pre-selection; Milestones and time-frame 22 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.