1. UNDP Procurement Management Operations Manager, UNDP China 2 July 2015 1

2. Content Procurement Definition Procurement Support Office Procurement Principles Contract types Procurement Process Types of Competition Procurement Method Bid Evaluation Procurement Oversight and Review Key Steps in Atlas 2

3. 3 What is Procurement The term “procurement” refers to the process of acquiring goods, service and civil works. The process spans the whole cycle from identification of needs through the end of a services contract or the useful life of an asset.

4. Procurement Support Office New York, USA PSO in NY: policy-making and oversight Copenhagen, Denmark PSO Supports to 166 Country offices Responsibility for procurement of goods and services related to strategic objectives, i.e. elections, crisis prevention and recovery, Global Fund etc.

5. UNDP Procurement Principles 1. Best Value for Money: Selection of the offer that best meets the end-user’s needs 2. Fairness, Integrity and Transparency: are responsible for protecting the integrity of procurement process and maintaining fairness in UNDP’s treatment of all Offerors 3. Effective Competition: provide all eligible prospective Offerors with timely and adequate notification of UNDP’s requirements and an equal opportunity to tender for the required procurement 4.The interest of UNDP: protect interest of UN and UNDP 5

6. Contract type Purchase Order/PO: goods Institutional Services Contract: service from a firm at value below US$ 30k Professional services contract: service from a firm at value above US$ 30k Individual Contract (IC): consulting service from individual (RLA & NRLA: engage an individual from a firm) Civil works Contract: for civil works Long Term Arrangement: apply to all above mentioned contract types with long engagement

7. 7 Specification Terms of Reference Statement of Works Evaluation of Bidders Procurement Process Prepare Invitation for Bidding Documents Invitation for Bidding Choose Supplier Contract Management Define Procurement Modality Define Needs Appraisal of Procurement Signing of Contract

8. Types of Competition Open International Competition: provide equal opportunity to the universe of eligible vendors Limited International Competition: narrowing the competition field into a short list of prospective offerors National Competition: under certain circumstances 8

9. Procurement Method Contract ValueType of Requirement Method of Solicitation [2] [2] Type of Competition Micro- Purchasing Below USD 5,000Goods, Services, or Simple works Canvassing (by phone, by internet, by shopping, etc) Limited International or National RFQUSD 5,000 to 99,999 Goods, Services, or simple works Written Request for Quotation Limited International or National ITBUSD 100,000 and above Goods or Works Advertisement in International media Open International RFPUSD 100,000 and above ServicesAdvertisement in international media Open International Direct Contracting Any Amount within permissible circumstances Services, Goods, or Works Direct Invitation or Negotiation None 9

10. 1. Micro Purchasing Micro Purchasing <US$ 5,000  Small – value purchase goods or service below US$ 5,000  Use simple canvassing form (over phone, internet, or through local vendors)  Record all information and price collected  The person who collected the data must be accountable for the correct and accuracy of all information and data, sign it  Approved by staff who has the delegated authority

11. 2. Request for Quotation (RFQ) REQUEST FOR QUOTATION (RFQ)  Commonly used for procurement of simple goods/service and aggregate amount less than $100,000  Advertisement is not a must  Collect at least 3 formal quotations  Prepare quotation comparison  CAP review is required between $50k-150k  Award is typically based on lowest price among responsive bidders

12. 3. Invitation to Bid INVITATION TO BID (ITB) < US$ 100,000  used for supply of goods or works where requirements are clearly defined (little room for deviation)  Advertisement is mandatory for at least 2 weeks for contracts over US$ 100,000  Formal bid opening is required  Evaluation by a ad-hoc evaluation committee is required  Contract US$ 150K RACP review  Award is typically based on lowest price among responsive bids

13. 4. Request for Proposal Request for Proposal (RFP) > US$ 100,000  Use for services or complex goods + range of approaches  Adv is mandatory for at least 2 weeks for contracts > US$ 100,000  2 formal bid openings are required: technical proposal and financial proposal  Evaluation by a ad-hoc evaluation committee is required  Contract US$ 150K RACP review  Award does not need go to the lowest priced offer, and could go to the higher rated proposal, provided it is meet all evaluation criteria and the budget ceiling

14. Bid Evaluation: goods Compliance with requirements relating to technical design features, specifications, functions and etc Compliance with start-up, delivery or installation deadlines Demonstrated ability to comply with critical provisions such as execution of the Purchase Order Demonstrated ability to honor important responsibilities and liabilities allocated to Supplier listed in the ITB (e.g. performance guarantees, warranties, or insurance coverage, etc). Proof of after-sales service capacity and appropriateness of service network. Compliance with pricing conditions set in the ITB Responsive bidders means to meet all above technical requirements Award is typically based on lowest price among responsive bids 14

15. I.Management : Track Record on the work required, Experience with UN/Development Organizations, Technical Capability, Quality Standard Accreditations, Financial strength, Credit lines, Reputation, etc II.Technical Proposal: Full compliance to specifications/ requirements/TOR, thorough understanding of the requirement, appropriateness of methodology to the local conditions, practicality of approaches, acceptability of implementation timelines, etc. III.Key Experts: Experience/Qualifications of the team that will be engaged with UNDP, right mix of experts Bid Evaluation Service: Technical Criteria Passing Rate : 70%

16. Evaluation for Service: Financial Offer Two Types of evaluation: 1. Lowest price technically compliant – the award goes to the lowest priced offer among those that obtained 70% and above, provided the price is within the budget for the contract 2. Cumulative analysis – the maximum weight is allocated to the lowest price proposal. All other price proposals receive points in accordance with below formula Fs = 1000 x F1/Fc (Fs = the financial score, F1 = the lowest price, Fc = the price of the proposal under consideration) The highest score will be calculated by formula: HS = ( Ts x 70%) + (Fs x 30%) HS = highest score, Ts = Technical score, Fs = Financial Score

17. UNDP Oversight Provisions  Single layer review – by one committee 17  Committees established at three levels

18. Thresholds for Committee Review Level 1: CAPLevel 2: RACP (For Country Offices Only ) Level 3: ACP Competitive Procurement Process (except for ICs) Any contract [3] or a series of contracts including amendments to be awarded to a vendor in a calendar year that in aggregate has a cumulative value: [3] Between USD 50,000 and up to the DPA (China: 150K) Above the DPA and up to USD 2 million HQ units : Above the DPA COs: Above USD 2 million 18

19. Review Committees Terms of Reference  Ensure UNDP procurement general principles adhered to: - BVFM - Fairness, integrity and transparency - Effective international competition - The interest of UNDP  Mitigate UNDP risks  Is covered by the requisite funding and programme  Check against sanctions and watch-lists  Recommend for approval or reject  Approval: CO level by CD; RACP level by Regional CPO; and ACP level by CPO 19

20. Key Procurement Steps in Atlas Requisition Create requisition: requesting unit Approve requisition: team leader Vendor Create vendor: buyer Approve vendor: Finance Officer/OM PO Create PO: buyer Approve PO: Operations Manager or Deputy Country Director Receipt Receipt: requesting unit Payment request: requesting unit voucher Voucher: Fin Asst Approve: Finance Officer or Operations Manager close PO Close PO: buyer 20

21. PO and Non-PO in Atlas  PO transaction: A Purchase Order for purchasing request exceeding USD2,500 must be raised in Atlas and the transaction should be made through a PO in Atlas.  Non-PO transaction: For purchases up to USD2,500, it can be procured without a PO in Atlas but however, the expense should be reflected by Finance through a AP voucher in Atlas.  Asset Management: if the contract amount is USD 1500 and above for an asset, PO is still needed 21

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