UNDP Procurement Management

Operations Manager, UNDP China 2 July 2015

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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

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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.

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.

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

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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

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SpecificationTerms of ReferenceStatement of Works

Evaluation of Bidders

Procurement Process

Prepare Invitation for Bidding Documents

Invitation for BiddingChoose Supplier

Contract Management

Define Procurement Modality

Define Needs

Appraisal of ProcurementSigning of Contract

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

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Procurement Method

Procurement Method

Contract Value Type of Requirement

Method of Solicitation[2]

Type of Competition

Micro-Purchasing

Below USD 5,000 Goods, Services, or

Simple works

Canvassing (by phone, by internet, by shopping, etc)

Limited International or

National

RFQ USD 5,000 to 99,999

Goods, Services,

or simple works

Written Request for Quotation

Limited International or

National

ITB USD 100,000 and above

Goods or Works

Advertisement in International media

Open International

RFP USD 100,000 and above

Services Advertisement in international media

Open International

Direct Contracting

Any Amount within

permissible circumstances

Services, Goods,

or Works

Direct Invitation or Negotiation

None

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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

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

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 needs CAP review and > US$ 150K RACP review

Award is typically based on lowest price among responsive bids

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 needs CAP review and > 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

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

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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 CriteriaBid Evaluation Service: Technical Criteria

Passing Rate :

70%

Evaluation for Service: Financial OfferEvaluation 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

UNDP OversightProvisions

Single layer review – by one committee17

Committees established at three levels

Thresholds for Committee Review

Level 1: CAP Level 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:

Between USD 50,000 and up to the DPA (China: 150K)

Above the DPA and up to USD 2 million

HQ units : Above the DPACOs: Above USD 2 million

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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

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Key Procurement Steps in Atlas

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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

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