Transcript Introduction to Procurement for Project Managers

Procurement Processes in UNOPS;
An Overview
January 2014
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What is procurement?
Procurement is the acquisition of:
• Goods
• Works or services
• Property, plant and/or equipment
Through
• Purchase
• Hire, lease, rental or exchange
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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.
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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
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Types of competitions
Open
Limited
• Default/preferred method of competition for
≥ USD 50k
• A valid reason for not conducting an open
competition must exist
• Advertisement: UNOPS website & other media
specified as mandatory in the project agreement
and wherever suppliers can be reached
• Can be international, regional or national
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
• Funding source has pre-selected the suppliers
according to its procurement rules & pursuant to
the project agreement.
• Short-list must be pre-cleared by a Procurement
Advisor and approved by relevant Procurement
Authority
• Reasonableness of cost must still be justified
• Offer to be received in writing and evaluated
• Justify the reasonableness of the price
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Solicitation method
SERVICES
above
50,000 USD
RFP – REQUEST FOR
PROPOSAL
GOODS,
WORKS
ITB – INVITATION TO BID
2,500 USD
to 50,000
USD
ALL
TYPES
RFQ – REQUEST FOR
QUOTATION
below 2,500
USD
ALL
TYPES
SHOPPING
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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
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Overview of milestones
Definition of needs
Sourcing process
Solicitation process
Evaluation of offers
Review of award of contract
Contract signature
Delivery – completion of contract
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Before you start a procurement process, be aware and aligned with…
Before purchasing
SUSTAINABLE PROCUREMENT
POLICIES
ETHICS
PLANNING
Purchasing process
DEFINE
NEEDS
FIND
SUPPLIERS
METHOD AND
COMPETITION
GET
OFFERS
SOLICITATION
DOCUMENTS
TENDER
PERIOD
EVALUATE
OFFERS
REVIEW
PROCESS
AND AWARD
CONTRACT
ISSUE
CONTRACT
PURCHASE
ORDER /
CONTRACT
BID RECEIPT
AND OPENING
Dealing with suppliers
LOGISTICS
CONTRACT ADMINISTRATION
EMERGENCY
PROCUREMENT
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Definition of needs
Milestone
Activity
Approx. timeline
in weeks
Formulation of technical specifications (for goods) or terms of
reference (for services); considerations like ethics and sustainability
shall flow into the process
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
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Sourcing process
Milestone
Activity
Approx. timeline
in weeks
Review supplier base and determine level of dissemination of
bidding document, market research (local / international)
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 local
conditions, i.e., what is available, local practices and techniques,
climate, soil etc.
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Solicitation process
Milestone
Activity
Approx. timeline
in weeks
Issuance of solicitation document (ITB/RFP) – when the estimated
value of your purchase is $50,000 or above
2-3 weeks preparation plus:
4 weeks
6 weeks
What can go
wrong?
ITB
RFP
Delay through non pre-clearance/approval of documentation by
Procurement Advisor/PA for quality etc. reasons
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Milestone
Activity
Approx. timeline
in weeks
What can go
wrong?
Evaluation of offers
Evaluation of formal compliance (capacity, etc.), technical and
financial proposal, final recommendation
1-3 weeks
Subject to complexity, stakeholders involved
Delay through clarifications with bidders; delay if technical evaluation
panel cannot reach agreement
Sustainable Procurement Practice Group – Introduction to Procurement for Project Management Foundation Course
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Milestone
Activity
Approx. timeline
in weeks
What can go
wrong?
Review of award of contract
Contract negotiations,
if applicable
Review, pre-clearance,
clearance, approval, contracts
committee/s etc.
1-2 weeks
after approval of award
3--5 weeks
Subject to value, complexity,
reviews required as per
procurement authority etc.
Failure of negotiations,
withdrawal of selected bidder
Delays caused by poor
submission to the CPCs and
resulting rejection
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Milestone
Contract signature
Activity
Physical signing of the contract
Approx. timeline
in weeks
What can go
wrong?
If no negations, contractor may not agree with UNOPS contract
format and/or general conditions of contract
Delays through official signing ceremony in the presence of donors
and community
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Milestone
Activity
Approx. timeline
in weeks
What can go
wrong?
Delivery – completion of contract
Contract administration /
management phase
Mobilization time as of contract
signature, if applicable
In accordance with the delivery
schedule in the contract
2 weeks
after contract signature
Delay in delivery
inability of contractor to perform
force majeure
Delays in mobilizing resources
like staff and equipment; delay in
delivery of materials
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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.
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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 preselected 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)
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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
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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
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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
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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.
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