Procurement Process Outlook Acquisition Planning Definition of Requirements

Procurement Process Outlook Acquisition Planning Definition of Requirements Sourcing Suppliers (EOI etc. ) Solicitation (RFQ, ITB, RFP) Source Selection Plan SSP Payment Technical Evaluation Commercial Evaluation Delivery of Goods & Services Contract Management/ Administration Award Review Contract Award 1

Source Selection Plan 1. Description of the requirement 2. Sourcing & Identification of vendors 3. Solicitation type (RFQ, RFP, ITB); 4. Basis of award 5. Contractual instrument 6. Planning & Procurement Activity Schedule 7. Evaluation Team (s) CRUCIAL DOCUMENT FOR A SUCCESSFUL PROCUREMENT EXERCISE 8. Evaluation Criteria & Weighting 9. Risk Factors 10. Performance Indicators 2

Why to think clearly and do things right from DAY 1? To ask the right questions at the right Stage / Timely ABILITY TO INFLUENCE Conceptual Stage Issue Bid PROCESS PROGRESS

Four guiding principles in Procurement 1 The interest of the United Nations 2 Fairness, integrity and transparency 3 International Competition 4 Best Value for Money 4

Why is the definition of requirement essential? Informing Vendors of the nature of the UN requirements and what is needed to fulfil them Constituting the basis for evaluating submissions to determine if they satisfy the UN’s requirements Binding the successful vendor to perform in accordance with the specifications, SOWs or TORs 5

Before starting defining the requirement… Have in mind the following 6 messages: ü Identify the exact need (technical & quality) ü Avoid over-specifications (cost impact) ü Avoid under-specifications (does not meet needs) ü When is it needed (avoid delays / losses) ü Your work: Readable, Traceable and Documented forever. ü What you put on the market reflects directly on the organization (shine a light / cast a shadow). 6

Before starting defining the requirement… Whose responsibility? ü Is formally the responsibility of the Requisitionner (Cf. Shopping Cart): q Ensure that description is • Free of ambiguities • Clear, Generic • Not restrictive, not biased toward a specific supplier ü Procurement Officer shall: q Review the requisition for completeness, q Identify sources of supply, q Inform on procurement activities, q Advice on the best method to obtain the G&S… 7

Definition of requirements – Specification type 1. FUNCTIONAL Concentrates on what does the product / service shall bring to the client. Less focus on the HOW, but more on the WHAT FOR? Example: Construction of helipads 8

Definition of requirements – Specification type 1. FUNCTIONAL 2. PERFORMANCE Focus on what is to be achieved rather than providing a fixed description of how it should be done. Example: CITS – Solicitation for lease of fiber optic 9

Definition of requirements – Specification type 1. FUNCTIONAL 2. PERFORMANCE 3. TECHNICAL Define exact design and details of a goods (material to be used, required manufacturing process…) Risks: Needed, but to be described very carefully not to limit competition 10

Definition of requirements – Types CORE REQUIREMENTS Essential Goods and Services, which by their nature lend themselves to local procurement Ø EXAMPLES: Fresh food, Building materials, Waste disposal, Catering and cooking services, Leases/rental of buildings/land, warehousing, laundry, gardening services, custom clearance, freight forwarding…. Ø MISSION’S DELEGATION: Up to USD $1, 000 delegation. Above, DFS Technical Clearance and LPA are required. Ø REPORTING: No later than 30 days for core requirements that exceed $500 K to USG/DFS. Quarterly to ASG/OCSS and Director, PD. 11

Definition of requirements – Types SPECIAL REQUIREMENTS Goods and Services, which by their nature lend themselves to centralized procurement Ø EXAMPLES: Chartering of aircraft, vehicles, pharmaceuticals, generators, ICT Hardware/software. Ø MISSION’S DELEGATION: Zero amount delegation. Technical Clearance is always required and then LPA. Ø REASONS: Standardization, economies of scale, expertise, risks, etc. 12

Sourcing - Goal A key element of obtaining Best Value for Money (BVM) in the solicitation process is identifying vendors to fulfill the Requisitioners’ needs. The goal is to have multiple vendors that can meet or exceed the performance criteria so that competitive prices will be obtained. Attract as many as possible vendors to promote effective competition and obtain the best available solution to match our requirement. 13

Sourcing - Responsibility Sourcing is a key responsibility of the procurement function, which to a large extent, must anticipate and fulfill the requisitioners’ needs and be able to offer a sourcing solution at all times as procurement is the interface between the organization and the commercial world. The Procurement Officer shall always strive to ensure equitable geographic representation of invited vendors. The sourcing of UN Secretariat requirements via vendors from developing countries or countries with economies in transition should attract the priority of the procurement staff. 14

Sourcing – In a nutshell 1. Poor Sourcing = Poor Number of Proposals = Poor solution 2. Poor Sourcing = Case may be rejected by HCC Committee 15

Technical Evaluation Criteria – Nature of criteria VALID 1. Criteria must be related to the required performance of the Goods & Services. 2. Make sure that all critical requirements stated in the SOW are covered by the technical evaluation matrix (i. e. comprehensive evaluation) => What if a vendor is technically compliant, but an essential requirement is not met and was not included in the technical evaluation matrix? ? 3. The feature being evaluated will be critical in the execution of the contract. 4. Importance of criteria that will bring differentiation among the vendors. 16

Technical Evaluation Criteria – Nature of criteria VALID OBJECTIVE Ensure that Evaluation is consistent among all vendors even if there are different evaluators Evaluation must be understood by third parties 17

Technical Evaluation Criteria – Nature of criteria VALID OBJECTIVE MEASURABLE Feelings are not measurable… Years of experience, number and value of projects, capacity to move 100 containers simultaneously, number of trucks are measurable! 18

Technical Evaluation Criteria – Nature of criteria VALID OBJECTIVE MEASURABLE IMPARTIAL Criteria shall not give an unfair advantage to one vendor. Example: mandatory to have 10 years experience with the UN as pass/fail criteria But: one vendor may have a strong position on the national market, which will remain an advantage for him and may benefit to the UN. 19

Technical Evaluation Criteria – Method of evaluation Well defined criteria are essential to: 1. Compare the merits of offers that can vary widely in form & substance, in other words: develop the ability to compare “apples with apples”. 2. Minimize the UN’s risk that the selected Supplier will not be able to perform the Contract satisfactorily. 3. Identify the best match to the requirement (it is not about comparing proposals among themselves but comparing proposals against UN ‘s requirements).

Commercial Evaluation - Responsibility The Procurement Officer or Commercial Evaluation Team, in case of complex financial proposal, is responsible for developing and evaluating all of the commercial or non technical Evaluation Criteria, to be included in the Source Selection Plan. Keep in mind: 1. The Procurement Officer or Commercial Evaluation Team should formally document the Commercial Review of Submissions including a comparison of the Submissions and the rationale for recommending a vendor for award. 2. Such a report shall be signed by the Officer(s) who participated in the Evaluation. 21

Commercial Evaluation & Best Value for Money Informal Solicitation Formal Solicitation Request For Quotation Invitation to Bid Request For Proposal USD 4, 000 up to USD 40, 000 Lowest acceptable cost Above USD 40, 000 “qualified bidder whose bid substantially conforms to the requirements set forth in the Solicitation Documents and is evaluated to be the one with the lowest cost to the United Nations” Above USD 40, 000 “to the qualified proposer whose proposal, all factors considered, is the most responsive to the requirements set forth in the Solicitation Documents”. Practice = 40% for CE. 22