How we do business
As per UNDP’s Financial Regulations and Rules, the following general principles must be given due consideration while executing procurement on behalf of the organization:
- Best Value for Money
- Fairness, Integrity, Transparency
- Effective International Competition
- The Interest of UNDP
1.1. Best Value for Money
By and large the core governing principle of UNDP is to obtain the best value for money. In the procurement process, obtaining “best value for money” means selection of the offer, which presents the optimum combination of life-cycle costs and benefits, which meet the Business Unit’s needs. Best value for money should not be equated with the lowest initial price option rather requiring an integrated assessment of technical, organizational and pricing factors in light of their relative importance (reliability, quality, experience, reputation, past performance, cost/fee realism and reasonableness). The Business Unit’s parameters can also include social, environmental and other strategic objectives defined in the procurement plan. The principle of best value for money is applied at the award stage to select the offer that effectively meets the stated requirement.
1.2 Fairness, Integrity and Transparency
As competition is the basis for efficient, impartial and transparent procurement; Business Units are therefore, responsible for protecting the integrity of the procurement process and maintaining fairness in UNDP’s treatment of all Offerors. Sound procurement (openness of the process; probity; complete and accurate records; accountability; confidentiality) establishes and then maintains rules and procedures that are attainable and unambiguous.
1.3 Effective Competition
The objective of UNDP’s competitive processes is to provide all eligible prospective Offerors with timely and adequate notification of UNDP’s requirements and an equal opportunity to tender for the required goods, civil works and services. Business Units should ensure that restrictions are not placed on the competitive processes limiting the pool of potential Offerors, as UNDP does not accept procurement awarded to exclusive Contractors or countries, unless otherwise explicitly mentioned in a Donor agreement.
1.4 Interest to UNDP
In practice, the specific procurement rules and procedures established for the implementation of a programme are contingent upon the inpidual circumstances of the particular case; however four considerations consistently guide UNDP’s interest for the acquisition of inputs: The need for economy and efficiency in the implementation of the programme, including the procurement of goods, civil works and services involved; access to procurement opportunities for all interested and qualified Offerors worldwide, except where other criteria mandated by the Security Council or General Assembly prevails; giving all eligible Offerors the same information and equal opportunity to compete in providing goods, civil works or services; and the importance of transparency in the procurement process.
Depending on the nature and size of the project and its procurement elements, UNDP may use any of the following competitive methods set out in these Guidelines to procure goods, civil works or services. Commonly used competitive methods include:
- Open International Competition
- Limited International Competition
- Local and/or National Competition
UNDP regards open international competition (OIC) as the preferred method of procurement with its overall ability to achieve all principal objectives of the intended programme. However, in many circumstances where it is determined that OIC is not feasible, staff may employ use of an alternative method. In such, UNDP requires its staff to ensure that the selected method is both economic and efficient (i.e., obtains the best value for money). All methods of procurement irrespectively must be open and fair to all interested Offerors to the extent possible.
2.1 Procurement procedure
Open International Competition
Open international competition intends to provide all eligible and qualified Offerors adequate and timely notification of UNDP’s requirements and to provide them equal access and fair opportunity to compete for contracts of required goods, civil works or services valued at USD 100,000 or more. Initiated by an advertisement, OIC invites interested Offerors to request the solicitation documents from the Business Unit.
For contracts valued between USD 100,000 and USD 500,000, advertisements should be posted on IAPSO’s website and/or as a Procurement Notice on UNDP’s website for ten to thirty days depending on the complexity and nature of the goods, civil works or services to be obtained.
For contracts valued greater than USD 500,000, advertisements should in addition be made in Development Business and/or a relevant publication of wide international circulation. UN Development Business (UNDB) is a publication providing comprehensive information on opportunities to supply goods, civil works and services for projects financed by the United Nations, governments and International Financial Institutions. UNDB is published both online and in paper form. The paper version is printed twice monthly and the online version (e.g., UNDB Online) is updated several times a week.
Limited International Competition
Limited international competition (LIC) narrows competition amongst an ongoing shortlist of qualified Suppliers selected in a non-discriminate manner by the Business Unit either from rosters, prequalification, expressions of interest, etc. LIC is appropriate where OIC is unsuitable, exigent circumstances persist or the global market retains a limited availability of the required goods, civil works or services.
Local competition, unlike the aforementioned international competitive methods is generally exercised for procurement in the country where the programme is to be deployed. Business Units may use local competition where:
- civil works are scattered geographically or spread over time and the country has a sufficient base of Suppliers (i.e., minimum of three);
- professional services are valued at USD 30,000 or less;
- goods are available locally at prices below the global market price; or programmes require knowledge of the local/national system (e.g., Human Development Report).
Where applicable, advertisements shall be published in the national gazette or national or local newspaper or local publications to ensure thorough competition.
2.2 Procurement methods
- Request for Quotation (RFQ)
- Invitation to Bid (ITB)
- Request for Proposal (RFP)
- Direct Contracting/Local Shopping