Procurement is the overall process of acquiring goods, civil works and services which includes all functions from the identification of needs, selection and solicitation of sources, preparation and award of contract, and all phases of contract administration through the end of a services’ contract or the useful life of an asset.
As a public organization entrusted with donor funds and committed to supporting developing economies, UNDP abides by the following principles:
Best Value for Money means selection of the offer, which presents the optimum combination of life-cycle costs and benefits, which meet the end-users’ needs. Best Value for Money is the result of several factors, including quality, experience, the vendor’s reputation, and parameters that measure how well the good or service allows the organization to meet its social, environmental or other strategic objectives.
Fairness, Integrity and Transparency, which ensures that competitive processes are fair, open, and rules-based. All potential vendors should be treated equally, and the process should feature clear evaluation criteria, unambiguous solicitation instructions, realistic requirements, and rules and procedures that are easy to understand.
Effective International Competition, understood as giving all potential vendors timely and adequate information on UNDP requirements, as well as equal opportunity to participate in procurement actions, and restricting them only when it is absolutely necessary to achieve UNDP development goals.
In the best interest of UNDP, which means that any business transactions must conform to the mandates and principles of UNDP and the United Nations.
UNDP Procurement is based on competitive bidding. Depending on the type, complexity, size and value of the project and its procurement elements, commonly used methods of solicitation include:
Micro-purchasing is a simplified procurement method for readily available goods, standardized services and small works, where contract amounts do not exceed US $5,000. Such purchases may constitute a significant volume of UNDP’s total procurement, but their aggregate value remains relatively low. A simplified process is preferred to reduce transaction costs. Where canvassing is done of at least two vendors, the one compliant with requirements and offering the lowest price shall be awarded the contract. Where the vendor with the second lowest price offers significantly superior quality, and the price is higher by not more than 10 percent, the vendor may be selected if the budget can sufficiently cover the price difference. Superior quality refers to offers that have exceeded pre-determined requirements. It does not apply to features, qualities or characteristics not originally indicated as requirements.
Request for Quotation (RFQ)
A Request for Quotation is used to procure readily available goods, services or works, or any combination thereof. A written request with a clearly described requirement is sent to a vendor, soliciting a written price quotation. A request for quotation is mandatory for contract values ranging from US $5,000 to US $200,000. At a minimum, a request for quotations should include specifications, delivery terms and delivery location, among other considerations. It should generate a minimum of three responsive offers. It is best to invite more than three vendors to participate, since some may not provide adequate offers, while others may not submit an offer
Invitation to Bid (ITB)
An ITB is a formal invitation to submit a bid, usually associated with requirements that are clearly and concisely defined, with an estimated procurement value of US$200,000 or more. Normally price is the sole determinant in making an award. Where all technical criteria are met, award is made to the lowest bidder.
Request for Proposal (RFP)
An RFP is a formal request to submit a proposal, usually associated with requirements for services, which cannot be clearly or concisely defined, with an estimated procurement value of more than US$10,000. Price is only one of several factors comprising the evaluation criteria. Award is made to the qualified bidder whose bid substantially conforms to the requirement set forth on the solicitation documents and is evaluated to be the lowest cost to UNDP.
In some cases, exceptions to competition are being made and direct contracting is used. This usually happens when a Long-Term Agreement (LTA) is in place, either globally (HQ) or locally (at country office level).
Evaluation and Comparison of Offers Process
Evaluation is the process of assessing offers and submitted proposals in accordance with established evaluation methodology and criteria, with the goal of obtaining the best value for money. The process is conducted in a fair and transparent manner to ensure equal treatment of all bidders.
Depending on the selected approach, technical criteria evaluated either based on a compliance/non-compliance (pass/fail), typically applied to ITBs and RFQs, or on a weighted scoring system (rating by numerical points), typically used for RFPs.
Upon the receipt and opening, bids evaluated by an evaluation team created and appointed by the Business Unit.
All bids evaluated against the criteria stipulated in the solicitation documents.
No new criteria may be introduced and used to evaluate bids or be used as justification for the selection of an offeror, if such criteria have not been required of the bidder at the time of solicitation.
Representatives from the funding source, the client organization, or national representatives may participate in the evaluation process only as observers. All observers and participants in the evaluation team sign a Declaration of Impartiality.
UNDP’s vendor protest procedure provides an opportunity for appeal to those persons or firms not awarded a purchase order or contract through a competitive procurement process. In the event that a Proposer believes that it was not treated fairly, the following link provides further details regarding UNDP vendor protest procedures. Please consult UNDP Policy against Fraud and other Corrupt Practices.
All past competitions (winner name and awarded contract amount) can be found in the Tenders Awards (new window will open).