Post on 17-Dec-2015
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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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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
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)
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
Pre-selection
• Used when the funding source wants particular suppliers.
• UNOPS must also justify that the costs are reasonable
Emergency
• A simplified process which can be used in emergencies if pre-approved by the ECPO.
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
Types of procurement
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Types of competitions
Open
• Default/preferred method of competition for ≥ USD 50k
• Advertisement: UNOPS website & other media specified as mandatory in the project agreement and wherever suppliers can be reached
Limited
• A valid reason for not conducting an open competition must exist
• Can be international, regional or national
• Short-list must be pre-cleared by a Procurement Advisor and approved by relevant Procurement Authority
Exception
• 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
• Offer to be received in writing and evaluated
• Justify the reasonableness of the price
Pre-selection
• Funding source has pre-selected the suppliers according to its procurement rules & pursuant to the project agreement.
• Reasonableness of cost must still be justified
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Solicitation method
RFQ – REQUEST FOR QUOTATION
ALLTYPES
2,500 USD to 50,000
USD
RFP – REQUEST FOR PROPOSAL
SERVICES
ITB – INVITATION TO BIDGOODS, WORKS
above 50,000 USD
SHOPPINGALLTYPES
below 2,500 USD
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Solicitation method
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
Solicitation documents
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Overview of milestones
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Definition of needs
Sourcing process
Solicitation process
Evaluation of offers
Review of award of contract
Contract signature
Delivery – completion of contract
Before you start a procurement process, be aware and aligned with…
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Dealing with suppliers
CONTRACT ADMINISTRATIONLOGISTICS
Purchasing process
PLANNINGETHICSPOLICIES
SUSTAINABLE PROCUREMENT
EMERGENCYPROCUREMENT
DEFINE NEEDS
FIND SUPPLIERS
GET OFFERS
EVALUATE OFFERS
REVIEW PROCESS AND AWARD CONTRACT
METHOD AND COMPETITION
SOLICITATION DOCUMENTS
TENDER PERIODBID RECEIPT AND OPENING
PURCHASE ORDER /CONTRACT
ISSUE CONTRACT
Before purchasing
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Milestone Definition of needs
Activity
Approx. timeline in weeks
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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
Formulation of technical specifications (for goods) or terms of reference (for services); considerations like ethics and sustainability shall flow into the process
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Milestone Sourcing process
ActivityReview supplier base and determine level of dissemination ofbidding document, market research (local / international)
Approx. timeline in weeks
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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 localconditions, i.e., what is available, local practices and techniques,climate, soil etc.
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Milestone Solicitation process
Activity
Approx. timeline in weeks
-2 3 weeks preparation plus:
4 weeks ITB6 weeks RFP
What can go wrong? -Delay through non pre clearance/approval of documentation by
Procurement Advisor/PA for quality etc. reasons
Issuance of solicitation document (ITB/RFP) – when the estimated value of your purchase is $50,000 or above
Sustainable Procurement Practice Group – Introduction to Procurement for Project Management Foundation Course 13
Milestone Evaluation of offers
ActivityEvaluation of formal compliance (capacity, etc.), technical and financial proposal, final recommendation
Approx. timeline in weeks
-1 3 weeksSubject to complexity, stakeholders involved
What can go wrong? Delay through clarifications with bidders; delay if technical evaluation
panel cannot reach agreement
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Milestone Review of award of contract
Activity
Approx. timeline in weeks
5-1 2 weeksafter approval of award
3-- weeksSubject to value, complexity, reviews required as per procurement authority etc.
What can go wrong? , Failure of negotiations
withdrawal of selected bidderDelays caused by poor submission to the CPCs and resulting rejection
Contract negotiations,if applicable
Review, pre-clearance, clearance, approval, contracts committee/s etc.
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Physical signing of the contract
Milestone Contract signature
Activity
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 donorsand community
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In accordance with the delivery
Milestone Delivery – completion of contract
Activity/ Contract administration
management phaseMobilization time as of contractsignature, if applicable
Approx. timeline in weeks
What can go wrong? Delay in delivery
inability of contractor to performforce majeure
Delays in mobilizing resources like staff and equipment; delay in delivery of materials
schedule in the contract2 weeksafter contract signature
Approximate timelines of formal methods of solicitation until contract signature:
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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.
CAP-NET Project and Pre-selection
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•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 pre-selected 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)
CAP-NET Project and Pre-selection; Milestones and time-frame
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Definition of NeedsDefinition of Needs: Networks together with CAP-NET Secretariat develops TOR for a specific activityTime-frameTime-frame: 2-3 weeks
Sourcing ProcessSourcing Process: N/ATime-frameTime-frame: N/A
Solicitation ProcessSolicitation Process: N/ATime-frameTime-frame: N/A
Evaluation of OffersEvaluation of Offers: CAP-NET Secretariat verifies the offers/proposals submitted by the NetworksTime-frameTime-frame: 2 weeks – depending on availability of staff
CAP-NET Project and Pre-selection; Milestones and time-frame
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Review and Award of ContractReview 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-frameTime-frame: 1-2 weeks
*Delegation of Authority
CAP-NET Project and Pre-selection; Milestones and time-frame
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Contract SignatureContract Signature: Once the Award Document has been approved, the contract can be signedTime-frameTime-frame: 1-2 weeks
Delivery – Completion of ContractDelivery – Completion of Contract: Depends on nature of services carried outTime-frameTime-frame: N/A
CAP-NET Project and Pre-selection; Milestones and time-frame
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Overall: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.