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Copyright © 2020
All rights reserved. No part of this publication may be reproduced, distributed,
or transmitted in any form or by any means, including photocopying, recording,
or other electronic or mechanical methods, without the prior written permission
of the Comprehensive Nuclear-Test-Ban Treaty Organization.
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Preface
The Procurement Manual outlines the procurement instructions, procedures and processes of
the Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO), and provides further
guidance for carrying out procurement activities for or on behalf of the CTBTO in
compliance with the CTBTO’s Financial Regulations and Rules and other applicable CTBTO
documents, such as the Administrative Directive on Procurement Procedures.
The Procurement Manual has been prepared drawing on information from several sources
that include the United Nations Procurement Practitioner’s Handbook, and best practices
outlined in the procurement manuals of other United Nations organisations such as the United
Nations Office for Project Services (UNOPS), United Nations Development Programme
(UNDP) and United Nations Procurement Division (UNPD).
The Procurement Manual is available on the CTBTO’s intranet
http://intranet.ctbto.org/policies_and_guides_home.htm. It has been published in electronic
format to limit the use of paper, ink, and transport emissions to further support CTBTO’s role
in advancing sustainable practices. The most recent document will always be the version
available on the CTBTO intranet.
Procurement Manual Lifecycle Management
This Procurement Manual will be revisited and updated regularly as necessary, to ensure that
it remains relevant to CTBTO’s activities and requirements and up to date with best practices
in public procurement.
The Chief of Procurement is responsible for initiating the process as delegated by the
Director, Division of Administration. Any change in the Manual will be cleared by the Chief
of Procurement.
If changes are significant, complete reassessment and formal sign-off by the Director,
Division of Administration is required.
Comments, questions and suggestions for improvement may be sent to
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Table of Contents
CHAPTER 1: INTRODUCTION ......................................................................................... 10
1.1 Purpose and Application ............................................................................................ 10
1.1.1 Procurement Manual Structure ................................................................... 10
1.2 Maintenance of the Manual ....................................................................................... 11
1.3 Regulatory Framework .............................................................................................. 11
1.4 Procurement Principles ............................................................................................. 12
1.4.1 Best value for money .................................................................................... 12
1.4.2 Fairness, integrity and transparency........................................................... 13
1.4.3 Effective competition ................................................................................... 14
1.4.4 Best interest of the CTBTO and its partners................................................ 14
1.4.5 Potential conflicts among the principles ..................................................... 14
1.5 Ethical standards ........................................................................................................ 15
1.5.1 Ethics in dealing with suppliers................................................................... 15
1.5.2 Standards of conduct ................................................................................... 16
1.5.3 Conflict of interest ....................................................................................... 17
1.5.4 Gifts and hospitality..................................................................................... 17
1.5.5 Supplier conflict of interest .......................................................................... 18
Chapter 1 Resources .............................................................................................................. 19
CHAPTER 2: ORGANIZATION OF PROCUREMENT ................................................ 20
2.1 Overview of the procurement process....................................................................... 20
2.1.1 Definition of procurement ........................................................................... 20
2.1.2 Outline of the procurement process ............................................................. 20
Chapter 2 Resources .............................................................................................................. 26
CHAPTER 3: SUPPLIER REGISTRATION AND MANAGEMENT ............................ 27
3.1 Supplier registration ................................................................................................... 27
3.1.1 Registration in the CTBTO’s Vendor Database .......................................... 27
3.1.2 Registration in the UNGM ........................................................................... 27
3.2 Supplier management ................................................................................................. 27
3.3 Vendor ineligibility ..................................................................................................... 28
Consolidated United Nations Security Council Sanctions List ................................. 28
UN Supplier Code Of Conduct .................................................................................. 28
Chapter 3 Resources .............................................................................................................. 28
CHAPTER 4: PROCUREMENT STRATEGY AND PLANNING ................................. 29
4.1 Procurement Strategy ................................................................................................. 29
4.1.1 Procurement Planning/Acquisition Planning .............................................. 29
4.1.2 Benefits of Procurement Planning ............................................................... 30
4.1.3 Levels of Procurement Planning ................................................................. 31
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4.2 Definition of Requirements ........................................................................................ 35
4.2.1 Responsibility............................................................................................... 35
4.2.2 The purpose of defining requirements ......................................................... 35
4.2.3 Technical specifications .............................................................................. 37
4.2.4 Terms of reference (TOR) ............................................................................ 37
4.2.5 Statement of work (SOW) ............................................................................ 39
4.3 Requisitions ................................................................................................................. 42
4.3.1 General Description and Requirements ...................................................... 42
4.3.2 Processing of Requisitions........................................................................... 44
Chapter 4 Resources .............................................................................................................. 47
CHAPTER 5: SOURCING .................................................................................................. 48
5.1 Sourcing of vendors .................................................................................................... 48
5.2 Market research .......................................................................................................... 48
5.2.1 Internal sources ........................................................................................... 49
5.2.2 External sources .......................................................................................... 49
5.2.3 Advertisement of business opportunities ..................................................... 49
5.3 Request for information ............................................................................................. 50
5.4 Request for expression of interest (REOI)................................................................ 50
5.5 Recommended Supplier List ...................................................................................... 51
Chapter 5 Resources .............................................................................................................. 51
CHAPTER 6: SOLICITATION ........................................................................................... 52
6.1 Overview ...................................................................................................................... 52
6.2 Types of competition ................................................................................................... 52
6.2.1 Open international competition ................................................................... 52
6.2.2 Limited Competition .................................................................................... 52
6.2.3 Use of Station Operator ............................................................................... 53
6.3.1 Request for quotation................................................................................... 54
6.3.2 Invitation to bid ........................................................................................... 55
6.3.3 Request for Proposal ................................................................................... 55
6.4 Solicitation Documents ............................................................................................... 57
6.5 Components of Solicitation Documents .................................................................... 57
6.5.1 Letter of Invitation ....................................................................................... 58
6.5.2 Instructions to bidders ................................................................................. 58
6.6 Invitation of vendors ................................................................................................... 70
6.6.1 Approval of Solicitation Documents ............................................................ 70
6.6.2 Distribution of Solicitation Documents ....................................................... 70
6.6.3 Amendments to Solicitation Documents ...................................................... 70
6.6.4 Cancellation of the solicitation process ...................................................... 70
6.6.5 Solicitation of offers from a sole source ...................................................... 71
6.6.6 Solicitation of offers against LTAs or Framework Contracts ..................... 71
6.7 Communication with vendors .................................................................................... 71
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6.8 Exceptions to competitive tendering or formal methods of solicitation................. 73
6.9 Urgent Unscheduled maintenance ............................................................................. 79
6.10 Tendering using email ................................................................................................ 79
Chapter 6 Resources .............................................................................................................. 80
CHAPTER 7: MANAGEMENT OF SUBMISSIONS ....................................................... 82
7.1 Receipt and safeguarding of submissions ................................................................. 82
7.2 Modification and withdrawal of submissions ........................................................... 82
7.2.1 Modification of submissions ........................................................................ 82
7.2.2 Withdrawal of submissions .......................................................................... 82
7.3 Late and unsolicited submissions .............................................................................. 83
7.3.1 Late offers .................................................................................................... 83
7.3.2 Offers ........................................................................................................... 83
7.4 Opening and recording of submissions ..................................................................... 83
7.4.1 Tender Opening Panel ................................................................................. 83
7.4.2 Opening of RFQs, ITBs and RFPs with values below $150 000 ................. 84
7.4.3 Opening of ITBs and RFPs with a value between $150 000 -$1 000 000
(submitted in two sealed envelopes) .......................................................................... 84
7.4.4 Opening of ITBs and RFPs with a value above $1 000 000 (submitted in
two sealed envelopes) ................................................................................................ 85
7.5 Rejection of submissions............................................................................................. 85
7.6 Post-opening ................................................................................................................ 85
Chapter 7 Resources .............................................................................................................. 85
CHAPTER 8 : EVALUATION OF SUBMISSIONS .......................................................... 86
8.1 Overview ...................................................................................................................... 86
8.2 Evaluation team .......................................................................................................... 86
8.2.1 Technical evaluation team ........................................................................... 87
8.2.2 Contractual and financial evaluation team ................................................. 87
8.3 Evaluation criteria ...................................................................................................... 88
8.4 Evaluation methodology ............................................................................................. 88
8.4.1 Lowest priced, technically acceptable offer ................................................ 88
8.4.2 Cumulative analysis ..................................................................................... 89
8.5 Evaluation of Tenders - RFQs, ITBs & RFPs .......................................................... 89
8.5.1 Preliminary Screening ................................................................................. 89
8.5.2 Competitive Offers ....................................................................................... 89
8.5.3 Sole Source Offers ( RFQs, ITBs and RFPs) ............................................... 91
8.6 Further aspects of evaluation ..................................................................................... 92
8.6.1 Correction of errors..................................................................................... 92
8.6.2 Indications of potential proscribed practices .............................................. 92
8.6.3 Best and final offer ...................................................................................... 93
8.6.4 Negotiations ................................................................................................. 95
8.6.5 Recommendation: Evaluation report........................................................... 95
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8.6.6 Due diligence: background checks .............................................................. 95
8.6.7 Suppliers with pending claims, disputes and contentious issues ................. 96
8.6.8 Cancelling the RFQ/ITB/RFP ..................................................................... 97
Chapter 8 Resources .............................................................................................................. 97
CHAPTER 9: PROCUREMENT PROCESS REVIEW .................................................... 98
9.1 Organization of procurement process review .......................................................... 98
9.2 Organisation of Work ................................................................................................. 99
9.2.1 Review by the Procuring Entity ................................................................... 99
9.2.2 Review by the Committee on Contracts ....................................................... 99
9.3 Scope of Review ........................................................................................................... 99
9.3.1 Terms of Reference of the Committee on Contracts .................................... 99
9.3.2 Composition and Procedures of the Committee on Contracts .................. 100
9.4 Decisions/Recommendations .................................................................................... 102
9.5 Minutes and circulation ............................................................................................ 102
9.6 Urgent Unscheduled Maintenance and Exigencies ............................................... 102
9.7 Ex Post Facto Cases .................................................................................................. 102
Chapter 9 Resources ............................................................................................................ 103
CHAPTER 10: AWARDS ................................................................................................... 104
10.1 Award and finalization ............................................................................................. 104
10.2 Vendor notification, debriefing and complaints .................................................... 106
10.2.1 Posting of awarded contracts .................................................................... 106
10.2.2 Complaints from bidders ........................................................................... 106
10.2.3 Debriefing procedures ............................................................................... 107
Chapter 10 Resources .......................................................................................................... 107
CHAPTER 11: CONTRACTUAL INSTRUMENTS ....................................................... 108
11.1 Overview .................................................................................................................... 108
11.2 Standard Contract Elements ................................................................................... 108
11.3 Types of Contracts .................................................................................................... 111
11.3.1 Purchase orders ......................................................................................... 111
11.3.2 Contracts for services/works ..................................................................... 112
11.3.3 LTAs/Framework Agreement ..................................................................... 115
11.4 Types of contracts based on payment ..................................................................... 118
11.5 Contract discussions with vendors .......................................................................... 119
11.6 Advance payments .................................................................................................... 119
11.7 Performance securities ............................................................................................. 120
11.8 Review and handling of performance securities .................................................... 120
Chapter 11 Resources .......................................................................................................... 121
CHAPTER 12: LOGISTICS ............................................................................................... 124
12.1 Overview .................................................................................................................... 124
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12.1.1 Logistics planning process ........................................................................ 124
12.1.2 Logistics requirements for goods .............................................................. 125
12.3 Shipping and Transportation .................................................................................. 126
12.3.1 Transport modes ........................................................................................ 126
12.3.2 Shipping documents ................................................................................... 128
12.3.3 Incoterms 2010 .......................................................................................... 128
12.3.4 Forwarding agents .................................................................................... 129
12.4 Insurance ................................................................................................................... 130
12.5 Receipt, Inspection and Return ............................................................................... 130
12.6 Other aspects of Logistics ......................................................................................... 131
12.6.1 Restrictions on the export or import of goods ............................................. 131
12.6.2 Management of shipment for the CTBTO .................................................. 131
Chapter 12 Resources .......................................................................................................... 132
CTBTO’s Legal Agreements ............................................................................................... 132
CHAPTER 13: CONTRACT MANAGEMENT............................................................... 133
13.1 Overview .................................................................................................................... 133
13.1.1 Process Management ................................................................................. 133
13.2 Vendor Performance Evaluation ............................................................................. 136
13.3 Remedies .................................................................................................................... 137
13.4 Dispute Resolution .................................................................................................... 140
13.5 Payments .................................................................................................................... 142
13.6 Amendments, extensions and renewal .................................................................... 144
13.7 Contract termination and completion ..................................................................... 145
13.7.1 Termination ............................................................................................... 145
13.7.2 Contract completion .................................................................................. 145
13.8 Property disposal ...................................................................................................... 146
13.9 Maintenance of Files ................................................................................................. 146
13.10 Management Information ........................................................................................ 147
Chapter 13 Resources .......................................................................................................... 148
CHAPTER 14: COOPERATION ...................................................................................... 149
14.1 Cooperation with United Nations Entities .............................................................. 149
14.1.1 Establishing and using joint LTAs and contracts (joint solicitation) ........ 151
14.1.2 Reuse of a United Nations organization’s tender (solicitation) results .... 151
14.1.3 Using LTAs or system contracts of other United Nations Entities
(piggy-backing) ....................................................................................................... 152
14.1.4 Requesting another United Nations entity to carry out procurement
activities on behalf of the CTBTO/Using procurement services of other United
Nations entities (outsourcing); ................................................................................ 153
14.1.5 Procuring goods, works or services from another United Nations
organisation ............................................................................................................ 154
14.2 Cooperation with governments and other organizations ......................................... 154
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Chapter 14 Resources .......................................................................................................... 154
CHAPTER 15: TRANSVERSAL TOPICS ....................................................................... 155
15.1 Global Compact ........................................................................................................ 155
15.2 Sustainable procurement.......................................................................................... 155
15.2.1 Introduction ............................................................................................... 155
15.2.2 Sustainable procurement implementation ................................................. 157
15.3 Risk Management ..................................................................................................... 161
Chapter 15 Resources .......................................................................................................... 167
THRESHOLDS AND OTHER INSTRUCTIONS FOR SOLICITATIONS ................. 168
GLOSSARY.......................................................................................................................... 174
LIST OF ANNEXES ............................................................................................................ 176
ANNEX I ............................................................................................................................. 177
ANNEX II ............................................................................................................................. 180
ANNEX III ............................................................................................................................ 184
ANNEX IV ............................................................................................................................ 188
ANNEX V ............................................................................................................................. 190
ANNEX VI ............................................................................................................................ 193
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CHAPTER 1: INTRODUCTION
1.1 Purpose and Application
a) The Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO) needs to procure
goods, services and works to support its activities at its headquarters, as well as at its
monitoring stations around the world.
b) The purpose of this Procurement Manual is to set out the criteria, guidelines and
instructions for implementation of the Financial Regulations and Rules (FRR)
concerning generally applicable procedures for conclusion of contracts with suppliers,
such as vendors of goods, or with companies, firms, governmental or
non-governmental organizations for the provision of goods, construction, works or
services.
c) The Procurement Manual is also intended to provide guidance on procurement policies,
procedures and practices to all staff members involved in procurement processes and
activities.
d) The procedures in this Procurement Manual are designed to ensure that those seeking to
do business with the CTBTO can be confident that their proposals are considered and
assessed in a fair, objective and transparent manner.
e) This Procurement Manual also reflects the principle of segregation of responsibilities
between Requisitioning and Procuring Entities by specifying their separate and distinct
functions within the overall procurement process.
f) Procuring Entities are responsible for the purchase of goods and/or other requirements
of the CTBTO within allocated budgeted funds. Procuring Entities also provide day to
day advice and guidance on procurement policies and procedures in consultation with
the Legal Services Section as necessary.
g) Requisitioners are responsible for identifying the needs of the Organisation and
developing generic Specifications, Terms of Reference (TOR) and Statements of Work
(SOW) to fulfil such needs, and therefore need to be familiar with the provisions of this
Manual, the Administrative Directive on Procurement Procedures and the FRR.
1.1.1 Procurement Manual Structure
The Procurement Manual has 15 chapters and is based on the structure (with minor
deviations) of the standardized table of contents for United Nations procurement manuals, as
endorsed by the High Level Committee Management (HLCM) Procurement Network, with
the purpose of harmonizing procurement practices and increasing collaboration among UN
entities.
Chapters 1 to 3 cover: introduction; organization of procurement; and supplier
registration and management;
Chapters 4 to 13 cover the major steps of the procurement process, which begins with
procurement strategy and planning and ends with contract management;
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Chapter 14 covers cooperation topics, while Chapter 15 covers miscellaneous topics
such as the United Nations Global Compact, sustainable procurement, and risk
management.
A resources section is included at the end of each chapter and provides references to relevant
policies, guidance materials and templates. The procurement phases and process, as well as
the applicable chapters, are shown in Figure 1 below.
PHASES PROCUREMENT PROCESS CHAPTERS
Pre-Purchasing
1. Procurement Planning in support of the
organization's Strategy
Chapter 4
2. Definition of Requirements Chapter 4
3. Sourcing Chapter 5
Purchasing 4. Solicitation Chapter 6
5. Management of the Solicitation Process Chapter 7
6. Evaluation Chapter 8
7. Process Review and Contract Award Chapters 9 and 10
Post-Purchasing 8. Logistics Chapter 12
9. Contract Management Chapter 13
Figure 1. Sections, Process and relevant Chapters
1.2 Maintenance of the Manual
a) As the commercial environment and technology are constantly changing, and the fact
that procedural changes may emanate from the CTBTO’s ongoing procurement reform
programme, this Manual will be updated and modified from time to time. Comments
and suggestions for modification of provisions of this Manual, or for additional
provisions, should be addressed to the Chief of Procurement. This Manual is also
subject to change from time to time as deemed necessary by the Director of
Administration or the Executive Secretary, particularly as a result of changes to the
FRR. The changes will be provided in the form of amendments to the Manual, or, if
deemed necessary by the Executive Secretary, a new version of the Manual may be
prepared.
b) The most recent version can be found on the CTBTO’s intranet.
c) References in this Manual to particular officials of the CTBTO shall be deemed to refer
to that official or his/her duly authorized delegate. Likewise, references to particular
offices or departments shall be deemed to refer to any successor office or department.
1.3 Regulatory Framework
a) The Manual is based on the Administrative Directive on Procurement Procedures
(Administrative Directive No. 27) which was issued pursuant to the CTBTO’s FRRs:
11.5.01 (b), 11.5.04(a), 11.5.05(c), 11.5.08(b), 11.5.09 and 11.5.10.
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b) In addition, this Manual provides further details on the application of the following
Administrative Directives: Administrative Directive No. 11 “Account Assignment
Codes”, Administrative Directive No. 13 “Allotment Managers, Approving Officers,
Officers Authorized to Sign Receipts, Certifying Officers, Treasury Officers and the
Legal‒Finance Review Team”, Administrative Directive No. 42 “Obligation of Funds”
and Administrative Directive No. 72 “Administrative Commitments.”
c) The CTBTO’s FRRs and the Administrative Directives will prevail over this manual in
case of inconsistencies.
d) The Executive Secretary reviews and approves any formal interpretations of the FRR
regarding procurement, based on advice from the Chief of the Legal Services Section
and other relevant departments/sections of the CTBTO as appropriate.
e) In the event of any ambiguities in the Manual relating to procurement, the United
Nations Commission on International Trade Law (UNCITRAL) Model Law on
Procurement and the UN Practitioners’ Handbook may be used as references.
1.4 Procurement Principles
In accordance with Rule 11.5.00, procurement functions include all actions necessary for the
acquisition, by purchase or lease, of property, including products and property, and of
services, including works, and the following general principles shall be given due
consideration when exercising the procurement functions of the CTBTO:
a) Best value for money;
b) Fairness, integrity and transparency;
c) Effective international competition; and
d) The interests of the CTBTO.
By adhering to the above mentioned principles, the CTBTO ensures effective implementation
of its activities, including its commitment to the promotion of sustainable development, by
avoiding misuse of resources, producing the most appropriate solutions at all times, and
addressing the needs of the CTBTO and its partners. The following sections describe each
principle and its application.
1.4.1 Best value for money
“Best value for money” is the trade-off between price and performance that provides the
greatest overall benefit under the specified selection criteria. The purpose of public
procurement is to obtain the best value for money, and to do this it is important to consider,
among other factors, the optimum combination of life cycle costing (i.e. acquisition cost, cost
of maintenance and running costs, disposal cost) of a purchase and its fitness for purpose
(i.e. quality and ability to meet the contracting authority’s requirements).
In ensuring best value for money, procurement specifications must include social, economic
and environmental policy objectives. “Best value for money” does not always mean selection
of the lowest initial price option, but rather represents the best return on the investments,
taking into consideration the evaluation criteria specified in the Solicitation Documents, and
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assessment of technical, commercial, organizational, and pricing factors in light of their
relative importance.
In order to obtain best value for money, Procuring Entities must:
a) Plan appropriately and keep the procurement process as simple as possible (e.g.
conduct efficient planning and implement appropriate procurement strategies);
b) Maximize competition and ensure the selection of reliable suppliers; prepare clear
specifications and advertise appropriately;
c) Establish appropriate evaluation criteria and ensure the selection of the offer with the
highest expectation to meet partners’ needs, in accordance with the evaluation
parameters set forth in the tender documents;
d) Consider all costs, including life cycle costs, transportation costs, installation costs,
maintenance costs and sustainable procurement considerations;
e) Whenever possible, social and environmental benefits must also be taken into
consideration;
f) Impartial and comprehensive evaluation of offers must also be undertaken in a timely
manner; and
g) Ensure selection of the vendor whose offer is expected to best meet the specified
requirements at the lowest overall cost to the CTBTO.
1.4.2 Fairness, integrity and transparency
In order to achieve best value for money, the procurement process must be conducted in a
manner that protects the CTBTO from unacceptable practices such as fraud, corruption,
collusion and other unethical practices. The procurement process must also be conducted on
the basis of clear and appropriate regulations, rules, and procedures that are applied
consistently to all potential vendors. It is also important to ensure that all internal and external
stakeholders of the organization are provided with the assurance that the process is fair, free
from favouritism, self-interest or preference in judgement and that integrity has been
maintained.
Fairness must be maintained by the organization and its personnel during the procurement
process. It is particularly important to ensure that equal opportunities are given to all bidders,
for example, by sharing the same information with all bidders at the same time and
communicating the same contents on a specific procurement. In the context of public
procurement, a fair process is free from favouritism, self-interest or preference in judgement.
Integrity relates to the soundness of moral character, having a sense of honesty and
truthfulness in regard to the motivations for personal and organizational behaviour, adherence
to commonly accepted moral and ethical principles, impartiality and incorruptibility, and
avoiding any behaviour that may be construed as “sharp practice”.
Transparency normally refers to the process by which reliable, timely information about
existing conditions, decisions and actions relating to the CTBTO’s activities is made
accessible and visible. Transparency ensures that any deviations from fair and equal
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treatment are detected very early in the process, and makes such deviations less likely to
occur. It thus protects the integrity of the process and the interests of the CTBTO.
1.4.3 Effective competition
Effective competition can be promoted in a number of ways:
a) Procurement planning for identifying an appropriate procurement strategy and
methodology;
b) Market research for identifying potential suppliers and, if applicable, assessing the
readiness of the market in terms of sustainability;
c) Conducting competition on as wide a geographic basis as is practicable and suited to
market circumstances;
d) Application of prudent commercial practices;
e) Effective competition also takes into consideration the ‘right time, right quality’ and
‘right price’, meaning that the supplier must also be given adequate notification and
sufficient time to ensure participation in the procurement processes;
f) Competition should not be restricted through overspecification, e.g. inclusion of
unjustified or unrealistic requirements in specifications and/or TOR/SOW, or
under-specification, e.g. omission of essential information in the specifications and/or
TOR/SOW;
g) Economies of scale such as quantity discounts and reduced administrative costs can
be achieved when procurement volumes for identical or similar requirements are
consolidated in a single tender. Economies of scale may also be achieved through the
use of Long-Term Agreements (LTAs)/Call-Off Contracts/Framework Agreements.
1.4.4 Best interest of the CTBTO and its partners
The ultimate objective of the procurement is to add value to the CTBTO and its partners in
fulfilling their goals and objectives. Undertaking procurement in the interest of the CTBTO
and its partners means carrying out procurement activities in a manner that best enables the
CTBTO and its partners to reach the general and specific objectives of the project agreements
in compliance with applicable procurement procedures.
Sustainable procurement is also in the best interest of the CTBTO since it aligns procurement
with the CTBTO’s mandate while ensuring value and efficiency are achieved.
1.4.5 Potential conflicts among the principles
Though the principles provide a common framework for the CTBTO’s procurement,
individual principles may, in some situations, conflict with each other. In this regard, it is
imperative to apply management experience in order to achieve the correct balance and
judgement in such situations.
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1.5 Ethical standards
Ethics relates to concepts of right and wrong conduct, moral duty and obligation, moral
principles and values, and to moral character. The procurement related principles, including
fairness, integrity, transparency and accountability, are based on ethics.
As the CTBTO undertakes procurement using public funds entrusted to the CTBTO, it is
important to ensure that all activities conform to the highest standards of ethical conduct.
Every business unit of the CTBTO as well as all individuals acting on behalf of the CTBTO
must observe the highest standards of ethics throughout the procurement process.
CTBTO’s personnel involved in procurement activities shall maintain an impeccable standard
of integrity in all business relationships, both inside and outside the CTBTO. Ethical conduct
shall be applied in all dealings with the CTBTO’s partners, donors, Governments,
beneficiaries and the general public. Procuring Entities must never use their authority or
office for personal gain and must seek to uphold and enhance the standing of the CTBTO at
all times.
Professional standards of ethical conduct are stated in the 2013 Standards of Conduct for the
International Civil Service, Articles 100 and 101 of the Charter of the United Nations, as well
as in the CTBTO’s Regulations and Rules.
Individual contractors working on CTBTO related business must also comply with the
standards of conduct required of international civil servants.
All individuals are responsible for the regularity of actions taken by them in the course of
their official duties. Any staff member that takes action contrary to the CTBTO’s Regulations
and Rules may be held personally responsible and financially liable for the consequences of
such action. He/she may also be disciplined under those provisions.
1.5.1 Ethics in dealing with suppliers
The CTBTO shall treat all suppliers in a fair and equitable manner in line with the principle
of fairness, integrity and transparency in the procurement process.
Eligible suppliers shall be allowed to compete for the CTBTO’s business on a fair, equitable
and transparent basis. Personnel involved in procurement activities are responsible for
protecting the integrity of the procurement process and maintaining fairness in the CTBTO’s
treatment of all suppliers.
All the CTBTO’s personnel and others involved in the procurement process must adhere to
the following standards of conduct:
− During the pre-solicitation phase, suppliers must not be allowed access to specific,
privileged information on a particular procurement activity before such information is
available to the business community at large;
− During the solicitation phase, all suppliers must receive identical information. Any
clarifications to the Solicitation Documents must be provided at approximately the
same time, in writing, to all suppliers;
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− Specifications must not include conditions limiting competition, e.g. branding, unless
required for standardization purposes; nor be unnecessarily restrictive, as this may
compromise competition;
− Individuals having a personal or financial interest in a vendor invited to participate in
a competition or responding to a solicitation are prohibited from any involvement in
the procurement process;
− During the evaluation, the evaluation criteria specified in the Solicitation Documents
must be followed and must be applied in the same manner to each evaluated offer.
Under no circumstances can new or revised evaluation criteria be introduced during
the evaluation of offers, nor can the method of evaluation be changed from that set out
in the Solicitation Documents. The only additional factor that may be taken into
consideration is significant unforeseen risk to the CTBTO that is uncovered in the
process of evaluation, and such risk must be thoroughly documented and justified to
the approving authority.
1.5.2 Standards of conduct
Law is governed by rules, whereas ethics is based on the subjective appreciation of what is
right and what is wrong, assessed according to the values of the CTBTO.
It is not possible to specify everything that the CTBTO’s personnel need to know regarding
what is allowed and what is prohibited during the procurement process. It is therefore
imperative that the CTBTO’s personnel undertake self-regulation and reflection at every
stage of the procurement process.
The standard of conduct for all personnel involved in procurement actions includes, but is not
limited to:
a) Personnel shall not allow any vendor(s) to have access to information on a particular
acquisition before such information is available to the business community at large;
b) Personnel shall not intentionally use unnecessarily restrictive specifications, terms of
reference or statements of work that can compromise competition;
c) Personnel shall not solicit or accept, directly or indirectly, any promise of future
employment from anyone who has sought or is seeking to obtain the CTBTO’s
business;
d) Personnel shall not have a financial interest in any vendor(s) responding to a
CTBTO’s bidding exercise, and are prohibited from any involvement in the
procurement action if they do;
e) Personnel shall not disclose proprietary and source selection information, directly or
indirectly, to any person other than a person authorized to receive such information;
f) Personnel shall not falsify any document created as part of the procurement process
and, in particular, shall not change the content of a bid evaluation report without
having the report signed again by the evaluation team members.
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1.5.3 Conflict of interest
A conflict of interest occurs when the personal interests of the CTBTO’s personnel, such as
outside activities or relationships or personal financial interests, interfere or appear to
interfere with the proper performance of his or her official duties or responsibilities, or with
the integrity, independence and impartiality required by the individual’s status as CTBTO’s
personnel. (See Staff Regulations and Rules: Rule 1.5.03: Conflict of Interest) The CTBTO’s
personnel involved in procurement activities must be aware of the following:
a) Within the procurement environment, a conflict of interest may arise in connection
with such private interests as personal investments and assets; political or other
outside activities and affiliations while in the service of the CTBTO; employment
after leaving the CTBTO’s service; or the receipt of a gift or other benefit (see Section
1.5.4 Gifts and hospitality, below) that may place the CTBTO’s personnel in a
position of obligation;
b) A conflict of interest also includes the use of the CTBTO’s assets, including human,
financial and material assets, or the use of the CTBTO’s office or knowledge gained
from official functions for private gain or to prejudice the position of someone not
favoured by the CTBTO’s personnel;
c) A conflict of interest may also arise where the CTBTO’s personnel is seen to benefit,
directly or indirectly, or allows a third party, including family, friends or someone
they favour to benefit from the CTBTO’s personnel decisions/awards.
1.5.4 Gifts and hospitality
The CTBTO’s personnel are prohibited from accepting gifts, honours, decorations, favours or
any form of non-CTBTO remuneration or benefits in the course of their official duties. Such
benefits create obligations, which in turn have the potential for creating conflicts of interest,
especially in the context of procurement. Suppliers shall not offer gifts or hospitality to
CTBTO’s staff members or other personnel. Recreational trips to sporting or cultural events,
theme parks or offers of holidays, transportation, or invitations to extravagant lunches or
dinners are also prohibited. (See Staff Regulations and Rules: Rule 1.8).
The CTBTO expects all of its suppliers to adhere to the principles of the United Nations
Global Compact, derived from the Universal Declaration of Human Rights; the International
Labour Organization Declaration on Fundamental Principles and Rights at Work; the Rio
Declaration on Environment and Development; and the United Nations Convention against
Corruption as posted on the United Nations Global Marketplace (UNGM) website.
Suppliers are required to notify the CTBTO should they themselves suspect that any suppliers
of inputs to their processes might contravene the shared values stated in this chapter.
Suppliers have the obligation to comply with the contract they have entered into with the
CTBTO as well as the CTBTO’s General Conditions of Contract (GCC) and the Statement of
Confirmation. The CTBTO’s GCC form an integral part of every contract between the
CTBTO and a supplier. Suppliers signing a contract with the CTBTO agree to conform to the
terms and conditions of the contract. Moreover, the CTBTO is committed to conducting
business with only those suppliers sharing its values of respect for fundamental human rights,
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social justice, human dignity, and respect for the equal rights of men and women, enshrined
in the Charter of the United Nations.
The CTBTO expects its suppliers to embrace and advance the principles of social and
environmental sustainability, and reserves the right to refuse entering into business with
suppliers that have proven records of misconduct in their social and/or environmental
practices.
The CTBTO also expects its suppliers to adhere to minimum mandatory social and
environmental standards, to strive for continuous improvement and to respect more advanced
social and environmental requirements as set forth in tender requirements.
1.5.5 Supplier conflict of interest
a) Suppliers participating in a procurement process shall not have a conflict of interest, so
as to avoid any distortion of competition and to ensure fairness of the process.
b) Use of former CTBTO employees in the preparation of Proposals:
Suppliers must not, in the absence of prior written approval from the CTBTO, permit a
person to contribute to, or participate in, any process relating to the preparation of a
Proposal or the procurement process if the person:
i. At any time during the 12 months immediately preceding the date of issue of the
solicitation was an official, agent, servant or employee of, or otherwise engaged by
the CTBTO;
ii. At any time during the 24 months immediately preceding the date of issue of the
Solicitation was an employee of the CTBTO personally engaged, directly or
indirectly, in the definition of the requirements, project or activity to which the
Solicitation relates.
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Chapter 1 Resources
The CTBTO’s
Policies
CTBTO’s Financial Regulations and Rules
Current version of Administrative Directive No. 27 on Procurement
Procedures
Other useful
resources
UNCITRAL Model Law
UN Procurement Practitioners’ Handbook
Charter of the United Nations
2013 Standards of Conduct for the International Civil Service
United Nations Global Compact
United Nations Supplier Code of Conduct
ILO Declaration on Fundamental Principles and Rights at Work
Rio Declaration on Environment and Development
UN Convention against Corruption
List of UN Suspended Vendors
(Please contact the Procurement Section for access to this
document)
Model Policy Framework (MPF) for Agencies of the UN System
(Agencies) adopted by the High Level Committee on Management
Procurement Network
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CHAPTER 2: ORGANIZATION OF PROCUREMENT
2.1 Overview of the procurement process
2.1.1 Definition of procurement
As outlined in the CTBTO Financial Rule 11.5.00, procurement functions include all actions
necessary for the acquisition, by purchase or lease, of property, including products and real
property, and of services, including works.
For the purpose of this manual, the term ‘procurement’ is therefore limited to commercial
activities undertaken for purchase or lease, of property, including products and real property,
and of services and works, including professional services in the form of contractors, but
excluding activities to hire fixed term and temporary staff services.
The Human Resources Services shall be responsible for the recruitment process of fixed term
and temporary staff services, as provided in Administrative Directives Nos. 8, 20, 64 and 71.
Accordingly, requests for these types of services shall be submitted for action to the Director
of the Human Resources Services.
The key steps involved in the procurement process are outlined in Section 2.1.2 below.
2.1.2 Outline of the procurement process
The CTBTO’s procurement process consists of nine major steps which can be categorized in
three groups; pre-purchasing, purchasing and post-purchasing. Each step is covered in detail
in this manual, in chapters 4 to 13, as per the structure indicated in Section 1.1.1.
PROCUREMENT PROCESS
Pre-Purchasing 1. Procurement Planning in support of the organisation's Strategy
2. Definition of Requirements
3. Sourcing
Purchasing 4. Solicitation
5. Management of the Solicitation Process
6. Evaluation
7. Process Review and Contract Award
Post-Purchasing 8. Logistics
9. Contract Management
Figure 2. Procurement Process
2.2 Responsibilities of organizational units and key roles in procurement processes
a) Definition of Procuring Entity
Financial Rule 11.5.01, states that only staff members and personnel duly authorized
and designated as a Procuring Entity by the Executive Secretary shall, on behalf of the
Secretariat, enter into contracts for the purchase, rental or sale of goods, constructions
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and/or services, including professional services in the form of contracted services, but
excluding fixed-term and temporary staff services.
Accordingly, in order to undertake procurement, all personnel referred to as a Procuring
Entity must be in possession of a written Delegation of Authority (DOA) for
procurement.
In this Procurement Manual, CTBTO personnel who have been formally delegated
authority for procurement will be referred to as a Procuring Entity. Commitments to
potential contractors/suppliers concerning procurement procedures, proposed
procurement contracts or obligations may be made only by a duly authorized Procuring
Entity.
Human Resources Services shall be responsible for the recruitment process of
consultants, cost-free experts and interns, as provided for in Administrative Directives
Nos. 8 and 71.
All Procuring Entities shall attend the procurement courses designed for this role.
b) Responsibilities of the Procuring Entity
Procuring Entities must exercise their duties and responsibilities under their designated
DOA with due diligence, efficiency, impartiality and integrity. They are responsible for
approving procurement activities corresponding to the designated DOA level, as
identified in the Table of Authority in Procurement (see Section 2.2 (c) Delegation of
authority below), ensuring, prior to any commitment being made, that:
i. The procurement activity strictly complies with the CTBTO’s FRR, the
Administrative Directive on Procurement Procedures, this Procurement Manual and
any other relevant CTBTO regulatory instruments.
ii. Sufficient funds are available for the commitment;
iii. The procurement activity is in the best interests of the CTBTO.
c) Delegation of authority In accordance with Financial Rule 11.5.01, the Procuring Entity shall be designated by
the Executive Secretary. Accordingly, the DOA is delegated to individuals, not to
functions, and is assigned for specific projects or business units. Therefore, all
individuals in an acting capacity (e.g. Officer-in-Charge) must be granted proper DOA
in order to be able to exercise this authority until the official incumbent resumes their
function. The DOA which sets out the levels of delegated authority in procurement and
the applicable conditions are subject to review from time to time as deemed necessary
by the Executive Secretary.
d) Segregation of duties
Segregation of duties is an internal control mechanism used to ensure that no single
individual or organizational unit is given sole responsibility for a function. The
respective procuring unit within the CTBTO shall be organized maintaining a
segregation of responsibilities for key steps of the procurement process.
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Purchasing cycle in the Enterprise Resource Planning (ERP) system (SAP)
There are three main “authorities” in the purchasing cycle per the Internal Control
Framework outlined under the CTBTO’s FRR (see Regulation 1.1):
− Allotment Manager: person with responsibility for planning and initiating the
utilization of one or more parts of the Programme Budget.
− Certifying Officer: person that certifies that sufficient funds are available to make a
purchase, and also confirms receipt of goods in accordance with the documents
establishing the obligation.
− Approving Officer: the person with responsibility for examining the payments before
they are established in the accounting records and processed to the treasury.
Personnel are granted profiles in SAP consistent with their roles and the following
segregation of duties measures are enforced by the system:
Personnel that create purchase orders are not authorised to approve them;
Personnel that create requisitions are not authorised to approve them;
Personnel that approve purchases, are not authorised to perform goods receipt
against those purchases;
Goods receipt cannot be done by the Procuring Entity.
e) Procuring Entities
In accordance with Financial Regulation 11.1, the Executive Secretary shall be
responsible for the procurement functions of the Secretariat. The CTBTO’s Procuring
Entities include the following:
The Director of Administration
As provided for in Financial Rule 11.1.02, the Director of Administration, acting under
delegated authority from the Executive Secretary, may issue, in the form of
Administrative Directives, such procedural guidance or instruction as he/she deems
necessary for the proper application of the Financial Regulations and Rules, and to
ensure efficient, effective and economic financial administration of the Secretariat
operations.
The Procurement Section
The Chief, Procurement Section
The Procurement Section guided by the Chief of Procurement and under the direct
supervision of the Director of Administration, is responsible for undertaking
procurement activities as delegated by the Executive Secretary.
These activities include:
− Providing support for the execution of the implementation of the CTBTO’s
business strategy through efficiently planning and managing the procurement
function;
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− Formulation of strategy, policies and innovative solutions for the procurement
process;
− Establishing and maintaining instructions, procedures, processes, control
mechanisms, and supporting guidance on procurement activities;
− Ensuring that the established instructions, processes and tools are being complied
with by all Procuring Entities;
− Provision of managerial oversight of the CTBTO’s procurement activities,
ensuring appropriate systems and reports;
− Providing support in strengthening the knowledge and skills of other Procuring
Entities;
− Maintaining the list of the CTBTO’s Procuring Entities holding a DOA to
undertake procurement activities.
General responsibilities of Procuring Entities in the Procurement Section In general, the responsibilities of a Procuring Entity in the procurement process
include the following:
− Reviewing the requirements definition (for e.g. TOR, Specifications, SOW) to
ensure that it:
appropriately describes and quantifies the requirement to facilitate an
efficient bidding process;
contains appropriate quality requirements;
will lead to value for money;
facilitates the agreed evaluation method;
− Advizing whether or not the requirement can be met from existing arrangements;
− Providing access to existing specifications and maintaining a library of
specifications of commonly purchased items;
− Preparing procurement strategies for projects in collaboration with the Project
Manager;
− Leading the sourcing process and market research as applicable;
− Preparing Solicitation Documents and managing the solicitation process;
− Facilitating technical evaluation and undertaking and the commercial/contractual
evaluation of submissions;
− Submitting the case for appropriate clearance and submission to the Committee on
Contracts, if applicable;
− Maintaining the supplier database in SAP;
− Preparing contracts and creating purchase orders in SAP;
− Providing support to the project manager/requisitioner concerning any contract
management issues requiring procurement involvement.
Other Procuring Entities
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The Executive Secretary may designate one or more personnel as Procuring Entity for
procurement activities to be carried out in business units, and shall establish the authority
and responsibility of these Procuring Entities.
General Services Unit
In accordance with Administrative Directive No. 27, for contracts with moving
companies, contracts for shipment of verification equipment not exceeding
USD$150 000 and contracts for transportation and accommodation related to CTBTO
sponsored events and/or participants, as provided for in Administrative Directive No.
46, the Head of the General Services Unit, Clerks and Senior Travel Assistants in the
General Services Unit, are the duly authorized Procuring Entity.
Certifying Officer and the Substantive Officer
With respect to contracts for goods, construction or services that do not exceed
$4 000, excluding VAT, the Allotment Manager, Certifying Officer and/or the
Substantive Officer may also become the duly authorized Procuring Entity as
delegated by the Executive Secretary.
Other Units and Roles
In addition to the above, the following units and roles are important in facilitating the
procurement processes:
Allotment Manager
As defined in Financial Rule 1.1.01, and further elaborated in Financial Rule 11.2.03
and Administrative Directive No. 13, an Allotment Manager shall be an Officer of the
Provisional Technical Secretariat (“the Secretariat”) designated by the Executive
Secretary as being responsible for planning and initiating the utilization of one or
more parts of the Programme Budget.
As provided for in Financial Rule 11.2.05 and further elaborated in Administrative
Directive No. 13, Allotment Managers shall ensure that requests to incur obligations
against allotments under their responsibility are fully documented. With respect to
proposed obligations for procurement, this shall involve raising a shopping cart in the
SAP Supplier Relationship Management (SRM) platform that must be approved by
both the Allotment Manager and the Certifying Officer, stating the account
assignment code against which the proposed obligation is to be charged and indicating
the applicable fund. The requisition shall be forwarded to the Chief of the
Procurement Section or the designated Procuring Entity. All Allotment Managers are
required to attend the procurement courses designed for this role.
Certifying Officer
As defined in FRR 1.1.01 and further elaborated in FRR 11.2.06, a Certifying Officer
shall be a Secretariat Officer designated by the Executive Secretary in an
Administrative Directive as being responsible for:
− Examining all obligations proposed by Allotment Managers to ensure that
appropriate funds are available and have been allotted, and that the proposed
expenditure is in accordance with the FRR and is consistent with the purpose for
which the appropriation was intended.
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− Certifying that goods have been received or shipped and that the services have
been rendered in accordance with the documents establishing the obligation.The
authority granted and responsibility assigned to Certifying Officers is a personal
one and can be delegated only to alternates as designated by the Executive
Secretary under the Administrative Directive No. 13.
Approving Officer As defined in Financial Rule 1.1.01 and further elaborated in Financial Rule 11.1.15
and Administrative Directive No. 13, an Approving Officer shall be a Secretariat
Officer of the Budget and Finance Section designated by the Executive Secretary. The
Approving Officer shall be responsible for examining the payments before these are
established in the accounting records and processed to Treasury, to ensure the
following: that obligations have been authorized by the appropriate Certifying
Officer; that vouchers and other documents passed by Certifying Officers for payment
are properly supported by the evidence that goods or services have been received in
accordance with the contractual agreement establishing the obligation; that the
documents comprise duly certified original vouchers or a voucher faxed to the
Secretariat with the necessary electronic signature safeguards; that payment has not
previously been made, and that the supporting documents do not have irregularities
which might indicate that the payment is not properly due. An Approving Officer can
never be a Certifying Officer.
Requisitioner A Requisitioner is an official of the CTBTO that is responsible for creating
requisitions. With respect to proposed obligations for procurement, the Requisitioner
is responsible for raising a shopping cart in SRM (that becomes a requisition in SAP/
ECC) which must be approved by both the Allotment Manager and by the Certifying
Officer, stating the Account Assignment Code against which the proposed obligation
is to be charged, and indicating the applicable fund. The requisition shall be
forwarded to the Chief of the Procurement Section or the assigned Procuring Entity by
the SAP system. Requisitions may be prepared for goods, works or services.
Requisitioners are also responsible for managing project resources and achieving
project results. The major responsibilities of the Requisitioner in a procurement
process include the following:
− Preparing the procurement plan of the project in consultation with the Procuring
Entity, ensuring that proposed expenditures are in accordance with the purpose of
the project;
− Drafting definitions such as SOW, TOR and Technical Specifications;
− Technically evaluating submissions received in response to request for proposals
(RFPs), invitation to bid (ITB) and request for quotations (RFQs), if appointed to
the evaluation team;
− Managing the contract.
The Treasurer As defined in FRR 1.1.01 and further elaborated in FRR 11.1.20 and Administrative
Directive No. 13, the Treasurer shall be a Secretariat Officer of the Budget and
Finance Section designated by the Chief, Budget and Finance Section, as being
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responsible for the proper management and custody of the CTBTO’s cash assets,
including investments. The Treasurer shall never be the Chief, Budget and Finance
Section.
Committee on Contracts In accordance with FRR 11.5.04 and Administrative Directive No. 27, the Committee
on Contracts shall review and recommend to the Executive Secretary to approve,
defer or reject proposals for contract awards or for exceptions to competitive
procedures with a value of $150 000 or above, to ensure compliance with the
CTBTO’s FRR. Refer to Chapter 9 for further details on the Committee on Contracts.
Legal and Finance Review Team
In accordance with Administrative Directive No. 27 the final version of a
contract/purchase order together with Annexes, including cases in which the
Executive Secretary has approved the recommendation of the Committee on Contracts
to award a proposed contract or a purchase order shall be submitted, through the Chief
of the Procurement Section, for review and comments to the Legal-Finance Review
Team.
The team composed of one Officer of the Legal Services Section and one Officer of
the Budget and Finance Section designated by the Executive Secretary shall review
proposed contracts or proposed purchase orders involving an amount of $25 000 or
above, before they are signed. The Legal–Finance Review Team shall report any
irregularity through the Director of Administration to the Executive Secretary.
Chapter 2 Resources
The CTBTO’s Policies
Administrative Directives No. 27 (Current Version)
Administrative Directives No. 8
Administrative Directives No. 71
Table of Authority in Procurement. This is provided in a Memo
signed by the Executive Secretary
(Please contact the Procurement Section for access to this
document.)
Administrative Directive No. 67
Administrative Directive No. 46
Administrative Directive No. 13
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CHAPTER 3: SUPPLIER REGISTRATION AND MANAGEMENT
A supplier or vendor is a person, company, or organization that sells or supplies goods or
services or works to an organisation. The terms supplier and vendor are considered equivalent
and used interchangeably throughout this Manual.
The CTBTO maintains its own database of suppliers and awards contracts to vendors
registered in the CTBTO’s vendor database. The CTBTO also continually strives to identify
new technically and financially sound suppliers. In addition, the CTBTO also uses the
UNGM, (http://www.ungm.org) for sourcing suppliers.
3.1 Supplier registration
3.1.1 Registration in the CTBTO’s Vendor Database
For registration in the CTBTO’s vendor database, vendors are required to complete the
Vendor Request Form, providing the necessary information. The information provided on
this form is used as the basis for registration in the CTBTO’s vendor database.
3.1.2 Registration in the UNGM
Potential vendors wishing to do business with the CTBTO may also register on the UNGM
website which serves as a procurement portal for the United Nations system.
All the CTBTO’s personnel may register as United Nations users and have access to the
UNGM database of potential vendors registered with United Nations Agencies. Procuring
Entities may use the UNGM to support all their procurement exercises. The UNGM provides
current data on companies including general company information, contact details, previous
United Nations experience and performance, and the range of products and services
registered by vendors. In addition, Procurement has access to a repository of United Nations
system-wide long-term agreements (LTAs).
Vendors applying to be registered on the UNGM procurement portal must complete the
process of self-registration in the portal, including a confirmation of their acknowledgement
of the United Nations Supplier Code of Conduct.
3.2 Supplier management
Before contract award, the CTBTO must ensure that the supplier is eligible for the award and
has the capability and capacity to perform the contract satisfactorily. This is achieved by
ensuring that the vendor is eligible (see Section 3.3 Vendor Ineligibility) and by assessing the
qualification, technical and financial criteria as part of the evaluation process, which may
include additional due diligence or background checks (see Chapter 8 Evaluation of
Submissions for details).
To ensure efficient implementation of contracts, the performance of contractors must
continually be monitored throughout the contract management stage.
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3.3 Vendor ineligibility
Vendor ineligibility will be managed by procurement in accordance with other UN
Organizations’ best practices.
Chapter 3 Resources
Chapter 3 Resources
Templates
Vendor Profile Form
(Please contact the Procurement Section for access to this
document.)
Vendor Performance Evaluation Form (Please contact the
Procurement Section for access to this document.)
Other useful resources UNGM
Consolidated United Nations Security Council Sanctions List
UN Supplier Code Of Conduct
Page 29
CHAPTER 4: PROCUREMENT STRATEGY AND PLANNING
4.1 Procurement Strategy
a) The fulfilment of the CTBTO’s mission and mandate requires the efficient, effective
and timely provision of goods, services and works, making procurement a strategic
function essential to delivering value and results.
b) In essence the procurement function serves as a strategic asset to support the CTBTO’s
organizational mandate on a daily basis by obtaining the necessary inputs for the
CTBTO to do its work in an effective and efficient manner.
c) Embracing and developing a strategic approach to procurement is a key element for
ensuring timely implementation of projects or operations. It requires a thorough
understanding of the procurement environment both internal and external to the
organization. This includes thorough assessment of the nature of the requirements, the
capacity of the vendors, the complexity of the operating environment, the risks
involved and the dedication to timely and appropriate planning and utilization of the
available resources of the organization. This all underpins the importance of
professional judgement and these factors must be understood to enable an effective
procurement process.
d) Early and accurate planning is essential to avoid last minute, emergency or ill-planned
procurement, which is contrary to open, efficient and effective, and consequently
transparent, procurement. In addition, most potential savings in the procurement
process are achieved by improvements in the planning stages. Even in situations where
planning is difficult, such as emergencies, proactive measures can be taken to ensure
contingency planning and be better prepared to address upcoming procurement
requests.
e) The annual Procurement Plan (also referred to as Acquisition Plan) provides details of
the goods, services and works that the CTBTO requires over a one-year period. These
requirements are linked to the CTBTO’s priorities (Mid-Term Strategy).
4.1.1 Procurement Planning/Acquisition Planning
a) In accordance with Administrative Directive No. 27, the process of planning for the
future requirements of the CTBTO that shall be met through procurement, forms part of
the preparation and approval of the Programme and Budget of the CTBTO. The nature
and volume of such future requirements for procurement shall be taken into account by
the Chief of the Procurement Section and the Substantive Section when undertaking
procurement planning.
b) On an annual basis (usually by the end of January), each Substantive Section shall
submit to the Procurement Section a Procurement Plan (Acquisition Plan) in the format
and by the date requested by the Chief of the Procurement Section, detailing the
estimated costs and timing of procurements to be undertaken in the next annual period.
The Chief of the Procurement Section shall provide a template to be used by all
divisions to ensure consistency.
c) Consistent with the principles set out in Regulations 11.1 and 11.5 and except as
otherwise provided in Financial Rule 11.5.06, and in accordance with Administrative
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Directive No. 27, procurement contracts shall be awarded on the basis of effective
competition. To this end, the competitive process shall, as necessary, include
acquisition planning or procurement planning.
4.1.2 Benefits of Procurement Planning
Procurement Planning is important because:
a) It guides the decision concerning what to buy, when and from which sources.
b) It helps planners to determine if expectations are realistic, particularly the
expectations of requestors, who sometimes expect that their requirements can be met
at short notice and within a shorter period of time than the application of the
corresponding procurement method allows.
c) It provides an opportunity for all stakeholders (requesting entity, end users,
procurement and technical departments) involved in the processes to gain an
understanding of the particular procurement and to give relevant inputs on specific
requirements.
d) It facilitates the creation of a procurement strategy for procuring each requirement
that will be included in the procurement plan. Such a strategy includes a market
survey and determining the applicable procurement method given the requirement
and the circumstances.
e) Planners can estimate the time required to complete the procurement process and
award contracts for each requirement. This is valuable information as it serves to
confirm if the requirement can be fulfilled within the period expected, or required,
by the requesting entity.
f) An assessment can be made to determine if the relevant technical expertise to
develop technical specifications and/or scope of work for certain requirements are
available in-house or should be outsourced.
g) Planners can assess the feasibility of combining or dividing procurement
requirements into different contract packages.
h) Planning facilitates better requirements definition, increasing the probability of
receiving more competitive offers and, thereby, better value for money.
i) Sourcing can also be improved leading to more effective competition and potentially
better prices.
j) Risks can be identified earlier so that appropriate risk mitigation measures can be
undertaken.
k) More appropriate monitoring of procurement activities can be undertaken;
l) Better planning of human resources and more efficient distribution of the workload
to facilitate effective management of the procurement process is enabled.
m) Timely consideration can be given to the logistics aspects and factors for the
procurement of goods and equipment, and consideration can be given to the relevant
contract management issues for services and works.
n) Sustainability interventions can also be considered in the planning process.
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o) Procurement activities can be consolidated with the potential for achievement of
economies of scale and reductions in transaction costs.
4.1.3 Levels of Procurement Planning
4.1.3.1 Substantive Sections; planning of procurement activities
The CTBTO’s Substantive Sections are required to undertake procurement planning with the
overall objective of ensuring best value for money for the organisation. Procurement planning
ensures that procurement activities are linked to the approved budget, that correct methods of
procurement are selected, and suitable contracts are executed for the goods, works, or
services being procured.
The procurement plan is usually based on estimates of procurement activities to be carried
out during a one-year period within the context of budget availability for the biennium
budgetary period.
Each division/section is responsible for analysing the procurement needs of the projects in
their division/section and for presenting a procurement plan defining the procurement needs
(expected requirement for goods/services/works), the quantities required, the estimated
budget, suggesting the procurement methods, suggesting possible sources and stipulating the
timeframe for delivery within their available budget.
At a minimum, during procurement planning the following issues should be taken into
consideration:
a) Budget Allocation/Issues:
During planning, it is imperative to ensure that an adequate budget is allocated for each
activity.
Budgeting is the process whereby the Substantive Section sets its priorities as to how it
intends to spend an amount of money over a specific time period (biennium for General
Funds and underlying project plan for Capital Investment Funds and multiyear funds).
Throughout the budget planning cycle (the process of defining the budget), an initial budget
can undergo revisions to result in a revised budget.
Several mechanisms can be utilised to effectuate efficient budgeting.
Under the Result Based Management approach, the budget must be planned in relation to the
programmatic deliverables planned for the biennium budgetary period. For fixed costs or
recurring expenditures, past budgets can be compared to actual spending for an improved
understanding of where forecasting was the most (or the least) accurate. It is also possible to
compare the previous year’s budget to that year’s actual spending. This can provide
considerable insight into the accuracy of the budget, and allow the organisation to improve
for the next year.
b) Market Environment/available sources
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Determining/identifying relevant sources through market research is critical for a successful
procurement process.
Market research is undertaken to gain marketing intelligence which provides data about a
specific market. Market research can be undertaken to identify potential suppliers and, if
applicable, assess the sustainability of the market. By taking advantage of market
intelligence, it is possible to create a more accurate budget, plan for supply needs, and find
the optimal way to obtain best value for money for the requirements of the organisation.
More accurate predictions of costs can also be gained through having a thorough knowledge
of the market, detecting challenges and impractical plans before anything is implemented,
potentially saving a considerable amount of money. In this way, it can be determined if
adequate funds have been allocated for a particular item.
Through market assessment, planning for volatility in the supply chain can also be achieved.
For example, changing material costs can be accounted for in the budget as fluctuating prices
can have a greater impact on the organisation than one might realize. Oil prices, for example,
affect the cost of transportation. There are also other external factors that affect supply chain
costs beyond the simple price of supplies.
Market analysis also allows an appropriate understanding of the relevant market sectors, their
structures, and how they operate. Based on this understanding, the procurement plan can be
tailored to ensure that bidders find the contract packages attractive and are motivated to
provide innovative solutions within their proposals.
Furthermore, market analysis provides information about:
i. The market’s capability to meet the needs of the organization;
ii. How the market views the organization in terms of attractiveness as the contract
employer, e.g. its payment promptness, complaints management, responsiveness
to queries, procurement capability, etc.;
iii. The nature and level of competition within the market;
iv. Suppliers, contractors, and service providers, and their market shares;
v. Pricing methodologies: all costs should be taken into consideration, including life
cycle costs, transportation costs, installation costs, maintenance costs and
sustainable procurement considerations;
vi. Supplier eligibility: the availability of suppliers that are eligible to supply the
CTBTO.
Supplemental information about relevant suppliers can also be gained from other sources,
such as (i) annual company reports, (ii) commodity indexes, (iii) trade journals and
associations, (iv) government offices, (v) internet searches, UNGM and (vi) stakeholder
knowledge and experience.
Internally, information about potential available suppliers can also be found in SAP and the
CTBTO’s Database of Suppliers. See Section 5.2 for further information on market research.
c) Consolidation of requirements across Sections:
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Where appropriate, Substantive Sections should seek to consolidate their needs across
sections. Consolidation of needs can result in both project and administrative savings and will
also generate information required for developing procurement strategies for items on the
Annual Procurement Plan.
d) Definition of the requirements:
Care should be taken to ensure that the requirements are appropriately defined in order to
facilitate an efficient bidding process (see Section 4.2.2).
Identifying Goods and Services under Existing Contracts
A large number of goods and services can be ordered under long-term agreements
(e.g. Call-off contracts, Equipment Support Contracts, Catalogue Contracts, etc.) that
the Procurement Section has concluded to meet the needs of the various divisions.
During planning it is important to establish whether or not the good or service
required is not already covered under one of the aforementioned contractual
mechanisms.
e) Timeframe for delivery
It is important to know the timeframe within which a particular good/service/work can be
delivered. This helps to ensure that stakeholders have realistic expectations concerning
delivery of the requirement. More importantly, validity of budget allottment and obligation as
defined in Administrative Directive No. 42 must be taken into consideration to ensure the
availability of funding to pay the applicable invoices. See Sections 8.5.2.1 and 8.5.2.2 (Steps
for Evaluation of offers), and Table 2: Thresholds and Other Instructions for Solicitations
(Bidding Period in Work Days).
4.1.3.2 Procurement Section; planning of procurement activities
a) Procurement Planning/Acquisition Planning
The CTBTO’s Annual Procurement Plan is an overall projection of the organization’s future
procurement needs for a one-year period. Through procurement planning, special attention
can be focused on the specific needs of each Substantive Section.
The Chief of Procurement is responsible for the procurement planning process and will issue
appropriate instructions to the Substantive Sections concerning annual procurement planning.
The Chief of Procurement will also initiate and facilitate procurement planning by
establishing a procurement planning template to be completed and submitted by the
Substantive Sections. All Substantive Sections shall submit an annual procurement plan.
Some procurement needs cannot be anticipated and plans may sometimes not be entirely
accurate. This notwithstanding, the Substantive Sections are required to provide a best
estimate based on available information at the time of preparing the annual procurement plan.
The Chief of Procurement shall be responsible for compiling the CTBTO’s annual
procurement plan, analysing the provided data, and taking appropriate action. Specific
strategies in support of the procurement function may include establishment of long-term
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agreements and electronic catalogues and identification of procurement training needs and
strategies. Procurement planning is a continuous process and hence the plans should be
continuously updated as necessary.
b) Procurement planning for an individual procurement activity/project
Procurement planning at the individual procurement activity level is undertaken to determine
the best procurement strategy and methodology for managing a particular procurement
activity/project while taking into consideration ways of mitigating the risks involved in the
process. Risk can be defined as “the probability of an unwanted outcome happening”. Risk
assessment should be viewed in the overall context of risk management at each stage of the
procurement process, and seen as one of the three key activities – risk analysis, risk
assessment and risk mitigation – which facilitate the taking of decisions and actions to control
risk appropriately.
Procurement planning should be done in collaboration with the stakeholders, including where
and if possible, the end users. Planning for a particular procurement activity must take into
account both upstream or pre-contract-award activities and downstream or post-contract-
award activities.
At a minimum, the following issues should be given consideration:
i. Factors to be considered when assembling the team are:
The nature and complexity of the project/need;
The necessary technical skills, knowledge and experience with the appropriate
level of authority required of the members of the team.
ii. Ensuring that requirements are appropriately defined by reviewing the requirements
definition (for example TOR, Specifications, SOW) to ensure that it:
Is appropriately described and quantified to facilitate an efficient bidding process;
Contains appropriate quality requirements;
Will lead to best value for money;
Facilitates the agreed evaluation method.
iii. Developing procurement/contract strategy
Factors to be considered when developing a procurement strategy are:
Determine whether or not the requirement can be met from existing
arrangements.
Determining/identifying relevant sources, conducting market research as
applicable, and understanding the market capacity.
Determining the evaluation strategy which sets the direction for the overall
evaluation of suppliers and the associated tender process.
Determining whether or not to utilise a Service Level Agreement (SLA). The
purpose of SLAs and setting service levels is to enable the organisation to
monitor and control the performance of the service received from the supplier
against agreed standards. It should be understood that service levels should be
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agreed and benchmarked for both the organisation and the suppliers. (See Section
4.2.2).
Establishing the form of contract.
Facilitation of an efficient solicitation process. This involves adequate preparation
of the Solicitation Documents and ensuring that the solicitation process is carried
out within the stipulated guidelines for managing the process (see Table 2:
Thresholds and Other Instructions for Solicitations).
If applicable, for complex procurement activities/projects, a more detailed
planning process can be undertaken (see Sourcing Plan) (Please contact the
Procurement Section for access to this document.)
Notwithstanding, it shall be the Procuring Entity’s discretion, taking into account the best
interests of the CTBTO, to decide whether or not to undertake a more detailed planning
process for complex procurement activities/projects.
4.2 Definition of Requirements
4.2.1 Responsibility
The Requisitioner is responsible for defining the requirements in the form of Specifications,
SOW or TOR. The Procuring Entity responsible for the process shall review the requirements
and identify any issues that seem inappropriate from a procurement point of view, like
branding without justification, over specification, unrealistic delivery dates, and restricted
competition. Where necessary, the Procuring Entity shall advise the Requisitioner regarding
more appropriate solutions to meet the requirements.
4.2.2 The purpose of defining requirements
Requirements definition is the most crucial part of a project. Incorrect, inaccurate, or
excessive definition of requirements can result in schedule delays, wasted resources, or client
dissatisfaction.
The requirements analysis should begin with the CTBTO’s requirements and these should be
translated into project requirements or needs. The needs must be described in a way that will
facilitate the procurement process. The requirements analysis should cover the whole scope
of the project. It must be comprehensive and thorough. It must consider the relevant views
and needs of all the project stakeholders. The completed defined requirements shall be
reviewed and approved by the client or project manager before beginning the procurement
process.
The CTBTO is firmly committed to sustainability and Procuring Entities are expected to
identify the most sustainable solution fulfilling the stated needs using their knowledge of the
market and the procurement process. Sustainability goals should be given consideration early
in the process to improve the chances of obtaining a more sustainable result.
It is imperative to ensure that the requirements are adequately defined since the requirements
definition forms the basis for the solicitation and sets the goals of the procurement action. It
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also informs the potential suppliers of the requirements the offered product/service must have
in order to fulfil the needs of the CTBTO.
A clear definition of the requirements also helps the vendor to understand what is expected
and helps to minimize any ambiguities during the evaluation process, and thus serves as the
starting point when determining which offer provides the best value for money for the
CTBTO.
A well-defined requirement has the following characteristics:
Clear definition of the purpose, performance requirements, characteristics, objectives,
and/or expected output, depending on the nature of the product (i.e. goods, services or
works).
Accurate specification of the exact needs; overspecification may lead to receiving
higher prices and/or decrease the number of offers as it leads to offers for more
advanced products than those actually needed, while under-specification may lead to
obtaining a product that does not meet the requirement.
Generic specifications shall be used. Specific brands or other unnecessary restrictions
shall not be included except for standardization purposes. If brand names are used to
define functional, performance and/or conformance requirements they must never be
used without also specifying the minimum requirements considered essential. The
specification must also clearly invite offers of equivalent products, (i.e. products
meeting similar functional, performance and/or technical standards). In the event that
the requirement specifies a particular brand for the purpose of standardization, the
rationale for this requirement shall be briefly stated in the solicitation document in
order to avoid negative perception in the vendor community of any bias on the part of
the CTBTO.
Inclusion of environmental and social responsibility aspects (environmentally friendly
production methods) that should be considered in the evaluation.
Where appropriate (usually for complex contracts), requirements should include key
performance indicators (KPIs) to be monitored during the contract management stage
(see Chapter 13 Contract management). KPIs and SLAs are useful tools to express
and measure performance against agreed targets and these are particularly
recommended for complex contracts of goods and services, including long-term
agreements (see Section 11.3.3 Long-term agreement).
It is best practice to ensure that KPIs are identified at the requirements definition
stage. They should be Specific, Measurable, Achievable, Relevant, and Time-bound
(SMART). They should also be incorporated in the Solicitation Documents. When
issuing the contract, KPI targets should be included in a SLA as a separate Annex to
the contract.
Some examples of KPIs include the following:
a) Quality of goods/services/works delivered (in accordance with
specifications/TOR/SOW);
b) Delivery of goods in full, on time and secure with no damage;
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c) Delivery of services/works on time and no cost overruns;
d) Customer service, responsive to needs (supplier’s response time for urgent
orders);
e) Issue resolution;
f) Management of risk;
g) Management of shipping, appropriate handling and timely submission of
documents (reports, invoices, and shipping documents);
h) Adherence to warranty provisions;
i) Sustainability initiatives.
4.2.3 Technical specifications
Technical specifications usually refer to defined requirements for goods, but in some
instances can also relate to requirements for services that are straightforward and quantifiable.
Specifications may be stated as one or a combination of the following:
a) Functional specifications; describes what a product is to do.
b) Performance specifications; describes what is to be achieved rather than providing
a fixed description of how it should be done. To ensure quality, where appropriate,
a reference to the concerned product standards (e.g. ISO) and environmental
standards (e.g. ISO 14000), should be made.
c) Technical/conformance specifications: defines the exact design and details of a
good (for example, the physical attributes, material to be used, power input and
output, the manufacturing process required), or in the case of a service, the
working methods to be used.
Technical specifications should consist of a generic and clear description and should state the
required performance capability or capacity, the required compatibility or interoperability of
equipment with other equipment, as well as any other technical or economic criteria that will
be used to evaluate the eventual proposal. Specifications should not refer to brand names,
catalogue numbers, types of equipment from a particular manufacturer, or country of origin of
materials, except when it has been determined that it is necessary to do so in order to
guarantee the inclusion of a particular essential design or characteristic of functioning,
construction or fabrication. In these cases, the references should be followed by the words “or
equivalent”, together with the criteria for determining such equivalence. If testing or
commissioning is required, the procedure and the criteria shall be stated.
4.2.4 Terms of reference (TOR)
The TOR for services shall describe the objective and function of the services, the
methodology to be employed, the stages of progress and the reports on such progress to be
submitted. The quality of the services shall be stated as well as the means of monitoring
whether performance is satisfactory. The outcome shall be described in terms of functionality
or services and clearly state the procedures and criteria for any testing or commissioning.
Where a supplier/vendor as part of its contractual obligations is required to procure
equipment, it normally shall not be necessary to state the technical specifications of the
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equipment with the same degree of detail as if the equipment were purchased directly by the
CTBTO. In such cases, the description shall focus on functionality and performance criteria.
Adequate and clear TOR are imperative for an understanding of the assignment, and to
minimize any risk of ambiguities during the preparation of proposals, negotiations and
execution of services. Unclear TOR can lead to less successful projects, as the suppliers will
be forced to make assumptions on what is needed. There is also the risk of disputes and
claims, as it might not be clear who is responsible for what during contract implementation.
It is important that the end user actively participates in the preparation of the TOR. The
process of developing TOR requires detailed knowledge of the background, the current
situation and possible constraints (political situation, cultural or environmental constraints
etc.). The process of preparing TOR often reveals unrealistic expectations as to what can be
achieved in the current situation. Thus, preparation should be as participatory as possible, to
ensure agreement on the level of expectations.
The TOR usually includes the following information:
a) Background Information
Background for requesting the service: this section shall include sufficient
information for someone not familiar with the context to be able to form a clear
picture of the setting for the required services. This section shall also explain the
reasons (justification) for the required services.
b) Description of the Assignment
Global objective of the service – describes the overall goal to which the required
services are contributing, stating what the requested service is designed to achieve
and for whom.
Specific objective(s) – the main outcome of the services when completed by the
Contractor and the situation that is expected to prevail upon completion of the
services.
Requested services – what should be done, in other words, this section should
clearly outline the services that need to be provided by the Contractor. In
addition, if required, an outline of the methodology to be used for the
implementation of the requested services. This section shall also outline the tasks
and inputs required to perform activities (reach the required output).
Required outputs/deliverables – outputs required from the service, which
should also include social and environmental considerations. It is essential that
the expected outputs are accurately described (observable and measurable). This
description can then be used to determine whether the Contractor has delivered
the requested outputs in conformity with the TOR. It is therefore advisable that
the required outputs have a one to one relationship with the services and tasks
identified in the previous section (requested services). The description allows
further definition of what is expected from the Contractor. The outputs shall be
presented in a logical or sequential order.
c) Experts Profile or Expertise Required
Description of the profile of the experts required;
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Experience: category and duration of equivalent experience;
Minimum required skills must be clearly identified;
The numbers required and the number of person-days per expert or per category,
if applicable;
Education;
Language skills.
d) Location and Duration
Starting period: the indicative starting date for the assignment;
Foreseen finishing period or duration;
Location(s) of assignment.
e) Reporting
Content/Format;
Language;
Submission/comments timing;
Number and type of report(s).
4.2.5 Statement of work (SOW)
A SOW is a document routinely employed in the field of project management. It defines
project specific activities, deliverables and timelines for a vendor providing services to the
client.
4.2.5.1 SOW for Construction Projects
When used for construction projects the SOW usually include design/drawings, bill of
quantities and technical specifications which describe the works in sufficient detail to identify
the location, nature and any complexities involved. The SOW should also entail the
requirements that the supplier should possess: the necessary qualifications with respect to
capacity, experience and financial strength necessary to carry out the type of work requested.
The term “works” generally includes all types of civil, mechanical, electrical or other
engineering/installation services as well as the supply of construction materials and
equipment included therein.
It is common practice to use the services of a consulting engineer to help in the preparation of
the SOW for large and/or complex works. In such cases the consulting engineer could also be
asked to prepare the details of the Solicitation Documents. However, the information below
provides general guidelines concerning the requirements of the SOW. In cases where a
consulting engineer is used, these general guidelines can be used to check/follow-up on the
work of the engineer.
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Content of SOW
The SOW provides background and detailed information for the construction works and
usually includes at a minimum the following information:
a) Background description of the project, its purpose and functionality. This should
include any relevant information that would help someone not familiar with the
current situation to form a clear picture of what is required.
b) General Information
Location of the project: information and a brief description of site accessibility
and availability of major services such as electricity and water.
Legal status of the titles for the plot where the construction will take place.
Site ownership: clarification on the ownership of the site.
Designs/drawings: indicate whether the designs are being provided or should be
elaborated on by the supplier. Check that the designs have been registered and
comply with local regulations, and clarify who is responsible for what in that
respect.
Right of way: check if right of way is needed (for locations where access is
through other properties) and clarify who is responsible for what in that respect.
Budget: check available budget.
Deadline: check if there is a deadline for the execution of the works and indicate
it accordingly in the Solicitation Documents.
Supervision: define supervision costs that should be borne by the supplier (e.g.
office space at the site, telephone, electricity, mobility, PCs and other equipment,
lodging if needed).
c) Supplier requisites
Experience: number of similar works (by nature and size measured by contract’s
value) undertaken in last ten years.
Client references.
Minimum personnel: function and qualifications required by each key personnel
(e.g. chief resident, residents for electricity/civil works, specialists).
Financial capability: the balance sheet to show debt ratios, and working capital
demonstrating free availability equivalent to the estimated value of two/three
monthly payment certificates. For major construction works, an estimated
investment curve is usually included in the feasibility study from where the
working capital can be derived.
Minimum equipment: minimum number and characteristics of equipment needed
to undertake the works. During the evaluation process, age of equipment is often
taken into consideration.
Construction methods/approach: programme of works, presentation, mobilization,
in what order various steps will be made etc.
d) Design drawings
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Design drawings for construction contain all the information necessary for the
construction contractor to bid on and build a particular project. Typically, the
preparation of design drawings provides a detailed record of the design and structural
requirements of the works. A contract or tender document often references design
drawings. Design drawings should show details on layout, measurements, plan, cross-
sectional and vertical profiles. This information is prepared as scale drawings of the
works to be constructed. Design drawings should be presented in such a way that:
the project can easily be understood;
they visually communicate the concept to the construction contractor;
they are legible;
they include all information from previous revisions and updates.
The design drawings should include the following aspects:
site layout and the location of the works to be constructed;
plan views detailed designs and cross-sectional profiles of the works;
dimensions and units gradients;
titles and scales that meet the required standards and units;
adequate labelling;
be dated and signed by the designer.
e) Bill of quantities
The bill of quantities is the list of all main components of the project (e.g. buildings,
roads, sidewalks, lighting, equipment, etc.) including estimated quantities for each
line item (soil movements/excavations, structures, roofing, floors, sanitation, etc.) and
information on the way it will be paid (e.g. lump sum or unit price). The bill of
quantities should be complete and exhaustive especially in contracts based on unit
prices.
f) Technical specifications
Technical specifications contain specific requirements and construction standards for
various elements of a project. This includes how the work will be done, the quality of
workmanship and methods of testing. Typically, construction projects require
construction of various elements and use of various materials (e.g. type of cement
mix, type of iron rods, bricks, etc.)
More than one technical specification may be required for the whole project. For
example, a construction project may require individual technical specifications for
earthwork, erosion and sediment controls, concrete works, fencing, building works,
roads, electrical systems, etc.
Designers will usually have suitable standard technical specification documents.
However, as a guide a specification might include the following:
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Lab methods for “quality control” of each item, when relevant;
Rules to accept or reject materials or works;
Methods for measurement and payment of each item (the works, materials, etc.,
that are included in each item and the criteria to measure them);
Environmental conservation policies and responsibility of supplier concerning
these;
Quality assurance programme.
4.3 Requisitions
4.3.1 General Description and Requirements
A requisition may be raised for procurement of either (1) goods or (2) construction/works
or (3) services.
If multiple types of goods, construction or services are needed, or if the requirements can
best be met by different suppliers, separate requisitions for each type or group of
requirements should be raised. Upon receipt of a requisition, the assigned Procuring
Entity shall review it and determine the most appropriate contract format.
A requisition is a written or computerized request from an internal user/customer for the
fulfilment or procurement of goods, services or works. It is mandatory to initiate all
procurement activities based on an approved requisition in the Provisional Technical
Secretariat’s (PTS) ERP system (SAP).
A requisition must include, at a minimum, the following:
i. A detailed description of the goods, works or services required.
ii. Quantity to be procured.
iii. Estimated price.
iv. Any additional information (e.g. standardization, preferred method of shipment).
v. Name and address of the recipient/end user, including whether it is a project in a
Signatory State or at the PTS at the Vienna International Centre (VIC) or the
Technology Support and Training (TeST) Centre.
vi. Name and address of the consignee in case of delivery of goods to places outside the
VIC, where applicable.
vii. Delivery location or location of works/services to be performed.
viii. Required date(s) of delivery of goods and/or of the commencement and completion of
the performance of constructions or services. The date(s) shall be realistic and allow
adequate time for the procurement process and any manufacturing or shipping
involved.
ix. The preferred or required mode of shipment (air, land or sea) of goods, where
applicable.
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x. If possible, where competitive bidding is required, a list of potential recommended
suppliers/contractors, including names, addresses, contact persons and qualifications
as well as a description of prior experience with the suppliers/contractors. By
submitting a list of recommended suppliers, the Requisitioner confirms that to the best
of his/her knowledge no conflict of interest exists concerning any of the suppliers on
the list.
xi. Sole source justification in a memorandum signed by the Allotment Manager, quoting
the relevant Financial Rule where a sole source supplier is recommended, and
evidence supporting the sole source justification (see Section 6.8), if required.
xii. Statement of the account assignment code (as described in Administrative Directive
No. 11) against which the proposed obligation is to be charged and an estimate of the
funds that will be required.
xiii. Approval of the shopping cart by the Allotment Manager authorizing utilization of
one or more parts of the Programme Budget.
xiv. Certification by the Certifying Officer showing that the certified amount is in
accordance with the CTBTO’s FRR and any applicable instructions, that it is
reasonable and that it is in accordance with the purposes of the allotment and can be
met from the available balance in the relevant allotment account. Should it
subsequently become clear that the certified amount is insufficient to cover the
requested procurement, the Requisitioner must submit a new approved requisition
with the higher amount, except if the increase is less than 10 per cent of the proposed
contract value or does not exceed $10 000.
xv. For procurement requests for hardware, software and information technology related
goods and services, clearance and approval shall be obtained from the Chief
Information Technology Officer and provided with the requisition. The instructions
governing clearance by the Chief Information Technology Officer are attached to this
Procurement Manual as Annex III.
xvi. A requisition shall be accompanied by a clear description of the goods, services or
works to be procured (i.e. succinct technical specifications for goods and
comprehensive and detailed TOR or SOW for services and works). See Sections
4.2.3, 4.2.4 and 4.2.5 above.
xvii. A list of evaluation criteria against which the goods/construction/services shall be
evaluated.
The Substantive Officer shall consult the Procuring Entity assigned to the case concerning the
format, structure and non-technical aspects of the TOR or technical specifications in order to
ensure that they are suitable to become an integral part of the eventual contract. The
deliverables shall be clearly stated (such as scope and timing of milestones or time, place and
mode of delivery of equipment). Such consultations are particularly important for non-
standard, complex or extensive procurement requirements. If, following such consultations,
the TOR or technical specifications require amendment and if such amendments are made by
the assigned Procuring Entity, the final version of the TOR or technical specifications shall be
approved by the Substantive Officer. If the amendments are made by the Substantive Officer,
the final dated version of the TOR or technical specifications shall be submitted without delay
to the assigned Procuring Entity.
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4.3.1.1 Standardization
Standardization is the process of agreeing on a standard specification for a specific good,
service or work which is usually conducted to achieve economies of scale, compatibility with
other products, facilitation of operation, maintenance, and repair of already purchased goods,
etc. Standardization is applicable when identical goods, services or works have recently been
purchased from a supplier, and it is determined that there is a need for compatibility with
existing goods, services or works. Such cases must be justified as further described in Section
6.8 Exceptions.
4.3.2 Processing of Requisitions
4.3.2.1 General Requirements
All requisitions must be processed in accordance with the relevant Delegation of
Authority (See Section 2.2 (c)), taking into account the priorities of the CTBTO.
Requisitions (Shopping Carts) must be duly approved by the Allotment Manager and the
Certifying Officer of the applicable Division before they are submitted to the Chief of the
Procurement Section or the duly authorized Procuring Entity.
4.3.2.2 Requisitions processed by the Procurement Section
Please note that the Procurement Section will also process requisitions below $4 000 for
Sections without Delegation of Authority to process requisitions.
i. Requisitions with a value above $4 000
In accordance with the Delegation of Authority (see Section 2.2 (c)), the Chief of the
Procurement Section shall ensure that requisitions assigned to the Procurement
Section are processed in a timely manner.
Upon receipt and acceptance of a requisition, the duly authorized Procuring Entity
shall be responsible for ensuring that procurement procedures set out in the
CTBTO’s FRR, Administrative Directive 27 and in this Procurement Manual are
followed. He/she shall maintain transparent official records that document each
procurement transaction.
Except in such cases where the Substantive Section is the authorized Procuring
Entity (see Section 2.2 (c)), from the time a requisition has been submitted to the
Procurement Section and until the pertinent procurement contract has been
concluded, all communications with the invited potential contractors/suppliers must
be made through the Procurement Section. After conclusion of the procurement
contract, the Substantive Section concerned may communicate directly with the
contractor/supplier on purely technical aspects.
ii. Requisitions Below $30 000 Related to Urgent Unscheduled Maintenance
Urgent Unscheduled Maintenance Shopping Carts/Requisitions are raised on the basis of
Priority Type 1 (Urgent Repairs) or Priority Type 2 (Enhanced Repairs) as defined in the
Draft IMS Operational Manual:
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Radionuclide/Noble Gas:
Urgent Repairs (Priority 1) are required whenever a station becomes non-
operational i.e. experiences a failure of a critical part and therefore is unable to
provide samples according to its normal schedule. This includes the air
sampling system in the case of particulate equipment, and the sampling
processing system and detection system in the case of noble gas equipment.
Correction of the problem is to be made within 72 hours of failure. Urgent
repairs require immediate action to restore operational status.
Enhanced Repairs (Priority 2) are required whenever a station approaches
non-operational status, i.e. when there is the significant likelihood that a
radionuclide station cannot meet its data availability requirements owing to the
failure of a key part of the station particulate measurement system, such as the
gamma ray spectrometer, or critical state of health sensors. Resolution of the
problem and restoration of operational conditions are to be made within seven
days of the failure so as not to exceed the limit for a consecutive number of days
of downtime. The factors that trigger enhanced repairs are station specific.
Seismic/Hydroacoustic/Infrasound:
For seismic, hydroacoustic and infrasound stations, Urgent Repair (Priority 1)
is required whenever a station becomes non-mission-capable, a situation which
requires immediate action to restore mission capability.
For seismic, hydroacoustic and infrasound stations, Enhanced Repair (Priority
2) is required whenever a station approaches non-mission-capable status. The
factors that trigger enhanced repair are station specific (e.g. station
configuration, number of array elements, site access considerations, etc.).
Maintenance is required as soon as it is feasible to ensure that the station
remains mission capable.
The Shopping Cart shall clearly reference the level of priority and provide supporting
documentation explaining the circumstances, most commonly in the form of the IMS
Problem Report Number. Problem Reports can be viewed/accessed by Procurement Section
staff under https://irs.ctbto.org/secure/Dashboard.jspa using Microsoft Windows credentials.
The same procedure for Low Value Purchase Orders as outlined in 4.3.2.4 i) below shall be
applicable to requests related to priority 1 and priority 2 unscheduled maintenance below
$30 000, as defined in the Draft IMS Operational Manual.
Clear reference to the Problem Report Number and the Urgent Unscheduled Maintenance
Priority Level shall also be made in the Purchase Order Title/Short Description.
4.3.2.3 Requisitions processed by the General Services Section
In accordance with the Delegation of Authority (see Section 2.2 (c)) the Head of the General
Services Section and Clerks and Senior Travel Assistants in the General Services Section are
responsible for processing requisitions for contracts with moving companies (as provided for
in Administrative Directive No. 67), requisitions for contracts for shipment of verification
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equipment not exceeding $150 000, and requisitions for contracts for transportation and
accommodation related to PTS sponsored events and/or participants (as provided for in
Administrative Directive No. 46).
4.3.2.4 Requisitions processed by the Substantive Section
Requisitions Below $4 000 (Low Value Purchases/Miscellaneous Purchase Orders)
In accordance with the Delegation of Authority (see Section 2.2 (c)), requisitions
below $4 000 (Low Value Purchases/Miscellaneous Purchase Orders) shall be
processed by the Procuring Entity in the Substantive Section if possessing the
required Delegation of Authority. (See Guidelines for the Management of Low-Value
Procurement at CTBTO).
For the procurement of goods, construction or services with an aggregate value of
less than $4 000, excluding VAT, it is not mandatory to establish a written contract
with the vendor or to issue a purchase order to the vendor. The Certifying Officer or
the Substantive Officer may order the item without calling for competitive bidding.
This monetary limit applies to the actual payment obligation, which therefore must
be a fixed amount and not subject to any increase. However, the proper obligation of
funds must be made in accordance with Administrative Directive No. 42 (which will
require the creation of at least an internal Purchase Order for obligation purposes).
When an order is placed verbally, the supplier must be informed of the Purchase
Order number and be requested to clearly show that number as well as the name of
the Substantive Officer on the invoice, on any other document to be delivered and on
the package or packing list of any ordered good. In the case of goods to be delivered
to the headquarters of the PTS, the supplier must be further instructed to deliver to
the VIC Receiving Area or to the TeST Centre.
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Chapter 4 Resources
The CTBTO’s
Policies
Administrative Directive No. 42 – Obligation of Funds
Guidelines Guidelines for Drafting Specifications, Terms of Reference
(TOR) and Statement of Works (SOW)
(Please contact the Procurement Section for access to this
document.)
IMS Operational Manual
Thresholds and Other Instructions for Solicitations
(See Please contact the Procurement Section for access to
this document.)
Templates Procurement Plan template
(Please contact the Procurement Section for access to this
document.)
Sourcing Plan
(Please contact the Procurement Section for access to this
document.)
Other useful
resources
CTBTO’s Medium Term Strategy
(Please contact the Procurement Section for access to this
document.)
CTBTO’s Programme and Budget
Samples of Terms of Reference
(Please contact the Procurement Section for access to this
document.)
Samples of Specifications for Goods
(Please contact the Procurement Section for access to this
document.)
Samples of Statement of Work
(Please contact the Procurement Section for access to this
document.)
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CHAPTER 5: SOURCING
5.1 Sourcing of vendors
Sourcing is the practice of identifying and selecting suppliers for goods, services and works
based on set criteria, and the ultimate objective of sourcing is to identify suitable suppliers to
provide the required goods, services or works for the CTBTO. The sourcing process also
provides valuable information about products and specifications and is used to determine the
appropriate solicitation method and type of competition (see Chapter 6 Solicitation).
Consistent with the principles set out in Financial Regulations 11.1 and 11.5, and except as
otherwise provided for in Financial Rule 11.5.06, procurement contracts shall be awarded on
the basis of effective competition. To this end the competitive process shall, as necessary,
include:
(a) Acquisition planning or procurement planning;
(b) Market research to identify potential suppliers;
(c) Consideration of prudent commercial practices;
(d) Formal methods of solicitation, utilizing Invitations to Bid or Requests for
Proposal on the basis of advertisement or direct solicitation of invited suppliers,
or informal methods of solicitation, such as Requests for Quotation.
Sourcing is undertaken using two main methodologies, described below:
(a) Market research;
(b) Advertisement of business opportunities.
5.2 Market research
Market research is the process of gathering, analysing and interpreting information about a
market, about a product (goods, services or works) offered for sale in that market, and about
the past, present and potential customers for the product, the industry as a whole, and the
particular competitors in the market.
Market research is the first step in any successful sourcing process as it can succinctly reveal
important information about issues such as pricing, and the types and numbers of suppliers
available in the market.
The information gathered from the market research can be utilized to assist in defining
requirements of the product such as development of Specifications, TOR and SOW, and is
also used to determine the appropriate solicitation method and type of competition (see
Section 6.3 Solicitation methods).
Market research can be undertaken utilizing a number of sources (both internal and external)
and should not rely solely on any one source. The objective of the market research is to
identify a list of suitable suppliers for a particular product. During preparation of the list, care
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must be taken to select suppliers on as wide an international basis as possible, and the list of
suitable suppliers shall be documented in the procurement case file.
5.2.1 Internal sources
SAP supplier database;
Existing CTBTO Long Term Agreements (LTA or Framework Agreements;
Established rosters (e.g. product specific rosters);
Suppliers who have had prior contracts with CTBTO;
Previous short lists for similar goods/services/works;
Consultation with colleagues.
5.2.2 External sources
UNGM (www.ungm.org);
Other internet sources;
Other UN organizations/lead agencies specialized in the procurement of goods or
services within a particular field (e.g. UNHCR for refugee supplies, UNICEF for
vaccines, WHO for pharmaceuticals and medical equipment, etc.);
Commercial/specialized journals and magazines;
Embassies and Chambers of Commerce;
Governments, end users, clients, funding sources;
Business seminars, supplier catalogues, professional journals, trade publications.
5.2.3 Advertisement of business opportunities
Business opportunities (procurement activities) shall be made widely known to all potential
suppliers. Advertisement of business opportunities can be undertaken as per the below
methods:
a) Advertisement for open competitive bidding of a RFQ, ITB or RFP;
b) Request for information (RFI) (see Section 5.3 Request for information);
c) Request for Expression of Interest (EOI) (see Section 5.4 Request for expression of
interest).
Guidelines concerning threshold for advertising business opportunities are provided in Table
2 “Thresholds and Other Instructions for Solicitations”.
Business opportunities shall be advertised on the CTBTO’s website and the UNGM. When
appropriate and cost effective, other means such as trade journals, the websites of donors or
end users (governments), local newspapers, or other media such as radio or TV can also be
utilised.
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5.3 Request for information
Where appropriate, an RFI can form part of the market research. This tool can be used to
request information on issues such as technical developments of a product, supply availability
and price indication for a particular product. Depending on the type of information to be
obtained and the knowledge of the market, the request can be openly advertised, and/or can
be sent to particular suppliers known to the Procuring Entity. An RFI shall always be written
as a non-binding inquiry.
Though an RFI can be an effective and efficient tool to help identify a possible solution for a
specific requirement, additional time is needed to conduct the process, the process is costly to
suppliers and is not considered by suppliers as a necessary prerequisite to a competitive
process. Therefore, Procuring Entities should exercise prudence concerning the use of RFIs.
5.4 Request for expression of interest (REOI)
An REOI is a tool used to stimulate and assess suppliers’ interest in providing a particular
product (goods, services or works) and to solicit useful information from these suppliers.
A REOI is typically used during sourcing for complex products. An REOI also provides an
opportunity for interested suppliers to be informed about future announcements related to the
particular product. It can be a cost effective method for identifying potential suppliers for
products, and it can also be used to assess whether or not a market exists for the product
being sought, and can serve as a vehicle to solicit feedback on how to refine the definition of
the requirements for the product being sought. It is also a useful tool for identifying the most
qualified bidders when there is an oversupply of potential bidders for a particular product.
It shall be stated clearly that responding to a REOI is not a prerequisite to participating in the
competitive selection process and does not imply any binding commitment by any party.
An REOI shall be advertised on the CTBTO’s website and the UNGM. It can also be
advertised by other means as appropriate (see Section 5.2.3 above). Depending on the
complexity and nature of the product being procured, a recommended minimum of ten days
should be granted for responses to an REOI.
The resulting responses (EOI) consist of a written communication prepared by a supplier
providing information about its products, resources, qualifications and experience. The
responses can be used to develop a short list of suppliers for a particular procurement action
and/or to update the supplier database or rosters for similar products for future use.
Evaluation of EOIs must be performed by an evaluation team formed by at least two officials:
one procurement official and another official, as further defined in Section 8.2 Evaluation
team.
Though an REOI can be an effective and efficient tool to help identify a possible solution for
a specific requirement, additional time is needed to conduct the process, the process is costly
to suppliers and, therefore, Procuring Entities should exercise prudence concerning the use of
REOIs.
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5.5 Recommended Supplier List
The objective of establishing a list of suppliers is to promote cost effective competition
between qualified suppliers. The following principles shall guide the selection process:
a) Market research: for more information see Section 5.2 above.
b) Origin of supplier: suppliers selected for the list shall have their origin in the States
Signatories of the Comprehensive Nuclear-Test-Ban Treaty (CTBT). The “origin"
means the place from where the materials, goods and/or services are supplied.
Notwithstanding, the suppliers included in the list shall, to the extent possible,
represent a fair share of potential markets and equitable geographic distribution.
c) Strategy depends on the monetary value of the procurement activity: see Table 2
“Thresholds and Other Instructions for Solicitations”.
The list of selected suppliers invited to a tender must be kept on file.
Chapter 5 Resources
Templates Request for information (RFI)
(Please contact the Procurement Section for access to this
document.)
Request for Expression of Interest (REOI)
(Please contact the Procurement Section for access to this
document.)
Recommended List of Suppliers
(Please contact the Procurement Section for access to this
document.)
Other useful
resources
UNGM (advertisement of business opportunities)
CTBTO Website (advertisement of business opportunities)
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CHAPTER 6: SOLICITATION
6.1 Overview
a) Solicitation is the act of trying to obtain an offer from a supplier for goods, services or
works.
b) In accordance with Financial Rule 11.5 and Administrative Directive No. 27,
international tenders for equipment, supplies and other requirements shall be invited by
advertisement, except when departure from that rule is authorized by the CTBTO or,
exceptionally, in the case of de minimis purchases, or where there is a sole supplier.
c) The solicitation process shall be undertaken either through formal or informal methods
of solicitation. Formal methods of solicitation shall utilize ITB or RFP on the basis of
advertisement or direct solicitation of invited suppliers. Informal methods of
solicitation, such as RFQ, can be utilized.
d) Prior to launching a solicitation process, the Procuring Entity shall ascertain whether or
not the requirements could be met through the use of an existing LTA or Framework
Contract.
e) If the requirements cannot be met appropriately through the use of an existing LTA or
Framework Contract, then the appropriate solicitation process must be undertaken.
f) Tenders for equipment, supplies and other requirements shall be invited by
advertisement, except where the Executive Secretary deems that a departure from this
regulation is in the best interests of the CTBTO (see Section 6.8 Exceptions to
Competitive Tendering).
6.2 Types of competition
The type of competition utilized depends on the type of procurement activity. Types of
competition include open international competition, limited competition and national/regional
competition undertaken through utilizing the services of the Station Operator. Open
international or national/regional competitions are the most transparent methods of
conducting a formal solicitation process.
6.2.1 Open international competition
The purpose of open international competition is to provide all potential suppliers with
adequate and timely notification of the CTBTO’s requirements and equal access and fair
opportunity to compete for contracts for required goods, services or works.
Refer to Table 2: Thresholds and Other Instructions for Solicitations, for further details,
including monetary thresholds subject to international competition.
6.2.2 Limited Competition
Limited competition allows only selected vendors based on set criteria to participate in a
solicitation. Limited competition is usually restricted to a list of suppliers selected in a non-
discriminatory manner from expressions of interest, market research, etc.
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Some reasons for limited competition include:
a) An open tender will have negative security implications.
b) The subject matter of the tender is sensitive and advertisement on a wide basis would
not be in the best interests of the CTBTO.
c) A list of vendors to be invited to bid has been created following an EOI (further to the
provisions in Section 5.4 Request for expression of interest (EOI)), and a limited
tender is determined as the most suitable procurement strategy.
d) Only a limited number of suppliers are capable of performing the contract. This
exception should only be invoked where patents, copyright requirements, or
technical compatibility factors and technological expertise suggest that only a few
suppliers exist.
e) The procurement value is within the monetary threshold subject to limited
competition. See Table 2: Thresholds and Other Instructions for Solicitation.
6.2.3 Use of Station Operator
When applicable, a station operator (post-certification activities (PCA) contractor) may be
requested to conduct bidding on behalf of the CTBTO. The station operator must ensure that
a sufficient number of prospective vendors are invited and that at least three offers are
received and evaluated, in order to establish value for money (see Annex IV: Use of Station
Operator or PCA Contractor to provide competitive bid).
6.3 Solicitation methods
a) As provided for in Financial Rule 11.5.05, and Administrative Directive No. 27,
procurement contracts shall be awarded on the basis of effective competition, i.e.
competitive bids, proposals or quotations.
b) The Procurement Section shall invite competitive bids or competitive proposals by
advertising or distributing formal invitations on as wide an international basis as
possible, taking into account the existence of possible sources of procurement and that
goods, construction and services must have their origin in a State Signatory of the
CTBTO.
c) Competitive bids or competitive proposals are required for a proposed procurement
involving an estimated obligation of $70 000 and above.
d) Details on the submission and opening procedures for bids and proposals are outlined in
Table 2: Thresholds and Other Instructions for Solicitation.
e) The CTBTO uses three methods to solicit an offer from a supplier: RFQ, ITB and RFP.
The first is considered an informal method of solicitation and the latter two are
considered as formal methods of solicitation. A number of factors, such as the
complexity and nature of the requirement (goods, services or works), monetary value
and conditions of delivery influence the choice of the solicitation method (see Table 2:
Thresholds and Other Instructions for Solicitation).
f) If for reasons beyond its control an invited bidder cannot meet the deadline for
submission of competitive bids, proposals or quotations, the Chief of the Procurement
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Section may extend the deadline by simultaneous written notification to all invited
bidders.
g) If necessary for operational or technical reasons, the Chief of the Procurement Section
may amend the Solicitation Documents at any time before the deadline for submission
of competitive bids, proposals or quotations by simultaneous written notification to all
the invited bidders. If the notification is issued close to the deadline, a reasonable
extension of the deadline should be granted.
h) Upon written request of an invited bidder, the Chief of the Procurement Section may
provide a written clarification of the Solicitation Documents. Such clarification shall be
communicated simultaneously to all invited bidders and may not reveal the identity of
the bidder who sought the clarification.
i) Where the interests of the CTBTO so require, all quotations, bids or proposals may be
rejected. Such rejection shall be recorded in writing together with the reasons for
rejection of the quotations, bids or proposals. In that event, the responsible Procuring
Entity shall determine whether new competitive quotations, bids or proposals shall be
invited or whether negotiations on a contract shall be taken up with a bidder or a third
party.
6.3.1 Request for quotation
An RFQ is an informal method of solicitation. Pursuant to Financial Rule 11.5.02, a RFQ is
an informal Solicitation Document, normally used for low value procurement requirements
(below $70 000), for goods, works or services that meet standard specifications and are
readily available on the market. The contract shall normally be awarded under Financial Rule
11.5.07 (a) (i) “to the 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 CTBTO”.
Competitive quotations shall be requested where it is estimated that the obligation will be at
least $10 000 but will not exceed the limit of $70 000. Whenever practicable, quotations shall
be requested from qualified potential suppliers selected on as wide an international basis as
possible. Normally, requests for quotations shall be used to request prices and commercial
terms for goods, services or works that meet standard specifications and are readily available
in the market.
For cases with values below $4 000 and for Urgent Unscheduled Maintenance cases (under
$30 000), a request for quotation can be made without the use of the RFQ template. The use
of the RFQ template is mandatory for procurements with values of $4 000 or above. The
deadline for submission of responses must be specified in the RFQ document and
communicated to all prospective bidders.
All quotations in response to an RFQ must be received in writing (see Table 2 for thresholds
and other instructions for solicitation).
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6.3.2 Invitation to bid
An ITB is a formal method of solicitation. Pursuant to Financial Rule 11.5.02, an ITB is a
formal Solicitation Document which shall be used for the procurement of goods, services or
works when the requirements are clear, quantifiable and specific.
Competitive bids shall be invited where the terms of reference or technical specifications
contained in the Solicitation Documents provide a complete and definitive description,
quantitatively and qualitatively, that is not subject to modification or negotiation after receipt
and opening of bids. Whenever practicable, bids shall be requested from qualified potential
suppliers selected on as wide an international basis as possible. The invitation for competitive
bids may be preceded by a call for expressions of interest on as wide an international basis as
possible (through printed media, the CTBTO public web site and the UNGM web site).
The contract shall be awarded under Financial Rule 11.5.07(a)(i) “to the 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 CTBTO”.
An ITB is mandatory for procurements equal to or above $70 000.
The use of the ITB templates is mandatory in all cases. ITBs must have a clearly defined
submission deadline, which must be specified in the ITB document and communicated to all
prospective bidders. Bids in response to an ITB must be received in writing (see Table 2 for
thresholds and other instructions for solicitation).
6.3.3 Request for Proposal
An RFP is a formal method of solicitation where prospective suppliers are requested to
submit a proposal for the provision of goods, works or services based on the specifications,
TOR or SOW included in the Solicitation Documents.
Pursuant to Financial Rule 11.5.02, an RFP is a formal Solicitation Document which shall be
used for the procurement of goods, services or works that cannot be quantitatively or
qualitatively expressed in sufficient detail to allow for use of an ITB, such as professional or
other complex goods, services or works.
Competitive proposals shall be requested where the TOR or technical specifications are
intended to solicit additional information through the comparison of competitive proposals
and/or where the description in the Solicitation Documents is not complete and definitive but
subject to modification and/or further negotiation before the award is made. Whenever
practicable, proposals shall be requested from qualified potential suppliers selected on as
wide an international basis as possible. The invitation for competitive proposals may be
preceded by a call for expressions of interest on as wide an international basis as possible
(through printed media, the CTBTO public web site and the UNGM web site).
When the Substantive Officer, in consultation with the Procuring Entity, determines that
inviting proposals is the preferred method for the solicitation, he/she shall, to the extent
possible, use functional specifications for the goods, services or works being procured. The
specifications shall be clear, comprehensive and preferably performance oriented.
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In exceptional circumstances, it can be envisaged to include an indication of the available
budget in the RFP documents; however, the potential drawback is that information about the
available budget may lead bidders to align their financial proposals to the budget disclosed.
The decision to include the budget in the RFP documents must be approved by the Chief of
Procurement.
An RFP requires separate technical and financial proposals to be submitted. The purpose of
the request is to ensure that the technical evaluation focuses solely on the contents of the
technical proposals without influencing the financial proposals.
Under Financial Rule 11.5.07 (a) (ii), the contract shall generally be awarded “to the qualified
bidder whose proposal, all factors considered, is the most responsive to the requirements set
forth in the Solicitation Documents”. In other words, the award is not necessarily based on
the lowest cost but can also take into consideration technical and operational issues, price and
life cycle costs as well as the financial soundness and capacity of the supplier to deliver the
goods or to perform the services within the required timeframe.
RFPs are evaluated using two methods: lowest price/cost, all factors considered or
cumulative analysis.
1. Lowest Price
Lowest priced among technically compliant offers (technical compliance point system
with a minimum threshold).
Only the technical proposals achieving the predetermined minimum threshold after
completion of the technical evaluation shall be opened for financial evaluation. The
remaining financial proposals of offerors whose technical proposals are deemed unqualified
and unresponsive shall remain unopened. The contract will be awarded to the bidder meeting
the minimum predetermined technical score in the technical evaluation and offering the
lowest price.
2. Cumulative Analysis
This is a combined scoring method used to determine the highest rated proposal, which
assigns a weight distribution between the technical and financial proposals set out in the RFP.
The distribution of weight between the technical and financial proposals shall generally be
70%/30%, 60%/40%, or 50%/50% respectively, depending on the goods, services or works to
be purchased. In general, the lower the complexity of the requirements, the higher the
financial weight should be. Proposals are evaluated, ranked and awarded in accordance with
the ‘cumulative analysis’ evaluation methodology, defining best value as the paramount
overall benefit when considering technical and financial factors. The contract is awarded to
the qualified contractor whose proposal is considered to be the best value (technically and
financially) and who meets the requirements.
Proposals whose rating, upon completion of the evaluation of the technical proposal, do not
reach the minimum passing threshold of 70% or 60% or 50%, as determined prior to the
solicitation, shall be disqualified and shall not be further evaluated.
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In this methodology, the maximum number of points assigned to the financial proposal is
allocated to the lowest priced proposal. All other price proposals receive points in inverse
proportion. A suggested formula is as follows:
p = y (μ/z)
Where:
p = points for the financial proposal being evaluated
y = maximum number of points for the financial proposal
μ = price of the lowest priced proposal
z = price of the proposal being evaluated
The proposal obtaining the overall highest score after combining the scores of the technical
proposal and the financial proposal with the predetermined weighting is the proposal that
offers best value for money and should be selected for the award (See Table 2 for thresholds
and other instructions for solicitation).
6.4 Solicitation Documents
The Solicitation Documents are those used to invite bids or to request proposals (formal) or
quotations (informal). They shall provide all information necessary for a potential supplier to
prepare an offer for the goods, services, or works to be provided. Solicitations may be
conducted by means of secure electronic data interchange.
As applicable, the CTBTO’s standard Solicitation Documents (RFQ, ITB or RFP) must be
used when soliciting offers from suppliers. (See Table 2 for thresholds and other instructions
for solicitation).
The standard letter of invitation templates for RFQ, ITB and RFP are generated from the ERP
System (SAP) and are combined with other relevant Solicitation Documents (e.g. instructions
to bidders, schedule of requirements, returnable forms, etc.) to complete the package for the
relevant solicitation process.
6.5 Components of Solicitation Documents In general, Solicitation Documents comprise the following:
a) Letter of invitation;
b) Instructions to bidders which covers several aspects such as:
i. Evaluation criteria;
ii. Schedule of requirements;
iii. Returnable bidding forms/schedules;
iv. Contractual information.
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6.5.1 Letter of Invitation
This is a cover letter from the Chief of the Procurement Section or the assigned Procuring
Entity with the invitation to submit a quotation, a bid, or a proposal; prepared in the ERP
(SAP) system. The cover letter must include at minimum basic information such as the title
of the Request (a brief description of the requirement), reference number, deadline for
submission of the offer, contact details of the CTBTO and reference to the other documents
that comprise the solicitation. The Letter of Invitation shall be signed by the Chief of the
Procurement Section or the authorised Procuring Entity.
6.5.2 Instructions to bidders
Bid Instructions, or Instructions to Bidders, contain all the requirements, expectations,
procedures and other information deemed necessary to aid bidders in presenting their offers.
The standard templates for “Instructions to Bidders” for RFQ, ITB and RFP shall be used
when soliciting offers (see Standard Templates for “Instructions to Bidders” for RFQ, ITB
and RFP).
The table below provides information and general guidance on relevant articles which are
usually included in the instructions to bidders. These will vary according to the nature of the
procurement activity and the procurement method (RFQ, ITB and RFP) being used for the
solicitation process.
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Instructions to Bidders
1. General (background of the
requirement)
a) This section shall include a brief description of the procurement activity, the context of the procurement activity and the
intended purpose of the procurement activity. The information provided should be enough to enable the supplier to prepare a
responsive and meaningful offer.
b) In addition, if the solicitation process is being undertaken for the purpose of establishing an LTA or Framework Contract, it
should be mentioned here.
2. Documents included in the
solicitation
Reference shall be made here to all the documents that are included in the solicitation documentation. All documents shall be listed
in the order in which they appear in the solicitation document. For example:
Letter of Invitation
The Instructions for Preparation and Submission of Bids
Bidder’s Statement
Technical Requirement
Price Schedule Form
Vendor Profile Form
List of CTBT States Signatories/Member States of the CTBTO
Statement of Confirmation
The CTBTO’s General Conditions of Contract/ General Conditions for Goods
Performance Bank Guarantee.
3. Amendment of the
Solicitation Documents
The Solicitation Documents should state that at any time prior to the closing date for submission of the offer, the CTBTO may, for
any reason, modify the Solicitation Documents by amendment. The CTBTO may consider extending the deadline in order to allow
adequate time for considering the modifications in the preparation of the tender.
4. Language of the Solicitation
Documents and the offer
The Solicitation Documents as well as the offers must be prepared in English. The contract signed with the selected vendor must
also be in English.
5. Deadline for submission of
offer
The date, time and place for submission of the offer must be clearly stated, together with the location, date and time for the opening
of offers (if applicable).
Vendors should be allowed a sufficient number of days to prepare and submit an offer (see Table 2 for thresholds and other
instructions for solicitation).
6. Bid validity period In order to allow time for evaluation of offers and award of contract, suppliers shall be requested to keep their offers valid for a
specified number of days, usually a period of 90 days.
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7. Format and submission of the
offer
This section shall include information such as:
a) Mode of submission of the offer (e.g. email, mail, hand delivery);
b) Instructions on packaging of the offer: e.g. sealed/unsealed requirements, number of copies required, requirement for two-
envelope system, etc.;
c) As applicable, guidance concerning the markings to be included on the envelope (e.g. name of project, project description,
closing date, CTBTO reference number, and instructions "DO NOT OPEN BEFORE THE CLOSING DATE”.
8.Mailing address Delivery details shall be included here. This shall include physical delivery address and/or email address as applicable.
9. Request for clarifications and
contacting the CTBTO
It is good practice for the Procuring Entity to allow requests for clarification of the Solicitation Documents. The Procuring Entity
should provide a response to requests for clarifications whenever this will assist bidders to provide a better bid as this can help to
remove ambiguity or uncertainty in the mind of bidders as to the meaning of the Solicitation Documents. It is also important to
ensure that bidders correctly interpret the requirements. Responses to requests for clarifications shall be made available to all
potential bidders. The deadline for request for clarifications and response to requests shall also be stated.
10. Eligible goods and services This section shall include the following information:
“The goods and services (if any) to be rendered under the Contract shall have their origin in the States Signatories of the
Comprehensive Nuclear-Test-Ban Treaty (CTBT). For purposes of this paragraph, "the origin" means the place from where the
materials, goods and/or from which the services are supplied.”
The list of CTBT States Signatories/Member States of the CTBTO shall also be included in the Solicitation Documents.
11. Type of contract and
payment terms
1. This section shall indicate the type of contract that shall be concluded, for example firm fixed price based contract, etc.
2. The terms and conditions of payment shall also be included here. In general payment is made within 30 days of receipt and
acceptance of the goods/services and of the following documents as applicable:
a) Invoice(s) showing price of equipment/goods, pre-paid packing and handling, transportation and freight, insurance,
customs clearance and local delivery to place of destination;
b) Separate invoicing for taxes;
c) Air waybill and packing list;
d) Delivery note acknowledged by the consignee showing all the items delivered;
e) Certificate of origin (original) or equivalent;
f) Certificate of transportation insurance (copy);
g) Acknowledgement copy of the contract with supplier’s signature;
h) The supplier’s certificate, counter signed by the consignee/end user, confirming the successful completion of the
services; and
i) Any other relevant documents.
3. No advance payments shall be made, except when deemed regular practice in the industry and only in accordance with the
CTBTO’s policy on advance payments. For instructions on the CTBTO’s “Advance Payment Policy”, see Annex V. All
advance payment shall be approved by the Director of Administration in advance.
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4. Progress payments are common practice for services and works. In the case of construction works, it may be appropriate in
certain cases to include a price adjustment mechanism in the contract; if it is addressed in the contract, it should also be defined
in the contract schedules accompanied by bidding documents. Any such provision must define how the price adjustment will be
triggered based on fluctuations in various defined indices and that the adjustment will be subject to an overall ceiling. The
approved wording of the mechanism that allows for changes in cost shall be included in the contracts for works. The wording
of the mechanism must be approved by the Legal Services Section before it may be included in the solicitation document.
12. Content of the offer The offer shall be composed of two separate parts: Technical Offer and Financial Offer
Part 1: Technical Offer
a) Reference number and the date
of the offer
The reference number and the date of the offer and any correspondence relating to it shall be included.
b) Personnel
The offer shall state the contact details and address (name, telephone and fax numbers, and e-mail address) of the person/point of
contact in the company dealing with the case.
c) Documents establishing the
eligibility and qualifications of the
bidder
The bidder shall furnish documentary evidence of its status as an eligible and qualified vendor. In order to award a contract to a
bidder, its qualifications must be documented to the CTBTO’s satisfaction. These include, but are not limited to the following:
i. That, in the case of a bidder offering to supply goods under the contract which the bidder did not manufacture or
otherwise produce, the bidder has been duly authorized by the goods’ manufacturer or producer to supply the goods in
the country of final destination;
ii. That the bidder has the financial, technical, and production capability necessary to perform the contract;
iii. Expertise of the firm/organization: this section shall provide details regarding the experience of the organization and a
list of the projects/contracts (both completed and ongoing, both domestic and international) which are related or similar
in nature to the requirements of the solicitation.
d) Management structure and key
personnel
i. This section shall provide information about the management structure and include the comprehensive curriculum vitae
(CVs) of key personnel that will be assigned to support the implementation of the technical bid, clearly defining their roles
and responsibilities. CVs should establish competence and demonstrate qualifications in areas relevant to the requirements of
this ITB.
ii. Subcontractors
The offer shall include names, legal status, address and qualifications of subcontractor(s), if any, involved in the project and
the scope of the subcontracted services. The bidder shall provide a statement that their organization shall be fully responsible
for the performance of subcontractors. All subcontractors shall be legally established in one of the CTBT States Signatories
and/or Member States.
e) Statement of Confirmation The Statement of Confirmation is a document provided to the bidder to confirm the bidder’s good standing concerning bankruptcy,
payment of taxes, criminal offence, etc. The bidder shall be requested to sign and return the Statement of Confirmation document.
The Statement of Confirmation document shall be included in the Solicitation Documents.
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Part 2 : Financial Offer
a) Cost/Price The offer shall include the costs of the services, equipment/goods, packing and handling, insurance, transportation and freight,
customs clearance (if applicable) and local delivery to the required destination.
b) A Price Schedule A Price Schedule form can be included with the instructions for preparation and submission of offers.
c) Currency All individual costs shall be stated in [EURO] or [US Dollars] and be computed to constitute the total contract price.
Tax
The following information shall be included concerning taxes:
“Taxes” means all direct and indirect taxes (including value added tax, general sales tax or goods and services tax), assessments,
fees, customs duties, liens and charges in as much as they are levied in conclusion or implementation of the contract, including
customs restrictions and charges of similar nature in respect of articles imported or exported for the CTBTO’s official use.” In
principle the CTBTO is exempt from taxes. Since the arrangement under which such exemption is respected varies from country to
country, the selected bidder will be informed by the CTBTO whether tax exemption will occur at source or whether taxes paid by
the selected bidder will be reimbursed by the CTBTO upon submission of the original supporting documentation.
1. For Austrian companies:
The price quoted shall be net of taxes. All applicable taxes payable by the selected bidder at the conclusion or implementation
of the contract in respect of the goods/services shall be quoted separately or be separately identified on the bid together with
information on the nature of the tax and its method of calculation.
2. For European Union (EU) Companies [FOR PURCHASE FROM EU COUNTRIES]:
The price quoted shall be net of taxes. All applicable taxes payable by the selected bidder at the conclusion or implementation
of the contract in respect of the goods/services shall be quoted separately or separately identified on the bid together with
information on the nature of the tax and its method of calculation. Due to the VAT exemption applicable to the CTBTO, no
VAT will be charged to the CTBTO by the European Economic Community Suppliers under the contract (Ref. EU VAT
Council Directive 2006/112/EC, Article 151).
3. For Non-EU Companies (FOR PURCHASE FROM NON-EU OR NON-EUROPEAN COUNTRIES):
The price quoted shall be net of taxes. All applicable taxes payable by the selected bidder at the conclusion or implementation
of the contract in respect of the goods/services shall be quoted separately or be separately identified on the bid together with
information on the nature of the tax and its method of calculation. For deliveries to Vienna, Austria, and due to the tax
exemption at source, applicable to the CTBTO, no taxes shall be charged to the CTBTO under the contract.
13. Completeness and
correctness of the offer
The CTBTO reserves the right to verify all information furnished in the bid through a source of its choice. Any inaccurate
information so given may lead to the rejection of the offer.
14. Bidder’s conference The objective of a pre-bid conference is to achieve better value for money in the procurement process.
Information concerning the location, date and time of any pre-bid conference or site visits that will be conducted for the tender
must be included in the solicitation document. Mandatory or optional attendance, physically or electronically (e.g. via Skype),
must also be clearly stated in the documents. During a pre-bid conference, questions from potential vendors are addressed. The
minutes from the pre-bid conference must be prepared and distributed to all bidders who attended the conference. If attendance is
not mandatory, the minutes must also be posted online if open competition is being undertaken. A pre-bid conference is
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recommended for complex contracts such as contracts for works.
During the conference relevant points that bidders must understand concerning the Contracts for Works, such as the different roles
and milestones established in the contract; guarantees and insurances that must be provided; and processes for payments,
retentions, claims, and variations can be clarified. A better understanding of expectations and the required contract management
will lead to a better quality of bid and reduce misunderstandings that might delay project execution. Site visits afford prospective
bidders the opportunity to obtain a clearer and deeper understanding of the requirement. The Solicitation Documents shall state
clearly that attendance at a pre-bid conference or site visit shall be at the sole expense of the prospective bidder.
For more details refer to Section 6.7 Communication with vendors.
15. Bid opening Bids shall be opened in accordance with the bid opening requirements. (See Table 2 for thresholds and other instructions for
solicitation).
16. Bid/proposal security A bid security is an amount of money that may be calculated as a percentage of the budget estimate of a procurement requirement
or a percentage of a bidder’s bid price. It is commonly used when procuring high value complex goods, services or works. It can
also be considered for use in situations where there is an urgent need for the requirements; when there is a high risk of offer
withdrawal for cases such as contracts for works in which market conditions may change, leading to increasing prices for raw
material; and when the procurement process is envisaged to be a lengthy one.
A bid security serves as a protection for the CTBTO against bidders withdrawing their bids prior to the end of their bid validity
period, or for refusing to sign the contract. The bid security is intended to deter bidders from withdrawing their bids, because they
would otherwise forfeit the bid security amount to the CTBTO and it gives the CTBTO some assurance that the selected bidder
will sign the contract or otherwise forfeit their bid security. A bid security guarantee is commonly acceptable in the format of an
unconditional bank guarantee or an irrevocable letter of credit. The acceptable format must be indicated in the solicitation
document along with relevant templates. When used, the bid security shall be in the amount and form specified in the bidding
documents. Furthermore, the bid security shall remain valid for a period that provides sufficient time to the CTBTO in the event
the security has to be cashed, i.e. until the date of expected contract signature. A bid security shall be released to unsuccessful
bidders once the contract has been signed with the winning bidder.
Calculation of the value of a bid/proposal security must consider the costs of evaluating offers and retendering. For reference
purposes, the value of the bid/proposal security could range between 0.5% and 4% of the expected contract amount. However, the
bid/proposal security must always be stated as a specific lump sum rather than as a percentage of the bid amount in order to avoid
signalling the budget estimate. Securities represent a cost to the bidder and therefore it is essential that they are set at a level that
will not discourage participation in the tender process.
17. Evaluation of the offer a) In general the technical evaluation shall include the following criteria:
i. compliance of the items with the requirements (technical specifications, TOR or SOW);
ii. supplier’s qualifications;
iii. delivery schedule.
b) In general the financial offer shall be evaluated for (i) contractual compliance; and (ii) commercial acceptability.
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The evaluation method (least costly technically acceptable offer or cumulative analysis) which shall be undertaken shall also be
mentioned here. (See Section 8.4 Evaluation Methodology).
18. Correction of errors It shall be mentioned that the CTBTO will check the offer for any mathematical errors and if there is a discrepancy between the
unit price and the total price that is obtained by multiplying the unit price and quantity, the unit price shall prevail and the total
price shall be corrected.
19. Validity of the offer In order to allow sufficient time for evaluation of the offer, bidders shall be requested to confirm that their offer will be valid for 90
(ninety) days after the deadline of the submission of the offer to the CTBTO.
20. Partial bids/lots Information about whether or not partial offers (usually segregated in the solicitation document into lots) are accepted must be
included in the solicitation document.
If the requirements are divided into components or lots, it is imperative that the Solicitation Documents state that the CTBTO has
the right to award the contract to the supplier offering the best offer for all components or lots, or per component or lot (i.e. split
ordering).
When determining whether to split the contract, possible savings from purchasing items at a lower price must be considered
against the transaction cost to the CTBTO of placing several contracts as well as with supply chain, logistical and warranty issues
related to the contracts.
21. Performance security/bond A performance security/bond is a written guaranty from a third party guarantor (usually a bank or an insurance company)
submitted to a principal (buyer) by a contractor on winning the bid. A performance security/bond ensures payment of a sum (not
exceeding a stated maximum) of money in case the contractor fails in the full performance of the contract. Performance
securities/bonds protect the CTBTO against non-performance by the supplier.
Performance securities/bonds are recommended in the following instances:
High value of goods, works or services to be purchased;
New contractor unknown to the CTBTO;
Price of raw material is increasing and there is a risk that the contractor will not honour the contract;
Urgency of the request, e.g. goods have to be in the country or works to be constructed before the rainy season;
Previous unsatisfactory experience with selected supplier;
Large variety of products to be covered under the contract and there is a risk of failed delivery.
Performance securities/bonds are typically set at 10% of the value of the contract. However, this may vary, depending on the
nature, risk and magnitude of goods, services or the works, to be provided under the contract.
Some key factors to consider when choosing the right security for a transaction include:
The value of the security required to address the commercial concerns of the parties;
The duration that the security is required for;
Who can appropriately provide the security, taking into account the credit risk of the contracting party and its corporate
group;
The cost of obtaining security from financial institutions and other third parties; and
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The enforcement of a performance security, specifically whether the payment should be conditional and whether the
security should be claimable 'on demand'.
A performance security/bond is normally issued in the form of a bank guarantee. Other forms may be used, subject to review by
the Legal Services Section. The format of bank guarantee must be indicated in the solicitation document along with the relevant
template.
The timeframe within which the supplier shall deliver the performance security/bond upon signature of the contract shall also be
stated in the Solicitation Documents. Normally the contractor shall deliver the performance security/bond to the buyer within 14
days of countersignature of the contract. Refer to Section 11.8 for instruction on how to review and handle received bank
guarantees and securities.
22. Advance payment security It must be clearly stated in the Solicitation Documents that advance payments are only done in exceptional circumstances. In the
event advance payments will be required by the supplier, then the supplier must be prepared to provide an advance payment
guarantee to the CTBTO.
Please see Section 11.6 Advance payments for more details.
23. Negotiations of the offer Bidders shall be informed that the CTBTO reserves the right to request clarifications on the offer and to enter into negotiations
regarding technical or commercial aspects of the offer before awarding a contract.
24. Modification and
withdrawal of the offer
Bidders may modify or withdraw their offers after submission, provided that written notice of the modification or withdrawal is
received by the CTBTO by the closing date for the submission of the offer. The offer may not be modified subsequent to the
closing date.
25. The CTBTO’s right to reject
the offer
Bidders shall be informed that the CTBTO reserves the right to accept or reject the offer or to annul the procurement process at any
time prior to award without having to inform the affected party of the grounds thereto, thereby not incurring any liability to the
affected party.
26. Right to vary requirements
at the time of award
Bidders shall be informed that at the time of awarding the contract, the CTBTO reserves the right to vary the quantity of the items
(goods and/or services) by up to a maximum of 25% of the total offer, without any change in the unit price or other terms and
conditions.
27. Performance Bank
Guarantee
A Performance Bank Guarantee shall be provided by the bidder. The sample Performance Bank Guarantee Form shall be attached
to the Instructions for Preparation and Submission of offers. Where a Performance Bank Guarantee is required, the submission of
the said document, and the confirmation of its acceptance by the CTBTO, shall form part of the contract.
28. Performance Bank
Guarantee for advance payment
Bidders shall be informed that except when the interests of the CTBTO so require, it is the CTBTO’s preference not to make
advance payment(s) on contracts (i.e. payments without having received any goods and/or services). In the event that the bidder
requires an advance payment upon contract signature, and if such request is duly accepted by the CTBTO, and the said advanced
payment exceeds 20% of the total bid price, the CTBTO may require the bidder to submit a Performance Bank Guarantee for the
same amount as the advance payment.
29. Costs of preparation and Bidders shall bear all the costs associated with the preparation and submission of an offer and the CTBTO will not be responsible
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submission of the offer or liable for those costs, regardless of the outcome of the solicitation process.
30. Proprietary information All documentation and information contained in the Solicitation Documents are proprietary to the CTBTO and shall not be
duplicated, used or disclosed –in whole or in part – for any purpose other than to evaluate them and respond to the CTBTO's
request for submission of offers, or otherwise without prior written agreement of the CTBTO.
31. Evaluation criteria Evaluation criteria are developed and formulated to obtain the best value for money for a specific procurement case. The
evaluation criteria shall be included in the Solicitation Documents.
Solicitation Documents must also state the evaluation method which will be used for the particular case (i.e. RFQ: lowest priced,
technically acceptable offer; ITB: lowest priced technically acceptable offer; or RFP: lowest priced technically acceptable offer or
cumulative analysis).
The evaluation must be undertaken in accordance with the criteria specified.
In order to ensure fairness and transparency, it is extremely important that all criteria to be considered in the evaluation are clearly
defined in the Solicitation Documents and not altered after the Solicitation Documents have been issued. Should there be the need
to make changes to Solicitation Documents during the bidding process and before the bidding deadline, they shall be made in
accordance with the instructions provided in the Solicitation Documents.
As applicable, suppliers shall be informed about the following:
a) Eligibility criteria;
b) Technical evaluation criteria;
c) Financial evaluation criteria;
d) Contractual compliance;
e) Commercial acceptability.
32. Eligibility criteria Upon receipt of an offer, a preliminary screening is performed based on the following criteria:
Timeframe for receipt of offer: the offer has been received within the stipulated timeframe specified in the solicitation
document;
Compliance with requested method of submission: adherence to the required method of submission (for example
compliance with the two envelope system);
Eligible origin: the goods or services offered are of eligible origin;
Ineligibility lists: the vendor is not included in any of the identified ineligibility lists;
Other issues of relevance: examination of the technical proposal to see if there are any discrepancies, such as the inclusion of price
information in the technical proposal, etc.
33. Technical criteria The technical evaluation criteria is developed taking into consideration both the technical aspects of the requirements
(specifications, TOR or SOW) and the qualifications of the supplier. For RFQs and ITBs, technical and qualification criteria are
developed for evaluation on a pass/fail basis regarding the compliance to the specifications and other requirements while for RFPs
technical and qualification criteria are developed for evaluation on a pass/fail basis or by score based criteria (cumulative analysis
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method).
a) Technical aspects The technical criteria are developed with a focus on the technical aspects of the requirements (specifications, TOR or SOW). This
can be lengthy or brief depending on the nature and complexity of the procurement to be undertaken.
b) Qualification aspects The extent of the supplier’s qualification criteria must be reasonable and must consider the value of the contract and the complexity
of the solicitation. Depending on the solicitation, the following aspects shall/may be taken into consideration:
i. Managerial capability such as the company’s managerial structure and quality assurance systems in place;
ii. Legal and regulatory requirements of the company such as registration certificates, licenses, standards, etc.;
iii. Technical capability and experience:
Qualification and experience of proposed personnel;
Eligibility of proposed personnel.
Use of former CTBTO employees in the preparation of bids: a bidder must not, in the absence of prior written
approval from the CTBTO, permit a person to contribute to, or participate in, any process relating to the preparation of a
bid or the procurement process if the person:
At any time during the 12 months immediately preceding the date of issue of the solicitation was an official,
agent, servant or employee of, or otherwise engaged by the CTBTO;
At any time during the 24 months immediately preceding the date of issue of the solicitation was an employee of
the CTBTO personally engaged, directly or indirectly, in the definition of the requirements, project or activity to
which the solicitation relates.
iv. Available capacity and equipment to undertake the assignment;
v. Institutional and workload capability such as capacity and availability of production site, staff, etc.;
vi. Availability of after sales services or agents in the country of delivery;
vii. Successful past performance experience;
viii. Previous experience in a similar field and with the same or similar type of requirements;
ix. As applicable, experience in the country/region;
x. Demonstrated organizational commitment to sustainability;
xi. Financial capability, such as annual sales turnover of a minimum amount during one/various of the last years and
minimum financial profitability and liquidity ratios.
c) Pass/fail criteria When an evaluation factor requires an attribute that is not conducive to varying degrees of superiority or inferiority, a pass/fail
factor is used. When a factor merely requires an acceptance or rejection, it is termed pass/fail (or compliant/non-compliant).
d) Weighted criteria Variable factors (weighted scoring) are used to evaluate the quality or extent to which offers meet the requirement. When a
competitive solicitation seeks the best value from submitted offers, it is appropriate to evaluate the degree to which each offered
product or service contains preferable characteristics (applicable for cumulative analysis).
The higher the degree, the higher the score will be for that bidder. Variable factors may be expressed in terms of numerical ratings,
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such as a scale of 1 through 5, with 5 being the highest rating. Weights should be determined by importance for the award. When
weighted criteria are used for technical evaluations, the weighting ratio between the technical and financial criteria should be
disclosed in the Solicitation Documents in order for the suppliers to understand on which basis their offer will be judged.
e) Interviews/oral
presentations
If required, technical points for interviews/oral presentations for all bidders or those that have achieved a minimum number of
points upon evaluation of the documentation submitted shall also be included. It should also be stated in the solicitation document
where and when such presentations will take place.
f) Lots/split orders Where the solicitation document states that evaluation will be done by lot (see 6.5.2 Instructions to Bidders) the solicitation
document must address the issue of how the CTBTO will award lots. The best practice is to state in the solicitation document that
where a bidder does not meet all qualification criteria to perform/supply all lots, the CTBTO will award each of the lots in a
manner which achieves the best overall value for money combination for the CTBTO.
34. Contractual and financial
criteria
The Solicitation Documents shall state which price factors will be used for evaluation. Various factors such as freight cost,
operational cost, incidental or start-up costs, as well as life cycle costs could be taken into consideration.
For services and works a template for breakdown of cost should be provided e.g. in bill of quantities for works. In all cases, the
required breakdown as well as evaluation criteria must be clearly stated in the Solicitation Documents. Only the price factors stated
in the Solicitation Documents will be considered in the financial evaluation.
a) Life cycle costing As applicable, life cycle costing of a product should also be taken into consideration. These include costs such as initial product
cost; freight cost; operational cost (e.g. electricity, fuel, consumables); installation and training cost; maintenance cost (e.g. after
sales services, repair, spare parts); and disposal cost or residual value at end of use.
Life cycle costing should be considered when the costs of operation and/or maintenance over the specified life of the goods or
works are estimated to be considerable in comparison with the initial cost and may vary among different offers received. Selection
of the lowest priced offer based on life cycle costing analysis can lead to win-win situations when cost savings go hand in hand
with better overall sustainability. When using life cycle costing, the solicitation document shall specify:
i. Number of years for the life cycle cost consideration, i.e. the number of years that the product or service is expected to be
used;
ii. The discount rate, in percent, to be used to calculate the net present value of future costs over the life cycle period
specified in (i) above, if applicable;
iii. The methodology to be used for calculating the operation, maintenance and residual value costs, including the information
to be provided by bidders in their offers.
b) Taxes Due to the tax status of the CTBTO, taxes and duties are not taken into consideration during the financial evaluation. This means
that taxes are excluded from the price comparison.
c) Freight When including freight terms in the specifications, they must be in line with the most current Incoterms (currently Incoterms
2010). For more information on Incoterms please refer to Chapter 12 Logistics.
The relevant incoterm must be stated in the solicitation document.
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d) Right to request
clarification
It can be stated that the CTBTO reserves the right to request clarifications from bidders during the evaluation stage. This could be
important in a number of situations for example where individual prices within bids are abnormally high or abnormally low.
35. Evaluation criteria for
subcontractors
A subcontractor is a party that carries out work for a contractor as part of a larger project. In the event the contractor requires the
services of one or more subcontractors, the contractor shall provide the names, legal status, address and qualifications of
subcontractor(s), and the scope of the subcontracted services. The bidder shall also provide a statement that his/her organization
shall be fully responsible for the performance of subcontractors. All subcontractors shall be legally established in one of the CTBT
States Signatories/Member States. It shall be a requirement for the successful bidder to receive approval from the CTBTO, should
subcontractors change during the lifetime of the project.
36. Schedule of requirements The schedule of requirements shall cover, at a minimum, a description of the goods and services to be supplied and the delivery
schedule.
The objective of the schedule of requirements is to provide sufficient information to enable bidders to prepare their bids efficiently
and accurately, in particular, the price schedule. In addition, the schedule of requirements, together with the price schedule, should
serve as a basis in the event of quantity variation at the time of the award of the contract. The date or period for delivery should be
carefully specified, taking into account (a) the implications of delivery terms stipulated in the Instructions to Bidders pursuant to
the Incoterms rules and (b) the date from which the Purchaser's delivery obligations start (i.e., notice of award or contract
signature).
37. Returnable bidding
forms/schedules
The specific forms/schedules to be filled out by vendors and included in their offer shall be included in the Solicitation Documents.
38. Contractual information A copy of the GCC applicable to the contract shall be included with the Solicitation Documents.
The Solicitation Documents can also include a link to the CTBTO’s website where the GCC document is available.
The GCC clarify the conditions that the suppliers are expected to accept when signing a contract with the CTBTO. A copy of the
relevant model contract must always be included with the Solicitation Documents. The Solicitation Documents shall state that
bidders must submit any reservations to the standard contract terms, including but not limited to the GCC, together with their bids,
and that failure to submit such reservations will be deemed by the CTBTO as acceptance of all said contract terms. Bidders are
expected to accept the GCC. Only under very exceptional circumstances will reservations be accepted. The Legal Services Section
shall be consulted in this regard.
For the purchase of goods, a copy of the relevant packing and shipping instructions may be included with the Solicitation
Documents where relevant. The packing and shipping instructions are important to the supplier when bidding, as they include
instructions about packaging, marking and numbering of the shipment, notification of shipment, and documentation required for
customs clearance and payment purposes.
Information concerning whether a contract will be signed based on fixed price/lump sum or cost reimbursement, must also be
included.
If applicable, the forms for performance security guarantee and/or advanced payment guarantee shall also be included.
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6.6 Invitation of vendors
There are a number of steps to be taken before the distribution of the Solicitation Documents.
These include the following:
6.6.1 Approval of Solicitation Documents
The Solicitation Documents shall be approved by the relevant Procuring Entity in accordance
with the Delegation of Authority. (Please contact the Procurement Section for access to this
document.)
6.6.2 Distribution of Solicitation Documents
For sole source procurement, Solicitation Documents shall be sent directly to the sole supplier.
For competitive bidding up to $25 000, Solicitation Documents may be sent directly to the
identified suppliers (recommended list of suppliers).
During open competitive bidding for values above $25 000, the Solicitation Documents shall
be published on the UNGM and CTBTO public web site. Simultaneously the Solicitation
Documents shall also be sent to all potential suppliers identified during market research (by
mail or email). The documents must also be made available to all interested suppliers upon
request (see Table 2 Thresholds and Other Instructions for Solicitation).
A signed copy of the Solicitation Documents shall be kept on file by the CTBTO together with
documentation on where and how long it was posted (e.g. printouts of screenshots from the
CTBTO’s web site and UNGM posting), and to whom it was issued (e.g. copies of emails or
courier receipts) to facilitate an audit of the process.
6.6.3 Amendments to Solicitation Documents
The CTBTO reserves the right to amend the Solicitation Documents at any time prior to the
deadline for submission of offers at the CTBTO’s own initiative or following a request for
clarification by a supplier.
The amendment must be made within a reasonable time before the deadline for submission of
offers in order for suppliers to address changes in their offers. In certain cases, amendments
will justify an extension of the submission deadline. Amendments to Solicitation Documents
must be approved by the relevant Procuring Entity.
In order to ensure that all suppliers have the same details, amendments of Solicitation
Documents must be sent to all invited suppliers and as applicable be uploaded to the CTBTO
and UNGM websites. If there are substantial changes to the requirements, retendering may be
necessary.
6.6.4 Cancellation of the solicitation process
The CTBTO reserves the right to cancel a solicitation at any time for any reason during the
solicitation and evaluation process and prior to contract award. The relevant Procuring Entity
must approve all cancellations. Conditions that may give rise to a cancellation include, but are
not limited to the following:
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a) Due to unforeseen circumstances, the goods/services/works are no longer required;
b) The requirements need substantial revision;
c) There is a substantial variance between the lowest bid and the estimated/budgeted cost.
When a tender has been cancelled, a cancellation notice must be sent to all bidders and bids
will be made available for collection by the respective bidder, or the CTBTO shall reserve the
right to discard such bids unopened without further notice to the bidders. The CTBTO shall not
bear any costs associated with the return of the bids to the bidders. The Procuring Entity must
make sure that all bid securities are returned to the bidders.
6.6.5 Solicitation of offers from a sole source
When soliciting an offer from a sole source, the contract must still be awarded to a vendor
whose offer substantially conforms to the requirements at a reasonable price.
The following procurement actions shall still be required:
a) Writing the requirements definition;
b) Soliciting an offer from the selected vendor based on the requirements definition and
the CTBTO’s GCC;
c) Evaluating the offer, carrying out negotiations if applicable; and
d) Awarding the contract through the applicable award process.
6.6.6 Solicitation of offers against LTAs or Framework Contracts
Solicitation of offers against an LTA is done in accordance with the established mechanism of
the LTA.
6.7 Communication with vendors
All communication regarding the contents of the Solicitation Documents must be handled
through written correspondence and made available to all potential bidders. All requests for
clarifications from bidders shall be submitted in writing to the CTBTO. Response to requests
for clarifications shall be in writing and shall be sent to all suppliers at the same time, without
referencing the source of the queries. For technically complex cases, in addition to providing
responses to queries, a pre-bid conference or a site inspection may also be undertaken.
When conducting a pre-bid conference or site inspection, it is important to bear the following
in mind:
(a) The Solicitation Documents should state clearly whether or not attendance to the pre-
bid conference and/or site inspection is mandatory.
(b) The time for the pre-bid conference and/or site inspection must be stated in the
Solicitation Document. Suppliers must be allowed sufficient time to plan attendance of
the conference and/or site inspection.
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(c) The representatives who choose to be present during a pre-bid conference or site
inspection shall provide reasonable evidence that they represent the potential bidder;
e.g. business card, letter of authorization, etc.
(d) A list of the bidders/representatives attending the conference and/or site inspection shall
be prepared and shall be signed by all attendees indicating the date and time. All
participants, if attending in person, must sign the list and indicate the date and time.
(e) All personnel in attendance shall be introduced.
(f) During the conference and/or site inspection, the CTBTO can take the opportunity to
further remind the potential bidders of important issues concerning bid submission such
as:
i. Timely submission of bids.
ii. Ensuring that mandatory requirements are fulfilled.
iii. The provision of bid contact details, e.g. name, email address and phone number, of
the persons to be contacted concerning their offer.
iv. Submission of requests for clarifications in a timely manner.
v. Monitoring responses to requests for clarifications to ensure that submissions are
made taking into consideration the clarifications provided.
vi. A list of common errors made by bidders can also be shared with bidders at the
conference and/or site inspection.
vii. For complex contracts such as works, it is recommended to prepare a
pre-bid conference with the purpose of clarifying to bidders the most relevant
points that they have to understand about the CTBTO’s contracts for works, such as
the different roles and milestones established in the contract, securities and
insurances that must be provided, and the process for payments, retentions, claims
and variations.
viii. Participants should also be reminded that bids from ineligible suppliers (see
Section 3.3 Vendor Ineligibility) will not be considered.
ix. Written queries received from suppliers prior to the conference and/or site
inspection can also be clarified /answered during the conference and/or site
inspection.
x. Within a reasonable time after the conference or inspection, the CTBTO shall send,
to all suppliers, whether present at the conference/site inspection or not, a full set of
the approved minutes recording all queries and formal replies and if applicable, the
information shall also be posted on the CTBTO’s and UNGM web sites. The
minutes shall prevail over any oral responses provided during the conference or site
inspection. Also, in case of discrepancy between the provisions of the solicitation
document and the minutes of the pre-bid conference or site inspection, the latter
shall prevail over the former. Therefore, the same Procuring Entity approving the
solicitation document must approve the minutes.
xi. If the clarifications given during the meeting alter the requirements, amendment of
the submission deadline should be considered, and a formal amendment to the
tender document must be issued reflecting the change.
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6.8 Exceptions to competitive tendering or formal methods of solicitation
Financial Rule 11.5.06 allows for invoking exceptions to competitive procedures for a number
of reasons such as the non-existence of a competitive marketplace, exigency, etc. In such cases,
Solicitation Documents are issued only to the sole source supplier.
a) Sole source procurement refers to the procedures for the negotiation, award and
conclusion of contracts for goods, construction or services that fall under Financial Rule
11.5.06, under which contracts may be awarded to a contractor/supplier from a State
Signatory without competitive bidding.
b) As enumerated in Financial Rule 11.5.06, contracts may be awarded without calling for
competitive procedures under any of the following conditions:
i. There is no competitive marketplace for the requirement, such as where a monopoly
exists, where suppliers or prices are fixed by legislation or government designation or
regulation, or where the requirement can only be practicably met by a proprietary
product or service.
Clarification/explanation, justification required
Prices or rates are fixed by legislation or government bodies, e.g. in cases of state
monopoly or tariffs. In order to justify fixed prices or rates, the name of the
regulatory body or law that controls rates or established prices must be included in
each request for award and, if available, a current price/rate schedule be provided.
Proprietary product or service refers to situations where only one source can
reasonably meet the needs of the CTBTO, in situations where:
— Proprietary items subject to legal restrictions (i.e. patents and copyrights) are to
be procured;
— Matters involving national defence or national security rendering single- source
procurement the most appropriate method of procurement;
— The goods/services/works are available from a particular supplier, or a particular
supplier has exclusive rights in respect of the goods/services/works and no
reasonable alternative or substitute exists.
An explanation of why other potential sources do not exist and reasonableness of price
(e.g. comparison with previous purchase prices) shall be provided.
ii. The prices or rates are fixed, or other restrictions, such as location of sites within an
environmentally protected area, in a national defense protected compound or reserve or
in an area to which access is otherwise controlled or regulated, exist pursuant to
national legislation or laid down by regulatory bodies. In such cases, evidence to that
effect shall be provided by the State Signatory concerned.
Clarification/explanation, justification required
In some instances national legislation or regulatory bodies can fix prices and can also
determine eligibility for entrance into protected areas.
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Justification required: the State Signatory shall provide evidence verifying the
restrictions.
iii. Goods and services are available only from a particular supplier for reasons of
standardization and because of the need for compatibility with existing goods or
services.
Clarification/explanation; justification required
Standardization is applicable when identical goods, services or works have recently
been purchased from a supplier, and it is determined that there is a need for
compatibility with existing goods, services or works. In determining the appropriateness
of standardization, the following factors must be taken into account and justified:
The size of the proposed additional procurement in relation to the original
procurement;
The value-added in undertaking standardization, the reasonableness of the price;
and
The unsuitability of alternatives to the goods, services or works in question.
Compatibility means the goods, services or works to be purchased is determined by a
previous purchase.
Examples include the following:
For goods: a piece of equipment was previously purchased and components that can
only be obtained from the manufacturer must now be replaced. It should be noted that
branding is not necessarily a justification for exceptions. A competitive process should
be undertaken if multiple sources of supply exist.
For services/works: complex services/works were purchased from a vendor and only
the vendor who performed the initial services/works can realistically provide the
required additional services.
Justification required: explanation of the previous determination or reasons for
requiring standardization and reasonableness of prices, e.g. comparison with previous
purchase prices and comparison with prices of equipment from other suppliers
equivalent in performance.
iv. The proposed contract involves an IMS station located on the premises of an existing
site which has been under the supervision and operating control of a local institution.
Clarification/explanation, justification required
In some instances the local institution operates and controls the station and determines
who has access to provide goods, services or works at the station.
Justification required: evidence showing that the particular IMS station is located on
the premises of an existing site which has been under the supervision and operating
control of a local institution.
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v. In special circumstances, when, as determined by the Director of Administration, the
exigencies of the CTBTO do not permit the delay attendant upon calling for tenders or
proposals.
Clarification/explanation; justification required
The exigencies of service must be beyond the control of the CTBTO. For example,
emergency situations or force majeure, or other compelling circumstances which are
not due to the lack of planning or slow administrative processes within the CTBTO.
Justification required: an explanation of how exceptions to formal methods of
solicitation will meet the schedule and the adverse impact that the CTBTO’s operation
might suffer if the delivery schedule were not thus modified, confirmation of
reasonableness of price through comparing prices with previous purchase prices etc.,
justification for selecting this particular supplier as opposed to any other.
Exigencies stemming from a lack of planning or a slow administrative process should
not be valid grounds to invoke this exception. However, in exceptional circumstances,
where the best interest of the CTBTO is at risk, the Director of Administration may
nonetheless approve the request.
vi. The Director of Administration, in consultation with technical experts on the
Secretariat staff, determines that competitive bidding or calling for proposals will not
give satisfactory technical results, in which case appropriate reasons shall be recorded
in writing.
Clarification/explanation, justification required
In situations where supply is limited, supplies can be immediately procured at
prices not likely to be maintained.
Extension of scope of works, services or goods requested in an original contract,
made through an amendment in order to ensure continuity. Justification for
continuity of work required, i.e. why a new solicitation would not give satisfactory
results, and confirmation of reasonableness of prices, e.g. comparison with
previous bids, etc.
vii. The proposed procurement contract is the result of cooperation with other
organizations of the United Nations System (including piggy-backing on another
organization’s contract or using the results of another organization’s procurement
process to establish a contract for the Secretariat).
Clarification/explanation, justification required The Executive Secretary may, in appropriate cases, authorize cooperation with a
United Nations agency in respect of procurement activities. Reliance on another
United Nations agency’s procurement decision presupposes that the United Nations
agency has awarded a contract to an entity, and the CTBTO chooses to rely on that
decision to award its own contract.
When the CTBTO is relying on another United Nations agency’s procurement
decision in order to issue a contract, the applicable internal contract clearance process
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must be adhered to before issuance of the contract to the supplier. See Chapter 9
Procurement Process review).
viii. When offers for identical products and services have been obtained competitively
within a reasonable period, usually one year, and the prices and conditions offered
remain competitive.
Clarification/explanation; justification required The reasonable period in relation to the use of a previous competitive method of
solicitation shall be limited to one year after the contract signature date, unless
otherwise justified considering the specific market.
For goods where the price fluctuates rapidly (raw material, petroleum products, some
IT equipment, etc.), the competitiveness of the price must always be properly justified.
Justification required: detailed summary of the use of a previous formal method of
solicitation and its outcome; reasonableness of price and prevalent market rates for the
product concerned.
ix. When a formal solicitation has not produced satisfactory results within a reasonable
period.
Clarification/explanation; justification required The ‘reasonable period’ refers to the time elapsed since the closing date for
submissions of the failed competitive process.
The length of the ‘reasonable period’ for the applicability of this exception will vary
depending on the nature and type of goods, services or works, the market conditions,
the likelihood of attracting new suppliers if a re-tender was to be conducted and any
other factor influencing the decision.
In relying on this clause, the Procuring Entity must ensure that market research was
undertaken and be fully satisfied that a re-tender will not yield satisfactory results.
Justification required: detailed summary of the competitive process and its outcome,
reasonableness of price and prevalent market rates for the product concerned.
x. When the proposed procurement contract is for the purchase or lease of real property
and market conditions do not allow for effective competition.
i. Clarification/explanation; justification required Selection of location is based on security considerations or is based on proximity
issues.
Justification required: reasonableness of price (e.g. contacting companies
specialized in commercial real estate services); clearance from UNDSS, etc.; evidence
of market research into available premises; and justification for choosing these
premises.
c) Exceptions to competitive procedures referred to in Financial Rule 11.5.06(a), (c), (e), (f),
(g), (h), (i) and (j) for aggregate values greater than or equal to $150 000, excluding VAT,
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must be submitted to the Committee on Contracts for review and reported through it to
the Executive Secretary. The Committee on Contracts requires a sole source justification,
pursuant to Financial Rule 11.5.06 (a), (c), (e), (f), (g), (h), (i) and (j), which shall be set
out in a memorandum signed by the Allotment Manager attached to the requisition and
shall be submitted to the Committee on Contracts by the Chief of the Procurement
Section.
d) For exceptions listed in Financial Rule 11.5.06 (a), (c), (e), (f), (g), (h), (i) and (j) for
contracts with an estimated value between $10 000 and $150 000, excluding VAT, the
Substantive Officer responsible for the requisition shall submit to the Chief of the
Procurement Section a sole source justification as an attachment to the requisition. If
deemed necessary by the Chief of Procurement Section, after consultation with the
Substantive Section, he/she may submit the sole source justification to the Committee on
Contracts for its recommendation.
e) In cases of exceptions to competitive procedures referred to in Financial Rule 11.5.06 (b)
and (d), except for procurement requests with an aggregate value of less than $10 000,
excluding VAT, the Substantive Section shall obtain from the State Signatory concerned
evidence that the relevant subparagraphs (b) and (d) of Financial Rule 11.5.06 apply. In
such cases, the Substantive Section shall briefly record the reasons for invoking Financial
Rule 11.5.06 (b) or (d) and shall submit a copy of the evidence and the reasons referred to
in this Procurement Manual through the Chief of the Procurement Section to the
Chairperson of the Committee on Contracts, who shall register it for the record.
f) As provided under Financial Rule 11.5.01 only Procuring Entities are authorized to enter
into contracts. This Rule shall also apply to sole source procurement.
g) All exceptions above $150 000 shall be fully justified and shall be examined by the
Committee on Contracts for the purpose of making recommendations to the Executive
Secretary.
h) The Executive Secretary shall report to the CTBTO all contracts over $150 000 which
were awarded after one of the exceptions listed in Financial Rule 11.5.06 had been
invoked.
i) Designations of a company or an institution for sole sourcing by a State Signatory shall
be submitted in writing in order to be considered by the Secretariat. The Secretariat shall
report annually on such designations and the sole source contracts in the Programme and
Budget Performance Report.
j) In order to enhance the efficiency of interaction between the Substantive Section, the
Certifying Officer, the Committee on Contracts and the Procurement Section, and in
order to reduce processing time and ensure strict compliance with the CTBTO’s FRR on
procurement and Administrative Directive No. 27, the following steps and guidelines
shall be followed when sole source procurement is requested:
i. Preparation and adoption of the annual programme of work as referred to in
Section 3 of Administrative Directive No. 27, the execution of Facility Agreements or
formal Exchanges of Letters with the competent authorities of the State Signatory
concerned for site surveys, provision of verification equipment, site preparation, station
upgrading or installation, testing, or operation and maintenance of an IMS station.
Preparation by the Substantive Section and submission to the Chief of the Procurement
Section of a requisition, accompanied by the TOR or technical specifications, and sole
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source justification, signed by the Allotment Manager, setting out ground(s) for making
an exception to the competitive bidding procedures, pursuant to Financial Rule 11.5.06.
The sole source justification shall be sufficiently clear and detailed to avoid the need for
the Chief of the Procurement Section or the Committee on Contracts to seek additional
information when considering the case.
ii. In the case of exceptions referred to in Financial Rule 11.5.06(b) and (d), the sole
source justification can be brief. However, it must be supported by evidence in
accordance with Section 6.8 (e) of this Procurement Manual. The requisition shall also
state a preliminary estimate of the amount of funds required. The preliminary estimate
of funds required should be based on comparisons with previous contracts for similar
requirements and should not be based on any cost proposal prepared by the prospective
sole source contractor or on any other express or implied contractual or financial
commitment or understanding.
iii. The exception referred to in Financial Rule 11.5.06(d), which states that the proposed
contract involves an IMS station located on the premises of an existing site which has
been under the supervision and operating control of a local institution, applies to
proposed contracts for site surveys, verification equipment, station upgrading or
installation, testing, or operation and maintenance of IMS stations. In such cases, the
terms of reference or technical specifications shall be prepared in close coordination
with the competent technical government agency or with the management of the
concerned IMS station, including detailed discussions and frequent contact between the
IMS Division and the management of the technical government agency or IMS station,
with the objective of collecting information that is needed in order for the technical
section of the IMS Division to formulate the terms of reference and technical
specifications for the work to be performed or the equipment to be provided by the sole
source contractor/supplier under the future contract. At this stage, a financial or
contractual commitment may not be made to the sole source contractor/supplier and
discussions should focus on technical aspects.
iv. To facilitate the preparation of the TOR, the Procurement Section may provide in
advance one or more model contracts and requests for proposal to the staff of technical
sections of the IMS Division for information purposes. The samples are intended to
serve as briefing material and checklists to support IMS staff in gathering the data and
information they need to prepare the TOR in consultation with the management of IMS
stations. Such samples may not be used for making commitments.
v. For non-standard site survey contracts, for equipment purchase contracts and for
construction/installation/upgrading contracts, the Procurement Section may also provide
samples of contracts and/or requests for proposal in advance, although such texts will
differ from case to case. Such samples may not be used for making commitments.
vi. The assigned Procuring Entity shall review the requisition, the sole source justification
and the TOR or technical specifications for completeness and consistency as well as for
conformity with the Financial Rules and this Procurement Manual. As necessary,
consultations shall be held between the Procurement Section and the Substantive
Section in order to complete or modify the requisition. When the requisition meets all
requirements, it shall be approved by the relevant Procuring Entity and assigned for
further processing.
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vii. Upon approval of the requisition and of the related TOR or technical specifications and
sole source justification, the Procuring Entity (in accordance with the delegated
authority granted in writing by the Executive Secretary as provided for in Financial
Rule 11.5.01 and as described in Section 6.6.5 of this Procurement Manual) shall
prepare a request for a formal, comprehensive, technical and financial proposal from the
sole source supplier, for approval by the Chief of the Procurement Section. The request
normally shall consist of:
Cover letter from the Chief of the Procurement Section containing the RFP and
instructions for the preparation of the proposal, setting out contractual and
procedural points concerning the proposal format, cost breakdown, proposed
payment conditions, and other relevant information. The instructions shall also
include, if applicable, a request for information on the applicable exemptions from
customs duties, taxes or import restrictions that may be available to the recipient
institution or to the CTBTO and information on the procedures for enjoying such
benefits.
Model of the intended contract, including the GCC or the General Conditions for
Goods as applicable.
TOR or technical specifications.
viii. The TOR or technical specifications shall be prepared by the Substantive Section and
reviewed by the assigned Procuring Entity to ensure that the duties and responsibilities
of the parties to the future contract and the scope of work to be performed are clearly
defined, as described in Section 4.2 of this Procurement Manual. If necessary, the
terms of reference or technical specifications shall be amended by the Substantive
Section. The final version of the terms of reference and relevant clauses in the model
contract shall be reviewed and accepted as final by the Substantive Section.
k) For cases above $150 000, the Committee on Contracts shall examine the sole source
justification submitted by the Substantive Section and recommend to the Executive
Secretary to approve, defer or reject award of the proposed contract to the sole source
supplier. The Executive Secretary will accept, defer or decline the recommendation.
l) For cases between $10 000 and $150 000, when the Chief of the Procurement Section
determines that the sole source justification may not be sufficient to apply the exceptions
referred to in Financial Rule 11.5.06, he/she may consult with the Substantive Section
and submit the case to the Committee on Contracts for its recommendation.
6.9 Urgent Unscheduled maintenance
Urgent unscheduled maintenance is undertaken to ensure that stations remain operational. For
further information see Section 11.3.1 (iv).
6.10 Tendering using email
Where provided for in the Solicitation Documents, bidders may submit their offers by email.
For further instructions see Table 2: Thresholds and Other Instructions for Solicitation).
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Chapter 6 Resources
The CTBTO’s
Policies
The CTBTO’s Financial Regulations And Rules
Delegation of Procurement Authority (Please contact the Procurement
Section for access to this document.)
Guidelines Administrative Directive No. 27
Miscellaneous Po (Low Value Purchases) Guidelines
(Please contact the Procurement Section for access to this document.)
Guidelines For Use of Bid Operator
(See Annex IV of this document)
Guidelines For Advance Payments (See Annex V of this document) Section
Templates Request For Expression Of Interest (REOI) Template
(Please contact the Procurement Section for access to this document.)
RFQ Goods/Services
(Please contact the Procurement Section for access to this document.)
ITB Goods/Services
(Please contact the Procurement Section for access to this document.)
RFP Services/Goods
(Please contact the Procurement Section for access to this document.)
Recommended List Of Suppliers
(Please contact the Procurement Section for access to this document.)
Vendor Profile Form
(Please contact the Procurement Section for access to this document.)
List Of CTBT States Signatories/Member States of the CTBTO
Statement Of Confirmation
(Please contact the Procurement Section for access to this document.)
Bid Security (Bank Guarantee)
(Please contact the Procurement Section for access to this document.)
Advanced Payment Guarantee
(Please contact the Procurement Section for access to this document.)
Performance Bank Guarantee
(Please contact the Procurement Section for access to this document.)
Model Contract Equipment Support Services
(Please contact the Procurement Section for access to this document.)
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Model Contract For Call-Off (Not For ESC)
(Please contact the Procurement Section for access to this document.)
Model Contract For Minor Services
(Please contact the Procurement Section for access to this document.)
Model Contract-Fixed-Frd-WO
(Please contact the Procurement Section for access to this document.)
Model Contract-Work Order For Minor Services
(Please contact the Procurement Section for access to this document.)
Model Contract For Installation
(Please contact the Procurement Section for access to this document.)
Model Contract For T&E PCA
(Please contact the Procurement Section for access to this document.)
Sample Contract Clearance Form
(Please contact the Procurement Section for access to this document.)
Draft Contract Amendment (General)
(Please contact the Procurement Section for access to this document.)
CTBTO’s General Conditions Of Contract
(Please contact the Procurement Section for access to this document.)
CTBTO’s General Conditions For Goods
(Please contact the Procurement Section for access to this document.)
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CHAPTER 7: MANAGEMENT OF SUBMISSIONS
7.1 Receipt and safeguarding of submissions
Offers submitted by suppliers shall be in accordance with the requirements stipulated in the
Solicitation Documents.
In general submissions can be received by mail, email or by hand delivery. The Solicitation
Documents shall state the acceptable method(s) of transmittal of Submissions.
Sealed competitive bids and proposals shall be date stamped upon receipt and safeguarded until
they have been opened. Sealed competitive bids and proposals shall not be shared with the
evaluation team until the deadline for submission has passed and bid opening has taken place.
Unsealed bids, proposals and quotations shall be officially received by the Chief of the
Procurement Section and shall be date stamped upon receipt and safeguarded until the
submission deadline. Unsealed bids, proposals and quotations shall not be shared with the
evaluation team until the deadline for submission has passed.
7.2 Modification and withdrawal of submissions
7.2.1 Modification of submissions
Suppliers shall not be permitted to alter their submissions after the deadline for receipt of
submissions. All requests for modification shall be in writing and shall be submitted in
accordance with the same submission requirements applicable to the original offer.
7.2.2 Withdrawal of submissions
a) A bidder may withdraw its submission prior to the submission closing date and time.
Such withdrawal notice shall be given to the CTBTO in writing. Upon receipt of the
withdrawal notice in writing, the CTBTO shall immediately separate the submission
from the other submissions received to ensure that it is not accidentally opened during
submission opening or sent for evaluation. Unless instructed otherwise, the CTBTO shall
destroy the said submission and notify the bidder thereof.
For sealed submissions, if requested in the withdrawal notice, the submission may also be
returned unopened to the bidder. The bidder shall bear all costs pertaining to the return of
the submission.
b) Requests to withdraw a submission after the submission closing date and time shall not
be honoured, unless the supplier is able to justify the withdrawal of its submission. Such
justification shall be plausible, for example, by the lack of capacity to undertake the
CTBTO’s assignment due to selection for other assignments in the same period or other
unforeseen capacity issues. The Chief of Procurement reserves the right to make the
decision concerning all requests for withdrawal of submissions.
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7.3 Late and unsolicited submissions
7.3.1 Late offers
A competitive quotation, bid or proposal received after the deadline for submission shall not be
accepted. In case of a late competitive bid, proposal or quotation, the bidder who submitted it
shall be notified of the late submission, and the late bid, proposal or quotation shall be retained
for six months and thereafter destroyed, unless the proposal is requested by the bidder to be
returned or is required as evidence by the Procurement Section. The bidder shall bear all
expenses incurred for return of the submission.
Exceptionally, the Chief of Procurement may, at his or her own discretion, accept a late
submission if he or she determines that the submission was sent in ample time prior to the
tender closure and the delay in delivery could not be reasonably foreseen by the bidder, or was
due to force majeure, and the acceptance does not create the appearance of an actual unfair
advantage for any of the participating competitors. The Chief of Procurement shall document
in writing such determination together with the decision to accept or reject the late submission.
7.3.2 Offers
In competitive procedures where the requirement was not advertised widely but only sent to a
list of selected suppliers, all offers received from bidders (whether or not they were invited by
the CTBTO) shall be accepted, as long as the supplier complies with all the requirements of the
Solicitation Documents (i.e. the deadline for submission, the mode of submission, and all other
requirements).
7.4 Opening and recording of submissions
The opening of submissions shall be handled as set forth in Sections 7.4.2, 7.4.3 and 7.4.4
below and in accordance with the guidelines provided for in Table 2 for thresholds and other
instructions for solicitation.
The opening of submissions shall be undertaken as soon as possible after the closing date. If
during the solicitation period the same bidder submits several submissions, only the last one
received shall be opened.
Submissions must be handled in a confidential manner and be kept in a secure and locked
location until the opening date for the submission.
The official United Nations exchange rate at the date of the deadline for the submission shall
be used for the conversion of offers.
7.4.1 Tender Opening Panel
The Tender Opening Panel shall be composed of the Chiefs of the Budget and Finance Section,
the Legal Services Section and the Procurement Section, and optionally of the Substantive
Section, or their designated representatives.
The tender opening panel shall be provided in advance with a summary of the tendering
requirements and all related details, such as the tender due date, tender reference and title,
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solicitation method, advertising method, as well as the Tender Opening Template which shall
be used for the preparation of the tendering opening report.
Submissions cannot be rejected or invalidated at the time of opening by the Tender Opening
Panel. However, the Tender Opening Panel shall reflect any inconsistencies noted in the bid
opening report, e.g. late offers. Only the evaluation team in charge of the solicitation exercise
may reject submissions based on non-compliance with the stated tender requirements.
Submissions shall be initialled/signed and dated by all members of the Tender Opening Panel.
7.4.2 Opening of RFQs, ITBs and RFPs with values below $150 000
RFQs, ITBs and RFPs with values below $150 000 may be submitted electronically and shall
be officially received by the Chief of the Procurement Section, shall be date stamped upon
receipt and safeguarded until the submission deadline. As soon as the submission deadline has
passed, only the quotations that have been officially received shall be processed by the
assigned Procuring Entity.
7.4.3 Opening of ITBs and RFPs with a value between $150 000 -$1 000 000 (submitted
in two sealed envelopes)
ITBs and RFPs with a value between $150 000 - $1 000 000 submitted in two sealed envelopes
shall be opened by the Tender Opening Panel in accordance with Section 7.4.1 in a formal
tender opening meeting.
Only the envelope containing the technical part of the bid or proposal shall be opened by the
Tender Opening Panel.
After completion of the technical evaluation, the financial bids or proposals shall be opened by
the Procurement Section.
The tender opening report shall be prepared using the tender opening report template. The
report shall include the following:
1. Offeror’s name and country;
2. Closing date of submission;
3. Place, date and time of the opening;
4. Comments on incomplete bids or proposals or other matters observed by the Tender
Opening Panel;
5. Names and signatures of the members of the Tender Opening Panel;
6. Eligible Origin: the goods or services offered are of eligible origin.
Alternative bids or proposals, if submitted in compliance with the ITB or RFP respectively,
shall be recorded in the same manner as a normal bid or proposal.
The tender opening report must be signed by each member of the Tender Opening Panel and
kept in the case file.
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7.4.4 Opening of ITBs and RFPs with a value above $1 000 000 (submitted in two sealed
envelopes)
ITBs and RFPs with a value above $1,000,000 submitted in 2 sealed envelopes shall be opened
by the Tender Opening Panel in accordance with Section 7.4.1 in a formal tender opening
meeting.
Only the envelope containing the technical part of the bid or proposal shall be opened at the
initial opening session. After completion of the preliminary technical evaluation, the Tender
Opening Panel shall reconvene to open the second envelope containing the contractual and
financial parts of the bid or proposal that have been found technically acceptable in the
preliminary technical evaluation. At the opening of the second envelope, the Tender Opening
Panel shall record the names of invitees whose contractual and financial bids or proposals have
been opened. The protocol for the second opening shall follow the same procedure as for the
initial opening.
7.5 Rejection of submissions
In case of a late competitive bid, proposal or quotation, the bidder who submitted it shall be
notified of the late submission, and the late bid, proposal or quotation shall be retained for six
months and thereafter destroyed, unless the proposal is requested by the bidder to be returned
or is required as evidence by the Procurement Section (see Section 7.3.1 for details).
7.6 Post-opening
In order to maintain the integrity of the procurement process, all submissions must be
safeguarded and only shared with the appointed evaluation team.
Chapter 7 Resources Guidelines Administrative Directive No. 27 Annex VI
Templates Tender Opening Report (Technical)
(Please contact the Procurement Section for
access to this document.)
Tender Opening Report (Financial)
(Please contact the Procurement Section for
access to this document.)
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CHAPTER 8 : EVALUATION OF SUBMISSIONS
8.1 Overview
Competitive bids, proposals and quotations received in time and in good condition shall be
evaluated in accordance with the requirements of Financial Rule 11.5.07(a).
The evaluation process consists of the examination and evaluation of the offers received (and
considered to be valid), the assessment of the offers’ responsiveness to specifications and
requirements as defined in the Solicitation Documents, and the determination of the offer that
represents the best value for money for the CTBTO.
For bids, proposals and quotations received from a sole source supplier, the offer shall be
assessed to determine the responsiveness to specifications and requirements and to determine if
the offered price is acceptable, i.e. represents value for money for the CTBTO.
In the context of the evaluation of offers, best value for money means that price alone is not
always the only criterion factored into an evaluation method. Other criteria such as quality,
availability, time, compliance, cost for maintenance and support, life cycle cost, etc., are also
taken into consideration.
In general the evaluation process consists of the following main steps:
Establishment of the evaluation team (prior to the solicitation);
Technical evaluation;
Commercial and Financial evaluation;
Clarifications, if required;
Negotiations, if applicable;
Preparation of evaluation report;
Background checks, if applicable.
The evaluation of offers must be completed before the validity of the offers expires. If this
cannot be achieved then a request shall be sent to all suppliers who submitted offers requesting
extension of the validity of the offers.
8.2 Evaluation team
The task of the evaluation team is to ensure that the offers received satisfy the requirements of
the Solicitation Documents, and to evaluate the offers according to the predefined evaluation
criteria. The evaluation team usually consist of technical and procurement experts.
Before commencing the evaluation, the team members must indicate if they are in a potential
conflict of interest situation with any of the suppliers (e.g. owning shares in the supplier
company, family relationship with the supplier, etc.), in which case they shall not take part in
the evaluation.
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8.2.1 Technical evaluation team
The technical evaluation shall be undertaken by a technical evaluation team composed of at
least two staff members from the Substantive Section(s)/Division(s) concerned, who shall be
nominated by the relevant Allotment Manager. Depending on the complexity of the
procurement, external experts may also be hired to participate in the technical evaluation of
offers. For complex cases which require a large team of evaluators, a chairperson can also be
appointed to coordinate the evaluation process.
The main tasks of the technical evaluation team during evaluation includes the following:
Evaluating the offers received against the predefined technical evaluation criteria to
determine if they satisfy the technical requirements in the Solicitation Documents.
Ensuring that deliberations during the technical evaluation are strictly confidential and
that information about the content of the submissions or the evaluation process is not
shared outside the evaluation team.
Ensuring that any correspondence with bidders is channelled through the Procuring
Entity managing the case.
Endeavouring to achieve a consensus in the final decision regarding the technically
compliant offer. Where a consensus cannot be achieved despite all efforts, the Allotment
Manager shall make the final determination based on the arguments presented by the
technical evaluation team.
For cases in which a chairperson has been appointed, where a consensus cannot be
reached, the chairperson shall make the final decision. Once a final decision is made, the
team members shall uphold the final decision agreed upon by the team.
Preparing the technical evaluation report outlining the offer/s that is/are technically
compliant; the report shall be signed by all members of the technical evaluation team.
8.2.2 Contractual and financial evaluation team
The contractual and financial evaluation shall be undertaken by the assigned Procuring Entity.
The main tasks of the Procuring Entity during evaluation include the following:
Issuing the request for technical evaluation to the technical evaluation team and ensuring
that the team is familiar with the solicitation process, evaluation criteria and the use of
the relevant templates for evaluation if applicable.
Managing requests for clarifications with bidders, if applicable. If, in order to carry out
the evaluation or for any other reason, it is necessary to seek clarification of technical or
commercial aspects of offers, the questions shall be submitted to the bidder in writing by
the assigned Procuring Entity and a written reply shall be requested. In cases where the
question or reply is verbal, the content shall be recorded in writing as soon as possible
and placed in the file. The assigned Procuring Entity shall also examine the contractual
aspects of the preferred offer and correspond with the bidder to seek clarifications on
aspects that do not fully comply with the contractual documents provided with the
Solicitation Documents. The Procuring Entity shall also liaise with the Legal Services
Section on any contractual deviations submitted by bidders.
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Ensuring that the technical evaluation report received has been undertaken in line with
the current procedures and has been duly signed and dated by the evaluators.
Preparing the contractual and financial evaluation report and submitting through the
established procedures for contract clearance.
Ensuring adequate funding for the contract; if the cost of the proposed contract exceeds
the amount initially certified to be available by more than $10 000 or 10% of the
proposed contract value, an updated requisition or additional requisition shall be certified
by the Certifying Officer and approved by the Allotment Manager to confirm availability
of the additional amount, prior to submission for contract clearance.
Negotiating (if applicable or justified) with the assistance of the Legal Services Section,
relevant aspects of the contract, if required.
Perform background checks on the supplier/s (if required).
8.3 Evaluation criteria
The evaluation criteria are divided in the two categories below which are explained in Section
6.5.2, and which are assessed during the evaluation process:
1. Technical criteria;
2. Contractual and Financial criteria.
8.4 Evaluation methodology
The CTBTO uses three different solicitation methods (RFQ, ITB, and RFP). Each type of
solicitation requires a different evaluation method. RFQs and ITBs are evaluated using the
lowest priced technically compliant method while RFPs are evaluated using the lowest priced
technically compliant method or cumulative analysis method (see Section 6.3 for details and
Table 2 for thresholds and other instructions for solicitation).
8.4.1 Lowest priced, technically acceptable offer
a) Lowest price method for RFQs and ITBs
In general, evaluation using this method consists of the following steps:
1. Technical evaluation of the offers, determining which offers are compliant to the
technical criteria;
2. Commercial and Financial evaluation: offers that are found to be technically compliant
shall be evaluated based on the lowest price.
b) Lowest price method for RFPs: lowest-priced among technically compliant offer
(point system with a minimum threshold)
Only the technical proposals achieving the predetermined minimum threshold after
completion of the technical evaluation shall be opened for financial evaluation. The
remaining financial proposals of offerors whose technical proposals are deemed
unqualified and non-responsive shall remain unopened. The contract will be awarded to
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the bidder meeting the minimum predetermined technical score in the technical
evaluation and offering the lowest price.
8.4.2 Cumulative analysis
This method of evaluation is only used for solicitations undertaken through the use of an RFP.
Under the cumulative analysis scheme, a total score is obtained by combining the weighted
technical and financial attributes. The proposal obtaining the overall highest score, after
combining the score of the technical proposal and the financial proposal according to the
selected weighting, is the proposal that should be selected for the award (see Section 6.3.3).
In general, an evaluation using this method consists of the following steps:
a) Technical evaluation of the offers, determining which offers are compliant with the
technical criteria. Determining the technical points achieved by each proposal, as per
maximum points assigned per criterion included in the Solicitation Document. (Only
proposals that meet the minimum technical threshold indicated in the Solicitation
Document (normally 50%, 60% or 70%) shall be deemed technically compliant.)
b) Commercial and Financial evaluation of the offers deemed technically compliant (i.e.
offers that have achieved the minimum technical threshold (see Section 6.3.3).
c) The scores of the technical and the financial proposals are combined and the proposal
with the highest score is the one that offers best value for money to the CTBTO and is
to be recommended for award.
8.5 Evaluation of Tenders - RFQs, ITBs & RFPs
8.5.1 Preliminary Screening
Preliminary screening of tenders is facilitated during the process of receipt, opening and
recording of the submissions (see Chapter 7.4).
8.5.2 Competitive Offers
Offers received through competitive quotations, bids or proposals received in time and in good
condition shall be evaluated in accordance with the requirements of Financial Rule 11.5.07(a)
and Administrative Directive No. 27.
a) Technical Evaluation
When conducting a technical evaluation, the following general guidelines shall be
followed:
i. All offers shall be evaluated against the technical criteria stipulated in the Solicitation
Documents (see Section 6.5.2 for details).
ii. All offers received shall be evaluated in accordance with the evaluation methodology
(lowest cost or cumulative) set out in the Solicitation Documents.
iii. Lowest Cost: if the evaluation criterion of “the qualified bidder whose offer
substantially conforms to the requirements set forth in the Solicitation Documents and
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is evaluated to be the one with the lowest cost to the CTBTO” were requested in the
requisition, the final evaluation report shall list the offer(s) that meet(s) the technical
requirements stated in the TOR and state the reasons why unsuccessful offers do not
meet the requirements. The final technical evaluation report shall be approved by the
Allotment Manager.
iv. Cumulative Analysis: if the evaluation criterion of “the qualified bidder whose
proposal, all factors considered, is the most responsive to the requirements set forth in
the Solicitation Documents” (see Section 8.4.2 cumulative analysis) were requested, a
comparative evaluation shall be carried out to show the extent to which the proposals
meet the technical and operational requirements as stated in the TOR or technical
specifications. Following the consideration of the specific elements of the proposal that
“all factors considered, is the most responsive to the requirements set forth in the
Solicitation Documents” (cumulative analysis) and based on the criteria stated in the
TOR or technical specifications, the technical evaluation team shall rank the proposals
accordingly and recommend the proposal that most effectively satisfies the technical
and operational requirements. The detailed analysis of the reasons why the selected
proposal is the one that “all factors considered, is the most responsive to the
requirements set forth in the Solicitation Documents” shall be stated in the technical
evaluation report and shall be approved by the Allotment Manager.
b) Commercial and Financial Evaluation
When conducting a financial and commercial evaluation, the following general
guidelines shall be followed:
i. All technically compliant offers shall be evaluated against the contractual and financial
criteria stipulated in the Solicitation Document to determine acceptability (see Section
6.5.2 for details). The evaluation must also be conducted in accordance with the
methodology (lowest cost or cumulative analysis) stipulated in the Solicitation
Documents.
ii. Taxes and duties must not be taken into consideration during the financial evaluation as
per provision in Section 6.5.2.
8.5.2.1 Steps for evaluation of offers submitted electronically
a) Without delay after the closing date of the tender and after nomination of the technical
evaluation team by the Allotment Manager, the assigned Procuring Entity shall forward
copies of the technical offer/s to the Chief of the Substantive Section for technical
evaluation. The technical evaluation team shall evaluate the technical aspects of the
offers in accordance with Section 8.2.1 and submit the results of such evaluation to the
assigned Procuring Entity. The evaluation shall be completed by the technical evaluation
team not later than 10 working days following receipt of the offer/s.
b) Upon receipt of the results of the technical evaluation and preferably within 10 working
days (subject to the complexity of the procurement), the Procuring Entity shall undertake
the financial and contractual evaluation of the offers and submit the case for approval in
accordance with the established procedure for procurement process review (contract
clearance process) (see Chapter 9).
8.5.2.2 Steps for evaluation of offers submitted in two sealed envelopes
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a) Without delay after the deadline has passed for offers submitted in two sealed envelopes,
and after the opening of the technical part of the offer and the nomination of the technical
evaluation team by the Allotment Manager, the assigned Procuring Entity shall forward
copies of the technical part of the offer to the Chief of the Substantive Section for
technical evaluation. The technical evaluation team shall evaluate the technical aspects of
the offers in accordance with Section 8.2.1 and submit the results of the evaluation to the
assigned Procuring Entity. The evaluation shall be completed by the technical evaluation
team not later than 15 working days after the opening of the envelope containing the
offer (in cases of especially complex procurements, technical evaluation may require
additional time).
b) Not later than 10 working days after the receipt of the technical evaluation and following
opening of the second envelope containing the contractual and financial parts of the
offer, the assigned Procuring Entity shall complete the contractual and financial
evaluation of the offer (in cases of especially complex procurements, contractual and
financial evaluation may require additional time).
c) In such cases where the Procurement Section deems it necessary, the results of the
financial evaluation may be shared with the technical evaluation team to finalize the
overall evaluation.
d) Should the technical evaluation team or Procurement Section require more time to
prepare an evaluation report as referred to in Section 8.2.1 and 8.2.2 respectively, the
deadline for submission of such an evaluation report shall be agreed upon between the
assigned Procuring Entity and the technical evaluation team.
e) Following technical and commercial evaluation, the Procuring Entity shall submit the
case for approval in accordance with the established procedure for procurement process
review (contract clearance process) (see Chapter 9).
8.5.3 Sole Source Offers ( RFQs, ITBs and RFPs)
a) Technical Evaluation
i. Offers received from sole source suppliers shall be evaluated against the technical
criteria stipulated in the Solicitation Documents (see Chapter 6.5.2 for details). The
technical evaluation report shall state whether or not the offer is technically compliant
and shall be approved by the Allotment Manager.
ii. If necessary, negotiations can also be undertaken with the supplier to address
shortcomings of the technical offer.
b) Commercial and Financial Evaluation
When conducting a financial and commercial evaluation, the following general
guidelines shall be followed:
i. If the offer is deemed technically compliant it shall be evaluated against the contractual
and financial criteria stipulated in the Solicitation Document to determine acceptability
(see Chapter 6.5.2 for details).
ii. The offer must also be assessed to determine whether or not the price is justifiable and
acceptable. Price assessment can be undertaken using various sources: internet prices,
prices included in previous contracts, etc.
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iii. If necessary and as applicable, negotiations can also be undertaken in an attempt to
receive better prices.
8.5.3.1 Steps for evaluation of sole source offers
a) When the Procurement Section receives the formal offer from the sole source supplier, a
copy of the offer shall be forwarded to the Substantive Section for review of its
substantive (technical) aspects.
b) The Substantive Section shall confirm in writing whether or not the offer is technically
acceptable and the reasons for its technical acceptability or rejection.
c) Upon receipt of the technical evaluation from the Substantive Section, for a sole source
requisition, the assigned Procuring Entity shall undertake a commercial and financial
evaluation of the offer and submit the case for approval in accordance with the
established procedure for procurement process review (contract clearance process) (see
Chapter 9).
8.6 Further aspects of evaluation
8.6.1 Correction of errors
Errors must be corrected in accordance with Section 6.5.2 and as applicable taking the
following into consideration:
a) If there is a discrepancy between the unit price and the line item total that is obtained by
multiplying the unit price by the quantity, the unit price shall prevail and the line item
total shall be corrected, unless in the opinion of the CTBTO there is an obvious
misplacement of the decimal point in the unit price, in which case the line item total as
quoted shall govern and the unit price shall be corrected;
b) If there is an error in a total corresponding to the addition or subtraction of subtotals,
the subtotals shall prevail and the total shall be corrected;
c) If there is a discrepancy between words and figures, the amount in words shall prevail,
unless the amount expressed in words is related to an arithmetic error, in which case the
amount in figures shall prevail.
8.6.2 Indications of potential proscribed practices
When conducting evaluation of offers, the evaluation panel should satisfy itself that there is no
indication of fraud, collusion or suspicious actions by bidders. Potential proscribed practices
include the following:
a) Fraud: examples include irregularities on bid/proposal securities (e.g. logos or names or
issuing banks); inconsistencies on registration certificates and quality certificates;
inconsistency on bank account information (e.g. the name provided on the supplier form
is under the name of an individual and not a company).
b) Collusion: examples include evidence of bid-rigging (competitors agree in advance who
will submit the winning bid), and price fixing (agreement by competitors to raise, fix or
maintain the price for goods or services) as detailed below.
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c) Patterns of potential bid-rigging:
i. Rotation of the successful bidder; the same suppliers submit bids and each
company seems to take a turn being the successful bidder;
ii. Schedules are split between bidders; i.e. one bidder is lowest for schedule one, the
other for schedule two, etc.; or one bidder quoted for schedule one only, another
bidder for schedule two only, etc.;
iii. Bank guarantees submitted by different bidders have been issued by the same bank
and have almost identical reference numbers;
iv. Details regarding ownership and management in respect of several bidders show
that these bidders have the same key personnel such as directors, partners, owners,
etc.
v. Patterns of potential price fixing such as:
− Identical prices of multiple bidders;
− The proposals or bid forms submitted by different bidders contain the same
irregularities (such as identical calculations or spelling errors), similar
handwriting or stationery.
8.6.3 Best and final offer
Best and final offer (BAFO) is a method of competitive negotiations which can be used during
the final evaluation phase of a procurement process/activity when at least two qualified
suppliers remain within a competitive range. The competitive range includes all offers that,
based on the results of the evaluation, have a reasonable chance for award.
The BAFO concept is an optional step in the selection of offer/s with the objective of
enhancing competition, and thus ensuring best value for money for the organisation. No
negotiation with suppliers or contractors is possible after BAFOs have been presented and no
subsequent call for further BAFOs can be made.
The use of BAFOs may be appropriate in the following circumstances:
a) Offers based on ‘lowest priced, technically compliant evaluation methodology:
When the price is exactly the same for the lowest priced technically compliant offers
and it is not possible for the CTBTO to identify a winner. Suppliers shall be informed
that they are not allowed to change the specifications of the offered
product/services/works or any bid conditions (delivery time/terms, special conditions,
etc.), and that only the price can be modified. Upon receipt of the BAFOs from the
suppliers, the evaluation committee should reconvene to make a final comparison of the
competing offers.
b) Offers based on ‘cumulative analysis’ methodology:
i. When more than one proposal achieves the same number of points in the
cumulative analysis, i.e. after adding the total technical and financial points.
Suppliers shall be informed that they are not allowed to change the specifications
of the offered product/services/works or any other conditions (delivery time/terms,
special conditions, etc.), and that only the price can be modified. Upon receipt of
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the BAFOs from the suppliers, the evaluation committee should reconvene to make
a final comparison of the competing offers.
ii. When more than one proposal is within a competitive range in the cumulative
analysis and there is a need to clarify ambiguities, correct obvious mistakes, point
out weaknesses and deficiencies, and generally seek improvements in both the
technical and financial aspects of the offers.
iii. Suppliers within the competitive range can be requested to submit a best and final
offer with respect to all aspects of their proposals; pricing and deliverables.
All suppliers chosen to submit a BAFO should be provided with information about
the deficiencies in their proposal, and be asked in writing to submit a decisive and
final offer as a follow up to their proposal. Generally, the suppliers should be
informed that price increases will not be accepted. However, they may decline to
alter the terms of their original proposal, and that such a decision will not render
them unacceptable. Upon receipt of the BAFOs from the suppliers, the evaluation
committee should reconvene to make a final comparison of the competing offers.
The Procuring Entity shall prepare a clearance request, stating the reasons for seeking BAFOs,
the suppliers in the competitive range, and the suppliers to be eliminated, including appropriate
justifications.
Upon approval by the Chief of Procurement, the Procuring Entity shall inform the Evaluation
Committee of the decision to obtain BAFOs and issue a written request for BAFOs to the
suppliers in the competitive range. The request shall include a deadline for submission of the
BAFO. The request to submit a BAFO shall not contain any information regarding the
evaluation or any information on the chances for contract award.
The bidders must be given a reasonable period of time to submit their BAFO, taking into
account the complexity of the procurement action and must submit their response to the request
for BAFO in the manner indicated. All regular procedures for receipt and opening of offers
shall apply to the BAFO.
Upon receipt of the BAFOs from the suppliers, the evaluation committee should reconvene to
make a final comparison of the competing offers.
If the request for BAFOs is without result, and a split-award is not feasible, then the award may
be made through a draw, to which the vendors with tie bids/bids within the competitive range
shall be invited to attend. Such a draw shall, to the extent possible, be through mechanical
means. The Chief of Procurement or a designated representative shall conduct the draw in the
presence of two other Procuring Entities. A written record of the draw and the result thereof
shall be placed in the procurement case file.
As appropriate, and in the best interests of the CTBTO, the Chief of Procurement in
consultation with the Project Manager and Project Executive may carry out a risk analysis of
the two bidders and select the bidder believed to represent the least risk to the CTBTO. Such
information should be approved by the Project Executive and be kept in the Procurement file.
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8.6.4 Negotiations
Negotiations (if applicable) are an interactive process of discussions between the supplier and
the CTBTO regarding the terms and conditions of a contract. The purpose of negotiations is to
ensure that the technical offer is in line with the requirements and that the financial proposal is
competitive on all aspects of the price.
For competitive processes, negotiations should only take place after the evaluation has been
successfully completed and a supplier has been selected. Negotiations are to be with the
selected supplier only. When negotiations take place it should be ensured that the requirements
(specifications, TOR, SOW) and quantities are not changed substantially as this would require
cancellation of the tender process and initiation of a new one. Written justification for the
negotiation shall be prepared.
For sole source processes, if necessary, prior to contract award, negotiations may be
undertaken with the supplier to address shortcomings of the technical offer and to obtain a
more favourable price.
All negotiations shall be conducted by a minimum of two staff members. As necessary,
personnel from the Legal Services Section may also be requested to participate in negotiations.
Minutes recording the discussion and agreement shall be taken and the results of the
negotiations shall be recorded in a note to the file. When negotiations are conducted verbally,
the assigned Procuring Entity shall ensure that the main discussions and the outcome of the
negotiations are recorded in writing and included in the file of the relevant procurement case.
8.6.5 Recommendation: Evaluation report
The findings of the evaluation shall be documented in an evaluation report, which shall be used
as the basis for the recommendation of award. The evaluation report shall contain a summary
of the evaluation process as well as details of the evaluation steps performed (technical,
contractual and financial). Any invalidation, rejection, non-compliance, and clarification of
offers should be stated. The report shall also clearly state the winning bid/s.
The evaluation team shall sign the evaluation report and it shall be kept in the procurement file.
In addition, the evaluation report should include a standard declaration of non-conflict of
interest of the members of the evaluation team.
If the evaluation methodology is ‘lowest priced technically acceptable offer’ particular
attention must be given to ensure that the reasons for disqualifying offers with prices lower
than the selected offer are clearly stated in the report. In addition, where applicable, the report
must include a statement confirming price reasonableness. The evaluation report is a
confidential document and must not be shared with individuals other than those involved in the
respective procurement process.
8.6.6 Due diligence: background checks
After completion of the evaluation but prior to award, if applicable, the CTBTO may conduct
background checks/due diligence on the bidder recommended for award to verify that the
bidder meets the criteria set forth in the Solicitation Document, and may reject a bidder on the
basis of these findings, which shall be documented.
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Background checks can be undertaken for any case as deemed necessary but are specifically
recommended in the following instances:
a) Contracts with high risk such as complex contract for services or works;
b) High value contracts with new vendors;
Depending on the case, background checks may include any/all of the following:
a) Verification and validation of accuracy, correctness and authenticity of legal, technical
and financial documents submitted;
b) Verification of experience of the supplier through reference checks;
c) Verification of the authenticity of the performance security with the issuer;
d) Verification of the legal status of the company;
e) Verification of all other documentation provided, such as certificates of quality
management systems, etc.;
f) Site Inspection - bidders shall permit the CTBTO’s representatives to access their
facilities at any reasonable time to inspect the bidder’s premises, if applicable, and
provide related documentation as requested;
g) Check litigation history;
h) Financial solidity checks, for example Dun and Bradstreet reports;
i) Other means that the CTBTO may deem appropriate, at any stage within the selection
process, prior to awarding the contract.
8.6.7 Suppliers with pending claims, disputes and contentious issues
In the event that there is a pending dispute, claim or other contentious issue with a supplier,
which either compromises or calls into question the ability of that supplier to perform or where
performance would be inconsistent with the effective resolution of any dispute, the contract
shall not be awarded to the supplier until the matter has been resolved or otherwise considered
to be no longer contentious.
The Chief of Procurement shall ensure that all relevant stakeholders are aware of the pending
dispute and that no awards of contracts are made to the supplier.
The Chief of Procurement in collaboration with the Legal Services Section shall also take the
necessary actions to resolve the issue. Once a dispute, claim or contentious issue has been
resolved, the Chief of Procurement shall notify all relevant stakeholders as well as the supplier
in question as to the timing and extent to which the supplier may be considered for future
contracts with the CTBTO.
Details of the dispute, claim or contentious issue shall be kept on file.
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8.6.8 Cancelling the RFQ/ITB/RFP
Where sufficient justification is established, the CTBTO may decide to cancel the
RFQ/ITB/RFP procedure at any stage. Some of the possible reasons for such cancellation may
include the following:
a) The selection process has been unsuccessful, i.e. no qualitatively or financially
worthwhile offer has been received or there is no response from the market despite the
reasonable period of time of advertisement or sufficient number of direct invitations
circulated;
b) The technical requirements or financial condition of the project have been
fundamentally altered;
c) Exceptional circumstances or force majeure have rendered the initiation of the contract
impossible or infeasible;
d) All of the responsive offers significantly exceeded the CTBTO’s price estimation and
the financial resources available for the contract, and a budget adjustment is not
feasible;
e) There have been irregularities in the procedure, in particular where there is failure in
achieving transparency of the process or fair competition amongst suppliers submitting
offers, that proceeding will only pose reputational risks for the CTBTO.
In the event of cancellation of an RFQ/ITB/RFP process, offerors must be notified of the
cancellation by the CTBTO, without obligation on the part of the CTBTO to explain the
rationale for the cancellation. Such offerors shall not be entitled to any compensation
whatsoever.
When the tender procedure is cancelled before the envelopes are opened, if requested by the
offeror, the unopened and sealed envelopes must be returned to the respective offerors.
Chapter 8 Resources
Templates Sample Request for Technical Evaluation
(Please contact the Procurement Section for access to this document.)
Commercial and Financial Evaluation Report Template
(Please contact the Procurement Section for access to this document.)
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CHAPTER 9: PROCUREMENT PROCESS REVIEW
Upon finalisation of the technical, commercial and financial evaluation of the offer, the case
shall be submitted for approval in accordance with the established procurement process review.
The procurement process review is undertaken to ensure that appropriate authority has been
obtained for the commitment of funds; that the best interests of the CTBTO are protected; that
the procurement activities are carried out in conformity with the CTBTO’s FRRs; and that
relevant policies and procedures are in accordance with generally recognized leading business
practices.
9.1 Organization of procurement process review
Prior to award, the procurement process review is undertaken either by the Procuring Entity
directly based on his/her assigned delegation of authority (see Section 2.2) or by the
Committee on Contracts (see Section 9.3 Scope of review).
In order to facilitate the review and award, documentation must be prepared summarizing the
procurement process and all actions taken. The documentation shall provide a complete picture
of the actual process. The Procuring Entity responsible for the procurement process shall
prepare the documentation and also assume responsibility for the accuracy of the information.
If it is not possible to finalise the procurement process and award the contract within the
original period of offer validity, an extension of the offer validity period must be requested
from the bidder (in case of sole source procurement) or from all bidders (in case of competitive
procurement). Bidders agreeing to the request will not be permitted to modify their
bids/proposals but will be required to extend the validity of their bid/proposal securities (if
applicable) for the period of the extension. As such, extensions must be requested as early as
possible to allow bidders sufficient time to produce a new valid bid/proposal security before
the expiration of the original period of offer validity.
The procedure to be followed and the documents to be considered by the Committee on
Contracts are set out in detail in Chapter 8 of this Procurement Manual.
With respect to proposed contracts to be awarded after a competitive procedure, the Committee
on Contracts shall consider the documents submitted by or through the Chief of the
Procurement Section. The Chief of the Procurement Section shall ensure that the submission is
complete, that it presents a written summary of the essential aspects and that it recommends the
action to be taken by the Committee on Contracts.
With respect to exceptions to competitive bidding, as applicable, the Procuring Entity shall also
ensure justification of the reasonableness of the price (through market survey, benchmarking
with previous purchase prices, comparison with market prices, etc.) in accordance with Section
8.5.3.
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9.2 Organisation of Work
9.2.1 Review by the Procuring Entity
The Procuring Entity shall undertake review of the procurement process in accordance with the
assigned delegation of authority (see Section 2.2).
Recommendations for award submitted for approval must include at a minimum the following:
a) Copy of the relevant requisition(s);
b) Copy of the technical evaluation report;
c) Contractual and financial evaluation report;
d) TOR/Technical Specifications/SOWs as applicable;
e) Draft amendment (if applicable).
9.2.2 Review by the Committee on Contracts
a) As provided for in Financial Rule 11.5.04 and Administrative Directive No. 27, the
Committee on Contracts reviews proposals for contract awards and for exceptions to
competitive procedures and recommends to the Executive Secretary to approve, defer or
reject such proposals and exceptions. When the value of a proposed contract is at least
$150 000, excluding VAT, the Chief of the Procurement Section shall forward the case to
the Committee on Contracts for its review. The review shall be in accordance with the
TOR set out in Section 9.3 below.
b) The submission of the case shall include the following:
i. Memorandum presenting the case to the Committee on Contracts;
ii. Copy of the relevant requisition(s);
iii. Copy of the technical evaluation report;
iv. Contractual and financial evaluation report;
v. TOR/Technical Specifications/SOWs as applicable;
vi. Draft amendment (if applicable).
9.3 Scope of Review
9.3.1 Terms of Reference of the Committee on Contracts
a) In accordance with Administrative Directive No. 27, the TOR of the Committee on
Contracts shall be to examine and to recommend to the Executive Secretary to approve,
defer or reject:
i. All proposals for exceptions listed in Financial Rule 11.5.06(a), (c), (e), (f), (g), (h), (i)
and (j) for contracts with an estimated amount above $150 000 (excluding VAT) as well
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as proposals between $10 000 and $150 000 for the same exceptions in case they are
forwarded to the Committee by the Chief, Procurement;
ii. All proposed contracts for the procurement of goods, constructions or services and
other requirements involving commitments to a single contractor in respect of a single
requisition or a series of related requisitions totalling $150 000 or more;
iii. All proposed contracts or series of related contracts with the same contractor which
involves income to the Secretariat of $10 000 or more;
iv. Proposals for modification or renewal of contracts or agreements previously
recommended by the Committee, where such amendments or modifications increase the
value previously recommended for approval by the Committee on Contracts, by more
than 10% or $50 000, whichever is lower;
v. All proposals for the amendment, modification or renewal of any contracts and/or
agreements not previously submitted to the Committee on Contracts, where the amount
in the aggregate now exceeds $150 000.
b) The Committee on Contracts shall receive and register for the record the following cases:
i. All cases with exceptions listed in Rule 11.5.06 (b) & (d) for contracts with an
estimated amount of $10 000 or above. In cases which fall under 11.5.06 (b) and (d),
evidence to that effect shall be provided by the State Signatory concerned. In these
cases, the substantive officer shall record the reasons for invoking 11.5.06 (b) and (d)
and attach the text submitted by the State Signatory concerned, and shall convey this
information to the Chairperson of the Committee on Contracts, who shall register it for
the record.
ii. Proposals for modification or renewal of contracts or agreements previously
recommended by the Committee, which require insignificant changes to the contract
(for example changes to delivery time, address changes, changes of personnel, etc.)
if/when submitted by the Chief of Procurement in writing to the Chairperson of the
Committee on Contracts.
iii. All post facto cases in accordance with Section 9.7 of this Procurement Manual.
iv. Such registered cases shall be included in the Committee on Contracts meeting minutes
for the purpose of reporting to the Executive Secretary.
v. The Committee on Contracts shall also examine such other matters as may be referred
to it by the Executive Secretary, the Director of Administration or such other authorized
officers under Financial Rule 11.5.01.
vi. The Committee shall review all proposals submitted and render its written advice to the
Executive Secretary. When the Executive Secretary does not accept the
recommendation of the Committee, he/she shall record his/her reasons in writing.
9.3.2 Composition and Procedures of the Committee on Contracts
a) The members of the Committee on Contracts shall be:
i. Chief of Budget and Finance Section (or designee), voting member;
ii. Chief of the Legal Services Section (or designee), voting member;
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iii. Chief of Quality Management and Performance Monitoring (QMPM) Section (or
designee), voting member;
iv. Chief of Procurement Section (or designee), non-voting member;
v. Head of General Services Unit (or designee), voting member;
vi. Allotment Manager initiating the requisition (or designee), non-voting member;
vii. Secretary (designee from Administration), non-voting member.
b) Voting members shall be non-voting when in the role of Allotment Manager initiating the
requisition or when having any other potential conflict of interest. The Chief of Budget
and Finance Section shall be Chairperson of the Committee. In the absence of the Chief
of Budget and Finance Section, the Chief of the Legal Services Section shall act as
Chairperson. In the absence of the Chairperson and of the Chief of the Legal Services
Section, the Chief of the QMPM Section shall act as Chairperson. In the absence of the
Chairperson, of the Chief of the Legal Services Section and the Chief of the QMPM
Section, the Head of General Services Unit shall act as Chairperson. The Chairperson or
the member of the Committee acting as Chairperson shall, in this capacity, report directly
to the Executive Secretary.
c) Representatives of the Office of the Executive Secretary and of Internal Audit may be
invited to attend Committee meetings as observers.
d) The Committee may invite attendance of the Procuring Entity responsible for submitting
the proposal for the Committee’s consideration. The Procuring Entity thus invited shall
provide such supplementary information as the Committee deems necessary for the
discharge of its functions.
e) The Committee shall meet as often as necessary.
f) The meetings of the Committee shall be closed. The Secretary shall prepare minutes of
the proceedings of each meeting, containing the Committee’s recommendations. The
minutes shall be approved by the Committee and sent to the Executive Secretary. Copies
of the approved minutes shall be distributed to the members who participated in the
meeting concerned, as well as to the Director of Administration and the Chief, Internal
Audit.
g) The Committee may choose to hold meetings electronically. In case there is a
disagreement on any issue concerning the case, a formal meeting shall be held to review
the case.
h) The presence of three voting members, including the Chairperson or acting Chairperson,
shall constitute a quorum.
i) The Committee shall normally adopt its recommendations and decisions by consensus
among voting members. If in a particular case no consensus can be reached, the
Committee may adopt its recommendation or decision by a majority vote of the voting
members attending the meeting. In the event that the votes are evenly divided, the
Chairperson, or acting Chairperson, shall cast the deciding vote. When a matter is
decided by voting, the views and position of each voting member or designee present
shall be recorded in the minutes. If the Committee so decides, non-voting members other
than the Secretary shall not be present when the Committee adopts its recommendations
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and decisions, whether by consensus or by vote, or for any discussion immediately prior
to such adoption.
9.4 Decisions/Recommendations
a) The Committee on Contracts recommendations are made by consensus or simple
majority voting of members present at the meeting as explained under point Section 9.3.2
(i) above.
b) The approval of a recommendation of the Committee on Contracts to award is an internal
decision without external effect until and unless it is officially communicated to a bidder
or sole source supplier. The Executive Secretary may delegate in writing authority to
approve award of contracts to the Director of the Administration Division, to the Chief of
the Procurement Section or to a Procuring Entity.
9.5 Minutes and circulation
The Minutes are shared with each member of the panel for review and approval. Thereafter, the
Minutes are sent to the Executive Secretary for approval. The approved Committee on
Contracts minutes are kept on file.
9.6 Urgent Unscheduled Maintenance and Exigencies
For further information on Urgent Unscheduled Maintenance see Section 11.3.1.(d).
For information on exigencies of the CTBTO not permitting the delay attendant upon calling
for tenders or proposals, see Section 6.8 (v).
9.7 Ex Post Facto Cases
a) In accordance with Financial Rule 5.2.01, a legal obligation shall be based either on a
contract, a purchase order, an agreement or other form of transaction document entered
into on behalf of the CTBTO. With the exception of procurement activities with a value
below $4 000 where no written contract or purchase order is required, no services or
goods shall be procured or otherwise provided or accepted until a contract has been
entered into between the CTBTO and the supplier or contractor. Staff members and
personnel of the Secretariat are expected to make every effort to avoid ex post facto
cases. Failure to do so may lead to disciplinary action in accordance with Staff
Regulation 10.2, Staff Rule 10.2.01 and Staff Rule 10.2.02.
b) Should an ex post facto case occur, before payment can be effected, the Chief of the
Substantive Section shall provide a written justification for the ex post facto case,
through his/her Director to the Director of the Administration Division with a copy to the
Chief of the Budget and Finance Section, explaining why it was not possible to raise a
requisition and conduct a proper procurement for the purchase. The Chief of the Budget
and Finance Section shall forward the justification to the Committee on Contracts for
registration.
c) Such justification must also identify the cause(s) of the ex post facto case and propose
how to avoid recurrence. The following cases require notification to the Committee on
Contracts:
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i. Fully ex post facto case, defined as a procurement action, regardless of whether a
written contractual instrument exists, in which goods or services have already been
fully furnished prior to submission of the procurement action to the relevant approval
authority;
ii. Partially ex post facto case, defined as a procurement action, regardless of whether a
written contractual instrument exists, in which goods or services have been partially
provided prior to submission of the procurement action to the relevant approval
authority.
d) To effect payment to the supplier for ex post facto cases, the Chief of the Substantive
Section or the requesting Officer shall forward the invoice to the Certifying Officer along
with a copy of the written justification sent to the Director of the Administration Division
and inform him/her whether the goods/services referred to in the invoice have been
satisfactorily delivered/performed. The Certifying Officer shall certify that the
goods/services have been received and shall arrange payment to the supplier in
collaboration with the Budget and Finance Section.
e) Approval of an ex post facto case shall not constitute or be deemed a precedent or
justification for not taking timely and appropriate action(s) in compliance with the
Financial Regulations and Rules and recognized procurement procedures for future cases.
Chapter 9 Resources
Templates Sample Request for Technical Evaluation
(Please contact the Procurement Section for access to this document.)
Commercial and Financial Evaluation Report Template
(Please contact the Procurement Section for access to this document.)
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CHAPTER 10: AWARDS
10.1 Award and finalization
a) Award is the formal decision and approval to establish a contract, with a successful
supplier, based on review of the procurement process within the limits of the awarding
authority. The award phase marks the successful conclusion of the procurement process
and the starting point for contract finalization and execution. Written justification
explaining the basis for the award of the contract shall be prepared by the Procurement
Section.
b) Before a commitment is entered into, it is reviewed in terms of: compliance with the FRR
and the procurement policies and procedures, availability of funds and compliance with
proper documentation processes. The awarding authority then accepts or rejects the
award recommendation. Acceptance constitutes the approval of award.
c) As provided for in Financial Rule 11.5.01, only staff members and personnel duly
authorized and designated as a Procuring Entity by the Executive Secretary shall enter
into contracts on behalf of the CTBTO for the purchase, rental or sale of goods,
constructions and/or services. In accordance with Administrative Directive No. 27, the
meaning of “enter into contracts” comprises award decisions and execution of contracts
by signature as well as entering into contractual commitments in other forms, such as
through negotiations with a potential contractor, invitations to bid, or requests for
proposal or quotation, which are functions that are reserved for Procuring Entities.
Contracts are awarded by the relevant authorized Procuring Entity (see Chapter 2,
Delegation of Authority) and when applicable, based on recommendations from the
Committee on Contracts (see Section 9.3 Scope of Review). When the Executive
Secretary does not approve a recommendation of the Committee on Contracts, he/she
will record his/her reasons in writing.
d) Purchase orders and contracts below $500 000 shall be signed by the respective
authorized Procuring Entities as defined in accordance with Financial Rule 11.5.01. Such
authorized Procuring Entities may be changed from time to time by a memorandum from
the Executive Secretary.
e) Purchase orders and contracts in the amount of $500 000 or above shall be signed by the
Executive Secretary.
f) The final version of a contract/purchase order involving an amount of at least $25 000,
together with Annexes, including cases in which the Executive Secretary has approved
the recommendation of the Committee on Contracts to award a proposed contract or a
purchase order, shall be submitted through the Chief of the Procurement Section to the
Legal–Finance Review Team for review and comment. The Legal–Finance Review
Team, composed of one Officer of the Legal Services Section and one Officer of the
Budget and Finance Section and designated by the Executive Secretary, shall review
proposed contracts or proposed purchase orders involving an amount of at least $25 000
before they are signed. The Legal–Finance Review Team shall report any irregularity
through the Director of the Administration Division to the Executive Secretary.
g) Upon completion of the review, the Chief of the Procurement Section may upon a
justified request of the contractor/supplier inform the selected contractor or the sole
source contractor of the award which shall expressly be made conditional on the
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signature by the contractor of the complete contract and acceptance of any conditions
stated in the award communication.
h) The final version of a contract for constructions or services normally shall be based on
the model contract (including GCC and Special Conditions of Contract, if applicable)
included among the Solicitation Documents while incorporating such modifications or
special features as have been agreed, ad referendum, with the selected contractor or
supplier during the evaluation or negotiation phase. The signature version of a purchase
order contract shall include the Special Conditions of Contract as applicable and the
GCC.
i) The CTBTO’s model contracts must always be used if possible. If there is a requirement
to use other formats that are routinely used in certain industry sectors (e.g. utilities, leases
for property, electrical or water services), these must be approved by the Legal Services
Section.
j) No modifications and/or additions to the CTBTO’s standard GCC shall be undertaken by
the Procuring Entity without approval by the Legal Services Section. Care must also be
taken not to include any requirements or conditions that contradict the CTBTO’s
standard GCC.
k) If the contract involves commitments against appropriations for future years pursuant to
Financial Rule 11.2.02, it shall contain a clause permitting the CTBTO to terminate the
contract if the necessary funds are not available. Exceptions shall be subject to approval
by the Executive Secretary and be kept on record.
l) Upon completion of the review by the Legal‒Finance Review Team and signature of the
contract in accordance with such authority as the Executive Secretary may have
delegated in writing, the Chief of the Procurement Section shall forward both signed
copies of the contract to the contractor, requesting that both copies be signed and one be
returned. In the case of a purchase order, both signed copies shall be forwarded to the
selected supplier who shall be requested to sign and return the acknowledgement copy.
m) In the absence of the Executive Secretary, his/her authorized representative shall have the
authority to sign contracts or purchase orders on his/her behalf.
n) The specific limits within which contracts may be awarded and/or signed by the Director
of the Administration Division, the Chief of the Procurement Section or an authorized
Procuring Entity shall be determined by the Executive Secretary and communicated in an
internal memorandum (see Section 2.2 (c), Delegation of Authority).
o) With respect to software licences, the official responsible for raising the requisition for
acquiring the software shall be responsible for ensuring that the software is used
exclusively in accordance with the terms and conditions of the licence. This official is
authorized ad hoc to sign the licence agreement on behalf of the CTBTO if the amount of
the licence agreement is within the limits established by the internal memorandum of the
Executive Secretary referred to in Section 10.1 (n) above. Division Directors must ensure
that the officials concerned within their Divisions fully understand the serious nature of
such commitments and are aware of the responsibilities entrusted to them. The Director
of the IMS Division shall sign export licences for equipment.
p) Contracts must be issued and signed by both the CTBTO and the supplier prior to any
delivery of goods, and/or the start-up phase of works or services.
q) Before the issuance of the contract to a supplier, if the increase of the contract amount is
less than $10 000 or 10% of the original amount, whichever is lower, and there is no
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substantial change in the contract/proposal, a second submission to the Committee on
Contracts is not required. However, when the increase of a contract amount is equal to or
more than $10 000 or 10% of the original amount, the Chief of the Procurement Section
shall request approval from the Director of the Administration Division that the case not
be resubmitted to the Committee on Contracts. This approval shall be in writing and be
properly filed for reference to the Legal‒Finance Review Team. The original, signed
versions of contracts for constructions or services, purchase order contracts and licences
shall be kept by the Legal Services Section.
r) Upon signature of a contract by all parties, the Procurement Section shall provide a
scanned copy to the Substantive Section and upload the document to SAP. Upon dispatch
of the purchase order signed by all parties, the Procurement Section shall provide a
scanned copy to the Substantive Section. Whenever possible, the obligation shall be
based on a fixed total contract price and, when this is not possible, normally on fixed unit
prices. For a purchase order/contract, the full amount shall be obligated against the
appropriations for the current biennium in accordance with Administrative Directive No.
42.
s) Upon receipt of the countersigned contract, the Procurement Section shall provide a copy
of the signed contract to the Requisitioner, the Chief of the Substantive Section and the
Certifying Officer. Copies of purchase orders are sent to the Requisitioner, the Chief of
the Substantive Section and the Certifying Officer when they are sent to the contractor.
t) Information on contract awards shall be made available to Member States upon request.
10.2 Vendor notification, debriefing and complaints
10.2.1 Posting of awarded contracts
a) To conclude a competitive procedure, the Procurement Section, upon the acceptance by
the selected supplier of the award, shall inform all unsuccessful bidders who submitted
timely bids that their bid was not selected.
b) All awards based on a competitive process shall be published without the price on the
UNGM web site. The publication shall normally include the following information:
Reference number of the solicitation;
Type of goods/services procured;
Name of the awarded supplier.
10.2.2 Complaints from bidders
a) Suppliers that perceive that they have been unjustly treated in connection with a
solicitation process may submit a complaint to the CTBTO.
b) The Tender Opening Panel shall be responsible for dealing with complaints from invitees
concerning the competitive bidding procedure in accordance with the established
procedures set out in Annex VI: Provisional Rules of Procedure of the Tender Opening
Panel for Dealing with Procurement Complaints.
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10.2.3 Debriefing procedures
The CTBTO does not routinely debrief unsuccessful bidders. However, in the case of high
value or complex awards, a debriefing may be conducted upon written request from an
unsuccessful bidder. The debriefing shall take place in accordance with the established
procedures for debriefing.
Where a debriefing has been arranged, the scope should focus on a “lessons learned”
experience for the unsuccessful supplier, providing the supplier with information and
suggestions as to how they may respond more successfully to future solicitations. Therefore,
the debriefing should focus on the supplier’s offer.
Debriefing of a supplier shall always be done verbally and shall always be undertaken in the
presence of more than one Procuring Entity.
When providing the debriefing, the Procuring Entity should identify the unsuccessful supplier’s
significant weaknesses and deficiencies, and explain the general basis of the CTBTO’s award
decision.
The following issues shall not be discussed/disclosed during the debriefing:
Comparison of the unsuccessful offer to other offers, including the successful offer;
The relative merits or technical standings of other offers;
The prices of other offers.
A supplier debriefing shall not be longer than 15 minutes.
Chapter 10 Resources
Templates Notification of unsuccessful bidders
(Please contact the Procurement Section for access to this
document.)
Guidelines Provisional Rules of Procedure of the Tender Opening Panel for
Dealing with Procurement Complaints
(See Annex VI of this document)
Delegation of Authority
(Please contact the Procurement Section for access to this
document.)
How to De-brief Unsuccessful Bidders
(Please contact the Procurement Section for access to this
document.)
Other Useful
Resources
UNGM Contract Awards
CTBTO Website
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CHAPTER 11: CONTRACTUAL INSTRUMENTS
11.1 Overview
a) A contract is a written, legally binding agreement between the CTBTO and a supplier,
that establishes the terms and conditions, including the rights and obligations of the
CTBTO and the supplier.
b) As provided for in Financial Rule 11.5.08, written procurement contracts shall be used to
formalize every procurement action with a monetary value exceeding specific thresholds
established by the Executive Secretary.
c) The requirement for written procurement contracts shall not be interpreted to restrict the
use of any electronic means of data interchange.
d) In consultation with the Chief of the Legal Services Section, the Chief of the
Procurement Section shall establish the texts of model contracts as required in view of
the varying categories and nature of the goods, constructions or services to be procured.
The texts shall be prepared before actual procurement proceedings commence. They shall
include, but not be limited to:
i. Contracts for facilities and services for a site survey;
ii. Contracts for the design, supply, integration, installation, testing, inspection and
commissioning of an IMS station;
iii. Contracts for testing and evaluation(T&E)/PCAs of an IMS station;
iv. Licence agreements for computer equipment and/or software;
v. Contracts for Minor Services;
vi. General Conditions of Contract;
vii. General Conditions for Goods, as applicable.
e) The Procurement Section normally shall include such texts in its Solicitation Documents
and in general be guided in its work by the established texts.
f) The Procurement Section will inform the Legal Services Section of any legal issues
raised by prospective contractors/bidders as early as possible and prior to the signing of
contracts/purchase orders, in accordance with the Memorandum of the Executive
Secretary to All Directors dated 1 April 2000 and as modified by the Memorandum of the
Executive Secretary to All Directors dated 11 October 2001 (attached to this
Procurement Manual as Annex II).
11.2 Standard Contract Elements
A contract usually includes the following parts:
1) Instrument of Agreement;
2) Special Conditions;
3) The CTBTO’s GCC for goods and/or services;
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4) A clear and complete description of the work, timelines and deliverables
(specifications, SOW, TOR).
1. Instrument of Agreement
a) Name and address of supplier. The parties contracted as well as the person authorized to
act on behalf of the contracted party including: name, address and contact details. In the
event that the contract is the result of a joint offer, the CTBTO will usually contract with
one entity which must always be the lead entity.
b) A clear and complete description of the work, timelines and deliverables (specifications,
TOR , SOW).
c) The quantity being provided.
d) Duration of the contract. Starting and completion dates, as well as milestones for
successful performance, must be precisely defined. Open-ended contracts must also
include a provision for termination.
e) Delivery date (applicable for goods).
f) A reference to the contract documents (i.e. Special Conditions, the CTBTO’s GCC,
forms that the bidder will complete and return to the CTBTO).
g) Schedule of activities (if applicable);
h) Contract or unit price and payment terms.
It is important to establish tangible indicators for payments, linked to milestones in
delivery of services or completion of works. As applicable the payment modality
(‘lump sum’ or ‘unit price’ contract) must also be stated.
‘Lump sum’ contract is used whenever it is possible to determine with sufficient
precision the quantity and scope of the goods/services/works required from the
contractor.
The ‘unit price’ contract must be used only when the nature of the services/
works/goods makes it impossible to determine with sufficient precision the quantity of
the services/works/goods required from the contractor. In this case, the contract sets a
maximum amount for both the total amount and the provision of each component of the
services (e.g. rate per work day, cost of each round trip etc.), and establishes the
applicable unit price. The maximum amount approved under the contract may not be
exceeded.
Contracts valid for a longer period (over 12 months) may contain price adjustments
linked to officially published price indices to cover changes in work rates. The increase
may also be estimated and incorporated as a fixed rate over the entire life of the
contract.
Major contracts for works shall include specific clauses for price escalation. However,
where possible it is strongly recommended to avoid using price escalation. Minor
contracts for works should not include price escalation functionality.
The final payment must always be based upon acceptance of documentation for
completion of services or works, or delivery of goods.
The standard payment terms for the CTBTO is 30 days net.
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i) Contracts for works and services must specify the name of key personnel, and their input
in terms of estimated person-days/weeks/months.
j) Conditions to be fulfilled, including the GCC of the CTBTO and implications of non-
delivery.
k) Terms of delivery and payment.
l) Reference to order of precedence of the documents forming part of the contract.
m) Other documents may be incorporated as necessary, e.g. offer, written records of bid
conferences, email/mail correspondence, etc.
2. Special Conditions
The inclusion of Special Conditions must be approved by the Legal Services Section. Special
Conditions can be incorporated in certain circumstances where changes and/or additions to the
CTBTO’s GCC are required. Special conditions should be included in the Solicitation
Documents. Special conditions may also be required post bidding as a result of the response
received from the bidder during the solicitation process.
3. The CTBTO’s General Conditions of Contract
The CTBTO has developed the GCC for goods and services/works (depending on the nature of
the procurement) which form part of the contractual agreement between the CTBTO and the
supplier. The GCC may not be changed. If modifications or additions are required, those shall
be made in the form of special conditions in consultation with the Legal Services Section.
Suppliers signing the CTBTO’s contracts automatically agree to abide by these conditions. The
GCC are either enclosed as an annex to the contract, or suppliers are referred to the CTBTO’s
website where the GCC are accessible. The GCC will form part of the contract.
In general, the CTBTO does not agree to the use of the general terms and conditions of the
other party. If the CTBTO is requested to do so, the Legal Services Section must be consulted
for advice.
4. Technical specifications, TOR, SOW, design documents and schedules for works
contracts
Technical specifications, TOR, SOW, design documents and other specifications are usually
attached as an annex to the contract, or their contents are included in the contractual document.
In the case of contracts for works, the technical specifications are explained and included in the
schedules of the contract. The schedules reflect the technical specifications that need to be
included, depending on the complexity of the contract and should include all necessary design
details, drawings, bills of quantities etc. Care must be taken that the content of the schedules is
consistent with the general and particular conditions of the contract. The schedules also contain
certain forms of agreements, guarantees and warranties. The number and content of the
schedules will vary depending on each of the contract types. The schedules also include
guidance notes detailing the information that needs to be inserted:
Technical specifications, TOR, SOW, budget (for cost reimbursable contracts), template for
performance securities, delivery requirements, etc.
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11.3 Types of Contracts
In accordance with FRR 11.5.08 and Administrative Directive No. 27 the most commonly used
contracts are:
a) Purchase order;
b) Contract for services/works;
c) Long Term Agreement/Framework Agreement (with Formal Request for Delivery
(FRD) or Work Orders).
11.3.1 Purchase orders
a) Internal purchase order for goods/services (generated from SAP)
Internal purchase orders are issued internally within the CTBTO to obligate funds
against contracts for future payment for goods or services provided under a contract and
are not sent to vendors. Thus, an internal purchase order is not a contractual instrument
with a vendor, but an internal CTBTO document solely used to obligate available funds.
b) Purchase orders for goods/services (generated from SAP)
i. A purchase order is a formal contract or order whereby the CTBTO accepts an offer
from a vendor to furnish goods and/or services. The issuance of a purchase order
obligates the available funds for the goods and/or services being procured against the
appropriate Budget Account Codes (BAC). The purchase order is sent to the supplier to
document the purchase of goods. Suppliers are required to send back an
acknowledgement copy of the order to establish acceptance of the contract. Purchase
orders are the most commonly used contract type and, compared to other contracts, are
a more simplified/standardized document. They should always include or refer to the
CTBTO’s GCC for goods or services. Purchase orders are normally used for purchases
with values below $70 000. Notwithstanding, it shall be the Procuring Entity’s
discretion, taking into account the best interests of the CTBTO, whether to use a
purchase order or a Standard Contract.
ii. A purchase order is generally used when the goods and/or services are clearly defined
or are presented in a ‛package deal’ or are ‛off the shelf’ type of products.
iii. If multiple types of goods, constructions or services are needed, or if the requirements
can best be met by different suppliers, separate requisitions for each type or group of
requirements should be raised. Upon receipt of a requisition, the assigned Procuring
Entity shall review it and determine the most appropriate contract format.
c) Low value purchases/miscellaneous purchase orders (generated from SAP)
Miscellaneous purchase orders are used for low-value purchases, currently fixed at under
$4 000. See “Guidelines for the Management of Low-Value Procurement at CTBTO”.
d) Priority 1 and 2 unscheduled maintenance under $30 000 (Urgent USM) purchase
orders (generated from SAP)
Urgent USM purchase orders are used for Priority 1 and 2 unscheduled maintenance
under $30 000 (see Section 6.9).
e) Formal Request for Delivery (FRD) (generated from SAP)
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The FRD is basically a simplified form of Purchase Order used to place orders under a
Framework/Call-Off Contract.
f) Purchase order for continuous contract (generated from SAP)
Purchase order for continuous contract is used to issue subsequent purchase orders under
Outline Agreements for PCA and T&E cases.
11.3.2 Contracts for services/works
a) Contract for Minor Services (available as a Standard Contract Template)
A Contract for Minor Services is a simple form of contract which is generally used for
contracting minor services such as training, clearing of vegetation from a site, etc. or
where a specific other form of contract is not applicable.
b) Equipment Support Services Contract (ESC) (available as a Standard Contract
Template)
An Equipment Support Services Contract is a type of LTA (also known as a framework
agreement, or call-off contract) that the CTBTO concludes with key suppliers of
radionuclide, seismic, infrasound or hydro acoustic equipment. These contracts are used
to maintain and upgrade systems already installed in the IMS network, and usually
include both fixed support services (such as on-call technical support, depot management
and obsolescence management) and on-request services (e.g. purchase of spare parts and
on-site maintenance and repair visits). Once an ESC is concluded, individual orders for
the goods and/or services included in the ESC are issued to the vendor through an FRD.
c) Framework/Call-Off Contract for Goods and Services (available as a Standard
Contract Template); with FRD (generated from SAP)
A framework/call-off contract for goods and services is an LTA/contract concluded with
one or more suppliers for the supply of goods/services to the CTBTO. Once the contract
is concluded, individual orders for the goods and/or services included in the contract are
issued to the vendor through an FRD.
An FRD is a call-off order issued against an existing LTA/framework agreement and
requires obligation of funds. FRDs are not subject to review and recommendation by the
Committee on Contracts, however, they require approval by the relevant Procuring Entity
as per Delegation of Procurement Authority.
Prior to signature and issuance of the FRD to the supplier, the Procuring Entity must
ensure that the instructions related to the applicability of the LTA/framework agreement
have been followed. In particular:
i. If the issuance of the FRD is the result of a secondary bidding exercise, the Procuring
Entity must ensure that the ceiling prices specified in the LTA/framework agreement
have not been exceeded;
ii. FRDs must state the details of the relevant LTA/framework agreement such as the
LTA/framework agreement reference number or other specifics that facilitate future
reference.
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A Work Order is a call-off order issued against an existing LTA/framework agreement
by the Substantive Section to the supplier and does not require obligation of funds as
the funds have already been obligated when establishing the call-off contract, or under
an FRD under the call-off contract.
d) Framework/Call-Off Contract for Minor Services (available as a Standard Contract
Template) with Work Orders (usually issued via email)
A framework/call-off contract with work orders for goods and services is an
LTA/contract concluded with one or more suppliers for the supply of goods/services to
the CTBTO and does not require obligation of funds as the funds have already been
obligated when establishing the call-off contract, or through an FRD under the call-off
contract. Once the contract is concluded, individual orders for the goods and/or services
included in the contract are issued by the staff from the Substantive Section to the
vendor through a work order (usually an email).
e) Installation/establishment of stations contract (available as a Standard Contract
Template)
Installation/establishment of stations contracts are used to contract vendors for goods
and/or services relevant for establishing a station. Goods and/or services to be provided
by the contractor for the performance of the work may include, but are not limited to:
i. The design, drawings, technical specifications, site preparation and construction, supply
and installation of the contractor’s equipment;
ii. Spare parts and supplies;
iii. Installation of the CTBTO’s equipment;
iv. Provision of installation support to the CTBTO and the CTBTO’s equipment suppliers.
f) Types of Testing and Evaluation (T&E) and Post Certification Activities (PCA)
Contracts
Note: Special procedures for T&E and PCA activities will be set out in a separate
document.
i. T&E and PCA Contract: Operation and Maintenance of IMS Stations (available as
a Standard Contract Template)
T&E and PCA contracts are concluded to engage a designated national authority or
institute (or in rare cases, a contractor sourced through a competitive bidding process)
for each IMS station to operate and maintain the station after the installation and initial
testing is complete. T&E and PCA contracts are
“evergreen”, and do not expire unless either party notifies of the intent to terminate.
Variations may occur in the form of a contract for T&E only or PCA only, depending
on whether PCA or T&E is explicitly not foreseen under the contract. The model
contract remains the same.
NOTE: T&E and PCA contracts are only concluded for Primary Seismic, Infrasound,
Hydroacoustic and Radionuclide stations including noble gas systems. Auxiliary
Seismic stations are not brought under T&E/PCA contract, and the contractual modality
for Radionuclide Laboratories is described under point 2 herein below.
ii. PCAs, Radionuclide Sample Analysis of Air Filter Samples by Gamma
Spectrometry (available as a Standard Contract Template)
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A PCA contract for IMS Radionuclide Laboratories. Services at IMS Radionuclide
Laboratories are only contracted under this mechanism at certification. The structure
differs greatly from normal T&E/PCA contracts.
iii. Provisional PCA as a Task under an Establishment of IMS Stations Contract
(available as a Standard Contract Template)
When no T&E and/or PCA contract can be concluded with the designated Station
Operator, the contractor may agree to extend the initial testing phase to a “provisional
PCA” task under the establishment/installation contract.
iv. Radionuclide Laboratory Certification Agreement (available as a Standard Contract
Template)
This is an agreement which is put into place to cover the costs required for the Operator
to upgrade the Radionuclide Laboratory and Noble Gas Technology to certifiable
standards. It consists of a one-time lump sum payment up to a ceiling of $190 000.
g) Major works contracts
For major works contracts, it is recommended to use a FIDIC contract to define the
relationship between the CTBTO and the works contractor. These contracts are designed
to allocate risks to the party best suited to owning and managing that risk. The Procuring
Entity must collaborate with the Legal Services Section to determine the best contract for
the particular work.
The following are examples of FIDIC Conditions of Contract:
Consultant Services Contract for Works (White Book);
Minor Works Construction Contract (Green Book);
Short Form Construction Contract (Green Book);
Measured Price Construction Contract (Red Book);
Lump Sum Construction Contract (Red Book);
Design and Build Construction Contract (Yellow Book).
Selecting the correct contract up front is critical as it will frame the backbone of all other
activities – design, standards and quality, supervision and how the handover and defect
period is handled.
The contract will inform the project milestones and generate much of the information that
will be required to plan and manage the project. It governs the financial practices of the
works including advances, bonds, payments, assurances and guarantees.
Each form of contract apportions risk to each party in a particular manner. As such, the
development of the appropriate procurement strategy that selects the form of contract
should be risk-based in nature and consider the balance of risk shared between the Parties
to the Contract. Some default monetary thresholds have been defined to guide but may
not always be the most appropriate, i.e. it is important to choose the contract based on the
well-defined requirements and complexities of the works, and considering other factors,
such as risk, expected contractor capacity, contractors’ familiarity with such contracts,
the CTBTO’s own project capacity and standard practice in the given location.
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11.3.3 LTAs/Framework Agreement
An LTA/framework agreement is a written agreement between the CTBTO and a supplier
setting out all the commercial terms applicable to the orders that may be issued against the
LTA/framework agreement for pre-selected goods or services i.e., pricing, discounts, payment,
delivery and packaging and any other relevant special terms as well as the general terms and
conditions.
LTA/framework agreements are established for a defined period of time and with no legal
obligation to order any minimum or maximum quantity and are used to safeguard a reliable
source of supply for goods and services at a competitive price.
Since procurement through LTAs/framework agreements is a very efficient way to carry out
procurement, all Procuring Entities must keep abreast of existing LTAs/framework agreements
and assess if an LTA/framework agreement could be used for their requirements.
The CTBTO has established a number of LTAs/framework agreements covering a wide range
of requirements. Particular care must be taken to comply with the instructions for each
LTA/framework agreement as the basis for establishment of LTAs/framework agreements
varies.
11.3.3.1 Benefits and risks of establishing LTAs/framework agreements
There are a number of benefits and risks associated with using LTAs/framework agreements,
inclusive of the following:
a) Benefits
Competitive prices: aggregating the volume over the life of the LTA/framework
agreement may lead to lower prices for some types of goods/services based on the
principle of economies of scale.
Simplified business process leading to reduced transaction cost: an
LTA/framework agreement established by a single selection process allows FRDs
at any time during the life of the LTA/framework agreement, thus avoiding the
time and resources needed for repetitive procurement actions, for the same set of
goods or services.
Consistency in quality and reliability of source of supply: by having established
quality standards in the LTA/framework agreement, the time spent on inspection
and possibility of rejection of goods/outputs are reduced.
Standardization of requirements: promotes standardization of requirements which
could contribute to reduction in operation and maintenance costs and other
efficiencies.
Reduced delivery lead time: as many aspects are pre-agreed and specified in the
LTA/framework agreement, the lead time between the FRD and delivery is
significantly shortened and this is particularly relevant during emergencies.
LTAs/framework agreements are particularly useful for goods that can be stocked,
or services set up for immediate mobilization and delivery.
b) Risks
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When LTAs/framework agreements are not set-up, used or managed properly, they
may not necessarily represent value for money, may reduce supply sources and expose
the CTBTO to risks such as:
Dependency on vendors: extensions beyond the initially established duration could
lead to unhealthy relationships or monopolistic behavior, perception of preference
or collusion among suppliers resulting in uncompetitive prices, thus diminishing
quality of service and creation of barriers to entry for other vendors;
If the requirement is for fixed prices over the entire life of the LTA/framework
agreement, it may not be advantageous for the CTBTO if prices go down during
the LTA/FA period;
Because of their long-term nature, LTAs/framework agreements could cease being
the source of the best value for money or representing the optimal solution, such as
when new market players and/or better solutions enter the market over the life of
the LTA/framework agreement, and/or when there are technological improvements
and/or falling prices, thereby undermining the benefits offered by the
LTA/framework agreement.
When LTAs/framework agreements are used for larger volumes than originally
estimated when they were set up, they may not represent the best value for money
if the goods/services lead to volume discounts that are not factored into the
LTAs/framework agreements.
11.3.3.2 Types of LTAs/framework agreements
There are three main types of LTAs/FAs set-up at the CTBTO:
1. Single vendor LTAs/framework agreements: one vendor supplying the total
requirements for a given type of goods/services;
2. Multiple vendor LTAs/framework agreements without secondary bidding: two or
more vendors supplying the same requirements.
The benefits of having multiple vendor LTAs/framework agreements include the
following:
Minimization of the risk of overdependence on one supplier;
Availability of different options for the goods/services;
Ability to secure supplies at times of high demand through several sources;
Inclusion of vendors from different geographical locations closer to the end user
may result in reduction in landed costs, shorter transit time, the ability to provide
after sales service and support of the goods or provision of the services at the
specified location, etc.
Whenever there is an established LTA/framework agreement with different suppliers
for the same product or services, the Procuring Entity shall ensure that the
LTA/framework agreement which best suits the specific requirement in the respective
area of operations is selected. The reasons for selecting a specific LTA/framework
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agreement for the issuance of FRD shall be in accordance with the pre-determined
methodology for selection.
3. Multiple Vendor LTAs/framework agreements with secondary bidding.
Two or more vendors supplying similar or identical requirements, and the final
placement of each FRD is determined through a secondary bidding process in
accordance with the framework set up in the agreement. Other aspects, such as supplier
capacity, delivery time and mobilization time at the time of request, may also be subject
to a secondary bidding process.
11.3.3.3 Establishment of new LTAs/framework agreements
The possible need for an LTA/framework agreement shall be considered during the
procurement planning stage. If there is an ongoing need for standard services or products, or
the need for emergency supplies on a recurring basis, consideration should be given to
establishing an LTA/framework agreement.
As an LTA/framework agreement is created for a long duration and requires both upfront and
long-term resources and expertise to set up and manage effectively, the following elements
should be taken into consideration when setting up an LTA/framework agreement:
Description of goods/services required;
Type of LTAs/framework agreements and geographical coverage;
Past spend data in the category and planned spend;
Expected duration of the LTA/framework agreement;
Price adjustment method, if any;
Expected benefits and risks of the LTA/framework agreement;
Results of market research: number of potential vendors, location, etc.;
Procurement strategy: solicitation method, type of competition;
Procurement process timelines;
Allocated staff for the procurement process and for contract management.
When establishing an LTA/framework agreement further to formal methods of solicitation, the
tender document must be clear on the following points: type of LTA/framework agreement and
geographical coverage; duration; price adjustment methods (if applicable); and the award
methodology, especially when it is expected to award more than one vendor.
11.3.3.4 Duration of LTAs/framework agreements
LTAs/framework agreements are typically valid for a period of one to five years.
LTAs/framework agreements may be extended for an additional period of up to 24 months, if
provided for in the contract and subject to satisfactory supplier performance (to be documented
in a supplier performance evaluation, see Section 13.2 Vendor Performance Evaluation) and
continued requirement of the goods and services covered, and if the prices offered are within
the current market range. The cost of items such as IT equipment often falls over time and it
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might not be in the best interest of the CTBTO to extend such an agreement. LTAs/framework
agreements may include a price adjustment mechanism, which must be considered in the
procurement planning phase, specified in the original solicitation document and included in the
LTA/framework agreement.
11.3.3.5 Usage of other UN entities’ LTAs/framework agreements
Please refer to Section 14.1.3 UN entity long term agreements.
11.4 Types of contracts based on payment
The most common types of contracts provide for payments on the basis of:
a) Firm fixed price, such as lump sum contracts;
b) Time and material contracts;
c) Cost reimbursement contracts;
d) Combinations thereof.
a) Lump sum contracts
With a lump sum contract, the supplier agrees to perform the work for a fixed lump sum
price, regardless of the ultimate cost, which minimizes the risks for the CTBTO. These
contracts are used mainly for assignments in which the content and the duration of the
services and the required output of the supplier are clearly defined. They are also used for
simple planning and feasibility studies, environmental studies, detailed design of
standard or common structures, preparation of data processing systems, provision of
services with clear milestones, etc. Payments are linked to outputs (deliverables or
milestones), such as reports, drawings, bills of quantities, completion of specific
activities or outputs etc. These contracts are easy to administer because payments are due
upon completion of clearly specified outputs. It is recommended that a detailed scope of
services or bills of quantities be defined.
b) Time and material contracts
A time and material contract is one in which the supplier agrees to supply
goods/services/works at fixed unit prices/rates and the final price is dependent on the
quantities needed to carry out the work. Large quantity changes can lead to decreases or
increases in unit prices/rates. This type of contract is suitable when it is not possible, due
to the nature of the goods/services/works, to determine with sufficient precision the
quantity of goods/services/works required from the supplier. In this case the CTBTO and
the supplier share the risk concerning time and cost. The CTBTO carries the risk of the
final total quantities, i.e., the final cost is not known as the total quantities are not known
from the outset, and the supplier carries the risk of the fixed unit price/rate.
c) Cost-reimbursement contracts
Cost-reimbursement contracts are recommended only in exceptional circumstances such
as conditions of high risk or where costs cannot be determined in advance with sufficient
accuracy. Such contracts should include appropriate incentives to limit cost, e.g., not-to-
exceed a ceiling price. The CTBTO should closely monitor and manage the contract.
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11.5 Contract discussions with vendors
The purpose is to clarify any remaining issues that are not defined by the requirements in the
Solicitation Documents, or by the vendor’s offer, but which are essential for proper
implementation of the contract (e.g. defining milestone payments against deliverables).
Contract discussions should result in a clear understanding of terms and conditions agreed by
the parties and their respective responsibilities under the contract.
Certain key areas (for example detailed delivery plan, milestones, payment schedule, and in
certain cases, etc.) may form part of the contract discussions.
No negotiations concerning the CTBTO’s GCC should take place following contract award as
the modification of certain provisions (e.g. limitation of liability, insurance, etc.) may
disadvantage other bidders and expose the CTBTO to the receipt of bid complaints. If the
bidder has not recorded any reservations regarding the CTBTO’s GCC in its offer, the CTBTO
may choose not to enter into negotiations on contract terms proposed by that bidder, if selected.
11.6 Advance payments
a) An advance payment is a sum of money paid to the supplier upon signature of the
contract, in anticipation of identified early expenses. Usually the CTBTO does not
provide advance payments. However, in accordance with Financial Rule 11.1.17, when
standard commercial practices or the interests of the Secretariat so require, contracts or
purchase orders may exceptionally be issued which provide for payment or deposits in
advance of the receipt of goods or the performance of services or the submission of
shipping documents.
b) The Director of Administration has pre-approved a list of items for which advance
payments can be made. Refer to Annex V: Approval for Specified Advance Payments,
Memorandum ADM/OD/O/Memo 25/FB7/11 dated 27 July 2011). All other advance
payments shall be approved by the Director of Administration.
c) If a common practice of advance payments exists in the industry/sector, an advance
payment may be justified.
Examples of specific activities that may justify an advance payment are:
i. Mobilization costs (mainly for construction works), such as purchase/lease of
equipment/materials/ machines and/or transfer of same to the project site. The
maximum amount of advance payment for mobilization should normally not exceed
10% of the total contract value, unless other factors are involved and justified by the
bidder. Any request from the vendor for advance payment shall be justified in writing
by the vendor in its offer. This justification must explain the need for the advance
payment, itemize the amount requested, and provide a time schedule for utilization of
the requested advance payment amount;
ii. Start-up costs (mainly for services), i.e. purchase of airline tickets, down payments for
rental/purchase of office premises/equipment on project site;
iii. Design or design adaptation costs, related to goods/machines that require design and
manufacturing from scratch and/or where no production lines exist;
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iv. Payment of lease (premises), payment of water/gas/electricity, etc.
d) Whenever an advance payment is agreed, the reasons therefore shall be justified in
writing.
11.7 Performance securities
Performance securities can be requested by the CTBTO from the selected vendor in order to
mitigate the risk of supplier non-performance and breach of contractual obligations. Securities
and guarantees are normally issued in the form of an unconditional and irrevocable on-demand
bank guarantee. This should be specified in the Solicitation Documents. Refer to Section 6.5.2
(21) for details.
If a performance security is required, the vendor shall provide a security for performance of the
contract within a specified period of time of contract signature, in an amount which usually
corresponds with a percentage of the total contract value (normally 5-10%). The proceeds of
the security (an established amount) shall become payable to the CTBTO in the event of the
supplier’s failure to perform.
The performance security shall be returned by the CTBTO to the supplier within the stipulated
time frame after successful contract completion.
11.8 Review and handling of performance securities
Bank guarantees and securities
Bank guarantees received by the CTBTO must be reviewed upon receipt (and before
disbursement of the advance payment, if applicable) for authenticity.
At a minimum the following must be checked:
A definition of the parties involved: Principal, Issuing Bank and Beneficiary;
A reference to the underlying contract;
The guarantee amount: the maximum amount payable and the currency in which it is
payable;
The period of validity;
Documentation: any demand for payment under the guarantee should be in writing and
in addition to other documents which may be specified in the guarantee;
Effective Clause: a guarantee enters into effect on the date of issuance unless the terms
of the guarantee expressly provide that such entry into effect is to be at a later date or is
subject to conditions specified in the guarantee and determinable by the guarantor. In
Advance Payment Guarantees, there should be a condition that allows for the guarantee
to come into effect when the advance payment has been received by the
Principal/Applicant;
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Conditions for a Bank Guarantee Exercise, in particular: disbursement upon initial
request (initially) without any objections; being irrevocable; being unconditional; being
non-transferable;
Information that a partial and multiple fulfilment is allowed, up to the maximum
amount of the sum guaranteed;
There are no unauthorized provisions;
The guarantee is signed by authorized signatories.
Bank guarantees, e.g. bid security, performance security or advance payment security, are
original documents that can be cashed and will ultimately be returned to the bidder (unless the
CTBTO decides to encash them). As such, they must be kept in a safe place and extreme care
must be taken when handling and filing them.
The validity of bank guarantees shall be tracked to ensure that the relevant stakeholders are
aware of the expiry date of the securities.
Chapter 11 Resources
Templates CTBTO’s General Conditions Of Contract
CTBTO’s General Conditions For Goods
Purchase Orders (generated in SAP)
Model Contract For Minor Services
(Please contact the Procurement Section for access to this document.)
Equipment Support Services Contract (ESC)
(Please contact the Procurement Section for access to this document.)
Call–Off Contract
(Please contact the Procurement Section for access to this document.)
Testing And Evaluation Contract: Operation And Maintenance Of IMS
Stations Prior To Certification
(Please contact the Procurement Section for access to this document.)
Post-Certification Activities Contract: Operation And Maintenance Of
IMS Stations After Certification
(Please contact the Procurement Section for access to this document.)
Testing And Evaluation And Post-Certification Activities Contract
(Please contact the Procurement Section for access to this document.)
Post-Certification Activities, Radionuclide Sample Analysis Of Air Filter
Samples By Gamma Spectrometry
(Please contact the Procurement Section for access to this document.)
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Provisional PCA As A Task Under An Establishment Of IMS Stations
Contract
(Please contact the Procurement Section for access to this document.)
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Radionuclide Laboratory Certification Agreement
(Please contact the Procurement Section for access to this document.)
Major Works Contracts (To Be Based On FIDIC Model Contract)
(Please contact the Procurement Section for access to this document.)
Guidelines Guidelines For The Management Of Low-Value Procurement At CTBTO
(Please contact the Procurement Section for access to this document.)
Approval For Specified Advance Payments, Memorandum
ADM/OD/O/Memo 25/FB7/11 Dated 27 July 2011). (See Annex V in this
document.)
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CHAPTER 12: LOGISTICS
Logistics is the part of the supply chain process that plans, implements, and controls the
efficient, effective flow and storage of goods, services, and related information from the point
of origin to the point of consumption in order to meet customers’ requirements. This chapter
provides only a summary of logistics seen from a procurement perspective.
12.1 Overview
12.1.1 Logistics planning process
Logistics planning entails considering logistical aspects throughout the various stages of the
procurement process. It contributes to efficient procurement processes and reduces the risk of
incurring problems that may lead to additional costs and delay. There are many aspects of
logistics planning inclusive of the below that should be considered during the various stages of
the procurement process.
i. Understanding the operational context of the required product and, if possible, assisting
in developing specifications suitable to local conditions.
ii. Evaluating the procurement activity and the time and financial resources available in
order to determine urgency of the requirement. Urgency may determine location of the
purchase and thereby also the mode of transport.
iii. Determining the type of sourcing.
When determining the type of sourcing, the Procuring Entity needs to decide if the
goods should be purchased locally/regionally or internationally, or through established
LTAs/framework agreements. These options should also be considered when
determining how and where to purchase the required product in order to meet the end
user’s needs in a timely and cost efficient manner.
iv. Determining which markets are best positioned to respond to the end user’s delivery
requirements.
v. Deciding which markets are best positioned to respond to the end user’s delivery
requirements by evaluating total delivered costs and lead times in conformity with
technical and performance criteria. For example, equipment from one region is not
necessarily the most suitable for another region, even though it may be competitively
priced. There is usually a trade-off between the purchase price of a product and its
transport costs and delivery lead-time. The relative importance of these factors will
determine where the goods are purchased and how they are transported. It should be
noted that geographic distance does not necessarily determine the cost and delivery
time.
vi. Acceptance of a more expensive offer in order to conform to the requested delivery date
should be carefully assessed and discussed with the requisitioner and end user in order
to ensure the most effective use of funds. When the delivery date is the primary factor
in awarding a contract and made a mandatory evaluation criterion, it should be clearly
stated in the Solicitation Document. In such a case, any offer not in compliance with the
requested delivery schedule must be rejected.
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vii. Reviewing the delivery and transport requirements, as well as the budget, and ensuring
that they are complete and realistic.
viii. The cost of transportation is a significant component in the cost of goods procured and
delivered to the designated site. Procuring Entities should therefore ensure proper
logistics planning and make every effort to keep the transportation costs down.
However, in logistics planning, the cheapest alternative may not always be the one that
offers the lowest overall cost. A low-cost, but poor delivery strategy may result in
delays, damaged or stolen goods, excessive port charges, etc. All factors should
therefore be assessed when choosing the appropriate logistical solution.
ix. Ensuring the completeness and accuracy of shipping documents received from the
supplier and the freight forwarder and that the consignee has received its set of
documents (see Section 12.3.2 Shipping documents). Include in your procurement
planning any special import or export restrictions and/or regulations (e.g. pre- shipment
inspection, special dangerous goods packing).
12.1.2 Logistics requirements for goods
The following logistical requirements should be considered for the shipment of goods:
Packing requirements;
Labelling and shipping marks;
Modes of transportation;
Routes and frequency of means of transport;
Freight forwarders;
Incoterms;
Cargo insurance;
Shipping documents;
Receipt of consignment;
Demurrage/storage/parking charges days;
Off-loading at destination;
Special import/export restrictions for the countries of origin and destination;
The possible existence of a facility agreement in force between the CTBTO and a
Member State must be taken into consideration and applied accordingly in any
shipment (see Legal Agreements).
12.2 Packing and labelling
Packing and labelling should be undertaken, taking into consideration the nature of the goods,
the mode of shipment, the climatic conditions (cold, rain, humidity, mould, dust, salt water
spray, etc.) during shipment and the applicable local legislation. Consideration must also be
given to the durability, size and weight of the packages. It is reasonable to assume that
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shipments will be handled roughly, and be loaded and offloaded numerous times before
reaching the final destination. It is therefore imperative to ensure that the involved equipment
and warehouse facilities, operators and labourers all have the capacity to handle the goods in
the chosen packaging, e.g. not all port facilities can handle 20 ft. containers.
Packing and shipping instructions should specify how goods are to be packed and shipped, and
the person/consignee to notify upon shipment. All documents required for customs clearance
and for payment purposes should be listed. Packing and shipping instructions must be attached
as an annex to all purchase orders, and include the packing and shipping instructions specific to
the Incoterm used (see Section 12.3.3 Incoterms).
To facilitate the identification of goods and handling during shipment, suppliers should be
instructed to provide clear and complete labelling and shipping marks on all packages. At a
minimum, the labelling and shipping marks should include:
• Consignee;
• Destination;
• Port of unloading;
• Project identification;
• The CTBTO’s order number;
• Case number;
Any special handling instructions (e.g. fragile, this end up, etc.).
Additionally, goods need to be labelled with any special requirements, such as dangerous
goods, temperature-sensitive cargo, etc.
Where possible, packing and shipping instructions can contain requirements on more
sustainable packaging solutions, such as:
Percentages of recyclable packaging content, with plastic parts heavier than 25g
identified according to ISO11469 by material type;
Percentages of recycled packaging content;
Take-back or reusable packaging options;
Packaging not containing PVC;
Heavy metals not intentionally added to any packaging or packaging component.
12.3 Shipping and Transportation
12.3.1 Transport modes
There are four basic modes of freight transportation that are used, either individually or in
combination: sea, rail, road, and air.
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In selecting the appropriate method of shipment, various aspects including urgency/time
element, nature of the goods/type of supplies, cost, safety/need for cautious handling, weight
and volume, value of the goods, frequency/regularity of delivery and reliability of the method
should be considered.
In general, air, rail and road transport costs are comparatively higher than freight by sea, thus
in general sea transport is recommended. The balance of operational parameters such as time
and financial resources should determine the mode of transportation.
Except for emergencies, or where the top priority is the delivery of supplies within the shortest
possible time, procurement should be made to allow dispatch by the most economical/rational
means. It is therefore of great importance that supply programmes are planned with shipping in
mind to avoid expensive rush shipments or purchasing from a source that is not especially
rational when shipping time is factored in.
There is no rule to indicate the percentage cost of transportation as compared to the value of
supplies. Except for clear cases where only air or surface can be selected, airfreight should
automatically be compared to surface. Small and medium-sized consignments can often be sent
at approximately the same cost by air as surface, in particular when transhipment and on-
forwarding would be required in surface transport. A golden rule: group small orders for joint
shipment, as repeated small dispatches become very expensive, especially when the cost of
customs clearing the goods is added.
Origin and destination determine distance and therefore type of transportation required. Surface
shipment may be logical in certain cases, while airfreight might otherwise be required. Related
factors include transport infrastructure, safety, security, weather conditions, etc.
Fragile/sensitive high-valued equipment is best sent by air, even if there is no special urgency
in its dispatch. In the same manner, cargo at risk of being pilfered, which is shipped by sea
should be containerized, such as automotive spare parts, office machinery and stationery, etc.
Shipping costs are usually calculated on the basis of gross weight in kilograms or pounds.
Rule of thumb:
• Relatively high value/volume: use air freight;
• Relatively low value/volume: use sea freight.
In summary, Procuring Entities should prioritize transport preferences in accordance with the
following criteria:
Cheapest means of transport that meets delivery requirements;
Scheduling through the fewest number of trans-shipment points;
Shipping via preferred trans-shipment points and customs;
Using dedicated freight forwarders wherever possible;
Applying a 1:4 ratio rule for air shipment (ship by air if less than 25% of cost of goods);
Shipping by air if weight is less than 200 kg;
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Shipping by air when a cold chain is required;
Shipping by land or sea if dangerous goods are involved.
Finally, Procuring Entities should make a prioritized list of all technically feasible solutions. If
a priority solution falls within the predefined budgetary framework, the plan should be
executed. If the best solutions fall outside the framework or if no solution is feasible, the
Procuring Entity should present the existing options to the requesting operational unit and ask
for a decision.
12.3.2 Shipping documents
Shipping documents are required for each stage of the shipment and they must be prepared
accurately as they are of critical importance for the timely delivery of goods. The supplier
requires the relevant documents in order to dispatch the order from its premises and to receive
payment from the buyer. The freight forwarder requires documents to manage the contract for
shipping. The consignee requires documents to claim the goods at arrival. The consignee or
notifying party requires documents to facilitate customs clearance.
The exact contents of a set of shipping documents depend on the type of goods being shipped,
the means of transport, who is shipping the goods (freight forwarder, supplier, etc.), and any
special requirements of the receiving country.
Shipping documents should include information on the contents of the shipment, weight and
volume of contents, origin of goods (if required), price of the goods and evidence of transport
of the goods.
Particularly relating to the CTBTO, Donation Letters may be required for the shipment to
countries hosting IMS facilities.
12.3.3 Incoterms 2010
Incoterms are standard terms defining the obligations of both the buyer and seller relating to
the shipment of goods. They are used worldwide in both international and local trading and
contribute greatly towards eliminating causes of disagreement.
The Incoterms 2010 explain a set of three-letter trade terms reflecting business-to-business
practice in contracts for the sale of goods. The Incoterms rules describe mainly the tasks, costs
and risks involved in the delivery of goods from sellers to buyers. Incoterms have been
established by the International Chamber of Commerce (ICC). The ICC reviews Incoterms
every ten years to ensure they are appropriate and contemporary. The “ICC Guide to Incoterms
2010” explains how Incoterms 2010 work in daily practice and provides practical answers to
important and recurring questions. Further information can be found in different formats and
languages on the ICC website at www.iccwbo.org.
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The most commonly used terminology is outlined below:
Incoterms apply only if incorporated in the contract of sale or if they are, for example,
mentioned in the offer, the sales conditions, the purchase order, the confirmation of an order, or
if they are stipulated by the parties in a separate agreement.
Incoterms have to be understood as part of the sales contract. The scope of Incoterms is limited
to matters relating to the rights and obligations of the parties to the contract of sale (seller and
buyer) with respect to the delivery of goods sold, in particular questions of delivery,
documents, transfer of risk from seller to buyer and division of costs between seller and buyer.
All questions relating to the transfer of ownership, property rights of the goods, breaches of
contract and its consequences, exclusions of liabilities in certain circumstances, limitation
periods and conditions of payment should be handled in accordance with CTBTO’s model
contract and GCC.
12.3.4 Forwarding agents
Forwarding agents, also known as freight forwarders or freight brokers, are contracted by the
CTBTO or the supplier to carry out the formalities and operations of consignment. In certain
circumstances, the forwarding agent can also be employed by the CTBTO to receive goods in
order to engage in the prompt clearance and collection of goods. The use of an appropriate
freight forwarder with experience and specialized knowledge reduces the risk of the
procurement operation.
When a consignment is delivered to the consignee, it is common practice for the carrier to
request a receipt. At the same time, the consignee should perform an inspection of packages
against all shipping documents. If the shipment is in apparent good order, it is recommended
that an endorsement be given (e.g., “received in good external condition – contents
unchecked”). If, however, signs of tampering are visible, the receipt should state necessary
reservations (e.g., “cases broken”, “contents lacking”, “cartons opened with signs of
pilferage”). Where possible, packages should be weighed to determine differences between
declared and actual weights, documenting any discrepancies on the delivery notes.
Insurance normally extends its coverage to include a period from 30 to 60 days in storage at
destination. There can be ambiguities here as sometimes it means days in warehouse at
destination to allow clearance and collection and/or stopping after delivery to site, or it means
days at site after delivery has taken place. If this is not clear from the documents in hand or not
clearly understood in a standing arrangement, then it should be clarified with the party who
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negotiated the coverage. Even if the coverage includes 60 days at site, it is always preferable to
check supplies as soon as possible after delivery has taken place. Carriers and/or suppliers may
be involved in a claim, but they are not party to the 60-day agreement. It always weakens the
case when a claim is submitted with a delay.
In summary:
• Forwarding agents experienced in local conditions of the country can assist with
arranging retrieval/customs clearance/onward forwarding;
• Timely inspection of goods received is important;
• Proper documentation and reporting of damages or missing consignments, if any, is
important (See Section12.6.1: Restrictions on the Export or Import of Goods).
12.4 Insurance
Since all cargo is vulnerable to a range of risks, such as damage, pilferage and theft, breakage,
non-receipt of part of, or an entire consignment, it is important to ensure that the cargo is
insured.
Cargo insurance provides protection against potential financial losses resulting from such risks.
It is important to ensure protection for goods subject to risks, including war, strikes, riots and
civil commotion. Further, the duration of insurance coverage should be sufficient for the period
of transportation, from warehouse to warehouse, including storage at the destination site.
Goods are insured for the cost, insurance and freight value plus an agreed percentage to reflect
the indirect cost of replacing goods.
Clause 4 of the CTBTO’s GCC addresses the issue of insurance stating that “(a) All Goods
shall be fully insured in a currency acceptable to the CTBTO, against lost or damage incidental
to manufacture or acquisition, transportation, storage and delivery. It shall cover 110% of the
cost of the Goods, and from the date and place of shipment to the date and place of delivery,
unless otherwise specified in the Purchase Order. (b) The Seller shall arrange and pay for the
insurance, naming the CTBTO and the Seller as beneficiaries.”
12.5 Receipt, Inspection and Return
Upon delivery of a consignment, it is common practice for the carrier to request a receipt. At
the same time, the consignee should perform an inspection of packages against all shipping
documents in order to confirm that the goods are in accordance with the order and there are no
damages, defects, or discrepancies.
The contract should ensure that the supplier is responsible for rectifying the defective goods at
its own cost. It should also ensure that the CTBTO has the right to have the defective goods
repaired or replaced at the expense of the supplier if the supplier fails to act under the warranty
provision within a specified period of time. Unless there is an explicit statement in the contract,
the supplier may decline paying for the cost of shipment when returning the goods for repair.
When considering any contract remedy, seeking feedback from the supplier is prudent. As a
good business practice, the supplier should be given the opportunity to provide evidence
against pursuing the remedy. That evidence might point to an excusable delay or impossibility
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of performance. Such evidence can lead to a remedy that is fair and just for both the CTBTO
and the supplier.
12.6 Other aspects of Logistics
12.6.1 Restrictions on the export or import of goods
Exporting countries may restrict the shipment of certain classes of goods to certain countries or
ban their export altogether. Equipment that has a dual civilian/military use or high-end
computer and telecommunications technology are commonly restricted.
Importing countries may also impose restrictions. Telecommunications typically require prior
authorization from the concerned ministry that will issue a licence. Other equipment, such as
used vehicles older than a certain age, may also be banned. Some countries ban goods of
certain origins for political reasons. Obtaining permits can be difficult sometimes.
The receiving office must confirm that the relevant permit is in hand before the supplier is
authorized to ship the goods. Shipping without a permit may result in payment for storage in
the port until the import authorization is granted. There is also the risk that the cargo could be
stolen or deteriorate during this period.
There are also UN restrictions applicable to some countries. For more information, please refer
to the UN Committee on Sanctions https://www.un.org/sc/suborg/en/sanctions/un-sc-
consolidated-list.
12.6.2 Management of shipment for the CTBTO
As shown below shipping activities are managed by different sections/entities within the
CTBTO.
1. Procuring Entities in the Procurement Section
Contracts inclusive of FRD are issued requesting the vendor supplying the goods to take
care of the shipment.
a) Considerations for shipment to the IMS facilities;
b) Is there a Facility Agreement in place and in force?
c) Use of UNDP services
In some countries the CTBTO may rely on UNDP for support related to import, export,
customs and tax issues. For shipments to IMS facilities IMS/Monitoring Facilities
Support Section maintains knowledge regarding countries for which the use of UNDP
services is recommended.
2. Administration/General Services Unit
The Head of the General Services Unit and Clerks and Senior Travel Assistants in the
General Services Unit are responsible for issuing contracts with moving companies (as
provided for in Administrative Directive No. 67), contracts for shipment of verification
equipment not exceeding $150 000, and contracts for transportation and accommodation
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related to CTBTO sponsored events and/or participants (as provided for in
Administrative Directive No. 46).
3. Allotment Managers, Certifying Officers and Substantive Officers
With respect to contracts for goods, constructions or services that do not exceed $4000,
excluding value added tax (VAT), Allotment Managers, Certifying Officers and
Substantive Officers may also become the duly authorized Procuring Entities as
delegated by the Executive Secretary. Contracts are issued requesting the vendor
supplying the goods to take care of the shipment.
Chapter 12 Resources
Useful
Resources
INCOTERMS
International Chamber Of Commerce
Consolidated United Nations Security Council Sanctions List
CTBTO’s Legal Agreements
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CHAPTER 13: CONTRACT MANAGEMENT
13.1 Overview
The two terms “contract management” and “contract administration” are often used
synonymously. However, “contract management” is commonly understood as a broader and
more strategic concept that covers the whole procurement cycle including planning, formation,
execution, administration and closeout of a contract and goes beyond the day-to-day
“administrative” activities in the procurement cycle.
Contract management includes managing the relationship between the supplier, the Procuring
Entity, the requisitioner and/or the end-user, as well as providing feedback to the supplier
regarding its performance and dispute resolution, if necessary.
Contract administration includes administrative actions undertaken after the award of a contract
such as contract amendment, closure, maintenance of the contract file and record retention, and
the handling of security instruments (e.g., performance security).
The purpose of contract management is to ensure that all parties to the contract fully meet their
respective obligations as efficiently and effectively as possible, delivering the business and
operational outputs required from the contract and providing value for money. It is based on
the idea that the contract is an agreement, a partnership with rights and obligations that must be
met by both sides to achieve the goal. It is also aimed at identifying problems and finding
solutions together.
Contract management is similar to project management as each contract can be considered as a
mini-project. It has a unique goal, consumes resources, has a beginning and end date, requires
coordination and planning of relevant activities, monitoring as well as documentation in a
contract file throughout the process. Contract management includes documenting performance.
Daily or regular monitoring of the contract is primarily the responsibility of the requesting
section and therefore all requisitioners should be trained to undertake this function.
13.1.1 Process Management
a) The Procurement Section is responsible for ensuring that a copy of the countersigned
contract is provided to the Substantive Section.
b) The Substantive Section shall manage the contract and shall inform the Procurement
Section of any contract management issues that should be formally communicated by the
Procurement Section to the contractor.
c) The nature and extent of the contract management activities shall depend on the value and
complexity of each contract. In the case of low value contracts for goods or contracts for
equipment only, monitoring activities will be of a less extensive nature.
d) Where contracts are of high value, complex, or have a long duration, a more comprehensive
approach to contract management shall be undertaken and the Substantive Section shall
form a contract management team comprising of the subject matter expert/s from the
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requesting unit and/or the end user, in collaboration with the supplier, to establish and
undertake the contract management activities; tracking of implementation activities and
resolving of issues encountered during the implementation period.
(See Template: Contract Management Plan).
e) Formal communications and notifications from the contractor, as well as documents
required to be submitted under contracts, including bank guarantees or standby letters of
credit, insurance certificates, progress reports, draft final reports and final reports but
excluding credit notes and invoices and their supporting documents, shall be submitted by
the contractor to the Chief of the Procurement Section, who immediately shall forward
them to the assigned Procuring Entity for review and action. Formal communications
regarding concluded procurement contracts shall be exchanged between the contractor and
the Procurement Section.
f) The assigned Procuring Entity shall, without delay, forward to the Chief of the responsible
Substantive Section any documents with substantive/technical content, such as progress
reports, testing reports, draft final reports and final reports. Upon review, the Chief of the
Substantive Section shall inform the assigned Procuring Entity in writing whether the
documents can be accepted as meeting the requirements stated in the terms of reference or
technical specifications and, if not, state the main reasons and the remedial action to be
taken by the contractor.
g) In the event of any discrepancies/issues between the goods/services received vis a vis the
requirements of the contract/purchase order, the Substantive Officer shall prepare a detailed
report showing the goods/services received in relation to the requirements of the
contract/purchase order (see Purchase Order or Contract Reconciliation Template), and
shall forward this report to the Procuring Entity for further communication with the
supplier in resolving the discrepancy/issue.
h) Upon receipt of any other contractual documents (except credit notes, invoices and their
supporting documents), the Procuring Entity shall coordinate action with the Chief of the
Substantive Section as well as with the Budget and Finance Section and the Legal Services
Section, as required.
i) Invoices and their supporting documents should be submitted by the contractor to the
Budget and Finance Section. If a staff member erroneously receives an invoice, he/she shall
forward it to the Budget and Finance Section without delay. Staff members who receive
and/or request invoices under their name or the name of their Section or do not forward
invoices to the Budget and Finance Section expose the CTBTO to the risk of possible
delays in the processing of payment of the invoice.
j) Invoices may be submitted electronically to [email protected] or in hard copy and shall
indicate the bank account to which payment shall be transferred, as well as the contract
number or purchase order number (SAP number). The Budget and Finance Section shall
log the invoices received and check their completeness (required information and/or
supporting documents in accordance with the relevant contract or purchase order). Where
invoices are not complete, the Budget and Finance Section shall contact the contractor in
written form (e.g. email) and request the contractor to provide the missing information or
document(s), informing them that the invoice shall be placed on hold until all
information/documents are received, as per the referenced contract or purchase order.
k) When the invoice is complete, the Budget and Finance Section shall forward a copy of the
invoice and supporting documents, if any, in electronic format to the relevant Substantive
Section or requesting Officer, if his/her name is specified, with a deadline for certification.
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If goods receipt has not already been performed by the Substantive Section, the Chief of the
Substantive Section or the requesting officer shall forward the copy of the invoice to the
Certifying Officer and inform him/her whether the goods referred to in the invoice have
been delivered/shipped in an acceptable condition or whether the constructions/services
have been properly performed. l) As provided for in Financial Rule 11.1.14 and Administrative Directive No. 13, the
Certifying Officer shall certify that the goods have been received or shipped and that the
services have been rendered in accordance with the documents establishing the obligation
(i.e. the contract or the purchase order). In the event that the invoice and/or related
supporting documentation do not comply with the contract or the purchase order, the
Certifying Officer shall inform the relevant (assigned) Procuring Entity, who shall decide
on the action to be taken in order to resolve the issue. The Budget and Finance Section shall
communicate directly with the contractor only on issues related to the completeness,
payment terms or payment status of the invoice. Reasons for not meeting the certification
deadline and/or the payment deadline shall be documented and recorded on the invoice log
by the Certifying Officer and the Budget and Finance Section respectively.
m) For goods to be delivered or services to be rendered to the CTBTO in Member States of the
European Union or European Economic Area (EEA), with the exception of Austria, the
CTBTO is exempt from VAT at source in accordance with the Council Directive
2006/112/EC, Article 151. Such procurement contracts with contractors in EU Member
States therefore should not show any VAT and the selected contractor shall be notified as
early as possible of this exemption. The procurement contract should include the following
clause:
“The Preparatory Commission for the CTBTO is exempt from VAT in accordance
with the Council Directive 2006/112/EC, Article 151. If the contractor requires a
VAT exemption certificate, it shall inform the Preparatory Commission for the
CTBTO as soon as possible.”
n) In the case of EEA suppliers, the procurement contract should include the following clause:
“Due to the VAT exemption applicable to the CTBTO, no VAT will be charged to
the CTBTO by the EEA suppliers under this purchase order/contract.”
o) For goods to be delivered from outside the European Union to the headquarters of the
CTBTO in Austria, where customs clearance assistance is required from the CTBTO, the
Substantive Section shall provide the General Services Unit with a written request,
approved by the Division Director, to issue a power of attorney to the shipping company of
the supplier to enable the shipping company to act on behalf of the CTBTO for the customs
clearance in regard to the specific purchase order.
p) Procurement contracts concluded with suppliers in Austria should state the amount of VAT
separately and include the amount in the contract price. As the amount of VAT will be
reimbursed by the Ministry of Finance of the Republic of Austria, only the net amount
(i.e. excluding VAT) shall be obligated and recorded in the internal accounts.
q) For delivery of goods to the VIC, the Procurement Section shall distribute a signed copy of
the purchase order to the VIC Receiving Area for advance notice and for checking the
goods when they are received.
r) If goods delivered to the VIC Receiving Area are to be returned to the contractor, the
Receiving Area shall coordinate with inventory control to cancel the registration number
and recording of the item(s) in its records.
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s) For goods to be delivered to the field, a copy of the purchase order shall be sent to the
consignee by the Procuring Entity as advance notice. The contractor shall send one set of
the shipping documents directly to the consignee, who normally will be required to arrange
for customs clearance whenever the delivery takes place at the port of entry into the country
of destination.
13.2 Vendor Performance Evaluation
a) Vendor performance evaluation means monitoring and measuring a supplier's ability to
comply with, and preferably exceed, their contractual obligations, i.e. monitoring post
contract award.
Vendor performance evaluation is a key aspect of contract management and it is
necessary to negotiate and agree appropriate performance criteria at the time the contract
is set up. These measures, together with a commitment to continual improvement should
be clear to all parties. The level and frequency of performance monitoring is dependent
on the value and criticality of the contract to the CTBTO. At the start of a contract there
is inevitably a degree of risk and uncertainty for the parties involved. As the contract is
being implemented both parties learn from experience and the risk begins to diminish as
the original contract assumptions are tested.
If appropriate, regular review meetings should be held where both parties discuss ways to
improve contract performance. Review meetings should be two-way, with both parties
learning from each other. The CTBTO also needs to seek the supplier's feedback as to
how well it is carrying out its side of the contract. For example, to check whether all
information is being provided in a timely manner.
Relationship management is also a part of the performance monitoring and evaluation
process and it involves the proactive development of particular relationships with
suppliers. The purpose of investing in a relationship with a supplier is to improve the
supplier's understanding of the CTBTO’s needs and performance in fulfilling those
needs. There are a number of key indicators which may be used to evaluate supplier
performance and which can be used as a yardstick for determining whether good practice
is being achieved in specific situations. These include but are not limited to the
following:
i. Some performance indicators used for monitoring of contracts for goods:
Product Quality;
Percentage of incoming rejects (delivery accuracy);
Comparison of required delivery date and actual delivery date;
Comparison of quantity ordered and quantity delivered;
Comparison of compliance between ordered and delivered specifications;
Warranty claims;
Commercial - costs are maintained or reduced.
ii. Some performance indicators used for monitoring of contracts for services/works:
Timely delivery of outputs as per the contract;
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Timely response to the CTBTO’s change requests;
Quality of services rendered; service quality (against agreed SLAs)
Compliance with schedules;
Performance against agreed delivery lead times;
Relationship/Account Management;
Accessibility and responsiveness of account management;
Commercial - costs are maintained or reduced.
b) Vendor/Supplier performance report
The performance of suppliers should be evaluated. Supplier performance reports are to be
completed by the requisitioners/end users with input from the Procuring Entity as
required. They are used to document satisfactory or poor performance of suppliers.
Supplier performance evaluation is generally recommended for procurement activities
valued at $500 000 or above, but it can also be used for lower value contracts if deemed
necessary, or if there are issues with a particular supplier that need to be addressed.
Supplier performance reports for the above-mentioned contracts shall be completed no
later than at the end of the contract. A copy of the completed supplier performance
evaluation form must be kept in the contract file.
The following issues should be addressed in a supplier performance report:
Fulfilment of delivery schedule/timely delivery;
Compliance with contractual terms and conditions;
Adherence to warranty provisions;
Quality of goods or services provided in accordance with the contract;
Timely response to the CTBTO’s requests;
Undue delay of the performance under the contract;
Failure to disclose information relevant to performance (e.g., bankruptcy, ongoing
litigation, etc.).
Supplier performance reports alert the CTBTO to patterns in performance problems and
identify suppliers who might present high performance risks. They can also be used to
address poor performance issues with suppliers to work on an improvement plan.
13.3 Remedies
A "contract remedy" is a means of relief that either party can pursue to compensate for the
other party's non-performance or non-compliance with a contract term or condition. In order to
determine the appropriate remedy, it is good practice to:
Identify the non-conformance;
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Consider the cause (negligence from supplier or the CTBTO, force majeure, etc.);
Consider the contract/type of requirement (goods, services or works);
Consider the context (e.g., sole source, competition, emergency);
Consider the beneficiary/end-user requirements;
Apply the principle of proportionality.
The remedies must be specified in the contract that was entered into with the contractor.
Remedies shall be undertaken in accordance with the terms and conditions of the contract and
in particular with the GCC.
When considering any contract remedy, seeking feedback from the supplier is prudent. The
supplier should be given the opportunity to provide evidence against pursuing the remedy. That
evidence might point to an excusable delay or impossibility of performance. Such evidence can
lead to a remedy that is fair and just for both the CTBTO and the supplier.
Some remedies available to the CTBTO include the following:
a) Minor deficiency
When the CTBTO determines that the deficiency does not jeopardize the intended use
of the goods, it may accept the goods "as is" against a reasonable reduction in the price
commensurate with the cost of rectifying the deficiency.
b) Warranties
A contract for the sale of goods typically provides for a warranty clause in the specific
terms and conditions of the contract or in the CTBTO’s standard contract terms and
conditions (standard warranty of 24 months).
When problems with accepted items occur, and before the supplier is notified, the end user or
requisitioner should:
Identify the CTBTO’s specific rights under the warranty;
Verify that the defect is covered under the warranty and that it applies to the specific
incident of failure, by answering the following questions:
− Has the CTBTO officially accepted the product or service?
− When does the warranty expire, and what does it cover?
− Does the CTBTO have any obligations under the warranty, and have those
obligations been met?
− Do the facts support invoking the warranty?
Once the information has been gathered, the CTBTO can notify the supplier and obtain the
supplier’s position and its reasons for taking that position; reach agreement on how and when
the warranty will be applied; and document the notification. Regardless of when the defect was
discovered, there will be less room for argument if the supplier is notified before the warranty
period expires.
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c) Notice of rejection of non-conforming goods i. The CTBTO should notify the contractor in writing of a rejection of the goods as
soon as an inspection determines that deviations from the specifications exist and
when the deviation or deficiency is not considered minor. This is especially
important for civil works because interim inspections are required at different stages
and a delayed inspection or notification could be considered as an event justifying
additional financial compensation to the contractor.
ii. When goods are received in a damaged condition, or when the delivery is incomplete
or erroneous, the Procurement Section shall be informed by the Substantive
Section/consignee as soon as possible.
iii. Goods shall be insured by the contractor, who shall be notified of the damage,
incompleteness or error in order for the contractor to submit an insurance claim. The
notification shall include copies of all relevant documents such as purchase order
packing list, shipping documents, invoices and survey reports. In cases where goods
are delivered to the field, the consignee should normally be requested to take the
following actions:
Issue a claim letter to the forwarding company which was responsible for
transporting the goods to the final destination, notifying it of the damage, overage,
shortage or incorrect delivery;
When necessary, contact the local agent of the insurance company to arrange for a
survey of the goods.
d) Liquidated damages
The parties to a contract may explicitly agree, in advance, to a sum that will be payable
as damages for any breach. In the majority of cases, this applies to a delay in
performance. These liquidated damages are an estimate of actual loss that would be
incurred and are not considered a penalty. Provisions for liquidated damages are
included in the CTBTO’s GCC (Clause 19). When delays result in extra costs, or loss of
revenue or other benefits to the CTBTO, they are covered by liquidated damages paid
by the supplier to the CTBTO and are normally calculated as a percentage of the
contract value up to a maximum amount (60 working days). Liquidated damages for
late delivery normally accrue for each day, or other period, calculated to account for
late delivery.
e) Performance security
This is a written financial instrument issued by a bank or an insurance company in
favour of the CTBTO to assure fulfilment of the supplier’s obligations such as
performance bank guarantees. Performance securities are used in complex procurement
where the cost of executing contracts is high and the impact of non-performance by the
supplier could inflict serious damage to the CTBTO (for example, in installation
contracts). They fill the role of an insurance policy for the CTBTO to mitigate the risk
of non-performance by the supplier.
f) Default by the contractor and withholding of payments
Most contracts for services include a clause stating “payment is only made upon
completion of certain tasks”. Payments under a contract for services are normally
broken down into progress payments upon completion of certain tasks by the supplier
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and accepted and approved by the CTBTO. The CTBTO has the right to withhold
payment of invoices received for
non-performance or delays in achieving milestones specified in the contract. Refer to
Clauses 17 and 18 of the CTBTO’s GCC for further information concerning default by
contractors and circumstances under which payments can be withheld.
g) Termination
i. Notice of termination
When the CTBTO considers that the problem is serious enough to jeopardize the
performance of the contract, it notifies the contractor of the termination of the
contract in accordance with the termination clause in the respective contract.
It is the CTBTO’s right to completely or partially discontinue contract performance.
Refer to Clause 26 of the CTBTO’s GCC for further information concerning
termination of contracts.
ii. Termination of contract for goods/services/works
Termination occurs when one party ends the contract for breach by the other. In all
cases of termination, prior consultation and advice must be sought from the Legal
Services Section.
An example of such a breach would be when the supplier is incapable of rectifying
or refuses to rectify the non-conforming goods or services. In this case, the CTBTO
may either terminate the contract for default, engage an alternate supplier to rectify
the non-conforming goods, to re-procure the goods or to provide the required
services. The CTBTO may proceed with calling the performance security. Costs will
be at the expense of the original supplier.
Contracts for works include specific sub-clauses detailing the conditions under
which the CTBTO may terminate the works, the procedures that are to be followed,
and the subsequent valuation of works completed to the point of termination.
iii. Termination for breach of general conditions
The CTBTO’s GCC include several clauses which may entitle the CTBTO to
terminate the contract immediately in the event of breach of these conditions, upon
notice to the supplier and without any liability of any kind. If Procuring Entities are
made aware of such circumstances in relation to the CTBTO’s suppliers, advice on
how to handle the case must be immediately sought from the Legal Services Section.
13.4 Dispute Resolution
a) In order to minimize the possibility of disputes and disagreements, contracts should
outline clearly the responsibilities and obligations of both the supplier and the CTBTO.
The larger and more complex the project, the greater is the potential for
misunderstandings and disagreement.
Contract management planning should include agreement on the procedure to follow to
resolve disagreements between parties regarding responsibilities and interpretation of the
contract. Differences of opinion will arise among qualified professionals in the course of
execution. Claims/requests for changes are part of normal contract execution, and the
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procedure to review and escalate them when necessary should be established from the
beginning. There should also be an agreed procedure for escalating the concern to a
higher level of authority. Nonetheless, the contract should indicate which party has
responsibility for a given decision, and the other party should respect that responsibility.
Contract claims and disputes cannot be avoided entirely, but they can be resolved
effectively and fairly. Disputes should be resolved promptly, in order to mitigate the risk
of contract failure.
Many contractual disagreements stem from ambiguities in the language of contracts. If
necessary a pre-performance conference can be held where both parties review the
contract to ensure that each side understands its role and responsibilities.
b) Additional rules
When the basic rules fail to provide an answer, then the CTBTO needs to look at other
ways to find a resolution to the problem. If the words themselves do not resolve the
ambiguity, the Procuring Entity should find evidence as to the intent of both parties when
they entered into the contract. For example, evidence might be found in the minutes of
the pre-proposal conference or of progress meetings.
If evidence cannot be found with regard to the intent of the parties, then the surrounding
circumstances should be examined. Arbitration proceedings may hold a contracting party
to interpretations that it held, or at least did not challenge, prior to the dispute.
Inconsistencies with past interpretations by either the CTBTO or the supplier are
examined, e.g., when the organization can show that the supplier originally calculated
certain work as required by the contract and is now trying to claim that the work is extra,
the work will be considered as part of the basic contract and not additional work. If
resolution is not evident, consider risk allocation principles.
Normally ambiguous language in a contract is interpreted against the party who drafted
it. For example, an ambiguity in the SOW of the solicitation, incorporated into the
contract, would be interpreted against the CTBTO. Likewise, an ambiguity in the
supplier’s proposed technical approach, incorporated into the contract, would be
interpreted against the supplier. And finally, if the ambiguity is obvious, and the non-
drafting party did not request clarification before contract award, then that party would
be viewed as having had the last opportunity to correct the ambiguity. In which case, the
interpretation is against that non-drafting party.
c) Keys to effective dispute resolution
Before escalating a dispute, the following keys to effective dispute resolution should be
considered:
Recognise that contract documents are not perfect;
Keep larger objectives in mind;
Focus on the facts;
Depersonalize the issues;
Be willing to make reasonable compromises.
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d) Amicable settlement
The preferred means of commercial dispute resolution is negotiation. Where negotiation
is not possible or fails, more formal means of dispute resolution are available:
conciliation. For further information, see Clause 23 of the CTBTO’s GCC.
e) Arbitration
UNCITRAL has developed an internationally accepted arbitration process. The
CTBTO’s GCC states that in the event of arbitration, the arbitration will be conducted
according to the UNCITRAL Arbitration Rules.
Clause 24 of the CTBTO’s GCC provides for the following:
“(a) In the event of a failure to reach an amicable settlement in accordance with
Clause 23 above (amicable settlement), any dispute arising out of the interpretation
or application of the terms of the Contract or any breach thereof shall be settled in
accordance with the arbitration rules established by UNCITRAL as at present in
force. The number of arbitrators shall be one. The arbitration shall be in Vienna,
Austria, and it shall be conducted in the English language.
(b) The arbitrator shall take into account the internationally recognized general
principles of commercial transactions. The arbitrator shall have no authority to
award punitive damages, nor to award interest in excess of five (5) per cent, and
any such interest shall be simple interest only. The parties shall be bound by any
arbitration award rendered as a result of such arbitration as the final adjudication of
any such dispute.”
13.5 Payments
a) Among the rights of the supplier is the right to be paid in a timely manner for successful
delivery of the goods/services/works, according to the terms of the contract. The CTBTO
is obligated to make payment to the supplier on a timely basis and not cause undue cost
to the supplier by unreasonable management of that financial obligation.
In general the activities of the payment process include the following:
Processing payments due according to the contract and upon certification of the
requisitioner if required in the contract;
Reviewing financial implications of contract changes, in terms of original costs/outputs
and available budget;
Liquidating financial securities: release of bid bonds, performance bank guarantees and
advance payment bonds once the reason for requesting them has become moot.
b) Procuring Entities shall ensure that the terms and conditions of payment are consistent
with those specified in the contract document. The following examples contain standard
payment terms for goods, works and services:
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i. For the procurement of goods, the payment terms are net 30 days upon receipt of
shipping documents and invoices.
ii. In exceptional cases where the delivery term Delivered at Place (DAP) is used (or when
using another Incoterm where the supplier, at their own risk and cost, is making the
goods available upon arrival at the agreed destination, payment is made within 30 days
upon receipt of goods. As part of the payment documents, the vendor must provide a
delivery note confirming that the consignee has received the goods.
iii. For the procurement of services, the payment terms are net 30 days upon receipt of
invoice and delivery/acceptance of the deliverables linked to payment as per the
contract.
iv. For the procurement of major works, the payment terms depend on the model contract
selected.
c) A payment made to a supplier may be one of the following five types:
i. Advance;
ii. Partial;
iii. Progress;
iv. Final;
v. Holdback/retention (withholding payment).
i. Advance payment (Financial Rule 11.1.17)
An advance payment is a sum of money paid to the supplier upon signature of the
contract, in anticipation of identified early expenses. Usually the CTBTO does not
provide advance payments. However, sometimes advance payments may be necessary
for such things as rent, subscriptions, insurance premiums, etc. For instructions on the
CTBTO’s advance payment policy, see Annex V.
ii. Partial payment
A partial payment is based on the acceptance of a particular product or service. To
process a partial payment, a document must be on file that confirms the CTBTO’s
acceptance. This confirmation usually is in the form of an invoice or delivery ticket
detailing the goods or services and signed by the staff member authorized to accept the
product or service.
iii. Progress payment (Financial Rule 11.1.18)
A progress payment, also referred to as an instalment payment, is a form of contract
financing made before final work or deliverables are accepted. The CTBTO uses this
form of payment for long-term service work that involves an end item, such as a report.
If progress payments are authorized, they should normally be tied to a milestone in
contract performance, such as the delivery and acceptance of a draft report for the
CTBTO’s approval or delivery of an outline of initial findings for review by the
CTBTO.
iv. Final payment
A final payment is a payment made in acknowledgement/approval of the completion of
all contract performance. The Payments Unit may make payment based on the
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supplier’s invoice and approved “goods receipt” in the SAP ERP system by the
Substantive Division.
v. Holdback
Holdback payments are used for major works and complex consulting assignments to
ensure completion of the contract or compliance with the warranty provisions and in
some construction contracts to ensure that the general supplier has paid its
subcontractors. The holdback payments are retained by the CTBTO until the supplier
has provided proof it has discharged itself of all its obligations under the contract. This
contract provision allows the CTBTO to withhold a portion of payment, usually 10-
15% of each invoice sent by the supplier.
d) Taxes
In principle, the CTBTO is exempt from direct taxes such as income tax, and is also
entitled to exemption/reimbursement of indirect taxes, such as sales tax and VAT, on
important purchases. While in some countries governments have provided an outright
exemption from indirect taxes, in other countries the CTBTO may be required to pay
taxes upfront and subsequently file for reimbursement. Please refer to the CTBTO’s
GCC, Section 6.5.2 of this Manual and Administrative Directive No. 51 for further
guidance on taxation issues.
13.6 Amendments, extensions and renewal
a) An amendment to a contractual instrument is a written record of changes to the original
terms and conditions. A contract amendment is undertaken to reflect changes to the
original requirement, to reflect the resolution of performance problems or to comply with
formal administrative considerations.
b) Extensions of the duration of existing contracts would require contract amendments if the
option to extend the contract is not already foreseen thereunder. Renewals of contracts
are undertaken when both parties are satisfied with the contractual relationship. A
timeframe for renewals is usually included in the original contract document. As
necessary, reminders should be set concerning the start of a renewal period.
c) A contract amendment may take place for a variety of reasons and a written amendment
is required if any of the terms of the contract have changed.
Reasons for amendment include the following:
Extension of time to complete the contract;
Change in specifications;
Changes in price;
Changes in payment schedules;
Change in key personnel;
Administrative changes like change of name, legal status, address, etc.
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d) When a request from a supplier to amend a contract is received, it should be reviewed to
analyse its impact on the schedule of completion, price, quantity and quality. The
Procuring Entity should consult with the requisitioner or end user on all aspects of the
request and determine whether the request may best be executed through the current
contract or, if substantial changes in scope are called for, through new procurement.
e) Requisitioners are required to provide requisition amendments in order to execute an
amendment of the contract. As appropriate, requisitioners should also provide additional
documentation to support the need for the amendment.
Documentation to support a contract amendment may include the following:
A requisition;
Brief description of the amendment required;
Revised specifications/SOW/TOR ;
Justification as to why the amendment is necessary;
Revised cost estimate accounting for increases and decreases in the products or services
and associated costs made by the amendment if relevant.
f) After the issuance of a contract to a supplier, if there is a requirement to amend the
contract resulting in an increase that is equal to or more than $50 000 or 10% of the
original contract amount, whichever is lower, the case shall be resubmitted to the
Committee on Contracts in accordance with paragraph I.1(d) of Annex I to this
Procurement Manual.
g) If an amendment requires insignificant changes to a contract (e.g. changes to delivery
time, change of supplier address), a second submission to the Committee on Contracts is
not necessary. Nevertheless, if deemed necessary, the Chief of the Procurement Section
may seek the advice of the Legal Services Section or convey such information in writing
to the Chairperson of the Committee on Contracts, who shall register it for the record.
Standard formats for contract amendments shall be used, and the amendment should be kept in
the contract file.
13.7 Contract termination and completion
13.7.1 Termination
When the CTBTO considers that the problem is serious enough to jeopardize the performance
of the contract, it shall notify the contractor of its intention to terminate and give the contractor
a given period of time to solve the problem.
Termination occurs when one party ends the contract for breach by the other. The remedies for
that breach normally include damages that indemnify the non-breaching party for any loss
suffered due to breach and such damages are generally compensatory. In all cases of
termination, prior consultation and advice must be sought from the Legal Services Section. An
example of such a breach would be a situation where the supplier is incapable of rectifying, or
refuses to rectify the non-conforming goods or services. The termination clause is included in
the CTBTO’s GCC (Clause 26).
13.7.2 Contract completion
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Contract completion includes the confirmation that all obligations have been met, identification
of any residual obligations and completion steps, settlement of final payments, and the
administrative closing of files. It is the responsibility of the Substantive Section/Division to
inform Procurement once:
All products and/or services required have been provided;
All outstanding issues have been settled;
The final invoice has been submitted and paid.
After notification of the above, Procuring Entities should ensure that the contract is closed out
in SAP.
13.8 Property disposal
Property disposal is the process of removing something from a location, typically the removal
of scrap, surplus, excess, obsolete and waste items from the CTBTO’s premises.
In accordance with Financial Rule 11.5.16, any item of property, equipment or inventory which
has reached its assigned lifespan or which has been written off and which, in accordance with
procedures established by the Director of Administration, is determined to be surplus to the
Secretariat’s requirement may be sold.
The Head, General Services Unit, shall establish procedures for and may arrange for the sale of
property, equipment or inventory declared surplus. These sales shall be done normally by a
competitive bidding process. However, competitive bidding shall not be necessary when:
a) The estimated sales value is, in the opinion of the Property, Equipment and Inventory
Survey Panel, less than $1000;
b) The best interest of the Secretariat will be served by sale at fixed unit prices
recommended by the Property, Equipment and Inventory Survey Panel and approved by
the Executive Secretary;
c) The exchange of property in partial or full payment for replacement equipment will, in
the opinion of the Executive Secretary, be in the interest of the Secretariat;
d) The destruction of the surplus or of unserviceable items will be more economical or is
required by law or by the nature of the property; such sale or disposal shall be recorded,
with the relevant reasons given.
The Head, General Services Unit, shall recommend to the Property, Equipment and Inventory
Survey Panel the method of disposal after obtaining the appropriate technical advice.
For further information concerning disposal of property, please refer to Financial Rules
11.5.15, 11.5.16, 11.5.17, 11.5.18, 11.5.19 and 11.5.20; and Administrative Directives Nos. 17
and 19.
13.9 Maintenance of Files
a) In accordance with Financial Rule 11.5.09, written findings shall be placed in the
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appropriate case file. The Procurement Section shall keep the official files on all
procurement transactions initiated by a purchase requisition accepted by the Section.
Filing and management of records shall be undertaken in accordance with the established
procedures.
b) The assigned Procuring Entity is responsible for keeping an official file on all
transactions. The file shall document all steps taken in accordance with the Financial
Rules and this Procurement Manual and shall include all relevant documents including,
but not limited to:
i. Requisition;
ii. TOR, technical specifications or SOW;
iii. ITB, RFP or RFQ, with all Solicitation Documents;
iv. List of bidders;
v. Competitive bids, proposals or quotations;
vi. Amendments to Solicitation Documents and any other clarifications and
correspondence with suppliers;
vii. Bid opening report;
viii. All offers received (technical, financial, compliant and non-compliant);
ix. Copies of any bid security received from the vendor (originals to be kept in a locked
cabinet);
x. Technical, contractual and financial evaluations;
xi. Submissions to the Committee on Contracts;
xii. Pertinent excerpts from the minutes of the Committee on Contracts and approvals by
the Executive Secretary or the Director of the Administration Division;
xiii. Awards communicated to the selected supplier and the supplier’s acceptance of the
award;
xiv. Submissions to and comments by the Legal‒Finance Review Team;
xv. Copy of signed procurement contract;
xvi. All documents required under the contract, such as bank guarantees, standby letters of
credit, insurance certificates, shipping documents, progress reports and official
notifications from and correspondence with the contractor;
xvii. Supplier performance evaluation form, if applicable.
13.10 Management Information
a) The Chiefs of the Procurement and the Budget and Finance Sections and the Head of the
General Services Unit shall regularly cooperate in generating management information
data on the status of procurement transactions.
b) The Procurement Section, the Payments Unit of the Budget and Finance Section and the
Substantive Section shall work together to coordinate any payment issues which may
arise under a contract or purchase order and resolve such issues in an expeditious manner
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in the best interests of the CTBTO.
Chapter 13 Resources
The CTBTO’s
Policies
Administrative Directive No. 17: Composition and terms of reference of
the Property Survey Panel
CTBTO’s General Conditions for Goods
(Please contact the Procurement Section for access to this document.)
Guidelines Guidelines on Filing System
(Please contact the Procurement Section for access to this document.)
Templates Supplier/Vendor Performance Evaluation Form
(Please contact the Procurement Section for access to this document.)
PO or Contract Reconciliation Template
(Please contact the Procurement Section for access to this document.)
Contract Management Plan
(Please contact the Procurement Section for access to this document.)
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CHAPTER 14: COOPERATION
14.1 Cooperation with United Nations Entities
The purpose of this section is to provide the policy and procedures for the CTBTO’s
procurement cooperation with other entities of the United Nations System. Further information
is available at (https://www.ungm.org/Shared/KnowledgeCenter/Pages/HWG_GUIDE) which
was published by the HLCM Procurement Network in March 2012.
“Delivering as One” and other United Nations reform initiatives have accelerated efforts
among United Nations entities to collaborate and cooperate on supply chain management,
including procurement. Moreover, the issuance of the “Mutual Recognition” statement in 2019
formalizes the commitment of United Nations entities to use or rely on other entities’ policies,
procedures, system contracts and related operational mechanisms for the implementation of
activities without further evaluation checks or approvals being required, to the greatest extent
practicable.
The CTBTO can save money, time and effort if it decides to work together with another
organization on common procurement requirements. The potential benefits of cooperation
among United Nations organizations in procurement can result in more beneficial prices and
lower overall costs due to reduced administration costs and economies of scale. The CTBTO
can also avoid unnecessary repetition of solicitation exercises by cooperating with other
organizations on similar requirements.
During joint procurement activities, the exchange of purchasing experience, information and
subject matter expertise among organizations are also good opportunities for knowledge sharing
and learning for all involved: the Procuring Entities, requisitioners and subject matter experts at
the operational level, as well as the managers who will support and promote joint procurement
initiatives at the strategic level.
Other joint procurement activities that do not necessarily lead to a joint tender can also be
undertaken. These include joint strategies and forecasts, joint industry consultations,
collaboration among organizations on product innovation, etc.
In recent years, there has been increased emphasis on establishing joint procurement initiatives
and activities within the United Nations. Examples of such initiatives can be found in the
Knowledge Centre of the UNGM website
(https://www.ungm.org/Shared/KnowledgeCenter/Pages/Index), along with more detailed
information, research results and guidance.
There are many benefits to joint procurement among United Nations organizations despite the
fact that cooperation may be challenging, and may also carry some risks as procurement rules
and procedures are not fully harmonised across all United Nations organisations.
Issues for consideration include the following:
There are challenges in preparing technical specifications, TOR or SOW and evaluation
criteria which meet the needs of all United Nations organizations concerned. This effort
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also entails a significant investment of time and resources of procurement staff and may
have opportunity costs.
The use of LTAs (see Section 6.6.6 and the section below on ‘United Nations
organization LTA’) also carries its own risks. For example, in cases of high demand for
a product, suppliers under an LTA may not be able to meet the needs of all United
Nations organizations wishing to purchase goods or services.
LTAs require joint contract management and ongoing monitoring to ensure that value
for money and efficiency are maintained, which may demand more time and resources.
To best capitalize on the benefits of joint procurement, the procuring organizations should
commit to harmonization and be willing to cooperate with other organizations as follows:
Similar procurement requirements which lend themselves to joint procurement
activities should be identified;
Open and frequent communication and a commitment to keep all stakeholders informed
should be prioritized.
The CTBTO’s Financial Rule 11.5.06 (g) and Administrative Directive No. 27 provide the
possibility for cooperation with other organizations of the United Nations System.
In order to further collaboration between United Nations entities and in support of United
Nations initiatives, it may be determined that cooperation with other organizations, agencies or
programmes of the United Nations system is appropriate to meet the requirements of the
CTBTO. Procurement cooperation may be considered appropriate to, inter alia, obtain volume
pricing or achieve process or operational efficiencies and may take the following forms or
modalities:
Carrying out joint procurement activities; establishing and using joint LTAs and
Contracts (joint solicitation);
Reuse of a United Nations organization’s tender (solicitation) results;
Using LTAs or system contracts of other United Nations entities (piggy-backing);
Requesting another United Nations entity to carry out procurement activities on behalf
of the CTBTO; using procurement services of other United Nations entities
(outsourcing);
Procuring goods, works or services from another United Nations organization.
Moreover, Supply Chain Management collaboration further encompasses the following range
of activities and is encouraged wherever appropriate:
Sharing technical requirements (specifications, terms of reference, statement of works)
or developing common technical and performance requirements;
Leveraging technical expertise of other United Nations organisations and non-United
Nations partners to collaborate on quality assurance of products and services;
Joint forecasting, logistics and warehousing with United Nations and non-United
Nations partners for the purpose of market shaping activities; joint assessments of
manufacturers’ capacity with United Nations and non-United Nations partners;
Joint strategies with United Nations and non-United Nations partners, e.g., to stimulate
and create product development and markets, to ensure product tracking, etc.
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14.1.1 Establishing and using joint LTAs and contracts (joint solicitation)
The CTBTO may decide to undertake joint procurement activities with one or more United
Nations organization(s) to increase the efficiency of the procurement process, optimize gains
around cost-effectiveness, value for money and long-term sustainability of markets.
Under this cooperation, the United Nations organizations involved will generally agree on an
organization to lead the procurement process (the lead organisation). The process will be
subject to the relevant regulations, rules, and policies of the lead organization. The cooperating
organizations will jointly agree on the technical specifications, TOR or SOW, Solicitation
Documents and evaluation criteria, and will also jointly evaluate the offers submitted.
The decision to engage in joint tendering is normally based on shared needs and the estimated
total value of a single or related series of planned procurement actions (aiming at achieving
economies of scale), and is frequently used for the procurement of the most common goods and
services that are used by United Nations organizations.
Joint solicitations are only subject to the contract review and award requirements of the lead
organization, except in those cases where the applicable evaluation criteria or the resulting
award differs from that of the lead United Nations entity. In the case where the CTBTO is the
lead United Nations entity it may provide for representation by the other participating United
Nations entities on the relevant Procurement Committee responsible for reviewing the
procurement activity. Whether or not this is the case, all participating organizations should
acknowledge the lead organization’s review and award process, including its procurement
review committee, to avoid duplication of efforts and thus forfeit the synergies gained. The
outcome of the lead United Nations entity Procurement Committee review should be shared
with participating organisations. For example, this could include the Technical and Financial
Evaluation, the approved Minutes of the Meeting of the Committee on Contracts
recommending the contract award, the Contract and any other relevant inforamation as
appropriate.
Joint solicitations are useful for goods and services that are often procured by each
organization, such as office supplies and office equipment, fleet maintenance services, hotel
and conference services, travel services, security services, cleaning services and printing
services. When joint procurement is conducted, organizations are likely to obtain more
competitive prices due to economies of scale as well as other beneficial conditions, such as
reduced timeframes for procurement.
Joint procurement activities have their own risks and challenges. For further information please
refer to the document “Common UN Procurement at the Country Level”
(https://www.ungm.org/Shared/KnowledgeCenter/Pages/HWG_GUIDE), which outlines
possible challenges that may occur and offers appropriate solutions.
14.1.2 Reuse of a United Nations organization’s tender (solicitation) results
The CTBTO may rely on the competitive selection process of another UN organization, when
the potential benefits of undertaking a new solicitation process would not justify the associated
effort and administrative costs. The CTBTO may reuse existing tender results to procure
goods, works or services without undertaking a separate solicitation process, provided that:
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a) Permission of the lead agency has been provided;
b) The award is made within a 12 month period after the contract signature date;
c) In markets with fluctuating or volatile prices, current market prices should be checked
before issuing a purchase order or contract;
d) The requirements for the goods, works or services are substantially similar and the
quantities originally tendered have been similar or greater;
e) The supplier agrees to offer the goods, works or services at the same price and the
commercial terms are still considered reasonable for the market;
f) The supplier accepts the CTBTO’s terms and conditions of contract;
g) The case is submitted for review and approval in line with CTBTO’s contract review
and approval process.
14.1.3 Using LTAs or system contracts of other United Nations Entities (piggy-backing)
The CTBTO can use the existing LTAs or contracts of other United Nations organizations in
order to reduce administrative costs, benefit from preferential rates already achieved and, in
some cases, take advantage of the expertise the other organization has developed in procuring
certain goods or services.
The purpose of using existing LTAs is to create a win-win situation for both the LTA holder
and another organization: (a) by “piggybacking” the Commission can perform procurement
quicker while reducing transaction costs and, (b) increasing the use of an existing LTA can
potentially give access to preferential rates or lower unit prices and thereby increase value for
money for all participating parties.
The use of another United Nations organization’s LTA is frequently undertaken for a wide
range of items and most commonly for commodity groups such as travel, paper/stationery,
cleaning, security, IT equipment, hotel and lodging, banking, communications (phone and/or
mobile), printing, postal and courier service, and office equipment.
The CTBTO may use an LTA created by another United Nations entity, even if not concluded
through a joint solicitation exercise, if the LTA satisfies the CTBTO’s requirements,
specifically in terms of value for money and fit for purpose.
Specific procedures may apply to the use of the LTA of another organization and these should
be fully complied with.
The decision to use an LTA should be guided by the following:
a) The value of the CTBTO’s call-off is less than or equal to the intended single call-off
volume (if indicated in the LTA) or is not more than the total value of the LTA (if the
LTA is created with a ceiling amount and the United Nations agency that established it
has requested to monitor these amounts). An LTA should not be used to order
disproportionately higher volumes than intended, especially for goods/services that
attract volume discounts that may not be included under the terms of the LTA.
b) The LTA vendor offers goods or services to the CTBTO at the same (or lower) price in
the LTA and with the same terms and conditions.
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c) The CTBTO’s requirements are equivalent to those included in the LTA.
d) The LTA set-up in terms of type and configuration, especially in respect of
geographical coverage and conditions of usage for multiple vendor LTAs, serve
CTBTO’s purposes;
If the CTBTO is satisfied that the LTA has been approved according to the procedures
established in the respective United Nations entity, a separate Committee on Contracts review
of the LTA should not be required, provided the following is met:
a) The LTA is still valid and has not been cancelled or terminated.
b) The United Nations entity that owns the LTA permits its use by the CTBTO and has
confirmed this in writing. In obtaining the written approval, it is recommended to
obtain from the other United Nations entity information about the LTA by using the
HLCM-endorsed LTA information sheet which includes details about the LTA type,
duration, ceiling amount (if applicable), reporting requirements for its usage by other
United Nations entities, guidance note for usage of the LTA, etc. In addition, the
CTBTO must obtain a signed copy of the United Nations entity’s LTA.
c) The vendor on the United Nations entity LTA is eligible with respect to the CTBTO’s
requirements on vendor eligibility (see Section 3.3 Vendor Ineligibility).
d) The vendor accepts CTBTO’s General Conditions of Contract.
A separate agreement, typically in the format of a Purchase Order or Contract must be signed
between the vendor and CTBTO.
LTAs of other United Nations entities are available at www.ungm.org. It should be noted that
all LTAs available in UNGM are considered to have met the premise in paragraph b) above i.e.
that the entity that created the LTA permits the use by other United Nations entities.
If a United Nations entity utilizes another entity’s LTA they must fulfil the reporting
requirements established by the entity that created it in the first place, in terms of value of
orders placed against the LTA, performance of the supplier etc., utilizing the UNGM
functionality for this.
Best practices for sharing LTAs, including the LTA Information Summary Form, are available
at:
https://www.ungm.org/Shared/KnowledgeCenter/Document?widgetId=2198&documentId=592
607
Please refer to Section 11.3.3 for further instructions on placing call-off orders against an LTA.
The use of the CTBTO’s LTAs by other United Nations entities requires prior approval by the
Chief of Procurement.
14.1.4 Requesting another United Nations entity to carry out procurement activities on
behalf of the CTBTO/Using procurement services of other United Nations entities
(outsourcing);
In some instances a joint United Nations project can provide certain centralized administrative
services to other partner organizations. This set-up may be used to ensure that the necessary
procurement capacity is available to achieve economies of scale and to increase effectiveness
and efficiency. In such instances, the procurement actions can be outsourced to another United
Nations organisation designated as the CTBTO’s procurement agent. Participating United
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Nations organizations will normally establish specific rules and procedures for these joint
procurement activities. Examples of these types of arrangements are those supporting common
shared premises. Typical outsourced services would include security, facility management and
cleaning services, courier, mail and shipping services, catering for staff, travel, stationery
supply contracts and IT services.
United Nations entities will enter into an appropriate legal instrument for outsourcing of the
relevant procurement activity. Outsourcing may be considered in the following situations:
a) Expertise. When the CTBTO recognizes particular expertise of another United
Nations entity in the procurement of specific goods, works or services, the
Authorized Official (the Director of Administration/Chief of Procurement,
depending on the value) may authorize outsourcing for the specific goods, works or
services and designate the United Nations entity as the procurement agent for the
CTBTO.
b) Procurement/Administrative Capacity. When the CTBTO does not itself have the
necessary procurement and/or administrative capacity in a country, procurement
actions may be undertaken on behalf of the CTBTO by the representative of another
United Nations entity with the necessary procurement and administrative capacity
(e.g. representative of the local United Nations Development Programme), in
accordance with the rules and regulations of that United Nations entity.
14.1.5 Procuring goods, works or services from another United Nations organisation
If a United Nations entity has goods in stock or delivers certain services, the CTBTO may
procure goods, works or services from that United Nations entity, through the establishment of
an appropriate legal instrument (for example through a Memorandum of Understanding) with
the United Nations entity. Procurement from another United Nations entity must be approved
by the Authorized Official (the Chief of Procurement) on the basis of adequate justification.
14.2 Cooperation with governments and other organizations
The CTBTO’s FRR 11.5.06 (g) provides the possibility for cooperation with governments and
other organizations in respect of procurement activities. Such activities shall be undertaken in
consultation with the Legal Services Section.
Chapter 14 Resources
Policies The CTBTO’s Financial Regulations and Rules
Guidelines UNGM : Common UN Procurement at the Country
Level
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CHAPTER 15: TRANSVERSAL TOPICS
15.1 Global Compact
Vendors providing goods, services or works to the CTBTO are expected to support the United
Nations Global Compact. This initiative is a call to companies everywhere to align their
operations and strategies with ten universally accepted principles in the areas of human rights,
labour, environment and anti-corruption, and to take action in support of United Nations goals
and issues embodied in the Sustainable Development Goals. The United Nations Global
Compact is a leadership platform for the development, implementation and disclosure of
responsible corporate policies and practices.
The Ten Principles are as follows:
Human Rights
Principle 1. Businesses should support and respect the protection of internationally proclaimed
human rights; and
Principle 2. Make sure that they are not complicit in human rights abuses.
Labour
Principle 3. Businesses should uphold the freedom of association and the effective recognition
of the right to collective bargaining;
Principle 4. The elimination of all forms of forced and compulsory labour;
Principle 5. The effective abolition of child labour; and
Principle 6. The elimination of discrimination in respect of employment and occupation.
Environment
Principle 7. Businesses should support a precautionary approach to environmental challenges;
Principle 8. Undertake initiatives to promote greater environmental responsibility; and
Principle 9. Encourage the development and diffusion of environmentally friendly
technologies.
Anti-corruption
Principle 10. Businesses should work against all forms of corruption, including extortion and
bribery.
More information can be found on https://www.unglobalcompact.org/.
15.2 Sustainable procurement
15.2.1 Introduction
Sustainable Procurement is about taking social and environmental factors into consideration
alongside economic factors in making procurement decisions. Sustainable procurement
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“integrates requirements, specifications and criteria that are compatible and in favour of the
protection of the environment, of social progress and in support of economic development,
namely by seeking resource efficiency, improving the quality of products and services and
ultimately optimizing costs”.
The underlying principles of the procurement process are achieving value for money on the
basis of analysing and evaluating the life cycle costs of goods, services or works. This
generates long term benefits not only to the organization but also to society, to the economy
and to the environment.
Sustainable procurement forms a key part of an overall push for sustainable development by
governments and United Nations organizations. It also falls under one of the Sustainable
Development Goals; Goal 12 – Ensure Sustainable Consumption and Production Patterns.
Among the specific targets for achieving Goal 12 is target 12.7, which states “promote public
procurement practices that are sustainable, in accordance with national policies and
priorities.”
The Three Pillars of Sustainable Development include the following:
Economic
Efficiency
Economic development
Barriers to trade
Open competition
Fair treatment
Non discrimination
Transparency
Environmental
Reduction of waste
Water quality
Reduction of greenhouse gas emissions and air pollutants
Preservation of biodiversity
Management of natural resources
Social
Observing core labour standards
Recognizing equality and diversity
Increasing employment and skills
Developing local community benefits
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15.2.2 Sustainable procurement implementation
The following section provides information on sustainable procurement implementation at the
strategic level and at the level of the procurement processes within the CTBTO.
15.2.2.1 Sustainability at the organizational strategy level
An efficient and sustainable Secretariat is one of the three strategic goals which reflect the core
mandate of the CTBTO and these are outlined in the CTBTO’s Midterm Strategy. At the
organizational level a number of initiatives are being taken inclusive of the drive to implement
a more sustainable process through paperless workflow and several mechanisms are being put
in place for implementing and monitoring the key elements of this strategic goal which are as
follows:
− Organizational structure rationalized to provide a solid foundation for the Secretariat;
− Platform for Leadership and Staff Development Strengthened;
− Clarity and consistency of policies, procedures and practices increased;
− Information and communications technology embraced as a key enabler of the
Secretariat’s activities;
− Process innovation exploited to achieve an e-office;
− Security and health and safety cultures of the organization reinforced;
− Resources proactively mobilized to enhance financial sustainability;
− Capacity building and civil and scientific applications of our data;
− Oversight functions strengthened and quality focus reinforced.
15.2.2.2 Sustainable procurement processes
Sustainable procurement implementation is important for the following reasons:
a) Enhanced risk management: By encouraging procuring entities to thoroughly
understand suppliers’ practices and the ability of the market to respond, sustainable
procurement can help to identify important risks that could impact the CTBTO’s
reputation and the viability of individual projects;
b) Innovation: Sustainable procurement can enable Procuring Entities and requisitioners to
consider more innovative solutions to their needs, which may not otherwise be
considered.
c) Long-term development of markets: Sustainable procurement is a gradual process that
can help to build markets over time.
d) Aligned with Sustainable Development Goals: Under SDG 12: “Ensure sustainable
consumption and production patterns”, Sustainable procurement has been identified as
one of the key targets for the UN to achieve by 2030;
e) Supports the CTBTO’s guiding procurement principles: sustainable procurement
supports the concepts of best value for money; fairness, integrity, and transparency;
effective competition; and the best interests of the CTBTO.
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15.2.2.3 Sustainable procurement implementation in the procurement process
Sustainable procurement can be taken into consideration throughout the procurement process.
A. Planning
If applicable during procurement planning at the project level, sustainability considerations can
be identified and included in the process. This should be undertaken by the project manager or
requisitioners. Specific considerations at this stage can include the following:
1. Market analysis can be done in order to understand:
a) The existing solutions in the market;
b) The main social, environmental and economic risks/opportunities for the specific
product or service;
c) The applicable social or environmental standards (i.e. eco labels) applicable for the
product or service;
d) Identification of alternative options that might be more sustainable.
2. Identification of product or service groups that offer the best opportunities focusing on
sustainability elements that are important and relevant (or considered a higher risk). For
example, if the procurement process is for items that require a lot of packaging, a
sustainable packaging requirement should be requested.
3. Reconsider the needs, i.e. consider specifically whether the goods or services need to be
purchased. There may be an alternative solution such as leasing or purchasing fewer units
that might be more cost effective, which in turn could lead to reduced waste and
emissions.
B. Requirements Definition Clear and realistic requirements are crucial to conducting a successful procurement process and
should be based on the information gathered at the planning stage. It is important that the
drafting of sustainability requirements is done in a way that does not hinder competition.
Specific considerations at this stage:
a) Define the minimum sustainability requirements acceptable in the specifications, TOR,
or SOW. Requirements should be clear, specific and measurable, and based on the
results of market research. Requirements may refer to existing third party social or
environmental standards.
b) The requirements definitions shall address specific and relevant sustainability
requirements through either precise technical, functional or performance specifications.
Developing performance or functional specifications helps to ensure a wider and more
sustainable sourcing base. As applicable, sustainable packaging solutions should also be
requested.
c) Where possible, the specifications, TOR, or SOW should specify that materials to be
used in production and/or the method of production or service delivery should include
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considerations for sustainability and that goods should be manufactured using clean
production technologies and best practices. As relevant other environmental criteria
(such as biodegradability, resource, energy and water efficiency, minimum packaging,
etc.) can also be included in the requirements.
d) Whenever possible ensure that the relevant specifications include requirements for
energy smart devices (from computers to air conditioning systems) or services (from
canteen services including provisions for reduction of food waste or increase of locally
sourced and seasonal food, to cleaning services including the efficient use of product
quantities and the use of products with reduced toxic content).
e) Whenever possible a sustainable title should be used. This can be done by including
relevant keywords such as “energy efficient”, “ethically sourced”, “local”, or other titles
as appropriate. Keywords used should be clear and specific, rather than selecting words
that can be considered vague or misleading such as “sustainable” or “green”. As
suppliers may initially use the tender title to determine whether or not they will submit
a bid, using specific keywords will help to reduce confusion and ensure that the right
bidders submit the right bids. For example, a tender for facilities management services
has a higher chance of delivering better standards of environmental and social
performance if it is titled ‘Procurement of energy efficient facilities management
services’, ‘Procurement of non-toxic cleaning chemicals/services’. The title should
allow suppliers to understand clearly that such tenders and contracts will include
specific sustainability requirements and the message that sustainability is an important
consideration will be reinforced.
Other examples of suitable titles could be:
Request for Proposal for cleaning services would be environmental cleaning services
including selective waste collection
Request for Quotation for the supply of recycled paper for writing, printing and copying
purposes
Request for Proposal for the design and construction of an energy efficient building
C. Sourcing
Consider strategic approaches to sourcing such as grouping similar requirements repeated over
time to run a procurement process for longer term contracts, (see Section 11.3.3 Long Term
Agreement (LTA) for details). Longer term contracts will give suppliers a greater incentive to
bid, and increase the opportunity to improve the sustainability of vendors over time.
D. Solicitation
Specific considerations at this stage:
a) As applicable (see Section 6.2 Types of Competition) conduct an open competition,
which provides opportunity for all suppliers to bid, inclusive of small and medium
local businesses.
b) When appropriate, consider dividing large procurements into smaller lots. Smaller lots
may be more accessible to local small and medium suppliers which may not have the
capacity to bid for the entire order.
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c) In cases where defining clear sustainability requirements is difficult, or the potential
price impact of more sustainable options is unknown, consider allowing alternative
offers that include enhanced sustainability considerations.
d) Include the minimum sustainability requirements desired into the qualification,
technical and financial evaluation criteria of the solicitation document (see Section 6.5
Evaluation criteria). As applicable, sustainability criteria can be included in the tender
document as either pass/fail criteria, as rated criteria or as voluntary disclosure criteria
(non-mandatory).
e) Internationally recognized certification or accreditation schemes or equivalents may be
used to demonstrate a bidder’s ability to apply environmental management measures.
Such schemes may include ISO 14001 or equivalent.
f) Where applicable, financial criteria for certain product/service categories (e.g. vehicles,
ICT and generators), can include a requirement that evaluation will be done using a
Life Cycle Cost (LCC) analysis.
E. Contract finalization and issuance
Sustainability considerations can be included in the contract issued to the supplier. These
contracts may include economic, social and environmental considerations in contract
performance clauses, provided they are included in the solicitation document and comply with
the CTBTO’s policy. It is particularly important to include these considerations especially for
longer term contracts with suppliers, such as LTAs, where the relationship is expected to last
several years, or where the risk to the CTBTO is considered to be higher.
Some considerations include:
a) Whenever possible, include relevant sustainability clauses in the contract. These clauses
should be measurable and realistic and could include, for example, requiring packaging
improvements such as using recycled packaging, conformance with local environmental
regulations, etc.
b) Where applicable include KPIs that will be evaluated. The KPIs should link back to key
sustainable procurement aspects of the specification or the final contractual
commitment made by the successful bidder and should be used to measure essential
aspects of a contract.
c) As applicable, ensure that the GCC are included as part of the contract since sustainable
procurement are also indirectly considered in procurement decisions, through clauses in
the GCC such as the requirements for spare parts, the CTBTO’s right to inspect and/or
to test the goods to confirm their conformity to the technical specifications, etc.
F. Contract Management
As appropriate, sustainability considerations can be included in the contract management
activities. This can help suppliers to enhance their own capacity to deliver against current and
future contracts. Vendor performance should be monitored during contract implementation.
See Section 13.2 Vendor Performance Evaluation for further information.
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15.3 Risk Management
a) According to ISO 33000 (E), risk management entails “coordinated activities to direct
and control an organization with regard to risk”. It seeks to mitigate the impact of the risk
by reducing the likelihood of its occurrence, and/or the consequences or impact. Both
likelihood and consequences of risks can be mitigated through proactive planning,
monitoring and other appropriate actions.
b) The CTBTO’s risk policy forms the basis of the PTS Enterprise Risk Management
Framework, which guides risk management at the PTS in establishing a systematic
approach for proactive management of potential risks. (See documents: CTBTO’s Risk
Policy and PTS Enterprise Risk Management Framework).
c) With regard to procurement, risk is defined as exposure to loss as a consequence of
uncertainty. The procurement process contains in each of its stages, multiple specific
risks and consequences (see (e) below).
d) The CTBTO’s FRR Article 11: Internal Control Regulation 11.1 addresses risk
management elements that are particularly relevant to procurement. These elements are
promulgated in this Procurement Manual as well as in various policies, systems and
administrative guidelines as follows:
i. The CTBTO’s Financial Regulations and Rules;
ii. Administrative Directive No. 27 (Rev 5): Procurement Procedures;
iii. Administrative Directive No. 13: Delegation of Authority for Approving Officers,
Officers authorized to sign receipts, Certifying Officers, and the Legal-Finance Review
Team;
iv. Administrative Directive No. 42 (Rev 2): Obligation of Funds;
v. Administrative Directive No. 18 (Rev 2): Internal Audit Charter;
vi. Administrative Directive No. 56: Whistle-blower Protection Policy;
vii. PTS Risk Management Guide;
viii. The PTS Risk Policy;
ix. SAP;
x. COMPASS (monitoring implementation of projects);
xi. This Procurement Manual.
The major risk management elements included in the procurement manual are as follows:
1. Framework for delegation of authority in procurement; identification of other critical
roles in the procurement process, and linkages of these roles to the procurement
process; responsibilities of organizational units and key roles in procurement processes
(see Section 2.2 Responsibilities of organizational units and key roles in procurement
processes);
2. Review of procurement processes by the Committee on Contracts (see Chapter 9
Procurement Process review);
3. Ethical standards in procurement (see Section 1.5);
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4. Bid complaint mechanism for vendors (see Section 10.2.2 Complaints from Vendors);
5. Solicitation and contract templates with critical tender requirements (see Section 6.5
Components of Solicitation Documents and Chapter 11 Contractual Instruments).
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e) Table 1 : Sample risks in the procurement process and risk mitigation actions Stages of
Procurement
Major
Activities
Major Risks Associated Risks Risk Mitigation Measures
Pre-Purchasing Planning and
strategy
Failure to secure ongoing supply
critical to the organization Failure to achieve key
organizational results
Total costs of procurement too
high
Analyse organization’s procurement portfolio, function and capability and undertake strategic
procurement planning
Insufficient lead-time Inadequate supplier response
Higher prices
Early planning of procurement processes
Requirements
definition
Biased or restrictive specifications/ToR/SoW
Claims of unethical or unfair
dealings
Inadequate supplier response
Use functional performance specifications.
Apply relevant international standards where available
Inadequate specification/ToR/SoW Significant variety in offers
received
Insufficient responses
Offer of goods/services that do
not meet needs
Difficulty in evaluating
competing offers
Possibility that evaluation
process may not stand up to audit scrutiny
Improved product and market understanding through market research
Be familiar with the requirements of the specification/ToR/SoW
Get training in writing specifications/ToR/SoW
Requisition splitting Inability to achieve economies
of scale.
Higher total cost of acquisition
Train requisitioners in procurement
Sourcing Wrong approach to market Inadequate or inappropriate
supplier response
Higher prices
Selection of inappropriate
procurement method
Analyse supply markets
Outdated information on potential suppliers
Inadequate supplier response Ensure ongoing updates to SAP Business Partner information based on communications from
suppliers Market research including use of UNGM
Informal commitments to suppliers
by requisitioners Claims of unethical or unfair
dealing
Train requisitioners
Maintain separation of functions
Purchasing Selection of
procurement
strategy
Delayed requisitions to create false
emergencies Claims of unethical or unfair
dealings
Higher total cost of acquisition
Early involvement of procuring entities in project planning
Training of requisitioners
Seek proper justification for emergencies
When not justified, follow regular procurement process
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Selection of inappropriate procurement strategy
Inadequate or inappropriate
result
Not achieving best value
Agree on desired outcomes & objectives with client
Preparation
and issuance
of Solicitation
Documents
Use of inappropriate evaluation criteria
Inadequate or inappropriate
result
Not achieving best value
Consider implications of the evaluation criteria
Consider re-bidding
Terms and conditions unacceptable to
suppliers Loading of costs in offers
Many qualifications to tenders
Too few bids
Check with the market
Develop commercially acceptable terms
Use standard conditions of contract
Check that responsibility for risks is not allocated to suppliers for factors outside their control
Provisions of inadequate information Loading of costs in offers
Great variation in offers
Difficulty in clarifying and
closing offers because of extensive requests from
suppliers for clarification
Ensure that staff is suitably trained
Review documents before issue
Know your market
Actual or perceived favouritism in providing information
Supplier complaints
Political intervention.
Withdrawal of offers.
Implement standardized procedures for responding to inquiries
Advise all suppliers of all responses to inquiries received
Receipt and
opening of
offers
Actual or perceived breach of
confidentiality Supplier complaints
Political intervention
Mistrust by suppliers
Establish formal security procedures
Perform regular security audits and reviews
Train staff
Evaluation Failure to observe effective evaluation procedures
Inconsistency in evaluation of
offers
Potential for ethical dilemmas
Subjectivity in outcome of
evaluations
Perform regular audits of procedures
Ensure that staff are suitably trained and experienced
Have staff who evaluate bids sign “No Conflict” statement
Failure of offers to meet needs Need to re-tender Ensure that the specification is clear and understandable
Know the marketplace
Failure of evaluation to identify a
clear winner, leading to selection on
subjective grounds or new criteria
Claims of unethical or unfair
behaviour
Ensure that selection criteria are appropriate, well defined, and measurable before tenders are
called
Selection of inappropriate supplier Failure of supplier to fulfil
contract
Perform financial and technical checks on key suppliers before awarding the contract
Reject offers from unacceptable suppliers
Improve evaluation procedures
Selection of inappropriate
goods/services Failure of the goods/services to
meet the need
Where possible and appropriate, ensure that end-users are involved with the evaluation.
Improve technical evaluation procedures
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Insufficient number of responses Need to re-tender
Delays to procurement
schedule
Poor value for money due to
limited competition
Ensure that the procedures for inviting/informing/notifying suppliers of the requirement are
followed
Allow for sufficient time for suppliers to prepare offers
No response from known high quality suppliers
Failure of offers to meet needs
Greater uncertainty about
suppliers’ capabilities
Seek early industry participation
Know your market
Procurement
review and
award
Contract approval not obtained Delays in contract award Ensure adherence throughout process to rules and procedures
Ensure adequate documentation of process
Post-Purchasing Contract
finalization
and issuance
Different expectations between buyer
and supplier Contract disputes
Delivery delays
Possible cost variation
Define terms carefully
Record each party’s obligations
Clarify ambiguities. Before signing the contract
Keep full and accurate documentation
Deadlock on details of agreement Delays in delivery
Need to re-tender
Increase in costs because of
possible legal action
Investigate better ways of sharing risks
Distinguish between essential and non-essential goals and requirements for negotiations
Undue concession to suppliers Reduction in value for money
Claims of unethical and unfair
practices
Purchase of less suitable
product
Inefficiency and misuse of
resources
Negotiate on commercial terms- Involve relevant stakeholders as necessary
Ensure that negotiators are adequately trained
Failure to secure mandatory conditions
Inability to finalize contract
Delays in delivery
Possible variations in cost
Inefficiency and misuse of
resources
Distinguish between essential requirements and others before negotiating
Consider variations in the contract
Refuse the offer if appropriate
Grossly unfair or onerous
requirements on the supplier in the
contract conditions
Contract disputes
Invalidity in the contract
Legal action
Poor working relationship with
the supplier
Negotiate on commercial terms
Consider fairness and reasonableness of terms
Ensure that negotiators are adequately trained
Failure to reflect the terms offered
and agreed in the contract Contract disputes Make a final check of the draft contract with the supplier and the internal client.
Keep records of all negotiations and agreements
Contract
management
Variations in price and foreign exchange
Cost overruns Agree on prices and the basis of prices
Determine the basis and formula for calculating variations in the solicitation document
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Unwillingness of the supplier to accept the contract
Delays in delivery
Need to re-tender
Seek legal redress if non-acceptance causes loss
Negotiate to address the concerns of the supplier but ensure that the integrity of the contract
remains
Failure by either party to fulfil the
conditions of the contract Contract disputes
Failure or partial failure to
satisfythe needs
Delays
Inability of anyone to work on
the project or procurement
Legal action
Review Past Performance Record
Ensure proper contract management through training
Hold regular reviews and schedule progress reports; undertake inspection as required
Ensure that all staff working on the project know the contract conditions and the
buyer’sresponsibilities
Establish appropriate record-keeping systems
Maintain accurate records and documentation
Failure of appropriate delivery of requirements
Inability to meet end-users
need
Choose the right Incoterm
Long Term Agreements with prequalified freight forwarders
Shipping of certain goods without having the recipient government’s
permit of importing these goods
Goods arrive at the country
ofdestination but cannot enter
Recipient may be required to
pay the cost of storage in the
port and applicable liner
charges until the permit / authorisation is issued
Cargo may deteriorate or go
missing during this waiting
period
Knowledge of which countries require which licenses for which goods
Request such licenses already in advance, i.e. as early as possible during the procurement
process, and before shipping
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Chapter 15 Resources
Policies and
Guidelines
The CTBTO’s Financial Regulations And Rules
Administrative Directive No. 27 (Rev 5) : Procurement Procedures
Administrative Directive No. 13 (Rev 9): Delegation Of Authority For
Approving Officers, Officers Authorized To Sign Receipts, Certifying
Officers, and The Legal-Finance Review Team
Administrative Directive No. 42 (Rev 2): Obligation Of Funds
Administrative Directive No. 18 (Rev 2) : Internal Audit Charter
Administrative Directive No. 56 : Whistle-Blower Protection Policy
PTS Risk Management Guide
The PTS Risk Policy
Templates Best Practices For Sharing Long Term Agreements Among UN Agencies
Other Useful
Resources
Universal Declaration Of Human Rights
International Labour Organization’s Declaration On Fundamental
Principles And Rights At Work
Rio Declaration On Environment And Development
United Nations Convention Against Corruption
International Organization for Standardization
Buying Social: A Guide To Taking Account Of Social Considerations In
Public Procurement. European Union, 2010
Greening the Blue - Procurement
EU GPP Criteria
Life Cycle Initiative
UNOPS Guide to Environmental Labels
UN Global Compact
Intranet Site: Compass
Corruption Perception Index (Transparency International)
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Thresholds And Other Instructions For Solicitations
Table 2. Thresholds and Other Instructions for Low Value Purchases and Urgent Unscheduled Maintenance
Solicitation
Method
Estimated
Contract
Value
(US$)
Requirements Evaluation Criteria Number of
Suppliers to
be Directly
Invited
Bidding Period
in Work Days
Submission
Method
Publishing
of
Solicitation
Opening
of Bid by
Tender
Opening
Panel
Submission
to
Committee
on
Contracts
Submission
to Legal‒
Finance
Review
Team Informal
(Low Value
Purchases)
<$4 000 Off the shelf goods, standard
specification, simple services
and works that cannot be
procured through established
call-off contracts
Qualified bidder whose
proposal, all factors
considered, is most responsive
to requirements in Solicitation
Documents
1 or more
(whenever
possible)
n/a Offer may be
submitted
electronically
n/a n/a n/a n/a
Request for
Quotation
(Informal)
$4 000-
$10 000
Off the shelf goods, standard
specification, simple services
and works that cannot be
procured through established
call-off contracts
Qualified bidder whose
proposal, all factors
considered, is most responsive
to requirements in Solicitation
Documents
1 or more
(whenever
possible)
5-10 days
(can vary
depending on
complexity of
requirements)
Offer may be
submitted
electronically
n/a n/a n/a n/a
Informal
(Urgent
Unscheduled
Maintenance)
<$30 000 Goods, services/works with
short delivery times that
cannot be procured through
call-off contracts
Qualified bidder whose
proposal, all factors
considered, is most responsive
to requirements in Solicitation
Documents
1 n/a Offer may be
submitted
electronically
n/a n/a n/a n/a
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Table 2. Thresholds and Other Instructions for Sole Source Procurement Solicitation
Method
Estimated
Contract
Value
(US$)
Requirement Evaluation Method Number of
Suppliers to
be Directly
Invited
Bidding Period
in Work Days
Submission
Method
Publishing
of
Solicitatio
n
Opening of
Bid by
Tender
Opening
Panel
Submission
to
Committee
on
Contracts
Submission
to Legal‒
Finance
Review
Team Request for
Quotation
$10 000-
$70 000
Requirements for goods,
services or works are
clear and specific
Technical compliance,
price analysis
1 5-10 days
(can vary
depending on
complexity of
requirements)
Offer may be
submitted
electronically
n/a n/a n/a Contracts
>$25 000
Invitation to
Bid
≥$70 000 Requirements for goods,
services or works are
clearly and completely
specified
Technical compliance,
price analysis
1 10-20 days
(can vary
depending on
complexity of
requirements)
Offer may be
submitted
electronically
n/a n/a Contracts
≥$150 000
Contracts
≥$25 000
Request for
Proposal
≥$70 000 Requirements for goods,
services or works that
cannot be expressed
quantitatively and
qualitatively or complex
requirements that may
be met in a variety of
ways
Technical compliance,
price analysis
1 10-20 days
(can vary
depending on
complexity of
requirements)
Offer may be
submitted
electronically
n/a n/a Contracts
≥$150 000
Contracts
≥$25 000
Table 3. Thresholds and Other Instructions for Competitive Bidding
Page 170
Solicitation
Method
Estimated
Contract
Value
(US$)
Requirement Evaluation
Method
Number of
Suppliers to be
Directly Invited
Bidding
Period in
Work Days
Submission
Method
Publishing
of
Solicitation
Opening of Bid by
Tender Opening Panel
Submissi
on to
Committ
ee on
Contract
s
Submissio
n to
Legal‒
Finance
Review
Team Request for
Quotation
$10 000-
$70 000
Requirements
for goods,
services or
works are
clear,
quantifiable
and specific
Lowest
price/cost,
technical
compliance
At least 3
whenever possible
5-10 days
(can be longer
depending on
complexity of
requirements)
Offer may be
submitted
electronically
Quotations
≥$25 000 to
be published
on United
Nations
Global
Marketplace
and CTBTO
public web
site
n/a n/a Quotations
≥$25 000
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Table 3. Cont. Solicitation
Method
Estimated
Contract
Value
(US$)
Requiremen
t
Evaluation
Method
Number of Suppliers
to be Directly Invited
Bidding
Period in
Work Days
Submission
Method
Publishing
of
Solicitatio
n
Opening of Bid by Tender
Opening Panel
Submissi
on to
Committ
ee on
Contract
s
Submissio
n to
Legal‒
Finance
Review
Team Invitation to
Bid
≥$70 000 Requirements
for goods,
services or
works are
clearly and
completely
specified
(expressed
quantitatively
and
qualitatively)
Lowest
price/cost,
technical
compliance
At least 3 whenever
possible
10-30 days
(can be longer
depending on
complexity of
requirements)
Bids with value of $70
000 - $150 000 to be
submitted electronically
in two separate files, one
containing a financial bid
and one containing a
technical bid.
Bids with value ≥$150
000 to be submitted in
two sealed envelopes,
one containing a
financial bid and the
other containing a
technical bid.
To be
published on
United
Nations
Global
Marketplace
and CTBTO
public web
site
Technical bids with value above
$150 000 are subject to bid opening
by the Tender Opening Panel.
Financial bids shall be opened by
the Procurement Section.
For bids with value above
$1 000 000 submitted in two sealed
envelopes, only the envelope
containing the technical bid shall be
opened at the initial opening
session.
After completion of the
preliminary technical
evaluation, the Tender
Opening Panel shall
reconvene to open the
second envelope containing
the financial bid.
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Table 3. cont.
Solicitatio
n Method
Estimated
Contract
Value
(US$)
Requirement Evaluation
Method
Number of
Suppliers to be
Directly Invited
Bidding Period
in Work Days
Submission
Method
Publishing of
Solicitation
Opening of Bid by Tender
Opening Panel
Submissi
on to
Committ
ee on
Contract
s
Submissio
n to
Legal‒
Finance
Review
Team Request
for
Proposal
≥$70 000 Requirements for
goods, services or
works that cannot be
expressed
quantitatively and
qualitatively or
complex
requirements that
may be met in a
variety of ways
Lowest
price/cost
technical
compliance or
cumulative
analysis
At least 3
whenever
possible
10-30 days
(can be longer
depending on
complexity of
requirements)
Proposals with value
of $70 000 -
$150 000 to be
submitted
electronically in two
separate files, one
containing a
contractual and
financial proposal
and one containing a
technical proposal.
Proposals with value
≥$150 000 to be
submitted in two
sealed envelopes,
one containing a
financial proposal
and the other
containing a
To be published
on United
Nations Global
Marketplace and
CTBTO public
web site
Technical proposals with value
above $150 000 are subject to bid
opening by the Tender Opening
Panel. Financial proposals shall
be opened by the Procurement
Section once technical
evaluations have been completed
by the technical evaluation team.
For proposals with value above
$1 000 000 submitted in two
sealed envelopes, only the
envelope containing the technical
proposal shall be opened at the
initial opening session.
After completion of the technical
evaluation, the Tender Opening
Panel shall reconvene to open the
second envelope containing the
financial proposal.
Proposals
>$150 000
Proposals
>$25 000
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technical proposal.
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GLOSSARY Best value Lowest price is not necessarily the most important criterion in
the procurement of goods and services; the concept of best
value takes many factors into account to select the optimal
solution to a specific need.
Bidder/proposer/offeror An entity that submits an offer in response to a solicitation.
Normally, the term ‘bidder’ is used to refer to the entity
responding to an expression of interest, Invitation to Bid,
Request for Proposal or Request for Quotation; the terms
‘proposer’, ‘bidder’ or ‘offeror’ may be used to refer to the
entity responding to a Request for Proposal.
Bid complaints A complaint by a bidder against the methods employed or
decisions made by a contracting authority in the administration
of the solicitation process.
Brand name A name or trademark by which one producer distinguishes its
product from similar products of other producers in the same
industry. A brand name identifies both the product and the
producer.
Closing date The deadline for the submission of all
bids/proposals/quotations.
Cold chain A cold chain or cool chain is a temperature controlled supply
chain.
Committee on Contracts The committee established for the independent review of
proposed contracts over certain thresholds. The review is
conducted to verify that all procurement rules, policies and
procedures are met, and that the interests of the CTBTO are
properly protected.
Competitive bidding A procurement method in which offers from competing
suppliers are invited by open advertisement which includes the
scope, specifications and terms and conditions of the proposed
contract as well as the criteria by which the offers will be
evaluated. The objective of competitive bidding is to obtain
goods or services at the lowest cost or best value through open
and fair competition.
Cumulative analysis A combined scoring method used to determine the highest rated
proposal, which assigns a weight distribution between the
technical and financial proposals set out in the Request for
Proposal. The distribution of weight between the technical and
financial proposals may be 70% and 30% respectively, or 60%
and 40% respectively or 50% and 50% respectively. Proposals
whose rating, upon completion of the evaluation of the
technical proposal, does not reach the minimum passing
threshold of 70% or 60% shall be disqualified.
Delegation of authority (DOA) A written statement of conditions, procedures and terms that a
delegate must follow in executing a delegated task.
E-procurement Electronic procurement that occurs when the activities of the
purchasing process are conducted electronically, typically over
the Internet, to shorten the processing time and lower the
transaction costs of the acquisition process.
Exigency An exceptional, compelling, emergent need or situation of force
majeure not resulting from poor planning or management or
from concerns over the availability of funds, that may lead to
serious damage, loss or injury to property or persons if not
addressed immediately.
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Expression of interest (EOI) A response to a request for expression of interest by a supplier
expressing interest in participating in a solicitation.
Financial Regulations and Rules
(FRR)
The Financial Regulations and Rules of the Preparatory
CTBTO for the Comprehensive Nuclear-Test-Ban Treaty
Organization.
General Conditions of Contract
(GCC)
A set of standard contractual provisions that are incorporated
into virtually every commercial contract of the CTBTO. The
general conditions of contract cover a range of issues, including
the status of the contractor with regard to the CTBTO, the use
of sub-contractors, indemnification, intellectual property rights,
termination and events of force majeure, dispute settlement,
privileges and immunities, standards of conduct and
amendments.
Invitation to Bid A formal method of solicitation where prospective suppliers are
requested to submit a bid for the provision of goods or services.
Normally used when the requirements are clearly and
completely specified and the basis for award is lowest cost.
Low Value Purchases (LVP) /
Miscellaneous Purchase Orders
Requisitions for procurement of goods, construction or services
with an aggregate value of less than $4000, excluding VAT. Pre-bid conference A conference held prior to the receipt of bids during which
relevant issues concerning the requirements are
discussed/clarified.
Procurement The acquisition through purchase or lease of real property,
goods or other products (including intellectual property), works
or services.
Procuring Entity The duly authorized personnel of the Secretariat responsible for
carrying out the procurement process.
Procurement plan The work plan regulating procurement activities. Usually
prepared annually at the beginning of the year.
Purchase order (PO) A type of contract that documents the purchase of goods and/or
services.
Quotation An offer in response to a Request for Quotation.
Request for expression of interest An advertisement to identify suppliers that wish to participate
in a forthcoming solicitation.
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LIST OF ANNEXES
Annex I: Terms of Reference for the Committee on Contracts.
Annex II: Working Arrangements between Procurement and Legal, Memorandum dated
1 April 2000; Legal Aspects of the Procurement Process, Memorandum ES/100/IOM dated
11 October 2001.
Annex III: Clearance by CITO for Procurement Requests for Hardware and Software,
Memorandum ADM/OD/Memo11/TD03/16 dated 15 March 2016; Clearance by CITO for
Procurement Requests for Hardware and Software, Memorandum
ADM/OD/Memo36/TD4/15 dated 15 April 2015; Requests for ICT-Related Requisitions,
Memorandum CITO/002/2014 dated 19 November 2014.
Annex IV: Equipment Replacement: Use of Station Operator/PCA Contractor to Provide
Competitive Bid, Memorandum IMS/606/00/004/nb/08 dated 11 January 2008.
Annex V: Approval for Specified Advance Payments, Memorandum ADM/OD/O/Memo
25/FB7/11 dated 27 July 2011.
Annex VI: Provisional Rules of Procedure of the Tender Opening Panel for Dealing with
Procurement Complaints.
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Annex I
Terms of Reference of the Committee on Contracts
I.1. The terms of reference of the Committee on Contracts shall be to examine and to
recommend to the Executive Secretary to approve, defer or reject:
(a) All proposals for exceptions listed in Financial Rule 11.5.06(a), (c), (e), (f), (g),
(h), (i) and (j) for contracts with an estimated amount above US$150 000
(excluding VAT) as well as proposals between US$10 000 and US$150 000 for
the same exceptions in case they are forwarded to the Committee by the Chief of
the Procurement Section;
(b) All proposed contracts for the procurement of goods, constructions or services
and other requirements which involve commitments to a single contractor in
respect of a single requisition or a series of related requisitions totalling
US$150 000 or more;
(c) All proposed contracts or series of related contracts with the same contractor
which involve income to the Secretariat of US$10 000 or more;
(d) Proposals for modification or renewal of contracts or agreements previously
recommended by the Committee, where such amendments or modifications
increase the value previously recommended for approval by the Committee on
Contracts, by more than 10 per cent or US$50 000, whichever is lower;
(e) All proposals for the amendment, modification or renewal of any contracts and/or
agreements not previously submitted to the Committee on Contracts, where the
amount in the aggregate now exceeds US$150 000.
I.2. The Committee on Contracts shall receive and register for the record the following
cases:
(a) All cases with exceptions listed in Financial Rule 11.5.06(b) and (d) for contracts
with an estimated amount of US$10 000 or more. In cases which fall under Rule
11.5.06(b) and (d), evidence to that effect shall be provided by the State Signatory
concerned. In these cases, the Substantive Officer shall record the reasons for
invoking Rule 11.5.06(b) and (d) and attach the text submitted by the State
Signatory concerned and shall convey this information to the Chairperson of the
Committee on Contracts, who shall register it for the record.
(b) Proposals for modification or renewal of contracts or agreements previously
recommended by the Committee which require insignificant changes to the
contract (e.g. changes to delivery time, address changes, changes of personnel) if
/when submitted by the Chief of the Procurement Section in writing to the
Chairperson of the Committee on Contracts.
(c) All ex post facto cases in accordance with paragraphs 5.3-5.6 of this
Administrative Directive.
Such registered cases shall be included in the minutes of the Committee on Contracts
meeting for the purpose of reporting to the Executive Secretary.
I.3. The Committee on Contracts shall also examine such other matters as may be referred
to it by the Executive Secretary, the Director of Administration or such other authorized
officers under Financial Rule 11.5.01.
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I.4. The Committee on Contracts shall review all proposals submitted and render its written
advice to the Executive Secretary. When the Executive Secretary does not accept the
recommendation of the Committee, he/she shall record his/her reasons in writing.
Composition and Procedures of the Committee on Contracts
I.5. The members of the Committee on Contracts shall be:
(a) Chief of the Budget and Finance Section (or designee), voting member;
(b) Chief of the Legal Services Section (or designee), voting member;
(c) Chief of the Quality Management and Performance Monitoring (QMPM) Section
(or designee), voting member;
(d) Chief of the Procurement Section (or designee), non-voting member;
(e) Head of the General Services Unit (or designee), voting member;
(f) Allotment Manager initiating the requisition (or designee), non-voting member;
(g) Secretary (designee from the Division of Administration), non-voting member.
I.6. Voting members shall not vote when serving in the role of Allotment Manager
initiating the requisition or when there is any other potential conflict of interest. The
Chief of the Budget and Finance Section shall be Chairperson of the Committee. In the
absence of the Chief of the Budget and Finance Section, the Chief of the Legal Services
Section shall act as Chairperson. In the absence of the Chairperson and the Chief of the
Legal Services Section, the Chief of the QMPM Section shall act as Chairperson. In the
absence of the Chairperson, the Chief of the Legal Services Section and the Chief of the
QMPM Section, the Head of the General Services Unit shall act as Chairperson. The
Chairperson or the acting Chairperson shall report directly to the Executive Secretary
in this capacity.
I.7. Representatives of the Office of the Executive Secretary and Internal Audit may be
invited to attend Committee meetings as observers.
I.8. The Committee on Contracts may invite the Procuring Entity responsible for submitting
a proposal for consideration to the respective Committee meeting. The Procuring Entity
shall provide any supplementary information deemed necessary by the Committee for
the discharge of its functions.
I.9. The Committee shall meet as often as necessary.
I.10. The meetings of the Committee shall be closed. The Secretary shall prepare minutes of
the proceedings of each meeting containing the recommendations of the Committee.
The minutes shall be approved by the Committee and sent to the Executive Secretary.
Copies of the approved minutes shall be distributed to the meeting participants as well
as to the Director of Administration and the Chief of Internal Audit.
I.11. The Committee may choose to hold meetings electronically. If there is disagreement on
any issue, a formal meeting shall be held to review the case.
I.12. The presence of three voting members, including the Chairperson or acting
Chairperson, shall constitute a quorum.
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I.13. The Committee shall normally adopt its recommendations and decisions by consensus
among voting members. If no consensus can be reached on a particular case, the
Committee may adopt its recommendation or decision by a majority vote of the voting
members attending the meeting. In the event that the votes are evenly divided, the
Chairperson or acting Chairperson shall cast the deciding vote. When a matter is
decided by voting, the views and position of each voting member or designee present
shall be recorded in the minutes. If the Committee so decides, non-voting members
other than the Secretary shall not be present when the Committee adopts its
recommendations and decisions, whether by consensus or by vote, or for any discussion
immediately prior to such adoption.
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Annex II
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Annex III
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Annex IV
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Annex V
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Annex VI
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