Chapter 01. Introduction
Table of Contents
This Procurement Manual (PM) serves as operational guidance for all staff members involved in any stage of the procurement process by describing procurement (and related) processes and procedures. The PM is expected to be applied with professional discretion and expertise by procurement practitioners and other offices involved in the acquisition and procurement process in accordance with the applicable regulations, rules and policies of the Organization. Regulations, rules and policies of the Organization that are applicable to the procurement process are set out in the various Secretary-General’s bulletins (for example, the United Nations Financial Regulations and Rules and Secretary-General’s bulletin on the delegation of authority in the administration of the Financial Regulations and Rules, including the applicable delegation of authority instrument, establishes the authority of staff members granted procurement delegation. In addition, various administrative instructions prescribe the instructions and procedures for the implementation of the Financial Regulations and Rules, the Staff Regulations and Rules, and Secretary-General’s bulletins applicable to the procurement process. For the sake of clarity, nothing in this Manual shall bind the United Nations to any particular process, outcome or course of action in relation to any particular procurement process or otherwise.
The PM is divided into fifteen (15) chapters and follows the structure – with minor deviations – of the standardized table of contents for United Nations procurement manuals, as endorsed by the High-Level Committee Management, Procurement Network (HLCM-PN), with the purpose of harmonizing procurement practices and increasing collaboration among UN entities.
There are three overall sections:
- Chapters 1 to 3 cover, respectively: introduction, organization of procurement, and vendor registration and management.
- Chapters 4 to 13 cover the steps of the acquisition process.
- Chapter 14 covers cooperation topics and Chapter 15 addresses cross-cutting topics, such as the United Nations Global Compact, emergency procurement procedures, and risk management.
Each chapter ends with a resources section, which references relevant policies, guidance materials, and templates.
The PM will be updated from time to time to ensure that it remains relevant to UN operations and up to date with best practices in public procurement.
Comments or suggestions for improvement should be directed to the Procurement Division (PD, Office of Supply Chain Management (OSCM)) at UNHQ via email at email@example.com.
Staff members are bound to comply with the Charter of the United Nations, the Staff Regulations and Rules, the Financial Regulations and Rules and all other relevant administrative issuances.
Requests for clarifications to any of the provisions of the PM shall be referred to the Director, PD.
This PM replaces and supersedes entirely all the previous versions of the Procurement Manual.
As a steward of the funds entrusted to its care by the Member States, it is necessary for the UN to achieve Best Value for Money (BVM) in procuring goods, services, and works, according to mandates given to the UN by the General Assembly. It must do so, and be seen to be doing so, with fairness, integrity, and transparency. These principles are the foundation of UN procurement. Staff members are expected to comply with these procurement principles in performing their work with a high level of care and professionalism.
Financial Regulation 5.12 requires that the following general principles shall be given due consideration:
- Best Value for Money
- Fairness, integrity, and transparency
- Effective international competition
- The interest of the UN
In addition to the principles contained in Financial Regulation 5.12, Procurement Officials must also ensure that the procurement actions they undertake are taken in a manner that always strives to meet the needs of the client in the most efficient and effective manner possible. Accordingly, client orientation and the adoption of a client service approach are key principles that must guide how Procurement Officials conduct and organize their work daily (see section 1.4.5).
The following chapters provide an outline of each principle and the related expectations towards those involved in the procurement process and its principles
‘Best Value for Money’ shall be understood as the optimization of the total cost of ownership and quality needed to meet the user’s requirements, while taking into consideration potential risk factors and resources available. The Best Value for Money solution may not necessarily offer the lowest cost.
In order to obtain Best Value for Money, Requisitioners and Procurement Officials should:
- a. Plan for demand in a timely manner and define an acquisition strategy based on an analysis of the demand and supply market;
- b. Strive to maximize competition;
- c. Conduct the procurement exercise after good planning and pursuant to clear specifications;
- d. Carefully establish the evaluation criteria prior to the issuance of the solicitation document (in order to select the offer to meet needs in accordance with the evaluation parameters set forth in the solicitation documents);
- e. Ensure that all costs are considered within the total cost of ownership, including transportation costs, installation costs, operating costs, maintenance costs, disposal costs, etc.;
- f. Ensure that benefits are optimized, and financial and operational risks and any other adverse impacts are minimized;
- g. Ensure impartial and comprehensive evaluation of offers, in a timely manner and in accordance with the pre-established criteria;
- h. Ensure that the vendor whose offer is considered can satisfy the requirements.
To achieve BVM, the procurement process must protect the Organization from proscribed practices and be conducted on the basis of clear and appropriate regulations, rules, and procedures that are applied consistently to all potential vendors. Further, the way the procurement process is undertaken must provide all internal and external stakeholders of the Organization with assurances that the process is fair and transparent, and that integrity has been maintained.
Application of the fairness principle means, among other things, that the UN must offer equal opportunities to all bidders 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 favoritism, self-interest, or preference in judgment.
Integrity requires an Organization or individual to exhibit probity in their actions. Probity means having strong moral principles and honesty and decency in dealing with others. Integrity is reflected in truthfulness that is apparent in professional and personal undertakings and adherence to commonly accepted moral and ethical standards.
Transparency for the purpose of this Manual means that all information on procurement policies, procedures, opportunities, and processes is clearly defined, made public, and/or provided to all interested parties concurrently. A transparent system has clear mechanisms to ensure compliance with established rules (unbiased specifications, objective evaluation criteria, standard solicitation documents, equal information to all parties, the confidentiality of offers, etc.). Those mechanisms include records that are open, as appropriate, to inspection by auditors.
Unsuccessful vendors for eligible bids can be briefed on the strengths and weaknesses of their own offers. Award information, as determined by the UN, is disclosed publicly. Transparency ensures that any deviations from fair and equal treatment are detected early in the process, making such deviations less likely and thus protecting the integrity of the process and the interests of the Organization.
By fostering effective international competition among vendors, the UN applies the principles of fairness, integrity, and transparency to achieve Best Value for Money.
Effective international competition is concerned with ‘right time, right quality, and right price’, meaning:
- a. Adequate notification should be given to as geographically broad as possible vendor community to ensure that there is sufficient time to participate in the procurement processes;
- b. There should be no restriction of competition through over-specification (e.g. the inclusion of unjustified or unrealistic requirements in the specifications and/or Terms of Reference (TOR) or Statement of Work (SOW)) or under-specification (e.g. the omission of essential information in the specifications and/or TOR/SOW);
- c. Economies of scale (i.e., quantity/volume discounts, fewer resources invested, and reduced administrative costs) can be achieved when procurement volumes for identical or similar requirements are consolidated in a single solicitation.
For more details see section 6.2.1.
All procurement activities will be carried out in compliance with the applicable legislative framework. In this regard, the Financial Regulations and Rules (Financial Regulation 5.12) require that due consideration be given, among others, to the interest of the United Nations when exercising the procurement functions of the United Nations. The best interest of the United Nations shall be determined by the professional judgment of the appropriate official with the authority to make such a determination.
At their core, all procurement activities serve to meet ongoing and future requirements of the United Nations. Accordingly, Procurement Officials must ensure that they always adopt a client service approach and maintain proper client orientation throughout the procurement process. While recognizing the procedures for proper segregation of duties and the need to maintain the confidentiality of information, Procurement officials must ensure that clients are informed of, and where necessary, involved in all key decisions as well outcomes thereof. In return, procurement Officials must ensure that they are fully informed of the client’s needs and objectives and that they always foster close cooperative relationships. As a result, Procurement Officials empower the United Nation’s supply chain to deliver what clients need, where they need it at the best possible price.
All procurement transactions must be conducted in a professional manner and in accordance with the highest ethical standards. When fraudulent and corrupt practices occur, the damage extends far beyond financial losses, posing serious threats to the Organization’s credibility and to its ability to achieve its operational and programmatic objectives.
Staff members must demonstrate the highest standards of efficiency, competence, and integrity. Integrity includes, but is not limited to, probity, impartiality, fairness, honesty, and truthfulness in all matters affecting their work and status. In accordance with the Charter of the United Nations, the Staff Rules and Regulations and the Standards of Conduct for the International Civil Service, staff members should refrain from any action which might adversely reflect on their status as international civil servants responsible only to the Organization or on the integrity, independence, and impartiality that are required by that status.
Each UN staff member must take an Oath of Office to the Organization, to “[…] solemnly declare and promise to exercise in all loyalty, discretion and conscience the functions entrusted […] as an international civil servant of the United Nations, to discharge these functions and regulate conduct with the interests of the United Nations only in view, and not to seek or accept instructions in regard to the performance of duties from any Government or other source external to the Organization.” Furthermore, staff members “[…] also solemnly declare and promise to respect the obligations […] set out in the Staff Regulations and Rules.”
All staff members must observe the highest ethical standards throughout the procurement process. The process must allow all bidders to compete on an equal and transparent basis. All staff members that are associated with the acquisition process are responsible for protecting the integrity and fairness of the process.
Procurement Officials must mitigate the risks of conflicts of interest, fraud, and corrupt practices at all stages of the acquisition process. To do so, they must implement measures to identify conflicts of interest, fraudulent and corrupt practices, and deploy appropriate responses to prevent these improprieties. All staff members whose principal duties involve the procurement of goods and services for the Organization are required to participate in the United Nations Financial Disclosure Programme. During the pre- solicitation phase, staff members involved in the acquisition process must not allow bidders access to specific, privileged information of a technical, financial, or other nature, before it is publicly available to the business community at large. In the preparation of solicitation documents, such as the SOW or TOR, staff members should not use restrictive specifications that may discourage competition. Staff members may not disclose proprietary and source selection information, directly or indirectly, to any individual who is not authorized to receive such information at any time prior to or after the selection and contracting process.
Proper standards of conduct must be enforced during emergency situations, where the pressure to achieve rapid results may increase the risks of actual or possible conflicts of interest, fraud, or corruption.
Further guidance on the ethical and professional obligations of UN staff members may be obtained from the following sources:
- a. Staff Rules & Regulations (ST/SGB/2018/1);
- b. Standards of Conduct;
- c. Status, Basic Rights and Duties of United Nations Staff Members (ST/SGB/2016/9);
Staff Regulations 1.2(m) and 1.2(n) and Staff Rule 1.2(q) outline the duties of staff members regarding the management of actual or possible conflicts of interest. In order to avoid conflicts of interest, staff members who have a financial interest in a bidder are prohibited from involvement in any procurement process involving such bidder. Financial interest includes, but is not limited to, interest in a business consisting of any stock, stock option, or similar ownership interest, but excludes any interest solely by means of investment in a business through a mutual, pension, or other institutional investment funds over which the staff member does not exercise control. Financial interest also includes the receipt of, or the right or expectation to receive, any income in one or more of the following forms: consulting fees, honoraria, salary, allowance, forbearance, debt forgiveness, interest in real or personal property, dividends, royalties derived from the licensing of technology or other processes or products, rent, or capital gains, job offers to family members, etc. A staff member who is involved in his or her official capacity in any matter relating to a profit-making business or other concern in which s/he holds a financial interest, directly or indirectly, should disclose that interest to the Head of Office and have the conflict of interest resolved in the best interests of the Organization.
The staff member should either dispose of that financial interest or formally recuse himself/herself from the procurement matter which might give rise to the conflict of interest, in accordance with Staff Regulation 1.2(m) and Staff Rule 1.2(q).
Staff members with a personal or professional interest in a bidder are also prohibited from any involvement in the acquisition process. Personal or professional interests include, but are not limited to, affiliations with any organization or enterprise over which the staff member, alone or together with an immediate family member (i.e., employee's spouse or domestic partner, and dependent children), exercises a controlling interest. These interests may also involve any corporation, partnership, sole proprietorship, firm, franchise, association, organization, holding company, joint-stock company, receivership, business or real estate trust, or any other nongovernmental legal entity organized for-profit, non-profit, or charitable purposes. Interest may also involve any executive position or membership on the bidder’s board regardless of compensation, or any position that includes responsibilities for a significant segment of the bidder’s operation or management of a business.
Staff members involved in the acquisition process should promptly notify the Head of Office of any case where a conflict of interest may arise. They may also seek confidential advice from the Ethics Office. The Head of Office must review the facts and determine whether the staff member may perform any functions related to the solicitation. When in doubt, heads of office are advised to consult with the Ethics Office on any case where a conflict of interest may arise. To prevent a conflict of interest, vendors, contractors, and consultants are prohibited from bidding for procurement contracts if they, or their affiliates, provided consulting services for the preparation and implementation of a project.
Staff members should not be actively associated with the management of, or hold a financial interest in, any profit-making business or other concern if it were possible for the staff member or the profit-making business or other concern to benefit from such association or financial interest by reason of his or her UN position.
In accordance with Staff Rules 1.2(j) and 1.2(k) and ST/AI/2010/1 on Reporting, Retaining, and Disposing of Honours, Decorations, Favours, Gifts or Remuneration from Governmental and Non-governmental Sources, staff members must not accept any honour, decoration, favour, or gift from a Government. If the refusal of an unexpected honour, decoration, favour, or gift from a Government would cause embarrassment to the Organization, the staff member may receive it on behalf of the Organization and then report and entrust it to the Secretary-General. The Secretary-General will either retain it for the Organization or arrange for its disposal for the benefit of the Organization or for a charitable purpose.
UN staff members who perform any function in the acquisition process should not accept any form of hospitality; gifts; inducements, including bribes; or incentives such as free or discounted goods and private services. The UN operates a zero-tolerance policy in this regard.
Staff members must fully respond to requests for information from the Organization, including staff members and other officials of the Organization who are authorized to investigate the possible misuse of funds, waste or abuse.
Collusion between UN staff members or between UN personnel and vendors may influence UN personnel to restrict the list of vendors or otherwise manipulate the procurement process in order to obtain illegal financial rewards, including kickbacks or bribes. To mitigate these risks, UN personnel should not perform critical steps of the procurement process alone, including negotiating with vendors, attending bidders’ conferences, or evaluating technical criteria.
When different vendors have the same owners or are otherwise associated, competition may not be meaningful or fair. Improper granting of ‘sole vendor’ status reduces competition. To promote genuine competition, it is important to ensure a large pool of competitive vendors and minimize exceptions to the requirement for competitive bidding or waiver cases, especially on a ‘sole sourcing’ basis. In many supply markets, there may be limited sources, which pose a risk to competition. In such cases, staff members should perform a thorough and carefully documented supply market analysis.
184.108.40.206 Ethical Behavior of Vendors and the Supplier Code of Conduct
The UN expects all vendors who wish to do business with the Organization to comply with the United Nations Supplier Code of Conduct, which reflects the core values outlined in the Charter of the United Nations. As such, an acknowledgment of the United Nations Supplier Code of Conduct is a requirement to register as a vendor in the United Nations Global Marketplace (UNGM). The United Nations Supplier Code of Conduct includes principles of the United Nations Global Compact on Labour, Human Rights, Environment, and Ethical Conduct (see Chapter 15.1 The United Nations Global Compact), and sets the minimum requirements expected by vendors across their supply chain.
Vendors have the obligation to comply with the UN General Conditions of Contracts, which contain specific prohibitions on mines, child labour, sexual exploitation, and the fundamental rights of workers. The UN General Conditions of Contracts form an integral part of every contract between the UN and a vendor.
220.127.116.11 Proscribed Practices by Vendors and Vendor Sanctions
The UN strives to promote the public good in the area of peace and security. In spending public funds, the UN aims to meet the highest standards of integrity and competency and demands no less from those who wish to work with the UN.
The UN shall impose sanctions on vendors that have engaged or attempted to engage in proscribed practices, as set forth in Chapter 3.5 of this Procurement Manual.
18.104.22.168 Vendor Conflict of Interest
To avoid any distortion of competition and ensure a fair process, the UN requires that vendors participating in a procurement process shall not have a conflict of interest.
Vendors must disclose any actual or potential conflict of interest in their bid submissions, which renders them ineligible for that procurement process unless the conflict of interest is resolved in a manner acceptable to the UN. Failure to disclose any actual or potential conflict of interest may lead to the vendor being sanctioned.