Chapter 14. Cooperation
Table of Contents
Cooperation in procurement among organizations of the UN system can result in significant benefits due to economies of scale, reduced transaction costs, agility and improved relations with suppliers. It can also be instrumental in supporting the UN Secretariat’s operations in areas of the world where no or little internal procurement capacity exists and, vice versa, support other UN organizations with their requirements.
Utilizing cooperation to meet the UN’s requirements does not release Procurement Officials from ensuring that the transaction represents the best value for money and is fully in line with the principles enshrined in Financial Regulation 5.12. Accordingly, cooperation is an alternative sourcing option which must be duly justified as an alternative to carrying out a competitive solicitation or a sole-source decision by the Organization itself.
In the context of this chapter, the term UN Organization refers to any organization of the UN system (excluding UN Secretariat entities).
“Delivering as One” and other UN reform initiatives have accelerated efforts among organizations of the UN system to collaborate and cooperate on procurement. The High-level Committee on Management’s Procurement Network (HLCM-PN) has also endorsed specific guidance to facilitate collaborative procurement. Moreover, the issuance of the “Mutual Recognition” statement in 2019 formalizes the commitment of organizations of the UN system to use or rely on other organizations of the UN system’ 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 purpose of this section of the Manual is to provide the guiding principles for the UN Secretariat’s procurement cooperation with other UN Organizations.
The Procurement Approving Authority for Financial Rule 105.16(a)(iii) in conjunction with Financial Rule 105.17(a) may determine that cooperation with other UN Organizations is appropriate to meet the procurement requirements of a UN Secretariat Entity and may authorize it in writing. Cooperation may be considered appropriate to, inter alia, obtain volume discounts or achieve process or operational efficiencies. In taking a decision to make an award under FRR 105.17 (a), the Procurement Approving Authority shall ensure that both the decision and the justification for such decision are recorded in writing.
Cooperation with UN Organizations may take the following forms, in accordance with Financial Rule
- a. Carrying out common procurement actions together, i.e. establishing and using joint LTAs and contracts (joint solicitation, lead agency agreement);
- b. The UN Secretariat entering into a contract relying on a procurement decision of another UN Organization (using LTAs or contracts of other UN Organizations, i.e. piggybacking);
- c. Requesting another UN Organization to carry out procurement activities on behalf of the UN Secretariat (using procurement services of other UN Organizations).
Should the requirement to be sourced through cooperation relate to Strategic Goods and Services, a request for LPA shall be sought the Director, PD (see section 2.6.4).
A UN Secretariat entity may undertake joint procurement activities with one or more UN Organizations if so approved by the Procurement Approving Authority for Financial Rule 105.16(a)(iii) in conjunction with Financial Rule 105.17(a). This method of cooperation ensures that the business volumes and requirements of all participating Organizations are taken in consideration at the solicitation stage, so it is preferable over piggybacking. UN Secretariat Entities should plan joint procurement exercises with sufficient time to allow for coordination of requirements and business volumes across UN Organizations.
Generally, one organization will lead the solicitation process under its own financial regulations and rules. Cooperating UN Organizations will jointly agree on the Solicitation documents and evaluation criteria and may jointly evaluate the Submissions. The Solicitation documents should clearly specify the expected contractual form for effecting the procurement. Joint Solicitations are subject to the review requirements of the lead UN Organization only, except in those cases where the applicable evaluation criteria or the resulting award differs from that of the lead UN Organization.
The Procurement Official should ensure that the resulting contract drafted by the Lead UN Organization contains all the information required for the UN Secretariat to be able to order and obtain goods and/or services as per the contract. Alternatively, the Procurement Official may choose to draft a separate contract for the UN Secretariat based on the results of the joint solicitation, if there are reasons to believe that this would be advantageous despite the additional efforts and administrative costs.
14.1.2 The UN Secretariat entering into a contract relying on a procurement decision of another UN Organization (using LTA or contracts of other UN Organizations and/or using other UN Organization’s solicitation results – piggybacking)
A UN Secretariat entity may use a contract (including purchase orders and/or long-term agreements) concluded by another UN Organization, provided that the contract satisfies the UN Secretariat entity’s requirements, specifically in terms of value for money and fit-for-purpose. Such an assessment should be determined and guided by the following:
- a. The value of the UN Secretariat entity’s requirement is less than or equal to the value of the contract of the UN Organization. A contract should not be used to order disproportionately higher volumes than intended, especially for goods/services with volume discounts not reflected in the contract; and
- b. The vendor offers goods or services to the UN Secretariat entity at the same (or lower) price than in the contract and with the same terms and conditions. Procurement Officials shall conduct price negotiations as applicable; and
- c. The UN Secretariat entity’s requirements are equivalent to those included in the contract;
For each procurement requirement, approval to commence procurement action shall be sought from the Procurement Approving Authority for Financial Rule 105.16(a)(iii) in conjunction with Financial Rule 105.17(a)
The Procurement Official shall ensure that Best Value for Money is obtained when piggybacking on a contract already established by another UN Organization. In terms of the time lapsed from the procurement action of the UN Organization, the UN Secretariat entity may consider piggybacking on said contract, if either one of the two following conditions are met:
- The contract of the UN Organization is valid;
- The award by the UN Organization was made within the 12 months prior to the proposed award by the UN Secretariat entity. For some categories, like freight forwarding, fuel requirements, etc. the reasonable time lapsed from the award by the UN Organization may in practice be more limited and Procurement Officials shall exercise due diligence to ensure that the UN Secretariat is obtaining Best Value for Money when piggybacking.
If the UN Secretariat entity is satisfied that the financial regulations and rules of the UN Organization are consistent with that of the UN and that the contract has been established in accordance with the procedures established in the respective UN Organization, a review of the award by a UN Secretariat Review Committee shall not be required. The UN Secretariat entity shall ensure that:
- The UN Organization has authorized in writing the use of its contract by the UN Secretariat entity (e.g. through a signed HLCM-PN-endorsed LTA information sheet (see Annex 28)). In addition, the UN Secretariat entity must obtain a signed copy of the UN Organization’s contract (including purchase orders or LTA).
- The vendor on the UN Organization’s contract is eligible with respect to the UN Secretariat’s requirements on vendor eligibility and registered at the correct level;
- The vendor accepts the UNGCC.
A separate agreement, typically in the format of a purchase order or a contract, must be signed and counter-signed between the vendor and the UN Secretariat entity. The approval of the Procurement Approving Authority in the UN Secretariat under Financial Rule 105.17(a) shall be obtained prior to signature of the separate agreement; its term should not exceed the term of the UN Organization’s contract.
LTAs of other UN Organizations are available at www.ungm.org, and more specifically under the following link: https://www.ungm.org/UNUser/LongTermAgreement/SearchLTAs.
Under certain circumstances it may be advantageous or necessary to request a UN Organization to carry out certain procurement activities on behalf of a UN Secretariat entity. Those activities should be carried out on the basis of an appropriate legal instrument. For each procurement requirement, approval to commence procurement action shall be sought from the Procurement Approving Authority for Financial Rule 105.16(a)(iii) in conjunction with Financial Rule 105.17(a). Such engagement of another UN Organization to carry out procurement activities on behalf of the UN Secretariat entity may be considered in the following situations:
- a. Expertise. When the UN Secretariat entity acknowledges the existence and validity of the particular expertise of another UN Organization in the procurement of specific goods, works or services, the Procurement Approving Authority may authorize such UN Organization to carry out procurement activities for the specific goods, works or services and designate such UN Organization as the procurement agent for the UN Secretariat entity.
- b. Procurement / Administrative Capacity. When the UN Secretariat entity does not have the necessary procurement and/or administrative capacity in a country nor the UN Secretariat can provide the necessary support locally, from PD or from a DOS-assigned service provider, procurement actions may be undertaken on behalf of the UN Secretariat entity by the representative of a UN Organization with the necessary procurement and administrative capacity (e.g. representative of the local United Nations Development Programme), in accordance with the regulations and rules of that UN Organization.
Annex 28 - Long Term Agreement Information Sheet
SCOG_SR5: Acquire through Cooperation with United Nations Organizations
In accordance with Financial Rule 105.17(b), “the UN “may, to the extent authorized by the General Assembly, cooperate with a Government, nongovernmental organization or other public international organization in respect of procurement activities and, as appropriate, enter into agreements for such purposes.”
Any other contractual instruments used under the provisions of Financial Rule 105.17(b), such as Memoranda of Understanding, Letters of Assist involving payment to a government or to a non- governmental organization or other public international organizations for goods and/or services has to follow the procurement principles outlined in Financial Regulation 5.12.
Procurement delegation for such instruments under Financial Rule 105.17(b) lies with the Director, PD for any instruments issued up to a value of US$ 1,000,0000 and with the ASG, OSCM for those exceeding US$ 1,000,0000 only.
Letters of Assist can only be considered if a commercial sourcing solution cannot meet the requirements, and cover the following:
- a. Goods with associated services of a strictly uniformed capability nature or use;
- b. Goods and/or services not strictly of uniformed capability nature or use but unavailable through commercial solutions, existing stock;
- c. Transportation services for the movement of UN uniformed personnel and/or goods to or from a Mission area which are provided by the respective Troop/Police Contributing Countries at the Member States prerogative, subject to compliance with the operational requirements, including timeline and deployment location, and at a rate not to exceed what it would cost the Organization to conduct through commercial, or other competitive means;
- d. Dietary or other requirements unique to a contingent that are available only from the country of the individual contingent, and procurement of which is facilitated or expedited by procurement through the government of the contingent, provided that the cost to the UN of such procurement is not higher than the cost of the same items if procured through commercial sources;
- e. Ammunition, if a commercial solution is not available or feasible;
SCOG_SR3: Acquire through Letters of Assist