Chapter 15. Transverse Topics
Table of Contents
15.1 The United Nations Global Compact
15.2 Sustainability Considerations
15.4 Emergency Procurement Procedures
15.4.2 Funds and Issuance of Solicitations
15.4.3 Needs Assessment and Requirement Definition
15.4.8 Contract Administration
15.1 The United Nations Global Compact
Procurement Officials and Requisitioners should be aware that the United Nations encourages vendors to participate in the UN Global Compact. The UN Global Compact is a voluntary international corporate network established to support the participation of both private and public-sector actors in advancing responsible corporate citizenship and universal social and environmental principles to meet the challenges of globalization.
The Ten Principles of the UN Global Compact are as follows:
Principle 1. Businesses should support and respect the protection of internationally proclaimed human rights;
Principle 2. Make sure that they are not complicit in human rights abuses.
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;
Principle 6. The elimination of discrimination in respect of employment and occupation.
Principle 7. Businesses should support a precautionary approach to environmental challenges;
Principle 8. Undertake initiatives to promote greater environmental responsibility;
Principle 9. Encourage the development and diffusion of environmentally friendly technologies.
Principle 10. Businesses should work against all forms of corruption, including extortion and bribery.
The UN strongly encourages all vendors to actively participate in the UN Global Compact. To that end, the UN Supplier Code of Conduct has been developed with recognition of the importance of the Ten Principles of the UN Global Compact, and it is viewed as an important means of integrating the Compact’s principles into the operations of the UN.
15.2 Sustainability Considerations
Given the scale of its procurement activities, the UN has the potential, within its existing legislative framework and procurement guiding principles, to motivate markets to innovate and contribute to achieving global goals. The UN itself has been encouraged by the Member States to integrate sustainable development practices into its operations in support of the sustainable development agenda.
Requisitioners and Procurement Officials should be aware of the Sustainable Development Goals (SDGs) and inter-agency initiatives on procurement practices that incorporate the social, economic and environmental principles of sustainable development in support of SDG 12 and target 12.7.
Integrating the economic dimension of the sustainable agenda means to strive for the best value for money and, in particular, the whole life costs of a product or service, as well as for wider support for economic development.
Considering its environmental dimension is to strive for reduction of the negative environmental impact a product or service has over its whole life-cycle, including issues such as water, land and air pollution, waste generation and disposal options, environmental risks from wastewater and hazardous waste, and greenhouse gas emissions that contribute to climate change, preservation of natural ecosystems, waste reduction and management, and air and water pollution.
The social dimension of the sustainable agenda considers the promotion of human rights, elimination of child labour, fair labour conditions, gender equality, and wider ethical issues in the supply chain. For instance, to enable the implementation of the Convention on the Rights of Persons with Disabilities, as well as the achievement of the Sustainable Development Goals, the United Nations Disability Inclusion Strategy calls for specific action to raise the standards of the United Nations performance on disability inclusion across its operations, such as the inclusion of accessibility considerations into relevant procurement activities.
A number of General Assembly and Security Council resolutions have requested the Organization to address and minimize the environmental impact of its operations, including through the establishment of Environmental Management Systems (EMSs). The main priorities of the EMSs are improved waste and water management, increased energy efficiency, the progressive transition to renewable energy and an overall reduction of greenhouse gas emissions.
Factoring sustainability considerations at the requirements definition stage can provide added value to the Organization, by promoting resource efficiency, leveraging innovation and advancing the SDGs. Requirements must be transparent, measurable and proportionate to what the market can reasonably offer and must not restrict international competition. Category Strategies may also provide guidance on incorporating sustainability considerations into the sourcing solutions for certain goods and services.
In general, Requisitioners, Procurement Officials and contract managers are expected to encourage UN vendors to adopt sustainable and socially responsible policies aligned with the UN Global Compact’s ten principles in the areas of human rights, labour, the environment, and anti-corruption in accordance with the UN Supplier Code of Conduct.
Any integration of sustainability considerations must be undertaken within existing legislative frameworks, particularly Financial Regulation 5.12.
Risk Management can be defined as the set of policies, procedures, and practices involved in the identification, analysis, assessment, control, avoidance, minimization, or elimination of unacceptable risks. The following UN policies address risk management elements and are particularly relevant to procurement:
a. UN Financial Regulations and Rules;
b. Staff Regulations and Rules of the United Nations (ST/SGB/2018/1);
c. Financial Disclosure Programme (ST/SGB/2006/6);
d. ST/AI on Review Committees (to be issued shortly);
e. This Procurement Manual;
f. Enterprise Risk Management and Internal Control Policy (issued May 2011);
g. Anti-Fraud and Anti-Corruption Framework (ST/IC/2016/25);
h Delegations of Authority in the administration of the Staff Regulations and Rules and the Financial Regulations and Rules (ST/SGB/2019/2);
i. Debrief Guidelines; and
j. ARB Terms of Reference.
The above policies and this PM provide for, amongst others, the following risk management measures:
a. Framework for delegation of authority in procurement (see Chapter 2.6 Procurement Authority);
b. Identification of other critical roles in the procurement process and linkages of these roles to specific procurement training requirements;
c. Review of procurement processes by Review Committees;
d. Procedures for an independent internal investigation of fraud and other proscribed practices by OIOS, and mechanisms to determine sanctions for vendors;
e. Bid protest/procurement challenge mechanisms for vendors (see Chapter 10.2.2 Debrief Procedures);
f. Solicitation and contract templates adjusted to critical requirements, such as food, fuel, aviation, etc.;
g. Risks in procurement can originate in any stage of the procurement process. At the procurement process level, the Requisitioner should work closely with the Procurement Official in identifying potential risks, assessing impact and probability to understand the consequences, and putting in place appropriate mitigation measures. The table below shows some examples of procurement risks, their possible consequences, and potential risk mitigation actions to be put in place.
Risk Mitigation Actions
Planning and Strategy
Delay in procuring critical
requirements for the
Delay in project outputs and outcomes, impacting other stakeholders
Early planning of procurement processes
Adoption of appropriate strategies, including usage of LTAs if appropriate
Requirement s Definition
Restrictive requirements definition
Limited vendor response Claims by vendors of unfairness and lack of transparency
Improved product and market understanding through market research
Include generic functional and performance specifications
Low interest in the procurement process
Delays (if need to re-tender) Higher prices (if perceived there is no competition)
Publish tender widely and with ample tender period Conduct pre-bid meeting
Selecting vendors with unethical past conduct
Damage UN reputation
Check all vendors against ineligibility lists Conduct background check on recommended vendor, prior to award
Failure of vendor to perform the contract
Contract disputes Inadequate quality of goods, services, or works Delays
Include adequate evaluation criteria in solicitation document
Employ active contract management actions Conduct regular inspections and progress reports.
TABLE 7. PROCUREMENT RISK, POTENTIAL CONSEQUENCES & RISK MITIGATION ACTIONS
15.4 Emergency Procurement Procedures
In 2016, in response to the recommendations of the High-level Independent Panel on Peace Operations, the Secretary-General established standing administrative measures for start-up and crisis situations to achieve faster deployment and more agile support to field operations. The Secretary-General, on the advice of the relevant senior officials, can activate the standing administrative measures, which apply for six months on a renewable basis, upon the establishment of a peace operation or certification of a crisis or emergency in the field. These measures are intended to enable the Organization and managers to respond quickly and accountably, as required in each specific situation, to extraordinary requirements through increased levels of delegation of authority, piggybacking on any contracts established by other Secretariat offices or other UN entities while remaining in full compliance with Regulations and Rules of the Organization.
Other mechanisms available to respond to exigent procurement situations are the personal delegation of procurement authority for emergency situations to the Director, PD in the amount of US $10 million and the application of the Financial Rule 105.16(vii) – when there is an exigency for the requirement. The personal delegation of procurement authority for emergency situations to the Director, PD needs to be activated by the ASG, OSCM or USG, DOS.
All UN procurement must be undertaken in compliance with the Financial Regulations and Rules, other relevant applicable legislative instruments, and this PM. The EPP allows the UN to use simplified processes to facilitate rapid response during an emergency situation without compromising the principles of Financial Regulation 5.12. The use of EPPs is limited to only those defined under this Chapter 15.4.
All other situations of importance and urgency must be dealt with through the application of regular procurement procedures.
Financial Regulations and Rules allow exceptions where the exigencies of UN operations do not permit procurement to be undertaken through formal methods of solicitation. However, reasonable efforts should be made during an emergency situation to still follow a process wherein several offers are compared to ensure Best Value for Money for the UN.
The EPP described in the following sections permit a solicitation process using RFQs and associated procedures.
Definition of Emergency Situation: For the purposes of this chapter, emergencies are defined as “urgent situations in which there is clear evidence that an event or a series of events has occurred which imminently threatens human life/lives or livelihoods, and where the event or a series of events produces disruption in the life of a community on an exceptional scale.” The event or a series of events can comprise any of the following:
a. Sudden calamities such as earthquakes, floods, locust infestations, and similar unforeseen disasters;
b. Human-made emergencies resulting in an influx of refugees or the internal displacement of populations, or in the suffering of otherwise affected populations;
c. Drought, crop failures, pests, and diseases that result in an erosion of communities and vulnerable populations’ capacity to meet their basic needs;
d. Sudden economic shocks, market failures, or economic collapse resulting in an erosion of communities’ and vulnerable populations’ capacity to meet their basic needs;
e. A complex emergency for which the government of the affected country or the Head of Agency of a UN organization has requested the support of the UN;
f. Other event(s) that, in the opinion of the ASG, OSCM or USG, DOS, would fall under the definition of a genuine emergency situation.
Approval of the Use of Emergency Delegation of Procurement Authority:
Request for approval of the activation of Special Delegation for Emergencies must be presented by the Director, PD to the ASG, OSCM and shall include the background information and justification for its use, as well as a description, approximate value, quantity, and requirements of the estimated procurement needs under the specific operation. Approval requests must also provide justification that none of the discretionary authority of the respective Procurement Approving Authority will achieve the procurement needs of the emergency operation.
The approval for use of EPP is time-bound, limited to a specific operation, and may also be limited to the procurement of defined products in relation to a specific operation. This delegation, when activated, is envisaged exclusively for the Director, PD. However, Heads of Entity are fully empowered to take action in accordance with financial rule 105.16 (a) (vii) in cases of exigency as defined by the General Assembly decision 54/468 (see section 6.11.9). Such action can be undertaken regardless of the strategic nature of the goods and/or services and, where justified by the circumstances at hand, without any prior approval.
Reporting and Monitoring:
a. The UN monitors the use of EPP and keeps a record of its use, which will be audited regularly;
b. The Director, PD shall submit a report of all procurement conducted under the emergency delegation of authority every week from its issuance to the ASG, OSCM with a copy to HCC Chairperson. The obligation to report every week holds even if no purchases have been executed during the previous seven calendar days. All cases exceeding the usually delegated authority of Director, PD shall be submitted to the HCC for review on an ex post facto basis;
c. PD shall submit a report on the status of each requirement to the Requisitioners or to the Emergency Task Force (as the case may be) on a periodic basis, depending on the severity of the emergency and the reporting requirements of the Emergency Task Force or management;
d. If there is a need to issue purchase orders and/or contracts outside of UMOJA, Procurement Officials shall record such purchase orders/contracts into a consolidated report. At the earliest of the (i) conclusion of the emergency period or (ii) when funds become available in UMOJA and upon issuance of a Shopping Cart by the Requisitioner, the Procurement Official shall issue the purchase order/contract in UMOJA.
Strategic Planning of Emergency Procurement:
By definition, emergencies are often caused by unforeseen events, and therefore procurement needs may change and cannot be anticipated. However, proactive measures can be taken to ensure preparedness to carry out emergency operations. Planning for emergencies is an important part of UN regular procurement planning. The following activities are examples of proactive measures that can facilitate EPP:
a. Advance identification and registration of suitable vendors of products frequently requested in emergency operations, including confirmation by vendors of willingness to respond to solicitations on short notice;
b. Development of standard specifications/TORs/SOWs for goods, services, or works typically requested in emergency operations;
c. Establishment of LTAs with vendors of products typically requested in emergency operations, and specifying in LTAs the need for stock availability and emergency preparedness;
d. Identification of relevant LTAs from other United Nations organizations.
PD will work continuously on the above in order to help ensure that the organization is prepared for emergency situations. To make strategic planning relevant, it is of the utmost importance that UN Procurement Officials involved in emergencies provide input and lessons learned after each emergency operation. Strategic planning measures as listed above are also relevant in certain decentralized UN offices.
In all emergency situations, the business unit concerned should liaise with the Director, PD in order to guarantee early information exchange and proactive measures to be taken. Further, lessons learned should be codified, as they form crucial input to process improvements and help better the management of future emergency situations.
Emergency Procurement Procedures:
During emergency operations, Procurement Officials may alter the regular procurement procedures as outlined in this section. When faced with an emergency procurement activity, Procurement Officials should, as feasible:
a. Conduct backward planning, i.e., plan procurement activities starting from the time the goods have to be delivered, counting backward to determine the maximum length of time required for each procurement step (solicitation, evaluation, award, contract issuance, etc.);
b. Determine proactively the likely availability of team members for evaluation;
c. Issue urgent notifications to relevant stakeholders involved in the process so that they can be prepared to respond faster (e.g. Chairperson of HCC, ASG OSCM, etc.).
Emergency Procurement Procedures (EPP) are less formal and offer more flexibility than the regular procurement procedures applicable in non-emergency situations. At the discretion of the Director, Procurement Division, more conservative procedures might be imposed through the issuance of written instructions to the business unit. For example, this might include requiring the transmittal of receipt of offers to a secure email address or fax number, if available.
15.4.2 Funds and Issuance of Solicitations
In emergency situations, it will often be necessary to initiate solicitation processes prior to receiving the funds. However, in emergency situations, the severe impact of delays may justify the commencement of the process prior to the confirmation of the availability of funds. The market must be informed of the UN right to cancel the solicitation and reject all offers received.
Similarly, in such situations, it may be necessary to issue purchase orders and sign contracts outside UMOJA.
Under no circumstances should an order be placed, or a contract signed prior to the confirmation of funds by the Requisitioner.
15.4.3 Needs Assessment and Requirement Definition
The assessment of the functions, performance requirements, characteristics, objectives, and/or expected outputs of the product to be procured are no less important when procured under EPP. To the extent possible, the regular procedures for requirements definition specified in Chapter 4.4 of this PM should be followed. However, since emergency procurement is often done under time constraints and the RFQ method of solicitation allows more flexibility, less formality can be accepted for requirement definition in emergency situations. The following points should be considered:
The use of brand names in requirement specifications, which is generally not allowed under the regular procedures, may be used in emergency procurement if it aids description of the required product. To avoid restricting competition, the words ‘or equivalent’ should be added unless a particular brand is required for standardization purposes. It should also be stated that the equivalent brand name products would be accepted. Standardization is particularly sensitive in emergencies: requirement of a specific brand might delay the delivery, while other brands could be readily available or ex-stock;
Product instructions and standard specifications/TOR previously developed and available through the UN;
Existing LTAs can provide useful specifications and should also be checked for compliance with the current need. If LTAs exist for the requested product, and the LTA can adequately cover the need in terms of stock availability and delivery times, orders should be placed against the existing LTA.
Under EPP, priority should be given to vendors experienced in supplying the UN system in emergency operations in order to reduce lead-times and the risk of contract failure. Strategic sourcing undertaken upfront by the PD should always be checked, as it could provide useful input.
For solicitations undertaken through the use of the RFQ method of solicitation, there are no specific requirements to prepare a shortlist. However, in order to comply with basic audit requirements, the procurement file must contain a brief explanation as to which vendors were considered and why.
While vendors do not have to be registered in UNGM at the Basic Level to participate in a solicitation during the emergency period, the Procurement Official shall ensure that vendors are registered in UNGM at the appropriate Level at the time of contract signature. In case where a vendor registration at the appropriate level requires Special Approval, Chief, EOS may decide to waive such review by the e-SAC and approve the registration of the vendor, considering the due diligence performed by the VRO. In particular, in cases of high-value contract, appropriate diligence shall be exercised.
Chief, EOS shall report such Special Approvals to ASG, OSCM on a weekly basis during the period of the emergency.
Under EPP, an RFQ may be used for the solicitation of offers, regardless of the value of the procurement, and shall be deemed to be a formal method of solicitation. Procurement Officials should ensure competition by requesting at least three quotations, if feasible.
a. RFQs can be used regardless of the value of emergency procurement. When using an RFQ in emergency situations, no absolute deadline or specific template is required (except for procurement for works). However, vendors should be given a realistic timeframe to respond to the request. The request should contain enough information to enable vendors to give an informative quote, meaning all requirements should be communicated clearly and in the same manner to all vendors along with the method of evaluation. If feasible, the Director, PD or CPO, may decide that a submission deadline be set. The Director, PD or CPO may determine in their sole discretion whether the offers will be submitted through the TOC;
b. If time allows, RFQs shall be issued by using the corporate templates, as this supports the transparency of the process by ensuring that all vendors receive the same information at the same time;
c. Additional Considerations of RFQs under EPP:
i. Additional vendors may be added at any stage of the process;
ii. It is always advisable to check multiple markets for fallback options and to reconfirm availability before placing an order;
iii. The vendor offering the lowest-priced, technically acceptable offer might not be able to supply all requested goods or the full quantity requested. Therefore, the possibility and option to make split orders should always be made clear in an RFQ for emergencies. Split orders can ensure availability of all requested items and safeguard economy by placing a partial order with the vendor offering the lowest price for the respective item. In cases where the full quantity requested cannot be provided by one vendor, an additional order can be placed with the vendor offering the second-lowest priced.
Tender Opening Procedures:
a. Bid/proposals submissions: Depending on the situation, the UN may decide to only solicit submissions of bid and proposals via electronic means. This may be implemented in one or more offices depending on the emergency. The solicitation documents issued by Procurement Officials of the UN Secretariat will identify such mode of submission. In such case the UN will only accept such submissions received via electronic means.
b. Public Bid (Tender) Openings: Depending on the situation, the UN may decide to cancel all public bid openings. In such case upon request from vendors who submitted bids as a result of Invitation to Bids, the UN will provide the Bid Abstract Sheet (which includes the List of Vendors who submitted bids and the total price of their bids) within 30 days from the date of the Tender opening via email to email@example.com. Similarly, upon request from vendors who submitted proposals as a result of a Request for Proposals, the UN will provide the List of Vendors who submitted proposals within 30 days from the date of the Tender opening via email to firstname.lastname@example.org
i. The technical advantages offered by a higher-priced quotation may in certain cases justify the selection of an offer other than the lowest priced;
ii. Further, the RFQ modality allows selection of the most technically acceptable offer in cases where none of the offers fully meet the requirement specification (where regular formal methods of solicitation would require retendering);
c. The selection of a vendor other than the one offering the lowest priced option requires proper justification be documented and kept on file. See Chapter 8 Evaluation of Submissions for further guidance. The following points should be considered:
i. Whilst evaluation is conducted according to the ‘lowest-priced, technically acceptable’ methodology, and no exact evaluation criteria should be determined in the RFQ, Procurement Officials still have an obligation to present all vendors with the same information regarding UN requirements, delivery dates, and any other factors that will be assessed during evaluation and selection;
ii. With a lack of firm evaluation criteria, particular emphasis should be placed on creating a written record of the evaluation process and the justification for vendor selection;
iii. The evaluation team shall have the right, for reasons of expediency and subject to equal treatment of bidders, to decide not to ask bidders for missing documents;
iv. Given the time constraints and thus limited extent to which background checks can be performed, Procurement Officials may request performance security from the vendor. The willingness of bidders to provide performance security is a positive indication regarding the financial position of the company. This is not a mandatory requirement;
v. RFQs issued during an emergency operation constitute a formal method of solicitation. Hence, negotiations can be undertaken with a potential vendor, after selection of the vendor and in accordance with Chapter 8.9 Negotiations.
The Procurement Approving Authority with the delegated authority (DOA) for the value of the procurement activity (see Chapter 2.6.1 Delegation of Authority) will award contracts further to an EPP activity. Where the ASG, OSCM or USG, DOS has granted authorization to use EPP, the use of an RFQ process shall be deemed to constitute a 'formal method of solicitation’ for the purposes of Financial Rule 105.15. The resulting award to the winning offer is made on the basis of the use of formal methods of solicitation and respective DOA thresholds for awards apply.
Due to the risk involved, the procedures for contract preparation and issuance, as well as contract administration, remain the same as under normal conditions. Standard UN Forms of Contracts are used when contracting vendors during emergency operations. The UN requires written contracts to be signed for all procurement activities with values equal to or above US $2,500.
The UN never enters into oral contracts. Each UN contract must be in writing and duly signed by the parties, as set forth in this manual. Care must be taken to avoid exposing the UN to the risk of inadvertently entering into a binding oral agreement (see Chapter 11 Contract Finalization and Issuance and Contractual Instruments).
15.4.8 Contract Administration
Contract administration of emergency contracts is a combined responsibility of the procuring unit and the personnel responsible for emergency operations (see Chapter 13 Contract Management and Contract Administration for further guidance).
Proper documentation of the procurement process in a procurement file is a requirement for each procurement exercise. The use of the EPP allows more flexibility in the procurement process than UN regular procedures. This increases the responsibility of Procurement Officials, as well as involved managers, to document that the procurement has been conducted consistent with the procurement principles and in accordance with the Financial Regulations and Rules. Procurement Officials are reminded that proper filing also protects the individual undertaking the procurement activity from undue suspicion and ensures that actions can be justified to auditors.
In order to document the EPP and to justify decisions and choices made when selecting the vendor and awarding contract, all steps in the process must be documented in the procurement file. In the event of a dispute, the file is critical: it documents the procedure, establishes an institutional memory, forms the basis of a lessons learned process, and is essential for audit purposes.
Please refer to Chapter 13.9 Maintenance of Files for filing requirements. In addition to documents identified therein, for processes under EPP, the file should also include the request for approval, as well as approval of the use of EPP