How to Do Business With the UN:
A 5-Step Approach:
Potential suppliers should approach the United Nations
procurement market as they would any other business
venture. They should thoroughly research the market
and develop relationships with potential United Nations
partners prior to committing to a contract. They should
also understand the bidding process for obtaining a
contract and be prepared to undertake any after- sale
requirements that may be part of their contract obligations.
A company or individual consultant that is prepared
to approach the United Nations market in a methodical,
committed fashion will reap many of the benefits that
the United Nations has to offer, including the opportunity
to obtain a foothold in developing countries and emerging
markets that might otherwise be inaccessible or present
too great a risk to a company on its own.
Market
Research
Because
of the diversified nature of the United Nations market,
potential suppliers must first understand the United
Nations system and how it operates. Each of the more
than 30 agencies, programs, and funds has its own mandate,
projects, and purchasing requirements. At the same time,
however, these entities all function within a larger
organizational structure. The actions or policy decisions
of one agency may affect another, and the actions and
recommendations of the United Nations Secretary-General
will have an impact, to varying degrees, on each agency
within the U.N. system. Each of these decisions and
actions will in turn have some effect on procurement
opportunities.
One
option is for the supplier to the United Nations to
appoint a company representative to its United Nations
account, with the responsibility for researching the
United Nations market and maintaining relationships
with U.N. officials and procurement officers. The various
United Nations websites provide some of the best sources
of information about U.N. activities. Several U.N. publications
provide useful information on the United Nations and
its procurement opportunities. These include the Inter-Agency
Procurement Services Office publication, Procurement
Update, and the United Nations Development Programme
publication, Development Business. Both of these publications
are available online. The mainstream media and technical
trade publications also offer relevant, timely information
about the U.N.
Other
useful sources of information about the United Nations
are trade representatives and departments of commerce
in a supplier's home country, their country's mission
to the United Nations, and consulates and embassies
in countries with United Nations headquarters offices
and field projects. These representatives and offices
are able to highlight upcoming contracts and projects
and indicate what a supplier's comparative advantage
may be in relation to the marketplace and other suppliers.
Establishing
Relationships
Once
a supplier has researched the United Nations market
and has identified the agency or agencies with which
it wishes to conduct business, it must commit itself
to establishing long-term relationships with U.N. officials
and procurement officers at an agency's headquarters
and field offices. Frequently, these relationships provide
valuable additional information to suppliers about upcoming
contracts, technical specifications for these contracts,
and existing competition for a contract award that would
not otherwise be available.
While
there does not yet exist a public advertising system
that notifies suppliers of all or most upcoming contracts
throughout the U.N. system, individual agencies increasingly
rely on their websites to publicize contracts. Nevertheless,
there is no substitute for personal relationships with
procurement officers, who can provide added insight
to the procurement process.
Registration
Requirements
Most
U.N. agencies select suppliers for larger contracts
from supplier rosters. Companies and individual consultants
must register to be placed on these rosters. Registration
forms are available from procurement offices and from
many agency websites. Registration is typically used
to pre-qualify potential suppliers. Applications are
generally evaluated on the basis of past experience,
a supplier's ability to perform, the relevance of the
goods or services to the agency's requirements, and
the financial solvency of the supplier. Once accepted,
suppliers are placed on the roster. Inclusion on a roster
does not, however, ensure that a company will be included
in all supplier solicitations. It means only that a
registered company will be given equal consideration
in the selection process. Several agencies update their
supplier rosters every few years and remove from those
rosters suppliers that do not respond to solicitations
for offers on two or more occasions.
Because
supplier rosters often contain thousands of names, personal
relationships with procurement officers will significantly
increase a company's chances of being placed on a short
list. These relationships will also facilitate negotiations
with procurement officers at the bidding stage. Furthermore,
many field offices do not rely on supplier rosters,
but select bidders based solely on personal relationships.
Bidding
Process
Most
United Nations agencies use competitive bidding procedures
to procure goods and services. They typically award
contracts through three types of solicitation documents:
- Invitation
to Bid: Invitations to bid are typically issued
for high-value contracts that require formal competitive
bidding procedures. Invitations to bid may be open
or limited. Open international competitive bids are
advertised and invitations to bid are issued to registered
suppliers and suppliers that have expressed interest
in the contract. Limited international competitive
bids typically are not advertised and these invitations
to bid are issued only to registered suppliers that
have been placed on a short list of suppliers. This
method of bidding is best suited to respond to the
short lead times required for peacekeeping and emergency
operations. Potential suppliers submit bids on the
same basis as one another and an award is made to
the lowest priced, technically acceptable bidder or
best value bidder.
- Request
for Proposal: Requests for proposals are generally
issued for high-value service contracts that require
services to be customized to fit unique circumstances.
Specifications can be so complex that evaluations
of proposals take significantly longer than evaluations
of bids, and criteria other than price are likely
to be the determining factors. Such criteria may include
delivery speed, availability and quality of on-site
support services, clarity of technical manuals, ability
to understand local languages and culture, and ability
to dispatch troubleshooters to a field mission as
required. Contracts are typically awarded to the offer
that presents the best value in accordance with the
evaluation criteria.
- Request
for Quotation: Requests for quotations are informal
solicitation documents that are normally used for
low-value procurement requirements. These documents
request prices and commercial terms for goods, works,
or services that meet standard specifications and
are readily available on the market. Such informal
quotations are typically requested from local suppliers,
although several agencies accept international quotations
as well.
Depending
on the type of offer requested - a bid, proposal, or
quotation - an agency may advertise a request for offers
or it may select potential suppliers from a short list
of qualified suppliers or from expressions of interest.
Invitations for open international competitive bids
are generally advertised in U.N. publications and in
publications of wide international circulation. Increasingly,
agencies also publicize these requests on their websites.
Complex or specialized goods or services may require
pre-qualification, which is also conducted through advertising.
Some
agencies restrict the number of suppliers who may submit
offers, particularly when the values of contracts are
small. Offers that comply with the submission procedures
and the technical requirements included in the requests
for offers are accepted for evaluation. Bids and proposals
may be opened publicly or privately. The purpose of
the opening is to verify that all formalities indicated
in the request for offers have been met, including the
timeliness of the receipt of the offer and, where required,
their sealed condition.
Offers
are evaluated in accordance with the evaluation criteria
specified in the solicitation documents. All contracts
above a specific threshold are reviewed and approved
by a local or headquarters Committee on Contracts. The
threshold for review by a local Committee on Contracts
is generally $20,000 to $25,000 and the threshold for
review by a headquarters Committee on Contracts is typically
$100,000 to $200,000. Committees on Contracts seek to
ensure that contracts have been awarded in accordance
with an agency's financial regulations and rules.
The
Inter-Agency Procurement Services Office publishes Common
Guidelines for Procurement by Organizations in the United
Nations System, which is intended to serve as a guide
to procurement by United Nations agencies and to harmonize
procurement procedures within the United Nations system.
United Nations agencies, however, rely on their own
financial regulations and rules.
Performing
the Contract
Once
a contract has been awarded, a supplier must ensure
timely delivery of the goods or services. This is especially
important when supplying for peacekeeping and humanitarian
missions. Slight delays can have a profound impact on
an agency's ability to implement its project requirements.
While economic development projects also have short
delivery time requirements, they frequently do not operate
under similar time constraints.
A
key requirement for companies doing business with the
United Nations is the ability to provide after-sale
support. This is especially true for businesses providing
goods or services to field missions or development projects.
Businesses must be ready to maintain personnel in the
field or dispatch troubleshooters to the field as required.
The
Financial Regulations and Rules of the United Nations
stipulate that all suppliers must be paid within 30
days of delivery and inspection of goods or completion
of services, unless a contract states otherwise. Because
of the ongoing financial problems at the United Nations,
payments by the United Nations Secretariat have frequently
been extended to a 60 or 90-day cycle. Most U.N. specialized
agencies are able to pay on time because they have separate
budgets and have not experienced the same cash flow
problems as the U.N. Secretariat.
The
United Nations tries to resolve payment disputes in
the first instance by negotiation with the assistance
of third party mediators. These are typically the United
Nations mission, commerce department, or trade ministry
of the supplier's home country. Because the United Nations
is protected by sovereign immunity, it cannot be sued
in a court of law. Accordingly, failing a settlement
in mediation, disputes are settled in accordance with
the United Nations Commission on International Trade
Law (UNCITRAL) arbitration rules.
The
United Nations seeks in all instances to establish mutually
beneficial, long-term relationships with its suppliers,
ensuring reliable, competitive sources of supply. For
those who do business with the United Nations, the relationship
provides a unique, cost-effective way to learn about
investment opportunities in developing countries and
emerging markets, to enter these markets with the support
of the United Nations, and to contribute to sustainable
growth and development and the integration of developing
countries into the global economy.
(Excerpt
from How to Do Business With the United Nations,
published by UNA-USA)
