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General Information

Introduction

The Procurement, Travel and Shipping Section, Support Services UNON is resposible for purchasing supplies, equipment and services in accordance with relevant UN Financial Regulations and Rules and the UN Procurement Manual.

However, some offices perceive purchasing as nothing more than an "order placing" function. They may see PTSS as one which deals with paperwork only. They are wrong! If this is allowed, the opportunities will be lost in a most significant area of expenditure.

The following should be expected to obtain an effective purchasing function:

To obtain value for the money spent.
To develop and maintain an effective plan for present and future needs.
To keep management advised of relevant trends in their supply markets.
To keep appropriate records and provide information.

Objectives of purchasing

A most widely used definition consists of the 6 RIGHTS. It is to obtain materials and services:

of the RIGHT QUALITY
of the RIGHT QUANTITY
at the RIGHT TIME
at the RIGHT PRICE
from the RIGHT SOURCE.
to the RIGHT PLACE.

In a broader prespective, purchasing objectives can be defined as follows:

1. To supply the organization with a steady flow of goods and services to meet its needs and to ensure continuity of supply.
2. To buy efficiently and wisely, obtaining, by any ethical means, the best value for every dollar spent.
3. To manage inventory so as to give the best possbile service to users at lowest cost.
4. To maintain sound relationships with other offices, providing information and advise as necessary to ensure effective operation of the organization as a whole.

In other words, goods and services are procured on the basis of the lowest acceptable bid.

Purchasing Procedures

Basic purchasing procedure is covered by four main phases:

a. The requistion stage - the substantive offices prepare requisition indicating the generic specifications, quantity of the items requested, allotment account code to charge and as much as possible the time it is required.
b. The pre-order stage - acting on receipt of purchase requisition. This involves locating suitable potential source, issuing enquiries and analysing quotations.
c. The selection stage - agreeing price and terms (following negotiations where necessary) - finally placing order or award of contract.
d. The post-ordering stage - progressing, receiving, invoice certification and measuring supplier performance.

Therefore, the purchasing cycle as can be seen on the next page covers the abovementioned phases.

The Procurement Cycle

The text on the cycle are clickable

Conditions of Service - Contractors

1. LEGAL STATUS

The contractor shall be considered as having the legal status of an independent contractor. Agents or employees of the contractor shall not be considered in any respect as being officials or staff members of the United Nations.

2. OBLIGATIONS

The contractor shall neither seek nor accept instructions from any authority external to the United Nations in connection with the performance of its services under this contract. The contractor shall refrain from any action which may adversely affect the United Nations and shall fulfil its commitments with fullest regard for the interests of the United Nations. The contractor shall not advertise or otherwise make public the fact that it is a contractor with the United Nations. Also the contractor shall, in no other manner whatsoever use the name, emblem or official seal of the United Nations or any abbreviation of the name of the United Nations in connection with its business or otherwise. Contractors may not communicate at any time to any other person, Government or authority external to the United Nations any information known to them by reason of their association with the United Nations which has not been made public, except in the course of their duties or by authorization of the Secretary-General or his designate; nor shall contractors at any time use such information to private advantage. These obligations do not lapse upon termination of their agreement with the United Nations.

3. TITLE RIGHTS

(a) The United Nations shall be entitled to all property rights including, but not limited to patents, copyrights and trademarks, with regard to material which bears a direct relation to, or is made in consequence of, the services provided to the Organization by the contractor. At the request of the United Nations, the contractor shall assist in securing such property rights and transferring them to the Organization in compliance with the requirements of the applicable law. At the request of the United Nations, the contractor shall take all necessary steps, execute all necessary documents and generally assist in securing such property rights and transferring them to the Organization in compliance with the requirements of the applicable law.

(b) Title to any equipment and supplies which may be furnished by the United Nations shall rest with the United Nations and any such equipment shall be returned to the United Nations at the conclusion of this contract or when no longer needed by the contractor. Such equipment, when returned to the United Nations, shall be in the same condition as when delivered to the contractor, subject to normal wear and tear.

4. TERMINATION OF CONTRACT

This contract may be terminated by either party before the expiry date of the contract by giving notice in writing to the other party. The period of notice shall be five days in the case of contracts for a total period of less than two months and fourteen days in the case of contracts for a longer period.

In the event of the contract being terminated prior to its due expiry date in this way, the contractor shall be compensated on a pro rata basis for no more than the actual amount of work performed to the satisfaction of the United Nations. Additional costs incurred by the United Nations resulting from the termination of the contract by the contractor may be withheld from any amount otherwise due to the contractor from the United Nations.

5. ASSIGNMENT OF PERSONNEL

(a) The contractor shall not assign any persons other than those accepted by the United Nations for work performed under this contract.
(b) UNON introduced a "Guaranteed Fair Employment Package" (or "Fair Pack Policy") in 2004 aimed at improving the working conditions of Contractors’ employees working on site at the UN Gigiri Complex. The policy can be viewed here

6. INDEMNIFICATION AND INSURANCE

(a) The contractor shall indemnify, hold and save harmless and defend at its own expense the United Nations, its officers, agents and employees from and against all suits, claims, demands and liability of any nature or kind, including costs and expenses, arising out of acts or omissions of the contractor or its employees in the performance of this contract.

(b) The contractor shall provide and thereafter maintain for the duration of this contract and any extension thereof all appropriate workmen's compensation insurance and furnish proof to the satisfaction of the United Nations of adequate liability insurance.

7. UNITED NATIONS PRIVILEGES AND IMMUNITIES

Nothing in or relating to this contact shall be deemed a waiver of any other privileges and immunities of the United Nations.

8. ARBITRATION

Any controversy or claim arising out of, or in accordance with this contract or any breach thereof, shall unless it is settled by direct negotiation, be settled in accordance with the UNCITRAL Arbitration Rules as at present in force. The parties shall be bound by any arbitration award rendered as a result of such arbitration as the final adjudication of any such controversy or claim.

9. AMENDMENTS AND ASSIGNMENTS

No change in or modification of this contract shall be made except by prior written agreement between the Chief, Procurement, Travel and Shipping Section, UNON, and the contractor. The contractor shall not assign, transfer, pledge, sub-contract or make other disposition of this contract or any part thereof, or of any of the contractor's rights, claims or obligations under this contract except with the prior written consent of the United Nations.

10. OFFICIALS NOT TO BENEFIT

The contractor represents and warrants that no official of the United Nations has been, or shall be, admitted by the contractor to any direct or indirect benefit arising from this contract or the award thereof. The contractor agrees that breach of this provision is a breach of an essential term of this contract.

11. OTHER PROVISIONS

Disposal of UN Property

In accordance with the UN Financial Regulations and Rules, any UN property that needs to be disposed as a result of wear, scheduled replacement, surplus, loss, damage, theft, vehicle accident or inventory discrepancy should be presented to the Local Property Survey Board. The attached Case Report and Recommendation form HPSB 1 should be completed by following the instructions written at the back of the form and submitted to PTSS.

A Local Property Survey Board is established in accordance with the provisions of Financial rule 110.32. PTSS submits notification of property irregularities such as loss, shortage or damage and property surplus or unserviceability due to normal wear and tear or obsolescence. After investigation, the Board reports on causes of any irregularities and recommends action to be taken thereon, including the method of disposal of the property where applicable. It also indicates the degree of responsibility, if any, attaching to any staff member as a result of any irregularity.

Common Procurement Terms

PROCUREMENT:the acquisition by any means of goods and services.

SUPPLIER:any potential party engaged in the business of making.

PRODUCTS:(goods or services) available to the consumer.

VENDOR:any person who transfers property by sale.

SELLER:any person who has contracted to sell.

TRADER:any person who buys goods to resell the same.

REQUEST FOR QUOTATION/PROPOSALS

REQUEST TO BID:a request for offers.

QUOTATION:an offer, generally informal, by a potential supplier indicating the price at which supply will be made if an order should be placed.

BID:a formal offer by a potential supplier.

OFFER:manifestation of willingness to enter into a bargain, so as to justify another person in understanding that his assent to the bargain is invited and will conclude it.

GOODS:objects of every kind and description.

SERVICES:any object of procurement related to performing of duties/work assignment.

CONTRACT:an agreement between two or more persons that creates an obligation to do or not to do some particular thing.

PURCHASE ORDER:order a document that authorizes the seller to furnish goods to the person ordering; usually constitutes an offer that is accepted when the seller initiates performance.

CARRIER:any person engaged in the transportation of passengers or goods.

Other Important Information on Procurement

1. Official Signatures

PTSS/ Support Services will only accept requisitions duly approved by the respective Executive Offices of both UNEP and UN-HABITAT and certified by a Certifying Officer against Allotment Account Codes listed on the requisition. Requisitioning and Certifying Officers are expected to review all requests in the light of actual needs, bearing in mind that PTSS/Support Services regards the signatures of the Certifying Officer and the Requisitioning Officer as a certification that a need for the items/services requested exists and that funds are available. Requisitions lacking signatures of Requesting and the Executive Offices and/or Certifying Officers will not be accepted by PTSS/Support Services.

2. Lead Time

In order to allow PTSS Support Services to process the requisition/ contract in accordance with the UN Financial Rules, requisitioners/substantive offices are requested to observe the following lead times:

a) Supply of locally available goods and services: minimum 4 weeks;
b) supply of locally non-available goods and services: minimum 8 weeks by air and 12 weeks by sea.

Where the estimated cost is above US$ 70,000 (temporarily increased to US$150,000 and shall be reviewed again by HQ) four more weeks should be added to the above mentioned lead times since the case must be referred to the Local Committee on Contracts for their recommendation to the Under-Secretary-General. Furthermore, highly specialized equipment and complex contracts may require more time. For more information on lead times required for specific cases, staff members are required to contact the Chief, PTSS/Support Services.

3. Authorized Officials

As per Financial Rule 110.16 (b) the authority to enter into contracts on behalf of UN-HABITAT and UNEP rests with the Executive Directors. This authority has defacto been delegated to UNON, specifically PTSS/Support Services.

In this context, it should be noted that the Financial Rule provides the following definition:

"Purchasing, renting or selling activities include, in addition to entering into contracts, the invitation of proposals or tenders and the negotiation with potential suppliers or purchasers on the basis of detailed specification".

In view of the above, purchasing activities can only be undertaken by the Procurement, Travel and Shipping Section, Support Services. Therefore, staff members are requested to refrain from entering into offer requests, negotiations or other purchasing activities at all times.

It should be noted that, in accordance with the above and numerous Audit Observations, the PTSS/Support Services will not accept post-facto requisitions nor would it enter into an agreement or issue/award a purchase order/corporate contract retroactively.

4. Return to Stock

In the event that an office possesses items that are either surplus or are no longer required, such items may be returned to Stores. The offices returning the materials/equipment/furniture are required to document the return with an authorized Requisition for the Return of Supplies and/or Equipment to Stores (Form PT 71) describing the material, and stating the reasons for return.

Forms