Tenders of the United Nations

Mag. Michaela Ahlgrimm-Siess

T +43 316 601 560
M +43 664 8179266
E michaela.ahlgrimm-siess@ic-steiermark.at

The United Nations procurement:
For all activities and missions of the UN’s individual institutions, products and services play an essential part to realise the vision of peace and security in the world. Just like any other public organisation, the UN depends on a procurement system by means of which necessary goods and services are acquired. The budget for procurement is provided by the UN’s donor states and amounts to 17 billion USD per year. In order to use this money in the fairest and most reasonable way possible, The UN makes a great effort to not only include vendors from developing countries or countries in which goods and services are needed, but also vendors from donor states like Austria.

Vienna International Centre:
Even though neutrality is a key factor in the Austrian State Treaty, the country became a member of the United Nations in December 1955, just after the State Treaty was signed. For 60 years, Austria has had close ties with the United Nations. Today, these ties are particularly apparent with the Vienna International Centre (VIC). Established in 1979, it is one of the four UN-headquarters (besides New York, Geneva and Nairobi) where numerous UN organisations, also called “the family of the United Nations in Vienna”, are hosted. The Austrian government handed over the VIC complex to the United Nations for the symbolic rental sum of one Austrian schilling (equivalent to 0,07 EUR today) a year for the duration of 99 years. However, the VIC-based organisations still need to bear the maintenance and operating costs of the VIC. The VIC complex covers an area of 180,000 m² and has extraterritorial status. Today, the following organisations are hosted in the VIC, amongst others:

Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO)
United Nations Office on Drugs and Crime (UNODC)
United Nations Industrial Development Organization (UNIDO)
United Nations Commission on International Trade Law (UNCITRAL)
United Nations Office for Outer Space Affairs (UNOOSA)
Office of the United Nations High Commissioner for Refugees (UNHCR)United Nations Office at Vienna (UNOV)
International Narcotics Control Board (INCB)

Due to the strong ties with the UN headquarters, Austria must win a great part of the annual procurements, right? Unfortunately, this is not the case. Austrian businesses are indeed participating in procurements, but there is a potential to increase the total revenue (129 million USD in 2016).

The United Nations’ procurements:
The UN need a number of (final)products and services in order to accomplish their objectives. The by far most commonly procured goods and services stem from the following sectors:

 

Sectors in 2016    Total UN
   % of Total Grand
health     3,964.4    22.38%
advice, administration     3,108.6    17.55%
transportation     3,047.6    17.21%
other goods and services     2,393.4    13.51%
food products and agriculture     2,061.1    11.64%
construction and engineering     1,997.6    11.28%
peace and security     584.9    3.30%
humanitarian help     243.7    1.38%
energy     121.0    0.68%
education     84.2    0.48%
activities on climate     83.4    0.47%
clean water and hygiene     22.6    0.13%

________________________________________
Total 17,712.5 Mrd. USD

A great challenge of the procuring UN organisations is to find the most suitable vendors for upcoming projects. Comparing all the different vendors is a way to get the best quality for a good price. These circumstances and the highly valued quality of Austrian goods and services give local vendors the opportunity to become partners of the United Nations. Requirements usually involve free preregistration at the appropriate UN organisation or at the United Nations Global Marketplace databank (UNGM databank)

Annual statistical reports of the United Nations:
If you want to get an overview of the procurements of individual UN organisations and vendors from different countries, have a look at the Annual Statistical Reports of the procuring UN organisations.
In addition to that, you can find statistical analyses on:
https://www.ungm.org/Public/ASR

Vendor registration at the Global Marketplacewww.ungm.org:
This UN platform has been established a few years ago and is supported by the significant awarding bodies of the UN. The platform is straightforward to navigate for potential vendors. This free online platform covers 99% of the UN procuring volume and is called UNGM – United Nations Global Marketplace.

The data entered is accessible for all UN institutions and the World Bank. Free registration is quickly completed on www.ungm.org so you can take part in UN tenders. Please keep in mind that having export experience is a requirement for businesses wishing to provide and supply services to the UN.

UN tenders:
You can find tenders and current projects on the Global Marketplace (www.ungm.org).

The Tender Alert Service makes it easier for you to find tenders and be awarded a contract. However, it is not free of charge.
Please visit the respective homepage of the procuring UN institutions (tenders can be found under “procurement”) as tenders of all values are published there.


UN Chart 2017: PDF

Solicitation documents of the UN:

Expression of Interest (EOI)
In case a formal tender is necessary (ITB, RFP), vendors are first asked to submit an Expression of Interest (EOI). Calls for EOIs are regularly published on the United Nations Global Marketplace and the websites of the respective UN agencies. Depending on the UN institution and the value of the procurement, calls for EOIs must be published on the UNGM (or on the organisation’s website). This varies depending on the UN Organisation.

Through an EOI, interested vendors are informed about the fact that specific products or services will be requested in 2-4 weeks by means of a formal tender (ITB, RFP).

Businesses which are already familiar to the UN are also being informed by e-mail. Interested businesses and organisations are asked to subsequently forward their EOIs or their rejection to the responsible staff of the procurement department. The EOI number, EOI title, the UNGM vendor ID number and the full contact details need to be indicated. Subsequently, all solicitation documents will be sent out.

A call for an Expression of Interest (EOI) does not automatically constitute a tender, but only its notice. The United Nations reserves the right to change or cancel the required services at any time during the call for EOIs and/or during the tendering process. A response to an EOI does not automatically guarantee a firm will be considered for the solicitation process.
Only potential vendors which respond and are considered to be qualified after an objective evaluation of their application will receive the final solicitation documents.

Invitation to Bid (ITB)
An Invitation to Bid (ITB) is a formal call to create an offer within 45 days on the basis of a tender with already clear formulated requirements. ITBs are (on the UNGM) required published tenders which are announced on a local level by means of an EOI. The price is usually the only criterion for being awarded the procurement contract. If all technical criteria are met, the most qualified bidder is awarded the contract.

Request for Proposal (RFP)
An RFP is a formal call (also on a visual basis) to make an offer within a period of 60 days on a more complex tender whose specifications are not thoroughly defined at the time of tendering. RFPs are tenders which have to be published on the UNGM. They are announced on a local level by means of the EOI. In this case, the proposer’s expertise and ability to innovate are of key importance in order to meet the requirements for the tender. The price is only one of the evaluation criteria which is specified before issuing the call for RFP. A system of two separately marked envelopes is used, whereby the technical evaluation is completed first. Only after this has been done, the commercial offers are assessed. The procurement contract is awarded to the one whose proposal is the most responsive to the requirements set forth in the solicitation documents (mostly of 80% importance, of 60% for the UNPD) and whose proposal is the most favourable for the United Nations (of 20% importance, 40% for the UNPD). It is recommended to include (small) company brochures. By now, the RFPs outweigh the ITBs as the requirements are becoming more complex.

Request for Quotation (RFQ)
A RFQ (Request for quotation) is an informal call (for potential vendors) to make an offer (standard products or services) of low monetary value. Prices as well as terms and conditiones of five firms are compared. The bidder whose bid conforms to the requirements (and usually offers the lowes price) is awarded the procurement contract. The call for RFQs does not have to be published on the UNGM or in the database. Mostly, local vendors are awarded the procurement contract.

Low-value Procurement
When it comes to procurements of low value, the respective procurement body is allowed to award procurement contracts directly without involving further offers.

Long Term Agreements (LTAs)
LTAs are published after evaluating the procurement costs either as ITBs or RFPs on the UNGM or are issued as RFQs. Signing a long-term agreement with companies saves time and money to UN institutions as they can be renewed.
The terms of the agreements differ from organisation to organisation (1-4 years).
The agreements are not binding for the respective UN organisations which means that they are allowed to commission different vendors too. This, however, is usually not the case.