The Goods and Services Procurement Handbook

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1 The Goods and Services Procurement Handbook Goods and Services Procurement Branch (ODPG) 2010

2 Why create a Goods and Services Procurement Handbook? As a large number of non-procurement staff at HQ and in WFP Field offices are involved in procurement in some form or other, the Goods & Services Procurement Branch, ODPG, decided to draft a handbook to explain the procurement process. What does the G&S Procurement Branch do? The Goods and Services Procurement Branch purchases all non-food goods and services with the exception of: personnel contracts; intern contracts authors contracts; individual reimbursements; contracts for the purchase of food-related transport and insurance Micro Purchase Orders Where do I begin? A good starting point is to know the goods and services procurement process. This is detailed in the diagram below. The diagram shows each step of the process and who is responsible for that step of the process. For more information about a particular step, match the number of the activity to the sections that follow. Procurement Process Client Unit Procurement Client Unit Finance 1.Create MPO only for HQ use 4. Call-off order (LTA) Goods/ Invoice Received Goods / service required 2. Create & release PR 3. Tender 6. Contract (PO) 7. Enter GR/SES 8. Enter invoice (LIV) 9. Process payment 5. Waiver Requested Goods and Services Procurement Handbook Page 2 of 8

3 1. MICROPURCHASE ORDERS What is an MPO? At HQ, an MPO is a purchase order that may be created directly by the client unit without having to go through ODPG. No purchase requisition is required. When can I create an MPO? You can use the Micro Purchase Order process if: The value of the purchase is less than but not equal to $5,000 The vendor you wish to purchase from is within the European Union (EU) If your proposed purchase does not meet these requirements, you should create a purchase requisition (PR) and send it to the Procurement Branch for processing (see step 2). Where can I find more information about the rules for MPOs and how to create them in WINGS2? Procurement Directive of 6 October 2009 No. OMLP2009/001 available on WFPGo; E-guide - Manage Procurement (PM) WINGS2 System Training and Support Material. 2. PURCHASE REQUISITIONS What is a Purchase Requisition (PR)? A purchase requisition is a request to the Procurement Branch to purchase goods/services. It is completed in WINGS2 by the requesting unit and is authorized by the relevant authority (In HQ this is usually a Division Director/Branch Chief in WFP Field Offices this is usually the Finance Officer/Country Director). The purchase requisition includes the following information: clear technical specifications, quantities for goods; scope of work for services; cost estimate; budget codes; estimated time of delivery for goods; contract start and end date for services; delivery address; waiver justification (if direct procurement is requested) consignee. Goods and Services Procurement Handbook Page 3 of 8

4 How do I know whether to create an extended service PR or a standard PR? The basic rule is to determine whether you will be receiving goods or services. If you are receiving a service, then you will want to create an extended service PR since this will allow you to create a Service Entry Sheet when the service is received. Where can I find more information about how to create PRs in WINGS2? E-guide - Manage Procurement (PM) - WINGS2 System Training and Support Material. 3. TENDER WFP procurement works under the principle of competition. At least three vendors must be invited to tender. Who identifies which vendors to invite to a tender? The Procurement Branch will identify companies capable of supplying the main types of goods and services that WFP may require. However, you may also suggest vendors If you identify vendors who are not yet registered in WINGS2, you should request them to register on the United Nations Global Marketplace (UNGM) - specifying that they wish to become a supplier to the WFP - in order to be invited to tender (website: Procurement uses 3 types of Tender Solicitations which are determined by the estimated value of the contract. These are: Request for Quotation(RFQ), Invitation to Bid (ITB) and Request for Proposal (RFP). What does the tender process involve? Creation and issuance of tender documentation; Receipt of offers from vendors; Opening of bids; Evaluation of bids; Submission to the Purchase and Contract Committee (At HQ - if the value is equal to or over US$100,000 and all LTAs. In the Field - if the value is equal to or over US$30,000 and all LTAs Contract award 4. LTAs What is a Long Term Agreement (LTA)? LTAs are created by the Procurement Branch for frequently purchased items and rapid response items. An LTA is a contract established by the Procurement Branch with a vendor for a specific period of time, to provide goods/services with fixed pricing and fixed delivery period. LTAs are established after the Request for Proposal (RFP) tendering process. Goods and Services Procurement Handbook Page 4 of 8

5 In other words, if you plan on purchasing the same items repeatedly, an LTA would allow that those items may be purchased directly without going through further tendering or the waiver process. This makes the procurement lead time (from purchase request to purchase order) much quicker. At HQ, if an LTA is established with a vendor in the EU, it is possible to raise an MPO against the LTA (without further need of obtaining offers). You may request the Procurement Branch to look into the possibility of creating an LTA for goods and/or services. All LTAs are stored on the Procuweb (available via WFPgo, Procurement Division). 5. WAIVERS What is a Waiver? A waiver is used when a specific vendor is identified for goods or services without going through the competitive bidding process. This is also referred to as direct procurement since WFP is dealing directly with one vendor. Usually, waivers are used when competition for a particular good/service is not possible. Note: Waived procurement is the exception and not the norm. What are the reasons for waiving competition? There are 6 reasons contained in the NFI procurement manual for waiving competition. Simply stated, these are: 1. When prices are fixed as per national legislation; 2. When WFP has approved the standardization of certain goods, and for purchases of other items or services which pertain to these standardized items, making competition impractical; 3. When the requirements of an emergency operation do no permit the delay associated with carrying out a competitive bidding process; 4. When only one source can meet WFP's requirements or the procurement relates to perishable supplies; 5. When competition for identical items has been obtained in the preceding three months (provided there has been no substantial change in price or market trends); 6. When the proposed contract is for the services of individuals other than staff members. What is the procedure to be followed when competition is being waived? When you, the client unit, request Procurement to purchase goods or services from a particular vendor you should: Select one of the document types for waived purchases (PRSW for services and PRNW for goods); Select one of the waiver justification reasons when creating the PR (found in the item area under WFP Data); Enter a full and complete explanation on the reason for the waiver request in the appropriate section under the texts tab); in the PR (found in the Item area Goods and Services Procurement Handbook Page 5 of 8

6 The procurement authority will then determine whether or not to approve the waiver of competition prior to the purchase order being created. 6. PURCHASE ORDER/CONTRACT What happens after the tendering process (tendering/evaluation/pcc)? After the tender process, the following takes place: Purchasing Branch staff create a Purchase Order (PO) in WINGS2 and print a hard copy of the order ; For more complex service contracts, an external contract document is also created; The Procurement Authority releases the PO in WINGS2. This represents a commitment for WFP with a 3rd party; The Procurement Authority signs the hardcopy of the Purchase Order/Contract; The Procurement staff will send the PO/Contract to the vendor for signature; The vendor signs the hardcopy of the contract/acknowledgement copy of the PO and returns same to the Procurement Branch. 7. RECEIPT OF GOODS/SERVICES What do I do when I receive goods or services (internal purchases: shipping documents<bill of Lading/Air waybill)? Enter a Goods Receipt (GR) or Service Entry Sheet (SES) into WINGS2. Send a hardcopy of the GR/SES to the Payments unit. How do I know whether I need to enter a GR or SES? If you created a standard PR, the Procurement Branch would have created a standard PO - then you should enter a GR. If you created an extended service PR, the Procurement Branch would have created an Extended Services PO - then you should enter a SES. Where can I find more information about how to create a GR and SES in WINGS2? E-guide - Manage Procurement (PM) WINGS2 System Training and Support Material. 8. ENTER INVOICE What happens when the Payments Unit receives my invoice? Finance staff will enter your invoice into WINGS2 referencing the GR and PO that had been created. (Note when a SES is accepted in W2, the system automatically creates a GR). Can an invoice be paid without a PO or GR being entered into WINGS2? No. All invoices need to have purchase orders and receipts entered into the system before they can be recorded and paid. Goods and Services Procurement Handbook Page 6 of 8

7 9. PAYMENT How long will it take to process my payment? This depends on the payment terms of the purchase order. Usually WFP pays within 30 days from receipt of invoice. However, this is contingent on all the relevant information being entered into WINGS2 in a timely manner. How long will the process take? PROCUREMENT LEAD TIMES Since ODPG handles such a wide range of contracts, the length of each individual procurement process varies. However, there are some general guidelines to help you plan your purchases. NOTE: These guidelines are dependent on submitting a complete/released PR to ODPG. Type of procurement activity Direct Procurement (No Competition) Direct Procurement (waived competition) Competitive Procurement (Tender) Simple Procurement / Simple Service Agreements 3-5 days Complex Procurement Varies depending on requirement for PCC review and negotiations with vendor.* Goods and services (value less than $20,000) 3-5 weeks At least 5 weeks Goods between $20,000 - $100,000; Services less than $100, weeks At least 6 weeks Goods/Services greater than $100,000* (Including Consignment Contracts) LTA Call-off Orders Call-off Order Orders At least 6 weeks 3-5 days At least 6 weeks Varies depending on requirement for PCC review and negotiations with vendor.* * Large value contracts (greater than $100,000) require submission to the HQ Purchase and Contracts Committee (PCC) Goods and Services Procurement Handbook Page 7 of 8

8 How can I speed up the process? Submit accurate PRs work with your assigned procurement focal point to ensure PRs are complete and thorough; Provide clear and understandable technical specifications; Make sure you have valid reasons for waiver justification. Where can I find out more? Procuweb Goods & Services Procurement Manual (also on the Procuweb E-guide - Manage Procurement (PM) WINGS2 System Training and Support Material. Goods and Services Procurement Handbook Page 8 of 8

UNDP Procurement. UNDP Angola Procurement

UNDP Procurement. UNDP Angola Procurement UNDP Procurement The term procurement refers to the process of acquiring goods, works and services. The process spans the whole cycle from identification of needs, choosing the adequate procurement methods,