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    Accessing the Aid Procurement Market

     

     
     
    © International Trade Centre, International Trade Forum - Issue 4/2001

    It can be difficult and time-consuming to get a foothold in the aid procurement market. In this article, we offer practical guidelines for developing country enterprises on overcoming some of the most commonly faced obstacles to entry into this complex market.

    The United Nations (UN) and other international aid organizations are committed to procuring more goods and services from companies in developing countries, as long as their products meet the required standards of quality and price. While accessing this market requires an investment of resources, opportunities are available for competent and determined enterprises.

    At the outset, firms should expect to spend at least 1% of contract values on preparing a bid. Bid preparation should follow a clearly defined strategy, taking into account all available information, such as the barriers to entry and market needs. With this in mind, companies can avoid a number of pitfalls by following a methodical approach and considering the following points.

    Research and target your market

    Not all agencies require the goods and services you sell. Before initiating contact, make sure that the items you sell in the markets where you currently operate correspond to the needs of aid agencies. It is also worthwhile to spend time identifying market sectors with less competition; those which present the greatest possibility for success.

    Information on the procurement requirements of UN agencies can be found in the General Business Guide for Potential Suppliers of Goods and Services, published by the Inter-Agency Procurement Services Office (IAPSO - part of the United Nations Development Programme). Information is also available online from IAPSO's web site http://www.iapso.org (go to "supplying the UN" and "Publications"). This guide provides basic facts about the procurement activities and requirements of all UN organizations, including contact details.

    To obtain more information about the required characteristics of products, visit the web sites of the supply departments of the corresponding agencies. Some may display electronic catalogues with descriptions of the standard products they procure. For example, the United Nations Children's Fund (UNICEF) supplies a catalogue (http://www.supply.unicef.dk/Catalogue/cataloguehome.htm). Alternatively, visit the local agency offices where hard copies of the catalogues are often available.

    You can also find updated information on specific projects and programmes of various organizations by consulting Development Business, a bi-monthly publication and Internet site (http://www.devbusiness.com). This guide is available by subscription and provides information on procurement opportunities for projects funded by the World Bank and various regional banks, including the European Bank for Reconstruction and Development. Procurement notices for large-scale procurement or long-term agreements of UN agencies are also available for free on the IAPSO web site under "Supplying the UN" and "Procurement Notices".

    To obtain additional information on projects in a specific country, consult the United Nations Development Programme (UNDP) Country Cooperation Framework, for that country (http://www.undp.org).

    "Pitch" your company

    If you do not already have one, prepare an information pack on your company and its products. This typically presents your company's commercial and export experience, customer references and a brief precise description of the products you sell.

    Humanitarian emergency situations such as natural disasters may prevent normal tendering procedures. In these circumstances, recognized firms with a history of successful operations are generally invited to tender a bid. In addition, procurement orders of less than US$30,000 are often exempt from tendering and contracts may be awarded directly by procurement officers.

    To enhance your chances of success, it is strongly recommended that you introduce yourself personally to the buyer or technical expert who manages your product within the procurement division of the organization. Or you can contact their local representatives (e.g. in local UNDP offices). Stay in contact periodically; update him/her regularly about new products and developments in your firm; ask whether he/she has any questions or concerns about your products; and request information about any upcoming calls for tenders.

    Know the procedures

    It is important to understand the procurement procedures and commercial terms and conditions used by the agencies you contact. The Inter-Agency Procure-ment Working Group (IAPWG) has developed basic principles for procurement for organizations within the UN system. Along with the General Conditions for the Procurement of Goods, these principles are available online in the General Business Guide for Potential Suppliers of Goods and Services published by IAPSO. Generally, goods supplied to UN agencies are exempt from taxes and duties. Performance bonds are sometimes required and final settlement is generally 30 days after receipt of the goods.

    Few international organizations issue letters of credit, pay in advance or offer assignment of payment to third parties.

    Register with the UN Common Supply Database

    In most cases, international aid agencies purchase from approved and "pre-qualified" suppliers. Therefore, it is essential to be registered on the rosters of the various organizations, and to be informed about the prerequisites for and implications of an application. The UN Common Supply Database (UNCSD) is the business community's window to accessing the UN procurement market. Various organizations within the UN system use the UNCSD to identify suppliers of goods or services, or to prepare shortlists of suppliers to be invited to bid. To register with the UNCSD, it is necessary to:

    • complete the registration form (available online from http://www.uncsd.org);

    • agree with the UN General Terms and Conditions;

    • offer proof that your products and/or services conform to established quality standards;

    • show evidence of financial strength; and

    • pay a one-year, US$100 subscription fee.

    Register with individual agencies

    Registering with the UNCSD database does not mean that you will be registered as a supplier with specific UN agencies or programmes. Suppliers must still register with each organization with which they want to do business.

    To register, suppliers need to understand the technical specifications and criteria used by each organization and only then apply for registration. For example, the Office of the UN High Commissioner for Refugees (UNHCR) only accepts companies that are able to demonstrate a minimum of three years' experience in supplying the required products/services; export experience; completion of a supplier registration form; and acceptance of the institution's terms and conditions. Other issues which may also be taken into consideration include guarantees, repair facilities and results of audits of premises.

    Supplier registration forms are sometimes available online from the organization's web site (for example, http://www.un.org/Depts/ptd/regform.doc for the UN Procurement Division); and are often available on request from the relevant procurement division.

    Submit bids

    Although the types of solicitation (bid) documents vary depending on the bidding procedures, there are a number of factors suppliers always need to keep in mind when submitting bids. As there are many grounds for disqualification, you need to pay particular attention to the following points:

    • Always respond to an inquiry or request for a proposal from an agency. If you are not interested or unable to propose a bid at the time, always offer an immediate explanation.

    • Read the tender document very carefully.

    • Consider and evaluate the time and the cost to prepare and submit the bid, as well as the procedure for submitting it.

    • Do not deviate from the commercial conditions and specifications (the language used and technical specifications) listed in the call for tenders.

    • Prepare a clear, complete and comprehensive quotation.

    • Send it before the closing date to the correct fax number and marked for the attention of the correct person.

    • If requested, always provide samples of goods.

    • Supply supporting documents.

    • Demonstrate your knowledge of the product or service requested.

    • If in doubt, ask the buyer for clarification in writing.

    Use your trade support network

    It is a good idea to seek advice on submitting bids from trade promotion organizations, trade representatives, national departments of commerce, your country's mission to the UN and consu-lates and embassies in countries with UN headquarters and field offices. These groups can provide valuable information about upcoming contracts and projects, and advise on your comparative advantage vis-à-vis the marketplace. They can also be present at bid openings and give you helpful information.

    If you are not successful in your bid, find out who was awarded the contract and why. It is rare to secure a contract on the first try. Keep on bidding so that international organizations get to know you and your products.

    Execute the contract

    If you have been awarded a contract, you must ensure that you provide the correct goods (in compliance with technical specifications) within the specified time frame, and that you respect the negotiated terms and conditions. Even slight variations in quality and delivery terms can make a big difference in the usefulness of the goods for the customer. These variations can also have serious consequences for your relationship with the buying agency. This will substantially reduce your company's chances of being awarded future contracts.

    For more information on accessing aid procurement opportunities, contact Catherine Taupiac, ITC Regional Trade Promotion Adviser at taupiac@intracen.org


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