Working with UNICEF: procurement

principles and process

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Content

Principles and Regulatory Framework Guiding UNICEFs

Procurement

UNICEF Vaccine Procurement

Tendering Process and plans

UNICEF GUIDING PROCUREMENT

PRINCIPLES

• Promotion of objectives of UNICEF

(fulfilling the mandate, goals and objectives)

• Fairness, integrity and transparency through competition

(clear & appropriate regulations/rules applied to all suppliers, fair process, equal

treatment of suppliers, transparent system)

• Economy and effectiveness

(meet requirement in terms of quantity, quality, timeliness at the right place.

Economy=minimize cost, Effectiveness=meet end-user interest)

• Best value for money

(Consider the optimum combination of factors in meeting the end user needs;

BVM does not mean lowest cost but best ROI)

REGULATORY FRAMEWORK GOVERNING

UNICEF PROCUREMENT PROCESSESFinancial Regulations and Rules (FRR), Article XII. Internal Control

Financial and Administrative Policy, e.g.

• Policy 1 – Internal Controls

• Policy 5 – Cash Disbursements, Supplement 6 on CRC

Executive Directives, e.g.

• Anti-Fraud Policy, Whistle Blower Policy

Supply Manual: Procurement Guidelines & Procedures

Division Procedures: Supply Division’s SOPs, such as;• DP004 Obtaining and processing solicitation documents

• DP051 Authorising procurement documents

• DP087 Establishing Procurement Strategies

• DP069 Monitoring supplier performance

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PROCUREMENT COMPLIANCE &

OVERSIGHT

Planning for appropriate procurement

• Focus on strategic essential commodities, and managing risk. Procurement

strategies established prior to commencing procurement, including to ensure

stakeholder consultation informs the objective, scope and process, including types of

competition (open, limited, direct procurement)

Checks & balances built into approval and procurement process

• Segregation of duties, independent review committee (CRC) ensuring due process

• Table of Authority – based on value and risk (also reflected in ERP system)

Procurement compliance monitoring

• Use of low value procurement process

• Segregation of duties

• Requirement for competitive bidding

• Local Procurement Authorizations

• Internal and external audits

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UN CODE OF CONDUCT - for suppliers

UNGM registered suppliers sign on to the UN Code of Conduct. (rev Sept 2013).

Based on the UN charter, the principles of the Global Compact and ILO standards;

The UN expects that these principles apply to suppliers and

their employees, parent, subsidiary or affiliate entities, and subcontractors; that they are seen

as minimum standards that suppliers strive to meet and exceed them.

The code addresses:

Labour conditions:[Freedom of Association, no force or compulsory, no child labour,

discrimination, standards for working conditions]

Human Rights: [no Harassment, Harsh or Inhumane Treatment, no manufacture or sale

of mines]

Environment: [compliance with regulations, manage chemical and hazardous

materials; waste and air emissions, Minimize Waste, Maximize

Recycling]

Ethical conduct: [no corruption, conflict of interest declaration, no gift and hospitality,

post employment restrictions.]

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UNICEF Vaccine Procurement

Source: UNIICEF Supply Division

Immunization Supplies

VaccinesBCG , DTP, TT/Td/DT, Measles

containing, OPV, HepB, YF,

DTP-HepB, DTP-HepB/Hib,

DTP/Hib, Hib, MR, Meningitis,

MMR, PCV, RV IPV, HPV, etc.

Safe Injection equipment

Cold Chain Equipment

Vaccines Supplies: US$ 1, 285 million2.79

billion doses2,185

shipments2013

Countries UNICEF

procures on behalf of

Full schedule

Partial schedule

UNICEF has a key role in vaccine procurement and procuring

immunization supplies on behalf of around 100 countries annually

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UNICEF Vaccine Procurement

Overall objective of achieving Vaccine Security:

Ensure an uninterrupted, sustainable supply of affordable,

quality vaccine

Compliance with UNICEF Vaccine Procurement Principles, and

GAVI Vaccine Supply and Procurement Objectives

Quality is an overriding criteria for vaccines: UNICEF rely on WHO for

assessment and advice regarding quality and safety of vaccines

UNICEF Vaccine Procurement Principles

• A healthy industry is vital to ensure uninterrupted and sustainable supply of

vaccines

• Procurement from multiple suppliers for each vaccine presentation

• Procurement from manufacturers in developing countries and industrialized

countries

• Paying a price that is affordable to Governments and Donors and a price that

reasonably covers manufacturers minimum requirements

• UNICEF should provide manufacturers with accurate and long-term forecasts;

Manufactures should provide UNICEF with accurate and long-term production

plans

• As a public buyer, providing grants to manufacturers is not the most effective

method of obtaining capacity increases

• The option to quote tiered pricing should be given to manufacturers - in

accordance with the World Bank classification.

GAVI Vaccine Supply and Procurement Objectives

1. Balance of supply/demand

• Ensure sufficient availability to at least meet total GAVI

demand

• Provide consistent uninterrupted supply to GAVI countries.

2. Cost of vaccine to GAVI and countries

• Minimize cost per course

• Minimize cost implications

3. Appropriate and innovative vaccines

• Procurement of appropriate, quality vaccines to meet GAVI

country needs

• Foster an environment for innovative vaccines

4. Communicate timely, transparent and accurate market information

Tendering process

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Tenders can cover a specific requirement, or a single or multi-year forecast

depending on the vaccine and tender.

Tenders are issued with the aim to allow for appropriate planning before

first required supply.

UNICEF establishes Supply Arrangements “frameworks’’ called Long Term

Arrangements (LTA’s):

• Purpose: To establish forecasts on quantities to be produced and

quantities to be bought over the LTA duration

• Defines Technical, Quality and Commercial requirements for the

specific Purchase Orders that are then placed against the LTA

The specific tender objective defines the expected tender

outcome:

UNICEF

Issues Formal

Tender

and Evaluates

Offers

Establishment of

Long Term

Arrangements

for supply of

vaccines for

multiple years

1-4

years

Placement of

orders

PO

POPO

Shipment from

Manufacturer

to countries

(UNICEF

freight

forwarders)

Country

inspection

Invoice

payment

Vaccine

Arrival

Report

Procurement process overview

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The tender process: Develop, Issue, Receipt

1. Development of specific procurement strategy and objectives

2. Demand / Forecast development

3. Development of draft tender document

4. Pre-tender consultation with industry

5. Feedback from industry and finalization of tender document

[The above may be with relevant partners or PRG* consultations]

1. Issuance of tender – invitees

2. Clarifications

3. Receipt of proposals

*PRG: Procurement Reference Group established for some GAVI supported vaccines

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The tender process: Evaluation, Award

9. Technical review of proposals (by WHO)

10. Quantitative and Qualitative review by UNICEF

11. Clarification meetings/calls with suppliers

12. Evaluation of proposals per Evaluation Criteria & Procurement Objectives

13. Consultation with PRG* and Partners

14. Recommendation of awards based on evaluation

15. UNICEF internal award review and approval process

16. When applicable, Partner (f.ex. GAVI) approval, and provision, of any financial requirements

17. Information of outcome to PRG

18. Notification of awards to proposers

19. Establishment of Arrangements

20. Public posting of awards (www.unicef.org)

21. Debriefing of proposers*PRG: Procurement Reference Group established for some GAVI supported vaccines

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Public Notification of Awards

UNICEF has standard procedures for publication of awards on website:

• Tender, duration, total value, material(s), supplier name

• This is UNICEF standard procedure (not vaccine specific)

After awards of LTAs, all Proposers will receive a letter including the following

information:

• Total vaccine quantity awarded per year per presentation at an aggregate

level

• Number of suppliers awarded per year per vaccine presentation

• Yearly projected weighted average price (WAP) per vaccine presentation

based on the awards made

• Individual (own) manufacturer pricing and quantities if awarded

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Ensuring equal treatment, no bias and ethics

• Contracting staff are governed by UNICEF Financial Rules and Regulation and procedures related to ethical behaviour

• During the time when a tender is open (from tender issuance to closing) -communication with suppliers is more formal and written, in accordance with tender instructions

• Bids/proposals are received and validated by an independent ‘Bid Section’ (QA) and then transferred to Contracting staff

• UNICEF does not accept manufacturers to fund trips, hotels, etc. or gifts

• Business should be conducted during normal working hours

• Meetings should be with minimum two UNICEF staff members

• Suppliers not invited to UNICEF staff offices

UNICEF

Issues Formal

Tender

and Evaluates

Offers

Establishment of

Long Term

Arrangements

for supply of

vaccines for

multiple years

1-4

years

Placement of

orders

PO

POPO

Shipment from

Manufacturer

to countries

(UNICEF

freight

forwarders)

Country

inspection

Invoice

payment

Vaccine

Arrival

Report

Procurement process overview

Working with UNICEF on vaccines – operational expectations

• Communication – timely & accurate on planning, execution and strategic issues:

• Minimum Vaccine Shelf life - minimum shelf life at time of shipment is defined.

Require effective forecast exchange to align availability and demand, and agile production planning.

Deviation require explicit acceptance from countries prior to shipment is required

UNICEF is reviewing with WHO specific case where this has been a persistent challenge

• Country registration: countries are increasingly enforcing registration

requirements

Manufacturers need to pursue registration; not being registered limits flexibility in order placement

• Feedback on how we are doing

Is our communication and performance on planning, strategic issues and operational execution

sufficient? Lacking? Good?

Transparency on vaccine prices and markets

Supporting countries to make informed decisions

As a public procurement agency, recognising the need for increased

transparency

Price Transparency

• Historically, UNICEF has posted weighted average pricing for current

year

• Specific country pricing provided in response to the forecast at the

onset of the year

• Since January 2011 posted all historic pricing contracted under LTA

from 2001

Looking forward: continued transparency efforts;

• Additional pricing information, expanding beyond LTAs

• Continued development of Market notes to inform stakeholders

Overview of main 2014-2015 tender activities* for vaccines

*Estimated timelines, may be adjusted

2014

Q4 Q1 Q2 Q3 Q4

Non GAVI

Pentavalent

vaccine

Tender

Seasonal Flu Tender

BCG Tender

TT and Td Tender

DTP, DT, HepB Tender

Pentavalent

vaccineTender

Rota vaccine Tender

Cholera emergency

stockpileTender

IPV containing

vaccine

Expression of

interest

Product2015

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