Working with UNICEF: procurement principles and process

Content Principles and Regulatory Framework Guiding UNICEFs Procurement

UNICEF Vaccine Procurement Tendering Process and plans

UNICEF

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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 PROCESSES Financial 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 4

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 5

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.] 6

UNICEF Vaccine Procurement

UNICEF has a key role in vaccine procurement and procuring immunization supplies on behalf of around 100 countries annually

2013 Vaccines Supplies: US$ 1, 285 million

2.79 billion doses

2,185 shipments

Immunization Supplies Vaccines BCG , 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

Countries UNICEF procures on behalf of Full schedule Partial schedule Source: UNIICEF Supply Division

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

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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

The specific tender objective defines the expected tender outcome: 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

UNICEF

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Procurement process overview

UNICEF Issues Formal Tender and Evaluates Offers

Invoice payment

1-4

years

Establishment of Long Term Arrangements for supply of vaccines for multiple years

PO PO PO

Placement of orders

Vaccine Arrival Report

Shipment from Manufacturer to countries (UNICEF freight forwarders)

Country inspection

The tender process:

Develop, Issue, Receipt

1. 2. 3. 4. 5.

Development of specific procurement strategy and objectives Demand / Forecast development Development of draft tender document Pre-tender consultation with industry Feedback from industry and finalization of tender document [The above may be with relevant partners or PRG* consultations]

1. 2. 3.

Issuance of tender – invitees Clarifications Receipt of proposals UNICEF

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

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) UNICEF Type your title in this FOOTER area and in CAPS 21. Debriefing of proposers *PRG: Procurement Reference Group established for some GAVI supported vaccines

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

UNICEF

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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

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Procurement process overview

UNICEF Issues Formal Tender and Evaluates Offers

Invoice payment

1-4

years

Establishment of Long Term Arrangements for supply of vaccines for multiple years

PO PO PO

Placement of orders

Vaccine Arrival Report

Shipment from Manufacturer to countries (UNICEF freight forwarders)

Country inspection

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 Product

2014 Q4

Non GAVI Pentavalent vaccine

Tender

2015 Q1

Seasonal Flu

Tender

BCG

Tender

TT and Td

Tender

DTP, DT, HepB

Q2

Q4

Tender

Pentavalent vaccine

Tender

Rota vaccine

Tender

Cholera emergency stockpile

Tender

IPV containing vaccine

Q3

Expression of interest

*Estimated timelines, may be adjusted

Thank you