093 e v100 Procurement Manual

8/3/2019 093 e v100 Procurement Manual

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Procurement manualfor the procurement of

goods and services

Document reference number: 093

Document Authorization

Stakeholder Name Position Signature Dateapproved

Author

Document Owner Procurement Unit

Manager

10.2002

Document Authorizer Procurement Unit

Manager

10.2002

Document Stakeholders

Version number: 1.00Authorization date: August 2002


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INTERNATIONAL FEDERATION OF RED CROSS

AND RED CRESCENT SOCIETIES

PROCUREMENT MANUALFOR THE PROCUREMENT

OF

GOODS AND SERVICES


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procurement manual, p. 2 of 51

TABLE OF CONTENTSINTRODUCTION

1.00 PROCUREMENT IN THE SECRETARIAT

1.01 Definitions1.02 Management

1.03 Authorisation Levels

1.04 Procurement System Overview1.05 Administration

File cover

2.00 AUTHORISATIONS IN THE PROCUREMENT PROCESS

2.01 General

2.02 Authorised Persons2.03 Delegation of Procurement Authority

2.04 Authorisation Documents

2.05 Procurements with Exceptional Requirements

Annex A Levels of Authorisation (Chart)

Annex B Delegation of Authority (Sample)

3.00 THE PROCUREMENT PROCESS

3.01 Responsibility3.02 Requisitioning Supplies and Services

3.03 Procurement3.04 Purchase Orders

3.05 Blanket Purchase Orders

3.06 Receiving Supplies and Equipment

3.07 Receiving Services3.08 Discrepancies in Delivery

3.09 Returning Material to Supplier

3.10 Certification of Invoices

Requisition (Form)Goods received note (Form)

4.00 REGISTRATION OF PROSPECTIVE SUPPLIERS/CONTRACTORS

4.01 Supplier Database

4.02 Registration4.03 Evaluation of Supplier Applications

4.04 Supplier Information Files

4.05 Supplier Database Maintenance

4.06 Removal from Supplier Database4.07 Co-ordination with the Legal Affairs Unit

4.08 Re-Qualification of Suppliers


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Link Supplier profile/registration form

5.00 REQUESTS FOR QUOTATION

5.01 Types of Solicitation

5.02 Basic Requirements

5.03 Selection of Suppliers5.04 Preparing Requests for Quotation5.05 Amending the RFQ

Request for quotation (sample)

Annex B Request for Proposal (Sample)Annex C Incoterms

6.00 OPENING OF BIDS OR PROPOSALS

6.01 General

6.02 Procedures for Receiving Bids6.03 Contacts with Suppliers

6.04 Bidding Irregularities

7 .00 EVALUATION OF BIDS AND CONTRACT AWARD

7.01 General7.02 Basic Considerations

7.03 Comparative Bid Analysis (CBA)

7.04 Adherence to Specifications

7.05 Evaluation of Delivery Terms

7.06 Evaluation When Grouping Items7.07 Offers of Lesser Quantity

7.08 Payment Discounts

7.09 Tie Bids or Proposals7.10 Authorised Costs Exceeded

7.11 Errors and Omissions

7.12 Release of a Bidder

7.13 Recommendation of Award7.14 Advance Notice of Award

7.15 Requests for Information by Suppliers

7.16 Regrets Notification

Comparative bid analysis

8.00 EXCEPTIONS TO CALLING FOR BIDS OR PROPOSALS

8.01 Approved Exceptions

8.02 Telephonic Solicitations

8.03 Use of Exceptions

9.00 FEDERATION COMMITTEE ON CONTRACTS

9.01 General

9.02 Meetings of the CoC


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9.03 Composition of the CoC9.04 Duties of the CoC Members

9.05 The ProcurementService's Role

9.06 Presentations to the CoC

9.07 Ex post facto Presentations9.08 Local Committees on Contracts

10.00 FEDERATION CONTRACTS AND PURCHASE ORDERS

10.01 General

10.02 Contract Documents

10.03 Purchase Order

10.04 Short Form Purchase Order10.05 Written Agreement

Purchase order (Sample)

Local purchase order (Sample)Terms and conditions

11.00 DISPOSAL BY SALE OF PROPERTY

11.01 General

11.02 Methods of Sale

11.03 Conduct of the Sale

11.04 Actions Subsequent to Sale11.05 Sales to Delegates and Local Staff

Annex A Invitation to Bid (Form)


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INTRODUCTION

Purpose and Use of the Manual

The procurement activities conducted within the Secretariat have been governed by the provi-

sions of the Federations Procedures for Authorisation of Financial Commitments and Pro-

curement and theHandbook for Delegates. This manual is intended to provide guidance on

procurement policies and procedures to all Federation staff members, as well as Delegation,

separate office and unit members whose official functions require involvement in the pro-

curementprocess of the Federation. Therefore, effective immediately, the above mentioned

Procedures will exclude the part on Procurement and be renamed Procedures for Au-

thorisation of Financial Commitments. The section regarding Procurement is replaced by

this Manual. These procedures are issued to ensure that the Federation receives the best

product or service for the price paid, and that those seeking Federation business are confident

that their proposals and bids are being fairly considered and assessed.

Organisation of the Manual

This manual covers the Federations procedures and activities dealing with the procurement

of supplies, equipment and services, as well as the sale of Federation property. The organisa-

tion and content of the sections are covered in the table of contents at the beginning of the

manual.

Amendments to the Manual

It is intended that this Manual be integrated into the Procedures Manual for the Federation.

Until this occurs, the Head of Logistics Service in the Department of Disaster Response Sup-

port shall be so responsible.

Amendments will be prepared as replacement pages which will bear the same identification,

but will include a revision number and date at the bottom of the page. Each amendment will

be numbered to assist in tracking changes. Once amendments are issued, the superseded

pages should be replaced.


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SECTION 1

1.0 PROCUREMENT IN THE SECRETARIAT

1.01 Definitions: For purposes of these guidelines the following definitions apply:

a. Procurement is understood to mean the purchase of goods, services, and capi-

tal items as well as the contracting (hiring, renting, etc.) of equipment, facilities, consultants

or services. Within these guidelines, it is also understood to include any action which com-

mits the Federation to contractual obligations, the changing or amending of contracts, the in-

vitation of proposals or tenders, and the negotiation with potential suppliers or purchasers.

b. The Secretariat is understood to mean not only the Secretariat headquarters inGeneva, but also its field delegations and separate units or offices, regardless of location.

c. Purchasing Officer refers to an individual authorised to conduct procurement

as defined above, but not necessarily an officer as the term is generally used. The term

Procurement Officer, when used, refers to an officer specifically employed and trained to

conduct procurement for the Secretariat.

d. Solicitation refers to the process of requesting bids, proposals, offers, and the

like, with the intention of generating a contract.

e. Contract refers to a legally binding agreement, whether issued verbally or in

writing, and whether presented as a formal written agreementor as aformattedpurchase or-

der.

1.02 Management:

a. The ProcurementService in the Administration Departmentis be responsiblefor overall management of procurement, to include contracting, within the Secretariat. It

drafts the standards and procedures for approval by the Management Group and publishes

them when approved. It is also responsible, in co-ordination with the Internal Audit Unit, formonitoring compliance. Most of the procurement and contracting for the Secretariat in Ge-neva will be accomplished by the Procurement Service.

b. The Logistics Service is currently responsible for the procurement of goods

and services for Secretariat operations in the field in compliance with the standards and pro-cedures of the Secretariat,pending review. The Logistics Service will, in the meantime, co-

ordinate closely with the Procurement Service to ensure that such standards and procedures

take adequate consideration of the diverse conditions of field programmes and operations. Inmany cases, Regional Logistics Centres will perform the procurement function for ongoing

operations in the field. The Logistics Service is responsible for technical management of the

Regional Logistics Centres.


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b. Other Departments, Services or Units, to include Delegations, Federation Of-

fices and Representatives in the field are authorised to make direct purchases of goods or ser-

vices required for their activities provided that such procurement has been provided for in

their authorised budgets, that funds are available and that procurement procedures as estab-

lished in this document are followed.

1.03 Authorisation Levels: Authorisation levelsfor authorising expenditures, are estab-lished in the Federation's Procedures for Authorisation of Financial Commitments and Pro-

curement and in theHandbook for Delegates, and are subsequently included in Section 2,

Annex A.

1.04 Procurement System Overview:

a. The Purchase Request (PR): The PR defines the requirement for procurement,

and also serves as the authorisation document for the purchasing office when properly com-

pleted and signed. Regardless of where the procurement takes place, any purchase of goods

or services exceeding CHF 1,000 must be initiated by a PRfrom the requesting office. Toensure an adequate document trail, it is a good practice to initiate all requirements on a PR

regardless of the monetary value. (See Section 3.)

b. The Request for Quotations (RFQ): Following the receipt of a PR for pro-

curement exceeding CHF 1,000, the purchasing office, or someone properly authorised, will

issue a formal RFQ to selected suppliers. Unless exceptional circumstances exist, the RFQ

will be issued to a minimum of three suppliers known to provide the goods or services re-

quested. (See Section 5.)

c. Competitive Bid Analysis (CBA): The quotations, bids or offers, receivedfrom the suppliers in response to a RFQ are evaluated in a process referred to as Competitive

Bid Analysis, which is designed to ensure that the Federation receives the best product or

service for the price paid. The CBA considers a number of variables, to include compliance

with the product or service specifications, the price, delivery time, etc. (See Section 7.)

d. Selection of the Supplier: Supplier selection is a result of the CBA process.

Any selection which is not based upon price will be justified in writing on the CBA. The se-

lected supplier may be notified by fax prior to issuing the Purchase Order to ensure there are

no misunderstandings in the offer. (See Section 7.)

e. The Purchase Order (PO): The PO is a pre-numbered document which consti-

tutes a formal contract with the supplier. All information relative to the procurement must be

included on, or referred to and attached to the PO. (See Section 10.)

f. Contracts: In certain cases, e.g., construction, rental, administrative services,

etc., it is necessary to replace a PO with a written agreement (contract) to ensure that the ob-

ligations and rights of both the buyer and the seller are adequately defined. The procedures

applicable to generating purchase orders apply equally to the generation of written contracts.

(See Section 10.)


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g. Delivery of Goods or Services: It is the responsibility of the individual con-

ducting the purchasing to monitor the delivery of goods or services, to ensure contract com-

pliance and to protect the Federation's interests. A Goods Received Note from the ordering

agency is not always sufficient. When the nature of the procurement, the goods or the ser-

vices indicates difficulty in quantity or quality control, the responsible individual should con-

sider the use of inspection or surveillance companies. (See Paragraph 5.04)

h. Certification of Invoices: Subsequent to receiving the requisitioners Goods

Received Note (GRN) and the resolution of any discrepancies with the supplier, the purchas-

ing officer will certify the correctness of the information on the supplier's invoice and for-

ward it, properly coded, to the appropriate Finance Office for payment. (See Paragraph

3.10.)

1.05 Administration:

a. Each office conducting procurement will maintain a completed and separate

file for each procurement action. These files are referred to herein as procurement case files.

b. Case files will be treated as sensitive files, and will be released only to those

whose duties require access to the files. All documents related to the procurement action,

whether completed or not, should be maintained in the case file.

e. Case files should be standardised to facilitate use and to ensure completion.

File cover
http://../forms/logisticsformsprocurement/filecover.xlshttp://../forms/logisticsformsprocurement/filecover.xls


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SECTION 2

2.0 AUTHORISATIONS IN THE PROCUREMENT PROCESS

2.01 Definition: Persons authorised to conduct procurement, to include contracting ser-

vices, are defined in this Manual and in theHandbook for Delegates. Procurement in thiscontext is understood to include, in addition to entering into contracts, the commitment of the

Federation to contractual obligations, the changing or amending of contracts, the invitation of

proposals or tenders and the negotiation with potential suppliers or purchasers on the basis of

detailed specifications.

a. There is an essential difference between the level of authorising an expendi-

ture for procurement, which is included as Annex A to this Section, and those authorised to

conduct the procurement, which is the primary concern of this section.

2.02. Authorised Persons:

a. Unless otherwise directed by the Secretary General, the Logistics Serviceis

responsible for procurement standards and procedures, as well as for oversight of theconduct

of procurement activities on behalf of the Secretariat of the International Federation of Red

Cross and Red Crescent Societies in Geneva.

b. The Logistics Service is currently responsible for and authorised to conduct

the procurement of goods and services for Secretariat operations in compliance with the stan-

dards and procedures published herein. Regional Logistics Centres, when established, are

considered as technical extensions of the Logistics Service and are authorised to perform pro-curement for field programmes in accordance with their Terms of Reference (ToR).

c. Delegations, Federation Offices and Representatives in the field are similarly

authorised to make direct purchases of technical goods or services required for their activities

provided that such procurement has been provided for in their authorised budgets, that funds

are available in the relevant accountand that such procurement is in accordance with the

procedures as established in this document and their ToR.

2.03 Delegation of Procurement Authority: Additional or extraordinary delegation of con-

tractual signing authority may be required from time to time, or for specific periods or pur-poses. Such authorisation to conduct procurement activities for Departments, Services or

Units not listed in paragraph 2.03.b below will be specifically granted by one of the officers

listed therein, stipulating the individuals or positions concerned, the levels of authority and

any exceptional restrictions in writing,

a. General: Any commitment made by authorised persons in their official capac-

ity is made on behalf of the Secretariat, and there must be a defined line of authority for such

action. A clear and complete audit trail must be established for all procurement actions

taken. Prior to such commitment, persons delegated contractual authority are to ensure:


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(1) All Federation Financial rules and regulations, procedures and instruc-

tions have been complied with.

(2) The commitment has been approved at the appropriate levels.

(3) The commitment is in the best interests of the Federation.

b. Authorised officials: To facilitate Federation operations and consistent with

their terms of employment, the Secretary General, who has unlimited procurement/purchase

authority, has authorised the following officials to act on his/her behalf to contract for pur-

chases of services, supplies, equipment or other requirements on behalf of the Secretariat:

(1) The Under Secretary General for Finance and Administration.

(2) The Director of the Administration Department.

(3) The Head ofProcurement Service, who in turn will determine theauthorised level for his/her staff.

(4) The Head of Logistics Service, until otherwise changed, when acting

in behalf of field programmes, who in turn will determine the authorisations within that Ser-

vice.

c. Heads of Field Units: Heads of Delegation, Regional Logistics Centres and

other field offices will be delegated their authority in writing along with their mission instruc-

tions and / or Terms of Reference.

d. Assigned Staff: The officials listed above may be assisted by the appropriate

staff to carry out procurement activities, but in assigning such tasks and authorities, the offi-

cials retain the responsibility for compliance with all rules, regulations, procedures and in-

structions. Staff members who will be responsible for signing contractual documents in the

absence of the authorised signatories must be specifically delegated such authority in writing,

f. Responsibilities: This delegation of signing authority is granted on an indi-

vidual basis and requires all individuals with signature authority to exercise their duties and

responsibilities with the utmost care, competency, efficiency, fairness and integrity. Such in-

dividuals are personally accountable for improper use of this authority or for acting without

proper authority.

2.04 Authorisation Documents:

a. Purchase Requests (PR): When properly completed, the PR includes a com-

plete description of the goods or services being ordered as well as the budget coding, limita-

tions and the appropriate authorisation for the purchasing office to conduct the procurement.

A PR is required in all cases when a Purchasing Officer is conducting the procurement for

another. The authorisation levels in Annex A apply to any PR requesting procurement. AllPRs over CHF 400,000 must be approved by the Secretary General. Properly authorised in-


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dividuals may make purchases within their own budgets up to CHF 1,000, to include the

costs of inspection and transportation, if any, without completing a PR.

b. Purchase Orders (PO): The PO is the formal contract with the vendor. For

every procurement above CHF 1,000 a PO or contract must be issued. The Head of Pro-

curement Service, Logistics Service or the Regional Logistics Centre signs the PO on the ba-

sis of the authorisation provided in the PR. No PO will be issued until the proper level of au-thorisation is received.

c. Contracts: In any procurement which requires a formal contract, there should

be a PR which provides not only the authorisations but also the detailed requirements. Con-

tracts for services or facilities generating recurring costs should not be negotiated for periods

exceeding one year. Exceptions to this rule must be authorised by the Director of Finance for

Geneva contracts, or by the USG, DROC for field contracts entered for periods up to three

years. The Secretary General must authorise all service contracts for periods exceeding three

years.

2.05 Procurements with Exceptional Requirements:

a. Immovable Property: Immovable, or real property such as land and buildings

can only be acquired with the prior formal authorisation of the Secretary General and follow-

ing the general guidelines herein. When such an acquisition would result in the Federation

having a freehold or permanent title to such property, the PR will also include all additional

purchase or transfer costs (notary, legal fees, title costs, etc.); will provide adequate informa-

tion with regard to the legal situation, the quality of the title to be held, whether the property

is free of lien, mortgage or other attachments and the tax consequences of such acquisition;

will indicate how the acquisition is to be financed, how it is eventually to be resold or dis-posed of, whether the proceeds of such disposal can be exported from the country concerned,

and how these proceeds are to be treated.

b. Telecommunications: Any purchase of telecommunications or computer

equipment with a value in excess of CHF 1,000 which is not in conformity with specifica-

tions published by the Information Systems Department must be authorised by the Director,

Information Systems Department.

c. Vehicles: All purchases of motor vehicles for field operations, to include mo-

torcycles, cars, trucks, etc., must be authorised by the Head of Logistics Service, who will re-

view for compliance with the existing list of approved vehicles.

ANNEXES

A. Levels of Authorisation (Chart)

B. Delegation of Authority (Sample)


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ANNEX A to SECTION 2

LEVELS OF AUTHORISATION

Procurement Authority: The following expenditure authorisation levels, defined in the Fed-

erations Procedures for Authorisation of Financial Commitments and Procurement applyto the authorisation forpurchases as well as contracting of services. For service contracts

generating recurring costs (e.g., rentals, maintenance, etc.) the CHF value corresponds to theannual cost.

Expenses Funded by Statutory Contributions

Budgeted Not Budgeted

Support staff up to CHF 1'000 -

Officer up to CHF 5'000 -

Head of Service or Unit,

or Deputy Director up to CHF 20,000 up to CHF 1,000

Department Director up to CHF 100'000 up to CHF1* 20'000Undersecretary General up to CHF 400'000 up to CHF* 100'000

Secretary General above CHF 400'000 above CHF 100'000

Expenses Funded by Operations Support

Within Approved Budget Outside Approved Budget


Desk Officer, Head of

Del, or Deputy Dir of

Regional Dept

up to CHF 50,000 up to CHF 10,000

Head of DROC Support

Service up to CHF 100,000 up to CHF2** 20,000

Dir of Regional Dept or

Disaster Response Spt up to CHF 200,000 up to CHF** 50,000USG, DROC up to CHF 400'000 up to CHF3*** 100'000


Expenses Financed by Voluntary Contributions

Budgeted Not Budgeted


Officer up to CHF 5'000 -

Head of Service or Unit,

or Deputy Director up to CHF 20,000 up to CHF 1,000

11*Jointly with Director of Finance.22**Jointly with Director of Finance and USG DROC.

33***Jointly with Secretary General.


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Department Director up to CHF 100'000 up to CHF* 20'000Undersecretary General up to CHF 400'000 up to CHF* 100'000


ANNEX B to SECTION 2

Memorandum

To: Whom It May Concern cc: Director, Finance Department

From: Ms. Ann Thropy

Head of Procurement Service

Date: 1 July 1998

Re: Delegation of Authority (Sample)

__________________________________________________________________________

This is to certify that (name) ___________________________, who is currently serving as

the (position) ___________________________, has been delegated the authority to make

expenditures for individual purchases on behalf of the International Federation of Red Cross

and Red Crescent Societies, such individual purchases not to exceed a value of CHF 20,000(Twenty thousand Swiss Francs) per purchase, when accomplished in accordance with an ap-

proved budget and the procurement regulations of the Federation.

Ms. / Mr. _____________ has also been delegated the authority to sign properly executedpurchase orders and contracts of a value not to exceed CHF 400,000 (Four-hundred thousand

Swiss Francs) each when supported by the proper authorisation documents and executed as

detailed in the Federations Procurement Manual.

By signing this memorandum, Ms. / Mr. ______________ acknowledges to be in possession

of a copy of the Procurement Manual, to be familiar with its contents and agrees to comply

with the procedures therein.

This delegation of authority is effective the _____ day of __________, 1998 and expires the

____ day of ____________, 1998 unless sooner terminated in writing. This memorandum

supersedes all previous authorisations.

________________________ _________________________

Ms. Ann Thropy Mr. / Ms. (Name)

44Applies only to expenses for which funding has been confirmed as available.

55Jointly with Director of Finance.


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Head of Procurement Service (Position)Date: Date:

Note: If individuals receiving a delegation of authority do not work for the individual delegating the authority,then the line manager of that individual must sign acknowledging the action.


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SECTION 3

3.0 THE PROCUREMENT PROCESS

3.01 Responsibility: Over-all responsibility for procurement for the Secretariat rests with

the Procurement Service. Up to the limits specified in Section 2, and as modified by their re-spective Terms of Reference, responsibility for procurementfor field programmes rests withthe Head of Logistics Service and respective heads ofRegional Logistics Centres, Delega-

tions and Offices.

3.02 Requisitioning Supplies and Services:

a. Purchase Requests: Supplies and services are ordered by requisitions, referred

to herein as Purchase Requests (PRs) for standardisation, although they have previously been

referred to as Procurement Requisitions, Logistics Requisitions, and a variety of other names.

b. Writing the Purchase Request. PRs may be initiated by any individual withknowledge of the programme requirements and budget limitations, but must be signed by an

individual who has the appropriate level ofexpenditure authority. (See Section 2.) They areto be submitted in full detail, with particular attention to the following:

(1) Specifications. Technical specifications ordescription of each of the

line items on the PR must be clear and sufficient for identification of potential sources ofsupply by the Purchasing Officer. A complete description and any specifications which may

be available shall be included. If specifications are not available, then this should be stated

on the PR along with sufficient information for the Purchasing Officer to generate a descrip-

tion and locate suppliers. In some cases, it may be necessary for the Purchasing Officer to

generate a Request for Proposal (RFP) to define both the items or services desired as well aspotential suppliers.

(2) Desired Delivery Date: As the arrival of many goods and services areessential to the success of operational programmes, it is essential that the individual complet-

ing the requisition provide a realistic desired delivery date, as expediting delivery may easily

change the mode of delivery, the quality of the goods or services and the overall cost. ASAP

is not an acceptable delivery date.

(3) Consolidation of Purchase Requests. PRs should be consolidated by

line and type, as far as possible, so that economies of scale may be realised. Requesting of-

fices shall not subdivide Purchase Requests to avoid approval authority levels.

(4) Availability of Funds and Propriety of Purchase. It is the responsibility

of the officer approving the PR to ensure that funds are available within the programme ac-

count to cover the purchase. Unless other guidance requires pre-approval by the supportingFinance Officer, the signature of the approving officer is taken as certification that funds are

available, and that a need exists for the items or services requested.

3.03 Procurement: Purchasing officers are responsible for purchasing supplies and equip-ment as indicated on the PR. Upon receipt of a PR, the Purchasing Officer willassign a pro-

curement file reference number and establish a procurement case file. All purchases will beconductedin a competitive, fair and unbiased manner. When preparing the Request for Quo-

tation (RFQ), great care must be taken to ensure that the specifications for the equipment or


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services are written in an objective manner so as not to favour a product or service of a par-ticular contractor.

3.04 Purchase Orders: The Purchase Order (PO) is a pre-numbered document which con-

stitutes a formal contract with the supplier. All information relative to the procurement mustbe included on, or referred to and attached to the PO. The Purchasing Officer issues a PO to

the supplier after acceptance of an offer. Detailed procedures for the preparation of purchase

orders are contained in Section 10 of this manual.

3.05 Blanket Purchase Orders: When repetitive orders of low value non-stock items and

services occur, where limited time is an important factor, or where prices may conform to a

set pattern in the trade, Delegations, Centres and Offices may be authorised to order limited

supplies and specific services directly from selected vendors. Under such arrangements,blanket contracts, otherwise referred to as Blanket Purchase Orders (BPO) are established by

the procurement office based on the requisitions and funding authority received. Where a

blanket purchase order has been established, the department may order directly using a Short

Form Purchase Order, or short form. (See Section 10.)

3.06 Receiving Supplies and Equipment: Requisitioning offices are directly responsiblefor ensuring the receipt and physical inspection for both quantity and quality. They may use

technical experts and Inspection or Surveillance Companies when considered necessary tosafeguard the Federations interests. The Purchasing Officer can advise on the desirability of

an inspection upon receipt, and will also contract for such services, if desired. Supplies and

equipment which have been received, inspected and accepted or rejected are so documented

on a Goods Received Note. .

3.07 Receiving Services: For POs or Contracts for Services, the PO or Contract will stipu-

late the delivery requirements, and will identify the appropriate Contracting Officer, and any

Ordering Officers, if appropriate. Ordering Officers are designated in writing and may be

used when the Contracting Officer is unable to personally place the orders for services andinspect on the delivery thereof. The Contracting Officer, Ordering Officer or designated In-

spection Company will verify and certify the delivery of services ordered prior to the pay-

ment for such services.

3.08 Discrepancies in Delivery: Under normal circumstances, the proper documentation of

receipt of goods and services is sufficient for the Purchasing Officer to resolve any discrep-

ancies with the supplier. For this reason, the proper completion of receipt documentation isessential. Occasionally, however, the vendors will not reconcile the discrepancies and will

demand financial benefit to which they are not entitled. It is the responsibility of the office

conducting the procurement, in co-ordination with the Legal Affairs Unit, to resolve discrep-

ancies which cannot be solved through the normal presentation of documents. Recipients ofgoods or services will advise the Purchasing Officer immediately when circumstances indi-

cate that there will be disputes over payment for such goods or services. Purchasing Officers

in Delegations or field offices should contact their servicing RLC or the Logistics Service for

additional assistance.

3.09 Returning Material to Supplier: When it appears necessary to return material to the

supplier who supplied it against a PO, the Purchasing Officer concerned will contact the

supplier and advise of the proposed action, citing the original PO Number, the material beingreturned, the value as shown on the PO, and the reason for returning the material. Depending

upon the circumstances, the supplier may be given the opportunity to replace the goods or toissue an appropriate credit note or refund in respect of its value. The manner in which the


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material is to be returned will be negotiated with the supplier, to include whether the cost is tobe borne by the Federation or by the supplier.

3.10 Certification of Invoices: It is the Purchasing Officers responsibility to verify that

the goods or services have been received in apparent good order, or to resolve any differences

arising from the delivery of goods and services, prior to certifying the invoice for payment.Once receipt of the goods or services has been verified, the Purchasing Officer will verify

that all documents and other requirements incident to the contract are in order, code the origi-nal copy of the invoice with the appropriate funding codes, sign and date the invoice approv-

ing it for payment, and forward the invoice along with a copy of the PR, the PO and theGoods Received Note to the appropriate Finance Office for reconciliation andpayment.

a. Blanket Purchase Orders: In addition to the requirements above, Purchasing

Officers who are certifying invoices for payment against BPOs shall attach a copy of the ap-

plicable Short Form Purchase Order(s) documenting the delivery orders against the BPO.

b. Disputes: In the event of disputes over an invoice, the Purchasing Officer

should negotiate a partial payment for the undisputed amount with the supplier to avoid un-fairly penalising the supplier during resolution of the dispute.

Requisition (Form)

Goods received note (Form)
http://../forms/logisticsformsprocurement/requisition.xlshttp://../forms/logisticsformsprocurement/requisition.xlshttp://../forms/logisticsformsprocurement/goodsreceivednote.XLShttp://../forms/logisticsformsprocurement/goodsreceivednote.XLShttp://../forms/logisticsformsprocurement/requisition.xls


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SECTION 4

4.00 REGISTRATION OF PROSPECTIVE SUPPLIERS/CONTRACTORS

4.01 Supplier Database: At the present time, all supplier registration is conducted manu-

ally using the Supplier Registration Forms, a sample of which is at Annex A. It is the inten-tion that the Federation will maintain a computer database in which it registers prospective

contractors for Federation requirements on a world-wide basis. Pending availability of an

automated database, paper files (a manual database) will be maintained. Regional Logistics

Centres will also register regional suppliers which are not considered capable of providingsupport on a global basis. Suppliers will be retrievable from the database under the com-

modities and services they provide. There is no requirement for Delegations and Field Of-

fices of the Secretariat to maintain formal supplier rosters.

4.02 Registration: Registration of a Supplier is not a promise that a particular Supplier will

get business, or even be selected to receive RFQs. Registration merely ensures that suppliers

which are placed in the Supplier Database have been pre-qualified for the commodities or

services registered.

a. A supplier may enter the database by:

(1) Applying for registration and acceptance in the evaluation process.

(2) Receiving a Federation contract. To remain in the database the sup-

plier must successfully complete the registration process.

(3) Recommendation by one of the Regional Logistics Centres or Delega-

tions.

b. Final approval for Supplier Database entry is the responsibility of the Head of

the ProcurementService for Geneva procurements, and for the Head of the RLC concernedfor regional rosters. Suppliers applying for registration will be notified, in writing, of the re-

sults of their applications. Responses to unsuccessful applicants should include brief descrip-

tions of the reasons for nonacceptance of their applications.

c. National Societies of the Federation may, at the discretion of the Head ofPro-

curementService, provide names of possible applicants for the Supplier Database. They mayalso be provided with a list of Suppliers from their country which are already registered. De-

tailed information on other countries' data will not be provided, although National Societiesmay be provided a list of available suppliers for a particular commodity or service.

4.03 Evaluation of Supplier Applications: The Head ofProcurementService shall estab-

lish registration material to be issued to suppliers which request to be included in the SupplierDatabase.

a. The registration materials shall include a questionnaire which shall elicit datafrom the prospective supplier on its correct name, address, country of origin, business experi-

ence, references, details about the services or commodities offered, current financial state-

ments, as well as names, addresses and telephone/fax numbers and any other relevant means


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of contact with designated persons of authority within the supplier's organisation. No appli-cation should be considered unless it includes the signature of an authorised person who

thereby certifies the accuracy of the information provided.

b. Each application for registration shall be evaluated by a nominated procure-ment officer who has the knowledge and capability to assess supplier applications. The

evaluation should be recorded directly on the questionnaire and shall be signed by the evalu-

ating officer.

c. The evaluating officer may also obtain information from other humanitarian

organisations, from open commercial sources, as well as from suppliers, subcontractors, and

customers of the prospective supplier in evaluating registration applications.

d. Failure to provide the information requested may be grounds for disqualifying

the potential supplier. Common reasons for rejection include:

(1) No relevance of the commodity or service offered

. (2) Failure to demonstrate financial stability.

(3) Inadequate supplier business experience or capacity.

(4) Failure to demonstrate technical competence or professional certifica-

tion.

4 Supplier Information Files: Applications, supporting documentation and the evalua-

tion forms are to be filed in the appropriate Secretariat file. A library shall also be established

which contains supplier publications and catalogues indexed according to commodity or ser-

vice, and relevant trade registers, directories and trade journals. The maintenance of the ref-

erence library will be the responsibility of the ProcurementService, in co-ordination with theInformation Resource Centre and the various technical departments.

4.05 Supplier Database Maintenance: To ensure the integrity and manageability of theSupplier Database, the Database must be maintained regularly. Suppliers who have not re-

ceived a RFQ for a period of three years, or who have received RFQs but not responded with

a proposal, will be deleted from the database unless there is solid reason to retain the supplier.

This information should be included on the acceptance letter to eliminate the need for writtenfollow-up when purging the database.

(a) To ensure adequate maintenance of the Database on an ongoing basis, the

ProcurementService shall monitor the performance of all Suppliers who are awarded con-tracts and purchase orders. All Purchasing Officers and Assistants shall be responsible for

recording compliance and non-compliance of Suppliers with the terms and conditions of the

contracts and purchase orders and shall pass on all relevant information on this performance

to the ProcurementService. The ProcurementService may use such information and anyother relevant information independently obtained to remove non- or poor-performing suppli-

ers from the Database.

(b) Factors to be considered in evaluating supplier performance include:

(1) The quality of the product or service provided.

(2) Compliance with contractual terms and conditions.


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(3) Delivery schedule compliance.

(4) Efficiency in response to requests by for information.

(5) Adherence to warranty provisions

(6) Speed and co-operation in resolving problems and/or settlement ofclaims.

4.06 Removal from Supplier Database: The Head of the appropriate Service or Centre

shall review the circumstances and decide whether or not a supplier should be removed, and

if so, the decision shall be made in writing and shall set forth the reasons for removal. Thisdecision will be maintained in the Supplier file. The Supplier should be informed in writing

of the decision to remove its name from the database with a statement of the reasons for such

removal and the supplier should be given a maximum period of thirty days within which to

respond to such decision. Decisions appealed should be referred to the Committee on Con-tracts for review. A supplier may be removed from the database for the following reasons:

a. Poor performance based upon contract compliance.

b. Submission of false information.

c. Bankruptcy, or a decision of legal incompetence.

d. Failure to respond to three successive solicitations without reasonable expla-

nation.

e. Determination, after initial registration, that the products/services are not

needed by the Federation..

f. Criminal conviction or civil judgement against the Supplier for the commis-

sion of any offence indicating a lack of business integrity or business honesty.

g. Filing a formal claim or lawsuit against the Federation.

4.07 Co-ordination with the Legal Affairs Unit: The Legal Affairs Unitshould always beconsulted before taking action to remove a supplier from the Supplier Database for reasons

related to malfeasance. Additionally, the Legal Affairs Unitwill be immediately notified in

any event in which a Supplier threatens or initiates a formal claim or lawsuit, as well as in

any instance in which legal action against a Supplier is under consideration.

4.08 Re-Qualification Of Suppliers: Suppliers which have been removed from the Sup-

plier Database may be given the opportunity to reapply for registration if they can demon-

strate that the reasons for removal have been corrected.

Supplier profile/registration form
http://../forms/logisticsformsprocurement/supplierprofileregistrationform.dochttp://../forms/logisticsformsprocurement/supplierprofileregistrationform.dochttp://../forms/logisticsformsprocurement/supplierprofileregistrationform.doc


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SECTION 5

5.0 REQUESTS FOR QUOTATION

5.01 Types of Solicitations: The Federation uses two standard documents in its competi-

tive price solicitation process. These are the Request for Quotation (RFQ) and the Request

for Proposal (RFP). A public tender generated by advertising through publication may be

used when there is no suitable list of suppliers and the desired delivery date provides suffi-

cient time to conduct a public tender, but is not considered a Federation standard. The stan-

dard procurement documents described in the Annex to Section 10 shall include the mini-

mum required terms and conditions which apply to any and every procurement. However,

should a requirement be of a specialised nature, additional conditions may be added to the

standard document at the discretion of the Procurement Officer.

a. Request for Quotation (RFQ): The RFQshould be used as the standarddocument for the procurement of goods of standard or clearly definable specifications. The

final contractual document in the RFQ process is the Purchase Order.

b. Request for Proposal (RFP): The RFP should be used as the standard docu-ment for procurement of goods and services where the technical specifications cannot be pre-

cisely determined, or are of a complicated or specialised technical nature which requires sig-

nificant input from the supplier. The final contractual document may be either a Purchase

Order or a formal contract.

5.02 Basic Requirements: Except as otherwise provided herein, contracts for the purchase

of goods or services totalling more than CHF 1,000 shall be let after competitive bidding inresponse to the requests (RFQs or RFPs) issued to a short list of at least three known suppli-

ers. In all cases, a procurement (case) file will be generated and a comparative analysis of all

documentation relative thereto shall be kept on record by the Purchasing Officer. The term

RFQ is used herein in a generic sense and represents both RFQs and RFPs unless specificallyindicated otherwise.

5.03 Selection of Suppliers: The selection of suppliers to receive solicitations should be

made in a way which ensures the integrity of the process and the confidence of all users, sup-pliers and other interested parties. The selection process should rely primarily on the profes-

sional judgement of the Purchasing Officer, but also on an element of randomness to ensure

that, to the extent possible, all registered suppliers are afforded a possibility to compete.

a. The process of selecting invitees from the Supplier Database should be based

on the following principles:

(1) The name of the last successful supplier(s) for the same products orservices and their two closest competitors should be included.

(2) For field generated requisitions, known suppliers in the geographic vi-

cinity should be included. This geographic area is normally limited to the Centre or Delega-tions operational area, and the neighbouring countries.


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(3) For all requisitions, the Purchasing Officers should add additional sup-pliers to the list of invitees to provide new suppliers the opportunity to compete, to ensure

better geographical distribution and to include reliable suppliers known to the officer.

b. With the exception of proprietary items for which the manufacturer is the solesupplier, a minimum of three known suppliers will be invited to quote on all procurements

over CHF 1,000. In any event, the particular nature of a commodity or service and the Pur-

chasing Officer's professional expertise and judgement should be used in determining the op-timum number of suppliers for each solicitation.

5.04 Preparing Requests for Quotations:

a. Reference to Original PR: RFQs should always refer to the original PurchaseRequest reference numberas the PR establishes the requirement, the authorisation and the

funding. The original copy of the PR shall be kept in the case file.

b. Grouping of Similar Items. Similar items should always be grouped, althoughSuppliers will not necessarily be required to bid on all items.

c. Specifications: The specifications of the goods or services to be ordered will

be described in as full a detail as possible, mindful of the requirement that they should not fa-vour one supplier over another. The exact quantity of each line item should be specified, as

should any quality standards.

d. Samples: When samples of a commodity are required, the RFQ should statetheir number, size or other clear description and a description of the tests which will be ap-

plied. It should be clearly stated that samples will be free and non-returnable by the Federa-

tion.

e. Changes in Quantities. Where the exact quantity required is not known in ad-vance, a definite quantity may be indicated on a aolicitation, with a provision that the Federa-

tion reserves the right to increase or decrease the indicated quantity by a stated percentage.

Such a provision should not normally be employed for variations in excess of 25% of the in-dicated quantity.

f. Indefinite Quantities. Where a definite quantity cannot be determined for a

requirement in advance, an estimated quantity should be stated on the solicitation, with a pro-vision that the Federation does not guarantee that the estimated quantity will be required, al-

though probable minimum and maximum figures may be indicated. Such an RFQ should

specify a definite termination date for any orders against the resulting contract. Such termi-

nation date should not be longer than one year from the date of the contract or PO, but maybe shorter based upon pricing trends, e.g., computer prices fall quickly when new models are

introduced. Two examples of clauses suitable for inclusion in indefinite quantity invitations

are shown hereunder.

(1) The intent of this request for quotation is to secure unit prices on the

above-mentioned articles during the period (date) to (date), inclusive; and, subject to satisfac-

tory service, during this period the requirements of (ordering office) will be purchased from

the successful bidder. The quantity of material to be so purchased is not guaranteed, but it isprobable that between (number of units) and (number of units) will be required.

(2) The above-mentioned quantities are an estimate of probable require-

ments during the period (date) to (date), inclusive, the requirements of (ordering office) dur-


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ing said period, subject to satisfactory service, will be purchased from the successful bidder,and will be not less than (number of units) nor more than (number of units) in total amount.

g. The Terms of Delivery: Terms of delivery are essential to define the respon-

sibilities simply and clearly, so as to minimise the possibility of misunderstanding and subse-quent disputes and to ensure the delivery needs of the requester are met. In many cases, the

trade terms of the International Chamber of Commerce, often referred to as 2000 Incoterms

(see Annex B) may suffice. As these terms are not universally understood, they should beclearly defined when used. The Purchasing Officer preparing an RFQ should select the Inco-term which he/she considers the most advantageous for the Federation. In cases where there

is doubt or the Purchasing Officer desires to retain an option to purchase the transportation

separately from goods, the RFQ may ask for quotes on separate terms of delivery, as applica-

ble.

h. The Time and Place of Delivery: The RFQ must furnish the prospective bid-

ders specific information relative to the required delivery date except in the case of indefinite

quantity requests. Suppliers may be invited to quote their best possible alternative deliveryoffers including schedules of partial shipments if such would be acceptable. Where the ur-

gent need of a commodity overshadows other considerations, the possibility of early deliverymay be an important factor in the evaluation of the offer. The place of delivery should be

stated in all RFQs in the level of detail required based upon the terms of delivery. Themethod of delivery, where applicable, should also be stated.

i. Special Requirements: If not fully explained in the specifications, any special

requirements that are an essential part of the procurement shall be included. These may in-

clude such things as spare parts, user manuals, packing and marking, foreign language, avail-

ability of service support, warranties, requirement for samples, etc. As a general rule, if it is

not specified in the RFQ, it cannot be included in the contract or Purchase Order unless it is

included in the Suppliers proposal.

j. Provisions for Payment: The standard payment terms for Federation pur-

chases are within 30 days after receipt of goods and documents in apparent good order. Al-

though this is the standard, it is recognised that there will be exceptions. Examples would be

substantial discounts for early payment, partial payments for phased deliveries and partial

prepayments when the supplier must purchase materials to complete the task, e.g., construc-

tion. The standard provisions for payment should be offered, with the provision that alternate

payment terms will be considered.

k. Alternatives Clause: As it will not always be possible to get the exact specifi-

cations, delivery terms, etc., which are desired, the RFQ should include the clause that Al-

ternatives to the requested specifications may be considered.

l. Insurance for Transportation of Goods: The Federation carries a global trans-

port insurance policy which covers the movement of its goods world-wide. Unless specific

reasons exist to place the burden of risk upon the supplier, the RFQ will state Insurance will

be effected by the buyer. When suppliers are required to provide insurance, the statement

should state Insurance will be effected by the seller and reimbursed at cost. The supplier is

required to provide the buyer both a certificate of insurance and the invoice for the insuranceprovided.


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m. Inspection Requirements: In certain cases it may be prudent to require inspec-tion of a commodity prior to acceptance of a bid or a proposal, e.g., bulk foods from a new

supplier. A clause to that effect should be included in the RFQ citing specifically which

party will be responsible for expenses incurred in connection with such inspection.

n. Terms of Response: Each RFQ shall include the terms for response, to include

the method (facsimile, sealed envelope), the delivery details (fax number, address for deliv-

ery), the cut off time for acceptance and the period of validity of the offer.

(1) Delivery of Response: Under normal conditions, any bid submission

for purchases over CHF 100,000 for procurements made by the Secretariat, and over CHF

20,000 for Delegation procurements should be received in sealed envelopes. The envelopes

containingsuch bids or proposals will indicate the bid or proposal reference number and thebid closing date and time. When RFQs stipulate the requirement for sealed bids, they should

state clearly that offers or proposals received via facsimile will be rejected. Sealed bids are to

be opened simultaneously by a committee including the Purchasing Officer and at least one

other person who has been approved by the Head of Service, RLC or Delegation, as appro-priate. Such individuals shall not be related to either the Purchasing Officer or to the pro-

curement process. A record will be kept of bid openings by committee, such record to besigned by each of the participants and maintained in the procurement case file. Bids ofCHF

100,000 or less may be received by personal delivery or by facsimile, with receipts to be con-trolled and logged by the Purchasing Officer or assistant.

(2) Time: In determining the time of response, the Purchasing Officer

should seek to meet the desired delivery date specified in the original PR, but considerationshould also be given to the complexity of the specifications and the ability of suppliers to

meet the delivery date. In emergency situations, offers greater than CHF 100,000 may be

accepted by facsimile to expedite the process, with such decisions documented and main-

tained in the case file..

(3) Period of Validity: The period of validity establishes the length of time which

the supplier will accept a contract/PO against the offer submitted. It should be sufficient to

allow the Purchasing Officer to consider all details and to reach a decision on contract award,but should not be so lengthy that prices or availability may be affected by market fluctua-

tions, e.g., food prices during famines.

5.04 Amending the RFQ: If it becomes desirable to modify the RFQ in any way after ithas been circulated to prospective bidders or invitees to submit proposals, an identical written

amendment shall be sent to all parties who received the original solicitation. The amendment

should refer to the original reference number and solicitation, and should set forth in a clear

and complete manner the exact changes desired.

ANNEXES

Request for quotation (sample)

Annex A. Request for ProposalAnnex B. INCOTERMS
http://../forms/logisticsformsprocurement/requestforquotation.dochttp://../forms/logisticsformsprocurement/requestforquotation.doc


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ANNEX A to SECTION 5

Request for Proposal

(date)

(Name and Address of the Supplier)

Dear Sirs/Mesdames,

SUBJECT: Request for Proposal for the Provision of:

1. The International Federation of Red Cross and Red Crescent Societies hereby solicits

your proposal for the provision of as perthe attached (specifications/scope of work (SOW)).

2. The Request For Proposal (RFP) consists of this letter of transmittal and the following

Enclosures:

Enclosure 1 - Specifications/SOW.

Enclosure 2 - Terms and conditions for general contracts.

3. Please note that this document is an RFP and not an invitation to bid. You should also

note that the terms set forth in this RFP, the Specifications/SOW, (Encl. A, and the Terms

and Conditions (Encl. 2) will form a part of any contract should the Federation accept your

proposal.

4. It is anticipated that any contract or contracts entered into as a result of this RFP will

be for period of .

5. This RFP does not commit the Federation to award a contract or to pay any costs in-

curred in the preparation or submission of proposals, or costs incurred in making necessary

studies for the preparation thereof, or to procure or contract for services or supplies. The

Federation reserves the right to reject any or all proposals received in response to this RFPand to negotiate with any of the proposers or other firms in any manner deemed to be in the

best interest of the Federation. It also reserves the right to negotiate and award separate or

multiple contracts for the elements covered by this RFP in any combination it may deem ap-

propriate, in its sole discretion; modify or exclude any consideration, information or require-ment contained in this RFP, and to add new considerations, information or requirements at

any stage of the procurement process, including during negotiations with proposers.

6. Proposers must provide all requisite information and clearly and concisely respond toall points set out in this RFP. Any proposal which does not fully and comprehensively ad-

dress this RFP will be rejected. However, unnecessarily elaborate brochures and other pres-

entations beyond that sufficient to present a complete and effective proposal are not encour-

aged.

7. The normal terms of payment of the Federation are within 30 days of satisfactory de-

livery of goods or services and documents in apparent good order. Proposers must thereforeclearly specify in their Proposal the payment terms being offered if different from these.


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8 Proposals must be submitted no later than ________hours, (day) (month) (year), andmust include the following:

(a) The date of the proposal.

(b) Signature, name, title, telephone and facsimile number of the authorised repre-

sentative of the firm submitting the proposal including the firms mailing ad-

dress.

(c) Terms of payment, including prompt payment discounts, if any.

(d) All other information required in this RFP.

9. Any proposals received after the stated opening time and date will be rejected and

will be returned unopened to the sender.

10. Proposals must be enclosed in their entirety in a sealed envelope/package, the

outside of which must be addressed as follows:

Reference No: ___________ Closing Date / Time:

____________________

International Federation of Red Cross and Red Crescent SocietiesAttn: Procurement Service

P.O. Box 372Switzerland

11. Proposals will be reviewed and evaluated by the Federation in accordance with theprovisions of the Federation's Procurement Manual as well as the considerations, information

and requirements contained in this RFP. The evaluation procedure will consist of a formal,

substantive and financial assessment of the proposals received. Price is an important factor,however, it is not the only consideration in evaluating responses to an RFP.

12. Your proposal shall remain valid and open for acceptance for a period of at least sixty

(60) days from the closing date of , indicated above for receipt of proposals.Please indicate in your proposal that it will remain valid for this period.

13. Following submission of the proposals and final evaluation, the Federation will have

the right to retain unsuccessful proposals. It is the proposer's responsibility to identify any in-formation of a confidential or proprietary nature contained in its proposal, so that it may be

handled accordingly.

14. For further or additional queries please contact ___________________, (office),(phone), (fax).

With regards,

(title)


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29/52


ANNEX B to SECTION 5

INCOTERMS

INCOTERMS have been developed and defined by the International Chamber of Commerce

and are accepted and used throughout the world to define the rights and obligations of buyersand sellers in international transactions. Unfortunately, the understanding of the terms in

many areas that are subject to emergency relief actions is not uniform, and Procurement Offi-

cers are cautioned against excessive reliance on these terms in contracts, and advised that

they should be explained in plain text to prevent misunderstandings and possible claims.

Further discussion of the INCOTERMS can be found on page 916 and in the tables on pages

927 and 928 of theHandbook for Delegates.

ExW Ex Works: "Ex Works" means that the seller's only responsibility is to make the

goods available at his premises (i.e., works or factory). In particular he is not responsible for

loading the goods in the vehicle provided by the buyer, unless otherwise agreed. The buyerbears the full cost and risk involved in bringing the goods from there to the desired destina-tion. This term represents the minimum obligation for the seller.

FCA Free Carrier...(Named Point): "Carrier" refers to the name of a transporter whether by

road, rail, air, sea or a combination of modes. The seller fulfils his obligations when he de-livers the goods into the custody of the carrier at the named point. The risk of loss or damage

to the goods is transferred from seller to buyer at that time. This term should be used instead

of FOR and FOT, which are sometimes used to mean "Free on Rail" and "Free on Truck".

FAS Free Alongside Ship: Under this term the seller's obligations are fulfilled when the

goods have been placed alongside the ship on the quay or in lighters. This means that thebuyer has to bear all costs and risks of loss of or damage to the goods from that moment.FAS requires the buyer to clear the goods for export.

FOB Free On Board: The goods are placed on board a ship by the seller at a port of ship-

ment named in the sales contract. The risk of loss of or damage to the goods is transferredfrom the seller to the buyer when the goods pass the ship's rail at the port of loading. Under

FOB, the seller is required to clear the goods for export.

CFR Cost and Freight: Under CFR terms, the seller must pay the costs and freight neces-sary to bring the goods to the named destination, but the risk of loss of or damage to the

goods, as well as of any cost increases, is transferred from the seller to the buyer when the

goods pass the ship's rail in the port of shipment. The older transporters will frequently use

C+F instead of CFR.

CPT Carriage Paid To: For CPT shipments, the seller pays the freight for the carriage of

the goods to the named destination. However, the risk of loss of or damage to the goods, as

well as of any cost increases, is transferred from the seller to the buyer when the goods havebeen delivered into the custody of the first carrier. It can be used for all modes of transport

except pipeline. When the seller has to furnish a bill of lading, waybill or carrier's receipt, he

duly fulfils this obligation by presenting such a document issued by the person with whom he

has contracted for carriage to the named destination.


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DAF Delivered at Frontier: DAF means that the seller's obligations (which include insur-ance) are fulfilled when the goods have arrived at the frontier - but before "the customs bor-

der" of the country named in the sales contract. The term is primarily intended to be used

when goods are to be carried by rail or road but it may be used irrespective of the mode of

transport.

DES Delivered ex Ship: "Delivered ex Ship" means that the seller shall make the goods

available to the buyer on board the ship at the destination named in the contract. The sellermust bear the full cost and risk of delivering the goods to the designated port, but the buyermust arrange for the discharge and onward movement..

DEQ Delivered ex Quay: DEQ is an extension of DES in that the seller makes the goods

available to the buyer on the quay (wharf) at the designated port. The seller has to bear thefull cost and risk involved in bringing the goods there. It is highly recommended to add

comments relative to duty, namely "DEQ (duty paid)" or "DEQ (duties on buyer's account)",

to avoid uncertainty as to who is to be responsible for the liability to clear the goods for im-

port.

CIF Cost, Insurance and Freight: This term is basically the same as CFR but with the ad-dition that the seller has to procure marine insurance against the risk of loss of or damage to

the goods during the carriage. The seller contracts with the insurer and pays the insurancepremium.

CIP Carriage and Insurance Paid To: CIP is essentially the same as CPT, with the addition

that the seller has to procure transport insurance against the risk of loss of or damage to goodsduring carriage.

DDU Delivered Duty Unpaid: DDU means that the goods are to be delivered at the agreed

destination, all charges except duties paid by the seller..

DDP Delivered Duty Paid: The term DDP means delivered at the agreed destination, all

charges paid. It denotes the seller's maximum obligation and presents the least risk to the

buyer. The terms DDP and DDU may be used irrespective of the mode of transport.

NOTES:

1. Within the Federation, goods are usually shipped CPT (Carriage Paid To) except forbulk foods, which are shipped DEQ (Delivered ex Quay) or DDU (Delivered Duty Unpaid).

Because of the high risk of loss with bulk foods, it is usually preferable to pay the higher cost

and transfer the risk to the supplier. In other cases, insurance should normally not be pur-

chased as coverage is included in the Federations global transport insurance policy.

2. Remember that trade terms which extend the seller's obligations to delivery to the

buyer's destination not only mean additional costs for the seller but also additional risks. The

risk of loss of or damage to the goods while in transit is ordinarily covered by cargo insur-ance. Risks of cost increases and delays of various types may be much more serious. Un-

foreseen events such as the imposition of duties, other governmental interventions, labour

disturbances, war or warlike operations, as well as the demand for bribes, may create a

greater burden for the party carrying the risk.

3. The risks incident to shipment may be modified and divided between the parties underterms other than the trade terms themselves but this should be clearly defined in the procure-

ment documents (RFQ and PO or contract). General conditions of trade practically always


31/52


contain so-called force majeure exceptions, or relief clauses, which are designed to alleviatethe seller's burden to deliver in spite of any circumstances that may delay delivery or make it

more difficult. Such clauses may provide some protection, but it is seldom complete.


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SECTION 6

6.0 OPENING OF BIDS OR PROPOSALS

6.01 General: Unless specific reasons dictate otherwise, the opening of bids in the Federa-

tion is accomplished internally and there will be no public opening. When bids are to be pub-licly opened, such information will be included in the RFQ to include the date, time and loca-

tion of opening.

6.02 Procedures for Receiving Bids: All bids and proposals are to be received by the re-

questing Purchasing Officer or Assistant and are to be time/date stamped upon receipt. In the

case of bids submitted by facsimile, the machine time would meet this requirement if accu-

rate. Fax machines should be checked regularly to ensure that the machine generated dateand time are accurate. Sealed bids will be initialled by the receiving officer and placed in a

locked container such as a cabinet or safe until the designated time for opening. Responsibil-

ity for determining as to whether public opening of proposals is required rests with the Head

of the Service, RLC or Delegation, as appropriate, based on justification provided by the Pur-chasing Officer concerned.

a. Any bids or proposals inadvertently opened before the due date are to be

brought to the attention of the Head of the Service, RLC or Delegation for further action. Inthe event that the circumstances indicate the bids should be retained for evaluation, then the

Purchasing Officer responsible will be replaced on the bid opening committee and the bid

evaluation will be accomplished by another officer.

b, Unsolicited offers (not on the invitee list) are to be brought to the attention of

the Head of the Service, RLC or Delegation (as appropriate) for review. As a general rule,

unsolicited offers will not be considered. However, if an unsolicited offer indicates a signifi-

cant disparity in prices or suggests that the solicitation process was not adequately handled,the RFQ will be closed without action and reinitiated by a different Purchasing Officer.

c. Any alterations to bid and RFP/RFQ documents is expressly forbidden. Sealed

bids and proposals may only be modified prior to the opening in writing and sealed in an en-velope marked to cross refer to the original submission. Bids submitted by facsimile may be

amended in the same manner, as long as the amendment is received prior to the announced

bid closing time.

d. Bids received after the announced bid closing time will be date/time stampedand placed in the case file, but will not be considered in the bid evaluation process.

6.03 Contacts With Suppliers: During the bidding process, it is permissible to clarifypoints in the RFQ. However, any questions related to the bid which are not addressed on the

RFQ but are material to the process and may alter bid submission will be accepted without

answer, and a written summary of the question and the answer thereto will be provided to all

Suppliers to whom the RFQ was submitted.

a. No information of a material nature, such as the number of bids or proposals

received, the names of the bidders or proposers, etc., may be divulged to any individual or the

general public prior to the designated closing time of the bidding process, or prior to the timeof bid or proposal opening for sealed bids. .


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b. Costing data submitted in the suppliers offers will be treated as confidentialinformation and may not be released outside of the Federation, or to those who do not need

access to such information for the proper performance of their duties.

6.04 Bidding Irregularities: Any unusual or questionable circumstances surrounding the re-ceipt, opening or recording of the bids or the proposals will be reported to the Head of the

Service, RLC or Delegation, as appropriate.

SECTION 7

7.0 EVALUATION OF BIDS OR PROPOSALS AND CONTRACT AWARD

7.01 Introduction: Within the Federation, the quotations, bids or offers received from sup-

pliers in response to a solicitation are evaluated in a process referred to as Competitive Bid

Analysis, which is designed to ensure that the Federation receives the best product or service

for the price paid. Contracts shall normally be awarded to the lowest acceptable bidder, with

due consideration being given to the impact of the contract on programme interests. Wherethe interests of the Federation so require, all bids may be rejected. In the latter instance, the

Head of Service, RLC or Delegation, as appropriate, or the head of a procuring office duly

authorised shall record in writing the reasons for rejection of the bids and determine whether

to invite new competitive tenders or enter into a negotiated contract.

7.02 Basic Considerations:

a. The first consideration in the procurement process is to ensure that Federation

requirements are procured at the best price in accordance with its financial regulations and

rules. In the evaluation of bids or proposals, the overall value to the Federations programmeis the criterion for determining the lowest bid or proposal, and the specifications in the invita-tion or request for proposal should be formulated to permit such an evaluation. After the

opening of bids or proposals, if variables in the offerings can be attributed to discrepancies or

ambiguities in the solicitation, the solicitation should be reissued.

b. In determining the lowest acceptable bidder, the Purchasing Officershould

consider whether or not the supplierhas the capability in all respects to perform fully the con-

tract requirements, and the integrity and reliability which will ensure good faith performance.

Suppliers in financial difficulty may be required to demonstrate their capability to perform, orto post a performance bond. Suppliers with no visible supply of material on hand may be re-

quired to prove availability of a dependable source of supply prior to consideration of theiroffer. Likewise, a manufacturer may be required to submit proof of ability to manufacture or

produce the required material. Rejection of a bid or a proposal because of a suppliers per-ceived lack of responsibility must be approved by the Head of the Service, RLC or Delega-

tion conducting the procurement.

c. Absolute impartiality must be shown to all bidders or proposers receiving theRFQ or RFP. Any additional information concerning any solicitation should be available to

every solicited bidder or proposer.

7.03 Comparative Bid Analysis (CBA):

a. All formal bids and proposals will be tabulated on a CBA worksheet.


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The Purchasing Officer will indicate on the abstract sheet the awards made by consideringeach suppliers bid in turn, and checking off the low bid or proposal for each individual line

item. This having been done, each individual bid will be examined closely. Ifan item as of-

fered by the low bidder or proposer is found to meet all the requirements of the request for

proposal, that item by that bidder or proposer should be encircled on the CBA worksheet.

b. Following completion of the CBA, the Purchasing Officer shall provide a jus-

tification on the worksheet for each recommendation of award and forward the worksheetand procurement file to the appropriate approving officer for the procurement decision.

7.04 Adherence to Specifications: Only bids or proposals offering items with fun-

damental characteristics meeting or exceeding those in the solicitation shall be considered as

acceptable unless programme emergencies dictate otherwise. Superficial characteristicswhich do not affect the programme value of an item and which are not included in the solici-

tation shall not affect the acceptability of the bid if the Purchasing Officer is satisfied that the

superficiality is irrelevant. Before accepting a bid or proposal offering an article with speci-

fications exceeding, or inferior to, those in the RFQ, the Purchasing Officer shall verify withthe requisitioner that the item offered is acceptable.

7.05 Evaluation of Delivery Terms:

a. When the delivery date is an important factor in awarding a contract, it should

be so stated in the RFQ. Offers not meeting a required delivery schedule may be rejected. If

all bids or proposals are disqualified under this condition and if readvertising is not feasible,

it may be necessary to accept the best delivery terms. In this event, the Purchasing Officershall notify the requisitioner.

b. When an alternate delivery point is offered by the supplier, the cost of moving

the material to its ultimate destination shall be determined and added on the CBA worksheet

to offers made on that basis, for purposes of comparison with other offers. The impact on de-livery time to the requisitioner should also be considered in this case.

c. Where "delivered" bids are requested, and an "origin" bid is received or viceversa, the bid may be accepted or rejected depending on the circumstances. Usually a deliv-

ered price is the bidder's "origin" price plus transportation costs to destination. Where the de-

livered price under one offer is equal to the origin price plus transportation costs under an-

other, acceptance of the former would be desirable as it reduces bookkeeping and accountingcosts and may retain title to the shipment and risks of damage with the supplier. On the other

hand, acceptance of an offer on an origin basis, when the delivered price and origin price are

both known, may be justified if the separate contracting for transportation would reduce the

overall cost. The Purchasing Officer shall keep in mind that bookkeeping and accountingcosts as well as risks of damage would remain with the Federation in this case and these costs

and risks must be considered.

7.06 Evaluation When Grouping Items: When a bidder or proposer makes an "all or none"stipulation in his/her bid or proposal, the Purchasing Officer shall total the unit prices of the

lowest acceptable offers under each item so as to determine the cost on an item by item basis.

This total cost shall be compared with the total cost as represented by the all or none bid,

bearing in mind that such a proposal would (a) save on administrative expense by makingfewer contracts, (b) possibly eliminate inconsequential orders, and (c) provide interchange-

ability or uniformity of items, where related. The same logic would apply when the Purchas-ing Officer finds substantially little difference in the combining of separate line items among


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different suppliers, in which case acceptance of all items from one supplier may be justifiedeven though splitting the contract may be marginally cheaper.

7.07 Offers of Lesser Quantity: Offers to supply an item in less quantity than called for in

the RFQ, if otherwise in order, may be considered for acceptance; however, an award for lessthan the full amount of the item or a split award shall not be made to the bidder quoting on

the full amount unless (a) the RFQ provides for award in such manner or (b) the bidder

agrees in writing that he will accept such an award.

7.08 Payment Discounts: In evaluating early payment discounts offered, the Purchasing

Officer should give the rate of discount precedence over the time element provided that the

supporting Finance Office confirms that the time margin is sufficient to allow normal pay-

ment processes to take place.

7.09 Tie Bids or Proposals: Tie bids are two or more offers exactly alike in prices and

terms. Usually one factor in one of the offers will be more favourable, and however slight

such a factor may be it should be made the deciding factor between the offers, provided sucha procedure is rational. If a tie bid or proposal is actually encountered, the award should be

made by a random drawing of the names of the bidders or proposers concerned, such drawingto be accomplished by any mechanical means which will determine the successful bidder by

pure chance. The drawing should be made by two or more employees of the Federation,other than the Purchasing Officer, who will provide the Purchasing Officer a written record

of the result for the case file. The items so awarded should be encircled on the CBA work-

sheet, and an explanation should be shown therein.

7.10 Authorised Costs Exceeded: Whenever the cost of a contemplated purchase exceeds

the estimated cost, or some other maximum amount fixed by the Requisitioning Officer, the

latter should be informed and further instructions requested. The award should be withheld

until a written authorisation amending the requisition has been received.

7.11 Errors and Omissions:

a. Errors in Price. The Federation is not responsible for errors in price made by abidder. However, if the Purchasing Officer has reason to believe that the offer of a bidder

contains an error in price, he should, before completing the evaluation, request the bidder

orally or by telegram to verify the prices in question. If the bidder replies that the prices are

correct as quoted, the evaluation may then be completed without further question. A note ofthe fact that a query was made, together with the reply, should appear in the file.

b. Failure of Bidder or Proposer to Furnish Data: Failure to furnish certain data

with a bid or proposal, i.e., data which do not affect in any way price, quality, etc., even whenrequired by the solicitation, will not require immediate rejection of the bid unless the bid so

states. It is the responsibility of the Purchasing Officer to request the missing data from the

bidders. If the request is not fulfilled, the bid may be rejected.

c. Errors in Affixing Signature: All bids and proposals must be signed, and the

typed or printed name of the individual signing should also appear. A doubtful signature, a

missing signature or a signature evidently executed by someone other than the typed name,

should be questioned. If there is no indication that signing was intended, an unsigned bid orproposal should be rejected.

d. Corrections or Alterations: Corrections or alterations in a bid or proposal must

be initialled by the individual who signs the bid or proposal. If this stipulation has not been


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complied with, the bidder or proposer shall be requested to confirm each change in writing.Upon receipt of the confirmation, it shall be attached to and made a part of the offer. No cor-

rection or other alteration in the prices or terms of a bid or a proposal shall be permitted after

the time of closing.

7.12 Release of a Bidder: The authority to permit modification or withdrawal of a bid or

proposal after the bid closing because of a perceived mistake therein rests primarily with the

Head of Service or RLC procuring, or the Head of Delegation, as appropriate. However,where the error is clearly clerical in nature, such as a transposition in figures, an error in theplacing of a decimal point or in the unit of measure, then the request for modification or

withdrawal may be acted upon by the Purchasing Officer, but will be documented in the pro-

curement file.

7.13 Recommendation of Award: Upon completion of the CBA and consideration of all

the factors involved, the Purchasing Officer is required to recommend the final action with

respect to a purchase, but has no authority to make the actual award unless such authority has

been properly delegated. Th