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Procurement manual for the procurement of goods and services

Document reference number: 093


Document Authorization Stakeholder Name Position Signature Date approved

Author Document Owner Document Authorizer Document Stakeholders Procurement Manager Procurement Manager Unit Unit 10.2002 10.2002

Version number: 1.00 Authorization date: August 2002

INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES

PROCUREMENT MANUAL
FOR THE PROCUREMENT OF GOODS AND SERVICES

TABLE OF CONTENTS
INTRODUCTION 1.00 PROCUREMENT IN THE SECRETARIAT 1.01 1.02 1.03 1.04 1.05 Definitions Management Authorisation Levels Procurement System Overview Administration

File cover 2.00 AUTHORISATIONS IN THE PROCUREMENT PROCESS 2.01 2.02 2.03 2.04 2.05 Annex A Annex B 3.00 General Authorised Persons Delegation of Procurement Authority Authorisation Documents Procurements with Exceptional Requirements Levels of Authorisation (Chart) Delegation of Authority (Sample)

THE PROCUREMENT PROCESS 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 Responsibility Requisitioning Supplies and Services Procurement Purchase Orders Blanket Purchase Orders Receiving Supplies and Equipment Receiving Services Discrepancies in Delivery Returning Material to Supplier Certification of Invoices Requisition (Form) Goods received note (Form)

4.00

REGISTRATION OF PROSPECTIVE SUPPLIERS/CONTRACTORS 4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 Supplier Database Registration Evaluation of Supplier Applications Supplier Information Files Supplier Database Maintenance Removal from Supplier Database Co-ordination with the Legal Affairs Unit Re-Qualification of Suppliers procurement manual, p. 2 of 51

Link 5.00

Supplier profile/registration form REQUESTS FOR QUOTATION 5.01 5.02 5.03 5.04 5.05 Types of Solicitation Basic Requirements Selection of Suppliers Preparing Requests for Quotation Amending the RFQ Request for quotation (sample) Request for Proposal (Sample) Incoterms

Annex B Annex C 6.00

OPENING OF BIDS OR PROPOSALS 6.01 6.02 6.03 6.04 General Procedures for Receiving Bids Contacts with Suppliers Bidding Irregularities

7 .00 EVALUATION OF BIDS AND CONTRACT AWARD 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 7.16 General Basic Considerations Comparative Bid Analysis (CBA) Adherence to Specifications Evaluation of Delivery Terms Evaluation When Grouping Items Offers of Lesser Quantity Payment Discounts Tie Bids or Proposals Authorised Costs Exceeded Errors and Omissions Release of a Bidder Recommendation of Award Advance Notice of Award Requests for Information by Suppliers Regrets Notification

Comparative bid analysis 8.00 EXCEPTIONS TO CALLING FOR BIDS OR PROPOSALS 8.01 8.02 8.03 9.00 Approved Exceptions Telephonic Solicitations Use of Exceptions

FEDERATION COMMITTEE ON CONTRACTS 9.01 9.02 General Meetings of the CoC procurement manual, p. 3 of 51

9.03 9.04 9.05 9.06 9.07 9.08

Composition of the CoC Duties of the CoC Members The Procurement Service's Role Presentations to the CoC Ex post facto Presentations Local Committees on Contracts

10.00 FEDERATION CONTRACTS AND PURCHASE ORDERS 10.01 10.02 10.03 10.04 10.05 General Contract Documents Purchase Order Short Form Purchase Order Written Agreement Purchase order (Sample) Local purchase order (Sample) Terms and conditions 11.00 DISPOSAL BY SALE OF PROPERTY 11.01 11.02 11.03 11.04 11.05 Annex A General Methods of Sale Conduct of the Sale Actions Subsequent to Sale Sales to Delegates and Local Staff 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 provisions of the Federations Procedures for Authorisation of Financial Commitments and Procurement and the Handbook 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 procurement process of the Federation. Therefore, effective immediately, the above mentioned Procedures will exclude the part on Procurement and be renamed Procedures for Authorisation 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 organisation 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 Support 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 1.01

PROCUREMENT IN THE SECRETARIAT Definitions: For purposes of these guidelines the following definitions apply:

a. Procurement is understood to mean the purchase of goods, services, and capital 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 commits 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. b. The Secretariat is understood to mean not only the Secretariat headquarters in Geneva, 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 agreement or as a formatted purchase order. 1.02 Management:

a. The Procurement Service in the Administration Department is be responsible for 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, for monitoring compliance. Most of the procurement and contracting for the Secretariat in Geneva 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 procedures of the Secretariat, pending review. The Logistics Service will, in the meantime, coordinate closely with the Procurement Service to ensure that such standards and procedures take adequate consideration of the diverse conditions of field programmes and operations. In many 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 Offices and Representatives in the field are authorised to make direct purchases of goods or services 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 established in this document are followed. 1.03 Authorisation Levels: Authorisation levels for authorising expenditures, are established in the Federation's Procedures for Authorisation of Financial Commitments and Procurement and in the Handbook 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 completed and signed. Regardless of where the procurement takes place, any purchase of goods or services exceeding CHF 1,000 must be initiated by a PR from the requesting office. To ensure 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 procurement 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 requested. (See Section 5.) c. Competitive Bid Analysis (CBA): The quotations, bids or offers, received from 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 selected 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 constitutes 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 obligations 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 conducting the purchasing to monitor the delivery of goods or services, to ensure contract compliance 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 services indicates difficulty in quantity or quality control, the responsible individual should consider 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 purchasing officer will certify the correctness of the information on the supplier's invoice and forward 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

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SECTION 2

2.0

AUTHORISATIONS IN THE PROCUREMENT PROCESS

2.01 Definition: Persons authorised to conduct procurement, to include contracting services, are defined in this Manual and in the Handbook for Delegates. Procurement in this context 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 expenditure 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 Service is responsible for procurement standards and procedures, as well as for oversight of the conduct 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 standards and procedures published herein. Regional Logistics Centres, when established, are considered as technical extensions of the Logistics Service and are authorised to perform procurement 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 account and 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 contractual signing authority may be required from time to time, or for specific periods or purposes. 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 capacity 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 instructions have been complied with. (2) (3) The commitment has been approved at the appropriate levels. 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 purchases of services, supplies, equipment or other requirements on behalf of the Secretariat: (1) (2) The Under Secretary General for Finance and Administration. The Director of the Administration Department.

(3) The Head of Procurement Service, who in turn will determine the authorised 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 Service. 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 instructions 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 officials retain the responsibility for compliance with all rules, regulations, procedures and instructions. 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 individual basis and requires all individuals with signature authority to exercise their duties and responsibilities with the utmost care, competency, efficiency, fairness and integrity. Such individuals 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 complete description of the goods or services being ordered as well as the budget coding, limitations 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. All PRs 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 Procurement Service, Logistics Service or the Regional Logistics Centre signs the PO on the basis of the authorisation provided in the PR. No PO will be issued until the proper level of authorisation 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. Contracts 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 following 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 information 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 disposed 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 specifications 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 motorcycles, cars, trucks, etc., must be authorised by the Head of Logistics Service, who will review for compliance with the existing list of approved vehicles.

ANNEXES A. B. Levels of Authorisation (Chart) 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 Federations Procedures for Authorisation of Financial Commitments and Procurement apply to the authorisation for purchases as well as contracting of services. For service contracts generating recurring costs (e.g., rentals, maintenance, etc.) the CHF value corresponds to the annual cost. Expenses Funded by Statutory Contributions Budgeted Support staff Officer Head of Service or Un it, or Deputy Director Department Director Undersecretary General Secretary General up to CHF up to CHF up to CHF up to CHF up to CHF above CHF 1'000 5'000 20,000 100'000 400'000 400'000 up to CHF up to CHF1* up to CHF* above CHF Not Budgeted 1,000 20'000 100'000 100'000

Expenses Funded by Operations Support Within Approved Budget Support staff Desk Officer, Head of Del, or Deputy Dir of Regional Dept Head of DROC Support Service Dir of Regional Dept or Disaster Response Spt USG, DROC Secretary General
123

Outside Approved Budget 1'000 50,000 up to CHF 10,000

up to CHF up to CHF

up to CHF up to CHF up to CHF above CHF

100,000 up to CHF2** 200,000 up to CHF** 400'000 up to CHF3*** 400'000 above CHF

20,000 50,000 100'000 100'000

Expenses Financed by Voluntary Contributions Budgeted Support staff Officer Head of Service or Unit, or Deputy Director up to CHF up to CHF up to CHF 1'000 5'000 20,000 up to CHF Not Budgeted 1,000

1 1*Jointly with Director of Finance. 2 2**Jointly with Director of Finance and USG DROC. 3 3***Jointly with Secretary General.

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Department Director Undersecretary General Secretary General


45

up to CHF up to CHF above CHF

100'000 up to CHF* 400'000 up to CHF* 400'000 above CHF

20'000 100'000 100'000

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 approved budget and the procurement regulations of the Federation. Ms. / Mr. _____________ has also been delegated the authority to sign properly executed purchase 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)

4 4Applies only to expenses for which funding has been confirmed as available. 5 5Jointly with Director of Finance.

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Head of Procurement Service Date:

(Position) 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 respective Terms of Reference, responsibility for procurement for field programmes rests with the Head of Logistics Service and respective heads of Regional Logistics Centres, Delegations 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 with knowledge of the programme requirements and budget limitations, but must be signed by an individual who has the appropriate level of expenditure authority. (See Section 2.) They are to 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 of supply 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 description 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 as potential suppliers. (2) Desired Delivery Date: As the arrival of many goods and services are essential to the success of operational programmes, it is essential that the individual completing 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 offices 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 account to cover the purchase. Unless other guidance requires pre-approval by the supporting Finance 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 equipment as indicated on the PR. Upon receipt of a PR, the Purchasing Officer will assign a procurement file reference number and establish a procurement case file. All purchases will be conducted in a competitive, fair and unbiased manner. When preparing the Request for Quotation (RFQ), great care must be taken to ensure that the specifications for the equipment or procurement manual, p. 15 of 51

services are written in an objective manner so as not to favour a product or service of a particular contractor. 3.04 Purchase Orders: The Purchase Order (PO) is a pre-numbered document which constitutes a formal contract with the supplier. All information relative to the procurement must be 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 responsible for ensuring the receipt and physical inspection for both quantity and quality. They may use technical experts and Inspection or Surveillance Companies when considered necessary to safeguard 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 stipulate 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 and inspect on the delivery thereof. The Contracting Officer, Ordering Officer or designated Inspection Company will verify and certify the delivery of services ordered prior to the payment 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 discrepancies with the supplier. For this reason, the proper completion of receipt documentation is essential. 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 discrepancies which cannot be solved through the normal presentation of documents. Recipients of goods or services will advise the Purchasing Officer immediately when circumstances indicate 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 being returned, 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 to issue 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 to be 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 original copy of the invoice with the appropriate funding codes, sign and date the invoice approving it for payment, and forward the invoice along with a copy of the PR, the PO and the Goods Received Note to the appropriate Finance Office for reconciliation and payment. 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 applicable 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 unfairly penalising the supplier during resolution of the dispute.

Requisition (Form) Goods received note (Form)

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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 manually using the Supplier Registration Forms, a sample of which is at Annex A. It is the intention 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 providing support on a global basis. Suppliers will be retrievable from the database under the commodities and services they provide. There is no requirement for Delegations and Field Offices 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 supplier must successfully complete the registration process. (3) tions. b. Final approval for Supplier Database entry is the responsibility of the Head of the Procurement Service for Geneva procurements, and for the Head of the RLC concerned for regional rosters. Suppliers applying for registration will be notified, in writing, of the results of their applications. Responses to unsuccessful applicants should include brief descriptions of the reasons for nonacceptance of their applications. c. National Societies of the Federation may, at the discretion of the Head of Procurement Service, provide names of possible applicants for the Supplier Database. They may also be provided with a list of Suppliers from their country which are already registered. Detailed information on other countries' data will not be provided, although National Societies may be provided a list of available suppliers for a particular commodity or service. 4.03 Evaluation of Supplier Applications: The Head of Procurement Service shall establish registration material to be issued to suppliers which request to be included in the Supplier Database. Recommendation by one of the Regional Logistics Centres or Delega-

a. The registration materials shall include a questionnaire which shall elicit data from the prospective supplier on its correct name, address, country of origin, business experience, references, details about the services or commodities offered, current financial statements, as well as names, addresses and telephone/fax numbers and any other relevant means procurement manual, p. 18 of 51

of contact with designated persons of authority within the supplier's organisation. No application 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 procurement 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 evaluating 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) . (2) (3) (4) tion. 4 Supplier Information Files: Applications, supporting documentation and the evaluation 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 service, and relevant trade registers, directories and trade journals. The maintenance of the reference library will be the responsibility of the Procurement Service, in co-ordination with the Information Resource Centre and the various technical departments. 4.05 Supplier Database Maintenance: To ensure the integrity and manageability of the Supplier Database, the Database must be maintained regularly. Suppliers who have not received 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 written follow-up when purging the database. (a) To ensure adequate maintenance of the Database on an ongoing basis, the Procurement Service shall monitor the performance of all Suppliers who are awarded contracts 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 Procurement Service. The Procurement Service may use such information and any other relevant information independently obtained to remove non- or poor-performing suppliers from the Database. (b) Factors to be considered in evaluating supplier performance include: (1) (2) The quality of the product or service provided. Compliance with contractual terms and conditions. procurement manual, p. 19 of 51 No relevance of the commodity or service offered Failure to demonstrate financial stability. Inadequate supplier business experience or capacity. Failure to demonstrate technical competence or professional certifica-

(3) (4) (5) (6) claims.

Delivery schedule compliance. Efficiency in response to requests by for information. Adherence to warranty provisions Speed and co-operation in resolving problems and/or settlement of

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. This decision 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 Contracts for review. A supplier may be removed from the database for the following reasons: a. b. c. d. 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 commission of any offence indicating a lack of business integrity or business honesty. g. Filing a formal claim or lawsuit against the Federation. Poor performance based upon contract compliance. Submission of false information. Bankruptcy, or a decision of legal incompetence. Failure to respond to three successive solicitations without reasonable expla-

4.07 Co-ordination with the Legal Affairs Unit: The Legal Affairs Unit should always be consulted before taking action to remove a supplier from the Supplier Database for reasons related to malfeasance. Additionally, the Legal Affairs Unit will 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 Supplier Database may be given the opportunity to reapply for registration if they can demonstrate that the reasons for removal have been corrected.

Supplier profile/registration form

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SECTION 5

5.0

REQUESTS FOR QUOTATION

5.01 Types of Solicitations: The Federation uses two standard documents in its competitive 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 sufficient time to conduct a public tender, but is not considered a Federation standard. The standard procurement documents described in the Annex to Section 10 shall include the minimum 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 RFQ should be used as the standard document 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 document for procurement of goods and services where the technical specifications cannot be precisely determined, or are of a complicated or specialised technical nature which requires significant 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 in response to the requests (RFQs or RFPs) issued to a short list of at least three known suppliers. 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 specifically indicated 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, suppliers and other interested parties. The selection process should rely primarily on the professional 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 or services and their two closest competitors should be included. (2) For field generated requisitions, known suppliers in the geographic vicinity should be included. This geographic area is normally limited to the Centre or Delegations operational area, and the neighbouring countries.

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(3) For all requisitions, the Purchasing Officers should add additional suppliers 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 sole supplier, 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 Purchasing Officer's professional expertise and judgement should be used in determining the optimum number of suppliers for each solicitation. 5.04 Preparing Requests for Quotations:

a. Reference to Original PR: RFQs should always refer to the original Purchase Request reference number as 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, although Suppliers 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 favour 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 state their number, size or other clear description and a description of the tests which will be applied. It should be clearly stated that samples will be free and non-returnable by the Federation. e. Changes in Quantities. Where the exact quantity required is not known in advance, a definite quantity may be indicated on a aolicitation, with a provision that the Federation 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 indicated 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 provision that the Federation does not guarantee that the estimated quantity will be required, although 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 termination date should not be longer than one year from the date of the contract or PO, but may be 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 satisfactory 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 is probable that between (number of units) and (number of units) will be required. (2) The above-mentioned quantities are an estimate of probable requirements during the period (date) to (date), inclusive, the requirements of (ordering office) durprocurement manual, p. 22 of 51

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 responsibilities simply and clearly, so as to minimise the possibility of misunderstanding and subsequent 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 be clearly defined when used. The Purchasing Officer preparing an RFQ should select the Incoterm 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 applicable. h. The Time and Place of Delivery: The RFQ must furnish the prospective bidders 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 delivery offers including schedules of partial shipments if such would be acceptable. Where the urgent need of a commodity overshadows other considerations, the possibility of early delivery may 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. The method 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 include such things as spare parts, user manuals, packing and marking, foreign language, availability 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 purchases are within 30 days after receipt of goods and documents in apparent good order. Although 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., construction. 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 specifications, delivery terms, etc., which are desired, the RFQ should include the clause that Alternatives to the requested specifications may be considered. l. Insurance for Transportation of Goods: The Federation carries a global transport 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 insurance provided.

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m. Inspection Requirements: In certain cases it may be prudent to require inspection 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 delivery), 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 containing such bids or proposals will indicate the bid or proposal reference number and the bid 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 appropriate. Such individuals shall not be related to either the Purchasing Officer or to the procurement process. A record will be kept of bid openings by committee, such record to be signed by each of the participants and maintained in the procurement case file. Bids of CHF 100,000 or less may be received by personal delivery or by facsimile, with receipts to be controlled 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 consideration should 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 maintained 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 fluctuations, e.g., food prices during famines. 5.04 Amending the RFQ: If it becomes desirable to modify the RFQ in any way after it has 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 Proposal Annex B. INCOTERMS

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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 per the 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 incurred 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 RFP and 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 appropriate, in its sole discretion; modify or exclude any consideration, information or requirement 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 to all points set out in this RFP. Any proposal which does not fully and comprehensively address this RFP will be rejected. However, unnecessarily elaborate brochures and other presentations beyond that sufficient to present a complete and effective proposal are not encouraged. 7. The normal terms of payment of the Federation are within 30 days of satisfactory delivery of goods or services and documents in apparent good order. Proposers must therefore clearly 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), and must include the following: (a) (b) The date of the proposal. Signature, name, title, telephone and facsimile number of the authorised representative of the firm submitting the proposal including the firms mailing address. Terms of payment, including prompt payment discounts, if any. All other information required in this RFP.

(c) (d)

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 Societies Attn: Procurement Service P.O. Box 372 Switzerland

11. Proposals will be reviewed and evaluated by the Federation in accordance with the provisions 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 , indicated above for receipt of proposals. (60) days from the closing date of 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 information 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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Enclosures: as

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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 buyers and 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 Officers 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 the Handbook 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 buyer bears the full cost and risk involved in bringing the goods from there to the desired destination. 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 delivers 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 the buyer 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 shipment named in the sales contract. The risk of loss of or damage to the goods is transferred from 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 necessary 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 have been 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 insurance) are fulfilled when the goods have arrived at the frontier - but before "the customs border" 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 seller must bear the full cost and risk of delivering the goods to the designated port, but the buyer must 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 the full 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 import. CIF Cost, Insurance and Freight: This term is basically the same as CFR but with the addition 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 insurance premium. 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 goods during 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 for bulk 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 purchased 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 insurance. Risks of cost increases and delays of various types may be much more serious. Unforeseen 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 under terms other than the trade terms themselves but this should be clearly defined in the procurement documents (RFQ and PO or contract). General conditions of trade practically always procurement manual, p. 29 of 51

contain so-called force majeure exceptions, or relief clauses, which are designed to alleviate the 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 Federation is accomplished internally and there will be no public opening. When bids are to be publicly opened, such information will be included in the RFQ to include the date, time and location of opening. 6.02 Procedures for Receiving Bids: All bids and proposals are to be received by the requesting 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 accurate. Fax machines should be checked regularly to ensure that the machine generated date and 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. Responsibility 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 Purchasing 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. In the 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 significant 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 envelope 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 stamped and 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 clarify points 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 time of bid or proposal opening for sealed bids. .

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b. Costing data submitted in the suppliers offers will be treated as confidential information 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 receipt, 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 suppliers 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. Where the 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 programme is the criterion for determining the lowest bid or proposal, and the specifications in the invitation 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 Officer should consider whether or not the supplier has the capability in all respects to perform fully the contract 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, or to post a performance bond. Suppliers with no visible supply of material on hand may be required to prove availability of a dependable source of supply prior to consideration of their offer. 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 perceived lack of responsibility must be approved by the Head of the Service, RLC or Delegation conducting the procurement. c. Absolute impartiality must be shown to all bidders or proposers receiving the RFQ 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 considering each 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. If an item as offered 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 justification on the worksheet for each recommendation of award and forward the worksheet and procurement file to the appropriate approving officer for the procurement decision. 7.04 Adherence to Specifications: Only bids or proposals offering items with fundamental characteristics meeting or exceeding those in the solicitation shall be considered as acceptable unless programme emergencies dictate otherwise. Superficial characteristics which do not affect the programme value of an item and which are not included in the solicitation 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 specifications exceeding, or inferior to, those in the RFQ, the Purchasing Officer shall verify with the 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 Officer shall 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 delivery time to the requisitioner should also be considered in this case. c. Where "delivered" bids are requested, and an "origin" bid is received or vice versa, the bid may be accepted or rejected depending on the circumstances. Usually a delivered price is the bidder's "origin" price plus transportation costs to destination. Where the delivered price under one offer is equal to the origin price plus transportation costs under another, acceptance of the former would be desirable as it reduces bookkeeping and accounting costs 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 accounting costs 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 making fewer contracts, (b) possibly eliminate inconsequential orders, and (c) provide interchangeability or uniformity of items, where related. The same logic would apply when the Purchasing 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 justified even 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 less than 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 payment 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 such a 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 drawing to 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 worksheet, 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 a bidder. 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 of the 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 when required 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 or proposal 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 procurement manual, p. 34 of 51

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 correction 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 the placing 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 procurement 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. The recommendation should be reviewed and approved, suspended, modified, or disapproved by the Head of Service, Centre or Delegation or other authorised person, such action to be taken in writing on the CBA worksheet. In the event the lowest bidder or proposer is found unacceptable, then clear, concise and comprehensive justification must be provided in support of the decision. 7.14 Advance Notice of Award: An Advance Notice of Award should be used when it appears that the notification of acceptance in its usual form cannot be delivered in time, or as quickly as desired. Particularly, if the expiration of the time limit for the acceptance of an offer is at hand, or immediate notice to the contractor to proceed is desirable for some other reason, an advance notice should be used. Advance notice of award accepts an offer and makes a binding contract. In these cases the formal papers following the advance notice are in the nature of confirmation. The advance notice may be rendered by facsimile. 7.15 Requests for Information by Suppliers:

a. Prior to making an award, no information with respect to probable acceptance or rejection of any offer may be made available to any person other than an official of the Federation. The reasons for any delay in making the award may be made known upon request, if the furnishing of that information is not prejudicial to the interest of the Federation. b. After the award is made, should questions as to the outcome be put by unsuccessful bidders, the information supplied them should be limited to: (1) the name of the successful bidder, (2) the approximate price or prices at which the award was made, and (3) the basis of the award (e.g., whether the lowest bid met the delivery requirements, etc.). If the offer of the bidder making the inquiry was rejected for some reason other than price, a brief reason for the rejection should be given. The information made available to bidders or proposers may also be provided to others properly concerned (e.g., inquiries from missions and consulates). 7.16 Regrets Notification: As a courtesy to the Suppliers which were not selected, the Purchasing Officer will send a brief fax stating: "We regret to inform you that your offer for our RFQ No. ______ was not selected. thank you for your efforts on our behalf. Should you require additional information, please contact the undersigned." Information provided to inquiries will be limited to that which is indicated in paragraph 7.15b. Comparativ bid analysis procurement manual, p. 35 of 51

SECTION 8

8.0

EXCEPTIONS TO CALLING FOR BIDS OR PROPOSALS

8.01 Approved Exceptions: Contracts may be awarded without calling for proposals, advertising or formal invitations to bid when: (a) The proposed contract involves commitments of less than CHF 1,000 and the goods or services being purchased are in conformity with specifications, delivery requirements and available funding. (b) The prices or rates are fixed pursuant to national legislation or by regulatory bodies with jurisdiction over the purchasing office. (c) Supplies or equipment have been standardised with such standardisation published and disseminated, thus rendering competition impracticable. Such cases will be reviewed before approval by the Committee on Contracts. (d) The exigency of the operation does not permit the delay necessary to conduct the bidding process. Before awarding a contract under this exception, the Purchasing Officer should consider the feasibility of splitting the requirement so as to award a contract for a part of it on an emergency basis and the balance by competitive bidding, if such a course would be acceptable to the requisitioner. (e) The contract relates to the purchase of proprietary articles or perishable supplies. This exception applies to articles for which only one source exists, and no similar article which meets the requirements of the requisitioner is available from an alternative source. (f) The proposed contract relates to personnel services other than staff services.

(g) The award is granted to the lowest bidder in a recent bidding exercise (within the past ninety (90) days). 8.02 Telephonic Solicitations: Quotations may be requested and accepted by telephone when the amount of a contract is under CHF 1,000 and the specifications and contract terms are simple and clearly understood by all parties or when the delivery requirement is urgent. In the latter case, the solicitation will be followed by written verification of the request and the responses must be in writing. Such transactions will usually be handled by facsimile. 8.03 Use of Exceptions: Procurement officials should exercise sound judgement and caution in awarding contracts under any of the exceptions covered by the above paragraphs. Formal competitive offers should be sought whenever possible. In all events, a written record of the responses will be maintained on a CBA worksheet, and the evaluation processed as indicated in Section 7 of this manual.

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SECTION 9

9.0

FEDERATION COMMITTEE ON CONTRACTS

9.01 General: There shall be established a Committee on Contracts at the Federation Secretariat to render advice to the Under Secretary General for Finance and Administration, the Secretary General or the Management Group as a corporate body. The purpose of the Committee (hereinafter referred to as the CoC) is to examine and provide advice as to whether a proposed contract, including a contract which involves income to the Federation, is in accordance with the Federations financial regulations, procedures, administrative issuances and instructions and its recommendation has been based on fairness, integrity and transparency. When any of the following categories applies to a purchase order or written agreement (i.e., a contract), the advice of the CoC on Contracts shall be obtained prior to any contractual commitment being made: a. Any contract to be entered into with a single contractor in respect of a single requisition or a series of related requisitions in a calendar year totalling CHF 400,000 or more. b. Any amendment, modification or renewal of a contract previously reviewed by the CoC, where the contract amendment or a series of amendments in the aggregate increases the amount by more than 20 percent or CHF 200,000, whichever is less. c. Any amendment or modification of a contract previously reviewed by the CoC, where in the judgement of the Purchasing Officer the significance of the contract amendment in relationship to the criteria on which the original award was made would significantly affect the procurement process. d. Any amendment, modification or renewal of a contract not previously submitted to the CoC, where the amount in the aggregate now exceeds CHF 400,000. e. Any contract, amendment, modification or renewal of a contract which involves income to the Federation where the amount in the aggregate exceeds CHF 100,000. f. The standardisation of supplies or equipment, the result of which renders contract competition impracticable. g. Any other matter relating to a contract referred to the CoC by the USG, F&A, the Secretary General or the Management Group as a corporate body. 9.02 Meetings of the CoC: The CoC shall meet at such times and frequency as may be decided by the Chairman. In this regard, the Chairman, in determining the frequency of such meetings, shall ensure that the CoC is not causing any unnecessary delay in the procurement process. 9.03 Composition of the CoC: procurement manual, p. 37 of 51

a. The CoC shall be headed by a Chairman who shall be appointed by the Director of Administration, who may consult with the Director of Finance and the Legal Affairs Unit. b. In addition to the Chairman, the CoC shall be comprised of a staff member from each of the following departments/offices: (1) (2) (3) (4) The Procurement Service, in an ex officio capacity. The USG, Finance and Administration. The Finance Department. The Legal Affairs Unit.

c. The head of each department/office set forth above shall designate a staff member as well as one or more alternates from the office to serve on the CoC. The individuals selected should have commercial, financial or legal experience or qualifications in procurement. Each staff member so assigned shall serve for a term not to exceed three (3) consecutive years. d. Any department/office initiating a procurement action required to be reviewed by the CoC may have a representative in attendance in a nonvoting capacity when its procurement action is under discussion. The representative shall not take part in the meeting unless requested to do so by the Chairman of the CoC. 9.04 Duties of the CoC Members: a. The Chairman of the CoC: The Chairman is responsible for the following: (1) Issuing the agenda for CoC meetings.

(2) Designating from among the members or alternates of the CoC an individual to serve as Acting Chairman whenever the Chairman is on leave, unavailable or otherwise unable to carry out his or her duties. (3) Reviewing the presentations prior to CoC meetings and, when necessary, requesting clarifications and/or additional information from the Head of the office proposing the procurement. (4) Presenting the case file and recommendation to the CoC.

(5) Forwarding the recommendations of the CoC to the USG, Finance and Administration for approval. The minutes of the meeting will be signed by the Chairman and Secretary of the CoC, and delivered as soon as practicable, generally within 72 hours after the CoC meeting. . b. Secretary of the CoC: The Director of Administration shall appoint a Secretary to the CoC who shall have experience or qualifications in procurement. The Secretary shall not be a member of the CoC and shall be nonvoting. The Secretary shall be responsible for:

procurement manual, p. 38 of 51

(1)

Preparing the minutes and any correspondence.

(2) Co-ordinating the necessary arrangements for CoC meetings and distributing documentation relevant to a presentation to CoC members. (3) Maintaining a permanent record of all CoC minutes.

9.05 The Procurement Service's Role with Respect to the CoC: The Procurement Service is responsible for the following: a. Ensuring, in conjunction with the requisitioner and the relevant purchasing office, if other than the Procurement Service, that the presentation submitted to the CoC is complete, including a written justification for the proposed award and a brief description of the purpose or need for the goods and services proposed to be purchased. b. Providing clarification and/or additional information in connection with a presentation, when requested to do so by the Chairman for submission to the CoC. c. Ensuring that procurement is undertaken in accordance with the Federations financial regulations, established procurement practices and procedures, and administrative issuances and instructions and that it is in accordance with economy, delivery schedules and effectiveness. The Procurement Service shall also ensure fairness, integrity and transparency in connection with procurement actions. 9.06 Presentations to the CoC:

a. The Purchasing Officer generating the recommendation for procurement shall prepare the case file for presentation to the CoC, ensuring that the file is complete and the presentation to the CoC is comprehensive and clear to facilitate the Committee's review. b. The Head of the purchasing office, or a duly designated representative, shall issue a synopsis of the case file requiring action and submit it in memorandum format to the CoC a minimum of two (2) working days prior to the CoC meeting. Presentations not submitted to the CoC within a minimum of two (2) working days prior to the Committee's meeting may, with the approval of the Chairman, be presented on an ad hoc, e-mail or telephonic basis but such presentations should be the exception. All of the requirements set forth herein apply equally to such presentations as to those which have been included timely on the CoC agenda. . c. Generally, the CoC shall meet in closed session, which shall be limited only to its members, the Secretary of the CoC and a nonvoting representative of the office initiating the procurement. However, when deemed necessary by the CoC, it may meet in open session. d. The Chairman shall introduce all agenda items for consideration and decision by the CoC. The representative of the office initiating the procurement action may assist in the presentation if so requested by the Chairman. e. One (1) fully approved copy of the Committee's minutes shall be distributed as soon as practicable and generally within 72 hours after the conclusion of the meeting, as follows: (1) The USG, Finance and Administration procurement manual, p. 39 of 51

(2) (3) (4)

The Director of Administration. Members of the CoC. The relevant purchasing department/office.

f. The CoC shall promptly notify the procurement office concerned of any cases that have been rejected by the Coc, specifying in writing full and comprehensive reasons for the rejection and any remedial action it believes should be taken. 9.07 Ex post facto Presentations: For purposes of these guidelines the term ex post facto is used to define a procurement action in which goods and services have already been partially or fully delivered or performed prior to obtaining the advice of the CoC and/or the approval of other appropriate authorities. a. Ex post facto cases must be rare exceptions and, when they arise, full justification must be provided as to why timely presentation was not practicable. Subsequent approval of ex post facto cases does not imply that the CoC or the Federation approves or accepts responsibility for the actions of the officer or officers who committed the Federation contractually prior to obtaining all necessary approvals. The CoC may take note of such cases and, when appropriate, request clarifications and provide comments on the propriety of the action already taken. b. In such cases, it is usually difficult for the responsible Service or Delegation to positively affect the procurement action. Moreover, the CoC also has little control and can do little more than review the cases for propriety and possible prevention in the future. c. As ex post facto procurements have the potential for serious financial consequences for the Federation, responsible officials should be informed that they will be held personally accountable for authorising any ex post facto case which cannot be properly justified. Such justification is usually restricted to the following conditions: (1) Failure to act would either seriously jeopardise the operational capability of a Delegation or endanger the lives of Federation or other personnel. (2) The matter is beyond the reasonable control of the purchasing office.

d. Start-up Operations: Due to the nature of the operational environment locally during the commencement phase, it may be necessary to proceed with a procurement action prior to obtaining the advice of the CoC or the approval of any other appropriate authorities. Although such ex post facto cases dearly contradict the spirit of the financial regulations, there is a general consensus that they may be tolerated under exceptional circumstances. provided all other Federation procurement practices and procedures are followed. e. Detailed facts substantiating the conditions surrounding ex post facto procurements must be provided and any presentation that fails to comply with or attempts to circumvent the Federations procurement practices and procedures will not be accepted. 9.08 Local Committees on Contracts: Heads of RLCs and Heads of Delegation shall form local committees on contracts to protect the interests of the Federation and the local office. The local committees shall open sealed bids, as well as examine and provide advice as to whether a proposed contract is in accordance with the Federations financial regulations, procedures, administrative issuances and instructions and its recommendation has been based on fairness. integrity and transparency.

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a. The individual Head of RLC or Delegation shall review all procurement actions above his or her level of authorisation (see Section 2, Annex A), and may determine a lower threshold above which procurement actions should be reviewed by the local CoC. The CoC may also be used to review rejections of supplier registration and procurements involving exceptions to calling for bids or proposals as per Section 8. b. After review of the local CoC advice, the applicable official may submit the presentation to the Head of Logistics Service for review and comment. If deemed appropriate by the Head of Service, the case may be submitted to the Chairman of the CoC for further action. c. The local CoC shall review each file in which the field office has been granted the authority to purchase beyond its normal level of authorisation. When any of the categories established in paragraph 9.01 applies to a purchase order or procurement contract, the Purchasing Officer shall review the presentation and provide it to the applicable Head for forwarding to the CoC. Review by the CoC must be obtained prior to any contractual commitment being made. SECTION 10

10.0

FEDERATION CONTRACTS AND PURCHASE ORDERS

10.01 General: Written contracts or purchase orders shall be generated for every purchase of goods and services from a single supplier when the value of the procurement exceeds CHF 1,000, except as otherwise established herein. As a minimum they shall specify (in the case of the purchase of goods) in detail the exact description of the goods, the quantity to be delivered, the price of each article, the conditions of delivery and the terms of payment. In the case of services other than staff services, they shall specify the nature of the services, the period covered, the conditions of fulfilment, the amount(s) for service delivery and the terms of payment. a. The Director of Administration, or such other officials authorised by the Secretary General, may waive the requirement for individual written contracts in certain cases, such as office supplies or recurring services where a "blanket purchase order has been issued covering a variety of items. In the event of such a waiver, a written record shall be established to ensure that: (1) chased; (2) ery; (3) of sale and receipt. Payment of subsequent invoices is substantiated by the itemised record An itemised record of sale and receipt is prepared at the time of delivThe vendor and purchaser are in agreement as to what is being pur-

10.02 Contract Documents: Procurement of goods and services is accomplished by means of the following types of contracts: (a) Purchase Order: This document serves as the formal order or offer to the vendor to provide goods and services.. When the vendor accepts such an order or offer, a contract is consummated. procurement manual, p. 41 of 51

(b) Short Form Purchase Order: This form is used as an adjunct of a blanket purchase order issued for expendable non-stock items or services to be delivered as required within a stated period of time, with no commitment on the part of the Federation to procure a minimum or any quantity of the items in the BPO. A short form purchase order bearing the reference number of the original blanket purchase order may be issued for single purchases less than CHF 1,000 from the vendor holding the original purchase order. (c) Letter Contract: This type of contract is used by the Human Resource Department (HRD) to contract for the provision of outside expertise or professional services. Procedures governing the use of this type of contract are published separately by HRD. (d) Written Agreement: This type of contract is used when the requirement is such that it must be stated in written form rather than in formatted phrases (as in a purchase order), or the terms and conditions are complicated or require detailed written elaboration to ensure perfect understanding between the Federation and the contractor in respect of the obligations of both parties. For accounting purposes, any agency generating such a contract must issue an internal purchase order as the obligating document. 10.03 Purchase Order: The Purchase Order (PO) is a pre-numbered document which constitutes the formal contract with the vendor. All information relative to the procurement must be included on, or referred to and attached to the PO. In almost all cases the PO is a restatement of the terms and conditions included in the original solicitation (RFQ or RFP), modified by the cost data and any changes in terms or conditions which were agreed to as a result of the bid evaluation and contract award decision. a. Format: There are a number of Purchase Order formats in current use in the Federation, including the model on page 910 of the Handbook for Delegates. These are eventually expected to be replaced with the introduction of the automated procurement system. Until otherwise notified, these forms may continue to be used as long as they contain the following information. (1) (2) Buyer Identification, to include address. Seller Identification, to include address and contact person if known.

(3) The PO Number, a unique pre-printed number that is controlled in a register of Purchase Orders. (4) A PR Reference Number. This number is used to track the procurement with the original requisition, and should be used on all the documents related to the procurement. If the PO is responding to consolidated PRs, then the individual lines should be assigned reference numbers. (5) The Financial Accounting Codes. These are necessary for fund obligation and budget control. (6) Description of the Goods or Services Ordered. For goods, this includes a detailed description of the goods, the quantity, the unit and total price of each article. For services, this includes the nature of the services in detail, the period covered, the conditions of fulfilment and the costs of the service, identified by separate lines if services may be ordered separately. (7) Shipping Terms. See Annex C to Section 5. procurement manual, p. 42 of 51

(8)

The Payment Terms.

(9) The Delivery Terms, to include the delivery address, contact person, telephone and fax numbers and agreed delivery date. (10) The Consignee, to include the delivery address, contact person, telephone and fax numbers. (11) Packing and Marking Instructions, as specified in the RFQ, or if not specified, sufficient to ensure safe arrival.. (12) Special Instructions. Sometimes referred to as Observations, the special instructions will refer to the suppliers offer, any attachments, any special requirements put in the RFQ or agreed to as a result of the Competitive Bid Analysis and award decision. (13) Distribution of Documents, to include waybills or bills of lading, packing lists, invoices, insurance certificates, certificates of origin, pro forma invoices, gift certificates, etc. (14) An Authorised Signature. See Section 2.

b. Terms and General Conditions: Terms and General Conditions which apply to any contracts issued by the Secretariat are usually pre-printed on the PO. These include such administrative instructions as acknowledgement of receipt as well as such terms as force majeure. The Terms and General Conditions on the contracts issued in Geneva are applicable under Swiss law. RLCs and Delegations doing procurement should check with their local legal advisor and amend the terms and conditions to apply with local law. In addition to the Terms and Conditions currently in use, the following clause should be added: Officials Not to Benefit: The contractor represents and warrants that no official of the International Federation of Red Cross and Red Crescent Societies has been, or shall be, admitted by the contractor to any direct or indirect benefit arising from this contract or the award thereof. The contractor agrees that breach of this provision is a breach of an essential term of this contract. c. 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, Departments 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. A BPO is a formatted PO, but with the quantity expressed in values not to be exceeded and a delivery period rather than a required delivery date. The delivery period should never exceed one year, and should never go beyond 31 December of the year issued. Where a blanket purchase order has been established, a department may order directly using a Short Form Purchase Order, or short form. All authorisations for direct procurement under BPOs must be in writing. The vendors shall be provided a list of all persons authorised to order against the BPO and any limits which may apply to their ordering authority.

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10.04 Short Form Purchase Order: There is currently no standard short form in use in the Federation, although the procedures are being used in the ordering of both goods and services. Substitute short forms shall have the same information as included on the PO with the following exceptions: a. The short form does not have its own number, rather it uses the original PO Number, as the PO is the basic contract. b. The PR Reference Number is not required, unless the purchasing office will make further distribution against an outstanding purchase request. c. The Description of the Goods or Services Ordered need not be as detailed as on the original PO, and may make reference to a line on the original PO. d. Shipping and Delivery Terms are normally established in the original PO and shall not be changed, although a point of contact shall be included if the goods are being delivered to a central receiving office. e. The Payment Terms are not required. The Accounting Codes are required for internal redistribution, but the procurement office generating the PO will process the invoices as per the original BPO. f. Special Instructions, Terms and Conditions are not required..

10.05 Written Agreement: A written agreement, commonly referred to as a contract, is used when the requirement is such that it must be stated in written form rather than in formatted phrases (as in a purchase order), or the terms and conditions are complicated or require detailed written elaboration to ensure the obligations and rights of both parties are adequately defined. To facilitate financial accountability, a written contract should be summarised in a purchase order issued for internal use only. Typical examples of situations requiring written contracts include cleaning, catering, cargo handling, warehousing, maintenance and transportation services, as well as all construction requirements. a. Requisitioner's Responsibility: The requisitioner is required to submit a detailed PR adequately defining the requirement. It should be supported by a comprehensive description of the service to be supplied or the work to be executed, including detailed specifications of construction and installations required and architect's drawings if appropriate. The description should also specify the time period within which the work or service is to be performed. b. Responsibility of the Contracting Officer: The contracting officer shall solicit competitive bids or proposals as defined in Section 5, unless one of the rules for exception applies. When a contractor has been selected to receive the contract award and the terms and conditions of the proposed contract have been formulated, the contract shall be forwarded to the Legal Affairs Unit for review, as well as to the Committee on Contracts if over CHF 400,000. The legal review is not required if the contract is to extend or renew an existing contract without major changes of terms and conditions, or if the contract is essentially identical to another contract previously reviewed by the Legal Affairs Unit. c. Performance Bond: When the amount of a contract is greater than CHF 100,000, and there is any question regarding the contractor's capacity to satisfactorily complete the contract, it may be prudent to require the contractor to provide a performance bond. The decision as to whether such bonds are required shall be based on factors such as the contractor's reputation and experience as well as the cost of the bonds weighed against the perprocurement manual, p. 44 of 51

ceived potential risk to the Federation should the contractor fail to execute the contract satisfactorily. d. Contract Format: The contract may be written according to a variety of formats but whichever format is used must include the following elements: (1) Statement of Work: The background and general description of the work to be performed as well as a detailed description of all elements of the work to be performed, including definitions and specifications. Wherever possible, terms of reference and/or specifications should be annexed to the contract and annotated as part of the contract. (2) Period of Contract: This includes the starting and completion dates of the contract, as well as penalties if the completion date is not met, if appropriate. (3) Responsibilities of the Contractor: This includes: tion. Other special responsibilities of the contractor. Personnel requirements. Equipment requirements. Quality of performance. Maintenance of records and availability of records for inspec-

(4) Level of Effort: This includes the schedule of operations, the performance requirements and provision for allowing fluctuations to cover unforeseen developments. (5) Responsibilities of the Federation: This includes: Identification of any facilities provided for the contractor. Any material inputs.

Other special responsibilities of the Federation required to facilitate contract performance. (6) Contract Monitoring and/or Supervision: This includes: Method of monitoring and/or supervision. Authority of the monitor or supervisor. Any periodic contract reviews.

(7) Reporting Requirements: This includes the definition and schedule of the reports to be submitted as well as the review and approval procedures . (8) Payments: Contracts will include the total value (price) of the work as well as a breakdown of costs (daily rates, unit costs, etc. as applicable) and a payment sched-

procurement manual, p. 45 of 51

ule. For manufacturing and construction contracts, there should also be a clause stating that final acceptance by the Federation is a precondition for final payment. (9) Penalty Clause: This is a provision against failure of the contractor to perform or complete the work on time (e.g., withholding of payments, liquidated damages, etc.) A standard liquidated damages clause reads as follows: "elivery after the agreed schedule of shipment will be subject to a deduction from the invoice of 0.1% per day or part thereof of the total CPT (carriage paid to) value of the contract." Such clauses should only be used when delivery is urgent, the schedule is part of the contractual agreement, and the value of the transaction would merit the expense of litigation should the supplier protest the penalty. Notice of intent to include a liquidated damages clause must be included in the RFQ. (10) Procedures for Amending and Terminating the Contract: Amendments of a contract if required shall be numbered serially, commencing with Amendment No. 1. Each amendment shall identify the contract to which it refers by number, subject and date. The nature of the amendment shall be clearly described and a statement included that all other terms and conditions of the contract shall remain unchanged. The procedures for signing an amendment are the same as for the original contract. If the amendment modifies the expenditure under the original contract or substantially modifies the scope of work and the original contract was reviewed by the Committee on Contracts, the advice of the Committee shall be obtained before the Amendment is issued. (11) Authorised Representatives of the Parties: Their addresses including telephone and fax numbers. (12) General Conditions: As with purchase orders, the Terms and General Conditions of the Federation should apply to Federation contracts. If not directly quoted in the contract, then a statement shall be included that the attached dated Terms and General Conditions are by reference a part of the contract. (13) Settlement of Disputes: Provisions shall be included for the settlement of disputes between the two parties. The preferred method is arbitration, however some States require settlement of contractual disputes within the courts of that State. In such cases, the law of the country will prevail. (14) Agreement of Parties: The last item on the contract is a statement of agreement to the terms and conditions thereof followed by the signatures of the parties and the date of signature. The name of the contractor and the name of the authorised individual who will sign the contract on behalf of the contractor shall be printed. The name of the authorised official who will sign on behalf of the Federation shall also be printed. Contracts will be initialled on the bottom of each page of the contract, and any annexes, by both parties. e. Distribution; Contracts shall be distributed as are purchase orders, with one additional copy to be provided to the Legal Affairs Unit.

Purchase Contract Purchase order (Sample) Local purchase order (Sample) Terms and conditions

procurement manual, p. 46 of 51

SECTION 11

11.0

DISPOSAL BY SALE OF PROPERTY

11.01 General: The procedures concerning property lost, damaged or stolen are presented in the Federations Procedures Concerning Writing-Off of Assets Lost or Disposed of and are not the subject of this section. This section covers only the procedure for the sales of supplies, equipment or other property with a purchase value in excess of CHF 1,000. a. Identification of Surplus or Unserviceable Property: The declaration of property as surplus or unserviceable is the responsibility of the appropriate Head of Service, Centre or Delegation who is accountable for the property. When the appropriate Head proposes sales of supplies, equipment or other property declared surplus or unserviceable, the proposal will be forwarded for approval at the appropriate authorisation level on Asset Disposal forms as specified in the Federations Procedures Concerning Writing-Off of Assets Lost or Disposed of. b. Sales Considerations: Prior to recommending sale, the recommending official will, as a minimum, consider the following: (1) The estimated sales value of the property, and the administrative costs involved in prosecuting a sale. (2) Whether the best interest of the Federation will be served by sale.

(3) If the exchange of property in partial or full payment for replacement equipment or supplies is possible. (4) If the destruction of the property will be more economical or is required by law or by the nature of the property. (5) If the interests of the Federation will be better served by donation of the property to a National Society or other humanitarian organisation, or transfer to another operational programme. (6) If the property is part of an operational programme, restrictions on the use of programme commodities and the desires of the donor, if any. (7) Whether there are governmental restrictions forbidding the sale of property imported or requiring import duties to be paid prior to the sale of such goods. (8) The public relations impact of such a sale.

11.02 Methods of Sale: Once the appropriate approvals have been obtained, sales will normally be conducted on a sealed bid cash basis. Exceptions to this procedure must be approved in writing by the appropriate Director with the concurrence of the Director of Finance. a. Competitive Bidding: Invitations to bid for the purchase of property for disposal are issued to prospective purchasers. To facilitate sales, it is recommended that advertisements be published in the local media. The format of an invitation to bid at Annex A

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identifies the information which is required to be published. Items may be sold singly or in groups if considered in the best interests of the Federation. b. Negotiation or "Spot Sales": If the estimated value (not the purchase price) of the property is less than CHF 1,000 and sealed bidding will not provide the most practical results, prospective buyers may be approached by telephone, letter or in person as well as through the media. After inspecting the property they may submit informal bids by phone, facsimile, e-mail, in writing, or in person. A date and time limit are set on such bids as in formal bidding. c. Fixed Price: Sale by fixed price may be recommended if the value of the property is known and the fixed price will ensure a minimum and fair return to the Federation. However, it may be better to advertise for sealed bids with the desired fixed price set as a minimum. d. Commercial Realtor: In the event that immovable, or real property (buildings, land, etc.) is to be disposed of, the individual responsible will use the services of a local legal counsel and a reputable commercial Realtor, such individuals not to be related either through blood or commercial enterprise. In all cases, the proposal and the execution thereof shall be co-ordinated closely with the Legal Affairs Unit. 11.03 Conduct of the Sale: After having all the necessary approvals and determining the method of sale, the property should be advertised and sufficient time given for potential bidders to respond. To ensure that the sale proceeds without complication, the following items should be considered: a. Items to be Sold: The Federation must have title or legal ownership of the property in order to conduct the sale. Certain items, such as vehicles, will require registration documents and import papers. The seller should have the documents of ownership, know the location and condition, and tag items to be sold with a number corresponding to the item number on the invitation to bid. This will facilitate a fair and honest representation of the condition, as well as inspection by prospective buyers and subsequent removal. b. Condition of the Property: To prevent possible misunderstanding or legal difficulties, it shall always be clearly indicated if the property is damaged, used, serviceable, or in need of repairs, before it is advertised. Prospective purchasers should be urged to inspect the property before submitting bids. c. Payment of Deposit: It is customary within some agencies to request a deposit from prospective bidders. Unless conducting a major sale of items valued above CHF 20,000, this is not recommended within the Federation as the administrative workload and risks attendant thereto usually exceed the benefit to be gained. However, if the selling office determines that deposits should be requested, then such deposits should be of not less than ten percent of the amount bid. If it is a large sum a certified cheque is required. Deposits will be returned to unsuccessful bidders with a letter of explanation. The deposit of the winning bid is credited to the sales price, and is not returned. d. The Sale: The actual sale shall take place as scheduled on the invitation to bid or in the public announcements. All bidders must be notified if the bid opening time or location is changed. Bidders need not be present to win the bid, but must be able to be contacted within 24 hours. A limited time should be allowed following the sale for payment and removal of property, usually five working days. The seller shall provide a Bill of Sale to the

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buyer, consistent with local government requirements, as well as other documents which may be required to be transferred with the property. 11.03 Actions Subsequent to Sale: Upon completion of the sale, the result of the disposal process shall be recorded by the Department, Service or Unit concerned on the appropriate part of the Asset Disposal form. Upon completion, the original form shall be forwarded to the serving Finance Office for appropriate recording. A copy of the Bill of Sale shall be attached thereto, along with the cheque or money order. a. Asset Control: Heads of Delegation are required to update the fixed asset register in SCALA (or provide copies of the Asset Disposal forms to Logistics Service) and amend the fixed asset register of the Delegation. They are also required to provide a copy to the Insurance Office of the Administration Department so that applicable insurance policies may be updated. Offices in Geneva should forward a copy of the Asset Disposal forms to the Administration Department if the Administration Department did not conduct the sale. b. Government Formalities: When required under status, tax exemption or other agreements in effect with the host government, Heads of Delegation will provide the necessary notices to the appropriate Government agency. 11.04 Sales to Delegates and Local Staff: Sales to delegates and local staff members are permissible only in fair and open competition. Employees of the RC/RC must adhere to the same procedures as outside bidders, with the exception that such employees need not provide a deposit if one is required. ANNEX A. Invitation to Bid

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ANNEX A to SECTION 11 INVITATION TO BID

Date: ________________

Invitation No. ______________ Opening Time: ____________________

Opening Da

SALE OF SURPLUS EQUIPMENT Sealed bids, in original only, for the purchase and removal of the item described hereon, will be received in Room _______, Office ___________, Address _________________________, City ____________________, Country ____________________. The sale number (_________), hour and date of opening must be indicated on the face of the return bid envelope. 1. A deposit (Money Order or Certified Cheque for not less than 10% of the total bid, made out to the Federation) must be submitted with the bid. The deposits will be returned promptly to unsuccessful bidders and will be considered part payment for successful bidders following the award. Federation staff members are not required to submit deposits. 2. Bidders are urged to inspect the item(s) prior to submitting bids. 3. The items are located at ____________________________________, _____________, ________________, and may be inspected between the hours of _______ to ________ on (days) ___________, (month) ______________, (year) ________. For inspection please contact ___________________________ Room ________________, Telephone No. ____________________. 4. The Federation reserves the right to reject any and all bids and to waive any informality in the bids received whenever such rejection is in the interest of the Federation. 5. The Federation also reserves the right to withdraw the item prior to award. 6. Payment in full must be made prior to removal of the property and in any case within five (5) days of the award. 7. The item(s) described are offered for sale "AS IS" and "WHERE IS" and without recourse. 8. Upon payment of the purchase price in full, by Certified Cheque or Money Order drawn payable to the Federation, title to the material passes to the purchaser and all handling thereafter shall be at the expense and risk of the purchaser. 9. Purchasers agree to remove the item(s) awarded at their expense and without damage to surrounding property, including buildings, and further offer and agree to reimburse the Federation for any damage sustained as a result of the removal of the item(s) purchased. 10. Please note that the Federation is unable to provide any assistance either mechanical or manpower for the removal of the item(s). procurement manual, p. 50 of 51

11. The successful bidder is responsible for payment of any duties or taxes which may be due as a result of this sale. . ITEM No. DESCRIPTION QUANTITY AMOUN T OFFERE D

(Describe the commodity in detail)

BIDDER: ________________________________________________________________ ADDRESS: ________________________________________________________________ NAME: ________________________________________________________________ TITLE: ________________________________________________________________ SIGNATURE: _______________________________ PHONE No. _____________________ If Required, Deposit is to be Enclosed. PLEASE REFER ALL INQUIRIES TO : ________________________________, Room ___________, Telephone No. ________________________.

PLEASE INDICATE YOUR NAME, ADDRESS, BID NUMBER, DATE AND TIME OF OPENING ON THE RETURN ENVELOPE . (Bids will be opened in Room _____ at _______ oclock on ___, ____________, 20__.)

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