0

INTERNATIONAL ORGANIZATION FOR MIGRATION Document Title: IOM PROCUREMENT MANUAL Procurement of Goods, Works & Services Document Type: Instruction Character: Compliance with this Instruction is mandatory

Control No.: IN/168 rev (2) Document Owner: GPSU

Status: Active

Date of Entry Into Force: 12 May 2016, replaces IN/168 Replaces – IN/168 rev (1) Summary: The purpose of this Instruction revision is to update the sections on procurement threshold, sanctional actions, implementing partners, procurement of pharmaceutical and medical products and guide for establishment of Long Term Agreements Annexes: Guide for Implementation of Construction Works BEAC Guide on the Conduct of Competitive Bidding Guide on the Use of International Commercial Terms (INCOTERMS) Purchase Authorization Matrix for Field Mission Guide for Medical and Pharmaceutical Procurement Identification and Selection of Implementing Partner (IP) Guide for establishment of Long Term Agreements Keywords: Procurement, Goods, Construction Works, Services, Procurement Process, Procurement Forms, Procurement thresholds Location: http://mnlfnetapps.as.iom.net:7010/filenetaccess/viewDocument.do?controlNo=IN/00168 Initiated: GPSU Coordinated: DRM, OIG, LEG, DOE, DGO and MAC Authorized: DGO Distribution: All Departments at HQ, All Missions Worldwide

INS

TR

UC

TIO

N

1

IIOOMM PPRROOCCUURREEMMEENNTT MMAANNUUAALL PPrrooccuurreemmeenntt ooff GGooooddss,, CCoonnssttrruuccttiioonn

WWoorrkkss && SSeerrvviicceess

Global Procurement and Supply Unit May 2016

2

TABLE OF CONTENTS .......................................................... Error! Bookmark not defined. 1.0 INTRODUCTION........................................................................................................ 4 2.0 OBJECTIVE ................................................................................................................ 4 3.0 SCOPE AND APPLICATION.................................................................................... 4 4.0 GENERAL PROCUREMENT PRINCIPLES .......................................................... 4

4.1 Definitions................................................................................................................... 4 4.2 Business Ethics ........................................................................................................... 5 4.3 Conflict of Interest ...................................................................................................... 6 4.4 Sanctionable Actions .................................................................................................. 6 4.5 Principles Governing the Award of Contracts ............................................................ 8 4.6 Non-exploitation of Child Labor ................................................................................ 8 4.7 Vendor Eligibility ....................................................................................................... 8 4.8 Procurement of Second Hand/Used Goods................................................................. 9 4.9 Internal Controls – Segregation of Duties .................................................................. 9 4.10 Organizational Structure ............................................................................................. 9 4.11 Procurement Threshold ............................................................................................... 9

5.0 BASIC PROCUREMENT PROCESS (BELOW USD 100,000) ........................... 10 5.1 Purchase Requisition ................................................................................................. 10 5.2 Evaluation of Quotations /Proposals ......................................................................... 10 5.3 Purchase Documentation (Purchase Orders) ............................................................ 10 5.4 Acceptance of Procured Goods, Construction Works or Services ........................... 11 5.5 Vendor Verification .................................................................................................. 11

6.0 PROCUREMENT OVER USD 100,000 .................................................................. 11 6.1 Procurement Planning ............................................................................................... 12 6.2 Procurement Methods ............................................................................................... 13 6.3 Request for Quotations/Proposals and Bidding Documents ..................................... 16 6.4 Bids, Evaluation and Awards Committee (BEAC) ................................................... 18 6.5 Vendor Verification .................................................................................................. 19 6.6 Eligibility/Qualification of Bidders .......................................................................... 19 6.7 Evaluation and Comparison of Quotations/Bids for Goods/ Construction Works/Services .................................................................................................................... 20 6.8 Rejection of All Bids/Cancellation of Procurement Process .................................... 21 6.9 Handling Procurement Complaints/Appeals............................................................. 21 6.10 Procedures on Conciliation, Arbitration of Contracts/Settlement of Disputes ......... 22

7.0 PROCUREMENT DOCUMENTATION AND FORMS ....................................... 22 8.0 ADVANCE PAYMENTS AND SECURITIES/GUARANTEE, REQUIREMENTS ................................................................................................................. 24 9.0 Acceptance of Procured Goods/ Construction Works/Services............................. 26 10.0 PRISM as a Procurement Tool ................................................................................. 27 11.0 Emergency Requirements ......................................................................................... 27 12.0 Long Term Agreements ............................................................................................. 28 13.0 Procurement of Pharmaceutical Products............................................................... 28 14.0 Procurement of Food Products ................................................................................. 28 15.0 Procurement of Construction Works ....................................................................... 28 16.0 Use of Procurement Centers ..................................................................................... 29 17.0 Asset, Insurance, Offsite Storage, and Records Management ............................... 29

17.1 Asset Control and Insurance ..................................................................................... 29 17.2 Offsite Storage .......................................................................................................... 29 17.3 Records Management................................................................................................ 30

18.0 Required Forms ......................................................................................................... 31 18.1 Purchase Requisition (PR) ........................................................................................ 31

3

18.2 Bids Analysis Summary (BAS) ................................................................................ 31 18.3 Purchase Order with Terms and Conditions (PO) .................................................... 31

19.0 Supplemental Forms .................................................................................................. 31 19.1 Request for Quotation (RFQ).................................................................................... 31 19.2 Request for Quotation (RFQ) with General Instructions to Suppliers (GIS)............ 31 19.3 Request for Quotation (RFQ) with General Instructions to Contractors (GIC) ........ 31 19.4 Request for Expression of Interest (REI) for Services (CS) ..................................... 31 19.5 Request for Proposal for Services ............................................................................. 31 19.6 Vendor Information Sheet (VIS) .............................................................................. 31 19.7 Vendor Verification and Evaluation Form ............................................................... 31 19.8 Eligibility Notice ....................................................................................................... 31 19.9 Non-Eligibility Notice .............................................................................................. 31 19.10 Bidding Document for Goods ................................................................................... 31 19.11 Bidding Document for Works ................................................................................... 31 19.12 Bidding Document for Services ................................................................................ 31 19.13 Declaration of Non-Conflict of Interest .................................................................... 31 19.14 Bidders’ Registry ...................................................................................................... 31 19.15 Abstract of Bids ........................................................................................................ 31 19.16 Minutes of the Bid Opening ...................................................................................... 31 19.17 BEAC Resolution...................................................................................................... 31 19.18 Contract for the Supply and Delivery of Goods ....................................................... 31 19.19 Contract for Construction works ............................................................................... 31 19.20 Services Contract/ Agreement .................................................................................. 31 19.21 Notice of Award (NOA) ........................................................................................... 31 19.22 Thank You Notice ..................................................................................................... 31 19.23 Notice to Proceed (NTP) ........................................................................................... 31 19.24 Certificate of Provisional Acceptance (CPA) ........................................................... 31 19.25 Certificate of Final Acceptance (CFA) ..................................................................... 31 19.26 Request for Payment (RFP) ...................................................................................... 31 19.27 Bid Security .............................................................................................................. 31 19.28 Performance Security ................................................................................................ 31 19.29 Security for Advance Payment ................................................................................. 31 19.30 Variation Order ......................................................................................................... 31 19.31 Vendor Performance Evaluation Form (VPEF) ........................................................ 31 19.32 Service Certificate ..................................................................................................... 31

20.0 Annexes ....................................................................................................................... 31 20.1 Guide for Implementation of Construction Works ................................................... 31 20.2 BEAC Guide on the Conduct of Competitive Bidding ............................................. 31 20.3 Guide on the Use of International Commercial Terms (INCOTERMS) .................. 31 20.4 Purchase Authorization Matrix for Field Mission .................................................... 31 2.05 Guide for Procurement of Medical and Pharmaceutical products ............................ 31 20.6 Identification and Selection of Implementing Partner (IP) ....................................... 31 20.7 Guide for establishment of Long Term Agreements ................................................ 31

4

1.0 INTRODUCTION The purpose of this Manual is to guide IOM staff, especially those undertaking the Procurement Function, of the required policies which shall be observed in carrying out procurement of goods, construction works and services. 2.0 OBJECTIVE This policy aims to ensure that the IOM Procurement Processes are carried out in the most efficient, effective and ethical manner. 3.0 SCOPE AND APPLICATION Date of Entry into Force: Revision 2 of IN/168 (in force since 7 May 2010) enters into force on May 2016 Note: This is a new procedure for all IOM Missions worldwide. Inquiries may be addressed to the Global Procurement and Supply Unit (GPSU) in Manila (telephone: + 632-230-1999) or email: gpsu@iom.int. This Manual contains guidelines applicable to all types of procurement, including, but is not limited to, procurement of vehicles; equipment, construction, services (except airline ticketing and passenger Chartered Flights), appliances, computers, IT equipment, supplies, telecommunications, articles for projects (shelter, medicines, tents, etc.), and out-sourcing. In general terms, this policy covers purchases needed for an office or the implementation of a project. 4.0 GENERAL PROCUREMENT PRINCIPLES 4.1 Definitions a. Goods - All items, supplies, materials, equipment and furniture, computer, IT and

telecommunications equipment; software, office supplies; household appliances and furniture; goods and equipment needed in the project implementation (e.g., medical equipment and supplies, blankets, tents, and materials for construction, printed materials, and other similar equipment and materials.

b. Construction Works - Infrastructure projects to construct, improve, rehabilitate,

demolish, repair, restore, or maintain buildings, roads and bridges, etc., or civil works components of information technology projects, irrigation, flood control and drainage, water supply, sanitation, school buildings, health clinics, reception centers, etc.

c. Services - Intellectual and non-intellectual services not covered under goods and

works:

General Services - Services such as repair and maintenance of equipment/furniture, trucking, hauling, janitorial, security, lease of office space, offsite storage, transport

5

services, importation and logistics services, media advertisements, health maintenance services, and other similar services.

Consulting Services - Activities requiring external technical and professional expertise beyond IOM’s internal capacity, such as advisory and review services, pre-investment or feasibility studies, research, web and other design, construction supervision, management and related services, and technical or special studies provided by firms/ companies. For individual consultancies, refer to IN/84: Guidelines for Selection and Employment of Consultants and IN/73: Guidelines to the Differences Between Individual and Service Provider Contracts.

Implementing Partners – Services received from Implementing Partners (e.g. International Organizations, NGOs, Non-profit Agencies) shall be treated based on the Annex 20.6 (please refer to Annex 20.6)

d. Mixed Procurement/Contracts - Procurement which combines categories, such as goods and construction works, goods and services, or construction works and services. In such a contract, the higher value shall be considered in determining which procedures and documents to follow or use. For example, where procurement is a combination of goods and services, if “services” is the higher value, then the Mission shall use documents for the services category.

e. Technical Specifications – These are tendering requirements that apply to goods

and construction works contracts, setting out the characteristics of the goods/ construction works to be procured, such as quality, performance, safety, dimensions, or the process and methods for their production or provision, including any administrative considerations. Technical specifications also address terminology, symbols, packaging, marking or labeling requirements, or conformity and assessment procedures prescribed by contracting authorities. Care must be taken in preparing the technical specifications to ensure they are not restrictive i.e. they are open to any brand.

f. Terms of Reference – These are requirements that apply to a service contract which accurately define the characteristics of the service required with regard to the purpose for which it is intended and sets out conformity assessment procedures prescribed by a contracting authority. g. Vendor – This refers to suppliers (for Goods), contractors (for Construction Works) and service providers (for Services)

h. COM or HOO – This refers to the Chief of Mission (COM) and Head of Office (HOO).

4.2 Business Ethics The highest ethical standards shall be employed in all procurement transactions, and Vendors shall be chosen based on IOM’s procurement policies and defined selection criteria. IOM staff, especially those involved in any phase of procurement, must declare any affiliations with Vendors and bidders. IOM Staff should not disclose privileged information about any

6

project requirements or deprive other bidders of such information that puts a bidder or group of bidders at more advantageous position over the other bidders. This includes revealing the other bids/ quotations prices, terms and conditions etc. Failure to make such a declaration shall be construed as a conflict of interest and subject to disciplinary measures. IOM staff shall not accept commissions, gratuities or gifts from Vendors and bidders. Any staff member, including the Chief of Mission (COM) or Head of Office (HOO), in breach of these policies will be subject to disciplinary measures, in accordance with the Staff Rules and Regulation10, in addition to other administrative measures or legal remedies. 4.3 Conflict of Interest Vendors and bidders shall declare if they have family or relatives employed by IOM. A bidder found to have an undisclosed conflict of interest with IOM, or with a competing Bidder, shall be disqualified from participating in a tender. A bidder may, for example, be considered to have a conflict of interest under the following circumstances: A Bidder has controlling shareholders in common with another Bidder;

A Bidder receives or received any direct or indirect subsidy from another Bidder;

A Bidder has the same representative as another Bidder in one particular bidding;

A Bidder has a relationship, directly or through third parties, that puts them in a position to access information about, or influence the bid of, another bidder, or influence the decisions of the Mission/Procuring Entity regarding the bidding process;

A Bidder who participated as a consultant in the preparation of the design or technical

specifications of the Goods and related services that are subject of the bid.

4.4 Sanctionable Actions In the first instance, all allegations of sanctionable action(s) by bidders, candidates, vendors, suppliers, service providers or contractors, as defined below, shall be referred to the Ethics and Conduct Office (ECO) by the relevant Procuring Entity (usually a Country/Regional Office or GPSU). As provided in the Charter of the Office of the Inspector General1, these allegations shall then be transferred to the Office of the Inspector General (OIG) from ECO. OIG will conduct a preliminary assessment, after which OIG may, in the exercise of profession discretion and taking into account various factors such as IOM’s obligation towards the relevant donor(s), and the Organization’s interest of the most effective usage of IOM resources, decide whether or not to commence an investigation and the manner in which such investigation is to be conducted. OIG shall consult LEG , prior to the commencement of investigation, whether it is warranted to suspend or terminate the ongoing Contract with the concerned vendor until the investigation is completed and whether IOM has the right to legally suspend or terminate the

1 IN/74 Rev 1, Charter of the Office of the Inspector General, date of entry into force 1 December 2015.

7

contract . OIG shall inform GPSU of the name of vendor under investigation and shall request GPSU to immediately inform OIG when GPSU becomes aware of any Country/Regional Office or departments considering the use of the concerned vendor. OIG has exclusive responsibility for investigation, which shell only, be conducted under its auspices. Once the investigation is complete, OIG shall present the findings concerning whether the vendor has engaged in a sanctionable action to GPSU and the Procuring Entity, subject to prior approval of LEG and HRM in case when an IOM staff member has committed misconduct. Any action taken by IOM following the completion of investigation, such as lifting the suspension of contract or serving a written notice of contract termination to the vendor shall be coordinate with LEG . Sanctionable action means either:

(i) a corrupt practice, defined as the offering, giving, receiving or soliciting, directly or indirectly, of anything of value to influence the action of the Procuring Entity in the procurement process or in contract execution;

(ii) a fraudulent practice, defined as any act or omission, including a misrepresentation,

that knowingly or recklessly misleads, or attempts to mislead, the Procuring Entity in the procurement process or the execution of a contract, to obtain a financial gain or other benefit or to avoid an obligation;

(iii) a collusive practice, defined as an undisclosed arrangement between two or more

bidders designed to artificially alter the results of the tender process to obtain a financial gain or other benefit;

(iv) a coercive practice, defined as impairing or harming, or threatening to impair or harm,

directly or indirectly, any participant in the tender process to influence improperly its activities, or affect the execution of a contract.

(v) an obstructive practice, defined as (i) deliberately destroy, falsifying, altering or

concealing of evidence material to IOM investigations, or making false statements to IOM investigators in order to materially impede a duly authorized investigation into allegations of fraudulent, corrupt, collusive, coercive or unethical practices; and/or threatening, harassing or intimidating any party to present it from disclosing its knowledge of matters relevant to the investigation or from pursuing the investigation; or (ii) acts intended to materially impede the exercise of IOM’s contractual rights of access to information.

(vi) any unethical practice contrary to any contractual provisions or other IOM published

requirements concerning ethical standards applicable to doing business with the Organization.

The Procuring Entity shall reject any proposal put forward by bidders, or, where applicable, terminate the contract between IOM and the vendor, if it is determined that they have engaged in any of the above sanctionable actions. During the competitive bidding process (See Section 6.2.3 below), all tender documents must provide a clause agreeing to cooperate with and non-obstruction to any duly authorized IOM investigation.

8

4.5 Principles Governing the Award of Contracts The responsibility for procurement, including award and implementation of contracts, rests with the Mission/Procuring Entity. IOM has an obligation to ensure funds entrusted by donors are properly used with consideration for economy and efficiency, and without regard to political or non-economic influences. IOM’s procurement process shall be generally guided by: Efficiency and economy; Equal opportunity and open competition; Transparency in the process and adequate documentation; and Highest ethical standards in all procurement activities.

Contracts will be awarded to the bidder with the lowest compliant offer (offering the best value for money based on required technical specifications), and which has fully complied with the terms of the competitive bidding process. The Mission/Procuring Entity shall ensure timely delivery and satisfactory quality of the goods, construction works or services. When awarding contracts, environmental issues must be considered, particularly for high value construction, or for public service projects which are for the use of the community at large. Contracts will not be awarded to individuals and/or entities associated with terrorists or terrorist acts or any criminal background. As part of the UN Security System, IOM has access to, and is apprised of, proscribed individuals and/or entities as contained in the Consolidated List maintained by the 1267 Committee of the UN Security Council Counter Terrorism Committee (CTC). The Mission/Procuring Entity shall satisfy itself with regard to the non-involvement of suppliers and/or implementing partners in terrorist and/or criminal activities by ensuring that such entities are not included in the 1267 Committee proscription lists, which may be accessed through the Committee’s website (https://www.un.org/sc/suborg/en/sanctions/un-sc-consolidated-list). Certain donors may require conformity with their own proscription lists and this should be taken into consideration prior to contracting with suppliers or implementing partners. 4.6 Non-exploitation of Child Labor The Mission/Procuring Entity shall satisfy itself with regard to the non-exploitation of child labor and in respect to the basic social rights and working conditions of Bidders/Suppliers/Contractors/Service Providers. During the competitive bidding process (See Section 6.2.3 below), all tender documents must provide a clause acknowledging non-exploitation of child labor. 4.7 Vendor Eligibility In accordance with principles of impartiality and competition, participation in the IOM procurement process and awarding of procurement contracts shall normally be open to all companies/individuals and shall be free of any interference or conditionality. Eligibility requirements in tender documents should be limited to those necessary to ensure capability to fulfill the contract.

9

4.8 Procurement of Second Hand/Used Goods IOM will purchase new goods where possible. IOM may purchase used goods, provided they are approved by the COM or HOO based on written justification and inspected by a competent authority (staff or consultant) to verify satisfactory condition or require certification with relevant warranty from the supplier of the current condition of the purchased second hand goods in case inspection is not possible. 4.9 Internal Controls – Segregation of Duties The COM or HOO should maintain an appropriate segregation of duties to ensure a sufficient level of internal control. While large offices will have Procurement Officers, even in small offices, purchasing duties will be centralized in a Procurement Focal Point, segregated from the users of the goods/ construction works/services provided. Procurement documents will be reviewed and signed by someone independent of the person that drafted or prepared these documents. Normally, this is the COM or HOO. The accounting and cash disbursement functions should be separate from the procurement and receiving functions. Payment to vendors/suppliers/contractors should not be handled by Procurement Staff. If segregation is not possible due to office size, the COM or HOO will install controls such as spot checks of goods received, documented market price checks, vendor verification of payments received. Contact GPSU for assistance. 4.10 Organizational Structure

The Global Procurement and Supply Unit (GPSU) in Manila is responsible for maintaining the procurement policies and assisting offices, particularly in the area of international procurement. GPSU is responsible for updating the policies, and assist with training and dissemination of procurement best practices, under the direction and supervision of the Director, Manila Administrative Centre (MAC). The COM or HOO is responsible for procurement in his/her offices, delegating signing authority to Senior Staff only when necessary (leave, travel, etc.). In case of large Missions where a professional Procurement Officer is in place, COM may delegate many functions to this senior official, while retaining overall supervision and authority. In smaller offices, the COM or HOO will designate a staff member or unit as the procurement focal point. This will be someone other than the COM or HOO to keep procurement and approval functions separate. In case mission is doing procurement on behalf of another mission same procurement process applies as defined in this manual. 4.11 Procurement Threshold The Procurement Threshold establishes the minimum procurement process and authorization levels that all missions/departments are required to observe for all purchases. A COM may

10

set lower authorization caps than those below if deemed warranted having regard to the prevailing conditions and procurement environment of the mission. The key threshold separating the basic, simpler procurement process from a more thorough review is set at USD 100,000, and this is also the amount above which GPSU endorsement is required. Multiple purchases of similar goods within a 30-day period will be grouped when applying this threshold. In case of Lease or LTA the total estimated contract price for the total lease/ contract period shall be subject to the Procurement Threshold. 5.0 BASIC PROCUREMENT PROCESS (BELOW USD 100,000) 5.1 Purchase Requisition Purchase requests will be initiated by a Purchase Requisition Form (See Attachment 18.1). The form will include justification for the request and include specifications, cost, and project code/ project budget line (WBS fifth level element). Before proceeding with the purchase, the form should be signed and authorized by the Project Manager, RMO, COM or HOO. The project manager must also sign if (s) he is not the COM or HOO. Regarding PRISM, purchase requisition information should normally be entered in the system. Purchases over USD 3,000 require three quotations/proposals, documented by quotations/proposals from three different vendors, except under the instances sited in 6.2.1 below (Sole Sourcing) 5.2 Evaluation of Quotations /Proposals Quotations/Proposals must be evaluated for compliance with specifications, delivery schedule, price, payment terms and after-sales service. The purchase will be awarded to the lowest compliant offer (duly signed, stamp or official company email address), offering best value for money based on required technical specifications. For procurements requiring technical evaluation (e.g. IT equipment, construction related projects, consulting services, etc.), the Mission will ensure a qualified person(s) - staff, consultant, or committee - is consulted prior to award of PO/Contract. Quotations will be summarized using the Bids Analysis Summary (See Attachment 18.2). The Bids Analysis Summary, supported by the actual quotations/proposals, should be signed by the Project Manager, RMO and COM or HOO. 5.3 Purchase Documentation (Purchase Orders) Following approval of the Bids Analysis Summary, a Purchase Order (PO) (Attachment 18.3) will be prepared in PRISM for all purchases. A soft copy of PO, including PO terms and conditions, is also available on IOM’s intranet or from GPSU and should be generated and approved from SAP-PRISM. The PO features standard terms and conditions, including: IOM’s right to audit vendor documents related to IOM transactions. This is important

where project services or implementation is outsourced. A penalty provision for delayed goods and/or for services (example repair works). An arbitration clause. Disputes which cannot be settled amicably go to arbitration under

the UNCITRAL conciliation/ arbitration rules (www.uncitral.org)

11

PO standard terms and conditions should be accepted by the vendor/supplier/contractor. A contract should be used for procurement requiring more extensive terms and conditions not covered by the standard PO. See section 7.0.c for more details on when to use a contract. Where a supplier insists on terms different from the terms and conditions in the standard PO, then these must be approved by GPSU and LEG. Similarly, where, PO clauses are considered by the Mission not appropriate for a particular purchase, changes must be coordinated with GPSU and LEG. Where donor agreements oblige IOM to adhere to donor specific procurement process and documentation requirement, IOM shall comply without prejudice with the IOM minimum requirements. If required by donors, contract award information may be published on a website or in a publication, keeping in mind IOM Data Protection Principles outlined in IN/138: Data Protection Principles. Ensuring compliance with such publication requirements falls under the responsibility of the IOM mission managing the project. 5.4 Acceptance of Procured Goods, Construction Works or Services

The specifications, quantity, and price of received goods, construction works or services must be carefully checked against the delivery receipt and PO/Contract. IOM reserves the right to reject goods/ construction works/services not matching the PO/Contract. For the technical goods/equipment, Procurement Staff should facilitate the acceptance in coordination with the end user and after complete inspection by a qualified Technical Staff. For goods with an expiration date, the delivered items should be checked to ensure they are within the shelf life indicated in the PO/Contract. Evidence of receipt or inspection should be noted on the Delivery Receipt (DR), including signatures of the receiving or inspecting staff. Similarly, Construction Works and Services should be confirmed by qualified Technical Staff before final acceptance. 5.5 Vendor Verification To ensure vendors have sufficient experience and expertise, they shall undergo a verification process when a long-term (six months) relationship is foreseen, during the bidding/tender process, quality or timeliness is vital, or when referred by related parties (donors, consultants, government counterparts etc.). Verification consists of obtaining two references from customers and/or a favorable visit to the vendor’s office or facilities. Documentation should be kept within the procurement files. Please refer to Vendor Information Sheet (VIS) (Attachment 19.6). 6.0 PROCUREMENT OVER USD 100,000

The Procurement planning, budget consideration, technical specification ToR, procurement methods, contract terms and conditions are essential for all procurement types regardless of the threshold amount. In preparing the procurement requirements, the following shall be considered:

12

6.1 Procurement Planning Development of a procurement plan is encouraged for larger and more complex procurements. The plan guides management in the bidding and contracting process, serving as a reference in project monitoring and resource management. The involvement of a Procurement Staff at the early stage of project development is encouraged, particularly in large and more complex procurement activities. The Procurement Specialist can provide a realistic timeframe for the procurement and implementation of contracts. Important inputs can be provided that can help in the budget preparation. Early coordination among stakeholders can be facilitated. The plan normally includes at least the following: WBS/ Project Code/Source of Fund Procurement Method Description of Requirement (Goods/ Construction Works/Services) Delivery Terms Contract Completion Payment Schedule

a. Budget Consideration Procurement planning should be done in a budgetary context following requirements listed in respective project budget(s) and, considering the mission’s funding priorities. Before proceeding, funds availability must be ensured and endorsed by relevant admin finance staff/ RMO and Project Manager/COM/HOO. This is done during the Purchase Requisition process.

b. Technical Specifications/Terms of Reference The Technical Specifications for Goods and Construction Works, and Terms of Reference for Services determine the deliverables for the Vendor. Within the Mission, the Requesting Unit/Staff shall be responsible in preparing the technical specifications of the goods/ works required, in consultation with all stakeholders and the Mission’s Procurement Focal Point. In preparing the technical specifications, the Mission may refer to the following general principles:

1. The description should be generic and not product specific or seemingly tailored for a particular brand, product, contractor or consultant, unless the procurement involves products or services that have intellectual property rights attached to it, or are exclusively offered by a single source, and there are no suitable substitute products or services available in the market;

2. The description should be clear and unambiguous, to avoid confusion and

facilitate the evaluation process. Please note that the technical specifications, scope of work and terms of reference are used as basis for evaluation;

13

3. Specifications shall include only the basic minimum essential features that the end-user particularly require; they should NOT include features that are considered non-essentials-i.e., ‘those features that are considered nice to have but we can do without’- as these can be misconstrued as essentials;

Changes in technology or changes in the industry or field of expertise should be taken into account when writing the specifications. This allows the mission to procure the latest products and/or services available in the market. For procurement of IT equipment, purchase request will contain all relevant technical specifications in accordance with the latest ITC standards.

c. Procurement Methods As a general rule, all IOM procurement for goods, construction works and services shall be through low value procurement/shopping or competitive bidding depending on the amount and nature of the requirement under consideration. Under specific circumstances competition may be waived (see procurement method sole source below).

d. Contract Terms and Conditions All terms and conditions of the contract should already be identified and approved by LEG according to IN99 rev 2 during the planning phase. This should be included as part of the procurement documents such as the Request for Quotation/Proposal, and Bidding Documents.

6.2 Procurement Methods

6.2.1 Sole Sourcing (use depends on specific criteria described below) Sole Sourcing is contracting without competition, and is appropriate in the following circumstances:

Procurement Value is less than USD 3,000 ;

Vendor is the exclusive manufacturer or distributor of the goods, where no other

equivalent items available; In this case, the vendor must present a certificate of exclusive distributorship from the principal company manufacturing the product;

When there are less than three vendors in the vicinity, if two vendors are available

then mission should collect two offers, and the mission deemed it more reasonable to source the goods/services locally;

When there is a valid and ongoing corporate agreement or Long Term Agreement

(LTA) between IOM and the vendor; which is reviewed annually against offers of at least two other vendors;

A change of vendor has detrimental/negative effects on product quality (e.g.

printing services), warranty or after sales services of existing equipment;

14

A change of a vendor would involve significant additional cost that offset the

benefits of such change Placing a repeat order within 6 months from the date of the last order, provided

technical specifications, prices, terms and conditions remain similar and continue to be advantageous. Repeat Orders shall not exceed the amount of the previously approved PO;

When the only option is to purchase through established UN electronic

procurement sites – e.g., United Nations Office for Project Services (UNOPS) www.unops.org;

Upon obtaining approval of the Director, MAC in designated L1-L3 emergencies

or in other exceptional circumstances. The conditions and applicability of such exceptional processing permissions will be confirmed during the approval process. These procedures should be strictly observed and documented with mission explanation of the conditions that lead to such exception request; or

Donor procedures mandate a more stringent requirement or appoint in writing a

specific Implementing Partner Vendors contracted without competition must be evaluated regularly in terms of price competitiveness and contract performance. As with other procurement types, endorsement/clearance by GPSU is required for procurements that are USD100, 000 and up, when sole source method is employed.

6.2.2 Low Value Procurement/Shopping (permitted up to USD 300,000) Low Value Procurement/Shopping is a procurement method based on comparing price quotations/proposals obtained from several vendors/suppliers (in case of goods), service providers (in case of services) and from several contractors (in case of civil works), with a minimum of three, to assure competitive prices, and is an appropriate method for procuring readily available off-the-shelf goods or commodities with standard specifications, and civil works and other services of small value. Requests for quotations/proposals shall indicate the description/specifications and quantity of the goods or scope of work or terms or reference of services, as well as desired delivery time/completion time and place. Quotations may be submitted by letter, facsimile or by electronic means.

Quotations/Proposals shall be evaluated in terms of specification/technical compliance, delivery schedule, price, terms of payment. The contract shall be awarded to the lowest compliant tender offer, (offering best value for money based on required technical specifications). The accepted offer’s terms shall be incorporated in a Purchase Order or Contract. After the quotations/proposals have been received and evaluated, and before a final decision on the award is made, the Mission/Procuring Entity shall furnish to GPSU ,

15

in sufficient time for its review, an evaluation and comparison of the quotations/proposals, and the proposed recommendation for award. Procurement documents such as approved Purchase Request, issued Request for Quotation/Proposal, Copy of Quotations/Proposals and Bids Analysis are suitable for this purpose. GPSU will provide clearance unless it is determined that the intended award would be inconsistent with IOM policies, in which case GPSU shall promptly inform the Mission stating the reason for such determination. This does not limit the Mission/Procuring Entity to apply a Competitive Bidding if deemed appropriate following processes in 6.2.3.

6.2.3 Competitive Bidding (required over USD 300,000) Competitive Bidding is the accepted method used by all commercial and public entities for procurement involving contracts which are large and/or complex in nature. Competitive Bidding may be opened to local or international bidders, depending on the requirements of the goods/ construction works/services being bided out. The purpose of Competitive Bidding is to provide all eligible and qualified potential bidders with adequate notification of the Mission/Procuring Entity’s requirements and to give them equal access and a fair opportunity to compete for contracts for required goods, works and services. Bidding opportunities therefore must be advertised (newspaper or IOM website or both) and all eligible bidders given reasonable possibilities to participate. A Competitive bidding requires formal bidding documents which are fair, non-restrictive, clear and comprehensive. The bidding documents and technical specifications relating to the project should clearly describe the criteria and methodology for evaluation of bids and selection of the successful bidder. A Bids Evaluation and Awards Committee (BEAC) shall be established by the COM to conduct the bidding process as outlined in 6.4 below. The BEAC shall evaluate the bids and submit the recommended procurement option to the Chief of Mission (and then to GPSU) for approval. The BEAC members shall be free of any conflicts of interest and will sign a Declaration of Non-Conflict of Interest (see 6.4). Bids shall be opened at a time and place specified in the bidding documents, in the presence of the bidders or their representatives who wish to be present. The name of the bidder and the total amount of each bid should be read aloud and recorded when opened. Bid Proposals shall be evaluated on the basis of the following: 1. Preliminary Evaluation of Bids – This involves verification of vendor’s

documents and compliance with administrative requirements 2. Technical Evaluation – Those that passed the preliminary evaluation will be

evaluated for technical compliance, including compliance with the specifications of the goods including schedule of requirements (quantities, delivery sites, etc.).

3. Price Evaluation – The price proposals of vendors that passed the technical evaluation shall then be evaluated. The lowest compliant offer will be selected.

4. Post-qualification of Bidders – A final check on the qualifications of the selected bidder will then be done. The bidder must meet appropriate standards verifying

16

administrative and operational capacity as well as sufficient financial resources. The lowest compliant offer will be awarded the PO or Contract.

The Mission/Procuring Entity should award the contract within the period of validity of the bids, to the bidder whose bid has been determined to be the most responsive bid. A bidder should not be required, as a condition of the award, to undertake responsibilities for work not stipulated in the specifications in the bidding document or to modify his/her bid. All proceedings shall be properly documented. It is recommended that the donors are kept informed about the procurement process/bidding activity.

6.2.3.1 Competitive Bidding/Public Tender with Local Publication The Local Competitive Bidding is most appropriate for procurement requirements, which by their nature or scope is unlikely to attract foreign competition because contract values are small, works are scattered geographically or spread over time, works are labor intensive, or the requirements are available locally at prices below the international market, or there are other technical, financial or administrative considerations that require the bidding to be conducted locally. The time limit for receipt of tenders shall be determined by the Mission/Procuring Entity. Common practice is between 21 and 30 days from the date on which it the procurement opportunity has been published. 6.2.3.2 Competitive Bidding/Public Tender with International Publication International Competitive Bidding is most appropriate for procurement requirements that involves higher amount and requires foreign competition. The time limit for receipt of tenders shall be determined by the Mission/Procuring Entity. Common practice is between 30 and 45 days from the date on which the procurement opportunity has been published.

6.2.3.3 Procurement Notice When employing Local Competitive Bidding, the Mission/Procuring Entity should advertise the procurement notice in a newspaper of national circulation and/or through the Mission’s website. When employing International Competitive Bidding, the Mission/Procuring Entity should advertise in a newspaper of national circulation and/or through the Mission, IOM and Donor’s website.

6.3 Request for Quotations/Proposals and Bidding Documents a. Request for Quotations/Proposals

Request for Quotation (RFQ – Attachment 19.2) applies to the procurement of Goods and for Construction Works (RFQ – Attachment 19.3) and Request for Proposal (RFP

17

– Attachment 19.5) applies to the procurement of Services, and may be used for small requirements. Quotations/Proposals should be requested by letter, fax, telex, electronic messaging, or any available written form. The request may include the description and quantity of the goods/materials for works, and terms of reference for services, as well as the required delivery time and place, including any installation requirements and relevant warranties. The request must indicate the date by which the quotations or proposals are needed. For civil works, quotation should be requested in the form of unit rate prices if work quantities are available with a reasonable degree of reliability, or in the form of a lump sum based on cost estimates carried out by the Mission, or if not possible, by the Contractors.

b. Bidding Documents

Bidding documents are issued by the Mission/Procuring Entity to provide prospective bidders with the necessary information they need to prepare a responsive bid. The bidding documents should clearly define the following: objectives, scope and expected outputs/results of the requirements, technical specifications/terms of reference, scope of work/services, required quantities and completion period, obligations of both parties and the required eligibility, documentation and requirements for submitting a bid. Bidding Documents are used for competitive bidding or projects where the requirements must be in great detail. The complexity of the documents may vary, but generally contain the following:

1. Invitation - is used to invite potential bidders to present their bids for the subject procurement. The Invitation provides for the general description of the requirement, qualification criteria and information on the bidding activities to be conducted. Completion period for works and services may also be provided. The same text is posted in the website or newspaper.

2. Instruction to bidders - provides information to bidders regarding forms to be used, procedures to follow, documents to be submitted and timing of bidding activities. This may include: eligibility requirements, procedure for clarification of bids, bid preparation, number of copies submitted, language, pricing, currencies and currency conversion mechanism, instructions for modification and withdrawal of bids, bid submission procedures, bid opening and closing/deadline, evaluation and award of contract procedures, procedure for the correction of mathematical discrepancies, purchaser’s right to accept any bid and reject any bid, notification award and procedures for contract signing.

3. Evaluation & Qualification Criteria - provides criteria that the Mission/procuring entity will use to evaluate the bids and post-qualify the lowest evaluated bidder.

4. Technical Specs/Terms of Reference - provides for the detailed specification of the goods/works or terms of reference for the services.

18

5. Delivery Requirements - provides contract requirements – quantities to be delivered, delivery schedule, delivery sites, delivery conditions, etc.

6. Conditions of the Contract - sets out the terms and conditions of the contract

between the Mission/Contracting Entity and the Vendor/Supplier/Contractor, including the rights and obligations of both parties. IOM internal comments shall be removed from the contract template prior to sending to the Vendors. Please ensure to send the latest template taken from the LEG’s intranet portal(https://intranetportal/Pages/HQ_ODG_LEG.aspx)

7. Sample Forms – provides the forms used by the bidder in submitting the bid.

6.4 Bids, Evaluation and Awards Committee (BEAC) The COM or HOO shall create an Ad-Hoc Bids Evaluation and Awards Committee (BEAC) when the mission would conduct a competitive bidding activity. The BEAC shall normally be composed of 3 members, the RMO, the Project Manager and one staff appointed by the COM/HOO. The Chairman of the Committee is appointed by the COM/HOO. Depending on the nature and complexity of the procurement, and when there are other institutions involved, the BEAC’s members may be larger. The donor may be given a seat on the committee, if deemed necessary. Members should be an odd number to avoid split decisions. The BEAC shall be responsible for the conduct of the bidding. The BEAC shall: advertise and/or post the invitation to bid, conduct a pre-bid conference when necessary, determine the eligibility of prospective bidders, receive bids, open bids, conduct the evaluation of bids, undertake post-qualification of bidders, and recommend the award of contract to the Approving Authority/COM. The BEAC shall ensure that IOM procurement rules are followed. The BEAC may appoint a Technical Evaluator or create a Technical Working Group (non-voting) to advise the Committee as necessary, for example when the procurement is complex and highly technical in nature. The Mission’s Procurement officer or Focal Point will guide and assist the BEAC in the conduct of the bidding, ensuring BEAC members are knowledgeable and adhere to IOM Procurement rules and procedures and will assist with the proper documentation of the entire bidding process. The BEAC shall evaluate bids using the criteria specified in the bidding documents. The Bids Analysis Summary (Attachment 18.2) shall be used to compare and summarize the proposals. Technical evaluation reports together with the other documents such as Minutes of the BEAC Meeting should be attached as evidence supporting the BEAC’s recommendation. This documentation package, once approved by the COM/HOO, will be passed to the Global Procurement and Supply Unit (GPSU) for final review and endorsement. The BEAC may request clarifications where doubts exist about the comparability of the bids or when the information provided by the bidder is ambiguous. Any request for clarification requiring communication with the bidders shall be done in writing and become part of the bid documentation package. The bid evaluation process should be completed within the validity period specified in the bidding documents.

19

Impartiality and confidentiality shall be maintained during bidding. Any BEAC member who has a conflict of interest with a bidder must declare it and withdraw from the BEAC. Prior to convening, BEAC members must sign a Declaration of Non-Conflict of Interest (Attachment 19.13), which will form part of the official documentation connected with this procurement. No information about the examination, evaluation or decision about the award will be disclosed before contract signing. Any documented attempt by a bidder to influence the outcome of the process may result in disqualification (see section 4.4 Sanctionable Actions). See Annex 20.2 for a more detailed guide through the BEAC process. 6.5 Vendor Verification To ensure IOM uses vendors of relevant experience/expertise, the Mission/Procuring Entity shall perform vendor verification in all competitive bidding situations, and also when: Goods and services are continuously/regularly purchased by the Missions; The purchase requires extensive terms and/or performance standards; It is otherwise deemed necessary (e.g. it is crucial that the vendor is reliable in terms

of product quality, service experience, timeliness of delivery, etc.); The purchase requires reliable after sales service.

Missions shall maintain their own PRISM vendor database, using the Vendor Information Sheet (VIS) for input to the database. Vendors’ qualifications shall be evaluated based on pass/fail criteria. PRISM Vendor information shall be updated as needed and vendor evaluation shall be done every two years. PRISM information can help in the evaluation process. Vendors endorsed by donors shall likewise be subject to vendor verification. In the event vendors endorsed by donors fail to pass the verification process, IOM shall inform the donor in writing. IOM may still use the donor-recommended Vendor provided the donor issues an endorsement stating clearly that their endorsement is made after they have been fully informed by IOM of the result of the vendor verification and evaluation process conducted by IOM. IOM, as an International Organization, does not restrict purchases for good/ works/ services based on the geographical origins of goods or nationality of vendors and therefore does not normally apply any specific rules of origin or nationality. Any such donor requirements which could potentially result in restricting the IOM policy must be coordinated with GPSU prior to agreeing on such terms. This may be acceptable in very exceptional circumstances where IOM will follow donor instruction on goods’ manufacturing or port of origin. 6.6 Eligibility/Qualification of Bidders In a competitive bidding, a detailed verification of Vendor is conducted, either through a pre-qualification process for goods and construction works or short-listing process for services, or via a post-qualification. These processes establish the bidder’s eligibility and financial, technical and professional capacity to undertake the contract. The criteria to be used should be stated in the Bidding Documents for this purpose.

20

a. Pre-Qualification

Pre-qualification is useful for large or complex construction works, or where the high cost of preparing detailed bids could discourage competition, such as custom-designed equipment, complex works, complex information technology projects, and design and build-type contracts. This process ensures that the invitation to bid is extended only to those who have adequate capabilities and resources. Pre-qualification shall be based on the capability and resources of bidders to perform a contract satisfactorily, taking into account: a) experience and past performance on similar contracts, b) capabilities with respect to personnel, equipment, and construction or manufacturing facilities and c) financial position.

b. Post-Qualification

Post-qualification is the process of verifying, validating and ascertaining all the statements made and documents submitted by the Bidder with the lowest responsive evaluated bid, which includes ascertaining the Bidder’s compliance with the legal, financial and technical requirements of the bid. In the absence of pre-qualification, vendors qualification is conducted taking into consideration the prequalification criteria. Post qualification involves the determination that the Vendor submitting the lowest responsive evaluated bid has the capacity to perform the contract. If the bidder fails to demonstrate the capability to carry out the contract, the bid is rejected and the next lowest bidder shall be post-qualified.

c. Short listing Process

The process of short listing determines the most qualified Service Provider(s) from those that submitted eligibility documents. This term applies to Procurement of Services.

6.7 Evaluation and Comparison of Quotations/Bids for Goods/ Construction Works/Services Quotations/Proposals, and Bidding Proposals shall be evaluated based on pre-defined criteria outlined in the RFQ/RFP/Bidding Documents. The Bids Analysis Summary (BAS) shall be used to summarize the evaluation results. A technical evaluator may be designated for the evaluation of the technical specifications for any procurement of Goods, Construction Works and Services as deemed required by the Procurement Focal Point or Specialist, or by the BEAC if through a competitive bidding. If a sample was required to be submitted as part of the bid, this should be evaluated by a Specialist or Technical Evaluator and the result should be part of the bids analysis. In case of discrepancy between the written technical specifications and the actual specifications, the latter shall prevail.

21

A vendor verification or post-qualification shall be conducted on evaluated complying bids to ascertain the capability of the Vendors to supply/perform the products/services being required. Where there is a delay in the bid evaluation, the BEAC may request the bidder/s to extend the period of validity of their bids. After a decision to award a contract is made, notice of award should be sent to the successful bidder. Once the contract has been signed and required performance security (if any) has been posted, notice to unsuccessful bidders should be sent. Award of contract may proceed even if there were less than three bids provided the bid/s are responsive based on the technical specifications, and that the price is within market range and within the approved budget. This is also based on the premise that the opportunity has been advertised to the broadest base possible. 6.8 Rejection of All Bids/Cancellation of Procurement Process BEAC may recommend to the COM/HOO to declare the bidding unsatisfactory or a failure when any of the following occurs: The tender process has been unsuccessful i.e. all bids were declared non-responsive to the

requirements or no bid was received at all; Economic or technical data of the project have been fundamentally altered; Exceptional circumstances or force majeure render normal performance of the contract or

project impossible; All responsive bids substantially exceed the financial resources available or substantially

higher than IOM’s in-house estimate; There were irregularities in the process that prevented for a fair competition. Bidders refuse to accept award of contract or does not post performance security within

the period required and there are no other remaining qualified bidders. The Mission (BEAC and COM/HOO), generally in coordination with GPSU, shall make the final decision to declare the bidding a failure. After canceling a tender process, the Procuring Entity may decide either to re-bid the requirement or not to award the contract. BEAC may also recommend to defer the awarding or stop the bidding process when, in their judgment, awarding the contract or proceeding with the bidding process would result to situations harmful, disadvantageous or detrimental to IOM. 6.9 Handling Procurement Complaints/Appeals Inquiries and complaints from Vendors occur from time to time. The Mission/Procuring Entity should provide prompt, careful and consistent response to the vendors/suppliers/contractors having regard to IOM’s procurement policies. The Chairman of the BEAC shall address the complaint if it relates to a competitive bidding. Procurement advice may be sought from GPSU. Complaints brought by bidders on legal grounds should be coordinated with LEG.

22

6.10 Procedures on Conciliation, Arbitration of Contracts/Settlement of Disputes All disputes between IOM and its Vendors should be settled amicably. In case the parties cannot come to an agreement, the dispute must be referred to arbitration in accordance with the UNCITRAL conciliation/ arbitration rules. Clauses on dispute resolution and immunity are included in IOM’s standard contracts and POs. 7.0 PROCUREMENT DOCUMENTATION AND FORMS There are three basic required forms, the purchase requisition (Attachment 18.1), the bid analysis summary (Attachment 18.2), and the purchase order (Attachment 18.3) (or contract). A number of supplemental forms are available in this manual for use by the Mission/Procuring Entity in undertaking various procurement activities, including the conduct of a competitive bidding process. Some of these supplemental forms may be customized/modified to a certain extent due to the local market and legal conditions, and as indicated or provided for on the forms/templates. Detailed guidance on use of the three required forms follows:

a. Purchase Requisition The Purchase Requisition (Attachment 18.1) is a document that is used to indicate the following: justification for the purchase, nature and specifications of required goods/ construction works or services, project code/WBS/budget line covering the purchase, maximum commitment for the purchase and the review and approval process. All purchases must be initiated by a Purchase Requisition (PR). The approved PR must be delivered to the Procurement Focal Point for processing. PR shall be signed by: the staff member making the request (or by another staff on his/her behalf); project manager/senior project staff to verify the need for the purchased item; resource management staff in the mission to ensure funds availability/approval

is obtained from the relevant manager(s); and project budget line indicated; and authorized by the COM/HOO or Designate.

The Requisition must be properly completed, including Technical Specifications, description of goods/services, installation requirements, and warranties. Dates when the goods/services are needed must be indicated to give the Procurement Focal Point time to process the request. Project Budget Line/WBS fifth level element (Project Code) and cost estimate must be indicated to ensure adequate funding coverage. Preparation of the Requisition is the responsibility of the Requesting Unit. b. Bids Analysis Summary

23

All Quotations/ Proposals above USD 3,000 will be summarized using the Bids Analysis Summary (See Attachment 18.2). The Bids Analysis Summary, supported by the actual quotations/proposals, should be signed by the Project Manager, RMO, and COM or HOO. c. Purchase Order / Contract

Purchases should be covered by a Purchase Order (“PO” – Attachment 18.3) or Contract signed by authorized signatories, with the exception of petty cash purchases, which should be kept to a minimum. The threshold for petty cash purchases must be determined and established by the Mission depending on local conditions, and the size and frequency of such purchases. The PO terms and conditions may be used for procurement of goods. The PO should be signed/approved by the COM or his/her delegate. In case of default by the Supplier, PO terms and conditions shall prevail; hence it is important that this part of the PO is also accepted/ signed by the Supplier. The PO should be accepted by the Supplier, by signing and providing an official stamp. A contract will be used instead of the PO standard terms and conditions in the following situations: Procurement of goods where amendments to the PO terms and conditions are

required (for example, if there is a complex delivery schedule, manufacturing/technical requirements, ancillary services such as maintenance or training in use of the goods, particular payment terms etc.);

Procurement of goods where a competitive bidding process is used. In this case, the sample Supply Contract (Attachment 19.18) will be included with the bidding documents ;

Procurement of construction/works (Construction Contract at 19.19 to be used) Procurement of services (Service Contract/Agreement at 19.20 to be used) Hire or lease agreements, such as office, warehouse, transportation –including

charter and lease of vehicles

The above have specialized contractual needs and will be coordinated with LEG which provides the relevant contract templates. (Note: services from an individual consultant are covered by IN/84 and not this policy). Please also refer to IN/ 76 detailing the differences between individuals and service providers/ companies. Any Contract to be used should be cleared by LEG before signing in accordance with IN/99. Similarly, any modifications to the standard Contract should be reviewed and approved by LEG before signing. Note: In order to have a budget commitment in PRISM, procurement information commonly found in POs must be entered, whether or not a PO is actually issued to the vendor i.e. when contract is used. Once generated, the PRISM PO Number should be indicated on the PO or Contract for reference. When the contract is signed by IOM and the vendor, the PO shall not be signed or shared with the vendor but shall be simply filed together with the contract in the internal filing system.

24

8.0 ADVANCE PAYMENTS AND SECURITIES/GUARANTEE, REQUIREMENTS Terms of Payment and Bond Requirements for all procurements The field office shall be responsible for negotiating terms for local procurement for all procurement methods. Payment of goods/works/services shall be made following receipt and acceptance of goods/services/work. In case of partial payments, all such payments should be linked to a delivery milestone and should be conditioned to due reporting on the previous instalment. Payments to Implementing Partners should only be initiated in line with the agreed budget, based on verified financial reports and related to agreed and confirmed deliverables. Final payment can be processed only after IOM’s full acceptance of the corresponding goods/works/services. In principle, all advanced payment terms are NOT permitted. In the event an advanced payment cannot be avoided due to exceptional situation, IOM may consider exceptionally agreeing to lowest possible advance payment of up to USD 10,000 subject to the following conditions:

a) In case of advances required for the procurement of goods, construction works or services from suppliers/contractors, the vendor should be duly verified by IOM with Vendor Information Sheet (Attachment 19.6). In case of Implementing Partners, their financial health and liquidity should be positively assessed by IOM during the selection process.

b) All efforts should be made to agree to the lowest possible percentage of advance payment. At any event, at least 10% of the total contract price should be retained until the completion of all works, services or activities and IOM’s receipt of all goods, services as relevant. For the Implementing Partner, this retained amount (10%) shall be only paid after IOM’s receipt and approval of the final report issued by the Implementing Partner.

c) As a way of derogation from point b) above, in case of procuring low value assets, office supplies, insurances, off-the-shelves software licenses, tickets for regular transportation or processing registration fees/periodic abonnement of services up to USD 10,000, the requirement of 10% retention might be waived by the CoM if the local market conditions require so, but all efforts should be made to limit the occurrence of such arrangements.

d) Payment of any advances shall be processed only after IOM has received the corresponding payment instalment from the Donor.

e) Advances should be recorded and regularly monitored on the corresponding vendor account in PRISM, and to be expensed only upon IOM`s acceptance of the corresponding deliverables.

Any other advance payment shall be secured by a Bond or Bank Guarantee from a reputable firm or bank. LEG must approve the wording of the guarantee supplied. Letter of Credit (LC) as a mode of payment, in general, is also discouraged. Any exceptions to the above requirements shall be prior approved by Accounting Division (ACO). Related requests will only be considered in exceptional circumstances and will be evaluated by ACO based on detailed justification submitted by the IOM office to the ACO Contract Review mailbox (acocontractreview@iom.int).

25

No payment shall be allowed, including any advance payment, on the basis of a Notice of Award (NOA – see Attachment 19.21). A Contract or Purchase Order duly signed by both parties is a prerequisite before any payment can be made. Advance Payment in Emergencies In exceptional circumstances, during the declared emergency (Level X) 2 situation, the maximum amounts for advance payments and the level of authority to approve advance payments will be adjusted as follows: (a) A declared Level 1 Emergency: Up to USD 75,000 can be paid in advance upon authorization by the COM or his/her designate; (b) A declared Level 2 Emergency: Up to USD 100,000 can be paid in advance upon authorization by the Director of the competent Regional Office; (c) A declared Level 3 Emergency: Up to USD 150,000 can be paid in advance upon authorization by the Migration Emergency Coordinator (MEC). A MEC decision is to be made within 24 hours of receiving a justified advance payment request. (d) Any advance beyond USD 150,000 can be paid only upon authorization by the Director of DOE in coordination with MAC and DRM. A decision for the above mentioned exceptional advances should be a consultative process involving the Procurement Officer, RMO and the Emergency Coordinator/Chief of Mission. The Emergency Coordinator/Chief of Mission has to justify the need for an exceptional advance payment in writing. Whenever possible, standard protocol - such as ocular visits of suppliers depots, collection of recommendation letters, other related documents and payment terms negotiation - must be encouraged to strengthen association with usual standard operating procedures. Note: Advance Payment procedures applicable to L1-L3 Emergencies are not to be confused with applicable Procurement Thresholds. Any exception to procurement thresholds or applicable procurement method due to emergency requirement is subjected to the conditions detailed 6.2.1 and 11.0 of this Manual. a) Bid Securities

A bid security may be instituted as a condition for bidding. It assures compensation to the mission/procuring entity for time/money lost if a successful bidder fails to honor his bid and enter a contract. Bid securities should not be used for small contracts and should not be high. Normally, a bid security is about 2% of the proposed contract amount. A bid security may be a fixed amount and should be valid at least 30 days beyond the bid validity period. The bid security should be released at the end of the bid validity period, or when the successful bidder signs the contract and performance security is received and verified by IOM.

2 The Emergency situation must be declared by the competent authority within IOM. Level 1 refers to a National Emergency Response, Level 2 refers to a Regional Emergency Response, and Level 3 refers to a Global Emergency Response. The Level 3 is declared by the Director General. Please refer to the Memorandum “IOM Emergency Activation Procedures” issued on 9 December 2011by the Office of the Director General.

26

b) Contract Securities

Contract securities ensure that the vendors/suppliers/contractors will perform their contractual obligations when an award is made. Contract securities may include: security for advance payment, performance security and retention money. These may be provided in the form of a bank guarantee, letter of credit, cashier’s or certified check, or surety bond from a reputable insurance company. Note: A Letter of Credit as a form of security is different from the Letter of Credit as a mode of payment). An LC as a form of security is applied by the Supplier while the LC as a mode of payment is applied by the Purchaser. Performance Security: Performance security is a guarantee to ensure the vendor/supplier/contractor will comply with contractual obligations. It is posted in favor of the mission/procuring entity and is forfeited if the vendor/supplier/contractor defaults on its obligations. The contract should clearly define the types of defaults that lead to forfeiture of the performance security. The security amount should not exceed 10% of the price.

Retention:

For procurement of works and procurement requiring extensive warranty support, the payment terms should include retention of at least 10% of the contract for the duration of the warranty period. The retained amount may be released upon submission of a Guarantee Bond or Bank Guarantee of an equal amount from which IOM can draw if the contractor fails to honor its warranty obligation. Changes to the standard retention clause need to be approved by GPSU and LEG prior signing.

Note: A Bank Guarantee and/or Surety Bond should be approved and checked by LEG in advance to ensure that no onerous terms with which IOM must comply before claiming is provided and that period of validity is sufficient.

9.0 Acceptance of Procured Goods/ Construction Works/Services Delivered goods/ construction work/services and entries in the Vendor/Supplier/Contractor’s sales invoice/delivery docket must be checked against specifications, quantity, price and other terms and conditions indicated in the approved PO/Contract. IOM reserves the right to reject in part or in full deliveries with defects or discrepancies. If an inspection is scheduled at a later date, it should be completed within a maximum of two weeks from the receipt of goods or completion of services. Invoices shall be provided by the Vendor/Supplier/Contractor together with the delivery receipt. Acceptance of goods e.g. equipment particularly IT, communications, medical, etc. should only occur once the equipment has been fully inspected by the appropriate technical staff or tested by the requesting party. Similarly, Construction Works and Services should be confirmed by qualified Technical Staff before final acceptance. Payment for goods/works/services shall be against acceptance. Final payment shall be after acceptance of the goods/works/services.

27

10.0 PRISM as a Procurement Tool The PRISM system expands the information available to users, assisting with procurement management via improved tracking, budgeting and reporting. The Material Management (MM) Module facilitates a comprehensive analysis of IOM’s procurement activities and trends. Information can be retrieved for a particular PO/Contract or Supplier/Contractor/Service Provider, and payments to Suppliers/Contractors/Service Providers are facilitated. Procurement Staff can view the status of payments by PO/Contract or by Supplier/Contractor/Service Provider. The system can also monitor open POs and Goods Receipts, allowing for appropriate procurement follow-up. Currently, the following are done and recorded in PRISM, thus permitting the tracking and monitoring discussed above: Creation of Purchase Requisition Creation and Release of Purchase Order Goods Receipt and Invoice Verification

Many procurement tasks remain outside the system, such as requesting and evaluating quotes/proposals, preparation of Bids Analyses, conducting a competitive bidding process, and the preparation and negotiation of Contracts. Following are some additional features of the Prism: budget control check (not yet fully implemented) cash management tools master vendor data created and maintained in the system integrated internal controls and segregation of duties generation of asset inventory records list payments automatically posted to the accounts without manual intervention.

More details about PRISM can be found on the IOM Intranet. 11.0 Emergency Requirements Urgent/Emergency procurement requirements constitute any situation in which the implementation of an action has to start immediately. Although proper procurement planning will help to avoid most urgent requirements, there will occasionally be situations where there is not enough lead time to conduct bidding activities such as posting invitations, bidding conference, bid submission etc. In these cases, the COM/HOO/Emergency Coordinator, upon prior approval of the Director, MAC, may proceed using the simpler low value procurement/ shopping procedure where three (3) quotations/proposals are obtained or exceptionally sole sourcing. The approval is specific to the procurement request/process. The evaluation of quotations/proposals shall follow the same principle as open bidding via the BEAC. The Mission may also use the existing Long Term Agreements (LTAs) or procure from UN Agencies for this purpose.

28

12.0 Long Term Agreements A Long Term Agreement is a contract between IOM and one or several vendors/suppliers for the purpose of laying down essential terms governing a series of specific contracts to be awarded during a given period, outlining the duration, subject, prices, conditions of performance and the qualities envisaged. 13.0 Procurement of Pharmaceutical Products Missions/Procuring Entities shall follow international norms for procurement of pharmaceutical products and respect patents and drug regulations in countries. Pharmaceutical products should be procured from reputable suppliers. To ensure the quality of the pharmaceutical products and medical devices being procured, the award should be based on pre-certification of potential suppliers. For the procurement method to be applied please refer to the thresholds in this manual. Procurement of medicines shall be based on a pre-qualification scheme (see www.who.int/prequal/info_applicants/procagencies/prequal_procagencies.htm) from the World Health Organization (WHO) or In-Country Regulatory Authority. The Mission/Procuring Entity may consult the International Drug Prices Indicator such as IDA Catalog (www.idafoundation.org) where feasible. When comparing the costs of pharmaceutical products, the cost of the whole treatment, not just the cost per unit, should be considered. Since the choice may be influenced by other factors such as transportation charges, storage requirements and shelf-life (expiration dates are important for medical drugs, vaccines, etc.), the total cost should be considered. It is recommended that MHD is consulted prior to the selection and procurement. For reference and additional guidance on the complete process and implementation for procurement of medical and pharmaceutical products please refer to the Annex 20.5. 14.0 Procurement of Food Products Food products to be procured shall as much as possible match the nutritional habits of the beneficiary population. The product characteristics and their packaging shall respect the quality and standards laid down in the domestic legislation of the country of origin and country of destination, whichever legislation has the higher quality standards. When the object of the contract is the supply of fresh foods and the contract is divided into several lots taking into account the seasonal availability of products, each one of the lots shall be considered individually, and not aggregated. 15.0 Procurement of Construction Works Taking into account the complexity of the construction works implementation, Missions should secure proper technical expertise (civil engineer, etc.) from the start of the project through to its completion and final acceptance. This technical expertise will assist with developing a realistic implementation plan, and provide support in all project implementation phases such as the pre-procurement preparation (design, etc.), bidding process, actual construction and acceptance of the completed construction works. Likewise, Missions should

29

insure that all financial resources are secured, confirmed and available for immediate implementation and that there is also a proper coordination system in place with all stakeholders involved in an implementation of the construction project, such as Donors, Government Representatives, Beneficiaries, Project Manager and COM. The emphasis should be put on Detailed Engineering investigations/studies, surveys and designs, including the environmental impact of a particular construction project. In some special cases where a Mission deems it not practicable to prepare a detailed engineering design itself, this requirement can be sub-contracted and included in the request for bids. Mission should ensure that a preliminary engineering study, which includes technical viability, conformance of land, design standards, government permits, or any additional specific recommendation are completed and confirmed by the technical expert prior to advancing to the next stage of Detailed Engineering. Usage of health hazard materials (example asbestos, lead, lead based paints) during the construction is not allowed. All timber/wooden materials, product used for the construction must come from a legal source. For easy reference and additional guidance on the complete process and implementation for infrastructure projects please refer to the Annex 20.1 of this document. 16.0 Use of Procurement Centers Missions/Procuring Entities may use the services of Procurement Centers, particularly for specialized products and in locations where suppliers are limited. Procurement Centers are non-profit agencies specialized in technical/commercial management of supplies/services for humanitarian actions and same as IOM they should follow international procurement standards in their procurement processes. . They may provide technical assistance or supply pre-established stocks, purchasing or logistics capacity. Specialized supply/procurement departments of the UN and other International Organizations can be recognized as Procurement Centers (UNDP, UNOPS, UNICEF etc.)

17.0 Asset, Insurance, Offsite Storage, and Records Management 17.1 Asset Control and Insurance Assets with a useful life greater than one year should be tagged, inventoried and insured by the mission. If donor agreement require a lower or more comprehensive threshold, the more comprehensive threshold prevails. For more information on IOM Asset Management please refer to CAS- Asset Management at cas-assetmanagement@iom.int. Goods in transit should be properly insured. 17.2 Offsite Storage IOM may contract with an outside agent for off-site storage to facilitate operations. Sourcing of service providers will be governed by this policy. The COM/HOO will ensure goods are secured; transactions are recorded; detailed inventory records are maintained and annually reconciled against physical counts; and that the facility complies with minimum security standards.

30

17.3 Records Management Missions must ensure proper filing and safekeeping of procurement documents, including Vendor Information Sheets (VIS), Purchase Requisitions, all bidding documents, as well as copies of quotations, proposals, bids analysis summaries, PO’s, receiving documents and payment documentation. Documents will be retained for 7 years, unless otherwise specified by the donor.

31

18.0 Required Forms

18.1 Purchase Requisition (PR) 18.2 Bids Analysis Summary (BAS) 18.3 Purchase Order with Terms and Conditions (PO)

19.0 Supplemental Forms

19.1 Request for Quotation (RFQ) 19.2 Request for Quotation (RFQ) with General Instructions to Suppliers (GIS) 19.3 Request for Quotation (RFQ) with General Instructions to Contractors (GIC) 19.4 Request for Expression of Interest (REI) for Services (CS) 19.5 Request for Proposal for Services 19.6 Vendor Information Sheet (VIS) 19.7 Vendor Verification and Evaluation Form 19.8 Eligibility Notice 19.9 Non-Eligibility Notice 19.10 Bidding Document for Goods 19.11 Bidding Document for Works 19.12 Bidding Document for Services 19.13 Declaration of Non-Conflict of Interest 19.14 Bidders’ Registry 19.15 Abstract of Bids 19.16 Minutes of the Bid Opening 19.17 BEAC Resolution 19.18 Contract for the Supply and Delivery of Goods 19.19 Contract for Construction works 19.20 Services Cont