If anything, the importance of procurement and why it operates on defined rules was highlighted by the COVID-19 pandemic. Governments and organizations had to exponentially increase their efforts to provide infrastructure, goods, and services tailored to the urgency of the pandemic, meaning the train of works procurement and the process, in general, could not be stopped but rather accelerated. Governments worked their way around the circumstance by making swift legal amendments and policy changes that helped create an environment for procurement to thrive more than ever. 

In moments like this, UN staff are reminded of the importance of procurement’s fundamental principles and how they are helping institutions navigate the pandemic.

The UN Procurement Manual sets forth the 4 cardinal principles and 1 key notion that should be given due consideration when procuring goods, services or works. Check them out: 

1.   Best value for money

While it is worthy to note that best value for money does not impose the notion of lowest cost, it does imply that as much as possible, the total cost of ownership and quality required to meet the user’s stipulations.  

• Strive to maximize competition;
• Plan for demand promptly and define an acquisition strategy based on an analysis of the demand and supply market;
• Ensure that all costs are considered within the total cost of ownership, including transportation costs, installation costs, operating costs, maintenance costs, disposal costs, etc.;
• Ensure that benefits are optimized, and financial and operational risks and any other adverse impacts are minimized;

2.   Fairness, integrity, and transparency 

These three principles are bundled together because they mirror the similar qualities of good faith and goodwill in transactions. 

Fairness, as a principle, means the procurement process is free from preference, judgement, self-interest, and favouritism. 

Integrity here holds the transacting parties to rectitude, decency and honesty in their actions, and is reflected by adherence to accepted moral and ethical standards. 

Transparency is mirrored by putting in place mechanisms that ensure audition, compliance to established rules, and healthy open communication. 

3.   Effective international competition

This is the culmination of the two aforementioned principles, and is concerned with the maxim of ‘right time, right quality, right price.’ The principles stand on three pillars;

• Adequate notification should be given to as geographically broad as possible vendor community to ensure that there is sufficient time to participate in the procurement processes;
• There should be no restriction of competition through over-specification;
• Economies of scale can be achieved when procurement volumes for identical or similar requirements are consolidated in a single solicitation. 

4.   The interest of the Contractor 

This principle requires the procurement official to give due consideration to the interest of their contractor when exercising procurement functions.

5.   Client centricity

 Going from the perspective that all procurement activities serve and will continue to serve the ongoing and future requirements of the contractor, procurement officials are therefore expected to adopt a client service approach and maintain proper client orientation throughout the procurement process.

For more details on these principles and tips on how to effectively carry them out, sign up for our works procurement course.