Francisco A. Laguna & Wojciech Kornacki
Each year, the United Nations Organization (“UN”) spends billions of dollars to support various missions and development projects around the world. This creates numerous and ongoing international business opportunities for entrepreneurs willing to understand and operate within the UN procurement system. The last decade shows that UN spending is only going to increase.
United Nations Basics
The UN is an international organization consisting of 193 member states. It is organized into approximately 30 different specialized agencies, funds and programs, and each entity has its own procurement needs.
The mission of the UN is to preserve international peace and security, promote human rights and disarmament, and to take action to address health and humanitarian emergencies, terrorism, climate change, and sustainable development, among others. This is primarily done by humanitarian missions, peacekeeping operations and various development projects, all of which require billions of dollars in annual expenditures on services and supplies. The UN and its entities operate around the world. Its four headquarters are located in New York, Vienna, Geneva and Nairobi.
United Nations Procurement of Goods and Services
According to the 2014 Annual Statistical Report on United Nations Procurement, the overall procurement needs of the UN exceeded to $17 billion in 2014. The United Nations Office for Project Services (“UNOPS”) reports that between 2004 and 2014, UN procurement needs increased by about $10 billion. This shows that UN expenditures are likely to grow in the future.
In 2014, the UN spent approximately 52 % of its total expenditures on services and 48 % on goods. The three most active organizations with the greatest procurement needs were the UN Children’s Fund (“UNICEF”), the UN Procurement Division (“UN/PD”) and the UN World Food Programme (“WFP”) The United States is the greatest supplier of goods and services to the UN covering approximately 9% of all of UN needs. India, Afghanistan, Belgium, and Switzerland follow. Currently, there is a movement within the UN to procure more goods from the developing countries.
UN procurement in developed and developing countries is different. In the developed countries, UN entities primarily focus on procuring information technology and telecommunications, financial and insurance, testing equipment, motor vehicles and parts. In the developing countries, the UN procures personal care goods, domestic appliances, educational equipment, fuels, humanitarian aid services, and rural development services. It is important to note that each UN entity has its own specific needs in different countries.
UN Procurement Opportunities
The UN Procurement Division divides business opportunities into Expressions of Interests (“EOI”), Requests for Information, (“RFI”) and Tender Opening Schedule. Expressions of Interests are company responses to UN planned solicitations. Requests for Information allow the UN to assess vendor capabilities and assist companies in preparing them for the planned procurements. Tender openings mean formal openings of sealed bids or proposals. The first step in taking advantage of the opportunities is to register.
Being successful in UN procurement necessitates careful attention to detail and a clear understanding of the organization’s requirements. Call TransLegal with your questions concerning UN procurement opportunities.