The mighty ones rely on e-procurement – United Nations
A procurement platform is a solution that gives so many possibilities that even the largest international organizations use it for sourcing of products and services. Ever greater sourcing needs of such institutions result in the fact that only globalization of the delivery market and the possibility to perform objective comparison of offers from all over the world ensures them stable operation at a satisfactory level.
The United Nations is one such international giant. Annual purchases made by the UN amount to over US 17 billion, and this value is gradually growing. The majority of over 30 agencies within this organization uses the procurement platform called the UN Global Marketplace. Some of them make available their own solutions used for conducting sourcing proceedings if they do not use the UNMP.
Over half of the funds spent by the UN on sourcing falls to five product groups:
• air transport services (18,9%, USD 584 million)
• chemicals and oil derivative products (17,6%, USD 544 million)
• food rations and catering services (14,4%, USD 446 million)
• freight and delivery services (6,2%, USD 192 million)
• services connected to architecture, engineering and construction (5%, USD 153 million)
* based on 2015 data (https://www.un.org/Depts/ptd/statistics/2015)
The largest business partners of the UN are enterprises from the United Arab Emirates (total value of contracts amounts to USD 635,896,619), USA (USD 471,539,013) and Russia (USD 232,160,525). For comparison, in 2015 enterprises from Poland made only USD 72,852 on contracts with the UN, which amounts to a minute per mill of the funds the UN spends annually on purchases of products and services.
UNGM has a relatively simple registration system, which in order to facilitate various-sized enterprises’ participation is divided into three levels, according to the value of the contract that the registering enterprise is capable of fulfilling:
Basic level – the estimated value of the procurement amounts to less than USD 40,000;
Level 1 – the estimated value of the procurement amounts to up to USD 500,000;
Level 2 – the estimated value of the procurement amounts to over USD 500,000.
Every supplier who wishes to collaborate with the UN must meet the terms and conditions indicated in the “UN Supplier Code of Conduct”. Among other things, it contains a prohibition to use child labor and to being involved in corruption. Such a large international organization, which defends human rights, cannot afford to collaborate with suppliers who break its rules.
What is important, the UN does not use the “100% price” criterion, but rather uses the quality to price ratio. Therefore a tender can be won by an enterprise which offers products or services slightly more expensive than those of their competition’s, but also better in terms of quality. This is a great facilitation for Polish enterprises, which offer products of high quality, although more expensive than products originating, for instance, in China. Nevertheless, only a minute per mill of Polish enterprises is interested in participation in UN tenders. As UN Secretary General Initiative Global Compact Poland’s General Director, Kamil Wyszkowski suggests, the reasons for such a state of affairs are mostly mentality related. The necessity to write an application in English as well as insufficient preparation of the majority of Polish enterprises to participate in the global market are the main obstacles. True, the situation has been changing and several dozens of Polish companies actively participate in tenders on the UN’s sourcing platform, but still this area of the market is practically undeveloped by national suppliers.
A procurement platform is a universal tool, which produces numerous benefits. This has been noticed by the United Nations and its suppliers. We hope that also Polish enterprises will notice the benefits of using this solution. Not only on the international market but also, or perhaps mostly, in their everyday operations.