Procurement Manual IFRC

PROCUREMENT MANUAL
Document reference number: 093
Document Authorisation
Date
Stakeholder Name Position Signature
approved
Author Armen Petrosyan Procurement Unit Manager
Document Birgitte Olsen Head of Global Logistics Service
Owner
Document Bekele Geleta Secretary General
Authoriser
Document Legal Department
Stakeholder
Finance Department
Human Resources Department
Administration Department
Information System Department
Version number: 1.2

Authorization date: 1 January 2012
093_e_v120_procurement manual.docx Page 1 of 94
Table of contents
INTRODUCTION ...................................................................................................................... 5
1. GENERAL ........................................................................................................................ 6
1.1. Purpose of the manual ............................................................................................... 6
1.1.1 Procurement within the International Federation ................................................ 6
1.1.2 Objective of the manual ...................................................................................... 6
1.1.3 Target audience .................................................................................................. 6
1.1.4 Content of the manual ........................................................................................ 6
1.1.5 Amendments and revisions to the manual .......................................................... 7
1.2. General principles and ethics ..................................................................................... 7
1.2.1 Principles of conduct for procurement staff ........................................................ 7
1.2.2 Principles of conduct for suppliers and service providers ................................... 8
1.2.3 Social and environmental considerations in procurement .................................. 9
1.3. Roles and responsibilities according to authorization levels .................................... 10
1.3.1 General ............................................................................................................. 10
1.3.2 Roles and responsibilities of procurement entities ........................................... 11
1.3.3 Geneva Committee on Contracts ..................................................................... 15
1.3.4 Local Committees on Contracts........................................................................ 16
1.3.5 Authorization steps throughout the procurement process ................................ 17
2. THE PROCUREMENT PROCESS................................................................................. 21

2.1. Overview of the process ....................................................................................... 21
2.1.1 General ............................................................................................................. 21
2.1.2 Procurement planning....................................................................................... 21
2.2. Supplier management ........................................................................................... 22
2.2.1 Sourcing............................................................................................................ 22
2.2.2 Supplier database ............................................................................................. 24
2.2.3 Supplier evaluation ........................................................................................... 26
2.2.4 Supplier quality assurance ................................................................................ 27
2.2.5 Removal from the supplier database ................................................................ 27
2.3. Framework agreements......................................................................................... 28
2.3.1 General ............................................................................................................. 28
2.3.2 Establishment of framework agreements ......................................................... 29
2.3.3 Use of framework agreements .......................................................................... 29
2.4. Requisitioning supplies and services .................................................................. 30
2.4.1 General ............................................................................................................. 30
2.4.2 Issuing a logistics requisition ............................................................................ 30
2.4.3 Receiving a logistics requisition ........................................................................ 31
2.5. Solicitation.............................................................................................................. 32
2.5.1 Types of document ........................................................................................... 32
2.5.2 Types of solicitation .......................................................................................... 32
2.5.3 Selection of suppliers or service providers for solicitation ................................ 33
2.5.4 Preparing requests for quotation and requests for proposal ............................. 33
2.5.5 Amending requests for quotation and requests for proposal ............................ 38
2.6. Exceptions to calling for bids or proposals ........................................................ 38
2.6.1 Approved exceptions ........................................................................................ 38
2.6.2 Use of exceptions ............................................................................................. 39
2.7. Submission and receipt of bids ............................................................................ 39
2.7.1 General ............................................................................................................. 39
2.7.2 Receiving bids .................................................................................................. 39
2.7.3 Opening of bids................................................................................................. 40
2.7.4 Exchanges with suppliers during the solicitation process ................................. 41
2.7.5 Bidding irregularities ......................................................................................... 42
2.8. Evaluation of bids .................................................................................................. 42
2.8.1 General ............................................................................................................. 42
2.8.2 Basic considerations for evaluating bids and proposals ................................... 42
2.8.3 Methods used to evaluate solicitations ............................................................. 43
2.8.4. Evaluation of tender for services ...................................................................... 43
2.8.4.1. Setting the evaluation criteria ........................................................................... 43
2.8.4.2. Evaluation criteria and allocation of points ....................................................... 43
2.8.4.3. Rating scale ...................................................................................................... 44
2.8.4.4. Qualifying rate for technical proposals .............................................................. 45
2.8.4.5. Definition of grades ........................................................................................... 45
2.8.4.6. Relative weight of technical and financial proposals ........................................ 46
2.8.4.7. Conclusion and proposal for award of contract ................................................ 46
2.8.5. Rejection of all bids or proposals leading to tender cancellation ...................... 46
2.8.6. Adherence to specifications or terms of reference ........................................... 47
2.8.7. Evaluation of delivery terms .............................................................................. 47
2.8.8. Evaluation when grouping items ....................................................................... 48
2.8.9. Offers of lower quantities .................................................................................. 48
2.8.10. Splitting the award for the same item ............................................................... 48
2.8.11. Tie bids ............................................................................................................. 49
2.8.12. Authorized costs exceeded............................................................................... 49
2.8.13. Errors, omissions and alterations ..................................................................... 49
2.8.14. Authorizations of bids modification after the closing deadline .......................... 50
2.8.15. Recommendation of award ............................................................................... 50
2.8.16. Advance notice of award .................................................................................. 51
2.8.17. Requests for information from suppliers or service providers ........................... 51
2.8.18. Regrets notification ........................................................................................... 51
2.8.19. Changes in quantity prior to a contract award .................................................. 51
2.9. Guarantees ............................................................................................................. 52
2.9.1 Bid bond............................................................................................................ 52
2.9.2 Advance payment guarantee ............................................................................ 52
2.9.3 Performance bond ............................................................................................ 52
2.9.4 Retention guarantee ......................................................................................... 53
2.9.5 Checking guarantee forms................................................................................ 53
2.9.6 Keeping bank or financial institution guarantees .............................................. 54
2.10. Contractual documents ..................................................................................... 54
2.10.1 General ............................................................................................................. 54
2.10.2 General terms and conditions ........................................................................... 54
2.10.3 Contract forms .................................................................................................. 55
2.11. Contract management ....................................................................................... 59
2.11.1 General ............................................................................................................. 59
2.11.2 Record of purchase orders and purchase contracts ......................................... 59
2.11.3 Amendment or termination of contract .............................................................. 59
2.11.4 Follow-up of the purchase order and purchase contract .................................. 59
2.11.5 Failure or breach of contract ............................................................................. 60
2.12. Transport and insurance ................................................................................... 63
2.12.1 Incoterms 2000 ................................................................................................. 63
2.12.2 Modes of transport ............................................................................................ 64
2.12.3 Marking of goods for shipment ......................................................................... 65
2.12.4 Transport documents ........................................................................................ 65
2.12.5 Forwarding agents ............................................................................................ 66
2.12.6 Global transport insurance................................................................................ 67
2.13. Receiving goods and services .......................................................................... 68
2.13.1 Receiving goods ............................................................................................... 68
2.13.2 Receiving services ............................................................................................ 70
2.13.3 Discrepancies in delivery .................................................................................. 70
2.13.4 Returning goods to a supplier ........................................................................... 70
2.13.5 Certification of invoices ..................................................................................... 71
2.14. Files and archiving ............................................................................................. 71
2.14.1 General ............................................................................................................. 71
2.14.2 Files to archive.................................................................................................. 71
2.14.3 Audit requirements............................................................................................ 72
3. SPECIFIC PROCUREMENT .......................................................................................... 73

3.1. Medical procurement ............................................................................................. 73
3.1.1 General ............................................................................................................. 73
3.1.2 Procedure for medical procurement ................................................................. 73
3.1.3 Quality assurance ............................................................................................. 74
3.2. Food procurement ................................................................................................. 75
3.2.1 General ............................................................................................................. 75
3.2.2 Quality procedures............................................................................................ 75
3.3. Consultancy procurement .................................................................................... 76
3.3.1 General ............................................................................................................. 76
3.3.2 Specificities for consultancy service procurement ............................................ 76
3.4. Procurement of construction works and services ............................................. 78
3.4.1 Legal basis for contracting construction works ................................................. 78
3.4.2 Authorization process ....................................................................................... 78
3.5. Procurement of technology hardware and software .......................................... 79
3.5.1 General ............................................................................................................. 79
3.5.2 IT-specific procurement requirements .............................................................. 79
3.6. Procurement of vehicles and spare parts (fleet management) ......................... 79
3.6.1 General ............................................................................................................. 79
Local vehicle acquisitions ............................................................................................... 80
3.7. Acquisition and sales of assets ........................................................................... 80
3.7.1 General ............................................................................................................. 80
3.7.2 Fixed asset acquisition ..................................................................................... 81
3.7.3 Purchase of land and buildings ......................................................................... 81
3.7.4 Disposal by sale of assets ................................................................................ 84
APPENDICES ........................................................................................................................ 87

Appendix A1 Glossary ......................................................................................................... 88
Appendix A2 Acronyms ....................................................................................................... 91
Appendix B Forms and Templates (not included) ............................................................ 92
Appendix C Procurement Processes (not included) ........................................................ 93
Appendix D List of related documents ............................................................................... 94
INTRODUCTION
The mission of the International Federation of Red Cross and Red Crescent Societies (the
International Federation) is to improve the lives of vulnerable people by mobilizing the power
of humanity.
The collective focus of the International Federation and its member National Societies is on
achieving the following four goals:
Reduce the number of deaths, injuries and impact from disasters.
Reduce the number of deaths, illnesses and impact from diseases and public health
emergencies.
Increase local community, civil society and Red Cross Red Crescent capacity to
address the most urgent situations of vulnerability.
Promote respect for diversity and human dignity, and reduce intolerance,
discrimination and social exclusion.
To achieve these goals, there is a need for a responsive and focused organization where
resources are aligned and efforts can be scaled up, when and where most needed.
The International Federation’s logistics and procurement services provide a fundamental

support to the organization’s activities, and must be carried out in accordance with best
practice.
By optimizing logistics capacity and providing quality procurement services, the International
Federation will ensure that people affected by disaster benefit from higher quality and faster
delivery of relief items.
This procurement manual sets out procedures, processes and guidelines that apply to the
procurement of goods and services within the International Federation. Members of the
secretariat involved in such activities are required to follow and implement the procedures
established in the manual.
1. GENERAL
1.1. Purpose of the manual
1.1.1 Procurement within the International Federation
Procurement is understood to cover all actions related to the acquisition of goods, services,
and capital items (including renting of equipment or facilities); from needs identification to
supplier contract management.
The International Federation is understood to include all secretariat offices (Geneva and field
offices) regardless of location.
The main objective of procurement within the International Federation is to provide the
organization’s operations and beneficiaries with high quality goods and services at the right
time and place, and at the lowest cost.
1.1.2 Objective of the manual
This procurement manual defines procedures, processes and guidelines that apply to the
procurement of goods and services within the International Federation.
Procurement requirements are established to ensure that procurement is carried out in a

professional way in accordance with internationally recognized standards.
The main objective is to harmonize procurement practices throughout the International

Federation, clarifying roles and responsibilities between all involved parties.
Therefore all staff involved in the procurement process must know and follow the procedures
described in this manual.
1.1.3 Target audience
This manual provides guidance to all Federation staff whose official functions require
involvement in the procurement processes of the International Federation, and to other
entities procuring through or on behalf of the International Federation.
The manual is primarily aimed at providing information for the following groups:
(a) Requesters: individuals requesting procurement services

(b) Procurement officers or entities: individuals or entities responsible for conducting
procurement activities
(c) Overseeing/validating/approving entities: individuals or entities responsible for
overseeing, validating or approving procurement activities
For more details, please see section 1.3 ‘Roles and responsibilities, according to
authorization levels’.
1.1.4 Content of the manual
This manual is organized into four distinct parts:
(a) Chapter 1 provides information on governing principles, social and environmental

considerations, roles, responsibilities and authorization levels.
(b) Chapter 2 describes the procurement process.
(c) Chapter 3 provides information on specific procurement.
(d) Appendices include a glossary, forms, templates, process flow charts and a list of
procurement-related documents.
The procurement manual forms an integral part of the procedures of the International
Federation. The current version of this procurement manual is available on FedNet.
1.1.5 Amendments and revisions to the manual
The head of the Global Logistics Service (GLS) is responsible for the publication of this
manual and its amendments. Amendments to this manual require consultation with the
stakeholders concerned and approval of the senior management team.
1.2. General principles and ethics
Transactions involving the International Federation warrant the highest degree of ethics and
public trust.
1.2.1 Principles of conduct for procurement staff
Staff involved in procurement activities are reminded of their obligations under the Staff Code
of Conduct, including among others to act at all times in compliance with:
a) The Fundamental Principles of the International Red Cross and Red Crescent
Movement
b) The Staff Code of Conduct, the Federation Staff Rules and Staff Regulations
c) All mandatory rules, policies and procedures
d) All applicable national laws
In relation to staff procurement duties, specific attention must be given to the rules of conduct
defined in the Staff Code of Conduct under the heading ‘Integrity’, as well as those specified
below.
1.2.1.1. Eliminating corruption, extortion and fraud
Staff should:
a) Conduct all official duties with integrity, free from any taint of dishonesty or corruption,
including not engaging in any act of favouritism, nepotism, cronyism, or bribery. This
includes not accepting from any external source (including National Societies,
governments, corporations or others, e.g. suppliers and service providers) without
authorization1, any honour, decoration, gift, remuneration, favour or economic
benefit2, which is more than a ‘token gift’. Examples of token gifts include cheap pens,
desk diaries, trinkets etc.3
b) Conduct all official duties avoiding all forms of extortion, blackmail or coercion,
including not engaging in any act of attempting to influence the process of procuring
goods or services, or executing contracts by means of threats of injury to person,
property or reputation.
1
Authorization, if required is provided by line manager
2
Suppliers and service providers may offer meals, drinks or travel tickets. The acceptance of these is considered as corruption.
3
Extract from the Staff Code of Conduct
c) Conduct all official duties avoiding all forms of fraudulent activity, including not
misrepresenting information or facts for the purpose of influencing the process of
procuring goods or services or executing contracts, to the detriment of the
International Federation or other participants.
1.2.1.2. Avoiding conflicts of interest
Staff shall “not benefit improperly or allow a third party to benefit improperly (whether directly
or indirectly) from association with an enterprise that engages in any business or transaction
with the International Federation (including association with the management or the holding
of a financial interest). Any potential conflict of interest with a supplier, service provider, or
business partner (such as family relations or shareholding) must be disclosed”.4
Specific attention must be given to avoid any conflicts of interest in relation to procurement
activities. A conflict of interest arises when there is a conflict between the official duty and the
personal interest, which might improperly influence the performance of official duties and
responsibilities.
1.2.2 Principles of conduct for suppliers and service providers
Staff involved in procurement activities also have a responsibility to promote among suppliers
or service providers and potential suppliers or service providers compliance with the conduct
obligations accepted by them when registering or contracting with the International
Federation.
Staff involved in procurement activities should ensure that suppliers or service providers are
aware that the following principles need to be observed when working or seeking to work
with the International Federation:
a) Business ethics: Suppliers are expected to maintain the highest degree of business
ethics when working or seeking to work with the International Federation.
b) Transparency of information provision: Suppliers shall not be involved in any

fraudulent activities, misrepresent information or facts for the purpose of influencing
the selection and contract-awarding process in their favour.
c) Fair competition: Suppliers shall not be involved in any corrupt, collusive or coercive
practices.
d) The supplier or service provider shall represent and warrants that no official of the
Federation has been, or shall be, admitted by the service supplier or service provider
to any direct or indirect benefit arising from the award of the contract.
To ensure that appropriate action may be taken (including possible termination) where these
principles are not respected and to minimize any negative impact on the International
Federation from such circumstances, the following clause should be included in all contracts
with third party service providers:
When performing on behalf of or at any time representing the International Federation, the
service provider and all individuals assigned by it to perform works or services under this
contract, shall act in a manner consistent with the values of the International Red Cross and
Red Crescent Movement and shall abide by the rules of conduct set out in the International
Federation’s Code of Conduct (a copy of which has been provided by the International
4
Extract from the Staff Code of Conduct
Federation). The service provider acknowledges and accepts that any violation of these rules
of conduct by it or any individual assigned by it to perform services on its behalf shall be
considered breach of an essential term of this.
If at any time during the registration of procurement process, the procurement entity
determines that a potential supplier or service provider is in violation of the above-mentioned
principles, that company’s request for registration or bid may be rejected as ineligible.
1.2.3 Social and environmental considerations in procurement
The procurement entity should take into consideration, whenever possible, social and
environmental criteria during the supplier selection process, and promote the respect of basic
standards during the execution of contracts.
1.2.3.1. Social standards
Suppliers or service providers either working or seeking to work with the International
Federation must commit to respect internationally recognized human rights principles and
labour standards, as defined in the fundamental conventions of the International Labour
Organization (ILO)5 and the Universal Declaration of Human Rights (UDHR)6.
Suppliers or service providers must:
(a) Conduct their business in respect of fundamental human rights and be in no way
complicit in human rights abuses
(b) Uphold the freedom of association and the effective recognition of the right to
organize and collective bargaining
(c) Uphold the abolition of all forms of forced labour
(d) Uphold the effective elimination of child labour
(e) Uphold the elimination of discrimination in respect of employment and occupation
(f) Guarantee a safe working environment for employees
The respect of fundamental human rights and labour standards is stipulated in the general
terms and conditions, and must be accepted by all suppliers or service providers as a
condition of contracting with the International Federation. Any refusal of these terms shall
constitute grounds for rejection of the company’s registration request or bid. Any violation of
these terms during the execution of a contract constitutes grounds for termination.
1.2.3.2. Environmental considerations
Whenever possible and economically viable, the International Federation should seek to
procure goods and services that lessen the burden on the environment. Staff involved in the
procurement process should consider integrating environmental criteria in supplier
registration, solicitations and contracts.
The procurement officer should evaluate the supplier’s environmental performance at the
registration stage through the supplier registration form based on the following criteria:
(a) Environmental policy, committing the supplier to reduce environmental impacts

(b) Resources dedicated to environmental management (dedicated function or team)
(c) Implementation of an environmental management system (type ISO 14001)
5
http://www.ilo.org/global/lang--en/index.htm
6
http://www.un.org/Overview/rights.html
The procurement officer should, whenever appropriate and economically viable, integrate
environmental criteria at the solicitation phase, through the request for quotation or request
for proposal, with the aim to:
(d) Increase energy efficiency of equipment

(e) Increase recyclability of equipment
(f) Ban the use of hazardous material
To the same extent, in order to determine how environmentally-friendly and safe the goods
or services are, requesters at the initial stage of preparing requirements should consider the
following questions:
(g) Does it have an energy-saving mode or energy-star rating?

(h) Is it easily recyclable?
(i) Does it contain any banned hazardous components?
This allows the requester to identify environmentally friendly (green) goods and services,
which have fewer harmful effects on human health and the environment than competing
goods and services.
1.3. Roles and responsibilities according to authorization levels
1.3.1 General
All individuals, whose official functions require involvement in the procurement process of the
International Federation, have specific roles and responsibilities. They can be defined as
follows:
(a) Requesters are individuals authorized to submit requisitions for procurement on the
basis of their knowledge of the programme requirements and budget limitations.
Procurement may be requested on behalf of:
The International Federation Secretariat (Geneva departments and Field

Offices )
National Societies seeking procurement services from the International
Federation
External humanitarian organizations seeking procurement services from the
International Federation
(b) Procurement officers are individuals authorized to and responsible for carrying out
procurement activities. Procurement entities are organizational units tasked to
carry out procurement activities, including:
Global Logistics Service (GLS)

Regional logistics units
Zone offices, regional and country representations (field offices)
Information Systems Department (ISD) in Geneva
Human resources department
Administration department in Geneva
National Societies administrating Federation working advances
(c) Overseeing, validating and approving individuals are members of organizational
units, authorized to validate and approve expenditures, requisitions, procurement
actions, contracts and invoices. The organizational units are:
Finance department
Global Logistics Service
Regional logistics units within their authorization level
Field offices within their authorization level
Global fleet base
Geneva committee on contracts
Local committee on contracts
Legal department, where documents differ from standard templates
All contracts (or other forms of legal commitment) entered into on behalf of the International
Federation must be reviewed and approved in accordance with the Federation Contracting
Procedures7.
(d) The procurement process is subject to different validations and approvals, which
intervene at different stages of the process:
Financial validation is required at the time of issuing a logistics requisition8

in order to check funding availability for the required goods or services. The
financial validation is a financial sign-off by the relevant finance officer
ensuring that all applicable finance procedures have been followed and
respected (e.g. the planned expenditure is included in an approved budget
and within a project expenditure approval limit and that the coding is
correct).
and
Logistics technical approval is required for all procurement with logistics
requisition value exceeding CHF 50,000. Logistics technical approval is a
technical approval by the regional logistics unit and/or GLS. It ensures that
all relevant procurement procedures have been followed and respected.
1.3.2 Roles and responsibilities of procurement entities
1.3.2.1. Global Logistics Service (GLS)
GLS is responsible for and authorized to conduct procurement for the International
Federation. The head of department is responsible for complying with the International
Federation procurement procedures described in this manual.
GLS is responsible for:
(a) Updating procurement procedures for approval by the senior management team and
publishing them when approved
(b) Ensuring that procurement procedures take adequate consideration of the diverse
conditions of field programmes and operations
(c) Reviewing and issuing technical approval as per logistics technical approval table
(section 1.3.5.2)
(d) Procuring goods and services for Federation operations in the field
(e) Conducting procurement of all pharmaceuticals and medical items
(f) Establishing global framework agreements
7
For details, please see the ‘Federation Contracting Procedures’.
8
For definition please refer to section 2.4
(g) Maintaining a global supplier database
(h) Technical management of regional logistics units
(i) Advising other procurement entities about how to carry out procurement in
accordance with these procedures
1.3.2.2. The Information Systems Department in Geneva (ISD)
ISD in Geneva is responsible for and authorized to conduct procurement of software, IT

services, IT equipment and telecom equipment on behalf of the International Federation.
Any purchase of IT or telecommunication equipment not in conformity with specifications
published by ISD must be authorized by the head of ISD, who is responsible for complying
with the International Federation procurement procedures described in this manual.
ISD is responsible for:
(a) Providing IT, telecommunications and software procurement services throughout

the International Federation’s secretariat (Geneva departments and field offices)
and by separate agreement to National Societies
(b) IT and telecommunication policies and guidelines
(c) Defining the standard hardware and software to be used in the International
Federation and publishing an updated list on FedNet
(d) Continuously reviewing hardware and software to determine whether an alternative
or upgrade should be used, taking into account business need, market
developments and available resources
(e) Purchasing all hardware for the International Federation secretariat (Geneva
departments and field offices)
(f) Providing advice to other locations on standards and compatibility.
(g) Providing technical advice to other procurement entities
(h) Providing authorization for purchase of IT or telecommunication equipment that
does not conform to established specifications
1.3.2.3. The human resources department in Geneva
The human resources department in Geneva is responsible for and authorized to conduct
procurement of human resource-related goods and services, including:
(a) Benchmark studies on remuneration and benefits

(b) Training materials
All procurement must be authorized by the head of human resources, who is responsible
for complying with the Federation procurement procedures described in this manual.
The engagement of individual consultants is addressed separately by HR procedures and

is not subject to the procedures established in this manual.
1.3.2.4. The administration department in Geneva
The administration department in Geneva is responsible for and authorized to conduct

procurement of the following categories of goods and services or similar:
(a) Office supplies, furniture and equipment

(b) Souvenirs
(c) Office maintenance work and industrial services on the office buildings in Geneva
(d) Architectural services
(e) Translation and interpreter services
(f) Accommodation (hotel and short-term residency including furnishings)
(g) Conferences, venues and related services
(h) Travel services
(i) Insurance policies
(j) Catering
(k) Office stationery
(l) Printing and reprographic services
All procurement must be authorized by the head of the administration department, who is
responsible for complying with the Federation procurement procedures described in this
manual.
1.3.2.5. Regional logistics units
The regional logistics units may be referred to internally as an RLU. Regional logistics
units are authorized to conduct procurement activities for field operations and National
Societies. Each unit has an authorization level up to CHF 400,000 granted by the head of
GLS to individuals responsible for logistics technical review and approval. Each unit has
the procurement capacity to support field offices within its specified geographical zone.
The head of each regional logistics unit is responsible for complying with the Federation
procurement procedures and logistics technical approval levels described in this manual.
Regional logistics units are responsible for:
(a) Conducting procurement for goods, services for Federation operations within the
geographical area of the regional logistics unit
(b) Reviewing and issuing technical approval as per logistics technical authorization
levels table (section 1.3.5.2)
(c) Coordinating with GLS to ensure that procurement procedures take into account
the specific conditions of individual field programmes and operations
(d) Transferring procurement files sent by field offices to GLS for logistics technical
authorization and the Geneva committee on contracts approval, according to
logistics requisition value, as defined in the logistics technical authorization levels
table (section 1.3.5.2)
(e) Maintaining regional supplier database
1.3.2.6. Global Fleet Base in Dubai
All purchases of motor vehicles for field operations (including motorcycles, cars and
trucks) must be authorized by the global fleet coordinator in Dubai, who reviews the
compliance with the existing list of approved vehicles. It is mandatory for all light cars to
be rented through the International Federation’s Vehicle Rental Programme (VRP).
1.3.2.7. Field offices
Heads of field offices have the overall management responsibility and are therefore
accountable for the procurement activities in their respective office, and as such are
responsible for complying with the Federation procurement procedures described in this
manual.
In the interests of running efficient operations, heads of field offices may delegate tasks
and responsibilities to other staff, but will always remain ultimately responsible and
accountable for the actions and activities of the field office.
Field offices are authorized to make direct in country purchases of goods or services
required for their activities (such as administrative, office equipment and other office
support and expenditures such as hotel bookings or travel tickets).
Procurement is authorized, provided that it falls within their authorized budget, that funds
are available in the relevant account and that such procurement is in accordance with
procedures as described in this manual and their terms of reference. Each field office has
procurement authorization level up to CHF 50,000 per logistics requisition value. Artificial
split of a logistics requisition is not allowed.
Field offices are responsible for forwarding logistics requisitions irrespectively of the value
limits to the relevant regional logistics unit or procurement entity for entire processing of
procurement:
(a) When the field office does not have sufficient procurement capacity, logistics
requisitions must be forwarded to the relevant RLU.
(b) For pharmaceuticals and medical supplies, logistics requisitions must be sent to
GLS in Geneva.
(c) For generators, vehicles and motor cycles logistics requisitions must be sent to
Global fleet base in Dubai.
(d) For all IT and telecommunication equipment procurement irrespectively of value
limits, logistics requisitions must be sent to ISD.
(e) For regional and/ or international procurement.
Field offices are responsible for sending procurement files to the relevant regional logistics
unit for logistics technical approval, as established in the logistics technical approval table
(see section 1.3.5.2).
1.3.2.8. National Societies administrating a Federation working advance9
National Societies administrating funds received from the International Federation on a

working advance basis are required to follow the Federation procurement procedures, as
described in this manual and to obtain all authorizations as per the logistics technical
approval table provided under section 1.3.5.2.
1.3.2.9. National Societies operating under the Disaster Relief Emergency

Fund (DREF)10
DREF is a basic tool for disaster response, providing immediate financial support (loans)
to start up emergency operations until donor contributions are received. It also provides
immediate funding (grants) for smaller-scale emergencies when an emergency appeal is
not required, as well as funding for preparedness activities for imminent crisis.
Under DREF-funded operations, different procurement procedures may apply, as follows:
(a) Local procurement carried out by the National Society with DREF funding should
follow national procurement procedures.
(b) Where DREF funding is used pending an emergency appeal, Federation
procurement procedures must be followed as described in this manual.
9
The purpose of working advances to National Societies is to advance cash to allow them to implement those elements of a
Federation project / programme under their direct management. For further details, please see the procedure “Working
advances to National Societies, n°36”.
10
For further details, please see “DREF procedure and guidelines, n° 31”.
If an emergency appeal is launched for a DREF-funded operation, the project manager is
responsible for immediately informing the relevant regional logistics unit in order to ensure
the implementation of Federation procurement procedures.
1.3.2.10. Other partners acting in the name of or on behalf of the International

Federation
The International Federation cooperates with different partners, under conditions defined
in dedicated agreements (including host agreements and integration agreements with
National Societies).
In all cases where third parties are conducting procurement in the name of or on behalf of
the International Federation, Federation procurement procedures apply.
1.3.3 Geneva Committee on Contracts
1.3.3.1. Composition and responsibility
The Geneva Committee on Contracts consists of representatives from the International

Federation’s legal department, finance department and development division. The
Committee on Contracts may be referred to internally as the CoC. Each representative is
nominated by the head of the relevant department or division for a renewable term of two
years.
The Committee is chaired by one of its members, rotating on an annual basis. The chair is
responsible for establishing the schedule and agenda of meetings and for maintaining the
records of the committee, including minutes of all meetings.
The Committee reviews all submissions for compliance with the International Federation’s
relevant rules and procedures, including specifically finance regulations and the
procurement procedures established within this manual. The committee also assesses
and provides recommendations on any particular financial or legal risks associated with
the procurement action or contract.
The Committee is responsible for approving all proposed contracts or other legal
commitments to be entered into by or on behalf of the International Federation in the
categories listed below:
Expenditure commitments
(a) Any contract or commitment for expenditure of CHF 400,000 or more
(b) Any series of related contracts or commitments with one or more suppliers with an
aggregate expenditure value of CHF 400,000 or more in a calendar year
(c) Any global or regional framework agreement
(d) Any amendment, extension or renewal of a contract NOT previously submitted to

the committee that raises cumulative expenditure value to CHF 400,000 or more in
a calendar year
(e) Any amendment, extension or renewal of a contract previously submitted to the

committee that raises cumulative expenditure value by more than 20 per cent or
CHF 200,000, whichever is less
Income commitments
(f) Any contract or commitment which involves income for the International Federation
of more than CHF 100,000, with the exception of the following:
Contributions to Federation appeals, whether by pledge management note
or otherwise, without addition of material conditions
Unrestricted donations or grants without material conditions
(g) Any amendment, extension or renewal of a contract not previously submitted to the
committee that raises the cumulative income value to CHF 100,000 or more in a
calendar year.
(h) Any amendment, extension or renewal of a contract previously submitted to the

committee that raises the cumulative income value by more than 20 per cent or
CHF 50,000, whichever is less.
General
(i) Any amendment, extension or renewal of a contract previously submitted to the

CoC, where the responsible officer deems that the modification, in relationship to
the considerations on the basis of which the original approval was given, would
have significantly affected the outcome.
1.3.3.2. Process
Where Committee approval is made on a conditional basis, it is the responsibility of the

contract signing authority to ensure that all conditions are met before entering into any
legal commitments on behalf of the International Federation.
In case of rejection by the Committee of an award recommendation or contract, the

procurement entity should take one of the following actions:
(a) Follow alternative award approval of the committee, if any

(b) Re-conduct solicitation taking into consideration any specific recommendations by
the committee
(c) Escalate the file to the relevant Under Secretary General for approval on an
exceptional basis
For further details on the rules, procedures and convocation of the committee, please refer
to appendices 28 and 29.
1.3.4 Local Committees on Contracts
Heads of all field offices should name local committees on contracts. A local Committee
on Contracts may be referred to internally as a local CoC. Local committees should
include no fewer than three members representing finance, management and logistics
functions.
Each local Committee should be chaired by the member representing the management
function. The chair is responsible for establishing the schedule and agenda of meetings,
and for maintaining the records of the local Committee, including minutes of all meetings.
The local Committee should conduct all opening ceremonies for and review all proposed
contracts and procurements over CHF 20,000 for compliance with the International
Federation’s relevant rules and procedures, including specifically finance regulations and
the procurement procedures established herein, and provide its recommendation to the
relevant signing authority.
Heads of all field offices may determine a lower threshold at which contracts and
procurements can be reviewed by the local committee.
1.3.5 Authorization steps throughout the procurement process
1.3.5.1. Expenditure authorization and financial validation
Financial validation, as defined in section 1.3.1(d) is mandatory for all logistics requisitions
for any purchase of goods or services (or a staff request form for the hiring of personnel,
consultants or interns).
Logistics requisition may be initiated by any individual with knowledge of the programme
requirements and budget limitations, but must be authorized by an individual who has the
appropriate level of expenditure authority (e.g. the project manager or the head of
department) and validated by the relevant finance officer.
The project manager is the manager of the cost centre or the project, who can authorize
related expenditures. The project manager may delegate authority for authorizing
expenditure by completing the delegation of authority form. For details, please see
appendix 25. The form should then be sent to the finance unit in the field office for field
projects, or to the budget and analysis unit for Geneva project or cost centres. The
authorizing officials shall retain full responsibility for actions of the assigned staff. All
authorizations by a project manager require a co-signature by the relevant finance
personnel in the field office or Geneva.11
Financial validation occurs after there is clarity on what goods or services are to be
purchased and the approximate price, but before the formal solicitation is launched.
11
For details, please refer to ‘Expenditure Authorization procedure n°33’.
Expenditure authorization and validation levels table
Amount Signing authority Validation

Overall
budget/PEAR12
Approval
Cost centre Secretary General Budget and analysis
budgets Unit /Head of zone
finance unit (ZFU)
Project Director of zone BAU /Head of ZFU
expenditure Where director of zone is
budgets project manager - Under
Secretary General
Development or disasters,
as relevant
PEAR ceiling (for Potential financial
projects) exposure (CHF):
None Director of zone Finance officer
Up to 200,000 Head of office Finance officer
200,001–500,000 Divisional Finance officer
director/Under
Secretary General
Over 500,000 Secretary General Finance officer
Expenditure against approved cost centre or programme budget
Expenditure within As per approved budget Cost centre or project Finance officer
approved budget and PEAR ceiling (for manager
and PEAR ceiling projects)
(for
projects)
Additional approval required for special categories of expenditure or cost
Land and buildings Secretary General

Fixed assets Head of office Fixed asset officer
(Geneva)
Vehicles purchase
Head of office Finance officer
or lease
Head of office Global fleet base
of motor vehicles
1.3.5.2. Logistics technical approval
Logistics technical approval levels are established and required for all procurement with a
logistics requisition value exceeding CHF 50,000. Splitting logistics requisitions artificially
is strictly forbidden.
Logistics technical approval, as defined in section 1.3.1(d) ensures that all relevant
procurement procedures have been followed and respected.
Logistics technical approval occurs at the end of the solicitation process, when a
recommendation for the supplier or service provider is made, but before the purchase
order or contract is issued.
12
PEAR : Project Expenditure Approval Request
Summary of approvals throughout the procurement process
< CHF 1,000

Logistics requisitions to be used.
Procurement ordering process consists of the following steps:

CHF 1,000–20,000
• Approval of Logistics Requisition by project manager and validation by finance

• Preparation and release of Request for Quotation to minimum three potential
suppliers
• Receipt and evaluation of offers
• Issue of Comparative Bid Analysis (CBA) with a recommendation. CBA must be
signed by the Purchasing Officer and approved by the Director of the Zone
(DoZ), Head of Department (HoD), Country Representative (CR), Head of
Regional Logistics Unit (HoRLU) or other authorized persons
• Issue of contract/purchase order
Procurement ordering process is the same as described above. An additional

CHF 20,000–50,000
requirement is that quotations/ offers should be requested in sealed envelopes. Offers by
faxes may be accepted in emergencies if properly justified and approved by the
DoZ/HoD/CR/HoRLU or authorized persons in writing. A Committee on Contracts (CoC)
with designated members must be appointed by the DoZ/HoD/CR/HoRLU. The local
CoC should meet to:
• Conduct opening ceremony: minutes of the meeting must be issued and
signed by all CoC members
• Conduct local CoC meeting: ensure a strict compliance with the IFRC
procurement procedures and make a recommendation to the
DoZ/HoD/CR/HoRLU on selection of supplier(s). Minutes of the meeting must be
issued and signed by all CoC members.
Director of Zone/ HoD/CR/HoRLU is responsible for final approval of the local CoC
recommendation.
• For tenders conducted by the GVA GLS sealed offers/ quotations are
requested above CHF 100’000.
In order to ascertain that a strict compliance with the Federation procedures is ensured,
CHF 50,000–400,000
field representations are requested to send a copy of the following documents with a
request for technical authorization to their respective RLU:
• Logistics Requisition form approved by budget holder and validated by
finance
• Request for quotation
• Minutes of opening ceremony, signed by all local CoC members
• Copy of all offers
• Comparative Bid Analysis (CBA) signed by Purchasing Officer and approved
by the DoZ/HoD/CR/HoRLU or authorized person (copy to be sent
separately by e-mail)
• Local CoC minutes, signed by all members, explaining the procurement
process and the choice made
• Draft of the contract
Important note: if the above documents are issued in the local language, translations into
English are required and must be sent together with copies of original documents.
File must be presented to Geneva CoC for approval. The same procedures as in point 4
> CHF 400,000
will apply and same documents must be forwarded to GVA GLS through respective RLU.
Geneva GLS will review and submit a complete file to Geneva CoC for approval. The
Geneva CoC reviews all submissions for compliance with the Federation procurement
procedures. The CoC also reviews and provides recommendations on any financial and
legal risk associated with a particular contract/ order implementation.
NB: For construction works and services of a value above CHF 50,000, technical approval is
required from GLS. All approved requisitions for procurement of medical supplies irrespective
of value must be submitted to the procurement unit of GLS in GVA for processing.
1.3.5.3. Contract signing authority
To facilitate the International Federation’s operations, the secretary general is authorized

as set out in the ‘Constitution of the Federation’ (article 25) to conclude all transactions on
behalf of the International Federation. The secretary general has delegated this authority
as set out in the ‘Expenditure Authorization Procedure’ and ‘Contracting Procedures’.13
All contracts (or other forms of legal commitment) entered into on behalf of the
International Federation must be reviewed and approved in accordance with the
Federation Contracting Procedures14. It is the responsibility of the signing authority to
ensure that all procedures have been followed and all approvals obtained before entering
into any legal commitment on behalf of the International Federation.
Individuals acting on the delegated authority of the secretary general may be assisted by
the appropriate staff to carry out procurement activities, but in assigning such tasks and
authorities, the authorized officials retain ultimate responsibility for compliance with all
rules, procedures and instructions. Signature authority may also be delegated, subject to
the same conditions, and must be specifically delegated in writing.
Responsibilities
This delegation of signing authority is granted on an individual basis and requires all
individuals with this authority to exercise their duties and responsibilities with the utmost
care, competency, efficiency, fairness and integrity. Such individuals are personally
accountable for improper use of this authority or for acting without proper authority.
Signing Authorities for procurement of goods and services
In general, signing authorities for common procurement contracts can be summarized as

follows:
Signing authority
Type
GVA Field Office
Framework agreements (global, regional, local) Head of GLS
model available from GLS
Framework agreements (local) Head of GLS
Head of office
model available from GLS
Standard procurement contracts, purchase orders and sale

Head of
of assets agreements
department Head of office
models available from GLS
Head of
Construction contracts
admin.for HQ
(both engineering consultancies and construction work
buildings Head of office
contracts) model avilable from GLS
Agreements for specialized services Head of

(IT services, payroll services) department Head of office
Model available on FedNet legal section
13
Please refer to the procedure “Expenditure authorisation n° 33” and summary table above
14
Please refer to “Federation Contracting Procedure”
2. THE PROCUREMENT PROCESS
2.1. Overview of the process
2.1.1 General
The aim of effective procurement is to provide quality goods and services, by achieving the
best value for money given the constraints in the operational context.
To achieve these goals, the International Federation has established an appropriate

procurement process, starting from the identification of needs to the management of the
contract.
The procurement process consists of the following steps:
(a) The identification of needs clearly described in a logistics requisition. This defines the
requirement for procurement and also serves as the authorization document for the
procurement entity.
(b) The solicitation consists in issuing a formal request for quotation or request for
proposal to selected suppliers or service providers.
(c) The solicitation evaluation is the evaluation step of the received suppliers’ bids or
service providers’ proposals (further to the request for quotation or request for
proposal). This evaluation is made through a competitive bid analysis or service
tender evaluation, designed to ensure that the International Federation receives the
best product or service for the price paid.
(d) The purchase order or contract is the formal agreement that legally binds the
International Federation and the supplier or service provider, and includes all
information relative to the procurement. It ensures that the obligations and rights of
both the International Federation and the supplier or service provider are adequately
defined.
(e) The goods or services delivery is confirmed through goods received note
acknowledging the receipt of goods.
(f) The contract management which deals with the follow-up of the contract/purchase
order, once it has been signed. Further to the receipt of the goods received note
(GRN) and the resolution of discrepancies with the supplier or service provider (if
any), the procurement officer will verify the supplier’s or service provider’s invoice and
forward it, with the correct codes, to the appropriate finance office for payment.
To support and optimize these steps, there are also a number of preliminary processes:
(g) The supplier management which consists in the registration, approval and evaluation
of all the suppliers working for the International Federation. The International
Federation maintains an up-to-date supplier database.
(h) The establishment of framework agreements with selected suppliers which agree to
supply a certain item at a certain price for a particular period of time
(i) Filing which consists of archiving of each procurement file for document traceability
and audit purposes
All the stages mentioned above are explained in this chapter.
2.1.2 Procurement planning
Procurement planning is essential for the effective and timely solicitation of bids or proposals,
award of purchase orders or contracts, and delivery of the goods or services required.
Requesters and procurement officers should begin to communicate with each other early in
the planning process, so as to obtain information and instructions on available procurement
strategies, and yet maintain their separate roles.
Before any solicitation is initiated, first check if:
(a) A list of potential suppliers has been established

(b) Framework agreements for the goods have already been established
(c) The logistics requisition has been approved by the finance officer and project
manager
(d) The specifications or terms of reference are clear and sufficiently detailed
(e) The delivery time is realistic (in case of emergencies there must be a distribution plan
in order to organize deliveries)
Planning can be foreseen on a short- or long-term basis depending on budgetary periods

and funds management.
2.1.2.1. Short-term planning
The requester must plan in the short term for goods or services that are required within a
short time frame.
In order to guarantee that the International Federation obtains good quality products and
services at a competitive price within the time frame required, the requesters should,
wherever possible, ensure the rational and optimal use of funds throughout the budget
period. The requester should, wherever possible, avoid last minute requisitions, especially
towards the end of the budget period, as this may hamper the ability of the International
Federation to ensure an open, efficient and timely procurement process.
2.1.2.2. Long-term planning
The requester should plan in the long term, covering at least the remainder of the budgetary
period and the forthcoming budgetary period, so that any procurement can be carried out in
the best possible way for the International Federation.
Long-term planning also demonstrates that the International Federation manages its funds in
a professional manner and to the benefit of all its beneficiaries.
As a result, requesters and procurement entities should begin to communicate with each
other as early as possible in the planning process. The best time is at the initial stage of the
budget preparation so that logistics requisitions can be consolidated, as much as possible,
by type and line items so as to maximize economies of scale. In practice, project managers
should contact GLS or the regional logistics unit (as appropriate) about costs and
optimization options when preparing their budgets and appeals.
2.2. Supplier management
2.2.1 Sourcing
2.2.1.1. General principles
Sourcing consists in identifying potential suppliers who could provide goods or services,
whilst minimizing costs and risks for the International Federation.
The International Federation’s sourcing activities aim to:
(a) Access the best available suppliers or service providers on the market
(b) Increase procurement efficiency when selecting the most appropriate supplier or
service provider
(c) Maximize purchasing leverages to achieve better economies of scale
(d) Consolidate supplier or service provider information (through the supplier database)
at each operating level (local (field offices), regional (regional logistics units) and
international (Geneva GLS)
(e) Share suppliers or service providers’ information among all Federation procurement
entities located in different regions and within the International Red Cross and Red
Crescent Movement
The newly identified suppliers or service providers must comply with the International
Federation’s requirements in terms of quality assurance standards, ethics, reliability and pro-
activeness (ability to react quickly in case of emergency), as well as with the end-user
requirements (in terms of product or service quality and delivery time).
Take particular care when sourcing goods or services in remote areas or countries with
emerging economies with respect to risk assessment. Factors to take into account when
assessing risk include political risk, currency risk and the supplier’s financial stability.
When identifying potential suppliers or service providers, first check in the existing supplier
database. Secondly, obtain or carry out a market analysis of the goods or services
requested. It is also worth checking if any information is available internally. Where no
information or market analysis is available internally – for example in the case of specific
goods or services or specific locations – use alternative ways to identify potential suppliers or
service providers:
(f) Browse relevant information sources, e.g. magazines, internet, chambers of

commerce, yellow pages
(g) Subscribe to market analyst reports through external sources
(h) Seek advice from similar organizations with similar needs who have implemented a
standard product, e.g. National Societies or other humanitarian organizations
(i) Consult technical departments for recommendations of potential suppliers or service
providers
Any information gathered on a product or service provides an invaluable overview of the

current market. It should outline current or potential suppliers or service providers, and the
strengths and weaknesses of the market. This information provides a clear view on what is
available locally, regionally or globally and the types of good or services that each supplier or
service provider is offering.
2.2.1.2. Local procurement
Local procurement refers to the procurement of goods or services from within the requester’s
country. Local procurement varies according to the country’s specificities, market conditions
and suppliers’ working practices. In some situations, local procurement may be the best
sourcing option. However, it can be high risk and may also be problematic.
Local procurement should not be viewed as a separate procurement practice, but should be
considered an integral part of the global sourcing strategy. Local procurement is part of the
end-to-end supply chain and cannot be efficient if either part of the chain is problematic (such
as decision-making, on-time requisitioning, lack of relief and distribution plan, lack of in-
country procurement resource, etc).
Local procurement can be carried out if there is capacity within the local procurement entity
and within the market in respect to the goods or services to be obtained. It is important for
the procurement entity to be sure that the local suppliers or service providers have the
availability and the capacity to supply the goods.
Where there is no local capacity, the field offices should send their logistics requisition for
processing to the relevant regional logistics unit (see section 1.3.2.7).
The Federation staff involved in procurement activities should:
(a) Consult the regional logistics unit to check if there are any regional sourcing options
and identify the best sourcing options.
(b) Work in compliance with local market development and ethics.
2.2.2 Supplier database
The International Federation maintains an up-to-date database registering all pre-qualified

suppliers or service providers, which are the prospective suppliers considered (upon
evaluation) as able to provide the requested goods or services. Such pre-qualification
ensures that invitations to bid or proposals are extended only to those who have adequate
capabilities and resources.
Staff involved in the procurement process are responsible for identifying new suppliers or
service providers, researching new markets, registering and reviewing suppliers’ or service
providers’ status and details in the database; especially for its range of suppliers or service
providers and scope of items or services.
Responsibilities are split as follow:
(a) The GLS is responsible for registering and maintaining files in the database on
suppliers or service providers with a global capacity.
(b) The regional logistics units are responsible for registering and maintaining files in the
database on suppliers or service providers with a regional capacity.
(c) The field offices are in charge of registering and maintaining files in the database on
suppliers or service providers with a local capacity.
Paper or electronic files should be maintained for each supplier or service provider and data
should be entered in the database in GLS, the regional logistics units and field offices.
Suppliers or service providers can be identified according to the goods or services that they
provide.
All Federation staff involved in procurement activities may have access to the supplier
database, but must agree to keep all information contained in the database confidential.
2.2.2.1. Approval for registration in the supplier database
If a supplier has been entered in the database, it means that the supplier has been pre-
qualified to provide particular goods or services. There is no guarantee that a supplier who
has been entered in the database will be selected to receive a request for proposal (RFP) or
a request for quotation (RFQ). Similarly, there is no guarantee that a supplier who has been
entered in the database will receive a purchase order or a contract from the International
Federation.
In order to register and approve suppliers or service providers in the database, the
procurement entities should use a pre-formatted registration form. For the template, please
see appendix 1.
This form is issued to:
(a) New suppliers or service providers who request for registration application as
potential suppliers in the supplier database.
(b) New suppliers or service providers who respond to a request for proposal or a
request for quotation issued by the International Federation.
(c) New suppliers or service providers who are recommended by one of the regional
logistics units or field offices.
(d) Existing registered suppliers or service providers in order to update the database.
To be considered valid, all applications must be signed by an authorized person who certifies
the accuracy of the information provided. The supplier’s application has to be checked before
it can be approved for registration. The designated procurement officer should check the
following points on the application:
(e) Financial health of the supplier (through the figures provided).

(f) Does the supplier’s item range and reference list comply with the International
Federation’s identified needs?
(g) Has the supplier or service provider acknowledge and accepted to comply with the
ethics and quality management of the International Federation? The service provider
must acknowledge the Staff Code of Conduct.
All appropriate certifications must be attached to the supplier registration form. If the supplier
or service provider fails to provide such information, it may constitute grounds for the
supplier’s application to be rejected. The procurement entity should verify the accuracy of the
information provided by the applicant, by using the supplier registration checklist. For the
template, please see appendix 30.
There may be other reasons for rejecting an application:
(h) The item or service offered is not relevant.

(i) The supplier fails to demonstrate financial stability.
(j) The supplier’s or service provider’s business experience or capacity does not match
the requirements.
(k) The supplier or service provider fails to demonstrate technical competence or
professional certification.
(l) The supplier or service provider provides false information.
The application should be verified and recorded directly on the questionnaire, with the
designated procurement officer’s signature.
Once the supplier’s application has been evaluated and the decision to accept or reject the
registration has been taken, the designated procurement officer must write to the supplier or
service provider with the outcome of the application. If the application is unsuccessful, a brief
description of the reasons for rejecting the application should be included.
2.2.2.2. Database maintenance
To work effectively, the supplier database needs to be regularly updated and maintained. All
staff carrying out procurement activities are responsible for recording all historical business
transactions (including claims or issues) with suppliers.
Each member of staff who registers a supplier is responsible for maintaining and updating
supplier or service provider information, for example, checking if the goods or services are
still needed by the International Federation.
Major suppliers or service providers, who work frequently with the International Federation,
should have their registration renewed or their information updated at least every three
years.
2.2.3 Supplier evaluation
In order to keep the database up to date, the International Federation keeps records of
registered suppliers’ or service providers’ performance. This concerns registered suppliers or
service providers which have been awarded with contracts or purchase orders.
The assessment can be carried out on two levels:
(a) A first evaluation is carried out when the goods or services have been delivered and
the file closed, through the file cover note.
(b) A second and more detailed evaluation can be carried out regularly (every six months
or once a year) according to the performance evaluation process of suppliers.
The first evaluation of the supplier can be short as it is carried out as the file is closed. The
requester or procurement officer should check that the goods arrived on time and at the
specified destination, in a good state and compliant with the quality standard required. For
services, the assessment should be carried out when the deliverables are provided.
Compliance with terms and conditions of the purchase order or purchase contracts should
also be checked.
The second evaluation of the supplier takes place on a regular basis after the first purchase
order or contract has been awarded. The assessment can be more detailed as it is based on
several purchase orders or contracts, and focuses on the performance of the supplier.
A number of criteria should be taken into account when evaluating the supplier:
(c) Quality of the product or service provided

(d) Compliance with contractual terms and conditions
(e) Delivery: punctuality, commitment, responsiveness, service, storage ability
(f) Efficiency in responding to requests
(g) Adherence to warranty provisions
(h) Speed and cooperation in resolving problems and/or settlement of claims
(i) The supplier’s knowledge of his field
(j) Financial health
(k) Feedback from procurement service users
Complaints about the quality of goods or services should also be taken into account, as well
as the corrective actions adopted if any. Finally, the procurement officer should forward the
results of the assessment to the supplier or service provider so that the supplier or service
provider can take any corrective measures if necessary.
2.2.4 Supplier quality assurance
In the following cases, there should be a specific evaluation to ensure quality compliance:
(a) For specialized goods or services, especially food or medical goods, where special
inspections are mandatory in order to ensure high quality and compliance with
international standards.
(b) Where the goods are of a high value.
(c) Where there is a potential risk associated with quality or social and labour conditions.
Quality assurance may be carried out at various stages during the supplier registration
process, and is carried out additionally during the solicitation process and contract
management stages, specifically:
(d) Inspection by the requester (e.g. pre-shipment and/or post-shipment inspection).

(e) Quality systems standard (e.g. ISO standards, ANSI standards or Good
Manufacturing Practice (GMP).
The procurement officer should include relevant provisions in the request for quotation or
request for proposal, requesting samples, and proof of adherence to a quality assurance
scheme or specifications as applicable. Further in the purchase order or contract, standard
provision should be included reserving right for inspection by an independent surveyor
appointed by the International Federation. For details, please see section 2.11.
2.2.5 Removal from the supplier database
2.2.5.1. Decision of removal
Suppliers or service providers will be removed from the database in the following cases:
(a) Substantial breach of contract with the International Federation (including materially
poor performance, failure to comply with social standards or applicable legislation)
(b) Bankruptcy or a decision of legal incompetence
(c) Decision, after initial registration, that the products or services are not needed by the
International Federation
(d) Criminal conviction or civil judgment against the supplier or service provider or any of
the senior executives for the commission of any offence indicating a lack of business
integrity
(e) Grounds for suspicion of breach of established Federation standards (violation of the
fundamental principles or social and ethical standards)
(f) Documented collusion with other suppliers or service providers or any interference
with Federation solicitation processes
(g) Failure to respond to three successive solicitations without reasonable explanation
(h) During ongoing formal disputes between the supplier and the International Federation
(i) Negative evaluation with no improvement or corrective action once an action plan has
been determined
The head of the relevant procurement entity – GLS for global suppliers, the regional logistics
unit for regional suppliers and the field office for local suppliers – will review the
circumstances and decide whether or not a supplier ought to be removed. Suppliers should
be notified of the decision to remove them from the database in writing, with the reasons
clearly stated. The decision to remove a supplier should be entered against the supplier’s file
in the supplier database.
2.2.5.2. Coordination with the legal department
The legal department must always be consulted before taking action to remove a supplier or
a service provider from the supplier database for reasons related to breach of contract, as
mentioned in point (a) in section 2.2.5.1. Additionally, the legal department must also be
notified immediately if a supplier or service provider threatens or initiates a formal claim or
lawsuit, or if legal action against a supplier or service provider is being considered.
2.2.5.3. Supplier re-qualification
Suppliers or service providers who have been removed from the supplier database may be
given the opportunity to re-apply for database registration if they can show evidence of
corrective action or improvement following their removal. The supplier or service provider
may re-submit an application after a minimum of six months has passed. The decision to re-
approve a supplier or service provider lies with the head of procurement at GLS, the head of
regional logistics unit or the head of field office (depending on the type of supplier: global,
regional or local).
2.3. Framework agreements
2.3.1 General
A framework agreement is a long-term agreement (generally two years) established between

the International Federation and one or more selected suppliers for the supply of an
undetermined quantity of a certain item at a fixed price for a specified period of time.
Framework agreements are established following a solicitation process and they are used for
items where there is a high demand for large quantities of the same item.
Framework agreements also generally require that suppliers reserve and store an agreed
quantity of commodities either at their premises or at Federation warehouses.
Framework agreements are usually established at a global level, but they may also be
established at regional and local levels.
(a) Global framework agreements
Global agreements are used for standard relief and medical items which are needed in
emergency operations. Such items include blankets, mosquito nets, tarpaulins, kitchen sets,
jerry cans and vehicles, among others. This is the most common type of framework
agreement.
(b) Regional framework agreements
Regional agreements are used to cover needs within a geographical region for goods that
will be specifically used by communities of that region. These regional agreements are used
when a more tailored approach is required.
(c) Local framework agreements
Local agreements are used to cover local needs within a specific country. If there is a
tendency for a country to buy the same commodity on a frequent basis, then it makes sense
to establish a local framework agreement. This type of agreement is rarely used.
2.3.2 Establishment of framework agreements
The decision to establish a framework agreement for a specific item is based on needs
assessment, procurement volume and frequency of requests of the same item. Before
launching any framework agreement process and solicitation process, GLS in Geneva must
be consulted.
The procurement entity is responsible for estimating yearly procurement volumes and
submitting the file for approval as per logistics technical authorization levels (see section
1.3.5.2). If the total purchase value exceeds the estimate, the procurement entity should
submit the file according to the logistics technical authorization levels.
The solicitation process for establishing global framework agreements is an open worldwide
solicitation process. Based on this, offers are then received under a sealed bid system. For
details on the solicitation process, please see sections 2.5, 2.6, 2.7 and 2.8.
Where the supplier working through a framework agreement reserves and stores an agreed
quantity of items, items should be ready in case of an emergency and there should be a
guaranteed stock level at any given time (except when replenishment is necessary after a
large-scale sudden-onset emergency).
Potential suppliers for framework agreements are selected based on their professionalism
and knowledge of international trade, their reliability, production capacity, stock availability,
price range, quality assurance as well as their previous service record.
All global and regional framework agreements should be submitted to the Geneva
Committee on Contracts for approval, regardless of their estimated value.
Purchasing goods through framework agreements ensures that:
(a) The goods comply with the specifications set out in the emergency items catalogue.
(b) The goods are produced by reliable suppliers who have a long-term commitment with
the International Red Cross and Red Crescent Movement.
(c) The quality of goods complies with the requirements and has been tested.
(d) The goods are available for the exclusive use of the International Red Cross and Red
Crescent Movement.
(e) The goods are strategically stored in the right location.
(f) The goods are available whenever needed and at an agreed price.
(g) The orders can be placed immediately.
2.3.3 Use of framework agreements
Using framework agreements avoids the lengthy process of soliciting, inspecting samples,
selecting suppliers and awarding contracts. Framework agreements guarantee product
quantity and quality at an agreed price with delivery within an agreed timeframe – all with one
requisition form.
All staff involved in the procurement of items with standard specifications (including Geneva,
regional logistics units and field offices) must first check whether a framework agreement
exists for the item. If a framework agreement already exists, then the item may be procured
outside of the framework agreement only with the prior written approval of the head of GLS in
Geneva.
Procuring standard items outside of framework agreements is only considered if:
(a) There is an extremely urgent need for an immediate delivery of goods.

(b) There is a need for higher volumes than the supplier can provide.
(c) The required goods have different standards and specifications from those outlined in
the framework agreement.
The list of current framework agreements is available on FedNet. The list is updated
regularly.
2.4. Requisitioning supplies and services
2.4.1 General
As soon as there is a need to purchase goods or services, the requester should prepare a
request for the purchase. This request for procurement is called a logistics requisition.
The logistics requisition may be referred to internally as an LR. It defines the requirement for
procurement and serves as the authorization document for the procurement entity. The
logistics requisition must be approved by the project manager and validated by the relevant
finance officer. For the logistics requisition template, please see appendix 2.
2.4.2 Issuing a logistics requisition
The requester is responsible for issuing the logistics requisition. Before it is issued, the
requester should identify:
(a) the quantity required

(b) the quality required (clear description of items and specifications)
(c) the delivery schedule
Once the requirements have been identified, the requester should check if the items are
standard and listed in the Emergency Items Catalogue15. The Emergency Items Catalogue
may be referred to internally as the EIC.
If the items are not standard and the specifications do not match those of items listed in the
emergency items catalogue, then the requester needs to write clear and detailed
specifications.
If the requester needs specific procurement such as medical, food, consultancy, construction
works and services, technology hardware and software, vehicles and spare parts, fixed
assets, land or buildings, detailed procedures and recommendations are provided under
chapter 3 of this manual.
The requester should include the following elements in the logistics requisition:
Specifications: Include a description of each of the items. The description should be full and
clear so that the procurement entity who receives the logistics requisition can identify
potential suppliers. If available, any specifications should also be included. If no
specifications are available, this should be stated on the logistics requisition, together with
enough information so that the procurement entity will be able to have a clear description for
15
The catalogue provides generic technical specifications for essential items. Information about the Emergency Items Catalogue
is available on FedNet.
the goods or services and identify potential suppliers. In case the specifications do not exist
in the catalogue, it is recommended to consult technical departments so as to ensure that the
specifications are appropriate to the required items. Specifications should be written in an
objective manner so that they do not favour any particular supplier over another.
Delivery date: The delivery date of goods and services is often essential to the success of
operational programmes. The requester filling out the logistics requisition should provide an
objective and realistic delivery date, since the time line between the logistics requisition
issuance and the expected delivery date can have an impact on the mode of transport
chosen and therefore on the overall cost. The requester should consult the GLS, the relevant
regional logistics unit or procurement entity before completing the logistics requisition in
order to obtain detailed information on timings and the cost of different modes of transport.
Please note that the term ‘ASAP’ or ‘as soon as possible’ should not be used as a delivery
date. Delivery dates should be as specific as possible and it is preferable to use a specific
calendar date, such as 15 January 2011 If this is not possible, use terms such as ‘within one
week’ or ‘within four days’. If a multiple delivery is required, precise delivery schedule for
each consignment should be specified on the logistics requisition.
Consolidation of logistics requisitions: As far as possible, logistics requisitions should be

consolidated by type so that economies of scale may be realized. It is strictly forbidden to
split a logistics requisition to avoid the need for authorization.
Availability of funds: The project manager should approve the expenditure, and check that
funds have been validated by finance and are available in the programme account to cover
the purchase. Only the finance officer’s signature confirms that the funds are available.
In the case of a logistics requisition for services, the requester should attach the Terms of
Reference to the logistics requisition. Terms of Reference define the scope required from a
service provider.
The Terms of Reference should include the following elements:
(a) Expected deliverables according to required specifications

(b) Specifications of the data that must be submitted for approval
(c) Definition of the schedule for initial submission and review time required
(d) Description of all the standards applicable to the service that the service provider
must fulfil
(e) Detailed list of all data and services which must be performed
The project manager needs to sign the logistics requisition. Once the logistics requisition has
been completed, approved and signed, as per details provided under section 1.3.5 of this
manual, it should be sent by the requester to the relevant procurement entity.
2.4.3 Receiving a logistics requisition
When receiving logistics requisitions, the procurement entity should first check that they are
authorized or have the capacity to procure the goods or services. According to authorization
levels and their capacity, the logistics requisition should be forwarded to the relevant
procurement entity as per details provided under sections 1.3.2.5 for regional logistics units
and 1.3.2.7 for filed offices.
If the procurement entity is able to procure the goods or services, a member of the team
should be designated as procurement officer. The designated procurement officer will assign
a procurement file reference number and open a procurement file.
If the items required are standard items but the requester did not mention an existing
framework agreement, the procurement officer should check if any framework agreement
exists for the item (local, regional or global). For details, please see section 2.3.
If no framework agreement exists, the procurement officer should prepare a request for
quotation or a request for proposal. For details, please see section 2.5.
2.5. Solicitation
2.5.1 Types of document
Depending on the nature of the procurement, the International Federation uses three
standard documents in its competitive price solicitation process. These are the request for
quotation (RFQ), the request for proposal (RFP) and the invitation to tender.
(a) Request for quotation (RFQ): This is the formal solicitation document used in the
procurement of standard goods or goods with known specifications. The final
contractual document in the request for quotation process is the purchase order.
(b) Request for proposal (RFP): This is the formal solicitation document used in the
procurement of goods where the specifications are either complex or not detailed
enough, or where proposals from bidders are preferred. This document is also used
for soliciting services rather than goods (including travel services). The final
contractual document in the request for proposal process is the purchase contract for
goods or the service contract for services.
(c) Invitation to tender: This is the formal solicitation document used in the procurement
of construction works and services. For details, please see the procedures for
construction projects available on FedNet portal.
This section focuses on the request for quotation and the request for proposal. Information
about the invitation to tender is described in the procedures for construction work and
services.
The standard templates for a request for quotation or request for proposal should include the
precise terms and conditions that apply to any procurement. However, if there is a
requirement of a specialized nature, procurement officers should, at their own discretion, add
appropriate conditions to the template document. For the standard RFQ and RFP templates,
please see appendices 3 and 4.
The International Federation’s general terms and conditions should be attached to all
requests (RFQ or RFP) that are sent to suppliers. They form an integral part of the
solicitation documents, the purchase order or purchase contract.
2.5.2 Types of solicitation
The International Federation uses two types of solicitation to procure goods or services:
(a) Restricted tender: The restricted tender invites a limited number of suppliers to bid
(but always a minimum of three suppliers), who have been pre-qualified. Pre-
qualification means that the suppliers have been assessed and deemed to have the
necessary capacity required by the International Federation.
(b) Open tender (or public tender): The open or public tender is open to all suppliers, who
are interested in the request for quotation or request for proposal. A public
advertisement invites interested suppliers to request the solicitation documents in
order to bid to the procurement entity.
The International Federation uses an open tender:
When there is no list of potential suppliers.

When there is an intention to establish a framework agreement.
If there is legislation that requires an open or public tender.
For templates of public advertisement for goods and services, please see appendices 5 and
6.
2.5.3 Selection of suppliers or service providers for solicitation
The procurement officer is responsible for selecting the suppliers or service providers who
will receive the solicitation. The procurement officer should first check the supplier database
to see if there are any registered suppliers or service providers who fulfil the requirements.
The selection of suppliers or service providers to receive solicitations should be carried out in
a way which ensures the transparency of the process and the confidence of all donors,
suppliers and other interested parties.
When selecting suppliers or service providers from the supplier database, the following
should be taken into account:
(a) Include the last successful supplier(s) or service provider(s) for the same items or
services and the two closest competitors
(b) For field-generated requisitions, include known suppliers or service providers
operating within the region
(c) Add any newly identified suppliers or service providers or suppliers known by the
team to the list of targeted suppliers or service providers. This provides new suppliers
or service providers with the opportunity to compete and encourages a better
geographical spread.
If there are no registered suppliers, then the procurement officer should identify potential
suppliers or service providers according to the sourcing process described in section 2.2.1.
The procurement officer must invite a minimum of three identified suppliers or service
providers to quote on all procurements over CHF 1,000, except in the case of proprietary
items for which the manufacturer is the sole supplier. The procurement officer must explain
why the supplier is the only source of supply and should provide detailed reasons, for
example, the item is unique, patented or is subject to national legislation. For further details
on exceptions, please refer to section 2.6 of this manual.
Procurement officers should use their judgement and professional expertise to determine the
appropriate number of suppliers or service providers for each solicitation.
2.5.4 Preparing requests for quotation and requests for proposal
When preparing the request for quotation, care should be taken to ensure that the goods
specifications are written in an objective manner so that they do not favour any particular
supplier over another.
2.5.4.1. Common requirements for RFQs and RFPs
The request for quotation or request for proposal should mention the following:
Reference to original the logistics requisition: Requests for quotations or requests for
proposals must always include a reference to the original logistics requisition reference
number as the logistics requisition provides information on the requirement, authorization
and funding.
Specifications: The specifications of the goods or services (the Terms of Reference attached
to the request for proposal) should be described in as much detail as possible. The exact
quantity of each line item needs to be specified, together with any quality standards. For
standard items that are listed in the Emergency Items Catalogue, the catalogue code should
be quoted.
Special requirements: If not fully explained in the specifications, any special requirement
which is an essential part of the procurement should be included here. This may include
information about spare parts, user manuals, packing and marking, foreign languages,
service support, warranties, maintenance agreements, requirement for samples or
importation requirements, among others.
Any special requirements need to be included in the request for quotation or request for
proposal so that suppliers or service providers can take them into consideration when
preparing their proposals.
Use of brand names: References to brand names, catalogue numbers of manufacturers or

similar classifications should be avoided, as this will limit the list of potential suppliers. If it is
necessary to quote a brand name or the catalogue number of a particular manufacturer in
order to clarify an otherwise incomplete specification, the words ‘or equivalent’ should be
added after such a reference. The specification should allow bids for goods that are similar in
function and perform equally as well to those specified.
Provisions for payment terms: The standard Federation payment terms are ‘within 30 days
after receipt of goods and documents in good order’ for goods or ‘within 30 days upon
approval of the deliverables’ for services. Although this is the standard provision, there may
be exceptions. Exceptions could include substantial discounts for early payment, partial
payments for phased deliveries and partial pre-payments when the supplier needs to
purchase materials to complete the task.
The standard payment terms must be offered in the first instance. Alternate payment terms
may only be offered in exceptional circumstances following approval from the finance
department.
Terms of the bid or proposal submission: Each request for quotation or request for proposal
should include the terms of the bid or proposal submission. This should include the method
of response (by fax, e-mail or sealed envelope), the contact details of where to submit the
offer (fax number, e-mail address or postal address), the deadline for acceptance and the
period of validity of the offer. In the event that the bids will be opened in public, this should be
mentioned in the terms of the bid.
Bid submissions: Any bid submission for procurement with a logistics requisition
value exceeding (a) CHF 100,000 for GLS procurements and (b) CHF 20,000 for
regional logistics unit or field office procurements must be received in a sealed
manner (either by sealed envelope, sealed fax or through an electronically protected
system). If an envelope is used, the bid reference number, the bid closing date, and
time and location of the bid issuance must be marked on the envelope. If the bid is
submitted electronically, the use of the system must be approved by the head of GLS.
If an RFQ or RFP stipulates that bids are to be sealed, it should also state clearly that
any offers that do not adhere to the sealed bid system will automatically be rejected.
Response time: When deciding on the response time, the procurement officer should
refer to the requested delivery date mentioned in the original logistics requisition, but
should also take into account the complexity of the specifications and ability of the
suppliers to meet the deadlines. After discussion with the requester, the procurement
officer may need to change the response time to be more realistic.
Bid validity: The bid validity is the period of time during which the supplier or service
provider may accept a purchase order or contract against the offer submitted. The
procurement entity sets the bid validity and it should allow the procurement officer
sufficient time to consider the details of all the bids and decide on the winner of the
contract. However, this period of time should not be so long that prices or availability
are affected by market or currency fluctuations.
Evaluation criteria to award the purchase order or contract: When appropriate, the basis
upon which a supplier or service provider will be awarded a purchase order or a contract is
written in the solicitation documents. If the intention is to award the contract on the basis of
best value, the criteria and the methods that will be used to determine best value should be
developed by the procurement entity.
The International Federation’s responsibilities: It should be stated in the request for quotation
or request for proposal that apart from the obligation to treat suppliers’ information in a
confidential manner, the fact of submitting such information to the International Federation
does not constitute any further obligation or liability for the International Federation.
The International Federation’s general terms and conditions (specific to procurement type):
The general terms and conditions should be attached to the request for quotation or request
for proposal: either the general terms and conditions for purchases in case of goods
supplies, or the general terms and conditions for services in case of services supplies.
Specific conditions are available for air operations (‘Terms and Conditions for International
Federation Charter’ for details please see the air operations guidelines). The applicable
general terms and conditions must be accepted by the supplier or service provider as a
condition of contracting with the International Federation. For details, please see section
2.10.
As a general rule, significant requirements that have not been specified in the request for
quotation (RFQ) or request for proposal (RFP) cannot be asked, claimed or included in the
subsequent contract or purchase order, unless this has been specifically agreed in advance
with the supplier or service provider.
2.5.4.2. Specific requirements for the request for quotation (RFQ)
There are some requirements specific to the RFQ:
Grouping of similar items: Similar items should always be grouped together to ensure best
value for money, although suppliers will not necessarily be required to bid on all items.
Samples: When required, the RFQ should clearly state the quantity of items to provide (e.g.
two samples), size or other clear description and a description of the tests to be applied. If
sampling is mandatory (such as for food, parcels, framework agreements), it must be clearly
stated in the request for quotation. It should also be clearly stated that the International
Federation does not pay for samples and that they are non-returnable.
Changes in quantities: Where the exact quantity required is not determined in advance, a
pre-defined rough quantity or the number of batches may be indicated on a solicitation, with
a provision stating that the International Federation reserves the right to increase or
decrease the indicated quantity by a stated percentage. This provision should not be used for
variations in quantity that exceed 25 per cent of the indicated rough quantity.
Indefinite quantities: Where a defined quantity cannot be determined in advance, an

indicative quantity should be stated on the solicitation. The indicative quantity may be derived
from quantities purchased in an earlier period or in a similar operation. A provision should be
included in the request for quotation that states that the International Federation does not
guarantee that the indicative quantity will be required. Such a request for quotation should
specify a defined termination date for any order against the resulting contract. Such a
termination date should not be longer than one year from date of the purchase contract or
purchase order, but might be shorter based on pricing trends (e.g. computer prices fall
quickly when new models are introduced.).
Here are two examples of suitable clauses to be mentioned when introducing indefinite
quantity invitations:
The intent of this request for quotation is to secure unit prices on the above-mentioned
articles during the period starting from (date) to (date) inclusive and, subject to
satisfactory service, during this period the requirements of (ordering office) will be
purchased from the successful bidder. The quantity of goods to be purchased
according to this method is not guaranteed. Our experience has been that over the
same period, samples between (numbers of units) and (number of units) were required.
or
The above-mentioned quantities are an indication of possible item requirements during
the period starting from (date) to (date) inclusive. The requirements of (ordering office)
during the above-mentioned period, subject to satisfactory service, will be purchased
from the successful bidder. However, no guarantee is made of the total quantity to be
purchased during the period.
Alternative clause: As it is not always possible to get the exact specifications, delivery terms
or all the information expected by the requester, the request for quotation should include a
clause stipulating that ‘Alternatives to the requested specifications may be considered’.
Terms of delivery: These are essential in order to clearly define the responsibilities, minimize
the possibility of misunderstanding and subsequent disputes, and ensure that the requester’s
needs are met. In most of the cases, the trade terms of the International Chamber of
Commerce (ICC), referred to as Incoterms 2010, may be sufficient.
The procurement officer who prepares the request for quotation should use the Incoterms
2000 as required by the International Federation. The International Federation commonly
uses the following Incoterms: CPT, FCA, DAP and DAT. For details, please see section
2.11.1.
The required Incoterms should always be mentioned, for example, Incoterms required +
name of destination + Incoterms 2010. It should be stated in the following format: ‘DAP Kuala
Lumpur Incoterms 2010’. The named place of collection, the named place of destination, the
named port of shipment or the named port of destination should also be stated.
If the procurement officer wishes to retain the option to purchase the transportation
separately from the goods, the request for quotation may require quotes on separate terms
of delivery, as applicable.
In the case of local procurement, where the goods are of local origin, Incoterms 2010 cannot
be used. The procurement officer should therefore state the mode of transport for delivery
and state the named place of destination. Transfer of ownership, transfer of risk and liability
at the named place of delivery should be clearly specified in the request for quotation.
For details on transport and insurance, please see section 2.12.1.
The time and place of delivery: The request for quotation must provide the prospective
suppliers with specific information about the required delivery date, except in the case of
indefinite quantity requests. Suppliers may be invited to quote their best possible alternative
delivery offers, including schedules of partial shipments if this would be acceptable. Where
the urgent need of an item overshadows other considerations, the possibility of early delivery
might be an important factor in the evaluation of the offer.
The place of delivery and the method of delivery (where applicable) must be stated in the
request for quotation.
Insurance for transportation of goods: The International Federation carries a global transport
insurance policy which covers the movement of its goods worldwide. Unless specific reasons
exist to put the burden of risk upon the supplier, it should be stated in the request for
quotation by using appropriate Incoterms that insurance is the responsibility of the
International Federation. If the supplier is required to provide insurance, it must be mentioned
in the request for quotation that the insurance is the responsibility of the supplier and
reimbursed at cost. In this case, the supplier is required to provide the procurement officer
with a valid certificate of insurance.
Inspection requirements: In compliance with the International Federation’s general terms and
conditions, it is recommended to inspect goods or samples before the bid is accepted, for
example, when procuring bulk foods from a new supplier. For details on food procurement,
please see chapter 3 section 2. Inspection may also be mandatory because of specific
country requirements.
In the event that an inspection is required, a clause must be included in the request for
quotation stating that the International Federation will be responsible for carrying out an
inspection of the goods.
2.5.4.3. Specific requirements for the request for proposal (RFP)
Request for Proposal has to indicate evaluation criteria which will be applicable and the
relative weight assigned to each criteria. In adopting the evaluation criteria and rating for
technical proposals, the procurement entity shall ensure that the selected service provider is
the most likely to provide the best quality for the requested services. Therefore a good
practice is to have those who prepared the Terms of Reference (ToR) prior to tendering
advice on the choice of criteria with subcriteria and the points given to each. For details see
clause 2.8.4. The following example of criteria can be indicated as a basis for evaluation of
the bids:
• Administrative Evaluation and Specific Experience of Service Provider

• Adequacy of Proposed Methodology and Work Plan
• Qualification and Competence of Proposed Key Staff
• Suitability of the Transfer of Knowledge (Capacity Building)
• Cost
The technical weight is normally 70 percent, with 30 percent for cost. Allocating more than 30
percent to the cost of the services is justified only for the selection of inspection agents,
which may be weighted up to 50 percent. Cost should not be weighted less than 30 percent;
otherwise, the benefits of price competition would be minimal.
The procurement officer should attach the Terms of Reference (ToR) with the request for
proposal. For the Terms of Reference template, please see appendix 7.
The request for proposal should provide details of the services to be performed and the
International Federation’s requirements. Among others the following requirements should be
requested:
(a) Solution or service details

(b) Implementation plan of the service required
(c) Upgrades (if appropriate, for example in IT services)
(d) Maintenance
(e) Cost
(f) Performance, reliability and security requirements
(g) Documentation
(h) Training provided
2.5.5 Amending requests for quotation and requests for proposal
If the request for quotation or request for proposal needs to be modified in any way after it
has been issued to prospective suppliers or service providers, a written amendment should
be sent to all the suppliers or services providers who received the original solicitation.
The written amendment should be issued before bids or proposals are received and it should
quote the original reference number and solicitation. The details of the amendment should be
stated in a clear and complete way.
2.6. Exceptions to calling for bids or proposals
2.6.1 Approved exceptions
Purchase orders or contracts may be awarded without a formal solicitation only when:
(a) The proposed contract involves commitments amounting to less than CHF 1,000 and
the goods or services being supplied are compliant with specifications or Terms of
Reference, delivery requirements and available funding.
(b) The prices or rates are fixed pursuant to national legislation or by regulatory bodies
with jurisdiction over the procurement entity. The procurement entity needs to justify
this in writing.
(c) Goods or services have been standardized (standardization published and

communicated) or the range of goods deals with proprietary items, thus rendering
competition unfeasible.
(d) The requirements of the operation leave no time to conduct the solicitation process
(e.g. in the case of goods to be purchased in response to a disaster or other type of
emergency). Before awarding a contract under this exception, the procurement officer
should consider the feasibility of splitting the requirement into two parts: one part
being awarded on an emergency basis and the other through a competitive bidding
process, if this is acceptable to the requester.
(e) The purchase order or contract award is made within 90 days of a prior award for
identical goods or services, at the same conditions, where this involved the same
supplier or service provider and where the procurement process was carried out in
full compliance with the procurement procedures described in this manual. However,
no more than two repeat awards may be permitted (for a total of three purchase
orders or contracts) and they cannot exceed the value of the original purchase order
or contract.
2.6.2 Use of exceptions
Exceptions should be authorized by the head of GLS. The procurement entity should limit the
use of exceptions as far as possible and ensure best value for money is obtained.
Procurement officers should exercise sound judgement and caution when applying any of the
above exceptions, and when awarding a purchase order or contract without calling for bids.
When invoking an exception, the procurement officer should issue a note for the
procurement file. Whichever exception is applied to a bid, a written record of the responses
should be maintained on a comparative bid analysis worksheet and the evaluation processed
as indicated in section 2.7.
In case of emergency, before applying an exception, the procurement entity should consider
calling for bids whilst giving a short deadline for bid submissions. It is important to remember
that the procurement entity should seek to apply the formal solicitation procedure.
2.7. Submission and receipt of bids
2.7.1 General
Unless specified otherwise, the submission and receipt of bids in the International Federation
is carried out internally where there is no public opening.
If specified in the request for quotation (RFQ) or request for proposal (RFP), bids can be
opened publicly at a specific date, time and location. The decision to open bids publicly
depends on the national laws or legislation.
Sealed bids should be requested and obtained for bids or proposals with a value greater
than:
(a) CHF 100,000 for GLS in Geneva

(b) CHF 20,000 for all other procurement entities
2.7.2 Receiving bids
All bids and proposals should be received by the requesting procurement officer. They are
date and time stamped upon receipt.
The receipt of bids or proposals is subject to strict deadlines. Bids or proposals received after
the announced deadline will be stamped with the time and date of receipt and placed in the
procurement file. However, they should not be considered and evaluated with other bids,
which were received on time.
Based on what was set out in the RFQ or RFP, bids or proposals can be submitted by:
(a) Open bid (by fax or e-mail) – The machine date and time stamp has probative force.
In the event of an e-mail submission, bids should be signed and stamped by the
official representative of the bidder, while the bidder should request an
acknowledgment of receipt from the procurement officer. Where bids or proposals are
expected by fax or by e-mail, fax machines or specific e-mail inboxes should be
checked regularly in order to ensure the accuracy of the time of receipt. These tools
must be set up to ensure that any received bids are not opened until after the bid
submission deadline has passed. Once the deadline has passed, they should then
provide read-only access to the bid documents.
(b) Sealed bid (by sealed envelope) – The time and date of receipt are stamped on the
envelope in order to prove the receipt of the documents. In the case of a request for
proposal (RFP), mainly for services, two separate envelopes are normally required:
one contains the technical proposal and the other the financial proposal. Sealed bids
should be placed in a secure area (in a locked container such as a cabinet) until the
specified opening time.
2.7.2.1. Unsolicited bids or proposals
Some suppliers may submit bids or proposals, even though they have not been invited to bid.
These unsolicited bids or proposals should be brought to the attention of the head of
department, head of the RLU or the head of field office for review.
As a general rule, unsolicited bids or proposals will not be considered. However, if the
unsolicited bid or proposal shows a significant difference in price or reveals that the
solicitation process was not properly managed, then the RFQ or RFP should be closed and a
different procurement officer tasked with re-launching the RFQ or RFP.
2.7.2.2. Modifications to bids or proposals
Any modifications to the bid and RFQ or RFP documents are strictly forbidden. Before bids
or proposals are opened, sealed bids and proposals may only be modified in writing and
sealed in a marked envelope, which is cross-referenced to the original submission. Bids
submitted by fax may be amended in the same way, as long as the amendment is received
before the announced bid deadline. The reasons for any amendment to a sealed bid or
proposal should be explicitly written in the procurement file.
Where suppliers amend a bid, they should submit their amended bid in writing before the
deadline and indicate that it is a revised bid. The procurement officer may, in exceptional
circumstances and at their discretion, extend the deadline for the submission of bids by
issuing an addendum to all targeted suppliers specifying the new submission deadline.
2.7.3 Opening of bids
Suppliers are not invited to the bid opening ceremony unless otherwise stated in the RFQ or
RFP. All bid opening ceremonies for proposed contracts and procurements are carried out by
the local Committees on Contracts for procurements valued at over CHF 20,000.
All bids received should be treated in the strictest confidence. In the event that a sealed bid
or proposal is opened before the deadline, the head of department, head of the RLU or head
of field office should be notified in writing so that they may take further action. In the event
that the bids are retained for evaluation, the responsible procurement officer should be
replaced on the bid opening committee and the bid evaluation carried out by a different
procurement officer.
The tender opening committee must reject:
(a) Any bid or proposal submitted after the submission deadline
(b) Any bid or proposal that does not comply with the majority of the requirements listed
in the Request for Quotation or Proposal
All companies invited to bid and all bids submitted should be recorded in the minutes of the
opening ceremony. For details, please see appendix 8.
2.7.3.1. Services
The procurement entity may ask the service provider to submit technical and financial
information separately in two sealed envelopes.
The inner and outer envelopes should:
(a) Be addressed to the relevant procurement officer

(b) Bear the name and reference number of the contract
(c) Bear a warning clearly stating that they are to be opened only at the time and date of
the opening ceremony
(d) Contain the technical and financial proposals, separately, in two sealed envelopes
The inner envelopes should indicate the name and address of the service provider so that
the proposal may be returned unopened if it is declared to have been received late.
Only technical proposals are opened on the date of submission. Financial proposals remain
sealed until the technical evaluation has been completed.
All documents should be submitted in the form of one original and one copy. The envelope
containing the copy remains unopened while the original is evaluated. The sealed copy
serves for the purposes of comparison, should a dispute arise.
2.7.4 Exchanges with suppliers during the solicitation process
Contact with suppliers during the solicitation process should be kept to a minimum, while
visits by suppliers to the International Federation are not permitted.
However, contact is permitted in order to clarify any points mentioned in the RFQ or RFP.
Questions relating to the bid or proposal not covered in the RFQ or RFP, but which are
essential to the required goods or services, are permitted. Answers to suppliers’ or service
providers’ questions are provided in writing. It is recommended to provide a summary of all
questions and answers to all targeted suppliers or service providers at the same time.
No information relating to the solicitation process itself (e.g. the number of bids or proposals
received or the names of the bidders) should be divulged to any individual or the general
public before the submission deadline, or before the designated sealed bid or proposal
opening time.
Costing data included in suppliers’ or service providers’ offers should be treated as

confidential information. It should not be released to anyone outside the International
Federation or to anyone who does not need access to such information to carry out their
duties.
From the moment the bids are opened until the time that the contract is awarded, any bidder
wishing to contact the procurement entity on any matter relating to the solicitation should do
so in writing. Any attempt by the bidder to influence the procurement entity’s evaluation,
comparison or contract award decision will be considered an attempt at collusion. Such
behaviour will result in the rejection of the bidder’s bid or proposal.
2.7.5 Bidding irregularities
The procurement officer should immediately report any irregularity that occurs during the
receipt, opening and/or recording of bids or proposals to the head of procurement at GLS,
head of RLU or head of field office. Irregularities should be recorded in writing.
2.8. Evaluation of bids
2.8.1 General
At the International Federation, bids or proposals received from suppliers or service

providers in response to a solicitation are evaluated in a process referred as a:
(a) Comparative bid analysis, in the case of goods

(b) Technical evaluation and financial evaluation (CBA for services) in the case of
services
These processes are designed to ensure that the International Federation purchases the
best quality goods or services at the best price. Bid evaluations are carried out by the
designated procurement officer. Bid or proposal evaluations should always be carried out in
strict confidence.
2.8.2 Basic considerations for evaluating bids and proposals
(a) Purchase orders or contracts should be awarded to the best acceptable bid or
proposal in terms of price, which meets the operation’s and tender document
requirements in terms of delivery, quality and specifications.
(b) In order to determine the best bid or proposal, the procurement officer should take
into account the ability of the supplier or service provider (in terms of capacity,
financial stability, integrity and reliability) to perform all the contractual requirements.
Suppliers who are not able to guarantee their level of stock may be required to
provide evidence of access to a dependable source before their bid will be
considered. Similarly, a supplier should be required to provide proof of their ability to
manufacture or produce the required goods.
(c) In the event that a supplier’s or service provider’s bid or proposal is rejected on the
grounds of a lack of reliability, the reasons for rejection should be specified on the
CBA.
(d) If there appear to have been any discrepancies or ambiguities in the solicitation after
the bids or proposals are opened, then the solicitation should be re-launched. In case
of doubt, the procurement officer should seek advice from the relevant head of
department.
(e) All suppliers or service providers invited to take part in and who responded to the
solicitation should be treated impartially. Any additional information concerning the
solicitation should be made available to all the suppliers who were invited to take part.
2.8.3 Methods used to evaluate solicitations
All formal bids and proposals should be tabulated either in a comparative bid analysis (CBA)
worksheet or a tender technical evaluation and financial evaluation (CBA for services)
worksheet. Please see appendix 9 for the comparative bid analysis for goods, and
appendices 10A, 10B and 10C for technical and financial evaluation for services (CBA for
services).
The decision to award a contract to a particular supplier or service provider should be based
on the following objective criteria:
(a) Pricing (price and payment terms)

(b) Compliance with requirements (quantity, content, delivery time), or with the Terms of
Reference (in terms of the price–quality and quality–lead time relationship)
(c) Quality standards (quality level, reliability and in meeting requirements)
Once the comparative bid analysis or the tender technical evaluation and financial evaluation
(CBA for services) have been completed, the procurement officer should provide a
justification for each award recommendation and sign the prepared worksheet.
2.8.3.1. Comparative bid analysis for goods
The comparative bid analysis cannot be prepared and approved by the same person, even if
this person is of the relevant authorization level. In such cases, a second signature from a
person of a higher authorization level is required.
Completion of the comparative bid analysis
The procurement officer should indicate in the comparative bid analysis the potential bid(s) to
be awarded by taking into account each supplier’s bid, and checking off the low bid for each
individual item.
Each bid should be examined closely. If the item offered in the lowest bid meets all the
requirements specified in the RFQ, this should be indicated on the comparative bid analysis
and the relevant bid selected.
Please note that for kits and packed boxes, the award should not be split, unless otherwise
explicitly specified in the RFQ or RFP.
2.8.4. Evaluation of tender for services
2.8.4.1. Setting the evaluation criteria
The evaluation of proposals for services involves applying a rating system. In adopting the
evaluation criteria and rating, the procurement entity shall ensure that the selected service
provider is the most likely to provide the best quality for the requested services. Therefore a
good practice is to have those who prepared the TOR prior to tendering advice on the choice
of criteria with subcriteria and the points given to each. The responsiveness of a proposal to
the TOR is determined by its responsiveness to the adopted evaluation criteria and
subcriteria which should be indicated in Request for Proposal.
2.8.4.2. Evaluation criteria and allocation of points
The following criteria shall be used as a basis for evaluation of the technical proposals:
(a) Administrative Evaluation and Specific Experience of Service Providers
(b) Adequacy of Proposed Methodology and Work Plan
(c) Qualification and Competence of Proposed Key Staff
(d) Suitability of the Transfer of Knowledge (Capacity Building)
The scoring points as per following range should be allocated per criteria:
Evaluation Criteria Points

Administrative Evaluation and Specific experience of the Service Providers 0 – 10
Adequacy of the proposed methodology and work plan 20 – 50
Key professional staff qualifications and competence 30 – 60
Suitability of the Transfer of Knowledge (Capacity Building) 0 – 10
Total 100
In order to help the Evaluation Committee better focus on the different levels of detail in its
evaluation each criteria can be split among the subcriteria. In this case the total points
allocated to each criteria should be split among the subcriteria depending on the relative
importance of each. Sample of subcriterias are given in attached appendice 10A of Technical
and Financial Evaluation of Bids for Services.
2.8.4.3. Rating scale
Above clause specifies the criteria used to evaluate technical proposals and the points given
to each. To make the scoring easier and more transparent, the rating scale of the level of
responsiveness for each criterion and subcriterion is divided into a number the following four
grades: poor, satisfactory, good, and very good.
Rating of the technical proposals is done in two steps. First, the level of responsiveness of
the proposals to each of the criteria or subcriteria is estimated on a grade from 1 to 4.
Second, each grade is allocated pre-determined percentage rate which is divided by 100 and
multiplied by the maximum number of points assigned to the relevant criterion. Details as per
below:
Poor score is 1 point equivalent to 40 %

Satisfactory score is 2 points equivalent to 70 %
Good score is 3 points equivalent to 90 %
Very Good score is 4 points equivalent to 100 %
The lowest grade is 40 percent, instead of zero, because a zero rating is not realistic and it
would imply that the service provider has not responded at all to the TOR under specific
criterion. For example, the criterion “Technical approach and methodology" may have been
allocated a maximum of 12 points. A proposal with a good level of responsiveness to this
criterion is given a score 3 equivalent to 90 percent rating and therefore receives a score of 9
points.
2.8.4.4. Qualifying rate for technical proposals
It is not mandatory to apply a pass-or-fail threshold when evaluating technical proposals.

However, a minimum technical qualifying mark may be provided to reduce the risk of
accepting low-quality proposals at a very low cost. A minimum technical qualifying mark of 70
points is normal. Any technical proposal with a score below this mark is rejected. Service
providers should be free to retrieve their proposal, or it can be destroyed without opening by
the procurement officer.
2.8.4.5. Definition of grades
Definition of grades should be based on specific aspects listed in subcriteria. Ratings should
not be too rigid. If a bidder does not satisfy all the requirements set forth by the definition of
one of the grades, but the grade under consideration appears to reflect the overall
requirement for criteria better than the lower grade, the upper grade should be awarded. An
example of definition is given below:
Poor. The Response to important criteria indicated in the TOR is inappropriate or very poorly
presented, indicating that the bidder has misunderstood important aspects. Important
information is missing. The bidder has limited experience in the similar field of assignments.
The schedule omits important tasks and is inconsistent. There is no clarity in allocation of
tasks and responsibilities.
Satisfactory. The Response to major requirements of TOR is outlined generically. The

proposal is not specifically tailored to the requirements. Although proposal is suitable, there
are no sufficient details on how the bidder proposes to deal with critical requirements. The
information provided but it is generic and does not reflect the specific features of the ToR.
The bidder has experience in the similar field of assignments but has not dealt with critical
issues. All key activities are included in the schedule, but they are not detailed. Staffing
arrangements are adequate.
Good. The response is well detailed and is specifically tailored to the requirements of ToR.
Proposal is flexible enough to allow it to adapt to changes that may occur during execution of
the services. The list of contents is well tailored to the specific requirements of the ToR. The
bidder has extensive experience in the field of the assignment. All important activities are
indicated in the schedule, and their timing is appropriate. The staff is very well balanced staff
skills and needs are matched precisely.
Very Good. In addition to the requirements listed above under "good," important issues are
approached in an innovative and efficient way, indicating that the bidder have outstanding
response and solutions. The proposal details ways to improve the results and the quality of
the assignment by using advanced approaches, methodologies, and knowledge. The bidder
has outstanding, advanced expertise in areas of the assignment. Sequence and timing of
activities are very well defined. The team is integrated, and members have worked together
extensively in the past.
2.8.4.6. Relative weight of technical and financial proposals
Request for Proposal has to indicate the relative weight assigned to the technical and
financial proposals. The weight for quality is normally 70 percent, with 30 percent for cost.
Allocating more than 30 percent to the cost of the services is justified only for the selection of
inspection agents, which may be weighted up to 50 percent. Cost should not be weighted
less than 30 percent; otherwise, the benefits of price competition would be minimal.
Only technical proposals that have been awarded qualifying number of points are eligible for
the financial evaluation envelope to be opened. For details see clause 2.8.4.4. At this final
evaluation stage, the procurement officer checks the financial offers of the technically
qualified service providers for arithmetical errors and abnormal pricing.
The bid with the lowest total price will receive the maximum number of points (30 points),
which equates to the maximum score of 30 per cent. The number of points awarded to each
remaining bid is reached by dividing the total price of the lowest bid by the total price of each
other bid in turn, and then multiplying it by 30. Technical and Financial evaluation results are
recorded on established worksheet. For details, please see Appendix 10C.
2.8.4.7. Conclusion and proposal for award of contract
The overall score is reached by adding the technical score to the financial score. The bids
will be ranked according to the overall score (i.e. technical + financial) and the bid with the
highest score will be considered as the most favourable tender and will be recommended for
award of contract.
2.8.5. Rejection of all bids or proposals leading to tender cancellation
In the interests of the International Federation, all bids may justifiably be rejected on the
following grounds:
(a) When there is obviously a lack of effective competition
A lack of competition should not be determined solely on the basis of the number of bidders.
Even if only one bid is submitted, the bidding process may still be considered valid provided
that the solicitation was forwarded to at least 3 suppliers / service providers and prices are in
line with the market.
If a lack of competition results from poor solicitation, then wider and more effective
advertising should be considered.
(b) When received bids do not substantially meet requirements
If the rejection is due to most or all of the bids being substantially unresponsive, new bidders
may be invited from a wider list of suppliers.
(c) When bid prices are substantially higher than the existing budget
If the lowest evaluated responsive bid exceeds the budget by a substantial margin, the
requester should try to determine the reasons for the excessive cost.
In the event that all the bids are rejected, bidders must be notified of the tender cancellation.
The requester in coordination with the procurement entity should consider making revisions
to the specifications, scope of supply, design, tender terms and conditions, or a combination
of these, before inviting new bids. GLS, RLU or field offices, as authorized, should record in
writing the reasons for rejecting the bids and consider whether to invite new competitive
bidders.
2.8.6. Adherence to specifications or terms of reference
In the case of goods, only bids that offer items meeting the required specifications detailed in
the request for quotation should be considered as eligible. Characteristics that do not affect
the value of an item or service, and that are not included in the RFQ or RFP should be
considered as non-relevant or non-essential. They should not affect the admissibility of the
relevant bid or proposal.
Before awarding a bid or proposal that offers goods or services with specifications inferior to
those in the RFQ or RFP, the procurement officer should first check with the relevant
requester to see whether the proposed goods or services match their requirements.
2.8.7. Evaluation of delivery terms
When the delivery time and destination are the most important factors when awarding a
contract, this should be stated in the RFQ. Bids which do not meet the required delivery
destination or schedule may be disqualified.
In the event that all bids are disqualified in this way and re-advertising is not feasible, then
the best delivery terms offered may have to be accepted. In such cases, the procurement
officer should notify the requester and obtain the latter’s approval before making a firm
commitment.
When an alternative delivery location is offered by the supplier, the cost of transporting the
goods to their ultimate destination should be calculated and added to the CBA worksheet to
all bids that are evaluated on this basis. This enables all the bids to be compared in an
objective manner. In this case, the impact on the delivery time for the requester should also
be considered.
Where a supplier submits a bid which includes transportation, and where the value of this bid
is equivalent to the total value of the bid of another supplier and a separate transportation
contract, then the former should be accepted. Bids that include transportation reduce
bookkeeping and accounting costs and the risk of damage remains with the supplier. On the
other hand, accepting a bid that does not include transportation may be justified if the
separate transportation contract would reduce the overall cost. It should be noted that, in this
case, the risk of damage remains with the International Federation, and bookkeeping and
accounting costs also lie with the International Federation. All costs and risks should be
taken into account before any decision is made.
2.8.8. Evaluation when grouping items
Some suppliers may offer to supply goods on an all-or-none basis. In these cases, the
procurement officer should convert the all-or-none bid prices into pro rata unit prices and
compare them with those of the lowest bid unit prices.
This total cost should be compared with the total cost as represented by the all-or-none bid,
bearing in mind that such a bid would:
(a) Reduce administrative expenses by requiring fewer contracts to be issued

(b) Possibly eliminate inconsequential orders
(c) Provide exchangeability or uniformity of items, where related
All-or-none bids normally cover a large number of low-cost line items, where split-contract
awards would not be advantageous to the International Federation for logistical and
administrative reasons.
The same principle should apply when the procurement officer finds a slight cost difference
when combining separate line items from different suppliers. In this case, accepting all items
from one supplier may be justified, even though splitting the contract may be marginally
cheaper.
2.8.9. Offers of lower quantities
Bids offering to supply goods in lower quantities than the quantity stipulated in the
International Federation’s RFQ may be considered eligible.
An order for a quantity lower than the entire volume of items required should not be placed
with the supplier quoting on the entire volume, unless:
(a) The RFQ stipulates this in the award, or

(b) The supplier agrees in writing that they will accept such an order
2.8.10. Splitting the award for the same item
There are two cases where splitting the award for the same item may be the only solution:
(a) Where the supplier offering the lowest-priced bid cannot deliver the entire volume of
items requested
(b) Where the supplier offering the lowest-priced bid cannot meet the delivery time
requirements
Where an award is split, the two lowest-priced bids should be selected. The lowest bid, which
cannot entirely meet the requirements, should be combined with the second lowest accepted
bid, so that together these two bids are able to meet the requirements.
2.8.11. Tie bids
In some instances, two or more bids may be exactly identical in price and terms. These are
referred to as tie bids.
In practice, there is always some factor among the bids which allows for differentiation in
favour of one supplier. This slight difference should be the deciding factor when choosing
between the bids, provided that such a decision is rational.
In this case, the experienced supplier is favoured based on the following criteria (ranked by
order of importance):
(a) A proven track record within the International Federation

(b) A record with other humanitarian organizations
(c) Experience in the market and financial capacity
Items awarded in such a manner should be clearly specified and explained in the
comparative bid analysis worksheet.
2.8.12. Authorized costs exceeded
Where the cost of an item or service exceeds the estimated cost, or another maximum
amount fixed by the requester, the latter should be informed and asked to provide the
procurement officer with further instructions.
As price may not be discussed with the supplier, neither during the tender evaluation and
analysis nor after the evaluation, the award should be withheld:
(a) Until a revised requisition has been approved by the project manager and revalidated
by the relevant finance officer, or
(b) Until a decision to decrease the quantity to be ordered is taken
2.8.13. Errors, omissions and alterations
(a) Errors in price
The International Federation is not responsible for errors in price made by a supplier or
service provider. However, if the procurement officer has reason to believe that a supplier’s
or service provider’s bid or proposal contains an obvious arithmetical error in the price, then
they should ask the supplier or service provider in writing to confirm the price before
completing the evaluation. No change in price is allowed after the tender deadline.
A note that a query was raised should be recorded in the procurement file, together with the
reply. Corrected arithmetical errors take precedence over calculation mistake.
(b) Supplier’s failure to provide data
A failure to provide certain data with a bid or proposal (such as data that does not affect, in
any way, the price or quality), even when this is required in the RFQ or RFP, should not
automatically result in a rejection of the bid unless otherwise stated. It is the responsibility of
the procurement officer to request the missing data from the supplier or service provider. If
the request is not fulfilled, the bid may then be rejected.
(c) Errors in affixing signature
All bids or proposals should be signed and include the typed or handwritten name of the
person signing. A dubious signature, a missing signature or a signature clearly provided by
someone other than the named signatory should be questioned. Even if there is no space for
the signature, an unsigned bid or proposal should be rejected.
(d) Corrections
Corrections in a bid or proposal should be initialled by the individual who signed the bid or
proposal. If this requirement is not complied with, the bidder should be asked to confirm each
change in writing. On receipt of the confirmation, this should be attached to and form part of
the bid or proposal. No correction or other modification in the prices or terms of a bid or
proposal should be allowed after the submission deadline.
2.8.14. Authorizations of bids modification after the closing deadline
The procurement entity issuing the request for quotation or request for proposal (GLS, RLU
or head of field office, as appropriate) is the only entity authorized to allow a modification of a
bid or proposal by the supplier or service provider after the bid closing deadline, and only in
the event that an obvious mistake is noticed and brought to the attention of the head of GLS,
head of RLU or head of field office, as appropriate. If the error is of a purely clerical16 nature
– such as an error in the placing of a decimal point or in the unit of measurement – the
request for modification or withdrawal may be acted upon by the procurement officer, but
should be documented in the procurement file.
Price negotiations with supplier and service providers are forbidden at any time of the
process.
2.8.15. Recommendation of award
Once the CBA or the technical and financial evaluation (CBA for services) has been
completed, and all the relevant factors have been considered, the procurement officer should
recommend the final supplier or service provider, but has no authority to make the actual
award unless such authority has been delegated. The recommendation should be reviewed
and approved, suspended, modified, or rejected by the head of GLS, head of RLU or head of
field office, as appropriate. Any decision should be recorded on the CBA and technical and
financial evaluation worksheets.
For Technical Evaluation of Services, the decision making authority may ask the submitting
officer or members of local Committee on Contract to explain the recommendations, but
should not request that scores be changed.
In the event that the supplier or service provider offering the lowest price or best rating is
declared unacceptable, or in case of a modification or suspension, a clear, concise and
comprehensive justification should be provided in support of the decision.
If an award is rejected by the Committee on Contracts, the procurement entity should take
one of the following actions:
16
A mistake of a clerical nature means a mistake made in a letter, paper or document that changes its meaning, such as a
typographical error or the unintentional addition or omission of a word, phrase, or figure.
(a) Follow any alternative award that has been approved by the Committee on
Contracts
(b) Re-launch the solicitation, taking into consideration any specific recommendations
made by the Committee on Contracts
(c) Escalate the procurement file to the relevant director or under secretary general for
approval on an exceptional basis
2.8.16. Advance notice of award
An advance notice of award should be sent where the purchase order or purchase contract
cannot be delivered on time, or as quickly as desired. This is particularly important where the
deadline for accepting an offer is approaching, or where immediate notice to the supplier or
service provider to proceed is recommended for some other reason. The advance notice of
award should be sent by fax or e-mail.
An advance notice of award constitutes a formal acceptance of an offer and is a legally

binding contract. Information should be noted and recorded in the procurement file.
2.8.17. Requests for information from suppliers or service providers
Before an award is made, no information regarding the possible acceptance or rejection of

any offer should be made available to any person other than officials of the International
Federation. The reasons for any delay in the award may be given upon request, on condition
that disclosing this information will not harm the interest of the International Federation.
Once the award has been made and accepted, any answers to questions from unsuccessful
bidders regarding the outcome should be limited to:
(a) The name of the successful bidder, but only in the case of an open tender and where
the value of the purchase order is over CHF 400,000. The head of GLS, head of RLU
or head of field office of the procurement entity conducting the tender must determine
if for a particular country of operation - where there are specific rules - disclosing
name of the bidder is applicable considering associated risks
(b) The basis of the award, whether awarded to the lowest bid or best-value bid
If an unsuccessful bidder makes an inquiry about the outcome, and their bid was rejected for
any reason other than price, a brief reason for the rejection should be given. The rejection of
a bid should not be communicated to any other bidder.
2.8.18. Regrets notification
As a courtesy to unsuccessful suppliers or service providers, the procurement officer should

send them a fax or e-mail to inform them that their bid was not selected.
For the standard template of letter of regrets, please see appendix 11.
2.8.19. Changes in quantity prior to a contract award
In general, when the precise quantity of goods is not known at the time of the RFQ, an
estimation of the quantity range should be indicated. Such a provision should generally not
be employed for variations exceeding 25 per cent of the indicated quantity. For details,
please see section 2.5.4.2.
2.9. Guarantees
In order to secure the International Federation’s interests and ensure that goods will be
delivered, work completed and services provided according to the International Federation’s
requirements, securities or guarantees should be used to protect agreements.
There are several types of guarantee, each one corresponding to a precise stage in the
solicitation process and designed to protect the buyer against any loss or violation of
commitment (in a bid submission) or contract.
2.9.1 Bid bond
A bid bond, also known as a tender guarantee, is a form of security which guarantees that
the bidder:
(a) Will not withdraw a bid within the period specified for acceptance, and
(b) Will execute a written contract and furnish the required bonds (such as a performance
bond), including any necessary co-insurance or reinsurance agreements, within the
time specified in the bid (unless a longer period is allowed) after receipt of the
specified forms.
Bid bonds should be used in the following cases:
(c) For large service and construction contracts

(d) When working with new suppliers
(e) In local procurement, where the value of the goods (for all types of purchase)
exceeds CHF 50,000
A bid bond typically represents 1 per cent (up to 3 per cent) of the total tender value.
If the supplier or service provider withdraws their bid upon confirmation of award, the real
loss for the International Federation is marginal (the cost of the tender evaluation). The
contract should then be awarded to the next-ranked supplier or service provider.
The threat of removal from the International Federation’s supplier database for future
contracts is usually sufficient to guarantee seriousness on the part of the participating
supplier or service provider.
2.9.2 Advance payment guarantee
An advance payment guarantee enables the buyer to obtain a refund of advance payments
in the event of default by the supplier or service provider.
An advance payment guarantee is required when working with construction contractors. This
subject is not covered in this procurement manual.
For details, please see the ‘Procurement of works and services for construction projects
procedure’.
2.9.3 Performance bond
A performance bond is a surety bond between two parties, insuring the buyer against losses
if the terms of a contract are not fulfilled by the supplier or service provider.
The performance bond should be used in the following cases:
(a) For construction projects (see the procedure ‘Procurement of works and services for
construction projects’)
(b) For local procurement where the value of the goods is greater than CHF 50,000
For small contracts, where the value of the goods is lower than CHF 50,000, the non-
performance of the supplier would entail a marginal loss; therefore applying a performance
bond is less relevant.
In general and not for the cases mentioned above, the decision to use a performance bond
should be based on factors such as the supplier's reputation and experience, as well as the
cost of the bond balanced against the potential risk to the International Federation.
The performance bond generally represents 5 to 10 per cent of the total contract value.
Performance bonds may be waived in certain circumstances:
(c) In countries with a difficult banking sector

(d) For very small volumes
(e) Where previous positive experience with the supplier exists
2.9.4 Retention guarantee
The retention guarantee allows the buyer to retain a percentage of the payment (retention
money), as cover for hidden defects in the completed work. The buyer can obtain a refund of
retention money released, through the Bank holding the money, in the event of default by the
supplier or service provider.
This guarantee is mostly used in construction projects and is equivalent to the amount held in
a performance bond (5 to 10 per cent of retention money is held by the International
Federation as security in a construction project).
For details, please see the ‘Procurement of works and services for construction projects’
procedure.
2.9.5 Checking guarantee forms
The procurement entity should use the Federation guarantee templates. For the bid bond
template, please see appendix 12. For the performance bond template, please see appendix
13.
In some countries, the banks or financial institutions in charge of issuing guarantees to the
supplier use their own standard guarantee forms. In such cases, the proposed guarantees
should be checked with the relevant finance officer in order to check that the wording is the
same as in the International Federation’s guarantee form.
If the bank guarantee includes limitations regarding the amount or duration that differ from
the Federation form, then it should be rejected and not used.
If the supplier or service provider is unable to provide an acceptable guarantee, the contract
should not be entered into.
2.9.6 Keeping bank or financial institution guarantees
The original tender guarantees or bid bonds are returned to all bidders after the contract is
signed.
Original performance bonds are returned once the contract has been successfully completed
and all goods and documents have been delivered in good order. It is therefore mandatory
that all original guarantees are kept in a safe place that is designate by the procurement
entity.
2.10. Contractual documents
2.10.1 General
Acquisition of goods or services should always be supported by contractual documentation.

Written contracts or purchase orders setting out the contractual obligations of the parties
should be issued for goods and services.
This excludes minor purchases using petty cash which do not require reporting and where
only a written receipt is required.
The contract or purchase order should at minimum specify (for the purchase of goods) in
details the exact description of the goods, the quantity to be delivered, the price of each
article, the conditions of delivery and the payment terms. For services other than staff
services, the contract should specify the nature of the services, the period covered, the
conditions of fulfilment, the amount(s) for service delivery and the terms of payment.
2.10.2 General terms and conditions
Different general terms and conditions exist that are specific to type of procurement. All types
of Federation contracts and purchase orders are subject to the general terms and conditions
of the International Federation. Goods are subject to the International Federation’s general
terms and conditions on purchasing.
Services are subject to the International Federation’s general terms and conditions for all
service contracts.
The general terms and conditions are usually pre-printed on the purchase order or attached
to the contract. If not directly quoted in the contract, a statement should be included so that
the general terms and conditions are incorporated by reference as an integral part of the
contract.
The supplier’s acceptance of the International Federation’s general terms and conditions is
mandatory for the procurement of all goods and services. No purchase order or contract
should be placed with a supplier who has not accepted the general terms and conditions.
Exceptions may be granted only with approval of the legal department, which will assist in
adapting the contract documents to reflect the agreed variation.
Here is a brief summary of the common clauses in the general terms and conditions (for
goods and for services):
(a) Tax exemption: In general, the International Federation is exempt from VAT,
depending on the country, type and destination of goods. In some countries, the
International Federation may have to apply for tax exemption in order to be
reimbursed. In the places where the International Federation has not concluded a
legal status agreement, the International Federation is generally subject to VAT. The
tax status must be checked before tendering and awarding a contract.
(b) Warranties: Supplied goods and services should fulfil their intended use, be compliant
with the specifications and applicable standards and be exempt from any defects
(hidden or apparent) in workmanship and materials.
(c) Force majeure: Legally recognized cases of force majeure prevent the supplier from
performing the work or supplying the goods, and exclude the supplier’s liability in
case of delay for completion or delivery of the goods or services.
(d) Disputes-arbitration: Disputes or claims should be settled by arbitration carried out in

accordance with the Arbitration Rules established by the United Nations Commission
on International Trade Law.
(e) Officials not to benefit: The supplier represents and warrants that no official of the
International Federation has been, or shall be, allowed by the supplier or service
provider to any direct or indirect benefit arising from the contract or the award of the
contract. The supplier or service provider agrees that breach of this provision
represents a breach of an essential term of the contract.
(f) Breach of contract: Any breach of representations or warranties would entitle the
International Federation to terminate the contract immediately at no cost to the
International Federation, and/or to procure the goods or services from other sources
and hold the other party responsible for any delay.
(g) Governing law: Purchase orders and contracts should be subject to the laws of
Switzerland. Variations on this provision are only permitted with approval of the legal
department.
Please note that the list is not exhaustive and does not introduce all the clauses of the
general terms and conditions. For details, please see appendix 14 for Federation general
terms and conditions on purchasing and appendix 19 for Federation terms and conditions for
all services contracts.
2.10.3 Contract forms
Procurement of goods and services is carried using the following types of contracts:
(a) Purchase order
(b) Short form purchase order
(c) Purchase contract
(d) Service contract
(e) Framework agreement (see section 2.3.)
The purchase order comes into force once it has been accepted by the supplier. The contract
comes into force once it has been signed by both parties.
In all cases, before issuing any purchase order or signing any contract (purchase or service
contract), it is essential to check that:
(f) The budget for the expenditure has been approved

(g) All relevant issues have been discussed and agreed with the other party, and likely
scenarios addressed, so that the purchase order or contract fully and accurately
addresses the agreement between the parties
(h) Technical approval is obtained according to technical logistics approval (when
applicable)
2.10.3.1. Purchase order
The purchase order (PO) is a document which constitutes the formal contract with the
supplier, once formally accepted by the latter. All information relative to the procurement
should be included or referred to, and attached as an appendix of the purchase order. The
purchase order is a restatement of the terms and conditions included in the original
solicitation (RFQ), modified by cost information and any changes in the terms or conditions,
which were agreed as a result of the bid evaluation and purchase order award decision.
Purchase order format: For details, please see the standard template in appendix 15. The
purchase order should contain the following information:
(a) Purchase order number: a unique number that is monitored in a registration of

purchase order.
(b) Logistics requisition reference number: used to track the procurement with the
original requisition. If the purchase order responds to consolidated logistics
requisitions, each individual item listed on the purchase order should be assigned a
reference number.
(c) Financial accounting codes: these are necessary for fund obligation and budget
control.
(d) Supplier’s details: including supplier’s legal name, a person’s contact details and
address.
(e) Procurement entity contact details: always be stated as “International Federation of
Red Cross and Red Crescent Societies” (including procurement entity’s name, e-mail,
telephone and address).
(f) Description of the goods ordered: this includes a detailed description, the quantity,
the unit price and total price of each item.
(g) Delivery terms and shipping instructions: including delivery date, address and contact
details (city and country, telephone, e-mail, fax number), Incoterms 2010 (Incoterm
required + exact location + Incoterms 2010) accompanied by either the named place
of collection, the named place of destination, the named port of shipment or the
named port of destination, the mode of transport, labelled goods, import specific
requirements per items (see the shipping instructions in appendix 16).
(h) Consignee: including the delivery address, contact person, telephone, e-mail, and fax
number.
(i) Packaging and marking instructions (on documents and goods) as specified in the
RFQ, or if not specified, sufficient to ensure safe arrival of goods.
(j) Liquidated damages: A provision against failure of the supplier to deliver the goods
on time. It sets a value on the damage caused by the supplier’s delay. The penalties
can be applied: either as a flat rate per day or as a percentage of the total contract
value per day and are generally capped at a maximum total amount. In general,
liquidated damages are assessed at a rate of 0.2 per cent of the total value of the
contract per day of late delivery or dispatch outside the agreed contractual schedule,
up to a maximum of 10 per cent of the total contract value.
(k) Payment terms: by bank transfer (or other) within 30 days after receipt of shipping
documents and goods in good order, unless otherwise agreed and approved by the
International Federation. Original invoices should be sent to the relevant finance
officer.
(l) Special instructions: these refer to the supplier's offer, any attachments, any special
requirements included in the request for quotation or agreed to as a result of the
competitive bid analysis and award decision.
(m) Distribution of documents: include waybills or bills of lading, packing lists, invoices,
insurance certificates, certificates of origin, pro forma invoices and gift certificates
(see the template for gift certificate in appendix 26).
(n) International Federation general terms and conditions
Repetitive purchase order: A repetitive purchase order occurs in the following two cases:
(i) When a purchase order award for identical goods needs to be granted to the same
bidder who won an award in a recent tender and was the lowest bidder. The original
purchase order award date must be less than ninety (90) days prior to the new
purchase order award. No more than two purchase orders shall be placed under this
condition, or
(j) Under an established framework agreement
Under such arrangements, repetitive purchase orders are established by the procurement
entity based on the requisition received. For details, please see 2.6.1(e).
2.10.3.2. Short form purchase order
Short form purchase orders can be used for small purchases under CHF 1,000.
Short form purchase order should include the same information a normal purchase order with
the following exceptions:
(a) The description of the goods or services ordered does not need to be as detailed as
the normal purchase order
(b) Shipping and delivery terms do not need to be detailed, although a point of contact
should be included if the goods are being delivered to a receiving office.
2.10.3.3. Purchase contracts
A written agreement, commonly referred to as a ‘contract’ is used when the terms of the
agreement are complicated or require complex written details to ensure the obligations and
rights of both parties are adequately defined and respected. Purchase contracts are used for
the procurement of goods.
Contract format: Various standard purchase contract templates exist, including for fuel
purchase, transport, construction and warehouse rental.
Whichever template is used, it is essential to include the following:
(a) Scope of the contract: This should explain the background and give a general
description of the goods. It should also include a detailed description of all elements
of the work to be performed, or a detailed description of the goods to be supplied
(quantity). This should include definitions and specifications. Whenever necessary,
more detailed specifications may be annexed to the contract and stipulated as
forming an integral part of the contract.
(b) Duration of the contract: This should include the start and completion dates to
perform the tasks required in the contract, as agreed between the parties.
(c) Payment terms: Contracts should include the total value (price) in the relevant
currency where the work or goods will be supplied. It should also include a cost
breakdown (daily rates, unit costs, item unit price, as applicable) and a payment
schedule corresponding to payment terms upon acceptance of the corresponding
contractual events. The standard payment terms used by the International Federation
‘within 30 days after receipt of goods and documents in good order’. There should be
a clause stating that final acceptance by the International Federation is a precondition
for final payment.
(d) Liquidated damages: Liquidated damages are assessed at a rate of 0.2 per cent of
the total value of the contract per day of late delivery or dispatch outside the agreed
contractual schedule, up to a maximum of 10 per cent of the total contract value (see
2.10.3.1.(k)).
(e) Termination of the contract: The contract must provide the International Federation
with the right to terminate the contract in case of breach or failure of legal duties of
the supplier.
(f) Governing law: Contracts are subject to the laws of Switzerland. Variations of this
provision are permitted only with approval of the legal department.
(g) Signature of the parties: The agreement between the parties on the contract terms
must be formalized with the signatures of both parties. The names of the supplier and
the authorized Federation representative should be printed. The authorized
representatives of the parties should indicate their functions and contact details
including their addresses, telephone and fax numbers. Both parties should mark each
page of the contract, including annexes, with their initials to show that they have read
each page.
As mentioned in section 2.9, a performance bond is required by the International Federation

where there is a risk regarding the supplier’s capacity to satisfactorily fulfil the contract. If a
performance bond is required, it must be stated in the contract.
For sample of a purchase contract, please see the template in appendix 17.
2.10.3.4. Service contracts
Contracts for the purchase of services (such as consultancy or information systems

providers) should be formal and in writing. The service contract should be used including the
‘Federation general terms and conditions for all services contracts’. The Federation general
terms and conditions for all services contracts contain additional specific points with respect
to the service provider’s obligations regarding his personnel’s duties (confidentiality and
respect of the Staff Code of Conduct).
Typical examples of situations requiring contracts include consultancy services, cleaning,

catering, cargo handling, warehousing rental, vehicle rental, fuel purchase, and maintenance
and transportation services.
Contract format: There are standard service and consultancy contract templates. For details,
please see appendix 18.
Whichever template is required for a service contract, it is essential to include the following:
(a) Scope of the contract: It should explain the background and give a general
description of the scope of services, together with a detailed description of all
deliverables to be provided. The package of deliverables should be clearly identified.
(b) Duration of the contract: It should include the start and completion dates to perform
the tasks required in the contract, as agreed between the parties.
(c) Payment terms (fees): Contracts should include the total value (price) in the relevant
currency for the services provided. It should also include a cost breakdown (either on
a work product or working day basis) and a payment schedule corresponding to
payment terms with reference to the acceptance of the corresponding contractual
deliverables with due dates. It must be explicitly stated that all payments are subject
to acceptance by the International Federation of the deliverables and/or final work
product.
(d) Contractual delay penalties: This is a provision against failure of the service provider
to provide services on time. For service contracts, a certain amount of the total
contract value is withheld (especially in the case of a consultancy service contract).
(e) Termination of the contract: The contract must provide the International Federation
with the right to terminate the contract in case of breach or failure of legal duties of
the service provider.
(h) Governing law: Contracts are subject to the laws of Switzerland. Variations of this
provision are permitted only with approval of the legal department.
(i) Signature of the parties: The agreement between the parties on the contract terms
must be formalized with the signatures of both parties. The names of the supplier and
the authorized Federation representative should be printed. The authorized
representatives of the parties should indicate their functions and contact details
including their addresses, telephone and fax numbers. Both parties should mark each
page of the contract, including annexes, with their initials to show that they have read
each page.
2.11. Contract management
2.11.1 General
Contract management covers all the issues involved in managing contracts once the contract
has been awarded. It concerns the mechanics of the relationship between the requester and
the suppliers or service providers, ensuring that the agreed terms and conditions in the
contract are respected.
2.11.2 Record of purchase orders and purchase contracts
The entity which issued the purchase order or signed the contract should keep one original
and send two other originals to the supplier or service provider. The supplier or service
provider should acknowledge receipt of the two original purchase orders and return one
signed original to the procurement entity. All copies should be kept in the procurement file.
All communication related to the contract performance and all communication with the
supplier – including printed e-mails – need to be recorded and kept in the procurement file.
2.11.3 Amendment or termination of contract
When a contract needs to be amended, it is important to number each amendment. Each

amendment should identify the contract to which it refers by number, subject and date. The
nature of the amendment should be described clearly and it should be stated that all other
terms and conditions of the contract remain unchanged. The procedure for signing an
amendment and the required logistics technical approvals are the same as for the original
contract. For details, please see 1.3.5.2.
If the amendment modifies the expenditure under the original contract or substantially
modifies the scope of work, the amendment must be submitted for approval as per logistics
technical approval (for details please refer to section 1.3.5.2 of this manual).
2.11.4 Follow-up of the purchase order and purchase contract
The procurement officer is responsible for monitoring the supplier's performance and
compliance with the contract terms. Monitoring performance and compliance means actively
tracking:
(a) Supplier's lead time
(b) Delivery status
(c) Quality assurance
(d) Compliance with contract pricing and terms
(e) Compliance with specifications or Terms of Reference
2.11.4.1. Payment for goods received or services performed
The standard procedure for most purchases is the payment upon receipt of the goods
delivery or performance of the services within 30 days by bank transfer, against satisfactory
verification of receipt goods in good order and documents including supplier’s invoice.
No payment will be made for goods or services that have been rejected or for goods that
have been put on hold for quality reasons. The original invoice should be sent to the
respective finance office.
2.11.5 Failure or breach of contract
In case the supplier does not fulfil the contract requirements as agreed (e.g. late delivery or
damaged goods), it is important to immediately identify the default and to formally notify the
supplier in writing in order to protect the International Federation’s rights. The procurement
officer should always consult the legal department before enforcing contractual clauses
related to breach of contract.
2.11.5.1. Expected delay in delivery time
The procurement entity should monitor that the supplier maintains the agreed delivery time.
In the event that there is a delay in the delivery time, before taking any action, the
procurement entity should first find out the reasons for the delay. Delays may be the
supplier’s fault or there may be an external and unforeseeable event which prevents the
supplier from performing the contract, which may constitute a force majeure. For a precise
definition, please see article 9 of the General terms and conditions on purchasing.
In the event that the delay is the supplier’s fault, the procurement entity shall send a written
notice to the supplier about the delay. Once official written notice has been sent, the
procurement entity shall then apply liquidated damages as provided in the purchase order or
contract. For details, please see section 2.11.5.2.
Once the liquidated damages application has reached its threshold and, if the supplier has
not shown an improvement, the purchase order or contract may be terminated after
consultation with the legal department.
The decision to enforce the above-mentioned action is based on the procurement officer’s
judgement, common sense and consideration of the programme’s requirements and
interests. The procurement officer should assess the impact of applying or waiving damages
or terminating a contract. For example, four days’ delay over a five-month delivery period
including sea shipment can be adequately countered by applying damages and will not
usually warrant a termination of the contract. However, a substantial delay in an emergency
operation may justify termination and awarding of the contract to another supplier.
2.11.5.2. Enforcement of liquidated damages
The liquidated damages clause comes into force if the supplier does not deliver the goods or
does not provide the services within the agreed time, and this results in a financial impact for
the International Federation or dramatically affects distribution.
The procurement officer should decide, after consulting the legal department, whether to
enforce liquidated damages (taking into account the overall situation and programme
requirements as mentioned in 2.11.4.2.).
2.11.5.3. Non-achievement of contractual requirements
As a general rule, the procurement entity should protect the International Federation’s
interests by applying penalties provided under the contract, in cases of non-compliance of
goods or non-performance of services with respect to quality requirements. If it is found after
or during the inspection or quality control that the goods do not comply with the requirements
or specifications, the International Federation should generally reject the goods or any non-
conforming part and immediately notify the supplier in writing.
In exceptional cases, where it is determined that the variation (between the expected
requirements and the real quality of the goods) can be tolerated and goods can be accepted,
the supplier should be notified in writing of the discrepancy and informed of the financial
penalties to be applied in accordance with the contract terms. To determine financial
penalties, the procurement entity should determine the financial impact using the:
(a) Variation percentage between the non-compliant parameter and the originally
requested parameter
(b) Variation percentage of financial value between the received goods against original
purchase value
(c) Cost of altering the goods to make them acceptable for their intended use
A fault in the quality of the item could be in its composition, which does not match the
requirements. For example, a blanket containing 60 per cent wool may have been ordered,
but the delivered blanket only contains 50 per cent wool. The blanket is accepted to be used
so the variation is considered to be 16 per cent. If the original purchase price is CHF 4 and
the inferior quality blanket is estimated price to cost CHF 3 which is 25 per cent. So the
penalty should be calculated within a range of 16 per cent to 25 per cent of the total value of
the contract.
Or, using the same example, if the blanket is only usable with the addition of a cover and the
cost of each cover is CHF 0.50, that amount may be withheld from the final payment.
If it is ascertained that the variation is too high and not acceptable (that it represents a risk for
the security and the health of the beneficiaries), the goods should be rejected and the
supplier required to replace them immediately. Alternatively, where provided in the contract,
the procurement officer may terminate the contract, procure the goods or services from
another source and hold the supplier liable for any excess costs incurred. In this case, the
procurement officer must consult with the legal department in Geneva.
It is recommended to assess possible damages before the contract is finalized and to ensure
that relevant penalty clauses are included to cover all likely damages. There are two
possibilities:
(d) The applicability of contractual penalties should be specified in the contract or

purchase order.
When the contractual penalties are expressly stipulated, they should define at the very least,
the following:
Situations giving rise to penalties
Applicable value(s) (as well as the applicable measurement method(s))
Applicable unit of measurement
Applicable tolerance limit(s)
Applicable penalties
(e) A non-compliance clause should be included in the purchase order or contract.
When it is difficult to estimate the default, or to foresee a case of non-compliance of the

goods, a clause should be included in the purchase order or contract stipulating that
penalties will be assessed on the basis of actual cost incurred as a result of non-compliant
goods, as follows:
In the case of non-compliance of the goods with respect to quality, the supplier shall be held
responsible for all actual costs incurred by the International Federation as a result thereof.
The amount of damages shall be determined by the International Federation in good faith
and may be substantiated by relevant documentation where required.
The penalties applicable and how to assess them shall be made according to the method
mentioned above.
2.11.5.4. Claim procedure
A claim is a request for compensation in case of damages or losses to goods or services.

Damages occurring during transportation should be claimed from the insurer by the
consignee, whereas non-compliance with quality of goods should be claimed by the
procurement entity from the supplier.
This important aspect must be properly managed. Goods may be lost or reach their
destination fully or partially damaged. If this occurs, it is important to follow the correct
procedure in order to make a successful claim.
All discrepancies in the quality and/or quantity of goods should be specified in the transport
document or the receipt of final delivery (damaged packaging should also be mentioned). For
details, please see section 2.13.3.
All cases relating to goods or services with a value exceeding CHF 1,000 should immediately
(within 48 hours) be referred by the receiver to the insurance unit, with a copy sent to the
procurement officer using a claim report for damage and/or loss. This is important as the
procurement officer and the insurance unit may have to provide immediate support so that
the correct procedures are followed and any damaged goods may be salvaged.
The need to follow proper procedures is essential when goods or equipment are damaged or
lost during transport or storage. When an incident occurs, the field office and the
procurement officer should be provided with full details so that appropriate action can be
taken.
In order to assess a claim and calculate loss, the following criteria should be considered:
(a) Value of lost merchandise including transport costs to the point of destination
(b) Costs for reconstruction and salvage operations including purchase of packaging
materials and labour costs
(c) Costs for disposal of spoilt merchandise
(d) Costs for average expertise (to inspect the damage)
Claim reports and loss statements should be as detailed as possible, and procedures should
be followed to ensure that those who are responsible for the file can pursue the matter. For
details, please see the claim procedure on FedNet.
2.12. Transport and insurance
2.12.1 Incoterms 2010
The transportation of goods needs to be safe and reliable, timely and cost effective. The
mode of transport is an important part of the purchasing process and the selection of the
appropriate supplier.
To ensure this, it is important to clearly determine in the purchase order or purchase contract
the terms of the transportation of the goods. The terms of transportation are settled through
‘Incoterms 2010’, a common designation adopted by the International Chamber of
Commerce (ICC). Incoterms 2010 are the latest version of Incoterms and are updated by the
International Chamber of Commerce.
Incoterms 2010 provide a set of international trade rules commonly used worldwide to
specify supplier and buyer obligations for shipment in international trade contracts:
(a) Split of each party’s duties: customs taxes payment, loading and unloading costs
bearing, risk of loss and damages bearing during transit and party in charge of taking
out transport insurance
(b) Definition of the time and place where the liability of the supplier ends and the liability
of the procurement entity starts
(c) Defining exactly when the transfer of the essential rights and obligations (transfer of
risk and transfer of liability) from the supplier to the consignee or requester occur
Uncertainties of different interpretations of such terms in different countries can be avoided

or at least reduced to a considerable degree.
Incoterms 2010 deal exclusively with the relationship between the buyer and the supplier.
The 11 Incoterms 2010 rules are classified in two distinct classes:
1) Rules for any modes of transport:
EXW EX WORKS
FCA FREE CARRIER
CPT CARRIAGE PAID TO
CIP CARRIAGE AND INSURANCE PAID TO
DAT DELIVERED AT TERMINAL
DAP DELIVERED AT PLACE
DDP DELIVERY DUTY PAID
2) Rules for sea and inland waterway transport
FAS FREE ALONGSIDE SHIP

FOB FREE ON BOARD
CFR COST AND FREIGHT
CIF COST INSURANCE AND FREIGHT
For a complete list of Incoterms 2010, please see appendix 20.
Incoterms are only valid if they form an integral part of the contract or purchase order.
Written reference to Incoterms 2010 should be explicitly mentioned in the contract. The
agreed terms should state what has been agreed with the supplier, including the chosen
mode of transport and when the transfer of liability will occur, as well as specifically named
departure and arrival points.
As a general rule, the International Federation uses the following three Incoterms:
(d) FCA (free carrier …named point) used where transportation is arranged by the
procurement entity
(e) CPT (carriage paid to) used for international procurement
(f) DAP (delivered at place) used for bulk foods due to the high risk of loss
For some goods, which may be sensitive, it is usually better to pay the higher cost and
transfer the risk to the supplier until the goods are delivered on site. In the other cases,
insurance should normally not be taken out as the coverage is included in the International
Federation’s global transport insurance policy.
It is recommended to organize a direct shipment whenever possible, even when in some

cases the transport charges may work out less attractive. Transportation is a substantial
element in the price of most imported goods. The cost is particularly high for landlocked
countries and may reach 10 to 15 per cent of the total cost of the goods.
It is important to remember that Incoterms 2010 do not specify when the ownership of the
goods is transferred from the supplier to the buyer. As national laws differ on this subject, the
time at which the transfer of ownership occurs should be clearly specified in the purchase
order or contract.
In case of local procurement, Incoterms 2010 may apply. As a result, in the request for
quotation or request for proposal and in the purchase order or contract, it is important to
explicitly define and describe:
(g) The mode of transport chosen

(h) The departure and arrival points
(i) The point at which the transfer of risk and liability occurs
(j) The point at which the transfer of ownership occurs (loading or off-loading)
2.12.2 Modes of transport
The International Federation uses five different modes of transport:
(a) Sea
(b) Rail
(c) Air
(d) Road
(e) Courier (only for small and light volumes in the event of an emergency)
Transportation can be either single modal or multi-modal. Single modal means that one
single mode of transport is used to transport the goods and multi-modal means that several
modes of transport are used to transport the goods.
The procurement officer needs to choose the best mode of transport – depending on the
specific requirements of the country of operation and operational requirements – so as to
minimize the overall costs (including hidden costs). In general, transportation by sea is
recommended as the costs are lower than transporting by rail, road or air.
When considering the appropriate mode of transport, it is important to take into account the
value of the goods, their fragility and the situation (emergency or otherwise).
Air transport is the most appropriate mode of transport for the movement of people, high
value or urgent items, and goods that are of limited weight and volume, such as medicines or
spare parts. Basic food commodities and non-urgent items should be transported by other
modes due to the high costs and impracticality of moving large quantities by air.
Whichever mode of transport is chosen, goods must be protected by the most suitable
packaging in order to limit the risk of damage during transportation and to prevent any loss.
2.12.3 Marking of goods for shipment
In order to facilitate the identification of goods and handling whilst in transit, suppliers should
be instructed to provide ‘shipping marks’ on all packages according to the following format:
(a) Consignee contact details and address

(b) International Federation logo (if required)
(c) Detailed address of destination point
(d) All shipping documents should clearly show: HUMANITARIAN AID
(e) All shipping documents should bear the Federation-issued consignment number
(available from the RLU) and the commodity tracking numbers (CTN)
(f) All shipping documents should clearly indicate the consignee address and a
description of the goods
(g) All shipping documents should clearly indicate any additional information, when
required by donors
Requirements shall be specified by the requester and stipulated on the purchase order or
purchase contract.
2.12.4 Transport documents
Transportation of goods is recorded through transportation documents called waybills, which

certify that goods have been loaded on to a specific mode of transport and acknowledge the
transfer of the responsibility of the goods to the carriers.
2.12.4.1. Bill of lading for sea shipment
The bill of lading is the transport waybill for a sea freight consignment. A bill of lading may
be referred to as B/L. It states to whom and on what terms the goods are to be delivered at
which destination. It is usually issued in a set of original and non negotiable copies. The bill
of lading is signed on behalf of the ship owner by the person in command of the ship or the
shipping agent, acknowledging the receipt on board of the ship of certain specified goods for
carriage.
The bill of lading is a receipt for goods, contract for their carriage and documentary evidence
of title to the goods.
Without an original bill of lading, goods cannot be received. A copy of the bill of lading does
not constitute an official document. The only way to receive the goods without the original bill
of lading is through a bank guarantee (by the consignee's bank) covering the value of the
goods. Such a guarantee can only be cancelled by remitting the original bill of lading to the
bank.
2.12.4.2. Rail waybills
The rail waybill is a non-negotiable document. It contains the instructions to the railway
company for handling, dispatching and delivering the consignment. No other documents are
required, except for international transport across one or more borders where enquiries need
to be made locally about the necessary documentation.
2.12.4.3. Road transport delivery note or waybill
The delivery note or waybill is a non-negotiable document. Commercial road transport is a

service provided by carriers to carry goods from point A to point B within a defined period.
This service is an agreement that must be stated within a transport contract. The transport
contract for road transportation is a binding document between the International Federation
and the carriers. It must be drawn up in such a way that the entire International Federation’s
requirements are clearly stated to avoid dispute. A CMR waybill is a standardized document
for cross-border transport of cargo by road, establishing uniform international rules in force
mainly in the European Union.
2.12.4.4. Air waybill for air shipment
The air waybill is a transport contract and it is a non-negotiable document. The air waybill
may be referred to as an AWB. The conditions of carriage are printed on the back of the
document. This means that the bearer of the air waybill is not necessarily the owner of the
goods listed and that the consignee cannot, even by endorsement, pass title or property of
the goods to a third party.
The following shipping information is mentioned on the air waybill:
(a) Shipper, consignee and notify

(b) Airlines, routing, airport of destination and flight information
(c) Designation (or nature) of goods, number of packages, weight and handling
information
(d) Rate class, chargeable weight, rate per kg, total charges and accounting information
The freight forwarder usually issues the air waybill.
2.12.5 Forwarding agents
In some cases, consignees are unable to handle the formalities and operations in order to
collect the consignment (e.g. consignees in landlocked countries). In such cases, it is
recommended to use forwarding agents.
Forwarding agents, also called freight forwarders, are responsible for organizing reliable and
efficient transportation of the goods by the use of various forms of carriers. The forwarding
agent plays the role of intermediary between the shipper, the receiver and the carrier. In
practice, the forwarding agent often hires a clearing agent at the port of arrival so that on
receipt of the bill of lading, immediate transfer can be executed in order to speed up the
retrieval of the goods. Prompt clearance and collection is desirable as consignments lying in
customs warehouses run the risk of loss and theft, and may incur rental and demurrage
charges.
The forwarding agent should offer reliable services in the field of transport and clearance
(preparation of documents, booking cargo space, warehouse pier delivery and export
clearance). In practice, the forwarding agent works with sub-contractors, such as clearing
and handling agents, trucking companies, airlines and shipping lines.
It is important to select freight forwarders who are registered with the International Federation
of Freight Forwarders Associations (FIATA) as this means that they are internationally
recognized. Non-registered freight forwarders may be unreliable and selecting them may
result in goods being lost.
2.12.6 Global transport insurance
Incidents during transportation and storage can occur due to natural factors (weather),
human factors (an attack or riot) or technical factors (an accident or vehicle breakdown).
Insurance provides protection against financial losses resulting from these risks. The
transportation of goods is covered by the International Federation’s global transport
insurance.
Here are the main contents of the International Federation’s global transport insurance:
(a) Entities covered: the global transport insurance covers the International Federation,
its subsidiaries, associated and affiliated companies, agents and/or for whom they
may have instructions to insure.
(b) Covered goods: goods and merchandise property of the International Federation for
which they are responsible or which may require coverage including but not limited to
relief goods, baby and other foods parcels, bagged foods, chilled or frozen products,
medical goods, vehicles, electronic or other equipment.
(c) Limits of sums insured: there are different limits set for transport and warehousing
depending on the geographical zone. For details, please see the global insurance
policy on FedNet.
(d) Special conditions of coverage and limitations:

For goods to be covered by the insurance policy, the age limit of all vessels is
30 years. Where older vessels are used, prior written approval should be
obtained from the insurer through the insurance unit.
The insurance is extended to cover barges and lighter transport only in
connection with the discharge of cargo and for national inland transportation
from the port of arrival.
The insurance is extended to cover vehicles which are driven, but only where
it is necessary to move them to and from ships, inside the harbour, or to and
from customs.
Jettison and washing overboard are covered.
(e) Exclusions of coverage (what the insurance does not cover):

Loss or damage to goods carried on the decks of ocean vessels (other than
goods in container) caused by sea water, ordinary humidity and change in
temperature
Unsuitable condition of the goods for the transport, improper or insufficient
packaging.
War and political risks on land (to include insurance coverage goods and
equipment to be declared to insurer through the insurance unit on a monthly
basis).
Hijacking of goods on land.
It is important to check the goods immediately upon receiving them. Where it is suspected
that goods may have been lost or damaged, the consignee shall issue a reservation on the
delivery note and hold the last carrier responsible in writing by means of a claims letter.
For details, please see the global insurance policy on FedNet.
2.13. Receiving goods and services
2.13.1 Receiving goods
Requesters are directly responsible for receiving and physically inspecting supplied goods –
their quantity and quality – including foods, medical items, technical items, assembly kits and
sets. Requesters may use technical experts and inspection companies to carry out the
inspection if it is deemed necessary in order to protect the International Federation’s
interests.
When goods are delivered to the consignee, the carrier will request a delivery receipt,
regardless of the mode of transport. However, before signing the delivery receipt, the
consignee should make an external check of the packages.
Inspection companies may be used to carry out an independent inspection of quality and
quantity when the goods are being manufactured and before the risks and ownership are
transferred to the International Federation. Contracts with inspection companies should be
handled by the procurement entity.
When goods are received, the following checks should be carried out:
(a) Check the delivery and shipping documents. Is it the correct delivery address? Does
the number of packages on the purchase order match the number of packages in the
shipment?
(b) Inspect the packaging (parcels, bales, bags or coils). Is the quantity and quality of
packages in good order?
If the packages appear to be in good external condition, write the following on the delivery
receipt: ‘Received in good external condition. Contents unchecked. Acceptance subject to
final check’. This allows further action to be taken if there are discrepancies when the
shipment is unpacked.
If there is any evidence that the packages have been tampered with, write the following on
the delivery receipt: ‘Cases broken. Contents missing’. Or, if it is not obvious what is missing,
write: ‘Packages have been opened with signs of pilfering’.
If possible, packages should be weighed to check that the declared weight matches the
actual weight. Any differences should be noted on the delivery receipt.
Do not sign any transport without the goods having been checked. As mentioned above, it is
sometimes not possible to check the goods and this should be noted on the delivery receipt:
‘Received in good external condition. Contents unchecked. Acceptance subject to final
check’.
In any circumstances, the requester shall issue a goods received note. This is sometimes
referred to as a GRN. It should be forwarded to the procurement entity. For details, please
see appendix 21.
If there are any quality and/or quantity issues when the shipment is unpacked, the requester
should:
(c) Mention it in the transport document (on the waybill or delivery note)
(d) Create a goods received note with comments and observations
(e) File a claims report and send it to GLS for quality issues
(f) File a claims report and send it to insurance unit for transport damages or loss during
transportation
2.13.1.1. Receipt of goods by sea
The exact shipment terms are stipulated in the bill of lading. It is a separate document from
the purchase contract or purchase order, and includes different terms. The consignee or
freight forwarder should make sure they do not pay twice for the same service.
The consignee or the freight forwarder presents the ship’s agent with one original bill of
lading when the vessel arrives at the port of destination to obtain the release of the cargo.
Before the vessel arrives, the consignee or freight forwarder should arrange all the
necessary formalities for the clearance and carriage of the goods in order to ensure a fast
discharge of the goods. It is recommended to look into the possibility of a direct delivery from
the vessel into trucks or railway wagons in order to reduce costs.
If the container is emptied inside the port, the offloading of the goods has to be paid by the
receiver. The International Federation or the freight forwarder can make arrangements so
that full container loads are delivered with the original container to the warehouse of
destination.
All costs for the delivery and the return of the empty container to the container yard are
normally born by the receiver.
2.13.1.2. Receipt of goods by rail
The railway company delivers the consignment to the person named on the waybill. The
consignee signs the waybill to acknowledge receipt of the goods upon delivery of the
consignment. In the case of damage or loss, the consignee should ask the railway company
for a statement of damages.
2.13.1.3. Receipt of goods by road
International road shipments can be offloaded after they have been cleared and released to
the receiver by the customs authority. The driver must be present during the unloading and is
answerable for any discrepancies in quantity and quality that do not match the loading
documents. The consignee should only sign for the receipt of goods that are in sound and
good condition. The consignee should indicate any losses or damages on the transport
document. The carrier is responsible for any irregularities and differences disputed on arrival.
2.13.1.4. Receipt of goods by air
The shipper or freight forwarder should communicate the shipping details in good time to the
consignee. The consignee will instruct the airline or his freight forwarder to obtain the release
and clearance of the goods at the destination airport.
An original set of documents should be attached to the air waybill and sent with the goods.
These documents are given to the customs agent. This allows the agent to start the customs
clearance procedures.
Together with the delivery of the cargo, the freight forwarder should make the packing list
and invoice originating from the shipper available to the receiver. The invoice covering the
services provided by the freight forwarder will include the unloading at the destination airport,
clearing charges, import duty (if any) and delivery fees.
2.13.2 Receiving services
The requester needs to check that the service has been provided according to contractual
requirements and according to his or her requirements.
If the service is provided to different entities and/or different departments, the services need
to be accepted through a service closing form. The form is issued once the different entities
or departments have confirmed in writing that the services:
(a) Have been provided satisfactorily and

(b) In accordance with their requirements
For details on the service closing form, please see appendix 22.
If the service is split into several deliverables (e.g. software development or construction), the
acceptance of each deliverable should be issued before the final acceptance of the whole
service.
The requester or designated inspection company needs to certify that the services have
been delivered satisfactorily and communicate this to the procurement officer before any
payment for the services is made.
2.13.3 Discrepancies in delivery
If the documentation for receipt of goods or delivery of services has been properly
completed, then this is normally sufficient for the procurement entity to resolve any
discrepancies or issues with the supplier or service provider. This is why it is important that
the goods received note or the service closing form are always completed correctly.
The procurement entity, in coordination with the legal department, is responsible for resolving
any discrepancies which cannot be resolved through the normal presentation of receipt
documentation. The legal department should be consulted when discrepancies are likely to
lead to claim.
If a dispute over payment for goods or services seems likely, then the requester or the
consignee needs to immediately advise the procurement entity. Procurement officers in field
offices should contact GLS or their relevant RLU for additional assistance.
2.13.4 Returning goods to a supplier
When goods are rejected for quality issues, the relevant procurement entity needs to contact
the supplier to return the goods. The procurement entity should refer to the original purchase
order number, the goods being returned, the value as shown on the purchase order and the
reason for returning the items.
Depending on the circumstances, the supplier may be given the opportunity to replace the
goods, or to issue an appropriate credit note or refund in respect of their value.
The way in which the items shall be returned needs to be discussed and agreed with the
supplier, as well as whether the cost is to be borne by International Federation or by the
supplier.
2.13.5 Certification of invoices
Before the invoice is cleared for payment, the procurement entity needs to check that the
goods have been received in good order or that the services have been delivered
satisfactorily as requested in the purchase order or contract. The procurement entity also
needs to check that any discrepancies have been resolved.
Once receipt of the goods or services has been verified, the procurement entity should:
(a) Verify that all documents and other requirements inherent to the contract have been
complied with
(b) Write the appropriate funding codes on the original invoice, and sign and date it so
that it is approved for payment (see the ‘Accounts payable manual’)
(c) Forward the invoice along with a copy of the logistics requisition, purchase order,
goods received note, and CBA to the appropriate finance office for reconciliation and
payment17
In the event of a dispute over an invoice, the procurement entity should negotiate with the
supplier a partial payment for any undisputed amount in order to avoid unfair penalization of
the supplier whilst the dispute is being resolved. This does not apply if the total amount of the
invoice is being disputed.
2.14. Files and archiving
2.14.1 General
For each procurement file, a tracking record needs to be maintained so that any information
on any procurement can be provided for audit purposes at any time. For details of the
procurement file cover, please see appendix 23.
All procurement files should be kept and archived for eight years, starting at the end of the
financial year in which the project or programme was completed.
The original documents need to be submitted to the secretariat as supporting documents

when reporting on expenditure, using the cash working advance system. For details, please
see the ‘Guidelines on document management’.
2.14.2 Files to archive
The procurement file archive should contain the following documents:
(a) Cover page of the logistics requisition

(b) RFQ or RFP and the list of suppliers targeted
(c) Minutes of the opening ceremony (if applicable)
(d) Bids or proposals from suppliers
(e) CBA for goods and technical evaluation and financial evaluation (CBA for services)
for services
(f) Purchase orders, purchase contracts and any related correspondence
17
If data is entered into a logistics software only invoice is required
(g) Pro forma invoices
(h) Shipping documents and certificates, copy of the invoice, cash statements, fixed
assets, and disposal forms
(i) Goods received note
(j) Copies of any supplier correspondence, including e-mails
(k) Copies of letters to unsuccessful bidders
(l) Claim reports (transport and supply) (if applicable)
(m) Supplier or service provider’s performance evaluation (if applicable)
The above-mentioned documents should be filed per project or programme in chronological

order.
2.14.3 Audit requirements
Internal auditing is an appraisal activity established within an entity as a service to the entity.
Its functions include, among other tasks, examining, evaluating and monitoring the adequacy
and effectiveness of internal control’.
It is recommended to split two types of information:
(a) Procurement information: including the procurement file, the logistics requisition, the
request for quotation or request for proposal, competitive bid analysis and the
purchase order or purchase contract.
(b) Financial information: including the expenditure authorizations, the goods received
note, the purchase order or purchase contract, the invoice and the receipt of
payment.
3. SPECIFIC PROCUREMENT
3.1. Medical procurement
3.1.1 General
Procurement and distribution of medical goods requires strict quality control procedures to
ensure that high quality products are provided to beneficiaries. In particular, this applies to
the procurement and distribution of pharmaceuticals (drugs), which can become life
threatening when the quality is substandard.
There are numerous ethical and legal responsibilities related to the quality of medical
products offered by humanitarian agencies.
The International Federation is committed to comply with the quality assurance procedure for
medical goods procurement set out in the interagency guidelines on drug donations to which
the International Federation is a co-signatory. Furthermore, a large number of donors also
support the initiative and require adherence, as part of funding agreements, to WHO
standards so as to ensure that only certified quality products are distributed to the
beneficiaries.
3.1.2 Procedure for medical procurement
For the above mentioned reasons the procurement of medical supplies are done by GLS in
Geneva.
No medical procurement, particularly for pharmaceuticals (drugs), shall be initiated by any

field office unless special authorization has been granted by the head of GLS.
There are few exceptions to the above stated rule:
(a) Minor equipment such as stethoscopes, sphygmomanometers, scissors, forceps and

other small items (e.g. thermometers) and dressing materials (e.g. gauze, bandages)
can be procured locally. Medical stationery can also be procured locally as it is faster
and cheaper, especially if there is a need to print cards or other information products.
(b) Whenever a decision is made to grant a working advance or cash transfer to a

National Society for a Federation operation and the National Society wishes to carry
out a local procurement, the head of field offices is fully responsible for ensuring that
the following conditions are fulfilled:
National Society procurement procedures are compliant with the Federation

procurement procedures.
Quality control assurance mechanisms are in place and meet required
standards.
A complete up-to-date audit trail shall be maintained at all times.
Before proceeding with any local procurement of medical goods supplies
through working advances or cash transfers to a National Society, it is
advisable to contact GLS for additional details on quality control and
requirements.
3.1.3 Quality assurance
Strict quality control procedures are essential to ensure the production of good quality
medical goods and medicines. These include a careful selection and thorough investigation
of suppliers (wholesalers and manufacturers) and their continued monitoring.
Product licence and conformity to the latest international pharmacopoeia, as well as official
inspection procedures and independent quality control, are all part of the validation process.
They are essential in guaranteeing high quality medical products. These entail regular follow-
up visits by specialized pharmacists and the independent quality control of products.
The International Federation purchases only from pre-qualified suppliers who comply with
following criteria:
(a) Registered with and licensed by their national drug authorities

(b) Hold the following certification:
Good Storage Practice (GSP)

Good Distribution Practice (GDP)
GMP certifications for manufacturers
(c) Follow WHO procedures and recommendations for storing and distributing medical
supplies
(d) Procure products which are either pre-qualified under the WHO pre-qualification
schemes (this applies only to manufacturers of anti-retroviral drugs for AIDS,
tuberculosis drugs and anti-malarial drugs) or are not part of the scheme, but hold a
valid GMP certificate and are pre-qualified by the supplier’s quality assurance team
(e) Have an established Quality Assurance Quality Control (QAQC) department
(f) Have established Standard Operating Procedures (SOP) for the selection and pre-
qualification and validation of their sources including GMP auditing
(g) Carry out random sampling and testing of the products purchased and have a valid
batch recall system
In addition to the above-mentioned certification, priority is given to suppliers that comply with
at least one of the following certifications:
EN46001/EN46002
ISO13485/ISO13488
ISO9001/ISO9002
ISO9001/2000
Japan QS standard for medical devices 1128
United States QS (21 CFR part 820)
Medical devices should conform to ISO standards and/or equivalent standards, and should
be marketed according to one of the following regulatory authorities:
CE Mark (Europe)
Device Licence (Japan)
Device Licence (Canada)
MPALS License (Australia)
510 k Device Letter (USA)
3.2. Food procurement
3.2.1 General
Whenever possible, priority should be given to procurement from the country of operation or
neighbouring countries. The context in which the programme is being implemented should be
taken into account it is important to ensure that the procurement does not substantially
disturb local markets that supply beneficiaries. The procurement entity should obtain
evidence, based on local or regional market analysis, that local or regional procurement will
not cause market distortions which could adversely affect vulnerable populations. Food aid
products must complement the nutritional habits of the beneficiary population as much as
possible.
3.2.2 Quality procedures
The specifications of the products and their packaging should respect:
(a) Quality standards laid down in the domestic legislation of the country of origin and/or
the country of destination, whichever legislation has the higher quality standards
(b) Acceptance from the national authorities always required for the importation of the
food, based on national specifications
(c) Applicable emergency item catalogue specifications (if available)
Where there is a variation between the specifications in the emergency item catalogue and
the national ones, the latter shall prevail. The responsibility lies with the requester and
technical department to define clear specifications.
The request for quotation should specify that food goods are to be delivered under DDU
terms (since goods are perishable and there is a high risk) in order to transfer the risks and
costs to the supplier. Please see appendix 31 for template of RFQ for food.
When awarding contracts for food, the procurement entity should also tender and hire an
inspection company to certify the quantity, quality, packaging and marking of food supplies.
The procurement entity should include in the tender and contractual documents necessary
provision in order to guarantee to the inspection agency the right of accessing and
monitoring the goods. Inspection should be carried at the time of production if applicable,
before shipment, at the arrival. In case they are stored in a warehouse during a long period,
inspection should be carried out every two to three months.
Special quality assurance documents need to be requested from the supplier:
(d) Health certificate stating that the goods are fit for human consumption (applies to all
food stuffs, except cereals and pulses)
(e) Phytosanitary certificate (for cereals and pulses)
(f) Certificate of origin
(g) Fumigation certificate (for cereals and pulses)
(h) Non-radioactive certificate
(i) Inspection certificate
3.3. Consultancy procurement
3.3.1 General
There is a distinction to make in the definition of consultancy services:
(a) “Consultancy services” refers to the use of independent consultancy companies (as
independent companies) as part of a procurement entity’s activities.
(b) Human resources refers to the hiring of individual consultants (as individuals) hired
directly by human resources.
This section only covers consultancy service companies, as mentioned above in (a), which
combines:
(c) Consultancy services

(d) Public and private corporations or entities providing consultancy services
(e) Private non-profit making organizations
(f) Training centres and institutions
(g) Universities or university associations
This section does not cover the hiring of personnel. For details, please see the procedure
‘Recruitment – all staff consultants’ available on FedNet portal.
The procurement entity contracting consultancy services is responsible for the selection of
the consultancy services following the procurement procedures described in sections 2.5,
2.6, 2.7 and 2.8.
The procurement entity’s role in the selection procedure is to ensure that:
(h) The proposed consultancy services correspond to the Terms of Reference.

(i) The qualifications of the consulting firms are adequate.
(j) Their tasks and responsibilities are well defined.
(k) The conditions of the contract are acceptable.
(l) The consultants reach the objectives required by the requester.
The requester for consultancy services should participate in the technical evaluation, and is
responsible for supervising, evaluating and acknowledging deliverables.
3.3.2 Specificities for consultancy service procurement
The solicitation and evaluation process for consultancy services is described in sections 2.5,
2.6, 2.7, 2.8.
Fixed price contracts must be used where the scope of services to be provided is well known
and clearly defined, and a maximum ceiling price needs to be indicated. If the deliverables
are not known and it is a variable price contract, the ceiling price should still be fixed. The
consultancy service providers are responsible for providing the necessary resources to
achieve and perform the services with expected results.
The department requesting the services is responsible for preparing the terms of reference.
The identification of needs is essential and should be clearly reflected in the terms of
reference:
(a) Background explanation of the need for such consultancy services

(b) Clear description of the nature and scope of the services required and their context,
as well as the time frame in which they should be provided
(c) Clear statement of the objectives to be reached
(d) Statement of the duties and responsibilities of the consultant
(e) Statement of the duties and responsibilities of the International Federation
(f) Information on any counterpart staff and their role
(g) Information on training and the transfer of technology, where necessary
(h) Summary of the data, a list of all studies and information
(i) Assignment, facilities and services which the International Federation will provide to
the consultant
(j) Publication of the evaluation criteria with the request for proposal
3.3.2.1. Consultancy service providers to be targeted for solicitation
The selection of service providers should be in line with the needs requirements. The
following elements should be checked for the selection of the potential service providers:
(a) Information gathered through the sourcing process (see section 2.2.1 for details)
(b) A minimum of three services providers should be invited to tender
(c) Information gathered on the quality of work carried out by bidders for the International
Federation or other organizations
3.3.2.2. Tender evaluation process
The technical and financial proposals should be submitted in separate sealed envelopes. For
details, please see section 2.7.2. and 2.8.3.2.
Consultants technical proposals are an intellectual product, their evaluation must be based
on the professional judgment of competent and impartial evaluators. The judgment has to be
technically sound and objective, strictly complying with the procedures and evaluation criteria
indicated in the RFP, and capable of providing an adequate explanation for each evaluation
and the points assigned to it. The method of evaluation is described under section 2.8.4.
To calculate the global cost of the consultancy services, the following should be taken into
account:
(a) Check if the proposed workload and person profiles match the expected results and
deliverables
(b) Check if the proposed fixed prices are realistic: standard daily cost per person,
volume of days per phase, schedule and real working days
(c) If possible, include the service provider’s estimate of predictable expenses in the
global budget (e.g. travel expenses)
(d) Understand the cost drivers which determine the total cost of service
3.3.2.3. Payment terms
Some consultancy service providers request a periodic payment based on a percentage of

completed work or the delivery of key deliverables or milestones. In such cases, it is
recommended that payments are structured in such a way that the last and final payment is
sufficiently large (e.g. 25 per cent or more). This maintains the service provider’s
engagement until the end of the contract and provides the International Federation with a
strong negotiating position if there are any service delivery or performance issues.
The International Federation will pay a daily fee per lump sum stated in quotation. The
consultant or the consulting firm can submit an invoice for the number of days worked and
provide details of the account number and bank where payment should be made.
The final 20–25 per cent of the total contract value will be paid after completion and
submission of the final deliverables as set out in the terms of reference.
The consultant or the consulting company should clearly state that their fees are fixed for the
duration of the assignment.
All rates presented in the financial proposal by the consultant or the consulting company are
to be considered fixed during the entire service contract.
3.3.2.4. Award and contract finalization
The contract should be awarded and finalized before the service starts. The successful
consultancy service provider is notified of the outcome and should sign the contract
according to the general procurement process. For details, please see the general
procedures in sections 2.8 and 2.10.
Once the consultancy service contract is signed, unsuccessful service providers can be
notified, following the general procedure. For details, please see section 2.8.
3.3.2.5. Evaluation during the performance of the services
It is important to manage and monitor the performance of the consultancy service provider.
It is recommended to check that:
(a) The consultancy service provider is on schedule and will accomplish the task on time
(b) The quality of the delivery complies with the proposal and the Terms of Reference
Once the service has been performed, it is essential to provide a written evaluation of the
service as well as a detailed record of all documents for filing. For details, please see
appendix 27 for the consultancy agreement form.
3.4. Procurement of construction works and services
3.4.1 Legal basis for contracting construction works
The International Federation’s tendering and contracting procedures are based on

established and known standards in the construction industry and good practice experience.
They balance the interests of the International Federation and the service provider. The
different tender procedures are tailored to specific building types (complex or simple) and
take the specific situations into account that can be found in post-disaster re-construction
projects. For details, please see the guidelines ‘Procurement of works and services for
construction projects’ available on FedNet portal.
3.4.2 Authorization process
GLS and procurement entities in regional logistics units and field offices are authorized to
conduct procurement of construction works and services.
For any expenditures or Federation commitments above CHF 50,000, technical approval is
required by GLS. For details, please see ‘Procurement of works and services for construction
projects’ available on FedNet portal.
3.5. Procurement of technology hardware and software
3.5.1 General
The International Federation’s Information Systems Department (ISD) in the secretariat in

Geneva is responsible for the management of both procurement and supply of IT and
telecommunications equipment, software and related services (e.g. maintenance) for all
Federation field operations and programmes. ISD also supplies IT and telecommunications
equipment, software and related services to National Societies on an as needed basis.
3.5.2 IT-specific procurement requirements
IT or telecommunications procurement requests are often issued by a regional requester.

The field office submits the logistics requisition to the regional logistics unit. The regional
logistics unit sends the request to the regional IT/telecommunications coordinator, who
reviews the logistics requisition and approves or rejects. The coordinator must consider
whether the request complies with the corporate IT architecture, and software maintenance
and acquisition standards as defined by ISD.
For details, please see the business process 8.2.1 ‘Logistics requisition additional validation
for IT or Telecom Item(s)” process and the template ‘IT request’ in appendix 24.
Once the procurement entity receives the validated logistics requisition from the regional
IT/telecommunications coordinator, the tender process is the same as for goods or services,
depending on the requirements that are detailed in the logistics requisition. For details,
please see sections 2.5, 2.6, 2.7 and 2.8.
For further details, please see the ‘ISD Service Catalogue’, ‘ICT hardware and software
policy’ and ‘Commercial software selection policy’ available on FedNet portal.
3.6. Procurement of vehicles and spare parts (fleet management)
For details, please see the ‘Fleet manual’ available on FedNet portal.
3.6.1 General
GLS has overall responsibility for global fleet management: strategy decisions, funding and
general management. Global fleet base in Dubai is the GLS unit responsible for ensuring that
all vehicles operated under the International Federation’s umbrella, whether owned, lent or
rented, are managed according to operational guidelines.
Global fleet base is responsible for the strategy, planning, development, procurement and
management of the vehicle rental programme (VRP) and the fleet management system,
called Fleet Wave. It is the final authority and repository of all official documentation for
Federation vehicles, including transport documentation, contracts, reports and insurance
claims. Copies, and in some instances the originals, of all vehicle-related documentation
must be sent to global fleet base in Dubai.
It is mandatory for all Federation operations to rent light cars through the vehicle rental
programme.
Local vehicle acquisitions
In some circumstance (e.g. where local laws prohibit the import of vehicles), global fleet base
may authorize the local purchase of vehicles in order to meet an operation’s needs. In this
case, the global fleet base may authorize the purchase of vehicles by the Federation
representation. All such vehicles remain a part of the vehicle rental programme and contracts
are issued accordingly.
With prior approval from global fleet base, the procurement entity initiates a tender process,
makes recommendations on the bids and forwards the following documents to global fleet
base:
(a) Logistics requisition

(b) Request for quotation
(c) Supplier offers
(d) Comparative bid analysis form
(e) Minutes of opening ceremony
(f) Minutes of the local committee on contracts with recommendations
Once the above documents have been received, the procurement entity with the Global fleet
base should proceed to the tender evaluation. The global fleet base is responsible for
ensuring that the process is conducted in compliance with established procedures.
Once the local purchase has been completed, the procurement entity must send the
following documents to the regional fleet coordinator or global fleet base:
(g) Original commercial invoice

(h) Certificate of origin
(i) Goods received note
(j) Fixed asset registration form
3.7. Acquisition and sales of assets
3.7.1 General
An asset means any item of economic value owned by the International Federation,
particularly items able to be converted into cash.
There are different types of assets as follows:
(a) Property (land and buildings): whole buildings or parts thereof to which the
International Federation would normally own the freehold title
(b) Vehicles (light vehicles, trucks, motorbikes, fork-lift trucks, trailers, boats) whose
amount is equivalent or higher than CHF 10,000 (without accessories added after the
delivery). Heavy duty bumpers and electrical winches installed on new vehicles are
capitalized with the vehicle as they significantly increase the vehicle’s future value
(c) Equipments such as computers (desktop or laptop), whose amount is equivalent or
higher than CHF 10,000, and office equipment, when not rented
(d) Intangible assets which includes externally and in-house developed software whose
amount is equivalent or higher than CHF 100,000
This section above covers only the procedure for the sale of supplies, equipment or other
property with a value exceeding CHF 10,000.
All non-rented light vehicles, trucks, motorbikes, fork-lift trucks, trailers and boats that cost
CHF 10,000 or more are capitalized. Spare parts, radios and accessories that have been
added to the vehicle after delivery are not capitalized.
The procedures concerning lost, damaged or stolen property can be found in the
International Federation's ‘Fixed assets procedure’ available on FedNet portal.
3.7.2 Fixed asset acquisition
For details, please see the ‘Fixed assets procedure no.56’ available on FedNet portal.
Whenever a fixed asset is acquired by the International Federation, the fixed asset
registration form must be completed and sent to the senior officer responsible for fixed
assets in Geneva, together with a copy of the acquisition invoice.
An asset will be considered as a fixed and capitalized if the International Federation:
(a) Has control of the fixed asset

(b) Expects the fixed asset to provide economic benefits
(c) Can measure the cost of the asset reliably
And if the asset is:
(d) The property of the International Federation (the secretariat in Geneva or any field
office)
(e) Durable in nature i.e. not a consumable such as a vehicle spare part
(f) Expected to be used for more than one year
(g) Purchased or donated from an entity, or constructed by the International Federation
3.7.3 Purchase of land and buildings
3.7.3.1. Introduction
As a general principle, the International Federation’s policy is to avoid purchasing land

unless strictly necessary for its operations. Given the changing nature of the International
Federation’s operations around the world, the International Federation wishes to avoid the
obligations and commitments of land ownership. Wherever possible, the International
Federation prefers to meet its requirements for land by leasing it from third parties.
If it is necessary to purchase land, the International Federation’s policy is that the host
National Society should be the legal buyer in return for an agreement that the International
Federation may occupy and use the land rent-free for as long as necessary.
Unless otherwise directed by the secretary general, the head of field office responsible for
the country in which the land is to be purchased is responsible for carrying out all purchase
activities under these guidelines.
3.7.3.2. Authorizations in the procurement process
Immovable or real property, such as land and buildings, can only be acquired with the prior
formal authorization of the secretary general. Such acquisitions (or funding of acquisitions by
National Societies) must be made in accordance with the following:
‘Land’ means immovable property (or ‘real estate’), any permanent structures, buildings on
the land.
It is essential to accurately identify exactly what land or buildings are to be purchased, and
what legal rights are relevant to the purchase. Local legal counsel specializing in property
law must be engaged at an early stage in the process.
The head of field office is responsible for conducting the pre-purchase evaluation, and for
carrying out a competitive tender process for any land acquisitions. Field offices must seek
the approval of the field office before starting the tender process.
The field office must liaise with the finance department and the legal department, and obtain
their prior written approval when purchasing land. The secretary general must authorize all
purchases of land by the International Federation.
As with any other procurement, purchases of land must be approved in advance at the
appropriate levels
3.7.3.3. Pre-purchase evaluation
Before deciding whether to purchase land, the Federation field office must assess the
following issues:
(a) Does the International Federation’s status agreement with the government allow the
International Federation to purchase land? In some countries, the International
Federation’s status agreements expressly prohibit the purchase of land by the
International Federation. It is essential that this issue is checked at the start of the
acquisition process.
(b) Are there any other limitations on the International Federation purchasing land in the
country in question? If so, would the proposed purchase comply with such
limitations?
(c) What are the alternatives to the purchase of the land or building? For example, would
it be preferable to lease premises or share facilities with a third party? Costs should
be provided in order to evaluate the alternatives.
(d) What is the business case justifying the purchase of the land or building? Such a
business case should consist of:
An evaluation of the International Federation’s operational needs (both current
and medium-term)
A statement of the advantages and disadvantages of the options in meeting
those needs
An evaluation of the costs and benefits of the options
An assessment of upfront costs and annual operating expenses for the
options
(e) How long is it anticipated that the International Federation would retain the land?
(f) Is there budgetary approval for all expenditure related to the proposed acquisition
(including legal fees, searches and any other costs)?
The field office should collate its pre-purchase evaluation into a written report, attaching any
relevant documents, and send it to relevant Director or Under Secretary General.
3.7.3.4. Issuing logistics requisition for land or buildings
Once the field office has carried out a pre-purchase evaluation of any land or buildings, it
must then complete a logistics requisition. A logistics requisition for land must include a
complete legal description of the land or building to be purchased, all legal contracts and
documentation relating to the land, any interests in the land, and the budget codes. For
details, please see section 2.4.
All logistics requisitions for land must be approved in advance in accordance with section
1.3.5.2.
Field offices preparing a logistics requisition for land must demonstrate that they have
considered the following:
(a) The land meets all of the International Federation’s current and future requirements.
(b) The land must be fit for purpose. For example, it must not be liable to flooding,
erosion, degradation, be a contaminated site, or subject to zoning or usage
restrictions.
(c) The correct legal status of the land must be ascertained, including whether it is
subject to any ongoing legal interests, such as:
any mortgages or liens on the land
ongoing leases or licences to occupy the land
any rights of re-possession or rights of compulsory acquisition
any easements, rights of way, or rights of access
(d) The vendor of the land must be the sole true legal owner of the land, and must be
fully authorized to sell the land. There must be no competing claims on the land.
(e) There must be no liens, charges, rights of way or other leases pertaining to the land.
(f) Local legal counsel must be engaged to ensure that there are no other legal
difficulties or impediments concerning the purchase of the land, and that the purchase
of the land is conducted lawfully and tax efficiently.
(g) Local consultants or advisors must be engaged to provide technical advice or
assistance. In particular, an expert survey of the land should be undertaken to
determine whether the land is fit for purpose, and whether the price is reasonable.
(h) A complete, valid and enforceable legal contract for the sale and purchase of the land
must be prepared. No money should be paid, whether as a deposit or otherwise, until
there is a signed legal commitment on the part of the vendor (which attaches all
relevant land deeds) to sell the land under terms acceptable to the International
Federation. Deposits should not be paid directly to the vendor, but into an escrow
account with a lawyer, notary, bank or other independent party.
(i) It must be determined whether it is necessary to pay a deposit to the vendor before
any sale occurs, and whether such a deposit is refundable.
(j) The sale and purchase must comply with all applicable local and national laws and
regulations.
(k) Any applicable taxes, stamp duties or fees must be identified (noting that the
International Federation’s status agreements may provide for exemptions from some
taxes and duties).
(l) Budgetary provision must be made for any indirect costs, such as legal and
regulatory fees, title searches, charges and duties.
(m) The purchase of the land must be recorded in accordance with local regulations.
(n) The land must be adequately insured and secured upon purchase.
(o) There must not be any impediment to the sale of the land by the International
Federation. The proceeds of a disposal must be able to be exported from the country
concerned.
3.7.3.5. Transparent and competitive purchase process
All purchases of land must follow a transparent, and wherever possible competitive, process.
Any department or field office proposing to purchase land should prepare a shortlist of
potentially suitable land. In all cases, a procurement file should be generated and a
comparative analysis of all options should be kept on record.
For details of the procedures concerning the International Federation’s competitive

procurement processes, see chapter 2.
3.7.3.6. Committee on Contracts
All proposals to purchase land or buildings should be forwarded to the Geneva committee on
contracts as stated in section 1.3.3.
3.7.4 Disposal by sale of assets
The disposal by way of sale or donation of Federation assets (any assets, fixed assets, and
inventory or stock items) should be authorized in accordance with the ‘Expenditure
authorization procedure’, and disposal or vehicles and spare parts should be authorized
according to the ‘Fleet manual’ for vehicles and spare parts.
Except for vehicles, it is the head of office or head of department’s responsibility to determine
which assets can be disposed of and the best way of doing so, for example, donating them to
a local National Society, selling them off locally or transferring them to another field office.
The procedures concerning lost, damaged or stolen property can be found in the
International Federation's ‘Fixed assets procedure no.56’ available on FedNet portal.
3.7.4.1. Identification of surplus or unserviceable property
The declaration of property as surplus or unserviceable is the responsibility of the head of

department or head of field office that is accountable for the property. The proposal to sell
the supplies, equipment or other property should be sent for approval on an asset disposal
form to the appropriate authorization level as specified in the International Federation's ‘Fixed
assets procedure’ available on FedNet portal.
3.7.4.2. Sales considerations
Before recommending sale, the recommending official will, as a minimum, consider the
following:
(a) The estimated sales value of the property, and the administrative costs involved in
conducting a sale
(b) Whether the best interests of the International Federation will be served by the sale
(c) If there is a possibility of exchange of property in partial or full payment for
replacement equipment or supplies
(d) If the destruction of the property will be more economical or is required by law or by
the nature of the property
(e) If the interests of the International Federation will be better served by donating the
property to a National Society or other humanitarian organization, or transferring it to
another operational programme
(f) If the property is part of an operational programme, any restrictions on the use of
programme commodities and the desires of the donor
(g) Whether there are government restrictions forbidding the sale of imported property or
requiring import duties to be paid before the sale of such goods
(h) The public relations impact of such a sale
3.7.4.3. Methods of sale
Once the appropriate approvals have been obtained, sales are conducted on a sealed bid
cash basis. Exceptions to this procedure must be approved in writing by the head of GLS.
There are four methods of assets sales:
(a) Competitive bidding: Invitations to bid for the purchase of property for disposal are
issued to prospective buyers. To facilitate sales, it is recommended that
advertisements be published in the local media. The format of an invitation to tender
identifies the information which is required to be published. Items may be sold singly
or in groups, if considered in the best interests of the International Federation. For the
sale of vehicles, an auction system may be used. In this case the procurement entity
responsible for the sales will use the services of a specialised firm, which has well
established auction procedures in place.
(b) Spot sales: If the estimated value (not the purchase price) of the property is less than
CHF 1,000 and sealed bidding will not provide the most practical results, prospective
buyers may be approached by letter as well as through the media. After inspecting
the property, they may submit informal bids by fax, e-mail or in writing. A date and
time limit are set on such bids as in formal bidding.
(c) Fixed price: Sale by fixed price may be recommended if the value of the property is
known and the fixed price will ensure a minimum and fair return to the International
Federation. However, it may be better to advertise for sealed bids with the desired
fixed price set as a minimum.
(d) Commercial realtor: In the event that immovable or real property (land or buildings) is
to be disposed of, the individual responsible will use the services of a local legal
counsel and a reputable commercial realtor. These individuals cannot be related
either through blood or commercial enterprise. In all cases, the proposal and the
execution must be coordinated closely with the legal department.
3.7.4.4. Conduct of the sale
Once all the necessary approvals have been obtained and the method of sale has been
determined, the property can be advertised and sufficient time given for potential bidders to
respond.
To ensure that the sale proceeds without complication, the following must be considered:
(a) Items to be sold: the International Federation must have title or legal ownership of the
property in order to carry out the sale. The seller must possess the documents of
ownership, know the location and condition, and should tag items that are to be sold
with a number that corresponds to the item number on the invitation to bid. This will
facilitate a fair and honest representation of the condition, as well as inspection by
prospective buyers and subsequent removal.
(b) Condition of the property: To prevent possible misunderstandings or legal difficulties,

it should always be clearly indicated if the property is damaged, used, serviceable, or
in need of repair, before it is advertised. Prospective buyers should be encouraged to
inspect the property before submitting bids.
(c) Payment of deposit: Some agencies request a deposit from prospective bidders.
Unless conducting a major sale of items valued above CHF 20,000, this is not
recommended for the International Federation as the administrative workload and
potential risks usually exceed any benefit gained. However, if the selling office
determines that deposits are to be requested, then such deposits shall be of not less
than 10 per cent of the amount bid. If it is a large sum, a certified cheque is required.
Deposits will be returned to unsuccessful bidders with a letter of explanation. The
deposit of the winning bid is credited to the sales price and is non-refundable.
(d) The sale: The actual sale should take place as scheduled on the invitation to bid or in
the public advertisements. All bidders must be notified if the bid opening time or
location is changed. Bidders need not be present in order to win the bid, but they
must be contactable within 24 hours. A timeframe should be set after the sale to allow
for payment and removal of property. This is usually five working days. The seller
should provide a bill of sale to the buyer, consistent with local government
requirements, as well as any other documents required to be transferred with the
property.
3.7.4.5. Actions subsequent to sale
Once the fixed asset has been disposed of, the fixed asset disposal form should be finalized
and sent to the senior officer for fixed assets together with the sale contract or gift certificate
and the handover form.
When disposing of vehicles, all radio equipment, International Federation logos and emblems
and documentation must be removed before disposal. No vehicle may be sold to military,
paramilitary or similar organizations. For details, please see the ‘Fleet manual’.
Government formalities: If any status, tax exemption or other agreements are in place with
the host government, heads of field offices will notify the appropriate government agency as
necessary.
Sales to staff
Sales to delegates and local staff members are permissible only in fair and open competition.
Field office employees must adhere to the same procedures as outside bidders; with the
exception that such employees need not provide a deposit if one is required.
APPENDICES
Appendix A A1 Glossary of terms

A2 Acronyms
Appendix B Procurement forms and templates
Appendix C Procurement processes
Appendix D List of related documents
Appendix A1 Glossary
Assets Any item of economic value owned by the International Federation,

particularly items able to be converted into cash
Assigned Staff Officials assisted by the appropriate staff to carry out procurement
activities. Assignment of such tasks and authorities retain the
officials’ responsibility for compliance with all rules, regulations,
procedures and instructions
Authorized officials Individuals acting on the delegated authority of the Secretary
General in charge to carry out procurement activities in
compliance with all rules, procedures and instructions
Bid Bond (Also named as Tender Guarantee) Form of security which
guarantees that the bidder will not withdraw a bid within the period
specified for acceptance, and will execute a written contract and
furnish the required bonds (such as a performance bond), including
any necessary co-insurance or reinsurance agreements, within the
time specified in the bid (unless a longer period is allowed) after
receipt of the specified forms
Bribery Receipt or solicitations of gifts, hospitality, or any other inducement,
as a reward for doing or refraining from doing anything, or showing
favour or disfavour to any person or company
Claim Request for compensation in case of damages or losses to goods or
services
Coercion (Also named as extortion) Act of attempting to influence the process
of procuring goods or services, or executing contracts by means of
threats of injury to person, property or reputation
Collusion Informal agreement between bidders designed to result in bids at
artificial prices which are not competitive
Geneva Committee Representatives from the International Federation’s legal
on Contracts (CoC) department, finance department and development division. It
reviews all submissions for compliance with the International
Federation’s relevant rules and procedures, including specifically
finance regulations and the procurement procedures
Land Immovable property (or ‘real estate’), any permanent structures,
buildings on the land.
Local Committee on Composed of heads of all field offices. It conducts all opening
Contracts ceremonies for and reviews all proposed contracts and
procurements over CHF 20,000 for compliance with the
International Federation’s relevant rules and procedures, including
specifically finance regulations and the procurement procedures
established herein, and provide its recommendation to the relevant
signing authority
Competitive Bid Document used in the evaluation process of the quotations, bids or
Analysis (CBA) proposals, received from the suppliers/services providers in
response to a RFQ/RFP, which is designed to ensure that the
Federation receives the best product or service for the price paid.
The CBA considers a number of variables, to include compliance
with the product or service specifications, the price, delivery time
Extortion (Also named as coercion) Act of attempting to influence the process
of procuring goods or services, or executing contracts by means of
threats of injury to person, property or reputation
Financial validation Financial sign-off by the relevant finance officer ensuring that all
applicable finance procedures have been followed and respected
Forwarding Agent (Also named as Freight Forwarders) Agents are responsible for
organizing reliable and efficient transportation of the goods by the
use of various forms of carriers
Framework Long-term agreement (generally two years) established between the
Agreement International Federation and one or more selected suppliers for the
supply of an undetermined quantity of a certain item at a fixed price
for a specified period of time
Fraud Misrepresentation of information or facts for the purpose of
influencing the process of procuring goods or services, or executing
contracts, to the detriment of the Federation or other participants
Goods All items (material items) that could be bought. Within the
International Federation there is a distinction between standard
goods available in a catalogue and identified with a code number,
and non standard goods not listed in a catalogue
Host Agreements Designed with external organizations, in order to jointly conduct a
specific project, where the external organisation is generally hosted
in the International Federation offices or another location
Incoterms 2010 Set of trade terms commonly used worldwide to specify seller and
buyer obligations in shipments in international sales contracts
Insurance Protection against risks of losses occurring during the transportation
of goods
Invitation to Tender Formal solicitation document used for procurement of construction
works and services
Logistics Document which defines the requirement for procurement and
Requisition serves as the authorization document for the procurement entity
Logistics Technical Technical approval by the regional logistics unit and/or GLS,
Approval ensuring that all relevant procurement procedures have been
followed and respected
Open Tender (or Tender opened to all suppliers, who are interested in the request for
Public Tender) quotation or request for proposal. A public advertisement invites
interested suppliers to request the solicitation documents in order to
bid to the procurement entity
Performance Bond Surety bond between two parties, insuring the buyer against losses
if the terms of a contract are not fulfilled by the supplier or service
provider
Procurement Covers all actions related to the acquisition of goods, services, and
capital items (including renting of equipment or facilities); from needs
identification to supplier contract management
Procurement Organizational units tasked to carry out procurement activities.
entities There are: the Global Logistics Service in Geneva (GVA GLS),
Regional Logistics Units (RLU) in Dubai, Kuala Lumpur (KL) and
Panama, the Field Offices
For some specific goods and services the Information Systems
Department (ISD) in Geneva, the Human Resources Department
(HRD) and the Administration Department (Admin) in Geneva are
also tasked to carry out these specific procurement activities
Procurement Individuals or entities responsible for conducting procurement
officers activities
Project Manager Manager of the cost centre or the project, who can authorize
related expenditures
Purchase Contracts Written agreement, commonly referred to as a ‘contract’ used when
the terms of the agreement are complicated or require complex
written details to ensure the obligations and rights of both parties are
adequately defined and respected
Purchase Order Document which constitutes the formal contract with the supplier,
(PO) once formally accepted by the latter
All information relative to the procurement should be included or
referred to, and attached as an appendix of the purchase order
Repetitive Purchase Purchase order award for identical goods granted to the same
Orders bidder who won an award in a recent tender or under an established
framework agreement
Request for Formal solicitation document used in the procurement of standard
Proposal (RFP) goods or goods with known specifications
Request for Formal solicitation document used in the procurement of goods
quotation (RFQ) where the specifications are either complex or not detailed enough,
or where proposals from bidders are preferred
Requester Individuals authorized to submit requisitions for procurement on
the basis of their knowledge of the programme requirements and
budget limitations
Restricted Tender Invitation to a limited number of suppliers to bid (but with a minimum
of 3 suppliers), which have been pre-qualified
Retention guarantee Guarantee allowing the buyer to retain a percentage of the payment
(retention money), as cover for hidden defects in the completed work
Secretariat Broad meaning including not only the Secretariat Headquarters in
Geneva, but also its field offices and separate units or offices,
regardless of location
Services All immaterial goods which imply a performance of duties and
consist in an action or work, such as warehousing, logistics technical
support, consultancy, etc.
Short Form Short form purchase orders are only used for small purchases under
Purchase Order CHF 1,000
Signing authority Authorized persons in charge of ensuring that all procedures have
been followed and all approvals obtained before entering into any
legal commitment on behalf of the International Federation
Solicitation Process of inviting suppliers or services providers to submit
proposals , offers and the like, with the intention of generating a
purchase order or a contract
Sourcing Consists in identifying potential suppliers who could provide goods
or services, whilst minimizing costs and risks for the International
Federation
Specifications List of characteristics an item should present to ensure the
requirements for this item are satisfied
Terms of Reference List of characteristics a service should present to ensure the
(ToR) requirements for this service are satisfied
Appendix A2 Acronyms
GRN Goods Received Note

B/L Bill of Lading
BPO Blanket Purchase Order
CoC Committee of Contracts
CRs/RRs Country and Regional Representations
DREF Disaster Relief Emergency Fund
EIC Emergency Item Catalogue
FA Framework Agreement
GVA Geneva
HoR Head of Representation
HRD Human Resource Department
ICRC International Committee of the Red Cross
ILO International Labour Organisation
ISD Information System Department
LR Logistics Requisition
GLS Global Logistics Service
NSs National Societies
PNS Participating National Society
PO Purchase Order
RFP Request For Proposal
RFQ Request For Quotation
RLU Regional Logistics Units
ToR Terms of Reference
UDHR the Universal Declaration of Human Rights
Appendix B Forms and Templates (not included)
All appendices listed below are in a separate file.
Appendix 01 - Supplier Registration Form

Appendix 02 - Logistics Requisition Form
Appendix 03 - Request for Quotation
Appendix 04 - Request for Proposal
Appendix 05 - Public Advertisement – Tender Notice for Goods
Appendix 06 - Public Advertisement – Tender Notice for Services
Appendix 07 - Terms of Reference
Appendix 08 - Minutes of opening ceremony
Appendix 09 - Comparative Bid Analysis
Appendix 10A - Tender Evaluation for Services
Appendix 10B - Technical Evaluation of Service Providers
Appendix 10C - Financial Evaluation of Service Providers (CBA for services)
Appendix 11 - Letter of regrets
Appendix 12 - IFRC Bid Bond
Appendix 13 - IFRC Performance Bond
Appendix 14 - Federation General Terms and Conditions
Appendix 15 - Purchase Order
Appendix 16 - Shipping instructions
Appendix 17 - Purchase contract
Appendix 18 - Service Contract
Appendix 19 - General Terms and Conditions for Service Contracts
Appendix 20 - Incoterms2000
Appendix 21 - Goods Received Note
Appendix 22 - Service closing form
Appendix 23 - Procurement file cover
Appendix 24 - IT Request
Appendix 25 - Delegation of Authority
Appendix 26 - Gift Certificate
Appendix 27 - Consultancy Agreement Form
Appendix 28 - Convocation for Committee on Contracts
Appendix 29 - Committee on Contracts Procedures.
Appendix 30 - Supplier profile checklist
Appendix 31 - Request for quotation for food
Appendix C Procurement Processes (not included)
All appendices listed below are in a separate file
8.0 - Procurement Management

8.1 - Supplier Management
8.1.1 - Supplier Registration
8.1.2 - Supplier Evaluation
8.1.3 - Supplier Database maintenance
8.2 - Logistics Requisition
8.2.1 - Logistics Requisition for IT or Telecom
8.3 - Framework Agreement
8.4 - Tender processing
8.5 - Tender Evaluation
8.6 - Purchase Order Contract Issuance
8.7 - Goods Reception
8.8 - Purchase invoice
Appendix D List of related documents
Authorization levels procedure

Fixed assets procedure
DREF procedure
Names Offices and Titles
Roles and responsibilities
Guidelines on document management
Staff rules
Code of conduct
Instructions to Tenderers
Host Agreement 2008
Model Integration Agreement
Terms and conditions for Project Support to National Societies
Contract Approval Matrix
Contract Approval and Recording Procedure version2
Summary of Framework Agreements 080627
Use of Framework agreements
Coordination Agreement - 10.08.07
Technical Agreement UNHRD-IFRC 250708
Vehicle Rental Programme agreement
Fleet Manual
Procurement of works and services for construction projects
Guidelines for the purchase of land and buildings
Explanation Incoterms
Summary of Framework Agreements
Medical Warehouse Guidelines final
Procedure for medical procurement
Procurement Guidelines
Guidelines for the Physical Management of Records and Archives
Local procurement
Mission Report Purpose
Summary Global transport and warehousing
What is the quality control program
Mission Report Purpose

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PROCUREMENT MANUAL

Document reference number: 093

Version number: 1.2

2. THE PROCUREMENT PROCESS................................................................................. 21

3. SPECIFIC PROCUREMENT .......................................................................................... 73

APPENDICES ........................................................................................................................ 87

The International Federation’s logistics and procurement services provide a fundamental

1.1. Purpose of the manual

1.1.1 Procurement within the International Federation

1.1.2 Objective of the manual

Procurement requirements are established to ensure that procurement is carried out in a

The main objective is to harmonize procurement practices throughout the International

1.1.3 Target audience

(a) Requesters: individuals requesting procurement services

1.1.4 Content of the manual

This manual is organized into four distinct parts:

(a) Chapter 1 provides information on governing principles, social and environmental

1.1.5 Amendments and revisions to the manual

1.2. General principles and ethics

1.2.1 Principles of conduct for procurement staff

1.2.1.1. Eliminating corruption, extortion and fraud

1.2.1.2. Avoiding conflicts of interest

1.2.2 Principles of conduct for suppliers and service providers

b) Transparency of information provision: Suppliers shall not be involved in any

1.2.3 Social and environmental considerations in procurement

1.2.3.1. Social standards

Suppliers or service providers must:

1.2.3.2. Environmental considerations

(a) Environmental policy, committing the supplier to reduce environmental impacts

(d) Increase energy efficiency of equipment

(g) Does it have an energy-saving mode or energy-star rating?

1.3. Roles and responsibilities according to authorization levels

 The International Federation Secretariat (Geneva departments and Field

 Global Logistics Service (GLS)

 Financial validation is required at the time of issuing a logistics requisition8

1.3.2 Roles and responsibilities of procurement entities

1.3.2.1. Global Logistics Service (GLS)

GLS is responsible for:

1.3.2.2. The Information Systems Department in Geneva (ISD)

ISD in Geneva is responsible for and authorized to conduct procurement of software, IT

ISD is responsible for:

(a) Providing IT, telecommunications and software procurement services throughout

1.3.2.3. The human resources department in Geneva

(a) Benchmark studies on remuneration and benefits

The engagement of individual consultants is addressed separately by HR procedures and

1.3.2.4. The administration department in Geneva

The administration department in Geneva is responsible for and authorized to conduct

(a) Office supplies, furniture and equipment

1.3.2.5. Regional logistics units

Regional logistics units are responsible for:

1.3.2.6. Global Fleet Base in Dubai

1.3.2.7. Field offices

1.3.2.8. National Societies administrating a Federation working advance9

National Societies administrating funds received from the International Federation on a

1.3.2.9. National Societies operating under the Disaster Relief Emergency

Under DREF-funded operations, different procurement procedures may apply, as follows:

1.3.2.10. Other partners acting in the name of or on behalf of the International

1.3.3 Geneva Committee on Contracts

1.3.3.1. Composition and responsibility

The Geneva Committee on Contracts consists of representatives from the International

(a) Any contract or commitment for expenditure of CHF 400,000 or more

(c) Any global or regional framework agreement

(d) Any amendment, extension or renewal of a contract NOT previously submitted to

The International Federation Secretariat (Geneva departments and Field

Global Logistics Service (GLS)

Financial validation is required at the time of issuing a logistics requisition8