Procurement

1Logistics in support of the programme

Logistics provides the right goods and services, in the right place, at the right time, in the right quantity and quality, at the best cost, while complying with donor rules. It often accounts for a large share of the budget of a humanitarian response.

Its main functions: procurement, warehousing and stock management, transport, fleet, management of buildings and equipment, and often telecommunications. The Logistics Cluster coordinates common services in major crises.

2The procurement cycle

1. Purchase request: the programme specifies the need, the specifications, the quantity, the date and the budget line; it is approved by an authorised person.
2. Competitive bidding according to the amount: one quotation, several quotations or a tender.
3. Analysis and selection: a comparative bid analysis against criteria known in advance (price, quality, lead time, compliance); a procurement committee above a certain threshold.
4. A signed purchase order or contract.
5. Receipt: checking of quantities and quality, signed goods received note.
6. Payment after matching the order, the goods received note and the invoice (the "three-way match").
7. Filing of the complete file, ready for audit.

3Thresholds and procedures

Each organisation sets thresholds: for example one quotation below a small amount, three written quotations above it, then a public tender beyond a higher amount. The contract with the donor may impose stricter rules: the strictest rule applies.

Never split a purchase (break it into small orders) to stay below a threshold: it is a breach that auditors easily spot.

Emergency purchases may follow a simplified procedure, but it must be authorised, justified and documented.

4Ethics, fraud and conflicts of interest

• Segregation of duties: the same person does not request, select, receive and pay.
• Conflict of interest: if a supplier belongs to a relative, declare it and withdraw from the selection.
• Refuse gifts and commissions; report any attempted bribery.
• Vet suppliers (legal existence, references) and check that they do not appear on sanctions lists.
• Keep bids sealed or secured until they are opened in committee.

5Planning procurement: from the procurement plan to the specification

Most of the procurement problems identified during audits do not arise at the tendering stage but well before it: a need expressed too late, a vague specification, a miscalculated quantity or an insufficient budget line. A high-performing procurement unit spends as much time planning with programme teams as it does consulting suppliers.

The procurement plan

As soon as a funding agreement is signed, and ideally from the proposal stage onwards, the logistician works with the project manager to build a procurement plan covering the entire project duration. This is a table listing every budget line that includes goods, works or services, and stating for each one:

• the description of the need and its budget reference;
• the quantity and the estimated total cost, based on recent prices (previous purchases, catalogues, market price monitoring);
• the applicable procedure, determined by the total estimated value of the need over the period and not by the value of each individual order;
• the date by which the goods must be available in the field and then, working backwards, the deadline for issuing the purchase request;
• any specific constraints: donor source and origin rules, items requiring prior approval, quality requirements (medicines, food, vehicles), import lead times.

Backward planning is the decisive part. For an international tender, in practice you need to allow four to six weeks for preparation and publication, two to three weeks for evaluation and approval, and then the manufacturing and transport lead time, which can exceed three months for items imported by sea. A distribution planned for month 4 of a 12-month project therefore often means the purchase request has to go out in the first few weeks.

The procurement plan is the tool that protects against unintentional contract splitting. When the same item is purchased several times during the project, it is the foreseeable cumulative value that determines the procedure. A well-maintained plan also makes it possible to consolidate the needs of several projects into a single tender or framework agreement.

Writing a usable specification

The specification describes what the programme needs, not a product or a brand. It must enable different suppliers to submit comparable bids, and enable the person receiving the goods to check compliance. A good specification contains:

• the required function and measurable characteristics (dimensions, material, weight per square metre, capacity, standard);
• acceptable tolerances (for example "length 4 m, tolerance plus or minus 2%");
• packaging and marking (donor logo if required, language of instructions);
• verifiable quality requirements: sample, certificate of analysis, certificate of conformity, pre-shipment inspection;
• the minimum remaining shelf life on delivery for perishable goods (for example at least 75% or at least 12 months for a medicine, depending on the organisation's policy);
• delivery terms: place, Incoterm, lead time, whether partial deliveries are allowed.

Reference catalogues save time and harmonise items across actors: the IFRC and ICRC Emergency Items Catalogue, the technical specifications of the clusters (Shelter, WASH) and the WHO Model Lists of Essential Medicines for health products. A brand may only be named with the words "or equivalent", unless there is a documented technical justification (compatibility with an existing fleet, for example for spare parts).

Who does what

The delegation of authority (authorisation matrix) sets, for each function, the amount up to which it may approve a request, an award or a payment. It must be written, dated, known to everyone and updated each time someone leaves. A signature beyond one's delegated authority makes the expenditure open to challenge at audit.

6Running a competitive procurement process from start to finish

Procedures vary from one organisation to another, but most rest on the same logic: the higher the value, the broader, more formal and more traceable the competition must be. The following table gives an example of the internal thresholds of a fictitious NGO. These amounts are illustrative: each organisation and each funding agreement sets its own, and the strictest rule always applies.

Step by step: the restricted tender

1. Tender dossier (days 1 to 5). It contains the instructions to bidders, the specification, the bill of quantities and price schedule to be completed, the evaluation criteria and their weighting, the model contract, the payment terms, the date and place for submission, and the declarations to be signed (no conflict of interest, no sanctions, no conviction for fraud, compliance with codes of conduct and with protection from sexual exploitation and abuse).
2. Publication and circulation (day 5). Public posting, sending to shortlisted suppliers, publication on a website or in a local newspaper, depending on the procedure. All questions from bidders and all answers are shared in writing with all bidders.
3. Submission period (generally 10 to 21 days depending on value and complexity; it may be shortened in an emergency with justification).
4. Receipt of bids. Envelopes are recorded in a register (date, time, bidder name, condition of the envelope) and kept under lock and key. A bid arriving after the deadline is rejected and returned unopened, or kept unopened with a note to that effect.
5. Bid opening. In the presence of at least three committee members, who sign a declaration of no conflict of interest. Every page of each bid is initialled; prices are read out and recorded in bid opening minutes. Bidders may be invited to attend the opening in open procedures.
6. Three-stage evaluation: administrative compliance (required documents, signatures, validity), technical evaluation (compliance with the specification, experience, lead time, samples), then financial evaluation of technically compliant bids only.
7. Evaluation report and recommendation, signed by all members, stating the reasons for rejecting each unsuccessful bid.
8. Approval by the competent authority, followed by notification of the successful bidder and information to unsuccessful bidders.
9. Contract signed before any work begins, with guarantees where applicable (performance guarantee, often 5 to 10% of the contract value; advance payment guarantee if an advance is paid).

Choosing criteria and their weighting

Two approaches coexist. The lowest-priced compliant bid is appropriate for standardised items whose quality is fully defined by the specification (jerrycans, tarpaulins, soap): all compliant bids are equivalent and price is the deciding factor. Best value for money is appropriate for services, works and goods whose quality varies: a technical score and a financial score are awarded, for example 60% technical and 40% financial. The financial score is often calculated as follows: score = weighting x (lowest price / price of the bid). The criteria and their weighting are published in the tender dossier; they cannot be changed after bids have been received.

A criterion that is not announced in the tender dossier cannot be used to reject a bid. This is one of the most frequent causes of bidder complaints and audit findings.

Exceptional procedures

Single-source procurement (direct negotiation with one supplier) is permitted only in limited cases: documented life-saving emergency, technically or legally sole supplier (original parts, exclusive distributor), failure of a competitive procedure with no compliant bid, or continuation of an existing contract within the limits provided for. Each waiver is covered by a justification note signed by the competent authority and written before the purchase. A justification written after the fact is almost always rejected by auditors.

Framework agreements and prequalification

For items purchased regularly (fuel, office supplies, hygiene kits, vehicle rental), a framework agreement concluded after a full competitive process makes it possible to order quickly at a fixed price over a limited period (often one to two years). It is also the main tool for emergency preparedness: an organisation with active framework agreements for core relief items saves several weeks when a crisis breaks out. Prequalification (a list of vetted suppliers) does not replace competition but speeds up requests for quotation.

7Full example: procuring 2,400 household item kits in Doruma

Fictitious context: the NGO "Secours Solidaire Kivale" is responding to the displacement of 2,400 households to the town of Doruma (fictitious country) following clashes. The project is funded by an institutional donor whose agreement requires three written quotations above 10,000 EUR, an open tender above 60,000 EUR and screening of every supplier against sanctions lists. The NGO's internal procedure is the one in the table in the previous section. The distribution must take place within 7 weeks.

1. The need and the estimate

The kit, compliant with the Shelter and NFI cluster specifications, contains: 2 blankets (1.5 x 2 m, at least 70% wool, 1.5 kg), 2 sleeping mats, 1 kitchen set for 5 people, 2 collapsible 10-litre jerrycans, 1 14-litre bucket with lid, 1 tarpaulin of 4 x 6 m compliant with the reference catalogue standards. Estimated unit price based on purchases in the previous quarter: 32 EUR. Total value: 2,400 x 32 = 76,800 EUR, plus approximately 4,000 EUR of local transport.

The value exceeds 60,000 EUR: a national open tender is required. The base manager suggests placing "three orders of 800 kits, each under 30,000 EUR, to go faster". The logistics coordinator refuses: this is the same need, for the same distribution, and dividing it would be contract splitting. Instead, he proposes dividing the tender into lots (lot 1 blankets and sleeping mats, lot 2 kitchen sets, jerrycans and buckets, lot 3 tarpaulins) within a single procedure, which broadens competition to specialised suppliers while respecting the threshold.

2. The backward schedule

3. Evaluation of lot 1 (blankets and sleeping mats)

Five bids were received on time. Published weighting: technical 60 points (sample compliance 30, delivery lead time 20, references 10), financial 40 points. Minimum technical threshold: 42 points out of 60. The table below is the first version prepared by the committee secretary; it contains an error that the committee corrected.

Important remarks on this table: the financial score is calculated on the basis of the lowest price among technically compliant bids. Bid B (31,200 EUR) is below the technical threshold; under the rules of the tender dossier, its price must therefore not be used as the reference. The committee recalculates using the lowest price among the remaining bids (A, C and E), i.e. 33,840 EUR: A obtains 40 x 33,840 / 34,560 = 39.2, total 90.2; C obtains 40 x 33,840 / 36,960 = 36.6, total 91.6; E obtains 40.0, total 87.0. Bid C is recommended. This correction illustrates a common mistake: using a rejected bid as the basis for calculation distorts the ranking.

Bid D was the cheapest. The committee cannot "regularise" the missing declaration after opening, as this would amount to treating that bidder differently from the others. If the tender dossier had provided for the possibility of requesting missing non-substantive documents within a set deadline, this option would have had to be offered to all bidders in the same situation.

4. Pre-award checks

• Screening of the company name, its directors and its known shareholders against the consolidated sanctions lists of the United Nations Security Council, the European Union and, if the agreement requires it, the US Treasury (OFAC); a dated printout of the result is placed on file.
• Verification of legal existence (business registry, tax identification number), site visit to the premises of new suppliers above a certain value.
• Reference checks (two documented calls).
• Declarations of no conflict of interest signed by each committee member; a member whose brother-in-law is employed by bidder E withdraws before the evaluation, and this is recorded in the minutes.

5. Contract performance, receipt and payment

The contract with C provides for delivery in two consignments, a late-delivery penalty of 0.5% per day capped at 10%, and payment 30 days after compliant receipt. At the first delivery, sample-based inspection (inspection of 5% of the bales, weighing of blankets) reveals 120 blankets weighing 1.2 kg instead of 1.5 kg. The storekeeper records a reservation on the delivery note, sets them aside, and the goods received note is issued only for compliant items. The supplier replaces the 120 blankets within eight days. Payment is prepared once the purchase order, the two goods received notes and the invoice match in quantities, prices and references.

6. The final procurement file

The file contains, in order: approved purchase request, extract from the procurement plan, waiver note for the submission period, tender dossier and proof of publication, bid receipt register, bid opening minutes, members' declarations, individual scoring sheets and evaluation report, sanctions checks, approval, notifications, contracts, delivery notes, quality control reports, goods received notes, invoices, proof of payment. An auditor must be able to reconstruct the entire decision without asking a single question.

8Donor rules, sanctions and fraud control

Every donor imposes procurement rules in its agreements. The logistician does not need to know them by heart, but must know where to find them, which ones actually change the way they work, and must check the specific agreement for each project: two projects funded by the same donor may contain different special conditions.

What changes from one donor to another

When several donors co-fund the same purchase, the strictest rule of each is applied for each aspect: the lowest threshold, the sanctions lists of all donors, the most restrictive origin rules.

Sanctions screening and the risk of aid diversion

Agreements require organisations to ensure that no funds benefit, directly or indirectly, any individual or entity on a sanctions list. In practice:

1. Screen every supplier, subcontractor and, depending on the level of risk, their directors, before the first order, then periodically (for example every six months) and at each contract renewal.
2. Keep proof of screening (dated screenshot or report from the tool used) in the supplier file.
3. In the event of a possible match (namesake), suspend the procedure and escalate to headquarters or the compliance unit: never reach a conclusion alone.
4. In areas where armed groups control trade or levy taxes, document the risk analysis and the mitigation measures taken, and know the humanitarian exemptions provided for under the applicable sanctions regimes.

The most common fraud schemes

What to do when fraud is suspected

A logistician who discovers evidence of fraud does not investigate it personally. They secure the documents (copies, originals under lock and key), do not confront the suspected person, and report in line with the organisation's policy (line manager, country coordination, whistleblowing hotline or internal audit unit). Donors generally require notification of a credible suspicion within a short deadline set by the agreement. The commitments of the Core Humanitarian Standard (CHS), in particular the one on the responsible management of resources, expect organisations to have fraud and corruption prevention policies in place, and staff to be familiar with them.

9Adapting procurement to the context

Sudden-onset emergency and protracted crisis

In the first days of a sudden-onset emergency, speed is the priority, but an emergency does not suspend the rules: it activates procedures designed for it. Most organisations have an emergency procedure formally triggered by senior management for a limited period (often one to three months), which allows, for example, shorter submission periods, raised thresholds or consultation of fewer suppliers. The emergency declaration, its duration and its scope must be in writing. Emergency procurement relies first and foremost on prepositioned stocks, existing framework agreements and common services (for example agencies' emergency stocks or the warehouses of the United Nations Humanitarian Response Depot network). In protracted crises, by contrast, annual planning, framework agreements, market analysis and a preference for local or regional procurement when competitive are expected, which supports the local economy and reduces lead times.

Urban settings and functioning markets

In cities, the market is often able to supply the goods, and the question becomes: should we buy and distribute, or use cash transfers? A market analysis (for example following the Minimum Requirements for Market Analysis promoted by the CALP Network) informs this choice. If goods are purchased, competition is generally broad; the main risk is upward pressure on prices when several organisations buy the same items at the same time, hence the value of sharing price information within the cluster.

Remote management and insecure areas

• Have bid opening carried out by a local committee, but film or photograph the opening, send the scanned bids to the country coordination before evaluation and have the award validated remotely.
• Use third-party monitoring (an independent monitoring company) for the receipt of large deliveries.
• Favour bank or mobile money payments, with a whitelist of verified supplier accounts; limit cash payments and secure them.
• Factor into the risk analysis the possibility that suppliers are linked to parties to the conflict, and adapt the checks accordingly.

Local partners with limited capacity

When a national partner carries out procurement, the intermediary organisation remains accountable to the donor. A proportionate approach consists of assessing the partner's capacity (written procedures, segregation of duties, record-keeping), agreeing with them appropriate thresholds above which the procedure is conducted jointly, providing templates (purchase request, comparative bid analysis, minutes), taking part in the first committees, and then gradually lightening the controls as capacity is demonstrated. The objective is capacity strengthening, not risk transfer: a partner on whom rules are imposed that it cannot apply, without support or budget, will produce non-compliant files and bear ineligible costs.

Specialised procurement

• Medicines and medical devices: purchases from qualified suppliers (recognised humanitarian procurement centres, prequalified suppliers), compliance with national pharmaceutical regulations, remaining shelf life, cold chain, prior approval from certain donors.
• Food: certificates of analysis, compliance with Codex Alimentarius or national standards, inspection by an independent body for large quantities.
• Works: technical dossier prepared by an engineer, mandatory site visit, bill of quantities, retention money, provisional and then final acceptance.
• Vehicles: origin rules and prior approvals, fleet standardisation (spare parts, mechanics' skills), total cost of ownership rather than purchase price.

10Common mistakes, the auditor's perspective and interview questions

What auditors look at first

A project audit often consists of drawing a sample of expenditure and reconstructing each purchase. The most frequent findings, which lead to costs being declared ineligible, are:

• fewer quotations than required, or quotations that are undated, unsigned or without a verifiable letterhead;
• no justification of the choice when the selected bid is not the cheapest;
• purchase order dated after the invoice (purchase regularised after the fact);
• no proof of receipt, or receipt signed by the requester themselves;
• contract splitting visible in the general ledger;
• no conflict of interest declaration from the committee, or a conflicted member who took part;
• no proof of sanctions screening;
• waivers not approved, or approved by someone without delegated authority;
• incomplete files or files that cannot be found.

Procurement file checklist

Field mistakes and how to avoid them

• Launching the procedure too late, then invoking the emergency to justify single sourcing: the remedy is a shared procurement plan reviewed every month at the programme-logistics coordination meeting.
• Specification copied from a supplier's catalogue: it effectively excludes competition. Write it from functional needs and reference catalogues.
• Committee made up only of logisticians: include at least one programme representative and, if possible, one from finance, and never have the requester as the sole technical evaluator.
• Post-opening negotiation with a single bidder: unless the tender dossier provides for it for all bidders, this breaches equal treatment.
• Records scattered across mailboxes and personal computers: one unique number per procurement file, one single binder or electronic folder, an up-to-date procurement register.

Interview questions

1. "Describe the procurement process you would apply for a need of 45,000 EUR of WASH equipment."

A good answer starts from the procurement plan and the specification, identifies the procedure according to the organisation's and the donor's thresholds, describes publication, receipt and opening of bids in committee, the administrative, technical and then financial evaluation, sanctions screening, approval as per the delegation of authority, the contract, independent receipt, the three-way match and filing. It mentions the strictest-rule principle and segregation of duties.

2. "The head of mission asks you to buy immediately from a supplier he knows, without competition, because the distribution is in five days."

The candidate neither refuses bluntly nor obeys blindly. They check whether a framework agreement or available stock exists and whether the emergency procedure has been activated, propose an accelerated request for quotation (24 to 48 hours, three suppliers), and if single sourcing is genuinely justified, document it with a waiver note signed before the purchase, together with vetting of the supplier. They flag the risk of ineligible costs in writing.

3. "How do you spot collusive quotations?"

A good answer cites concrete red flags (identical layouts, close numbering, constant price gaps, same contact details), the checks (direct contact with suppliers, site visit, business registry) and what to do in case of doubt (secure the documents, report, do not investigate alone).

4. "What is value for money and how do you demonstrate it to a donor?"

A good answer distinguishes purchase price from total cost (transport, storage, lifespan, losses), cites economy, efficiency, effectiveness and equity, and shows how the file (weighted criteria, market analysis, comparison with cluster prices) provides the evidence.

5. "A local partner systematically sends you incomplete procurement files. What do you do?"

A good answer analyses the causes (lack of knowledge, insufficient staff, unsuitable procedures), proposes targeted support (templates, training, participation in committees, joint-management thresholds), sets an improvement plan with deadlines, and explains how the project is protected in the meantime (prior review of purchases above a threshold).

Key references

• Logistics Operational Guide: Global Logistics Cluster (WFP).
• Emergency Items Catalogue: International Federation of Red Cross and Red Crescent Societies and ICRC.
• UNDP Procurement Manual and United Nations Procurement Manual (UNPD), as good practice references.
• Procurement rules annexed to the European Commission (ECHO) Humanitarian Partnership framework.
• 2 CFR 200 (US federal rules applicable to grants) and BHA provisions on restricted commodities.
• Core Humanitarian Standard on Quality and Accountability (CHS), commitment on the responsible management of resources.
• The Sphere Handbook (2018), in particular the sections on supply chain management and market-based programming.
• Minimum Standard for Market Analysis (MISMA): CALP Network.