Here’s how Asian SMEs can get a slice of the UN action.
More than 135,000 contracts totalling nearly US$30 billion are awarded each year to a wide range of companies as a result of the activities of the United Nations, World Bank, and other leading development banks. However, Asian companies win only a small fraction of these lucrative contracts. Given Asia’s slow, but sure, economic recovery, now is the time for companies in the region to grab more of this business.
One frequently overlooked customer within the UN system is the United Nations Procurement Division (UNPD), which buys material and services for the organisation’s headquarters in New York City as well as for peacekeeping operations, regional commissions, international tribunals, and some special programs. The division’s latest published list of approved vendors includes only 41 suppliers from China, 91 from India, 37 from Japan, 14 from Malaysia, 19 from Singapore, and 13 from Thailand. Companies in other Asian countries have similar low rates of participation.
Clearly there is much untapped opportunity for Asian businesses. Procurement staff in the UN system are making efforts to identify new sources of supply, particularly in developing and other under-utilised countries. As a consequence, Asian companies simply need to research opportunities, understand bidding procedures, build relationships, and provide competitive prices and exceptional service to take advantage of the opportunities.
"The UN is an excellent customer for us," says Singapore-based Calvin Lee, sales manager of the Medical Division of Topcon Singapore. "We normally supply medical diagnostic equipment to hospitals in different countries under UN aid. These hospitals submit their requirements to the relevant UN liaison offices, and they in turn contact us for quotations. Once our offers are accepted, the UN offices issue purchase orders, and we deliver the instruments to wherever the equipment is required. Payment terms are usually within 30 days after dispatch of goods."
The UN is a collection of more than 30 agencies, programs, and funds with their own mandates, projects, and purchasing requirements. The collective organisation has no centralised purchasing system and no single publication to notify prospective suppliers about all opportunities. Excluding projects involving funding from the World Bank and other development banks, the UN system represents a market of US$3 billion a year.
The procurement staff buy from companies of all sizes. About 45% of the contracts involve the procurement of services, and the other 55% involve the acquisition of goods. Only 2% of the contracts are for more than US$100,000. An average contract is for US$20,000.
According to UN officials, the best way for a company to uncover opportunities and build sales is to contact each of the purchasing staff individually. Buyers at the various UN units operate under different guidelines, but all of the buyers utilise solicitation of competitive bids as the method to pick suppliers. Without a publication to advise suppliers of all new opportunities, some of the buyers post requirements on the the main UN website.
UNPD in New York operates under the direction of Andrew Toh. The group solicits competitive bids for hundreds of different categories of goods and services, buying everything from uniforms and paper to advertising and management services. Transportation and logistics services make up 20% of the contracts to outside vendors. Other major purchases involve legal, computing, architectural, engineering, and construction services. In terms of goods, the largest purchases are for computers and motor vehicles.
More than 20 field offices of peacekeeping missions, economic commissions, and international tribunals use UNPD policies to buy material and services. The addresses, phone, and fax numbers of these prospects, as well as the names and phone of key procurement officers at UNPD in New York, are available at the main UN website.
UNPD allows companies in developing countries to place advertisements at no charge on its web pages. This service is for businesses without export capabilities or export products.
Meanwhile, 13 UN groups have joined together to develop and support a UN Common Supply Database to help various buyers within the system. In the early stages of development, the database contains information about current and prospective UN suppliers. Registration of a company in the self-supporting database project costs US$100 for one year.
Participation in the common database program does not automatically make a company an approved supplier to UNPD in New York or to any other operation in the UN system. In addition to UNPD, the groups working on this effort are the International Atomic Energy Agency, the International Labour Organisation, the International Trade Centre, UN Development Program, UN Field Administration and Logistics Division, UN Population Fund, UN High Commissioner for Refugees, UN Children’s Fund, UN Office for Project Services, United Nations Relief and Works Agency, World Food Program, and the World Intellectual Property Organisation. Registration information is available online at www.uncsd.org.
Separate from those activities, the UN Department of Public Information produces the publication UN Development Business in both online and print versions. This is the only business publication providing comprehensive sources of information on opportunities to supply goods and services to projects financed by the World Bank and other leading development banks. Lending by the World Bank generates about 40,000 contracts worth about US$25 billion annually to companies worldwide.
In the case of procurement involving bank-financed projects, contracts range in size from several hundred million dollars for infrastructure projects to a few thousand dollars for consumable supplies. With few exceptions, contracts involve competitive-bidding processes.
The print version of UN Development Business is published twice a month. A subscription to the online service is US$445 for one year. A subscription to the print editions (24 issues) is US$495. Companies can obtain extra information by visiting www.devbusiness.com.
In Copenhagen, Denmark, the Inter-Agency Procurement Services Office of the UN Development Program has provided procurement services to development projects for more than 20 years. Its work ranges from large-scale purchases of electronic distribution equipment to the delivery and installation of a single computer at a client’s distant site. Typical contracts for goods involve electrical, transportation, office, and information-technology equipment. The unit places notices on the Internet at www.iapso.org. Tel: (45) 3546 7000, or fax (45) 3546 7001 for more information.
Also at the office’s website are free electronic versions of two printed guides to help prospective suppliers develop successful UN marketing plans. The General Business Guide describes procurement practices at the various UN entities, and Practical Tips offers sales advice to prospective suppliers.
Elsewhere in the system, the UN Population Fund buys US$80 million to US$100 million in goods and services annually, mostly through its headquarters in New York.
The fund helps countries find solutions to population problems. It offers supplier registration forms and posts bid opportunities on the web at www.unfpa.org. The procurement unit can be reached at tel: (1 212) 297-5392, or fax: (1 212) 297-4916.
The UN Office for Project Services is also in New York. This unit is an independent operation that provides project management services to international, governmental, and private organisations. It posts business opportunities on the Internet at www.unops.org. The group’s headquarters can be reached at tel: (1 212) 457-4000, or fax: (1 212) 457-4001.
The UN Office at Geneva uses its own staff to buy items and services. The staff also handle procurement for the UN Conference of Trade and Development, Economic Commission for Europe, UN Compensation Commission, Office for the Co-ordination of Humanitarian Affairs, UN Environmental Program, UN Institute for Training and Research, and the High Commissioner for Human Rights. Contracts sometimes involve such items as textiles, furniture, and telecoms equipment and services like printing, transportation, and consulting.
Companies that register directly with the Geneva office generally receive preference in contracting opportunities at the facility.
Prospective suppliers can download the necessary registration forms from the office’s website at www.unog.ch. Other contacts are tel: (41-22) 917 28 31, and fax: (41-22) 917 00 13.
In Washington, DC, the World Bank uses straightforward procurement practices involving competitive bids. The bank posts institutional bid notices on the Internet at www.worldbank.org. For companies with an interest in sales opportunities involving bank-financed projects, the bank offers a suppliers guide on the same website. For inquiries, call: (1 202) 473-1964 or fax (1 202) 522-3318.
To help borrowers find consultants, the bank maintains a database of consulting firms. Registration material for companies is available at the bank’s website or from Corrine De Jesus, Procurement Policy and Services Group, World Bank, 1818 H Street, NW, Washington, DC 20433 USA. Tel: (1 202) 458-4095 or fax (1 202) 422-3317.
Essential to any marketing effort at either the UN or the World Bank is the establishment of long-term relationships with procurement officers.
According to UN officials and experienced marketers, strong relationships can provide valuable information about upcoming contracts. UN and World Bank buyers are no different from anyone else: whenever possible, they like to do business with a company they know and trust.