There are key challenges to keep in mind when considering United Nations procurement: 1) international competition, 2) conservative vendor selection, and 3) lengthy business development cycles. Additionally, some firms have expressed concern regarding delays, onerous requirements, and lack of clarity/transparency in tender specifications. 

International Competition

American companies will be competing with vendors from around the world. The UN system is committed to a diverse set of international vendors, and in many instances, there is an effort to ensure equitable geographic representation and participation of emerging economies while maintaining the principle of effective competition. The UN system places an emphasis on vendors from member states identified as “Developing Countries” and/or “Countries with Economies in Transition,” as part of the organization’s commitment to increasing business opportunities for suppliers in those countries.

The United States is the largest supplier of services and the second largest supplier of goods to the UN, making it the largest overall supplier.  India is the second largest overall supplier. The fastest growing procurement countries in 2019 were Yemen and Switzerland. Overall, there was approximately a 12 percent increase in procurement from the top 10 countries from 2018. The top ten overall supplier countries by procurement volume are as follows:

2019 United Nations Procurement by Supplier Country

Source: 2019 Annual Statistical Report on United Nations

https://www.ungm.org/Shared/KnowledgeCenter/Pages/asr_report

India is the largest overall supplier in the developing countries, countries with economies in transition, and least developed countries (LDC) category. However, the greatest growth from 2019 comes from Yemen, which increased its procurement by more than 50 percent. The top ten supplier countries by procurement volume for developing countries, countries with economies in transition, and least developed countries are as follows:

2019 United Nations Procurement – Developing Countries, Countries with Economies in Transition, and Least Developed Countries

Source: 2019 Annual Statistical Report on United Nations

https://www.ungm.org/Shared/KnowledgeCenter/Pages/asr_report

Conservative Vendor Selection

As an international organization with a responsibility for managing public funds, the UN takes a conservative approach to vendor selection. Procurement teams are typically looking for suppliers who are able to demonstrate a track record of working on projects of similar size, scope, and location (especially if it is an international project). This may make it more challenging for new suppliers with fewer years of operation to succeed in securing a UN contract, especially if the size of the contract is out of proportion with the suppliers’ previous revenues.

For many UN agencies and organizations, vendors interested in bidding on tenders are required to register with United Nations Global Marketplace (www.ungm.org). For certain contracts, in particular those of large scale, high value, complexity and/or risk level, a higher level of UNGM registration is required. In order to be registered at a higher level, vendors are requested to provide additional documents such as a certificate of incorporation, three years of audited financial statements, and three reference letters.

Lengthy Business Development Cycles

The pursuit of UN Procurement is not recommended for companies focused on short-term results. Given the UN’s conservative approach to vendor selection, it is unusual for a vendor to win a contract following their first bid. Vendors are encouraged to respond to any tenders to which they are invited, and to establish a pattern of interest.

Sustainable Procurement

Sustainable development is “practices that integrate requirements, specifications and criteria that are compatible and in favor of the protection of the environment, of social progress and in support of economic development, namely by seeking resource efficiency, improving the quality of products and services and ultimately optimizing costs.” As of 2019, 39 UN procurement organizations have implemented formal and informal initiatives to promote sustainable procurement, pursuant to the definition above. While economic concerns are considered first, environmental and social concerns are second and third most considered when deciding on a tender. Many organizations have incorporated sustainability in the requirements of their tenders. See the UN sustainable development website for more information: https://sustainabledevelopment.un.org/