2.4 Request Replenishment & Services Costs Estimate
| Request Replenishment & Services Costs Estimate|
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As per Clarification Memo named "UNHRD Procedures for Billing, Ad Hoc Vendors/ Customers and Related Issues" In order to ensure UNHRD's long-term financial sustainability whilst simultaneously quoting fair and unbiased prices to our customers, a hierarchy of pricing mechanisms has been established. There are three concepts that need to be considered for UNHRD sales: prices for procurement of goods and external service, services handled internally and values on PIs/quotations. Same memo applies also on the management of Ad-hoc customers:
Prices for goods and external services
Prices for goods and external services are to be based on the following sequence listed by order of preference:
A. PO value/price (replacement/replenishment cost)
B. LTA price (in the absence of a PO price, e.g., especially if finalizing tender/creating PO is expected to take some time) or
C. MAP, i.e., the Moving Average Price automatically calculated by the system (in the absence of 1 and 2 above) – this method is applicable only for Inventory items. The cost estimates have to be requested by e-mail to the Procurement Unit (local or at Support Office level) in case of:
- NFI replenishment for which neither an LTA nor MAP (or obsolete MAP) are available, and
- Non-logistics services to be procured externally and not listed as standard services which are provided to Partner free of charge.
In case of procurement thru LTA below steps apply:
1. UCS team requests a quotation from the supplier holding the LTA with transport cost and compares the estimated transport cost provided by UNHRD Logistics unit
2. When Partner approves the quotation provided by UNHRD Proforma Invoice, within the validity indicated by the supplier and eventually by logistics unit (when transport is procured separately), UCS team creates the Purchase Requisition in WINGS by uploading to it the quote received from the supplier. The quote has to be signed by UCS staff.
3. If the Partner approves the PI beyond the quote validity, then UCS team approaches the supplier holding the LTA and Logistics team, in case of separate transport tender, for a revised offer and move forward with points 1 & 2
4. Procurement team issues the PO to the supplier based on the quote that has been uploaded in WINGS by UCS staff.
For any transport related service, WFP Transport manual applies, thereof procurement will be performed by Logistics unit directly.
Prices of goods procured with Incoterms EX-WORKS/FCA
In some cases the transport of goods procured by UNHRD for Internal or External partner t (i.e. in case of stock implementation, replenishment or on-demand procurement, Direct Delivery) can be contracted by Logistics unit separately from the PO issued by Procurement unit, due to any contingent reasons, e.g. global volatility and uncertainty of transport, when the validity of offers are subject to changes, and in line with change of LTAs incoterms to reflect EX-WORKS/FCA. In these circumstances, the hubs can be asked to compare the transport cost proposed by the supplier with offers for same transport service coming from the local freight forwarders. In case after comparison procurement of NFIs for stock implementation, thru Direct Delivery or replenishment of stock is performed with Incoterms EX-WORKS/FCA and therefore transport service is procured separately by Logistics unit, below steps can be applied:
1. If comparison is started before the PI is issued, include in the SO 2 separate lines:
- a. one for UNHRD PROCUREMENT for NFIs to be procured thru EX-WORKS/FCA against Partner’s WBS element
- b. separate line for UNHRD TRANSPORT with WBS S.0001.4.05.001
2. If comparison is performed after the sales is started and PI submitted to partner:
- a. amend the SO by adding a separate line for transport, Mat. Code UNHRD Transport, WBS S.0001.4.05.001. Enter the cost of the service to be procured through UNHRD transport contracting
- b. adjust only the condition PR00 of LI 90 (procurement line) by including only the cost of the items without transport. The WBS remains the one of INT DD.
- c. inform UNHRD Finance that the SO has been changed and request them to revise the DP accordingly
- d. once the DP is revised, issue the TPO by using the WBS S.0001.4.05.001 that will be confirmed by finance too in the DP-related table
- e. no need to go back to the partner and submit another PI whose cost will be less than the current one, but this has to be tracked and mentioned to finance colleagues also at reconciliation stage, one SCF is submitted to them. The final DN will look slightly different from the PI in terms of line items but this will be fine as long as the cost remains within PI value.
In case of procurement thru Direct delivery and Incoterms EX-WORKS/FCA, refer to Chapter 3.22 Direct Delivery. Information on how to procure, track and receive goods procured with Incoterms EX-WORKS/FCA and separate Transport contract are available on below chapters:
- Chapter 2.4.2 Prices of goods procured with Incoterms EX-WORKS/FCA
- Chapter 10.1.2.5 Procurement of WFP goods with Incoterms EX-WORKS/FCA
- Chapter 10.2.6.2 Procurement for External Partners with Icoterms EX-WORKS/FCA
- Chapter 10.3.1.3 Good Receipt for WFP goods procured with Incoterms EX-WORKS/FCA
- Chapter 10.3.1.4 Report of WFP items procured under EXworks-FCA when in transit
- Chapter 10.3.1.5 Record WFP goods procured under EXworks-FCA upon receipt in UNHRD warehouse
Services provided by UNHRD internal resources
For services handled internally , UNHRD's standard price list per Hub applies. It should be noted that each Hub is responsible for maintaining their own price lists, including periodic review of such services and their prices. Updated price lists for each Hub is posted in the Restricted area of the UNHRD website to be made available to both internal UNHRD staff and Partners. Fixed price services will be quoted according to the Hub specific rates (price list) and could be changed in specific situations depending on previous confirmation of the Hub manager.
The PI/quotation value for external services and services provided by UNHRD internal resources
The PI/quotation value shall not be applied net of the safety margin, unless under exceptional circumstances, and only upon prior approval by the Network Coordinator.
Other humanitarian organizations/entities wishing to use UNHRD facilities and specific services may request services at cost on an ad-hoc basis. Ad-hoc customers are entities with whom UNHRD does not have signed TAs in place, typically for small NGOs or larger organizations with who TAs are still under negotiation. The management of ad-hoc customers is ruled by Section 4.2 of ED Circular 2011/008 (Revised Policies for the Management of the UNHRD Network) which indicates that 'other organizations/entities wishing to use UNHRD facilities and specific services (at cost), may [...] request services on ad hoc basis.'
UNHRD manages sales of services to ad-hoc customers by applying below procedure:
- When a sale to ad-hoc customer is approved by UNHRD management, a specific customer code and WBS element must be requested and created, at the time the PI would need to be signed, at the latest:
- Creation of customer code falls under the responsibility of the individual Hubs who are offering services or otherwise doing business with ad hoc new Customers. Thereof the requesting Hub must complete a Customer or Vendor Creation and Maintenance Request and submit the duly completed form to the relevant UNHRD Customer or Vendor Focal Point(s), who review and forward to the Vendor-Customer Management (VCM) unit for the actual creation in WINGS.
- Creation of new WBS element has to be requested to Support Unit by the individual Hubs who are offering services or otherwise doing business with ad hoc new Customers
- For statistical purposes, Support Unit must be notified when the new customer code is created for a new ad-hoc customer by recording and on the SO number(s) generated to it before the ad-hoc customer signs the TA with UNHRD and becomes an UNHRD standard Partner.
- Advance Payments must be made by/received from ad-hoc customers prior to UNHRD`s provision of any service as specified in Section 5.4 of UNHRD SOPs (Payment for specific services provided on ad hoc basis) which indicates that 'In the case of service provision requested on an ad hoc basis by a humanitarian actor that does not have a TA with WFP/UNHRD, advanced payment based on and up to amount of signed PI is required before any service is rendered. The balance of funds, if any, will be returned to the humanitarian actor after the service provision is complete and after reconciliation by UNHRD’
- When advance payments is received from ad-hoc customers, provision of services is managed by applying standard sales process
Suggested text to be adopted in case of Ad-hoc process is quoted below:
WFP offers thru UNHRD to UN Agencies, international organizations and governmental/non-governmental organizations, use of the emergency response facilities and associated support services. As a standard process, the above services can be requested by authorized users which have signed a Technical Agreement (TA) with WFP (for further information click here). Nevertheless, UNHRD services can be offered to organizations/entities requesting services on ad-hoc basis, but have not signed a TA, as in this case. To be noted that an advance payment request of the services will be submitted to you by UNHRD Finance before we will start the internal process to provide you with the services you have asked for.
Look forward to hearing from you in order to take any further action.