A senior official from the United Nations Procurement Division has encouraged South African aerospace and defence companies to bid for United Nations (UN) contracts, with billions of dollars of opportunities available.
Joscha Kremers, Chief of the Aviation Transportation and Logistics Section of the United Nations’ Procurement Division, was speaking to hundreds of assembled delegates at the sixth annual Aerospace, Maritime and Defence (AMD) Conference hosted by Creative Space Media in Pretoria last week.
He said the United Nations has seen a constant increase in procurement volume since 2012, with total procurement reaching $18.7 billion in 2018, with an equal share between goods and services (most procurement is from the Procurement Division, UN Development Programme, the World Food Programme, UNICEF and UNOPS). Last year South African companies did $200 million worth of business with 30 UN suppliers, especially regarding operations and support.
Kremers told conference attendees that there are large opportunities to supply UN requirements, with nine UN peacekeeping missions in Africa – most UN missions are on the continent. The UN Procurement Division (UNPD) in 2018 saw procurement of $3 billion worth of goods and services, a slight decline from the previous two years but the amount is more or less stable. Most procurement is for air transport, fuels, food and catering, information and communications technology, building and construction.
In 2018, air transport was the major UNPD purchase, valued at $461 million, with 200 aircraft deployed globally including from South African vendors. Kremers said that in Africa, Ethiopian Airlines has a contract to fly soldiers on board one of its Boeing 767 airliners, but the UN is in the process of issuing a new tender and this could be an opportunity for South Africa.
After air transport, UNPD spend in 2018 was on fuels ($418 million), food and catering ($379 million), ICT ($369 million), building and construction ($249 million), transportation and storage ($157 million), travel ($157 million), real estate ($156 million) and security ($91 million).
South African companies supplied $69 million worth of goods and services to the UNPD in 2018, down from $73 million the year before and $78 million in 2016. In 2018, this was mostly for air transport ($44 million). Kremers said he could think of three or four South African companies supplying turboprops, C-130s and jets to the UN. Other UNPD procurement was for travel, fuels, transportation and storage and food and catering.
Kremers said South African companies provided good quality goods and services at affordable prices, which is very important. He encouraged medium and small South African companies to bid for UN tenders, as “not only big multinationals can be successful with the UN. More the medium sized companies and some smaller companies are more successful. I’m not saying there are no opportunities for big companies either.”
However, Kremers cautioned that the UN system is complex and companies may not initially be successful, but if that is the case the UN can provide a debrief to explain what went wrong. It can also take up to a year for a contract to be awarded, although average bidding time is several months and bidders can bid in local currency. They are usually payed within 30 days.
Most contracts are available on the UN Global Marketplace website (www.ungm.org).