The United Nations has invited South African companies to register and bid for billions of dollars worth of tenders issued each year by the organisation.
Sean Purcell, Chief Field Procurement Service, UN Secretariat Procurement Division, told delegates at the recent Denel Aerospace, Maritime and Defence conference in Pretoria that South Africa is ideally located to be a supplier to the UN, but is not a major one at the moment.
He pointed out that the UN spent $17.2 billion on procurement in 2014, up from over $16 billion in 2013. South Africa accounted for .98% of total spend of the United Nations last year at $169 million – however, 90% of this came from a single air services contract awarded to a local company. Purcell noted that without the contract, SA spend would have been around $10 million.
Peacekeeping is growing but South African supply is going in the opposite direction, Purcell said. He pointed out that there are nine peacekeeping mission in Africa, plus the African Union mission in Somalia which relies on UN logistical support. There are 107 000 police and soldiers on the ground, including 2 135 South African troops, and 32 000 African Union troops.
Purcell said that when the UN establishes a peacekeeping operation, often there is no infrastructure available and everything has to be built up from scratch. Most peacekeeping money is spent in the first two years of an operation, primarily on construction. For 2014, the major items procured by the United Nations included food; pharmaceuticals; vehicles, computers and software; shelter and housing; telecommunications; lab equip; chemicals; building materials and security equipment. The main services utilised were air charter (220 aircraft fly on a daily basis); security; engineering; construction; freight; consultancy and communications.
Purcell said that to become one of the 988 companies that do business with the United Nations, “we have to know about you,” and that companies have to register with the UN. This can be done through the UN Global Marketplace (ungm.org), where tender opportunities can also be viewed – there are currently 400 active tenders.
“You will not win the first or second tender but you possibly will win the third one provided when you’re unsuccessful you ask for a debriefing,” Purcell told conference attendees. He noted that the UN works on best value for money, not cheapest price. “South Africa is ideally positioned to provide support to the missions,” Purcell emphasised. “Seriously, South Africa is ideally positioned to provide. I know you can do it. But you have to give thought and homework into what you want to do and do homework in which entity needs your services.”
United Nations procurement is not centralised, as there are 79 different agencies doing procurement, although Field Procurement Service acquires 90% of equipment. The biggest spenders of 2014 were UNICEF ($3.38 billion), UN/Procurement Division ($3.2 billion), WFP ($2.7 billion), UNDP ($2.2 billion), UNHCR ($1 billion) and the WHO ($709 million).
For 2014, the major goods and services purchased by the UN Secretariat were air transport services ($773 million), chemical and petroleum products ($666 million), food and catering services ($377 million), architecture, engineering and construction services ($175 million) and rental and lease ($71 million).
Purcell noted that overall procurement from South African suppliers has been declining. For instance, procurement spend went from $258 million in 2009 to $210 million in 2010, $188 million in 2011, and $167 million in 2012. It rebounded to $194 million in 2013 then down to $169 million in 2014. Last year the main goods and services acquired from South Africa were air transport services, security and safety equipment and services, management services, motor vehicles/parts and transport equipment and medical items.
At the moment there are 316 vendors from South Africa registered with the United Nations, down from 493 in 2014 and up from 109 in 2013.
Although being encouraged to bid for UN work, some local defence companies voiced concerns about doing business with the UN. Some of the concerns were that the tenders sometimes require large volumes only big companies can handle and that often goods and services are requested within a very short timeframe.
Another concern was contracts with excessive or unrealistic specifications – such as tents that can withstand hurricane force winds. Purcell admitted that there were instances of old tenders being dusted off and reused elsewhere and that “sometimes we get it wrong.” He urged potential service providers to alert the UN to unfeasible tenders and these would be changed.