Managing procurement

Tracking procurement

Use a procurement tracker to monitor and report on the progress of requests and procurement processes, and to highlight and communicate obstacles and delays. This should be shared with the programme team and requestors at an agreed frequency and should inform monthly project meetings. Where there are significant obstacles to timely procurement, the programme team and requestors must be consulted.

Looking at the procurement tracker, procurement leads should also be able to highlight procurements that need to be initiated in order to meet the requested delivery timeline on the procurement plan.

Supplier database

In the UK, CPTCorporate Procurement Team does not keep a supplier database but they maintain lists of pre-qualified suppliers for specific items who can be called upon for higher-value procurement, so it is good practice to contact them or international logistics to check with one or both when sourcing items.

Managing the performance of contracts and suppliers

Maintain a separate list of ongoing contracts, including their validity dates and total value.

Monitor supplier performance against a contract’s service-level agreement and hold one or two meetings each year to review performance and amend contracts where necessary. The supplier performance matrix can be a good guide for these supplier performance meetings.

Suppliers can be appraised against the terms of the contract: standard indicators to track include “On Time In Full” (OTIF), order turnaround time and delivery claims. When managing long-term contracts, it is recommended to have standard key performance indicators in place, against which performance can be measured over time.

Managing the performance of financial services providers (FSPs) in cash programmes is critical as they play such a key role in the successful implementation. See the Procurement to support cash programme delivery section of Procurement of special items and services for more details.

Contracts in the UK are managed and reviewed by the CPTCorporate Procurement Team. They will contact the logistics team when contracts are expiring or a supplier performance meeting is due and the logistics team can give feedback either through the supplier performance matrix and taking part in review meetings or by working with stakeholders to decide on contract extensions or terminations.

Contact the corporate procurement team for more information about the supplier scorecard and supplier management in the UK.

Managing deliveries

The delivery of goods or services against approved POsPurchase Orders and contracts must be planned, prepared and documented.

Agreeing deliveries can be done in the contract or PO, through a schedule and agreement of responsibilities.

It is good practice to agree delivery terms against the official list of international commercial terms (incoterms) to ensure all parties understand their responsibilities, particularly in cases where the goods or services are sourced internationally.

The expected receiver of physical goods (the warehouse officer, storekeeper or receptionist) must be informed at least 48 hours in advance of the planned delivery so they can ensure they have got space, resources and time to process the delivery.

To learn more about incoterms, refer to the Specifics of international movement section of Types of Movements: local and international.

Documenting deliveries

Delivery of goods must be accompanied by a delivery note prepared by the supplier and a goods received note (GRN), raised by whoever is processing the delivery internally. The GRN, which will eventually have to be signed by the requestor of the goods, should mention any discrepancy in quantity or in quality against the expected delivery and be signed by the delivering party, the receiver and the requestor.

What is stated in the GRN must match what is reported in the stock records. See the Transport chapter for more details.

The delivery of services must be confirmed with a qualitative appreciation of the services delivered. In the UK, where there is no form to confirm receipt of a service, this is done through the Agresso tick-box process, or with a GRN where the procurement has been conducted outside of Agresso.

A separate document such as a certificate of completion (also called a service delivery note in the IFRCInternational Federation of Red Cross and Red Crescent Societies procurement manual) should be used to confirm the quality of the service, but a simple note can be added to the GRN to confirm that the services delivered met the agreed standards. This must be signed off by the requestor of the service and a technical expert. Note that this is the form to use when confirming receipt of cash transfer or voucher distribution services.

Once approved, the GRN and all affiliated documents become part of the procurement file. Where there are discrepancies recorded at delivery, these must be detailed on a claims report, signed by both parties. Partial deliveries must be specified on the GRN, or the certificate of completion if used.

Processing payments

Payments can only be processed by finance staff, based on a fully documented procurement process.

Invoices for delivered services or goods must be addressed to finance (not to the signatory of the GRNGoods Received Note/certificate of completion) and matched with the procurement files handed over to the finance focal point. Where a claims form is attached to the procurement file, finance should consult with the receiver to ensure the contents of the claim matches the payment amount. No payment can be issued to suppliers without a completed GRN/certificate of completion.

Invoices for delivered services or goods in the UK must be addressed to APInvoices@redcross.org.uk (not to the signatory of the GRN/certificate of completion) and matched to an Agresso purchase order. The invoices are then posted on Agresso and a notification is sent to the person who raised the purchase order to post a GRN against it to authorise payment. As the requestor is likely to be different from the receiver, the requestor must ensure they have a copy of the receiver’s GRN before authorising it on Agresso and they should attach a copy of the GRN to the procurement file. See the UK Procurement processes flowchart for a summary of the process to follow from requisition to payment.

Where the supplier has failed to deliver on a product or a service, the outcome of this must be agreed before they post the GRN on Agresso. If the supplier accepts liability, they can issue a credit note that must be sent to SSCShared Services Centre and posted to Agresso. The requestor can then post a GRN against the purchase order and the credit note at the same time, so when payment is approved it takes off the value of the credit note.

The preferred payment terms of the British Red Cross are 30 days after invoice against delivery and issuing of a clean GRN. Exceptions can be made (see the “advance payments” information below), in particular in cash transfer programmes.

Where the invoice amount differs from the Agresso POPurchase Order amount by more or less 20 per cent, SSC will ask for the PO amount to be modified and for the PO to be approved again through the Agresso workflow.

Advance payments can be agreed but need to be flagged to finance.

Advance payments must be supported by partial GRN or pre-agreed contractual terms. A partial GRN or certificate of completion can be submitted to SSC for payment against partial invoices, but the original purchase order should be split into lines to match the expected schedule. Where advance payments are required, it is advised – although not always possible – to pay a maximum of 30 per cent of the contract or PO value.

Exceptions apply for pre-financing of cash transfer services with financial services providers (see the Procurement to support cash programme delivery section of Procurement of special items and services.)

Documenting and filing

Procurement files must be completed and handed over to finance for payment and filing.

Copies of original requisitions, POsPurchase Orders, contracts and GRNsGoods Received Notes must be kept by logistics, either by procurement file or by type of document.

The UK procurement process flow diagrams show which documents are mandatory by threshold – always check for donor requirements in terms of retention time and specific documents to include in the procurement file.

	Finance	Logistics	Supplier
Requisition	Original	Original
Quotation(s)	Original	Copy
Waiver	Original	Copy
Supplier due diligence report	Original	Copy
RFQ	Original	Copy
RFP	Original	Copy
Tender bids	Original	Copy
Tender committee TOR	Original	Copy
Tender committee meeting minutes	Original	Copy
CBA	Original	Copy
Letter to successful/unsuccessful bidders	Original	Copy	Original
PO	Original	Copy	Original
Contract	Original	Original
GRN	Original	Copy
Contract extension form	Original	Original	Original
Invoice(s)	Original	Copy	Original
Proud of payment	Original	Copy

Available to download here.

Procurement files should be kept on archive for various durations, depending on the requirements that apply.

The CPTCorporate Procurement Team in the UK retains copies of the tender documents and procurement process as well as documents relating to ongoing frameworks and supplier performance. International logistics can retain a local copy as well, for reference. Copies of original requisitions, POs, contracts and GRNs are kept by logistics in separate files in the British Red Cross international quality methodology filing system (PIMS).

UK (HMRC)	Six years
ECHO	Five years
BRC GAD standards	Invoice and purchase orders: six years plus current year Contracts: end of contract plus eight years Supplier selection documents (tenders, minutes and evaluations): three years

Read the next section on Procurement of special items and services here.

Download the full section here.