Remember to apply the First In, First Out rule: all supplies should, in principle, leave the warehouse in the order in which they arrived. The exception is the First Expired, First Out rule; items with expiry dates must be distributed according to their expiry date. Additionally, damaged, infested or damp goods that are still fit for human consumption must be repackaged and distributed before older stocks and without delay, to avoid further loss.

Remember that management of the stock is delegated to the warehouse manager or Logistics delegate in charge of the warehouse, while ownership of the stock remains with the budget holder, generally the programme manager. Therefore, logistics must guarantee the traceability of stock movement and report to the stock owner on the same.

To support this, systems must be implemented to release stock, deliver items safely and document all stock requests processed by the warehouse team.

Prior to releasing stock from the warehouse:

Stock release must be authorised by the stock owner.

Generally, requisition forms are used as stock request forms to document approval of the stock release, by ticking the “request for stock issue” box. Where this option is not available, a separate stock release form should be developed.

The stock request form should be filled out by the requestor, reviewed by the requestor’s supervisor and approved by the stock owner. The warehouse team should also sign the stock request to signify their acceptance of the order preparation task. The warehouse team is responsible for keeping the approved stock request forms on file and must be able to give access to the records during an audit.

A packing list must be raised and communicated to both the requestor and the consignee of the stock (if different). It must provide a breakdown of the consignment per packaging unit (box, sack, barrel, etc), with the weights and dimensions of each container included in the consignment.

The packing list must be prepared by the warehouse staff in charge of order preparation and reviewed by the warehouse manager before the consignment leaves the warehouse. A separate packing list must be issued for each order. Several orders can be loaded onto the same vehicle, so the driver of a vehicle might be given several packing lists.

Within the Movement, waybills are often used as packing lists, in which case there is no need to include a separate packing list.

Available to download here.

A waybill must be raised in four copies by the warehouse staff coordinating the shipping of the consignment.

It must outline the number of boxes/ pallets /containers making up the consignment and refer to the orders and/or CTNsCommodity Tracking Numbers that have been loaded onto the vehicle – either use POPurchase Order references or packing list references, noted on the waybill.

The total number of containers and the weight and volume of the consignment for each individual order loaded onto the vehicle must be noted on the waybill.

How to prepare a consignment

The careful preparation of a consignment will avoid losses, claims and discrepancies, and mitigate the risks involved in delivering it to its consignee.

Step-by-step order preparation:

For details on shipping goods, see the Transport chapter.

Read the next section on Stock takes and reconciliation here.

Download the full section here.

As detailed in their stock pre-positioning strategy, the IFRCInternational Federation of Red Cross and Red Crescent Societies currently holds stock in a number of different locations using Regional Logistics Units (RLUs). The IFRC also allows PNSPartner National Societies to use warehouses they run to pre-position stocks (see the stock Stock positioning section of Definitions and concepts).

British Red Cross stores items in these IFRC-run Non-Food Items (NFI) warehouses to respond to multi-lateral responses and for use within British Red Cross programmes and partnerships.

Stocks are also sometimes loaned to other NSNational Societies. As part of this pre-positioning mechanism, and based on an annually reviewed agreement, the BRC currently holds stock in the following places, managed by the IFRC:

Each warehouse is managed by IFRC staff and follows IFRC standard operating procedures for its management, layout, access, staffing and procedures.

For more details about the procedures that apply to the maintenance, replenishment and deployment of the stock held in the RLUs, refer to the RLU SOP and to the RLU chapter of this manual.

Read the next section on Releasing stock here.

Download the full section here.

The Emergency Response Unit (ERU) kit is designed to support emergency teams deploying in the field and make them as self-sufficient as possible. The kits that are put together and maintained by National Societies contain key items for the ERU teams to perform their role, including infrastructure items to help operate offices and warehouses such as tents and generators, as well as items for delegates themselves, such as camping and kitchen equipment.

The purpose of the kit is also to act as a NSNational Society capacity-building tool – there is a general rule that items sent into the operation will be left with the HNSHost National Society, for use in future disasters. Once the kit has been dispatched, the British Red Cross’ international logistics team will generally procure a new kit. When a team wishes to return specific items of a kit, they will propose it to the logistics and emergencies teams, who will make a decision.

The British Red Cross holds two types of ERUs:

As this is an IFRCInternational Federation of Red Cross and Red Crescent Societies standard tool, the kit list is standardised across ERUs – the lists can be found on the IFRC standard product catalogue (SPC). National Societies can add items to the kit, but they cannot take any away.

The National Societies that hold the ERUs meet regularly in Geneva and sometimes review and update the kit list, but this can only be done in agreement with the other ERU holders.

For more details about the procedures that apply to the maintenance, replenishment and deployment of the ERU kits that the British Red Cross holds in stock, refer to the IFRC website, the ERU kit SOP and the ERU chapter of this manual.

Read the next section on RLU stock management here.

Download the full section here.

Mapping a warehouse

Once the storage space has been identified, it will need to be optimised for your planned needs. Areas to be included in the storage map are:

A table detailing the different areas is available to download here.

Each of the areas should be clearly separated from one another and space between stacks, racks, shelves or pallets must be included to allow for passage and cleaning.

Depending on how the goods will be handled (manually or with specialised equipment), the space between storage blocks will be different. For human handling, 1.2m is usually enough. Where specialised equipment (forklift, sack truck or hand pallet truck) is used, the manufacturer will be able to confirm the required turning circle.

Each storage unit must be at least 50cm away from the main wall of the warehouse.

Standard layouts include:

U-flow

Available to download here.

U-flow is used when the receiving and loading areas are next to each other on the same side of the building. It provides the following features:

Through-flow

Available to download here.

Through-flow is used when the receiving and dispatch areas are at opposite ends of the building. It tends to be used under the following conditions:

The warehouse manager should ensure that all areas of the warehouse are physically identified, and a map of the warehouse must be available and posted on its walls.

Equipping a warehouse

Depending on the type of goods to be stored, the activities that will take place in the warehouse and the equipment available, the warehouse will have to be fitted with office equipment, specific storage equipment, additional safe storage space and/or partitioning.

In certain cases where the warehousing activities are expected to be critical to the operation and include large volumes of items, it may be relevant to invest in handling equipment.

In all cases, the storage facility will have to be equipped with a fire prevention system.

Storage options

A stack is a pile of the same item on a warehouse shelf.

Goods must be stacked separately and sorted by programme ownership, expiry dates or final destination, for example.

A bin card must be physically attached to each stack or grouping with the same CTNCommodity Tracking Number, batch number and expiry date.

Wherever possible, stacks should be placed on pallets and not directly on the floor. Where possible, they should be wrapped in plastic sheeting or tarpaulins.

Where supplies of pallets are limited, note that bagged foods are more vulnerable to humidity than canned or bottled products, so food items should be palletised in priority.

Where pallets are not available at all, items can be temporarily stacked on plastic sheeting laid on the ground.

The distance from stacks to walls and between the stacks must allow a person (or a forklift if using) to pass and be at least 50cm.

The recommended size of a stack is 5 x 5 metres and a maximum 2.5 metres high with bags stacked by 5 x 10 = 50 in each layer x 14–15 layers (= ~ 700 bags).

The stack height will be affected by the type of packaging; boxes and jute bags stack higher than woven polypropylene bags, which tend to slide. When stacking cartons, ensure that lower packages in the stack are neither crushed nor torn. Commodities packaged in tins and plastic bottles, have lower restrictions in terms of maximum stacking heights.

In addition to height restrictions, oil packages frequently indicate a recommended maximum number of rows for stacking. Check the instructions on packaging, where they exist, or consult the suppliers for information.

Where stacks are tall, it is useful to tie a rope around the top layer to stabilise them.

Bags that need to be stacked higher than 2.5m should be stacked up to 2.5m as shown here, with the additional layers stacked in a pyramid to avoid slippage. Plastic sheeting can be added between layers to prevent slippage.

Volumetric storage

Create a one-cubic metre container to measure sand, gravel or a quantity of construction materials in bulk. This works well for timbers, poles, bamboos and items stored in “bundles” of 100 pieces for example.

Pallet racks

Simple pallet racks usually have two or three tiers. Two tiers of pallet-racking require a clear total height of about 3 metres and three tiers require a clear total height of about 4.5 metres. It is possible to have more tiers, but sophisticated mechanical handling equipment is then required.

The benefits of shelving and pallet-racking can be combined. The bottom tier of racking may be used to store the working stock if arranged at a convenient height for manual order picking. Alternatively, a special picking shelf can be placed immediately above the bottom tier of pallets. In both cases, the upper tiers can be used to store safety stock or bulk stock. Caution: check the racks’ load-carrying capacity with their owner/manufacturer or an independent engineer before using them and check every rack regularly for signs of damage.

Keep space between the racks and the walls, ensure that the racks are stable and, where possible, fixed together and to the wall and/or to the floor.

Large racks

Large racks are useful when storing large inventories of a variety of types, and where the dimensions of pallets are not the standard dimensions of packaging. The racks pictured here have the advantage of adjustable racking height.

Leave space between the racks and the walls.

Ensure that the racks are stable and where possible, fixed together, to the walls and/or to the floor.

Shelves

Use shelves where there are a lot of small items and/or when there are items that need repacking or picking (medical supplies, kits, etc). Storage on shelves does not require mechanical handling. In tropical countries where termites attack wood, metal structures are preferred. Shelves can be taken apart and adjusted to suit the goods to be stored.

Keep space between shelves and walls to improve ventilation.

Choosing the best storage options

A table detailing the best storage options is available to download here.

In addition to the above, note that to store medical and/or food items you will likely need:

See the storage of food and medical supplies sections in Managing a warehouse.

Manning your warehouse

Based on the process mapping exercise (part of the stock strategy definition – see the How? section of Stock strategy definition in Building a stock strategy), adequate resourcing will be required for the operation of the warehouse.

The size of the warehouse team will depend on the size of the operation, and the allocation of tasks should be adjusted accordingly (one member of staff may cover several of the below functions). Below is a standard organisation chart including all the skills needed to operate a warehouse.

Available to download here.

Recruiting a warehouse team

Standard job descriptions are available on request from the international logistics team.

The UKOBRC headquarters in London - UK Office logistics team can provide examples of written tests for recruitment on request, should you need them.

Guards and security staff and services can be either hired as staff or day labourers, outsourced as a service or included in the lease of the warehouse. Where guards are hired as staff or day labourers, the warehouse manager will have to define working patterns and shifts (rota). Ideally, these should be captured in a guards’ shift planner.

Some situations will call for a set of core permanent staff, with the arrangement for temporary staff to meet periodic increases in demand or workload. Holding a register of daily workers with contact details and specific skills, managed by the warehouse manager only, can be useful.

Host National Society (HNS) volunteers can also help in the warehouse during periods of high activity, but this must be agreed with the HNS and their procedures and practices must be observed in terms of volunteer hours, incentives and payments. Do not engage volunteers as regular staff without prior approval from and consultation with the HNS.

Available to download here.

Managing the warehouse team

Warehouse managers are permanent staff members, HNSHost National Society staff or volunteers. They are responsible for all activities related to stock movements: the reception, storage, release, dispatch and recordkeeping for all goods.

The warehouse manager defines, schedules and coordinates the activities and resources that need to be available to deliver the mission of the warehouse. They also oversee security arrangements, control the recruitment of day labourers and manage the schedules, payment, performance and training of all warehouse personnel.

Regular team meetings should be held, organised by the warehouse manager:

Available to download here.

Where daily labourers are regularly recruited, a system must be in place to request the number required each day, record their attendance and report to finance for payment. For example, the receiving/shipping clerk should request through a daily worker request form, signed off by the warehouse manager. Attached to daily worker record sheet, the whole file should be submitted to finance for weekly payment at an agreed time. As far as possible, day labourers should only be hired as security guards, cleaners and loaders.

Read the next section on Managing a warehouse here.

Download the full section here.

Setup options

Central, regional and distribution-point warehouses can be built, commercially rented or provided by the host National Society, the government or operational partners. Buildings designed for storage are preferred as central or regional warehouses.

Where no suitable facilities exist, the construction of temporary or permanent warehouses should be considered. Immediate and interim needs can be met through the use of specially designed warehouse tents (Mobile Storage Units, MSUs) or other temporary storage facilities.

Wherever possible, avoid sharing a warehouse with another agency and, especially, commercial firms. Where this is unavoidable, fence off different partners’ areas or clearly mark each partner’s stock. Additionally, when sharing a warehouse with another agency, a standard Memorandum of Understanding (MoU) should be signed to specify the detailed terms and conditions of the lease/sharing.

Options to share warehouse facilities within RCRCRed Cross Red Crescent:

Available to download here.

Types of warehouse

Temporary warehouses

Tents and Mobile Storage Units

Tents can be standard tents or Rubb Hall (MSU) tents.

Tents should always be set up on flat and firm ground (preferably on a concrete slab), with ditches around their outside perimeter. If possible, add a tarpaulin or net on top of the tent, allowing space for ventilation between the roof of the tent and the additional tarpaulin. If using a tarpaulin to cover stored items, ensure that a separate tarpaulin protects the items from the ground. Make sure the tent can be securely closed with padlocks. Ideally, it should be fenced inside and out to limit access and manned with 24-hour security wherever possible.

Rubb Halls (also known as mobile storage units or MSUs) are tents that have been specially developed for emergency storage purposes. The standard model used in RCRCRed Cross Red Crescent operations offers a maximum 600m3 of storage, and a ground surface of 240m2 for palletised storage.

Erecting a tent requires 12 people, at least one of whom must be a trained technician, and takes two days. Rubb Halls should also be lined with mesh or chicken wire to prevent theft.

Rubb Halls are usually equipped with a locking system that requires one large padlock, or two padlocks if the Rubb Hall can be opened at both ends.

Note: Rubb Halls are available in different sizes. However, the above is as per RCRC standards and is the model deployed to most RCRC operations.

Rubb Halls can be ordered by logistics through the IFRCInternational Federation of Red Cross and Red Crescent Societies or the ICRCInternational Committee of the Red Cross or directly from the supplier. The British Red Cross holds Rubb Hall tents in the IFRC RLUsRegional Logistics Units in Panama, Kuala Lumpur and Dubai. Rubb Halls are only to be released for extremely urgent and rapidly onset operations, with a strong business case and approval of the relevant international logistics coordinator.

Good reasons to deploy a Rubb Hall include:

Re-purposed containers/wagons or barges

Where no firm ground can be found or where tents cannot provide security for stock, it is possible to use shipping containers as temporary storage. If a container is used for long-term storage, it needs to be repurposed to create optimal conditions for its maintenance and for the items stored.

Detailed instructions on how to re-purpose containers, wagons or barges can be found here.

Permanent warehouse

In emergency setups, warehousing facilities will usually be rented as opposed to purchased.

Find a suitable warehouse

Characteristics of a good warehouse:

Also consider:

Agree lease conditions

To uphold the RCRCRed Cross Red Crescent’s neutrality principle, the identity of the owner of the premises (might be different from the leaser) must be known. Where the owner is linked to the military, religious authorities or government, this should be reported to headquarters for risk analysis.

Also review any previous usages of the warehouse to identify risks, such as if it was previously used to store dangerous or toxic material, weapons, etc.

A template Warehouse rental contract template is available to download here and at the end of this section.

Read the next section on Setting up a warehouse here.

Download the full section here.

Assessing the warehouse requirement (number, location and operation)

During the design phase of a programme, a stock strategy should be developed, including the potential requirements for warehousing. This should fit into the wider supply chain strategy for the programme (see supply chain strategy template and guidelines).

Warehouses are needed when the time required to purchase and mobilise relief items is expected to be lengthy or when responding to a protracted crisis where the risk of disruption to the supply chain is high.

A network of warehouses may also be required to ensure the rapid and efficient delivery of relief supplies. Since most British Red Cross programmes are short-term (a maximum of several years) the need for a new permanent warehouse is rarely justified, although it can be considered as a long-term solution for an HNSHost National Society supporting future programmes.

Stock strategies must be in line with organisational strategies because holding stock with a projected high value is a risk to the organisation. Other supply chain options, such as the delivery of goods taking place closer to the required time, are sometimes preferable.

Programmes should not be built around the stock strategy (What do we have?) but a stock strategy around the programme (What do we need?).

Available to download here.

Quantity and location of warehouse(s)

Stock strategy definition

View the stock strategy definition diagram here.

During the planning phase, the programme team should provide a range of information to enable logistics to develop a stock strategy.

What?

Storage requirements vary depending on type of items.

Medical supplies and drug shipments can contain small and high value items, many of which have a limited shelf-life.
A secure area is required, and close attention must be paid to expiry dates.
Antibiotics and vaccines require temperature-controlled cold storage arrangements, with sufficient capacity and a reliable power source, with a back-up option.

Combustible items such as alcohol and ether must be stored separately, preferably in a cool, secure shed in the compound and outside the main warehouse.

Non Food Items (NFIs) can usually be stored in bulk with no specific storage or handling limitations.

Dangerous goods such as fuels, compressed gases, insecticides and other flammable, toxic or corrosive substances, are hazardous.
International regulations require specific markings to identify their dangers.

Consider the volumes to be stored: the quantity to be stored and the frequency and size of deliveries and dispatches will influence the stock strategy definition.

Consider whether the stock strategy will involve holding and handling kits in stock. If so, how much kitting activity is expected to take place in the warehouse? Kits are often used in emergencies, when the aim is to provide large quantities of a standard set of items to large numbers of people.

The IFRC standard product catalogue (SPC) includes a wide variety of kits, normally provided as full kits by long-term suppliers sourced by the IFRCInternational Federation of Red Cross and Red Crescent Societies.

Detailed information on handling hazardous substances can be found here.

Detailed information on managing kits can be found here.

Where?

Where is the programme being implemented and where are the goods required?

Think about:

The geographical location (is access by road, sea or air?)
Is it a rural or urban area?
The number and location of sites
The security situation

What warehouses are available, in the region and country, in and outside of the Movement, and  what are their associated costs?

What are the options and costs of renting commercial warehousing?

What are the options and costs of using temporary Rubb Halls (mobile storage units, or MSUs) or containers (a last resort, due to cost, storage conditions and their difficulty to manage)?

-> Gathering this information will allow for a decision on where along the supply chain to position the warehousing (at global, regional, local or field level).

Consider the option and cost of having vendor-controlled inventory (VCI). Where there are long-term relationships with suppliers, suppliers can hold stock for the RCRCRed Cross Red Crescent in their own warehouses. The stock is prepaid by the RCRC and released with a simple stock request. In this case, requirements need to be carefully calculated and transport costs closely estimated as they are likely to be higher. A VCI strategy is viable where the variety of items required is small and can be supplied by a maximum of two or three suppliers, who are willing to collaborate and consolidate shipments to control transport costs.

When?

A detailed timeline (start and finish dates for the programme), with requirements scheduled throughout the programme’s implementation will help (this can usually be inferred from a good procurement plan).

Details of the frequency of deliveries and dispatches will also be helpful here, as well as estimations of the time needed to fulfil the ordering cycle. It is advised to estimate the average throughput of the warehouse in order to support the dimensioning of the required storage space (how large will orders in and out be on average helps define the dimensions required for reception and despatch areas for example).

Try to define durations for standard warehouse processes such as:

How?

Design the reception, requesting, dispatch and reporting processes at an early stage of the programme design, to inform the level of human, financial and administrative resources required.

Questions to ask when defining a warehouse resourcing strategy:

How much?

The setting of minimum stock levels must be discussed between the logistics and programme teams.

The logistics team should make a recommendation based on the programme’s requirements, to be assessed by the programme team in view of objectives, budgets and timeline.

There are a set of criteria that support defining the ideal inventory level. Usually these include:

The budget available for warehousing and transportation costs. Limited resources will influence what type of warehouse activities the programme can afford, in terms of storage space, transportation possibilities and human resources.

Clarifying the different purposes of the inventory. See table:

Available to download here.

Understanding the stock-time curve: this is about managing the supply and demand. The usage rate of stock can vary and it is important to identify and record times when the safety stock is used. See the below diagram that illustrates the stock-time curve.

Available to download here.

Using forecasts: estimating demand and supply capacity will support the accurate definition of order quantity and frequency. Forecasts will be based on the organisation’s strategy (how they define preparedness requirements in the stock strategy paper), assessment reports (how they define working stock levels in assessment reports) and short-term forecasts and risk assessments (how they define safety stock levels in the programme plan).

Choosing an ordering system: choose the trigger for placing a replenishment order. Apart from the stock level and the usage rate, two factors can determine what is the right time to place an order:
Order placement and delivery lead time
Order quantity

Considering the shelf life of items held in stock in the ordering cycle.

To determine the order frequency and quantity, the free stock level is the most important information to have at hand.

Physical stock on hand
+stock on order from suppliers
+stock in transit
-reserved stock
=Free stock level

Reserved stock is stock already allocated to orders in preparation, or stock otherwise reserved for special purposes.

There are two different “standard” re-ordering systems:

Remember

Reorder quantity (ROQ) = average daily usage x average delivery lead time

Reorder point (ROP) = ROQ + safety stock

When ROP is reached, an order should be placed to the ROQ quantity calculated.

Safety stock must be an organisational decision (expressed in days’, weeks’ and months’ usage), based on risk appetite.

ROQ should be calculated with daily, weekly and monthly numbers consistently across the calculation. This calculation takes consumption during both the order lead time and consumption in general into account but variations (higher or lower consumptions) will not be incorporated.

A concrete example:

The initial situation:
In the Sinapai branch, they decided to stock at least 50 family kits (=50 lanterns, 50 buckets, 50 jerry cans, 150 blankets…)
Their actual stock is 60 complete family kits.

The distribution:
After a small disaster, the branch distributed 10 family kits with 15 extra jerry cans and 10 extra blankets.

The new situation:
They only have 35 complete family kits left.

Replenishment needs:
They absolutely need to replenish 15 jerry cans and 10 blankets to reach their stock minimum of 50 complete family kits.

General considerations for stock strategy definition

Estimating your storage space needs

Once it is confirmed that one or several warehouses will be needed to deliver the objectives of the programme and with the storage location(s) agreed, you will need to estimate the storage needs.

The size and type of the warehouse will depend on the required storage capacity for an operation and is determined by the maximum quantity (in tonnage and volume) of supplies to be stored.

This may be different from the total quantity required for the whole operation. The quantity of stock to be held and the number of warehouses to use will vary along the duration of the programme and is determined by the programme plan.

The required storage volume depends on the weight-per-volume ratio of the goods. The area occupied in the warehouse by one item depends on its volume, the height of the storage space and the maximum permissible load-per-square-metre of floor space.

To illustrate how volumes can vary dramatically, below are some examples of the average volume in cubic metres (CBM) of one metric ton (MT) of the following items:

When calculating storage requirements, only 70 per cent of the total warehouse’s surface capacity should be considered as available for storage space. The remaining 30 per cent is used to ensure proper ventilation, passageways, handling space and repackaging areas.

Warehouse storage capacity:

Approximate storage capacity of the warehouse = Length x width x (height – 1m) x 70%

How to calculate the required storage capacity:

Add the total weight and total volume of the items to be stored and use the volumetric info from the above table (CBM per MT requirements)

Divide the total CBM by 70 and multiply by 100 to calculate the total warehouse volume needed. Assume 2m stacking capacity. Include truck docking areas (in addition to the storage spaces).

View and download a table demonstrating the calculation of required storage capacity here.

Estimating your floor-load capacity needs

No more weight than that specified in the warehouse leasing contract should be stacked per square metre of floor space. The permissible load at ground-floor level will normally be 1,000–3,000kg/m², but on upper floors (or ground floors where there is a crawlspace or basement) it can be as low as 500–800kg/m².

Always do a physical check of the floors – when floors are damaged, their capacity will be reduced.

Calculating stock turnover and adjusting target stocks

It is good practice to periodically review the target levels of stock that have been set for a programme and set a stock turnover target (per item and per period) to ensure that the stock targets remain relevant to the operation.

The stock turnover target can vary from one item to another and depends on the context of the operation. At the British Red Cross, the stock turnover target on NFINon-Food Item stocks pre-positioned for emergency response is equal or greater than two per year: to consider stocks of a specific item as relevant, the ratio of items issued out to the average inventory level in the year must be greater than two.

A basic way to calculate the average inventory is the beginning-of-year inventory plus the end-of-year inventory, divided by two:

average inventory = (inventory at beginning of year) + (inventory at end of year) ÷ 2

stock turnover ratio (per item) = total quantity of stock issued out (1 year) ÷ average inventory (1 year)

A few questions to guide the stock review to adjust target stocks:

Read the next section on Sourcing a warehouse here.

Download the full section here.

Definitions and concepts

Learn more in the Definitions and concepts section.

Stock safety

Learn more in the Managing a warehouse section.

Building a stock strategy

Learn more in the Building a stock strategy, Sourcing a warehouse and Setting up a warehouse sections.

Storage options

Learn more in the Sourcing a warehouse and Setting up a warehouse sections.

Health and safety in the warehouse

Learn more in the Setting up a warehouse, Managing a warehouse and Health and safety in the warehouse sections.

Roles and responsibilities in stock management

Learn more in the Definitions and concepts section.

Stock audit requirements

Learn more in the Stock takes and reconciliation and Disposing of and writing off stock sections.

In-kind support to the Red Cross movement

Learn more in the ERU stock management, RLU stock management and Releasing stock sections.

Download the whole Warehousing chapter here.

Medical procurement

Read more about medical procurement here.

Consultancy services procurement

In the British Red Cross, this is currently not managed by logisticians, although this is under discussion as it technically is a procurement process – contact international HR for details on the process to recruit consultants.

A process flowchart is available from international HR for more details on consultancy services procurement.

Facilities rental services procurement

The needs definition phase should focus on:

Seek recommendations from peer organisations or rental agencies, with options compared in a CBAComparative Bid Analysis format.

The CBA and the recommendation should then be approved by a budget holder, procurement manager and finance manager, with the security focal point included for information.

Negotiations with selected supplier or service provider should ensue.

Negotiation points should confirm:

Due diligence must be carried out before the contract is issued to the supplier or service provider.

Rental invoices should be sent directly to the finance team (or SSCShared Services Centre in British Red Cross UK) for payment with a copy of the rental contract.

Facilities management in the UK

In the UK, the facilities team at SSCShared Services Centre will support the selection and contracting process. The facilities team should receive invoices for all property rentals and process property-related payments directly.

SSC holds a framework agreement covering maintenance and services to property rented by the British Red Cross. Service requests must be placed through SSC’s support desk, who liaise with the facilities management company and allocate a level of urgency to every request.

Requestors of building services will be informed of the timeline for service delivery directly. More information on the facilities team and their support can be found on Redroom.

There is a requirement for the British Red Cross to have specific documents available on British Red Cross-run sites at all times, in a “statutory documents folder”. More information about the statutory documents folder can be found on Redroom.

Selection criteria for rental premises

In general

Given the status of PNSPartner National Society in country (working for the IFRCInternational Federation of Red Cross and Red Crescent Societies and not having legal authority in country), whenever considering property rentals, make sure the legal authority in country is involved in the process and kept informed at all stages.

The lease agreement must eventually be signed by the legal authority in country.

Warehouse selection

See the Building a stock strategy and Sourcing a warehouse sections of the Warehousing chapter.

Accommodation

As a rule, prioritise secure facilities such as an apartment, house or other fully self-contained area, or containers or prefabricated buildings in a compound. Considerations listed in the In general section apply.

Office space

Where the British Red Cross works in partnerships, it is usually possible to be hosted by either the NSNational Society, the IFRCInternational Federation of Red Cross and Red Crescent Societies or the ICRCInternational Committee of the Red Cross, following the terms of an integration or service agreement (IA). The use of office equipment is usually provided on either a free or cost-sharing basis, or as part of the service/integration agreement.

Sharing premises within the Movement

As a PNSPartner National Society, it is usually not possible to acquire land or property in a country other than the PNS’s own; however, where relevant, a business case should be put together to provide a costs-benefit analysis to compare acquisition and rental options. A PNS willing to rent premises outside their own country would have to go through the HNSHost National Society or IFRCInternational Federation of Red Cross and Red Crescent Societies to rent spaces for them.

If renting space from the IFRC, service charges must be defined as part of the integration agreement or through a separate agreement.

See the Policy and Procedure for Provision of Integration and Administrative Services for National Societies from the IFRC for more details on integration and service agreements.

If renting space from the HNS, service charges can either be defined in the GADGrant Agreement Document or agreed locally.

Any examination of a new site should use the NSNational Society security audit checklist and ideally be carried out by a security adviser from the IFRC.

Clearing and forwarding services procurement

Read about the procurement of clearing and forwarding services here.

Procurement to support cash programme delivery

For more details and useful resources about cash programming, refer to the British Red Cross Cash Hub.

The Cash Hub platform, hosted by the British Red Cross as a shared leadership initiative with International Federation of Red Cross and Red Crescent SocietiesIFRCInternational Federation of Red Cross and Red Crescent Societies and ICRCInternational Committee of the Red Cross, has been launched as a global resource for the Movement to help increase the Movement’s capacity to deliver cash assistance. All templates referred to in this section are available on the Cash Hub via the search function, mostly from the Cash and logistics section.

Visit the Cash Hub here and join the online cash community of the Movement: the platform offers support to expand our knowledge, skills and networks in different ways, such as searching through a range of resources, training opportunities, programme guidance and tools, or accessing interactive cash maps with key data on cash programmes.

The vast majority of cash programmes will require tendering for financial services and/or voucher services. The requirements for cash services must be defined by the programme team, using the scope of work template and the response sheet as a reference. Note that there are separate response sheet templates to use for FSPFinancial Service Provider procurement and voucher vendors procurement. Using these resources will ensure that you collect the minimum information necessary to ensure the tender is successful.

The modalities of cash distributions must be defined in a supply chain strategy and associated services must be captured in a procurement plan, so they can be sourced, contracted and monitored by procurement experts with consultation of finance and programme experts.

Cash services providers must be evaluated jointly by programme, finance and logistics, through a tender process or a simple CBAComparative Bid Analysis.

The most common services that cash programmes require are:

*Although beneficiaries can choose what they want to buy, the choice will still be limited to the products a certain shop offers, and often limited to a pre-determined set of items.

To define the procurement process to follow, refer to the flowcharts in the Quote-based procurement section of Sourcing for procurement, making sure the distinction is made between the value of the vouchers or amount of cash distributed and the cost of delivery.

The ICRC have published a step-by-step guide to cash transfer programmes tendering on the Cash Hub which helps planning for the entire procurement process.

Take the Cash assistance through Financial Services Provider training, a 90-minute online modular training outlining critical steps and tools to successfully contract an FSP. The training is accessible from the Cash Hub here.

Cash procurement rules:

See the Assessment section on the Cash Hub for guidance on tendering for financial service providers.

The following applies to all services:

Sourcing a financial services provider

Look up existing resources on the Cash Hub, under the assessment section, to find guidance on how to assess service providers and lay out a risk register for a cash response.

The roadmap at the start of the assessment section gives useful general information, and the “financial service providers baseline checklist” and the “mapping service provider template” are also available. There is also an “assessing FS topics and sources template”. All templates are available from the Cash Hub.

Other information sources that can support the selection of an FSPFinancial Services Provider:

There are strong regulatory controls around financial transfer services including (but not limited to) anti-money laundering (AML); counter-terrorism financing (CTF) and know your customer (KYC) procedures. Due diligence is therefore a key mitigating action against the risk of using an FSP for the delivery of a cash programme and will ensure both compliance and the technical quality of the services delivered.

A pre-qualification step should occur before the tender is published, with a Request For Information (very similar to the EOIExpression of Interest) sent to potential suppliers (the supplier registration form can be used as an RFIRequest For Information when accompanied by background information on the future tender). The FSPs who respond should be evaluated against a pre-defined set of criteria. Pre-qualified suppliers should then be invited to tender (see the Tendering for goods and services section of Sourcing for procurement for more details on restricted/open tenders). This is the preferred option, but if there is insufficient time to undertake two steps, an open tender can be the preferred route to select an FSP. Technical and financial proposals must be requested and received from suppliers or FSPs and after the technical evaluation only those eligible will be considered for the financial evaluation.

Standard selection criteria for FSPs

Check the Cash Hub’s Procurement tools and templates section for guidance on the selection of service providers and use the CBA template for Financial Services Providers (FSPs) available in the section resources to define criteria and requirements.

Standard criteria include:

A standard contract for FSP has been designed by the ICRCInternational Committee of the Red Cross. It will require adapting to the contracting organisation’s specific requirements.

For a voucher programme, retailers need to be contracted as service providers and all usual contracting requirements should be followed. A tip sheet for voucher programmes is available from the Cash Hub. A standard template for voucher printing services is also available from the Cash Hub under the Procurement tools and templates section.

Regular monitoring of the retailers and voucher providers is important from the procurement side, to ensure they hold the right items (in quantity and quality), offer fair and transparent prices, etc. The information collected from the retailers must then be triangulated with the beneficiary monitoring data to initiate payment of the retailers and of the voucher provider (reconciliation).

When using FSP services to transfer cash to beneficiaries, logistics must be involved in the reconciliation process before payments are processed. Logistics also supports the performance management of the selected FSP(s) throughout the contract implementation phase – see the Managing the performance of contracts and suppliers section of Managing procurement).

The reconciliation process should be formalised with a Certificate of completion and/or a service delivery note, available from the procurement tools on the Cash Hub.

Construction material

Where construction activities aren’t subcontracted, the organisation takes responsibility for conducting the procurement of construction materials.

A supply chain strategy is important for any programme requiring supplies but is crucial for construction projects. An analysis of the supply options needs to be included in the programme design.

Some points to consider when procuring construction items:

Note that all procurement of construction items or services done under IFRCInternational Federation of Red Cross and Red Crescent Societies procurement rules MUST be approved by the procurement authority in Geneva before issuing a contract.

Food and seeds

The British Red Cross rarely supports the procurement of food and seeds. National Societies would typically seek advice from the IFRCInternational Federation of Red Cross and Red Crescent Societies or ICRCInternational Committee of the Red Cross purchasing teams for such procurements, to manage the risks associated with procurement of food and seeds (mostly phytosanitary). For further information, see Section 3.4 of the IFRC’s procurement manual, which is dedicated to the procurement of food and seeds.

In many ways, the standards for procuring food and seeds are similar to those that apply to procurement of medical items: strong controls are in place to ensure goods are fit for consumption, and to protect national production – some countries will not allow food and seeds to be imported for example.

Always refer to your regional logistics coordinator for advice on procuring food or seeds.

Vehicles

See the Fleet chapter for details on the procurement of fleet.

Read the next chapter on Warehousing here.

Download the full section here.

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.

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).

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

Download the full section here.

Defining the need for goods or services

In the UK

Procuring against UK contracts

View a step-by-step guide of how to procure against UK contracts here.

Procuring in Agresso vs manually (UK procurement only)

View a step-by-step guide on how to procure in Agresso and how to procure manually in the UK here.

The selection of the procurement process will be based on different criteria, such as estimated costs, risks and the lead time available.

Procurement through partners

The financial thresholds detailed here only apply to programmes following British Red Cross or IFRCInternational Federation of Red Cross and Red Crescent Societies procurement guidelines. Financial thresholds for each NSNational Society will have to be defined and agreed locally, and individual donors can define different thresholds and processes. The GAD determines which guidelines will have to be followed.

View and download the procurement process for UK international here.

Using the Movement’s resources

The British Red Cross has access to ICRC–International Committee of the Red Crossestablished procurement contracts. They are a preferred option when procuring NFIsNon-Food Items, as they are subjected to strict QAQuality Assurance testing from the ICRC internal QA team and from third-party service providers mandated to verify the quality of the items manufactured by the supplier. Procurement through an ICRC contract must be managed by UK logistics.

Using ICRC contracts for procurement:

View and download a diagram explaining how to use ICRC contracts for procurement here.

British Red Cross can also access IFRC-established contracts. They are particularly useful in the replenishment of pre-positioned stocks, with delivery at the IFRC warehouses (regional logistic units). A global logistics services agreement governs the relationship between the British Red Cross and the IFRC as a procurement service provider. Procurement through an IFRC contract must be managed by British Red Cross UK logistics.

View and download a diagram explaining how to use IFRC contracts for procurement here.

Quote-based procurement

Depending on organisational policies, some purchases will require one or more quotes to be obtained from suppliers (see British Red Cross/IFRC thresholds table).

The requestor will complete and have their requisition form (in British Red Cross UK this is called the RFARequest For Action) approved, indicating a desired timeline for delivery, before submitting the form to the designated procurement lead. The procurement lead will consult the market and inform the requestor on a realistic timeline for delivery of the requested items (they can refer to the procurement plan for this).

Depending on the complexity of specifications, an RFQ form or RFQ document should be shared with suppliers for purchases, in order to ensure that all potential bidders receive the same information about the requested goods or services. RFQsRequest for Quotations should be shared with known suppliers and do not need to be advertised or published. They should clearly state the criteria against which the bidders will be evaluated, which must be agreed with the requestor. RFQs can be shared as simple forms to fill out, or as a formal, more detailed document.

When multiple quotes are received, they are evaluated against each other in a CBA that captures the selection criteria, calculates a weighted score per supplier and gives recommendations as to which is the most suitable supplier. The CBAComparative Bid Analysis must be prepared by the procurement lead and submitted to the Committee on Contract (CoC) if one is appointed and otherwise to the logistics team lead, the finance team lead and the budget holder for approval. Where relevant and specified in the original request, technical expertise can be sought (and the technical expert must also sign the CBA).

As part of the analysis, supplier due diligence must be carried out (financial and credit check, sanctions check, counter-terrorism check, ethical policies and standards check, etc.). Note that in the case of FSPFinancial Services Provider and voucher vendors, financial and credit checks can be particularly challenging: pay special attention to the nature of documents required as part of submissions, to avoid failed tenders. For more details on procurement for cash transfer programmes, go to the Procurement to support cash programme delivery section of Procurement of Special Items and Services).

As part of the selection process, it is good practice to request that bidders submit samples of the goods or services they will supply to the procurement lead. Samples should be anonymised by the logistics team and shared with the requestors for their input.

After the quotes’ analysis, a purchase order or contract must be drafted and submitted for approval, together with the complete file (including approved CBA, approved waiver (if applicable) and recommendations).

In UKOBRC headquarters in London - UK Office, this means raising the purchase order in Agresso and submitting for approval.

View a step-by-step guide of what to do when multiple quotes are needed here.

Tendering for goods or services

Tendering as a British Red Cross partner

As part of the development of a procurement policy, every organisation should define a requisition value above which the market will have to be consulted in more details, via a Request for Proposal (RFP). It is important that the procurement lead works closely together with the requestor to make sure all details are captured in the RFP.

The total requisition value is not the only criterion defining the need for a tender – some levels of risk identified will drive the decision to tender for specific services even below the agree tender threshold (see the Risk Management – Identifying Risks section of Definitions and Concepts).

The RFP must be published for a minimum of two calendar weeks for local tenders and three weeks for international tenders. It is usually better to have tenders for cash transfer programming advertised for a minimum of three weeks.

Up to an agreed threshold, it has to be shared with known suppliers only, in a closed tender. Known suppliers can be listed on a database or can be added to the database before sharing the RFP through an Expression of Interest (EOI).

Above that threshold, the RFP will have to be advertised publicly on an online platform or in local newspaper; all interested parties can submit a proposal. In open tenders, reaching out to specific suppliers to signpost them to the public announcement is authorised, to encourage them to bid for the tender.

Restricted tender occurs when only pre-qualified operators can submit offers. Restricted tenders generally start with calls for EOIs, which allows for the advanced selection or shortlisting of suppliers that are then asked to respond to the tender. Restricted tenders are used when the legal framework of procurement is stricter than usual, for example in the procurement of pharmaceutical products, vehicles, or financial services, where suppliers must adhere to certain standards.

Bids can be submitted physically or electronically (in UKOBRC headquarters in London - UK Office, they can only be submitted electronically through an e-procurement system, accessed by CPTCorporate Procurement Team or international logistics). All bids received must be recorded on a bid opening minutes format, and confirmation of receipt must be sent to each bidder within 24 hours of the deadline stated in the RFP.

Where bids have been submitted electronically but outside of the e-procurement system, they should be sent to a generic email address that only one person can access (British Red Cross international logistics use BRC_International_Logistics@redcross.org.uk).

If bids are received in hard copies (physical copies), it is good practice to use a Bid submission register. After opening the bids, they can be evaluated by:

Bids must be shortlisted (remove any bids that are obviously unacceptable), scored against the set criteria in a CBAComparative Bid Analysis and due diligence, including sanctions and counter-terrorism checks, must be completed (see guidance).

The CBA must be approved by requestor, budget holder, finance approver, logistics approver and where needed by a technical expert, or by the tender committee (or CoC).

The successful bidder must be informed via an award letter that references the tender number, terms and conditions and policies that the supplier must agree to. The award letter should invite the successful supplier for contract negotiations and signature.

View and download a diagram of the process following CBA approval here.

Unsuccessful bidders must be informed through standard letters of regret once the contract with the successful bidder has been confirmed – informing them before then puts the organisation at risk in case the contract cannot eventually be awarded to the successful bidder.

Joint tendering – Tenders can be run in collaboration with other RCRCRed Cross Red Crescent members. This requires significant coordination in the absence of a standard approach. There are ongoing initiatives to coordinate and streamline the process. Contact the logistics coordinators for overseas joint procurement, and the SLM for UK-initiated procurement.

Running a tender from UKO – specifics

Read more about running a tender from UKOBRC headquarters in London - UK Office here.

Supplier due diligence – counter terrorism and sanctions checks

A carefully designed due diligence framework helps organisations strengthen risk management by establishing healthy partnerships and mitigating criminal, contractual or reputational risks.

Due diligence should rely on a mix of self-certification provided by prospective partners and independent research.

Counter terrorism and sanctions check are part of the supplier due diligence process.

Whenever the international directorate at the British Red Cross or its partners consider engaging with a supplier through a procurement process with a total estimated spend above £5,000 and using British Red Cross funds, the prospective suppliers should be checked using the MK Denial website before being issued a purchase order or contract.

This threshold can be set lower than £5,000 in cases where additional donor requirements apply or in cases where the risks are higher – for example, due to the context or nature of items purchased. The agreed threshold must be proposed as part of the risk register developed as part of the IQMInternational Quality Methodology process, agreed with the partner and stated in the GADGrant Agreement Document. The threshold agreed in the GAD supersedes the standard £5,000 threshold.

If a supplier is issued with multiple POsPurchase Orders with an estimated total value above £5,000, it is recommended that a framework agreement (FWA) is established following a tender process. Where the procurement lead organisation has a framework agreement or long-term agreement (LTA) in place with a supplier, the supplier should be checked periodically, as per the agreed review schedule (this would usually be annual). The supplier due diligence guidance note explains how and when to perform counter-terrorism checks.

Contracting/raising purchase orders

When procuring as a British Red Cross partner

Following the selection process and due diligence checks, POsPurchase Orders or contracts formalise the agreement with the selected supplier.

Service level agreement includes provisions for claims and penalties.

It is good practice to include penalty clauses in contracts. Penalty clauses should be linked to the service level agreement and address all points agreed in it: quality, lead times, and all agreed terms and conditions (such as packaging instructions, documentation required, etc.).

*Seniority of the signatory of the PO or contract is determined by the total procurement value or is the authorised legal representative of the organisation

A set of template contracts is available for download at the end of the section.

Contract amendments:

Contract changes: must be documented, approved by the original approver of the contract, dated and kept on file with the original contract.

Contract extensions: at the expiry date of a contract or when the total value of it has been spent, a contract extension form must be filled out to request an extension. The contract extension form must be signed off by the head of procurement (in BRC, this is the head of CPTCorporate Procurement Team or the head of international logistics).

A contract can only be renewed once, and the duration of the extension cannot exceed the duration or value of the original contract. At the expiry date of the extended contract, a full procurement process must be completed again (or waived through a waiver request).

Contracting/raising purchase orders – UK specifics

The requirements in the Contracting/raising purchase orders as a British Red Cross partner section apply, and the CPTCorporate Procurement Team must be informed ahead of contracting. British Red Cross corporate procurement tools must be used, i.e. a requisition must be raised in Agresso and approved as per the approval matrix designed in Agresso; once it has been approved, a purchase order or contract can be raised.

Contract amendments for UK contracts: request must be submitted to CPT, who will draft a contract amendment, sign it and share with logistics.

Framework agreements

In general

Ideally based on the ‘80/20 procurement strategy’ so they cover the most procured items or highest spend lines, framework agreements (FWAs) are a specific type of contract that cover several purchases along a determined period.

FWAs should be used to source regularly procured and readily available products where the market prices are sufficiently stable, where the product specifications and prices are fixed for a period of time.

Standard items usually procured under framework agreements include:

A FWA is set up through a tender process (see the Tendering for goods or services section), by circulating a request for proposal (RFP) or expression of interest (EOI) to the open market. The FWA should be reviewed every one to three years.

Selection criteria must be similar to criteria in an RFP but can also include:

It is good practice to include penalty clauses in FWAs, just like in other contracts. Penalty clauses should be linked to the service level agreement and address all points agreed in it: quality, lead times, and all agreed terms and conditions (such as packaging instructions, documentation required, etc.).

Once set up with the framework agreement template, a purchase of any value can be made against the FWA, based on the approved price list or following the standard single quote procedure if no price list has been included in the FWA.

FWA set up in the UK for use in the UK

In the UK, the standard FWAFramework Agreement awarded by CPTCorporate Procurement Team is a two-year contract, with the possibility of a one-year extension (this can change and must be agreed at the start of the project). To set up a FWA, the same steps are followed as for a tender, with the supplier management details added to the specifications. CPT will support by setting up supplier review meetings as needed.

Purchasing

Purchasing is the process of buying items or services without a full procurement process. It can be done in various ways in the British Red Cross.

Read the next section on Managing procurement here.

Download the full section here.