The 11 major rules of running a warehouse:

Definition:

A warehouse is defined as a planned space for the storage and handling of goods and materials. Goods and materials stored in a warehouse are considered as stock, which is also called “inventory”. Warehouses are an integral part of the supply chain, their main purpose being to serve as physical transit points between supply (delivery from suppliers) and demand (end-users or beneficiaries).  

Where needed, warehouses allow for the breakdown of bulk deliveries across different requestors or into phased deliveries, and for the combination of loose items into kits to meet beneficiaries’ needs.

A well-managed and well-positioned warehouse allows for speedy responses to both planned and unplanned needs and ensures that both inventory and staff are ready to respond to planned and unplanned needs.

Functions of a warehouse

View and download a detailed diagram of warehouse functions here.

Different types of inventory

It is important to be aware of the difference between stock (inventory), office supplies, office equipment and assets:

*The storeroom is typically a small room in the office where a small stock of office supplies is kept

Available to download here.

Purposes of holding stock

The main purpose of stock is to de-couple supply and demand in an operation that requires the provision of pre-determined goods and materials.

Stock ownership

Generally, stock is owned by its original requestor (the person who pays for the goods) and physical management of items and materials is delegated to logistics.

This means that logistics cannot choose to increase or decrease stocks unilaterally and that updates on inventory must be shared between the logistics team and the owners of the stock managed in the delegation.

In that sense, logistics is responsible for the inventory it holds for others, but requestors and programme managers are accountable for the type and quantity of items they require logistics to hold in stock for their use.

Stocks management – roles and responsibilities

RACI matrices are used throughout this manual. They break a process into steps, specifying who is Responsible, Accountable, Consulted and Informed at each step of the process.

Available to download here.

The valuation of inventory is critical for the organisation to manage the risk of ownership of stock in general, and in particular to support the definition of insurance requirements.

Financial management of stocks

For financial management of stock in the UK, refer to the Bulwick warehouse SOP, ERU kit SOP, UKO stock management SOP, RLU stock management SOP and the Balance sheet guidance note.

More information on the Regional Logistic Unit (RLU) and Emergency Response Unit (ERU) stocks management can also be found in the RLU stocks and ERUs chapters of the Manual.

The general concepts to bear in mind are:

Note: it is recommended that the members of the logistics team who manage stock regularly meet with both their requestors and the finance team to review current stock type, levels and locations, discuss proposed changes (if any), ensure budget management and reconcile stock. In the British Red Cross, the logistics team meet with owners of the stock they manage (ERU kits, RLU representatives) and with their finance business partner on a regular basis.

Stock positioning

Within the Red Cross Movement, stocks are held at different levels and the processes to follow to access stock vary between levels of storage:

The IFRC’s global stock strategy aims are:

To cover the initial needs of the immediate aftermath of any disaster, the IFRC, with the stock pre-positioning of their members in the different RLU, has pre-positioned emergency response stockpiles in their network of regional warehouses across the globe, which could support up to 450,000 people at anytime and anywhere.

Read the next section on Building a stock strategy 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.

When working on a project, make sure the workload that procurement represents is clearly identified so it can be absorbed by your team. The standard roles involved in procurement are as below (see the IFRC logistics competency framework for reference):

Available to download here.

Standard job descriptions for procurement-focused positions can be requested from the international logistics team.

The logistics team’s structure should be defined in the early stages of the implementation phase, as per the IQMInternational Quality Methodology process. Based on the project plan and other planning tools, such as the procurement plan and budget, a resource plan should be defined and implemented to support the programme’s activities.

At that stage, the programme team should define:

In terms of cost of procurement: the cost of items and services to be procured will often be budgeted while other costs related to procurement may be overlooked, such as delivery, administrative or handling costs. The identified procurement lead should make sure that these costs are budgeted for.

Read the next section on Procurement processes in the British Red Cross here.

Download the full section here.