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

Maintaining a supplier database per category is useful for multiple reasons:

  • Closed tenders or RFQs can be sent to all registered suppliers.
  • Registration documents and suppliers’ policies can be shared in advance, saving time when necessary.
  • They can be used to the record number of transactions with each supplier, the total amount spent in a year, etc.

In the UK, CPT 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 CPT. 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 POs 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 IFRC 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 GRN/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 SSC 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 PO 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, POs, contracts and GRNs 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.

 FinanceLogisticsSupplier
RequisitionOriginalOriginal
Quotation(s)OriginalCopy
WaiverOriginalCopy
Supplier due diligence reportOriginalCopy
RFQOriginalCopy
RFPOriginalCopy
Tender bidsOriginalCopy
Tender committee TOROriginalCopy
Tender committee meeting minutesOriginalCopy
CBAOriginalCopy
Letter to successful/unsuccessful biddersOriginalCopyOriginal
POOriginalCopyOriginal
ContractOriginalOriginal
GRNOriginalCopy
Contract extension formOriginalOriginalOriginal
Invoice(s)OriginalCopyOriginal
Proud of paymentOriginalCopy

Available to download here.


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

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

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

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



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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 IFRC procurement guidelines. Financial thresholds for each NS 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 ICRCestablished procurement contracts. They are a preferred option when procuring NFIs, as they are subjected to strict QA 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 RFA) 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. RFQs 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 CBA 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 FSP 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.

Best and final offers text box

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 UKO, 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).

RFP – details

  • Production requirements – to help bidders structure their offer.
  • Submission instructions – ways to submit, deadline.
  • Terms and conditions of purchase.
  • Bidder response document – standard format for all bidders to use to detail their offer.
  • Bid evaluation criteria and schedule – include timings and location details for events such as bid opening ceremony.
  • Declaration of undertaking – optional IFRC addendum procurement guidelines – mandatory if conducting a tender under IFRC rules.

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.

  • Open tender
    – Any bidder can submit an offer against the RFP.
    – No pre-vetting of suppliers.
  • Closed tender
    – Only registered supplier must be consulted
    – Registration of new suppliers done through EOI before sending out RFP
  • Restricted tender
    – Only pre-qualified suppliers can submit an odder against the RFP.
    – Pre-qualification is done through EOI.
    – Pre-qualified suppliers are added to a supplier database.

Bids can be submitted physically or electronically (in UKO, they can only be submitted electronically through an e-procurement system, accessed by CPT 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:

  • a designated group of stakeholders
  • a CoC (a minimum of two people, appointed by CPT or by the procurement lead – this is helpful where technical and programmatic considerations need to be considered for the technical evaluation)
  • the procurement lead, where no CoC or stakeholder group has been appointed.
A textbox describes the role of the Committee on Contract which must be appointed for any tender unless the requirement is waives

Bids must be shortlisted (remove any bids that are obviously unacceptable), scored against the set criteria in a CBA 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 RCRC 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

A diagram shows the process of running a tender from the UK office of the British Red Cross

Read more about running a tender from UKO 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 IQM process, agreed with the partner and stated in the GAD. The threshold agreed in the GAD supersedes the standard £5,000 threshold.

If a supplier is issued with multiple POs 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, POs or contracts formalise the agreement with the selected supplier.

The following must be included in the purchase orders and contracts:

  • original requisition number
  • tender reference number
  • details of items ordered: standards, quantity, unit price
  • added fees, taxes, delivery costs
  • payment terms
  • for international procurement: applicable incoterm.

The following must be included in contracts:

  • delivery schedule and payments
  • service level agreement
  • all relevant policies attached.

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.).


 Purchase ordersContracts
Raised byProcurementProcurement
ConsultedLegal
Approved by*Budget holder
Finance
Procurement
Budget holder
Finance
Legal

*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.

  • transport contract
  • consultancy contract
  • rental contract (lease agreements – see template for warehouse lease contract)
  • framework agreement
  • financial services provider contract template (ICRC template, please adapt and contact British Red Cross international logistics team for support).

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 CPT 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 CPT 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:

  • printing material
  • office consumables and stationery
  • vehicle servicing and repairs
  • IT support
  • fuel
  • travel agency
  • generator service
  • standard and high-usage NFIs – blankets, tarpaulins, jerry cans, cook sets, etc
  • Financial services in cash transfer programmes (see the Procurement to support cash programme delivery section of Procurement of Special Items and Services).

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:

  • a minimum spend requirement
  • minimum order quantity or value requirement
  • a maximum spend allowance
  • fixed pricing for a standard list of items or fee (for example, travel agency that will apply a fee to each booking)
  • turnaround time, from order to delivery service-level agreement.

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 FWA awarded by CPT 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.

Purchasing options

From framework agreement (FWA)

  • There is no need to complete a procurement process.
  • Purchase order can be raised against the FWA directly, per the agreed unit prices or following a quick-quote process.

With a procurement card

  • Procurement card can be requested from SSC.
  • The card can be used as a credit card for small purchases under £1,000.
  • Maximum credit amount is £5,000.

With a Caxton card

  • Caxton card can be requested from SSC.
  • For use for personal expenses while travelling.
  • Not for operational expenditure unless on an ERU deployment.

Online purchasing

  • Out-of-pocket up to £1,000.
  • > £1,000: must be managed by CPT procurement lead.

Petty cash

  • Out-of-pocket or with professional cash advance up to £1,000.
  • Claim expenses/reconcile advance against receipts.

Read the next section on Managing procurement here.



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