Riding off each other’s procurement coattails in Ethiopia
BY Saman Mastiyage Don | May 5, 2016|Comments 1
Promoting sustainable technology. Protecting biodiversity. Training peacekeepers. The UN in Ethiopia is active on many fronts as we move towards the future. For much of this work, we use consultants to complement our in-house expertise and resources. Now we have a way of streamlining this system: a joint UN common procurement system.
Our new online monitoring tool tracks our use of long term agreements (LTAs) with external vendors, calculates and analyses cost savings, and uses this information to ensure minimum waste and maximum efficiency.
With the new tool, we can monitor the use of LTAs on a quarterly and annual basis so that we have a clearer picture of how each of the LTA is used. We can identify the gaps in common services, and work to develop more joint LTAs in the future. Last but not least, the tool provides data for informed advocacy calling for increased use of joint LTAs by the UN agencies in Ethiopia.
This is no small thing. We use LTAs a lot. There are currently 28 UN agencies, funds and programmes in Ethiopia, making it one of the largest UN country teams in the world. As an example, just in 2014 we conducted 12,500 transactions to the total sum of over US$15 million. We used 120 individual LTAs dealing with travel, printing, advertising, etc.
The opportunity costs of uncoordinated procurement
Undertaking procurement itself is an opportunity cost – which is why we are working hard to see where we can save times by riding off each others’ LTAs. If one agency has undertaken a procurement process for, let’s say’ printing services – ensuring value for money and a fair competitive process, why should another part of the UN have to redo the whole process?
The development of joint UN LTAs brings into play the stronger bargaining power of the UN. We can act together to bring about financial benefits by establishing more stable and predictable bulk purchases, and stronger relationships with suppliers.
Here in Ethiopia, sharing LTAs has saved 9.5 million in labour costs. This is compelling evidence that LTAs help make us “fit for purpose.” Starting in 2015, the UN agencies in Ethiopia have been introducing joint UN LTAs for use by all agencies in the categories dealing with printing, travel, and purchase of drivers’ uniforms.
By 2020 the UN expects cost savings of $6.9 million, with the categories of joint LTAs increasing from the current three to 25.
All part of a bigger plan
The online monitoring tool for LTAs was developed as part of the UN’s implementation of the Business Operations Strategy for Ethiopia. We started this kind of work in 2013, targeting common services such as premises in order to increase the efficiency, effectiveness and quality of the UN’s operations in the country. Our new plan (2016-2020) will focus on the development of more joint LTAs and common rosters; negotiate better exchange rate savings in order to channel more funds to development and humanitarian interventions; and build on the capacity of local implementing partners.
Currently we are dealing with a drought affecting 10 million people in Ethiopia. We are working to meet the Sustainable Development Goals. We are coping with climate change, gender issues, and so much more. We are proud of what we have achieved and excited on what is yet to come.
It is a perfect moment to make sure we have the right tools to tackle all this in the most effective way, and use our resources as intelligently as possible. We know we are not alone in this effort, so anyone out there working for the same goal, please do reach to us so, as the saying goes, we don’t end up reinventing the wheel.
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