Selling your innovation to a large INGO
How UNICEF’s procurement process works
#TooToughToScale Blogging Series
By Kathryn Ripley, Operations Director, Elrha and Dr. Peter Harvey Chief for WASH & Education, UNICEF
This is the fourth blog in our new series on scaling humanitarian innovation, which will delve deeper and unpack some of the most pressing barriers to scale highlighted in our recently published Too Tough to Scale report.
Despite increased investment in the area, scaling humanitarian innovations is still a big and ongoing challenge. In our report we explore why more innovations aren’t successfully scaling and identify 13 key barriers — from funding to uptake.
One of these barriers is how hard it is for innovators to get a new product adopted by large INGOs:
Challenge 5: The humanitarian ecosystem significantly frustrates efforts to scale humanitarian innovation
My inspiration for this blog came from the recent WASH innovation showcase we hosted. The event was packed with people who had fantastic innovations ready to scale, and we had a great discussion about some of the challenges they faced.
As part of this discussion Peter Harvey, Chief for WASH & Education at the UNICEF Supply Division in Copenhagen, explained how the UNICEF procurement process works and what innovators need to do to successfully sell their products to UNICEF.
I thought these practical insights would be useful to a wider audience of innovators, so have worked with Peter to outline the key pointers here. This blog is focussed on product innovations; service innovations typically go through a different procurement process.
Many innovations rely on selling to humanitarian organisations
We know that a small number of large international humanitarian organisations manage the majority of humanitarian relief efforts (see p. 50 of the Too Tough to Scale report). So, for many innovators, success at scale relies on being able to sell into the UN, the Red Cross & Red Crescent Movement and/or a few large INGOs.
This is positive because in order to achieve significant impact, an innovation only needs to be used by a few large organisations. Conversely, it makes achieving those few sales all the more important.
Innovators are typically looking for their first order to be large enough to enable the scale up of manufacturing processes, and thereby enable them to achieve a lower price point. Without scale, the product, no matter how effective it is, may always be too expensive to be attractive enough for humanitarians. Selling low order values to small INGOs or NGOs simply won’t work for most products, especially as an initial strategy.
Large INGOs and UN Agencies have significant purchasing power, so innovators shouldn’t feel constrained by low order values. The UN as a whole spends over $17 billion annually on products and services, and UNICEF spends over $110 million annually just on WASH supplies.
How to sell your innovation to UNICEF
Some basic pointers to start with:
Head Office vs Local Offices: Procurement for WASH commodities is split with around 30% of all procurement happening via Head Office and the rest via the Country Offices — this percentage split varies significantly for other types of product. Country Office procurement can go through the UNGM system (described below) but it doesn’t have to; it is possible to sell to country offices outside the UNGM route. there are 2 potential sales routes to consider.
Demand driven: Senior humanitarian staff receive huge amounts of marketing literature from innovators and mostly ignore it; procurement is driven by demand from Country Offices and never happens directly as a result of unsolicited marketing. However, if details about a really unique new product land on someone’s desk, they may absorb the information and it could inform their decision-making and influence technical specifications when they come to procure supplies in that sphere in the future.
No proprietary products: There is a rigorous process around procuring goods and one of the underlying principles is that procurement must always be done via a competitive tendering process unless the amount to be procured is under $2500. Even if the innovation is unique in many ways, UNICEF will craft the tendering process in such a way as to ensure there is competitive process.
Generic specifications: In order to ensure a competitive tendering process, UNICEF will create a set of generic specifications as the basis of any procurement process. These are driven based on the requirements from the Country Offices and may be fairly narrow (where there are lots of similar competing products) or quite broad (where products are very diverse and a broader specification is needed to ensure competition).
The Nations Global Marketplace (UNGM): Most UN procurement is done via the UNGM and all vendors must register in the UNGM as a first step.
The Procurement Process
Step 1 — Tendering
UNICEF will Request a Quote (RFQ), Request a Proposal (RFP), or issue an Invitation to Bid (ITB), depending on the value of the supplies being procured and the amount of detail required from vendors. These will be based on a set of specifications. You can subscribe to the Tender Alert Service to keep informed of suitable opportunities.
Step 2 — Evaluation & selection
Once bids have been received, UNICEF will evaluate these based on:
1) Whether they meet the technical specifications
2) Quality of the product
3) Commercial considerations (value for money)
4) They will also conduct their own product testing based on product samples
Step 3 — Approval & Contracting
Once the most suitable product has been selected, it will need internal approval, and the mechanism for this depends on the value of supplies being procured. Following internal approval, UNICEF will issue a purchase order to the vendor.
UNICEF publishes annual tender calendars that indicate the schedule of tenders for that year. In addition, if suppliers contact them directly, UNICEF will let them know when the next invitation to bid will take place.
UNICEF also drives innovation of products to address unmet needs within programmes or emergencies, including field trials for specific applications. More information can be accessed here.
Elrha continues to work to improve entry points for all types of innovation
While these tips are useful for product innovation, increasingly we are looking for, and need, innovations to address the more complex issues within the humanitarian system. These are more often process orientated and aim to lead to paradigm shifts in how humanitarian response is carried out. We at Elrha are focused on addressing these complex issues, with others, to work out how the less ‘tangible’ innovations can gain traction in the system.
Read more on Scaling Humanitarian Innovation from Elrha.