FAO is committed to procuring goods in a competitive and transparent manner. For all procurement actions expected to exceed US$ 5,000, the competitive procedures are based on letters of invitation to submit bids to selected potential suppliers. FAO does not utilize open or public tender procedures except in very limited circumstances.

Procurement is carried out either through Purchase Orders utilized for goods and commodities or Contracts for works or services.

Goods are procured based on tenders which must be sealed if over US$25,000. Sealed bids are sent to FAO's Office of the Inspector General and are opened by a Tender Opening Panel. Unless otherwise stated in the tender, Purchase Orders are awarded to the lowest bidder meeting the specifications. In emergency situations delivery terms may be considered the prime factor in the selection of the supplier and will be so stated in the tender.

Contracts for works and services are awarded based on Technical Proposals or Priced Bids. Technical Proposals are based on the Organization's provision of a general description of the nature of the services to be provided and bidders are invited to submit technical and financial proposals under separate cover. Prior to opening the financial proposals, the technical proposals are opened, evaluated and ranked. The contract is awarded to the firm submitting the best technical proposal if it is within the budget of the project. If it is not within the budget, consideration can be given to awarding the contract to the firm submitting the next best technical proposal. Priced Bids are the result of tenders for which exact technical specifications have been provided by the Organization and the bidder is requested to price the provision of the services required. In this case, award of the contract is based primarily on price.

In all cases unsuccessful bidders are notified that the Purchase Order or Contract has been awarded to another bidder although FAO does not release the names of successful bidders.

Payment Terms

For Purchase Orders, payment is generally made within 30 days of receipt of invoice properly supported by all requested shipping documents and inspection reports. FAO does not make advance payments or issue letters of credit.

Payment terms for contracts are determined by the nature of the services provided. Contracts for works and services may provide for advance payments of up to a maximum of 20% of the contract amount upon provision of a bank guarantee.