United Nations’ Procurement Operations in 2020 DevelopmentAid

The United Nations (UN) sees procurement as an essential instrument necessary to fulfill its mission. Last year, UN agencies and organizations reported a total procurement volume of US$22.3 billion of which almost 10% or US$2.1 billion was earmarked for the procurement of goods and services related to the COVID-19 pandemic response. This article provides a helicopter view of the UN’s procurement operations in 2020.

The United Nations defines procurement as the multitude of actions necessary for the acquisition of goods, services, works, or real property via competitive bidding in order to fulfill its mission and mandate. As a public organization entrusted with managing the funds provided by its 193 Member States, the UN ensures the efficient, reliable, and effective use of the available resources by abiding to the following principles:

Best Value for Money (BVM) – relates to the selection of an offer that best meets the quality requirements and provides the best return on investment. BVM does not necessarily represent the offer with the lowest cost
Fairness, integrity, and transparency – all of the UN’s procurement activities should be accompanied by a set of appropriate rules that are applied evenly and consistently to all potential vendors
Effective international competition – all potential vendors should be informed and invited to participate in UN procurement actions in a timely and satisfactory manner without unnecessary restrictions
The interests of the UN – all procurement activities should conform to the UN’s mandate and interests

UN procurement stats for 2020

The United Nations is currently comprised of 39 reporting entities that each have a clear procurement element that takes various forms such as funds, programs, specialized agencies, and the organization’s secretariat. Here are some facts related to the UN procurement activities for 2020:

For 2020, UN organizations reported a total procurement volume of US$22.3 billion which is 12.3% more than in the previous year and is the highest recorded to date since 1945
The majority of the funds – nearly US$ 12 billion (52.5%) related to the procurement of goods while the remainder involved the procurement of services
Of the 39 entities and organizations, only 16 reported an increase in their procurement volumes in 2020 compared to 2019 while the majority experienced a decrease
The World Health Organization (WHO) experienced the largest increase (+92.3%) in procurement volumes, reaching US$ 1.7 billion, followed by the United Nations Development Programme (UNDP) with a 23.1% increase and the Food and Agriculture Organization (FAO) with a 17.9% rise
In contrast, the International Telecommunication Union (ITU) experienced the biggest drop in total procurement volume with a decrease of 61.1 %, followed by the United Nations Assistance to the Khmer Rouge Trials (UNAKRT) with a 42.6% decrease and the United Nations Framework Convention on Climate Change (UNFCCC) with a drop of 41.8%

In terms of procurement for goods and services by specific sector, the majority of the funds went to the health sector with an overall volume of US$5.5 billion, followed by the Construction, Engineering and Sciences sector with a little over US$3 billion and Food and Farming with US$2.5 billion. On the other hand, the least procurement volume went to the Industry and Education sectors with US$0.4 billion and US$0.3 billion respectively.

Fig. 1. UN procurement by sectors of goods and services

Source: The Annual Statistical Report on United Nations Procurement 2020: Procurement by UN organizations.

COVID-19 related procurement

The COVID-19 pandemic significantly influenced the UN’s procurement operations in 2020. Around US$2.1 billion, or 11.5 % of the total volume, was allocated for the procurement of goods and services related to the pandemic response. The World Health Organization was responsible for the highest COVID-19-related spending in 2020 which amounted to US$750 million, followed by UNDP with US$496.6 million and UNOPS with US$221.9 million. In terms of procurement category, the majority of funds (US$654.8 million) were allocated for the acquirement of medical equipment, followed by laboratory and testing equipment with US$383.6 million and the IT and communications equipment category with US$166.8 million.

Fig. 2. COVID-19 related procurement by categories

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