Hello everyone. Welcome back. Coursera public procurement for UN Procurement Division. Last session we talked about how to prepare to participate UN Public Procurement. Number one step was conducting company analysis and product analysis to prepare writing company capability statement. A capability statement is not like company brochure or English literature for your company, but it is two-page precise distinctive information about your company background, your historical data, your core competency, and things what you can say about your achievement and also list of your products and services with the certification for your product. Also obviously you have to include your contact detail. Why we said two-page summary instead of the many pages of English brochure? Normally, when you have English brochure in a PDF format, how many page would that be? In not one or two page. I think more likely maybe six, some time more than 10 or 20 pages. So when you send this documentation as attachment, how long do you think it would take to download or upload your information? Contracting officer they don't really like the lengthy document. They don't have time. They don't want to waste their time. So that's why you have to make their job easier to read your cap statement in a very short period of time, but get all information what they need to understand about your business. As I said, capability statement need to remain a two-page, not more than two pages. I haven't seen anybody doing well after sending 10-page company brochure instead of sending one or two-page cap statement. After preparing this one, there is two way what you can do with UN Public Procurement. Obviously, you can go direct. In other word, as we learned last time you can go ungm.org. You can register at the vendor, a basic level or level 1, level 2 so you can find the business opportunity yourself and start writing proposal and then try to win the contract. This approach is what we call direct entry strategy. Instead of having direct entry strategy, you may have indirect approach. In other word, instead of a you going direct to UN Public Procurement, you may have a partner in the particular location or a partner in that contracting agency who already has a contract or already having working relationship with UN agency. For example, if you want to sell a vaccine to UN agency, you happen to know the company already doing business with the WHO for last 10 years. The first is you have a company never done any business with WHO trying to get it in. Which one would you select? Obviously, it is common sense. You select the partner already have existing working relationship. There is a pros and cons of having direct and indirect entry strategy. When you have direct entry strategy, obviously you have your own control on your management. You can decide how much money you want to get and then you even can select which one and how you want to approach and the project management style and all the other things what you can do, you are in control. So this is a plus factor for you to have direct entry strategy for UN Public Procurement. But if you look at the other way around it, because you are the prime contractor, which means you have to know everything and then you have to assume all legal liability with it together. Because you are the prime contractor, legally you are the party responsible for overall performance of your contract. Anything goes wrong with it, you are solely responsible for that performance. If you have any issue with non-performance, you will be or your company will be subject of any penalty imposed on your company. So there is always risk of entering public procurement market with direct entry strategy. This is not only for UN but apply to all other public procurement agency, whether it is US Federal Government or multilateral development bank like ADB is very much similar. When you go in indirect entry strategy, your benefit of having that one is actually you do not need to spend the money upfront having someone on the ground or having an existing relationship with a contract officer because you already have other prime contractor working with that particular agency and you and your company as several contractor, your role is rather limited. Limited in a way, you either supply prime contractor with the product or services and that's what you do. When you deal with a prime contractor as subcontract, your scope of work are limited in a way that you do not have any legal liability as a prime contractor. The minus factor of having indirect strategy is, you do not have any control on your business. Prime contractor is someone who holds the contract. They may decide to take your business a different way, or they may see you or your company do not benefit from the prime contractor profit margin structure so they may decide not to work with you any further. There is risk involved with that, but you need to keep the good balance, whether you need to work on the direct or indirect strategy better. There's something you have to decide which one is better. But my recommendation initially for any public procurement is, it is always good to work as subcontractor to the prime contractor and then you learn the process first before you bet in the process yourself. I've seen so many times, a company getting very greedy or want to do too many things too quickly. They get a very big contract with the UN in Africa where they have got no local infrastructure whatsoever and then they fail to deliver on time, they fail to maintain their people on the ground. They fail to endorse all the follow-up, the management issue. So once you have an issue with a non-performance with UN agency, and then they somehow ask you leave the contract, that will be permanent taint on your company history and you would not be able to recover from there. One thing you have to remember is, it is very important when you have performance issue with the UN, not to mention any other legal issue, debarment, or all other sanction, but the performance itself, it will have detrimental impact on your future success or your business for any public procurement. When we have a problem with UN public procurement agency, that record may transfer or may be known to other public contracting authorities such as US Federal Government or EU or Multilateral Development Banks. In reality, we see more cases of open sharing knowledge platform whereby all the supplier and contract information with one agency, sharing your information with others. If you have any legal issue with UN, you may have some challenges from working with other public procurement agency in the EU or any other Multilateral Development Banks. So you have to be very careful. After you have decided what you want to do, either direct or indirect, let's say you are prime contract, there are a couple of things that you have to prepare. So there are four elements of the preparing format of participating business. The first thing is basically EOI (Expression of Interest). This is equivalent to request for information of US federal government basically applied for methodology of the conducting market research. When they want to buy something that they never done it. They want to develop a new program or product category. They may come out with EOI, Expression of Interest. It's very crucial to participate in the Expression of Interest. So EOI, as the name suggests, is basically procurement agency, use EOI to get information. In turn, this will help decide the next step as a contract and authority before they issue main contract. So EOI is another final stage, but instead it is a very much the beginning of the process. If you're not participating in the beginning of the process, you may be eliminated from the very beginning and in comparison with other competitors, already have that foot in the step to communicating with the contracting authority. My recommendation has always been to participate in any shape or form Expression of Interest for UN or Request for Information procedure for US Federal Government. Procurement agency may use EOI to include the detail of the product or services information. Sometimes they made request the estimate of the prize. The EOI basically, they do not have any obligation to mention the pricing and sometime they don't even have a section to mention the price, but quite often, contracting agency may ask you to give them more product or estimate costs, how much that would cost to buy the product or services, what you mentioning in the EOI. Good thing about the UN Procurement EOI, if you look at ungm.org, you will be surprised how easy it is to participate EOI, because they already have a template. A template, there is always room for you to put it in the detail of your company, your product. It is relatively easy, I will not say such an easy job, but you have to think it through with your advisor or someone done it before, that'll be the prefer option, and then you need to follow all the procedure and guideline. You'll be able to fill in most of the content for expression of interest. Once you done that one, next step is you may come out with RFQ. RFQ is, Request For Quotation. RFQ is best suited for the product and services that are standardize, another word is like off-the-shelf product or commoditized item. Normally, procurement agency want to make supplier quotation comparable before contract negotiations begin. In other word, RFQ is relatively a simple way of preparing a proposal, it is a solicitation still. In other words, the contract officer, they soliciting the price and the product from the supplier. RFQ is basically the simpler format of sending in your product or service information and also a quotation for your item. But you have to include all the elements for technical proposal. For example, you have to put it in like a personal scale or the management team. Then your particular product description or specification or actually service element of detail, of quantity and volume, a description of if there is any like drawing board, you have to briefly attach a drawing of the particular item. Then quality control mechanism, I think you have to mention total quality management issue and delivery term, how long it'll take for you to design and then produce the item to deliver to the designated location. Terms of contract if there are any terms and condition that you want to mention specific term, you have to say normally, UN payment term, as I said earlier in the session 5, is 30 days. But 30 day is after they accept your product in their store or their location or after they confirm the product has no defect. You don't expect the UN to pay you and shove 30-day. But you should allow at least another month so maybe 60 some case in 90 days, you have to allow some buffer to manage your cash flow properly. Another element you have to mention very important issue of your value added service. Why contracting officer should use your company product services in comparison with any other competitor? That is the part of RFQ. RFP, as you know, are additions of procurement solicitations. The normal or the common format of the proposal writing a request. You may heard quite a lot about RFP. RFP has many different function. If you read it, small contract may have like 30, 40 pages, but when amount increase in number of pages for RFP normally are increased as well. If you're talking about a multi-million dollar, you're talking about more than 100, 200 pages. There are different techniques of analyzing assessing RFP, something that you have to do it offline. In the online education, you are very much limited what you can do because we don't have any mechanism to conduct a case study. If you want to learn more about RFP, how to prepare RFP, there are a number of different ways to do it. Then even there is a way to write your matrix of comply with what your customer asking in the requirement, in the RFP, or we call it terms of reference or statement of the work. In your request for proposal, it is very important you have to lay out all the thing what they asked for. One thing, I guess this is the good news, is basically you have to address everything, what they want to know, what they are asking you to combat. I will say good portion of the answer is already in the request for proposal. You have to read evaluation criteria for UN contract evaluation. It's very important because when they issue RFP, there's a section for evaluation mechanism. You should read it very carefully and point-to-point, you got to have a checklist of whether you have these item for example you have to put all your product or services specific data and your price needs to be mentioned. Your performance should measure for example your delivery and how you're going to control your product and services and whether you are going to provide the technical and other training element as part of capacity building and how you're going to actually evaluate the regular basis a customer complain that whether a customer will have a hotline to reach you out when you have a holiday or whatever show. This proposal for RFP is very complicated and must be a complete package from A to Z. It must contain all the information about the company, all the information about the product and services, and also the distinctive feature about your company, your financial resources and your financial capability also should be included as well. Then delivery, if you have anything in there your proposal not comply with original requested proposal you must write in specific manner. Sometime request for proposal may not allow alternative offering. In other word if they ask you to come out with a 10 item, you must comply. If you are lack of one or two item, you may not allow to have alternative offering. You ignore that instruction, you come up with alternative offer for two item, you may be disqualified. But it really depend on contracting officer or request for proposal. You have to read it very carefully what you have to do. This is very much last session of how to prepare the contract proposal for UN public procurement. UN public procurement, as we said earlier, this is something that very attractive because you will get pay on time, even if it's not on spot but you have to wait a 30 or maybe sometimes 60-90 day. But you can go in as direct or indirect strategy to a number of different way you can work with local partner. But the one thing I have to bring your attention when you are bidding anything for the UN out of your own territory, out of your own country, going in that country without having a local partner, it is almost a suicide because there are so many risk factor. There are so many contingency that you cannot control. There is always a desire or a situation to have a local partner to deal with remote area or remote location especially on some requirement for the African country, not always easy to control everything from your home country. There are a number of the Korean company trying to expand to African market for UN public procurement. It's very attractive growing rapidly, but you must have a local partner whether you're prime contractor or you're subcontractor, you can have a different format of partnership but their partnership is very important element of having successful business of the UN. Overall, this would be the end of our public procurement session. I want to summarize overall. First three session we talked about the US Federal market and the state public procurement. Most of the information that we use in this open learning is from public information sources. It can easily find for SBA or GSEA contract information and the last two sessions we spend the time for UN public procurement. UN public procurement especially for those ancient country except India, as a second largest supplier to UN, most other Asian countries including Korea or Japan or China, we are not doing very well. If you are from Asian country, please you look at what we learn here and according to [inaudible] If you spend the time and searching through all the information package and all the older statistic, UN procurement you may feel comfortable going in but don't go alone always with partner. I hope this e-learning platform gives you some idea about the global public procurement which is very different from commercial activity, but there is a very attractive business to be made. I hope you learned the basic principle from this e-learning platform, give you another opportunity to practice more and learn more about other mechanism of doing a public procurement business. If you have any question, please write to underline addressed to KAIST Business School, our center for global public procurement or KAIST IGMP management course, we may be able to provide you more information how to develop public procurement business for US federal government or UN public procurement. Having said that I want to say a thank you and hope you have a successful business and happier life. Thank you very much.
