|
INVESTING IN THE UNITED NATIONS
For a Stronger Organization Worldwide
Report of the
Secretary-General
IV. Investing in new ways of
delivering services
A. New sourcing options
Context and challenges
57. Recent advances in technology and
management practices have enabled many public and
private sector institutions to adopt entirely new
ways of getting services. These have allowed
employers to focus their resources on their core
mission, improve their performance in achieving
mandates and allocate resources optimally.
Increasingly common practices include moving
certain administrative functions to other
locations (relocating or offshoring); contracting
out to external providers a range of services
previously performed internally (outsourcing);
allowing some categories of staff to work from
home (telecommuting); and making more effective
use of facilities already established around the
world.
58. Yet at the United Nations, progress in
exploring these options has been piecemeal and
slow. Most administrative and support services are
performed inhouse, often in high-cost locations,
such as New York or Geneva. The overall United
Nations mindset has been one that discourages even
exploring the options that exist. As a global
organization, there is no reason why we should not
carry out our business globally. However, in its
resolution 55/232 of 23 December 2000, the General
Assembly established a number of conditions for
outsourcing that severely restrict the
circumstances under which it can be contemplated.
No comprehensive feasibility study or cost-benefit
assessment has even been conducted of the
possibility of relocating major services.
Vision
59. My vision is of a United Nations which has
achieved gains on several fronts by introducing
new practices, such as relocating activities to
new work stations. By so doing, it will disperse
the economic and employment benefits of those
activities more equitably among its Member States,
while at the same time making it more effective
and efficient. In particular, it will redistribute
some of the very large share of those benefits
that currently flows to the richest Member State
of the United Nations because it hosts a large
United Nations presence. Redistributing and
relocating the Headquarters workload to other
parts of the world will benefit more countries and
economies; allow the United Nations to widen and
deepen the skills pool from which it recruits; and
enable it to reduce the overall costs of its
operations.
60. Relocating offers an unusually precise tool
to fulfil Article 101 of the Charter of the United
Nations: "The paramount consideration in the
employment of the staff and in the determination
of the conditions of service shall be the
necessity of securing the highest standards of
efficiency, competence, and integrity. Due regard
shall be paid to the importance of recruiting the
staff on as wide a geographical basis as possible"
61. The United Nations family has only just
started experimenting with this practice, but
examples are encouraging. The World Bank relocated
some of its accounting functions to Chennai,
India. Aside from dollar savings, relocation has
brought other improvements, as observed by UNDP
following the transfer to Copenhagen of its
benefits, entitlements and payroll functions in
the biennium 2003-2004. Transactions were found to
be 25 per cent more efficient, and UNDP staff
worldwide gave the quality and responsiveness of
the services offered in Copenhagen a satisfaction
mark of 92 out of 100 in 2005. UNDP is now
considering relocating some knowledge and learning
divisions, as well as regional human resource
support units, to regional centres such as
Johannesburg and Bangkok.
62. In the Secretariat, the Department of
General Assembly Affairs and Conference
Management, for instance, recently commissioned an
external study to review options concerning the
document production cycle. Preliminary estimates
suggest that possible savings from relocating the
full range of document production services could
approach 25 per cent of existing personnel and
location costs, representing a net saving in the
range of up to $35 million per annum.
63. Outsourcing - that is, contracting out to
external providers - is an option that should be
considered only for those functions that do not
fall within the core competencies of the United
Nations. Printing functions, which still take
place inhouse, may be a suitable candidate for
outsourcing. Other steps of the document
production cycle, such as translation, may be
candidates for relocation to lower-cost duty
stations - but not necessarily for outsourcing
because of quality control and other issues.
64. Any decision to relocate or outsource a
function depends on a broad range of factors, of
which cost is only one. Reliability of service and
guaranteed standards of quality are of primary
importance. Consultations will need to be
conducted with staff and their representatives,
and then appropriate transitional support will
need to be put in place to help any staff members
whose jobs may ultimately be affected.
Proposals
Proposal 11
I ask the General Assembly to modify its
previous guidance and allow the Secretariat to
consider all options for alternative service
delivery, including identifying the potential
for relocating work to lower-cost duty stations
and for outsourcing.
Proposal 12
I propose to undertake systematic and
detailed cost-benefit analyses of relocation,
outsourcing and telecommuting opportunities for
select administrative services, as follows:
- Translation, editing and documents
production by September 2006.
- Internal printing and publishing processes
by September 2006.
- Medical insurance plan administration by
September 2006.
- Information technology support services by
December 2006.
- Payables, receivables and payroll processes
by March 2007.
- Staff benefits administration by March 2007.
B. Strengthening procurement
Context and challenges
65. One of the most daunting challenges of the
past decade for the United Nations has been the
extraordinary expansion in the scale and scope of
procurement. Driven largely by the huge growth in
peacekeeping - which today accounts for 85 per
cent of all procurement - but also encompassing
growing support to other field operations and
relief initiatives, the value of United Nations
global procurement has increased steadily from
about $400 million in 1997 to over $1.6 billion in
2005. The trend is still heavily upward: in 2006,
it is expected to exceed $2 billion. During the
same period, however, the number of dedicated
procurement staff at Headquarters has in fact
fallen. In peacekeeping missions, there is a 50
per cent vacancy rate for procurement officers in
the field.
66. Inevitably, this has tested the robustness
and effectiveness of both systems and controls -
and both have been found lacking. On the one hand,
it has become clear that our procurement rules and
regulations are too complex and cumbersome for the
kind of quick actions often required in field
missions. To take one glaring example, otherwise
sensible requirements on seeking bids from
multiple vendors can prove a real obstacle to the
effective and timely delivery of critical goods
and services from food to fuel in inaccessible and
isolated places, such as parts of the Sudan or the
Democratic Republic of the Congo. On the other
hand, it has also become clear that some of the
limited steps we have taken to try to deal with
this in recent years, such as providing more
authority for field-based procurement, have not
been accompanied by sufficient support and
controls to prevent mismanagement and possible
abuse. As a result, despite the hard work and
dedication of the vast majority of our staff,
often in extremely complex and difficult
situations in the field, we have too often fallen
short of the high standards that the United
Nations needs to set itself.
Vision
67. While some of the procurement problems
documented in the reports of the Independent
Inquiry Committee into the United Nations
Oil-for-Food Programme have already been
corrected, significant problems remain. A separate
review conducted late in 2005 by external experts
found major weaknesses in culture, management
oversight and controls, including outdated
procurement processes, a failure to align and
support the procurement needs of clients, an
inconsistent execution of processes, a poor
governance structure and lack of sufficient
resources. Equally worrying, a recent audit by the
Office of Internal Oversight Services into
peacekeeping procurement has raised significant
additional concerns with regard to both
mismanagement and possible fraud.
68. Quite apart from correcting systems and
implementing robust internal controls to prevent
potential wrongdoing, there is also significant
potential for the United Nations to purchase goods
and services more cheaply and efficiently if
systems and procedures are properly modernized. To
take one example, although a contractor
performance rating system exists the results are
not yet easily accessible across the United
Nations system, nor have such performance reports
been routinely examined to provide a measure of
the future worthiness of United Nations
contractors. Indeed, from outdated master
contracts to overstretched data systems, an
overworked team lacks the tools it needs to
provide the highest quality procurement services.
And as in other areas of the United Nations,
spending on training - just $20,000 annually for
the 70 staff at United Nations Headquarters - is
also well short of what is needed.
Proposals and actions
69. To respond to these problems, the following
investigations are already under way:
(a) To ensure that the recent audit and
review findings about possible irregularities
are urgently addressed, the Office of Internal
Oversight Services is currently undertaking, on
my instruction, an accelerated review of these
cases and additional allegations of possible
procurement-related wrongdoing by staff.
(b) A more comprehensive, forensic audit is
being carried out by external experts and the
United Nations is, also on my instruction, fully
cooperating with national law enforcement bodies
in their own investigations.
Proposal 13
I propose that these investigations be
concluded quickly and that swift action be taken
against any United Nations staff members found
to have acted inappropriately.
Proposal 14
More broadly, in order to address the
underlying weaknesses that have been identified,
I propose to continue a comprehensive review of
procurement rules, regulations and policies that
is also already under way, focused on six broad
areas:
- Updating procurement procedures to reflect
the new environment and operational requirements
of the United Nations, including the need for
greater transparency and accountability,
through, for example, the establishment of a
more independent bid protest system to ensure
that vendors have recourse if they believe a
procurement process was undertaken unfairly.
- Implementing a risk-management framework,
including diagnostic tools to detect problematic
transactions, more systematic rotation of staff
serving in procurement and the strengthening of
the Headquarters Contracts Committee that
oversees the bidding process. This will ensure
the Committee has the stature, professionalism
and expert capacity it needs to review the
recommendations of the Procurement Service.
- Continuing and improving the training of
procurement staff in both procurement processes
and ethics and integrity; extending personal
financial disclosure requirements to procurement
staff; and paying more attention to staff career
development issues.
- Reprofiling procurement staff requirements,
particularly with a view to attracting
high-quality people willing to serve in the
field and supported by regular training and
routine rotation.
- Increasing information-sharing on
procurement matters within the United Nations
common system with a view to unlocking
significant potential cost and efficiency
savings - estimated at 5 to 20 per cent, or $100
million to $400 million - including through such
steps as more systematic matching between
vendors and destinations where goods and
services are being used, vendor consolidation,
redefinition of specifications and stronger
enforcement of contract compliance.
- Using a lead agency concept to create
specialist buyers for the whole system. For
example, the United Nations might ask the
Inter-Agency Procurement Services Office to
handle all vehicle purchasing, WFP to handle air
transport needs and the United Nations Office
for Project Services to handle consulting and
certain other personnel needs.
Proposal 15
Early elements of the strategy described
above are already being implemented and I
propose to produce by June 2006 a more
comprehensive report, with more detailed
corrective actions, incorporating the
recommendations of the current review and
reflecting the conclusions of the outstanding
investigations and audit.
|
|