ADMINISTRATIVE AND BUDGETARY COMMITTEE BEGINS FIRST PART OF RESUMED FIFTY-THIRD SESSION
Press Release
GA/AB/3283
ADMINISTRATIVE AND BUDGETARY COMMITTEE BEGINS FIRST PART OF RESUMED FIFTY-THIRD SESSION
19990308 Committee Discusses Programme of Work; Takes Up Review of Organization's Administrative and Financial EfficiencyUndiplomatic and impolite remarks made by one delegation and printed in the media about some developing countries did not foster a productive environment or yield positive results, the Fifth Committee (Administrative and Budgetary) was told this morning as it began the first part of its resumed fifty-third session of the General Assembly.
Guyana's representative, speaking for the "Group of 77" developing countries and China, expressed concern about some Member States' tendency to blame the Group for a lack of progress. All Member States were responsible for the Committee's work. He urged that a cooperative, positive and respectful attitude be maintained.
As the Committee took up its review of the United Nations administrative and financial efficiency, the Under-Secretary-General for Internal Oversight Services, Karl Paschke, introduced two reports of the Office of Internal Oversight Services. He noted that the Offices' review of procurement by the United Nations High Commissioner for Refugees (UNHCR) in the former Yugoslavia had found that losses due to Belgrade prohibiting distribution of Lysol could not have been foreseen and had been addressed appropriately.
A second report, on five procurement-related arbitration cases, found that substantial interest, legal and staff costs had been incurred, he said. Stressing that arbitration should be avoided where possible, the Oversight Office had formulated a number of recommendations, including that peacekeeping should missions should be staffed with qualified personnel, and that completed arbitration cases should be reviewed to identify lessons learned.
The Assistant Secretary-General for Central Support Services, Toshiyuki Niwa, introduced the new Director of Procurement Services, Andrew Toh, and spoke about procurement reform. The Secretariat had addressed
Fifth Committee - 1a - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
the systemic issues and was now striving to ensure compliance with changes that had been introduced, he said.
Also this morning, the Committee discussed its proposed programme of work for the session, which will be from 8 to 26 March. The Bureau is to submit a revised programme of work in light of delegations' comments. In addition, questions were raised regarding the United Nations Security Services and the Committee Chairman, Movses Abelian (Armenia), announced that Vice- Chairman Sharon Brennen-Haylock (Bahamas) would not be able to attend the session due to her responsibilities in her Ministry of Foreign Affairs.
The representatives of Germany, for the European Union, Japan, Cuba, Uganda, Mexico, India and Costa Rica spoke this morning, as did the Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), C.S.M. Mselle, and the Fifth Committee's Secretary, Joseph Acakpo-Satchivi.
The Committee will meet again at 10 a.m. tomorrow, 9 March, to continue its review of the Organization's administrative and financial functioning.
Committee Work Programme
The Fifth Committee (Administrative and Budgetary) met this morning to begin the first part of the resumed fifty-third session of the General Assembly. During this session, scheduled to last from 8 to 26 March, the Committee plans to discuss a number of issues left outstanding during the main session.
According to the Committee's proposed programme of work, it will cover the following agenda items: financial reports and reports of the Board of Auditors; review of the United Nations efficiency; programme budget for 1998-1999; programme planning; improving the Organization's financial situation; pattern of conferences; scale of assessment used to share out the United Nations expenses; human resources management; the common system; financing of the United Nations missions in Haiti; administrative and budgetary aspects of peacekeeping operations; Office of Internal Oversight Services; and the Joint Inspection Unit.
At this first meeting, it was to take up its organization of work and begin discussing procurement reform, under the agenda item review of the United Nations administrative and financial efficiency.
Review of Efficiency
The Committee had before it a series of reports on procurement reform, many of which were introduced during the main part of the Assembly's fifty- third session.
According to the report of the Joint Inspection Unit (JIU) on outsourcing (document A/52/338), outsourcing means contracting with a third party to perform specific tasks, and/or provide services and related goods, based on specified terms and conditions. Outsourcing does not include the simple procurement of goods, or the replacement or supplementation for general purposes of staff by non-regular staff (short-term, temporary, free-lance staff).
In the report, the Unit recommends measures to protect the international character of the United Nations and its staff. For example, the Administrative Committee on Coordination (ACC) should develop a system-wide definition of outsourcing; there should be increased sharing among the United Nations system bodies of outsourcing; and possibilities for joint and coordinated actions should be explored to gain advantages of economies of scale and increased bargaining power.
A note from the Secretary-General transmits the response of the ACC to the above report (document A/52/338/Add.1). The ACC says the JIU data is
Fifth Committee - 3 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
inconsistent and outdated and should therefore not be used to make comparisons between organizations or draw conclusions about their use of outsourcing.
Exchange of information and coordination on outsourcing are already taking place via the ACC machinery, and ACC organizations will continue to share related experiences, the report states. At the same time, differences between organizations' mandates, operational environments and business practices dictate different approaches to outsourcing. Each organization must develop policies appropriate to its own circumstances. Particular attention should be paid to the need to ensure in-house "core" competencies and the ability to manage and control outsourced activities. Due attention should also be given to the issues of any negative impacts on staff and to the need to respect the international character of United Nations system organizations.
A note by the Secretary-General transmits a report of the Office of Internal Oversight Services on its review of the procurement of Lysol brand disinfectant by the Office of the United Nations High Commissioner for Refugees (UNHCR) for activities in the Federal Republic of Yugoslavia and eastern Bosnia in 1993 (document A/52/887). The Assembly had requested the review in its fifty-first session, after reading a report of the Board of Auditors (for the period ending 31 December 1995) which estimated that UNHCR procurement had resulted in losses of just over $3 million, attributed to inaccurate needs assessment and deficient procurement planning.
According to the Oversight Office's report, the authorities in Belgrade refused to clear Lysol for importation and distribution, despite the fact that the need for disinfectant in the former Yugoslavia was becoming a serious problem. The shortage of disinfectants resulted from the lack of petroleum-based commodities in the country, as the international sanctions imposed by the Security Council barred the importation of such products. However, due to lack of clearance, the UNHCR was obliged to re-export over 90 per cent of the quantities procured.
The review determined that the losses totalled approximately $2.1 million and that the just over $3 million in losses originally estimated by the UNHCR did not take into account the quantities of Lysol actually utilized and re-exported for use in other UNHCR programmes. The Oversight Office looked into the question of accountability and found no proof that the UNHCR staff had acted negligently, either during the procurement process or in its aftermath when solutions were being sought to minimize the potential loss.
The Office concluded that the UNHCR had been faced with a situation that could not be anticipated and that was outside its control, the report states. There had been no evidence to indicate that Lysol was or is a banned product in the Federal Republic of Yugoslavia or in other countries.
Fifth Committee - 4 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
In his report on procurement reform (document A/C.5/52/46), the Secretary-General says that the concept of exigency is relative, describing an operational or support requirement that is of such immediate need that it cannot await consummation of the full procurement cycle as prescribed under the United Nations financial regulations, rules, procedures and practices. The only definition of exigency in the current procurement procedures is made in the context of financial rule 110.19, which allows for the waiver of competitive bidding when a requirement, such as requests for invitations to bid or requests for proposals, is deemed incompatible with the exigency of the service.
That definition reduces the procurement lead time with respect to the first aspect of the procurement cycle, the report states. However, the dynamics of field procurement are characterized by a set of urgent requirements representing a significant portion of mission requirements, which in most cases can withstand the delay of a bidding exercise, but which cannot withstand the multi-layered process of reviews and recommendations necessary for award approval, namely, the second aspect of the procurement process. Delays in the review and approval processes are major contributors to ex post facto cases. In the report, the Secretary-General proposes a definition of exigency, which is then superseded by his next report.
The Fifth Committee also had before it a later report of the Secretary-General on procurement reform (document A/53/271 and Corr.1), in which he responds paragraph by paragraph to General Assembly resolution 52/226, detailing developments and accomplishments in procurement reform, while noting that this reform is an ongoing process requiring constant attention. A revised Procurement Manual was published in March and the rules for procurement have been amended. A comprehensive review of all rules and regulations is in process with an outcome expected at this General Assembly session. In 1997, $6.2 million was spent to procure $328 million of goods and services.
Ninety-one countries are represented on the supplier roster, the Secretary-General reports. Efforts are underway to increase that number. To a request to investigate establishing criteria that would weight awarding of contracts in favour of vendors from States current in their payment of assessed contributions, he reports that no other United Nations organization does this.
The Committee also has before it an addendum to this report (document A/53/271/Add.1). The addendum includes tables on actions taken on procurement reform, ongoing matters under consideration, and the implementation of the recommendations of the High-level Group of Experts on Procurement.
On increasing procurement from developing countries, the Secretary-General reports, some United Nations organizations apply special
Fifth Committee - 5 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
measures to suppliers from developing countries, such as inclusion on short lists or only permitting local or regional sourcing for certain purchases, but none apply a percentage-based margin of preference. Measures that have been employed, such as advertising, outreach and training, have also been used by the United Nations, and the Secretary-General finds the results encouraging.
Monitoring has also improved, he reports. The Procurement Division accounted for 11 per cent of the system's procurement, and in 1997, nine per cent of this was from developing countries, up from 0.07 per cent in 1996. The Field Administration and Logistics Division of the Peacekeeping Department procured 25 per cent of its goods and services from developing countries, up from 0.02 per cent in 1996.
The Secretary-General reports that the Secretariat is interested in adopting the harmonized financial regulations for procurement developed by the Task Force on Common Services' Working Group on Procurement and adopted by the Executive Boards of the United Nations Development Programme (UNDP) and the United Nations Population Fund (UNFPA). A common approach is also manifest in the development of the United Nations Common Supplier Database -- a joint effort of 12 organizations, including the United Nations itself -- which pools the supplier rosters of all participating organizations and will eventually permit shared supplier performance evaluations.
In its related report (document A/53/692), the Advisory Committee on Administrative and Budgetary Questions (ACABQ) repeats that the practice of using suppliers recommended by requisitioners is unacceptable, and, if a properly functioning comprehensive vendor roster existed, there would be no need for exceptions. Steps should be taken to ensure specifications are not tailored to predetermine the choice of supplier. Regarding procurement from developing countries, the ACABQ notes that no data is provided relating to economies in transition. Information provided in support of claims of improvements in procurement from developing countries is misleading, as the data is based on country of procurement or country of head office, not origin of goods, and amounts are those on the contract, not actual expenditures. The Secretary-General should indicate the basis for determining the country of origin, and whether this conforms to recognized practice.
The ACABQ reports that the trade fairs attended by staff to promote diverse procurement were not held in developing countries. Exigency provisions on procurement may circumvent the need for a competitive bidding process, but do not rule out the need for Committee on Contracts' approval.
The ACABQ does not recommend upwards reclassification of the post of Chief of Procurement Division, given the decrease in procurement activities, increased procurement delegation of authority and the fact that the Procurement Division is only responsible for 11 per cent of United Nations system procurement, according to the text. It expects the Secretary-General
Fifth Committee - 6 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
to report on the effect of the dramatic decline in procurement in the 2000-2001 proposed programme budget and his report on the Support Account. Given that the Secretariat continues to express frustration at the rigidity of the procurement rules and regulation, and that the matter has been pending for years, proposals for requisite changes should be made without further delay.
The Fifth Committee also had before it the Secretary-General's report on the findings on alleged insufficient use of expertise in procurement planning in eight peacekeeping missions by the Oversight Office (document A/52/1010). The inquiry was undertaken after the Board of Auditors found that funds had been spent on services not rendered by aviation vendors in several peacekeeping missions during the 1994-1995 biennium.
At a time of unprecedented expansion in peacekeeping operations, sufficient experience in managing commercial aviation procurement was not available within the United Nations, the report states. This created difficulties for an "under-resourced and inexperienced" Secretariat, and the resources necessary to recruit sufficient experienced staff for field missions and the United Nations Headquarters were not provided in a timely manner during the expansion of the peacekeeping activities.
Significant corrective actions had been implemented since 1994 by the responsible departments, the report states. The Secretary-General recommends that an aviation oversight committee be formed at Headquarters to meet semi-annually to review United Nations aviation activity and the Department of Peacekeeping Operations should review aviation planning processes on an ongoing basis. The Oversight Office should review aviation operations in peacekeeping missions to ensure compliance with United Nations rules, policies and practice.
The Committee also had before it the Secretary-General's report on outsourcing practices (document A/53/818). The report sets forth the basic policy and guidelines to be followed in considering the use of outsourcing, and covers contractual arrangements under which outside suppliers are responsible for providing non-core activities or services which have been or could be provided by United Nations staff. The report states that the Secretary-General of the United Nations is now committed to viewing outsourcing as one option among many that programme managers should consider in seeking to provide or upgrade the quality or cost-effectiveness of non-core activities and services.
According to the policy section of the report, the four basic reasons for outsourcing are to acquire technical skills not readily available internally, to achieve cost-savings, to provide a source more effectively, efficiently or expeditiously and to provide an activity or service not needed on a long-term basis. The policy has five key features: it is limited to non-core support activities or services; it provides criteria for determining
Fifth Committee - 7 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
when to consider outsourcing; it mandates a rigorous pre-bid process before making outsourcing decisions; it calls for strengthening the procurement process for outsourced goods or services; and it requires rigorous contract administration.
The guidelines set out in the report aim to ensure a transparent unbiased procedure, thereby reducing the risks and maximizing the benefits of outsourcing. They set out mechanisms for defining the service, establishing preliminary cost estimates, identifying a vendor list, assessing quality and risk criteria and for the bid process, the contract administration phase and the evaluation phase.
A note by the Secretary-General transmits a report of the Oversight Office on its review of procurement-related arbitration cases (document A/53/843). The Office reviewed five procurement cases involving total claims of approximately $52.6 million. All were subject to arbitration or negotiated settlement between 1995 and 1997 and were related to peacekeeping operations in the early 1990s, a period marked by a dramatic surge in peacekeeping activities. Of the claims, a total of $23 million was awarded by arbitration tribunals, and $3.75 million was paid in settlements to contractors.
Interest of about $4.8 million, as well as legal and arbitration costs of some $2.3 million and staff costs related to those disputes, were incurred, the report states. Arbitration is a costly and unpredictable method of dispute resolution, and should be prevented wherever possible through improved contract preparation and administration.
The audit showed that during the period between 1992 and 1995, the Organization did not have the necessary human resources and expertise to provide sufficient logistical and administrative support to peacekeeping missions. As a result, contracts were often administered by individuals from military contingents who did not have the necessary training and experience. Consultation among Headquarters units and mission personnel was inadequate; field procurement personnel sometimes did not comply with procurement rules and procedures; and contract terms were not always clear and were sometimes changed without consultation by the Headquarters Committee on Contracts or the Office of Legal Affairs. Other findings were that undisputed charges were not paid in a timely manner, resulting in substantial interest costs; and vendor performance and performance problems were not always documented.
The Oversight Office's recommendations include that: missions be staffed with experienced procurement and contract administration personnel and legal advisers; and the Field Administration and Logistics Division, with the Procurement Division, issue clear guidelines to procurement and contract personnel on documenting deviations from contractual terms. The Procurement Division should refer major non-standard contracts to the Office of Legal Affairs for review to avoid unclear formulations. The Field Administration
Fifth Committee - 8 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
and Logistics Division and the Procurement Division should refrain from disclosing to contractors the financial resources available for contracts and ensure that payments are based on duly certified invoices in accordance with all contractual terms. Peacekeeping missions and the Procurement Division, in cooperation with the Field Administration and Logistics Division, should document unsatisfactory vendor performance and use these in procurement decision-making.
The General Legal Division, the Procurement Division and the Field Administration and Logistics Division commented on a draft of the report, and generally agreed with its recommendations. The Office of Legal Affairs had explored the possibility of rotating its attorneys to the field and bringing mission legal advisers to the Office for limited periods, an initiative which the Oversight Office supports. The Department of Management feels that the implications of not providing contractors with the financial limits should be reviewed to determine the measure's practicality. While the Department of Peacekeeping Operations noted that achievement of the recommendations would require provision of adequate resources to develop the automated systems and staff capabilities required, the Oversight Office maintains that some recommendations can be implemented within the Organization's existing resources.
Statements
The Secretary of the Committee, JOSEPH ACAKPO-SATCHIVI, provided the Committee with an update on the status of the Committee's documentation. He advised the Committee that all documents for the first part of the resumed session were now issued.
GARFIELD BARNWELL (Guyana), speaking on behalf of the "Group of 77" developing countries and China, said that the Group was concerned about the growing tendency of some Member States to blame the Group for the lack of progress in the Committee's work. On an item about which unwarranted accusations against it had been made, the Group had, in fact, made the only proposal. As responsibility for the work of the Committee was shared among all Member States, it was desirable to maintain a cooperative, positive and respectful attitude to each other. The Group noted, with deep concern, undiplomatic and impolite remarks made in the media by a delegation about some developing countries, and recalled that similar remarks had been made before, in August 1998. This kind of attitude was unacceptable and in no way contributed to an environment conducive to achieving positive results.
The Group thanked the Secretariat for the timely submission of the documents on the work programme, he said. The proposed programme could accommodate all substantive issues not concluded in the last session. The chronic problem of late submission of documents, at the same time, needed to be highlighted to ensure that the Secretariat abided by the six-week rule.
Fifth Committee - 9 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
A number of reports had not been not submitted in accord with other General Assembly resolutions on format, he said. The Group sought clarification from the Secretariat on non-compliance with the mandates on the format of work.
He said sufficient time should be given to human resources in this resumed session. Other issues for which sufficient time should be allowed were procurement reform and budget-related issues including the Development Account, Gratis Personnel, scale of assessments and the review of General Assembly resolution 48/218B on programme planning. The items should be concluded in this session. The Group also suggested that meetings should not be fragmented with too many items discussed at a meeting.
The Group proposed the Committee begin consideration of procurement reform only after it had received the comments of the Advisory Committee on Administrative and Budgetary Questions (ACABQ). To this end, it hoped the ACABQ would provide its recommendations to enable the item to be concluded this session. The time proposed for the thematic reports of the Joint Inspection Unit (JIU) and the Office of Internal Oversight Services could be spent on the items mentioned previously, as agreement on the thematic reports would be easier to find once agreement on the other issues had been reached. In addition, if no delegation had expressed the desire to raise particular issues on the Auditors' reports, then perhaps that time could be used for other issues.
KLAUS-DIETER STEIN (Germany, speaking on behalf of the European Union, said the statistics on utilization of conference services by the Fifth Committee, which had just been distributed, showed that the Committee was using its time more efficiently. Its level of success, however, was another question. The programme of work devoted time to areas that were not priorities. An agenda item should only be opened and started if there was a realistic chance of a meaningful result.
In the Union's view, certain items should be addressed during the session, he said. Those were: scale of assessments; budgetary requirements for the United Nations operations in Haiti; the sub-item of the Integrated Management Information System; and human resources management -- the most important item. Under review of efficiency, both procurement reform and outsourcing were important, but they could be considered separately, and the debate on outsourcing should start only after the comments of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) were available. Under the regular budget, the Development Account -- its concept and use -- was an important matter that should be resolved during the resumed session. The report of the Oversight Office was important and should be resolved sooner rather than later.
Fifth Committee - 10 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
Under pattern of conferences, there were three issues, he continued. The Joint Inspection Unit (JIU) report on publications should be dealt with only if time permitted. The two reports on conference services in Nairobi and services for regional groups were written versions of earlier reports. It should not take long to adopt the reports, should time permit. The report on economy measures should go to the Committee on Conferences before the Fifth Committee considered it. For the Oversight Office and the Development Account, coordinators should first strive to determine, informally, whether there was agreement, and the meetings should be scheduled accordingly.
KAZUO WATANABE (Japan) stressed that since the Committee's time was limited, there was need to be organized and to focus on urgent items. In Japan's view, the priority items were: human resources management; budget items, including the Development Account; peacekeeping operation budgets; scale of assessments, especially regarding the application of Article 19 of the United Nations Charter. He supported the Union's proposal regarding the work of the Oversight Office and the Development Account. Coordinators must first make an effort to ensure that some agreement could be reached among the Committee members.
MOVSES ABELIAN (Armenia), Fifth Committee Chairman, suggested that the Committee follow the programme of work for the first three days of its resumed session. On the basis of comments made this morning, the Bureau would review and revise the work programme and submit it for approval.
DULCE BUERGO-RODRIGUEZ (Cuba) said that it sought information on document A/C.5/53/CR.31, a report on programme planning on which, as far as she was aware, no comment had been made. What was the status of that document? Had it been issued? It had not been ready on Friday. Perhaps there was no time to consider it at this session, but her delegation needed to know its status to allow for planning regarding its consideration prior to the end of the fifty-third session. In addition, her delegation wished to receive additional information on the 1998-1999 revised budget report. The relevant General Assembly resolutions on that matter should be followed up. It would be appropriate to find some time during this session for the Secretariat to report on some of the specific issues dealt with in that report. Such a report might help keep Member States up-to-date on the budget.
The CHAIRMAN advised the Committee that all documents had been issued and would be available when the item was discussed.
Mr. STEIN (Germany) said he had no problem with the Chairman's proposal to continue with the programme of work as presented for three days, but that his understanding of both the European Union's and the Group of 77's position was that the outsourcing report would only be discussed after the ACABQ response to it.
Fifth Committee - 11 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
The CHAIRMAN advised that this was correct; therefore, the Committee would take up procurement, but not the outsourcing issue within that item.
NESTOR ODAGA-JALOMAYO (Uganda), said he wished to comment on an issue of continuing concern to Uganda. It had been stated that certain items should only be opened for discussion after the Coordinators were confident that agreement could be reached on them. He stressed that backroom discussion was not the right way to deal with issues in the Committee.
The Committee should also be cognizant that certain items had to be concluded in this session, he said. He hoped those items could be completed this session, as Uganda would be reluctant to join a consensus on their deferral to another Assembly session.
The CHAIRMAN said a new programme would be presented by the Bureau taking all issues into consideration.
Mr. STEIN (Germany) said he had not proposed to have consultations behind the backs of other delegations. He had meant to say that during informal consultations of the agenda times, the first effort should be to ascertain whether there was chance for agreement. The Bureau should not allocate sessions to those items before knowing whether such agreement was possible.
C.S.M. MSELLE, Chairman of the ACABQ, said the Chairman of the Group of 77 and China and the President of the European Union had indicated their desire for the ACABQ to review document A/53/818 on outsourcing, and submit recommendations before the Committee finalized its work on the report.
The ACABQ was currently engaged in reviewing peacekeeping operations and the Support Account, he said. The ACABQ could take up the outsourcing report towards the end of March and submit its recommendations to the Fifth Committee in May, even though he had originally thought the ACABQ should handle the document in the context of the budget for 2000-2001.
The CHAIRMAN then announced that the Committee's Vice-President, Sharon Brennen-Haylock of the Bahamas would not be able to attend the current session because of her new responsibilities in her country's Ministry of Foreign Affairs.
He then drew attention to a chart indicating the Committee's utilization of conference services during the fiftieth, fifty-first, fifty-second, and fifty-third sessions of the General Assembly. [The chart indicates the number and duration of meetings, the hours of overtime, the numbers of late starts and early endings, and, finally, the time un-utilized and resulting costs. Regarding the latter, the statistics are as follows: fiftieth session:
Fifth Committee - 12 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
33.2 hours ($142,442); fifty-first: 14.35 hours ($61,654); fifty-second: 21.55 hours ($93,545); fifty-third: 7.3 hours ($31,890).]
Review of Efficiency
KARL PASCHKE, Under-Secretary-General for Internal Oversight Services introduced the Oversight Office's report on its review of procurement of 1.5 million litres of Lysol at a cost of $2.3 million by the United Nations High Commissioner for Refugees (UNHCR) for distribution in the former Yugoslavia. The case had first been reported by the Board of Auditors for the period ending 31 December 1995.
The procurement had been made in response to needs identified by the World Health Organization (WHO) and other parties, he said. While distribution had begun upon delivery of the Lysol, the authorities in Belgrade had not granted clearance for its importation and distribution, so most of the amounts procured had had to be re-exported. The total losses came to about $2.1 million.
The Oversight Office had looked into the question of accountability and had found no evidence to indicate that any UNHCR staff had acted negligently, either during the procurement process or after, he continued. The problem could not have been anticipated, and efforts had been taken to address it once it had become evident.
He then introduced his Office's report on the review of procurement- related arbitration cases. He expressed his regret for the delay in submitting the report. The review had required the Office to deal with a variety of complex issues and to scrutinize large amounts of information. Steps would be taken to avoid such delays in the future.
All United Nations contracts contained a standard clause that contract disputes would be referred to arbitration in accord with General Assembly endorsed rules, he said. Between 1995 and September 1998, legal action had been initiated against the Organization in twelve procurement cases, all relating to peacekeeping operations. The review concentrated on five of those cases which had been resolved. The review found that the Organization often did not have the necessary resources, including procurement personnel, to provide sufficient support to peacekeeping missions on procurement and contract administration. There was also inadequate consultation between Headquarters and mission personnel, failure to comply with rules and procedures, failure in paying undisputed matters in a timely manner and, sometimes, a lack of clear contract terms. Those elements contributed to disputes.
While arbitration and settlement awards were a relatively small part of overall procurement costs, substantial interest, legal and staff costs were
Fifth Committee - 13 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
incurred, he said. Arbitration should be avoided where possible, and the report included recommendations aimed at preventing conflicts. Those recommendations called for ensuring that peacekeeping missions were staffed with qualified personnel, issuing clear guidelines on documentation and deviations from contracts, paying undisputed amounts promptly to avoid interest claims and evaluating and documenting unsatisfactory vendor performance. The report also recommended a review of completed arbitration and settlement cases to identify lessons learned.
He pointed out that contractors and specific contract designations were not mentioned in the report because, under the arbitration rules, such information could not be disclosed publicly without both parties' consent.
TOSHIYUKI NIWA, Assistant Secretary-General for Central Support Services, introduced the newly appointed Director of Procurement Services, Andrew Toh. He said the Secretariat had addressed the systemic issues of reform and was now striving to ensure compliance with the changes that had been introduced. The new structure remained commodity-based, but was refined to better respond to requisitioners. Since April 1998, the procurement of medicines, medical and surgical supplies and professional services were no longer accorded an exception to competitive bidding.
On the definition of exigency, he said the Office of Legal Affairs was being consulted regarding the concerns raised by the ACABQ. Only three such cases had been approved in 1998, and a proposal was being considered whereby each exigency case would require the head of the Department concerned to sign off on the request.
He then turned to questions raised on behalf of the Rio Group by the representative of Panama at an earlier meeting. Many of those pertained to compliance, he said. He offered personal assurances that every effort was being made to ensure that regulations, rules and procedures were being observed, and that opportunities would continually increase. Regarding the manner in which the United Nations handled food rations for peacekeeping missions, he said the Organization was not in a position to put together food baskets itself, although he was prepared to discuss how it could improve its current method on a bilateral basis.
The European Union had identified areas of performance measures that required more work, he recalled. A consultant had been engaged to assist in developing performance measures. He had noted the request for public opening of prices for requests for proposals. It was currently the United Nations practice -- system-wide -- not to do so, since price was not determinative for an award of contract under requests for proposals; therefore, disclosure of pricing information would be misleading. Further information would be provided during informal consultations.
Fifth Committee - 14 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
As for the representative of Syria's concerns that the vendor roster needed to be expanded to increase representation of suppliers from developing countries, he said the Secretariat was participating in the United Nations Common Supplier Database. The Database provided access to rostered companies from the funds and programmes which had greater representation from developing countries. He hoped that would lead to increased awareness and use of such suppliers.
ERNESTO HERRERA (Mexico) said, in response to Mr. Niwa's statement, that a number of very specific questions had been asked by the representative of Panama on behalf of the Rio Group when the matter had been discussed previously. None of those questions had been answered. During the informal consultations, he would work to ensure that the Group's questions were answered.
RAJAT SAHA (India) reserved his substantive comments for a later date when the comments of the ACABQ had been received. He said, however, that he had been advised that no current information on procurement had been available on the United Nations Web Page since August 1998. He asked for an explanation.
Mr. NIWA said he had detailed responses to the specific questions raised by the Rio Group, and would provide them in the informal consultations. On the Web Page, he said there had been a glitch, but it had been fixed and the information should be available now.
Other Matters
NAZARETH INCERA (Costa Rica) said that at the Committee's previous session, she had asked the Secretariat a number of questions, and she had not received any answers. One question sought information on the company responsible for the escalators. The escalator situation had not improved. Another related to the United Nations Security Service. Additionally, she wanted to know the reasons for the lack of security officers on the second floor.
She also wanted to know why the number of security guards assigned to protect the President of the General Assembly had been reduced from two to one. She could not agree to there being less security provided for the President of the Assembly than in the past, nor that his personnel security guard could do the same thing as the guard previously supplied by the United Nations. Those were entirely different functions, and the reduction was unacceptable. She would accept no excuses on the matter. The President was from Costa Rica's region. If he were from a different region, that would not have occurred. While the General Assembly President was in New York, he should have both security officers as in the past.
Fifth Committee - 15 - Press Release GA/AB/3283 46th Meeting (AM) 8 March 1999
The reduction could not be due to a lack of resources, she said. She referred again to the information she had requested about the security dog. She understood the dog cost about $150,000 per year, and that it was here from nine to five. How could there be a lack of resources, when that much was spent on a dog? She would like answers to the questions about the dog. Who had been given the contract? Was there bidding and, if not, why not? Once answers were provided to the questions, she would make additional comments.
She said that once again she must, unfortunately, point out that the conduct of United Nations security officers left a great deal to be desired. Last Thursday, the Permanent Representative of Costa Rica had been denied access to the Trusteeship Council Chamber because an officer had said there were too many people inside. The United Nations belonged to its Member States, and they should receive precedence over people from outside. That indicated once again that at least the new security officers must be trained on how they should treat Permanent Representatives.
Ms. BUERGO-RODRIGUEZ (Cuba) said that the representative of Costa Rica had drawn attention to an important question on difficulties regarding services provided by the Security Service. She had herself made a request at the beginning of the session on the need to review the implementation of the budget for the biennium under review. The issues raised by Costa Rica were relevant to that. General Assembly resolution 52/220 recognised the importance of security at the United Nations and requested the Secretary- General to continue considering the level of resources given to this function.
Additionally, she noted that, according to the staffing table, there was no difference or reduction in staff compared to previous years. The matter of the allocation of staff to the Security Services deserved the special attention of the Committee.
* *** *