Module 8: The Source Selection Process

Procurement Manual

Page 22 of 31

|


		Risk Management as Part of the Evaluation

There are a variety of risks faced during every phase of a procurement activity, with certain risks being of greater importance, depending upon the goods or services being procured as well as the stage of the procurement. Understanding risk during the evaluation phase of the procurement process will assist in risk assessment. It is the responsibility of the Procurement Officer/Assistant to develop practical management and operational measures to mitigate those risks.

Sources of Risks
Risks to successful procurement can come from several sources, such as:


			External factors (political, economic)

			Project complexity

			Project planning

INCOTERMS facilitate the allocation of risks of damage to or loss of goods by clearly defining

the point at which the risk passes from the vendor to the UN. Each Procurement Staff should be fully familiar with these terms; in particular "FCA" and "DDU", as these are the most commonly used terms in UN Contracts.

There are two stages of assessing and dealing with risk:

Stage 1:		Risk Analysis

Stage 2:		Risk Management

When evaluating a Submission, Procurement Officers/Assistant should identify and analyze all risk factors that are likely to occur in regard to the requirement and then decide on the most appropriate management response for each risk. Responses may include:

	a.		ignoring risk

	b.		reducing risk

	c.		transferring risk

	d.		managing risk

Click the Online PM for more information on the risk management process during the evaluation phase.

Risk Evaluation

Page 22 of 31

|