UN Procurement
Dominated by Developed World, U.S. Grabs 25% Not Counting Lockheed
Martin, France and Italy
over 10%, Reports Misleading
Byline: Matthew Russell
Lee of Inner City Press at the UN: News Analysis
UNITED NATIONS,
April 21 -- Despite talk of increased diversity in the UN system's
procurement,
developed countries like the United States, France, Switzerland, Italy
and even
Monaco continue to hold most of the systems contracts for the UN's
peacekeeping
operations, an Inner City Press analysis has revealed. Of $2.3 billion
spend on
contracts for all peacekeeping missions in the past two years,
U.S.-based firms
grabbed $541 million or 23% of the business. While this includes for
example a
$90 million contract for Cisco Systems, it does not include
Maryland-based
Lockheed
Martin's $250 million no-bid contract since
it is only for Darfur and not other
missions, nor does it include food
supplies other than a $15 million
joint venture with Esko,
which is located for tax purposes in Monaco, and got 17.18% of the
contracts.
While France got over 11% of the
contracts, including a $115 million contract with Renault, and Italy
over 10%, including
Agmin's $100 million contract for pre-fabricated buildings, China
received less
than two percent, and South Africa less than half of one percent, for
only two
items, barbed wire and UN caps. India-based companies got even less: a
single
$1.5 million contract for sandbags.
The largest contract to a
China-based firm, $34 million in generators from Zhejiang Kangle Group,
is
being contested within the UN, and may be re-awarded to Italy-based
Intertrade
International, which already has a $25 million contract with the UN.
At UN, from right, Cisco, Ban, Dervis and
Google, procurement give-away not shown
The UN General Assembly in 2000
directed the Secretary-General to take steps to diversity contracting
to the
developing world. After some steps were taken in that direction, Inner
City
Press' sources in UN procurement say, the developed world contractors,
and
governments on their behalf, fought back. The UN stood steps that
disfavored
smaller bids, such as requiring pre-bid trips to New York and trips to
Brindisi, Italy, both of which require visas, and requiring the posting
of
bonds, even though the UN pays three to six month after work is
completed. Insiders describe a
confidential report to UN on
its air chartering business by an external consulting find that the
UN's
bidding and awards process is overly complex. But this complexity
favors
sophisticated developed world companies.
To deceive the General Assembly's
interest member states that progress is being made, the Secretariat has
filed a
report on "UN Procurement Activities," A/62/525, which lumps together
the UN Secretariat's purchasing, through its Procurement Division, with
the
purchases of funds, programs and agencies, which are donor-funded and
sometimes
required to go to specific contractors.
Since the Secretariat and the funds and program have
different
procurement systems and vendor lists, there was no basis to lump them
together,
except to create misleading numbers, sources say. Whether in the
upcoming May
session of the General Assembly's Budget Committee these issues will be
addressed remains to be seen.
While Australia receives only 0.73%
of the UN's systems contracts, it was all in one $17 million deal for
radio
equipment, with Barrett Communications.
Austria-based Rosenbauer
International got a $14 million contract for "Rapid Intervention
Vehicles."
Canada's Newcon Optic sold night
vision binoculars; Czech SVOS sold $26 million of armored "VIP
vehicles."
Denmark's DAN Office is well known
for dominating IT business at the UN, as Denmark wins UN
sub-headquarters such
as UNOPS slush-fund fuels move to Copenhagen.
France, which is said to be in line
for a big Darfur contract, including by having the Request for
Proposals
changed at the thirteen hour (click here
for that), had its
Renault selling $115 million in heavy-duty trucks to the UN.
Germany's Fleischhacker GmGH sold
$15 million in medical equipment, while India sold only $1.5 million of
sandbags.
Ireland's MMI Group sold $2 million
of medals -- not metals, but medals.
Israel's Odis sold water plants.
Italy's Agmin sold over $100 million in pre-fabricated buildings.
Japan's biggest contract is with
Nissan, for 4 by 4s which Toyota also sells.
South Africa's big items are UN Caps
and concertina wire. Uganda made the list for a single contract,
Entebbe
(airport) Handling Services, a fraction of Lockheed Martin's PA&E
contract
in the Congo.
The UK's Jankel sold $27 million in armored
VIP vehicles to the UN.
The U.S. makes out best: $93 million
to Motorola, $90 million to Cisco Systems and, understated, the $15
million
joint venture between Monaco-based Esko and Lockheed Martin.
Footnote: on the
UN's no-bid $250 million Darfur infrastructure contract to Lockheed
Martin,
sources say that 28 new auditors have been brought in under a "Letter
of
Assist" with Spain. But as reported last week by Inner City Press, in
Darfur the UN's international staff are living in containers far from
toilets,
click here for that. Where did the Lockheed money go? And
what of the inquiry
by the Office of Internal Oversight Services which the General
Assembly demanded last
December? Developing.
