10.05 Long Term Agreements (LTA)

Definition of Long Term Agreement

An LTA is a written agreement between UNAIDS and a supplier that covers all the commercial terms applicable to orders that may be issued for repeated purchase of predefined goods or services over a specific period of time. The LTA will provide relevant details of pricing, discounts, payment, packing and delivery. It will also include applicable general terms and conditions and any special terms and conditions.

LTAs may be raised with a single supplier or with several suppliers, and may contain one or many line items of products or services. They would be established for:
  • a specified period of time (normally two years but could be for a maximum of three years); and
  • a maximum amount corresponding to a ceiling of aggregate demand volume.

Purpose of an LTA

LTAs are used to ensure a reliable source of supply for goods and services at the best-value price, in accordance with predefined terms and conditions.

LTAs are typically used in UNAIDS for commodities and services with a low risk, a high frequency of procurement and established on a non-exclusive basis.

Development and use of a UNAIDS LTA

If the procurement requirement fits within the framework covered by an existing UNAIDS LTA, then the procedure for procurement under that LTA must be followed unless the benefit of conducting a separate competitive process can be demonstrated.

A procurement action using an established LTA (UNAIDS or other UN organization) must be justified using the template provided for this purpose in PT.10.10 Adjudication report LTA.  

The use of an existing LTA provides justification for waiving the need for a new competitive process, but the staff conducting procurement might consider launching a new competitive process to fulfil specific requisitions. See the section below on “Not using an existing LTA” for more information.

The establishment of an LTA must be discussed with and cleared by the Procurement Coordinator. In doing so, the responsible Division must provide justification of the need for such an LTA, as well as the potential benefits and savings deriving from this approach. Broad consultation within UNAIDS should be conducted in order to determine the needs and appropriate volume of the LTA to be established.

The establishment of a new LTA is done using the appropriate competitive procurement method in accordance with the type and value of the foreseen accumulated value of procurement actions during the contract period.

When developing an LTA, the responsible Division must ensure proper administrative arrangements are in place to monitor and control the use of the LTA, including measurement of the performance of the supplier against agreed indicators. 

A Focal Point responsible for monitoring the LTA use and reporting on expiration dates, maximum contractual amounts, performance issues, and the closure of contracts must therefore be appointed. Users of established LTAs are required to report their use to the Focal Point to enable him/her to conduct this function effectively.

When multiple LTAs for the same goods or services are anticipated as the result of a competitive process, the methodology for selection among the resulting LTA holders must be defined in the solicitation documents. The following methodologies can be adopted, subject to the advice of the Procurement Coordinator and clearance of the awarding authority.
  • Use in cascade - LTAs ranked in order of preference as per the results of the evaluation and establishment of LTAs. This is normally used when the technical specifications are precisely defined.
  • Secondary bidding - The different LTA holders are subject to a secondary bidding process for every specific order. This is normally used when specifications are defined in general terms and final contracting arrangements depend on the specifics of each order (e.g. fixed daily rates and number of days subject to order, etc.).
A standard UNAIDS contract type/template must be used for LTAs. Where a different contractual format is required, it should be reviewed by the Procurement Coordinator and may be subject to clearance by the UNAIDS Legal Advisor.

Each LTA has its own specific procedures for use, how an individual order can be placed, and each includes any necessary reporting and/or monitoring requirements.

An LTA should stipulate:
  • the total period of contracting;
  • the pricing terms which must remain fixed for the duration of the contract;
  • any discounts applicable;
  • the payment terms and conditions;
  • the delivery schedule; 
  • details of transportation and packaging agreed (where applicable);
  • the maximum amount of cumulative Purchase Orders;
  • details of reporting, monitoring and review mechanisms;
  • the service level agreement establishing maximum response times;
  • the UNAIDS’ and contractor’s focal point for managing the contract and their respective responsibilities;
  • any other relevant terms.
LTAs must also include the UNAIDS general and contractual conditions, as well as any special conditions agreed with the supplier. 

In the spirit of UN collaboration and harmonization of procurement, staff conducting procurement are encouraged by UNAIDS to consider the option of opening the resulting LTA to other UN agencies. A clause to this effect should be included in the tendering documents, indicating that the same contractual arrangements shall be extended to other UN organizations.
All LTAs issued by UNAIDS are for corporate use and are available on the UNAIDS intranet:

Not using an existing LTA

On certain occasions, it may be appropriate to go outside an existing LTA. This might include:
  • when procuring a large quantity in comparison to that anticipated at the time of the establishment of the existing LTA; or
  • when lower unit prices can be obtained due to changes in the supply market since the existing LTA was concluded.
The reasons for not using an existing LTA should be specified in the adjudication report or note to the file.

Use of other UN organizations LTAs

Some LTAs can be used only by the organization that established them, while other LTAs have been developed as collaborative purchasing arrangements whereby more than one UN organization can benefit from pricing agreements for goods and services established with a single supplier.

UNAIDS can use LTAs established by other UN organizations to waive a new competitive process and establish contract(s) if:
  • the organization that established the LTA allows UNAIDS to use their LTA;
  • the conditions established in the LTA are not exclusive to the issuing organization;
  • the LTA is the result of a competitive exercise; 
  • the supplier agrees to allow UNAIDS to use the same terms and conditions granted in the LTA, and these terms and conditions are compatible with those of UNAIDS;
  • the items supplied match the requirements of UNAIDS;
  • the LTA is valid for the period of the proposed contract; and
  • UNAIDS needs do not represent a substantive amount or value with respect to the established LTA that would require the need for a new competitive process.
Divisions requesting the use of an LTA in lieu of a competitive exercise should attach an authorization from the issuing agency and the details of the LTA agreement (if these are not already available to UNAIDS).
The form PT.10.09 Long Term Agreement Information Sheet must be used to request information from other UN agencies prior to the use of their LTAs.

The use of a non-UNAIDS LTA does not waive the need for clearance of the procurement action by the relevant procurement authority, but it leads to savings by avoiding an additional competitive process in UNAIDS.

A list of LTAs open for use by other UN organizations is available at the UNGM website (only for registered users):

Buying directly from other UN organizations

In addition to using another organization’s LTA, it is possible to procure from other UN organizations as suppliers, for example when using the UN Web Buy website:

Alternatively, procurement may be outsourced to other UN entities (e.g. World Health Organization (WHO), United Nations Development Programme (UNDP), United Nations Population Fund (UNFPA), United Nations for Project Services (UNOPS), United Nations Children’s Fund (UNICEF), World Food Programme (WFP), etc.), using their comparative expertise.

Such arrangements may involve an added fee to the supplying organization that is offset by potential benefits—including a more rapid response, lower product costs, and less administrative time spent on procurement—any of which may result in internal savings for UNAIDS.
When considering such arrangements, UNAIDS staff conducting procurement should always consult with the HQ Procurement Coordinator.

UNAIDS can purchase directly from any UN organization without the need for a competitive procurement process if:
  • the services are provided by the organization based on standard pricing; and
  • the services are (or will be) provided as a result of internal competitive process and, in the case of LTAs, the contract is still valid.
When purchasing from other UN organizations, the fees charged to UNAIDS should be in line with the standard acceptable fees (3% to 7%), considering the volume, value and complexity of the procurement action.