Procurement of Goods and Services Policy

The Terra Global Procurement of Goods and Services Policy and Procedures is a policy manual that provides guidance and establishes the procedures for Terra Global Capital, LLC and its wholly owned subsidiaries (henceforth, collectively referred to as “the Company”), to ensure the most efficient use of limited resources when obtaining the goods and services necessary for the operation of the Company and the implementation of its projects. This policy manual provides procedures to the Company’s management and Project Managers define the requirements for procuring vender contracts for goods and services, establishing eligibility criteria, soliciting proposals/applications, evaluating, awarding, contracting, managing and monitoring, and close-out for service agreements.

These procurement procedures are designed to ensure compliance regarding the procurement regulations of most of the Company’s large Funders, including United States Agency for International Development (USAID), Green Climate Fund (GCF), Inter-American Development Bank (IDB), Korean Forest Service, and World Bank. Funder-specific regulations and specific agreements/contracts are checked against these procedures to ensure compliance. This policy is intended to ensure that the procurement of goods and services are conducted in an honest, competitive, fair, and transparent manner, delivering the best value for money outcome, while protecting the Company’s reputation, taking in account the required specification, quality, service, delivery, reliability, environmental, and social issues and the total cost of ownership. This procurement policy enumerates the Company’s formal standards, guidelines, and systems based on widely recognized processes and an internal control framework to ensure fair and transparent procurement processes.

The Procurement Policy is designed to:

  • Establish and maintain control procedures over contracts and technical assistance service agreements;
  • Solicit open competition (where beneficial) to obtain the best value for the money;
  • Ensure non-discrimination and equal treatment of candidates;
  • Ensure that controls on use of funds under service agreements;
  • Avoid purchasing dangerous/low-quality goods that could cause more harm than good;
  • Avoid purchasing unnecessary items;
  • Meet the high and transparent standards on procurement; and
  • Conform to all Funder procurement requirements.

General Procurement Procedures

The procedures for Procurement are designed to encourage and support free and open competition to the maximum extent possible for the procurement of goods and services. Thus, these procedures are designed to avoid any unfair competition.  They also set practices for determining the type of solicitation which then stipulates the specific procedures to follow. For solicitations that require competitive processes, the procedures establish clear solicitation practices and evaluation criteria, such that bidder’s proposals are evaluated in a clear and consistent manner with this policy, Funder’s specific requirements are followed, and good practice is observed. 

The Company will only enter into contracts/agreements with service providers that can successfully complete the work required and will consider service provider integrity, record of past performance, financial and technical resources or accessibility to other necessary resources. In addition, as relevant, vendors or service providers' status as small business, woman-owned, minority-owned, may be considered in solicitations and selection.

These procedures and policies are used to augment any Funder-specific procurement and technical assistance service agreement requirements.

Entities Covered Under the Policy

This set of procedures and policies applies to Terra Global Capital, LLC and its affiliates (Terra Global Investment Management, LLC (TGIM) and Terra Bella Colombia (TBCO), SAS) and managed investment entities such as Choco Conservation, LLC and Terra Bella -Nature-Based Solutions Carbon Pool (TB-NBS). 

General Requirements for All Procurement

The following provides a high-level overview of general requirements that are applicable for all procurement (goods and services):

  • Planning: Company Staff involved in Procurement (Project Manager, Fiscal Manager, CFO/COO), are required to verify that adequate funds are available in the operational or contract budget to make planned purchases, taking into account quantity, shipping costs, and parts required. The designated Project Manager is responsible for and must take into account whether maintenance services will be available and to determine required approvals prior to purchase. Proposed purchases must align with the Company’s operational or technical project needs, and unnecessary or duplicative purchases must be avoided.
  • Corporate Commitment to Sustainable Purchasing: In line with the Company’s business objectives and project goals, Project Managers consider: Energy efficiency, recycled content, and recyclability in addition to price and quality. The Company seeks to procure environmentally preferable products (EPP) and ensure that products and/or services have a lesser or reduced effect on human health, communities, and the environment overall.
  • Third-Party Guidance: If necessary, the Company seeks third-party purchasing buyer guidance, should potential procurement be outside the expertise of the Team Lead and Project Manager.
  • Competitiveness: To the maximum extent possible, the Company conducts its vendors and goods purchasing through open and free competition. The Company is committed to seeking suppliers/contractors whom respond to specific needs with a competitive price and best overall quality, with a commitment to sustainable purchasing practices.
  • Conflict of Interest: The Company maintains a standard of conduct for all Company Staff in order to prevent actions which may be deemed as a conflict of interest when purchasing goods and services with any funding source/Funder. See Terra Global Capital Personnel Handbook, Conflict of Interest.
  • Request for Proposals (RFPs): When appropriate and if required by the Funder, the Company submits a publicly available RFP for goods and services, which will include:
    • Clear accurate description of technical requirements, including any specific features, range of acceptable characteristics or minimum acceptable standards.
    • Any Funder-specific requirements that the supplier/contractor must meet.
    • Description of how the supplier/contractor conserves natural resources and protects the environment and are energy efficient.
  • Guidelines for Obtaining the Best Price:
    • Collect several quotes or quotations in writing when possible (reference procurement guidelines).
    • For goods, consider the cost of a maintenance agreement and warranty.
    • Before entering into an Agreement, check and verify references of the supplier/contractor; check the environmental record and/or the environmental friendliness of the supplier/contractor.
    • Document the cost/price analysis used for determining the best rate, or to justify why a sole source was used.
  • Cost and Price Analysis: Price analysis is accomplished through comparison of price quotations submitted, market prices and similar indicators, and application of discounts, etc. Cost analysis is the review and evaluation of each element of cost to determine each is reasonable, and, as applicable, allocable to the project and allowable in accordance with Funder provisions.
  • Specific Contract Clauses: All Agreements and subsequent contracts between the Company and supplier/contractor must include Anti-Terrorism, Fraud and Corruption, and Dispute Resolution clauses.  
  • Procurement Testing: All procurement is subject to examination and testing upon receipt, and all procurement suppliers/contractors are required to meet all terms and conditions of the procurement Agreement. The Project Manager is responsible for documenting and escalating any non-compliance, issues, or unresolved problems to the CEO.
  • Shipment of Goods and Insurance: When possible, procured goods must be shipped directly to the location. If shipped to another location, adequate insurance should be obtained for actual replacement value plus shipping costs.
  • Inventory: The Company maintains an up-to-date inventory of equipment and procured supplies as well as inventory records. The Project Manager is responsible for overseeing inventory recordkeeping for each project.
  • Required Documentation Recordkeeping: Records of each step of procurement are maintained, from the planning to the shipping/arrival. This includes the Funder approval for procurement, as required and applicable; cost/price analysis; all quotations received if publicly available by RFP; and justification for selection.

Types of Procurements

Distinguishing the type of procurement is important as the policy applies a different procurement process depending on the type and size of the procurement. 

Each procurement should identify whether the procurement is classified as under one of the following:

  • Purchase of Good – Typically a large purchase which could include vehicles, hardware, and other fixed assets.
  • Service Contract – Applies when external services are required but they are not integral to the on-ground implementation for one of the Company’s projects or programs.  These may include external auditors, entities collecting field data, trustees for financial vehicles managed by the Company, and other technical services provided to projects which are generally short term.

·        Sub-awards – Provided to entities (partners) who are integral to implementing one of the Company’s projects on the ground, which are provided as grants and/or investments. Sub-awards are not covered in these procedures, as they are covered in the Company’s Grants Management Manual for grants and the Project Investment Manual (PIM) for investments.

Procedures for GCF-Funded Projects

The purpose of these publicly available procedures is to ensure that GCF-funded procurement is compliant with applicable laws and GCF requirements and are awarded pursuant to an open competitive selection process, when required. The Company’s procurement procedures cover regular procurement relating to the general operations of the Company, as well as procurement of goods and services in the context of the implementation and execution of projects/programs to be funded by GCF. Procurement activities also include those conducted and managed by the Company. These include formal standards, guidelines and systems based on widely recognized processes and an internal control framework to ensure fair and transparent procurement processes.

These GCF Funder-specific procedures reflect internal guidelines that promote economical and efficient procurement through written standards, specifying:

I. Procurement requirements, accountability, and authority to take procurement actions;

II. Procurement procedures depending on monetary limits;

III. Composition and role of the Procurement Evaluation Committee or equivalent; and

IV. Guidance with respect to different types of procurement activities managed by the Company (e.g., consultants, contractors, service providers).

In addition to this publicly disclosed Procurement Policy, any procurement awards, relevant to GCF-funded projects, are also publicly disclosed.