Local procurement and market support
How NGOs can buy locally and support local markets: assess the market first, run fair tenders, support suppliers, and avoid pushing prices up.
Short answer
Local procurement means buying goods and services from suppliers in the area or country where you work. Done well, it delivers faster, supports local businesses and recovery. Do a market assessment first, make tenders easy for small suppliers, check quality and ethics, and monitor prices. Done badly, aid purchases can raise prices, exclude small traders or weaken local suppliers.
Key points
- Assess the market before you buy, to avoid raising prices or harming traders.
- Make tenders simple enough for small local suppliers to enter.
- Check quality, ethics and capacity, not only the lowest price.
- Support suppliers with small steps: payment terms, feedback, bid coaching.
- Monitor markets during and after your purchases.
What is local procurement?
Local procurement means buying goods and services from suppliers where you work, instead of importing or buying from large distant suppliers. It covers items such as hygiene supplies, building materials and food, and services such as transport, printing and water trucking.
The Humanitarian Logistics Association's Local Procurement Framework notes that aid procurement is often complex and may limit local market development because tender processes can be intimidating, give limited weight to local manufacture and favour large suppliers. That can lead to local monopolies and restrict competition.
Why does it matter?
Oxfam's WASH guidance explains the benefits of working with markets:
- Appropriateness and dignity. People get items that fit their needs.
- Efficiency. Existing supply chains can be cost-effective and quicker.
- Recovery. Stronger markets help restore livelihoods.
For local NGOs, procurement also links to localisation: money spent with local suppliers circulates in communities you serve. It can also make your own procurement easier, because you know the traders.
What are the risks?
Oxfam also warns that aid not aware of the market may cost more, put suppliers out of business, raise prices and undermine recovery. Free supplies can undercut traders. Large purchases can empty shops and push prices up for everyone.
| Risk | Example | Reduce it by |
|---|---|---|
| Price rise | A big order empties local stock | Split orders; give time; check prices weekly |
| Undercutting traders | Free items replace goods traders sell | Check whether traders can supply; consider vouchers |
| Favouring one vendor | The same shop wins every tender | Invite several suppliers; rotate fairly |
| Weak quality | Cheap goods fail | Set clear specifications; inspect on delivery |
| Corruption or conflicts of interest | Staff favour relatives | Declare interests; use a committee |
See writing a procurement policy that protects your team and managing conflict of interest.
How should you buy locally? A six-step method
- Assess the market. Oxfam's guidance says that after the first days of an acute emergency, a market assessment should be the default step before deciding whether local procurement or cash and vouchers fit. List which items are sold, by whom, at what price and with what stock.
- Define what you need. Write clear specifications: quantity, quality, delivery date and place.
- Open the tender widely. Invite several suppliers, including small and women-owned businesses. Keep forms short, in Burmese if needed, and allow enough time.
- Evaluate fairly. Score price, quality, delivery, references and ethical practice with a committee, and keep records.
- Pay on time. Late payment hurts small suppliers most. Agree payment terms in writing.
- Monitor. Check prices and stock after purchase. Give feedback to all bidders.
How can you support suppliers?
The Local Procurement Framework suggests choosing vendors that hire locally, invest in staff skills, use local materials, show fair and ethical practices and commit to the local business for the long term. It also suggests helping suppliers improve bid submission, management, compliance and quality capacity.
Small steps you can take:
- Hold a short briefing on how to bid.
- Give written feedback to unsuccessful bidders.
- Keep a simple supplier list, updated each year.
- Agree reasonable advance payments where donor rules allow.
- Ask your donor to fund supplier support as part of the project.
What about conflict-sensitive purchasing?
In insecure areas, who you buy from can affect tensions. Do not take political sides. Check that purchases do not benefit armed or abusive actors, do not favour one community over another without reason, and follow your donor's rules. See Do No Harm and conflict sensitivity in practice.
What documents should you keep?
Keep a short file for each purchase: need, market check, quotations, scoring sheet, approval, contract, delivery record and payment. Auditors ask for these. See also supply chain management for humanitarian programmes.
Donor procurement rules differ. Check your agreement or ask a qualified adviser before changing a procedure.
Train your team too. Procurement officers, finance staff and programme staff should understand the same basic rules: when to compare quotations, who may approve, and how to record decisions. A one-page flowchart on the office wall helps new staff. Review it once a year, after you have seen what worked in practice. If you buy often from the same few traders, discuss with them how prices are set, and ask them about stock and delivery problems before they happen. Good supplier relationships reduce risk and keep your purchases predictable. Share what you learn with other local NGOs, since several agencies buying the same items in the same market can affect prices together.
How EMPO can help
EMPO is a trusted training and consultancy provider and one of Myanmar's leading names in practical NGO training, with 1,200+ people trained and 15 partner organisations. We are Yangon-based, work in English and Burmese, and deliver training online and in person across Myanmar, including supply chain management and cash and voucher assistance. See our services or contact us.
Sources
- Market-Based Programming in WASH: technical guidance for humanitarian practitioners — Oxfam WASH, 2021
- Local Procurement Framework — Humanitarian Logistics Association, 2024
Questions people ask
Is local procurement always cheaper?
Not always. It can be faster and avoid import delays, but price depends on the market. Compare quality, delivery time and risk, and follow your donor's procurement rules.
What is the difference between local procurement and cash assistance?
In local procurement, the NGO buys goods or services and gives them out. In cash or vouchers, people buy for themselves. Both use markets, and both need a market assessment.
How can a small NGO support local suppliers without breaking donor rules?
Within the rules, publish clear specifications, allow enough time, give feedback to unsuccessful bidders and pay on time. Ask your donor what is allowed before changing any process.