NGO FPA

STOCKS

In order to respond quickly and effectively, the partners often need to purchase supplies in advance and to constitute stocks.

For eligibility purpose, ECHO makes a difference between two types of stocks: stocks constituted in advance of an Action and stocks pre-positioned (or stockpiling) in advance of possible disasters.

Pre-constituted stocks

Are goods or equipment bought before the Action funded by ECHO.

For ECHO, these stocks will be considered as incurred when distributed or used during the eligibility period of the Action, no matter the purchase date.

The procurement rules and quality requirements specified in Annex III must be respected.

In Single Form the partners can declare the following costs

  • Historical purchase price or inventory costs and
  • The costs relating to the distribution of the supplies.


Pre-positioning/Stockpiling

It consists in the constitution of emergency supplies not intended for immediate use, with the objective of reinforcing the emergency/disaster preparedness in third countries. These stocks, managed by a partner and constituted with ECHO's support, should be made available to all ECHO partners in case of emergencies.

The costs of the supplies will be considered as incurred when the supplies are delivered to the warehouse of the Partner. As concerns the costs to be charged in case of pre-positioned stocks, it's due to make a distinction among:

a) Stocks pre-positioned but not distributed during ECHO Action. In this case, the partner can charge to the ECHO funded Action the following costs:

  • Purchase costs
  • Transport costs to the warehouses
  • Warehouses costs during the eligibility period

If the supplies are distributed in a follow-up Action funded by ECHO, the distribution costs can be charged to that follow-up Action.

b) Stocks pre-positioned and distributed during ECHO Action. In this case, the eligible costs are:

  • Purchase costs
  • Transport costs to the warehouses
  • Warehouses costs
  • Distribution costs

Information to be provided about pre-positioned stocks

As pre-positioning/stockpiling is not for immediate use, the reporting rules are stricter than for other type of stocks. The partner will have to provide in the Single Form of the actions under which the stocks are purchased the following information:

  • At proposal stage: The pre-positioning should appear in one of the results of the action. The partner will explain why the stocks should be constituted, the nature of the supplies and how they will be handled (for instance, in case the disaster or emergency, in case limited period of usability).
  • At report stage: If the stocks were used during the action, explain in the narrative sections of the Single Form the use that was made of the stocks. If the stocks were not used, update if necessary the information provided at proposal stage on the handling of the stock.
  • After the action: In order to avoid risks of double funding, the partner should clearly label the stocks. The partner should also, at any time, be able to trace the stocks and explain its use. (For instance in case of an audit).

Exception

In certain countries, in view of possible follow-up Action, partners may be authorised to preposition stocks to avoid rupture in the procurement pipeline, subject to the following conditions:

  • the delay in procuring or delivering of supplies should be due to objective logistical reasons and should not be due to problems in the procurement process of the partner that may be avoidable or manageable.
  • The stocks should be proportionate to the identified possible gap in the procurement chain.
  • The other stockpiling conditions (inclusion as a result in the Single Form, reporting obligations, stocks available to other partners if needed) remain applicable.



References & useful links

  • FPA GUIDELINES, Section 9.3.2 b), EN; FR