6 key takeaways from DFAT's Aid Supplier Conference

Emergency supplies being loaded onto an aircraft in Tonga. Photo by: Scott McLennan / DFAT / CC BY

Since the merger of AusAID into the Department of Foreign Affairs and Trade, the aid program has received criticism for its lack of transparency, openness and communication with stakeholders, partners and the public. DFAT has heard the critique loud and clear, and on Feb. 17 in Canberra, it took one of several steps to respond by bringing together the commercial sector, nongovernmental organizations, multilaterals and private contractors as part of their inaugural aid supplier conference.

In total, 107 organizations were represented, greater interest than anticipated, according to DFAT Deputy Secretary Ewen McDonald. “It’s a good opportunity for us all to debate some of the issues with a view to getting better outcomes,” he told the conference.

For DFAT, the conference was an opportunity to communicate policies and plans, obtain feedback from aid suppliers, and enable networking in the sector.

Suppliers and aid program partners had a range of different objectives. Existing suppliers were keen to find out more about changes to Australian procurement policies and how this would impact their ability to bid for contracts, for example.

Oleh Khalayim, monitoring and evaluation officer with the World Bank, explained to Devex that the conference enabled him to better understand the objectives of the Australian aid program and would help the World Bank direct Australia’s annual contributions to programs and regions that would assist the country’s aid priorities.

Vittorio Tassone from engineering company Monadelphous told Devex his organization was simply testing the waters of potential opportunities that may be available through the aid program.

Devex was on the ground, meeting with suppliers, NGOs, the private sector and officials. Here are our top six takeaways from the event.

1. Procurement changes will impact all suppliers.

DFAT is the fifth largest procurer in Australian government and will be impacted by recent changes to all public procurement processes. The new rules could have both positive and negative impacts on current and potential suppliers.

The new regulations from March 1 require Australian standards to be adhered to where possible, including on operational health and safety, labor market regulations and environmental impact. These are new requirements that have not previously been stipulated in contracts, potentially requiring suppliers to prove their compliance. A new child protection policy also requires suppliers working with minors to have policies and procedures in place to guarantee the protection of children.  

For contracts exceeding $4 million Australian dollars ($3.1 million), the supplier must demonstrate that awarding them the contract will be an economic benefit to Australia. “It is still a little unclear as to how this will be applied while taking in the need for us to not discriminate,” Felicity Rowe, acting assistant secretary for State for Economic and Business Affairs, said. “That’s a bit of a watch this space.”

The key panel of suppliers used to purchase services for the aid program, the Aid Advisory Services panel, is set for renewal in either 2018 or 2019. With 18 categories of service, including research, education and social development services, this panel received 201 contracts worth $256 million for the 2015-16 fiscal year. As part of the renewal process, new options will be investigated for inclusion, to give DFAT the best value for money. The panel will also be opened for other Australian government departments to use, increasing opportunities for suppliers.

The new process should see more transparency on some issues. From July 1, DFAT will be required to publish the reasons contracts were awarded under a limited tender rather than an open tender, providing more information for suppliers to understand how DFAT works with partners.

2. Africa is a growing priority.

Australia’s most recent budget allocated $31.8 million Australian dollars ($24.4 million) to Africa — but that isn’t representative of the country’s aid commitment to the continent, said the minister for International Development and the Pacific, Senator Concetta Fierravanti-Wells. In addition to current work in Africa, she would like to further increase Australia’s aid and support to the region, following her January 2017 visit to the African Union summit in Ethiopia.

“Africa is very important to Australia,” she told the audience. “We have conservatively 30 to 40 billion U.S. dollars invested in Africa. Two hundred Australian stock exchange companies invest in projects in about 40 countries. So our contribution, our presence and our footprint in Africa is considerable. We also have trade of around $90 billion and by the time we put our bilateral, multilateral and peacekeeping assistance, that’s another half a billion dollars.”

Australia’s agricultural researchers provide support through knowledge sharing programs and research partnerships to improve agricultural, horticultural, food security and biosecurity practices in the continent. And Fierravanti-Wells said that a majority of funds given to NGOs through the Australian NGO Cooperation Program were contributing directly to aid in Africa.

The African diaspora community within Australia, Fierravanti-Wells said, provide further support, remitting an estimated $500 million annually.

3. DFAT is willing to take risks to engage the private sector.

Innovation and risk were frequent buzzwords at the conference as DFAT seeks to find new ways to partner with and procure from the private sector, said Simon Cramp, director of private sector development at DFAT.

At times, there are no legal or protocol precedents for the situations that arise in development projects. DFAT is trying to “find workarounds in real time,” he said.

“We have found working in the new environment within the department, particularly around procurement, legal, risk, fraud, these systems were pretty static in the old days,” he said. “From our perspective we see a lot of dynamism within the department now, a lot more open mindedness and a lot of things coming up now there are just no rules for.”

One example is the Business Partners Platform, which promotes private sector engagement in development by matching funds from businesses for projects that are both commercially viable and socially impactful. Before the platforms creation, intellectual property clauses in DFAT contracts often deterred the private sector. “A clause [in a contract] that says the Commonwealth retains all IP is not going to work,” Cramp said. “If you are MasterCard you are not going to say ‘sure DFAT, you have that.’” For the BPP, these clauses were generally removed.

Another new program, Australian Resources Development Hub, will aim to assist resource rich developing countries gain long-term economic and social benefits from their natural wealth. The hub will blend financing from DFAT and the private sector and will be structured as a company limited by guarantee, with DFAT holding one seat along with members from industry, civil society and academia. The hub demonstrates DFAT’s growing appetite for risk, as it won’t have full control of the board’s decisions.

DFAT is also testing the waters for Australia to establish its own development bank. It will begin with the Emerging Markets Investment Fund — a trial for a larger institution down the road. The fund will provide access to finance for high development impact businesses in Southeast Asia.

“These programs are all on the table and are moving through,” Cramp said. “BPP is live and the other two are very close to their final point.”

4. 2017 will see numerous bidding opportunities.

DFAT presented suppliers with a range of large programs that are either new or have been modified and will be open to bidding soon.

A new phase for the Pacific Horticultural and Market Access program, providing practical and targeted assistance to help Pacific island countries gain improved access to international markets, is expected to go to market late 2017 for the management services of the new program.

Stage 3 of the Australian Pacific Technical College, which gives Australian qualifications to 14 Pacific island countries, will go to market mid-2017. Peter Izzard, assistant director of Pacific performance quality and risk, described the college as a “flagship investment” for DFAT in the region. The new phase will seek to provide courses that are demand-driven and led by industry, building better connections between trainees and job candidates in the region.

The Pacific Climate Change Support program will also go to market in mid-2017, seeking to create a hub similar to the Pacific Women Shaping Pacific Development Program, which allows a range of representatives from Pacific countries to identify, manage, monitor and report in climate-related investment opportunities.

Additional programs that will be out for tendering in the coming year focus on education in Myanmar, support for vulnerable persons in Cambodia, anti-trafficking in persons and tech for development.

Program concept notes are available from the DFAT website and suppliers are encouraged to review and provide feedback. With many of these programs currently in the design phase, DFAT is keen for external advice to ensure they are crafted well from the get-go.

5. DFAT wants ideas.

DFAT is keen to engage suppliers, asking their suggestions on development issues in the Indo-Pacific. The department is looking for new ideas for sustainable development programs that are economically efficient.

In Myanmar, for example, DFAT’s Myanmar Director David Chick explained that the department was interested in feedback on how to counter perceptions from the local Muslim population that aid programs were biased against them. “It’s a broad perception, not Australian specific, that relates to the delivery of services on the ground,” Chick said. “This is something we need to address to ensure we are providing development assistance to all those in need.”

In Vietnam, DFAT was struggling to determine at what point the country would no longer require aid and instead become a viable economic partner. “When does Australia phase out?” Anita Dwyer, director for Vietnam and Cambodia, asked the audience. “I don’t know the answer and I’m hoping people thinking about it may be able to offer their thoughts.”

6. DFAT wants feedback.

Wrapping up the conference, James Gilling, first assistant secretary of the contracting and aid management division, said he heard most from providers regarding concerns over lack of diversity in contractors, transparency and the aid adviser remuneration framework. For DFAT, this conference was a first step in breaking down barriers between the aid program and its partners.  

Suppliers and aid partners for their part told Devex they felt encouraged by DFAT to get involved in discussing the delivery of an effective aid program.

DFAT will be reviewing all policies on procurement, contracts and engagement with suppliers throughout 2017 and are keen for feedback and suggestions for changes and improvements. Current and potential suppliers are asked to provide feedback to DFAT on their aims and policies to aidsupplierconference@dfat.gov.au

DFAT will be willing to take on risky suggestions, according to Gilling.

“At the end of the day it boils down to leadership,” he said. “And the leadership under the new secretary has been unequivocal and Julie Bishop has been unequivocal — they both want to see more risk being taken.”

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About the author

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    Lisa Cornish

    Lisa Cornish is a Devex Reporter based in Canberra, where she focuses on the Australian aid community. Lisa formerly worked with News Corp Australia as a data journalist for the national network and was published throughout Australia in major metropolitan and regional newspapers, including the Daily Telegraph in Melbourne, Herald Sun in Melbourne, Courier-Mail in Brisbane, and online through news.com.au. Lisa additionally consults with Australian government providing data analytics, reporting and visualization services. Lisa was awarded the 2014 Journalist of the Year by the New South Wales Institute of Surveyors.