Australian aid: 6 things for suppliers to know in 2019

CANBERRA — The 2019 Aid Supplier Conference, hosted by the Australian Department of Foreign Affairs and Trade on Feb. 21, brought together current and prospective suppliers with the Australian aid program to share expertise, build partnerships and understand DFAT’s plans for its aid business. Gathered in Canberra, Australia, DFAT staff shared important insights for suppliers on their expectations of preferred partners, the impact of geopolitics on opportunities, and opportunities emerging from the new Pacific “step-up.” Here are six things you need to know about working with DFAT in 2019. 1. Demonstrate inclusive thinking This message was shared strongly with the audience of aid suppliers who were encouraged to progress indigenous inclusion, disability inclusion, gender equality, and thinking outside the box on what experience is needed in development to avoid socioeconomic exclusion. This means thinking about the structure and operation of suppliers’ own organization and demonstrating inclusive business practices. It also means building inclusion within the design process and ensuring tender responses clearly include plans for engaging with indigenous communities, local organizations working with people with disabilities, women, LGBTI groups, and more. “I want to take the warm and fuzzy out of this conversation,” Shelly Thomson, from DFAT’s disability branch, said to the audience. “It’s not about being a passionate advocate — it’s the right thing to do and it’s meeting human rights.” At past events, DFAT’s Aid Business Branch has emphasized that the lowest price doesn’t win contracts. This was emphasized again, with Thomson telling suppliers to include reasonable budget accommodation for accessibility and other inclusion needs within their proposals. “We’re expecting that,” Thomson said. “We know this may cost a little bit more to include people to participate in the process and participate in the outcomes.” 2. Mainstream climate action As with inclusion, embedding climate change within development programs needs to become business as usual. Russell Miles, director at DFAT’s Sustainability and Climate Change Branch, explained that a new climate action strategy sitting on the desk of foreign minister Marise Payne for approval will build the framework for achieving this from now until 2023. Once approved, Miles said engaging with aid suppliers will be important for the implementation and monitoring of its goals, with targets, and how to report them, currently under discussion. For suppliers, this means that climate forecasts will need to be part of business plans, as will building strategies that are resilient to forecast conditions of the future. It also means demonstrating climate and environment-friendly practices in delivery and operations. And it means engaging more climate experts in the delivery of aid, with a focus on climate action over adaptation. 3. The Australian Infrastructure Financing Facility for the Pacific Providing greater clarity into the thinking around delivering the new Australian Infrastructure Financing Facility, the Director at the Office of the Pacific Cherie Russell explained that there will be a split of responsibilities between DFAT and the Export Finance and Insurance Corporation to focus on what each does well. DFAT will be responsible for the delivery of 500 million Australian dollars ($355.75 million) in grants that are part of the facility, while EFIC will have primary responsibility for loans. But they will join forces in wrapping it up into a final product. The terms and conditions of loans, as well as the structure of AIFFP operations, are still a work in progress. But Russell said there are expectations that DFAT’s safeguarding policies — including on environment, gender, disability and child protection — will need to be met as part of projects supported by AIFFP, as well as conditions to support local employment. The new initiative brings opportunities for suppliers, with Russell acknowledging that DFAT does not have the expertise required to deliver everything. “The design is being done in-house, but we are very aware that we will need to contract in expertise and work with our partners,” she told the audience. “And there will be roles with our external systems, much like the aid program — monitoring and evaluation, project assessment, project preparation, and all of that work we will contract in from external support.” 4. Country-specific strategies Presentations on business plans for Southeast Asia and Papua New Guinea highlighted new thinking and opportunities for the private sector. David Dutton, assistant secretary at the DFAT Southeast Asia Regional Engagement Branch, explained that with a number of countries in Southeast Asia graduating to middle-income status, the Australian aid approach will shift from the delivery of services into reform and governance. With Australian aid spending reduced for this region of world, there are ongoing discussions on program consolidation to maintain impact while reducing costs. In terms of opportunities for suppliers, an economic governance and infrastructure initiative for Southeast Asia is a project worth $AU121 million over four years that will go to tender later this year. It will be a multicountry initiative that aims to improve economic governance through reforms. The program will need to show flexibility to adjust to changing needs, and also include analytical services that can report on political stability. For PNG, the opportunities will be different. Chris Elstoft, assistant secretary at the DFAT Papua New Guinea Branch, explained that the country is central to the new Pacific step-up strategy. A number of existing contracts are set to expire, with the next phases going to tender this year, including the education capacity building facility, health, and HIV services. An opportunity for a human services monitoring and evaluation specialist has recently gone out to tender. Within PNG, the government has asked donors to direct 50 percent of their spending to infrastructure projects. “That’s a request they have put to the entire donor community and as one of the largest donors, we would want to pull our weight on responding,” Elstoft said. AIFFP will provide a tool that can help transition to the delivery of more infrastructure projects in PNG and should shape the thinking of business partners. 5. New reporting system in trial A new online reporting system, “PERFORMS,” was trialed in 2018 with the technical support of indigenous supplier Ninti One. The trial was based on data from 23 of DFAT’s largest aid projects, with suppliers providing data in a consistent format. Through the process, better data insights are already being generated to understand the operation and impact of the Australian aid program via its suppliers, DFAT said. Simon Cann-Evans, acting assistant secretary at the Aid Services Branch, highlighted some of the initial findings from the six-month trial period. In this time, $AU275 million was spent, with 53 percent going through subcontractors — more than what DFAT anticipated in past analyses. It also showed that over 1,000 experts had been engaged to assist Australian aid, of which 45 percent were women. Issues on data privacy, use, sharing, and more will be discussed further as part of scoping the potential for a full rollout as data can provide detail on individual positions, pay, and demographics. The Aid Business Branch have given themselves a deadline of eight weeks to report back to suppliers on the trial learnings before taking the next step in improving the use of data within the Australian aid program. 6. Aid business objectives for 2019 Following the achievements of 2018, including the implementation of an indigenous procurement strategy and launching of the AusConnect portal, Cann-Evans said 2019 will see a continuation and expansion of many of the goals to diversify partners, improve engagement and awareness, and deliver better insights into contracts. Roadshows will continue and are anticipated to expand into international activities. Port Moresby, PNG, and Jakarta, Indonesia, are among the locations being discussed to bring local suppliers in partner countries into the conversation. The AusConnect portal will continue to be promoted as an avenue to bring together subcontractor opportunities for increased visibility, with Cann-Evans urging suppliers to make better use of the tool. “It’s there as an offering and it cost the taxpayer a bit of money to set it up,” he said. “But it is a product that is only really useful if it’s used.” As of mid-February, the site had seen more than 100 opportunities advertised and received 1,500 unique visitors to view those opportunities since its launch in December. On the contract and procurement side, a review of the Aid Advisor Remuneration Framework will occur to ensure it is flexible to the needs of the Pacific step-up. Panels currently used to quickly procure services will not be refreshed in their current form. DFAT will look to other whole-of-government panels that may provide opportunities to engage experts, but they will also look at whether new panels can be created to suit changing Australian aid needs. For suppliers, Cann-Evans wants 2019 to be a year to learn and grow — and bring well-thought-out approaches to the delivery of Australian aid. “I want 2019 to be an opportunity for all of us in the industry to try and find more time to be more curious about what we are doing and have more time to think and plan,” he said.