Doing business with DFID: A procurement process guide

Since 2017-18, the U.K. Department for International Development has embarked on a deep transformation of its commercial practices. While reforms first aimed to improve transparency and accountability of private sector contractors, DFID also adopted new measures intended to make it easier for new partners to bid for tenders. The department’s spending through commercial contracts has roughly doubled in recent years, reaching £1.2 billion in 2018-19, or 11% of its budget. The vast majority of these contracts are advertised through open tenders that any organization can apply for, including international and local NGOs. Familiarizing oneself with the procurement process is a critical step to doing business with any donor. Drawing on Devex’s extensive experience in analyzing the future of U.K. aid and tracking funding opportunities, here are five essential tips to help organizations effectively prepare for and engage with DFID contracts. 1. See the big picture Organizations eager to start bidding on DFID contracts should first familiarize themselves with the department by staying abreast of the key issues and developments structuring the U.K. aid agenda at large. This can help anticipate trends that have a direct impact on DFID’s procurement practices. In the past few years, the department has made sweeping changes to the way it attracts, commissions, and manages contractors. In 2017, DFID launched a comprehensive supplier review, which paved the way for tough measures to address and contain the risk of profiteering, excessive charges, and unscrupulous practices by contractors. This included a new code of conduct and open-book accounting requirements to improve transparency. Additional in-depth reviews conducted by the Independent Commission for Aid Impact, an independent body that scrutinizes the impact and value for money of U.K. aid, continues to drive reforms in various areas of DFID’s procurement approach. Some initiatives are now well established, while others are still being tested and refined. Potential suppliers should consult a range of strategic documents for insight into DFID’s priorities and assess progress made to date. For instance, DFID’s single departmental plan outlines its overarching objectives and how it aims to achieve them. Since 2019, the department also publishes an annual procurement and commercial report which sheds light on DFID’s commercial vision and transformation journey. 2. Understand DFID’s project design process In order to adequately prepare for a DFID contract opportunity, potential suppliers must first gain a thorough understanding of the department’s project design process. Everything starts with DFID advisers who come up with an intervention idea, a “concept note,” to support the country office's theory of change. The brainstorms and discussions around the focus, format, and intended results of an intervention idea typically last up to three months. For the proposed intervention to be considered for investment, advisers must develop the concept note into a business case that defines the need, justification, and affordability of the intervention. The business case sets out the rationale for choosing a project, program, or approach to funding — referred to collectively as an “intervention” — and aims to ensure a consistent approach to the choices and design of DFID interventions Although DFID has significant in-house expertise, staff involved in the design of interventions may not have the bandwidth or resources to evaluate all the technical, operational, and commercial aspects that compose a business case. As a result, DFID advisers may decide to commission an individual consultant or supplier to produce a “scoping study.” A scoping study typically takes four to six months to complete. The DFID country team that commissioned the study report will subsequently start building the business case over the course of three to six months. The business case then needs to go through DFID’s hierarchy to get approved, a process that usually adds six to nine months to the timeline. Finally, tender preparation requires another three months. 3. Be prepared for a marathon … and a sprint Tracking and preparing for a DFID contract opportunity is a long-term endeavor. NGOs and private sector contractors seeking to win business with DFID typically start preparing for a commercial opportunity 18 to 24 months before a tender is published. On average, it takes 24 months from the moment a DFID in-country adviser issues a concept note to when a contract is awarded. This can be longer in the case of rapidly changing fragile and conflict-affected contexts, and in some cases, the project may be dropped midway through the process. While putting together a business case and tender opportunity takes time, things move fairly quickly once a tender goes live. Bidders typically have between one to two months to submit a proposal. Then there is a three month period of proposal evaluation before the award stage. 4. Anticipate funding opportunities Like with other business development efforts, it is critical to approach DFID contracting in a systematic, focused, and forward-looking way, in order to gain intelligence well in advance of a live tender. As part of its sweeping procurement reforms, DFID has set out to improve long-term visibility into its pipeline of opportunities. This had led to some notable improvements in the past year. The department now releases a quarterly update on future funding opportunities for the next 12 to 18 months, available via the DFID Supplier Portal. For very early information, potential suppliers may also monitor the release of tenders aimed at commissioning scoping studies. This can give organizations a sneak-peek into future programming and the business case that may arise a few months later. For a more concrete pipeline, registration to DFID’s Supplier Portal is key. It is the formal route used by the department to inform suppliers about new opportunities. Interested organizations are required to create a profile before they can register interest and bid for procurements. DFID will officially make the market aware of potential procurement opportunities through the publication of “prior information notices” on the portal. Suppliers can then register interest in the procurement and will start receiving alerts through the online portal — including when a business case is published. All documents and announcements in relation to upcoming DFID contract opportunities — e.g. prior information notices, business cases, early market engagements — can be found on Devex’s funding platform. The Devex Analytics team regularly publishes in-depth analysis of DFID’s funding pipeline and top private sector contractors to help organizations better understand the funding and competitive landscape they are operating in. 5. Network Cultivating relationships can make the difference between success and failure. More often than not, contractors will hear about a potential opportunity through their networks before any sort of official notice is published. In fact, most contractors will start preparing for DFID’s procurement process when word of the scoping study gets around. Around the time a business case is published, potential suppliers can expect the announcement of an early market engagement event. For added visibility, DFID also publishes a calendar of supplier engagement events. Early market engagement sessions provide the perfect opportunity to gather preliminary intelligence first hand as well as network with DFID staff and other contractors. Potential suppliers use these sessions to triangulate intelligence and information. Independently from commercial opportunities, contractors should try to schedule informational meetings with DFID in-country staff to ask about priorities and concerns. This can help organizations understand needs and anticipate how to help. However, such meetings can be extremely difficult to organize, as DFID in-country advisers are usually quite reluctant to share information. For access to in-depth analysis, insights, and funding opportunities from over 850+ sources — combined with Devex Pro news content — sign up to a Pro Funding subscription online today or get in touch to learn about our Pro Funding group options.