In early 2013, the Organization for Economic Cooperation and Development named the European Union as the world’s top aid donor in 2012, contributing more than half of official development assistance disbursed that year.
Despite a drop of 8 billion euros ($11 billion) in aid spending, the European Union was still able to provide 55.1 billion euros in development assistance in 2012. Lower aid levels that year were largely as a result of the European financial crisis, which led to budget cuts across several EU member countries. Nonetheless, EU Commissioner for Development Andris Piebalgs is steadfast in his commitment to bring aid spending to 0.7 percent of the bloc’s gross national income by 2015.
But the tight fiscal environment meant the European Union had to be smarter about the way it delivers aid, prompting the implementation of a new policy dubbed the Agenda for Change. Under the policy, EU aid will target only the poorest countries, prioritize inclusive and sustainable growth, and encourage increased investments from the private sector.
Indeed, the push to scale back development assistance to middle-income countries has gained ground. The Development Cooperation Instrument for 2014-2020 that the European Union adopted this month will make 16 middle-income countries ineligible for bilateral aid, starting this year. Middle-income countries eligible for assistance under the European Development Fund, meanwhile, are likely to have reduced aid allocations through 2020.
Development organizations and contracting firms that want to do business with the European Union have to contend not only with a smaller market but with stringent eligibility rules as well. Although the European Commission officially untied aid in 2005, and started opening up procurement contracts to Australian firms in 2006, bidding for much of its tenders and grants is still restricted to implementing partners that fall under any of the following criteria:
▪ Operate in countries that are a member of, candidate for membership to or a potential candidate for membership to the European Union.
▪ Belong to the European Economic Area (EEA).
▪ Directly benefit from the implementation of the contract.
International organizations — and their specialized agencies — that were established as a result of intergovernmental agreements are permitted to submit bids as well. For EDF programs, interested bidders in least developed countries, as identified by the United Nations, are also eligible.
For service contracts, consultants of any nationality may participate, provided that he or she is employed by an eligible contractor or subcontractor. For the procurement of goods, EuropeAid — the department responsible for delivering EU development assistance — requires the items to be purchased to originate from a country that falls under the same eligibility parameters. In both cases, the contracting authority may require interested bidders to provide proof of qualification in order to participate. Consultants, meanwhile, may have to submit documents illustrating that their employer is based in an eligible state. In the case of materials to be procured, this involves submitting a certificate of origin for the goods in question.
The procurement process at EuropeAid begins once funding is approved.
For grants, interested bidders have to submit a concept note and full application form in response to a call for proposals. If it's a restricted call, only the concept note should be submitted in the first stage. If it is an open call, both the concept note and the full application should be submitted at the same time.
The winning firm will be offered a contract based on the European Commission’s standard grant contract. By signing the application form, the applicants agree, if awarded a grant, to accept the contractual conditions of the standard grant contract.
For tenders, the process will depend on the type (goods, works or services) and value of the contract. The infographic below provides a basic guide to EuropeAid’s procurement process. The process applies only to tenders and does not cover Framework Contracts, the European Commission’s tool for bidding out short-term technical assistance that require a specific area of expertise.
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