EuropeAid Framework Contracts: What you need to know

One of the world’s major aid donors, the European Union is no exception to intricate rules and lengthy tendering for the award of procurement contracts. Not only do EU-funded contracts differ according to the activities they cover — services, supplies or works — they also vary depending on the cost and duration of projects. With services making up the majority of EuropeAid contracts, the European Commission decided to simplify the way it does procurement for those assignments, which encompass technical assistance and studies. This led it to create the Framework Contract instrument, or FWC. Framework Contracts come in two different forms. The Framework Contract Commission covers operations in the exclusive interest of the European Commission and EU delegations, or in the mixed interest of the European Commission together with countries receiving EU development assistance. Framework Contract Beneficiaries, on the other hand, concerns services solely for the benefit of EU aid recipients. Boasting an annual envelope of 175 million euros ($241.5 million), Framework Contract Beneficiaries offers many contracting opportunities. So whether you are a major development consulting firm or a freelance consultant, here is what you need to know about this procurement process. What are FWCs? Covering the entire range of EuropeAid’s programs and regions, FWCs are a contracting tool designed to provide beneficiaries of EU external aid with short-term technical assistance at any stage of the project management cycle, within any specific area of expertise. Not contracts in themselves, FWCs are “umbrella contracts” between the European Commission and several development consulting companies that set out the general terms under which specific contracts can be made throughout a two-year period, renewable once. Although all framework contracts are managed by Brussels, European delegations across the world manage specific assignments. To cover various aid topics, FWCs are divided into 12 technical domains, or “lots.” Within each lot, required services relate to the full project cycle, and may concern expertise specific to the concerned lot or certain horizontal aspects, such as sectoral policies and reforms, macroeconomics, public financial management, legislation and law enforcement, capacity development, training and research, and awareness-raising. Individual assignments can’t exceed 300,000 euros each, and have to be implemented in less than two years. How do FWCs work? Following an open competition, the European Commission typically selects three to seven contractors per lot to become “preferred suppliers” of consultancy services. Framework contractors then compete for the award of specific contracts within each lot. For every single individual project, the European Commission issues a “Request for Services” to which all or a shortlist of preferred suppliers are invited to submit an offer. Proposals comprise CVs of experts, a financial quotation and, in some cases, a methodology. The objective of each shortlisted framework contractor is to come up with the most competitive team at the best possible price. This is where a reliable network of partner organizations and freelance consultants proves useful. The time between the request and the deadline for submission of offers is usually very short and often no longer than two weeks. Upon evaluation, the European Commission decides within 14 calendar days which bid wins, favoring the one with best value for money. As soon as the specific contract is concluded with the chosen framework contractor, the latter proceeds with mobilizing his team of experts within a few days or weeks. Due to the diverse and fast-paced nature of assignments, framework contractors are usually consortia represented by a lead firm. The latter coordinates proposals of partners to ensure that no assignment goes unanswered. As for the type of companies that take part in FWCs, they are either well-established knowledge-based firms with their own internal expertise on specific themes, or smaller companies — sometimes called body shops — that provide external expertise on a wide range of topics. Spanning from January 2014 to December 2017, current FWCs were awarded in October 2013, after a 16-monthlong competitive selection process. Depending on the lot, the European Commission only signed three to six consortia as framework contractors, most likely in an effort to counterbalance the significant increase of members within each consortium. What are the benefits of FWCs? Compared with other procurement procedures, speed is the prime advantage of FWCs. “Companies get to bid quickly and the European Commission awards contracts in a reduced amount of time,” Raphael Zayat, managing director at COWI Belgium, confirmed. According to Zayat, FWCs are also a good way for companies to test new experts and partnerships. Because of the re-opened competition procedure at the level of each assignment, consortia members have to develop a reliable network of associate companies and consultants in dozens of countries and sectors. By doing so, they increase their visibility on the market as potential recruiters for talented experts. In addition, good performance in the execution of an assignment “is the best marketing strategy to forge relationships with new clients,” Zayat noted. FWCs further prompt contractors to cover the whole project cycle management — from identification to ex-post evaluation — which helps them build their technical sustainability, Manuel Alonso Losada, international managing director at EURADIA International, added. Although individual assignments can’t exceed 300,000 euros, FWCs receive 350 million euros every two years. With such deep pockets, the European Commission awards over a thousand assignments a year. Vincent Curie, deputy managing director at B&S Europe, explained that FWCs assure a steady cash flow to framework contractors. Profits are also higher than in other technical assistance missions. This allows them to anticipate their annual turnover and invest in larger projects. His firm has been managing FWCs for more than a decade. For companies that have not been contracted as preferred suppliers by the European Commission, subcontracting is possible. Framework contractors are especially interested in subcontractors with regional, local or highly specialized knowledge. FWCs also offer considerable opportunities for individuals. As the number and scope of the expertise required often exceeds their full-time internal capability, consortia members rely heavily on freelance consultants. The short-term nature of assignments under FWCs makes them a good entry point for younger professionals seeking to gain experience. But they are equally appealing to highly specialized senior experts on the lookout for increased exposure to the European Union. As for beneficiary countries, flexibility and speed are the twin virtues of FWCs. Not only can they provide much-needed support in addressing unforeseen issues in the recipients’ national or regional programs, they can also prepare the ground for larger initiatives. What are the challenges of FWCs? According to Curie, identifying and mobilizing adequate experts in a short period of time is the main difficulty companies have to face when working under FWCs. “Most companies are not able to find the right experts at the right time” he explained. “That’s why in consortia, you often only see two out of 10 companies winning assignments, and they are often the biggest ones.” This struggle is related mainly to a lack of resources. Many partners and smaller companies do not have staff fully devoted to managing FWCs. This makes it hard for them to find the most adequate experts, and prevents them from spending time on the formatting of CVs — a crucial step for highlighting how the experience of proposed consultants matches the assignment. Another obvious challenge for framework contractors, Maria Garrón from ACE International Consultants pointed out, is ensuring high quality services and full satisfaction of clients while working under tight deadlines. How can firms be awarded FWCs? Establishing a strong consortium is an essential requirement to be awarded FWCs, and complementarity between partners is key. Consortium building should be based on the technical and professional strengths of each company, Alonso Losada noted, but should also take into account strategic criteria such as credibility and geographical experience. For companies to be considered as potential consortium partners, Alonso Losada suggested they follow a four-part consolidation process: companies should consolidate their main sector(s) of activities, their coverage of priority regions, their experience with the European Union and other donors, and their image in the development aid market as credible entities with functional networking strategies. How can firms win specific contracts under FWCs? Framework contractors first have to ensure an efficient mobilization of experts upon receipt of a request. The period between the receipt of each individual assignment and the first contact with potential candidates must be as short as possible. Selected consortia also have to pay particular attention to the way they “package” their experts. “It is important for framework contractors to dedicate a lot of time to the ‘make up’ of experts’ CVs,” Alexandre Cabaret, manager of membership and alliances at Devex, explained. “The terms of references of FWC assignments are very precise, so shortlisted consortia have to make sure that the way they present the professional experience of proposed experts is carefully tailored to the project’s needs.” But it’s not only about finding the most appropriate technical skills for each request. Professional capabilities and personal integrity are equally important. For example, Alonso Losada underlined the need for experts to be appreciated by previous contractors and coordinate well with other actors. Being awarded one mission is good, but how does a company optimize its chances of regularly winning assignments under FWCs? Implementing assignments on schedule is crucial. But having “excellent experts and excellent quality supervision and backstopping support” are key elements to keep in mind as well, Garrón said. Read more: ▪ International development procurement: 7 things you need to know ▪ Successful consulting with EuropeAid ▪ What eurozone crisis? – EuropeAid consulting trends and pay rates ▪ How to win EuropeAid funding: A Conversation with Koos Richelle ▪ A quick and easy way of contracting For the latest contracting opportunities with EuropeAid and other donors, please visit the Devex projects database. Join the Devex community and gain access to more in-depth analysis, breaking news and business advice — and a host of other services — on international development, humanitarian aid and global health.