NGOs doing business with ADB: Opportunities and challenges

MANILA — More than 2,000 nongovernmental organizations are registered in the Asian Development Bank’s consultant management system. But in 2017, only 15 consultancy contracts were awarded to NGOs. Add in the projects in which subcontracts were awarded to NGOs, and the total hits 24. These numbers tell a very bleak picture in terms of the scale of NGOs’ engagement with ADB when it comes to business opportunities. And it raises the question of why? There are many factors involved. But one of the main reasons that emerged during the ADB’s business opportunities fair last month is NGOs’ general lack of awareness and information when it comes to ADB processes and ways of working. Take, for example, NGO entry points for funding. Traditional bilateral donors often have specific funding facilities or special funds for civil society. But ADB doesn’t have one. “This is one of the things that continue to surprise our NGO participants who are looking for a special fund where NGOs could submit a proposal,” said Elaine Thomas, sector specialist for ADB’s Southeast Asia social sector division. “When NGOs come to ADB, many still have this same approach that they would, for example, [with] DFID, or the World Bank civil society fund, and others that specifically have money allocated for civil society.” The bank manages all contracts under one platform: the consultancy management system, where consulting firms, NGOs, academia, and other entities interested in doing consultancy work with ADB need to register in order to bid and be considered for any ADB consultancy work. But there’s another problem. Even if NGOs are registered in the system, several don’t have active profiles. Some of the common reasons Thomas said she hears from NGOs include forgotten passwords, or that the profile is being managed by somebody else in the NGO’s head office. NGOs don’t also often take advantage of the bank’s alert systems, thereby missing out on opportunities. When she asked those in the audience who were receiving automated notifications for ADB opportunities, no more than 10 raised their hands. This lack of basic understanding of just how the bank works is costing NGOs. In Myanmar, for example, NGOs that don’t want to deal with the government given the human rights issues there may give up on bidding for ADB contracts thinking the only way to take part in an ADB-financed project is by contracting with government. But not all contracts are managed by government. Technical assistance contracts are managed by the bank itself. “Our colleagues are giving us feedback that NGOs are very excited about winning bids, but when it’s time to deliver, they find themselves in a surprise. They haven’t read the contract agreement, they don’t understand the systems, and because they’re not ready, that affects the quality of work that they deliver,” Thomas said. “If you’re ever bidding for an ADB contract, may I advise you to double the number of admin and finance staff that you first thought you might need, make sure you got that covered and you’ve got the resources, so you understand how ADB works and what’s required to successfully disburse the contract you’ve been accorded.” Some basic but crucial information During the fair, ADB staff and specialists shared some tips and information that could increase NGOs’ understanding of how ADB’s business works, and potentially increase their chances of winning contracts with the bank in the future. For example, not everyone is aware that most NGOs over the past three years have been awarded contracts under the bank’s Single Source Selection, a method in which contracts, upon approval, are provided with no competition. This applies in only certain circumstances, such as for assignments costing less than $100,000 and when there’s only one consultant or firm available, qualified, or has the “exceptional experience” to take on the job. “NGOs often have qualities that make them prime candidates for SSS. Although SSS is mostly for lower valued contracts, many consultants use them as a means to establish their reputation in ADB before going on targeting larger assignments. So for those NGOs with no ADB track record, this may be worth to consider,” said Steven Gillard, senior procurement specialist at ADB’s procurement, portfolio, and financial management department. Several NGOs have also started their way to ADB by partnering with private firms that already have wide experience and understanding of ADB rules, processes, and way of working. Single Source Selection contracts aren’t advertised, so the best way for NGOs to get hold of these opportunities is by contacting NGO anchors, essentially civil society organizations’ focal points within the bank. There are NGO focal points in each of ADB’s regional departments, resident missions, and field offices. They are also perhaps one of the best direct resource for NGOs looking for the types of opportunities available in their country of interest. But for those looking into applying for larger opportunities — the bank plans to provide more than $1.3 billion in technical assistance for the period 2017-2019 — ADB has two kinds of technical assistance modalities: the transaction technical assistance, or TRTA, and the knowledge and support technical assistance, or KSTA. “The KSTA is [about] generating knowledge, about learning and building the capacity of our client governments,” Thomas said. “In a TRTA, we want you to help us design a project. The actual job might be for collecting information that will inform the project design, but on the other hand it might be for drafting some text or doing a study that will help document or carry due diligence for the project.” Previously, the bank provided four kinds of technical assistance: the Project Preparatory TA, the Policy Advisory TA, the Capacity Development TA, and the Research and Development TA. Learning about opportunities far in advance is key. The bank’s country business operation plans, or COBPs, list all of the projects the bank plans to support in the given timeframe. Country business operation plans are updated yearly and cover three years. It shows where the project is being designed, when is it expected to be approved, the available budget, and where will the funding come from. Thomas said NGOs should pay particular notice on the design stage of the project. “That’s where you want to understand what the business opportunities are and that’s where you want to try and understand how you can get involved and influence the project design, where it could lead to business opportunities in your sector, or where there are business opportunities as part of project design,” she said. Understanding the different selection methods applied by the bank is also helpful. ADB factors in the quality of the technical proposal and the projected cost or price of the service when evaluating proposals submitted by both firms and NGOs. But this only applies when the entities bidding for a particular contract are both commercial entities, or both NGOs. If a commercial firm and an NGO are both bidding for the same project, the bank shifts to a quality-based selection method to balance the competition. A new modality for partnership For those having difficulties in navigating ADB’s consulting services, ADB is currently piloting “knowledge partnerships,” which is a new way of working with NGOs, civil society, and even academics, think tanks, and other development entities. The bank introduced the modality in 2017 and is projected to run as a pilot for a few years. It’s particularly targeted at nonprofits and is meant to function as a partnership between ADB and nonprofit organizations, as opposed to consulting services, which is mainly transactional in nature. Here, both the bank and nonprofit are allowed to work together in designing the work plan for a project, including the project’s terms of reference. Nonprofit entities, however, are expected to provide financial or in-kind contributions as part of the partnership. Nonprofits can only participate as an institution, not as an individual. The latter is allowed in ADB consulting services. It is also only available under the bank’s Knowledge Service and Technical Assistance mode, or KSTA, and there’s very small funding available for this type of partnership — $100,000 per year limit. The modality is applicable to new and ongoing KSTAs. But, despite being different from consulting services, partners are still required to undergo due diligence assessments and their financial systems pass ADB standards. “It’s not some sort of miracle solution that will keep you from some of the checks and balances that we have in consulting services arrangements,” said Julian Doczi, a young professional with ADB. Jose Cantos of the World Wildlife Fund, which recently signed a partnership with ADB under this modality, said: “We thought it’s better than consulting because there we won’t be able to participate as much in the design of the project.”