EuropeAid, the European Commission's directorate-general for international cooperation and development, has announced a new pot of funding through its Framework Contract tool worth a potential 650 million euros ($710 million) for the period 2018-2022.
The funding renews the existing Framework Contract, due to close at the end of this year, but with some key changes that are likely to mean stiffer competition — with applicants needing to showcase broader skillsets — but more opportunities for organizations without prior experience of working for the EU.
The funding envelope is nearly double what it was in 2013, with an open international tender (as opposed to the restricted tender that has been used in previous years) and a reduced number of thematic areas of work.
EuropeAid released its prior information notice for the Framework Contract — known as SIEA (Services for Implementation of External Aid) 2018 — at the end of last month, with the full tender and deadline expected in April. It is likely to be a tight turnaround for submissions.
Devex spoke to current EuropeAid framework contractors to get the lowdown on what organizations, including those that are new to EU funding, need to know.
What are FWCs?
The Framework Contract, or FWC, is the procurement tool that the European Commission uses for service contracts valued at 300,000 euros or less in the implementation of EU external aid. As Devex has previously reported, FWCs are seen by the Commission as a quick and easy way of hiring experts.
FWCs are “umbrella contracts” between the European Commission and groups of development organizations. They have no financial value in themselves, but set out the general terms under which further specific contracts can be awarded during the project life cycle. For all FWCs this is a two-year period, with the option to renew for a further two years. All framework contracts are managed by Brussels, but European delegations across the world manage specific assignments.
FWCs are divided into technical areas or “lots.” EU staff screen groups of framework contractors acting as consortia to work on the specific lots, with each group designating a lead firm to act on their behalf during the tendering process.
Several consortia are then signed up to become “preferred suppliers” of consultancy services to the Commission. They compete for the award of specific contracts within each lot, responding with proposals to “Requests for Services” issued by the Commission. These are usually issued to extremely short deadlines, often no longer than two weeks. The lead firm coordinates proposals in this fast-paced contracting process.
Under the 2013 FWC, between three and six consortia were signed up per lot, with the consortia consisting of between two and 18 companies each. Click here to explore them in Devex’s visualization.
What’s different about the 2018 FWC?
The prior information notice for the new FWC has created a stir among past and potential contractors as it contains a number of fundamental deviations from the 2013 assignment.
EuropeAid framework contractors who spoke to Devex said the changes could have major implications for the way the FWC runs and the types of organizations that apply.
1. Open tender
Previous FWCs were restricted tender, meaning organizations submitted a letter of interest, with shortlisted candidates invited to submit a proposal. In practice, this usually meant that organizations with a history of working with the EU tended to get preference. Furthermore, only EU organizations were allowed to apply as consortia leads, although consortia members could be from any country.
However, the 2018 FWC has been issued as an open international tender, meaning that any organization can submit a proposal directly to the Commission, and competition is likely to be fiercer than in previous years.
Former framework contractors told Devex this could pose a big challenge, since they will now have to compete with all other bidders, and may not get the preferential treatment enjoyed under the restricted tender.
The expectation is that opening up the tendering process will attract more first-time bidders, including potentially those from the U.K. who may be trying to better position themselves with the EU before Brexit. Securing FWC contracts is seen as a great way to start doing business with the EU, since it is difficult to become an EU contractor without being able to point to a catalogue of experience working with the EU. Winning framework contracts as part of a consortium can therefore give organizations a better chance of securing more lucrative or independent contracts in the future.
Non-European firms could also be looking to the EU more closely in light of U.S. President Donald Trump’s plans to slash the USAID and State Department budgets by up to 28 percent.
2. More money
The 2018 FWC budget could be up to 650 million euros over the four-year period, up from 350 million euros in 2013. The reason behind the expanded budget is not yet clear, but framework contractors speculated it could indicate a merging of two previously distinct framework contracts — the FWC Beneficiaries, last issued in 2013 for operations in the interest of recipient countries; and the FWC Commission, last issued in 2015 for activities in the interest of the Commission.
Nearly doubling the budget could also mean more contracts will be dispersed and could lead to the cap of 300,000 euros per contract being raised, they suggested.
3. Fewer thematic areas, or lots
Under the 2013 FWC there were 12 thematic areas, or lots. For the 2018 FWC this has been reduced to five broader areas:
Lot 1: Agriculture, including fisheries; nutrition; food security; rural development; environment; climate change; natural resource management; and resilience.
Lot 2: Infrastructure; water; cities; ICT; energy; and climate change.
Lot 3: Human rights; governance; civil society; local authorities and decentralization; crisis management; migration; and security.
Lot 4: Human development, including education; culture; health; vocational education and training; and research and innovation.
Lot 5: Private sector; trade; employment creation; and sustainable and inclusive growth.
This new configuration of lots under the FWC 2018 is likely to mean reduced management costs for the European Commission, a source told Devex, and is part of an ongoing trend by the Commission to ease monitoring and evaluation burdens by merging technical assistance projects, such as those covered by an FWC.
However, managing the work will become more complex for framework contractors who will be expected to manage “macrolots.” This is likely to result in bigger companies who can then form larger consortia winning contracts, since they have the resources to handle the expanded scope and management required of such wide-ranging lots. Small and medium-sized organizations are likely to lose out, former framework contractors suggested to Devex.
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