Tracking procurement opportunities: Both an art and a science

Each year, bilateral and multilateral donors contract out tens of billions of dollars in grants and loans translating into thousands of procurement opportunities for services, equipment and goods. Due to this high overall volume, as well as the wide range of funding sources out there, tracking business leads and opportunities in international development is a complex task. Despite credible donor efforts to simplify their universe of procurement information, ask any Devex analyst and he or she will tell you that effectively navigating some donor websites takes months, if not years, of practice. Even after a procurement opportunity is identified and vetted, implementing organizations face incredibly stringent bidding standards and rules that further complicates an already challenging task for business development professionals. But at the end of the day, tracking procurement opportunities is a daunting job that must be done and implementing organizations are still experimenting with different approaches. Depending on company size, positioning in the marketplace and business development sophistication, among other factors, some firms stick to old-fashioned tactics such as searching individual donor sites and managing leads with spreadsheets or emails. Others are more ambitious and invest in custom or off-the-shelf technology solutions. Unfortunately, neither approach is ideal and both can entail substantial costs. Irrespective of these differences, it is clear that implementers can benefit from taking a more scientific and structured approach to tracking procurement opportunities that starts well before any formal project or tender announcement. At the same time, there’s an art to it all — organizations must be clever and agile in order to consistently detect and capitalize on the right procurement opportunities. Here are a few more specific principles to keep in mind for those of us responsible for tracking procurement opportunities. And remember that Devex is your partner in this process. Dedicate and organize resources When tracking procurement opportunities, organizations generally take a too centralized or an overly de-centralized approach. A balanced hybrid approach — which involves both headquarters and field offices — is optimal. For instance, firms should assign a specific person or team to assume ownership of the function across the organization. But that person or team should also work together with field staff, technical specialists and executives to review procurement opportunities and make bid/no-bid decisions. Over time, the centralized team will build institutional knowledge of procurement activity across donors, countries and sectors. Concurrently, field-driven tracking allows staff to cultivate relationships and understand the context of procurements, which is becoming increasingly important as donors spend more money locally and through partner country systems. Understand donor policies and guidelines Today, the vast majority of foreign aid donors have untied their aid programs, meaning that firms headquartered or incorporated outside the donor country are eligible to bid. As the bid environment has opened up, implementers are pressed to better understand the procurement policies and guidelines of new donors, including the language they use in requests for proposals and other bid documents. The U.S. Agency for International Development procurement process is governed by the Federal Acquisition Regulation — a complex set of rules governing the U.S. federal government's purchasing process. The FAR establishes, for example, the criteria and rules for set-asides for small businesses or minority-owned businesses — both fairly common, but highly restrictive, contract types. To bid more efficiently and avoid wasting time evaluating opportunities for which your organization is not eligible, implementers should acquire a baseline understanding of donor procurement policy. Analyze donor strategies Many international donors are now publishing country partnership strategies that provide important advanced information on how aid money will be spent and clues on specific procurement opportunities. USAID is in the process of preparing five-year “country development cooperation strategies,” or CDCS, for the countries where it operates. Currently, 63 USAID missions are scheduled to complete a CDCS by the end of fiscal 2014. Citing a commitment to aid effectiveness, the Australian government has implemented a formal, multiagency process for developing and maintaining its programming documents, which articulate the Australian government’s aid engagement strategy in each country in which it provides development assistance. The U.K. Department for International Development recently released its full series of “operational plans” for 2011-2015 and the European Commission is in the process of publishing its latest round of programming documents. These public documents represent a logical launching point for any organization planning to engage a certain donor in a certain country and preparing to track procurements. Forecast project opportunities The donor strategies also help facilitate a critical process of forecasting. Some aid agencies, including USAID and the Australia aid program, can sometimes issue advanced notices of possible procurements to give potential contractors time to prepare their proposals. For those agencies that do not, the responsibility of forecasting falls to bidding organizations. One forecasting method is to break donor strategies and funding pledges down into specific project components and anticipate the services and goods that will likely be required. Another method is to assess ongoing projects that are soon scheduled for completion, but will likely be continued. The crucial pieces of information are the end date of a project and whether its theme is mentioned as a priority for the next budget cycle. For instance, even if a reproductive health program in Zambia is coming to a close, there may still be new procurements if the donor government budget indicates that addressing the issue is still a priority, and money has been set aside for that purpose. The Devex Early Intelligence service provides advance information on specific upcoming business opportunities so you hear about them before being publicly announced. Monitor updates and changes Donors frequently update and change procurement notices and requests for proposals midstream. Deadline shifts or extensions, scope clarifications and other amendments may affect an organization’s decision to bid or the proposal development process. Some donors will permit a round of questions from interested parties and will publicly update the procurement notice with answers to those questions. Implementing organizations should always monitor the bid from announcement date through the submission deadline to confirm they are working off the most recent information possible. Capture subcontractor opportunities While most public sector donors are required by law to publicly disclose procurement opportunities, subcontractor opportunities are much harder to come by. These opportunities are typically borne from a major prime contractor that is looking for viable partners to help implement elements of a project and are an effective way for small groups to build up their qualifications. Regrettably, prime contractors rarely put these opportunities out for open competition, preferring instead to accept bids from select suppliers only. There are some exceptions. For example, Chemonics and DAI — among USAID’s leading implementers — both have systems to conduct competitive subcontract procurements. Devex is a primary source for subcontracted procurement opportunities that you cannot find elsewhere. Ask questions Finding out more information about projects may entail contacting or establishing relationships with donor agency staff and government representatives, particularly those from the implementing office. Generally, bidding organizations should not fear asking questions and some donors and procurement processes encourage question asking. But approaching or e-mailing a donor agency contact can have mixed results. Government representatives are not obligated to reply to questions from contractors and must be cautious about speaking with potential bidders fearing accusations of preferential treatment or favoritism. Simply, some donors are more open to talking with contractors than others. Be aware that once a request for proposal is publicly announced, donor agency representatives tend to only answer questions in a format that can be documented and shared. 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.