Development organizations across the globe devote considerable time and resources to winning funding. But if your organization isn’t navigating the procurement process effectively — whether that means ignoring donor funding priorities, failing to draft effective proposals or not using a service that aggregates tenders — you could be letting countless contracts, grants and subcontracting opportunities pass you by.
Development procurement is complex, and as many donors face tighter budgets and increased political scrutiny, they are under pressure to ensure their aid spending goes as far as possible. Here are some key tips you should be aware of when pursuing development funding opportunities.
1. Know the trending donor strategies.
Whether it’s a push to funnel more aid dollars to local organizations in developing countries or a sharper focus on metrics that assess the impact of development projects, understanding the latest donor strategy trends is an important part of winning funding. Online procurement has revolutionized the way donors award funding and make purchases, and organizations like the World Bank are experimenting with Web-based tools to ease the complexity of the procurement process. Monitoring and evaluation has gained popularity in global development, with impact measurement now being incorporated into the planning stages of development projects rather than simply handed off to outside consultants.
Global trends are spurring reforms among some larger donor agencies, meaning big donors like the U.S. Agency for International Development and U.K. Department for International Development are taking steps to guard against fraud and reduce costs connected to the procurement process. In recent years, there have been efforts to reduce red tape around procurement. Agencies are employing a method called framework agreements, which permit more flexibility regarding purchasing goods and services under a contract, and are shifting to untie more of their aid, a move that eliminates restrictions on where an aid recipient country can purchase goods and services. While many donors have historically favored awarding contracts to organizations based in their home countries, donor agencies with untied aid now include the majority of bilateral European donors, the Millennium Challenge Corp., the Saudi Fund for Development and Australia’s Department of Foreign Affairs and Trade.
2. Understand each donor’s procurement process.
International development tendering is different from other kinds of work with government agencies. Without fully understanding what each donor prioritizes, you won’t be able to develop a solid strategy to win funding, and every agency has its own approach to internal bureaucracy. You should also start talking to stakeholders involved with the procurement opportunity early to learn more about the project and get your questions answered.
Read more on donor procurement processes
● Doing business with USAID: A competitive process guide
● Doing business with EuropeAid: A procurement process guide
● Doing business with DfID: A procurement process guide
● Doing business with DFAT: A procurement process guide
● Doing business with IDB: A procurement process guide
One donor worth studying is USAID, which awards billions in funding every year. The average USAID procurement cycle — starting from the time the agency issues a request for proposals to the time funding is awarded — lasts more than 500 days, a long time for development organizations that need reliable funding streams. That’s why it’s so important for USAID partners to master the intricacies of the agency’s funding process. Monitoring the latest news on donor priorities is a great way to do this for USAID and other donors, and you should be aware that because donors generally look for the best value, organizations that win contracts should combine cost effectiveness with the capacity to fulfill a project’s requirements.
3. Hone your niche.
Partnering is essential when trying to win business in global development, and in order to do this, you need to be able to state the unique value you can provide a donor or partner. Prime contractors on a project will look to team up with qualified subcontractors, and smaller development organizations should think about how to zero in on a particular area of sectoral or regional expertise that can make them indispensable. For example, if your consulting firm is an expert on monitoring and evaluation, how are your capabilities different from those of other organizations working in that field?
Development donors, nongovernmental organizations and consulting firms seeking partners are more inclined to team up with known organizations with a proven track record and are less likely to proactively search for new, untested partners. One way organizations can position themselves as viable partners is to research which organizations have previously won opportunities with their target donors and partners and to actively network within their region or sector to build credibility.
4. Stay updated on the latest opportunities.
Having the most lead time possible to perfect your proposals is crucial, so your business development team should be getting daily tender updates and thinking about how your organization’s expertise aligns with donor agencies’ long-term priorities. Industry reporting can tell you what’s going on at key donor agencies, and country strategy reports and pipeline reports will show earmarked funding even if tender information hasn’t yet been released.
Enrolling in a service with automated daily email alerts about particular funding opportunities will allow you to increase your pipeline with a quick scan through a list, and it means you won’t have to rely on using keywords to search for relevant opportunities. While it may be free to track tenders directly on donor websites, it’s also extremely time-consuming, and these sites are notoriously difficult to navigate. Using a reputable funding aggregation service saves time that can then be redirected toward improving your bids. It also allows you to find new opportunities by filtering tenders by specific criteria like donor agency, sector or location.
5. Cover enough ground when it comes to donors.
Development organizations often fall short by failing to diversify their donor base. If you’re only prioritizing tenders from a few agencies, you could be passing up worthwhile opportunities with other donors.
To start, Devex experts recommend prioritizing two or three donor agencies. For smaller or less experienced organizations, the focus should be on finding the right balance of donors that prevents your organization from being reliant on a single funding source without stretching business development resources too thin. If your organization currently has only one funding source, it might make sense to proactively seek out other opportunities to build the case for donor diversification in the future.
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