Want value for money? Leverage current investments, DFAT told

Australia’s “new aid paradigm,” a phrase coined last week by Foreign Minister Julie Bishop, hopes to achieve much more value for money by setting performance benchmarks, getting the private sector to become even more involved in development work and encouraging new ideas to make aid better by setting up an innovation hub within the Department of Foreign Affairs and Trade. This focus on innovation should be celebrated, but Australia should also explore how to maximize output from its development dollars by looking for where additional value can be extracted from its current investments, Mel Dunn, vice president of international development at top DFAT contractor URS Australia, told Devex. “I think there’s a whole of opportunity within the existing construct of the aid program to extract additional value,” Dunn said. “What I hope doesn’t happen is that in looking for the next miracle in innovation — which I hope is around the corner — we don’t overlook where there’s an immediate possibility to leverage initial investment. Below are more highlights from our conversation, during which the URS executive discussed how his firm views the latest developments in Australian aid, particularly the latest reforms announced by the foreign minister. How do contractors like URS view the latest reforms in Australian aid introduced by Foreign Minister Julie Bishop, and what are the potential opportunities? There’s a whole lot of opportunity here. The real opportunity is to start looking beyond the traditional contracting conversation … looking at how private sector organizations such as URS and other contractors can explore other ways in which to add value to the development program. That looks at, beyond traditional contract relationships, how do we establish better partnerships with the government, with DFAT and partner countries. I think there are many large private contractors like URS, we are employers in our own right in many of the countries where DFAT works [so] how can we look at other ways to leverage the initial investment by the Australian government and the work that we’re already doing to bring those two worlds together to look at not just private sector engagement, but also private sector development in the countries. Could you give a bit more specifics on what different ways you would like DFAT to engage the private sector? We’ve had a number of conversations over the last year or so, which I think have been positive. I think they’re a lot more open now to how to engage more rapidly and early with the traditional implementing partners like URS. We’ve been managing large aid programs for many years on behalf of the Australian government — how can we build on that learning and experience that contractors like us bring to the program, how do you get us involved in the strategic thinking about how else could this be implemented. We bring other experiences [because] we don’t only work with the Australian aid program, we work with other donors, with the private sector, we partner with local organizations, with NGOs … How can all these experiences come together so that the policy, strategy and the early thinking about options for aid, development delivery bring us to the table [so we can] contribute to the discussion. I’m reasonably confident that those discussions will continue to expand. The foreign minister has indicated her desire to engage more deeply with the private sector, which I think is tremendous. A few Devex readers have suggested that if DFAT does in fact go for this focus on performance, it may work against organizations — nongovernmental organizations, for instance — that lack the resources to conduct short-term evaluations of projects to make sure they meet development goals. How can this potentially affect the work of a contractor like URS? All of us who are entrusted to handle part of the Australian aid program’s investments … we should be held to account, be required to demonstrate that the program is adding value, is making a difference … and we should be looking at ways to improve that. I don’t think it’s reasonable to not expect that we do not have a responsibility to demonstrate effective aid delivery and report on that. It’s good that all stakeholders entrusted with delivering Australian aid programs need to report on results. [But] what we have to be careful about is what it is [that] we want to be measuring. You can set measures for everything, and then at the end of the day there’s always the possibility that you find out there’s a well-managed contract, but that doesn’t necessarily mean that development has been implemented well. What type of measurements would a firm like URS want DFAT to prioritize? What would you change in the way performance is evaluated now to better achieve development outcomes in Australian aid programs? I think it all lies with what the new policy direction … has been talking about. [In the 10 key targets] there are some things that are obvious. It’s clear that we need to be looking at the role of the private sector, we need to make sure that the empowerment of women and girls is fundamental, it’s fundamental that we need to be contributing to poverty reduction … management risk and fraud … There’s a whole lot of guidance at the top level — I’m not sure a lot of that is brand-new, but that’s not a criticism. What I think is important … is that there have been some conversations about the short- versus long-term nature of some of the goals and targets, so I think we need to have quality conversations. We’re in this together [so] we must understand that, but it’s important that private companies, NGOs and partner governments come together and look at what pieces of evidence we need to capture to take on that journey or to correct that journey if it’s not going where we hoped. How does URS view DFAT’s proposed new innovation hub? I think there’s a whole of opportunity within the existing construct of the aid program to extract additional value. What I hope doesn’t happen is that in looking for the next miracle in innovation — which I hope is around the corner — we don’t overlook where there’s an immediate possibility to leverage initial investment. If you look at some of the submissions that were put to the [recent] parliamentary inquiry, there have been examples from the contracting community about looking at existing programs, and inside them, can something else be leveraged — that’s a small, practical and immediate innovation, that just requires all of us to behave a little bit differently … At URS, innovation is something that we continue to explore in our private sector activities as well as our aid programming. From our perspective, the way we’re working with other partners across the stakeholder spectrum is looking at leveraging the investment. Check out more insights and analysis provided to hundreds of Executive Members worldwide, and subscribe to the Development Insider to receive the latest news, trends and policies that influence your organization.