APPENDIX 3
Memorandum submitted by the British Consultants
Bureau (BCB)
DEPARTMENT FOR INTERNATIONAL DEVELOPMENT—DEPARTMENTAL
REPORT 2000
INTRODUCTION
This memorandum is submitted by the Executive
Director, BCB, at the request of its 300 international consulting
members, the majority of whom work on projects in every country
for which DFID provides funding. BCB members work for all International
Funding Institutions (IFIs) and are working in every country of
the world with three minor exceptions. We are therefore in a good
position to comment on DFID's consultancy arrangements including
procurement procedures and mechanism for assessing consultants'
performance.
BACKGROUND NOTE
ON BCB
BCB is a non-profit making organisation funded
by members' subscriptions. Its objective is to help British consultants
win work internationally by providing networking, liaison with
Government(s) and private sector bodies at home and overseas,
marketing intelligence, training and advice. BCB enjoys a particularly
good working relationship with DFID, British Trade International,
specialist Government Departments and all IFIs. We are consulted
regularly by DFID on many strategic issues—including the
last White Paper, more recent proposed changes to EU procedures,
World Bank, and UN Development Strategies, etc.
The strength of BCB lies in the membership embracing
115 different sectors of consultancy ranging from Healthcare,
Further Education, Agriculture, Institutional Development, Mine
Clearance and Environment to Consulting Engineers, Architects
and other infrastructure related disciplines. The members include
British Council, Crown Agents, several banks, law firms, management
consultants such as KPMG, Pricewaterhouse Coopers and Maxwell
Stamp, local government experts—Solace and Greater London
Enterprise, WS Atkins, Mott MacDonald, and many SMEs and individual
consultants in highly skilled niche disciplines.
Virtually all BCB members establish international
offices and partnerships with overseas consultants recognising
that this develops a local capability and enhances economic strength
which are of course good for follow-on business and two-way trade
with UK.
DFID PROJECT PROCEDURES
FOR CONSULTANTS
AND METHODS
FOR ASSESSING
PERFORMANCE
General
As BCB members work for all IFIs it is possible
to make detailed comparisons on procurement procedures for consultants.
DFID has been quite outstanding in bringing pressure to bear on
various multi-lateral funding bodies to improve their transparency,
introduce fairer, more cost-effective procedures and, where appropriate,
ensure a level playing field is maintained for British consultants,
NGOs etc who are competing internationally. Only recently, a joint
DIFD/British Trade International working party was able to bring
pressure to bear in Brussels in the formulation of new SCR procedures
for procurement. DFID Officials resident in all IFIs ensure high
standards are maintained, and that British consultants are treated
both fairly and ethically. We applaud the stance that the Secretary
of State for International Development and her officials are taking
in trying to effect more harmonisation and eventually rationalisation
of the myriad different procedures adopted by IFI, and national
Development Authorities. This situation is as confusing for those
seeking Development assistance as for consultants, UK and local,
wishing to do the work. It is a nonsense that, for example, an
African country with limited resources in its civil service should
be expected to deal with different procedures imposed by every
IFI and bilateral donor country!
Turning to DFID's own procedures, on the positive
side they are, as the Committee would no doubt agree, a model
for many other countries in their flexibility in getting projects
in the field quickly underway. The programme in the last 12 months
in Kosovo was a very graphic example. DFID has adopted a policy
of internationalising procurement rather than looking solely for
a British provider. Such however is the strength and professionalism
of British consultancy that in general terms we do not have a
great deal to fear from this; in most situations, particularly
where the technical content is high, a British firm in conjunction
with local partners will win through. It is, however, galling
for British consultants, the majority of whom are SMEs, to see
international competition for British aid funded projects encouraged
while there is a closed door for other countries' bilaterally
funded work.
Although fast-track procedures are very laudable
in a crisis situation, they are not appropriate for the majority
of routine projects. It is in this area that there is a feeling
amongst those who bid and carry out work for DFID that the situation
could be improved. DFID's own procedures should be made to match
the exacting standards that DFID champions for the EU Development
Programmes, World Bank etc. If DFID, as the "Annual Departmental
Report 2000" states, is to offer more work to local consultants
it is essential that its own procedures should be just as clear
and unambiguous.
SPECIFIC CRITICISMS
A number of points have been raised by BCB members
where it is believed that some improvement could be made to DFID's
procedures:
— A major criticism expressed by firms—large
and small firms—successful and unsuccessful in winning DFID
projects—is the lack of visibility in the procurement process.
The report (page 113) makes clear that by almost a factor of five,
projects are let non-competitively, despite the value of both
competitive and non-competitive categories being approximately
the same (£100 million). Too often firms and individuals
hear after the event about a project being let for which they
were eminently suitable—in some cases more suitable than
the successful candidate—without there being an opportunity
to either express an interest or be selected as one of several
bidders.
The introduction of "Project Pipeline"
information on the DFID website has been welcomed by those seeking
work. Unfortunately, until very recently (March 2000) this list
was not updated for several months at a time. Clearly, to be effective
it needs routine and regular updating. Furthermore, unlike the
IFIs (the SCRs is particularly good), there is little information
on such details as: requests for expressions of interest; dates
for proposal submission; short-listed firms; and who has won the
project.
Some disquiet is evident, particularly amongst
newer companies seeking international work, that unless you are
one of the "chosen few", you are unlikely ever to win
a project. Even amongst those who are highly successful in working
for DFID, there is a feeling that too many of the projects are
let by advisers apparently only on the basis of personal knowledge.
Examples have been brought to our attention where large BCB consulting
member firms working regularly for DFID have been asked to do
projects entirely unsuitable to their specialist capabilities,
simply because they are well known to DFID. Some are awarded contracts
only to have to sub-contract to a small firm with the specialist
knowledge.
In such a situation personal experience inevitably
plays a part in selection with the result that other, more qualified,
firms become de-motivated from even expressing an interest. More
open bidding, clearer procedures and reasons for selection/rejection
in line with those proposed for the EU would do much to encourage
cost effective competition and avoid the impression of a fast-track
for certain firms:
— A major problem concerns Bid Preparation.
Too frequently companies are given inadequate time—in some
cases three weeks or less—to put together often highly complex
paperwork. No one minds doing this in a crisis situation (such
as Mozambique flood relief, Montserrat etc) but not for what are
routine projects. All too often a short submission timescale is
followed by an inordinately long decision-making period, during
which, by the way, the prospective consultants must hold ready
personnel to undertake the work. Once again it is the smaller
companies, the SMEs and individuals who find difficulty with this;
often the same person will be preparing bids and at the same time
be the expert undertaking the projects.
— Some of the budgetary aspects of
DFID projects can also lead to difficulty for consultants. Until
recently, budgetary information on projects was not generally
available, or inadequate. It is therefore difficult for some consultants
to determine an order of cost or fee rates. Furthermore, at times
BCB members question why the "big Five" Management Consultants
are so often chosen when other smaller, specialist firms could
do the work for less and to the same standard. Ironically, they
often end up doing the work as sub-contractors.
At present DFID does not commit itself to advertise
projects with a value below £250,000. As a result many companies
are concerned that as they are not aware of certain projects,
they cannot express an interest in bidding. This is deeply frustrating
for those who have specific expertise but despite registration
with DFID are never invited to bid.
Procedurally, projects worth £10 million
are dealt with in the same way as those worth £10,000. It
would be in everyone's interest if a simplified procedure could
be adopted for smaller projects.
PROJECT IMPLEMENTATION
DFID is generally highly regarded in terms of
the management of projects during the implementation phase. From
time to time there are problems where Terms of Reference are not
always appropriate, but these are generally quickly resolved.
Too often however, consultants find themselves in a "piggy
in the middle" situation between the Desk Officers or Technical
Advisers on the one hand and the Contracts Branch in East Kilbride
on the other. Indeed, this gives an impression of a certain disfunctionality
in the Department; consultants report that at times they are left
to recommend solutions which the two sides of DFID should be sorting
for themselves. Delegation is not always entirely clear and clarification
often has to be sought as to who is making the final decision.
In this context a particular complaint concerns the commencement
and extension of projects without formal contractual cover; specialists
will give an authority to go ahead and consultants discover subsequently
that this has not had the authority of the Contracts Branch in
East Kilbride.
PERFORMANCE ASSESSMENT
The outcome of how well consulting contracts
have been carried out is normally self evident but on occasions
there is ambiguity. We would prefer to see a more formal procedure
for assessing performance in line with the equivalent in the World
Bank. In general our perception is that currently DFID TORs given
to consultants are driven by inputs rather than by outputs. UK
PFI current experience would suggest that emphasis on outputs
would be beneficial to all.
INVOICE PAYMENT
The report is somewhat self congratulatory that
invoices are paid on time. However, this masks a great deal of
time spent by consultants in interim negotiations, ensuring in
great detail that "Is" are dotted and "Ts"
crossed, often marginal to the total value of the invoice. It
is questionable whether consultants, and DFID staff time might
be better utilised if those doing projects were given a working
budget for reimbursables and if, within that, audits were carried
out on an exception basis. Alternatively a payment on account
without prejudice could be made.
CONCLUSION
It is emphasised that the points raised are
minor in the context of what is a highly successful and effective
Department. We in BCB are proud to be able to assist with DFID's
highly successful programme of consultancy projects. If, however,
DFID is to make the most cost-effective use of British and ultimately
local consultants, it is desirable that:
— There is greater transparency in
consultants' selection.
— More information is publicly available
at all stages of a project's life cycle.
— Projects are made available for bidding
to a wider choice of firms and individuals—more competitions,
less direct allocation would be desirable.
— A revised set of written procedures
should be produced to cover all aspects of pipeline information,
project procurement, TORs (with emphasis on output), implementation
and assessment, which embrace the functions of the Desk Officers,
Specialist Advisers, Contract Branch and those firms undertaking
the projects.
— Any such revised procedures should
be as closely harmonised as possible to those of the IFIs.
British Consultants Bureau
May 2000
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