Annex 2: Confidential written evidence
Following receipt of evidence from a number of contractors, we followed up with a list of questions seeking further information. We express our gratitude to Coffey International Development Ltd, Crown Agents, DAI, KPMG, Mott MacDonald, Nathan Associates, Palladium and PWC.
This additional evidence is not published in full due to the commercial sensitivity of some of the questions. Non-confidential responses and anonymised quotations referenced in the report are included below.
Q1: How many sub-contractors or local NGOs do you use on average to deliver a DFID-funded programme?
DAI Europe: “This varies quite widely depending on the purpose and design of each programme. For example, on the Expert Advisory Call Down Service which DAI manages for DFID, there are more than 60 sub-contractors and NGO members of the DAI consortium. In the last report on the use of SMEs that we prepared for DFID in December 2015, we identified more than 550 sub-contractors or local NGOs working across 27 DFID contracts, for an average of more than 20 per DFID-funded programme.”
Q3: How many contracts from DFID have been cancelled over the last five years? How does this work compare with your private sector clients?
Coffey International Development Ltd: “We are not aware of the number of cancelled DFID contracts or procurements over the last five years. However we have observed a recent increase in the number of procurement cancellations and retenders. We are aware of five cancelled tenders in the last eight weeks.”
Q7: What is the impact on programme design and execution of the often long lead times between DFID issuing an ITT [invitation to tender], the winning bid being selected and the contracts being executed so work can be begin?
Mott MacDonald: “Clearly, the longer it takes for DFID to tender and award a contract the greater the risk that there is a disconnect between the programme design (the drafting and approval of the business case), the inception phase if there is one, and project implementation. The longer it takes, the greater the risk that the social, political and economic environment may have changed, and the hareder it is to retain key staff and sub-consultants so they are available once implementation begins. The greatest impact is, of course, on beneficiaries. We note that the time between issuing a tender and contract starting has considerably lengthened in recent years due to increased procurement scrutiny.”
Coffey International Development Ltd: “Third, long delays can also erode local stakeholders’ and beneficiaries’ trust in the supplier and in DFID’s commitments. This, in turn, can hinder effective delivery.”
Q14: How much do you estimate that you would spend in preparing a bid for a contract worth approximately £10 million? £50 million? £100 million?
Coffey International Development Ltd: “The level of spending that goes into preparing a bid is dependent on the timescales provided to us by DFID, the size and complexity of the programme, the level of grants / funds that make up the contract, and the extent to which we have a presence in the target countries. On average we spend £40,000 on a £10m proposal and up to £120,000 on a £50m proposal. This includes expenses and assigned staff time. This does not take into account staff overtime, including the weekends and evenings often required with the tight turnaround times and parallel project requirements. This can amount to an additional £10,000 to £15,000 per proposal.”
Confidential: “The cost of bidding for DFID contracts has increased significantly in recent years. In our experience, DFID tenders are more expensive to submit than those of other donors, and certainly of our private sector clients. This is due to both the competitive nature of the market and also the depth of content that DFID requires. We believe this represents a significant barrier to entry for both new and small firms.”
6 April 2017