Thursday, November 26, 2009

Development Aid Agency Bid Procedures

There has been an alarming trend in the development aid business when it comes to requests for proposals issued by some agencies. Apparently, those who put together the various requests for proposals or similar bid packages have little practical experience in the field or understanding how companies are run.

A recent example that I came across involved a request for proposal that tied payments to the contractor to events beyond the control of the contractor - specifically, passage of legislation by a foreign government. The culprit in this idiotic requirement will not be mentioned but it is clear that the author of the RFP does not know what he/she is doing and likely is someone with no business or practical development experience. Now, this is not a matter of a simple failure of understanding. It is profoundly stupid. No business in its right mind would agree to tie payments to any event that is outside of its control.

Another example of this out of control agency behavior is the weighting of proposals among technical and cost points. To use an 80/20 split is absurd. Again - the result of inexperienced staff and the academic composition of some agencies which results in programs that fail to take into consideration anything practical or reality based. Developing programs founded on theory rather than the existing environment is worse than ineffective. It is why many authorities in Africa, for example, think aid agencies are part of the problem and why, during a recent debate in the Economist, the consensus was that the private sector was better at delivering results than government aid agencies.

Development contractors are not in the charity business and the sooner aid agencies figure that out the better.

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