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Prepare for opportunities with the IFIs and the UN

The international development market is growing and offers many opportunities for Canadian businesses. 

Globally, these international organizations play a major role in the social and economic development programs of nations with developing or transitional economies. This role includes advising on development projects, providing concessional financing for them, and assisting in their implementation. 

Characterized by a broad membership of both borrowing and donor member countries, these institutions run independently but, share the same goals and objectives by:

IFIs and UN agencies have harmonized their policies and procedures. In the sections that follow, we'll look at their common features:

Preparing for procurement opportunities

Country strategy documents

Begin by identifying country and development needs. IFI projects are based on a country’s vision for its long-term development through strategy documents. Drafted after extensive discussions with many stakeholders, these documents promote collaboration and coordination among the various national partners and the IFIs. Reviewing these can help your company find potential opportunities and a country’s key priorities. These documents will also identify the key IFI staff members that will be overseeing the portfolio of investments in a country. Successful companies will track projects throughout their lifecycle.

Access country strategy documents

Project cycle

*Watch “The ABCs of the IFI Project Cycle” to understand the many acronyms and abbreviations that you may meet while working on IFI-funded projects.

Key stages in the procurement project cycle

The majority of IFI-funded projects are implemented by the borrowing member countries (known as operational/public procurement), and not by the IFI providing the funds (except for corporate/institutional procurement).

Procurement contracts and subcontracts are available at every step of the project cycle. You can expect similar stages for all the IFIs but you should also be aware that projects can often last several years. Consulting services opportunities usually arise during these pipeline stages, but like most public procurements, there are rules to prevent conflict of interest issues preventing bidders from being contracted for related work. However, the smaller components within the project’s cycle can offer many shorter-term opportunities. In general, these stages and activities include (but are not limited to):

Identification

The IFI and the borrowing country identify needs and outcomes to be achieved, including time and cost constraints, in order to create projects that are appropriate for the country's development strategy and suitable for IFI support. Pre-feasibility studies, sector studies and master plans, are often required at this stage.

Preparation

Once a proposed project has entered the project pipeline, the borrower and IFI technical staff study and define it further, including defining the appropriate selection method to be used. The actual design and preparation of the project are the borrowing country's responsibility. During this stage, the borrower and/or the IFI often hire consultants to help with feasibility studies, detailed project design, preparation of a procurement plan and the assessment of the project's environmental and social effects.

Appraisal

IFI staff conduct in-depth assessments of the technical, financial and economic elements of the project. The appraisal phase is the IFI's responsibility and culminates in a project plan and evaluation methodology, in preparation for going to market.

Negotiation

The IFI and the borrower negotiate the funding agreement and the project implementation plans. Negotiations result in a loan or funding document that is presented to the appropriate IFI board(s) for approval. The funding becomes effective after board approval and after the country has signed the documents. Funds can now be disbursed, thus commencing the implementation stage of the project.

Implementation and Supervision

Implementation of the project, including procurement, is the responsibility of the borrower and is carried out with minimal IFI assistance (which can vary by country). However, the IFI does oversee all major procurement decisions made by the borrower. Most of the funds are spent during this phase, which provides the bulk of the procurement opportunities for contractors.

Evaluation

This final phase is an assessment of the project and of the results achieved. Was Value-for-Money delivered? What are lessons learned?  It is performed after the project has been completed and all funds have been disbursed.

Project cycles

Project and procurement information

The IFI/UN agency and the borrowing country share the work on project preparation however, the country is responsible for project execution and procurement.

Before bidding, familiarize yourself with the procurement guidelines of the IFI/UN agency. Generally, these are relatively similar for all IFIs and UN agencies. These guidelines define the policies, procedures, and procurement methods that have been agreed to by the borrowing country and the IFI or UN agency. Borrowers must comply with them to ensure fairness and transparency throughout the stages of a project.

IFI/UN project website information:

Procurement notices represent the business opportunities in IFI and UN-financed projects. These are generally posted on their respective website (for free), as well as on websites that gather project information from multiple sources (annual subscription fee). These websites offer advanced search features, and several can automatically let you know of opportunities that match your company’s interests.

IFI/UN procurement notices:

*indicates subscription required

Once procurement results in a contract award, the relationship between the supplier (you/your company) and the borrowing country is governed by the bidding documents and your contract with the borrower, not by the IFI/UN’s procurement guidelines.

Understanding types of procurement

Procurement of goods and works

Bids are increasingly awarded to the lowest-cost compliant bidder, based on the evaluation criteria for a project and, the best overall value for money. Taking into account other factors such as performance, training, maintenance, and operations costs. Some preference may also be given to domestic bidders, or for manufactured goods with a minimum percentage of domestic content.

International Competitive Bidding (ICB) or Open International Competition is the preferred method when procurement projects are higher-value or complex. ICB ensures all eligible firms are notified so there is equal opportunity to bid on a project. Borrowing countries must publish bid invitations or prequalification invitations in one or more local publication and on UN Development Business Online. Invitations will also appear on the IFI website.

Methods other than ICB may be used, like national competitive bidding (NCB), shopping, and direct contracts. Invitations for such bidding may be limited to domestic publications, and bidding documents may be only in the national language. However, these processes are not restricted to domestic firms; if foreign companies want to bid, they can do so by bidding through a subsidiary. The option chosen will depend on the scope, nature, and complexity of the contract.

Procurement of consultants and non-consulting services

Consultants can include:

Non-consulting services are distinguished from the above, by measurable outputs/deliverables, including drilling, maintenance, mapping, etc. These are procured in the same way as goods and works.

Opportunities for consultants – including advisory services, occur throughout most of the project cycle. Technical assistance, strategy and policy needs, regulation, institutional reform, capacity building and information technology requirements can arise at any point between identification of the project, through its completion.

Selection of consultants

To select consultants for a contract, the borrowing country publishes a procurement notice on:

The notice will ask firms to submit Expressions of Interest (EOIs). Consult our Preparing an expression of interest (EOI) Guide for guidance.

The borrowing country then prepares a shortlist of companies or individuals and sends a Request for Proposal (RFP) or solicitation document to them. The RFP includes the instructions to consultants, the Terms of Reference for the project and the proposed contract.

Your company’s relationship with the borrowing country is governed by the RFP and the contract, not by the IFI/UN’s procurement guidelines.

The heaviest emphasis in selecting a consultant is on the quality of the services to be provided, which is usually decided by Quality and Cost-Based Selection (QCBS). The weight given to quality and cost will depend on the complexity and nature of the assignment, although it is usually around 80 percent for quality and 20 percent for cost.

The borrower may also use Quality-Based Selection (QBS) if the scope and complexity of the assignment is highly specialized and/or difficult to define, or the assignment will have a major impact on the future of the project. In QBS, technical proposals are submitted for evaluation first, and financial proposals submitted only after the technical evaluation has taken place.

IFIs/UN agencies are increasingly looking to award contracts based on value for money, fit for purpose, and other business-friendly principles.

Access guidelines for procurement

Corporate and institutional procurement

IFIs and UN agencies also need to purchase goods or services for their own operations. These business opportunities (referred to as corporate or institutional procurement) include a wide variety of goods and services:

IFIs also hire a broad variety of individual consultants and consultancy firms to provide technical expertise that they do not have in-house.

Procurement over a certain threshold is carried out competitively and is advertised on:

Access corporate procurement info

Private sector lending

IFIs have increased their focus on direct financial lending to the private sector in recent years. Some IFIs also lend directly to non-sovereign guarantee actors such as municipal or local governments and other financial institutions.

IFIs offer this lending through a variety of financial instruments, including loans, equity, debt, as well as other innovative financing mechanisms.

These opportunities are typically identified and supported through distinct private sector units found within the respective IFI, whose main objective is to oversee the developmental impact of the financing. The exceptions to this would be the World Bank and the Inter-American Development Bank, which have distinct organizational entities, the International Finance Corporation (IFC) and IDB Invest, to support their global private sector lending operations.

Trust funds and technical assistance facilities

Trust funds are another financial instrument for development partners to channel their funds and co-financing resources through the IFIs, for various projects and activities that meet certain eligibility criteria or, that have a sector- or theme-specific focus area. These funds allow for the scaling up of activities, intended to finance high-priority needs such as research, technical assistance, advisory services, debt relief and post-conflict transition, notably in fragile and crisis-affected situations. Most trust funds and facilities are untied and, can be single- or multi-donor funds. Many trust funds are not directly accessible to the private sector, as they are used to supplement existing IFI financing, providing support when an IFI’s own ability to lend is limited.

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