The evolving landscape of DFID contracts

21 May 2018

Commercial contracting by NGOs is still on the rise, with many in our sector leading and delivering international development programmes awarded through contracts. As the size and number of contracts awarded to NGOs grow, we are adapting to this new award type and its implications for our sector.  

Recently, the DFID Supplier Review and the resulting reforms have led to a marked shift in how NGOs and private sector organisations approach and access contracts.

The Review

The DFID Supplier Review homed in on several key themes:

  • Increasing aid effectiveness and transparency,
  • Raising the standards to increase accountability and Value for Money, and
  • Diversifying the organisations acting as contractors for DFID.

The NGO sector has always supported these principles. And if balanced with the needs of vulnerable communities, the combination of effectiveness, accountability and diversity of suppliers enables our programmes and collaborations with other contract suppliers to reach more vulnerable people while maintaining trust from beneficiaries and the public. 

The idea of bringing a range of expertise, skills, and perspectives to development work offers greater impact and value while opening the door for specialists and agents of change.  

The Reforms

Lines can easily be drawn from the review to the resulting reforms:

  • Effectiveness and transparency were homed in on through greater scrutiny of cost, open book accounting, and similar clauses added to the new DFID Standard Terms and Conditions (T&Cs) [PDF] for contracts, in addition to a revised Proforma (budget template).  
  • The DFID Supply Partner Code of Conduct [PDF] has reinforced DFID’s key principles while introducing additional responsibilities, registrations, and verification measures reviewed by a new compliance team.
  • Efforts by DFID to end “bid candy” approaches by large suppliers and move lead suppliers away from requiring exclusivity from consortium members and sub-contractors.

These outcomes are aimed at improving aid delivery and holding suppliers to account, as are DFID’s commitments to publishing annual value for money league tables on supplier performance and cutting red tape to boost competition.

The Response

Released in autumn 2017, the revised T&Cs, Proforma, and Code of Conduct are still being assessed by many in the sector and DFID’s suppliers.  NGOs and the private sector are adjusting to the implications of increased management demands, organisation registrations, and other emerging demands – which are large hurdles for smaller organisations. 

The Bond Commercial Contracts Group has been engaging with DFID formally and informally to highlight the benefits Bond members have seen in the reforms while also raising the concerns and risks raised by other changes and new requirements.  We’ve collaborated with the Centre for Development Results to engage private sector DFID suppliers and to enable a whole of sector response.  

We want to consolidate and extend the voice of Bond members. We also want to improve the sector’s understanding of the new standards and ways of working to enable our responsiveness and, ultimately, compliance.

Our group has a full agenda for this year, which includes:

  • Partnership and Consortium Building for Contracts Workshop, and Bond member and private sector social hour.
  • DFID Commercial Contracting FAQs consolidation from recent questions and issues raised in contracts.
  • Future meetings with DFID and other UK government agencies on behalf of the Bond membership

As a Bond member, you can access more information on our work through the members’ area. If you’re not a Bond member and would like to reach the Commercial Contracts Group, contact Zoe Abrahamson.

Check out our upcoming training courses on commercial contracting: commercial contracting essentials and winning and delivering DFID commercial contracts. Find out how to become a Bond member here.

Get the latest insights and trends in public and institutional fundraising at Bond’s Funding for Development Conference.

About the author

Brandon Sternquist
Concern Worldwide UK

Brandon Sternquist is contracts manager at Concern Worldwide UK and co-chair of the Commercial Contracts working group.