We work with businesses to help them identify tender opportunities afforded by government contracts. Questions that can arise include:
- Our business is too small or too new? We suggest that they consider joining or setting-up a consortium.
- We lack confidence in the process? We ask them how much time have they spent learning how to win tender opportunities.
- We have heard terrible stories about procurement processes (i.e. conspiracy theories and paranoia)? We suggest that they should not let others win by giving up.
We have outlined in previous articles how businesses can bid better or collaborate to win tender opportunities.
In this posting we want to draw SMEs attention a little further afield to an even greater set of tender opportunities that are being ignored by the vast majority of Irish companies – for no good reason (in our view).
Every year, almost USD$1tn is spent by international funding institutions (IFIs) commissioning goods, services and works (construction projects). These tender opportunities span a vast array of goods and services across sectors as diverse as agribusiness, education, economic development, ICT and many others. The projects are funded by organisations like the World Bank, the IMF and the European Commission.
There are a number of reasons why Irish companies should compete for these contracts:
- Britain is highly ranked in these contests and is going to find itself outside European Commission funded projects because of Brexit;
- Ireland speaks English – the lingua franca of the enlarged EU and all international projects;
- Ireland is a highly developed nation (despite what we might sometimes think!) and has valuable insights and experience that can be shared with developed and developing nations around the world.
To focus on the European Commission projects for a moment, just 60 international consortiums are selected across a range of sector groups to deliver their programmes. Ireland has no representatives in the agribusiness group, the education group and many, many more. This, at a time when entities like the RCSI and Smurfit business school are establishing successful campuses overseas. This surely constitutes an opportunity missed.
If that still doesn’t convince Irish firms of the benefit of seeking out these tender opportunities, perhaps the fact that up to 60% of the project fee is paid up front might prove interesting. Depending on the location of the project around the world, up to half the project fee is paid up front and the entities delivering the services always get paid (assuming the project is delivered satisfactorily etc.).
So what steps should a business take to start the process of international diversification, the development of an anti-cyclical revenue cycle and the fostering of international relations with suitable partner firms to make the breakthrough?
- Contact Keystone, we will talk you through your options for pursuing this route and highlight useful organisations that help businesses take the first steps into this space;
- Get ready to be open about what you can and cannot do – trust has to be built with international partners and you cannot do this and be secretive (see the point on paranoia above);
- Be patient and willing to play the long game.
These tender opportunities are too good to be left to the rest of the world. The United Nations alone spends over USD25bn per annum and Irish companies won just USD25m of this last year – statistically insignificant (just 0.1% of the total). There are peer countries like Denmark that won over USD500m in 2015 and approximately USD450m in 2014.
While some businesses can build an entire pipeline out of this work, for many we believe that it constitutes a source of interesting, well-paid work that is additive to their businesses. Moreover, for smaller businesses, delivering programmes on behalf of the World Bank or European Commission will provide references that help them get into rooms in larger corporates that they would otherwise struggle to get into.
Note: the image above contrasts the Mercator map many people grew up studying with the Gall-Peters projection which is the world as it really is. We thought it a useful metaphor for this article.