You established your construction company based in Denver about a decade ago. You’ve built a strong foundation for your business through the high quality of your services, competitive pricing, and the trust that you’ve earned from customers. New companies within the same industry have emerged lately, making the local competition challenging.
You are now exploring new markets to boost your sales. Your college friend is in town for a short vacation. He currently works as a senior economist for the Asian Development Bank (ADB) in Manila, Philippines. He broached the idea that you could penetrate the international development market by seeking out tenders announced by the bank and other development agencies like the World Bank (WB). You listened as he gave you a quick walkthrough of the process.
Billions of dollars are spent to fight poverty and improve the lives of people in the developing world. This is what international development is all about. International development agencies like the WB and the ADB provide loans or grants to the government to fund projects related to infrastructure, education, or environmental sustainability.
To implement the projects, for example, a road network to connect two cities, governments award contracts to private companies or contractors. The award process undergoes what is called international competitive bidding.
The business opportunities for private contractors are enormous. The ADB plans to spend $20 billion in 2020 on projects related to transportation, urban development, water, and energy. The United States Agency for International Development (USAID) had a construction portfolio in 2013 totaling $5.6 billion. Funds were primarily allocated for building construction (39%), water (22%), and transportation (14%).
A single contract award won would already be significant.
What To Do?
The checklist of items that you need to do might be a bit long. Companies that have won contracts with these agencies went through a similar process. Here’s how you can get a slice of the pie:
- Get to know the industry. Read about the work of the agencies mentioned. Go through their website and understand what they have done. There are many government organizations and multi-lateral organizations in the developed world supporting projects in poorer countries.
- Collaborate and market your expertise. Chances are, you’re a small company. But if you have focused knowledge or services to provide, you can partner with more prominent companies, which otherwise would not be able to win contracts without your services.
- Get accredited. Before you win a contract, you need to have your business certified with the multi-lateral agencies, bi-lateral agencies, and the individual governments if you’re working in-country (e.g., you have an office in Phnom Pen or Addis Ababa)
- Track the opportunities. The business opportunities on the donor agency’s website and other information portals. Do it early, too! Awarding of contracts is the final stage in monitoring the life of a development project. Before the award, the initial paper describing the project is announced six months to more than a year. Be vigilant and track the status of the project.
- Sniper rather than a shotgun. Don’t aim for every bid that’s going to come out. You will be wasting time and energy with this approach. Focus on what you’re good at and where you have a high probability of winning. The goal is to build a consistent track record in a region or a sector.
This list is not complete, but it includes the essentials to break into the international development business.
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