MPs have criticised the Department for International Development for allowing commercial companies to take advantage of charities delivering its services.
A report by the International Development Committee, an independent committee of MPs which scrutinishes the work of DfID, criticises the department for its “weakness in procurement” of outsourced contracts, and urges the creation of a unit to support subcontractors.
In particular, the report takes aim at the department’s “lack of oversight” of supply chain and delivery of its contracts, which it says have led to charitable subcontractors being treated unfairly.
It quotes written evidence supplied to the committee by the Bond Disability and Development Group (DDG), which reports “a lack of contractual disincentives for such behaviours in DfID’s engagement of contractors”.
“There are repeatedly documented accounts of NGOs being included at the bid/design stage only for them to be dropped or disengaged when the prime bidder has won the contract.
“This practice (which has led to the emergence of the term ‘bid candy’) means that DfID does not get what it paid for.”
While in its written evidence DfID provided an example in Sierra Leone of where the lead supplier had lost a contract after dropping a subcontractor without notifying the department, the report says this “still appears to be a feature of lead contractors’ behaviour under DfID contracting”.
See in Charity Finance
An additional concern raised by the committee is the treatment of subcontractors that are kept on throughout the contract’s implementation.
It quotes written evidence from Public Administration International, which says “subcontractors find that they rarely get a commensurate share of the paid work in implementation”, which the lead contractor keeps for itself.
The committee says it heard two instances where lead contractors reneged on their pre-bid agreements and unilaterally cut the subcontractor’s share of the payment in the bid.
It was told by a subcontractor: “In one case, there was a rate cut of 25 per cent imposed about four days before the bid submission, on the inputs by the subcontractor. In the other case, the bid was submitted and [ … ] despite there being a pre bid agreement on consultation, saying, “We did not have time to review with you. We submitted the bid. We cut your inputs by 25 per cent. Take it or leave it.”
To rectify this problem, the report calls for the creation of a “subcontractors unit” within DfID’s procurement and commercial department.
“This would act as the main access point for subcontractors and offer them a more consistent pipeline of information on future opportunities, provide a channel for raising grievances and allow DfID to better understand the challenges they face and how it can help overcome them.”
Related articles
