Comments

Hello Jane. Thank you for the explanations. I agree that the entire contract value does not just go to the pocket of one contractor, but the value would to some extent reflect a major contractor's strong negotiation power and significance in the aid program. I understand your concerns and I tried to make it clear in notes and text when I wrote the blog. Unfortunately, only total contract values are available for analysis, and I have to stay with that. I do hope DFAT will publish subcontracting data. That would definitely help the analysis to tell a more comprehensive story. Also it is good to know that DFAT has put in those monitoring procedures. It would be very helpful if the documents are public and processable.

Hello Huiyuan, thank you for posting your interesting analysis. As CEO of the International Development Contractors' Community (IDCC), I'll make a couple of observations. 1. DFAT’s use of managing contractors enables the aid program to deliver resources through a broad range of implementing partners, including local experts and companies, local and international NGOs, and other companies and individual consultants. As noted in the article, DFAT took deliberate steps several years ago to reduce the transaction costs associated with directly contracting a multitude of smaller projects, and instead opted for larger programs (and so-called facilities) contracted to companies who would manage a range of smaller activities within larger programs. 2. The contract values can be misleading, as these amounts represent the entire value of the program (or facility), and include large amounts of funds that are “passed through” to subcontractors, either as grants or sub-contractor payments. 3. The “pass-through” of funds to grant recipients and sub-contractors is managed by the managing contractors in a way that ensures DFAT’s compliance, risk and safeguard measures and accountability requirements are met. This is critical in protecting the integrity of the aid program. The contractors are subject to a rolling program of audits and due-diligence compliance checks by DFAT to ensure these integrity measures are upheld all the way down the supply chain. The IDCC represents small, medium and large organisations with an interest in the Australian aid program, as well as individual consultants/sole traders.

Thank you Ruth. I agree. And there remains much work to be done to improve our understanding.

Thank you Ryan. The topic definitely deserves more exploration.

And thank you Thomas. As mentioned in my reply to Darian, I added a note and hopefully this would clear up doubts. It is very hard to go through the contracts to check if similar funding structures apply. Aid contracting market is an important topic. I do hope that as the new government places more emphasis on transparency, we will see more information and data being made public.

Hi Darian. Thank you. That's an important point. I've double-checked with my colleague Cameron Hill. And I've added the following note to the table "Note that contract value also includes funds transferred to NGOs through contractors. For example, Alinea transferred a large amount of funds to NGOs under the Australian Humanitarian Partnership (AHP) and its AHP contracts have a total value of 191.8 million AUD in 2021-22." Thank you for the comment. We'll consider that as we go further into the analysis.

Touche and bravo Ofa! Speaking truth to power in the development, humanitarian 'industries' is critically important.

Thank you Ashlee for your information. That's another transparency issue, again. There's very limited information on the contractor selection criteria. I wonder how much weight it put onto national interest, localisation and inclusion of experts. It would be interesting to see how the adjustments in selection criteria affect project outcomes. I agree that a comparison between the Pacific and S&SE Asia could provide some useful insights. I haven't done that yet as there is a lot of manual work required to find out the location of contract implementation. I updated AECOM to AECOM (now DT Global) and Scope Global to Scope Global (now Palladium). Thank you for pointing that out. Cardno and DT Global are treated as separate because we think they are still competing with each other for the contracts before the acquisition. Same rule applies to other companies.

Very interesting article and research. Thank you for sharing. I believe there is room to grow and also ways to understand Pacific based local consultant firms to improve the ways of working and ensuring aid trickles down to the needy and meaningful partnerships.

Hello Marita. Thank you for sharing your experience and perspective. Knowing this is very helpful. It is disappointing to see that some valuable local partnerships through subcontracting have even failed to realise their underlying values. This provides more reasons for DFAT to rethink its approach to localisation.

Thank you Alison. At the moment we don't have access to subcontracting data. DFAT does claim that Australia has transferred benefits to the recipient countries through subcontracting, but there is no evidence to quantify the scale yet. Hopefully DFAT can make their data available to the public soon.

kia ora Huiyuen Thank you for sharing this, very interesting. Would be interesting to know how many of these also sub-contract local consultancies based in the Pacific (I say this having done several sub-contracts for these larger companies) - so yes they may get the contracts, but they also sub-contract some of that work to local companies as well....