Seminar on ADB Tenders

In 2017, ADB funded projects in its 40 member states with a total contract volume of more than US-Dollar 15 billion. At 29 per cent of the funding volume, the transport sector accounts for the lion’s share of loans and grants. This and other infrastructural sectors offer interesting business opportunities for German consultants and for small and medium-sized enterprises (SME) active in exports, which have been insufficiently exploited up to date.

Following two well-attended seminars on ADB tenders for German SMEs in autumn 2016 in Hamburg and in autumn 2017 in Munich, the German Asia-Pacific Association (OAV) member AKA Ausfuhrkreditgesellschaft mbH hosted a third seminar at its premises in Frankfurt on 28 November. Attending the event, which was organised by the EZ-Scout Program and OAV in cooperation with the ADB and Germany Trade & Invest (GTAI), were around 25 SMEs keen to learn more about ADB procurement needs and processes.

Dr. Joachim Glasenapp, Director Business Line Water & Environment at H.P. Gauff Ingenieure GmbH & Co. KG, opened the event with an introductory talk on business opportunities for German companies in ADB tenders for the Asia-Pacific Region. In the 21st century – which is sometimes called the “Asian Century” due to the spiralling population growth, immense economic power, vibrant innovative spirit and the incredible urbanisation of Asia – the countries in the region are facing megatrends like extreme air pollution, permanent congestion and the contamination of raw water and food chains as a result of their economic development. A characteristic feature of the developing countries among the ADB member states is their extraordinarily high need for the construction of adequate infrastructure to alleviate these issues with due consideration of sustainability and transparency. It follows, therefore, that megaprojects are currently in the pipeline or underway to address these issues. Figures released by ADB in 2017 indicate that approx. US-Dollar 1.74 billion of investments will be necessary each year to complete these infrastructural measures between 2016 and 2030. Dr. Glasenapp described the various funding and procurement instruments, as well as their individual opportunities and risks. For some time now, German companies, – even large corporations, have become irrelevant as general contractors. He emphasised, nevertheless, that tenders for ADB-funded projects present a good opportunity for German SMEs, namely consultants, construction companies and manufacturers of high-quality components, to become involved in major infrastructure projects in Asia.

Samantha Hung, Deputy Representative of the European Representative Office of the ADB, provided a short overview describing the ADB and its “Strategy 2030” for greater prosperity, inclusiveness, resilience and sustainability in the Asia-Pacific Region, as well as ADB’s seven operational priorities.

Dr. Robert Guild, Chief Sector Officer at ADB, outlined the changes that the new ADB strategy would mean for companies participating in ADB tenders. Moreover, he offered detailed insight into the four infrastructural sectors of transport, energy, urban development and water. His talk also touched on trends in the sectors of rural development and food security, education and training, as well as health, describing how each of them relates to ADB’s seven new operational priorities.  Addressing the focus area of the seminar, he shed particularly light on the transport sector and presented to the participants an extensive, consolidated project pipeline of the respective infrastructure sectors as well as of three other market segments.

Kevin Moore, Head of the Procurement, Portfolio and Financial Management Department at ADB offered the companies a needs-based guide and useful instructions for identifying suitable projects and participating in tenders. He also highlighted the multiple benefits of ADB-funded projects:  access to business opportunities in various sectors of developing and emerging nations with fast-growing economies, secured fund availability and application of an internationally recognised procurement procedure that is risk-minimised with regard to transparency, fairness and integrity. In addition, Kevin Moore provided an overview of the various segments within the field of goods & construction works, as well as its annual contract volume.  The share of German companies that have won tenders in ADB-funded projects is below 5 per cent in the field of goods & construction works, as well as in the area of consulting services. He also presented the most successful German suppliers and construction firms in these projects. Moreover, his talk described the triangular relationship between ADB, executing agency and the commissioned enterprise.

He also mentioned that reform of the procurement procedure has become necessary due to the growing lending activities and the rising investment needs in the developing countries among the ADB member states, harmonisation with other development partners and the need for a more efficient procurement system. The new procurement strategy aims to install a flexible bidder process that is built on clear principles and defined criteria. Procurement planning draws on a robust analysis of needs and risks. Quality and value for money have been added to the core principles of economy, efficiency, fairness and transparency. The talk then moved on to address the most significant changes in the bidder guidelines for goods & construction works, including the admission of alternative valuation methods, and concerning consulting services amongst others the improvements in preselection and the discontinuation of the mandatory use of consultants from developing countries among the ADB member states.

Kevin Moore provided an introduction into the most important aspects of the ADB procurement guidelines and explained that they are well-proven at international level. ADB prefers a “competitive bidding procedure” for goods & construction works and a “quality and cost-based selection system” for consulting services. The talk then moved on to explain these two procurement methods and to elucidate the individual tender documents.

Participants learned how their companies can identify and track suitable business opportunities for goods & construction works as well as for consulting services on the ADB website and with the help of the ADB Consultant Management System (CMS). Interested companies preferring a long-term approach can use the Country Partnership Strategy, while those with a more medium-term approach are advised to select the Country Operations Business Plan or make use of various tender announcements for suitable countries. SMEs have better prospects of being included into ADB-funded projects if they offer to work as subcontractors for companies that have won a contract or for prequalified contactors.

Concerning consulting services he also provided some useful suggestions and information for preparing bids, contract implementation and subsequent project evaluation by ADB, while again highlighting the option of bidding in partnership with an already shortlisted company. In regard to goods & construction works, he recommended adopting a strategic approach in the selection of projects and gave the participants some advice and hints on how to prepare the bids. This was followed by lively discussions.

The informational services offered by GTAI, Germany’s business development agency, in general and specifically for Asia – above all for development projects and tenders – were presented by Kirsten Hungermann, Head of Development Cooperation & Public Procurement at GTAI. Among other things, GTAI provides information on target markets, fashions analyses, releases special publications on Asia and issues special leaflets on the Asia-Pacific Region and the Silk Road. An important resource in this regard is the online project and tender database for Germany’s bilateral and international development cooperation, which includes up-to-date information, as well as links to project and tender announcements. She also mentioned the free German-language newsletter “Projects & Tenders Daily”, which can be configured to suit individual interests.

Krisztian von Treuenfels-Gergely, Senior Associate at Munich Airport International GmbH (MAI), a subsidiary of the Munich Airport operating company, described MAI’s experience and presented its services portfolio with the individual areas of consulting, airport management and training. He compared winning contracts in private sector tenders with those organised by national governments and multilateral development banks. The latter offer many benefits, such as access to projects and countries that are otherwise difficult to accomplish, as well as advantages regarding sustainability – quite aside from their economic profitability. The weekly notifications in ADB’s Consultant Management System (CMS) are highly appreciated at MAI as the most efficient source of information. These notifications are categorised according to sectors, which MAI analyses thoroughly, although it also recognises the benefits of checking the messages on cross-sectoral and uncategorised projects.  He shared with the participants a broad selection of his experience, outlining which aspects are particularly crucial when preparing bidding documents.

Bernd Hindelang, Vice President Sales Large Hydro at Andritz Hydro GmbH, a leading global turnkey supplier for hydropower, paper and cellulose, as well as solids and liquids separation, presented his company to the seminar participants. Operating under the motto “from water-to-wire”, the company has over 175 years of experience in the turbine business. He described the company’s experience with bidding for two complex ADB-funded hydropower projects in Central Asia, charting the procedure and the prevailing timeframe of two and a half years from feasibility study to contracting itself. Also included in his talk were the projects and the ADB procurement guidelines for single-stage, two-envelope and two-stage bidding procedures. Finally, he provided examples of challenges and expounded on the company’s extensive range of experience in bidding for ADB-funded projects.

The participants used the coffee and lunch breaks as welcome opportunities to share thoughts with each other and the speakers. There was also a big demand for individual meetings with the ADB representatives, Dr. Glasenapp and Kirsten Hungermann, which were arranged before and after the event.

Andreas Gross from Rädlinger Primus Line GmbH found the event highly instructive and spontaneously declared his interest to take part in the ADB delegation trip to the 10th ADB’s Business Opportunities Fair in Manila from 26–28 March 2019, which is being organised by the EZ-Scout Program and OAV. Bernd Hindelang from Andritz Hydro GmbH was also delighted by the event, where he learned many things about ADB and made a number of useful contacts.