TRICKS OF THE TRADE: NAVIGATING NIS TENDER ANNOUNCEMENTS

 

By Kelly Raftery and Tanya Shuster

 

In the past several months, many U.S. companies have asked for clarification on the process of tendering in the NIS countries to determine how they can successfully access these opportunities.

 

Tenders can be divided into two broad categories: (1) tenders originating from a multilateral development bank, such as the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB), or the World Bank group, and (2) tenders originating from an NIS government body at the federal, regional, or municipal level. 

 

Multilateral Tenders

The biggest challenge U.S. companies face in working with multilateral development banks is learning the exact procedures unique to each organization, and understanding how to access the tender announcements. Each multilateral development group follows set procedures in issuing a tender. Although the procedures vary between these organizations, they do share some common elements. For example, they have a set announcement period for a tender, and also use predictable methods of disseminating announcements—via web pages, international publications, or the local press in the country where the project will be completed. With a multilateral development bank, a major goal is to make the tendering process clear and transparent to companies competing for the project.

 

EBRD and ADB have websites on which tender, prequalification, and general procurement notices are posted regularly. A company serious about pursuing tender opportunities should subscribe to any publications that announce tenders and check the websites frequently. (Link to websites via www.bisnis.doc.gov/bisnis/finance/finance.htm)

 

NIS Government Tenders

Tenders originating from the NIS do not necessarily follow the same patterns as multilateral development bank tenders, which can frustrate hopeful bidders. NIS government tenders sometimes have a very short announcement period prior to the tender document deadline. These tenders may or may not be announced in the local press, and are unlikely to be announced in international publications like The Economist. Occasionally, NIS governments may hold what they consider to be a “closed” tender, which is available only to those companies the government singles out for participation.

 

Guidelines for Tenders

Regardless of the source of a tender, following a few general rules will put a U.S. company in a better position to take advantage of tenders.

Know the Market—More and more NIS companies are successfully bidding on tenders, and tender competition is increasing. These NIS companies have local knowledge and can meet the technical tender specifications. As is widely known, the NIS is not just any international market, and success in one region does not guarantee success in another. Although large, internationally recognized companies may carry a reputation that makes them an appealing bidder on the basis of product alone, real success in these markets requires real familiarity with the local business environment. Without strong knowledge or experience in the local market, a company’s expectations should be lower.

 

Foster Active Contacts—It is essential to foster good working relationships with a variety of organizations in the United States, in the country where the tender originated, and/or the multilateral financial institution that is funding the tender, and especially in the country in which the opportunity is being pursued. For NIS government tenders, target contacts include regional industry committees and ministries, as well as local administration offices and others. Particularly with government tenders, where pre-announcements are a rarity, being in regular contact with local offices should reveal “tenders in the works” and when they are likely to be announced.

 

Consider Subcontracting—A possibility for small- to medium-sized companies that find it difficult to get past the ex-Soviet “bigger is better” mentality is to subcontract to companies that have been awarded large contracts. Awards are announced by the multilateral development banks in their procurement publications. This strategy will also help a company develop a working relationship with local authorities.

 

Resources

A first stop for a company interested in pursuing multilateral development bank opportunities is the Multilateral Development Bank Operations (MDBO) office in the Department of Commerce’s USA Trade Center [dial 1-800-USA-TRADE (872-8723) press 4 and then 7, or 202-482-3399]. The Department of Commerce’s U.S. and Foreign Commercial Service has commercial representatives in each of the multilateral development banks, as well as in embassies in many NIS cities. Information on Foreign Commercial Service offices in the NIS can be found at www.bisnis.doc.gov/bisnis/country/9910nis.htm.

 

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