DFAT’s Innovative Co-Creation Workshop
Perceptions around foreign aid and its benefits have drastically changed in recent years with aid representing an increasingly small proportion of development finance. Today, developing countries are accelerating rapidly and the focus has shifted away from direct development assistance to investing in and empowering local social enterprises to maximise their impact.
To meet this change and provide effective development opportunities, innovative and catalytic approaches are required. The Department of Foreign Affairs and Trade (DFAT) knew this when they trialled a new procurement process for their Frontier Brokers project, a key component of its Scaling Frontier Innovation initiative.
The Scaling Frontier Innovation program supports social enterprises to scale their development impact in the Indo-Pacific region. Frontier Brokers addresses weaknesses in the current entrepreneurial ecosystem by directing more appropriate types of capital to social enterprises so that they can scale their development impact. This project specifically focuses on gender inequality, aiming to uncover opportunities and unseen constraints that prevent equal access to financial and other support needed to grow a business. The intention is to focus on developing businesses that are solving problems in communities around the Asia Pacific by employing local people and contributing to a better, fairer and more prosperous future.
A new approach to procurement
DFAT took a collaborative, two-stage approach to procurement for Frontier Brokers, inviting active participation from potential providers via a submission process and an innovative co-creation workshop.
Following the submission stage, during which DFAT received 40 applications, 18 organisations were invited to Jakarta for a co-creation workshop. This group included a range of financial intermediaries, not-for-profits, consultants, and investor networks. DFAT partnered with Criterion Institute, a gender lens think tank, who helped design and facilitate the workshop.
Participants were led through a series of activities and discussions which included mapping current brokering activity in the region, deliberating potential solutions to gender inequality, exploring business models that are currently working and finalising the criteria for Frontier Brokers proposals.
The benefits of approaching procurement in this way include:
- The opportunity to leverage the expertise and experience of multiple ecosystem players to ensure that DFAT’s investment will address genuine constraints in the market.
- Obtaining a broad range of perspectives through brainstorming with an informed group of like-minded people who are working hard to push the brokering space forward.
- Developing tender requirements are realistic and can be implemented, having been informed by practitioners.
- Encouraging participants to consider how collaboration can drive innovation with a focus on gender equality without any pre-conceived ideas of what could or would be co-created.
- Signalling to participants how serious DFAT is about working with (and being guided by) the participants.
Challenges associated with collaborative procurement
What happens when you put 18 vendors in a room together and ask them to compete? Fortunately for DFAT, the workshop resulted in a successful procurement process and a positive outcome. But it was not without its challenges.
Participants had three key concerns walking into the room.
- Firstly, they were aware of the significant power dynamics at play. Some of the organisations in attendance had a history of trying and failing to partner.
- Secondly, participants knew the end game was to try and win a contract, so DFAT was wary of creating a competitive dynamic that would be non-conducive to productivity.
- Finally, participants were a little uncomfortable with the ambiguity of the whole process.
DFAT ensured the event was designed to address these apprehensions. All attendees were given background information on other attendees in advance of the workshop and were motivated to come prepared and informed. This provided the benefit of being able to focus on collaboration and innovation, instead of spending time on company introductions.
Getting buy-in from internal stakeholders was another challenge. Concerns were raised regarding probity, risk, compliance with the Commonwealth Procurement Rules, and change management about doing something that is not the norm within government departments. To address these concerns DFAT facilitated a number of information sessions during which they emphasised the benefits of this new approach, the pilot nature of the process, and the benefits of using experienced facilitators and subject-matter experts.
Collaboration is key
Heading into the workshop DFAT had anticipated awarding one procurement contract with a single, lead organisation. However, what resulted was a far more nuanced solution, proving the success of this collaborative approach and a consensus that it can be applied for future projects.
In terms of the delivery of the project itself, DFAT awarded contracts to four very different implementing partners to conduct experiments:
DFAT measured procurement success by the overall efficiency of idea to contract, market interest, market satisfaction, and final product quality. On all measures, Frontier Brokers performed better than our traditional procurement processes, for example, the idea to contract phase took about a third of the time as it would have through a normal process.
PASA Awards 2019
DFAT was shortlisted for the final round of judging for PASA’s “Breaking The Mould – Best example of non-traditional procurement” award. This award invited submissions from procurement teams in Australia and New Zealand and was designed to highlight and recognise procurement projects where there has been a demonstrably new, unique or non-traditional approach taken.
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