BDS market development guide.pdf - PACA

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Unfortunately, there is no ideal organizational or institutional form for BDS provision, the
market is complex and will vary widely from place to place. Therefore, selecting partners
almost inevitably has a considerable element of trial and error and needs to be grounded on
the basis of what works in any given context.
Partner selection can be of the following types:
# Relationship-based (personal knowledge and recommendation);
# Tendering process; and
# Market research.
Relationship-based Selection
Partners can be identified through the personal knowledge, existing networks, and
acquaintances of donors and facilitators. This approach has much to commend it; it is cheap,
working relations may already exist, and uncertainty can be reduced. It does have drawbacks:
• It limits the field of selection both in terms of geographic area and the range of potential
partners—you only work with those known to you.
• There is some risk of continuing established relationships and expectations. This is
particularly problematic if a donor or facilitator has a high profile or a history of more
conventional or social development assistance 37 .
This approach to partner selection also underlines the importance of donor/facilitators being
business-like themselves, developing linkages and maintaining networks in the marketplace,
and not operating from the confines of a developmental vacuum.
Tender-based Selection
Borrowed from the corporate world, a tender-based approach invites applications to bid for
donor/facilitator support. In an open or competitive tender, opportunities to apply are
advertised, tender documents are drawn up and made available for a fee payable on
application, selection criteria and processes are established, and selections are made on the
basis of information provided and qualitative assessments. This kind of selection process
allows a wider range of applicants to be considered and is particularly suitable when
knowledge of an area or field is limited. It can also allow the donor/facilitator to project a
business-like, focused image and reduce the scope for unrealistic expectations on the part of
partners, which is often a risk when donor funds are involved. 38
37 Many traditional BDS partners of donor agencies accustomed to working in a particular way and at a
particular pace will certainly not be able to change to play the demand-oriented role necessary for success in
a BDS market.
38 Tenders or work orders have used by DAI in its BDS program in the Ukraine to induce trial of services and
stimulate new provider entrants into serving SMEs instead of larger firms. DAI’s experience with work
Microenterprise Best Practices
Development Alternatives, Inc.