Peace Dividend Trust completes survey of Haitian supply chain
By David Einhorn
With aid dollars finally flowing in Haiti, a groundbreaking survey of the country’s critical construction sector finds that Haitian businesses are playing a major role in the rebuilding effort.
“Haitian entrepreneurs can compete. More importantly, only Haitian entrepreneurs can break the cycle of aid and poverty,” stated Scott Gilmore, Chief Executive Officer of Peace Dividend Trust, which conducted the survey. It is the only publicly available assessment of the construction sector in Haiti since the earthquake.
The number of Haitian construction firms that have won contracts with international organizations has jumped from 25% to 45% since the quake. The survey also identified practices both by international organizations and local firms that are preventing more local procurement and inhibiting its positive impact on employment and investment. PDT interviewed more than 300 local companies and 33 procurement officers for the survey about bidding procedures, local market trends, and barriers to local contracting.
An estimated $504 million has been spent on construction projects, representing a third of aid contributions to Haiti since January 2010. Aid money has hit the ground more rapidly since Haiti installed its new government in October 2011, and demand for construction materials and services is expected to remain high for years to come.
“Haiti is like a small town—word gets around fast,” said Sasha Blanchet of General Maintenance, a Haitian firm hired by World Vision for school construction projects. “Once we had that first contract, we had the leverage to go out and attract other jobs.”
Jean Gerard of TEMPO Construction reported his local firm is “getting requests daily” since it was subcontracted by USAID to construct a temporary Haitian Parliament building to replace the one that collapsed during the earthquake.
The PDT survey was conducted from May to August 2011 in metropolitan Port-au-Prince. The report and a summary of it can be accessed HERE or…
The key findings are:
• Most local businesses report delays in getting paid, while most international organizations do not give advance payments. These are factors that could affect the ability of credit-constrained companies to do business
• Small firms are winning fewer contracts from international organizations—procurement officers have difficulty finding such companies, and they in turn find international organizations difficult to work with.
• Most procurement officers think the local market cannot deliver high-quality technical work without supervision and guidance, yet most businesses believe they can deliver whatever is expected of them
• Procurement officers say they are willing to answer questions about bidding processes, but most Haitian firms say they have little contact with international organizations before or after contracts are awarded.
The survey includes recommendations to increase local procurement and its impact. PDT recommends that international organizations:
• Prioritize prompt payment to contractors and offer advances to ease the credit crunch faced by local firms
• Unbundle large contracts to make it easier for smaller firms to compete
• Facilitate local bidding by producing all documents in French
• Extend tender submission deadlines in order to increase the quality and quantity of local bids.
PDT recommends that Haitian businesses:
• Offer more detailed information in bids on past performance, goods to be provided, personnel requirements, and financial planning capacity
• Partner with other businesses to reduce overhead and better provide contract-specific goods and services
• Monitor market trends and stock up on materials that are in demand
• Proactively seek feedback when they don’t win a contract in order to strengthen future bids.
PDT also recommends that both buyers and suppliers fully exploit the free services available through Peace Dividend Marketplace – Haiti (PDM-H) until June 2012, thanks to funding received from the Canadian International Development Agency (CIDA). This includes an online business directory, matchmaking services, tender distribution, and training. For more information about PDM-H please visit http://haiti.buildingmarkets.org/
About Peace Dividend Trust (PDT)
Mission: To build markets, create jobs and sustain peace in developing countries by championing local entrepreneurs and connecting them to new business opportunities.
Vision: Peace Dividend Trust believes that opportunity is the antidote to poverty. Opportunity is created when local entrepreneurs fulfill their potential and businesses are viable. As a result, countries are no longer dependent on humanitarian aid, but instead become hubs of market investment. Peace Dividend Trust moves developing countries from aid to investment by supporting local entrepreneurs, building marketplaces and accelerating economic growth.