Development 2014 Conference Intelligence Report

Council of International Development Companies

The CIDC Annual Conference

Intelligence Report

Professional Services Council

The Voice of the Government Services Industry

Dear Readers PSC is pleased to present Development 2014: The CIDC Annual Conference Intelligence Report, a comprehensive guide to the key discussions held at the conference.

In this report covering our second CIDC Annual Conference, we’ll recount what happened when we gathered more than 200 industry and government executives to hear the first industry speech by USAID’s new Deputy Administrator Alfonso Lenhardt, to discuss key trends affecting the international development market, and to explore the shifting donor base and its impacts on the role of traditional international development companies.

I want to thank our sponsors and conference presenters for making this event possible.

It is only with their support that we are able to put on such a great event and make real progress toward a productive governmentindustry partnership. You’ll find a list of our sponsors in the pages that follow.

At the conclusion of the CIDC Conference, I passed the chair’s gavel to my good friend Susanna Mudge, president and CEO of Chemonics. She will continue our work to advance our priorities to maintain a constructive dialogue with USAID, help to fix the procurement system, ensure that appropriate contracting mechanisms are selected, and support the agency’s innovation agenda. Her first meeting at the helm of the CIDC is January 15, 2015.

Table of Contents 3

Sponsors & Partners

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Opening Keynote

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Congressional Address The Development Market: Key Trends & Dynamics The Shifting Donor Base

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Conference Follow-up

About CIDC The PSC Council of International Development Companies (CIDC) creates a dynamic and sustainable advocacy platform for development companies to pursue thought leadership and high-level dialogue with USAID; educate audiences on the vital role our firms play in achieving accountable, transparent, and sustainable development results in support of U.S. national security, economic, and humanitarian goals overseas; and inform and advocate on contracting, regulatory, legislative, business process, and business development issues.

Visit www.CIDC.us

It has been a pleasure serving as your CIDC chairman and I look forward to working with Susi and the CIDC in 2015.

Council of International Development Companies

Jim Boomgard President & CEO, DAI

Articles by Elise Castelli • Senior Manager, Media Relations and Publications, PSC Photos by Bryan Bowman • Senior Manager, Marketing, PSC Design & Layout by Ivory Smith • Marketing Associate, PSC

Sponsors & Partners We are proud to have had such a strong gathering of the international development community represented at Development 2014: The CIDC Annual Conference. The conference was a great success due to the hard work and support of our entire Council of International Development Companies, especially our sponsors and partners.

Premier Sponsors

Media Partner

Conference Essentials Sponsors Bottled Water

Abt Associates Development and Training Services, Inc. (dTS)

Coffee & Break Service

Berkeley Research Group, LLC ICF International

Breakfast

Creative Associates International Development InfoStructure, Inc. (Devis)

Technology Access

Engility International Development

Keynote Address

University Research Co., LLC

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Keynote Address: New Deputy USAID Administrator Pledges Partnership Tweets from Development 2014

Companies wanting to sleep@night should invest in communities + run those projects like they do the biz. @1977Creative

September. The position was vacant for 14 months before he was confirmed. In his new role, he pledged to “work to make sure our partnerships are more nimble and creative.”

“Working hand-in-hand with all of you helps us achieve our agency’s mission of ending extreme poverty and building democracies,” said Lenhardt.

“We do not do any of this work by ourselves.”

Partnership is a key part of USAID’s new development model, which is deeply rooted in innovation and will result in “scores of creative new partnerships” to transform both how the community works together and the results achieved, he said.

Under the new model, USAID and its implementing partners can “build vibrant economies” and “pathways out of poverty for the most vulnerable in the world,” he said.

“Our success is possible because of our focus on innovation, collaboration and teamwork,” Lenhardt said. “It took the work of USAID, local leaders and implementing partners to tailor cutting-edge solutions that had a lasting and tangible impact.”

Lenhardt has been on the job at USAID since

“Our mission statement starts with the words ‘we partner’ because together we can deliver the best, most sustainable, results possible for our partner countries and the United States,” Lenhardt said. “As you work to make the world a better place you secure the security and economic vitality of these United States.” ◘

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Your participation is essential in building enduring progress in the world’s most vulnerable communities.

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eputy USAID Administrator Alfonso Lenhardt pledged even greater partnership between USAID and its implementing partners to tackle the developing world’s most pressing problems, during his keynote speech at Development 2014: The CIDC Annual Conference.

“Your participation is essential in building enduring progress in the world’s most vulnerable communities,” the former ambassador to Tanzania said.

—Alfonso Lenhardt 4

Congressional Address: U.S. Senator Kaine Talks Importance of Funding International Development Tweets from Development 2014 21st Century US leadership requires a balance of factors.

Development is one of the pieces. @MikeStaresinic

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enator Tim Kaine, D-Va., addressed the effects the government’s budget challenges may have on international development companies, in his address at Development 2014: The CIDC Annual Conference.

Kaine pledged to work toward sequestration relief for the fiscal years 2016 and 2017 budgets that will be similar to the relief negotiated for fiscal years 2014 and 2015. “It is unrealistic to say we’ll get rid of sequester, but we can get relief,” he assured the attendees.

“It is really important for you to be together on this to make this case not only for sequester relief in general, but for the value of international development,” Kaine said.

Calling international development companies “a key pillar” of U.S. global leadership, Kaine said that it is important to continue to fund the critical missions of USAID and the State Department.

“Everyone in the development world are ‘small a’ ambassadors for the United States,” said Kaine, a former missionary who has a keen interest in foreign assistance. “America is as needed in the 21st century as it was in the 20th and the development piece is getting more important not less.” ◘

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Everyone in the development world are ‘small a’ ambassadors for the United States.

—U.S. Senator Tim Kaine 5

The Development Market: Key Trends & Dynamics

Panelists (from left): Stan Soloway, President & CEO, PSC (Moderator); Kate Eltrich, Partner, Sixkiller Consulting; Denis O’Brien, Chairman, Digicel Group; Jorge Uquillas, Quantitative Analyst, Bloomberg Government.

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udget uncertainty continues to plague the government market, but new sources of revenue are creating opportunities for development firms in the short and long term, according to a Development 2014 panel of experts exploring the trends and dynamics of the international development market.

From 2008 to 2014, the value of foreign assistance contracts has decreased by 50 percent, while the number of companies competing for the work has gone up 50 percent, said Jorge Uquillas, a quantitative analyst for Bloomberg Government.

At the same time, the traditional foreign assistance budget remains relatively flat, seeing just a 2 percent increase, said Kate Eltrich, a partner with Sixkiller Consulting.

But despite this lean budget environment, the panelists see room for growth. The government has added foreign assistance projects to the Overseas Contingency Operations (OCO) budget that should

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provide some near-term relief, Eltrich said. However, “as you shift spending to OCO/crisis funding, it makes it a lot easier for that money to disappear,” Uquillas warned.

Another area of opportunity for international development firms comes from outside of the government. Multinational firms are increasingly funding international development work in the countries where they do business, said Denis O’Brien, chairman of Digicel Group, a multinational firm funding development projects around the world. As companies look to be more responsible and do the right thing in the markets where they’re making profits, they’re turning to development specialists like CIDC members to implement their projects, O’Brien said. Development firms have the skills needed to ensure the multinational firms’ investments are successful, he said. ◘

As you shift spending to OCO/crisis funding, it makes it a lot easier for that money to disappear.

—Jorge Uquillas

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The Shifting Donor Base Panelists (clockwise from top left): Raj Kumar, President & Editor-in-Chief, DEVEX (Moderator); Dr. Trevor Gunn, Managing Director, International Relations, Medtronic; Beth Heider, Chief Sustainability Officer, Skanska USA; Charito Kruvant, Co-Founder & CEO, Creative Associates International; Susan Rae Ross, CEO & Co-Founder of SR International, Author, Expanding the Pie.

multinationals understand in order to prove that for-profit development firms can be worthy partners in achieving the multinationals’ development goals, she said.

Multinational funding of international development is more than just philanthropy, it is about furthering the missions of their companies and building capacity in new markets, said Dr. Trevor Gunn, managing director of international relations for Medtronic. For his company, building local capacity to manufacture its devices is about driving down the cost of care in the developing world and expanding access to modern health solutions there.

Similarly, while the majority of Skanska USA’s customers are in the developed world, the source of its materials are in the emerging world, said Beth Heider, Skanska USA’s chief sustainability officer. There is a growing understanding among multinationals that the physical, economic, societal and environmental health of the regions where the goods are sourced affects their businesses, she said.

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s the world economy forces nations to continue tightening belts, foreign assistance funding has taken a hit. In the United States, USAID is the favorite target in tough budgetary times. But as nations like the United Kingdom pull out of countries like India, the market is seeing a new group of players—multinational corporations— stepping in to fill the funding gap. And that provides new opportunities for well-positioned international development companies (IDCs), a panel of experts said at Development 2014.

Charito Kruvant, the co-founder and CEO of Creative Associates International, an international development firm, said that her company has been rethinking its business model as traditional development donors like USAID face budget challenges. The company is translating its government experiences into language the

Kruvant calls this understanding the “triple bottom line.” More than profits, all companies recognize that there is a real and important value to societal (government, economic, health care, education, etc.) stability and environmental sustainability generated by their work.

In order to assist multinationals, IDCs need to conduct market research and understand where within the corporations the funding is coming from, said Susan Rae Ross, CEO and founder of SR International and author of “Expanding the Pie: Fostering Non-profit and Corporate Partnerships.”

IDCs also need to demonstrate to multinationals the value of IDC’s assets, such as presence in many countries, relationships with in-country leaders, and more, to help them understand how a partnership with IDCs will accelerate goal achievement.

In turn, to be good partners with IDCs, multinationals need to recognize that IDCs need to be paid promptly because they don’t have “a bottomline that is endless,” Kruvant said. ◘ 7

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