Describes how major projects are secured and financed. Explains activities of the multilateral development banks in and other aid-funded projects.
Selling to the Government
Most government purchases in Bangladesh are through a procurement process established in partnership with the World Bank beginning in 2002. Technical and performance standards are established, tender notices published, and proposals reviewed in a structured manner, with proposals first reviewed for technical compliance and, for those that pass the technical review, on a price basis.
While intended to bring transparency to the procurement process, the system remains open to manipulation. Technical requirements can be written to direct purchases to the intended supplier or used to exclude proposals from unfavored companies. The window to submit proposals once a tender is released is often short, rewarding companies with inside knowledge of what is coming.
The Directorate General Defense Purchases (DGDP) oversees all military purchases, which are required by law to go through a Bangladeshi company, usually working in partnership with an overseas supplier.
U.S. companies bidding on Government tenders may also qualify for U.S. Government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international governments and government agencies. The Advocacy Center works closely with our network of the U.S. Commercial Service worldwide and inter-agency partners to ensure that exporters of U.S. products and services have the best possible chance of winning government contracts. Advocacy assistance can take many forms but often involves the U.S. Embassy or other U.S. Government agencies expressing support for the U.S. bidders directly to the foreign government. Consult Advocacy for Foreign Government Contracts for additional information.
Financing of Projects
With a low debt to GDP ratio, Bangladesh has good access to credit from international lenders. Major projects are often financed with concessional loans, although as its economy has expanded the country is increasingly using financing from multilateral development banks or the country’s financial sector. The Bangladesh bond market is under-developed and is not a major source of funding. Due to concerns over labor rights and worker safety, Congress has prohibited the U.S. Development Finance Corporation from investing in Bangladesh until conditions improve.
Multilateral Development Banks and Financing Government Sales. Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from the Multilateral Development Banks (MDB). A helpful guide for working with the MDBs is the Guide. The U.S. Department of Commerce’s (USDOC) International Trade Administration (ITA) has a Foreign Commercial Service Officer stationed at each of the five different Multilateral Development Banks (MDBs): the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the World Bank.
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