Canadian consulting engineers belong to one of Canada’s most internationally successful industries, with smaller firms expanding overseas every year. Here, three of Canada’s gurus in the field provide practical advice on pursuing and bidding on overseas projects.
- Have a corporate plan that details your overseas goals. Most firms have proven project success at home before aiming to expand internationally.
- Have clear objectives about the types of projects to pursue, based on your firm’s key sectors of expertise and unique strengths.
- Develop a revenue target for each project and a marketing budget.
- Have an Integrity Management Policy (Code of Ethics/Conduct) and practices to ensure employees and agents avoid bribery and corruption.
- Evaluate staff needs for overseas projects and how to manage expatriate staff.
- Gather information on the countries considered, such as local competitors, economic growth and political risks. Make use of various government and trade association services, ranging from online market research to meetings with Canada’s trade commissioners.
- Evaluate the technical and contractual (cost) risks on a selected project.
- Evaluate the competition and selection process, and your probability of success – be both realistic and confident in your skills, and build relationships with potential partners.
- Visit your target country, perhaps through a trade mission or trade show – learn firsthand about customs, legal and regulatory environment. Do any employees know the language or is business done in English (French)? Understand customs/shipping and other supply chain vulnerabilities, i.e. deliveries can show up much later than expected or be missing key parts.
- Once you are serious about the project, weigh the expense of the proposal and project against your sense of the success rate and total project fee. (In Canada, proposal costs run from 2-5% of the fee on average; plan on twice that range for foreign project bids.)
- Analyze the proposed professional services agreement (contract) and compare it to the suggested content from FIDIC (International Federation of Consulting Engineers, fidic.org). Get legal advice on international contracts and clarify roles for local representatives.
- Make sure the project clearly indicates the scope of services required.
- Look into potential business partnerships to reduce costs and risks.
- Look into financial options, such as loans and deposits on fees (mobilization payments). Understand currency implications, tax and customs requirements, plus insurance on credit and political risks, bid and performance bonds – among the many tools EDC offers.
- Be aware of social and environmental issues in the target country and their impact on project parameters and costs.
Now if you decide to pursue the project, you’ll have a realistic estimate of the costs and effort needed to bring it to successful conclusion.
Four Ways to Go Global
- Piggyback: Seek a subcontract on an overseas project led by one of the Canadian or U.S. engineering giants; this is often the best way to learn the ropes, with little risk.
- Multilateral Development Agency Projects: Review and register for projects with: World Bank (worldbank.org), Asian Development Bank (adb.org), African Development Bank (afdb.org), Inter-American Development Bank (iadb.org).
- Direct proposal to foreign government or enterprise: Comes with higher risks and rewards.
- Acquire a foreign operation: Next possible step after gaining solid experience abroad.
John Boyd, Ben Novak and Andrew Steeves, principals of DFS (designfirmseminars.ca), together have over 90 years of design consulting experience with engineering, architecture and other firms across Canada and overseas. All have been executives at some of Canada’s global engineering consulting giants, are past Chairs of the Association of Consulting Engineering Companies-Canada (ACEC) and are involved with FIDIC.