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MCC PRINCIPLES LOOKING FORWARD PROCUREMENT PROCESS What is MCC • The Millennium Challenge Corporation is a U.S. Government agency designed to reduce poverty through economic growth in select developing countries. Good governance Economic freedom Investments in people MCC’s Mandate Reduce poverty through economic growth • Created with bipartisan support by the U.S. Congress in 2004 • Led by a governing Board of Directors: • Secretary of State (Chair) • MCC Chief Executive Officer • Secretary of the Treasury • U.S. Trade Representative • USAID Administrator • Four members of the private sector Two Types of Programs MCC Compacts Threshold Programs • 5-year grants • 2- or 3-year grants • Large-scale and complex • Smaller in scale and objectives • Awarded to eligible countries as determined by MCC’s eligibility criteria and final vote of the MCC Board of Directors • Awarded to countries not compacteligible but committed to improving policy performance • $495 million awarded as Threshold grants • $8.8 billion awarded as compact grants • 24 partner countries in Latin America, Africa, Europe, the Middle East, Asia, and the Pacific (16 active compacts) • 21 partner countries in Latin America, Africa, Europe, the Middle East, and Asia (5 active) • Implemented by the partner country government with guidance and oversight from MCC • Implemented by MCC and USAID in consultation with the partner country government What’s Different About MCC Competitive selection Country-led design Country-led implementation Focus on results Country ownership Good policies Results matter Geographic Coverage Distribution of Investments Program Admin & Monitoring 11% Health, Education & Comm Servs 7% Transport 36% Governance 4% Energy 7% Financial Services 6% Water Supply & Sanitation 9% Agriculture 20% MCC PRINCIPLES LOOKING FORWARD PROCUREMENT PROCESS Zambia Water Sector Project $355 million total Procurement Timeframe Program Management Consultant 2012 Lusaka Water and Sanitation Projects – Works 2013 Lusaka Drainage Project – Works 2013–14 Technical Assistance Consultancies 2013 –14 Malawi Power Sector Project $350 million total Procurement Program Management Consultant Timeframe 2012 TA Consultancies 2012-13 Works (TX, DX, GX) 2014-15 Cape Verde II WASH Sector Project $41 million Procurement Study – WASH Sector Master Plan Technical Assistance – Project Management and Change Management (Sector/Utility Reform) Timeframe 2012 End 2012 Supervisory Engineer – Water and Sanitation Projects 2014-15 Small Works – Water and Sanitation Projects 2014-15 Indonesia PICTURE Green Prosperity (GP) Project $334 million Procurement Timeframe Project Arranger and Oversight Services 2012 Technical Assistance (TA) Consultants 2012 Land Use Planners 2012 Financial Facility Manager 2013 Program Management 2013 Contractors and Equipment Suppliers 2014 Engineers (design and works supervision) 2014 Compacts in Development Country Timeframe for MCA Procurements Sector Ghana II 2013-14 ? Benin II 2013-14 ? Georgia II 2013-14 ? El Salvador II 2013-14 ? MCC PRINCIPLES LOOKING FORWARD PROCUREMENT PROCESS 7/16/2015 This is a Footer MCC and MCA Opportunities – What, Where • • • Compact procurements Administered by MCA Entities. Contract opportunities – all untied – are published to: 1. http://www.mcc.gov/ 2. http://mcc.dgMarket.com/ 3. http://www.devbusiness.com/ • • • • Threshold procurements Administered by USAID. Most tied to US companies. Opportunities published to http://www.FedBizOpps.gov/ • • • • MCC corporate procurements Administered by MCC. Some tied to US companies. Opportunities published to http://www.FedBizOpps.gov/ 16 www.mcc.gov - A one-stop-shop for bidders Open, Planned & Awarded Opportunities at/above $200k all posted to http://www.mcc.gov/mcc/procurement/index.shtml 17 Typical Implementing Structure Sound Fiscal Accountability $$ MCC Common Payment System Government Fiscal Agent/ Funds Control MCC Rep Project Manager 1 Accountable Entity Project Manager 2 Procurement Agent Bank Account Project Manager 3 $$ Vendor Vendor Vendor 18 MCC Program Procurement Guidelines Fair Transparent Principles Competitive Open Similar to World Bank Procurement Guidelines with Important Exceptions: • No Geographic Preferences • US Prohibited Sources ineligible • US or Local Currency only 19 Standard Bidding Documents In Nov 2007, MCC decided to create Standard Bidding Documents for: • Small works • Consulting services • Design bid build • Design build • Goods • And others Why? • • • • • Consistent approach International standards known in the market: FIDIC Cost/price management Risks consistent from contract to contract A bidder on a road in Tanzania can count on the same general conditions of contract if/when they bid on a road in another country 20 Forms of Contract Large Works MCC has purchased licenses from the International Federation of Consulting Engineers (FIDIC) for large works: Design bid build (Red Book) Design build (Yellow Book) MCC General conditions – identical in all FIDIC contracts Conditions of Particular Application (COPAs) supplement and amend the General Conditions Small Works, Goods & Consulting services For these contracts MCC is using World Bank standards with minor accommodations to reflect MCC regulatory requirements. 21 MCC Program Procurement Guidelines: The Bid Challenge System First Level Review: Accountable/MCA Entity Second Level Review: Independent body 22 Lessons Learned • Beware reliance on couriers (DHL, FEDEX) for bid deliveries • Knowledge of local challenges – teaming is encouraged • Read the requirements! Ask questions! Submit EVERYTHING that is requested • Bid Security required – ensure it accompanies the bid • Advance Payment requires a bank guarantee • Performance Guarantees required from bank acceptable to the MCA entity – budget for them • Price reasonableness – low bid doesn’t always win if it doesn’t make sense • The SBD form contracts are MCC reviewed and approved – agree to them before bidding 23 MCC Model: A Fairer Playing Field • No preferences for U.S. or domestic contractors: Compacts are “untied” • Government Owned Enterprises (GOE) not eligible • Past experience and environmental, health, safety, labor standards matter • Open and competitive procurements • Award decisions made by technically qualified experts • Professional independent oversight of contract performance • All funds are obligated when Compacts enter into force • Contractors paid directly by USG through the Common Payment System • Checks and balances to guard against abusive discretion 24 For more information, visit www.mcc.gov.