The Millennium Challenge Corporation is a U.S. Government agency - - PowerPoint PPT Presentation

MCC PRINCIPLES MCC PROCUREMENT PROCESSES LOOKING FORWARD

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 Investments in people Economic freedom

• 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

MCC’s mandate: Reduce poverty through economic growth.

TWO TYPES OF PROGRAMS MCC Compacts Threshold Programs

• 5-year grants
• Large-scale and complex
• Awarded to eligible countries as

determined by MCC’s eligibility criteria and final vote of the MCC Board of Directors

• $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)

• Implemented by the partner country

government with guidance and

• versight from MCC
• 2- or 3-year grants
• Smaller in scale and objectives
• Awarded to countries not compact-

eligible but committed to improving policy performance

• $495 million awarded as Threshold

grants

• 21 partner countries in Latin America,

Africa, Europe, the Middle East, and Asia (5 active)

• 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

DISTRIBUTION OF INVESTMENTS

Transport 36% Agriculture 20% Water Supply & Sanitation 9% Financial Services 6% Energy 7% Governance 4% Health, Education & Comm Servs 7% Program Admin & Monitoring 11%

MCC PRINCIPLES MCC PROCUREMENT PROCESSES LOOKING FORWARD

10

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/

PROCUREMENT PROCESS

INFRASTRUCTURE – WORKS & SERVICES PROCURED (1)

By MCC

• Due Diligence Support
• Feasibility Studies, Design &

Preparation of Bidding Documents, EIAs, RAPs

• Independent Engineering

Services (implementation support and oversight)

• Specialty Consulting

By MCAs

• Project Management

Consulting

• Feasibility Studies
• SEAs, EIAs, RAPs
• Design & Preparation of

Bidding Documents

• Construction Supervision
• Construction
• Specialty Consulting

INFRASTRUCTURE – WORKS & SERVICES PROCURED (2)

By MCC

• MCC may act as the

procurement agent for a country but does not directly execute those works, goods and services contracts

• MCC procurements follows

Federal Acquisition Regulation

• For engineering services, MCC

follows Qualifications Based Selection (Brooks Act)

• For non-engineering services,

MCC follows Qualifications and Cost Based Selection

By MCAs

• Follow MCC’s Procurement

Guidelines

• Any large works or services

contracts are procured through international competitive bidding

• Services typically use

Qualifications and Cost Based Selection

• Works use Cost Based Selection,

however, the lowest cost provider is only selected if it meets the selection criteria

13

www.MCC.gov: One-stop-shop for Bidders

Open, Planned & Awarded Opportunities at/above $200k all posted to http://www.mcc.gov/pages/business

PROCUREMENT OPPORTUNITIES

14

http://www.mcc.gov/business/compactprocurements

COMPACT IMPLEMENTATION STRUCTURE

MCC

Washington, DC

MCC

Resident Mission

Host Country Government $$ $$ Project Manager 1 Accountable Entity (MCA) Project Manager 2 Contractor Contractor Contractor Procurement Agent Fiscal Agent/ Funds Control Project Manager 3 Common Payment System

(Paid from US Treasury)

Bank Account

Ensures Sound Fiscal Accountability

MCC PRINCIPLES MCC PROCUREMENT PROCESSES LOOKING FORWARD

Procurement Timeframe Project Management Consultant 2012 Lusaka Water and Sanitation Projects – Works 2013 Lusaka Drainage Project – Works 2013–14 Technical Assistance Consultancies 2013 –14

THE ZAMBIA COMPACT

Water Sector Project $355 million total

Procurement Timeframe Study – WASH Sector Master Plan 2012 Technical Assistance – Project Management and Change Management (Sector/Utility Reform) End 2012 Supervisory Engineer – Water and Sanitation Projects 2014-15

THE CAPE VERDE II COMPACT

WASH Sector Project $41 million total

Small Works – Water and Sanitation Projects 2014-15

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

THE INDONESIA COMPACT

Green Prosperity (GP) Project $334 million total

PICTURE

Country MCA Procurements’ Timeframe Malawi (possible restart) 2012-13 Ghana II 2013-14 Benin II 2013-14 Georgia II 2013-14 El Salvador II 2013-14 COMPACTS IN DEVELOPMENT

OBSERVATIONS ON USING FIDIC IN AFRICA (1)

Successes

• Projects using both Red and Yellow Book contract forms have been completed well
• MCC Standard Bidding Documents using FIDIC contracts have resulted in robust

competition in many cases

• When high quality engineering staff have implemented projects, the outcomes have

met contractual and reasonable expectations of Employers

• Adding Project Management Consultants has improved Employer responsiveness to

site consultants and contractors

• MCC oversight from its staff and independent engineers has provided valuable extra

support in low capacity environments

OBSERVATIONS ON USING FIDIC IN AFRICA (2)

Challenges

• Poor performance in too many cases by engineering firms has contributed to cost
• verruns and schedule delays. Typical problems include:
• Inadequate understanding of FIDIC processes (even for those whose qualifications

state such experience)

• - Little or no quality assurance by engineering firms for design or supervision

services

• - Understaffing against contractually agreed levels
• Numerous contractors have ignored requirements to provide timely work plans,

appropriate methodologies and adequate quality control

• No mechanism to prevent delayed claims submissions to DABs has impacted

effective budget management

• Difficulties in reducing costs through appropriate variation orders in Red Book

contracts when more efficient construction methods could be applied

For more information, visit www.mcc.gov.