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 Economic Investments freedom 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 Awarded to countries not compact- determined by MCC’s eligibility criteria eligible but committed to improving and final vote of the MCC Board of policy performance Directors • $495 million awarded as Threshold • $8.8 billion awarded as compact grants grants • • 24 partner countries in Latin America, 21 partner countries in Latin America, Africa, Europe, the Middle East, Asia, Africa, Europe, the Middle East, and and the Pacific (16 active compacts) Asia (5 active) • Implemented by the partner country • Implemented by MCC and USAID in government with guidance and consultation with the partner country oversight from MCC government
WHAT’S DIFFERENT ABOUT MCC? Competitive selection Country-led design Country-led implementation Focus on results
DISTRIBUTION OF INVESTMENTS Program Admin & Monitoring 11% Health, Education & Transport 36% Comm Servs 7% Governance 4% Energy 7% Financial Services 6% Water Supply & Agriculture 20% Sanitation 9%
MCC PRINCIPLES MCC PROCUREMENT PROCESSES LOOKING FORWARD
PROCUREMENT PROCESS 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/ 10
INFRASTRUCTURE – WORKS & SERVICES PROCURED (1) By MCAs By MCC • Project Management • Due Diligence Support Consulting • Feasibility Studies, Design & • Feasibility Studies Preparation of Bidding Documents, EIAs, RAPs • SEAs, EIAs, RAPs • Independent Engineering • Design & Preparation of Services (implementation Bidding Documents support and oversight) • Construction Supervision • Specialty Consulting • Construction • Specialty Consulting
INFRASTRUCTURE – WORKS & SERVICES PROCURED (2) By MCC By MCAs • MCC may act as the • Follow MCC’s Procurement procurement agent for a Guidelines country but does not directly • Any large works or services execute those works, goods contracts are procured and services contracts through international • MCC procurements follows competitive bidding Federal Acquisition Regulation • Services typically use Qualifications and Cost Based • For engineering services, MCC Selection follows Qualifications Based • Works use Cost Based Selection, Selection (Brooks Act) however, the lowest cost • For non-engineering services, provider is only selected if it MCC follows Qualifications meets the selection criteria and Cost Based Selection
www.MCC.gov: One-stop-shop for Bidders Open, Planned & Awarded Opportunities at/above $200k all posted to http://www.mcc.gov/pages/business 13
PROCUREMENT OPPORTUNITIES http://www.mcc.gov/business/compactprocurements 14
COMPACT IMPLEMENTATION STRUCTURE $$ MCC Washington, DC Common Host Country Payment Government Fiscal Agent/ System Funds Control ( Paid from MCC US Treasury) Accountable Resident Entity (MCA) Mission Procurement Bank Agent Account Project Project Project Manager 3 Manager 1 Manager 2 $$ Contractor Contractor Contractor Ensures Sound Fiscal Accountability
MCC PRINCIPLES MCC PROCUREMENT PROCESSES LOOKING FORWARD
THE ZAMBIA COMPACT Water Sector Project $355 million total Procurement Timeframe Project Management Consultant 2012 Lusaka Water and Sanitation Projects – Works 2013 Lusaka Drainage Project – Works 2013 – 14 2013 – 14 Technical Assistance Consultancies
THE CAPE VERDE II COMPACT WASH Sector Project $41 million total Procurement Timeframe Study – WASH Sector Master Plan 2012 Technical Assistance – Project Management and End 2012 Change Management (Sector/Utility Reform) Supervisory Engineer – Water and Sanitation 2014-15 Projects Small Works – Water and Sanitation Projects 2014-15
THE INDONESIA COMPACT PICTURE Green Prosperity (GP) Project $334 million total 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 MCA Procurements’ Timeframe Country Malawi (possible restart) 2012-13 Ghana II 2013-14 Benin II 2013-14 Georgia II 2013-14 El Salvador II 2013-14
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 overruns 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.
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