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

oversight 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

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.