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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.
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