Prabhat Garg, MBA, PMP. Director, Program Procurement Policy

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1 Prabhat Garg, MBA, PMP Director, Program Procurement Policy

2 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

3 Two Types of Poverty Reduction Programs MCC Compacts 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 $7.9 billion awarded as compact grants 22 partner countries in Latin America, Africa, Europe, the Middle East, Asia, and the Pacific (19 active) Implemented by the partner country government with guidance and oversight from MCC Threshold Programs 2- or 3-year grants Smaller in scale and objectives Awarded to countries not compacteligible 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 (7 active) Implemented by MCC and USAID in consultation with the partner country government

4 Examples of MCC-Compact Funded Activities Agriculture and irrigation Transportation corridor infrastructure and road maintenance Water supply and sanitation infrastructure Healthcare infrastructure and health education Primary, secondary, and technical education infrastructure and training Microfinance, macro-finance and enterprise development Policy reform: Access to land and land rights Gender rights and economic integration Financial regulatory reform Anticorruption initiatives

5 Examples of MCC-Threshold Funded Activities Increasing control of corruption; Strengthening border management of Trade; Improved revenue administration; Support judicial capacity building; Legislative reforms; Bolstering girls education; Promoting equal access to land and increased land; Security and improving girls primary education enrollment; Enhancing efficiency and effectiveness of customs administration.

6 Where MCC Has Operated Since

7 Cape Verde: Roads and bridges

8 Armenia: Irrigation Canals

9 New MCC Compacts MCC signed three new compacts in 2010: Moldova - $262 million for agricultural development and transportation infrastructure Philippines - $434 million for transportation infrastructure, community development, and improvement of government services Jordan - $275 million for water and sanitation infrastructure Malawi Compact approved in Jan Zambia and Indonesia compact-eligible Ghana, Georgia, and Cape Verde eligible for second compacts

10 Compact procurements Administered by MCA Entities. Contract opportunities all untied are published to: Threshold procurements Administered by USAID. Most tied to US companies. Opportunities published to MCC corporate procurements Administered by MCC. Some tied to US companies. Opportunities published to 10

11 What MCC Funds $7.9 Billion in 22 Compacts Other Investments, ~25% Admin, ~10% Infrastructure, ~65% Transport, 56% Irrigation, 13% Water, 14% Facilities, 11% Energy, 6% In the pipeline: Malawi, Zambia, Indonesia; 2 nd Compacts for Cape Verde, Georgia, Ghana 11

12 Infrastructure -- Services Procured By MCC Due Diligence Support Feasibility Studies, EIAs, RAPs Independent Engineering Services Specialty Consulting By MCAs Project Management Consulting Feasibility Studies SEAs, EIAs, RAPs Design & Preparation of Bidding Documents Construction Supervision Construction Specialty Consulting 12

13 A one-stop-shop for bidders Open, Planned & Awarded Opportunities at/above $200k all posted to 13

14 Compact Implementing Structure Ensures Sound Fiscal Accountability MCC $$ Washington, DC MCC Resident Mission Host Country Government Accountable Entity (MCA) Fiscal Agent/ Funds Control Procurement Agent Bank Account Common Payment System (Paid from US Treasury) Project Manager 1 Project Manager 2 Project Manager 3 $$ Contractor Contractor Contractor 14

15 Contractor Nationality of all MCC and MCA-Funded Contracts as of August 31, 2010 (Contracts above $50,000) Israel, $35,747,360, 1% Ireland, $39,976,134, 1% United Kingdom, $42,249,413, 1% Korea, South, $43,939,350, 1% India, $57,629,731, 2% El Salvador, $75,625,719, 2% Armenia, $80,701,127, 2% Italy, $84,207,483, 2% Azerbaijan, $97,414,824, 3% Honduras, $108,507,699, 3% Netherlands, $113,572,989, 3% Morocco, $117,695,777, 3% 39 Additional Nationalities, $531,634,340, 16% Ghana, $123,457,097, 4% Canada, $144,763,852, 4% United States, $602,290,504, 18% China, $320,013,156, 9% France, $288,937,104, 8% Costa Rica, $200,987,795, 6% Germany, $156,793,452, 5% Portugal, $146,053,786, 4% 15

16 MCC Model: A More Level Playing Field No preferences for U.S. or domestic contractors: Compacts are untied. Past experience, environmental, health, safety, labor standards matter. 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. Procurements include Bid Challenge System, and contracts include dispute resolution mechanisms. 16

17 MCC Procurement Principles Open, fair and competitive procedures Solicitations based on clear and accurate descriptions Contracts awarded only to responsible suppliers and contractors No more than a commercially reasonable price shall be paid 17

18 MCC Procurement Principles MCC Excludes Government-owned Enterprises from Competing for MCC-Funded Contracts; MCC uses its own Procurement Guidelines which are based on the World Bank procurement guidelines, with important exceptions and differences; MCC insists on a fair and transparent Bid Challenge System. MCC uses its own Standard Bidding Documents, which include FIDIC contracts for works. 18

19 Upcoming Opportunities as of March 2011 Indonesia (expected to be signed 2011) Provincial assessment of opportunities for alternative economic activities / low carbon development (April 2011); Possible management of vocational education program (June 2011); Possible management of procurement modernization program (August 2011) 19

20 Upcoming Opportunities as of March 2011 Philippines: Vehicles, equipment (April 2011); Environment Consulting (April 2011) Project management for road construction consulting (April 2011) Road construction works (2012) 20

21 Thank You, Prabhat Garg, MBA, PMP Director, Program Procurement Policy

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