Chaim Poran - Directrouter.com

MCC’s Infrastructure Investments
and
Related Business Opportunities
Prepared for
SAME Webinar – April 26, 2012
Presented by
Chaim J. Poran, PhD, PE
Director, Infrastructure
cporan@mcc.gov

• Section I: MCC Overview
• Section II: Procurement Process
• Section III: Upcoming Business Opportunities
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• The Millennium Challenge Corporation (MCC) is an
innovative and independent U.S. foreign aid agency
exclusively funded by the US Congress in January 2004
that is helping lead the fight against global poverty.
• Focusing on reducing poverty through economic
growth, MCC is managed by a Chief Executive Officer,
who is part of a nine-member Board of Directors. The
Secretary of State, the Secretary of the Treasury, the
U.S. Trade Representative, and the USAID Administrator
serve on the board along with four private sector
representatives.
3

So… what is MCC
• MCC, as a US Government (USG) agency, is designed to
reduce poverty through economic growth in select number of
developing countries mostly Low Income Countries (LIC) and
some Low-Middle Income Countries (LMIC).
• Limited domain
• Limited time
Good
governance
Economic
freedom
Investments
in people
4

Limited Timeline:
Phases of Compact Development
and Implementation
and their Respective Timeline
About 2 – 3 years

MCC’s Three Core Principles
1. Good Policies Matter
• Support countries who can use
assistance effectively
• Spur private investment and increased
trade, the real engines of growth
2. Country Ownership
• Increases responsibility
• Builds capacity
• Yields better results
3. Focus on Results
• Increase accountability
• Contribute to development success
6

Competitive Selection
• MCC Board examines country performance based on 20 independent
indicators
• Policy indicator categories:
• Ruling justly
• Investing in people
• Economic freedom
• Selection and continued eligibility
are based on policy performance
7

MCC Scorecards
Sample indicators:
• Civil liberties
• Control of
Corruption
• Immunization
rates
• Health and
education
expenditures
• Natural
resource
management
• Land rights and
access
• Number of days
to start a
business
• Inflation rate
Indicator data sources: World Bank Institute, International Monetary Fund, Freedom House,
WHO, UNESCO, Heritage Foundation, International Finance Corporation
8

Where MCC Has Operated Since 2004
9

Where is MCC today
23 Compacts signed to date with about $9
billion committed in compact funding
20 Countries in the Threshold program
with about $500 million committed
Focused on implementation and results
Part of America’s “smart power” global
engagement
An important part of the future of US
foreign aid
10

Focus on Monitoring and Evaluation
of MCC’S “SMART AID” Results
• Pre-compact economic
assessments
•Economic rates of return
per project (ERR)
•Beneficiary analyses –
project must result in raised
incomes
• Performance monitoring and
adjustments/re-scoping as
needed
• Independent third-party
impact evaluations
11

What MCC Funds
About $9 Billion in 24 Compacts
Other
Investments,
~25%
Admin, ~10%
Infrastructure,
~65%
Transport, 56%
Irrigation, 13%
Water, 14%
Facilities, 11%
Energy, 6%
In the pipeline: Zambia (just approved by the BoD);
2 nd Compacts for Cape Verde (signed), Georgia, Ghana, El Salvador and Benin
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• Section I: MCC Overview
• Section II: Procurement Process
• Section III: Upcoming Business Opportunities
13

MCC PROCUREMENTS
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/
MCC corporate procurements
• Administered by MCC.
• Some tied to US companies.
• Opportunities published to
http://www.FedBizOpps.gov/
14

How to do business with MCC
• Take part in MCAs procurements in MCC’s
countries conducted by the MCAs according
to MCC procurement guidelines ICB
(modified from World Bank guidelines)
• Take part in MCC procurements conducted by MCC
head office procurements according to FAR
– ID/IQ Call completed for 2010 – 2015
– Other calls
• As an ID/IQ contractor to the USACE, participate through
MCC’s Support Agreement (SA) with the USACE, or other
interagency agreements.
15

MCC’s A/E IDIQ Prime and Sub contractors
Period of Performance: 7/28/2010-6/29/2015
PRIME CONTRACTOR
Tetra Tech, Inc
URS Group
AECOM Technical Services
MHW Americas
Environmental Resources
Management
Jacobs Government Service
Company
The Louis Berger Group
SNC - Lavalin International
SUBCONTRACTORS
Associates in Rural Development; Wilbur Smith Associates
Nathan Associates; Development Alternatives Inc; Social and
Strategic Assessment; Sheladia Associates Inc
AECOM International Development
Baker; HNTB; GRM; IRG;TEC; Dexis; UBR; TMG; Naomi
Cassirer
Scott Wilson Ltd
Arcus Gibb; Development Finance International; Garry
Struthers Associates; Hardie Industries; Integral; John Bond
Agland Investment Services; Development & Training
Services; Nexant, Inc; The Urban Institute; Bob Hefferon;
David Moore
TEC, Inc
AMEC; Egis BCEOM; Perkins Eastman; Power Engineering;
Enertech; Ricondo; Zeta-Tech; AMIS
Roche LTEE Groupe-Counceil
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MCC’s Compact Program
Unique MCC Characteristics
• MCC signs a Compact with the eligible country. The Compact details the
projects to be funded and the implementing arrangements.
• MCC eligible countries form entities (e.g. MCA-Indonesia) which are
responsible for implementing the Compact and selecting contractors.
• Compact funds must be spent within 5 years.
Attractions for Private Sector
• Countries qualify for MCC assistance by supporting an environment
conducive for private sector led growth including control of corruption.
• At “entry into force” of the Compact all funding is obligated, reducing risk to
implementers.
• Vendors paid directly by USG through the Common Payment System
(CPS).
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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,
Morocco, 3%
$117,695,777, 3%
Ghana,
$123,457,097, 4%
39 Additional
Nationalities,
$531,634,340, 16%
Canada,
$144,763,852, 4%
United States,
$602,290,504, 18%
China,
$320,013,156, 9%
Portugal,
$146,053,786, 4%
France,
$288,937,104,
8%
Costa Rica,
$200,987,795, 6%
Germany,
$156,793,452, 5%
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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 Works
• Specialty Consulting
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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 (CPS).
• Checks and balances to guard against abusive discretion.
• Procurements include Bid Challenge System, and contracts include
dispute resolution mechanisms.
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Compact Implementing Structure
Ensures Sound Fiscal Accountability
MCC
$$
Washington, DC
MCC
Resident
Mission
Host Country
Government
Accountable
Entity (MCA)
Fiscal Agent/
Funds Control
Procurement
Agent
Bank
Account
Common
Payment
System
(Paid from
US Treasury)
PM or CS 1
PM or CS 2
PM or CS 3
$$
Contractor
Contractor
Contractor
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Evaluation Criteria
Eligibility
• No conflicts of
interest
• No GOEs
• Any nationality (with
few restrictions)
• No debarred and
excluded parties
• No history of nonperforming
contracts or of
litigation
• Other disqualifiers
Technical
• General, similar &
specific experience
• Environmental and social
documents
• Health and safety
documents
• Technical offer – work
program, method
statement, cash flow
projection
• Construction equipment
• Project management
organization & personnel
Financial
• Audited financial
statements
• Size (turnover) in
relation to contract
• Financial ratios
(current ratio, debt
ratio)
• Financial resources
(cash flow
requirement)
• Able to obtain
securities (bid,
performance,
advance payment)
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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
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Lessons Learned
• Beware reliance on couriers (DHL, FEDEX) for bid deliveries
• IT IS A MCA CONTRACT, SO BE PREPARED TO DIRECTLY DEAL
WITH THE CLIENT (MCA) THROUGH THEIR PROCUREMENT
AGENTS.
• Knowledge of local challenges – teaming is encouraged
• Read the requirements! Ask questions! Submit EVERYTHING
requested in the bidding documents
• Bid Security required – ensure it accompanies the bid
• Advance Payment requires a bank guarantee
• Performance Guarantees required from bank acceptable to the MCA
entity – budget for them
• Price reasonableness – low bid doesn’t always win if it doesn’t make
sense
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• Section I: MCC Overview
• Section II: Procurement Process
• Section III: Upcoming Business
Opportunities*
* The following is not meant to be a specific, comprehensive listing of
MCC/MCAs business opportunities but rather a general guideline to
potential upcoming opportunities related to infrastructure projects and
activities in MCC countries with significant infrastructure investments. It
does not include completed procurements.
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AFRICA
• Eastern and Southern Africa (EASA)
– Zambia: Newest Compact to includes large scale urban
water supply, sanitation, and drainage works in Lusaka
(most of the $355 million Compact) likely upcoming MCA
procurements for consultancies and project management,
and then works and construction supervision.
– Malawi: The Compact has been suspended due to democracy issues.
However, with the newly installed president there is the possibility that
the Government of Malawi will appeal MCC for reinstatement of the
Compact. The 2011 Malawi Compact included $350 million focused on
revitalization of the energy sector including about $283 million for
improvement of power supply and distribution, and about $26 million for
sector policy and regulatory reform.
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• Western Africa (WA)
AFRICA continued…
– Burkina Faso: The $481 million Compact is in its 3 rd implementation year
and includes primary and secondary roads project ($194 million), and an
irrigation/dam rehabilitation activity, for which MCA procurements are
expected for some works and construction supervision projects not yet
procured.
– Cape Verde: The recently signed 2 nd Compact includes a $41 million water,
sanitation and hygiene (WASH) project that includes regulatory and
institutional reform, and an infrastructure grant facility which will involve
MCA procurements for consultancies and project management, works and
construction supervision.
– Senegal: The $540 million Compact is in its 2 nd implementation year and
includes a road rehabilitation project ($324 million), and an irrigation project
($170 million), for which MCA procurements for works and construction
supervision are expected.
27

Europe, Asia, Pacific and
Latin America (EAPLA)
– Indonesia: The $600 million, November 2011 Compact includes a $333
million Green Prosperity Project (GPP) focused on renewable energy. The
GPP is likely to result in MCA procurements for consultancies to prepare
specific projects, and then works and construction supervision.
– Jordan: The $275 million Compact is in early implementation and includes a
total of about $254 million in water supply network, wastewater network, and
wastewater treatment plant expansion projects. MCA procurements for
works is commencing .
– Moldova: The $262 million Compact is in its 2 nd implementation year and
includes an irrigation systems rehabilitation activity ($73 million) for which
MCA procurements for works are expected, and a road rehabilitation project
($133 million).
– Philippines: The $434 million Compact is at the end of its 1 st implementation
year and includes a roads development project ($214 million) for which MCA
procurement for works is underway.
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Thank you very much !