01 SOW.docx

Statement of Work

Consultant Services: External Legal Counsel to Support the Indonesia II Compact Development Team

A. Introduction

MCC has been working in Indonesia since 2006, helping to improve governance, fight corruption and enhance public health through the MCC Threshold program. This program, which concluded in December 2010, was designed to strengthen key anti-corruption institutions and to create a more efficient and sustainable immunization surveillance system.

MCC’s first, $600 million compact with Indonesia was signed in November 2011. The compact was designed to reduce poverty through economic growth by supporting three of the Government’s growth and development priorities: better health and nutrition, procurement modernization, and sustainable energy and resource management. The compact included three projects in these priority areas, and was designed and implemented with a focus on community ownership and innovative, scalable models that would allow for emerging opportunities. The compact successfully concluded on April 2, 2018. Against this backdrop, on December 11, 2018, MCC’s Board of Directors selected Indonesia as eligible to develop a second compact program.

Despite challenges, MCC and the Government of Indonesia (GOI) achieved many successful outcomes through our partnership and will incorporate key lessons learned from the first compact into the design of the second. For example, learning from the first compact program – which was both geographically and sectorally diverse – MCC and the GOI intend to develop a more focused second compact in order to streamline implementation and ensure greatest impact. MCC’s compact programs are developed with partner countries over the course of several years, and MCC’s work with Indonesia on the second compact program is currently in the early stages. The compact development process is data-driven and iterative, moving through the following five distinct phases[footnoteRef:1]: [1: For more on MCC’s approach to compact development, see https://www.mcc.gov/resources/doc/guidance-compact-development-guidance.]

· Preliminary Analysis. In this phase, the country in partnership with MCC undertakes broad consultations with stakeholders and conducts an analysis of the constraints to economic growth in that country. The phase ends with the development of a Constraints Analysis that outlines the binding constraints to growth in the country.

· Problem Diagnosis. In this phase, the country in partnership with MCC defines problems and conducts an analysis of the root causes of the identified binding constraints. The phase ends with the development of Concept Notes that identify the core root causes and what opportunities may exist to address the root causes.

· Project Definition. In this phase, the country in partnership with MCC defines and scopes specific projects, identifies investments and activities, and builds the actual program logic for the proposed compact program. The phase ends with the development of Project Proposals that detail the specific projects that comprise the compact program, and how they might meet MCC’s investment criteria.

· Project Development. In this phase, the country in partnership with MCC launches public procurements, conducts feasibility, environmental and other studies, identifies beneficiaries from the projects and calculate the probable economic impact from the projects. The phase ends with the development of an Investment Memorandum that details the proposed compact program and discusses the manner in which the proposed program accomplishes the overarching objectives in the country while also meeting MCC investment criteria.

· Negotiation. This is the final stage, during which the compact is negotiated with the partner country’s government, the compact is finalized, submitted for approval by both the country and MCC, and signed.

Beginning with the preliminary analysis phase, MCC and the GOI, primarily represented by the Compact Development Team (CDT) currently operating under the National Planning Bureau (BAPPENAS), have been working together to undertake project development. During this phase, MCC and the GOI agreed that (i) barriers to export-oriented competitiveness, (ii) barriers to domestic productivity and innovation, and (iii) costly and underdeveloped financial intermediation are the binding constraints to economic growth in Indonesia. At the conclusion of the problem diagnosis phase, MCC and the GOI agreed they would primarily focus further compact development efforts on issues related to the constraint of financial intermediation, with two areas of focus: (i) access to finance for infrastructure, particularly transport and logistics infrastructure, and (ii) access to finance for micro, small and medium-sized enterprises (MSMEs), particularly those owned by women. In February 2021, MCC and the GOI signed a Compact Developing Funding agreement to fund preparatory activities in support of developing proposed compact activities in these areas, as well as related program administration needs.

B. Countries

Indonesia and any other eligible MCC countries.

C. Scope and Objective

MCC would like to engage legal support services (the “Consultant”) to assist the CDT with legal matters pertaining to the development of the second compact program, as outlined below. The objective of this consultancy is to provide legal advice to the CDT on all legal issues affecting the preparation and development of the second Indonesia compact, to ensure conformity with the laws and regulations of both the Government of Indonesia and MCC.

D. Tasks

The Consultant shall perform the following tasks:

1. Assisting in the institutional set-up and establishment of the accountable entity (MCA-Indonesia, or MCA-I) that will be responsible for implementing the proposed compact:

0. Identify and advise the CDT on the resolution of legal issues related to the institutional set-up and establishment of MCA-I, including but not limited to fund channeling mechanisms, grants administration, employment and labor law, and tax issues under Indonesian law.

0. Provide written legal opinions to the CDT regarding the establishment of MCA-I.

1. Drafting the statutory regulations required for the establishment of MCA-I:

1. Analyze Indonesian laws and regulations relevant for the preparation of the second compact program and assist the CDT in preparing the regulatory framework for the second compact program.

1. Assist in the drafting of legal instruments, governance guidelines, and other legal documents required for the second compact at all stages of development; from initial preparation of the grant agreement to establishment of MCA-Indonesia and its initial procurements and “fund channeling” arrangements and payment / accounting systems to asset management.

1. Provide legal opinions, if necessary, to relevant Government of Indonesia officials and MCC on the validity and enforceability of the compact and related agreements.

1. Assist in the drafting of standard agreements that may be used by MCA-I during the second compact term.

1. Supporting preparations for negotiation of the second compact:

2. Conduct a comprehensive review of the draft second compact and its related agreements to identify any legal issues that may arise and provide recommendations to the CDT on how to resolve these issues.

2. Provide advice and assistance to the CDT in pre-negotiation preparations for the second compact.

2. Support the CDT as the CDT and GOI finalize the compact and related agreements.

2. Draft other documents related to entry into force and compact implementation.

1. Providing legal advice regarding the second compact program:

3. Provide guidance on the legal implications of proposed activities to be undertaken by the second compact (including legal issues that may arise in developing and implementing i. innovative financing schemes in the MSME workflow environment, ii. risk-reducing instruments, and iii. financing schemes for infrastructure).

3. Perform additional analysis required to determine and maximize the viability of the proposed program, including identifying and proposing solutions to legal impediments to the compact’s treatment as an international agreement that would supersede domestic laws under Indonesian law.

3. Advise the CDT on the resolution of legal issues related to the structure and implementation of the proposed program (including project- and sector-specific matters), issues related to the governance and management structures of MCA-I and implementing entities, financial management and fund channeling mechanisms, procurement, labor, and environmental matters.

3. Provide legal advice on intellectual property rights as issues arise.

5. Other tasks as assigned.

The services include assisting the CDT in its cooperation with relevant Government of Indonesia agencies regarding performance of the required actions for successful preparation and development of the second compact program.

E. Deliverables

The Consultant shall provide services to MCC on an as needed basis. To support MCC in the flexible and timely manner needed to meet the evolving needs of compact development and implementation, technical directives under this statement of work will be issued and the Consultant deployed each time the Consultant’s services are needed over the course of this contract. No additional tasks shall imply any additional costs to the Government beyond the amount allowed for in the initial call order; however, this call order may be amended to reflect additional costs associated with implementation planning and oversight requirements in additional countries. In terms of written deliverables, the following are required:

· Deliverable 1: written advice and / or legal opinions on the establishment of MCA-I, validity and enforceability of the compact and related agreements, etc.

· Deliverable 2: draft statutory regulations, legal instruments, governance guidelines, and other legal documents required for the establishment of MCA-I.

· Deliverable 3: draft standard agreements that may be used by MCA-I.

· Deliverable 4: draft documents related to entry into force and compact implementation.

· Deliverable 5: other written analysis and advice on the compact and related agreements, establishment of MCA-I, and related matters.

F. Period of Performance

All work under this contract will be completed between effective date of the contract award through a one-year base period with up to a one (1) one-year option period. The estimated level of effort is estimated at up to 300 hours per year. MCC anticipates this level of effort but does not guarantee this level of effort as it may increase or decrease.

Consultant should be based in Indonesia and will perform the tasks under this contract entirely in Indonesia, largely in Jakarta.

G. Subcontracting

Experts are authorized to subcontract data collection, data preparation, data or economic analysis, and related services as needed. The overall costs for subcontracting shall not exceed 25% of the expert’s total negotiated unloaded direct labor cost.

H. Conflict of Interest

The expert will be precluded from bidding on work and services (design, assessment, construction, and supervision) to be procured by the local accountable entity or using funds advanced under MCC work in the relevant country.

I. Timing and Reporting

All formal communication with MCC, including reports, will be submitted to the COR/PM. The COR/PM for this requirement will be identified via separate correspondence.

The COR/PM will have technical responsibility for monitoring the contractor’s performance. The COR/PM will review and evaluate the contractor’s performance, and also will coordinate any communications with relevant counterparts and other donor agencies and organizations.

Any changes in the terms of the Call Order will be made in writing and approved by the Contracting Officer. No representation of the COR/PM shall serve as a basis for an alteration in the general scope of this Call Order or of the terms and conditions of the Call Order unless confirmed in writing by the Contracting Officer. The contractor must communicate with the Contracting Officer on all matters that pertain to the Contract terms. Proceeding with the work without proper contractual coverage could result in nonpayment for that work.

The designated Expert would be expected to coordinate with local authorities responsible for MCC Compact implementation as well as other donors, where relevant. However, designated Expert would report directly to the designated COR/PM.

J. Required Qualifications

Mandatory:

· Minimum five (5) years’ experience, with not less than five (5) legal practitioners who have at least an aggregate of thirty (30) years of post-qualification experience among its three (3) senior partners.

· Firms must be licensed to practice as a legal consultant in Indonesia and must confirm that they have no conflicts of interest that would prevent them from undertaking the representation.

· General knowledge of Indonesian economic, political, legal, and social systems and characteristics that relate to development assistance.

· Knowledge of Indonesian Government legislation relating to development assistance and grants management, and a thorough understanding of the objectives, methodology, and status of the US-Indonesia strategic partnership.

· Past work experience with, and knowledge of, taxation, labor law, contracts, business and non-profit organizations and structures, and development assistance requirements in Indonesia.

· Familiarity with the project development and approval process for donor assistance and knowledge of the applicable Indonesian regulations.

· Knowledge of appropriate government and non-government entities and established relationships with officials in such entities.

· Experience by work team (Partners and Associates) in government projects and carrying out work with due observance of the Advocate's professional code of ethics.

· General work experience within and, if applicable, outside Indonesia.

· Experience in dealing with a full range of contracts: corporate, transactional, commercial, and government.

· Full Indonesian language proficiency (ability to read, write and communicate verbally at a professional level).

· Excellent oral and written communication skills in English.

Preferred:

· Experience working with agencies of the United States Government (MCC, USAID, etc.), international financial institutions, and/or other development partners (World Bank, ADB, etc.) will be an advantage.

· Knowledge of MCC policies, procedures, and documentation requirements.