1 - SOW.docx

Statement of Work

Public Financial Management (PFM) Due Diligence and Advisory Consultant

A. Introduction

MCC’s mission is to provide grant assistance to support economic growth and poverty reduction in select developing countries with a demonstrated commitment to just and democratic governance, economic freedom, and investments in their citizenry. MCC grants complement other U.S. and international development programs that not only help poor countries rise out of poverty but also create a more secure and prosperous home front. Our model is defined by core principles, of selectivity, country ownership, transparency, and a focus on results.

There are two types of MCC grants, compacts and thresholds:

1. The Compact is MCC’s primary grant mechanism, whereby partner countries enter into a five-year agreement with MCC that includes a plan for achieving shared development objectives and the responsibilities of each country in achieving those objectives.

2. Threshold Programs are smaller grants focused on policy and institutional reform in selected countries that come close to passing MCC’s eligibility criteria and show a firm commitment to improving their policy performance.

MCC’s values identify who we are and what is important to us. Our Values are CLEAR: Embrace Collaboration, Always Learn, Practice Excellence, Be Accountable and Respect individuals and ideas. MCC’s values define how we behave on a daily basis, both as individuals and as an institution, in pursuit of our mission. They guide how we make decisions, set priorities, address challenges, manage tradeoffs, recruit and develop staff, and work together with our country partners and stakeholders.

To achieve its mission and objectives, MCC actively engages and partners with external parties throughout the compact development and implementation process to ensure that projects are designed with the appropriate due diligence and technical expertise.

Background In the execution of its mission, MCC identifies constraints and develops remedies within various sectors. One of these sectors is public financial management (PFM). PFM is a class of systems and elements involved in the management of public resources. It primarily refers to the processes, procedures, laws, and activities associated with spending public resources to include budgeting, treasury, cash management, disbursement, accounting and reporting, audit and control, and may include the financial management features of various government systems such as procurement and human resources, as well as the financial management aspects of transparency, governance and public accountability. Effective PFM systems enable governments to secure and use resources effectively, efficiently, and transparently.

There are no specifically designed tools or methodologies to isolate and assess the impact of PFM reforms on service delivery. However, there are several assessment tools which provide indicators that can be used to track progress in PFM alongside progress in service delivery. Though assessment tools are the main data sources for monitoring PFM performance, the data is not always comparable across countries and time periods. The following PFM assessment tools are currently identified as appropriate to support consideration of PFM in MCC programming:

· Public Expenditure and Financial Accountability (PEFA): The PEFA provides a framework for assessing and reporting on the strengths and weaknesses of PFM using quantitative indicators to measure performance. PEFA is designed to provide a snapshot of PFM performance at specific points in time using a methodology that can be replicated in successive assessments, giving a summary of changes over time.

· Public Investment Management Assessment (PIMA): A PIMA is a comprehensive framework to assess infrastructure governance for countries at all levels of economic development. PIMAs evaluate the procedures, tools, decision making, and monitoring processes used by governments to provide infrastructure assets and services to the public; help identify reform priorities; and devise practical steps for their implementation. of the PIMA Reports that takes a few months to complete (about 6-9 months in total).

· Public Expenditure Review (PER): A PER is a key diagnostics instrument used to evaluate the effectiveness of public finances. A PER typically analyzes government expenditures over a period of years to assess their consistency with policy priorities, and what results were achieved. A PER may analyze government-wide expenditures or may focus on a particular sector as Health Care, Education, or Infrastructure. Many governments have made strides to include PERs as part of their budget planning cycle. Whether across the whole of government or focusing on a single sector, by examining how public expenditure was allocated and managed, governments and donors are better able to assess not only the impact of their investment, but also the effectiveness of budget planning and execution.

· Tax Administration Diagnostic Assessment Tool (TADAT): The TADAT is designed to provide an objective assessment of the health of key components of a country’s system of tax administration. The framework is focused on the nine key performance outcome areas (POAs) that cover most tax administration functions, processes and institutions. The TADAT assessments help a) identifying the relative strengths and weaknesses in tax administration systems, processes, and institutions; b) facilitating a shared view on the condition of the system of tax administration among stakeholders; c) informing a reform agenda, including objectives, priorities, initiatives, and implementation sequencing; d) facilitating management and coordination of external support for reforms, and achieving faster and more efficient implementation; e) monitoring and evaluating reform progress through repeat assessments.

B. Scope

MCC seeks an experienced public financial management (PFM) due diligence and advisory consultant to execute and conduct appropriate PFM due diligence tools and diagnostics and to advise on appropriate PFM remediations and strategies in MCC program development. The Consultant will under and with work closely with MCC Program Financial Services (PFS) Practice Group and other MCC stakeholders to identify and initiate appropriate PFM diagnostics for identified countries. The Consultant will apply his/her comprehensive PFM expertise to consult and advise on how and where to incorporate appropriate PFM interventions in MCC program development.

C. Countries

Any MCC eligible countries

D. Tasks and Deliverables

The Contractor shall be expected to complete the following tasks with accompanying sub-tasks as part of the engagement:

Task 0

· Review and understand MCC Compact and Threshold development cycles, to include timelines and parameters for phases of the program development cycle, and specifically how due diligence and other deliverables fit within that cycle. Meet with MCC counterparts to review and assess PFM diagnostic and advisory needs. Develop workplan as appropriate.

Tasks 1-4 Execute and deliver PFM due diligence assessment tools

Task 1 – Public Expenditure and Financial Accountability (PEFA):

Initiate, coordinate, and complete a PEFA (2016 Methodology) assessment and accompanying report for a country identified as eligible for MCC program funding. The assessment should be completed on-time and within the time parameters of MCC’s program development cycle and coordinated with appropriate stakeholders (e.g. PEFA Secretariat) to ensure completeness, methodology compliance, and application of best practices.

Task 2 - Public Investment Management Assessment (PIMA):

Initiate, coordinate, and complete a PIMA and accompanying report for a country identified as eligible for MCC program funding. The assessment should be completed on-time and within the time parameters of MCC’s program development cycle and coordinated with appropriate stakeholders (e.g. IMF) to ensure completeness, methodology compliance, and application of best practices.

Task 3 – Public Expenditure Review (PER):

Initiate, coordinate, and complete a PER and accompanying report for a country identified as eligible for MCC program funding. The assessment should be completed on-time and within the time parameters of MCC’s program development cycle and coordinated with appropriate stakeholders (e.g. World Bank) to ensure completeness, methodology compliance, and application of best practices.

Task 4 – Tax Administration Diagnostic Assessment Tool (TADAT):

Initiate, coordinate, and complete a TADAT assessment and accompanying report for a country identified as eligible for MCC program funding. The assessment should be completed on-time and within the time parameters of MCC’s program development cycle and coordinated with appropriate stakeholders (e.g. TADAT Secretariat) to ensure completeness, methodology compliance, and application of best practices.

Task 5 – PFM Advisory Services

Consult and advise MCC stakeholders on the appropriate PFM design measures and remedies for respective MCC countries in support of MCC program development. The consultant will be expected to appropriately advise on the following:

· Specific PFM interventions appropriate for specific project sectors (e.g., water, education, etc.) where PFM interventions can support/leverage MCC investments;

· Specific PFM policy and institutional reform interventions that can be implemented with the timeline and parameters of MCC’s funding mechanisms;

· Specific PFM interventions where MCC possesses a competitive advantage;

· Detail the viability of potential partners (bi-lateral, multi-lateral international development finance institutions) with experience developing and/or implementing PFM programs.

· Develop necessary materials, including presentations, fact sheets, success stories, and other materials that may assist in communicating recommendations and strategies;

Timeline and Deliverables

Task 0 (Month 1)

· Kick-off meeting

· Desk review, MCC staff interviews (as appropriate) and analysis of past and present MCC Compact and Threshold PFM programs and interventions

· Work plan. This will be a detailed plan of work summarized in table or spreadsheet format.

· Follow-up planning and coordination meeting

Task 1 (As Directed)

· The full PEFA assessment process to include report finalization can be expected to take up to nine months

· Deliverable include a finalized PEFA report adhering to the PEFA methodology (PEFA Secretariat)

Task 2 (As Directed)

· The full PIMA assessment process to include report finalization can be expected to take up to six months

· Deliverable include a finalized PIMA report adhering to the PIMA methodology (IMF)

Task 3 (As Directed)

· A PER assessment process to include report finalization can be expected to take up to six months

· Deliverable include a finalized PIMA report adhering to the PIMA methodology (World Bank)

Task 4 (As Directed)

· A TADAT assessment process to include report finalization can be expected to take up to six months

· Deliverable include a finalized PIMA report adhering to the PIMA methodology (TADAT Secretariat)

Task 5 (As Directed)

· Consultations and advisory services timeframes will vary based on the country context, but may span over several months

· Deliverables can include presentations and reports to effectively communicate recommendation, strategies, and other pertinent information

E. Period and Place of Performance

All work will be completed between the dates of the award through a two-year period of performance.

The estimated level of effort is estimated at up to 1,000 hours with 4 trips per year for a total of 2,000 hours. MCC anticipates this level of effort but does not guarantee this level of effort as it may increase or decrease.

The consultant shall work from his/her home office and/or any MCC eligible country as necessary.

F. Timing and Reporting

All formal communication with MCC, including reports, will be submitted to the Contracting Officer Technical Representative (COR), Program Monitor (PM), and other designated MCC personnel. 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 SoW 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 SoW or of the terms and conditions of the SoW 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.

G. Subcontracting

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

H. Conflict of Interest

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

I. Qualifications

· Minimum 10 years of relevant work experience with governments or development partners to execute Public Financial Management (PFM) diagnostics and advise on PFM reform design and implementation;

· Master's Degree, or equivalent, in Economics, Accounting, Finance, Business Administration, Public Administration or related fields.

· Prior technical work experience supporting public financial management in the public sector in developing and emerging economies;

· Public financial management and administration reform at national and sub-national level;

· Experience executing and/or managing the following PFM diagnostic tools:

· Public Expenditure and Financial Accountability (PEFA)

· Public Investment Management Assessment (PIMA)

· Public Expenditure Review (PER)

· Tax Administration Diagnostic Assessment Tool (TADAT)

· Experience executing and/or managing political economy analyses of PFM systems;

· Experience with macro-fiscal policies, budget process, financial management and reporting and central government reform and coordination;

· Comprehensive understanding of and established networks with relevant actors and organizations in the PFM field (e.g., DFID, WB, EU, DFAT, GIZ);

· Prior experience on donor-funded technical assistance programs for PFM assessments, reforms, and strategy implementation;

· Knowledge of US Government Foreign Assistance Act, applicable foreign assistance appropriations and relevant USG agency budgeting processes;

· Knowledge of international development finance institutions funding mechanisms;

· Demonstrated ability to work independently and within a team to achieve results;

· Excellent interpersonal skills and ability to build and maintain relationships with a variety of stakeholders;

· English language fluency;

· Experience working in both the public and private sectors is highly desirable (preferred); and

· Relevant experience working with MCC and other international development institutions (e.g., World Bank, International Monetary Fund) is an advantage (preferred)