Recalibrate the balance between appropriate risk and oversight. As part of a sliding scale system, as LACAP training and enforcement is institutionalized and MCC procurement guidelines met, the MCC should work with Fomilenio and implementing agencies to identify areas of overlap with an eye to reducing MCC requirements. This will require evaluation and coordination by legal counsel and procurement experts to identify requirements that the MCC stipulates which may be encompassed in LACAP and are therefore duplicative. Alternatively, if this analysis was included as part of due diligence, it should be provided in a more transparent manner to interested parties including Fomilenio. This review or release of the decision rationale and illustrative examples could identify the areas of enforcement that need to be strengthened in order to implement LACAP effectively and meet MCC guidelines. As such, the findings could be the basis for identification of and training to alleviate weaknesses found in implementation of LACAP procurement and contractual regulations. The MCC could thereby help foster strengthening of GOES institutions to carry out legislative and regulatory reforms while simultaneously conforming to institutional procurement guidelines. The current system of using international firms as procurement agents may undermine country capacity as well as long-term project viability due to dependency on MCC oversight.
Beef up MCC procurement expertise to the field. This can be accomplished either through continued decentralization of procurement decisions to San Salvador, or by adding expert resources to the MCC office in-country or on the country implementation team from Washington. The former would ensure that procurements are efficiently addressed and eliminate multiple rounds of approvals between San Salvador and Washington. The latter would be a means to build country capacity while maintaining closer oversight. The recently implemented training and additional budgetary resources allocated to El Salvador by the MCC to bolster procurement should be continued and perhaps considered as a model for other MCC countries. As with the balance required in country ownership, the MCC must decide whether its risk tolerance strategy follows traditional projectized aid programming[22] with decision making centralized in Washington or if it should enhance its field presence (or, at a minimum, its country implementation team from Washington) with a full-time procurement specialist to build country capacity while also protecting MCC oversight interests. The latter, however, would require reconsideration of the staffing cap. The 300 person staffing cap was intended as an organizational constraint to foster increased country ownership; however now with operational experience gained, this constraint may indeed be too stringent.
Increase transparency around implementation schedules and targets for both procurement and disbursement. The inclusion of contract commitments and the compact implementation timeline to the Country Status Reports[23] this year provides welcome information that helps clarify the percentage of the compact that is scheduled to be disbursed. Contract commitments can also be viewed (as the MCA Monitor has previously noted[24]) as a rough proxy for local ownership, as commitments signal that the accountable entity has met the MCC’s rigorous procurement requirements and successfully concluded contract negotiations for any given project. This trend toward increased transparency regarding the pipeline and schedule help to demonstrate implementation progress, but could also provide additional instructive information such as procurement and related disbursement targets or estimated contract commitments schedule.
While the MCC may be hesitant to publish estimates due to past criticism of overly ambitious targets, currently it is difficult to gauge progress with information that is mostly retrospective. The contract commitments in the status reports are a step in this direction but inclusion of projected schedules would help clarify the picture of on-the-ground progress. And while it is the responsibility of accountable entities to manage the procurement process, the MCC could foster greater transparency by serving as a central clearinghouse to provide this information to its many constituents. Currently this information is publicly available on accountable entity websites, which vary in quality and accessibility; the housing of a consolidated chart or other comparison tool (including schedule estimations) on the MCC website would help to better calibrate expectations in Washington.
Next Section: Managing Expectations
22. See also: "Should the MCC Provide Financing Through Recipient Country's Budgets? An Issues and Options Paper"
23. See http://mcc.gov/countries/ for the most recent reports available.
24. See Sarah Rose blog "An Alternative Way to Look at Progress on Compact Implementation (If Only We Could…)": http://blogs.cgdev.org/mca-monitor/archives/2007/10/an_alternative.php.