[Federal Register Volume 73, Number 155 (Monday, August 11, 2008)]
[Notices]
[Pages 46720-46772]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18201]



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Part II





Millennium Challenge Corporation





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Notice of Entering Into a Compact With the Republic of Namibia; Notice

Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / 
Notices

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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 08-09]


Notice of Entering Into a Compact With the Republic of Namibia

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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SUMMARY: In accordance with Section 610(b)(2) of the Millennium 
Challenge Act of 2003 (Pub. L. 108-199, Division D), the Millennium 
Challenge Corporation (MCC) is publishing a summary and the complete 
text of the Millennium Challenge Compact between the United States of 
America, acting through the Millennium Challenge Corporation, and the 
Republic of Namibia. Representatives of the United States Government 
and the Republic of Namibia executed the Compact documents on July 28, 
2008.

    Dated: August 4, 2008.
Henry Pitney,
Deputy General Counsel, Millennium Challenge Corporation.

Summary of Millennium Challenge Compact With the Republic of Namibia

1. Introduction

    Namibia is a young democracy having gained independence from South 
Africa in 1990. The country's population of 2.0 million is spread over 
823,680 km, an area approximately twice the size, but with a population 
density one sixtieth, of California. According to the 2001 census, 67 
percent of the population lives in rural areas, primarily in the 
northern communal area (``NCA''), with 12 percent living in the 
capital, Windhoek. The landscape is largely desert and desert savannah 
with low, highly variable rainfall. The economy continues to be 
dependent on the mining industry; with diamonds and other minerals 
accounting for more than 50 percent of total exports in 2005.
    One of the primary constraints to achieving poverty reduction 
through economic growth in Namibia is an inadequately educated and 
skilled workforce. In addition, the economy's export base is narrowly 
focused on mineral commodities, with below-potential levels of revenue 
and employment generated in sectors of importance to the poor, such as 
livestock and tourism. While improving the quality of education and 
training for underserved populations, the Compact will also focus on 
diversifying Namibia's export base by capitalizing on Namibia's 
comparative advantages--large areas of semi-arid land suitable for 
livestock grazing, natural products indigenous to Namibia, and diverse 
wildlife and unique landscapes ideal for ecotourism. Through these 
investments, it is expected that incomes will rise for poor, rural 
communities that have been marginalized from the formal economy by 
former colonial and apartheid regimes.
    Namibia is classified as a lower-middle income country (``LMIC '') 
with a population of 2.1 million, 2006 per capita of $3,000, and a 
steady economic growth rate averaging 4.3 percent per annum. Despite 
steady growth, Namibia is plagued by high levels of poverty, 
particularly in the northern communal areas (``NCAs''), high 
unemployment (30 percent in 2006), an extreme disparity in wealth and 
income between the rich and the poor (second highest Gini coefficient 
in the world), and an HIV prevalence rate of nearly 19.6 percent in 
2005. Following 25 years of struggle for independence, the government 
of Namibia (the ``GRN '') is committed to providing equal opportunities 
to previously disadvantaged populations, while advancing interracial 
reconciliation to maintain political and economic stability.

2. Program Rationale

    To sustain GDP growth and increase income levels, Namibia must rely 
heavily on the availability of skilled labor. Despite high levels of 
investment in the education sector, the education system is unable to 
produce the quantity, levels, and types of human resources necessary to 
meet labor market demands. In 2005, the GRN, with the support of the 
World Bank, launched an ambitious 15-year reform process, the Education 
and Training Sector Improvement Program (``ETSIP ''), to improve 
education outcomes. The Compact's education project supports ETSIP 
through strategic investments that leverage policy and institutional 
reform to maximize the efficiency, accessibility, and quality of the 
education system.
    As a result of the volatility of the mining sector, the GRN is 
focusing on diversifying Namibia's economy with particular emphasis on 
two of the fastest growing sectors--agriculture and tourism. 
Agriculture contributes 11 percent of GDP and earns over 25 percent of 
export receipts. The livestock sector comprises 90 percent of all 
agriculture production in the country. Approximately 80 percent of 
livestock production is exported to the European Union and neighboring 
southern African countries. Due to increasing population pressures, a 
lack of flexible and efficient market outlets and the communal land 
regime in the north, livestock productivity in the north is low. In 
addition to livestock, there is significant growth potential for the 
indigenous natural products (``INP'') industry in Namibia. The INP 
industry is expected to grow substantially over the next ten years, 
allowing for some of the poorest households in Namibia to participate 
in this emerging industry. Overall, MCC's investments in agriculture 
are intended to increase rural farmers' productivity and income 
generated in the livestock and INP sectors, while opening up trade 
opportunities for meat and exports of high-value natural products such 
as devil's claw, Kalahari melon seed, marula, and ximenia.
    Consistent with the GRNs National Development Plan and long-term 
national development strategy known as ``Vision 2030,'' Namibia plans 
to develop one of its fastest growing ``export'' industries with a 
focus on tourism. Export earnings from international visitors and 
tourism goods are expected to generate 15.6 percent of total exports 
($650.6 million) in 2008 and grow to 22.6 percent ($2.09 billion) by 
2018. The GRN recognizes that tourism is an important generator of 
employment, particularly in rural areas where most tourism in the 
country occurs. Through MCC's investments in tourism, the GRN intends 
to catalyze growth in the tourism industry and increase participation 
by Namibia's poor rural population. To achieve these objectives, the 
tourism project will improve management and infrastructure in Etosha 
National Park , the premier tourism destination in Namibia, increase 
the overall number of tourism arrivals, and induce private investment 
in communal conservancies.

3. Program Overview and Budget

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                                                           Table 1--Program Budget by Project
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                                                                                          (US$ millions)
                Component                ---------------------------------------------------------------------------------------------------------------
                                               CIF*           Year 1          Year 2          Year 3          Year 4          Year 5           Total
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Education Project.......................            8.97           10.30           29.99           53.32           34.62            7.75          144.97
Tourism Project.........................            2.47            4.71           13.03           23.36           14.79            8.57           66.95
Agriculture Project.....................            1.36            1.56           17.95           14.46            8.43            3.17           46.96
Monitoring & Evaluation.................            0.72            1.77            1.02            1.02            1.00            1.02            6.57
Program Management and Administration...            6.00            6.60            6.60            6.60            6.60            6.60           39.00
                                         ---------------------------------------------------------------------------------------------------------------
    Total MCC Funding...................           19.54           24.95           68.61           98.78           65.44           27.13          304.47
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* Compact Implementation Funds (CIF) refer to funding available before the entry-into-force of the Compact.

A. Education Project ($144.97 Million)
    The education project is intended to improve the education sector's 
effectiveness, efficiency, and quality, through systemic reforms and 
critical near-term interventions. MCC funding will support key gaps 
within ETSIP, as well as complementary measures, such as institutional 
strengthening, policy reform, and targeted technical assistance, to 
ensure sustainable results.
    Primary activities include:
    <bullet> Improving the Quality of Education: Improving 
infrastructure and providing equipment in approximately 47 primary and 
secondary school campuses, primarily in the northern communities of 
Namibia. Additionally, this activity includes support to teacher 
training colleges for policy-relevant studies and improving science and 
computer training facilities.
    <bullet> Vocational and Skills Training: Improving vocational and 
skills training through assisting with the establishment of a National 
Training Fund within the Namibia Training Authority and making 
operational a sustainable training levy system. This includes funding 
priority projects, including tourism training (through competitive 
grants), construction and renovation of approximately nine Community 
Skills Development Centers (``COSDECs''), and facilitating private 
partnerships to address market demands for employment.
    <bullet> Access to and Management of Textbooks: Upgrading access to 
and management of textbooks through operational support and reforms to 
establish more transparent, competitive acquisition processes for new 
textbooks, and to ensure adequate distribution and management 
procedures. This includes funding the acquisition of science, math, and 
English textbooks for grades 5 to 12 on a national level.
    <bullet> Regional Study and Resource Centers (``RSRCs'' or 
``Libraries''): Construction of approximately three regional Libraries 
in underserved areas that will improve access to documentation, 
information resources, training materials and programs, and study 
facilities.
    <bullet> Expanding and Improving Access to Tertiary Education 
Finance: Expanding access to tertiary finance through assisting the 
Ministry of Education in its efforts to establish a sustainable and 
widely accessible tertiary and technical education finance system.
    <bullet> Cross-Project Support: Strengthening the Ministry of 
Education's HIV/AIDS Management Unit and developing HIV/AIDS awareness 
and prevention plans related to construction activities.
B. Tourism Project ($66.95 Million)
    The tourism project will improve the management and infrastructure 
of Etosha National Park, enhance the marketing of Namibian tourism, and 
develop the capacity of communal conservancies to attract investments 
in ecotourism and capture a greater share of the revenue generated by 
tourism in Namibia. Together, these activities will generate income and 
create employment opportunities for some of the poorest populations in 
Namibia, while preserving the natural resources that serve as the base 
for the tourism industry.
    Primary activities include:
    <bullet> Improved Management and Infrastructure of Etosha National 
Park: Improving the management capacity, providing improved 
infrastructure in management centers and staff housing in strategic 
locations, and providing road building/maintenance and game 
translocation equipment.
    <bullet> Marketing Namibian Tourism: Increasing tourist arrivals to 
Namibia by ramping up marketing to North American tourists, developing 
and marketing local and regional tourism route packages (with the 
explicit aim of directing tourists to conservancies), and developing a 
fully interactive Web site.
    <bullet> Ecotourism Development in Conservancies: Building the 
capacity of conservancies to attract investment, preserve their natural 
resources and receive a greater share of revenues, through the 
provision of a range of technical assistance to approximately 31 high-
tourism potential conservancies designed to render them financially 
self-sustainable. In addition, grant funding will be provided, based on 
individual conservancy needs and demand, to some of these conservancies 
to attract tourism enterprises.
C. Agriculture Project ($46.96 Million)
    The agriculture project aims to increase the economic performance 
of the agricultural sector by strengthening the land tenure system, 
introducing community-based rangeland management practices, and 
building capacity of the livestock system to support farmers' ability 
to increase productivity and profits from livestock sales. In addition, 
the project will increase the volume, quality, and added value of INPs 
for export to regional and international markets.
    Primary activities include:
    <bullet> Land Access and Management: Improving the communal land 
regime and introducing effective community-based rangeland management 
practices through a comprehensive public awareness and outreach 
campaign on land rights, capacity building for Communal Land Boards, a 
systematic verification and registration process to regularize land, 
and training in community-based management of rangeland resources.
    <bullet> Livestock Support: Constructing approximately five new 
veterinary centers in key, high volume livestock areas, in under-served 
communities. This includes introducing a traceability system for the 
livestock supply chain that meets food safety requirements and assists 
in herd management at the farm level, as well as support for reducing 
costs and losses, post-farm gate, in the marketing system of livestock 
in the NCAs.

[[Page 46722]]

    <bullet> Indigenous Natural Products: Assisting primary producer 
organizations to increase the volume, quality, and added value of the 
natural products they collect and harvest, in addition to advancing 
their operational and business capacity. This includes funding 
research, testing, and application of innovations and services critical 
to the INP industry's immediate, short- and long-term competitiveness.

4. Program Impact

A. Education Project
    The lack of education and training of the Namibian population has 
been identified in MCC's internal growth diagnostic, by the World Bank, 
and others as a binding constraint to growth and poverty reduction. As 
a result, well-designed investments that enhance the efficiency and 
effectiveness of the education and training sector are expected to have 
a high economic rate of return.
    Expected results of the education project include:
    <bullet> Over a million students across Namibia will benefit from 
improved provision of textbooks and higher quality of education.
    <bullet> An estimated 11,000 additional students will receive 
financing for tertiary education. By alleviating the high-level skills 
constraint in the Namibian economy, greater private investment and 
employment will likely result from an expansion of the tertiary sector. 
In addition, a more sustainable fiscal framework for tertiary education 
will shift the distribution of benefits of public education towards the 
poor.
    <bullet> Up to 49,000 uneducated and unemployed (poor or near-poor) 
individuals over 20 years will receive training at the Community Skills 
and Development Centers.
    <bullet> An estimated 2,000 additional vocational training 
graduates over a 20 year period will receive higher income due to 
improved training opportunities through the National Training Fund.
    <bullet> Over the course of 20 years, 47 schools targeted for 
renovation and expansion will produce approximately 41,700 graduates in 
primarily rural northern communities. These graduates will benefit from 
a higher quality of education and higher lifetime income.
    <bullet> Regional study and resource centers will meet the 
information and study needs of an estimated 8,000 individuals a year 
(about ten percent of the population of the towns where the centers are 
located), including upper primary, secondary and post-secondary 
students enrolled in distance learning, young people seeking skills 
upgrading, small business owners using computer facilities, and adults 
attending continuing education courses.
B. Tourism Project
    Over the past 10 years, Namibia's tourism sector has enjoyed strong 
growth of 6.9 percent per annum (source: World Travel and Tourism 
Council 2007). However, stronger or more sustained tourism growth could 
be achieved through an enhanced marketing effort and improved wildlife 
and natural resource management, which would improve the tourism 
experience in Namibia's national protected areas.
    Expected results of the tourism project include:
    <bullet> An estimated 4,000 additional tourists per year as a 
result of marketing activities, and incremental added value by overseas 
tourists of approximately $7 million. Based on a recent study of the 
benefits of the national protected areas, the benefits will be shared 
in proportions similar to the wider tourism economy, in which 
approximately 24 percent of the benefits will accrue to the poor or 
near-poor.
    <bullet> Investments in Etosha National Park will lead to increased 
tourism visits and added value to the Namibian economy, as well as 
increased income and receipts at Etosha National Park. The investments 
in Etosha National Park, combined with those for increased tourism 
marketing, will result in increased wages for an estimated 23,000 new 
employees in the tourism industry.
    <bullet> An estimated 7,000 individuals are likely to enjoy 
significantly higher income as a result of full and part time 
employment generated through this project. Another 111,000 conservancy 
residents are expected to receive benefits through dividends or 
community-level projects.
C. Agriculture Project
    MCC interventions will improve the security of land rights, the 
equitableness of access to land, the productivity and sustainability of 
communal rangeland resources, the productivity of herds, and the 
efficiency of livestock marketing and quarantine in the north. These 
activities--in particular, the land access and management activity--
will create enabling conditions for communal and poor farmers to 
benefit from future public investments in the livestock sector.
    Despite rapid growth in the INP sector, additional funding is 
necessary to improve coordination in preserving scarce renewable 
resources, address the lack of skills of primary producers, and 
catalyze research and development in the sector.
    Expected results of the agriculture project include:
    <bullet> Over 130,000 individuals, primarily in the north, will 
benefit from improved market efficiency, improved land tenure security, 
and more equitable access to land. Fifty communities, with an average 
of 36 cattle-owning households, will potentially benefit from the 
rangeland management component.
    <bullet> The INP activity is expected to increase incomes for over 
200,000 households, and to increase incomes for primary producers, a 
majority of whom are poor and female, and for whom small increases in 
cash income can represent important supplementary household income.

5. Program Management

    The GRN will incorporate the Compact program into its existing 
government systems. The National Planning Commission (``NPC''), a 
ministry-level government agency charged with directing development 
resources, has been proposed as the designated accountable entity 
(``MCA-Namibia''). As such, it will have overall responsibility for the 
oversight, management, and implementation of the program. A program 
implementation unit within NPC will be responsible for the day-to-day 
administration of the Compact. In addition, the GRN has proposed that 
the Ministries of Education; Agriculture, Water and Forestry; and 
Environment and Tourism, assist in the implementation of the specific 
projects to ensure integration, coordination, and sustainability of 
MCC's investments.
A. MCA-Namibia Board of Directors
    The NPC commissioners will serve as the MCA-Namibia Board of 
Directors. The commission currently consists of 14 members, six of whom 
are GRN officials specified by the NPC's enabling statute, with the 
remaining members appointed by the President of Namibia. As the six 
specified GRN officials do not include representatives from the 
Ministry of Education or the Ministry of Environment and Tourism, the 
GRN has agreed that two of the appointed commission member slots will 
be filled with representatives from these ministries. The remaining 
appointed board members will be civil society and private sector 
members, selected by the President based on their expertise in the 
development field.
    MCA-Namibia will rely on existing consultative committees to serve 
as stakeholder committees for each project. These committees include 
members

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from the public and private sectors, and civil society. They are broad-
based and offer relevant technical expertise plus a solid understanding 
of socioeconomic and environmental realities in Namibia.
B. MCA-Namibia Program Implementation Unit
    Senior management of MCA-Namibia will consist of the chief 
executive officer (CEO); two deputy CEOs; director of administration 
and finance; project director for education, tourism and agriculture; 
environment and social assessment manager; monitoring and evaluation 
manager; legal advisor; and procurement manager. In addition to other 
standard operational staff, much of the technical expertise will come 
from government affiliates. To support MCA-Namibia and strengthen 
financial and procurement controls, MCA-Namibia will competitively 
recruit an external fiscal agent and procurement agent.

6. Program Assessment

A. Consultative Process
    The GRN initiated consultations in all 13 regions of the country in 
mid-2006. These consultations have been ongoing particularly in those 
sectors that the Compact program will support. Stakeholders included 
government officials at national and regional levels, local authority 
counselors and stakeholders, regional coordination committees, regional 
AIDS committees, regional emergency units, land boards, farmers 
associations, conservancy groups, women's associations, church groups, 
youth groups, vulnerable members of society, non-governmental 
organizations, community-based organizations, and the private sector. 
An important and noteworthy aspect of the consultative process is the 
absence of major divergence between the issues identified at national 
and regional levels. This appears to confirm that, in general, there is 
consensus within Namibia on priorities for economic growth--a consensus 
built on previous consultative processes for Vision 2030, the National 
Development Plans, Participatory Poverty Assessments, and other sector-
level consultations.
    MCA-Namibia, in close consultation and cooperation with the 
stakeholders for each of the program components, will continue to 
consult and inform Namibians country-wide on the Compact to ensure 
broad-based understanding, appreciation, commitment, and ownership of 
the program.
B. Government Commitment
    The GRN has demonstrated commitment to the Compact development 
process by fully funding an MCA-Namibia core team since mid-2006, 
undertaking efforts to enhance performance on MCC Selection Indicators, 
proposing an ambitious lower-middle income country (``LMIC'') 
counterpart contribution, and adopting certain sector-specific policy 
reforms that are complementary to the Compact activities.
    <bullet> Ongoing Effort of MCA-Namibia Core Team: GRN commitment to 
the program is evidenced by a budgetary commitment to the Compact 
development process amounting to over $1.55 million over two years, the 
establishment of a 13-member MCA-Namibia core team, and the provision 
of significant office space and equipment for the MCA-Namibia core team 
in Windhoek. Coordinated by MCA-Namibia, GRN officials and other non-
governmental stakeholders have been engaged in refining the proposal 
over the past year and half.
    <bullet> MCC Eligibility Criteria: The GRN is in the process of 
developing a Performance Improvement Plan (``PIP'') to enhance 
Namibia's performance on the specific indicators where it falls below 
the median, namely girls' primary education completion, immunization 
rates, natural resource management, land rights and access, costs of 
starting a business, and fiscal policy. In addition, the GRN has named 
a senior-level point of contact within the Office of the President to 
lead and oversee the indicator performance enhancement efforts. MCC 
anticipates that the GRN will submit the PIP by mid-2008.
    <bullet> LMIC Country Contribution: The GRN has proposed a 
substantial counterpart contribution to the Compact, which primarily 
entails investments in complementary sector programs of ETSIP, 
livestock, and management and business plans for Etosha National Park. 
In addition, the GRN is committing to fund a significant portion of the 
additional line ministry staff expenses required for Compact 
implementation, such as increased staff resources from the Directorate 
of Veterinary Services and the Ministry of Education. As part of 
ensuring sustainability of MCC investments, the GRN will provide 
upfront, detailed budget commitments for all additional recurrent 
expenditures required for the staffing, operations, and maintenance of 
all infrastructure included in the Compact.
    <bullet> Sector-Specific Policy Reforms: The GRN has made several 
notable advancements in the education, tourism, and agriculture 
sectors, encompassing:
Education Project
    <bullet> Enactment of the National Training Fund within the Namibia 
Training Authority under the Vocational Education and Training Act of 
2008;
    <bullet> Establishment and staffing of the National Training 
Authority;
    <bullet> Approval of a new National Textbook Policy for primary and 
secondary schools (2008); and
    <bullet> Adoption of policies for the Colleges of Education to 
allow for their semi-autonomy and introduction of performance 
contracts.
Tourism Project
    <bullet> Adoption of Ministry of Environment and Tourism Strategic 
Plan;
    <bullet> Adoption of Etosha National Park Management Plan and 
Business Plan; and
    <bullet> Passage of the Environmental Management Bill into law 
establishing mandatory environmental review and mitigation procedures 
in Namibia (2007).
Agriculture Project
    <bullet> Drafting the Access to Genetic Resources and Associated 
Traditional Knowledge bill that regulates the methods of harvesting and 
cultivation of indigenous natural products (passage into law by the 
Namibian Parliament and enactment by its President pending).
C. Environmental and Social Assessment
Education Project
    The education project is considered a Category B project due to the 
environmental and social impacts that will result from the activities. 
The GRN will identify and assess environmental impacts as a result of 
detailed design work completed prior to entry into force. Limited 
resettlement impacts are anticipated to result from the education 
project. MCA-Namibia and the Ministry of Education have been 
coordinating with local communities on the acquisition of land in 
compliance with World Bank Operational Policy 4.12 on Involuntary 
Resettlement in advance of the MCC investments. No resettlement impacts 
are anticipated to result from the infrastructure investments at the 
general schools.
    The education project is expected to lead to beneficial gender and 
social impacts by providing improved services and facilities to 
targeted communities. The COSDECs will benefit unemployed

[[Page 46724]]

youth, women, and low-skilled adults by providing training in 
entrepreneurship, business management, and other vocational skills 
critical to the local labor market. The proposed improvements at the 
approximately 47 general schools, including the provision of water and 
sanitation and new construction designs that provide disability access, 
will improve the quality of and access to schools for female and 
disabled learners.
    HIV/AIDS education needs strengthening as the guidance and support 
to teachers and trainers is limited. HIV/AIDS awareness and prevention 
plans will also be implemented on construction contracts, where each 
facility is located for the schools, COSDECs, and RSRCs.
Tourism Project
    The tourism project is categorized as a Category A project due to 
potential site-specific environmental and social impacts in sensitive 
areas anticipated from the construction of national park management 
centers in fragile ecosystems home to small populations of vulnerable 
ethnic groups. Tourism development activities supported through an 
independent fund established to provide community-based wildlife 
organizations with equity shares in tourism joint-ventures and support 
for wildlife relocation activities will be classified as Category D. 
While the environmental and social impacts of Compact-supported tourism 
activities are not anticipated to be significant in nature, they are 
occurring in sensitive areas and will require mitigation through 
environmental management plans, as well as support to ongoing voluntary 
resettlement actions to provide land for the San ethnic group outside 
of national parks.
    The construction and rehabilitation of management centers in Etosha 
National Park will require an environmental impact assessment and site-
specific environmental management plans. Social safeguards associated 
with the Etosha National Park management centers will include the 
implementation of HIV/AIDS awareness and prevention programs for both 
national park staff and construction contractors, and conditions to 
ensure park employees have access to schools for their children.
    Women and vulnerable groups have been actively involved in land 
management, resource governance, and revenue-generating activities 
through the tourism sector in Namibia, and MCC's investment will ensure 
their continued participation. Membership in the conservancies is 
almost equally split between men and women, and as of January 2006, 
women comprised 37 percent of all conservancy management committee 
members. Underrepresented groups, such as San and Himba peoples, are 
active members in conservancies in their traditional homelands, which 
provide them with revenue generating opportunities previously 
unavailable, and MCC funding will be used to increase economic 
opportunities through tourism on conservancies in San and Himba 
homelands.
Agriculture Project
    The land access and management activity is a Category B activity 
due to potential site-specific environmental impacts stemming from land 
use management decisions. These impacts are not anticipated to be 
significant and can be mitigated through environmental management plans 
and participatory community-level decision making processes.
    The communal land support sub-activity is intended to reduce land 
degradation and provide more secure access to land for the residents of 
the NCAs. Additionally, the community-based rangeland and livestock 
management sub-activity is intended to improve the productivity of 
grasslands and provide communities with the ability to plan their 
grazing for more sustainable land use. However, MCC-funded 
interventions intended to improve land use and clarify ownership rights 
could lead to the involuntary loss of livelihood access or resettlement 
if community-based land use planning actions are abused by elites.
    The livestock support activity is a Category B activity due to 
potential site-specific environmental impacts resulting from the 
construction and operation of veterinary centers, rehabilitation of 
quarantine camps, and construction of community, municipal or private 
sector livestock marketing facilities through matching funds from MCC. 
As the livestock market efficiency improvement intervention involves an 
intermediate funding facility, it is a Category D investment. While 
these impacts are not anticipated to be significant in nature, they 
will require mitigation through environmental management plans.
    MCA-Namibia will procure an environmental assessment to analyze 
potential environmental impacts of the livestock infrastructure 
construction and rehabilitation, and develop site-specific 
environmental mitigation plans for each site. Given the remote location 
of these facilities, specific measures will need to be integrated into 
the final design of these facilities to ensure proper disposal so that 
untreated wastes do not go directly into streams or rivers, as is the 
case in some areas.
    For any veterinary infrastructure built through the livestock 
market efficiency improvement fund, MCA-Namibia will develop 
environmental screening and siting criteria, as well as guidelines for 
environmental procedures to follow during construction and operation of 
these facilities. Periodic and random performance audits of 
infrastructure funding recipients will take place to ensure they are 
complying with these requirements.
    The INP activity is a Category A activity due to potentially 
significant environmental impacts anticipated to result from increased 
harvesting, utilization, and export of species listed for protection 
under the Convention on the International Trade of Endangered Species.

Millennium Challenge Compact Between the United States of America 
Acting Through the Millennium Challenge Corporation and the Republic of 
Namibia

Table of Contents

Article 1. Goal and Objectives
    Section 1.1 Compact Goal
    Section 1.2 Program Objective
    Section 1.3 Project Objectives
Article 2. Funding and Resources
    Section 2.1 Program Funding
    Section 2.2 Compact Implementation Funding
    Section 2.3 MCC Funding
    Section 2.4 Disbursement
    Section 2.5 Interest
    Section 2.6 Namibia Resources; Budget
    Section 2.7 Limitations on the Use of MCC Funding
    Section 2.8 Taxes
    Section 2.9 Lower Middle Income Countries
Article 3. Implementation
    Section 3.1 Program Implementation Agreement
    Section 3.2 Responsibilities
    Section 3.3 Policy Performance
    Section 3.4 Assurances
    Section 3.5 Implementation Letter
    Section 3.6 Procurement
    Section 3.7 Records; Accounting; Covered Providers; Access
    Section 3.8 Audits; Reviews
Article 4. Communications
    Section 4.1 Communications
    Section 4.2 Representatives
    Section 4.3 Signatures
Article 5. Termination; Suspension; Refunds
    Section 5.1 Termination; Suspension
    Section 5.2 Refunds; Violation
    Section 5.3 Survival
    Section 5.4 Post-Termination Discussions
Article 6. Compact Annexes; Amendments; Governing Law
    Section 6.1 Annexes
    Section 6.2 Amendments
    Section 6.3 Inconsistencies
    Section 6.4 Governing Law

[[Page 46725]]

    Section 6.5 Additional Instruments
    Section 6.6 References to MCC Web site
    Section 6.7 References to Law, Regulations, Policies and 
Guidelines
    Section 6.8 MCC Status
Article 7. Entry Into Force
    Section 7.1 Domestic Requirements
    Section 7.2 Conditions Precedent to Entry into Force
    Section 7.3 Date of Entry into Force
    Section 7.4 Compact Term
    Section 7.5 Provisional Application
Annex I: Program Description
Annex II: Multi-Year Financial Plan Summary
Annex III: Description of the Monitoring and Evaluation Plan
Annex IV: Conditions to Disbursement of Compact Implementation 
Funding
Annex V: Definitions
Annex VI: MCA-Namibia Procurement Rules

Millennium Challenge Compact Preamble

    This Millennium Challenge Compact (this ``Compact'') is between the 
United States of America, acting through the Millennium Challenge 
Corporation, a United States government corporation (``MCC''), and the 
Republic of Namibia (``Namibia'') (individually a ``Party'' and 
collectively, the ``Parties'').
    Recalling that Namibia consulted with the private sector and civil 
society of the Republic of Namibia to determine the priorities for the 
use of Millennium Challenge Account assistance and developed and 
submitted to MCC a proposal focused on poverty reduction through 
improving human resources, capacities and skills, enhancing public and 
private sector investment in tourism and increasing agricultural 
productivity; and
    Recognizing that MCC wishes to help the Republic of Namibia 
implement a program to achieve the goal and objectives described herein 
(the ``Program'');
    Capitalized terms used herein shall have the meanings specified in 
Annex V hereto.
    The Parties hereby agree as follows:

Article 1. Goal and Objectives

Section 1.1 Compact Goal
    The goal of this Compact is to reduce poverty in the Republic of 
Namibia through economic growth (the ``Compact Goal'').
Section 1.2 Program Objective
    The objective of the Program (as further described in Annex I) (the 
``Program Objective'') is to increase the competence of the Namibian 
workforce (knowledge, skills and attitude), and increase the 
productivity of agricultural and non-agricultural enterprises in rural 
areas.
Section 1.3 Project Objectives
    The objectives of the Projects (as further described in Annex I) 
(each a ``Project Objective'' and collectively, the ``Project 
Objectives'') are:
    (a) The objective of the Education Project is to improve the 
quality of the workforce in Namibia by enhancing the equity and 
effectiveness of basic, vocational, and tertiary education and of 
technical skills.
    (b) The objective of the Tourism Project is to grow the Namibian 
tourism industry with explicit targeting of income streams to 
conservancy households.
    (c) The objective of the Agriculture Project is to increase the 
total value added from livestock in the northern communal areas of the 
Republic of Namibia and to increase income from indigenous natural 
products accruing to the poor nationwide.

Article 2. Funding and Resources

Section 2.1 Program Funding
    MCC hereby grants to Namibia, under the terms of this Compact, an 
amount not to exceed Three Hundred Four Million Four Hundred Seventy-
Seven Thousand Eight Hundred Sixteen United States Dollars 
(US$304,477,816) (``Program Funding'') for use by Namibia to implement 
the Program. The allocation of Program Funding is generally described 
in Annex II to this Compact.
Section 2.2 Compact Implementation Funding
    (a) MCC hereby grants to Namibia, under the terms of this Compact, 
in addition to the Program Funding described in Section 2.1, an amount 
not to exceed Nineteen Million Five Hundred Forty-Three Thousand One 
Hundred Seventy-Five United States Dollars (US$19,543,175) (``Compact 
Implementation Funding'') under Section 609(g) of the Millennium 
Challenge Act of 2003, as amended (the ``MCA Act''), for use by Namibia 
for the following purposes:
    (i) Fiscal and procurement administration activities and costs 
(including, for example, costs related to standby agents procured by 
MCC);
    (ii) Administrative activities including start-up costs such as 
staff salaries and administrative support expenses such as rent, 
computers and other information technology or capital equipment;
    (iii) Baseline surveys for monitoring and evaluation;
    (iv) Additional work for feasibility studies and development of 
technical scopes; and
    (v) Other Compact implementation activities approved by MCC.
    The allocation of Compact Implementation Funding is generally 
described in Annex II to this Compact.
    (b) Notwithstanding Section 7.3 of this Compact, as of the date 
that this Compact is signed by MCC and Namibia (i) this Section 2.2 
shall be effective, and (ii) any other provisions of this Compact 
applicable to Compact Implementation Funding shall be effective for 
purposes of Compact Implementation Funding only, provided that the MCA-
Namibia Procurement Rules will only be effective after ratification of 
this Compact by Namibia.
    (c) Each Disbursement (as defined in Section 2.4) of Compact 
Implementation Funding shall be subject to satisfaction of the 
conditions to such disbursement as set forth on Annex IV.
    (d) If, after the first anniversary of this Compact entering into 
force, MCC determines that the full amount of Compact Implementation 
Funding under Section 2.2(a) of this Compact exceeds the amount which 
reasonably can be utilized for the purposes and uses set forth in 
Section 2.2(a) of this Compact, MCC, by written notice to Namibia, may 
withdraw the excess amount, thereby reducing the amount of the Compact 
Implementation Funding as set forth in Section 2.2(a) (such excess, the 
``Excess CIF Amount''). In such event, the amount of Compact 
Implementation Funding granted to Namibia under Section 2.2(a) will be 
reduced by the Excess CIF Amount, and MCC will have no further 
obligations with respect to such Excess CIF Amount.
    (e) MCC, at MCC's option by written notice to Namibia, may elect to 
grant to Namibia an amount equal to all or a portion of such Excess CIF 
Amount as an increase in the Program Funding, and such additional 
Program Funding will be subject to the terms and conditions of this 
Compact applicable to Program Funding.
Section 2.3 MCC Funding
    Program Funding and Compact Implementation Funding are collectively 
referred to in this Compact as ``MCC Funding.''
Section 2.4 Disbursement
    In accordance with this Compact and the Program Implementation 
Agreement (as defined in Section 3.1), MCC will disburse MCC Funding 
for expenditures incurred in furtherance of the Program (each instance, 
a ``Disbursement''). Subject to the satisfaction of all applicable 
conditions, the proceeds of such Disbursements will be made

[[Page 46726]]

available to Namibia, at MCC's sole election, by (a) deposit to one or 
more bank accounts established by Namibia and acceptable to MCC (each, 
a ``Permitted Account'') or (b) direct payment to the relevant provider 
of goods, works or services in connection with the implementation of 
the Program. MCC Funding may be expended only to cover Program 
expenditures as provided in this Compact and the Program Implementation 
Agreement.
Section 2.5 Interest
    Namibia will pay to MCC any interest or other earnings that accrue 
on MCC Funding in accordance with the Program Implementation Agreement 
(whether by directing such payments to a bank account outside Namibia 
that MCC may from time to time indicate or as otherwise directed by 
MCC).
Section 2.6 Namibia Resources; Budget
    (a) In accordance with Section 609(b)(2) of the MCA Act, Namibia 
will make a contribution towards meeting the Objectives of this 
Compact. Annex II describes such contribution in more detail. In 
addition, Namibia will provide all funds and other resources, and will 
take all actions, that are necessary to carry out Namibia's 
responsibilities and obligations under this Compact.
    (b) Namibia will use its best efforts to ensure that all MCC 
Funding it receives or is projected to receive in each of its fiscal 
years is fully accounted for in its annual budget on a multi-year 
basis.
    (c) Namibia will not reduce the normal and expected resources that 
it would otherwise receive or budget from sources other than MCC for 
the activities contemplated under this Compact and the Program.
    (d) Unless Namibia discloses otherwise to MCC in writing, MCC 
Funding will be in addition to the resources that Namibia would 
otherwise receive or budget for the activities contemplated under this 
Compact and the Program.
Section 2.7 Limitations on the Use of MCC Funding
    Namibia will ensure that MCC Funding will not be used for any 
purpose that would violate United States law or policy, as specified in 
this Compact or as further notified to Namibia in writing or by posting 
on the MCC Web site at http://www.mcc.gov (the ``MCC Web site''), 
including but not limited to the following purposes:
    (a) For assistance to, or training of, the military, police, 
militia, national guard or other quasi-military organization or unit;
    (b) For any activity that is likely to cause a substantial loss of 
United States jobs or a substantial displacement of United States 
production;
    (c) To undertake, fund or otherwise support any activity that is 
likely to cause a significant environmental, health, or safety hazard, 
as further described in MCC's Environmental Guidelines posted on the 
MCC Web site (the ``MCC Environmental Guidelines''); or
    (d) To pay for the performance of abortions as a method of family 
planning or to motivate or coerce any person to practice abortions, to 
pay for the performance of involuntary sterilizations as a method of 
family planning or to coerce or provide any financial incentive to any 
person to undergo sterilizations or to pay for any biomedical research 
which relates, in whole or in part, to methods of, or the performance 
of, abortions or involuntary sterilization as a means of family 
planning.
Section 2.8 Taxes
    (a) Unless the Parties otherwise specifically agree in writing, and 
subject to the provisions of Sections 2.8(b)(ii) and (iii) and 2.8(c), 
Namibia will ensure that each of the following is free from the payment 
of any existing or future taxes, duties, levies, contributions or other 
similar charges (``Taxes'') of or in Namibia (including any such Taxes 
imposed by a national, regional, local or other governmental or taxing 
authority of or in Namibia): (i) The Program; (ii) MCC Funding; (iii) 
interest or earnings on MCC Funding; (iv) any Project or activity 
implemented under the Program; (v) MCA-Namibia (as defined in Section 
3.2(b)) (vi) goods, works, services, technology and other assets and 
activities under the Program or any Project; (vii) persons and entities 
that provide such goods, works, services, technology and assets or 
perform such activities; and (viii) income, profits and payments with 
respect thereto. The Parties acknowledge and agree that the foregoing 
includes, inter alia, value added and other transfer taxes, profit and 
income taxes, property and ad valorem taxes, import and export duties 
and taxes (including for goods imported and re-exported for personal 
use), withholding taxes, payroll taxes, and social security and social 
insurance contributions.
    (b) The GRN and the USG may, at MCC's discretion, enter into one or 
more agreements setting forth the mechanisms for implementing this 
Section 2.8, including (i) waivers of certain filing and compliance 
requirements relating to Taxes, (ii) an agreement on exceptions to 
Section 2.8(a) above for fees or charges for services that are 
generally applicable in Namibia, reasonable in amount and imposed on a 
non-discriminatory basis, and (iii) one or more mechanisms to implement 
the provisions of Section 2.8(a) with respect to all or any of the 
Taxes that would otherwise be applicable, which may include exemptions 
from payment of such Taxes that have been granted in accordance with 
applicable law, refund or reimbursement of such Taxes by the Namibia to 
MCC or to the taxpayer, or payment by Namibia to MCA-Namibia or MCC, 
for the benefit of the Program, of an agreed amount representing any 
collectible Taxes on the items described in Section 2.8(a).
    (c) The provisions of Section 2.8(a) shall not apply to income 
Taxes on and contributions with respect to individuals who are 
nationals of Namibia and individuals who are ordinarily resident in 
Namibia, provided that such Taxes and contributions are equitable and 
are generally applicable to all nationals in Namibia.
    (d) If a Tax has been paid contrary to the requirements of this 
Section 2.8 or any agreement entered into pursuant to this Section 2.8, 
Namibia will refund promptly to MCC (or to another party as designated 
by MCC) the amount of such Tax in Namibia Dollars within thirty (30) 
days (or such other period as may be agreed in writing by the Parties) 
after Namibia is notified in writing (whether by MCC or MCA-Namibia) 
that such Tax has been paid.
    (e) No MCC Funding, proceeds thereof or Program assets may be 
applied by Namibia in satisfaction of its obligations under this 
Section 2.8.
Section 2.9 Lower Middle Income Countries
    Section 606(b) of the MCA Act restricts the amount of assistance 
that MCC may provide to ``lower middle income countries,'' a term that 
is defined in the MCA Act and includes Namibia. To the extent that MCC 
determines, in MCC's reasonable discretion, that the amount of Program 
Funding granted to Namibia in this Compact may result in a violation of 
Section 606(b) of the MCA Act, MCC, at any time and from time to time 
upon written notice to Namibia, may reduce the amount of Program 
Funding, or withhold any Disbursement of Program Funding, to avoid or 
remedy such a violation.

[[Page 46727]]

Article 3. Implementation

Section 3.1 Program Implementation Agreement
    Namibia will implement the Program in accordance with this Compact 
and as further specified in an agreement entered into between the GRN 
and the USG relating to, among other matters, implementation 
arrangements, fiscal accountability and disbursement and use of MCC 
Funding (the ``Program Implementation Agreement'' or ``PIA'').
Section 3.2 Responsibilities
    (a) Namibia has principal responsibility for overseeing and 
managing the implementation of the Program.
    (b) Namibia hereby designates the National Planning Commission 
(``NPC''), a governmental entity established under the laws of the 
Republic of Namibia pursuant to the National Planning Commission Act, 
1994 (the ``NPC Act''), as the accountable entity to implement the 
Program and to perform Namibia's rights and responsibilities to 
oversee, manage and implement the Program, including without 
limitation, managing the implementation of Projects and their 
activities, allocating resources and managing procurements. The NPC, 
acting in such designated capacity, will be referred to herein as 
``MCA-Namibia,'' and has the authority to bind Namibia with regard to 
all Program activities. The designation of this Section 3.2(b) will not 
relieve Namibia of any obligations and rights, for which Namibia 
retains full responsibility.
    (c) Namibia will ensure that no current law or regulation in 
Namibia makes unlawful or otherwise prevents or hinders the performance 
of any of Namibia's obligations under this Compact, the PIA or any 
other related agreement or any transaction contemplated hereby or 
thereby. Furthermore, Namibia will use its best efforts to ensure that 
no future law or regulation in Namibia will make unlawful or otherwise 
prevent or hinder the performance of any of Namibia's obligations under 
this Compact, the PIA or any other related agreement or any transaction 
contemplated hereby or thereby.
    (d) Namibia will ensure that any assets or services funded in whole 
or in part (directly or indirectly) by MCC Funding will be used solely 
in furtherance of this Compact and the Program unless otherwise agreed 
by MCC in writing.
    (e) Namibia will take all necessary or appropriate steps to achieve 
the Program Objective and Project Objectives during the Compact Term 
(as defined in Section 7.4).
Section 3.3 Policy Performance
    In addition to undertaking the specific policy, legal and 
regulatory reform commitments identified in Annex I (if any), Namibia 
will seek to maintain and to improve its level of performance under the 
policy criteria identified in Section 607 of the MCA Act, and the 
selection criteria and methodology used by MCC.
Section 3.4 Assurances
    Namibia assures MCC that:
    (a) As of the date this Compact is signed by Namibia, the 
information provided to MCC by or on behalf of Namibia in the course of 
reaching agreement with MCC on this Compact is true, correct and 
complete in all material respects;
    (b) This Compact, upon its ratification by Namibia, does not, and 
will not, conflict with any other obligation of Namibia, any other 
international agreement or obligation of Namibia or any of the laws of 
Namibia; and
    (c) Namibia will not invoke any of the provisions of its internal 
law to justify or excuse a failure to perform its duties or 
responsibilities under this Compact.
Section 3.5 Implementation Letters
    To assist Namibia in the implementation of this Compact, from time 
to time, MCC may issue implementation letters that will furnish 
additional guidance about implementation of this Compact, the PIA or 
other related agreements (each, an ``Implementation Letter''). The 
Parties may also issue jointly agreed-upon Implementation Letters to 
confirm and record their mutual understanding on aspects related to the 
implementation of this Compact, the PIA or other related agreements. 
Such Implementation Letters will be applied when implementing the 
Program.
Section 3.6 Procurement
    Namibia will ensure that the procurement of all goods, works and 
services by Namibia or any Provider (as defined in Section 3.7(c)) to 
implement the Program will be consistent with the MCA-Namibia Program 
Procurement Rules attached hereto as Annex VI (the ``MCA-Namibia 
Procurement Rules'') as provided for in the Program Implementation 
Agreement. The Procurement Rules will include, among others, the 
following requirements:
    (a) Open, fair, and competitive procedures must be used in a 
transparent manner to solicit, award and administer contracts and to 
procure goods, works and services;
    (b) Solicitations for goods, works, and services must be based upon 
a clear and accurate description of the goods, works and services to be 
acquired;
    (c) Contracts must be awarded only to qualified contractors that 
have the capability and willingness to perform the contracts in 
accordance with their terms on a cost effective and timely basis; and
    (d) No more than a commercially reasonable price, as determined, 
for example, by a comparison of price quotations and market prices, 
will be paid to procure goods, works and services.
Section 3.7 Records; Accounting; Covered Providers; Access
    (a) Namibia Books and Records. Namibia will maintain, and will use 
its best efforts to ensure that all Covered Providers (as defined in 
Section 3.7(c)) maintain accounting books, records, documents and other 
evidence relating to the Program adequate to show to MCC's satisfaction 
the use of all MCC Funding (``Compact Records''). In addition, Namibia 
will furnish or cause to be furnished to MCC, upon its request, all 
such Compact Records.
    (b) Accounting. Namibia will maintain and will use its best efforts 
to ensure that all Covered Providers maintain Compact Records in 
accordance with generally accepted accounting principles prevailing in 
the United States, or at Namibia's option and with MCC's prior written 
approval, other accounting principles, such as those (i) prescribed by 
the International Accounting Standards Board, or (ii) then prevailing 
in Namibia. Compact Records must be maintained for at least five (5) 
years after the end of the Compact Term or for such longer period, if 
any, required to resolve any litigation, claims or audit findings or 
any statutory requirements.
    (c) Providers and Covered Providers. Unless the Parties agree 
otherwise in writing, a ``Provider'' is (i) any entity of Namibia that 
receives or uses MCC Funding or any other Program asset in carrying out 
activities in furtherance of this Compact or (ii) any third party that 
receives at least US$50,000 in the aggregate of MCC Funding (other than 
as salary or compensation as an employee of an entity of Namibia) 
during the Compact Term. A ``Covered Provider'' is (i) a non-United 
States Provider that receives (other than pursuant to a direct contract 
or agreement with MCC) US$300,000 or more of MCC Funding in any Namibia 
fiscal year or any other non-United States person or entity that

[[Page 46728]]

receives, directly or indirectly, US$300,000 or more of MCC Funding 
from any Provider in such fiscal year, or (ii) any United States 
Provider that receives (other than pursuant to a direct contract or 
agreement with MCC) US$500,000 or more of MCC Funding in any Namibia 
fiscal year or any other United States person or entity that receives, 
directly or indirectly, US$500,000 or more of MCC Funding from any 
Provider in such fiscal year.
    (d) Access. Upon MCC's request, Namibia, at all reasonable times, 
will permit, or cause to be permitted, authorized representatives of 
MCC, an authorized United States inspector general, the United States 
Government Accountability Office, any auditor responsible for an audit 
contemplated herein or otherwise conducted in furtherance of this 
Compact, and any agents or representatives engaged by MCC or Namibia to 
conduct any assessment, review or evaluation of the Program, the 
opportunity to audit, review, evaluate or inspect facilities and 
activities funded in whole or in part by MCC Funding.
Section 3.8 Audits; Reviews
    (a) Audits. Except as the Parties may otherwise agree in writing, 
Namibia will, on at least a semi-annual basis, conduct, or cause to be 
conducted, financial audits of all Disbursements of MCC Funding 
covering the period from signing of this Compact until the earlier of 
the following December 31 or June 30 and covering each six-month period 
thereafter ending December 31 and June 30, through the end of the 
Compact Term, in accordance with the terms of the Program 
Implementation Agreement. In addition, upon MCC's request, Namibia will 
ensure that such audits are conducted by an independent auditor 
approved by MCC and named on the list of local auditors approved by the 
Inspector General of MCC (the ``Inspector General'') or a United 
States-based certified public accounting firm selected in accordance 
with the ``Guidelines for Financial Audits Contracted by MCA'' (the 
``Audit Guidelines'') issued and revised from time to time by the 
Inspector General, which are posted on the MCC Web site. Audits will be 
performed in accordance with the Audit Guidelines and be subject to 
quality assurance oversight by the Inspector General. Each audit must 
be completed and the audit report delivered to MCC no later than 90 
days after the first period to be audited and no later than 90 days 
after each June 30 and December 31 thereafter, or such other period as 
the Parties may otherwise agree in writing.
    (b) Audits of United States Entities. Namibia will ensure that 
agreements between Namibia or any Provider, on the one hand, and a 
United States nonprofit organization, on the other hand, that are 
financed with MCC Funding state that the United States nonprofit 
organization is subject to the applicable audit requirements contained 
in OMB Circular A-133 issued by the United States Government Office of 
Management and Budget (``OMB''). Namibia will ensure that agreements 
between Namibia or any Provider, on the one hand, and a United States 
for-profit Covered Provider, on the other hand, that are financed with 
MCC Funding state that the United States for-profit organization is 
subject to audit by the applicable United States Government agency, 
unless Namibia and MCC agree otherwise in writing.
    (c) Corrective Actions. Namibia will use its best efforts to ensure 
that Covered Providers take, where necessary, appropriate and timely 
corrective actions in response to audits, consider whether a Covered 
Provider's audit necessitates adjustment of Namibia's records, and 
require each such Covered Provider to permit independent auditors to 
have access to its records and financial statements as necessary.
    (d) Audit by MCC. MCC will have the right to arrange for audits of 
Namibia's use of MCC Funding.
    (e) Cost of Audits, Reviews or Evaluations. MCC Funding may be used 
to fund the costs of any audits, reviews or evaluations required under 
this Compact.

Article 4. Communications

Section 4.1 Communications
    Any document or communication required or submitted by either Party 
to the other under this Compact must be in writing and, except as 
otherwise agreed with MCC, in English. For this purpose, the address of 
each Party is set forth below.

To MCC:
    Millennium Challenge Corporation, Attention: (a) Before this 
Compact enters into force, Vice President, Compact Development; and (b) 
after this Compact enters into force, Vice President, Compact 
Implementation, (in each case, with a copy to the Vice President and 
General Counsel), 875 Fifteenth Street, NW., Washington, DC 20005, 
United States of America, Facsimile: (202) 521-3700, Telephone: (202) 
521-3600, E-mail: <a href="/cdn-cgi/l/email-protection#c1979185a4b7a4adaeb1aca4afb581aca2a2efa6aeb7"><span class="__cf_email__" data-cfemail="d0868094b5a6b5bcbfa0bdb5bea490bdb3b3feb7bfa6">[email protected]</span></a> (Vice President, Compact 
Development), <a href="/cdn-cgi/l/email-protection#d385839abea3bfb6beb6bda7b2a7babcbd93beb0b0fdb4bca5"><span class="__cf_email__" data-cfemail="1244425b7f627e777f777c6673667b7d7c527f71713c757d64">[email protected]</span></a> (Vice President, Compact 
Implementation), <a href="/cdn-cgi/l/email-protection#e2b4b2a5878c8790838ea18d978c91878ea28f8181cc858d94"><span class="__cf_email__" data-cfemail="7b2d2b3c1e151e091a1738140e15081e173b161818551c140d">[email protected]</span></a> (Vice President and General 
Counsel).

To Namibia:

    The Director General, National Planning Commission, Office of the 
President, Government Office Park, Luther Street, Block D, Room 206, 
Private Bag 12005, Windhoek, Republic of Namibia, Tel: +264 61 283 
4222, Fax: +264 61 250 751.

with a copy to:

    MCA-Namibia, Attention: Chief Executive Officer, c/o National 
Planning Commission, Office of the President, Government Office Park, 
Luther Street, Block D, Room 206, Private Bag 12005, Windhoek, Republic 
of Namibia, Tel: +264 61 283 4222, Fax: +264 61 250 751.
Section 4.2 Representatives
    For all purposes of this Compact (including, without limitation, 
signing agreements supplemental to this Compact), Namibia will be 
represented by the individual holding the position of, or acting as, 
the Director General of NPC, and MCC will be represented by (a) before 
this Compact enters into force, the individual holding the position of, 
or acting as, Vice President, Compact Development, and (b) after this 
Compact enters into force, the individual holding the position of, or 
acting as, Vice President, Compact Implementation (each of the 
foregoing, a ``Principal Representative''). Each Party, by written 
notice to the other Party, may designate one or more additional 
representatives (each, an ``Additional Representative'') for all 
purposes other than signing amendments to this Compact. Namibia hereby 
designates the chief executive officer of MCA-Namibia as an Additional 
Officer. A Party may change its Principal Representative to a new 
representative that holds a position of equal or higher rank upon 
written notice to the other Party.
Section 4.3 Signatures
    With respect to all documents other than this Compact or an 
amendment to this Compact, a signature delivered by facsimile or 
electronic mail will be binding on the Party delivering such signature 
to the same extent as an original signature would be.

Article 5. Termination; Suspension; Refunds

Section 5.1 Termination; Suspension
    (a) Either Party may terminate this Compact without cause in its 
entirety by giving the other Party thirty (30) days' written notice.

[[Page 46729]]

    (b) MCC may, immediately, upon written notice to Namibia, suspend 
or terminate this Compact or MCC Funding, in whole or in part, and any 
obligation related thereto, if MCC determines that any circumstance 
identified by MCC, in its reasonable discretion, as a basis for 
suspension or termination has occurred, which circumstances include but 
are not limited to the following:
    (i) Namibia fails to comply with its obligations under this 
Compact, the PIA or any other agreement or arrangement entered into by 
Namibia in connection with this Compact or the Program;
    (ii) An event or series of events has occurred that MCC determines 
makes it probable that the Program Objective or any of the Project 
Objectives will not be achieved during the Compact Term or that Namibia 
will not be able to perform its obligations under this Compact;
    (iii) A use of MCC Funding or continued implementation of the 
Program violates or would violate applicable law or United States 
Government policy, whether now or hereafter in effect;
    (iv) Namibia or any other person or entity receiving MCC Funding or 
using assets acquired in whole or in part with MCC Funding is engaged 
in activities that are contrary to the national security interests of 
the United States;
    (v) an act has been committed or an omission or an event has 
occurred that would render Namibia ineligible to receive United States 
economic assistance under Part I of the Foreign Assistance Act of 1961, 
as amended (22 U.S.C. 2151 et seq.), by reason of the application of 
any provision of the Foreign Assistance Act of 1961 or any other 
provision of law;
    (vi) Namibia has engaged in a pattern of actions inconsistent with 
the criteria used to determine the eligibility of Namibia for 
assistance under the MCA Act ; and
    (vii) Namibia or another person or entity receiving MCC Funding or 
using assets acquired in whole or in part with MCC Funding is found to 
have been convicted of a narcotics offense or to have been engaged in 
drug trafficking.
    (c) All Disbursements will cease upon expiration, suspension, or 
termination of this Compact; provided, however, MCC Funding may be 
used, in compliance with this Compact and the PIA, to pay for (i) 
reasonable expenditures for goods, works or services that are properly 
incurred under or in furtherance of the Program before expiration, 
suspension or termination of this Compact, and (ii) reasonable 
expenditures (including administrative expenses) properly incurred in 
connection with the winding up of the Program within 120 days after the 
expiration, suspension or termination of this Compact, so long as the 
request for such expenditures is submitted within ninety (90) days 
after such expiration, suspension or termination.
    (d) Subject to Section 5.1(c), upon the expiration, suspension or 
termination of this Compact, (i) any amounts of MCC Funding not 
disbursed by MCC to Namibia will be automatically released from any 
obligation in connection with this Compact, and (ii) any amounts of MCC 
Funding disbursed by MCC but not expended before the expiration, 
suspension or termination of this Compact, plus accrued interest 
thereon will be returned to MCC within thirty (30) days after Namibia 
receives MCC's request for such return; provided, however, that if this 
Compact is suspended or terminated in part, MCC may request a refund 
for only the amount of MCC Funding allocated to the suspended or 
terminated portion.
    (e) MCC may reinstate any suspended or terminated MCC Funding under 
this Compact if MCC determines that Namibia or other relevant person or 
entity has committed to correct each condition for which MCC Funding 
was suspended or terminated.
Section 5.2 Refunds; Violation
    (a) If any MCC Funding, any interest or earnings thereon, or any 
asset acquired in whole or in part with MCC Funding is used for any 
purpose in violation of the terms of this Compact, then MCC may require 
Namibia to repay to MCC in United States Dollars the value of the 
misused MCC Funding, interest, earnings, or asset, plus interest within 
thirty (30) days after Namibia's receipt of MCC's request for 
repayment. Namibia will not use MCC Funding, proceeds thereof or 
Program assets to make such payment.
    (b) Notwithstanding any other provision in this Compact or any 
other agreement to the contrary, MCC's right under this Section 5.2 for 
a refund will continue during the Compact Term and for a period of (i) 
five years thereafter or (ii) one year after MCC receives actual 
knowledge of such violation, whichever is later.
Section 5.3 Survival
    Namibia's responsibilities under Sections 2.4, 2.6, 2.7, 3.7, 3.8, 
5.1(c), 5.1(d), 5.2, 5.3, 5.4 and 6.2 of this Compact will survive the 
expiration, suspension or termination of this Compact.
Section 5.4 Post-Termination Discussions
    Following the termination of this Compact pursuant to Section 
5.1(b), at Namibia's request, the Parties will meet at a mutually 
convenient time and location for the purpose of notifying Namibia of 
the circumstances or reasons for such termination to the extent it has 
not previously received such notice. Notwithstanding the Parties' 
agreement to meet, which will be honored in good faith, any matters 
discussed will be non-binding (unless otherwise agreed and recorded by 
the Parties), will not give rise to a claim by either Party, and MCC 
will not be obligated to reinstate the Compact following any such 
meeting.

Article 6. Compact Annexes; Amendments; Governing Law

Section 6.1 Annexes
    Each annex to this Compact constitutes an integral part hereof, and 
references to ``Annex'' mean an annex to this Compact unless otherwise 
expressly stated.
Section 6.2 Amendments
    (a) The Parties may amend this Compact only by a written agreement 
signed by the Principal Representatives.
    (b) Without formally amending this Compact, the Parties may agree 
in writing, signed by the Principal Representatives, to modify any 
Annex to this Compact to (i) suspend, terminate or modify any project 
described in Annex I (each, a ``Project'' and collectively, the 
``Projects'') or to create a new project, (ii) change the designations 
and allocations of funds among the Projects, the Project activities, or 
any activity under Program administration or monitoring and evaluation, 
or between a Project identified as of the entry into force of this 
Compact and a new project, or (iii) add, delete or waive any condition 
precedent described in Annex IV, or (iv) amend the MCA-Namibia 
Procurement Rules, provided that any such modification (1) is 
consistent in all material respects with the Program Objective, (2) 
does not cause the amount of Program Funding to exceed the aggregate 
amount specified in Section 2.1 of this Compact (as may be modified by 
operation of Section 2.2(e) of this Compact), (3) does not cause the 
amount of Compact Implementation Funding to exceed the aggregate amount 
specified in Section 2.2(a) of this Compact, (4) does not cause 
Namibia's responsibilities or contribution of resources to be less than 
specified in this Compact, (5) does not extend the Compact Term and (6) 
in the case of a

[[Page 46730]]

modification to change the designations or allocations of funds among 
Projects, does not materially adversely affect any activity under 
Program administration or monitoring and evaluation.
    (c) Any modification of any annex to this Compact or to any other 
provision of this Compact pursuant to this Section 6.2 shall be binding 
on Namibia without the need for further ratification by Namibia, any 
further parliamentary action, or satisfaction of any additional 
domestic requirements of Namibia.
Section 6.3 Inconsistencies
    In the event of any conflict or inconsistency between:
    (a) any annex to this Compact and any of Articles 1 through 7, such 
Articles 1 through 7 will prevail; or
    (b) this Compact and any other agreement between the Parties 
regarding the Program, this Compact will prevail.
Section 6.4 Governing Law
    This Compact is an international agreement and as such is governed 
by the principles of international law.
Section 6.5 Additional Instruments
    Any reference to activities, obligations or rights undertaken or 
existing under or in furtherance of this Compact or similar language 
will include activities, obligations and rights undertaken by, existing 
under or in furtherance of any agreement, document or instrument 
related to this Compact and the Program.
Section 6.6 References to MCC Web Site
    Any reference in this Compact, the PIA or any other agreement 
entered into in connection with this Compact, to a document or 
information available on, or notified by posting on the MCC Web site 
will be deemed a reference to such document or information as updated 
or substituted on the MCC Web site from time to time.
Section 6.7 References to Laws, Regulations, Policies and Guidelines
    Each reference in this Compact, the PIA or any other agreement 
entered into in connection with this Compact, to a law, regulation, 
policy, guideline or similar document will be construed as a reference 
to such law, regulation, policy, guideline or similar document as it 
may, from time to time, be amended, revised, replaced, or extended and 
will include any law, regulation, policy, guideline or similar document 
issued under or otherwise applicable or related to such law, 
regulation, policy, guideline or similar document.
Section 6.8 MCC Status
    MCC is a United States Government corporation acting on behalf of 
the United States Government in the implementation of this Compact. MCC 
and the United States Government have no liability under this Compact, 
the Program Implementation Agreement or any supplemental agreement, are 
immune from any action or proceeding arising under or relating to any 
of the foregoing documents, and Namibia hereby waives and releases all 
claims related to any such liability. In matters arising under or 
relating to this Compact, the Program Implementation Agreement, or any 
supplemental agreement, neither MCC nor the United States Government 
will be subject to the jurisdiction of the courts or any other body of 
Namibia.

Article 7. Entry Into Force

Section 7.1 Domestic Requirements
    Before this Compact enters into force, Namibia will take all 
necessary steps to ensure that immediately upon this Compact entering 
into force, (a) this Compact and the PIA and all of the provisions of 
this Compact and the PIA are valid and binding and are in full force 
and effect in Namibia, (b) this Compact, the PIA and any other 
agreement entered into in connection with this Compact to which Namibia 
and MCC are parties (if so stipulated therein) are international 
agreements, and (c) no laws of Namibia (other than the constitution of 
Namibia), whether now or hereafter in effect, will take precedence or 
prevail over the terms of this Compact or the PIA.
Section 7.2 Conditions Precedent to Entry Into Force
    This Compact will not enter into force unless and until each of the 
following conditions have been satisfied:
    (a) The PIA must have been executed by the parties thereto and have 
become effective;
    (b) Namibia must have delivered to MCC:
    (i) A certificate signed and dated by the Principal Representative 
of Namibia, or such other duly authorized representative of Namibia 
acceptable to MCC, certifying that Namibia has satisfied the 
requirements of Section 7.1;
    (ii) A legal opinion from the Attorney General of Namibia (or other 
entity acceptable to MCC), in form and substance satisfactory to MCC; 
and
    (iii) A certified copy of the Instrument of Ratification evidencing 
the ratification of this Compact by Namibia, which MCC may post on its 
Web site or otherwise make publicly available; and
    (c) MCC must determine that after signature of this Compact, 
Namibia has not engaged in any action or omission that is inconsistent 
with the eligibility criteria for MCC Funding.
Section 7.3 Date of Entry Into Force
    This Compact will enter into force on the later of (a) the date of 
the last letter in an exchange of letters between the Principal 
Representatives confirming that each Party has completed its domestic 
requirements for entry into force of this Compact and (b) the date that 
all conditions set forth in Section 7.2 have been satisfied.
Section 7.4 Compact Term
    This Compact will remain in force for five years after its entry 
into force, unless terminated earlier under Section 5.1 (the ``Compact 
Term'').
Section 7.5 Provisional Application
    Upon signature of this Compact and ratification by Namibia of this 
Compact and until it has entered into force in accordance with Section 
7.3, the Parties will provisionally apply the terms of this Compact, 
provided that no MCC Funding, other than Compact Implementation 
Funding, will be made available or disbursed before this Compact enters 
into force.
    In Witness Whereof, the undersigned, duly authorized, have signed 
this Compact this 28th day of July, 2008.
    Done at Windhoek, Namibia.
    For Millennium Challenge Corporation, on behalf of the United 
States of America, Name: Rodney G. Bent, Title: Deputy Chief Executive 
Officer.
    For the Republic of Namibia, Name: Professor Peter H. Katjavivi, 
Title: Director-General, National Planning Commission.

Annex I Program Description

A. Program Overview

    This Annex I describes the Program that MCC Funding will support in 
Namibia during the Compact Term.
1. Background and Consultative Process
    (a) Background.
    Namibia, a large and sparsely populated country on Africa's 
southwest coast, has a population of approximately 2.1 million. It 
gained independence in 1990 after a century of foreign domination, 
including a period of half a century of apartheid. While the country 
has experienced steady economic growth since achieving

[[Page 46731]]

independence,\1\ as a consequence of its history, approximately 27 
percent \2\ of its population lives in poverty (particularly in the 
northern communal areas or ``NCAs''), and in 2006 its per capita income 
was just US$3,000.\3\ Additionally, the distribution of wealth and 
income within the country is highly unequal.\4\ Unemployment is high 
(approximately 30 percent in 2006) and the HIV prevalence rate is more 
than 19 percent.\5\ Despite facing such seemingly daunting obstacles to 
improving its social and economic conditions, Namibia is committed to 
providing equal opportunity to previously disadvantaged populations, 
while maintaining political and economic stability.
---------------------------------------------------------------------------

    \1\ According to the World Bank's ``International Bank for 
Reconstruction and Development Interim Strategy Note: An Engagement 
Framework for the Republic of Namibia for FY 08-09,'' April 25, 
2007, Namibia has experienced an average of 4.3 percent economic 
growth per annum.
    \2\ Ibid.
    \3\ Ibid.
    \4\ According to International Monetary Fund report (``Namibia: 
2007 Article IV Consultation--Staff Report; Public Information 
Notice on the Executive Board Discussion; and Statement by the 
Executive Director for Namibia,'' February 2008), Namibia has the 
second highest Gini coefficient in the world at 0.64.
    \5\ http://www.unicef.org/infobycountry/namibia_statistics.html.
---------------------------------------------------------------------------

    The Compact Goal is to reduce poverty through economic growth in 
Namibia. One of the ways to achieve such poverty reduction in Namibia 
is to create a skilled and educated labor force. Another way is to 
expand and diversify the economy's export base, which is currently 
narrowly focused on mineral commodities, by supporting sectors such as 
livestock, indigenous natural products and tourism. The Program will 
focus on improving the quality of education and training for 
underserved populations, and attempt to capitalize on Namibia's 
comparative advantages, namely large areas of semi-arid communal land 
suitable for livestock grazing, natural products indigenous to Namibia, 
and diverse wildlife and unique landscapes ideal for ecotourism. This 
approach is expected to have the greatest impact on alleviating 
poverty.
    (b) Consultative Process.
    In connection with its proposal for this Compact, Namibia undertook 
an extensive consultative process. Namibia held consultations in all 13 
regions of the country and began national level consultations in mid-
2006, which have been on-going particularly in those sectors that the 
Program will support. Participating stakeholders included government 
officials at central and regional levels, local authority councilors 
and stakeholders, regional coordination committees, regional AIDS 
committees, regional emergency units, communal land boards (``CLBs''), 
farmers' associations, conservancy groups, women's associations, church 
groups, youth groups, vulnerable members of society, non-governmental 
organizations (NGOs), community based organizations, and the private 
sector.
    Worthy of note is the fact that the consultative process did not 
reveal a major divergence between the issues identified at national and 
regional levels. This appears to confirm that, in general, there is 
consensus within Namibia on priorities for economic growth. This 
consensus was built on previous consultative processes for Vision 
2030,\6\ the 5-year National Development Plans, Participatory Poverty 
Assessments and other sector-level consultations. MCA-Namibia, in close 
consultation and cooperation with the stakeholders for each of the 
Program's components, will continue to consult and inform Namibians 
country-wide on this Compact to ensure broad-based understanding, 
appreciation, commitment, and ownership of the proposed investments.
---------------------------------------------------------------------------

    \6\ Launched by H.E. President Sam Nujoma, in June 2004, Vision 
2030 is the Government's long-term national strategy for development 
ending in the year 2030.
---------------------------------------------------------------------------

2. Description of Program and Beneficiaries \7\
    The Program, whose objective is to increase the knowledge, skills 
and competence of the Namibian workforce, and to increase the 
productivity of agricultural and non-agricultural enterprises in 
communal areas, consists of three Projects: the Education Project, the 
Tourism Project and the Agriculture Project. Each Project (the details 
of which are set forth below) is designed to help address Namibia's 
constraints to economic growth and lead to sustainable poverty 
reduction. Specifically, the Education Project aims to increase skilled 
labor by helping to create a more efficient and effective educational 
system that will benefit approximately 1,000,000 young people, and 
ultimately increase employment opportunities. The Tourism Project will 
stimulate investment and income generation in poor, rural communities 
through increasing the income for an estimated 23,000 tourism-related 
employees and benefitting over 100,000 individuals living in 
conservancies. Lastly, the Agriculture Project will improve 
productivity in the livestock and INP sectors, and contribute to 
enhanced household incomes for over 400,000 Namibians.
---------------------------------------------------------------------------

    \7\ Figures in this section refer to MCC's economic and 
beneficiary analysis for a period of 20 years and refer to direct 
and indirect beneficiaries.
---------------------------------------------------------------------------

    Specific anticipated results of the Program over a twenty-year 
period include:
    (a) A higher quality of education for approximately one million 
primary and secondary school learners across Namibia from an improved 
delivery system for textbooks;
    (b) Access to financing for tertiary education for at least 60 
percent of all qualifying applicants demonstrating financial need;
    (c) Training of up to 49,000 low-income individuals who are either 
unemployed and/or unskilled at the Community Skills and Development 
Centers (``COSDECs'');
    (d) Training in the tourism sector for more than 2,600 additional 
trainees and training in other high-priority vocational areas (to be 
further indentified) for additional students under an improved capacity 
for market-relevant training in the competitive grants program;
    (e) A higher quality of education for approximately 41,700 
students, primarily in rural communities, and which is expected to 
result in higher lifetime income for these students due to the proposed 
investments in the targeted primary and secondary schools;
    (f) An increase in tourism by an estimated 4,000 additional 
overseas tourists per year as a result of marketing activities, 
resulting in an incremental present added value by these tourists of 
approximately US$7 million;
    (g) Increased employment income for over 7,000 individuals due to 
enhanced investment in conservancies;
    (h) Increased tourism visits and value added to the Namibian 
economy resulting from investments in Etosha National Park;
    (i) Either increased employment, wages or household income for an 
estimated 23,000 people as a result of the Tourism Project;
    (j) Improved market efficiency, improved land tenure security, and 
more equitable access to land benefitting over 130,000 individuals;
    (k) Increased income to approximately 1,800 farmers across 50 
communities due to the rangeland management component; and
    (l) Increased incomes for over 15,000 households as a result of the 
Indigenous Natural Products (``INP'') component of the Agriculture 
Project.
3. Environmental and Social Accountability
    All of the Projects will be implemented in compliance with the

[[Page 46732]]

MCC Environmental Guidelines, MCC's guidance on the integration of 
gender in Program implementation delivered by MCC to Namibia or posted 
on the MCC Web site (the ``MCC Gender Policy'') and the World Bank's 
Operational Policy on Involuntary Resettlement in effect as of July 
2007 (``OP 4.12''). Namibia will also ensure that the Projects comply 
with all national environmental laws and regulations, licenses and 
permits, except to the extent such compliance would be inconsistent 
with this Compact. Namibia will: (a) Undertake and complete any 
strategic environmental (and social) assessments (``SEA''), 
environmental impact assessments (``EIA''), environmental assessments 
(``EA''), environmental management plans (``EMP'') and resettlement 
action plans (``RAP''), in form and substance satisfactory to MCC, and 
as required under the laws of Namibia, the MCC Environmental 
Guidelines, this Compact, the Program Implementation Agreement or other 
supplement agreement or as otherwise required by MCC; (b) implement to 
MCC's satisfaction environmental and social mitigation measures 
identified in such assessments or plans; and (c) commit to fund 
environmental mitigation, (including costs of resettlement) in excess 
of MCC Funding not specifically provided for in the budget for any 
Project.

Description of Projects

    Set forth below is a description of each of the Projects that 
Namibia will implement, or cause to be implemented, using MCC Funding 
to advance the applicable Project Objective. In addition, specific 
activities that will be undertaken within each Project (each, an 
``Activity''), including sub-activities, are also described.

B. Education Project

1. Summary of Project and Activities
    MCC Funding will be used to improve the effectiveness, efficiency 
and quality of Namibia's education sector through systemic reforms and 
critical near-term interventions that are consistent with the 
objectives of Namibia's ETSIP Program (the ``Education Project''). 
ETSIP is Namibia's 15-year sector-wide Education and Training Sector 
Improvement Program, whose mission is to create a knowledge-based 
economy through increasing the effectiveness, efficiency and quality of 
Namibia's education and training system. Specifically, MCC Funding will 
support key gaps within ETSIP, as well as fund complementary measures, 
such as institutional strengthening, policy reform and targeted 
technical assistance to ensure sustainable results.
    The Activities that will be undertaken in furtherance of the 
Education Project are:
    (a) Improving the Quality of Education (the ``Education Quality 
Activity''): This Activity involves the rehabilitation and renovation 
of infrastructure (including teacher housing) and equipment in 
approximately 47 primary and secondary schools, and the funding of 
training programs for school administrators and teachers. Additionally, 
this Activity includes funding for policy-relevant studies and 
improvements in science and computer training facilities at teacher 
training colleges. To reinforce Activity outcomes, Namibia will 
implement teacher education reform guidelines.
    (b) Improving Vocational and Skills Training (the ``Vocational and 
Skills Training Activity''): With MCC Funding, the Vocational and 
Skills Training Activity will assist with the establishment of a 
National Training Fund (``NTF'') within the Namibia Training Authority 
(``NTA''). MCC Funding will be used for the provision of technical 
assistance for the NTF and the creation of a training levy system that 
will sustain the NTF in the future. MCC Funding will also support 
priority vocational and skills training areas (including but not 
limited to tourism) selected under criteria developed by the NTA, which 
criteria will be employed through a competitive grants program to be 
implemented under this Activity. Namibia and MCA-Namibia commit to 
achieving satisfactory progress during the implementation of MCC 
supported training toward the effective operation of the NTF, which 
will include: possessing a proper governance structure (including the 
appointment of the NTA Board and the standing councils and committees), 
the adoption of selection criteria for the award of grants, the 
creation and implementation of the final sustainable levy structure, 
and the deployment of NTF funding so that public entities will not be 
privileged to the detriment of funding for private entities engaged in 
training. Finally, the NTF will operate on a sustainable basis and 
provide funding on a needs basis. MCC Funding will also be utilized (a) 
for the construction or renovation of approximately nine COSDECs, and 
(b) to support efforts so that the private-training industry responds 
to the training demands of Namibia's market economy.
    (c) Improving Access to and Management of Textbooks (the ``Textbook 
Activity''): This Activity will focus on expanding access to and 
improving the distribution and management of textbooks within primary 
and secondary schools through operational support and reforms in the 
textbook acquisition process designed to make the process more 
transparent and competitive. This Activity will include funding for the 
acquisition of science, math and English textbooks for grades 5--12 on 
a national level and improving classroom use of textbooks. These 
acquisitions will be conducted in two phases. The first phase will fill 
actual gaps as determined by a textbook baseline study. The second 
phase will support a pilot procurement program aimed at improving 
textbook acquisition once MCC is satisfied that the supporting 
documentation (implementation plan for the 2008 Textbook Policy) is 
complied with such that there is a greater transparency and 
accountability in the acquisition, distribution and storage of 
textbooks. A system for monitoring textbook supply and demand will also 
be implemented.
    (d) Investing in Regional Study and Resource Centers (the ``RSRC 
Activity''): This Activity will fund the construction of approximately 
three regional study and resource centers (``RSRCs'') in underserved 
areas that will improve community access to documentation, information 
resources, training materials and programs, as well as study 
facilities. Additionally, technical assistance and training will be 
provided for RSRC staff. Namibia will ensure that the MCC constructed 
RSRCs will offer expanded hours of operation with both day and evening 
hours as provided for by the 1997 ``Information for Self-Reliance and 
Development: A Policy Framework for Libraries and Allied Information 
Agencies for Namibia.'' These extra hours will meet the needs of both 
students and individuals that work during the day.
    (e) Expanding and Improving Access to, Equity, and Sustainability 
of Tertiary Education Finance (the ``Tertiary Education Finance 
Activity''): This Activity's focus is expanding access to tertiary 
finance. This will be achieved by providing technical assistance to the 
Ministry of Education (``MoE'') to support its efforts to establish a 
sustainable and widely accessible tertiary and technical education 
finance system, including, inter alia, improved loan and recovery rates 
and targeting of financing subsidies to those in need.
    (f) Cross-Project Support: To further support the Activities of 
this Project, MCC Funding will also be used to strengthen the HIV/AIDS 
program within the MoE HIV/AIDS Management Unit, including development 
of HIV/

[[Page 46733]]

AIDS awareness and prevention plans related to construction activities.
2. Beneficiaries \8\
---------------------------------------------------------------------------

    \8\ Figures in this section are based on MCC's economic and 
beneficiary analysis and are over a 20-year period.
---------------------------------------------------------------------------

    Beneficiaries of the Education Quality Activity are primarily 
students of the target schools, where 47 percent of beneficiary 
students are estimated to live in households with consumption of less 
than US$2 per day per person. The target schools currently enroll 
approximately 18,400 students. Over the course of 20 years, the schools 
will educate an estimated 41,700 primary and secondary students. In 
addition, roughly a third of the teachers at the 47 schools receiving 
teacher housing will realize a marked improvement in living conditions. 
Overall, males and females will be exposed to the new schools in equal 
proportion. Namibia has generally achieved gender parity within its 
school system, although there are some differences between regions and 
some school phases.
    Based on MCA-N forecasts, the RSRCs would serve at least 8,000 
individuals a year (about 10 percent of population of the towns where 
the centers are located). There are over 120,000 learners within 
regional reach of the centers who could benefit from the mobile 
services provided from the centers and from visits to the centers. 
These centers will be located in the principal towns of relatively poor 
and under-served regions.
    Beneficiaries of the COSDECs tend to be unskilled and/or unemployed 
individuals, and program benefits are projected to benefit up to 2,800 
COSDEC trainees per year (or 49,000 over 20 years).
    The Textbook Activity will benefit the poorer segments of the 
student population. The current need for textbooks is relatively higher 
at schools in poor communities, since wealthier communities tend to 
have better-financed and resourced schools.
    The Tertiary Education Finance Activity will help Namibia to 
achieve a reduction in defaults and an increase in the number of 
qualified but disadvantaged individuals accessing loans and obtaining 
tertiary education. The assistance will enable better targeting of 
public funds to the most disadvantaged students, rather than those with 
the ability to pay. Better cost recovery will also allow reduced direct 
public spending on tertiary education loans.
3. Sustainability
    In acknowledgement of the financial commitment required to address 
essential maintenance needs of general schools, the MoE has embarked on 
a major program of periodic maintenance and renovations for these 
schools. A 2005 MoE policy directive has stipulated that 25 percent of 
its development budget is set aside each year for maintenance (instead 
of spending that portion on new construction), which is significantly 
above the Ministry of Works recommended allocation of 5 percent. 
Further, through ETSIP funds, MoE has committed to allocating a set 
percentage towards school hostel maintenance.
    At the local level, the MoE has also initiated a pilot program of 
funding individual ``School Development Funds'' on a revolving basis, 
which currently reaches an estimated 150 schools (or nearly 10 percent 
of the school network). This program involves delegation of authority 
to schools to undertake minor repairs, as a means of removing 
responsibility for such activities from the Regional Education and 
Ministry of Works' offices. To support effective use of the School 
Development Funds, the MoE has begun to require that each school 
prepare and submit three-year rolling maintenance plans.
    Additionally, in light of the increasing expenditures for utilities 
at the school level, the MoE has begun to further involve school 
principals in the flow of information regarding costs and billing, and 
has also introduced pilot programs in which schools are assuming 
greater responsibility for certain recurring expenses.
    In establishing ETSIP, Namibia has demonstrated a commitment to 
undertaking substantial policy and institutional changes to catalyze 
key improvements in the quality of Namibian education. Specifically, 
Namibia has supported the efforts of the MoE to develop and implement 
new policies, procedures, and guidelines affecting the delivery of pre-
primary to secondary education. Prominent institutional changes that 
are being enacted by MoE are presented below. In addition, to provide 
further support to the MoE in their long-term reform efforts, the MCC 
will fund targeted training and technical assistance with key 
institutional changes and policy implementation processes.
4. Environmental and Social Mitigation Measures
    The Education Project is categorized under MCC's Environmental 
Guidelines as a Category B Project due to the environmental and social 
impacts that will result from certain activities.\9\ EAs and EMPs will 
be developed to assess the environmental and social impacts of the 
construction activities within the Education Quality, Vocational and 
Skills Training, and RSRCs Activities. Any resettlement impacts 
resulting from the Education Project will be identified and documented 
in compliance with OP 4.12.
---------------------------------------------------------------------------

    \9\ No environmental or social assessment or management planning 
is required under MCC's Environmental Guidelines for the Textbook 
Activity or the Tertiary Education Finance Activity.
---------------------------------------------------------------------------

    The Education Quality Activity will include the implementation of a 
general hygiene program at schools, which will be implemented by MoE. 
Furthermore, under the Education Quality Activity, disability access 
will be provided at the 47 general schools, which will reinforce the 
existing MoE requirement for disability access in all new school 
buildings. The Education Quality Activity will also benefit vulnerable 
groups in Namibia, such as the San people.
    The MoE HIV/AIDS Management Unit (``HAMU'') will receive targeted 
management strengthening support, which will include activities 
intended to mainstream HIV/AIDS education and training across all MoE 
directorates, associated institutions, and planning activities. The 
technical advisor working with HAMU will also develop and implement 
HIV/AIDS awareness and prevention plans for school populations and 
communities where each educational facility is located for the 
Education Quality, Vocational and Skills Training, and RSRCs 
Activities.
5. Donor Coordination
    The first phase for the implementation of ETSIP (2006-2013) has 
been programmed in detail. Through ETSIP, Namibia coordinates donors to 
participate in a sector-wide program mainly through budget support and 
extra-budgetary support, and the Activities of the Education Project 
are drawn from this program. Namibia's pledged contribution to this 
plan includes US$162 million over 2006-2020, or approximately US$13 
million annually.
    The Education Project will focus on certain aspects within ETSIP in 
order to complement the implementation of the overall sector program, 
and MCC has coordinated closely with the lead development partners in 
this effort, namely the World Bank and EU. With respect to other ETSIP 
development partners (who fund major projects rather

[[Page 46734]]

than provide general budget support), MCC has discussed project 
activities with USAID, PEPFAR, Finland, Sweden, Norway, KfW of Germany, 
and Luxembourg. For the NTF, MCC is cooperating specifically with the 
Luxembourg Development Agency.
6. USAID
    As a member of ETSIP, MCC and MCA-Namibia have had ongoing 
discussions with USAID in the development of this Compact.
7. Policy, Legal and Regulatory Reforms
    As noted above, Namibia's establishment of a fifteen-year national 
reform program for the education sector demonstrates a commitment to 
undertake substantial policy and institutional changes to catalyze key 
improvements in the quality of Namibian education and skills 
development. Specifically, Namibia has supported the efforts of the MoE 
to develop and implement new policies, procedures, and guidelines 
affecting the delivery of primary to secondary education. In addition, 
to provide further support to the MoE in their long-term reform 
efforts, MCC Funding will support targeted training and technical 
assistance with key institutional changes and policy implementation 
processes.
    With respect to sector-specific policy reform commitments, Namibia 
has made several notable advancements in education, encompassing:
    <bullet> Enactment of the National Training Fund within the NTA 
under the Vocational Education and Training (``VET'') Act of 2008;
    <bullet> Establishing and staffing the NTA as provided for in the 
VET Act;
    <bullet> Approval of a new National Textbook Policy and 
implementation plan for primary and secondary schools (2008); and
    <bullet> Adoption of policies concerning the Colleges of Education 
to allow for their semi-autonomy and introduction of performance-based 
contracts.
    In addition, Namibia will implement reforms at the teacher training 
colleges aimed at: (a) Improving and adapting curriculum; (b) setting 
fees and charges; (c) establishing policies and procedures to raise 
outside funds; (d) setting admissions standards; (e) improving 
screening of teacher applicants; and (f) improving management and 
maintenance of facilities.

C. Tourism Project

1. Summary of Project and Activities
    Consistent with Namibia's national development strategies and in 
support of reform efforts already underway, MCC Funding will support 
three priority Activities in the tourism sector (the ``Tourism 
Project''): (a) Improve the management and infrastructure of Etosha 
National Park (``ENP''); (b) enhance the marketing of Namibian tourism; 
and, (c) develop the capacity of communal conservancies to attract 
investments in ecotourism and capture a greater share of the revenue 
generated by tourism in Namibia. Together, these Activities will 
generate income and create employment opportunities for some of the 
poorest populations in Namibia, while conserving the natural resources 
that serve as the foundation for the tourism industry.
    The Activities that will be undertaken in furtherance of the 
Tourism Project are:
    (a) Improved Management and Infrastructure of Etosha National Park 
(the ``ENP Activity''): This Activity aims to improve the management 
capacity of ENP, promote private sector investment in and around 
Namibia's national parks, increase tourism revenue nationally, and 
benefit rural communal conservancies. Achieving these goals requires 
improving budget control and management of the park and increasing 
private sector investment in joint-venture lodges around ENP and joint-
venture lodges and services within and near other national parks, among 
other things (collectively, the ``Performance Targets''). MCC Funding 
will support technical assistance in support of improved management and 
a study of tourism carrying capacity and potential tourism investments 
in and around ENP and other national parks in the north, as well as 
investments in infrastructure for management centers and staff housing, 
road building and maintenance and the purchase of game translocation 
equipment.
    (b) Marketing Namibian Tourism (the ``Marketing Activity''): The 
Marketing Activity's aim is to increase tourist arrivals to Namibia by 
expanding marketing to North American tourists, developing and 
marketing local and regional tourism route packages, and developing a 
fully interactive Web site. The development and marketing of local and 
regional tourism route packages will focus on conservancy sites with 
the explicit aim of directing anticipated increases in tourism visitors 
to communal areas. MCC Funding will provide financing to support these 
goals.
    (c) Ecotourism Development in Conservancies (the ``Conservancy 
Support Activity''): MCC Funding under this Activity will assist 
Namibia in building conservancy capacity to protect its natural 
resources, attract investment, and achieve financial sustainability so 
that households in communal conservancy areas (or conservancies) can 
receive a greater share of revenues. Based on individual conservancy 
needs and demands, the Activity will provide a range of technical 
assistance services and grant funding to approximately 31 high-tourism 
potential conservancies. Such assistance and funding will help to 
mitigate existing barriers to tourism enterprise investment and help 
render the conservancies financially self-sustainable. In addition, 
grant funding to promote joint-venture tourism enterprises between 
conservancies and the private sector will be provided to a subset of 
approximately 15 of the 31 conservancies.
2. Beneficiaries
    The main benefits of the Tourism Project accrue through increased 
tourism visits and value added to the Namibian economy. It is estimated 
that the Marketing Activity will result in an additional 4,000 tourists 
per year on average, which translates into an incremental (present) 
value added by overseas tourists of approximately US$7 million (MCC 
calculations based on data provided by National Tourism Board and 2004 
parks valuation study by Turpie et al. 2004).
    The distribution of benefits will track the general distribution of 
income in Namibia, meaning approximately 23 percent of benefits will 
accrue to the poor (source: MET July 2006). Primary benefit streams of 
this Project include increased employment income, conservancy income 
(to be reinvested or distributed to members), profits to joint venture 
partners, and increased wildlife populations. There are 118,000 
residents within the approximate 31 conservancies targeted for support. 
A projected 7,000 individuals are to enjoy significantly higher income 
as a result of full and part time employment generated through this 
Project (MCC projection based upon 2007 conservancy data). The other 
111,000 conservancy residents are expected to receive benefits through 
small dividends or community-sponsored projects.
3. Sustainability
    In 2007 Etosha National Park earned revenues of approximately US$3 
million, mostly generated through daily usage fees collected at entry 
gates. This revenue goes directly to the Ministry of Finance (``MoF'') 
which then allocates approximately US$2.25 million back to the park to 
cover operating costs. MoF retains about US$100,000 with the

[[Page 46735]]

remaining US$650,000 going into a collective Game Products Trust Fund 
available to the national parks network. ENP is currently allocating a 
disproportionately high percentage of its total operating budget to 
staff and transport costs. The Tourism Project will assist ENP in 
achieving a more balanced budget through growth in park visitors, an 
increase in park usage fees, and concessions awarded to the private 
sector. In addition, delegating more authority to ENP to manage its own 
budget should increase revenue and productivity. Further, use of MCC 
Funding for the ENP Activity will be contingent upon meeting the 
applicable performance targets which include the development of an 
integrated master plan for maintenance of all infrastructure and 
equipment within ENP and demonstration of sufficient budget to 
implement the plan.
    The NTB receives an annual budget allocation of approximately 
US$3.5 million and an additional US$1.5 million in revenue collected 
through a 2 percent bed night levy charged for all overnight stays in 
hotels or lodges. The Tourism Project, which is expected to increase 
tourist arrivals through enhanced tourism marketing, will likely result 
in an increase of revenue to NTB as bed night levies increase.
    Financial sustainability of conservancies is a primary objective of 
this Project as it will aim to develop the capacity of conservancies to 
attract private sector investment and receive a greater share of the 
tourism generated revenues. In 2007, benefits amounted to more than 
US$1.68 million in gross revenues and US$1.26 million in wage income, 
66 percent of which were directly derived from tourism enterprises and 
represent a substantial increase in the period since 1994.
4. Environmental and Social Mitigation Measures
    The Tourism Project is categorized under MCC's Environmental 
Guidelines as a Category A project due to potential site-specific 
environmental and social impacts in sensitive areas anticipated from 
the construction of management centers in fragile ecosystems and in an 
area that is the traditional homeland to vulnerable ethnic groups. 
Tourism activities supported by the independent fund established under 
the Conservancy Support Activity will be classified as a Category D 
Activity under MCC's Environmental Guidelines.
    To ensure the environmental sustainability of the Tourism Project 
and mitigate any environmental and social impacts, an (EIA) and site-
specific EMP will be developed for the construction and rehabilitation 
of management centers in ENP. EMPs will include actions to limit or 
mitigate impacts of construction on fragile ecosystems within ENP, 
ensure proper waste management, and prevent the spread of invasive 
species. HIV/AIDS awareness and prevention programs for ENP staff and 
construction contractors will also be developed and implemented. Any 
resettlement impacts resulting from the Tourism Project will be 
identified and documented in compliance with OP 4.12. MET will provide 
alternative housing for the indigenous San peoples at Government-funded 
official park employee housing sites or on lands transferred to the San 
prior to any eviction and/or demolition of their existing housing at 
Okakuejo. Transportation to the primary school at Ombika will be 
provided for the children of ENP staff living at Okakuejo.
    MCC Funding that supports grants to conservancies will comply with 
MCC's Environmental Guidelines. Additionally, signed contracts between 
communal conservancies and investors will include benefits sharing and 
employment guarantees. Periodic and random audits of the performance of 
a subset of grant funding recipients will be conducted to ensure 
compliance with both MCC Environmental Guidelines and Namibian 
environmental requirements. Furthermore, targeted training to ensure 
that women and vulnerable groups have access to revenue-generating 
opportunities will be included as part of the overall Conservancy 
Support Activity. Disbursement of grant funds for wildlife relocation 
or joint venture activities on conservancy or national park lands and 
all activities supported by these funds shall comply with MCC's 
Environmental Guidelines, whose terms shall also be included in any 
manual produced for the distribution of such grant funds.
5. Donor Coordination
    Multiple donors, most notably KfW, GTZ and UNDP have provided 
technical assistance and funding for the infrastructure and capacity 
building needs of the national parks. UNDP through its ``Strengthening 
the Protected Areas Network'' (``SPAN'') Project, aims to improve 
management effectiveness of Namibia's national system of protected 
areas and includes the development of the new Concession Policy 
(approved by Namibia in 2007), support to make this policy operational 
and support for financial transformation of park management. These 
activities will complement efforts to support and accelerate management 
reform of ENP. MCC's technical assessment of the staff housing centers 
was based on concept designs funded by UNDP. MCA-Namibia will 
coordinate efforts with UNDP's SPAN Project and will work with MET to 
implement the ENP Activity.
    Multiple donors over the past ten years have provided technical 
assistance to conservancies in building governance, sustainable natural 
resource management, and tourism potential of existing and newly-formed 
conservancies. The most important donor assistance has come from USAID 
(through the recently completed LIFE-PLUS Project); the World Wildlife 
Fund for Nature; the Swedish International Development Agency (SIDA); 
Department for International Development (DFID); Danish International 
Development Agency (DANIDA); and the World Bank (through the Integrated 
Community-Based Ecosystem Management (ICEMA) Project). The Conservancy 
Support Activity will build on this previous work and benefit from the 
capacity and experience that has been developed. This Activity will 
also support joint ventures on conservancies complementing current 
efforts by the ICEMA Project.
6. USAID
    USAID has been a key donor in community-based natural resources 
management programs in Namibia. This Compact will build on the USAID-
funded LIFE PLUS project which includes a focus on conservancy support.
7. Policy, Legal and Regulatory Reforms
    The Tourism Project aims to support and accelerate MET reforms in 
the management of Namibia's national park system. A portion of MCC 
Funding to support the ENP Activity will be contingent on meeting the 
applicable performance targets, which focus on management reforms of 
ENP in order to improve management. The Tourism Project will also 
provide technical assistance to support MET's efforts to meet these 
performance targets.
    Namibia recently passed legislation to increase the bed night levy 
to 2 percent, which creates a sustainable mechanism for continued 
funding to NTB, especially as tourist arrivals grow. As tourism in 
Namibia grows, the returns from investments by the private sector will 
also grow and allow the private sector to play a greater role in 
marketing Namibian tourism products.
    To facilitate implementation of the Conservancy Support Activity, 
Namibia will expedite the consideration and

[[Page 46736]]

approval of leasehold applications submitted by conservancies under 
this Activity.
    With respect to sector-specific policy reform commitments, Namibia 
has made several recent notable advancements in tourism, encompassing:
    <bullet> Adoption of the Ministry of Environment and Tourism's 
Strategic Plan that establishes objectives and targets for the tourism 
sector in Namibia;
    <bullet> Adoption of Etosha National Park Management Plan and 
Business Plan that establishes objectives and targets for ENP;
    <bullet> Passage of the Environmental Management Bill into law 
establishing mandatory environmental review and mitigation procedures 
in Namibia (2007); and
    <bullet> Policy on Tourism and Wildlife Concessions on State Land 
(2007).

D. Agriculture Project

1. Summary of Project and Activities
    MCC Funding will support investments aimed at achieving a 
sustainable increase in the economic performance of the agricultural 
sector (the ``Agriculture Project''). Included in this Project are 
Activities that strengthen the land tenure system in the NCAs, 
introduce improved rangeland management practices, and strengthen 
animal health services, regulatory capacity, and livestock marketing 
efficiencies, all of which are expected to increase productivity and 
profitability of livestock production and sale. In addition, the 
Project will increase the volume, quality and value-added of INPs for 
export to regional and international markets.
    The Activities to be undertaken in furtherance of the Agriculture 
Project are:
    (a) Land Access and Management (``Land Access and Management 
Activity''): This Activity includes two sub-activities, one which 
focuses on improving the communal land regime (the ``Communal Land 
Support Activity'') and the second which focuses on introducing 
effective community-based rangeland management practices (the ``CBLRM 
Activity'').
    Under the Communal Land Support Activity, MCC will fund: a 
comprehensive public awareness and outreach campaign to educate the 
public regarding their land rights; the streamlining of administrative 
procedures; a systematic verification and registration process that 
will result in the formalization of land rights in the NCAs; and 
capacity building for Communal Land Boards and other land 
administration institutions.
    The CBLRM Activity aims to improve livestock quality and value by 
supporting training in community-based management of rangeland 
resources, herd management, and business management skills, including 
specific outreach to women in small ruminant production and marketing, 
among participating communities. In addition, these communities will be 
eligible to receive limited rangeland management infrastructure (e.g. 
water points, kraals) to support community rangeland management plans.
    (b) Livestock Support (the ``Livestock Support Activity''): This 
Activity involves: (i) Construction of approximately five veterinary 
centers in the NCA and underserved areas, and rehabilitation of two 
quarantine camps in the Caprivi region; (ii) implementation of a 
traceability system to better meet the food safety requirements in 
local and external markets; and (iii) establishment of a fund to invest 
in post-farmgate improvements fostering greater efficiencies in 
livestock marketing, transport, and quarantine (the ``Livestock Market 
Efficiency Fund''). The Livestock Market Efficiency Fund will also 
focus on diversifying market opportunities, including sanitary 
regulatory capacity building in the NCA. An operations manual will be 
developed by MCA-Namibia, and approved by MCC, which defines 
procedures, eligibility and selection criteria for the Livestock Market 
Efficiency Fund.
    (c) Indigenous Natural Products (the ``INP Activity''): The INP 
Activity's goal is to increase the volume, quality, and value addition 
of the natural products that Primary Producer Organizations (``PPOs'') 
collect and harvest, and to advance their operational and business 
capacity. In addition, this Activity will improve market information to 
PPO's, provide capacity building for the Indigenous Plant Task Team 
(``IPTT'') and support the formulation of regulations, policies and 
implementation plans to ensure the protection of indigenous knowledge. 
MCA-Namibia will develop, subject to MCC approval, a grants-making 
manual that will guide the review, selection and approval process of 
grants to PPOs. This Activity includes a fund to support research, 
testing and application of new innovations and services critical to the 
INP industry's immediate, short-term and long-term competitiveness (the 
``INP Innovation Fund''). MCA-Namibia will develop, subject to MCC 
approval, an operations manual to guide the management of the INP 
Innovation Fund.
2. Beneficiaries
    Direct and indirect beneficiaries of the Livestock Support and the 
Communal Land Support Activities are estimated at 135,000. In addition, 
over 24,000 households will benefit from improved veterinary services, 
and an estimated 1,800 households across 50 communities are anticipated 
to benefit from the rangeland management program.
    The INP Activity is expected to increase income for up to 15,000 
primary producers, a majority of whom are poor and female and for whom 
small increases in cash income are important supplementary household 
income for up to 75,000 individuals.
3. Sustainability
    The Land Access and Management Activity will directly support 
sustainability through the strengthening of structures and systems of 
land-related institutions that expedite land management processes at 
various levels of government. This includes access to basic information 
in the form of spatial data, topographic maps, and integrated 
information systems on land holdings that assist in decision-making, 
planning, and maintenance of proper registers of land rights. The 
institutional sustainability of the Communal Land Support Activity will 
depend upon the allocation of sufficient budgetary provisions and 
technically-skilled staff to the CLBs in the NCAs.
    The veterinary service centers that will be constructed as part of 
the Livestock Support Activity are a public good which Namibia is 
committed to fully fund in terms of staff and operational costs. The 
Ministry of Agriculture's five-year budget plan provides for the 
financial needs of these five centers.
    After the initial MCC-funded tagging exercise, the Livestock 
Traceability System will be a shared public-private cost whereby the 
GRN and cattle owners cover the costs of tags and operations of the 
information system. The GRN will cover the costs associated with 
information entry into the traceability database.
    The sustainability of the Livestock Market Efficiency Improvement 
sub-activity will be achieved primarily by attracting and supporting 
successful private sector solutions. Some of these may not be sustained 
in the long term, but represent short-term measures that create 
incentives for farmers to overcome post-farmgate costs/losses. 
Potential long-term solutions include the establishment of more 
strategic market infrastructure in conjunction

[[Page 46737]]

with the private sector and/or public sector.
    The sustainability of the INP Activity is enhanced by the business 
capacities that are developed among the PPO clients, SME processors, 
traders, IPTT and the linkages they make with global buyers of raw, 
semi-processed and finished INPs. Significant economic growth 
opportunities for the Namibian INP industry have been documented by 
both researchers and private firms.
4. Environmental and Social Mitigation Measures
    The Agriculture Project is categorized under MCC's Environmental 
Guidelines as a Category B Project due to potential site-specific 
environmental and social impacts anticipated to result from land use 
management decisions, the construction and operation of veterinary 
centers and rehabilitation of quarantine camps. The Livestock Market 
Efficiency Fund, which involves an intermediate funding facility, is 
categorized under MCC's Environmental Guidelines as a Category D 
Activity. The INP Activity is categorized under MCC's Environmental 
Guidelines as a Category A Activity due to potentially significant 
environmental impacts anticipated to result from increased harvesting, 
utilization and export of species listed for protection under the 
Convention on the International Trade of Endangered Species 
(``CITES'').
    The Land Access and Management Activity will involve the 
development of EAs and EMPs to mitigate any adverse impacts. 
Participatory community-level decision making processes will further 
mitigate against adverse impacts. The Livestock Support Activity will 
involve an EA to analyze the environmental and social impacts of the 
veterinary centers, quarantine camps, and livestock marketing 
facilities and include the development of site-specific EMPs. The EMPs 
will define the regulations and specific training needed to govern the 
use of Restricted Use Pesticides and other substances in compliance 
with Namibia's Environmental Management Act and MCC Environmental 
Guidelines. Any post-farmgate infrastructure built through the 
Livestock Market Efficiency Improvement sub-activity will involve the 
application of environmental screening and siting criteria and periodic 
audits of the performance of infrastructure funding recipients. The INP 
Activity will involve an EIA and an EMP to identify impacts and develop 
appropriate mitigation measures. These measures will address any 
potential environmental impacts that could result from the harvesting, 
utilization and export of species listed for protection under CITES.
    Any resettlement impacts resulting from the Agriculture Project 
will be identified and documented in compliance with OP 4.12. In 
particular, the Land Access and Management Activity will clarify 
procedures to ensure that community decision making regarding 
restricting access to land includes measures to mitigate adverse 
impacts on livelihoods. HIV/AIDS awareness and prevention plans will be 
developed under the Agriculture Project and implemented in relation to 
construction activities. Furthermore, trafficking in persons for 
livestock-related labor under the Livestock Support Activity will need 
to be addressed through the development and implementation of anti-
trafficking measures. Gender integration plans will be developed to 
provide design recommendations and to ensure women's participation 
throughout implementation for all Activities with a particular focus on 
including women in land and natural resources management decision 
making. The Livestock Market Efficiency Fund and the INP Innovation 
Fund will comply with MCC's Environmental Guidelines, whose terms will 
be included in the grants-making manuals. Increased demand for INPs is 
likely to provide significant income benefits to female-headed 
households and vulnerable groups such as the San people.
5. Donor Coordination
    The Activities of the Agriculture Project build on other donors' 
previous initiatives in the livestock and land management sub-sectors. 
The Livestock Activity will build upon previous and current donor 
support to improve livestock marketing by communal farmers. The 
Communal Land Support sub-activity will build upon other GRN and donor-
funded land reform initiatives to ensure coordination and avoid 
duplication. Community-based Rangeland and Livestock Management sub-
activities build upon several successful community-led solutions to 
natural resources management. Various donors have supported the 
commercialization of natural products, namely USAID, the EU, the GEF 
facility, the FAO, and Oxfam. Previous programs in this sector have 
largely targeted the upper end of the value chain, and MCC Funding will 
complement these efforts by working closely with the first-stage 
primary producers.
6. USAID
    MCC Funding will build on USAID-funded projects in natural 
resources management, specifically the natural products sector.
7. Policy, Legal and Regulatory Reforms
    Namibia has committed to adopt the ``Access to Genetic Resources 
and Associated Traditional Knowledge'' draft bill into law, which shall 
reflect, and not deviate in a significant manner from, the terms of 
CITES.

E. Implementation Framework

1. Overview
    Namibia will generally implement the Program through its existing 
government systems. The National Planning Commission, a ministry-level 
government agency charged with directing development resources, has 
been confirmed as the designated accountable entity. As such, it will 
have overall responsibility for the oversight, management and 
implementation of the Program. A program implementation unit, within 
NPC will serve as the management unit and will be responsible for the 
day-to-day administration of this Compact. In addition, the Ministries 
of Education; Agriculture, Water and Forestry; Environment and Tourism; 
and Lands and Resettlement, and other governmental institutions, will 
undertake certain aspects of the implementation of specific Projects to 
ensure integration, coordination and sustainability of the MCC 
investments.
2. MCA-Namibia
    (a) Board of Directors.
    (i) Composition.
    The NPC Commissioners serve as the MCA-Namibia Board of Directors. 
The Commission currently consists of 14 members, six of whom are 
ministers specified by the NPC's enabling statute, with the remaining 
members appointed by the President of Namibia. As the six specified 
ministers do not include representatives from the MoE or the MET, 
Namibia agrees that two of the appointed commission member slots will 
be filled with representatives from these ministries. In addition, 
Namibia has agreed that the remaining six appointed slots will be 
filled, as their current terms expire, with civil society and private 
sector representatives selected through a process that allows the 
private sector and civil society groups whose interests relate to the 
Projects to nominate potential candidates. The below ministries will be 
represented by the Minister or a

[[Page 46738]]

delegate no lower than the Permanent Secretary level:
    <bullet> National Planning Commission (Chairperson is the Director 
General)
    <bullet> Ministry of Agriculture, Water and Forestry
    <bullet> Ministry of Finance
    <bullet> Ministry of Trade and Industry
    <bullet> Ministry of Works and Transport
    <bullet> Ministry of Regional and Local Government, Housing and 
Rural Development
    <bullet> Ministry of Education
    <bullet> Ministry of Environment and Tourism
    The existing appointees to the NPC Commission, as of the date 
hereof, are civil society and private sector members, selected by the 
President based on their expertise and the sectors they represent are 
listed below:
    <bullet> Representative of the Namibia Chamber of Commerce and 
Industry
    <bullet> Founder, Desert Research Foundation of Namibia (DRFN)
    <bullet> Director of Primary Health Care, Ministry of Health and 
Social Services
    <bullet> Deputy Director of Environmental Affairs, Ministry of 
Environment and Tourism
    <bullet> President, National Union for Namibia Workers (NUNW)
    <bullet> Secretary General, National Youth Council of Namibia
    <bullet> Head of ETSIP, Ministry of Education
    <bullet> CEO, Federation of Namibia Tourism Associations (FENATA)
    Since there is an equal number of Board members, for voting 
purposes, the Director General will hold a tie-breaking vote.
    (ii) Roles and Responsibilities. The roles and responsibilities of 
the MCA-Namibia Board will be as set forth in the bylaws of MCA-Namibia 
annexed to the Program Implementation Agreement (to the extent not 
inconsistent with the NPC Act).
    (b) Management Unit.
    (i) Composition.
    Appointed by the Director General of the NPC, with MCC's approval, 
MCA-Namibia will be managed by a Chief Executive Officer (``CEO''). 
Senior management will also include the following officers: Two Deputy 
CEOs; Director of Administration and Finance; Project Directors for 
Education, Tourism and Agriculture; Environment and Social Assessment 
Director; Monitoring and Evaluation Director; Legal Advisor; and 
Procurement Manager. In addition to other standard operational staff, 
much of the technical expertise will come from the implementing 
entities. MCA-Namibia will support limited staff within the Ministry of 
Education, Ministry of Agriculture, Ministry of Environment and 
Tourism, and the Namibia Tourism Board, who will support Compact 
Activities while ensuring close integration with national priorities 
and strategies.
    (ii) Roles and Responsibilities.
    The roles and responsibilities of the Management Unit will be set 
forth in the bylaws of MCA-Namibia annexed to the Program 
Implementation Agreement.
3. Stakeholder/Consultative Committees
    MCA-Namibia will rely on existing consultative mechanisms for each 
of the Projects. For the Education Project, this will be the ETSIP 
Programme Coordinating Committee and the NTA Board. For the Tourism 
Project, MCA-Namibia will consult with the Namibian Association for 
Conservancy Support Organisations (NACSO). For the Agriculture Project, 
consultations will be with the Technical Committee on Land and Social 
Issues, the Veterinary Cordon Fence (VCF) Task Force, farmers' 
organizations, and the Indigenous Plants Task Team (IPTT).
    These committees include members from the public and private 
sectors and civil society. They are broad-based and offer relevant 
technical expertise plus a solid understanding of socio-economic and 
environmental realities in Namibia.
    The MCA-Namibia Project Directors will present Program-related 
matters to these consultative bodies and report back to the MCA-Namibia 
Board on the advice provided by them. The committees may also pro-
actively approach MCA-Namibia with their concerns related to the 
Program design and implementation. Regular, periodic interaction 
between MCA-Namibia and the consultative bodies is anticipated.
4. Implementing Entities
    Subject to the terms and conditions of this Compact and any other 
supplemental agreement entered into in connection with this Compact, 
MCA-Namibia may engage one or more entities of Namibia to implement and 
carry out any Project or Activity (or a component thereof) to be 
carried out in furtherance of this Compact (each, an ``Implementing 
Entity''). Namibia will ensure that MCA-Namibia enters into an 
agreement with each Implementing Entity, in form and substance 
satisfactory to MCC, that sets forth the roles and responsibilities of 
such Implementing Entity, the MCA-Namibia officer to whom such 
Implementing Entity will report and other appropriate terms and 
conditions (each an ``Implementing Entity Agreement'').
5. Fiscal Agent
    Unless MCC otherwise agrees in writing, Namibia will ensure that 
MCA-Namibia engages a fiscal agent (a ``Fiscal Agent''), who will be 
responsible for assisting MCA-Namibia with its fiscal management and 
assure appropriate fiscal accountability of MCC Funding, and whose 
duties will include those set forth in the Program Implementation 
Agreement.
6. Procurement Agent
    Unless MCC otherwise agrees in writing, Namibia will ensure that 
MCA-Namibia engages one or more procurement agents (each, a 
``Procurement Agent'') to carry out and certify specified procurement 
activities in furtherance of this Compact. The roles and 
responsibilities of each Procurement Agent will be set forth in the 
Program Implementation Agreement or such agreement as MCA-Namibia 
enters into with each Procurement Agent, which agreement shall be in 
form and substance satisfactory to MCC. Any Procurement Agent will 
adhere to the procurement standards set forth in the MCA-Namibia 
Procurement Rules and ensure procurements are consistent with the 
procurement plan adopted by MCA-Namibia pursuant to the Program 
Implementation Agreement, unless MCC otherwise agrees in writing.

Annex II Multi-Year Financial Plan Summary

    This Annex II to this Compact (the ``Financial Plan Annex'') 
summarizes the Multi-Year Financial Plan for the Program.

1. General.

    A multi-year financial plan summary (``Multi-Year Financial Plan 
Summary'') is attached hereto as Exhibit A. By such time as specified 
in the PIA, Namibia will adopt, subject to MCC approval, a Multi-Year 
Financial Plan that includes, in addition to the multi-year summary of 
estimated MCC Funding and Namibia's contribution of funds and 
resources, an estimated draw-down rate for the first year of the 
Compact Term based on the achievement of performance milestones, as 
appropriate, and the satisfaction or waiver of conditions precedent. 
Each year, at least thirty (30) days prior to the anniversary of the 
date on which this Compact enters into force, the Parties shall 
mutually agree in writing to a detailed budget for the upcoming year of 
the Program, which shall include a more detailed budget for such year, 
taking into account the status of the Program at such time and making 
any necessary

[[Page 46739]]

adjustments to the Multi-Year Financial Plan.

2. Government LMIC Contribution

    During the Compact Term, Namibia shall make contributions, relative 
to its national budget and taking into account prevailing economic 
conditions, as are necessary to carry out Namibia's responsibilities 
and obligations under Section 2.6(a) of this Compact. These 
contributions may include in-kind and financial contributions 
(including obligations of Namibia on any debt incurred toward meeting 
these contribution obligations). In connection with this obligation 
Namibia has developed a budget over the five year term of the Compact 
to complement MCC Funding through budget allocations to its sectors in 
education, tourism and agriculture. Namibia anticipates making 
contributions from its national budget of approximately US$165,483,800 
over the Compact Term. Such contribution shall be in addition to 
Namibia's spending allocated toward such Project Objectives in its 
budget for the year immediately preceding the establishment of this 
Compact. Namibia's contribution remains subject to any legal 
requirements in Namibia for the budgeting and appropriation of such 
contribution, including approval of Namibia's annual budget by its 
Parliament. The Parties may set forth in appropriate supplemental 
agreements certain requirements regarding this Government contribution, 
which requirements may be conditions precedent to the Disbursement of 
MCC Funding.
[GRAPHIC] [TIFF OMITTED] TN11AU08.000

Annex III Description of Monitoring and Evaluation Plan

    This Annex III (this ``M&E Annex'') generally describes the 
components of the Monitoring and Evaluation Plan (``M&E Plan'') for the 
Program.

1. Overview

    MCC and Namibia will formulate, agree to and Namibia will 
implement, or cause to be implemented, an M&E Plan that specifies (a) 
how progress toward the Program goal and objectives will be monitored, 
(``Monitoring Component''), (b) process and timeline for the monitoring 
of planned, ongoing, or completed Project Activities to determine their 
efficiency and effectiveness, and (c) a methodology for assessment and 
rigorous evaluation of the outcomes and impact of the Program 
(``Evaluation Component''). Information regarding the Program's 
performance, including the M&E Plan, and any amendments or 
modifications thereto, as well as progress and other reports, will be 
made publicly available on the Web site of MCA-Namibia and elsewhere.

2. Program Logic

    The M&E Plan will be built on a series of logic models which 
illustrate how the Program, Projects and Project Activities contribute 
to poverty reduction and economic growth in Namibia. The chart below 
provides a visual representation of each Project's objectives and 
outcome statement that this Compact will seek to achieve. In sum, the 
goal of the Program is to contribute to economic growth and

[[Page 46740]]

poverty reduction among targeted beneficiaries primarily in the 
northern area of Namibia.
    The following chart stating the Project objectives and the outcomes 
illustrates how each of the Projects addresses poverty reduction in the 
applicable sectors:
[GRAPHIC] [TIFF OMITTED] TN11AU08.001

3. Monitoring Component

    To monitor progress toward the achievement of the impact and 
outcomes, the Monitoring Component of the M&E Plan will identify (a) 
the indicators, (b) the definitions of the indicators, (c) the sources 
and methods for data collection, (d) the frequency for data collection, 
(e) the party or parties responsible, and (f) the timeline for 
reporting on each indicator to MCC.
    Further, the Monitoring Component will track changes in the 
selected indicators for measuring progress towards the achievement of 
the objectives during the Compact Term. Before the initiation of 
implementation activities for each Project, MCA-Namibia will collect 
baseline data on the selected indicators or verify already collected 
baseline data.
    (a) Indicators. The M&E Plan will measure the results of the 
Program using quantitative, objective and reliable data 
(``Indicators''). Each indicator will have benchmarks that specify the 
expected value and the expected time by which that result will be 
achieved (``Target''). The M&E Plan will be based on a logical 
framework approach that classifies indicators as goal, outcome, output, 
and process milestones. The Compact Goal indicators (``Goal 
Indicators'') will measure the general contribution of the Projects to 
the national economic growth and poverty reduction. Second, the Project 
objective and outcome (``Project Objective and Outcome Indicators'') 
will measure the final result of each Project. Third, Output Indicators 
and process milestones (``Project Activity Indicators'') will measure 
the early and intermediate results of the Project Activities. For each 
Project Objective, Outcome, and Activity Indicator, the M&E Plan will 
define a strategy for obtaining and verifying the value of such 
indicator prior to undertaking any activity that affects the value of 
such Indicator (such value, a ``Baseline''). All indicators will be 
disaggregated by gender, income level and age, and beneficiary types to 
the extent practicable. Subject to prior written approval from MCC, 
MCA-Namibia may add indicators or refine the definitions and Targets of 
existing indicators.
    (i) Goal. The M&E Plan will contain the Goal Indicators listed in 
the table below specifying the definition, baseline, and end of Compact 
Target for each.

                                                   Goal Level
----------------------------------------------------------------------------------------------------------------
            Result                    Indicator            Definition of indicator        Baseline      Target
----------------------------------------------------------------------------------------------------------------
Economic Growth and Reduction   Poverty Rate \10\....  Relative poverty: Percent of             28%          20%
 of Poverty.                                            households devoting more than
                                                        60 percent of total household
                                                        income to food expenses.\11\
                                                      ----------------------------------------------------------
                                                       Extreme poverty: Percentage of            4%           2%
                                                        household devoting more than
                                                        80 per cent of total income to
                                                        food expenses.\12\

[[Page 46741]]

 
                                Unemployment Rate      Percentage of economically               35%        33.6%
                                 \13\.                  active population who are
                                                        currently unemployed.
                               ---------------------------------------------------------------------------------
                                Average Income per     The average annual household        US$6,031          TBD
                                 Household.\14\         consumption expenditures in
                                                        cash, in-kind and non
                                                        consumption expenditures such
                                                        as savings and investment and
                                                        other nonconsumption
                                                        disbursements (corrected for
                                                        CPI).
----------------------------------------------------------------------------------------------------------------

    (ii) Project Objective, Outcome and Activity Indicators. The M&E 
Plan will contain Project Objective, Outcome, and Activity Indicators 
which will measure the results for the 3 (three) main Projects and are 
listed below with their definitions, baseline and targets. Prior to the 
initiation of implementation of a Project Activity, MCC and MCA-Namibia 
will agree on a final set of Activity Indicators. The M&E Plan will 
contain these indicators or will be amended to contain these 
indicators.
---------------------------------------------------------------------------

    \10\ Definitions of Relative and Extreme poverty inline with 
that of the NDP 3.
    \11\ Baseline from the National Development Plan 3 (NDP 3). 
Target taken from the NDP 3 and is thus inline with National 
development objectives and goals.
    \12\ Baseline from the NDP 3.
    \13\ Target taken from the National Development Plan 3 (NDP 3) 
and is thus inline with National development objectives and goals.
    \14\ Namibia Household Income and Expenditure Survey 2003/2004 
Preliminary Report, March 2006. The stated average annual adjusted 
income per household is N$42,129 with per capita income of N$8,556 
and adjusted per capita income of N$10,357. The baseline figure uses 
an average NAD-US$ exchange rate for 2003/04 of N$6,985 : US$1.

                                              Project: Education 15
                                                 Objective Level
----------------------------------------------------------------------------------------------------------------
             Result                     Indicator              Definition of indicator       Baseline    Year 5
----------------------------------------------------------------------------------------------------------------
Enhanced learning and cognitive  Transition Rate of 5th   Number of 5th grade students who      1,528      1,554
 development of students.         and 8th Grade Students.  pass the national transitional
                                                           examinations for 5th grades.16
                                                         -------------------------------------------------------
                                                          Number of 8th grade students who      2,982      3,018
                                                           pass the national transitional
                                                           examinations for 8th grades.17
                                                         -------------------------------------------------------
                                 National Pass Rate of    Percentage of learners achieving        43%     19 53%
                                  JSC and NSSC Learners    D or better in mathematics,
                                  in the Basic Subjects    life science, physical science,
                                  of the DNEA              and English as a second
                                  Examination.18           language on JSC (grade 10).
                                                          Percentage of learners achieving        31%        41%
                                                           D or better in mathematics,
                                                           life science, physical science,
                                                           and English as a second
                                                           language on NSSC Ordinary Level
                                                           exams (grade 12).
Increased supply level of        Employment rate of       Percentage completing COSDEC who        49%        70%
 skills demanded by employers.    COSDEC participants in   are full time or self employed
                                  the national             in the sector of studies within
                                  industries.              the national industries one
                                                           year after completion of
                                                           required course of studies in
                                                           the COSDEC program.
                                 Employment rate of       Percentage who are full time or         40%        75%
                                  other vocational skill   self-employed one year after
                                  development programs     completion of vocational skill
                                  in national industries.  training programs.
----------------------------------------------------------------------------------------------------------------


                                                  Outcome Level
----------------------------------------------------------------------------------------------------------------
                                                                       Definition of
              Result                           Indicator                 indicator      Baseline      Year 5
----------------------------------------------------------------------------------------------------------------
                              Activity: Improving the Quality of General Education
----------------------------------------------------------------------------------------------------------------
Enhanced learning and cognitive    DNEA examination results (MCC      Percentage of          43%             53%
 development of students at MCC     target schools).20                 learners at
 target schools.                                                       MCC target
                                                                       schools
                                                                       achieving D or
                                                                       better in
                                                                       mathematics,
                                                                       life science,
                                                                       physical
                                                                       science, and
                                                                       English JSC
                                                                       exam (grade
                                                                       10).21
----------------------------------------------------------------------------------------------------------------


                                             Transition rate of 5th and 8th grade         Percentage of 5th and           5th      1,528           1,554
                                              students (MCC target schools).               8th grade students
                                                                                           passing the national
                                                                                           transition examination
                                                                                           in MCC target schools.
                                                                                                                          8th      2,982           3,018
                                            ------------------------------------------------------------------------------------------------------------

[[Page 46742]]

 
                                             Survival Rate..............................  Percentage of 5th, 8th       22 5th      94.1%           94.3%
                                                                                           and 11th grade students
                                                                                           who have remained in
                                                                                           each phase of school
                                                                                           since first grade.
                                                                                                                       23 8th      80.7%           84.6%
                                                                                                                      24 11th      38.6%           40.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Repetition Rate............................  Percentage of 1st, 5th,      25 1st      19.7%           19.5%
                                                                                           and 8th grade students
                                                                                           who have dropped out or
                                                                                           repeated grade levels.
                                                                                                                       26 5th      22.8%           22.6%
                                                                                                                       27 8th      21.1%           21.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------


                               Activity: Improving Vocational and Skills Training
----------------------------------------------------------------------------------------------------------------
Enhanced workforce skills........  Completion rate of COSDEC          Percentage of          70%             85%
                                    participants.28                    total
                                                                       participants
                                                                       who completed
                                                                       required
                                                                       course work
                                                                       within the
                                                                       specified time
                                                                       period of the
                                                                       program.
                                  ------------------------------------------------------------------------------
                                   Completion rate of participants    Percentage of          TBD             80%
                                    of other Vocational skill          total
                                    training programs.                 participants
                                                                       of other
                                                                       Vocational
                                                                       skill training
                                                                       who completed
                                                                       required
                                                                       activities
                                                                       within the
                                                                       specified time
                                                                       period of the
                                                                       program.
                                  ------------------------------------------------------------------------------
                                   COSDEC enrollment Rate...........  Total COSDEC         1,150           3,000
                                                                       participant
                                                                       enrollment
                                                                       within a year.
                                  ------------------------------------------------------------------------------
                                   Vocational Skills training         Total MCC            1,670           2,171
                                    enrollment rate.29                 assisted
                                                                       Vocational
                                                                       Skill training
                                                                       program
                                                                       enrollment
                                                                       within a year.
                                  ------------------------------------------------------------------------------
                                   Annual Revenue to NTF............  Funds                 US$0    US$1,600,000
                                                                       contributed to
                                                                       NTF from
                                                                       Employers
                                                                       (Private
                                                                       sector
                                                                       training levy
                                                                       and other
                                                                       sources) (2008
                                                                       US$).
----------------------------------------------------------------------------------------------------------------
                       Activity: Upgrading Access to and Management of Adequate Textbooks
----------------------------------------------------------------------------------------------------------------
Gaps filled in the current         % of schools meeting the target    Total number of        TBD             TBD
 provision of books.                of Textbook Students ratio.30      schools as a
                                                                       percentage of
                                                                       the total
                                                                       number of
                                                                       national
                                                                       schools who
                                                                       are meeting
                                                                       the targeted
                                                                       student
                                                                       textbook ratio
                                                                       of 1:2.
----------------------------------------------------------------------------------------------------------------
Efficiency in textbook             Textbook Inventory Turning         % of textbook          TBD             95%
 procurement and delivery.          Rate.31                            inventory
                                                                       delivered on
                                                                       time to
                                                                       schools out of
                                                                       the total
                                                                       textbooks
                                                                       procured for a
                                                                       given year.
----------------------------------------------------------------------------------------------------------------
                           Activity: Investment in Regional Study and Resource Centers
----------------------------------------------------------------------------------------------------------------
Increased use of information for   Resource and learning materials    The total           33,921          84,406
 formal education, informal         loaned out per year.32             number of
 learning, business, and research.                                     library books
                                                                       loaned out per
                                                                       year in the
                                                                       MCA assisted
                                                                       libraries.
                                  ------------------------------------------------------------------------------
                                   Total number of visits to new      Total number of     31,000         100,000
                                    RSRCs.                             annual visits
                                                                       to 3 new MCC-
                                                                       funded RSRCs.
----------------------------------------------------------------------------------------------------------------
                          Activity: Expanding and Improving Access to Tertiary Finance
----------------------------------------------------------------------------------------------------------------
Increased financing available for  % of qualified financial aid       Percentage of          20%             60%
 tertiary education.                applicants receiving loans for     the total
                                    the school year.                   qualified
                                                                       financial aid
                                                                       applicants
                                                                       enrolled in
                                                                       tertiary
                                                                       institutions
                                                                       who actually
                                                                       received
                                                                       students loans
                                                                       for the school
                                                                       year.
                                  ------------------------------------------------------------------------------
                                   Repayment rates 33...............  Percentage of          20%             75%
                                                                       loans awarded
                                                                       under the new
                                                                       system being
                                                                       paid on time.
----------------------------------------------------------------------------------------------------------------


                                                Project: Tourism
                                                 Objective Level
----------------------------------------------------------------------------------------------------------------
            Result                   Indicator            Definition of indicator       Baseline      Year 5
----------------------------------------------------------------------------------------------------------------
Growth of tourism industry     Annual total tourist   Total number of tourist            864,451       1,057,000
 targeting poor beneficiaries.  arrivals in Namibia    arrivals recorded per annum
                                by origin.34           (excluding South African and
                                                       Angolan multi purpose business-
                                                       tourism visits).
                               Total Tourism          Total direct employment created     21,508          24,573
                                Industry               within the tourism industry by
                                employment.35          travel and tourism companies
                                                       excluding government agencies
                                                       and supplier company
                                                       employments.
                               Increased Household    Increases in income of HH in        27,885          41,827
                                (HH) income.36         targeted communal
                                                       conservancies areas.
----------------------------------------------------------------------------------------------------------------

[[Page 46743]]

 
                    Activity: Improving Management and Infrastructure in Etosha National Park
----------------------------------------------------------------------------------------------------------------
Improved management and        Total ENP revenue 37.  Annual total revenue generated   2,963,538       4,142,529
 management efficiency of the                          by ENP including gate receipts
 ENP.                                                  and concession fees (2007 US$).
                               Park attendance 38...  The annual total park              200,000         293,000
                                                       attendance for ENP based on
                                                       park entry records.
----------------------------------------------------------------------------------------------------------------
                                     Activity: Marketing Namibia in Tourism
----------------------------------------------------------------------------------------------------------------
Increased awareness of         Number of tourist      Total number of tourist             19,342       40 30,947
 Namibia's tourism products.    arrivals from new      arrivals recorded for new
                                targeted markets.      targeted markets (target
                                                       expressed as a percent change
                                                       over the baseline) 39.
----------------------------------------------------------------------------------------------------------------
                           Activity: Ecotourism Development for Communal Conservancies
----------------------------------------------------------------------------------------------------------------
                               Conservancy benefits   Fraction of conservancy             41 34%             75%
                                to households and      revenues paid out as household
                                community.             income/dividends plus amounts
                                                       invested in community projects
                                                       (schools, clinics, social
                                                       services) and new enterprise
                                                       expansion. Figure is the
                                                       average across all MCC-
                                                       supported conservancies.
----------------------------------------------------------------------------------------------------------------
Increased commercial capacity  Total revenue to       The total revenue generated by   2,952,175       4,149,422
 of conservancies.              targeted registered    all conservancies supported by
                                conservancies.42       MCC--including in-kind
                                                       revenues (target expressed as
                                                       a percent change over the
                                                       baseline, 2008 US$).
----------------------------------------------------------------------------------------------------------------


                                         Conservancy sustainability.............  The number of          Of 17 established          44 9              16
                                                                                   conservancies          conservancies
                                                                                   achieving a positive   (registered before
                                                                                   net income 43.         Aug 1, 2003).
                                                                                                        ------------------------------------------------
                                                                                                         Of 14 beginning            45 0               7
                                                                                                          conservancies
                                                                                                          (registered after
                                                                                                          Aug 1, 2003).
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                              Project: Agriculture
                                                 Objective Level
----------------------------------------------------------------------------------------------------------------
            Result                    Indicator            Definition of indicator        Baseline      Year 5
----------------------------------------------------------------------------------------------------------------
Increased health of cattle....  Mortality Rate 46....  Percentage of the total                0.03%          TBD
                                                        population that dies of
                                                        diseases per annum NCAs.
----------------------------------------------------------------------------------------------------------------
Enhanced and efficient          Annual Turnover 47     Number of cattle slaughtered in       19,000       28,000
 marketing system.               (formal Market).       formal markets (public and
                                                        private abattoirs) in the NCAs.
----------------------------------------------------------------------------------------------------------------
Increased INP growth with       Percent increase in    Percent increase in INP revenue           na          50%
 benefits accruing to            INP revenue.           from base year (corrected for
 households.                                            CPI inflation) among members
                                                        of PPOs targeted for
                                                        assistance.
----------------------------------------------------------------------------------------------------------------


                                                  Outcome Level
----------------------------------------------------------------------------------------------------------------
            Result                   Indicator            Definition of indicator       Baseline      Year 5
----------------------------------------------------------------------------------------------------------------
                                          Activity: Livestock Activity
----------------------------------------------------------------------------------------------------------------
Provision of High Quality      CBPP vaccination Rate  Percentage of livestock in the         78%             95%
 Veterinary Services.           48.                    NCAs vaccinated against CBPP.
                               Frequency of NCA       Average number of service                1               2
                                homestead/village      contacts per household per
                                visits by DVS.         year by DVS.
----------------------------------------------------------------------------------------------------------------
Efficient Traceability system  Total livestock        Total recorded livestock               TBD             TBD
                                movement               movements through transit
                                transactions           holdings such as market places
                                recorded.49            and exhibition sites.

[[Page 46744]]

 
                               Number of livestock    Number of livestock tagged in            0       1,170,000
                                tagged in the NCAs.    the NCAs under MCC mass
                                                       tagging (cumulative) and
                                                       subsequent owner tagging.
----------------------------------------------------------------------------------------------------------------
Enhanced efficiency of         Post farmgate cost     The cost saving to herders from          0          50 50%
 livestock quarantine and       reduction.             improvements in the efficiency
 marketing.                                            of marketing, transport, and
                                                       quarantining of livestock.
----------------------------------------------------------------------------------------------------------------
                                  Activity: Land Access and Management Activity
----------------------------------------------------------------------------------------------------------------
Community adoption of          Value of livestock     Average percent difference in          19%             50%
 Rangeland Management           sold by communities    total value of livestock sold
 techniques and methodologies.  in formal markets.51   in previous year between
                                                       target communities adopting
                                                       techniques and comparison
                                                       communities.
                               Adoption rate of       Percentage of targeted                  0%             40%
                                improved rangeland     communities practicing
                                management             appropriate rangeland
                                methodology and        management techniques and
                                techniques.            methodology.
----------------------------------------------------------------------------------------------------------------
                                 Activity: Indigenous Natural Products Activity
----------------------------------------------------------------------------------------------------------------
Market access for INPs.......  Percentage of          Percentage of targeted PPOs              0             67%
                                targeted PPOs          certified for organic
                                granted                production and fair trade
                                certification.         status.
----------------------------------------------------------------------------------------------------------------

    (b) Data Collection and Reporting. The M&E Plan will establish 
guidelines for data collection and reporting, and identify the 
responsible parties. Compliance with data collection and reporting 
timelines will be conditions for disbursements for the relevant Project 
Activities as set forth in the Program Implementation Agreement. The 
M&E Plan will specify the data collection methodologies, procedures, 
and analysis required for reporting on results at all levels. The M&E 
Plan will describe any interim MCC approvals for data collection, 
analysis, and reporting plans.
---------------------------------------------------------------------------

    \15\ Education indicators with target from ETSIP will be 
adjusted in accordance with the annual ETSIP reviews.
    <SUP>16</SUP> In the absence of disaggregated data specific for 
the 47 target schools the baseline represents the national average 
for all schools offering grade 5, calculated for 36 schools, out of 
the target 47 that offers grade 5. To be revised once disaggregated 
data for the 47 target schools is available. Target is based on an 
average annual rate of increase of 0.329% per annum for transition 
of 5th graders. To be revised once disaggregated data for the 47 
target schools is available. Data from EMIS 2007.
    <SUP>17</SUP> In the absence of disaggregated data specific for 
the 47 target schools the baseline represents the national average 
for all schools offering grade 8, calculated for all 47 schools 
offering grade 8. To be revised once disaggregated data for the 47 
target schools is available. Target is based on an average annual 
rate of increase of 0.241% per annum for transition of 8th graders. 
To be revised once disaggregated data for the 47 target schools is 
available. Data from EMIS 2007.
    <SUP>18</SUP> ETSIP target for 2011 = 52.1%. ETSIP targets are 
being reviewed so this target will be revised once ETSIP data are 
available (July 08).
    <SUP>19</SUP> ETSIP target for 2011 = 62.9%. ETSIP targets are 
being reviewed so this target will be revised once ETSIP data 
available (July 08).
    <SUP>20</SUP> This is representative of the national average of 
all schools. A baseline will be established for the MCC target 
schools.
    <SUP>21</SUP> MCC target school figures only include junior 
secondary as most MCC target schools only offer this level to date. 
As more schools begin offering senior secondary, an indicator may be 
added for the NSSC.
    <SUP>22</SUP> Target based on annual average rate of change (for 
2000-2006) of 0.04%; to be revised against revised ETSIP targets. 
Data from EMIS 2007.
    <SUP>23</SUP> Target based on annual average rate of change (for 
2000-2006) of 0.94%; to be revised against revised ETSIP targets. 
Data from EMIS 2007.
    <SUP>24</SUP> Target based on annual average rate of change (for 
2000-2006) of 0.68%; but to be revised against revised ETSIP 
targets. Data from EMIS 2007.
    <SUP>25</SUP> Target based on annual average rate of change (for 
2000-2006) of 0.341%; but to be revised against revised ETSIP 
targets. Data from EMIS 2007.
    <SUP>26</SUP> Target based on annual average rate of change (for 
2000-2006) of 0.15%; but to be revised against revised ETSIP 
targets. Data from EMIS 2007.
    <SUP>27</SUP> Target based on annual average rate of change (for 
2000-2006) of 0.132%; but to be revised against revised ETSIP 
targets. Data from EMIS 2007.
    <SUP>28</SUP> ETSIP indicator with a baseline target for 2008.
    <SUP>29</SUP> Year 5 Target is based on a 30% increase of the 
baseline.
    <SUP>30</SUP> Baseline to be determined during MCC funded 
textbook survey. Target of 1 textbook per every 2 students inline 
with ETSIP target and can be amended against revised ETSIP targets.
    <SUP>31</SUP> Baseline to be determined during MCC funded 
textbook survey.
    <SUP>32</SUP> Baseline from MoE. Year 5 target is based on an 
annual increase of 20%.
    <SUP>33</SUP> Baseline based on loan repayment rate for 2007.
    <SUP>34</SUP> NTB data.
    <SUP>35</SUP> Baseline data is based on preliminary figures from 
Namibia's 2007 Tourism Satellite Accounts (TSA). The year 5 target 
is based on projected 2.7% annual growth.
    <SUP>36</SUP> Baseline is based on average income to conservancy 
households for the 31 MCC target conservancies at an average US$-NAD 
exchange rate for 2007 of US$1 : NAD 7.195. The target is projected 
as 50% growth of the baseline. To be confirmed before Compact entry 
into force.
    <SUP>37</SUP> Baseline based on CPI adjusted total revenue for 
2007 at an average US$-NAD exchange rate for 2007 of US$1 : NAD 
7.195.
    <SUP>38</SUP> Baseline data from MET. Year 1 target is the same 
as the baseline as MCA interventions will only impact from Year 2. 
The year 5 target is based on annual 10% growth. The target will be 
revised based on the outcome of the MCC-funded Carrying Capacity 
study for ENP.
    <SUP>39</SUP> Baseline refers only to USA arrivals.
    <SUP>40</SUP> The year 5 Target is based on a 60% increase from 
the baseline.
    <SUP>41</SUP> Baseline is an estimate. Actual figure will be 
determined before Compact entry into force.
    <SUP>42</SUP> Baseline data is based on 23 registered 
conservancies, out of the 31 proposed for MCC support, that generate 
revenue (US$1 = N$ 7.195). The remaining 8 conservancies are 
emerging with high potential for revenue generation. The baseline is 
corrected for the 2007 average CPI.
    <SUP>43</SUP> The calculation of profit (profit = revenue - 
cost) will include all relevant costs such as in kind services from 
donors (i.e. negotiating assistance and auditing services) and 
amortization of capital investment.
    <SUP>44</SUP> Baseline is an estimate. Actual figure will be 
determined before Compact entry into force.
    <SUP>45</SUP> Baseline is an estimate. Actual figure will be 
determined before Compact entry into force.
    <SUP>46</SUP> Baseline is based on total mortality as percentage 
of total estimated cattle population in the NCA. Data will be 
revised against the outcome of the MCC funded livestock survey.
    <SUP>47</SUP> Baseline data from Meatco. Target is projected at 
8% annual growth.
    <SUP>48</SUP> Baseline data from Directorate of Veterinary 
Services (DVS), MAWF. Target is projected at 4% annual growth.
    <SUP>49</SUP> Baselines and targets to be determined during the 
MCC-funded livestock survey.
    <SUP>50</SUP> Estimation from MCC ERR calculation.
    <SUP>51</SUP> Baseline calculated as percent difference in the 
average value of cattle sold in 2006 and 2007. Data from Meatco.
---------------------------------------------------------------------------

    (c) Data Quality Reviews. As determined in the M&E Plan or as 
otherwise requested by MCC, the quality of the data gathered through 
the M&E Plan will be reviewed to ensure that data reported are as 
valid, reliable, and timely as resources will allow. The objective of 
any data quality review will be to verify the quality and the

[[Page 46745]]

consistency of performance data, across different implementation units 
and reporting institutions. Such data quality reviews also will serve 
to identify where those levels of quality are not possible, given the 
realities of data collection.
    (d) Management Information System. The M&E Plan will describe the 
information system that will be used to collect data, store, process 
and deliver information to relevant stakeholders in such a way that the 
Program information collected and verified pursuant to the M&E Plan is 
at all times accessible and useful to those who wish to use it. The 
system development will take into consideration the requirement and 
data needs of the components of the Program, and will be aligned with 
MCC existing systems, other service providers, and ministries.
    (e) Role of MCA-Namibia. The monitoring and evaluation of this 
Compact spans across three discrete Projects and will involve a variety 
of governmental, non-governmental, and private sector institutions. 
MCA-Namibia holds full responsibility for implementation of the M&E 
Plan. MCA-Namibia will oversee all Compact-related monitoring and 
evaluation activities conducted by each of the Projects, ensuring that 
data from all implementing entities is consistent, and accurately 
reported and aggregated into regular Compact performance reports as 
described in the M&E Plan.

4. Evaluation Component

    The Evaluation Component of the M&E Plan will contain three types 
of evaluations: Impact Evaluations, Project Performance Evaluations, 
and Special Studies. Plans for each type of evaluation will be 
finalized before MCC Disbursement for specific Program or Project 
activities. The Evaluation Component of the M&E Plan will describe the 
purpose of the evaluation, methodology, timeline, required MCC 
approvals, as well as the process for collection and analysis of data 
for each evaluation. The results of all evaluations will be made 
publicly available in accordance with MCC Guidelines for Monitoring and 
Evaluation Plans.
    (a) Impact Evaluation: The M&E Plan will include a description of 
the methods to be used for impact evaluations and plans for integrating 
the evaluation method into project design. Based on in-country 
consultation with stakeholders, the following strategies outlined below 
were jointly determined as having the strongest potential for rigorous 
impact evaluation. The M&E Plan will further outline in detail these 
methodologies. Final impact evaluation strategies are to be jointly 
determined before the approval of the M&E Plan and before entry into 
force of this Compact. The following is a summary of the potential 
impact evaluation methodologies:
    (i) Agriculture Project: The CBLRM Activity will be subjected to 
rigorous impact evaluation. The evaluation will address the 
effectiveness of the Activity in improving herders' value, grade and 
incomes. As the Activity is envisioned as a pilot, the evaluation will 
contribute to the justification for scaling up the Activity through 
arrangements outside this Compact. The evaluation will include 
measurement of outcomes of communities outside the target communities. 
The appropriate rigorous methodology will be used.
    (ii) Education Project: The purpose of the impact evaluation will 
be to assess the effectiveness of the Education Quality Activity 
through: (1) The quantity of education services provided; (2) the 
quality of education services provided; and (3) learning outcomes. The 
evaluation will include measurements taken from non-MCC target schools 
to establish a comparison group.
    The evaluation may also address the Textbook Activity and other 
activities that may improve school supervision.
    (b) Projects Evaluation. The M&E Plan will make provision for 
project level evaluations. MCA-Namibia, with the prior written approval 
of MCC, will engage independent evaluators to design the Project 
Performance Evaluations to be conducted at the end of each Project or 
MCC may engage the independent evaluators. The Project Performance 
Evaluations must at a minimum (i) evaluate the efficiency and 
effectiveness of the Project Activities; (ii) estimate, quantitatively 
and in a statistically valid way, the causal relationship between the 
expected impact (to the extent possible), the intended outcomes and 
outputs; (iii) determine if and analyze the reasons why this Compact 
Goal, Program Objective and Project Objectives were or were not 
achieved; (iv) identify positive and negative unintended results of the 
Program; (v) provide lessons learned that may be applied to similar 
projects; (vi) assess the likelihood that results will be sustained 
over time; and (vii) any other guidance and direction that will be 
provided in the M&E Plan. To the extent engaged by MCA-Namibia, such an 
independent evaluator will review the plans for the collection of 
baseline data and, as applicable, plans for selecting comparison 
groups.
    (i) Special Studies. The M&E Plan will include a description of the 
methods to be used for Special Studies funded through this Compact or 
by MCC.
    Plans for conducting the Special Studies will be determined jointly 
between MCA-Namibia and MCC before the approval of the M&E Plan and 
before entry into force of this Compact. The M&E Plan will identify and 
make provision for any other special studies, ad hoc evaluations, and 
research that may be needed as part of the monitoring and evaluating of 
this Compact. Either MCC or MCA-Namibia may request special studies or 
ad hoc evaluations of Projects, Project Activities, or the Program as a 
whole prior to the expiration of the Compact Term. When MCA-Namibia 
engages the evaluator, the evaluator will be an externally contracted 
and independently source selected by MCA-Namibia. The aforementioned 
engagement will be subject to the prior written approval of MCC, 
following a tender in accordance with the MCA-Namibia Procurement 
Rules, and in accordance with any relevant Implementation Letter or 
supplemental agreement. Contract terms must ensure non-biased results 
and the publication of results.
    (c) Request for Ad Hoc Evaluation or Special Study: If MCA-Namibia 
requires an ad hoc independent evaluation or special study at the 
request of Namibia for any reason, including for the purpose of 
contesting an MCC determination with respect to a Project or Project 
Activity or to seek funding from other donors, no MCC Funding or MCA-
Namibia resources may be applied to such evaluation or special study 
without MCC's prior written approval.

5. Other Components of the M&E Plan

    In addition to the Monitoring and Evaluation Components, the M&E 
Plan will include the following components for the Program, Projects 
and Project Activities, including, where appropriate, roles and 
responsibilities of the relevant parties and providers:
    (a) Costs. A detailed cost estimate for all components of the M&E 
Plan.
    (b) Assumptions and Risks. Any assumption and risk external to the 
Program that underlies the accomplishment of the Objectives and Project 
Activity Outcomes. However, such assumptions and risks will not excuse 
Parties' performance unless otherwise expressly agreed to in writing by 
all Parties.

6. Implementation of the M&E Plan

    (a) Approval and Implementation. The approval and implementation of 
the M&E Plan, as amended from time to time, will be in accordance with 
this

[[Page 46746]]

M&E Annex, PIA, and any other relevant supplemental agreement.

Annex IV Conditions to Disbursement of Compact Implementation Funding

    Capitalized terms used in this Annex IV and not defined in this 
Compact will have the respective meanings assigned thereto in the 
Program Implementation Agreement.

1. Conditions to Each CIF Disbursement

    (a) Delivery by Namibia (or MCA-Namibia) to MCC of the following 
documents, in form and substance satisfactory to MCC:
    (i) a complete, correct and fully executed Disbursement Request for 
the relevant Disbursement Period, together with the Periodic Reports 
covering such Disbursement Period.
    (ii) any proposed waiver or deferral (together with a 
justification) of any condition to Disbursement.
    (iii) a completed Detailed Financial Plan covering Compact 
Implementation Funding.
    (b) Prior to the deposit of any Disbursement of Compact 
Implementation Funding (each a ``CIF Disbursement '') into any 
Permitted Account in accordance with an approved Disbursement Request, 
MCC will have received satisfactory evidence of the establishment of 
the Permitted Accounts.
    (c) The monitoring and evaluation officer for MCA-Namibia has been 
selected and approved by MCC and remains engaged, or in the event a 
position is vacant, MCA-Namibia is actively recruiting for the 
position.
    (d) The Fiscal Agent Agreement shall be executed and effective and 
the Fiscal Agent shall be mobilized.
    (e) The Procurement Agent Agreement shall be executed and effective 
and the Procurement Agent shall be mobilized.
    (f) The Bank Agreement shall be executed and effective and the Bank 
shall be mobilized.
    (g) If applicable, the tax agreements described in Section 2.8(b) 
of this Compact shall be executed and effective, together with any 
laws, rules or regulations necessary to give effect thereto.
    (h) MCC is satisfied, in its sole discretion, that (i) the 
activities being funded by such CIF Disbursement are necessary, 
advisable or otherwise consistent with the goal of facilitating the 
implementation of the Compact and will not violate any applicable law 
or regulation; (ii) no material default or breach of any covenant, 
obligation or responsibility by Namibia, MCA-Namibia or any Namibia 
entity has occurred and is continuing under this Compact or any 
supplemental agreement; (iii) there has been no violation of, and the 
use of requested funds for the purposes requested will not violate, the 
limitations on use or treatment of MCC Funding set forth in this 
Compact, including under Section 2.7; (iv) any Taxes paid with MCC 
Funding through the date 90 days prior to the start of the applicable 
Disbursement Period have been reimbursed by Namibia in full in 
accordance with Section 2.8 of this Compact; and (v) Namibia has 
satisfied all of its payment obligations, including any insurance, 
indemnification, tax payments or other obligations, and contributed all 
resources required from it, under this Compact and any supplemental 
agreement.
    (i) Namibia has provided MCC with evidence that the regulations 
exempting the Projects and contractors to be engaged to work on the 
Projects from the provisions of the Architects and Quantity Surveyors 
Act 13 of 1979 and Engineering Profession Act 18 of 1986 have been 
passed and are in full force and effect, in each case in accordance 
with their terms.
    (j) For any CIF Disbursement occurring after this Compact has 
entered into force: MCC is satisfied, in its sole discretion, that (i) 
MCC has received the reports then due from any technical consultants 
(including environmental auditors engaged by MCA-Namibia for any 
Project Activity), and all such reports are in form and substance 
satisfactory to MCC; (ii) the Implementation Plan Documents submitted 
to MCC are current and updated and are in form and substance 
satisfactory to MCC, and there has been satisfactory progress on the 
components of the Implementation Plan for any relevant Projects or 
Project activities related to such CIF Disbursement; (iii) there has 
been satisfactory progress on the M&E Plan for the Program, relevant 
Project or Project Activity and substantial compliance with the 
requirements of such M&E Plan (including the targets set forth therein 
and any applicable reporting requirements set forth therein for the 
relevant Disbursement Period); (iv) there has been no material negative 
finding in any financial audit report delivered in accordance with this 
Compact and Audit Plan, for the prior two quarters (or such other 
period as the Audit Plan may require); (v) MCC does not have grounds 
for concluding that any matter certified to it in the related MCA 
Disbursement Certificate, Fiscal Agent Disbursement Certificate or 
Procurement Agent Certificate is not as certified; and (vi) if any of 
the officers or key staff of MCA-Namibia have been removed or resigned 
and the position remains vacant, MCA-Namibia is actively engaged in 
recruiting a replacement.
    (k) MCC has not determined, in its sole discretion, that an act, 
omission, condition, or event has occurred that would be the basis for 
MCC to suspend or terminate, in whole or in part, MCC Funding in 
accordance with Section 5.1 of this Compact.
    (l) Namibia has provided MCC with evidence, in form and substance 
satisfactory to MCC, that the program implementation unit that will 
serve as the management unit of MCA-Namibia has been established within 
NPC and has been exempted from the application of the Public Service 
Commission Act 13 of 1995.

Annex V Definitions

    Additional Representative has the meaning provided in Section 4.2.
    Activity has the meaning provided in Part A of Annex I.
    Agriculture Project has the meaning provided in Part D of Annex I.
    Audit Guidelines has the meaning provided in Section 3.8(a).
    Baseline has the meaning provided in paragraph 3(a) of Annex III.
    CBLRM Activity has the meaning provided in Part D of Annex I.
    CEO has the meaning provided in of Part E of Annex I.
    CIF Disbursement has the meaning provided in paragraph 1(b) of 
Annex IV.
    CLBs has the meaning provided in Part A of Annex I.
    CITES has the meaning provided in Part D of Annex I.
    Communal Land Support Activity has the meaning provided in Part D 
of Annex I.
    Compact has the meaning provided in the Preamble.
    Compact Goal has the meaning provided in Section 1.1.
    Compact Implementation Funding has the meaning provided in Section 
2.2(a).
    Compact Records has the meaning provided in Section 3.7(a).
    Compact Term has the meaning provided in Section 7.4.
    Conservancy Support Activity has the meaning provided in Part C of 
Annex I.
    COSDECs has the meaning provided in Part A of Annex I.
    Covered Provider has the meaning provided in Section 3.7(c).
    Disbursement has the meaning provided in Section 2.4.
    EA has the meaning provided in Part A of Annex I.
    Education Project has the meaning provided in Part B of Annex I.
    Education Quality Activity has the meaning provided in Part B of 
Annex I.

[[Page 46747]]

    EIA has the meaning provided in Part A of Annex I.
    EMP has the meaning provided in Part A of Annex I.
    ENP has the meaning provided in Part C of Annex I.
    ENP Activity has the meaning provided in Part C of Annex I.
    Evaluation Component has the meaning provided in paragraph 1 of 
Annex III.
    Excess CIF Amount has the meaning provided in Section 2.2(d).
    Financial Plan Annex has the meaning provided in Annex II.
    Fiscal Agent has the meaning provided in Part E of Annex I.
    Goal Indicators has the meaning provided in paragraph 3(a) of Annex 
III.
    GRN means the Government of the Republic of Namibia.
    HAMU has the meaning provided in Part B of Annex I.
    Implementation Letter has the meaning provided in Section 3.5.
    Implementing Entity has the meaning provided Part E of Annex I.
    Implementing Entity Agreement has the meaning provided in Part E of 
Annex I.
    Indicators has the meaning provided in paragraph 3(a) of Annex III.
    INP has the meaning provided in of Part A of Annex I.
    INP Activity has the meaning provided in Part D of Annex I.
    INP Innovation Fund has the meaning provided in Part D of Annex I.
    Inspector General has the meaning provided in Section 3.8(a).
    IPTT has the meaning provided in Part D of Annex I.
    Land Access and Management Activity has the meaning provided in 
Part D of Annex I.
    Livestock Market Efficiency Fund has the meaning provided in Part D 
of Annex I.
    Livestock Support Activity has the meaning provided in Part D of 
Annex I.
    M&E Annex has the meaning provided in Annex III.
    M&E Plan has the meaning provided in Annex III.
    Marketing Activity has the meaning provided in Part C of Annex I.
    MCA Act has the meaning provided in Section 2.2(a).
    MCA-Namibia has the meaning provided in Section 3.2(b).
    MCA-Namibia Procurement Rules has the meaning provided in Section 
3.6.
    MCC has the meaning provided in the Preamble.
    MCC Environmental Guidelines has the meaning provided in Section 
2.7(c).
    MCC Funding has the meaning provided in Section 2.3.
    MCC Gender Policy has the meaning provided of Part A of Annex I.
    MCC Web site has the meaning provided in Section 2.7.
    MoE has the meaning provided in of Part B of Annex I.
    MoF has the meaning provided in of Part C of Annex I.
    Monitoring Component has the meaning provided in paragraph 1 of 
Annex III.
    Multi-Year Financial Plan Summary has the meaning provided in 
paragraph 1 of Annex II.
    Namibia has the meaning provided in the Preamble.
    NCAs has the meaning provided of Part A of Annex I.
    NPC has the meaning provided in Section 3.2(b).
    NPC Act has the meaning provided in Section 3.2(b).
    NTA has the meaning provided of Part B of Annex I.
    NTF has the meaning provided in Part B of Annex I.
    OMB has the meaning provided in Section 3.8(b).
    OP 4.12 has the meaning provided Part A of Annex I.
    Party and Parties has the meaning provided in the Preamble.
    Performance Targets has the meaning provided in Part C of Annex I.
    Permitted Account has the meaning provided in Section 2.4.
    PPOs has the meaning provided Part D of Annex I.
    Principal Representative has the meaning provided in Section 4.2.
    Procurement Agent has the meaning provided in of Part E of Annex I.
    Program has the meaning provided in the Preamble.
    Program Funding has the meaning provided in Section 2.1.
    Program Implementation Agreement or PIA has the meaning provided in 
Section 3.1.
    Program Objective has the meaning provided in Section 1.2.
    Project Activity Indicators has the meaning provided in paragraph 
3(a) of Annex III.
    Project Objective(s) has the meaning provided in Section 1.3.
    Project Objective Indicators has the meaning provided in paragraph 
3(a) of Annex III.
    Project(s) has the meaning provided in Section 6.2(b).
    Provider has the meaning provided in Section 3.7(c).
    RAP has the meaning provided in Part A of Annex I.
    Resettlement means involuntary resettlement, specifically (a) the 
involuntary taking of land resulting in (i) relocation or loss of 
shelter; (ii) loss of assets or access to assets; or (iii) loss of 
income sources or means of livelihood, whether or not the affected 
persons must move to another location; or (b) the involuntary 
restriction of access to legally designated parks and protected areas 
resulting in adverse impacts on the livelihoods of the displaced 
persons.
    RSRC Activity has the meaning provided in Part B of Annex I.
    RSRCs has the meaning provided in Part B of Annex I.
    SEA has the meaning provided Part A of Annex I.
    SPAN has the meaning provided in Part C of Annex I.
    Target has the meaning provided in paragraph 3(a) of Annex III.
    Taxes has the meaning provided in Section 2.8(a).
    Tertiary Education Finance Activity has the meaning provided in 
Part B of Annex I.
    Textbook Activity has the meaning provided in Part B of Annex I.
    Tourism Project has the meaning provided in Part C of Annex I.
    US$ means United States Dollars.
    USG means the Government of the United States of America.
    VET has the meaning provided in Part B of Annex I.
    Vocational and Skills Training Activity has the meaning provided in 
Part B of Annex I.

Annex VI MCA-Namibia Procurement Rules

Part 1. Conduct and Administration of Procurement

    The principles, rules and procedures agreed herein (``Procurement 
Rules'' or ``Rules'') shall govern the conduct and administration by 
MCA-Namibia of the procurement of the goods, works, consultant and non-
consultant services that need to be acquired to implement the projects 
funded under the Compact (``Project'' or ``Projects'').
Section 1. A. Procurement Rules: Procurement of Goods, Works and Non-
Consultant Services
I. Introduction
Purpose
    1.1 The principles, rules and procedures set out in this Section 
1.A of these Rules shall govern the conduct and administration of the 
procurement of the goods, works and non-consultant services \1\ that 
need to be acquired to

[[Page 46748]]

implement the Projects under the Compact.
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    \1\ References to ``goods'' and ``works'' in these Rules include 
related services such as transportation, insurance, installation, 
commissioning, training, and initial maintenance. ``Goods'' includes 
commodities, raw materials, machinery, equipment, and industrial 
plants. The provisions of these Rules also apply to services which 
are bid and contracted on the basis of performance of a measurable 
physical output, such as drilling, mapping, and similar operations. 
The Rules governing consultant services are set out below at Section 
1.B.
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General Considerations
    1.2.1 MCA-Namibia is responsible for implementing the Projects, and 
therefore for selecting the contractors and suppliers, and awarding and 
subsequently administering the contracts. While in practice the 
specific procurement rules and procedures to be followed in the 
implementation of a Project depend on the circumstances of the 
particular case, the following four considerations (the ``Procurement 
Principles'') are agreed to generally guide the application of these 
Rules: \2\
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    \2\ These four principles are set out in Section 3.6 of the 
Compact.
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    (a) Open, fair and competitive procedures used in a transparent 
manner to solicit, award and administer contracts to procure goods, 
works and non-consultant services;
    (b) Solicitations for goods, works and non-consultant services 
shall be based upon a clear and accurate description of the goods, 
works or non-consultant services to be acquired;
    (c) Contracts shall be awarded only to qualified and capable 
suppliers and contractors that have the capability and willingness to 
perform the contracts in accordance with the terms and conditions of 
the applicable contracts and on a cost-effective and timely basis; and
    (d) No more than a commercially reasonable price (as determined, 
for example, by a comparison of price quotations and market prices) 
shall be paid to procure goods, works and non-consultant services.
    1.2.2 MCA-Namibia shall ensure that all the procurements for goods, 
works and non-consultant services in furtherance of the Compact and 
funded in whole or in part, directly or indirectly, with MCC funding 
shall comply with these Procurement Principles.
    1.3 A competitive bidding process (``Competitive Bidding'' or 
``CB'') shall serve as the standard for all procurements for all MCC-
funded goods, works, and non-consultant services conducted in 
accordance with these Rules as set out in Sub-Section 1.A.II below, 
except in those instances where MCC and MCA-Namibia agree to pursue 
other methods of procurement.
    Sub-Section 1.A.III describes these other methods of procurement 
and the circumstances under which their application would be more 
appropriate. The particular methods to be followed for procurements 
under the Compact shall be set out in Procurement Plans approved by 
MCC.
    1.4 Reserved.
Applicability of Section 1.A of These Rules
    1.5 The procedures outlined in this Section 1.A of these Rules 
apply to all contracts for goods, works and non-consultant services 
funded by MCC under the Compact.\3\
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    \3\ This includes those cases where MCA-Namibia employs an 
independent procurement agent, but excludes tenders awarded by MCC 
under its own procurement rules.
---------------------------------------------------------------------------

Eligibility
    1.6 To foster competition MCC permits firms and individuals from 
almost all countries \4\ to offer goods, works, and non-consultant 
services for MCC-funded Projects. Any conditions for participation 
shall be limited to those that are essential to ensure the firm's 
capability to fulfill the contract in question.
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    \4\ Firms and individuals from any country subject to sanction 
or restriction by law or policy of the United States are not 
eligible to compete for MCC-funded contracts. See Paragraph 1.8(e) 
of Section 1.A of these Rules.
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    1.7 In connection with any MCC-funded contract, MCA-Namibia shall 
not deny pre- or post-qualification to a firm for reasons unrelated to 
its capability and resources to perform the contract successfully; nor 
shall MCA-Namibia disqualify any bidder for such reasons. Consequently, 
MCA-Namibia should carry out due diligence on the legal, technical and 
financial qualifications of bidders to be assured of their capabilities 
in relation to the specific contract.
    1.8 As exceptions to the foregoing:
    (a) Firms of a country or goods manufactured in a country may be 
excluded if, (i) as a matter of law or official regulation, the 
Republic of Namibia prohibits commercial relations with that country, 
provided that MCC is satisfied that such exclusion does not preclude 
effective competition for the supply of goods or works required, or 
(ii) by an act of compliance with a decision of the United Nations 
Security Council taken under Chapter VII of the Charter of the United 
Nations, the Republic of Namibia prohibits any import of goods from, or 
payments to, a particular country, person, or entity. Where the 
Republic of Namibia prohibits payments to a particular firm or for 
particular goods by such an act of compliance, that firm may be 
excluded.
    (b) A firm which has been engaged to provide consultant services 
for the preparation or implementation of a Project, and any of its 
affiliates, shall be disqualified from subsequently providing goods, 
works, consultant or non-consultant services resulting from or directly 
related to the firm's consultant services for such preparation or 
implementation. This provision does not apply to the various firms 
(consultants, contractors, or suppliers) which together are performing 
the contractor's obligations under a turnkey or design and build 
contract.\5\
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    \5\ See Paragraph 2.5 of Section 1.A of these Rules.
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    (c) Government-owned enterprises in the Republic of Namibia may 
participate if they are receiving no state subsidy and can demonstrate 
that they do not receive a cross-subsidy of income as a result of 
statutory powers.\6\
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    \6\ Other than Force Account units, as permitted under Paragraph 
3.8 of Section 1.A of these Rules.
---------------------------------------------------------------------------

    (d) A firm declared ineligible through MCC's Excluded Parties 
Verification procedures located at http://www.mcc.gov/documents/mcc-ppg-eligibilityverification.pdf shall be ineligible to be awarded an 
MCC-funded contract. This would also remove from eligibility any 
procurement from a country or from a firm that is organized in or has 
its principal place of business or a significant portion of its 
operations in any country that is subject to sanction or restriction by 
law or policy of the United States.\7\
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    \7\ As of July 2008, this list includes Cuba, Iran, North Korea, 
Sudan and Syria.
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Advance Contracting and Retroactive Financing
    1.9 The process of identifying and selecting contractors for the 
provision of goods, works or non-consultant services to implement 
projects funded under the Compact before the Compact enters into force 
is referred to as advance contracting. Similarly, payments made under a 
contract that is signed prior to the Compact entering into force for 
which MCA-Namibia would seek reimbursement from MCC is known as 
retroactive financing. MCA-Namibia will not engage in any advance 
contracting or be entitled to any retroactive financing, without the 
prior approval of MCC.
Joint Ventures
    1.10 Any firm may bid independently or in joint venture confirming 
joint and several liability, with domestic firms and/or with foreign 
firms, but MCC does not accept conditions of bidding which require 
mandatory joint ventures or other forms of mandatory association 
between firms.

[[Page 46749]]

MCC Review
    1.11 MCC shall be entitled to review MCA-Namibia procurement 
procedures, documents, bid evaluations, award recommendations, and 
contracts to ensure that the procurement process is carried out in 
accordance with the agreed procedures. These review procedures are 
described in Attachment 1 of these Rules.
Misprocurement
    1.12 MCC does not fund expenditures for goods, works and non-
consultant services which have not been procured in accordance with the 
agreed provisions as detailed in the Compact, these Rules and the 
approved Procurement Plans.\8\ In such cases, MCC will declare 
misprocurement, and may cancel that portion of the Compact allocated to 
the goods, works or non-consultant services that have been misprocured 
if corrective measures satisfactory to MCC are not taken. MCC may, in 
addition, exercise other remedies provided for under the Compact. Even 
once the contract is awarded after obtaining an approval from MCC, MCC 
may still declare misprocurement if it concludes that the approval was 
issued on the basis of incomplete, inaccurate, or misleading 
information furnished by MCA-Namibia or the terms and conditions of the 
contract had been modified without MCC approval.
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    \8\ See Paragraphs 1.16.1, 1.16.2 and 1.16.3 of Section 1.A of 
these Rules.
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References to MCC
    1.13 MCA-Namibia shall use the following language when referring to 
MCC in procurement documents:

    The United States of America, acting through the Millennium 
Challenge Corporation (``MCC'') and the Republic of Namibia (the 
``Government'') have entered into a Millennium Challenge Compact for 
Millennium Challenge Account assistance to help facilitate poverty 
reduction through economic growth in the Republic of Namibia (the 
``Compact'') in the amount of [Insert amount of Compact] US$ (``MCC 
Funding''). MCA-Namibia on behalf of the Government intends to apply 
a portion of the proceeds of MCC Funding to eligible payments under 
this contract. Payments by MCA-Namibia will be subject, in all 
respects, to the terms and conditions, including restrictions on the 
use of MCC Funding, of the Compact. No party other than the 
Government and MCA-Namibia shall derive any rights from the Compact 
or have any claim to the proceeds of MCC Funding.
Fraud and Corruption
    1.14 MCC requires that all beneficiaries of MCC funding, including 
MCA-Namibia and any bidders, suppliers, contractors, and subcontractors 
under any MCC-funded contracts observe the highest standards of ethics 
during the procurement and execution of such contracts. In pursuance of 
this policy, the following provisions shall apply.
    (a) For the purposes of these provisions, the terms set forth below 
are defined as follows:
    (i) ``Corrupt practice'' means the offering, giving, receiving, or 
soliciting, directly or indirectly, of anything of value to influence 
the actions of a public official (including MCA-Namibia and MCC staff 
and employees of other organizations taking or reviewing selection 
decisions) in the selection process or in contract execution or the 
making of any payment to any third party, in connection with or in 
furtherance of a contract, in violation of (aa) the United States 
Foreign Corrupt Practices Act of 1977, as amended (15 U.S.C. 78a et 
seq.) (``FCPA''), or any other actions taken that otherwise would be in 
violation of the FCPA if the FCPA were applicable, or (bb) any 
applicable law in the Republic of Namibia;
    (ii) ``Fraudulent practice'' means any act or omission, including 
any misrepresentation, in order to influence (or attempt to influence) 
a selection process or the execution of a contract to obtain a 
financial or other benefit, or to avoid (or attempt to avoid) an 
obligation;
    (iii) ``Collusive practice'' means a scheme or arrangement between 
two or more parties, with or without the knowledge of MCA-Namibia, 
designed to establish prices at artificial, noncompetitive levels or to 
otherwise deprive MCA-Namibia of the benefits of free and open 
competition;
    (iv) ``Coercive practice'' means impairing or harming or 
threatening to impair or harm, directly or indirectly, persons or their 
property, to influence their participation in a procurement process, or 
affect the execution of a contract;
    (v) ``Obstructive practice'' means:
    (aa) Destroying, falsifying, altering or concealing of evidence 
material to the investigation or making false statements to 
investigators in order to impede an investigation into allegations of a 
corrupt, fraudulent, coercive, collusive, or prohibited practice; and 
threatening, harassing, or intimidating any party to prevent it from 
disclosing its knowledge of matters relevant to the investigation or 
from pursuing the investigation; and
    (bb) Acts intended to impede the exercise of the inspection and 
audit rights of MCC provided under the Compact; and
    (vi) ``Prohibited practice'' means any action that violates Section 
E (Compliance with Anti-Corruption Legislation), Section F (Compliance 
with Anti-Money Laundering Legislation) and Section G (Compliance with 
Terrorist Financing Statutes and Other Restrictions) of the ``General 
Provisions Annex'' that will be made a part of MCC-funded contracts and 
may be found on the MCC Web site at http://www.mcc.gov/guidance/compact/general_provisions.pdf.
    (b) MCA-Namibia will reject a bid (and MCC will deny approval of a 
proposal for contract award) if it determines that the bidder 
recommended for award has, directly or through an agent, engaged in 
corrupt, fraudulent, collusive, coercive, obstructive or prohibited 
practices in competing for the contract in question.
    (c) MCC and MCA-Namibia have the right to sanction a bidder, 
supplier, contractor, or subcontractor, including declaring such party 
ineligible, either indefinitely or for a stated period of time, to be 
awarded an MCC-funded contract if at any time either MCA-Namibia or MCC 
determines that the bidder, supplier, contractor, or subcontractor has, 
directly or through an agent, engaged in corrupt, fraudulent, 
collusive, coercive, obstructive or prohibited practices in competing 
for, or in executing, such a contract.
    (d) MCC and MCA-Namibia have the right to require that a provision 
be included in solicitation documents and in MCC-funded contracts 
requiring a bidder, supplier, contractor, or subcontractor to permit 
MCA-Namibia, MCC, or any designee of MCC, to inspect its accounts, 
records and other documents relating to the submission of a bid or 
performance of a MCC-funded contract and to have them audited by 
auditors appointed by MCC or MCA-Namibia with the approval of MCC.
    (e) MCC has the right to cancel the portion of MCC funding 
allocated to a contract if it determines at any time that 
representatives of a beneficiary of the MCC funding engaged in corrupt, 
fraudulent, collusive, coercive, obstructive or prohibited practices 
during the selection process or the execution of a MCC-funded contract, 
without MCA-Namibia having taken timely and appropriate action 
satisfactory to MCC to remedy the situation.
    1.15 To the extent required by Namibian law, MCA-Namibia shall 
introduce, into bid forms for large contracts funded by MCC, an 
undertaking of the bidder to observe, in competing for and executing a 
contract, the country's laws against fraud and

[[Page 46750]]

corruption (including bribery), as listed in the solicitation 
documents. In the event such an undertaking is not required by Namibian 
law, MCA-Namibia may introduce the undertaking with the approval of 
MCC.
Procurement Plan
    1.16.1 MCA-Namibia shall prepare periodic procurement plans, that 
are updated at least semi-annually, for acquiring goods, works and non-
consultant services needed to implement the Compact (each a 
``Procurement Plan''). Each Procurement Plan shall be adopted by the 
governing body of MCA-Namibia and shall be submitted to MCC for its 
approval. Each Procurement Plan,\9\ typically covering a six (6) month 
period, (a) lists the particular contracts for the goods, works, and/or 
non-consultant services required to implement the Compact for the 
period covered in such Procurement Plan; (b) identifies the proposed 
method of procurement for such contracts as determined according to 
these Rules; and (c) sets forth the estimated value for each contract.
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    \9\ When consultant services also need to be procured, the 
Procurement Plan must also include such procurements in accordance 
with the requirements at Section 1.5 Par. 1.24 of these Rules.
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    1.16.2 MCA-Namibia shall ensure that all goods, works and non-
consultant services shall be procured using the procurement method 
approved in each Procurement Plan. Compliance, satisfactory to MCC, 
with the approved Procurement Plan shall be a condition precedent to 
MCC Disbursements or payments.
    1.16.3 MCA-Namibia shall not initiate any procurement action that 
is a substantial deviation \10\ from the applicable adopted and 
approved Procurement Plan without the prior approval of MCC. If MCA-
Namibia determines that such a deviation is necessary or appropriate, 
MCA-Namibia shall submit a request to MCC for its approval of an 
amended Procurement Plan. If approved by MCC, MCA-Namibia shall comply 
with any instructions contained in the MCC approval, including any 
publication requirements. Any substantial deviation from a Procurement 
Plan as approved and adopted shall be submitted to the governing body 
of MCA-Namibia for adoption of the amended Procurement Plan.
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    \10\ A ``substantial deviation'' is a change that adds a 
procurement action or actions that have a cumulative value of 
$10,000 or more, changes the procurement method, significantly 
increases or decreases the budget, or increases the budget 
allocations above the threshold for the designated method of 
procurement or selection procedure.
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II. Competitive Bidding

A. General
Introduction
    2.1 The objective of Competitive Bidding, as described in these 
Rules, is to provide all eligible prospective bidders \11\ with timely 
and adequate notification of MCA-Namibia's requirements and an equal 
opportunity to bid for the required goods, works and non-consultant 
services.
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    \11\ See Paragraphs 1.6, 1.7 and 1.8 of Section 1.A of these 
Rules.
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Type and Size of Contracts
    2.2 The solicitation documents shall clearly state the type of 
contract to be entered into and contain the proposed contract 
provisions appropriate for the type of contract to be used. 
Reimbursable cost contracts are acceptable to MCC only in exceptional 
circumstances such as conditions of high risk or where costs cannot be 
determined in advance with sufficient accuracy. Such contracts shall 
include appropriate incentives to limit costs and shall reference MCC 
Cost Principles (``MCC Cost Principles'') found at the MCC Web site, 
http://www.mcc.gov. Requirements contracts, indefinite delivery-
indefinite quantity (``IDIQ'') contracts and blanket purchase 
agreements may also be used.
    2.3 The size and scope of individual contracts will depend on the 
magnitude, nature, and location of the Project. For Projects requiring 
a variety of goods and works, separate contracts generally are awarded 
for the supply and/or installation of different items of equipment and 
plant \12\ and for the works.
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    \12\ For purposes of these Rules, ``plant'' refers to installed 
equipment, as in a production facility.
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    2.4 For a Project requiring similar but separate items of goods or 
works, bids may be invited under alternative contract options that 
would attract the interest of both small and large firms which could be 
allowed, at their option, to bid for individual contracts (slices) or 
for a group of similar contracts (package). All bids and combinations 
of bids shall be received by the same deadline and opened and evaluated 
simultaneously so as to determine the bid or combination of bids 
offering the lowest evaluated cost to MCA-Namibia.\13\
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    \13\ See Paragraphs. 2.49-2.54 of Section 1.A of these Rules for 
the bid evaluation procedures.
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    2.5 In certain cases a turnkey contract may be required under which 
the design and engineering, the supply and installation of equipment, 
and the construction of a complete facility or works are provided under 
one contract. Alternatively, MCA-Namibia may remain responsible for the 
design and engineering, and invite bids for a single responsibility 
contract for the supply and installation of all goods and works 
required for the Project component. Design and build, and management 
contracting contracts may also be appropriate.\14 \
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    \14\ Also see Paragraphs 3.14 and 3.15 of Section 1.A of these 
Rules for performance-based contracting.
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Two-Stage Bidding
    2.6 In the case of turnkey contracts or contracts for large complex 
facilities or works of a special nature, or complex information and 
communication technology, it may be undesirable or impractical to 
prepare complete technical specifications in advance. In such a case, a 
Two-Stage Bidding procedure may be used, under which first un-priced 
technical proposals on the basis of a conceptual design or performance 
specifications are invited, subject to technical as well as commercial 
clarifications and adjustments, to be followed by amended bidding 
documents \15\ and the submission of final technical proposals and 
priced bids in the second stage.
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    \15\ In revising the bidding documents in the second stage MCA-
Namibia should respect the confidentiality of the bidders' technical 
proposals used in the first stage, consistent with requirements of 
transparency and intellectual property rights.
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Notification and Advertising
    2.7 On at least a semi-annual basis, MCA-Namibia shall publicize 
the procurements planned for the upcoming period as identified in the 
adopted Procurement Plan, which was approved by MCC (each a ``General 
Procurement Notice''). The General Procurement Notice shall be in a 
form acceptable to MCC and include information derived from the 
Procurement Plan and the name, telephone (or fax) number, and e-mail 
and postal address of MCA-Namibia agent responsible for procurement and 
the address of the Web site(s) where Specific Procurement Notices will 
be posted. If known, the scheduled date for availability of 
solicitation documents for each procurement (including prequalification 
or bidding documents) should be indicated. Such solicitation documents 
shall not be released to the public earlier than the date of 
publication of the General and Specific Procurement Notices. The 
General Procurement Notice shall be advertised in a manner to provide 
reasonable notice of planned procurements to potential suppliers and 
contractors. Advertisement of the

[[Page 46751]]

General Procurement Notice shall include posting in English at MCA-
Namibia's Web site (or such other appropriate Web site designated by 
MCA-Namibia and approved by MCC), the Development Gateway Market Web 
site at www.dgmarket.com (``dgMarket'') and the United Nations 
Development Business online Web site at www.devbusiness.com (``UNDB 
Online'').\16\ MCA-Namibia shall also publish the General Procurement 
Notice in a newspaper of wide circulation in the Republic of Namibia 
and in such other media outlets as appropriate or as requested from 
time to time by MCC.
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    \16\ UNDB is a publication of the United Nations. Subscription 
information is available from: Development Business, United Nations, 
GCPO Box 5850, New York, NY 10163-5850, USA (Web site: http://www.devbusiness.com; e-mail: <a href="/cdn-cgi/l/email-protection#4521273630273626372c272005302b6b2a3722"><span class="__cf_email__" data-cfemail="2a4e48595f4859495843484f6a5f440445584d">[email protected]</span></a>); Development 
Gateway Market is an electronic portal of Development Gateway 
Foundation, 1889 F Street, NW., Washington, DC 20006, USA (Web site: 
http://www.dgmarket.com).
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    2.8 Invitations to prequalify or to bid, as the case may be, shall 
be advertised as Specific Procurement Notices (each, a ``Specific 
Procurement Notice''). For contracts for Goods and Non-consulting 
services valued at or over US $200,000 and contracts for Works valued 
at or over US $1,000,000, such invitations shall be published in at 
least one newspaper of national circulation in the Republic of Namibia, 
posted on MCA-Namibia's Web site (or such other appropriate Web site 
designated by MCA-Namibia and approved by MCC) and at dgMarket Web site 
and UNDB Online. Publication in local print and broadcast and other 
national and international media is encouraged as long as the posting 
does not pre-date the required postings.
    For contracts for Works valued at or over US$200,000 and under 
US$1,000,000, such invitations shall be published in at least one 
newspaper of national circulation in the Republic of Namibia and posted 
on MCA-Namibia's Web site (or such other appropriate Web site 
designated by MCA-Namibia and approved by MCC). The text of the notice 
may be subject to prior approval by MCC. Notification shall be given in 
sufficient time to enable prospective bidders to obtain 
prequalification or bidding documents and prepare and submit their 
responses taking into consideration the estimated value of the contract 
and period of advance notice given with the General Procurement 
Notice.\17\
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    \17\ Also see Paragraph 2.44 of Section 1.A of these Rules.
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Prequalification of Bidders
    2.9 Prequalification is usually necessary for large or complex 
works, or in any other circumstances in which the high costs of 
preparing detailed bids could discourage competition, such as custom 
designed equipment, industrial plants, specialized services, some 
complex information and technology and contracts to be let under 
turnkey, design and build, or management contracting. This also ensures 
that invitations to bid are extended only to those who have adequate 
capabilities and resources. Prequalification shall be based entirely 
upon the capability and resources of prospective bidders to perform the 
particular contract satisfactorily, taking into account their (a) 
experience and past performance on similar contracts, (b) capabilities 
with respect to personnel, equipment, and construction or manufacturing 
facilities, and (c) financial position.
    2.10 The invitation to prequalify for bidding on specific contracts 
or groups of similar contracts shall be advertised as described in 
Paragraphs 2.7 and 2.8 above. The scope of the contract and a clear 
statement of the requirements for qualification shall be sent to those 
who responded to the invitation. All such applicants that meet the 
specified criteria shall be allowed to bid. MCA-Namibia shall inform 
all applicants of the results of prequalification. As soon as 
prequalification is completed, the bidding documents shall be made 
available to the qualified prospective bidders. For prequalification 
for groups of contracts to be awarded over a period of time, a limit 
for the number or total value of awards to any one bidder may be made 
on the basis of the bidder's resources. The list of prequalified firms 
in such instances shall be updated periodically. Verification of the 
information provided in the submission for prequalification shall be 
confirmed at the time of award of contract, and award may be denied to 
a bidder that is judged no longer to have the capability or resources 
to perform the contract successfully.
B. Bidding Documents
General
    2.11 The bidding documents shall furnish all information necessary 
for a prospective bidder to prepare a bid for the goods, works and non-
consultant services to be provided. While the detail and complexity of 
these documents may vary with the size and nature of the proposed bid 
package and contract, they generally include: Invitation to bid; 
instructions to bidders; form of bid; form of contract; conditions of 
contract, both general and special; specifications and drawings; 
relevant technical data (including of geological and environmental 
nature); list of goods or bill of quantities; delivery time or schedule 
of completion; and necessary appendices, such as formats for various 
securities. The basis for bid evaluation and selection of the lowest 
evaluated bid shall be clearly outlined in the instructions to bidders 
and/or the specifications. If a fee is charged for the bidding 
documents, it shall be reasonable and reflect only the cost of their 
printing and delivery to prospective bidders, and shall not be so high 
as to discourage qualified bidders. MCA-Namibia may use an electronic 
system to distribute bidding documents, provided that MCC is satisfied 
with the adequacy of such system. If bidding documents are distributed 
electronically, the electronic system shall be secure to avoid 
modifications to the bidding documents and shall not restrict the 
access of bidders to the bidding documents. Guidance on critical 
components of the bidding documents is given in the following 
paragraphs.
    2.12 MCA-Namibia shall use the appropriate Standard Solicitation 
Documents, including the Standard Bidding Documents, as approved by MCC 
pursuant to Part 3 of these Rules, and as may be modified to address 
Project-specific conditions, subject to approval by MCC when the change 
is material. To the extent possible, such changes shall be introduced 
through bid or contract data sheets or through special conditions of 
contract, and not by introducing changes in the standard wording of 
MCA-Namibia's Standard Solicitation Documents.
Validity of Bids and Bid Security
    2.13 Bidders shall be required to submit bids valid for a period 
specified in the bidding documents which shall be sufficient to enable 
MCA-Namibia to complete the comparison and evaluation of bids, review 
the recommendation of award with MCC (if required), and obtain all the 
necessary approvals so that the contract can be awarded within that 
period.
    2.14 MCA-Namibia has the option of requiring a bid security. When 
used, the bid security shall be in the amount and form specified in the 
bidding documents \18\ and shall remain valid for a sufficient time 
beyond the validity

[[Page 46752]]

period of the bids, in order to provide reasonable time for MCA-Namibia 
to act if the security is to be called. Bid security shall be released 
to unsuccessful bidders once the contract has been signed with the 
winning bidder. In place of a bid security, MCA-Namibia may require 
bidders to sign a declaration accepting that if they withdraw or modify 
their bids during the period of validity or they are awarded the 
contract and they fail to sign the contract or to submit a performance 
security before the deadline defined in the bidding documents, the 
bidder will be suspended for a period of time from being eligible for 
bidding in any contract with MCA-Namibia.
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    \18\ The format of the bid security shall be in accordance with 
what was approved by MCC with its approval of MCA-Namibia's Standard 
Bidding Documents and shall be issued by a reputable bank or 
financial institution selected by the bidder. If the institution 
issuing the security is located outside the Republic of Namibia, it 
shall have a correspondent financial institution located in the 
Republic of Namibia to make it enforceable.
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Language
    2.15.1 All advertisements for contracts and notices of contract 
awards whether posted at MCA-Namibia's Web site, at dgMarket, or UNDB 
Online shall be posted in English.
    2.15.2 For all contracts, the solicitation documents as well as the 
documents responding to these solicitations, including the proposals, 
shall be prepared in English. All contracts shall be written in English 
and this language shall govern contractual relations between MCA-
Namibia and the contractor.
Clarity of Bidding Documents
    2.16 Bidding documents shall be so worded as to permit 
international competition and shall set forth clearly and precisely the 
work to be carried out, the location of the work, the goods to be 
supplied, the place of delivery or installation, the schedule for 
delivery or completion, minimum performance requirements, and the 
warranty and maintenance requirements, as well as any other pertinent 
terms and conditions. In addition, the bidding documents, where 
appropriate, shall define the tests, standards, and methods that will 
be employed to judge the conformity of equipment as delivered, or works 
as performed, with the specifications. Drawings shall be consistent 
with the text of the specifications, and an order of precedence between 
the two shall be specified.
    2.17 The bidding documents shall specify any factors, in addition 
to price, which will be taken into account in evaluating bids, and how 
such factors will be quantified or otherwise evaluated. If bids based 
on alternative designs, materials, completion schedules, etc., are 
permitted, conditions for their acceptability and the method of their 
evaluation shall be expressly stated.\19\
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    \19\ See Sec.  2.52.
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    2.18 All prospective bidders shall be provided the same 
information, and shall be assured of equal opportunities to obtain 
additional information on a timely basis. MCA-Namibia shall provide 
reasonable access to Project sites for visits by prospective bidders. 
For works or complex supply contracts, particularly for those requiring 
refurbishing existing works or equipment, a pre-bid conference may be 
arranged whereby potential bidders may meet with representatives of 
MCA-Namibia to seek clarifications (in person or online). Minutes of 
the conference shall be provided to all prospective bidders with a copy 
included in the record of the procurement. Any additional information, 
clarification, correction of errors, or modifications of bidding 
documents shall be sent to each recipient of the original bidding 
documents in sufficient time before the deadline for receipt of bids to 
enable bidders to take appropriate actions. If necessary, the deadline 
shall be extended. MCC shall receive a copy of modifications to the 
bidding documents and be consulted for issuing its approval when the 
contract is subject to prior review by MCC.
Standards
    2.19 Standards and technical specifications quoted in bidding 
documents shall promote the broadest possible competition, while 
assuring the critical performance or other requirements for the goods 
and/or works under procurement. As far as possible, MCA-Namibia shall 
specify internationally accepted standards such as those issued by the 
International Standards Organization with which the equipment or 
materials or workmanship shall comply. Where such international 
standards are unavailable or are inappropriate, national standards may 
be specified.
    In all cases, the bidding documents shall state that equipment, 
material, or workmanship meeting other standards, which promise at 
least substantial equivalence, will also be accepted.
Use of Brand Names
    2.20 Specifications shall be based on relevant characteristics and/
or performance requirements. References to brand names, catalog 
numbers, or similar classifications shall be avoided. If it is 
necessary to quote a brand name or catalog number of a particular 
manufacturer to clarify an otherwise incomplete specification, the 
words ``or equivalent'' shall be added after such reference. The 
specification shall permit the acceptance of offers for goods which 
have similar characteristics and which provide performance at least 
substantially equivalent to those specified.
Pricing
    2.21 Bids for goods shall be invited on the basis of (a) CIP \20\ 
for all goods manufactured abroad, including those previously imported, 
and (b) EXW \21\ for goods manufactured or assembled in the Republic of 
Namibia, plus the cost of inland transportation and insurance to the 
place of destination, subject to any modifications set forth in the 
solicitation documents. Bidders shall be allowed to arrange for ocean 
and other transportation and related insurance from any eligible 
source.\22\ Where installation, commissioning, or other similar 
services are required to be performed by the bidder, as in the case of 
``supply and installation'' contracts, the bidder shall be required to 
quote for these services, in addition.
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    \20\ Refer to INCOTERMS 2000, published by the International 
Chamber of Commerce, Cours Albert 1er, 75008 Paris, France, for 
definition of CIP.
    \21\ Refer to INCOTERMS 2000, published by the International 
Chamber of Commerce, Cours Albert 1er, 75008 Paris, France, for 
definition of EXW.
    \22\ See Paragraphs 1.6, 1.7 and 1.8 of Section 1.A of these 
Rules.
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    2.22 In the case of turnkey contracts, the bidder shall be required 
to quote the price of the installed plant at site, including all costs 
for supply of equipment, marine and local transportation and insurance, 
installation, and commissioning, as well as associated works and all 
other services included in the scope of contract such as design, 
maintenance, operation, etc.
    2.23 Bidders for works contracts shall be required to quote unit 
prices or lump sum prices for the performance of the works. Bidders 
shall be allowed to obtain all inputs from any eligible source so that 
they may offer their most competitive bids.
Price Adjustment
    2.24 Bidding documents shall state either (a) that bid prices will 
be fixed or (b) that price adjustments will be made to reflect any 
changes (upwards or downwards) in major cost components of the 
contract, such as labor, equipment, materials, and fuel. Price 
adjustment provisions might be included in contracts which extend 
beyond eighteen months with the approval of MCC.
    2.25 Prices may be adjusted by the use of a prescribed formula (or

[[Page 46753]]

formulae) which breaks down the total price into components that are 
adjusted by price indices specified for each component or, 
alternatively, on the basis of documentary evidence (including actual 
invoices) provided by the supplier or contractor. The use of the 
formula method of price adjustment is preferable to that of documentary 
evidence. The method to be used, the formula (if applicable), and the 
base date for application shall be clearly defined in the bidding 
documents. If the payment currency is different from the source of the 
input and corresponding index, a correction factor shall be applied in 
the formula, to avoid incorrect adjustment.
Transportation and Insurance
    2.26 Bidding documents shall permit suppliers and contractors to 
arrange transportation and insurance from any eligible source. Bidding 
documents shall state the types and terms of insurance to be provided 
by the bidder. The indemnity payable under transportation insurance 
shall be at least 110 percent of the contract amount denominated in 
United States dollars or local currency of the Republic of Namibia 
depending upon the currency of the contract. For works, a contractor's 
``all risk'' form of policy usually shall be specified. For large 
Projects with several contractors on a site, a ``wrap up'' or total 
Project insurance arrangement may be obtained by MCA-Namibia, in which 
case MCA-Namibia shall seek competition for such insurance.
    2.27 Reserved.
Currency Provisions
    2.28 Bidding documents shall state the currency or currencies in 
which bidders are to state their prices. All bids are to be denominated 
and paid only in United States dollars, the local currency of the 
Republic of Namibia, or a combination of the two as stated in the 
bidding documents. No other currency is permitted.
Currency of Bid
    2.29 The bidding documents shall caution bidders that the bid price 
must be expressed in the currency requested. The requested currency may 
be either United States dollars, the currency of the Republic of 
Namibia, or a combination of the two. Bids may not be requested or 
expressed in any other currency.
    2.30 Reserved.
Currency Conversion for Bid Comparison
    2.31 The bid price is the sum of all payments in United States 
dollars or the currency of the Republic of Namibia as applicable. For 
the purpose of comparing prices, bid prices shall be converted to 
either one of the two currencies as selected by MCA-Namibia and stated 
in the bidding documents. MCA-Namibia shall make this conversion by 
using the forward or selling (exchange) rates, as appropriate, for 
those currencies quoted by an official, public source (such as the Bank 
of Namibia), by a commercial bank or by an internationally circulated 
newspaper for similar transactions on a date selected in advance. Such 
source and date to be specified in the bidding documents, provided that 
the date shall not be earlier than four weeks prior to the deadline for 
the receipt of bids, nor later than the original date for the 
expiration of the period of bid validity.
Currency of Payment
    2.32 Payment of the contract price shall be made in the currency 
(or currencies) as stated in the bidding documents.
    2.33 Reserved.
Terms and Methods of Payment
    2.34 Payment terms shall be in accordance with the international 
commercial practices applicable to the specific goods, works and non-
consultant services. The contract shall provide for the payment of 
interest if payment is delayed due to the fault of MCA-Namibia or its 
agents beyond the time allowed in the contract; the rate of charges 
shall be specified in the contract.
    (a) Contracts for supply of goods shall provide for full payment on 
the delivery and inspection, if so required, of the contracted goods 
except for contracts involving installation, commissioning and testing, 
in which case a portion of the payment may be made after the supplier 
has complied with all its obligations under the contract. In major 
contracts for goods and plants, provision shall be made for partial 
payments for work done and, in contracts of long duration, for partial 
payments during the period of manufacture or assembly.
    (b) Contracts for works shall provide in appropriate cases for 
partial payments for work done in furtherance of contract performance 
and reasonable retention amounts to be released upon compliance with 
the contractor's obligations under contract.
    2.35 Any payment for work done in furtherance of the contract shall 
be related to the estimated amount of these expenses and be specified 
in the bidding documents. Amounts and timing of other payments to be 
made, such as for materials delivered to the site for incorporation in 
the works, shall also be specified. Payment made in advance of work 
done, including payment made upon signature of a contract for goods or 
works (advance payments) requires prior approval of MCC and a 
commitment of a security guarantee or bond in the amount of the advance 
payment. The bidding documents shall specify the arrangements for any 
security required for advance payments.
    2.36 Bidding documents shall specify the payment method. Terms of 
payment may not be used as an evaluation criterion and may not affect 
the bid evaluation.
Alternative Bids
    2.37 The bidding documents shall clearly indicate when bidders are 
allowed to submit alternative bids, how alternative bids should be 
submitted, how bid prices should be offered and the basis on which 
alternative bids shall be evaluated.
Conditions of Contract
    2.38 The contract documents shall clearly define the scope of work 
to be performed, the goods to be supplied, the rights and obligations 
of MCA-Namibia and of the supplier or contractor, and the functions and 
authority of the engineer, architect, or construction manager, if one 
is employed by MCA-Namibia, in the supervision and administration of 
the contract. In addition to the general conditions of contract, any 
special conditions particular to the specific goods, works or non-
consultant services to be procured and the location of the Project 
shall be included.
Performance Security
    2.39 Bidding documents for works shall require a security in an 
amount sufficient to protect MCA-Namibia in case of breach of contract 
by the contractor. This security shall be provided in an appropriate 
form and amount, as specified by MCA-Namibia in the bidding 
document.\23\ The amount of the security may vary, depending on the 
type of security furnished and on the nature and magnitude of the 
works. A portion of this security shall extend sufficiently beyond the 
date of completion of the works to cover the

[[Page 46754]]

defects liability or maintenance period up to final acceptance by MCA-
Namibia.
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    \23\ The format of the performance security shall be in 
accordance with the Standard Bidding Documents and shall be issued 
by a reputable bank or financial institution selected by the bidder. 
If the institution issuing the security is located outside the 
Republic of Namibia, it shall have a correspondent financial 
institution located in the Republic of Namibia to make it 
enforceable.
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    2.40 In contracts for the supply of goods, the need for performance 
security depends on the market conditions and commercial practice for 
the particular kind of goods. Suppliers or manufacturers may be 
required to provide a security to protect against nonperformance of the 
contract and to cover warranty obligations. The security shall be 
reasonable in amount.
Liquidated Damages and Bonus Clauses
    2.41 Provisions for liquidated damages or similar provisions in an 
appropriate amount shall be included in the conditions of contract when 
delays in the delivery of goods, completion of works or failure of the 
goods, works or non-consultant services to meet performance 
requirements would result in extra cost or loss of revenue or loss of 
other benefits to MCA-Namibia. With prior approval of MCC, provision 
may also be made for a bonus to be paid to suppliers or contractors for 
completion of works or delivery of goods ahead of the times specified 
in the contract when such earlier completion or delivery would be of 
benefit to MCA-Namibia.
Force Majeure
    2.42 The conditions of contract shall stipulate that failure on the 
part of the parties to perform their obligations under the contract 
will not be considered a default if such failure is the result of an 
event of force majeure as defined in the conditions of contract.
Applicable Law and Settlement of Disputes
    2.43 The conditions of contract shall include provisions dealing 
with the applicable law and the forum for the settlement of disputes. 
Settlement of disputes shall take place in the Republic of Namibia with 
the possibility for international arbitration in the cases where the 
parties so agree. In the case of works contracts, supply and 
installation contracts, and turnkey contracts, the dispute settlement 
provision might also include mechanisms such as dispute review boards 
or adjudicators, which are designed to permit a speedier dispute 
settlement.
C. Bid Opening, Evaluation, and Award of Contract
Time for Preparation of Bids
    2.44 The time allowed for the preparation and submission of bids 
shall be determined with due consideration of the particular 
circumstances of the Project, the magnitude and complexity of the 
contract, and the period of advanced notice provided by the General 
Procurement Notice. Where large works or complex items of equipment are 
involved, the period shall be long enough to enable prospective bidders 
to conduct investigations before submitting their bids. In such cases, 
MCA-Namibia may convene pre-bid conferences and arrange site visits. 
Bidders shall be permitted to submit bids by mail or by hand. MCA-
Namibia may also use electronic systems permitting bidders to submit 
bids by electronic means, provided MCC is satisfied with the adequacy 
of the system, including, inter alia, that the system is secure, 
maintains the confidentiality and authenticity of bids submitted, uses 
an electronic signature system or equivalent to keep bidders bound to 
their bids, and only allows bids to be opened with due simultaneous 
electronic authorization of the bidder and MCA-Namibia. In this case, 
bidders shall continue to have the option to submit their bids in hard 
copy. The deadline and place for receipt of bids shall be specified in 
the invitation to bid.
Bid Opening Procedures
    2.45 The time for the bid opening shall be the same as for the 
deadline for receipt of bids or promptly \24\ thereafter, and shall be 
announced, together with the place for bid opening, in the invitation 
to bid. MCA-Namibia shall open all bids at the stipulated time and 
place. Bids shall be opened in public; bidders or their representatives 
shall be allowed to be present (in person or online, when electronic 
bidding is used) and the general public, at the discretion of MCA-
Namibia. The name of the bidder and total amount of each bid, and of 
any alternative bids if they have been requested or permitted, shall be 
read aloud (and posted online when electronic bidding is used) and 
recorded when opened and a copy of this record shall be sent to all 
bidders who submitted bids in time. Bids received after the time 
stipulated, as well as those not opened and read aloud at bid opening, 
shall not be considered.
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    \24\ To allow sufficient time to take the bids to the place 
announced for public bid opening.
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Clarifications or Alterations of Bids
    2.46 Except as otherwise provided in Paragraphs 2.63 and 2.64 of 
Section 1.A of these Rules, bidders shall not be requested or permitted 
to alter their bids after the deadline for receipt of bids. MCA-Namibia 
shall ask bidders for clarification needed to evaluate their bids but 
shall not ask or permit bidders to change the substance or price of 
their bids after the bid opening. Requests for clarification and the 
bidders' responses shall be made in writing, in hard copy and/or by an 
electronic system satisfactory to MCC.\25\
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    \25\ See Paragraph 2.44 of Section 1.A of these Rules.
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Confidentiality
    2.47 After the public opening of bids, information relating to the 
examination, clarification, and evaluation of bids and recommendations 
concerning awards shall not be disclosed to bidders or other persons 
not officially concerned with this process until the publication of 
contract award.
Examination of Bids
    2.48 MCA-Namibia shall ascertain whether the bids (a) meet the 
eligibility requirements specified in Paragraphs 1.6, 1.7 and 1.8 of 
Section 1.A of these Rules, (b) have been properly signed, (c) are 
accompanied by the required securities or required declaration signed 
as specified in Paragraph 2.14 of Section 1.A of these Rules, (d) are 
substantially responsive to the bidding documents, and (e) are 
otherwise generally in order. If a bid is not substantially responsive, 
that is, it contains material deviations from or reservations to the 
terms, conditions, and specifications in the bidding documents, it 
shall not be considered further. The bidder shall not be permitted to 
correct or withdraw material deviations or reservations once bids have 
been opened.\26\
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    \26\ See Paragraph 2.50 of Section 1.A of these Rules regarding 
corrections.
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Evaluation and Comparison of Bids
    2.49 The purpose of bid evaluation is to determine the cost and 
benefits of each bid in a manner that permits a comparison to be made. 
Subject to Paragraph 2.58 of Section 1.A of these Rules, the bid best 
meeting the evaluation criteria and other non-price factors (including, 
but not limited to, warranties and delivery periods),\27\ but not 
necessarily the lowest submitted price, shall be selected for award.
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    \27\ See Paragraph 2.52 of Section 1.A of these Rules.
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    2.50 The bid price read aloud at the bid opening shall be adjusted 
to correct any arithmetical errors. Also, for the purpose of 
evaluation, adjustments shall be made for any quantifiable nonmaterial 
deviations or reservations.
    2.51 The evaluation and comparison of bids shall be on CIP prices 
for the supply of imported goods \28\ and EXW

[[Page 46755]]

prices, plus cost of inland transportation and insurance to the place 
of destination, for goods manufactured within the Republic of Namibia, 
together with prices for any required installation, training, 
commissioning, and other similar services.\29\
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    \28\ MCA-Namibia may ask for prices on a CIF basis (and bids 
compared on that same basis) only when the goods are carried by sea 
and the goods are not containerized. CIF shall not be used for 
anything other than sea transport. CIP can be used for any mode of 
transport, including sea and multimodal transport.
    \29\ The evaluation of bids shall not take into account: (a) 
Customs duties and other taxes levied on imported goods quoted CIP 
(which are excluded of custom duties); (b) sales and similar taxes 
levied in connection with the sale or delivery of the goods.
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    2.52 Bidding documents shall also specify the relevant factors in 
addition to price to be considered in bid evaluation and the manner in 
which they will be applied for the purpose of determining the lowest 
evaluated bid. For goods and equipment, other factors may be taken into 
consideration including, among others, delivery time, operating costs, 
efficiency and compatibility of the equipment, availability of service 
and spare parts, and related training, safety, and environmental 
benefits. The factors other than price to be used for determining the 
lowest evaluated bid shall, to the extent practicable, be expressed in 
monetary terms, or given a relative weight in the evaluation provisions 
in the bidding documents.
    2.53 Bid evaluation for works shall be strictly in monetary terms. 
Any procedure under which bids above or below a predetermined 
assessment of bid values are automatically disqualified is not 
acceptable. If time is a critical factor, the value of early completion 
to MCA-Namibia may be taken into account according to criteria 
presented in the bidding documents, only if the conditions of contract 
provide for commensurate penalties for noncompliance and MCC has 
granted prior approval.
    2.54 MCA-Namibia shall prepare a detailed report on the evaluation 
and comparison of bids setting forth the specific reasons on which the 
recommendation is based for the award of the contract.
Domestic Preferences
    2.55 Application of domestic preferences for nationality or local 
content shall not be permitted.
    2.56 Reserved.
Extension of Validity of Bids
    2.57 MCA-Namibia shall use best efforts to complete evaluation of 
bids and award of contract within the initial period of bid validity so 
that extensions are not necessary. An extension of bid validity, if 
justified by exceptional circumstances, shall be requested in writing 
from all bidders before the expiration date. The extension shall be for 
the minimum period required to complete the evaluation, obtain the 
necessary approvals, and award the contract. Whenever an extension of 
bid validity period is requested, bidders shall not be requested or be 
permitted to change the quoted (base) price or other conditions of 
their bid. Bidders shall have the right to refuse to grant such an 
extension. If the bidding documents require a bid security, bidders may 
exercise their right to refuse to grant such an extension without 
forfeiting their bid security, but those who are willing to extend the 
validity of their bid shall be required to provide a suitable extension 
of bid security.
Postqualification of Bidders
    2.58 If bidders have not been prequalified, MCA-Namibia shall 
determine whether the bidder whose bid has been determined to best meet 
the evaluation criteria, subject to Section 2.49, has the capability 
and resources to effectively carry out the contract as offered in the 
bid. The criteria to be met shall be set out in the bidding documents, 
and if the bidder does not meet them, the bid shall be rejected. In 
such an event, MCA-Namibia shall make a similar determination and also 
confirm eligibility of the next-lowest evaluated bidder.
Award of Contract
    2.59 MCA-Namibia shall award the contract, within the period of the 
validity of bids, to the bidder who meets the appropriate standards of 
capability and resources and whose bid has been determined (a) to be 
substantially responsive to the bidding documents and (b) to best meet 
the evaluation criteria, subject to Section 2.49.\30\ A bidder shall 
not be required, as a condition of award, to undertake responsibilities 
for work not stipulated in the bidding documents or otherwise to modify 
the bid as originally submitted.
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    \30\ Referred to as ``lowest evaluated bidder'' and ``lowest 
evaluated bid,'' respectively.
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Publication of the Award of Contract
    2.60 After the award of contract, MCA-Namibia shall post at UNDB 
Online, at dgMarket and at MCA-Namibia's Web site (or such other 
appropriate Web site designated by MCA-Namibia and approved by MCC) the 
results, identifying the procurement, the name of the winning bidder 
and the price, duration, and summary scope of the contract. The same 
information shall be sent to all bidders who have submitted bids. The 
posting at UNDB Online and at dgMarket shall be done monthly and at 
MCA-Namibia's Web site (or such other appropriate Web site designated 
by MCA-Namibia and approved by MCC) at least weekly. The posting shall 
be in a format of a summarized table covering the previous period. All 
such postings shall be in English.
Rejection of All Bids
    2.61 Bidding documents usually provide that MCA-Namibia may reject 
all bids. Rejection of all bids is justified when there is lack of 
effective competition, or bids are not substantially responsive or when 
bid prices are unreasonable or are substantially higher than existing 
budget. Lack of competition shall not be determined solely on the basis 
of the number of bidders. Even when only one bid is submitted, the 
bidding process may be considered valid if the bid was satisfactorily 
advertised and prices are reasonable in comparison to market values. 
MCA-Namibia may, after approval by MCC, reject all bids. If all bids 
are rejected, MCA-Namibia shall review the causes justifying the 
rejection and consider making revisions to the conditions of contract, 
design and specifications, scope of the contract, or a combination of 
these, before inviting new bids.
    2.62 If the rejection of all bids is due to lack of competition, 
wider advertising shall be considered. If the rejection is due to most 
or all of the bids being non responsive, new bids may be invited from 
the initially prequalified firms, or with approval of MCC from only 
those that submitted bids in the first instance.
    2.63 All bids shall not be rejected and new bids invited on the 
same bidding and contract documents solely for the purpose of obtaining 
lower prices. If the lowest evaluated responsive bid exceeds MCA-
Namibia pre-bid cost estimates by a substantial margin, MCA-Namibia 
shall investigate causes for the excessive cost and consider requesting 
new bids as described in the previous paragraphs. Alternatively, MCA-
Namibia may negotiate with the lowest evaluated bidder to try to obtain 
a satisfactory contract through a reduction in the scope and/or a 
reallocation of risk and responsibility which can be reflected in a 
reduction of the contract price. However, substantial reduction in the 
scope or modification to the contract

[[Page 46756]]

documents generally will require rebidding.
    2.64 The prior approval of MCC shall be obtained before rejecting 
all bids, soliciting new bids, or entering into negotiations with the 
lowest evaluated bidder. Within two weeks of the rejection of all bids, 
MCA-Namibia shall post at dgMarket and MCA-Namibia's Web site (or such 
other appropriate Web site designated by MCA-Namibia and approved by 
MCC) notification of the cancellation of the procurement. The 
notification shall identify the procurement and state briefly the 
reason for cancelling the procurement. The same information shall be 
sent to all bidders who have submitted bids. All such postings shall be 
in English.
Debriefing
    2.65 The bidding documents shall specify that any bidder who wishes 
to ascertain the grounds on which its bid was not selected, may request 
an explanation from MCA-Namibia. MCA-Namibia shall promptly provide an 
explanation of why such bid was not selected, either in writing and/or 
in a debriefing meeting, at the option of MCA-Namibia. The requesting 
bidder shall bear all the costs of attending such a debriefing.
D. Modified CB
    2.66 Reserved.
    2.67 Reserved.
Procurement of Commodities
    2.68 Market prices of commodities, such as grain, animal feed, 
cooking oil, fuel, fertilizer, and metals, fluctuate depending upon the 
demand and supply at any particular time. Many are quoted in 
established commodity markets. Procurement often involves multiple 
awards for partial quantities to assure security of supply and multiple 
purchases over a period of time to take advantage of favorable market 
conditions and to keep inventories low. A list of prequalified bidders 
may be drawn up to whom periodic invitations are issued. Bidders may be 
invited to quote prices linked to the market price at the time of or 
prior to the shipments. Bid validities shall be as short as possible. 
Bid prices must be denominated and paid in either United States dollars 
or the local currency of the Republic of Namibia. The currency shall be 
specified in the bidding document. Bidding documents may permit telexed 
or faxed bids or bids submitted by electronic means, and in such cases 
either no bid security is required, or standing bid securities valid 
over a specified period of time have been submitted by prequalified 
bidders. Standard contract conditions and forms consistent with market 
practices shall be used.

III. Other Methods of Procurement

General
    3.1 This Section describes the methods of procurement that can be 
used where CB would not be the most economic and efficient method of 
procurement, and where other methods are deemed more appropriate.\31\ 
Paragraphs 3.2 to 3.7 of Section 1.A of these Rules describe the 
generally used methods in descending order of preference and the 
remaining paragraphs describe the methods used in specific 
circumstances.
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    \31\ Contracts shall not be divided into smaller units in order 
to make them less attractive for CB procedures; any proposal to 
divide a contract into smaller packages shall require the prior 
approval of MCC.
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Limited Bidding (``LB'')
    3.2 Limited Bidding is essentially CB by direct invitation without 
open advertisement. It may be an appropriate method of procurement 
where (a) there are only a limited number of suppliers, or (b) other 
exceptional reasons may justify departure from full CB procedures. 
Under LB, MCA-Namibia shall seek bids from a list of potential 
suppliers or contractors broad enough to assure competitive prices, 
such list to include all suppliers or contractors when there are only a 
limited number. In all respects other than advertisement, CB procedures 
shall apply, including the publication of the contract award as 
indicated in Paragraph 2.60 of Section 1.A of these Rules.
    3.3 Reserved.
    3.4 Reserved.
Shopping
    3.5 Shopping is a procurement method based on comparing price 
quotations obtained from several suppliers (in the case of goods) or 
from several contractors (in the case of civil works), with a minimum 
of three, to assure competitive prices, and is an appropriate method 
for procuring readily available off the shelf goods or standard 
specification commodities of small value, or simple civil works of 
small value. (Small value is defined as procurements valued at less 
than US$200,000 in the aggregate from one contractor). Requests for 
quotations shall indicate the description and quantity of the goods or 
specifications of works or non-consultant services, as well as desired 
delivery (or completion) time and place. Quotations may be submitted by 
letter, facsimile or by electronic means. The evaluation of quotations 
shall follow the same principles as of Competitive Bidding. The terms 
of the accepted offer shall be incorporated in a purchase order or 
brief contract.
Direct Contracting
    3.6 Direct contracting is contracting without competition (single-
source) and may be an appropriate method under the following 
circumstances:
    (a) An existing contract for goods, works or non-consultant 
services, awarded in accordance with procedures acceptable to MCC, may 
be extended, within reasonable limits, for additional goods, works or 
non-consultant services of a similar nature. MCC shall be satisfied in 
such cases that no advantage could be obtained by further competition 
and that the prices on the extended contract are reasonable. Provisions 
for such an extension, if considered likely in advance, shall be 
included in the original contract.
    (b) Standardization of equipment or spare parts, to be compatible 
with existing equipment, may justify additional purchases from the 
original supplier. For such purchases to be justified, the original 
equipment shall be suitable, the number of new items shall generally be 
less than the existing number, the price shall be reasonable, and the 
advantages of another make or source of equipment shall have been 
considered and rejected on grounds acceptable to MCC.
    (c) The required equipment is proprietary and obtainable only from 
one source.
    (d) The contractor responsible for a process design requires the 
purchase of critical items from a particular supplier as a condition of 
a performance guarantee.
    (e) In exceptional cases, such as in response to natural disasters.
    (f) The value of the contract is under US$2,000.
    3.7 For all procurements valued above US$2,000, MCA-Namibia, after 
the contract signature, shall post at MCA-Namibia's Web site or such 
appropriate Web site designated by MCA-Namibia and approved by MCC, at 
dgMarket and at UNDB Online the name of the contractor, price, 
duration, and summary scope of the direct contract. This publication 
may be done quarterly and in the format of a summarized table covering 
the previous period.
Force Account
    3.8 Force Account, that is, construction by the use of the 
government's own personnel and

[[Page 46757]]

equipment,\32\ may be the only practical method for constructing some 
kinds of works. The use of Force Account may be justified where:
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    \32\ A government-owned construction unit that is not 
managerially and financially autonomous shall be considered a force 
account unit. ``Force account'' is otherwise known as ``direct 
labor,'' ``departmental forces,'' or ``direct work.''
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    (a) Quantities of work involved cannot be defined in advance;
    (b) Works are small and scattered or in remote locations for which 
qualified construction firms are unlikely to bid at reasonable prices;
    (c) Work is required to be carried out without disrupting ongoing 
operations;
    (d) Risks of unavoidable work interruption are better borne by MCA 
Entity than by a contractor; and
    (e) There are emergencies needing prompt attention.
    3.9 Reserved.
Procurement Agents and Fiscal Agents
    3.10 MCA-Namibia may wish (or be required by MCC) to employ, as 
their agents, firms specializing in handling procurement and/or 
financial management services. Such agents shall be selected following 
these Rules (or such other procedures as MCC may approve) and the 
procedures set out in the RFP requesting such agent services. The 
procurement agent shall follow all the procurement procedures provided 
for in the Compact, any agreement supplemental to the Compact (each a 
``Supplemental Agreement''), and these Rules, conduct procurement in 
conformance with a Procurement Plan approved by MCC, use appropriately 
the Standard Solicitation Documents as approved by MCC, follow review 
procedures, and properly document the procurement activity. Management 
contractors may be employed in a similar manner for a fee to contract 
for miscellaneous works involving reconstruction, repairs, 
rehabilitation, and new construction in emergency situations, or where 
large numbers of small contracts are involved.
Inspection Agents
    3.11 Preshipment inspection and certification of imports is one of 
the safeguards MCA-Namibia may choose to adopt, particularly for any 
large import program. The inspection and certification usually covers 
quality, quantity, and reasonableness of price. Imports procured 
through CB procedures shall not be subject to price verification, but 
only verification for quality and quantity. However, imports not 
procured through CB may additionally be subjected to price 
verification. The inspection agents ordinarily are paid for on a fee 
basis levied on the value of the goods.
    3.12 Reserved.
Procurement Under BOO/BOT/BOOT, Concessions and Similar Private Sector 
Arrangements
    3.13 Where MCC is participating in funding the cost of a Project 
procured under a BOO/BOT/ BOOT,\33\ concessions or similar types of 
private sector arrangements, either of the following procurement 
procedures shall be used, as provided for in the Compact including the 
Supplemental Agreements and further elaborated in the Procurement Plan 
approved by MCC:
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    \33\ BOO: Build, Own, Operate; BOT: Build, Operate, Transfer; 
BOOT: Build, Own, Operate, Transfer.
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    (a) The concessionaire or entrepreneur under the BOO/BOT/BOOT or 
similar type of contract \34\ shall be selected under CB procedures 
acceptable to MCC, which may include several stages in order to arrive 
at the optimal combination of evaluation criteria, such as the cost and 
magnitude of the financing offered, the performance specifications of 
the facilities offered, the cost charged to the user or purchaser, 
other income generated for MCA-Namibia or purchaser by the facility, 
and the period of the facility's depreciation; or
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    \34\ For projects such as toll roads, tunnels, harbors, bridges, 
power stations, waste disposal plants, and water distribution 
systems.
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    (b) If the said concessionaire or entrepreneur has not been 
selected in the manner set forth in Subparagraph (a) above, the goods, 
works, consultant or non-consultant services required for the facility 
and to be funded by MCC shall be procured in accordance with CB 
procedures defined in Sub-Section 1.A. II.
Performance Based Procurement (``Performance Based Procurement'' or 
``Output Based Procurement'')
    3.14 Performance Based Procurement,\35\ also called Output Based 
Procurement, refers to competitive procurement processes resulting in a 
contractual relationship where payments are made for measured outputs 
instead of the traditional way where inputs are measured. The technical 
specifications define the desired result and which outputs will be 
measured including how they will be measured. Those outputs aim at 
satisfying a functional need both in terms of quality, quantity and 
reliability. Payment is made in accordance with the quantity of outputs 
delivered, subject to their delivery at the level of quality required. 
Reductions from payments (or retentions) may be made for lower-quality 
levels of outputs and, in certain cases, premiums may be paid for 
higher quality levels of outputs. The bidding documents do not normally 
prescribe the inputs, nor a work method for the contractor. The 
contractor is free to propose the most appropriate solution, based on 
mature and well proven experience and shall demonstrate that the level 
of quality specified in the bidding documents will be achieved.
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    \35\ The use of Performance Based Procurement in MCC funded 
projects should be the result of the satisfactory technical analysis 
of the different options available and should be subject to prior 
approval by MCC for incorporation into the Procurement Plan.
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    3.15 Performance Based Procurement can involve: (a) The provision 
of services to be paid on the basis of outputs; (b) design, supply, 
construction (or rehabilitation) and commissioning of a facility to be 
operated by MCA-Namibia; or (c) design, supply, construction (or 
rehabilitation) of a facility and provision of services for its 
operation and maintenance for a defined period of years after its 
commissioning.\36\ For the cases where design, supply and/or 
construction are required, prequalification is normally required and 
the use of Two-Stage Bidding as indicated in Paragraph 2.6 of Section 
1.A of these Rules will usually apply.
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    \36\ Examples of such type of procurement are: (i) For the case 
of procurement of services: Provision of medical services, i.e. 
payments for specific services, like office visits, or defined 
laboratory tests, etc.; (ii) for the case of procurement of a 
facility: Design, Procurement, Construction, and Commissioning of a 
thermal power plant to be operated by a grantee; (iii) for the case 
of procurement of a facility and services: Design, Procurement, 
Construction (or Rehabilitation) of a road and operation and 
maintenance of the road for 5 years after construction.
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    3.16 Reserved.
    3.17 Reserved.

Appendix 1: Review by MCC of Procurement Decisions

Procurement Plans
    1. MCC shall review procurement arrangements proposed by MCA-
Namibia in the Procurement Plan for its conformity with the Compact and 
these Rules. MCA-Namibia shall update the Procurement Plan at least on 
a semi-annual basis. Any amendments proposed to the Procurement Plan 
shall be submitted to MCC for prior approval.
Prior Review
    2. The thresholds for review of procurement decisions prior to 
award of a contract and any modification to such contracts are set out 
in Attachment 1 of these Rules.

[[Page 46758]]

Post Review
    3. MCA-Namibia shall retain all documentation with respect to each 
contract during implementation of the Compact and up to five years 
after the expiration or termination of the Compact. This documentation 
is subject to examination by MCC, its oversight agencies and by its 
consultants and should include, but is not to be limited to, the signed 
original of the contract, the analysis of the respective proposals, 
recommendations for award, the record of MCC approvals, and the record 
of any bid challenge. MCA-Namibia shall also furnish such documentation 
to MCC upon request. If MCC determines that the goods, works or non-
consultant services were not procured in accordance with the agreed 
procedures, as reflected in the Compact including the Supplemental 
Agreements and further detailed in the Procurement Plan approved by 
MCC, or that the contract itself is not consistent with such 
procedures, it may declare misprocurement as established in Paragraph 
1.12 of Section 1.A of these Rules. MCC shall promptly inform MCA-
Namibia of the reasons for such determination.

Appendix 2

    Reserved.
    Appendix 3: Guidance to Bidders
    Bidders may learn about the Millennium Challenge Corporation and 
its programs at www.mcc.gov and about the MCC program in the Republic 
of Namibia at the Web site established by MCA-Namibia or such other 
appropriate Web site designed by MCA-Namibia and approved by MCC.

Section 1.B. Program Procurement Rules: Procurement of Consultants and 
Consultant Services

I. Introduction

Purpose
    1.1 The principles, rules and procedures set out in this Section 
1.B of these Rules shall govern the conduct and administration of the 
procurement of the consultants and consultant services that need to be 
acquired to implement the Projects under the Compact.
    1.2 Reserved
    1.3 For the purpose of these Rules, the term consultants includes a 
wide variety of entities, including consulting firms, engineering 
firms, construction managers, management firms, procurement agents, 
inspection agents, auditors, multinational organizations, investment 
and merchant banks, universities, research institutions, 
nongovernmental organizations, and individuals.\37\
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    \37\ See Paragraphs 3.15-3.20 of Section 1.B of these Rules for 
particular types of consultants. Individual consultants are covered 
in Sub-Section 1.B.V.
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General Considerations
    1.4.1 MCA-Namibia is responsible for implementing the Projects, and 
therefore for selecting the consultants, and awarding and subsequently 
administering the contracts. While in practice the specific procurement 
rules and procedures to be followed in the implementation of a Project 
depend on the circumstances of the particular case, the following 
Procurement Principles shall generally guide the application of these 
Rules:
    (a) Open, fair and competitive procedures used in a transparent 
manner to solicit, award and administer contracts to procure consultant 
services;
    (b) Solicitations for consultant services shall be based upon a 
clear and accurate description of the consultant services to be 
acquired;
    (c) Contracts shall be awarded only to qualified and capable 
consultants that have the capability and willingness to perform the 
contracts in accordance with the terms and conditions of the applicable 
contracts and on a cost-effective and timely basis; and
    (d) No more than a commercially reasonable price (as determined, 
for example, by a comparison of price quotations and market prices) 
shall be paid to procure the consultant services.\38\
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    \38\ These four principles are set out in Section 3.6 of the 
Compact.
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    1.4.2 MCA-Namibia shall ensure that all the procurements for 
consultant services in furtherance of the Compact and funded in whole 
or in part, directly or indirectly, by MCC funding shall comply with 
these Procurement Principles.
    1.5 MCC considers that, in the majority of cases, these 
considerations can best be addressed through competition among 
qualified firms in which the selection is based on the quality of the 
proposal and the cost of the services to be provided. Sub-Sections 
1.B.II and III of these Rules describe the different methods of 
selection of consultants and the circumstances in which they are 
appropriate. Since Quality and Cost Based Selection (``QCBS'') is the 
most commonly recommended method, Sub-Section 1.B.II of these Rules 
describes in detail the procedures for QCBS. However, QCBS is not the 
most appropriate method of selection for all cases; therefore, Sub-
Section 1.B.III describes other methods of selection and the 
circumstances in which they are more appropriate.
    1.6 The particular methods to be followed for the selection of 
consultants under the Compact shall be set out in the Procurement 
Plans.
Applicability of Rules
    1.7 The consultant services to which Section 1.B of these Rules 
apply are of an intellectual and advisory nature. This Section of these 
Rules does not apply to other types of services in which the physical 
aspects of the activity predominate (for example, operation and 
maintenance of facilities or plants, surveys, exploratory drilling, 
aerial photography, satellite imagery, and services contracted on the 
basis of performance of measurable physical output).\39\
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    \39\ As to these latter services, Section 1.A of these Rules 
shall apply.
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    1.8 Reserved
Conflict of Interest
    1.9 Consultants shall provide professional, objective, and 
impartial advice and at all times hold the interests of MCA-Namibia 
paramount, without any consideration for future work, and, in providing 
advice, consultants shall avoid conflicts with other assignments and 
their own corporate interests. Consultants shall not be hired for any 
assignment that would be in conflict with their prior or current 
obligations to other clients, or that may place them in a position of 
being unable to carry out the assignment in the best interest of MCA-
Namibia. Without limitation on the generality of the forgoing, 
consultants shall not be hired under the circumstances set forth below:
    (a) Conflict between consultant activities and procurement of 
goods, works or non-consultant services: A firm that has been engaged 
by MCA-Namibia to provide goods, works, or non-consultant services for 
a Project, and each of its affiliates, shall be disqualified from 
providing consultant services related to those goods, works or non-
consultant services. Conversely, a firm hired to provide consultant 
services for the preparation or implementation of a Project, and each 
of its affiliates, shall be disqualified from subsequently providing 
goods, works or non-consultant services resulting from or directly 
related to the firm's consultant services for such preparation or 
implementation.
    (b) Conflict among consultant assignments: Neither consultants 
(including their personnel and sub-consultants) nor any of their 
affiliates

[[Page 46759]]

shall be hired for any assignment that, by its nature, may be in 
conflict with another assignment of the consultants.
    (c) Relationships with MCA-Namibia staff: Consultants (including 
their personnel and sub-consultants) that have a business or family 
relationship with a member of MCA-Namibia staff (or of the Project 
implementing agency's staff, or of a beneficiary of the Compact) who 
are directly or indirectly involved in any part of: (i) The preparation 
of the TOR of the contract, (ii) the selection process for such 
contract, or (iii) the supervision of such contract may not be awarded 
a contract, unless the conflict stemming from this relationship has 
been resolved in a manner acceptable to MCC throughout the selection 
process and the execution of the contract.
Unfair Competitive Advantage
    1.10 Fairness and transparency in the selection process require 
that consultants or their affiliates competing for a specific 
assignment do not derive a competitive advantage from having provided 
consultant services related to the assignment in question. To that end, 
MCA-Namibia shall make available to all the short-listed consultants, 
together with the Request for Proposals (RFP), all information that 
would in that respect give a consultant a competitive advantage.
Eligibility
    1.11 To foster competition MCC permits firms and individuals from 
almost all countries \40\ to offer consultant services for MCC-funded 
Projects. Any conditions for participation shall be limited to those 
that are essential to ensure the firm's or individual's capability to 
fulfill the contract in question. However,
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    \40\ Firms and individuals from any country subject to sanction 
or restriction by law or policy of the United States are not 
eligible to compete for MCC-funded contracts. See Sub-paragraph 
1.11(f) below.
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    (a) Consultants may be excluded if: (i) As a matter of law or 
official regulation, the Republic of Namibia prohibits commercial 
relations with the consultant's country, provided that MCC is satisfied 
that such exclusion does not preclude effective competition for the 
consultant services required, or (ii) by an act of compliance with a 
decision of the United Nations Security Council taken under Chapter VII 
of the Charter of the United Nations, the Republic of Namibia prohibits 
any payments to a particular firm or person or for particular goods by 
such an act of compliance, that the firm or individual may be excluded.
    (b) Government-owned enterprises in the Republic of Namibia may 
participate if they are receiving no state subsidy and can demonstrate 
that they do not receive a cross-subsidy of income as a result of 
statutory powers.
    (c) As an exception to (b), government-owned universities or 
research centers may participate.
    (d) Government officials and civil servants may not be hired under 
consultant contracts, either as individuals or as members of a team of 
a consultant firm.
    (e) A firm declared ineligible by the World Bank for any reason, 
including in accordance with The World Bank Group Anti-Corruption 
policies \41\ shall be ineligible to be awarded a MCC-funded contract 
during the period of time the firm is sanctioned by The World Bank.
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    \41\ For purposes of this Sub-paragraph, the relevant World Bank 
Group Anti-Corruption policies are set forth in the Guidelines On 
Preventing and Combating Fraud and Corruption in Projects financed 
by IBRD Loans and IDA Credits and Grants, and in the Anti-corruption 
Guidelines for IFC, MIGA, and World Bank Guarantee Transactions.
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    (f) Any person or entity that has been blacklisted from 
participation in procurements funded with The World Bank assistance or 
debarred or suspended from participation in procurements funded by the 
United States Federal Government or otherwise prohibited by applicable 
United States law or Executive Order or United States policies, 
including under any then-existing anti-terrorist policies, shall be 
excluded from procurements awarded under the Compact. Without limiting 
the foregoing, this would remove from eligibility any procurement from 
a country or from a firm that is organized in or has its principle 
place of business or a significant portion of its operations in any 
country that is subject to sanction or restriction by law or policy of 
the United States.\42\
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    \42\ As of July 2008, this list includes Cuba, Iran, North 
Korea, Sudan and Syria.
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Advance Contracting and Retroactive Financing
    1.12 The process of identifying and selecting consultants to 
implement projects funded under the Compact before the Compact enters 
into force is referred to as advance contracting. Similarly, payments 
made under a contract that is signed prior to the Compact entering into 
force for which MCA-Namibia would seek reimbursement from MCC is known 
as retroactive financing. MCA-Namibia will not engage in any advance 
contracting or be entitled to any retroactive financing, without the 
prior approval of MCC.
Associations Between Consultants
    1.13 Consultants may associate with each other in the form of a 
joint venture or of a sub-consultancy agreement to complement their 
respective areas of expertise, strengthen the technical responsiveness 
of their proposals and make available bigger pools of experts, provide 
better approaches and methodologies, and, in some cases, to offer lower 
prices. Such an association may be for the long term (independent of 
any particular assignment) or for a specific assignment. If MCA-Namibia 
employs an association in the form of a joint venture, the association 
should appoint one of the firms to represent the association; all 
members of the joint venture shall sign the contract and shall be 
jointly and severally liable for the entire assignment. Once the 
solicitation documents, including Requests for Proposals, are issued, 
any association in the form of joint venture or sub-consultancy among 
short-listed firms, if applicable, shall be permissible only with the 
approval of MCA-Namibia, unless specifically permitted in the terms of 
the Request for Proposals. MCA-Namibia shall not require consultants to 
form associations with any specific firm or group of firms.
MCC Review, Assistance, and Monitoring
    1.14 MCC reviews the hiring of consultants by MCA-Namibia to 
satisfy itself that the selection process is carried out in accordance 
with the provisions of these Rules. The thresholds for MCC review are 
described in Attachment 1 of these Rules.
    1.15 MCC does not furnish a short list or a long list \43\ of firms 
or individuals to MCA-Namibia. However, if MCA-Namibia undertakes a 
shortlisting procedure before inviting proposals, the record of the 
shortlisting procedure together with the final short list shall be 
submitted to MCC for approval before MCA-Namibia issues the RFP if the 
estimated value of the anticipated contract exceeds the thresholds in 
Attachment 1 of these Rules.
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    \43\ Short list: see Paragraphs 2.6, 2.7 and 2.8 of 1.B of these 
Rules; Long list: a preliminary list of potential firms from which 
the short list would be established.
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    1.16 MCA-Namibia shall supervise the performance of the consultants 
and ensure that they carry out the assignments in accordance with the 
contract. Without assuming the responsibilities of MCA-Namibia or the 
consultants, MCC shall monitor the work as necessary to satisfy itself 
that it

[[Page 46760]]

is being carried out according to appropriate standards and is based on 
acceptable data. As appropriate, MCC may take part in discussions 
between MCA-Namibia and the consultants and, if necessary, may help 
MCA-Namibia in addressing issues related to the assignment. If a 
significant portion of Project preparation work is being carried out in 
the consultants' home offices, MCC staff may, with approval of MCA-
Namibia, visit these offices to review the consultants' work.
Misprocurement
    1.17 MCC does not fund expenditures for consultant services if the 
consultants or consultant services selected have not been contracted in 
accordance with the agreed provisions as detailed in the Compact and 
Supplemental Agreements, these Rules and the approved Procurement 
Plans.\44\ In such cases, MCC will declare misprocurement and cancel 
that portion of the Compact allocated to the services that have been 
misprocured if corrective measures satisfactory to MCC are not taken. 
MCC may, in addition, exercise other remedies provided for under the 
Compact. Even once the contract is awarded after obtaining an approval 
from MCC, MCC may still declare misprocurement if it concludes that the 
approval was issued on the basis of incomplete, inaccurate, or 
misleading information furnished by MCA-Namibia or the terms and 
conditions of the contract had been modified without MCC approval.
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    \44\ See Paragraph 1.24.1, 1.24.2, and 1.24.3 of Section 1.B of 
these Rules.
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References to MCC
    1.18 MCA-Namibia shall use the following language when referring to 
MCC in procurement documents:

    The United States of America, acting through the Millennium 
Challenge Corporation (``MCC'') and the Republic of Namibia (the 
``Government'') have entered into a Millennium Challenge Compact for 
Millennium Challenge Account assistance to help facilitate poverty 
reduction through economic growth in the Republic of Namibia (the 
``Compact'') in the amount of [Insert amount of Compact] US$ (``MCC 
Funding''). MCA-Namibia on behalf of the Government intends to apply 
a portion of the proceeds of MCC Funding to eligible payments under 
this contract. Payments by MCA-Namibia will be subject, in all 
respects, to the terms and conditions, including restrictions on the 
use of MCC Funding, of the Compact. No party other than the 
Government and MCA-Namibia shall derive any rights from the Compact 
or have any claim to the proceeds of MCC Funding.
Training or Transfer of Knowledge
    1.19 If the assignment includes an important component for training 
or transfer of knowledge to MCA-Namibia staff or national consultants, 
the TOR shall indicate the objectives, nature, scope, and goals of the 
training program, including details on trainers and trainees, skills to 
be transferred, time frame, and monitoring and evaluation arrangements. 
The cost for the training program shall be included in the consultant's 
contract and in the budget for the assignment.
Language
    1.20 All advertisements for contracts and notices of contract 
awards, whether posted at MCA-Namibia's Web site, at dgMarket, or UNDB 
Online, shall be posted in English.
    1.21 For all contracts, the solicitation documents as well as the 
documents responding to these solicitations, including the proposals, 
shall be prepared in English. All contracts shall be written in English 
and this language shall govern contractual relations between MCA-
Namibia and the consultant.
Fraud and Corruption
    1.22 MCC requires that MCA-Namibia (and other beneficiaries of MCC 
funding), as well as consultants and their subcontractors under any 
MCC-funded contracts, observe the highest standards of ethics during 
the procurement and execution of such contracts. In pursuance of this 
policy, the following provisions shall apply.
    (a) For the purposes of these provisions, the terms set forth below 
are defined as follows:
    (i) ``Corrupt practice'' means the offering, giving, receiving, or 
soliciting, directly or indirectly, of anything of value to influence 
the actions of a public official (including MCA-Namibia and MCC staff 
and employees of other organizations taking or reviewing selection 
decisions) in the selection process or in contract execution or the 
making of any payment to any third party, in connection with or in 
furtherance of a contract, in violation of (aa) the United States 
Foreign Corrupt Practices Act of 1977, as amended (15 U.S.C. 78a et 
seq.) (``FCPA''), or any other actions taken that otherwise would be in 
violation of the FCPA if the FCPA were applicable, or (bb) any 
applicable law in the Republic of Namibia;
    (ii) ``Fraudulent practice'' means any act or omission, including 
any misrepresentation, in order to influence (or attempt to influence) 
a selection process or the execution of a contract to obtain a 
financial or other benefit, or to avoid (or attempt to avoid) an 
obligation;
    (iii) ``Collusive practice'' means a scheme or arrangement between 
two or more parties, with or without the knowledge of MCA-Namibia, 
designed to establish prices at artificial, noncompetitive levels or to 
otherwise deprive MCA-Namibia of the benefits of free and open 
competition;
    (iv) ``Coercive practice'' means impairing or harming or 
threatening to impair or harm, directly or indirectly, persons or their 
property, to influence their participation in a procurement process, or 
affect the execution of a contract;
    (v) ``Obstructive practice'' means:
    (aa) Destroying, falsifying, altering or concealing of evidence 
material to the investigation or making false statements to 
investigators in order to impede an investigation into allegations of a 
corrupt, fraudulent, coercive, collusive, or prohibited practice; and 
threatening, harassing, or intimidating any party to prevent it from 
disclosing its knowledge of matters relevant to the investigation or 
from pursuing the investigation; and
    (bb) Acts intended to impede the exercise of the inspection and 
audit rights of MCC provided under the Compact; and
    (vi) ``Prohibited practice'' means any action that violates Section 
E (Compliance with Anti-Corruption Legislation), Section F (Compliance 
with Anti-Money Laundering Legislation) and Section G (Compliance with 
Terrorist Financing Statutes and Other Restrictions) of the ``General 
Provisions Annex'' that will be made a part of MCC-funded contracts and 
may be found on the MCC Web site at http://www.mcc.gov/guidance/compact/general_provisions.pdf.
    (b) MCA-Namibia will reject a proposal (and MCC will deny approval 
of a proposal for contract award) if it determines that the consultant 
recommended for award has, directly or through an agent, engaged in 
corrupt, fraudulent, collusive, coercive, obstructive or prohibited 
practices in competing for the contract in question.
    (c) MCC has the right to cancel the portion of MCC funding 
allocated to a contract if it determines at any time that 
representatives of a beneficiary of the MCC funding engaged in corrupt, 
fraudulent, collusive, coercive, obstructive or prohibited practices 
during the selection process or the execution of a MCC-funded contract, 
without MCA-Namibia having taken timely and appropriate action

[[Page 46761]]

satisfactory to MCC to remedy the situation.
    (d) MCC and MCA-Namibia have the right to sanction a consultant, 
including declaring such party ineligible, either indefinitely or for a 
stated period of time, to be awarded an MCC-funded contract if at any 
time either MCA-Namibia or MCC determines that the bidder, supplier, 
contractor, or subcontractor has, directly or through an agent, engaged 
in corrupt, fraudulent, collusive, coercive, obstructive or prohibited 
practices in competing for, or in executing, such a contract.
    (e) MCC and MCA-Namibia have the right to require that a provision 
be included in solicitation documents and in MCC-funded contracts 
requiring a consultant to permit MCA-Namibia, MCC, or any designee of 
MCC, to inspect its accounts, records and other documents relating to 
the submission of a proposal or performance of a MCC-funded contract 
and to have them audited by auditors appointed by MCC or MCA-Namibia 
with the approval of MCC.
    1.23 To the extent required by Namibian law, MCA-Namibia shall 
introduce, into bid forms for large contracts funded by MCC, an 
undertaking of the bidder to observe, in competing for and executing a 
contract, the country's laws against fraud and corruption (including 
bribery), as listed in the solicitation documents. In the event such an 
undertaking is not required by Namibian law, MCA-Namibia may introduce 
the undertaking with the approval of MCC.
Procurement Plan
    1.24.1 MCA-Namibia shall prepare periodic procurement plans that 
are updated at least semi-annually, for acquiring consultant services 
needed to implement the Compact (``Procurement Plan''). Each 
Procurement Plan shall be adopted by the governing body of MCA-Namibia 
and shall be submitted to MCC for its approval. Each Procurement 
Plan,\45\ typically covering a six (6) month period, (a) lists the 
particular contracts for the consultant services required to implement 
the Compact for the period covered in such Procurement Plan; (b) 
identifies the proposed method of procurement and selection procedure 
for such contracts as determined according to the rules set out in 
these Rules; and (c) sets forth the estimated value for each consultant 
contract.
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    \45\ When goods, works and non-consultant services also need to 
be procured, the Procurement Plan must also include such 
procurements in accordance with the requirements at Section 1.A, 
Paragraphs 1.16.1, 1.16.2, and 1.16.3 of these Rules.
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    1.24.2 MCA-Namibia shall ensure that all consultant services shall 
be procured using the procurement method and selection procedure 
approved in each Procurement Plan. Compliance, satisfactory to MCC, 
with the approved Procurement Plan shall be a condition precedent to 
MCC Disbursements.
    1.24.3 MCA-Namibia shall not initiate any procurement action that 
is a substantial deviation from the applicable adopted and approved 
Procurement Plan without the prior approval of MCC. If MCA-Namibia 
determines that such a deviation is necessary or appropriate, MCA-
Namibia shall submit a request to MCC for its approval of an amended 
Procurement Plan. If approved by MCC, MCA-Namibia shall comply with any 
instructions contained in the MCC approval, including any publication 
requirements. Any substantial deviation from a Procurement Plan as 
approved and adopted shall be submitted to the governing body of MCA-
Namibia for adoption of the amended Procurement Plan.

II. Quality and Cost Based Selection

The Selection Process
    2.1 QCBS uses a competitive process that takes into account the 
quality of the proposal and the cost of the services in the selection 
of the successful firm. Cost as a factor of selection shall be used 
judiciously. The relative weight to be given to the quality and cost 
shall be determined for each case depending on the nature of the 
assignment.
    2.2 The selection process includes the following steps unless MCC 
approves a modification in the procedure that is justified under the 
circumstances of a particular procurement:
    (a) Preparation of the Terms of Reference;
    (b) Preparation of a cost estimate and the budget;
    (c) Advertising;
    (d) Preparation of the short list of consultants; (This step is not 
mandatory. MCA-Namibia may at its discretion issue the Request for 
Proposals to all consultants expressing interest in the procurement.)
    (e) Preparation and issuance of the Request for Proposals which 
should include: the Letter of Invitation; Instructions to Consultants; 
the Terms of Reference and the proposed draft contract;
    (f) Receipt of proposals;
    (g) Evaluation of technical proposals: consideration of quality;
    (h) Public opening of financial proposals;
    (i) Evaluation of financial proposals;
    (j) Final evaluation of quality and cost; and
    (k) Negotiations and award of the contract to the selected firm.
Terms of Reference (``TOR'')
    2.3 MCA-Namibia shall be responsible for preparing the TOR for the 
assignment. The TOR shall be prepared by a person(s) or a firm 
specialized in the area of the assignment. The scope of the services 
described in the TOR shall be compatible with the available budget. The 
TOR shall define clearly the objectives, goals, and scope of the 
assignment and provide background information (including a list of 
existing relevant studies and basic data) to facilitate the 
consultants' preparation of their proposals. If transfer of knowledge 
or training is an objective, it should be specifically outlined along 
with details of number of staff to be trained, and so forth, to enable 
consultants to estimate the required resources. The TOR shall list the 
services and surveys necessary to carry out the assignment and the 
expected outputs (for example, reports, data, maps, surveys). It shall 
also list criteria that will be used to evaluate the bids. However, the 
TOR should not be too detailed or inflexible, so as to prevent 
competing consultants from proposing their own methodology and 
staffing. Firms shall be encouraged to comment on the TOR in their 
proposals. The respective responsibilities of MCA-Namibia, the 
implementing entity (if relevant) and the consultant should be defined 
clearly in the TOR.
Cost Estimate (Budget)
    2.4 Preparation of a well thought-through cost estimate is 
essential if MCC funding is to be managed properly. The cost estimate 
shall be based on MCA-Namibia's assessment of the resources needed to 
carry out the assignment: staff time, logistical support, and physical 
inputs (e.g. vehicles and laboratory equipment).
Advertising
    2.5.1 On at least a semi-annual basis, MCA-Namibia shall publicize 
in the General Procurement Notice (GPN) the procurements planned for 
consultant services for the upcoming period as identified in the 
adopted Procurement Plan which was approved by MCC. The General 
Procurement Notice shall be in the form acceptable to MCC and shall 
include information derived from the Procurement Plan and the name, 
telephone (or fax) number, and address of the MCA-Namibia agent 
responsible for procurement and the address of the

[[Page 46762]]

Web site(s) where Specific Procurement Notices will be posted. If 
known, the scheduled date for availability of solicitation documents 
for each procurement should be indicated. Such solicitation documents 
shall not be released to the public earlier than the date of 
publication of the General and Specific Procurement Notices. The 
General Procurement Notice shall be advertised in a manner to provide 
reasonable notice of planned procurements to potential consultants. 
Advertisement of the General Procurement Notice shall include posting 
in English at MCA-Namibia's Web site (or such other appropriate Web 
site designated by MCA-Namibia and approved by MCC), dgMarket and UNDB 
Online.\46\ MCA-Namibia shall also publish the General Procurement 
Notice in a newspaper of wide circulation in the Republic of Namibia 
and in such other media outlets as appropriate or as requested from 
time to time by MCC.
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    \46\ UNDB is a publication of the United Nations. Subscription 
information is available from: Development Business, United Nations, 
GCPO Box 5850, New York, NY 10163-5850, USA (Web site: http://www.devbusiness.com; e-mail: <a href="/cdn-cgi/l/email-protection#7e1a1c0d0b1c0d1d0c171c1b3e0b1050110c19"><span class="__cf_email__" data-cfemail="b7d3d5c4c2d5c4d4c5ded5d2f7c2d999d8c5d0">[email protected]</span></a>); Development 
Gateway Market is an electronic portal of Development Gateway 
Foundation, 1889 F Street, NW., Washington, DC 20006, USA (Web site: 
http://www.dgmarket.com).
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    2.5.2 Request for Expressions of Interest (EOI), Request for 
Proposals (RFP) or Request for Consultant Qualifications (RCQ) shall be 
advertised as Specific Procurement Notices (SPN). For contracts valued 
less than or equal to US$500,000, such requests shall be published in 
at least one newspaper of national circulation in the Republic of 
Namibia and posted at MCA-Namibia's Web site (or such other appropriate 
Web site designated by MCA-Namibia and approved by MCC). For contracts 
valued over US$500,000, MCA-Namibia must also post the Specific 
Procurement Notice at UNDB Online and at the dgMarket Web site. 
Publication in local print and broadcast and other national and 
international media is encouraged as long as the posting does not pre-
date the required postings. The text of the notice, whether an EOI, an 
RFP or an RCQ may be subject to review by MCC. Notification shall be 
given in sufficient time to enable prospective consultants to obtain 
information, or the relevant solicitation documents, and prepare and 
submit their responses, taking into consideration the estimated value 
of the contract and period of advance notice given with the General 
Procurement Notice.\47\
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    \47\ Also see Paragraph 2.13 of Section 1.B of these Rules.
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Short List of Consultants
    2.6 At its discretion, MCA-Namibia may advertise for expressions of 
interest and invite only short-listed firms or individuals to submit 
proposals or qualifications as appropriate for the selection procedure 
chosen for the particular procurement, or MCA-Namibia may begin the 
procurement with an open request for proposals or consultation 
qualifications. When MCA-Namibia chooses to begin a procurement with a 
shortlisting procedure, MCA-Namibia is responsible for preparation of 
the short list. There is no maximum limit to the number of firms that 
may be short-listed and care should be taken not to eliminate any 
qualified participants from competing for the consultant contract. 
Consideration for shortlisting must be given to all firms or 
organizations--national and international--expressing interest and 
possessing the relevant qualifications. The method for developing a 
short list shall be fair and objective according to pre-announced 
criteria.
    2.7 Reserved.
    2.8 Selection based upon Consultants Qualifications is generally 
used for small assignments.\48\
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    \48\ Dollar thresholds defining ``small'' shall be determined in 
each case, taking into account the nature and complexity of the 
assignment, but generally will not exceed US$200,000.
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Preparation and Issuance of the Request for Proposals (``RFP'')
    2.9 The RFP shall include (a) a Letter of Invitation, (b) 
Information to Consultants, (c) the TOR, and (d) the proposed contract. 
MCA-Namibia shall use the applicable Standard Proposal Documents, as 
approved byMCC pursuant to Part 3 of these Rules, as may be modified to 
address project-specific conditions, subject to MCC approval when the 
change is material. MCA-Namibia may use an electronic system to 
distribute the RFP, provided that MCC is satisfied with the adequacy of 
such system. If the RFP is distributed electronically, the electronic 
system shall be secure to avoid modifications to the RFP and shall not 
unfairly restrict the access of consultants to the RFP.
Letter of Invitation (``LOI'')
    2.10 The LOI shall state the intention of MCA-Namibia to enter into 
a contract for the provision of consultant services, the source of 
funds, the details of MCA-Namibia and the date, time, and address for 
submission of proposals.
Instructions to Consultants (``ITC'')
    2.11 The ITC shall contain all necessary information that would 
help consultants prepare responsive proposals, and shall bring as much 
transparency as possible to the selection procedure by providing 
information on the evaluation process and by indicating the evaluation 
criteria and methodology and their relative weights and the minimum 
passing quality score. The ITC may indicate an estimate of the level of 
key staff inputs (in staff time) required of the consultants or may 
provide the total budget, but neither item of information is required. 
The ITC shall specify the proposal validity period, which should be 
adequate for the evaluation of proposals, decision on award, MCC 
review, and finalization of contract negotiations. A detailed list of 
the information that should be included in the ITC is provided in 
Appendix 2 of this Section 1.B.
Contract
    2.12 Sub-Section 1.B.IV of these Rules briefly discusses the most 
common types of contracts. MCA-Namibia shall use an appropriate form of 
contract acceptable to MCC. Any changes to standard conditions shall be 
introduced generally through the forms and procedures defined in the 
Standard Proposal Documents. When the Standard Proposal Documents are 
not appropriate (for example, for preshipment inspection and 
procurement services), MCA-Namibia shall use other contract forms 
acceptable to MCC.
Receipt of Proposals
    2.13 MCA-Namibia shall allow enough time for the consultants to 
prepare their proposals. The time allowed shall depend on the 
assignment, the value of the contract, the difficulty of preparing a 
technical proposal and the duration of the advance notice given with 
posting of the General Procurement Notice. During this interval, the 
firms may request clarifications about the information provided in the 
RFP. MCA-Namibia shall provide these clarifications in writing and copy 
them to all firms either registered or on the short list (who intend to 
submit proposals). If necessary, MCA-Namibia shall extend the deadline 
for submission of proposals. The technical and financial proposals 
shall be submitted at the same time. No amendments to the technical or 
financial proposals shall be accepted after the deadline. To safeguard 
the integrity of the process, the technical and financial proposals 
shall be

[[Page 46763]]

submitted in separate sealed envelopes. The technical envelopes shall 
be opened immediately by a committee of officials drawn from the 
relevant departments (technical, finance or legal, as appropriate), 
after the closing time for submission of proposals. The financial 
proposals shall remain sealed and shall be properly secured until they 
are opened publicly. Any proposal received after the closing time for 
submission of proposals shall be returned unopened after the time for 
protest has expired. MCA-Namibia may use electronic systems permitting 
consultants to submit proposals by electronic means, provided MCC is 
satisfied with the adequacy of the system, including, inter alia, that 
the system is secure, maintains the confidentiality and authenticity of 
proposals submitted, uses an electronic signature system or equivalent 
to keep consultants bound to their proposals, and only allows proposals 
to be opened with due simultaneous electronic authorization of the 
consultant and MCA-Namibia. In this case, consultants shall continue to 
have the option to submit their proposals in hard copy.
Evaluation of Proposals: Consideration of Quality and Cost
    2.14 The evaluation of the proposals shall be carried out in two 
stages: 1. quality, 2. cost. Evaluators of technical proposals shall 
not have access to the financial proposals until the technical 
evaluation, including any required MCC reviews and approvals, is 
concluded. Financial proposals shall be opened only thereafter. The 
evaluation shall be carried out in full conformity with the provisions 
of the RFP.
Evaluation of the Quality
    2.15 MCA-Namibia shall evaluate each technical proposal (using a 
technical evaluation panel of generally three or more technical 
specialists in the sector), taking into account appropriate evaluation 
criteria as set out in the RFP. Evaluation criteria may include (a) the 
consultant's relevant experience for the assignment, (b) the quality of 
the methodology proposed, and (c) the qualifications of the key staff 
proposed. The relative weight of each criterion shall be disclosed in 
the RFP. The score for each proposal may be determined based upon the 
total point system or other methodology for evaluating and comparing 
responses fairly. When applying the total point method, each criterion 
is marked on a scale of 1 to 100 according to the specific needs of the 
assignment.
    2.16 MCA-Namibia may divide these criteria into sub-criteria. For 
example, sub-criteria under methodology might be innovation and level 
of detail. However, the number of sub-criteria should be limited to the 
essential. MCC recommends against the use of exceedingly detailed lists 
of sub-criteria that may render the evaluation a mechanical exercise 
more than a professional assessment of the proposals. If the 
shortlisting procedure was applied, the weight given to experience can 
be relatively modest, since this criterion has already been taken into 
account during the shortlisting process. More weight might be given to 
the methodology in the case of more complex assignments (for example, 
multidisciplinary feasibility or management studies).
    2.17 Evaluation of key personnel is recommended. Since key 
personnel ultimately determine the quality of performance, more weight 
shall be assigned to this criterion if the proposed assignment is 
complex. MCA-Namibia shall review the qualifications and experience of 
proposed key personnel in their curricula vitae, which must be 
accurate, complete, and signed by an authorized official of the 
consultant firm and the individual proposed. The individuals might be 
rated in the following three sub-criteria, as relevant to the task:
    (a) General qualifications: General education and training, length 
of experience, positions held, time with the consultant firm as staff, 
experience in developing countries, and so forth;
    (b) Adequacy for the assignment: education, training, and 
experience in the specific sector, field, subject, and so forth, 
relevant to the particular assignment; and
    (c) Experience in the region: knowledge of the local language, 
culture, administrative system, government organization, and so forth.
    2.18 MCA-Namibia shall evaluate each proposal on the basis of its 
responsiveness to the TOR. A proposal shall be considered unsuitable 
and shall be rejected at this stage if it does not respond to important 
aspects of the TOR or it fails to achieve a minimum technical score 
specified in the RFP.
    2.19 At the end of the process, MCA-Namibia shall prepare a 
technical evaluation report of the ``quality'' of the proposals and, in 
the case of contracts subject to prior review, submit it to MCC for its 
review and approval. The report shall substantiate the results of the 
evaluation and describe the relative strengths and weaknesses of the 
proposals. All records relating to the evaluation, such as individual 
mark sheets, shall be retained until completion of the Project and its 
audit.
Evaluation of Financial Proposals
    2.20 After the evaluation of quality is completed and the required 
reviews and approvals have been issued, MCA-Namibia shall inform the 
consultants who have submitted proposals of the technical points 
assigned to each consultant and shall notify those consultants whose 
proposals did not meet the minimum qualifying mark or were considered 
nonresponsive to the RFP and the TOR that their financial proposals 
will be returned unopened after the signature of the contract. MCA-
Namibia shall simultaneously notify the consultants that have secured 
at least the minimum qualifying mark of the date, time, and place set 
for opening the financial proposals. If the procurement is on the 
critical path for implementation of the Compact, the opening date may 
be defined to allow very short notice for consultants to make 
arrangements to attend the opening of the financial proposals. In such 
case, MCA-Namibia shall arrange for the record of the proceedings of 
the opening to be signed by at least two independent witnesses. The 
financial proposals shall be opened publicly in the presence of 
representatives of the consultants who choose to attend (in person or 
online). The name of the consultant, the technical points, and the 
proposed prices shall be read aloud (and posted online when electronic 
submission of proposals is used) and recorded when the financial 
proposals are opened. MCA-Namibia shall also prepare the minutes of the 
public opening and a copy of this record shall be included in the 
record of the procurement and provided to all consultants who submitted 
proposals. A copy of the record shall be sent to MCC when the proposed 
award is subject to prior review by MCC.
    2.21 MCA-Namibia shall then review the financial proposals. If 
there are any arithmetical errors, they shall be corrected. For the 
purpose of comparing proposals, the RFP shall require that all 
proposals be stated in the same currency (local currency of the 
Republic of Namibia, or US$ or a combination of the two) as required in 
the RFP. If there is a need to make a conversion between the two 
allowable currencies, the RFP shall specify the source of the exchange 
rate to be used and the date of that exchange rate, provided that the 
date shall not be earlier than four weeks prior to the deadline for 
submission of proposals, nor later than the original date of expiration 
of the period of validity of the proposal. Any proposal that deviates 
from the currency

[[Page 46764]]

requirement as stated in the RFP may be rejected as non-responsive.
    2.22 For the purpose of evaluation, the financial proposals shall 
include or exclude local identifiable direct or indirect taxes as 
instructed in the RFP. The financial proposal shall include all 
consultants' remuneration and other expenses such as travel, 
translation, report printing, or secretarial expenses. When the total 
point evaluation methodology is used, the financial proposal with the 
lowest price may be given a financial score of 100 and other proposals 
given financial scores that are inversely proportional to their prices. 
Alternatively, a directly proportional or other methodology may be used 
in allocating the marks for the financial proposal. The methodology to 
be used shall be described in the RFP.
Combined Quality and Price Evaluation
    2.23.1 The total score shall be obtained by weighing the quality 
and price scores and adding them. The weight for the financial proposal 
shall be assigned, taking into account the complexity of the assignment 
and the relative importance of quality. The proposed weightings for 
quality and price shall be specified in the RFP. The firm obtaining the 
highest total score shall be invited for negotiations.
    2.23.2 When the procurement is subject to MCC prior review for 
proposed award, MCA-Namibia, before inviting the firm obtaining the 
highest total score for negotiations, shall furnish to MCC for its 
review and approval a full description of the procurement process 
including an account of all protests and appeals and other significant 
problems or defects during the process and a description of how these 
were resolved.
Negotiations and Award of Contract
    2.24 Negotiations shall include discussions of the TOR, the 
methodology, staffing, inputs by MCA-Namibia and special conditions of 
the contract. These discussions shall not substantially alter the 
original TOR or the terms of the contract, lest the procurement process 
be invalidated. Major reductions in work inputs should not be made 
solely to meet the budget. The final TOR and the agreed methodology 
shall be incorporated into ``Description of Services,'' which shall 
form part of the contract.
    2.25 The selected firm should not be allowed to substitute key 
staff, unless both parties agree that undue delay in the selection 
process makes such substitution unavoidable or that such changes are 
critical to meet the objectives of the assignment. If this is not the 
case and if it is established that key staff were included in the 
proposal without confirming their availability, the firm may be 
disqualified and the process continued with the next ranked firm. The 
key staff proposed for substitution shall have qualifications equal to 
or better than the key staff initially proposed.
    2.26 Financial negotiations shall include clarification of the 
consultants' tax liability in the Republic of Namibia (if any) to 
ensure that the contract is consistent with the provisions of the 
Compact and Supplemental Agreement. As payments under fixed-price 
contracts are based on work done and delivery of outputs (or products), 
the offered price shall include all costs (staff time, overhead, 
travel, hotel, etc.). Consequently, if the selection method for a 
fixed-price contract included price as a component, this price shall 
not be negotiated. In the case of Time-Based Contracts, payment is 
based on inputs (staff time and reimbursables) and the offered price 
shall include staff rates and an estimation of the amount of 
reimbursables. When the selection method includes price as a component, 
negotiations of staff rates should not take place, except in special 
circumstances, such as when staff rates offered are much higher than 
rates typically charged by consultants in similar circumstances for 
similar contracts. Consequently, the prohibition of negotiation does 
not preclude the right of MCA-Namibia to ask for clarifications, and, 
if fees are very high, to ask for change of fees, after due 
consultation with MCC. Reimbursables are to be paid on actual expenses 
incurred at cost, subject to limitations set out in MCC Cost 
Principles, upon presentation of receipts and therefore are not subject 
to negotiations. However, if MCA-Namibia wants to define ceilings for 
unit prices of certain reimbursables (like travel or hotel rates), it 
should indicate the maximum levels of those rates in the RFP or define 
a per diem in the RFP. If the contract permits reimbursement of any 
costs, the reimbursement rates shall be limited by applicable MCC Cost 
Principles (``MCC Cost Principles'') found at the MCC Web site, http://www.mcc.gov.
    2.27 If the negotiations fail to result in an acceptable contract, 
MCA-Namibia shall terminate the negotiations and invite the next ranked 
firm for negotiations. MCA-Namibia shall consult with MCC prior to 
taking this step. The consultant shall be informed of the reasons for 
termination of the negotiations. Once negotiations are commenced with 
the next ranked firm, MCA-Namibia shall not reopen the earlier 
negotiations. After negotiations are successfully completed and all 
required reviews and approvals have been issued, MCA-Namibia shall 
promptly notify other firms on the short list that they were 
unsuccessful.
Publication of the Award of Contract
    2.28 After the award of contract, MCA-Namibia shall post at UNDB 
Online, at dgMarket and at MCA-Namibia's Web site (or such other 
appropriate Web site designated by MCA-Namibia and approved by MCC) the 
results, identifying the procurement, the name of the winning 
consultant and the price, duration, and summary scope of the contract. 
The same information shall be sent to all consultants who have 
submitted proposals. The posting at UNDB Online and at dgMarket must be 
done monthly and at MCA-Namibia's Web site (or such other appropriate 
Web site designated by MCA-Namibia and approved by MCC) at least 
weekly. The posting shall be in a format of a summarized table covering 
the previous period. All such postings shall be in English.
Debriefing
    2.29 In the publication of contract award referred to in Paragraph 
2.28 above, MCA-Namibia shall specify that any consultant who wishes to 
ascertain the grounds on which its proposal was not selected should 
request an explanation from MCA-Namibia. MCA-Namibia shall promptly 
provide the explanation as to why such proposal was not selected, in 
writing and/or in a debriefing meeting, at the option of the 
consultant. The requesting consultant shall bear all the costs of 
attending such a debriefing.
Rejection of All Proposals, and Re-invitation
    2.30 MCA-Namibia will be justified in rejecting all proposals only 
if all proposals are nonresponsive because they present major 
deficiencies in complying with the TOR, if they involve prices 
substantially higher than the original estimate, or if contracting for 
the services is no longer in the best interest of implementation of the 
Compact. In the case of a higher price, the feasibility of increasing 
the budget, or scaling down the scope of services with the firm should 
be investigated in consultation with MCC. Before all the proposals are 
rejected and new proposals are invited, MCA-Namibia shall notify MCC, 
indicating the reasons for rejection of all proposals, and shall obtain 
MCC's approval before proceeding with the rejection and the new 
process. The new process may

[[Page 46765]]

include revising the RFP (including the short list) and the budget. 
These revisions shall be agreed upon with MCC. Within two weeks of the 
rejection of all proposals, MCA-Namibia shall post at dgMarket and MCA-
Namibia's Web site (or such other appropriate Web site designated by 
MCA-Namibia and approved by MCC) notification of the cancellation of 
the procurement. The notification shall identify the procurement and 
state briefly the reasons for cancellation. The same information shall 
be sent to all those who have submitted proposals. All such postings 
shall be in English.
Confidentiality
    2.31 Information relating to evaluation of proposals and 
recommendations concerning awards shall not be disclosed to the 
consultants who submitted the proposals, or to other persons not 
officially concerned with the process, until the publication of the 
award of contract, except as provided in Paragraphs 2.20 and 2.27 of 
Section 1.B of these Rules.
III. Other Methods of Selection
General
    3.1 This Sub-Section 1.B.III describes the selection methods other 
than QCBS, and the circumstances under which they are acceptable. All 
the relevant \49\ provisions of Sub-Section 1.B.II (QCBS) shall apply 
whenever competition is used.
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    \49\ All provisions of Sub-Section 1.B.II shall be applied with 
the modifications and suppressions required by the method for 
selecting consultants used in the specific case. Advertisement is 
not required when single source selection is used.
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Quality Based Selection (``QBS'')
    3.2 QBS may be appropriate for the following types of assignments:
    (a) Complex or highly specialized assignments for which it is 
difficult to define precise TORs and the required input from the 
consultants, and for which MCA-Namibia expects the consultants to 
demonstrate innovation in their proposals;
    (b) Assignments that have a high downstream impact and in which the 
objective is to have the best experts; and
    (c) Assignments that can be carried out in substantially different 
ways, such that proposals will not be comparable.
    3.3 In QBS, the RFP may request submission of a technical proposal 
only (without the financial proposal), or request submission of both 
technical and financial proposals at the same time, but in separate 
envelopes (two-envelope system). The procurement shall be advertised 
according to the requirements set out in Paragraphs 2.5.1 and 2.5.2 of 
Section 1.B, and may, at the discretion of MCA-Namibia, be preceded by 
a shortlisting procedure (see Paragraphs 2.6 to 2.8 of Section 1.B). 
The RFP may provide either the estimated budget or the estimated number 
of key staff time, specifying that this information is given as an 
indication only and that consultants shall be free to propose their own 
estimates.
    3.4 If technical proposals alone were invited, after evaluating the 
technical proposals using the same methodology as in QCBS, MCA-Namibia 
shall ask the consultant with the highest ranked technical proposal to 
submit a detailed financial proposal. MCA-Namibia and the consultant 
shall then negotiate the financial proposal and the contract. All other 
aspects of the selection process shall be identical to those of QCBS, 
including the publication of the award of contract as described in 
Paragraph 2.28. If consultants were requested to provide financial 
proposals initially together with the technical proposals, safeguards 
shall be built in as in QCBS to ensure that, after the negotiations are 
successfully concluded, the financial proposal of only the selected 
firm is opened and the rest are returned unopened.
Selection Under a Fixed Budget (``FBS'')
    3.5 This method is appropriate when the assignment is simple and 
can be precisely defined. The RFP shall indicate the available budget 
and request the consultants to provide their best technical and 
financial proposals, which stay within the budget, in separate 
envelopes. The TOR should be particularly well prepared to make sure 
that the budget is sufficient for the consultants to perform the 
expected tasks. The procurement shall be advertised according to the 
requirements set out in Paragraphs 2.5.1 and 2.5.2 of Section 1.B, and 
may, at the discretion of MCA-Namibia, be preceded by a shortlisting 
procedure (see Paragraphs 2.6 to 2.8 of Section 1.B). Evaluation of all 
technical proposals shall be carried out first as in the QCBS method. 
Then the financial proposals shall be opened in public and prices shall 
be read aloud. Proposals that exceed the indicated budget shall be 
rejected. The consultant who has submitted the highest ranked technical 
proposal shall be selected and invited to negotiate a contract. The 
publication of the Award of Contract shall be as described in Paragraph 
2.28.
Least-Cost Selection (``LCS'')
    3.6 This method is appropriate for selecting consultants for 
assignments of a standard or routine nature (audits, engineering design 
of noncomplex works, etc.) where well established practices and 
standards exist. Under this method, a ``minimum'' qualifying mark for 
the ``quality'' is established. Proposals, to be submitted in two 
envelopes, are invited. The procurement shall be advertised according 
to the requirements set out in Paragraphs 2.5.1 and 2.5.2 of Section 
1.B, and may, at the discretion of MCA-Namibia, be preceded by a 
shortlisting procedure (see Paragraphs 2.6 to 2.8 of Section 1.B). 
Technical proposals are opened first and evaluated. Those securing less 
than the minimum qualifying mark \50\ are rejected, and the financial 
proposals of the rest are opened in public. The firm with the lowest 
price shall then be selected and the publication of the award of 
contract shall be as described in Paragraph 2.28. Under this method, 
the minimum qualifying mark shall be established, understanding that 
all proposals above the minimum compete only on ``price.'' The minimum 
qualifying mark shall be stated in the RFP.
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    \50\ This method shall not be used as a substitute for QCBS and 
shall be used only for the specific cases of very standard and 
routine technical nature where the intellectual component is minor. 
For this method the minimum qualifying mark shall be 70 points or 
higher.
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Selection Based on the Consultants' Qualifications (``CQS'')
    3.7 This method may be used for small \51\ assignments for which 
the need for preparing and evaluating competitive proposals is not 
justified. In such cases, MCA-Namibia shall prepare the TOR, request 
information on the consultants' experience and competence relevant to 
the assignment, and select the firm with the most appropriate 
qualifications and references. The procurement shall be advertised 
according to the requirements set out in Paragraphs 2.5.1 and 2.5.2 of 
Section 1.B and may, at the discretion of MCA-Namibia, be preceded by a 
shortlisting procedure (see Paragraphs 2.6 to 2.8 of Section 1.B). The 
selected firm shall be asked to submit a combined technical and 
financial proposal and then be invited to negotiate the contract.
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    \51\ Dollar thresholds defining ``small'' shall be determined 
and justified in writing in each case, taking into account the 
nature and complexity of the assignment, but shall not exceed 
US$$200,000 except in exceptional circumstances and specifically 
approved by MCC.
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    3.8 The publication of the award of contract shall be as described 
in Paragraph 2.28.

[[Page 46766]]

Single-Source Selection (``SSS'')
    3.9 Single-source selection of consultants does not provide the 
benefits of competition with regard to quality and cost, lacks 
transparency in selection, and could encourage unacceptable practices. 
Therefore, single-source selection shall be used only in exceptional 
cases. The justification for single-source selection shall be examined 
in the context of the overall interests of MCA-Namibia and 
implementation of the Compact and the responsibility of MCC to ensure 
economy and efficiency and provide equal opportunity to all qualified 
consultants.
    3.10 Single-source selection may be appropriate only if it presents 
a clear advantage over competition: (a) For tasks that represent a 
natural continuation of previous work carried out by the firm (see 
Paragraph 3.11), (b) in emergency cases, such as in response to 
disasters and for consultant services required during the period of 
time immediately following the emergency, (c) for very small \52\ 
assignments, or (d) when only one firm is qualified or has experience 
of exceptional worth for the assignment.
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    \52\ Dollar thresholds defining ``very small'' shall be 
determined in each case, taking into account the nature and 
complexity of the assignment, but shall not exceed USD2,000.
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    3.11 When continuity for downstream work is essential, the initial 
RFP shall outline this prospect, and if practical, the factors used for 
the selection of the consultant shall take the likelihood of 
continuation into account. Continuity in the technical approach, 
experience acquired, and continued professional liability of the same 
consultant may make continuation with the initial consultant preferable 
to a new competition, subject to satisfactory performance in the 
initial assignment. For such downstream assignments, MCA-Namibia shall 
ask the initially selected consultant to prepare technical and 
financial proposals on the basis of the TOR furnished by MCA-Namibia, 
which shall then be negotiated.
    3.12 If the initial assignment was not awarded on a competitive 
basis or if the downstream assignment is substantially larger in value, 
a competitive process acceptable to MCC shall normally be followed in 
which the consultant carrying out the initial work is not excluded from 
consideration if it expresses interest. MCC will consider exceptions to 
this rule only under special circumstances and only when a new 
competitive process is not practicable.
    3.13 The publication of the award of contract shall be as described 
in Section 1.B, Paragraph 2.28.
    3.14 Reserved.
Selection of Particular Types of Consultants
    3.15 Reserved.
    3.16 Reserved.
    3.17 Procurement Agents and Fiscal Agents. MCA-Namibia may wish (or 
be required by MCC) to employ, as its agents, firms that specialize in 
handling procurement and/or financial management services. Such agents 
shall be selected following these Rules (or such other procedures as 
MCC may approve) and the procedures set out in the RFP requesting such 
agent services. When performing procurement agent services, the 
procurement agent shall follow the procurement procedures outlined in 
the Compact and Supplemental Agreements, in the Procurement Plan 
approved by MCC, and in these Rules.
    3.18 Inspection Agents. MCA-Namibia may wish to employ inspection 
agencies to inspect and certify goods prior to shipment or on arrival 
in the Republic of Namibia. The inspection by such agencies usually 
covers the quality and quantity of the goods concerned and 
reasonableness of price. Inspection agencies shall be selected using 
the procedures set out in the approved and adopted Procurement Plan.
    3.19 Banks. MCA-Namibia may require the services of investment and 
commercial banks, financial firms, and fund managers to implement the 
Compact. To procure these services, the RFP shall specify clearly how 
proposals will be presented and how they will be compared.
    3.20 Auditors. Auditors typically carry out auditing tasks under 
well defined TOR and professional standards. MCA-Namibia shall select 
auditors according to the instructions provided to it by MCC including 
MCC's Standard Proposal Document for auditor services.
    3.21 Service Delivery Contractors. Projects in the social sectors 
in particular may involve hiring of large numbers of individuals who 
deliver services on a contract basis (for example, social workers, such 
as nurses and paramedics). The job descriptions, minimum 
qualifications, terms of employment, selection procedures, and the 
extent of MCC review of these procedures and documents shall be 
described in the Project documentation, and the contract shall be 
included in the Procurement Plan approved by MCC.

IV. Types of Contracts and Important Provisions

Types of Contracts
    4.1 Fixed-Price Contract (``Fixed-Price Contract''). Fixed-Price 
Contracts may take various forms such as lump sum, unit price and 
percentage fees.\53\ Fixed-Price Contracts are used mainly for 
assignments in which the content and the duration of the services and 
the required output of the consultants are clearly defined. They are 
widely used for simple planning and feasibility studies, environmental 
studies, detailed design of standard or common structures, preparation 
of data processing systems, and so forth. Payments are linked to work 
done in performance of the contract and to outputs (deliverables), such 
as reports, drawings, bills of quantities, bidding documents, and 
software programs. Fixed-Price Contracts are easier to administer than 
Time-Based Contracts (defined below) because payments are due on 
clearly specified outputs.
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    \53\ Percentage contracts directly relate the fees paid to the 
consultant to the estimated or actual project construction cost, the 
cost of the goods procured or inspected or other measure of service 
such as in the case of Procurement Agent, the value of contracts 
procured or for Fiscal Agent the amount of funds disbursed. 
Percentage contracts must be distinguished from cost-plus-
percentage-of-cost type contracts which are prohibited as such 
contracts motivate a supplier, contractor or consultant to increase 
its profits by increasing cost of performance.
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    4.2 Time-Based Contract (``Time-Based Contract''). This type of 
contract is appropriate when it is difficult to define the scope and 
the length of services, either because the services are related to 
activities by others for which the completion period may vary, or 
because the input of the consultants required to attain the objectives 
of the assignment is difficult to assess. Payments are based on agreed 
hourly, daily, weekly, or monthly rates for staff (who are normally 
named in the contract) and on reimbursable items using actual expenses 
and/or agreed unit prices. Time-based contracts need to be closely 
monitored and administered by MCA-Namibia to ensure that the assignment 
is progressing satisfactorily and that payments claimed by the 
consultants are appropriate. For contracts that permit reimbursement of 
any costs, the reimbursement rates shall be limited by applicable MCC 
Cost Principles. The costs shall also be subject to audit in accordance 
with the requirements set out in the Compact and the Supplemental 
Agreements.
    4.3 Reserved.

[[Page 46767]]

    4.4 Percentage Contract. These contracts are commonly used for 
architectural services. They may also be used for procurement and 
inspection agents. Percentage Contracts directly relate the fees paid 
to the consultant to the estimated or actual Project construction cost, 
or the cost of the goods procured or inspected. The contracts are 
negotiated on the basis of market norms for the services and/or 
estimated staff-month costs for the services, or competitively bid. It 
should be borne in mind that in the case of architectural or 
engineering services, Percentage Contracts implicitly lack incentive 
for economic design and are hence discouraged. Therefore, the use of 
such a contract for architectural services is recommended only it if is 
based on a fixed target cost and covers precisely defined services (for 
example, not works supervision).
    4.5.1 Indefinite Delivery and Indefinite Quantity (``IDIQ'') 
Contract. These contracts are used when MCA-Namibia needs to have ``on 
call'' specialized services to provide advice on a particular activity, 
the extent and timing of which cannot be defined in advance. These are 
commonly used to retain ``advisers'' for implementation of complex 
Projects, expert adjudicators for dispute resolution panels, 
institutional reforms, procurement advice, technical troubleshooting, 
and so forth, normally for a period of a year or more.
    4.5.2 Requirements and Blanket Purchase Agreements (``BPA'') 
Contracts. MCA-Namibia may use these contract types for reoccurring 
needs.
Important Provisions
    4.6 RFPs shall clearly state that firms must express the price for 
their services in the currency stated in the RFP, which in every case 
must be either U.S. dollars or the local currency of the Republic of 
Namibia or a combination thereof. MCA-Namibia may require consultants 
to state the portion of the price representing costs in the local 
currency of the Republic of Namibia. Payment under the contract shall 
be made in the currency or currencies as stated in the RFP.
    4.7 Reserved.
    4.8 Payment Provisions. Payment provisions, including amounts to be 
paid, schedule of payments, and payment procedures, shall be set out in 
the RFP to the extent possible. Payments may be made at regular 
intervals, milestones and outputs as described in the RFP and agreed in 
the contract.
    4.9 Except as otherwise stated in any related provision of the 
Compact and Supplemental Agreements, payments shall be made promptly in 
accordance with the contract provisions. To that end:
    (a) Consultants will be paid directly by the Fiscal Agent; and,
    (b) The contract shall provide for the payment of interest if 
payment is delayed beyond the time allowed in the contract due to the 
fault of MCA-Namibia or its agents; the rate of charges shall be 
specified in the contract.
    4.10 Bid and Performance Securities. Bid and performance securities 
are not always recommended for consultants' services. Their enforcement 
is often subject to judgment calls, they can be easily abused, and they 
tend to increase the costs to the consultant industry without evident 
benefits, which are eventually passed on to MCA-Namibia. However, they 
can be useful where Compact implementation would be damaged by poor 
consultant performance.
    4.11 Reserved.
    4.12 Conflict of Interest. The consultant shall not receive any 
remuneration in connection with the assignment except as provided in 
the contract. The consultant and its affiliates shall not engage in 
consultant or other activities that conflict with the interest of MCA-
Namibia under the contract. The contract shall include provisions 
limiting future engagement of the consultant or other services 
resulting from or directly related to the firm's consultant services in 
accordance with the requirements of Paragraphs 1.9 and 1.10 of Section 
1.B of these Rules.
    4.13 Professional Liability. The consultant is expected to carry 
out its assignment with due diligence and in accordance with prevailing 
standards of the profession. As the consultant's liability to MCA-
Namibia will be governed by the applicable law, the contract need not 
deal with this matter unless the parties wish to limit this liability. 
If they do so, they should ensure that (a) there must be no such 
limitation in case of the consultant's gross negligence or willful 
misconduct; (b) the consultant's liability to MCA-Namibia may in no 
case be limited to less than a multiplier of the total value of the 
contract to be indicated in the RFP and in the special conditions of 
the contract (the amount of such limitation will depend on each 
specific case); \54\ and (c) any such limitation may deal only with the 
consultant's liability toward MCA-Namibia and not with the consultant's 
liability toward third parties.
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    \54\ MCA-Namibia is encouraged to secure insurance for potential 
risks above these limits.
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    4.14 Staff Substitution. During an assignment, if substitution is 
necessary (for example, because of ill health or because a staff member 
proves to be unsuitable), the consultant shall propose other staff of 
at least the same level of qualifications for approval by MCA-Namibia.
    4.15 Applicable Law and Settlement of Disputes. The contract shall 
include provisions dealing with the applicable law and the forum for 
the settlement of disputes. Settlement of disputes shall take place in 
the Republic of Namibia with the possibility for international 
arbitration where the parties so agree.

V. Selection of Individual Consultants

    5.1 Individual consultants are employed on assignments for which 
(a) teams of personnel are not required, (b) additional outside (home 
office) professional support is not required, and (c) the experience 
and qualifications of the individual are the paramount requirement. 
When coordination, administration, or collective responsibility may 
become difficult because of the number of individuals, it would be 
advisable to employ a firm.
    5.2 Individual consultants are selected on the basis of their 
qualifications for the assignment. The procurement shall be advertised 
according to the requirements set out in Paragraphs 2.5.1 and 2.5.2 of 
Section 1.B and may, at the discretion of MCA-Namibia, be preceded by a 
shortlisting procedure (see Paragraphs 2.6 to 2.8 of Section 1.B). 
Consultants do not need to submit proposals but shall be selected 
through evaluation and comparison of qualifications. Individuals 
considered for comparison of qualifications shall meet the minimum 
relevant qualifications and those selected to be contracted by MCA-
Namibia shall be the best qualified and shall be fully capable of 
carrying out the assignment. Capability is judged on the basis of 
evidence of knowledge and past experience relevant to the services to 
be provided and past performance based upon references and 
recommendations.
    5.3 From time to time, permanent staff or associates of a 
consultant firm may be available as individual consultants. In such 
cases, the conflict of interest provisions described in these Rules 
shall apply to the parent firm.
    5.4 Individual consultants may be selected on a sole-source basis 
with due justification in exceptional cases such as for: (a) Tasks that 
are a continuation of previous work that the consultant has carried out 
and for which the consultant was selected competitively; (b) certain 
assignments with total expected

[[Page 46768]]

duration of less than six months; (c) emergency situations resulting 
from natural disasters; and (d) when the individual is the only 
consultant qualified for the assignment.
Appendix 1: Review by MCC of the Selection of Consultants
Scheduling the Selection Process
    1. If required by the thresholds set forth in Attachment 1 of these 
Rules, MCC shall review the selection process for the hiring of 
consultants proposed by MCA-Namibia in the Procurement Plan to ensure 
compliance with the Compact and the Supplemental Agreements. Each 
Procurement Plan typically covers a period of at least six months and 
is updated at least semi-annually. Any revisions proposed to the 
Procurement Plan shall be furnished to MCC for its prior approval.
Prior Review
    The thresholds for review of procurement decisions prior to award 
of a contract and any modification to such contract are set out in 
Attachment 1 of these Rules.
Post Review
    MCA-Namibia shall retain all documentation with respect to each 
contract for at least five years after the closing date of the Compact 
for examination by MCC, its auditors, its oversight authorities and 
independent auditors of MCA-Namibia. This documentation shall include, 
but shall not be limited to, the signed original of the contract, the 
analysis of the respective proposals, and recommendations for award. 
For contracts awarded on the basis of single-source selection, 
documentation shall include the record of justification, the 
qualifications and experience of the consultants, and the signed 
original of the contract. MCA-Namibia shall also furnish such 
documentation to MCC upon request. MCC shall, if it determines that the 
contract was not awarded in accordance with the agreed procedures as 
reflected in the Compact, including the Supplemental Agreements and 
further elaborated in the Procurement Plan approved by MCC, or the 
contract itself is not consistent with such procedures, promptly inform 
MCA-Namibia that Paragraph 1.17 (Misprocurement) of Section 1.B of 
these Rules shall apply and state the reasons for such determination.
Appendix 2: Instructions to Consultants
    1. When procuring consultant services, MCA-Namibia shall use MCA-
Namibia Standard Solicitation Documents including the Standard Proposal 
Document accepted by MCC. These documents shall include Instructions to 
Consultants and TORs providing adequate information on the following 
aspects of the assignment and the procurement process:
    (a) A description of the assignment;
    (b) Standard formats for the technical and financial proposals;
    (c) The names and contact information of officials to whom 
clarifications shall be addressed and with whom the consultants' 
representative shall meet, if necessary;
    (d) Details of the selection procedure to be followed, including 
(i) a description of the two-stage process, if appropriate; (ii) a 
listing of the technical evaluation criteria and weight given to each 
criterion; (iii) the details of the financial evaluation; (iv) the 
relative weight given to quality and price in the case of QCBS; (v) the 
minimum pass score for quality; and (vi) the details on the public 
opening of financial proposals;
    (e) Estimate of the level of key staff inputs (in staff months) 
required of the consultants or an indicative value of the proposed 
contract, but generally not both;
    (f) Indication of minimum experience, academic achievement, and so 
forth, expected of key staff;
    (g) Details and status of MCC funding;
    (h) Information on negotiations; financial and other information 
that shall be required of the selected firm during negotiation of the 
contract;
    (i) Deadline for submission of proposals;
    (j) Currency(ies) in which the costs of services shall be 
expressed, compared, and paid;
    (k) Reference to any local laws that may be particularly relevant 
to the proposed consultants' contract;
    (l) Statement that the firm and any of its affiliates shall be 
disqualified from providing downstream goods, works, consultant or non-
consultant services under the Project if, in the judgment of MCA-
Namibia or MCC, such activities constitute a conflict of interest with 
the services provided under the assignment;
    (m) Method in which the proposal shall be submitted, including the 
requirement that the technical proposals and financial proposals be 
sealed and submitted separately in a manner that shall ensure that the 
technical evaluation is not influenced by price;
    (n) Request that the invited firm (i) acknowledges receipt of the 
RFP and (ii) informs MCA-Namibia whether or not it will be submitting a 
proposal;
    (o) If applicable, the short list of consultants being invited to 
submit proposals and whether or not associations between short-listed 
consultants are acceptable;
    (p) Period for which the consultants' proposals shall be held valid 
and during which the consultants shall undertake to maintain, without 
change, the proposed key staff, and shall hold to both the rates and 
total price proposed; in case of extension of the proposal validity 
period, the right of the consultants not to maintain their proposal;
    (q) Anticipated date on which the selected consultant shall be 
expected to commence the assignment;
    (r) Statement regarding tax liabilities in reference to and 
accordance with the Compact and the Supplemental Agreements;
    (s) Details of the services, facilities, equipment, and staff to be 
provided by MCA-Namibia;
    (t) Phasing of the assignment, if appropriate; likelihood of follow 
up assignments;
    (u) Procedure to handle clarifications about the information given 
in the RFP;
    (v) Any conditions for subcontracting part of the assignment; and
    (w) Notice of Bid Challenge System.
Appendix 3: Guidance to Consultants
    Consultants can find information about the Millennium Challenge 
Corporation and its programs at www.mcc.gov and about MCC Programs in 
the Republic of Namibia at the Web site established by MCA-Namibia (or 
such other appropriate Web site designated by MCA-Namibia and approved 
by MCC).
Part 2. Reports and Records
    Complete and uniform procurement records shall be maintained 
according to a standard format approved by MCC. MCA-Namibia shall also 
maintain and submit quarterly to MCC a cumulative report of all 
procurement activity (``Procurement Performance Report''), including 
explanations of any variance from the Procurement Plan, in the format 
mandated by MCC. The standard form with instructions is found on the 
MCC Web site, http://www.mcc.gov.
Part 3. Standard Solicitation Documents
    MCA-Namibia shall develop standard documents to invite quotations, 
bids, proposals and qualifications (``Standard Solicitation 
Documents'') including standard bidding and proposal documents 
(``Standard Bidding Documents'' and ``Standard Proposal Documents''). 
Any Standard Solicitation Document used to procure contracts valued 
over US$100,000 must be available in English and is subject to review 
and approval by MCC. The

[[Page 46769]]

instructions to bidders and consultants in Standard Solicitation 
Documents must set out or reference the rules and procedures governing 
the procurement. The instructions to bidders and instructions to 
consultants must also state the currency or currencies for the quotes, 
bids or financial proposals, as appropriate, and shall specify that 
payment be made in either United States dollars or the local currency 
of the Republic of Namibia.
    The terms and conditions of procurement contracts shall be set out 
in the applicable solicitation documents. The terms and conditions 
shall include a provision stipulating the governing law and the 
procedures for resolving contract disputes. The term and conditions 
also shall include provisions as required or specified by these Rules 
and other Compact documents including provisions that stipulate (a) MCC 
status and rights; (b) limitations on use or treatment of MCC funding; 
(c) procurement requirements; (d) records and information, access, 
audits and reviews, and reports; (e) compliance with rules on 
prohibited activities, restricted parties, and eligibility requirements 
of prohibited source provisions in accordance with then-applicable U.S. 
law, regulations and policy; (f) publicity, information and marketing; 
(g) insurance requirements; (h) conflict of interest; and (i) 
inconsistencies, as well as any other terms and conditions as 
applicable to a contract or agreement of that nature or otherwise as 
MCA-Namibia, solely upon the written instructions of MCC, may require 
from time to time. A summary of the applicable provisions described in 
(a) through (i) of this Section may be found on the MCC Web site at 
http://www.mcc.gov/guidance/compact/general_provisions.pdf. MCC has 
the right to review and approve any proposed contracts and any material 
modifications to any executed contract.
Part 4. Review and Approval Requirements
    Certain important procurement actions and decisions shall be 
subject to prior review or approval by levels of authority within MCA-
Namibia or by MCC, as provided in Attachment 1 of these Rules. This 
system of review and approval requirements is intended to ensure 
adequate oversight and monitoring of MCC-funded procurement activities, 
help detect errors when they can be easily corrected and to otherwise 
avoid problems in such procurement activities. It is subject to 
modification or exception at any time by MCC.
    MCA-Namibia shall ensure that all procurement actions described in 
Attachment 1 for goods, works, consultant and non-consultant services 
in furtherance of the Compact and funded in whole or in part by MCC 
funding shall be subject to the prior approval of the authorized 
entity, officer(s) or bodies designated on Attachment 1 for the 
corresponding type of action or dollar amount threshold, unless MCC has 
granted a written exception to the approval requirement set out in 
Attachment 1.
    Notwithstanding the approval requirements set out in Attachment 1, 
MCC shall have the right to take review and require prior approval of 
any other procurement action, decision or document.
Part 5. Bid Challenge System
    MCA-Namibia shall establish a bid challenge system that provides 
suppliers, contractors and consultants the ability to seek review of 
procurement actions and decisions (``Bid Challenge System''). The 
organization, rules and procedures of such Bid Challenge System shall 
be subject to MCC approval. The Bid Challenge System must include a 
first level of review by MCA-Namibia with an appeal to a review body. 
The review body must be impartial and independent and shall have no 
interest (through financial, family, business or beneficial ownership 
or otherwise) in the outcome of the procurement, nor be involved in or 
related to the procurement process. The review body must follow clear 
and transparent written procedures and shall issue a timely written 
decision on any bid challenge that is timely and properly filed. The 
review body must have the authority to order a correction of a 
violation of the procurement principles and procedures or to order 
compensation for loss or damage suffered by a successful challenger, to 
the extent of the cost of preparation of the bid and the challenge. The 
review body must also have the power to order suspension of a 
procurement that is under challenge in order to preserve the commercial 
opportunity pending the outcome of the review. Notice of the Bid 
Challenge System must be set out in the solicitation documents. 
Standard notice provisions shall be subject to MCC approval. MCA-
Namibia shall ensure that all bid challenges are accepted, reviewed and 
processed in accordance with the rules and procedures of the Bid 
Challenge System as approved by MCC.
Part 6. Subcontracting
    (a) Every contract or subcontract for goods, works, consultant or 
non-consultant services with any party that receives at least US$50,000 
in the aggregate of MCC funding shall require the contracting party to 
follow the fundamental procurement principles promoting transparency, 
openness, competition and fairness to the maximum extent possible, 
remaining consistent with the objectives and requirements of the 
contract when subcontracting for goods, works, consultant or non-
consultant services.
    (b) In every contract or subcontract valued in excess of 
US$1,000,000, the contracting party shall be required to have written 
procurement procedures that may be subject to review by MCA-Namibia and 
MCC.
    (c) Any contractor or subcontractor planning to subcontract for a 
major item of goods, works, consultant or non-consultant services 
(deemed major if valued in excess of US$100,000) shall seek MCA-
Namibia's prior written approval of the subcontractor.
Part 7. Amendments and Exceptions
    These Rules will be amended, or otherwise modified, from time to 
time, at MCC's request, to reflect changes in U.S. law, regulations or 
policy related to the funding of procurements. In addition, these Rules 
may be amended by written agreement of MCC and MCA-Namibia, and MCA-
Namibia will consider in good faith any amendment for the purpose of 
ensuring continuity and compatibility between these Rules and the MCC 
Program Procurement Guidelines. On a case by case basis, the MCC may 
grant a waiver or exception to the Rules. Such waiver or exception must 
be in writing and shall be effective only to the extent specifically 
set forth in such writing.
Part 8. Publication of MCA-Namibia Procurement Rules
    MCA-Namibia shall ensure that these Rules (including any amendments 
thereto) are published on MCA-Namibia's Web site (or such other 
appropriate Web site designated by MCA-Namibia and approved by MCC).

MCA-Namibia Procurement Rules Attachment 1

Approval Requirements

[[Page 46770]]



                    Review of Procurement Decisions--Goods, Works and Non-Consultant Services
----------------------------------------------------------------------------------------------------------------
                                                             Level of review  (thresholds expressed in US$)
                                                      ----------------------------------------------------------
   Procurement procedure or         Decision \55\         MCA-Namibia
            method                                        Director of    Governing Body of MCA-        MCC
                                                          Procurement         Namibia \56\
----------------------------------------------------------------------------------------------------------------
                                Procurement Plans....  All.............  All..................  All.
                                Amendments to          All.............  Substantial Deviation  All.
                                 Procurement Plans.
Pre-qualification.............  Pre-qualification      All.............  None.................  Above 1,000,000.
                                 documents and
                                 advertising
                                 procedures.
                                Report with proposed   All.............  Above 500,000........  Above 500,000.
                                 list of entities
                                 qualified.
                                Record of Bid          All.............  All..................  All.
                                 Challenges.
Competitive Bidding...........  Bidding Documents....  All.............  None.................  Above 1,000,000
                                                                                                Goods. Above
                                                                                                5,000,000 Works.
                                Technical Evaluation   All.............  None.................  Above 250,000.
                                 or Review Report
                                 with Proposed Award.
                                Final Contract.......  All.............  Above 250,000........  Above 250,000.
                                Record of Bid          All.............  All..................  All.
                                 Challenges.
Limited Bidding...............  Short list...........  All.............  None.................  Above 100,000.
                                Bidding Documents....  All.............  None.................  Above 500,000.
                                Technical Evaluation   All.............  None.................  Above 1,000,000.
                                 or Review Report
                                 with Proposed Award.
                                Final Contract.......  All.............  Above 1,000,000......  Above 1,000,000.
                                Record of Bid          All.............  All..................  All.
                                 Challenges.
Shopping......................  Short list...........  Over 2,000......  None.................  None.
                                Record of Purchases..  Weekly..........  Monthly..............  None.
                                Record of Bid          All.............  All..................  Quarterly record
                                 Challenges.                                                     of decisions.
Direct Contracting............  Proposed Award.......  Over 2,000......  None.................  Above 50,000.
                                Final Contract.......  Over 2,000        Above 50,000.........  Above 50,000.
                                                        (Under 2,000
                                                        review monthly
                                                        report).
                                Record of Bid          All.............  All..................  All.
                                 Challenges.
Force Account.................  Selection of using     All.............  All..................  All.
                                 equipment owned by
                                 or employees of
                                 Government for
                                 performing works.
                                Proposed contract....  All.............  None.................  All.
                                Final contract.......  All.............  All..................  All.
All Procurement Actions.......  Contract               All.............  For all contract       If increases
                                 Modifications and                        awards approved        value of
                                 Change Orders.                           previously if          Contract by 10%
                                                                          increases value of     or more.
                                                                          Contract by 10% or
                                                                          more, or raises a
                                                                          contract which did
                                                                          not require approval
                                                                          above an approval
                                                                          threshold or if
                                                                          extends Contract
                                                                          original term by 25%
                                                                          or more without
                                                                          value increase.
----------------------------------------------------------------------------------------------------------------


                              Review of Procurement Decisions--Consultant Services
----------------------------------------------------------------------------------------------------------------
                                                             Level of review  (thresholds expressed in US$)
                                                      ----------------------------------------------------------
   Procurement procedure or            Decision           MCA-Namibia
            method                                        Director of    Governing Body of MCA-        MCC
                                                          Procurement           Namibia
----------------------------------------------------------------------------------------------------------------
                                Procurement Plans....  All.............  All..................  All.
                                Amendments to          All.............  Substantial Deviation  All.
                                 Procurement Plans.
Quality and Cost Based          Request for            All.............  None.................  Above 500,000.
 Selection.                      Expression of
                                 Interest.
                                Technical Evaluation   All.............  None.................  Above 500,000.
                                 Panel.
                                Short list...........  All.............  None.................  Above 100,000.
                                Proposal Documents...  All.............  None.................  Above 500,000.
                                Technical Evaluation   All.............  None.................  Above 100,000.
                                 Report.
                                Proposed Award.......  All.............  None.................  Above 100,000.
                                Final Contract.......  All.............  Above 100,000........  Above 100,000.
                                Record of Bid          All.............  All..................  All.
                                 Challenges.
Quality Based Selection and     Request for            All.............  None.................  Above 500,000.
 Selection under Fixed Budget.   Expression of
                                 Interest.

[[Page 46771]]

 
                                Technical Evaluation   All.............  None.................  Above 500,000.
                                 Panel.
                                Short list...........  All.............  None.................  Above 100,000.
                                Proposal Documents...  All.............  None.................  Above 500,000.
                                Technical Evaluation   All.............  None.................  Above 100,000.
                                 Report for QBS only.
                                Proposed Award.......  All.............  Above 100,000........  Above 100,000.
                                Final Contract.......  All.............  Above 100,000........  Above 100,000.
                                Record of Bid          All.............  All..................  All.
                                 Challenges.
Least-Cost Selection..........  Request for            All.............  None.................  None.
                                 Expression of
                                 Interest.
                                Technical Evaluation   All.............  None.................  None.
                                 Panel.
                                Short list...........  All.............  None.................  Above 100,000.
                                Proposal Documents...  All.............  None.................  None.
                                Proposed Award.......  All.............  None.................  Above 100,000.
                                Final Contract.......  All.............  Above 100,000........  None.
                                Record of Bid          All.............  All..................  All.
                                 Challenges.
Selection Based on              Request for            All.............  None.................  None.
 Consultant's Qualifications.    Expression of
                                 Interest.
                                Technical Evaluation   All.............  None.................  None.
                                 Panel.
                                Short list...........  All.............  None.................  Above 50,000.
                                Standard Solicitation  All.............  None.................  None.
                                 Documents.
                                Technical Evaluation   All.............  None.................  None.
                                 Report.
                                Proposed Award.......  All.............  None.................  None.
                                Final Contract.......  All.............  Above 50,000.........  Above 50,000.
                                Record of Bid          All.............  All..................  All.
                                 Challenges.
Single-Source Selection.......  Proposed Award.......  All.............  None.................  Above 50,000.
                                Final Contract.......  All.............  Above 50,000.........  Above 50,000.
                                Record of Bid          All.............  All..................  All.
                                 Challenges.
Selection of Individual         Short list...........  All.............  None.................  Above 50,000.
 Consultants.
                                Technical Evaluation   All.............  None.................  Above 50,000.
                                 Panel.
                                Technical Evaluation   All.............  None.................  None.
                                 Report.
                                Proposed Award.......  All.............  None.................  None.
                                Final Contract.......  All.............  Above 50,000.........  Above 50,000.
                                Record of Bid          All.............  All..................  All.
                                 Challenges.
All Procurement Actions.......  Contract               All.............  For all contract       If increases
                                 Modifications and                        awards approved        value of
                                 Change Orders.                           previously if          contract by 10%
                                                                          increases value of     or more.
                                                                          contract, or raises
                                                                          a contract which did
                                                                          not require approval
                                                                          above an approval
                                                                          threshold or if
                                                                          extends contract
                                                                          original term by 25%
                                                                          or more without
                                                                          value increase.
----------------------------------------------------------------------------------------------------------------

MCA-Namibia Procurement Rules Attachment 2

Glossary of Terms

    Bid Challenge System shall have the meaning set forth in Part 5. 
---------------------------------------------------------------------------

    \55\ Within each ``procurement Procedure or Method,'' each 
separate ``Decision'' shown is an independent requirement, and all 
requisite approvals must be received for each such ``Decision'' 
before proceeding, sequentially from top to bottom, to the next 
``Decision'' requirement.
    \56\ Notwithstanding the thresholds set forth in this Attachment 
2 of these Rules with respect to the Governing Body of MCA-Namibia, 
the Governing Body may exercise its authority to review any 
procurement decision with prior notice to the principal officer of 
MCA-Namibia.
---------------------------------------------------------------------------

    Blanket Purchase Agreement or BPA shall have the meaning set forth 
in Section 1B, Par. 4.5.2.
    Consultant's Qualifications or CBS shall have the meaning set forth 
in Section 1B, Par. 3.7.
    Compact means the Millennium Challenge Compact entered into between 
the United States of America, acting through the Millennium Challenge 
Corporation, and the Republic of Namibia.
    Competitive Bidding or CB shall have the meaning set forth in 
Section 1A, Par. 1.3.
    Direct Contracting shall have the meaning set forth in Section 1A, 
Pars. 3.6 and 3.7.
    dgMarket shall have the meaning set forth in Section 1A, Par 2.7.
    Fixed Budget or FBS shall have the meaning set forth in Section 1B, 
Par. 3.5.
    Fixed Price Contract shall have the meaning set forth in Section 
1B, Par. 4.1.
    Force Account shall have the meaning set forth in Section 1A, 
Par.3.8.
    General Procurement Notice shall have the meaning set forth in 
Section 1A, Par. 2.7.
    Indefinite Delivery and Indefinite Quantity Contract or IDIQ 
Contract shall have the meaning set forth in Section 1B, Par. 4.5.1.

[[Page 46772]]

    Instructions to Consultants or ITC shall have the meaning set forth 
in Section 1B, Par. 2.11.
    Least-Cost Selection or LCS shall have the meaning set forth in 
Section 1B, Par. 3.6.
    Letter of Invitation or LOI shall have the meaning set forth in 
Section 1B, Par. 2.10.
    Limited Bidding or LB shall have the meaning set forth in Part 1A, 
Par.3.2.
    MCA-Namibia means the National Planning Commission of the Republic 
of Namibia, in its capacity as the accountable entity responsible to 
oversee, manage and implement the Program, on behalf of the Republic of 
Namibia.
    MCC means the Millennium Challenge Corporation.
    MCC Cost Principles means MCC's ``Cost Principles for Cost-
Reimbursement Contracts under MCC-Financed Grants'' and ``Cost 
Principles for Government Affiliates Involved in MCC Compact 
Implementation,'' both located on MCC's Web site at http://www.mcc.gov.
    Performance Based Procurement or Output Based Procurement shall 
have the meaning set forth in Section 1A, Par. 3.14.
    Procurement Plan shall have the meaning set forth in Section 1A, 
Par. 1.16.1.
    Procurement Performance Report shall have the meaning set forth in 
Part 2.
    Procurement Principles shall have the meaning set forth in Section 
1A, Par 1.2.1 and Section 1B, Par. 1.4.1.
    Procurement Rules or Rules shall have the meaning set forth in Part 
1, Preamble.
    Project(s) shall have the meaning set forth in Part 1, Preamble.
    Quality Based Selection or QBS shall have the meaning set forth in 
Section 1B, Pars. 3.2 thru 3.2.
    Quality Cost Based Selection or QCBS shall have the meaning set 
forth in Section 1B, Par. 1.5.
    Request for Expression of Interest or EOI shall have the meaning 
set forth in Section 1B, Par. 2.5.2.
    Request for Proposals or RFP shall have the meaning set forth in 
Section 1B, Par. 2.9.
    Single-Source Selection or SSS shall have the meaning set forth in 
Section 1B, Pars. 3.9 thru 3.13.
    Shopping shall have the meaning set forth in Section 1A, Par. 3.5.
    Specific Procurement Notice shall have the meaning set forth in 
Section 1A, Par. 2.8 and Section 1B, Par. 2.5.2.
    Standard Bidding Documents shall have the meaning set forth in Part 
3.
    Standard Proposal Documents shall have the meaning set forth in 
Part 3.
    Standard Solicitation Documents shall have the meaning set forth in 
Part 3.
    Supplemental Agreement shall have the meaning set forth in Section 
1A, Par. 3.10.
    Terms of Reference or TOR shall have the meaning set forth in 
Section 1B, Par. 2.3.
    Time-Based Contract shall have the meaning set forth in Section 1B, 
Par. 4.2.
    Two-Stage Bidding shall have the meaning set forth in Section 1A, 
Par. 2.6.
    UNDB Online shall have the meaning set forth in Section 1A, Par. 
2.7.

 [FR Doc. E8-18201 Filed 8-8-08; 8:45 am]
BILLING CODE 9211-03-P


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