Liberia Utility Management Option Implementation Planning
Millennium Challenge Corporation, MCC | Published January 7, 2016 - Deadline January 14, 2016
This announcement is a notice of intent to issue a sole source contract under the requirements of FAR Part 15 and FAR 6.302-1," Other Than Full and Open Competition - one responsible source".
The Millennium Challenge Corporation (MCC) intends to issue a sole source, non-commercial for a contractor/consultant to provide expert services to MCC and the Government of Liberia (GoL) to develop an implementation plan for the Liberia Electric Corporations' (LEC) management option. This implementation plan is follow-on work to an analysis of LEC management options presented to the GoL in the Fall of 2015 by McKinsey & Company and this work is intended to support the GoL in meeting the milestones for long term management of LEC laid out in the MCC Compact.
This contract is being awarded under the authority of 41 U.S.C. 253(c) (1), as implemented by FAR 6.302-1 - "Only one responsible source" as the only viable course of action that provides uninterrupted continuation of critical services.
This contract will be awarded to McKinsey & Company. The period of performance of the contract will be for a period of four months.
Pursuant to 41 U.S.C. 253 © (1), FAR 6.302-1, only one Responsible Source and No Other Supplies or Services will Satisfy Agency Requirements in this case because McKinsey has completed the management options study, and they are uniquely qualified for this follow-on work in two ways. First, they have completed the foundational work for this assignment by doing the management options study and have all of the contextual information regarding the state of LEC, stakeholders and the challenges in the sector and they have developed relationships with key players. Second, they bring excellent technical expertise and resources for this assignment, as demonstrated during the management options study. Specifically, in the analysis of potential private sector options, they have demonstrated deep experience in analysis of utilities and identifying and structuring private sector participation for management of utilities.
The McKinsey contract with USAID was competed but as McKinsey is uniquely qualified for this work, no additional offers were solicited.
The McKinsey contract with USAID was competed but as McKinsey is uniquely qualified for this work, no additional offers were solicited
DESCRIPTIONS / SPECIFICATIONS / STATEMENT OF WORK
LIBERIA UTILITY MANAGEMENT OPTION - IMPLEMENTATION PLANNING
The Government of Liberia (GoL), requires consultancy services to develop an implementation plan for a selected management option for the Liberia Electric Corporations' (LEC). This implementation plan is follow-on work to an analysis of LEC management options presented to the GoL in the Fall of 2015 by McKinsey & Company and this work is intended to support the GoL in meeting the milestones for long term management of LEC laid out in the MCC Compact.
In 2003, after the end of a 14-year conflict, infrastructure in Liberia was largely destroyed, and the electricity sector in particular required significant investment. The Mount Coffee Hydropower Plant, the main source of electricity generation, and the country's distribution network were looted and the utility lacked capacity to manage the reconstruction. Since that time, emergency power programs have supported the installation of diesel generators which provide 22MW of capacity. However, this generation is both insufficient to meet demand and very expensive. To bring on additional capacity, with the support of international donors including MCC, Mt. Coffee is currently being rehabilitated, which will contribute an additional 88MW to the system in the wet season, and Heavy Fuel Oil plants are under construction to contribute an additional 48MW.
To support capacity at LEC, the GoL, with assistance from international partners, tendered a management contract to provide additional technical and managerial capacity and also to provide specific project management assistance for the reconstruction of Mt. Coffee. This management contract was awarded to Manitoba Hydro International (MHI) in April 2010. The contract period was originally for five years, but was later extended to seven years, in particular to provide additional support for the reconstruction of Mt. Coffee.
The current funding for the management support portion of the MHI contract ends in December 2016, although a decision will need to be made about whether and how to extend the project management support for the reconstruction of Mt. Coffee, which is not expected to be fully complete until the end of 2017.
During the summer and fall of 2015 McKinsey and Company conducted an assessment of LEC management options for GoL review, and identified several potential options for long-term management of LEC. This options study was in preparation for a series of decision points laid out in the MCC Compact regarding the GoL's decision for long term LEC management that are specified in the Compact as follows:
• By February 1, 2016, and prior to any Disbursement of MCC Funding under the Energy Project on or after such date, the Government must have communicated in writing to MCC, a selected management arrangement for LEC, and MCC and the Government will have agreed on such arrangement.
• By March 15, 2016, and prior to any Disbursement of MCC Funding under the Energy Project on or after such date the Government must have submitted to MCC a management implementation plan approved and adopted by the Board of Directors of LEC with a schedule of milestones for the implementation of the selected management arrangement, including any required interim arrangement for the management of LEC prior to the implementation of the selected management arrangement, in form and substance satisfactory to MCC.
• Prior to each Disbursement of MCC Funding under the Energy Project following the adoption of the management implementation plan, the Government must have submitted evidence, in form and substance satisfactory to MCC, that LEC is implementing such plan and is in compliance with the requirements of the plan.
The Contractor shall develop an implementation plan for the management option selected by the GoL, for use by the GoL and MCC during the course of the Compact. The consultant shall also develop the terms of reference for follow-on work either by a transaction advisor in the case of a private sector participation option for management of LEC or for technical assistance in the case of a publicly managed option.
The contractor shall perform the following tasks:
Task 1: Mobilization Plan and Workplan
The consultant will provide a Mobilization Plan to include, at a minimum, the resources required for mobilizing the required team and an associated timeline. A workplan, to include a schedule and description of the tasks to be completed will also be provided.
Task 2: Development of Implementation Plan
Based on GoL selection of their preferred approach, the consultant should develop an implementation plan for the selected strategy. The plan deliverable will include a narrative explaining each of the areas below, a workplan laid out according to quarters of the MCC Compact, financial model, and relevant Terms of Reference for follow-on work. This plan will cover not just the implementation of the long-term management option, but will also account for the short-term measures that are required in order to improve performance at LEC and prepare it for the long-term selected option.
This plan will include the following analysis depending on the option selected:
• Key Structuring Principles:
1. Public Management Option: In the case of a public management option, the consultant will lay out a clear implementation plan for GoL capacity reinforcement. This will include (a) identification of the areas of weakness to be supported by a consultant (b) the key positions at LEC that would be supported (c) term of the consultancy and, (d) expected outcomes
2. Management Contract: In the case of a proposed management contract, the consultant will identify: (a) relevant Key Performance Indicators (KPIs); b) incentive package for the private operator; (c) responsibilities of the parties and delegation of power of the private operator; (d) operating framework between the GoL, LEC and any outside operators; (e reporting requirements; and (e) term of the contract.
3. Concession Structuring Principles: In the case of a concession, identify: (a) investment obligations; (b) performance improvements and related indicators; and (c) term of the concession/lease.
4. Restructuring: In the case of any restructuring of the electricity sector, the consultant will lay out a) a clear statement of responsibilities of each institution in the sector and (b) workplan and timeline for the restructuring
• Financial Analysis: The consultant will prepare financial models to structure the arrangement, define proper performance technical and financial indicators, and ensure that the proposal being developed is commercially viable and satisfies the GoL's objective of improving access to energy, near term management of LEC as well as longer-term capacity at LEC.
• Market Analysis: The consultant will also conduct market consultations, in partnership with the GoL, where appropriate, to determine market interest and the conditions that would need to be in place to enable the management arrangement in the electricity sector and to understand market requirements.
• Procurement Approach: For all options, but particularly in the case of a management contract or concession, the consultant will specify the recommended procurement approach to maximize the chances of success.
• Indicator Analysis: The consultant will recommend key performance indicators that can be used to monitor the health and performance of LEC. These recommendations will draw on the findings the original options analysis with other indicators the consultant might identify as relevant, and discuss each indicator's strengths and weakness with respect to monitoring LEC's performance.
Task 3: GoL and Stakeholder Workshops for Plan Finalization
Upon development of the draft implementation plan, hold workshops with the LEC Board, MLME and subsequently interested donors in the sector to confirm the feasibility of the approach laid out. Input from these workshops will then be incorporated into the draft plan and then finalized.
E. DELIVERABLE SCHEDULE
Outlined below is an indicative timetable, assuming a work period of approximately four (4) months beginning in January 2016 for the Development of the Implementation Plan.
Deliverable Due Date
Task 1: Mobilization Plan and Workplan End of January 2016
Task 2: Submission of Draft Implementation Plan and Financial Models End of February 2016
Task 3: Workshop on Implementation Plan and Financial Models for Selected Option End of February 2016
Task 3: Finalization of Implementation Plan Report and Financial Models including Presentation to GoL and MCC Early to mid-March 2016
All reports shall be submitted in both printed and electronic form in English and in a format acceptable to the GoL. Electronic versions will be prepared in Microsoft Office or a compatible software application; the financial models will be provided in MS Excel.
Deliverable will include Direct Labor and Other Direct Costs.
F. PERIOD OF PERFORMANCE
The period of performance for this consultancy (including the optional tasks) shall last up to four months from the date of execution of the contract. During this time, travel to Liberia will be required (cost of which is covered under the payments indicated in Section F above).
G. PERFORMANCE LOCATION
The Consultant shall perform the services and tasks generally identified above at the facilities of the consultant and relevant field offices, or in Liberia as agreed and directed by the COR or his or her designee.
H. CONSULTANT TEAM KEY PERSONNEL
To conduct this assignment, the following expertise is requested. Experience in Africa and in environments similar to Liberia are preferred.
• PPP transactions specialist(s)
• Utility sector expert
• Utility operations specialist
• Utility financial specialist
Contracting Office Address:
Millennium Challenge Corporation
Contracts and Grants Management Division
1099 Fourteenth Street, Suite 700
Washington, DC 20005
This notice of intent is not a request for competitive proposals. However, responses should be emailed to Ms. Merle Phillips, Senior Contract Specialist, at email@example.com and received no later than 4 PM EST, January 14, 2016. The deadline for questions is at 4 PM EST, Tuesday January 12, 2016. MCC does not guarantee responses to questions received after the January 12, 2016 deadline.