BID CHALLENGE SYSTEM

MILLENNIUM CHALLENGE ACCOUNT NAMIBIA

(MCA NAMIBIA)

7 October 2009
 TABLE OF CONTENTS

DEFINITIONS... …………………………………………………………………………………………………………….…3
PREAMBLE ........................................................................................................................... 3
Section 1 – Scope of Application ........................................................................................ 4
Section 2 – MCA-Namibia Review Panel............................................................................. 4
Section 3 – “Standstill” Period ............................................................................................ 4
Section 4 – Filing a Claim .................................................................................................... 4
Section 5 – Suspension of Procurement Proceedings ........................................................ 5
Section 6 – Decision of the Review Panel ........................................................................... 5
Section 7 – Appeal of the Review Panel’s Decision ............................................................ 6
Section 8 – The Independent Appeals Panel ..................................................................... 7
Section 9 – Reporting to MCC ............................................................................................ 9
Section 10 – Language Requirement .................................................................................. 9

AGO ver. 1.1

 Bid Challenge System MCA-Namibia

DEFINITIONS:

“Bidder” means any Consultant, Contractor or Supplier participating in the

procurement process to provide services, works or goods in furtherance
of the Compact.

“Bidding Documents” means any solicitation document for the procurement of services, works
or goods in furtherance of the Compact.

“Bid Challenge” means the execution of the right of all Bidders to seek review of
procurement actions and decisions.

“Claim” means the written allegation made by a Bidder who believe that they
have suffered or may suffer loss or injury due to a breach of a duty by
MCA-Namibia in the conduct of a procurement proceeding.

“Claimant” means the Bidder who challenges the bidding process because they
allege to have suffered or may suffer loss or injury due to a breach of a
duty by MCA-Namibia in the conduct of a procurement proceeding.

“Independent Appeals
Panel” means the second and final review level. A Claimant may submit a
Notice of Appeal to this Panel which is independent of MCA-Namibia.

“MCA-Namibia” means the Millennium Challenge Account – Namibia, an organizational

unit established within the National Planning Commission by the
Government of the Republic of Namibia on March 18, 2008 pursuant to
Cabinet Decision No. 5th/18.03.08/004.

“Notice of Appeal” means the notification submitted to MCA-Namibia as a result of the

Claimant’s disagreement or dissatisfaction with the decision of the
Review Panel.

“Review Panel” means the first level of bid challenge review by MCA-Namibia.

“Standstill Period” means the period between the notification of the intent to award and
the actual signing of the contract.

PREAMBLE
Whereas, the United States of America, acting through the Millennium Challenge Corporation
(“MCC”), and the Republic of Namibia executed the Millennium Challenge Compact (as amended
the “Compact”) on July 28, 2008, that sets forth the general terms and conditions on which MCC will
provide a five-year grant of up to US$ 304,477,816 (“MCC Funding”) to the Government of the
Republic of Namibia for a Millennium Challenge Account program to advance economic growth and
reduce poverty in Namibia (the “Program”);

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Whereas, MCA-Namibia is obliged to establish a Bid Challenge System (the “Bid Challenge System”
or “BCS”) that provides Bidders the ability to seek review of procurement actions and decisions;

Now therefore, in consideration of the covenants contained in the Compact and Supplemental
Agreements, MCA-Namibia has established the rules set forth in this Bid Challenge System (the
“Rules”) and agrees that challenges in relation to the bidding process shall be referred to the BCS in
accordance with these Rules, and these Rules shall be incorporated by reference in all bidding
documents lodged by Bidders.

Capitalized terms used but not defined herein shall have the meaning given to them in the Compact.

SECTION 1 – Scope of Application

1.1 These Rules shall govern the BCS, except that where any of these Rules are in conflict with
provisions of the Compact (including the MCA-Namibia Procurement Rules) or the Program
Implementation Agreement, the provisions of such documents shall prevail.

1.3 MCA-Namibia may modify these Rules in writing from time to time. For the avoidance of
doubt, the Rules posted on the MCA-Namibia web site at the time a Claim is first filed
initiating a Bid Challenge shall govern with respect to such Bid Challenge even if MCA-
Namibia subsequently modifies the Rules.

SECTION 2 – MCA-Namibia Review Panel

2.1 MCA-Namibia shall establish a Panel (“Review Panel”) to review and decide on Claims
lodged by Bidders on a procurement process. The Review Panel shall consist of the following
four members: (1) MCA-Namibia Deputy Chief Executive Officer: Operations, (2) MCA-
Namibia Procurement Director, (3) MCA-Namibia Legal Officer, and (4) a representative of
the MCA-Namibia Procurement Agent.

SECTION 3 – “Standstill” Period

3.1 This BCS allows contract award decisions to be challenged before a contract is signed. The
Standstill Period is intended to allow a Bidder a five (5) working day period between the
award notification and the signing of the contract to submit a Claim if they have suffered or
may suffer loss or injury due to a breach of a duty by MCA-Namibia in the conduct of
procurement proceedings.

3.2 Contract-signing shall only take place at the end of the Standstill Period unless the
procurement proceedings are suspended in accordance with Section 5.

SECTION 4 – Filing a Claim

4.1 Any Bidder who has suffered, or reasonably believes it has suffered, loss or injury due to a
breach of MCA-Namibia’s duties under the MCA-Namibia Procurement Rules in the course
of a procurement may file a Claim, subject to the following:

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(a) A Claim must be filed during the Standstill Period; or

(b) Any Claim filed after the Standstill Period may be considered under this Bid Challenge
System, but the procurement proceeding disputed under that Claim shall not be
suspended under Section 5.

4.2 Each Claim and its filing shall be in English and in writing, which may be in electronic form,
and shall:
(i) include the name, address, telephone and facsimile numbers of the Claimant;
(ii) identify the procurement bid in relation to which the Claim arises;
(iii) describe the nature of the Claim and the facts supporting such Claim, including the MCA-
Namibia Procurement Rules which were violated, and the timeliness of the Claim;
(iv) provide justification for the Claim; and
(v) state which steps in the procurement process (if any) the Claimant is requesting to be
redone and what other remedies are sought by the Claimant.

4.3 Only a lead Bidder may submit a Claim under these Rules. No Claim may be submitted by a
subcontractor or sub-consultant.

4.4 A Bidder shall not pay any fees or charges for the submission of a Claim to MCA-Namibia and
the review and adoption of a decision by MCA-Namibia.

4.5 A Claim must be sent to MCA-Namibia at the following address:

Millennium Challenge Account-Namibia

Atlas House, 6th Floor
117 Sam Nuyoma Drive
Windhoek, Namibia
Attention: Chief Executive Officer

Facsimile: +264 61 410415

E-mail: info@mcanamibia.org

4.6 Within two (2) working days of receipt thereof the Chief Executive Officer shall forward a
Claim to each member of the Review Panel.

4.7 The following shall not be subject to a Claim:

(i) The selection of a method of procurement;

(ii) The choice of selection procedure, or
(iii) The decision to reject all Bids, proposals, offers or quotations.

4.8 The Review Panel shall review a Claim and make a decision within five (5) working days of
the receipt of the Claim. A Claim shall be rejected if it fails to conform to the submission
requirements of this Section 4.

SECTION 5 – Suspension of Procurement Proceedings

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5.1 After the Review Panel receives a Claim that complies with the requirements of Section 4,
the Review Panel shall suspend the disputed procurement proceeding until the Review Panel
has issued a decision on the Claim in accordance with these Rules, unless the Review Panel
considers that:

(i) the Claim is frivolous or unjustified;

(ii) the Claimant will not sustain irreparable harm;
(iii) MCA-Namibia may sustain disproportionately greater damage by such suspension,
compared to the damage to be possibly sustained by the Claimant; or
(iv) suspension of the proceeding is against the public interest.

SECTION 6 – Decision of the Review Panel

6.1 The Review Panel shall issue a written decision agreed to by a majority of the members on
any Claim filed in accordance with Section 4 within five (5) working days of receipt of the
Claim, which period may be extended at the discretion of the Review Panel for an additional
five (5) working days by written notice from the Review Panel to the Claimant. The Review
Panel shall deliver copies of the written decision to the MCA-Namibia Procurement Agent
and the Claimant within 24 hours of rendering a written decision. If the Claim is rejected the
Review Panel’s decision shall state the justification for non-acceptance; likewise, if the Claim
is considered valid, the decision shall state how the Claim shall be remedied.

6.2 In reaching its decision the Review Panel, at its discretion, may seek assistance from subject-
matter experts. When such experts are consulted the Review Panel shall use its best efforts
to appoint experts who are best qualified and shall ensure that there is no actual or
perceived conflict of interest on the part of such experts in the outcome of the Claim.

6.3 MCA-Namibia shall not award a contract with respect to a procurement proceeding which is
subject to a Claim until such time as the Claim is rejected or remedied, either through a
decision by the Review Panel or the Independent Appeals Panel, except as indicated in
Section 5.

6.4 Where MCA-Namibia decides to continue the procurement process the justification and the
decision to continue shall be provided in writing to the Claimant at least five (5) working
days after the time the decision comes into force. The decision shall be made available
publicly through the media and on the MCA-Namibia website.

6.5 Any decision issued by the Review Panel shall state the grounds and justification for the
decision and, if the Review Panel upholds the Claim in whole or in part, which steps in the
procurement process shall be redone.

6.6 The decision of the Review Panel shall be final, binding and enforceable in any court with
jurisdiction unless the Claimant submits a Notice of Appeal (in accordance with Section 7) in
accordance with these Rules.

SECTION 7 – Appeal of Review Panel’s Decision

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7.1 The Claimant shall have the right to appeal the decision of the Review Panel to its Claim filed
under Section 4.1(a) to the Independent Appeals Panel if:

(i) the Review Panel failed to make a final decision within the timeframe stipulated in these
Rules, or
(ii) the Claimant is not satisfied with the decision of the Review Panel.

Otherwise, a Claimant shall not have the right to appeal the decision of the Review Panel
under this Bid Challenge System.

7.2 The Claimant may submit a Notice of Appeal, within three (3) working days of receipt of the
decision of the Review Panel to MCA-Namibia at the following address:

Millennium Challenge Account-Namibia

Atlas House, 6th Floor
117 Sam Nuyoma Drive
Windhoek, Namibia
Attention: Chief Executive Officer

Facsimile: +264 61 410415

E-mail: info@mcanamibia.org

7.3 The MCA-Namibia Chief Executive Officer shall send the Notice of Appeal to the
Independent Appeals Panel which shall comprise three independent experts who shall be
selected in the following manner:

(i) the Claimant and MCA-Namibia shall each select an expert, and
(ii) both experts shall select a third expert. Where the two experts do not agree on the choice of
the third expert, the MCA-Namibia Chief Executive Officer shall nominate the third expert.

7.4 The Independent Appeals Panel shall decide on the appeal within fifteen (15) working days
of the submission of the Notice of Appeal.

7.5 The Notice of Appeal shall be filed in English and shall include the following:

(i) name and address of the Claimant;

(ii) reference to the procurement bid in relation to which the Claim arises;
(iii) general nature of the Claim; and
(iv) relief or remedy sought.

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7.6 If the Notice of Appeal does not conform to these submission requirements, the Notice of
Appeal shall be rejected.

SECTION 8 – The Independent Appeals Panel

8.1 Independent Appeals Panel members shall be composed of qualified professionals. In no

event shall any member have an interest in the outcome of the procurement or have been
involved in the procurement process. The members of the Independent Appeals Panel will
be paid a stipend for the time served on the panel. The reasonable costs of the appeal
(including the stipend of the panelists, but excluding any legal and travel costs of the Parties)
shall be covered by the MCA-Namibia and the Claimant in the proportion that the
Independent Appeals Panel determines reasonable under the circumstances. The costs of
the appeal shall be reasonable and consistent for similar proceedings in Namibia. MCA-
Namibia shall provide the Claimant the estimated costs of the appeal at the time of the
decision; provided that such estimate will not have any binding effect on the actual cost
determined by the Independent Appeals Panel.

8.2 The Independent Appeals Panel shall be convoked no later than five (5) calendar days from
the date the Independent Appeals Panel has been accepted by both MCA-Namibia and the
Claimant. The timely submission of the Notice of Appeal temporarily suspends the pertinent
procurement proceeding and contains a declaration which, if proven, demonstrates that the
Claimant will suffer irreparable injury in the absence of a suspension of the procurement
proceeding, unless MCA-Namibia has made a determination to continue with a procurement
proceeding pursuant to any of the conditions set forth under Section 5.1(i)-(iv).

8.3 In the event that the Independent Appeals Panel determines that the procurement should
be suspended, the Independent Appeals Panel shall inform all Bidders through the MCA-
Namibia Procurement Agent of the suspension of the procurement proceeding and take
such other measures as it deems necessary to maintain the integrity of the procurement
process pending completion of the appeal.

8.4 The Independent Appeals Panel shall consider the facts of the Claim and all written
representations made by the MCA-Namibia and the Claimant to determine whether or not
the procurement was conducted in accordance with the bidding documents and the MCA-
Namibia Procurement Rules.

8.5 The Independent Appeals Panel, at any time following receipt of a Notice of Appeal, may
request, in writing, additional information relating to the relevant procurement, and must
include the deadline within which the Claimant or MCA-Namibia shall provide such
information.

8.6 MCA-Namibia and the Claimant, as the case may be, must furnish the information requested
by the Independent Appeals Panel; provided that either Claimant or MCA-Namibia may
refuse to disclose certain information if disclosure would be contrary to the public interest;
or would prejudice the legitimate commercial interests or fair competition between Bidders;
or would be in breach of a legal professional privilege or a confidentiality agreement binding
on Claimant or MCA-Namibia. Any refusal to disclose information shall be justified in writing.

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8.7 If the Independent Appeals Panel considers that the appeal cannot continue without the
requested information, it may decide to terminate the appeal and declare the Notice of
Appeal invalid.

8.8 If any confidential information of the Claimant is disclosed by the Claimant to the
Independent Appeals Panel at the Independent Appeals Panel’s request, the Claimant may
request that such information only be made available to members of the Independent
Appeals Panel. In such case, a statement is to be provided by the Claimant identifying the
Claimant’s confidential information, together with a copy of the confidential information
(which is to be provided to the Independent Appeals Panel only; the address will be given to
the Claimant at the time of the appeal) and one copy of the documents where the
confidential information has been deleted.

8.9 The Independent Appeals Panel may ask the Claimant and MCA-Namibia to appear in person
and present their appeal or justify their decision before the Independent Appeals Panel
(such proceedings shall take place in Windhoek, Namibia). The Independent Appeals Panel
may address the Claimant or MCA-Namibia by asking questions. The MCA-Namibia
Procurement Agent may also be called for questioning at the discretion of the Independent
Appeals Panel.

8.10 After hearing and reviewing all documents and statements, the Independent Appeals Panel
will discuss the facts and merits of the appeal.

8.11 If the Independent Appeals Panel decides to compensate the Claimant for loss or damage,
such compensation shall be limited to the cost of preparation of the bid challenge. The
Claimant will not be compensated for anticipated profits.

8.12 The Independent Appeals Panel shall make a written report of its opinions or
recommendations and issue a statement describing the basis of the opinion or
recommendation to be undertaken. The Independent Appeals Panel shall issue this decision
within ten (10) working days from the date the Independent Appeals Panel convened for the
first time, stating the reasons for the decision and the remedies granted, if any. Further, the
Independent Appeals Panel will determine the distribution of the costs between MCA-
Namibia and the Claimant.

8.13 If the Independent Appeals Panel finds the Claim valid (in whole or in part), it may grant one
or more of the following remedies:

(i) Require MCA-Namibia to issue the relief (in whole or in part) requested by the Claimant;

(ii) Determine that MCA-Namibia was at fault (but not issue the relief), and require a corrective
action;

(iii) Annul, in whole or in part, the procurement proceedings, and require MCA-Namibia to take
specific action that the Independent Appeals Panel may consider appropriate within the
framework of the MCA-Namibia Procurement Rules;

(iv) Decide on cost distribution of the proceedings, and require MCA-Namibia to pay
compensation for any reasonable costs incurred by the Claimant in connection with the
procurement proceedings; provided that such reasonable costs do not include lost profit,

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travel costs, or punitive damages because of non-acceptance of a bid of the Claimant;

and/or

(v) Require that the procurement proceedings be terminated, and for MCA-Namibia to institute
new procurement proceedings.

8.14 In the event that the Claim is considered invalid the Independent Appeals Panel shall render
its decision in writing.

8.15 The decision of the Independent Appeals Panel shall be notified in writing (which may be by
email or fax) by the MCA-Namibia Procurement Agent to the Claimant within two (2)
working days of the decision. The decision of the Independent Appeals Panel shall be carried
out by MCA-Namibia within fifteen (15) working days.

8.16 The decision of the Independent Appeals Panel is final, binding and enforceable and shall be
published on the MCA-Namibia website.

SECTION 9 – Reporting to MCC

9.1 The Claimant shall have no right to appeal to MCC regarding decisions resulting from these
Rules.

9.2 Within three (3) days after the decision, MCA-Namibia shall submit to MCC a report of the
handling and disposition of the Bid Challenge.

9.3 MCC, at its sole discretion, has the right to be an observer to all bid challenge proceedings
but does not have the obligation to participate in any bid challenge proceeding, in any
capacity. The acceptance by MCC of the right to be an observer to the bid challenge shall
not constitute consent to the jurisdiction of the courts or any other body of Namibia or any
other jurisdiction.

SECTION 10 – Language Requirement

All claims, statements, notices, and other documents related to these Rules shall be written or
translated to English.

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