Multilateral Development Banks

According to the Treasury and Commerce Departments, multilateral development banks, such as the World Bank and others, provide about $45 billion annually in loan commitments that generate business opportunities for U.S. firms. The multilateral development bank procurement process is designed to provide fair and equal opportunity for prospective bidders, taking into account economy and efficiency. Yet some U.S. businesses have been concerned about how the process is implemented and what the U.S. government is doing to promote U.S. exports through procurements funded by the banks. This report (1) identifies and companies the multilateral development bank market share held by U.S. firms and their major competitors, (2) describes obstacles that U.S. businesses may face in competing for bank projects and the services that the U.S. government provides to help U.S. businesses overcome the barriers, and (3) describes the Treasury Department's efforts to help ensure fair and open procurements for projects that the banks finance.

GAO found that: (1) from 1989 to 1994, U.S. firms were the largest single source of goods and services for MDB-financed projects; (2) the U.S. share of MDB procurements cannot be precisely determined due to data limitations; (3) U.S. MDB market shares vary by bank and by procurement categories and appear to parallel U.S. firms' ranking in overall exports to World Bank developing countries; (4) U.S. firms may have decreased MDB market shares in the future as developing countries become more competitive; (5) U.S. firms competing for MDB projects face certain obstacles including the lack of timely and specific project information, the cost of marketing products in the borrowing countries, their unfamiliarity with MDB competition processes, and the perception that MDB procurement processes are noncompetitive; (6) the Department of Commerce helps U.S. firms by providing information on MDB projects and outreach seminars on MDB opportunities and the process for bidding on MDB contracts; (7) the effect of Commerce's services on U.S. firms' bidding rates in the MDB market is unclear because Commerce has not formally evaluated its MDB services; and (8) Treasury has encouraged MDB to strengthen their procurement processes for MDB-funded projects and improve bank compliance with MDB procurement guidelines to ensure fair and more open competition, and to promote borrowing countries' use of standard bidding documents and wider dissemination of bidding opportunities.