To describe any obstacles U.S. firms may face when competing for MDB projects and the services that the U.S. government provides for them, we interviewed officials from the Treasury and Commerce, TDA, the Agency for International Development (AID), the Small Business Administration, and the U.S. Export-Import Bank. To describe Treasury’s efforts to help ensure fair and open MDB procurement processes, we obtained and analyzed information on MDB procurement guidelines and proposed revisions, Treasury’s review of MDB procurement policies, and MDBs’ internal management studies that highlighted procurement concerns. U.S. Firms’ Share of MDB Procurement Varied by Bank

As shown in figure 1, the market share of U.S. firms relative to other industrialized countries varied by MDB. The relative ranking of U.S. firms in each MDB appears similar to their ranking in overall exports to World Bank developing countries.Compared to their major competitors, U.S. firms appeared to be as competitive in the MDB market as they were in traditional world exports. Increases in developing countries’ share of the MDB market may reduce the share of the MDB market for U.S. firms and other industrialized countries. Other obstacles U.S. government officials noted were businesses’ unfamiliarity with the process for competing for MDB contracts and the perception that the MDB procurement process is not open and competitive. To promote the export of U.S. goods and services, Commerce staff conduct a variety of activities, such as organizing and participating in outreach programs in the United States and overseas to increase U.S. firms’ awareness of the MDB market; hosting seminars at MDBs for U.S. firms to discuss their products with MDB staff; disseminating information on MDB projects and the procurement process electronically on the National Trade Data Bank (NTDB) and the Economic Bulletin Board; counseling U.S. firms on how to bid on MDB projects; and assisting, in cooperation with the U.S. executive directors’ offices and the Treasury, as appropriate, U.S. firms in addressing procurement problems and bid evaluation disputes. Commerce has not formally evaluated how its services affect U.S. participation rates at MDBs. It has required borrowers to use standard bidding documents for international competitive bidding.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed business opportunities for U.S. firms at multilateral development banks (MDB), focusing on: (1) the MDB market share held by U.S. firms and their major competitors; (2) obstacles U.S. businesses may face in competing for MDB projects; (3) services the U.S. government provides to help U.S. firms overcome competition obstacles; (4) the Department of the Treasury's efforts to ensure fair and open procurement processes for MDB-financed projects.

What GAO Found

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.