Detailed Information on the
Overseas Private Investment Corporation - Insurance Assessment

Monitoring the program's implementation of its 'additionality' policy to ensure the policy's effectiveness is not being undermined by the discretion given to clients.

Improve support of integrated business processes and internal controls by replacing legacy systems / technology.

Improving coordination and cooperation between the program and other government agencies.

Monitoring the program's implementation of its 'additionality' policy to ensure the policy's effectiveness is not being undermined by the discretion given to clients.

Tying resource allocation to expected performance.

Measure: Development Matrix Score

Explanation:OPIC has established two analytical tools for measuring the contribution of OPIC-supported projects to economic development.- a Development Matrix for evaluating non-financial projects and a Financial Development Matrix for evaluating financial projects. The Development Matrix assesses the contribution of projects to economic development in 26 areas on the basis of factual information evaluated against established benchmarks. Each project is scored with respect to each parameter, and management uses the overall score to determine whether OPIC should support a project. Each project is scored during the evaluation phase, and in the course of monitoring of implemented projects. The Financial Matrix mirrors the Development Matrix for financial projects by following a similar methodology, but uses 11 indicators more directly relevant to the financial sector. See also Exhibits 5 and 6 of OPIC's Annual Policy Report at http://www.opic.gov/about/reports/documents/fy2007_annual_policy_report.pdf The Development Matrix consists of three parts: core indicators, supplemental indicators, and an adjustment factor for the GNP level of the host country. Each project is given an overall development score on the basis of points awarded for each of these indicators, using objective criteria and factual data spelled out in a directive issued by the Office of Investment Policy. The core indicators cover job creation, training, local procurement, corporate social responsibility and equal employment policy. The supplemental indicators cover job complexity, training abroad, local ownership stake, benefits to local small and medium enterprises, leveraging of other investments and development institutions, public-private partnerships, benefits for women in the workplace, benefits to poor or rural regions, environmental preservation, contribution to developmental infrastructure improvements, projects resulting from or causing government reform, export earnings, economic diversification, fiscal impact, introduction of new product technologies or innovative management practices, marketing and distribution expertise, lower local prices and introduction of new products or services. The financial services matrix is to applied to every proposed project in 11 key areas across three broad categories that objectively quantify its expected contribution to host-country development. Category I covers financial instrument innovation or augmentation, multiplier/spillover effects, corporate governance, and capital mobilization and complementarity - four highly-weighted impacts that should be demonstrated by any project, regardless of sector or the level of economic development within the host country. Category II covers six additional development indicators within such broad areas as sustainability, economic diversification, human capacity building (job creation and training), social effects, macroeconomic and institutional effects, and technology/knowledge transfer. The degree to which projects demonstrate these additional developmental benefits depends significantly on the features of a given project. Category III adjusts for the host country's per capita GNP, reflecting both OPIC's priority to steer investment into the poorest countries and the reality that nations most in need often lack the capacity to support more developmentally sophisticated investments.

Measure: Percentage of on-going OPIC projects monitored for compliance with OPIC's U.S. effects, environmental, and worker rights standards. (Corporate-wide average)

Explanation:OPIC projects are monitored for compliance with OPIC's U.S. effects, environmental, and worker rights standards. Projects due for monitoring have been in operation for at least one year prior to monitoring, and are not in financial distress.

Measure: Additionality (Corporate-wide average)

Explanation:Additionality measures the extent to which OPIC support is necessary to persuade a private investor to pursue an investment that meets OPIC's development objectives. OPIC uses a two part model that utilizes both country and project specific information and rigorous objective criteria to assess additionality. The model uses benchmarks based on published data for each factor and a numeric scoring system to establish an objective measure of additionality. The first part of the model evaluates country and investor-specific factors. Each country has a country score based on five indicators that measure overall country risk, financial sector development, business regulation and market environment, host country institutional quality, and macroeconomic strength.- , factors likely to influence foreign private investors. Investors are evaluated on the basis of their financial strength. The second part of the model assesses project-specific factors such as project size and tenor, availability of private equity, innovation, whether the location is rural or impoverished, and social and financial infrastructure. An OPIC directive describes each of the additionality factors, data sources, and scoring used by analysts in the Office of Investment Policy to score projects.

Is the program purpose clear?

Explanation: OPIC's authorizing language and mission statement clearly state the mission of the OPIC Insurance Program is to "mobilize and facilitate U.S. private capital participation in the economic and social development of less developed countries and areas of the world as well as countries which are transitioning from non-market to market economies." OPIC has made more consistent public statements about its development mission, such as by updating its website to highlight the agency's development focus.

Evidence: Section 231 of the Foreign Assistance Act of 1961 (P.L. 87-195), mission statement found in GPRA documents, Congressional testimony, public statements, and OPIC brochures and website.

Does the program address a specific and existing problem, interest, or need?

Explanation: OPIC's Insurance Program strives to provide insurance to projects only if there is insufficient capacity in the private political risk insurance market. For example, private insurers generally do not extend political risk coverage to small business.

Evidence: OPIC's Application for Political Risk Insurance requires applicants to certify that they have first sought insurance from the private market. Applicants are asked to explain why terms, conditions, rates or tenor are unacceptable. OPIC's participation in the project depends on the answers provided in the application. (See Question 2.5 below.)

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: While no other federal, state or local agency provides political risk insurance, the Multilateral Insurance Guaranty Agency (MIGA), an arm of the World Bank, does provide essentially the same coverages as OPIC provides. However, MIGA provides insurance to companies from all World Bank member countries, while OPIC insures investment connected with the United States. While private companies also provide political risk insurance, OPIC's Insurance Program has instituted meaningful procedures to make it more likely that it complements the private sector, rather than competes with or displaces private sector insurance. For example, OPIC ensures that private insurers in the United States are given an opportunity to insure or participate in virtually every transaction that comes to OPIC. (See also Question 2.5) Private insurance is not available in many countries where OPIC operates.

Evidence: OPIC Private Insurer Cooperation Program and the OPIC Application for Political Risk Insurance outline the procedures for ensuring OPIC does not compete with the private sector.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: OPIC's Insurance Program operates under standards that are consistent with underwriting standards in the private political risk insurance market. OPIC's Non-Honoring of a Sovereign Guaranty is covered by the Federal Credit Reform Act of 1990 and managed consistent with OPIC's other Credit Reform products. (See Questions 3.CR1, 3.CR2) This program also has four mechanisms which provide feedback to minimize or eliminate flaws of overlap with the private sector: First, the Private Market Advisory Group consists of insurers which provide similar products to OPIC, and of clients. This group gives OPIC direct feedback on the effectiveness of OPIC's products and how OPIC could better serve private sector clients and complement the private sector risk industry. The group also highlights areas where OPIC may be crowding out private equivalents. Secondly, OPIC's Private Insurance Cooperation program requires applicants to first seek political risk insurance from the U.S. private market. OPIC will participate in transactions alongside private market participants when OPIC's coverage complements private sector participation. Third, all proposed insurance contracts are evaluated for additionality and development impacts for their effectiveness in meeting OPIC's mission. Fourth, OPIC periodically conducts customer surveys and adjusts and adapts its programs in response to this feedback.

Evidence: PMAG meetings, Interviews with private insurers and information gained through the Berne Union confirm OPIC's underwriting standards.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: OPIC's Insurance Program provides insurance to companies that would not otherwise be able to access private sources of political risk insurance. The program is targeted to U.S. companies, large and small, that are investing in developing countries. Pursuant to OPIC's Private Insurer Cooperation Program, all applicants are required to first seek political risk insurance from the U.S. private insurance market. Depending on the availability of such insurance in the private market, OPIC will participate in a transaction to the extent OPIC's support is additional. (See issues discussed in Question 2.5). OPIC's internal documentation includes an additionality analysis that must be completed for all transactions.

Evidence: Section 231 of the Foreign Assistance Act of 1961 (P.L. 87-195), OPIC Private Insurer Cooperation Program, Additionality Checklist

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: OPIC's Insurance Program has recently established specific, quantifiable long-term goals. These goals are outlined in the agency's Strategic Plan. They are comprised of developmental targets, additionality measures, and risk management targets, a continuing Small Business focus, and increased efficiency (reduced application processing time) goals. These goals are also incorporated into the Insurance program Operating Plan.

Evidence: OPIC 2003-2008 Strategic Plan and 2003 Insurance Operating Plan.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: Since FY 2003, OPIC has worked closely with OMB to develop targets and timeframes for achieving the program's long-term performance goals. The targets and timeframes for each long-term measure under the existing strategic plan are specific and ambitious. As OPIC is nearing the end of its current strategic plan, future plans will highlight OPIC's Development Matrix as an overall guide to development impact. The Development Matrix and the monitoring and evaluation processes supporting it, is a major step towards an ex post basis for evaluating the overall development impact of OPIC's projects. OPIC's next strategic plan to be developed in FY 2007 will use OPIC's experience under this methodology to establish a new set of long run objectives.

Evidence: Insurance Operating and Annual Performance plans, OPIC 2003-2008 Strategic Plan.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The Insurance program has specific annual performance measures outlined in its Operating Plan and the agency Annual Performance Plan. These documents include developmental measures, number of small business contracts, new contracts in priority areas, measures of additionality, and efficiency measures. OPIC's Development Matrix enables OPIC to judge individual projects on their overall development impact. OPIC makes an estimate at the time that the project is evaluated and approved, and again after the project has been operational. While Matrix scores are an output when they are first made, they are an outcome after the project has been monitored and evaluated after it has become operational. As more projects which have been scored under the Development Matrix methodology reach maturity, OPIC will have the data to demonstrate the developmental outcome of its projects and to establish a metric relating anticipated development benefits to actual outcomes. The first projects that were initially scored on the basis of the Development Matrix are becoming operational and are being monitored and the results show that actual development outcomes significantly exceed anticipated benefits.

Evidence: Insurance Operating and Annual Performance Plans

Does the program have baselines and ambitious targets for its annual measures?

Explanation: OPIC has baselines for four of its performance measures. These measures include: average application processing time, number of host country jobs supported, number of monitored on-going projects that meet OPIC's U.S. effects, environment, and worker rights standards, and, the number of small business investors assisted by the Insurance program. Performance targets are sufficiently ambitious and were developed in consultation with OMB. The Insurance program has implemented development measures since July 1, 2003.

Evidence: OPIC Annual Performance Plans and Reports, Strategic Plan 2003-2008

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: OPIC requires its insurance clients to provide information on availability of private insurance and to complete extensive questions regarding the developmental impact of their projects. The Insurance Program also includes additionality questions in its internal documentation which must be completed prior to contract execution. The program gives clients discretion in determining what private terms, conditions, rates, and tenor are "insufficient" or "unreasonable". OPIC however makes a separate determination whether OPIC support is additional to what would be provided by the private sector. The operation of the additionality procedures will continue to be monitored to determine the policy's effectiveness.

Evidence: OPIC Application for Political Risk Insurance (revised to include developmental questionnaire), OPIC additionality questions (required for all projects prior to closing).

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: OPIC's insurance program is guided by a Private Market Advisory Group (PMAG) composed of representatives of the private insurance industry and representatives of companies that use OPIC insurance products. This group, which meets annually, provides OPIC with an ongoing evaluation of the effectiveness of OPIC's political risk insurance program, and of the extent to which OPIC insurance complements rather than displaces political risk coverage available from private insurance companies. While the input provided by the PMAG does not constitute a comprehensive independent study of OPIC programs, it provides continuing independent input on potential program improvements, including ways in which OPIC and private insurance companies can work together to reduce political risk for private investors in developing countries, while ensuring that OPIC complements and does not crowd out private insurance. The PMAG has expressed its support for OPIC's implementation of its recommendations. OPIC was evaluated at a strategic level by the Institute for International Economics in 2003. (See also Finance PART Question 2.6). OPIC has implemented the key recommendations insofar as they were politically feasible with Congress and they continue to shape OPIC policy. There have been no substantial changes in OPIC's mission, markets, authorities, or operations since that evaluation.

Evidence: GAO Report "Overseas Investment: Issues Related to the Overseas Private Investement Corporation's Reauthorization" (September 1997), Institute for International Economics "Reforming OPIC for the 21st Century" (May 2003) [http://www.iie.com/publications/pb/pb03-5.pdf], OPIC Annual Reports, and Minutes of PMAG meetings

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The direct and indirect costs of this program may be clearly seen in the Budget Appendix for OPIC's "Noncredit Account". While this program is not covered by Credit Reform, exposures, financial resources, and uses are centrally presented in the Appendix. There are three components that integrate OPIC's budget request with performance: a tool to gauge development impact, additionality, and a Board level project review. The Development Matrix and Additionality tools have been in operation and reported in the Budget since FY 2003. Development Matrix: OPIC's development matrix provides an analytical model for evaluating individual projects in terms of their potential (ex ante) and actual (ex post) contribution to development. OPIC enhances the effectiveness of the tool by factoring development impact scores of projects into the performance evaluations of individual project officers, departments, as well as the Corporation as a whole. Furthermore, the results of this matrix, and of a related development analysis are incorporated into the budget submission, and separately reported to Congress as required by law. The Development Matrix enables the budget request to present impacts and value added alongside proposed costs. This tool also internally supports the allocation of scarce resources among competing projects. Additionality: OPIC has developed a Private Insurance Cooperation Program, under which OPIC works with private insurers to obtain political risk insurance coverage for investors, and OPIC will augment private coverage only to the extent necessary for the project to go forward. In addition, all proposed insurance contracts are evaluated on the basis of an Additionality checklist, that measures the extent to which country or sector risk makes OPIC support necessary for a proposed investment to go forward. Even in those cases where the Corporation is motivated by foreign policy opportunities, the extent to which OPIC support achieves a valid developmental purpose is made clear and transparent through the development matrix. Board Level Project Review: OPIC conducted a review of all projects approved by OPIC's board since FY 2002. This study provides a comprehensive analysis of the current status and impact of these projects. OPIC intends to make this review a regular feature in order to improve its project evaluation criteria and assessment tools. This review process will help OPIC to reshape its resource allocation decisions to achieve the optimal balance of risk, additionality, and development benefits.

Evidence: Development Matrix, 2007 Budget presentation, Board Review of recent projects, Minutes of PMAG meetings.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: OPIC has made significant improvements in its strategic planning. OPIC now has specific development and additionality measures in its Annual Plan and Strategic Plan.

Evidence: OPIC Strategic Plan 2003-2008, Annual Performance Plans and Reports, and Insurance Program Additionality Checklist.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Performance information is collected and tracked throughout the life of the project via a required annual self monitoring questionnaire, and periodic site visits by OPIC personnel. The insurance portfolio is regularly monitored by OPIC's Insurance, Risk Management, and Investment Policy units.

Evidence: OPIC Self-Monitoring Questionaire, Risk Management unit's internal reports (Quarterly Detail Report on Insurance, Quarterly Portfolio Reports, and Annual Claims Reports), OPIC Annual Performance Plans and Reports, and Insurance Operating Plan.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: OPIC has instituted new individual evaluation criteria to better manage program activities. In the current employee review cycle Insurance managers will be evaluated on the development impact of the projects supported. Other factors in the performance evaluation include assessments of efficiency and productivity. The program's performance goals have been communicated to all insurance officers and managers. Each manager is aware that their individual performance evaluation will include a discussion of how their projects performed relative to the program's goals. OPIC also has mechanisms for holding contractors accountable for cost, schedule, and performance results.

Evidence: Current Individual Performance Plans.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: OPIC obligates funds in a timely manner and ensures that funds are apportioned correctly. OPIC's SF-132s are submitted in a timely manner and approved by OMB as required. OPIC's internal controls include an ongoing internal controls effort, and a department budget management system that tracks all expenditures as they occur.

Evidence: SF-132 Apportionment Requests and Quarterly Obligation Status Reports.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: OPIC has efficiency goals, measured in terms of reduced application processing time. The program's goal is to achieve a 20 percent reduction in cycle time by the end of FY 2008, based on the baseline FY 2002 cycle time. OPIC is also improving the efficiency of its technology program. In FY 2003, OPIC implemented an Investment Review Board process to ensure that all IT funds adequately incorporate agency priorities and business needs. OPIC also plans to rationalize its business management systems to ensure interoperability among all OPIC programs. Beginning in FY 2003, OPIC developed and implemented small business processing procedures, with the goal to process all small business applications within 60 days.

Evidence: OPIC Strategic Plan 2003-2008, OPIC Annual Performance Plans, Reports, and Operating Plan.

Does the program collaborate and coordinate effectively with related programs?

Explanation: OPIC has made significant progress to institutionalize collaboration and to fully leverage existing government resources. OPIC recently entered into a Memorandum of Cooperation with the Foreign Commercial Service (FCS) to facilitate collaboration between OPIC and the FCS on all OPIC-related activites. OPIC has also implemented procedures to ensure that all USAID missions overseas are made aware of OPIC activities. For example, it is now general practice for OPIC Insurance Officers to meet with USAID mission directors when on travel to Africa. OPIC has concluded an MOU with USAID to ensure program complementarity. The Insurance Program also requires comments from the U.S. Embassy in the host country prior to finalizing any insurance commitment or contract. OPIC and the U.S. Small Business Administration have signed an MOU to enhance OPIC's access to small business-sponsored projects. OPIC collaborates with MIGA and private insurers through the Berne Union.

Evidence: Memorandum of Cooperation between OPIC and the United States Foreign Commercial Service, MOU between OPIC and USAID, internal process requiring comments from Embassy and a clearance from the State Department prior to closing any insurance transaction. (See also Program Improvement plan)

Does the program use strong financial management practices?

Explanation: OPIC has received a clean audit opinion for every year of its existence, most recently by its independent auditor KPMG LLP on November 11, 2005. The Insurance Program requires that all projects be approved by a Policy Review Committee for financial and policy soundness and, depending on the size of the transaction, by the Investment Committee and OPIC Board of Directors. OPIC also has a separate Risk Management unit that regularly assesses the health of the insurance portfolio. Finally, the Insurance Program's overall recovery record of 94 percent demonstrates sound financial management.

Evidence: OPIC Annual Reports contain the clean audit opinions. Quarterly political risk insurance detail report and Monthly OPIC Portfolio Report monitor the health of the insurance portfolio.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: OPIC has taken steps to link the performance of its managers to program strategic goals. OPIC has launched a new senior level (SL) staff category, which is similar to the Senior Executive Service program. The SL category is designed to attract and retain highly qualified individuals and provide continuity between Administrations. In August 2002, OPIC conducted training for all managers and supervisors to instruct them in how to develop measurable performance targets that link to department goals for their employees. The Office of Investment Policy at OPIC has also briefed the Insurance Program staff on the new developmental measures. For the agency as a whole, OPIC has recently taken steps to establish an independent audit committee made up of members of the Board of Directors. We are also establishing a Senior Management Council and a Senior Assessment Team to provide oversight and accountability for the agency's internal control over financial reporting.

Evidence: "Developing Performance Standards" training materials, prepared and presented by FPMI Communications, contained specific suggestions and examples for how supervisors and managers can create performance standards and link those standards to Insurance Program goals. The material also discussed how managers can use that information to improve program management.

Is the program managed on an ongoing basis to assure credit quality remains sound, collections and disbursements are timely, and reporting requirements are fulfilled?

Explanation: Most of OPIC's insurance program is not subject to the Federal Credit Reform Act of 1990. However, one product, Non-Honoring of Sovereign Guaranty is subject to Credit Reform and that product is managed consistent with OPIC's other Credit Reform products. This includes credit underwriting of the sovereign guarantor and the underlying project as well as evaluation by OPIC's investment committee and board. Projects are also periodically reviewed and monitored for changes in credit quality. In FY 2006 an independent internal control assessment was conducted and recommendations were made to OPIC to provide a more optimal control environment and risk management framework. OPIC will use its Senior Management Council to address each of the recommendations from this review.

Evidence: OPIC's ongoing Credit Reform implementation, quarterly portfolio reporting, OMB Field Visit 2006.

Do the program's credit models adequately provide reliable, consistent, accurate and transparent estimates of costs and the risk to the Government?

Explanation: OPIC has placed the Non-Honoring of Sovereign Guaranty within the Insurance program. The Non-Honoring Guaranty is subject to the Federal Credit Reform Act, and OMB has approved a subsidy model for the product. While the underlying transactions are not yet seasoned, the central assumptions of the model use OMB's interagency sovereign risk assessment methodology.

Evidence: FY 2006 Non Honoring Sovereign Guarantee subsidy model

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: OPIC has used its development matrix to quantitatively measure all projects since the beginning of FY 2004. (In FY 2003 OPIC used an earlier, experimental version of the matrix.) OPIC has not supported any projects that scored less than 40 on the scale. The average un-weighted score for insurance was 91.5 in FY 2005, as compared to the FY 05 target of 90 and a long-term target of 100. The overall average scores for OPIC as a whole increased from 91.3 in FY2004 to 93.2 in FY 2005. OPIC's FY05 performance demonstrates that OPIC has achieved many of its development goals, as measured by development matrix scores at the point of approval. Recently, OPIC completed a review of projects approved by the current board. While the number of projects that have become operational and were initially scored under the development matrix is limited, the review establishes that the ex post development scores are consistent with scores projected at the point of approval.

Evidence: Performance Report, Board Review of recent projects

Does the program (including program partners) achieve its annual performance goals?

Explanation: In FY 2005 the Insurance Program achieved its annual performance goals, most importantly Insurance achieved a Development Matrix score of 91.5 versus the annual target of 90. With respect to OPIC's long run Strategic Planning, OPIC has made substantial progress or achieved the strategic goals in its 2003-2008 Strategic Plan.

Evidence: 2005 Performance Report data, Strategic Plan 2003-2008

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: First, the agency has improved its staff evaluation system to explicitly consider the employee's contribution to achieving the programs goals. Second, the program has shortened its Political Risk Insurance application, thereby making OPIC programs more user-friendly and likely reducing processing time. Third, insurance signing authority has been moved to a lower level in the department and policy review has been greatly streamlined from a panel decision to a manager decision. Fourth, prospective insurance applicants can now apply on-line, greatly expediting processing.

Evidence: OPIC Application for Political Risk Insurance, Individual Performance Plans, Annual performance reports, and the OPIC Website show evidence of improved efficiencies.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: There is no other program in the U.S. government or the private sector that has the same developmental purpose and tools as OPIC.

Evidence:

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: OPIC was independently evaluated at a strategic level by the Institute for International Economics in 2003. The study concluded that OPIC was generally effective but a number of recommendations could enhance OPIC's impact. OPIC implemented the key recommendations insofar as they proved politically feasible with Congress. (See Finance assessment Question 2.6) The study indicated that with its suggested reforms it expected the program to be effective in achieving results. There have been no substantial changes in OPIC's mission, markets, authorities, or operations since that evaluation.

Evidence: Institute for International Economics "Reforming OPIC for the 21st Century" (May 2003) [http://www.iie.com/publications/pb/pb03-5.pdf]