MCP Governance — Full Policy

Tier 2: Full policy for MCP usage governance, spend control, rate limits, and operational hygiene.
For quick checks, use SKILL-QUICK.md (Tier 1).

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1. Tool Selection Policy

1.1 Hierarchy (strict precedence)

MCP tool  >  standard CLI (gh, kubectl, az)  >  raw HTTP (curl)  >  no-op + user escalation

Every deviation from this hierarchy requires an explicit comment in the agent's reasoning: "No MCP covers this because [reason]."

1.2 Scope mapping

Domain	Preferred MCP	Allowed fallback	Prohibited
GitHub	mcp__github__*	gh CLI (only if MCP lacks the operation)	Direct curl to GitHub API
Kubernetes	mcp__kubernetes-mcp-server__*	kubectl	Manual YAML patching via sed/awk
ArgoCD	mcp__argocd-mcp-server__*	argocd CLI	kubectl apply to ArgoCD CRDs directly
Azure DevOps	mcp__azure-devops__*	az devops CLI	REST calls without auth check
Filesystem	Edit/Write/Read tools	cat, sed (read-only)	rm -rf, destructive ops without confirmation

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2. Spend Control

2.1 Call budget guidelines

Operation type	Max calls per task	Mitigation if exceeded
List / search	5	Narrow the query; paginate
Get single resource	10	Cache result in session memory
Write / mutate	3	Batch where API supports it
Sync / trigger	1 per environment	Sequential; wait for completion

2.2 Loop guards

Every loop over MCP calls must define:

• Maximum iteration count (hard stop)
• Stop condition checked before each iteration
• Backoff delay for retries (min 5s, max 60s)

# Pattern
for item in items[:MAX_ITEMS]:
    result = mcp_call(item)
    if stop_condition(result): break

2.3 Session caching

Within one agent session, never re-fetch the same resource twice. Store results in working context after first fetch. If the resource may have changed (e.g., pod status after a deploy), explicitly note the re-fetch reason.

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3. Rate Limit Handling

3.1 Response codes and actions

Code	Platform	Required action
429	Any	Exponential backoff: 30s → 60s → 120s → escalate to user
403 insufficient_scope	GitHub	Report missing OAuth scope; do not retry
503 Service Unavailable	Any	Single retry after 10s; if repeated, escalate
sync already running	ArgoCD	Poll get_application every 15s until idle; do not trigger new sync
TF400898 / throttled	Azure DevOps	Reduce batch to 20 items; add 2s delay between batches

3.2 Parallel call constraints

• Do not issue > 5 MCP calls in parallel (risk of burst rate limit)
• For bulk operations, batch in groups of 10 with a 2s pause between groups
• Never fan-out without a bound: for x in unlimited_list is a violation

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4. Observability

4.1 What to log (in agent reasoning output)

For each MCP operation sequence:

1. Intent: what the call chain is attempting
2. Result summary: key fields extracted (not full payloads)
3. Deviation: if fallback CLI was used, state why MCP was insufficient

4.2 Sensitive data handling

• Never print full API responses if they contain tokens, secrets, or PII
• Mask fields: token, password, secret, key, authorization
• Pod exec outputs may contain credentials — truncate if pattern matches (password|token|secret)\s*[=:]\s*\S+

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5. Escalation Policy

Escalate to the user (do not auto-proceed) when:

Condition	Reason
MCP call failed 3 times consecutively	May indicate infra issue, not transient error
Operation requires scope/permission not available	Token may need rotation
Write operation would affect > 3 resources	Confirm blast radius
Rate limits hit on critical path (deploy/sync)	User may want to re-schedule
MCP response is ambiguous (e.g., partial sync)	Manual verification needed

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6. Governance Checklist (pre-task)

Before any multi-step MCP workflow:

• Identified which MCP servers are relevant (no unnecessary calls to irrelevant servers)
• Estimated call count — within budget guidelines?
• Loop guards defined if iterating
• Write operations confirmed or scoped to dry-run first
• Fallback plan if MCP is unavailable for a critical step