Preheat oven to 350. Line an 8 x 8 baking pan with parchment paper, allowing a portion to hang over each side.
In a medium mixing bowl, whisk together the powder sugar and merengue powder. Set aside.
In a large bowl, whisk together the flour, granulated sugar, baking powder and dry milk. Cut the butter into 1 TBS pieces and add to the bowl, along with the vanilla plus one whole egg and one yolk (keep white for next step). Using a pastry blender or fork, cut the wet ingredients into the dry ingredients to form a crumbly mixture. Reserve about 1 ½ cups of mixture and press the rest into prepared baking pan.
Whisk the egg white in a small bowl until frothy. Add 1 cup of the powder sugar mixture and the chocolate chips and mix to combine. Spread this mixture evenly over crust in pan. Top with the reserved crumb mixture (will not cover completely and that’s ok).
Bake in preheated oven for 20-25 minutes until lightly brown on top. Remove to wire cooling rack.
Add the water to the remaining powder sugar mixture and whisk to combine. Drizzle mixture over still warm bars.
Allow to cool completely before cutting into bars.
Notes
Store in airtight container at room temperature for up to one week or in the refrigerator for up to one month.