72011419R00001.pdf

SOL-72011419R00001

TABLE OF CONTENT

SECTION B - SUPPLIES OR SERVICES/PRICES

B.1 PURPOSE

B.2 CONTRACT TYPE

B.3 ESTIMATED COST, FIXED FEE, AND OBLIGATED AMOUNT

B.4 BUDGET

P.5 PAYMENT OF FIXED FEE

B.6 INDIRECT COSTS

B.8 PAYMENT OF FIXED FEE

B.9 MULTI-YEAR CONTRACT AND CANCELLATION CEILING

SECTION C - STATEMENT OF WORK

SECTION D - PACKAGING AND MARKING

D.1 AIDAR 752.7009 MARKING (JAN 1993)

D.2 MARKING AND BRANDING STRATEGY

D.3 BRANDING STRATEGY AND MARKING PLAN

SECTION E - INSPECTION AND ACCEPTANCE

E.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

E.2 INSPECTION AND ACCEPTANCE

E.3 CONTRACTOR PERFORMANCE EVALUATION

SECTION F - DELIVERIES OR PERFORMANCE

F.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

F.2 PERIOD OF PERFORMANCE

F.3 PLACE OF PERFORMANCE

F.4 AUTHORIZED WORK WEEK

F.5 AIDAR 752.242-70 PERIODIC PROGRESS REPORTS (OCT 2007)

F.6 REPORTS AND DELIVERABLES OR OUTPUTS

SECTION G – CONTRACT ADMINISTRATION DATA

G.1 CONTRACTING OFFICER'S AUTHORITY

G.3 CONTRACTING OFFICER’S REPRESENTATIVE (COR)

G.4 ACCEPTANCE AND APPROVAL

G.6 AIDAR 752.7003 DOCUMENTATION FOR PAYMENT (NOV 1998)

G.6 INVOICES

G.8 PAYING OFFICE

G.7 ACCOUNTING AND APPROPRIATION DATA

SECTION H - SPECIAL CONTRACT REQUIREMENTS

H.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

H.3 AIDAR 752.7004 EMERGENCY LOCATOR INFORMATION (JUL 1997)

H.4 AIDAR 752.7005 SUBMISSION REQUIREMENTS FOR DEVELOPMENT EXPERIENCE

DOCUMENTS (SEP 2013)

H.5 INSURANCE AND SERVICES

H.6 AIDAR 752.228-70 MEDICAL EVACUATION (MEDEVAC) SERVICES (JULY 2007)

H.7 AUTHORIZED GEOGRAPHIC CODE

H.8 LANGUAGE REQUIREMENTS

H.9 AIDAR 752.7034 ACKNOWLEDGMENT AND DISCLAIMER. (DEC 1991)

H.10 EXECUTIVE ORDER ON TERRORISM FINANCING (FEB 2002)

H.11 AIDAR 752.7032 INTERNATIONAL TRAVEL APPROVAL AND NOTIFICATION

REQUIREMENTS (JAN 1990)

H.12 FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL

CONFERENCES (JUNE 2012)

H.13 ADS 302.3.5.5 REPORTING OF FOREIGN TAXES (JUL 2007)

H.14 AIDAR 752.222-7USAID DISABILITY POLICY - ACQUISITION (DECEMBER 2004)

H.15 AIDAR 752.209-71 ORGANIZATIONAL CONFLICTS OF INTEREST DISCOVERED AFTER

AWARD (JUN 1993)

H.16 ENVIRONMENTAL COMPLIANCE

H.17 DISCLOSURE OF INFORMATION

H.18 BUSINESS CLASS TRAVEL

H.19 NEWS RELEASE

H.20 TITLE TO PROPERTY

H.21 NONDISCRIMINATION (JUNE 2012)

H.22 AIDAR 752.7036 USAID IMPLEMENTING PARTNER NOTICES (IPN) PORTAL FOR

ACQUISITION (JULY 2014)

H.23 SUBMISSIONOF DATASETS TO THE DEVELOPMENT DATALIBRARY (DDL) (OCT 2014)

H.24 PROHIBITION ON THE USE OF FEDERAL FUNDS TO PROMOTE, SUPPORT, OR

ADVOCATE THE LEGALIZATION OR PRACTICE OF PROSTITUTION– TIP ACQUISITION

(MAY 2007)

H.25 USAID IMPLEMENTATION OF SECTION 508 OF THE REHABILITATION ACT OF 1973

AND FEDERAL ACQUISITION CIRCULAR (FAC) 97-27 "ELECTRONIC AND INFORMATION

TECHNOLOGY ACCESSIBILITY

H.26 CONTRACTOR’S PERSONNEL INTEGRITY IN FOREIGN ASSISTANCE

H.27 FAR 52.203-99, PROHIBITION ON CONTRACTING WITH ENTITIES THAT REQUIRE

CERTAIN INTERNAL CONFIDENTIALITY AGREEMENTS (DEVIATION 2015-02)

H.27 LOGISTIC SUPPORT

H.28 CONSENT TO SUBCONTRACTS

H.29 CONFIDENTIALITY AND OWNERSHIP OF INTELLECTUAL PROPERTY

H.31 NONEXPENDABLE PROPERTY PURCHASES AND INFORMATION TECHNOLOGY

RESOURCES

H.32 FRAUD REPORTING

H.33 AIDAR 752.242-70, PERIODIC PROGRESS REPORTS (OCT 2007)

H.34 AIDAR 752.245-70 GOVERNMENT PROPERTY - USAID REPORTING REQUIREMENTS

(OCT 2017)

H.36 FACILITIES USED FOR RELIGIOUS ACTVITIES

H.37 SMALL BUSINESS SUBCONTRACTING PLAN, ISRs AND SSRs

H.38 THIRD COUNTRY TRAINING

H.39 PERSONNEL APPROVALS

SECTION I- CONTRACT CLAUSES

I.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

I.2 52.216-24 LIMITATION OF GOVERNMENT LIABILITY (APR 1984)

I.3 52.222-35 EQUAL OPPORTUNITY FOR VETERANS (OCT 2015)

I.4 52.222-36 EQUAL OPPORTUNITY FOR WORKERS WITH DISABILITIES (JUL 2014)

I.5 52.247-67 SUBMISSION OF TRANSPORTATION DOCUMENTS FOR AUDIT

(FEB 2006)

I.13 AIDAR 752.7101 VOLUNTARY POPULATION PLANNING ACTIVITIES (JUN 2008)

SECTION J - LIST OF ATTACHMENTS

SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS

OF BIDDERS

K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY

REFERENCE

K.3 INSURANCE - IMMUNITY FROM TORT LIABILITY

K.4 AGREEMENT ON, OR EXCEPTIONS TO, TERMS AND CONDITIONS

K.5 52.209-5 CERTIFICATION REGARDING RESPONSIBILITY MATTERS (OCT 2015)

K.6 52.209-7 INFORMATION REGARDING RESPONSIBILITY MATTERS. (JUL 2013)

K.7 52.215-6 PLACE OF PERFORMANCE (OCT 1997)

K.8 52.222-21 PROHIBITION OF SEGREGATED FACILITIES (APR 2015)

K.9 52.222-22 PREVIOUS CONTRACTS AND COMPLIANCE REPORTS (FEB 1999)

K.10 52.225-20 PROHIBITION ON CONDUCTING RESTRICTED BUSINESS OPERATIONS IN

SUDAN—CERTIFICATION (AUG 2009)

K.11 52.227-15 REPRESENTATION OF LIMITED RIGHTS DATA AND RESTRICTED

COMPUTER SOFTWARE (DEC 2007)

K.12 52.230-1 COST ACCOUNTING STANDARDS NOTICES AND CERTIFICATION

K.13 52.230-7 PROPOSAL DISCLOSURE—COST ACCOUNTING PRACTICE CHANGES (APR

2005)

K.14 AUTHORIZED NEGOTIATORS

K.15 SIGNATURE

SECTION L - INSTRUCTIONS, CONDITIONS, AND NOTICES TO BIDDERS

L.1 FAR 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

(FEB 1998)

L.2 52.216-1 TYPE OF CONTRACT (APR 1984)

L.3 52.233-2 SERVICE OF PROTEST (SEP 2006)

L.4 GENERAL INSTRUCTIONS TO OFFERORS

L.6 INSTRUCTIONS FOR PREPARATION OF TECHNICAL PROPOSAL

L.7 INSTRUCTIONS FOR PREPARATION AND SUBMISSION OF THE COST/BUSINESS

PROPOSAL

L.8 INSTRUCTIONS FOR THE PREPARATION OF BRANDING AND MARKING PLANS

SECTION M - EVALUATION FACTORS FOR AWARD

M.2 TECHNICAL EVALUATION CRITERIA

M.3 COST/BUSSINESS EVALUATION

M.4 DETERMINATION OF COMPETITIVE RANGE

M.5 SOURCE SELECTION

SECTION B - SUPPLIES OR SERVICES/PRICES

B.1 PURPOSE

The purpose of the USAID Economic Security Program, implemented by this contract, is to accelerate broad-based growth of sectors outside of agriculture that show strong potential to create jobs, to increase incomes, to increase micro, small, and medium enterprise (MSME) revenues, and to support diversification to more productive economic activities, including tourism and up to three additional sectors.

B.2 CONTRACT TYPE

This is a Cost-Plus-Fixed-Fee (CPFF) Completion type contract. For the consideration set forth below, the Contractor will achieve the performance objectives and deliverables or outputs described in Section C, Statement of Work, and in accordance with the performance standards specified herein.

B.3 ESTIMATED COST, FIXED FEE, AND OBLIGATED AMOUNT

(a) For the five-year contract period, the estimated cost for the performance of the work required hereunder, exclusive of fixed fee, is _______ [ TBD ] . The fixed fee, is _______ [ TBD ] . The estimated cost plus fixed fee, if any, is _______ [ TBD ] .

(b) Within the estimated cost plus fixed fee specified in paragraph (a) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the Contractor (and payment of fee) for performance hereunder is _______ [ TBD ] . The Contractor must not exceed the aforesaid obligated amount, unless authorized by the contracting officer pursuant to the clause of this contract entitled “Limitation of Funds (APR 1984)” FAR 52.232-22.

(c) Funds obligated hereunder are anticipated to be sufficient through _______ [ TBD ] .

B.4 BUDGET

The following itemized budget sets forth the estimates for reimbursement of dollar costs for line items of cost and the fixed fee.

COST CATEGORY AMOUNT IN USD

Total Direct Cost

Subcontracts Grants Total Indirect Cost Fixed Fee

TOTAL COST PLUS FIXED FEE

B.5 PAYMENT OF FIXED FEE

$TBD is the maximum fixed fee to be paid in accordance with this Section B.4. Subject to FAR 52.216-8 “Fixed Fee” and the following. The Contractor will be paid the proportion of the fixed fee that corresponds to the proportion of allowable direct costs incurred by the Contractor during the period covered by the invoice. Notwithstanding the foregoing, the Contractor’s fixed fee is in consideration of the accomplishment of the deliverables or outputs described in Sections C, D, and F, as well as complying with all Contract requirements. If the Contracting Officer determines that this method results in paying a disproportionately higher ratio of fixed fee than the percentage of work that the Contractor has completed, then the Contracting Officer may suspend further payment of any fixed fee until the Contractor has made sufficient progress to justify further payment. Subject to the Contracting Officer’s discretion, if the Contractor subsequently completes the delayed work such that costs incurred are proportionate to work completed, the Contracting Officer may approve payment of the amount of the fee that was suspended.

B.6 INDIRECT COSTS

The contract clause entitled “Allowable Cost and Payment (JUN 2013)”, FAR 52.216-7, specifies that the indirect cost rates shall be established for each of the contractor’s accounting periods that apply to this contract. Pending establishment of revised provisional or final indirect cost rates, allowable indirect costs shall be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases:

Description Rate Base Type Period

TBD TBD% 1/ 1/ 1/

TBD TBD% 2/ 2/ 2/

1/ Base of Application: TBD Type of Rate: TBD Period: TBD

2/ Base of Application: TBD Type of Rate: TBD Period: TBD

B.7 ADVANCE UNDERSTANDING ON CEILING INDIRECT COST RATES AND FINAL

REIMBURSEMENT FOR INDIRECT COSTS

(a) The Contractor must make no change in its established method of classifying or allocating indirect costs without the prior written approval of the Contracting Officer.

(b) Reimbursement for indirect costs must be at the lower of the negotiated final provisional/pre- determined rates or the following ceiling rates:

Description 2018 2019 2020 2021 2022 [Rate 1 description to be inserted] % % % % %

(c) The Government will not be obligated to pay any additional amount should the final indirect cost rates exceed the negotiated ceiling rates. If the final indirect cost rates are less than the negotiated ceiling rates, the negotiated rates will be reduced to conform to the lower rates.

(d) This advance understanding must not change any monetary ceiling, cost limitation or on established in the contract.

B.8 PAYMENT OF FIXED FEE

a) The Government shall pay the Contractor for performing this contract the fixed fee specified in the Schedule.

b) In accordance with FAR 52.216-8 “Fixed Fee (JUN 2011),” USAID reserves the right to withhold and reserve not to exceed $100,000. The Contracting Officer shall release 75 percent of all fee withholds under this contract after receipt of an adequate certified final indirect cost rate proposal covering the year of physical completion of this contract, provided the Contractor has satisfied all other contract terms and conditions, including the submission of the final patent and royalty reports, and is not delinquent in submitting final vouchers on prior years’ settlements. The Contracting Officer may release up to 90 percent of the fee withholds under this contract based on the Contractor’s past performance related to the submission and settlement of final indirect cost rate proposals.

B.9 MULTI-YEAR CONTRACT AND CANCELLATION CEILING

This contract is considered non-severable, and is therefore a multi-year contract as defined in FAR

17.103. Therefore, this contract is subject to the requirements of FAR 17.106.

A. Performance under this contract during the second and subsequent program years is contingent upon the appropriation of funds. All program years except the first are subject to cancellation.

Cancellation shall occur by the dates specified below if the Contracting Officer:

1. Notifies the Contractor that funds are not available for contract performance for any subsequent program year; or

2. Fails to notify the Contractor that funds are available for performance of the succeeding program year.

B. Cancellation Ceiling:

This is a CPFF type contract where the Contractor is authorized to be reimbursed for all costs which are allowable in accordance with FAR 52.216-7, “Allowable Costs and Payment.” Therefore, the Contractor will not incur any costs which would have been amortized over the life of the contract should the contract be cancelled in accordance with FAR 52.217-2.

The Government's liability for cancellation charges shall not exceed $TBD. This amount will be reduced in accordance with FAR 17.106-1(c)(1) at the conclusion of each program year, as follows:

Program Year Cancelation Date Cancelation Ceiling Year 1: 2018/2019 N/A N/A Year 2: 2019/2020 September 30, 2019 $ Year 3: 2020/2021 September 30, 2020 $

Year 4: 2021/2022 September 30, 2021 $ Year 5: 2022/2023 September 30, 2022 $

END OF SECTION B

SECTION C - STATEMENT OF WORK

C.1 BACKGROUND

After the collapse of the Soviet Union, Georgia experienced its own economic collapse, internal and regional conflict, and rampant corruption. Economic activity fell to less than 30 percent of what it had been during Soviet times. Its industrial base was dismantled and rural Georgia became a pre-modern economy dominated by self-subsistence, smallholder agriculture. After the 2003 Rose Revolution, macroeconomic reforms created an investment-friendly environment and civil service reforms curbed petty corruption. These reforms attracted foreign direct investment and stimulated rapid economic growth: between 2003 and 2008, the economy grew at approximately 9 percent per year. Per capita gross domestic product (GDP) fell by 15 percent after the 2008 conflict between Georgia and Russia and the global financial crisis, but gradually recovered to pre-conflict levels in 2013. Between 2013 and 2016, per capita GDP grew at approximately 3 percent per year.

Much of this economic recovery created relatively few jobs and benefited the elite and a small middle class. According to the World Bank, the economy grew by 6% per year between 2005 and 2015 but employment grew by only 0.3 percent during this time period (which implies a 5 percent growth elasticity of jobs; for European Union (EU) and Central and Eastern European countries during roughly the same time period, the growth elasticity of jobs was 32 percent). Georgia has the second-highest level of income inequality and the highest inequality of opportunity (extent to which inequality in circumstances beyond an individual's control influences inequality of outcomes) of any country in Eastern Europe and Central Asia. Unemployment has been stuck at around 14 percent since 2014 and most workers who count as officially employed are rural, self-subsistence farmers. Job prospects are especially bleak for new entrants to the labor market: youth (ages 15-29) unemployment (29 percent) was approximately three times higher than for those 30 and older (11 percent) in 2017. Like unemployment, poverty has proven to be a persistent challenge for Georgia. Approximately 20 percent of Georgians lived on less than $2.5 per day in 2017, up from 16 percent in 2015. In Georgia’s rural areas – where official unemployment is just 5 percent – 21 percent of the population lives in poverty. Nearly half of the poor are persistently poor, i.e., they do not escape or fall in and out of poverty but rather remain in poverty for long periods of time; this persistent poverty is more pronounced in rural areas than urban. These economic challenges are being exacerbated by Russian propaganda designed to undermine support for EU integration and westward orientation.

One noticeable bright spot in Georgia’s economy is the emergence of tourism as a driver of jobs, incomes, and economic growth. Since 2004, tourism has expanded steadily and has driven economic growth, while agriculture and manufacturing have stagnated. In 2017, tourism made up percent of Georgia’s GDP, employed more than 100,000 individuals, and was a major contributor to foreign exchange earnings: export revenues for personal and business travel ($2.75B) exceeded those for all product-related exports combined ($2.73B). Tourism leverages Georgia’s comparative advantages, including its liberal visa policy, its location at the crossroads of Europe and Asia, its natural beauty (e.g., the Black Sea, the Caucasus mountains), its cultural heritage (birthplace of wine), and its historical legacy as a travel destination during Soviet times, in a way that other industries have not. The revenue generated by Georgia’s tourism industry is critical to Georgia’s economic health. Tourism is also an important driver of rural development, which is especially true for emerging tourism market niches that show strong potential to drive the growth of Georgia’s tourism industry in the next 5-10 years, including adventure, agro-, eco-, and cultural tourism, all of which are concentrated primarily in rural areas.

C.1.a Challenges faced by Georgia’s tourism sector

The sustained success of tourism in Georgia – especially in rural areas – hinges on whether or not Georgia’s tourism attractions can deliver a high quality, consistent experience to visitors. One factor critical to this success is the service-related skills of the workforce supporting this sector. Tourism, in particular eco-, agro-, adventure, and cultural tourism, relies on high quality service delivery at multiple levels, from basic hospitality services to cultural guides, adventure instructors, and nature specialists.

While Georgia has many comparative advantages in rural-based tourism, a workforce with strong service skills is not one of them. Leaders in the hospitality field, tour operators, government, and international competitiveness reports all identify the lack of service-related skills at all levels as a major constraint that is hampering the growth of rural tourism. This weakness poses a risk for Georgia’s tourism industry: if visitors do not receive the standard and quality of services delivered by Georgia’s competitors, then Georgia could lose its edge as an emerging tourist destination and miss the opportunity to have tourism drive job and income generation in rural areas, where growth is needed most.

Georgia also lags its competitors in the range and quality of products that could otherwise enhance the tourist’s experience. For service-related products, this weakness is closely related to the need to develop skills discussed above. However, it also has to do with a lack of knowledge, awareness, or experience of what types of potential new services and products could be offered that would enhance the tourist’s experience in Georgia, especially in rural areas. Another factor that limits the income generation potential of Georgia’s tourism sector is the limited use of information and communications technology (ICT) for business-to-business and business-to-consumer transactions. Without ICT, service providers face additional challenges when trying to locate customers and, vice versa, tourists struggle to find services and other products that would enhance their experience in Georgia. As a result of these challenges, tourists spend less money on visits to Georgia than they do in other comparable travel destinations and the sector foregoes potential income-generating opportunities.

Much of the infrastructure required for international-quality tourism is also lacking in Georgia. Roadside public spaces, rest stops, toilets, tourist information centers, signage, and other forms of infrastructure upon which tourism relies are in short supply. Government, donors, and international financial institutions all recognize these needs but still face challenges in matching potential financing sources to needs.

Related to infrastructure development, Georgia’s tourism industry faces a serious challenge in properly managing the rapid growth and development of tourism in a way that ensures that these economic gains are sustainable and do not end up damaging Georgia’s environment or historical and cultural heritage sites, which are arguably Georgia’s most important comparative advantages. Government, private sector leaders, and donors all recognize that the standards, rules, and regulations that monitor activities related to tourism in Georgia need to be strengthened, updated, and enforced. The legal framework that governs tourism in Georgia was developed in the mid-1990s and is in desperate need of updating to current best practices. The law that impacts the development of a hospitality workforce is also outdated and does not encourage private sector participation in workforce training initiatives. More problematic, however, is the fact that most of the activities and services related to tourism in Georgia have no reliable standards or monitoring systems, including transportation and road safety, environmental safeguards, the operation of tourist information centers, star ratings for hotels and guesthouses, and the quality of guides, among others. This absence of reliable standards and safeguards for Georgia’s tourism industry threatens both

Georgia’s reputation as an emerging tourist destination as well as human safety and Georgia’s environment.

C.1.b Challenges faced by other sectors that could contribute to Georgia’s economic diversification

Besides tourism, there is little driving economic growth and job creation in Georgia. While sectors like finance and construction have grown in the past decade, they have added few jobs. In fact, between 2012 and 2016, the construction and manufacturing sectors actually shed jobs. Outside of the service sector, most of the jobs created during this time period were in the low-paying fields of wholesale/retail trade and auto repair. Furthermore, the persistent high incidence of employment in agriculture means that Georgia is still lagging in the process of reallocating labor towards more productive sectors of the economy such as financial intermediation, telecommunications, manufacturing, construction, transportation, and tourism/hospitality.

However, certain niches of the economy in sectors like light manufacturing, apparel, and creative industries show promise; for example, the production of construction materials, lighting systems, furniture, and high-end fashion design are a few areas in which Georgia shows the potential to compete in both the domestic and international markets. In addition to these niches, other market opportunities are likely to emerge in the next few years as Georgia’s multiple free trade agreements (FTAs), including FTAs with China, Turkey, the European Free Trade Association, and the Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU, come into full effect. USAID believes it is important to begin to engage with these sectors, start to build them up, and attempt to develop partnerships with private sector leaders that will speed up the growth of these sectors in a way that contributes to inclusive and sustainable economic growth and economic diversification for Georgia.

C.2 SCOPE OF WORK

The purpose of the USAID Economic Security Program is to accelerate the growth of Georgian sectors outside of agriculture that show strong potential to create jobs, to increase incomes, to increase micro, small, and medium enterprise (MSME) revenues, and to support diversification to more productive economic activities, including the tourism sector and up to three additional sectors. For the purposes of this contract, the agriculture sector includes (1) primary agricultural production; (2) agricultural processing; (3) intermediate inputs used in agriculture and agricultural processing; and (4) the portion of trade and transport services associated with transactions of agricultural products and agricultural processed products.

Within the identified sectors, the Contractor must use a value chain approach to promote growth. The program will achieve these goals by improving the workforce, including professional, management, and vocational skill development; supporting new service and product development; improving coordination and communications between key stakeholders; and developing and co-funding partnerships that have catalytic effects on MSMEs in these sectors.

To meet the goal and objectives of the Program, the Contractor and its interventions must be flexible and responsive to changing market conditions and other exogenous factors. In case of rapidly changing market conditions and new opportunities, the Contractor may need to change or add sector(s) in order to promote increased employment and economic competitiveness. In case of unexpected shocks and stresses that threaten investments in targeted sector(s), such as geopolitical events, natural disaster, or other threats, the Contractor must be prepared need to adapt its interventions to respond to emergent shocks.

C.3 DETAILED WORK REQUIREMENTS

The USAID Economic Security Program has four components. Under the first component, the program will provide technical assistance and cost-share grants to strengthen market linkages and cooperation among clusters of firms and other value chain participants and improve support services intended to enhance growth and productivity across targeted value chains in targeted sectors. Under the second component, the program will provide cost-share grants and enterprise-level technical assistance to MSMEs that improve productivity, sales, quality and develop new products and services. Under the third component, the program will provide technical assistance and cost-share grants to facilitate industry-led workforce development, including professional, management, and vocational skill development. Under the fourth component, the program will create and operate a $1.5 million Partnership Development Fund and provide technical assistance to build promising public-private partnerships (PPPs) that leverage public and private resources within targeted sectors. The total value of the cost-share grants fund that supports the first three program components is $4 million.

C.3.a Component 1: Strengthen cooperation in targeted sectors

The Contractor must provide technical assistance and cost-share grants to strengthen linkages and cooperation throughout value chains in targeted sectors and improve support services intended to enhance growth and productivity across targeted value chains in targeted sectors. This technical assistance must prioritize value chains for support, identify gaps and interventions to strengthen these value chains, and build coordination and collaboration between key stakeholders in prioritized value chains including firms, associations, Government of Georgia (GOG) agencies, municipalities, and others. For example, if a value chain assessment determines that the lack of access to new technologies is a key impediment to the domestic production of high-quality construction materials, the Contractor will link the cluster of domestic producers with technology providers, provide grants to increase access to new and improved technologies, and/or provide the necessary technical assistance to bring these technologies to Georgian value chain participants. Also, if the lack of regulations is identified as a significant factor hindering the development of services and products in the targeted sectors, the Contractor will provide technical assistance to facilitate public-private dialogue on related issues.

Within 120 days of contract award, the Contractor must conduct an assessment for Contracting Officer’s Representative (COR) approval that prioritizes up to three additional sectors outside of tourism for support, proposes high potential value chains within these sectors and the tourism sector to be targeted for support identifies constraints to growth; proposes interventions that must overcome these constraints; and identify GOG, donor, and private sector resources available that the Contractor can access in order to leverage grant and technical assistance and maximize the impact of these interventions, including possibilities of developing public-private partnerships, Global Development Alliances, and other partnerships (see Component 4).

After the COR approves the assessment, the Contractor must provide technical expertise and cost-share grants to strengthen in-country systems for the sustainable delivery of productivity-enhancement services to targeted value chains, facilitate market linkages, and improve coordination and communication between key stakeholders in the targeted sectors, including non-governmental organizations and sector associations, government and state agencies, and donors. Examples of potential interventions include, but are not limited to, the following:

1. Support the development of a tourism alliance and other sector associations by strengthening association governance, facilitating the development of private sector-led certifications, especially those that are internationally recognized and contribute to improved human safety and environmental safeguards, and building capacity to advocate for sector development;

2. Facilitate public-private dialogue among sector stakeholders to jointly identify policy and regulatory constraints to the development of targeted sectors and propose concrete legislative and regulatory actions to mitigate these constraints, as well as identify areas for collaboration to improve sector competitiveness;

3. Increase and strengthen market linkages by designing initiatives to help groups of firms participate in business-to-business meetings including trade missions and fairs, develop joint promotion and branding initiatives, and source locally by consolidating purchases and sharing logistics for primary inputs;

4. Support key sector stakeholders to jointly identify and prioritize investments that promote the development of targeted sectors and to access funding for these projects, including through GOG financing sources and international financial institutions, and;

5. Increase access to finance by working with financial institutions to deepen understanding of the market potential and financing opportunities for value chains in targeted sectors.

C.3.b Component 2: Support MSMEs to improve productivity, sales, quality and develop new products and services

The Contractor must provide cost-share grants to MSMEs and also provide technical assistance to cost-share grant beneficiaries as well as non-grant beneficiaries in order to improve their productivity, sales, quality, and to develop new products and services. The Contractor must design and deliver cost-share grants and technical assistance in ways that address value chain gaps identified in the assessment conducted under Component 1. For example, if a value chain assessment determines that a shortage of domestically-produced packaging materials hinders the development of a targeted value chain, the Contractor must provide grants and technical assistance to Georgian firms to start production of demanded packaging. This technical assistance will include both assistance directly provided by the Contractor and technical assistance provided through subcontractors. In addition, the Contractor must design and deliver technical assistance to non-grant recipients in ways that address value chain gaps identified in the assessment conducted under Component 1. For technical assistance recipients, the Contractor must identify opportunities for cost-share contributions for beneficiaries whenever possible.

When providing technical assistance, the Contractor must take a systematic approach to supporting groups or clusters of firms within value chains in targeted sectors rather than supporting individual firms across a wide range of value chains. Furthermore, whenever possible, in delivering technical assistance the Contractor must partner with GOG agencies and other donors to maximize the impact of the assistance.

Types of interventions may include, but are not limited to, the following:

1. Improve firm-level operational capacities by supporting the development of business, financial, and marketing plans and enhancing logistics, operations, procurement, and other management capacities;

2. Increase productivity, productive capacity, and product quality by supporting the upgrade and expansion of production facilities and access to new and improved production technologies;

3. Improve ability to meet international production standards and receive internationally-recognized certifications, including environmental and other eco-friendly certifications, and;

4. Facilitate increased access to new domestic buyers, international markets, and financing opportunities for further growth and expansion.

C.3.3. Component 3: Industry-led workforce development

The Contractor must provide technical assistance and cost-share grants to support industry-driven improvements in training and educational opportunities for the workforce supporting targeted sectors, including professional, management, and vocational skills development. Technical assistance must be designed to increase the level of private sector engagement in workforce development and build communication and partnerships between public sector, industry and education service providers to support workforce development, including on-the-job learning opportunities. Technical assistance and cost-share grants must be targeted to address identified gaps in training and educational programs for the workforce that supports targeted sectors. Potential grant and technical assistance recipients may include, but are not limited to, business service providers, vocational and technical training centers, universities, professional organizations, non-governmental organizations or other organizations that provide services that build the skills of potential and current employees engaged in targeted sectors. Examples of technical assistance and grants include, but are not limited to, the following:

1. Design initiatives that increase communications and strengthen linkages between industry, government, and educational institutions to address skills mismatches and contribute solutions for demand-driven education;

2. Support businesses to create on-the-job learning opportunities and develop incentives that tie trainings and certifications to internships, apprenticeships, and other forms of preferential consideration for employment opportunities;

3. Develop programs that train specialists in high demand in targeted sectors;

4. Improve and upgrade service quality and safety standards for various education service providers to internationally accepted practices, standards, and certifications;

5. Support graduates of workforce development programs to start their own businesses and/or gain internships and employment through job fairs and similar events that link graduates with potential employers, and;

6. Design sustainable long-term workforce development platforms, such as physical spaces/hubs, that are jointly financed and managed by sector associations and universities/training providers.

C.3.4. Component 4: Building public-private partnerships

The Contractor must create and operate a Partnership Development Fund and facilitate the establishment of PPPs and Global Development Alliances (GDAs), as defined by USAID, in targeted sectors. USAID defines a PPP as a USAID-supported development project or initiative which engages the private sector (including corporations, foundations, and other non-governmental actors) as a core resource partner (see Attachment 1).

The Contractor must provide technical assistance to develop relationships between key stakeholders in ways that will accelerate Georgia’s economic diversification, as well as its transition from donor-driven development to locally-owned solutions and self-reliance. Specifically, the Contractor must provide technical assistance to catalyze linkages between private sector resource partners, the government, and local constituencies around a shared development challenge and opportunity; help these diverse stakeholders conceive new partnership ideas; co-design feasible and high-impact partnership activities;

leverage financing by linking potential partners with sources of capital; and, ensure that the promising partnerships materialize.

The Contractor must achieve these outcomes through the following steps. First, the Contractor must provide technical assistance to gain a better understanding of the private sector’s needs, interests, and resources that could be leveraged to drive locally-owned development; this scoping exercise must include a mapping of industry leaders and private sector investment funds, where they work, and potential ways in which they could engage with MSMEs and GOG to develop targeted sectors. This scoping exercise must be part of the sector and value chain assessment conducted in Component 1.

Second, the Contractor must provide technical assistance that facilitates engagement between private sector leaders, MSMEs, and GOG that results in the identification and co-design of potential partnerships that build targeted sectors; these series of engagements must also support the GOG and private sector partners to identify regulatory incentives for the private sector to partner with non-private sector players and co-fund development activities.

Third, the Contractor must provide technical assistance that identifies innovative ways to access and leverage financing for partnerships identified in the second step. The vast majority of the partnerships designed in the second step will be entirely funded with non-U.S. government resources (e.g., by private sector, other donors, foundations, and financial institutions). Examples of potential types of partnerships may include, but are not limited to, the following:

1. Investments in new and/or existing facilities that builds the productive quality and capacity of complementary value chain actors -- such as primary producers from which processors source inputs -- through trainings, certification programs, and other services, as well investments in new and/or existing value adding processing enterprises;

2. Investments in technology, marketing, supply chain, logistics, infrastructure, and other initiatives that benefit firms throughout the value chain in targeted sectors;

3. Investments designed to enhance workforce skills in targeted sectors, including partnerships with leading private sector firms, educational institutions, GOG, sector associations, and others, that leverage knowledge and resources, in ways that align employers’ needs with skills delivered by training and education providers, and;

4. Investments in small businesses in targeted sectors that demonstrate the capacity to drive innovation and quality improvements and serve as models for other actors in the sector, but only if the benefits can be demonstrably spread to the wider MSME population.

The Contractor must co-finance the most promising, high-impact partnership activities to demonstrate their viability and benefits to public, private and non-private stakeholders through its Partnership Development Fund. The Partnership Development Fund will be $1.5 million and will allow co-funding with the private sector resource partner, with at least a 1:1 match, to establish a minimum of three new GDAs during the life of the program. Each GDA must be linked to at least one of USAID/Georgia’s Country Development Cooperation Strategy Development Objectives, be replicable and/or scalable, and demonstrate clear benefits to proposed sectors. Each co-financing opportunity for which the Contractor plans to use the Partnership Development Fund must be presented to the COR for prior approval.

C.5. APPROACH TO PROVIDING COST-SHARE GRANTS

Components one, two and three include a cost-share grants program. Below are the requirements and parameters for the implementation of the cost-share grants program.

The aggregate amount of grants allocated under all three components must be $4 million.

The maximum grant size must be $100,000 per recipient with the majority of the grants being less than $70,000 per grant.

The Contractor must design and implement a competitive cost-share grants program with detailed, transparent selection criteria. The COR must be significantly involved in establishing grant selection criteria and must approve recipients.

The purpose of the cost-share grants is to facilitate investments in business expansions and/or sector growth that would not have otherwise happened. The intended purpose is not to use grants to displace investments that likely would have otherwise taken place without program support or to support firms that have received significant donor support in the past.

Grants provided to MSMEs must not exceed 40 percent of the total new estimated cash investment required for a new business start-up or the expansion of an existing business. Loans may be used to meet matching requirements, however, in-kind contributions will not be considered.

Grants provided to non-profit entities, including cooperatives and associations, must not exceed 70 percent of the total new estimated cash investment required to improve and/or expand operations. Loans and in-kind contributions may be used to meet matching requirements for these non-profit entities.

Grants provided to finance training and educational improvements and new offerings must not exceed 70 percent of the total new estimated cash investment required for the improvement or new offering. Loans and in-kind contributions may be used to meet matching requirements. Priority must be given to grantees who secure third-party private sector contributions to meet the matching requirements.

The Contractor must work with all grant recipients to develop a series of training opportunities for their suppliers and clients, as applicable. These trainings must be designed to strengthen both business and technical skills and modern production techniques.

Entities receiving grants must agree to employ at least one intern on at least a 50 percent part-time basis.

Prior to issuing a grant, the COR must provide approval.

C.5 CONTRACT DELIVERABLES

USAID is committed to quantifiable results. Through the two contract components, this program must achieve the results listed in the table below. The detailed deliverables and deliverables schedule for this contract are as follows:

Table 1: Contract Deliverables

No.

Result

Contract Year Contract Total

1 2 3 4 5

1 New full-time equivalent jobs created by program beneficiaries

TBD TBD TBD TBD TBD 4000

2 Increase in sales by assisted enterprises

TBD TBD TBD TBD TBD $50 million

3 Number of recipient organizations that receive cost-share grants

TBD TBD TBD TBD TBD 100

4 Dollar value of cost-share leveraged from grant recipient organizations

TBD TBD TBD TBD TBD $4 million

5 Number of organizations that receive technical assistance

TBD TBD TBD TBD TBD 600

6 Number of training and educational programs created or significantly improved

TBD TBD TBD TBD TBD 10

7 Number of individuals who graduate from supported educational programs

TBD TBD TBD TBD TBD 2000

8 Percentage of individuals who graduate from supported educational programs that find employment, self-employment, or better employment

TBD TBD TBD TBD TBD 80 percent

9 Number of businesses offering internship opportunities

TBD TBD TBD TBD TBD 200

10 Number of PPPs established to develop targeted sectors

TBD TBD TBD TBD TBD 10

10.a Number of GDAs funded by the Partnership Development Fund (subset of 10)

TBD TBD TBD TBD TBD 3

11 Dollar value of private sector, other donor, and/or GOG investment for partnerships leveraged through PPPs

TBD TBD TBD TBD TBD $10 million

The Contractor is responsible for providing the contract deliverable targets listed above, which constitute satisfactory contract performance.

C.6 IMPLEMENTATION REQUIREMENTS

The Contractor must integrate the following requirements into its implementation approach.

C.6.1. Donor and host country coordination. The Contractor must coordinate and complement activities closely with government, private sector, USAID projects, and other donor-led initiatives designed to enhance private sector competitiveness. These include, but are not limited to, the following initiatives.

The GOG’s National Tourism Agency supports efforts to ensure sustainable tourism development and increase awareness of Georgia as a unique tourist destination on the international market. The GOG’s

Enterprise Georgia has two initiatives to support the tourism sector. “Host in Georgia” provides low-cost financing and technical assistance to medium and large scale hospitality firms, including hotels.

Enterprise Georgia also supports a small grants scheme that has benefitted micro and small enterprises in regions outside of Tbilisi. Georgia’s state-owned Partnership Fund provides equity financing to larger scale, financially viable projects such as hotels, resorts, and tourism-related infrastructure projects.

Development partners also support Georgia’s tourism sector. The USAID supported Zrda activity (2016-

21) supports tourism-related activities in Georgia’s Samtskhe-Javakheti, Samegrelo, Kvemo-Kartli regions, and Akhmeta Municipality, including new product development, training and capacity building and regional promotion/destination management. Zrda targets primarily micro and small enterprises in communities in close proximity to the administrative boundary line and in communities with ethnic minority populations. The World Bank’s regional development projects provide lending for investments that improve infrastructure services and institutional capacity to support increased contribution of tourism to the local economy in the Imereti, Samtskhe-Javakheti, and Mtskheta-Mtianeti regions. Other donors currently supporting tourism initiatives include the Austrian Development Agency, the Deutsche Gesellschaft für Internationale Zusammenarbeit, the Czech Republic, the Caucasus Nature Fund, and the Japanese International Cooperation Agency.

C.6.2. Women's economic participation. USAID has identified that the limited opportunities for women to participate in economic activities are a major development challenge for Georgia. The Contractor must identify constraints to women's economic participation, especially regarding ownership and management, and design interventions to overcome these challenges. The Contractor must also identify women entrepreneurs and women-focused business associations in targeted sectors and provide them with specialized technical assistance to overcome issues prevent women from participating or fully benefiting from other technical assistance programs. Throughout the course of implementation, the Contractor must ensure equitable participation of women in training and capacity building activities, as well as collect and use sex-disaggregated data to monitor progress in addressing these challenges.

C.6.3. Youth economic participation. Another major development challenge for Georgia is the extent to which Georgia’s youth are able to participate in productive sectors of the economy. The Contractor must identify constraints to youth economic participation, in particular difficulties youth face during the transition from education to the workplace, and design interventions to overcome these challenges, including increased access to on-the-job learning opportunities.

C.6.4. Value chain approach. USAID applies the value chain approach to drive economic growth with poverty reduction through the integration of large numbers of MSMEs into increasingly competitive value chains. By influencing the structures, systems and relationships that define the value chain, USAID helps MSMEs to improve their products and processes, and thereby contribute to and benefit from the chain’s competitiveness. The Contractor must apply a value chain approach when identifying gaps and opportunities and designing and implementing interventions to increase targeted sectors’ competitiveness.

C.6.5. Sustainability of program interventions. The Contractor must design and implement interventions in ways that make program interventions and results achieved through these interventions sustainable beyond the life of the program. The Contractor must examine the incentives and motivations of key actors in targeted sectors for sustaining interventions and incorporate these findings into intervention design. Where possible, the Contractor must reorient practices or activities that could undermine sustainability, preferably in ways that create new opportunities. The Contractor must also promote engagement and partnerships with financial institutions and other private and public sector actors that have interests in seeing program interventions and results sustained into the future.

C.6.6. Flexibility in implementation. The Contractor and its interventions must be flexible and responsive to changing market conditions. This is especially true regarding sectors for which markets are dynamic or volatile. In case of rapidly changing market conditions and new opportunities, the Contractor may need to change or add sector(s) in order to promote increased employment and economic competitiveness. In addition, to most effectively meet the goals and objectives of the USAID Economic Security Program, the Contractor must also be prepared to shift emphasis between and within components and may do so in consultation with and with approval from the COR.

C.6.7. Public information and outreach. The Contractor must communicate opportunities, efforts, and successes under the USAID Economic Security Program to the public. Outreach efforts must be coordinated with, and should leverage, USAID public outreach programs through the COR in collaboration with the Mission Development Outreach Communication Specialist(s).

C.7 KEY PERSONNEL

The Contractor has the ultimate responsibility for managing the contract, for achieving the performance results in the program areas, and for determining the appropriate staffing pattern in support of its technical approach. The Contractor must assemble a team with the required knowledge and experience in the components mentioned above. The team must be a combination of expatriates with strong international experience, preferably in Georgia and the region, and strong, long-term local professional staff, supplemented by local and/or international short-term consultants.

The two key personnel whom the Contractor shall furnish for the performance of this Contract are as follows:

• Chief of Party

• Deputy…