720161719C00007 IAM J_A-resubmission 9-28 (1)cp signed.pdf

JUSTIFICATION AND APPROVAL (J&A) FOR OTHER THAN FULL AND OPEN

COMPETITION

TO: Deborah Broderick, Agency Competition Advocate

FROM: Christopher Powers, Director, USAID/Uganda Office of Economic Growth

DATE: September 28, 2021

SUBJECT: Justification and Approval for Other than Full and Open Competition for the USAID/Uganda Feed the Future Inclusive Agricultural Markets (IAM) Activity Contract Number 720161719C00007

1. This document sets forth the facts and rationale justifying the use of other than full and open competition, in accordance with AIDAR 706.302.This document was prepared by USAID/Uganda Office of Economic Growth.

2. The nature and/or description of the action being approved:

This is a request to approve a contract modification to modify the scope of the USAID/Uganda Feed the Future (FtF) Inclusive Agricultural Markets (IAM) Activity Contract # 720161719C00007 implemented by DAI Global LLC (DAI) with a corresponding total estimated cost (TEC) increase of $8.5 million. The modification will increase the TEC from $27,249,562 to $35,749,562. The contract period of performance (October 2019-September 2024) will remain the same. A prior $3.5 million TEC increase modification to this award under the Expedited Procedures Package for Responding to Outbreaks of Contagious Infectious Diseases” approved March 24, 2020 was issued on July 1, 2021 to expand the scope to help farmer organizations and agribusinesses recover from the negative economic impacts associated with the COVID-19 containment measures.

After the award was made, USAID/Uganda received a directive in the FY 2018 653(a) report for 30% of the overall FtF topline budget to transition from relief activities to development activities to prevent recurrent humanitarian crises. To meet this requirement, FtF-focus Missions must attribute a proportion of their EG.3/FtF budget to programming in the resilience zones. In Uganda’s FY 2019 and FY 2020, 653(a) EG.3 allocation of US$33.757M, US$10M (approximately 30%) was the resilience attribution for each year. In response to the directive and aligned with the approach of transitioning from relief to development, USAID/Uganda will need to invest adequate resources, in particular from FY 2019/20, in the resilience zones. This TEC increment is funded

Christopher Powers largely by FY 2019/20 allocations, contributing to the 30% resilience directive and includes the use of planned out year funds that will be attributed towards focused resilience.

Under the proposed modification and as discussed in more detail in Section 3 below, Section C – Statement of Work of DAI’s contract will be modified to: 1) Scale up existing interventions; and 2) Expand partnerships.

3. Description of the supplies or services required, including an estimated value:

To ensure continuity in gains made by previous USG investments and expanding the FtF IAM market-oriented approach in the regions prone to shocks and stresses, USAID/Uganda estimates that $8.5 million is required to provide the needed services through the modification of the FtF IAM Activity by:

Scaling up interventions to Karamoja region and refugee hosting districts In response to the USG approach of transitioning from relief to development, DAI will need to invest adequate resources in the resilience zones. This modification will contribute to the Mission’s resilience goals and accomplish development priorities including:

1. Increased transformation and upgrading of agricultural commodities.

2. Increased utilization of quality inputs and services.

3. Increased capacity of market actors to profitably engage in the agricultural market.

4. Strengthened implementation and enforcement of rules and regulations; and

5. Strengthened inter and intra-actor relationships.

The geographic focus recognized that the confluence of vulnerability, need, and partnership in the ZOI represents the U.S. Government’s best opportunity for reducing poverty over the long term, improving nutritional outcomes, and increasing the resilience of Ugandans. Therefore, where applicable, priority should be given to districts that have established private sector agribusinesses that can potentially expand into Karamoja region and refugee hosting districts. Currently, there are three regional offices in Mbale (Eastern Uganda), Gulu (Northern Uganda) and Mbarara (Southwestern Uganda). Consequently, with this modification, a new regional office will be opened to specifically serve Karamoja district. The refugee hosting districts will be served by the North and Southwestern Uganda regional offices.

The modification will enable DAI to establish an office in the Karamoja region to implement interventions focused on building capacity and creating opportunities for the people of Karamoja to effectively engage in market-oriented activities to improve resilience in the region. Additionally, the Karamoja office will enable DAI to effectively strengthen market-support functions; build the capacity of market players, and nurture effective relationships between market actors. The scaled-up field presence will enable DAI to quickly identify potential partners and incentivize them to invest their resources in strengthening the market system in Karamoja.

This scaling-up of activities in the designated resilience zones is estimated to cost an additional $6 million as estimated in the independent government cost estimate.

Leveraging private sector investments to strengthen the capacity of agribusinesses and farmer organizations

DAI will need to leverage significant private sector resources necessary to increase ownership of results and sustainability of impact by market actors beyond the life of the Activity. While the preferred approach in the current SOW is to work through partnerships with market actors, the findings of USAID’s initial assessment indicate that the low capacity of small agribusiness firms and farmer organizations operating in the targeted areas will require a significant amount of investment by the private sector to effectively engage with the market actors in the targeted districts.

DAI will apply the principles of Collaborating, Learning, and Adapting (CLA), currently included in the SOW to find and deploy innovative methods to enhance efficiencies in the agricultural sector. DAI will conduct rapid assessments and utilize the results to facilitate engagements between larger and smaller firms through a tiered partnership approach.

This approach will ensure that smaller agribusinesses come together to realize economies of scale; collaborate, coordinate, and build synergies; and become more competitive in the market. Although this tiered partnership approach is more cost-effective in terms of coverage, DAI will need to invest significant resources to buy down the risk of the large firms and nurture the relationships between larger and smaller firms.

This approach is estimated to cost an additional $1.5 million in grant funds and an additional $1.0 million in staff costs for a total of $2.5 million. The additional staff costs include additional technical staff for better Activity management and oversight in both the ZOI and the resilience zone.

4. Statutory authority permitting other than full and open competition:

As implemented by AIDAR 706.3, USAID has statutory authority provided in 40 U.S.C.

113 to waive the requirement for full and open competition when it would impair or otherwise have an adverse effect on programs conducted for the purposes of foreign aid, relief, and rehabilitation. Per AIDAR 706.302-70(b)(5), this authority may be used for “An award for the continued provision of highly specialized services when awarded to another resource would result in substantial additional costs to the Government or would result in unacceptable delays.” Under AIDAR 706.302-70(c)(5), use of the authority in 706.302-70(b)(5) for proposed follow-on modifications and awards for the continued provision of highly specialized services in excess of one year or over $250,000 is subject to the approval of the Agency Competition Advocate.

a) Specialized investment in market systems development: DAI has developed unique market system strengthening tools and approaches for establishing relationships, implementing interventions, and assessing the impacts of such an approach.

b) Specialized emphasis and investment in digital acceleration capabilities and gender lens investing: The current contractor has also developed unique competencies in use of digital tools to accelerate market system development through its Center for Digital Acceleration (CDA). The tools are currently used to assess the digital approaches with a high potential of transforming agriculture in Uganda. As part of their unique competencies, DAI is recognized as having unique competencies in gender lens investing by focusing on women and youth owned micro, small and medium enterprises, an emerging practice that can transform youth and women engagement in the agricultural sector. The additional resources availed through this modification would help build on these technical competencies and avoid experimentation with a different contractor.

c) Effective private sector engagement that has enabled resilience and adaptability during COVID 19 Pandemic: The current contractor has undertaken most startup processes under a constrained environment including staffing, partner engagement, intervention implementation and remote monitoring. DAI’s ability to adapt rapidly and work remotely under COVID and other external constraints, which are likely to continue, uniquely positions DAI to build on these efforts. A new contractor would have to go through a learning phase which could take longer with limited additional benefit to USAID. Beyond that, DAI has made strong inroads to the refugee-hosting communities and Karamoja where market systems are nonexistent or in their nascent stages.

6. Description of the efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was publicized as required by Federal Acquisition Regulation (FAR) 5.2 [AIDAR 705.2].

On May 14, 2021, USAID posted a notice of intent to increase the TEC for the FtF IAM Activity on the beta.sam.gov website. This notice expired on June 2, 2021.

USAID/Uganda received no responses or questions from any interested parties.

7. A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable:

Prior to the execution of this increase in ceiling, the Contracting Officer will request a cost proposal which will be reviewed for reasonableness and realism based on the current cost of activities and IGCE and will be subject to the Contracting Officer’s final determination that the costs are and remain fair and reasonable.

8. Description of the market research conducted, and the results or a statement of the reasons market research was not conducted:

The Mission did not conduct additional market research and determined the initial market assessment and analysis report (and ground truthing exercise conducted by USAID in the ZOI and the resilience zone) were current and relevant. USAID did not consider local partners as the Mission determined they lack the requisite market expertise to implement such a scope.

9. Other facts supporting the use of other than full and open competition:

USAID/Uganda is not seeking full and open competition because it would incur additional costs and unacceptable delays in achieving results that would impair the government’s programming. DAI is approximately two years into the implementation of FtF IAM Activity. USAID has invested significant resources in conducting assessments to identify capacity needs and to understand behaviors among market actors across the expanded target geographical area. In support of the Agency’s initiative to collaborate, learn, and adapt, the current scope includes necessary structures and systems for addressing the identified issues to ensure meaningful implementation of the Activity. If approved, a TEC increase before the mid-point would allow USAID to build upon activities that are underway and allow the Mission the continuity in programming.

The IAM Activity was designed to achieve USAID/Uganda’s CDCS Development Objective three (DO3), specifically to strengthen the agriculture sector through a market systems approach. As mentioned in Section C.1.3, the scope of FtF IAM Activity focuses on creating efficiencies in cross market functions (not specific to any value chain) that influence systemic changes to have a sustainable impact on the sector and the country.

The Activity will scale-up the market systems approach and focus investments on cross-market functions that enhance systemic changes.

Since IAM was designed to strengthen market systems and implementation is currently ongoing, losses associated with delays that accompany sourcing alternative providers will be costly. A new Activity would be a duplication of processes already done by DAI and, through the Collaborating, Learning and Adaptation approach, this Activity is positioned to pilot interventions until the best fit is obtained for the target markets systems.

DAI had a commendable first year of implementation and the Mission continues to be pleased with the contractor’s performance under the contract. Despite the outbreak of COVID pandemic at the start of Activity implementation, DAI put in place systems that work remotely to increase access to goods and services in the marketplace. DAI also has an excellent partnership model for on-boarding partners, and this has enabled implementation to continue amidst the COVID challenges.

10. Sources, if any, that expressed an interest, in writing, in the acquisition:

USAID/Uganda did not receive any written expressions of interest in this acquisition from any source. As noted in Section 6 above, the Mission did not receive any expressions of interest in response to the published “notice of intent.”

1. Clearance

, RLO, USAID/Uganda

Date