SOL__72016718R00016_Amendment_1.pdf

8 1

8 1 and

6 Economic Governance Activity

6 Economic Governance Activity

Reports attached

SOL# 72016718R00016 – Question and Answers

QUESTION AND ANSWERS - RFP SOL#72016718R00016

Q 1 A search of the Development Experience Clearinghouse on August 17, 2018, found four annual reports from the USAID Partnerships for Development project, for years 1-4. Can USAID please confirm whether all PfD deliverables and project documents that should be publicly available are accessible on

DEC?

A.1 – USAID confirms that annual reports for years 1-4 are on the DEC. Additional reports are included as attachments in Section J. See amendment of Solicitation.

Q.2 Will offerors who pass Stage 1 and are shortlisted to participate in Stage 2 of the procurement be given an opportunity to submit additional clarification questions to USAID?

A.2 USAID confirms that Offerors who will pass Stage 1 will not be given an opportunity to submit additional clarification questions to USAID.

Q.3 The table and notes in Section H.4.A (pg. 36) include reference to a base period and option years, plus specific periods of performance for each. Can USAID please confirm that these entries are not relevant to the proposed Kosovo Economic Governance Activity?

A.3 A five-year award is anticipated. USAID confirms that Section H.4. A is applicable for this contract and refers specifically to DBA insurance.

Q.4 May offerors include a cover page in the technical proposal that does not count toward the page limit?

A.4 USAID confirms that offerors may include cover page in the technical proposal and that does not count toward the page limit. See Section L.6.1.of the Solicitation (page 85).

Q.5 May offerors include a list of acronyms and abbreviations in the technical proposal that does not count toward the page limit?

A.5 USAID confirms that a list of acronyms and abbreviations can be included in the technical proposal and not count toward the page limit.

Q.6 Per Section L.6.1 (pg. 85), we understand that the organizational chart is to be included as part of the Technical Approach chapter of the technical proposal. Can USAID please confirm that the organizational chart need not be included again in the Management Plan Structure, with the narrative of this section referring to the organizational chart in the Technical Approach section?

A.6 USAID confirms that Organizational Chart must be included only as part of the Management Structure plan. See amendment of the solicitation, section L.6.2.

Q.7 Per Section L.6.1 (pg. 85), can USAID please confirm that offerors may use either A4 or 8.5”x11” sized paper for their submissions?

A.7 USAID confirms that offerors may use either A4 or 8.5”x11” sized paper for their submissions.

Q.8 Section L.6.1 (pg. 85) indicates that the Executive Summary “does count against page limit.”

Similarly, the Table of Contents “does count against the page limit.” Can USAID please confirm that this is meant to indicate that the 2 pages for the Executive Summary and the 1 page for the Table of Contents count toward the 25-page limitation for the Technical Approach chapter?

A.8 USAID confirms that cover page, executive summary, and table of contents do not count toward the 25-page limitation of the technical approach.

Q.9 Section L.6.1 (pg. 85) lists limitations of 25 pages for the Technical Approach, and 16 pages for the Management Structure Plan. Can USAID please confirm that the technical proposal submitted during Stage 1 should be composed of the (1) Technical Approach (25 pages maximum) and (2) Management

Structure Plan (16 pages maximum), for a total of 41 pages (excluding those elements identified in the RFP that do not count against the page limit)?

A.9 USAID confirms that the total page limitation is 41 (1. Technical approach- maximum 25 pages;

and 2. Management Structure Plan – maximum 16 pages).

Q.10 Can USAID please confirm that offerors need not submit (nonexclusive) letters of commitment from proposed key personnel candidates?

A.10 USAID confirms that offerors do need to submit a (nonexclusive) letter of commitment from proposed key personnel candidates.

Q.11 Section L.4(e)(1) (pg. 82) and L.7.2(a) (pg. 86) state that “the offeror must submit the cover page (Section A) of this Solicitation [Standard Form (SF) 33, "Solicitation, Offer, and Award"], with blocks 12 through 18 completed, with an original signature of a person authorized on behalf of the Offeror to sign the offer;” however, there is no cover page/SF 33 included in the RFP. Can USAID please provide it?

A.11 USAID confirms that SF 33 form is included in the amendment of the Solicitation.

Q.12 Assuming all relevant contract past performance information for the offeror and any major subcontractors is included in PPIRS, can USAID confirm that the offeror should NOT submit any past performance information sheets? Should offerors in such situations include a list of relevant contract names and numbers that can be found in the PPIRS?

A.12 Attachment 2 of the Solicitation must be submitted with all required information as per instructions in the Section L.7.2(d). No additional list is requested.

Q.13 Can USAID confirm that offerors may submit EBDs for and proposed personnel in addition to key personnel?

A.13 USAID confirms that Offerors must submit EBDs for the Key Personnel. See instructions on the Section L.7.2(h) - Stage 2.

Q.14 On page 84, the RFP states that the Technical Approach must “present an organizational chart.”

On page 85, the RFP states that “the management structure plan must also explain the organizational and management structure (this should include the organizational chart) which includes all technical staff members and their roles and responsibilities.”

Could USAID please confirm that the organizational chart required in the Technical Approach does not count against the page limit and that the organizational chart does not need to be included in the Management Structure Plan?

A.14 USAID confirms that Organization Plan must be submitted only as part of the Management Structure Plan. See amendment of the Solicitation.

Q.15 On page 85, the RFP states that the technical proposal must include two sections: a Technical Approach and a Management Structure Plan. Under “Technical Approach,” the RFP states that “technical proposals are limited to 25 (twenty-five) pages.” On the same page, the RFP states that the Management Structure Plan is limited to 16 pages. Could USAID please confirm that the total page limit for the technical proposal, as opposed to the Technical Approach, is 41 pages (that is, 25 pages for the Technical Approach and 16 pages for the Management Structure Plan)?

A.15 See Answer A.9.

Q.16 Could USAID please clarify whether it intends for any grants under contract to be included in the Kosovo Economic Governance Activity? If USAID does intend to include grants under contract in the activity, could USAID share a plug number for budgeting purposes?

A.16 USAID confirms that no grants under contract are envisioned under the Economic Governance Activity.

Q.17 In section H.18 on page 44, the RFP references a Gender Analysis in the Statement of Work. The Statement of Work, however, does not mention a Gender Analysis. Could USAID please clarify this reference?

A.17 USAID confirms that Gender Analyses is not required. See Section H.18 of the amendment of Solicitation.

Q.18 Could USAID please provide clarification on the structure and location of the oral presentation?

A.18 USAID confirms that at least the proposed COP and one other key personnel at offerors discretion must participate in the presentation. The Offeror may bring up to three (3) individuals to deliver the presentation in addition to mandatory COP plus one key personnel. Specific details will be provided to those progressing into Stage 2

The oral presentations will be held by internet/online media or any method approved by the Contracting Officer. See section L.7 1 of the Solicitation. More information will be provided at the appropriate time.

Q.19 Under Objectives 1 and 2, the RFP prescribes some activities that the contractor “must” undertake, while others are referred to as activities that the contractor “should consider supporting.”

Budget planning activities (budgeting, forecasting, planning and execution), VAT reform, and regulation of non-tax revenue are listed as “current priorities” on page 15. Please advise whether all activities identified in Section C are required to be supported by the contractor.

A.19 USAID confirms that all activities under Section C should be supported by the contractor.

As per FAR definition “Should” means an expected course of action or policy that is to be followed unless inappropriate for a particular circumstance.

Q.20 A search of the Development Experience Clearinghouse (DEC) yields the Annual Reports for Years 1-4 of USAID’s Partnerships for Development (PfD) activity. Would USAID kindly provide all other relevant deliverables, either by attaching them to the RFP or by uploading them to the DEC?

A.20 See answer A.1.

Q.21 Please confirm that only Key personnel are to be named in the proposal.

A.21 USAID confirms that only Key Personnel are to be named in the proposal.

Q.22 Section L.6.1 (page 84) lists the Organizational Chart as the last bullet under the required order for the Technical Approach section; however, Section L.6.2 (page 85) also refers to the organizational chart as part of the Management Structure Plan. To facilitate the logical flow of the proposal, please confirm that the org chart can be provided under the Management Structure Plan.

A.22 See answer A.6.

Q.23 Regarding Section L.7.1 (Oral Presentation, page 86): We believe there is a significant chance that the same Key Personnel candidate(s) may be proposed by multiple Offerors.

In order to avoid a conflict of interest at the oral presentation stage, please confirm that the Offeror may substitute a Home Office candidate for the “one additional Key Personnel” to present with the Chief of Party.

A.23 See answer A.18.

Q.24 The cover letter states that, “USAID discourages the use of exclusive agreements as this limits USAID’s and Kosovo’s ability to receive the best services.” Please confirm that this refers to potential partner organizations as well as key personnel.

A.24 This applies to subcontractors and personnel as well. For subcontractors, this requirement applies to both international and local organizations.

Q.25 The SF 33 (which is required as a condition of offer acceptability by RFP Section L.4(e)1 on page

82) is typically submitted as part of the cost volume; however, for this procurement, the cost volume is not required until Stage 2. Please confirm that Offerors are NOT required to submit the SF 33 as part of Stage 1. If the SF 33 *is* required:

A.25 USAID confirms that the SF 33 form must be submitted in stage 2 as part of the Cost Proposal.

See page 86.

a. Could USAID please provide it (as we did not find it attached to the RFP)?

A.25.a See answer number A.11.

b. Could USAID confirm that the SF 33 will not count against the page limit for the technical proposal?

A.25.b USAID confirms that the SF 33 will not count against page limitations.

Q.26 Section L.4(e) on page 82 establishes conditions for offer acceptability. These include the submission of cost/pricing information and Reps & Certs (items 2 and 3 in the list). Since these are part of the cost volume (discussed in Section L.7 and required at Stage 2), please confirm that failure to submit them at Stage 1 will not cause the Offeror to be disqualified from this procurement.

A.26 The Cost proposal must be submitted in Stage 2. Cost and pricing information and Reps and Certs are required to be submitted in Stage 2. Failure to submit these documents in Stage 1 will not lead to disqualification.

Q.27 Section L.7.d (Cost Volume, Part 4 – Past Performance, RFP page 89) specifically references “contracts” that meet specific criteria as acceptable examples of relevant past performance. Please confirm that USAID will also accept other mechanisms, such as grants or cooperative agreements.

A27. USAID confirms that relevant past performance of other mechanisms are acceptable.

Q.28 For budget purposes, could USAID please clarify the anticipated starting date of this project?

A.28 USAID anticipates start date of the award o/a the end of January, 2019.

Q.29 Could USAID please provide an estimated date for the Stage 1 Selection Decision (and Invitation to Stage 2)?

A.29 USAID anticipate Stage 1 Selection date o/a mid-October, 2018 and late October, 2018 invitation for oral presentation.

Q. 30 Could USAID please confirm that clauses 52.216-10 Incentive Fee (June 2011) and 752.216-70 Award Fee (May 1997)—which are both listed in the table of clauses incorporated by reference in Section I.1 (page 55)—are not applicable, since this is a CPFF contract?

A.30 USAID confirms that clause 52.216-10 Incentive fee (June 2011) is not applicable for this award.

Clause 752.216-70 Award fee (May 1997) is applicable for this award. Amendment of the Solicitation is updated accordingly.

Request for Proposals (RFP) No.: SOL#72016718R00016 - 01 Issue Date: August 10, 2018 Questions Due Date: August 20, 2018 at 5pm, Kosovo local time Stage 1, Proposals Submission Due Date: September 24, 2018 at 5pm, Kosovo local time Stage 2, Proposals Submission Due Date: o/a late October, 2018 Oral Presentations of the Offerors in Stage 2 TBD

SUBJECT: Request for Proposal (RFP) SOL#72016718R00016 - USAID/Kosovo Economic Governance Activity

Dear Prospective Offeror:

The United States Government, represented by the U.S Agency for International Development (USAID), through the Regional Contracting Office in Kosovo, is seeking proposals from qualified organizations to implement USAID/Kosovo Economic Governance Activity, as described in this solicitation.

USAID/Kosovo anticipates awarding one Cost-Plus-Fixed-Fee Completion-type contract as a result of this solicitation covering an estimated period of five (5) years from the date of contract award. Subject to availability of funds, USAID estimates an award for the activity up to a ceiling price of $11,500,000.

Further information on available funding and the evaluation of cost proposals is in Section M. The principal geographic code for this contract is 937. The North American Industry Classification System (NAICS) code for this acquisition is 541990. This requirement is subject to the availability of funds.

This procurement will be conducted under full and open competition, pursuant to Part 15 of the Federal Acquisition Regulation (FAR) (48 CFR Chapter 1). All types of organizations are eligible to compete;

USAID encourages the participation to the maximum extent possible of local Kosovar organizations, small business concerns, veteran owned small business, service-disabled veteran small business, HUB zone small business, small disadvantaged business, and women-owned small business concerns and small business concerns in this activity as the prime contractor or as subcontractors. USAID discourages the use of exclusive agreements as this limits USAID’s and Kosovo’s ability to receive the best services.

Only electronic proposals will be accepted. Proposals must be submitted in via email to Urime Abdyli at:

uabdyli@usaid.gov and Nadeem Shah at: nshah@usaid.gov. If your organization decides to submit a proposal in response to this solicitation, detailed requirements for Offerors’ proposals are outlined in Section L of this solicitation. Proposals must be signed by an official who is authorized to bind the organization and are to be submitted to USAID no later than the closing date and time stated above.

Any questions regarding this solicitation must be submitted in writing via email to Urime Abdyli at:

uabdyli@usaid.gov and Nadeem Shah at: nshah@usaid.gov by the date and time specified above.

local time

SOL#72016718R00016 -01

USAID/Kosovo Economic Governance Activity

Contents

PART I – SCHEDULE

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE STATEMENT

B.2 CONTRACT TYPE

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

B.4 PRICE SCHEDULE

B.5 INDIRECT COST

B.6 ADVANCE UNDERSTANDINGS ON CEILING INDIRECT COST RATES AND FINAL

REIMBURSEMENT FOR INDIRECT COSTS

B.7 COST REIMBURSABLE

B.8 PAYMENT OF FIXED FEE

B.9 MULTI-YEAR CONTRACT AND CANCELLATION CEILING

SECTION C – STATEMENT OF WORK

C.1 TITLE OF ACTIVITY

C.2 GOAL

C.3 DEVELOPMENT CHALLENGE

Business Enabling Environment

Public finances

C.4 THEORY OF CHANGE

C.5 OBJECTIVES

C.6 GUIDING PRINCIPLES

C.7 RELATIONSHIP WITH OTHER USAID ACTIVITIES AND STAKEHOLDERS

SECTION D – PACKAGING AND MARKING

D.1 AIDAR 752.7009 MARKING (JAN 1993)

D.2 BRANDING

D.3 BRANDING AND MARKING POLICY

SECTION E – INSPECTION AND ACCEPTANCE

E.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

E.2 INSPECTION AND ACCEPTANCE

SECTION F – DELIVERIES AND PERFORMANCE

F.1 NOTICE LISSTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

F.2 PLACE OF PERFORMANCE

F.3 PERIOD OF PERFORMANCE

F.4 PERFORMANCE STANDARDS

F.5 KEY PERSONNEL

F.6 REPORTS AND DELIVERABLES OR OUTPUTS

F.7 DISTRIBUTION OF PROJECT MATERIALS, PARTICIPATION IN PARTNER MEETINGS

AND PUBLIC EVENTS

F.8 SUBMISSION REQUIREMENTS FOR DEVELOPMENT EXPERIENCE DOCUMENTS

(Sept 2013)

SECTION G – CONTRACT ADMINISTRATION DATA

G.1 ADMINISTRATIVE CONTRACTING OFFICE

G.2 CONTRACTING OFFICER'S AUTHORITY

G.3 CONTRACTING OFFICER'S REPRESENTATIVE (COR)

G.4 TECHNICAL DIRECTIONS/RELATIONSHIP WITH USAID

G.5 PAYMENT AND INVOICES

G.6 ACCOUNTING AND APPROPRIATED DATA

SECTION H – SPECIAL CONTRACT REQUIREMENTS

H.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

H.2 FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL CONFERENCES

H.3 AIDAR 752.225-70 SOURCE AND NATIONALITY REQUIREMENTS (FEB 2012)

H.4 INSURANCE AND SERVICES

H.5 AIDAR 752.228-70 MEDICAL EVACUATION (MEDEVAC) SERVICES (JULY 2007)

H.6 AUTHORIZED GEOGRAPHIC CODE

H.7 LOGISTIC SUPPORT

H.8 EXECUTIVE ORDER ON TERRORISM FINANCING

H.9 PROHIBITION AND ASSISTANCE TO DRUG TRAFFICKING

H.10 752.7007 PERSONNEL COMPENSATION (JUL 2007)

H.11 ADDITIONAL REQUIREMENTS FOR PERSONNEL COMPENSATION

H.12 LANGUAGE REQUIREMENTS

H.13 CONFIDENTIALITY AND OWNERSHIP OF INTELLECTUAL PROPERTY

H.14 CONSENT TO SUBCONTRACTS

H.15 INTERNATIONAL TRAVEL APPROVAL

H.16 GOVERNMENT FURNISHED FACILITIES OR PROPERTY

H.17 ENVIRONMENTAL COMPLIANCE AND REQUIREMENTS

H.18 GENDER CONSIDERATION

H.19 USAID IMPLEMENTATION OF SECTION 508 OF THE REHABILITATION ACT OF 1973

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

TECHNOLOGY ACCESSIBILITY

H.20 ADS 302.3.5.9 NONDISCRIMINATION (JUNE 2012)

H.21 USAID DISABILITY POLICY - ACQUISITION (DECEMBER 2004)

H.22 ADS 302.3.5.17 LIMITATION ON SUBCONTRACTING TO NON-LOCAL ENTITIES

(JULY 2014)

H.23 ADS 302.3.5.21 USAID IMPLEMENTING PARTNER NOTICES (IPN) PORTAL FOR

ACQUISITION (JULY 2014)

H.24 ADS 302.3.5.19 USAID-FINANCED THIRD-PARTY WEB SITES (NOV 2017)

H.25 ADS 302.3.5.22 SUBMISSION OF DATASTS TO DEVELOMENT DATA LIBRARY (OCT

2014) 49

H.26 ELECTRONIC PAYMENTS SYSTEM

H.27 LIMITATION ON ACQUISITION OF INFORMATION TECHNOLOGY (DEVIATION

NOs. M/OAA-DEV-FAR-18-2c and M/OAA-DEV-AIDAR-18-2c) (APRIL 2018)

H.28 ADS 302.3.5.5 REPORTING OF FOREIGN TAXES (JULY 2007)

PART II CONTRACT CLAUSES

SECTION I – CONTRACT CLAUSES

I.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

I.2 FAR 52.204-1, APPROVAL OF CONTRACT (DEC 1989)

I.3 FAR 52.217-8 OPTION TO EXTEND SERVICES (NOV 1999)

I.4 FAR 52.229-8 TAXES – FOREIGN COST-REIMBURSEMENT CONTRACTS (MAR 1990)

I.5 FAR 52.247-67, SUBMISSION OF TRANSPORTATION DOCUMENTS FOR AUDIT (FEB

2006) 58

I.6 AIDAR 752.7013 CONTRACTOR-MISSION RELATIONSHIPS (JUNE 2018)

I.7 AIDAR 752.7032, INTERNATIONAL TRAVELAPPROVAL AND NOTIFICATION

REQUIREMENTS (APR 2014)

I.8 AIDAR 752.7037 CHILD SAFEGUARDING STANDARDS (AUG 2016)

I.9 FAR 52.252-2, CLAUSES INCORPORATED BY REFERENCE (FEB 1998)

PART III LIST OF DOCUMENTS, EXHIBITS, AND OTHER ATTACHMENTS

SECTION J – LIST OF ATTACHMENTS

PART IV REPRESENTATIONS AND INSTRUCTIONS

SECTION K - REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF

OFFERORS

K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

K.2 FAR 52.204-3, TAXPAYER IDENTIFICATION (OCT 1998)

K.3 FAR 52.204-8,ANNUAL REPRESENTATIONS AND CERTIFICATIONS (FEB 2018)

K.4 FAR 52.204-17 OWNERSHIP OR CONTROL OF OFFEROR (JUL 2016)

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

K.6 FAR 52.209-7, INFORMATION REGARDING RESPONSIBILITY MATTERS (JUL 2013).71

K.7 FAR 52.209-11 REPRESENTATION BY CORPORATION REGARDING DELINQUENT

TAX LIABILITY OR A FELONY CONVICTION UNDER ANY FEDRAL LAW (FEB 2016)

K.8 FAR 52.219-1, SMALL BUSINESS PROGRAM REPRESENTATIONS (OCT 2014)

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

K.10 FAR 52.222-25, AFFIRMATIVE ACTION COMPLIANCE (APR 1984)

K.11 FAR 52.230-1, COST ACCOUNTING STANDARDS NOTICES AND CERTIFICATION

(OCT 2015)

K.12 FAR 52.230-7, PROPOSAL DISCLOSURE--COST ACCOUNTING PRACTICE CHANGES

(APR 2005)

SECTION L – INSTRUCTIONS TO OFFERORS

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

1998) 81

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

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

L.4 GENERAL INSTRUCTIONS TO OFFERORS

L.5 SUBMISSION/DELIVERY INSTRUCTIONS

L.6 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL - STAGE

1 84

L.7 INSTRUCTIONS FOR THE PREPARATION OF THE ORAL PRESENTATION AND COST

PROPOSAL - STAGE 2

SECTION M – EVALUATION CRITERIA

M.1 GENERAL INFORMATION

M.2 STAGE 1 - EVALUATION

M.3 STAGE 2 - EVALUATION

Oral Presentations and Cost

Evaluation of Past Performance

M.5 DETERMINATION OF COMPETITIVE RANGE

M.6 SOURCE SELECTION

PART I – SCHEDULE

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE STATEMENT

The purpose of the Economic Governance Activity is to reduce opportunities for economic corruption through improvements to economic governance, thereby encouraging investment in Kosovo’s economy.

B.2 CONTRACT TYPE

The U.S. Government contemplates a Cost-Plus-Fixed-Fee (CPFF) completion contract resulting from this solicitation.

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

a. The estimated cost for the performance of the work require hereunder, exclusive of fixed fee, if any, is $TBD. The fixed fee, if any, is $TBD. The estimated cost plus fixed fee, if any, is $TBD.

b. The contractor will not be paid any sum in excess of the total estimated cost.

c. 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, if any) for performance hereunder is $[To be added upon award]. 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" (FAR 52.232-22).

d. Funds obligated hereunder are anticipated to be sufficient through [TBD].

B.4 PRICE SCHEDULE

Line Item Total Direct Cost $[.] Indirect Cost $[.] Fixed Fee $[.] Cost-Plus-Fixed-Fee Ceiling Price $[.]

These amounts may not be adjusted without a written modification signed by the Contracting Officer. The contractor will not bill any amounts against this contract in excess of the amounts specified for each line item as illustrated above.

B.5 INDIRECT COST

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

% 1/ 1/ 1/ % 2/ 2/ 2/ % 3/ 3/ 3/

1/Base of Application:

Type of Rate:

Period:

2/Base of Application:

Type of Rate:

Period:

3/Base of Application:

Type of Rate:

Period:

B.6 ADVANCE UNDERSTANDINGS ON CEILING INDIRECT COST RATES AND FINAL

REIMBURSEMENT FOR INDIRECT COSTS

(a) Reimbursement for indirect costs shall be at the lower of the negotiated final (or predetermined) rates or the following ceiling rates:

Description Rate Base Period

% 1/ 1/ % 2/ 2/ % 3/ 3/

1/ Base of Application:

Period:

2/ Base of Application:

Period:

3/ Base of Application Period

(b) 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.

(c) This understanding shall not change any monetary ceiling, obligation, or specific cost allowance or disallowance. Any changes in classifying or allocating indirect costs require the prior written approval of the Contracting Officer.

B.7 COST REIMBURSABLE

The U.S. dollar costs allowable will be limited to reasonable, allocable, and necessary costs determined in accordance with FAR § 52.216-7, “Allowable Cost and Payment,” FAR § 52.216-8, “Limitation of Cost,” FAR § 52.232-22, “Limitation of Funds,”, and AIDAR 752.7003, “Documentation for Payment.”

B.8 PAYMENT OF FIXED FEE

a. USAID will pay a proportion of the contractor’s fixed fee pursuant to FAR § 52.216-8, “Fixed Fee,” upon the receipt of an invoice deemed proper by the USAID Financial Management Office.

The fixed fee will be paid on a quarterly fixed fee schedule with fee payments based on the reasonable achievement of the activities’ performance standards to be verified by the COR.

b. In the event the Contractor does not submit required deliverables by the conclusion of the period of performance, the Contracting Officer may adjust the fixed fee proportionately to the deliverables accepted.

B.9 MULTI-YEAR CONTRACT AND CANCELLATION CEILING

USAID/Kosovo considers this contract 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. However, as a cost-reimbursement contract, USAID/Kosovo will authorize the reimbursement for all allowable costs incurred by the Contractor pursuant to FAR § 52.216-7, “Allowable Costs and Payment.” The Contractor will not incur any costs that require amortization over the contract’s period of performance in the event that the Contracting Officer cancels the contract pursuant to FAR 52.217-2. Thus, $0 will serve as the cancellation ceiling for each cancellation date. Accordingly, no requirement to include cancellation dates in the contract exists.

[END OF SECTION B]

SECTION C – STATEMENT OF WORK

C.1 TITLE OF ACTIVITY

USAID/Kosovo Economic Governance Activity (the “Activity”).

C.2 GOAL

The goal of the Activity is listed in Section B.1.

C.3 DEVELOPMENT CHALLENGE

Business Enabling Environment

Inefficient regulations and burdensome inspections significantly contribute to Kosovo’s large informal economy as well as create the space for corruption. Though data on the size and scope of Kosovo’s informal sector is difficult to gather, recent estimates suggest that around 25% of workers are employed in the informal sector. A shadow or informal economy is more likely to be small when the government can control corruption, maintain rule of law, and promote regulatory quality.1

Most firms in Kosovo identify informal competition as a major or severe obstacle to growth, one of the highest rates in the world, and the highest in the region. This informality reduces the taxes and other normal revenues the government raises from firms in the informal sector, and along with unpredictable or burdensome regulation, incentivizes formal firms to stay small (99% of Kosovo’s businesses are micro), avoid paying taxes, and avoid regulations to cut costs and boost competitiveness. It also creates opportunities for economic corruption, such as paying “gifts” to move the processes along or to avoid following regulations or undergoing inspection all together, and exploitation by more well-connected businesses to avoid compliance and inspection.

Nevertheless, Kosovo has made significant improvements to its business environment by streamlining the regulatory regime, as measured by the World Bank Doing Business Report. The Doing Business methodology has proven to be an effective tool, offering the government both the political capital accompanying international visibility of Kosovo’s performance, and a concrete, widely recognized menu of reform areas on which to focus. Kosovo’s current “ease of doing business” ranking of 40th in the world reflects significant improvements on several indicators, including Starting a Business (10th) and Getting Credit (12th). With USAID support, Kosovo’s central government has also developed a now-institutionalized task force and working groups that were established under the leadership of the Ministry for Trade and Industry (MTI) to coordinate in addressing Kosovo’s “Doing Business” performance.

Despite these impressive achievements, there is a need for further targeted improvements in a range of areas to prevent backsliding in the implementation of regulation, and reduce opportunities for corruption, including increasing Kosovo’s capacity to support reform implementation internally and independently.

1 Cojocaru, A. (2017). Jobs Diagnostic Kosovo. Jobs Series Issue No. 5. World Bank.

For example, while there has been some progress in construction permitting over the years, further improvement is needed at a municipal level to increase the accountability and efficiency of the process, thus reducing opportunities for corruption. The private sector consistently listed construction permitting as being a laborious process, rife with opportunities for corruption. As a result, there are over 350,000 unpermitted buildings registered that yet have to undergo the process of legalization. If these buildings are legalized, they can be used as collateral to secure their loans, thus boosting investment while increasing the tax base for municipalities.

Although Doing Business is an effective tool to encourage reform, it does not measure every factor affecting private sector growth. Thus, there is a need to take a broader view to improving the business environment and reducing the space for corruption. The MCC Constraints Analysis for Kosovo (2017) found that while there are good economic policies on paper, line ministries inconsistently implement them, which constrains investment. According to the World Bank’s Kosovo Systematic Country Diagnostic, most commercial legislation has been enacted in line with EU standards, including laws related to companies, bankruptcy, contracts, registration of property, foreign investment, accounting, and mortgages. However, weak institutional capacity, transparency, accountability, and regulatory enforcement undermine their implementation and are a major obstacle to successful business operations.

Inconsistent application of laws and regulations across institutions--whether deliberate or due to capacity constraints--as well as between the central and local levels, creates regulatory gaps that constrain predictability for businesses and increases the incentive for corruption. Interactions between businesses and the GOK’s public administration appear to be most challenging in the areas of tax administration, licensing, and permits.2

Public finances

This is a critical time for Kosovo’s financial management: following the adoption of formal measures to limit the government deficit, the anticipated reform of VAT collection, and the low-to-nonexistent import tariffs for the country’s EU and CEFTA trading partners, the country’s fiscal health will increasingly depend on boosting domestic revenues. The pressure and adverse incentives associated with these valuable but politically challenging reforms compounds the risk of backsliding, including the potential deterioration in the implementation of recently adopted governmental spending limits.

Despite support from USAID and others, and tremendous progress in building the government’s capacities and competencies, Kosovo has not yet attained adequate capacity in sound public financial management, including in budget planning as well as tax policy development (in particular, VAT collection and refund policies). Together with the weaknesses in the organizational structure of Kosovo’s tax administration, this leads to a lack of transparency in how the GOK generates and spends its resources, thus creating a vast space for economic corruption and abuse. Additional support is required to solidify the GOK’s sustainable capacity to independently implement and improve reform. In addition, weaknesses in Kosovo’s tax administration and collection limits the public’s trust in the taxation system and leaves firms less willing to pay taxes, as well as incentivizing firms to remain small, informal, and more vulnerable to corruptive influences.

2 Millenium Challenge Corporation (2017). Kosovo Constraints Analysis.

C.4 THEORY OF CHANGE

As contemplated by USAID’s FY2014 to FY2019 Country Development Cooperation Strategy (CDCS), in recent years USAID’s assistance shifted to consolidating and building on successes at the center, while beginning to scale back support for those ministries, agencies, or functions that are capable of successfully fulfilling their mandate without full-time donor assistance. The next phase of assistance will focus on providing support to Kosovo in its journey to eventual self-reliance: continuing to consolidate previous successes with an emphasis on implementing reforms and enhancing local capacity to implement future reforms without assistance by the end of this activity.

The theory of change for this activity is: IF the regulations and associated procedures affecting businesses (the business enabling environment) are improved and streamlined, THEN private sector actors’ incentives for non-compliance and informality will be reduced; similarly, IF the collection and management of public funds (public financial management) are improved and transparency increased, THEN macroeconomic instability and opportunities for misuse of funds will be reduced. Thus, together these advancements in the business regulatory environment and public financial management will strengthen economic governance to reduce opportunities for economic corruption in both primarily governmental functions and in those areas where the public and private sector directly intersect.

Economic governance is defined as the creation and implementation of policies, rules, and regulations that govern the economy and public finances. Economic corruption is the extent to which there are opportunities for abuse of power and/or exploitation of an unpredictable business environment for economic gain.

Further, IF public awareness and private sector collaboration on these improvements are increased through strategic communication), THEN public perception of corruption will decrease, and confidence in the economic potential of Kosovo’s private sector will increase, contributing to increased investment.

C.5 OBJECTIVES

The Activity objectives below are closely related and it is expected that many interventions will address more than one. The Contractor will seek to consolidate and learn from earlier gains, such as measured in the World Bank Doing Business report and achieved under USAID’s Partnerships for Development (PfD) activity.

In developing areas of focus and interventions to achieve the expected results, the Contractor must employ a flexible, demand-driven approach that builds on consultations with all stakeholders, including those in the private sector, and USAID. While USAID has identified some particular priorities and potential areas of intervention within each Objective, the operating environment for this type of assistance is unpredictable and may necessitate changes. Thus, the Contractor must practice adaptive management of the Activity to seize new opportunities and adjust to challenges as they develop. For additional details, see Section C.6 “Guiding Principles.” This Activity will support many priorities and commitments identified by the Stabilization Association Agreement (SAA) between Kosovo in the EU, and, as a whole, interventions will reflect SAA priorities. This Activity may be implemented simultaneously with one or more other economic anti-corruption activities and must be closely coordinated with those activities in working toward shared goals.

All of the Contractor’s interventions in the performance of this SOW must be approved by the Contracting Officer’s Representative (COR) via the annual work plan (AWP). The AWP is a living document and can be amended on an as needed basis with the approval of the COR. Upon award, the Contractor must mobilize personnel and work with USAID to engage the GOK and other stakeholders in a consultative and participatory process to develop an implementation work plan to achieve the objectives.

USAID requires a comprehensive approach for achieving the Objectives and ensuring the activities are sustainable. For each proposed intervention, offeror must propose one or more performance standards and describe how these interventions contribute to reaching an Objective(s) and Expected Result(s). For each of the proposed performance standards, offerors have the flexibility to propose their own solutions but must define the success criteria. Wherever possible, offerors must propose a benchmark against which their performance should be measured. Offerors must provide definitions to key terms used in their proposals so that a non-expert in the sector can understand their technical approach. When relying on international best practices, Offerors must give a brief explanation on what these practices are and how they have proven to be successful. Offerors may expand on the Expected Results within each Objective but not reduce them. The Contractor must address all Objectives. The performance standards must be measurable and structured to permit an assessment of the Contractor’s performance in achieving all three Objectives and each individually. Performance standards form the basis for the Monitoring, Evaluation and Learning Plan under Section F.6.

OBJECTIVE 1: IMPROVED BUSINESS ENABLING ENVIRONMENT

An improved business environment reduces informality and increases the transparency and efficiency of transactions both within the public sector and between the public and private sector, thus reducing the opportunities for the abuse of power and corruption. Interventions addressing this objective will expand the advances Kosovo has made to improve its business environment and reduce avenues for corruptive influence. In addition, the Contractor must build institutional policy development and intergovernmental coordination, and further strengthen the transparency, efficiency, accountability, and implementation of the regulatory requirements applied to businesses at both national and sub-national levels. To this end, the Contractor must assist the relevant Ministries to develop incentives and structures to identify, recruit, and finance/retain the necessary expertise to carry out these reforms without continued donor assistance.

Given the continued deficiencies identified in recent assessments such as the MCC’s constraints analysis, the Contractor must identify, assess, and address critical issues to improve the enabling environment by reducing informality and increasing transparency. The Contractor must work with the Ministry for Trade and Industry, or MTI, (in coordination with anticipated World Bank programming) to support the reform of Kosovo’s inspections system such as in the area of market surveillance (consumer protection). In addition, the Contractor must seek to support (in coordination with anticipated EU programming) increasing the capacity of the Government of Kosovo to improve the legislation, regulation, and/or procedures associated with cross-border trade, in alignment with the EU acquis and WTO principles.

There are some areas where consolidation of previous progress is needed. With the support of PfD, the Ministry of Environment and Spatial Planning (MESP) made significant progress in the legalization of constructions without permit, as well as further advancing construction and spatial planning reforms (in particular, construction permitting, which constituted Kosovo’s lowest ranking among the Doing Business indicators). Building on these advances, the Contractor must seek to support the implementation of legalization of unpermitted construction (including but not limited to the implementation of associated legislation by the GOK). The contractor must also support the implementation of reforms in construction permitting (primarily at the municipal level) to reduce uncertainty and opportunities for corruption around where businesses and individuals can build and obtain the construction permit.

Other current priorities within the regulatory and inspection environment which the Contractor should consider supporting include: supporting MTI with the implementation of the new Law on Business Organizations and working with the MoF and MTI to provide support on the implementation of the anticipated new trade legislation. The Contractor may find USAID’s Municipal Competitiveness Index (MCI) as a valuable resource to identify areas of resistance to reform at a sub-national level.

Expected Results:

Strengthened regulatory and inspection environment;

Increased transparency, efficiency, and accountability in implementing and carrying out commercial rules, regulations and laws;3

Expanded legalization of unpermitted buildings and increased efficiency and transparency of the construction permitting process;

Improved trade regime in alignment with EU acquis, EU-Kosovo SAA, and WTO principles;

Targeted GOK Ministries and institutions are able to carry out the above reforms without donor support by the end of the contract.

OBJECTIVE 2: STRENGTHENED PUBLIC FINANCIAL MANAGEMENT

This component will expand the advances Kosovo has made to improve its budgeting and public financial management practices, strengthening the government’s ability to independently manage the country’s domestic resources with decreased or no donor support. The Contractor must assist the Government of Kosovo to improve and sustain macroeconomic and tax policy and maintain and extend improvements in public financial management, with the aim of ensuring overall macroeconomic and fiscal stability. This includes supporting central and municipal levels of government in assessing and realizing opportunities for private sector investment in priority social services and infrastructure to accelerate economic growth.

It is important to link financial management with any reforms in licensing, permitting, and taxation to ensure that adequate revenue is planned and realized while reforms in the business environment are implemented that may temporarily decrease traditional revenue streams (such as the reforms in Value Added Tax (VAT) administration, the elimination of non-cost-recovery-based fees, and potential tariff reductions).

Interventions advancing this Objective must include, but are not limited to, support to the streamlining and improvement of Kosovo’s tax collection processes (working with the Tax Administration authority of MoF, or “TAK”, and in coordination with GiZ’s ongoing assistance in this area), with a particular focus on integrating risk management systems to reduce the burden of compliance on businesses, and assisting

3 This result is complementary to and not redundant to any other applicable USAID activities.

TAK to reform its outcome performance management. The Contractor also must build the capacity of senior government officials and departments responsible for macroeconomic and fiscal stability (such as the MoF, MTI, Tax Administration (TAK), and possibly Municipal Governments). Current priorities include Kosovo’s improved but not yet adequate budget planning (budgeting, forecasting, planning, and execution) and accounting capacities, the anticipated reform of VAT, and the improved policy and regulation of non-tax revenue. Beyond only building skills, the Contractor must assist the Ministry of Finance to develop incentives and structures to identify, recruit, and finance/retain the necessary expertise without donor assistance.

Expected Results:

MoF has institutional capacity to carry out budgeting functions to execute these functions without future donor support after the end of the contract; Other targeted GOK Ministries and institutions are able to carry out the above reforms without donor support by the end of the contract.

Functional compliance risk management (CRM) promoting increased confidence in TAK functions and a reduced burden on businesses;

Reformed, more effective TAK organizational structure, including an outcome-based performance management system; and Improved legal framework and implementation of VAT policy.

OBJECTIVE 3: CROSS-CUTTING: ENHANCED STRATEGIC COMMUNICATION

The reforms Kosovo will need to undertake to reduce the space for corruption may be politically difficult to develop and implement and will require action by some actors with competing adverse incentives.

Thus, strategic communication by the GOK will be a key element this effort to gaining traction for the necessary reforms, ensuring that both the public and private sector are informed and engaged in identifying and implementing reforms responsive to the highest priority issues. Identifying strategic communication as a specific objective of this Activity ensures that engagement in this area is not ad hoc, but rather takes a long-term view to establishing a sustainable and transparent system of communication that will outlive the Activity itself.

A successful policy reform lifecycle in a healthy market economy involves five components: (1) identifying issues and solutions; (2) lobbying and advocacy; (3) mechanisms for public private dialogue;

(4) policy, law, and regulation; and (5) implementation. Strategic communication will generate momentum from planning through implementation stages for structural and regulatory reform, as well as promoting utilization of the reformed environment and public support for continued reform. Following the identification of relevant reforms anticipated to be pursued (both during the proposal phase and eventual performance), the Contractor must demonstrably integrate communications activities into the entire process for each reform measure.

The Contractor must seek to engage relevant local stakeholders as well as to strengthen the system for effective communication and dialogue about the business enabling issues that will be the focus of Activity interventions. The Contractor must seek to strengthen the system of economic governance in Kosovo by facilitating the growth of relationships between private sector, government, civil society, and academic stakeholders as well as other interested actors. The quality of these relationships is key to sustainably upgrading and improving the overall business climate in Kosovo. By facilitating through local actors, the relationships formed and capacities developed will inherently rest within the local system and will be more likely to be sustained over time.

This is a cross-cutting Objective critical to the success of both of the Activity’s other Objectives in strengthening economic governance and thereby reducing economic corruption. The Contractor must closely coordinate with any future USAID activities which may also address economic corruption, and in addition, interventions addressing this Objective may require significant coordination with USAID’s programming supporting civil society and media.

Expected results:

Improved strategic communication between GOK and the general public;

Opportunities for public-private dialogue identified and utilized;

Enhanced outreach capacity of local media and civil society organizations;

Increased public awareness of the existence and nature of reforms; and, Perception of corruption and economic governance improved once reforms have been made.

C.6 GUIDING PRINCIPLES

The Contractor must ensure that the following guiding principles steer the planning and implementation:

Continuous Learning and Adaptation

The Activity has been designed to enable adaptive approaches to achieving objectives, informed by ongoing contextual analysis. The Contractor must continually assess the effectiveness of the interventions, evaluate whether those interventions are succeeding, apply lessons learned and adapt work appropriately. Critical to the Activity’s ability to foster genuine reforms at both the national and sub-national level is robust, real-time political economy analysis that gives insight into incentives, power structures and possible avenues to advance reform.

Significant shifts within the broader country context may require the adaptation of approaches and the revisiting of indicators to address these changes. The Contractor may be required to develop shared metrics with other USAID activities as well as develop Activity specific indicators, benchmarks and targets, and establish baseline data against which subsequent performance can be measured. The Contractor must regularly revisit its baseline assessment to assess progress and whether assumptions continue to hold, keeping abreast of new developments that may create challenges or windows of opportunity. If circumstances arise, the contractor should alter its interventions, as reflected in its AWP and Monitoring, Evaluation, and Learning Plan (MELP), with the concurrence of USAID.

The Activity must establish and utilize a robust MELP reflecting a dynamic implementation context over time which necessitates attention to contextual changes. This system should be integrated with Objective 3 by facilitating feedback loops for learning among interested stakeholders. The Contractor must take into account best practices when developing the MELP, which must include an Adaptive Management Plan.

The MELP should emphasize the systematic process of collecting and analyzing performance data and other information to track progress toward planned results and must be used to proactively learn and adapt for future interventions.