SOL__72016718R00016_Economic_Governance.pdf

Request for Proposals (RFP) No.: SOL#72016718R00016 Issue Date: August 10, 2018 Questions Due Date: August 20, 2018 at 5pm, Kosovo local time Stage 1, Proposals Submission Due Date: September 17, 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.

SOL#72016718R00016

USAID/Kosovo Economic Governance Activity

USAID reserves the right to amend or rescind this solicitation at any time. This solicitation, amendments to this solicitation, and announcement of contract award will be made available through the government point of entry at https://www.fbo.gov/. It is the Offeror’s responsibility to check this site periodically for official updates to this solicitation. Issuance of this solicitation and the submittal of a proposal do not constitute a commitment on the part of the U.S. Government nor USAID to make an award; neither does it constitute an obligation for any costs incurred in the preparation and submission of a proposal.

USAID appreciates the time and effort put into preparing proposals in response to this solicitation.

Sincerely, Nadeem Shah Regional Contracting Officer

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. In addition, the Contractor must share the knowledge it develops through this process with other stakeholders, local organizations, central and municipal governments, sectoral experts, donors, regional and international organizations, and others, to encourage more widespread learning across teams, mechanisms, and sectors.

For the portions of this activity that support organizational capacity development, the Contractor must incorporate into the MELP the recommendations listed in ADS 203 Additional Help Document: A Recommended Approach to Measuring Organizational Capacity Development.

Specifically, the MELP must identify how the Contractor will select appropriate indicators of organizational performance change to track and finalize those indicators in conjunction with the benefitting ministries and institutions, encompassing both the organization’s performance in achieving targeted results and the organization’s performance in learning, adapting, and sustaining itself over time.

Indicators should therefore span both short-term types (efficiency, project management outcomes, quality, effectiveness, etc.) and long-term types (learning, relevance, fundraising, sustainability, etc.) of organizational performance.

The MELP must include a list of indicators which will be confirmed in collaboration with USAID after award and include context indicators as well as look beyond indicators to incorporate other monitoring approaches. The indicator summary must identify all performance indicators that come from the Project’s proposed MELP, the Mission’s PMP or the annual PPR. Also Performance Indicator Reference Sheets (PIRS) must be completed for all indicators reported to USAID and in it the Contractor must include and analyze gender, age, and ethnic background disaggregated data across interventions as applicable. Other monitoring approaches may also be used, if necessary, to provide ad-hoc qualitative insights.

USAID/Kosovo may conduct an independent mid-term performance evaluation to determine the effectiveness of the activity and to provide recommendations for adjustments.

USAID/Kosovo encourages the contractor to reflect regularly on the activity progress. The learning plan must identify questions that relate to the activity logic model or any potential gaps in the theory of change or technical knowledge base. In addition the learning plan must note how the activity will address the above mentioned and identify ways to allow for adjustment as environment and circumstances change.

The opportunities for reflection may be prepared as after action reviews or can be incorporated in the quarterly and annual reports and also in annual reporting of the MELP. The learning plan must detail the time when learning reflection occurs and who is involved, of course in alignment with the activity work plan.

Sustainability and self-reliance

The Contractor must promote Kosovo’s ability to plan, finance, and implement solutions to its own development challenges; for example, by enhancing the government’s capacity to collect and manage revenues, or creating conditions to promote private sector growth and incentives to participate in the formal economy. The Contractor must adopt a systems-oriented approach to strengthen economic governance, one that emphasizes the development of the institutions, actors, processes, tools, systems, and incentive structures that collectively enable and empower people to improve the business environment. The Contractor must design and implement a sustainability plan, with GoK stakeholders as partners, to help GoK counterparts finance and carry-out the functions necessary to sustain activity results without USAID assistance after the end of this contract. It is incumbent upon the successful contractor o reinforce with GoK partners from the beginning of the activity. Like the AWP, the sustainability plan is a living document and integral part of activity implementation. It must include benchmarks/GoK commitments and indicators to actively monitor progress, and may include components for financial sustainability and Human and Institutional Capacity Development (HICD) components. The contractor must have regular consultations and discussions with GoK counterparts aimed at ensuring sustainability.

The Contractor’s implementation of the three objectives must consistently reflect self-reliance as the end goal of this activity for all three components.

Incentivization

In addition to identifying those constraints within the business enabling environment that are both binding and amenable to change, the Contractor must examine the incentives that influence the behaviors of the public and private sector in economic matters, as well as considering how incentives might influence behavior in the future. Alleviating these particular constraints in a way that effectively accounts for these incentives will allow for more systemic change to stimulate private sector-led economic growth.

Leveraging resources

The Contractor must explore opportunities for leveraging resources with other key stakeholders as a part of its implementation approach. Co-investment is not only critical to maximizing the impact of USAID/Kosovo resources, but can also serve as a valuable indicator of the alignment of Activity interventions with government, private sector and international priorities and interests. Examples of this approach could include:

● Close donor coordination to leverage resources and synergies between programs that have similar objectives.

● Direct engagement with the private sector to understand their investment criteria and priorities to effectively anticipate the impact of private investment choices in contributing to Activity objectives.

● Government of Kosovo or other development partner cost-sharing.

C.7 RELATIONSHIP WITH OTHER USAID ACTIVITIES AND STAKEHOLDERS

COORDINATION WITH USAID AND OTHER DONOR ACTIVITIES

The Contractor must implement the contract in close coordination with other USAID and donor-supported activities in Kosovo, and regionally to the extent there is alignment with the contract’s objectives. The collaboration and coordination aim to avoid duplication of efforts, ensure synergies, and maximize impact and investments. The Contractor will incorporate lessons learned from ongoing and concluding USAID projects and activities while building upon and extending the gains which have been achieved, such as the PfD and Contract Law Enforcement (CLE) activities. This Activity may be implemented simultaneously with one or more other anti-economic corruption activities (including but not limited to USAID’s anticipated “Commercial Justice” Activity in Kosovo SOL# 72016718R00014) and must be closely coordinated with those activities in working toward shared goals. The Contractor must closely collaborate with other USAID implementing partners and donors, such as Empower Private

Sector, Local Effective Governance (LEGO), Transparent, Effective, and Accountable Municipalities (TEAM), Property Rights Program (PRP), and Regional Economic Growth (REG).

The Contractor must coordinate closely with the EU and its implementing partners to ensure complementarity of approaches and partnerships. Similarly, the Contractor must establish and maintain collaboration with the World Bank/IFC, the Swedish International Development Cooperation Agency (Sida), and GiZ, which have ongoing activities in this area. The Contractor must ensure that the Activity takes into consideration these initiatives and maintains complementarity with these donors’ approaches.

Evaluations of the overarching Economic Growth portfolio (Project Appraisal Document), along with an overall evaluation of the USAID/Kosovo the Contract Law Enforcement (CLE) and related activities, can be found at: http://usaid.dec.gov.

USG STRATEGY AND COUNTRY DEVELOPMENT COOPERATION STRATEGY

This Activity supports the USAID/Kosovo’s Country Development Cooperation Strategy (CDCS) 2014-2019 Development Objective “Increased Investment and Private Sector Employment.”

GOVERNMENT OF KOSOVO AND EU STRATEGY

Improvements in the business environment are a significant part of the Competitiveness and Investment Climate pillar of the European Reform Agenda. This is the largest component in terms of the policy scope covered by the Stabilization Association Agreement (SAA) with the EU, as well as Kosovo’s National Programme for Implementation of the Stabilisation and Association Agreement (NPISAA) and Economic Reform Program (ERP). Among other activities, reform efforts aim to improve the business and investment climate, policy planning, increase tax compliance, and tackle the informal economy, which all align with the proposed objectives.

Moreover, the ERA calls for promotion of foreign direct investments, and the SAA requires that Kosovo properly implement and enforce existing law and future legislation. These requirements align with all proposed objectives.

The latest European Union strategy for the Western Balkans recognizes that the biggest challenges in the Balkans relate to how the region is governed. The strategy re-confirms the objectives this Activity will address, identifying “Supporting Socio-economic Development” as one of its six flagship initiatives. The new strategy specifically identified WTO membership as a “prerequisite for EU accession and can spur economic growth and foster significant investment.” The strategy also introduces a new “reinforced” emphasis on the social dimension of development, including a commitment to promote engagement among the government, social partners, and civil society, which aligns with the Activity’s strategic communication component.

[END OF SECTION C]

SECTION D – PACKAGING AND MARKING

D.1 AIDAR 752.7009 MARKING (JAN 1993)

(a) It is USAID policy that USAID-financed commodities and shipping containers, and project construction sites and other project locations be suitably marked with the USAID emblem. Shipping containers are also to be marked with the last five digits of the USAID financing document number. As a general rule, marking is not required for raw materials shipped in bulk (such as coal, grain, etc.), or for semi-finished products which are not packaged.

(b) Specific guidance on marking requirements should be obtained prior to procurement of commodities to be shipped, and as early as possible for project construction sites and other project locations. This guidance will be provided through the cognizant technical office indicated on the cover page of this contract, or by the Mission Director in the Cooperating Country to which commodities are being shipped, or in which the project site is located.

(c) Authority to waive marking requirements is vested with the Regional Assistant Administrators, and with Mission Directors.

(d) A copy of any specific marking instructions or waivers from marking requirements is to be sent to the Contracting Officer; the original should be retained by the Contractor.

D.2 BRANDING

The Offeror shall comply with the requirements of the USAID branding policies available at:

www.usaid.gov/branding and appropriately mark all deliverables and public communications with the USAID brand.

Note: USAID receives “exclusive branding and marking” for the work conducted under all acquisition awards. This means that the foreign assistance delivered is clearly credited to the American people. It also means that competing logos or identities are excluded unless otherwise indicated in the award (Contract).

Activity name: This Activity will be named the “Economic Governance” Activity in Kosovo. It is anticipated that the Final Report under this Award will be visibly branded as a USAID project utilizing the appropriate USAID/Kosovo templates.

Desired level of visibility: All publications, public materials and documents, public communication, media releases, press conferences and public events should incorporate the USAID identity. Approval by the USAID Mission Development Outreach and Communication Officer to be obtained through COR should be received before using any materials which incorporate the USAID identity.

Limitations: USAID places limitations on the release of sensitive or confidential information in the materials produced in performing the contract. The contractor should consult through the COR with the Contracting Officer and the Regional Legal Advisor or Office of the General Counsel

The Marking Plan…