Amended_RFP_72026318R00002.pdf

Date Issued: December 28, 2017 Deadline for Questions: January 12, 2018 (3:00pm Local Time in Egypt) Closing Date: Sunday, February 25, 2018 (9:00am Local Time in Egypt) Subject: Request for Proposals (RFP) No.: 72026318R00002

Feed the Future Egypt Value Added Solutions (EVAS)

The United States Government, represented by the U.S. Agency for International Development (USAID)/Egypt, intends to award a five-year contract to build upon the work that USAID, other donor projects, and the Government of Egypt have undertaken in the agriculture sector. The estimated cost range for this procurement is $35-40 Million, subject to availability of funds. The NAICS code for this activity is 541990. The authorized geographic code is 937. This is a Cost- Plus-Fixed-Fee (CPFF) Completion-type contract.

All interested and qualified organizations are invited to submit a proposal in accordance with the requirements of the enclosed RFP No.: 72026318R00002. This procurement will be conducted under full and open competition procedures, pursuant to Part 15 of the Federal Acquisition Regulation (FAR) (48 CFR Chapter 1). If your organization decides to submit a proposal in response to this solicitation, it must be submitted in accordance with Section L of this RFP. Proposals received after the closing date and time will be processed as late and handled in accordance with FAR 15.208.

If substantive questions are received, which affect the response to the solicitation, or if changes are made to the RFP, this solicitation will be amended. Any amendments to this solicitation will be issued and posted on the Federal Business Opportunities (FedBizOpps) website. Offerors are encouraged to check http://www.fbo.gov periodically. Issuance of this solicitation does not obligate USAID to award a contract, nor does it commit USAID to pay for costs incurred in the preparation and submission of a proposal. Furthermore, USAID reserves the right to reject any and all offers, if such action is considered to be in the best interest of the U.S. Government.

Offerors should read the entire solicitation, which includes all pertinent technical sections and the terms, conditions and instructions required for submitting a proposal. By email only, please submit all questions regarding this RFP no later than the date and time listed above to Ms. Nehal Elkhatib at nelkhatib@usaid.gov and econgrowthana@usaid.gov. Oral instructions or explanations given before the award of the contract resulting from this solicitation will not be binding. Answers to all offerors’ questions will be provided in writing.

Thank you for your interest in USAID programs.

Sincerely, /s/ Robert Claussen Supervisory Contracting Officer http://www.fbo.gov/ mailto:nelkhatib@usaid.gov

RFP #72026318R00002

SECTION B - SUPPLIES OR SERVICES/PRICES

B.1 PURPOSE

The purpose of this contract is to provide the services and deliverables as described in detail in Section C, Statement of Work, for the Feed the Future Egypt Value Added Solutions project.

B.2 CONTRACT TYPE

This is a Cost-Plus-Fixed-Fee (CPFF) Completion-type contract. For the consideration set forth below, the Contractor must achieve the performance objectives and deliverables or described in Sections C, D, and F and otherwise comply with all contract requirements.

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

(a) The estimated cost for the performance of the work required hereunder, exclusive of fee is: $ . The fixed fee is $ . The estimated cost plus fixed fee is $ .

(b) Within the estimated cost plus fixed fee (if any) 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 $ . The Contractor must not exceed the aforesaid obligated amount in accordance with Federal Acquisition Regulation (“FAR”) 52.232.22, “Limitation of Funds.”

(c) Funds obligated hereunder are anticipated to be sufficient through {TBD based on the date of award}.

*NOTE: The actual amount to be obligated will be determined at the time of award.

B.4 BUDGET

The total cost stated for the budget categories specified below may not be adjusted without a modification to the contract signed by the Contracting Officer. No amounts in excess of the amounts specified for each category will be billed to the Contract.

CLIN Item Total ($) 001 Contract Total Cost (excluding fee) ___ 002 Fixed Fee ___ Total Estimated Cost Plus Fixed Fee ___

FT-800 Local Currency Total (EGP) Social Insurance for Egyptian staff ___ javascript:__doPostBack('ctl00$ctl00$body$PageMainContent$ctl01','')

Note on Social Insurance – Social insurance consists of the employer share of social insurance for Egyptian nationals employed for the project. Per USAID/Egypt’s agreement with the Government of Egypt, this line in the budget is required to be billed separately in Egyptian Pounds and charged to a special funding line, FT-800.

B.5 PAYMENT OF FIXED FEE

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

B.6 INDIRECT COSTS

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* Period** Rate Base***

* Description or type of rate indicated as a percentage, e.g., G&A ** Period, e.g., CY 2009 *** Base, e.g., Direct Labor for Labor Overhead

[RATES WILL BE INSERTED AT THE TIME OF AWARD]

B.7 ADVANCE UNDERSTANDINGS ON CEILING INDIRECT COST RATES AND

FINAL REIMBURSEMENT FOR INDIRECT COSTS

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

Description Period Ceiling Rate Base

(2) 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 costs are less than the negotiated ceiling rates, the negotiated rates will be reduced to conform to the lower rates.

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

(4) It is USAID policy that contractors or grantees that agree to an indirect cost rate ceiling that is less than the government-wide NICRA rate in a contract shall not recoup the amounts occasioned by the reduction in the rates on other agreements with the U.S.

Government. Therefore, the organization must agree in writing not to recoup the reduction in the rates on other contracts or grants with the U.S. Government - the reduction must be taken from profit, fee or other non-governmental sources of revenues. In any instance where an indirect cost rate other than that specified in the NICRA is to be used in a contract or grant the contractor/grantee is required to acknowledge the above stipulations by providing a written acknowledgement to

USAID.

B.8 COST REIMBURSMENT

Allowable costs will be limited to reasonable, allocable and necessary costs determined in accordance with FAR 52.216-7, Allowable Cost and Payment (JUN 2013), FAR 52.216-8 (JUN 2011), Fixed Fee, if applicable, and AIDAR 752.7003 (NOV 1998), Documentation for Payment.

[END OF SECTION B]

SECTION C – DESCRIPTION / SPECIFICATIONS / STATEMENT OF WORK

C.1 INTRODUCTION

The purpose of the Feed the Future Value Added Solutions (EVAS)1 project is to employ a market-driven systems-strengthening approach to improve the competitiveness of horticulture producers and related down-stream businesses and food processors by building their capacities to respond to demand from domestic and international buyers and fully meet their market requirements. Meeting the demands of the market will necessitate adoption of international food quality and safety standards for horticulture crops destined for both international and domestic markets, including food processors, supermarkets, and restaurant chains.

This contract will build off of the work that USAID, other donor projects, and the Government of Egypt have undertaken and must address the following inter-related goals: 1) Strengthen sustainable domestic and international market linkages; 2) Improve post-harvest handling and storage; 3) Increase productivity of small farmers and food processors; and 4) Improve nutritional status of women and children.

C.2 EXPECTED RESULTS

The expected results in support of the USAID/Egypt’s Development Objective “a more competitive and inclusive Egyptian economy through growth in selected sectors” and the sub-purpose, “increased agriculture-related incomes of smallholder farmers” under this contract:

• Double the incomes of a minimum of 25,000 small farmers.

• Create 12,000 sustainable Full Time Equivalent 2 (FTE) jobs in agri-businesses both on- and off-farm over the life of the project (FtF standard calculation will be used to quantify FTE jobs)

• Improve agricultural water-use efficiency over 22,000 hectares.

• Leverage $10 million dollars through partnerships with Egyptian firms and agricultural organizations to install irrigation systems, build post-harvest centers, and/or establish small- to medium-food processing facilities in Egypt's food sector (See Section C.6).

The minimum life-of-project targets listed above will be achieved through the following intermediate results. (Indicator targets associated with each Intermediate Result will be established in the Monitoring, Evaluation, and Learning plan and updated annually.)

Intermediate Results:

1. Improved sustainable domestic and international market linkages

(Including linkages to Egyptian agro-processing)

2. Improved post-harvest handling and storage

3. Increased productivity for small farmers and food processors

4. Improved nutritional status of women and children

Notional LOE %

40 - 50 20 - 30 20 - 25 5 - 10

1 This is a working title only; bidders may propose alternative names for the project.

2 https://feedthefuture.gov/resource/feed-future-handbook-indicator-definitions

C.3 SCOPE OF CONTRACT

The Contractor must assemble a consortium of qualified partners, local and/or international organizations or entities, to provide the technical expertise, services, and goods necessary to collectively achieve the objectives under this Contract. The zone of influence for this activity will focus on small farmers in Upper Egypt and the Nile Delta, however, activities with other value chain actors such as domestic buyers, agro-processors, and exporters may extend to other regions in Egypt including the Greater Cairo Area.

C.4 BACKGROUND

Since 2011, Egypt experienced an economic downturn: unemployment and poverty rose, economic growth slowed, and hard currency earnings dwindled. On November 11, 2016, the International Monetary Fund (IMF) Executive Board approved a $12 billion agreement for an Extended Fund Facility to help stabilize Egypt’s economy. USAID/Egypt continues to support the Egyptian people in their pursuit of shared prosperity and economic improvement through promoting the creativity and productivity of the private sector as a lasting solution to the lingering effects of the economic crisis as well as to set the foundation for future inclusive growth.

Food security is a vital issue responsible for stability and security in many countries. In Egypt, food absorbs 40 percent of total household expenditures on average and accounts for about 70 percent of total expenditures of the poorest Egyptian households. Cuts to subsidies and other economic reforms, while necessary, create additional challenges for a struggling economy and is a source of political and social tension. USAID’s new project is designed to further develop the agriculture sector aims to contribute to inclusive economic growth while improving food security and general stability in Egypt.

Agriculture is a major component of the Egyptian economy and an important source of income and employment for the country’s vulnerable rural poor. Approximately 77,285 private sector enterprises employ hundreds of thousands of Egyptians (28 percent of all jobs) and contribute up to 14.5 percent of GDP. Recent studies suggest that every 1 percent increase in agricultural income per capita reduces the number of people living in extreme poverty by between 0.6 and

1.8 percent3. The domestic demand on agriculture and food products is increasing due to the growth in population, yet annual sector growth remains at a very moderate rate of 2.5 percent.

Despite this slow growth, the agriculture sector is a primary engine of poverty reduction in Egypt (World Bank and CAPMAS) and the largest employer of the rural poor in Upper Egypt, contributing to 40 percent of rural incomes.

The seven governorates in ARDII’s Zone of Influence (ZOI) are located in Upper Egypt: Beni- Suef, Menia, Assuit, Sohag, Qena, Luxor, and Aswan. USAID chose these seven governorates based on the relative poverty level and the potential for growth in the agriculture sector (WFP-the status of food security, and vulnerability in Egypt, 2009 report, and the World Bank Report No. 36432-EG, USAID/Egypt Agriculture Assessment, 2011). These governorates have the highest proportion of populations that are income poor and have poor food consumption (~28

3 Feed the Future Initiative webpage: http://www.feedthefuture.gov/approach/Inclusive--Agriculture--Sector--Growth percent). EVAS will include these governorates and expand to support increased incomes of small farmers in the Nile Delta and Greater Cairo Area as well through activities with other value chain actors such as domestic buyers, agro-processors, and exporters that may extend to other regions in Egypt including the Greater Cairo Area.

Agriculture production in Egypt is dominated by smallholder farms with ten or fewer feddans (1 feddan = 0.42 ha) growing relatively low value crops, such as sugar cane, maize and wheat. The majority of Egypt’s cultivated land is comprised of these traditional staple crops which hold a secure market value, but earn a very thin margin. Farmers are familiar with horticulture crops (7 percent of cultivated land) but are not willing to take on the risk of expanding production unless market opportunities and necessary downstream services are available to protect the value of horticultural produce.

Developing the horticulture value chain faces a number of challenges including fragmentation of value chains and low capacity of supporting services required for the agriculture sector.

Significant post-harvest losses (estimated 20-40 percent for fruits and vegetables), the lack of appropriate use of food processing technology including equipment and food safety standards, and the inefficient use of agriculture resources have led to low competitiveness in local and international markets. Furthermore, while local institutions and producer organizations such as associations, hubs4, or cooperatives are increasingly incorporated into the horticulture value chain by larger farmers seeking to increase the capacity and food safety standards of small farmers, most of these institutions lack the capacity to do so on a sustainable level. Local capacity development and technical assistance is needed to help both farmers and producer organizations improve productivity and increase incomes. If the productivity of horticulture value can be improved, employment and income of the poorest segment of the Egyptian economy will be increased and food security enhanced throughout the country.

One of the largest challenges facing agribusiness in Egypt is food safety (FS) and sanitary and phytosanitary (SPS) measures applied by the importing countries. In 2014, Egypt’s top export destinations were its Arab neighbors and the Gulf: Saudi Arabia was the largest recipient with $288 million, followed by Libya with an export value of $140 million and UAE with $104 million. More recently, Egypt has been gaining access to European markets where it is able to put fresh fruit and vegetables on super market shelves weeks before local farms can. If Egyptian farmers and firms are not able to meet international food safety standards for these countries, Egypt risks losing its comparative advantage in international markets for agriculture and food products.

Furthermore, domestically, Egypt lacks an official Food Safety Standard Certification system for horticulture crops. Most fresh horticulture crops sold on the local market are of low quality and

4 An Agriculture Production “Hub“ is a centrally located facility with a business management structure facilitating the aggregation, storage, processing, distribution, and/or marketing of locally/regionally produced food products.” The Agriculture Production Hubs are part of the agricultural value chain, one of the primary goals of agriculture production hubs is to give small and medium-sized farmers access to larger or additional markets that boost their income and provide them with opportunities for scaling up production. Through technical assistance they help small farmers improve production and meet international food safety standards. They may also offer a combination of technical and business assistance, supply inputs such as improved seeds, fertilizers and equipment, and provide access to finance, transportation, distribution and marketing assistance. Producer hubs are becoming more popular in Egypt as an alternative to associations or cooperatives, and are often supported by large farms needing to outsource from small farmers to meet the volumes required to satisfy market demand.

rarely meet international food safety standards. As a result, food processors, supermarkets, and restaurants struggle to find enough high quality raw materials to meet market demand.

Recent studies have revealed that the main issues regarding food safety and quality standards are excessive pesticide residues, poor post-harvest handling and storage practices, weak transportation infrastructure, poor marketing facilities and low levels of agricultural industrialization. Estimates show that production losses exceed 30 percent for some horticulture crops due to these challenges. The high degree of perishability of horticulture produce leads to rapid quality deterioration, a consequent reduction in prices and reduced farmer incomes.

Domestic and international buyers are willing to pay a premium price for higher quality fresh produce and provide the market demand and incentives for Egyptian small farmers and food processors to adopt good agriculture and good manufacturing practices for high quality, safe, healthy food. However, farmers and food processors need training and support in Quality Assurance, Food Safety and Sanitation (HACCP or Hazard Analysis Critical Control Point & SSOP or Sanitation Standard Operating Procedures), Good Manufacturing Practices (GMPs), Good Agricultural Practices (GAP and Euro Gap), Biosecurity and Traceability, Labeling, and basic compliance with international standards and best practices to take advantage of these market opportunities.

Moreover, the development of the agricultural sector remains constrained by the lack of access to finance, which inhibits the timely purchase of agricultural inputs, especially for the high-cost inputs required to produce high-value products. This lack of capital often binds small farmers to unfavorable arrangements, further limiting their bargaining power and increasing risk.

USAID/Egypt’s Agriculture Strategy and Progress under Mission Projects

For more than 20 years, USAID has invested in strengthening the horticulture export value chain for fresh fruits and vegetables. In 1996, USAID helped establish the Horticulture Export Improvement Association (HEIA), the largest horticulture farmers’ association in Egypt. With USAID assistance, HEIA grew from 25 members to over 700 members, contributing more than 80 percent of Egypt’s high value horticulture exports ($2.9 billion in 2015) annually. The success in fresh horticulture exports is evident in the growing market demand for Egyptian produce. This demand has grown to such an extent that larger Egyptian export farmers are no longer able to produce required volumes and must outsource from small farmers. USAID programs have leveraged the demand for fresh horticulture exports to increase incomes of small farmers in Upper Egypt by assisting them to meet international standards and market requirements to export fresh produce.

Agribusiness for Rural Development and Increasing Incomes (ARDII)

The ARDII Project aims to increase incomes of smallholder farmers in Egypt through sustainably intensifying their agricultural productivity, increasing the efficiency of post-harvest processes including food processing, improving the marketing of these goods, and improving the nutritional status of women and children. USAID programs under

ARDII facilitated the development of the Regional Center of Excellence, a private sector extension service provider supporting stakeholders along the value chain to meet demand, both local and international. USAID programing has also created sustainable linkages between small farmers and export market channels for fresh produce, facilitated the development of cold-chain infrastructure including perishable terminals in both Cairo and Luxor and pack houses in Upper Egypt and the Delta, and created jobs and fostered entrepreneurship throughout the horticultural sector.

All of these achievements have boosted Egypt’s exports and consequentially GDP.

However, the local market for both fresh and processed horticultural produce remains underdeveloped. This portion of the sector has enormous potential to increase Egypt’s economic growth through new investments in agribusiness and agro-processing, healthier produce for local markets, and increased Egyptian exports of processed horticultural products. The Mission views this buyer demand from not only exporters but local agro-processors, retail chains, and large restaurants as an enormous new development opportunity that has the potential to increase incomes and employment of upstream farmers and firms – this is the focus of this new procurement.

C.5 STATEMENT OF WORK

USAID/Egypt’s new Agriculture project’s primary goal is to increase incomes of small farmers.

To accomplish this goal, the Contractor will undertake interventions to strengthen the competitiveness of small farmers as well as downstream food processing facilities and create commercial linkages to both international and domestic markets (agro processing, retail supermarkets, and large restaurants). Using a market-driven systems-strengthening approach, the EVAS project will address the following inter-related goals: 1) Strengthen sustainable domestic and international market linkages; 2) Improve post-harvest handling and storage; 3) Increase productivity of small farmers and food processors; and 4) Improve nutritional status of women and children.

Reflecting the market-driven nature of ARDII, the recommended approach to target interventions for EVAS project will be to work backward from the commercial requirements (i.e. food safety standards, commercial quantities required, time to market, etc.) to meet the market demand for horticultural products (both domestic and export), and identify capacity and supply constraints such as cold-chain and transportation bottle necks. These value chain interventions must enable small farmers to deliver to a wider range of local and international markets for fresh and processed horticultural produce.

Intermediate Result 1: Strengthen sustainable domestic and international market linkages

Development Challenge for Result 1: Egypt’s small farmers and agribusiness firms lack sustainable linkages to both domestic and international markets. Farmers and traders lack the knowledge or skill to build sustainable commercial relations and are often unaware of formal contracting mechanisms designed to mitigate risk. Traders and/or middle-men remain the dominant mode of exchange though they are frequently unreliable and/or take large profits.

Limited access to market information, transportation, and technical support to meet food quality and safety standards also hinder market access.

Domestic Market Linkages: The modern domestic retail and processing network is growing rapidly in Egypt and so is the demand for high quality horticulture produce. Domestic retailers often must compete with exporters for high quality produce to satisfy this growing domestic demand. Restaurant chains, supermarkets and food processors, such as Carrefour and Heinz, are interested in re-structuring supply chains to reduce dependence on traders.

International Market Linkages: International demand for Egyptian horticulture crops is also growing so rapidly that Egypt’s large farmers are no longer able to produce the volumes required by international buyers. In efforts to increase exports and maintain Egypt’s reputation for reliably supplying high quality produce to international customers, large farmers are outsourcing from qualified small farmers. For example, though the production of Egyptian green beans for export has grown exponentially in the last three years, large farmers are barely able to meet 25 percent of the market demand.

Increase food quality and safety: Compromised food safety is a barrier to both international and domestic markets. Excessive pesticide residues and microbial contamination is detrimental to public health and food security. In Egypt, most food safety standards for fresh horticulture crops and processed foods are not adequately developed or enforced. As a result, some Middle East countries have placed bans on Egyptian food product imports due to excessive pesticide residues and/or microbes. As a result, some premium markets, including local companies servicing high end platforms, such as restaurant chains, supermarkets, and food processors, as well as an increasing number of international markets are demanding certification and compliance to international food safety standards due to consumer health concerns. Many of these buyers are offering a premium price for higher quality fresh produce. High cost and lack of capacity of agribusiness firms—from small farmers to processing facilities—to meet standards, coupled with limitations on Government testing facilities, remain some of the sector’s most problematic development challenges.

Scope of this Contract under Result 1:

Improve sustainable domestic and international market linkages:

Connecting producers and processors to value chain leaders in the region and in world markets is a key avenue to deliver market-driven growth. To achieve this goal, the contractor must select and then strengthen key Egyptian agricultural producer organizations. This could be farmers’ associations, hubs, and/or cooperatives. The contractor must facilitate reliable and sustainable direct farm-to-market linkages between small farmers and food processors, supermarkets, restaurant chains and exporters, to help them meet formal contractual obligations for sales of fresh food and value-added products for minimized risks. The Contractor must build the capacity of producer and processor organizations to meet the requirements to compete in local and international markets, such as packaging, labeling, marketing approaches, communications techniques, product presentation, and meeting international grades and product standards. It is expected that the Contractor will achieve these results by embracing innovative approaches, new technologies, and by expanding on the achievements made under previous USAID projects.

Food safety: The Contractor must coordinate with the Government of Egypt entities responsible for food safety in Egypt to assist Egyptian value-chain actors to meet internationally-recognized food safety standards. The Contractor must strengthen Egypt’s critical agricultural institutions (farmers associations, hubs, or cooperatives) to assist their members and stakeholders to meet food export safety, sanitary and phytosanitary requirements, provide technical assistance to increase the application of food safety practices according to international standards and best practices, and introduce or expand the use of best agricultural practices regarding inputs such as pesticides, chemical fertilizers, and improved varieties of seeds, as well as increase product traceability for certification. The Contractor must also support the adherence to and certification by internationally recognized food safety and quality standards included in the Codex Alimentarius such as GlobalGAP, HACCP, etc. To better support the sustainability of these activities, the Contractor must collaborate with both domestic and international markets to help negotiate a premium price incentive to small farmers in compliance with food safety standards and good agriculture practices.

Required indicators for Result 1:

Standard Indicator EG.3.2-19 Value of smallholder incremental sales generated with USG assistance.

Custom Indicator: Number of contracts between smallholder farmers and market channel

Standard Indicator EG 3.2-4 Number of for-profit private enterprises, producers organizations, water users associations, women's groups, trade and business associations, and community-based organizations (CBOs) receiving USG food security related assistance.

Standard Indicator EG.3.2-1 Number of individuals who have received USG-supported short-term agricultural sector productivity or food security training.

Intermediate Result 2: Improved Post-harvest handling and storage

Development Challenge for Result 2: Transporting produce to market is challenging due to a lack of cold-chain infrastructure in Upper Egypt. Farmers need to ship their produce several hundred kilometers to Cairo in temperatures often reaching above 38 degrees Celsius.

Horticulture crops are highly perishable and estimates of up 30-40 percent of total production is lost due to gaps in the cold-chain such as the lack of post-harvest pack houses with adequate storage and cooling facilities, refrigerated trucks, and efficiency in ports and air terminals. These challenges increase costs and post-harvest losses. Similarly, the lack of appropriate use of food processing technology including equipment, modernized food processing lines, and packaging, restrict competitiveness across the sector.

Scope of this contract under Result 2: The Contractor must build the capacity of producer organizations to provide technical assistance to small farmers to improve post-harvest handling and storage practices. The Contractor must incorporate innovative technologies to fill cold chain transportation gaps establish small-scale cold storage infrastructure and increase access to refrigerated trucks where needed. The Contractor must also facilitate relationships between pack house owners/managers and packaging manufacturers to develop appropriate packaging materials for processed and semi-processed food.

Required indicators for Result 2:

Standard Indicator EG 3.2-22 Value of new private sector capital investment in the agriculture sector or food chain leveraged by Feed the Future implementation

Standard Indicator EG.3-1 Number of households benefiting directly from USG assistance under Feed the Future.

Standard Indicator EG.3.2-23 Value of targeted agricultural commodities exported with USG assistance.

Intermediate Result 3: Increased productivity for small farmers and food processors

Development Challenge for Result 3: Most small farmers lack the capacity to produce at the scale or quality required to meet the needs of the market. Many are not willing to change from low-risk traditional crops to higher value fruits and vegetables. The lack of access to inputs such as fertilizers, pesticides and improved varieties of seeds, outdated on-farm irrigation and drainage systems and water use inefficiency are major limiting factors for improvement of horticulture production. As a result, local retailers and/or exporters—unable to meet their own market demand, are outsourcing their fresh produce through a third party (dealer). A market-driven systems-approach is necessary for sustainable development. Local capacity development and technical assistance is needed to help both farmers and producer organizations improve productivity and increase incomes.

Access to finance is considered one of the key issues hindering the growth of the agriculture productivity. The most common constraints in the financial system in Egypt include: 1) poor understanding and communication between banks and consumers: 2) the neglect of the needs of agribusiness firms; 3) the use of outdated, inefficient systems and technology; 4) cultural barriers; 5) lack of collateral; and 6) high risk for banks leading to high interest rates for customers.

Scope of this contract under Result 3: The Contractor must assist farmers and agribusinesses to increase their productivity and enhance quality. The Contractor must assist small farmers by helping to build the capacity of producer organizations and private sector extension services that will in turn, provide technical assistance to small farmers. Increased food productivity and sales will be achieved by applying international food safety and sanitation standards and best practices throughout the value chain.

Building the capacity of local institutions/organizations is critical for a market-driven systems approach. Local institutions are increasingly incorporated into the horticulture value chain by larger farmers seeking to increase the capacity and food safety standards of small farmers. The

Contractor must strengthen and/or develop local institutions, such as associations, hubs, or cooperatives, when feasible. These producer organizations should be used to facilitate the effective collection of crops, the dissemination of extension service information, technical training. The Contractor must demonstrate the most effective ways to mobilize producer organizations and entrepreneurs in the agricultural sector to achieve the objectives. The Contractor should consider previous USAID agricultural activities to determine what criteria and what process should be used to select the entities that can best serve this producer organization function. Support to producer organizations should span across all Intermediate Results.

Access to finance: The Contractor must work with farmers and off-farm firms to help them gain access to finance and improve their capacity to navigate the lending institutions and options available. The Contractor must also work with financial institutions to improve sources of financing for agribusiness firms, including small farmers, and identify innovative financing mechanisms such as leasing, crop insurance or warehouse receipts to increase access to credit or equity. Although access to finance is a key hindrance in improving agricultural productivity, it is a challenge throughout the whole horticultural value chain and interventions should span across all Intermediate Results.

Required indicators for Result 3:

Standard Indicator EG3.2-3 Number of Micro, Small and Medium Enterprises, including farmers, receiving agriculture-related credit as a result of USG assistance.

Standard Indicator EG.3.6,7,8 Farmer's gross margin per hectare, per animal, per cage obtained with USG assistance.

Standard Indicator EG.3.2-17 Number of farmers and others who have applied improved technologies or management practices with USG assistance.

Standard Indicator EG.3.2-18 Number of hectares under improved technologies or management practices as a result of USG assistance.

Standard Indicator EG.3.2-7 Number of technologies or management practices under research, under field testing, or made available for transfer as a result of USG assistance.

Intermediate Result 4: Improved nutritional status of women and children

Development Challenge for Result 4: Poor nutrition reduces productivity of Egyptians limiting the country’s economic growth. Over $814 million in GDP is lost annually to nutrient deficiencies.5 More than 29 percent of Egyptian children under the age of five are stunted (low height for age), while 70 percent of those aged 15 and above are overweight or obese (The World Bank). The overall prevalence of stunting and underweight has not changed significantly in the last two decades; this, coupled with a recent increase in adult obesity, has resulted in a double burden of undernutrition and overweight. Increased awareness of food quality and the

5 http://siteresources.worldbank.org/NUTRITION/Resources/281846-1271963823772/Egypt.pdf importance of nutrition, as well as access to safe foods are needed to increase food security of underserved poor Egyptians.

Nutrition is an essential element of the U.S. Government’s Global Hunger and Food Security Initiative: Feed the Future. Agricultural livelihoods affect nutrition of individual household members through multiple nutrition-sensitive agriculture pathways and interactions. Various agriculture interventions can improve access to nutritious food and health care; impact the enabling environment; and ultimately affect the nutrition of individual women and children.

These pathways can reach beyond the household to improve the nutritional status of communities.

These nutrition-sensitive agriculture pathways are not always linear, and there are many interactions among them. In general, they can be divided into three main routes at the household level: 1) food production, which can affect the food available for household consumption as well the price of diverse foods; 2) agricultural income for expenditure on food and non-food items;

and 3) women's empowerment, which affects income, caring capacity and practices, and female energy expenditure. Acting on all of these routes is the enabling environment for nutrition, including several key components: the natural resources environment; the food market environment; the health, water, and sanitation environment; nutrition/ health knowledge and norms; and other factors, such as policy and governance. These components may affect nutrition of consumers or communities, not only farmer households. Child nutrition outcomes ultimately feed back into national economic growth and household assets and livelihoods, including those that contribute to both agricultural and nonagricultural sources of income.

Result 4 focuses on strengthening the link between agriculture and nutrition activities, and ensures that activities have a distinct focus, aimed at improving the nutritional status in target communities and families in Upper Egypt. Result 4 is not intended to be a standalone intervention. It will heavily rely on the sustainable market linkages and post-harvest handling components to ensure the availability and accessibility, and possibly sale, of nutrition-rich food to increase dietary diversity.

Scope of this contract under Result 4: The Contractor must implement evidence-based nutrition-sensitive interventions along the three main nutrition-sensitive agriculture pathways (as described above) to improve nutritional status of Egyptian women and children and effect sustainable nutritional behavior change within households and communities. The contractor must reach female direct beneficiaries with nutrition-sensitive agriculture-related interventions.

Interaction with female beneficiaries within the activity should be significant, going beyond a brief attendance at a meeting and should result in sustainable change.

Required indicators for Result 4:

Standard Indicator HL 9-4 Number of individuals receiving nutrition-related professional training through United States Government-supported programs

Standard Indicator EG.3.3-10 Percentage of female direct beneficiaries of United States Government nutrition sensitive agriculture activities consuming a diet of minimum diversity.

C.6 STIMULATE ADOPTION OF AGRICULTURAL TECHNOLOGIES IN

EGYPT’S HORTICULTURAL SECTOR

To support achievement of the results described above, the Contractor must stimulate adoption of agricultural technologies in the horticulture sector. Stimulating this sector may be done through primarily technical assistance approach exclusively, or a hybrid approach that incorporates more material support to the beneficiaries through sub-awards. The Contractor must be able to maintain flexibility in the approach to be determined at the operational level via work plans.

Assistance provided by the Contractor (whether sub-awards or technical assistance approaches) may support certain stakeholders in Egypt (defined below) to refurbish and develop cold-chain, food processing, or other agro-processing related equipment. This assistance must support a participatory, market-driven approach to increase the competitiveness of food processing and other value-chain stakeholders. This assistance must also leverage comparative private sector investment and support the development of service-providers in critical agriculture value chain segments. Stakeholders eligible to receive the above assistance are limited to MSMEs, including farmer associations and cooperatives, food processors, logistics firms, agro-input dealers, traders, and exporters. The above assistance must be used to upgrade these stakeholders’ operations for improved profitability and competitiveness. Results from this assistance must contribute to targets set for private sector resources leveraged, beneficiaries of improved food safety, and/or value of horticultural exports.

Additionally, assistance provided by the Contractor (whether subawards or the technical assistance approach) may also support certain stakeholders in Egypt (defined below) to adopt technology for the sustainable management and use of Egypt’s limited natural resources such as water and land in agricultural production. These technologies may include innovative irrigation and drainage systems, agro-processing waste systems, and pesticide and fertilizer production or innovative delivery. Stakeholders eligible to receive the above assistance are limited to MSMEs, including farmers, or farmer associations and cooperatives. The above assistance must be used to upgrade these stakeholders’ operations for more efficient and productive use of natural, water, and land resources. Results from this assistance must contribute to targets set for improved water efficiency, adoption of new agricultural technologies, and/or improved food safety.

To accomplish the objectives outlined above and further expand USAID’s partner base and develop local capacity in Egypt’s horticulture sector, subawards in this section may include Grants Under Contract (or GUCs) as defined by ADS 302. If GUCs are utilized, USAID will use the services of the Contractor to manage the grant program and USAID must remain significantly involved in establishing the selection criteria and must approve such selection criteria as well as each grant recipients. Lastly, USAID must retain within the contract the ability to terminate each grant unilaterally in extraordinary circumstances. Any individual grant to a U.S. organization must not exceed $100,000 total value.

C.7 COOPERATION WITH THE GOVERNMENT OF EGYPT

Under the direction and guidance of USAID, the Contractor must cooperate with appropriate stakeholders. The strategic objectives of this project are closely aligned with the Government of Egypt’s Agricultural Sustainable Development Strategy 2030, developed and published in 2010 by MALR. The GOE’s agricultural strategy aims to unlock the sector’s high growth potential, generating a large number of jobs and achieving large productivity gains.

The strategy’s primary pillars are:

1. Sustainable use of natural agriculture resources: Improve food safety through provision of clean irrigation water and introduction of best agriculture practices as well as introduction of more efficient irrigation technologies and management.

2. Increased productivity of land and water units: Increase smallholder productivity and improve the cold-chain system in Upper Egypt to create more efficient post-harvest processing, support farmers associations with simple and appropriate size of food processing lines to produce dried, frozen, or juice products from fruits and vegetables.

3. Increasing competitiveness of agriculture products in local and international markets: Strengthen linkages between smallholder farmers and market channels, increase exports and domestic sales of horticultural crops and processed food products, while improving farmers’ and agribusinesses’ ability to identify, and link to new local and export market opportunities including certified organic, certified GlobalGAP, processed and semi-processed products with clients such as hotels, manufacturers, and supermarket chains.

4. Improving living standards of rural inhabitants and reducing poverty rates in the rural areas: Improve nutrition status especially for women and children, increase women’s involvement along the value chain, and encourage the adoption of gender-based violence policies by employers.

C.8 COORDINATION WITH USAID AND OTHER DONOR PROGRAMS

The Contractor must coordinate with relevant USAID programs and other donor programs and proactively seek opportunities to leverage resources and achieve greater impact when feasible.

In particular, the Contractor must coordinate where beneficiaries, client firms, or GOE partners overlap and activity synergies can be achieved.

Out of the over 5 million farmers in Egypt, USAID has provided support to approximately 500,000 small farmers over the years. Increasing the total number of USAID beneficiaries and reaching underserved small farmers who have had little to no support from USAID or other Donors in the past should be a priority. Furthermore, all USAID/Egypt agriculture value chain activities collect GPS data on each beneficiary to avoid overlap and confusion with other activities. The Contractor must collect this data necessary for coordination.

USAID/Egypt’s current agriculture and sustainable economic growth programs under the ARDII bilateral agreement include the following activities:

a) The Feed the Future Egypt Food Security and Agribusiness Support Activity (FAS) focuses on improved quality and production of horticulture crops as well as assisting farmers to strengthen their fruit and vegetable value chains for domestic and export markets, and is expected to end in June 2020.

b) The Women’s Employment Promotion Program focuses on women’s empowerment, improving women’s employment opportunities, and retention in the agriculture sector, and is expected to end in June 2017.

c) The Advanced Marketing and Agribusiness Logistics (AMAL) activity focuses on developing market linkages between small farmers and large farmers and/or exporters to meet international market demand. It also provides technical assistance to the Horticultural Export Improvement Association (HEIA) to help improve its capabilities in managing the new state-of-the art cold storage and packing house facility in Luxor. It is expected to end in February 2018.

d) The Premium Program for Egyptian Small Farmers activity helps Egyptian farmers comply with GlobalGAP and FairTrade standards to access local and international fresh produce markets and sustainably improve their socio-economic conditions. This activity is expected to end in February 2018.

e) The M&E and Impact Evaluation activity supports capacity building in the Ministry of Agriculture and Land Reclamation and is expected to end in June 2020.

The Trade and Investment Project in Egypt (TIPE) Project supports the development of MSMEs and entrepreneurs through improving business services and skills development in selected value chains. USAID/Egypt’s current activities under the TIPE Project include the following:

a) The Strengthening Entrepreneurship and Enterprise Development (SEED) activity provides technical support to business service providers, entrepreneurs, and micro, small, and medium enterprises to help them develop new business ideas, strengthen essential business development services, introduce new financial tools, and enhance financial literacy and management in Egypt. It is expected to end in October 2019.

b) The Workforce Improvement and Skills Enhancement (WISE) activity focuses on improving technical secondary education to meet the needs of the job market and establishing partnerships between businesses and technical schools to link students with available jobs. WISE also focuses on improving the performance of the private sector through in-house training and improved human resource strategies that reduce staff turnover; and it will seek to build the capacity of business associations to advocate for policy and regulatory reforms related to labor market efficiency. It is expected to end in October 2019.

The Contractor must collaborate with ARDII and TIPE project implementers to identify synergies, fill…