72027820R00001_-_Attachment_I_-_Draft_Statement_of_Work.pdf

Public Financial Management and Public Administration (PFMA) Request for Information (RFI) 72027820R00001

ATTACHMENT I

DRAFT STATEMENT OF WORK (SOW)

1. Summary

The goal of the five-year Public Financial Management and Administration Activity (PFMA) is to improve public financial management in Jordan. PFMA will help improve the performance and efficiency of the Jordanian revenue system and will enhance the budget management process. This will be achieved by building the capacity of the Jordanian Ministry of Finance (MoF) and other institutions to modernize the revenue system, encourage compliance, ease taxpayer ability to comply with tax obligations, improve budget planning, preparation and execution, and enhance the public procurement management. The activity will contribute to increased economic stability within the Hashemite Kingdom of Jordan.

2. Background

The Global Financial Crisis of 2008-2009 and a series of subsequent negative external shocks affected Jordan in significant ways, throwing its economy out of balance. Foreign Direct Investment (FDI), which averaged 13% of Jordan’s Gross Domestic Product (GDP) between 2003- 2009, fell to 5.1% of GDP on average over the period of 2010-2017. Conflict in neighboring countries led to reduced demand from key export markets and cut off important trade routes. The fall in exports to Syria and Iraq alone represented over 11% of GDP after 2011.

Conflicts simultaneously brought a massive wave of migrants and refugees, resulting in an unprecedented net population increase even when compared to historical trends of the rest of the world. The region’s instability also brought severe negative impacts to the cost of energy. Iraq stopped subsidizing its oil shipments in 2004 and the Egyptian natural gas pipeline suffered numerous disruptions in 2011, forcing Jordan to import expensive heavy fuels at a time of record prices, furthering pressures on its balance of payment and its fiscal accounts.

Initially, export growth decelerated between 2009 and 2013 as global trade slowed down and Jordan’s market share gains in garment and chemical exports stagnated. Then, between 2014 and 2016, exports plummeted by 13% as trade with and through Iraq and Syria collapsed. The downturn was particularly sharp in agriculture, transport and tourism sectors. The Jordanian economy reacted to these foreign shocks by curbing imports drastically, from an average of 79.4% of GDP over the expansion period 2000-2008 to 56.2% in 2017. In spite of this very sharp adjustment, the current account deficit remains above 8% of GDP.

The deceleration of exports and the dramatic fall in imports had an important negative impact on tax revenues. To confront this situation, the country implemented a massive reduction in its domestic spending net of domestic revenue of 8.1% between 2011 and 2017. This massive adjustment was accomplished by increasing indirect taxes, eliminating subsidies, and cutting down public investment. The six-year adjustment is significantly larger than those registered in

72027820R00001 Spain (4.6% of GDP, 2009-2015) and Portugal (6.1%, 2010-2016) in a comparable period of time, and not far below the one recorded in Greece (10.7%, 2010-2016).

Amidst such a large fiscal consolidation, the economy has displayed extraordinary resilience, continuing to grow at an average rate of 2.0% over 2011-2017. However, because of the extraordinary rate of population increase, this was translated into a contraction of 12% in per capita income over the same period. Unemployment has raised to 18.7%, with especially high unemployment rates among women (28.1%) and youth (39.7%).

In spite of the massive fiscal adjustment, Jordan’s debt-to-GDP ratio rose from about 65 percent in 2011 to about 94.6 percent in mid-2019. Going forward, slow growth makes continued fiscal consolidation difficult. At the same time, further fiscal consolidation poses a serious challenge for inclusive growth, as well as for political stability. In order to achieve macroeconomic sustainability, Jordan’s fiscal reforms need to be complemented by strategies to reduce the cost of debt finance and to re-ignite export-led growth.

Jordan continues to face significant macroeconomic challenges and it stands at a critical point in its journey to achieve economic stability. With the several structural reforms and the reopening of borders with Iraq and Syria in 2018, there are reasons for optimism.

Amidst this situation, the GoJ expressed commitment to resolve policy implementation and to preserve fiscal, monetary, and financial sector buffers to safeguard against risks.

The GoJ has been active recently in defining its reform priorities for public financial management. They include, but are not limited to:

● Adjust and improve public spending efficiency:

● Implementing and deploying the public Electronic Inventory Management System (medicines and supplies).

● Develop a Unified Procurement System.

● Implementation of Results Oriented Budgeting.

● Fair distribution of the tax burden:

● Adjust the share of the sales tax burden gradually based on the level of the government revenues

● Tax Evasion Measures:

● Inserting an item in the income tax bill that requires issuance of invoices.

● Implementing an Electronic Billing System in which the billing process can be tracked.

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● Extensive financial penalties lead to imprisonment on evaders.

● Transfer the subordination of the prosecution in each of the Income & Sales Tax Department and Customs to the judiciary branch.

● Activating coordination between different regulatory bodies to reduce tax evasion.

The GoJ has recently made progress in implementing structural measures, most notably the passage of a new income tax law, and enacting a broad range of laws to improve the business enabling environment.

However, foundations are not complete: the taxpayer register has low reliability, use of e-services is still low, analysis and evaluation of tax administration operations are inadequate, strategic approach to compliance risk management is lacked, rate of tax arrears is high, and formalized tax ruling system is absent. In addition, budget preparation and execution processes need to be enhanced, public procurement system needs to be reformed, and capacity to monitor, evaluate and support an effective audit function needs to be built up. The MoF needs organizational restructuring, enhanced business processes, and a new revenue management system, as well as more and better trained staff.

3. Statement of Work

I. PFMA Results Framework

The goal of the PFMA is to Improve Public Financial Management. The theory of change is that IF the efficiency of the revenue raising system is improved, the budget management process is streamlined, and public expenditure management is optimized to complement and contribute to a better allocation of government spending, THEN the goal of improved public financial management can be achieved. The four objectives of the contract are: Objective 1: Improve Revenue Raising System; Objective 2: Streamline Efficient Budget Management Process;

Objective 3: Optimize Public Expenditure Management; and Objective 4: Support Emerging GoJ priorities. These objectives will strengthen fiscal sustainability of the GoJ, reduce obstacles to economic growth in Jordan, build the capacity of the GoJ to manage the economy, improve performance of revenue administration, and ensure proper and transparent budget management and public procurement process.

PFMA will contribute to USAID/Jordan’s Country Development Cooperation Strategy (CDCS) Mission Goal of Improved Prosperity, Accountability, and Equality for a Stable, Democratic Jordan. The activity is designed to help achieve Development Objective (DO) #1: To accelerate Broad-based Economic Development. Specifically, the activity will be the main implementing mechanism for Intermediate Result (IR) #1.3: To improve Fiscal stability and public financial management.

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The Public Financial Management and Administration Activity will result in achieving, at a minimum, the following outcomes:

● Macroeconomic stability achieved by decreasing the gap between spending and revenues.

● Enhanced revenue performance by improving the government’s tax efficiency and capacity to establish effective tax policies and administrative systems.

● Improved allocation of public resources and achieve the efficiency of resource utilization and effectiveness of public service delivery.

● Improved budget execution oversight through internal and external auditing.

● Strengthened public accountability for performance through implementing result oriented budgeting and organizational restructuring.

● Enhanced higher authorities’ decision making process through improving the quality of financial reporting.

● Supported government to develop academic and professional partnerships to provide the Ministry of Finance with the skilled personnel.

PFMA’s objectives, below, and the Goal level areas are shown in the PFMA results framework (Annex A):

Objective/Component 1: Improve Revenue Raising System Objective/Component 2: Streamline Efficient Budget Management Process Objective/Component 3: Optimize Public Expenditure Management Objective/Component 4: Support Emerging GoJ Priorities

Objective/Component 1: Improve Revenue Raising System

USAID/Jordan has reviewed the leading elements required in a modern revenue administration system, and these are summarized below. The Mission expects prospective bidders to refine this approach to include those interventions with the highest expected impacts. The required inputs are technical assistance, training, and when appropriate, special equipment such as computer systems/software, and office equipment.

Self–reliance is essential to Objective 1. In particular, Improving Revenue Performance will contribute to the two dimensions of the USAID self-reliance matrices: 1) Full commitment and

2) Capacity of the public sector to implement fiscal reform.

The Implementing Partner will develop a flexible and adaptable methodology to support the government to move towards self-reliance, and this needs to be part of the implementation plan

72027820R00001 throughout the life of the activity. The Implementing Partner is requested to find acceptable procedures to ensure that the government will be able to continue the work after the end of this activity. This includes -but not limited to- capacity building, knowledge transfer, job shadowing and finding the self-reliance champions that can support the change and ensure the successful implementation of the new systems, procedures and policies.

Sub-Objective 1.1: Fiscal Control and Revenue Administration Strengthened

Despite the recent progress that has been achieved in improving the tax system in Jordan, significant challenges remain for the MoF to continue its efforts in modernizing the tax regime.

This regime continues to suffer from a number of structural weaknesses that reduces the fairness and the efficiency of the system, such as the poor performance in collecting tax from self-employed or investment income. PFMA will assist the public sector to develop and implement the needed techniques to improve revenue administration and combat tax evasion as it is a critical issue in the country. In addition, the GoJ requires support to reduce tax arrears and reduce the number and amounts of cases under appeal.

There is a need to support MoF to conduct sophisticated tax policy analysis, develop policy recommendations, estimate the revenue, distributional and economic impacts of current and future tax changes, and draft tax legislation in accordance with good international practice.

Illustrative results under sub-Objective 1.1 include:

● Tax administration is reorganized along functional lines

● Improved tax policies and the administration of the taxation framework.

● Rationalized tax evasion.

● Rationalized tax burden of different sectors.

● Broader citizen engagement around tax and public expenditures is created.

● Tax policy making is strengthened.

● Improved audit and controls practices at revenue departments.

● Improved dispute management system at Income and Sales Tax Department (ISTD).

Some illustrative activities are listed below. These are not intended to be comprehensive or prescriptive but are listed to provide examples for offerors to illustrate the kinds of tasks to be proposed as a means to achieve anticipated results:

● Support GoJ to reorganize the tax administration along functional lines (e.g. processing, auditing, collections, taxpayer service, and appeals) to replace the current structure based on source of revenue (e.g. customs, and income and sales tax), and create a unified revenue commission incorporating tax, customs, and non-tax revenues.

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● Help in making tax procedures consistent while reducing compliance costs for taxpayers.

● Support the GoJ to develop and implement tax administration initiatives and policies that aim to improve tax compliance and combat tax evasion.

● Support MoF plans to expand its taxpayer base in the near future.

● Improve fiscal control and audit activities within ISTD.

● Assist in increasing the degree to which dispute outcomes are acted upon.

● Support MoF to pay, offset, or decline tax refund claims in a timely manner.

● Expand the reporting system to include additional tax reports and dashboards.

● Support voluntary compliance by taxpayers.

● Assist MoF in conducting taxpayers’ awareness and communications campaigns.

● Support the reduction in net tax arrears through improved targeting, collections, and enforcement actions.

● Support MoF Human Resource (HR) system to develop and retain skilled staff.

Sub-Objective 1.2: Electronic Revenue Management System Implemented

Providing good taxpayer services generally becomes a priority in Jordan’s revenue system. The MoF is keen to improve customer services and efficiency through a combination of initiatives;

these include establishing a Contact Center and an electronic Revenue Management System

(RMS).

The Implementing Partner will help MoF in implementing both systems which will enhance the revenue collection, increase efficiency, and improve compliance in an atmosphere of shrinking resources.

The RMS shall be built on a simple and robust platform and will include all data in a single database. It will capture unified business registration, taxpayers’ records, and payments. It will be used by revenue administration for activities such as collections, enforcements, and audits.

The RMS will be connected to all MoF revenue offices as well as to other Ministries such as Ministry of Trade and Industry in order to identify non-registered traders at revenue departments.

It will also be connected with an interface to GFMIS.

Assistance will continue to improve taxpayer services and reduce tax filing compliance costs, and use the system for audits to promote higher levels of voluntary taxpayer compliance.

72027820R00001 The Implementing Partner will assist the MoF to apply IT programs to identify and bill non-filers, stop-filers, and late payers or under-payers and also to encourage simplified e-filing for taxpayers.

Illustrative results under Sub-Objective 1.2 include:

● Electronic Revenue Management System is fully functioning.

● Online tax services and information are provided to taxpayers.

● Better case management tracking for tax collection, audit, and appeals cases.

● Complex procedures for the payment and verification of taxes are reduced.

● Accuracy of the taxpayer data is improved and variance between forecast and actual tax revenues is reduced.

● Enhanced reporting in order to focus resources on higher-revenue generating activities.

● Better customer services through answering the taxpayers queries in a timely manner.

● Better case management tracking for tax collection, audit, and appeals cases.

● Increased collection/reduced value of outstanding tax arrears.

● Improved tax audits process.

Some illustrative activities are listed below. These are not intended to be comprehensive or prescriptive but are listed to provide examples for offerors to illustrate the kinds of tasks to be proposed as a means to achieve anticipated results.

● Support GoJ to re-engineer the business processes at Revenue departments.

● Support GoJ to implement an electronic Revenue Management System (RMS) by providing technical assistance and training during the implementation. Specific IT equipment can be provided by PFMA.

● Support the government to implement a contact center at ISTD to provide proper services to the taxpayers.

● Improve capacities of the IT specialists at ISTD to implement and maintain the new systems.

● Change business practices and incentive structure to increase automation and reduce opportunities for rent-seeking.

● Expand and maintain up-to-date database of taxpayer records and taxpayer financial status.

● Improve capacity for risk-based tax auditing using IT applications.

● Ensure public outreach on the improvement of taxpayer services.

● Improve revenue forecasting.

Objective/Component 2: Streamline Efficient Budget Management Process

PFMA will support the GoJ to improve its budget preparation and execution, effectively manage public expenditures, and enhance the organizational system of the procurement entities and improve the quality of its workforce. The Implementing Partner will develop a change management plan to support the government to improve its procurement processes, systems and structure which will lead to self-reliance. This needs to be planned in advance through a clear and adaptable methodology. The Implementing Partner is requested to ensure that the government will be able to continue the work after the activity ends. This can be ensured through capacity building, knowledge transfer, job shadowing, and finding the self-reliance advocates that can support the change and encourage the government to develop the capacity to manage and maintain the new system and structure. The required inputs are technical assistance, training, and when appropriate, special equipment such as computer systems/software, and office equipment.

Sub-Objective 2.1: Budget Preparation Process Strengthened

It is critical for the GoJ to improve the budget planning and preparation process. The budget planning and preparation framework in the GoJ is input focused with insufficient focus on government policy priorities and outputs. The current monitoring and evaluation system at the General Budget Department (GBD) is inadequate for effective assessment and results are not used for budget allocation decisions or for performance improvement decisions.

PFMA will assist GoJ to continue implementing Result Oriented Budgeting (ROB) and organizational structure improvements for the budget entities to increase the focus on service delivery, improve coordination and oversight changes. This will strengthen public accountability for performance. PFMA will also promote gender responsive budgeting.

The Implementing Partner will support the budget staff at GBD to be able to implement new techniques so that the budget is more transparent in tracking expenditures, and is more reflective of GoJ decisions, leading to a more efficient use of budget resources.

USAID/Jordan has invested significant resources in implementing the Government Financial Management Information System (GFMIS) to computerize the entire life-cycle of budget preparation, budget execution, and financial reporting. GFMIS is still not fully utilized in the Budget preparation area including the Hyperion system features, project management module and costing module. The Implementing Partner will support MoF and GBD to activate and

72027820R00001 implement these modules, taking into consideration that the licenses will be paid by the government, not PFMA.

USAID/Jordan envisions that additional support will be required to develop and customize the needed reports through using the business intelligence features at GFMIS and to ensure that Ministries across the GoJ utilize the GFMIS system in budget decisions. The system should provide accurate and up-to-date reports.

Illustrative results under Sub-Objective 2.1include:

● A direct relationship between performance information and budget decision is created.

● Improved alignment of budget expenditures and government priorities within the available resources.

● Key GBD staff are well trained and lead the budget staff at line ministries to implement

ROB.

● Promoted gender responsive budgeting and improved alignment of allocations with gender priorities and commitments within the available resources.

● Established monitoring and evaluation systems for budget performance.

● Central Government budget book prepared through GFMIS – Hyperion module.

● GFMIS is fully utilized and its modules implemented.

Some illustrative activities are listed below. These are not intended to be comprehensive or prescriptive but are listed to provide examples for offerors to illustrate the kinds of tasks to be proposed as a means to achieve anticipated results.

● Support the GBD to apply the needed improvements to strengthen connections between strategic top-down planning and bottom-up budgetary processes.

● Support the government to increase the use of results-oriented budgeting and gender-responsive budgeting.

● Support the government to identify annual strategic priorities and performance indicators for the GoJ to allocate budget resources accordingly.

● Help GBD to undertake mid-term budget review to make the budget more adaptable and consistent with fiscal changes.

● Set up monitoring and evaluation systems to provide the needed analysis and assessments of the budget performance.

● Support GBD to use GFMIS in the budget preparation process through fully activating the Hyperion and the Project Management modules.

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● Expand the functionality of GFMIS to track payroll and personnel data through the integration with the Civil Service Bureau.

Sub-Objective 2.2: Budget Execution Improved

To increase fiscal sustainability, the GoJ needs to significantly enhance the public expenditure management and the control of expenditure, both of which are essential for efficient and effective resource management. PFMA shall support the GoJ to monitor the budgetary performance of line ministries/departments during the fiscal year and ensure the alignment of public expenditures with total revenues and allocative efficiency through the conformance of budgetary allocations with strategic priorities.

Under this area, the Implementing Partner will work with the MoF and the Audit Bureau to strengthen the audit at both levels (Internal and external) in order to protect the use of public funds and assets from waste, fraud, and abuse. This includes improving the current audit process based on international auditing standards, strengthening requirements for cooperation between the Audit Bureau and the internal audit control units, and enhancing coordination with other related accountability mechanisms (e.g. Anti-Corruption Commission, Ombudsman Bureau) and the General Budget Department.

The Implementing Partner is requested to implement new techniques to track the expenditures and support MoF to implement standards (e.g. International Public Sector Accounting Standards (IPSAS) and others), and utilize the GFMIS to strengthen expenditure controls and regular reporting, leading to more efficient use of budget resources.

Illustrative results under Sub-Objective 2.2 include:

● The central budget is reflective of better informed policy decisions regarding government expenditures.

● Central budget provides a complete breakdown of all budget expenditures, activities financed, outputs produced, and results achieved.

● Improved budget institutions Key Performance Indicators (KPI) to support transition to more focused ROB through the PER feedback.

● The GFMIS is fully utilized for Public Expenditure Management.

● Accrual-Based International Public Sector Accounting Standards are applied.

● Increased number of performance audits performed according to international audit standards.

● Internal audit at the MoF is strengthened.

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● Incorporation of audit findings and corrective actions by GoJ Ministries/departments to improve cost and quality of GoJ services.

● Improved quality of financial reporting system in the GoJ.

Some illustrative activities are listed below. These are not intended to be comprehensive or prescriptive but are listed to provide examples for offerors to illustrate the kinds of tasks to be proposed as a means to achieve anticipated results.

● Help GoJ undertake comprehensive periodic Public Expenditure Review (PER) for budget institutions in coordination with (MoF).

● Support GBD to improve the budget institutions KPIs.

● Support the GoJ to implement IPSAS through providing technical assistance.

● Develop the principles of expenditure reductions and the strategies for reducing or slowing down the rate of spending.

● Support GFMIS to apply the needed upgrades and conduct customization on the GFMIS for better expenditure control and more accurate reporting.

● Train staff on modern audit techniques, including risk-based techniques, and develop the risk-based criteria.

● Develop/use of feedback instruments and mechanisms to provide the Ministries with audit results, corrective actions and follow-ups to ensure that the corrective actions are implemented.

● Develop and use of performance indicators for the Audit Bureau and enhance the role of internal control units within line Ministries.

Objective/Component 3: Optimize Public Expenditure Management

Reforms to improve the transparency and integrity of government procurement and inventory management systems are one of the GoJ priorities. The Implementing Partner will support the GoJ to promote more effective and responsive public procurement system. It will also support reforms and improvements for the public inventory management. The required inputs are technical assistance, training, and when appropriate, special equipment such as computer systems/software, and office equipment.

Sub-Objective 3.1: Public Procurement Process Institutionalized

The procurement system in Jordan consists of the three entities (The Government Tenders Department which is responsible for construction, the General Supplies Department that handles the procurement of government’s supplies, and the Unified Purchasing Department which purchases the medicines). The government of Jordan will do restructuring for these entities for the purpose of merging them under one entity. Currently, the budget institutions are able to do

72027820R00001 any purchase under 20,000 JOD internally; otherwise they have to go through the government procurement system.

The GoJ has implemented an electronic procurement business solution for governmental public sector institutions in Jordan. The Korean Online E-procurement System (KONEPS) has been officially adopted by Jordan as a pilot and adapted to the Jordanian needs. The new system (called JONEPS) was developed under the direction of the Korea International Cooperation Agency (KOICA) and the Public Procurement Service (PPS).

The Implementing Partner shall support improving public procurement management through enhancing the organizational system for the purpose of improving its structure, operation and the quality of its workforce.

Illustrative results under Sub-Objective 3.1 include:

● Fully integrated and efficient e-procurement system.

● Enhanced organizational structure of the procurement entities.

● Better decisions making regarding government procurements.

Some illustrative activities are listed below. These are not intended to be comprehensive or prescriptive but are listed to provide examples for offerors to illustrate the kind of tasks to be proposed as means to achieve anticipated results.

● Develop effective policies and legislations to enhance the transparency and efficiency of the procurement system.

● Advance best practices in e-procurement and public procurement management.

Sub-Objective 3.2: Inventory Management Improved

The GoJ has implemented an Inventory Management System which is hosted at the General Supplies Department. This system is implemented on all the budget institutions. The cabinet issued a circular to currently adopt the electronic system in addition to the manual system in managing the inventory, and solely use the electronic system by the end of 2019. The inventory management system includes all the government assets and the purchase values of these assets;

this information is important to implement IPSAS. The system can also be utilized by the Audit bureau and the internal audit departments in the ministries and other budget institutions.

Currently, there is no integration between the Inventory Management System and other governmental systems. It is important to integrate this system with the e-procurement system and the GFMIS. This integration will support the procurement decentralization and will help the government to utilize the current governmental resources efficiently. The inventory management system does not have an independent data center as the system currently uses the GFMIS data-center and licenses.

72027820R00001 The GoJ “Fleet” system is currently being hosted at the Ministry of Transportation. This system is important to proactively manage vehicle equipment assets, track their costs and improve long-term planning. The GoJ is planning to move the “Fleet” system to be part of the government procurement system.

Illustrative results under Sub-Objective 3.2 include:

● Improved control of inventory and procurement to ensure efficiency and effectiveness of the procurement system.

● The inventory management system is utilized by the internal audit departments at ministries, audit bureau and all budget institutions.

An illustrative activity is listed below. It is not intended to be comprehensive or prescriptive but is listed to provide examples for offerors to illustrate the kinds of tasks to be proposed as means to achieve anticipated results.

● Develop and integrate the procurement system, the inventory system, and the GFMIS.

Objective/Component 4: Emerging GoJ Priorities Supported

The GoJ requirements may change and evolve with time; this can always be the case as external conditions can also change. PFMA should be responsive to changes in the government, or economic environment, and capture emerging opportunities.

The Implementing Partner will analyze new requirements requested by the government and provide USAID with the recommendations and innovative solutions to meet the requirements or face any challenges.

Implemented activities under this component should have high impact and yield tangible results, with an aim to improve the public finance management in the Kingdom.

II. Linkages with USAID and Jordanian Priorities

PFMA will assist the GoJ in implementing key elements of its PFM Reform Strategy (2018-2021) that is meant to improve the government’s fiscal systems in order to enhance fiscal sustainability of the Kingdom. Fiscal reform activities under PFMA will help decrease the GoJ’s budget deficit and the government’s reliance on international donors. PFMA will build on previous successful fiscal reform achievements and will ensure continuous monitoring and evaluation of its activities.

72027820R00001 PFMA will contribute to the current CDCS Mission Goal of Improved Prosperity, Accountability, and Equality for a Stable, Democratic Jordan. The activity is designed to help achieve Development Objective (DO) #1: To accelerate Broad-based Economic Development.

Specifically, the activity will be the main implementing mechanism for Intermediate Result (IR) #1.3: To improve Fiscal stability and public financial management.

USAID is well positioned among donors to meet the needs of the MoF in reforming its revenue administration, given USAID’s current Fiscal Reform and Public Financial Management Activity and other previous activities. PFMA also complements USAID’s competitiveness and policy reform activities that focuses on increasing the competitiveness of the Jordanian private sector within a conducive business enabling environment.

PFMA Activity will work collaboratively with other international donors to minimize duplication of efforts and maximize the impact of the performed work, and support common development objectives. Donor coordination is extensive, as both the MoF and other related institutions receive technical assistance from several international agencies. Principal agencies are the International Monetary Fund (IMF), the U.K.’s Department for International Development (DFID), and the European Union (EU). USAID has been the principal donor in the PFM area. The Implementing Partner is expected to collaborate closely with other bilateral and multilateral donors active in the areas of public financial management through the MoF and the Ministry of Planning & International Cooperation (MOPIC). This activity will continue to work closely with the GoJ to support Jordan to be compliant with IMF agreements.

III. Cross-Cutting Themes and Special Topics

The cross-cutting themes and special topics listed below will be integrated as part of the PFMA learning agenda and of the Activity Monitoring, Evaluation, and Learning Plan (AMELP), and may be tracked through performance and context data as well as other information such as narrative or geospatial formats.

A. Stakeholder involvement and capacity building

The Implementing Partner will coordinate effectively with all stakeholders to optimize planning and implementation. Project activities will be identified through consultations with public and private sector representatives. Upon awarding this contract, USAID may choose to set up an advisory board comprised of representatives from USAID, PFMA, GoJ Prime Minister’s Office, MoF, and possibly relevant private sector representatives (e.g. think tanks, academia). This advisory board will review the project’s work plans and will provide strategic advice on activities.

B. Gender

The GoJ is currently reviewing and prioritizing the economic reform plan, focusing on fiscal policy as one of the critical factors. Failing to acknowledge gender issues in fiscal policies can lead to unintended results where groups of women may experience adverse impact more than

72027820R00001 men. Moreover, gender inequalities in access to labor markets and income generating opportunities may have negative impact on the effectiveness of the fiscal policy which will not fulfill its intended objectives in an efficient way.

The GoJ has made initial progress towards greater gender equality in some areas related to fiscal and public financial management issues, such as working on Gender Responsive Budgeting but still gender balance in the public sector continues to be an issue, particularly at leadership and management positions.

USAID/Jordan is committed to integrate gender considerations into its activities. Bidders will need to look carefully at how promoting a modern Jordanian fiscal regime could possibly create disparate economic hardships on women (especially rural women) due to existing cultural norms, and gender-based constraints related to mobility, time, and space that may negatively affect access to services and information.

USAID will ensure that all proposed activities are consistent with this gender-integrated approach. The Implementing Partner will be expected to undertake an assessment at the beginning of the activity to identify any areas where there is likely to be a differential gender impact. These findings will subsequently be incorporated into the detailed design of all components. On the component level, the Implementing Partner must strengthen gender equality by identifying specific gaps to be addressed and provide the required interventions under each component to address gender issues and support the GoJ to face these issues.

The Implementing Partner will work with GoJ on assessing the fiscal policies with regard to the differential impact on men and women, supporting the public sector in improving the Gender Responsive Budgeting and working on Taxation systems which should be designed to reduce adverse impacts on women and using taxation as a tool for promoting gender equality.

It is crucial to identify performance indicators that are relevant to gender and strategies in order to ensure high level of meaningful female participation, taking into consideration that USAID’s overall requirement that data collection to be disaggregated by gender, whenever feasible.

C. Inclusive Development

USAID is committed to the inclusion of people who have physical and cognitive disabilities and those who advocate and offer services on behalf of people with disabilities. This commitment extends from the design and implementation of USAID programming to advocacy for and outreach to people with disabilities. USAID’s policy on disability is as follows: To avoid discrimination against people with disabilities in programs which USAID funds and to stimulate an engagement of host country counterparts, governments, implementing organizations and other donors in promoting a climate of nondiscrimination against and equal opportunity for people with disabilities. The USAID policy on disability is to promote the inclusion of people with disabilities both within USAID programs and in host countries where USAID has programs.

USAID therefore requires that the contractor not discriminate against people with disabilities in program implementation and that it make every effort to comply with the objectives of the USAID Disability Policy in performing this contract. To that end and within the scope of the

72027820R00001 contract, the contractor’s actions must demonstrate a comprehensive and consistent approach for including men, women and children with disabilities.

D. Environmental Considerations

The Implementing Partner must make every effort to ensure that its programs do not exacerbate existing environmental challenges. A Categorical Exclusion was granted for technical assistance, training, and program support, pursuant to 22 CFR 216.2 [c][2][i], and a negative determination to small grants as long as these activities follow best management practices to mitigate potential environmental impacts, such as following environmental checklists and guidelines that are to be reviewed by the Mission Environment Officer (MEO). The activities under PFMA will continue to fall under a negative determination.

E. Sustainability

The sustainability of the activities is a critical factor under PFMA and it should be embedded within the work-plan of each component through focusing on three important factors:

● Enhancing the organizational system and increasing the capacity of MoF in order to improve its operations, the quality of its workforce, and its services. Criteria set by the King Abdullah II Award for Excellence in Government Performance and Transparency in addition to PFM best practices criteria should be taken into consideration in this regard.

● Working on multiple techniques to transfer the needed knowledge to the government employees to continue the reform after the activity completion.

● Supporting the government to collaborate with their stakeholders to ensure that the GoJ is working towards self-reliance.

The Implementing Partner is required to integrate the sustainability factor under the implementation work-plan and PFM activity MEL Plan learning agenda in order to ensure that technical assistance transfers capacity from the activity to the government. The Implementing Partner must address risks to sustainability, including, but not limited to, maintaining government resources to service technology related systems such as the GFMIS, RMS, and the procurement system.

4. Implementation Considerations

As part of the administrative reform, PFMA will support the MoF to enhance its organizational structure for the purpose of improving its systems, operations, and the quality of its workforce. It will work to engage the academia with an aim to improve the quality of professional staff at the public sector and supply public institutions, especially MoF, with highly qualified economists.

The activity will focus on helping the country towards self-reliance by adding special interventions that will employ multiple techniques to transfer needed knowledge and capacity to government employees through job shadowing, on-the-job training and assigning clear

72027820R00001 responsibilities to continue the reform after the completion of the activity. This activity will also support the government to communicate and collaborate with stakeholders to execute fiscal reforms and foster the participation of citizens, thereby enhancing accountability and transparency. It will also enhance the public sector audit structure and its capacity to monitor, evaluate and support an effective audit function in Jordan. This will enable the public sector entities to fulfill their duties, be accountable and transparent to the public, and at the same time achieve its objectives effectively, efficiently, and economically.

The quality of any decision is entirely dependent on the nature and quality of the information made available. For this reason, PFMA will create a strong reporting mechanism that will provide the decision makers, including the MoF, the Prime Minister’s Office and other high authorities, with timely and reliable financial data and will assist them in formulating appropriate policies. In addition, PFMA will engage the private sector to the extent possible to advocate for policies that result in the growth of the economy.

PFMA will continue strategic work in the fiscal reform areas such as the implementation of International Public Sector Accounting Standards (IPSAS) and the Result Oriented Budgeting

(ROB).

USAID/Jordan is committed to ensuring the integration of gender considerations into its activities. PFMA will have an integrated, gender-sensitive approach that aims to benefit both men and women and the project’s work plans will identify interventions, including public outreach, to address gender issues.

USAID/Jordan and the implementing partner of PFMA will coordinate with other USAID projects, other US Government agencies, donors, as well as with international organizations in order to ensure common objectives and policy approaches and to avoid duplication of effort.

The Implementing Partner will provide the following: (i) technical assistance on fiscal reform activities; (ii) training on information technology systems and operations, legal and procedural drafting, and tax systems operations; and (iii) commodities, including IT equipment, as needed.

PFMA will focus on high impact interventions that will assist the MoF to improve revenue administration, put systems in place to strengthen the fiscal sustainability of Jordan, improve allocation of public resources and achieve the efficiency of resources utilization, and improve budget execution oversight through internal and external auditing. It is expected that this will ultimately result in increased GoJ revenues, a better allocation of resources, a reduction in Jordan’s budget deficit, and less reliance by the GoJ on external donor support.

To support a more informed decision-making process at all levels, strong reporting systems are required and an effective audit function should be in place. The GoJ has committed to improve the role of public oversight agencies, including the role of the Audit Bureau. The Implementing Partner will work with MoF to define the financial reporting requirements of MoF stakeholders including, but not limited to, the public and higher authorities in the GoJ such as the Prime

72027820R00001 Ministry and Royal Court. Feedback from these stakeholders will inform the implementation of new activities or the need to revise tasks or sub-tasks under implementation in order to achieve the best possible results.

PFMA will explore ways of collaboration between the MoF directorates and their stakeholders.

Collaboration between MoF directorates can be done in different ways and will generate a range of benefits. This includes; 1) the constructive engagement between citizens and the GoJ which will help citizens to voice their aspirations, concerns and alternatives for consideration by policy makers, especially in the tax aspects. 2) Cross-boundary collaboration between MoF and local government entities, especially the collaboration to achieve fiscal decentralization. 3) Donors cooperation and collaboration as USAID is the major donor in the public financial management area and will be able to support the MoF to achieve the needed collaboration with donors. 4) Collaboration with other government institutions and chambers to achieve the fiscal stability.

This includes but not limited to; Central Bank of Jordan, Ministry of Digital Economy and Entrepreneurship (MoDEE) , the Audit Bureau, the Civil Service Bureau, the Ministry of Local administration. Coordination and collaboration with the Ministry of Municipal Affairs and other institutions is critical in order to address needs related to PFM capacity outside Amman

Grants under Contract (GUC)

Grants-Under-Contract will support achievement of the PFMA’s components/objectives. A requirement for successful reform is the mobilization of support from within the private sector.

Reform is most effective when it reflects the needs of a definable constituency with the private sector. This is especially important in addressing constraints to the expansion of small and medium enterprises. In a small economy like that of Jordan, large firms seldom have any problem making their concerns known at the highest levels of government. The same is not true of small and medium enterprises, which may be unaware of the full impact of enabling environment constraints on their businesses and business prospects.

The number and quality of economists with a graduate degree in Jordan is insufficient hence, the GoJ faces a discrepancy between the quantity supplied and the quantity demanded of professional economists. This impacts the availability of well-educated and experienced economists, particularly in the public sector. This problem is compounded with the fact that the government seldom involves academia in research and strengthening public finance decision making. Consequently, the level of innovation necessary for long lasting structural reform to move Jordan to a nimble market economy is hindered by the lack of human resources in the area of economic governance. The government lacks qualified economists and this is substituted by hiring foreign consultants, rendering the reform process non-sustainable.

In order to address the above-mentioned issues and to engage the private sector in reform, the contract will include a grants-under-contract mechanism for advocacy and institutional development for local Jordanian NGOs. Such grants are likely to be made to Jordanian NGOs such as think tanks, research centers, universities, chambers of commerce, Association of Certified Public Accountants, and others.

72027820R00001 The proposal should include a discussion of how the grants-under-contract mechanism will be integrated into the fiscal reform approach. The Implementing Partner will ensure that selected organizations can meet responsibility determination requirements and can manage and account for USG funds. This may include training in developing policies, procedures, and internal controls.

Anticipated results under GUC include:

● Well-positioned Private Sector to advocate for its interests regarding fiscal policies.

● Academic and professional partnerships between MoF and Jordanian universities are in place.

● MoF has a more collaborative approach towards private sector economic centers, the think tanks and local chambers (trade, industry, etc).

● Analysis and economic researches are done by local economists.

● Capacity to design, lead, and/or conduct analysis and economic research established at public institutions, mainly the MoF, (by local Jordanians) to support leadership decision-making.

Some illustrative activities are listed below. These are not intended to be comprehensive or prescriptive but are listed to provide examples for offerors to illustrate the kinds of tasks to be proposed as means to achieve anticipated results.

● Support private sector entities to advocate for their interests regarding fiscal policies.

● Support MoF to build partnerships with private sector economic centers, think tanks, and local appropriate entities as necessary.

● Support the MoF to undertake agreements with Jordanian or international universities to increase the number of properly qualified professionals working at MoF with adequate incentives (e.g. support employees to undertake Master or Ph.D. training with an adequate human resource hiring mechanism to have employees work a minimum of years at the Ministry after graduation).

● Develop collaborative mechanism between the academia and businesses to improve the training of economics students adapted to Jordanian needs.

● Support and serve as link between Jordanian Universities and U.S. (or third country) universities to improve current programs.

5. Monitoring, Evaluation and Learning

The Implementing Partner shall submit an initial AMELP that must include at least the following elements:

● Using the PFM activity results framework, describe activity goals, objectives, and sub-objectives as well as a brief description of the linkages between intervention outputs and their expected results. This section should include the activity theory of change, context factors and events, assumptions and risks, cross-cutting issues and special topics;

these should all be integrated into the activity learning agenda.

● Definition and description of the performance, context and other indicators to be tracked, including the following: unit of measure; data source; justification/management utility;

baseline values; annual targets; annual actual data; frequency and…