JA - MESC III.pdf

Tab 1

U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

DETERMINATION AND FINDINGS (D&F)

Activity: USAID/JORDAN MANAGEMENT ENGINEERING SERVICES CONTRACT, PHASE III

1. Nature and description of the action being approved:

This is a request for approval to limit competition in procuring the Management and Engineering Service Contract - Phase III (MESC III) activity to local Jordanian architect and engineering (A&E) firms classified by the Jordanian Ministry of Public Works and Housing (MPWH) as Class 1A. The estimated value of the procurement is $24,900,000 million, with a five-year period of performance.

2. Citation of the statute upon which this D&F is based:

Pursuant to AIDAR 706.302-70(b)(3)(i), a full and open competition procedure need not be followed for “an award for which the Assistant Administrator responsible for the project or program makes a formal written Determination and Findings (D&F), that compliance with full and open competition procedures would impair foreign assistance objectives, and would be inconsistent with the fulfillment of the foreign assistance program.” The position of Assistant Administrator for the Middle East Region is currently vacant, and the authority to make a formal written D&F under AIDAR 706.302-70(b)(3)(i) is not further delegable to the Senior Deputy Assistant Administrator for the Middle East Region pursuant to ADS

103.3.1. Because the relevant AIDAR authority is delegated to the Assistant Administrator for the Middle East Region through the Deputy Administrator for Policy and Programming, the Deputy Administrator may make the D&F in place of the Assistant Administrator.

3. Findings:

Summary: The MESC III activity is critical to achieving one of the U.S. government’s (USG) principal foreign policy objectives in Jordan: strengthening water security to enable a more stable and prosperous Jordan. Limiting competition to local contractors is consistent with USAID’s commitment to localization.

Specifically, this approach will help ensure that local context, knowledge, and strategies are applied to address the myriad challenges this activity addresses. Limiting competition to the approximately 15 local contractors classified as Class 1A by the Government of Jordan (GOJ) will help ensure the activity's successful and sustainable implementation.

Development Challenges and Objectives: Jordan is one of the most water-scarce countries in the world, and insufficient water for basic human needs undermines Jordan’s political stability and potential for long-term economic growth. The USG foreign assistance objective captured in USAID’s Country Development Cooperation Strategy is to accelerate Jordan’s self-reliance while improving prosperity and stability. Strong bilateral commitment to the security and stability of Jordan was further formalized in 2022 through a seven-year memorandum of understanding (MOU) that provides for $10.15 billion in bilateral foreign assistance. Through intergovernmental agreements, the GOJ committed to strengthening the long-term sustainability and security of the water sector through the achievement of two main benchmarks: 1) increasing residential water tariffs by 4.6 percent per year between now and 2030, and 2) reducing non-revenue water (NRW) by 2 percent annually. The latter benchmark is directly relevant to the work of MESC III activity, where the contractor will be responsible for guiding and monitoring the water utilities in achieving the targets of this benchmark. In addition, USAID expects that the progress monitoring toward this benchmark that started under MESC II would continue under the proposed MESC III, as it has been demonstrated that a local firm is capable of the rigorous verification required by bilateral agreements.

DETERMINATION AND FINDINGS (D&F)

MANAGEMENT ENGINEERING SERVICES CONTRACT PHASE III

The second benchmark is essential because Jordan loses almost half of its limited water resources to leaks, inaccurate metering, and illegal connections (this lost water is termed “non-revenue water—NRW”). USAID partners with GOJ to reduce NRW through a series of government-to-government (G2G) grants collectively referred to as the NRW Project.

Activity Description: The selected A&E contractor for the MESC III Activity will oversee implementing and monitoring the USAID G2G grants under the NRW Project, building on the lessons learned by the previous USAID programming. It will provide technical assistance and capacity building for the Jordanian water utilities that receive USAID funding, including Miyahuna, Aqaba Water Company (AW), Yarmouk Water Company (YWC), the Water Authority of Jordan (WAJ), and the Jordan Valley Authority (JVA). This will include reviewing the planning and design of physical infrastructure for NRW reduction activities, including specifications and tender documents, and monitoring water utilities construction contractors implementing infrastructure upgrades. Additionally, the selected contractor will provide administrative and management capacity strengthening to water utilities and report directly to USAID on the progress of G2G grant implementation. With the existing local knowledge of the dynamics of the water sector in Jordan, the prospective contractor will be responsible for verifying and monitoring the second benchmark of the intergovernmental agreement between the GOJ and USG relating to the annual reduction in NRW.

Under the prospective MESC III activity, the selected firm will assist the GOJ in implementing the NRW Project under the corresponding Fixed Amount Reimbursement Agreements (FARAs) by providing A&E-related services on USAID’s behalf. This assistance will include oversight and capacity strengthening to all water entities in construction, design, health and safety, cost estimation, procurement, and management and will assist water utilities with strengthening operations and maintenance programs.

The selected firm will also assist the GOJ with developing systematic procedures to collect, manage, and use data and information deriving from utility operations.

Successful Experiences Using Local Contractors: USAID has supported the GOJ on NRW reduction since 2015 through previous MESC I and II contracts, which were awarded to a local A&E firm, Engicon. MESC I was competed among local firms under the ADS 302 pilot authority for limiting competition to local entities (Section 7077), while MESC II was awarded through full and open competition, as a result of which, the same firm was competitively selected.

USAID/Jordan has had significant success in partnering with local A&E firms to further its development objectives in improving water infrastructure through different activities, such as MESC I and II and the Water Engineering Services Activity. These successes demonstrate that local A&E firms can provide the services and the extensive oversight and monitoring required for the successful implementation of the NRW Project at a significant cost benefit. It has also shown that local A&E firms possess the necessary expertise to provide technical assistance to all water utilities effectively. Successful implementation experience with local A&E firms on other USAID/Jordan activities, such as the Schools for a Knowledge Economy Project, and the four task orders under the local Vertical Structures Architect-Engineer Indefinite Delivery, Indefinite Quantity (A&E IDIQ) project, which has three local A&E firms as holders, further demonstrates the invaluable benefit of firsthand knowledge of navigating legal and regulatory systems that local firms bring.

Proposed limitation to Class 1A Contractors: The Jordanian Ministry of Public Works and Housing (MPWH) classifies A&E firms based on set standards. Class 1A is the highest classification issued by the MPWH to firms based on their experience, past performance, and financial and technical capabilities.

Class 1A A&E firms are highly qualified and comply with the rigorous standards and regulations prescribed by Jordanian laws, which ensures quality and accountability. Local Class 1A A&E firms meet rigorous Jordanian classification standards and are well-positioned to implement the prospective services, leveraging the knowledge of local water systems and requirements. Limiting competition to local Class 1A A&E firms will ensure that the selected entity possesses the critical knowledge and experience of working on NRW and other water issues in Jordan, will ensure project efficiency and effectiveness, and will create opportunities for qualified local staff. According to the MPWH, approximately 15 Jordanian A&E firms are classified as Class 1A, indicating a robust pool of potential implementers.

Furthering foreign assistance objectives: Reducing NRW is a high-profile foreign policy objective embedded within the USG MOU with Jordan. Limiting competition to local A&E Class 1A firms will ensure the activity is implemented in a manner that capitalizes on local knowledge and ownership. This local expertise is especially important since the activity will work directly with local utilities, public-sector water entities, and multiple private-sector contractors. Limiting competition for this award to local Class 1A A&E firms is appropriate given that an ample pool of highly qualified local firms can successfully implement this contract. Expanding USAID/Jordan’s utilization of local A&E firms will enrich local partners’ skill sets, both technical and administrative, that can be used in the future on other initiatives, thus facilitating the systemic and sustainable change that USAID is seeking. These efforts are necessary to further diversify the partner base; enhance the capacity of new, local partners; benefit from local perspectives and knowledge; and strengthen local ownership.

Moreover, limiting competition to local Class 1A A&E firms demonstrates to Jordanians that USAID is increasing local employment, serving the available local expertise, and attracting large investments that support the local economy. Contracting to local Jordanian firms means using Jordanian expertise and Jordanian labor. Furthermore, U.S companies can work as subcontractors with competing local firms, which will further build local firms' capacities.

Finally, limiting competition to local actors would support USAID’s localization goals set in the Acquisition and Assistance Strategy and would also align the activity with the Local Capacity Strengthening Policy by empowering local partners. This activity strengthens local capacity to respond to some of Jordan’s most pressing development challenges and supports local actors' abilities to deliver and sustain development results – rather than focusing on local actors’ capacities to qualify for and manage direct USAID awards.

This approach will lead to more sustainable and inclusive development and will contribute to USAID’s commitment to award at least one quarter of program funds directly to local partners by 2025.

4. Determination:

Based on the information and findings discussed above, the Deputy Administrator for Policy and Programming determines that compliance with full and open competition procedures would impair foreign assistance objectives and would be inconsistent with the fulfillment of the foreign assistance program, including USAID’s broader localization goals. Competition for this procurement will be limited to local Class 1A A&E firms, given that a reasonable number of highly qualified local firms can effectively carry out the services outlined in the statement of work.

MANAGEMENT ENGINEERING SERVICES CONTRACT PHASE III

DETERMINATION AND FINDINGS BY THE DEPUTY ADMINISTRATOR FOR POLICY AND PROGRAMMING

As the authorized official, based on the findings described above, I have determined that the proposed action is justified in accordance with AIDAR 706.302-70(b)(3)(i).

_____________________________________ 3/27/2024

Isobel Coleman Date Deputy Administrator for Policy and Programming

CONFIRMATION OF CONSULTATION WITH THE AGENCY COMPETITION ADVOCATE

AIDAR 706.302-70(c)(4) requires prior consultation with the Agency Competition Advocate before executing the written determination and finding. The undersigned Agency Competition Advocate certifies that consultation took place before executing the written determination and finding.

Deborah Broderick Date Agency Competition Advocate

Tab 2

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

COMPETITION

TO: Isobel Coleman, Deputy Administrator for Policy and Programming

THROUGH: Andrew Plitt, SDAA for the Middle East Bureau and Camille Garcia, Supervisory Contracting Officer, USAID/Jordan

FROM: Louis Qaqish and Rasha Tomaira, Water Resources and Environment Office, USAID/Jordan

SUBJECT: Justification and Approval (J&A) for Other than Full and Open Competition

1. This document sets forth the facts and rationale justifying the use of other than full and open competition, in accordance with the Agency for International Development Acquisition Regulation (AIDAR) 706.302, specifically section 706.302-70(b)(3)(i), “Impairment of Foreign Aid Programs.”

This document was prepared by the U.S. Agency for International Development (USAID)/Jordan Water Resources and Environment (WRE) Office.

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

This is a request to approve limiting competition for the Management and Engineering Service Contract - Phase III (MESC III) activity to local Jordanian Architect and Engineering (A&E) firms classified by the Ministry of Public Works and Housing (MPWH) as Class 1A. The anticipated contract will have a total estimated cost of approximately $24.9 million and a performance period of five years. Under the MESC III Activity, the selected A&E contractor will provide technical assistance and capacity building for the Jordanian water utilities, such as Miyahuna, Aqaba Water Company (AW), Yarmouk Water Company (YWC), the Water Authority of Jordan (WAJ), and the Jordan Valley Authority (JVA). This will include reviewing the planning and design of physical infrastructure for non-revenue water (NRW) reduction activities, including specifications and tender documents, and monitoring water utilities construction contractors implementing infrastructure upgrades. Additionally, the selected contractor will provide administrative and management capacity strengthening to water utilities, collaborate with senior management, and report directly to USAID to improve USAID’s insight into water utilities’ progress.

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

Jordan is one of the most water-scarce countries in the world and loses much of its limited water resources to leaks, inaccurate metering, and illegal connections (this lost water is termed “non-revenue water—NRW”). USAID partners with the Government of Jordan (GOJ) to reduce NRW through Fixed Amount Reimbursement Agreements (FARAs), collectively referred to as the NRW Project. The overall objective of the NRW Project is to support the GOJ in achieving its top priority goal of reducing NRW by 2 percent annually from its current level of around 50 percent nationally to 25 percent by 2040. MESC III will build on previous USAID programming and oversee the implementation and monitoring of the NRW FARA projects. Furthermore, with the existing local knowledge of the dynamics of the water sector in Jordan, the prospective contractor will be responsible for verifying and monitoring the second benchmark of the intergovernmental agreement between the GOJ and USG relating to the annual reduction in NRW.

JUSTIFICATION AND APPROVAL

Under the prospective contract, the selected firm will also provide assistance, oversight, and capacity strengthening to all water entities in construction, design, health and safety, cost estimation, procurement, and management; assist water utilities with strengthening its operations and maintenance program; and assist with the development of systematic procedures to collect, manage, and use data and information deriving from utility operations. The selected firm will provide the assistance and services under the following main components:

Component 1- Technical Assistance for NRW Construction Works: improve capacities of the water entities to autonomously manage infrastructure upgrades related to NRW project activities, and support the water sector in implementing the comprehensive step approach for reducing NRW in Jordan per the NRW Strategy (2022-2040).

Component 2- Water Utilities Administration Assistance: Support the Ministry of Water and Irrigation and the water entities to maintain results from the NRW reduction activities during the past years, continue to manage their resources, and to prioritize infrastructure repair and upgrade efforts. In addition to providing capacity building, on-the-job-training, formal education, review and comment on materials prepared, and other tools identified and agreed to by the Water Utilities and USAID. Moreover, the contractor will help the water entities' improve their health and safety procedures, practices, oversight, and reporting.

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

Pursuant to AIDAR Section 706.302-70(a)(2), “full and open competition need not be obtained when it would impair or otherwise have an adverse effect on programs conducted for the purpose of foreign aid…” Pursuant to AIDAR 706.302-70(b)(3)(i), “an award for which the Assistant Administrator responsible for the project or program makes a formal written Determination and Findings (D&F), that compliance with full and open competition procedures would impair foreign assistance objectives, and would be inconsistent with the fulfillment of the foreign assistance program.” AIDAR 706.302-70(c)(4) provides that: “The authority in 706.302-70(b)(3)(i) shall be used only when no other authority provided in (48 CFR) FAR 6.302 or (48 CFR) AIDAR 706.302 is suitable.”

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition that requires use of the authority cited:

Local Class 1A A&E firms in Jordan are uniquely qualified to meet the required needs under this acquisition and limiting competition to them further supports the USG’s foreign assistance and localization objectives. The Ministry of Public Works and Housing (MPWH) has a rigorous classification system, and recent USAID contracts with Jordanian firms classified by MPWH as Class 1A resulted in outstanding products in terms of quality, cost, and schedule, as well as responsiveness to regional particularities. Local A&E firms are highly professional and qualified and have the necessary experience and technical skills to respond to USAID’s architecture and engineering requirements for water and wastewater infrastructure.

According to the MPWH, there are around 15 Class 1A firms eligible to work on water and wastewater projects; five of these firms are currently implementing work with USAID under six different activities within the water, education, health, and economic sectors, including USAID’s current contract for similar activities, MESC II. This demonstrates that local A&E firms can provide the services and the extensive oversight and monitoring required for the successful implementation of the NRW Project and possess the necessary expertise to provide technical assistance to all water utilities effectively.

JUSTIFICATION AND APPROVAL

USAID/Jordan has determined that awarding this activity to a local Class 1A A&E firm would greatly support USAID’s localization goals while achieving cost savings, while at the same time stimulating the local economy and helping to relieve high unemployment. In addition to this, and given the existing local expertise in NRW reduction work and the extensive knowledge of the water sector and how it works, this award can be implemented by a local firm as the prime contractor.

Limiting the competition to local Class 1A A&E firms under this activity will enrich local partners’ skill sets, both technical and administrative, to promote sustainable water infrastructure in Jordan. The size and scope of this activity require that the selected partner have a physical presence in Jordan to ensure a smooth and fast-paced transition, given that the NRW Project Phases 3 and 4 are ongoing (until 2027 and 2029, respectively) and that the GOJ utilities/entities incorporate the necessary technical assistance without disruption.

As a result, compliance with full and open competition procedures for the MESC III award would impair foreign assistance objectives that relate to Development Objective No. 2 of the CDCS (Jordan’s Ability to Improve its Water Security Strengthened) and directly contributes to Intermediate Results (IRs) 2.1 (Jordan’s ability to meet water demand improved); 2.2 (Water sector governance and management strengthened); and 2.3 (Water use efficiency and conservation expanded), and would be inconsistent with the fulfillment of the foreign assistance program given the ability and availability of local Class 1A A&E firms to implement an award with this nature and scope. Furthermore, the MESC III activity is critical to ensuring qualified implementation of the NRW program by the water utilities, which directly supports raising the capacity of water utilities.

6. Description of the efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was publicized as required by FAR 5.2 [AIDAR 705.2]. USAID issued a Sources Sought Notice (SSN) on May 24, 2023, that was publicized via SAM.GOV and in local newspapers for two weeks. USAID received responses from nine firms, six of which were local Class 1A A&E firms. This demonstrates the availability of a reasonable number of capable and interested Jordanian A&E firms. The Request for Qualifications for A&E services for MESC III will be posted on SAM.GOV and appropriate local advertisement to ensure maximum participation of local firms.

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

The estimated cost of the services is based on the past rates and costs under similar projects and the expected level of effort required to complete the work. The rates are anticipated to be comparable to the prevailing rates for similar positions and experience in other USAID projects in Jordan. An Independent Government Cost Estimate (IGCE) for the proposed activities was prepared based on historical costs incurred for similar work in Jordan.

Prior to awarding the contract, the Contracting Officer will ensure due diligence in conducting cost analysis and cost realism of the proposed costs, and finalize negotiations to ensure that the actual cost to the government is fair and reasonable.

JUSTIFICATION AND APPROVAL

MANAGEMENT ENGINEERING SERVICES CONTRACT PHASE III

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

Market research was conducted in accordance with FAR Parts 8 and 10. A Sources Sought Notice (No.72027823RFI00001) was posted on www.SAM.gov and in the local newspapers for two weeks. The purpose of this notice was to obtain capability statements from interested parties relative to predetermined objectives, describing the firm’s experience in relation to the services required, and its capability to execute the services and tasks. Nine entities (six local firms and three international firms) indicated their potential interest in the activity.

Based on the activity design team’s review of the firms’ capability statements, all six local Class 1A A&E firms that responded to the notice were identified as capable of implementing the subject activity. The firms demonstrated their experience in executing interventions that address the objectives identified for the NRW activity, and each firm described its capabilities and past projects that included one or more interventions similar to those requested in this activity. Because six qualified local Class 1A A&E firms expressed their interest in implementing the MESC III activity, the Mission considered limiting the competition to local Jordanian Class 1A A&E firms per the subject of this J&A. U.S. companies and small business firms, if interested, could seek subcontracting opportunities with the competing local firms.

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

This procurement will be limited to local Class 1A A&E firms, supporting the Agency to achieve the localization goals set in USAID’s Acquisition and Assistance Strategy, and aligning the activity with the Local Capacity Strengthening Policy by empowering local partners. This activity strengthens local capacity to respond to some of Jordan’s most pressing development challenges and supports local actors' abilities to deliver and sustain development results – rather than focusing on local actors’ capacities to qualify for and manage awards. This approach will lead to more sustainable and inclusive development and contribute to USAID’s commitment to award at least a quarter of program funds directly to local partners by 2025. Limiting competition to local Class 1A A&E firms for MESC III directly advances USG foreign policy goals and USAID’s vision of sustainable development. Both the GOJ and local contractors will invest more time and resources in advancing and upgrading their systems to be more dynamic in response to this procurement, while at the same time stimulating the local economy and helping to relieve high unemployment. Providing the opportunity to local Class 1A A&E firms to compete under this activity could bring new organizations into USAID’s work, while also enriching new partners’ skill sets, both technical and administrative, to promote sustainable water infrastructure in Jordan. These efforts are necessary to diversify the partner base; enhance the capacity of new, local partners; benefit from local perspectives and knowledge; and strengthen local ownership.

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

As discussed under point no. 6 above, nine potential bidders responded to the SSN expressing interest in the MESC III Activity, providing their capability statements and past projects. Six bidders were local Class 1A A&E firms, while three were international.

11. The actions the Agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required:

JUSTIFICATION AND APPROVAL

MANAGEMENT ENGINEERING SERVICES CONTRACT PHASE III

USAID/Jordan will ensure that future requirements for similar services will be competed to the maximum extent practicable.

12. Technical or Requirements Personnel Certification:

In accordance with FAR 6.303, I hereby certify that the technical statements included above and which form a basis for the justification are complete and accurate.

Louis Qaqish Senior Project Management Specialist Water Resources and Environment Office

13. Contracting Officer Certification:

In accordance with FAR 6.303, I hereby certify that the justification is accurate and complete to the best of my knowledge and belief.

Camille Garcia Supervisory Contracting Officer Acquisition and Assistance Office, USAID/Jordan

14. Approved:

Under AIDAR 706.302-70(b)(3)(i), the Assistant Administrator for the Middle East Region may approve this action. The position of Assistant Administrator for the Middle East region is currently vacant, and the authority to make a formal written D&F under AIDAR 706.302-70(b)(3)(i) is not further delegable to the Senior Deputy Assistant Administrator for the Middle East region pursuant to ADS 103.3.1. Because the relevant AIDAR authority is delegated to the Assistant Administrator for the Middle East Region through the Deputy Administrator for Policy and Programming, the Deputy Administrator serves as the approver for this action in place of the Assistant Administrator for the Middle East Region.

_____________________________________ 3/27/2024 Isobel Coleman Deputy Administrator for Policy and Programming