Attachment_3_Notes_for_Hanoi_pre-proposal_conference_27Mar18.pdf

Pre-proposal Conference in Hanoi for RFP 72044018R00004

Notes LinkSME Pre-Proposal Conference in Hanoi

March 27, 2018

Michael Capobianco (Capo), Contracting Officer: Introduction

Craig Hart, Deputy Mission Director: Welcoming Remarks

History of USAID/Vietnam: We have a $95 million annual budget. The portfolio includes dioxin, higher education, trade and growth, and health. We are interested in being able to engage the GVN and international private sector to ensure that we are aligned and achieving common goals. In Vietnam the private sector presence is very strong and keeps increasing annually.

Engaging the private sector with USAID activities to work on shared values makes sense. If you Google USAID/Vietnam partnerships, you can see where we have identified business opportunities to where we can promote greater private sector engagement.

Consider the example of PEPFAR and private sector engagement. During the initial phases of PEPFAR when condoms were freely available on the market, this had negative consequences on Vietnamese condom producers and sellers. Recently, under the Healthy Markets activity, USAID decided to work with private sector to provide market data about condoms and helped the private sector enter the market as we exited.

Capo: General Information/Overview of RFP

A mix of both private sector, beneficiaries.

Agenda and other information/ a chance for private sector to mingle and network.

Why are we here?

This is not a normal USAID program. It is not a normal CPFF award, it is a CPAF. The RFP has been structured to have a shared sense of ownership to how offerors would implement this program. This is why we are looking at you to do your analyses in your proposals. We want to ensure you have as much information to know exactly what we are looking for.

Networking - opportunities to network early. This is a forum to facilitate that.

Slides and Q&A of today’s conference will be uploaded on the FedBizOpps.gov (FBO) website.

Official procurement point of contacts -- Capo and Van

Overview of solicitation We are trying to do something a little bit better to incentivize better performance of contract.

Long response period: Normally USAID asks that proposals be submitted in 30-45 days.

Here we have asked for 90+, close to 100 days. We want “co creation” in this RFP. We want the offerors to do the analyses and to tell us which sectors we should work on based on these analyses. This is why we are providing such a long response period for this RFP.

Michael Trueblood, Economic Growth and Governance Office Director: Technical Information

SLIDE 1 - LINKSME PURPOSE

“Significant increases in the quantity and/or quality of business linkages between Vietnamese SME-firms and global value chains”

Notes:

● This is NOT a traditional SME strengthening activity.

o We will not expect to provide trainings to SMEs and offer them business development services.

o Nor strictly working on SME policy, under the assumption that barriers to business expansion are solely a policy problem.

o Our assumption is that there are a myriad of reasons why local supply chains haven’t developed in Vietnam as they have in other rapidly developing countries.

● This is meant to be transaction led:

o Working with SMEs and FIEs to discover how linkages can occur o We want know what the barriers are?

o What can we as USAID do to facilitate greater integration of VN SMEs and

GVC - both international and regional?

● Despite the massive amounts of FIEs in Vietnam, there are few examples of

SMEs and FIEs working together.

o Currently, only 21 percent of Vietnamese SMEs are a part of global value chains

● Do FIEs in Vietnam want to source locally if they could?

o We went out during the design phase and asked that question and found a resounding YES! They mentioned “speed to market” pressures are huge.

Sourcing locally would help a lot with time and costs.

o For local SMEs, they want growth opportunities, market access, and value addition

● What else did we find in our discussions? The common thread companies wishing to source locally:

o Quality o Quantity o Timeliness o Trust

● This is where we want to focus – we want the contractor to help overcome these challenges and facilitate these transactions.

o Once an SME has a successful transaction, we believe, a virtuous circle develops and that SME will start to gain the resources needed to improve the business and invest more in it.

SLIDE 2 - CONTRACT OBJECTIVES

“- Strengthen the SME-GVC Business Linkage Framework

- Enhance Vietnamese SMEs’ capacity to supply GVC firms in 5 sectors”

● Simple, right?

● We want to emphasize again: This is NOT a status quo SME strengthening activity.

o We expect that there will be significant partnerships developed, in which both SMEs and FIEs gain experience and leverage “know how” as well as financial resources.

o There are many FIEs already working on expanding their local suppliers -we expect the contractor will partner with at least some of them.

● We are requiring that the offerors provide USAID with sector analysis for seven sectors.

o Not only should this detail challenges and opportunities within a sector, but also potential partnerships with FIEs, associations, etc.

SLIDE 3 - TECHNICAL APPROACH

“- Phase 1: Facilitate 10 transactions (linking SMEs to GVCs) in 2 sectors. Gather evidence.

- Phase 2: Replicate and scale transactions in 5 total sectors. Gather evidence.

- Phase 3: Institutionalize key reforms – transforming the enabling environment.”

● First, what do we mean by the three phases and transactions?

o Phase 1 - 18 months, Phase 2 - 24 months; Phase 3 - 18 months o Transactions are completed contracts between SMEs and GVCs

● We are looking to achieve systemic changes o There needs to be a lot of evidence about what works and why.

o We anticipate that there will be some things that apply to particular sectors or particular provinces, and not countrywide, and vice versa.

● Over the life of the contract, the contractor must identify five sectors and really drill down deeply within each of those sectors to identify how to facilitate linkages.

o Our contractor will become an expert in these sectors and will proactively develop suppliers and buyers.

● In the last 18 months of the contract, the contractor will take a step back and look at the SME sectors on a macro scale:

o What are the impediments and how can USAID contribute to improving the enabling environment?

● The contractor must work to establish an SME advisory group. We anticipate that this would include a diverse group of influential stakeholders who can provide strategic advice during the duration of the contract.

Questions and Answers:

Q1: When must the SME working group begin, after three months or after Phase 1?

A1 USAID Answer: Per Section F.6.b of the RFP, the Advisory Committee must commence within 90 days from the effective date of the contract, and meets at least three times annually.

Q2: Clarification on transactions - When we are talking about the 10 contracts, do we mean 10 signed contracts or 10 fully completed/fulfilled contract?

A2 USAID Answer: A contract is fully completed when goods/services are delivered and payments are made. Please see Section C of the RFP.

Q3: Technical approach - Why can’t we start working on institutionalized key reforms or Phase 3 activities during Phase 1 and Phase 2, instead of waiting until Phase 3? Can we propose such activities in Phases 1 and 2?

A3 USAID Answer: In the first two Phases we really want to emphasize gathering information. If there is any ideas that you think could be addressed early on, we can discuss during the annual work planning process and there is possibly a way to work on that.

Q4: Sector analysis question - What are differences between the sector analysis, 7 sectors, which is required as part of the proposal, and each sector analysis plan, 5 sectors, in Phase 1 (2 sectors) and Phase 3 (3 sectors).

Answer at the conference (A): What we are looking for is your best analysis for initial phase, proposal phase. We hope that you will learn during the first phase for the piloted section of a couple of sectors in the Phase 1 and be able to come up with more detailed proposal for scaling up phase. Initially you will be giving us analysis of 7 sectors. Then we will take those seven, make an award, in September 2018, utilizing that as one of the principal evaluation factors.

Then we are going to narrow down from 7 to 5 sectors. We do not decide which sectors we are going into until Phase 2. We want you to have the ability to go through Phase 1, take lessons learned and analyze which of the sectors we want to go into collaboratively.

A4 USAID Answer: The Sector Plans, to be submitted in as part of the Phase 2 Plan, are meant to build off the analyses developed during the proposal period, per Section F of the RFP. We are not going to determine now what sectors we’ll be working in during Phase 2, so we want you to be able to refine the analyses based on learning from phase 1.

Q5: Please clarify what you mean by sector -- do you mean top level sectors (like agriculture), or very specific sectors (e.g., like wheat or rice processing)?

A: We want to open minded. Offerors have the ability to decide within a range of “digits” based on the Harmonized Trade Code (HTC), whether the 2 digit level is sufficient or it needs to be done at the 3, 4, or 5 level. There is flexibility here. Let’s say agriculture is at the 2 digit level, wheat is at the 4 digit level, and processed cereal may be at the 6 digit level. I think it needs to be at least 3 to 4 digit level. If you have good proposal down to the 6 digit level, we can consider that. Ultimately, we want the offerors to give compelling reasons why you chose specific sectors/ sub-sectors, why you think they are important, why those are sectors where you can make a difference, and where you could make the greatest linkages. Though it is good to refer to the HTC as a guiding principle, we are really interested in seeing how offerors uncover the business opportunity in relationship to the development challenge.

A5 USAID Answer: Offerors have the ability to decide how a sector is defined.

We want the offerors to give compelling reasons why they chose the sectors including where they can have the greatest impact.

Q6: Is it possible for us to change the sector after Phase 1 if from experience and learning we find the sectors chosen are not the best?

A: From contractual standpoint, the answer is yes, if it makes sense. However, it will need to be justified why the shift is requested. If the shift is the result of learning during the Phase 1, it can be an easy case to make, since it is part of what we are trying to accomplish in the award. But if it is because the contractor has a new idea then the new idea needs to be supported by substantive analyses. Again, this activity is designed to be a learning and adapting activity at its core. We’re staring at a certain point, as this thing gets moving, it will take on a certain momentum of its own based on learning and adapting.

A6 USAID Answer: Yes, if properly justified.

Q7: We are a communications agency in Vietnam and we have links with many SMEs and can facilitate 10 transactions. We see 10 transactions requirements and can facilitate. Can we join as a broker? Or are we eligible to participate?

A: Contractually, in terms of eligibility, if you meet all the eligibility criteria in section L of the RFP you would be able to participate. Technically, we need to consider whether the prime awardee can facilitate transactions between its company itself and SMEs and count them as a part of 10 transactions.

A7 USAID Answer: If you meet eligibility criteria then you could compete. However no, the prime contractor cannot do what’s mentioned in the question. Please see Section C of the RFP.

Q8 - Key personnel: do you have a particular skills set with regards to the systems approach from our key personnel?

A: No. We are not looking at one particular systems approach.

A8 USAID Answer: We have amended the RFP.

Q9: When you talk about 10 transactions in phase 1, what is per transaction value? In phase 2, do we mean both scaling the number and the value of transactions?

A: We don’t have in mind any numerical value for a transaction. However, we are looking for something that is serious and grows in sophistication over time. Maybe bigger quantity, more value added, more sophisticated processing. Something simple but will grow and become more sophisticated. When we talk about transactions we mean both quantity and value, ideally. We are looking for transaction that have both business and developmental impacts.

A9 USAID Answer: There is no numerical value. We want to scale up in numbers and sophistication in Phase 2.

Q10: In terms of timeline and phases, how should we count for the Government’s project approval?

A: When we designed the program, we considered the Government’s priority. We had high level meetings with the Government we’ve started discussions with several ministries and they assured us that they totally endorse the project and they all think it is critical for Vietnam for the long-term development. We are continuing the dialogue. So we think this project can start quickly, reinforce Government’s engagement. We expect that right after the award, contractor will be very proactive in seeking project approval.

We will provide necessary support for this process. However, during Phase 1 of the contract, the contractor must conduct analyses to inform the Phase 2 Plan. Many of these may be done pending GVN approval.

A10 USAID Answer: Contractor must work fervently in getting project approval, expected in the initial six months. Many activities in Phase 1 don’t require approval.

Q11: Is there any geographical focus and if so what and if not how do offerors weight where it work?

A: There is no specific geographic focus. We are looking at you to come up with compelling reasons why we should invest our resources in particular geography. If you look at the development need, it is fine. But this project is trade and investment project so at the end we’re looking at systemic changes within the SME sector and really linking that to international value chain.

A11 USAID Answer: No geographic focus; it is up to offerors to propose.

Tea-break

Capo: Award Fee Information

The award fee is to incentivize better performance. Usually we use CPFF. The fee is fixed, not changed. CPAF contract is a less risky contract type for the USG. We share some of the risk with the contractor. The award fee is a pool you propose. Award fee is when the success is inherently subjective evaluation, even though we’ll try to be objective.

This [award fee] is not objective. However, it is not meant to be arbitrary or capricious.

Any decision has to be justified by the facts. The FDO must justify why s/he is making the decisions.

There is no statutory limit on fees under award fee type contracts, unlike under CPFF’s which limits fees to no more than 10 percent. Thus, you have the opportunity to make more money if you do a better job.

Award Fee type contracts are highly regulated. Eight to ten years ago, The Department of Defense was using these and paying out full award fees. After a GAO audit, there are defined adjective definitions and the percentages that go along with the award fee criteria. For example a satisfactory rating, you can get no more than 50% of the award fee. It’s meant to incentivize to get to “better.”

From our standpoint, we want better, more than satisfactory. The fee you’d get under a CPFF, we would rate that as satisfactory under this.

Q & A

Q12- In terms of budget preparation - can we move contractual to one separate line item, instead of leaving it under ODC?

A: No, by using a standard template, it allows us to make analysis easier and quicker and to compare offerors against one another in a more efficient manner.

A12 USAID Answer: No.

Capo: RFP information/Proposal Preparation

Sections D, E, G, H, I, J and K are all standard USAID language.

We have questions on compensation rate. It is not a conflict, it is an additional requirement for USAID. It does not mean you cannot get more than a 3 percent increase, but you need approval. Nothing in the regulations preclude you from giving a bonus.

Other questions on the consultants: they are either employees or subcontractors.

Section F is where the key personnel is. Not minimum requirements, just skills set - we leave it up to you to let us know who is best for skills set.

PLEASE FOLLOW STRICTLY ALL THE INSTRUCTIONS AND SUBMIT ALL THE

REQUIRED INFORMATION.

Section L:

Technical proposal CV key personnel or reference not excluded from 50 pages

Technical proposal does not refer the cost proposal and vice versa.

There is no page limit for budget narrative.

Cost to be broken down by phases, tight to the program.

Don’t lock the excel file.

Past performance is now under cost proposal.

Don’t submit zipped file.

Q & A:

Q13: In terms of requirement to breakdown costs by management, by phases and cost narrative, and something else?

A: It is how cost is tied to the achievement of objectives or how it is tied to particular phase. The information is in Section L.7 of the RFP. You have the estimated costs, the assumption you identified in those costs, the explanation of the linkage between technical components and the costs. It will help us with the cost realism.

A13 USAID Answer: Please refer to Section L.7 in the RFP.

Section M TEC evaluate the technical proposal A&A office makes price analysis and cost realism and past performance analysis Discussion, negotiation Award decision

Cost evaluation: cost realism, then adjusted if needed, to come up with probable cost.

For example: we take the cost then we adjust upward or downward to what we believe is correct.

Past performance evaluation: we pull information that we think relevant and we evaluate as satisfactory, neutral satisfactory and unsatisfactory.

We prefer award without discussions. If we have to have it, we’ll establish competitive range, we enter discussion with you and we ask for revised proposals and we go through the whole process again.

Q&A

Q14: When transcripts are posted on FBO?

A: About one week. After HCMC conference we will combine and post and we may have amendment(s) to the RFP based on questions you have asked.