Regional_Integrated_Trade_and_Border_Management_Sol_72051918R00002.pdf

Request for Proposals (RFP)

No. SOL 72051918R00002

Central America Regional Trade Facilitation and Border Management

Issue date: November 14, 2017

Questions on RFP due: November 27, 2017

Response to questions planned: December 4, 2017 Closing date and time for receipt of proposals: January 19, 2018, 12pm (El Sal time)

USAID/El Salvador is seeking proposals from qualified organizations interested in providing the services described in Section C of this RFP. A Cost Plus Fixed Fee Completion– (CPFF) Contract is contemplated. The total cost for this Contract is estimated between $15,000,000 and

$20,000,000 over a 5-year period. The purpose of providing an estimated range for the contract is to aid offerors in development of their proposals. Offerors will provide the lowest possible cost corresponding with their technical approach.

To that end, USAID/El Salvador issues this RFP consisting of the following sections:

Cover Letter SF 33 – Solicitation, Offer and Award Form

Section B – Supplies or Services and Prices/Costs Section C – Description/Specs/Statement of Work Section D – Packaging and Marking

Section E – Inspection and Acceptance Section F – Deliveries or Performance

Section G – Contract Administration Data Section H – Special Contract Requirements Section I – Contract Clauses

Section J – List of Documents and Other Attachments Section K – Representations, Certifications and Other Statements of Offerors

Section L – Instructions, Conditions and Notices to Offerors Section M – Evaluation Factors for Award

Proposals must be received no later than 12:00 pm El Salvador time on the closing date indicated above and must be submitted with the name and address of the offeror and RFP number inscribed thereon. Questions concerning this RFP should be submitted via e-mail by the date and time specified above to Marielos Arce, Acquisition Specialist, e-mail mquinonez@usaid.gov.

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7. ISSUED BY CODE

NOTE: In sealed bid solicitations "offer" and "offeror" mean "bid" and "bidder".

SOLICITATION

9 . Sealed of f ers in original and (See Section L) copies f or f urnishings the supplies or serv ices in the Schedule will be receiv ed at the place specif ied in item 8, or if hand carried, in the depository located in (See Section L) until local time

(Hour) (Date)

CAUTION - LATE Submissions, Modif ications, and Withdrawals: See Section L, Prov ision No. 52.214-7 or 52.215-1. All of f ers are subject to all terms and conditions contained in this solicitation.

11. TABLE OF CONTENTS

(X) SEC. DESCRIPTION PAGE(S) (X) SEC. DESCRIPTION PAGE(S)

PART I - THE SCHEDULE PART II - CONTRACT CLAUSES

A SOLICITATION/CONTRACT FORM 1 I CONTRACT CLAUSES 87

B SUPPLIES OR SERVICES AND PRICES/COSTS 2 PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.

C DESC RI P TI ON / S P E C S. / W O R K STATE M E N T 6 J LIST OF ATTACHMENTS 116

D PACKAGING AND MARKING 24 PART IV - REPRESENTATIONS AND INSTRUCTIONS

E INSPECTION AND ACCEPTANCE 26

K

REPRESENTATIONS, CERTIFICATIONS AND OTHER

STATEMENTS OF OFFERORS

F DELIVERIES OR PERFORMANCE 27

G CONTRACT ADMINISTRATION DATA 43 L INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS 132

H SPECIAL CONTRACT REQUIREMENTS 48 M EVALUATION FACTORS FOR AWARD 156

OFFER (M ust be fully completed by offeror)

NOTE: Item 12 does not apply if the solicitation includes the prov isions at 52.214-16, Minimum Bid Acceptance Period.

12. In compliance with the abov e, the undersigned agrees, if this of fer is accepted within calendar day s (60 calendar days unless a different period is inserted by the offeror) f rom the date f or receipt of of fers specified abov e, to f urnish any or all items upon which prices are of f ered at the set opposite each item, deliv ered at the designated point(s), within the time specif ied in the schedule.

13. DISCOUNT FOR PROMPT PAYMENT

(See Section I, Clause No. 52.232-8)

10 CALENDAR DAYS (%) 20 CALENDAR DAYS (%) 30 CALENDAR DAYS (%) CALENDAR DAYS(%)

14. ACKNOWLEDGMENT OF AMENDMENTS

(The offeror acknowledges receipt of amendments to the SOLICITATION for offerors and related documents numbered and dated):

AMENDMENT NO. DATE AMENDMENT NO. DATE

15A. NAME AND

ADDRESS

OF OFFER-

OR

CODE FACILITY 16. NAME AND THE TITLE OF PERSON AUTHORIZED TO SIGN OFFER

(Type or print)

15B. TELEPHONE NUMBER

15C. CHECK IF REMITTANCE ADDRESS IS

DIFFERENT FROM ABOVE - ENTER SUCH

ADDRESS IN SCHEDULE.

17. SIGNATURE 18. OFFER DATE

AREA CODE NUMBER EXTENSION

AWARD (To be completed by Government)

19. ACCEPTED AS TO ITEMS NUMBERED 20. AMOUNT 21. ACCOUNTING AND APPROPRIATION

22. AUTHORITY FOR USING OTHER THAN FULL OPEN COMPETITION:

10 U.S.C. 2304 (c) 41 U.S.C. 3304(a) ( )

23. SUBMIT INVOICES TO ADDRESS SHOWN IN

(4 copies unless otherwise specified)

ITEM

24. ADMINISTERED BY (If other than Item 7) 25. PAYMENT WILL BE MADE BY CODE

26. NAME OF CONTRACTING OFFICER (Type or print) 27. UNITED STATES OF AMERICA

(Signature of Contracting Officer)

28. AWARD DATE

IMPORTANT - Award will be made on this Form, or on Standard Form 26, or by other authorized of f icial written notice.

AUTHORIZED FOR LOCAL REPRODUCTION

Prev ious edition is unusable

STANDARD FORM 33 (REV. 6/2014)

Prescribed by GSA - FAR (48 CFR) 53.214 (c)

USAID/El Salvador

Regional Office of Acquisition and Assistance

SOLICITATION, OFFER AND AWARD 1. THIS CONTRACT IS A RATED ORDER

UNDER DPAS (15 CFR 700)

RATING PAGE OF PAGES

1 161

2. CONTRACT NUMBER 3. SOLICITATION NUMBER

SOL 72051918R00002

4. TYPE OF SOLICITATION

SEALED BID (IFB)

NEGOTIATED (RFP)

5. DATE ISSUED

11/14/2017

6. REQUISITION/PURCHASE NUMBER

8. ADDRESS OFFER TO (If other than item 7)

10. FOR

INFORMATION

CALL:

A. NAME

Marielos Arce

B. TELEPHONE (NO COLLECT CALLS) C. E-MAIL ADDRESS

mquinonez@usaid.gov

AREA CODE

NUMBER

25013326

EXTENSION

mailto:mquinonez@usaid.gov

SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS

B.1 PURPOSE

The purpose of this contract is the implementation of the Central America Regional Trade Facilitation and Border Management Activity which will contribute to the Central American countries’ broad-based economic growth by enhancing regional integration and improving trade facilitation.

B.2 CONTRACT TYPE

This is a Cost Plus Fixed Fee (CPFF) completion type contract.

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

(a) The estimated cost for the performance of the work required hereunder, exclusive of fixed fee, if any, is __________. The fixed fee, if any, is ________. The estimated cost plus fixed fee, if any, is __________.

(b) Within the estimated cost plus fixed fee (if any) specified in paragraph (a) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the Contractor (and payment of fee, if any) for performance hereunder is __________. The

Contractor shall not exceed the aforesaid obligated amount unless authorized by the Contracting Officer pursuant to the clause of this contract entitled “Limitation of Funds” (FAR 52.232-22).

(c) Funds obligated hereunder are anticipated to be sufficient through ____________.

B.4 CONTRACT BUDGET

The following budget table captures the final negotiated cost elements for performance of the required work hereunder:

Labor $ _____________

Fringe Benefits $ _____________ Allowances $______________ Travel, Transportation & Per diem $______________

Other Direct Costs* $ _____________ Indirect Costs $______________

Fixed Fee $______________

TOTAL ESTIMATED COSTS PLUS FIXED FEE $______________

* To include communications, facilities costs, security, participant training and equipment/supplies.

The Contractor will not be paid any sum in excess of the total estimated cost.

B.5 INDIRECT COSTS

For the Prime Contractor:

Pending establishment of revised provisional or final indirect cost rates, allowable indirect costs shall be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases:

Description Rate Base Type Period

TBD 1/ 1/ 1/

1/Base of Application:

Type of Rate: Predetermined Period:

For Major Subcontractor(s):

Pending establishment of revised provisional or final indirect cost rates, allowable indirect costs shall be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases:

“Major Subcontractors” are those subcontractors whose proposed cost exceeds 20% of the total contract value..

B.6 CEILING ON INDIRECT COSTS

(1) Reimbursement for allowable indirect costs shall be at final negotiated rates but not in excess of the following ceiling rates:

TBD TBD 1/ 1/ 1/

The Government will not be obligated to pay any additional amount should the final indirect costs rates exceed the negotiated ceiling rates. If the final indirect cost rates are less than the negotiated ceiling rates, the negotiated rates will be reduced to conform to the lower rates.

This understanding shall not change any monetary ceiling, cost limitation, or obligation established in the contract. Any changes in classifying or allocating indirect costs require prior written approval by the Contracting Officer.

(2) For Major Subcontractor(s):

Reimbursement for allowable indirect costs shall be at final negotiated rates but not in excess of the following ceiling rates:

The Government will not be obligated to pay any additional amount should the final indirect costs rates exceed the negotiated ceiling rates. If the final indirect cost rates are less than the negotiated ceiling rates, the negotiated rates will be reduced to conform to the lower rates.

This understanding shall not change any monetary ceiling, cost limitation, or obligation established in the contract. Any changes in classifying or allocating indirect costs require prior written approval by the Contracting Officer.

B.7 COST REIMBURSABLE

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

B.8 PAYMENT OF FIXED FEE

Within 60 days (or earlier, but prior to the payment of any fixed fee), the Contractor must submit a Fixed Fee Payment schedule subject to FAR 52.216-8. Fixed fee shall be allocated based on concrete measurable progress towards the targets set forth in the approved Annual Work Plan and associated Performance Monitoring Plan. Payment of fixed fee, subject to FAR 52.216-8 may then be made upon receipt of proper invoice.

B.9 MULTI-YEAR CONTRACT

All contract cost line items under this award are considered non-severable ab constitute a multi-year contract as defined in FAR 17.103. Therefore, this contract si subject ot the requirements of

FAR 17.106. In the event that the Government cancels requirements for services in subsequent program years under this contract, the following conditions will apply:

Cancellation Dates:

Contract Year 2: DATE TBD, 2019 Contract Year 3: DATE TBD, 2020 Contract Year 4: DATE TBD, 2021

Contract Year 5: DATE TBD, 2022

Cancellation Ceiling:

This is a cost plus fixed fee contract where the contractor is authorized to be reimbursed for all costs which are allowable in accordance with FAR 52.216-7 “Allowable Cost and Payment” (June 2013). Therefore, the contractor will not incur any costs which would have been amortized over the life of the contract should the contract be cancelled in accordance with FAR 52.217-2 “Cancellation under Multiyear Contracts (October 1997). Therefore, the cancellation ceiling for each cancellation date is _____.

[END OF SECTION B]

SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C.1 OVERVIEW OF THE ACTIVITY

This Statement of Work (SOW) is designed to implement the five-year Central America Regional Trade Facilitation and Border Management Activity (the “Activity”).

The Activity will continue to strengthen trade capacity and regional trade competitiveness in Central America. Support will be provided through key national and regional institutions, such as

Customs and Ministries in each country, and the Central American Secretariat for Economic Integration (SIECA) to respond to the new global competition challenges and reduce the time and cost of trading across borders.

The Activity will also support the implementation of key elements under the World Trade

Organization (WTO) Trade Facilitation Agreement and the Central American Trade Facilitation and Competitiveness Strategy at regional and national levels, with emphasis in the current regional Customs Union1 being implemented by Honduras and Guatemala2, and soon to be joined by El Salvador3 and Nicaragua4.

The Activity is expected to work in the Central American countries, with emphasis in, but not limited to the Northern Triangle (NT) countries. Other countries may participate in this Activity to enhance the regional economic integration process and the effectiveness of the U.S. Strategy for Engagement with Central America (CEN Strategy).

The goal of the Activity is to contribute to the Central American countries’ broad-based economic growth by enhancing regional integration and improving trade facilitation. The purpose of the Activity´s components is to improve regional trade efficiency in Central America at primary ports of entry and key economic corridors, with emphasis in the NT countries, reducing time and cost of trading across borders by providing public and private sector institutions with the required capacity to achieve greater trade competitiveness in the region.

The Development Hypothesis for this Activity is that if the Central American countries’ economic integration is enhanced and a comprehensive implementation of the World Trade Organization (WTO) Trade Facilitation Agreement is supported, then the time and cost of trading across borders in the region will be reduced, thereby making Central America more competitive, enhancing its economic growth and the region’s ability to create jobs.

The Activity will build upon work done by the Regional Trade and Market Alliances Project

1 As defined in: https://www.wto.org/english/thewto_e/glossary_e/customs_union_e.htm and https://stats.oecd.org/glossary/detail.asp?ID=3130 2 Protocolo Habilitante para el Proceso de Integración Profunda hacia el Libre Tránsito de Mercancías y de Personas Naturales entre las Repúblicas de Guatemala y Honduras. Panama, April 10 2015 http://www.mineco.gob.gt/paginaUA/documents/protocolo-habilitante.pdf El Salvador has expressed its political commitment to join the Customs Union by December 2017.

http://www.laprensa.com.ni/2017/07/31/economia/2272295-union-aduanera-presiona https://www.wto.org/english/thewto_e/glossary_e/customs_union_e.htm https://stats.oecd.org/glossary/detail.asp?ID=3130 http://www.mineco.gob.gt/paginaUA/documents/protocolo-habilitante.pdf

(RTMA), the Regional Trade Facilitation Expansion (RTFE) and the Regional Agribusiness

Trade Logistics Project (CA-TL) developed together with the International Finance Corporation

(IFC).

Through RTMA and RTFE, USAID built capacity of regional institutions like the Secretariat of Economic Integration for Central America (SIECA) to serve its members as a technical resource, information hub, and to more effectively lead the Central American integration process.

Activities included support to implement short-term trade facilitation measures to support regional economic integration, including the installation of Radio Frequency Identification

Devices (RFID) at two major border crossings to help streamline control procedures, promote measures like signage to streamline border crossings, strengthened the capacity of the private sector for policy dialogue, and implemented a regional cross-border trade monitoring system.

Through the CA-TL, an automated system to facilitate the mutual recognition of sanitary registrations for Central American food and beverages was developed, as well as modernizing and improving the national registration processes. This Activity has contributed to streamline and harmonize the registration for processed food manufactured in Costa Rica, El Salvador, Guatemala and Honduras.

The implementation of the new Activity will be coordinated with other U.S. Agencies such as:

the Bureau of International Narcotics and Law Enforcement Affairs (INL), U.S. Customs and

Border Protection (CBP) and the Millennium Challenge Corporation (MCC), as well as with other international donors such as the Inter-American Development Bank (IDB), the European Union (EU), International Monetary Fund (IMF), among others, which have similar trade facilitation objectives.

C.2 BACKGROUND

The Activity will contribute to USAID’s Regional Development Cooperation Strategy (RDCS)

Regional Development Objective (DO)1: Regional Economic Integration Increased, particularly to the Intermediate Result (IR) 1.1 “Regional Trade Expanded”, and IR 1.2, "Regional Markets and Investment in Key Sectors Increased," as it will strengthen trade capacity and regional trade competitiveness by reducing time and cost of trading across borders. Strong, stable economies in the region are in the direct interest of the U.S. to stem the flow of mass out-migration from

Central American countries. The region needs to focus on enhancing the business enabling environment to facilitate trade, as trade and investment are key elements of stable economies.

This Activity will respond to key trade integration challenges by supporting regional economic integration and the region’s Customs Union, expanding regional and international trade, improving border management, and increasing institutional trade capacity.

The Activity complements and aligns with the U.S. Strategy for Engagement in Central America (CEN Strategy) and will directly support the "Prosperity and Regional Integration" line of action by supporting key elements such as promoting trade facilitation under existing free trade agreements and promoting transport and customs/border integration.

The Activity also aligns with the Plan of the Alliance for Prosperity of the NT Countries of

Central America (A4P), and will directly contribute to several implementation actions of this initiative, including but not limited to: Promoting strategic sectors and attracting investment;

modernizing and expanding infrastructure and logistics corridors; coordinating border management; and encouraging international trade, among others5. The Activity will additionally align its interventions to the SIECA’s Regional Trade Facilitation and Competitiveness Strategy, and will strongly support the newly formed Customs Union.

The NT, specifically, continues to be a priority region for the U.S. Government. During the

Miami Conference on Prosperity and Security in Central America held in June 2017, specific policies to promote investment in the region, facilitate sustainable growth, and improve conditions for U.S. and other companies were discussed. A key deliverable of this meeting was the reaffirmation from the United States, Mexican, and NT governments on the importance of trade between the countries and identified obstacles preventing the facilitation of trade and the ease of doing business. NT governments committed to further develop the roadmap to enhance economic integration and streamline import and export systems and procedures employed by government agencies. They also agreed to continue to work on improving the flow of commercial traffic at border crossings to strengthen customs and other trade-related procedures, reducing the time and cost of trade, and boosting overall economic competitiveness of the NT countries6.

C.3 DEVELOPMENT CHALLENGE

The Central American region has demonstrated its commitment to consolidate its regional integration efforts by developing a series of technical regulations, and by signing and implementing regional agreements such as the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) signed in 2005, the EU-Central America Association Agreement signed in 2012, and more recently the regional Customs Union between Honduras and Guatemala launched in June 2017. While very strong political commitment exists in Central American governments to harmonize trade and standards to implement various regional and international trade agreements, such commitment is not fully operational at the working levels of government.

After the signing of CAFTA-DR, regional exports to the U.S. increased and intra-regional trade expanded. Today, most trade takes place between the Central American countries: nearly 40 percent of all trade is intra-regional, and continues to grow an 11 percent annual average. Despite these gains and advancements, Central America remains the least developed sub-region in the hemisphere. The region could be more prosperous, but trade across borders is inefficient, resulting in an important obstacle for regional companies to grow, attract more investment and create more jobs. Trade flows are plagued by poor and slow information exchange, incipient coordination among border control agencies (e.g., Customs, Immigration, Agriculture, Police, Health); weak border control operations; illicit trade in drugs and other contraband; limited

Plan of the Alliance for Prosperity in the Northern Triangle: A Road Map.

https://cuellar.house.gov/uploadedfiles/plan_of_the_alliance_for_prosperity_in_the_northern_triangle-__a_road_ma....pdf U.S. Department of State, Fact Sheet June 16, 2017. United States Key Deliverables for the June 15-16, 2017 Conference on

Prosperity and Security in Central America. https://www.state.gov/r/pa/prs/ps/2017/06/271984.htm https://cuellar.house.gov/uploadedfiles/plan_of_the_alliance_for_prosperity_in_the_northern_triangle-__a_road_ma....pdf https://www.state.gov/r/pa/prs/ps/2017/06/271984.htm standardization of regional/national border management regulations; limited technology and border infrastructure to accommodate the needs of increasing trade flows; limited timely exchange of information among trade and border control agencies, and obsolete sanitary registration regulations and procedures. Given its proximity to the U.S. and trade relation with Central America, these problems that characterize this regional trade, directly affect U.S.

interests.

The cost and time to trade goods regionally and intra-regionally in Central America are among the highest in the world. From 2014 to 2016, crossing times at land borders have registered between 8-24 hours for exported goods and up to 76 hours for imported goods. Transit costs in the region are between $0.13 - $0.21 per metric ton/km, which is double the cost when compared to other intra-region costs in Europe, the U.S. and Asia7. Additionally, customs procedures in Central America represent between 30-50 percent of the total cost of exports. This higher cost significantly undermines regional competitiveness and hinders the Central American countries’ ability to compete in the global market, and to create jobs. Customs authorities struggle to make uniform and consistent decisions at the border without prior consultation or sensitization among other stakeholders; creating high levels of arbitrary actions that have a negative impact on trade facilitation.

Improvements towards an all-digital, paperless trade environment, continues to be a priority. The continued need for paper documentation results in heavy traffic and slows movement at the border. In most cases, border control agencies ask for physical copies or originals of the same documentation. Though the Customs administrations have the ability to receive information electronically, a disconnection still exists and too often, physical copies are required upon arrival at the border; increasing times and costs for trading.

Trade facilitation obstacles aggravate the lack of economic opportunities and insecurity in the region, which has triggered significant migration, primarily to the U.S. Individually, the NT countries suffer from low economic growth; poverty reduction is not in pace with the rest of

Latin America; and Small and Medium Enterprises (SMEs) as well as citizens have limited access to opportunities.

Actions to help increase trade and the economic integration in the region are necessary to improve business dynamics and stimulate job creation. Such actions require an initiative to work with all trade stakeholders to develop a more collaborative relationship, both between government agencies and public and private sector, through which all trade stakeholders, public and private, can collaborate to resolve these salient issues and implement initiatives that favor trade efficiency.

Furthermore, the NT countries and Nicaragua are advancing towards their Customs Unions, which will strengthen Central American economic integration. This key effort initiated by Honduras and Guatemala, will be joined by El Salvador and Nicaragua. The consolidation and sustainability of the Customs Union requires additional support. Trade related institutions need to be strengthened on this matter and new customs procedures and documentation needs to be

Evaluación de los efectos de la aplicación de un Programa Centroamericano de Facilitación del Comercio; José Durán Lima, Oficial de Asuntos Económicos, Jefe de la Unidad de Integración Regional División de Comercio Internacional e Integración /

CEPAL, Naciones Unidas, 23 de Octubre de 2015.

developed and implemented for the success of this initiative.

To enhance economic opportunities for NT countries and to strengthen the regional economic integration process, it is important that Nicaragua participates in the Customs Union. Information from the Nicaraguan Central Bank shows that exports from Nicaragua to the NT countries totaled $410.5 million dollars, and imports from those countries reached $930 million.

Additionally, the Observatory of Economic Complexity (OEC)8 valued trade between the NT countries, Panama and Costa Rica at $3 billion, most of which passes through Nicaragua.

Context in NT Countries and Nicaragua

According to the 2016 Enabling Trade Index (ETI) of the World Economic Forum (WEF), which assesses the extent to which economies have in place institutions, policies, infrastructures, and services facilitating the free flow of goods across borders, the Central American countries perform in the middle tier compared to similar sized economies. The index looks at market access, border administration, infrastructure, and operating environment for enabling trade. In the overall ranking, Guatemala is ranked 69th out of 136, El Salvador is ranked at 74th, Honduras is ranked 86th and Nicaragua is ranked at 76th. While other trade-friendly Latin

American economies such as Costa Rica, Panama, and Uruguay perform better than these countries (57th, 58th, and 66th, respectively), the NT countries score well in some areas, but are not far behind.

In terms of market access, Guatemala scores quite high in the WEF’s ETI (14th out of 136), but is hamstrung by poor infrastructure (97th) particularly in quality of transport infrastructure.

Similarly, El Salvador does quite well in terms of market access (6th in the world), but ranks poorly in terms of the operating environment (126th), which encompasses physical security.

Honduras and Nicaragua lag behind its comparable countries, with a score in market access (10th-Honduras and 13th-Nicaragua). Honduras struggles in terms of border administration

(109th), where it is particularly deficient in the efficiency and transparency of border administration, and Nicaragua fails in the availability and quality of transport services (117th).

The paradox of having strong market access while lagging behind in terms of infrastructure and administration underscores the challenges that the region faces in terms of trade facilitation.

In terms of economic growth, the economies of the three NT countries have struggled to build a middle class and provide employment in the formal sector. While official unemployment rates are low, the average rate of informality (percentage of non-agricultural informal employment) in these countries is over 70 percent. The NT countries are reliant on low value-added segments of the agriculture and textiles industries, despite recent efforts to modernize their economies.

Although the countries experience consistent GDP growth, there are not enough educational opportunities, training, and formal jobs created to meet workforce demand, which leads many to seek opportunities elsewhere.

El Salvador presents growth rates of about 2 percent versus 4.5 percent GDP growth for the region overall, along with low investment, high outward migration, weak competitiveness and

Data Visualization Tool, MIT Media Lab http://www.bcn.gob.ni/estadisticas/sector_externo/comercio_exterior/importaciones/6-14.htm political gridlock. Given the fiscal deficit and heavy burden of public debt, which is expected to increase to 70 percent of GDP by 20219, the government faces constraints to greater investment in strengthening public institutions. This exerts pressure on public institutions to collect revenues from trade related public services including taxes, charges and fees from Customs, and other border controls.

Guatemala had a GDP growth rate of 3.0 percent since 2012 and 4.1 percent in 2015. In 2016, the country’s economy grew by 2.9 percent. According to the latest estimates, it is expected to grow by 3.2 percent in 2017. Even though Guatemala is the largest economy in Central America, it has one of the highest inequality rates in Latin America, with some of the worst poverty, malnutrition and maternal-child mortality rates in the region, especially in rural and indigenous areas10.

Honduras faces internal structural challenges. Honduras’s GDP per capita is lower today, relative to the US and LAC region, than it has ever been. Moreover, Honduras has the second most inequitable income distribution in LAC (the Gini coefficient was 0.54 in 2013). Furthermore, the country’s weak institutional framework poses a further challenge, and has implications for Honduras’s capacity to improve the business environment and the quality and effectiveness of regulations.

Nicaragua hit a record GDP growth of 5.1 percent in 2011, slowing to 4.9 and 4.5 in 2015 and

2016, respectively. Nevertheless, poverty remains high (at 29.6 percent according to the 2014 Standard of Living Survey by the National Development Information Institute) and Nicaragua is still one of Latin America’s least developed countries, where access to basic services is a daily challenge11.

C.4 THEORY OF CHANGE: RESULTS FRAMEWORK

The result framework presents the expected results and illustrative activities that will allow

USAID to meet the goal and purpose of this Activity, in alignment with the CEN Strategy, A4P, the RDCS, the SIECA Regional Trade Facilitation and Competitiveness Strategy and the regional Customs Union (See Figure 1).

International Monetary Fund (2016). “El Salvador Consultation Report.”

World Bank Group - Guatemala context

World Bank Group - Nicaragua context

Figure 1. RESULTS FRAMEWORK

C.5 PROGRAM OBJECTIVES/EXPECTED RESULTS

Expected Overall Results

The overall expected result from this Activity will be the reduction of crossing times at borders and a reduction in time and cost for the private sector to import and export. This result will be the Activity’s top line performance indicator and all related interventions must directly link to it.

Activity Structure

Component 1: Central America Economic Integration Enhanced with emphasis in the

Northern Triangle

This component will harmonize and simplify border control procedures between trade related agencies and improve their interconnectivity to promote information sharing thus enhancing coordinated border management and strengthening the recently signed Customs Union.

Coordination among agencies will be established at a national level and then at binational levels.

Interventions under this component will result in building a more cooperative culture among border control agencies that can lead to developing integrated risk management systems to ensure more efficient and effective controls. A continuous learning program in integrated border management will be developed to certify current border control officers of trade related agencies, helping to ensure that procedures are followed according to a uniform standard and will continuously promote border management coordination, ensuring the sustainability of this Activity.

Through this component, the Activity will also enhance the interconnectivity between trade related agencies by upgrading current Information Technology (IT) systems, according to the need of each agency. This interconnectivity and interoperability between different agencies will be built upon the Radio-frequency Identification (RFID) systems currently being implemented by USAID’s RTMA project.

Activities under this component will be a key support to the regional Customs Union. This support will be delivered in coordination with SIECA which is the regional institution providing technical and institutional support to the Customs Union process.

Additionally, to enable expansion of intraregional trade and exports to international markets, the Activity will continue to develop efficient sanitary registration procedures in line with international standards, including products coming from other markets. This will ensure the sustainability of the progress made by the CA-TL project.

1.1 Illustrative interventions may include, but are not limited to:

Support the Customs Union by providing technical assistance to Central American countries implementing newly established procedures by its parties.

Develop an Integrated Border Management Certification as a formal and continuous learning program for customs and enforcement officers from all border agencies to promote collaborative culture among agencies.

Support the development of integrated customs procedures manuals, designed jointly with border agencies, to promote coordinated border management and more efficient and transparent controls.

Provide government agencies with technical assistance and training to adopt the RFID technology as an integrated border control tool, and ensure sustainability.

Assist government agencies to connect their IT systems to harmonize, simplify, and integrate relevant border control agencies, including agriculture, health, immigration, and others at a national level and among Central American countries.

Assist national registration authorities to develop efficient processes for sanitary registration procedures in line with international standards.

1.1.1 Expected Results

NT countries’ border control agencies enabled to comply with the Customs Union

Protocol.

An Integrated Border Management Certification and continuous learning program for customs and trade related officers from all border agencies that promotes professionalism and a collaborative culture among border control agencies.

At least 300 border controls officers from the Central American countries trained in the Integrated Border Management Certification and continuous learning program. At least 225 border controls officers certified.

Development of at least three integrated procedures manuals for border management to ensure transparency and more efficient controls, integrating customs with at least three border control agencies, in the NT countries.

Adoption of integrated border management procedures manuals in at least three ports of entry in the NT countries.

Reduce by at least 20 percent, the time of inspections, through the elimination of unnecessary or redundant procedures in the NT countries.

At least four border control agencies sharing timely, electronic documentation through the connectivity of IT systems and reduce total border crossing time by at least 20 percent in at least three ports of entry in the NT countries.

Reduce the number of physical documents required at ports of entry in the NT countries by at least 40 percent.

Import clearance times reduced by at least 20 percent in three main land borders in the

NT countries.

Reduce the current average cost to cross borders in Central America by at least 10 percent.

Reduce the time required to obtain sanitary registration for non-Central American products by at least 50 percent.

Equip at least two ports of entry in the NT countries with RFIDs, in addition to the borders already equipped with this technology.

At least a 30 percent increase in the number of new products registered to enter Central

American countries from non-Central American markets as a result of improved procedural and organizational efficiency in the NT countries.

Component 2: Comprehensive Implementation of the WTO Trade Facilitation Agreement

Supported

This component will help key regional institutions such as SIECA, regional business associations, and government agencies, to comprehensively implement key elements of the WTO

Trade Facilitation Agreement that entered into force on February 22, 2017. Central American countries have ratified the Trade Facilitation Agreement12 and are committed to complying with the binding provisions that will benefit regional trade by improving customs procedures and increasing transparency. The Trade Facilitation Agreement includes provisions and lines of actions that enhance cooperation among customs and other border agencies and with the private sector, therefore this component will integrate and capitalize on progress made in the first component.

While much of this work will be driven by government leadership and political will, this Activity will prioritize those provisions likely to have a substantial impact on commercial trade and that are of particular interest to the private sector. These are: 1. National Trade Facilitation Committees13 (NTFC), 2. Risk Management, and 3. Authorized Economic Operators (AEOs).

2.1 Illustrative interventions may include, but are not limited to:

Provide capacity building in the design of trade facilitation proposals to key regional or national business associations and institutions in the Central American countries, so they are able to submit proposals to the NTFC or other relevant actors.

Design a mechanism to submit trade facilitation solutions to the NTFC and a subsequent articulated consultative process between businesses and government entities to discuss the proposals.

Support the effective operation of the NTFC which will require institutional strengthening for both public and private sector participants.

Support Central American countries to develop and implement a regional risk management system for all border control agencies compatible with international standards.

Strengthen implementation of the AEO programs in Central American countries.

Support the development of a regional mutual recognition AEO program in coordination with the WCO, SIECA, Custom Offices, including the participation of private sector companies.

2.1.1 Expected Results

A consultative mechanism designed and established to present and socialize proposed trade facilitation solutions from the private sector and/or the government to the NTFC in the three NT countries.

At least five trade facilitation solutions submitted through the above mechanism in the three NT countries.

At least four trade facilitation proposals undergoing the consultative process.

At least three trade facilitation solutions proposed by the NTFC, implemented in each of the three NT countries.

http://www.tfafacility.org/ratifications

National Trade Facilitation Committees are high-level platform for institutional coordination and stakeholder consultation with balanced public and private sector participation. Each country must define the stakeholders who are the proprietary members of this committee.

At least three border control agencies will have revised regulations and policies, and a piloted seamless digital exchange of information that will lead to the implementation of an integrated risk analysis process, enhancing border coordination.

Using international standards and sequencing, at least two border control agencies will demonstrate improvements based on operational improvements that will be measured.

At least a 25 percent reduction of physical inspections of imports entering the NT countries as a result of the established risk management system.

The AEO program developed in Honduras and Nicaragua.

At least 20 new trade operators and/or companies in the process of being certified as

AEOs in Guatemala and El Salvador.

At least 10 new trusted economic operators participating in the AEO program in the region.

At least two Mutual Recognition Agreements of AEO programs signed between Central

American countries.

C.6 CROSS CUTTING PRINCIPLES

Coordination with SIECA

USAID assistance for achieving the activity purpose relies on strong partnerships and coordination with regional institutions, donors, and the private sector. This activity recognizes the important role of SICA as the economic and political organization of Central American states. SICA is USAID’s primary regional partner in Central America and works together with USAID on many issues within the region, such as trade facilitation and food security, formalized through a Regional Development Objective Grant Agreement. USAID Central America Regional Program (USAID/CAM) works directly with sector-specific SICA institutions such as SIECA, the Central American Agricultural Council (CAC), the International Regional Organization for Plant Protection and Animal Health (OIRSA) and others, to jointly address strategic regional economic integration challenges. The Activity will be closely coordinated with SIECA and will align with and contribute to strategic priorities of relevant SICA institutions for long-term sustainability, provided they are in the best interests of achieving the Activity’s purpose.

In recent years, USAID/CAM has strengthened its relationship with SIECA and the Council of Ministers of Economic Integration (COMIECO), which brings together the economy ministers of the region and determines policy proposals for the council. USAID and other donors have supported SIECA in its role to promoting economic integration. Since 2013, SIECA has made important progress in areas such as trade facilitation; maritime port promotion; SME enterprise development; and implementing a regional customs union.

The Activity shall establish a close relationship with SIECA, which has developed important information and statistics resources, such as the Central American Trade Statistics Information

System, the Central American Online Harmonized Tariff System, Central American Advance Rulings, and a virtual documentation center, among others. In addition, SIECA IT systems are critical for accomplishing the interconnectivity of regional customs administrations and other trade facilitation procedures. Country-specific actions shall be coordinated with SIECA to build upon the regional harmonization and economic integration process.

Coordination with other U.S. Government Agencies

The Activity must work in collaboration and coordinate with other national and regional activities and leverage relationships with U.S. Government (USG) Agencies in Guatemala, Honduras, El Salvador and Nicaragua such as Customs and Border Protection (CBP), the International Narcotics and Law Enforcement Office (INL), Foreign Commercial Service (FCS) of the Department of Commerce, the US Department of Agriculture’s Foreign Agriculture Service (FAS), and Millennium Challenge Corporation (MCC) for customs and other trade related technical expertise.

Coordination Bilateral Missions

The Activity must work in strategic alignment with USAID bilateral missions and US Embassies in Central America. Counterparts in relevant bilateral missions and US Embassies were consulted during the development of this Activity and will play a critical role in shaping the implementation aligned with each country’s strategic focus to achieve greater impact.

Coordination with Private Sector and Other Donors

A solid relationship, and frequent coordination with key private sector organizations, exporter associations, chambers of commerce, and national level industry organizations, is critical for achieving the goals of this activity. The Activity will proactively seek to leverage funding and resources to better align priorities and achieve desired development impacts. USAID highly encourages proposals that demonstrate a solid understanding of key private sector organizations whose existing relationship and initiatives with government counterparts are essential for achieving the results of this activity.

Donor coordination must be a priority to complement and align USAID investments in the region. Bilateral and Multilateral donors who provide assistance for trade facilitation and regional economic integration include: the IDB, IMF, WCO, the United Nations Commission on Trade and Development (UNCTAD the World Bank, and the EU. USAID highly encourages proposals that demonstrate a solid understanding of key donor activities in trade facilitation against which USAID will need to closely coordinate and align interventions.

Trilateral Cooperation

USAID seeks to leverage additional resources and technical expertise from South-South cooperation provider countries in the Americas; therefore, the Activity will also build on past trilateral cooperation successes14 and, through USAID, will identify potential new trilateral cooperation opportunities for technical assistance with the U.S., Central American countries, and selected donor countries primarily from Latin America or other applicable regions. Trilateral Cooperation is a collaboration in which traditional donor countries and multilateral organizations

These activities include: Three workshops with Mexico’s Cooperation Agency for International Development

(AMEXCID, Spanish Acronym) in topics such as Single Window, Authorized Economic Operator and Risk

Management. for NT government trade experts.

facilitate south-south initiatives through the provision of training, management systems, technological systems and other forms of support.

Science, Technology, Innovation, and Partnerships (STIP)

The RDCS supports the development of science, technology, innovation, and partnerships (STIP). Through a STIP-focused lens, the strategy promotes the expansion of evidence-based decision-making and improved scientific capacity in the region to address major development challenges through the direct use of scientific data, analyses, and innovative tools. Therefore, USAID strongly encourages the Offeror to propose evidence-based technological approaches that build local, national, and regional capacity of communities in: 1) using scientific data and processes; 2) leveraging available technologies; and 3) applying innovative ideas as a foundation for reaching long-term, sustainable development goals. Additionally, USAID strongly encourages the Offeror to apply similar scientific processes in establishing appropriate baselines and measurement procedures to accurately monitor the impact of the proposed development activities over time. The Contractor is expected to harness innovations in STIP to increase impact.

Gender Equality and Female Empowerment

Central American countries are patriarchal societies with strong social norms that dictate gender roles and cultural practices that often result in gender inequality. Using a measure of gender equality developed by the UN for the 2016 Human Development Report, El Salvador, Guatemala, Honduras and Nicaragua currently rank toward the high end (indicating high gender inequality) at 117, 125, 130 and 124 respectively out of 188 countries. Evidence suggests that women traders face particular constraints when it comes to customs and border management.

Low levels of literacy and lack of information and knowledge about cross border trade regulations and procedures are more prevalent among female than male traders. This means that women are not able to fully benefit from the opportunities and efficiencies that border management reform offers. Corruption associated with cross-border trade is also considered a constraint that women experience more prominently than men. Typically, border agencies are manned by men and do not have a culture of working in gender sensitive ways to facilitate female trade. Likewise, working conditions are geared towards the needs of the male workers and thus women are afforded poor amenities and opportunities.

The Contractor will systematically consider the gender aspects and implications of specific interventions. The Contractor must build gender into the work plan in accordance with USAID requirements. This includes examining:

1. How the different roles and status of women and men in the region will affect the activities to be undertaken; and

2. How the anticipated results of the Activity might affect women and men differently.

The Contractor should ensure that stakeholder engagement is gender-sensitive and that both women and men are represented throughout the Activity cycle including: (1) taking into account the particular constraints that women face, (2) engaging women and ensuring they are willing and able to participate in activities, and (3) ensuring that a wide range of women’s perspectives are represented within the activity.

The Contractor will also ensure that training addresses the gender dynamics of trade facilitation.

The gender dynamics of trade facilitation is taken to mean the differentiated experience in interacting with customs and border management, trade infrastructure, port efficiency, transport security, logistics and transport services, regional trade corridors and transit, and multimodal transport due to gender. Where possible, training should integrate themes/modules on the gender dimensions of trade facilitation. The Contractor should encourage equal participation from male and female employees to ensure as much gender parity as possible among training participants.

Progress in all related activities will be measured and verified using indicators that are disaggregated by sex.