72061121R00002_ReMEG Solicitation _ Amendment 1.pdf

(x)

72061121R00002 x x copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted ; or (c) By separate letter or electronic communication which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE

RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR

OFFER. If by virtue of this amendment you desire to change an offer already submitted , such change may be made by letter or electronic communication, provided each letter or electronic communication makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.

x

N/A

Not Applicable

720611

Lusaka, Zambia 10101 P. O. Box 320373 Subdivision 694/Stand 100 Ibex Hill USAID/Zambia

11/05/20200001

13. THIS ITEM ONLY APPLIES TO MODIFICATION OF CONTRACTS/ORDERS. IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

12. ACCOUNTING AND APPROPRIATION DATA (If required) is not extended.is extended, Items 8 and 15, and returning

Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended , by one of the following methods: (a) By completing

The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

FACILITY CODE CODE

10B. DATED (SEE ITEM 13)

10A. MODIFICATION OF CONTRACT/ORDER NO.

9B. DATED (SEE ITEM 11)

9A. AMENDMENT OF SOLICITATION NO.

CODE

8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)

7. ADMINISTERED BY (If other than Item 6)CODE 6. ISSUED BY

PAGE OF PAGES

4. REQUISITION/PURCHASE REQ. NO.3. EFFECTIVE DATE2. AMENDMENT/MODIFICATION NO. 5. PROJECT NO. (If applicable)

1. CONTRACT ID CODE

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

11/05/2020

CHECK ONE A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT

B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:

D. OTHER (Specify type of modification and authority) appropriation data, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b).

E. IMPORTANT: Contractor is not is required to sign this document and return __________________ copies to the issuing office.

ORDER NO. IN ITEM 10A.

14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

The purpose of this Amendment is to:

1. Provide a copy of the amended Solicitation with updated sections highlighted in yellow;

and,

2. Provide answers to questions received on November 16, 2020 from various Offerors as attached.

All other terms and conditions remain unchanged.

16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)15A. NAME AND TITLE OF SIGNER (Type or print)

15C. DATE SIGNED 16B. UNITED STATES OF AMERICA 15B. CONTRACTOR/OFFEROR 16C. DATE SIGNED

(Signature of person authorized to sign) (Signature of Contracting Officer)

Mohib Ahmed

STANDARD FORM 30 (REV. 11/2016)

Prescribed by GSA FAR (48 CFR) 53.243

Previous edition unusable

Except as provided herein, all terms and conditions of the document referenced in Item 9 A or 10A, as heretofore changed, remains unchanged and in full force and effect .

November 25, 2020

U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

Subdivision 694/Stand 100 Ibex Hill Road

PO Box 320373

Lusaka, Zambia – 10101 infozambia@usaid.gov

USAID.gov

November 25, 2020

Subject: Request for Proposals (RFP) Number 72061121R00002

USAID Revenue Mobilization for Equity and Growth (ReMEG) Activity-Amendment1

Dear Prospective Offerors, The United States Agency for International Development (USAID) Mission to Zambia is seeking proposals to provide technical services for USAID Revenue Mobilization for Equity and Growth

(ReMEG) Activity as described in the attached Request for Proposals (RFP).

This procurement will be conducted under full and open competition procedures pursuant to

Part 15 of the Federal Acquisition Regulation (FAR), under which any type of organization is eligible to compete.

USAID anticipates the award of a Cost-Plus-Fixed-Fee, Completion-Type Contract for a maximum five (5) year period of performance, consisting of a three (3) years base period and an option period of two (2) years as a result of this RFP. USAID anticipates that the total estimated cost will range from $12 - $13.5M. Offerors must propose realistic and reasonable costs for the work described in their proposals. The North American Industry Classification

System (NAICS) code for this solicitation is 541990. The authorized geographic code for the prime Contractor of this procurement is 935.

Action Date Time Submission/Location

Questions Due November 16, 2020 16:00 Lusaka

Time oaa-solicit-lusaka@usaid.gov Proposals Due December 10, 2020 16:00 Lusaka

Time

Failure to comply with the submission date and time may result in a submission being deemed unacceptable, as such it will not be reviewed or evaluated. Faxed proposals are not acceptable, nor will they be reviewed or evaluated. Section M states the criteria by which proposals will be evaluated.

All questions related to the RFP must be submitted as indicated above. Unless otherwise notified by an amendment to the RFP, no questions will be accepted after this date.

Offerors are encouraged to read the entire solicitation, which includes all pertinent technical sections and the terms, conditions and instructions required for submitting proposals. Any empty fill-in spaces in Sections B through J will be completed by the Contracting Officer before final award.

mailto:infozambia@usaid.gov mailto:oaa-solicit-lusaka@usaid.gov mailto:oaa-solicit-lusaka@usaid.gov

Amendment 01 Request for Proposals (RFP) Number 72061121R00002

USAID ReMEG Activity

This RFP in no way obligates USAID to award a Contract. Nor does it commit USAID to pay any cost incurred in the preparation and submission of a proposal. Award of a Contract under this RFP is subject to availability of funds and other internal USAID approvals.

This RFP and any future amendments can be viewed and downloaded from www.beta.sam.gov.

USAID bears no responsibility for data errors resulting from transmission or conversion processes. Further, be aware that amendments to solicitations are occasionally issued and will be posted on the same internet site from which you downloaded the solicitation. You are therefore advised to regularly check the above internet site for amendments.

Sincerely, Mohib Ahmed

Supervisory Contracting Officer

Director, Office of Acquisition and Assistance http://www.beta.sam.gov/

SOLICITATION, OFFER AND AWARD

1. THIS CONTRACT IS A RATED

ORDER UNDER DPAS (15 CFR 700)

RATING

N/A

PAGE O F PAGES

3 145

2. CONTRACT NUMBER 3. SOLICITATION NUMBER

720611121R00002

4. TYPE OF SOLICITATION

SEALED BID (IFB)

X NEGOTIATED (RFP)

5. DATE ISSUED

11/05/2020

6. REQUISITION/PURCHASE NUMBER

REQ-611-21-000002

7. ISSUED BY CODE ZAMBIA 8. ADDRESS OFFER TO (If other than Item 7)

Same as Item 7

USAID Zambia

Subdivision 694/Stand 100 Ibex Hill Road

P. O. Box 320373

Lusaka 10101

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

SOLICITATION

9. Sealed offers in original and 1 electronic copies for furnishing the supplies or services in the Schedule will be received at the place specified in Item 8, or if hand carried, in the depository located in Submission Must be in two separate electronic formats (Technical and Cost) until 1600 local time

(Hour)

12/10/2020

(Date)

CAUTION: LATE Submissions, Modifications, and Withdrawals: See Section L, Provision No. 52.214-7 or 52.215-1. All offers are subject to all terms and conditions contained in this solicitation.

10. FOR

INFORMATI

ON

CALL:

A. NAME

Alfred Kapambwe

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

oaa-solicit-lusaka@usaid.govAREA CODE NUMBER EXT.

11. TABLE OF CONTENTS

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

PART I - THE SCHEDULE PART II - CONTRACT CLAUSES

X A SOLICITATION/CONTRACT FORM 03 X I CONTRACT CLAUSES 76

X B SUPPLIES OR SERVICES AND PRICES/COSTS 04

X C DESCRIPTION/SPECS./WORK STATEMENT 08 X J LIST OF ATTACHMENTS 89

X D PACKAGING AND MARKING 18

X E INSPECTION AND ACCEPTANCE 21 X

K REPRESENTATIONS, CERTIFICATIONS AND

OTHER STATEMENTS OF OFFERORS

X F DELIVERIES OR PERFORMANCE 22

X G CONTRACT ADMINISTRATION DATA 38 X L INSTRS., CONDS., AND NOTICES TO OFFERORS 120

X H SPECIAL CONTRACT REQUIREMENTS 43 X

M EVALUATION FACTORS FOR AWARD 140

OFFER (Must be fully completed by offeror)

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

12. In compliance with the above, the undersigned agrees, if this offer is accepted within calendar days (60 calendar days unless a different period is inserted by the offeror) from the date for receipt of offers specified above, to furnish any or all items upon which prices are offered at the price set opposite each item, delivered at the designated point(s), within the time specified in the schedule.

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 AND OPEN COMPETITION:

10 U.S.C. 2304 (c) ( ) 41 U.S.C. 253 (c) ( )

23. SUBMIT INVOICES TO ADDRESS SHOWN IN

(4 copies unless otherwise specified)

ITEM

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

26. NAME OF CONTRACTING OFFICER (Type or print)

Mohib Ahmed

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 official written notice.

AUTHORIZED FOR LOCAL REPRODUCTION

Previous edition is unusable

STANDARD FORM 33 (Rev. 9-97)

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

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. ACKNOWLEDGEMENT 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

OFFEROR

CODE FACILITY

16. NAME AND TITLE OF PERSON AUTHORIZED TO SIGN OFFER

(Type or print)

15B.TELEPHONE NUMBER 15C. CHECK IF REMITTANCEADDRESS

IS DIFFERENT FROM ABOVE - ENTER

SUCHADDRESS IN SCHEDULE.

17.SIGNATURE 18. OFFER DATE

AREACODE NUMBER EXT.

November 25, 2020

USAID ReMEG Activity

SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS

B.1 PURPOSE

The purpose of this contract is for the Contractor to implement the USAID/Zambia’s Revenue

Mobilization for Equity and Growth Enhanced (ReMEG) activity in accordance with Section C –

Statement of Work (SOW).

B.2 CONTRACT TYPE AND SERVICES

This is a Cost-Plus-Fixed-Fee (CPFF) completion-type contract consistent with Federal

Acquisition Regulation 16.306(d)(1). The Contractor must provide the outputs and accomplish goals and objectives as described in Section C, and the deliverables as described in Section F, in accordance with the performance standards specified in Section F and H.

B.3 ESTIMATED COST, FIXED FEE AND OBLIGATED AMOUNT

In accordance with FAR Part 52.232-22 - Limitation of Funds:

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

(b) Budget

The Contractor will not be paid any sum in excess of the Total Cost-Plus-Fixed-Fee amount.

b.1 The contract budget found herein, is based on the Contractor’s original proposal and/or final proposal revision, which was accepted by USAID through award of this contract. NOTE: The Contractor will be required to notify the USAID Contracting

Officer’s Representative (COR) of Budget Line Item variation of 10% and request concurrence.

Line Item

Description

PERIOD OF PERFORMANCE

Base Period Option Period Total All Years

Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5

Salaries and Wages

Fringe Benefits

Consultants

Travel, Transportation and

Per Diem

Equipment and

Supplies

Subcontracts

Grants under

Contracts $300,000 $200,000 $500,000

USAID ReMEG Activity

Other Direct Costs

Indirect Costs

Fixed Fee

Total Cost Plus

Fixed Fee

Item No Supplies/Services

(Description)

Qty Base Period

(YR1 thru YR3)

Option Period

(YR4 thru YR5)

0001 Direct Costs Lot

0002 GUCs Lot $300,000 $200,000

0003 Indirect Costs Lot

Total Estimated Cost

0004 Fixed Fee %TBD

Total Estimated Cost plus

Fixed Fee b.2 The inclusion of any costs in the above cost categories does not obviate the requirement for prior approval by the contracting officer of cost items, any of the terms and conditions of this contract, including the applicable cost principles (see FAR52.216-

07, “Allowable Cost and Payment”); nor does it constitute a determination of allowability by the contracting officer of any item of cost, unless specifically stated elsewhere in this contract.

b.3 The Contractor may shift/move funds up to 10% between line items with COR concurrence. Any adjustments above 10% require written Contracting Officer (CO) approval.

b.4 The Contractor agrees to furnish data that the contracting officer may request on costs expended or accrued under this contract in support of the budget information provided herein.

(c) 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 $TBD. The Contractor will not exceed the aforesaid obligated amount.

(d) In accordance with FAR 52.232-19, Availability of Funds, funds obligated hereunder are anticipated to be sufficient through o/a TBD. Funding for this contract will be on an incremental basis, subject to the availability of funds.

B.4 FAR 52.216-8 FIXED FEE (JUN 2011)

The Government will pay the Contractor for performing this contract the fixed fee specified in

Section B.3. In accordance with FAR 52.216-8, Fixed Fee (2011) USAID will withhold 15% of the total fee or $100,000, whichever is less until the required conditions under the referenced clause have been met.

USAID ReMEG Activity

The payment of fee will be in accordance with the following fee schedule which is tied to the deliverable schedule as outlined in Section F.5 and provided below:

The following is an illustrative table that will be filled in at time of award:

% OF FIXED FEE

Base Period Option Period

No Deliverable s Yr. 1 Yr. 2 Yr.3 Yr. 4 Yr. 5

Annual Work

Plan (AWP) 10% 10% 10% 20% 10%

3 AMELP 20% N/A 30%

Grants under

Contract

Manual

5% N/A N/A

Periodic Progress Reports

Annual

Progress

Reports

5% 5% 5% 5% 5%

Other Reports

Final Activity

Report N/A 30% 30%

Total Fixed FEE 100% 100%

If the option period is exercised, the 30% fee(s) associated with deliverable 13, “Final Activity

Report” will be carried over to and added with the Option fee of 30%.

B.5 INDIRECT COSTS

The Contractor is authorized to recover applicable indirect costs, if it is part of the

Contractor's usual accounting procedures, consistent with FAR Part 31, and Negotiated

Indirect Cost Rate Agreement (NICRA).

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

[To be inserted at the time of Award]

Contractor Fringe

Rate %

Overhead

Rate %

G&A

Rate %

PRIME (insert)

Type of Rate (insert) TBD TBD TBD

USAID ReMEG Activity

Base of Application TBD TBD TBD

Source: TBD TBD TBD

Period: TBD TBD TBD

MAJOR

SUBCONTRACTOR(S)

Type of Rate TBD TBD TBD

Base of Application TBD TBD TBD

Source: TBD TBD TBD

Period: TBD TBD TBD

● Contractors are allowed to recoup indirect costs (OH, G&A, etc.) as other direct costs if it is part of the Contractor’s usual accounting procedures, consistent with FAR 31 and the contactor’s NICRA.

● Major subcontractors are those subcontractors whose proposed costs exceed 20% of the Offeror’s proposed total cost or perform a key element of the RFP.

● The Contractor will make no change in its established method of classifying or allocating indirect costs without the prior written approval of the Contracting Officer.

Reimbursement for indirect costs shall be at final negotiated rates.

B.6 COST REIMBURSABLE

The U.S. dollar costs allowable will be limited to reasonable, allocable and necessary costs determined in accordance with FAR 31 (Contract Cost Principles), 2 CFR Part 200 (Cost

Principles), FAR 52.216- 7 (Allowable Cost and Payment), FAR 52.216-8 (Fixed Fee) if applicable, FAR 52.232-20 (Limitation of Cost), FAR 52.232-22, (Limitation of Funds), and

AIDAR 752.7003 (Documentation for Payment), may be reimbursable under this contract.

[END OF SECTION B]

USAID ReMEG Activity

SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 ACTIVITY TITLE

The activity title is USAID Revenue Mobilization for Equity and Growth Activity.

C.2 PURPOSE

The proposed activity will help Zambia improve domestic revenue mobilization (DRM) and expand the fiscal space for public spending and investments in service delivery and poverty reduction. The activity will engage both government and non-government stakeholders to build capacity in tax policy analysis, improve tax compliance and administration, and strengthen the tax culture in a manner that facilitates private sector growth and accountability relationships between taxpayers and the Government of the Republic of Zambia (GRZ).

C.3 BACKGROUND

Zambia’s development strategy has targeted a rapid scale-up of public investment to address infrastructure needs. The growth benefits have yet to materialize, resulting in large fiscal deficits financed through non-concessional borrowing and the accumulation of domestic arrears. With the depreciation of the kwacha, a constrained tax base, increasing debt service payments, and several hard currency-denominated debt instruments coming due in the near future, the government’s ability to deliver on its priorities and support the most vulnerable is compromised.

The risk of debt distress has increased substantially. Over 83% of the projected 2020 domestic revenues in the Fiscal Year (FY) operating budget were allocated to debt service and the wage bill (63% of total expenditure allocations), with little remaining for other investment in social sectors and support to poverty alleviation.

Fiscal constraints affect social-sector spending more than any other function of government and threaten to erode the gains that Zambia has made thus far. The social-sector budget as a share of the total has declined from 29.4% in 2019 to 26.1% in 2020. Education has reduced both in absolute terms and as a share of the national budget, falling from 16% in 2018 to 12.4% in 2020.

Budget allocation to agriculture has declined for the past three years, falling 15% in the 2020 budget alone. Although government funding to Zambia’s health sector has been increasing in nominal terms since 2010, the share for the health sector in the national budget averaged 9.2% over the past five years, far below the benchmark 15% that Zambia committed to when it signed onto the 2001 Abuja Declaration.

The GRZ recently launched a National Health Insurance Scheme, to be financed in part from payroll tax deductions from formal sector workers; yet these contributions fall far short of what is required for the GRZ to meaningfully expand access to quality health care. Closing these financing gaps, and expanding the fiscal space for priority investments, will depend on Zambia’s ability to sustainably mobilize increasing levels of domestic resources, especially tax revenues.

This requires reform to both tax policy and administration in a manner that strengthens dialogue and negotiation between taxpayers and the GRZ and reinforces public accountability.

Taxes must be collected in a way that facilitates private sector growth, strengthens accountability

USAID ReMEG Activity relationships between taxpayers and the GRZ, and supports poverty alleviation. The amount of tax collected has important consequences for the availability of resources that underpin state capacity. The way in which tax is collected impacts investment, growth, incomes, and taxpayer demands for accountability of public resource use.

Recent DRM efforts have resulted in steady revenue growth, with domestic tax revenues increasing from 13.0% (2016), to 14.8% (2017), to 15.8% (2018) of Gross Domestic Product

(GDP). Nevertheless, Zambia’s tax ratio remains low compared to peer countries in the

Southern African Development Community, which averaged 23.7% of GDP in 2015.

The 2016 Tax Administration Diagnostic Assessment Tool (TADAT) pointed to a number of strengths and weaknesses in the current system. Compliance remains one of the weakest areas in the tax administration system. Other key issues include uncertainty regarding the actual number of registered taxpayers and the accuracy of the taxpayer registration database; low rates of on-time filing across all core tax types; the high value of tax arrears and weak debt management procedures; significant delays in processing value-added tax (VAT) refund claims; and a lack of routine and systematic use of third-party information to improve registration and enforcement. The 2017 Public Expenditure and Financial Accountability Report reflected similar issues.

Many elements of the private sector have an interest in making current tax administration more transparent and efficient, and tax policy more predictable, transparent and equitable. Other private sector actors disproportionately benefit from the current tax regime and are vested in the status quo. In the tax policy arena, key challenges are significant exemptions and a multiplicity of tax rates. The Ministry of Finance (MoF) undertakes limited impact analysis to inform policy formulation, and there is poor coordination between government institutions. While steps have been taken to streamline tax incentives, significant work remains. GRZ efforts to ensure it has an adequate revenue stream from the mining sector has created a turbulent mining taxation environment characterized by frequent and abrupt tax policy changes. At the same time, the focus on mining taxation is distracting attention from broader issues in the country’s tax regime, and the need for a more constructive public-private dialogue to ensure a more sustainable framework that promotes equity, efficiency, and growth. Approximately one-third of the public debt stock is domestic, and two-thirds of it is held by foreign creditors. As high levels of domestic borrowing have also made it more difficult for the private sector to access finance, improvements in tax revenue that contribute to more sustainable debt management hold the potential of unlocking increased domestic finance for entrepreneurs and the private sector.

Key DRM reform priorities are reflected in the draft Public Financial Management Reform

Strategy (2019-2024) and the Zambia Revenue Authority (ZRA) Corporate Strategic Plan (2019-

2021). The Ministry of Finance completed three further diagnostic studies on tax expenditures, the tax gap, and marginal effective tax rates to guide its reform priorities. In the GRZ 2020 budget submission to Parliament, the Minister of Finance also committed to continuing its review of the tax system, as well as continuing the roll-out of the modernization and automation of tax administration. Emerging areas in international taxation such as the Organization for Economic

Cooperation and Development’s (OECD’s) base erosion and profit shifting recommendations are starting to be incorporated into domestic practice with the most notable development being https://www.tadat.org/assets/files/Zambia_Final_PAR_2016.pdf https://www.pefa.org/node/631

USAID ReMEG Activity the release of updated Transfer Pricing Regulations and the introduction of Documentation Rules.

On legislative measures, the GRZ has proposed to reform, update and strengthen a number of

Acts such as the Income Tax Act, Customs and Excise Act, Property Transfer Tax Act, and the

Valued Added Tax Act in an effort to render their administration more effective, although experience suggests that legislative reform efforts will be slow.

Zambia is experiencing the exogenous effects of the pandemic as a result of the global economic slowdown. It shares land borders with eight countries, and the copper mining industry has also experienced decreasing demand from China, caused by production shutdowns and global supply chain disruptions. The target budget deficit for 2020 (on a cash basis) was set at 5.5 percent of

GDP in the 2020 budget. This was premised on a significant increase in domestic revenues to at least 22 percent of GDP. These revenue targets are all expected to decline. The IMF projects a contraction in the economy of 5.1%. The scaling down of economic activity is expected to cut across all sectors including manufacturing, transport, power generation and transmission, wholesale and retail trade, and tourism, all with associated reductions in tax and non-tax revenues. A contraction in revenues is likely to continue as long as the pandemic - and its economic consequences - persists. The GRZ announced tax measures in March and April 2020 to bolster the private sector’s ability to respond to the COVID-19 pandemic. These measures will also reduce tax revenues. While overall revenue performance was on target during the first quarter of 2020, revenue performance during the second quarter was 19% below projections, largely driven by the negative economic impacts of the Covid-19 pandemic and lower than anticipated domestic VAT, VAT on imports, and customs duties (see attached ZRA Revenue

Performance Report for 2020 Year to Date).

The scope for realigning expenditures is limited due to the prevalence of non-discretional expenditure items such as debt payments, public worker emoluments and expenditures tied to externally financed projects. All these trends point to a much larger fiscal deficit than the 5.5 percent of GDP targeted for 2020.

C.4 STRATEGIC LINKAGES

Relationship to U.S. government priorities: ReMEG builds on years of U.S. Government partnership to improve public sector governance and promote transparent and accountable management of public resources in Zambia. As USAID/Zambia works to operationalize The

Journey to Self-Reliance this activity will specifically contribute to the Mission’s Financing Self

Reliance Framework. ReMEG supports and reinforces USAID/Zambia’s Country Development

Cooperation Strategy (2019-2024). While ReMEG’s focus will be on revenue administration, policy and enhanced public private dialogue on revenue issues, the project ultimately aims to help

Zambia achieve sustainable financing of its own development agenda over time. To do so, the activity will work closely with other USAID and USG efforts that are playing a part in that process.

ReMEG will work closely with the Mission’s new Business Enabling Environment activity, which will focus on energy, agriculture, and trade, and USAID’s Zambia’s health financing portfolio. An additional interlocking activity within the DRG sector includes Local Impact Governance, an integrated governance program focused at sub-national levels that will incorporate own-source revenue mobilization and citizen engagement within its suit of interventions.

USAID ReMEG Activity

Alignment with GRZ Priorities: Increasing domestic revenue mobilization is a top priority for the GRZ. Zambia’s Vision 2030 (2006-2030) is to transform Zambia into a prosperous middle-income nation by 2030 and to create a new Zambia which is a “strong and dynamic middle-income industrial nation that provides opportunities for improving the well-being of all, embodying values of socio-economic justice.” Vision 2030 is implemented through medium-term national development plans. Zambia is currently implementing its Seventh National Development

Plan (7NDP) for the period 2017-2021. The activity is also intended to support the ZRA’s objectives and performance benchmarks in its Corporate Strategic Plan (see attached background documents). The four result areas are: a) enhanced revenue collection; b) satisfied and knowledgeable taxpayers; c) efficient, reliable and simplified business systems; and d) committed, competent and high performing workforce. Zambia’s recent weakening in economic fundamentals, however, have compromised its ability to make the desired progress towards achieving its Vision 2030 objectives, and its revenue performance benchmarks.

Complementary Zambia Programs: ReMEG will ensure active coordination with the community of development partners and take frequent stock of the work of other stakeholders to ensure coherence, leverage resources and avoid duplication of efforts. In the case of the

Strengthening Good Governance Program, for example, USAID anticipates that support to the

Ministry of Finance on tax policy issues will be led by the Strengthening Good Financial

Governance Program, program, funded by the European Union and Germany, with complementary assistance to be proposed during the work planning phase with the MOF, GIZ, and other partners as appropriate.

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)

Strengthening Good Financial Governance in Zambia (2019-2022): Provides support in (1) integrated planning and budgeting, (2) effective internal control for predictable budget execution, (3) increased effectiveness of revenue mobilization, (4) transparent reporting of financial and service delivery performance, and (5) moving towards fiscal decentralization. In 2020, the program initiated support to the Ministry of

Finance’s Tax Policy Unit and the Revenue Forecasting Unit. This includes the development of a capacity development plan to support the Tax Policy Unit’s work on policy formation and policy impact analysis, with a focus on VAT, tax exemptions, and income tax, and improving applied techniques for macroeconomic models and revenue forecasting. Areas of cooperation with the ZRA focus on developing a holistic approach to tax service delivery and a number of new service channels, digital tax data analysis;

and improving the results of tax assessments and collections for the taxation of large enterprises including tax arrears and the underlying business processes.

USAID Accountable Governance for Improved Service Delivery (AGIS)

(2017-2022): Working in both the Zambian Ministry of Health and the Ministry of

General Education, and in coordination with the Ministry of Finance and the Office of the

Auditor General, AGIS strengthens financial controls, procurement and auditing so that public funds are more effectively used for service delivery. AGIS operations target

Eastern, Lusaka, and Muchinga provinces, customized to needs identified in local assessments.

https://www.giz.de/en/worldwide/20839.html

USAID ReMEG Activity

USAID Business Enabling Environment (2021-2016): Catalyzes greater private sector investment and trade in rural areas by strengthening select Zambian government and civil society organizations to implement improved and streamlined policies and processes for economically viable rural enterprises, and by creating an enabling environment that incentivizes productive investments in trade, agriculture, energy, eco-tourism and sustainable natural resource management.

USAID Local Impact Governance (2020-2025): Supports Zambia build a sub-national system of governance for devolved service delivery more responsive to citizen needs. The program will engage national and sub-national authorities in three provinces to anchor citizen and private-sector inputs in government planning, budgeting and performance monitoring of service delivery; strengthen development outcomes through joint problem-solving by local authorities and line ministries; boost own-source revenue and fiscal management of local authorities to more effectively deliver on current functions and build a foundation for devolved services; and spread the adoption of good practices and lessons learned to sub-national governments outside of the geographical focal area of implementation.

U.S. Department of the Treasury’s Office of Technical Assistance (OTA)

(2017-2020). OTA provides intermittent technical advice to the ZRA on transfer pricing audit and interview techniques within specific industries such as agriculture, telecoms, and financial institutions and provides support to legal staff in areas where they can assist auditors in case development and settlement. This support will conclude in 2021.

C.4 SCOPE OF WORK

ReMEG is based on the development hypothesis that if Zambia can achieve a more stable, equitable and efficient tax system, then compliance will improve, the tax base will expand, and revenues will grow over time and create the fiscal space to increase priority spending and unlock the country’s growth potential. While the amount of tax collected has important consequences for the availability of resources that underpin state capacity and supports the delivery of basic services, the way in which tax is collected impacts investment, growth, incomes, and taxpayer demands for accountability of public resource use. While technical measures are important to strengthen enforcement and facilitate tax compliance, this is insufficient to deliver a more effective, equitable, and accountable tax system. These outcomes necessitate a clearer focus on empowering taxpayers, including more attention to the interests of previously excluded participants, and enhancing the quality and transparency of the decision-making process. The program seeks to promote the “governance dividend” as the transformation of revenues into spending and services promotes government accountability and strengthens the social contract between citizens and the state.

The proposed activity will help Zambia improve domestic revenue mobilization (DRM) and expand the fiscal space for public spending and investments in service delivery and poverty reduction. The activity will engage both government and non-government stakeholders to build capacity in tax policy analysis, improve tax compliance and administration, and strengthen the tax

USAID ReMEG Activity culture in a manner that facilitates private sector growth and accountability relationships between taxpayers and the GRZ. The ZRA has an established reform agenda that could benefit from

USAID advice and facilitation. Significant changes in tax policy are politically more challenging although shifts in the reform environment may open windows of opportunity. The activity will therefore include support to private sector and civil society stakeholders, as well the GRZ, to promote improved analysis, dialogue, and advocacy and to build coalitions that can quickly mobilize support for both DRM and broader fiscal policy reforms needed to respond to the current fiscal crisis, the anticipated Covid-19 economic shocks, and any windows of opportunity that open in the post-election environment in FY 2021.

The activity is organized around four objectives, each to be implemented through a combination of technical assistance, capacity building, and (as USAID deems appropriate) commodity support.

The primary focus of revenue administration assistance will be on strengthening capacity in domestic taxation. Opportunities to strengthen customs operations will only be pursued to the extent that such interventions demonstrably improve the ZRA's ability to collect domestic taxes

(including the VAT).

C.4 OBJECTIVES

Activities under ReMEG will support the following four objectives to help Zambia strengthen the tax culture, increase voluntary compliance, and sustainably increase domestic revenue mobilization in a manner that promotes balanced private sector-led economic growth. Outputs and interventions will be agreed year-on-year with the GRZ, and opportunities for specific interventions will be identified and pursued as and when they arise, in close cooperation with other donors and technical assistance providers.

1. Tax and Non-Tax Revenue Administration and Compliance Improved will advance the efforts of the ZRA to operationalize MoF policies and collect tax and non-tax revenues in a more effective, efficient, and transparent manner.

Illustrative activities include: technical assistance to implement a strategy addressing the low rate of compliance across all taxes and obligations; efficiency measures to improve VAT collection;

efficiency measures to improve fees and service charges for public services; improved forecasting of VAT refunds; improved monitoring and reporting of performance against desired outcomes;

and support to conduct a human resources and organizational assessment and operationalize a revised structure.

2. Tax Policy Strengthened to equip the MoF with the tools and skills to conduct policy analysis, evaluate and communicate the impact of tax reforms, and formulate sound, predictable, and fair tax and non-tax revenue policies.

Illustrative activities include: capacity development of the Ministry of Finance’s tax policy unit in policy impact assessment to lay the foundation for policy review and reform; improved revenue modeling and forecasting; targeted evaluation of tax incentives; facilitation support to strengthen coordination across GRZ institutions; implementation of the remaining parts of OECD tax base erosion and profit shifting initiatives; and examination of the effectiveness of non-tax revenue collection. GIZ and the International Monetary Fund have initiated support to the Ministry of

USAID ReMEG Activity

Finance on tax policy and revenue forecasting and are expected to take the lead on this objective.

Complementary USAID interventions will be identified in collaboration with other donor agencies and the Ministry of Finance at work planning stage, as appropriate.

3. Public-Private Dialogue Enhanced, will build private sector and civil society capacity to contribute to an informed dialogue on taxation, and ensure that public input informs decision making on the mobilization and use of public resources.

Illustrative activities include: assessments of how to shift and sustain the politics of reform on specific tax-related issues; expansion of meaningful transparency and improved quality of consultation processes through improved and new dialogue platforms; and c) investments in both private sector and civil society capacity; including media and parliamentary outreach strategies to improve stakeholder skills to analyze and report on fiscal issues.

4. Enhanced capacity to address other fiscal policy and management priorities as they emerge

ReMEG is primarily envisioned as support for domestic revenue mobilization, but the implementor must be prepared to respond to strategic windows of opportunity to respond to urgent emerging needs on an as needed basis, and in close coordination with other donor partners and technical assistance providers. This might include support to the MoF to realign expenditure policy and priorities in response to Covid-19 generated impacts, prioritizing Covid-

19 related support packages and public investment projects and implementing wage bill reforms.

While technical measures are important to strengthen enforcement and facilitate tax compliance, this is insufficient to deliver a more effective, equitable, and accountable tax system. These outcomes necessitate a clearer focus on empowering taxpayers, including more attention to the interests of previously excluded participants, and enhancing the quality and transparency of the decision-making process. A grants-under-contract (GUC) component will primarily support

Objective 3 and will be used where the research, consultation, and advocacy initiatives of local private sector associations and civil society organizations have the potential to extend ReMEG’s reach or augment its results. A key ingredient for the success of this activity is the mobilization of support from within the private sector and non-governmental community. Tax and non-tax reforms are most likely to succeed when they reflect the interests and priorities of those constituencies likely to be affected by the reforms. Each grant shall be justified based on its expected contribution to improved policy, administration, or engagement on tax and non-tax revenue and broader DRM issues.

It is anticipated that ReMEG activity will support a broader range of new taxpayer interest groups and civil society organizations that the Mission has not historically worked with. All GUCs must be in accordance with Section H.

C.4 GENDER

There has been little analysis on gendered biases in the Zambian tax system. Strengthening data collection to include sex disaggregation will help inform gender-sensitive tax policy and

USAID ReMEG Activity administration. Disparities and trends in experiences of paying taxes will be monitored as activity outcomes. USAID will also support diagnostic studies and surveys on the potential social and economic effects on population groups expected to be affected by reforms. The GRZ has demonstrated commitment to confront gender inequality in other areas and is expected to support proactive efforts to eliminate any gender bias detected in the tax system.

C.5 RESULTS MANAGEMENT AND MONITORING, EVALUATION, AND

LEARNING

The results to be achieved under this contract, to be refined after award with the GRZ and non-governmental counterparts, are:

● Contribute to the GRZ’s goal of increasing tax revenues as a percentage of GDP Improved payment compliance by taxpayers

● Increased efficiency of VAT collection

● Improved monitoring and reporting of ZRA performance against desired outcomes

● Improved skills and capacity to produce analysis and options that help the MoF make informed policy decisions

● Private sector and civil society stakeholders demonstrate improved capacity to generate research and policy assessments

● Expanded and improved opportunities for private sector, civil society, and GRZ stakeholders to consult on DRM and broader fiscal issues

● Increased MoF and ZRA capacity to effectively communicate reforms and conduct political and public consultation on changes to policies, laws, and regulations

● The MoF has more sustainable, competency-based capacity to develop, manage and analyze revenue policy, legislation, and regulations

Performance indicators, to be more fully developed at activity start up, will take into account the local context and availability of data. Shifts in the local context will have implications for the achievement of results, and significant shifts will trigger adaptation of the logical framework to better reflect the changed context. The activity will incorporate Financing Self Reliance standard indicators, such as:

● Government revenue (tax and non-tax), excluding foreign grants, as a percent of GDP and in local currency (disaggregated)

● Number of improvements to tax policies and tax administration procedures contributed to by USAID assistance

● GRZ spending on revenue authority as a percent of tax collections

● Time required by taxpayers and enterprises to prepare and pay taxes (annual hours)

● Increased year-on-year collections due to USAID assistance (disaggregated by tax type)

● Number of persons trained

● Number of person-hours of training

In addition to traditional performance-based monitoring, the activity will incorporate complexity-aware monitoring and risk assessments, to be employed over the life of the activity.

The Mission envisions a step-by-step approach to results management by facilitating GRZ and

USAID ReMEG Activity non-state partners to break down specific problems into root causes, identify entry points, search for possible solutions, take action, reflect upon what has been learned, adapt and then act again. Outputs and interventions will be agreed year-on-year with the GRZ and non-state actors, and opportunities for specific interventions will be identified and pursued as and when they arise. The approach will draw on process-tracking methodologies, using milestones and progress trackers to capture the full extent of results, support evolving flexible and demand-led interventions, and enable work on change areas that cannot be fully specified from the outset.

The monitoring, evaluation, and learning approach will explicitly address risks as reflected in the logical framework. This assists the activity management team in intentionally assessing whether or not the initial assumptions governing activity design continue to hold, providing the team with information required to make the most appropriate management decisions. The implementing partner will be asked to identify, monitor, and report on risks on an annual basis, and this will be periodically assessed during the Mission’s bi-annual portfolio reviews.

C.6 ENVIRONMENTAL COMPLIANCE

A categorical exclusion has been reached for this award. The contractor is subject to the terms and conditions for Environmental Compliance as defined in Section H.19.

C.7 CLIMATE CHANGE INTEGRATION

Climate change is a cross-cutting issue that can have significant impacts on regional, national, and local development efforts in all sectors. In recognition of this, in 2014 President

Obama signed Executive Order (EO) 13677, which requires all U.S. agencies to factor climate change into their foreign assistance planning and manage the associated climate risks. In addition, a country’s development trajectory can significantly influence its emissions of greenhouse gases that cause climate change. Climate risk management (CRM) is required for all

USAID-supported activities, with limited exceptions. Climate risk has the potential for negative consequences on activity objectives and/or outcomes due to changing climatic conditions. The focus of climate risk management at USAID is on the risk to USAID development programming. The CRM process may identify potential development opportunities associated with current and expected climatic and meteorological changes, including chances to achieve additional development objectives (including increasing climate resilience and reducing greenhouse gas emissions).

USAID undertook a preliminary climate risk screening and the results are attached (See

Attachment J.1). The Offeror will be expected to refine and implement the actions identified in the climate risk matrix attached after the award.

REFERENCE DOCUMENTS

The below documents can be found via RFI that was issued on September 18, 2020.

https://beta.sam.gov/opp/ffae243ffd6c46b6a9ad6130909b0514/view

1. Zambia Revenue Authority Corporate Strategic Plan, Revised March 2020 https://beta.sam.gov/opp/ffae243ffd6c46b6a9ad6130909b0514/view

USAID ReMEG Activity

2. Zambia Revenue Authority, Interim Tax Revenue Performance Report 2020

3. Zambia Revenue Authority, Covid-19 Tax Policy and Other Measures

4. Ministry of Finance, draft Public Financial Management Reform Strategy

5. Ministry of Finance, Zambia Tax Expenditure Study, December 2018

6. Ministry of Finance, Marginal Effective Tax Rate Study, December 2018

7. Ministry of Finance, Tax Gap Study, December 2018

[END OF SECTION C]

USAID ReMEG Activity

SECTION D – PACKAGING AND MARKING

D.1 AIDAR 752.7009 MARKING (JAN 1993)

(a) It is USAID policy that USAID-financed commodities and shipping containers, and program construction sites and other program locations be suitably marked with the USAID emblem. Shipping containers are also to be marked with the last five digits of the USAID financing document number. As a general rule, marking is not required for raw materials shipped in bulk (such as coal, grain, etc.), or for semi-finished products which are not packaged.

(b) Specific guidance on marking requirements should be obtained prior to procurement of commodities to be shipped, and as early as possible for program construction sites and other program locations. This guidance will be provided through the cognizant technical office indicated on the cover page of this Contract, or by the Mission Director in the cooperating country to which commodities are being shipped, or in which the program site is located.

(c) Authority to waive marking requirements is vested with the Regional Assistant

Administrators, and with Mission Directors.

(d) A copy of any specific marking instructions or waivers from marking requirements is to be sent to the Contracting Officer; the original should be retained by the Contractor.

D.2 BRANDING AND MARKING POLICY

(a) USAID policy on the branding and marking of the work products of this contract is contained in the USAID Automated Directive System (ADS) Chapter 320. The Branding and

Marking Implementation Plan communicates to beneficiaries and stakeholder audiences that the work of this contract is from the American people. Requested exceptions to ADS Chapter 320 requirements, shall be included in the Branding and Marking Implementation Plan. (PROJECT

NAME) activities will adhere to USAID branding and marking guidance in the USAID Graphic

Standards Manual and Partner Co-branding Guide and available at:

http://www.usaid.gov/branding.

(b) The Contractor must develop a Branding Implementation Plan (BIP) and Marking Plan

(MP) for the contract to describe how program deliverables shall be branded. The BIP will implement USAID branding strategy for the USAID Enterprise Development and Growth

Enhanced Activity:

Activity Name: “USAID/Zambia’s Revenue Mobilization for Equity and Growth (ReMEG)”

Branding: The branding will incorporate the message that the assistance is “From the

American People through USAID.”

Desired Level of Visibility: High. USAID identity must be prominently displayed in the following: commodities or equipment, printed, audio, or electronic public communications; studies, reports, publications, web sites, and all promotional and informational products; and at all events.

http://www.usaid.gov/branding

USAID ReMEG Activity

Organizations to be acknowledged: With concurrence from the USAID/Zambia’s

De…