72061221R00010 Regulatory Impact Assessment.pdf

SEE ADDENDUMIS CHECKED

CODE 18a. PAYMENT WILL BE MADE BY

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FACILITYCODE

17b. CHECK IF REMITTANCE IS DIFFERENT AND PUT SUCH ADDRESS IN OFFER

OFFEROR

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541611

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% FOR:SET ASIDE:UNRESTRICTED OR720612

RFPIFB

10. THIS ACQUISITION ISCODE

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14. METHOD OF SOLICITATION

13b. RATING

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SMALL BUSINESS

09/30/2021 1400 B

09/10/2021

Clement Manda (No collect calls)

INFORMATION CALL:

FOR SOLICITATION 8. OFFER DUE DATE/LOCAL TIMEb. TELEPHONE NUMBER a. NAME

4. ORDER NUMBER3. AWARD/ 6. SOLICITATION

72061221R00010

5. SOLICITATION NUMBER

SOLICITATION/CONTRACT/ORDER FOR COMMERCIAL ITEMS 1. REQUISITION NUMBER PAGE OF

1 35 OFFEROR TO COMPLETE BLOCKS 12, 17, 23, 24, & 30

TELEPHONE NO.

17a. CONTRACTOR/

15. DELIVER TO

Lilongwe 3, Malawi P O Box 30455 NICO House, Cicentre USAID/Malawi

9. ISSUED BY

7.

2. CONTRACT NO.

EFFECTIVE DATE

$16.50

18b. SUBMIT INVOICES TO ADDRESS SHOWN IN BLOCK 18a UNLESS BLOCK BELOW

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DELIVERY FOR FOB DESTINA-

TION UNLESS BLOCK IS

MARKED

11.

SEE SCHEDULE

12. DISCOUNT TERMS

THIS CONTRACT IS A

RATED ORDER UNDER

DPAS (15 CFR 700)

13a.

SERVICE-DISABLED

VETERAN-OWNED

SMALL BUSINESS

HUBZONE SMALL

BUSINESS

8(A)

The Executive Office

WOMEN-OWNED SMALL BUSINESS

(WOSB) ELIGIBLE UNDER THE WOMEN-OWNED

SMALL BUSINESS PROGRAM

EDWOSB

24.

AMOUNT

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UNIT PRICE

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UNIT

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QUANTITY

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SCHEDULE OF SUPPLIES/SERVICES

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ITEM NO.

(Use Reverse and/or Attach Additional Sheets as Necessary)

HEREIN, IS ACCEPTED AS TO ITEMS:

DATED

Patrick Phillips

. YOUR OFFER ON SOLICITATION (BLOCK 5),

INCLUDING ANY ADDITIONS OR CHANGES WHICH ARE SET FORTH

COPIES TO ISSUING OFFICE. CONTRACTOR AGREES TO FURNISH AND DELIVER

ARE

ARE

31c. DATE SIGNED

27b. CONTRACT/PURCHASE ORDER INCORPORATES BY REFERENCE FAR 52.212-4. FAR 52.212-5 IS ATTACHED. ADDENDA

31a. UNITED STATES OF AMERICA (SIGNATURE OF CONTRACTING OFFICER)

30c. DATE SIGNED 31b. NAME OF CONTRACTING OFFICER (Type or print)

ALL ITEMS SET FORTH OR OTHERWISE IDENTIFIED ABOVE AND ON ANY ADDITIONAL

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OFFER

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30b. NAME AND TITLE OF SIGNER (Type or print)

30a. SIGNATURE OF OFFEROR/CONTRACTOR

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25. ACCOUNTING AND APPROPRIATION DATA

29. AWARD OF CONTRACT:

REF.

32e. MAILING ADDRESS OF AUTHORIZED GOVERNMENT REPRESENTATIVE

32c. DATE 32b. SIGNATURE OF AUTHORIZED GOVERNMENT REPRESENTATIVE

ACCEPTED, AND CONFORMS TO THE CONTRACT, EXCEPT AS NOTED:

32a. QUANTITY IN COLUMN 21 HAS BEEN

RECEIVED INSPECTED

40. PAID BY39. S/R VOUCHER NUMBER38. S/R ACCOUNT NUMBER

37. CHECK NUMBER

FINALPARTIAL

36. PAYMENT

FINALPARTIAL

35. AMOUNT VERIFIED

CORRECT FOR

34. VOUCHER NUMBER33. SHIP NUMBER

COMPLETE

32g. E-MAIL OF AUTHORIZED GOVERNMENT REPRESENTATIVE

42d. TOTAL CONTAINERS42c. DATE REC'D (YY/MM/DD)

42b. RECEIVED AT (Location)

42a. RECEIVED BY (Print)

41c. DATE41b. SIGNATURE AND TITLE OF CERTIFYING OFFICER

41a. I CERTIFY THIS ACCOUNT IS CORRECT AND PROPER FOR PAYMENT

STANDARD FORM 1449 (REV. 2/2012) BACK

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32f. TELEPHONE NUMBER OF AUTHORIZED GOVERNMENT REPRESENTATIVE

32d. PRINTED NAME AND TITLE OF AUTHORIZED GOVERNMENT REPRESENTATIVE

35 2 of

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A - Solicitation/Contract Form B - Supplies or Services/Prices C - Description/Specifications D - Packaging and Marking E - Inspection and Acceptance F - Deliveries or Performance G - Contract Administration Data H - Special Contract Requirements I - Contract Clauses J - List of Documents, Exhibits and Other Attachments K - Representations, Certifications, and Other Statements of Bidders L - Instructions,Conditions, and Notices to Bidders M - Evaluation Factors for Award

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A - Solicitation/Contract Form

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B - Supplies or Services/Prices

B.1 PURPOSE

The purpose of this contract (purchase order) is to engage a consultant to carry out a rapid (ex-post) Regulatory Impact Assessment of the Export Mandate for a period of three (3) months. USAID within the context of supporting the GoM to make evidence-based policies and regulations that will lead a stable and predictable business environment; The assessment will fully consider the likely impacts of this regulation on businesses, smallholder farmers and their associations or cooperatives and government revenues and costs. The ultimate objective is to provide the GoM with recommendations on how to regulate trade in a way that it helps achieve its public policy goals while enhancing good governance, accountability and transparency and promoting market led growth, trade and investment.

B.2 CONTRACT TYPE

This purchase order is a firm fixed-price (FFP) contract. Contractor is required to provide consultancy services stated herein and as set forth in the purchase order at prices consistent with Section B of this contract.

B.3 CONTRACT CEILING

(a) The estimated cost for the performance of the work required is US$ xxxxxxx.

(b) Within the estimated cost specified in paragraph (a) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the Contractor for performance hereunder is US$ xxxxx. The Contractor shall not exceed the aforesaid obligated amount.

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2.0 TERMS OF PAYMENT

The contract ceiling is $XXXX____ and the offeror must provide a detailed budget/cost estimate with the proposal.

Illustrative cost breakdown below:

Item Details Hours Rate per hr.

(US$)

Amount

1 Economist 300 2 Legal Expert 300 3 Stakeholder Engagement Specialist 300

Total Staffing costs 4 Other direct costs (mobilization, communications, meeting room rentals)

Total

(End of Section B)

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C - Description/Specifications

Terms of Reference for a (ex-post) Regulatory Impact Assessment (RIA) of the Export Mandate in Malawi under the Control of Goods Act

1. Introduction The Government of Malawi (GoM) enacted a new Control of Goods (COGA) in June 2018 which became effective in July 2020. The COGA 2018 effectively repealed the Control of Goods Act that was enacted in 1968.1 The main departure of this new Act from the old one is the introduction of transparency and predictability mechanisms. To ensure transparency, the new COGA (2018) and its Public Interest Grounds Threshold (2020) regulation require the Ministry of Trade to consult interested parties before making any new regulations or determination and to publish a notice for consultations for not less than 30 days, within which interested parties may make representations. To ensure predictability, the law provides specific public interest grounds that serve as trigger points for the Ministry of Trade to intervene in the sector. Before putting controls in place, the Ministry must demonstrate to relevant authorities that the thresholds to impose controls or new regulations have been reached as well as the required measures have been taken. On June 4th, 2021, the Ministry of Trade in Malawi published in the Gazette a new Regulation establishing an Export Mandate citing the authority of COGA 2018.

The Mandate requires that all trading of commodities be done exclusively through Licensed Commodity Exchanges and covers the following eight (8) commodities:

1. Groundnuts;

2. Pigeon peas including toor dhall (processed pigeon peas);

3. Soybeans including soybean cake, soy pieces, and soy meal

4. Beans;

5. Cowpeas;

6. Sunflower, including sunflower cake;

7. Rice, including rice bran, rice meal and rice residues;

8. Maize, including dry maize on or off the cob, maize bran, crushed maize, samp, maize grits, maize cones, hominy chop, maize offals or processed maize meal with or without additives.

Although as of now the rules for application, fees, receipt and certification of commodities are yet to be published, Section 5 of the regulation gives the Commodities the authority to make these rules. The regulation specifically states:

Commodity Exchange to Make Rules (Export Mandate, Regulation 5):

1. A licensed commodity exchange shall make rules on the:

a. Receipt and facilitation of export of grains, legumes and oil seeds listed in the Schedule hereto

1 Section 16 of the Control of Goods Act, 1968.

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b. Fees payable for the traded listed grains, legumes and oil seeds, on the commodity exchange; and

c. Certification of trade of the listed grains and legumes outside the commodity exchange.

2. Background The GoM has justified the need to pass the Export Mandate regulation in part, based on the need to replace the loss of revenue and foreign exchange that used to be generated through the export of tobacco. Global demand for tobacco has decreased significantly in the past 20 years forcing the government to seek for alternative revenue source and to diversify the sources of agriculture sector revenue. The GoM is also concerned that informal (illegal) cross-border trade of commodities results in significant loss of government revenue. As for the rationale for the use of commodity exchanges to implement the mandate, the GoM argues that it will facilitate the collection of export proceeds, will ease data tracking and dissemination and that it can provide structured markets to farmers.

Currently, the Ministry of Trade has mechanisms it can use to enforce remittances of proceeds such as the Reserve Bank of Malawi Exchange Control Act of 2005 and the Import and Export License Regulations of the COGA 2018. However, there is not sufficient enforcement of licenses or permits at the borders. The export licenses for agriculture commodities are valid only for 6 months, which can provide the government opportunity to collect export data every crop season. The potential of these mechanisms and the level of effort needed to improve revenue and data collection needs to be further understood.

The International Food and Policy Research Institute (IFPRI) prepared a paper in August 2017 on The Case of Commodity Exchanges in Malawi arguing that Commodity Exchanges can be a way to promote structured markets –namely an organized and formal place where farmers, traders, processors, banks and others enter into regulated trading and financial arrangements. The paper also argued that these Commodity Exchanges could be used to implement Export Mandates and that export mandates could increase volume, reduce revenue losses, and provide farmers access to structured markets2. IFPRI on that same paper highlights the disadvantages or risks of placing export mandates. It argued that just like the marketing boards of the 1980s the commodity exchanges could limit competition and give exchanges monopsony power. Moreover, commodities may need to be transported longer distances domestically to get to the commodity exchange and potentially back to the exporter. Export mandates could increase informal market activities, as more actors would want to circumvent fees and extra costs.

The African Institute of Corporate Citizenship (AICC) argues that conceptually Warehouse Receipt System (WRS) set up through commodity exchanges works well in an environment characterized by a vibrant financial system, good infrastructure, the availability and integrity of public warehouses in rural areas, low interest rates, short turn-over period and

2 IFPRI (2020). The Case for and Against Export Mandates for Oilseeds and Pulses. Draft Discussion Paper

Solicitation 72061221R00010 9 | P a g e volumes of commodities deposited and traded. Those conditions unfortunately are not present in Malawi. AICC noted that the two commodity exchanges in Malawi (ACE and ACHX) have never been able to self-sustain financially and have since their inception been subsidized by development partners and the government. ACHX even had its offices sealed by the court in 2016 for failing to honor a court’s order to pay a contracted buyer.

Although the court case is ongoing, the AICC notes that if forced to pay, most likely it will be GoM making the payment. As of July 8th, 2021, Auction Holdings Ltd announced it was closing ACHX (one of its subsidiaries).

Massive financial investments have been made by donors and government on these institutions and the reality is that the outcome so far is not congruent with the investments.

AICC notes that there is a decreasing marginal return for each dollar invested in the commodity exchanges. The limited success of all previous efforts aimed at improving the performance of the CX should be considered within the context of implementation of this Mandate.

IFPRI more recently prepared a draft discussion paper on the “The Case for and Against Export Mandates for Oilseeds and Pulses”. Among the concerns and risks are:

1. Export mandates may be less effective without development of market-based incentives to encourage trade via the commodity exchanges, which face high liquidity-constrains.

2. The limited geographic reach of the commodity exchanges, especially in terms of their warehouse networks, will slow the participation of small farmers in structured markets. In the absence of collectivized marketing mechanisms, most small farmers in Malawi face high transfer costs and are also deterred by high warehousing fees;

all of which may increase rather than reduce informal trade.

3. Given Malawi’s relatively long and porous borders and the well-established nature of the informal cross-border trade, successful implementation of export mandates will require robust and cost-effective trade monitoring and enforcement mechanisms.

4. Most of the commodities selected for export mandates by the Ministry of Trade have largely informal and fragmented value chains, and thus simply implementing the Export Mandate does not address the risks and challenges for farmers and small traders that emanate from the fragmented value chains.

Since the Export Mandate was published in the Gazette, small and large-scale private sector actors and civil society organizations have voiced their opposition to the Mandate citing of several concerns:

1. The GoM did not follow the legally required procedures such as consultation with stakeholders as required by the 2018 Control of Goods Act, Section 6 (1) which requires a 30-day formal consultation. There was some limited consultation with

Solicitation 72061221R00010 10 | P a g e the Grain Association of Malawi, but their feedback and comments apparently were not incorporated. There was also no assessment of the costs of enforcement of such mandate, the potential benefits in terms of revenue collection, costs in terms of administration and enforcement and the impact on businesses, investment, and trade.

2. The Mandate will be implemented through the Commodity Exchanges. The commodity exchanges have a high-cost structure, limited financial and operational capacity, limited presence in rural areas and dependency on donor and government funding for their survival limiting the potential for structure markets development. Moreover, the Commodity Exchanges make the rules, raising questions about proper oversight, transparency, fairness, transaction approval timelines and competition. No process has been announced where impacted parties can provide feedback or be consulted on the development of rules or a recourse in case of misapplication or denial. Furthermore, there is concern that some grain traders and processors are shareholders of ACE and that confidential information from the other traders, market contacts, terms of trade, etc. could be leaked or shared with shareholders.

3. The Mandate will regulate the firms that operate in the formal sector, and that already declare and remit export proceeds under the Reserve Bank of Malawi Exchange Control Act of 2005. Malawi also has an import and export permitting system that could be modernized and streamlined. An analysis of the mechanisms of this system and its performance in terms of revenue collection as well as enforcement and expenditure to curtail illegal trade will help understand the current situation and identify the potential improvements. Although the Export Mandate R.7 has a 20 million Kwacha penalty for non-compliance ($25,000 USD), no plan has been announced to enforce the large informal sector with the thousands of small/mid-size traders that engage in informal and illegal cross border trading.

4. ACE is the only licensed Commodity Exchange in Malawi. Although there is no explicit restriction as to the number of commodity exchanges that can be established, the regulatory requirements are restrictive. Specifically, the financial services Regulation of Commodities Exchanges Directive 2018 defines a commodity exchange as a Financial Institution and Securities Market Player and imposes strict capital requirements, long bureaucratic processes, and costs to comply with the regulation. The application alone is 10 million Kwacha ($12,200 USD) and Directive 17 prohibits self-dealing, which makes it impossible for any other agribusiness with a vertically integrated value chain to become a commodity exchange:

3. Objective

Within the context of supporting the GoM to make evidence-based policies and regulations that will lead a stable and predictable business environment; USAID seeks a consultant to carry out a rapid (ex-post) Regulatory Impact Assessment of the Export Mandate. The assessment will fully consider the likely impacts of this

Solicitation 72061221R00010 11 | P a g e regulation on businesses, smallholder farmers and their associations or cooperatives and government revenues and costs. The ultimate objective is to provide the GoM with recommendations on how to regulate trade in a way that it helps achieve its public policy goals while enhancing good governance, accountability and transparency and promoting market led growth, trade and investment.

4. Scope of Work Specific tasks of this consultancy include:

1. Develop tools and templates to be used to carry out the RIA based on international leading practices.

2. Consultations and stakeholder engagement: Consultant will engage with a wide range of stakeholders that could be potentially affected by the Export Mandate as well as experts and/or other donors.

3. Engagement with the Ministry of Trade, Ministry of Agriculture, Reserve Bank of Malawi and relevant Government agencies to clearly understand the nature of the problem and the goals and objectives of the regulatory proposal as well as proposed enforcement regime and strategy to ensure compliance. This engagement should help Consultant answer the following questions:

(i) What are the intended outcomes? What will change as a result of intervention?

(ii) Can the objectives / outcomes be described in a SMART (or similar) way?

(iii) What will the indicators of success be?

(iv) Does the approach to implementation enable sufficient flexibility and scope for experimentation or piloting?

4. Assessment of existing regulatory framework including the current Export Mandate, the Reserve Bank of Malawi Exchange Control Act of 2005, the Import and Export License Regulations of the COGA 2018 and any other relevant trade regulation. Assess the capacities of the institutions responsible for implementing and enforcing the regulations.

5. Collect and analyze data to carry out cost benefit analyses that consider the impacts of regulation including the distributional effects identifying who is likely to benefit and who is likely to bear costs. The analyses should include administrative burdens and costs of enforcement, opportunity costs to businesses and appropriate sensitive analysis and/or other analytical approaches to risk and uncertainty.

Identification of alternatives: List the practical alternatives, including any non-regulatory approaches considered as potential solution of the identified problem. Under alternatives Consultant should include regulatory and non-regulatory options, consider international comparisons and practices and how would the options deliver the desired outcomes.

(End of Section C)

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D - Packaging and Marking

Packaging and Marking is not applicable on this service.

[END OF SECTION D]

E - Inspection and Acceptance

Inspection and acceptance under this purchase order shall be in accordance with FAR 52.212-4 “Contract Terms and Conditions – Commercial Items”. This shall be done by the Contracting Officer’s Representative (COR) at the following location.

USAID/Malawi Plot #: 19/37 Convention Drive NICO House, City Centre P.O. Box 30455, Lilongwe 3, Malawi

The Contractor shall only tender for acceptance those items that conform to the requirements of this contract. The Government reserves the right to inspect or test any supplies or services that have been tendered for acceptance. The Government may require repair or replacement of nonconforming supplies or re-performance of nonconforming services at no increase in contract price. If repair/replacement or re-performance will not correct the defects or is not possible, the Government may seek an equitable price reduction or adequate consideration for acceptance of nonconforming supplies or services. The Government must exercise its post acceptance rights (1) within a reasonable time after the defect was discovered or should have been discovered; and (2) before any substantial change occurs in the condition of the item, unless the change is due to the defect in the item.

[END OF SECTION E]

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F - Deliveries or Performance

F1. Contract period

The consultancy services are required for a period of three (3) months (from approximately October__ , 2021 through January_, 2022).

F2. DELIVERABLES SCHEDULE

(i) Updated methodology, workplan with tools and templates to be used in consultancy

(ii) Draft report with preliminary assessment

(iii)Final report

G - Contract Administration Data

G.1. CONTRACTING OFFICER (CO) AND HIS AUTHORITY

(a) The Contracting Officer (CO) for this contract is:

Shawn Phillips Supervisory Executive Officer USAID/Malawi NICO House, City Center P O Box 30455, Lilongwe 3 Malawi

(b) The Contracting Officer is the only person authorized to make or approve any changes in the requirements of the contract and notwithstanding any provisions contained elsewhere in the contract, the said authority remains solely with the Contracting Officer. In the event the Contractor makes any changes at the direction of any person other than the Contracting Officer, the change will be considered to have been made without authority and no adjustment will be made in the contract terms and conditions, including cost.

G.2. CONTRACTING OFFICER’S REPRESENTATIVE (COR)

USAID/Malawi’s Executive Office will provide technical oversight to the contract through the designated Contracting Officer’s Representative (COR). The Contracting Officer will issue a letter designating a COR for the contract and will provide a copy of the designation letter to the Contractor. The COR is based at the office and address provided below:

(To be provided during award)

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G.3. INVOICES, ACCEPTANCE AND APPROVAL

(a) In order to receive payment, deliverables must be accepted and approved by the Contracting Officer’s Representative (COR). This is subject to full completion and acceptance of the construction works as required under this purchase order.

G.4 CONTRACTOR’S POINT OF CONTACT

The contractor appoints the following as the primary point of contact:

(To be provide during award)

G.5 PAYING OFFICE

The paying office under the purchase order is USAID Malawi, Financial Management Office on the address stated below.

Office of Financial Management (OFM) USAID Malawi NICO House, Ground Floor P.O. Box 30455 Lilongwe 3, Malawi

Electronic submission must be sent to the paying office at the following email address:

lilongwevoucher@usaid.gov

G.6. ACCOUNTING AND APPROPRIATION DATA

GLAAS Requisition Numbers:

REQ-612-21-000xxx - Fixed Amount Funding: US$xxxx

52.201-70 CONTRACTING OFFICER’S REPRESENTATIVE (COR)

APPOINTMENT AND AUTHORITY (APR 2015)

(a) The COR – (to be provided during award) is named in section G2 above and through a separate appointment letter. Should a change to the COR(s) be necessary in the future, they will be named on the modification SF-30.

(b) Performance of work under this contract is subject to the technical direction of the COR identified above, or a representative designated in writing. The term “technical direction” includes, without limitation, direction to the contractor that mailto:lilongwevoucher@usaid.gov

Solicitation 72061221R00010 15 | P a g e directs or redirects the labor effort, shifts the work between work areas or locations, and/or fills in details and otherwise serves to ensure that tasks outlined in the work statement are accomplished satisfactorily.

(c) Technical direction must be within the scope of the contract specification(s)/work statement. The COR does not have authority to issue technical direction that:

(1) Constitutes a change of assignment or additional work outside the contract specification(s)/work statement;

(2) Constitutes a change as defined in the clause entitled “Changes”;

(3) In any manner causes an increase or decrease in the contract price, or the time required for contract performance;

(4) Changes any of the terms, conditions, or specification(s)/work statement of the contract;

(5) Interferes with the contractor's right to perform under the terms and conditions of the contract; or

(6) Directs, supervises or otherwise controls the actions of the contractor's employees.

(d) Technical direction may be oral or in writing. The COR must confirm oral direction in writing within five workdays, with a copy to the Contracting Officer.

(e) The Contractor shall proceed promptly with performance resulting from the technical direction issued by the COR. If, in the opinion of the contractor, any direction of the COR or the designated representative falls within the limitations of

(c) above, the contractor shall immediately notify the Contracting Officer no later than the beginning of the next Government workday.

(f) Failure of the Contractor and the Contracting Officer to agree that technical direction is within the scope of the contract shall be subject to the terms of the clause entitled “Disputes.”

[END OF SECTION G]

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H - Special Contract Requirements

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[END OF SECTION H]

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I - Contract Clauses

52.212-4 Contract Terms and Conditions - Commercial Items. (OCT 2018)

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders - Commercial Items. (JAN 2021)

(a) The Contractor shall comply with the following Federal Acquisition Regulation (FAR) clauses, which are incorporated in this contract by reference, to implement provisions of law or Executive orders applicable to acquisitions of commercial items:

(1) 52.203-19, Prohibition on Requiring Certain Internal Confidentiality Agreements or Statements (JAN 2017) (section 743 of Division E, Title VII, of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) and its successor provisions in subsequent appropriations acts (and as extended in continuing resolutions)).

(2) 52.204-23, Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab and Other Covered Entities (JUL 2018) (Section 1634 of Pub. L. 115-91).

(3) 52.204-25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment. (AUG 2020) (Section 889(a)(1)(A) of Pub. L. 115-232).

(4) 52.209-10, Prohibition on Contracting with Inverted Domestic Corporations (NOV 2015).

(5) 52.233-3, Protest After Award (AUG 1996) (31 U.S.C. 3553).

(6) 52.233-4, Applicable Law for Breach of Contract Claim (OCT 2004) (Public Laws 108-77 and 108-78 (19 U.S.C. 3805 note)).

(b) The Contractor shall comply with the FAR clauses in this paragraph (b) that the Contracting Officer has indicated as being incorporated in this contract by reference to implement provisions of law or Executive orders applicable to acquisitions of commercial items: (Contracting Officer check as appropriate.)

[X ] (1) 52.203-6, Restrictions on Subcontractor Sales to the Government (JUN 2020), with Alternate I (OCT 1995) (41 U.S.C. 4704 and 10 U.S.C.

2402).

[ X] (2) 52.203-13, Contractor Code of Business Ethics and Conduct (JUN 2020) (41 U.S.C. 3509).

[ ] (3) 52.203-15, Whistleblower Protections under the American Recovery and Reinvestment Act of 2009 (JUN 2010) (Section 1553 of

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Pub. L. 111-5). (Applies to contracts funded by the American Recovery and Reinvestment Act of 2009.)

[ ] (4) 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards (JUN 2020) (Pub. L. 109-282) (31 U.S.C. 6101 note).

(5) (Reserved)

[ ] (6) 52.204-14, Service Contract Reporting Requirements (OCT 2016) (Pub. L. 111-117, section 743 of Div. C).

[ ] (7) 52.204-15, Service Contract Reporting Requirements for Indefinite- Delivery Contracts (OCT 2016) (Pub. L. 111-117, section 743 of Div. C).

[X ] (8) 52.209-6, Protecting the Government's Interest When Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment. (JUN 2020) (31 U.S.C. 6101 note).

[ ] (9) 52.209-9, Updates of Publicly Available Information Regarding Responsibility Matters (OCT 2018) (41 U.S.C. 2313).

[ ] (10) (Reserved)

[ ] (11)(i) 52.219-3, Notice of HUBZone Set-Aside or Sole Source Award (MAR 2020) (15 U.S.C. 657a).

[ ] (ii) Alternate I (MAR 2020) of 52.219-3.

[ ] (12)(i) 52.219-4, Notice of Price Evaluation Preference for HUBZone Small Business Concerns (MAR 2020) (if the offeror elects to waive the preference, it shall so indicate in its offer) (15 U.S.C. 657a).

[ ] (ii) Alternate I (MAR 2020) of 52.219-4.

[ ] (13) (Reserved)

[ ] (14)(i) 52.219-6, Notice of Total Small Business Set-Aside (NOV 2020) (15 U.S.C. 644).

[ ] (ii) Alternate I (MAR 2020) of 52.219-6.

[ ] (15)(i) 52.219-7, Notice of Partial Small Business Set-Aside (NOV 2020) (15 U.S.C. 644).

[ ] (ii) Alternate I (MAR 2020) of 52.219-7.

[ ] (16) 52.219-8, Utilization of Small Business Concerns (OCT 2018) (15 U.S.C. 637(d)(2) and (3)).

[ ] (17)(i) 52.219-9, Small Business Subcontracting Plan (JUN 2020) (15 U.S.C. 637(d)(4)).

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[ ] (ii) Alternate I (NOV 2016) of 52.219-9.

[ ] (iii) Alternate II (NOV 2016) of 52.219-9.

[ ] (iv) Alternate III (JUN 2020) of 52.219-9.

[ ] (v) Alternate IV (JUN 2020) of 52.219-9.

[ ] (18)(i) 52.219-13, Notice of Set-Aside of Orders (MAR 2020) (15 U.S.C. 644(r)).

[ ] (ii) Alternate I (MAR 2020) of 52.219-13.

[ ] (19) 52.219-14, Limitations on Subcontracting (MAR 2020) (15 U.S.C.

637(a)(14)).

[ ] (20) 52.219-16, Liquidated Damages-Subcontracting Plan (JAN 1999) (15 U.S.C. 637(d)(4)(F)(i)).

[ ] (21) 52.219-27, Notice of Service-Disabled Veteran-Owned Small Business Set-Aside (MAR 2020) (15 U.S.C. 657f).

[ ] (22)(i) 52.219-28, Post-Award Small Business Program Rerepresentation (NOV 2020) (15 U.S.C. 632(a)(2)).

[ ] (ii) Alternate I (MAR 2020) of 52.219-28.

[ ] (23) 52.219-29, Notice of Set-Aside for, or Sole Source Award to, Economically Disadvantaged Women-Owned Small Business (EDWOSB) Concerns (MAR 2020) (15 U.S.C. 637(m)).

[ ] (24) 52.219-30, Notice of Set-Aside for, or Sole Source Award to, Women-Owned Small Business Concerns Eligible Under the Women- Owned Small Business Program (MAR 2020) (15 U.S.C. 637(m)).

[ ] (25) 52.219-32, Orders Issued Directly Under Small Business Reserves (MAR 2020) (15 U.S.C. 644(r)).

[ ] (26) 52.219-33, Nonmanufacturer Rule (MAR 2020) (15 U.S.C.

637(a)(17)).

[ ] (27) 52.222-3, Convict Labor (JUN 2003) (E.O. 11755).

[ ] (28) 52.222-19, Child Labor-Cooperation with Authorities and Remedies (JAN 2020) (E.O. 13126).

[ ] (29) 52.222-21, Prohibition of Segregated Facilities (APR 2015).

[ ] (30)(i) 52.222-26, Equal Opportunity (SEP 2016) (E.O. 11246).

[ ] (ii) Alternate I (FEB 1999) of 52.222-26.

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[ ] (31)(i) 52.222-35, Equal Opportunity for Veterans (JUN 2020) (38 U.S.C. 4212).

[ ] (ii) Alternate I (JUL 2014) of 52.222-35.

[ ] (32)(i) 52.222-36, Equal Opportunity for Workers with Disabilities

(JUN 2020) (29 U.S.C. 793).

[ ] (ii) Alternate I (JUL 2014) of 52.222-36.

[ ] (33) 52.222-37, Employment Reports on Veterans (JUN 2020) (38 U.S.C. 4212).

[ ] (34) 52.222-40, Notification of Employee Rights Under the National Labor Relations Act (DEC 2010) (E.O. 13496).

[X ] (35)(i) 52.222-50, Combating Trafficking in Persons (OCT 2020) (22 U.S.C. chapter 78 and E.O. 13627).

[ ] (ii) Alternate I (MAR 2015) of 52.222-50 (22 U.S.C. chapter 78 and E.O. 13627).

[ ] (36) 52.222-54, Employment Eligibility Verification (OCT 2015). (E.

O. 12989). (Not applicable to the acquisition of commercially available off-the-shelf items or certain other types of commercial items as prescribed in 22.1803.)

[ ] (37)(i) 52.223-9, Estimate of Percentage of Recovered Material Content for EPA-Designated Items (MAY 2008) (42 U.S.C. 6962(c)(3)(A)(ii)).

(Not applicable to the acquisition of commercially available off-the-shelf items.)

[ ] (ii) Alternate I (MAY 2008) of 52.223-9 (42 U.S.C.

6962(i)(2)(C)). (Not applicable to the acquisition of commercially available off-the-shelf items.)

[ ] (38) 52.223-11, Ozone-Depleting Substances and High Global Warming Potential Hydrofluorocarbons (JUN 2016) (E.O. 13693).

[ ] (39) 52.223-12, Maintenance, Service, Repair, or Disposal of Refrigeration Equipment and Air Conditioners (JUN 2016) (E.O. 13693).

[ ] (40)(i) 52.223-13, Acquisition of EPEAT®-Registered Imaging Equipment (JUN 2014) (E.O.s 13423 and 13514).

[ ] (ii) Alternate I (OCT 2015) of 52.223-13.

[ ] (41)(i) 52.223-14, Acquisition of EPEAT®-Registered Televisions (JUN 2014) (E.O.s 13423 and 13514).

(ii) Alternate I (JUN 2014) of 52.223-14.

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[ ] (42) 52.223-15, Energy Efficiency in Energy-Consuming Products (MAY 2020) (42 U.S.C. 8259b).

[ ] (43)(i) 52.223-16, Acquisition of EPEAT®-Registered Personal Computer Products (OCT 2015) (E.O.s 13423 and 13514).

[ ] (ii) Alternate I (JUN 2014) of 52.223-16.

[ X] (44) 52.223-18, Encouraging Contractor Policies to Ban Text Messaging While Driving (JUN 2020) (E.O. 13513).

[ ] (45) 52.223-20, Aerosols (JUN 2016) (E.O. 13693).

[ ] (46) 52.223-21, Foams (JUN 2016) (E.O. 13693).

[ ] (47)(i) 52.224-3, Privacy Training (JAN 2017) (5 U.S.C. 552a).

[ ] (ii) Alternate I (JAN 2017) of 52.224-3.

[ ] (48) 52.225-1, Buy American-Supplies (JAN 2021) (41 U.S.C. chapter 83).

[ ] (49)(i) 52.225-3, Buy American-Free Trade Agreements-Israeli Trade Act (JAN 2021) (41 U.S.C. chapter 83, 19 U.S.C. 3301 note, 19 U.S.C.

2112 note, 19 U.S.C. 3805 note, 19 U.S.C. 4001 note, Pub. L. 103-182, 108-77, 108-78, 108-286, 108-302, 109-53, 109-169, 109-283, 110-138, 112-41, 112-42, and 112-43.

[ ] (ii) Alternate I (JAN 2021) of 52.225-3.

[ ] (iii) Alternate II (JAN 2021) of 52.225-3.

[ ] (iv) Alternate III (JAN 2021) of 52.225-3.

[ ] (50) 52.225-5, Trade Agreements (OCT 2019) (19 U.S.C. 2501, et seq., 19 U.S.C. 3301 note).

[X ] (51) 52.225-13, Restrictions on Certain Foreign Purchases (JUN 2008) (E.O.'s, proclamations, and statutes administered by the Office of Foreign Assets Control of the Department of the Treasury).

[ ] (52) 52.225-26, Contractors Performing Private Security Functions Outside the United States (OCT 2016) (Section 862, as amended, of the National Defense Authorization Act for Fiscal Year 2008; 10 U.S.C. 2302 Note).

[ ] (53) 52.226-4, Notice of Disaster or Emergency Area Set-Aside (NOV 2007) (42 U.S.C. 5150).

[ ] (54) 52.226-5, Restrictions on Subcontracting Outside Disaster or Emergency Area (NOV 2007) (42 U.S.C. 5150).

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[ ] (55) 52.229-12, Tax on Certain Foreign Procurements (JUN 2020).

[ X] (56) 52.232-29, Terms for Financing of Purchases of Commercial Items (FEB 2002) (41 U.S.C. 4505, 10 U.S.C. 2307(f)).

[ ] (57) 52.232-30, Installment Payments for Commercial Items (JAN 2017) (41 U.S.C. 4505, 10 U.S.C. 2307(f)).

[X ] (58) 52.232-33, Payment by Electronic Funds Transfer-System for Award Management (OCT 2018) (31 U.S.C. 3332).

[ ] (59) 52.232-34, Payment by Electronic Funds Transfer - Other than System for Award Management (JUL 2013) (31 U.S.C. 3332).

[ ] (60) 52.232-36, Payment by Third Party (MAY 2014) (31 U.S.C.

3332).

[ ] (61) 52.239-1, Privacy or Security Safeguards (AUG 1996) (5 U.S.C.

552a).

[ ] (62) 52.242-5, Payments to Small Business Subcontractors (JAN 2017)(15 U.S.C. 637(d)(13)).

[ ] (63)(i) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (FEB 2006) (46 U.S.C. Appx. 1241(b) and 10 U.S.C.

2631).

[ ] (ii) Alternate I (APR 2003) of 52.247-64.

[ ] (iii) Alternate II (FEB 2006) of 52.247-64.

(c) The Contractor shall comply with the FAR clauses in this paragraph (c), applicable to commercial services, that the Contracting Officer has indicated as being incorporated in this contract by reference to implement provisions of law or Executive orders applicable to acquisitions of commercial items: (Contracting Officer check as appropriate.)

[X ] (1) 52.222-41, Service Contract Labor Standards (AUG 2018) (41 U.S.C. chapter 67).

[ ] (2) 52.222-42, Statement of Equivalent Rates for Federal Hires (MAY 2014) (29 U.S.C. 206 and 41 U.S.C. chapter 67).

[ ] (3) 52.222-43, Fair Labor Standards Act and Service Contract Labor Standards-Price Adjustment (Multiple Year and Option Contracts) (AUG 2018) (29 U.S.C. 206 and 41 U.S.C. chapter 67).

[ ] (4) 52.222-44, Fair Labor Standards Act and Service Contract Labor Standards-Price Adjustment (MAY 2014) (29 U.S.C 206 and 41 U.S.C.

chapter 67).

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[ ] (5) 52.222-51, Exemption from Application of the Service Contract Labor Standards to Contracts for Maintenance, Calibration, or Repair of Certain Equipment-Requirements (MAY 2014) (41 U.S.C. chapter 67).

[ ] (6) 52.222-53, Exemption from Application of the Service Contract Labor Standards to Contracts for Certain Services-Requirements (MAY 2014) (41 U.S.C. chapter 67).

[X ] (7) 52.222-55, Minimum Wages Under Executive Order 13658 (NOV 2020).

[ ] (8) 52.222-62, Paid Sick Leave Under Executive Order 13706 (JAN 2017) (E.O. 13706).

[ ] (9) 52.226-6, Promoting Excess Food Donation to Nonprofit Organizations (JUN 2020) (42 U.S.C. 1792).

(d) Comptroller General Examination of Record. The Contractor shall comply with the provisions of this paragraph (d) if this contract was awarded using other than sealed bid, is in excess of the simplified acquisition threshold, as defined in FAR 2.101, on the date of award of this contract, and does not contain the clause at 52.215-2, Audit and Records - Negotiation.

(1) The Comptroller General of the United States, or an authorized representative of the Comptroller General, shall have access to and right to examine any of the Contractor's directly pertinent records involving transactions related to this contract.

(2) The Contractor shall make available at its offices at all reasonable times the records, materials, and other evidence for examination, audit, or reproduction, until 3 years after final payment under this contract or for any shorter period specified in FAR Subpart 4.7, Contractor Records Retention, of the other clauses of this contract. If this contract is completely or partially terminated, the records relating to the work terminated shall be made available for 3 years after any resulting final termination settlement. Records relating to appeals under the disputes clause or to litigation or the settlement of claims arising under or relating to this contract shall be made available until such appeals, litigation, or claims are finally resolved.

(3) As used in this clause, records include books, documents, accounting procedures and practices, and other data, regardless of type and regardless of form. This does not require the Contractor to create or maintain any record that the Contractor does not maintain in the ordinary course of business or pursuant to a provision of law.

(e)(1) Notwithstanding the requirements of the clauses in paragraphs (a), (b), (c), and (d) of this clause, the Contractor is not required to flow down any FAR clause, other than those in this paragraph (e)(1) of this paragraph in a subcontract

Solicitation 72061221R00010 24 | P a g e for commercial items. Unless otherwise indicated below, the extent of the flow down shall be as required by the clause-

(i) 52.203-13, Contractor Code of Business Ethics and Conduct

(JUN 2020) (41 U.S.C. 3509).

(ii) 52.203-19, Prohibition on Requiring Certain Internal Confidentiality Agreements or Statements (JAN 2017) (section 743 of Division E, Title VII, of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) and its successor provisions in subsequent appropriations acts (and as extended in continuing resolutions)).

(iii) 52.204-23, Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab and Other Covered Entities (JUL 2018) (Section 1634 of Pub. L.

115-91).

(iv) 52.204-25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment. (AUG 2020) (Section 889(a)(1)(A) of Pub. L. 115- 232).

(v) 52.219-8, Utilization of Small Business Concerns (OCT 2018) (15 U.S.C. 637(d)(2) and (3)), in all subcontracts that offer further subcontracting opportunities. If the subcontract (except subcontracts to small business concerns) exceeds the applicable threshold specified in FAR 19.702(a) on the date of subcontract award, the subcontractor must include 52.219-8 in lower tier subcontracts that offer subcontracting opportunities.

(vi) 52.222-21, Prohibition of Segregated Facilities (APR 2015).

(vii) 52.222-26, Equal Opportunity (SEP 2016) (E.O. 11246).

(viii) 52.222-35, Equal Opportunity for Veterans (JUN 2020) (38 U.S.C. 4212).

(ix) 52.222-36, Equal Opportunity for Workers with Disabilities

(JUN 2020) (29 U.S.C. 793).

(x) 52.222-37, Employment Reports on Veterans (JUN 2020) (38 U.S.C. 4212).

(xi) 52.222-40, Notification of Employee Rights Under the National Labor Relations Act (DEC 2010) (E.O. 13496). Flow down required in accordance with paragraph (f) of FAR clause 52.222-40.

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(xii) 52.222-41, Service Contract Labor Standards (AUG 2018) (41 U.S.C. chapter 67).

(xiii) [ ] (A) 52.222-50, Combating Trafficking in Persons (OCT 2020) (22 U.S.C. chapter 78 and E.O. 13627).

[ ] (B) Alternate I (MAR 2015) of 52.222-50 (22 U.S.C.

chapter 78 and E.O. 13627).

(xiv) 52.222-51, Exemption from Application of the Service Contract Labor Standards to Contracts for Maintenance, Calibration, or Repair of Certain Equipment-Requirements (MAY 2014) (41 U.S.C. chapter 67).

(xv) 52.222-53, Exemption from Application of the Service Contract Labor Standards to Contracts for Certain Services- Requirements (MAY 2014) (41 U.S.C. chapter 67).

(xvi) 52.222-54, Employment Eligibility Verification (OCT 2015) (E. O. 12989).

(xvii) 52.222-55, Minimum Wages Under Executive Order 13658

(NOV 2020).

(xviii) 52.222-62 Paid Sick Leave Under Executive Order 13706

(JAN 2017) (E.O. 13706).

(xix)(A) 52.224-3, Privacy Training (JAN 2017) (5 U.S.C. 552a).

(B) Alternate I (JAN 2017) of 52.224-3.

(xx) 52.225-26, Contractors Performing Private Security Functions Outside the United States (OCT 2016) (Section 862, as amended, of the National Defense Authorization Act for Fiscal Year 2008;

10 U.S.C. 2302 Note).

(xxi) 52.226-6, Promoting Excess Food Donation to Nonprofit Organizations (JUN 2020) (42 U.S.C. 1792). Flow down required in accordance with paragraph (e) of FAR clause 52.226-6.

(xxii) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (FEB 2006) (46 U.S.C. Appx. 1241(b) and 10 U.S.C. 2631). Flow down required in accordance with paragraph

(d) of FAR clause 52.247-64.

(2) While not required, the Contractor May include in its subcontracts for commercial items a minimal number of additional clauses necessary to satisfy its contractual obligations.

(End of clause)

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52.204-25 Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment. (AUG 2020)

(a) Definitions. As used in this clause-

Backhaul means intermediate links between the core network, or backbone network, and the small subnetworks at the edge of the network (e.g., connecting cell phones/towers to the core telephone network). Backhaul can be wireless (e.g., microwave) or wired (e.g., fiber optic, coaxial cable, Ethernet).

Covered foreign country means The People's Republic of China.

Covered telecommunications equipment or services means-

(1) Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities);

(2) For the purpose of public safety, security of Government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities);

(3) Telecommunications or video surveillance services provided by such entities or using such equipment; or

(4) Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country.

Critical technology means-

(1) Defense articles or defense services included on the United States Munitions List set forth in the International Traffic in Arms Regulations under subchapter M of chapter I of title 22, Code of Federal Regulations;

(2) Items included on the Commerce Control List set forth in Supplement No. 1 to part 774 of the Export Administration Regulations under subchapter C of chapter VII of title 15, Code of Federal Regulations, and controlled-

(i) Pursuant to multilateral regimes, including for reasons relating to national security, chemical and biological weapons proliferation, nuclear nonproliferation, or missile technology; or

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(ii) For reasons relating to regional stability or surreptitious listening;

(3) Specially designed and prepared nuclear equipment, parts and components, materials, software, and technology covered by part 810 of title 10, Code of Federal Regulations (relating to assistance to foreign atomic energy activities);

(4) Nuclear facilities, equipment, and material covered by part 110 of title 10, Code of Federal Regulations (relating to export and import of nuclear equipment and material);

(5) Select agents and toxins covered by part 331 of title 7, Code of Federal Regulations, part 121 of title 9 of such Code, or part 73 of title 42 of such Code; or

(6) Emerging and foundational technologies controlled pursuant to section 1758 of the Export Control Reform Act of 2018 (50 U.S.C. 4817).

Interconnection arrangements means arrangements governing the physical connection of two or more networks to allow the use of another's network to hand off traffic where it is ultimately delivered (e.g., connection of a customer of telephone provider A to a customer of telephone company B) or sharing data and other information resources.

Reasonable inquiry means an inquiry designed to uncover any information in the entity's possession about the identity of the producer or provider of covered telecommunications equipment or services used by the entity that excludes the need to include an internal or third-party audit.

Roaming means cellular communications services (e.g., voice, video, data) received from a visited network when unable to connect to the facilities of the home network either because signal coverage is too weak or because traffic is too high.

Substantial or essential component means any component necessary for the proper function or performance of a piece of equipment, system, or service.

(b) Prohibition. (1) Section 889(a)(1)(A) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232) prohibits the head of an executive agency on or after August 13, 2019, from procuring or obtaining, or extending or renewing a contract to procure or obtain, any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. The Contractor is prohibited from providing to the Government any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system, unless an exception at paragraph (c) of

Solicitation 72061221R00010 28 | P a g e this clause applies or the covered telecommunication equipment or services are covered by a waiver described in FAR 4.2104.

(2) Section 889(a)(1)(B) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232) prohibits the head of an executive agency on or after August 13, 2020, from entering into a contract, or extending or renewing a contract, with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system, unless an exception at paragraph (c) of this clause applies or the covered telecommunication equipment or services are covered by a waiver described in FAR 4.2104.