AID-176-TO-11-00001_Justification_for_an_Exception_to_Fair_Opportunity.pdf

USAID I CENTRAL ASIAN REPUBLICS

FWM THE AMERICAN PEOPLE

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY

To:

David Brown, USAID/CAR Competition Advocate of this Activity

From:

David Westerling

Date:

April 4, 2014

Subject:

Justification for an Exception to Fair Opportunity and Approval for Modification to the Regional Economic Cooperation Project (REC).

Action Requested:

You are requested to approve exception to fair opportunity as set forth in FAR 16.505 (b)(2) for ceiling increase of the Regional Economic Cooperation (REC) Task Order AID- 176-TO-11-00001 under the USAID/CAR Macroeconomic Foundations for Growth Indefinite Quantity Contract (IQC) from $6,238,822 to $9,300,000.

USAID/CAR's Deputy Regional Mission Director serves as the Mission Competition Advocate.

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY

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

This is a request to approve a modification to the REC Task Order that will allow an overall budget ceiling increase of $3,061,178 to provide additional technical assistance in Central Asia. The additional funds will be obligated to the REC budget and used to continue and enhance the existing six project activity components aimed at strengthening the capacity of small and medium enterprises, improving transport corridor performance and increasing trade within Central Asia and with South Asia.

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

The additional activities for which approval is sought will enable USAID/CAR to help meet critical U.S. foreign policy objectives by deploying $3,061,178 in additional resources for trade facilitation activities identical to those being implemented currently under this task order. The REC components will remain the same. However, the increased number and duration of activities within each component will have a significant positive impact on results. That is, the results will be enhanced due to the expansion of activities within each component. The six components of the REC project are presented below:

Activity 1 - Build and Support Export Partnership Groups and Organize Business-to- Business Events that Bring Stakeholders Together to Find and Effect Solutions to Trade Facilitation Issues

Activity 2 - Evaluate the Export Potential of Firms and Industries in Kazakhstan and Uzbekistan through Market Research and Provide Technical Assistance

Activity 3 - Test the Barriers to Export along the Export Chain through Selected Pilots to Improve Transport Corridor Performance

Activity 4 - Organize, Award, and Manage Grants to Participants in the State Department's Voluntary Visitors Program and other Regional Women-Owned Businesses.

Activity 5 - Assist Tajikistan in WTO Post-Accession Implementation Requirements

Activity 6 - Help Central Asian Countries Implement Pro-Trade Policies, Regulations, and Processes

As a result of this proposed cost extension, the following incremental deliverables above those of the current project plan are anticipated:

Under Activity 1 - Four new export partnership groups will be formed, eight business-to-business trade facilitation meetings between Central and South Asian countries will be held, and Central Asia Trade Forums will be convened in 2015 and 2016 all-together resulting in an estimated $50 to $100 million in new regional trade.

Under Activity 2 - Additional training to Uzbekh and Kazakh fruit producers will be provided that will increase their capacity to sell and enhance food security by improving quality and extending shelf life.

Under Activity 3 - Support to Kazakh and Uzbek companies supplying the DoD in Afghanistan will be maintained and alternative export channels found.

Under Activity 4 - Women-owned businesses will be strengthened in Kazakhstan and Tajikistan due to the issuance of eight grants worth a total of $160, 000.

Under Activity 5 - All of the steps in Tajikistan 's WTO post-accession action plan will likely be completed.

Under Activity 6 - Due to transport corridor performance interventions, the time required and cost of traversing the border between Uzbekistan and Afghanistan at Termez/Mazar will be decreased.

The duration of this work is expected to be performed between 4/1//2015 and 9/29/2016.

These proposed changes in the project budget are illustrated as follows:

Current REC Budget Amount: $6,238,822 Increase made by this Modification: $3,061,178 New REC Budget Amount: $9,300,000

3. Identification of the exception to fair opportunity and the supporting rationale, including a demonstration that the relationship between the initial order and the follow-on is logical:

The primary objectives of the REC project are to increase intra-regional trade, facilitate trade through reforms of the enabling environment, and to increase the exports of regional enterprises. The REC project improves the environment and potential for cross-border trade among Central Asian countries, Afghanistan and Pakistan, and larger trading partners through training and building the capacity of Central Asian government agencies and small and medium-sized enterprises at the firm level.

To accomplish these goals, the project consists of six diverse activities including market research, the formation of export partnership groups, assisting the DoD in local procurement, providing grants to women-owned businesses, assisting the government of Tajikistan in implementing post WTO accession reforms, and improving the regional trade enabling environment. Networking events and business-to-business (B2B) round-tables are a hallmark of carrying out many of these activities, and several of these have brought together businesses, government officials and other trade stakeholders from Central Asia, Afghanistan, and Pakistan as part of the Almaty Consensus strategy.

The REC project has played an integral role in implementing activities aimed at achieving one of the primary goals of the Almaty Consensus, which is to increase trade within Central Asia and between Central and South Asia. These activities consist primarily of staging a variety of commercial events that establish connections between people and businesses. An example of this is the Central Asia Trade Forum (CATF) which was held by the REC project in Almaty in October of 2013 and which dramatically show-cased the potential for increased regional trade. Also, and importantly, the Pakistan Trade Project (PTP) supported the CATF by sending a Pakistani delegation which proved instrumental in the success of the event. The REC project in turn will support, with current funding, the PTP's trade forum in Pakistan in the spring of 2014 by sending 75 participants from Central Asia. Thus, there is significant collaboration between USAID trade projects in the region which serves to enhance the overall impact of the projects on trade in the region.

The REC project has also adapted its own activities to align with Almaty Consensus goals and has held a number of stand-alone B2B events, for example, in the border area between Uzbekistan and Afghanistan involving the private sector from both countries and the Chambers of Commerce. Similar round-tables have been held between Afghan and Kazakh businesses as well as Kazakh-Uzbek. In all, in the past year, 8 such B2B events have been organized by REC region-wide on various topics associated with export development such as standards, logistics and packaging. Combined, these meetings have resulted in a total of over $20 million in incremental regional trade, a part of which is with Afghanistan. In the next two and a half years, new regional business generated as a result of REC activities is expected to exceed that number substantially.

Creating a stable and prosperous Central and South Asia linked by a web of trade networks is a part of the USG's national security regional strategy and a priority. With the drawdown of the military in Afghanistan at the end of the year, USAID's contribution to this overall strategy through the Almaty Consensus will become more important. Thus, the imperative and mandate for the REC project to carry-out activities such as those described above will continue and probably intensify over the next two and a half years. This is the reason the approval of this amendment is requested.

The linkages and relationships that the REC project has forged with counterparts and beneficiaries would take considerable time and cost for an alternative implementer to develop. Using another mechanism to implement these activities would incur significant cost, time and additional effort to set up additional management units. Therefore, utilizing a new implementer, without the accumulated knowledge and expertise of the existing one, to execute the same activities to the same beneficiaries would be extremely inefficient and most importantly would have an adverse effect on the impact and number of deliverables over the available time frame. In short, if the Contracting Office were to change the contractor at this point, it would be very disruptive and costly to USAID.

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

The Contracting Office will review the proposed costs and make a determination that the costs are fair and reasonable.

5. Any other facts supporting the justification:

The decision to modify the Task Order with Chemonics is the most cost effective way to provide additional assistance in strengthening the capacity of the private sector in Central Asia and to increase intra-regional trade and trade between Central and South Asia. This exception is requested in the interest of economy and efficiency. .

6. A statement of the actions, if any, the Agency may take to remove or overcome any barriers that led to the exception to fair opportunity before any subsequent acquisition for the supplies or services is made:

This exception was brought about by a set of extraordinary circumstances whereby the implementer, Chemonics, accumulated over time superior knowledge and expertise enabling it to effectively execute the activities of the project and achieve the desired results in a project of strategic importance to national security. No other new implementer would have sufficient time, with limited time available before the expiration of the IQC, to become as effective. There will be no further revisions to this project. Upon expiration of the IQC, any new project will be fully competed.

7. Contracting Officer Certification:

I hereby.certify that the justification is accurate and complete to the best of my knowledge and hell

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8. Technical or requirement personnel certification:

In accordance with FAR 16.505.(b)(2)(ii)(B), I hereby certify that the technical statements included above and which form a basis for the justification are complete and accurate.

9. Approved/Disapproved

One of the circumstances of FAR 16.505 (b) (2) (i) (A) through (E) applies to this order, which is "(C) The order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order."

As provided in FAR 16.505(b)(2)(ii)(C)(2), approval by the USAID/CAR Competition Advocate is required. The USAID/CAR Deputy Regional Mission Director serves as the USAID/CAR Competition Advocate pursuant to Mission Order 103-1. As Deputy Regional Missio irector, you have this authority and hereby approve this justification.

David Brown USAID/CAR Competition Advocate of this Activity & Deputy Mission Director

Date: /,S I? 2-/

Clearances:

Laura Gonzalez, EDO 14^ cleared by e-mail

3/26/14 Rebekah Eubanks, RLA

Drafted by: David Westerling, Deputy Director, Economic Development Office