AIDOAAC1700090 Justification.pdf

JUSTIFICATION AND APPROVAL

TO: Stella Alexander-Sergeeff, M/OAA

FROM: Matthew Nigrelli, Private Sector Engagement Hub, Bureau of Development, Democracy and Innovation (DDI)

DATE: October 22, 2021

RE: “INVEST: MOBILIZING INVESTMENT FOR DEVELOPMENT” (AID-OAA-

C-17-00090)

SUBJECT: Justification for Other than Full and Open Competition under the Expedited

Procedures Package (EPP) for Responding to Outbreaks of Contagious Infectious Diseases.

We request approval of this justification for use of other than full and open competition pursuant to the authorities under the EPP for Responding to Outbreaks of Contagious Infectious Diseases (the “Expedited Procedures Package”), approved on March 24, 2020. Your approval of this Justification and Approval (J&A) constitutes the justification for other than full and open competition as required under the Determination and Findings (D&F) Authorization for the Use of Other than Full-and-Open Competition in the Award or Modification of Contracts of the EPP.

The full D&F can be found under Tab 2.

Name of Contractor: DAI Global LLC Contract Name and Number: INVEST, AID-OAA-C-17-00090 Current TEC: $167,075,930.00 Current Obligation: $159,241,428.00 Current Period of Performance: 09/28/2017 to 09/27/2024

1. Nature and/or description of the action being approved.

This J&A provides the necessary documentation to support an increase of $27,001,000 to the total estimated cost (TEC) of the “INVEST: Mobilizing Investment for Development” contract (INVEST), bringing the total contract ceiling from $167,075,930 to $194,076,930. The period of performance of INVEST runs from September 28, 2017, to September 27, 2024. The TEC of INVEST was previously increased by $72,134,883 in 2019; at that time, it was stated that the Agency “will not consider any additional, non-competitive increases.” However, due to the unprecedented and unforeseen disruptions caused by the COVID-19 pandemic, as described in further detail below, a further increase in TEC is warranted and was approved by the Administrator on August 30, 2021. The ceiling increase will deepen and replicate activities as well as recoup the amounts within the INVEST ceiling displaced to accommodate the Agency’s rapid COVID-19 response, as detailed in the attached spreadsheet. Tab 1 of the spreadsheet provides the total obligations to date and remaining ceiling, and Tab 2 of the spreadsheet https://docs.google.com/spreadsheets/d/1WcQLBUqoZCFfs0RS-IAApbU5ci0CiVC5ejCf2tVVH0w/edit?usp=sharing details the current COVID-19-related buy-ins and amounts within the contract. The ceiling increase amount requested is tied, dollar for dollar, to the amount of ceiling space in the INVEST mechanism directly displaced by COVID supplement funding substantially utilized to address the global pandemic as part of USAID’s emergency response. In addition, we are keeping the original split between Core and Buy-In ceilings the same (30/70) as core ceiling is required to execute on additional Buy-In amounts.

As of October 1, 2021, the remaining total estimated ceiling (TEC) was $6,681,932 with $1,909,595 remaining in the Buy-in portion of the ceiling. Buy-in demand currently well exceeds that available ceiling, impacting operations.

TOTAL TEC Obligations to date 10/1/21 INVEST Total $167,075,930 $160,393,998 $6,681,932 of which buy-In ceiling $137,230,676 $135,321,082 $1,909,594 of which CORE ceiling $29,845,254 $25,072,916 $4,772,338

INVEST’s ceiling is divided into a core ceiling to cover operations, learning, and rapid procurement, and a buy-in ceiling reserved only for mission, bureau and independent office (MBIO) buy-ins. Based upon Buy-In amounts already approved by PSE Hub senior management, and ongoing discussions with MBIOs, as of September 2021, the INVEST ceiling is effectively expended inhibiting future buy-ins. This is in large part a result of the shifting resources necessary to respond to the ongoing primary and secondary public health and economic impacts identified as a result of the unprecedented global effects of the COVID-19 pandemic.

2. A description of the supplies or services required to meet USAID’s needs (including the estimated value).

The INVEST contract currently has fifteen buy-ins totaling $61.8 million that contain COVID-19-related activities - see Tab 1. Of these buy-ins, we estimate conservatively that $20,770,000 of already obligated funding has directly addressed the primary and second-order effects of the pandemic. This includes entire buy-ins devoted to COVID-19-response such as $10 million for Italy healthcare supply-chain work, Ghana, and Tanzania, as well as smaller components of larger buy-in work in places like Afghanistan, Moldova, and Tunisia. The requested, the TEC increase will allow INVEST to deepen, scale and replicate COVID-19-related work already begun at a critical time when the pandemic is beginning to unfold in the developing world. High-priority interventions such as rapid liquidity support, paired with technical assistance to SMEs and financial intermediaries across geographies, will help mitigate the cascading effects of the economic and health crisis on livelihoods, business growth and financial stability.

How and at what rate the pandemic will penetrate different geographies, regions and localities in the developing world is highly uncertain and dependent on a range of factors.

How long its second-order economic effects will impact the growth, well-being and stability of developing countries is equally uncertain. If the smaller, more circumscribed 2014 West Africa Ebola outbreak is any indication, it will be for years to come.

Therefore, the requested TEC increase of $27,001,000 is made up of the following:

A. Demonstrated COVID-19-related demand already within the INVEST ceiling ($20,770,000).

B. An additional 30% increase ($6,231,000), to allow for sufficient ceiling space for anticipated Core costs, consistent with the original contract split between Buy-In Ceiling (70%) and Core Ceiling (30%).

3. Identification of statutory authority permitting other than full and open competition.

AIDAR 706.302-70(b)(3)(ii) and 40 U.S.C. §113; See the “Expedited Procedures Package for Responding to Outbreaks of Contagious Infectious Diseases” (EPP) approved March 24, 2020. The Determination and Findings Memo (D&F) is attached to this file in Tab 2. The EPP can only be used for an Infectious Disease Outbreak, as defined in paragraph 2 of the D&F (Tab 2). The COVID-19 outbreak was declared a Public Health Emergency of International Concern by the World Health Organization (WHO) on January 30, 2020, and therefore the class D&F applies to COVID-19 emergency response activities.

4. A discussion of the proposed contractor’s unique qualifications or the nature of the acquisition that requires use of the authority cited.

On September 28, 2017, the Agency awarded a five-year, Cost-Plus Fixed Fee contract to DAI Global, LLC., due to DAI’s proposed “facilitated partnership model.” DAI rapidly scaled the original Partner Network from 27 to over 300 companies, many of which are smaller firms with specialized expertise in blended finance and transaction facilitation that did not have the capacity to compete for USAID work. DAI also put in place a unique capability to rapidly tailor and procure priority MBIO and Agency interventions, averaging nine weeks from competitive RFP release to subcontract award. The INVEST team has carefully and methodically built this capability and growing network of firms through a set of systems and processes for increased partner engagement that has delivered needed expertise to USAID Missions and OUs in a quick and efficient manner across multiple sectors. The creation and constant curation of this network of new partners and customized interventions at the local and country-level is a deliberate departure from more traditional USAID subcontract management structures and was explicitly designed to fulfill the Agency’s emerging procurement and partnerships strategy.

INVEST has become a key part of the Agency's COVID-19 response, particularly for this ability to rapidly procure tailored financial and technical assistance solutions that quickly address the primary and secondary economic effects of the pandemic. Examples include critical liquidity support to small and medium size businesses in multiple USAID-priority countries and sectors as well as rapid medical supply chain support in countries where USAID does not have a long track record operating in, such as Italy. Since INVEST does have a significant track record in transaction support and blended finance with rapid procurement timelines, it is being called upon to take a leading role in the Agency's support to economies affected by the pandemic.

While other potentially capable implementing partners exist, it would take time and significant cost to re-create the speed and flexibility of INVEST at a moment when the Agency’s pandemic response calls for quick action. A new implementer or mechanism would unnecessarily duplicate both effort and cost to the US government that would not be recovered through competition. The cost associated with building these capabilities has been significant and it would require substantial additional resources and time to build them anew.

5. A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

Publication of a notice is not required per the determination at AIDAR 705.202(b), Exceptions. Accordingly, the Contracting Officer did not post any notice regarding this interim measure and consequently no sources expressed any written interest in the acquisition.

As it was not practicable under the circumstances described herein, no proposals were requested from potential offerors.

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

This is an increase to the contract ceiling with no change to any negotiated rates in the contract. All costs related to this original award were determined to be fair and reasonable and the ceiling increase requested through this J&A will not change that determination.

7. A description of the market research conducted (see FAR Part 10) and the results or a statement of the reason(s) market research was not conducted.

No market research was conducted because this J&A seeks to replenish the ceiling in an existing instrument. Initial market research was conducted through the original posting of the BAA in March 2017, in which USAID received over 100 expressions of interest, of which 27 firms were invited to the co-creation stage. All of the original firms, except DAI, remain in the provider network. Moreover, the network has grown to over 300 firms and continues to add partners. Essentially, INVEST has created a miniature market of providers for which DAI conducts subcontracting competitions for the buy-in activities. Additional market research was not conducted.

8. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

N/A

9. A statement of the actions, if any, USAID may take to remove or overcome any barriers:

The Private Sector Engagement Hub has recently developed a five year strategy for engagement including planned methodologies for scaling similar mechanisms. Under the strategy, we aim to support Missions and Bureaus in the design and procurement of competitively awarded INVEST-like mechanisms that are suited to their specific needs.

For this reason, we do not anticipate a direct follow-on to INVEST within the PSE Hub.

RECOMMENDATION

It is recommended that you approve this justification for use of other than full and open competition pursuant to the “Expedited Procedures Package for Responding to Outbreaks of Contagious Infectious Diseases”, approved on March 24, 2020. Your approval of this J&A constitutes the justification for other than full and open competition as required by Tab 2 (D&F for the Authorization of Less than Full and Open Competitive Procedures in the Modification or Award of Contracts) of the EPP.

ATTACHMENTS:

TAB 1: INVEST Forecast TAB 2: Expedited Procedures Package for Responding to Outbreaks of Contagious Infectious Diseases” package approved on March 24, 2020 (pages 6-11) TAB 3: Approval to proceed with Exception to Competition https://docs.google.com/spreadsheets/d/1WcQLBUqoZCFfs0RS-IAApbU5ci0CiVC5ejCf2tVVH0w/edit#gid=1771797084 https://docs.google.com/spreadsheets/d/1WcQLBUqoZCFfs0RS-IAApbU5ci0CiVC5ejCf2tVVH0w/edit#gid=1771797084 https://docs.google.com/spreadsheets/d/1WcQLBUqoZCFfs0RS-IAApbU5ci0CiVC5ejCf2tVVH0w/edit#gid=1771797084 https://drive.google.com/file/d/132woUz0XdbEUDnQHeAYWg8vSyPuKJasB/view?usp=sharing

CERTIFICATION:

The requirement for technical certification at FAR 6.303-1(c) is fulfilled through:

a. The signature of the Technical Officer below certifying the specific supporting data for this J&A; and

b. The D&F Authorization for the Use of Other than Full-and-Open Competition in the Award or Modification of Contracts under the Expedited Procedures Package for Responding to Outbreaks of Contagious Infectious Diseases” approved on March 24, 2020. (Attached in Tab 2).

The Contracting Officer is the Approving Official based on the authority given under the EPP.

However, a separate Contracting Officer certification is not required per AIDAR 706.302- 70(c)(1).

Technical Officer:

I hereby certify that the supporting data which form a basis for the justification are complete and accurate to the best of my knowledge and belief.

/S/ 9/2/2021 Matthew Nigrelli, A/COR Date

APPROVAL:

Stella Alexander-Sergeeff Date:

Supervisory Contracting Officer Office of Acquisition and Assistance

10/22/2021