11-30-2011 USAID-Kenya Responses to KFIE RFI Questions FINAL.docx

USAID/Kenya Responses to KFIE RFI Questions

1) The RFP describes a relationship between Development Innovation Ventures (DIV) and KFIE. We understand that DIV has been involved in funding at least one project in Kenya. Will DIV and KFIE have a formal funding relationship? In particular, would KFIE take over funding of stage 1 projects incubated by DIV or conversely graduate stage 3 projects to DIV? Would DIV funding be used to supplement USAID/Kenya funding to KFIE?

a) While some KFIE innovations could potentially be transferred to DIV at higher stages, it is not anticipated that DIV funding would be used to support KFIE.

2) There may be cases in which an equity investment by KFIE either in a venture fund or directly in a Kenyan enterprise/organization would have positive development impact. Does USAID envision KFIE making such equity investments? Are there specific USAID/USG regulations which would govern equity investments?

a) U.S. Government funding may not be used for equity investments.

3) Would USAID view it as a positive outcome if KFIE were able to leverage funds from other sources including investment funds, corporations and possibly other donors? If so, would any specific restrictions apply to how KFIE would take in and pay out funds to investors/grantors?

a) Yes. Specific regulations governing partnerships and leveraging funds can be found in 22 CFR 226 and the ADS 303. Contractors are also encouraged to review USAID’s Global Development Alliance (GDA) website. KFIE as a project would not be allowed to take in funding; any outside funding would go directly to parties directly implementing innovations.

4) In the background section, it is indicated that the “KFIE is designed to foster and bring to scale innovative private sector solutions to persistent poverty and food security.” Please indicate if the Global Development Alliance model is advised to be used for this type of program.

a) The Global Development Alliance model, as well as other types of partnerships and leveraging, are strongly encouraged.

5) In page 22, Sustainability and KFIE, it is indicated that ‘… by investing and nurturing innovations that are adopted by the Kenyan private sector, sustainability is achieved when these new practices and/or products are embedded in the agricultural economy. On another level, however, we feel that there is potential for the KFIE instrument itself to attract other ‘investors’ (other development partners or non-traditional source of funds) who have an interest in supporting innovation in agriculture…” Would the mission provide additional guidance in the final solicitation on the parameters to forge alliance(s) of innovative nature and how this would have an impact in the business proposal (and its inclusion in the budget)?

a) Yes; the final solicitation will include more detailed guidance. It is expected that the Contractor will continuously seek to forge alliances (i.e. conduct business development) and this should be considered an ongoing cost.

6) Is the financial assistance to be provided by the KFIE contractor limited to Stage 1 innovations AND solely through grants? Or could grant funds also be used to leverage other mechanisms, such as buying down the risk of other funders?

a) Financial assistance provided by the KFIE contractor is limited to Stage 1 innovations; however, grant funds may also be used to leverage other mechanisms.

7) Will USAID be open to the adoption of non-indigenous innovations and funding partnerships (between Kenyan implementers and non-Kenyan "innovation owners")?

a) Yes.

8) Can USAID please clarify the role and nature of the “Innovation Fellows” listed on page 6 of the RFI? It was unclear as to what the role of such Fellows would be in program implementation, where they would be coming from (volunteers, other programs), and what their specialization or background was in.

a) The primary role of the Innovation Fellow(s) is to support evidence-based decision-making. It is anticipated that the Innovation Fellows will be involved primarily in designing and overseeing the implementation of random control trials during implementation of Stage 2 and 3 innovations, and other research methods (primarily during Stage 1). These individuals, selected in cooperation with the USAID/Kenya and DIV/Washington, could include development researchers and social entrepreneurs with social science research background and experience in rural development, agricultural development, financials services, private sector development, agribusiness, economics, entrepreneurship, nutrition, among other areas of expertise.

9) Would USAID expect/want the KFIE implementer to identify and recruit Innovation Fellows or would that be a Government function? If the latter, what would be the role of the implementer vis-a-vis Innovation Fellows?

a) As described in C.4 the identification and provision of Innovation Fellows will be part of the role of USAID, and therefore a Government function. The primary role of the Innovation Fellows is to support evidence-based decision-making. Therefore, the contractor shall work with Innovation Fellows as described in the SoW by allowing Fellows access to information and innovation activities to support the evidenced-based decision making process, as well as research design and execution.

10) Will the Innovation Fellows be locals or expatriates? Will offerors be expected to budget for the Innovation Fellows, or will they be independent from the project?

a) As outlined in C.4 of the SoW, the provision of Innovation Fellows is part of USAID’s role, and offerors are not expected to budget for them.

11) Does USAID anticipate that Innovation Fellows will be based in the KFIE contractor’s office(s) serving as partners to KFIE contractor staff who are providing support to the selected innovations?

a) No; USAID will support the operating expenses for Innovation Fellows, and they will not be based in the contractor’s office(s).

12) Page 22: What is the implementer’s role in monitoring and evaluations if USAID is providing Innovation Fellows to “be involved in the design and implementation of randomized control trials and/or other research methods to support evidence-based decision-making?”

a) The contractor is required to conduct the usual M&E in accordance with provisions listed in the SoW and the ADS; while Innovation Fellows and their activities are to be considered separate entities from the contract, the contractor will work with Fellows as outlined in the SoW.

13) Would USAID provide a copy of the referenced “National Food Security and Nutrition Policy – Draft Sessional Paper, February 2009”? An initial web search has revealed only a second draft dated 16 May 2008, and we would like to make sure we have the final document.

a) The Kenya National Food and Nutrition Policy is still in draft form and not available to the public; for the purposes of implementing KFIE, all the needed information regarding the policy is included in the Annex.

14) Can USAID share the anticipated size (duration and funding amount) of the KFIE program?

a) As outlined in the SoW in section C.3.5, the period of performance will be for a base period of three years, with two option years. The budget for the implementer portion of the KFIE program is under $7 million, including grants to Stage 1 innovations. However, potential offerors are reminded that they will be in a competitive environment where price is a factor and will be evaluated.

15) The forecast describes KFIE as a $20-25 million project, and we assume that some portion of this will be reserved for investments/GUCs. Since a relative idea of scale is extremely important to recommending an appropriate structure for the project (some structures would be feasible only at specific levels of funding), it would be helpful if USAID would provide additional context on level of funding available including a break-down by management labor, fees for Innovation Fellows, GUC, etc. Could USAID provide such a breakdown?

a) The forecast for KFIE is $20-$25 million and includes costs associated with the implementer and the subsequent direct USAID grants to Stage 2 and 3 innovations. Contractors shall be required to identify the breakdown of labor, management costs, etc. that will best accomplish the SoW in their proposals.

16) Page 6, section C.5: What proportion of the overall contract budget will be dedicated to GUCs? Will implementers be able to use portions of the GUCs to provide technical assistance and capacity building to the entities that are shortlisted for financing?

a) Implementers will not be able to use portions of GUCs to provide technical assistance and capacity building to the entities that are shortlisted for financing; the contractor will be expected to provide these services to all Stage recipients as part of their performance of the SoW. The amount for GUCs will be included in the RFP.

17) Please clarify whether KFIE will fund innovation projects in Stages 2 and 3 or if USAID anticipates funding these Stages directly or some other variation.

a) USAID, not the KFIE contractor, will fund innovation projects in Stages 2 and 3.

18) Can USAID please clarify the following statement found on page 6 of the RFI: USAID will “directly support Stage 2 and 3 recipients through grants or any other appropriate mechanism”? For example, does this statement indicate that USAID will be responsible for grant implementation for Stage 2 and 3 innovations - due diligence, project selection and development, grant agreement, performance monitoring, procurements and disbursement, etc.? Or, does this statement simply indicate a legal agreement governing direct disbursement of funds from USAID to the beneficiary, with grant implementation to be conducted by the contractor?

a) USAID will be responsible for grant implementation of Stage 2 and 3 innovations; the contractor is expected to continue to provide capacity building and technical assistance to all Stage recipients.

19) Does USAID anticipate that stage 3 projects will be eligible for additional USAID funds upon graduation? If so, from what sources?

a) While the intent of the program is to have fully-sustainable private sector entities at graduation from Stage 3, USAID may fund innovations beyond Stage 3 at its discretion.

20) Page 21 of the draft describes USAID’s anticipated approach to Evidence-based decision-making. Please clarify whether it is anticipated that USAID will engage an outside evaluator for proof of concept or if this will be accomplished within the umbrella of the KFIE project.

a) Stage 1 projects will be independently evaluated by an outside party to assess the potential proof of concept. Evidenced-based methods will be used to assess effectiveness of the design, potential uptake by local farmers and/or the private sector, and/or reliability of results. Based on this evaluation, those ideas most promising will transition to Stage 2.

21) Page 20: The SOW states, “Stage 1 projects will be independently evaluated to assess the potential proof of concept”. Is this evaluation to be driven by an actor other than the implementing organization? Is this activity to use project funds, or will it be separately funded?

a) See question 20.

22) Further to the description of Evidence-based Decision-making on page 21, please describe the role of the evaluators in the innovations’ advancement to Stages 2 and 3.

a) The contractor, USAID, Innovation Fellows, and/or external parties are all expected to have roles, in a collaborative manner, in determining an innovation’s advancement to subsequent stages.

23) How many cycles of Stage 1 funding does USAID anticipate will occur under the KFIE project?

a) Due to the unpredictable nature of innovation and the anticipated “rolling” initiation of Stage 1 activities throughout the life of the project, there are no formally envisioned cycles of Stage 1 funding that USAID anticipates.

24) We note on page 9 of the draft SOW that it is anticipated an ERR will be due within 90 days of project start-up. We also note on page 8 that innovation projects will be screened through the IEE process as they are identified. Please provide more details on how the KFIE implementer is expected to account for the innovation projects in the ERR.

a) An initial Environmental Review Report (ERR) is due within 90 days for any immediately foreseen activities as outlined in the SoW, 22 CFR 216, the AIDAR and the ADS (Specifically chapter 204); subsequently, Initial Environmental Evaluations will be required for all following activities not covered under the initial ERR.

25) Per H.1, would USAID consider providing a copy of the IEE report with the final RFP, so offerors know which activities are categorically excluded and for which types of activities they will have to plan for environmental assessments?

a) Activities that are categorically excluded are described in 22 CFR 216.2; offerors should consult USAID’s Automated Directives System (ADS) Chapter 204 for more information.

26) In Section F.2, USAID requires the establishment of the KFIE website is within 90 days of award. Can USAID please clarify the purpose of the website? For instance, if the KFIE website will be used as a platform for exchange between KFIE recipients, the website must be designed to meet the recipient needs. This may require more than 90 days to complete.

a) An initial version of the KFIE website shall be established within 90 days of award; the contractor shall substantively update the website quarterly. The purpose of the KFIE website is to:

i) Solicit participation of potential innovative approaches from the broader public;

ii) Be used as a platform for exchange between KFIE recipients;

iii) Showcase the innovations under development that further Feed the Future goals;

iv) Assist with public dissemination of KFIE quarterly reports and information products such as newsletters, bulletins, “Success Stories”, etc. prepared by the contractor that describe KFIE activities, lessons learned, and experiences.

27) The draft Scope of Work specifically asks for the development of ICT platforms, to facilitate the solicitation of innovative approaches (page 3). Who is the intended audience for this platform?

a) See Question 26.

28) Per C.4, Role of USAID, USAID will lead the development of criteria and selection of the Stage 1, 2, and 3 innovations. What role does USAID envision for the contractor in developing selection criteria and aiding in the selection of Stage 1 and 2 innovations?

a) The contractor will develop selection criteria and select innovations for Stage 1 innovations subject to USAID approval. In addition, the contractor shall provide technical input for the selection of Stage 2 and 3 applicants.

29) Per page 20 and 21, USAID envisions that the contractor will be providing seed funding to projects in Stage 1 and start-up funds for projects that transition to Stage 2. Will the contractor be able to use a flexible mechanism to provide such funding, which would include grants and subcontracts?

a) GUCs are the envisioned seed funding for Stage 1 innovations; USAID will be providing funding to Stage 2 and 3 innovation applicants.

30) What percentage of points from the overall evaluation criteria will be dedicated to the technical approach (SOW, Section C)? When submitting comments on December 9th, should potential offerors also provide suggestions for management, personnel, and other evaluation criteria?

a) Interested parties should provide suggestions for evaluation criteria, including their associated weights, when submitting comments by December 9, 2011.

31) Section C.3.1 states, “The contractor shall: … utilize a competitive process approved by USAID. However, the contractor’s efforts shall not be limited to these means.” Could USAID kindly clarify what is meant by, “the contractor’s efforts shall not be limited to these means”?

a) The statement “the contractor’s efforts shall not be limited to these means” is intended to allow for non-competitive mechanisms in the implementation of the project.

32) Does USAID anticipate a grant application process similar to DIV's, e.g. projects are submitted on a rolling basis? If so, how often are formal reviews/decision panels expected to convene? What is the estimated contract value for the KFIE’s three-year base, two-year option year period?

a) Yes; for Stage 1 innovations USAID anticipates a grant application process similar to DIV’s in that projects will be submitted on a rolling basis. However, for Stage 2 and 3 innovations, formal reviews/decision panels are expected to convene on a quarterly basis.

33) Does USAID have an envisioned timeframe for the completion of Stages 1 through 4 referenced on pages 20-21 and how will this timeframe compare to the base and option period years? For example, will USAID anticipate innovation projects go through Stages 1 through 4 within the three base years, or does it envision that Stages 3 and 4 would take place in the option years?

a) There is no formal envisioned timeframe for completion of stages due to the inherent unpredictability of innovation, as well as the unpredictability of agricultural production, including climate. However, offerors should refer to Annex 1, “Scaling Innovations” for further guidance on innovation stage timeframes.

34) Page 3, footnote 1, states that, “USAID/Kenya anticipates providing direct support to innovators at Stages 2 and 3, including but not necessarily limited to grants.” Will the selected contractor also be held responsible for the results of these grantees?

a) When USAID/Kenya provides direct support to Stage 2 and 3 recipients, the contractor will be held responsible for the results of the technical assistance/capacity building (i.e. the management consulting) which is required to be provided to these recipients.

35) Annex 1, Page 20 (Stage 1: Proof of Concept): Will it be possible for the innovation grants to be awarded to international organizations that are working in Kenya?

a) Yes; however, the contractor is expected to meet the objectives and aspirations of the USAID FORWARD by supporting and strengthening local partners such as local NGOs and private sector actors as much as possible, such as by supporting local entities’ performance through capacity assessment, and development of internal institutional and capacity improvement activities.

36) How does USAID envision the link between KFIE and the Development Initiative Ventures (DIV)? Will innovations be submitted through KFIE to the DIV or will the KFIE and DIV collaborate in developing the initiatives?

a) KFIE is designed and intended to specifically address the agricultural challenges in Kenya, and therefore it is envisioned that innovations addressing those challenges will be submitted directly to KFIE. Where appropriate, innovations that exhibit potential for cross national and/or global adoption - in addition to adoption in Kenya - may be considered for USAID/Washington Development Innovation Ventures (DIV) support through consultations with USAID/Kenya. KFIE is not a vehicle for innovations to be submitted to DIV that are not applicable to Kenya’s agricultural sector.

37) Does USAID intend the innovations to support SA1 and HR2 to be applied to other areas in Kenya and the region?

a) KFIE is designed and intended to specifically identify and bring to scale innovative solutions to agricultural challenges in SA1 and HR2; however, if innovations are applicable to other areas in Kenya and the region, it would be considered a favorable outcome. Innovations that do not specifically address agricultural challenges in SA1 and HR2 will not be dismissed from consideration; however, innovations that focus on SA1 and HR2 are very strongly preferred.

38) Will the grants in stages two and three be given directly from USAID to the local organizations?

a) Yes.

39) Does USAID intend to reserve or target a portion of the innovation applications for different sectoral areas, e.g., agric. marketing vs. use of maternal and child health and nutrition services, or will all areas compete equally?

a) Within KFIE there are no targets or reserves for any particular sector within agricultural development and food security; in addition, the activities listed in C.3.3 are illustrative and not exclusive.

40) Given that the SOW suggests that just one intervention will be funded for promotion at scale –how important to USAID is the market basis of innovation vs. the potential for efficiency gain in the delivery of public sector services (or service components)?

a) The SoW is illustrative and more than one intervention could be funded for promotion to scale. In addition, there is no bias on the part of USAID for interventions that are either market-based or targeting public goods; any viable innovation within the broader agricultural sector is encouraged.

41) On pages 2 and 3, the draft states that the contractor will be responsible for designing a process for selection of innovative projects, including performance of market analysis and, as part of its proposal, development of an "innovation measurement scale." However, on page 6 the document states that USAID will lead development of criteria. Please clarify the roles of the contractor and USAID in development of selection criteria.

a) The contractor will be responsible for designing a process for selection of innovative projects, including performance of market analysis and, as part of its proposal, development of an "innovation measurement scale." See also Question 28.

42) Similarly, on page 3 the actual selection of innovations is said to be made by the contractor for Stage 1 applicants and by USAID for Stages 2 and 3. On page 6 it states that USAID will lead the selection of innovations at all stages. Please clarify the relationship between USAID and the contractor in selection of innovations.

a) See Question 28.

43) In regards to engagement with the private sector, is it the intention of the client that the project engage with businesses of a certain size (e.g. successful mid-size enterprises producing food for local consumption, large exporters who have financial and technological leverage or entrepreneurial start-ups working in a supportive, mentored environment)?

a) Engagement with businesses of any size is encouraged.

44) Does USAID expect the contractor to focus on behavior change communications with regard to nutrition and feeding practices (p. 4)?

a) USAID does not expect the contractor to focus on behavior change communications in particular; USAID does expect the contractor to focus on viable innovations that can be brought to scale and have desired impacts as outlined in the SoW.

45) Can you please provide clarification on the level of accountability of the contractor for the Feed the Future outcomes as opposed to the management and success of the innovation process?

a) The contractor’s accountability is limited to the scope of the KFIE SoW.

46) Does USAID anticipate that supported innovations will be “at maturity” (p. 19) by the end of the 5-year KFIE project? In other words must innovations be identified by the end of year 2 or 3?

a) Offerors should refer to Annex 1, “Scaling Innovations” for further guidance on innovation stage timeframes.

47) When does USAID anticipate release of the final KFIE solicitation?

a) If USAID/Kenya proceeds, the 2nd quarter of FY 2012.

48) Can USAID clarify whether joint innovation projects involving Kenyan partners and international technology or solution partners would be eligible? For example, if KFIE identified an opportunity for a position innovation, could the ‘owner’ or promoter of the solution be receiving technical or financial support in the positioning activity?

a) USAID will work with the contractor on a case-by-case basis to determine the eligibility of support in these types of situations.

49) Can USAID clarify whether it would be open to KFEI developing an innovation fund where successful innovators repay into the fund? Would USAID be open to a Fund with cost recovery objectives with the aim of establishing a sustainable fund able to support innovative agriculture ventures in the future?

a) At this point, KFIE is not envisioned to include an innovation fund.

50) Can USAID clarify want it means by on Page 3: “providing capacity building as required to potential recipient to support USAID’s ability to make direct grants”? Does this indicate that USAID aims to provide grants to these recipients directly?

a) Yes; USAID intends to provide direct grants to Stage 2 and 3 recipients. Capacity building to these Stage recipients is intended to include, illustratively, support to the grantees to strengthen their organizational sustainability (such as corporate governance) and financial management.