AWDP_J A_TEC_increase_and_ACA_Approval.pdf

Justification and Approval for Other Than Full and Open Competition (J&A)

DATE: January 20, 2016

TO: Deborah Broderick, Agency Competition Advocate

THROUGH: Herbert Smith, Mission Director

FROM: Susan Kutor, OEG Office Director

SUBJECT: Justification and Approval (J&A) for Other than Full and Open Competition to extend the period of performance and increase the Total Estimated Cost

(TEC) of Contract No. AID-306-C-12-00007 with Creative Associates

International (CAI) for the Afghanistan Workforce Development Program

(AWDP)

1. This document sets forth the facts and rationale justifying the use of other than full and open competition, in accordance with AIDAR 706.302-70 (b)(5), Impairment of Foreign

Aid Programs, continued provision of highly specialized services. This document was prepared by:

Contracting Agency: U.S. Agency for International Development (USAID)

Contracting Activity: USAID/Afghanistan

Cognizant Technical Office: Office of Economic Growth (OEG)

Activity Title: Afghanistan Workforce Development Program (AWDP)

Contract Number: AID-306-C-12-00007

Period of Performance: April 5, 2012 to April 4, 2016

Location: Afghanistan

2. The Nature and/or description of the action being approved:

This is a request to approve a non-competitive contract modification to Contract Number AID-

306-C-12-00007, Afghanistan Workforce Development Program (AWDP) (hereafter referred to as the “contract” or “off-budget” mechanism), implemented by Creative Associates International

(CAI). This modification will increase the total estimated cost (TEC) of the contract by $18.5 million dollars from $32,647,898 to $51,147,898 and extend the period of performance by two years from April 5, 2016 to April 4, 2018, in order to continue a training and job placement program.

Under this proposed contract modification, the additional $18.5 million will support the provision of training for more than 22,000 individuals, and the placement, promotions, or salary increases for at least 12,000 mid-career/semi-professional Afghans.

The additional funding will support the U.S. foreign assistance objective of maintaining security in Afghanistan by ensuring continuity in our support to the Afghan economy during the fragile security, economic, and lingering effects of the political transition to the Ghani administration.

Specifically, the increased funding is to ensure that the weak job market continues to receive support for mid-career/semi-professional training programs to boost the economy or, at a minimum, help strengthen the fragile economy. According to a World Bank study on

Afghanistan's economy, Afghanistan risks sharp reductions in economic growth during this period of transition that could contribute to new instability and undo the development gains of the past decade . At the same time, the need to employ a large number of people in Afghanistan is urgent – and the top priority of President Ghani’s recently announced “Jobs for Peace” initiative. USAID has been explicitly asked by the President’s office to support this initiative.

The AWDP consists of two implementing mechanisms: one “on-budget” and one “off-budget.”

The on-budget mechanism is an agreement between the Government of Afghanistan (GoA) and

USAID as outlined in an Implementation Letter (IL). The off-budget mechanism is the subject direct contract between USAID and CAI. AWDP’s combined goal for both mechanisms is to increase job placements, salaries/wages and self-employment opportunities for at least 25,000

Afghans, 25 percent of whom will be women, through increased access to quality technical and business education training programs and through job placement support services.

The AWDP was designed so that both mechanisms are fully integrated such that the scope, activities and focus of the program’s objectives are highly interdependent. The off-budget contract to CAI was awarded on April 5, 2012 after a full and open competitive solicitation process. The contract provides: (1) technical assistance and capacity building to the Ministry of

Education (MoE) to implement the on-budget AWDP, and (2) technical assistance to the private and public training institutions to provide quality training and job placement services to meet private sector demand as identified through market surveys.

The AWDP’s on-budget mechanism was signed on September 18, 2013 with the GoA to be implemented by the MoE. Due to the MoE’s limited program management capacity, it has been slow to program the on-budget funding of $30 million for training and job placement programs, as stipulated in the IL. The delays in the start-up phase were initially addressed in the form of a revision of the milestone schedule. Further delays were caused in July 2015 when the Minister of Education shifted the procurement staff from the Deputy Ministry of Technical Vocational

Education and Training (TVET) to the Ministry’s central procurement unit. The shift of these staff, which came as the program was finally gaining momentum, has severely interrupted the procurement process, adversely impacting the achievement of the on-budget program’s targets.

In order to expedite the achievement of results from the combined AWDP programs, USAID will move funding from the AWDP “on-budget” mechanism to the “off-budget” contract with

CAI. This J&A will provide the authority to modify the AWDP off-budget contract to increase the funding and extend the time to more quickly provide important and urgent training and job placement to stimulate employment opportunities required in the Afghan economy.

.(World Bank October 2015, Afghanistan Development Update)

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

The AWDP contract with CAI is the principal USAID implementing mechanism that addresses the challenges of high unemployment caused by the gap between the limited number of Afghans who possess technical and business management skills at the mid-career/semi-professional level and the market demand for these skills. The program strengthens efforts by the Afghan government, the U.S. government, and other donors to create and enhance job opportunities, while improving technical and vocational education and business management training programs in promoting long-term economic growth. The program, which employs a unique methodology, has been highly successful.

The AWDP contract provides the only Technical Vocational Education and Training (TVET) and Business Education Skills Training (BEST) program nationwide specifically focused on a vital subset of the Afghan workforce -- mid-career/semi-professional level employees and jobseekers. 83% of the AWDP’s trainees can be categorized in this way, while 63% have either advanced degrees or have received technical training from TVET institutions before participating in the program. Investment at the mid-career/semi-professional level yields the highest return in the shortest period as this is the cadre of business managers and production supervisors that drive the businesses forward.

This proposed modification will allow USAID to provide a trained workforce to those businesses that seek to hire employees and the placement of mid-career and semi-professional individuals in new or better jobs and provide technical assistance and build the capacity of the MoE.

The tasks during the two year extension period include:

Train more than 22,000 individuals in modern, market-driven TVET, and BEST courses out of which at least 25 percent will be women; and

Provide additional private sector employment for job seekers, promotions for current employees, or salary increases to at least 12,000 mid-career/semi-professional Afghans by April 2018, which will contribute towards the AWDP’s combined (on-budget and off-budget) target of 25,000 Afghans placed.

Provide technical assistance and capacity building to the Ministry of Education (MoE) to implement the on-budget AWDP.

The above tasks are a continuation of the provision of the highly specialized services provided by CAI and are within the general scope and objective of the AWDP contract. The estimated value for the performance of the above listed tasks is $18.5 million.

4. Statutory authority permitting other than full and open competition:

In accordance with AIDAR 706.302-70(b)(5), under title 40 U.S.C. 474, an exception to full and open competition is allowed for the continued provision of highly specialized services “when file:///C:/Users/kadel/AppData/Local/Temp/1/Temp1_AWDP%20Potential%20Extension%20for%20Consideration_9_15_16%20(2).zip/AWDP%20Potential%20Extension%20for%20Consideration_9_15_16.doc%23Ann915 file:///C:/Users/kadel/AppData/Local/Temp/1/Temp1_AWDP%20Potential%20Extension%20for%20Consideration_9_15_16%20(2).zip/AWDP%20Potential%20Extension%20for%20Consideration_9_15_16.doc%23Ann914 award to another resource would result in substantial additional costs to the government or would result in unacceptable delays.”

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

The services currently provided by CAI under the AWDP contract are “highly specialized”, and giving an award to another resource would result in unacceptable delays, as follows:

(a) The services provided by the current resource are highly specialized:

CAI has developed a unique four-pillar model , which is demand assessment, curriculum development, training and placement for the development and delivery of its training and placement services aimed at mid-career and semi-professional individuals, and a catalog of 250 modular, tailor-made, competency-based, demand-driven training that has proven highly effective in the truly unique Afghan context. CAI has developed a relationship with firms inside

Afghanistan to develop several completely novel curricula which offer the promise of opening up new employment markets in sectors such as Information and Communication technology

(ICT), healthcare, and manufacturing, which represent substantial unmet demand and are currently unaddressed by any other workforce development program in the country.

By the end of the current completion date CAI will have provided competency-based, demand-driven training to more than 22,000 mid-career, semi-professionals and the placement of at least

12,000 of them in new or better jobs in the country’s major commercial centers. CAI’s implementation of a highly specialized model for the unique Afghan context integrates the services of a) identifying the needs of hundreds of private Afghan companies; b) developing targeted short-term training programs that effectively meet those needs; c) identifying and recruiting tens of thousands of young Afghans throughout the war-torn country; d) identifying dozens of local training institutions that can conduct the training; e) executing and monitoring contracts with these training institutions; and f) protecting expatriate and Afghan staff from the constant threat posed by the Taliban and other anti-Government, anti-Western forces. This unique and effective four pillar model has been extremely successful in managing the logistical and security challenges of operating in Afghanistan.

CAI has developed a proprietary, on-line Performance Management Information System (PMIS) that records data on all private firms that receive training from this program for their current employees or who hire job seekers trained by CAI. These firms are listed as not only active, but as growing with a demonstrated capacity to hire personnel who have graduated from AWDP training programs. The PMIS system is also part of CAI’s comprehensive monitoring and evaluation verification system and program and allows CAI to make rapid adjustments in sectoral focus in response to regularly evolving, real-time market demand information. CAI has a program management and operations apparatus which is customized to Afghanistan and available in all of the major commercial centers of the country including Kabul, Herat, Mazar-e-

Sharif, Kandahar, and Jalalabad, enabling them to scale-up very rapidly and produce results in a very short period of time. CAI successfully piloted the use of job fairs in matching talent to positions in two of the country’s major economic centers: Herat and Mazar-e-Sharif. This was the first time job fairs were organized in Afghanistan and these require in-depth knowledge of the cultural context and trusted relationships with the private and public sector actors to be successful.

CAI has repeatedly surpassed its performance targets over the last three years of its contract.

The targets for the AWDP off-budget contract were to train 23,280 mid-career professionals and to place 13,000 of them, with 15% of those placements to be women. CAI demonstrated their capacity by exceeding all performance targets by successfully training 26,265 mid-career workers and placing 15,500 of them, with 36% of those placements being women. In addition, CAI developed a collegial relationship with the Ministry of Education which is responsible for technical and vocational education, and training within the GoA.

As demonstrated above, CAI has the expertise to train and place the requisite number of employees/jobseekers in new positions urgently needed over the next two years. The proven unique combination of programming, process, and logistics in the very challenging Afghan context demonstrates the highly specialized services provided by CAI.

(b) Award to another resource would result in unacceptable delays:

The country’s present political, security and economic reality is extremely fragile, and the outmigration of Afghans proves that many have already lost hope. For others who do not have the economic resources to leave the country, the only alternative is to join the Taliban to support themselves and their families, thus increasing insecurity in the country. As a consequence, every day, thousands of Afghans line up at the Ministry of Foreign Affairs for passports, seeking to leave the country to find work which undermines the GoA’s base of support and results in a

“brain-drain” in the country. Continued economic weakness also undermines the legitimacy and political support for the Government of Afghanistan (GoA). This is also demonstrated in that over the last few months, the city of Kunduz fell to militants, DAESH (i.e., ISIS) fighters have gained ground in Nangarhar province, and there is presently fighting in Kandahar.

Consequently, the need for the government to mount an urgent and effective response is palpable.

In an effort to stem this tide, the current government has developed a strong, long-term development agenda, one that fights corruption, repairs the Government’s damaged finances, and lays the ground for private sector investment and job creation; however, the Government still needs to provide an immediate, tangible response to the country’s growing frustration over the lack of economic progress. The Office of the President of Afghanistan has asked USAID to support his 18-month “Jobs for Peace” initiative, the hallmark of which is to endeavor to create as many jobs as possible in as short a period of time as possible. This will create a stabilizing influence on the country’s economy, help to address the outflow of refugees, impart a measure of stability, and build support and momentum for the government’s reform agenda. Failing to adequately support this initiative would undermine the work of USAID and the Government of

Afghanistan. While the President’s initiative spans eighteen months, USAID’s response will require two years to accommodate the additional time required to start-up the additional job training and placement activities and close-out the program.

Increasing the TEC and period of performance of the CAI contract for these activities is the most efficient and effective way for USAID to support President Ghani’s Jobs for Peace initiative.

Competing the $18.5 million job training and placement activities would cause unacceptable delays given the current economic, political, and security uncertainties that Afghanistan is facing. Competing will take at least 10 months to issue the solicitation, conduct the evaluation, enter discussions, and make an award. In addition, a new contractor will need time for the start-up phase of the activity typically lasting up to six months to mobilize and begin programs. This does not include the additional time it would take to establish relationships with the private sector and understand its needs, conduct trainings, and perform job placement activities. The incumbent contractor, CAI, has been implementing AWDP since April 4, 2012 and the contractor has established a strong relationship with the private sector and will build on those relationships during the extension period. In addition, the contractor is extremely knowledgeable of the demands of the private sector. The training of 22,000 people over an 18 month placement period is so large an undertaking that no single local firm could undertake this task. The present program employs seventy-two local firms to deliver the trainings via its Grants Under Contracts

(GUC) component. This component competitively selects local firms to execute the actual trainings. A typical grantee in this program will take nine months to train and place 500 people.

Thus, it would take 22 local firms to deliver this intensity of training over the 18 month period of time in order to meet the program’s training and placement objectives.

6. Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by Federal Acquisition Regulation (FAR) 5.2 [AIDAR 705.202]:

The requirement per FAR 5.201 to publicize the intended award (contract modification) applies and a notice will be published in FedBizOpps (www.fbo.gov) before any modification to increase the TEC of the CAI contract is issued. All responses to the published notice will be reviewed, considered, and the file documented accordingly.

7. A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable:

An independent government cost estimate (IGCE) for the work proposed is approximately $18.5 million. The Contracting Officer has reviewed the IGCE and is satisfied that it represents a reasonable estimate of performing the work based on the previous acquisition history. The proposed work is the same as what has been successfully completed and the costs will not differ substantially from those previously experienced. Any significant deviation from cost estimations will be thoroughly scrutinized. No modification will be awarded unless the proposed cost is determined to be fair and reasonable.

8. Description of the market research conducted, and the results or a statement of the reason market research was not conducted:

No market research was conducted. No local capacity exists for the services provided by CAI. Although there may be other international contractors with similar skills, there are none with the specialized knowledge of this project and none that can be mobilized in a reasonable amount of time to take advantage of the momentum that has already been achieved.

http://www.fbo.gov/

9. Other facts supporting the use of other than full and open competition:

During the past three and a half years, CAI has successfully trained 26,265 Afghans and found job placements for 15,500 training program participants, 36 percent of which were women.

These results have been accomplished through 68 competitively awarded training grants (GUCs) to 39 separate training enterprises in the six largest cities. The grants provided technical assistance to each grantee to enable them to be labor market-oriented, develop appropriate competency-based training curricula and monitor and evaluate each training program. It is vital that the additional proposed funding to the contract’s GUCs component be increased to train additional Afghans in the immediate future. Continuing to provide technical assistance and capacity building to the Ministry of Education will allow the MoE to successfully implement the eleven awarded and seven yet to be awarded contracts by the MoE.

One of USAID/Afghanistan’s priorities has been the use of cross-cutting initiatives that support the growth of the local economy. Using Afghan private sector training firms directly supports the Mission’s 10 year forward plan of utilizing local firms to the largest extent possible. AWDP is a successful example of the Mission’s “Afghan First” implementation approach. CAI has developed a capable and responsive group of Afghan private sector training enterprises

(grantees). The decision criteria established to select these grantees are in place to ensure future selection of productive and effective Afghan grantees.

10. Sources, if any, that expressed, in writing, an interest in the acquisition:

No expressions of interest have been received. Any responses from publicized notice of intent to award will be carefully considered by the contracting officer.

11. The actions the Agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required:

No barriers to competition are foreseen for future procurements. USAID/Afghanistan anticipates that any follow-on mechanism to the AWDP contract will be subject to full and open competition. Under this proposed modification for increased funding to continue mid-career/semi-professional training and job placement programs to meet Afghanistan’s immediate labor market job training and placement needs, tasks will be completed by April 4, 2018.