EEB NOFO DFOP0019193 Q&A - August 7, 2026.pdf

Questions and Answers

U.S. DEPARTMENT OF STATE

BUREAU OF ECONOMIC, ENERGY, AND BUSINESS AFFAIRS

Pax Silica Artificial Intelligence Assistance Project

FUNDING OPPORTUNITY #: DFOP0019193

Deadline to Submit Questions: August 12, 2026

July 17, 2026

Question #1: Can the Department clarify if the current NOFO is soliciting proposals that cover just Phase 1 of the Pax Silica Artificial Intelligence Assistance Project and the NOFO aims and objectives in Panama, or if proposals should also include Phase 2 scope and additional countries.

DOS Response: Applications should incorporate both Phase 1 and Phase 2 of the project, scoping additional Pax Silica signatories.

Question # 2: Is the envisioned funding in the NOFO for Phase 1 and for Panama, or does it include funding for Phase 2 and other countries?

DOS Response: Total available funding of $50,000,000 is for both Phase 1 and Phase 2.

Question # 3: Can DOS clarify what Pax Silica countries will be included in Phase 2, and whether DOS envisions this to require work in selected Pax Silica countries or just continued work in Panama?

DOS Response: Phase 1 will be launched as a pilot for Panama, but Panama will continue to benefit in Phase 2. Phase 2 is envisioned to include other expected beneficiaries among Pax

Silica signatories and countries/economies targeted by the Department as potential partners.

Applications should propose several potential Phase 2 target countries/economies and include rationales/justifications. The Department will determine final Phase 2 beneficiaries following successful implementation of Phase 1.

Question # 4: Does the Department anticipate utilizing complementary acquisition mechanisms

(e.g., FAR-based contracts or commercial procurements) in parallel with this NOFO to leverage innovative capabilities from for-profit industry partners whose commercially developed technologies and delivery models may complement the no-profit, NGO activities funded under this award? If so, can the Department provide any anticipated timing or approach?

DOS Response: At this time, the Department does not have any complementary acquisition mechanisms (e.g., FAR-based contracts or commercial procurements) planned to run alongside this NOFO. However, the Department may consider such mechanisms in the future if program needs warrant it. Any future opportunities will be announced as appropriate.

July 24, 2026

Question #5: The qualification criteria stated are as follows:

Eligible Applicants: For profit organizations other than small businesses

Is there a way that either my company (small business) or as an individual I can apply for this?

DOS Response: Small businesses are eligible to apply. Please refer to the eligibility requirements in the NOFO below:

The following organizations are eligible to apply: U.S. for-profit organizations or businesses;

U.S.-based non-profit/non-governmental organizations with or without 501(c) (3) status of the

U.S. tax code; U.S.-based private, public, or state institutions of higher education.

Question #6: Section D references a Project Narrative template ("Please use the provided template.") and a Sample Monitoring Indicator Plan for the M&E Plan. Neither appears in the posted grants.gov attachments. Could these be provided? Relatedly, is there a required format or column specification for the Consolidated Project List?

DOS Response: There is no template document for the Project Narrative, but it must include all of the sections and information outlined in the NOFO under Section D, Subsection 7. Project

Narrative. There is no required format or template for the M&E Plan or Consolidated Project

List. Please follow the requirements in Section D. Application Contents and Format.

Question #7: The July 17 Q&A confirmed that applications should incorporate both Phase 1 and Phase 2. Should Phase 1 and Phase 2 be presented as a single project, or as separate projects evaluated independently within the application, and should the Detailed Line-Item Budget be structured as a single workbook with a tab per project accordingly?

DOS Response: Applications should cover both Phase 1 and Phase 2. Both Phase 1 and Phase 2 should be presented and budgeted as one project, either as separate tabs or as one tab separated by the years in which they occur in the project period of performance.

Question #8: The July 17 Q&A also indicated that applicants should propose several potential

Phase 2 target economies with rationales, while the Department determines final Phase 2 beneficiaries after Phase 1. For the Country of Impact element and the budget, how should applicants allocate estimated funds across Panama and the proposed-but-not-final Phase 2 economies - for example, a defined Phase 1 (Panama) allocation with Phase 2 as a planning estimate, or specific allocations to each proposed economy?

DOS Response: Applicants should budget a defined Phase 1 allocation for Panama allocation with Phase 2 as a planning estimate.

Question #9: The NOFO requires Department approval of all sub-awardees and foreign participants. Must all proposed sub-awardees and in-country participants be identified in the application, or may some be named after award, subject to Department approval?

DOS Response: Not all potential sub-awardees need to be identified in the application. Those identified in the application will be approved when an award is issued. Additional sub-awardees may be named after award and then will be subject to Department approval at that time.

Question #10: For the Organizational Capacity and Record on Previous Awards criterion, will the organizational record and past Federal performance of proposed sub-awardees be considered alongside that of the prime applicant?

DOS Response: Applicants are required to provide the type of involvement and experience/qualifications of any partner organizations and sub-awardees in their proposal.

Question #11: The NOFO's Eligible Applicants section lists "U.S. for-profit organizations or businesses" with no size restriction, while the Grants.gov applicant-type category for this opportunity reads "For profit organizations other than small businesses." Please confirm that

U.S. small businesses are eligible to apply under the Section B eligibility criteria.

DOS Response: Please see response to Question #5.

Question #12: The notice lists "for-profit organizations other than small businesses" as the applicant type. May US small businesses participate as consortium members, subrecipients, or partners on a prime's application, and would you point us to teaming interest if so?

Question #13: Are projects located in strategically significant non-signatory countries, such as

Nigeria, within the scope of Pax Fund assistance, or is funding limited to Pax Silica signatory partners?

DOS Response: Activities are limited to countries and economies that are listed in Section A, Part 2 of the NOFO.

Question #14: Are national labs eligible to compete for this award and if so, would EEB be able to award funds via an Inter-Agency Agreement (IAA) rather than a Cooperative Agreement?

DOS Response: Only the following organizations are eligible to apply: U.S. for-profit organizations or businesses; U.S.-based non-profit/non-governmental organizations with or without 501(c) (3) status of the U.S. tax code; U.S.-based private, public, or state institutions of higher education. Organizations outside these categories are not eligible to apply for this opportunity. The Department intends to award only via Cooperative Agreement(s).

Question #15: Are U.S. small businesses eligible to apply directly as the lead applicant? If small businesses are not eligible as lead applicants, may they participate as consortium members, subcontractors, subrecipients, or technology partners under an eligible larger company?

Question #16: Would an AI-enabled semiconductor infrastructure and supply-chain resilience project fall within the intended scope of this funding opportunity

DOS Response: Please see Section C. Program Description of the NOFO for project background and objectives.

Question #17: For a for-profit applicant, which subparts of 2 CFR 200, 2 CFR 600, or FAR Part

31 are applicable to this award? We want to confirm the correct compliance framework and suggest that the Department consider limiting the applicable requirements scope to the NOFO's own stated restrictions (i.e., only Sub-Chapter A through D of 2 CFR 200). Given that for-profit entities already maintain GAAP-compliant audited financials, we ask whether the Department's oversight objectives can be met without the additional layering of other parts of 2 CFR 200, FAR

Part 31, or 2 CFR 600 cost principles?

DOS Response: The Department does not apply Subpart E of 2 CFR § 200 to U.S. and foreign for-profit entities. For for-profit entities, 2 CFR § 200, Subparts A through D apply, except where the application of these subparts would be inconsistent with the international obligations of the United States or the statute or regulations of a foreign government; the Federal Acquisition

Regulation (FAR) at 48 CFR Part 30 (2020)—Cost Accounting Standards and 48 CFR Part 31.2

Contract Cost Principles and Procedures take precedence over the cost principles in 2 CFR §

200, Subpart E for Federal awards.

Question #18: Can the Department confirm that the cost principles stated in Section B.2 (per 2

CFR §200, Subpart E - Cost Principles) apply when evaluating both a for-profit recipient's cost-share contributions and all other recipient expenditures under this award?

DOS Response: The Federal Acquisition Regulation (FAR) at 48 CFR Part 30 (2020)—Cost

Accounting Standards and 48 CFR Subpart 31.2—Contract Cost Principles and Procedures takes precedence over the cost principles in 2 CFR § 200, Subpart E, for Federal awards to U.S. and foreign for-profit entities. For all other applicants, all proposed cost sharing, matching, or cost participation must comply with 2 CFR §200.306. Items that are proposed for cost share must be allowable per 2 CFR §200, Subpart E—Costs Principles.

Question #19: May an applicant initially propose using the de minimis rate with the understanding that the negotiated rate, once finalized, could be applied prospectively or through a post-award modification to more accurately reflect the organization's actual indirect cost structure?

DOS Response: The Department does not apply Subpart E of 2 CFR § 200, which established the de minimis rate, to for- profit entities. Instead, for-profit recipients who do not have a formally established overhead or General and Administrative (G&A) rate should allocate indirect costs into the appropriate direct cost categories.

Question #20: Given the Department's stated interest in rapid, milestone-driven implementation and its substantial-involvement role in this cooperative agreement, does the Department anticipate structuring this award as a fixed amount award under 2 CFR §200.201(b) — an approach that ties disbursement to the successful completion of defined milestones and measurable outcomes rather than to line-item cost reconciliation, thereby reducing administrative burden on both the recipient and the Department while accelerating delivery? Relatedly, consistent with 2 CFR §200.201(b) and 4 FAM 610–614, would the Department permit applicants to propose a fixed fee within their budget structure as a means of attracting the most capable commercial performers and ensuring sustained private-sector commitment through the pilot and its envisioned non-U.S.-Government-funded continuation?

DOS Response: This award will be a Cooperative Agreement, in which the Department of State will have substantial involvement in implementation. Applicants may propose subawards via fixed amount awards consistent with 2 CFR §200.201(b).

July 31, 2026

Question #21: The NOFO identifies the anticipated instrument as a cooperative agreement, requires detailed budget and financial reporting, and states that administration of a project that will make a profit is impermissible, although projects may generate program income. Please clarify:

Whether the anticipated awards will be cost-reimbursement, fixed amount, milestone-based, unit-priced, or use another payment structure;

Whether applicants should exclude all fee or profit from their proposed budgets; and

How the Department will distinguish allowable cost reimbursement, fee or profit, program income, and any properly retained residual funds.

If fee or profit may be authorized, please identify the applicable statutory, regulatory, and

Department policy authority.

DOS Response: The Department anticipates awards will be cost-reimbursable. Activities and costs for the administration of a project that will make a profit are not permissible and not covered under this announcement.

Projects may generate program income. Program income is income earned by the recipient that is directly generated by a supported activity or earned as a result of the award. Examples of program income include ticket sales for events funded through an award, fees paid by beneficiaries for services performed, the use or rental of real or personal property acquired under an award, the sale of items made under an award, license fees and royalties on patents and copyrights, and interest on loans made with award funds. Interest earned on advances of Federal funds is not program income.

Any fees must be reasonable, allocable, and necessary for the federal award, and costs must comply with the recipient’s regular accounting practices and federal cost principles. Under 2

CFR § 200.459 costs for professional and consultant services provided by individuals with specialized skills or professional credentials, who are not employees of the recipient or subrecipient, are generally allowable under federal awards. Legal and related services are subject to additional limitations under § 200.435. Please refer to 2 CFR Part 200 Subpart E -- Cost

Principles for additional information on allowable costs.

Question #22: 2 CFR 200.201(b) addresses fixed amount awards, rather than fixed fees or fixed-price procurement contracts. If the Department is considering a fixed amount award for any project under this NOFO, please explain how that structure would be reconciled with:

The Department’s anticipated substantial involvement under the cooperative agreement;

The NOFO’s detailed line-item budget and cost-justification requirements;

The stated financial-reporting requirements; and Awards ranging from $1 million to $50 million.

Will any decision to permit or require a fixed amount structure be announced through a formal

NOFO amendment before applications are due?

DOS Response: Awards under this announcement will be via cooperative agreements, in which the Department of State will have substantial involvement in implementation. Substantial involvement will be outlined in the award provisions. Applicants may propose subawards via fixed amount awards consistent with 2 CFR §200.201(b). The Department will not announce a fixed amount structure through a formal NOFO amendment before applications are due.

Question #23: If the Department contemplates paying a commercial price that includes profit in exchange for developing or delivering a technology platform or related services, what analysis supports using a cooperative agreement rather than a procurement contract under 31 U.S.C. 6303 and 6305? Please clarify whether the principal purpose of the award is to support or stimulate an authorized public purpose or to acquire a platform or services for the direct benefit or use of the

United States Government.

DOS Response: This foreign assistance initiative partners with Panama and other likeminded economies to jointly build a trusted digital credentialing and provenance platform that strengthens the security and integrity of global AI supply chains—covering AI infrastructure, semiconductors, and critical minerals—for the mutual benefit of all participating nations. The initiative empowers Panama and Pax Silica partners to modernize their trade infrastructure, reduce compliance burdens, and strengthen their positions as trusted, efficient nodes in the global

AI supply chain—delivering durable, shared benefits rather than solely a direct benefit to the

U.S.

Question #24: Will any change affecting the following subjects be issued as a formal amendment on Grants.gov and communicated simultaneously to all prospective applicants?

Funding-instrument or payment structure;

Authorization of fee or profit;

Eligible-applicant requirements;

Past-performance or organizational-capacity requirements;

Review criteria or point allocations;

Technical scope or mandatory architecture;

Required partnerships; or Intellectual-property, data-rights, or sustainability requirements.

For any material amendment, will the Department extend the August 20, 2026 application deadline sufficiently to allow all applicants to revise their technical and cost proposals?

DOS Response: The Department does not anticipate any material amendment that will extend the August 20, 2026 application deadline.

Question #25: The NOFO states that the Department will not conduct individual meetings concerning proposal specifics and will publish questions and answers through Grants.gov.

Please confirm that all technical assistance, interpretations, clarifications, and other material guidance affecting scope, eligibility, cost structure, evaluation criteria, or preferred implementation approaches will be made widely available to all potential applicants consistent with 2 CFR 200.204. Before or after issuance of the NOFO, has the Department provided any prospective applicant, technology provider, logistics provider, proposed subrecipient, or consortium participant with material nonpublic guidance on these subjects?

If so, will the Department publish the material substance of that guidance so all applicants may compete using the same information?

DOS Response: The Department has not provided any prospective applicant, partner, or provider with material nonpublic guidance. All technical assistance, interpretations, clarifications, and other material guidance affecting scope, eligibility, cost structure, evaluation criteria, or preferred implementation approaches is and will be made widely available to all potential applicants on Grants.gov.

Question #26: Will applications be evaluated without an unstated preference for a particular cloud provider, AI platform, logistics company, technology stack, commercial partner, or organization with which the Department has previously collaborated?

If the Department requires or prefers a particular architecture, provider relationship, interoperability standard, existing commercial platform, or implementation partner, will that requirement or preference be disclosed through a formal amendment before applications are due?

DOS Response: Applications will be evaluated fairly and objectively following the evaluation criteria outlined in the NOFO.

Question #27: The proposed platform would evaluate cargo and inspection information, identify shipment discrepancies, and support known-party, trusted-shipper, or “Fast Lane” determinations. Will applicants be required to disclose whether they, their parent companies, subsidiaries, affiliates, proposed sub-recipients, or material commercial partners:

Operate shipping, freight-forwarding, customs-brokerage, logistics, warehousing, import, export, or marketplace businesses;

Own or control entities whose shipments could be evaluated by the platform; or

Have a commercial interest in the scoring or expedited treatment of particular parties?

What mitigation measures will be required, including independent verification, segregation of duties, information firewalls, third-party audits, recusal, restrictions on commercial use of protected data, and independent review of shipments involving the recipient or its affiliates?

DOS Response: Per 2 CFR 200.112, a recipient or subrecipient must disclose in writing any potential conflict of interest to the Federal agency or pass-through entity. Applicants are to note any potential conflicts of interest in the application, including but not limited to whether they, their parent companies, subsidiaries, affiliates, proposed sub-recipients, or material commercial partners:

Operate shipping, freight-forwarding, customs-brokerage, logistics, warehousing, import, export, or marketplace businesses;

Own or control entities whose shipments could be evaluated by the platform.

Have a commercial interest in the scoring or expedited treatment of particular parties.

Any necessary mitigation measures will be addressed as part of the award provisions.

Question #28: Will all merit-panel reviewers, advisers, and government or non-government subject-matter experts be required to disclose and recuse themselves when they have current or recent:

Employment, consulting, financial, or board relationships with an applicant or affiliate;

Participation in developing an applicant’s proposed solution;

Collaboration with an applicant concerning Pax Silica or a related initiative; or Financial interests in a proposed technology or logistics provider?

Please clarify what period of prior relationships will be considered and how reviewer conflicts and recusals will be documented.

DOS Response: Department employees are governed by the conflict of interest and appearance of impartiality restrictions codified in 18 USC 208 (2017); 5 CFR 2635 (2020), and 5 CFR 2640

(2016). All merit-panel reviewers are required to certify they do not have a conflict of interest per the federal regulations above. A reviewer who cannot certify they can be totally objective and free from conflict of interest or impartiality concerns will not be permitted to participate in the merit-review panel.

Question #29: The NOFO permits U.S. for-profit businesses to apply, assigns 15 points to

Organizational Capacity and Record on Previous Awards, and requests a list of recent U.S.

Government-funded awards, with a maximum of 10. Please confirm that:

The maximum of 10 awards is a ceiling rather than a minimum;

An applicant with fewer than 10 qualifying awards remains eligible;

An applicant with no qualifying award active during the previous 24 months may state that fact without being found technically ineligible; and Applicants may demonstrate capacity through relevant commercial projects, Federal contracts, state or local government work, foreign-government projects, subawards, audited financial systems, and key-personnel experience.

Will the number or dollar value of previous U.S. Government assistance awards independently affect the Organizational Capacity score, or will the Department evaluate the underlying evidence of technical, managerial, and financial capability? Does the Department anticipate introducing any minimum award number, dollar value, agency source, or prime-recipient requirement before the application deadline?

DOS Response: Applicants are asked to provide up to 10 recent USG funded awards that have been active in the last 24 months with references and award numbers. Applicants with fewer than

10 qualifying awards, including none, are still eligible. Applicants may provide experience with commercial projects, Federal contracts, state or local government work, foreign-government projects, subawards, audited financial systems, and key-personnel experience. The number or dollar value of previous U.S. Government assistance awards will not affect the Organizational

Capacity score. The Department will assess Organizational Capacity and Record on Previous

Awards based on the criteria outlined in Section F. The Department does not anticipate introducing any minimum award number, dollar value, agency source, or prime-recipient requirement before the application deadline.

Question #30: How will the Department evaluate an applicant that has substantial technical or commercial capability but limited Federal financial-assistance experience and has only recently retained a grants-management company, accounting firm, consultant, affiliate, or other outside provider?

Please clarify:

Whether required financial-management, internal-control, cost allow-ability, and grant-accounting procedures must be operational at the time of application, before award, or by the beginning of performance;

Whether the experience and systems of recently retained outside providers may be credited as the applicant’s organizational capacity and what binding documentation must support that reliance;

Whether an applicant proposing to establish these capabilities after selection may receive the same Organizational Capacity score as an applicant with established and demonstrated Federal-award management systems.

Please confirm that these standards will be applied consistently regardless of company size, commercial market position, prior Department relationships, or proposed partners.

If an applicant lacks established financial-management capacity, please explain whether the

Department may impose specific conditions under 2 CFR 200.208, including reimbursement-only payments, enhanced reporting, additional monitoring, management assistance, or additional prior approvals.

DOS Response: Under 2 CFR part 200 and the OMB Guidance for Federal Financial

Assistance, a recipient organization can hire a grants-management company, accounting firm, consultant, affiliate, or other outside provider to assist with managing a U.S. federal assistance award, provided the arrangement complies with federal grant rules. The experience and systems of outside providers may be credited toward the applicant’s organizational capacity in terms of fiscal management of funding (e.g., successful management of a previous award or sub-award).

The prime applicant must be able to demonstrate the outside provider’s experience and capacity in managing federal awards and must establish the legal relationship before an award is issued.

The applicant must still be able to demonstrate experience in the proposed country/territory/region and in its stated field. Evaluation criteria will be applied consistently and fairly across all applicants. The Department retains the right to impose specific conditions under

2 CFR 200.208 before awarding if it deems appropriate following a risk assessment.

Question #31: Section D's Project Narrative contents include an EEB Unique Identifier using the convention Implementer_FiscalYear_001. The opportunity title references FY26, while the anticipated period of performance begins October 1, 2026, which falls in FY27. Which fiscal year should applicants use in the identifier?

DOS Response: Please use FY26 in the naming convention.

Question #32: Section D.9 lists the attachments that will be included in the evaluation (CVs, NICRA, past performance statement, and official permission letters). May applicants include signed letters of interest from in-country private-sector stakeholders as additional attachments, and if so, will they be considered in the evaluation?

DOS Response: Signed letters of interest from in-country private sector stakeholders will not be considered in the evaluation. The Department requests that applicants not solicit such letters at this time.

August 7, 2026

Question #33: Is the Silicon Highway platform meant to be one integrated system, or a layered stack where credentialing/provenance and inspection/risk-scoring could come from different vendors? (This tells us whether to position as prime, sub, or a packaged two-capability offering.)

DOS Response: The platform is meant to be one system integrating a diverse array of existing customs, port operator, and shipper tracking systems. Expedited by AI, the platform should ingest and fuse digital and physical tracking data for high-value AI supply chain products— giving greater visibility on provenance from point of origin to destination.

Question #34: Since ISC is already running live with chain-of-custody verification in the Dry

Canal, is the Department planning to build on existing commercial deployments there, or is

Phase 1 meant to be a clean-sheet build?

DOS Response: See response to Question #33. The platform will not be a standalone product but will integrate with wide array of software products that shippers, freight forwarders, port authorities, disaggregation/reaggregation points, and customs are already using.

Question #35: Is there a preferred technical standard or API framework for integrating with the

Panama Canal Authority and customs systems?

DOS Response: There is no preferred technical standard or framework for integrating with the

Panama Canal Authority and customs systems. Applicants should outline which standards and frameworks they are proposing along with justifications.

Question #36: Do Phase 1 winners get any kind of fast-track into the Phase 2 multi-country expansion, or is that a fully separate competition?

DOS Response: Selected awardees will be expected to carry out both Phase 1 and Phase 2 of the project under the award. As a cooperative agreement, the Department will have substantial involvement in project activities and will work with the implementer to identify potential Phase 2 benefitting countries.

Question #37: Is the department emphasizing compliance/inspection capability or the customs-tech/logistics side, or looking for someone who bridges both?

DOS Response: The Department is interested in applicants who can demonstrate both compliance and inspection capability and customs tech and logistics expertise and experience, either as a prime applicant or as a consortium of organizations.