ERA JA signed.pdf

JUSTIFICATION AND APPROVAL (J&A)

TO: Maria Televantos, Contracting Officer

CC: Deborah Broderick, Agency Competition Advocate

FROM: Jacob Morrin, Private Enterprise Officer, Office of Economic Growth

DATE: August 3, 2020

RE: Contract No. 72012118C00004, the Economic Resilience Activity (ERA)

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 J&A constitutes the justification for other than full and open competition as required by Tab 1 (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.

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

This is a request to approve a contract modification to increase the total estimated cost (TEC) and extend the period of performance (POP) of contract No. 72012118C00004, the Economic Resilience Activity (ERA), implemented by DAI. The proposed modification will: (1) increase the TEC by $10,000,000 from $61,818,364 to $71,818,364; and (2) extend the POP by one year, from August 26, 2023, to August 26, 2024, resulting in a revised activity POP of August 27, 2018, to August 26, 2024.

If approved, this action will contribute significantly to strengthening the economic resilience of eastern Ukraine in the face of COVID-19 by augmenting and expanding existing efforts under ERA’s existing Statement of Work. It will reduce the economic impact of the pandemic on small businesses, allow universities to continue educating youth in the region, and equip the increased number of survivors of domestic violence in the region to find gainful employment.

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

The additional funding and time will allow USAID to adapt existing interventions—and take on new interventions—to mitigate the economic impact of the COVID-19 pandemic in the conflict-affected region of eastern Ukraine, where the resources of governments, communities, and businesses are already strained due to the ongoing conflict.

Additional funding will allow the activity to continue working directly with small and medium enterprises (SMEs), universities, local governments, and entrepreneurs to strengthen their economic resilience in the face of the pandemic. It also allows USAID to address the secondary impacts of COVID-19. For example, in light of increased rates of domestic violence in the region as a result of quarantine measures, ERA will work with survivors of domestic violence to ensure they have the skills needed to find a job upon leaving shelter care An extended POP will allow ERA’s existing interventions to recover from unexpected delays caused by the pandemic, which undermined USAID’s strategic objectives in eastern Ukraine.

Approximately 24% of planned activities, particularly on-site training, in-person consultation sessions with businesses, model city exchange visits, international consultant interventions, and direct agriculture and infrastructure site visits had to be postponed, cancelled, and/or redesigned due to restrictions on travel and movement in the wake of the COVID-19 pandemic. Given the dramatic impact on the Contractor’s planned work in eastern Ukraine, more time will allow technical staff to adapt interventions to the constraints of a new and evolving operating environment, and to allow those activities to fully mature and yield the long-term, sustainable results that will advance the economic development of eastern Ukraine, a key USAID objective.

To summarize, the proposed contract adjustments will allow USAID to adapt existing interventions and develop new interventions within the ERA Statement of Work to respond to COVID-19 by continuing to stabilize the economy of eastern Ukraine. The $10,000,000 ceiling increase will allow DAI to alter its approach to working with SMEs, agriculture producers, partner cities, and educational institutions in light of COVID-19. Specifically, additional support to mitigate the economic impacts of COVID-19 will be provided under the Activity’s current three objectives:

1) Objective 1:Provide Assistance to Stabilize the Economy of Eastern Ukraine:

The Contractor will develop a new intervention to increase women’s participation in the workforce, resulting in improved safety and economic resilience of women who are experiencing, or at risk of, domestic violence as a result of COVID-19 quarantine measures. This intervention will target families in shelters and women experiencing, or at risk of, domestic violence in three conflict-affected oblasts in eastern Ukraine:

Donetsk, Luhansk, and Zaporizhzhia.

With educational institutions, the Contractor will develop business training materials to use on online platforms such as TEDx, Prometheus (a Ukrainian online course platform), YouTube, Facebook, etc. and assist partner universities in building capacity to produce online lectures and hold conferences so that students in the region can continue improving their skills despite COVID-19 quarantine restrictions.

2) Objective 2: Support the Sustainable Development of SMEs: The Contractor will:

(i) develop and conduct a rapid assessment of the consequences of quarantine for local SMEs and the self-employed, and develop mitigation measures; (ii) assist SMEs to design and implement targeted marketing strategies (e.g. for online distribution) to increase sales/revenue; (iii) convert existing business content to online formats in order to continue delivering scheduled workshops, consultations, communications, and outreach in the COVID-19 and post-pandemic environment; (iv) design a Request for Applications (RFA) for grants focused on assisting SMEs to minimize the negative economic impact of COVID-19 and related restrictions, through new interventions, such as online modes of operation, marketing, and distribution; (v) provide firm-specific market monitoring to prevent further “market disorientation” and to help businesses find niches that have opened as a result of market disruptions;

and (vi) increase efforts to connect SMEs with national loan guarantee programs and other sources of finance. In the agriculture sector, the Contractor will expand consulting services on Global Good Agricultural Practices (GAP) and Hazard Analysis and Critical Control Point (HACCP), and begin supporting private sector efforts to expand produce delivery in coordination with local smallholder farmers.

3) Objective 3: Build Confidence in the Future of the Eastern Ukrainian Economy:

The Contractor will pivot its ongoing work with partner cities and (i) conduct a rapid assessment to ascertain how cities are coping with the crisis; (ii) create online discussion platforms for partner cities and communities of all subregions, to catalyze coordinated responses to COVID-19; (iii) help partner cities identify projects that can positively impact businesses or employment issues affected by COVID-19; and (iv) assist cities to procure and utilize IT solutions for remote meetings and online circulation/signature of documents in light of quarantine restrictions.

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

AIDAR 706.302-70(b)(3) and 40 U.S.C. §113; See the “Expedited Procedures Package for Responding to Outbreaks of Contagious Infectious Diseases” approved March 24, 2020. The D&F is attached to this file in Tab 1. The Expedited Procedures Package can only be used for an Infectious Disease Outbreak, as defined in paragraph 2 of the D&F (Tab 1). 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.

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

The economic impacts of COVID-19 are already negatively affecting vulnerable communities in eastern Ukraine, and immediate support is needed to mitigate longer term consequences of the pandemic. DAI is uniquely positioned with the greatest effectiveness and expertise to rapidly implement COVID-19 response activities that will increase economic resilience in eastern Ukraine for the following reasons:

1) Complementarity with Existing Programming: DAI is the current implementer of ERA, and an increase in time and funding will allow DAI to seamlessly build upon the activities and efforts already supported through ERA. For example, DAI is already working closely with businesses in the region to help them connect to new international markets, an intervention that has become even more important considering the global economic impact of COVID-19.

2) Operations: Operationally, DAI has well-established office space and staffing in eastern Ukraine. It has a central office in Kyiv, in addition to three regional offices in the cities of Severodonetsk, Kramatorsk, and Mariupol, which are located in Ukraine’s conflict-affected oblasts. Mariupol is approximately 20 kilometers from the line of contact. Each of these offices is fully staffed with highly qualified technical experts that have built strong relationships with key stakeholders. Given the volatile operating environment, suitable offices and qualified staff in the region are difficult to find, meaning that it would be challenging for an outside party to assemble the resources necessary to provide a timely and cost-effective continuation of ERA’s response to COVID-19.

3) Technical Expertise: DAI’s technical team has developed great expertise as a result of working in eastern Ukraine for over two years. Collaborating with oblast and community governments have provided DAI technical staff with a deep understanding of the economic strengths, weaknesses, and opportunities across the region. This uniquely qualifies them to work effectively to help communities mitigate the negative economic impacts of COVID-19.

4) Relationships with Key Stakeholders: Over the course of two years, DAI has developed strong relationships with stakeholders who have equity in the future of eastern Ukraine’s economy. For example, DAI is working closely with the Luhansk Oblast State Administration and the city of Mariupol to develop and implement long-term economic development strategies. The plans have already helped the oblasts identify regional infrastructure priorities to be included in future national budget requests. Last year DAI also worked closely with Ukraine’s new President to plan an international investment forum in Mariupol, which helped attract new private sector and donor investment to the region. In addition to these key relationships, DAI also maintains active and effective relationships with businesses, associations, and universities. These relationships have led to DAI’s partner universities, for example, being selected by the national government to be part of its pilot program on “dual education,” wherein students do internships with private sector partners as part of their education, and helped catalyze over $6 million of investment in SMEs over the past year. Leveraging this social capital and exercising ERA’s convening authority are key underpinnings of USAID’s COVID-19 response in eastern Ukraine.

5) Ability to Allow Existing Activities to Mature: Prior to the pandemic, DAI’s delivery of interventions was timely. As a result of COVID-19, however, approximately a quarter of ongoing activities have been delayed. For example, a sub-contractor was scheduled to begin working with targeted SMEs to develop growth strategies and identify new international markets, but pandemic travel restrictions have delayed them. Time is needed to sustainably adapt existing activities, allow them to mature, and to produce results. DAI has spent two years laying the groundwork for long-term economic resilience interventions whose results are years ahead of us. If the contract ends in 2023 as planned, DAI will not have adequate time to produce the anticipated high-level outcomes given these unexpected delays. This will devalue USAID’s investment in the region to date.

6) Technical Mandate: The ERA contract requires DAI to improve the overall economic resilience of eastern Ukraine. It defines “resilience” as “the ability of people, households, communities, countries, and systems to mitigate, adapt to, and recover from shocks and stresses.” Though unexpected, COVID-19 is exactly the type of shock DAI is mandated to support by strengthening target communities and making them better able to cope with and respond to shocks of this nature.

7) Performance to Date: DAI has performed exceptionally well in the face of a volatile and fluid operating environment, which has been reflected in USAID’s last two Contractor Performance Assessment Reports. As an award-fee type contract, DAI’s performance has also been documented in its assessments from its award fee evaluations. During these reviews, the Award Fee Board documented positive assessments of DAI’s performance.

These reasons underscore why DAI is uniquely qualified and positioned to provide timely technical assistance and training essential to Ukraine’s economic recovery from the COVID-19 crisis.

e. 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) as it is not practical under the circumstances. Due to the urgent nature of the needed assistance to respond to the immediate economic disruption from COVID-19, it was not practical to solicit offers from potential sources.

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

The estimated budget is based on historical costs for similar services. The Contracting Officer has determined that awarding this TEC increase and POP extension to DAI will cost substantially less and be of shorter duration than competitively procuring a new contract. As the current Contractor for ERA, DAI has established processes, systems, and mechanisms to effectively implement these interventions and has already developed the networks, confidence among stakeholders, and trust among beneficiaries to successfully complete the proposed work.

A new Contractor would require significant additional time and resources to establish itself in the volatile and fluid operating environment of eastern Ukraine—where there is an ongoing conflict—and put operational systems and processes in place, thereby causing unnecessary delay and significantly higher costs.

By signing below, the Contracting Officer determines that the anticipated costs will be fair and reasonable, and in the best interest of the USG. Prior to signing the award modification, detailed proposed costs for the expansion will be reviewed by the Contracting Officer. In addition, upon approval of this justification, the Contracting Officer will review the Contractor’s detailed proposed costs for the expansion and conduct a thorough cost analysis of the proposal, with the same level of rigor as used with a competitive procurement, to ensure that the actual cost to the U.S. Government is fair and reasonable.

g. 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 new market research was conducted. DAI was competitively selected as the ERA contractor through a full and open procurement in 2018. Since the purpose of the proposed extension is to mitigate the effects of COVID-19 on the economy of eastern Ukraine, it is not feasible to select another contractor that would be able to undertake these activities promptly given DAI’s familiarity with the country context, its established relationships with key GOU and private sector counterparts, and its office presence in Ukraine’s conflict-affected oblasts.

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

Publication of a notice is not required per the determination at AIDAR §705.202(b) and no sources submitted a written expression of interest in this acquisition.

i. A statement of the actions, if any, USAID may take to remove or overcome any barriers to competition before any subsequent acquisition of the supplies or services required.

As part of its response to the economic impacts of COVID-19 in eastern Ukraine, USAID is committed to strengthening the capacity of local organizations in line with USAID’s New Partnership Initiative (NPI), which will expand the pool of potential offerors and partners for future procurements and enable wider competition among local organizations.

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 1 (D&F for the Authorization of Less than Full and Open Competitive Procedures in the Modification or Award of Contracts) of the EPP.

Encl. Tab 1- EPP D&F for the Authorization of Less than Full and Open Competitive Procedures in the Modification or Award of Contracts.

CLEARANCE of Justification and Approval (J&A) for Other than Full and Open Competition for Contract No. 72012118C00004, the Economic Resilience Activity.

Drafted: Jacob Morrin, ERA COR

Cleared: Farhad Ghaussy, OEG (ok) 7/30/2020

Pamela Strong, PCS (ok w/edits) 8/03/2020

Kris Dodge, CoS (ok) 08/03/2020

Susan Kutor, DMD and Mission Competition Advocate (ok) 8/03/2020

Tab 1

ERA 2.pdf