J_A_SHAHAR.pdf

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN

COMPETITION (J&A)

DATE: April 18, 2020

TO: Deborah Broderick, Agency Competition Advocate

THROUGH: Peter Natiello, Mission Director, USAID/Afghanistan

FROM: Jennifer Pike, Director, USAID/Afghanistan, Office of Democracy and Governance

SUBJECT: JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN

COMPETITION (J&A)/10-month extension and $1,499,999 ceiling increase for Strong Hubs for Afghan Hope and Resilience (SHAHAR), Contract No.

AID-306-C-14-00016

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 Democracy and Governance (ODG) Activity Title: Strong Hubs for Afghan Hope and Resilience

(SHAHAR)

Contract Number: AID-306-C-14-00016 Contractor: DAI Period of Performance: November 30, 2014, to May 29, 2020 Location: Afghanistan

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

This is a request to approve:

a) a $1,499,999 increase in the Total Estimated Cost (TEC) of cost plus-fixed-fee contract

no. AID-306-C-14-00016. Current TEC: $72,000,000; Proposed TEC: $73,499,999 (2.1% TEC increase).

b) a ten-month extension of the program, from May 29, 2020 to March 31, 2021, in order to support an uninterrupted combination of programming and activities that are aimed at creating more inclusive, economically viable, self-reliant municipalities.

Background

• Due to a series of budget cuts at the beginning of the third year of the contract, ODG was required to make significant funding cuts to SHAHAR. As a result, the contract was de-scoped, reducing the number of partner municipalities in which DAI maintained embedded advisors from 20 to 10 municipalities. The TEC was reduced by $28 million, from $74 million to $46 million.

• Following a portfolio review 2017, it was decided to extend the period of performance for an additional two years, increase the TEC by $16 million to $62 million, and reduce the geographic focus to 5 municipalities. Therefore, a J&A was processed and approved on July 31, 2017, allowing the contract to be extended to November 2019 and TEC increased to $62 million.

• One year later, in November 2018, another J&A was processed and approved to realign the project by including 10 additional provincial municipalities (bringing the total to

15) and increasing the TEC from $62 million to $72 million.

• In August 2019, the contract was modified to extend the period of performance from November 30, 2019 to May 29, 2020, at no additional cost.

• Currently, this specific request to extend the contract by 10-months and increase the TEC by $1,499,999, back to the original negotiated base award TEC ($74 million), supports USAID’s strategic objectives outlined in the new CDCS and the Afghan Government’s National Peace and Development Framework. It will support an uninterrupted combination of programming and activities that are aimed at creating more inclusive, economically viable, and self-reliant municipalities by increasing economic development, generating increased revenue, advancing women’s empowerment, and increasing accountability and transparency of municipalities to citizens.

Approval of this request will sustain increases in democracy, security, stability, and self-reliance in SHAHAR’s 15 rapidly growing partner municipalities, all of which are being impacted by the ongoing insurgency and uncertainty surrounding the peace process and the results of the presidential elections. Because municipalities are the level of government closest to Afghan citizens and are areas where the government has greater control over security, they represent the best opportunities to stimulate economic growth and job creation, especially in partnership with the private sector. These gains would lead to the generation of sufficient revenue to support improvements in service delivery and the infrastructure necessary to become economically viable and self-reliant.

DAI’s work in these 15 municipalities represents a major investment by USAID in supporting Afghan citizens to develop the human and institutional capacity, as well as institutional resilience, to more effectively meet citizen priorities and service delivery needs in a manner that is transparent, accountable, fully representative of citizen interests. While these municipalities have significantly improved their revenue generation, financial management systems, economic development and job creation, leadership by women, youth engagement, and citizen consultation, much more remains to be done. Like other Afghan municipalities, the ability of these municipalities to not only sustain these improvements, but also to continue to make significant progress in improving their performance, is critical for Afghanistan’s long-term security, socio-economic stability and prospects for a sustainable peace.

However, long-standing and significant challenges continue to confront the municipalities:

insecurity due to the ongoing insurgency, limited revenue sources, the lack of fiscal transfers from the national government, the influx of rural populations and rapid urbanization, the spread of informal settlements, the lack of jobs and high unemployment, a demographic bulge of youth in need of employment, declining donor funding, widespread corruption, and the lack of staff capacity.

The stark reality is that despite the significant progress they have made to date, these 15 municipalities are not yet prepared to move forward on their own and become sustainable hubs of security, socio-economic stability and localized democracy – the challenges confronting them simply remain too immense and too many. Any gap in programming and technical support will inevitably result in the decline of municipal performance.

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

The original award (AID-306-C-14-00016) was competed and subsequently awarded to DAI Global, LLC, on November 30, 2014, as a three-year, $73.49 million program. The program originally focused on 16 small- and medium-sized provincial municipalities located within USAID’s three designated Regional Economic Zones, as well as the four regional hub municipalities of Kandahar, Hirat, Mazar-e-Sharif, and Jalalabad. During the first and second years of the program (FY 2015 and FY 2016), activities were implemented in all 20 of these original partner municipalities.

SHAHAR’s current TEC is $72 million with an estimated completion date of May 29, 2020.

Despite the multiple funding realignments, the activity has consistently performed at a high level. Afghan governmental partner Independent Directorate of Local Governance requested that the SHAHAR activity be extended to ensure sustainability of the gains that have been made so far. This extension is anticipated to firmly place partner municipalities in a unique position to further enhance service delivery to the growing urban population of the partner municipalities.

Under this action, the activities outlined below will continue supporting Afghanistan’s five largest municipalities plus 10 small- and medium-sized municipalities to generate additional revenue and continue responding to the diverse needs of the urban citizens.

Interventions include technical assistance to support:

● Deputy Ministry of Municipalities (DMM) to conduct and deploy systematic reviews of municipal performance, dissemination of regulations and standard operating procedures, mechanisms for feedback, establishment of a mayors union, and development of a Municipal Development Fund Framework to support Afghanistan’s new Citizen-centered Governance Policy;

● Kabul Municipality to improve administrative efficiency, street addressing, solid waste management, revenue generation, and fleet management;

● Urban Dialogues aimed to gather views about the peace process;

● Embedded advisors to provide technical support to implement reforms leading to diversification of revenue streams and improvement of service delivery to citizens;

● Property registration, business licensing, and Safayi fee billing and collection, which all lead to increased revenue collection;

● Updating Revenue Generation Action Plans (RGAPs) to prepare and execute annual budgets;

● Municipal Advisory Boards (MABs) to encourage citizen and civil society participation in municipal affairs; and

● Implementation of Public Private Partnership initiative of partner municipalities.

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 permitted for the continued provision of highly specialized services “when 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 that requires use of the authority cited: The services currently provided by DAI under the SHAHAR 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:

● DAI has developed various Integrated Financial Management System (IFMS) modules, such as parcel registration, Safayi fee collection, business licensing, other revenue, budgeting, human resources, performance measurement databank, reporting, data import, compliance management, and legal and policy modules that are highly specialized and customized to the needs of partner municipalities. These modules can only be fully operationalized in these 15 municipalities with the assistance of DAI’s international and national staff. DAI has invested a significant amount of time and financial resources in the development of IFMS modules and to train its Afghan staff to install and implement the system. The technical ability of implementing partners other than DAI to fully implement various modules of IFMS is limited; consequently, any other implementer’s staff would have to be trained by DAI to operate the system.

● DAI has conducted multiple capacity needs assessments of these 15 municipalities utilizing the Municipal Governance Capacity Index (MGCI), which is an assessment tool developed by DAI and customized for Afghan municipalities. These capacity assessments, in turn, informed capacity building plans for each of these municipalities, which are the basis for SHAHAR’s technical interventions.

● In support of the USAID/Afghanistan CDCS, greater emphasis has been placed on municipalities that have the potential to provide improved services to a larger number of beneficiaries and pave the way for meaningful participation of citizens in municipal decision-making processes, with the aim to promote peace and stability in urban centers. DAI is uniquely positioned to continue supporting these 15 municipalities to develop the institutional resilience to effectively meet citizen priorities and service delivery needs in a sustainable manner that is transparent, accountable, fully representative of citizen interests, self-reliant, and which contributes to the peace process.

The above information serves to demonstrate that the services performed under the SHAHAR activity are highly specialized services that would not be readily available in the market for immediate deployment.

(b) Giving an award to another resource would result in unacceptable delays:

● Selecting an implementer other than DAI for this work will result in much longer startup time and additional startup costs for the extension. DAI currently has offices and staff embedded in all the 15 partner municipalities that can immediately continue to provide support and technical assistance to these 15 municipalities. If another implementer is selected, startup time and costs will be significantly greater, and the IFMS will be rendered inoperable for an extended period of time, negatively impacting revenue generation, transparency and accountability.

● DAI has established productive relationships with partner mayors and with DMM officials. As the trust building process between the implementing partner and the Government of Afghanistan is extremely time consuming, giving an award to another partner would delay implementation by several months, if not a year. Such delay would result in loss of momentum and could cause political instability.

● With the assistance of DAI's technical experts and embedded advisors, DMM is currently in the process of electing and inaugurating new Municipal Advisory Boards (MABs) in all provincial municipalities. This is a critical and lengthy process, and DMM can only accomplish this with the support and technical assistance of DAI. If another implementer is selected, the process of electing new MABs in these 10 municipalities would be delayed by as much as a year, leaving the municipalities without this important citizen advisory body, as the two-y ear terms of the MABs expire in 2020.

If SHAHAR is not expanded, two major adverse implications may occur:

● Loss of momentum: SHAHAR, through DAI, supports many ongoing activities that are critical to improved municipal performance, such as Citizen Service Centers, Municipal Advisory Boards, Integrated Financial Management System, revenue generation, and the preparation of municipal budgets. If such support is absent for a few months, municipal performance can be expected to falter and regress. To ensure maintenance of momentum until the new subnational governance activity (SALAM) is awarded, this action is deemed vital.

● Loss of relationship: DAI has developed strong and productive relationships wit h IDLG/DMM, mayors and municipal officials. A significant gap in programming and technical support would require time to be spent to re-engage those relationships, which are critical to program success and sustainability.

6. Description of the efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was publicized as required by Federal Acquisition Regulation (FAR) 5.2 [AIDAR 705.2]: The synopsis required by FAR 5.201 was published on April 2, 2020 with a closing date of April 17, 2020 at the following link:

https://beta.sam.gov/opp/657a1bfea6ec47bbbf3a84d5080ebdac/view?index=opp&page=2&or ganization_id=100148640 . This J&A document will be made public through the System for Award Management website (beta.sam.gov).

https://beta.sam.gov/opp/657a1bfea6ec47bbbf3a84d5080ebdac/view?index=opp&page=2&organization_id=100148640 https://beta.sam.gov/opp/657a1bfea6ec47bbbf3a84d5080ebdac/view?index=opp&page=2&organization_id=100148640 http://www.fedbizopps.gov/

7. A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable: In accordance with FAR 15.402, adequate cost competition took place when the original award was competed. The Contracting Officer will ensure that all services procured under the proposed TEC increase will be fair and reasonable based on historical costs and review of proposed costs.

8. Description of the market research conducted, and the results or a statement of the reasons market research was not conducted: As indicated, the original award (AID-306-C- 14-00016) was competed and subsequently awarded to DAI. Pursuant to FAR part 10, the technical office and the CO have conducted market research for the life of the award in support of modifications to the award. DAI has been implementing municipal governance activities in Afghanistan for several years and has established unique relationship with Afghan Government counterparts, especially with Independent Directorate of Local Governance and the provincial municipalities. Although there may be other implementing partners with similar skills, there are none with the necessary specialized knowledge that can be mobilized in a reasonable amount of time to take advantage of the momentum that has already been achieved.

9. Other facts supporting the use of other than full and open competition: A ten-month extension of the program will provide DAI with the opportunity to continue all technical activities in partner municipalities to ensure sustainability of the gains that have been made so far. Further, all SHAHAR supported activities will remain the same as planned in the original award of 2014.

Overall, the quality of services and advice rendered by DAI has been very high, resulting in enhanced budget execution and revenue collection by municipalities. Meanwhile, DAI has demonstrated notable programmatic progress in achieving the expected goals. As a result, the institutional and human capacity of partner municipalities have greatly improved.

Since commencement of the project in 2014, DAI has met all contractual requirements. It is also important to consider that, despite growing insecurity, peace developments, and presidential elections, DAI did not face any significant challenges causing implementation delays.

10. Sources, if any, that expressed, in writing, an interest in the acquisition: No responses received.

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: This action falls within the scope and the approved TEC of the original contract awarded in November 2014 through full and open competition. Any future changes and subsequent acquisition for services outside of what was originally published and awarded in 2014 will be competed through a full and open competition.

12. Technical or requirement personnel certification: In accordance with FAR 6.303.2(b), I hereby certify that the technical statements included above, and which form a basis for the justification, are complete and accurate.

email clearance COR, Jennifer Pike for Fazil Aman

April 28, 2020 Date

13. Contracting Officer Certifications: I hereby certify that the justification is accurate and complete to the best of my knowledge and belief.

email clearance Contracting Officer, Diego Marquez

14. Clearance email clearance Resident Legal Officer, James Noel email clearance Deputy Mission Director, Joel Sandefur

April 28, 2020 Date

April 13, 2020 Date

April 15, 2020 Date

15. Approval of the Agency Competition Advocate: AIDAR 706.302-70(c)(4) states that the use of the authority in 706.302-70(b)(5) requires the approval of the Agency Competition Advocate.

Approved Date Disapproved Date tbaldwin Stamp

CLEARANCE PAGE: JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL

AND OPEN COMPETITION (J&A) to increase the Total Estimated Cost for Strong Hubs for Afghan Hope and Resilience Contract No. AID-306-C-14-00016 from $72,000,000 to $73,499,999 and extend the period of performance by ten months from May 29, 2020, to March 31, 2021

Drafted by: FAZIL AMAN, ODG

Submitted by:

email clearance Jennifer Pike, ODG

April 21, 2020 Date

Clearances:

email clearance Lacy Kilraine, OPPD

April 13, 2020 Date