JA Trade Facilitation and Border Management Activity FINAL SIGNED REDACTED.pdf

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN COMPETITION (J&A)

TO: Deborah Broderick, Agency Competition Advocate

FROM: Jason McNabb, Economic Growth and Education (EGE) Office Director, USAID/El Salvador

SUBJECT: Justification and Approval (J&A) for Other than Full and Open Competition for a nine-month Extension and Total Estimated Cost (TEC) increase of $700,000 for the Regional Trade Facilitation and Border Management (RTFBM) Activity, Contract 72051918C00002

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), Continued Provision of Highly Specialized Services.

This document was prepared by the USAID/El Salvador Economic Growth and Education Office in order to modify the following contract: Regional Trade Facilitation and Border Management Activity (RTFBM) - Contract Number: 72051918C00002.

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

This is a request for approval of a contract modification for a non-competitive extension of the Regional Trade Facilitation and Border Management Activity, Contract No. 72051918C00002 with an effective period of performance from July 25, 2018 through July 24, 2023. The modification would extend the completion date for nine months, from July 24, 2023 to April 24, 2024 and increase the total estimated cost (TEC) by $700,000, from $17,557,226 to $18,257,226. The cost-plus-fixed-fee completion contract was awarded using full and open competition procedures to Nathan Associates, Inc. (the Contractor).

The purpose of this contract is the implementation of the Central America Regional Trade Facilitation and Border Management Activity, whose main goal is to contribute to Central American countries’ broad-based economic growth by enhancing regional integration and improving trade facilitation. Through this proposed extension, Nathan Associates would provide continued support for the Deep Integration Process between the governments of Honduras, El Salvador and Guatemala, and avoid a gap in programming, as further described below.

Justification and Approval for Other than Full and Open Competition - Contract No. 72051918C00002

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

The proposed extension would continue supporting regional economic integration as well as further developing key IT systems for trade processes needed to enhance regional integration. The Mission must maintain existing trade programming to continue supporting the ongoing Deep Integration Process, also known as the Customs Union, between the governments of Honduras, El Salvador and Guatemala to fully implement this Customs Union process.

Anticipated specific services during the proposed extension will include:

● Supporting the Deep Integration Process by convening regional meetings to negotiate, decide and implement procedures.

● Completing and interconnecting IT systems needed to operationalize the Deep Integration Process implementing the FYDUCA (Central American Unique Invoice and Declaration for its acronym in Spanish), which is the single invoice and document used under the Deep Integration Process.

● Providing capacity building to both the public and private sector to implement the process in El Salvador.

● Developing border control integrated procedures between Customs and Agriculture at land borders to facilitate inspections of those agricultural goods that will not have free transit under the Customs Union.

● Defining processes and finalizing IT development for digital tools that improve trade processes between the three countries for those goods that will not have free transit under the Customs Union.

● Completing a one-month pilot of the Border Management Academy, a training program offered by the Customs and Border Protection (CBP) Agency, that includes new requirements for trade processes entering into force by way of implementing the Custom Union regional border management.

● Supporting companies meeting their Authorized Economic Operator certifications in El Salvador, Guatemala and Honduras to continue building trust between the private sector and Customs and have additional benefits to the Customs Union.

The TEC increase and time extension will enable the contractor to carry out lines of effort for key USG foreign policy priorities in the region including economic growth priorities under the Root Causes Strategy (RCS). In addition, it is a regional economic priority for the U.S. Embassies in San Salvador, Tegucigalpa, and Guatemala City to work together to forge a path forward with all three host country governments to fully implement a genuine Customs Union that will help to reduce the causes of irregular migration and lower food prices in all three countries. The estimated value of these services is $700,000.

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

40 U.S.C. 113, as implemented by AIDAR 706.302-70. AIDAR 706.302-70(a)(2) states that “[f]ull and open competition need not be obtained when it would impair or otherwise have an adverse effect on programs conducted for the purposes of foreign aid, relief, and rehabilitation.” Pursuant to AIDAR 706.302-70(b)(5), 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:

(a) Context and nature of the acquisition

The Economic Growth and Education Office has been working on a follow-on activity to RTFBM, which is expected to be awarded around the beginning of calendar year 2024. Previously, the Mission was aware of and assessed we could manage a gap between the current and follow-on activities. However now, due to an unanticipated positive shift in political will of the Government of El Salvador to increase their commitment to regional integration, and the tempo with which they aim to advance the Customs Union, there is an increased need of U.S. Government support through the project to take advantage of this momentum. A pause in our technical assistance and loss of expertise at this critical time would have a significant adverse effect on our assistance objectives. GOES’ expressed interest to fully adhere to the reform requirements as stipulated by the Customs Union is a singular opportunity to advance economic integration and expand regional trade and competitiveness. This window of opportunity will require a timely response by the USG.

In addition, RTFBM is also well-positioned to continue providing any new training or capacity-building required by both private sector and public sector institutions to adapt to new and streamlined trade requirements as adopted by all Northern Central American countries. Given its extensive collaboration with public and private sector counterparts, trust and openness with key stakeholders and an ability to support USAID programming on multiple fronts, RTFBM is the only mechanism through which this assistance can be provided in a timely, confident manner, and the only organization currently trusted and welcomed by all three governments. Experts in Trade Facilitation and regional integration are scarce in the region and require a long learning curve to understand and work in this environment. Additionally, and most important of all, Government Authorities rely on long standing working relationships that require building trust between the contractor’s staff and government officials. All of these are considered highly specialized services, which would require extensive time and resources for an alternative contractor to successfully perform.

The urgency for uninterrupted provision of services is driven by demands of recent USG foreign policy priorities including advancing the regional economic integration agenda and improving the business-enabling environment for investment, as addressed in the Root Causes Strategy for Migration, Pillar 1. Delays in provision of the services would provoke a change in El Salvador’s course of action and would result in failing to commit to join the Deep Integration process, an effort that has been highly recommended by the USG.

The Mission must maintain existing trade programming to continue supporting the ongoing Deep Integration Process between governments of Honduras, El Salvador and Guatemala in order for them to continue taking steps to fully implement this customs union process.

(b) The contractor’s unique qualifications

Nathan Associates is the only implementer currently working on regional trade facilitation and integrated border management in the Central America region and has developed positive, trusted working relationships with public and private sector partners in the region and has staff in place to deliver continued and immediate results. Nathan Associates is the only contractor well positioned to continue the required, highly specialized, regional technical services without undue delay.

Accordingly, the contractor’s unique qualifications as well as the nature of the requirement described above support the proposed extension and will prevent unacceptable delays. A local award was not considered as there is no local/regional organization with the existing capacity and in a position to promptly deliver the required services.

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 FAR 5.2 [AIDAR 705.2].

The USAID/El Salvador Mission carefully examined alternative options to meet the Agency’s immediate needs. While a follow-on activity is currently in the design phase and will be procured competitively, soliciting responses from contractors through full and open competition for the proposed extension period would result in unacceptable delays.

As required by FAR 5.201, an advance notice of the proposed contract action was publicized in the Governmentwide point of entry (GPE) on March 31, 2023, providing notice of the Government’s intention to modify the contract pursuant to AIDAR 706.302-70(b)(5). In accordance with FAR 5.203(a), 15 days of response time was provided to potential sources. No comments were received by the CO in response to the posting.

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

The anticipated costs for the proposed extension period will be based on Nathan Associates’ recurrent and historical expenditures, which were established through a full and open competition process and have been found reasonable. The interventions proposed under the extension period are substantially the same, or very similar to those currently being implemented by the contractor.

Additionally, prior to awarding the modification, the Contracting Officer will review the proposed costs and make a determination as to whether the costs are fair and reasonable.

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

As stated in Section 6 above, USAID/El Salvador Mission carefully examined alternative options to meet the Agency’s immediate needs and posted an advance notice of the proposed contract action to solicit any interests from potential sources. Due to the urgency of this action and the change in programmatic circumstances described in Section 5 above, no other market research has been conducted to identify other sources, as it is considered that the contractor is in a unique position to render the required services. Due to the specific nature of the proposed activities along with the extensive time and high start-up costs associated with mobilizing a new contractor for only a short period, there are no other viable, cost-effective mechanisms to implement these activities.

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

The RTFBM contractor, Nathan Associates is the best positioned through its relationships, expertise, and existing partnerships, to act quickly in responding to opportunities in advancing the regional economic integration agenda, including the Deep Integration Process between Northern Central American countries. If the contract is not extended and funded accordingly, the required work will not be accomplished, thus limiting sustainability and ownership of a series of critical IT developments for over a dozen improved trade procedures in the region. Essentially, failure to deliver the intended assistance means losing the ability to act on ongoing USG foreign policy objectives in the region in a timely and efficient manner.

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

As required by FAR 5.201, USAID issued a notice of the intended contract action on SAM.gov. No sources have expressed interest, and no comments were 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:

The Mission intends to compete any future requirements under a regional IDIQ mechanism.

Clearance Page: Justification and Approval (J&A) for Other than Full and Open Competition for a 9-month Extension and Total Estimated Cost (TEC) increase of $700,000 for the Regional Trade Facilitation and Border Management (RTFBM) Activity, Contract 72051918C00002.

Scott Phillips, Regional Legal Officer Date

Matthew Rees, Deputy Mission Director Date Activity Competition Advocate

Christopher Cushing, Mission Director Date

SCOTT RYAN

PHILLIPS (affiliate)

Digitally signed by SCOTT RYAN PHILLIPS (affiliate) Date: 2023.04.26 12:23:22 -06'00'

Matthew Rees Digitally signed by Matthew Rees Date: 2023.04.27 08:26:24 -06'00'

Matthew Rees Digitally signed by Matthew Rees Date: 2023.04.27 08:28:04 -06'00'