Justification for 72016720C00001 P00002.pdf

J&A for Contract No. 72016720C00001 USAID/Kosovo Compete Activity

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN

COMPETITION (J&A)

SUBJECT: JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN

COMPETITION (J&A) for Contract No. 72016720C00001 with Cardno Emerging Markets USA, LTD.

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). AIDAR 706.302-70(b) permits other than full and open competition “when it would impair or otherwise have an adverse effect on programs conducted for the purposes of foreign aid, relief, and rehabilitation.”

AIDAR 706.302-70(b)(5) further states that use of this authority is appropriate for “[a]n award for the continued provision of highly specialized services when award to another resource would …would result in unacceptable delays.”

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

This is a request to approve the use of other than full and open competition for a contract modification to increase the ceiling of Contract 72016720C00001, also known as the Compete Activity, by $4 million from the current Total Estimated Cost (TEC) of $12,478,811 (including maximum award fee) to a revised TEC of $16,478,881 (including maximum award fee). The TEC increase will deepen USAID/Kosovo’s support of the Contractor’s highly specialized services in building the competitiveness of the private sector within developing economies, which in this instance is the deepening of technical assistance in the wood sector through specialization into the prefabricated buildings/modular homes sub-sector of the wood sector.

The original Contract was awarded to Cardno Emerging Markets USA, LTD (Contractor), using full and open competition on August 12, 2020, with a period of performance ending August 11, 2025. No other non-competitive action has been completed for this award. The proposed modification is not a deviation of the current scope of work, and no extension of the existing performance period is requested.

Wood processing is already an approved sector within the current scope of work in the Compete Activity. The wood processing sector includes wood products, such as furniture, prefabricated windows and doors, kitchens, and prefabricated buildings/modular homes made of various materials. During the first year of the Compete Activity, the Contractor identified that the prefabricated buildings/modular homes segment (a more specialized sub-sector within the wood-processing sector of this Activity) has growth opportunities, with the potential to reach over EUR 50 million ($55.8 million) in exports. With the Contractor’s highly specialized experience of networking and connecting businesses to one another to facilitate and expand production, the Contractor can bring together wood processing companies with other enterprises, such as window, door and floor companies, to further expand into the prefabricated buildings/modular homes sub-sector. The Contractor has the requisite expertise of connecting companies to create partnerships to expand their businesses into regional and global markets that the Activity’s currently need to facilitate partnerships for wood-processing companies to expand into specialized prefabricated buildings/modular homes.

The goal of this Activity is to assist Kosovo toward the end goal of a self-sustaining private sector, which requires highly specialized experience in developing private sectors within developing economies. The Contractor was competitively selected because it was the only one that has this highly specialized experience.

3. Description of the activity under the proposed action, including an estimated value:

The Compete Activity is USAID’s primary vehicle to foster significant industry growth and job creation for businesses in its focal sectors in Kosovo. Kosovo’s economic adaptability and prosperity has numerous constraints. Competition between firms often tends to be zero-sum rather than value-creating, as information is zealously guarded and most businesses have family-run models that predominate in the market. Kosovo’s economic potential is remarkably strong, but it struggles with underdeveloped market systems.

The Compete Activity was competitively procured through full and open competition on March 10, 2020, and awarded on August 12, 2020. The Activity focuses on three export-oriented sectors to sustainably increase competitiveness: 1) Wood Processing; 2) Food Processing; and 3) Information and Communications Technologies (ICT). The goal of the Compete Activity is to achieve the following overall results:

1. Market systems are strengthened to increase sector competitiveness.

2. Market actors within those market systems are more productive and competitive.

In each of the three sectors above, the Compete Activity currently supports initiatives along five functional areas, which are: Market Access; Diversified Finance; Business Sophistication; Skills Development; and Supporting Business Environment. This also includes, but is not limited to, supporting the sector associations and chambers to provide better services to its members, and support export promotion activities like trade fairs.

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

AIDAR 706.302-70(b) permits other than full and open competition “when it would impair or otherwise have an adverse effect on programs conducted for the purposes of foreign aid, relief, and rehabilitation.” AIDAR 706.302-70(b)(5) further states that use of this authority is appropriate for “[a]n award 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:

Cardno Emerging Markets USA, LTD (Contractor) has been implementing private sector development programs in developing economies around the world for more than 30 years. They provide the following highly specialized services:

- Developing and advancing the private sector in a developing economy

- Building local business capacity to facilitate the expansion of the business into regional and global markets.

- Networking, connecting, and building partnerships with businesses to facilitate and expand production.

The Contractor has already made significant gains in creating partnerships and developing market systems in Kosovo during the first year of implementation of the Compete Activity, demonstrating that the Contractor is uniquely qualified to continue to deepen their work within the Activity. The Contractor initiated numerous successful collaborative efforts with the business community to expand manufacturing operations, and has created over 44 partnerships to date.

Additionally, through the Contractor’s comprehensive public relations efforts, over 66 requests valued at $6 million from different stakeholders were submitted to the Activity, which reflects the strong demand for the Activity’s services. While the activity only has $2.5 million grants funds available for such requests, the Contractor has successfully instituted an effort to achieve maximum private sector engagement and leveraging of the grant funds. As a result, after only one year of implementation, every dollar in USAID grant funds was matched by two dollars in local contributions by the private sector. This trend will increase as the Activity intensifies its interaction with the private sector partners. This leveraging of USAID grant funds significantly scales up the impact potential of USAID assistance in the Kosovo private sector, achieving broad recognition among Kosovo’s business community, host government officials and other donors about the Activity's positive development impact in Kosovo.

6. Description of the efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was or will be publicized as required by Federal Acquisition Regulation (FAR) 5.201 [AIDAR 705.002].

As required by FAR 5.201, on February 3, 2022 a Notice of Intent (NOI) for this proposed action was publicized for 15 days in SAM.gov, in an effort to ensure that offers were solicited from as many potential sources as practicable. No sources expressed interest and no responses were received for this action by the response date of February 18, 2022. Additionally, as required by FAR 6.305, once the justification has been completed, the justification will be made publicly available on SAM.gov within 14 days of signing the modification, and will remain posted for a minimum of 30 days.

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

Upon approval of this justification, the Contracting Officer will request full technical and cost proposals from the Compete contract for the additional work requested. The Contracting Officer will conduct a thorough cost analysis of that proposal, with the same level of rigor as used with a competitive procurement, to ensure that the actual cost to the Government is fair and reasonable.

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

USAID/Kosovo conducted in-house market research on all vendors in the wood industry, and the Mission concluded that Cardno Emerging Markets USA, LTD had the highest level of trust among investors and exporters, continuous display of strong market knowledge, and ability to foster strong relationships among local producers and buyers, as needed for implementation of this segment. Based on the Mission’s assessment, Cardno Emerging Markets USA, LTD (Contractor) is still the only Contractor reasonably available to carry out the work within the given time frame.

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

For the reasons stated above, USAID/Kosovo concludes that the Contractor should continue to provide the highly specialized services required for this Activity, as recompeting this award and beginning a new award with a new contractor would result in negating the Activity foundation laid by the current Contractor, who utilized its market knowledge and expertise to provide technical assistance to interested companies and facilitate connections with partners. By expanding outreach to more companies and intensifying the technical assistance in the existing wood processing sector and increasing the Total Estimated Cost (TEC) of the existing Compete contract, USAID will be able to build upon the highly specialized services, existing relationships, and staffing structures that the Compete Activity already provides in order to rapidly deploy effective technical and grant assistance to achieve sustainable impact and growth in the Kosovo private sector with minimal delays to the Activity. Because of the requisite specialization and time and effort already expended into the establishment and implementation of this Activity as described above, no other source could practically compete for this Activity.

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

As required by FAR 5.201, on February 3, 2022 a Notice of Intent (NOI) for this proposed action was publicized for 15 days in SAM.gov, in an effort to ensure that offers were solicited from as many potential sources as practicable. No sources expressed interest and no responses were received for this action by the response date.

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 Agency intends to compete future requirements through full and open competition and potentially set aside for small businesses. USAID/Kosovo will also duly consider the use of a Best in Class (BIC) mechanism to comply with USG requirements of Category Management.