New Justice Fair Oppor.Memo AID-121-TO-16-00003.pdf

PROCUREMENT SENSITIVE

Justification for an Exception to Fair Opportunity

TO: Randy Ali, USAID/Ukraine Activity Competition Advocate

FROM: Ann Hopper, USAID/Ukraine Office of Democracy and Governance (ODG)

THROUGH: Daniel Harter, USAID/Ukraine Regional Contracting Officer

DATE: June 30, 2020

SUBJECT: Justification for an Exception to Fair Opportunity for an expansion of Task Order No. AID-121-TO-16-00003 for the Nove Pravosuddya Justice Sector Reform Program (New Justice) in Ukraine implemented by Chemonics International, Inc.

Action Requested: You are requested to authorize an exception to the fair opportunity process in order to approve an increase in the total estimated cost and expansion of Task Order No.

AID-121-TO-16-00003 for the Nove Pravosuddya Justice Sector Reform Program (New Justice) in Ukraine implemented by Chemonics International, Inc.

I. BACKGROUND

Chemonics was competitively selected for the New Justice Task Order (TO) under the Rule of Law Indefinite Quantity Contract AID-OAA-I-13-00032. The New Justice TO period of performance began on October 1, 2016 and currently extends until February 7, 2021, which at the time of award was the maximum possible period of performance.

USAID/Ukraine has shared the proposed Statement of Work (SOW) with the Rule of Law IQC Contracting Officer’s Representative (COR), who has confirmed that the extension falls within the scope and limitations of the current IQC, as modified.

II. DISCUSSION

Since the launch of the New Justice TO in 2016, Chemonics has performed exceptionally strongly in supporting framework judicial reforms in Ukraine, as well as in responding to changing political/contextual dynamics, which have resulted in its reputation as a flagship assistance project in a sector critical to building investor confidence, strengthening the rule of law, and combating corruption.

This request would (1) increase the TO ceiling by $4,000,000, from $21,193,693 to $25,193,693;

(2) extend the TO end date from February 7, 2021 to September 30, 2021; and (3) specify additional activities under current SOW objectives, including activities to engage in transitional justice institution-building to further a potential peace process in eastern Ukraine. Under this action, Chemonics will expand its ongoing support to the Government of Ukraine (GOU), judicial sector institutions, and civil society in response to the latest judicial reform developments, including political will to establish new arbitration/commercial dispute mechanisms and reboot key judicial self-governance institutions with international participation.

III. JUSTIFICATION

ODG requests your approval to expand the TO with Chemonics as a logical follow-on. FAR 16.505(b)(2)(i)(C) provides for an exception to the fair opportunity process for logical follow-ons per the following guidelines, “the order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.”

Pursuant to FAR 16.505(b)(2)(ii)(B), the following factors are addressed:

(1) Identification of the agency and the contracting activity, and specific identification of the document as a “Justification for an Exception to Fair Opportunity.”

USAID/Ukraine/ODG requests this action by the Regional Contracting Office (RCO) in the USAID/Ukraine Mission.

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

This is a request to approve the following action for AID-121-TO-16-00003 under the Rule of Law IQC AID-OAA-I-13-00032: (1) increase the TO ceiling by $4,000,000, from $21,193,693 to $25,193,693; (2) extend the TO end date from February 7, 2021 to September 30, 2021; and (3) specify additional activities under current SOW objectives, including activities to to engage in transitional justice institution-building to further a potential peace process in eastern Ukraine.

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

Under the current TO, Chemonics works to support the judiciary, government, parliament, bar, law schools, civil society, media, and citizens to create the conditions for an independent, accountable, transparent, and effective justice system that upholds the rule of law and to fight corruption in Ukraine. Specifically, Chemonics focuses on five key objectives: 1) Judicial independence and self-government strengthened; 2) Accountability and transparency of the judiciary to citizens and the rule of law increased; 3) Administration of justice enhanced; 4) Quality of legal education strengthened; 5) Access to justice expanded and human rights protected.

Over the past four years of implementation, New Justice has played a formative role in advancing historic 2016 amendments to Ukraine’s Constitution that restructured Ukraine’s judicial system.

New Justice assistance was essential in establishing a new High Qualifications Commission (HQC) responsible for merit-based selection of new judges and reevaluation of the qualifications of sitting judges; a new competitively selected Supreme Court sworn in in December 2017; and a new High Anti-Corruption Court (HACC) that completes the Ukraine’s institutional anti-corruption architecture and fulfilled a key precondition for continued International Monetary Fund (IMF) support. New Justice led the GOU, other donors, and international financial institutions in developing a “common understanding” for the structure and selection process of the new HACC, now seen as the most independent and corruption-free court in Ukraine’s history, which included the substantial involvement of international experts in helping select and vet judicial candidates. As a result of the successful HACC establishment process based on that common understanding, the GOU has developed new legislation that would further expand the involvement of international experts to the formation of a new HQC and to help vet the integrity of key, unreformed judicial institutions such as the High Council of Justice (HCJ), which would fulfill a key precondition for a new IMF agreement with Ukraine expected this year. Additionally, new GOU counterparts have requested New Justice support in advising on the structure, functions, and role of a potential new arbitration or commercial court in Ukraine, announced by President Zelenskyy at the World Economic Forum in Davos in 2020, which would be a major breakthrough in building investor confidence in Ukraine’s judicial system and attracting new investment to Ukraine -- a key priority of the Zelenskyy administration and increasingly important in light of the COVID-19 pandemic’s effects on Ukraine’s economy.

The in-scope services that will be acquired through this proposed modification include:

● Intervention 1: Support the involvement of international experts in selection and vetting processes to improve judicial integrity and independence. Once in-process judicial reform legislation is passed and in close collaboration with other donors and technical assistance programs, USAID will support the full and effective participation of international experts in the Selection Commission for forming a new HQC in line with international and European standards, as well as in a judicial vetting/ethics commission expected to be established by this new legislation. This will include financial remuneration for international experts, associated secretariat support for new commission(s), or other logistical support. The costs for international experts will be shared with the European Union, the other major donor on rule of law issues in Ukraine.

● Intervention 2: Once the Selection Commission completes its work, USAID will support the reconstituted HQC in restarting merit-based judicial selection and qualifications evaluation to ensure that judges meet the European and international standards of integrity, professional ethics, and exceptional professionalism. These activities will build on the comprehensive list of recommendations for improving both legislation and regulations developed by New Justice. To ensure the critical role of civil society in judicial selection processes, USAID will support the Public Integrity Council (PIC) -- an independent group of civil society experts established by law to assist the HQC to assess the integrity of judges and judicial candidates -- in working with the new HQC as a partner and resource in ensuring the integrity of the judicial corps. This will include grant support to PIC activities; in-kind capacity building to strengthen the PIC as an institution; and advocacy for increased state funding for the PIC, legislative amendments to strengthen the PIC’s status in the judicial selection and qualifications evaluation process, and PIC involvement in judicial selection to the first instance courts.

● Intervention 3: Support the GOU to define its vision and strategy to create a new institutional mechanism to resolve complex commercial disputes. USAID will work with stakeholders in the President’s Office, National Investment Council, and Ministry of Justice -- which have demonstrated substantial political will to reform Ukraine’s dispute resolution options for the commercial sector -- to engage the private sector, civil society, and international arbitration institutes to develop its vision and strategy for establishing new dispute resolution modalities; facilitate access to international best practices; help develop supporting legislation and normative acts; and support measures to establish a new arbitration institute, branch office, and/or a specialized commercial court.

● Intervention 4: Advance the implementation of other key reforms. Advancing the rule of law and battle against Ukraine’s endemic corruption is a major U.S. foreign policy priority in Ukraine and reflects the demands of the Ukrainian people themselves during the Revolution of Dignity. USAID will work with GOU stakeholders to strengthen draft legislation that would substantially strengthen the rule of law and access to justice for citizens and, as necessary, help implement reforms. Priority reforms include: establishing jury trials for select criminal cases, supporting innovative e-justice solutions, promoting bar reform, and helping the GOU develop its strategy to respond to Russia’s manipulation of international humanitarian law in its war against Ukraine.

● Intervention 5: In the event of an advancing peace process and the prospect of reintegration of the currently non-government controlled areas of Donetsk and Luhansk oblasts or Crimea, transitional justice mechanisms -- measures that address the consequences of large-scale violence, conflict, or repression and to prevent their recurrence -- will be of paramount importance to a functional, just reintegration process. USAID/Ukraine Mission leadership has determined that, due to its experience in establishing new institutions such as the Supreme Court and HACC, New Justice would be the best-placed USAID program to rapidly respond to technical assistance and institutional support needs

These within scope activities are estimated to cost approximately $4 million and require an additional six months of implementation.

(4) Identification of the exception to fair opportunity (see 16.505(b)(2)) and the supporting rationale, including a demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the exception cited. If the contracting officer uses the logical follow-on exception, the rationale shall describe why the relationship between the initial order and the follow-on is logical (e.g., in terms of scope, period of performance, or value).

The exception to fair opportunity utilized for this expansion is FAR 16.505(b)(2)(i)(C) which provides that “the order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.”

Chemonics holds the technical knowledge, situational awareness and technical expertise in the judicial reform sector and has unique relationships with the cooperating country and beneficiaries. It has successfully developed and implemented interventions in this sector since 2004, and has built an extensive network of international and local partners and earned credibility and respect among GOU and judicial sector actors, which have been critical to the success of the program. Chemonics has substantially adapted its approach over four years of activity implementation, maintaining its commitment to advancing judicial reform, self-governance, and independence while staying responsive to changing sector needs (including 2019 elections that ushered in a new President and single-party majority in Parliament) and U.S. government priorities. The contractor’s effectiveness and responsiveness in key areas was validated by a spring 2020 performance evaluation, which found that Chemonics engaged in an effective and timely manner to advance its objectives while also fulfilling requests for engagement by stakeholders; and that the program is the driving force behind substantial and productive collaboration with other donors.

Ukraine’s ongoing judicial reform process requires substantial donor support to enable the participation of international experts in the selection and vetting of key judicial institutions, as envisioned in framework legislation passed in late 2019. USAID’s support to this process is a unique opportunity for the USG to demonstrate its support for this reform agenda, and to ensure that international experts and other game-changing interventions (such as the establishment of a new arbitration/commercial dispute resolution mechanism) are adequately resourced, and to help shape future developments in this critical sector. Competing the award and, possibly, bringing in a new implementing partner would delay program activities and lose the opportunity of building on the contractor’s existing strong relationships that were built through a measured approach over time.

The contractor is uniquely positioned to respond to emerging GOU and U.S. policy priorities in the rule of law sector. New Justice was one of the three entities -- together with the European Union and an INL-funded anti-corruption program -- that were responsible for enabling international expert involvement in the selection process for the High Anti-Corruption Court, whose success the GOU is seeking to replicate by involving international experts in the selection and vetting processes for other judicial sector bodies. The contractor helped familiarize the six foreign experts with Ukraine’s judicial system and the key bodies with which it would be engaged. This is significant because the GOU intends to continue to draw international experts from the same pool of candidates as was established by the HACC process, and therefore the contractor’s existing relationships with these specific international experts will substantially increase its ability to quickly and effectively meet ambitious timelines for establishing a new HQC and re-starting the judicial selection process.

Additionally, the contractor is deeply familiar with the political sensitivities involving international experts in judicial selection/vetting processes, for example the need for foreign experts to be supported by a “secretariat” of Ukrainian civil society and legal experts who can help collect, translate, and analyze judicial dossiers. The contractor has existing relationships and subaward agreements with existing local legal experts which it will be able to quickly mobilize to advise the next round of selection/vetting processes.

As part of the judicial reform legislation that the GOU is expected to amend in summer 2020, there will be key deadlines within which international experts must be engaged and judicial self-governance institutions must be rebooted. The contractor is in a unique position to support these processes, which are also part of Ukraine’s milestones under its recently-signed Stand-By Arrangement (SBA) with the International Monetary Fund (IMF). USG foreign policy would be impaired by delay if the contractor is not able to immediately respond to these needs once legislative amendments are passed.

As stated above, this exception is justified because procuring these services through another contract mechanism would impose unnecessary costs due to duplication and redundancy, and cause excessive lost time that is not available to the Mission given the political and strategic priorities highlighted above. The New Justice TO is already in place and the overall scope already includes these types of interventions and allows for these follow-on activities. Furthermore, Chemonics was competitively selected for the New Justice award in 2016 after a fair opportunity was provided to all of the IQC holders. Therefore, in the interest of economy and efficiency, this expansion of the New Justice TO should be approved because it can be considered a logical follow-on to current activities.

(5) A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.

The Contracting Officer, by way of approving this justification and affixing his signature hereon, determines that the anticipated cost to the Government will be fair and reasonable.

(6) Any other facts supporting the justification.

USAID/Ukraine believes that procuring services through another contract would impose unnecessary costs due to duplication and redundancy and cause excessive lost time since there is a contract in place with USAID for the required services as discussed above.

(7) A statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the exception to fair opportunity before any subsequent acquisition for the supplies or services is made.

If any subsequent requirements for this award are needed, the IQC holders will be provided a fair opportunity to compete for the resultant TO or the action will be competed in a full and open competition.

(8) The contracting officer’s certification that the justification is accurate and complete to the best of the contracting officer’s knowledge and belief.

The Contracting Officer, by way of approving this justification and affixing his signature hereon, certifies that the justification is accurate and complete to the best of his knowledge and belief.

(9) Evidence that any supporting data that is the responsibility of technical or requirements personnel (e.g., verifying the Government’s minimum needs or requirements or other rationale for an exception to fair opportunity) and which form a basis for the justification have been certified as complete and accurate by the technical or requirements personnel.

The technical officer, by way of signing this justification and affixing his signature hereon, certifies that the supporting data which form the basis for the justification is accurate and complete to the best of his knowledge and belief.

(10) A written determination by the approving official that one of the circumstances in (b)(2)(i)(A) through (E) of this section applies to the order.

Pursuant to FAR 16.505(b)(2)(ii)(C)(2), for a proposed order between $650,000 and $12.5 Million, “the justification must be approved by the competition advocate of the activity placing the order,” which in this case is the USAID/Ukraine Deputy Mission Director. By way of approving this justification and affixing his signature hereon, the activity competition advocate determines that the justification set forth above in accordance with FAR 16.505(b)(2)(i)(C), applies to this order.

IV. AUTHORITY

FAR 16.505(b)(2)(i)(C) provides the contracting officer the authority for an exception to the fair opportunity process for logical follow-ons provided that “the order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.”

FAR 16.505(b)(2)(ii)(C)(2) provides that the activity competition advocate, the USAID/Ukraine Deputy Mission Director, has the authority to approve this justification for an exception to fair opportunity.

FAR 16.505(b)(2)(ii)(D) provides that “within 14 days after placing an order exceeding the simplified acquisition threshold that does not provide for fair opportunity in accordance with 16.505(b), the contract officer shall –

(i) Publish a notice in accordance with 5.301; and

(ii) Make publicly available the justification required at (b)(2)(ii)(B) of this section.”

Digitally signed by Randy Ali Date: 2020.07.17 12:52:33 +03'00' Randy Ali