Attachment_A_Mod2_SOL_TRP.docx

Attachment A SOL-111-12-000001, Amendment 2

List of changes:

Cover Letter:

Delete “CLOSING DATE: FEBRUARY 9, 2012” and insert “CLOSING DATE: FEBRUARY 23, 2012” in lieu thereof.

Delete “…the range of $5-$6 million…” and insert “…the range of $6-$7 million…” in lieu thereof.

Section C.1. OBJECTIVE/BACKGROUND/INTRODUCTION Insert the following at the end of the section:

“Need for pension reform implementation assistance. The State Revenue Committee (SRC) will develop and maintain a unified tax and record keeping system for income tax and pension contribution payments. Through the unified tax system, pension contributions will be collected and channeled through this system and then to asset managers for investments. The GOAM recognizes that design and maintenance of this system is crucial not only for pension reform, but also to ensure improved tax administration and compliance.”

Section C.2. SCOPE OF WORK /A. Objective Delete Subsection A. Objective in its entirety and insert the following in lieu thereof:

“A. Objective:

The overall goal of the project is to improve the effectiveness and efficiency of SRC tax administration and MoF tax policy development, which in turn will promote generation of adequate revenue in an efficient and equitable manner, while fostering an enabling environment for economic growth, socio economic development and poverty reduction. The project will assist the State Revenue Committee and Ministry of Finance in the following areas: (a) revenue policy formulation (strategic planning, revenue analysis and tax policy review and simplification) and the appeals policies, procedures and implementation carried out by the Ministry of Finance; (b) improve the SRC strategic planning, human resource, internal control processes to better administer taxes in accordance with international standards and best practices; (c) implement the new unified tax system, which is a crucial part of the new multi-pillar pension system; and (d) enhance taxpayer trust and compliance.”

Section C.3 (b) Component 2: Human and Institutional Capacity Building at the State Revenue Committee / ii. Improved Tax Administration and Tax Payer Services through ICT Utilization

Insert the following to the end of subsection:

“ii.e) Personified Record Keeping System Starting in 2014, Armenia will switch to the new multi-pillar pension system. The SRC will be responsible for introducing and implementing the unified income tax and funded contribution personified recordkeeping system (hereafter the “System”). With USAID and WB assistance, the SRC has been designing the specification of software for the automated System and is currently in the process of finalizing it. According to the GOAM schedule, the System must be functioning by 2013 (please see “Concept Paper on Unified Income Tax and Funded Contribution Personified Recordkeeping System” as Attachment B).

Expected results:

· SRC reviews and determines the software specifications for the System;

· SRC ensures that all necessary prerequisites for the successful implementation of the System are in place, including:

· A summary of best international practices, a gap analysis between the best practices and the ones planned by the GOAM recommendations, and an action plan to resolve any issues;

· An assessment of the System hardware, software and network connectivity and data transmission requirements for the secure and timely exchange of information on pension contributions along with an action plan to resolve any issues;

· The design of the record keeping, internal controls and accounting procedures and processes for the System;

· The development of a comprehensive training program at SRC for implementing the System;

· An assessment of taxpayers’ capacities and skills for the electronic submission of required information under the new System including an action plan to resolve any issues.

· SRC explores possibility of creating licensed organizations to provide accounting/reports and electronic report filing services.”

Section F. 6 REPORTS AND DELIVERABLES Add the following three deliverables to the Set of Deliverables Table under Component 2: Human and Institutional Capacity Building at the State Revenue Committee’s column:

“Report on results of testing and piloting of the automated system for unified income tax and funded contribution personified recordkeeping.

Guidelines and by-laws for an efficient implementation of unified income tax and funded contribution personified recordkeeping system.

Assessments, reports, action plans, guidelines, manuals, designs, specifications and other documentation and multi-disciplinary technical assistance required to achieve implementation of income tax and funded contribution personified recordkeeping system.”

L.13 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL / (1) TECHNICAL APPROACH / Subsection i.

Add the following to the end of subsection i.:

“The technical approach shall reflect an understanding of the Government of Armenia (GoA) efforts to introduce the pension reform and as part of it, SRC’s role in implementing the Unified Income Tax and Funded Contribution Personified Recordkeeping System. It shall reflect on how the System should be developed and integrated into the broader context of pension reform.”

L.13 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL / (1) TECHNICAL APPROACH / Subsection iii.

Delete subsection iii. in its entirety and insert the following in lieu thereof:

“iii. The proposal must convincingly demonstrate how the offeror will manage relationships with key stakeholders, including, host country government counterparts Ministry of Finance (MOF) and State Revenue Committee (SRC), other host country government as appropriate, other donors and elements of the US government present in Armenia. In particular, it its technical approach the offeror must clearly outline a meaningful approach to collaboration with the WB funded Public Expenditure Management and Tax Administration Modernization Project. In addition the technical approach shall demonstrate realistic measures to be taken and a clear strategy over the life of the program for promoting sustainability through developing local technical capacity appropriately tailored to Armenia’s context. Central to this are details regarding local implementing partner roles and responsibilities and a phased plan for transfer of responsibilities from the international to the local partner. The offeror will also need to draw upon the resources of local private sector and non-governmental partners involved in tax policy and administration, including unified tax personified record keeping. The proposal should demonstrate how these partnerships will strengthen the institutional and human resource capacity of all relevant counterparts and promote the ability of such partners to pursue further simplification of tax administration, reduction of tax compliance costs, improved tax policy and regulation, and design and implementation of the software for unified tax personified recordkeeping system. The offeror’s technical approach should result in improved trust and better interaction among the tax authorities and taxpayers after the end of the project, as well as better integration of the personified recordkeeping system into the broader pension/social protection and insurance system.”

L.13 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL / (1) TECHNICAL APPROACH / Subsection v.

Delete subsection v. in its entirety and insert the following in lieu thereof:

“The offeror shall demonstrate a sound knowledge of past and ongoing operational challenges, present a sound mechanisms form identifying the emerging risks, including the ones associated with the implementation of the unified tax and mandatory contribution personified recordkeeping system, and suggest ways in which they may be addressed. In addition, the offeror needs to suggest a contingency plan in the event of a delay in implementation of the WB funded Public Expenditure Management and Tax Administration Modernization Project.”

L.13 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL / (2) MANAGEMENT APPROACH / Subsection a.

Delete subsection a. in its entirety and insert the following in lieu thereof:

“a. The offeror shall demonstrate its institutional capacity and that of its local partner if applicable. In particular, the offeror shall demonstrate the organizational knowledge and capability to effectively implement the proposed Technical Approach, including home office support, and its organizational experience in designing and managing Tax/Fiscal Policy, Administration Reform, and Tax Administration as an essential component of pension reform (recordkeeping, collection of contributions for a mandatory system, tracking of contributors to the mandatory pillar of pension system) projects in transition and developing economies. The offeror shall demonstrate the ability to build and maintain relationships with a range of stakeholders, including its ability to collaborate with USAID and other donors and the ability to implement a joint program with another donor agency. The offeror must detail: the institutional management structure; logistics management; monitoring and reporting plans; management of subcontracts and financial management systems.”

L.13 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL / (3) KEY PERSONNEL / Subsection Chief of Party.

Delete Subsection Chief of Party. in its entirety and insert the following in lieu thereof:

“The Chief of Party (COP) must be experienced in managing programs of similar scale and complexity, particularly in transition or developing countries. The COP shall have at least a Master’s Degree in a field related to economics, fiscal, tax policy, law and administration matters, as well as public finance management, or any other relevant filed. S/he shall have at least 15 years of relevant experience working in developing country contexts (experience in NIS country is desirable). Direct experience with implementing tax/fiscal policy and administration, including personified recordkeeping system for income tax and mandatory contribution, projects is highly desirable. The Candidate shall demonstrate effective interpersonal skills, outstanding management skills, proactiveness, and creative problem-solving and ethical management. Prior experience in working with international donors and knowledge of USAID’s policies and procedures is desirable. The COP will have overall in-country management responsibility for the program. The COP may also serve as the Component 1 Team Leader.”

L.13 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL / (3) KEY PERSONNEL / Subsection Component 2 Team Leader.

Delete Subsection Component 2 Team Leader. in its entirety and insert the following in lieu thereof:

“The candidate should be a senior-level expert in tax administration, with a minimum of 10 years international professional experience in a relevant field such as tax administration, IT based revenue collection and tax administration systems, taxpayer services, personified record keeping, human and institutional capacity building of tax authorities, tax audits, refunds, electronic filing, etc. The Candidate should have a Master’s degree in a relevant field, such as economics, public administration, law, etc. The candidate should possess excellent leadership and management skills, excellent writing ability and strong cross-cultural interpersonal skill.”

M.3 TECHNICAL EVALUATION CRITERIA / I. Technical Approach (45 points) (sub-factors in descending order of importance) / Subsection i).

Delete Subsection i. in its entirety and insert the following in lieu thereof:

i) “Extent to which the Offeror provides a clear, logical, technically sound and feasible approach for revenue policy, tax administration, including personified recordkeeping of unified income tax and funded contribution payments, and application of best practices that will produce measurable and sustainable results in each of the three defined components, addressing effective integration of activities among components.”

M.3 TECHNICAL EVALUATION CRITERIA / II. Management Approach (35 points) (sub-factors are of equal importance) / Subsection i.

Delete Subsection i. in its entirety and insert the following in lieu thereof:

“Demonstrated institutional experience in managing technical and administrative aspects of complex revenue administration policy and tax administration projects, including personified recordkeeping of unified income tax and funded contribution system, achieving measurable results, and sustainable development results, and working effectively with key stakeholders, in transition and developing countries.”