SOL-111-17-000003.pdf

SOL-111-17-000003

SOLICITATION, OFFER AND AWARD

4. TYPE OF SOLICITATION2. CONTRACT NUMBER 3. SOLICITATION NUMBER

7. ISSUED BY CODE 8. ADDRESS OFFER TO (If other than Item 7)

ORDER UNDER DPAS (15 CFR 700)

6. REQUISITION/PURCHASE NUMBER

NOTE: In sealed bid solicitations "offer" and "offeror" mean "bid" and "bidder".

NEGOTIATED (RFP)

SEALED BID (IFB)

5. DATE ISSUED

1. THIS CONTRACT IS A RATED RATING PAGE OF PAGES

1 107

C. E-MAIL ADDRESS

EXT.NUMBERAREA CODE

B. TELEPHONE (NO COLLECT CALLS)A. NAME

10. FOR

INFORMATION

CALL:

CAUTION: LATE Submissions, Modifications, and Withdrawals: See Section L, Provision No. 52.214-7 or 52.215-1. All offers are subject to all terms and conditions contained in this solicitation.

(Date)(Hour) local timeuntildepository located in copies for furnishing the supplies or services in the Schedule will be received at the place specified in Item 8, or if hand carried, in the

SOLICITATION

9. Sealed offers in original and

PART IV - REPRESENTATIONS AND INSTRUCTIONS

OTHER STATEMENTS OF OFFERORS

EVALUATION FACTORS FOR AWARD

INSTRS., CONDS., AND NOTICES TO OFFERORS

REPRESENTATIONS, CERTIFICATIONS AND

LIST OF ATTACHMENTS

CONTRACT CLAUSES

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.

I

J

K

L

M SPECIAL CONTRACT REQUIREMENTS

CONTRACT ADMINISTRATION DATA

DELIVERIES OR PERFORMANCE

INSPECTION AND ACCEPTANCE

PACKAGING AND MARKING

DESCRIPTION/SPECS./WORK STATEMENT

SUPPLIES OR SERVICES AND PRICES/COSTS

SOLICITATION/CONTRACT FORM

PART II - CONTRACT CLAUSESPART I - THE SCHEDULE

H

G

F

E

D

C

B

A

SEC. DESCRIPTION PAGE(S) (X) DESCRIPTION SEC. (X)

11. TABLE OF CONTENTS

18. OFFER DATE17. SIGNATURE

SUCH ADDRESS IN SCHEDULE.

IS DIFFERENT FROM ABOVE - ENTER

15C. CHECK IF REMITTANCE ADDRESS

EXT.NUMBERAREA CODE

15B. TELEPHONE NUMBER

(Type or print)AND

ADDRESS

OF

OFFEROR

CODE FACILITY

16. NAME AND TITLE OF PERSON AUTHORIZED TO SIGN OFFER15A. NAME

DATEAMENDMENT NO.DATEAMENDMENT NO.

and related documents numbered and dated):

amendments to the SOLICITATION for offerors

(The offeror acknowledges receipt of

14. ACKNOWLEDGEMENT OF AMENDMENTS

CALENDAR DAYS (%)30 CALENDAR DAYS (%)20 CALENDAR DAYS (%)10 CALENDAR DAYS (%)

(See Section I, Clause No. 52.232.8)

13. DISCOUNT FOR PROMPT PAYMENT

designated point(s), within the time specified in the schedule.

by the offeror) from the date for receipt of offers specified above, to furnish any or all items upon which prices are offered at the price set opposite each item, delivered at the

12. In compliance with the above, the undersigned agrees, if this offer is accepted within ______________ calendar days (60 calendar days unless a different period is inserted

NOTE: Item 12 does not apply if the solicitation includes the provisions at 52.214-16, Minimum Bid Acceptance Period.

OFFER (Must be fully completed by offeror)

IMPORTANT - Award will be made on this Form, or on Standard Form 26, or by other authorized official written notice.

28. AWARD DATE

(Signature of Contracting Officer)

27. UNITED STATES OF AMERICA

25. PAYMENT WILL BE MADE BY

26. NAME OF CONTRACTING OFFICER (Type or print)

CODE 24. ADMINISTERED BY (If other than Item 7)

ITEM

(4 copies unless otherwise specified)

23. SUBMIT INVOICES TO ADDRESS SHOWN IN

41 U.S.C. 253 (c) ( 10 U.S.C. 2304 (c) (

22. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION:

21. ACCOUNTING AND APPROPRIATION20. AMOUNT19. ACCEPTED AS TO ITEMS NUMBERED

AWARD (To be completed by government)

CODE

REQ-111-17-00001009/14/2017

X

ARMENIA

USAID Armenia 1 American Avenue Yerevan 0082

1700 D 11/13/2017

Armen Yeghiazarian +37 66 ayeghiazarian@usaid.gov

410-4944

X

X

X

X

X

X

X

X

X

X

X

X

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PAGE(S)

Rebecca White

AUTHORIZED FOR LOCAL REPRODUCTION

Previous edition is unusable

STANDARD FORM 33 (Rev. 9-97)

Prescribed by GSA - FAR (48 CFR) 53.214(c)

SF33

B-1

C-1 D-1 E-1 F-1 G-1 H-1

I-1

J-1

K-1

L-1

M-1

ITEM NO. SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT

NAME OF OFFEROR OR CONTRACTOR

2 107

CONTINUATION SHEET

REFERENCE NO. OF DOCUMENT BEING CONTINUED PAGE OF

SOL-111-17-000003

(A) (B) (C) (D) (E) (F)

Delivery Location Code: USAID/ARMENIA

USAID/Yerevan

1 American Avenue

Yerevan 0082, Armenia

0001 The purpose of the Armenia MLET Program, implemented through this contract, is to improve the electricity market and support electricity trade with Georgia by helping Ministry of Energy

Infrastructure and Natural Resources, Public

Service Regulatory Commission and energy institutions to adopt legal-regulatory reforms, and accelerate the implementation of market liberalization mechanisms, and strengthen

Armenia-Georgia dialogue on cross-border trade.

The Contractor will employ a flexible, demand-driven approach that builds in consultation with all stakeholders and USAID.

OPTIONAL FORM 336 (4-86)

Sponsored by GSA

FAR (48 CFR) 53.110

NSN 7540-01-152-8067

TABLE OF CONTENT .......................................................................................................... Page

SECTION B - SUPPLIES OR SERVICES/PRICES .....................................................................B-1 B.2 CONTRACT TYPE ...............................................................................................................B-1 B.3 ESTIMATED COST, FIXED FEE, AND OBLIGATED AMOUNT ...............................B-1 B.4 BUDGET.................................................................................................................................B-1 B.5 INDIRECT COSTS ...............................................................................................................B-1

B.6 ADVANCE UNDERSTANDING ON CEILING INDIRECT COST RATES

AND FINAL REIMBURSEMENT FOR INDIRECT COSTS..........................................B-2 B.7 PAYMENT OF FIXED FEE.................................................................................................B-2 B.8 MULTI-YEAR CONTRACT AND CANCELLATION CEILING ..................................B-2

SECTION C - DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK ......................C-1

MARKET LIBERALIZATION & ELECTRICITY TRADE PROGRAM (MLET) .....C-1

C.1 INTRODUCTION .................................................................................................................C-1 C.2 BACKGROUND ....................................................................................................................C-1 C.3 SCOPE OF WORK ...............................................................................................................C-2 C.4 DETAILED WORK REQUIREMENTS.............................................................................C-5 C.5 KEY PERSONNEL ...............................................................................................................C-7 C.6 PERIOD OF PERFORMANCE ...........................................................................................C-8 C.7 SPECIAL CONSIDERATIONS...........................................................................................C-8

SECTION D - PACKAGING AND MARKING............................................................................D-1 D.1 AIDAR 752.7009 MARKING (JAN 1993)...........................................................................D-1 D.2 MARKING AND BRANDING STRATEGY......................................................................D-1 D.3 BRANDING STRATEGY AND MARKING PLAN..........................................................D-1 D.4 BRANDING STRATEGY ....................................................................................................D-2

D.5 BRANDING IMPLEMENTATION PLAN (BIP) AND MARKING PLAN (MP) .........D-2

SECTION E - INSPECTION AND ACCEPTANCE .....................................................................E-1

E.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE ...E-1

E.2 INSPECTION AND ACCEPTANCE ..................................................................................E-1 E.3 CONTRACTOR PERFORMANCE EVALUATION ........................................................E-1

SECTION F - DELIVERIES OR PERFORMANCE ....................................................................F-1

F.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE ...F-1

F.2 PERIOD OF PERFORMANCE ...........................................................................................F-1 F.3 PLACE OF PERFORMANCE .............................................................................................F-1 F.4 AUTHORIZED WORK WEEK ...........................................................................................F-1 F.5 AIDAR 752.242-70 PERIODIC PROGRESS REPORTS (OCT 2007).............................F-1 F.6 REPORTS AND DELIVERABLES OR OUTPUTS ..........................................................F-1 F.7 PERFORMANCE STANDARDS .........................................................................................F-7 F.8 MONITORING AND EVALUATION.................................................................................F-8

SECTION G - CONTRACT ADMINISTRATION DATA...........................................................G-1 G.1 AIDAR 752.7003 DOCUMENTATION FOR PAYMENT (NOV 1998) ..........................G-1 G.2 ADMINISTRATIVE CONTRACTING OFFICE..............................................................G-2 G.3 CONTRACTING OFFICER’S AUTHORITY...................................................................G-2 G.4 CONTRACTING OFFICER’S REPRESENTATIVE (COR) ..........................................G-2 G.5 TECHNICAL DIRECTIONS/RELATIONSHIP WITH USAID .....................................G-2 G.6 PAYING OFFICE .................................................................................................................G-4 G.7 CONTRACTOR’S PRIMARY POINT OF CONTACT ...................................................G-4

SECTION H - SPECIAL CONTRACT REQUIREMENTS ........................................................H-1

H.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE ..H-1

H.2. 752.225-70 SOURCE AND NATIONALITY REQUIREMENTS (FEB 2012)................H-1 H.3 752.7004 EMERGENCY LOCATOR INFORMATION (JUL 1997)...............................H-1

H.4 AIDAR 752.7005, SUBMISSION REQUIREMENTS FOR DEVELOPMENT

EXPERIENCE DOCUMENTS (SEP 2013) ........................................................................H-2 H.5 INSURANCE AND SERVICES ...........................................................................................H-3

H.6 752.228-70 MEDICAL EVACUATION (MEDEVAC) SERVICES (JULY 2007) ..........H-4

H.7 AUTHORIZED GEOGRAPHIC CODE.............................................................................H-5 H.8 LANGUAGE OF REPORTS AND OTHER OUTPUTS...................................................H-5 H.9 752.7034 ACKNOWLEDGMENT AND DISCLAIMER (DEC 1991) .............................H-5 H.10 EXECUTIVE ORDER ON TERRORISM FINANCING (FEB 2002) .............................H-5

H.11 FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL

CONFERENCES (JUNE 2012) ............................................................................................H-6 H.12 REPORTING OF FOREIGN TAXES (JULY 2007) .........................................................H-6 H.13 USAID DISABILITY POLICY - ACQUISITION (DECEMBER 2004) .........................H-7

H.14 HOMELAND SECURITY PRESIDENTIAL DIRECTIVE -12

(HSPD-12) (SEPTEMBER 2006) .........................................................................................H-7 H.15 ORGANIZATIONAL CONFLICT OF INTEREST..........................................................H-8 H.16 CONFLICTS OF INTEREST ..............................................................................................H-8

H.17 752.7032 INTERNATIONAL TRAVEL APPROVAL AND NOTIFICATION

REQUIREMENTS (APR 2014)............................................................................................H-9 H.18 ENVIRONMENTAL COMPLIANCE ..............................................................................H-10 H.19 DISCLOSURE OF INFORMATION ................................................................................H-11 H.20 BUSINESS CLASS TRAVEL ............................................................................................H-12 H.21 NEWS RELEASE ................................................................................................................H-12 H.22 TITLE TO PROPERTY .....................................................................................................H-12 H.23 PRESS RELATIONS ..........................................................................................................H-12 H.24 NONDISCRIMINATION (JUNE 2012) ............................................................................H-13 H.25 USAID-FINANCED THIRD-PARTY WEB SITES (AUGUST 2013) ...........................H-13

H.26 CONFERENCE PLANNING AND REQUIRED APPROVALS (AUGUST 2013) ......H-14

H.27 USAID IMPLEMENTING PARTNER NOTICES (IPN) PORTAL FOR

ACQUISITION (JULY 2014) .............................................................................................H-15

H.28 SUBMISSIONOF DATASETS TO THE DEVELOPMENT DATALIBRARY

(DDL) (OCTOBER 2014)....................................................................................................H-16 H.29 PROHIBITION AGAINST DISCRIMINATION (OCT 2011) .......................................H-17

H.30 PROHIBITION ON THE USE OF FEDERAL FUNDS TO PROMOTE, SUPPORT,

OR ADVOCATE THE LEGALIZATION OR PRACTICE OF PROSTITUTION–TIP

ACQUISITION (MAY 2007)..............................................................................................H-17

H.31 USAID IMPLEMENTATION OF SECTION 508 OF THE REHABILITATION

ACT OF 1973 AND FEDERAL ACQUISITION CIRCULAR (FAC) 97-27

"ELECTRONIC AND INFORMATION TECHNOLOGY ACCESSIBILITY ...........H-18

H.32 CONTRACTOR’S PERSONNEL INTEGRITY IN FOREIGN ASSISTANCE ..........H-18

H.33 THIRD COUNTRY TRAINING .......................................................................................H-18

H.34 52.203-99, PROHIBITION ON CONTRACTING WITH ENTITIES THAT

REQUIRE CERTAIN INTERNAL CONFIDENTIALITY AGREEMENTS

(DEVIATION 2015-02) .......................................................................................................H-18

H.35 LOGISTIC SUPPORT ........................................................................................................H-18 H.36 CONSENT TO SUBCONTRACTS ...................................................................................H-18

H.37 CONFIDENTIALITY AND OWNERSHIP OF INTELLECTUAL PROPERTY .......H-19

H.38 CONTRACTOR’S USE OF PROJECT VEHICLES AND LIABILITY

INSURANCE REQUIREMENTS FOR PRIVATELY OWNED VEHICLES .............H-19

H.39 NONEXPENDABLE PROPERTY PURCHASES AND INFORMATION

TECHNOLOGY RESOURCES.........................................................................................H-19 H.40 FRAUD REPORTING ........................................................................................................H-20 H.41 FACILITIES USED FOR RELIGIOUS ACTIVITIES ...................................................H-20

PART II - CONTRACT CLAUSES..................................................................................................I-1

SECTION I - CONTRACT CLAUSES ............................................................................................I-1

I.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE ....I-1

I.2 52.204-5 WOMEN – OWNED BUSINESS (OTHER THAN SMALL

BUSINESS) (OCT 2014) .........................................................................................................I-4

I.3 52.209-9 UPDATES OF PUBLICLY AVAILABLE INFORMATION

REGARDING RESPONSIBILITY MATTERS (JUL 2013) ..............................................I-4 I.4 52.216-24 LIMITATION OF GOVERNMENT LIABILITY (APR 1984) ........................I-5 I.5 52.219-9 SMALL BUSINESS SUBCONTRACTING PLAN (JAN 2017) .........................I-5 I.6 FAR 52.222-2 PAYMENT FOR OVERTIME PREMIUMS (JUL 1990) ........................I-15 I.7 52.222-35 EQUAL OPPORTUNITY FOR VETERANS (OCT 2015) .............................I-15

I.8 52.222-36 EQUAL OPPORTUNITY FOR WORKERS WITH DISABILITIES

(JUL 2014)..............................................................................................................................I-16

I.9 FAR 52.229-8 TAXES – FOREIGN COST REIMBURSEMENT CONTRACTS

(MAR 1990)............................................................................................................................I-16 I.10 52.243-7 NOTIFICATION OF CHANGES (JAN 2017)....................................................I-16

I.11 52.247-67 SUBMISSION OF TRANSPORTATION DOCUMENTS FOR AUDIT

(FEB 2006) .............................................................................................................................I-18 I.12 752.219-70 USAID MENTOR- PROTÉGÉ PROGRAM (JUL 2007) ..............................I-18

I.13 752.7101 VOLUNTARY POPULATION PLANNING ACTIVITIES (JUN 2008) ........I-19

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS.................J-1

SECTION J - LIST OF ATTACHMENTS......................................................................................J-1

SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS

OF BIDDERS .........................................................................................................................K-1

K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY

REFERENCE.........................................................................................................................K-1

K.2 52.204-8 ANNUAL REPRESENTATIONS AND CERTIFICATIONS (OCT 2016)......K-1

K.3 INSURANCE - IMMUNITY FROM TORT LIABILITY ................................................K-5

K.4 AGREEMENT ON, OR EXCEPTIONS TO, TERMS AND CONDITIONS..................K-5

K.5 52.209-5 CERTIFICATION REGARDING RESPONSIBILITY MATTERS

(OCT 2015) .............................................................................................................................K-5

K.6 52.209-7 INFORMATION REGARDING RESPONSIBILITY MATTERS

(JUL 2013) ..............................................................................................................................K-7 K.7 52.215-6 PLACE OF PERFORMANCE (OCT 1997) ........................................................K-8

K.8 52.219-22 SMALL DISADVANTAGED BUSINESS STATUS (OCT 1999)

ALTERNATE I (OCT 1998) ................................................................................................K-9

K.9 52.222-22 PREVIOUS CONTRACTS AND COMPLIANCE REPORTS (FEB 1999) K-10

K.10 52.222-25 AFFIRMATIVE ACTION COMPLIANCE (APR 1984)...............................K-10

K.11 52.225-20 PROHIBITION ON CONDUCTING RESTRICTED BUSINESS

OPERATIONS IN SUDAN—CERTIFICATION (AUG 2009) ......................................K-10

K. 12 52.227-15 REPRESENTATION OF LIMITED RIGHTS DATA AND

RESTRICTED COMPUTER SOFTWARE (DEC 2007) ................................................K-11

K.13 52.230-1 COST ACCOUNTING STANDARDS NOTICES AND

CERTIFICATION (OCT 2015) .........................................................................................K-12

K.14 52.230-7 PROPOSAL DISCLOSURE--COST ACCOUNTING PRACTICE

CHANGES (APR 2005).......................................................................................................K-14 K.15 AUTHORISED NEGOTIATORS......................................................................................K-14 K.16 SIGNATURE .......................................................................................................................K-14

SECTION L - INSTRUCTIONS, CONDITIONS, AND NOTICES TO BIDDERS...................L-1

L.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE ...L-1

L.2 52.216-1 TYPE OF CONTRACT (APR 1984) ....................................................................L-1 L.3 52.233-2 SERVICE OF PROTEST (SEP 2006) ..................................................................L-1 L.4 GENERAL INSTRUCTIONS TO OFFERORS .................................................................L-2 L.5 SUBMISSION/DELIVERY INSTRUCTIONS ...................................................................L-2

L.6 INSTRUCTIONS FOR PREPARATION OF TECHNICAL PROPOSAL .....................L-3

L.7 INSTRUCTIONS FOR PREPARATION AND SUBMISSION OF THE

COST/BUSINESS PROPOSAL............................................................................................L-6 L.8 ANNUAL CANCELLATION CEILINGS ........................................................................L-10

SECTION M - EVALUATION FACTORS FOR AWARD.........................................................M-1 M.1 GENERAL INFORMATION ..............................................................................................M-1 M.2 TECHNCAIL EVALUATION CRITERIA .......................................................................M-2 M.3 COST/BUSINESS EVALUATION .....................................................................................M-4 M.4 DETERMINATION OF COMPETITIVE RANGE..........................................................M-5 M.5 SOURCE SELECTION........................................................................................................M-5

SOL-111-17-000003 SECTION B

B-1

B - SUPPLIES OR SERVICES/PRICES

B.1 PURPOSE

The purpose of the Armenia MLET Program, implemented through this contract, is to improve the electricity market and support electricity trade with Georgia by helping Ministry of Energy Infrastructure and Natural Resources (MEINR), Public Service Regulatory Commission (PSRC) and energy institutions to adopt legal-regulatory reforms, and accelerate the implementation of market liberalization mechanisms, and strengthen Armenia-Georgia dialogue on cross-border trade.

B.2 CONTRACT TYPE

This is a Cost-Plus-Fixed-Fee (CPFF) Completion type contract. For the consideration set forth below, the Contractor achieve the performance objectives and deliverables or outputs described in Section C, Statement of Work, and in accordance with the performance standards specified herein.

B.3 ESTIMATED COST, FIXED FEE, AND OBLIGATED AMOUNT

(a) For the five-year contract period, the estimated cost for the performance of the work required hereunder, exclusive of fixed fee, is _______ [ TBD ] . The fixed fee, is _______ [ TBD ] . The estimated cost plus fixed fee, if any, is _______ [ TBD ] .

(b) Within the estimated cost plus fixed fee specified in paragraph (a) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the Contractor (and payment of fee) for performance hereunder is _______ [ TBD ] . The Contractor must not exceed the aforesaid obligated amount, unless authorized by the contracting officer pursuant to the clause of this contract entitled “Limitation of Funds (APR 1984)” FAR 52.232-22.

(c) Funds obligated hereunder are anticipated to be sufficient through _______ [ TBD ] .

B.4 BUDGET

The following itemized budget sets forth the estimates for reimbursement of dollar costs for line-items of cost and the fixed fee.

COST CATEGORY USD

Total Direct Cost Subcontracts Total Indirect Cost Fixed Fee Total Estimated Cost

B.5 INDIRECT COSTS

The contract clause entitled “Allowable Cost and Payment (JUN 2013)”, FAR 52.216-7, specifies that the indirect cost rates shall be established for each of the contractor’s accounting periods that apply to this contract. Pending establishment of revised provisional or final indirect cost rates, allowable indirect costs shall be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases:

B-2

Description Rate Base Type Period

TBD TBD% 1/ 1/ 1/

TBD TBD% 2/ 2/ 2/

1/ Base of Application: TBD Type of Rate: TBD Period: TBD

2/ Base of Application: TBD Type of Rate: TBD Period: TBD

B.6 ADVANCE UNDERSTANDING ON CEILING INDIRECT COST RATES AND

FINAL REIMBURSEMENT FOR INDIRECT COSTS

(a) The Contractor must make no change in its established method of classifying or allocating indirect costs without the prior written approval of the Contracting Officer.

(b) Reimbursement for indirect costs must be at the lower of the negotiated final provisional/pre-determined rates or the following ceiling rates:

Description 2018 2019 2020 2021 2022 [Rate 1 description to be inserted] % % % % % [Rate 1 description to be inserted] % % % % % [Rate 1 description to be inserted] % % % % %

(c) The Government will not be obligated to pay any additional amount should the final indirect cost rates exceed the negotiated ceiling rates. If the final indirect cost rates are less than the negotiated ceiling rates, the negotiated rates will be reduced to conform to the lower rates.

(d) This advance understanding must not change any monetary ceiling, cost limitation or obligation established in the contract.

B.7 PAYMENT OF FIXED FEE

a) The Government shall pay the Contractor for performing this contract the fixed fee specified in the Schedule.

(b) In accordance with FAR 52.216-8 “Fixed Fee (JUN 2011),” USAID reserves the right to withhold a reserve not to exceed $100,000. The Contracting Officer shall release 75 percent of all fee withholds under this contract after receipt of an adequate certified final indirect cost rate proposal covering the year of physical completion of this contract, provided the Contractor has satisfied all other contract terms and conditions, including the submission of the final patent and royalty reports, and is not delinquent in submitting final vouchers on prior years’ settlements. The Contracting Officer may release up to 90 percent of the fee withholds under this contract based on the Contractor’s past performance related to the submission and settlement of final indirect cost rate proposals.

B.8 MULTI-YEAR CONTRACT AND CANCELLATION CEILING

This contract is considered non-severable, and is therefore a multi-year contract as defined in FAR

17.103. Therefore, this contract is subject to the requirements of FAR 17.106.

B-3

A. Performance under this contract during the second and subsequent program years is contingent upon the appropriation of funds. All program years except the first are subject to cancellation.

Cancellation shall occur by the dates specified below if the Contracting Officer:

1. Notifies the Contractor that funds are not available for contract performance for any subsequent program year; or

2. Fails to notify the Contractor that funds are available for performance of the succeeding program year.

B. Cancellation Ceiling:

This is a CPFF type contract where the Contractor is authorized to be reimbursed for all costs which are allowable in accordance with FAR 52.216-7, “Allowable Costs and Payment.” Therefore, the Contractor will not incur any costs which would have been amortized over the life of the contract should the contract be cancelled in accordance with FAR 52.217-2.

The Government's liability for cancellation charges shall not exceed $TBD. This amount will be reduced in accordance with FAR 17.106-1(c)(1) at the conclusion of each program year, as follows:

Program Year Cancellation Date Cancellation Ceiling Year 1: 2018/2019 N/A N/A Year 2: 2019/2020 March 31, 2019 $0.00 Year 3: 2020/2021 March 31, 2020 $0.00 Year 4: 2021/2022 March 31, 2021 $0.00 Year 5: 2022/2023 March 31, 2022 $0.00

END OF SECTION B

SOL-111-17-000003 SECTION C

C-1

SECTION C - DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

MARKET LIBERALIZATION & ELECTRICITY TRADE PROGRAM (MLET)

C.1 INTRODUCTION

The purpose of the Armenia MLET Program, implemented through this contract, is to improve the electricity market and support electricity trade with Georgia by helping Ministry of Energy Infrastructure and Natural Resources (MEINR), Public Service Regulatory Commission (PSRC) and energy institutions to adopt legal-regulatory reforms, and accelerate the implementation of market liberalization mechanisms, and strengthen Armenia-Georgia dialogue on cross-border trade.

C.2 BACKGROUND

Armenia’s energy system’s improvement and interconnection with Georgia is a priority for U.S.

development assistance in the region. This interconnection has significant economic impacts because it will facilitate regional trade, and in a broader context, improve the country’s economic development. The interconnection is fundamental to improving Armenia’s energy security and compliance with western standards and approaches. Energy sector reform is also essential to enhance transparency, reduce corruption, and advance the market opening for sector competitiveness and diversification, in addition to increasing energy trade with Georgia.

Armenia’s energy sector relies mostly on imported oil and natural gas. It does not have domestic fossil energy resources and imports, mostly from Russia, contribute to approximately 80 percent of total energy consumption.

This energy insecurity is exacerbated by Armenia’s partial regional isolation, landlocked borders, and need for further energy sector reforms to increase transparency, accountability, and competitiveness to attract investments and increase trade. In addition, Armenia lacks integration with regional markets and an open national market and has an outdated energy law and tariff methodologies, as well as several old electricity generation units, all of which hinder both the investment environment and regional electricity trade.

The Armenian Nuclear Power Plant (ANPP), which provides about 40% of the country’s base load capacity, is one of the most cost efficient generators of electricity in the country and is, thus, a cornerstone of the nation’s power supply. However, it is old and needs to be replaced. The Government of Armenia (GOAM) is considering the option of a new small modular reactor (SMR) at the existing site. Therefore, regional energy integration coupled with attracting investments for the construction of a new nuclear unit, and /or new renewables are co-joined issues for Armenia.

The GOAM recognizes the urgent need for market liberalization and is committed to diversifying its energy supply, as illustrated by the recent sale of the largest hydropower plant to Contour Global, a U.S. company. Furthermore, the GOAM requested USAID assistance to open up internal electricity markets, assist in regional integration with Georgia, and support options for new generation.

Strategic links to Country Development and Cooperation Strategy

The MLET supports USAID/Armenia’s 2013-2017 Country Development Cooperation Strategy Development Objective (DO) 1, “More inclusive and sustainable economic growth,” and specifically Sub-Intermediate Result 1.1.3 “More strategic management of energy and water resources”. It also

C-2 supports the Project Appraisal Document, approved in October 2014, for achieving DO 1 referenced above.

C.3 SCOPE OF WORK

Over the past decade, USAID/Armenia has facilitated significant progress in macro-level reforms, including unbundling of the electricity and gas sectors, creation of an independent regulator, penetration of substantial renewable energy resources, large-scale privatization of electricity generation and distribution assets, improving the quality of services, and overcoming various difficulties that the country’s energy sector faced following independence in 1991.

However, Armenia remains energy insecure and is among the most dependent on energy imports in the region.

The Armenian power sector is over-regulated; the wholesale and retail power markets have no elements of competition and remain monopolized under a single-buyer market structure, direct sales between generators and consumers are not permitted, and there is no competition among generators to supply either to the single buyer or to end-users.

While Armenia does not currently comply with international best practices in regard to its market structure and transparency, the GOAM is committed to doing so.

Through this 5 year contract, USAID will assist in developing and implementing liberalized market rules, which will support energy market compliance with western approaches and facilitate the electricity trade with Georgia.

To build off of USAID’s previous efforts, the contractor will support the implementation of Armenia’s Energy Strategy and Action Plan for Market Liberalization and Promotion of Cross- Border Trade, as well as Regulatory Road Map, and PSRC’s concept paper.

To make energy market reforms successful, this contract will focus on assisting in the establishment of the necessary legal regulatory framework, creating market rules, procedures, and software, and providing necessary training and consultancy especially to the newly established institutions like Market Operator, as well as those who will be caring new functions like System Operator in order to support a smooth transition to an open market.

The contract also will support the Armenia–Georgia Electricity Working group, harmonization of regulatory approaches with those in Georgia and the development of trade mechanisms that are critical for promotion of electricity trade.

Overall, the contract will assist in the creation of an investor-friendly environment to accelerate competitiveness, power sector development, and regional trade and in a broader context, improve the country’s economic development and minimize the potential for corruption.

USAID’s principal counterparts for this endeavor are the MEINR, the PSRC, Market Operator, System Operator, and others. Additional partners will be Armenia- Georgia electricity working group, key research and support institutions, as well as private entities of the energy sector.

3.1 Energy Market Development

3.1.1 Legal and Regulatory Framework

The Energy Law, adopted in 2001, is the main legal document regulating the relations between power sector entities. The law defines the responsibilities of the Ministry of Energy Infrastructures and Natural Resources (MOEINR), the Public Service Regulatory Commission (PSRC), the market participants, and customers. However, it does not include any provisions for general market design

C-3 and market rules, which is a legal element required by E.U. directives. Neither the Energy Law nor any regulation issued by the PSRC guarantees open, non-discriminatory access to the transmission and distribution grids in Armenia.

The PSRC sets wholesale tariffs of the generating plants to a single buyer, except for the tariffs charged by the Hrazdan 5 thermal power plant and the prices set for export.

There are unnecessary restrictions in the current market regulations and export/import regulations that impede the sector’s effective development, and limit private investment and trade. Export is possible when the internal market demand is fully covered. This means that only the highest-cost electricity can be exported and that the only plants that can export power are the inefficient Hrazdan 5 and the Hrazdan Thermal Power Plant. In addition, the PSRC’s export rules do not provide guidance on how capacity of cross-border connections should be allocated in the event of congestion. In liberalized power systems, the congestion management in the transmission network is crucial for the efficiency of inter-linkages between unbundled generation and transmission.

The current regulations are not aligned with the E.U. In addition, without a competitive open market, transparency, and accountability in operations, the efficiency of the sector is decreasing. Additionally, Georgia, as a new Member of the E.U. Energy Community, is strategically changing its internal regulations to be in compliance with the E.U. criteria and it has created a relevant market structure for a fully competitive power market. To facilitate regional trade, infrastructure development must be complemented by harmonizing the regulations and standards with Georgia to maximize the benefits of integration for both countries. New energy infrastructure with old regulations will not have nearly the impact it could have with updated and appropriate compatible regulations.

3.1.2 Market Model of Armenia

Armenia has legally unbundled its electricity transmission and distribution systems from energy generation. Although some unbundling has taken place, Electric Networks of Armenia holds exclusive right of distribution and supply of electricity to the customers. The original five-year exclusive right for supply outlined in the Energy Law expired in 2007, but the exclusive status remains unchanged.

The wholesale power market of Armenia has no elements of competition; there is no direct contracting between consumers and suppliers or generators, the market rules are not clear since there are no comprehensive or consistent documents on these rules.

In 2016, USAID’s Enhancing Capacities for Low Emission Development Strategies (EC-LEDS) project produced two reports to guide power market liberalization and trade in upcoming years:

Armenia Gap Analysis and New Market Designs for the Power Sector. The Gap Analysis provided a list of major market challenges and legal barriers facing Armenia’s power sector and cross-border trade in relation to E.U. regulations. The New Market Design clarified the necessary market changes and discussed new opportunities for cross-border trade between Armenia and Georgia. The report provided a new market model and several market opening scenarios. It also provided an outline for a transitional phase to mitigate the impact on end users and to support a smooth transition to an open market. The report also included an action plan for market liberalization and cross-border trade with Georgia.

The National Association of Regulatory Utility Commissioners’ (NARUC) Black Sea Regulatory Initiative Project, funded by USAID’s Europe & Eurasia Bureau, produced a Regulatory Road Map outlining how to transition Armenia’s energy market to an open market from a regulatory perspective.

In addition, US Energy Association (USEA) is assisting with the development of the new Grid Code for the Armenian System Operator in compliance with the western approaches. At the same time, on September 7, 2016, the PSRC adopted a concept for necessary changes in the regulatory environment to support market liberalization and regional trade. The new Grid Code was approved by PSRC on May 17, 2017.

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Furthermore, the Asian Development Bank, in coordination with USAID and based on EC-LEDS reports, put a precondition in the loan agreement for “Infrastructure Sustainability Support” to adopt the Action Plan for market liberalization and promotion of cross-border trade with the respective timetable by the end of May, 2017. The GOAM adopted this Action Plan on July 27, 2017.

3.1.3 Strengthen the market and system operators and market participants

Market liberalization requires structural and functional changes of the existing market. New institutions need to be established and functions of existing ones must be transformed in compliance with the market rules. In particular, a) Market Operator (MO) need to carry out a wide range of functions under new market conditions, including preparation of rules and cross-border trade processes; b) no suppliers to increase efficiency and competition in retail markets that enable unbundling of distribution and supply functions; and c) no developed traders to conduct export/import transactions in wholesale markets and to aggregate individual generation units to increase their competitiveness in domestic markets and in regional trade.

3.2 Supply Diversification

The primary threat to Armenia’s energy security is aging infrastructure, that includes the aging Metzamor nuclear power plant (ANPP), which provides about 40% of the country’s base load capacity, the age and inefficiency of other power plants ( e.g. old Thermal Power Plants), and limited diversification of renewable energy sources. In 2014 USAID’s Low Emission Strategies and Clean Energy Development (LEDS) project, in cooperation with the Scientific Research institute of Energy, developed the Least-Cost Energy Development Plan (LCEDP) to support Armenia’s long- term interests in developing its energy generation capacities.

The main objective of the LCEDP is to inform the energy development strategy of Armenia, taking into consideration economic developments of the past several years, the available potential of technologies and resources, and the laws and strategic plans of the GOAM. Several alternative scenarios were analyzed to assess impacts of various key energy system technical and economic options, and their implications for energy security and independence of the country. One of the recommendations of the LCEDP is to develop a small nuclear unit (SMR) in the next decade as a cost-effective option. As a result, the new Energy Sector Strategy was developed and adopted in 2015 to cover the period until 2036 based on the LCEDP.

USAID also supported the GOAM and Armenia’s Nuclear Radiation Agency in conducting environmental and planning studies, as well as safety analysis in compliance with western approaches with respect to new nuclear options.

However, there is still a need for further updates to the LCEDP, considering changes in technologies, including the cost of SMR and renewable technologies, updates of planning and environmental studies for SMR, tariff methodology and structure, and support updates to energy strategy and development of the 10-year energy sector plan etc.

3.3 Cross Border Cooperation

Strengthening the Armenian energy system’s interconnection and trade with Georgia would enhance Armenia’s economic resiliency by connecting it to a larger, integrated regional electricity market.

This would enable economies of scale needed to attract critical domestic and foreign investment, to replace aging generation infrastructure and improve the reliability and responsiveness of the power grid. Regional market linkages are also fundamental to improving Armenia’s energy security by diversifying energy supply.

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During the last five years, USAID’s projects – Energy Security and Regional Integration (ESRI), LEDS, and EC-LEDS – initiated support for regional integration with and via Georgia, including the first steps necessary to open the Armenian energy market.

In particular, USAID’s projects have conducted an analysis of the regional power exchange potential.

USAID also helped facilitate dialogue between Armenia and Georgia through the establishment of the Armenia-Georgia Joint Working Group, comprised of decision-makers and technical staff to support power systems integration. In addition, USAID assisted in the development of a framework for interconnection, including the development and signing of a memorandum of understanding for sub-regional transmission planning and integration between Armenian and Georgian energy companies, USAID’s projects Energy Assistance and Regional Integration (ESRI) (Armenia) and Black Sea Transmission Planning (Georgia). This established the foundation for joint planning and the development of legal and regulatory frameworks for systems integration and for regulations to support emergency power supplies and inadvertent power flows. Thanks in large part to USAID’s efforts, in 2014, the Armenian PSRC and the Georgian National Energy and Water Supply Regulatory Commission signed a memorandum of understanding to cooperate in the field of energy and water supply. Specifically, the parties agreed to cooperate on the development of energy sector regulation, exchange information and best practices, and undertake joint projects in energy.

USAID has also supported the development of new, modern transmission infrastructure that is being funded by the German development bank, Kreditanstalt für Wiederaufbau bank (KfW). This infrastructure will connect Armenia to Georgia’s power grid by building a high-voltage line between the two countries and a back-to-back converter station close to the Georgian border by 2018. In order to facilitate energy trade, improve the reliability of the power system, and maximize the benefits of integration for both countries, the development of the new infrastructure must be complemented by legal-regulatory reforms, market liberalization, and the harmonization of Armenia’s regulations and standards with Georgia.

In response to the needs defined above, the GOAM approached USAID requesting further support for regional energy integration, with a high priority placed on addressing the opening of the Armenian energy market and the harmonization of Armenia’s regulatory frameworks and standards with Georgia and the E.U. On June 30, 2017, the Armenia-Georgia joint electricity working group, revitalized with the assistance of EC-LEDS project, approved the road map to support cross border trade.

C.4 DETAILED WORK REQUIREMENTS

Task 1: Energy Market Development

Subtask 1.1: Legal and regulatory reforms to support market liberalization and an effective electricity trading mechanism

Assist the energy working group (EWG), created by the GOAM, in drafting the legal and regulatory documents in compliance with the Action Plan for electricity market liberalization, promotion of cross-border trade and support their adoption/implementation.

Draft a new Energy Law (to replace the Energy Law of 2001) that will outline a new electricity market in Armenia and trading mechanism. The introduction of a new electricity market will be phased over a period of years as was done elsewhere in Europe to mitigate against a negative impact on consumers; however the law will state the principles of the market, while transitional provisions can be stipulated in the action plan and regulations.

Support drafting and adoption of the implementing rules, regulations, and standards by the PSRC and the GOAM.

Strengthen the capacity of the PSRC, Transmission Operator, Settlement Centers, and other energy entities to support development of a new legal-regulatory framework.

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Subtask 1.2: Develop and implement the market model for Armenia Strengthen the capacity of the PSRC, Transmission Operator, Settlement Centers, and other energy entities to be able to support the implementation of a new legal-regulatory framework.

In particular, assist in the implementation of “Transitional Market Rules” to govern the proposed transition from a “single buyer” model to the implementation of a competitive electricity market, to include, but not be limited to, the development and implementation of the rules and regulations for:

Third party access for qualified suppliers and buyers, those who are eligible for direct contracts;

Introduce the principles of balancing and ancillary services;

Update/development of power purchase agreements in accordance to new market rules; and Revision of tariff calculations.

Support the implementation of a new electricity market in Armenia that includes, but is not limited to analysis, rules, and regulations for:

Unbundling of supply and electricity distribution (transport);

Introducing day-ahead market;

Developing balancing market;

Developing ancillary services market;

Implementing data transparency requirements, including unified chart of accounts;

Protecting vulnerable population; and Supporting analysis for the reliable and safe operation of Armenia's power system in an open market.

Subtask 1.3: Strengthen the market and system operators and market participants Assist in a new market design to enable regulator, market and system operators, generators and consumers to take full advantage of new approaches;

Provide assistance in the development and usage of market software;

Support PSRC in monitoring the regulated and unregulated market players;

Provide consultations and advisory services to the PSRC, market operator, system operator, and other market participants to implement the new market rules and improve the functioning of the internal electricity market; and

Capacity building activities, including training, a study tour to support the PSRC, MOEINR, and market participants and consumers.

Task 2: Promote Energy Supply Diversification

Update the Least Cost Energy Development Plan (LCEDP) and support the update of the Armenian Energy Strategy to address realistic options for energy alternatives potentially available within the 10-year ANPP replacement horizon, such as western-researched SMR and new renewable technologies, as well as to support transition from the Markal software to Times.

Subtask 2.1 LCEDP and Energy Strategy Update annually the LCEDP to consider technological developments in SMR and renewables, etc.; and Assist the Energy Working group in updates of the Energy Strategy and development of the

10-year energy plan based on the LCEDP.

Subtask 2.2 Regulatory framework and capacity building for new generation options Support the Armenian Nuclear Regulatory Agency, the MOEINR, and PSRC in developing a regulatory framework, planning and environmental studies as well as capacity building for new nuclear SMR and/or renewable technologies; and

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Assist the PSRC in developing new tariff methodology and tariff structure to support investments for electricity generation.

Task 3: Facilitate cross-border trade

Strengthen Armenia-Georgia electricity dialogue through support to the Joint Working Group;

Promote export and import transactions in wholesale markets;

Support regional studies on electricity generation and transmission;

Assist in the development and implementation of non-discriminatory cross-border access to all eligible traders; and Support development of cross border trade mechanisms, including joint dispatch of power exchange, development of bilateral contracts, day ahead market and balancing.

C.5 KEY PERSONNEL

A. The four key personnel whom the Contractor shall furnish for the performance of this Contract are as follows:

Chief of Party position Power Systems Adviser Energy Regulatory Specialist Electricity Market Design Specialist

B. The personnel specified above are considered to be essential to the work being performed. Prior to replacing any of the specified individuals, the Contractor immediately notify both the Contracting Officer and the (COR reasonably in advance and shall must submit written justification (including proposed substitutions) in sufficient detail to permit evaluation of the impact on the program.

No replacement of personnel shall be made by the Contractor without the written consent of the Contracting Officer. The listing of key personnel may, with the consent of the contracting parties, be amended from time to time during the course of the contract to add,…