SOL-121-16-000014_Amendment_01.pdf

5. PROJECT NO.

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7. ADMINISTERED BY

2. AMENDMENT/MODIFICATION NO.

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6. ISSUED BY

8. NAME AND ADDRESS OF CONTRACTOR

4. REQUISITION/PURCHASE REQ. NO. 3. EFFECTIVE DATE

9A. AMENDMENT OF SOLICITATION NO.

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10A. MODIFICATION OF CONTRACT/ORDER NO.

10B. DATED

1. CONTRACT ID CODE

FACILITY CODE CODE

Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods:

The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers

E. IMPORTANT:

is extended,

(a) By completing Items 8 and 15, and returning __________ copies of the amendment; (b) By acknowledging receipt of this amendment of each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR AC- KNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY is not extended.

12. ACCOUNTING AND APPROPRIATION DATA

(REV. 10-83)

is required to sign this document and return ___________ copies to the issuing office. is not, A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.

15C. DATE SIGNED

B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b).

RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.

C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:

D. OTHER

BY /s/

Contractor

16C. DATE SIGNED

14. DESCRIPTION OF AMENDMENT/MODIFICATION

16B. UNITED STATES OF AMERICA

Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.

15A. NAME AND TITLE OF SIGNER 16A. NAME AND TITLE OF CONTRACTING OFFICER

15B. CONTRACTOR/OFFEROR

STANDARD FORM 30 STANDARD FORM 30

(Type or print) (Type or print)

(Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

(No., street, county, State and ZIP Code)

(If other than Item 6)

(Specify type of modification and authority)

(such as changes in paying office, appropriation date, etc.)

(If required)

(If applicable)

(SEE ITEM 11)

(SEE ITEM 13)

(X)

(X)

13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,

IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

(Signature of person authorized to sign) (Signature of Contracting Officer)

1 25

01 See Block 16 C

USAID/Ukraine/Regional Contract Office Department of State 5850 Kyiv Place Washington D.C. 20521-5850

USAID/Ukraine/Regional Contract Office Department of State 5850 Kyiv Place Washington D.C. 20521-5850

TO ALL OFFERORS x

SOL-121-16-000014

December 28, 2016

X x one

The purpose of this Amendment No. 01 is to (1) provide answers to the questions submitted by potential Offerors regarding Request for Proposal (RFP) No. SOL-121-16-000014, Energy Security through Competitive Energy Markets Program in Ukraine, (2) post a revised RFP based on the questions received, and (3) extend the current closing date for submission of proposals to January 31, 2017.

Michael Capobianco Regional Contracting Officer

12/28/2016

RFP SOL-121-16-000014

Amendment No. 01

PART I – ANSWERS TO THE QUESTIONS

General

Question 1:

Answer:

Do you have any expression of interest program or other way for a veteran owned small business to know which larger companies may be bidding who would be interested in subcontracting with small business?

No.

Question 2:

Would a proposal for the solicitation (SOL-121-16-000014) require a comprehensive contract to all of the tasks put forth? Would USAID/Ukraine accept a proposal targeting Task 1.3 only (Technical Capacity Building), or an unsolicited proposal to develop geothermal energy in the region?

The proposal must cover all tasks in the Statement of Work.

Question 3:

We are inquiring as to eligibility on the subject solicitation. XXX has significant capability to respond to this solicitation. Are we eligible to respond, and want to confirm that we can lead a proposal team, and if we are selected for an award that the USAID will issue an Interagency Agreement, that would fund our proposal.

USAID intends to issue a five-year Contract. No Interagency Agreements will be funded under this solicitation.

Question 4:

Does an incumbent exist for the potential requirement: USAID/Ukraine Energy Security through Competitive Energy Markets Program in Ukraine under SOL-121-16-000014. If so, could you please provide the following information: Vendor name, Contract number, Value, Date of award, Expiration date?

No. This is a new opportunity.

Question 5:

The need to institute a cyber and data security plan within the scope of the project is extremely pertinent. If selected to participate, would these activities be able to be submitted to contracting officer for consideration?

Question 6:

Has the Ukraine Mission’s 2012-2016 CDCS and/or Results Framework been updated; if so, can it be shared?

No it has not been updated. This activity utilizes the Improved Energy Policies (CDCS IR 2.4.1), More Competitive Energy Markets (CDCS IR 2.4.2.), and More Private Investments in Energy Sector (CDCS IR 2.4.4).

Question 7:

Does the $30 million figure for procurement include all the associated technical support for analyzing the network, modeling the power system, recommending reliability improvements, developing tendering documents, negotiating contracts and overseeing the projects’ implementation? Or should the cost of such activities be assumed to be included in those other areas of CEM not included within the procurement "plug figure"?

$30 million is a plug number. This number includes all expenses related to the procurement process. Please refer to the revised RFP Section L.7 (b) Part 2(iv).

Section B

Question 8:

Section B.5, Page 3; Section F.6,Page 22-23 - Under section B.5 it is stated that “Payment of the fixed fee will be made upon receipt of the deliverables identified in the Reports, Deliverables and Fee Schedule set forth in Section F.6.” It’s clear upon examination of the table in F.6 that most of the fee is linked to completion of deliverables that may not be completed prior to the end of year 3, and many of which will take up to the full period of performance to complete. This infers that a contractor will be unable to collect fee for a significant period of time, including on significant management of procurements, grants and other activities not directly associated with the prescribed deliverables. In addition, many deliverables are dependent on the actions of organizations and developments outside the direct control of the contractor. To address these concerns, would USAID be willing to consider one or more of the following amendments to the fee structure?

a) Decouple fees on procurements, grants, and training from fees associated with completion of technical deliverables. Given that 35% of CEM resources are dedicated to procurements, and that the process of implementing such procurements will require a significant cash commitment from the Contractor, enable the fee associated with such procurements to be recovered separately from the deliverable-based fee structure outlined in the table on Pages 22 and 23.

b) Consider changing CEM’s current design for a $30 million procurement function and $10 million grants program to a single $40 million grants initiative.

c) Introduce intermediate milestones on deliverables. Given that progress toward deliverables will be clear and demonstrable for much of the project duration, payment of a portion of the fixed fee could be assigned to clear, predefined steps along the way.

d) Revise the fee schedule so that, for fees not associated with the procurement or grants function (see first bullet above), a proportion of the fee is assigned to reports/deliverables that are part of Section F, with a separate proportion of the fee linked to Section C. For example, a 50% split Section C and Section F would establish a more appropriate balance of risk and timing for fee collection, while maintaining strong incentives to achieve the required outcomes.

No. Please see the answer to Question 7 for the $30 million plug number.

The Contractor may utilize the Grants under Contract (GUC) program and/or subcontracts to perform certain activities, such as, end-user energy surveys, partnerships with GOU agencies and institutions for least-cost energy planning programs, among other possible instruments and initiatives to achieve the Program goals.

Section C

Question 9:

Section C.1, Page 6 - The third bullet in Section C.1 states that one of the goals of the project is to increase cross-border electricity and gas networks to 15% of Ukrainian market volume.

Which neighboring countries are envisioned to be included here? Can USAID please clarify the relationship between the networks and volume? Is it implied that the amount of trade should reach 15% of internal consumption or production?

Cross-border trades are envisioned with European neighbors. 15 % will apply to cross-border trade volumes with respect to domestic market size.

Question 10:

Section C.1, Page 6 - Could USAID clarify what is meant by the goal, "Increase cross-border electricity and gas networks to at least 15% of Ukrainian market volume"? In terms of the gas market, Ukraine would appear to already be well past this.

The Contractor shall significantly contribute to their ultimate achievement.

Question 11:

Section C.1, Page 6 - Could USAID clarify what is meant when it says the Contractor "must focus on the following goals"? Is the Contractor (through the project's implementation) expected to achieve these goals or significantly contribute to their ultimate achievement?

The Contractor shall significantly contribute to their ultimate achievement.

Question 12:

Section C.2, Page 7 - USAID writes that ‘Financial closing refers to merchant power plants with nonrecourse, project financing.’ Depending on market reforms yet to be developed and implemented in full and market developments more broadly, renewable energy projects implemented through private sector participants may take forms other than merchant power plants using strictly non-recourse, project financing. Consequently, would USAID consider revising its limitation on financing closing to include ‘RE power plants that are majority owned by private sector participants (not part of the Ukrainian public sector) and implemented through project, own-source, or corporate finance without recourse to the central Government through sovereign guarantee’? Such a definition would still require that RE projects be private sector-led and implemented with limited support of the central government.

Yes.

Question 13:

Section C.3, Activity 1, Page 7-10 - Under Activity 2, the RFP provides two bulleted lists for results that the Contractor must achieve on pages 12-13.Could USAID provide results that the Contractor must achieve for Activity 1 in a similar bulleted format?

All related requirements are under sub-tasks in tasks, activities and in Section F.

Question 14:

Section C.3, Page 9 - The second paragraph from the bottom contains requirements for improvement of corporate governance and unbundling of energy sector institutions. However there does not seem to be a corresponding Task for these activities. Could you please confirm that these activities belong to Task 1.6 “Prepare and Implement HICD” or should the Contractor propose separate tasks for corporate governance and unbundling, given that unbundling is largely a regulatory/licensing requirement?

Unbundling is a part of the EU Directives-based competitive energy market development requirements. This is a part of Task 1.1. Human and Institutional Capacity Development (HICD) is for related institutions to perform competitive energy market duties and in Task 1.6

Question 15:

Section C.3, Page 9 and Section F.6, Page 22 - On page 9, the definition of a large city is given as a population of over 500,000 and a small city as a population of 100,000 to 500,000.

On page 22, the definition of a small city is increased to 1 million, and a large city is over 1 million. Can USAID please clarify which size definition is correct?

Smaller numbers are correct (500,000 and 100,000 to 500,000) and this will give more candidate cities.

Question 16:

Section C.3, Activity 1, Page 9- The RFP references the deliverable requirement as “3 large cities (population more than 500,000).” In the table on page 22, the first deliverable requires “comprehensive heating markets established in 3 large cities (population > 1 million).” Can USAID clarify which definition of large city should apply? Given the very limited number of cities in Ukraine with populations larger than 1 million, and given that a number of these fall within conflict zones, we request that the smaller option be adopted, if possible, to provide CEM with greater implementation flexibility.

Please see the answer to Question 15.

Question 17:

Section C.3, Page 10 - Could you please explain the difference between Task 1.3 “Implementing Party Capacity Building” and 1.6. “Prepare and Implement HICD”. They seem to be targeting the same stakeholders and are focused on the same objective of improving capacity for implementation of competitive markets Not all institutions or stakeholders may receive comprehensive HICD assistance. The Contractor shall make the selection with the final goal of establishing competitive energy markets in Ukraine.

Question 18:

Section C.3, Page 10 - Market coupling with Moldova (task 1.4) is considered. If other neighboring countries are included, which kind of trading arrangement will be considered?

Market coupling is only considered with Moldova.

Question 19:

Section C.3, Activity 1, Page 11 - “For electricity and gas markets: 100% of the bilateral trade market must be established, 10% of the real-time market (day-ahead market and intraday market) must be established.”

Are we correct that the text cites above presents two of the expected results for Activity 1?

Question 20:

Section C.3, Page 12 - States that a prefeasibility study must include public consultations at the site. We would have thought complexities such as public consultations would only occur at the stage of a feasibility study (which is an exercise costing $1 million or more). Given there are 50 such studies, could USAID please consider and include text in the scope to show what must be contained in each prefeasibility study?

USAID places a very high value for public consultations and social responsibility.

Because the pre-feasibility work will not include comprehensive and approved environment and social impact analyses, these consultations will serve for informing the affected communities and recording their responses, as part of the pre-feasibility work packages. Meetings can be consolidated in a given location for a number of nearby project sites for efficiency.

Question 21:

Section C.3, Page 13 - Under the required results for bioenergy development, would USAID consider revising the limitation of financing beyond its current definition of ‘non-recourse project financing’ to reflect concerns similar to those noted in Question 12, above?

Question 22:

Section C.3, Page 13 - How will the measurements be conducted to confirm the reduction or avoidance of 500,000 metric tons in CO2 emissions under Activity 2, and will the measurement be conducted by the contractor?

There will be no measurement. For the quantity of greenhouse gas emissions, calculated in metric tons of CO2 equivalent, reduced or sequestered as a result of USG assistance to track the result of clean energy assistance, the implementing partner will refer to USAID toolbox, Clean Energy Emission Reduction (CLEER) protocol activity at website https://www.cleertool.org

Question 23:

Section C.3, Page 13 - States that 50 prefeasibility studies would cover renewable energy.

There are 2 prefeasibility studies shown for coal on page 15 (Task 2.4). Given the scope of interventions that USAID has listed in the coal sector (combustion efficiency, steam cycle, motors and other equipment) the coal studies will be substantial undertakings. Yet coal is the keystone of Ukraine’s electricity sector, and the needs are vast. Could USAID please confirm than only 2 prefeasibility studies are to be undertaken for coal projects, whereas 50 are to be done for renewables?

These two tasks are different. 50 (or more) pre-feasibility studies are for greenfield renewable energy projects that aim to increase renewable energy generation in Ukraine.

2 pre-feasibility projects for coal power plants are for existing plants and the intention is to lower their emissions, improve plant efficiencies and act as demonstration projects for other power plant operators.

Question 24:

Section C.3, Page 13 - The RFP indicates “the Contractor must identify and partner with key Ukrainian stakeholders to prepare, maintain and sustain … activities.” Can USAID elaborate on the meaning of “partner” in this context? Does this specifically imply subcontractor or grantee relationships under the contract?

This is intended for cooperation and collaboration with other stakeholders and does not imply to establish contractual relationships with all entities. The latter relationship is also available as per Contractor’s decision and applicable USAID approvals.

https://www.cleertool.org/

Question 25:

Section C.3, Page 14 - Does not clearly state that the $30 million in projects will be funded under this contract, but the budget list on page 82 does call for it. Would USAID please consider inserting text concerning approval cycle that Contractor must move through to get the projects listed approved, procured and installed? In particular, we are interested in approvals not just on the part of USAID, but also approvals, access, and possible co-funding required on the side of GoU and counterparts to allow such works.

$30 million is a plug number; the offerors will not submit any proposals at this time.

The Contractor will discuss details with USAID in the 1st year Annual Implementation Plan. In addition, please see the answer to Question 7.

Question 26:

Section C.3, Activity 2, Page 11 - Emergency Control System/RAS Should there be a need for maintenance tools to help with post diagnosis of events, including sequential event reports and oscillography? Should the system have software that will help operators visualize the synchrophasors' data for oscillation of power, voltage stability and frequency change?

Please refer to the answer to Question 25.

Question 27:

Section C.3, Page 14 - Does USAID expect that the projects totaling $30 million will relate to the prefeasibility studies, or do those studies assist private investors and hence constitute a separate track?

No. Please refer to the answer to Question 25. The prefeasibility studies refer to renewable energy promotion as described in the SOW. In addition, please see the answer to Question 7.

Question 28:

Section C.3, Page 14 - Calls for preparation of a list of projects totaling $30 million, to increase efficiency in electricity and gas. Would coal projects be eligible?

Please see the answer to Question 7.

Question 29:

Section C.3, Activity 2, Task 2.4, Page 15 - “The Contractor must prepare pre-feasibility work for two (2) currently available coal power plant units for the improvement of combustion efficiency and boiler efficiency, optimization of the steam cycle, reduction of auxiliary power consumption by means of upgrading different pumps, motors, drives and power supplies, and employment of best practices in plant operations, procedures and maintenance.”

Ukraine has a number of thermal power plants (coal-based). Could USAID please confirm that offerors are free to propose 2 coal power plants for USAID approval?

Offerors are free to propose, but USAID is not expecting them to make any suggestions for the selection of coal power plants during this solicitation phase. This will be addressed during the annual work plan periods and will be subject to USAID approval.

Question 30:

Section C.3, Page 15 - Sub-task 2.4 requests the contractor to perform pre-feasibility work for 2 coal-fired power plants. As Centrenergo is the only GOU-owned SOE operating coal-fired power plants, please indicate which of the Centrenergo power plants will be available for performance of this work. From our understanding, two of the three Centrenergo coal fired power plants are near or behind rebel-controlled oblasts in eastern Ukraine. If USAID is considering support to other coal-fired power plants besides those owned by Centrenergo, please indicate which ones, and whether the current owners have already been approached to indicate their willingness to participate in CEM.

Please see the answer to Question 29.

Question 31:

Section C.3, Task 1.4, Page 10; Section F.3, Page 21; Section L.7(v), Page 82 - We note that the contractor is instructed to build market coupling procedures and processes to join, and promote trade between, the Ukrainian and Moldovan power markets. However, the place of performance includes only Ukraine. What interaction is expected of the contractor with the Moldovan electricity sector entities, stakeholders, and institutions? In addition, given the requirement for study tours and the designated 937 geographic code, will travel and work within EU destinations be approved, or is travel to the US only envisioned?

The Contractor must cooperate and collaborate with regional USAID projects and receive a technical direction from USAID before proceeding with Moldova-Ukraine market coupling. All study tour travel work needs USAID approval and EU destinations are acceptable, provided they also comply with the appropriate waiver.

Question 32:

Section C.3, Task 2.2, Page 14 - For the pre-feasibility studies referenced on p. 14, Task 2.2,

1) does the GOU have existing studies identifying potential sites across Ukraine for solar, wind, biomass, geothermal, and hydro, 2) will the contractor need to review those sites and propose site selection for the 50 sites to be studied, and 3) is there input data for the analysis readily available, such as wind flow data, water flow, availability of biomass material, land availability, well temperatures, and size of wells?

1) Offerors should answer these questions in their proposals, not USAID. 2) No at the proposal stage. It will be handled during the implementation stage. 3) Offerors should answer these questions in their proposals, not USAID.

Section F

Question 33:

Section F.4, Page 21 - In section F.4 of the solicitation it is stated that USAID will evaluate contractor performance during the initial, intermediate, and final periods of the contract. Please clarify when the initial performance evaluation will occur.

Initial performance review will occur on or after the first anniversary of the award.

Question 34:

Section F.6, Page 21 provides a fixed fee payment schedule that does not allow the contractor to earn a fee for completing several deliverables required in the contract. Given the factors outlined in FAR 15.404-4(d) for analyzing fee, we believe it is fair and reasonable to allow the contractor to earn a fee for all the deliverables it will be required to complete, rather than a select few. We respectfully request that USAID either revise the fixed fee payment schedule to assign fee to all the deliverables required under the contract or allow offerors to propose their own fixed fee payment schedule.

We have readjusted the fee schedule.

Question 35:

Section F.6, Page 22 - We respectfully request that USAID extend the due date for the draft 1st Year Annual Work Plan to 30 days of the effective contract date to allow the contractor additional time to mobilize a team and stakeholders to ensure work planning is a participatory, technically-driven process.

The due date for the 1st year Annual Work Plan will be within the 45 days of effective date of the contract.

Question 36:

Section F.6, Page 23 - A number of deliverable deadlines fall within the first few months of the effective date of the contract. For example, the first draft annual work plan is expected within 15 days of the contract term. At the same time, we understand, and have experience that, the Ukrainian work visa process often requires 2-3 months before approvals can be secured from the GOU. Recognizing the importance of being able to engage with counterparts to develop an effective work plan, would USAID consider adjusting deadlines to be more reflective of the work visa process timeline – such as achieving the first draft annual work plan within 90 days vs. 15?

No. Please refer the revised Section F.6 with the re-arranged fixed fee.

Question 37:

Section F.6, Page 22 - Could USAID please clarify the following item regarding Section F.6 Reports, Deliverables and Fee Schedule: Out of 26 Technical deliverables in the Table, only the deliverables based on outcome or impact indicators have a fixed fee assigned to them.

These are not deliverables, but rather outcomes. Such outcomes require that substantial actions and changes be made by Ukrainian institutions and stakeholders. These outcomes will probably take years to achieve/appear and will be influenced by multiple factors outside the control of the Contractor or project. The presentation as shown on page 22 implies that Contractor would not be eligible to receive any payments toward fee in the first couple of years of the contract, which seems unusual for a CPFF contract. Would USAID consider requesting bidders to propose a distribution schedule of the fixed fee?

Question 38:

Section F.6, Page 22 - Deliverables 1 and 2 call for establishing “Competitive heating markets.” How USAID will decide whether markets are established? Will it require only “market regulations in place” or actual deals to sell/buy heat? Could the offeror propose specific indicators?

Please refer to the following amendment. The language below was added to Section C, Sub-section C.3, Activity 1.

“Current USAID activity Municipal Energy Reform Project (MERP) in Ukraine has the following report in USAID Document Experience Clearinghouse (DEC):

Developing a Strategy for Introducing Competition into the District Heating Sector of Ukraine:

https://dec.usaid.gov/dec/content/Detail.aspx?ctID=ODVhZjk4NWQtM2YyMi00YjRmLT kxNjktZTcxMjM2NDBmY2Uy&rID=MzgzNDYy

For USAID decision of District Heating (DH) market establishment:

First of all, all practical work on competitive heating market (CHM) implementation in pilot cities shall start only after the necessary legislative and regulatory framework is in place. The Contracting Officer’s Representative (COR) will provide a technical direction to the Contractor for any effort during this phase, subject to termination of USAID’s MERP activity. In particular, Law of Ukraine “On heat supply” as of June 2, 2005, shall be amended as well as other laws that regulates relationships in the field of heat supply.

Related secondary legislation should be developed and approved including, but not limited to:

• Rules and conditions for dispensing by independent heat producers of heat energy to DH network;

• Standard/ typical agreement on buying/selling heat energy from independent producers;

• Methodology for calculation of basic (threshold) tariffs and fee for reservation of heat capacity;

• Procedure on determination of DH companies which are not liable for state regulation;

• Regulation on conditions for connection to the heat networks; and

• Procedures on pre-trial dispute resolution.

After this legislative framework is in place, and as directed by the COR, the Contractor shall proceed with the implementation of CHM in cities. The following is the recommended implementation stages:

First Stage:

- First of all, CHM requires implementing accounting unbundling of all DH suppliers. DH companies should be obliged to keep records and set separate tariffs for different types of license activities (production, transportation and supplying of heat energy). This requirement should be stipulated in the Law «On Amendments to the Law of Ukraine «On Heat Supply» and shall be enforced in pilot cities.

- DH network operator functions should be established as a separate activity from heat supply.

- Nondiscriminatory access of independent heat producers to heating networks is fundamental principle for the functioning of competitive heat market and shall be de jure and de facto implemented in pilot cities. Connection to DH network shall be economically and technically reasonable, clear, non-discriminatory and ensure the right of consumers to get the lowest price of heat energy.

The COR will determine the first stage completion and will issue a technical direction for the start of the second stage:

- In addition to the central DH producer (the municipal utility) one or more independent producers connect to the network. The Contractor takes steps to identify and mobilize independent heat producers to connect to network (through technical assistance, grants, etc.).

- A system of monthly auctions (or another system allowing regulating the heat tariff competitively) is established and implemented following the principle of the lowest price.

Some provision should be taken to encourage renewable energy: if the price of heat energy from renewables is the same as from the gas price, the priority of purchase is the heat energy from renewables, regardless of the amount within the monthly limit.

When all these steps are implemented, USAID will decide that DH market is established.”

Question 39:

Section F.6, Page 22 - Deliverables 5 and 7 call for establishing “100% of bilateral trade markets” for electricity and gas. How USAID will decide whether these markets are established? Will it require only “market regulations in place” or actual deals to sell/buy gas/electricity? Could the offeror propose specific indicators?

It will require actual deals to sell/buy gas/electricity. Moving from a single-buyer market, bilateral trades will require all contracts go between the parties (buyers and sellers) and the registration of these trades at respective market institutions, such as Market Operators or Guaranteed Buyers, according to the EU directives-based competitive energy market principles. This means that there will be no contracts with the current single-buyer EnergoRynok, other than the Public Service Obligations as defined in EU directives. All contracts and documents shall follow similar structures as European Federation of Energy Traders.

Question 40:

Section F.6, Page 22 – Deliverables 6 and 8 call for establishing “10% of real time markets” for electricity and gas. How USAID will decide whether these markets are established? Will it require 10% of all gas/electricity be offered for sale or 10% of market infrastructure put in place? Could the offeror propose specific indicators?

It will require actual deals to sell/buy gas/electricity. Real-time markets will require EU directives-based competitive energy market mechanisms, such as a power exchange, settlement and clearing of trades. This means that these contracts will be traded in the power exchanges, as defined in competitive energy markets. All real-time trades will also go through a market clearing mechanism as defined in respective EU regulations.

Question 41:

Section F.6, Page 22 - Deliverable 12 mentions an MOU phase. Is there a specific requirement as to what constitutes an MOU? For example, must it include a power purchase agreement and a raw material (or fuel) supply agreement?

This is the commitment of a project developer or investor to commercialize a USAID Contractor-prepared pre-feasibility study that will lead to financial closing. Its contents and signatories, such as a Government entity are subject to prevailing and new rules (Contractor assisted) and for the enforcement of the commitment of the project developer or investor. The ultimate aim is the realization of renewable energy investments and increased renewable energy generation.

Question 42:

Section F.6, Page 22 - Deliverables 1, 2, 11, 12, and 13 require the accomplishment of the same activity multiple times to achieve the fee listed against the deliverable (e.g., 50 prefeasibility studies completed, competitive heating markets in 3 large cities, etc.). It seems fairer and more commensurate with the work performed that fee be distributed after each individual activity is completed instead of once all activities are completed for that deliverable.

Would USAID consider revising its fee schedule as such?

Question 43:

Section F.6, Page 22 - There is a table that outlines the expected deliverables/reports for this project and assigns a portion of the fee to ten of these. In the case of at least four of these – Deliverables 5-8 (100% of the bilateral trade market established for electricity markets, 10% of the real time market established for electricity markets, 100% of the bilateral trade market established for gas markets, 10% of the real time market established for gas markets) – the deliverables in question include dimensions that lie outside the Contractor's manageable interest and will require Ukrainian political support to achieve. Will USAID consider defining these goals in a way that tracks and measures a Contractor’s performance only for those parts which are under its control? Will USAID also consider the Contractor putting forth additional suggestions on additional deliverables or intermediate deliverables against which the contractor would be paid?

No to all questions.

Question 44:

Section F.6, Page 22 -23 - The Fee Schedule shown on pages 22-23 of the RFP allocates 0% fee to many of the deliverables listed. Given that costs will be incurred in completing each of the required deliverables, and fee includes the cost of money to finance these implementation costs, would USAID permit bidders to propose alternative fee payment schedules?

No. This is a cost-reimbursable contract. All allowable costs will be reimbursed. 0% was changed to N/A in Section F.6.

Question 45:

Section F.6, Page 22 -23 - In reference to the table of deliverables/expected results on p 22-23, many of these will require deep cooperation with GOU counterparts to be achievable.

Recognizing the political and highly specific nature of many of these deliverables (such as market coupling with Moldova), and their importance to both program success and payment of fee, has USAID secured the formal agreement of GOU and other third-party stakeholders (such as the Government of Moldova) and counterparts to work cooperatively with USAID and the contractor to meet these targets? Are there formal agreements in place to this effect, and if so can these be shared with offerors?

USAID will obtain GOU and NEURC commitment to the formation of a steering committee that will guide the USAID/Ukraine Energy Security through Competitive Energy Markets Program technical assistance and ensure execution of reciprocal reform obligations of Ukrainian counterparts. If USAID cannot provide access to Moldova market coupling, the fixed fee will be redistributed evenly to do other activities, other than designated as N/A for the fixed fee in F.6.

Question 46:

Section F.6 (e), Page 26 - Item F.6. (e) calls for a grants manual, and the budget shown on page 82 calls for $10 million in grants. However the scope Section C does not seem to mention grants. Does USAID have specific uses in mind for the $10 million in grants?

This is a plug number. The Contractor shall utilize grants to perform certain activities, such as, end-user energy surveys, partnership with GOU agencies and institutions for least-cost energy planning programs, among other possible instruments and initiatives.

Question 47:

Section F.7, Page 27 - In terms of staffing of key personnel, and/or other positions may alternative positions be nominated?

Question 48:

Section F.7, Chief of Party, Page 28 - Relevant RFP Language: “The COP’s minimum required qualifications are: a Master’s degree in business administration, law, engineering, economics, finance, policy, or a related field”. It is frequently a USAID practice to recognize years of relevant work experience as an equivalency for academic requirements. Would USAID consider amending the COP required qualifications to recognize a Bachelor’s degree and 30 years of experience as equivalent to a Master’s?

Question 49:

Section F.7, Deputy Chief of Party, Page 28 - Relevant RFP Language: “The DCOP should…possess the following minimum required experience and qualifications: a Master’s degree in business administration, law, engineering, economics, finance policy, or a related field; at least 20 years of experience on policy and investment issues related to energy”.

Because the DCOP is subordinate to the COP, it is unusual for a DCOP job description to have the same required qualifications as the COP for education and years of experience. This level of requirements also limits the candidate pool. Would USAID consider amending the DCOP qualifications to require 15 years of experience?

Yes and the change has been made.

Question 50:

Section F.7, Senior Energy Economist, Page 29 - In order to ensure, the recruitment of the best qualified project team, would USAID consider adjusting the job requirement language for the Senior Energy Economist and the Energy Market and Institutional/Regulatory Advisor by widening the requirement of "at least 5 years of experience in the Eastern Europe region" to be "at least 5 years of experience in the Eastern Europe region or other relevant experience"?

Question 51:

Section F.7, Additional specialized expertise required, Pages 29-30 - May Contractors propose categories of specialists in addition to the eight specialists listed?

Section H

Question 52:

Section H.11(e), Page 42 - states that “One annual salary increase not more than 3 percent may be granted after the employee’s completion of each twelve month period of satisfactory services under the contract.” This restriction may preclude offerors from complying with AIDAR 752.7007, incorporated by reference in RFP Section H.10, which states that “Direct compensation of the Contractor’s personnel will be in accordance with the Contractor’s established policies, procedures, and practices, and the cost principles applicable to this contract.” We respectfully request that USAID revise the annual salary increase percentage to state “to be determined”, thereby allowing offerors to submit cost proposals in accordance with their established policies, procedures, and practice.

No and it does not conflict with the AIDAR clause.

Question 53:

Section H.11(e), Page 42 - The RFP, states that one annual increase salary increase not more than 3% percent may be granted after the employee’s completion of each twelve month period of satisfactory services under the contract. Would USAID clarify if this applies for both expat and local?

Both.

Question 54:

Section H.12, Page 42 - Would USAID please clarify the following statement, “the Cooperating Country institution associated with this project shall develop vacation leave schedules early in the employee’s tour?”

It is the responsibility of the Contractor to develop leave schedules early in the contract.

Question 55:

Section H.15, Page 45 – Given the centrality of the EU directives and closer integration with European energy markets to CEM’s scope of work, please consider changing the stated Geographic Code from 937, so as to enable the participation of European entities.

Any particular need for changing the geographic code to 935 may be discussed with the Contracting Officer after award.

Question 56:

Section H.15, Page 45 – The authorized geographic code is 937. Given the need to help Ukraine conform with EU directives, expertise is likely more relevant from EU rather than the other developing world. This point will be especially important if $30 million in equipment is to be procured. Such equipment will need to meet EU specifications, and European voltages and standards. Hence the source of the equipment is likely to be found in EU. Could USAID please consider changing the code to 935?

Please see the answer to Question 55.

Question 57:

Section H.23, Page 48 – Would USAID please clarify if fraud reporting should be added to the deliverables table in Section F.6 per the following statement included in section H.23, “Reports under this requirement must be submitted as a deliverable under the award?”

It is not needed to be added in Section F.6, but is still a requirement.

Question 58:

Section H.24, Page 48 - Would USAID please confirm that if an individual activity is included in the referenced IEE, no further approval or action is needed by the contractor and/or BEO?

Question 59:

Section H.27, Page 50 - We request that USAID remove the following language from section H.27 of the RFP; “For non-U.S. organizations there is no ceiling unless a fixed obligation grant is executed in which case the ceiling is $100,000.” As per the authorizing language of ADS

302.3.4.13, the Contractor shall follow ADS 303, including the established individual grant thresholds, in the implementation of the grants under contract program.

The language has been modified and the ceiling has been removed.

Question 60:

Section H.27, Page 50 - Would USAID please confirm that the implementing partner shall submit the Grants Manual to the CO for approval in accordance with section F.6 of the RFP, rather than section H.27.g?

The Grants Manual shall be submitted in accordance with section H.27.g.

Question 61:

Section H.29, Page 52 - The text in the section on DBA mentions a base period and options.

Could USAID please advise the relevance?

This refers to USAID’s contract for DBA insurance.

Question 62:

Section H.30, Page 53 - in the RFP is governed by USAID policies as provided under AAPD 16-02, but those policies are not yet a formal part of the AIDAR. Under standard rulemaking procedures, the Information Technology clauses in the AAPD would be published in the Federal Register, whereby contractors or affected implementers may assess their impact and costs, and respond accordingly before they become applicable to contractors in original or revised form. To date, this formal rulemaking procedure has not occurred, which typically allows contractors to discuss with USAID the impact and applicability of these clauses to contractors, despite the significant new requirements that could result in major operational costs to contractors. Moreover, the AAPD clauses, including clause H.30 in the RFP, bar contractors from billing USAID for any additional costs associated with their implementation.

As such, we kindly ask USAID to clarify the following questions:

a) Does USAID plan to engage in formal rulemaking procedures to support its implementation of clause H.30, and any other similar IT-related clauses flowing from

AAPD?

b) Does USAID envision that this contract will require the use of any information technology resources consistent with the following definition provided in the AAPD?

If yes, please indicate the type of information technology required, and how USAID envisions its relationship with the contractor will work given the provisions and requirements of Clause H.30.

“(1) any services or equipment, or interconnected system(s) or subsystem(s) of equipment, that are used in the automatic acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information by the agency;

where;

(2) such services or equipment are used by an agency if used by the agency directly or if used by a contractor under a contract with the agency that requires either use of the services or equipment or requires use of the services or equipment to a significant extent in the performance of a service or the furnishing of a product.

(3) The term “information technology” includes computers, ancillary equipment (including imaging peripherals, input, output, and storage devices necessary for security and surveillance), peripheral equipment designed to be controlled by the central processing unit of a computer, software, firmware and similar procedures, services (including provisioned services such as cloud computing and support services that support any point of the lifecycle of the equipment or services), and related resources.

(4) the term “information technology” does not include any equipment that is acquired by a contractor incidental to a contract that does not require use of the equipment.”

c) Provided the “information technology” definition above, clause H.30 would be applicable to contractors only if the underlined portions of the definition above were true – meaning specifically, only if USAID required and specified the use of particular services and equipment under this contract that would be used in the automatic acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information by USAID. As such, will USAID require the contractor, under this contract, to enlist the use of services or equipment to be used in the automatic acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information by USAID? If yes, please specify the type of services and/or equipment that would be required for this purpose, and therefore subject to the applicability of this clause. Or, if USAID finds that the clause is not applicable to contractors, we kindly request the removal of Clause H.30 from the RFP.

This is USAID policy and we cannot remove the clause. Please contact the points of contact in the AAPD for questions on rulemaking.

Section I

Question 63:

Section I.3, Page 62 - The RFP section I.3 includes FAR Clause 52.229-8 Taxes –Foreign Cost Reimbursement Contracts. Please confirm if the resultant contract will be exempted from local taxes and duties (for US and local teaming partners and their personnel).

Section K

Question 64:

Section K.2 (a)(1) (2), Page 67 - States the Small business size for code 541990 is $35M.

Please verify that $35 million is correct?

The standard is $15 million and it has been corrected.

Question 65:

Section K.2, Page 67 - Assuming all U.S. subcontractors are listed on the SAM system would non-US subcontractor firms have to file a section K?

Section L

Question 66:

Section L.5, Page 79 - “USAID’s preference is that each technical and each cost proposal be submitted as a single email attachment, e.g. that you consolidate the various parts of a technical proposal into a single document before sending it…Total email size cannot exceed 5 MB.”

Would USAID consider increasing the size per email from 5MB to 10MB to ensure that the both cost proposal and technical proposal can be submitted in single files?

The size per email is increased to 10MB.

Question 67:

Section L.5, Page 79-80 – The proposal submission instructions on page 79 state that the proposal can be submitted in MS Word, Adobe PDF or MS Excel (for the budget) file types.

However, the technical proposal section only allows for MS Word. Can PDF files be allowed here as well, particularly since the required A4 paper size is not a native format for most USAID offerors? This increases the risk that MS Word proposals will look differently (and possibly be incorrect page lengths) when opened on the offeror’s and USAID’s computers.

Question 68:

Section L.5, Page 80 - The RFP, states that offerors must comply with FAR Clause 52.204-7, System for Award Management and complete the annual representations and certifications electronically via the Online Representations and Certifications and other Statements of Offerors website at via the System for Award Management, www.sam.gov. Would USAID confirm if SAM registration is required for the SUBs as well?

If they do not fall under an exception, then yes.

Question 69:

Section L.6, Page 80 - Section L.6 states that charts and graphs can be 10-point font. Does this also apply to tables included in the technical proposal?

Question 70:

Section L.6, Page 80 - Can USAID confirm if full page diagrams may be exclusive of the 40 page limit for the Technical Proposal and/or place in an annex?

No.

Question 71:

Section L.6, Page 80 - Performance monitoring plan. Is one required for submission with the proposal?

Please see Section L.6.3 of the RFP.

Question 72:

Section L.6, Pages 80-81 - To present the remainder of the specialized technical team beyond the 12 positions listed in F.7, may bidders include a staffing matrix/plan and CVs annex outside of the 40-page limitation?

Question 73:

Section L.7, Page 81 - No required paper size is given for the budget and budget narrative.

Will either A4 or Letter sized paper be acceptable for this volume?

Question 74:

Section L.7, Page 81 - Would USAID please clarify if the budget narrative is required to be submitted for the SUBs as well? If so, would USAID clarify if it is only required for major SUBs or all SUBs?

The budget narrative is required for the Prime and major Subs.

Question 75:

Section L.7, Staffing and Management Plan, Page 81 - Could USAID please clarify the following sentence: (e.g. the methodology the Offeror intends to use when staffing the assessments). Which assessments is USAID referring to?

The section inside the parenthesis (e.g. the methodology the Offeror intends to use when staffing the assessments) was deleted from consideration.

Question 76:

Section L.7(b), Page 81-82 - Could USAID please provide offerors with the most recent FSN salary scale?

Would you provide a Local Compensation Plan or other guidance for…