RFP_SOL-121-17-000007.pdf

Competitive Economy Program (CEP)

SOL-121-17-000007

Request for Proposals (RFP) No.: SOL-121-17-000007 Issue Date: 3/13/2017 Questions Due: 3/23/2017, 16:00 Kyiv local time Pre-Proposal Conference: 3/27/2017, 09:30 Kyiv local time Closing Date: 4/25/2017, 16:00 Kyiv local time

Subject: RFP No. SOL-121-17-000007

Competitive Economy Program (CEP) (formerly Trade and Competitiveness (TAC) Activity)

To All Prospective Offerors:

The United States Government, represented by the U.S. Agency for International Development (USAID) through its Mission in Ukraine (USAID/Ukraine), is soliciting proposals from qualified organizations interested in providing the services described in the attached solicitation. USAID/Ukraine anticipates awarding one cost plus fixed fee term type contract with a period of performance of five (5) years. In order to understand the magnitude of USAID’s requirement, the Government estimates 30,979 professional technical staff person days level of effort (this is an estimate only). This requirement is subject to the availability of funds. The principal geographic code for this contract is 937. The North American Industry Classification System (NAICS) code for this acquisition is 541990. The small business size standard is $15 million.

This procurement will be conducted through a full and open competition process under which any type of organization is eligible to compete. The procedures are set forth in the Federal Acquisition Regulation (FAR) Part 15.

Only electronic proposals will be accepted. Proposals must be sent to mcapobianco@usaid.gov and eparinova@usaid.gov. Detailed requirements for Offerors’ proposals are outlined in Section L of this solicitation. Proposals must be signed by an official who is authorized to bind the organization and are to be submitted to USAID no later than the closing date and time stated above.

Any questions regarding this solicitation must be submitted in writing via email to Ms. Elena Parinova at eparinova@usaid.gov by the date and time specified above.

Pre-Proposal Conference

USAID will hold a pre-proposal conference to discuss the process and answer questions. The pre-proposal conference will be held on March 27, 2017 at 09:30 Kyiv local time in Kyiv, Ukraine at the following address: 1 Naberezhno-Khreshchatytska Street, Kyiv, Ukraine (Fairmont Grand Hotel Kyiv). It is recommended to arrive at least 15-30 minutes before the beginning of the event.

Information from the Pre-Proposal Conference will be posted on https://www.fbo.gov/ as an amendment to RFP No. SOL-121-17-000007.

mailto:mcapobianco@usaid.gov mailto:eparinova@usaid.gov mailto:eparinova@usaid.gov https://www.fbo.gov/

This solicitation, amendments to this solicitation, and announcement of contract award will be made available through the government point of entry at https://www.fbo.gov/ . It is the Offeror’s responsibility to check this site periodically for official updates to this solicitation.

Issuance of this solicitation and the submittal of a proposal do not constitute a commitment on the part of the U.S. Government nor USAID to make an award; neither does it constitute an obligation for any costs incurred in the preparation and submission of a proposal.

Thank you for your interest in working with USAID/Ukraine.

Sincerely, /s/

Michael Capobianco Regional Contracting Officer USAID/Kosovo https://www.fbo.gov/

1. THIS CONTRACT IS A RATED ORDER RATING PAGE OF PAGES

UNDER DPAS (15 CFR 700)

2. CONTRACT NUMBER 3. SOLICITATION NUMBER 4. TYPE OF SOLICITATION 5. DATE ISSUED 6. REQUISITION/PURCHASE NUMBER

SEALED BID (IFB)

NEGOTIATED (RFP)

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

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

9. Sealed offers in original and _____________________________ 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 depository located in until local time _______________________ (Hour) (Date)

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.

A. NAME B. TELEPHONE (NO COLLECT CALLS) C. E-MAIL ADDRESS

AREA CODE NUMBER EXT.

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

PART I - THE SCHEDULE PART II - CONTRACT CLAUSES

A SOLICITATION/CONTRACT FORM I CONTRACT CLAUSES

B SUPPLIES OR SERVICES AND PRICES/COSTS PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.

C DESCRIPTION/SPECS./WORK STATEMENT J LIST OF ATTACHMENTS

D PACKAGING AND MARKING PART IV - REPRESENTATIONS AND INSTRUCTIONS

E INSPECTION AND ACCEPTANCE

F DELIVERIES OR PERFORMANCE

G CONTRACT ADMINISTRATION DATA L INSTR., CONDS., AND NOTICES TO OFFERORS

H SPECIAL CONTRACT REQUIREMENTS M EVALUATION FACOTRRS FOR AWARD

K REPRESENTATIONS, CERTIFICATIONS AND OTHER

STATEMENTS OF OFFERORS

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

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

13. DISCOUNT FOR PROMPT PAYMENT 10 CALENDAR DAYS (%) 20 CALENDAR DAYS (%) 30 CALENDAR DAYS (%) CALENDAR DAYS (%) (See Section I, Clause No. 52-232-8)

14. ACKNOWLEDGEMENT OF AMENDMENTS AMENDMENT NO. DATE AMENDMENT NO. DATE

(The offeror acknowledges receipt of amendments to the SOLICITATION for offerors and related documents numbered and dated:

CODE FACILITY 16. NAME AND TITLE OF PERSON AUTHORIZED TO SIGN OFFER 15A. NAME AND

ADDRESS OF

OFFEROR

(Type or print)

15B. TELEPHONE NUMBER 17. SIGNATURE 18. OFFER DATE

AREA CODE NUMBER EXT. 15C. CHECK IF REMITTANCE ADDRESS IS DIFFERENT FROM

ABOVE - ENTER SUCH ADDRESS IN SCHEDULE

19. ACCEPTED AS TO ITEMS NUMBERED 20. AMOUNT 21. ACCOUNTING AND APPROPRIATION

22. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION: 23. SUBMIT INVOICES TO ADDRESS SHOWN IN ITEM (4 copies unless otherwise specified)

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

24. ADMINISTERED BY (If other than Item 7) 25. PAYMENT WILL BE MADE BY CODE CODE

26. NAME OF CONTRACTING OFFICER (Type or print)

Michael Capobianco Contracting Officer

27. UNITED STATES OF AMERICA 28. AWARD DATE

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

(Signature of Contracting Officer)

(REV. 9-97)

10. FOR INFORMATION CALL:

11. TABLE OF CONTENTS

STANDARD FORM 33

SOLICITATION, OFFER AND AWARD N/A

SOLICITATION

OFFER (Must be fully completed by Offeror)

AWARD (To be completed by Government)

X

3/13/2017 REQ-121-17-000013

USAID/Ukraine/Regional Contract Office Department of State 5850 Kyiv Pl.

Washington D.C. 20521-5850

See Section L of the RFP

See Section L

04:00PM(Kyiv LT) 4/25/2017

Ms. Elena Parinova Acquisition & Assistance Specialist +380-44 521-5438 eparinova@usaid.gov

See Attached Table of Contents

X 3

X 8-10

X 11-26

X 27

X 28

X 29-40

X 41-44

X 45-68

X 69-90

X 91

X 92-103

X 104-113

X 114-117

USAID/Ukraine/Regional Contract Office

USAID/Ukraine/Office of Financial Management

TABLE OF CONTENTS

PART I – THE SCHEDULE

SECTION B – SERVICES AND PRICE/COSTS

B.1 PURPOSE

B.2 CONTRACT TYPE AND CONTRACT SERVICES

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

B.4 CONTRACT BUDGET AND CEILINGS

B.5 PAYMENT OF FIXED FEE

B.6 COST REIMBURSABLE

B.7 INDIRECT COSTS

B.8 ADVANCE UNDERSTANDING ON CEILING INDIRECT COST RATES AND

FINAL REIMBURSEMENT FOR INDIRECT COSTS

SECTION C – DESCRIPTION / SPECIFICATIONS / STATEMENT OF WORK

C.1 PURPOSE

C.2 BACKGROUND AND PROBLEM STATEMENT

C.3 GUIDING PRINCIPLES

C.4 ACTIVITY COMPONENTS

C.5 GENDER ANALYSIS

C.6 MANDATORY FACTORS

C.7 MANAGEMENT OF GRANTS UNDER CONTRACT

SECTION D – BRANDING AND MARKING

D.1 MARKING AND BRANDING STRATEGY

D.2 AIDAR 752.7009 MARKING (JAN 1993)

SECTION E – INSPECTION AND ACCEPTANCE

E.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE 28

E.2 INSPECTION AND ACCEPTANCE

SECTION F – DELIVERIES OR PERFORMANCE

F.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE 29

F.2 PERIOD OF PERFORMANCE

F.3 PLACE OF PERFORMANCE

F.4 PERFORMANCE STANDARDS

F.5 PROFESSIONAL TECHNICAL LEVEL OF EFFORT

F.6 REPORTS AND DELIVERABLES

F.6(a) ANNUAL IMPLEMENTATION PLANS (WORK PLAN OR AIP) F.6(b) MONITORING, EVALUATION AND LEARNING (MEL) PLAN F.6(c) QUARTERLY PROGRESS REPORTS F.6(d) QUARTERLY FINANCIAL REPORTS F.6(e) MONTHLY LOE REPORT F.6(f) GRANTS UNDER CONTRACT MANUAL F.6(g) DEMOBILIZATION PLAN F.6(h) FINAL REPORT

F.7 KEY PERSONNEL AND OTHER ESSENTIAL PROJECT STAFF

SECTION G – CONTRACT ADMINISTRATION DATA

G.1 CONTRACTING OFFICER’S AUTHORITY

G.2 AIDAR 752.7003 DOCUMENTATION FOR PAYMENT (NOV 1998)

G.3 CONTRACTING OFFICER’S REPRESENTATIVE (COR)

G.4 PAYING OFFICE

G.5 ACCOUNTING AND APPROPRIATION DATA

G.6 TECHNICAL DIRECTIONS/RELATIONSHIP WITH USAID

G.7 CONTRACTOR’S PRIMARY POINT OF CONTACT

SECTION H – SPECIAL CONTRACT REQUIREMENTS

H.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE 45

H.2 AIDAR 752.225-70 SOURCE AND NATIONALITY REQUIREMENTS (FEB

2012) 45

H.3 AIDAR 752.229-71 REPORTING OF FOREIGN TAXES (JULY 2007)

H.4 ADS 302.3.5.19 USAID-FINANCED THIRD-PARTY WEB SITES (AUG 2013)

H.5 ADS 302.3.5.22 SUBMISSION OF DATASETS TO THE DEVELOPMENT

DATA LIBRARY (DDL) (OCT 2014)

H.6 AIDAR 752.7004 EMERGENCY LOCATOR INFORMATION (JUL 1997)

H.7 AIDAR 752.7007 PERSONNEL COMPENSATION (JULY 2007)

H.8 ADDITIONAL REQUIREMENTS FOR PERSONNEL COMPENSATION

H.9 AIDAR 752.7031 LEAVE AND HOLIDAYS (OCT 1989)

H.10 752.228-70 MEDICAL EVACUATION (MEDEVAC) SERVICES (JUL 2007) .. 52

H.11 AIDAR 752.222-70 USAID DISABILITY POLICY (DEC 2004)

H.12 AUTHORIZED GEOGRAPHIC CODE

H.13 EXECUTIVE ORDERS ON TERRORISM FINANCING

H.14 NONEXPENDABLE PROPERTY PURCHASES AND INFORMATION

TECHNOLOGY RESOURCES

H.15 GOVERNMENT FURNISHED FACILITIES OR PROPERTY

H.16 FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL

CONFERENCES

H.17 LOGISTICAL SUPPORT

H.18 LANGUAGE REQUIREMENTS

H.19 AIDAR 752.7032 INTERNATIONAL TRAVEL APPROVAL AND

NOTIFICATION REQUIREMENTS (APR 2014)

H.20 FRAUD REPORTING

H.21 ENVIRONMENTAL COMPLIANCE

H.22 DISCLOSURE OF INFORMATION

H.23 FACILITIES USED FOR RELIGIOUS ACTIVITIES

H.24 GRANTS UNDER CONTRACT

H.25 ELECTRONIC PAYMENTS SYSTEM

H.26 DBA INSURANCE

H.27 AIDAR 752.222-71 NONDISCRIMINATION (JUNE 2012)

H.28 CLOUD COMPUTING (MAY 2016)

H.29 752.204-70 PARTNER VETTING PRE-AWARD REQUIREMENTS (FEB

2012) 67

PART II – CONTRACT CLAUSES

SECTION I

I.1 FAR 52.252-2 CLAUSES INCORPORATED BY REFERENCE (FEB 1998)

I.2 AIDAR 752.252-2 AIDAR CLAUSES INCORPORATED BY REFERENCE (MAR

2015)

I.3 FAR 52.203-13 CONTRACTOR CODE OF BUSINESS ETHICS AND CONDUCT

(OCT 2015)

I.4 FAR 52.203-99 PROHIBITION ON CONTRACTING WITH ENTITIES THAT

REQUIRE CERTAIN INTERNAL CONFIDENTIALITY AGREEMENTS (APR 2015) ... 75

I.5 FAR 52.204-1 APPROVAL OF CONTRACT (DEC 1989)

I.6 FAR 52.217-2 CANCELLATION UNDER MULTIYEAR CONTRACTS (OCT

1997)

I.7 FAR 52.222-50 COMBATING TRAFFICKING IN PERSONS (MAR 2015)

I.8 FAR 52.227-14 RIGHTS IN DATA – GENERAL (MAY 2014)

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

1990)

I.10 FAR 52.247-67 SUBMISSION OF TRANSPORTATION DOCUMENTS FOR

AUDIT (FEB 2006)

I.11 AIDAR 752.209-71 ORGANIZATIONAL CONFLICTS OF INTEREST

DISCOVERED AFTER AWARD (JUN 1993)

I.12 AIDAR 752.242-70 PERIODIC PROGRESS REPORTS (OCT 2007)

I.13 AIDAR 752.7025 APPROVALS (APR 1984)

I.14 AIDAR 752.7036 USAID IMPLEMENTING PARTNER NOTICES (IPN)

PORTAL FOR ACQUISITION (JUL 2014)

I.15 AIDAR 752.7101 VOLUNTARY POPULATION PLANNING ACTIVITIES

(JUNE 2008)

I.16 AIDAR 752.7037 CHILD SAFEGUARDING STANDARDS (AUG 2016)

PART III – LIST OF DOCUMENTS, EXHIBITS, AND OTHER ATTACHMENTS .. 91

SECTION J – LIST OF ATTACHMENTS

PART IV – REPRESENTATIONS AND INSTRUCTIONS

SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER

STATEMENTS OF OFFERORS

K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY

REFERENCE

K.2 FAR 52.204-8 ANNUAL REPRESENTATIONS AND CERTIFICATIONS (JAN

2017) 92

K.3 FAR 52.209-5 CERTIFICATION REGARDING RESPONSIBILITY MATTERS

(OCT 2015)

K.4 FAR 52.209-7 INFORMATION REGARDING RESPONSIBILITY MATTERS

(JUL 2013)

K.5 FAR 52.209-11 REPRESENTATION BY CORPORATIONS REGARDING

DELINQUENT TAX LIABILITY OR A FELONY CONVICTION UNDER ANY FEDERAL

LAW (FEB 2016)

K.6 FAR 52.222-22 PREVIOUS CONTRACTS AND COMPLIANCE REPORTS (FEB

1999) 99

K.7 FAR 52.222-25 AFFIRMATIVE ACTION COMPLIANCE (APR 1984)

K.8 FAR 52.230-1 COST ACCOUNTING STANDARDS NOTICES AND

CERTIFICATION (OCT 2015)

K.9 FAR 52.230-7 PROPOSAL DISCLOSURE—COST ACCOUNTING PRACTICE

CHANGES (APR 2005)

K.10 FAR 52.203-98 PROHIBITION ON CONTRACTING WITH ENTITIES THAT

REQUIRE CERTAIN INTERNAL CONFIDENTIALITY AGREEMENTS-

REPRESENTATION (APR 2015)

K.11 INSURANCE—IMMUNITY FROM TORT LIABILITY

K.12 AUTHORIZED NEGOTIATORS

K.13 SIGNATURE

SECTION L – INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS 104

L.1 FAR 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY

REFERENCE (FEB 1998)

L.2 FAR 52.216-1 TYPE OF CONTRACT (APR 1984)

L.3 FAR 52.233-2 SERVICE OF PROTEST (SEP 2006)

L.4 GENERAL INSTRUCTIONS TO OFFERORS

L.5 PROPOSAL SUBMISSION

L.6 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL

L.7 INSTRUCTIONS FOR THE PREPARATION OF THE COST PROPOSAL

SECTION M – EVALUATION FACTORS FOR AWARD

M.1 GENERAL INFORMATION

M.2 TECHNICAL EVALUATION CRITERIA

M.3 EVALUATION OF PAST PERFORMANCE

M.4 COST PROPOSAL EVALUATION

M.5 DETERMINATION OF COMPETITIVE RANGE

M.6 SOURCE SELECTION

PART I – THE SCHEDULE

SECTION B – SERVICES AND PRICE/COSTS

B.1 PURPOSE

The purpose of this contract is to provide technical assistance and other services as described in detail in Section C for the implementation of USAID/Ukraine’s activity entitled “Competitive Economy Program (CEP)”.

B.2 CONTRACT TYPE AND CONTRACT SERVICES

This is a cost-plus-fixed-fee (CPFF) term-type contract. For the consideration set forth below, the Contractor must provide the level of effort described in Section F.5 to accomplish the goals and objectives set forth in Section C.

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

a) The estimated cost for the performance of the work required hereunder, exclusive of fixed fee, is $______. The fixed fee, if any, for the contract period is $_________. The total estimated cost plus fixed fee is $_________.

b) Within the estimated cost plus fixed fee (if any) specified in paragraph (a) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the Contractor (and payment of fee, if any) for performance of the contract period hereunder is $_____. The Contractor must not exceed the aforementioned obligated amount.

c) Funds obligated hereunder are anticipated to be sufficient through _______. Funding for this contract will be on an incremental basis, subject to the availability of funds.

B.4 CONTRACT BUDGET AND CEILINGS

a) The contract budget found herein is based on the Contractor’s original proposal and/or final proposal revision, which was accepted by USAID through award of this contract.

b) The following itemized budget sets forth the estimates for individual line items of cost:

Cost Category Amount Direct Costs TBD Grants Under Contract $19,550,000 Indirect Costs TBD Fixed Fee TBD Total Cost Plus Fixed Fee TBD

B.5 PAYMENT OF FIXED FEE

Subject to FAR 52.216-8, Fixed Fee, if applicable, payment of fixed fee shall be allocated based upon the proportion of the level of effort (LOE) specified in Section F.5 that was provided by the Contractor in the period covered by the invoice. Normally, the Contractor will be paid the portion of the fee specified that corresponds to the proportion of LOE delivered by the Contractor during the period covered by the invoice. In the event that the Contractor does not provide the total LOE stipulated in Section F.5, the total amount of fixed fee will be reduced in similar proportion.

B.6 COST REIMBURSABLE

The U.S. dollar costs reimbursable must be limited to those costs determined to be necessary, allocable, allowable and reasonable. Payment must be made in accordance with FAR 52.216- 7, Allowable Cost and Payment, FAR 52.216-8, Fixed Fee, if applicable, and AIDAR 752.7003, Documentation for Payment.

B.7 INDIRECT COSTS

The contract clause entitled “Allowable Cost and Payment (DEC 2002)”, FAR 52.216-7, specifies that the indirect cost rates must be established for each of the Contractor’s accounting periods that apply to this contract. Pending establishment of revised provisional or final indirect rates, allowable indirect costs must be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases:

Description Rate Base Type Period

TBD 1/ 1/ 1/

1/Base of Application:

Type of Rate: Predetermined Period:

For each of the major subcontractor(s)*

Description Rate Base Type Period

TBD 1/ 1/ 1/

1/Base of Application:

Type of Rate: Predetermined Period:

*“Major Subcontractors” are those subcontractors whose proposed cost exceeds 10% of the total estimated contract cost.

B.8 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 2017 2018 2019 2020 2021 2022

TBD % % % % % %

For each of the major subcontractor(s)* Description 2017 2018 2019 2020 2021 2022

TBD % % % % % %

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.

[END OF SECTION B]

SECTION C – DESCRIPTION / SPECIFICATIONS / STATEMENT OF WORK

C.1 PURPOSE

The purpose of the Competitive Economy Program (CEP) is to encourage startup businesses and small and medium sized enterprises (SMEs)1, increase domestic market competition, and support the competitiveness of Ukrainian firms in international markets. To achieve this purpose, CEP will be comprised of the following five component activity areas that fall into two distinct categories – those that promote the competitiveness of Ukraine’s economy and its firms, and those that facilitate trade.

To increase the competitiveness of Ukraine’s firms and promote a competitive economy, the Contractor implementing CEP must:

• Implement activities that improve the business climate, including promoting increased competition in domestic markets;

• Assist new industries and SMEs to develop and compete in markets abroad; and

• Develop an export promotion capacity in the Government of Ukraine (GOU).

To encourage open and efficient trade, the contractor implementing CEP must:

• Enhance GOU participation in the World Trade Organization (WTO) and assist the GOU to achieve compliance with WTO and European Union (EU)/Ukraine Deep and Comprehensive Free Trade Area (DCFTA) requirements; and

• Help lower the cost of trading across Ukraine’s borders.

C.2 BACKGROUND AND PROBLEM STATEMENT

Political developments since the Maidan “Revolution of Dignity” give Ukraine its best opportunity since independence to create an open and competitive economy that can sustain growth over time, weather external shocks, and provide economic opportunities to all of its people. The Poroshenko government’s commitment to integrate with the EU creates a path for Ukraine to make long-delayed policy and institutional changes that will reduce corruption, limit the concentration of economic power, and increase Ukraine’s political independence in the region.

The success of the government’s reform program will depend on how well it facilitates the transition of Ukraine’s economy from one dominated by large firms with declining prospects to a broad-based economy in which productivity grows across the board, companies compete domestically, and small and medium-sized enterprises - as well as new industries - emerge to compete in new markets abroad. This transition will require:

• A functioning financial sector to finance the unprecedented volume of firm-level retooling, new investments, and business start-ups;

• A reliable and consistent supply of energy at a competitive price;

• An enabling environment for business that encourages start-ups and investments in upgraded equipment, improved quality control systems and trained staff;

• Support for the expansion of industries that have clear prospects for increasing growth and jobs; and

1 To be consistent with GOU practice, the Contractor will use the European Union definition of SME see http://ec.europa.eu/growth/smes/business-friendly-environment/sme-definition/index_en.htm

• Institutions to support exporters and facilitate trade, including export promotion capability, the capacity to enforce fair trade practices through trade agreements, and the ability to move goods efficiently across borders to new markets.

C.3 GUIDING PRINCIPLES

The Contractor must ensure the following guiding principles are integrated into its implementation approach:

Flexibility in implementation. The fluid political environment in Ukraine calls for flexibility in implementation. The Contractor may need to shift emphasis between and within components over time in order to concentrate resources where the opportunities to make progress are greatest, based on consultations with USAID.

Donor and host-country coordination. The flood of donor support for Ukraine after Maidan and the appointment of a large number of reform-oriented leaders in government ministries means there are many simultaneous reform initiatives underway and pending with related objectives. The Contractor’s close coordination with host country counterparts and with other donors is particularly important for CEP to complement other efforts and produce the greatest benefit for Ukraine.

Public information and outreach. It is important for the Contractor’s efforts under CEP to help strengthen popular support for economic and political reforms in Ukraine through effective public outreach. CEP’s outreach efforts must be coordinated with, and can leverage, USAID public outreach programs.

Education for future business leaders. The lack of functional linkages between Ukrainian universities, the private sector, and the public sector reduce Ukraine’s competitiveness. The new generation of business people must be given an opportunity to acquire knowledge and skills that are relevant to modern business practices and compliant with international requirements. The Contractor’s efforts under CEP must promote advanced education in the subject areas to be addressed under the contract’s components.

Conflict in eastern Ukraine. Although CEP is not specifically directed to address the challenges of Ukraine’s east, helping businesses and people in eastern Ukraine to participate in the economic growth of the country as a whole is important to Ukraine’s future as a unified state. Respecting the sensitivities of Ukrainians who have been affected by the conflict is also important to reduce communal tensions and increase a shared sense of national purpose.

Hence, the Contractor’s efforts under CEP must give preference to activities that could also benefit eastern Ukraine. (see Attachment J.5, Part 3).

EU integration. Steady progress toward economic integration with the EU is Ukraine’s best guarantee of continuing progress toward economic and political reform at home.

C.4 ACTIVITY COMPONENTS

Firm competitiveness and a competitive economy

The ultimate test of Ukraine’s economic transition will be whether firms emerge that compete with each other domestically, and successfully compete in new markets abroad.

C.4.a. Component 1: A better business-enabling environment

Description: CEP, implemented by the Contractor, must promote an enabling environment that encourages firms to invest and grow. The Contractor must advance business climate reform agenda through mobilization of local expertise to identify legal, regulatory and administrative barriers; to provide technical assistance to support the implementation of needed reforms; and, to guide the advocacy by business and industry associations and other non-governmental organizations (NGOs) that seek to improve Ukraine’s business enabling environment. As the activity aims to improve the World Bank’s Doing Business indicators in Ukraine, the Contractor must work closely with donors, including the World Bank itself, to do

so. The Contractor must utilize a grant under contract (GUC) mechanism to support the local NGOs that have recognized technical proficiency and advocacy expertise. The budget for GUCs under this component must not exceed $10,000,000 over the life of the contract.

Additionally, the Contractor must advance sound competition policy and institutions through providing technical assistance and training to competition policy-related government agencies and private sector both centrally and locally.

The Contractor must develop a country-specific survey, index and annual ranking of the business climate in the 24 principal municipalities of Ukraine. The purpose is to improve the business climate by identifying good practices at the municipal level, creating a well-publicized competition to incentivize municipal leaders to adopt them, facilitating the sharing of lessons learned between municipalities, and providing technical support to their efforts to improve. The Contractor must facilitate a national and local response to the business climate issues and solutions that emerge from the municipal competition (see Attachment J.5, Part 4 for background information).

The model for the Municipal Competitiveness Index is an approach developed by the Asia Foundation and applied in Southeast and South Asia.2 The Contractor must not be rigidly bound to any specific aspect of this methodology but will adhere to its core principles the most important of which are that 1) the index will measure those aspects of the business climate that Ukrainian SMEs identify as their primary problems, 2) municipalities are not penalized for poor starting conditions, and 3) municipalities’ scores will be standardized around best practice in Ukraine.

The Contractor must develop the index and methodology during the first 90 days of implementation. The Contractor must:

• Select 8-10 indicators that reflect the priority concerns of SMEs in Ukraine and which municipalities have a meaningful capacity to affect;

• Combine these into a single index, assigning weights to indicators in proportion to their importance to firms;

• Develop a methodology to survey firms annually by municipality that is statistically sound and implementable with local resources;

• Conduct the survey annually, analyze findings, rank municipalities and widely publicize the results;

• Provide technical assistance to help municipalities improve their standing by adopting best practice and implementing additional reforms; and

• Monitor the impact of the index in a) catalyzing reforms at the municipal and national levels, b) affecting firms’ perceptions of the business climate and, c) to the extent discernable – improving firm performance.

2 Malesky, Edmund. (2008). Catalyzing Change: A Peak Under the Engine Hood: The Methodology of the Asia Foundation’s Subnational Economic Governance Indices. The Asia Foundation. San Francisco, California.

The Contractor must publicize the results of the survey in ways that garner national attention and maximize the incentives for municipal leaders to make business climate improvements.

The Contractor must develop and implement the Municipal Competitiveness Index in partnership with the Association of Ukrainian Cities and working closely with a local academic institution or consulting firm that has the technical expertise to implement a survey of this complexity and that could, if desired at the time, continue to implement the survey when the contract is finished.

Expected results: The Contractor’s efforts under CEP will be one of many factors affecting the quality of Ukraine’s business climate during the life of the contract and it is unlikely that overall improvements in the business climate will be directly attributable to the Contractor’s work. The Contractor must use a “bifocal” approach that monitors both Ukraine’s overall progress and the direct expected results of the Contractor’s activities that contribute to it.

Higher-level indicators for this component must include Ukraine’s scores on the World Bank/IFC’s Doing Business survey, the Pillar 1 (Institutions) component of the World Economic Forum’s Global Competitiveness Index, and the regulatory quality and rule of law components of the World Bank Institute Governance Indicators. The Contractor will periodically assess the contribution CEP is making to progress at this higher level and recommend ways to increase it. Expected results are provided below.

Expected Results Indicators USAID will use to measure progress toward achieving Expected Results

SME-friendly business laws and regulations Number of laws and regulations introduced/passed with private sector input

Municipalities identify and adopt business climate best practice

Number of municipalities that adopt best practice with the assistance of the Contractor

Number of municipalities that adopt best practice on their own

Convergence in Municipal Index scores toward top ranking

Municipal business climates improve Increased ratio of formal to informal firms in assisted municipalities (the Contractor may propose one or more alternative indicators in the M&E Plan)

C.4.b. Component 2: Support for emerging industries

Description: The Contractor must support the development of three new or emerging industries in Ukraine that have the potential to grow rapidly, succeed in export markets, generate a significant amount of investment and a number of new skilled jobs (see Attachment J.5, Part 4 for background information).

The Contractor must conduct an analysis and propose the initial two industries for support to USAID for approval during the first 100 days of implementation. The Contractor’s selection of the two initial industries must be supported by rigorous quantitative analysis. Selection criteria must include:

• The potential to grow rapidly;

• The likelihood that Ukrainian producers will succeed in selling to target markets;

• The industries’ potential for generating jobs;

• Enabling legal and regulatory framework in place; and

• Clear evidence that Ukrainian and/or foreign investors will risk their own funds by investing in the industry.

Analysts have used various methods to identify Ukrainian industries with growth potential.

Information and communications technology (ICT) (both outsourcing and original content) and agricultural processing3 are frequently mentioned. Others cover a wide spectrum – from fashion design to the manufacture of automobile parts. USAID does not have a pre-determined list. The Contractor must consider those mentioned here and all others that meet the selection criteria, goods and service industries alike.

The Contractor must use a competitiveness approach to support the development of selected industries. This includes assessing the global market, identifying target markets for Ukraine,4 benchmarking Ukraine’s current and future competitive position against other producers serving those markets, identifying the steps Ukrainian producers need to take to compete successfully, and identifying policy, infrastructure and other constraints that government must address for the industry to succeed. The Contractor may consider applying elements of the value chain approach to implement the industry competitiveness activities, where feasible and where that would increase the likelihood of success and will incorporate value chain best practices if and when appropriate. The Contractor may identify “infrastructure” constraints, but no construction can be performed under this contract.

The Contractor must develop this information and present it for consideration by the full range of industry stakeholders. This must be done at a 1-2 day conference carefully designed to draw the attention and interest of key players and organized to facilitate the collaborative development of action plans for follow up. The number and type of stakeholders will vary by industry and over time but may include investors, producers, suppliers of goods and service inputs to the industry, transport companies, foreign buyers, financial intermediaries, local consulting firms, academic institutions, government agencies with related functions and – as appropriate – legislators, the media, NGOs and donor organizations.

The Contractor must utilize a GUC mechanism (or small subcontracts) to target private sector firms prioritized by their potential to directly or indirectly move the industry forward, and must also provide direct assistance to support implementation of follow up actions. The budget for GUCs under this component must not exceed $8,500,000 over the life of the contract. All GUCs must include cost share of some type. GUCs, for example, could support:

• Pioneering investments in new processes or products;

• Business startups that provide a service essential for industry success;

• The development of standards, testing services, and/or other aspects of quality control systems;

• Innovations in staff training;

• Entry into new geographic markets;

• First-time or first-mover participation in trade shows and exhibitions;

• Strengthened ability to meet product and service standards;

• Development of innovative links between buyers and producers or producers and their suppliers to transfer technology and skills;

3 USAID’s new Agriculture and Rural Development Support (ARDS) Program in Ukraine supports small and medium-sized farm producers and processors of fruit, vegetables and dairy products. CEP will not work at the farm level but could work with agricultural processors for export – possibly in collaboration with ARDS – if some aspect of agricultural processing that meets CEP’s selection criteria were chosen for support.

4 Although the DCFTA has spurred much discussion about potential opportunities for Ukraine in EU markets, the difficulty of meeting EU product and delivery standards means the less demanding markets such as Turkey, the Middle East and China may be more important in the short run.

• The development of industry associations; and

• Increased capacity of local consulting firms to serve the industry.

The Contractor’s direct assistance must be provided primarily to government entities to support policy reform, regulatory and/or administrative improvements, and capacity building that directly impacts industry growth. Direct assistance may be provided to private sector participants when this would be more effective than a GUC.

The Contractor must reconvene industry stakeholders periodically to review progress, assess changing trends in regional or global markets, update the benchmarking analysis, and facilitate the development of new action plans for follow up.

During year two of the contract, the Contractor must propose a third industry for support and will launch a competitiveness program for it utilizing the same requirements as the first two industries. USAID may substitute or drop an industry if results are poor, as circumstances change, and/or as new opportunities emerge.

Expected results: As with Component 1, the Contractor must employ a bifocal approach to monitoring Ukraine’s progress and the Contractor’s results. At a higher level, this will include overall growth in non-traditional Ukrainian exports to non-traditional markets, and Ukraine’s score on the Herfindahl-Hirschman Index. The Contractor must periodically assess the contribution it is making to progress at this higher level and recommend ways to increase

it. Expected results are provided below.

Expected Results Indicators USAID will use to measure progress toward achieving Expected Results

Increased investment in selected industries

Value of net new investment in:

• New business startups

• Business expansions

Increased value of exports in selected industries

Overall net increase in the value of exports by the industry from:

• New business startups

• Business expansions

Increase in exports of assisted firms from:

• New business startups

Exports to a more diverse set of markets

Export concentration and diversification indices (UNCTAD Statistics)

Permanent jobs created in selected industries Net new jobs filled for at least 12 months in:

• New business startups

C.4.c. Component 3: An export promotion capability

Description: The Contractor must allocate no more than $145,000 to facilitate development by the GOU of an export promotion function focused on the needs of SMEs (see Attachment J.5, Part 4 for background information). The Contractor must undertake analytical and policy studies to assist the GOU to refine its approach to export promotion and will provide technical assistance (TA) and training to help develop its ability to implement export promotion effectively. The extremely limited budget resources of the GOU mean that a central focus of this work must be helping the GOU to set clear priorities, adopt cost-effective methods, and encourage outside parties with their own resources to undertake aspects of export promotion independently to the maximum extent possible. Studies could include, for example:

• The prospects and a plan for developing the capacity of industry associations (or other outside groups) to collect and disseminate market information to member firms;

• The potential for strengthening the ability of consulting firms and private consultants to advise Ukrainian companies on export development skills such as structuring export contracts and trade finance;

• How to tap publicly available trade data and analytical tools to build a market information and analysis capability at low cost;

• An action plan for developing online trade training programs to reach the maximum number of potential exporters across Ukraine;

• How to encourage links with foreign buyers that transfer knowledge and skills to Ukrainian producers for meeting export standards independent of government support;

• Integrating FDI promotion with export development for increased impact.

The Contractor must assist the GOU to develop the analytical tools and reporting formats to assess Ukraine’s progress toward diversifying its exports and its export markets and will help develop a system for the GOU to monitor the impact and cost-effectiveness of its export promotion efforts. The Contractor may extend assistance under this component to GOU efforts to rebuild its investment promotion capabilities when doing so would advance the GOU’s export promotion goals.

The Contractor must also finance up to $2,000,000 in export promotion marketing expenses incurred in the GOU’s export promotion program. These may include but will not be limited to trade fair participation, exporter and buyer missions, B2B events or connections, export forums, exporter competitions and awards, and market research. The Contractor must ensure that all activities that directly support an individual company are cost-shared by the recipient company.

Expected results: The results from this component will initially consist of milestones in the development of an institutionalized capability to promote exports. Once CEP has helped to develop tools for measuring the effectiveness and cost-effectiveness of the GOU’s export promotion efforts, they will become the principal measures of progress. Expected results are provided below.

Expected results Indicators to be used by USAID to track progress toward Expected Results

The GOU implements effective and cost-effective export promotion programs

An export promotion organization is officially established and staffed

Export readiness training is available to SMEs across Ukraine

Ukraine’s participation in export marketing activities such as inward and outward marketing tours, trade fairs, and B2B networking reflects best practice

Monitoring system in place for overall progress of Ukraine in diversifying exports and export markets

Monitoring system in place for assessing the effectiveness and cost-effectiveness of the GOU’s export promotion activities

Encouraging open and efficient trade

C.4.d. Component 4: WTO participation and compliance

Description: The Contractor must assist Ukraine to implement global and regional trade rules to facilitate its integration into the global trading system and its economic integration with the European Union (see Attachment J.5, Part 4 for background information). The Contractor must:

• Strengthen the ability of the Ministry of Economic Development and Trade’s (MEDT’s) Office of the Ukrainian Trade Representative (UTR) to understand and address regional and multilateral trade policy issues and both lead and coordinate Ukraine’s interaction with the WTO and regional trade and economic organizations;

this will include providing TA and training to support the MEDT’s participation in WTO fora on essential issues for Ukraine;

• Assist the GOU to institutionalize and strengthen inter-ministerial trade policy coordination under the UTR;

• Strengthen the GOU’s capacity to respond to issues related to Ukraine’s implementation of and compliance with its obligations and commitments under WTO agreements (e.g., Application of Sanitary and Phytosanitary Measures (SPS) and Technical Barriers to Trade (TBT) as well as the DCFTA with the European Union;

• Review policies, laws, and regulations that have a direct effect on trade and undertake capacity building or technical assistance work, as appropriate, to support the legal and regulatory changes necessary to implement Ukraine’s WTO obligations and regional integration priorities;

• Train and build capacity within Ukrainian trade-related ministries, the judiciary, and enforcement and regulatory agencies to improve the implementation/enforcement of existing laws and strengthen the legal framework in conjunction with economic reforms;

• Support the establishment and implementation of the economic governance aspects of Ukraine’s trade-related obligations consistent with international practice (transparency, accountability, fairness, etc.);

• Support the development of government and non-governmental institutions and build the capacity of officials in Ukrainian line ministries and agencies to fully understand and implement international trade and investment obligations in the practice of using and enforcing existing laws; support the expansion of these concepts into future legislation, regulations, and administrative procedures related to trade and investment; and

• Build the capacity of non-governmental entities (e.g., think tanks, academia) to participate in a broad “community of practice” of trade policy stakeholders that shares knowledge on trade and economic issues and supports trade policymaking that is supported by informed policy dialog among constituencies.

The Contractor must refrain from accepting and undertaking any work in the area of WTO dispute settlement, including but not limited to making/guiding dispute settlement strategies, identifying/directing targets and coaching on specific, case-related strategies. General technical assistance and WTO capacity building of the government and private sector will not be affected by this restriction.

The Contractor must take all reasonable steps to ensure a seamless transition from trade support activities implemented under the Ukraine Trade Policy Program (UTPP) to those that will be implemented under CEP.

Expected results: The higher level objective of this component is to keep foreign markets open to Ukrainian goods and services. As with other components, the Contractor’s work under CEP is just one of a number of factors that will determine if this is accomplished. The Contractor will therefore track Ukraine’s overall progress through indicators such as the foreign market access component of the World Economic Forum’s Enabling Trade indicator while also monitoring Expected Results attributable to activities implemented through the Contract. Expected results are provided below.

Expected Results Indicators USAID will use to measure progress toward achieving Expected Results

The GOU participates effectively in WTO decision-making processes that most affect Ukraine’s interests

Number of WTO fora in which Ukraine officials participate

An effective inter-ministerial team led by the Office of the Ukrainian Trade Representative coordinates WTO issues on behalf of the

GOU.

Establishment of a formal inter-ministerial consultative process that engages stakeholders on a timely basis

Perceptions of government stakeholders on the transparency and fairness of the consultative process

Number of legal, regulatory, or institutional actions taken to improve implementation or compliance with WTO and other international trade and investment agreements

WTO and EU trade policy commitments and obligations fulfilled.

Number of legal and regulatory changes made in compliance with WTO and EU obligations and international standards.

An effective inter-ministerial team led by the Office of the Ukrainian Trade Representative participates in WTO and regional trade fora on behalf of the GOU.

Number of new requests, offers, revised offers, or other formal texts that are submitted by Ukraine as part of international trade talks

Non-governmental entities interact effectively with government on trade policy issues.

Number of interventions submitted to GOU as part of public/private dialog on international trade issues

C.4.e. Component 5: Faster and lower-cost trade across Ukraine’s borders

Description: The ultimate objective of this component is to reduce the time and cost associated with moving imports and exports across Ukraine’s borders (see additional background information in Attachment J.5, Part 4). The Contractor must assist the GOU to comprehensively implement the provisions of the Trade Facilitation Agreement (TFA), including “best effort” provisions of the Agreement such as implementing a WTO-compliant Single Window system. This component will not be implemented initially, but USAID anticipates that throughout the lifetime of this contract, the conditions are such that implementation may proceed.

The Contractor’s approach to assisting with implementation of the TFA must be guided by the progress made by predecessor efforts under the UTPP, and must be informed by USAID’s Comprehensive Approach to Trade Facilitation and Capacity Building. While the guide suggests that these groups are ideally implemented in sequential order, it admits overlap.

Ukraine has already begun a number of Customs and trade facilitation reforms, which will need to be taken into account. Nonetheless, overall, the Contractor must support Ukraine’s implementation of the “fundamentals” of the TFA (Sequences 1 and 2) first, and implement Sequence 3 and 4 activities on a pragmatic and demand-driven basis.

The Contractor must take into account Ukraine’s self-assessment of TFA needs and priorities and will prioritize those TFA provisions identified as “Category C” under the TFA’s special and differential treatment provisions. The Contractor must also provide assistance to the GOU for completing Category A and B provisions that have only been partly implemented.

Much of the Contractor’s work will be driven by counterpart expectations. The Contractor must also prioritize issues likely to have meaningful commercial impact so that Ukraine’s private sector can start reaping the benefits of better border management as soon as possible.

Interaction with exporters and importers worldwide suggests that the following areas draw the greatest interest of the business community and yield the greatest commercial value:

• Pre-Arrival Processing

• Valuation

• Risk Management

• Advance Rulings

• Authorized Economic Operators

The trade facilitation support described above will be primarily provided to government, the primary counterpart being MEDT. But private sector industry, including logistics planning and management, freight forwarding, transport operators, and customs brokerage industries, among others, also play critical roles in determining the effectiveness and efficiency of trade across Ukraine’s borders. Associations of members in these industries can become powerful forces for improving trade services to Ukrainian exporters and importers and advising government on trade policy issues. The Contractor must support the development of these industries and associations in several ways.

The Contractor must use technical assistance and GUCs (not to exceed $1,050,000 over the life of the contract) to:

• help business associations to improve the nature and quality of their interaction with government on trade facilitation measures;

• assist associations in trade-related industries expand their membership and provide trade-related services to members; and

• support pioneering investments by private firms that have the potential to significantly improve trade facilitation services e.g., new multimodal transfer facilities.

The Contractor must build on the Single Window initiative recently launched by the GOU helping develop a single entry point compliant with the TFA provisions for integrated operations of all border authorities. The Contractor must not make major investments in physical border infrastructure but assessment teams have identified a limited number of issues http://usaidprojectstarter.org/sites/default/files/resources/pdfs/A%20Comprehensive%20Approach%20to%20Trade%20Facilitation%20and%20Capacity%20Building.pdf at border crossings that would be relatively inexpensive to address and could dramatically improve performance.