SOL-121-17-000007_Pre-Proposal_Conference_TRANSCRIPT.pdf

Competitive Economy Program (CEP)

SOL-121-17-000007

Pre-Proposal Conference - - Transcript

USAID Competitive Economy Program (CEP)

Pre-Proposal Conference

Transcript

When: March 27, 2017 at 09:30 Kyiv local time

Where: Fairmont Grand Hotel Kyiv

1 Naberezhno-Khreshchatytska Street, Kyiv, Ukraine

Welcome and introduction by Michael Capobianco, Contracting Officer, Director, Regional Contracting Office, USAID/Kosovo

Mr. Capobianco notes that all questions and answers that are asked during the event will be posted at www.fbo.gov and that none of the questions or answers that are asked are inherently going to or will change the terms and conditions of the solicitation all of that will be done in a written amendment to the RFP itself.

Opening remarks by Susan Fritz, Mission Director, Regional USAID Mission to Ukraine, Belarus and Moldova

Ms. Fritz underlines that being flexible is critical in Ukraine’s fluent environment. Mission Director praises local partners and encourages reaching out to local partners and cooperating with them.

Economic Growth portfolio overview by Stephen Gonyea, Director, Office of Economic Growth, USAID/Ukraine

Mr. Gonyea mentions the strategies Office of Economic Growth operates under stressing that the economic stabilization and revitalization strategy is the strategy where this particular project will be operating under.

Michael Capobianco, Contracting Officer http://www.fbo.gov/

We do anticipate awarding one cost plus fixed fee term type contract for a period of performance of five years and we are asking you to submit a technical proposal and a cost proposal as to be weighted in the RFP. This is all general stuff that we normally do with regards to all of our requests for proposals that come out.

And then the last thing that I need to mention for everybody is that we are looking at some changes to this program. Mission Director mentioned flexibility and the need for flexibility. We are actually going to be asking you to be really flexible, almost immediately. We are looking at a drop in the LOE that we are going to order under this contract already, so we are going to be issuing an amendment at some point time in the future. We are going to be doing some changes to the Statement of Work and the requested LOE that we are going to be purchasing. Please do not worry, we will extend the closing date to make sure that offerors have enough time to adjust to the change and we organize their proposals accordingly.

CEP’s goal and objectives by Evgenia Malikova, Senior Project Management Specialist, Office of Economic Growth, USAID/Ukraine

Overview of the solicitation by Michael Capobianco, Contracting Officer, USAID/Kosovo (Sections B-M of the RFP)

• Sections L and M, instructions to offerors and evaluation criteria for award.

• Couple things I want to highlight: we are utilizing a cost plus fixed fee term for this contract.

It is different from a completion type contract. A completion type contract, which we utilize most of the time, is when we have an end state in mind, we know what we want to achieve and that's what we're paying you to achieve. Here, we do not have that end state. We want you to work in a general direction and expand LOE trying to achieve some of the outcomes that are listed in the statement of work. So, we are paying for the LOE. With that in mind, a lot of the questions that we have got written before the pre-proposal conference was: - “Can USAID provide a dollar range of the contract value?” In a completion type contract, yes we can, and in the LOE contract, no, we cannot. We are actually precluded from doing so by our internal policies, and the reason is because we are identifying the estimated level of effort that we are ordering, which should be enough to allow you, as the industry, to properly cost and price it out.

• Another question that we have got on Section B is with regards to indirect rates. It actually says in there that they were asking for indirect rates and we are going to put them in the contract for major subcontractors. The question we got was: “Can you take that out?” The answer is – yes, we will be taking that out. It mistakenly got in there. We are actually going to be taking that requirement out to protect the proprietary and corporate sensitive information of your major subcontractors, who we do not have privity of contract with.

• With regards to Section C, we are looking for flexibility. We are writing the current and future programs to be flexible and adaptable. We are not going very deep with regards to “HOW” we are asking our contractor to implement these. We are only providing overall objectives and expected outcomes and guiding principles. We are leaving it up to you and the COR to decide how the program is implemented.

• Language about the annual work plan is going into most RFPs is that the annual work plan is a deliverable. It is something that you develop in coordination with the COR. It defines exactly what interventions are going to be done during that year. It is a living document. It can change and it often does.

• Section D, Branding and marking Requirements.

Question: Is Branding and Marking Plan part of the proposal?

Answer: Mr. Capobianco: Initial proposals will not need to have a branding and marketing plan at this time. We want your time focused on the technical and the cost aspect and not that at this point.

• Section E INSPECTION AND ACCEPTANCE. Services, reports and other required deliverables or outputs shall take place at principal place of performance or at any other location where the services are performed.

• Section F. DELIVERIES OR PERFORMANCE is where deliverables and key personnel requirements are. It is supposed to be in harmony with Section C.

• Section G. CONTRACT ADMINISTRATION DATA. Describes CO’s authority, necessary documentation for payment, relationship with USAID.

• Section H. SPECIAL CONTRACT REQUIREMENTS is a catch for everything that did not fit anywhere else. Covers salaries and salary increases.

• Section H garners a lot of questions during the competitive process. One of the questions that we got on Section H, that we always get on Section H, is: You are limiting our salary raises for personnel. We are limiting annual salary increases in our RFP for all personnel to no more than three percent year-over-year without prior written contracting officer approval.

So, it is not that they are blanketly denied. It is that you have to get a prior written contract officer approval before you grant any salary raises.

• Now, I love to have the discussion with industry and our partners with regards to how do we recognize the good work of other folks who are performing well in our contracts and we want to give them a raise? And my response is: you know there is nothing that, for example, precludes you from giving bonuses. That is your own internal processes and procedures but just to let you know there actually is no prohibition on providing bonuses to employees under a contract. It is one of the allowable costs under our cost principles.

• Another question that we love to get is the language with regards to consultants. We get that all the time now. And I just want to be clear with everybody here, a consultant, unless they are an employee of your organization and run through your employment processes, are considered subcontractors for purposes of this contract. We got the request to actually change that language. I am letting you all know right here, we are not going to change that.

Question: Is there a maximum percentage of subcontracting as a portion of the overall budget?

Answer: Mr. Capobianco: Off the top of my head, no. However, I do want to point out when we get to Section L. There is a provision in the RFP that talks about limitations on pass through charges. For example, if you are expected to subcontract more than 70%, I think this the threshold, if you are expected to subcontract more than that, you have to identify what you are doing and then there is actually statutory limitations on how much money you can gain from doing that with regards to fees and things like that. It becomes something that I believe Congress enacted several years ago with the National Defense Authorization Act.

Question: The question is with regards to the special labor category for Ukraine.

Answer: Mr. Capobianco: I cannot give you a definitive answer right now but it is something that we are going to take into consideration, I know our legal folks are actually looking specifically at that, to identify where they would fall depending on local labor law because we do have to take that into account.

Question: The 3% increases, so our rates are going to be established in local currency or in U.S.

dollars? Sometimes in countries, where the exchange rate fluctuates a lot and there is high inflation, we actually pegged the salaries to the U.S. dollar. So the question would be, 3% in UAH or in $ is allowed each year?

Answer: Mr. Capobianco: If you are going to peg it to dollars, which you can do as long as you pay out in local currency, unless Susan wants to authorize differently. So, you could peg it to dollars, it is absolutely OK and I would hold the 3% increase to dollars, that's reasonable.

Question: Could you clarify in the bonuses, years ago bonuses were not allowable under USAID contracts in the Middle East, they sometimes allow what's called a thirteen month bonus. Are you saying that a performance based bonus can be acceptable under the contract?

Answer: Mr. Capobianco: Federal Acquisition Regulation (FAR) Part 31 deals with our cost principles and in the selected cost principles, that is discussed, you have compensation for personal services and it talks about bonuses there and if it is a bonus for performance under the contract, it actually is allowed. I cannot speak to where it came that it was not allowed, maybe it can be contracting officer by contracting officer, because that we could still make the case for reasonableness argument, but if you are going to give somebody a bonus and they have done really well and you are doing that in lieu of a higher salary increase if the bonus is reasonable, sure. Now, if you had an employee who is making $50K a year and you want to give them a bonus of $25K dollars. I might take an issue with that. (Mr. Gonyea comments: That is covered separately under local labor law, I believe.) This is the argument that we get with regards to the limitation of the salary increases, is that you are limiting our ability to reward folks for doing a great job and I understand that. The reason that we have been putting these limitations on the salaries themselves is where we as USAID and we as contracting officers are taking a long term view of the impact of multiple salary raises having on our future programs. So, for example, somebody comes in and they start off at 10K a year and after a five year program they are likely getting raise after raise, after raise, they could easily be at 17-18K a year and then they go to the next program, and that is what they expect to make, even if the market value of the position, that they are being hired for has remained the same. We recognize the need, for a morale standpoint to reward people for doing a great job, but we also have to take into consideration the long term impacts of salary increases.

Question: A question on the payment of performance based bonuses, if it is an allowable expense, is the payment of the bonus subject to approval by the contracting officer or is it up to as long as it is within the standards of the contractor's own policies and procedures?

Answer: Mr. Capobianco: You do not have to get it pre-approved as long as it follows your policies and procedures. If you want to run it by us, we are not going to stop you from doing that.

But it gives us an opportunity to opine at the front end, as opposed to come back and look at it at the backend from a reasonableness review.

Question: Just a question back on the qualifications of the COP and DCOP, if we can jump back to that for just a moment, one question would be about the COP's qualifications. It states that experience in the European Eurasia, including Ukraine, is I'm not sure if it's preferable or required or accepted. The specifics about experience in Ukraine, is that preferred or required?

Answer: Mr. Capobianco: That is required.

Question: Another qualification question regarding the DCOP. On page 35 under F.7.1 it says that all positions except Grants Manager will initially be filled by expatriate professionals. And then under the DCOP qualifications it states, the Deputy Chief of Party, Ukrainian, will assist the COP. Can you clarify whether that should be CCN or maybe ex-pat?

Answer: Mr. Capobianco: That is one of the written ones we got. It is a discrepancy and we are going to clarify it in the amendment. (Mr. Gonyea comments: You interpret not 7-10 specifically Ukraine but of 7-10 years of regional experience should include Ukraine?) We need to clarify that language. So, as it currently stands, it's sufficiently vague to where we could say one or the other, but we need to make sure that you guys understand and it's clear, so we are going to clarify that in an amendment.

• Section I. One of the particular clauses there was a question that came in discussing personal conflicts of interest for personnel involved in performing acquisition functions clause that are closely tied to inherently governmental functions, that was a mistake. That clause should not be in there, we are going to be pulling that out.

Question: I just noticed one little possible discrepancy in what Steve presented and what Evgenia presented, which was the in the RFP, which was the third component and in Steve's presentation it showed “Privatizing SOEs” and in the RFP it’s about “Supporting the Export Promotion Office in the GOU.

Answer: Mr. Gonyea: Those are two different things. The Export Promotion Office is intended to be part of this proposal, what I was referring to the privatization assistance, was our assistance that we are currently providing to the State Property Fund for the privatization, for two reasons:

for the privatization of Oblenergos, as well as building capacity of the State Property Fund. That is a separate activity, it was under the strategy but it is a separate part.

Question: In local labor laws there's a contracting vehicle called private entrepreneur is that called a CCN or a subcontractor in this award?

Answer: Mr. Capobianco: That is along with the earlier question that we have with regards to the labor law, we are going to have to look into that. Off the top, that would likely be a Subcontractor. CCN just means cooperating country national and it just describes anybody who is basically Ukrainian working here. But we are more concerned with whether or not they are an employee or not as opposed to whether there's a CCN.

• Section L and M.

o Page limitations are very strict.

o The Cost Proposal must be completely separate from the Technical Proposal. The

Technical Proposal cannot mention the costs.

o Cost proposal should be in English and in U.S. dollars to ensure a fair competitive playing field and a fair evaluation across all offers.

o There is no page limit to your cost proposal, however we want you to be as concise as probably possible.

o Past Performance. Let me reiterate that past performance must be submitted as part of your cost proposal, it is not part of your technical proposal.

o Budget template. Please do not submit locked budgets. You are required to use the budget template provided by us so that the cost evaluation can be done properly.

o Only electronic proposals should be submitted to both Elena Parinova and Michael

Capibianco’s emails.

o Proposals must be received no later than 4:00pm local time here on April 25th, 2017.

That is the current date. I am going to authorize an extension when we release the Amendment to the RFP to allow you all some time to adjust to the new requirements.

o Evaluation criteria. Failure to meet minimum qualification requirements for the key personnel is an automatic deficiency.

Question: I thought the RFP said that the four criteria would be equally weighted rather than in descending order.

Answer: Mr. Capobianco: Yes, you are correct. It was my mistake. They are equally weighted.

Question: Using that same example, if your technical proposal says there will be 14 regional workshops and the cost proposal says it’s only $1,000.00, when you do your adjustment, evaluating it means that saying for 14 regional workshops a realistic cost would be actually $14K and therefore the adjusted cost is what they submitted plus $13K, is that what you mean?

Answer: Mr. Capobianco: Absolutely correct.

Question: Will you be adjusting the range, e.g. dollar value of the projects for which past performance information is to be submitted after you issue an amendment to adjust the LOE (to make sure that the past performance information that is submitted is relevant)?

Answer: Mr. Capobianco: We will indeed be doing so. Relevancy includes it, if we are awarding only a $5 million dollar contract and we are asking for a past performance on a $100 million dollar contract it doesn't really make sense. So yes, we will be adjusting that range.

Question: When do you expect to have the Amendment out?

Answer: Mr. Capobianco: I want to say as soon as we possibly can. I am not going to give you a timeline yet because we have to still go through that process, it will definitely be before the closing date. But we are hoping within the next week or two.

Question: The award date. Do you have any date in mind that you plan to do the award?

Answer: Mr. Capobianco: Yes, that is a great question that was asked in the written questions.

The best I can give you is the first quarter of FY 2018. I am hoping it is sooner but because this is a large award, and we have additional steps that we have to go through, so we are looking at first quarter of FY 2018 which means October, or between October 1st and December 31st.

Question: Are you expecting proposals from consortiums of organizations or do you encourage competition?

Answer: Mr. Capobianco: We encourage teaming arrangements and you as an organization can decide who you team with. However, we only award to a single entity. So let me parse that out a little bit, if you bring a consortium, but it is not a recognized legal entity, the consortium itself, then we award to one person and that is the prime contractor and there’s usually a sub-contractor relationship to the prime but our award is only with that prime. If you want to take your consortium and actually create a legal entity of the consortium, then we can award to the consortium itself, but it has to be a separate legal entity meeting all the eligibility requirements.

With regards to subcontracting agreements, we cannot require this but we highly discourage exclusivity agreements. And I want to repeat that folks: we highly discourage exclusivity agreements because we want to be able to get the best of everybody. That is your decision as an organization and potential offerors. I always said we do discourage.

Question: Can you please post all of the Trade Policy Project’s quarterly reports to Development Experience Clearing house (DEC)?

Answer: Mr. Capobianco: Yes, we will be posting those shortly.

Question: One more question on consortium. Should information on past performance be given separately for each partner of the consortium or be compiled together?

Answer: Mr. Capobianco: When we do past performance we are looking at the prime for the most part. In fact, I have to check the language in the RFP itself but I think it is focused only on the prime awardee which would mean the consortium as a legal entity and if the consortium is created as a legal entity, you are likely not going to have past performance. That is not a bad thing. The U.S. Government encourages new entrants into the field, meaning we do not hold a lack of past performance against you. You are actually treated on a neutral basis, it basically becomes a non-issue for people who do not have. So for example, if you have performance doing a health project, it is not really going to be relevant to doing a trade project or competitiveness project, so we treat you as a neutral basis so it doesn't hurt, nor helps you. NOTE: major subcontractors are considered in the past performance evaluation.

Question: This is a LOE base contract how will firm fixed price agreements with subcontractors be dealt towards at LOE ceiling?

Answer: Mr. Capobianco: We are still looking into hashing that out between the technical and contracting offices. So, I do not want to give you a firm answer right now. That is a question because it is very nuanced. It is a question that we are going to answer in the written Q&A when it gets published.

Question: My question is regarding the monitoring and evaluation, if I recall correctly Section M indicates that as one of the technical selection criteria the M&E plan, the Section L does not actually seem to either call for M&E plan or give a lot space for it. So the question is, if you could just be consistent in either not count, if we do not have to provide it or if you will count it, let us provide it. And also the extent to which the M&E plan and the work plan might be considered outside the page limit, would be helpful but I also recognize your desire to keep the limit at fifty pages.

Answer: Mr. Capobianco: We appreciate you bringing that to our attention, we have noticed a discrepancy. We are working internally to figure out which way we want to go with it: either it is going to be required or it is not going to be required and not and thus not evaluated. It is one of those things we will put in the written answers.

Question: So regarding the 24 oblast centers that you want to do surveys on and then potentially further some assistance to, the implication is that it would include the Donetsk People's Republic and Luhansk People Republic. Can you just address how much work is expected to be done if any inside rebel territories.

Answer: Ms. Malikova: Sure, first of all I would like to clarify the Donetsk Republic, you mean the occupied territory? They do not count towards Ukraine controlled territory so I would not consider them as the territories where the project will work. There are certainly Ukrainian territories both in Luhansk and Donetsk oblasts, there are capitals there and they should be counted against those 24.

Question: I have a question about municipal competitiveness index. There are a number of attempts already done in this particular field some, of them exactly fit into the principles you mentioned. What is the relationship between your proposal and the work that has been already done in the country?

Point number two – municipality. The situation in the country is for example the majority of businesses registered at the municipal, are registered in the center, and on the other side we have a number of oblasts where the business are more or less equally distributed. How to deal with this problem, if it's a problem at all?

Answer: Ms. Malikova: Let me answer the first question. I have an advantage of being aware of the annual business climate survey, is this is the one that you're referring? It doesn't count like an index or a ranking. It's a very thorough survey of business conditions in various parts of Ukraine. What we are discussing and we are proposing and considering for this activity is an index and ranking, so they can be compared against each other so it's just a little different level of depth and, maybe a different angle comparing to, for example, the EPCA survey.

The second question regarding municipality. Answering your first question, yes, we mean municipality index and by municipalities we mean the principle city of each oblast. We are aware of the predecessor indexes and proposing to just take another angle, this is a business climate survey and ranking. We hope it will build up what has been done before and what continues to be done for example I see no problem in leaning against the results of the previous UPCA survey and use it as a starting point. This this will remain up to the implementer to decide.

As a model, which is not a must, we suggested the Asian model. It is very successfully applied in Central and South Eastern Asia countries and this is what you suggest as a as a prototype.

There is a similar competitiveness index that was developed and implemented in Central and Eastern Asia countries, like Vietnam for example. (Clarifying question: And the name?) The competitiveness index. There is a reference in Section C for that specific manual book that describes that approach. So you can find it there including the link to the book.

Question: How USAID treats other supporting documents, like letters of support from municipalities, government of Ukraine, business associations? Do they have any weight in the proposal?

Answer: Mr. Capobianco: It is a very delicate question to answer. If they become part of your technical proposal, and you submit them as part of it and you are willing to take pages away from your 50 pages, that you have, and put that stuff there, then our technical folks will see them.

They will play into, if they fall into one of those evaluation factors are they represent strength or in some cases a weakness, and then they are documented. And the technical evaluation committee in USAID has the ability to sort of take that into consideration. If they are submitted as part of your cost proposal, we look at them but as part of your cost proposals not assigned any rating.

Question: If you look at Section C.4, it lists prerequisites for transition to a broad based economy and the first 2 prerequisites are pension and financial sector and free supply of competitive energy prices. Then they are not dealt anywhere else in the body of Section C. I this because they are covered by two different programs managed by USAID or there is any other reason?

Answer: Ms. Malikova: Exactly. The proposed activity, called Competitive Economy, is part of a larger project Economic Stabilization and Revitalization, where you can find a range of activities which target the financial sector.

Question: Is there a limit for the number of participants in consortium?

Answer: In the consortium itself, meaning a prime and subcontractor relationship, no, there is not. This is whatever you think, it is your technical proposal, it's whatever you think is going to be give you the competitive advantage to best achieve the objectives of what we're looking for.

So, this is totally your call, I think that does play back to an earlier question that was asked with regards to sort of how much money can go through subcontractors. You would be subject to, if you for example as I said, hit that 70% limitation. Then you are subject to the provision that is in Section L with regards to limitation on past charges.

Question: People can enter many consortiums?

Answer: Mr. Capobianco: Yes, of course. That is between you and your subs or consortium members.

Question: I would like to come to back to principles. Education for future business leaders, when you create this program, what do you mean? Is it a higher education? A school education?

SMEs start from kindergartens and school's curriculum. What kind of learning do you mean?

Answer: Ms. Malikova: We certainly did not imply secondary education and we are talking here about the professional education. It can be higher education, university level and lower level technical education. Professional education. Everything that will be aimed at specific skills and knowledge associated with specific industries and sectors that you will be working with.

Question: Are these short-term programs or a full year course?

Answer: Ms. Malikova: It can be both. We could see here working with the university curriculum to adjust them to the current market needs or with technical vocational training to enhance the skills and knowledge of mid-level technical workers. But definitely not secondary schools.

Question: If we are talking about the business structure, getting back to your slide with a template. Do we divide the budget items between the partners of the consortium or just give the general cost?

Answer: Mr. Capobianco: You do have to break it down by subcontractors. You will have a main budget for you as a as a prime and then you will have separate ones of these for each sub-contractor because we have to look at your subcontractors cost as well.

Question: Going back to consortiums there are some that have lots of experience in working in consortiums and then there are some that are fairly new. I asked you the question earlier is there a sort of a list of people that are interested in the projects available anywhere and I guess that's not the common practice. It remains up to our own resources to find out who will be in this project, am I correct?

Answer: Mr. Capobianco: There is not going to be a list of folks, who attended this conference.

We do not want to release your personally identifiable information to the world because it goes on a public website that is viewed by hundreds of millions of people. That's the main reason why we didn't do that. However, we offered this as an opportunity for you guys to do networking yourself. On www.fbo.gov there is an opportunity for you, as a potential prime or sub-contractor, to represent yourself to the world. You go in there, you say I am an interested vendor on this and other potential offerors can then see that you are interested in this and they could contact you.

Question: And I realize that this might be a question you either do not have the answer to or cannot answer now, but do you have an estimated time for when is the new date for the extension?

Answer: Mr. Capobianco: I cannot give you the firm date. We are probably looking at within the next one to two weeks of getting the amendment out and then the extension of the proposal submission date is really going to be dependent on how significant the changes are to what we are doing.

[End of Transcript] http://www.fbo.gov/