SOL-176-16-000001.pdf

Issue Date: December 23, 2015 Questions Due: January 11, 2016, 9:00 am Almaty Time Closing Date: February 16, 2016, 2:00 pm Almaty Time

SUBJECT: Request for Proposals (RFP) RFP No.: SOL-176-16-000001 USAID Competitiveness, Trade and Jobs (CTJ) Activity in Central Asia

To All Potential Offerors:

The United States Government, represented by the United States Agency for International Development Regional Mission to Central Asia (USAID/CA), is seeking proposals from qualified organizations to implement a project entitled “Competitiveness, Trade and Jobs (CTJ)” as detailed in Section C. The applicable geographic codes for this procurement are 937 and 110.

USAID anticipates awarding a Hybrid Cost-Plus-Fixed-Fee (CPFF) Completion/Indefinite Delivery Indefinite Quantity (IDIQ) type contract as a result of this solicitation, covering an estimated period of five years, subject to availability of funds and satisfactory performance. The total estimated value of the award is $20 million - $24 million. Offerors must propose costs that they believe are realistic and reasonable for the work described herein.

This procurement will be conducted under full and open competition procedures, pursuant to Part 15 of the Federal Acquisition Regulation (FAR) (48 CFR Chapter 1). All types of organizations are eligible to compete. If your organization decides to submit a proposal in response to this solicitation, it must be submitted in accordance with Section L of this RFP. Offerors must also carefully review Section M - Evaluation Factors for Award. Sections B through I of the solicitation will become a substantive part of the anticipated contract with blanks to be completed by the Contracting Officer upon award. Section K - Representations, Certifications and Acknowledgements must be filled out in full.

It is the responsibility of the recipient of this solicitation to ensure that the solicitation has been received from the FBO page in its entirety. USAID bears no responsibility for data errors resulting from download or conversion processes.

Offerors can register and use the Interested Vendor List (IVL) on the Federal Business Opportunities (FBO) website, so that firms can contact one another for consideration of teaming arrangements and/or small business subcontracting opportunities in response to this solicitation.

Questions and comments related to this RFP must be submitted electronically to the attention of Ms.

Olga Ekkert at oekkert@usaid.gov and AlmatyAAsolicitations@usaid.gov no later than January 11, 2016 at 9:00 am Almaty Time (UTC +6) using the following format for the email subject line: “SOL- 176-16-000001, USAID Competitiveness, Trade and Jobs Activity – [Name of Organization] Questions/Comments”.

USAID may consolidate and/or not respond to questions/comments to each Offeror, and will publically post all responses as an amendment to this RFP. All amendments to this solicitation will be issued and posted on the FBO website. Offerors are encouraged to check this website (http://www.fbo.gov) periodically.

mailto:oekkert@usaid.gov http://www.fbo.gov/

SOL-176-16-000001

SOLICITATION, OFFER AND AWARD

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

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

ORDER UNDER DPAS (15 CFR 700)

6. REQUISITION/PURCHASE NUMBER

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

NEGOTIATED (RFP)

SEALED BID (IFB)

5. DATE ISSUED

1. THIS CONTRACT IS A RATED RATING PAGE OF PAGES

1 122

C. E-MAIL ADDRESS

EXT.NUMBERAREA CODE

B. TELEPHONE (NO COLLECT CALLS)A. NAME

10. FOR

INFORMATION

CALL:

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

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

SOLICITATION

9. Sealed offers in original and

PART IV - REPRESENTATIONS AND INSTRUCTIONS

OTHER STATEMENTS OF OFFERORS

EVALUATION FACTORS FOR AWARD

INSTRS., CONDS., AND NOTICES TO OFFERORS

REPRESENTATIONS, CERTIFICATIONS AND

LIST OF ATTACHMENTS

CONTRACT CLAUSES

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

I

J

K

L

M SPECIAL CONTRACT REQUIREMENTS

CONTRACT ADMINISTRATION DATA

DELIVERIES OR PERFORMANCE

INSPECTION AND ACCEPTANCE

PACKAGING AND MARKING

DESCRIPTION/SPECS./WORK STATEMENT

SUPPLIES OR SERVICES AND PRICES/COSTS

SOLICITATION/CONTRACT FORM

PART II - CONTRACT CLAUSESPART I - THE SCHEDULE

H

G

F

E

D

C

B

A

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

11. TABLE OF CONTENTS

18. OFFER DATE17. SIGNATURE

SUCH ADDRESS IN SCHEDULE.

IS DIFFERENT FROM ABOVE - ENTER

15C. CHECK IF REMITTANCE ADDRESS

EXT.NUMBERAREA CODE

15B. TELEPHONE NUMBER

(Type or print)AND

ADDRESS

OF

OFFEROR

CODE FACILITY

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

DATEAMENDMENT NO.DATEAMENDMENT NO.

and related documents numbered and dated):

amendments to the SOLICITATION for offerors

(The offeror acknowledges receipt of

14. ACKNOWLEDGEMENT OF AMENDMENTS

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

(See Section I, Clause No. 52.232.8)

13. DISCOUNT FOR PROMPT PAYMENT

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

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

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

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

OFFER (Must be fully completed by offeror)

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

28. AWARD DATE

(Signature of Contracting Officer)

27. UNITED STATES OF AMERICA

25. PAYMENT WILL BE MADE BY

26. NAME OF CONTRACTING OFFICER (Type or print)

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

ITEM

(4 copies unless otherwise specified)

23. SUBMIT INVOICES TO ADDRESS SHOWN IN

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

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

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

AWARD (To be completed by government)

CODE

12/23/2015 X

CNTRL_ASIA

USAID Central Asia USAID/Central Asia

1400 LT

Olga Ekkert +77 12x6292 oekkert@usaid.gov

272-5076

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PAGE(S)

Jonathan Chappell

AUTHORIZED FOR LOCAL REPRODUCTION

Previous edition is unusable

STANDARD FORM 33 (Rev. 9-97)

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

7-9

10-43 44-45 47-60 61-64 65-81

82-88

90-100

101-117

118-122

RFP No.: SOL-176-16-000001 Page: 4

Contents

PART I – THE SCHEDULE

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

B.2 TYPE OF CONTRACT

B.3 TOTAL CONTRACT VALUE AND OBLIGATED AMOUNT

B.4 PRICE/COST SCHEDULE

B.5 FIXED FEE (CPFF)

B.6 INDIRECT COSTS (CPFF)

B.7 COST REIMBURSABLE (CPFF)

SECTION C – DESCRIPTION / SPECIFICATIONS/STATEMENT OF WORK

C.1 GOAL AND SCOPE

C.2 BACKGROUND AND CONTEXT

C.3 REGIONAL COORDINATION

C.4 DEVELOPMENT HYPOTHESIS

C.5 RESULTS FRAMEWORK/LOGICAL FRAMEWORK

C.6 LINKAGE TO OTHER PROJECTS OF USAID, THE U.S. GOVERNMENT, AND DONORS

C.7 DONOR COORDINATION AND COOPERATION WITH THE IFC REGIONAL TRADE FACILITATION

PROJECT

C.8 REPRESENTATION IN THE REGION

C.9 GENDER CONSIDERATIONS

C.10 SUSTAINABILITY

C.11 ASSUMPTIONS AND RISKS

SECTION D – PACKAGING AND MARKING

D.1 AIDAR 752.7009 MARKING (JAN 1993)

D.2 BRANDING AND MARKING POLICY

D.3 BRANDING STRATEGY

D.4 APPROVAL OF BRANDING IMPLEMENTATION PLAN

SECTION E – INSPECTION AND ACCEPTANCE

E.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

E.2 INSPECTION AND ACCEPTANCE

SECTION F – DELIVERIES OF PERFORMANCE

F.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

F.2 PERIOD OF PERFORMANCE

F.3 PLACE OF PERFORMANCE

F.4 AUTHORIZED WORK DAY / WEEK

F.5 DELIVERABLES AND REQUIRED REPORTING

F.6 KEY PERSONNEL

F.7 PERFORMANCE STANDARDS

F.8 752.7005 SUBMISSION REQUIREMENTS FOR DEVELOPMENT EXPERIENCE DOCUMENTS

(SEPTEMBER 2013)

F.9 752.242-70 PERIODIC PROGRESS REPORTS (OCTOBER 2007)

Page: 5

SECTION G – CONTRACT ADMINISTRATION DATA

G.1 CONTRACTING OFFICER'S AUTHORITY

G.2 ADMINISTRATIVE CONTRACTING OFFICE

G.3 CONTRACTING OFFICER’S REPRESENTATIVE (COR)

G.4 AIDAR 752.7003 DOCUMENTATION FOR PAYMENT (NOV 1998) (CPFF)

G.5 TECHNICAL DIRECTIONS/RELATIONSHIP WITH USAID

G.6 PAYING OFFICE

G.7 ACCOUNTING AND APPROPRIATION DATA

G.8 CONTRACTOR’S PRIMARY POINT OF CONTACT

SECTION H – SPECIAL CONTRACT REQUIREMENTS

H.1 INSURANCE AND SERVICES

H.2 AUTHORIZED GEOGRAPHIC CODE

H.3 AIDAR 752.225-70 SOURCE AND NATIONALITY REQUIREMENTS (FEB 2012)

H.4 AIDAR 752.7032 INTERNATIONAL TRAVEL APPROVAL AND NOTIFICATION REQUIREMENTS

(APR 2014)

H.5 AMMONIUM NITRATE AND CALCIUM AMMONIUM NITRATE RESTRICTION (SEPTEMBER 2011)

H.6 LANGUAGE REQUIREMENTS

H.7 NONEXPENDABLE PROPERTY PURCHASES AND INFORMATION TECHNOLOGY RESOURCES

H.8 ADS 548 INFORMATION TECHNOLOGY REQUIREMENT

H.9 ADS 547 MANAGEMENT OF INFORMATION TECHNOLOGY RESOURCES

H.10 FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL CONFERENCES

H.11 REPORTING OF FOREIGN TAXES (JULY 2007)

H.12 NONDISCRIMINATION (JUNE 2012)

H.13 ACCESS TO USAID FACILITIES AND USAID’S INFORMATION SYSTEMS (AUGUST 2013)

H.14 USAID DISABILITY POLICY - ACQUISITION (DECEMBER 2004)

H.15 302.3.5.16(A)(1) CONSCIENCE CLAUSE IMPLEMENTATION (ACQUISITION) (FEBRUARY 2012)71

H.16 302.3.5.16(A)(3) CONDOMS (ACQUISITION) (SEPTEMBER 2014)

H.17 302.3.5.16(A)(4) PROHIBITION ON THE PROMOTION OR ADVOCACY OF THE LEGALIZATION OR

PRACTICE OF PROSTITUTION OR SEX TRAFFICKING (SEPTEMBER 2014)

H.18 USAID-FINANCED THIRD-PARTY WEB SITES (AUGUST 2013)

H.19 CONFERENCE PLANNING AND REQUIRED APPROVALS (AUGUST 2013)

H.20 USAID IMPLEMENTING PARTNER NOTICES (IPN) PORTAL FOR ACQUISITION (JULY 2014) .. 75

H.21 302.3.5.22 SUBMISSION OF DATASETS TO THE DEVELOPMENT DATA LIBRARY (DDL)

(OCTOBER 2014)

H.22 ELECTRONIC PAYMENTS SYSTEM

H.23 COMPLIANCE WITH SECTION 508 OF THE REHABILITATION ACT OF 1973, AS AMENDED ... 78

H.24 GENDER CONSIDERATION

H.25 ENVIRONMENTAL COMPLIANCE

H.26 ORDERING SUPPLEMENTTAL TECHNICAL ASSISTNACE (CLIN 0002)

PART II – CONTRACT CLAUSES

SECTION I – CONTRACT CLAUSES

Page: 6

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

I.2 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

I.3 52.217-9 OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 2000)

I.4 52.244-2 SUBCONTRACTS ALT I. (JUNE 2007)

I.5 52.222-52 EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO CONTRACTS

FOR CERTAIN SERVICES – CERTIFICATION (MAY 2014)

PART III – LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHEMENTS

SECTION J - LIST OF ATTACHMENTS

PART IV – REPRESENTATIONS AND INSTRUCTIONS

SECTION K – REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS

K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

K.3 52.209-5 CERTIFICATION REGARDING RESPONSIBILITY MATTERS (APR 2010)

K.4 52.209-7 INFORMATION REGARDING RESPONSIBILITY MATTERS (JUL 2013)

K.5 FAR 52.209-XX REPRESENTATION BY CORPORATIONS REGARDING DELINQUENT TAX

LIABILITY OR A FELONY CRIMINAL CONVICTION

K.6 52.222-22 PREVIOUS CONTRACTS AND COMPLIANCE REPORTS (FEB 1999)

K.7 52.230-1 COST ACCOUNTING STANDARDS NOTICES AND CERTIFICATION (MAY 2012)

K.8 52.230-7 PROPOSAL DISCLOSURE—COST ACCOUNTING PRACTICE CHANGES (APR 2005) 99

K.9 INSURANCE - IMMUNITY FROM TORT LIABILITY

K.10 52.222-56 CERTIFICATION REGARDING TRAFFICKING IN PERSONS COMPLIANCE PLAN

SECTION L - INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS

L.1 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE (FEB 1998)

L.2 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

L.3 52.216-1 TYPE OF CONTRACT (APR 1984)

L.4 52.233-2 SERVICE OF PROTEST (SEP 2006)

L.5 GENERAL INSTRUCTIONS TO OFFERORS

L.6 PROPOSAL SUBMISSION

L.7 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL

L.8 INSTRUCTIONS FOR THE PREPARATION OF THE COST PROPOSAL

SECTION M - EVALUATION FACTORS FOR AWARD

M.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

M.2 GENERAL AND SOURCE SELECTION INFORMATION

M.3 EVALUATION CRITERIA

M.4 COST PROPOSAL EVALUATION

M.5 DETERMINATION OF THE COMPETITIVE RANGE AND CONTRACT AWARD

M.6 SOURCE SELECTION

Page: 7

PART I – THE SCHEDULE

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

The purpose of this contract is to obtain services as described in Section C. Statement of Work.

B.2 TYPE OF CONTRACT

This is a FAR 16.102(b) combination award consisting of a Cost Reimbursement-Completion (CLIN 0001) and a single-award Indefinite Delivery/Indefinite Quantity (IDIQ) type contract (CLIN 0002).

Under the Cost Reimbursement Completion portion of the contract (CLIN 0001), the contractor shall furnish all personnel, materials, equipment, supplies, facilities, services (except as expressly set forth in this contract as furnished by the Government) and perform all activities necessary for, or incidental to, the performance of work described in Section C and other sections of the contract not specifically identified under CLIN 002 as the IDIQ Supplemental Technical Assistance.

Under the IDIQ portion of the contract (CLIN 0002), the contractor must furnish additional technical assistance arising out of or related to the completion portion of the contract, as required by Government-issued Task Orders. The services shall be ordered in accordance with Section H 26 entitled “Ordering Supplemental Technical Assistance (CLIN 0002)” and the IDIQ clauses in Section I.

As this CLIN is part of this contract and not a stand-alone award, the Government is not required to state or order any minimum number of person-days as otherwise provided in FAR 16.504(a)(1)). The Other CLIN contained in this Contract provides sufficient consideration to make this a legally binding contract, and the Government has no obligation to fund or order under this CLIN.

For the consideration set forth below, the contractor must provide the deliverables or outputs described in Sections C and F in accordance with the performance standards specified in Sections C and F.

B.3 TOTAL CONTRACT VALUE AND OBLIGATED AMOUNT

(a) CPFF CLIN 0001

ESTIMATED COST AND FIXED FEE FOR CLIN 0001

The estimated cost for the performance for CLIN 0001 of the work required hereunder, exclusive of fixed fee, if any, is $________. The fixed fee, if any, is $________. The estimated cost plus fixed fee, if any, is $________.

(b) IDIQ CLIN 0002

(i) ESTIMATED COST AND FIXED FEE FOR CLIN 0002

The total estimated ceiling cost of CLIN 0002 is $________, exclusive of the associated maximum fee of $____________. The total estimated ceiling cost and maximum fee is $______________.

(ii) OTHER DIRECT COST LIMITATIONS UNDER CLIN 0002

The estimated cost of this CLIN includes estimates for material, equipment, subcontracts, travel, and training required for performance of the total amount of work that can be ordered by the

Page: 8

Government under this CLIN during the life of this contract. The amount of ordered Other Direct Costs will not exceed $1,300,000.00.

(iii) LEVEL-OF-EFFORT UNDER CLIN 0002

A. In performing Government orders for Technical Assistance under this CLIN, the Contractor is obligated to provide up to a maximum of 5,200 person-days.

B. The fee set forth in B.3.(b)(i) is based upon furnishing the level-of-effort specified in paragraph A. The total estimated cost and fixed fee will be established in the individual Government-issued Task Orders and shall not exceed the amounts set forth in Section B.3.(b)(i) IDIQ CLIN 0002.

(c) 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 hereunder is $________. The contractor cannot exceed the aforesaid obligated amount.

(d) Funds obligated hereunder are anticipated to be sufficient through $________.

(e) The breakdown by country of the amount currently obligated is as follows:

115 116 119 120 122 176 Regional TOTAL Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan

B.4 PRICE/COST SCHEDULE

Total

a. Direct Costs

b. Subtotal

c. Indirect Costs

d. Fixed Fee

e. Total Price

Contract Line Item Number

(CLIN)

Description Total Price

Cost Reimbursement- Completion

Indefinite Delivery/Indefinite Quantity

Total

Page: 9

B.5 FIXED FEE (CPFF)

Pursuant to FAR 16.306(d), the fixed fee payable under this contract will be tied to the completion of the reports and deliverables specified in Section F.6 of this contract and in accordance with the final approved Fee Schedule.

B.6 INDIRECT COSTS (CPFF)

Pending establishment of revised provisional or final indirect cost rates, allowable indirect costs will be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases:

Description Rate Base Type Period Indirect Cost X % 1/ 1/ 1/ Indirect Cost Y % 2/ 2/ 2/ Indirect Cost Z % 3/ 3/ 3/

1/Base of Application:

Type of Rate:

Period:

2/Base of Application:

Type of Rate:

Period:

3/Base of Application:

Type of Rate:

Period:

B.7 COST REIMBURSABLE (CPFF)

Allowable costs will be limited to reasonable, allocable and necessary costs determined 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.

In addition, the requirement and conditions concerning estimated cost and funding apply as detailed in FAR 52.232-22, Limitation of Funds, incorporated by reference in Section I of this contract.

[END OF SECTION B]

RFP No.: SOL-176-15-000001 Page: 10

SECTION C – DESCRIPTION / SPECIFICATIONS/STATEMENT OF WORK

C.1 GOAL AND SCOPE

The goal of the contract is to increase the competitiveness1 of Central Asian economies in order to increase the exports horticulture and transport and logistics sectors that operate regionally, to reduce the time and cost of trading across borders, and to create or maintain jobs whenever possible. The activity will be implemented in Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan by interacting with businesses, trade authorities and governments in these aforementioned countries as well as in foreign markets specifically Afghanistan, Pakistan and India. The contract directly supports the first development objective of USAID/Central Asia’s (CA) Regional Development Cooperation Strategy (RDCS): “expanded, diverse and competitive trade and markets.” The activity will use regionally allocated funds to increase exports within Central Asia and between Central Asia and South Asia and bilateral funds to increase exports between Central Asian countries and the rest of the world2.

The implementer should make every effort to invest USAID’s funds in ways that are likely to create a large number of jobs. The risk that high unemployment in the region could contribute to violent extremism makes it important that the activity pursue its objectives with a consideration of the amount of jobs either created or maintained.

The activity will work with the governments and private sector actors to improve the competitiveness of these economies as measured by an increase of exports in the horticulture and improved services in the transport/logistics sectors. Both sectors have high growth potential and the potential to create a large number of jobs. The activity will use value chain analysis to select which sub sectors the activity will work in horticulture.

Similarly, the activity will assess the transport and logistics sectors from a holistic point to identify how to strengthen this service sector. The activity may partner with a firm, or groups of firms, to understand the opportunities and requirements of markets, adopt new technologies to scale up and expand to new buyers, to develop the skills needed to produce at international standards, to establish relationships with potential buyers and suppliers for long term growth, to demonstrate new practices, technologies, and to develop approaches that have potential to benefit the industry as a whole. Similarly, the activity will partner with relevant government authorities when there is political will to address the trade facilitation constraints that fall within the mandate of the host country authorities. Additionally, the contractor will leverage at least $7 million worth of activity funds in private sector partnerships to increase exports and create or maintain jobs. Each partnership will have a minimum 50% private sector match.

1 Ability of a firm or a nation to offer products and services that meet the quality standards of the local and world markets at prices that are competitive and provide adequate returns on the resources employed or consumed in producing them.

Read more: http://www.businessdictionary.com/definition/competitiveness.html#ixzz3oLQVmMH5

2 Within USAID’s support to the U.S. State Department’s New Silk Road Initiative, the Almaty Consensus, USAID/CA defines South Asia as Afghanistan, Pakistan, and India. The Almaty Consensus facilitates regional connectivity in the water, energy, trade and food fortification sectors.

http://www.businessdictionary.com/definition/ability.html http://www.businessdictionary.com/definition/nation.html http://www.businessdictionary.com/definition/offer.html http://www.businessdictionary.com/definition/product.html http://www.businessdictionary.com/definition/services.html http://www.businessdictionary.com/definition/quality.html http://www.businessdictionary.com/definition/market.html http://www.businessdictionary.com/definition/price.html http://www.businessdictionary.com/definition/competitive.html http://www.businessdictionary.com/definition/provide.html http://www.businessdictionary.com/definition/adequate.html http://www.businessdictionary.com/definition/returns.html http://www.businessdictionary.com/definition/resource.html http://www.businessdictionary.com/definition/employment.html http://www.businessdictionary.com/definition/producer.html http://www.businessdictionary.com/definition/competitiveness.html%23ixzz3oLQVmMH5 http://www.businessdictionary.com/definition/competitiveness.html%23ixzz3oLQVmMH5

Page: 11

As the activity works to increase the competitiveness of Central Asian economies generally and export oriented firms specifically in the selected horticulture sub-sectors with the potential to employ large numbers of people, it will focus on the need for more skilled labor. By creating job opportunities in Central Asia, this may reduce the number of young men and women who choose to migrate. Furthermore, by specifically targeting these new job opportunities geographically towards the migrant labor population who is also vulnerable to recruitment from extremist groups, the activity will be able to create economic opportunities for young people thus providing them with a reason to stay in Central Asia rather than migrating for work or other purposes. The activity will work in targeted geographic areas in each of the five Central Asian countries to link youth vulnerable to extremism to private sector led skills training, job readiness training, and entrepreneurship in the horticulture, transport/logistics sectors and potentially a third sector, which will be decided in consultation with the Mission after award. The contractor will work with community leaders, local governments, and NGOs to identify which youth likely to migrate for employment or recently returned from working abroad will benefit most from this training. The activity will measure the impact of its investment on this target population in terms of increased incomes and increased pro-social attitudes and behaviors.

Finally, the implementer will also respond on a demand driven basis to discrete tasks identified by USAID’s country offices, local governments, and other donors that promote competitiveness, trade, and jobs specifically in their country.

C.2 BACKGROUND AND CONTEXT

The region and integration

The economies of Central Asia are still adjusting 24 years after breaking away from the Soviet Union. The heritage of the Soviet era remains strong: state intervention persists across the region – from almost total control of economic life in Turkmenistan, to a “guided” market economy in Kazakhstan, and less but unpredictable government intervention in the Kyrgyz Republic. Incomes have risen overall, but much more among the oil and gas exporters – economic growth outside the energy sector has been slow. Per capita incomes in Tajikistan, Kyrgyzstan, and Uzbekistan range between US $2,000 and $5,000. As low as these average incomes are, they disguise the more critical point that millions of workers from the region are employed as migrants elsewhere because their own economies have not grown sufficiently to provide jobs. There is also a growing concern that migrant workers are vulnerable to recruitment into extremist groups both when they work abroad and upon return.

There are many reasons for the poor performance of economies in Central Asia. Above all, the heritage of state control and the weakness of market economy institutions contribute to a difficult climate for business. The average Doing Business score of countries in the region was 95 out of 189 countries surveyed in 2016.3 Perverse tax rules, ambiguous regulations, complex government procedures, and weak norms and systems to enforce accountability foster corruption and create an uncertain and difficult climate for firms. Central Asian firms tend to

3 This is the average of Kyrgyzstan, Tajikistan and Uzbekistan after removing Kazakhstan (41) and Turkmenistan (not ranked at all but would be at or close to the bottom) as outliers at opposite ends of the spectrum.

Page: 12 remain small – often too small to compete beyond their national borders. These firms will either need to grow or aggregate their output to compete internationally.

Like developing countries everywhere, Central Asian countries need to trade to grow. As national economies have developed in the rest of the world, so too has regional trade grown rapidly throughout the world.4 That is not happening in Central Asia where intra-regional trade share of total trade is only about five percent.

Regional and global import tariffs are fairly low, particularly within the Eurasian Economic Union.

In additional to being landlocked, the distance between Central Asia and major world markets and the high cost of transportation prevent trade, with the exception of sales of oil and gas, from serving as the engine of growth as it does for other small economies. Transport networks after independence were oriented more to Moscow than to neighbors or to the most attractive markets today. Economic hardship following independence allowed much of that infrastructure to deteriorate. An incomplete patchwork of largely bilateral transport agreements between Central Asian states and with neighbors enables some regional trade flows but blocks others when, for example, an agreement permits trucks to carry goods from Country A through a third country to Country B but not in the other direction. Bilateral political tensions sometimes result in borders being closed completely with little notice. Fears of narcotics, organized crime, and importing violent extremism increased border restrictions while corruption and bribery plague customs/border crossings. The cumulative results are high costs and long delays moving goods over long distances – reportedly 2 to 2.5 times international averages. Many firms cannot overcome this disadvantage in selling to foreign markets so focus on local markets instead.

This does not encourage them to keep pace with global developments in their industry, prevents them from becoming competitive, and cuts off the most important avenue for their expansion.

These impediments to trade discourage firms from developing the expertise and scale of production that would allow them to compete in the region or beyond. Except for oil and gas, the economies of the region have not sorted out their comparative and competitive advantages

– they have not specialized or built expertise and economies of scale in production to provide a basis for expanding regional trade. Exports remain concentrated in a few primary commodities:

oil and gas, metals, cotton and wheat. Other than the jobs generated by these industries and the revenue they generate for government, the Central Asian economies are not reaping the gains from trade that would give them stable, rapid growth over time and are not generating the kind of growth that can dramatically increase employment thus providing more jobs at home for young men and women who currently migrate for employment.

Crisis and opportunity

Three developments create an opportunity for change that would help the economies of Central Asia to become more competitive, increase trade, and accelerate economic growth in ways that will significantly increase jobs. The first is an economic crisis. The global reduction in oil and natural gas prices has hit the region’s hydrocarbon producers hard. Government revenues and spending are dramatically down, slowing economic growth, and job creation. The added burden of economic sanctions has contributed to a recession in Russia with two effects: Russia can no longer employ many of the millions of Central Asian migrant workers, and the volume and earnings from Central Asian exports to Russia are significantly down (Russia is still the primary

4 Intra-ASEAN trade, for example, used to be a very small share of its members’ total trade but now exceeds 50%.

Page: 13 market for most of the region’s non-hydrocarbon exports). Migrant workers who return home from Russia cannot find work. Those who stay in Russia, if employed, remit fewer funds because the declining ruble forces them to pay more for living expenses, leaving less to send home. The governments and economies of Central Asia are additionally vulnerable because Russia has the option of restricting, deporting or banning migrants entirely at any time. Finally, all the countries of Central Asia are increasingly concerned about foreign extremist groups recruiting their citizens and those citizens returning and spreading a violent ideology.

The global economic crisis has convinced the political leaders of the oil and gas producing countries in Central Asia that they must diversify their economies, build competitiveness in non-hydrocarbon industries, and export a wider range of products to a wider array of markets.

Leaders in the other Central Asian countries – the non-hydrocarbon producers – are alarmed by the flow of returning migrant workers and the steep decline in remittances. They have concluded that they too must build competitiveness and diversify, that they can no longer export only labor to only one or two countries. Thus, for different but related reasons, every government in the region is launching its own diversification and export development initiatives and committing political capital to achieving those goals.

The second development is growing physical connectivity within Central Asia and between it and the rest of the world that is largely the result of extensive construction and upgrading of roads and railroads under the Central Asian Regional Economic Cooperation (CAREC) program. Since 2008, for example, the Asian Development Bank (ADB) alone has spent $16 billion to improve 3,855 km of roads and construct, double track, or electrify 3,407 km of railway in the region. The World Bank and, on a bilateral basis, China have financed significantly more.

Good trade data is difficult to find but there is no question that physical connectivity within the region has improved as a result of these efforts. According to CAREC reports, “… observations and data suggest vastly increased volumes of traffic and numbers of people crossing borders in the CAREC region.”5 The ADB suggests this has enabled an increase in intra-CAREC trade of 49%, albeit from a very low base. Much remains to be done to complete transport networks in the region, but the pace of work is rapid and is expected to increase over the life of the contract, creating a critical mass of transport infrastructure that connects the countries of Central Asia for the first time in history.

Crucially, however, transport performance6 as defined by CAREC in their corridor performance and monitoring methodology, lags behind physical connectivity because inefficient management of border crossings in Central Asia raises costs and creates long delays. Most or all governments in the region still inspect 100% of the goods that cross borders. Discretion in the hands of border officials encourages corruption. Although their methodology for measuring border efficiency in the case of landlocked countries could be improved, it is still telling that the World Bank’s “Trading Across Borders” survey ranks Central Asian countries at the very bottom of global ratings of border efficiency.

The third development that sets the stage for the contract is the WTO Agreement on Trade Facilitation reached in December, 2013 in Bali. WTO member governments around the world, including in Central Asia, are making dramatic changes in border practices to comply with the Agreement. The Agreement itself grew out of the realization that inefficient border management is now the greatest constraint to global trade - tariff reductions under GATT and the WTO have

5 CAREC Transport and Trade Facilitation Strategy 2020, p. 5 6 http://www.adb.org/sites/default/files/publication/148731/carec-cpmm-forward-looking-retrospective.pdf

Page: 14 reduced most tariffs to inconsequential levels but transporting goods across borders remains very costly and slow in much of the world.

The Bali Agreement requires WTO member states to streamline the clearance processes of the half dozen government agencies that typically check goods at border crossings. A central component of the Agreement is the requirement to create an electronic “Single Window” for all border interactions between traders and government. This includes revising all procedures in those agencies to reduce redundancy and non-essential steps. The Agreement also calls on governments to implement risk management systems to focus the attention of border officials on high risk shipments while expediting the movement of other cargo, and Authorized Economic Operator (AEO) programs that identify in advance low-risk shippers and travelers for expedited treatment.

Four governments in Central Asia are in some stage of Single Window development – including Uzbekistan which is not a WTO member.7 There is abundant donor support. Although border crossing costs and times in Central Asia are unlikely to ever approach OECD averages because of political tensions between the countries of the region, institutional weaknesses, and a shared concern about instability to the south, they are likely to improve significantly over the next 3-4 years with direct benefits for regional trade, increased competitiveness, and job creation. To catalyze this change we need to coordinate our intervention with donor counterparts to remove barriers to trade.

Together, the economic crisis, transport connectivity, and improved border practices mean that the effort to diversify, to become competitive in a wider range of goods, will be facilitated by faster, cheaper transportation. Trade within the region and beyond will increase. Exports will become more competitive in foreign markets. But imports will become cheaper too, which will benefit consumers and manufacturers who use imported inputs and increase competition for firms that serve local demand. The eventual outcome will be a sorting out of business activity through which the ability of firms to exploit comparative advantage and build competitive advantage, rather than transport costs, will determine the pattern of growth in the region. Firms and the economies will specialize more, creating a much stronger basis for trade. Physical trade will begin to catch up with physical connectivity, helping to integrate the region and generate many more jobs.

The challenge for the CTJ contract is to help this to happen. CTJ will work with several industries but will focus particularly on horticulture, transport/logistics and potentially an additional third sector. It will work with governments on trade policy and administration issues and constraints to competitiveness.

Priority Sector 1: Horticulture

Horticulture is the one sector in which the countries of Central Asia share a comparative advantage. Uzbekistan was a focal point for fruit and vegetable production in the Soviet Union and retains its reputation for the quality of its fruits and vegetables, while Kyrgyzstan and Tajikistan are also known for their orchard crops, and Turkmenistan for melons and dried fruit.

Good quality fruit and vegetables are also produced in southern Kazakhstan. Within the borders of the former Soviet Union at least, horticultural products from Central Asia are prized for their

7 Turkmenistan, also not a member of the WTO, has not moved forward decisively like Uzbekistan, but is exploring the feasibility of similar trade facilitation reforms.

Page: 15 quality. Uzbekistan, Tajikistan and Kyrgyzstan have been making forays into new and lucrative export markets for their fruits and vegetables, but on a small scale in comparison to their potential.

Horticulture has more potential to generate new jobs than any other sector in Central Asia, particularly the labor-intensive horticulture industry and value added processing. The technologies for intensive high value production rather than extensive farming for commodities demand both more skilled labor which means higher incomes as well as more jobs for tasks such as installing and maintaining drip irrigation, grafting and pruning, field picking, post-harvest handling and packing, cold storage management and maintenance. Demand for skilled labor is already growing. Commercial farms in Uzbekistan looking to export, for example, are facing shortages of skilled labor while trained specialists in Tajikistan are earning $15 per day for contract work pruning orchard trees. The increased technology used in higher value horticulture has the potential added benefit in Central Asia of appealing to rural youth who would otherwise leave family farms for brighter lights but could be attracted back by technology and the promise of higher incomes. Additional services to support not only production, but also processing, transport, and export will contribute to job creation.

There are many challenges in horticulture in Central Asia. Some are common to smallholder farming elsewhere - outdated technologies, poor quality of inputs and planting materials, a lack of finance, uncertain property rights, and extreme vulnerability to risk, to name a few. Additional issues include the need to strengthen and develop private sector support services to enable not only increased production, but also the adequate sorting, packaging, grading and transport to new local and foreign markets. Others are unique e.g., national standards that are out of date and out of line with the rest of the world (food safety inspectors in the Kyrgyz Republic, for example, have refused to permit flash freezing of perishables because flash freezing is not in the Soviet standards from the early 1990s).

Poor transport networks restrict most farmers to local markets, not necessarily to where prices are highest. Those who can consider exporting may be prevented by costly transport, border delays, inappropriate standards or other non-tariff barriers from selling anywhere but Russia.

But this is starting to change. Transport improvements and growing awareness of markets farther afield are beginning to expand sales to the 30 million people in Afghanistan to the south, for example. One of the key constraints producers, processors, and packing companies face is their poor understanding of Hazards Analysis Critical Control Point (HACCP), International Organization for Standardization (ISO), and Eurasian Economic Union (EAEU) standards required to sell to those markets as well as the weak management and control systems necessary to obtain certifications. Farmers are increasingly aware that higher prices can be had in Eastern and Western Europe, and often in the Gulf as well as East Asia. Uzbekistan is starting to reach new markets for high value fruits in the Baltic States, South Korea and elsewhere.

Ultimately, horticulture production in Central Asia will have to address the problem of how to aggregate sufficient quantity while providing uniform quality that more sophisticated markets seek. Stories abound of buyers coming to Central Asia to buy large volumes of product but leaving empty-handed. Long-term solutions for Central Asia to thrive as an international supplier of horticultural products whether intentional or through the evolution and maturation of a market economy, may involve land consolidation. In the short and medium- term, other arrangements to bridge the gap between small producers and large buyers will be needed.

“Aggregators” and “consolidators” are beginning to emerge, but would benefit from support to develop further while other approaches such as “out grower” schemes to achieve scale and quality demanded or “lead farm” arrangements, need to be explored.

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The potential is large. For several decades at least, agricultural producers in the region have had limited access to new technologies and techniques that means there are many opportunities to increase productivity and incomes. Experience with previous activities has shown that producers are eager for new technologies and techniques and adopt them easily.

The demonstration effect of pioneers and first movers has been powerful as seen in the rapid expansion of cold storage technology in Uzbekistan today. Small stimuli can create large changes. However, any approach taken must enable existing or potential private sector actors from the start to provide needed services and technologies.

Priority Sector Two: Transport and Logistics

Good transport and logistics services enhance competitiveness and trade in every sector of an economy and are the heart of the global supply chain. The transport logistics industry includes all the services that are needed to move goods across borders to final destinations: route planning, road, rail, air and water transport, intermodal transfers, temporary storage, controlled environment storage, trade finance and insurance, and customs brokerage, among others.

Good logistics services are essential for perishable goods and just-in-time deliveries, goods that cross multiple borders and shipments that require intermodal transfers.

Development of the transport logistics industry has not kept pace with the growth of transport infrastructure in Central Asia. But growth has started and there appear to be at least half dozen local regional firms with serious ambitions in this sector and a need for qualified employees across a variety of subsectors. Most of the multinational logistics firms have also established or are setting up operations in the region. At least one university has added logistics to its curriculum.

The industry will need to grow rapidly to enable the growth of non-oil and gas exports and enhance competitiveness across the board. Growth will require help to build management systems, professional knowledge, and operational skills. Competition will be important in an industry with relatively few players so far. The industry also has an important potential role to play in transport-related regulation, policy and effective public-private sector dialogue. New logistics centers in several Central Asia countries, for example, are an important development but success will depend on how they are managed and by whom. At the least, the private logistics industry can provide important input into that and may be a candidate for running the centers . The industry’s analysis and views on sanitary and phytosanitary (SPS) issues, transit agreements, and the reform of border processes, among others, would be especially valuable.

The ADB has given several local logistics companies responsibility for collecting data on the time and cost of transporting goods along the six CAREC corridors, including – indirectly – monitoring the efficiency of border crossings. These companies and the larger industry can be encouraged to use this information in public-private dialog to better inform decisions on transport and border issues and thus implement the necessary reforms.

The CAREC Institute facilitated the formation of a CAREC Federation of Carrier and Forwarder Associations (CFCFA) with membership from all CAREC countries. The contractor will look for opportunities to support efforts by the CFCFA or similar organizations to increase the range and quality of services offered by the industry.

Predecessor activities

Two regional USAID activities related to the new CTJ activity will end in the Fall of 2016. The Macroeconomic Project (MEP -October 2011 – September 2016) provides technical assistance to help address selected economic policy issues in Kazakhstan and Turkmenistan in response

Page: 17 to government interest and requests. In Kazakhstan that has included analyses and capacity building in the areas of government accounting standards, public audit, regulatory streamlining, SME support programs, bank supervision, and accession to the WTO, among others. In Turkmenistan, it has included assessments and some capacity building in the areas of accounting reform, valuation for privatization, implementation of bar coding, and analysis of the effects that joining the WTO would have on Turkmenistan if it applied and acceded.

The Regional Economic Cooperation Project (REC – October 2011 – September 2016) focuses on export development and trade within the five Central Asian countries and to export markets including in Afghanistan and Pakistan. REC supports productivity growth and export readiness for firms in several industries including textiles, carpet making, organic farming, fruit and vegetable packaging and export, and pharmaceuticals. It does this by providing information and analysis of technology and markets appropriate to the needs of those industries in the Central Asia support to industry associations, and by facilitating Business to Business (B2B) networking for Central Asian businesses including with firms in Afghanistan and Pakistan.

REC also assists export promotion organizations in the region and promotes pro-trade policies, regulations and processes in general as opportunities arise. It provided extensive support for Tajikistan’s accession to the WTO and helped develop its plan for post-accession follow up.

REC has focused increasingly on trade facilitation that has included support to the transport and logistics industry, customs valuation training, and assistance to improve the operations of multi-modal hubs.

The most visible REC activity is the Central Asian Trade Forum (CATF) which has developed into a widely recognized institution promoting trade development in the region. Each fall, CATF brings together private firms, technical experts, government policy makers and donors to learn about technologies and trade developments in export industries, assess trends in standards and demand in foreign markets, share information about new government policies and programs, and display products. Participants can take training in export-related skills8, and learn about developments in trade facilitation, transport and logistics. The Forum encourages networking through facilitated Business to Business (B2B) meetings. CATF also makes several “Exporter of the Year” awards that get extensive media coverage. Now in its sixth year, CATF draws a large and increasing number of private firms from the region and as far as Eastern Europe and East Asia. Over 500 individuals and 200 companies paid their own way to participate in CATF V in 2014 and the Forum continues to grow. REC will host CATF VI in June of 2016. Forum agendas and project reports are included as an annex.

REC has been the lead organizer and sponsor of CATF since 2012. The growing appeal of the Forum has led KazNexInvest,9 Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the European Bank for Reconstruction and Development (EBRD) to participate and contribute as sponsors. They have both indicated their interest, willingness, and capacity to participate with additional resources. CATF operates under an informal governing board representing industry, government, and donors.

C.3 REGIONAL COORDINATION

8 Including training tailored to the interests of the textiles, carpet making, organic farming, fruit and vegetable export, and pharmaceuticals industries.

9 Kazakhstan’s export and investment promotion agency

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CTJ will work in the five countries of Central Asia. It will first promote exports between the Central Asian countries, next between Central Asia and South Asia, and finally between Central Asia and the rest of the world. CTJ will assist producers in the region to develop new markets and diversify their economies to become less reliant on natural resource exports

Because this is a regional initiative in a region where USAID also has bilateral programs in related fields, it is important to define its role carefully. CTJ will address issues that are region-wide and issues that countries and firms in the region face in common in a way that facilitates job growth whenever possible. It will fill gaps not covered by the bilateral programs. It will also facilitate information exchange, learning and collaboration between them in order to spread the impact of bilateral programs more broadly in the region. This exchange and collaboration includes taking successful practices and examples from bilateral programs with regional potential and relevance and working to scale them up regionally.

The contract will coordinate closely with USAID’s bilateral horticulture…