SOL-492-12-000013_(TRADE).pdf

TRADE SOL‐492‐12‐000013

RFP Issuance Date: September 27, 2012 RFP Closing Date: November 8, 2012 RFP Closing Time: 2:00pm, Manila Time Questions closing date: October 12, 2012 Questions closing time: 11pm, Manila Time

SUBJECT: Request for Proposal (RFP) No. SOL‐492‐12‐000013

Trade‐Related Assistance for Development (TRADE)

Dear Prospective Offerors:

USAID/Philippines, is soliciting proposals from qualified organizations for the performance of services detailed in the attached RFP to support a program that will be administered by USAID’s Office of Economic Development and Governance (OEDG).

This procurement is being conducted through full and open competition, for which the procedures for “contracting by negotiation, best value” method of procurement, as described in Part 15 of the Federal Acquisition Regulation (FAR), will apply.

USAID/Philippines plans to award a Cost‐Plus‐Fixed‐Fee (CPFF) completion type contract. The maximum amount of the contract (costs and fee) is between the range of US$13million to US$13.5million covering an estimated four‐year base period of performance with a one‐year option period. The estimated costs for the base period is between US$11.7million‐US$11.8million and the option period between US$1.6million‐US$1.7million. Offerors should not necessarily strive to meet the maximum amount.

Offerors must propose costs that it believes are realistic and reasonable for the work. Cost proposals will be evaluated as part of the Best‐Value procedure in determining contract award, including cost effective approaches to achieve the results.

Issuance of this solicitation and the submission of a proposal do not constitute a commitment on the part of the U.S Government or USAID to make an award; neither does it constitute an obligation for any costs incurred in the preparation and submission of a proposal. Award of a contract will be subject to availability of funds and proper completion of required USAID internal processes.

It is the responsibility of the recipient of this solicitation document to ensure that it has been received in its entirety, including subsequent solicitation amendments, if any. USAID bears no responsibility for data errors resulting from transmission or conversion processes.

USAID reserves the right to reject any or all proposals received. To this end, this RFP is being issued and consists of this cover letter and the text of the attached RFP. All Offerors are cautioned to carefully review this cover letter and the contents of the RFP.

The details associated with the submission 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, at USAID/Philippines in Manila, Philippines and not at the USAID offices in Washington, DC or any other location. Offerors should take account of the expected delivery time required by the proposal transmission of their choice and are responsible to ensure that proposals are received at USAID by the due date and time.

One (1) original and four (4) hard copies of the technical proposal and one (1) original and one (1) copy of the cost proposal constitutes a complete submission. Offerors must also submit an electronic copy of both their technical and cost proposals. Acceptance is upon receipt of the complete hard copy NOT the electronic copy. Facsimile submissions will not be accepted.

Proposals received after the closing time and date or are incomplete, will not be accepted nor considered unless authorized by the Contracting Officer.

Offerors are instructed to pay careful attention to the RFP’s Section K – Representation, Certifications and Acknowledgements. Offerors must comply with FAR clause 52.204‐7, Central Contractor Registration, and complete the annual representations and certifications electronically via the Online Representations and Certifications Application website at https://www.uscontractorregistration.com/ for their CCR and ORCA.

An interested vendors list is not included in this solicitation. Offerors can register and use the interested vendors list at the Federal Business Opportunities (http://www.fbo.gov) webpage created for this solicitation so that interested firms and individuals can contact one another for consideration of teaming arrangements and/or small business subcontracting opportunities arising from this solicitation.

Questions, comments and requests for clarifications must be sent to manilatrade@usaid.gov with a copy to orpmailbox@usaid.gov no later than November 8, 2012, 2:00pm, Manila time.

USAID/Philippines reserves the right to reject any and all offers, if such action is considered to be in the best interest of the US Government.

Please note that this does not constitute any guarantee that a contract will be awarded nor does it constitute any authorization by USAID to reimburse costs incurred in the preparation of a proposal.

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

Sincerely, //S//

Sallie McElrath Supervisory Contracting Officer

Contents

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

B.2 CONTRACT TYPE

B.3 DEVELOPMENT FOCUSED BUDGET AND CEILINGS

B.4 PAYMENT OF FIXED FEE

B.5 COST REIMBURSABLE

B.6 INDIRECT COST

B.7 CEILING ON INDIRECT COST RATES AND FINAL REIMBURSEMENT FOR INDIRECT COSTS

B.8 FUNDING

SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 TITLE

C.2 OBJECTIVE

C.3 BACKGROUND

C.4 STATEMENT OF WORK

C.5 SPECIAL ACTIVITIES COSTS

C.6 OTHER REQUIREMENTS

SECTION D – PACKAGING AND MARKING

D.1 AIDAR 752.7009 MARKING (JAN 1993)

D.2 BRANDING POLICY AND STRATEGY

D.3 APPROVAL OF CONTRACTOR BRANDING IMPLEMENTATION AND MARKING PLAN

SECTION E – INSPECTION AND ACCEPTANCE

E.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

E.2 INSPECTION AND ACCEPTANCE

SECTION F – DELIVERIES OR PERFORMANCE

F.1 PERIOD OF PERFORMANCE

F.2 DELIVERABLES

F.3 MANAGEMENT OF CONTRACT

F.4 PERFORMANCE MANAGEMENT PLAN (PMP)

F.5 REPORTS AND DELIVERABLES

F.6 REPORTING FORMAT

F.7 LANGUAGE OF REPORTS AND OTHER OUTPUTS

F.8 TECHNICAL DIRECTION AND DESIGNATION OF RESPONSIBLE USAID OFFICIALS

F.9 PLACE OF PERFORMANCE

F.10 AUTHORIZED WORK DAY/WEEK

F.11 CLOSE‐OUT PLAN

F.12 AIDAR 752.7005 SUBMISSION REQUIREMENTS FOR DEVELOPMENT EXPERIENCE DOCUMENTS (JAN 2004) . 35

F.13 EVALUATIONS

SECTION G – CONTRACT ADMINISTRATION DATA

G.1 ADMINISTRATIVE CONTRACTING OFFICE

G.2 CONTRACTING OFFICER

G.3 CONTRACTING OFFICER’S REPRESENTATIVE

G.4 TECHNICAL DIRECTIONS/RELATIONSHIP WITH USAID

G.5 ACCEPTANCE AND APPROVAL

G.6 PAYING OFFICE

G.7 AIDAR 752.7003 DOCUMENTATION FOR PAYMENT (NOV 1998)

G.8 ACCOUNTING AND APPROPRIATION DATA

SECTION H – SPECIAL CONTRACT REQUIREMENTS

H.1 AUTHORIZED GEOGRAPHIC CODE

H.2 TITLE TO PROPERTY

H.3 REQUESTS FOR CONSENT TO SUBCONTRACT

H.4 752.227‐14 RIGHTS IN DATA – GENERAL (OCT 2007)

H.5 CONFIDENTIALITY AND OWNERSHIP OF INTELLECTUAL PROPERTY

H.6 PRESS RELATIONS

H.7 ENVIRONMENTAL COMPLIANCE

H.8 52.217‐9 OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 2000)

SECTION I – CONTRACT CLAUSES

I.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

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

I.3 FAR 52.227‐23 RIGHTS TO PROPOSAL DATA (TECHNICAL) (JUN 1987)

I.4 AIDAR 752.7007 PERSONNEL COMPENSATION (July 2007)

I.5 ADDITIONAL REQUIREMENTS FOR PERSONNEL COMPENSATION

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

I.7 AIDAR 752.228‐70 MEDICAL EVACUATION (MEDEVAC) SERVICES (JULY 2007)

I.8 AUTHORIZED WORK DAY/WEEK

I.9 LANGUAGE REQUIREMENTS

I.10 AIDAR 752.7025 APPROVALS (APR 1984)

I.11 AIDAR 752.7032 INTERNATIONAL TRAVEL APPROVAL AND NOTIFICATION REQUIREMENTS (JAN 1990)

I.12 BUSINESS CLASS TRAVEL

I.13 CONTRACTOR’S USE OF PROJECT VEHICLES AND LIABILITY INSURANCE REQUIREMENTS FOR PRIVATELY

OWNED VEHICLES

I.14 GOVERNMENT FURNISHED FACILITIES OR PROPERTY

I.15 AIDAR 752.245‐71 TITLE TO AND CARE OF PROPERTY (APR 1984)

I.16 APPROVALS FOR NONEXPENDABLE PROPERTY PURCHASES

I.17 AIDAR 752.227‐14 RIGHTS IN DATA – GENERAL (OCT 2007)

I.18 AIDAR 752.231‐71 SALARY SUPPLEMENTS FOR HG EMPLOYEES (OCT 1998)

I.19 FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL CONFERENCES (JAN 2002)

I.20 VALUE ADDED TAX (VAT) AND CUSTOM DUTIES

I.21 REPORTING ON FOREIGN TAXES (JULY 2007)

I.22 INSURANCE AND SERVICES

I.23 CONFLICTS OF INTEREST

I.24 FAR 52.203‐13 CONTRACTOR CODE OF BUSINESS ETHICS AND CONDUCT (APR 2010)

I.25 302.3.5.9 NONDISCRIMINATION (JUN 2012)

I.26 USAID DISABILITY POLICY ‐ ACQUISITION (DEC 2004)

I.27 EXECUTIVE ORDER ON TERRORISM FINANCING

I.28 FAR 52.222‐50 COMBATING TRAFFICKING IN PERSONS (FEB 2009) Alt. I (AUG 2007) I.29 302.3.5.13 PERSONAL IDENTITY VERIFICATION OF CONTRACTOR PERSONNEL (JULY 2007)

I.30 AIDAR 752.7101 VOLUNTARY POPULATION PLANNING ACTIVITIES (JUNE 2008)

I.31 FAR 52.209‐9 UPDATES OF PUBLICLY AVAILABLE INFORMATION REGARDING RESPONSIBILITY MATTERS (FEB

2012)

I.32 DISCLOSURE OF INFORMATION

I.33 FAR 52.232 PROVIDING ACCELERATED PAYMENT TO SMALL BUSINESS SUBCONTRACTORS (DEVIATION)

(AUG 2012)

SECTION J – LIST OF DOCUMENTS EXHIBITS AND OTHER ATTACHEMENTS

SECTION K – REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFERORS OR

RESPONDENTS

K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

K.2 FAR 52.204‐8 ANNUAL REPRESENTATIONS AND CERTIFICATIONS (FEB 2012)

K.3 AIDAR 752.226‐01 DISADVANTAGED ENTERPRISE REPRESENTATION (APR 1991)

K.4 FAR 52.227‐38 COMPLIANCE WITH VETERANS EMPLOYMENT REPORTING REQUIREMENTS (SEP 2010)

K.5 INSURANCE ‐ IMMUNITY FROM TORT LIABILITY

K.6 FAR 52.209‐7 INFORMATION REGARDING RESPONSIBILITY MATTERS (FEB 2012)

K.7 AGREEMENT ON, OR EXCEPTIONS TO, TERMS AND CONDITIONS

K.8 SIGNATURE

SECTION L ‐ INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS

L.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

L.2 52.252‐1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE (FEB 1998)

L.3 FAR 52.215‐1 INSTRUCTIONS TO OFFERORS‐COMPETITIVE ACQUISITION (JAN 2004)

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

L.5 ADDITIONAL INSTRUCTIONS TO OFFERORS

L.6 OFFER EXPIRATION DATE

L.7 GOVERNMENT OBLIGATION

L.8 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL

L.9 COST PROPOSALS

L.10 INSTRUCTIONS FOR THE PREPARATION OF BRANDING IMPLEMENTATION AND MARKING PLANS

L.11 DATA UNIVERSAL NUMBERING SYSTEM (DUNS) NUMBER

SECTION M – EVALUATION FACTORS FOR AWARD

M.1 GENERAL INFORMATION

M.2 TECHNICAL PROPOSAL EVALUATION CRITERIA

M.3 COST PROPOSAL EVALUATION

M.4 AWARD

ATTACHMENTS

ATTACHMENT J.1 LOCAL COMPENSATION POSITION DESCRIPTION GUIDELINES

ATTACHMENT J.2 BRANDING STRATEGY AND MARKING PLAN FORMAT

ATTACHMENT J.3 USAID FORM 1420‐17 CONTRACTOR EMPLOYEE BIOGRAPHICAL DATA SHEET

ATTACHMENT J.4 SF‐294 SUBCONTRACTING REPORT FOR INDIVIDUAL CONTRACT

ATTACHMENT J.5 SF‐295 SUMMARY SUBCONTRACT REPORT

ATTACHMENT J.6 RESULTS FRAMEWORK

PART I – THE SCHEDULE

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

The purpose of this contract is to obtain services to support USAID’s Trade Related Assistance for Development (TRADE) project. The Contractor shall work towards to support the Government of the Philippines (GPH) in its efforts to implement trade and investment‐related reforms with the objective of attaining higher levels of trade and foreign direct investment. TRADE will support measures to advance the country’s commitments under the Association for Southeast Asian Nations (ASEAN) Economic Community (AEC) Blueprint, which outlines concrete targets for establishing a single market and production base in the ASEAN region by 2015. TRADE will also support trade and investment‐related policy reforms needed to improve Philippine readiness to join other free trade agreements such as the Trans‐Pacific Partnership (TPP) agreement.

B.2 CONTRACT TYPE

This is a cost plus fixed fee completion type contract. For the consideration set forth in the contract, the Contractor shall provide the deliverables or outputs described in Sections, C, D and F and otherwise comply with all contract requirements.

B.3 DEVELOPMENT FOCUSED BUDGET AND CEILINGS

The Total Estimated Cost of the Base Period of the Contract is estimated at $_________. The Fixed Fee for the Base Period is $_________. The Total Estimated Cost plus Fixed Fee for the Base Period is $____________. The Total Estimated Cost of the one‐year option period is $_____________. The Fixed Fee of the option period is $ _________. The combined Total Estimated Cost plus Fixed Fee for the option period is $____________ as further detailed below.

Development‐Focused Budget Line Items by Program Results

Base Period (Year 1‐4)

Option Period (Year 5)

Total Base plus Option

Component 1. Policy and Institutional Environment for Trade and Investment Improved Intermediate Result 1.1. Trade and Investment Increased Sub Intermediate Result 1.1.1. Economic Competitiveness Enhanced Estimated Costs Fixed Fee (__%) Total Cost Plus Fees Component 2. Trade Facilitation Improved Intermediate Result 1.1. Trade and Investment Increased Sub Intermediate Result 1.1.1. Economic Competitiveness Enhanced Estimated Costs Fixed Fee (__%) Total Cost Plus Fees Component 3. Competition Environment Improved Intermediate Result 1.1. Trade and Investment Improved Sub Intermediate Result 1.1.1. Economic Competitiveness Enhanced Estimated Costs

Development‐Focused Budget Line Items by Program Results

Base Period (Year 1‐4)

Option Period (Year 5)

Total Base plus Option

Fixed Fee (__%) Total Cost Plus Fees Component 4. Outreach and Advocacy Activities in Support of the GPH’s Trade Agenda Enhanced Intermediate Result 1.1. Trade and Investment Improved Sub Intermediate Result 1.1.1. Economic Competitiveness Enhanced Estimated Costs Fixed Fee (__%) Total Cost Plus Fees

TOTAL ESTIMATED COST

TOTAL FIXED FEE

TOTAL ESTIMATED COST PLUS FEE (CEILING)

B.4 PAYMENT OF FIXED FEE

USAID paying office ordinarily pays the Contractor a percentage of fixed fee that directly corresponds to the percentage of allowable costs being paid. Two exceptions to paying fixed fee in this manner apply:

(a) If the CO determines that this method results in paying a disproportionately higher ratio of fixed fee than the percentage of work that the Contractor has completed, then the CO may suspend further payment of any fixed fee until the Contractor has made sufficient progress to justify further payment, up to the agreed percentage.

(b) The clauses entitled “Allowable Cost and Payment” (FAR 52.216‐7) and “Fixed Fee” (FAR 52.216‐8) are incorporated into this contract. The terms and conditions of these clauses apply after total payments of fixed fee reach eighty‐five percent (85%) of the total fixed fee.

B.5 COST REIMBURSABLE

The U.S. dollar costs allowable shall be limited to reasonable, allocable, allowable and necessary costs determined in accordance with FAR 52.216‐7, Allowable Cost and Payment, FAR 52.216‐8, Fixed Fee, , and AIDAR 752.7003, Documentation for Payment.”

B.6 INDIRECT COSTS

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

Description Rate Base Type Period 1/ 1/ 1/ 2/ 2/ 2/ 3/ 3/ 3/

1/Base of Application:

Type of Rate:

Period:

Source:

2/Base of Application:

3/Base of Application:

[To be filled in at award]

Note: The Contractor is allowed to recover applicable indirect costs (i.e., overhead, G&A, etc.) on other direct costs (ODCs), if it is part of the Contractor’s usual accounting procedures, consistent with FAR Part 31, and Negotiated Indirect Cost Rate Agreement (NICRA). Indirect costs shall not be allowed for local organizations. All costs for local organizations shall be budgeted and billed as direct costs.

B.7 CEILING ON INDIRECT COST RATES AND FINAL REIMBURSEMENT FOR INDIRECT COSTS

(a) Reimbursement for allowable indirect costs shall be at final negotiated rates but not in excess of the following ceiling rates:

Description Rate Base Type Period

TBD TBD 1/ 1/ 1/

TBD TBD 2/ 2/ 2/

[to be filled in at award]

(b) The contractor shall make no changes in its established method of classifying or allocating indirect costs without the prior written approval of the contracting officer.

(c) USAID is not obligated to pay any additional amount on account of indirect costs above the ceiling rates established in the contract.

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

B.8 FUNDING

The amount currently obligated and available for reimbursement of costs and fixed fee is $_________. This amount is anticipated to be sufficient through _________.

The Contractor shall not exceed this amount unless authorized by the Contracting Officer. pursuant to the clause of this contract entitled Limitation of Funds (FAR 52.232‐22). The Contractor shall comply with the notice requirements of FAR Clauses entitled "Limitation of Funds" (FAR 52.232‐22) and "Limitation of Cost" (FAR 52.232.20).

END OF SECTION B

SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 TITLE

The contract will be entitled “Trade‐Related Assistance for Development” or “TRADE”.

C.2 OBJECTIVE

The goal of the broader PFG bilateral engagement is to shift the Philippines from a low growth path to a higher, sustained and more inclusive growth on par with other high‐performing emerging economies.

The TRADE Project is intended to contribute to higher growth by supporting reform measures to advance the country’s commitments under the Association for Southeast Asian Nations (ASEAN) Economic Community (AEC) Blueprint, which outlines concrete targets for establishing a single market and production base in the ASEAN region by 2015 and improve Philippine readiness to join other free trade agreements such as the Trans‐Pacific Partnership (TPP) agreement. To fulfill this goal, TRADE will pursue the following desired results:

Satisfactory compliance with the country’s commitments under the AEC Blueprint;

Improved readiness of the Philippines to enter as a negotiating party to the TPP agreement;

Satisfactory compliance under WTO obligations and other preferential trade arrangements;

Exports of goods and services as a percentage of GDP improved;

Foreign direct investment (net inflows) improved;

Trade‐related employment increased ;

Higher ranking (and on par with regional neighbors) in the Trading Across Borders indicator of the World Bank’s Doing Business index;

Higher ranking (and on par with regional neighbors) in the Good Markets Efficiency category of the World Economic Forum’s Global Competitiveness Index;1

Higher ranking (and on par with regional neighbors) in the trade and investment freedom indicators under the Open Markets category of the Heritage Foundation’s Index of Economic Freedom; and

Improvement in the World Bank’s Logistics Performance Index (efficiency of the clearance process by customs).

Improvement in the WEF’s Global Enabling Trade Index (particularly for the market access, border administration and business environment sub‐index)

TRADE will address trade and investment from three different angles: enhancing the policy and institutional environment for trade and investment; improving trade facilitation; strengthening the environment for competition; and supporting advocacy and outreach activities that advance GPH’s trade policy agenda. TRADE will support the GPH efforts to comply with its commitments in the ASEAN Economic Community blueprint and other bilateral and multilateral trade agreements, including improving its readiness to join the Trans‐Pacific Partnership agreement.

1 i.e. intensity of local competition, effectiveness of anti‐monopoly policy, prevalence of trade barriers, trade tariffs, prevalence of foreign ownership, and burden of customs procedures indicators.

C.3 BACKGROUND

The Contractor2 will provide technical assistance, training, and other services to economic agencies of the Government of the Philippines (GPH) and the private sector. The contract will be the primary implementing mechanism for USAID’s “Trade‐Related Assistance for Development” or “TRADE”. This Project has been jointly agreed with the GPH through the “Partnership for Growth” (PFG)3, an enhanced engagement of the GPH and the United States Government (USG) that focuses on addressing the binding constraints to economic growth in the Philippines.4

USAID/Philippines and the PFG

The PFG constitutes a new framework for deepening and strengthening USG engagement with the GPH.5 Through the PFG, fifteen USG agencies will provide assistance and non‐assistance resources in the next five years achieve the goal of assisting the Philippines shift from a low growth path to a higher, sustained and more inclusive growth on par with other high‐performing emerging economies. The PFG Joint Country Action Plan summarizes the goal, objectives and scope of the enhanced engagement.6

USAID will substantially contribute to the PFG goal with several implementing mechanisms, of which TRADE will focus on improving regulatory quality.7 The Project is intended to contribute to inclusive growth by advancing trade and investment reform in line with bilateral, regional and multilateral agreements; facilitating trade; improving the environment for competition; and supporting outreach and advocacy efforts in order to attain higher levels of investment and trade. Other related PFG support facilities of USAID will provide technical assistance in reducing corruption, enhancing judicial efficiency and widening the fiscal space. Thus, the Contractor will have considerable interaction and coordination with implementers of other parts of the PFG, including not only counterpart GPH agencies, but also implementers of the other USAID projects and other USG agencies participating in the PFG. TRADE’s project‐level results framework is presented in Section C.4, “Expected Results”.

Other related PFG implementers

On the USG side, the PFG involves several US agencies at post, as well as implementers of three other USAID projects that are part of PFG:

2 The term “Contractor” refers to both the Offeror and prospective implementer of TRADE.

3 Partnership for Growth (PFG) is a signature inter‐agency effort of President Barack Obama’s Presidential Policy Directive on Global Development, which advances economic growth in countries committed to good governance. PFG will provide USG assistance and non‐assistance resources over the next five years to assist the Philippines overcome binding constraints to investment expansion and capital formation for increased employment and higher incomes. For more information on PFG, visit http://www.state.gov/r/pa/prs/ps/2011/11/177225.htm and http://philippines.usaid.gov/newsroom/launch‐partnership‐ growth‐philippines‐2011‐2016.

4 PFG constraints analysis on the Philippines identifies narrow fiscal space, poor regulatory quality, judicial inefficiency and corruption as the binding constraints to growth.

5 The PFG goal will not be pursued in a vacuum. As recommended in USAID’s Strategy for Global Development, integrated problem solving will be essential in implementing the USAID/Philippines Country Strategy. This means acknowledging that human and natural resources are key to achieving economic growth – the health and skills of people must be enhanced and resources must be sustainably managed. Health, education and the environment are sectors where USAID has already made significant investments that can be built upon to achieve increasingly important, and sustainable, results.

6 See http://philippines.usaid.gov/sites/all/themes/sample/docs/Philippines‐PFG‐JCAP_public‐final_11‐29‐11.pdf.

7 The others deal with the anti‐corruption, judicial efficiency, and fiscal management.

US Department of State

US Trade Representative Office

US Department of Commerce;

US Federal Trade Commission;

Implementers of prospective, related USAID projects.

Independent of this contract, USAID also expects to be making several multi‐year grants to Philippine civil society and business organizations to promote business start‐ups and incubators.

GPH development priorities and economic reform initiatives

Both the PFG and TRADE are aligned with the goals of the 2011‐2016 Philippine Development Plan (PDP) of improving the country’s national competitiveness by, among others, increasing productivity and efficiency in the key sectors of the economy. In particular, the project will support the implementation of related priority policy and institutional reforms outlined in the 10‐point Agenda of the PDP Strategic Framework for Industry and Services that aim to increase productivity and efficiency and increase exports and investments.

Problem statement

The Philippines is closely integrated with the rest of the world economy through trade not only in commodities, but also in services and investment. Exports of goods and services comprise about 35% of GDP in 2010, according to World Bank data. The composition of Philippine exports is highly concentrated. About 53% of total exports or about 62% of merchandise exports come from electronics and about 9% from motor vehicle parts and mineral products. Other major exports include apparel and clothing accessories, coconut oil, woodcrafts and furniture. These exports are largely intermediate goods and raw materials containing little value‐added that go to export destinations where they are assembled as finished goods for re‐export to consumer markets. About 75% of total merchandise exports are for re‐export to overseas consumer markets. Philippines major exports partners are United States, Singapore, Japan, China and Hong Kong.

Philippine trade performance has been lackluster. From 2001‐2010, growth of Philippine merchandise trade was sluggish at an average rate of 6 % while other ASEAN countries enjoyed double‐digit average growth rates. Total Philippine merchandise trade in 2010 amounted to about $51.5 billion, comprising only 5% of total ASEAN merchandise trade and well behind the export performance of Indonesia, Malaysia, Thailand and Vietnam. The Philippines also perennially suffers from trade deficits, registering about $3.27 billion in 2010. Services trade is more robust with exports growing about 20% in 2010, amounting to $13.2 billion.

The Philippine government recognizes that trade is an important element of its overall development plan. The government is seeking to diversify its main exports outside of electronics and increase the competitiveness and markets access for other goods. The 2011‐2016 Philippine Development Plan states that the government will “pursue market access through effective bilateral, multilateral, and regional engagements and representation, and maximize opportunities offered by existing trade agreements”. The 2011‐2013 Philippine Export Development Plan (PEDP) aims to increase export of merchandise goods and services by 40% from 2010 levels to reach a projected $120 billion by 2016. The PEDP targets 10 key export sectors comprising 87% of current exports including electronics, agribusiness, minerals, shipbuilding, motor vehicle parts, garments and textiles, information communication technology (ICT)‐related services, homestyle products, and wearables.

The main trade venues for the Philippines are the World Trade Organization (WTO) multilateral forum, the Association of Southeast Asian Nations (ASEAN) forum, and bilateral negotiations. The Philippines acceded to the WTO in 1995 and abides by the rules and disciplines concerning international trade. The GPH fully supports the Doha Development Agenda (DDA), which promotes the role of the multilateral trading system as a major contribution to economic growth and development. The GPH is an active participant in the WTO’s current DDA round of multilateral trade negotiations. The Philippines is an active participant in all negotiations and meetings under ASEAN and the Asia Pacific Economic Cooperation. Through the ASEAN, the GPH takes part in preferential trading arrangements with China, South Korea, India, Japan, and other countries. These preferential arrangements include tariff reductions, agreements on services trade and investment rules, and technology transfers. Through these various trade arrangements, the Philippines made substantial commitments on market access and at the same time continued to consolidate the liberalization program under the Tariff Reform Program, undertaken unilaterally since the 1980s. As the country deepens its engagement in these various trade arrangements, further reforms will need to be undertaken to ensure that the GPH trade and investment regime is consistent with its international commitments and follow internationally accepted standards.

In 2007, the Philippines committed to carrying out the AEC Blueprint, which aims to transform ASEAN into a single market and production base by 2015. This ASEAN roadmap envisions the freer flow of goods, services, investment and capital, and skilled labor within the region. Actions under the AEC Blueprint commit the Philippines to wide‐ranging reforms to promote trade facilitation, such as removing intra‐ASEAN import duties; enhancing transparency of non‐tariff measures; simplifying customs and other certification procedures; fully implementing its National Single Window system and harmonized customs procedures and formalities in line with international standards and best practices;

promoting transparency in the development and application of standards, technical regulations and conformity assessment procedures; introducing measures to open up the services sector and allow the local practice of professions to ASEAN nationals; and streamlining/simplifying procedures for investment applications and approvals. These GPH commitments will require assistance to implement effectively.

The Aquino administration also expressed its desire to join the Trans‐Pacific Partnership Agreement (TPP). Also known as the Trans‐Pacific Strategic Economic Partnership Agreement, the TPP aims to integrate the economies of the Asia‐Pacific region. Viewed as a potential building block to a larger Free Trade Area of the Asia Pacific, the TPP provides a strong vehicle for U.S. trade engagement with the rest of Asia. For the Philippines, a number of reforms need to be instituted to prepare for the TPP. As a first step, the GPH and USG recently signed the Trade Facilitation Protocol on the margins of the APEC forum in Honolulu last November 2011. This agreement calls for both governments to expedite the movement, release, and clearance of goods in order to facilitate trade between the two countries. Relatedly, the GPH recently acceded to the World Customs’ Organization (WCO) Revised Kyoto Convention (RKC) which seeks to standardize and harmonize customs policies and procedures according to WCO standards. The GPH seeks to introduce a new Customs and Tariff Modernization Act (CTMA) to comply with the RKC.

Philippine participation in these trade agreements will entail domestic policy and regulatory changes as well as create demands on the administrative capacity of the bureaucracy. Commitments to the AEC Blueprint, TPP eligibility, and the resolution of issues related to the on‐going WTO Doha round negotiations all set out an agenda for trade policy reform, the formulation of negotiation positions, and for capacity‐building of trade‐related agencies of the Philippine government. These complex and wide‐ ranging agreements will require reviews, revisions, and restructuring of existing national rules and regulations to ensure their conformance to the country’s trade commitments. As with any changes to existing regimes, there are winners and losers; and efforts to compensate the losers greatly strengthen coalitions for continued reforms. To this end, the GPH will need to study and analyze not only how these agreements can expand Philippine exports but also to assess the cost of domestic adjustment. The government will need to formulate the appropriate industrial strategies and adjustment measures to respond to these developments. Finally, the GPH will need to improve its institutional capacity and build its trade adjustment capabilities to respond to the demands of these preferential and multilateral agreements and to ensure smooth transition and implementation of its trade program.

Prior USAID/Philippines assistance

Past and current USAID assistance has been directed at addressing constraints to trade and investment and promoting greater competition as part of its overall goal of “accelerating growth through improved competitiveness” in the Philippines. It supported direct activities and indirect advocacy efforts that improve the governance of the investment climate at both the national and subnational levels. USAID resources focused on improving the business environment, removing barriers to public and private investment, and reducing cost and policy constraints to trade.

The Accelerating Growth, Investment and Liberalization with Equity (AGILE)/ Economic Governance Technical Assistance (EGTA) Project (1998‐2004) Project helped liberalized and increased competition in telecommunications, air transport, banking, and distribution services. The Targeted Interventions in Economic Reform and Governance (TIERG) Program (2004‐2008) that implemented the Economic Modernization through Efficient Reforms and Governance Enhancement (EMERGE), Economic Policy Reform and Advocacy (EPRA), and Partnership and Advocacy for Competitiveness and Trade (PACT) projects advanced economic reform in domestic and international trade, investment and private sector development, competitive structure; and sustainable fiscal management. The Policy Reform Project (2006‐2008) helped address the lack of competition and poor infrastructure as in maritime and air transport as well as interventions on land titling and property rights.

More recently, USG supported efforts to improve the business and investment climate under the Local Implementation of National Competitiveness for Economic Growth (LINC‐EG) project (2008‐2011). LINC‐ EG’s overall objective has been “to promote local and national economic competitiveness to improve prospects for economic growth and fiscal sustainability.” The LINC‐EG project focused on building competitiveness by improving local and national government economic governance and revenue collection; the local field office effectiveness of national government agencies; and the operations, policy, and program implementation linkages between local government offices, local field offices of national government agencies, and national government agencies in such areas as tax administration, customs, land administration, and business permit and licensing.

The Economic Growth Hubs (2009‐2012) project implemented by the Asia Foundation sought to improve building competitiveness with the better provision of infrastructure, transport linkages, and logistics. It will also seeking to streamline the process of obtaining urban land titles so as that will improve access to credit through the provision of bankable titles as collateral. It also focuses on promoting infrastructure development through a transparent and competitive Public‐Private Partnerships and a more transparent and accountable public budget process. The project also seeks to lower logistics costs by expanding domestic inter‐island maritime transport through Roll‐On, Roll‐Off

(RO‐RO) systems and establishing regional RORO linkages connecting the Philippines to the rest of ASEAN. It supports the development of Tourism Enterprise Zones and Hubs and promotes expanded air access and air transport liberalization through the Philippine government’s Open Skies policy.

C.4 STATEMENT OF WORK

Expected outcomes and indicators

The goal of the Trade‐Related Assistance for Development (TRADE) Project is to assist the Philippines attain higher levels of trade, investment, and employment by supporting GPH’s efforts to comply with its commitments in the ASEAN Economic Community blueprint and other bilateral and multilateral trade agreements, including improving its readiness to join the Trans‐Pacific Partnership agreement. USAID will support measures that advance trade and investment reform in line with bilateral, regional and multilateral agreements; facilitate trade; improve the environment for competition; and support outreach and advocacy efforts that advance the GPH’s trade agenda (see section C.2 for an elaboration).

The performance of TRADE will be measured at various levels (impact and outcome); achievement of these desired results will be measured by a minimum set of corresponding indicators:

(a) Desired impact: Trade and investment increased

Indicator 1: Exports of goods and services as a percentage of GDP improved;

Indicator 2: Foreign direct investment, net inflows improved;

(b) Desired outcome 1: Policy and Institutional Environment for Trade and Investment Improved

Indicator 1: Compliance with AEC blueprint commitments by 2015;

Indicator 2: Compliance with WTO commitments;

Indicator 3: Improved readiness to enter the Trans‐Pacific Partnership agreement;

Indicator 4: Improved overall ranking in major international competitiveness rankings

(c) Desired outcome 2: Trade facilitation improved

Indicator 1: Improved compliance with Revised Kyoto Convention commitments;

Indicator 2: Higher ranking (and on par with regional neighbors) in the Trading Across Borders indicator of the World Bank’s Doing Business index;

Indicator 3: Improvement in the World Bank’s Logistics Performance Index (efficiency of the clearance process by customs);

Indicator 4: Improvement in the WEF’s Global Enabling index border administration sub‐index

(d) Desired outcome 3: Competition environment enhanced

Indicator 1: Higher ranking (and on par with regional neighbors) in the Good Markets Efficiency category of the World Economic Forum’s Global Competitiveness Index;

Indicator 2: Higher ranking (and on par with regional neighbors) in the trade and investment freedom indicators under the Open Markets category of the Heritage Foundation’s Index of Economic Freedom

(e) Desired outcome 4: Outreach and Advocacy Activities in Support of the GPH’s Trade Agenda Enhanced

Indicator 1: Support for trade liberalization and market opening measures increased (as measured by national surveys);

Indicator 2: Independent capacity for trade analysis increased and strengthened

It can be noted from the listing above that some components contribute to the same indicators/targets.

There are indicators that are highly specific (e.g. indicator 1 of desired impact). The TRADE results framework is presented in Annex J.6.

The Contractor, under USAID supervision, will formulate and adopt a strategic framework that identifies priority activities necessary to achieve planned objectives and outcomes in the most cost‐effective manner. The strategic framework should identify challenges and opportunities, both internal and domestic, which can influence the probability of success in achieving the results of TRADE. USAID recognizes the need for flexibility and creativity in the Contractor’s approach to achieve meaningful and sustainable results. Use of innovation is highly encouraged.

Components and GPH counterparts

It is envisioned that TRADE will identify and support legal/policy changes that are necessary to AEC compliance and TPP readiness, facilitate trade, improve the environment for competition; and strengthen the outreach and advocacy efforts in support of the GPH’s trade agenda.

Under the technical direction of COR, the Contractor will work with the GPH counterparts and stakeholders relevant to each component and deliverable to achieve the desired results. The contractor is expected to interface with a diverse group of public, private sector, and civil society organizations.

The primary GPH counterparts for the program will include:

Department of Trade and Industry (DTI);

National Economic and Development Authority (NEDA);

Department of Finance (DOF)

Bureau of Customs (BOC)

Department of Justice’s Office of Competition and other regulatory agencies

National Competitiveness Council (NCC); and

Other relevant trade‐related agencies.

The Contractor is expected to closely coordinate with the PFG Joint steering committee and related technical working groups. The contractor is also expected to closely coordinate with other USAID‐ funded projects, including the INVEST and COMPETE projects, as well as other PFG‐related programs under the rule of law, anti‐corruption, and fiscal space. Project activities may be implemented in cities selected under USAID’s Cities Development Initiative (CDI). In addition, the Contractor must coordinate and collaborate with other activities within USAID/Philippines; other offices in the US Mission (including the Economic section, the US Foreign Commercial Service, and the US Foreign Agricultural Service); and other USG partners (U.S. Dept. of State, US Department of Commerce, US Trade Representative Office, among others) to ensure synergies and complementarity of agency objectives.

Likewise, the Contractor shall assist USAID and the GPH in collaborating with bilateral and multilateral donors through the Philippine Development Forum (PDF) including the Asian Development Bank, World Bank, International Finance Corporation, Japan International Cooperation Agency, the European Commission delegation, and other donors in similar activities. Collaboration with other USAID activities, USG partners and other donors is important in ensuring the optimal use of funds, in avoiding duplication of efforts, and in complementing donor activities to reach similar objectives. Coordination may entail participation in working group meetings as well as formal and informal information exchange with other bilateral and multilateral organizations. The project’s five year time‐horizon heightens the importance of leveraging donor coordination to maximize results.

Detailed Work Requirements

The TRADE project will support measures that enable the GPH pursue a trade agenda that contributes to higher levels of outward‐bound trade and inward‐bound investments. The project will support regulatory, legal and policy reforms that enable the Philippines to meet and implement its obligations under these various trade arrangements. It will seek to strengthen the government’s capacity and institutional environment to meet internationally accepted standards. The project may also strengthen private sector and other stakeholder participation in trade policy discussions. TRADE will seek improvements in areas such as trade in goods, services trade, investment, intellectual property rights, standards conformance, government procurement, competition policy, and other such relevant features of a free trade arrangement. Technical assistance provided under the Program will focus on identifying and addressing:

Policy reforms to implement binding commitments under the AEC Blueprint, advance the country’s eligibility in TPP, and meet its WTO and WCO‐RKC obligations;

Trade analysis and strategy formulation of proposed adjustment measures and reforms; and

Gaps in institutional and administrative capacity of the government and other major stakeholders in undertaking trade enabling measures.

The tasks of the Contractor are listed below by project component.

While the primary focus of Contractor efforts is on improving competitiveness to increase trade and investment, the four project components are intended to be mutually reinforcing and should be managed in an integrated manner. The Contractor is expected to propose an overall strategy with corresponding activities for achieving the goal of PFG, particularly the objectives of TRADE. The Contractor must also propose intermediate results/outcomes in achieving the TRADE objectives, including indicators to track the achievement of such intermediate targets.

COMPONENT 1: Policy and Institutional Environment for Trade and Investment Improved

This component will assist the GPH in identifying, assessing, adopting, and implementing reform initiatives necessary to comply with its commitments under the AEC Blueprint and advance the country’s TPP readiness. In consultation with the private sector, the TRADE Project will support measures aimed at strengthening institutional public and private capacity, processes in trade policy formulation and implementation. For this component, the Contractor must address the following issues:

• Market access issues for agriculture and non‐agricultural products;

• Non‐tariff barriers, standards conformance, and other technical barriers to trade;

• Cross‐border trade in services including issues related to investment, financial services and telecommunications; and

• Standards related to intellectual property rights, government procurement, labor and environment.

Focused on boosting trade and investments, this component must include the following tasks:

TASK 1: Implement discrete priority activities to directly assist the Philippines meet its commitments under the AEC Blueprint and advance the country’s TPP readiness.

Pursue actions that improve the Philippines’ performance in the AEC Blueprint scorecard. Support GPH in formulating and advancing a TPP accession agenda. Changes in the legal and regulatory regime are needed to improve the country’s readiness to participate in the TPP negotiations. Domestic reforms addressing trade impediments would have to be instituted to prepare for the trade agreement.

Likewise, several administrative and policy adjustments are needed to fulfill the country’s AEC commitments. The objective of the Philippine government is to meet its AEC commitments by 2015 and be ready to enter TPP negotiations in the next 2‐3 years.

TASK 2: Strengthen the institutional capacity of trade‐related agencies.

The broad agenda presented under the AEC and TPP requires the participation and coordination of several agencies of government. Presently, there are several inter‐agency bodies tasked to develop and carry out trade policy, including the Trade‐Related Matters working group, among others. Fulfillment of AEC commitments and advancing TPP readiness will require coordinated institutional responses to undertake trade and investment‐related adjustment measures. There is also need to improve statistical and other information databases as well as knowledge management of trade policy informational resources. The availability of skilled trade negotiators and personnel trained in trade law and dispute settlement is likewise limited.

COMPONENT 2: Trade Facilitation Improved

This component will support the Bureau of Customs and other border‐control agencies adopt and implement trade facilitation measures. The Contractor is required to provide the following assistance:

TASK 3: Support customs modernization and trade facilitation measures laid down under the GPH’s obligations under the WCO’s RKC and the Philippine‐US Trade Facilitation Protocol.

After acceding to the WCO’s Revised Kyoto Convention, the Philippine government committed to reform all its customs laws, policies and processes in line with internationally accepted standards laid down by the protocol. As part of this process, the government introduced legislation through the Customs and Tariff Modernization Act (CTMA) as a first step in compliance with RKC provisions. Upon passage of the CTMA, the Bureau of Customs will commit to its effective implementation including promoting transparency of all customs laws, regulations and administrative ordinances. The law will also improve customs regulations, procedures and techniques in risk management, transaction value, selectivity system, and post‐entry audit. The Philippines also committed to improve trade facilitation measures under the US‐Philippine Trade Facilitation protocol.

TASK 4: Support the full implementation of the NSW and its links to the ASEAN Single Window.

Under the AEC, the Philippines committed to fully implement the National Single Window connecting various border control agencies and promoting effective use of automated systems and other electronic means that expedite the release of goods, and connecting this national system with the ASEAN Single Window by 2015. The single window concept is intended to lower the percentage of goods subject to manual inspections, expedite export and import clearances, and improve compliance rates. The effective implementation of the NSW will require coordination and process changes within and among various government agencies.

COMPONENT 3: Competition Environment Improved

Competition policy is a major feature of the AEC Blueprint and the TPP agreement. Fostering competition in key sectors, particularly where monopolies and oligopolistic market power thrives, remains crucial to improving the investment climate. High concentration of ownership, along with cross‐ ownership, in several industries inhibits effective competition, innovation, and dynamism in the domestic economy. This component will complement the US Federal Trade Commission’s (FTC) and US Department of Justice’s assistance to the Department of Justice and other regulatory agencies in the run up to the competition law. The Contractor is responsible for achieving the following:

TASK 5: Support actions that conforms the legal framework for competition to international norms.

The GPH has made the enactment of a new Anti‐Trust/Competition Law a legislative priority. By executive action, the Aquino administration has created a precursor Office of Competition in the Department of Justice (DOJ). The new law promises to establish, fund, and empower a Fair Competition Authority to penalize anti‐competitive agreements, the abuse of dominant power, and anti‐competitive mergers. This draft law should conform to the recommended best practices of the International Competition Network, particularly in the definition of offense or injury and the statutory remedies and penalties for unlawful conduct. How this competition authority relates to other regulatory agencies and their respective mandates needs to be defined and clarified. The GPH will need to define their respective responsibilities and functions of these other regulatory authorities.

TASK 6:…