FBO_-_PhilAm_Fund_RFP.pdf

RFP Issuance Date: January 18, 2013 RFP Closing Date: February 25, 2013 RFP Closing Time: 5:00pm, Manila Time

Pre-Proposal Conference: February 6, 2013

Questions closing date: February 8, 2013 Questions closing time: 11:00pm, Manila Time

SUBJECT: Request for Proposal (RFP) No. SOL-492-13-000005

The Philippine American (Phil-Am) Fund

Dear Prospective Offerors:

The United States Government, represented by the U.S. Agency for International Development (USAID) Mission to the Philippines, is soliciting proposals from qualified local organizations interested in providing the services detailed in the attached RFP for a project that will be administered by USAID’s Office of Economic Development and Governance (OEDG).

This procurement is being conducted through full and open competition among Philippine organizations only, for which the procedures for “contracting by negotiation, trade-off process” method of procurement, as described in Part 15 of the Federal Acquisition Regulation (FAR), will apply.

Proposals will be accepted from Philippine private, for-profit and non-profit organizations, non-governmental organizations (NGOs) including universities, research organizations, professional associations, and other relevant special interest associations. Faith-based and community organizations are also eligible to participate. In support of USAID’s interest in expanding the number and sustainability of development partners, USAID encourages proposals from potential new local partners.

USAID/Philippines plans to award a Cost-Plus-Fixed-Fee (CPFF) completion type contract. The maximum estimated amount of the contract (costs and fee) is US$ 24million covering a performance period of five years. Offerors must propose costs that they believe are appropriate, realistic and reasonable for the work. Cost proposals will be evaluated as part of the Best-Value procedure in determining contract award, including cost effectiveness of approaches to achieve the desired results.

This solicitation consists of this cover letter and the attached RFP. All Offerors are cautioned to carefully review this cover letter and the contents of the RFP.

Issuance of this solicitation and receipt of proposals from interested Offerors do not constitute a commitment on the part of the U.S Government or USAID to make an award. Neither does it constitute

U.S. Agency for International Development 8/F, PNB Financial Center Pres. Diosdado Macapagal Blvd.

1308 Pasay City, Philippines

Tel: (632) 552-9800 Fax (632) 552-9999 www.usaid-ph.gov

Philippine American (Phil-Am) Fund SOL-492-13-000005 an obligation to reimburse interested Offerors for any costs they incurred in the preparation and submission of their 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 to ensure that it received the solicitation document in its entirety, including subsequent solicitation amendments, if any. USAID bears no responsibility for data errors resulting from transmission or conversion processes.

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.

They are to be submitted to USAID/Philippines no later than the closing date and time stated above, at the following address :

USAID/Philippines Regional Office of Acquisition and Assistance 8/F PNB Financial Center Pres. Diosdado Macapagal Blvd.

Pasay City, 1308.

One (1) original and five (5) 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 pursuant to FAR 15.208. Offerors should take into account 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.

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.

A pre-proposal conference is scheduled on Wednesday, February 6, 2013 at 1:00pm in a venue to be announced at a later date. Attendance is free. Interested Offerors may send up to two (2) representatives to the conference. However, pre-registration is required. Interested Offerors must submit the name of their organization, the name(s) of their representative(s) and their individual email addresses and phone numbers by email to manilaphilamfund@usaid.gov, with a copy to orpmailbox@usaid.gov , no later than 11:00pm of Friday, February 1, 2013. Only those whose names were received on time and were confirmed as pre-registered will be allowed to attend the conference.

Offerors must notify USAID of any change(s) to confirmed attendee(s) participation no later than 4:00pm of Tuesday, February 5, 2013.

http://www.fbo.gov/ mailto:manilaphilamfund@usaid.gov mailto:orpmailbox@usaid.gov

Questions, comments and requests for clarifications must be sent to manilaphilamfund@usaid.gov with a copy to orpmailbox@usaid.gov no later than February 8, 2013, 11:00pm, 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. Oral explanations or instructions given before the award of the contract will not be binding.

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 by Offerors in the preparation and submittal of proposals.

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

Sincerely, //S//

Jorge Dulanto-Hassenstein Contracting Officer mailto:manilaphilamfund@usaid.gov mailto:orpmailbox@usaid.gov

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS ____________________________________ 8

B.1 PURPOSE __________________________________________________________________________ 8

B.2 CONTRACT TYPE ____________________________________________________________________ 8

B.3 ESTIMATED COST, FIXED FEE AND OBLIGATED AMOUNT ____________________________________ 8

B.4 CONTRACT BUDGET AND CEILINGS _____________________________________________________ 8

B.5 BUDGET ___________________________________________________________________________ 9

B.6 COST REIMBURSABLE ________________________________________________________________ 9

B.7 INDIRECT COST _____________________________________________________________________ 9

B.8 CEILING ON INDIRECT COST RATES AND FINAL REIMBURSEMENT FOR INDIRECT COSTS ___________ 9

SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK ________________________ 10

C.1 TITLE ____________________________________________________________________________ 10

C.2 OBJECTIVE ________________________________________________________________________ 10

C.3 BACKGROUND _____________________________________________________________________ 12

C.4 STATEMENT OF WORK ______________________________________________________________ 18

C.5 SPECIAL ACTIVITIES COSTS ___________________________________________________________ 26

C.6 KEY PERSONNEL ___________________________________________________________________ 40

C.7 OTHER REQUIREMENTS _____________________________________________________________ 41

C.8. WORKS CITED _____________________________________________________________________ 46

SECTION D – PACKAGING AND MARKING ______________________________________________ 47

D.1 AIDAR 752.7009 MARKING (JAN 1993) _________________________________________________ 47

D.2 BRANDING POLICY AND STRATEGY ____________________________________________________ 47

D.3 APPROVAL OF CONTRACTOR BRANDING IMPLEMENTATION AND MARKING PLAN ______________ 48

SECTION E – INSPECTION AND ACCEPTANCE ___________________________________________ 49

E.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE ________________________ 49

E.2 INSPECTION AND ACCEPTANCE _______________________________________________________ 49

SECTION F – DELIVERIES OR PERFORMANCE ____________________________________________ 50

F.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE ________________________ 50

F.2 PERIOD OF PERFORMANCE __________________________________________________________ 50

F.3 PLACE OF PERFORMANCE____________________________________________________________ 50

F.4 PERFORMANCE STANDARDS _________________________________________________________ 50

F.5 KEY PERSONNEL ___________________________________________________________________ 51

F.6 MANAGEMENT OF CONTRACT ________________________________________________________ 51

F.7 LIFE-OF-PROJECT DELIVERABLES ______________________________________________________ 53

F.8 REPORTS AND OTHER DELIVERABLES __________________________________________________ 53

F.9 REPORTING FORMAT _______________________________________________________________ 59

F.10 LANGUAGE OF REPORTS AND OTHER OUTPUTS __________________________________________ 59

F.11 TECHNICAL DIRECTION AND DESIGNATION OF RESPONSIBLE USAID OFFICIALS _________________ 59

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

2004) 60

F.13 EVALUATIONS _____________________________________________________________________ 61

SECTION G – CONTRACT ADMINISTRATION DATA _______________________________________ 62

G.1 ADMINISTRATIVE CONTRACTING OFFICE _______________________________________________ 62

G.2 CONTRACTING OFFICER _____________________________________________________________ 62

G.3 CONTRACTING OFFICER’S REPRESENTATIVE _____________________________________________ 62

G.4 TECHNICAL DIRECTIONS/RELATIONSHIP WITH USAID _____________________________________ 62

G.5 ACCEPTANCE AND APPROVAL ________________________________________________________ 64

G.6 PAYING OFFICE ____________________________________________________________________ 64

G.7 AIDAR 752.7003 DOCUMENTATION FOR PAYMENT (NOV 1998) _____________________________ 64

G.8 ACCOUNTING AND APPROPRIATION DATA ______________________________________________ 66

G.9 FAR 52.232-25 PROMPT PAY (OCT 2003) ________________________________________________ 66

SECTION H – SPECIAL CONTRACT REQUIREMENTS _______________________________________ 71

H.1 AUTHORIZED GEOGRAPHIC CODE _____________________________________________________ 71

H.2 TITLE TO PROPERTY ________________________________________________________________ 71

H.3 REQUESTS FOR CONSENT TO SUBCONTRACT ____________________________________________ 71

H.4 752.227-14 RIGHTS IN DATA – GENERAL (OCT 2007) ______________________________________ 71

H.5 PRESS RELATIONS __________________________________________________________________ 72

H.6 ENVIRONMENTAL COMPLIANCE ______________________________________________________ 72

H.7 52.217-9 OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 2000) _____________________ 74

SECTION I – CONTRACT CLAUSES _____________________________________________________ 75

I.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE ________________________ 75

I.2 FAR 52.252-2 CLAUSES INCORPORATED BY REFERENCE (FEB 1998) __________________________ 79

I.3 FAR 52.227-23 RIGHTS TO PROPOSAL DATA (TECHNICAL) (JUN 1987) ________________________ 79

I.4 AIDAR 752.7007 PERSONNEL COMPENSATION (July 2007) _________________________________ 79

I.5 ADDITIONAL REQUIREMENTS FOR PERSONNEL COMPENSATION ____________________________ 79

I.6 CONTRACTOR’S STAFF SUPPORT AND ADMINISTRATIVE AND LOGISTICAL ARRANGEMENTS ______ 81

I.7 AIDAR 752.7004 EMERGENCY LOCATOR INFORMATION (JUL 1997) __________________________ 81

I.8 AIDAR 752.228-70 MEDICAL EVACUATION (MEDEVAC) SERVICES (JULY 2007) ______________ 81

I.9 AUTHORIZED WORK DAY/WEEK _______________________________________________________ 81

I.10 LANGUAGE REQUIREMENTS__________________________________________________________ 81

I.11 AIDAR 752.7025 APPROVALS (APR 1984) _______________________________________________ 82

I.12 AIDAR 752.7032 INTERNATIONAL TRAVEL APPROVAL AND NOTIFICATION REQUIREMENTS ______ 82

(JAN 1990) ______________________________________________________________________________ 82

I.13 BUSINESS CLASS TRAVEL_____________________________________________________________ 82

I.14 CONTRACTOR’S USE OF PROJECT VEHICLES AND LIABILITY INSURANCE REQUIREMENTS FOR

PRIVATELY OWNED VEHICLES _______________________________________________________________ 82

I.15 GOVERNMENT FURNISHED FACILITIES OR PROPERTY _____________________________________ 82

I.16 AIDAR 752.245-71 TITLE TO AND CARE OF PROPERTY (APR 1984) ____________________________ 83

I.17 APPROVALS FOR NONEXPENDABLE PROPERTY PURCHASES ________________________________ 83

I.18 AIDAR 752.227-14 RIGHTS IN DATA – GENERAL (OCT 2007)________________________________ 83

I.19 AIDAR 752.231-71 SALARY SUPPLEMENTS FOR HG EMPLOYEES (OCT 1998) ___________________ 84

I.20 FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL CONFERENCES (JAN 2002) __________ 84

I.21 VALUE ADDED TAX (VAT) AND CUSTOM DUTIES __________________________________________ 85

I.22 REPORTING ON FOREIGN TAXES (JULY 2007) ____________________________________________ 85

I.23 INSURANCE AND SERVICES ___________________________________________________________ 86

I.24 CONFLICTS OF INTEREST _____________________________________________________________ 86

I.25 FAR 52.203-13 CONTRACTOR CODE OF BUSINESS ETHICS AND CONDUCT (APR 2010) ___________ 87

I.26 302.3.5.9 NONDISCRIMINATION (JUN 2012) ____________________________________________ 91

I.27 USAID DISABILITY POLICY - ACQUISITION (DEC 2004) ______________________________________ 91

I.28 EXECUTIVE ORDER ON TERRORISM FINANCING __________________________________________ 91

I.29 FAR 52.222-50 COMBATING TRAFFICKING IN PERSONS (FEB 2009) Alt. I (AUG 2007) ____________ 92

I.30 302.3.5.13 PERSONAL IDENTITY VERIFICATION OF CONTRACTOR PERSONNEL (JULY 2007) _______ 94

I.31 AIDAR 752.7101 VOLUNTARY POPULATION PLANNING ACTIVITIES (JUNE 2008) ________________ 94

I.32 FAR 52.209-9 UPDATES OF PUBLICLY AVAILABLE INFORMATION REGARDING RESPONSIBILITY

MATTERS (FEB 2012) ______________________________________________________________________ 95

I.33 DISCLOSURE OF INFORMATION ______________________________________________________ 96

SECTION J – LIST OF DOCUMENTS EXHIBITS AND OTHER ATTACHMENTS _____________________ 97

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

RESPONDENTS ___________________________________________________________________ 98

K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE ___________________ 98

K.2 FAR 52.204-8 ANNUAL REPRESENTATIONS AND CERTIFICATIONS (FEB 2012) __________________ 98

K.3 AIDAR 752.226-01 DISADVANTAGED ENTERPRISE REPRESENTATION (APR 1991) ______________ 102

K.4 Far 52.227-38 COMPLIANCE WITH VETERANS EMPLOYMENT REPORTING REQUIREMENTS (SEP 2010)

K.5 INSURANCE - IMMUNITY FROM TORT LIABILITY _________________________________________ 102

K.6 FAR 52.209-7 INFORMATION REGARDING RESPONSIBILITY MATTERS (FEB 2012) _____________ 102

K.7 AGREEMENT ON, OR EXCEPTIONS TO, TERMS AND CONDITIONS ___________________________ 103

K.8 SIGNATURE ______________________________________________________________________ 104

SECTION L – INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS ____________________ 105

L.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE __________________ 105

L.2 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE (FEB 1998) ______________ 105

L.3 FAR 52.215-1 INSTRUCTIONS TO OFFERORS-COMPETITIVE ACQUISITION (JAN 2004) ___________ 105

L.4 52.233-2 SERVICE OF PROTEST (SEP 2006) _____________________________________________ 110

L.5 ADDITIONAL INSTRUCTIONS TO OFFERORS _____________________________________________ 110

L.6 OFFER EXPIRATION DATE ___________________________________________________________ 112

L.7 GOVERNMENT OBLIGATION _________________________________________________________ 112

L.8 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL ______________________ 113

L.9 COST PROPOSALS _________________________________________________________________ 118

L.10 INSTRUCTIONS FOR THE PREPARATION OF BRANDING IMPLEMENTATION AND MARKING PLANS _ 124

SECTION M – EVALUATION FACTORS FOR AWARD _____________________________________ 126

M.1 GENERAL INFORMATION ___________________________________________________________ 126

M.2 TECHNICAL PROPOSAL EVALUATION CRITERIA __________________________________________ 126

M.3 COST PROPOSAL EVALUATION _______________________________________________________ 130

M.4 AWARD _________________________________________________________________________ 130

ATTACHMENTS __________________________________________________________________ 131

ATTACHMENT J.1 LOCAL COMPENSATION POSITION DESCRIPTION GUIDELINES ____________________ 131

ATTACHMENT J.2 BRANDING IMPLEMENTATION PLAN AND MARKING PLAN FORMAT ______________ 137

ATTACHMENT J.3 USAID FORM 1420-17 CONTRACTOR EMPLOYEE BIOGRAPHICAL DATA SHEET _______ 143

ATTACHMENT J.4 SF-294 SUBCONTRACTING REPORT FOR INDIVIDUAL CONTRACT__________________ 144

ATTACHMENT J.5 SF-295 SUMMARY SUBCONTRACT REPORT __________________________________ 144

PART I

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

The purpose of this contract is to provide the technical assistance and services to support USAID’s “Philippine American (Phil-Am) Fund”.

B.2 CONTRACT TYPE

This is a cost plus fixed fee completion type contract.

For the consideration set forth below, the Contractor will achieve the performance objectives and deliverables or outputs described in Sections, C, D and F and otherwise comply with all contract requirements.

B.3 ESTIMATED COST, FIXED FEE AND OBLIGATED AMOUNT

(a) For the contract period, The Total Estimated Cost is $______________.

The Fixed Fee (if any) is $______________.

The Total Estimated Cost plus Fixed Fee (if any)is $______________.

(b) Within the estimated cost plus fixed fee (if any) specified in paragraph (a) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the Contractor (and payment of fee, if any) for performance of the contract period hereunder is

The Contractor shall not exceed the aforesaid obligated amount unless authorized by the

Contracting Officer pursuant to the clause of this contract entitled “Limitation of Funds” (FAR 52.232-22). See Section I of this contract.

(c) Funds obligated hereunder are anticipated to be sufficient through ________________.

B.4 CONTRACT BUDGET AND CEILINGS

(a) The contract budget found in B.5, Budget, is based on the contractor’s original proposal and/or final proposal revision, which was accepted by USAID through award of this contract.

(b) Without the prior written approval of the contracting officer, the Contractor may not exceed the total estimated cost set forth in the budget hereunder or the obligated amount, whichever is less.

B.5 BUDGET

The following itemized budget sets forth the estimates for reimbursement of dollar costs for individual line items of cost, and the fixed fee (if any).

B.6 COST REIMBURSABLE

The U.S. dollar costs allowable shall be limited to necessary reasonable, allowable and allocable costs determined in accordance with FAR 31 (Contract Cost Principles), OMB A-21 (Cost Principles for Educational Institutions), 2 CFR 230 (Cost Principles for Non-Profit Organizations), FAR 52.216-7 (Allowable Cost and Payment), FAR 52.216-8 (Fixed Fee), if applicable, and AIDAR 752.7003 (Documentation for Payment), in order to be reimbursable under this contract.

END OF SECTION B

ITEMS Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL

I. Estimated Cost

1. Salaries and Wages

2. Fringe Benefits

3. Consultants

4. Travel and Transportation

5. Equipment and Supplies

6. Subcontracts

7. Grants

8. Other Direct Costs

9. Special Activities Fund 300,000 600,000 600,000 150,000 150,000 1,800,000

Sub-Total Estimated Contract Cost

Plus: Fixed Fee

Total Estimated Cost plus Fixed Fee

NOTES:

1. All costs for local organizations shall be budgeted and billed as direct costs. Indirect costs are not allowed.

2. The Grant Fund comprises 70% of the Total Estimated Cost plus Fixed Fee.

3. The Special Activities Fund line item amounts are plug figures. All offerors will use these amounts in their cost proposals.

SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1. TITLE

The contract will be entitled “Philippine American (Phil-Am) Fund” Project.

C.2. SUMMARY OF THE PROJECT

The United States Agency for International Development, Philippines (USAID/Philippines) looks to establish the Philippine-American Fund to finance local activities that support broad-based, inclusive and sustainable growth in the Philippines. To a large extent, activities supported will help to address constraints to growth as identified in the Partnership for Growth (PFG) Initiative: the Philippine- American Fund will provide grants that support business start-ups, promote innovation through entrepreneurship, and advance citizen advocacy for greater public accountability, transparency and integrity. In addition, grants will be provided to support other key priorities for USAID to support the Philippines to achieve a more inclusive, broad-based and sustainable growth, including efforts in combatting human trafficking, technology-based solutions to child and adult illiteracy; and improved management of natural resources and biodiversity. The Philippine-American Fund project, also referred to as the PAF Grant Facility, will oversee and manage the fund. Grants issued by the Philippine-American Fund will complement other support being given by the United States Government (USG) to the Government of the Philippines (GPH) in advancing the goals of the PFG and in support of other key goals of USAID in helping the Philippines to achieve a stable, prosperous and well-governed status. By working through a local organization to implement the Philippine-American Fund project, and providing grants to local organizations, USAID Philippines will be contributing to achieving the agency's goals of working more with local organizations in line with the USAID Forward reform agenda.

The Philippine-American Fund will be a grant-making facility that provides funding to qualifying recipients (here, referred to as grantees) through local competitive processes.

USAID/Philippines seeks proposals from Offerors to establish, manage and administer this grant facility on behalf of USAID. Grant administration entails preparing and issuing solicitations, reviewing and pre-screening proposals, awarding grants, monitoring and evaluating grant performance, monitoring and auditing grantees’ financial reports, ensuring due diligence and compliance of USAID rules and regulations, closing out grants, and reporting to USAID. The Philippine-American Fund project will also provide some organizational capacity-building to grantees to ensure proper stewardship of donor funding through improved organizational and financial management. The Philippine-American Fund project carries a total estimated budget of $24 million, subject to the availability of funds, over a five-year project period.

As envisioned by this contract, the Philippine-American Fund will issue grants that support inclusive, sustainable growth by contributing to five broad categories: 1) enterprise development, 2) governance,

3) counter trafficking in persons, 4) education innovation challenge grants, and 5) biodiversity conservation. Subject to USAID approval, grants made under the facility will fund local, non-sovereign entities (private enterprises and civil society organizations).

C.2.a. GOALS AND OBJECTIVES

The Philippine-American Fund, along with planned technical assistance across areas of economic growth, governance, education, and environment, will assist the Philippines achieve the goal of moving from a low growth path to a higher, sustained and more inclusive growth trajectory on par with other high-performing emerging Asia-Pacific economies. The Philippine-American Fund will support non-State actors in activities that contribute to overarching strategic goals of USAID Philippines, by seeking to improve government accountability and transparency, engage citizen participation and advocacy, strengthening the trade and investment environment, catalyzing entrepreneurship, supporting business start-ups, and fortifying the underutilized potential of the Philippines’ human, economic and natural resources. The Philippine-American Fund will also support local initiatives that combat human trafficking; provide innovative, technology-based solutions to address 'last-mile' challenges in the path to improved child and adult literacy in the Philippines; and support biodiversity conservation initiatives that contribute to more sustainable growth.

C.2.b. BASIS

USAID/Philippines looks to establish the Philippine-American Fund (PAF) to provide grants that contribute to USAID's goal of sustainable, more inclusive and broad-based growth in the Philippines.

The activities herein will accomplish this goal by bolstering local initiatives and solutions that support the economic growth, good governance, and environmental resilience objectives of USAID in the Philippines. Grants provided under the Philippine-American Fund will support activities such as:

business start-ups; promoting innovation through entrepreneurship; widening citizen advocacy for public accountability, transparency and integrity; strengthening efforts to combat human trafficking;

innovating technology-based solutions to child and adult illiteracy; and improving sustainable management of natural resources and conservation of biodiversity. By working through a local implementing organization, and providing grants to local organizations, Philippine-American Fund also contributes to USAID’s goals for working more with and empowering local organizations in line with the agency’s USAID Forward reform agenda.

USAID has embarked on an ambitious reform effort called USAID Forward to change the way the Agency does business. USAID Forward aims to modernize and strengthen USAID so that it can meet the most pressing development challenges and work more efficiently towards its ultimate goal – creating the conditions where USAID involvement is no longer needed.

As part of the reform efforts under USAID Forward, the Agency is committed to changing its business processes by contracting with, and providing grants to, more and varied local partners through Implementation and Procurement Reform (IPR). Integral to USAID’s IPR, the Philippine-American Fund seeks to build more local capacity, while also streamlining Agency procedures so that USAID can work with a broader range of local partners and increase procurement local competition. As a leading implementer of IPR for the agency, USAID/Philippines aims to establish new partnerships to help create the conditions where aid is no longer necessary in the Philippines. As envisioned by the Philippine- American Fund, this important USAID Forward reform initiative seeks to reestablish implementation mechanisms that permit USAID to engage directly with local entities (enterprises, institutions, and civil society organizations). The undertaking is crucial to achieving the permanent and transformational development results that the USG seeks to advance. This approach ensures that a greater share of development dollars are directed to the Philippine economy and that local institutions will have a stronger capability for contributing to and sustaining the country’s development. Specifically, the

Philippine-American Fund will support IPR Objective 2: strengthen local civil society and private sector capacity to improve aid effectiveness.

The Philippine-American Fund also seeks to fulfill the goals of the 2011-2016 Philippine Development Plan (PDP) of improving the country’s national competitiveness by, among others, catalyzing entrepreneurship in priority, high-growth sectors of the economy. The Project also aims to promote the PDP’s normative standards of good governance by fostering participation, ensuring transparency, demanding accountability, promoting efficiency, and upholding the rule of law in economic, political, and administrative institutions and processes.1

The Philippine-American Fund will contribute to Development Objective 1 (“broad based and inclusive growth accelerated and sustained”) of USAID/Philippines’ draft Country Development Cooperation Strategy through grants in economic growth, education and governance areas. In addition, the Philippine-American Fund will contribute to USAID's objective of strengthening Philippines environmental resilience through grants aimed at protecting biodiversity resources. In line with USAID Forward procurement reform, this solicitation is targeted only to Filipino organizations in the spirit of advancing local capacity for aid effectiveness by strengthening local institutions to do development.2

Eligible offerors to administer this contract must be legally registered, non-sovereign Filipino entities (including private sector entities such as auditing firms, civil society organizations, think tanks, foundations, educational and business development institutions). Offerors are encouraged to partner with non-Filipino entities that have experience managing large, foreign-funded USAID development projects.

C.3. PROBLEM ANALYSIS AND OVERVIEW

The development challenges which underpin the grants of the Philippine-American Fund are multiple.

The problem analyses below outline, one by one, the constraints in each of the targeted sectors that the grants will aim to address.

C.3.a. Unmet Socio-economic Promise In the early years following World War II, the Philippines seemed poised for long-term economic success. Within Asia, only Japan had a higher standard of living at that time. But by the early 1990s, the Philippines was routinely dismissed as being behind other economies in a fast-growing region. Over the years, economic gains have proven relatively modest, short-lived, and unevenly distributed. As some suggest, the Philippines contains all the ingredients for developmental success: a rich endowment of natural resources; entrepreneurial talents; an educated and Anglophone workforce; a community of economists and development specialists; and abundant overseas assistance. Yet, the country has been unable to convert its substantial developmental assets into economic success.

1 Government of the Philippines, Philippine Development Plan 2011-2016 (Manila, 2011).

2 For the purposes of local procurement, USAID defines a local organization according to the following four criteria: (i) organized under the laws of the Philippines; (ii) located in the Philippines as its principal place of business; (iii) majority-owned by individuals who are citizens or lawful permanent residents of the Philippines or managed by a governing body, the majority of whom are Philippine citizens or lawful permanent residents of the Philippines; and (iv) not controlled by a foreign entity or by an individual or individuals who are not citizens or permanent residents of the Philippines.

Poverty continues to be a problem, especially in the rural countryside,3 despite moderate economic growth in recent years. Hindering the positive impact of growth on poverty reduction, inequality remains stubbornly high, limiting sustained growth and the country’s overall development. In short, growth has not been inclusive.4 As a result, the Philippines continues to suffer from a dualistic economic structure marked by a small industrial base, on the one hand, and the relatively unproductive agricultural and services sector, on the other.5 The country’s stagnant industrial sector translates into a chronic deficit in productivity growth, high unemployment, slow poverty reduction, and low investments in comparison to its regional neighbors.6

Structural dualism in the economy has severe consequences, particularly on job creation in the formal sector. Despite the need for highly skilled workers in the urban industrial sector, for example, the unemployment rate for college-educated persons is higher than less educated workers.7 Ironically, the country faces an emerging skills gap, particularly in the service and manufacturing sectors.8 Over the past decade, an average of 846,000 Filipinos enter the workforce each year; but the economy lacks the capacity to create quality jobs to absorb this labor market. Recent projections also paint a gloomy outlook for the labor force, which is projected to increase by over 50% from 34 million (in 2005) to 52 million (in 2030). In the Philippines, unemployment has been characterized as a ‘time bomb.’9 Even with access to overseas job market, the Philippines will need to attract major investments to create employment domestically. Local business leaders stress that creating new jobs and training workers with skills needed in existing and emerging industries are the two most serious challenges for the Philippine economy in the coming decades.10

The close overlap between politics and big business has created roadblocks for outsiders and new-comers in their efforts to gain access and influence, resulting in a political economy that impedes Philippine development.11 As a result, high income inequality thwarts the aspirations of a narrow middle-class whose response to economic incentives often leads to an out-migration.

3 As of 2009, poverty headcount ratio at national poverty line (% of population) stood at 26.5%. World Bank, World Bank Database, data.worldbank.org/country/philippines. For a recent discussion of poverty in the Philippines, see Asian Development Bank, Poverty in the Philippines: Causes, Constraints, and Opportunities. (Mandaluyong City: Asian Development Bank, 2009).

4 As measured by the Gini coefficient, income distribution in the Philippines is highly uneven. The country’s Gini coefficient of 43.0 is among the highest in Asia. World Bank, World Bank Database, data.worldbank.org/country/philippines. A Gini index of 0 denotes perfect equality, while an index of 100 implies perfect inequality.

5 See Paul Krugman, J. Alms and E. Remolona, Transforming the Philippine Economy (Quezon City: APO Production Unit, 1992); and John V.C. Nye, Taking Institutions Seriously: Rethinking the Political Economy of Development in the Philippines, Vol. 28, 1 vols. (Asian Development Review).

6 Nori Usui, Transforming the Philippine Economy: “Walking on Two Legs”, Asian Development Bank (Mandaluyang City:

ADB Economics Working Paper Series No. 252, March 2011).

7 Nye, Taking Institutions Seriously.

8 Human Development Department, East Asia and Pacific Region, Philippines Skills Report: Skills for the Labor Market in the Philippines (World Bank, March 2010).

9 Jesus Felipe, Growth, Full Employment, and Structural Change: Implications and Policies for Developing Asia (Mandaluyang: Asian Development Bank, 2010).

10 Joint Foreign Chambers of Commerce of the Philippines, Arangkada Philippines 2010: a Business Perspective (Makati City: American Chamber of Commerce of the Philippines, Inc., 2010).

11 Paul D. Hutchcroft, Booty Capitalism: The Politics of Banking in the Philippines (Ithaca, NY: Cornell UP, 1998). Through an examination of interactions between the state and the major families of the oligarchy in the banking sector since 1960, the book highlights the Philippines as an archetypal relationship between political and economic development in the modern

Third World.

C.3.b. Philippine Citizenship and Advocacy for Better Governance

The Philippines boasts one of Asia’s oldest and liveliest democracies, in terms of public interest and participation in the electoral process. Framed in 1987 following the ousting of dictator Ferdinand Marcos, the current constitution guarantees ‘life, liberty, and property’ in a US-style bill of rights. The success of the Philippines' first automated polls in the 2010 contributed to greater trust in the electoral process and in the credibility of the Commission on Elections.12 By some estimates, the Philippines benefits from a vast community of civil society, think tank, media, academic, and private sector organizations.

Despite a long tradition of democracy, the Philippines experiences weak governance, inconsistent rule of law, and widespread corruption. Deep social and political divisions continue to persist alongside problems of inefficiency and corruption in government. Governance issues present binding constraints to broad-based economic growth in the Philippines. In 2011, the Philippines ranked 129th, below 70 percent of all countries surveyed in the Corruption Perceptions Index, which measures the perceived level of public corruption in 178 countries.13 According to the World Governance Indicators, the Philippines has consistently ranked in the lower half of six dimensions of governance.14 Corruption continues to undermine the faith of its citizens in local and national government institutions and hampers the ability of these institutions to deliver public services, improve people’s welfare, and protect their rights. In effect, weak governance poisons the implicit social contract of citizenship. Moreover, political instability, corruption, and weak rule of law have severe negative effects on investments.

Corruption increases the cost of doing business, deters both foreign and domestic investment and pre-empts competition. The Global Competitiveness Index (GCI) ranked the country 75th out of 142 economies in 2011-2012. The GCI Report listed corruption and inefficient government bureaucracy as the two most damaging factors to doing business in the Philippines.15

While economic gains in early 2012 are encouraging (with GDP growth of 6.5% in the first nine months of 2012), 16 more sustained efforts are needed to produce inclusive, broad-based growth in the Philippines. Over 10% of the population live and work abroad.17 According to surveys, a staggering one in five Filipinos wants to migrate.18

In such an environment of limited economic opportunity, the vibrant Philippine democracy settles into an uneasy and unstable truce in a clan-patronage system lacking meaningful countervailing forces and interest groups to balance competing claims upon the state.

Nonetheless, the political outlook for the country points to improving governance, with multiple signs of improved accountability and much needed reforms.19 The Aquino administration has made a point of

12 Social Weather Stations, June 28, 2010. Second Quarter 2010 Social Weather Survey: 75% of Filipinos satisfied with the conduct of the May 2010 Elections.

13 See www.transparency.org 14 See info.worldbank.org/governance/wgi/sc_country.asp 15 GCI defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country. A copy of the report is available at http://reports.weforum.org/global-competitiveness-2011-2012/ 16 http://www.nscb.gov.ph/ 17 Oxford Business Group, 2009. The report: The Philippines 2009.

18 Walden Bello, Herbert Docena, Marissa de Guzman and Marylou Malig, The Anti-Development State: the Political

Economy of Permanent Crisis in the Philippines (New York: Focus on the Global South, 2004).

19 Business Monitor International, Philippines Business Forecast Report Q1 2012 (London: Business Monitor International).

http://www.transparency.org/ file:///C:/Documents%20and%20Settings/jsoukamneuth/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/YGOYHSEN/info.worldbank.org/governance/wgi/sc_country.asp http://reports.weforum.org/global-competitiveness-2011-2012/ placing the fight against corruption at the top of his agenda, and this commitment is also reflected in the Good Governance and Rule of Law Chapter of the PDP. In this Plan, the GPH lays out its commitment to decisively curb corruption by ensuring the speedy resolution of large-scale corruption cases, strictly enforcing anticorruption laws and policies, intensifying corruption prevention efforts, and strengthening integrity mechanisms. The PDP outlines a legislative and policy agenda intended to improve the legal framework for anticorruption, and pledges to expand and harness private sector initiatives that promote good corporate governance. Efforts already underway indicate a commitment to greater transparency and accountability in government, and recognition of good governance practices, at the local and national levels. Furthermore, the judiciary has demonstrated a continued commitment to implementing reforms to promote efficiency and reduce delay, fill-up court vacancies, develop the capacities of judges and court personnel, reward good performance, and enforce discipline on erring personnel.

Efforts to support and empower CSOs need to be deepened, strengthened, and strategically directed in reform areas that redress the dualist nature of country’s political economy. As a manifestation of political and economic competition in the market-place for ideas, these interest groups provide key tools to check the integrity of public offices and a fundamental counterbalance to bolster reforms in the public sector and the wider political economy.

Capacity is robust in the civil society sector of the Philippines. Filipino CSOs are among the most vibrant and diverse in the region and have made great strides in pushing reform over the last two decades, including in the areas of procurement, corruption, elections and local governance. The business sector likewise participates in policy-making; many foreign and local businesses make their views known through the trade and industry associations around the country. In the Philippines, CSOs have become involved in monitoring public budgeting and expenditures, analysis of public perceptions on corruption, online reporting of corruption, providing a citizen check on political activities such as campaign practices and spending, and monitoring of compliance on regulations such as public disclosure and third party oversight of government contracting processes. In terms of procurement, civil society oversight is required by law.20 Media freedom is guaranteed in the Philippine Constitution, and there are no licensing restrictions and few legal limitations for journalists, at local and national levels, who freely cover even controversial governance issues, including corruption. These CSO efforts need to be deepened and strengthened, as they are key tools to check the integrity of offices and a fundamental counterbalance to public sector reform efforts. They can promote greater transparency, and sunshine policies that improve society’s access to information.

C.3.c. Trafficking in Persons in the Philippines

The 2012 U.S. Department of State Trafficking in Persons Report states that “The Philippines is a source country and, to a much lesser extent, a destination and transit country for men, women, and children subjected to sex trafficking and forced labor. With over nine million Filipinos working or living in about 220 countries, a significant number of Filipino men and women who migrate abroad for work are subsequently subjected to conditions of involuntary servitude worldwide. Men, women, and children are subjected to conditions of forced labor in factories, at construction sites, on fishing vessels, on

20 The Philippines’ primary statute on public procurement is Republic Act (RA) No. 9184, called the “Government

Procurement Reform Act of 2003.” Section 13 of the GPRA indicates that at all stages of procurement, the Bids and

Awards Committee (BAC) is required to invite observers, those being from a duly recognized professional organization in a sector or discipline relevant to the procurement at hand, or from a non-governmental organization.

agricultural plantations, and as domestic workers in Asia and increasingly throughout the Middle East.

There is also a significant number of Filipino women working in domestic service in foreign countries who face rape, physical violence, and sexual abuse.

The same report also mentioned that while the Government of the Philippines does not fully comply with the minimum standards for the elimination of trafficking, it is making significant efforts to do so.

The government significantly increased funding of the Inter-Agency Council against Trafficking (IACAT) from the equivalent of approximately $230,000 in 2010 to the equivalent of $1.5 million in 2011. The government continued to prosecute and convict trafficking offenders and implemented a new program to protect and rehabilitate victims. Additionally, authorities continued to make efforts to address trafficking related corruption, filing criminal cases against 18 officials during the year. The government made notable efforts to prevent trafficking, including through training public officials, strengthening and expanding structures to screen for trafficking indicators before Filipino migrant workers’ departure overseas, and negotiating bilateral agreements to protect its workers employed in foreign countries.

Various push and pull factors contribute to the victimization of Filipinos to trafficking and illegal recruitment. Foremost of which is the propensity of Filipinos to look for work and other sources of income overseas with or without appropriate working visas or permits, driven by desire to get out of poverty, unemployment, conflicts and limited accesses to basic services such as health and education in the Philippines. Their irregular immigration status overseas increases their vulnerabilities to labor and sexual exploitation in other countries.

For the past two years, special attention has been provided by the Philippine Government to the trafficking situation in Mindanao where the population, especially women, struggle in visceral ways with poverty, unemployment and underemployment, along with lack of access to basic social services. On top of these basic difficulties, they must contend with violence, especially in the politically unstable parts of Mindanao. Women and children are particularly vulnerable to exploitation in Mindanao and to domestic and cross-border TIP, in addition to suffering the dangers of violence in the form of physical abuse, rape, incest, illegal recruitment, and involuntary prostitution. In the ongoing repatriation of approximately 1,900 Filipinos working in Syria as of July 201221, 60% of them are from Mindanao and 90% of them are women engaged in household service work. More than half of these were considered victims of TIP, mostly by labor exploitation, coming from Maguindanao, Surigao Del Norte, Basilan and other areas in Mindanao.22 Many prospective emigrants come from or transit through Mindanao, and of these, many end up in exploitative situations. Gender analyses reveal the disparities in income and workforce participation by women, suggesting a need for improved women’s economic participation.

All of these challenges set a context for USAID concerns about helping the Philippines to improve its capacity to combat trafficking by helping its citizens be less vulnerable and strengthening its institutions to offer greater enforcement, awareness and even economic alternatives so that Filipinos are less likely to be drawn into the hands of nefarious traffickers.

21 See http://globalnation.inquirer.net/45929/ph-cuts-deal-with-syria-140-ofws-to-come-home 22 See http://trafficking-monitor.blogspot.com/2012/09/rampant-trafficking-of-ofws-in-syria.html http://globalnation.inquirer.net/45929/ph-cuts-deal-with-syria-140-ofws-to-come-home http://trafficking-monitor.blogspot.com/2012/09/rampant-trafficking-of-ofws-in-syria.html

C.3.d. Child and Adult Illiteracy in the Philippines

Inadequately trained teachers, classroom shortages, high student-teacher ratios, and lack of access to high quality reading materials have combined with external social pressures to contribute to decade of under performance in the Philippine basic education sector. The most serious impact of this has been the consistent shortfall of early grade reading outcomes, especially among the nation’s most disadvantaged and at risk children (such as boys and children with disabilities). Another result of this underperformance has been high dropout rates (especially among students in the first three years of school) which, together with poor early grade reading outcomes, has contributed to what the 2010 Education for All Global Monitoring Report called a basic education delivery system that “provides a particularly striking example of underperformance”.

Reading skills are the greatest determinant of education quality, the foundation for other learning activities, and a major determinant if a child continues to learn and stay in school. Research in the sector has shown that “[t]he point of reading is comprehension, and the point of comprehension is learning.

Children who fail to learn to read in the first few grades of school are handicapped because they must absorb increasing amounts of instructional content in print form” (Gove and Cvelich, 2011).23 Additionally, the 2005 Education for All Global Monitoring Report states that “literacy is a critical tool for the mastery of other subjects and one of the best predictors of longer-term learning achievement.

Reading must be considered a priority area in efforts to improve the quality of basic education” (UNESCO 2005). Children who fail to become literate in early grades “are on a lifetime trajectory of limited education progress and therefore limited economic and developmental opportunity” (USAID, 2011).