SOL-497-11-000004.pdf

Issuance Date : February 2, 2011 Closing Receipt for Questions : February 16, 2011 3:00 pm (Jakarta Time) Closing Date and Time for : March 22, 2011 Submission of Proposals 3:00 pm (Jakarta Time)

Subject: Request for Proposal (RFP) No. SOL-497-11-000004

“HIGHER EDUCATION, LEADERSHIP AND MANAGEMENT (HELM)

PROJECT”

Ladies and Gentlemen:

The United States Government, as represented by the United States Agency for International Development (USAID) Mission to Indonesia, is seeking proposals from qualified organizations interested in providing the services described in the attached solicitation.

This procurement is being conducted through full and open competition for which the procedures set forth in FAR Part 15 shall apply.

Proposals will be accepted from U.S. or non-U.S. Non-Governmental Organizations (NGOs), private, for-profit and non-profit organizations, including universities, research organizations, professional associations, and relevant special interest associations. Faith-based and community organizations are also eligible for award. In support of the Agency’s interest in expanding the number and sustainability of development partners, USAID encourages proposals from potential new partners.

USAID plans to award a Cost-Plus-Fixed-Fee completion-type contract, with a total estimated cost in the range of $20 to $24 million, covering a total estimated period of five years. Revealing the estimated cost range for the contract does not mean that Offerors should necessarily strive to meet the maximum amount estimated. Offerors must propose costs that they believe are realistic and reasonable for the work. Cost proposals will be evaluated as part of the best value procedure in determining the contract award. The cost effectiveness of Offerors’ proposed approaches to achieving the results will be evaluated.

Cover Letter - Page 2 of 3

USAID encourages the participation to the maximum extent possible of small business concerns, small disadvantaged business concerns and women-owned small business concerns in this activity as a prime contractor or as a subcontractor, in accordance with Part 19 of the FAR.

Receipt of this solicitation through the internet must be confirmed by written notification to the Contracts Specialist, Nadeem Yusuf via email at SOL-497-11-000004@usaid.gov. It is the responsibility of the recipient of this solicitation document to ensure that it has been received from Internet in its entirety, including subsequent solicitation amendments, if any, and USAID bears no responsibility for data errors resulting from transmission or conversion processes.

Issuance of this solicitation and the submittal of a proposal do not constitute a commitment on the part of the U.S. Government nor USAID to make an award neither does it constitute an obligation for any costs incurred in the preparation and submission of a proposal. Award will be subject to such funds being made available following the proper completion of required USAID internal processes. Further, the U.S. Government 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 RFP (attached). All Offerors are cautioned to carefully review this Cover Letter and the contents of the RFP.

Proposals are to be submitted to USAID/Indonesia no later than the closing date stated above, to the place designated in Section L. for receipt of proposals. The proposal, and any modifications submitted after the initial proposal, shall be submitted in accordance with the instructions provided in Section L. The details associated with the submission requirements for Offerors’ proposals are outlined in Section L of this solicitation. If the proposal is received after the deadline or if it is incomplete, it may not be accepted or otherwise considered unless authorized by the Contracting Officer. Late proposals will be handled in accordance with FAR 15.208.

Facsimile submissions are not authorized nor will be accepted. USAID/Indonesia requires an original and six (6) copies of the Offeror’s Technical Proposal as well as an original and three (3) copies of the Cost Proposal. The Offeror is responsible for making and retaining a complete copy of the submission. The Offeror must initial erasures and any other evident changes.

Offerors’ proposals must be submitted as prescribed in Section L and evaluated per Section M “Evaluation Factors for Award” and will be evaluated as provided under this Section. USAID/Indonesia will first evaluate the technical section of the proposal. The technical section will be evaluated by a technical evaluation committee using the technical criteria prescribed in Section M. The technical evaluation committee’s comments on the technical proposals will be submitted to the USAID Contracting Officer. Upon receipt, technical and cost negotiations and discussions will then be conducted only if the proposal is responsive to the needs as specified herein and the proposal is deemed as to be within the competitive range.

Following or during negotiations, submission and re-evaluation of a revised proposal may be required if deemed appropriate by the Contracting Officer.

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TABLE OF CONTENTS

Page

ACRONYMS

PART I ‐ THE SCHEDULE

SECTION B ‐ SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

B.2 CONTRACT TYPE AND CONRACT SERVICES

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

B.4 CONTRACT LINE ITEM NUMBERS AND CEILINGS

B.5 INDIRECT COSTS

B.6 ADVANCE UNDERSTANDING ON CEILING INDIRECT COST RATES AND FINAL REIMBURSEMENT FOR

INDIRECT COSTS

B.7 REIMBURSABLE COSTS

SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 INTRODUCTION

C.2 BACKGROUND

C.2.1 Key Trends in Indonesian Higher Education C.2.2 GOI Roles, Priorities, and Policies for Higher Education C.2.3 Findings from USAID Assessment of Tertiary Institutions C.2.4 Other Donor Programming C.2.5 US Government Priorities C.2.6 USAID’s Emerging Global Education Framework C.2.7 Prior USAID/Indonesia Projects C.2.8 Other USG Programming

C.3 PROBLEM STATEMENT

C.4 STATEMENT OF WORK

C.4.1 Overview C.4.2 Assumptions C.4.3 Project Structure C.4.4 Results, Required Activities, and Deliverables (Also, see Attachment 9) C.4.5 Key Beneficiaries and Selection of Target Universities

C.5 PROJECT IMPLEMENTATION AND MANAGEMENT

C.5.1 Implementation Arrangements C.5.2 Sustainability C.5.3 USAID Management C.5.4 Technical Direction C.5.5 Donor Coordination C.5.6 Mobilization and Quick Start Activities (Also, see Section F.7.1) C.5.7 Work Plan C.5.8 Procurement Plan

C.6 MONITORING AND EVALUATION

C.6.1 Performance Indicators and Milestones C.6.2 Indicators from Foreign Assistance Framework C.6.3 Monitoring and Evaluation

C.7 REPORTS

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C.8 STAFFING

C.8.1 KEY PERSONNEL

C.8.2 OTHER PERSONNEL

C.9 GENDER

C.10 ENVIRONMENTAL COMPLIANCE

SECTION D ‐ PACKAGING AND MARKING

D.1 AIDAR 752.7009 MARKING (JAN 1993)

D.2 BRANDING POLICY AND STRATEGY

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 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

F.2 PERIOD OF PERFORMANCE

F.3 PLACE OF PERFORMANCE

F.4 PERFORMANCE STANDARDS

F.5 FAR 52.217‐8 OPTION TO EXTEND SERVICES (NOV 1999)

F.6 KEY PERSONNEL

F.7 REPORTS AND OUTPUTS

F.8 CONTENTS OF PERIODIC PROGRESS REPORTS

F. 9 REPORTING FORMAT

F.10 LANGUAGE OF REPORTS AND OTHER OUTPUTS

F.11 PROJECT EVALUATION

F.11.1 MID‐TERM EVALUATION

F.11.2 FINAL EVALUATION

F.12 AIDAR 752.7005 SUBMISSION OF DEVELOPMENT EXPERIENCE DOCUMENTATION TO PPC/CDIE/DI

(JAN 2004)

SECTION G ‐ CONTRACT ADMINISTRATION DATA

G.1 ADMINISTRATIVE CONTRACTING OFFICE

G.2 CONTRACTING OFFICER’S TECHNICAL REPRESENTATIVE (COTR)

G.3 TECHNICAL DIRECTIONS/RELATIONSHIP WITH USAID

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

G.5 PAYING OFFICE

G.6 ACCOUNTING AND APPROPRIATION DATA

SECTION H ‐ SPECIAL CONTRACT REQUIREMENTS

H.1 NOTICE LISTING CONTRACT CLAUSE INCORPORATED BY REFERENCE

H.2 AUTHORIZED GEOGRAPHIC CODE

H.3 LOGISTIC SUPPORT

H.4 LANGUAGE REQUIREMENTS

H.5 AIDAR 752.7007 PERSONNEL COMPENSATION (JULY 2007)

H.6 EMPLOYMENT OF THIRD COUNTRY NATIONALS (TCNS) AND COOPERATING COUNTRY

NATIONALS (CCNS)

H.7 FAR 52.228‐3 WORKER’S COMPENSATION INSURANCE (DEFENSE BASE ACT) (APR 1984)

H.8 AIDAR 752.7004 EMERGENCY LOCATOR INFORMATION (JUL 1997)

H.9 GOVERNMENT FURNISHED FACILITIES OR PROPERTY

H.10 AIDAR 752.231‐71 SALARY SUPPLEMENTS FOR HG EMPLOYEES (OCT 1998)

H.11 MANDATORY CONTRACT REQUIREMENTS

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H.12 SUBCONTRACTOR CONSENT

H.13 CONFLICTS OF INTEREST

H.14 DISCLOSURE OF INFORMATION

H.15 SPECIAL PROVISIONS

PART II ‐ CONTRACT CLAUSES

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 FAR 52.209‐7 INFORMATION REGARDING RESPONSIBILITY MATTERS (APR 2010)

I.5 FAR 52.209‐8 UPDATES OF INFORMATION REGARDING RESPONSIBILITY MATTERS (APR 2010)

I.6 FAR 52.203‐13 CONTRACTOR CODE OF BUSINESS ETHICS AND CONDUCT (DEC 2008)

I.7 FAR 52.222‐50 COMBATING TRAFFICKING IN PERSONS (FEB 2009) ALT. I (AUG 2007)

I.8 FAR 52.244‐2 SUBCONTRACTS (JUN 2007)

I.9 AIDAR 752.209‐71 ORGANIZATIONAL CONFLICTS OF INTEREST DISCOVERED AFTER AWARD (JUN 1993) 99

SECTION J ‐ LIST OF ATTACHMENTS

PART IV ‐ REPRESENTATIONS AND INSTRUCTIONS

SECTION K ‐ REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFERORS

K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

K.2 FAR 52.204‐3 TAXPAYER IDENTIFICATION (OCT 1998)

K.3 FAR 52.204‐6 DATA UNIVERSAL NUMBERING SYSTEM (DUNS) NUMBER (JUNE 1999)

K.4 FAR 52.204‐8 ANNUAL REPRESENTATIONS AND CERTIFICATIONS (FEB 2009)

K.5 AIDAR 752.226‐01 DISADVANTAGED ENTERPRISE REPRESENTATION (APR 1991)

K.6 FAR 52.230‐1 COST ACCOUNTING STANDARDS NOTICES AND CERTIFICATION (OCT 2008)

K.7 FAR 52.223‐13 CERTIFICATION OF TOXIC CHEMICAL RELEASE REPORTING (AUG 2003)

K.8 COMPLIANCE WITH VETERANS EMPLOYMENT REPORTING REQUIREMENTS

K.9 INSURANCE ‐ IMMUNITY FROM TORT LIABILITY

K.10 AGREEMENT ON, OR EXCEPTIONS TO, TERMS AND CONDITIONS

K.11 FAR 52.209‐7 INFORMATION REGARDING RESPONSIBILITY MATTERS (APR 2010)

K.12 FAR 52.209‐8 UPDATES OF INFORMATION REGARDING RESPONSIBILITY MATTERS (APR 2010)

K.13 SIGNATURE

SECTION L ‐ INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS

L.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

L.2 FAR 52.215‐1 INSTRUCTIONS TO OFFERORS—COMPETITIVE ACQUISITION (JAN 2004) ALT I

(OCT 1997)

L.3 FAR 52.252‐1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE (FEB 1998)

L.4 FAR 52.216‐1 TYPE OF CONTRACT (APR 1984)

L.5 FAR 52.233‐2 SERVICE OF PROTEST (SEP 2006)

L.6 QUESTIONS AND CLARIFICATIONS

L.7 GENERAL INSTRUCTIONS TO OFFERORS

L.8 UNNECESSARILY ELABORATE PROPOSALS

L.9 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL

L.10 INSTRUCTION REGARDING KEY PERSONNEL

L.11 BRANDING STRATEGY

L.12 INSTRUCTIONS FOR THE PREPARATION OF THE COST PROPOSAL

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SECTION M ‐ EVALUATION FACTORS FOR AWARD

M.1 OVERVIEW

M.2 CONTRACT AWARD – BEST VALUE

M.3 TECHNICAL EVALUATION CRITERIA

M.4 COST EVALUATION CRITERIA

M.5 DETERMINATION OF THE COMPETITIVE RANGE AND CONTRACT AWARD

M.6 CONTRACTING WITH SMALL BUSINESS CONCERNS AND DISADVANTAGED ENTERPRISES

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ACRONYMS

ADB Asian Development Bank

ADS Automated Directives Systems

AIDAR Agency for Development Acquisition Regulation

AMINEF America-Indonesia Exchange Foundation

BAN Badan Akreditasi Nasional (National Accreditation Board)

BAN-PT

Badan Akreditasi Nasional Perguruan Tinggi (National Accreditation Board for Higher Education)

BHP Autonomous Legal Status

CCN Cooperating Country National

CFR Code of Federal Regulations

CLIN Contract Line Item Number

COP Chief of Party

COTR Contracting Officer's Technical Representative

CPFF Cost-Plus-Fixed-Fee

DCOP Deputy Chief of Party

DIKNAS Kementerian Pendidikan Nasional (Ministry of National Education)

DIKTI Directorate General for Higher Education

FAR Federal Acquisition Regulations

FY Fiscal Year

GEMII Global Evaluation and Monitoring

GER Gross Enrollment Rate

GNP Gross National Product

GOI Government of Indonesia

HELM Higher Education Leadership and Management

IELSP Indonesian English Language Study Program

I-MHERE Indonesia - Managing Higher Education for Relevance and Efficiency

KOPERTIS Konsortium Perguruan Tinggi Swasta (Private University Corsortium)

KTI Kawasan Timur Indonesia (Eastern Indonesia Region) LKI Lembaga Pendidikan Tinggi Keguruan (a teacher training institution) MONE Ministry of National Education

MoRA Ministry of Religious Affairs

NGO Non-Governmental Organization

NICRA Negotiated Indirect Cost Rate Agreement

PAG Project Advisory Group

PMP Performance Management Plan

PTN Perguruan Tinggi Negeri (a public institution of higher education)

PTS Perguruan Tinggi Swasta (a private institution of higher education)

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QS Quacquarelli Systems

RFP Request for Proposal

SB Small Business

SUSNAS Type of national census survey

THES Times Higher Education

U.S. United State

UP University Partnership

USAID United State Agency International Development

USG United States Government

WB World Bank

YES Youth Exchange and Study

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PART I - THE SCHEDULE

SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

The purpose of this contract is to provide technical assistance and services as described in detail in Section C, Statement of Work for the implementation of USAID Indonesia’s “Higher Education Leadership & Management (HELM) Project”.

B.2 CONTRACT TYPE AND CONRACT SERVICES

This is a Cost-Plus-Fixed-Fee (CPFF) completion contract. For the consideration set forth below, the Contractor shall achieve the performance objectives and deliverables or outputs described in Section C and the additional requirements of Section F and H, in accordance with the performance standards specified herein.

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

B.3.1 The estimated cost for the performance of the work required hereunder, exclusive of fixed fee, if any, is $ ___________. The fixed fee, if any, is $ __________. The total estimated cost plus fixed fee, if any, is $ ____________.

B.3.2 Within the estimated cost plus fixed fee (if any) specified in paragraph B.3.1 above, the amount currently obligated and available for reimbursement of allowable costs incurred by the Contractor (and payment of fee, if any) for performance hereunder is $__________. The Contractor shall not exceed the aforesaid obligated amount nor will the Government be responsible for costs incurred should the Contractor do so.

B.3.3 Funds obligated hereunder are anticipated to be sufficient through (to be determined at time of award).

B.4 CONTRACT LINE ITEM NUMBERS AND CEILINGS

B.4.1 The contract line item numbers (CLINs) in Section B.4.3 below are based on (1) the Contractor’s original proposal and/or final proposal revision, which was accepted by USAID through award of this contract, and which is incorporated herein by reference and made a part of this contract.

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B.4.2 Without the prior written approval of the Contracting Office, the Contractor may not exceed the total estimated cost set forth in the budget hereunder or the obligated amount, whichever is less.

B.4.3 PRICE SCHEDULE

CLIN DESCRIPTION Year 1 Year 2 Year 3 Year 4 Year 5 Total

Component A -Provide Analytical Support for Strategic Planning and Policy Analysis at DIKTI

Fixed Fee (if any) $_____ $_____ $_____ $_____ $_____ $________

002 Component B - Design

Approaches that Achieve Effective Implementation of Key Reforms Across Sectors

003 Component C - Increase

Management Capacity and Improve Performance at Institutional Level

004 Component D -

Strengthen Graduate- Level Programs about Higher Education

005 Component E - Special

Initiatives

Fixed Fee (if any) $_____ $_____ $_____ $_____ $_____ $________

Total Estimated Costs

Plus Fixed Fee (if any)

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B.4.4 The Contractor is not allowed to exceed each CLIN line item nor is authorized to shift funding between CLINs without prior written approval of the Contracting Officer.

B.5 INDIRECT COSTS

Pending establishment of revised provisional of final indirect cost rates for each of the Contractor’s accounting periods which apply to this contract, allowable indirect costs shall be reimbursed on the basis of the following negotiated provisional or predetermined rates applied to the bases which are set forth below:

Description Year 1 Year 2 Year 3 Year 4 Year 5

Type of Rate:

Base of Application:

Period:

(To be determined at time of award)

B.6 ADVANCE UNDERSTANDING ON CEILING INDIRECT COST RATES AND

FINAL REIMBURSEMENT FOR INDIRECT COSTS

B.6.1 For each of the Contractor’s accounting periods during the term of this contract, the parties agree as follows:

(1) The distribution base for establishment of final overhead rate is

(2) The distribution base for establishment of final G & A rate is

B.6.2 The Contractor will make no change in its established method of classifying or allocating indirect costs without the prior written approval of the Contracting Officer.

B.6.3 Reimbursement for indirect costs shall be at final negotiated rates, but not in excess of the following ceiling rates:

Description Year 1 Year 2 Year 3 Year 4 Year 5

Type of Rate:

Base of Application:

Period:

(To be determined at time of award)

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B.6.4 The U.S. Government will not be obligated to pay any additional amount should the final indirect cost rates exceed the negotiated ceiling rates. If the final indirect cost rates are less than the negotiated ceiling rates, the negotiated rates will be reduced to conform with the lower rates.

B.6.5 This understanding shall not change any monetary ceiling, obligation, or specific cost allowance or disallowance. Any changes in classifying or allocating indirect costs require the prior written approval of the Contracting Officer.

B.7 REIMBURSABLE COSTS

B.7.1 The U.S. dollar costs allowable shall be limited to reasonable, allocable and necessary costs determined in accordance with FAR 31 (Contract Cost Principles), A-21 (Cost Principles for Educational Institutions), A-122 (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), may be reimbursable under this contract..

[END OF SECTION B]

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SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 INTRODUCTION

The ultimate goal of USAID education programs is to collaborate with the Government and people of Indonesia to improve the academic performance of their basic and higher education sectors, so that the education services will be at high quality, and more relevant to the economic and social growth of the country. This goal is articulated as the “Assistance Objective” statement of USAID Indonesia’s 2010-2014 strategic plan for education: to help “students [be] better prepared for success in learning and work.”

As shown in the Results Framework (see next page), USAID will have two complimentary projects in higher education. A separate University Partnership project (currently under development) will improve the quality of teaching and research at targeted university departments. But with over 2,800 institutions of higher education in the country, student enrollments over 4 million, and significant amounts of public and private resources being invested each year, the performance of the higher education system in Indonesia is dependent on much more than the accomplishments of a handful of institutions. The implementation of the GOI higher education strategy, as well as recent debates regarding higher education laws and policies, are fundamentally altering the role of the central government and increasing the importance of institution-level governance, management and decision-making. The reform strategy calls for significant leadership and expanded governance at the institutional level;

increased levels of institutional quality decision-making regarding academic programs, personnel practices, and collaboration with external stakeholders; substantial changes in resource development, revenue generation and financial management; and enhanced accountability and transparency at the institutional level, particularly with regard to financial management and quality assurance. As a result, current university administrators across the system face a challenging transition. Their success or failure in making that transition will have serious implications for whether or not their institutions can effectively prepare students for work and valuable roles in Indonesia’s social and economic development.

This document summarizes the “Higher Education Leadership, and Management” (HELM) project, to be implemented under a five-year contract. This project will provide technical assistance to strengthen the capacity of Indonesian higher education institutions to perform effectively in four core areas: financial management; general administration and management;

quality assurance; and collaboration with external stakeholders. These core management areas have been selected after thorough consultation with the Directorate General for Higher Education (DIKTI) at the Ministry of National Education (MONE). These areas are critical to enabling institutions to adopt, deliver and sustain quality teaching, research and service. Absent such capacity strengthening, it is difficult to see how the targeted higher education institutions will make and sustain major improvements in how well they prepare students for success in learning and work.

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In addition, effective approaches in these core management areas are essential for Indonesian higher education institutions to achieve the levels of access and transparency required by the government and increasingly expected by the general public.

The technical assistance will target a select set of strategically identified higher education institutions as well as the Directorate General for Higher Education (DIKTI) at the Ministry of National Education (MONE). Activities conducted at the higher education institutions shall develop models and approaches in each of the four management areas that will be implemented at the initially targeted institutions and subsequently disseminated to additional higher education institutions. The resulting improvements in management capacity will then enable systematic improvement of quality teaching, research and service programs across the country.

Support to DIKTI will strengthen leadership of higher education reforms, and also improve DIKTI’s performance related to fostering and facilitating the implementation of reform across the country. For example, the project will help DIKTI develop policies, materials, outreach, training and assistance programs conducive to the system-wide adoption and implementation of the aforementioned leadership and management approaches.

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RESULTS FRAMEWORK

Assistance Objective

Intermediate Result

Sub-Intermediate Result (Outcomes)

Outputs

Inputs

Students Better Prepared for Success in Learning and Work

IMPROVED QUALITY OF

HIGHER EDUCATION

Increased Management Capacity of Indonesian

Higher Education System

Improved Teaching, Research and Service at Targeted University

Departments

Improved Teaching Methodologies, Research Practices, and Service and

Extension Programs in Select Disciplines

Improved Approaches to University Leadership and Management, Financial Management, Quality Assurance, and Collaboration with

External Stakeholders

University partnerships to improve Human and Institutional Capacity of selected university departments (Program Component 2)

Through

“University Partnership (UP)” Project

Technical Assistance to DIKTI and Indonesian Higher Education

Institutions (Program Component 1)

Through

“Higher Education Leadership and

Management (HELM)” Project

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C.2 BACKGROUND

The Government of Indonesia has made important strides in higher education: burgeoning enrollment and increased education attainment, staff/student ratios internationally competitive, increased percentage of teaching staff with advanced degrees, and reinvigorated local research capacities and advance knowledge generation in select areas. However, the demand for skilled human resources and new knowledge is accelerating, and Indonesian higher education institutions lack the quality needed to meet the demands of national development.

Unless otherwise specified, the term “university” is used in this document in a generic sense, to collectively refer to all institutions of higher/tertiary education (without distinguishing between colleges, institutes, and universities).

C.2.1 Key Trends in Indonesian Higher Education

Concerns about access to higher education are increasing

Participation and gross enrollment in higher education has increased significantly. As recent as 1940, there were only 200 higher education students in the entire country. In 2008, there were over 4,375,000, and system differentiation is so developed that 13% of student enrolment is in religiously-based institutions of higher education.1 Over the past five years (2003-2007), the gross enrollment rate for higher education has increased 50% from 11.8% to 17.3% for the 19-24 age group2. Indonesians are reaching considerably higher levels of education than their parents’ generation and are pursuing a variety of degrees ranging from one-year “D” diplomas to four-year “S” degrees. More high school graduates are continuing on to institutes and universities, and the transition rate reached 43% in 20073, but with so many Indonesian students having dropped out of the formal education system even before high school (senior secondary), the number of young people participating in higher education is far below what most observers think the country needs. As a group, graduates from institutions of higher education have only increased from 3.5% to 5.4% of the total labor force from 1996 to 2005, a net addition of 2.18 million professional workers. This number is considered insufficient to support the achievement of the nation’s development objectives, including but not limited to Indonesia’s efforts to foster economic growth via increases in higher value-added production. In a competitive global economy wherein an educated workforce is a critical asset, Indonesia needs to foster gross enrollment rates for higher education that will provide the country with the levels and types of human capital needed to support economic growth.

Part of the recent increases in higher education enrollment and attainment reflect the rapid expansion and proliferation of higher education institutions providing access to higher education in Indonesia—now nearly 3,000 institutions. This is remarkable considering that most of the

1 Figures based on 2007/2008 data from the Indonesian Ministry of Education (MONE) available at www.depdiknas.go.id/statistik/0708. Within MONE higher education, 3,805,287 students were enrolled, and within the MORA network, 570,067 students were enrolled.

2 World Bank, page 67, citing data from MONE/DIKTI (2008) and BPS (2008).

3 World Bank, page 81, citing MONE PSP data.

USAID/Indonesia RFP SOL-497-11-000004 Page # 16 of 144 pages oldest institutions only date from the 1940’s and 1950’s. However, the majority of the new institutions are recently established, private, and not subject to rigorous quality assurance.

Transparency and accountability are typically low, and the quality of education at many institutions is questionable.

While a full analysis of how economic status affects higher education GER is not available, it is clear that significantly lower numbers of students from the bottom two economic quintiles participate in higher education4. Part of the pattern is established earlier in the educational path:

there is an approximately 20 percentage point difference between the poorest and richest quintile in enrollment at junior secondary, and approximately 50 percentage point difference in senior secondary5. Yet for higher education, even the participation of the middle economic quintile is relatively low. As a result, GER for the lower three economic quintiles combined is only 9.46%, which is actually a decline compared to a 2001 study. The GER data raises concerns that Indonesia’s poor are increasingly being left out of higher education and the possibility that current higher education practices and approaches might exacerbate gaps in who benefits from the economic opportunity, work success and poverty reduction that a higher education would provide.

Economic Quintile Gross Enrollment Rate (Higher Education) Q1 (lowest) 1.10 % Q2 2.72 % Q3 5.64 % Q4 18.25 % Q5 61.42 %

There is also significant regional variation in transition rates, with urban areas heavily favored6.

This indicates that Indonesia’s vast rural populations continue to lack the level of education needed to significantly enhance their social and economic welfare. Anecdotal evidence indicates that factors affecting low participation also affect the rural-urban variation: income levels relative to cost, geographic proximity of higher education opportunities, and inadequate preparatory education.

The Government of Indonesia provides limited public funding for higher education and there are few indications that such funding levels are likely to change, despite the recognition of higher education’s importance to Indonesia’s social and economic development. Over the last 20 years, public expenditure on higher education has averaged less than 3 percent of the national budget and less than one half of one percent of Gross National Product (GNP). Recent WB data regarding higher education spending by MONE and MORA indicates that Indonesia’s public expenditures as a % of GDP are among the lowest in the world, though private resources compensate to some extent for the low spending. As institutions struggle to comply with the

4 A study from 2001 found that GER for the lowest economic quintile was 3.3% and for the second lowest quintile group was 4.8%. See World Bank, page 84. See also forthcoming study by World Bank “Tertiary Education Financing in Indonesia”. Preliminary results of that effort provided data for this section.

5 ADB constraints study, slide number 44; presumably based on SUSNAS or DIKNAS data.

6 World Bank, page 66.

USAID/Indonesia RFP SOL-497-11-000004 Page # 17 of 144 pages enrollment requirements they will likely seek increased resources and support from the central government.

However, the bulk of that private source funding is in the form of fees and levies charged to students. To the extent that Indonesia’s lower income populations cannot afford such fees and levies, their access to and participation in higher education will continue to be limited. Absent new approaches to financial management, resource development, revenue generation, and cost control, it will be difficult to expand higher education access and participation to the two or even three lowest economic quintiles, particularly given the government’s limited funding for higher education. This further constrains the ability of such persons to prepare themselves for or contribute to the economic opportunities and work emerging in Indonesia

The unit costs of Indonesian higher education are difficult to determine. Subsidized operations and current approaches to funding, financial management, and accounting do not allow individual institutions or central MONE to track actual unit costs easily7. This makes transparency, cost control, and accountability difficult. DIKTI is trying to support the development of new financial management and accounting approaches, and the delineation of policies supportive of such approaches that will allow for easier determination of unit costs, and better analysis of the returns achieved by GOI funding and support. The possibility of political and social unrest is significant, as many perceive that the price of higher education is too high for the three lowest economic quintiles.

Skills and capacities of teaching staff are a key constraint

The teaching staff at institutions of higher education in Indonesia number approximately 155,000, with a resulting student/teacher ratio of approximately 1:30, consistent with international standards. However, only an estimated 11,000 of the teaching staff (7%) have Doctorates, while 61,000 (39%) have Master degrees. Both percentages are low by international standards.

Moreover, about 70 percent of the teaching staff was educated in the social sciences, rather than other fields vital to fostering economic growth or reducing poverty in today’s global economy.

As a consequence, Indonesian higher education institutions lack the number of qualified faculty needed to help students develop the knowledge and/or technical skills that are key to developing Indonesia’s economic competitiveness. Nor is it clear that a sufficient number of faculty staff in critical sectors – engineering, agriculture, and computer science – have the level of knowledge vital to professionalizing these disciplines.

Numerous formal and informal assessments indicate that the majority of lecturers at higher education institutions neither employ effective instructional methodologies nor use relevant, high-quality curriculum. The problem is exacerbated by the fact that low salaries provide little incentive for faculty to invest significant time in improving pedagogy or curriculum. If Indonesia’s higher education institutions are going to produce graduates with the knowledge and

7 Part of the challenge is structural and legal, because it is not clear how to allocate recurrent budgets as block grants to state-owned entities, and funding may not be adequately tied to performance (see World Bank report, pages 70 and 88).

USAID/Indonesia RFP SOL-497-11-000004 Page # 18 of 144 pages skills needed to participate in and contribute to Indonesia’s economic and social development, and to succeed in learning and work, the qualifications and instructional behaviors of their instructors will need to improve significantly.

Quality and relevance of academic programs is a key constraint

Furthermore, there are significant challenges to ensuring the quality and relevance of the programs taught. The quality and relevance of the attained degrees and education varies significantly, and in most cases is inadequate to the needs of private and public sector employers, and the broader needs of Indonesia’s social and economic development. Employer input regarding the knowledge and skill needed by prospective graduates is extremely limited and in many cases non-existent, with the result that the quality of graduates is often out of synch with what is needed in the labor market. Academic programs are often excessively theoretical and generally are neither developed nor delivered in collaboration with practitioners8. Consequently, they frequently fail to help students build adequate practical knowledge or key skills in problem definition, problem solving, and critical thinking.

Quality research (applied or basic) regarding critical issues and sectors (such as agriculture or engineering) is lacking and the needs of external stakeholders do not sufficiently inform research agendas or research funding allocation. Participation in internationally-recognized academic research is low. As a result of these and other problems, Indonesia’s performance against international higher education rankings and indices is poor. According to the 2008 Times Higher Education (THES) and Quacquarelli Symons (QS) ranking, the country’s universities rank lower than those in Malaysia, Thailand, the Philippines and other countries in the region9. Numerous interventions at both the system and institutional level are needed to significantly improve the quality and relevance of Indonesian higher education, and thereby better prepare students for success in learning and work.

Institutional-level management capacities are limited

The challenge for the leaders of higher education in Indonesia is to provide graduates with skills to become successful in learning and work while also contributing to Indonesia’s economic and social development. The sector needs to increase the participation rate in higher education without compromising quality and do a better job in improving students’ “soft skills” to improve their creativity, initiative, innovation and experiential knowledge. Moreover, if Indonesia is committed to ensuring higher education access to prospective students from rural areas and/or the two lowest economic quintiles, scholarships, student loans, and vouchers and other programs which ensure such access will likely be required.

8888 See Assessment of Higher Education Institutional Capacity in Selected Geographic and Subject Areas, produced for USAID/Indonesia under Task Order 25 of the Global Evaluation and Monitoring (GEMII) BPA, EDH- E-25-08-00003-00, prepared by the Aguirre Division of JBS International, Inc.

9 Times Higher Education ranking accessed at:

http://www.timeshighereducation.co.uk/Journals/THE/THE/17_August_2007/attachments/WORLDRANKINGS200 8.pdf.

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For the past few decades, administrators at public institutions of higher education conducted their responsibilities in the context of a centralized, highly bureaucratic system wherein the national government exercised a great deal of control over resources and decision-making. Many observers asserted that the system was inefficient and lacked adequate transparency and accountability. Human resource management, information systems, quality assurance, and monitoring and evaluation were all weak.

However, in recent years, continuing changes in the higher education law, and the implementation of the GOI higher education strategy, are fundamentally altering the role of the central government and increasing the importance of institutional level governance, management and decision-making. Management practices, administrative behaviors, and substantive skill sets that were appropriate to the previous higher education system are not appropriate to the emerging higher education system. The emerging system ostensibly calls for significant leadership and expanded governance at the institutional level; increased levels of institutional decision-making regarding academic programs, personnel practices, and collaboration with external stakeholders;

substantial changes in resource development, revenue generation and financial management; and enhanced accountability and transparency at the institutional level, particularly financial management and quality assurance.

As a result, current university administrators face a challenging transition. Their success or failure in making that transition will have serious implications for whether or not their institutions can effectively prepare students for work and valuable roles in Indonesia’s social and economic development. Many public sector institutions claim that changes are needed to strengthen information systems, human resource management, quality assurance, and monitoring and evaluation. Others point out that institutions throughout the system (including DIKTI itself) need significant technical assistance if they are going to facilitate, develop and implement the leadership and institutional management approaches that support the development and sustained provision of quality higher education.

C.2.2 GOI Roles, Priorities, and Policies for Higher Education

The Directorate General for Higher Education (DIKTI) at the Ministry of National Education (MONE) is responsible for setting all policies for the higher education sector, and also oversees the public spending on higher education, which is concentrated at the 82 public institutions of higher education.

In 2003, DIKTI launched a seven-year higher education strategy (2003-2010). While DIKTI is in the process of revising the higher education strategy—and is interested in technical assistance to support such an effort— the core components of the 2003-2010 strategy are still in force and likely to continue being in force under a new strategy. The strategy sets forth two broad priorities for improving the higher education sector: (a) improving the quality of academic programs within an era of increasing globalization; and (b) improving the equity of access and participation of high school graduates wishing to continue their education.

In light of those priorities, and given the longstanding challenges and problems described above, the strategy was built around three core elements (or “pillars”):

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National competiveness - The objective of higher education is to contribute to the nation’s competitiveness, demonstrating its relevance and sensitivity to its natural and social environment;

Decentralization and autonomy - Given the diversity and the nature of the world’s largest archipelago, the past policies of centralization are inappropriate for managing the higher education sector, and the system needs to be decentralized so that institutions can be more autonomous, requiring reform of legal framework and funding structures; and

Organizational health - To promote organizational health by improving internal management practices.

Building upon these pillars, the GOI strategy sought to develop a higher education system that promotes quality, access and equity, and autonomy.

The resulting plan for strategy implementation aimed to advance three core elements as follows:

Contribution to National Competitiveness

Promote greater public funding and improve the efficiency and effectiveness of its use;

Encourage institutions to focus on the quality of learning rather than on the quantity of graduates;

Shift from teaching-centered to learning-centered methods;

Improve pre- and in-service teacher training;

Use a system of competitive grants to encourage institutional development, investment and research;

Bundle any research strategy with the human resource development strategy;

Improve students’ “soft skills” to improve their creativity, initiative, innovation and experiential knowledge;

Develop flexible learning environments, different teaching styles and classroom practices;

Increase the participation rate in higher education without compromising quality;

Expand opportunities to higher education through life-long and distance education; and Promote affirmative action programs through scholarships, student loans, and vouchers.

Promotion of Autonomy

Create a regulatory environment and financial incentives;

Restructure public financing by conducting rigorous cost analysis, measure budget performance and reduce rigidity;

Introduce competitive funding mechanisms;

Synchronize budget sources with a consolidated and integrated budgeting system;

Reform university personnel management systems based on merit performance, institutional leadership, and accountability;

Consider alternative forms for employing university staffing;

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Provide tax incentives for private donation, university/industry collaboration, establishing science parks; and

Introduce formula-based restructuring of the recurrent budget.

Organizational Capacity

Develop the management capacity at DIKTI to carry out the reforms;

Rely more heavily on peer organizations to fulfill key functions;

Systematically internationalize the accreditation system;

Develop capacity building programs tailored to different levels of institutional needs;

Practice good governance procedures;

Encourage the merger of institutions, where beneficial;

Promote greater collaboration between institutions in teaching and research;

Encourage internal collaboration through interdepartmental and cross-faculty study;

Promote international understanding, in part through international exchange programs.

The bulk of this implementation strategy is likely to characterize the next strategy as well, in part because it is still appropriate and necessary. While there is a strong consensus regarding the need for reform, the achievement of reform has been difficult. Higher education institutions, including DIKTI, have lacked the wherewithal to develop new approaches and implement change and improvements.

In light of this situation, DIKTI has requested assistance to help DIKTI and a select set of Indonesian higher education institutions develop, implement, and disseminate effective solutions.

DIKTI and the Indonesian higher education community have also requested support for the development of institutional partnerships between U.S. and Indonesian higher education institutions. Such partnerships are both a means to address the various problems and challenges that have been identified, as well as an opportunity for Indonesian higher education institutions to participate in the global higher education and research community. Both the government and the Indonesian higher education community believe that such collaboration and participation will increase the likelihood that Indonesian higher education institutions can improve the quality of higher education, make more substantial contributions to the nation’s economic competitiveness and social development, and better prepare more students for success in learning and work. As the Director of DIKTI explained in the media, “Since they discovered the global university ranking system, with transparent indicators covering around 13,000 state and private universities in almost 160 countries worldwide, [Indonesian] universities began to realize that they still had many weak spots. These included lack of publications; many lecturers holding only bachelor's degrees; poor communication between students and lecturers; poor information and communication technology facilities; poor access to international journals and the limited number of Indonesians attending international forums. Because they are aware that the government's financial support, despite annual increases, cannot keep up with their need

USAID/Indonesia RFP SOL-497-11-000004 Page # 22 of 144 pages to improve quality, these universities … also seek to earn money from selling patents, as well as research and consultancy services.”10

Indonesian higher education institutions appear eager to meet international standards and they and DIKTI view collaboration with and technical assistance from the world’s leading higher education community as vital to doing so. Given USAID’s historic relationship with the U.S.

higher education community, USAID is uniquely positioned to help Indonesian universities expand their collaboration with U.S. institutions of higher education and enhance their participation in the global higher education community. Consistent with the Paris Declaration’s emphasis on country-driven development assistance, USAID has an excellent opportunity to support these areas of policy development and reform and government capacity development, while also helping to strengthen individual institutions and their contributions to Indonesia’s continued development. In fact, an integrated approach wherein policy level and institutional level efforts are jointly pursued in a mutually reinforcing manner is of particular interest.

C.2.3 Findings from USAID Assessment of Tertiary Institutions

In late 2008, USAID began preparations for a future program in higher education that would be broader and more robust than previous investments. Interest to link higher education activities to development goals led to a short list of sectors that might merit collaboration or investment through higher education institutions. An assessment conducted in March 2009 examined how USAID might strengthen capacity at the institutional level for selected geographic and subject areas in Indonesia that mirrored development priorities expressed by the technical offices of the mission: (a) public administration and management; (b) education administration and management; (c) business management, leadership and entrepreneurship; (d) agriculture extension and food security; and (e) legal education. The assessment team did make recommendations about how to improve the quality of specific programs such as education management, but also identified an array of constraints that appeared to characterize higher education system-wide. These included management capacity, absence of action-oriented research centers and the low level of practical content incorporated into many academic programs. Such findings confirmed key concerns that underlie GOI priorities and objectives for the higher education sector.

C.2.4 Other Donor Programming

The “Indonesia: Managing Higher Education for Relevance and Efficiency (I-MHERE)” project was launched in 2006 by the World Bank and DIKTI to enhance managerial capacities and financing mechanisms within the Ministry of National Education and higher education institutions to improve the efficiency, relevance, quality and equity of Indonesian higher education. This project consists of two components namely: (1) capacity building for the reform and oversight of the higher education system and (2) grants to improve academic quality and institutional performance. The I-MHERE project concluded in late 2009. Both the World Bank and DIKTI confirm that although the efforts of this program have been largely successful, the

10 Interview with Fasli Jalal from May 2008, as posted at http://dikti.go.id/index.php?