El_Salvador_Competitive_Project_SOL-519-16-000004.pdf

REQUEST FOR PROPOSALS (RFP)

No. SOL-519-16-000004

El Salvador Competitive

Issue date: April 19, 2016

Questions on RFP due: April 25, 2016

Response to questions planned: May 2, 2016

Closing Date for receipt of proposals: May 26, 2016, 4:00 pm, El Salvador time

USAID/El Salvador is soliciting proposals to issue a Cost Plus Fixed Fee Completion– (CPFF)

Contract. Prospective offerors are expected to develop constructive and effective proposals to provide the services described in Section C of this RFP. The total cost for this Contract is estimated between $50,000,000 to $56,000,000 over a 5-year period. The purpose of providing an estimated range for the contract is to help Offerors develop their proposals. Offerors will provide the lowest possible cost corresponding with their technical approach.

To this end, USAID/El Salvador issues this RFP consisting of the following:

Cover Letter

Section B – Supplies or Services and Prices/Costs

Section C – Description/Specs/Statement of Work

Section D – Packaging and Marking

Section E – Inspection and Acceptance

Section F – Deliveries or Performance

Section G – Contract Administration Data

Section H – Special Task Order Requirements

Section I – Contract Clauses

Section J – List of Documents Exhibits and other Attachments

Section L – Instructions, Conditions, and Notices to Offerors

Section M – Evaluation Factors for Award

Proposals must be received no later than 4:00 pm El Salvador time on the closing date indicated above and must be submitted with the name and address of the offeror and RFP number inscribed thereon. Questions concerning this RFP should be submitted via e-mail by the date and time specified above to iparraga@usaid.gov, Attention: Ms. Ileana Parraga, Contract Specialist and myself at nthunberg@usaid.gov.

This RFP is being conducted through full and open competition for which the procedures described in FAR Part 15, will apply. This RFP does not constitute an award commitment on the part of the U.S. Government nor does it commit the U.S. Government to pay for the costs

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SOL-519-16-000004

El Salvador Competitive Project

Table of Contents

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

B.2 CONTRACT TYPE

B.3 ESTIMATED COST PLUS FIXED FEE AND OBLIGATED AMOUNT

B.4 PAYMENT SCHEDULE

B.5 CONTRACT LINE ITEM SCHEDULE

B.6 ESTIMATED COST, FIXED FEE, AND OBLIGATED AMOUNT

B.7 INDIRECT COSTS

B.8 CEILING ON INDIRECT COSTS

B.9 COST REIMBURSABLE

B.10 PAYMENT OF FIXED FEE

B.11 MULTI-YEAR CONTRACT

SECTION C: DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C1. OVERVIEW OF THE PROJECT

C.2 BACKGROUND

C.3 STATEMENT OF WORK

C4. COLLABORATION WITH OTHER USAID INTERVENTIONS, USG AGENCIES,

AND OTHER DONORS

C5. OVERARCHING PRINCIPLES FOR IMPLEMENTATION AND MANAGEMENT .. 26

SECTION D – PACKAGING AND MARKING

D.1 AIDAR 752.7009 MARKING (JAN 1993)

D.2 BRANDING

D.1 BRANDING STRATEGY

D.2 AIDAR 752.7009 – MARKING (JAN 1993)

SECTION E - INSPECTION AND ACCEPTANCE

E.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE 38

E.2 INSPECTION AND ACCEPTANCE

E.3 PERFORMANCE EVALUATION

SECTION F: DELIVERIES OR PERFORMANCE

F1. DELIVERABLES

F2. MONITORING AND EVALUATION (M&E)

F.3 PERFORMANCE STANDARDS

F.4 752.7005 SUBMISSION REQUIREMENTS FOR DEVELOPMENT EXPERIENCE

DOCUMENTS (SEPTEMBER 2013)

F.5 752.242-70 PERIODIC PROGRESS REPORTS (OCTOBER 2007)

SECTION G – CONTRACT ADMINISTRATION DATA

G.1 CONTRACTING OFFICER'S AUTHORITY

G.2 ADMINISTRATIVE CONTRACTING OFFICE

G.3 CONTRACTOR’S PRIMARY POINT OF CONTACT

G.4 CONTRACTING OFFICER’S REPRESENTATIVE (COR)

G.5 ACCEPTANCE AND APPROVAL

G.6 PAYING OFFICE

G.7 ACCOUNTING AND APPROPRIATION DATA

G.8 AIDAR 752.7003 DOCUMENTATION FOR PAYMENT (NOV 1998)

SECTION H – SPECIAL CONTRACT REQUIREMENTS

H.1 LANGUAGE REQUIREMENTS

H.2 EXECUTIVE ORDER ON TERRORISM FINANCING

H.3 PROHIBITION AND ASSISTANCE TO DRUG TRAFFICKING

H. 4 CONFIDENTIALITY AND OWNERSHIP OF INTELLECTUAL PROPERTY

H.5 USAID DISABILITY POLICY – ACQUISITION (DECEMBER 2004)

H.6 302.3.5.9 NONDISCRIMINATION (JUNE 2012)

H.7 TITLE OF PROPERTY

H.8 VALUE ADDED TAX

H.9 ELECTRONIC PAYMENTS

H.10 AIDAR 752.228-70 MEDICAL EVACUATION (MEDEVAC) SERVICES (JULY . 57

2007) 57

H.11 AIDAR 752.228-3 WORKER’S COMPENSATION INSURANCE (DEFENSE BASE

ACT) (DEC 1991)

H.12 INSURANCE AND SERVICES

H.13 PROHIBITION ON THE USE OF FEDERAL FUNDS TO PROMOTE,

SUPPORT, OR ADVOCATE THE LEGALIZATION OR PRACTICE OF PROSTITUTION

– TIP ACQUISITION (MAY 2007)

H.14 SALARY SUPPLEMENT

H.15 ENVIRONMENTAL COMPLIANCE AND MANAGEMENT

H.16 ADS 206.3.12 ‐ COVERED PARTICIPANTS

H.17 SUBCONTRACTS

H.18 ACCESS TO CLASSIFIED INFORMATION

H.19 GENDER CONSIDERATIONS

H.20 KEY PERSONNEL

H.21 REPORTING OF FOREIGN TAXES (July 2007) H.22 ADS 302.3.5.19 USAID-Financed Third-party Web Sites (August 2013)

H.23 ADS 302.3.5.20 Conference Planning and Required Approvals (August 2013) H.24 ADS 302.3.5.21 USAID Implementing Partner Notices (IPN) Portal for Acquisition

(July 2014)

H.25 ADS302.3.5.22 Submission of Datasets to the Development Data Library (DDL)

(October 2014)

H.26 Rights in Data—General (OCT 2007) H.27 AIDAR 752.228-7 Insurance—liability to third persons. (July 1997)

H.28 AIDAR 752.245-70 Government property-USAID reporting requirements (July 1997)

H.29 AUTHORIZED GEOGRAPHIC CODE

H.30 NONEXPENDABLE PROPERTY PURCHASES AND INFORMATION

TECHNOLOGY RESOURCES

H.31 LOGISTIC SUPPORT

H.32 CONSENT TO SUBCONTRACTS

H.33 INTERNATIONAL TRAVEL APPROVAL

H.34 PROHIBITION OF ASSISTANCE TO DRUG TRAFFICKERS

H.35 GRANTS UNDER CONTRACTS

SECTION I- CONTRACT CLAUSES

NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

AIDAR 752.219-70 ................................................. USAID Mentor-Protégé Program. (July 2007)

AIDAR 752.252-2 .................................. AIDAR Clauses Incorporate by Reference (MAR 2015)

I.1 AIDAR 752.202-1 USAID Definitions Clause—General Supplement for Use in All

USAID Contracts (JAN 1990)

I.2 AIDAR 752.225-70 Source and Nationality Requirements (FEB 2012) I.3 AIDAR 752.228-70 Medical Evacuation (MEDEVAC) Services. (JULY 2007)

I.4 52.203-12 Limitation on Payments to Influence Certain Federal Transactions. (OCT

2010) 81

I.5 52.204-13 System for Award Management Maintenance. (JUL 2013) I.6 52.204-19 Incorporation by Reference of Representations and Certifications (Dec

2014) 87

I.7 52.209-6 Protecting the Government's Interest When Subcontracting With Contractors

Debarred, Suspended, or Proposed for Debarment. (OCT 2015)

I.8 52.209-9 Updates of Publicly Available Information Regarding Responsibility Matters.

(JUL 2013)

I.9 52.209-10 Prohibition on Contracting With Inverted Domestic Corporations. (NOV

2015) 90

I.10 52.215-8 Order of Precedence - Uniform Contract Format. (OCT 1997) I.11 52.215-21 Requirements for Certified Cost or Pricing Data and Data Other Than

Certified Cost or Pricing Data - Modifications. (OCT 2010) - Alternate IV (OCT 2010)

I.12 52.215-22 Limitations on Pass-Through Charges—Identification of Subcontract Effort

(Oct 2009)

I.13 52.216-7 Allowable Cost and Payment. (JUN 2013) I.14 52.216-8 Fixed Fee. (JUN 2011)

I.15 52.219-8 Utilization of Small Business Concerns. (OCT 2014) I.16 52.219-9 Small business subcontracting plan. (OCT 2015) I.17 52.219-9 Small business subcontracting plan. (OCT 2015) - Alternate II (OCT 2001)

I.18 52.222-1 Notice to the Government of Labor Disputes. (FEB 1997)

I.19 52.222-2 Payment for Overtime Premiums. (JUL 1990) I.20 52.222-17 Nondisplacement of Qualified Workers (May 2014)

I.21 52.222-35 Equal Opportunity for Veterans. (OCT 2015) I.22 52.222-36 Equal Opportunity for Workers with Disabilities. (JUL 2014) I.23 52.222-50 Combating Trafficking in Persons. (MAR 2015) I.24 52.222-50 Combating Trafficking in Persons. (MAR 2015) - Alternate I (MAR 2015)

I.25 52.222-56 Certification Regarding Trafficking in Persons Compliance Plan (Mar 2015)

I.26 52.225-25 Prohibition on Contracting with Entities Engaging in Certain Activities or

Transactions Relating to Iran—Representation and Certifications (Oct 2015)

I.27 52.228-3 Workers' Compensation Insurance (Defense Base Act). (JUL 2014) I.28 52.228-7 Insurance - Liability to Third Persons. (MAR 1996) I.29 52.230-2 Cost Accounting Standards. (OCT 2015) I.30 52.232-22 Limitation of Funds (Apr 1984)

I.31 52.252-2 Clauses Incorporated by Reference. (FEB 1998)

SECTION J- LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS

SECTION K- REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENT OF

BIDDERS………………

K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY

REFERENCE

K.2 52.203-98 PROHIBITION ON CONTRACTING WITH ENTITIES THAT REQUIRE

CERTAIN INTERNAL CONFIDENTIALITY AGREEMENTS-REPRESENTATION (APR

2015) 152

K.3 52.222-46 -- EVALUATION OF COMPENSATION FOR PROFESSIONAL

EMPLOYEES (FEB 1993)

K.4 52.204-8 Annual Representations and Certifications. (FEB 2016)

K.5 52.209-2 Prohibition on Contracting With Inverted Domestic Corporations-

Representation. (NOV 2015) K.6 52.209-5 Certification Regarding Responsibility Matters. (OCT 2015)

K.7 52.209-7 Information Regarding Responsibility Matters. (JUL 2013)

K.8 FAR 52.209-XX REPRESENTATION BY CORPORATION REGARDING A

DELINQUENT TAX LIABILITY OR A FELONY CRIMINAL CONVICTION (Deviation

OAA-DEV-14-02c) (August 2014)

K.9 52.219-1 Small Business Program Representations. (OCT 2014) k.10 52.222-22 Previous Contracts and Compliance Reports. (FEB 1999)

K.11 52.230-1 Cost Accounting Standards Notices and Certification. (OCT 2015)

K.12 52.230-7 Proposal Disclosure--Cost Accounting Practice Changes. (APR 2005)

SECTION L- INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS

L.1 52.252-1 Solicitation Provisions Incorporated by Reference. (FEB 1998) L.2 52.204-7 System for Award Management. (JUL 2013) L.3 52.215-1 Instructions to Offerors Competitive Acquisition. (JAN 2004) - Alternate I

(OCT 1997)

L.4 52.216-1 Type of Contract. (APR 1984)

L.5 52.233-2 Service of Protest. (SEP 2006)

L.6 GENERAL INSTRUCTIONS TO OFFERORS

L.7 PROPOSAL SUBMISSION

L.8 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL

L.9 INSTRUCTIONS FOR THE PREPARATION OF THE COST PROPOSAL

SECTION M: TECHNICAL EVALUATION CRITERIA

M.1 GENERAL INFORMATION

M.2 TECHNICAL EVALUATION CRITERIA

M.3 COST PROPOSAL EVALUATION

M.4 SOURCE SELECTION

M.5 DETERMINATION OF THE COMPETITIVE RANGE

M.6 CONTRACTING WITH SMALL BUSINESS CONCERNS AND

DISADVANTAGED ENTERPRISES

M.7 BEST VALUE

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

To increase El Salvador’s key economic sectors competitiveness by strengthening capacity of micro, small and medium enterprises (MSMEs) to compete in domestic and export markets, and improving the national and subnational business environment to encourage private sector investment, innovation, and business expansion to foster economic growth and job creation.

B.2 CONTRACT TYPE

This is a Cost-Plus-Fixed-Fee (CPFF) Completion-Type Contract. The contractor shall perform the services detailed under Section C of this contract.

B.3 ESTIMATED COST PLUS FIXED FEE AND OBLIGATED AMOUNT

(a) The estimated cost for the performance of the work required hereunder, exclusive of fixed fee, if any, is: $_______. The estimated fee is $_________. The 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 hereunder is $______.

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

(d) 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)

B.4 PAYMENT SCHEDULE

The paying office is:

USAID/El Salvador

Financial Management Office

Email: sansalvch@usaid.gov

Note: Electronic invoices are required and must be submitted to the email address above.

mailto:sansalvch@usaid.gov

B.5 CONTRACT LINE ITEM SCHEDULE

The following budget table captures the final negotiated cost elements for the performance of the work required hereunder:

The Total Estimated Cost of this contract is $______ for a five year period.

The summary budget for the 5 year period is as follows:

Direct Labor $ ______________________

Other Direct Costs* $ ______________________

Indirect Costs $ ______________________

Grants Fund $ 11,000,000

Fixed Fee $ ______________________

Total Estimated Cost plus Fixed Fee $ ______________________

* Other Direct Costs include: Travel, Allowances, etc.

NOTE: The Contractor will not be paid any sum in excess of the total estimated cost. The only person authorized to commit or obligate additional funds is the Contracting Officer. Incurrence of costs in excess of the total amount obligated based on directions received from any individual other than the Contracting Officer, and without prior Contracting Officer’s approval, shall not be reimbursed to the Contractor.

LIMITATION OF FUNDS

The ceiling price of this contract is $________. In accordance with FAR clause 52.232-22, funds currently obligated under this contract are limited to $________. The contractor is not authorized to incur expenses in excess of $_________ and shall notify the Contracting Officer in writing whenever it has reason to believe that the costs it expects to incur under this contract in the subsequent 60 days, or when added to all costs previously incurred will exceed 75% of the total obligated amount.

B.6 ESTIMATED COST, FIXED FEE, AND OBLIGATED AMOUNT

(a) 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 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 hereunder is $__________. The

Contractor shall not exceed the aforesaid obligated amount.

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

B.7 INDIRECT COSTS

For the Prime Contractor:

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

Description Rate Base Type Period

TBD 1/ 1/ 1/

1/Base of Application:

Type of Rate:

Period:

For Major Subcontractor(s)*:

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

1/Base of Application:

Type of Rate:

Period:

* “Major subcontractor (s)” is those subcontractors whose proposed costs exceed 20 percent of the contract value.

B.8 CEILING ON INDIRECT COSTS

For the Prime Contractor:

(1) Reimbursement for indirect costs shall be at the lower of the negotiated final rates or the following ceiling rates:

TBD 2/ 2/ 2/

(2) The 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 to the lower rates.

(3) 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.

For the Major Subcontractor(s):

(4) Reimbursement for indirect costs shall be at the lower of the negotiated final rates or the following ceiling rates:

TBD 2/ 2/ 2/

(5) The 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 to the lower rates.

(6) 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.

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

B.9 COST REIMBURSABLE

The U.S. dollar costs allowable shall be limited to reasonable, allocable and necessary costs determined in accordance with FAR 52.216-7 Allowable Cost and Payment, FAR 52.216-8

Fixed Fee, if applicable, and AIDAR 752.7003 Documentation for Payment.

B.10 PAYMENT OF FIXED FEE

Within 60 days (or earlier, but prior to the payment of any fixed fee), the Contractor must submit a Fixed Fee Payment schedule as subject to FAR 52.216-8. Fixed Fee shall be allocated based on concrete measurable progress towards the targets set forth in the approved Annual Work-plan and associated Performance Monitoring Plan. Payment of the Fixed Fee, subject to FAR 52.216-

8, may then be made upon receipt of a proper invoice.

B.11 MULTI-YEAR CONTRACT

All contract CLINs under this award are considered non-severable and constitutes a multi-year contract as defined in FAR 17.103. Therefore, this contract is subject to the requirements of FAR

17.106. In the event that the Government cancels requirements for services in subsequent program years under this contract, the following conditions will apply: [Amount and dates to be filled in at time of award]

Cancellation Dates:

Contract Year 2: DATE TBD, 2017 Amount: $___TBD___

Contract Year 3: DATE TBD, 2018 Amount: $___TBD___

Contract Year 4: DATE TBD, 2019 Amount: $___TBD___

Contract Year 5: DATE TBD, 2020 Amount: $___TBD___

Cancellation Ceiling:

This is a CPFF type contract where the Contractor is authorized to be reimbursed for all costs which are allowable in accordance with FAR 52.216-7, “Allowable Costs and Payment (June

2013).” Therefore, the Contractor will not incur any costs which would have been amortized over the life of the contract should the contract be cancelled in accordance with FAR 52.217-2, “Cancellation under Multiyear Contracts (October 1997).” Therefore, the cancellation ceiling for each cancellation date is [TBD].

END OF SECTION B

SECTION C: DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C1. OVERVIEW OF THE PROJECT

This Statement of Work (SOW) is designed to procure a new five-year “EL SALVADOR

COMPETITIVE” Project, hereinafter “the Project,” with the intent of increasing El Salvador’s key economic sectors competitiveness by strengthening capacity of micro, small and medium enterprises (MSMEs) to compete in domestic and export markets, and improving the national and subnational business environment to encourage private sector investment, innovation, and business expansion to foster economic growth and job creation. The Development Hypothesis is: if firms improve their business management skills through innovation and implementation of new technologies, the government improves the regulatory framework and streamlines doing business procedures, and the public and private sectors work together to achieve mutual economic growth objectives, El Salvador’s key economic sectors will be more competitive.

This Project builds upon lessons learned from prior development investments and complements current USAID/El Salvador activities to enable Salvadoran businesses to become more competitive in global markets while ensuring participation of men and women, including those with disabilities and those from the lesbian, gay, bisexual, transgender, and intersex (LGBTI) community. The Project will partner with national and subnational governments, the private sector, civil society organizations, universities, and technical/vocational institutions.

Competitiveness is the ability of a firm or a nation to offer products and services that meet the quality standards of the domestic and world markets at prices that are competitive and provide adequate returns on the resources employed or consumed in producing them. The World

Economic Forum, in its Global Competitiveness Report, defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of an economy. National competitiveness is said to be particularly important for small, open economies, which rely on trade, and typically foreign direct investment, to provide the scale necessary for productivity increases to drive increases in living standards.

This Project is part of the Improving Business Enabling Environment Project No. 519-0469 and the Increasing Business Productivity Project No. 519-0470, which help achieve USAID/El

Salvador’s FY 2013-FY 2017 Country Development Cooperation Strategy (CDCS)

Development Objective 2 (DO2): Economic Growth Opportunities in Tradables Expanded (See

Section J for Website link), and respond directly to Intermediate Results (IR) 2.1 Business

Enabling Environment Improved and 2.2 Productivity of Targeted Business Improved.

The Project will advance the U.S. Strategy for Engagement in Central America (CEN Strategy), and also contributes to the goals of the Plan of the Alliance for Prosperity in the Northern

Triangle. Additional information regarding these strategic documents is further discussed in the

Background Annex to the RFP El Salvador Competitive. To these ends, the Project will advance two inter-related objectives:

1) Equipping for Growth, will increase the capacity of the private sector to compete in the export value- and supply-chains. Equipping for Growth will improve business development service providers to support MSMEs increase through innovation and implementation of new technologies, their value added in export-oriented value- and supply-chains. The impact of this objective will be measured by the annual change in El Salvador’s non-traditional products exports.

2) Governing for Growth, will strengthen the national and subnational business enabling environment to make El Salvador more competitive. Governing for Growth, will improve capacity of financial institutions to serve efficiently the large market segment of MSMEs, and improve the business enabling environments at the national and subnational levels. The impact of this objective will be measured by the country’s improvements in the World Economic Forum

Global Competitiveness Report.

C.2 BACKGROUND

A complete background of the Project, including context, collaboration with the Government of

El Salvador, and the development challenge is provided separately as an attachment to Section

J.1 of the solicitation.

C.3 STATEMENT OF WORK

The Project’s beneficiaries will be 10,000 MSMEs and 20 municipal governments. Based on a market system approach, MSMEs selected will have to be operating in any of the 16 industrial and service sectors that have the greatest potential for economic growth, as determined by the

Government of El Salvador (GOES) National Policy of Development, Diversification and

Productive Transformation of El Salvador (See Section J for Website link.) At least 35 percent of MSMEs must be owned or managed by women. The target for the current SME

Development Activity is that 30 percent of all beneficiaries are women-led SMEs. Latest progress report from the contractor shows that the Activity is already reaching approximately 35 percent of women-led SMEs. In addition, similar projects funded by international donors such as

IDB or GIZ establish targets ranging between 30 to 40 percent. Additional efforts to include more women participation in MSMEs will bring value-added to the Project. The targeted sectors may be adjusted during the course of implementation as new information becomes available.

This Project will focus on the creation of partnerships with the GOES and private sector and will not provide support to sectors which create a high risk of being directly linked to a potential relocation of U.S. jobs. ADS 225 provides guidance to ensure that USAID-funded “trade and investment” activities comply with Section 7086 of the FY 2015 Department of State, Foreign

Operations, and Related Programs Appropriations Act, Division J of P.L. 113-235 to not provide financial incentives and other assistance for U.S. companies to relocate operations abroad if it is likely to result in the loss of U.S. jobs. There are limits on USAID activities that represent too high risk of being directly linked to a potential relocation of U.S. Jobs. See ADS 225.3.1.5.

Selected MSMEs will be located in any of the 50 municipalities as prioritized in the El Salvador

Seguro Plan (See Section J for Website link.) If the Contractor considers that MSMEs from other municipalities should be included because of the municipality’s importance due to its extension, population, contribution to the economy, or other reasons, the Contractor may propose additional locations with an appropriate justification.

The GOES National Commission for Micro and Small Enterprise (CONAMYPE) classifies micro enterprises as those with up to 10 employees and up to $70,000 in annual gross sales.

Small enterprises have up to 50 employees and up to $800,000 in annual gross sales. Medium enterprises have up to 100 employees and up to $7 million in annual gross sales. Large enterprises have over 100 employees and over $7 million in annual gross sales (See Section J for

Website link.) Economic Project is concentrated in MSMEs, which account for 47 percent of total Gross Sales, and provide approximately 65.5 percent of total employment in the private sector.

Selected municipal governments will also be municipalities prioritized in the El Salvador

Seguro Plan. These municipalities may include some municipalities that were assisted under the

MCP Project, and could continue being assisted to strengthen the initiatives previously implemented.

As a results of this Project, MSMEs will have increased their management and business capacity and become more productive and competitive; have increased sales in domestic and international markets; and the national and subnational governments will provide a more pro-business enabling environment.

The below graphic is an illustrative results framework:

Improved MSMEs and Municipalities Competitiveness

Equiping for Growth (Increased Business Capacity)

Improved Business Development

Services to MSMEs

Improved MSMEs Use of Innovation and

Technology

Expanded Market

Access for MSMEs

Governing for Growth (Improved Business Enabling

Environment)

Expanded Access to

Finance for MSMEs

Improved Municipal

Services to Firms

Streamlined Policy, Regulatory and Procedural Processes

C3.1 Objective 1: Equipping for Growth (Increased Business Capacity)

MSMEs can create employment, be innovative, increase income, and contribute to national growth. To operate in a global economy, Salvadoran MSMEs must master basic business skills including finance, management, production and others. In addition, MSME owners/managers lack basic soft skills such as leadership, teamwork, empathy, delegation of tasks, and empowerment among others that limit their ability to be more productive and grow. MSMEs also need to be able to understand quality standards and comply with other technical requirements to access export markets. MSMEs need to master design and product development, have extensive knowledge of markets and technology, and become innovative to compete successfully in export markets.

USAID will continue to support partner GOES and private sector organizations that provide business development services to MSMEs to expand knowledge and skills mentioned above.

The Contractor will describe the process for identifying and selecting the proposed partner organizations, which will have to be approved by USAID. The Contractor will describe how these organizations will be supported, what mechanisms will be used to work with them

(subcontracts and/or grants), and how they will provide and sustain quality services to MSMEs to improve business management skills, apply innovation and technological developments to increase productivity, access markets and be able to compete using export supply and value chains.

The Project will support three components in this objective. Illustrative interventions and expected results are provided for each component. Compliance with the expected results will be monitored through the Annual Work Plans, the information provided in the Quarterly and

Annual Reports, and the indicators proposed in the Performance Monitoring Plan.

C3.1.1 Component 1: Increase Business Development Services to MSMEs

The purpose is to build GOES and private sector business development service providers’ capacity, through technical assistance, training, and information and communication technology provision to effectively help MSMEs increase productivity and competitiveness in global markets.

C3.1.1.1 Illustrative Interventions may include, but are not limited to:

Develop strategic alliances or partnerships with selected GOES and private sector business development service providers, including women-led organizations, to assist MSMEs increase their business capacity and manage more efficiently their businesses, improve the quality of products and services, develop new value-added products, and comply with standards and other technical requirements to access value and supply chains of export markets. Agreements or commitments reached must be stated in Memorandums of

Understanding or Letters of Intentions between the parties.

Plan and work with CONAMYPE to define the number, location, and specialization of new

Small Business Development Centers (or CDMYPEs in Spanish) that the GOES, private sector, and academia will add to the current network of 14 CDMYPEs in El Salvador. Plan and implement the necessary assistance that will be needed by the CDMYPE network to improve the quality of services to MSME clients. Support the CDMYPEs to expand the number of MSMEs served in the geographic territories assigned to each CDMYPE.

Increase the institutional capacity of the recently formed private association of CDMYPEs, or ACDMYPE to help identify gaps, plan and design tailored interventions, improve performance monitoring, and be eligible for support from international donors, including

USAID.

Conduct training for MSME business development service providers, promoting participation of women and men, to incorporate environmental directions including climate change to improve business production and efficiency. The purpose is to familiarize business development service providers, financial intermediaries, and MSMEs with information on the environmental effects of MSMEs and environmental mitigation actions that MSMEs can perform. As standard training will be used the USAID Environmental Guidance Chapter

Small Business Development (see link http://www.usaidgems.org/sectorGuidelines.htm)

C3.1.1.2 Expected Results (Outputs):

At least 25 partnerships established with GOES and private sector organizations across a minimum of 10 key industry and services sectors developed to provide more effective business development services to MSMEs.

A total of 9,000 MSMEs assisted by the CDMYPE network.

At least $150 million new sales (export and domestic) generated by the MSMEs assisted by the CDMYPE network and other government and private sector organizations.

At least 20,000 new jobs created by MSMEs assisted

At least two additional CDMYPES incorporated to the CDMYPE network for a total of 16

CDMYPEs across the country. MSMEs benefited by the two new CDMYPES will have to increase new sales by at least five percent during the first year. Staff and other operating expenses will be the responsibility of the Ministry of Economy.

At least 10 SME business development service providers trained once a year to incorporate environmental directions and climate change to improve business production and efficiencies.

C3.1.2 Component 2: Improved MSMEs Use of Innovation and Technology

The Contractor will promote innovation and technological development as fundamental tools to improve productivity and competitiveness of Salvadoran MSMEs. In addition, the Contractor will also support the creation of new businesses or start-ups in high-tech areas, encouraging participation of women. A Grant Fund for $1 million will be established to promote competition among start-ups and create a seed capital fund to sustainably finance start-ups. The Contractor would be responsible for proposing criteria for USAID approval to provide the seed capital to selected start-ups. Innovation represents an opportunity for Salvadoran MSMEs in key industry sectors to get into greater value added products and market niches by introducing innovation into their processes, product development, and business models. Innovation can help MSMEs develop effective products and services, improve processes, and transfer technologies to increase productivity and competitiveness.

C3. 1.2.1 Illustrative Interventions may include, but are not limited to:

Coordinate with GOES and private sector business development service providers

(recommended by the Contractor and approved by USAID) to develop innovative and/or technology initiatives in MSMEs operating in targeted sectors, leading to new products and services, improved business processes, and/or innovative business models.

Support “early-stage entrepreneurs” along with high technology start-ups in El Salvador.

Assist organizations promoting business startups such as the Ministry of Economy (See

Section J for Website link), FUSADES ProInnova (See Section J for Website link), and others to support start-up initiatives in priority sectors. The Contractor may encourage competition by organizing events where men and women entrepreneurs compete for seed capital in addition to technical assistance.

C3.1.2.2 Expected Results (Outputs):

At least 100 MSMEs implement innovation strategies leading to the development of new products, improvement of existing products, or improvement of business processes.

In collaboration with public and private organizations, at least 100 early-stage entrepreneurs and start-ups will be selected from competition events and assisted to implement business initiatives.

C3.1.3 Component 3: Expanded Market Access for MSMEs

The Contractor will improve MSMEs access to business links with prospective buyers in supply/value chain of export markets. MSMEs can benefit from their association with global companies, which comply with market requirements and put pressure on suppliers to improve quality, drive down costs, specialize, and constantly adapt and innovate. MSMEs often struggle to access business data and information that can be valuable to explore market opportunities and develop exports. Limited access to internet, the small scale of production, or a different language in target markets are often barriers for MSMEs to access export markets. The

Contractor will help MSMEs to overcome obstacles, comply with export market requirements, link to buyers and otherwise expand business in international markets.

C3.1.3.1 Illustrative Interventions may include, but are not limited to:

Strengthen institutional capacity of GOES and private sector business development service providers promoting exports such as PROESA, the Ministry of Economy, COEXPORT, and others (See Section J for Website links.) Contractor will plan and provide technical assistance, training and hardware/software equipment if needed to these organizations to improve the services provided to MSMEs to access export markets, improve market research/prospection, participate in trade fairs, conduct commercial missions, and other export services needed.

Assist PROESA in the implementation of its Export Step by Step and Exporting On-line initiatives, and COEXPORT’s Exporters Circle.

Establish alliances with large enterprises that export to develop global value chains with

Salvadoran MSMEs suppliers. Develop creative, innovative, and sustainable interventions and tools to work with these large exporters to improve their MSMEs suppliers’ capacity to develop products in quantities, and with the quality and delivery reliability required.

Assist MSMEs effectively access market opportunities provided by the trade agreements El

Salvador has with several countries including the U.S., the European Union, and others, which offer a large number of potential consumers with high purchasing power but who demand high-quality products and services. Assist MSMEs to comply with health and safety, and technical requirements for market-entry to expand exports to these markets.

C3.1.3.2 Expected Results (Outputs):

At least 1,000 MSMEs received trade capacity building assistance to export

At least 10,000 entrepreneurs (disaggregated by sex) trained in export development areas

No less than 100 consultants from government and private sector business development service providers (disaggregated by sex) trained in export development areas.

C 3.2 Objective 2: Governing for Growth (Improved Business Enabling Environment)

The Project will address MSMEs’ access to financial services, which is one of the key limitations for business growth in El Salvador as indicated in the U.S. – GOES Partnership for Growth

Constraints Analysis (See Section J for Website link.) In addition, the Project will provide assistance to a selected group of municipalities that the Contractor will propose from the GOES

Plan El Salvador Seguro to improve municipal policies and services to the private sector.

Furthermore, there are regulations and procedures for businesses to operate in El Salvador at the subnational and national levels that could be streamlined to reduce the cost, time and effort invested, making the country more attractive for trade and private investment. The Project will support three components in this objective. Illustrative interventions and expected results are provided for each component. Compliance with the expected results will be monitored through the Annual Work Plans, the information provided in the Quarterly and Annual Reports, and the indicators proposed in the Performance Monitoring Plan.

C3.2.1 Component 1: Expanded Access to Finance for MSMEs

The Contractor will select and propose for USAID approval at least four financial institutions

(FIs) such as commercial banks and large microfinance institutions to assist them improve risk management in lending operations to MSMEs and develop products and services that respond to the financial needs of MSME clients.

C3.2.1.1 Illustrative Interventions may include, but are not limited to:

Identify and engage financial institutions willing to improve their MSME loan portfolios, develop selection criteria for USAID approval, and select at least four financial institutions that will receive assistance and be committed to serve large numbers of MSMEs in the country. The selection criteria will consider needs, conditions and realities of vulnerable populations.

Provide technical assistance to selected financial institutions to create and/or improve operational units to serve MSME clients, developing a MSME culture that is responsive to

MSME products and services. The assistance will also strengthen risk management systems;

improve customer service to support new financial products; develop new financial products based on movable assets as collateral; etc. Contractor may also assist financial institutions to apply for Development Credit Authority (DCA) guarantees if interested.

Strengthen the Ministry of Economy’s Productive Development Fund (FONDEPRO) (See

Section J for Website link), a co-finance mechanism for MSMEs to fund between 50 to 75 percent of the cost of implementing MSMEs initiatives requested to the Fund (i.e. export development, marketing, innovation, technology adaptation, etc.) Assist FONDEPRO to better evaluate MSME requests and streamline the grant approval process.

Identify international private equity funds to invest in equity capital in El Salvador, such as venture capital and other investment funds targeting MSMEs that require growth capital and expertise. Link the private equity fund with MSMEs who have high business growth potential. The equity fund will assess investment opportunities and ultimately may decide to invest in MSMEs to help them expand business.

Provide MSMEs that have the potential to receive equity investment with technical assistance to improve business capacity, maintain high quality products and services, and meet export market requirements.

C3.2.1.2 Expected Results (Outputs):

At least four financial institutions selected and receiving technical assistance to improve and expand their MSMEs loan portfolios.

Increased along the life of the Project the number of active MSMEs borrowers in participating financial institutions.

An effective and streamlined approval process for MSMEs to obtain co-financing from

FONDEPRO.

At least one private equity fund linked to potential MSMEs interested in receiving equity investment.

C3.2.2 Component 2: Improved Municipal Services to Firms

Businesses need an improved business enabling environment to operate, develop business activities and grow. Municipal governments can contribute to improving the business environment through active public-private dialogue with the private sector and community members as well. The Contractor will improve the business enabling environment at the sub-national level to implement business initiatives to develop private sector business capacity. A

Grants Fund will be established to provide up to $10 million to non-U.S. Non-Government-

Organizations (NGOs) allied with municipalities to help municipal competitive committees implement their plans and develop productive activities or violence prevention initiatives.

C3.2.2.1 Illustrative Interventions may include, but are not limited to:

The Contractor will develop and propose selection criteria for USAID’s approval to assist at least 20 municipalities under the El Salvador Plan Seguro. The Contractor will assist the selected municipalities to create one-stop-windows and reduce the time for entrepreneurs to register businesses, obtain licenses, and register new investments. The Contractor will also assist municipalities to set up operational units, known as EMPRE in Spanish, to effectively guide entrepreneurs to GOES and private sector business development service providers.

Assist the selected municipalities develop and implement municipal competitive plans to promoting economic growth and improved governance. These plans will promote the use of public-private dialogue to develop and implement business and social activities, generate jobs, and prevent violence and delinquency. The Contractor will develop criteria, including criteria for addressing gender gaps, in coordination with municipal authorities, to ensure their commitment and promote competition among municipalities.

Work with the Ministry of Economy, CONAMYPE, and local non-government organizations operating in the selected municipalities to develop business initiatives by linking national government institutions and municipal offices with private sector, local community members, and MSMEs to improve and expand business, and create new jobs.

Assist Escuela Superior de Economía y Negocios (ESEN) in the implementation of the

Municipal Competitiveness Indexes, instruments which have been previously implemented to evaluate the business-enabling environment in the 108 out of the 262 most populated municipalities in El Salvador. ESEN is the institution responsible for implementing two indexes between 2016 and 2020, and are committed to sustain them. Contractor may describe technical assistance required for ESEN to produce the index.

Establish business improvement districts (BIDs) in at least 10 municipalities under Plan El

Salvador Seguro. BIDs are a combination of initiatives to be implemented in certain geographic areas of a municipality that include citizen security, business improvements, and beautification of the geographic area with community participation.

C3.2.2.2 Expected Results (Outputs):

At least 10 municipalities have strengthened existing or created new one-stop-windows and simplified business procedures.

At least 10 municipalities have strengthened existing or created new EMPRE units to link

MSMEs with business development service providers.

At least 40 public-private initiatives developed and implemented in selected municipalities.

Two Municipal Competitiveness Index implemented in at least 100 municipalities.

At least, ten business improvement districts (BIDs) established in selected municipalities.

C3.2.3 Component 3: Streamlined Policy, Regulatory and Procedural Processes

All enterprises operate within a political, social and economic context and are subject to regulatory and institutional constraints. While it is important to support enterprise-specific interventions for businesses to grow, it is equally important to look at the external environment in which they operate. Without addressing the issues related to the overall business environment, interventions at the enterprise level alone do not produce optimal results to achieve sustainable development.

The national and subnational business-enabling environment encompasses policies, administrative procedures, regulations, and public infrastructure. Improving the business environment by lifting constraints and filling gaps in the regulatory and administrative support mechanisms is central to any comprehensive national competitiveness policy (See Section J for

Website link.) Effective regulations, effectively implemented, address market failures that inhibit productive investment and reconcile private and public interests. The number of permits and approvals that businesses need to obtain, and the time it takes to obtain them, are expensive and time consuming. Every day an entrepreneur spends filling out paperwork or in line at a government office is a day not making sales or finding new customers. Burdensome and unpredictable regulation is costly, both in terms of the time and in terms of money required for compliance as well as in opportunity cost. The Contractor will improve the business enabling environment by lifting constraints and filling gaps in the regulatory and administrative support mechanisms as pertain to policies, administrative procedures, and regulations.

C3.2.3.1 Illustrative Interventions may include, but are not limited to:

Assess existing reports and analysis, including the FUSADES diagnostic (See Section J for

Website link), to recommend and assist improvements in the regulatory and…