SOL-596-12-000004.pdf

Request for Proposals No. SOL-596-12-000004

Regional Integrated Trade and Food Security Program

Issue date: July 3, 2012

Questions on RFP due: July 11, 2012

Response to questions disseminated: July 20, 2012

Closing Date for receipt of proposals: August 20, 2012

The United States Agency for International Development (USAID) Mission to El Salvador (USAID/El

Salvador) is seeking proposals from qualified U.S. organizations (i.e. commercial firms, private voluntary organizations, non-profit organizations or consortia composed of any combination of these) interested in implementing the program described in Section C of this Request for Proposals (RFP). Prospective offerors are expected to develop constructive and effective proposals to implement the initiative.

To this end, USAID/El Salvador issues this RFP consisting of the documents set forth in the Table of Contents.

Proposals must be received no later than 4:00pm 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, to:

USAID/El Salvador

Regional Office of Acquisition and Assistance c/o American Embassy

Blvd. y Urbanización Santa Elena

Antiguo Cuscatlán, El Salvador

Attn: David Brown

Electronic submission of proposals (unzipped files with all required signatures) to egssproposals@usaid.gov order to comply with the RFP closing date and time is acceptable. However, hard copies must be received no later than 3 work days after the RFP closing date as specified in Section L.7.

It is contemplated that a cost plus fixed fee contract with an anticipated duration of three (3) base years and two

(2) additional option years will be awarded to that responsible offeror whose proposal is most advantageous to the Government, price and other factors considered. Although present plans are to enter into discussions with those offerors most highly ranked after evaluation of proposals, the Government reserves the right to award without discussions. Hence, proposals should be submitted initially on the most favorable terms, from a price and technical standpoint, which the offeror can submit to the Government.

Issuance of this solicitation does not constitute an award commitment on the part of the Government nor does it commit the Government to pay for costs incurred in the submission of a proposal. Further, the Government reserves the right to reject any or all proposals received, and to negotiate separately with an offeror, if such action is considered to be in the best interest of the Government.

Any explanation desired by a prospective offeror regarding the meaning or interpretation of any information in this RFP, must be requested in writing by the due date indicated above to the following e-mail address:

egssproposals@usaid.gov.

1. THIS CONTRACT IS A RATED ORDER RATING PAGE OF PAGES

UNDER DPAS (15 CFR 700)

2. CONTRACT NUMBER 3. SOLICITATION NUMBER 4. TYPE OF SOLICITATION 5. DATE ISSUED 6. REQUISITION/PURCHASE NUMBER

SEALED BID (IFB)

NEGOTIATED (RFP)

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

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

9. Sealed offers in original and _______________ copies for furnishing the supplies or services in the Schedule will be received at the place specified in Item 8, or if handcarried, in the depository located in until local time _______________________ (Hour) (Date)

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

A. NAME B. TELEPHONE (NO COLLECT CALLS) C. E-MAIL ADDRESS

AREA CODE NUMBER EXT.

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

PART I - THE SCHEDULE PART II - CONTRACT CLAUSES

A SOLICITATION/CONTRACT FORM I CONTRACT CLAUSES

B SUPPLIES OR SERVICES AND PRICES/COSTS PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.

C DESCRIPTION/SPECS./WORK STATEMENT J LIST OF ATTACHMENTS

D PACKAGING AND MARKING PART IV - REPRESENTATIONS AND INSTRUCTIONS

E INSPECTION AND ACCEPTANCE

F DELIVERIES OR PERFORMANCE

G CONTRACT ADMINISTRATION DATA L INSTR., CONDS., AND NOTICES TO OFFERORS

H SPECIAL CONTRACT REQUIREMENTS M EVALUATION FACTORS FOR AWARD

K

REPRESENTATIONS, CERTIFICATIONS AND OTHER

STATEMENTS OF OFFERORS

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

12. In compliance with the above, the undersigned agrees, if this offer is accepted within ___ 180 days_____ calendar days (60 calendar days unless a different period is inserted by the offeror) from the date for receipt of offers specified above, to furnish any or all items upon which prices are offered at the price set opposite each item, delivered at the designated point(s), within the time specified in the schedule.

13. DISCOUNT FOR PROMPT PAYMENT 10 CALENDAR DAYS (%) 20 CALENDAR DAYS (%) 30 CALENDAR DAYS (%) CALENDAR DAYS (%)

14. ACKNOWLEDGEMENT OF AMENDMENTS AMENDMENT NO. DATE AMENDMENT NO. DATE

(The offeror acknowledges receipt of amendments to the

SOLICITATION for offerors and related documents numbered and dated:

CODE FACILITY

16. NAME AND TITLE OF PERSON AUTHORIZED TO SIGN OFFER 15A. NAME AND

ADDRESS

OF OFFEROR

(Type or print)

15B. TELEPHONE NUMBER 17. SIGNATURE 18. OFFER DATE

AREA CODE NUMBER EXT.

15C. CHECK IF REMITTANCE ADDRESS IS DIFFERENT FROM

ABOVE - ENTER SUCH ADDRESS IN SCHEDULE

19. ACCEPTED AS TO ITEMS NUMBERED 20. AMOUNT 21. ACCOUNTING AND APPROPRIATION

22. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION: 23. SUBMIT INVOICES TO ADDRESS SHOWN IN ITEM

(4 copies unless otherwise specified) 10 U.S.C. 2304(a) ( ) 41 U.S.C. 253(c) ( )

24. ADMINISTERED BY (If other than Item 7) 25. PAYMENT WILL BE MADE BY CODE CODE

26. NAME OF CONTRACTING OFFICER (Type or print) 27. UNITED STATES OF AMERICA 28. AWARD DATE

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

(Signature of Contracting Officer)

(REV. 9-97)

10. FOR INFORMATION CALL:

11. TABLE OF CONTENTS

STANDARD FORM 33

SOLICITATION, OFFER AND AWARD

SOLICITATION

OFFER (Must be fully completed by offeror)

AWARD (To be completed by Government)

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SOL-596-12-000004

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Regional Office of Acquisition and Assistance

USAID/El Salvador

3450 San Salvador Place

Washington, DC 20521-3450

See L.7 See L.7 4:00pm El Salv. August 20, 2012

Marielos Arce

Supervisory Contracting Officer

503 2501-3326 egssproposals@usaid.gov

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X 2

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SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

The United States Agency for International Development (USAID), Regional Office of

Acquisition and Assistance in El Salvador requires support to achieve the goals and activities as detailed in Section C.

B.2 CONTRACT TYPE

This is a Cost Plus Fixed Fee (CPFF) completion contract.

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

(a) Base Period of Performance

(1) The estimated cost for the performance of the work required hereunder, exclusive of fixed fee, is $____________. The fixed fee is $_____________. The estimated cost plus fixed fee is

(2) Within the estimated cost plus fixed fee specified in paragraph (a) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the

Contractor (and payment of fee) for performance hereunder is $_____________. The Contractor shall not exceed the aforesaid obligated amount.

(b) Option Period of Performance

(1) The estimated cost for the performance of the work required hereunder, exclusive of fixed fee, for the option period is $______________. The fixed fee is $_____________. The estimated cost plus fixed fee for the option period is $_____________.

(2) Within the estimated cost plus fixed fee specified in paragraph (b)(1) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the

Contractor (and payment of fixed fee) for performance hereunder is $0. The Contractor shall not exceed the aforesaid obligated amount.

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

B.4 BUDGET

[to be completed upon award]

The Total Estimated Cost of this contract is $____________ (inclusive of base and option period.) The estimated cost for the base period is $____________. The estimated cost for the option period is $_____________.

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The summary budget for the base period is as follows:

Direct Labor $

Other Direct Costs* $

Indirect Costs $

Fixed Fee $

Total Estimated Cost plus Fixed Fee $

* Other Direct Costs include:

NOTE: The Contractor will not be paid any sum in excess of the ceiling price. 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, will not be reimbursed to the Contractor.

The summary budget for the option period is as follows:

Other Direct Costs* $

Indirect Costs $

The total estimated costs inclusive of Based and Option Period, if exercised, is as follows:

Other Direct Costs* $

Indirect Costs $

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 next

60 days, or when added to all costs previously incurred will exceed 75% of the total obligated amount.

B.5 INDIRECT COSTS (DEC 1997)

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

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TBD 1/ 1/ 1/ 1/

Base of application:

Type of Rate: Predetermined

Period:

For 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:

TBD 1/ 1/ 1/ 1/

Base of application:

B.6 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 1/ 1/ 1/

1/Base of Application:

(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 with 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 Subcontractor(s):

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

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TBD 1/ 1/ 1/

1/Base of Application:

(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 with the lower rates.

(6) This understanding shall not change any monetary ceiling, obligation, or specific cost allowance or disallowance. Any change in classifying or allocating indirect costs requires the prior written approval of the Contracting Officer.

B.7 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.

END OF SECTION B

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SECTION C – DESCRIPTION / SPECIFICATIONS/STATEMENT OF WORK

C.1 INTRODUCTION

Food security in Central America can be supported through targeted value chains trade development; the main goal is to help Central American countries reach higher path of inclusive economic growth to eradicate hunger and poverty, and enable expansion of intraregional trade and exports. Through this activity USAID seeks to establish consolidated regional value chains and export market access for food and nutrition critical products; through market alliances, increased trade facilitation, harmonization and institutional capacity.

The activity in this statement of work supports the implementation of the United States

Government Feed the Future Initiative (FTF). This program is independent from USAID bilateral Feed the Future activities in focus Central American countries. This program will complement USAID bilateral programs to improve farmers’ incomes in targeted geographic food insecure areas through technical assistance programs and rural value chain interventions. The program will coordinate with USAID bilateral programs to build upon national level efforts in trade facilitation. The Program is not designed to directly support farmer level technical assistance, but instead, to support small producer groups to access expanded regional markets.

Importance of a Regional Approach

Bilateral efforts to address food insecurity, through the direct support to small producers are critical. But regional actions are necessary given:

• The predominant country-by- country approach of existing regional programs

• The need to support the regional agricultural institutions responsible for food security matters towards these goals.

• The integrated nature of Central America trade.

• A strong commitment by Central American governments to harmonize most food safety and technical product standards.

• Significant seasonal and intra-regional labor migration.

• Small land size of the CA region, which creates extreme inter-dependence between countries.

• From a global investment perspective, the region is attractive as an aggregated common and harmonized market.

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The regional framework of the Central American Integration System (SICA, by its Spanish acronym) serves as a benchmark for Heads of State of the Central American countries to progress in harmonizing policies with their neighbors, removing trade tariffs and non-tariff barriers, adopt cross-border approaches to natural resources management and permitting free trade of food commodities and agricultural inputs across borders. Regional advances should augment and synergize the efforts of bilateral country programs. The whole region benefits through reduced barriers to trade, increased access to food and inputs, and improved business environment.

C.2 BACKGROUND

The Food Security Challenge

In Central America chronic under nutrition (stunting or low height- for-age) is the most critical nutritional problem facing the region and reflects development problems that result mainly from limited income earning opportunities. The high volatility of food prices, the lack of strong political institutional capacity and insufficient productive opportunities for the poor contribute to the vicious cycle of poverty. After the 2007-2008 food price crisis, it is estimated that over 1.16 million people fell under the poverty line.1

The Central American Common Market

It has been 50 years since the Central American Common Market (CACM) was created, with the end-goal to establish a Customs Union. Intraregional trade has increased, as has increased openness to global markets. Central American countries have established free trade areas, such as the United States, Central America and Dominican Republic Free Trade Area –CAFTA-DR, Mexico, Chile, Andean Community and other Free Trade Areas. However, obstacles to trade related to discretionary measures of individual countries still remain, causing higher costs of doing business and higher prices to consumers. Transportation and logistics bottlenecks, in addition to unilateral customs measures and cross border procedures constitute a high burden for intraregional trade of goods.

Regulatory and Other Market Distortions

High volatility in international food prices with an upward trend since 2008, has put pressure on food security, especially for net food importing countries as in the case of Central American countries.

Trade related measures are increasingly used as policy tools to control national supplies of food staples. Tariff rate quotas for imports of critical food staples are periodically activated to protect local producers. However, as the food security crises peaked in 2008, the response of policy makers was to ban exports of critical staples such as beans, which in turn created greater price volatility. These and other regulatory market distortions induce a monopolistic behavior in imports and distribution of main food staples. Price information systems are still weak, and more transparency in food markets needs to be promoted. For

IPFRI. Interview with Maximo Torero, March 2011.

Page 8 of 106 pages example, the increase of bean prices in 2010, lead to export bans in Honduras, causing prices to increase in the rest of the region. This is an example of how government interventions and intermediary practices can affect markets in the region, and purchasing power of poor consumers. The markets in this region, especially for food, are so interrelated that policies of one country affect the rest.

The oligopolistic behavior in the Central American agriculture sector, especially for food and agriculture inputs distribution is complex and politically sensitive. In Honduras, for example, the five largest importers of rice control 60% of the market. After WTO agreements and tariff rate quotas were implemented in the region between 1994 and 2000, the international price of rice fell by 40%. During the same period the price of rice to consumers increased by 12%. Importers and processors obtained the gains from free trade, importing rice at a lower tariff; however these gains were not transferred to final consumers. This concentration of wealth is not only evident in the food sector, but also in the distribution of agriculture inputs.

Logistical Complexity

A truck travelling from Mexico to San José, Costa Rica travels at an average speed of 16 km/hour, making the travel time the same as for shipments by sea. Thus the shipping costs to the

United States are the same or lower than the cost of shipping within the Central American region. The average speed of trucks is also greatly determined by border crossings through the different countries. Facilitation efforts are often unsuccessful because of the traffic police and antinarcotics controls. Delays of up to three hours are also common at border crossings because of infrastructure deterioration. This results in long queues for inspection by Customs. Customs officers often ask for requirements that are not consistent with the international agreements. This has a major impact on the logistical cost of goods destined for the intraregional trade. For example, the average speed of a truck from Guatemala City to San José is 13 km per hour. There are 1,300 km to travel and it takes 96 hours to cover this distance. This means a truck covers about 325 km per day. With a fast-track initiative in all land crossings this travel time could be cut in half. This milestone will have an enormous impact on the cost of moving goods within

CA.

For the poor, who spend a higher portion of their income on food, the cumulative effects of logistics and cross border inefficiencies, result in a prohibitive tax. These additional costs may represent the largest share of a goods final price to consumers.

Agriculture Value Chains

Agriculture significantly contributes to regional GDP and exports. This sector however, has shown a slow growth and is failing to provide the necessary opportunities for rural populations to overcome poverty and food insecurity. Consumption of food from supermarket chains is rapidly increasing, as major competitors – SUCAP and Wal-Mart – have consolidated investments to

FAO / OXFAM 2008. Reflexiones desde los Programas Especiales para la Seguridad Alimentaria (PESA) de

Centroamérica Regional Integration Strategy. Inter-American Development Bank. March 2011 / Evaluation of Regional and Bilateral Programs to

Support Trade Compliance under CAFTA-DR. Segura Partners July 2011.

http://www.pesacentroamerica.org/noticias_ca/alza.pdf http://www.pesacentroamerica.org/noticias_ca/alza.pdf

Page 9 of 106 pages target socioeconomic groups at different levels. A growing trend in the region is to form alliances with supermarkets chains and small producer groups. These alliances have proven to be win-win approaches that improve quality and consistency of supplies for buyers and facilitate technology transfer and predictability of market conditions for growers. Experiences of various technical assistance programs highlight the need to strengthen small producer groups’ negotiation power through a transparent price/margin distribution.

In past interventions in Central America, many public and private stakeholders have evolved to become effective partners in development. These relationships can continue to be strengthened.

Regional government entities such as SIECA, OIRSA, RUTA, ICCA, and others within the

Central American Integration System (SICA) are responsible for important political decisions adopted by countries that are part of the regional system (Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and the Dominican Republic, as an Associated State).

On the private sector side, previous USAID regional programs have accumulated successful experiences and best practices that build upon market links for developing food agriculture value chains with product, process sustainability differentiation and market growth potential. Models of cost-benefit analysis for incremental cost/ price transferability along the value chain have the potential of maintaining the profitability incentive of product and process differentiation, while creating transparency of margins, thereby assuring that small producers will obtain higher margins to compensate their incremental costs. These experiences and alliances will be further developed.

From a gender equality perspective, improved market access to trade in agriculture has the potential to create opportunities to improve the participation of women in economic activities as this group is provided with equal opportunities, in terms of employment conditions, equal access to information, education, knowledge and technology.

Other Trade Opportunities

CAFTA-DR provides for multilaterality among Members and accumulation of origin among

Central American countries for export to the United States under quotas. In other words, Central

American manufacturers of food products that are exported under a quota system can accumulate origin by using goods originating from another Central American country. This interpretation of

CAFTA-DR regulation offers a clear possibility for establishing value chains in the production of goods to be exported under Tariff Rate Quotas (TRQ) schemes, in more than one Central

American country. Some of the agriculture import quotas issued by the United States are being underutilized by Central American countries. This implies that Central America exports less than what the quota allows. This and other examples of trade mechanisms available through negotiated free trade and investment agreements highlight the need to explore further market opportunities for value added agricultural activities in Central America.

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C.3 STATEMENT OF WORK

Purpose

The purpose of this activity is to begin a new chapter of USAID regional assistance to promote inclusive economic growth, improve food security and facilitate trade in the region. USAID

ECAM will focus in two areas:

a) Targeted food security critical value chains development within the agricultural and agro industrial sectors, linking small and medium producers to regional and export markets, and consolidating intraregional value chains to leverage underutilized trade opportunities and open other opportunities new niche markets.

b) Improve trade facilitation and regional trade capacity through strengthening private sector capacity and regional institutional capacity to advance in harmonization of customs procedures, trade administration, border management, transportation, logistics and other trade –related mechanisms.

Program Components

The Regional ITFS Program has two major components, which are designed to directly contribute to the achievement of Program objectives:

Intermediate Result 1: Increased Market Access for Critical Food Security Value Chains and private sector alliances

Intermediate Result 2: Increased Trade Facilitation and trade capacity building efforts at the national and regional levels

Component 1: Market Access for Critical Food Security Value Chains

This component shall support critical value chains for food and nutrition, linking small and medium producers to regional and export markets (to and from Central America, and also to other export markets), and consolidating intra-regional value chains to leverage underutilized market opportunities.

The central proposition of this component is to link producers to buyers, servicing markets in the region, as well as in the United States, and other export markets; promote compliance of quality and environmental sustainability standards, and assess investment and trade provisions with an emphasis in creating private sector alliances.

The selection of the value chains is part of the assignment and will be based on criteria such as integration of small producer groups in value chains, rural households and small producers’ income generation potential, food and nutritional security for rural households, and achieving maximum multiplier impact on the development of infrastructure and investment. This exercise

Page 11 of 106 pages should map and analyze value chains, to examine how value chains can augment rural agriculture small holders and poor households’ incomes and competitiveness.

The agricultural sector in Central America needs to play a more effective role in improving nutrition by increasing the access, availability, and quality of diets. Value-chain approaches are already used in international development to enhance the livelihoods of food producers, but they rarely consider diet quality and nutrition. This activity will explore a value-chains development approach to enhance the ability of the Central American agriculture sector to achieve better nutrition emphasizing the promoting of creating private sector alliances to drive consolidation in critical value chain products. Nutrition should become a solution to the problems faced by other sectors as well—thus adding value for all sectors.

This component will develop market driven opportunities that can be efficiently attained through a regional platform. From a private sector perspective, certain investments make sense if the region is aggregated in terms of market size and supply chain volumes.

Figure 1: Regional Value Chains Two-Dimensional Approach

The regional market access and value chain framework will be developed through a two dimensional approach. The upper level concentrates on the relationship between key regional and national institutions dealing with trade related issues that affect the value chain of selected products such as non-tariff barriers, customs and border procedures, export bans, or tariff rate quotas. The lower level targets private sector buyers and small producers, through private sector

Small

Producer Regional ValueChainsforExport Final

Consumer

Small Farmer level technical assistance programs by USAID Bilateral Missions and other donors

Legal

Technical Institutiona l

Financial Business

Market

FTF Regional Program

Sanitary

& Phyto Trade

Facilitation

Agriculture

Policy Research

Networks

Key Regional/National Institutions

Private Sector Market links, logistics, R&D and technology

Page 12 of 106 pages alliances and partnerships with producer level technical assistance programs. This activity will support small producer groups programs that have achieved or are targeted to develop the necessary milestones of associativity, agriculture productivity and quality control, and demonstrate readiness to engage in regional and export markets. Specific interventions for each value-chain constraints for regional trade will require its own set of approaches, to consolidate market access in the Central American countries. Interventions could involve information technology, private sector trade capacity, chain reorganization, changes in financial incentives to new policies and standards. The regional program will complement producers’ technical assistance efforts but is not intended to provide direct support at a farmer productivity level, microfinance, public infrastructure, associativity or other interventions that are part of small producers technical assistance programs.

The selection of specific value chains to be supported is part of this program. Selection is based on the contribution of value chains to 1) benefit small producers; 2) job opportunities for women in the rural areas; 3) improvement of farmers’ and poor rural population incomes; 4) improving the region’s food security and nutritional needs; 5) achieving a multiplier impact on the development of productive investment. The Program seeks to expand regional markets for commodities that could have an impact on small farmers’ incomes, such as horticulture, fruits, beans and other vegetable proteins, fish, meats, eggs, dairy and dairy products.

The work performed by this contract shall support small farmers producers groups from food insecure areas, especially in border territories of Guatemala, El Salvador and Honduras, as well as small producer groups and cooperatives in Nicaragua; market access should be expanded to the Central American Common Market primarily, but also to other niche market as attractive to the targeted value chains.

Tasks include but are not limited to:

• Conduct an assessment to define the critical regional value chains in the agricultural sector and agro industrial sector that support food security objectives (i.e. small holder farmer, incomes, nutrition). The selection of value chains will be based on criteria described above. This assessment will address the viability from a market and business perspective.

• Establish a list of small producer targeted assistance programs engaged with the selected value chains, funded by other US Bilateral missions, other donor programs or NGOs, to link to regional and international buyers and target the value chain development stages to successfully integrate these producers in the regional and export markets.

• Pursue the development of innovative activities to improve regional market access and value chain integration of small agriculture producers. Illustrative interventions may include special agricultural free trade mechanisms that cover different countries, for the selected value chains, in border territories where poverty is highest and primary production takes place, such as in El Trifinio Region.

Other may include special import and transit permits for regional

The Trifinio Region, created in 1998, has been a successful transnational partnership with a population of more than 670,000 in 7,541 square kilometers. Guatemala has 44.7 percent of the area, El Salvador has 15.3 percent and

Honduras has 40 percent. It includes 45 border municipalities. It has become a model strategy for South-South

Page 13 of 106 pages shipments in order to expedite the crossing of borders and the importation of agricultural goods;

a pilot Program to test the practicality of trade facilitation and untapped opportunities such as

CAFTA-DR multilaterality and accumulation of CAFTA-DR quotas. The offeror is encouraged to propose other approaches and mechanisms to promote inclusion of agriculture small producers in regional value chains. If successful, these targeted interventions should be promoted and expanded to similar food insecure geographic areas.

• The incorporation of ―anchor companies‖ is key for success. The contractor will build upon previous regional alliances with international buyers such as Southern Specialties, PriceMart, Costco, Wal-mart, SupermercadosUnidos de Centroamerica (SUCAP), Sea Delight, and others. Based on the strategic selection of key regional value chains, the program will identify new buyers. The incorporation of small agriculture processing enterprises in the value chain development is strongly encouraged.

• Establish partnerships with regional institutions, and key government and private sector organizations to implement the necessary trade facilitation mechanisms. Provide assistance to key regional institutions to promote the development of regional agriculture value chains, such as: compliance with export market regulations, assistance on border crossing procedures;

assistance on strengthening and streamlining processes for exports and imports; Central

American sanitary and phytosanitary standards, food safety and other technical standards, e.g.

the new U.S. food safety law (FSMA); develop buyer and seller regional directories; support regional export promotion and networking; assistance on establishing market networks and partnerships.

• Develop innovative models to establish regional buyer – seller networks that can be systematically replicated. As part of this task, buyer – seller relationships and their competitive positions shall be explored and economic incentives identified.

• Link buyers to small producers assistance programs, to improve trade by promoting improved environmental compliance and sustainability standards, good agricultural practices, quality standards, packing standards, reduce financial risk by promoting purchase agreements, reduce the obstacles to trade at borders, streamline logistics for exports, and provide institutional support to producer organizations and buyers to support export value chain development.

• Support small producers groups to understand and adopt improved sustainable agriculture production practices that consider the adaptation and mitigation to potential climate change impacts within the value chain and introduce opportunities to provide product distinction for a specific market niche concerned with environmental compliance. The program shall promote, where possible, climate-smart agriculture and the introduction of new technologies among selected value chains in collaboration with producers, processors, transporters, distributors and other service providers that buffer against climate change impacts through supporting interventions that address adaptation and mitigation in areas such as agriculture inputs, agriculture and post-harvest technologies, transport, among other opportunities to improve resilience of targeted value chains to the impact of climate change.

learning and has created a framework for decision making reflecting a participatory, democratic, and coordinated process of horizontal cooperation and investment.

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Implement cost-benefit analysis models to promote market transparency along the value chain, to ensure that the incremental margins of improved quality and differentiation are transferred to small producers.

• Establish the protocols, manuals and other tools, as well as document best practices and lessons learned to capitalize on the experiences from these Programs, working with different value chains across the region and demonstrated successes will be available to USAID and other donors to be replicated and integrated into the country bilateral programs.

Expected Results

Base Period (Phase 1- Three (3) years):

1. Increased export sales value of participating producer groups and buyers, no less than

15%.

2. At least 1,500 small producers units participating in regional and export value chains.

3. At least four special regional trade mechanisms implemented, and systematically documented to allow for replication in other value chains or geographic zones.

4. At least three Memorandums of Understanding with regional or national institutions signed to support implementation of regional value chain development.

5. At least 20 Regional buyer – seller alliances established to link small producers and small enterprises through a value-chain development approach which at least 5 resulting in a sustainable market driven contract relationship.

Option Period (Phase 2-Two (2) years):

1. Increased export sales value of participating producer groups and buyers by at least 5% per year.

2. At least 1,500 additional small producer units participating in regional and export value chains.

3. At least four special regional trade mechanisms systematically replicated in other food insecure zones.

4. At least two additional Memorandums of Understanding with regional or national institutions signed to support implementation of regional value chain development.

Up to 1.05 hectares associated in small producers groups, associations or cooperatives.

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5. At least 5 additional regional buyer seller alliances established to link small producers and small enterprises through a value-chain development approach resulting in a sustainable market driven contract relationship.

Expected results for option period (phase 2) may be subject to review by USAID after recommendation of a Program mid-term evaluation.

It is strongly recommended that in preparation of this proposal the offeror conducts consultations with USAID Bilateral Missions implementing Feed the Future Programs in Central America, other donor’s and governments agriculture and food security programs. This exercise will support the technical approach on how the regional value chain development program can best build upon efforts at country and local levels.

Grants under Contract

Previous USAID Programs, such as CAFTA-DR Environment and Labor Excellence Program, Partnership for Food Industry Development Program in Nicaragua (PFID) and Rural Economic

Development Program in Dominican Republic (RED), have successfully implemented Grants under Contracts to achieve greater effectiveness and private sector engagement. Based on these successful experiences, the Regional Trade and Food Security Program will implement this mechanism to achieve higher impact and sustainability.

The offeror will manage a grant fund under this contract to leverage resources from non-government organizations, other donors or food processors and buyers’ small producers programs. It is anticipated that this fund will at least total US$5,000,000 to provide matching funds of up to US$500,000 per project of selected value chains. The objective of this grant fund is to enable small producers groups implement necessary productive investments to meet buyer quality specifications, meet environmental sustainability standards, streamline the supply chains, and increase competitiveness in differentiated growing market niches. The purpose of this assistance is to build upon producer-buyer alliances in favor of strengthening small producer’s power, in a win-win relationship along the agriculture value chain.

The contractor will execute grant agreements with small producer’s organizations that have achieved or are targeted to develop the necessary milestones of associativity, agriculture productivity and quality control, and demonstrate readiness to engage in regional and export markets. It is expected that USAID’s contribution under an individual grant will be between

$300,000 and $500,000. The level of contributions will be established based on the viability of proposal and the organization’s capacity to manage it.

Potential recipients will be selected through an evaluation process, in accordance with the evaluation criteria to be established. USAID will be significantly involved in the establishment of the selection criteria, will approve all selected recipients and will retain the ability to unilaterally terminate the grant agreements in extraordinary circumstances. Requirements that apply to USAID-executed grants will also be applied to the grants executed by the contractor.

Page 16 of 106 pages

Component 2: Increased Trade Facilitation and Improved Trade and Institutional

Capacity

The new activity shall focus on reducing obstacles and costs of trade in the region, and will continue supporting the Central American Economic Integration Subsystem, to improve trade facilitation, harmonization of trade and investment laws, regulations and procedures, to reduce the burden and costs of doing business and crossing borders, focusing in mechanisms that can have a significant impact for small and medium enterprises (SMEs). This activity will support implementation and compliance with trade agreements and regional integration schemes in those areas that constitute means to promote inclusive economic growth in the agricultural sector. This activity will build upon the achievements of the CAFTA-DR Regional Trade Program (CRT) and USAID Cooperative Agreement with SIECA for Implementation of CAFTA-DR Provisions for Rules of Origin and Customs Procedures . Documents about these activities, such as SOW, studies and final reports, can be found at www.caftadr.net.

The United States and Panama Trade Promotion Agreement (TPA) was signed into law in the

United States on October 21, 2011. As Panama advancing in its incorporation in the Central

American Common Market (CACM), this activity shall support trade capacity building activities to implement the (TPA) and CACM. Also, this contract shall support the Central American

Secretariat of Economic Integration (SIECA), Customs Administrations, Trade Administrations and relevant private sector and non-government organizations in Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama and the Dominican Republic, as these are relevant for the purposes of advancing in a Regional Trade Facilitation Agenda.

Increased number of trade facilitation mechanisms adopted

Through the harmonization of processes and best practices in customs, such as authorized economic operators (AEOs), uniform and integrated ports and border management procedures, advance rulings, uniform forms for international transit of goods, regional interconnectivity of customs information, and other facilitation mechanisms, the cost of accessing neighboring markets and importing food shall be reduced, thereby improving economic access to food. The main focus of this component is to strengthen the capacity of the private sector, for compliance of trade procedures, to participate in trade facilitation programs, such as AEO’s, and to facilitate dialogue with governments and regional processes in their contribution to the reduction of unnecessary trade transaction costs for moving goods across borders. The program shall contribute to the adoption of best practices for trade facilitation in intra-regional customs administration offices and other administrative procedures at borders, promote decentralization of procedures, and strengthening systems. Knowledge development is an essential part of capacity building. Trainings and workshops under this activity shall be strategically developed.

The Program will support the implementation of USAID Partnership for Trade Facilitation.

Under this global mechanism USAID will provide technical assistance in areas proposed in the

World Trade Organization (WTO) trade facilitation agreement: advance rulings, pre-arrival processing/early release of goods, appeals mechanisms, internet publications, penalty disciplines, PRIME CONTRACT NO AFP-I-00-04-00002-00 TO No. 07, implemented by Chemonics, ended September 2010.

Implemented by SIECA, extended through August 30 th 2012.

http://www.caftadr.net/

Page 17 of 106 pages transit guarantee systems and expedited shipments. Country-specific recommendations are identified by SUAID. Based upon these recommendations, the contractor shall implement activities to support government authorities and private sector to design and provide technical assistance and training that improves customs and trade processes and administration; revenue collections and rules enforcement, and fosters positive relationships between the government and trade community. Country-specific actions shall be coordinated with the technical approach of the Central American Secretariat for Economic Integration (SIECA) to build upon the regional harmonization and economic integration process.

In preparation of proposals, offerors should consult stakeholders in the region, such as regional trade institutions, government Customs administration officers and trade administration officers, private sector trade organizations, USG agencies and other donors (GIZ, IDB, WCO, WB, IFC, European Cooperation Agency), to identify successful interventions, lessons learned and priorities for governments and private sector. The offeror should use the recent Evaluation of

USAID Regional Trade Programs to Support Compliance with CAFTA-DR8as a guide for suggesting interventions.

Illustrative tasks include but are not limited to:

• Design mechanisms to facilitate small and medium businesses to trade goods across borders and to strengthen the capacity of the small and medium firms for demanding quality trade and Customs services, understanding and accessing administrative procedures. The program will promote the use of adapted information technology tools to streamline trade related administrative processes.

• Support the implementation of a monitoring and gap analysis tools to improve the degree of transparency and reduction of obstacles to regional trade, with feedback from the business sector, national governments, and trade partner countries governments. These tools can track the commitments of governments in their compliance with trade facilitation. Buy-in and involvement of stakeholders from the design phase is recommended to assure sustainability and continuity of this system. The program should seek collaboration with other donors to build upon previously developed methodologies, such as the Doing Business / Trading goods across borders indicators developed by IFC/ World Bank Group.

• Establish a baseline for knowledge development of trade facilitation mechanisms among private sector. The depth of trainings must respond to the needs to individual countries and institutions, and focus on the understanding of private sector, as drivers of the demand of services from customs and trade administration offices. Topics should be developed in a coordinated manner with SIECA and national governments, local officials and private entities should participate in the design process. Training materials should be developed and remain accessible to local institutions. Trainings and workshops evaluations need to be performed and systematically assessed.

Evaluation conducted by Segura Partners, LLC between February 2011 and September 2011. Available at USAID

Development Clearinghouse (www.dec.usaid.gov).

Page 18 of 106 pages

Grants under Contract

Private sector engagement and increased effectiveness of national level trade facilitation activities can be achieved through grants to private sector trade organizations.

The contractor will provide grants to private sector organizations, with a cost share requirement in cash or in kind to support the implementation of trade facilitation monitoring mechanisms and private sector trade capacity building, with emphasis on increasing the participation of Small and

Medium Enterprises (SME) in regional trade. The main purpose of this assistance is to strengthen private sector capacity to catalyze the adherence of government trade regulations and procedures to multilateral and international best practices for trade facilitation; promote dialogue, partnership between the governments and private sectors and accountability in implementing measures to reduce unnecessary obstacles to trade. It is anticipated that funds allocated for this purpose will at least total US$ 1,200,000 for seven organizations (one per country), or one regional organization. Grants to individual local organizations may not exceed US$ 250,000. The offeror may propose regional activities for more efficient use of resources in supporting these organizations.

The contractor will execute cost share grant agreements with private sector trade organizations that pursue the establishment of dialogue and partnership with governments for improvement of trade facilitation procedures. Grantees must share the cost of the activities through either cash or in-kind contributions. The level of individual grants and contributions will be established based on the viability of the proposal and the organization’s capacity to manage it.

Potential grantees will be selected through an evaluation process, in accordance with the evaluation criteria to be established. USAID will be significantly involved in the establishment of the selection criteria, will approve all selected recipients and will retain the ability to unilaterally terminate the grant agreements in extraordinary circumstances. Requirements that apply to USAID-executed grants will also be applied to the grants executed by the contractor.

Certification of Trade and Customs Professionals

It is anticipated that the contractor will design, and implement a Certificate for Trade and

Customs Professionals, to promote the professionalism of customs officers and trade administration officials and the adoption of this certificate by Customs Administration and other relevant government and regional offices.