Amendment No. 01 - Revised SOL-615-12-000005 - REGAL-AG.docx

Subject: Amendment 1: Request for Proposal (RFP) # SOL-615-12-000005 Resilience and Economic Growth in the Arid Lands-Accelerated Growth (REGAL-AG)

The United States Government, represented by the U.S Agency for International Development (USAID), is seeking a Contractor to provide the services in Kenya as stipulated in Section C of the subject RFP. It is anticipated that a five (5) year, cost reimbursement plus fixed fee (CPFF) completion type contract will be awarded for the services specified herein. The government estimate for this contract is $18-22 million.

USAID received questions from interested parties. Based on these questions, and the subsequent answers, we have amended the RFP. Below is a list of the major changes:

· Section C has been revised to clarify the causal model, the role of subcontractors, the components of the project, and the requirements for Key Personnel;

· The requirements for submitting a draft Performance Management Plan (PMP) and Workplan have been revised in Sections C and L;

· Section M has been revised to include cost as a scored evaluation criteria;

· The 30 page limit has been clarified;

· The mandatory minimum for subcontracts has been increased; and

· The required RFP Budget Template has been revised.

The above list is not all inclusive. The entire list of questions and answers is included as a separate document with this amendment.

Proposals must be received electronically on or before the closing date stipulated above to provide the services and deliverables specified in the RFP. Proposals must be sent via e-mail attachments to dharter@usaid.gov and jamay@usaid.gov by the closing date and must conform to all requirements outlined in Section L.

USAID reserves the right to award the contract subject to availability of funds. USAID intends to follow an intensive timeline for this procurement. Below are the revised milestones and anticipated dates of this procurement. Offerors are reminded that USAID reserves the right to award a contract without discussions and, therefore, initial proposals should represent an Offeror's best proposal.

Release of the RFP April 27, 2012

Q&A Closes (8am local Nairobi time) May 9, 2012

Q&A Response May 19, 2012

RFP Closes June 22, 2012

Competitive Range Determination (if applicable) July 6, 2012

Discussions (if applicable) July 16-20, 2012

Revised Proposals Due July 27, 2012

Award August 17, 2012

If a competitive range is established, USAID intends to hold in-person discussions with Offerors in the competitive range. The Chiefs of Party for the Offerors in the competitive range shall travel to Nairobi, at USAID’s expense (limited to $5,000 per Offeror). Therefore, Offerors must plan schedules accordingly to accommodate the timeline above. Offerors may include other members in the discussions at the Offerors’s own expense. The representatives of any Offeror in the competitive range, either the Chief of Party or another representative, must have the authority to negotiate on behalf of the Offeror.

This request in no way obligates USAID to award a contract, nor does it commit USAID to pay any cost incurred in the preparation and submission of your proposal.

We look forward to receiving and reviewing your proposals.

Regards, /s/

Daniel Harter Regional Contracting Officer

USAID/EA

PART I - THE SCHEDULE

SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS

B.1. PURPOSE

The purpose of this contract is to provide technical assistance as described in detail in Section C, Statement of Work.

B.2. CONTRACT TYPE

This is a Cost-Plus Fixed-Fee (CPFF) completion type contract. For the consideration set forth below, the Contractor shall provide the performance requirements described in Section C and the deliverables or outputs described in Section F.

B.3. 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 $TBD. The fixed fee, if any, is $TBD. The estimated cost plus fixed fee, if any, is $TBD.

(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 $TBD. The Contractor shall not exceed the aforesaid obligated amount.

(c) Funds obligated hereunder are anticipated to be sufficient through [to be inserted at the time of award].

B.4. BUDGET LINE ITEMS

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

*Please refer to the revised “RFP Budget Template” provided as an attachment to this RFP. The numbers list above under the “subcontracts” summary line item are mandatory minimum requirements.

B.5. PERIOD OF PERFORMANCE

The period of performance for this contract is five years from date of award.

B.6. MULTI-YEAR CONTRACT

This CPFF contract is considered non-severable, and is therefore a multi-year contract as defined in FAR 17.103. Therefore, this contract is subject to the requirements of FAR 17.106.

Cancellation Dates:

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”. 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 17.103 and 52.217-2. Therefore, the cancellation ceiling for each cancellation date is TBD.

B.7. INDIRECT COSTS

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

Description Rate Base Type Period

1/Base of Application:

Type of Rate:

Period:

2/Base of Application:

Type of Rate:

Period:

3/Base of Application:

Type of Rate:

Period:

B.8. CEILING ON INDIRECT COSTS

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

Description Rate Base Type Period

1/Base of Application:

Type of Rate:

Period:

2/Base of Application:

Type of Rate:

Period:

3/Base of Application:

Type of Rate:

Period:

(b) 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.

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

B.9. SUBCONTRACTING

The Contractor shall subcontract at least $8,140,000 of the work under this program in order to meet the requirements of Section C and build local capacity. Priority shall be given to local organizations, associations and/or firms. The Contractor, however, will be held responsible for all requirements of and all work performed under this contract.

B.10. 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]

SECTION C - DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

INTRODUCTION

USAID/Kenya intends to award two procurements under a larger program titled “Resilience and Economic Growth in the Arid Lands” (REGAL). The first component, a Request for Application titled “Resilience and Economic Growth in the Arid Lands-Improving Resilience” (REGAL-IR) is discussed in a separate Request for Applications as stated in the cover letter. The second component, discussed in this Request for Proposal, will be a five-year, $18-22 million contract titled “Resilience and Economic Growth in the Arid Lands-Accelerated Growth” (REGAL-AG). Both programs fall under the United States Government’s (USG) Feed the Future (FtF) Initiative.

Project Rationale

Since 2002-2003, the USG has provided more than $4.2 billion in food and non-food assistance to Kenya and Ethiopia alone—an average of more than $470 million per year. The majority of this assistance aimed to address the impacts of acute and chronic food insecurity in arid and semi-arid lands. Despite this significant investment of resources, humanitarian needs are continuing to rise, and 2011 found 13 million people in desperate need of assistance. About 3.8 million of these were in Kenya—a number which emphasizes both the culmination of successive seasons of inadequate and erratic rain, and the deep level of vulnerability that exists in the country’s drought-prone regions.

The Government of Kenya’s (GoK) Post-Disaster Needs Assessment (PDNA), supported by the United Nations (UN), World Bank, European Union (EU), and other partners, found that drought impacts in 2011 were actually the manifestation of a drought period spanning 2008-2011, representing a loss of $12.1 billion through the destruction of physical and durable assets, and flow of economy across all sectors. A large proportion of this loss was in the country’s livestock sector ($8 billion).[footnoteRef:1] The socio-economic impacts of drought during this period were also severe, particularly in terms of under-nutrition; Global Acute Malnutrition rates in the arid counties regularly exceeding 20%, with spikes from 25- 30% witnessed in 2009 and 2011[footnoteRef:2]. With variability of rainfall increasing and climate change likely to reduce the recovery time between climatic shocks even further, the human costs and budget implications of underinvestment will continue to rise. [1: Kenya Post-Disaster Needs Assessment (PDNA) for the 2008-2001 Drought, MOF.] [2: Ibid.]

Reversing this trend will first and foremost require sustained commitment on the part of national governments and regional institutions. The Government has instituted important policy reforms but needs to focus on transparent procedures for implementing these reforms. At the same time, donor expectations of transparency and social accountability will have to be backed up with investment in capacity, monitoring and evaluation. The GoK’s Vision 2030 Development Strategy for Northern Kenya and other Arid Lands (August, 2011) provides a strong signal of the government’s commitment to significant development in the arid and semi-arid counties. Consultations with communities expected to benefit from this strategy should be part of a broader effort to gain donor alignment and support for this vision.

From a USG perspective, reducing humanitarian requirements over the long term entails using humanitarian resources strategically in the near to medium term. The Office of Foreign Disaster Assistance’s (OFDA’s) disaster risk reduction and livelihood programs are already shaping community-based disaster risk management and resilience programing and offer an opportunity to build the arid land. REGAL seeks to identify, integrate and sustain humanitarian investments that prove to be effective in sustainably increasing resilience and reducing the need for recurrent humanitarian assistance, and to build on these investments to accelerate sustainable economic growth.

Project Overview

As part of the USG’s expanded FtF strategy in Kenya, USAID/Kenya intends to award two linked procurements to increase social stability and economic growth in the arid lands (ALs). These procurements, which make up USAID’s REGAL Project, will focus on resilience and economic growth and will be implemented in a coordinated and integrated fashion.

The vision for this effort and for REGAL is:

By 2017, economic and social stability will have increased across Kenya’s arid lands (ALs) fueled by empowered and resilient communities, well managed natural resources, expanded and diversified economic opportunities, vibrant local institutions, and good governance. The USG will achieve this vision through integrated investments and innovations to reduce vulnerability, build resilience, and stimulate growth.[footnoteRef:3] [3: Kenya, Ethiopia, and Regional Missions, January 2012 ]

REGAL’s two activities are described below:

· REGAL—Improved Resilience (REGAL-IR) activity is a five-year, $45 million agreement that will partner with the government, WFP, and other agencies in five arid counties of Turkana, Marsabit, Mandera, Wajir, Isiolo and Garissa. REGAL-IR will employ a community-driven development approach to build social, economic, and environmental resilience. Focus areas are disaster risk reduction, diversification of livelihood opportunities, community management of natural resources, improving market access, disaster risk reduction and improving nutritional outcomes.

· REGAL—Accelerated Growth (REGAL-AG) activity is a five-year, $18-22 million contract which deepens USAID investment in two arid counties: Marsabit and Garisaa. This activity will improve the inclusiveness and competitiveness of the livestock value chain in two counties while furthering livestock-related economic opportunities. A key focus on the project will involve facilitating behavior change in actors all along the chain – from livestock keepers, to middlemen, traders, transporters, and buyers – in order to improve their economic resilience, profitability and stimulate growth.

REGAL will include “Whole of Government” engagement and specific “Whole of USAID” investments by Food for Peace (FFP), OFDA, USAID/Kenya, and the Bureau of Food Security (BFS). Coordination will also be promoted across donors, both bilateral and multilateral. All USG investments will contribute to a comprehensive Results Framework. FFP investments will contribute to risk reduction and improved resilience by leveraging the WFP footprint across nine arid counties to provide foundational natural resource management and livelihood diversification programming.

REGAL Results Framework

Figure 1: Results Framework:

Feed the Future Kenya: Help over 500,000 vulnerable Kenyans escape hunger and poverty Resilience and Economic Growth in the Arid Lands (REGAL):

IR 1: REGAL

Improving Resilience 1.1: Strengthened & Diversified Livelihood Opportunities 1.2: Advancing Value Chain Inclusiveness

IR 2: REGAL

Accelerated Growth 2.1: Improve the Enabling Environment for Livestock Value Chain Development 2.2: Improv e Market Linkages 2.3: Improv e Livestock Productivity 1.3: Improved Management & Productivity of Natural Resources 1.4: Improved Conflict Management 1.5: Improved Drought Management 1.6: Consumption of Nutrition Foods 2.

4: Expand Existing/Develop New Service and Input Markets

2.

5: Strengthen Existing/Develop New Livestock Related Economic Opportunities

REGAL’s Intermediate Result illustrative indicators include:

IR.1 Improving Resilience

· Number of people in need of humanitarian assistance, normalized by severity of drought

· Prevalence of acute/chronic malnutrition

· Income in target areas

· Household Dietary Diversity Score and Household Hunger Scale

· Value of household asset holdings

IR.2 Accelerated Growth

· Pastoralists income from live animals and livestock products

· Volume and value of sales of live animals and livestock products

· Investment in upgrading in the livestock value chain[footnoteRef:4] [4: Upgrading includes changes on the part of value chain actors in products, processes, value added functions and market channels in response to changes in market demand. “Investments in upgrading” translates into improved competitiveness.]

· Prevalence of chronic malnutrition (stunting)

· Number of new technologies or management practices under field testing

· Number of households using proven technologies and innovations16

Cross-Cutting

· Number of communities with effective local management of natural resources (e.g. water, rangeland)

· Number of communities indicating participation in local decision-making

· Number of communities with effective conflict management institutions

· Women’s empowerment in the target areas

STATEMENT OF WORK (SOW)

C.1 REGAL-AG Goal and Objectives

The larger REGAL Project – through REGAL-IR investments in social and economic resilience – will lay a foundation for REGAL-AG. This foundation will include investments that foster the sustainable management of the natural resource base, address issues related to governance of grazing land, water and other resources, mitigate conflicts, and allow for diversification of livelihoods.

The goal of the REGAL-AG is to increase economic growth in the selected arid counties of Marsabit and Garissa by means of a more inclusive and competitive livestock value chain.

Activity objectives are to:

a) Improve the enabling environment for livestock value chain development

b) Improve the market linkages

c) Improve livestock productivity

d) Expand existing and develop new livestock service and input markets

e) Expand livestock-related economic opportunities that engage and benefit men and women

A number of systemic and cross cutting issues are critical to achieving these objectives. They are:

· A policy, legal and regulatory environment that creates incentives for investment by all value chain actors, with clear benefits flowing to both male, female, and young pastoralists;

· Access to financial services all along the value chains;

· Gender-equitable solutions to improved competitiveness, productivity and livestock-related enterprise development; and

· Sustainable natural resource management that supports effective management of grazing land, water and other natural resources and increases resilience to climate change stresses.

C.2. REGAL-AG Vision, Analytics, Causal Model, Strategy, and Components

C.2.1 REGAL-AG Vision

REGAL-AG will foster a vibrant livestock value chain that generates opportunities for those all along the value chain, including pastoralist livestock keepers at the base of the chain and middlemen, traders, transporters, processors, and buyers further down the chain. REGAL-AG will foster growth, while expanding the depth and breadth of benefits from improved value chain competitiveness. Inclusion will be enhanced by improving market access, the availability and affordability of inputs and services needed to benefit from market participation, the incentives created by the enabling environment for investing even for those with scarce resources, and working with livestock keepers to help them better manage risk.

The growth of the livestock value chain will generate economic opportunities for those directly engaged in the value chain and transfer a greater share of market value back down the value chain to households and communities. This transfer of value will, in turn generate new opportunities for livestock- and non-livestock-related input and service providers. The multiplication effects of growth will result in greater purchasing power with the potential of stimulating new trade and business activities that supply food, consumer goods, health care, and education, and create wage employment.

Improved access to markets and financial and livestock-related services will contribute to more commercial behavior on the part of pastoralists. Over time, pastoralists will use strategies that allow the sale of their livestock at peak body condition and for high prices, save the proceeds, and buy livestock when prices are relatively low. This would reverse the current trend that has exacerbated vulnerability among those with the smallest herds who sell when they are desperate, at very low prices, while the better off are able to increase their herd size by buying from desperate herders at very low prices. Communities will benefit when more value is captured locally, putting more money into the hands of men, women and youth.

These new opportunities diversify the options open to pastoralists in responding to pressures on the livestock market system resulting from recurrent drought, natural resource degradation, and years of under-investment. The challenge for REGAL-AG Contractor is to identify opportunities to build upon the base provided by humanitarian assistance and resilience programming to expand economic opportunities in the livestock value chain that increase incomes and assets of the poor. The aim is to empower the poor through value chain by improving the functioning of the livestock value chain to be more competitive and more inclusive of the poor. Empowering the poor to participate in and benefit from sustained growth of the livestock value chain will contribute to their increased resilience and reduced dependence on humanitarian aid.

C.2.2 Value Chain Analytics and Technical Services for Evidence-Based Implementation

The GoK, academics, USAID and other donors have commissioned or conducted considerable studies focused on pastoralists and the Arid Lands. The Contractor will build on these findings, while using USAID’s value chain framework[footnoteRef:5] and approach[footnoteRef:6] to analysis to identify gaps. The synthesis of existing and new analytics should begin with asking: “why the value chain or market system functions as it currently does?” to understand opportunities, potential drivers of change, and obstacles in the system to improved competitiveness, productivity, and broad-based benefits. It should also lead to an understanding of the relationships between value chain actors: the nature of these relationships including the extent or lack of cooperation, competition and distribution of benefits. In the case of pastoralism, where the social system is so important, understanding these relationships is key to designing effective and strategic interventions. [5: http://apps.develebridge.net/amap/index.php/Value_Chain_Development] [6: http://microlinks.kdid.org/good-practice-center/value-chain-wiki/value-chain-analysis]

Further analytical work might be done with the participation of value chain actors including – where it makes sense – a “demand study” of consumers of livestock from the arid lands. This participation in analyses can assist in building consensus on priorities for investment and create awareness of the needs of different actors and how a common approach can benefit all.

REGAL-AG will have staff or access to technical experts to ensure that the overall REGAL Program has the technical services needed in areas such as (but not limited to):

· End market analysis and livestock marketing

· Market systems approaches

· Market facilitation

· Livestock productivity including, animal health services, breeding, pasture and forage management

· Capacity building for producer and/or market organizations

· Rangeland and water management

· Environmental and climate change vulnerability assessments

· Gender

C.2.3 Causal Model

Underlying the design of REGAL-AG is the hypothesis that improving the competitiveness and inclusiveness of the livestock value chains in which large numbers of poor pastoralists participate can be an effective approach for increasing social stability and economic growth in the arid lands. However, special and innovative approaches are needed to allow the poor to take advantage of and benefit from market- and value chain-related opportunities. The Offeror’s proposal must articulate the development hypothesis underlying the proposed activities, outputs and outcomes which will lead to expected results. Key assumptions and risks to achievement of project outcomes and intermediate results, and mitigating factors/strategies, should be explicitly stated.

C.2.4 REGAL-AG Strategy

Analysis will inform the REGAL-AG’s strategy for improving value chain competitiveness and inclusiveness. The strategy will identify and prioritize the changes that are needed to upgrade the livestock market system and make it more inclusive of male and female livestock keepers. The plan will be temporal, i.e., include the sequencing of interventions needed to move the value chain from its current state toward a five-year vision (as described above). The experience of stakeholders of REGAL-AG – value chain actors, private service providers, and government officials – in working together towards agreed upon objectives will provide an opportunity to share learning and define successful approaches and best practices. The plan for realizing the vision of the REGAL-AG activity is bound to change. Nonetheless, the initial plan will be a guidepost for implementation of the activity that will be monitored and adjusted throughout the life-of-the-activity and afterwards. The REGAL-AG strategy will be revised on an annual basis in light of evidence from REGAL-AG and -IR as well as other USAID evaluation and monitoring results and vulnerability assessments. Annual work plans will be based on the annually revised strategy.

The assumption of this Statement of Work is that resilience programs can lay the foundation for longer-term development, including value chain development. The Contractor will need to explore and /confirm how humanitarian assistance can best lay the foundation for longer term development and, specifically, where the strongest linkages to development of the livestock value chain exist.

C.2.5 Components

To achieve the above objectives and address cross cutting issues, REGAL-AG is comprised of five inter-related components:

Component 3:

Improving Livestock Productivity

C.3 REGAL Implementation Approach

USAID’s overall project – REGAL-AG and REGAL-IR – will embrace some common principles and approaches.

1. A systems approach will guide the REGAL-AG activity. REGAL-AG posits that improving social stability and economic growth in the arid lands requires changes in the following inter-connected systems:Figure 2: Value Chain Structure

· the livestock value chain or market system,

· governance of land, water and other natural resources,

· the natural eco-system related to pasture and crop farming,

· the socio-cultural system, which underpins the indigenous social safety net as well as many of the conflicts in the region,

· the supporting system (e.g. end markets, financial services, and BDS) for livestock and non-livestock-related livelihoods, and

· state and non-state institutions and their capacity to deliver services and represent the interests of their constituencies.

To improve value chain competitiveness, The Contractor will take a market systems approach. This market system is made up of vertically and horizontally linked actors – that include producers, traders, processors, wholesalers and/or exporters – selling to end markets and supported by a range of technical, business and financial service providers (service markets), who enable value chain actors to improve their performance. Both value chain actors and service providers operate within an enabling environment (that includes the natural eco-system, socio-cultural system as well as the policy and regulatory environment) that either facilitates for hinders sustainable value chain development and competitiveness. The quality of the interconnections, including ability of actors to cooperate and/or constructively compete, is key to facilitating investments in upgrading and improving competitiveness. Win-win relationships between actors support both social and economic resilience.

As noted above, this market system is highly dependent on the natural eco-system, governance, the social support networks, and, thus, REGAL-IR’s interventions in these multi-layers, must to be coordinated with REGAL-AG in order to achieve economic growth objectives.

2. Facilitation will be central to the implementation of REGAL-AG. Facilitation aims to improve the functioning of a system and to catalyze systemic change without taking a direct role in the system. Its objective is to ensure sustainability by putting local actors front and center as drivers of the change process. It focuses on both opportunities and constraints that explain why the system – whether economic, natural resource social or political – functions the way it does. While understanding the “tangible” constraints to systemic change, such as lack of access to resources or markets, facilitation also addresses the “intangibles,” such as lack of trust between actors, lack of transparency, rent seeking behavior, power asymmetries and/or socio cultural beliefs and norms that underpin why people behave the way they do. The principles of facilitation[footnoteRef:7] include: [7: For a briefing paper on “understanding facilitation: http://microlinks.kdid.org/sites/microlinks/files/resource/files/Facilitation_Brief.pdf]

· “Light touch” or intensity of involvement;

· Ownership of the change process by value chain actors;

· Empowerment;

· Relationships;

· Leverage; and

· Demonstrate, scale up and exit.

3. Inclusion. REGAL-IR will work directly with pastoral communities, ensuring inclusion of vulnerable groups who are economically marginal, socially excluded, and geographically isolated; and those who are exiting pastoralism or have exited altogether. REGAL-AG’s Contractor will advance inclusion in the livestock sector and livestock-related economic activities– in part – by engaging excluded groups in stakeholder meetings, designing available, affordable, and accessible service market products (finance, animal health, animal nutrition and breeding services), and identifying other incentives for wider participation in livestock and livestock-related value chains.

4. Sub-Contracting for Impact. The Contractor will form a consortium composed of local organizations, such as Livestock Marketing Associations, SACCOs, NGOs, private firms involved in livestock value chain firms and businesses which expand livestock-related economic activities, or other local organizations best placed to address key value chain and systemic constraints. The sub-contractors will work closely with target beneficiaries to increase livestock productivity, improve and expand market linkages, and provide a deeper supply of inputs and services which will result in value chain upgrading. The sub-contracts should focus on minimizing the risks for value chain actors to innovate and/or invest, and on developing, rather than distorting markets. Subcontracts should also facilitate diversified economic opportunities that demonstrate innovations and technologies that reduce labor burden and/or increase productivity. As stated in Section B, a minimum $8,140,000 should be put towards subcontracts to assist in the achievement of the desired results of the program while also serving to strengthen the capacity of local institutions. In addition, REGAL-AG will facilitate investments motivated by commercial incentives.

5. Empowerment of women. Inclusive livestock value chain growth requires the participation of both men and women pastoralists. The Contractor will take an evidence-based approach in identifying gender gaps in access to productive resources, input and service markets, markets for livestock and livestock products, and diversified livelihood activities. This will provide the evidence base for developing strategies to close these gender gaps and build inclusive and resilient social and economic systems. Project implementation will empower women in decisions about livestock production, the use of productive resources (land, water, capital), and control over income and time use. Women’s leadership in communities will be built upon and strengthened to foster inclusive growth and strong resource management. Systematic monitoring, evaluation, and learning components will generate sex disaggregated data at the household and market levels and incorporate impact evaluations around critical questions related to gender equality and women’s empowerment in pastoral social and economic systems.

6. Benefits to smallholder livestock keepers. Benefits are a key incentive for investments in upgrading. Benefits can be improved for smallholders without distorting markets by: (a) enhancing their bargaining power in the marketplace; (b) promoting competition among service providers or buyers; (c) reducing transaction costs to improve access to markets and services; and (d) using ICT and other creative solutions to improve access to market information and commercial networks.

7. Collaborate, Learn and Adapt (CLA). USAID’s Bureau for Program Planning and Learning (USAID/PPL) has developed an approach to learning called Collaborating, Learning and Adapting (CLA). This approach facilitates a process for strategic collaboration among partners, systematically generates and captures learning, facilitates the exchange of knowledge, and promotes a learning culture. CLA will be important in Marsabit and Garissa, where REGAL investments in economic growth, resilience, risk reduction and governance will likely be implemented by different implementing partners, effective strategies for collaborating and collective learning will be essential. To this end the Contractor will participate in USAID Kenya and/or East Africa regional learning platforms as well engage with the Agricultural Sector Coordination Unit (ASCU), National Drought Management Authority (NDMA) and other necessary institutions to ensure the coordination of efforts between GoK efforts and those of other donors.

8. Evidence-based implementation. The REGAL-AG Contractor’s interventions will be informed by analytics, including the End Market Study[footnoteRef:8] completed in January 2012, value chain analyses, and a mandatory gender assessment. However, considerable analyses[footnoteRef:9] have already been conducted. The Contractor will mine these existing studies and focus on filling gaps needed to ensure evidence-based implementation. The Contractor will use USAID’s value chain framework[footnoteRef:10] to identify gaps and ensure a holistic analysis to inform implementation in Marsabit and Garissa counties. The synthesis of existing and new analytics should begin with asking, “why the value chain functions as it currently does?” Before looking at solutions to problems, the analytics needs to clarify the underlying causes of identified problems. Analytics should aim to understand opportunities, potential drivers of change, and obstacles in the system to improved competitiveness, productivity, and broad-based and gender-disaggregated benefits. [8: ) “Kenya Livestock and Meat End Market Study,” by Elisabeth Farmer and James Mbwika, ACDI/VOCA under AMAP, February 2012. ] [9: (1) The study commissioned by USAID/Kenya, “Enhancing Resilience To Climate Change In The Horn Of Africa,” by Jesse T. Njoka, Centre for Sustainable Dryland Ecosystems and Societies, University of Nairobi; (2) “Enhancing Resilience and Promoting Development in Pastoralist Areas of The Horn of Africa,” by Derek Headey, Alemayehu Seyoum Taffesse, Liang You, International Food Policy Research Institute (IFPRI), Washington DC, USA & Addis Ababa, Ethiopia; and (3) “Kenya Livestock and Meat End Market Study,” by Elisabeth Farmer and James Mbwika, ACDI/VOCA under AMAP, February 2012. ] [10: http://apps.develebridge.net/amap/index.php/Value_Chain_Development]

9. Ensure flexibility to respond to new opportunities and changing conditions. Flexibility is critical to promoting private sector development, especially when markets are dynamic or volatile and REGAL-AG must have the flexibility to respond to new opportunities as well as changing conditions.

10. Promote environmental stewardship. The Contractor must incorporate activities that increase the capacity of smallholders to plan for and be resilient to the effects of climate change. Interventions will seek to minimize negative environmental impact, enhance the resource base, and improve management practices. Activities that have actual or potential impact on the physical environment need to identify and mitigate any negative impacts in compliance with USAID and Kenyan environmental regulations, and with approaches consistent with facilitation as opposed to direct service provision.

C.4 Components of REGAL-AG

Component 1 – Improving the Enabling Environment

Approach - REGAL envisions a vibrant livestock value chain in Marsabit and Garissa counties that is characterized by increasing numbers of animals moving from rangelands to terminal markets and vibrant input and service markets supporting the livestock sector. REGAL-IR will work to lay the foundation for this expanded economic activity by fostering an enabling environment that includes a rehabilitated eco-system of grazing land, water and vegetation, a reinvigorated traditional and reformed formal governance system that effectively manages land and resource allocation, and mechanisms for conflict resolution.

Building on this foundation, the REGAL-AG Contractor will work with GoK, and with the participation of stakeholders to foster an enabling environment of: (1) appropriate, clearly understood and well-implemented policies, rules and regulations that are publicly vetted and developed through participatory process; (2) effective, and accessible infrastructure and public services that support the commercialization of the livestock sector; and (3) recognition of the value of the pastoral system, including its traditional governance and social safety net systems.

Figure 4: Policy-Making System

To assure passage and implementation of required enabling policies, public investment in supporting infrastructure and delivery of required public services, pastoralists and other value chain actors must have a voice through elected bodies and public offices, especially as budgets are determined and resources appropriated. To ensure a voice for pastoralists and other value chain actors, a policy-making system is needed that allows for engagement in the political system.). The policy-making system should include a mechanism to monitor, evaluate, learn, and adjust policies based on participatory platforms. With devolution, changes in the policy process must align with new government structures and take advantage of resultant opportunities.

REGAL-AG in coordination with other stakeholders, aims to empower representative organizations with the information they need to advocate for a fair share of county resources. In all such efforts equity among ethnic, economic, and gender groups will guide the design for REGAL-AG activities.

In strengthening the enabling environment for increased commercialization of the livestock sector, the REGAL-AG Contractor will need to consider the informal dimensions of the enabling environment, including the norms, customs and codes of conduct that affect value chain actors’ attitudes, behaviors and access to resources and markets. These informal rules are particularly important among pastoralists and will be key to furthering commercialization. The Contractor might work with REGAL-IR to foster viable and acceptable pathways for vulnerable populations to effectively engage in commercial activities. These pathways will likely include increased access to markets, finance and animal health care as well as culturally acceptable mechanisms for selling and restocking herds and ensuring the social safety net.

Expected Results - In order to reach the objectives of this component, the Contractor will be responsible for the following results.

The Contractor shall:

· Advocate for greater GoK recognition of pastoral institutions, including customary land and property rights, and resource sharing.

· Facilitate development of public-private agreements resulting in an increase in the availability of market infrastructure, inputs and services.

· Support and facilitate formulation and implementation of conducive livestock marketing policies that include livestock mobility across borders.

Illustrative Activities - The following is a list of illustrative activities that the Contractor may wish to consider when developing a program to meet the expected results listed above. The Contractor is not restricted to these activities and is encouraged to propose others that may also be innovative and/or believed to reach the results required above.

· Host public forums at national and county levels for all relevant stakeholders around livestock value chain topics and ensure that policy changes are advocated for by livestock value chain organizations at the county and national level.

· Publish policy assessment studies relevant to livestock value chain in Marsabit and Garissa in open media.

· Value chain analyses, policy analyses and assessments: the Contractor’s technical experts will carry out targeted analyses to inform public forums at county level and possibly in Nairobi.

· Support for formation of livestock value chain stakeholder groups, including GoK policy makers, to discuss issues affecting the enabling environment in which they operate. Stakeholder forums at county level might address such issues as employment and deployment of animal health service providers (veterinarians and animal health technicians) to ward-level markets, the ban on night transport of livestock and the like. Stakeholders at all levels might address infrastructure investments, delivery of public services, budgets, and governance issues affecting the livestock value chain.

· Leadership training for pastoralists and government actors to engage effectively in the policy-making system.

· Public education on key policies and progress toward developing and implementing them.

· Use of media in creating awareness amongst all stakeholders regarding the policy process and the implementation of policies key to the economic and social resilience of the ALs.

· Creation of appropriate mechanisms and opportunities for vulnerable populations to engage in policy dialogue.

· Innovative approaches to conflict mitigation that reduce constraints to human and animal mobility within counties and across borders.

Component 2 – Improving Market Linkages

Approach - The Contractor will work to catalyze greater cooperation and constructive competition that leads to innovation among vertically- and horizontally-linked livestock value chain actors. The term “vertical linkages” in value chains refers to the strength of vertical cooperation amongst value chain actors: i) in getting a product from input supply to consumer; ii) in transmitting information (prices, quality requirements and quantities demanded) from buyers down the chain to suppliers; and iii) in conveying incentives from buyers willing to pay a premium for quality products to suppliers. Horizontal linkages relate to longer-term cooperative arrangements among value chain actors performing similar functions that involve interdependence, trust and resource pooling in order to jointly accomplish common goals. Formal and informal horizontal linkages can help reduce transaction costs and/or, create economies of scale for service access and/or delivery. Horizontal linkages can facilitate collective learning and risk sharing while increasing the potential for upgrading and innovation.

Strengthened vertical and horizontal linkages will enable pastoralists’ and traders’ to better access markets, inputs, and services (e.g., animal health services, finance, breeding, etc). In working with stakeholders to strengthen these linkages, REGAL-AG aims to empower vertically and/or horizontally linked actors to work together to resolve joint interests. (e.g., policy advocacy, capacity sharing to meet growing market demand, service delivery, contract sales, and/or purchasing of inputs or services). Improving cooperation, however, will require long-term, trusting commercial relationships and efforts on the part of REGAL-IR and AG on resolving relationships both within the value chain and related to resource governance.

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