SOL-623-15-000003_GEEL.pdf

Project Title: Growth, Enterprise, Employment and Livelihoods (GEEL) Contract

Solicitation #: SOL-623-15-000003

Issuance Date: June 3, 2015 Closing Date/Time for Questions: June 10, 2015, 8 a.m. Nairobi time Registration Deadline for Pre-Proposal Conference: June 7, 2015 Pre-Proposal Conference: June 11, 2015 Closing Date/Time: July 13, 2015, 8 a.m. Nairobi time

Subject: Request for Proposals (RFP) No. SOL-623-15-000003, Growth, Enterprise, Employment and Livelihoods (GEEL) Contract

The United States Agency for International Development (USAID) is seeking proposals to implement the Growth, Enterprise, Employment and Livelihoods (GEEL) Contract for USAID/East Africa as described in the attached Request for Proposals (RFP). USAID anticipates the award of one five-year Indefinite Delivery, Indefinite Quantity Contract (IDIQ). Task Order 01, with a maximum estimated cost of $15 million, and Task Order 02, with a maximum estimated cost of $35 million, will be issued simultaneously with the award of the IDIQ.

USAID anticipates that the maximum aggregate ordering limitation for contracts resulting from this RFP will be $74 million over the five-year ordering period. The maximum aggregate dollar value of task orders cannot exceed this contract ceiling. There is no guarantee on the number of task orders that the successful contractor will receive or the amount of money beyond the minimum order guarantee set forth in the RFP. USAID has determined that only one IDIQ should be issued since the projected task orders are so integrally related.

Proposals will be accepted from eligible organizations. The geographic code for this procurement is 937, and the NAICS code is 541990. In support of USAID’s interest in expanding the number and sustainability of development partners, USAID encourages proposals from potential new local partners. USAID discourages the use of exclusive agreements with international or regional/local organizations as this limits USAID’s ability to receive the best services.

Please refer to Section L for information regarding proposal requirements. Offerors should take into account the expected delivery time required by the email transmission method, and they are responsible to ensure that proposals are received at USAID by the due date and time as specified above. Failure to comply with the submission date will deem any submission unacceptable and it will not be reviewed or evaluated. Faxed proposals are not acceptable, nor will they be reviewed or evaluated.

Section L of the RFP sets forth all instructions for the preparation and submission of required proposal contents.

Section M states the criteria by which proposals will be evaluated. Oral explanations or instructions given before award of the contract will not be binding.

Pre-Proposal Conference: A pre-proposal conference will be held on June 11, 2015 in Nairobi, Kenya. The purpose of the Pre-Proposal Conference is to ensure an understanding of the RFP’s technical objectives and to review the proposal process. The Conference agenda will include a short presentation of the RFP and a question/answer session based on participants’ review of the RFP. All interested potential Offerors are welcome to attend, but it will be limited to 2 representatives per Offeror and all attendees must register. If

See Cover Letter and Section L

6/3/15 x

See Section G.5

Maria Televantos

PART I - THE SCHEDULE

SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

B.2 CONTRACT TYPE AND SERVICES

B.3 MINIMUM OBLIGATED AMOUNT

B.4 MAXIMUM CONTRACT CEILING

B.5 FIXED FEE CEILING (Cost Plus Fixed Fee Task Orders Only)

B.6 APPROVED MAJOR SUBCONTRACTORS

B.7 IDIQ MANAGEMENT

B.8 INDIRECT COSTS AND ADVANCED UNDERSTANDING ON CEILINGS

SECTION C - DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 GOAL AND SCOPE

C.2 BACKGROUND AND CONTEXT

C.3 IMPLEMENTATION CONSIDERATIONS

C.4 TECHNICAL APPROACH AND EXPECTED RESULTS

C.5 MANAGEMENT AND COORDINATION

C.6 MONITORING, EVALUATION, AND REPORTING

C.7 ASSUMPTIONS AND RISKS

SECTION D - PACKAGING AND MARKING

D.1 AIDAR 752.7009 MARKING (January 1993)

D.2 BRANDING POLICY

D.3 MARKING AND BRANDING STRATEGY

SECTION E - INSPECTION AND ACCEPTANCE

E.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

E.2 INSPECTION AND ACCEPTANCE

E.3 RESPONSIBLE OFFICIAL

SECTION F - DELIVERIES OR PERFORMANCE

F.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

F.2 PERFORMANCE PERIOD

F.3 PLACE OF PERFORMANCE

F.4 PERFORMANCE MONITORING AND STANDARDS

F.5 REPORTS AND DELIVERABLES OR OUTPUTS

F.6 ORDERING PROCEDURES

F.7 REQUEST FOR TASK ORDER PROPOSAL (RFTOP) & AWARD CONTENT

F.8 TASK ORDER ADMINISTRATION

F.9 KEY PERSONNEL

F.10 AIDAR 752.7005 SUBMISSION REQUIREMENTS FOR DEVELOPMENT EXPERIENCE

DOCUMENTS (September 2013)

SECTION G - CONTRACT ADMINISTRATION DATA

G.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

G.2 CONTRACTING OFFICER

G.3 CONTRACTING OFFICER’S REPRESENTATIVE (COR)

G.4 CONTRACTOR’S PRIMARY POINT OF CONTACT

G.5 PAYING OFFICE

G.6 INVOICING INSTRUCTIONS

G.7 CONTRACTOR'S PAYMENT ADDRESS

G.8 TECHNICAL DIRECTION/RELATIONSHIP WITH USAID

SECTION H - SPECIAL CONTRACT REQUIREMENTS

H.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

H.2 AIDAR 752.7007 PERSONNEL COMPENSATION (JULY 2007)

H.3 ADDITIONAL REQUIREMENTS FOR PERSONNEL COMPENSATION

H.4 AUTHORIZED GEOGRAPHIC CODE

H.5 AIDAR 752.225-70 SOURCE AND NATIONALITY REQUIREMENTS (FEB 2012)

H.6 752.7004 EMERGENCY LOCATOR INFORMATION (JUL 1997)

H.7 INSURANCE AND SERVICES

H.8 752.228-70 MEDICAL EVACUATION (MEDEVAC) SERVICES (JULY 2007)

H.9 GOVERNMENT FURNISHED FACILITIES OR PROPERTY

H.10 LANGUAGE REQUIREMENTS

H.11 ENVIRONMENTAL COMPLIANCE

H.12 CONFIDENTIALITY AND OWNERSHIP OF INTELLECTUAL PROPERTY

H.13 AUTHORIZED WORK WEEK

H.14 752.7034 ACKNOWLEDGMENT AND DISCLAIMER (DEC 1991)

H.15 752.231-71 SALARY SUPPLEMENTS FOR HG EMPLOYEES (OCT 1998)

H.16 FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL CONFERENCES (JAN 2002)

H.17 EXECUTIVE ORDER ON TERRORISM FINANCING

H.18 REPORTING OF FOREIGN TAXES

H.19 USAID DISABILITY POLICY - ACQUISITION (DECEMBER 2004)

H.20 ORGANIZATIONAL CONFLICT OF INTEREST

H.21 CONFLICTS OF INTEREST

H.22 STANDARDS OF CONDUCT -- IMPROPER BUSINESS PRACTICES

H.23 752.7025 APPROVALS (APR 1984)

H.24 752.7032 INTERNATIONAL TRAVEL APPROVAL AND NOTIFICATION REQUIREMENTS (JAN

1990)

H.25 BUSINESS CLASS TRAVEL

H.26 CONTRACTOR’S USE OF PROJECT VEHICLES AND LIABILITY INSURANCE

REQUIREMENTS FOR PRIVATELY OWNED VEHICLES

H.27 DISCLOSURE OF INFORMATION

H.28 CONSENT TO SUBCONTRACT

H.29 NONDISCRIMINATION (JUN 2012)

H.30 COMPLIANCE WITH THE TRAFFICKING VICTIMS PROTECTION REAUTHORIZATION ACT

H.31 AIDAR 752.245-71 TITLE TO AND CARE OF PROPERTY (APR 1984)

H.32 MOBILE BANKING

H.33 ELECTRONIC PAYMENT SYSTEM

H.34 GENDER CONSIDERATION

H.35 GRANTS UNDER CONTRACT (GUC)

H.36 SUBCONTRACTING REPORT

H.37 CONFERENCE PLANNING AND REQUIRED APPROVALS (AUG 2013)

H.38 SPECIAL SOMALIA CONDITIONS

H.39 LOGISTIC SUPPORT

H.40 SUBMISSION OF DATASETS TO THE DEVELOPMENT DATA LIBRARY (DDL) (OCT 2014)

H.41 USAID IMPLEMENTING PARTNER NOTICES (IPN) PORTAL FOR ACQUISITION (JUL 2014) 59

PART II - CONTRACT CLAUSES

SECTION I - CONTRACT CLAUSES

I.1 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE

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

I.3 52.203-99 PROHIBITION ON CONTRACTING WITH ENTITIES THAT REQUIRE CERTAIN

INTERNAL CONFIDENTIALITY AGREEMENTS (APR 2015)

I.4 52.209-9 UPDATES OF PUBLICLY AVAILABLE INFORMATION REGARDING RESPONSIBILITY

MATTERS (JUL 2013)

I.5 52.216-18 ORDERING (OCT 1995)

I.6 52.216-19 ORDER LIMITATIONS (Oct 1995) I.7 52.216-22 INDEFINTE QUANTITY (Oct 1995)

I.8 52.217-2 CANCELLATION UNDER MULTIYEAR CONTRACTS (OCT 1997)

I.9 752.219-70 USAID MENTOR- PROTÉGÉ PROGRAM (JUL 2007)

PART II – LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS

SECTION J - LIST OF ATTACHMENTS

SECTION K - REPRESENTATIONS, CERTIFICATIONS AND OTHER

STATEMENTS OF THE OFFEROR

K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

K.2 52.204-8 ANNUAL REPRESENTATIONS AND CERTIFICATIONS (DEC 2014)

K.3 52.209-5 CERTIFICATION REGARDING RESPONSIBILITY MATTERS (APR 2010)

K.4 52.209-7 INFORMATION REGARDING RESPONSIBILITY MATTERS (JUL 2013)

K.5 752.226-1 DISADVANTAGED ENTERPRISE REPRESENTATION (APR 1991)

K.6 52.203-98 PROHIBITION ON CONTRACTING WITH ENTITIES THAT REQUIRE CERTAIN

INTERNAL CONFIDENTIALITY AGREEMENTS-REPRESENTATION (APR 2015)

K.7 FAR 52.209-XX REPRESENTATION BY CORPORATION REGARDING A DELINQUENT TAX

LIABILITY OR A FELONY CRIMINAL CONVICTION (Deviation OAA-DEV-14-02c) (AUG 2014) .. 78

K.8 INSURANCE - IMMUNITY FROM TORT LIABILITY

K.9 AGREEMENT ON, OR EXCEPTIONS TO, TERMS AND CONDITIONS

K.10 SIGNATURE

SECTION L – INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS OR

RESPONDENTS

L.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

L.2 52.215-1 INSTRUCTIONS TO OFFERORS - COMPETITIVE ACQUISITION (January 2004) L.3 52.233-2 SERVICE OF PROTEST (September 2006)

L.4 GOVERNMENT OBLIGATION

L.5 GENERAL INSTRUCTIONS

L.6 DELIVERY INSTRUCTIONS

L.7 FORMAT AND PRESENTATION

L.8 INSTRUCTIONS FOR THE PREPARATION OF THE TECHNICAL PROPOSAL

L.9 INSTRUCTIONS FOR THE PREPARATION OF THE COST/BUSINESS PROPOSAL

L.10 INSTRUCTIONS FOR THE PREPARATION OF BRANDING IMPLEMENTATION AND

MARKING PLANS

SECTION M - EVALUATION FACTORS FOR AWARD

M.1 GENERAL INFORMATION

M.2 TECHNICAL EVALUATION CRITERIA

M.3 COST/PRICE EVALUATION

M.4 DETERMINATION OF COMPETITIVE RANGE

M.5 SOURCE SELECTION

M.6 AWARD

ATTACHMENT J.1 - TASK ORDER 01

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

B.2 CONTRACT TYPE

B.3 BUDGET

B.4 OTHER RFTOP INFORMATION

B.5 PAYMENT OF FIXED FEE

B.6 MULTI-YEAR CONTRACT

SECTION C – STATEMENT OF WORK

C.1. PURPOSE

C.2. BACKGROUND

C.3. TECHNICAL APPROACH

C.4. OTHER IMPLEMENTATION CONSIDERATIONS

C.5. DELIVERABLES

SECTION D – PACKAGING AND MARKING

D.1 BRANDING POLICY AND STRATEGY

SECTION E – INSPECTION AND ACCEPTANCE

E.1 TASK ORDER PERFORMANCE EVALUATION

SECTION F – DELIVERIES OR PERFORMANCE

F.1 INCORPORATION OF IDIQ CLAUSES

F.2 PERIOD OF PERFORMANCE

F.3 REPORTING REQUIREMENTS

F.4 DELIVERABLES

F.5 KEY PERSONNEL

SECTION G – TASK ORDER ADMINISTRATION DATA

G.1 INCORPORATION OF IDIQ CLAUSES

G.2 CONTRACTING OFFICER

G.3 CONTRACTING OFFICER’S REPRESENTATIVE (COR)

G.4 CONTRACTING OFFICER'S AUTHORITY

G.5 TECHNICAL DIRECTION

SECTION H – SPECIAL TASK ORDER REQUIREMENTS

H.1 INCORPORATION OF IDIQ CLAUSES

H.2 REQUESTS FOR CONSENT TO SUBCONTRACT

SECTION I – CONTRACT CLAUSES

I.1 INCORPORATION OF IDIQ CLAUSES

I.2 52.217-8 OPTION TO EXTEND SERVICES (NOV 1999)

ATTACHMENT J.2 - TASK ORDER 02

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

B.2 CONTRACT TYPE

B.3 BUDGET

B.4 OTHER RFTOP INFORMATION

B.5 PAYMENT OF FIXED FEE

B.6 MULTI-YEAR CONTRACT

SECTION C – STATEMENT OF WORK

C.1. PURPOSE

C.2. GOAL AND SCOPE

C.3. BACKGROUND

C.4. OBJECTIVES AND EXPECTED RESULTS

C.5. DELIVERABLES

C.6. MANAGEMENT AND COORDINATION

SECTION D – PACKAGING AND MARKING

D.1 BRANDING POLICY AND STRAREGY

SECTION E – INSPECTION AND ACCEPTANCE

E.1 TASK ORDER PERFORMANCE EVALUATION

SECTION F – DELIVERIES OR PERFORMANCE

F.1 INCORPORATION OF IDIQ CLAUSES

F.2 PERIOD OF PERFORMANCE

F.3 REPORTING REQUIREMENTS

F.4 DELIVERABLES

F.5 KEY PERSONNEL

SECTION G – TASK ORDER ADMINISTRATION DATA

G.1 INCORPORATION OF IDIQ CLAUSES

G.2 CONTRACTING OFFICER

G.3 CONTRACTING OFFICER’S REPRESENTATIVE (COR)

G.4 CONTRACTING OFFICER'S AUTHORITY

G.5 TECHNICAL DIRECTION

SECTION H – SPECIAL TASK ORDER REQUIREMENTS

H.1 INCORPORATION OF IDIQ CLAUSES

H.2 REQUESTS FOR CONSENT TO SUBCONTRACT

SECTION I – CONTRACT CLAUSES

I.1 INCORPORATION OF IDIQ CLAUSES

I.2 52.217-8 OPTION TO EXTEND SERVICES (NOV 1999)

ATTACHMENT J3: LIST OF LINKS

ATTACHMENT J4: ACRONYM LIST

PART I - THE SCHEDULE

SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

The purpose of this contract is to provide services that fall within the Scope of Work (SOW) specified in Section C for Growth, Enterprise, Employment and Livelihoods (GEEL). USAID Task Order Contracting Officers (TOCOs) will request the work through the issuance of task orders during the ordering period as specified in Section F of the contract.

B.2 CONTRACT TYPE AND SERVICES

This is an Indefinite Delivery/Indefinite Quantity (IDIQ) type contract. The Government will issue task orders that are either Cost-Plus-Fixed-Fee (CPFF) (term or completion), Cost-Plus-Award-Fee (CPAF), Cost- Plus-Incentive-Fee (CPIF) or any Firm Fixed-Priced (FFP) type.

B.3 MINIMUM OBLIGATED AMOUNT

As required by FAR §16.504(a)(1), the minimum amount of services to be ordered under this IDIQ is $100,000. USAID shall be required to order, and the Contractor shall be required to furnish, the minimum amount of services.

B.4 MAXIMUM CONTRACT CEILING

This is a single award Indefinite Quantity Contract (IDIQ) with an overall ceiling price of $74,000,000. The maximum aggregate dollar value of task orders awarded cannot exceed the contract ceiling.

B.5 FIXED FEE CEILING (Cost Plus Fixed Fee Task Orders Only)

(a) For each task order issued under this IDIQ, the TOCO and Contractor agree to negotiate a set dollar amount for fixed fee. In negotiating the fixed dollar amount for fee, the TOCO must consider the policies and factors for establishing fee in FAR 15.404-4 as well as any applicable USAID policy on establishing a fixed fee amount. In no event, however, may the amount of fixed fee in any individual task order exceed ___percent [TBD] of the task order’s estimated cost, excluding fee. This fee must not be applied in addition to sub-grant cost fees (if applicable) which has a separate ceiling established below. The fee ceiling applies to the prime contractor and any subcontractors.

NOTE: The ceiling on fixed fee does not apply to Firm-Fixed-Price (FFP) Task Orders.

Fees for CPIF or CPAF task order types will be negotiated by the TOCO at the time of task order award

(b) The Total Estimated Cost Plus Fixed Fee for each Task Order must be negotiated in accordance with the terms of this contract.

(c) Fixed Fee Payment. For any Task Order issued under this Contract, at the time of each payment of allowable costs to the contractor, the USAID paying office ordinarily pays the contractor a percentage of fixed fee that directly corresponds to the percentage of allowable costs being paid. Two exceptions to paying fixed fee in this manner apply:

(1) If the TOCO determines that this method results in paying a disproportionately higher ratio of fixed fee than the percentage of work that the contractor has completed, then the TOCO may suspend further payment of any fixed fee until the contractor has made sufficient progress to justify further payment, up to the agreed percentage.

(2) Because the clauses entitled "Allowable Cost and Payment" (FAR 52.216-7) and "Fixed Fee" (FAR 52.216-8) are incorporated into this Contract, the terms and conditions of these clauses apply after total payments of fixed fee reach eighty-five percent (85%) of the total fixed fee.

B.6 APPROVED MAJOR SUBCONTRACTORS

Major subcontractors are those expected to perform at least 20% or a prominent part of the technical effort and approved by the IDIQ CO in accordance with FAR part 52.244-2 and part 44.202-2.

Name TBD

TOCO’s may grant separate subcontract approvals for subcontractors not listed above for task orders in accordance with FAR part 52.244-2 and 44.202-2.

B.7 IDIQ MANAGEMENT

The Contractor will be authorized to bill USAID directly for IDIQ management costs as specified in a Task Order 01.

B.8 INDIRECT COSTS AND ADVANCED UNDERSTANDING ON CEILINGS

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 for prime contractors and their major subcontractors (“major subcontractors” are those subcontractors expected to perform at least 20% or a prominent part of the technical effort):

Offeror Overhead Rate %

Overhead Ceiling Rate%

G&A

G&A Ceiling

PRIME

MAJOR

SUBCONTRACTOR(S)

NOTE 1: Insert additional indirect rates as needed for all primes and major subcontractors in the above table.

*Special Note: The un-shaded columns in the indirect cost table are the current approved indirect cost rates for the prime and major subcontractor(s).

PRIME

Description Rate Base Type Period

1/ 1/ 1/ 2/ 2/ 2/ 3/ 3/ 3/

1/Base of Application:

Type of Rate:

Period:

Source:

2/Base of Application:

Type of Rate:

Period:

Source:

3/Base of Application:

Type of Rate:

Period:

Source:

MAJOR SUBCONTRACTOR(S)

Description Rate Base Type Period

1/ 1/ 1/ 2/ 2/ 2/ 3/ 3/ 3/

1/Base of Application:

Type of Rate:

Period:

Source:

2/Base of Application:

Type of Rate:

Period:

Source:

3/Base of Application:

Type of Rate:

Period:

Source:

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

Reimbursement for indirect costs shall be at final negotiated rates, but not in excess of ceiling rates specified above.

The Government shall not be obligated to pay any additional amount on account of indirect costs above the ceiling rates established in the contract. This advance understanding shall not change any monetary ceiling, cost limitation, or obligation established in the contract.

NOTE: For Firm-Fixed-Price (FFP) Task Orders, the overhead ceilings serve as the basis for negotiation only.

NOTE: Contractors are allowed to recoup indirect costs (OH, G&A, etc.) as other direct costs if it is part of the contractor’s usual accounting procedures, consistent with FAR Part 31 and the contactor’s NICRA.

SECTION C - DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 GOAL AND SCOPE

The goal of the Growth, Enterprise, Employment, and Livelihoods (GEEL) contract is to promote inclusive economic growth in Somalia. The contract must be implemented in all three zones of Somalia. The Contractor must be based in Somalia with primary and/or satellite office locations that will best meet project needs.

C.2 BACKGROUND AND CONTEXT

Somalia is emerging from two decades of civil war, exacerbated by prolonged drought that culminated in widespread famine in 2011. A series of efforts to establish a federal government and begin the process of re-unifying the country led, in 2012, to the creation of the Federal Government of Somalia (FGS), which is attempting to restore government functions with considerable assistance from the international community.

The challenge of doing so is heightened by insecurity and high levels of corruption.

South Central Somalia was hardest hit by the civil war and, of the three zones of the country, suffers most from insecurity relating to the Al Shabaab insurgency. Nevertheless, the partial and fragile peace and security gains there have led to a remarkable rebound of business activity throughout the country and a surge of investor interest, including from returning members of the Somali diaspora. Somaliland and Puntland have established relatively stable administrations that have unique and varying relationships with the FGS. The private sector operates for the most part autonomously. As investment increases, there has been gradual support from the private sector for government to implement and enforce regulation and provide key public goods essential for business growth.

Somalia is among the poorest countries of the world with GDP per capita of $600 (2010) and among the poorest economic performers (with a 75 percent unemployment rate). However, the emergence of the FGS, relatively stable governments in Somaliland and Puntland, and the optimism of businesses and investors create an unprecedented opportunity to accelerate Somalia’s economic recovery and increase employment throughout the country by addressing key constraints to growth.

GEEL must prioritize opportunities to promote economic growth that will significantly increase employment, including jobs in industries likely to attract women and youth who have been marginalized from pursuing economic opportunities.

Constraints to growth:

Among the many constraints to growth, employment and higher incomes in Somalia, several stand out.

The cumulative absence of government: The collapse of government in Mogadishu in 1991 is felt across the board.

Social services have disappeared or are being supplied on a limited basis privately or by non-governmental organizations (NGOs). The limited infrastructure that was in place before the civil war was destroyed or has deteriorated from lack of maintenance. With no authority to establish or enforce the rule of law in the economic sphere there has been no protection of competition, and impartial enforcement of contracts or other measures to assure that the actions of businesses and investors benefit Somalia as a whole. The low starting point for rebuilding the capabilities of the federal government in Mogadishu means that government will be limited under any scenario in the foreseeable future. Governance structures in Somaliland and Puntland are modest and have limited abilities to deliver goods and services. Innovative approaches to providing public goods and public order may therefore be required.

Elite capture: The business owners who provided essential services during the civil war, such as electricity, water, telecommunications and trade, undoubtedly performed critical functions at a difficult time in Somalia’s history. However, they are now forming monopolies and aggressively asserting control over new industries.

Their influence allows them to directly affect legislation and exercise government authority over rivals and friends. “Elite capture” discourages new businesses from starting up and small and medium ones from growing, including women-owned businesses. It reduces the flow of investment for new jobs and stifles competition which contributes, in turn, to high prices and poor quality of goods and services.

Finance: There are no conventional financial institutions currently providing the full range of banking services needed in Somalia. Hawalas (traditional money transfer companies) and a mobile money system facilitate many payments between Somalis, though not all. Most damaging, there are no financial institutions to intermediate savings into investments elsewhere in the economy. The lack of finance perpetuates the problem of elite capture; those with resources already or with access to resources from family and clan are able to move forward while less connected startup entrepreneurs, small- and medium-sized businesses, and businesses owned by women lag behind.

Business climate and commercial law: Somalia has one of the most difficult climates for business in the world.

Investor protections, property rights, the ability to enforce contracts and the cost of export/import of goods are, among other factors, extraordinarily weak. This discourages investment across the board but also reinforces the problem of elite capture – business groups that already have power have the ability to protect their interests, while others do not.

Product safety standards: The industries with greatest potential to grow and create new jobs –agribusiness and fisheries – have small domestic markets. Success will depend on sufficient levels of import substitution as well as exports, which will in turn depend on the ability of Somali producers to satisfy regional and international market demands and food safety standards. Food safety systems are complex and require close cooperation between the public and private sectors. Establishing a safe, good quality system is an ambitious goal for Somalia but essential if these growth industries are to achieve their potential. Given limited government capacity, innovative solutions may be required.

Market research: Political instability, the lack of finance, elite capture, and a poor business climate are the main causes of an unusually high failure rate of businesses in Somalia. Insufficient market research is a common factor as well with the result that much investment is wasted. The very largest Somali firms undertake market research, but others rely on traditional information channels that no longer work as the economy becomes more sophisticated.

Skills: Somalia’s civil war produced a generation with little education and a limited supply of the skills demanded in the current labor market. Critical skill shortages in key industries are not addressed by current vocational training programs, in part because there are few qualified instructors to teach them. In addition, recruitment tends to be based on personal relations, rather than merit. High level technical skills are required for industries to fulfill their growth potential. Examples of skills in demand include the ability to size, design and install refrigeration and ice-making equipment in the fisheries industry or to remove field heat in agricultural products, and the ability to design and install transmission systems for renewable energy facilities.

At the moment, companies import the skilled workers they need from neighboring countries.

Women and youth: Women and youth are disproportionately affected by the low level of economic activity in Somalia and face unique additional constraints to greater economic participation. Women face much narrower opportunities than men when seeking employment and higher barriers to starting and operating their own businesses. Youth bear the weight of the collapse of education during the country’s civil war and suffer an even higher rate of unemployment than the 75 percent average for Somalis overall.

The limits on women and youth create additional constraints to Somalia’s capacity for peaceful recovery and growth. Women’s multiple clan affiliations give them the potential to reduce conflict by bridging clan and sub-clan lines, but their lack of economic power reduces the authority with which they can perform this function. It is alleged that unemployed and excluded youth are the primary source of recruits for Al-Shabaab, particularly in South Central Somalia. In the north, youth reportedly are risking their lives and emigrating in search of better economic opportunities.

Assets to build on:

Despite the array of constraints, Somalia has important assets on which it can build.

Entrepreneurial culture: Somalis are extraordinarily entrepreneurial and willing to take risks. Despite the unstable environment, diaspora investors in particular are aggressively exploring investment opportunities. Word of success also spreads rapidly which means that demonstration efforts have a good chance of success.

Financial sector reform: A new Banking Law approved in Mogadishu means that several commercial banks are expected to be operating in Somalia by the end of this year. The immediate beneficiaries will be exporters and importers who can finally work with letters of credit. Yet because creditor protections are weak, banks will only be inclined to lend to the largest borrowers for a number of years. Other measures will be needed to encourage banks to start lending “down market” and open finance up to a broader client base.

Development of commercial law: Somalia has operated with an evolving mix of customary, sharia and formal law since colonial times. During the civil war, in the absence of government, customary law came to the fore. This tends to favor the established elite, making it harder for startups, small- and medium-sized business, and women-owned businesses to protect their interests. The FGS has requested that key commercial laws be rewritten, and the World Bank is helping to do so. USAID and other partners supported a review of commercial laws in Somaliland. The government’s ability to implement commercial laws is weak, but they will begin to establish – at least on paper – a rule of law in economic affairs with greater protections for businesses across the board, regardless of size or ownership.

Renewable energy: Although energy is considered a critical barrier to growth, the electricity generating industry in Somalia’s cities and towns is controlled by monopolies and cartels that may resist reforms. But the renewable energy industry outside of Somalia’s cities, consisting largely of standalone single-purpose systems, is taking off and offers immediate benefits to agriculture and fisheries among other industries.

Opportunities in the fishing industry: A drastic reduction in piracy and resolution of conflicts between the FGS and regional governments over control of fishing rights have opened the door to development of a Somali-run deep water tuna fishing industry. This industry has tremendous growth and job-creating potential in areas with a certain degree of infrastructure and sufficient workforce; a few private Somali investors have recognized this and are beginning to move in. Sustained growth will depend on exports, which means food safety must be addressed. Off-shore fishing by Somalis can most profitably and effectively be expanded through a new “intermediate” approach to catching fish: in terms of infrastructure and investment, this falls between the artisanal methods they use in shallow waters today and the industrial methods used by foreign factory fishing operations off-shore.

Opportunities in agribusiness: Farmers in Somalia are willing to adopt new technologies and techniques that have been shown to improve yields and/or income. Agriculture in particular is a large potential employer in the agricultural areas of South Central Somalia, including in areas where Al-Shabaab has capitalized on the dissatisfaction of minorities to attract recruits. Local and diaspora investors are keenly interested. The abandonment of farmland by refugees and internally displaced persons (IDPs) during the war creates opportunities for consolidated farming and rapid increases in employment. (Some of this land is already being rented by IDPs to others.) Agriculture, like fisheries, will ultimately depend on exports. As such, growth will rest heavily on Somalia’s ability to develop systems to track and assure food safety.

C.3 IMPLEMENTATION CONSIDERATIONS

The Contractor must carefully consider the role that Somali government institutions play and work to strengthen their capabilities accordingly. Because their capacity will be developed only gradually, the private sector will need to play a strong role in many aspects of project implementation. For example, investors must play a substantial part in agricultural extension under the project as well as in the development of systems to assure food safety and the integrity of agricultural inputs.

A Somalia-wide effort will also be politically complex. Somali society is fragmented by clan. The Contractor must deal with the added complication of working with different governments across Somalia with an evolving separation of powers as well as a large number of donors and NGOs. The Contractor must employ mechanisms that bring people together, bridge differences and encourage all to focus on shared problems and interests.

The challenge of increasing youth employment may be complicated by apparent attitudes about work that some suggest lead many young Somali men to reject physical labor, hold out for the “perfect” job, and refuse to start at the bottom of the career ladder in order to work up. Observers agree that access to technology through work can overcome this reluctance in many cases, suggesting that an extra emphasis on technology in project activities could be useful. Also, recruitment does not tend to be based on merit, but rather personal connections, which is a disincentive to youth. More transparent, merit-based recruitment in private sector organizations and industries will empower youth to build their skills and proactively seek work opportunities.

C.4 TECHNICAL APPROACH AND EXPECTED RESULTS

The goal of the contract is to promote inclusive economic growth. The purpose is to catalyze both “systemic” economic changes - that affect all sectors of the economy - and “sectoral” ones that affect key industries.

Systemic activities must open up opportunities for new, small and medium-sized businesses and investment from new sources by expanding access to the financial system, supporting policy and regulation, and increasing the availability of key business services. The sectoral interventions must increase private investment in industries with high growth and employment potential, namely, agriculture1, fisheries and renewable energy, including in regions previously inaccessible due to security. Other activities seek to increase the participation of women and youth in the economy and cuts across the other three results.

Illustrative results framework:

1 USAID defines agriculture as, “the science and practice of activities related to production, processing, marketing, distribution utilization, and trade of food, feed, and fiber”.

http://www.usaid.gov/sites/default/files/documents/1867/usaid_legacy_ag_development_report_nov2013.pdf

The specific activities to be undertaken for each result as well as indicators of success are subject to approval of USAID.

While the results are distinct, there are important potential synergies between them which the Contractor must seek to leverage. There will likely be, for example, a ready market in the fishing and agricultural work supported by the contract for the services of leasing companies developed in the systemic components. The development of leasing could thus be accelerated by focusing it at first on serving these two emerging industries which will grow faster, in turn, with the support of leasing finance. Similar synergies are likely with other forms of finance supported under the contract and with market research. The Contractor must identify and take full advantage of such opportunities.

Systemic activities:

Systemic interventions in general seek to remove or reduce economy-wide barriers to economic growth that affect all sectors and industries, and businesses of all sizes. Activities under these components are expected to disproportionately benefit startup firms, SMEs and women- and youth-owned businesses that, unlike large, more established companies, lack the relationships and resources to overcome barriers in other ways. These activities must promote competition in Somalia’s economy to balance the predominance of large businesses.

It is understood that Somalia has many more barriers to economic growth than can be addressed within the scope of a single project; coordination with other partners will be critical. The Contractor must address specific barriers that are particularly constraining and/or are important for the industries the project must support through sectoral interventions. The systemic activities must be relevant to all three zones of the country and must, to the extent possible, be implemented Somalia-wide.

Intermediate Result #1 – Business enabling environment strengthened through access to finance and support to policy and regulation

Other organizations, principally the World Bank, are working closely with the FGS and regional authorities to establish a legal and regulatory framework for Somalia’s newly emerging financial sector and to build the government’s capacity to provide sector oversight. However, that will not be sufficient to ensure that Somalia’s new private financial institutions extend services beyond a small number of large, well-established clients. That will require additional institutions and practices to “democratize” access to financial services.

Below are illustrative examples of activities the Contractor could implement to address this result:

develop a leasing industry – with an initial emphasis on serving the agriculture, fisheries, and renewable energy sectors - to get equipment into the hands of investors and businesses that cannot finance their needs through banks;

encourage buyers and suppliers to develop credit arrangements for creditworthy clients;

assist selected micro-finance institutions to move “up market” (this usually involves working more like a bank, accepting deposits and expanding the client base to larger businesses); and support policy dialogue and regulatory development and/or strengthening.

Intermediate Results 2 – Enterprise development promoted through business development services

Expanding the supply of key business services in Somalia and their use particularly by SMEs, startups, women- and youth-owned firms, and new investors is critical for growth. Market information increases the opportunity for more to succeed – it benefits all, but means the most to startups and smaller firms (including women-owned businesses) that can least afford to make mistakes. Business chambers and industry associations have a potentially vital role to play providing services to their members and facilitating dialog between business and government. Broad-based and representative associations give voice to smaller companies, providing access to policy makers and enabling SME actors to engage in policy discussions alongside the established business elite.

Below are illustrative examples of activities the Contractor could implement to address this result:

work with local institutions to collect foundational information on supply and demand within target sectors and make information availably publically help market research providers connect with potential clients and encourage investors and businesses, in turn, to buy market research services (this could include assistance for targeted marketing, outreach campaigns, building specialties, subsidization of initial services, and support to selected users to apply market information effectively, among others);

assist market research firms to develop and promote headline products that inform Somali businesses about the value of market information (e.g. a consumer trends quarterly, an annual survey of regional fruit trade, periodic seminars on emerging youth preferences) ;

strengthen providers of market research with technical assistance and/or training to build a reputation for quality and value; and involve research firms in sector-specific competitiveness events so that they can build in-house expertise and support those industries.

Sectoral activities:

The Contractor must complement the systemic activities with sectoral ones to accelerate the development of industries with particular potential to grow and create jobs, including in regions previously inaccessible due to insecurity. The industries the project must strengthen are those that best meet these criteria: agriculture, fisheries, and renewable energy. The production potential of agribusiness and fisheries industries in Somalia far exceeds domestic demand which means success will require exports to foreign markets. However, import substitution and strengthening local markets will also be beneficial for the local economy. In these industries, the Contractor must encourage many players in the private sector to collaborate with each other and with federal and other government counterparts in new ways. The challenge of coordination between government and the private sector will be compounded by political/administrative and deeply rooted clan-based divisions.

The Contractor must have an approach for working with these industries that brings together the different players - governments, the private sector, financial institutions and donors - and facilitates coordinated efforts between them to address industry-specific challenges and opportunities. A “competitiveness” approach has the greatest chance of working in this environment. This approach benchmarks the strengths and weaknesses of an industry in one country and compares them to those in other countries competing in the same market to illuminate the common interests that Somalis have in working together to succeed internationally and to identify the specific actions that the private sector and government need to take for the country to become or remain competitive.

The outcome of a successful competitiveness exercise is typically an agenda for action with a variety of initiatives and investments to be taken by government, industry groups, individual firms and related industries such as financial intermediaries to sustain and grow the industry over time. The Contractor must support initiatives by government and investments by the private sector that help to implement the agenda and help to build the industry. Broad benefits could include a demonstration effect, pioneering of a technology or venturing into a new geographic zone, employing an unusually large number of people or engaging multiple small farmers, among other possibilities.

Intermediate Result #3 – Improved production, employment and incomes in select value chains (agriculture, fisheries, and renewable energy)

The agribusiness component of the contract must focus primarily on agriculture in South Central Somalia, and must seek to increase investment, employment and incomes in the industry. The fisheries component seeks to help Somalis access fish stocks beyond the continental shelf using technologies new to Somalia and levels of investment much greater than those used in artisanal fishing but less than that employed by the industrial fishing fleets of other countries fishing Somalia’s waters.

For all value chains being supported, the Contractor must use a competitiveness approach to bring together the diverse parties that will need to work together for the industry to grow and enter export markets. Key participants could include: investors in the sectors; selected industry associations; food processors; investors in boatbuilding, ice-making, refrigeration and transport; selected fisheries cooperatives and/or associations;

energy providers; marine engine parts suppliers and repair professionals; energy providers; input suppliers;

exporters; freight and transport companies; airlines and shipping lines; financial institutions; government officials from related departments; university faculty; donors; and the media.

Known opportunities to address constraints in the industry include:

a system to improve the quality of fertilizer, pesticides, and herbicides supplied to the industry, complementing work in this area by the Food and Agriculture Organization (FAO) ;

a sustainable seed certification program and a growing seed production industry, also complementing work by the FAO (this may include planting materials other than seed);

a sanitary and phytosanitary quality control and certification system – sustainable within the resources available in Somalia – to give confidence to overseas buyers that Somalia’s exports are safe;

development and implementation of good hygienic practices (GHP) and Hazard Analysis Critical Control Point (HACCP) systems to give overseas buyers confidence that fish from Somalia is safe to eat (systems run entirely by the private sector have worked elsewhere in some cases and must be considered for application in Somalia);

development of a capacity by government and/or universities – sustainable within the limited resources available in Somalia and compatible with requirements of the Indian Ocean Tuna Commission – to monitor and sustainably manage fish stocks;

strengthen capacity of public and private sector energy management capacities, including development of smart policies and reforms that promote renewable energy and energy efficiency;

and align policies and regulations with regional bodies, such as the East African Community.

Below are illustrative examples of activities the Contractor could implement to address this result:

introduce new crop technologies or new arrangements with outgrowers, produce or distribute new input technologies such as drip irrigation, or pioneer an export crop;

initiatives to, among others, build and operate larger fishing vessels, manufacture and/or distribute new fishing gear, repair marine engines, process fish, make ice, refrigeration facilities and refrigerated trucking fleets, or train technicians for the industry;

increase supply, repair parts, or train technicians working on renewable energy, especially with a focus on applying renewable energy to agriculture and fisheries industries in new and innovative ways, building on successes and lessons learned from ongoing or previous interventions;

facilitating buyer and supplier credit and leasing of equipment;

identify potential providers of market research and other business development services to key industry players, facilitate provision of those services, and assist these players, in turn, to apply market information to business and investment decisions;

encourage and support the development of an industry association/network of associations to facilitate sector growth, including putting in measures to assure the integrity of inputs and the quality and safety of food and products produced for domestic and export markets; and carry out selected, small infrastructure projects, improvements, and repairs to facilitate the growth of agriculture, fisheries, and renewable energy industries. These may include water control structures such as culverts, catchment basins and irrigation canals, bridges, minor access roads, fish landing piers, fish holding and transfer equipment, ice-making and cold storage facilities, and water pumping windmills.

The Contractor must explore parallel implementation of activities with USAID’s Transition Initiatives for Stabilization (TIS) and TIS+ to encourage community involvement, support for project work and a positive vision of the future for Somalis in the assisted geographic area.

The Contractor must assess the benefits of engaging a small number of local universities/NGOs/research associations in a modest program of adaptive trials of better practices, new technologies, and other innovations to support investments that receive contract support. Emphasis must be placed on trials that will produce results that can benefit local stakeholders on the ground quickly – i.e., over 12 to 18 months.

Cross-cutting Result #4 – Greater participation by women and youth2 in the economy as entrepreneurs, employers and employees.

The systemic activities of the contract have the potential to disproportionately benefit women and youth in business by improving their access to finance and their access to and use of market information, which will in turn increase the competitiveness of their enterprises. The Contractor must take steps to lock in and enhance these benefits. The Contractor must, for example, require leasing companies and/or other financial institutions to develop products tailored to women’s needs and employ women in outreach positions. Youth require access to capital, along with education on how to establish, run and grow successful businesses.

Access to business development services, for example market information, has the potential to increase the success rate of women and youth entrepreneurs, provided they use the service strategically and have access to market research that addresses their needs. The Contractor must work with business service providers to address the information needs of women in business and employ women in outreach roles and to help them use such information effectively.

The Contractor must support the development of Somali women’s business associations, chambers of commerce, or business “networks” to provide both moral support and an information exchange to increase their confidence and hard business skills for competing in Somalia’s markets. Youth may benefit more from an expansion of existing business networks with youth-specific chapters.

Women and youth must benefit from the contract’s sectoral activities through increased employment and business opportunities in the growing agriculture and fisheries industries. Their successful participation in these industries will increase, in turn, the project’s impact on economic growth and employment in Somalia more broadly.

Agriculture traditionally employs a large number of women in farm production, post-harvest processing, and as vendors at the retail end of the supply chain. Fishing industries tend to employ a large number of women at the processing end of the production chain. Development of the industry will create a significant number of new employment opportunities for women. However, improved technologies increasingly require less labor; creative approaches are needed to address the need for increased labor and more efficient, better quality, improved production. Below are required steps the Contractor must implement to increase women’s participation:

involve 35% of women in the competitiveness benchmarking exercise to help identify opportunities for including them in the industry and to make sure that any negative impacts on women are taken into account;

incentivize financial institutions, business service providers, universities conducting field trials and investors in the program to employ women in outreach roles to engage women effectively in project activities; and

2 In many cultures youth are identified based on their level of responsibility to family and community. Most organizations, however, use some type of chronology to describe the population. The USAID Youth in Development Policy defines youth as those persons 10-29 years of age (USAID, 2012).

setting aside time for women-only sessions during field-level outreach work with farmers; and require processing enterprises that receive project support to address the needs of women in the workplace with amenities such as transportation, separate prayer rooms and bathrooms and, possibly, day care support for children. (Women’s needs must be discussed in detail with women prior to carrying out activities.)

In addition, opportunities to tap information and communications technologies that can connect women in Somalia to business and employment opportunities in socially acceptable forms must be seriously explored.

To attract youth to participate in contract activities and take up the jobs created by contract investments, the Contractor must look for ways to incorporate into contract activities technologies and education that are likely to attract youth interest and attention. Below are illustrative examples of activities the Contractor could implement to increase youth participation:

SMS-based education and skills development;

the…