Attachment_3_Questions_and_Comments_to_RFI.pdf

Request for Proposal (RFP) SOL-674-15-000033 Southern Africa Trade and Investment Hub

ATTACHMENT 3 – Questions and Comments to Request for Information RFI-674-15- 00001

RFI-674-15-000001 – Comments and Questions on the Draft Performance Work

Statement for the Southern Africa Trade and Investment Hub

Edits to PWS

1) Critical to the success of SATIH is to recognize that “regional integration is a national issue” — requiring significant legislative, policy, legal, and regulatory action on the part of the member states. However, there has historically been some measure of tension and overlap in scopes of work between regional and bilateral agriculture/economic growth projects. For example, several bilateral missions in the region (most notably Mozambique and Zambia) will have agriculture/economic growth projects implemented concurrently with SATIH. In the solicitation document, we recommend that USAID differentiate between bilateral firm- and sector-level agribusiness trade and this project’s work, and define where a regional project like SATIH starts and ends in a given country.

Response: While this is a valid concern, we are of the opinion that the Bilateral and the Regional projects need not have “tension” and most certainly there ought not be duplication of efforts. We are of the view that Bilateral and Regional efforts should really be complementary.

Therefore, it is the onus of the contractor to understand the bilateral missions’ areas of focus that fall within the scope of this project and propose interventions that complement/ and strengthen the overall USAID effort in that country.

2) The scope of work on pages 3-4 has nine “contractor musts,” whereas the list in Attachment 1 has six “contractor musts.” On both these lists, points 1-6 are very similar, but not the same. The former has list items 7-9, whereas they are omitted in Attachment 1. Can USAID kindly harmonize these “contractor musts” with the proposed indicators in the solicitation document?

Response: Addressed with reference to Section C.2

3) Attachment 1 provides a numbered list (items 1–6) that seems to coincide closely with the same list found on pages 3–4 under Section C.4 Scope. However, these lists are not identical, thereby creating discrepancies. For example, Attachment 1 Item 4 states that the contractor must provide technical training and assistance along “specific value chains within the region: textiles and clothing, seeds, legumes, and staple food crops” while Section C.4 Item 4 states that the contractor must provide technical training and assistance along “specific value chains within the region including but not limited to textiles and clothing, light manufacturing, seeds, legumes, and staple food crops.” Please clarify in the final RFP which value chains the contractor will focus on.

Response: Addressed with reference to Section C.2

4) The Results Framework on page 5 does not include “1.2.3 Investment, technologies, Expertise and Knowledge between Southern and sub-Saharan Africa and global markets, particularly in the U.S., increased” that is described on page 7. Can USAID clarify if the scope of this project includes 1.2.3 in the solicitation document?

Response: Incorporated

5) Page 6, Section C.4.1.2.1.1 states that the contractor will “develop commodity exchanges and warehouse receipt systems in FtF focus countries “with footnote (6) referencing “See Section C.5. Place of Performance.” However, Section C.5 is “Coordination with host country, other donors, and other implementers.” Please clarify whether commodity exchanges and warehouse receipt systems are to be focused on FtF focus countries within Southern Africa—Malawi, Mozambique, Zambia—or may include all SADC countries as listed as the place of performance on page 1 of the RFI.

Response: Corrected and Incorporated

6) Result 1.2.3 (page 7) includes an objective to improve “linkages between U.S. and East African markets.” This appears to be a mistake.

Response: Result has been incorporated into result 1.2.1.2 Global export competitiveness strengthened .

7) On Page 4, item 6, (about investment) I would like to see an addition along the lines of "including angel investment or venture capital for promoting SME start ups and incubation.

Response: Incorporated

Key Personnel

8) Page 8, Section C.6: The Chief of Party requirements include being a “full-time, SADC-resident, expatriate COP.” We take this to mean that USAID wants a Chief of Party who will be based at the Trade and Investment Hub in the SADC region for the life of the program, but who is perhaps not a citizen of a SADC country; is that accurate? Please also clarify whether the use of the word “expatriate” means that the Chief of Party cannot be a citizen of an SADC member state?

Response: What was meant here is a full-time Chief of Party (COP) who will be based at the Trade and Investment Hub in the SADC region for the life of the program. There is no requirement that the COP be a citizen of the region.

9) A full time, SADC-resident, expatriate COP is required. This seems to rule out highly qualified candidates who are citizens of a SADC country. Would USAID consider giving offerors the option to propose a citizen of a SADC country who has the right mix of attributes needed to successfully lead the project?

Response: Taking the above into consideration we would like to see the senior management structure (COP and DCOP) reflecting a combination of a single expatriate and a SADC citizen.

10) Page 8-9, Section C.6 lists a series of technical/experience requirements for the “key personnel staffing mix” that are not tied to any one key personnel position. Given that two of the four key personnel positions are more operationally focused, we recommend that, in the final RFP, the evaluation criteria for staffing include points for both key personnel and designated senior management (for example, Component Leaders) to meet the five requirements listed in this section.

Response: This is acceptable. We did not mean that this should apply to Key Personnel only, but rather to their management staff (which includes Component Leaders).

11) Section C.6 Key Personnel - The Request for Information states that the Deputy Chief of Party must be a national of a SADC member state. Would USAID consider an individual who qualifies for citizenship in a country, but is not necessarily a citizen to be a national? For example, would an individual who is married to a citizen of a SADC member state, has a valid work permit, and has lived in that SADC member country for 30 years be considered by USAID to be a SADC member state national?

Response: See response to Question 9

12) We are concerned that the residency and nationality requirements for key personnel, particularly the Chief of Party, are highly prescriptive and rigorous, thus limiting the pool of potential candidates. Should this remain we suggest that the requirement to obtain SADC residency be deferred to the time of award of contract.

Response: Addressed. See response to Question 8

13) The first evaluation criterion for COP—a successful record leading contracts of similar size and complexity—limits the possible pool of COPs. Such a criterion does not readily permit recognition of strong business or private sector experience since, based on the current RFI requirements, this background may not qualify as past COP experience and will not be treated as comparable to having managed a $75-80 million USAID project. Would USAID consider clarifying this criterion to give range to a broader set of COP candidates, including private sector leaders, who have deep experience well- suited to fostering regional trade and investment in Southern Africa?

Response: Given the visibility and the complexity of this project, we would feel comfortable with working with an individual who has proven work experience; in particular how to work with and engage the USG. This, unfortunately, is an area which we cannot compromise.

14) The RFI states that candidates for Director of Strategic Communications must have “proven experience contributing to the design and/or implementation of a (local or national) government strategic communication strategy.” It is significant that this is a key personnel slot and that it focuses on government communications at the local or national level. We concur that such activities are very important, but they are only one dimension of communications needed for a large regional trade and investment project. It is not clear why this element receives special emphasis in the position description while other communication functions/tasks are not delineated. Could USAID provide more detail in the RFP about the multiple roles of the Director of Strategic Communications? Can USAID explain why the emphasis is on local and national government communications without including other dimensions of the role?

Response: Given the visibility and the complexity of this project, we would feel comfortable with working with an individual who has proven work experience; in particular how to work with and engage the USG, the local government as well as manage relationships with key regional stakeholders. From our experience, the success of the project relies heavily on management of these key relationships. This, unfortunately, is an area which we cannot compromise.

15) The Chief of Party is required to have a “successful record leading contracts of similar size and complexity,” will USAID/SA also consider experience managing similarly sized cooperative agreements?

Response: By their very definitions, cooperative agreements and contracts are different, and as expected the process of managing a contract differs from that of a cooperative agreement. We would want to deal with a COP that has managed this type of engagement and given the importance and visibility of this project. Again this, unfortunately, is an area which we cannot compromise.

16) Would USAID/SA consider expanding the COP’s requisite technical experience to include experience in international trade policy or skills in at least one contract technical area?

Response: We feel that the COP must have a minimum of a graduate degree in the areas that we have described. Unfortunately, this is an area which we cannot compromise.

17) Will USAID/SA consider replacing the graduate degree requirement for the COP, DCOP, and Director of Strategic Communications with a B.A. plus additional years of work experience, as is allowed in the FM&O Director requirement?

Response: Addressed. See response to Question 16

18) Would USAID/SA consider relaxing the number of years of experience required for the FM&O Director to enable a broader pool of candidates, and to be somewhat less rigorous than the

COP?

Response: Addressed. See response to Question 16.

General Questions

19) In preparing this response for the RFI, we have come to recognize that it might be essential to relocate the Southern Africa Trade and Investment Hub to South Africa to help the project attract top talent. Such a move would also simplify regional travel and logistics. Does USAID/Southern Africa anticipate moving the post for this contract from Gaborone, Botswana to Pretoria, South Africa?

Response: USAID/ SA is taking a slightly different approach to the regional program, we are seeking to have a series of satellite offices in countries that have key activities, and as such we will have the headquarters in South Africa. This will improve the management of the Hub and allow for better M&E from the Mission, greater interaction with donor partners, USG counterparts, and other stakeholders.

20) The RFI does not appear to reference the mid-term evaluation of the Southern Africa Trade Hub project, dated August 2014, and the findings and recommendations of that evaluation do not appear to be completely reflected in the RFI. Potential offerors are likely to prepare submissions that would build from that key document. Could USAID/Southern Africa add narrative to the final SOW that presents the recommendations from this evaluation in the context of the expected approach and outcomes for the new program?

Response: The expectation is that the offerors will go through the publicly available material that relates to the current Trade Hub, including the referenced report, and use the information gleaned from that report, and other relevant documents in the development of their proposals.

21) Could USAID/Southern Africa include a revised Results Framework and narrative text that harmonizes and updates the results and indicators for the new program?

Response: The Results framework that is in the current PWS is a mission-wide results framework, and will not be revised. We believe that the current result framework captures the Mission’s objectives succinctly and we welcome interventions that will contribute towards the achievement of these objectives. It is expected that the contractor will propose interventions and provide indicators that go beyond the listed indictors in Attachment 1.

22) Offerors understand the communication challenges of the current SATH project, as discussed in the mid-term evaluation. This RFI also requires that SATIH activities be “in compliance and that the specified bodies agree with contractor interventions.” Obtaining approval of a wide range of African regional organizations, many of which are outside the SADC zone, will be paramount, but it will also increase risks to project implementation. To enable the project to make progress in a timely way, offerors will have to outline a clear coordination plan with various African regional organizations rather than state that these organizations’ explicit approval is required to move forward with activities. Could USAID add detail in the revised scope about what constitutes expected coordination and which specific bodies need to be consulted?

Response: The expectation is that the contractor works with the key regional economic groupings, (the likes of SACU and SADC) to ensure that they have the political buy-in that is necessary to achieve success of the project. This may involve understanding the pressing needs to achieving regional integration that are priorities for the region (as expressed by the regional bodies) and confirming that the interventions reflect the needs of the secretariats in areas that fall within the scope of the project.

23) The mid-term evaluation of the current SATH project notes that there are “trade issues that have so far eluded resolution.” Could USAID describe these unresolved issues in the forthcoming scope?

Response: The expectation is that the offerors will have an understanding of the region, its challenges, and opportunities. The mid-term evaluation reflected the opinion of the evaluator, not USAID, at the time of the report. These issues may have since been resolved, or there may be more pertinent issues with regard to this specific scope at this time.

24) Under Section C.3.2 on page 4 of the RFI: “Reduce trade costs by harmonizing policies, enhancing regulatory efficiency, and improving delivery in both the public and private service sectors (e.g., finance, customs, investment, Information and Communication Technology (ICT).” Has a system for the modernization and harmonization of SADC cross-border payments been worked out through the Regional Economic Integration Support Programme (REIS) in order to better facilitate trade? If not, will this project work with REIS to finalize the cross-border payment system?

Response: The expectation is that the successful proposal will indicate how the proposed interventions are not duplicative of the initiatives by other donor programs in the region, and where possible, interventions in areas of overlap must display complementarity. In addition to this, the expectation is that the contractor will display an understanding of other donor activities and seek out a synergy through various donor coordinating initiatives to bring about maximum development impact to the region.

25) Attachment 1 of the RFI includes the requirement that offerors “propose aggressive but achievable targets.” However, the scope as it is currently written does not appear to provide sufficient guidance for understanding the current baseline conditions or identifying the outputs and outcomes to which the project might legitimately aspire within the intended resource allocations. Given that each offeror would have ample opportunity to estimate its own different and unique baseline conditions and eventual project targets, could the USAID/Southern Africa mission provide more precise instructions on the baseline data that should be used?

Response: The expectation is that the offerors will have an understanding of the region, its challenges, and opportunities. It is this understanding that should inform what aggressive but achievable targets should be for the offeror’s proposed interventions. The PWS outlines the outcomes, not the outputs, because to do so we would have to be more prescriptive than is appropriate for a PWS. The baselines of each offeror could in fact be different because they might be proposing different interventions.

Suggestions

26) South African foreign direct investment (FDI) and agricultural FDI in general are delicate issues in the region. While the South African agribusiness sector has much to offer in terms of tech transfer, capacity building, and market linkages, the South African public and private sectors are reluctant to be seen as the “big brother” of the region, and other regional countries may also fear a paternal relationship. We encourage USAID to ask implementing partners to perform the appropriate political economy analysis (PEA) as part of trade and investment market research and due diligence to lower risk and improve the chances of commercial partnership sustainability and profitability.

Response: On this we would beg to differ, South Africa is currently the most active intra- African investor in the region as reported by EY’s Attractiveness survey for Africa for 2014.

Our understanding is that business is in business to do business, and they will go where there is opportunity. The contractor’s role is to understand which agribusinesses have willingness to expand into the region but face some impediment, understand what is required to unlock the investment, and develop strategies to release that potential.

27) To ensure the quality and relevancy of data collected by the Trade Hub, we are hopeful that USAID/SA will consider limiting the list of required indicators.

Response: Since this program is part of two Presidential Initiatives (Trade Africa and Feed the Future), the required indicators cannot be limited. Further, it is expected that the contractor will propose interventions and provide relevant indicators that go beyond the listed indictors in Attachment 1.

28) There is not yet any mention of the links between climate change adaptation and food security, even though the region is quite vulnerable. We know that there are several climate change projects in the region and that all USAID programs will have to have adaptation planning incorporated this year. USAID might want to elaborate on any needed support in this area so that implementing partners can incorporate these issues into their proposals.

Response: The expectation is that the contractor will have undertaken wide reading as part of the development of their proposals.

29) Page 10, Section C.7 states that “some baseline information may exist from current/previous activities or secondary data sources.” Please include such baseline information currently available as attachments to the final RFP, especially project documents from the current SATH program, so that all bidders have equitable access to information.

Response: The referenced section (now C.6) does not stipulate that baselines should be included as part of the proposal. Rather, the baselines will depend on the proposed interventions. The winning proposal will be provided with all relevant information.

30) Attachment 1, Items 5 and 6 refer to the program as “South African Trade Hub” and “Southern African Trade Hub,” respectively, rather than as the “Southern Africa Trade and Investment Hub” per the cover letter. To avoid confusion and contradiction, we recommend that USAID use a consistent project name throughout the final document.

Response: Indeed. We have used the Southern Africa Trade Hub to refer to the previous project, and in all instances where we speak of the new mechanism we have referred to the Southern Africa Trade and Investment Hub.

31) On Strengthening the Programmatic Link between Investment and Trade Promotion. Based on our international experience in trade and investment programs, we have found there is a very close and powerful structural link between investment and trade promotion activities. As such, we suggest that greater emphasis be placed on investment under Sub-IR1.2.1.2. Global Export Competitiveness Strengthened. Our experience has been that direct investment is a critical catalyst and pre-condition for the growth of competitive export industries. Southern African producers and processors will be better able to supply U.S. and regional markets if linked with strategic investors that have the requisite capital base, technology, know-how, and market access.

By leveraging key South African, U.S., and other international firms looking to diversify their global or regional supply chains, USAID will be able to help expand the productive capacity of agricultural, textile and apparel firms and scale market access for these exporters. We believe the Southern Africa program could benefit from emphasizing investment attraction of key anchor firms within the target value chains as a means of obtaining greater program impact. This may be what the mission intends to elaborate on under section 1.2.3. Investment, Technologies, Expertise, and Knowledge between Southern and sub-Saharan Africa and global markets, particularly the U.S., increased.

Response: Agreed and incorporated.

32) On Access to Finance. USAID appropriately highlights in Sub-IR 1.2.1. Increased Value Chain Competitiveness the valuable role commodities exchanges and warehouse receipt systems can play in enabling firms to participate in intraregional trade. However, we believe that USAID would benefit from integrating an expanded access-to-finance focus into this project component, given the extent to which regional value chain competitiveness is constrained by limited access to financial resources among supply chain partners. Commodities exchanges and warehouse receipt programs are but two of many mechanisms that can be developed by the project to support key value chain firms. Broadening efforts to unlock financing at additional points on the value chain would also enable the project to obtain more significant results under Performance Indicator 4.5.2(29) Value of agricultural and rural loans.

Response: Given that this is a PWS, we have only detailed the outcomes, and how one achieves these outcomes is at the discretion of the offeror. We will select the contractor that displays in their proposal a strong understanding of the region and suggests interventions that are likely to achieve the desired result.

33) On Encouraging Closer Coordination with (and Programmatic Symmetry to) Other Trade Hubs.

We believe there is an opportunity within the program design to emphasize common program themes across all three trade hubs. This would stimulate closer technical and programmatic coordination, and would promote more consistent USG reporting across all three hubs. Along these lines, the Southern Africa Trade Hub may wish to consider having four project components similar to the recently awarded East African Trade and Investment Hub (EATIH). This would imply slight revisions to the structure of the draft results framework provided in the RFI, but it would not delete any of the proposed sub-results. For ease of reference, the four components of EATIH were:

Component 1: Policy environment for regional integration, trade, and investment improved;

Component 2: Competitiveness of agricultural value chains increased;

Component 3: Exports and trade promotion (particularly with the U.S. under AGOA) Increased;

and Component 4: Investment and technology transfer, especially from the United States, increased.

Alternatively, if the mission wishes to retain the results framework and structure presented in the RFI, it might consider moving the third bullet under 1.2.1.2 Global export competitiveness strengthened to section 1.2.2 Regional trade and investment enabling environment improved and dropping the word “Regional” from that section heading, since sub-elements under that heading also pertain to global agreements such as the World Trade Organization’s Trade Facilitation Agreement.

Overall, we believe that it would be beneficial to encourage greater technical coordination between hubs, including greater sharing of knowledge and programmatic lessons learned. These coordination and knowledge-sharing aspects could be built into program design elements.

Response: Taking onboard your considerations, we acknowledge that there are benefits to a coordinated Trade Hub approach, and there are means by which the Trade Hub’s efforts are coordinated, which go beyond the scope of this discussion. Suffice it to say, the challenges that are faced in the regions that the three Trade Hubs operate in are different. It is our understanding of the challenges that are in the Southern African region that has necessitated the approach that we have taken in outlining our result framework.

34) On Accounting for the Unique Economic Role that South Africa Plays. We believe there is a need to explicitly account for the unique role that South Africa plays in the region, providing opportunities for collaboration and growth to the rest of the SADC countries. Serving as the regional leader in terms of buying and selling tradable products in the target value chains, South Africa also enjoys a comparative advantage in the more technology- and capital-intensive segments of target value chains (e.g., for agriculture, value addition capacity for processed food, machinery, and input supplies; and for textiles and apparel, value addition capacity in textile mills and CAD/CAM technology design for apparel products). South African firms can serve as leaders in terms of investment, technology adoption and dissemination, and product trade. In this way, South African firms can be encouraged to complement, but not directly compete with, activities that partner value chain firms are undertaking in neighboring countries.

Response: Given that this is a PWS, we have only detailed the outcomes, and how one achieves these outcomes is at the discretion of the offeror. We will select the contractor that displays in

35) On Export Markets. Section 1.2.1.2 focuses on improving the region’s global export competitiveness, but the bullets under this heading emphasized AGOA trade, i.e. exports of goods specifically to the United States. We noted that the Minimum Indicators provided in Attachment 1 also highlighted exports to the United States under AGOA (as well as exports in the region), but did not cover increased exports to non-regional destinations other than the United States (e.g. China, India, EU, UK, Kenya).

Response: USAID Southern Africa, encourages the expansion of exports in the countries that we work with including other destinations outside of the US.

36) On Service Sector Competitiveness and Services Exports. Services are both a key input to goods exports and an export in themselves. The region’s logistics, transport, and ICT services can be upgraded, as can finance, professional services, and educational and cultural services, including tourism. Improved service sector efficiency could greatly support the region’s efforts to diversify its exports. Further, improvements in the services sector could propel the region to become competitive services exporters to developed as well as developing countries. The 2012 SADC Protocol on Trade in Services provides a building block for this support, as does the February 5, 2015 High-Level Meeting of the WTO Council on Trade and Services at which WTO members pledged to provide unilateral preferences to services exporters from developing countries.

Response: Granted, services are crucial for all the reasons that you have detailed, but USAID/SA has chosen to focus all its available resources on trade in goods as we feel this in an area that we are likely to achieve maximum developmental impact with the limited resources that we have available to us.

37) There is overlap between Result Area 1.2.1.2 “Global export competitiveness strengthened” (pg.6) and Result Area 1.2.2.2 “Advance regional and multilateral trade and investment agreements and support institutions” (pg. 7) that may confuse Offerors and technical reviewers.

For example:

Under Result Area 1.2.1.2, one activity is “strengthen regional and country level capacity, including public and private sector entities, to adopt and implement World Trade Organization (WTO) and other regional and international trade agreements”.

Result Area 1.2.2.2 appears very similar: Advance regional and multilateral trade and investment agreements and support institutions”.

In addition, Result 1.2.1.2 suggests that public-private partnerships (PPPs) should be used in this area, as was done for the implementation of “the single window system”.

Result 1.2.2 also states that “the Contractor will research and implement relevant public-private partnerships to leverage funding and in-kind support to achieve results under this initiative”.

In our opinion, the “single window example” would be more effectively placed under “1.2.2.1 Trade and transport facilitation measures implemented”. But more clearly defining the activities and expectations under each result area (1.2.1.2 and1.2.2.2) would help confirm this.

The activities presented under the two results areas (1.2.1.2 and 1.2.2.2) should be more clearly distinguished from each another.

Response: Agreed and incorporated

38) On pg. 7., under Result Area 1.2.2.2 “Advance regional and multilateral trade and investment agreements and support institutions”, the RFI states that “the contractor must, at a minimum, achieve the following outcomes: (1) Address non-tariff measures that pose barriers to trade and

(2) identify and address barriers to investment”.

It would be helpful to provide examples of NTMs addressed by this result area that would not be addressed in the result areas/activities that precede it in the RFI.

For example, SPS/TBT and quality standard issues would probably already be addressed in activities implemented under Result Areas 1.2.1.1 and 1.2.1.2. Ditto Rules of Origin.

Customs clearance and transit-related issues would already be addressed under Result 1.2.2.1.

If other examples cannot be provided, then it might be preferable to simply integrate these NTM issues into the result areas that came before it—rather than having NTMs stand out as seemingly “their own activity stream” within RA 1.2.2.2.

Response: This speaks to the enabling environment work, specifically standards and quality infrastructure, as well as attributes relating to the investment environment. This is one of the areas where an understanding of the publicly available efforts of the current Trade Hub would be extremely useful in shaping the proposal.

39) Regional trade and investment enabling environment improved. We welcome the opportunity to foster strong, mutually beneficial relationships between the Trade Hub and the SADC Secretariat. We hope that the final RFP will provide a more detailed description of anticipated outcomes to guide our activities and budget.

Response: Given that this is a PWS, we have only detailed the outcomes, and how one achieves these outcomes is at the discretion of the offeror. We will select the contractor that displays in

40) We agree on the importance of partnering with local implementing organizations and building the capacity of local institutions. To help bidders develop appropriate and responsive local partnership and capacity building plans, a minimum plug figure for the Grants Under Contract fund is appreciated.

Response: Given that this is a PWS, we have only detailed the outcomes, and how one achieves these outcomes is at the discretion of the offeror. We will select the contractor that displays in their proposal a strong understanding of the region and suggests interventions that are likely to achieve the desired result.

Clarifications

41) Page 8, Section C.5 states that “grants under contract (GUCs) will be approved by USAID prior to award of this contract.” Please clarify what this means, and how USAID envisions GUCs to be approved prior to award of the Southern Africa Trade and Investment Hub contract.

Response: The contractor will have the authority, through prior internal agency approval, to enter into grants under contract at the time of the award. This does not mean grants will be competed and awarded prior to the release of SATIH.

42) Page 8, Section C.5: While we understand that SATIH will need to coordinate a number of key partners, including SADC, SACU, AU, WTO, WCO, UNECE, and UNECA, we recommend that

USAID clarify which of these organizations is the primary regional institutional counterpart for the program. In the past, it has appeared to be SADC. Is a similar arrangement envisioned for

SATIH?

Response: The primary regional institution is SADC, but we expect that the contractor will work with all the relevant stakeholders for their proposed interventions in order to achieve maximum development impact.

43) On page 4, the objectives in 4 and especially 5 appear to closely resemble the description of the “Regional Seed Harmonization in Southern Africa” project cited in the January 2015 Mission Forecast, even overlapping interventions in the cited key regional value chains. Could USAID kindly clarify the distinction and proposed interaction between these two projects in the solicitation document?

Response: The contractor shall propose interventions that complement the efforts of the aforementioned program. The idea is to create positive synergies between the projects.

44) We understand that USAID is moving to a common Results Framework for all African Trade Hub projects. This does not appear to be reflected in the RFI as presented. In the final scope, could USAID provide the final framework(s) that have been developed for both the East and West African Trade Hub projects?

Response: Taking onboard your considerations, we acknowledge that there are benefits to a coordinated Trade Hub approach, and there are means by which the Trade Hub’s efforts are coordinated which go beyond the scope of this discussion. Suffice it to say, the challenges that are faced in the regions that the three Trade Hubs operate in are different. It is our understanding of the challenges that are in the Southern African region that has necessitated the approach that we have taken in outlining our result framework.

45) Section C.3 (Scope) refers to two separate and different value chain sets in points 4 and 5. Could USAID/Southern Africa clarify the difference between these two separate references to value chains and their congruity with the intended program?

Response: Agreed and addressed

46) Attachment 1 of RFI-674-15-000001 contains several FTF indicators not used in the previous Southern Africa Trade Hub iteration that pertain specifically to agricultural productivity at the farm level. Given that all FTF and FTF-aligned countries in Southern Africa as defined by USAID either have or will soon have one or more USAID agriculture production projects, we request that USAID please provide substantial clarity in the scope of work as to how much national production systems at the farm level will be involved in the Trade Hub’s activities.

Response: The expectation is that offerors will have read the Feed the Future multi- year strategies for the regional mission as well as the various bilateral missions, and all of the relevant material that relates to the FTF interventions. The offerors may suggest the appropriate approach to ensure that the efforts at the regional level complement efforts undertaken at the bilateral level, maximizing developmental impact.

47) The heading for section 1.2.3 seems to welcome investment from sources other than the United

States, but the single bullet covering this section specifies linkages between “U.S. and … African markets.” Will the hub be looking for global sources of technology and investment, but prioritizing U.S. sources, or will it solely be supporting efforts to increase U.S. technology and investment linkages with Southern Africa?

Response: USAID/SA will seek to encourage all forms of investment into the countries that we work in. In addition to that, we would like to focus specifically on encouraging US investment where appropriate and contribute towards the development of stronger trade ties between Southern Africa and the US.

48) Will the hub prioritize expanded exports to other countries than the United States and SADC members? Southern African producers may find robust prospective growth opportunities in supplying other African markets.

Response: USAID/SA will seek to encourage export development to all regions.

49) Will the hub allocate resources to foster more efficient and globally competitive services sectors in the region?

Response: Granted, services are crucial for all the reasons that you have detailed, but USAID/SA has chosen to focus all its available resources on the trade in goods as we feel this in an area that we are likely to achieve maximum developmental impact with the limited resources that we have available to us.

50) On the recently procured East Africa Trade and Investment Hub, the promotion of US investment, technology transfer, and innovation figured significantly within the scope of work.

However, in the draft RFI, the importance of this activity seems equivocal and unclear. For example:

On pg. 1 the RFI mentions that US investment in SADC member states will increase “depending on the availability of funds” and on pg. 4 the RFI states that SATIH will seek to promote U.S.

investment and exports into SADC member states “provided funds are available.”

However, on pg. 4, the RFI presents the activity “Collaborate with the U.S. Commercial Service, OPIC, and other U.S. agencies to align and leverage U.S. investment in target sectors to expand exports and sustain diverse export growth” without qualifiers.

The draft RFI also gives this activity stream its own results area (1.2.3: Investment, Technologies, Expertise and Knowledge between Southern Africa and Sub-Saharan Africa and Global Markets, Particularly the U.S., Increased) yet this is not reflected in the Results Framework (pg. 5).

Please clarify USAID’s expectations for the activities presumably included under Result Area 1.2.3.

Response: As already mentioned, this is a PWS, and not a SOW, and as expected the former identifies the outcomes, while the latter is extremely descriptive. It is not a surprise that the EATIH RFP detailed a number of interventions for the Investment component. We are relying on the market’s knowledge of the region and the challenges face in this particular area, to propose interventions that are likely to be successful in the Southern African Context. The contractor must propose the interventions as well as the performance targets that they will hold themselves to.

51) Introduction. The first paragraph states that the “contractor must pay particular attention to advancing regional trade and investment and supporting a regional integration agenda.” Regional integration covers a wide variety of topics and initiatives. Will USAID/SA provide a more tangible definition as to what the regional integration agenda consists of?

Response: It is expected that the contractor will have sufficient knowledge about the countries that the Southern Africa Trade and Investment Hub will operates in and on this basis understand where each country stands in terms of regional integration as determined by the SADC Trade Protocol, as well as the SADC regional Agenda (as detailed in various publicly available SADC strategy documents).

52) The RFI includes a list of countries in which the Trade Hub will have the mandate to work.

Considering the withdrawal of Swaziland’s AGOA benefits, will USAID/SA please clarify the nature of the Trade Hub’s engagement with Swaziland? This also excludes Mauritius, a SADC country, where it is our understanding that the East Africa Trade and Investment Hub will conduct AGOA activities. Will the Trade Hub engage Mauritius in other, non-AGOA, activities, such as those related to investment and intra-regional trade?

Response: USAID Southern Africa continues to work with the Swaziland, until it is explicitly instructed to stop. Mauritius is outside the scope of this project, although the Southern African Trade and Investment Hub may work with Mauritius through the work that we carry out at the request of the SADC Secretariat (i.e. region-wide initiatives)

53) Global export competitiveness strengthened. To help develop a global competitiveness strategy responsive to the needs of SADC member states, exporters, and USAID/SA objectives, greater clarity is appreciated regarding “strengthening regional and country level capacity…to adopt and implement WTO and other regional and international trade agreements.”

Response: This refers to improving the capacity of the SADC member states to implement WTO agreements. For example SADC member states may require technical assistance in meeting the requirements of the Agreement on Trade Facilitation.

Observations

54) Successes in the trade and transport facilitation area appear throughout the draft scope of work:

Pg. 4: “Notable accomplishments have included...establishment of the Dar es Salaam Corridor Committee; piloting and facilitating the adoption of the Single Administrative Document 500 for customs in Botswana, Namibia, and South Africa; becoming the preferred provider in the region of World Customs Organization Time Release Studies and WTO Trade Facilitation Needs Assessments…”

Pg. 5: “In achieving the results under this contract, the contractor must build upon the work completed and in-progress under the existing Southern Africa Trade Hub contract. These efforts include the development of National Single Window (NSW) systems in Malawi and Namibia and customs modernization work in Botswana.”

Pg. 7: “Successfully used public-private partnerships (PPP) to support the implementation of the single window system”

However, the scope (C.3), personnel qualifications, and minimum indicators in Attachment 1 barely address trade facilitation. This seems odd given trade facilitation’s importance throughout the implementation of the two predecessor projects and what we assume will be its importance to the new project.

Response: Agreed and incorporated

55) Trade in Services. USAID’s ongoing support to SADC to further its integration objectives has been critical in its progress to date. The proposed set of activities in the draft PWS is well-designed to further these objectives by supporting the regional trade and investment enabling environment. The Scope also acknowledges the importance of private sector services in enhancing trade within the region. We believe these objectives can be further strengthened by including specific Hub activities related to Trade in Services.

Goods and services are intertwined in global production networks, and in most Southern African countries the share of services to GDP is far greater than the share of manufacturing and agriculture. SADC’s Protocol on Trade Services, signed in 2012, signaled the commitment of the region to expand their integration beyond trade in goods to trade in services. The liberalization of trade in services within the Southern Africa region has the potential to boost competitiveness and exports in a number of segments, including tourism and information and communication technologies (ICT). A number of service sectors are also critical to promote regional trade in and the export of manufactured goods, including transport and logistics, ICT, finance, energy, and professional services. Competitive service markets also represent a critical entry point for the integration of Southern Africa with global value chains, where services, that can make up to 30 percent of the value of traded goods, can support the diversification and sustainability of exports.

However, progress has lagged in the region, with the private sector fueling protectionist sentiments in governments, which are in turn reticent to open their respective markets to regional competition. Major restrictions remain across the region, especially in transport and professional services.

To reinvigorate the process of integration of trade in services in SADC, we recommend the PWS for the Hub be expanded to explicitly address support to promote integration of trade in services at both the regional and national levels. The Southern Africa Trade Hub has made significant, positive contributions to promoting the liberalization of clean energy service markets in the region. Moving toward the next generation of Hub support, SATIH can play a critical role in building awareness of the benefits of liberalized trade in services, building private sector support for services integration, and supporting member governments to make advance progress on their commitments to date.

Response: Granted, services are crucial for all the reasons that you have detailed, but USAID/SA has chosen to focus all its available resources on trade in goods as we feel this in an we have available to us.

56) Integrating Southern African producers into regional and global supply chains. Today’s global trade landscape is defined by integrated production networks, which combine intermediate goods and services from several countries to produce final goods and services. In effect, this represents the fragmentation of labor on a global scale, where enterprises and economies take advantage of comparative advantage to efficiently complete increasingly specialized tasks.

The effect has been enabled and accelerated worldwide by advances in communications and transportation technologies.

The key for Southern African countries seeking to benefit from expanded trade and investment is further integration into regional and global supply chains. South Africa has led progress on this front in the region, and there is ample evidence that the integration is moving beyond the commodities and extractives that have historically dominated African trade. SATIH has the very real potential to promote co-production and other manufacturing linkages to regional and global value chains, supported by increased foreign investment, South African manufacturing, and other potential “gateways” to international markets.

The challenge is that regional and global supply chains are dependent on efficient movement of goods, information and services across borders, and cross-border trade in Southern Africa cannot keep pace with the demands of global or even regional supply chains. The RFI rightly identifies trade policy, trade facilitation and “bottlenecks at border posts” as constraints, and it includes a wide range of activities that will build on the Southern Africa Trade Hub’s progress to address these challenges. But the high transaction costs and inefficiencies that characterize cross-border trade in Southern Africa are also driven by constraints “behind the border,” where outmoded logistics practices and uncompetitive logistics operators weigh down performance. The scope of SATIH could move beyond the current Hub’s efforts to facilitate market linkages and build capacity and more actively leverage private sector investment—like Fedex’s 2014 acquisition of Supaswift— technology, and public-private linkages to accelerate the modernization of the logistics sector.

Response: Given that this is a PWS we have only detailed the outcomes, and how one achieves these outcomes is at the discretion of the offeror. We will select the contractor that displays in

57) Africa as an export market. In 2014, Africa was second only to Asia among the fastest growing emerging market regions. Many African economies are transitioning from purely resource exporters to consumer markets, as disposable income is increasingly available to an emerging middle class. Our own market analysis anticipates African economies to grow at more than twice the rate of advanced economies over the next six years, and consumers will continue to leapfrog traditional telecoms and into mobile technologies.

While the RFI quite rightly focuses on intra-SADC trade and the opportunities presented by renewed AGOA, the scope should also recognize the export potential of African markets outside the Southern Africa region.

Response: USAID/SA will seek to encourage export development to all regions, including the

US.

58) Technology as an enabler of trade, investment and competitiveness. The RFI correctly emphasizes private investment as in important enabler of trade, competitiveness and economic growth. One of the critical elements of the enabling environment for investment is modern infrastructure, and experiences around the world demonstrate that technology can be a powerful catalyst to competitiveness, investment, and growth. More robust infrastructure has supported South Africa’s technology sector to emerge as the fastest growing on the continent, but our own research confirms that technology investment across the region is persistently hindered by political uncertainty, the lack of skilled workforce, and weak IT and communications infrastructure.

Recognizing these as challenges that can only be solved in partnership with the private sector, SATIH might well emphasize technology as a specific focus of policy, investment and regional integration efforts.