Attachment_J.1_Illustrative_Task_Order_Statement_of_Work.docx

ATTACHMENT J.1: SCOPE OF WORK FOR ILLUSTRATIVE PUBLIC FINANCE TASK ORDER

I. BACKGROUND AND PURPOSE

[NOTE: This illustrative scope of work (SOW) will be used in the evaluation of proposals for the PFM II IDIQ in assessing an offeror’s technical and management capabilities and the reasonableness of its cost proposals. An offeror is to respond to this illustrative SOW as if it were an actual task order solicitation, and develop a management plan, year 1 work plan, and key personnel to address the requirements presented. Details on the evaluation of the illustrative task order (TO) based on this SOW are provided in Section L. Section M.]

The USAID mission in Country A (located in the Caribbean) intends to assist Country A to enhance and improve its public financial management systems, with a particular emphasis on supporting domestic revenue mobilization in tax and customs administration, implementing e-procurement, and improving its public financial management (PFM) training system. Improved public expenditure management, tax administration, and transparency are fundamental building blocks of the government of Country A's Plan to combat poverty and inequality and lay the groundwork for a new cycle of investment and increased economic growth.

Since 2005, the tax system of Country A has been undergoing comprehensive structural reforms that seek to increase government revenues, reduce or eliminate misallocation of resources, improve tax administration, and contribute to long-term economic growth. As a result, the current tax structure relies on fewer but more effective taxes and tax revenues that now average more than 14 percent of GDP.

The Minister of Finance (MOF) is actively promoting sound fiscal policy and wants to broaden the tax base without increasing tax rates or creating new taxes. He has also indicated a willingness to combat tax evasion through improving administrative processes.

The MOF considers it necessary to integrate the Tax and Revenue Authority and the Customs Directorate to mitigate problems with data sharing. The MOF has requested USAID to undertake a diagnostic analysis of the administrative process and operating procedures of the Customs Directorate and whether it should be integrated with the Tax and Revenue Authority and other administrative units of the MOF, and if so, to develop the best approach.

The MOF also wishes to enhance and implement the newly established e-procurement system and create an integrated PFM training system for revenue producing and other MOF units.

The U.S. government has an interest in a stable, prosperous Country A; one that shares U.S. democratic values; is a reliable partner in the fight against transnational crime; and plays an active and responsible role in international affairs. USAID has supported structural adjustment and policy reform in Country A since the 1980s.

II. COLLABORATION WITH THE GOVERNMENT OF COUNTRY A

USAID supports the MOF’s Strategic Institutional Plan, a rolling five-year plan that is updated annually, as well as the operational MOF goals cited above.

The MOF’s four priority objectives are as follows:

1. Promote fiscal sustainability and sound debt management

2. Improve resource allocation, quality, and efficiency

3. Achieve efficient, sustainable, and equitable increases in revenues

4. Modernize MOF processes, facilities, and services.

III. OVERARCHING PRINCIPLES FOR IMPLEMENTATION AND MANAGEMENT

Gender equality, women’s empowerment, and social inclusion. Public and private sector institutions are required to implement Country A’s 2011 “Law of Equality and Eradication of Discrimination against Women” and the “Special Comprehensive Law for Life Free of Violence for Women.” However, these institutions generally lack experience and knowledge of best practices to implement gender mainstreaming in their policies, programs, and services. All interventions must comply with the USAID Gender Equality and Female Empowerment Policy, launched in 2012 to enhance women’s empowerment and reduce gender gaps. This policy affirms the critical role women and girls play in accelerating progress in development and advancing global prosperity and security.

Science, technology, innovation, and partnerships. The activity will build upon and broaden previous USAID support for the modernization of the integrated financial management and tax administration system through improved information technology and the adoption of leading international practices in Country A’s public sector. The activity will strengthen existing financial management systems to achieve greater automation of processes; gain efficiency through reductions in administration costs; increase transparency in the procurement process; and incrementally improve accountability through the availability of management information.

Local Solutions. The activity will be cognizant of existing local systems and will map them to engage, strengthen and partner with local actors aligned with the activity’s objectives. This is in an effort to build required local capacity and ensure sustainability of selected interventions.

Selectivity, focus, and division of labor. The activity is focused on the government of Country A (GOA)’s high priority lines of action, is within USAID’s areas of comparative advantage, and is consistent with the division of labor mapped out through consultations with the MOF and other bilateral and multilateral donors.

Monitoring, evaluation, and learning. A robust monitoring, evaluation, and learning (MEL) plan, including context and performance indicators, data sources, and methods and frequency of data collection is required on submission and will be further refined during program implementation.

Sustainability. Stakeholders such as GOA’s ministries, municipalities and civil society organizations (CSO’s) are key stakeholders to sustain results and maintain a robust training program and high-level commitment to adequate resource planning and implementation of PFM activities. Over time and through its interventions, the activity aims to build the capacity of GOA to train staff through the establishment of a long-term training strategy and strengthen the implementation and sustainability of the GOA’s wide e-procurement system.

Applying integrated approaches. The activity builds on a long-term effort by Country A’s development partners to assist in transforming budget planning, public financial management, tax, and customs administration at the national level. The principal stakeholders of this activity are the following: the MOF; the Tax and Revenue Authority, the Customs Directorate; the Technical Secretariat of Planning; the National Assembly; the Ministry of Business and Trade; other donors; other U.S. Government agencies and domestic non-governmental organizations (NGOs) related to economic development and fiscal policy, private sector representatives, and the media.

IV. STATEMENT OF WORK AND ILLUSTRATIVE ACTIVITIES

The purposes of this scope of work are the following: 1) to provide the Ministry of Finance (MOF) with the necessary level of technical assistance to continue promoting voluntary tax compliance and increase tax collection; 2) to undertake a diagnostic analysis of the means to improve the administration of the customs department in order to increase revenue collection; 3) to assist in implementation of the e-procurement system; and 4) to assist the MOF to create an integrated and IT-based PFM training system.

The period of performance for this task order is from January 1, 2018 through December 31, 2019 with a one-year option to extend the performance through December 2020. During the performance period, the contractor will be working under the day-to-day supervision of the MOF and overall guidance of USAID/Country A’s Office of Economic Growth and Education.

A. Illustrative Activities

Tax Policy

· Support the Tax and Revenue Authority to review the current tax regime and identify opportunities for broadening the tax base;

· Provide technical assistance to enhance the Tax and Revenue Authority’s capacity to review and analyze tax policy and recommend reform proposals;

· Provide assistance to improve the Tax and Revenue Authority’s capacity for revenue projection;

· Support the Tax and Revenue Authority review of nontax revenue, such as fees and charges, and identify opportunities for greater efficiency;

· Support policy briefs, informational guidelines, and user friendly materials to educate and guide government of Country A elected officials, civil service organizations, and taxpayers on tax issues;

· Undertake a feasibility study and analysis of the pros and cons of merging the Tax and Revenue Authority and the Customs Directorate.

Tax Administration

· Provide technical assistance to the Tax and Revenue Authority to identify opportunities for improved compliance by assessing current processes;

· Support the Tax and Revenue Authority to expand and facilitate taxpayer registration for the personal income tax;

· Provide support for an increased roll out of e-filing and e-payment to reduce taxpayers’ compliance costs;

· Support the development of IT interfaces between the Tax and Revenue Authority and other agencies to improve interchange and crosschecks of information;

· Provide technical assistance to enhance efficiency and effectiveness of the tax audit function to reduce tax evasion levels for the income tax and the value added tax (VAT);

· Assist the Tax and Revenue Authority to develop service standards and improve personnel management systems for individual and organizational performance;

· Support the Tax and Revenue Authority and the MOF to develop and implement competency-based tax training in areas such as taxpayer services, audit, collections, IT, and management. In addition, to integrate such training with the MOF’s strategic training plan, regularizing and automating the relationships between training for tax, customs, and fiscal operations as well as for implementation of e-procurement at various levels of government.

Public Financial Management and Information Technology

· Support the implementation of the e-procurement system including linkages to expenditure and revenue management IT systems;

· Support the establishment of an integrated MOF training system including an automated training records and control system.

Customs Administration

· Provide technical assistance to the MOF’s efforts to streamline and improve Customs Administration;

· Using the MOF Case Selection Management System (CSMS), design automated module to match customs import and other tax (VAT, income) declarations;

· Increase the effectiveness of customs inspections and audits through the use of effective control and risk management techniques;

· Assist the MOF to improve coordination between the Customs Directorate and Tax and Revenue Authority to automate cross checks of VAT and excise taxes as well as increasing information sharing and joint audits.

B. Expected Deliverables

1. Contribute to the government of Country A’s efforts to achieve a two percent increase in tax revenue measured as a percentage of GDP over the baseline established at the end of calendar year 2017;

2. Level of taxpayer noncompliance reduced (baseline provided by MOF statistics);

3. All regulations and directives drafted to operationalize the proposed “Tax Law Reform” bill;

4. Sharing of information between Customs Directorate and Tax and Revenue Authority increased;

5. E-procurement system fully functional and in use at the national government level;

6. Automated distance learning and training record-keeping system operational.

V. STAFFING

a) Key Personnel

The following key personnel are expected for the performance of this contract:

1. Chief of Party

2. Revenue Administration Specialist

3. Public Sector Change Management Advisor

All Key Personnel must be mapped to an appropriate Labor Category.

Qualifications of Key Personnel

1. Chief of Party

The Chief of Party (COP) is responsible for the overall technical and administrative leadership of the project. S/he is the primary liaison with USAID/Country A and other organizations. Candidates for this position must have a proven track record of designing, implementing and successfully delivering tax reform projects in countries with socio-cultural, economic and fiscal situations similar to Country A’s. It is critical that the candidate also have experience working on successful tax and fiscal policy as well as a practical knowledge of public financial management principles and practices. The COP will take a leadership role in coordinating with USAID/Country A, other donors, government institutions, local organizations, and the private sector. Candidates must have demonstrated professional achievements and excellent communications and writing ability.

Minimum Qualifications:

· A Master’s Degree from an accredited college or university in economics, public finance, public administration, business administration or trade and investment related areas is required.

· Ten years of international experience in a supervisory capacity leading contracts of similar size and complexity in areas of tax reform.

· A thorough understanding of the issues surrounding tax policy and administration reform in the Latin America region or similar countries.

· Demonstrated experience managing programs in the region.

· Demonstrated strong leadership; ability for effective project management; technical and analytical skills; personnel management; and strong interpersonal and teamwork skills.

· Ability to effectively interact with government counterparts, local organizations, and private sector executives.

· Excellent interpersonal skills and proven experience in facilitating dialogue among high level leaders. The assignment will require the COP to work in close coordination with other donors, government institutions and private sector organizations.

Professionally proficient and fluent in written and spoken Spanish and English (FSI levels 4-4) is required.

2. Revenue Administration Specialist

The Revenue Administration Specialist shall be an international senior-level expert in an area of tax administration, such as information and communication technologies (ICT)-assisted revenue collection, taxpayer services, or tax audit. The candidate must have direct experience with tax reform in developing countries, including experience in the development of tax business processes or information technology systems for revenue authorities. The Candidate will have outstanding management skills, resourcefulness, flexibility, and creative problem-solving and ethical management.

Minimum Qualifications:

· Ten years international professional experience in a relevant field such as tax administration, information and communication technologies (ICT)-assisted revenue collection.

· An undergraduate degree in a relevant field, such as economics, accounting, public administration, law, or other relevant field.

· Direct experience with tax reform in developing countries, including experience working with revenue authorities or similar institutions that jointly undertake tax and customs operations.

· Professionally proficient and fluent in written and spoken Spanish and English (FSI levels 4).

· Excellent interpersonal skills and demonstrated experience in facilitating dialogue among mid to high level leaders

3. Public Sector Change Management Advisor

The candidate for this position shall be an international, senior-level expert in managing or facilitating change and performance improvement in public sector institutions. S/he will play a lead role in identifying constraints and gaps impeding organizational performance in assisted institutions, shaping plans to manage change and build capacity, developing effective communications strategies, and developing comprehensive training plans for the implementation of the various reforms, systems, policies, and procedures. S/he will also facilitate strategic communications, outreach and engagement between government, civil society, and the private sector on fiscal policy and administration matters. The candidate must demonstrate outstanding management, resourcefulness, flexibility, creative problem-solving, and ethical management skills.

Minimum Qualifications:

· Ten years of professional experience managing or facilitating change and performance improvement in public sector institutions, with experience related to PFM policy and administration.

· The candidate shall have at least an undergraduate degree in a relevant field, such as economics, public administration, public policy, strategic communications, or other relevant fields.

· Professionally proficient and fluent in written and spoken Spanish and English (FSI levels 4).

· Excellent interpersonal skills and proven experience in facilitating dialogue among mid- and senior-level leaders.

b) Other Staffing Considerations

The Contractor has the ultimate responsibility for managing the task order, for achieving the performance results in the activity areas, and for determining the appropriate staffing pattern in support of its technical approach. Offerors must assemble a team with the required knowledge and experience in the program components. The program must have expertise in and access to specialist in public financial management (PFM) systems with emphasis on supporting domestic revenue mobilization in tax and customs administration, implementing e-procurement and improving the PFM training system, improved public expenditure management, tax administration and transparency. The staffing pattern will reflect the minimum number of highly experienced technical staff sufficient to manage and implement the activities under this task order. USAID intends the program to have a sufficient but small core of full-time staff in Country A responsible for planning, managing, and assessing programs. The staff may be supplemented by short-term technical experts who can support in-country long term personnel in providing technical assistance in specific areas of expertise.

VI. MONITORING, EVALUATION, AND LEARNING

Activity monitoring, evaluation, and learning (MEL) must emphasize the systematic process of collecting and analyzing performance data and other information to track progress toward planned results. The purpose of monitoring, evaluation and learning practices is to apply knowledge gained from evidence and analysis to improve development outcomes and ensure accountability for the resources used to achieve them.

Monitoring and evaluation is used to influence decision making and resource allocation and to make changes as needed. USAID relies on the best available information to rigorously and credibly make choices, plan effectively, manage adaptively, and learn systematically. Activities must have an approved Activity MEL Plan in place before major implementation actions begin. Key components of the Activity MEL Plan include:

· The activity’s monitoring approach is documented, including relevant performance indicators of activity outputs and outcomes and context indicators;

· Plans for collaborating with any external evaluations planned by USAID;

· Any proposed internal evaluations;

· Learning activities, including knowledge capture at activity close out;

· Estimated resources for these monitoring, evaluation and learning activities that are a part of the implementing partner’s budget; and

· Roles and responsibilities of the contractor and subcontractors for all proposed monitoring, evaluation and learning actions.

The Activity MEL Plan must include as many or as few performance indicators as necessary to ensure that progress toward expected results is sufficiently tracked, while also being cost effective by eliminating redundant indicators. The offeror will propose a number of performance indicators with a balance between the quantity and quality of indicator data needed for management decision making and reporting; and the management and financial resources required to collect and analyze those indicators. Some recommended indicators include:

· Outcome-level indicators

· EG 1.1-1 Tax Administration and Compliance Improved (% increase in the ratio of tax collections as percentage of GDP) as a result of USG assistance

· EG 1.1.-2 Amount of Domestic Revenue Mobilization collections as percentage of GDP

· Custom Indicator - Tax and Revenue Authority: Number of new registrants in the taxpayer registry as a result of USG assistance

· Custom Indicator - Tax and Revenue Authority: Percentage of taxpayers who file and pay on time contributed to by USG assistance

· Custom Indicator – Customs Directorate: Level of taxpayer perceptions/satisfaction

· Custom Indicator – Customs Directorate: Number of new users of the transparency portal both at the central and municipal levels contributed to by USG assistance

· Custom Indicator: E-procurement system fully functional at the national level

· Custom Indicator: MOF PFM training system modernized and improved

· Output-level indicators

· Custom Indicator: Number of policies, laws, and regulations at different stages of analysis, drafting and consultation, legislative review, approval or implementation contributed to by USG assistance

· Custom Indicator: Number of regulatory and administrative procedures eliminated or improved contributed to by USG assistance

· Custom Indicator: Person hours of training completed in tax policy and tax administration supported by USG assistance

· Custom Indicator: Percentage of new procurements completed using the e-procurement system

· Custom Indicator: Percentage of MOF staff PFM training records established through the enhanced IT system

Evaluation is the systematic collection and analysis of information about the characteristics and outcomes of activities conducted as a basis for judgments to improve effectiveness, and timed to inform decisions about current and future programming. The purpose of evaluations is twofold: to ensure accountability to stakeholders and to learn to improve development outcomes. USAID is planning to conduct an external final performance evaluation of the activity between six and twelve months before the activity ends. The purpose of this evaluation will be to provide evidence of improvements in public financial management, measuring USAID’s attribution and identifying how sustainable USAID’s results were.

Some recommended evaluation questions include:

1. To what extent has USAID and other stakeholders’ dollar amount investment contributed to outcomes of Government of Country A' increased tax collection over the evaluation period?

2. To what extent have USAID’s investments contributed to achieving sustainable results (including unintended results of USAID’s efforts) and Government of Country A’ fiscal policy goals?

3. To what extent have USAID’s investments in Information Technology contributed to achieving sustainable results vis-à-vis the USAID Mission’s expected results and Government of Country A’ fiscal policy goals?

4. How have external factors influenced outcomes and affected the sustainability of the results?

5. To what extent is Government of Country A’ engagement likely to continue, be scaled up at the national level, replicated, or institutionalized after USAID funding ceases?

The contractor will interact with the external evaluation team to support the evaluation (e.g., providing resources created or collected by the activity, responding to evaluator’s data collection efforts, validating initial findings, etc.)

[END OF SECTION C]