The USAID Microeconomic Foundations for Growth IQC

Solicitation Number: SOL-176-11-000003 - Contract Award Date: July 1, 2011 - Contract Award Number: AID-176-I-11-00005

Contract Award Dollar Amount: $50,000,000

Description

The objective of this IQC is to facilitate USAID/CAR's continued engagement in microeconomic reform,strengthening businesses, infrastructure, and trade facilitation through a structured procurement process.

The new IQC will build on previous USAID-funded efforts in addressing these areas. USAID's program objectives focus on implementing robust activities that promote economic growth, reduce poverty, graduate transitional countries from aid to trade, promote open competitive markets, develop the private sector, and mobilize private financing sources to supplement and eventually replace development assistance.

IQC contractors will provide a full range of services to USAID/Central Asia in microeconomic reform, business improvement, and trade facilitation. The Microeconomic and other economic expertise under this contract will:

  • Position USAID to provide sound developmental policy advice and take a leadership role in fostering a better understanding of microeconomic policy issues.
  • Support USAID efforts to assist host countries in the design and implementation of economic and structural reform programs, and the elements of such programs.

This Microeconomic IQC's goals will result in these outputs:

  • Technical advice and implementation support to USAID/CAR, CAR Country Offices, and host country officials on all aspects of relevant microeconomics;
  • Information dissemination through seminars, workshops, conferences, and working papers, and other means;
  • Customized strategic and tactical development approaches;
  • Research on technical, legal, policy and strategic issues, and applied research to meet specific, contextually defined requirements of countries, regions or sub-regions;
  • Training of USAID and host-country decision-makers and technical personnel in the design and implementation of economic policy and institutional reforms; and,
  • Long-term, in-country coordination and management of field activities under the IQC mechanism.
 
SECTION C - DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 BACKGROUND

The Central Asian countries of the Former Soviet Union (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan - the “CARs”) are a disparate group across a range of measures: their natural resource endowments, the degree of economic reform and liberalization completed since the Soviet Union’s dissolution, economic diversification, extent of economic and political pluralism, development of civil society, effectiveness of government, and standards of living among their populations.

Despite these differences, sustainable economic development in the region is contingent upon greater economic integration and cooperation among countries. A wealthier, healthier and more stable Central Asia will be characterized by increasing trade and investment between countries among which economic interests are aligned. It will also be characterized by the establishment of mutually beneficial commercial ties with neighboring countries such as Russia and China.

If the CARs are to succeed economically they will increasingly implement best practices in public management, take measures to improve their business environment and subscribe to international and regional agreements that mitigate conflict and enhance economic growth. This will attract foreign investment, open markets to trade, spur economic growth and create jobs for Central Asians.

The Mission’s Office of Economic Growth (OEG) addresses development problems in macroeconomic policy reform and microeconomic reforms. at the national level and trade facilitation, regional economic integration and energy and environmental problems on a regional basis.

  • OEG is contributing to improving the business environment and building public sector capacity throughout the Central Asian Region.
  • OEG has been one of the most important contributors to development of the microfinance sector in the Central Asian Region.
  • OEG is helping to introduce modern agricultural technologies to increase productivity throughout the Central Asian Region.
  • OEG also funds activities aimed at reforming national power industries, facilitating regional trade in energy and water basin management.

C.2 OBJECTIVES

The objective of this IQC is to facilitate USAID/CAR’s continued engagement in microeconomic reform, strengthening businesses, infrastructure, and trade facilitation through a structured procurement process. The new IQC will build on previous USAID-funded efforts in addressing these areas.

USAID’s program objectives focus on implementing robust activities that promote economic growth, reduce poverty, graduate transitional countries from aid to trade, promote open competitive markets, develop the private sector, and mobilize private financing sources to supplement and eventually replace development assistance.

These activities should seek to enhance regional economic integration where it is mutually beneficial to Central Asian nations. IQC contractors will provide a full range of services to USAID/Central Asia in microeconomic reform, business improvement, and trade facilitation. Microeconomics refers to the branch of economics that analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers. In particular, microeconomics focuses on patterns of supply and demand and the determination of price and output in individual markets.
The objective of the task orders under this IQC is to identify impediments to increased microeconomic entrepreneurial initiative, output, productivity, and trade with a focus on private enterprise growth and emphasis on small and medium sized enterprises as well as micro-enterprise development and expansion where possible.

The Contractor shall undertake targeted interventions to address these constraints and to create conditions for sustained productivity growth at the enterprise, value chain, industry, and sector levels which contribute to expansion of economic growth and employment. Microeconomic encompasses (non-exclusively) the areas of:

  • Small and medium enterprise development.
  • Agribusiness enterprise development.
  • Micro-enterprise development.
  • Policy-related studies of key microeconomic factors--including policy and regulatory frameworks, key pricing and investment issues, planning and analysis.
  • Analysis and recommendations on economic clusters, value chains, and their relation to microeconomic economic performance, and design and implementation of pro-poor economic growth strategies.
  • Other areas of economics are also relevant, at the consumer or firm level, to the extent they affect employment, productivity, production, consumption, savings, and living standards.
  • The objective of this contract is to provide USAID entities and host government counterpart organizations with the ability to task leading thinkers, practitioners, and research organizations across the full range of microeconomic policy issues.


Microeconomic and other economic expertise under this contract will:

  • Position USAID to provide sound developmental policy advice and take a leadership role in fostering a better understanding of microeconomic policy issues.
  • Support USAID efforts to assist host countries in the design and implementation of economic and structural reform programs, and the elements of such programs.


This Microeconomic IQC’s goals will result in these outputs:

  • Technical advice and implementation support to USAID/CAR, CAR Country Offices, and host country officials on all aspects of relevant microeconomics;
  • Information dissemination through seminars, workshops, conferences, and working papers, and other means;
  • Customized strategic and tactical development approaches;
  • Research on technical, legal, policy and strategic issues, and applied research to meet specific, contextually defined requirements of countries, regions or sub-regions;
  • Training of USAID and host-country decision-makers and technical personnel in the design and implementation of economic policy and institutional reforms; and,
  • Long-term, in-country coordination and management of field activities under the IQC mechanism.

C.3 CHALLENGES

Despite the progress that has been made towards sustainable economic development, particularly in Kazakhstan, challenges exist. While regional economic integration and cooperation is a long-term and iterative process mandatory for sustainable economic growth, it is not viewed as a priority by decision-makers in Central Asia.

Uzbekistan’s economy is heavily oriented towards import substitution and relatively unattractive to foreign investors. For Tajikistan and Kyrgyzstan, a sustainable increase in living standards will not occur without increased regional economic integration and cooperation, but engagement with their neighbors toward this outcome has had poor results.

Tajikistan’s trade with other countries is hampered by poor relations with Uzbekistan, the easiest route by which to import or export. With respect to domestic economic policy and its implementation, political expediency frequently results in decisions ill-suited for sustainable economic growth. Economic reform is beset by entrenched interests, and in some cases corruption, that serve as an obstacle to economic development.

In all Central Asia countries, private sector activity is dominated by extractive industries and/or the production of agricultural commodities with public functions, economic strategies and structures that relate to businesses focused on these sectors. Micro, small and medium sized enterprises account for an inadequate percentage of GDP while accounting for increasing large amount of employment.

Employment in the region ranges from levels considered high in Kazakhstan to catastrophic in Kyrgyzstan and Tajikistan where significant percentages of the workforce emigrate to take unskilled jobs in Russia and Kazakhstan. As a result of this migration, women in these countries are taking on larger roles in small business and agro-business, and they need increased programmatic and policy support.

Finally, Tajikistan and Kyrgyzstan both possess characteristics of failed states which complicate the implementation of economic reforms in those countries.

C.4 SCOPE OF WORK (SOW)

Contractor duties include provision of technical and advisory services, training, research, and other services to USAID/CAR, associated country offices and any newly created USAID missions in Central Asia. Contractors shall provide these services through the execution of task orders with specified performance bench-marks for achievement of objectives.

C.4.A CORE TASKS

The contractor shall perform or manage performance of two core tasks:

  • Implementation of Task Orders
  • Knowledge Management

C.4.A.1 IMPLEMENTATION OF TASK ORDERS

Contractors shall undertake the preparation of proposals in response to task orders that may include:

  • Problem diagnostics and analytics
  • Problem identification
  • Program/project/task design
  • Analysis and assessment
  • Program/task recommendations
  • Strategic planning at the level of the:

    Public or private institution
    Local authorities
    Regional organization
    Government body (ministry, agency)
 

  • Implementation in:

    Program management
    Transactions facilitation
    Commodity procurement
    Management of local non-US institutions
    Grant management
    Monitoring and evaluation and assessment
 

  • Evaluation

    Metrics development
    Performance targeting and monitoring
 

  • Assessments and analysis

    Applied research on development challenges
    Data generation
 

  • Provide logistical support for task implementation teams
  • Supervise task implementation teams
  • Collaborate in resolving IQC and Task Order issues
  • Manage contract resources cost effectively
  • Provide technical and advisory services that:

    Assist USAID/Central Asia, associated country offices and any newly created USAID missions in Central Asia to accomplish task order objectives
    Offer training and research services
 

  • Work closely with representatives of other development assistance institutions to coordinate programs and policies
  • Partner, subcontract, or prepare and administer grants with local, non-US organizations when necessary to accomplish Task Order objectives
  • Work closely with government, private sector, non-government, and private voluntary organizations, and use local expertise
  • Work with institutional partners of USAID/Central Asia, associated country offices and any newly created USAID missions in Central Asia to:

    Achieve USAID/Central Asia and any newly created USAID missions in Central Asia Strategic Objectives
    Establish relationships with local businesses, banks, professional associations, local consulting firms, and non-governmental organizations
 

  • Subcontract and partner with local organizations within the scope of work of Task Orders
  • Design, preparation, management and administration of USAID grants to regional/local organizations and institutions

C.4.A.2 KNOWLEDGE MANAGEMENT

Knowledge Management (KM) is a significant part of the Microeconomic Foundations for Growth IQC. The contractor shall:

  • Capture, provide custodianship for and, as directed, disseminate information, data, analyses, and any other written material produced under the IQC,
  • Create a standard framework for knowledge creation, sharing, and vetting,
  • Disseminate lessons learned, best-practices, and professional training in appropriate multimedia format,
  • Provide marketing and technical-support outreach to USAID/Central Asia, associated country offices and any newly created USAID missions in Central Asia, client country decision-makers, and other domestic US and international development and support organizations,
  • Coordinate donor and KM linkages,
  • Create and support "Communities-of-Practice," and
  • Market "branding" of USAID as a technical leader in solving business, trade, and investment issues.

C.4.B TECHNICAL TASKS

This section describes the technical task areas that the Contractor shall perform, either as an individual firm or in a prime-subcontractor consortium arrangement. These task areas are illustrative and should not be considered all-inclusive.

Under The USAID Microeconomic Foundations for Growth IQC technical assistance covers a wide range of potential activities necessary to address the problems and impediments constraining Central Asia’s growth, productivity and output. USAID intends the Task Orders issued under this IQC to coordinate closely with the other USAID contract mechanisms to avoid overlap of mandate and ensure effective use of resources.

Services provided under this IQC will fall within the following functional area, divided into a broad set of technical tasks defined as: Microeconomic Foundations for Growth. Within the Microeconomic  Foundations for Growth area, services will cover both developing and implementing:

  • Small and medium enterprise development,
  • Micro-enterprise development,
  • Support to agribusiness and agriproducers, and
  • Stabilization – Crisis Assistance- addressing shocks, providing assistance to ease the adjustment to political, economic and financial shocks that cause short and medium-term development problems affecting the specific economic sectors, value chains or firms and potential to generate economic growth. The above areas of micro-economic intervention are shown below in expanded form. They represent a range of potential illustrative tasks that USAID could require under Task Orders.

C.4.B.1 MICROECONOMIC FOUNDATIONS FOR GROWTH

The objective is to remove impediments to entrepreneurial initiative, output, productivity, and trade with a focus on private enterprise growth and small and medium sized enterprises as well as micro-enterprise development and expansion. The Contractor shall undertake targeted interventions to address these constraints and to create conditions for sustained productivity and growth at the enterprise, value chain, industry, and sector levels. Illustrative activities include:
 

  • Small and medium enterprise development initiatives that address:

    Support for entrepreneurship and risk-taking
    Incentives schemes for risk-taking behavior in pursuit of profit
       i) Access to risk-sharing/mitigation vehicles
       ii) Business insurance
       iii) Appraisal and valuation
       iv) Business strategy and market tactics
       v)Organization management, finance, marketing, and operations

Governance

  • Linkages to buyers and/or suppliers
  • Value chain strengthening and optimizing
  • Innovation in product and service markets
  • Integration with local, regional and global markets
  • Linkages to foreign brokers, buyers, and suppliers
  • New business formation

    i) Facilitating new entry
    ii)Decreasing time, cost, complexity of operations and access to services

  • Business support and promotion services
  • Increased access to improved factor conditions:

    i) Seed capital, later-stage equity, debt financing
    ii) Reduction in labor rigidity
    iii) Land markets formalized

  • Infrastructure: physical, technological, informational, administrative, natural resources
  • Professional education and certification
  • Transition from informal to formal operations
  • Domestic and foreign business promotion and support organizations
  • Improving institutional support

    i) Association development
    ii) Other strategic working groups

2) Micro-enterprise initiatives that address:

  • Fostering entrepreneurial initiative
  • New business formation
  • Institutional support development
  • Business development services
  • Private sector driven policy and regulatory reform
  • Training
  • Development of market linkages
  • Assessments, evaluations, and analyses

   i) Credit and other financial support
 

3) Support to agribusiness and agriproducers

  • Alleviation of constraints to agricultural sector growth

    i) Increasing market access
    ii) New product and agro-services development
    iii) Targeting input marketing constraints
    iv) Market information systems and firm/cluster networking
    v) Facilitating transactions
 

  • Agribusiness enterprise development

    i) Private sector driven regulatory reform for agribusiness enterprise
    ii) Rural infrastructure assessments
    iii) Land reform assessment
    iv) Trade and investment development
    v) Institutional support expansion
    vi) Value chain analyses
    vii) identification of financial support mechanisms
 

  • agrifinancing
  • cooperative development organizations and other member-owned businesses
  • modernizing on-farm technologies
  • crop diversification


4) Stabilization – Crisis Assistance to assist the Central Asian Republics in dealing with shocks that decrease economic activity and require rapid, corrective intervention. All of the countries in the region are at risk of sudden destabilizing events. Kazakhstan and Uzbekistan have aging Soviet era Presidents who run their countries autocratically and where succession could entail an open struggle for power.

Kyrgyzstan has had two revolutions since independence and has a history of inter-ethnic violence. Tajikistan has been unable to deliver basic services to its people and is subject to increasing Islamic radicalization. The hostile relationship between Uzbekistan and Tajikistan could lead to war at any time. Turkmenistan’s closed and idiosyncratic regime presents a closed façade to the world that defies predictability as to its peaceful evolution, therefore the IQCs will need to have the capacity for rapid response to emergency needs for technical assistance. The ability of a Contractor to mobilize to deliver the required technical assistance quickly will be a determinative factor in the award of a task order issued in response to such an emergency.

C.4.C ILLUSTRATIVE TASK ORDER DELIVERABLES FOR CORE AND TECHNICAL TASKS

Since identification and specification of task orders is not possible for an IQC mechanism, the following represent general categories of illustrative generic deliverables that contractors shall be capable of producing during the period-of-performance of the IQC:

  • Strategies, assessments, and analyses for micro-economic productivity, institutional capacity and other functions that support private-sector-led growth,
  • Competitiveness and business productivity initiatives at the national, sub-national, regional, value chain, cluster, and enterprise levels,
  • Trade expansion and promotion efforts at the national, regional, and global levels, and facilitation of trade organization membership,
  • Public/private dialog and partnerships on business, trade, investment, entrepreneurship, and productivity,
  • Private investment encouragement initiatives at the regional, national, sub-national, sector, and firm levels,
  • Knowledge management and dissemination activities,
  • Initiatives that expand SMEs capacity to meet local content requirements.
  • Initiatives that seek to increase SMEs use of new technology and ability to innovate.
  • Initiatives that provide technical assistance to government programs to promote SME development.
  • Quick response to rebuild the economy of a town, city or region devastated by ethnic violence or natural disaster.

C.4.D IMPLEMENTATION AND PROGRAM MANAGEMENT

The Contractor shall provide contract management necessary to fulfill the requirements of this Contract. This includes cost and quality control of all tasks orders.

C.4.E GRANTS UNDER TASK ORDERS

For grants under the task orders the contractor will design a grant-making program that can accommodate both large and small grants, in order to build capacity in, and take advantage of, existing capacity in the widest possible range of local partners. Please see grants management requirements in Section H.17 Grants Under Contract.

C.5 KEY PERSONNEL

IQC Project Manager: The Contractor shall designate, for USAID approval, a principal point of contact, the IQC Project Manager that USAID may contact for procedural and substantive matters. In addition to the technical leadership role and responsibilities vested in this person, the IQC Project Manager shall be responsible for preparing and responding to task order proposals.

The IQC Project Manager shall also be responsible for ensuring quality control and for the overall responsiveness of technical assistance provided under the Contract. Substitution of the IQC Project Manager shall be subject to the approval of USAID. The IQC Project Manager roles and responsibilities are as follows:

  • The Contractor shall assure that there is always an IQC Project Manager and the costs for that function are included.
  • The IQC Project Manager shall select, prepare, place, and support all technical experts carrying out technical requirements;
  • The IQC Project Manager shall report to USAID/Central Asia technical and contract personnel in accordance with USAID reporting requirements and as detailed in each task order;
  • The IQC Project Manager shall ensure quality control methods in a consistent and transparent manner for all contracted tasks and functions.

USAID recommends IQC Project Manager level of effort only manifest in individual Task Orders. Furthermore, USAID does not envision funding IQC Project Manager level of effort outside of Task Orders.

C.6 TECHNICAL SKILL REQUIREMENTS

The Contractor shall furnish the services of individuals with the necessary education and/or relevant experience as required in each task order.

C.7 STANDARDS OF PERFORMANCE

This section defines the performance requirements to which the Contractor shall be held, establishes the performance levels or standards, and defines how these performance standards will be measured.

A. Performance Standards

Measurable performance standards will be established in individual task orders. These performance standards will be consistent with the objectives for The USAID Microeconomic Foundations for Growth IQC and with the following general performance standards:

  • Technical competence: Performance shall be measured by the Contractor's effectiveness on the assignment. Effective technical assistance will produce reports that contain actionable recommendations that can be successfully implemented by the client organization. Ineffective technical assistance is marked by superficial or theoretical findings and recommendations, which are irrelevant or cannot be implemented.
  • Ability to assemble or prepare effective expertise: Performance may be measured in several different ways. For example, superior contractor recruitment ability goes beyond a simple review of candidate's resumes before submission to USAID. Some candidates might appear qualified on paper, but may lack effectiveness in action. Superior recruitment processes shall be based on references and first-hand contacts with the technical expert proposed. Similarly, in team building, superior contractor performance will be demonstrated by assembling teams that function smoothly in accomplishing the required task.Superior contractor performance shall take into consideration how each individual will contribute to create positive group chemistry when assembling teams. Inferior performance is marked by disruptive team relations, notwithstanding the sometimes stellar reputation of individual members on the team.
  • Contractor responsiveness: Performance may be measured by the Contractor's ability to maintain open, direct, and responsive communications channels with USAID/Central Asia, country offices, any newly created USAID missions in Central Asia and its clients. Superior contractor performance is marked by a rapid, helpful response to clients without undue delays.
  • Client satisfaction with the finished product: Performance may be measured in many ways. Superior contractor performance is distinguished by the high quality of the final deliverable. High quality deliverables should be clear, concise, accurate, well-structured, and easily comprehended. Advisory services may be measured by the results from recommendations followed.
  • Improved Capacity: Performance may be measured based on the increased ability of the recipient of technical assistance to understand and act on the technical subject matter subsequent to Contractor's provision of services.
  • Adherence to the proposed subcontracting plan: This relates to the Contractor's ability to assemble or prepare effective expertise (noted above). USAID expects to be able to benefit from access to the full range of experience and expertise available through an IQC-holder consortium. The Contractor's adherence to the proposed sub-contracting plan constitutes part of the basis for the evaluation of contractor performance.

This information is derived from solicitations published on www.fbo.gov. The source documents related to this Indefinite Quantity Contract (IQC) are available below. Interested in researching prime USAID IQC holders? With hundreds of entries, Developmentwork.Net maintains an overview of prime USAID IQC holders here.

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