MODIFICATION
R -- USAID/Macedonia: Business Ecosystem Project
- Notice Date
- 2/17/2017
- Notice Type
- Modification/Amendment
- NAICS
- 541990
— All Other Professional, Scientific, and Technical Services
- Contracting Office
- Agency for International Development, Overseas Missions, Macedonia USAID-Skopje, Skopje, Washington, District of Columbia, 20521-7120
- ZIP Code
- 20521-7120
- Solicitation Number
- RFI-165-17-000001
- Archive Date
- 4/14/2017
- Point of Contact
- Rade Knezevic, Phone: +389 2 310 2203, Flirentin Emini, Phone: +381 38 5959 2142
- E-Mail Address
-
rknezevic@usaid.gov, femini@usaid.gov
(rknezevic@usaid.gov, femini@usaid.gov)
- Small Business Set-Aside
- N/A
- Description
- Request for Information USAID/Macedonia: Business Ecosystem Project Reference Number: RFI-165-17-000001 Release Date: February 16, 2017 Response Due Date: February 24, 2017, 17:00 (Macedonia Time) The United States Agency for International Development in Macedonia (USAID/Macedonia) is in the process of designing a new stand-alone program and concept to support increase of Micro, Small and Medium Enterprises' (SMEs) productivity, revenues and ultimately create more jobs in Macedonia. USAID/Macedonia is posting this Request for Information (RFI) in order to provide public information to any parties interested in USAID's support for increase SMEs productivity, revenues and jobs, as well as to collect information and suggestions about proposed project approach and derived objectives from it. The information contained within this RFI is intended solely as a thought-piece; ideas may change significantly during the Mission's program design, consultation and approval process. In addition, any information collected through this RFI may or may not be used to help guide thinking about adaptation programming. THIS IS A REQUEST FOR INFORMATION ONLY. It is not a Request for Proposal, a Request for Quotation, a Request for Application, an Invitation for Bids, a Solicitation, or an indication OAA will contract for the items contained in this Special Notice. The RFI is an attempt to reach out in an effort to determine industry capabilities and interest and will be treated as information only. In accordance with FAR 15.201(e), responses to this notice are not offers and cannot be accepted by the Government to form a binding contract. Responses to this RFI are strictly voluntary and USAID will not pay respondents for information provided in response to this RFI. Please note that the figure in USAID's Business Forecast is only a place-holder and not indicative of this work. Responses to this RFI may not be returned and respondents may not be notified of the result of the review. If a Solicitation is issued, it will be announced on the Federal Business Opportunities website www.fbo.gov at a later date, and all interested parties must respond to that Solicitation announcement separately from any response to this announcement. This RFI does not restrict the Government's acquisition approach on a future Solicitation. This is an RFI and not a Request for Proposals and is not to be construed as a commitment by the U.S. Government to issue any solicitation or to pay for any cost incurred in the preparation and submission of comments on this RFI. Responding to this RFI will not give any advantage to any firm or organization in any subsequent procurement and will not lead to an organizational conflict of interest. Responses will strictly be held confidential. Instructions for Submitting Responses/Comments Responses (comments, suggestions, and enhancements) to this RFI are due on February 24, 2017, 17:00 (Macedonia Time). To expedite our review and be considerate of your time, please keep responses to no more than 2 pages in length if possible. Responses to the RFI must be written in English, and use 11.5pt font. Please number each page consecutively. Send responses to this RFI via email to rknezevic@usaid.gov and femini@usaid.gov with the subject title "Request for Information (RFI): USAID/Macedonia Business Ecosystem Project (BEP)", no later than the date/time stated above. You will only receive an electronic confirmation acknowledging receipt of your response, but will not receive individualized feedback on any suggestions. Standard Clauses and Provisions The standard clauses or provisions for awards are generally prescribed by law and regulation and will vary considerably by award type. Information regarding clauses and provisions will be provided when the award type is identified after proposals/applications are sought in the future. REQUEST FOR INFORMATION OR SOLICITATION FOR PLANNING PURPOSES (OCT 1997) (a)The Government does not intend to award a contract on the basis of this solicitation or to otherwise pay for the information solicited except as an allowable cost under other contracts as provided in subsection 31.205-18, Bid and proposal costs, of the Federal Acquisition Regulation. (b)Although "proposal" and "offeror" are used in this Request for Information, your response will be treated as information only. It will not be used as a proposal. (c)This solicitation is issued for the purpose of: receiving recommendations on approaches for establishing Macedonia Business Ecosystem Project (BEP). This Notice can be viewed and downloaded from the internet at www.fbo.gov. Thank you for your assistance and interest in USAID programs. Sincerely, Sascha Kemper Contracting/Agreement Officer BACKGROUND AND ACTIVITY SUMMARY The project's overall goal is to increase SME's productivity, revenues and jobs. The contractor must work with business associations, chambers of commerce, financial institutions, training centers, lead firms willing to support the development of their value chain, and other supporting organizations that provide business services to Micro, Small and Medium Enterprises (SMEs). It will also work with financial institutions to increase the available financing to SMEs. The contractor must thus try to improve the business services available to SMEs as well as financing opportunities. The Business Ecosystem will be USAID Macedonia's main economic growth project and has three complementary and mutually reinforcing objectives. These are to: 1.Improve BSOs' services to SMEs; 2.Improved SMEs' access to sources of financing; and 3.Increased investment by lead companies to improve their SMEs productivity and labor force skills. For purposes of the project, non-governmental Business Support Organizations (BSOs) may include: •Chambers of commerce (there are currently four registered) •business associations and clusters •professional associations •various non-governmental organizations with economic development mission on national and local level (foundations, think-thanks, NGOs, Local Action Groups) •Educational institutions and training centers (registered as NGOs) •Information sharing entities (portals) •Cooperatives •Start-up accelerators and incubators Similarly, SMEs are defined as companies with less than 250 employees, including individual farmers and microenterprises. The project's proposed approach is suitable for the current Macedonian context given that over the previous decade some business support organizations have been able to establish themselves on the market, built a modest constituency base among the SMEs and provide some basic business services. Delivering support to SMEs through these existing organizations will enable them to implement some of the activities from their strategies and action plans, empower them to become more innovative and entrepreneurial and thus more relevant to SMEs. The contractor must also facilitate better access to existing sources of financing. The focus will be primarily on non-bank financial institutions, such as, but not limited to, business angels networks, start-up accelerators, investment funds, as well as government and EU funding. The increased access to finance will support the creation of new start-up companies and the growth of existing ones. These activities can also help create a pipeline of clients for the financial institutions involved in the Agriculture DCA. Lastly, The contractor must also leverage private sector resources (through matching financial and in-kind contributions) from lead firms-which are larger companies that have SME providers or supply SMEs- to support the enhancement of the SMEs in their respective value-chains, increase the technical capacity of the labor force, and/or promote Local Economic Development (LED) in a community. As described further below, The contractor must foster private sector engagement in development efforts. In general, this project is based on the following Theory of Change (TOC): If services to SMEs and their access to finance improve, and if there is more investment by larger companies to improve their supply chain, then SME's productivity, diversification and sophistication and jobs will increase. GOAL: Increased SME's productivity, revenue and jobs Objective 1: Improved BSOs' services to SMEs Illustrative Activities: 1.1Capacity Building of BSOs 1.2 Grants to BSOs to introduce services that will improve the performance of the SMEs Objective 2: Improved SMEs' access to financing Illustrative Activities: 2.1Support SME to prepare "bankable proposals" and access appropriate financial resources 2.2Work with traditional and alternative sources of finance to develop new financial products for SMEs 2.3Conduct information campaign, targeting SMEs, on the different types of financing Objective 3: Lead firms invest in development of their supply chain and labor force Illustrative Activities: 3.1Outreach to lead firms to raise awareness of the benefits of private sector engagement in economic development 3.2Providing technical assistance and co-financing for SME-development, workforce development and/or LED activities implemented in partnership with lead firms RESEARCH AND ANALYSIS The Economic Growth Team conducted a review of relevant reports: •World Economic Forum Competitiveness report, •EU progress report, •Competitiveness Strategy and Action Plan of the Republic of Macedonia 2016-2020, •Macedonian Venture Capital Ecosystem Diagnostics to support the creation of Innovative Start-ups and SMEs prepared by World Bank •SME strategy 2017 - 2022 prepared by the Macedonian Ministry of Economy • Sector studies produced by the Regional Economic Growth Project. These reports indicate that while SMEs should be the driving force of the economic development and main job creators in Macedonia, they are still very anaemic and with limited growth potential. According to the EU progress report for 2015, "businesses remained concentrated in low-productivity activities and it is necessary to increase the value added in productive sectors. Further investment is needed to boost labour productivity growth and speed up the transformation of the economy." In the World Economic Forum competitiveness ranking for 2015 -2016 of 140 total countries, Macedonia scores low in labour market efficiency (rank 84), technological readiness (rank 63), business sophistication (rank 72) and Innovation (rank 58). SMEs face challenges of integration into international markets and FDI supply chains. Several factors contribute to this condition of the SME sector, including: •the lack of business skills, •the poor business support ecosystem, •lack of available, accessible, and diverse sources of financing, •inefficient production technology, and •the unstable business environment. Governmental SME support services are severely underfunded, and therefore virtually non-existent. Some non-governmental business support organizations do exist, but less than a third of SMEs use their services. The local market for advisory services needs further development to improve the quality, diversity, accessibility and affordability of their services. Furthermore, their services are predominantly available in the capital (Skopje), targeting larger companies, while SMEs in other areas of Macedonia are neglected. The awareness of SMEs of the available support measures and advisory services is moderate, and information and consultation mechanisms need to be strengthened. The design of this project is largely based on the findings and development objectives identified in the Competitiveness Strategy and Action Plan of the Republic of Macedonia 2016-2020 (***Footnote 1). Proposed activities will addresses four of its seven strategic objectives to various extents: •A more entrepreneurial and productive SME sector •A more dynamic export sector •A more skilled and entrepreneurial labour force •A higher volume of finance to the enterprise sector Moreover, from October 2016 to February 2017, the Mission has conducted a Private Sector Engagement Assessment to determine ways to initiate or expand engagement with the private sector in development assistance. It revealed that some of the lead companies in Macedonia have begun to develop Corporate Social Responsibility awareness. However, they are still mostly directed to general philanthropic activities, and focussing less on development of their potential suppliers, potential future employees or the economic development of the community in which they operate. PROJECT APPROACH Based on the abovementioned analysis, the Business Ecosystem Project will be USAID Macedonia's main economic growth project and has the overall goal of increased SME's productivity, revenues and jobs. To reach that goal, the project has three complementary and mutually reinforcing objectives. These are: 1.Improved BSOs' services to SMEs; 2.Improved SMEs' access to sources of financing; and 3.Increased investment by lead companies to improve their SMEs productivity and labor force's skills. Illustrative Activities and Results Any illustrative activities, indicators or targets presented below are strictly illustrative and far from comprehensive. The final indicators and targets will be established in the Work Plan and Monitoring and Evaluation plan, which will be approved by USAID. In all results, the implementer should strive to achieve adequate distribution of beneficiaries (both SMEs and individuals) as follows: •geographic - 60% out of Skopje, •gender - 35% female •ethnic -20% of non-Macedonian ethnicity Project Goal: Increased SME's productivity, revenue and jobs. Expected results: •Increased SMEs' revenue •Increased number of SME jobs •Increased worker productivity Illustrative Impact indicators: •Percentage of annual revenue growth rate of assisted SMEs (based on Central Registry data) (Target: average 6% annual growth) •Number of new jobs created in the assisted SMEs (based on Central Registry data) (Target: 800 new jobs) Objective 1: Improved BSOs' services to SMEs The implementer should develop a criteria-based selection process to select local BSOs that would receive capacity building, technical assistance and grants in order to provide quality service to SMEs, and design and implement activities and services to adequately respond to SMEs' needs. Furthermore, the implementer must ensure that proper organizational structures and funding mechanisms are put in place within the BSOs to ensure continuous provision of BSO services to SMEs. These activities could be used to expand the membership base of the BSOs, especially out of the capital city, as well as to create new revenue generation streams for the BSO. USAID will approve each BSO that will be selected to a receive grant. Expected Results: •Business Support Organizations deliver quality services to SMEs that allow them to improve their performance. •SMEs are satisfied with the services provided by BSOs Illustrative Activities •Capacity Building of BSOs •Grants to BSOs to introduce services that will improve the performance of the SMEs (***Footnote 2) Illustrative outcome indicators: •Number of SMEs that increase their productivity or reduce costs •Number of created new start-ups that survive the first year of operations Illustrative output indicators: •Number of SMEs introduce new technologies, innovations, standards or business practices that increase their productivity or reduce costs •Number of people that learn new technical and/or business skills that will improve their employability or job performance •Number of SMEs have structured meetings with potential new buyers domestically or abroad •Number of BSOs that offer new services to SMEs Objective 2: Improved SMEs' access to sources of financing (***Footnote 3) Through this component the implementer should facilitate increased investment in SMEs, including start-ups, as a main driver for SME growth and job creation. The current perception is that there is funding available for investment, but that the SMEs are not well positioned to apply for it, while the financial institutions are not willing to invest time and resources to look for and develop potential borrowers among the SMEs. Expected Results: •Increased investment in SMEs through alternative and traditional sources of financing •Improved the investment readiness of the SMEs •Diversification of the alternative sources of SME and start-up financing Illustrative Activities (***Footnote 4) •Support SME to prepare "bankable proposals" and access appropriate financial resources •Work with traditional and alternative sources of finance to develop new financial products for SMEs •Conduct information campaign, targeting SMEs, on the different types of financing Illustrative outcome indicators: •Number of SMEs (including first time borrowers) that access alternative (non-bank) and regular sources of financing with project support •Value of external funding invested in assisted SMEs Illustrative output indicators: •Number of SMEs assisted to seek external capital •Number of new innovative financial products introduced to the SMEs and start-ups Objective 3: Lead firms invest in development of their supply chain and labor force Lead firms are larger, more established companies that have the potential of investing resources to provide technical assistance to the SMEs in their respective value-chains in order to increase the quality and quantity of their production. Lead firms also have the potential of investing in LED activities in a community. The contractor must identify and work with lead firms to co-finance activities that would benefit SMEs and/or promote LED activities that will benefit a community. For example, the contractor and a lead firm may co-finance with a workforce improvement program that helps local youth gain job skills; or they can co finance a program that help SMEs access credit to introduce new technologies which will help improve their production. The lead firm(s) should have significant ownership of the designed activity and be committed to provide both in-cash and in-kind contribution. The Project co-financing should not exceed 50% of the cost of any one activity. Expected Results: •Increased private sector funding for LED activities •SMEs' sales to lead firm increased Illustrative Activities •Outreach to lead firms to raise awareness of the benefits of private sector engagement in economic development •Providing technical assistance and co-financing for SME-development, workforce development and/or LED activities implemented in partnership with lead firms Illustrative outcome indicators: •Amount of private sector funding co-financing SME-development, workforce development and LED activities Illustrative output indicators: •Number of lead firms that engage in and co-finance SME-development and LED activities •Number of SME-development and LED activities co-financed by lead firms and the project Auxiliary Objective The contractor must identify and subcontract with one or more existing local organizations. Local subcontractor(s) must perform substantial portions of the SOW. The contractor must provide capacity building support to the local organization(s), similar to a small business mentor/protégé arrangement, to improve its systems, take on increasing responsibilities under this contract, and be competitive for future USAID awards. The extent of the capacity building and the nature of the relationship will depend on the experience and strength of the local partner organization(s). Furthermore, if an expatriate Chief of Party (CoP) is proposed, they must transfer this responsibility to a local CoP no later than the midpoint of this project. Requested Action In order to maximize potential impact, USAID is seeking feedback on the project approach (including opportunities, as well as things to avoid) and seeks additional information on programs, policies, research, data, activities that might be useful for the project design. USAID is particularly interested in receiving comments on this concept paper with respect to the following questions: 1)Will the proposed objectives lead to significant progress toward achievement of the project goal? Are there other objectives that USAID should consider as well that are appropriate for Macedonia's circumstances? 2)Is the list of illustrative activities appropriate or USAID should consider revising it? 3)What kinds of interventions have worked well in countries similar to Macedonia that we should consider? 4)Are there successful models for boosting private sector engagement in SME development that we should try to replicate? 5)What are reasonable targets for the proposed indicators (per $ invested in the project)? 6)How feasible is the auxiliary objective, specifically to develop the capacity of a local organization to be able to manage a USAID award follow-on award. What are enablers that can achieve success of this objective? ***Footnote 1 - The Government of Macedonia prepared this strategy as a driving document to design donor assistance in the area of improving private sector competitiveness. ***Footnote 2 - Activities implemented by the BSO through the grants could address various aspects of sector competitiveness and company performance, such as, business and sector strategy development, know-how transfer from local and international experts, workforce development (for both existing and future employees) based on the expressed demand of businesses, access to new markets. ***Footnote 3 - GoM Competitiveness Strategy and Action Plan: measure AtF/VI - Expand financial literacy among SMEs. ***Footnote 4 - This project should complement the Mission's other access to finance projects such as Factoring, Microfinance innovation and inclusion and DCAs.
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