REQUEST FOR APPLICATIONS (RFA)

ECONOMETRIC ASSISTANCE TO THE MINISTRY OF FINANCE OF THE REPUBLIC OF SERBIA

Issuance Date: July 25, 2011
Deadline for Receipt of Questions: August 8, 2011 by 5 p.m. CET
Closing Date/Time for Submission of Applications: August 15, 2011 by 5 p.m. CET

SUBJECT: Request for Applications (RFA) Number: RFA-2011-03

The USAID Business Enabling Program in Serbia (Project), a United States Agency for International Development (USAID)-funded contract implemented by Cardno Emerging Markets USA, Ltd., is seeking applications from qualified, legally registered Serbian non-profit, for-profit, and non-governmental organizations (NGOs) for a grant to assist to the Ministry of Finance of the Republic of Serbia in developing and implementing econometric models.
The Successful Applicant will be responsible for ensuring achievement of specified grant objectives.
This RFA consists of the following sections:

  1. Section 1 – Funding Opportunity Description
  2. Section 2 – Award Information
  3. Section 3 – Eligibility Information
  4. Section 4 – Application and Submission Information
  5. Section 5 – Application Review Information
  6. Section 6 – Award and Administration Information
  7. Section 7 – Annexes

Pursuant to 22 CFR 226.81, it is USAID policy not to award profit under assistance instruments. However, all reasonable, allocable and allowable expenses, both direct and indirect, which are related to the grant activity and are in accordance with applicable cost standards (22 CFR 226, OMB Circular A-122 for non-profit organizations, the Federal Acquisition Regulation (FAR) Part 31 for for-profit organizations, and OMB Circular A-21 for educational institutions), may be paid under the Award.
Subject to the availability of funds, the Project intends to provide between 2 and million RSD in total funding to be allocated over a six month period.
The Project reserves the right to fund any or none of the applications submitted. Issuance of this RFA does not constitute an award commitment on the part of the Project, nor does it commit the Project to pay for costs incurred in the preparation and submission of an application. Further, the Project reserves the right to reject any or all applications received if such action is considered to be in the best interest of the US Government. Applications are submitted at the risk of the Applicant; should circumstances prevent making an award, all preparation and submission costs are at the Applicant’s expense.
Applicants should submit any questions concerning this RFA in writing, electronically, via email to grants@bep.rs  The deadline for receipt of requests for clarifications/explanations is August 8, 2011, by 17:00 hours Local Belgrade Time. No questions will be accepted after this date.
Applicants should submit applications in writing to: Zorana Gajic, electronically, via email at grants@bep.rs The Closing Date for submission of applications is August 15, 2011, and the Closing Time for Submission of Applications is 17:00 hours Local Belgrade Time. Late applications will not be considered.

Section 1 – Funding Opportunity Description

Background

The United States Agency for International Development (USAID) has awarded a contract to Cardno Emerging Markets USA, Ltd. (formerly Emerging Markets Group, Ltd.) for the USAID Business Enabling Project in Serbia. The purpose of the Business Enabling Project is to help the Government of Serbia (GoS) improve the competitiveness of the Serbian economy and its private sector businesses. The overall objective is to assist GoS policy makers, business representatives, experts, and others to improve the business enabling environment and macroeconomic framework. The activity provides technical assistance and training to improve the business enabling environment, support macroeconomic stability, further develop financial markets, and improve and increase business and financial management capacities within government and business. The Business Enabling Project is made up of four components:

  1. Component 1 – Business Regulation and Economic Governance: Assist Serbia to improve its business regulation and economic governance, particularly in those areas where it performs poorly in international competitiveness and business environment rankings, so that it can better stimulate private sector growth and development and attract more foreign and domestic investment resources.
  2. Component 2 – Macroeconomic Policy and Public Financial Management: Assist the GoS and the National Bank of Serbia to improve macroeconomic policy, public financial management, and financial stability. Support efforts to improve GoS capacity to develop and implement fiscal policy.
  3. Component 3 – Financial Market Development: Support means to increase access to finance, including development of non bank financial institutions. Also, to support the development of Serbia’s capital markets through improvements in market governance, accounting and disclosure standards. Support Serbia in its efforts to reform accounting and audit standards and practices and assist it in implementing those reforms.
  4. Component 4 – Business-Education Partnerships: Support improvements in business management education in Serbia, through support to public-private partnerships with private businesses and universities in Serbia and the US, to improve and broaden curricula in business management faculties, support exchanges between Serbian and US university faculties and students, and foster closer relationships between business management facilties and businesses in Serbia.

The purpose of this RFA is to solicit applications to support the Project in the achievement of its program objectives. To accomplish reforms in each of these areas the Project will help the Government of Serbia work closely with the private sector and outside experts to make reforms that improve business competitiveness.

Grant activity Description

In the coming year, the Ministry of Finance (MoF), through the Macro Fiscal Department, will be required to undertake some important new activities that are essential for improving macroeconomic management, planning and meeting key EU accession requirements. These requirements include the development of a Fiscal Strategy and the development and publication of reliable, detailed, near and intermediate-term projections of the country’s structural deficit and GDP.

The demand for better economic forecasts is born out of the need to ensure that the Fiscal Strategy can be backed up by reliable projections of longer-term fiscal outcomes, but it is also a key requirement for EU accession candidacy. All countries must prepare regular projections of their structural deficit and explain how they applied the methodologies prescribed by the EU. These projections are central to the ensuring that countries are able to achieve the fiscal convergence requirements that are set out by the EU. Even without those requirements in place, they are important for economic planning and overall deficit management, key challenges in Serbia.

The MoF Macro Fiscal Department needs further capacity-building support to prepare the econometric projections that are needed in accordance with EU requirements. The MoF staff seeks training and on-the-job assistance to develop a framework and model for preparing credible projections. 

The central objective of this grant is three-fold:

- To help the MoF develop the methodology and modeling capacity to independently prepare reliable projections of the country’s structural deficit in line with EU requirements;

- To help the MoF prepare the analysis and written justification explaining the methodology and techniques used for the calculations;

- To help build institutional and human capacity in econometric forecasting.

Phase I Tasks

1) Base Training and Advisory on Deficit Forecasting

 Provide a series of on-site training and advisory sessions for a dedicated forecasting team within the MoF. These sessions should cover at least the following technical areas:

  • Construction of database. This should include statistical techniques for overcoming limitations (length and availability) of time series relevant to deficit forecasting.
  • Review of forecasting methodology and techniques for estimating potential economic output gap or trend GDP. This should include univariate and multivariate methods. The most frequently used univariate method is the Hodrick-Prescott filter, but other methods should be considered. The most frequently used multivariate method is the production function approach. This part should also include an overview of the relevant tools available on E-views, the statistical software interface that runs on Windows.
  • Review of methodology and techniques for estimating structural and cyclical balances.   This should include full coverage and advisory assistance on identifying and calculating   cyclical revenues and their corresponding bases, revenue cyclical component, trend levels of all relevant macroeconomic bases, revenues of category elasticity (including weighted average as may be required), expenditure classifications, cyclical expenditures and their corresponding bases, expenditures of cyclical component, the trend level of all the relevant macroeconomic basis, expenditure elasticities, sensitivity factors, and the relationship between these factors and the output gap.
  • Debt Sustainability Analysis. This should include adequate techniques for projections of variables affecting the public debt.    
  • Other technical topics relevant to the deficit projections (subject to available time and relevance to the assistance objectives). These may include ad hoc topics about how to apply certain statistical techniques, how to address data anomalies and bias, a review of various other methodologies and filters that could be applied to cross-check output and structural balance calculations, overview of other international practices, etc.

Reviewing and assessing the proposed framework for structural deficit projections as defined by the MoF

This includes reviewing the proposed methods, formulas, and techniques that will be used by the MoF and assessing their suitability for making proper projections.  The review should be comprehensive and include attributes such as any relevant adjustments that the MoF will use, proposed classes of irregular or non-recurring revenues and expenditures that are relevant to the Serbian context, the rationale for any special techniques or data proxies that will be applied, sources and time series of data, etc. The central aim of this task is to ensure that the MoF has defined a robust and defensible approach to structural deficit calculations and projections.

Phase II Tasks

3) Advisory Assistance to the MoF in developing an appropriate economic model with which to perform calculations and training.

This includes providing on-site assistance to MoF professionals charged with carrying out the development of a computer-based model and performing supporting calculations. This also includes providing assistance in defining how the model should be structured, how to apply the software tools available on E-view, and how to define select algorithms to be used in the model.

4) Written Guidelines for Preparing Structural Deficit Projections

This includes assisting the MoF in preparing written instructions on to carry out structural deficit calculations in line with the concepts that were presented in training and on-site advisory sessions. These guidelines should be sufficiently detailed so that MoF staff with suitable experience and skills can carry out calculations independently, without external guidance, and that calculations can be made consistently over time.

The guidelines should also provide explanations of key components of the methodology and justification of why certain techniques were applied, if those techniques were subject to discretion by the MoF and/or could be challenged or questioned by policymakers or other stakeholders.

Phase III Tasks

5) Assistance with preparing a pilot projection on the structural deficit

The grantee shall assist the MoF in determining assumptions (demographic, economic, policy), projecting expenses, revenues, assets and liabilities, presenting projections as scenarios, preparing an initial pilot calculation of the structural deficit applying both the agreed upon methodology and econometric model. The consultant will provide advisory assistance to help the MoF perform calculations of trend GDP and the output gap, cyclical components of revenue and expenditures, and to address technical issues/constraints that arise in the process. This assistance should be advisory in nature, and the consultant should only guide how to execute supporting calculations and review their use in deriving deficit projections.

The consultant will review the pilot results and provide recommendations for improvement if needed.

6) Review and assessment of the official proposed projection of the structural deficit

If necessary, the consultant will review the results of the official calculation of the structural deficit prepared by the MoF and make recommendations as needed. This review should only be used for MoF staff development purposes, and should not be made public or construed as a formal endorsement or rejection of the projection.
 
The review should highlight any issues, methodological or otherwise, that should be considered by the MoF when making the projections public. This could include, for example, highlighting aspects of the approach that could be challenged or require special clarification.

Deliverables

In addition to the advisory inputs, specific work products to be developed by the grantee include:

  • Formal training and training materials.
  • Written guidelines on how to carry out structural deficit calculations and approach justification.
  • Inputs (algorithms, formulas, data format recommendations, etc.) for the development of a computer model.
  • A pilot projection of the structural deficit.
  • A written review and assessment of the proposed official structural deficit projection.
  • A final report on the work performed and results achieved.

Section 2 – Award Information

Subject to the availability of funds, the Project intends to provide between 2 to 3 million RSD in total funding to be allocated over a six month period. The anticipated period of performance of the grant is expected to begin in September 2011. The Project anticipates awarding one Fixed Obligation Grant under this RFA. Under a Fixed-Obligation Grant, all payments will be a fixed-sum payable upon completion of deliverables, which will be defined in detail during grant agreement negotiations.

Section 3 – Eligibility Information

Eligible organizations shall be able to comply with and achieve the proposed Program Description, Tasks, and Results and have a satisfactory performance record and record of integrity and business ethics.
Eligible organizations include legally registered Serbian non-for-profit, for-profit, and non-governmental organizations (NGOs).
Prior to the award of grant under this RFA, successful Applicants will be required to sign a Certification Regarding Terrorist Financing certifying that the Applicant’s organization does not provide and has never provided assistance to terrorists for terrorist activities. Successful Applicants may also be required to sign other Certifications as applicable to the award. The Certifications are attached as Annex 1 of this RFA.
Ineligible organizations include:

  • Public International Organizations;
  • Entities that have misused USAID funds in the past, organizations that advocate, promote or espouse anti-democratic policies or illegal activities;
  • Political parties or institutions;
  • Organizations that intend to use the grant for religious objectives;
  • Organizations that are on the list of parties excluded from federal procurement and non-procurement programs or the United Nations Security Sanctions Committee.

Section 4 – Application and Submission Information

Applicants should submit applications in writing to: Zorana Gajic electronically, via email at grants@bep.rs The Closing Date for submission of applications is August 15, 2011, and the Closing Time for Submission of Applications is 17:00 hours Local Belgrade Time. Late applications will not be considered.

All applications in response to this RFA shall consist of a technical proposal and a budget proposal. The technical proposal must not be longer than 15 pages in length. Pages submitted in excess of 15 pages will not be reviewed. The cost proposal (budget) shall be submitted as a separate file from the technical proposal. The required format for applications is included as Annex 2 - Full Application Form and Annex 2A – Budget Form.

Section 5 – Application Review Information

Applications will be evaluated in accordance with the criteria set forth below. The criteria have been tailored to the requirements of this RFA. Applications should note that these criteria serve to: (a) identify the significant matters which Applicants should address in their applications; and (b) set the standard against which all applications will be evaluated.
To the extent necessary, the Project may request clarification and supplemental materials from Applicants whose applications have a reasonable chance of being selected for Award. The entry into discussion is to be viewed as part of the evaluation process and shall not be deemed as indicative of a decision or commitment upon the part of the Project to make an award to the Applicants with whom discussions are being held.
Applications will be evaluated by the Grants Selection Committee on the basis of 100 possible points. The weighting of various sections will be as follows:

Category

Maximum Points (100 Total)

Understanding of Key Issues
Grant Activity Goals, Objectives and Methodology
Sustainability of Outcomes / Expected Results
Proposed Tasks and Activities
Staffing/Management Plan
Relevant Past Experience and Performance
Cost Realism
Total Possible Points

10
10
25
15
20
10
10
100

  1. Understanding of the Key Issues (10 points): Does the applicant demonstrate a clear understanding of the problems/key issues that the proposed grant activity will address?
  2. Grant Activity Goals, Objectives and Methodology (10 points): Is the overall goal of the proposed grant activity clearly stated and achievable? Does the applicant list specific objectives that will contribute to achieving the grant’s goal? Is the proposed methodology suitable for this kind of assessment?
  3. Sustainability of Outcomes / Expected Results (25 points): Do the expected results of the proposed grant activities relate to the key issues and overall grant objective? Are anticipated results directly linked to a specific objective? Are the results verifiable?
  4. Proposed Tasks and Activities (15 points): Does the applicant propose specific activities that are logical, realistic, and relevant to the grant activity’s goal?
  5. Staffing/Management Plan (20 points): Does the proposed staffing/management plan reflect the personnel/management needs of the grant activity? Does the applicant propose personnel with experience and skills necessary to successfully implement the proposed activities?
  6. Past Experience (10 points): Does the organization have relevant past experience successfully implementing similar activities?
  7. Cost Realism (10 points): Is the proposed budget realistic, well-though out, and in-line with the proposed activities? Are the proposed costs reasonable, allowable and allocable to the grant? Is the grantee contributing cost-share or providing in-kind support?

The selection of the Applicant for award will be made by the Project’s Grant Selection Committee. Prior to the award of any resultant grant agreement, the Project must obtain prior approval from USAID.

Section 6 – Award and Administration Information

Before the applications’ specified expiration date, successful applicant(s) will receive written notice from the Grants Manager informing the applicant(s) that the Project either intends to award a grant to the applicant without negotiation, or that the Project intends to engage the applicant(s) in further negotiations with respect to a potential grant award. Negotiations conducted after the receipt of an application do not constitute an obligation on the part of the Project to award a grant. Unsuccessful applicants will be notified in writing by the Grants Manager.
Any resultant award will be subject to the terms and conditions of the Prime Contract for the USAID Business Enabling Project (for US organizations: 22 CFR 226, OMB Circulars, and the Standard Provisions for U.S. Non-governmental Recipients; for non-US organizations: Standard Provisions for Non-U.S. Non-governmental Recipients).

Section 7: Annexes

Annex 1: Certifications
Annex 2: Full Grant Application Form and Budget Form

 

 

 








News

14.08.2017 - New Real Estate Registration Bill Introduces Efficient Registration and Higher Level of Legal Security in Serbia

11.08.2017 - For Stronger Ethics and Integrity in Inspection Oversight

>>> News archive <<<
 
 



Business Regulation
and Economic Governance
     

Grants
 

Monitoring & Evaluation