REQUEST FOR APPLICATIONS (RFA)

FOR A STUDY ON PRIVATE DOMESTIC SAVINGS

Issuance Date: January 16, 2012
Deadline for Receipt of Questions: January 24, 2012 by 18:00 CET
Closing Date/Time for Submission of Applications: January 30, 2012 by 18:00 CET

SUBJECT: Request for Applications (RFA) Number: RFA-2011-06-R2

The USAID Business Enabling Project 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 US, Serbian, or a third country non-profit, for-profit, and non-governmental organizations (NGOs) for a grant to conduct a study on Increasing Private Domestic Savings for Serbia’s Economic Growth.
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 up to 1,850,000 RSD (Serbian dinars) in total funding to be allocated over a four 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 January 24, 2012, by is 18:00 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 January 30, 2012, and the Closing Time for Submission of Applications is 18:00 hours Local Belgrade Time. Late applications will not be considered.

 

Section 1 – Funding Opportunity Description

A. 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 Project 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 three 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, 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.

This RFA is for a grant that will help meet the Project’s objectives in Component 2.

 

B. Grant activity Description

Problem Statement

Over the last decade, foreign sources, in the form of FDI and cross-border loans, and public funds financed a significant share of business investment in Serbia. These sources are not likely large enough - or sustainable enough - to finance future economic growth in the current fiscal and business environment.  Foreign capital inflows have declined considerably since the financial crises began, and there is no indication they will revert to previous levels or, even then, drive a recovery.  Moreover, much of the investment was made in the services and financial sectors.  Only a small portion has gone into job-creating, export producing industry or infrastructure - key parts of the growth model Serbia must adopt to improve living conditions and lead the country to competitiveness in the EU market - fundamental to the Copenhagen criteria for accession.

The “Serbia Post Crises Economic Growth and Development Model 2011-2020” which was produced by a consortium of leading economists and funded by USAID, set out ambitious requirements for growth in investment in tradable goods production that will need to be somehow financed.  Most economists agree that Serbia cannot rely solely on foreign savings, and public borrowing is reaching a critical limit.
Domestic private savings (i.e. from households and enterprises) will play a critical role in financing the new investment needed to achieve macroeconomic adjustment and re-industrialization.  Improvements in the mobilization of domestic savings will be necessary to ensure long-term sustainability of any growth scenario.

However, private domestic savings rates are low in Serbia. They have been well below the savings rates in comparable countries, even countries in Central and Eastern Europe that may require less economic adjustment in the post crises environment.   Serbia has a reasonably developed infrastructure in place for mobilizing savings – in the form of a well-located banking system, investment and pension funds, an insurance industry, etc. – and it benefits from sizeable remittance flows from diaspora and migrant workers.  However, it is unclear why savings rates are so low?  The differing savings behaviors of the household and enterprise sectors have not been adequately analyzed, so policies to increase their savings rates have not been developed.
To realize the growth projections set out by the Government for the next 10 years, it is estimated that total savings will need to increase by 100 percent from current levels. Domestic private savings will likely need to make up the great majority of this increase.  More information is needed on domestic savings patterns and savings potential to identify what can and should be done to realize these results.

Purpose and Objectives

The USAID Business Enabling Project is seeking to undertake a policy-focused study of private domestic savings in Serbia.  The principal purpose of the study is to provide a statistical and analytical basis for developing policies to increase domestic savings in Serbia.

Guidelines for Study Preparation

The study should cover the following major elements of savings available for finance in Serbia:

  • The composition of savings by category of saver / source; its patterns and historical trends
  • The principal determinants of these savings, by category of saver
  • Expected future trends in savings by sector/category; alternative possible scenarios; the potential for mobilizing increased savings
  • Areas for policy attention in order to achieve maximum potential growth in domestic savings.

The study should be based primarily on quantitative data and estimates, where necessary, and projections from relatively simple models. 
In evaluating savings rates, the grantee should take into consideration a wide range of classical determinants of savings including, but not limited to, variables such as:  income levels and distribution, inflation, demographics, rates of return, borrowing conditions, risk premiums and confidence, financial system access, fiscal policies, wealth effects, the pension system, terms of trade, etc. Informal savings and their sources need to be estimated.   All variables that are deemed to have some statistical relevance or that at least can be justified as worthy of consideration, should be included and their impact evaluated.   Information should be presented in terms of aggregate savings, sectoral savings (savings in the household and enterprise sectors), as well as different sub-sectors of households and enterprises.   Grantees should propose a sectoral classification structure that is relevant to the objectives of the study and suitable for the available data.

The grantee should consider the composition of savings within a variety of parameters, such as by tenor, currency, type, etc.  The grantee should also consider intra- and inter-sectoral relationships that may have some explanatory value.  For example, such a relationship may be evident among households that run small businesses or among small businesses that are informally financed by relatives and friends.

Deliverables

The grantee is expected to produce a comprehensive report covering the above topics in Serbian and English that is organized in a logical way and can be comprehended by readers with a basic understanding (undergraduate degree) of economics.  The report should be of a quality that is publishable. 

The grantee should provide transcripts and sources of data used for the analysis, as well as any models and analysis that were produced through the study. Notwithstanding any use or disclosure limitations imposed on the grantee by third party data providers, USAID BEP will reserve the right to post the data on its website or use it for other research.

The following are the specific deliverables, which will also serve as milestones for Fixed Obligation Grant disbursements:

 

Deliverable / Milestone

Estimated Timing

Initial outline of the report (to be reviewed and approved by BEP before further work)

March 1, 2012

Major part-by-part drafts of report, for review, discussion, and comment by BEP

Between April 1. and May 31, 2012

Final Study

June 30 2012

 

Section 2 – Award Information

Subject to the availability of funds, the Project intends to provide up to 1,850,000 RSD (Serbian Dinars) in total funding to be allocated over a four month period. The anticipated period of performance of the grant is expected to start from February 2012. 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 US, Serbian, and third country 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 January 30, 2012, and the Closing Time for Submission of Applications is 18:00 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 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
Methodology, Activities and Outcomes
Staffing/Management Plan
Relevant Past Experience and Performance
Cost Realism
Total Possible Points

10
40
20
10
20
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? Are the overall goal and objectives of the proposed grant activity clearly stated and achievable?
  2. Methodology and Activities (40 points): Is the methodology to conduct the study clear? Are the activities stated in detail?  Are the expected outcomes and impacts stated in detail?  Does the applicant demonstrate how the activities will obtain the desired results? 
  3. 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?
  4. Relevant Past Experience and Performance (10 points): Does the organization/consortium have relevant past experience successfully implementing similar activities?
  5. Cost Realism (20 points): Is the proposed budget realistic, well-thought 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

 

 

 








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