REQUEST FOR APPLICATIONS (RFA)

FOR STUDY AND RECOMMENDATIONS ON POLICIES TO INCREASE EMPLOYMENT AND WORKFORCE COMPETITIVENESS

Issuance Date: March 28, 2012
Deadline for Receipt of Questions: April 12, 2012 by 17:00 CET
Closing Date/Time for Submission of Applications: April 18, 2012 by 15:00 CET

SUBJECT: Request for Applications (RFA) Number: RFA-2012-02

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 develop a study and recommendations on policies to increase employment and workforce competitiveness in Serbia, including an examination of labor flexibility, costs, and productivity, and the legislative framework for employment and labor relations. Organizations are encouraged to form consortia to provide the necessary expertise.

The Successful Applicant will be responsible for ensuring achievement of specified grant objectives.

This RFA consists of the following sections:

  • Section 1 – Funding Opportunity Description
  • Section 2 – Award Information
  • Section 3 – Eligibility Information
  • Section 4 – Application and Submission Information
  • Section 5 – Application Review Information
  • Section 6 – Award and Administration Information
  • 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 3,000,000 RSD (Serbian dinars) in total funding to be allocated over a six month period.

When developing the proposed budgets, bidders should consider the evaluation criteria, which puts 25% weight on Cost Effectiveness.

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.

Organizations are strongly encouraged to form consortia to prepare responsive applications to this RFA.  A consortium should be represented by a prime applicant that will submit the application on behalf of the consortium.

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 April 12, 2012, by 17:00 hours Local Belgrade Time. No questions will be accepted after this date.

Applicants should submit applications in writing to: Jasmina Debeljak Maljkovic, electronically, via email at grants@bep.rs. The Closing Date for submission of applications is April 18, 2012, and the Closing Time for Submission of Applications is 15:00 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.

The Project’s activities are described in more detail on the Project’s website: www.bep.rs

To accomplish reforms in each of these areas the Project helps the Government of Serbia work closely with the private sector and outside experts to make reforms that improve business competitiveness.

The Project plans to work with the private sector and Government of Serbia to improve labor policies, including the Labor Law. In surveys, studies, roundtables and other forums, businesses consistently state that labor legislation and costs negatively impact their competitiveness. The current legislation and costs also discourage employment and tend to limit productivity. The purpose of this RFA is to solicit applications to support the Project by completing an in-depth study of policies to increase employment and workforce competitiveness in Serbia, including an examination of labor flexibility, costs, and productivity, and the legislative framework for employment and labor relations. The study should provide a roadmap and action plan for policy and legislative reforms that should be made by the Government.

 

B. Grant activity Description

Problem Statement

The Project works directly with the Government of Serbia, independent experts, business associations, and donor programs to develop and implement business environment, economic policy and financial sector reforms that will enable Serbian firms to compete in domestic and international markets. In the area of business environment reform, the Project’s tasks include improving the policy environment for employment. 

Text Box:  	WAP employment rate 	Unemployment rate   Serbia	45.3%	24.4%  Bulgaria	58,6%	10,2%  Bosnia and Herzegovina	29.8%	28,2%  Croatia	52,4%	17,9 %  Hungary	50.4%	10.6%  Macedonia	48.1%	31,3%  Romania	59.1%	7,2  EU 	68.6% 	9,8%
In Serbia, labor policies, including legislation, employer tax and social contributions, and labor relations, negatively impact firms’ competitiveness and are among the causes of high unemployment and low productivity.

Unemployment is probably the biggest social and economic problem that Serbia faces.  The unemployment rate is 24.4% and the employment rate for 18 to 64 year olds is 45.3%; these figures are worse than neighboring countries and much worse than EU economies.  Employment levels in Serbia are especially low among young and older citizens. Employment rates are highest for persons between 35 and 49 and are lowest for those in their twenties and over fifty. 

While the reasons for these figures include macroeconomic and regulatory problems, labor policies are exacerbating the situation and making it difficult and costly to hire and lay-off employees.  Recent GoS efforts to increase employment, mainly through subsidies, have had little effect.

Current labor policies also hinder productivity, as flexible work and pay arrangements are limited by the legal framework.  Serbia’s workforce lags behind the figures for the countries in the region. The Serbian workforce appears to be uncompetitive in the region when productivity is put in the context of wages – labor costs in Serbia per unit of goods or services produced are highest among countries sampled in the World Bank Country Economic Memorandum.

The regulatory, administrative and financial burdens related to labor and employment procedures and requirements include: taxation of wages and social security contributions, calculation of salary, salary compensation, temporary work, severance, duration of notice of termination, occupational health and safety, and labor inspection surveillance.  There are a number of labor and employment areas that are not regulated in a clear and precise manner, so they remain in the “regulatory grey zone” (e.g., employee leasing), while others are regulated by obsolete regulations (e.g., labor relationship of a foreigner).  It is not surprising that USAID BEP’s 2011 Standard Cost Model study found that the third most costly procedure is labor administration.  And payroll taxation is widely perceived as a big impediment to employment.  In BEP’s Survey of Businesses, 96% of firms say wage taxes and contributions have a negative impact on their business (see www.policycafe.rs/english/documents/business/in-touch-with-business/business-survey-2011executive-summary-USAID-BEP-11-16.pdf). Informal work (“grey and black labor market”) is pervasive (up to million people, according to various surveys), and it is expected to increase.  Furthermore, dialogue between social partners – the GoS, employers (through associations), and employees (through trade-unions) – is underdeveloped. 

Other issues that will not be the subject of this study (but should be discussed to the extent they are related to the subjects covered in the study) include: insufficient adult education and training; and active labor market policies.  

Labor policy reform is a difficult political issue, so a sound analytical basis is necessary to convince policymakers, stakeholders, and the public that such reform will increase employment and improve competitiveness.  The reform effort will require an informed dialogue between the GoS, trade unions, and employers.  The current Government attempted to introduce reforms to the Labor Law, using the Economic and Social Council as a mechanism for dialogue.  Unfortunately the effort stalled in the Economic and Social Council and it appears that the current Government will not succeed in making even the most fundamental necessary reforms (e.g. elimination of the requirement to pay severance based on an employee’s entire work history).

 

Grant Activities

The Business Enabling Project intends to award a grant to a qualified organization to develop an in-depth study of policies to increase employment and workforce competitiveness in Serbia, including an examination of labor flexibility, costs, and productivity, and the legislative framework for employment and labor relations. The study should provide a roadmap and action plan for policy and legislative reforms that should be made by the Government.

The objective of the grant is to provide practical recommendations for policy reforms that are supported by rigorous research and analysis.  The draft recommendations will be vetted with the business community and the final recommendations will be presented to the Government and publicized in the media.

The World Bank Country Economic Memorandum 2012 (CEM) provides excellent background for the study.  In addition, we believe that the CEM provides a sufficient set of recommendations relating to the mismatch between skills taught in schools and the needs of the labor market, insufficient adult education and training, and active labor market policies. The CEM analysis and recommendations should be included in the study to the extent that it is relevant to the objectives and tasks.  However, bidders should propose additional work in these areas if they believe it to be necessary.

It is expected that the grantee will be able to accomplish the following tasks during the six month grant period:

 

I. Assessment of the major labor policy obstacles that limit employment and competitiveness

The grantee should use desktop research to determine the labor policy issues that are causing businesses to lose competitiveness and forgo employing workers. Sources include the World Bank CEM, the Foreign Investors Council White Paper, the USAID BEP Standard Cost Model Study, and the USAID BEP Survey of Businesses 2011.  The grantee should analyze the data on employment and unemployment, and labor costs and productivity in Serbia, including differences between genders and age groups, regions, and industry sectors, as well as trends in recent years.  The grantee should also consult with major business associations to identify the problems their members are facing, as well as labor unions to understand their positions on reforms. Bidders should consider any additional primary research (e.g. survey, roundtables, focus groups, data gathering) that needs to be conducted to identify the significant issues and should propose such research with rationale in their responses to this RFA.

The grantee should also analyze the economic costs of these issues and the economic benefits that would accrue from reforms. This includes impact on employment, unemployment, economic growth, and productivity. 

The grantee should also consult with the Ministry of Labor and review the Ministry’s existing draft of Labor Law amendments.

This assessment should provide a list and prioritization of the issues that the grantee will analyze as well as preliminary data and analysis relating to those issues.

The issues to be covered by the study will include, but are not limited to:

  • Flexibility and labor policy issues that impact various forms of flexibility
  • Productivity and labor policy issues that impact the productivity of employers
  • Labor law issues including temporary work, severance, duration of notice of termination
  • Labor costs, including salary compensation, taxation of wages and social security contributions
  • Regulatory costs, including paperwork relating to employment, occupational health and safety, and labor inspection surveillance
  • Employment relations, including collective bargaining agreements
  • Government stimuli for employment, including subsidies and incentives
  • Informal employment and its causes and impacts
  • Unemployment benefits and their impact on employment and unemployment.

In their proposals, bidders should describe how they will conduct the assessment.

 

II. Benchmarking

The grantee should compare Serbia with other countries in Europe, including neighboring countries.  This benchmarking should include statistics on employment, flexibility, costs, and productivity of the work force, as well as policies in the areas identified in the assessment phase.

In their proposals, bidders should describe how they will conduct the benchmarking exercise.

 

III. Analysis of the Problems

The grantee should provide an in-depth analysis of the major problems in labor policy that are hurting competitiveness, discouraging employment, and otherwise negatively impacting the economy. The issues should include those identified in the assessment phase. The grantee should consider both the written laws and bylaws, as well as implementation issues and procedures actually used.

In their proposals, bidders should describe how they will analyze the problems, including methodology for economic and legal analysis.

 

IV. Recommendations for Reforms

The grantee will develop detailed recommendations for reforms.  The recommendations should be supported by the analysis of the problems described above. The grantee should also provide an analysis of the impacts of the proposed reforms in terms of employment, productivity, costs, and if possible economic growth.

The recommendations should include a “road map” of reforms, i.e. a description of the actions that need to be taken in stages and milestones and results. The recommendations should lead to an action plan that sets forth all activities that need to be taken in order to accomplish the recommended reforms.  The action plan should include realistic timing for each action and who should be responsible, as well as milestones and/or indicators for the success of the actions.

In their proposals, bidders should describe how they will develop the recommendations.

 

V. Draft Report

The draft report should include all of the research, analysis and recommendations described above, as well as a clear and concise roadmap and action plan for the Government to use in developing and enacting policy and legal reforms.  USAID BEP will work with the grantee to vet the report with the business community.

The grantee should use input from the business community and other stakeholders to finalize the report. It will then be published in a form agreed on between the grantee and USAID BEP.

In their proposals, bidders should describe their proposed format and outline of the report.

 

VI. Outreach

The grantee will work with USAID BEP to publicize the study.  This will include a conference or roundtable, media interviews and press releases, posting on websites, and other means to disseminate information about the study and recommendations.  The grantee will also prepare a short Policy Note for the www.policycafe.rs web site.

Bidders should include time for their participation in outreach activities in their cost proposal/budget. However, organizational and logistical costs for outreach will be paid for by USAID BEP outside of this grant.

 

Deliverables

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

Deliverable / Milestone

Estimated Timing

1. Initial outline of the report with list and prioritization of the issues that the grantee will analyze (to be reviewed and approved by BEP before further work)

June 11, 2012

2. Draft Report

July 2, 2012

3. Final Report, and Policy note to be posted on www.policycafe.rs

August 1, 2012

4. Outreach Activities

September 3 to October 31, 2012

 

Staffing

Bidders should propose a multi-disciplinary team, including a labor law expert and labor economist.  Bidders should also consider including a human resources expert on the team.  Bidders should also demonstrate how the team and the study will be managed.

 

Section 2 – Award Information

Subject to the availability of funds, the Project intends to provide up to 3,000,000 RSD (Serbian Dinars) in total funding to be allocated over a six month period. The anticipated period of performance of the grant is expected to start from April 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, governmental and non-governmental organizations (NGOs), including educational and training institutions.

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 2 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 of Information

Applicants should submit applications in writing to: Jasmina Debeljak Maljkovic electronically, via email at grants@bep.rs. The Closing Date for submission of applications is April 18, 2012, and the Closing Time for Submission of Applications is 15:00 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 1 - Full Application Form and Annex 1A – 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 Effectiveness
Total Possible Points

10
20
30
15
25
100


  • 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? What are the major problems in labor policy? What outcomes should the study generate?
  • Methodology and Activities (20 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? Does the applicant provide innovative and practical ideas to address the issues?
  • Staffing/Management Plan (30 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?
  • Relevant Past Experience and Performance (15 points): Does the organization/consortium have relevant past experience successfully implementing similar activities?
  • Cost Effectiveness (25 points): What resources are provided for the proposed cost?  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: Full Grant Application Form and Budget Form
Annex 2: Certifications

 

 

 







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