Request for Application (RFA) Request for Application (RFA) Number: RFA Improving Competitiveness of Immortelle Production and Processing

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1 Request for Application (RFA) Issuance Date: Deadline for Receipt of Questions: Closing Date/Time for Submission of Applications: SUBJECT: Request for Application (RFA) Number: RFA Improving Competitiveness of Immortelle Production and Processing USAID/Sweden Fostering Agricultural Markets Activity II (the Activity), a United States Agency for International Development (USAID) and the Government of Sweden-funded activity, is seeking applications from qualified, legally registered BiH non-profit, for-profit, and nongovernmental organizations (NGOs) for a grant award to implement activities on Improving Competitiveness of Immortelle Production and Processing. The applications must be received no later than Applicants must meet the requirements of eligibility for this Request for Applications (RFA). This RFA solicits grant applications to support sustainable economic growth, employment expansion, increased sales and exports, increased household incomes in Bosnia & Herzegovina and increased potential to meet EU standard requirements. The Project invites eligible producer organizations to submit applications for Improving the Competitiveness of Immortelle Production and Processing. Information session for this RFA will be organized on at 11:00 in Mostar (location to be decided). Any change of the time/location will be communicated via project website, and directly via to registered participants. If interested to participate, please RSVP no later than 11:00 AM on Attendance at this session is strongly recommended. You are invited to submit an application for Improving Competitiveness of Immortelle Production and Processing. The grants will be awarded and implemented in accordance with U.S. government regulations governing grants under contracts and the Activity s internal grant management policies. The Successful Applicant will be responsible for ensuring achievement of specified grant objectives. Please refer to Section 1 Funding Opportunity Description for a complete statement of goals and expected results. This RFA consists of the following sections:

2 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 Authority/Governing Regulations 8. Section 8 Annexes Pursuant to 2 CFR 200 Subpart E and 2 CFR , 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 2 CFR 200 Subpart E for non-profit organizations and educational institutions, and the Federal Acquisition Regulation (FAR) Part 31 for for-profit organizations), may be paid under the Award. The Activity 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 Activity, nor does it commit the Activity to pay for costs incurred in the preparation and submission of an application. Further, the Activity reserves the right to reject any or all applications received if such action is considered to be in the best interest of the U.S. 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 via at grants@farmabih.ba. The deadline for receipt of requests for clarifications / explanations is No questions will be accepted after this date. Applicants should submit applications in writing to the one of following addresses: USAID/Sweden FARMA II Sarajevo Fra Anđela Zvizdovića 1B/18 USAID/Sweden FARMA II Tuzla, Maršala Tita 34A/III USAID/Sweden FARMA II Banja Luka Prvog Krajiškog korpusa bb USAID/Sweden FARMA II Mostar Kneza M. Viševića Humskog 11 In addition applicants should submit applications electronically, via at grants@farmabih.ba. The Closing Date for Submission of Applications is and the Closing Time for Submission of Applications is 04:00 PM local BiH Time. Late applications will not be considered. RFA Increasing Competitiveness of Immortelle Production and Processing Page 2

3 Section 1 Funding Opportunity Description Background: The USAID/Sweden Fostering Agricultural Markets Activity II (FARMA II) in BiH is funded by the United States Agency for International Development (USAID) and the Government of Sweden. The purpose of USAID/Sweden FARMA II is to create agricultural and agribusiness opportunities by assisting producer organizations to adopt EU and international standards to produce new products and expand market access and to assist BiH to implement food and agricultural regulations that meet international requirements. The Activity will create agricultural and agribusiness economic opportunities for BiH citizens by assisting agricultural producer organizations in adopting the European Union (EU) and international food standards and new production techniques, producing new high value products, and expanding market access. USAID/Sweden FARMA II s methodology of working with private and public sector stakeholders to identify market failures will ensure that the Activity team remains focused on addressing the root problems inhibiting competitiveness. The project team will collaborate with numerous partners and business development service providers (BDSPs) to build their capacity to introduce ownership and provide sustainability within an indigenous ecosystem of BiH organizations. Program Description: I. Background on the specific grant activity Application of Medicinal and Aromatic Plants (MAPs) worldwide is multiple; food industry, cosmetics, body care, and the most important one, the application in pharmacy. This caused increased demand for MAPs, especially in western European countries. This trend resulted in increased pressure on natural resources. The largest threat for MAPs population is overharvesting and habitat deprivation, including conversion of land plots to other purposes. Increasing demand of plants and their habitats are threatening many species that are being collected from the wild. Thus, cultivation of MAPs is a viable alternative source of MAP raw material and a feasibile diversification strategy for many small-scale farmers as demand for these MAPs is high, trade opportunities are increasing and the income generation potential is good. Growing of herbs have better returns than the so-called traditional agricultural crops, as their demand has been growing much faster and they are generally not as over-produced as some traditional crops, which renders their prices higher. Although cultivated plants often do not have the characteristics of wild ones, some species are cultivated in relatively high quantities with the aim to satisfy growing demand. The difference in characteristics could be avoided by using seeds from nature instead of planting cultivars with different characteristics. Immortelle is one of the plants which was, due to large market demand, over-exploited and endangered in its natural habitat. Immortelle (Helychrisum italicum) is a Mediterranean plant, native in Herzegovina area. Its essential ois is highly valued in pharmaceutical and cosmetic industry. Immortelle essential oil is very expensive, as it takes between 350 and 1000 kg of fresh plant material to produce 1 kg of essential oil, depending on the plant quality and distillation technology. Due to huge market demand, the price for fresh plant material tripled during last few years, with an average price of 3 KM during 2016 harvesting season. Huge market demand, lack of raw material in nature and excellent buy up price triggered mass cultivation in the area of Herzegovina. It is estimated that Immortelle is cultivated on over 1000 ha in Herzegovina, providing incomes to few hundred people, with tendency to continue to grow significantly. Although initial costs of planting (including very costly land preparation) are relatively high RFA Increasing Competitiveness of Immortelle Production and Processing Page 3

4 depending on the type of the soil, it pays off over years of exploitation (Immortelle can be exploited during 8 years). Although it is expected that the market price of fresh plant material will decline as the offer in the market grows, it is still economically viable to grow immortelle. Excellent essential oil price in the international market and great market demand initiated huge investments, mostly by the new entrants in the MAPs business with no experience in agriculture, as well as involvement of huge number of small farmers. Therefore there was almost no plan in designing the capacities of i.e. distillers or harvester, to accommodate the needs of plantations. This was evident during the harvesting season, when it was obvious that installed distillation capacities are not sufficient to cover the needs. As immortelle plantations are on average 2 years old and the full yield is expected in the third year, the problem will be even more evident during the next and following years, if the distillation and harvesting capacities do not increase. Apart from insufficient processing capacities, there is an issue related to the lack of awareness on the importance of ecological production, especially among small farmers. Immortelle essential oil is mostly used in the production of drugs by pharmaceutical companies or the production of cosmetics which require standardized products of guaranteed or known content and quality. These quality requirements are becoming increasingly important as drug regulations become more stringent in many countries. Promotion of organic or ecological production is therefore of outmost importance. If it happens that a foreign buyer finds chemical residues in the immortelle essential oil, this may cause generalized loss of credibility of immortelle and other essential oils coming from BiH, directly influencing the price of all products coming from BiH. This would have enormous consequences, having in mind the investments in the MAPs industry during the last several years as well as a number of people that are engaged in the production and processing. Therefore, education of small farmers and promotion of good agricultural practices, as well as organic and ecological production is critical issue in the immortelle industry. Lack and the poor quality of planting material is another issue; there are very few registered producers of planting material. Most of planting materials are produced by illegal producers, where the production is not under control. This planting material could potentially be contaminated and therefore create problems not only to those using it, but also to the others within the value chain. Also, it is noticeable that some of transplants producers are importing seeds to produce transplants from neighboring countries (i.e. Croatia) which have slightly different characteristics than indigenous Herzegovinian seeds. In this way they are directly influencing the loss of recognizable characteristics of immortelle essential oil that is originally coming from Herzegovina. It is, therefore, of outmost importance to support establishment of registered and controlled nurseries, which will guarantee diseases free planting material that originates from Herzegovina. Most of the essential oils produced are exported in bulk and are used as an ingredient in cosmetics, aromatherapy or in pharmacy, and very often are repackaged into small bottles (5 10 ml) and sold for at least three times higher price in the international market. The value of export of essential oils almost tripled during the last five years. Most exported essential oils are immortelle, sage, savory, juniper berry, chaste tree, lemon balm, mint, pines. As immortelle essential oil does not have separate export tariff code, it is difficult to estimate the value of export for only this oil. The total value of export of essenital oils in 2015 was 3,208,561 KM. If we consider the size of immortelle plantations and compare this with quanities of other plants that are cultivated and RFA Increasing Competitiveness of Immortelle Production and Processing Page 4

5 collected, it is reasonable to estimate that more than half of the export value of essential oil that is exported, is the one of immortelle. Having in mind that most of plantations will come to full yield during next and the following year, it is expected that the export of essential oils from BiH will increase significantly, and immortelle will surely be the most exported one. Only a small portion of BiH MAP production and processing are final products, such as creams, tinctures, herbal teas and mixtures, natural soaps, herbal remedies, food, mostly sold in the domestic market. Increasing demand for natural products at the local level shows that there is great potential to increase production to satisfy the local market. Currently, there are at least 20 POs in BIH that are seriously involved in this production, producing excellent quality products according to Good Practices. These products are present in the local shops, but very often, due to obsolete technology used in production, they are not competitive to imported products. In order to be able to respond to positive market trends and to use the opportunities, it will be necessary to upgrade the production of transplants and raw materials, to work on the education of producers, to increase processing capacities as well as to stimulate the production of final immortelle based products and usage the plant waste material after distillation (i.e. production of compost, hydrolates, pellets etc.) II. The purpose, goals and objectives of the activity The purpose of this RFA is to solicit applications to support the Activity in the achievement of its program objectives. Specifically, the purpose of this activity is to strengthen MAPs value chain and to increase the processing capacities, as the sector is mainly oriented for export markets. Also, the purpose of this activity is to support interventions in Immortelle production which will lead to improved production efficiency and profitability both for producer organizations and farmers, implementation of good agricultural practices and improved overall competitiveness for the all participants of value chain. The objectives of this activity are listed below: Preservation of wild plants through increased cultivation of immortelle; Increased cultivation of immortelle to provide greater control over the quality and quantity of plant materials as well as to provide opportunities for increased employment of farmers; Promotion of environmentally sustainable farming in compliance with the Code of Good Agricultural Practices; Increased competitiveness of immortelle essential oil by improving production and processing in order to reduce costs and improve product quality; Increased production of natural final products in line with the increasing demand and support to their better positioning in the local market, as well as created opportunities for export of final products; Initiated activities to incorporate climate change adaptation and risk reduction strategies into appropriate actions and promote environmental best practices; Increased competitiveness of the MAP Sector by improving yields, production and processing a good quality produce, according to EU Standards; RFA Increasing Competitiveness of Immortelle Production and Processing Page 5

6 Improved marketing, packaging and branding of final products, which will lead to better positioning in the market; Controlled production of immortelle transplant material, originating from Herzegovina; Facilitation of export of immortelle essential oil and final immortelle based products; Introduction of new technologies to increase the quality and quantity of immortelle transplants, fresh plant material, essential oil and final products; Introduction of new technologies in using waste material after distillation according to best environmental practices; III. Expected results It is expected that applicants will increase productivity and profitability at the farm level and further throughout the value chain. Therefore, further increase in production and processing of Immortelle in Herzegovina region is expected and in parallel new market opportunities explored in order to secure safe placement of produced goods. However, ultimate results will encompass: New investment in the MAPs value chain in BiH; Applied new technologies that improve quality and quantity of transplants, raw material and essential oil; Increased production and exports of final products based on immortelle and other MAPs; Increased exports of immortelle essential oil; Applied new technologies that will use waste material after distillation; Involvement of large number of women and increased number of new full time jobs; Enhanced agricultural infrastructure in the MAPs value chain; further increase in production in BiH is expected and in parallel new market opportunities explored in order to secure safe placement of produced goods. IV. Illustrative activities Target activities that will be supported with this RFA are described in the section below. USAID/Sweden FARMA II will support funding of the activities that will strengthen the MAPs sector in BiH by facilitating domestic production of high quality produce and in accordance to good agricultural practices. Applicants may submit proposals that address one or several of the target activities proposed below: Using new, modern methods to improve / increase distillation capacities; Using modern methods, increase of current level of production of immortelle transplants, plant material and essential oil for the domestic and export market and improvement of harvest planning in order to get the best possible material for distillation; Support to producer organization in introduction of new technologies that will address the treatment of waste material after distillation; RFA Increasing Competitiveness of Immortelle Production and Processing Page 6

7 Support to new production and/or processing technologies which will lead to import substitution and/or increased exports; Support to producer organizations to start / increase the production of immortelle based final products, their marketing, promotion, branding and export related activities; Support to producer organization to start the production of final products based on immortelle, technology development, marketing related activities and placement on the domestic market; Improved harvest handling at the farm level to improve product quality; Improvement in quality of seedling/plant material originating from Herzegovina; Improvement in processing facility management; Strengthening of Business Development Service Providers to improve their knowledge on technical aspects of immortelle production by enabling them to access training opportunities thus improving access to continuous technical assistance for farmers in immortelle plantations establishment and innovative production techniques to ensure strong yields and quality products; Application of innovative and new management practices both in the primary production and processing facilities; Improving Competitiveness of MAPs Sector; Support farmers and producer organizations to implement international standards and obtain relevant certification as well as promote activities related to the farm record keeping; Support activities that provide on-farm employment for large number of people especially women and youth; Support to activities that involve training of potential cooperants and promote contract farming. In addition, USAID/Sweden FARMA II encourages applicants to consider and address in the application of necessary measures that proposes mitigation against environment and climate related risks, as well as to pay attention to gender aspects and that higher number of total direct and indirect beneficiaries are women and youth where possible. Also, as a minimum of quality standards implementation requirements, the farm record keeping at the level of potential beneficiaries needs to be promoted and implemented all over Bosnia and Herzegovina. V. Performance Monitoring Plan To track achievements of these grant awards, the Activity will measure progress against total number of jobs created in assisted producer organizations in MAPs value chain, annual percent change in sales and exports, number of farmers and POs who have applied new technologies or management practices as a result of this grant award. In addition, the Activity will measure improvement in management practices, farmers holdings implementing at least one strategy to mitigate against climate-related risks as a result of this grant award. It is expected that applicants will include the same set of indicators in their project to measure achievements that will be result of this grant award. The participation of woman in the proposed activities is strongly encouraged, it will be evaluated and tracked separately. Section 2 Award Information RFA Increasing Competitiveness of Immortelle Production and Processing Page 7

8 Subject to the availability of funds, the Activity intends to provide grant funds to support Improving Competitiveness of Immortelle Production and Processing of producer organizations (POs) from the MAP Sector. It is expected that grants for Improving Competitiveness pf Immortelle Production and Processing will be allocated tentatively over a one-year period. The anticipated period of performance of the grant is expected to be November 15, 2016 November 15, The Activity anticipates awarding standard grants under this RFA. The Activity s grants shall not exceed 50,000 $ for a single award. 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. Legally registered Bosnia & Herzegovina Organizations; Non-profit/NGO, regional development agencies, public educational institutions (agricultural faculties, institutes, extension services) Commercial and/or for-profit organizations that understand that no profit or fee will be allowed under the grant agreement; Any legal entity which is registered in the Farm Registry established within the entity or cantonal ministries of agriculture, either as a company or at a minimum as an agricultural crafts organization; In some cases, BiH public educational entities may be eligible for grants. Grants to educational entities will be used to provide in-kind assistance only. Under any grants awarded to public educational entities, USAID/Sweden FARMA II will conduct all procurement on behalf of the grantee and transfer the equipment as an in-kind donation. The government organizations eligible would include agricultural institutes and university faculties. Eligible organizations must also adhere to the following requirements: Demonstrate an ability to contribute to the objectives of the USAID/Sweden FARMA II project and perform the activities proposed in accordance with USAID policies and practices; Display sound financial, administrative, and technical management in the form of a system of controls that safeguards assets, protects against fraud and waste, and supports the achievement of the award s objectives; Representatives of the organization must sign all mandatory certifications. 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 A of this RFA. Ineligible organizations include: RFA Increasing Competitiveness of Immortelle Production and Processing Page 8

9 Entities that have misused USAID or the Government of Sweden 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; Public International Organizations; Government organizations and institutions; Individuals. Ineligible Expenses: FARMA grant funds may not be utilized for the following: Profit Military equipment Surveillance equipment Commodities and services for support of police and other law enforcement activities Abortion equipment and services Luxury goods and gambling equipment Weather modification equipment Private ceremonies, parties, celebrations, or "representation" expenses (entertainment costs) Purchases of restricted goods, such as certain agricultural commodities, motor vehicles, pharmaceuticals, contraceptive products, pesticides, used equipment and fertilizers without USAID s Contracting Officer advance approval. Purchases of goods or services from countries or suppliers as may be identified by USAID's consolidated list of debarred, suspended, or ineligible subcontractors, System for Award Management (SAM) at / or the U.S. Department of Treasury Office of Foreign Assets Controls (OFAC)at Prior obligations of and/or, debts, fines, and penalties imposed on the Grantee. Alcoholic beverages Purchases or activities unnecessary to accomplish grant purposes as determined by the USAID/Sweden FARMA II Project. Second hand equipment Section 4 Application and Submission Information Applicants should submit written applications to one of USAID/Sweden FARMA II offices, and electronically via at grants@farmabih.ba. The Closing Date for Submission of Applications is and the Closing Time for Submission of Applications is 04:00 PM Local BiH Time. Late applications will not be considered. For each proposed activity, the applicant will also propose target indicators from the following areas: Increased sales and/or exports and potential for income generation; Increased access to international and/or domestic markets; RFA Increasing Competitiveness of Immortelle Production and Processing Page 9

10 Increased number of on-farm-employment and /or direct and seasonal employees as a result of activity implementation; Increased number of women participating in this program; Introduction of new products and/or implementation of the new production technology; Increased yields and profitability due to the introduction of new crop varieties; Introduction of international food safety standards or management systems; Introduction of new crop or equipment insurance schemes; Import substitution and/or increased export potential; Implementation of measures to mitigate risk of climate change. For the project to be funded by USAID/Sweden FARMA II it should include the following elements, as relevant: Readiness to introduce new production technologies and to demonstrate its advantages (if any) to selected value chain participants; Readiness to provide assistance to young farmers and/or women (for example, in the form of training) to increase the production of target produce. This activity will contribute to mitigation of market distortion. Openness to show others in the industry new practices that have been implemented as a result of the project. This activity will contribute to mitigation of market distortion. All applications in response to this RFA shall consist of a technical proposal and a budget proposal. The technical proposal must be no longer than 25 pages in length. The applicant is expected to demonstrate the following in the application: Consistency with Project s objectives: The applicant s proposed results clearly feed into the Activity s performance management plan. The proposed indicators are objectively measurable, clear and relevant to the Activity and the methodology for measuring results of the program is appropriate and efficient. The proposed activities are consistent with and will contribute to achieving the objectives stated in the RFA. Feasibility of design. The proposed methodology reflects an understanding of the RFA s program description and scope of work. The designed interventions are appropriate and the results/milestones are concrete and achievable. The implementation plan includes tasks/activities that are clearly described and organized in a sequential and logical order; the proposed timelines allow for the maximization of resources and time, and they are clearly assigned to personnel Market Distortion. The proposed activity clearly defines how the potential market distortion will be mitigated. The applicant is expected to demonstrate their readiness to mitigate the potential market distortion which may occur because of financial assistance paid to the business giving the business a competitive advantage over the similar businesses within the value chain. FARMA II ensures clear, transparent and competitive procedures for grants and one of the key considerations includes market distortion. Applications will be assessed and approved with a goal to avoid market RFA Increasing Competitiveness of Immortelle Production and Processing Page 10

11 distortion or favoring one producer, business group or interest over another. In improving the competitiveness of the immortelle producing and processing sector, grants will foster a level playing field for competing and complementary producer organizations in the same value chain. Sustainability/financial self-reliance. Proposals will be evaluated regarding the extent to which the funded activity will result in building and strengthening the capacity of the local organizations, and whether the activity itself is sustainable or will stimulate the economic sustainability of the organization. The required cost share is minimum 50% of the total investment costs. The proposed cost share elements are relevant to the objectives of the program and demonstrate the organization s commitment in investing resources in the program. The application includes a logical and feasible proposal describing how the cost share commitments will be met. If program income is expected: The proposal for collecting program income is efficient and realistic. Gender Equality. Proposals will be evaluated regarding the extent to which the funded activity will result in improving gender inequality within USAID/Sweden FARMA II supported sub sectors and components. In line with USAID s Gender Equality and Female Empowerment Policy and the Swedish Government s Policy for Gender Equality and the Rights and Role of Women in Sweden s International Development Cooperation, USAID/Sweden FARMA II small grants will support opportunities to empower, motivate and activate men and women to mitigate gender inequalities within the USAID/Sweden FARMA II supported value chains. Given that the situation differs in different value chains and local contexts, the USAID/Sweden FARMA II small grants fund will serve as a tool for substantial women s empowerment and mitigation of gender inequality. Environmental consideration. For assistance provided under this SOW sub-contractor will comply with USAID environmental requirements in accordance with CFR 216, namely the USAID/Sweden FARMA II-approved Initial Environmental Examination and the USAID/Sweden FARMA II-approved Programmatic Environmental Assessment (PEA) and the Pesticide Evaluation Report and Safer Use Action Plan (PERSUAP), as directed by USAID/Sweden FARMA II. Specifically, any technical assistance (TA) must comply with the following: 1. USAID/Sweden FARMA II Programmatic Environmental Assessment (PEA), Section (b), where all TA must promote Good Agricultural Practices (GAP s), 2. All pest management advices must comply with USAID/Sweden FARMA s II approved Pesticide Evaluation Report and Safer Use Action Plan (PERSUAP). Only pesticides approved in the PERSUAP may be used and recommended during training events, including any written material prepared by the implementer. It is USAID policy that all pest management advices must follow the principles of Integrated Pest Management (IPM). The approved pesticide list, in addition to the full PERSUAP, will be provided to the selected implementer prior to the signing of the contract and shall be fully complied with. In addition, USAID/Sweden FARMA II encourages applicants to consider and address in the application necessary measures that proposes mitigation against environment and climate related risks. Desired Results. Grants will be awarded for activities that will have the greatest contribution to increased competitiveness of the MAPs sector through implementation of new technologies, Good RFA Increasing Competitiveness of Immortelle Production and Processing Page 11

12 Agricultural Practices, introduction of new products to the market, increased sales and exports, increased on-farm and direct employment, climate change adaptation and risk reduction and promote environmental best practices. Grant applications will specify activity outputs and explain how and to what degree they are expected to generate these overall business results objectives. Application Process All interested parties can apply for possible support from USAID/Sweden FARMA II s Grant Fund for above mentioned activities. In addition to the above project specific criteria, all applicants must meet the following conditions: 1. Maximum amount requested from USAID/Sweden FARMA II should not exceed 50,000 $. 2. USAID/Sweden FARMA II participation should be 50% or less of the cost of the entire project 3. Used equipment CANNOT be financed. 4. The PO must also submit balance sheets and income statements (or other relevant financial data) for the last 1 year, with evidence of successful business operation 5. USAID/Sweden FARMA II funds will be reimbursed to the applicant only after the purchase and installation of equipment and after the submission of all required documentation such as invoices, receipts etc. For the fixed amount awards USAID/Sweden FARMA II funds will be reimbursed only after specific deliverable/milestone has been achieved. The budget proposal shall be submitted as a separate file from the technical proposal. The required format for applications is included as Annex B - Full Application Format and Budget Format. 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 Activity 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. The following evaluation criteria will be used in this RFA will: 1. Consistency with USAID/Sweden FARMA II objectives and overall project goals: especially introducing new technologies to increase client sales and jobs. 2. Activity s contribution to increased sales, exports, employment, and investment. 3. Sector-specific technical criteria 4. Results to be achieved: Are the results to be achieved linked to the grant objective RFA Increasing Competitiveness of Immortelle Production and Processing Page 12

13 5. Compatibility with EU accession requirements. Compatibility with Section 613 of the US FY 08 Appropriations Act. USAID/Sweden FARMA II aims to increase exports in targeted agriculture and food sub-sectors and facilitate partnerships with existing and new foreign investors, it is not expected that investments and export promotion assistance under USAID/Sweden FARMA II will adversely impact US companies or jobs since the majority of BiH agricultural and food exporters and investors are regional and EU-based, a negligible share of their products are exported to the US, and no US jobs loss is anticipated as a result of USAID/Sweden FARMA II activities. 6. Feasibility of design and approach: the quality and feasibility of the application in terms of the appropriateness of the proposed technology and innovativeness; proposed mechanisms for monitoring and evaluation with objectively measurable indicators will also be appraised. 7. Management and programmatic capacity: evidence of the capability to undertake and accomplish the proposed activities. The appraisal will be based on the background, qualifications, reputation, appropriateness and skills of its key personnel, and the reputation, and achievements of the organization in the past. 8. Potential for scaling up/replication 9. Potential for mitigation of possible market distortion: evidence of the applicant s capability to craft solutions that make the value of the activity higher than the cost of the activity. Provides reasonable explanation on how the benefit received from the project contributes to the broader farmers community. 10. Budget: the degree to which budgeting is clear and reasonable and reflects best use of organizational and grant resources; Provides reasonable cost share consistent with the nature of the proposed activity and the applicant s ability to contribute and leverage funds to the greatest extent possible; All members of the TEC committee will review the budget in detail making sure that the proposed costs make technical sense, are directly linked to an activity, and are reasonable and necessary costs. 11. Gender and youth awareness: the extent to which the funded activity includes a gender and youth component or represents a strong commitment to women and youth as beneficiaries. 12. Environmental Compliance: addressing climate change adaptation and risk reduction strategies into appropriate activities and promotion environmental best practices The selection of the Applicant for award will be made by the Activity s Grant Selection Committee (GSC). Prior to the award of any resultant grant agreement, the Project must obtain prior approval from USAID. Section 6 Award and Administration Information Successful applicant(s) will receive written notice from the DCOP/Grants Manager informing the applicant(s) that the Activity either intends to award a grant to the applicant without negotiation, or that the Activity 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 DCOP/Grants Manager. RFA Increasing Competitiveness of Immortelle Production and Processing Page 13

14 Any resultant award will be subject to the terms and conditions of the Prime Contract for the USAID/Sweden Fostering Agricultural Markets Activity II (FARMA II), 2 CFR 200 Standard Provisions for Non-U.S. Non-governmental Recipients. Issuance of this RFA does not constitute an award commitment on the part of the Activity or the U.S. Government, nor does it commit the Activity or the U.S. Government to pay for costs incurred in the preparation and submission of an application. Funding All grants will be negotiated, denominated and funded in Bosnian Marks (BAM). Payments will either be made on a reimbursement basis in tranches corresponding to achievement of agreed upon milestones or directly to vendor s account after the completion of services or upon delivery of equipment. The decision will be made by USAID/Sweden FARMA II as part of an eventual analysis of the Applicant s organizational capability to manage grant funds. All costs funded by the grant must be allowable, allocable and reasonable. A cost-sharing element from the applicant and/or an approved third party must be contributed to the grant activity. Grant applications must be supported by a detailed and realistic budget as described in Annex B. Section 7 Authority/Governing Regulations USAID/Sweden FARMA II grants to non-u.s. organizations adhere to guidance provided under USAID s Automated Directive System (ADS), Section , Grants Under Contracts, ADS Chapter 303, Grants and Cooperative Agreements to Non-Governmental Organizations, and within the terms of the USAID Standard Provisions applicable to Non-U.S. Non-Governmental Recipients. These provisions can also be accessed through the USAID external website at ADS 303 references three additional regulatory documents: A. 22 CFR 226 Administration of Assistance Awards to U.S. Non-Governmental Organizations B. OMB Circular A-122: Cost Principles for Nonprofit Organizations C. FAR 31.2 Cost principles for Commercial Organizations D. OMB Circular A-133: Audits of States, Local Governments, and Nonprofit Organizations Full text of these circulars can be found at USAID/Sweden FARMA II is required to ensure that all organizations receiving USAID grant funds comply with the guidance found in these circulars, as applicable to the respective terms and conditions of their grant awards. Issuance of this RFA does not constitute an award commitment on the part of USAID/Sweden FARMA II, nor does it commit USAID/Sweden FARMA II to pay for costs incurred in the preparation and submission of an application. Further, USAID/Sweden FARMA II reserves the right to reject any or all applications received. All application preparation and submission costs are at the applicant's expense and risk. Awards are subject to availability of funds. RFA Increasing Competitiveness of Immortelle Production and Processing Page 14

15 Section 8: Annexes Annex A: Certifications Annex B: Full Application Format and Budget Format Annex C: Survey on Ensuring Equal Opportunity for Applicants Annex D: Environmental Self-Screening Form RFA Increasing Competitiveness of Immortelle Production and Processing Page 15