Frequently Asked Questions Concerning USTDA's Programs
Q. Why does USTDA impose nationality requirements?
A. USTDA's statutory purpose is "to promote United States private sector participation" in the trade and development projects it assists. The Agency's nationality requirements – which are available on the USTDA website, www.ustda.gov – implement that statutory mandate.
The Agency will generally not waive the U.S. nationality requirement for Grantees or prime Contractors but, in exceptional circumstances, will seek to accommodate the commercial requirements of U.S. entities doing business in grantee host countries. In exceptional circumstances, USTDA will consider limited waivers of the nationality requirements for subcontractors.
Failure to comply with USTDA's nationality requirements can result in the disqualification of potential bidders and/or a reduction in the payments USTDA will make in support of a Grantee contract.
Q. How important is it to adhere to the Terms of Reference?
A. The Terms of Reference (TOR) define the assistance to be provided by the Agency to the Grantee, and the work to be done by the Contractor. They are also the basis on which the dollar amount of USTDA assistance is determined, and Contractors are paid on the basis of TOR work actually completed. The TOR are set forth in the Grant Agreement, and carried forth into the contract with the U.S. firm or individual selected by the Grantee to do the work.
The TOR are very important, and USTDA expects Grantees and Contractors to adhere to the TOR in all respects. Adherence to the TOR is also essential to ensure the integrity of the Contractor selector process: unless all bidders respond to the specified TOR, it is difficult if not impossible to select a winning proposal. Before a contract award, or during contract performance, modification to or departure from the TOR (even if done with the Grantee's approval or acquiescence) without USTDA's prior approval can create significant problems. Depending on the circumstances, these problems could include USTDA's refusal to pay for work outside the scope of the TOR; a downward adjustment of the project budget; and even setting aside and re-competing an initial contract award.
Q. Why does USTDA have a cost share and success fee arrangement? When is a cost share and success fee required?
A. The cost share and success fee requirements derive from USTDA's statutory mandate, which provides that the Agency shall "to the maximum extent practicable, require corporations and other entities to – (A) share the costs of feasibility studies and other project planning services funded under this section; and (B) reimburse the Trade and Development Agency those funds provided under this section, if the corporation or entity concerned succeeds in project implementation."
USTDA typically requires a cost share and success fee in cases where the host country Grantee has selected a U.S. Contractor prior to the grant being awarded. In the case of a Contractor cost share, the amount the Contractor is required to contribute to the project depends on a number of factors, including the size of the U.S. company, the costs the company has incurred in developing the project, and the risks associated with the project. The cost share is generally not greater than 50% of the total study cost. In a cost share situation, the Contractor is not allowed a fee or a profit. Additionally, if the total actual cost is less than the amount budgeted, the USTDA grant amount is reduced proportionately. Finally, before USTDA will make its final payment to the Contractor, the Contractor must submit a certified statement of expenditures to USTDA indicating that it complied with its cost share requirement. If the certified statement of expenditures is not provided or is inaccurate, USTDA is entitled to a full refund of USTDA-disbursed grant funds.
A success fee agreement will be used when it is anticipated that the Contractor may have the possibility to successfully participate in the project's implementation. The success fee required of the Contractor can be in an amount up to the total of USTDA-disbursed grant funds. The reimbursement trigger can be finance or revenue based. The reimbursement requirement typically applies for eight years after the success fee agreement is signed.
Greater detail about the reporting and recordkeeping requirements associated with cost share and success fee arrangements can be provided by USTDA staff.
Q. How does USTDA maintain the confidentiality of information submitted to it by the grantee and contractor?
A. Like all federal agencies, USTDA is subject to the Freedom of Information Act (FOIA), 5 U.S.C. § 552. FOIA is a federal law that provides for public access to agency records. USTDA generally is required under the FOIA to disclose records requested in writing by any person. However, agencies may withhold information pursuant to the exemptions and exclusions contained in the statute.
USTDA is sensitive to the business requirements of the entities with which it deals and, to the extent permitted by law, makes every effort to respect and maintain confidential information. USTDA asks its Contractors to identify any information it provides to USTDA that it believes is confidential, and to provide a confidential version of their reports as well as copies suitable for public dissemination. USTDA maintains the confidentiality of this information in accordance with applicable law. Additionally, protection for confidential information provided to USTDA by a Contractor or Grantee exists in legislation like the Trade Secrets Act (18 U.S.C. § 1905).
Q. How does USTDA evaluate the success of its programs?
A. As a federal agency spending public funds, USTDA has put in place a number of mechanisms to evaluate the impact, effectiveness, and economy of its program activities. USTDA evaluates its program activities both for the commercial benefits they produce for U.S. private sector entities and for the development benefits that are received by USTDA host countries.
Commercial benefits are primarily measured by the amount of U.S. exports that are associated with USTDA activities. USTDA particularly monitors two indicators: the "hit rate" and the "export multiplier." The "hit rate" is the percentage of USTDA activities that produce exports. The "multiplier" is the total amount of exports associated with USTDA activities divided by the funds that USTDA invests in the same activities.
Host country development benefits are measured by whether or not the activities result in: (1) implemented infrastructure projects; (2) additional jobs and training programs for host country personnel; (3) the transfer of modern technology to the host countries or productivity improvements in the host countries; and (4) systematic reforms, such as privatization or market-oriented reforms, to improve economic performance in the host country. Other measures built into a project's design, such as enhanced government revenue, increased good governance, and spin-off projects, are also used to assess USTDA's programs.
Q. How does USTDA obtain information to evaluate the success of its programs?
A. USTDA has a comprehensive program to obtain information about the outcome of its activities from a wide variety of sources. USTDA's goal is to update its information on its activities at least once a year. USTDA's internal evaluations staff is assisted by an outside evaluations Contractor, currently QED, a Washington, DC firm.
USTDA obtains information by contacting USTDA Grantees, Contractors, host country project managers, U.S. Foreign Commercial Service officers, and any other entities that it has reason to believe may have information about project outcomes. USTDA also receives annual reports on "success fee" projects from U.S. Contractors who have signed reimbursable agreements with it. In addition, both USTDA and QED evaluations staff aggressively utilize internet sources and trade press articles to obtain information. Finally, USTDA's regional teams are an important source of information, especially when they travel to their assigned countries.
Q. Are the beneficiaries of USTDA funding obliged to provide USTDA with information on the outcomes of USTDA-funded activities?
A. All beneficiaries of USTDA funds sign agreements with USTDA to report on the outcome of their activities. U.S. companies who manage USTDA orientation visits and conferences are usually required to canvass participants, both U.S. and foreign, on the activities and report both immediately after the event (the initial report) and twelve months later (the follow-up report). U.S. Contractors carrying out feasibility studies and technical assistance activities agree in their contract with the host country grantee to respond to USTDA or its evaluation contractor's questions for at least two years after the activities are completed. In cases involving a success fee agreement, Contractors are required to report to USTDA once a year for eight years on their progress toward implementing the project. Additionally, in most cases, USTDA's agreements with host country Grantees require them to respond to reasonable requests for information about the outcome of USTDA-funded activities for five years following USTDA's receipt of a final report.
Q. What is USTDA's role in the contractor selection process?
A. Grantees award contracts pursuant to a competitive process conducted in accordance with the procurement procedures of the grantee host country. USTDA provides guidelines to the Grantee to ensure a fair, open, and transparent procurement process. Contract opportunities with host country Grantees are published widely in appropriate venues, including online through Federal Business Opportunities (www.fbo.gov). Unless otherwise specified, proposals are submitted directly to the host country grantee by potential Contractors. USTDA requests that the grantee submit its documentation relating to the Contractor selection process for information and approval. USTDA requires that Contractors for USTDA-funded projects satisfy USTDA's nationality requirements. USTDA must approve the Contractor selected by the Grantee before the project can proceed.
Q. What is USTDA's payment procedure?
A. Although the Agency is not a party to a contract between a Grantee and a Contractor, USTDA disburses grant funds directly to the Contractor according to the payment schedule and disbursement procedure provided in the Grantee-Contractor contract. The payment schedule and disbursement procedures set out in the contract are strictly enforced. The Contractor first submits its invoices to the Grantee. If the Grantee certifies that the contractor has satisfactorily performed the services for which reimbursement is requested in accordance with applicable contract provisions and the terms and conditions of the USTDA Grant Agreement, the invoice is forwarded to USTDA. USTDA will only disburse funds to the Contractor upon receipt of this certification and in accordance with the payment schedule specified in the Grantee-Contractor contract. The final 15% of the grant amount is paid to the Contractor only upon receipt and approval by the Grantee and USTDA of the contractor's final report. In addition to its own review, USTDA retains the authority to commission an independent evaluation of the Contractor's work product.
Q. When will USTDA initiate an audit?
A. USTDA has an audit program in place in order to ensure that public funds are spent appropriately and in accordance with USTDA's statutory purpose and authorities. Financial and program audits are done regularly to evaluate programs that have been completed. Accordingly, Contractors and Grantees are required to maintain records relating to USTDA-funded projects for a specified period after final funds disbursement by USTDA. USTDA has the discretion to initiate an audit at any time. In the unusual circumstance where an audit is undertaken on an active contract, a Contractor will not receive any additional payments for work performed under the contract until the audit is complete and all questions relating to the project are satisfactorily resolved.