FUNDING OF NEW CONTRACTS AND GRANTS

UNCLAS STATE 101998

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EAID ECON PK PREL
SUBJECT: FUNDING OF NEW CONTRACTS AND GRANTS

REF: A. ISLAMABAD 2882

B. ISLAMABAD 2296


1. (SBU) SUMMARY: DEPARTMENT IS REVIEWING REQUESTS BY
EMBASSY ISLAMABAD FOR FUNDING OF ONGOING OR NEW
CONTRACTS AND GRANTS. DEPARTMENT CONCURS WITH
PROCUREMENT ACTIONS FOR FIVE ACTIVITIES: (1) POLIO
ERADICATION (UNICEF),(2) FATA ENABLING PROGRESSIVE
MEDIA VOICES IN PAKISTAN (INTERNEWS),(3) IMPROVE CHILD
HEALTH FATA (SAVE THE CHILDREN),(4) ENERGY EFFICIENCY
AND CAPACITY (INTERNATIONAL RESOURCES GROUP),AND
(5) ENERGY POLICY (ADVANCED ENGINEERING ASSOCIATES
INTERNATIONAL). WE RECOMMEND THAT ONE CONTRACT
WITH QED UNDER THE PERFORMANCE ACTIVITY BE
TERMINATED FOR CONVENIENCE OF THE USG. THE REVIEW
OF OTHER CONTRACTS AND GRANTS IS ONGOING, AND SOME
WILL BE EXTENDED FOR THREE TO FOUR MONTHS WHILE
OPTIONS FOR AN ORDERLY TRANSITION TO
PAKISTANI IMPLEMENTING PARTNERS ARE PURSUED.
END SUMMARY.


2. (SBU) DEPARTMENT IS EVALUATING REQUESTS FROM EMBASSY
ISLAMABAD FOR INCREMENTAL FUNDING AND, IN SOME CASES,
NEW FUNDING FOR CONTRACTS AND GRANTS MANAGED BY USAID.
WE HAVE TAKEN THE DECISION TO TRANSITION WHEREVER
FEASIBLE TO PAKISTANI IMPLEMENTING PARTNERS. THE
INTENTION IS TO HAVE THE TRANSITION OCCUR AS QUICKLY
AS POSSIBLE, HOWEVER WE WANT THE CURRENT IMPLEMENTING
PARTNERS DESCRIBED IN PARA FIVE TO CONTINUE SERVICES
AT THE EXISTING LEVEL OF EFFORT WHILE THIS REVIEW IS
UNDER WAY. THESE PARTNERS WILL BE NOTIFIED FOURTY-FIVE
DAYS BEFORE THE END OF THE STIPULATED EXTENSION PERIOD
IF THEY ARE TO BEGIN PHASE DOWN OF THE GRANT OR CONTRACT.


3. (SBU) DEPARTMENT RECOGNIZES THAT A RAPID TRANSITION
TO USE OF PAKISTANI IMPLEMENTING PARTNERS MAY RESULT IN
ADDITIONAL SHORT-TERM COSTS, BUT WE BELIEVE THIS CHANGE
IS IMPORTANT TO ALIGN ASSISTANCE IMPLEMENTATION WITH
CURRENT POLICY DIRECTION. ASIDE FROM POSSIBLE COSTS
ASSOCIATED WITH EARLY CONTRACT TERMINATION, POST WILL
NEED TO RAPIDLY IDENTIFY AND HIRE ADDITIONAL U.S., TCN,
AND PAKISTANI STAFF TO CONTINUE DIRECT IMPLEMENTATION
AND/OR DIRECT OVERSIGHT OF THESE ACTIVITIES UNDER
OTHER ARRANGEMENTS. THIS WILL ALSO REQUIRE ADDITIONAL
SECURE OFFICE SPACE, HOUSING, AND MOBILITY, AS NEEDED, IN
PESHAWAR AND ISLAMABAD. IN CONSIDERING AND TRANSITIONING
TO ALTERNATIVE MECHANISMS, POST WILL NEED TO ESTABLISH
PROCEDURES FOR ENHANCED FINANCIAL ACCOUNTABILITY,
PERFORMANCE AND SECURITY TO MITIGATE RISKS. POST SHOULD
ALSO TAKE STEPS TO AVOID DISRUPTION OF SERVICES AND A PUBLIC
IMPRESSION OF REDUCED SERVICES.


4. (SBU) DEPARTMENT CONCURS WITH THE FOLLOWING ACTIONS:

-- FATA ENABLING PROGRESSIVE MEDIA VOICES IN PAKISTAN: USD
2.6 MILLION INITIAL OBLIGATION FOR INTERNEWS IS SUPPORTED.

-- IMPROVE CHILD HEALTH FATA: USD 2.0 MILLION INCREMENTAL
FUNDING FOR SAVE THE CHILDREN TO CONTINUE BASIC HEALTH
SERVICES PROVISION THROUGH MARCH 2010 IS SUPPORTED.

-- POLIO ERADICATION FATA: USD 500,000 INCREMENTAL FUNDING
FOR UNICEF THROUGH SEPTEMBER 2010 IS SUPPORTED.

-- ENERGY EFFICIENCY AND CAPACITY: USD3.0 MILLION
INCREMENTAL FUNDING FOR THE INTERNATIONAL RESOURCES
GROUP IS SUPPORTED.

-- ENERGY POLICY: USD 2.0 MILLION INCREMENTAL FUNDING FOR
THE ADVANCED ENGINEERING ASSOCIATES INTERNATIONAL IS
SUPPORTED.

-- PAKISTAN TRANSITION INITIATIVE (PTI): USD15.0 MILLION IN
INCREMENTAL FUNDING FOR INTERNATIONAL ORGANIZATION FOR
MIGRATION (IOM) IS SUPPORTED.


5. (SBU) THE FUNDING REQUESTS UNDER THE FOLLOWING
ACTIVITIES WERE NOT SUPPORTED. IN SOME CASES, LIMITED
FUNDING IS RECOMMENDED TO PROVIDE TIME FOR CONTINUED
NORMAL IMPLEMENTATION WHILE SIMULTANEOUSLY SEEKING
A TRANSITION TO PAKISTANI PARTNERS.

-- PAKISTAN TRANSITION INITIATIVE (PTI): WE RECOMMEND
THAT THE CONTRACT WITH CREATIVE ASSOCIATES BE
EXTENDED FOR FOUR MONTHS. NO RECOMMENDATION
HAS BEEN MADE WITH REGARDS TO THE AMOUNT OF
FUNDING FOR THE TRANSITION.

-- FATA CAPACITY BUILDING PROGRAM: WE RECOMMEND THAT
THE CONTRACT WITH DAI BE EXTENDED FOR THREE MONTHS AND
WE SUPPORT AN ADDITIONAL ESTIMATED USD 3.75 MILLION FOR
THE CONTRACT FOR THIS EXTENSION. PER REFTELS, DEPARTMENT
UNDERSTANDS THAT DAI HAS INITIATED DEMOBILIZATION DUE TO
LACK OF FUNDING. WITH THE RECOMMENDED EXTENSION, DAI
SHOULD IMMEDIATELY STOP DEMOBILIZATION AND RESUME FULL
OPERATIONS.

-- LOWER FATA DEVELOPMENT PROGRAM - LIVELIHOOD
DEVELOPMENT: WE RECOMMEND THAT THE GRANT WITH CHF
INTERNATIONAL BE EXTENDED FOR THREE MONTHS AND WE
SUPPORT THE PROVISION OF AN ADDITIONAL ESTIMATED USD
7.5 MILLION FOR THE EXTENSION.

-- UPPER FATA DEVELOPMENT PROGRAM - LIVELIHOOD
DEVELOPMENT: NO ADDITIONAL FUNDING IS SUPPORTED FOR THE
COOPERATIVE AGREEMENT WITH THE ACADEMY FOR EDUCATIONAL
DEVELOPMENT (AED) DURING THE TRANSITION.

-- PERFORMANCE: USD 2.5M INCREMENTAL FUNDING FOR THE
CONTRACT WITH QED GROUP, LLC IS NOT SUPPORTED. WE
RECOMMEND THAT POST PROCEED WITH TERMINATION FOR
CONVENIENCE OF THE USG AND CLOSE OUT THIS CONTRACT.


6. (SBU) POST WAS PREVIOUSLY ADVISED THAT DEPARTMENT
CONCURRED WITH INCREMENTAL FUNDING FOR THE ED-LINKS
ACTIVITY. BY OCTOBER 2, S/SRAP WILL PROVIDE GUIDANCE ON
THE EXPANSION OF THE ED-LINKS ACTIVITY INTO MALAKAND
DIVISION TO REBUILD SCHOOLS DAMAGED OR DESTROYED IN
THE FIGHTING THERE, AS WELL AS GUIDANCE ON THE FOLLOWING
PENDING PROCUREMENT ACTIONS:

-- COLLEGE IMPROVEMENT PROGRAM: USD 1.8 MILLION
INCREMENTAL FUNDING FOR A GRANT WITH FORMAN CHRISTIAN
COLLEGE.

-- USAID-PAKISTAN FULBRIGHT PROGRAM: USD 5.0 MILLION
ADDITIONAL FUNDING FOR A GRANT TO THE U.S. EDUCATIONAL
FOUNDATION PAKISTAN. DEPARTMENT UNDERSTANDS THAT
SEPTEMBER 30 IS THE DEADLINE FOR ADVISING STUDENTS SELECTED
FOR SCHOLARSHIPS THAT THEIR FUNDING HAS BEEN APPROVED.

-- STRENGTHENING TEACHERS EDUCATION IN PAKISTAN: USD
1.2 MILLION INCREMENTAL FUNDING FOR UNESCO.

-- EARTHQUAKE RECONSTRUCTION PROGRAM: USD 5.4 MILLION
INCREMENTAL FUNDING FOR CAMP, DRESSER, AND MCKEE.

-- DEVELOPING SERVICES IN NON-BANKABLE AREAS:
USD 450,000 CASH REIMBURSEMENT FOR KHUSHALI BANK.
CLINTON