Mandatory Reference: ADS 350 Strategic Objective Grant

Mandatory Reference: 350

File Name: 350mac_050603_cd32

Revision: 05/06/2003

Effective Date: 05/01/2003

Strategic Objective Grant Agreement (SOAG)

SOAG Principal Text.

USAID Grant Agreement No. _______

STRATEGIC OBJECTIVE GRANT AGREEMENT

BETWEEN THE

UNITED STATES OF AMERICA

AND

[NAME OF COUNTRY]

FOR

[ ]

Dated:

Strategic Objective Grant Agreement

Table of Contents

Article 1: Purpose.

Article 2: Strategic Objective and Results.

Section 2.1. The Strategic Objective.

Section 2.2. Results.

Section 2.3. Annex 1, Amplified Description.

Article 3: Contributions of the Parties.

Section 3.1. USAID Contribution.

Section 3.2. Grantee Contribution.

Article 4: Completion Date.

Article 5: Conditions Precedent to Disbursement.

Section 5.1. First Disbursement.

Section 5.2. Additional Disbursement.

Section 5.3. Notification.

Section 5.4. Terminal Dates for Conditions Precedent

Article 6: Special Covenants.

Article 7: Miscellaneous.

Section 7.1. Communications.

Section 7.2. Representatives.

Section 7.3. Standard Provisions Annex.

Section 7.4. Language of Agreement.

SOAG Principal Text

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STRATEGIC OBJECTIVE GRANT AGREEMENT

Dated:

Between

The United States of America, acting through the United States Agency for International

Development ("USAID")

and

[Name of Country] (hereinafter referred to as the "Grantee")

Article 1: Purpose.

The purpose of this Strategic Objective Grant Agreement ("Agreement") is to set out the

understanding of the parties named above (the "Parties") about the Strategic Objective

described below.

Article 2: Strategic Objective and Results.

Section 2.1. Strategic Objective. The Strategic Objective ("Objective") is to [describe

objective].

Section 2.2. Results. In order to achieve that Objective, the Parties agree to work

together to achieve the following Results: [describe Results and, either here or in Annex 1, the

indicators by which achievement of Results will be measured]. Within the limits of the definition

of the Objective in Section 2.1, this Section 2.2 [insert "may" or "may not"] be changed by

written agreement of the authorized representatives of the Parties without formal amendment to

the Agreement.

Section 2.3. Annex 1, Amplified Description. Annex 1, attached, amplifies the above

Objective and Results. Within the limits of the above [Option 1 (changes to Annex 1 limited by

definition of Strategic Objective): "definition of the Objective in Section 2.1,."][Option 2 (changes

to Annex 1 limited by both Strategic Objective and Results sections) : "definitions of the

Objective in Section 2.1 and the Results in Section 2.2,"] Annex 1 may be changed by written

agreement of the authorized representatives of the Parties without formal amendment of this

Agreement.

Article 3: Contributions of the Parties.

Section 3.1. USAID Contribution.

(a) The Grant. To help achieve the Objective set forth in this Agreement, USAID,

pursuant to the Foreign Assistance Act of 1961, as amended, hereby grants to the

Grantee under the terms of the Agreement not to exceed ________________United

States ("U.S.") Dollars ($__________) (the "Grant").

[If incrementally funded, insert the following paragraph (b)]

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(b) Total Estimated USAID Contribution. USAID's total estimated contribution to

achievement of the Objective will be U.S. $________________, which will be provided in

increments. Subsequent increments will be subject to the availability of funds to USAID

for this purpose and the mutual agreement of the Parties, at the time of each subsequent

increment, to proceed.

exceeds the amount which reasonably can be committed for achieving the Objective or

Results or activities during the current or next U.S. fiscal year, USAID may, upon written

notice to the Grantee, withdraw the excess amount, thereby reducing the amount of the

Grant as set forth in Section 3.1(a). [If incrementally funded, insert the following:

"Actions taken pursuant to this subsection will not revise USAID's total estimated

contribution set forth in 3.1(b)." If NOT incrementally funded, insert the following:

"Actions taken pursuant to this subsection will not revise USAID's total estimated

contribution below that set forth in 3.1(a), subject to the availability of funds to USAID for

this purpose and the mutual agreement of the Parties, at the time of each subsequent

increment, to proceed.")

Section 3.2. Grantee Contribution.

(a) The Grantee agrees to provide or cause to be provided all funds, in addition to those

provided by USAID and any other donor identified in Annex 1, and all other resources required

to complete, on or before the Completion Date, all activities necessary to achieve the Results.

(b) The Grantee's contribution will not be less than the equivalent of U.S. $ [ ], or x

units of local currency, including in-kind contributions. The dollar equivalent was calculated at

the exchange rate of [$1 = _ ] The Grantee will report at least annually in a format to be agreed

upon with USAID on its cash and "in-kind" contributions.

[If Grantee contribution is to be tied to USAID increments or subject to conditions, the following

or other appropriate language may be inserted in lieu of (b) above:

"(b) The Grantee's contribution, based on USAID's contribution in section 3.1(a), will not

be less than the equivalent of U.S. $ [ ], including in-kind contributions. The Grantee's Total

Estimated Planned Contribution to the Objective will not be less than the equivalent of U.S. $ [

], including in-kind contributions, subject to availability of funds to the Grantee for this purpose,

the mutual agreement of the Parties, at the time of each subsequent increment, to proceed, and

USAID providing the total estimated amount in Section 3.1(b). The Grantee will report at least

annually in a format to be agreed upon with USAID on its cash and "in-kind" contributions."]

Article 4: Completion Date.

(a) The Completion Date, which is [insert date], or such other date as the Parties may

agree to in writing, is the date by which the Parties estimate that all the activities

necessary to achieve the Objective and Results will be completed.

(b) Except as USAID may otherwise agree to in writing, USAID will not issue or approve

documentation which would authorize disbursement of the Grant for services performed

or goods furnished after the Completion Date.

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prescribed in Implementation Letters, are to be received by USAID no later than nine (9)

months following the Completion Date, or such other period as USAID agrees to in

writing before or after such period. After such period USAID, at any time or times, may

give notice in writing to the Grantee and reduce the amount of the Grant by all or any

part thereof for which requests for disbursement, accompanied by necessary supporting

documentation prescribed in Implementation Letters, were not received before the

expiration of such period.

Article 5: Conditions Precedent to Disbursement.

Section 5.1. First Disbursement. Prior to the first disbursement under the Grant, or to

the issuance by USAID of documentation pursuant to which disbursement will be made, the

Grantee will, except as the Parties may otherwise agree in writing, furnish to USAID in form and

substance satisfactory to USAID:

[Insert conditions precedent to first disbursement, such as:

"(a) An opinion of counsel acceptable to USAID that this Agreement has been duly

authorized or ratified by, and executed on behalf of the Grantee, and that it constitutes a

valid and legally binding obligation of the Grantee in accordance with all of its terms; and

"(b) A statement in the name of the person holding or acting in the office of the

Grantee specified in Section 7.2, and of any additional representatives, together with a

specimen signature of each person specified in such statement."

[If there are conditions precedent to additional disbursement insert the following:]

Section 5.2. Additional Disbursement. Prior to additional disbursement under the

Grant, or to the issuance by USAID of documentation pursuant to which additional disbursement

will be made, the Grantee will, except as the Parties may otherwise agree in writing, furnish to

USAID, in form and substance satisfactory to USAID:

[Insert conditions precedent to additional disbursement.]

Section 5.3. Notification. USAID will promptly notify the Grantee when USAID has

determined that a condition precedent has been met.

Section 5.4. Terminal Dates for Conditions Precedent.

(a) The terminal date for meeting the conditions specified in Section 5.1 is [ ] days

from the date of this Agreement or such later date as USAID may agree to in writing

before or after the above terminal date. If the conditions precedent in Section 5.1 have

not been met by the above terminal date, USAID, at any time, may terminate this

Agreement by written notice to the Grantee.

[If there is a terminal date(s) for conditions precedent to additional disbursement insert the

following:]

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(b) The terminal date for meeting the conditions specified in Section 5.2 is [ ] days

from the date of this Agreement or such later date as USAID may agree to in writing

before or after the above terminal date. If the conditions precedent in Section 5.2 have

not been met by the above terminal date, USAID, at any time, may cancel the

undisbursed balance of the Grant, to the extent not irrevocably committed to third

parties, and terminate this Agreement by written notice to the Grantee.

Article 6: [Optional article for special covenants.]

Article 7: Miscellaneous.

Section 7.1. Communications. Any notice, request, document, or other communication

submitted by either Party to the other under this Agreement will be in writing or by telegram,

telefax or cable, and will be deemed duly given or sent when delivered to such Party at the

following address:

To USAID:

Mail Address:

United States Agency for International Development

Alternate address for cables:

Telefax:

To the Grantee:

Mail Address:

Alternate address for cables:

Telefax:

All such communications will be in English, unless the Parties otherwise agree in writing.

Other addresses may be substituted for the above upon the giving of notice.

Section 7.2. Representatives. For all purposes relevant to this Agreement, the Grantee

will be represented by the individual holding or acting in the Office of [ ] and USAID will be

represented by the individual holding or acting in the Office of [ ] , each of whom, by written

notice, may designate additional representatives for [insert "all purposes" or specific purposes

and any conditions governing actions of additional representatives, e.g. other than signing

formal amendments to the Agreement or exercising the power under Sections 2.2 or 2.3 to

revise the Results or Annex 1]. The names of the representatives of the Grantee, with

specimen signatures, will be provided to USAID, which may accept as duly authorized any

instrument signed by such representatives in implementation of this Agreement, until receipt of

written notice of revocation of their authority.

Section 7.3. Standard Provisions Annex. A "Standard Provisions Annex" (Annex 2) is

attached to and forms part of this Agreement.

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Section 7.4. Language of Agreement. This Agreement is prepared in both English and

[French, Spanish, etc.]. In the event of ambiguity or conflict between the two versions, the

English language version will control.

IN WITNESS WHEREOF, the United States of America and the Grantee, each acting

through its duly authorized representatives, have caused this Agreement to be signed in their

names and delivered as of the day and year first above written.

UNITED STATES OF AMERICA [NAME OF COUNTRY OR GRANTEE]

By: ____________________________ By: ____________________________

Name: _________________________ Name: _________________________

Title: ___________________________ Title: ___________________________

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SOAG Annex 1

Amplified Description

I. Introduction.

This annex describes the activities to be undertaken and the results to be achieved with the

funds obligated under this Agreement. Nothing in this Annex 1 shall be construed as amending

any of the definitions or terms of the Agreement.

II. Background.

[Description of the problem(s) being addressed at the macro, sectoral or subsectoral level]

III. Funding.

Financial Plan. The financial plan for the Program is set forth in the attached table.

[Suggested language on the discretion to amend the Financial Plan: "Changes may be made to

the financial plan by representatives of the Parties without formal amendment to the Agreement,

if such changes do not cause (1) USAID's contribution to exceed the amount specified in

Section 3.1 of the Agreement, or (2) the Grantee's contribution to be less than the amount

specified in Section 3.2 of the Agreement."]

IV. Results To Be Achieved/Results Framework.

[Using the results framework, list the essential or significant results here or in the Agreement.]

V. Indicators.

[State interim and final measurable indicators.]

VI. Activities/Activity Selection.

[Either state the specific activities to be financed under the SOAG or, if specific activities are not

yet identified, the objective criteria and procedures for selection of actual activities.]

VII. Roles and Responsibilities of the Parties.

[Discussion of involvement of other partners and customers should be included.]

VIII. Monitoring and Evaluation.

IX. Other Implementation Issues.

[For example, with respect to the audit provisions of B.5 of the Standard Provisions Annex,

there could be provisions on the methodology, funding and timing of audits of host country

contractors and other sub-recipients receiving funds directly from the Grantee and agreement

that for sub-recipients receiving funds directly from USAID that in lieu of an audit plan, their

grants and contracts will contain the necessary audit provisions.]

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Annex 2

Standard Provisions

Table of Contents

Article A: Definitions and Implementation Letters.

Section A.1. Definitions.

Section A.2. Implementation Letters.

Article B: General Covenants.

Section B.1. Consultation.

Section B.2. Execution of Agreement.

Section B.3. Utilization of Goods and Services.

Section B.4. Taxation.

Section B.5. Reports and Information, Agreement Books and Records, Audits, and

Inspections

Section B.6. Completeness of Information.

Section B.7. Other Payments.

Section B.8. Information and Marking.

Article C: Procurement Provisions.

Section C.1. Source and Origin.

Section C.2. Eligibility Date.

Section C.3. Plans, Specifications and Contracts.

Section C.4. Reasonable Price.

Section C.5. Notification to Potential Suppliers.

Section C.6. Shipping.

Section C.7. Insurance.

Section C.8. U.S. Government-Owned Excess Property.

Article D: Disbursements.

Section D.1. Disbursement for Foreign Exchange Costs.

Section D.2. Disbursement for Local Currency Costs.

Section D.3. Other Forms of Disbursement.

Section D.4. Rate of Exchange.

Article E: Termination; Remedies.

Section E.1. Suspension and Termination.

Section E.2. Refunds.

Section E.3. Non-waiver of Remedies.

Section E.4. Assignment.

Article F: Miscellaneous.

* Section F.1. Investment Promotion.

Section F.2. Voluntary Family Planning.

Section F.3. Prohibition on Assistance to Drug Traffickers.

* Section F.4. Workers’ Rights.

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Standard Provisions

Article A: Definitions and Implementation Letters.

Section A.1. Definitions. As used in this Annex, the "Agreement" refers to the Strategic

Objective Grant Agreement to which this Annex is attached and of which this Annex forms a

part. Terms used in this Annex have the same meaning or reference as in the Agreement.

Section A.2. Implementation Letters. To assist the Grantee in the implementation of the

Agreement, USAID, from time to time, will issue Implementation Letters that will furnish

additional information about matters stated in this Agreement. The Parties may also issue

jointly agreed-upon Implementation Letters to confirm and record their mutual understanding on

aspects of the implementation of this Agreement. Implementation Letters can also be issued to

record revisions or exceptions which are permitted by the Agreement.

Article B: General Covenants.

Section B.1. Consultation. The Parties will cooperate to assure that the Objective and

Results of this Agreement will be accomplished. To this end, the Parties, at the request of

either, will exchange views on progress towards the Objective and Results, the performance of

obligations under this Agreement, the performance of any consultants, contractors, or suppliers

engaged under the Agreement, and other matters relating to the Agreement.

Section B.2. Execution of Agreement. The Grantee will:

(a) Carry out the Agreement or cause it to be carried out with due diligence and

efficiency, in conformity with sound technical, financial, and management practices, and

in conformity with those documents, plans, specifications, contracts, schedules, or other

arrangements, and with any modifications therein, approved by USAID pursuant to this

Agreement; and

(b) Provide qualified and experienced management for, and train such staff as may be

appropriate for the maintenance and operation of activities financed under the

Agreement, and, as applicable for continuing activities, cause those activities to be

operated and maintained in such manner as to assure the continuing and successful

achievement of the Objective and Results of the Agreement.

Section B.3. Utilization of Goods and Services.

(a) Any goods and services financed under this Agreement, unless otherwise agreed in

writing by USAID, will be devoted to the Agreement until the completion or termination of

the Agreement, and thereafter (as well as during any period of suspension of the

Agreement) will be used to further the Objective of the Agreement and as USAID may

direct in Implementation Letters.

(b) Goods or services financed under this Agreement, except as USAID may otherwise

agree in writing, will not be used to promote or assist a foreign aid project or activity

associated with or financed by a country not included in USAID Geographic Code 935 as

in effect at the time of such use.

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Section B.4. Taxation. [See ADS 350.5.1c for appropriate use of this clause or

alternative language.]

(a) General Exemption. The Agreement and the assistance thereunder are free from

any taxes imposed under laws in effect in the territory of the Grantee.

(b) Except as provided otherwise in this provision, the General Exemption in

subsection (a) applies to, but is not limited to (1) any activity, contract, grant or other

implementing agreement financed by USAID under this Agreement; (2) any transaction

or supplies, equipment, materials, property or other goods (hereinafter collectively

"goods") under (1) above; (3) any contractor, grantee, or other organization carrying out

activities financed by USAID under this Agreement; (4) any employee of such

organizations; and (5) any individual contractor or grantee carrying out activities financed

by USAID under this Agreement.

subsection (a) applies to, but is not limited to, the following taxes:

(1) Exemption 1. Customs duties, tariffs, import taxes, or other levies on the

importation, use and re-exportation of goods or the personal belongings and

effects (including personally-owned automobiles) for the personal use of non-

national individuals or their family members.

Exemption 1 includes, but is not limited to, all charges based on the value of such

imported goods, but does not include service charges directly related to services

performed to transfer goods or cargo.

(2) Exemption 2. Taxes on the income, profits or property of all (i) non-

national organizations of any type, (ii) non-national employees of national and

non-national organizations, or (iii) non-national individual contractors and

grantees. Exemption 2 includes income and social security taxes of all types and

all taxes on the property, personal or real, owned by such non-national

organizations or persons. The term "national" refers to organizations established

under the laws of the Grantee and citizens of the Grantee, other than permanent

resident aliens in the United States.

(3) Exemption 3. Taxes levied on the last transaction for the purchase of goods

or services financed by USAID under this Agreement, including sales taxes,

value-added taxes (VAT), or taxes on purchases or rentals of real or personal

property. The term "last transaction" refers to the last transaction by which the

goods or services were purchased for use in the activities financed by USAID

under this Agreement.

(d) If a tax has been levied and paid contrary to the provisions of an exemption,

USAID may, in its discretion, (1) require the Grantee to refund to USAID or to others as

USAID may direct the amount of such tax with funds other than those provided under the

Agreement, or (2) offset the amount of such tax from amounts to be disbursed under this

or any other agreement between the Parties.

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(e) In the event of a disagreement about the application of an exemption, the Parties

agree to promptly meet and resolve such matters, guided by the principle that the

assistance furnished by USAID is free from direct taxation, so that all of the assistance

furnished by USAID will contribute directly to the economic development of the country

of the Grantee.

Section B.5. Reports and Information, Agreement Books and Records, Audits, and

Inspections.

(a) Reports and Information. The Grantee shall furnish USAID accounting records and

such other information and reports relating to the Agreement as USAID may reasonably

request.

(b) Grantee Agreement Books and Records. The Grantee shall maintain accounting

books, records, documents and other evidence relating to the Agreement, adequate to

show, without limitation, all costs incurred by the Grantee under the Agreement, the

receipt and use of goods and services acquired under the Agreement by the Grantee,

agreed-upon cost sharing requirements, the nature and extent of solicitations of

prospective suppliers of goods and services acquired by the Grantee, the basis of award

of Grantee contracts and orders, and the overall progress of the Agreement toward

completion ("Agreement books and records"). The Grantee shall maintain Agreement

books and records in accordance with generally accepted accounting principles

prevailing in the United States, or at the Grantee's option, with approval by USAID, other

accounting principles, such as those (1) prescribed by the International Accounting

Standards Committee (an affiliate of the International Federation of Accountants) or (2)

prevailing in the country of the Grantee. Agreement books and records shall be

maintained for at least three years after the date of last disbursement by USAID or for

such longer period, if any, required to resolve any litigation, claims or audit findings.

Grantee in its fiscal year under the Agreement, the Grantee shall have financial audits

made of the expenditures in accordance with the following terms, except as the Parties

may otherwise agree in writing:

(1) With USAID approval, the Grantee shall use its Supreme Audit Institution or

select an independent auditor in accordance with the "Guidelines for Financial Audits

Contracted by Foreign Recipients" issued by the USAID Inspector General

("Guidelines"), and the audits shall be performed in accordance with the "Guidelines";

and

(2) The audit shall determine whether the receipt and expenditure of the funds

provided under the Agreement are presented in accordance with generally accepted

accounting principles agreed to in section (b) above and whether the Grantee has

complied with the terms of the Agreement. Each audit shall be completed no later than

nine months after the close of the Grantee's year under audit.

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(d) Sub-recipient Audits. The Grantee, except as the Parties may otherwise agree in

writing, shall submit to USAID, in form and substance satisfactory to USAID, a plan for

the audit of the expenditures of "covered" sub-recipients, as defined below, that receive

funds under this Agreement pursuant to a direct contract or agreement with the Grantee.

(1) A "covered" sub-recipient is one who expends $300,000 or more in its fiscal

year in "USAID awards" (i.e., as recipients of USAID cost reimbursable contracts, grants

or cooperative agreements and as sub-recipients under USAID strategic objective and

other grant agreements with foreign governments).

(2) The plan shall describe the methodology to be used by the Grantee to satisfy

its audit responsibilities for covered sub-recipients. The Grantee may satisfy such audit

responsibilities by relying on independent audits of the sub-recipients; expanding the

scope of the independent financial audit of the Grantee to encompass testing of sub-

recipients' accounts; or a combination of these procedures.

(3) The plan shall identify the funds made available to covered sub-recipients that

will be covered by audits conducted in accordance with other audit provisions that would

satisfy the Grantee's audit responsibilities. (A nonprofit organization organized in the

United States is required to arrange for its own audits. A for-profit contractor organized

in the United States that has a direct contract with USAID is audited by the cognizant

U.S. Government Agency. A private voluntary organization organized outside the United

States with a direct grant from USAID is required to arrange for its own audits. A host-

country contractor should be audited by the Grantee’s auditing agency.)

(4) The Grantee shall ensure that covered sub-recipients under direct contracts

or agreements with the Grantee take appropriate and timely corrective actions; consider

whether sub-recipients' audits necessitate adjustment of its own records; and require

each such sub-recipient to permit independent auditors to have access to records and

financial statements as necessary.

(e) Audit Reports. The Grantee shall furnish or cause to be furnished to USAID an audit

report for each audit arranged for by the Grantee in accordance with this Section within

30 days after completion of the audit and no later than nine months after the end of the

period under audit.

(f) Other Covered Sub-recipients. For "covered" sub-recipients who receive funds under

the Agreement pursuant to direct contracts or agreements with USAID, USAID will

include appropriate audit requirements in such contracts or agreements and will, on

behalf of the Grantee, conduct the follow-up activities with regard to the audit reports

furnished pursuant to such requirements.

(g) Cost of Audits. Subject to USAID approval in writing, costs of audits performed in

accordance with the terms of this Section may be charged to the Agreement.

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(h) Audit by USAID. USAID retains the right to perform the audits required under this

Agreement on behalf of the Grantee by utilizing funds under the Agreement or other

resources available to USAID for this purpose, conduct a financial review, or otherwise

ensure accountability of organizations expending USAID funds regardless of the audit

requirement.

(i) Opportunity to Audit or Inspect. The Grantee shall afford authorized representatives

of USAID the opportunity at all reasonable times to audit or inspect activities financed

under the Agreement, the utilization of goods and services financed by USAID, and

books, records and other documents relating to the Agreement.

(j) Sub-recipient Books and Records. The Grantee will incorporate paragraphs (a), (b),

(d), (e), (g), (h) and (i) of this provision into all sub-agreements with non-U.S.

organizations which meet the $300,000 threshold of paragraph (c) of this provision.

Sub-agreements with non-U.S. organizations, which do not meet the $300,000

threshold, shall, at a minimum, incorporate paragraphs (h) and (i) of this provision. Sub-

agreements with U.S. organizations shall state that the U.S. organization is subject to

the audit requirements contained in OMB Circular A-133.

Section B.6. Completeness of Information. The Grantee confirms:

(a) that the facts and circumstances of which it has informed USAID, or caused USAID

to be informed, in the course of reaching agreement with USAID on the Agreement, are

accurate and complete, and include all facts and circumstances that might materially

affect the Agreement and the discharge of responsibilities under this Agreement; and

(b) that it will inform USAID in timely fashion of any subsequent facts and circumstances

that might materially affect, or that it is reasonable to believe might so affect, the

Agreement or the discharge of responsibilities under this Agreement.

Section B.7. Other Payments. Grantee affirms that no payments have been or will be

received by any official of the Grantee in connection with the procurement of goods or

services financed under the Agreement, except fees, taxes, or similar payments legally

established in the country of the Grantee.

Section B.8. Information and Marking. The Grantee will give appropriate publicity to the

Agreement as a program to which the United States has contributed, identify Agreement

activity sites, and mark goods financed by USAID, as described in Implementation

Letters.

Article C: Procurement Provisions.

Section C.1. Source and Origin.

C.1. Source and Origin. [If the authorized Geographic Code for foreign exchange

procurement is Code 000, insert the following paragraph (a):

(a) Foreign Exchange Costs. Disbursements for Foreign Exchange Costs will be used

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exclusively to finance the costs of goods and services required for the Agreement

having, with respect to goods, their source and origin and, with respect to the suppliers

of goods and services, their nationality, in the United States (USAID Geographic Code

000), except as USAID may otherwise agree in writing.

[Alternatively, if the authorized Geographic Code for foreign exchange procurement is other

than Code 000, insert the following paragraph (a):

(a) Foreign Exchange Costs. Disbursements for Foreign Exchange Costs will be used

exclusively to finance the costs of goods and services required for the Agreement

having, with respect to goods, their source and origin and, with respect to the suppliers

of goods and services, their nationality, in countries included in Geographic Code ___ as

in effect at the time orders are placed or contracts entered into for such goods or

services, except as USAID may otherwise agree in writing and as follows:

(1) Ocean transportation costs shall be financed under the Agreement only on

vessels under flag registry of countries included in Code 935. Also see Section

C.6 on use of U.S. flag vessels.

(2) The country of the Grantee is an eligible source for Foreign Exchange Cost

for marine insurance, if otherwise eligible under Section C.7(a).

(3) Any motor vehicles financed under the Agreement will be of United States

manufacture, except as USAID may otherwise agree in writing. ]

(b) Local Currency Costs. Disbursements for Local Currency Costs will be used

exclusively to finance the costs of goods and services required for the Agreement which

meet the requirements of USAID’s local procurement policy which will be provided in an

Implementation Letter.

vessel's or aircraft's country of registry at the time of shipment.

(d) Provisions concerning restricted and ineligible goods and services may be

provided in an Implementation Letter.

(e) Transportation by air of property or persons financed under this agreement will be on

carriers holding United States certification, to the extent service by such carriers is

available under the Fly America Act. This requirement may be further described by

USAID in Implementation Letters.

Section C.2. Eligibility Date. No goods or services may be financed under the

Agreement which are procured pursuant to orders or contracts firmly placed or entered

into prior to the date of this Agreement, except as the Parties may otherwise agree in

writing.

Section C.3. Plans, Specifications and Contracts. In order for there to be mutual

agreement on the following matters, and except as the Parties may otherwise agree in

writing:

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(a) The Grantee will furnish to USAID upon preparation:

(1) any plans, specifications, procurement or construction schedules, contracts,

or other documentation between the Grantee and third parties, relating to goods

or services to be financed under the Agreement, including documentation relating

to the prequalification and selection of contractors and to the solicitation of bids

and proposals. Material modifications in such documentation will likewise be

furnished USAID on preparation; and

(2) such documentation will also be furnished to USAID, upon preparation,

relating to any goods or services, which, though not financed under the

Agreement, are deemed by USAID to be of major importance to the Agreement.

Aspects of the Agreement involving matters under this subsection (a)(2) will be

identified in Implementation Letters.

(b) Documents related to the prequalification of contractors, and to the solicitation of

bids or proposals for goods and services financed under the Agreement will be approved

by USAID in writing prior to their issuance, and their terms will include United States

standards and measurements;

professional services, for construction services, and for such other services, equipment,

or materials as may be specified in Implementation Letters, will be approved by USAID

in writing prior to execution of the contract. Material modifications in such contracts will

also be approved in writing by USAID prior to execution; and

(d) Consulting firms used by the Grantee for the Agreement but not financed under the

Agreement, the scope of their services and such of their personnel assigned to activities

financed under the Agreement as USAID may specify, and construction contractors used

by the Grantee for the Agreement but not financed under the Agreement, shall be

acceptable to USAID.

Section C.4. Reasonable Price. No more than reasonable prices will be paid for any

goods or services financed, in whole or in part, under the Agreement. Such items will be

procured on a fair and, to the maximum extent practicable, competitive basis.

Section C.5. Notification to Potential Suppliers. To permit all United States firms to

have the opportunity to participate in furnishing goods and services to be financed under

the Agreement, the Grantee will furnish USAID such information with regard thereto, and

at such times, as USAID may request in Implementation Letters.

Section C.6. Transportation

(a) In addition to the requirements in Section C.1(a), costs of ocean or air transportation

and related delivery services may not be financed under the Grant, if the costs are for

transportation under an ocean vessel or air charter which has not received prior USAID

approval.

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(b) Unless USAID determines that privately owned United States-flag commercial ocean

vessels are not available at fair and reasonable rates for such vessels, or otherwise

agrees in writing:

(1) at least fifty percent (50%) of the gross tonnage of all goods (computed

separately for dry bulk carriers, dry cargo liners and tankers) financed by USAID

which may be transported on ocean vessels will be transported on privately

owned United States-flag commercial vessels; and

(2) at least fifty percent (50%) of the gross freight revenue generated by all

shipments financed by USAID and transported to the territory of the Grantee on

dry cargo liners shall be paid to or for the benefit of privately owned United

States-flag commercial vessels. Compliance with the requirements of (1) and (2)

of this subsection must be achieved with respect to both any cargo transported

from U.S. ports and any cargo transported from non-U.S. ports, computed

separately.

Section C.7. Insurance.

(a) Marine insurance on goods financed by USAID which are to be transported to the

territory of the Grantee may be financed as a Foreign Exchange Cost under this

Agreement provided

(1) such insurance is placed at the most advantageous competitive rate;

(2) such insurance is placed in a country which is authorized under Section

C.1(a); and

(3) claims thereunder are payable in U.S. dollars or any freely convertible

currency unless USAID agrees otherwise in writing.

If the Grantee (or government of the Grantee), by statute, decree, rule,

regulation, or practice discriminates with respect to USAID-financed procurement

against any marine insurance company authorized to do business in any State of

the United States, then all goods shipped to the territory of the Grantee financed

by USAID hereunder shall be insured against marine risks and such insurance

shall be placed in the United States with a company or companies authorized to

do marine insurance business in the United States.

(b) Except as USAID may otherwise agree in writing, the Grantee will insure, or

cause to be insured, goods financed under the Agreement imported for the Agreement

against risks incident to their transit to the point of their use under the Agreement; such

insurance will be issued on terms and conditions consistent with sound commercial

practice and will insure the full value of the goods. Any indemnification received by the

Grantee under such insurance will be used to replace or repair any material damage or

any loss of the goods insured or will be used to reimburse the Grantee for the

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replacement or repair of such goods. Any such replacement will be of source and origin

of countries listed in USAID Geographic Code 935 as in effect at the time of replacement

and, except as the Parties may agree in writing, will be otherwise subject to the

provisions of the Agreement.

Section C.8. U.S. Government-Owned Excess Property. The Grantee agrees that

wherever practicable United States Government-owned excess personal property, in lieu

of new items financed under the Grant, should be utilized. Funds under the Agreement

may be used to finance the costs of obtaining such property.

Article D: Disbursements. [D.1 2 and 3 are optional; clause can provide that disbursements

will be made through such means as the Parties agree to in writing or as set forth in Annex 1.]

Section D.1. Disbursement for Foreign Exchange Costs.

(a) After satisfaction of conditions precedent, if any, the Grantee may obtain

disbursements of funds under the Agreement for the Foreign Exchange Costs of goods

or services required for the Agreement in accordance with its terms, by such of the

following methods as may be mutually agreed upon:

(1) by submitting to USAID, with necessary supporting documentation as

prescribed in Implementation Letters, (A) requests for reimbursement for such

goods or services, or, (B) requests for USAID to procure commodities or services

in Grantee's behalf for the Agreement; or,

(2) by requesting USAID to issue Letters of Commitment for specified amounts

directly to one or more contractors or suppliers, committing USAID to pay such

contractors or suppliers for such goods or services.

(b) Banking charges incurred by the Grantee in connection with Letters of Commitment

will be financed under the Agreement unless the Grantee instructs USAID to the

contrary. Such other charges as the Parties may agree to may also be financed under

the Agreement.

Section D.2. Disbursement for Local Currency Costs.

(a) After satisfaction of conditions precedent, if any, the Grantee may obtain

disbursements of funds under the Agreement for Local Currency Costs required for the

Agreement in accordance with terms of this Agreement, by submitting to USAID, with

necessary supporting documentation as prescribed in Implementation Letters, requests

to finance such costs.

(b) The local currency needed for such disbursements may be purchased by USAID

with U.S. Dollars. The U.S. Dollar equivalent of the local currency made available

hereunder will be the amount of U.S. Dollars required by USAID to obtain the local

currency.

Section D.3. Other Forms of Disbursement. Disbursements may also be made through

such other means as the Parties may agree to in writing.

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Section D.4. Rate of Exchange. If funds provided under the Agreement are introduced

into the Cooperating Country by USAID or any public or private agency for purposes of carrying

out obligations of USAID hereunder, the Grantee will make such arrangements as may be

necessary so that such funds may be converted into local currency at the highest rate of

exchange which, at the time the conversion is made, is not unlawful in the country of the

Grantee to any person for any purpose.

Article E: Termination; Remedies.

Section E.1. Suspension and Termination.

(a) Either Party may terminate this Agreement in its entirety by giving the other Party 30

days written notice. USAID also may terminate this Agreement in part by giving the

Grantee 30 days written notice, and suspend this Agreement in whole or in part upon

giving the Grantee written notice. In addition, USAID may terminate this Agreement in

whole or in part, upon giving the Grantee written notice, if (i) the Grantee fails to comply

with any provision of this Agreement, (ii) an event occurs that USAID determines makes

it improbable that the Objective or Results of the Agreement or the assistance program

will be attained or that the Grantee will be able to perform its obligations under this

Agreement, or (iii) any disbursement or use of funds in the manner herein contemplated

would be in violation of the legislation governing USAID, whether now or hereafter in

effect.

(b) Except for payment which the Parties are committed to make pursuant to non-

cancellable commitments entered into with third parties prior to such suspension or

termination, suspension or termination of this entire Agreement or part thereof will

suspend (for the period of the suspension) or terminate, as applicable, any obligation of

the Parties to provide financial or other resources to the Agreement, or to the suspended

or terminated portion of the Agreement, as applicable. Any portion of this Agreement

which is not suspended or terminated shall remain in full force and effect.

USAID's expense, direct that title to goods financed under the Agreement, or under the

applicable portion of the Agreement, be transferred to USAID if the goods are in a

deliverable state.

Section E.2. Refunds.

(a) In the case of any disbursement which is not supported by valid documentation in

accordance with this Agreement, or which is not made or used in accordance with this

Agreement, or which was for goods or services not used in accordance with this

Agreement, USAID, notwithstanding the availability or exercise of any other remedies

under this Agreement, may require the Grantee to refund the amount of such

disbursement in U.S. Dollars to USAID within sixty (60) days after receipt of a request

therefor.

(b) If the failure of Grantee to comply with any of its obligations under this Agreement

has the result that goods or services financed or supported under the Agreement are not

SOAG Annex 2

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used effectively in accordance with this Agreement, USAID may require the Grantee to

refund all or any part of the amount of the disbursements under this Agreement for or in

connection with such goods or services in U.S. Dollars to USAID within sixty (60) days

after receipt of a request therefor.

continue, notwithstanding any other provision of this Agreement, for three years from the

date of the last disbursement under this Agreement.

(d) (1) Any refunds under subsections (a) or (b), or (2) any refund to USAID from a

contractor, supplier, bank or other third party with respect to goods or services financed

under the Agreement, which refund relates to an unreasonable price for or erroneous

invoicing of goods or services, or to goods that did not conform to specifications, or to

services that were inadequate, will (A) be made available first for the Agreement, to the

extent justified, and (B) the remainder, if any, will be applied to reduce the amount of the

Grant.

(e) Any interest or other earnings on funds disbursed by USAID to the Grantee under

this Agreement prior to the authorized use of such funds for the Agreement will be

returned to USAID in U.S. Dollars by the Grantee, unless USAID otherwise agrees in

writing.

Section E.3. Non-waiver of Remedies. No delay in exercising any right or remedy

accruing to a Party in connection with its financing under this Agreement will be construed as a

waiver of such right or remedy.

Section E.4. Assignment. The Grantee agrees, upon request, to execute an

assignment to USAID of any cause of action which may accrue to the Grantee in connection

with or arising out of the contractual performance or breach of performance by a Party to a

direct U.S. Dollar contract which USAID financed in whole or in part out of funds granted by

USAID under this Agreement.

Article F: Miscellaneous.

* Section F.1. Investment Promotion.

(a) Except as specifically set forth in the Grant or otherwise authorized by USAID in

writing, no funds or other support provided hereunder may be used for any activity that

involves investment promotion in a foreign country.

(b) In the event the Grantee is requested or wishes to provide assistance in the

above area or requires clarification from USAID as to whether the activity would be

consistent with the limitation set forth above, the Grantee must notify USAID and provide

a detailed description of the proposed activity. The Grantee must not proceed with the

activity until advised by USAID that it may do so.

recipients providing investment promotion services hereunder are made aware of the

restrictions set forth in this clause and must include this clause in all subcontracts and

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other sub-agreements entered into hereunder.

Section F.2. Voluntary Family Planning. Insert the following in the agreement and

implementation letter.

[Agreement Language]

The Parties agree that all USAID funds provided under this Agreement shall be used in

accordance with applicable United States policy and statutory requirements relating to voluntary

family planning projects, and that none of the USAID funds provided under this Agreement, or

goods or services financed by such funds, may be used for:

(a) the performance of abortion as a method of family planning or to motivate or coerce

any person to practice abortions;

(b) the performance of involuntary sterilizations as a method of family planning or to

coerce or provide any financial incentive to any person to undergo sterilizations; or

performance of, abortions or involuntary sterilizations as a method family planning.

(d) USAID will issue implementation letters that more fully describe the requirements of

this section.

[Implementation Letter Language]

(a) Voluntary Participation and Family Planning Methods

(1) The Grantee shall take any steps necessary to ensure that USAID funds

made available under this Agreement will not be used to coerce any individual to

practice methods of family planning inconsistent with such individual's moral,

philosophical, or religious beliefs. Further, the Grantee shall conduct its activities in a

manner which safeguards the rights, health and welfare of all individuals who take part in

the program.

(2) Activities which provide family planning services or information to individuals,

financed in whole or in part under this Agreement, shall provide a broad range of family

planning methods and services available in the country in which the activity is conducted

or shall provide information to such individuals regarding where such methods and

services may be obtained.

(b) Requirements for Voluntary Family Planning Projects

(1) A family planning “project” must comply with the requirements of this

paragraph.

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(2) A “project” is a discrete activity through which a governmental or

nongovernmental organization provides family planning services to people and for which

Development Assistance funds, or goods or services financed with such funds, are

provided under this Agreement, except funds solely for the participation of personnel in

short-term, widely attended training conferences or programs.

(3) Service providers and referral agents in the project shall not implement or be

subject to quotas or other numerical targets of total number of births, number of family

planning acceptors, or acceptors of a particular method of family planning. Quantitative

estimates or indicators of the number of births, acceptors, and acceptors of a particular

method that are used for the purpose of budgeting, planning, or reporting with respect to

the project are not quotas or targets under this paragraph, unless service providers or

referral agents in the project are required to achieve the estimates or indicators.

(4) The project shall not include the payment of incentives, bribes, gratuities or

financial rewards to (I) any individual in exchange for becoming a family planning

acceptor or (ii) any personnel performing functions under the project for achieving a

numerical quota or target of total number of births, number of family planning acceptors,

or acceptors of a particular method of contraception. This restriction applies to salaries

or payments paid or made to personnel performing functions under the project if the

amount of the salary or payment increases or decreases based on a predetermined

number of births, number of family planning acceptors, or number of acceptors of a

particular method of contraception that the personnel affect or achieve.

(5) No person shall be denied any right or benefit, including the right of access to

participate in any program of general welfare or health care, based on the person's

decision not to accept family planning services offered by the project.

(6) The project shall provide family planning acceptors comprehensible

information about the health benefits and risks of the method chosen, including those

conditions that might render the use of the method inadvisable and those adverse side

effects known to be consequent to the use of the method. This requirement may be

satisfied by providing information in accordance with the medical practices and

standards and health conditions in the country where the project is conducted through

counseling, brochures, posters, or package inserts.

(7) The project shall ensure that experimental contraceptive drugs and devices

and medical procedures are provided only in the context of a scientific study in which

participants are advised of potential risks and benefits.

(8) With respect to projects for which USAID provides, or finances the

contribution of, contraceptive commodities or technical services and for which there is no

sub-agreement under paragraph (e), the organization implementing a project for which

such assistance is provided shall agree that the project will comply with the requirements

of this paragraph while using such commodities or receiving such services.

(9) (i) The Grantee shall notify USAID when it learns about an alleged violation in

a project of the requirements of subparagraphs (3), (4), (5) or (7) of this paragraph; (ii)

the Grantee shall investigate and take appropriate corrective action, if necessary, when

SOAG Annex 2

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it learns about an alleged violation in a project of subparagraph (6) of this paragraph and

shall notify USAID about violations in a project affecting a number of people over a

period of time that indicate there is a systemic problem in the project. (iii) The Grantee

shall provide USAID such additional information about violations as USAID may request.

(1) None of the funds provided under this Agreement shall be used to pay for the

performance of involuntary sterilization as a method of family planning or to coerce or

provide any financial incentive to any individual to practice sterilization.

(2) The Grantee shall ensure that any surgical sterilization procedures supported

in whole or in part by this Agreement are performed only after the individual has

voluntarily appeared at the treatment facility and has given informed consent to the

sterilization procedure. Informed consent means the voluntary, knowing assent from the

individual after being advised of the surgical procedures to be followed; the attendant

discomforts and risks; the benefits to be expected; the availability of alternative methods

of family planning; the purpose of the operation and its irreversibility; and the option to

withdraw consent anytime prior to the operation. An individual's consent is considered

voluntary if it is based upon the exercise of free choice and is not obtained by any

special inducement or any element of force, fraud, deceit, duress, or other forms of

coercion or misrepresentation.

(3) Further, the Grantee shall document the patient’s informed consent by (i) a

written consent document in a language the patient understands and speaks, which

explains the basic elements of informed consent, as set out above, and which is signed

by the individual and by the attending physician or by the authorized assistant of the

attending physician; or (ii) when a patient is unable to read adequately, a written

certification by the attending physician or by the authorized assistant of the attending

physician that the basic elements of informed consent above were orally presented to

the patient and that the patient thereafter consented to the performance of the operation.

The receipt of this oral explanation shall be acknowledged by the patient’s mark on the

certification and by the signature or mark of a witness who shall speak the same

language as the patient.

(4) The Grantee must retain copies of informed consent forms and certification

documents for each voluntary sterilization procedure for a period of three years after

performance of the sterilization procedure.

(d) Abortion restrictions

(1) None of the USAID funds provided under this Agreement shall be used to

finance, support, or be attributed to the following activities: (i) procurement or

distribution of equipment intended to be used for the purpose of inducing abortions as a

method of family planning; (ii) special fees or incentives to women to coerce or motivate

women to have abortions; (iii) payments to persons to perform abortions or to solicit

women to undergo abortions; (iv) information, education, training, or communication

programs that seek to promote abortion as a method of family planning; and (v) lobbying

for abortion.

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(2) None of the USAID funds provided under this Agreement shall be used to pay

for any biomedical research, which relates, in whole or in part, to methods of, or the

performance of, abortions or involuntary sterilizations as a means of family planning.

Epidemiologic or descriptive research to assess the incidence, extent or consequences

of abortions is not precluded.

(e) Requirement for Sub-agreements

The Grantee shall insert these requirements in all sub-agreements involving family

planning or population activities which will be supported in whole or in part with USAID

funds under the Agreement.”

Section F.3. Prohibition on Assistance to Drug Traffickers.

(a) USAID reserves the right to terminate this Agreement or take other appropriate

measures if the Grantee or a key individual of the Grantee is found to have been

convicted of a narcotics offense or to have been engaged in drug trafficking as defined in

22 CFR Part 140.

[If there are COVERED PARTICIPANTS]

(b) USAID reserves the right to terminate assistance to, or take or take other appropriate

measures with respect to, any participant approved by USAID who is found to have been

convicted of a narcotics offense or to have been engaged in drug trafficking as defined in

22 CFR Part 140.

[If there are LOANS OVER $1000]

insert a clause in the loan agreement stating that the loan is subject to immediate

cancellation, acceleration, recall or refund by the Grantee if the borrower or a key

individual of a borrower is found to have been convicted of a narcotics offense or to have

been engaged in drug trafficking as defined in 22 CFR Part 140.

(d) Upon notice by USAID of a determination under section (x) and at USAID's option,

the Grantee agrees to immediately cancel, accelerate or recall the loan, including refund

in full of the outstanding balance. USAID reserves the right to have the loan refund

returned to USAID.

[If there is a DESIGNATED SUBRECIPIENT - modify the clause to fit the category of sub-

recipient, e.g., if the designated sub-recipient is a U.S. NGO, review is not required and

subparagraph (1) can be deleted]

(e) The Grantee agrees not to disburse, or sign documents committing the Grantee to

disburse, funds to a sub-recipient designated by USAID ("Designated Sub-recipient")

until advised by USAID that: (1) any United States Government review of the Designated

Sub-recipient and its key individuals has been completed; (2) any related certifications

have been obtained; and (3) the assistance to the Designated Sub-recipient has been

SOAG Annex 2

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approved.

(1) The Grantee shall insert the following clause, or its substance, in its

agreement with the Designated Sub-recipient:

(2) The Grantee reserves the right to terminate this Agreement or take other

appropriate measures if the [Sub-recipient] or a key individual of the [Sub-recipient] is

found to have been convicted of a narcotic offense or to have been engaged in drug

trafficking as defined in 22 CFR Part 140.”

* Section F.4. Workers’ Rights.

(a) Except as specifically set forth in the Grant or otherwise authorized by USAID in

writing, no funds or other support provided hereunder may be used for any activity that

involves workers’ rights in a foreign country.

(b) In the event the Grantee is requested or wishes to provide assistance in the

above area or requires clarification from USAID as to whether the activity would be

consistent with the limitation set forth above, the Grantee must notify the USAID and

provide a detailed description of the proposed activity. The Grantee must not proceed

with the activity until advised by USAID that it may do so.

recipients providing employment-related services hereunder are made aware of the

restrictions set forth in this clause and must include this clause in all subcontracts and

other sub-agreements entered into hereunder.

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