THIS NOTICE OF INTENT IS NOT A REQUEST FOR PROPOSALS. This notice is for informational purposes only and is not to be construed as a commitment by the Government. In accordance with FAR 6.302-1 and 41 USC 25(c)(1), the service needed by the USDA is available from only one responsible source and no other type of service will satisfy the needs of the USDA. This notice is not a request for competitive quotations. No solicitation document is available and telephone requests will not be honored. Potential sources who believe they can provide the services listed are invited to submit substantiating documentation in writing to the identified point of contact. Information received will be considered solely for the purposes of determining whether to conduct a competitive procurement. Oral communications are not acceptable in response to this notice. A determination by the Government to compete this proposed contract based on responses to this notice is solely at the discretion of the Government. The United States Department of Agriculture (USDA), Economic Research Service (ERS), intends to award a sole source contract to Oxford Economics USA, Inc for Long-Term Macroeconomic Forecasting and Analysis of Macroeconomic Shocks Affecting U.S. Agriculture. The Point of Contact for this action is Ms. Marian Dixon-Durham and any response must be emailed to
[email protected]. Verbal responses are not acceptable and will not be considered. Interested parties may identify their interest and capability to respond to this requirement no later than June 16, 2014. The NAICS Code for this requirement is 518210 Data Processing, Hosting, and Related Services 1.0 Introduction The Economic Research Service (ERS) plays a strategic role in developing the USDA Baseline and in undertaking analysis of the implications to U.S. agriculture of macroeconomic shocks both in the United States and around the world. In undertaking such a role, the macro analysts at ERS draw on a variety of resources from outside of the Department of Agriculture. One such required tool is a global model of the macro economy. This desktop computer model facilitates undertaking a variety of simulation and scenario analysis on the global economy. ERS does not have the internal resources to develop and maintain such a model. It is therefore necessary that we purchase such from an outside vendor. 2.0 Background ERS needs monthly and quarterly reports containing consistent US and International macroeconomic forecasts, along with the model and data used in creating those forecasts with a data history of at least 30 years. The monthly forecast needs to go out at least 5 years, with 10 year time horizons or longer provided at least 4 times a year. The model needs to be usable in performing complex analyses of policy decisions as well as reflect the interdependence of individual countries in the global market in Windows-based PC software. The organization providing this has to have at least a ten-year track record. 3.0 Scope This Statement of Work covers the provision of modeling, data, forecast analysis, and training. This contract could last from 1 July 2014 - 30 June 2018. ERS' main objectives for this modeling and forecasting service are to improve its function in providing USDA with long-term macroeconomic forecasts which are used in the USDA Baseline and other USDA outlook analysis, to provide USDA with analysis of the implication of a variety of macroeconomic shock on U.S. agriculture as they arise, and to have access to an extensive historical and projections database of macroeconomic variable for both the United States and countries around the world. 4.0 Tasks This project shall consist of: • A Windows compatible global macroeconomic model that is usable in generating tabulated reports. The model shall be installable on standard PCs, and the ERS LAN with the ability to be modified by users. • The forecast database shall to be provided monthly to ERS and electronically via the internet including the updated historical data set used in the construction of the model. This data set shall be updated monthly as new data become available. • Monthly and quarterly reports containing forecasts and analysis of US and other countries economies downloadable using the internet for installation on the ERS local area network. The reports are to be in PDF and MS Word format to facilitate dissemination to other USDA analysts. • Training, documentation, and technical support for these products and services. This includes up to 2 training sessions at ERS's discretion and 5 invitations to major vendor forecast presentations. 4.1 The Forecasting and Policy Simulation Model The model shall be estimated using quarterly data and shall be updated monthly as new releases of data become available. The model shall be composed of a set of individual country models that solve in an iterative process to one global solution for the values of all endogenous variables, where global trade is balanced. The model shall be easily solvable for an individual country or any subset of countries. The primary countries in the model shall include: • United States, Belgium, Japan, Sweden, Germany, Austria, France, Switzerland, Italy, Denmark, United Kingdom, Finland, Canada, Norway, Mexico, China (Mainland), Australia, Taiwan, Spain, South Korea, Netherlands, Hong Kong, Argentina, Brazil, Indonesia The endogenous variables available for each of these countries shall include: • Real Gross Domestic Product (GDP), fixed investment, inventories, consumption, exports of goods and services, current account balance, money supply, short-term interest rate, long-term interest rate, effective exchange rate, stock market price index, expected interest rate, labor supply, labor force participation rate, unemployment rate, natural unemployment rate, potential output, output gap, employment, and average earnings. The GDP and major components shall be available in nominal and real terms, and price deflators shall be included. Exchange rates shall be available in nominal and real terms as shall oil prices. Exogenous variables shall include government spending and tax rates for the larger economies. The exchange rates shall be endogenous although it shall be possible to treat them as exogenous variables and simulate the implications of shocks to them. Interest rates shall be determined by a central bank reaction function with the option of treating them as exogenous variables or incorporating an alternative reaction function. Furthermore, it shall be possible to set a target for money growth and determine the interest rates to achieve that target. In addition, there are key world variables common to all countries, e.g. the world oil price, other world commodity prices. The world oil price shall be endogenous, and shall be used as a lever for model shocks. The secondary countries in the model shall be: • Algeria, Argentina, Brazil, Bulgaria, Chile, Columbia, Czech Republic, Dominican Republic, Egypt, Greece, India, Indonesia, Iraq, Israel, Kenya, Malaysia, Myanmar, New Zealand, Panama, Paraguay, Peru, Poland, Romania, Russian Federation, Singapore, Slovak Republic, Sudan, Syria, Turkey, Tunisia, Ukraine, Uruguay, Viet Nam, Bolivia, Cameroon, Costa Rica, Ecuador, Hungary, Iran, Kazakstan, Morocco, Pakistan, Philippines, Portugal, Saudi Arabia, South Africa, Thailand, Uganda, Venezuela For the secondary countries, the model shall solve for values of: • Real GDP price level, current account balance, exchange rate with additional variables similar to the large country specification as desirable. Note: All variables are stored in the model in level form, but the Windows software interface shall allow the data to be viewed in growth rates if desired in a spreadsheet format. Model Performance Criteria The model shall be installable on any PC that uses Windows on an ERS network and individual analyst's desktops. In this Windows application program, users shall be able to examine variable values, change those values, solve the model, and save the new solution as a separate database. The user shall be able to track the historical fit of any equation, add new endogenous equations, and even alter existing equations. Graphs of any data series shall be readily created, including data series that are calculated from model data, e.g. the ratio of consumer spending to overall GDP. A large number of standard tables shall be available, which are easily produced from any solution of the model, and data shall be exportable to standard spreadsheet applications, such as Excel and other statistical packages. There shall also be a facility that enables a user to define custom tables. In addition, data should be importable from spreadsheets, and equations should be importable from PC-GIVE or E-Views. Model documentation shall be available in PDF and/or MS Word formats. A model overview shall provide a recent description of the structure and theory of the model. Data Set Requirement The model shall include a data set that covers the history of each variable back to 1980. Additional data as far back as 1973 shall be available as requested by ERS. The monthly data releases, shall include the historical and forecast data and any documentation and software changes shall be available via the internet. As mentioned above, ERS analysts shall have the ability to create graphs and tables with any combination of variables desired. 4.2 A User Guide shall provide documentation on the software in PDF format. Any additional model documentation shall be in electronic form and provided with each database. For each country model there shall be a file that contains all equations and identities, along with the estimation statistics for the key equations. For each country, there shall be another file that provides information on each variable and its model mnemonic, description, source and any transformation. Within the software, the ERS user shall be able to call up a screen of information on any variable. In addition to the mnemonic, description, source and equation (or indication that the variable is exogenous), the screen shall indicate the last period of actual data and a list of other variables in the model that are affected by the selected variable. 4.3 Monthly Reports Monthly reports shall be downloadable in PDF and MS Word format and contain concise analysis of the major economic conditions of each of the G7 countries (US, Canada, Germany, UK, Italy, France, and Japan) and an overview, which shall cover topics from any part of the world. The monthly report shall contain summary tables that cover two years of history and four of forecast, with the database having five years of forecast. The series covered in these tables shall be: • Real GDP, short-term interest rate, consumers expenditure, long-term interest rate, real disposable income, current account balance (level and as % of GDP), savings ratio, exchange rate, industrial production, government balance (level and as % of GDP), unemployment rate, consumer prices, average earnings, producer prices, and productivity . Reports are due not later than 15th of each month. 4.4 Quarterly Reports Quarterly reports shall consist of 10-year projections and contain longer commentaries on the G7 economies. Forecast commentary and tables shall be included for the following non-G7 economies: Mexico, Spain, Sweden, Belgium, Netherlands, Switzerland, Austria, Australia, South Korea, China, and Taiwan and Hong Kong. Similar information on Argentina, the Philippines and Brazil shall be provided. The forecast tables shall include the following variables: • Real GDP, inventories, exports of goods, exports of services, money supply, long-term interest rate, stock market price index, labor supply, unemployment rate, potential output, employment, fixed investment, consumption, current account balance, short-term interest rate, effective exchange rate, expected interest rate, labor force participation rate, natural unemployment rate, output gap, average earnings, and price deflators for GDP and its major components. Secondary countries shall include: • Algeria, Brazil, Chile, Czech Republic, Egypt, India, Iraq, Kenya, Myanmar, Panama, Peru, Romania, Singapore, Sudan, Turkey, Ukraine, Viet Nam, Argentina, Bulgaria, Columbia, Dominican Republic, Greece, Indonesia, Israel, Malaysia, New Zealand, Paraguay, Poland, Russian Federation, Slovak Republic, Syria, Tunisia, Uruguay, Bolivia, Cameroon, Costa Rica, Ecuador, Hungary, Iran, Kazakhstan, Morocco, Pakistan, Philippines, Portugal, Saudi Arabia, South Africa, Thailand, Uganda, and Venezuela. Tables shall include four years of forecasts. Variables required are: • Gross domestic product (growth), current account balances, consumer prices (inflation rate), and exchange rate (per US dollar) Annual forecast are provided for the secondary countries. Each quarter a long-term, i.e. 10 year forecast shall be prepared for all the countries in the model. Tables covering all of the variables listed above shall be able to be printed by the model user through the software provided by vendor. For the G7 countries, two pages of analysis and description of the long-term forecast shall be provided at least semi-annually. A brief description for the long-term trends for the secondary countries shall be produced on an annual basis. Quarterly Reports are due not later than the 15th day of September, December, March and June 4.5 Training and Support Training on model use shall be provided at the ERS site for up to 25 ERS analysts within 90 days after award. Refresher or subsequent training sessions shall be provided in the option years if requested. Support shall be provided between 9 am and 5 pm EST, either via telephone or e-mail to answer questions on the forecasts, reports, and/or software performance. 4.6 Client Meetings Invitations The contractor shall invite 5 ERS staff to all semiannual client meetings held in the Washington, DC area.