20. Article

U.S. Technology and Equipment By funding this TA, USTDA seeks to promote the project objectives of the Host Country through the use of U.S. technology, goods, and services. In recognition of this purpose, the Grantee agrees that it will allow U.S. suppliers to compete in the procurement of technology, goods and services needed for Project implementation. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the Government of the United States of America and the Government of the Republic of Latvia, each acting through its duly authorized representative, have caused this Agreement to be signed in the English language in their names and delivered as of the day and year written below. In the event that this Grant Agreement is signed in more than one language, the English language version shall govern. For the Government of the United States of America For the Government of the Republic of Latvia By: Catherine Todd Bailey By: Krišjānis Peters Date: September 12, 2006 Date: September 12, 2006 Witnessed: Witnessed: By:_______________ By:_______________ Annex I -- Terms of Reference Annex II -- USTDA Mandatory Clauses Annex I Terms of Reference The Latvian Ministry of Transportation is interested in conducting a comprehensive review of port security at the Ports of Riga, Ventspils and Liepaja that would lead to an overall integrated master security plan for the three ports. The plan would be designed to protect people, infrastructure and equipment against security incidents and their devastating effects. Recognizing that Latvia is a small nation with limited resources, the plan would need to make the best use of existing resources, ensure that actions taken achieve clear improvements in overall port security with the greatest economy of actions, and that new technology and equipment recommended for purchase under this endeavor would be effective and, when properly used, be able to discern illegal and hazardous materials, their components, and other contraband. The goal of this TA is to re-engineer the security processes of each port authority, terminal operators, and other entities operating within the port to provide a layered security system that meets the security needs of each component but which, working together as a designed system, achieves overall port security that can be centrally managed. The TA would determine equipment, training, information technology (IT) support, and other requirements for the port security operating system. Task 1: Planning and Analysis The Contractor shall initially review the cargo flows through the three ports of Riga, Ventspils and Liepaja, including the types of cargo and the origins and destinations, to get a basic understanding of the ports' economic conditions and the risk imposed by the cargo. The Contactor shall conduct research to gain an understanding of ports' operations, and shall interview persons via phone and email who have direct knowledge of ports' operations and issues prior to departing for work in-country. The Contractor shall perform sufficient research to gain an in-depth understanding of the economics of the ports and their risk conditions prior to departure for Latvia so as to maximize the use of time while in-country focusing on operational and security issues. The Contractor shall provide a brief report on the findings from the research gathered. Task 2: Review of Security Assessments, Security Plans, Security Training, Information Technology Support and Security Infrastructure The Contractor shall review the current security measures that the terminals and other firms operating in the ports developed in response to threat assessments and the International Maritime Organization's (IMO) International Ship and Port Security Code (ISPS) requirements. The initial review shall include collecting all previous security assessments and security plans for the terminals and other firms and any assessments and plans that have been done by the port authorities. The Contractor shall, if required by the Grantee, enter into confidentiality and/or non disclosure agreements with the firms and the port authority. The Contractor shall respect the confidentiality provisions of the ISPS code and shall carry out the review and evaluations recognizing the confidentiality requirements and shall maintain close control of documents and information. In some cases certain security reviews and assessments are classified as confidential, and the Grantee will not be able to fully disclose those documents to the Contractor. In these cases, the Grantee shall provide summaries or other descriptive materials that will be sufficient to allow the Contractor to conduct the reviews. The Contractor shall conduct an inventory of all security assessments, security plans, security procedures, security training, security equipment, security infrastructure, access controls, IT infrastructure that supports security, and other information it deems necessary to construct a baseline of the current security capabilities in each of the ports. The review shall include all areas within the territory of each port, including waterside operations and approaches to each port, areas adjacent to the port and other areas that have a direct bearing on port security. Deliverable: The Contractor shall prepare a comprehensive report on the current security conditions within the ports that shall serve as a baseline for recommendations to create port-wide security plans. Task 3: Evaluate the Overall Security Conditions of the Ports The Contractor shall evaluate the overall state of security within each of the ports. The Contractor shall identify best practices where security is being carried out in an exemplary manner. It shall identify gaps in security in terms of processes, training, equipment, infrastructure, cooperation among entities, or any other matter having an adverse impact on achieving high levels of security within the ports. Deliverable: The Contractor shall prepare a comprehensive evaluation of the overall security conditions of the ports, built on the baseline established in Task 2. Task 4: Defining a Port Security Model and Implementation Plan for the Ports The Contractor shall construct a working definition of port security appropriate for each of the three ports that comports with the ISPS Code, European Union (EU) Code EU/2004/725 on enhancing ship and port facility security, 2005/65/EC on enhancing port security, and other relevant EU regulations. The Contractor shall then construct a strategy which can be implemented by the ports that will allow for centralized coordination and oversight by the port authorities and that will achieve high degrees of security within each of the three ports. The end product of the TA shall be an integrated plan to manage all the diverse elements that operate within each port using a "systems" approach to security management. Each component of security within each of the ports is now managed to optimize the security performance of each separate element within each port, and there is only rudimentary oversight of the entire port. The goal of this task is to create a security master plan for each port authority and to modify or revise the component parts so as to contribute to the optimization of the overall port security system. The approach would bring an economy of actions in that it will maximize the use of equipment and resources that are already in the ports, and will reorient their use to support the overall security plan. The goal of this task is to provide a layered security system that meets the security needs of each component and which, working together as a designed system, achieves overall port security that can be centrally managed, thus establishing a "systems" approach to security management. The Contractor shall determine equipment, training, IT support, and other requirements necessary to design and implement the port security operating system. The implementation plan shall meet the needs of the three ports to demonstrably increase levels of port-wide security and to be in consonance with the regulatory requirements of the European Union. The Contractor shall present the revised master security plans for each port as recommendations to the Grantee. The Grantee shall review the recommendations with other governmental entities and shall provide comments and/or requests for changes to the master security plans to the Contractor. The final determination by the Grantee on the implementation of the recommendations and security master plans will be made in accordance with governing procedures within Latvia. Deliverable: The Contractor shall prepare a comprehensive strategy and implementation plan that can be implemented by each of the ports; that will provide for centralized coordination and oversight by each of the port authorities; and that will achieve high degrees of security within each of the three ports. The implementation plan will include a training curriculum for managers and employees within the three ports that Latvian port officials and the Grantee may use in developing specific training for port and public sector employees related to the port. Task 5: Financing assessment The Contractor shall identify the likely financing sources for the full implementation of the recommendations of the TA, including multilateral development banks (such as the European Bank for Reconstruction and Development), export credit agencies, commercial lenders, and special environmental funds, and determine the terms and conditions of utilizing those funds relative to the TA and the implementation of its recommendations. Deliverable: The Contractor shall provide a detailed overview of the available financing options, including guarantees, direct loans and grants, along with the principal terms and conditions. The Contractor shall also provide an assessment of the effect that the available financing options would have on the implementation of the TA recommendations for the project structure and schedule. Finally, the Contractor shall provide a TA description and term sheet to be used by the Grantee in initiating negotiations with possible financial institutions. Task 6: Environmental and Developmental Impact Assessments The Contractor shall perform a preliminary environmental impact assessment of the TA. The primary objective of this task is to ensure that the TA and the implementation plans will comply with all relevant Latvian and European Union environmental regulations. The Contractor shall also prepare a report on the potential Development Impact of the TA in Latvia. In the report, the Contractor shall focus on what the economic development outcomes will be if the recommendations of the TA are fully implemented. While specific focus should be paid to the immediate impact of the TA, the Contractor shall include, where appropriate, any additional developmental benefits of the TA, including spin-off and demonstration effects. The analysis of potential benefits of the TA should be as concrete and detailed as possible. The Development Impact factors are intended to provide the TA's decision-makers and interested parties with a broader view of the TA's potential effects on Latvia. The Contractor shall provide estimates of the TA's potential benefits in the following areas: - Infrastructure: a statement on the infrastructure impact giving a brief synopsis. - Market-Oriented Reform: a description of any regulations, laws, or institutional changes that are recommended and the effect they would have if implemented. - Human Capacity Building: a description of the number and type of positions that would be needed to fully implement the recommendation of the TA as well as the number of people who will receive training and a brief description of the training program. - Technology Transfer and Productivity Enhancement: a description of any advanced technologies that will be implemented as a result of the TA. A description of any efficiency that will be gained. - Other: any other developmental benefits to the TA, including spin-off or demonstration effects. Deliverables: The Contractor shall prepare a preliminary environmental impact assessment report. In the report, the Contractor shall identify, and propose remedies for, any potential air, water, or noise pollution increases that might result from implementing the recommendations of the TA, as well as any environmental impacts that may result from the installation of new equipment. The primary objective of this task is to ensure that the proposed Project will comply with all relevant Latvian and European Union environmental regulations, and with the criteria of the Export-Import Bank of the United States covering port projects financed with credits or guarantees provided by the bank. The Contractor shall also prepare a comprehensive report on what the developmental impacts of the TA will be when it is fully implemented. Task 7: Final report The Contractor shall prepare a detailed and comprehensive Final Report in accordance with Clause I of Annex II of the Grant Agreement. The Final Report shall incorporate the key findings, recommendations, and conclusions of the TA and shall incorporate all other documents and/or reports provided pursuant to Tasks 1 through 6 above. It is the Contractor's responsibility to identify prospective U.S. Sources of Supply in the Final Report to be submitted to USTDA and the Grantee in accordance with Clause I of Annex II of the Grant Agreement. The U.S. Suppliers list shall identify the capabilities of each of the suppliers. The Final Report shall also include proposed methods of financing the Project. Conditions of Work Effort During the course of the TA the Contractor shall work closely with the staff and management of the Grantee, who shall cooperate fully in the timely completion of all TA tasks. The Grantee shall arrange for the prompt and complete submittal of all technical data necessary and appropriate for carrying out the TA. Recognizing that the documentation supporting the security programs is quite extensive, the Grantee shall provide translated summaries in English of documents as the government deems appropriate. The Contractor shall be responsible for preparing all reports and other documents resulting from the TA in English. Notes: (1) The Contractor is responsible for compliance with U.S. export licensing requirements, if applicable, in the performance of the Terms of Reference. (2) The Contractor and the Grantee shall be careful to ensure that the public version of the Final Report contains no security or confidential information. (3) The Grantee and USTDA shall have an irrevocable, worldwide, royalty-free, non-exclusive right to use and distribute the Final Report and all work product that is developed under these Terms of Reference. Annex II USTDA Mandatory Contract Clauses A. USTDA Mandatory Clauses Controlling The parties to this contract acknowledge that this contract is funded in whole or in part by the U.S. Trade and Development Agency ("USTDA") under the Grant Agreement between the Government of the United States of America acting through USTDA and the Government of the Republic of Latvia, acting through the Ministry of Transportation ("Client"), dated ___________ ("Grant Agreement"). The Client has selected ________________ ("Contractor") to perform the technical assistance ("TA") for the Integrated Master Port Security Plan Project ("Project") in Latvia ("Host Country"). Notwithstanding any other provisions of this contract, the following USTDA mandatory contract clauses shall govern. All subcontracts entered into by Contractor funded or partially funded with USTDA Grant funds shall include these USTDA mandatory contract clauses, except for clauses B(1), G, H, I, and J. In addition, in the event of any inconsistency between the Grant Agreement and any contract or subcontract thereunder, the Grant Agreement shall be controlling. B. USTDA as Financier (1) USTDA Approval of Contract All contracts funded under the Grant Agreement, and any amendments thereto, including assignments and changes in the Terms of Reference, must be approved by USTDA in writing in order to be effective with respect to the expenditure of USTDA Grant funds. USTDA will not authorize the disbursement of USTDA Grant funds until the contract has been formally approved by USTDA or until the contract conforms to modifications required by USTDA during the contract review process. (2) USTDA Not a Party to the Contract It is understood by the parties that USTDA has reserved certain rights such as, but not limited to, the right to approve the terms of this contract and amendments thereto, including assignments, the selection of all contractors, the Terms of Reference, the Final Report, and any and all documents related to any contract funded under the Grant Agreement. The parties hereto further understand and agree that USTDA, in reserving any or all of the foregoing approval rights, has acted solely as a financing entity to assure the proper use of United States Government funds, and that any decision by USTDA to exercise or refrain from exercising these approval rights shall be made as a financier in the course of financing the TA and shall not be construed as making USTDA a party to the contract. The parties hereto understand and agree that USTDA may, from time to time, exercise the foregoing approval rights, or discuss matters related to these rights and the Project with the parties to the contract or any subcontract, jointly or separately, without thereby incurring any responsibility or liability to such parties. Any approval or failure to approve by USTDA shall not bar the Client or USTDA from asserting any right they might have against the Contractor, or relieve the Contractor of any liability which the Contractor might otherwise have to the Client or USTDA.