[Federal Register Volume 66, Number 57 (Friday, March 23, 2001)]
[Notices]
[Pages 16176-16184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-7272]


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DEPARTMENT OF COMMERCE

International Trade Administration

[Docket No. 970424097-1069-06]
RIN: 0625-ZA05


Market Development Cooperator Program

AGENCY: International Trade Administration (ITA), Commerce.

ACTION: Notice.

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SUMMARY: The ITA of the U.S. Department of Commerce (the Department) 
requests that eligible organizations submit proposals (applications) 
for the fiscal year (FY) 2001 Market Development Cooperator Program 
(MDCP) competition. The ITA creates economic opportunity for U.S. 
workers and firms by promoting international trade, opening foreign 
markets, ensuring compliance with U.S. trade laws and agreements, and 
supporting U.S. interests at home and abroad. The Department 
administers the MDCP to build public/private export marketing 
partnerships. The MDCP is a competitive matching grants program that 
provides Federal assistance to export multipliers such as state trade 
departments, trade associations, chambers of commerce, World Trade 
Centers and other non-profit industry organizations that are 
particularly effective in reaching small-and medium-size enterprises 
(SMEs).
    MDCP awards help to underwrite the start-up costs of new export 
marketing ventures which these groups are often reluctant to undertake 
without Federal Government support. The MDCP aims to:
     Challenge the private sector to think strategically about 
foreign markets;
     Be the catalyst that spurs private-sector innovation and 
investment in export marketing; and

[[Page 16177]]

     Increase the number of American companies, particularly 
SMEs, taking decisive export actions.
    Partnerships enable the Federal Government to pool expertise and 
funds with non-Federal sources so that each maximizes its market 
development resources. They can also sharpen the focus on long-term 
export market development better than traditional trade promotion 
activities. These partnerships are also a mechanism for improving 
government-industry relations.
    While the Department sponsors, guides and partially funds MDCP 
projects, it expects applicants to develop, initiate and provide 
matching funding to carry out market development project activities. As 
an active partner, the Department will, as appropriate, provide 
assistance that the applicant identifies as essential to the 
achievement of project goals and objectives.
    Examples of activities that might be included in an applicant's 
project proposal are described below under ``I. Program Description''. 
The Department encourages applicants to propose activities that (1) 
would be most appropriate to the market development needs of their 
industry or industries; and (2) display the imagination and innovation 
of the applicants working in partnership with the government to obtain 
the maximum market development impact.

DATES: Public Meeting: The Department will hold a public meeting to 
discuss MDCP proposal preparation, procedures, and selection process on 
Wednesday, April 18, 2001. The meeting will begin at 10 a.m. in Room 
3407, at the Herbert Clark Hoover Building, 14th and Constitution 
Avenue, NW., Washington, DC. No discussion of specific proposals will 
occur at this meeting. Attendance at this public meeting by potential 
applicants is not required.
    Applications: Complete applications must be received no later than 
5 p.m. Eastern Daylight Time, May 18, 2001. Late applications will not 
be accepted. They will be returned to the sender.
    As set forth under III.B.2. Number of Copies, ITA is requesting one 
original application, plus seven (7) copies. Applicants for whom this 
is a financial hardship should submit an original and two copies. Send 
the application to the address listed below under ``For Further 
Information Contact.''

FOR FURTHER INFORMATION CONTACT: Mr. Brad Hess, Manager, Market 
Development Cooperator Program, Trade Development, ITA, U.S. Department 
of Commerce, 14th Street and Constitution Avenue, N.W., Room 3215, 
Washington, D.C. 20230, (202) 482-2969. The e-mail address is 
[email protected]. The fax number is (202) 482-4462.
    Information Online: Information on the Internet is available at 
http://www.export.gov/mdcp.
    Application Kit: A kit with all forms necessary to participate in 
the MDCP application process is available at the Internet address 
identified above. This application kit also may be obtained via first-
class mail by sending a legible mailing address to the ``Contact'' 
address listed above. The address as received will serve as the label 
for mailing a reply.
    Pre-Application Counseling: Applicants with questions should 
contact the Department as soon as possible, while continuing to prepare 
their proposals. The Department will not extend the deadline for 
submitting applications.
    Once the annual announcement is published in the Federal Register, 
the Department does not provide applicants or potential applicants with 
guidance regarding the merits of their applications or potential 
applications. Between the date of the announcement and the deadline for 
submitting applications, the Department may respond to potential 
applicants's questions regarding eligibility, technical issues, 
procedures, general information and referral. For example, the 
Department may refer a potential applicant to sources for market 
research on a foreign market identified by the potential applicant. 
However, to continue the example, the Department may not comment on the 
merits of including that market in its proposal, or suggest an 
alternative market.

SUPPLEMENTARY INFORMATION: Authority: The Omnibus Trade and 
Competitiveness Act of 1988, Public Law 100-418, Title II, sec. 2303, 
102 Stat. 1342, 15 U.S.C. 4723.\1\
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    \1\ Unless otherwise noted, all legal authorities cited in this 
notice may be accessed via the Internet at http://www.access.gpo.gov/ or at http://wwwsecure.law.cornell.edu/federal/.
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    Catalog of Federal Domestic Assistance (CFDA): No. 11.112, Market 
Development Cooperator Program.

I. Program Description

    The goal of the MDCP as set out in authorizing legislation is to 
develop, maintain, and expand foreign markets for nonagricultural goods 
and services produced in the United States.\2\ For purposes of this 
program, nonagricultural goods and service means goods and services 
other than agricultural products as defined in 7 U.S.C. 451.\3\
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    \2\ ``Produced in the United States'' means having substantial 
inputs of materials and labor originating in the United States, such 
inputs constituting at least 50 percent of the value of the good or 
service to exported. The intended beneficiaries of the program are 
U.S. producers of non-agricultural goods or services that seek to 
export such goods or services. See ``Trade Mission Application 
Form'' ITA Form 4008P-1 (Rev. 8/97).
    \3\ This definition includes ``agricultural, horticultural, 
viticultural, and dairy products, livestock and the products 
thereof, the products of poultry and bee raising, the edible 
products of forestry, and any and all products raised or produced on 
farms and processed manufactured products thereof * * *''
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A. Examples of Successful Proposals

    Applicants should propose activities that would be most appropriate 
to the market development needs of the relevant U.S. industry. Examples 
of activities which applicants from prior years have found appropriate 
are set forth below. These are provided only for illustration. 
Applicants are not required to propose any of these activities.
    1. Participating in overseas trade exhibitions and trade missions 
to promote U.S. exports, and/or hosting reverse trade missions;
    2. Developing a website to connect international customers to U.S. 
companies through a ``virtual trade show.''
    3. Conducting U.S. product demonstrations abroad;
    4. Conducting export seminars in the United States or market 
penetration seminars in the market(s) to be developed;
    5. Establishing technical trade servicing that helps foreign buyers 
choose the right U.S. goods or services and to use them efficiently;
    6. Conducting joint promotions of U.S. goods or services with 
foreign partners;
    7. Opening an overseas office to perform development services for 
companies who agree to participate. Such an office should not duplicate 
the programs or services of the U.S. and Foreign Commercial Service 
(US&FCS) post(s) in the region, but could include co-location with a 
US&FCS Commercial Center;
    8. Detailing a private-sector representative to a US&FCS post in 
accordance with 15 U.S.C. 4723(c);
    9. Training foreign nationals to perform after-sales service or to 
act as distributors for U.S. goods or services;
    10. Improving market access for U.S. goods or services by working 
with organizations in the foreign marketplace responsible for setting 
standards and product testing;

[[Page 16178]]

    11. Publishing an export resource guide or an export product 
directory for the U.S. industry or industries in question, if no 
comparable one exists; and
    12. Establishing an electronic business information system to 
identify overseas trade leads and facilitate matches with foreign 
partners for U.S. businesses.

B. Funding

    1. Type of Funding Instrument: Because the Department will be 
substantially involved in the implementation of each project for which 
an award is made, the funding instrument for this program will be a 
cooperative agreement.
    2. Funding Availability: For FY 2001, the total funds expected to 
be available for this program are $2.0 million. The Department expects 
to conclude a minimum of five (5) cooperative agreements with eligible 
entities for this competition. No award will exceed $400,000, 
regardless of the duration of the cooperative agreement.
    3. Matching Requirements: To receive MDCP funding, the applicant 
must contribute at least two dollars for each Federal dollar provided. 
So, for each Federal dollar of MDCP funding, the applicant must make at 
least one dollar of new cash outlays expressly for the project. The 
balance of the applicant's support may consist of in-kind contributions 
(goods and services).\4\
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    \4\ Recipient cash contributions are defined in 15 CFR Part 14, 
Sec. 14.2(g) as the award ``recipient's cash outlay, including the 
outlay of money contributed to the recipient by third parties.''
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    a. Minimum Match: An example of the minimum match is set forth 
below. An applicant requesting $200,000 of Federal funds must supply, 
at a minimum, $200,000 of new cash outlays expressly for the project. 
As illustrated below, the remaining $200,000 of the required match, can 
be made up of additional new cash outlays or in-kind contributions.

------------------------------------------------------------------------
                                                  Federal     Applicant
                     Item                          share        match
------------------------------------------------------------------------
Cash..........................................      200,000      200,000
Cash or In-kind...............................  ...........      200,000
                                               -------------------------
    Total.....................................      200,000      400,000
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    This example would establish a cost-share ratio of two-to-one, two 
applicant dollars for each dollar of Federal funds. The applicant 
assumes \2/3\ of the total cost. In other words, 67 percent of the 
funding is provided by the applicant and 33 percent by the Federal 
Government. This means that the applicant will receive one dollar for 
every three dollars in project expenditures.
    b. Additional Match: Applicants may propose projects for which the 
matching funding exceeds two applicant dollars to each Federal dollar. 
However, as set forth below, this will increase the cost-share ratio.

------------------------------------------------------------------------
                                                  Federal     Applicant
                     Item                          share        match
------------------------------------------------------------------------
Cash..........................................      200,000      200,000
Cash or In-kind...............................  ...........      400,000
                                               -------------------------
    Total.....................................      200,000      600,000
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    This example would establish a cost-share ratio of three-to-one, 
three applicant dollars for each dollar of Federal funds. The applicant 
assumes \3/4\ of the total cost. In other words, 75 percent of the 
funding is provided by the recipient and 25 percent by the Federal 
Government. This means that the applicant will receive one dollar for 
every four dollars in project expenditures.
    4. In-Kind Contributions: In the proposed budget, all in-kind 
contributions used to meet the applicant's share of costs are listed in 
a separate column from cash contributions. Applicants must describe 
these in-kind contributions separately in the application and in 
sufficient detail to determine that the requirements of 15 CFR part 
14.23(a), or 15 CFR part 24.24 (a) and (b) are met.
    5. Third Party Contributions: In order for an award recipient to 
outlay cash contributed by a third party, the third party must transfer 
the funds to the recipient. Otherwise, expenditures for goods and 
services contributed by a third party are considered to be in-kind 
contributions.
    6. Indirect Costs: Federal funds may be used for a portion of the 
direct costs of each project, but not for indirect costs. Generally, 
direct costs result from activity specifically associated with an 
award, and usually include expenses such as personnel, fringe benefits, 
travel, equipment, supplies and contractual obligations relating 
directly to program activity. By contrast, indirect costs are generally 
those costs that are incurred regardless of whether there is activity 
associated with an award. These are often referred to as ``overhead'' 
and usually include expenses such as rent, electricity, and gas.
    Federal funds may be used only to cover direct costs. The applicant 
must incur and pay direct costs that equal or exceed the amount of 
Federal funds. However, any portion of the balance of applicant's match 
that does not exceed the levels set forth below in I.B.7. Indirect Cost 
Rate, may be used to cover indirect costs. For example, an applicant 
that requests $200,000 of Federal funds, must structure its match to 
include at least $200,000 of direct costs. The balance of the match up 
to the level of direct costs, in this case $200,000, may be comprised 
entirely or partially of indirect expenses, as explained in greater 
detail below, under ``Indirect Cost Rate.''

------------------------------------------------------------------------
                                                  Federal     Applicant
                     Costs                         share        match
------------------------------------------------------------------------
Direct........................................      200,000      200,000
Indirect or Direct............................  ...........      200,000
    Total.....................................      200,000      400,000
                                               -------------------------
------------------------------------------------------------------------

    The Department will determine allowable costs on the basis of the 
applicable cost principles and definitions in OMB Circulars A-21, A-87, 
and A-122; in 45 CFR Part 74, Appendix E; and in 48 CFR Part 31.\5\
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    \5\ Access OMB circulars and forms at http://www.whitehouse.gov/omb/grants/index.html. Appendix E referred to on this OMB site is 
not listed separately. It is found at the end of 45 CFR 74.91, which 
may be accessed directly at http://www.access.gpo.gov/nara/cfr/waisidx_99/45cfr74_99.html.
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    7. Indirect Cost Rate: The Department funds cannot be used to pay 
indirect costs. The total dollar amount of the indirect costs proposed 
in an application under this program (using recipient funds) must not 
exceed the amount calculated using the indirect cost rate and 
negotiated and approved by a cognizant Federal agency \6\ prior to the 
proposed effective date of the award or 100 percent of the total 
proposed direct costs dollar amount in the application, whichever is 
less.\7\
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    \6\ If the applicant does not have a current approved indirect 
cost rate from another Federal agency, and the Department of 
Commerce will be the largest funding Federal agency, the Department 
will work with a winning applicant to establish an indirect cost 
rate.
    \7\ Information on calculating an indirect cost rate is 
available at http://www2.dol.gov/dol/oasam/public/programs/guide.htm.
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    8. Fee Income: Applicants may charge companies in the industry or 
other industry organizations reasonable fees to take part in or avail 
themselves of services provided as part of applicants' project. 
Applicants should describe in detail any plans to charge fees. Fees 
generated under the award are program income and must be used for 
project-related purposes during the award period. Fee income may be 
used as cash match.
    9. Approved Pre-Award-Period Expenditure: As a general matter, 
award recipients can request reimbursements only for costs incurred 
during the award

[[Page 16179]]

period. However, if proposed in the application, award recipients can 
expend funds to attend an award-recipient orientation meeting even if 
it precedes the beginning of the award period. This orientation is 
usually held in Washington, D.C. soon after the awards are announced. 
It is usually the first opportunity for award recipients to meet 
members of the Department's team. This expenditure of funds prior to 
the beginning of the award period is limited to allowable expenses 
(e.g., air fare and lodging) associated with attending the orientation.
    10. Fees for Some Government Services: By winning an MDCP award, an 
applicant enters into a special relationship with ITA. (See I.C.1. 
Project Team below.) To fulfill its part of the partnership, ITA will 
provide, where possible, its resources to support project activities 
included in annual operating plans. (See I.C.3. Annual Operating Plan 
below.) However, ITA's ability to provide assistance free of charge is 
limited. For some services such as market research studies and Gold Key 
services, ITA is required to charge fees that recover costs. Applicants 
requiring ITA services that could involve charges should make provision 
in their budgets for such charges.
    Information relating to charges for services provided in specific 
overseas markets can be obtained by contacting the Senior Commercial 
Officer (SCO) at each overseas post. Information relating to charges 
for services provided by Export Assistance Centers (EACs) throughout 
the United States can be obtained by contacting the relevant EAC 
director. The names of SCOs and EAC directors, and often the specific 
fees, can be found on the Internet at http://www.usatrade.gov.

C. Administration of Award Activity

    1. Project Team: To administer each cooperative agreement, a 
project team is established including key personnel from the award-
winning organization and officials from the Department who can help the 
award-winner achieve MDCP project objectives. If representatives from 
other Federal agencies can make a meaningful contribution to the 
achievement of project objectives, they are invited to participate on 
the project team.
    Each project team acts as a ``board of directors'' establishing 
direction for the project, recommending changes in the direction of the 
project, when necessary, and determining the mode of project operations 
and other management processes, coupled with close monitoring or 
operational involvement during the performance of project activities.
    2. Award Period: Funds may be expended over the period of time 
required to complete the scope of work, but not to exceed three years 
from the start date of the award.
    3. Annual Operating Plan: At the beginning of each year of the 
award period, the project team negotiates an annual operating plan, 
which is based on the work plan submitted in the application. The work 
plan sets forth a timetable for specific activities. In addition to 
this timetable, the annual operating plan includes team 
responsibilities for accomplishing each activity, and the budgeted cost 
of each activity. Annual operating plans are not part of the 
application. They are developed only after receipt of an award and 
designation of an ITA project team.

II. Eligibility

A. Definition of Eligible Entity

    U.S. trade associations, non-profit industry organizations, state 
departments of trade and their regional associations are eligible to 
apply for an MDCP cooperative agreement. In cases where no entity 
described above represents the industry, private industry firms or 
groups of firms, may be eligible to apply for an MDCP cooperative 
agreement. Such private industry firms or groups of firms must provide 
in their application documentation demonstrating that no entity in the 
first three categories listed below represents their industry.
    1. Trade Association: For the purpose of this program, a ``trade 
association'' is defined as a fee-based organization consisting of 
member firms in the same industry, or in related industries, or which 
share common commercial concerns. The purpose of the trade association 
is to further the commercial interests of its members through the 
exchange of information, legislative activities, and the like.
    2. Non-Profit Industry Organization: For the purpose of this 
program, a ``non-profit industry organization'' is:
    a. A non-profit small business development center operating under 
agreement with the Small Business Administration; or
    b. A non-profit World Trade Center chartered or recognized by the 
non-profit World Trade Centers Association \8\; or
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    \8\ A description of the World Trade Centers Association is 
available on the Internet at http://www.worldtradecenter.org.
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    c. An organization that has been granted status as a non-profit 
organization under Title 26 U.S.C. Section 501(c) (3), (4), (5), or (6) 
and operates as one of the following:
    (1) A local, state, regional, or national chamber of commerce,
    (2) A local, state, regional, or national board of trade,
    (3) A local, state, regional, or national business, export or trade 
council/interest group,
    (4) A local, state, regional, or national visitors bureau or 
tourism promotion group,
    (5) A local, state, regional, or national economic development 
group,
    (6) A small business development center, or
    (7) A port authority.
    3. State Departments of Trade and Their Regional Associations: For 
the purpose of this program, ``state departments of trade and their 
regional associations'' include:
    a. A department of a state government tasked with promoting trade; 
or
    b. Associations of the departments of trade of two or more states; 
or
    c. Entities within a state or within a region of a state that are 
associated with a state department of trade including non-profit, non-
private, non-commercial entities which are at least partially funded 
by, directed by, or tasked by a state government to promote trade.
    4. Special Note Regarding Educational Institutions: Educational 
institutions such as schools, colleges, and universities, are generally 
not eligible. However, organizations that are part of an educational 
institution for administrative, financial, legal, or logistical 
reasons, but not independent legal entities--for example, an 
organization which is not incorporated--which otherwise may be 
classified above under 1. Trade Association, 2. Non-Profit Industry 
Association, or 3. State Departments of Trade and Their Regional 
Associations, above are eligible.
    In such a case, the eligible entity should include in its 
application a signed letter stating that the MDCP funds would be used 
only by the eligible entity for the purposes outlined in its 
application, and that no such funds would be used by or retained by the 
educational institution, even though the funds may need to go through 
the educational institution because of the eligible entity's lack of a 
separate accounting system or lack of status as a separate legal 
entity.

B. Eligibility of Previous Award Recipients

    The program aims to increase the sum of Federal and non-Federal 
export market development activities by using program funds to 
encourage new

[[Page 16180]]

initiatives. MDCP funds are not intended to replace funds from other 
sources, nor are these funds intended to replace MDCP funding from a 
previous award.
    Eligible organizations that have previously received an MDCP award 
may propose a new project or expansion of an existing project. See 
IV.A.4. Creativity and Capacity below.

C. Determination of Eligibility

    1. Request for Determination: Prospective applicants should resolve 
questions regarding eligibility by requesting an eligibility 
determination. Requests should be made in writing accompanied by the 
most current version of all of the following documents that apply:
    a. Articles of incorporation;
    b. Charter;
    c. Bylaws;
    d. Information on types of members and membership fees;
    e. Internal Revenue Service acknowledgment of non-profit status;
    f. Annual report;
    g. Audited financial statements;and
    h. Documentation of ties to state trade departments or their 
regional associations.
    Prospective applicants should submit eligibility determination 
requests as soon as possible if they wish to have determinations prior 
to the application submission deadline. This deadline will not be 
extended, and applicants should continue to work on applications while 
awaiting the Department's eligibility determination.
    2. Joint Ventures: Entities may join together to submit an 
application as a joint venture and to share costs. For joint venture 
applicants, one organization meeting the above eligibility criteria 
must be designated as the prospective MDCP award recipient organization 
for administrative purposes. For example, two trade associations 
representing different segments of a single industry or related 
industries may pool their resources and submit one application. Foreign 
businesses and private groups also may join with eligible U.S. 
organizations to submit applications and to share the costs of proposed 
projects.
    3. Benefit to All Companies: The Department will accept 
applications from eligible entities representing any industry, 
subsector of an industry or related industries. Each applicant must 
permit all companies in the industry targeted in its proposal to 
participate in all activities that are scheduled as part of a proposed 
project whether or not the company is a member or constituent of the 
eligible organization.

III. Applications

A. Format

    The basic elements of the application are set forth below. 
Additional instructions and required forms are provided in the 
Application Kit. See the ``For Further Information Contact'' section 
for instructions on getting the Application Kit.
    1. Executive Summary: The first element of the application is a 
one-page summary of the proposal. In accordance with IV.B.2. Staff 
Review above, the Department will distribute the executive summaries to 
its experts to solicit comments on applications. This summary may take 
the form of straight text, another visual information display (such as 
a table), or a mixture of both. Regardless of how the applicant chooses 
to structure the summary, it should communicate the essence of the 
application proposal including the following:
    a. Applicant's name and location of headquarters;
    b. Name of partnership organizations joining applicant in its 
application;
    c. Federal offices with which an applicant envisions working;
    d. Amount of Federal funds requested;
    e. Total project budget;
    f. Proposed term of the project;
    g. Foreign markets targeted;
    h. U.S. industry or industry clusters to be promoted; and
    i. Brief description of the proposed activities and methods.
    2. Background Research: Developing a project plan requires solid 
background research. Applications should reflect the findings of the 
applicant's study of the following:
    a. The market potential of the U.S. good(s) or service(s) to be 
promoted in a particular market(s);
    b. The competition from host-country and third-country suppliers; 
and
    c. The economic situation and prospects that bear upon the ability 
of a country to import the U.S. good(s) or service(s).
    Applicants should present an assessment of industry resources that 
can be brought to bear on developing a market; the industry's ability 
to meet potential market demand expeditiously; and the industry's 
after-sales service capability in a particular foreign market(s).
    3. Project Description: After describing their completed basic 
research, applicants should develop marketing plans that set forth the 
overall objectives of the projects and the specific activities 
applicants will undertake as part of these projects.
    a. Work Plan: The project description should include a list of 
specific activities planned, including: (1) the different phases of the 
project, identifying each milestone and activity in chronological 
order; (2) the location where activities will take place; and (3) the 
ways the applicant intends to involve the Department of Commerce and/or 
other Federal agencies as partners in project activities.
    Applicants should also explain any fees to be charged to entities 
which benefit from or participate in project activities and services.
    b. Performance Measures: (1) Applicant-Designed Performance 
Measures: In order to demonstrate the success of their projects, 
applicants are encouraged to develop and utilize performance measures 
which would reasonably gauge the success of the project. Each recipient 
of an award should be prepared to record and report the results 
achieved from project activities.
    (2) Government Performance and Results Act Measures: On August 3, 
1993, the Government Performance and Results Act (GPRA) was enacted 
into law (Public Law 103-62). GPRA requires each Federal agency to 
submit a strategic plan for program activities to OMB. Among other 
things, each strategic plan must include ``performance indicators to be 
used in measuring or assessing the relevant outputs, service levels and 
outcomes of each program activity.'' While not abandoning outputs 
(units of products, including services, of an activity) as a measure of 
achievement, OMB directed agencies to focus more on outcomes (the 
resulting effect of the use or application of an output) as the primary 
indicator of the success of programs and activities.
    The Department reports results using the GPRA measures defined for 
its programs and activities. Many of these measures apply only to the 
programs and activities of the Department and have little relevance to 
the activities of MDCP award winners. Other measures may have 
applicability to MDCP projects. ITA is in the process of revising its 
GPRA performance measures. GPRA performance measures, against which 
MDCP award winners will be required to measure their projects, will be 
provided to new award winners prior to their commencing award 
activities.
    (3) Performance Measure Reporting Requirements: Award recipients 
will be expected to use any applicant-designed measures as well as the 
GPRA performance measures in their quarterly reports.

[[Page 16181]]

    (4) Performance Measure Recording and Reporting System: Each 
applicant should describe its recording and reporting system in its 
proposal. Ultimately, it is the success of individual companies that 
determines the project's export success. Therefore, applicants should 
demonstrate how they plan to ensure that participant companies, and any 
other sources of export success information, will provide performance 
information to the applicant.
    c. Partnership: Applications should display the imagination and 
innovation of the private sector working in partnership with the 
government to obtain the maximum market development impact. As noted 
under C.1. Project Team above, each applicant that wins an award will 
work with an ITA team leader and other team members from the 
Department. Team members from other Federal agencies also may be 
invited to participate. Applicants must describe in detail all 
assistance expected from the Department or other Federal agencies to 
implement project activities successfully.
    d. Project Funding Priorities: Project proposals must be compatible 
with U.S. trade and commercial policy. In addition, applicants are 
encouraged to address the priorities set forth below when developing 
their applications. An application does not need to focus on a specific 
number of these priorities to qualify for an award. It is conceivable 
that an applicant could do a superb job focusing on only one of the 
priorities and receive an award.
    The international trade priorities listed below are the priorities 
referred to in IV.A.3. Priorities and Partnership. The Department is 
interested in receiving proposals which include projects that:
    (1) Increase trade opportunities by opening markets through the 
development of new trade agreements, the support of World Trade 
Organization negotiations, the removal of non-tariff barriers, or the 
development of commercial infrastructure in emerging economies;
    (2) Broaden and deepen participation of the private sector in 
exporting by increasing overall export awareness and awareness of ITA 
programs and services among U.S. companies, by making small and medium 
size enterprises (SMEs) export-ready or by facilitating deal-making;
    (3) Ensure fair competition by combating dumping and subsidy of 
imports or by ensuring compliance with trade agreements;
    (4) Support the Administration's broader foreign policy objectives 
through trade-related initiatives;
    (5) Promote the use of e-commerce, in particular projects that make 
SMEs aware of the unique advantages e-commerce presents as a low-cost, 
low-risk tool to overcome SME reluctance to pursue marketing 
opportunities in and profit from foreign markets;
    (6) Increase ``hands-on'' export education designed for SMEs 
through:
    (a) Developing educational tools such as curricula and media, and/
or
    (b) Providing company-specific assistance such as export business 
plan development, market research, customs counseling, competitive 
position assessment, trade event preparation, foreign distribution 
alliances, and securing financing; and
    (7) Develop non-traditional approaches to creating demand for the 
products/services developed from new U.S. technologies.
    4. Credentials: Applicants must demonstrate the ability to provide 
an established, competent, experienced staff and other resources to 
assure adequate development, supervision, and execution of the proposed 
project activities. Each applicant must provide a description of the 
membership/ qualifications, structure and composition of the eligible 
entity, the degree to which the entity represents the industry or 
industries in question, and the role, if any, foreign membership plays 
in the affairs of the eligible entity. Applicants should summarize both 
the recent history of their industry's or industries' competitiveness 
in the international marketplace and the export promotion history of 
the eligible entity and its partners that intend to work on the 
project. This should include a resume for the project director and 
principal staff and a projection of the amount of time each 
professional will devote to the project.
    5. Finance and Budget: In addition to Form 424A ``Budget 
Information--Non-Construction Programs'', applicants will provide a 
detailed budget for the project award period, supporting worksheets and 
explanations, a discussion of financial systems and projections, a 
history of financial programs, financial and organizational documents, 
and any additional evidence of financial responsibility.
    Applicants must provide their most recent audited financial 
statements. If the applicant is a sub-unit of an audited entity, in 
addition to the financial statements of the audited entity, the 
applicant should provide financial statements at the most specific 
level available, whether or not these are audited. If the applicant's 
most recent financial statements are not audited, it should submit the 
most recent unaudited financial statements and a statement indicating 
whether it currently has an auditor and when it plans to issue audited 
financial statements.
    6. Forms: The Application Kit includes the following forms which 
must be completed and included in an application: forms SF-424 
Application for Federal Assistance, SF-424A Budget Information--Non-
Construction Programs, SF-424B Assurances--Non-Construction Programs, 
CD-346 Applicant for Funding Assistance; and forms SF-LLL, CD-511, and 
CD-512, which are described below under V.A. Other Requirements.
    7. Appendices: Appendices should be tabbed or otherwise marked for 
easy reference. Applicants should include in their appendices, whatever 
material they deem helpful. For ease of reference, the Department 
recommends that the types of documents listed below be included as 
appendices rather than in the main body of the application.
    a. The portion of the application defined above in III.A.5. Finance 
and Budget.
    b. The forms noted above in III.A.6. Forms.
    c. The determination of eligibility that an applicant has received 
from the Department. If the applicant has not received such a 
determination, it must include in the appendices the documents 
requested in II.C.1. Determination of Eligibility above.
    d. Letters of support for the project. Including these as 
appendices may make it easier for all reviewers to find such letters in 
the same place in the application. The Department's standard practice 
for letters of support submitted separately is to make them available 
to reviewers.
    e. News media contacts. When the Department announces awards, it 
informs the news media through a press release, usually from the 
Secretary of Commerce. Including news media contacts as an application 
appendix is not required, but doing so will help the Department 
publicize the success of the award winners. The most useful information 
to include in the appendix is the fax number and email address of the 
news media contacts of interest to the applicant. These would include 
such information dissemination outlets as local newspapers, trade 
publications, local broadcast stations, and industry websites.
    f. Comparison between the proposed project and all current or past 
projects for which the applicant receives or has

[[Page 16182]]

received MDCP funding. As set forth in IV.A.4. Creativity and Capacity, 
only applicants that are current or past MDCP award recipients must 
include this comparison in their application.

B. Submission of Applications

    1. Number of Pages: The main body of the application is limited to 
50 pages. There is no limit on the number of pages for appendices. The 
main body of the application should include the substance of the 
applicant's proposal as identified in III.A.1. through III.A.4. above.
    Each page of the main body should be numbered. Tabbing and 
numbering of pages included as appendices facilitates application 
review.
    2. Number of Copies: Each applicant must submit a signed original 
application plus two copies. The Department encourages applicants to 
submit five additional copies as well for a total of seven (7) copies. 
Several copies will be needed in order for the Department to complete 
its evaluation. (As noted below under IV.B. Evaluation and Selection 
Procedures, four Selection Panel members and several Department staff 
will review each application.) However, if submitting seven (7) copies 
creates a financial hardship, applicants may submit the minimum of two 
copies plus the original.
    If an applicant submits an original and two copies or any other 
number of copies greater than two and less than seven (7), the 
Department will make additional copies to allow all reviewers to read 
each application. However, the Department cannot guarantee that the 
copies will include features that are not easily reproduced on standard 
photocopy machines. For example, tabs might not be inserted, color 
pages might be reproduced in black and white, fold-out pages might not 
fold out, unusually sized (not 8.5" x 11") pages might be broken up, 
and the copies might be bound with staples or clips instead of the 
binding used for applicant-submitted material.
    3. Distinguish Between Copies and Original: The Department needs to 
distinguish between the original application and copies. In order to 
facilitate processing of submitted applications, the Department 
recommends that applicants write or stamp ``original'' on the cover 
page of the original.

C. Retention of Applications

    1. Award Winners: For each award winner, the Department of Commerce 
will retain the application for seven years after the award file is 
closed out. Copies of winning applications are distributed to project 
team members for their use in managing projects.
    2. Unsuccessful and Ineligible Applicants: For each eligible 
application which does not win an award, and for each application 
determined to be ineligible, the Department of Commerce will retain the 
signed original of the application for seven years and will destroy the 
copies.
    3. Late Applications Returned to Sender: Late applications are not 
accepted or retained. They are returned to the sender. However, the 
Department will retain a copy of the cover page or transmittal letter 
for seven years.

IV. Evaluation and Selection

A. Evaluation Criteria

    The Department is interested in projects that demonstrate the 
possibility of both significant results during the project period and 
lasting benefits extending beyond the project period. To that end, 
consideration for financial assistance under the MDCP will be based 
upon the following evaluation criteria:
    1. Export Success Potential: Potential of the project to generate 
export success stories and/or export initiatives in both the short-term 
and medium-term. For purposes of this program, an export initiative is 
defined as a significant expenditure of resources (time, people, or 
money) by the Chief Executive Officer (CEO) of a company in the active 
pursuit of export sales. Examples of export initiatives include, but 
are not limited to, the following:
    a. Participating in an overseas trade promotion event;
    b. Hiring an export manager;
    c. Establishing an export department;
    d. Exploring a new market through an overseas trip by the chief 
executive officer;
    e. Developing an export marketing/business plan;
    f. Translating product literature into a foreign language;
    g. Making product modifications to comply with foreign market 
requirements;
    h. Commissioning an in-depth market research study;
    i. Promoting the adoption of U.S. standards;
    j. Advertising in a foreign business publication;
    k. Undertaking an overseas direct-mail campaign to create product 
awareness;
    l. Signing an agent/distributor;
    m. Getting introduced to a potential foreign buyer;
    n. Signing an export contract/filling an export order;
    o. Entering into a strategic alliance \9\ with a foreign firm; or
---------------------------------------------------------------------------

    \9\ A collaboration of one company with another company that can 
provide resources to achieve corporate, economic and strategic 
goals. One benefit of strategic alliances is reciprocal access to 
more than one market. For example, firms in two different markets 
can agree to market each other's non-competing products in their 
respective ``home'' markets.
---------------------------------------------------------------------------

    p. Co-locating with a US&FCS Commercial Center.
    Applicants should provide detailed explanations of projected 
results of the project.
    2. Performance Measures: Projected increase (multiplier effect) in 
the number of U.S. companies operating in the market(s) selected, 
particularly SMEs, and the degree to which the project will help the 
industry in question increase or maintain market share in the market(s) 
selected. Applicants should provide quantifiable estimates of projected 
increases and explain how they are derived.
    3. Priorities and Partnership: The degree to which the proposal 
furthers or is compatible with the Department's priorities stated under 
III.A.3.d. Partnership above and the degree to which the proposal 
initiates or enhances partnership with the Department.
    4. Creativity and Capacity: Creativity, innovation, and realism 
displayed by the work plan as well as the institutional capacity of the 
applicant to carry out the work plan.
    a. Creativity and innovation can be displayed in a variety of ways. 
Applicants might propose projects that include ideas not previously 
tried to promote a particular industry's goods or services in a 
particular market. Creativity can be demonstrated by the manner in 
which techniques are customized to meet the specific needs of certain 
client groups. A proposal can be creative in the way it brings together 
the strengths and resources of partners participating in project 
activities. Further, projects that focus on market development are 
inherently more creative than projects that focus only on export 
promotion. Market development is the process of identifying or creating 
emerging markets or market niches and modifying products to penetrate 
those markets. Market development is demand driven and designed to 
create long-term export capacity. In addition to promoting current 
sales of existing products, market development promotes future sales 
and future products.
    b. MDCP awards are designed to help underwrite the start-up costs 
of new export marketing ventures which applicants might not be able to 
undertake without an MDCP award.

[[Page 16183]]

Accordingly, in determining an applicant's creativity and innovation, 
the Selection Panel will consider that applicant's current or past 
MDCP-funded projects. Current or past MDCP award recipients can be in a 
position to earn the maximum number of points under this criterion only 
if they propose projects that are entirely new.
    In order for the Selection Panel to determine whether the project 
proposed by a current or past MDCP recipient is entirely new, the 
current or past winner must provide as a separate appendix a comparison 
between the elements of the proposed project and the elements of the 
applicant's current or past MDCP-funded projects. Current or past MDCP 
award recipients that propose projects that are not entirely new will 
receive fewer points under this criterion than they would receive 
otherwise.
    In determining the number of points under this criterion, the 
Selection Panel will consider the level to which a particular applicant 
has incorporated elements of its previously funded MDCP projects. To do 
this, applicants that are current or past MDCP award recipients will 
indicate the approximate amount of resources devoted to each project 
element. These resources should be reported as a percentage of the 
total project in the comparison chart described above under this 
criterion. For example, if an applicant received an MDCP award in 1995 
and spent approximately $400,000 of a total $1,000,000 project budget 
on opening an office in Beijing, it could report that 40 percent of the 
resources of its 1995 project went to opening its Beijing office.
    c. Institutional capacity will be measured by what each applicant 
puts in its proposal. A current or past MDCP recipient is under the 
same obligation as a new applicant to demonstrate its ability to 
achieve the levels of performance set forth in its application. As with 
all evaluation criteria, the Department will evaluate institutional 
capacity using its standard evaluation procedures, including IV.B.2 
Staff Review. The Department will also consider information available 
to it as it relates to V.A.2. Past Performance below. However, a 
current or past MDCP award recipient should not assume that success 
with a prior MDCP award will automatically be taken into account by the 
Department when reviewing its application. Each applicant must document 
its institutional capacity in its application.
    5. Budget and Sustainability: Reasonableness of the itemized budget 
for project activities, the amount of the cash match that is readily 
available at the beginning of the project, and the probability that the 
project can be continued on a self-sustained basis after the completion 
of the award.
    Current or past MDCP recipients who propose an expansion of an 
existing project must show how the expansion will achieve self-
sustainability independent of current or past projects funded under the 
MDCP.
    Each of the above criteria is worth a maximum of 20 points. The 
five criteria together constitute the application score. At 20 points 
per criterion, the total possible score is 100.

B. Evaluation and Selection Procedures

    Office of Planning Coordination and Resource Management (OPCRM) 
staff will review each application for completeness as soon as 
practicable after the application is received. The applicant is 
responsible for submitting a complete application in a timely manner.
    Prior to selection, each complete application receives a thorough 
evaluation. The steps of the evaluation and selection process are set 
forth below.
    1. Eligibility Determination: OPCRM staff, in consultation with the 
Department's Office of General Counsel, reviews all applications to 
determine the eligibility of each applicant. If an applicant's 
eligibility is in question, the applicant is contacted to supply 
additional information or clarification.
    2. Staff Review: The OPCRM Director invites comments on 
applications from relevant offices within the Department (e.g,. Trade 
Development (TD), Market Access & Compliance (MAC), and US&FCS). This 
review allows the Department experts in the industry sector or 
geographical region to assess the claims made in the applications. The 
Department staff comments provide insights into both the potential 
benefits and the potential difficulties associated with the 
applications.
    3. OPCRM Review: At least three representatives of OPCRM review and 
comment on all applications using the evaluation criteria identified 
above. The MDCP Manager prepares for the Selection Panel a review 
packet including the applications, a summary of OPCRM staff comments, 
and comments by the Department staff. The OPCRM and Department staff 
comments afford the Selection Panel the insights and breadth of 
experience of Department professionals. However, they have no official 
weight, and the Selection Panel is free to consider or disregard them 
as it sees fit.
    4. Selection Panel Composition: The MDCP Manager forwards all of 
the eligible applications, along with all related materials, to the 
Selection Panel of senior managers at the Department. This panel is 
chaired by the OPCRM Director and typically includes three other 
members, one each from the Department's TD, MAC, and US&FCS units. 
Panel members are Office Directors or higher.
    5. Selection Panel Scoring: Each Selection Panel member reviews 
each eligible application and assigns a score for each of the five 
criteria stated above. The scores of each Selection Panel Member for 
each application reviewed are maintained in the files for seven years. 
The individual criteria scores are averaged to determine the total 
score for each application.
    6. Ranked Recommendation: Based on the scores assigned by Selection 
Panel members and deliberations by the Selection Panel, the Selection 
Panel forwards the applications with the ten highest total scores to 
the Assistant Secretary for Trade Development and recommends which of 
the ten proposals should receive funding. The Selection Panel's 
recommendation will not deviate from the rank order. This means, for 
example, that the Selection Panel cannot recommend funding for the 
application ranked seventh without recommending funding for applicants 
ranked first through sixth.
    The Selection Panel recommendation includes the Panel's written 
assessment of the strengths and weaknesses of the top ten applications.
    7. Selection of Applications for Funding: From the top ten 
applications forwarded by the Selection Panel, the Assistant Secretary 
for Trade Development selects those applications which will receive 
funding. In addition to the criteria in IV.A. Evaluation Criteria 
above, the Assistant Secretary for Trade Development may consider the 
following in making decisions:
    a. The scores of individual Selection Panel members and the 
Selection Panel's written assessments;
    b. The degree to which applications satisfy the Department 
priorities as established under III.A.3.d. Project Funding Priorities 
above;
    c. The geographic distribution of the proposed awards;
    d. The diversity of industry sectors and overseas markets covered 
by the proposed awards;
    e. The diversity of project activities represented by the proposed 
awards;
    f. Avoidance of redundancy and conflicts with the initiatives of 
other Federal agencies; and
    g. The availability of funds.

[[Page 16184]]

C. Announcement of Award Decisions

    Award winners will be notified by letter. Once award winners 
formally accept their awards, the Department will issue a press release 
and list the award winners at the MDCP Internet address.
    Within ten days of the announcement of the issuance of the press 
release, unsuccessful applicants will be notified in writing and 
invited to receive a debriefing from MDCP officers.

V. Other Requirements and Classification

A. Other Requirements

    1. Federal Policies and Procedures: Recipients and subrecipients 
are subject to all Federal laws and Federal and Department of Commerce 
policies, regulations, and procedures applicable to Federal financial 
assistance awards.
    2. Past Performance: Unsatisfactory performance under prior Federal 
awards may result in an application not being considered for funding.
    3. Pre-Award Activities: Except at noted above in I.B.9. Approved 
Pre-Award-Period Expenditure, if applicants incur any costs prior to an 
award being made, they do so solely at their own risk of not being 
reimbursed by the government. Notwithstanding any verbal or written 
assurance that they may have received, there is no obligation on the 
part of the Department of Commerce to cover pre-award costs.
    4. No Obligation for Future Funding: If an application is selected 
for funding, the Department of Commerce has no obligation to provide 
any additional future funding in connection with that award. Renewal of 
an award to increase funding or extend the period of performance is at 
the total discretion of the Department of Commerce.
    5. Delinquent Federal Debts: No award of Federal funds shall be 
made to an applicant who has an outstanding delinquent Federal debt 
until either:
    a. The delinquent account is paid in full;
    b. A negotiated repayment schedule is established and at least one 
payment is received; or
    c. Other arrangements satisfactory to the Department are made.
    6. Name Check Review: All applicants are subject to a name check 
review process. Name checks are intended to reveal if any key 
individuals associated with the applicant have been convicted of or are 
presently facing criminal charges such as fraud, theft, perjury, or 
other matters which significantly reflect on the applicant's management 
honesty or financial integrity. The name check review process is based 
on information applicants provide in Form CD-346 ``Applicant for 
Funding Assistance''.
    7. Primary Applicant Certifications: All primary applicants must 
submit a completed Form CD-511, ``Certifications Regarding Debarment, 
Suspension and Other Responsibility Matters; Drug Free Workplace 
Requirements and Lobbying''. Explanations are provided below.
    a. Non-Procurement Debarment and Suspension: Prospective 
participants (as defined at 15 CFR part 26, section 105) are subject to 
15 CFR part 26, ``Nonprocurement Debarment and Suspension'' and the 
related section of the certification form prescribed above applies;
    b. Drug-Free Workplace: Grantees (as defined at 15 CFR part 26, 
section 605) are subject to 15 CFR part 26, subpart F, ``Government 
wide Requirements for Drug-Free Workplace (Grants)'' and the related 
section of the certification form prescribed above applies;
    c. Anti-Lobbying: Persons (as defined at 15 CFR part 28, section 
105) are subject to the lobbying provisions of 31 U.S.C. 1352, 
``Limitations on use of appropriated funds to influence certain Federal 
contracting and financial transactions,'' and the lobbying section of 
the certification form prescribed above applies to applications/bids 
for grants, cooperative agreements, and contracts for more than 
$100,000, and loans and loan guarantees for more than $150,000, or the 
single family maximum mortgage limit for affected programs, whichever 
is greater; and
    d. Anti-Lobbying Disclosures: Any applicant that has paid or will 
pay for lobbying using any funds must submit Form SF-LLL, ``Disclosure 
of Lobbying Activities,'' as required under 15 CFR part 28, Appendix B.
    8. Lower Tier Certifications: Recipients shall require applicants/
bidders for sub-grants, contracts, subcontracts, or other lower tier 
covered transactions at any tier under the award to submit, if 
applicable, a completed Form CD-512, ``Certifications Regarding 
Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier 
Covered Transactions and Lobbying'' and disclosure Form SF-LLL, 
``Disclosure of Lobbying Activities.'' Form CD-512 is intended for the 
use of recipients and should not be transmitted to the Department. SF-
LLL submitted by any tier recipient or sub-recipients should be 
submitted to the Department in accordance with the instructions 
contained in the award document.
    9. False Statements: A false statement on an application is grounds 
for denial or termination of funds and grounds for possible punishment 
by a fine or imprisonment as provided in 18 U.S.C. 1001.
    10. Intergovernmental Review: Applications under this program are 
not subject to Executive Order 12372, ``Intergovernmental Review of 
Federal Programs.''
    11. Buy American-Made Equipment and Products: Applicants are hereby 
notified that they will be encouraged, to the greatest extent 
practicable, to purchase American-made equipment and products with 
funding provided under this program.
    12. Fly America Act: All award recipients must comply with the 
provisions of the Fly America Act, 49 U.S.C. 40118.

B. Classification

    This notice has been determined to be not significant for purposes 
of Executive Order 12866. The standard forms referenced in this notice 
are cleared under OMB Control No. 0348-0043, 0348-0044, 0348-0040, and 
0348-0046 pursuant to the Paperwork Reduction Act. Notwithstanding any 
other provision of law, no person is required to respond nor shall a 
person be subject to a penalty for failure to comply with a collection 
of information subject to the requirements of the Paperwork Reduction 
Act unless that collection of information displays a currently valid 
OMB Control Number.

    Dated: March 20, 2001.
Jerome S. Morse,
Director, Resource Management and Planning Staff, Office of Planning, 
Coordination and Resource Management, Trade Development, International 
Trade Administration, Department of Commerce.
[FR Doc. 01-7272 Filed 3-22-01; 8:45 am]
BILLING CODE 3510-DR-P