I I - part - usaid

3. Cost Components
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All costs shown in Figure III-D-l were based on
1980 prices and are considered reasonable and firm. Annex
!X contains more detailed breakdowns of each category. A 10
percent inflation factor was added for each year of the
Project. A 10 percent contingency was also added to all
funding categories except for the grant, which only has a 3
percent contingency since adequate flexibility already
exists within the technical assistance budap+ to meet
possible contingencies
4. Financial Arrangements and Procurement Plan
a. Technical Assistance
The RTG through DTEC expects to contract with
the University of Kentucky to provide all the necessary
expatriate technical assistance (except for evaluation
services and liaison officers) under the Project. Since
U.K. has already been contracted by AID under collaborative
assistance arrangements for Project design work, no difficulties
are expected in obtaining an early contract. AID
will provide a direct letter of commitment to U.K. to
finance the foreign exchange costs of services and associated
supporting equipment estimated to cost $2.19
million dollars over' a five year period for 14.8 person
years of long term assistance and 43 person months of shortterm
assistance.
Locai technical assistance, estimated to cost
$100,000 for about 124 person months, and the services of
technical. liaison officers ,$320,000 for 8 person years),
also will be procured through DTEC under a separate contract.
AID expects to finance these costs through either a direct
payment or cost reimbursement arrangement. Local support
costs for the above services will be financed by DTEC.
b, Equipment/Vehicles
It is planned that all loan-financed equipment
will be purchased through a procurement agent for the
MOAC. This arrangement will facilitate the procurement
process which has often been delayed in the past due to the
unfamiliarity of many MOAC agencies with international