A. On page 5 of 21, please note

A. On page 5 of 21, please note: Excluded Transactions: Activities related to tobacco Activities related to the production of alcoholic beverages Drug products not certified by applicable health authorities Activities related to gambling Activities related to military - Any loan for the purpose of weapons destruction, mine clearing, explosive detection, and related activities is permitted. Any loan the purpose of which is to fund activity substantially related to developing, procuring, servicing or providing training for weapons, weapons platforms, or ammunition is prohibited. B. Selection Criteria: Subject to availability of funding, the Grants Officer will award the grant resulting from this solicitation to the responsible Applicant whose Application, conforming to the solicitation, will be most advantageous to the contracting activity. For the purpose of this solicitation, Technical, Experience (Past Performance), and Price factors will be evaluated by the Government (See RFA, Section III – Selection Criteria, pages 8 and 9). The Applications will address in detail each of the three factors identified below (See RFA, Section III – Selection Criteria, pages 8 and 9). This is a best-value procurement. The factors (See RFA, Section III – Selection Criteria, pages 8 and 9) and volume contents (See RFA, Section III – Grant Application Format, pages 9 through 13), in descending order of importance, are: Technical, Experience (Past Performance), and Price. When combined, the non-price factors are significantly more important than price. C. Questions and Responses relative to RFA No. W914NS-04-R-0157 1. Does the CPA envision a specific job creation condition as a result of each loan? For example, is it required that 1 job is created for every $15,000 lent? Response: No 2. What is the required (or expected) percentage contribution of capital by the small business owner in relation to the amount contributed by Administrator/Grantee? Response: No specific standard. This will be decided by the Iraqi financial institution through which the loan application is submitted. 3. Can the Administrator/Grantee charge the small business owner a loan fee to cover administrative costs? Response: The Administrator’s costs are paid through the grant. The Applicant can propose to charge a fee to cover costs for the Administrator’s efforts. 4. Is the one year grace period for loan repayment a requirement, or can it be shorter? Response: The one year grace period for loan repayment is a requirement. 5. What forms of collateral are acceptable? Can a lien on fixed assets or mortgages be placed? Response: This will be decided by the Iraqi financial institution through which the loan application is submitted. 6. Have any particular industries been identified as likely beneficiaries of the loans? Are there any restrictions on what percentage of the loan portfolio can go to any one specific industry? Response: No industry preferences or restrictions. 7. On page 6, under item number 4, what is meant by materially worse than the aggregate loan portfolio? Response: The Administrator, using data from the Grantee, will measure the performance of the portfolio of loans that each Grantee makes using grant funds. Any Grantee whose portfolio or grant-funded loan is substantially below the average will be precluded from further participation in the program, upon the recommendation of the Administrator, and the decision of the Grantor. The Administrator should recommend to the Grantor a quantitative measurement of “materially worse.” 8. What is the relationship between the Grantor and the Administrator, specifically with regard to the termination conditions? How much of the fee is the Administrator eligible for? What guidelines and parameters are the Administrator expected to follow? Response: The relationship between the Grantor and Administrator, and the Administrator guidelines and parameters, are described in the RFA. The Applicant must propose a fee that is will receive for acting as Administrator. The Administrator is not required to share this fee with any third party, but the Administrator is responsible for its own expenses. 9. Will there be flexibility for the Administrator to conduct a reasonable phased geographical rollout of the program, or is the Administrator expected to be able to begin operations immediately on a nation wide basis? Response: The Administrator is not required to have offices throughout Iraq, but should have a means of communicating, including exchanging of documents, with Iraqi financial institutions located in major cities. It is permissible to take a reasonable amount of time to make these arrangements. 10. Asked another way - Would an applicant who can demonstrate the ability to immediately begin operations in the central region and who can show that they can begin operations in the North and South in a reasonable period thereafter be excluded from the tender? Response: No END OF AMENDMENT 0001 Amendment 0001 To RFA No. W914NS-04-R-0157 PAGE PAGE 2