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Tender description

Ofwat is looking for a delivery partner to work in partnership to support the delivery of the 2019 Price Review. Ofwat is the economic regulator of the water and wastewater sector in England and Wales. One of the ways we regulate is to set the price, investment and service package that customers receive. Monopoly water companies, working with their customers, will develop business plans to cover the period of the next price control (2020-2025). Our role is to: — set the framework and methodology, — check and challenge the company's business plans, and — set out our determinations on the five-year price, service and incentive package for each company. Our themes for this price review (PR19) are: — great customer service, — affordable bills, — resilience, and — innovation. Short videos on these themes and explaining what a price review is are available on our website. To help deliver PR19, we want to work with an external ‘delivery partner’ that will work collaboratively with us, providing support, analysis, advice, knowledge sharing and learning. We expect the delivery partner will have the capacity and capability to deliver under Ofwat's strategic direction, providing skills and expertise to support peaks in our workload that we require for a fixed period of time. This ensures value for money over a defined period as opposed to committing to permanent investment in resourcing. Estimated contract start is April/May 2018, to allow the delivery partner to embed and be involved in development of processes and assurance before submission of company business plans (September 2018). The contract would then run until final determinations in December 2019, with a period of knowledge transfer and support for Ofwat in the event of any appeals to the Competition and Markets Authority on final determinations materialise afterwards. At a high level, any delivery partner would need to: — have working knowledge of price reviews in the water and/or utilities sector, — work according to our values, — apply our governance framework principles, — flexibly manage resources and deal with uncertainties and change, — support our learning environment by sharing knowledge and delivering learning, throughout the contract duration, — make sound proportionate decisions with appropriate checks and assurance, — have sufficient resource with requisite skills and capabilities to support the Price Review, — have appropriate arrangements to protect our information, — manage effectively any actual/perceived conflicts of interest. The key disciplines we require include regulatory economics, engineering, corporate finance and tax, financial and cost modelling support. We expect this work to involve assistance with initial assessment of company business plans (set out in the PR19 draft methodology) and our draft and final determinations of companies' price controls. In particular, (but not limited to): — assessing the quality and effectiveness of companies' customer engagement, — setting and assessing outcome performance commitments and delivery incentives, — assessing company analysis of risk and approach to resilience, — assessing efficient costs and proposals for expenditure, — advising on cost of capital and retail margins for all controls and assessing financeability of companies, — assessing company proposals on tax, — managing data capture from company submissions and operating the financial model and modelling suite. We intend to invite bids under a restricted procedure during October/November 2017 with contract award in April/May 2018. Within the contract we plan to use an incentive mechanism to encourage the successful supplier to perform above agreed standards. We currently estimate the contract value 10 000 000 GBP including any extension, expenses etc. excluding VAT. We encourage interested parties to consider using SMEs through a consortium approach to support delivery of the requirement. We have published a directory of interested parties developed through market sounding to help facilitate networking.