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Tender description

Ofwat is seeking a Delivery Partner to work in partnership to support the delivery of PR19. 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 packages 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. Themes. Our themes for PR19 are: — great customer service, — affordable bills, — resilience; and, — innovation. Short videos on these themes are available on our website. Key Milestones for PR19: — September 2018 Submission of company business plans. — January 2019 Publish initial assessment and categorization of business plans. — March-July 2019 Publish draft determinations for companies. — December 2019 Publish final determinations for all companies. The Delivery Partner: To help deliver PR19, we are seeking a Delivery Partner who will work collaboratively with us to provide support, analysis, advice, and knowledge sharing. We expect the Delivery Partner will have the capacity and capability to deliver under Ofwat’s strategic direction, providing skills and expertise, in particular, to support peaks in our workload that we require for a fixed period of time. At a high level, the Delivery Partner will be required to: — have a working knowledge of the full range of issues arising in the context of price reviews in the water or wider utility sector, — exercise sound judgment in supporting Ofwat in PR19, with appropriate checks and assurance - exercise sound judgment in supporting Ofwat in PR19, with appropriate checks and assurance, — have sufficient resource with requisite skills and capabilities to support PR19, — work in accordance with our values and the partnership principles in the contract, — flexibly manage resources and deal with uncertainty and change, — support our learning environment by sharing knowledge, — manage the delivery of services at a capped price, — have appropriate arrangements to protect our information, and, — manage effectively any actual/perceived conflicts of interest. Key disciplines: We require the following skillsets: — regulatory economics, — engineering, — corporate finance and tax, — financial and cost modeling support. We expect the work to involve assistance with the initial assessment of company business plans (as defined in the PR19 final methodology) and our draft and final determinations. This includes but is not limited to: — providing regulatory policy advice, e.g. assessment of customer perspectives, outcomes, affordability, resilience, board assurance, and the role of innovation, — assessing efficient costs through economic cost modeling, — engineering advice and value for money assessment of proposals for expenditure in company business plans, — providing regulatory economics advice, e.g. incentive design, — advising on the cost of capital and assessing financeability of companies, and, — operating financial models and data capture from company submissions. Contract: — estimated contract start is May 2018, to allow the Delivery Partner to be involved in the development of processes and assurances before submission of company business plans in September 2018, — the contract will then run until final determinations in December 2019, with a period of knowledge transfer and, if necessary, support for Ofwat in the event of any appeals to the Competition and Markets Authority (CMA) on final determinations. — within the contract, we plan to use an incentive mechanism to encourage the Delivery Partner to commit to the overall success of PR19 and meet agreed standards of performance.