Published date: 4 February 2021

Awarded contract - This means that the contract has been awarded to a supplier.


Closing: 1 October 2020, 12pm

Contract summary

Industry

  • General management consultancy services - 79411000

Location of contract

West Midlands, London

Value of contract

£20,000

Procurement reference

PROC.01.0672

Published date

4 February 2021

Closing date

1 October 2020

Closing time

12pm

Contract start date

5 October 2020

Contract end date

30 November 2020

Contract type

Service contract

Procedure type

Single tender action (below threshold)

A direct contract with a single supplier, without competition.

This procedure can be used for procurements below the relevant contract value threshold.

Contract is suitable for SMEs?

Yes

Contract is suitable for VCSEs?

Yes

Description

The Supplier shall provide the following Services to the Customer:
Review of issues related to the allowed return in the Competition and Markets Authority (CMA's) provisional findings report on Ofwat's 2019 Price Review in response to 4 water companies' appeal, including:
 Risk free rate - Comment on CMA's use of AAA corporate bonds to inform RFR, with reference to assumptions required by CAPM to hold.
 Total market return - Comment on the CMA's range, point estimate and overall approach.
 Total market return - Comment on need for volatility bias adjustment and point estimate used by the CMA for 'ex-ante' approaches.
 Aiming up - comment on the CMA's approach to aiming up, applicability to the water sector
 Gearing outperformance mechanism - comment on the CMA's critique of our mechanism. The response should address concerns
Order Form - Consultancy Services
Commercial - Sensitive
about the presence and level of gearing outperformance and lack of evidence that high gearing is harmful. It should also reference the Modigliani Miller theorem and provide a view on whether it is consistent with our mechanism, given the particular characteristics of the water sector.
The Supplier shall provide the following Deliverables to the Customer as part of the Services:
 A report of professional opinion and findings related to the Services described above, to form part of Ofwat's response to the CMA's provisional findings (deadline 27 October 2020) and published on Ofwat's website. To meet this deadline, the Supplier is to produce a draft report by 9am 19 October 2020, with some preliminary work shared for discussion in advance; final report by 9am 26 October 2020.
 Final report to be published on Ofwat's website.
 Potential attendance by videolink at any hearings related to the above matters.
 Any follow-up work related to the above matters (e.g. advice on response to any questions from the CMA).

More information

Additional text

For further information, please contact procurement@ofwat.gov.uk

Award information

Awarded date

4 October 2020

Contract start date

5 October 2020

Contract end date

30 November 2020

Total value of contract

£20,000

This contract was awarded to 1 supplier.

Seth Armitage

Address

Personal details redacted

Reference

No reference - other

Supplier is SME?

Yes

Supplier is VCSE?

No

About the buyer

Address

Birmingham
Birmingham
B5 4UA
England

Email

mailbox@ofwat.gov.uk