Published date: 29 January 2024
Awarded contract - This means that the contract has been awarded to a supplier.
Contract summary
Industry
Financial and insurance services - 66000000
Financial consultancy, financial transaction processing and clearing-house services - 66170000
Financial consultancy services - 66171000
Location of contract
England
Value of contract
£1,300,000
Procurement reference
HCA001-DN658913-12501043
Published date
29 January 2024
Closing date
13 October 2023
Closing time
12pm
Contract start date
11 December 2023
Contract end date
10 December 2027
Contract type
Service contract
Procedure type
Open procedure
Any interested supplier may submit a tender in response to an opportunity notice.
Contract is suitable for SMEs?
Yes
Contract is suitable for VCSEs?
No
Description
Homes England produces a range of macroeconomic forecasts on a quarterly basis. These macroeconomic forecasts need to be translated into the impact on the portfolio, and used to quantify, understand, and manage the financial risk to the Agency.\r
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Homes England manages a multi-billion-pound Recoverable Investment portfolio consisting of c. 300 loans. The portfolio has been running since 2016 and is highly concentrated in the UK housing market with a skew towards small / medium housebuilders with limited financial and credit history, as well as special purpose vehicles (SPVs) set up to specifically to develop a site. Security for the loans is typically provided by the land associated with the development. Internal data for quantitatively estimating the impact of different macroeconomic scenarios on the various model parameters is limited.\r
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A range of models including Expected Credit Loss models and Stress Testing models are used to quantify the financial risk of different macroeconomic scenarios on the Recoverable Investment portfolio. The inputs into these models are generally Probability of Default estimates (both through the cycle and point in time), exposure at default estimates, and Loss Given Default estimates. The regularly updated macroeconomic forecasts therefore need to be translated into these parameters for use in the various models. The Quantitative Risk and Stress Testing team (QRS) at Homes England manages this process.\r
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All loans are internally credit rated on origination and on a regular basis throughout the term of the loan. The current process for producing the parameter estimates involves both quantitative analysis and qualitative assessment, converting the internal ratings into the required parameter estimates. Homes England also subscribes to an external ratings agency service to assist with benchmarking the estimates.\r
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Homes England is seeking assistance on producing these estimates on an ongoing basis. This requirement forms Lot 1: Financial Risk Parameter Estimation Services (£500k estimated value) of the Service. See Appendix A: Lot 1 Service Scope. It is envisaged that a single supplier will be appointed to lot 1.\r
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Homes England is also seeking support in designing, building, and implementing additional financial and financial risk models to improve its understanding of the current portfolio, and to model new products and programmes. This requirement forms Lot 2: Financial Risk Modelling Advisory Services (£500k estimated value). See Appendix B: Lot 2 Service Scope. It is envisaged that there will be 4 suppliers appointed for lot 2.\r
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Homes England designs, builds, and maintains a wide range of financial and financial risk models. These models and methodologies are applied to a wide range of financial and risk management problems, including credit risk modelling, scenario analysis and forecasting, stress testing, and IFRS 9. Homes England is also seeking external support to provide model validation and assurance services on
More information
Previous notice about this procurement
Financial Risk Modelling Services
- Opportunity
- Published 12 September 2023, last edited 14 September 2023
Award information
Awarded date
16 January 2024
Contract start date
29 January 2024
Contract end date
28 January 2028
Total value of contract
£1,300,000
This contract was awarded to 4 suppliers.
20:20
Address
S1 4RG
Reference
None
Supplier is SME?
No
Supplier is VCSE?
No
Government Actuary's Department
Address
EC4A 1AB
Reference
None
Supplier is SME?
Yes
Supplier is VCSE?
No
Grant Thornton UK LLP
Address
EC2A 1AG
Reference
None
Supplier is SME?
No
Supplier is VCSE?
No
Mazars LLP
Address
E1W 1DD
Reference
None
Supplier is SME?
No
Supplier is VCSE?
No
About the buyer
Contact name
Vicky Mordey
Address
1 Friargate
Coventry
CV1 2GN
England
Telephone
+44 1158526998
vicky.mordey@homesengland.gov.uk
Website
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Closing: 13 October 2023, 12pm
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