Published date: 15 November 2021

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


Closing: 15 January 2020, 5pm

Contract summary

Industry

  • General management consultancy services - 79411000

Location of contract

West Midlands, London

Value of contract

£116,850

Procurement reference

PROC.01.0679

Published date

15 November 2021

Closing date

15 January 2020

Closing time

5pm

Contract start date

1 February 2021

Contract end date

16 April 2021

Contract type

Service contract

Procedure type

Open procedure (below threshold)

Any interested supplier may submit a tender in response to an opportunity notice.

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

Contract is suitable for SMEs?

Yes

Contract is suitable for VCSEs?

No

Description

A range of external factors impact on water company costs and outcomes. These include, for example, changes input prices and wages, the impacts of the weather and inflation. Internal management can also impact directly on costs and outcomes, by affecting the efficiency of the business, and can also act to mitigating some of the impacts of external factors.
Ofwat's price review framework has a number of mechanisms to share these risks between companies and consumers. This aims to encourage companies to control costs and outcomes where they can, but also to limit their exposure to risks where they have limited control over them.
The mechanisms currently in use in PR19 include:
 Interim determination provisions in companies' licences, which allow us to change revenues in certain circumstances if particular thresholds are met including IDoKs (Interim Determination of K), SFE (Substantial Favourable Effect) and SAE (Substantial Adverse Effect)
 Reconciliation mechanisms which, for example, pass through changes in real price effects and tax to consumers.
 Inflation indexation of debt, revenues and the RCV (Regulatory Capital Value) which aim to pass through inflation impacts to consumers
 Cost sharing arrangements which share the impact of any cost overruns or underspends between companies and consumers.
 The outcomes framework which provides incentives for companies to hit their Performance Commitment Levels (PCLs) and to go further which incentivise companies to manage the impact of external factors (for example by improving resilience). In some cases, deadbands can be used to limit companies' exposure over a certain range. Collars also mitigate companies' exposure to very rare events, while caps limit customers' exposure to increases in bills.
 The gearing sharing outperformance mechanism aims to align incentives of company to take account of consumers' interests in financial structures and better protect customers from risky structures.

More information

Additional text

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

Award information

Awarded date

29 January 2021

Contract start date

1 February 2021

Contract end date

16 April 2021

Total value of contract

£116,850

This contract was awarded to 1 supplier.

CEPA LLP

Address

Queens House,Lincolns Inn Fields
LONDON
WC2A 3LJ
GB

Reference

Companies House number: OC326074

Supplier is SME?

Yes

Supplier is VCSE?

No

About the buyer

Address

Birmingham
Birmingham
B54UA
England

Email

mailbox@ofwat.gov.uk