Section one: Contracting authority
one.1) Name and addresses
Homes England (the name adopted by the Homes and Communities Agency)
1 Friargate
Coventry
CV1 2GN
Contact
Ms Vicky Mordey
vicky.mordey@homesengland.gov.uk
Telephone
+44 1158526998
Country
United Kingdom
Region code
UK - United Kingdom
Internet address(es)
Main address
https://www.gov.uk/government/organisations/homes-england
Buyer's address
https://www.gov.uk/government/organisations/homes-england
one.3) Communication
The procurement documents are available for unrestricted and full direct access, free of charge, at
https://procontract.due-north.com/Advert/Index?advertId=60bcf490-e7b8-ed11-8120-005056b64545
Additional information can be obtained from the above-mentioned address
Tenders or requests to participate must be submitted electronically via
https://procontract.due-north.com/Advert/Index?advertId=60bcf490-e7b8-ed11-8120-005056b64545
one.4) Type of the contracting authority
National or federal Agency/Office
one.5) Main activity
Housing and community amenities
Section two: Object
two.1) Scope of the procurement
two.1.1) Title
Financial Risk Modelling Services
Reference number
DN658913
two.1.2) Main CPV code
- 66000000 - Financial and insurance services
two.1.3) Type of contract
Services
two.1.4) Short 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.
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.
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.
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.
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.
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.
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 these models. This requirement forms Lot 3 Model Review and Validation Services (£300k estimated value). See Appendix C: Lot 3 Service Scope. It is envisaged that a single supplier will be appointed to lot 3
two.1.6) Information about lots
This contract is divided into lots: Yes
Tenders may be submitted for all lots
two.2) Description
two.2.1) Title
Financial Risk Parameter Estimation Services
Lot No
1
two.2.2) Additional CPV code(s)
- 66000000 - Financial and insurance services
two.2.3) Place of performance
NUTS codes
- UK - United Kingdom
two.2.4) Description of the procurement
Homes England means Homes England (the name adopted by the Homes and Communities Agency), or anyone acting on behalf of Homes England that is seeking to invite suitable Suppliers to participate in this procurement process.
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.
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.
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.
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.
Homes England is seeking assistance on producing these estimates on an ongoing basis.
two.2.5) Award criteria
Price is not the only award criterion and all criteria are stated only in the procurement documents
two.2.7) Duration of the contract, framework agreement or dynamic purchasing system
Duration in months
24
This contract is subject to renewal
Yes
Description of renewals
option to extend by two 12 month periods
two.2.10) Information about variants
Variants will be accepted: No
two.2.11) Information about options
Options: No
two.2.13) Information about European Union Funds
The procurement is related to a project and/or programme financed by European Union funds: No
two.2) Description
two.2.1) Title
Financial Risk Modelling Advisory Services
Lot No
2
two.2.2) Additional CPV code(s)
- 66000000 - Financial and insurance services
two.2.3) Place of performance
NUTS codes
- UK - United Kingdom
two.2.4) Description of the procurement
Homes England means Homes England (the name adopted by the Homes and Communities Agency), or anyone acting on behalf of Homes England that is seeking to invite suitable Suppliers to participate in this procurement process.
Homes England manages a multi-billion-pound portfolio involving a wide range of complex interventions and financial programmes. The portfolio includes the Government’s £19bn Help to Buy product, £1.1bn in land assets, and £2.2bn in financial investments (loans, equity investments, and guarantees). The portfolio is highly concentrated in the UK housing market.
The Agency designs, builds, and maintains a wide range of financial and financial risk models in tools including excel, VBA, SQL, and python. 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.
The Agency requires 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.
two.2.5) Award criteria
Price is not the only award criterion and all criteria are stated only in the procurement documents
two.2.7) Duration of the contract, framework agreement or dynamic purchasing system
Duration in months
24
This contract is subject to renewal
Yes
Description of renewals
option to extend by two 12 month periods
two.2.10) Information about variants
Variants will be accepted: No
two.2.11) Information about options
Options: No
two.2.13) Information about European Union Funds
The procurement is related to a project and/or programme financed by European Union funds: No
two.2) Description
two.2.1) Title
Model Review and Validation Services
Lot No
3
two.2.2) Additional CPV code(s)
- 66000000 - Financial and insurance services
two.2.3) Place of performance
NUTS codes
- UK - United Kingdom
two.2.4) Description of the procurement
Homes England means Homes England (the name adopted by the Homes and Communities Agency), or anyone acting on behalf of Homes England that is seeking to invite suitable Suppliers to participate in this procurement process.
Homes England manages a multi-billion-pound portfolio involving a wide range of complex interventions and financial programmes. The portfolio includes the Government’s £19bn Help to Buy product, £1.1bn in land assets, and £2.2bn in financial investments (loans, equity investments, and guarantees). The portfolio is highly concentrated in the UK housing market.
The Agency 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.
These models are built in a range of tools including excel, VBA, python, and SQL.
The Agency requires external support to provide model validation and assurance services.
two.2.5) Award criteria
Price is not the only award criterion and all criteria are stated only in the procurement documents
two.2.7) Duration of the contract, framework agreement or dynamic purchasing system
Duration in months
24
This contract is subject to renewal
Yes
Description of renewals
option to extend by two 12 month periods
two.2.10) Information about variants
Variants will be accepted: No
two.2.11) Information about options
Options: No
two.2.13) Information about European Union Funds
The procurement is related to a project and/or programme financed by European Union funds: No
Section three. Legal, economic, financial and technical information
three.1) Conditions for participation
three.1.2) Economic and financial standing
Selection criteria as stated in the procurement documents
three.1.3) Technical and professional ability
Selection criteria as stated in the procurement documents
three.2) Conditions related to the contract
three.2.3) Information about staff responsible for the performance of the contract
Obligation to indicate the names and professional qualifications of the staff assigned to performing the contract
Section four. Procedure
four.1) Description
four.1.1) Type of procedure
Open procedure
four.1.8) Information about the Government Procurement Agreement (GPA)
The procurement is covered by the Government Procurement Agreement: Yes
four.2) Administrative information
four.2.2) Time limit for receipt of tenders or requests to participate
Date
13 October 2023
Local time
12:00pm
four.2.4) Languages in which tenders or requests to participate may be submitted
English
four.2.7) Conditions for opening of tenders
Date
12 October 2023
Local time
4:00pm
Section six. Complementary information
six.1) Information about recurrence
This is a recurrent procurement: Yes
six.4) Procedures for review
six.4.1) Review body
Royal Court of Justice
London
Country
United Kingdom