Contract award notice
Results of the procurement procedure
Section I: Contracting
entity
I.1) Name and addresses
Homes England (the name adopted by the Homes and Communities Agency)
1 Friargate
Coventry
CV1 2GN
UK
Contact person: Ms Vicky Mordey
Telephone: +44 1158526998
E-mail: vicky.mordey@homesengland.gov.uk
NUTS: UK
Internet address(es)
Main address: https://www.gov.uk/government/organisations/homes-england
Address of the buyer profile: https://www.gov.uk/government/organisations/homes-england
I.4) Type of the contracting authority
Regional or local agency/office
I.5) Main activity
Housing and community amenities
Section II: Object
II.1) Scope of the procurement
II.1.1) Title
Financial Risk Modelling Services
Reference number: DN658913
II.1.2) Main CPV code
66000000
II.1.3) Type of contract
Services
II.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
II.1.6) Information about lots
This contract is divided into lots:
Yes
II.1.7) Total value of the procurement
Value excluding VAT:
1 300 000.00
GBP
II.2) Description
Lot No: 1
II.2.1) Title
Financial Risk Parameter Estimation Services
II.2.2) Additional CPV code(s)
66000000
II.2.3) Place of performance
NUTS code:
UKC
UKD
UKE
UKF
UKG
UKH
UKI
UKJ
UKK
II.2.4) Description of the procurement
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.
II.2.5) Award criteria
Quality criterion: Quality
/ Weighting: 50
Price
/ Weighting:
50
II.2.11) Information about options
Options:
No
II.2.13) Information about European Union funds
The procurement is related to a project and/or programme financed by European Union funds:
No
Lot No: 2
II.2.1) Title
Financial Risk Modelling Advisory Services
II.2.2) Additional CPV code(s)
66000000
II.2.3) Place of performance
NUTS code:
UKC
UKD
UKE
UKF
UKG
UKH
UKI
UKJ
UKK
II.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.
II.2.5) Award criteria
Quality criterion: Quality
/ Weighting: 50
Price
/ Weighting:
50
II.2.11) Information about options
Options:
No
II.2.13) Information about European Union funds
The procurement is related to a project and/or programme financed by European Union funds:
No
Lot No: 3
II.2.1) Title
Model Review and Validation Services
II.2.2) Additional CPV code(s)
66000000
II.2.3) Place of performance
NUTS code:
UKC
UKD
UKE
UKF
UKG
UKH
UKI
UKJ
UKK
II.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
Page 9 to 12
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.
II.2.5) Award criteria
Quality criterion: Quality
/ Weighting: 50
Price
/ Weighting:
50
II.2.11) Information about options
Options:
No
II.2.13) Information about European Union funds
The procurement is related to a project and/or programme financed by European Union funds:
No
Section IV: Procedure
IV.1) Description
IV.1.1) Type of procedure
Open procedure
IV.1.8) Information about Government Procurement Agreement (GPA)
The procurement is covered by the Government Procurement Agreement:
Yes
IV.2) Administrative information
IV.2.1) Previous publication concerning this procedure
Notice number in the OJ S:
2023/S 000-026998
Section V: Award of contract
Lot No: 1
Title: Financial Risk Parameter Estimation Services
A contract/lot is awarded:
Yes
V.2 Award of contract
V.2.1) Date of conclusion of the contract
16/01/2024
V.2.2) Information about tenders
Number of tenders received: 12
Number of tenders received from SMEs: 5
Number of tenders received from tenderers from EU Member States: 0
Number of tenders received from tenderers from non-EU Member States: 0
Number of tenders received by electronic means: 12
The contract has been awarded to a group of economic operators:
No
V.2.3) Name and address of the contractor
Jaywing UK Ltd
Sheffield
UK
NUTS: UK
The contractor is an SME:
Yes
V.2.4) Information on value of the contract/lot (excluding VAT)
Initial estimated total value of the contract/lot:
Total value of the contract/lot:
: 500 000.00
GBP
V.2.5) Information about subcontracting
Section V: Award of contract
Lot No: 2
Title: Financial Risk Modelling Advisory Services
A contract/lot is awarded:
Yes
V.2 Award of contract
V.2.1) Date of conclusion of the contract
16/01/2024
V.2.2) Information about tenders
Number of tenders received: 11
Number of tenders received from SMEs: 4
Number of tenders received from tenderers from EU Member States: 0
Number of tenders received from tenderers from non-EU Member States: 0
Number of tenders received by electronic means: 11
The contract has been awarded to a group of economic operators:
No
V.2.3) Name and address of the contractor
Jaywing UK Ltd
Sheffield
UK
NUTS: UK
The contractor is an SME:
Yes
V.2.4) Information on value of the contract/lot (excluding VAT)
Initial estimated total value of the contract/lot:
Total value of the contract/lot:
: 500 000.00
GBP
V.2.5) Information about subcontracting
Section V: Award of contract
Lot No: 2
Title: Financial Risk Modelling Advisory Services
A contract/lot is awarded:
Yes
V.2 Award of contract
V.2.1) Date of conclusion of the contract
16/01/2024
V.2.2) Information about tenders
Number of tenders received: 11
Number of tenders received from SMEs: 4
Number of tenders received from tenderers from EU Member States: 0
Number of tenders received from tenderers from non-EU Member States: 0
Number of tenders received by electronic means: 11
The contract has been awarded to a group of economic operators:
No
V.2.3) Name and address of the contractor
Government Actuary's Department
London
UK
NUTS: UK
The contractor is an SME:
No
V.2.4) Information on value of the contract/lot (excluding VAT)
Initial estimated total value of the contract/lot:
Total value of the contract/lot:
: 500 000.00
GBP
V.2.5) Information about subcontracting
Section V: Award of contract
Lot No: 2
Title: Financial Risk Modelling Advisory Services
A contract/lot is awarded:
Yes
V.2 Award of contract
V.2.1) Date of conclusion of the contract
16/01/2024
V.2.2) Information about tenders
Number of tenders received: 11
Number of tenders received from SMEs: 4
Number of tenders received from tenderers from EU Member States: 0
Number of tenders received from tenderers from non-EU Member States: 0
Number of tenders received by electronic means: 11
The contract has been awarded to a group of economic operators:
No
V.2.3) Name and address of the contractor
Grant Thornton UK LLP
London
UK
NUTS: UK
The contractor is an SME:
No
V.2.4) Information on value of the contract/lot (excluding VAT)
Initial estimated total value of the contract/lot:
Total value of the contract/lot:
: 500 000.00
GBP
V.2.5) Information about subcontracting
Section V: Award of contract
Lot No: 2
Title: Financial Risk Modelling Advisory Services
A contract/lot is awarded:
Yes
V.2 Award of contract
V.2.1) Date of conclusion of the contract
16/01/2024
V.2.2) Information about tenders
Number of tenders received: 11
Number of tenders received from SMEs: 4
Number of tenders received from tenderers from EU Member States: 0
Number of tenders received from tenderers from non-EU Member States: 0
Number of tenders received by electronic means: 11
The contract has been awarded to a group of economic operators:
No
V.2.3) Name and address of the contractor
Mazars LLP
London
UK
NUTS: UK
The contractor is an SME:
No
V.2.4) Information on value of the contract/lot (excluding VAT)
Initial estimated total value of the contract/lot:
Total value of the contract/lot:
: 500 000.00
GBP
V.2.5) Information about subcontracting
Section V: Award of contract
Lot No: 3
Title: Model Review and Validation Services
A contract/lot is awarded:
Yes
V.2 Award of contract
V.2.1) Date of conclusion of the contract
16/01/2024
V.2.2) Information about tenders
Number of tenders received: 12
Number of tenders received from SMEs: 4
Number of tenders received from tenderers from EU Member States: 0
Number of tenders received from tenderers from non-EU Member States: 0
Number of tenders received by electronic means: 12
The contract has been awarded to a group of economic operators:
No
V.2.3) Name and address of the contractor
Jaywing UK Ltd
Sheffield
UK
NUTS: UK
The contractor is an SME:
Yes
V.2.4) Information on value of the contract/lot (excluding VAT)
Initial estimated total value of the contract/lot:
Total value of the contract/lot:
: 300 000.00
GBP
V.2.5) Information about subcontracting
Section VI: Complementary information
VI.4) Procedures for review
VI.4.1) Review body
Royal Court of Justice
London
UK
VI.5) Date of dispatch of this notice
02/02/2024