---
title: "Allocation of risk"
ocid: "ocds-b5fd17-916a8867-1b1f-430e-978b-57479fd94278"
canonical_url: "https://d3tenders.com/contract/?ocid=ocds-b5fd17-916a8867-1b1f-430e-978b-57479fd94278"
markdown_url: "https://d3tenders.com/contract/ocds-b5fd17-916a8867-1b1f-430e-978b-57479fd94278.md"
json_url: "https://d3tenders.com/contract/ocds-b5fd17-916a8867-1b1f-430e-978b-57479fd94278.json"
source: "Contracts Finder"
current_stage: "Award"
buyer: "WATER SERVICES REGULATION AUTHORITY (OFWAT)"
published: "2021-11-15"
---

# Allocation of risk

Buyer: WATER SERVICES REGULATION AUTHORITY (OFWAT)  
Current stage: Award  
OCID: ocds-b5fd17-916a8867-1b1f-430e-978b-57479fd94278

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## Summary

The Water Services Regulation Authority (Ofwat) is conducting a procurement process titled "Allocation of risk," focused on general management consultancy services. The contract, valued at £116,850, is based in the United Kingdom, with delivery addresses in the West Midlands and London. This procurement is currently in the Award stage, following an open method procedure. The contract period is set to begin on 1st February 2021 and conclude on 16th April 2021. It is important to note that the tender period has ended.

This tender presents significant opportunities for SMEs in the consultancy sector, particularly those with expertise in risk management and regulatory frameworks related to water services. Businesses that can demonstrate an understanding of cost control mechanisms and outcome-oriented strategies, as employed by Ofwat, will be particularly well-suited to compete for this contract. Engaging in this process could allow these firms to establish a stronger foothold in public sector consulting, potentially leading to future contracts in related areas.

## Notice

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

## Key Details

| Field | Value |
| --- | --- |
| Publication source | Contracts Finder |
| Latest notice | https://www.contractsfinder.service.gov.uk/Notice/a783bc73-f1a7-428a-8043-4525c785f671 |
| Notice type | Award Notice |
| Procurement type | Standard |
| Procurement category | Services |
| Procurement method | Open |
| Procurement method details | Open procedure (below threshold) |
| Tender suitability | SME |
| Awardee scale | SME |
| All stages | Award |

## Dates

| Field | Value |
| --- | --- |
| Publication date | 15 Nov 2021 |
| Submission deadline | 15 Jan 2020 |
| Future notice date | Not specified |
| Award date | 29 Jan 2021 |
| Contract period | 1 Feb 2021 - 16 Apr 2021 |
| Recurrence | Not specified |

## Values

| Field | Value |
| --- | --- |
| Tender value | £116,850 |
| Lots value | Not specified |
| Awards value | £116,850 |
| Contracts value | Not specified |

## Status

| Field | Value |
| --- | --- |
| Tender status | Complete |
| Lots status | Not specified |
| Awards status | Active |
| Contracts status | Not specified |

## Buyer

| Field | Value |
| --- | --- |
| Main buyer | WATER SERVICES REGULATION AUTHORITY (OFWAT) |
| Locality | BIRMINGHAM |
| Post town | Birmingham |
| Postcode | B5 4UA |
| Country | England |
| ITL 1 | TLG West Midlands (England) |
| ITL 2 | TLG3 West Midlands |
| ITL 3 | TLG31 Birmingham |
| Local authority | Birmingham |
| Electoral ward | Ladywood |
| Westminster constituency | Birmingham Ladywood |
| Delivery location | TLG West Midlands (England), TLI London |

## Supplier

| Field | Value |
| --- | --- |
| Number of suppliers | 1 |
| Supplier names | CEPA |

## CPV Codes

### Divisions

- 79 - Business services: law, marketing, consulting, recruitment, printing and security

### Codes

- 79411000 - General management consultancy services

## Release History

- 15 Nov 2021 at 18:00 - Award - Award Notice - https://www.contractsfinder.service.gov.uk/Notice/a783bc73-f1a7-428a-8043-4525c785f671

## Documents

- https://www.contractsfinder.service.gov.uk/Notice/a783bc73-f1a7-428a-8043-4525c785f671
  15th November 2021 - Awarded contract notice on Contracts Finder

## Provenance

This Markdown file is an alternate public rendering of the D3 Tenders contract record. The canonical page is https://d3tenders.com/contract/?ocid=ocds-b5fd17-916a8867-1b1f-430e-978b-57479fd94278. The underlying structured data is available as OCDS JSON at https://d3tenders.com/contract/ocds-b5fd17-916a8867-1b1f-430e-978b-57479fd94278.json.