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Request for proposals (RFP)
12 May 2003
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Note: The time period for proposals closed on 26 May 2003. This document is being provided for information only.
Contents
Matters to be addressed in proposal
Introduction
- The Government recently announced its decisions on the policy for the reallocation of commercial spectrum rights created under the Radiocommunications Act 1989 and expiring from 2010 onwards. The policy is that commercial spectrum rights be reallocated to existing rightholders based on price-setting formulae that estimate the market value of the rights, and that, rightholders do not wish to pay this price, the respective rights will be reallocated by way of auction.
- The Ministry of Economic Development (MED) is required to develop suitable price-setting formulae for the reallocation of spectrum rights for consideration and final approval by Cabinet.
Project description
- The project involves advising MED on suitable price-setting formulae for the reallocation of commercial spectrum rights when they expire. The successful tenderer will be expected to produce two outputs:
Price-setting formulae
- The project will result in a set of formulae that determine the price that current rightholders should pay to acquire their spectrum rights for an additional 20-year term. The proposed formulae should:
- approximate the true market value of the spectrum rights to which they relate;
- minimise any impact on the efficient allocation of spectrum rights;
- be low cost and simple to administer and be able to be applied in a transparent manner;
- be capable of being applied as either a lump sum or an annual fee
- provide rightholders with certainty as to the application of the formulae well in advance of the expiry of rights;
- be consistent with other price-setting mechanisms used in spectrum management, where appropriate; and
- provide a fair financial return to the Crown for the commercial use of spectrum rights in the future period.
- The successful tenderer is expected to advise on the appropriate level of specificity of the formulae in relation to the rights for different types of spectrum. However, it is anticipated that at least two price-setting formulae will be required - one for the reallocation of management rights and one for the reallocation of spectrum licences.
- It is expected that the views of current spectrum rightholders will be sought in the development of the price-setting formulae to ensure that they reflect the best estimate of the market value of spectrum rights.
- It should be noted that the formulae would be applied five years prior to the expiry of the initial spectrum rights to provide rightholders with the certainty they require for making effective investment decisions and to enable a smooth transition between rights. The formulae should be presented in a form that can be readily applied to the reallocation of spectrum rights, starting from 2005.
- The formulae will be applied to the reallocation of commercial spectrum rights only. Spectrum rights reserved for the purpose of public policy objectives and the promotion of Māori language and culture would not be reallocated using the formulae.
Report
- The successful tenderer will also be required to prepare a short report on the proposed formulae. The report should:
- explain the proposed formulae in detail, including the type of information that will be required for their application;
- comment on the ability of the proposed formulae to achieve the objectives outlined in paragraph 4 above;
- outline the reasons why the proposed formulae are considered to be the most suitable option and what other options were considered;
- highlight any risks or difficulties associated with the formulae and how these can be effectively managed; and
- identify any other factors relevant to the successful implementation of the formulae.
- It should be noted that the Ministry intends to seek peer review of the proposed formulae. The report should include any information that would assist with this.
Matters to be addressed in proposal
- Proposals should be self-contained and include details on:
- the proposed methodology for developing the price-setting formulae and any envisaged difficulties;
- the type of information the Ministry will be expected to provide to assist in the development of the formulae;
- how the views of existing rightholders will be obtained and utilised;
- the key personnel in your team and a short curriculum vitae of each member outlining their relevant experience and their respective contribution to the project;
- all fees and other costs that will be payable, including fees payable by any subcontractors or other advisors that will be used in undertaking the project; and
- any real or perceived conflicts of interest and how these are to be resolved.
- All prices in the proposal must be in New Zealand dollars and exclusive of goods and services tax.
Submission of proposals
- Your proposal should be supplied to MED in electronic form no later that 5:00 p.m. on Monday, 26 May 2003, together with a copy in written form. Proposals should be addressed to:
Evaluation of proposals
- The Ministry expects to appoint the successful tenderer no later than Friday, 30 May 2003. Proposal evaluation is an assessment of the proposal and the tenderer's ability to perform the prospective contract successfully. While price is an important consideration to MED, other criteria may influence MED's decision to accept or reject a proposal. MED may use any criteria, and place any weight on criteria, it wishes in its evaluation of any proposal.
- MED is not obliged to accept the lowest or any proposal, to acquire any of the services included in a proposal, or to discuss the reason why any proposal was accepted or rejected and reserves the right to accept none or any of the proposals.
- MED reserves the unrestricted right to, at any time:
- Change any date, time, timeframe or any other aspect of this RFP process;
- Suspend or cancel this RFP by notice;
- Reject or not consider any non-compliant proposal;
- Consider any alternative proposal;
- Interview any personnel of any respondent or other person as part of the valuation process;
- Do any other act or thing that it sees fit in relation to this RFP.
Timeframe
- The successful tenderer is expected to commence work on the development of the price-setting formulae as soon as possible after appointment. A draft report including recommendations is to be submitted to the Ministry no later than 5:00 p.m., Friday, 27 June 2003. The final report is to be submitted to the Ministry no later than 5:00 p.m., Friday, 8 August 2003.1
Expertise required
- It is expected that the successful tenderer will have a strong background and experience in economic analysis, including pricing theory. Knowledge of the management and regulation of radio spectrum, both domestically and overseas, would also be an advantage.
- The Ministry prefers an economic consultant to take the lead responsibility for the review. However, the Ministry would welcome the lead consultant sub-contracting part of the review, provided the lead consultant retains full responsibility for the delivery of the report and recommendations to the Ministry.
- The successful tenderer is expected to seek input from the Ministry staff (the Radio Spectrum Management Group and the Radio Spectrum and Broadcasting Policy Group). In addition, the views of current rightholders should also be sought.
Expenses
- The Ministry has a preference for expenses (including fees for all subcontractors and advisors) to be subject to an overall cap. You are encouraged to reflect this in your proposal.
Support from the Ministry
- The successful tenderer will work with and be accountable to the Ministry. The successful tenderer will be provided with access to all relevant information held by the Ministry that may help with this work.
Copyright
- The price-setting formulae, report and any background papers produced or collated by the successful tenderer for the purpose of carrying out this work shall be the property of MED.
Confidentiality
- The successful tender must agree to treat any information provided by MED in strict confidence unless prior written permission has been obtained in respect of the disclosure of that information.
Contract
- No legal or other obligation will arise between the tenderer and MED in relation to the conduct or outcome of this RFP process, unless or until MED and the successful tenderer have entered into a signed agreement. The successful tenderer will be required to sign the Ministry of Economic Development's standard contract for consultants.
Disclaimer
- MED will not be liable for any direct or indirect damage, loss or cost, (including legal costs) to any respondent or other person in relation to this RFP process and, in particular, in relation to the preparation of a proposal.
Privacy
- Each tenderer authorises MED to collect any information from the tenderer and relevant third parties and to use that information in respect of the respondent. Where that information is known to the respondent, it may require the Ministry to update or correct that information.
1Please note that the final report will reflect feedback from a process of peer review that will be arranged by the Ministry.
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Last updated 4 April 2008
