RFP 042/2021 NON- COMPULSORY - BRIEFING MEETING: …

RFP 042/2021 – NON- COMPULSORY - BRIEFING MEETING: QUESTIONS AND RESPONSES – ADDENDUM NO.4

Item no.

Category Question Response

1.

SCM/Technical Q: If acting for the Institution, it is not standard practice for the Institution to draft the following agreements as part of a DBOM/ Turnkey model: 1. EPC Contract – drafted by the Project Company’s legal advisors 2. O&M Agreement– drafted by the Project Company’s legal advisors 3. Financing agreements, in particular relating to

Responses following the same numbering:

1. Noted. However, the DHET requires SHIP MO to develop technical and funding

models/approaches to support the Programme (the SHIP). The Minister has called on all

parties assisting with the Programme, including SHIP MO, to propose creative solutions for

the Programme.

While it is important to consider “standard practice”, bidders are requested to note that the

goal is to develop what is currently a fledging South African student housing market into a

mature market, capable of attracting and maintaining investment in the long term. This

requires solutions that at times, may deviate from standard practice.

In producing the requested documents and agreements, SHIP MO is not doing so as a

representative of the institutions but is doing so as a coordinator and facilitator of the

Programme on the one hand; and as a vehicle for developing the South African student

housing market on the other. The mandate for this comes from the DHET, in the main.

An EPC agreement is requested, regardless of who is ordinarily responsible for drafting one,

per industry practice. The goal is to produce industry-wide standard documents and

contracting terms (the industry is the PSET market) as well as to determine how each set of

standardised terms works together with the rest of the contracting documents and terms.

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(i) on balance sheet funding by the Institution (ii) senior debt from commercial lenders/ capital markets where there is project financing – these are drafted by lender legal counsel or by internal legal within the institution. 4. Moreover, under a blended finance model, DHET grant funding will be processed presumably in terms of NT application forms (which is co-ordinated by the IF) 5. In respect of drafting a Project Development agreement between the Institution and the developer, such agreement

Given its programme-wide view, SHIP MO does not wish to be surprised at the

implementation stage of projects with terms that had largely not been considered or

anticipated.

Further, if we do not produce standard agreements at this stage, there is the risk that the rest

of the documents and terms developed by or for use in the Programme may not work well

with other contracting documents.

There is also the risk that we are opening the process up for protracted negotiations in the

end. We seek a standard EPC agreement that will be tested with developers, or any other

identified parties, as part of the stakeholder buy-in process.

2. See response in 1 above.

3. See response in 1 above.

4. The blended finance structure has several components: it combines public funds (through the

BFI application as well as allocated infrastructure and efficiency grant funding (IEG/CIEG)),

NSFAS, DFI finance, university and college contributions and financial support from the

private sector.

The grants are applied for as prescribed in terms of the respective application processes and

the applications will not necessarily be in one form or format.

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presumably relates to an accreditation model which is not envisaged for Cluster 2 of Phase 2. 6. Similarly, the reference to developing a lease agreement applies to the BOOT model where the developer owns the land, so presumably not required for the DBOM/ Turnkey model under Cluster 2 of Phase 2 where land use right form part of the Turnkey Contract. DBSA to please clarify on what basis the above agreements are drafted for SHIP MO as this is not standard industry practice.

IF will coordinate the BFI application process and will also help to structure these funds into

a pool where the funds, and other sources of funding will live together under one facility or

financing structure.

Please refer to the terms of reference for a high-level explanation of the role of the

Infrastructure Fund. For more details on NSFAS, please see the website www.nsfas.org.za

IF is a stakeholder to be consulted as part of the stakeholder engagement process and in any

case, as part of the process of understanding the applicable financing structure. For more

information on MTEF, please visit the website:

http://www.treasury.gov.za/publications/guidelines/2020%20MTEF%20Technical%20Guidelines.pdf

5. Bidders are entitled to determine the extent to which an agreement listed by SHIP MO is or is

not applicable to a specific model, with reasons provided. The listed agreements are a

shopping list and are listed primarily as examples, based on SHIP MO’s understanding of the

models and based on past experience.

Some of the expertise requested from bidders as part of the assignment is to ensure a

complete suite of agreements/documents required to enable, give effect to or support a

specific model. Alternatively, or in addition, bidders may also identify the most appropriate

parties to conclude a specific agreement, with reasons provided.

http://www.nsfas.org.za/

http://www.treasury.gov.za/publications/guidelines/2020%20MTEF%20Technical%20Guidelines.pdf

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Therefore, the agreements that could be developed for the Institutions under Cluster 2 Phase 2 are: - RfQ - RfP - Concession agreement (with provisions for a possible capital contribution by the Institution, whether contributed from budget or through concessional loans) and applicable schedules - Implementation agreement (between the Institution and SHIP MO)

Ideally, bidders should comment on this as part of their proposal – in the methodology and

approach section, or as part of the implementation plan – which is the first deliverable of the

assignment. Please refer to the terms of reference for a list of deliverables.

Bidders should please not approach this assignment as work being done “for

institutions”. This assignment comprises work being done for “the Programme” (i.e.,

the SHIP) to ensure that all Programme participants have the same understanding of

the Programme’s contracting environment. The contracting process needs to be

efficient and standardised as far as possible.

6. Please refer to the responses above.

2.

SCM/Technical Q: Please clarify what the deliverable is for this scope of work?

Harmonised procurement processes may or may not be incorporated into procurement documents, depending on how the bidder approaches the solution. The most important thing is that the process should be capable of being easily understood so that a process flow-chart can be produced without

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Presumably harmonised procurement activities will be incorporated into the procurement documents i.e. RFQ and RFP.

difficulty. A superior solution will in fact be accompanied by a process flow-chart and will address, at a minimum, the follow aspects:

• the process of inviting bids, RFQs or RFPs;

Example of high-level process: Institution analyses feasibility study report Institution

council adopts feasibility study report and makes final investment decision SHIP MO

standardised RFP document is used by the institution to invite bids ….etc….(These are

SHIP MO initial examples; and bidders are invited to propose processes that will reduce

indecision, uncertainty on next steps, duplicated work and complexity, among other

potential bottlenecks).

• administrative compliance;

• pre-qualification criteria;

• functional criteria;

• mandatory documents and information;

• the process for the submission of bids;

• the process for the evaluation and selection of the successful bidder;

• the processes for the announcement of the successful bidder; and

• the contracting process.

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The test for the process is whether Programme participants are able to approach each

stage of the process in more or less the same way, or to understand each stage of the

process in more or less the same way. Ultimately, financiers and other interested

parties should be able to understand what the development process entails; and this

deliverable is in aid of that.

3.

SCM/Technical Q: DBSA to please give an indication of how many stakeholders will need to be consulted in respect of:

- Debt providers – DFIs and commercial lenders

- Institutional investors

- Project developers

Bidders are required to ensure a representative sample of Programme stakeholders or industry participants. A representative sample accurately and fully represents the characteristics of the population or Programme stakeholder universe. SHIP MO has identified the sample as follows:

• the debt market;

- South African DFIs

- International DFIs

- Commercial lenders

- Institutional investors

• the DHET (to be engaged with the facilitation of SHIP MO);

• Private developers; and

• PSET Institutions, among others.

One data set per category (or sub-category) should be sufficient, but bidders are

reminded that a superior solution will also address the test for determining whether

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the stakeholder engagement process has been effective (please refer to the terms of

reference). It is therefore the duty of the successful bidder to ensure the completeness

of the sample. Regarding South African DFIs, bidders may indicate how they wish to

engage the DBSA, given that it is a South African DFI as well as how SHIP MO may

assist in that regard. SHIP MO is willing to facilitate such engagement.

Bidders may comment in detail on the completeness, or lack of completeness (i.e. on

the representativeness) of SHIP MO’s list of stakeholders in their proposals and/or

implementation plan.

4. SCM/Technical Q: - How does the

evaluation of Cluster 2 bids align with the current TA appointments of the Cluster 2 Phase 2

- The scopes are different.

-

- “Current” TAs are undertaking conceptualisation work (up to feasibility). This assignment

relates to documents for post-feasibility activities (i.e. implementation and financing). Please

refer to the terms of reference for a full definition of the scope of work. The evaluation of bids

will be in respect of service providers during the implementation phase (e.g., developers in

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projects, which presumably also include this scope of work?

- Does this relate only to projects for Cluster 2 of Phase 2 i.e. the 4 listed projects, or all projects forming part of Clusters 1, 2 and 3 of Phase 2 i.e. 12 projects?

- The ToR refers to including projects for “the remainder of Phase 1”. How many projects is this?

respect of each project). The successful bidder will have developed standardised

procurement documents and processes. These documents and processes will in part be used

to procure goods and services for the implementation phase. The evaluation of bids will find

relevance in this regard.

- The evaluation of bids relates to phase 2, with cluster 2 being the most advanced cluster in

the phase. Therefore, all the projects in cluster 2.

- The remaining projects in phase 1 that may require the evaluation of bids are the University

of Zululand and King Hintsa TVET College. Bidder is required to provide pricing for these for

this submission. It should be noted that this component of the scope of services has the

potential of being withdrawn, should these institutions decide not to utilise SHIP MO’s services

for their bid evaluations.

- Assisting SHIP MO and Project Owners during the contracting process could be viewed as an

activity flowing from the preceding activities in the scope, being to: (a) plan, oversee and

execute briefing activities to prospective bidders during the procurement of contractors,

service providers and other project role-players; (b) address any queries arising from the

market, during the procurement process; (c) provide any clarification requested by the market

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- We are required to provide assistance to SHIP MO and the relevant institution during the contracting process. What internal capacity exists for supporting the contracting process? We would need to understand the level of effort/ assistance required for this activity

- Is the TA required to assist the Institution to financial closure or

in respect of the procurement process itself and where relevant, the Projects; and (d) lead the

bid evaluation team, assist and advise SHIP MO during the evaluation of submissions

received from bidders.

The successful bidder will be required to ensure that these activities support the completion

of a proper contracting process. As a simple example, standardised contracts may need to

be explained, if they are not understood. If there is a need, this explanation will be provided

by or with the assistance of the successful bidder. It however is recognised that this

assistance will be required only “as necessary” and that it may not be required at all,

depending on the quality of documents and processes produced. The bidders are invited to

propose the bounds of assistance that they believe they would be capable of providing during

the contracting process. Superior proposals will list the forms of assistance that would be

made available, even in generic terms.

The following internal capacity that will be available for supporting the contracting process:

(a) approving structures within each institution, (b) internal or outsourced legal advice, (c)

SHIP MO advisory and project management support.

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commercial closure?

- No. The successful bidder will not be required to assist the institution to financial close or

commercial close, as part of this assignment.

5.

SCM/Technical Q: - Tracking tools

required for track and monitor the quality, output and progress of the work undertaken by contractors, service providers and other project role-players - Do these need to be documents or can we offer a customised online tracking tool/ software?

- Can this scope

of work be

undertaken by

- Documents, customised online tracking tools/software or any other practical, efficient and

cost-effective tools will be considered. The benefits of the proposed tracking tools would need

to be highlighted. A solution relying on third-party licensing or that is restricted in some form

will not be preferred if it presents a risk that “business continuity” is controlled by a third party.

- Yes. This may be subcontracted. IP ownership will be required to be transferred to the

DBSA/SHIP MO upon payment. The successful bidder will nonetheless be responsible for the

performance of the subcontractor.

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entirely

different

(outsourced)

team from the

team

developing the

standardised

documents

and evaluating

bids?

6.

SCM/Technical Q: - Are bidders

required to bid for both Part A and Part B?

- The delivery dates for the Part B deliverables (at page 75 of the RFP) do not match the roll out of Phases 3,4 and 5 (per beds) in Table 1. These delivery dates

- Yes. Bidders are required to bid for both Part A and Part B. The DBSA however reserves the

right to partially award the assignment.

- Ideally, from SHIP MO’s perspective, the standardisation project should be completed as part

of a single scope of work. However, structuring the scope in this way would have made for a

difficult and complex assignment. Therefore, the scope was divided into two parts to make it

manageable and to ensure that the more urgent phase 2 scope is completed in time.

If Part B of the scope (phases 3, 4 and 5) is completed long after Part A, there will be several

disadvantages. The main disadvantage is that lessons learnt from Part will not fully transfer

to Part B of the scope, due to the time lag between the “two” assignments. Also, there will

naturally be cost implications associated with waiting longer to complete Part B of the scope.

Finally, the stakeholders to be engaged (the market) would need to be sensitised anew. The

documents need to be completed and kept in the ready for use, regardless of when the actual

rollout is.

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will happen far in advance of the anticipated roll out of Phases 3, 4 and 5. Is it the SHIP MO’s intention to have these documents finalised years in advance of the actual roll out of the projects in these Phases?

- Is it anticipated that the standardised documents will be developed before the feasibility studies for Phases 3, 4 and 5 have

- The development of the standardisation documents does not depend on, nor is it necessarily

impacted by the completion of feasibility studies for phases 3, 4 and 5. The main target is that

the standardised documents need to be developed prior to the implementation phase.

Naturally, the feasibility studies also precede the implementation phase. The sequencing of

feasibility studies relative to the standardisation project should not impact the ability to deliver

on the scope.

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been completed?

7.

SCM/Technical Q: Bidders are required to bid on a fixed-price lump sum basis. There is still a lot of uncertainty regarding the Part B scope of work especially as the structure of these projects is still unknown. Will the DBSA consider splitting Part A to be lump sum and Part B to be hourly rates based, with the DBSA’s right to cancel this scope of work if the pricing is not in line with budgets?

Part B of the scope requires the bidders to produce documents addressing all of the listed models (please refer to the terms of reference). These models represent the available or possible structures. Given that, bidders are requested to bid on a fixed-priced basis, to produce solutions for all the listed models. What is unknown is the specific model that will be chosen out of the available ones, but there is available a complete list of models, which the work needs to be based on.

8.

SCM/Technical Q: How long is the assignment expected to be in place?

A two-year period is envisaged – to cover phase 2 of the project; and to thereafter cover the rest of the phases. The prospective bidders are requested to refer to the programme execution schedule in the terms of reference, as well as the itemised list of deliverables.

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Will the team be required to work in the SHIP MO’s PMO?

The team will not be required to work in the SHIP MO PMO. During the bid evaluation stage (phase 2), the most appropriate working arrangement will be made, and might include virtual meetings to assess and discuss bids received.

9.

SCM/Technical Q: Must the legal advisor serve the lead role? The RFP includes many non-legal aspects such as finance, technical, stakeholder engagement and intensive project management given the number of procurements to be undertaken. In our experience, legal firms are not set up to manage these types of inputs. Preliminary discussions with one legal firm confirmed that they

Yes, the legal advisor must serve the lead role. The output is contracting tools, processes and documents. The legal advisor will be able to see the bigger picture regarding how these tools, processes and documents fit together in the contracting environment. We understand that the legal advisor would require support from other members of the consortium. The legal advisor can decide how to configure the consortium in that regard, but the DBSA will look to interface with the legal advisor as the assignment lead.

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are not best placed to play a lead role. Will the DBSA consider other members of the team to play a lead role?

10.

SCM/Technical Q: Who is anticipated to prepare the Feasibility Study for phases 3-5? The TOR does not mention feasibility study as part of the advisor’s scope. Can we assume that separate advisors will be appointed?

Yes, it can be assumed that separate advisors will be appointed to prepare feasibility studies. We are looking for standardised contracting tools, processes and documents. The appointment of service providers to prepare feasibility studies is not part of the scope of work for this assignment.

11.

SCM/Technical Q: The necessity of the Economist to have project finance experience The economist’s role is usually limited to items 1) decisions on what investments to

It is advantageous that the economist should have project finance experience, but we are willing to downgrade this from its position as a prequalification criterion. In short, we are willing to consider an economist without project finance experience.

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make or 2) quantify the economic benefits of a particular investment decision. This quantification usually occurs in the feasibility stage. In this case because SHIP has decided on item 1, then the role might be on item 2 if this was not done in the feasibility study. If that the intention is item 2, then we do not think it is important for the economist to have project finance and financial close experience. This experience is more important to have for the financial and legal specialists, and to a lesser extent the technical specialist. Our question is 1) Can the DBSA clarify the

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role of the economist? 2) If it is needed, can the DBSA take away the project finance experience from the requirement as this role does not need the project finance experience? This is particularly the case when looking at the more conventional execution models.

SCM/Technical Q: Number of procurements to assume in phases 3 to 5 If we look at the number of beds to be procured in phases 3-5, it is some 256,000 beds. Should we use phase 2 as a benchmark where some 24,000 beds will be procured by 12 institutions, then the

Pricing is to be on a fixed-fee basis, please.

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number of institutions procuring beds in phases 3-5 will be 128 institutions (256,000/24,000 * 12). Given the many variables that can affect the number of procuring institutions and procuring events and the difficulty to price this uncertainty, we request that DBSA allow us to price on a unit price, for example price per cluster or price per procurement.

12.

SCM/Technical Q: Advisors for Phase 1 and Phase 2(cluster 2) Given that the winning bidder will be interacting with Advisors for Phase 1 and Cluster 2 of Phase 2, may DBSA

Advisors for Phase 1 and Phase 2 (cluster 2) can be shared with the successful bidder, provided any required consents are obtained as relevant.

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provide the firm’s names

13.

SCM/Technical Q: Given that answers to the above questions might affect a bidder’s strategy, staffing and teaming arrangements, may we please request extension?

The granted extension is 5 working days.

14.

SCM/Technical Q: Participation of advisors in this RFP upstream supporting SHIP MO versus downstream participation supporting bidders into the SHIP MO. Given the large size of SHIP MO, we are finding some bidders (in particular technical firms) are not interested in bidding on this RFP as the downstream supporting bidders will be more lucrative. Our

Note: Bidders to please note the important distinction between SHIP and SHIP MO. SHIP is the programme, while SHIP MO is the management office coordinating the programme. As a general rule, if there is a clear conflict of interests (assessed at the time) or an unfair advantage, the DBSA reserves the right to exclude any bidder from participating “downstream”. As a “Schedule 2” PFMA entity, the DBSA has to ensure that procurement observes the main pillars, being (a) Value for Money, (b) Open and Effective Competition, (c) Ethics and Fair Dealing, (d) Accountability and (e) Reporting Equity. As always, bidders are required to declare interests and any concerns regarding conflicting interests or unfair advantage will be assessed on a case-by-case basis. Bidders will not be excluded from participating in “downstream” SHIP solutions solely by virtue of having taken part in this assignment. However, bidders will be required to demonstrate, as part of their methodology approach, what steps will be taken to ensure that there is no conflict of interest or an unfair advantage.

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question is would the winning bidder to this RFP be precluded from supporting bidders? If the answer is yes, would the DBSA allow a structure that would allow some participation by advisors on both sides? This is especially important for this RFP because of the project finance requirements that effectively shrink the pool of advisors to those that have been involved in project finance, given the dearth of PPP projects in South Africa. Some possible options DBSA could consider include:

As an example, a conflict of interests or an unfair advantage arises if TAs evaluate bids under phase 2 and then proceed to form part of consortia doing work resulting from the bids. This would then necessitate that evaluation bids under phase 2 precludes a TA from “downstream phase 2 work”. Phase 3, 4 and 5 assignments will be accessible in principle, but once again, any conflicting interests observed or any unfair advantage, should there be any, would mean exclusion.

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1) Participation by the same firm is allowed as long as they are by different teams and that clear 'ethical walls' between the teams exist. We note that this arrangement is already one by DBSA under the IPP program.

15.

SCM/Technical Q: Participation by the same team in supporting bidders is allowed but for phases 3-5 only. This is because phase 3-5 does not include specific projects and there will be no 'confidential information' that the advisor would have access to. Hence advisors who support evaluation of phase 2

Please see above.

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would be precluded from supporting bidders in Phase 2.