SPECIAL NOTICE
99 -- NOTICE OF INTENT
- Notice Date
- 8/2/2011
- Notice Type
- Special Notice
- NAICS
- 541611
— Administrative Management and General Management Consulting Services
- Contracting Office
- Office of HQ Procurement ServicesU.S. Department of EnergyOffice of HQ Procurement Servicesc/o Office of Legacy Management3600 Collins Ferry RoadMorgantownWV26505
- ZIP Code
- 26505
- E-Mail Address
-
Morton, Nacole L
(nacole.morton@hq.doe.gov)
- Small Business Set-Aside
- N/A
- Description
- NOTICE OF INTENT The Department of Energy (DOE) intends to award a sole source firm fixed priced contract to Standard & Poor (S&P) under FAR 6.302-1, One Responsible Source. The value of the proposed sole source is $450,000. The proposed work will be for creating highly specialized credit/risk assessment models to support the DOE?s Loan Programs Office (LPO).The purpose of the proposed contract is to obtain specialized credit/risk assessment models based on a comprehensive and extensive project finance data base owned by S & P to support the LPO?s risk management of the DOE renewable energy loan portfolio. The LPO requirement will require S & P to provide rating methodologies to assess risk and calculate Probabilities of Default (PD) and Loss-Given Defaults (LGD) for each transaction in the loan portfolio. The S & P models are uniquely able to provide the tools to perform these calculations. The period of performance for this contract shall be a period of 13 weeks to tailor the models and provide training on the models with annual updates for 4 years. The S & P deliverable will be a dual rating model, incorporating both a PD credit assessment model and an LGD credit assessment model. The dual-rating models will assist LPO PMD in monitoring the risk of the loan portfolio in order to provide early warning indicators and strong evidence of increasing risk to support management decisions on loss provisioning and risk management reporting. S & P is uniquely qualified to provide LPO with the dual-rating model as the model will incorporate S & P?s proprietary data which will incorporate elements of S & P Rating Services Group?s credit rating database and utilize S & P?s expertise in risk rating project finance. Through its rating services, S & P has a substantial proprietary database across industries and is one of the few credit rating agencies to have considerable data on rating project finance. S & P has knowledge of the risk factors involved in energy projects and auto manufacturing transactions. S & P also has expert knowledge of the energy market, legal framework and energy regulations. S & P has the unique experience pertinent to creating a dual-rating model that weighs the various risk factors to support the resulting PD and LGD. Additionally, S & P data represents more than 75% of global project finance loans, which is a high level of data given that project finance transactions are challenging to assess for creditworthiness due to the low level of defaults. S & P?s default and loss severity database is proprietary and is based on portfolio/workout information aggregated from the portfolios of the top lenders in the project finance field. The S & P?s inputs to their model include certain information from S & P (proprietary) cash flow models, which are utilized to estimate an economic value of the project. Each item in the model also has a volatility parameter associated to it, which is derived by S & P. These parameters will be applied to values in the default estimates. The proposed dual-rating model will leverage S & P?s experience in rating energy project finance credits and auto manufacturing credits, tailored to LPO?s specific requirements. S & P has worked with many organizations to validate, benchmark and develop components of a dual-rating model. The S & P database and S & P Rating Services Group provides S & P with a unique understanding of the PD and LGD approach of a variety of organizations as well as the energy regulatory market. The DOE will require that firms who wish to challenge this proposed sole source must do so in writing by advising the Contract Specialist, Lisa Persson, by e-mail using lisa.persson@hq.doe.gov. The submission must contain a complete technical and price description of the counter offer by the challenging firm. The due date for submission is September 6, 2011.
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- Record
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