Finance for Business North East Microloan Fund Management Contract
The contract opportunity to which this notice relates is: to take over the delivery of the Finance for Business North East Microloan Fund (the “Fund” or “Microloan Fund”) in the North East of England from the current fund manager.
United Kingdom-Newcastle upon Tyne: Financial and insurance services
2014/S 078-136653
Contract notice
Services
Directive 2004/18/EC
Section I: Contracting authority
I.1)Name, addresses and contact point(s)
North East Finance (Holdco) Limited
North East Finance, Ground Floor, 1 St James Gate
Contact point(s): Micro Procurement Team
NE1 4AD Newcastle upon Tyne
UNITED KINGDOM
E-mail: micro@northeastfinance.org
Internet address(es):
General address of the contracting authority: http://www.northeastfinance.org
Further information can be obtained from: The above mentioned contact point(s)
Specifications and additional documents (including documents for competitive dialogue and a dynamic purchasing system) can be obtained from: The above mentioned contact point(s)
Tenders or requests to participate must be sent to: The above mentioned contact point(s)
I.2)Type of the contracting authority
Other: Publicly funded JEREMIE holding fund
I.3)Main activity
Economic and financial affairs
I.4)Contract award on behalf of other contracting authorities
The contracting authority is purchasing on behalf of other contracting authorities: yes
North East Finance (Subco) Limited
1 St James Gate
NE1 4AD Newcastle upon Tyne
UNITED KINGDOM
Section II: Object of the contract
II.1)Description
II.1.1)Title attributed to the contract by the contracting authority:
Finance for Business North East Microloan Fund Management Contract.
II.1.2)Type of contract and location of works, place of delivery or of performance
Services
Service category No 6: Financial services a) Insurances services b) Banking and investment services
Main site or location of works, place of delivery or of performance: The contract will be performed entirely in the North East of England.
NUTS code UKC
Service category No 6: Financial services a) Insurances services b) Banking and investment services
Main site or location of works, place of delivery or of performance: The contract will be performed entirely in the North East of England.
NUTS code UKC
II.1.3)Information about a public contract, a framework agreement or a dynamic purchasing system (DPS)
The notice involves a public contract
II.1.4)Information on framework agreement
II.1.5)Short description of the contract or purchase(s)
The contract opportunity to which this notice relates is: to take over the delivery of the Finance for Business North East Microloan Fund (the “Fund” or “Microloan Fund”) in the North East of England from the current fund manager. Due to circumstances unrelated to the Microloan Fund, the current fund manager will shortly cease to deliver the contract and so North East Finance (Holdco) Limited (“NEF”) intends to appoint a replacement.
NEF is the holding fund manager of the North East of England JEREMIE programme. JEREMIE is the Joint European Resources for Micro to Medium Enterprises initiative of the European Commission and the European Investment Fund, which is designed to increase the availability of finance to micro, small and medium sized enterprises in the European Union. In 2009, NEF raised GBP 125 m of investment capital from the European Regional Development Fund, the European Investment Bank and the UK government – for investment in SMEs based in the North East of England via a number of venture capital and loan funds, including the Microloan Fund.
The total capital allocated to the Microloan Fund will be GBP 6.5 m, of which c. GBP 4 m will have been lent by the time when the fund manager appointed pursuant to this Contract Notice begins managing the fund. The fund manager will be required to lend c. GBP 2.5 m in the period from appointment to 31.12.2015. The fund manager will also be required to manage the pre-existing portfolio so as to minimise defaults and maximise returns, and to do the same in respect of all new borrowers added to the portfolio by the fund manager.
Depending on the level of unmet market demand for small amounts of loan finance and the performance of the appointed fund manager, additional capital up to a maximum of GBP 2.5m may be allocated to the Fund by NEF. Conversely, if due to lack of demand or inadequate performance by the fund manager, the necessary lending rate is not achieved, NEF may reduce the amount of capital committed to the Microloan Fund. All capital allocated to the fund must be lent to SMEs by 31.12.2015 and so capital may be de-committed if insufficient progress is made.
The Microloan Fund makes loans of between GBP 1,000 and GBP 50,000 to individuals, pre-start enterprises and existing businesses located in the North East of England region. The maximum term of any loan made by the Fund is 3 years. The duration of the contract is therefore anticipated to be approximately 5.5 years, with c 1.5 years of active investment period and 4 years to manage collection of the loans, fully realise and wind up the Fund and prepare and submit to NEF the final Fund reports. This duration may be extended by up to one year by NEF.
The Fund is intended to stimulate business and job creation in the region by making small amounts of funding available to commercially viable businesses which have been unable to raise any finance (or the full amount of funding they require) from a commercial / mainstream source. This may be because they lack collateral or a trading history or because lenders consider them to be too high risk due to their circumstances or characteristics.
The Fund must operate at all times in accordance with the De Minimis Aid Block Exemption EC Regulation 1407/2013. As a consequence of the state aid regulations and the regulations governing the use of European Regional Development Fund and European Investment Bank monies, the Fund cannot invest in businesses operating in a number of sectors (including retail) and cannot invest in businesses or undertakings in difficulty.
The fund manager will be required to perform all fund management functions but will not deal directly with any cash management functions, as the loan capital is disbursed direct from NEF (via a its wholly-owned subsidiary, North East Finance (Subco) Limited (NEFS)) to borrowers and all payments of capital and interest is made direct by borrowers to NEFS. As such, the fund manager will not be required to perform any treasury or idle funds management functions. The responsibilities of the fund manager will include the following:
1. promoting and marketing the Fund to ensure prospective customers from across the region are aware of it;
2. operating an efficient application and loan completion system, to enable a high volume of loans to be made;
3. undertaking due diligence on applicants and evaluating applications, making lending decisions which maximise financial returns to the Fund and the achievement of non-financial objectives including business creation and the creation and safeguarding of jobs;
4. issuing and completing loan agreements and arranging for the loan funds to be advanced by NEFS to the borrowers;
5. providing or facilitating post-investment support to some borrowers where necessary and appropriate to reduce default;
6. monitoring all investments and managing the collection of payments, and reporting to NEF on Fund performance; and
7. ensuring all Fund outputs are recorded and reported to NEF, and meeting with NEF and stakeholders to report on fund performance.
NEF is the holding fund manager of the North East of England JEREMIE programme. JEREMIE is the Joint European Resources for Micro to Medium Enterprises initiative of the European Commission and the European Investment Fund, which is designed to increase the availability of finance to micro, small and medium sized enterprises in the European Union. In 2009, NEF raised GBP 125 m of investment capital from the European Regional Development Fund, the European Investment Bank and the UK government – for investment in SMEs based in the North East of England via a number of venture capital and loan funds, including the Microloan Fund.
The total capital allocated to the Microloan Fund will be GBP 6.5 m, of which c. GBP 4 m will have been lent by the time when the fund manager appointed pursuant to this Contract Notice begins managing the fund. The fund manager will be required to lend c. GBP 2.5 m in the period from appointment to 31.12.2015. The fund manager will also be required to manage the pre-existing portfolio so as to minimise defaults and maximise returns, and to do the same in respect of all new borrowers added to the portfolio by the fund manager.
Depending on the level of unmet market demand for small amounts of loan finance and the performance of the appointed fund manager, additional capital up to a maximum of GBP 2.5m may be allocated to the Fund by NEF. Conversely, if due to lack of demand or inadequate performance by the fund manager, the necessary lending rate is not achieved, NEF may reduce the amount of capital committed to the Microloan Fund. All capital allocated to the fund must be lent to SMEs by 31.12.2015 and so capital may be de-committed if insufficient progress is made.
The Microloan Fund makes loans of between GBP 1,000 and GBP 50,000 to individuals, pre-start enterprises and existing businesses located in the North East of England region. The maximum term of any loan made by the Fund is 3 years. The duration of the contract is therefore anticipated to be approximately 5.5 years, with c 1.5 years of active investment period and 4 years to manage collection of the loans, fully realise and wind up the Fund and prepare and submit to NEF the final Fund reports. This duration may be extended by up to one year by NEF.
The Fund is intended to stimulate business and job creation in the region by making small amounts of funding available to commercially viable businesses which have been unable to raise any finance (or the full amount of funding they require) from a commercial / mainstream source. This may be because they lack collateral or a trading history or because lenders consider them to be too high risk due to their circumstances or characteristics.
The Fund must operate at all times in accordance with the De Minimis Aid Block Exemption EC Regulation 1407/2013. As a consequence of the state aid regulations and the regulations governing the use of European Regional Development Fund and European Investment Bank monies, the Fund cannot invest in businesses operating in a number of sectors (including retail) and cannot invest in businesses or undertakings in difficulty.
The fund manager will be required to perform all fund management functions but will not deal directly with any cash management functions, as the loan capital is disbursed direct from NEF (via a its wholly-owned subsidiary, North East Finance (Subco) Limited (NEFS)) to borrowers and all payments of capital and interest is made direct by borrowers to NEFS. As such, the fund manager will not be required to perform any treasury or idle funds management functions. The responsibilities of the fund manager will include the following:
1. promoting and marketing the Fund to ensure prospective customers from across the region are aware of it;
2. operating an efficient application and loan completion system, to enable a high volume of loans to be made;
3. undertaking due diligence on applicants and evaluating applications, making lending decisions which maximise financial returns to the Fund and the achievement of non-financial objectives including business creation and the creation and safeguarding of jobs;
4. issuing and completing loan agreements and arranging for the loan funds to be advanced by NEFS to the borrowers;
5. providing or facilitating post-investment support to some borrowers where necessary and appropriate to reduce default;
6. monitoring all investments and managing the collection of payments, and reporting to NEF on Fund performance; and
7. ensuring all Fund outputs are recorded and reported to NEF, and meeting with NEF and stakeholders to report on fund performance.
II.1.6)Common procurement vocabulary (CPV)
66000000 – SA03 – SA04
II.1.7)Information about Government Procurement Agreement (GPA)
The contract is covered by the Government Procurement Agreement (GPA): no
II.1.8)Lots
This contract is divided into lots: no
II.1.9)Information about variants
Variants will be accepted: no
II.2)Quantity or scope of the contract
II.2.1)Total quantity or scope:
II.2.2)Information about options
Options: no
II.2.3)Information about renewals
This contract is subject to renewal: yes
Number of possible renewals: 1
In the case of renewable supplies or service contracts, estimated timeframe for subsequent contracts:
in months: 12 (from the award of the contract)
Number of possible renewals: 1
In the case of renewable supplies or service contracts, estimated timeframe for subsequent contracts:
in months: 12 (from the award of the contract)
II.3)Duration of the contract or time limit for completion
Starting 1.7.2014. Completion 31.12.2019
Section III: Legal, economic, financial and technical information
III.1)Conditions relating to the contract
III.1.1)Deposits and guarantees required:
The Contracting Authority reserves the right to demand any deposits, guarantees, insurance cover and/or other forms of security cover it deems appropriate.
III.1.2)Main financing conditions and payment arrangements and/or reference to the relevant provisions governing them:
Details are set out in the Invitation to Tender and accompanying documents.
III.1.3)Legal form to be taken by the group of economic operators to whom the contract is to be awarded:
The Contracting Authority reserves the right to require groupings of contractors to form a separate limited liability company and/or to take particular legal form or to require that one takes full responsibility and/or liability and/or that each party undertakes joint and several liability.
Where a consortium or sub-contracting approach is proposed, you must provide all information in respect of the relationships and roles between the parties and identify the proportion of the work to be delivered by each named party.
Where a consortium or sub-contracting approach is proposed, you must provide all information in respect of the relationships and roles between the parties and identify the proportion of the work to be delivered by each named party.
III.1.4)Other particular conditions
The performance of the contract is subject to particular conditions: yes
Description of particular conditions: Conditions are specified in the Invitation to Tender and in the Fund Management Agreement supplied with the Invitation to Tender.
Description of particular conditions: Conditions are specified in the Invitation to Tender and in the Fund Management Agreement supplied with the Invitation to Tender.
III.2)Conditions for participation
III.2.1)Personal situation of economic operators, including requirements relating to enrolment on professional or trade registers
Information and formalities necessary for evaluating if the requirements are met: At the time of delivering the services, the contractor must hold the appropriate authorisation from the Financial Conduct Authority. Further details as set out in the Invitation to Tender available from the address in Section 1.1 and as detailed in Regulation 23 of the Public Contracts Regulations 2006.
III.2.2)Economic and financial ability
Information and formalities necessary for evaluating if the requirements are met: As set out in the Invitation to Tender available from the address in section 1.1.
Minimum level(s) of standards possibly required: As set out in the Invitation to Tender available from the address in section 1.1.
Minimum level(s) of standards possibly required: As set out in the Invitation to Tender available from the address in section 1.1.
III.2.3)Technical capacity
Information and formalities necessary for evaluating if the requirements are met:
As set out in the Invitation to Tender available from the address in section 1.1.
Minimum level(s) of standards possibly required:
As set out in the Invitation to Tender available from the address in section 1.1.
As set out in the Invitation to Tender available from the address in section 1.1.
Minimum level(s) of standards possibly required:
As set out in the Invitation to Tender available from the address in section 1.1.
III.2.4)Information about reserved contracts
III.3)Conditions specific to services contracts
III.3.1)Information about a particular profession
Execution of the service is reserved to a particular profession: no
III.3.2)Staff responsible for the execution of the service
Legal persons should indicate the names and professional qualifications of the staff responsible for the execution of the service: yes
Section IV: Procedure
IV.1)Type of procedure
IV.1.1)Type of procedure
Open
IV.1.2)Limitations on the number of operators who will be invited to tender or to participate
IV.1.3)Reduction of the number of operators during the negotiation or dialogue
IV.2)Award criteria
IV.2.1)Award criteria
The most economically advantageous tender in terms of the criteria stated in the specifications, in the invitation to tender or to negotiate or in the descriptive document
IV.2.2)Information about electronic auction
An electronic auction will be used: no
IV.3)Administrative information
IV.3.1)File reference number attributed by the contracting authority:
NEF14
IV.3.2)Previous publication(s) concerning the same contract
no
IV.3.3)Conditions for obtaining specifications and additional documents or descriptive document
IV.3.4)Time limit for receipt of tenders or requests to participate
27.5.2014 – 12:00
IV.3.5)Date of dispatch of invitations to tender or to participate to selected candidates
IV.3.6)Language(s) in which tenders or requests to participate may be drawn up
English.
IV.3.7)Minimum time frame during which the tenderer must maintain the tender
in days: 90 (from the date stated for receipt of tender)
IV.3.8)Conditions for opening of tenders
Date: 27.5.2014 – 12:00
Place:
Place:
Registered office of North East Finance (Holdco) Limited.
Section VI: Complementary information
VI.1)Information about recurrence
This is a recurrent procurement: no
VI.2)Information about European Union funds
The contract is related to a project and/or programme financed by European Union funds: yes
Reference to project(s) and/or programme(s): The contract relates to a loan fund which has been created by the North East of England JEREMIE holding fund, with the support of the European Regional Development Fund.
Reference to project(s) and/or programme(s): The contract relates to a loan fund which has been created by the North East of England JEREMIE holding fund, with the support of the European Regional Development Fund.
VI.3)Additional information
The Contracting Authority does not bind itself to accept any tender and withholds the right to appoint outside any contract should it be considered to be in the best interest of the Contracting Authority. The Contracting Authority is not liable for any costs incurred by those expressing an interest or tendering for this opportunity.
Compliance with all legislation is required, both in the contract award procedure and during the term of the contract.
The Contracting Authority reserves the right to extend the contract for a period of not more than 12 months.
The Contracting Authority reserves the right to procure repeat services of a similar nature to the services in this contract notice without a further call for competition pursuant to Regulation 14(1)(d)(ii) of the Public Contracts Regulations 2006.
Any resulting contract will be considered as a contract made in England according to English law and will be subject to the exclusive jurisdiction of the English courts.
Tenders and all supporting documentation must be priced in pounds Sterling.
Please note that all dates and figures provided in this notice are approximate.
Compliance with all legislation is required, both in the contract award procedure and during the term of the contract.
The Contracting Authority reserves the right to extend the contract for a period of not more than 12 months.
The Contracting Authority reserves the right to procure repeat services of a similar nature to the services in this contract notice without a further call for competition pursuant to Regulation 14(1)(d)(ii) of the Public Contracts Regulations 2006.
Any resulting contract will be considered as a contract made in England according to English law and will be subject to the exclusive jurisdiction of the English courts.
Tenders and all supporting documentation must be priced in pounds Sterling.
Please note that all dates and figures provided in this notice are approximate.
VI.4)Procedures for appeal
VI.4.1)Body responsible for appeal procedures
VI.4.2)Lodging of appeals
Precise information on deadline(s) for lodging appeals: As detailed in Regulation 32 (Information about contract award procedures and the application of the standstill period prior to the contract award) and Regulation 47 (Enforcement of Obligations) of the Public Contracts Regulations 2006.
VI.4.3)Service from which information about the lodging of appeals may be obtained
VI.5)Date of dispatch of this notice:16.4.2014