Strength of Commitment

The Local Authority is concerned that it contracts with a financially robust Bidder and that the Bidder's financial models for this Project are viable and support the service delivery.  It is also important to the Local Authority that Solutions are sufficiently developed and robust, and has attracted sufficient support and commitment from lenders and investors, to satisfy the Local Authority that there is no material risk on financial grounds of a failure.  

The Local Authority is concerned to reduce the possibility of delays and protracted dialogue once a Preferred Bidder has been selected.  The stronger the level of commitment by debt and equity providers, the more favourably the Solution will be assessed.  The Local Authority will, in order to assess the strength of this commitment, require meetings with the debt and equity providers during the period of competitive dialogue.

The level of commitment should be demonstrated by providing the following documents:

•  Letters from third party equity investors (if applicable) committing to subscribe, and from the financial advisors or proposed underwriters or stockbrokers in respect of third-party equity

•  Letters from the underwriting banks and financial institutions offering debt facilities to the Service Provider on the basis of the outline term sheets to be submitted with each Solution

•  A letter from the financial advisor stating that the funding structure is realistic, achievable and that the financing proposals are sufficient to enable the Service Provider to meet its obligations under the Contract.

The letters of support from the underwriting banks and financial institutions must:

•  State that the funders are willing in principle to fund the project and that they will provide a committed offer accepting the Contract terms (except for stated qualifications) on confirmation of the Bidder as provisional Preferred Bidder.  The extent to which the funders have reviewed and carried out due diligence on the Model Contract during the competitive dialogue stage, and the timescale and steps involved in completing the due diligence should be stated.

•  Specify all the relevant conditions that need to be satisfied for the funding to be committed.