Stress Testing Training

Advance Contract Award Notice (ACAN)An ACAN is a public notice indicating to the supplier community that a department or agency intends to award a contract for goods, services or construction to a pre-identified supplier, thereby allowing other suppliers to signal their interest in bidding, by submitting a statement of capabilities. If no supplier submits a statement of capabilities that meets the requirements set out in the ACAN, on or before the closing date stated in the ACAN, the contracting officer may then proceed with the award to the pre-identified supplier. Definition of the requirement

The Office of the Superintendent of Financial Institutions Canada (OSFI) has a requirement for the provision of  training opportunities in order to enhance its supervisory knowledge and processes in the area of Pre-Provision Net Revenue (PPNR) under stress for the Toronto office. The purpose of this Advance Contract Award Notice (ACAN) is to signal the government's intention to award a contract for these services to Moody’s Analytics. Before awarding a contract, however, the government would like to provide other suppliers with the opportunity to demonstrate that they are capable of satisfying the requirements set out in this Notice, by submitting a statement of capabilities during the 15 calendar day posting period. If other potential suppliers submit a statement of capabilities during the 15 calendar day posting period that meet the requirements set out in the ACAN, the government will proceed to a full tendering process on either the government's electronic tendering service or through traditional means, in order to award the contract. If no other supplier submits, on or before the closing date, a statement of capabilities meeting the requirements set out in the ACAN, a contract will be awarded to the pre-selected supplier. 3. Criteria for assessment of the Statement of Capabilities (Minimum Essential Requirements) OSFI requires the services of qualified training resource(s) to assist with the preparation and delivery of a course in the area of Pre-Provision Net Revenue (PPNR) under stress. Any interested supplier must demonstrate by way of a statement of capabilities that it meets the following requirements.

The company must provide a Subject Matter expert (SME) in the area of PPNR stress testing with at least 36 months experience within the last six (6) years. The training must include, but not limited to:

a) Detailed Decomposition of PPNR elements and the key drivers underlying individual components of PPNR (e.g., what drives interest expense, market sensitive fees, variable operating expenses, etc).

Net Interest Income (Gross Interest Revenue – Interest Expense) Non-Interest Income (Banking Fees, Market Sensitive Fees, Insurance, Trading Income) Non-Operating Expenses (Variable, Fixed, Discretionary versus Non-discretionary) Relationship to balance sheet (on-off) evolution Impacts related to securities held-to-maturity and available for sale on PPNR and Accumulated Other Comprehensive Income (AOCI)

b) Walk through of the above concepts for three business segments

Residential Secured Lending (Business as usual (BAU) vs. Stress) Wealth Management (BAU vs. Stress) Commercial Lending (BAU vs. Stress)

c) Modelling Approaches and Challenges

Macro/Micro economic factors Volume forecasting Loan composition Margin forecasting (client pricing and cost of funds vs. Fund Transfer Pricing (FTP) spread) Customer behavioural changes Sensitivity Analysis of key drivers

d) Overview of how business strategy and macro conditions impact the evolution of PPNR

Loan composition (fixed, variable) and embedded optionality Deposit composition (retail, wholesale, interest vs. non-interest sensitive, duration) Key macro/micro economic factors to consider in evaluating business strategy and stress performance

4. Applicability of the trade agreement(s) to the procurement This procurement is subject to the following trade agreement(s)

Canadian Free Trade Agreement (CFTA) OR Agreement on Internal Trade (AIT) World Trade Organization - Agreement on Government Procurement (WTO-AGP) North American Free Trade Agreement (NAFTA) Canada-European Union Comprehensive Economic and Trade Agreement (CETA)

5. Justification for the Pre-Selected Supplier  After a traditional competitive process and an open bidding process were held, Moody’s Analytics was the sole bidder. 6. Government Contracts Regulations Exception(s) The following exception to the Government Contracts Regulations is invoked for this procurement under subsection 6(d) - "only one person is capable of performing the work". 7. Ownership of Intellectual Property Ownership of any Foreground Intellectual Property arising out of the proposed contract will vest in the Contractor. 8. Period of the proposed contract or delivery date The proposed contract is for a period of one (1) year, from December 3, 2018, to October 17, 2019, with two (2) options to extend the contract for up to a period of one (1) year each. 9. Cost estimate of the proposed contract The estimated value of the contract, including the two (2) option periods, is $177,167.25 USD (HST extra). 10. Name and address of the pre-identified supplier Moody’s Analytics Inc., P.O.Box 116714, 30368-0597, Atlanta USA 11. Suppliers' right to submit a statement of capabilities Suppliers who consider themselves fully qualified and available to meet the specified requirements may submit a statement of capabilities in writing to the Contracting Authority identified in this Notice on or before the closing date of this Notice. The statement of capabilities must clearly demonstrate how the supplier meets the advertised requirements. 12. Closing date for a submission of a statement of capabilities The closing date and time for accepting statements of capabilities is: November 27, 2018, at 2:00 pm EST. 13. Inquiries and submission of statements of capabilities Inquiries and statements of capabilities are to be directed to: Craig Kenny Contracting Officer Tel - no de tél: (613) 998-9893 e-mail-courriel: contracting@osfi-bsif.gc.ca 255 Albert St. 12th floor Ottawa, Ontario K1A 0H2