Risk Model Validation services

Object This call for tenders is to select a Bidder to provide risk model validation Services, professional advices and support in model development and model validation practices.

BDC operates in a complex environment where risk models (“models”) are strategic assets. BDC needs to ensure that sound practices are applied to its model development. Therefore, BDC has established a model validation program to identify, assess, manage, and control model risk. The implementation of the model risk program is proportional to BDC’s nature, size, complexity, and risk profile. Although BDC is not an OSFI (Office of the Superintendent of Financial Institutions) regulated financial institution, it strives to align with industry standards as well as to follow model development and model risk management best practices. Thus, Bidders should be aware of the Regulatory Guidelines (e.g. E-23) and industry best practices.

Mandatory requirements M.001 The Bidder must ensure that all production data including clustered, mirrored, and duplicated data for redundancy is hosted within Canada or Europe.  Hosting in European jurisdictions may be considered, provided the Bidder demonstrates that the data protection measures in place are equivalent to those upheld by the Five Eyes Alliance (Canada, United States, United Kingdom, Australia, and New Zealand). If the Bidder cannot meet the Canadian or European residency requirement, they must provide a detailed explanation of the data’s geographic location and the safeguards implemented to ensure compliance with Five Eyes-level standards. BDC reserves the right to assess the adequacy of these measures and may accept or reject the proposal based on this evaluation. M.002 The Bidder confirms that they are a legal entity, natural person, or company, and that they have obtained the tender documents exclusively through the MERX platform. The Bidder further understands and confirms that only one (1) proposal has been submitted on their behalf in response to this tender. M.003 The Bidder must confirm that the services proposed and which would potentially be performed if the contract were awarded to them would be provided by individuals residing in Canada or Europe for at least 70% of the total bid price. M.004 The Bidder confirms that it has a data privacy and IT security policies, procedures and standards. M.005 As per the Act Fighting Against Forced Labour and Child Labour in the Supply Chains Act (S.C. 2023, c. 9) ("Act"), the Bidder represents and warrants that neither it, its parent entities, nor any of its subsidiaries or affiliates is engaged in any form of Child Labour and/or Forced Labour (such terms are defined in the Act) when providing (i) products manufactured or imported by it and (ii) services. For greater clarity, any products or services provided by the Bidder must not be extracted, manufactured, produced or rendered wholly or in part by forced or child labour. M.006 The Bidder must confirm that it has experience in validating each of the following models: ?Economic Capital Models ?Macro Models ?Capital Adequacy Stress Testing ?IFRS9 ?Pricing Models (refer to loan pricing models which quantify the variance that must be applied to the base rate of a loan.) ?ALM Models ?Venture Capital Models   ?Artificial Intelligence / Machine Learning M.007 The Bidder confirms that it possesses a minimum of five (5) years of experience in delivering risk model validation services to financial institutions regulated by the Office of the Superintendent of Financial Institutions (OSFI) or to Crown corporations. M.008 The Bidder confirms that it has a place of business in Canada or Europe. The expression "place of business" means the bidder must have an establishment where it carries out its activities during regular business hours and which includes persons authorized to represent it, as well as resources for carrying out its activities. M.009 The Bidder must demonstrate the ability to provide services in both English and French, including reports.

Contents of the Tender The Bidder must submit an electronic version of the Tender in Excel format of Appendix B - Response and Pricing Grid.Bidding and Documents are available on http://www.merx.com. Fees may apply; See https://www.merx.com/public/pricing for more information.