Standard Cost Model: Trial Measurement of the Schedules to the Securities Regulations 1983 - Request for Proposals

Context

1. Business views on the impact of regulation are a crucial source for identifying areas of regulation and features for design and implementation that may be having an unnecessarily adverse impact on innovation and economic growth. To effectively assess and address these concerns, it is important to have robust mechanisms for identifying the aspects of regulations that lead to adverse impacts. To date, there have been methodological problems with measuring the impact of regulation on business and this includes a need for a stronger benchmark for longitudinal work.

2. The Standard Cost Model (SCM) is a method for identifying and measuring the cost of administrative burdens placed on businesses by regulation. It was developed by the Netherlands and has been adopted for use by several European countries.

3. The development of the SCM in Europe has provided an opportunity for New Zealand to evaluate a more robust mechanism for identifying and measuring the administrative costs of regulation on business, and to better target administrative cost reduction measures.

4. The Ministry of Economic Development (MED) is seeking proposals to undertake a trial measurement of the Schedules to the Securities Regulations 1983, using the SCM. The Trial measurement is proposed as part of a broader feasibility study of whether and how the SCM could be used for measuring compliance costs in New Zealand.

5. The trial measurement of the Schedules to the Securities Regulations 1983 will also provide important information for the review of securities offerings, which forms part of MED's current review of the regulation of non-bank financial products and providers. Amongst other things, the review of securities offerings will consider the effectiveness of the two-document disclosure system and the current prescriptive disclosure requirements.

Required Outputs

6. This RFP calls for proposals to:

• Conduct a full trial measurement of the Schedules to the Securities Regulations 1983, using the Dutch Standard Cost Model.¹ Key aspects of the measurement will be mapping the Schedules to the Regulations to identify information obligations and identifying and quantifying the costs to business of supplying information by determining:
  • The costs and time associated with supplying the information; and
  • The number of businesses that need to supply information and the number of times per year that information needs to be supplied.
• Provide an evaluation of the trial measurement in terms of:
  • An estimation of the relative importance of "administrative burdens" in terms of the total regulatory costs imposed by the Schedules to the Securities Regulations;
  • Identifying any aspects of the model that may not be compatible with New Zealand's regulatory approach; and
  • Identifying any other potential issues with the application of the SCM in the New Zealand context.
• A full and accurate description of the process and outcomes of the measurement and the evaluation should be contained in a final written project report.
• The successful respondent will be expected to consult regularly with MED in the course of the Project.

Matters to Be Addressed in the Proposal

7. Proposals should include details on:

• The proposed methodology for completing the Project; including a summary of how information will be sourced and how stakeholders will be engaged;
• The type of information that the Ministry will be expected to provide;
• The key personnel in your team and a short curriculum vitae of each member outlining their relevant experience and their respective contribution to the project;
• A short description of your organisation, its strengths and capabilities and identification of previous work undertaken similar to that being requested in this RFP;
• A proposed timeline;
• All fees and other costs that will be payable, including fees payable by any sub-contractors or other advisors that will be used in undertaking this work; and
• Any real or perceived conflicts of interest and how these are to be resolved.

8. Proposals must be brief and factual (i.e. no more than five pages, excluding information on key personnel and your organisation).

Expertise Required

9. The successful respondent will have a strong background and experience in qualitative and quantitative research, including survey work. A good understanding of the New Zealand domestic regulatory context, and more specifically the Securities Regulations, would also be an advantage.

Timeframe

10. The successful respondent is expected to commence work on the report as soon as possible after appointment. A draft report is to be submitted to MED no later than 16 December 2005. The final report is to be submitted to MED no later than 5:00pm, 28 February 2006.

Price

11. All prices in the proposal must be in New Zealand dollars and exclusive of goods and services tax. MED's preference is for a fixed price contract to provide the required outputs.

12. MED has a preference for expenses (including fees for any sub-contractors and advisors) to be subject to be included in the fixed price, or where this is not feasible, to be subject to an overall cap.

Submissions of Proposals

13. Proposals should be supplied to MED in electronic form no later than 5:00pm on 12 October 2005, emailed to scm@med.govt.nz. A copy in written form should be sent to:

Bronwyn Turley
Regulatory and Competition Policy Branch
Ministry of Economic Development
PO Box 1473
Wellington

14. Any enquiries can be directed to Bronwyn Turley, phone: 04-470 2331, fax: 04-499 8508, or to Robyn Henderson, phone: 04-474 2948, fax 04-499 8508.

Evaluation of Proposals

15. The Ministry expects to appoint the successful respondent by 28 October 2005. Proposal evaluation is MED's assessment of the proposal and the respondent's ability to perform the prospective contract successfully. While price is an important consideration to MED, other criteria may influence MED's decision to accept or reject a proposal. MED may use any criteria, and place any weight on criteria, it wishes in its evaluation of any proposal.

16. MED is not obliged to accept the lowest or any proposal, to acquire any of the services included in a proposal, or to discuss the reason why any proposal was accepted or rejected and reserves the right to accept none or any of the proposals.

17. MED reserves the unrestricted right to, at any time:

• Change any date, time, timeframe or any other aspect of this RFP process;
• Suspend or cancel this RFP;
• Accept, reject or not consider any non-conforming proposal, including without limit, any late proposal;
• Consider any alternative proposal;
• Interview any personnel of any respondent or other person as part of the evaluation process; and
• Do any other act or thing that it sees fit in relation to this RFP.

Conditions

18. No legal or other obligation will arise between any respondent and MED in relation to the conduct or outcome of this RFP process. Legal or other obligations between MED and the successful respondent will not arise unless or until MED and the successful respondent have entered into a signed agreement under MED's standard terms and conditions for consultants.

19. MED will not be liable for any direct or indirect damage, loss or cost (including legal costs) to any respondent or other person in relation to the RFP process and, in particular, in relation to the preparation of a proposal.

20. The successful respondent will work with and be accountable to the Ministry.

21. The Project outputs, report and any background papers produced or collated by the successful tenderer in the course of this project will be the property of MED.

22. The successful respondent must agree to treat any information provided by MED in strict confidence unless prior written permission has been obtained in respect of the disclosure of that information.

23. Each respondent authorises MED to collect any information from the tenderer and relevant third parties and to use that information in respect of the respondent. Where that information is known to the respondent, it may request the Ministry to update or correct that information.

24. The content of any proposal provided to the Ministry may be subject to release under the Official Information Act 1982. The proposal should clearly indicate those parts of the proposal which the respondent regards as commercially sensitive and confidential. It is not acceptable that the entire proposal be marked as such. MED will take into account such indications when responding to requests under the Official Information Act 1982.

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