Tender Briefing ________ Appointment of a Professional Service Provider (PSP) to provide the Water Trading Entity (WTE) with Revenue Management Services to assist in.
Download ReportTranscript Tender Briefing ________ Appointment of a Professional Service Provider (PSP) to provide the Water Trading Entity (WTE) with Revenue Management Services to assist in.
Slide 1
Tender Briefing
________
Appointment of a Professional Service Provider (PSP) to provide the
Water Trading Entity (WTE) with Revenue Management Services to
assist in dealing with billing, cost recovery and debt management for
a period of two (2) years.
TENDER NO. WP 0625WTE
DEPARTMENT OF WATER AFFAIRS
23 October 2012
Mr. Mpho Mofokeng
Deputy Chief Financial Officer
1
Slide 2
PRESENTATION OVERVIEW
1.
2.
Background.
Challenges.
–
–
3.
4.
5.
6.
Debt Management
Billing Management
Scope of work.
Requirement of the Department
Minimum Month Expectation
Evaluation Process
2
Slide 3
Background
• The Department of Water Affairs is the custodian of South Africa’s
water resources.
• The Department is primarily responsible for the formulation and
implementation of water policy as well as for overseeing water
service provided by local government.
• The ambit of the Department s scope is governed , inter alia, by the
National Water Act of 1998 (“National Water Act”) which
empowers the Department to recover its costs of fulfilling the
obligations placed on the Ministry of Water Affairs from Water
user through water use charges.
3
Slide 4
Debt Management Challenges
•
Department currently has 34109 customer with 68 846customer accounts
and a revenue intake of approximately R5.5 billion per annum.
•
The sheer number of customers creates a massive administrative burden
of the Department in its pursuit to recover all monies which are due and
payable to it.
•
The increase in the administrative burden placed on the Department was
a direct consequence of the introduction of the National Water Act which
imposed a new charge for Water Resource Act, which required the
implementation of the Water Resource Management Charge (WRMC),
the number of customer accounts have increased dramatically from 6,500
to 68,000 user accounts.
4
Slide 5
Debt Management Challenges Cont.
• This increase in water users:
– Resulted in Revenue Management administrative burden
– also created unforeseen capacity and business process integration
challenges for the Department as well as an extra burden on the
reconciliation of customer accounts.
• As a result, the Department has not been in a position to collect all amounts
which are owed to it
• which has in turn had an adverse impact on the Department’s bottom line.
5
Slide 6
Billing Management Challenges Cont.
•
The Department currently has the following challenges in terms of the
system and data integrity which has resulted in incomplete and inaccurate
billing:
– Incorrect billing of some customers
– Complete billing of all customers due for billing
– The mapping of members of Water User Associations and Irrigation
Boards to ensure that the Water User Associations are invoice and
not their members
– Water Users are sometimes invoiced on incorrect tariffs or volumes
6
Slide 7
Billing Management Challenges Cont.
– Water Users are not invoiced correctly and billed in the
appropriate billing period.
– The majority of the water users do not inform the Department
if there is a change in ownership of their properties.
– The water users fail to notify the Department if there are
changes to the contact details which result in invoices and
statements not reaching them.
7
Slide 8
Other Revenue Challenges
• The Department is also facing a massive challenge of unregistered
or illegal water users.
• The Department is aware of water users abstracting water from the
Department’s resources illegally for years, which is not only illegal,
but also robs the Department of large amounts of revenue which
should be entering its coffers.
• One of the key objectives of the Department is to immediately
stop the value leakage posed by the theft of water resources and
accordingly this task has been identified by the Department as a
priority item.
• IT System interface challenges
• Insufficient metering of customers
8
Slide 9
Scope of Work
• The Department’s ability to effectively and efficiently carry out its
legislative mandate can be severely hindered by any inability to:
– Improving revenue billing of all customers
– Collect the appropriate levels of revenue owed to it;
– Collect long outstanding debt owed to it;
– Manage the process of debt collect and debt management;
– Secure future revenue which it ought to be collecting;
– Optimize its revenue collection;
– Transfer of skills to all officials that will take over the functions
• Head Office
• Regions
• Cl.usters
9
Slide 10
Management Fees
• The administrative fees to be charged and paid to the service provider shall be
in line with the Regulations to the Debt Collectors Act.
•
The service provider will charge the following administrative fees to the debtor:
– Necessary ordinary letter, registered letter, facsimile or e mail;
– Necessary phone calls;
– Other necessary expenses up to a maximum amount as prescribed by the Regulations to the
Debt Collectors Act 114 of 1998;
– Acknowledgement of debt and undertaking to pay the debt either in installments or to settle
the debt;
– Correspondence received and attended to; and
10
Slide 11
Management Fees Continues
– On request of the debtor, the drawing up and furnishing of a settlement account, other
than the six month settlement account
– All administrative fees paid by the debtors in the Departments bank account will be paid
back to the service provider upon submission of a schedule showing the details of the
actions taken.
– Commission will be paid over monthly to the Agent within 30 days of receipt of invoice
and schedule showing the details of action taken.
• N.B The service provider will render its services on a “no collection – no
charge” basis for debt collection. However for billing a detail price costing
should be submitted with the Bid.
11
Slide 12
The following is the breakdown of the debtor’s book as
31 March 2012
AGE ANALYSIS BREAKDOWN
VALUE OF DEBT AS AT 31 MARCH2012
Up to 60 Days
873,240,065.00
61 to 180 Days
532,753,814.00
181 60 360 Days
146,505,582.00
360 Days +
3,627,439,340.00
TOTAL
5,179,938,801.00
12
Slide 13
FIXED COMMISSION FOR DEBT COLLECTED
FROM PUBLIC/GOVERNMENTS INSTITUTIONS
ON OLD DEBT
DEBT DAYS OUTSTANDING
PERCENTAGE
0-60 days
0%
61-180 days
3%
181-360 days
4%
361 and over days
5%
13
Slide 14
FIXED COMMISION FOR DEBT COLLECTED
FROM PRIVATE COMPANIES & INDIVIDUALS
ON OLD DEBT
DEBT DAYS OUTSTANDING
PERCENTAGE
0-60 days
0%
61-180 days
5%
181-360 days
6%
361 and over days
7%
14
Slide 15
Evaluation Process
• The evaluation process is divided into three phases.
– Phase 1: Administrative Compliance
– Phase 2: Technical\ Functional Compliance
– Phase 3: Calculation of Price and Preference
15
Slide 16
Phase 1: Administrative Compliance
• Prospective service providers must submit the following with
their proposals and failure to submit them will render their
bids invalid:
– The service provider (and in the case of a consortium or joint venture –
at least one member of such consortium or joint venture) should be
registered with the Council for Debt Collectors;
– The service provider (and in the case of a consortium or joint venture –
at least one member of such consortium or joint venture) should have a
minimum of 3 years experience dealing with large volumes of debtors.
– Proof of reference for successful debt collection.
– Duly completed and signed standard bidding documents (SBD 1 to
SBD 9);
16
Slide 17
Phase 1: Administrative Compliance (Continues)
• Original and valid Tax clearance Certificate;
• Registration certificates with the relevant council or bodies i.e CIPC,UIF,
COIDA
• Submission of references certificate on recent debt management services
• Submission of company profile
• Submission of the lasted audited financial statements
• Abridged CV’s and profiles of the project team members to be deployed
to the Department
–
N.B if the same and CV are used by different service providers the relevant companies
will be disqualified
17
Slide 18
PHASE 1: Administrative Compliance (Continues)
• Proof/Evidence that the bidder’s company has national representation
(not necessary offices)
• Proof that the members /staff to be deployed to DWA have SAP
knowledge and
– SAP certification will add as an advantage in the functionality stage
• Submission of the detail costing of the billing project
18
Slide 19
Phase 2: Functional Compliance
CRITERIA
Track record and relevant
experience:
Both Billing & Debt
Management
Methodology :
Both Billing & Debt
Management
Team Capability:
Knowledge, Skills &
Experience in Debt and Billing
Management functions
Knowledge of complex
Information Technology
system interface
WEIGHT
VALUE
TOTAL
15
20
30
Other Capacity to provide
tracing and debt collection
services
10
Other Capacity to perform
Billing Management
10
Involvement of HDI
participation
15
Total
100
19
Slide 20
Phase 2: Functional Compliance
Continues
•
Note to Bidders: The bidder is expected to achieve a minimum
threshold/required score for functionality of 70% in order to qualify for further
evaluation.
•
Further evaluation is based on price (90 points) and preference (10 points) after
the minimum score has been achieved by the bidder.
20
Slide 21
Phase 3: Price And Ownership
• Proposals that score 70 points or more will be evaluated on
price and ownership as follows:
– Price (90)
– BBBEE (10)
21
Slide 22
Question and Answer
22
Slide 23
Thank You
23
Tender Briefing
________
Appointment of a Professional Service Provider (PSP) to provide the
Water Trading Entity (WTE) with Revenue Management Services to
assist in dealing with billing, cost recovery and debt management for
a period of two (2) years.
TENDER NO. WP 0625WTE
DEPARTMENT OF WATER AFFAIRS
23 October 2012
Mr. Mpho Mofokeng
Deputy Chief Financial Officer
1
Slide 2
PRESENTATION OVERVIEW
1.
2.
Background.
Challenges.
–
–
3.
4.
5.
6.
Debt Management
Billing Management
Scope of work.
Requirement of the Department
Minimum Month Expectation
Evaluation Process
2
Slide 3
Background
• The Department of Water Affairs is the custodian of South Africa’s
water resources.
• The Department is primarily responsible for the formulation and
implementation of water policy as well as for overseeing water
service provided by local government.
• The ambit of the Department s scope is governed , inter alia, by the
National Water Act of 1998 (“National Water Act”) which
empowers the Department to recover its costs of fulfilling the
obligations placed on the Ministry of Water Affairs from Water
user through water use charges.
3
Slide 4
Debt Management Challenges
•
Department currently has 34109 customer with 68 846customer accounts
and a revenue intake of approximately R5.5 billion per annum.
•
The sheer number of customers creates a massive administrative burden
of the Department in its pursuit to recover all monies which are due and
payable to it.
•
The increase in the administrative burden placed on the Department was
a direct consequence of the introduction of the National Water Act which
imposed a new charge for Water Resource Act, which required the
implementation of the Water Resource Management Charge (WRMC),
the number of customer accounts have increased dramatically from 6,500
to 68,000 user accounts.
4
Slide 5
Debt Management Challenges Cont.
• This increase in water users:
– Resulted in Revenue Management administrative burden
– also created unforeseen capacity and business process integration
challenges for the Department as well as an extra burden on the
reconciliation of customer accounts.
• As a result, the Department has not been in a position to collect all amounts
which are owed to it
• which has in turn had an adverse impact on the Department’s bottom line.
5
Slide 6
Billing Management Challenges Cont.
•
The Department currently has the following challenges in terms of the
system and data integrity which has resulted in incomplete and inaccurate
billing:
– Incorrect billing of some customers
– Complete billing of all customers due for billing
– The mapping of members of Water User Associations and Irrigation
Boards to ensure that the Water User Associations are invoice and
not their members
– Water Users are sometimes invoiced on incorrect tariffs or volumes
6
Slide 7
Billing Management Challenges Cont.
– Water Users are not invoiced correctly and billed in the
appropriate billing period.
– The majority of the water users do not inform the Department
if there is a change in ownership of their properties.
– The water users fail to notify the Department if there are
changes to the contact details which result in invoices and
statements not reaching them.
7
Slide 8
Other Revenue Challenges
• The Department is also facing a massive challenge of unregistered
or illegal water users.
• The Department is aware of water users abstracting water from the
Department’s resources illegally for years, which is not only illegal,
but also robs the Department of large amounts of revenue which
should be entering its coffers.
• One of the key objectives of the Department is to immediately
stop the value leakage posed by the theft of water resources and
accordingly this task has been identified by the Department as a
priority item.
• IT System interface challenges
• Insufficient metering of customers
8
Slide 9
Scope of Work
• The Department’s ability to effectively and efficiently carry out its
legislative mandate can be severely hindered by any inability to:
– Improving revenue billing of all customers
– Collect the appropriate levels of revenue owed to it;
– Collect long outstanding debt owed to it;
– Manage the process of debt collect and debt management;
– Secure future revenue which it ought to be collecting;
– Optimize its revenue collection;
– Transfer of skills to all officials that will take over the functions
• Head Office
• Regions
• Cl.usters
9
Slide 10
Management Fees
• The administrative fees to be charged and paid to the service provider shall be
in line with the Regulations to the Debt Collectors Act.
•
The service provider will charge the following administrative fees to the debtor:
– Necessary ordinary letter, registered letter, facsimile or e mail;
– Necessary phone calls;
– Other necessary expenses up to a maximum amount as prescribed by the Regulations to the
Debt Collectors Act 114 of 1998;
– Acknowledgement of debt and undertaking to pay the debt either in installments or to settle
the debt;
– Correspondence received and attended to; and
10
Slide 11
Management Fees Continues
– On request of the debtor, the drawing up and furnishing of a settlement account, other
than the six month settlement account
– All administrative fees paid by the debtors in the Departments bank account will be paid
back to the service provider upon submission of a schedule showing the details of the
actions taken.
– Commission will be paid over monthly to the Agent within 30 days of receipt of invoice
and schedule showing the details of action taken.
• N.B The service provider will render its services on a “no collection – no
charge” basis for debt collection. However for billing a detail price costing
should be submitted with the Bid.
11
Slide 12
The following is the breakdown of the debtor’s book as
31 March 2012
AGE ANALYSIS BREAKDOWN
VALUE OF DEBT AS AT 31 MARCH2012
Up to 60 Days
873,240,065.00
61 to 180 Days
532,753,814.00
181 60 360 Days
146,505,582.00
360 Days +
3,627,439,340.00
TOTAL
5,179,938,801.00
12
Slide 13
FIXED COMMISSION FOR DEBT COLLECTED
FROM PUBLIC/GOVERNMENTS INSTITUTIONS
ON OLD DEBT
DEBT DAYS OUTSTANDING
PERCENTAGE
0-60 days
0%
61-180 days
3%
181-360 days
4%
361 and over days
5%
13
Slide 14
FIXED COMMISION FOR DEBT COLLECTED
FROM PRIVATE COMPANIES & INDIVIDUALS
ON OLD DEBT
DEBT DAYS OUTSTANDING
PERCENTAGE
0-60 days
0%
61-180 days
5%
181-360 days
6%
361 and over days
7%
14
Slide 15
Evaluation Process
• The evaluation process is divided into three phases.
– Phase 1: Administrative Compliance
– Phase 2: Technical\ Functional Compliance
– Phase 3: Calculation of Price and Preference
15
Slide 16
Phase 1: Administrative Compliance
• Prospective service providers must submit the following with
their proposals and failure to submit them will render their
bids invalid:
– The service provider (and in the case of a consortium or joint venture –
at least one member of such consortium or joint venture) should be
registered with the Council for Debt Collectors;
– The service provider (and in the case of a consortium or joint venture –
at least one member of such consortium or joint venture) should have a
minimum of 3 years experience dealing with large volumes of debtors.
– Proof of reference for successful debt collection.
– Duly completed and signed standard bidding documents (SBD 1 to
SBD 9);
16
Slide 17
Phase 1: Administrative Compliance (Continues)
• Original and valid Tax clearance Certificate;
• Registration certificates with the relevant council or bodies i.e CIPC,UIF,
COIDA
• Submission of references certificate on recent debt management services
• Submission of company profile
• Submission of the lasted audited financial statements
• Abridged CV’s and profiles of the project team members to be deployed
to the Department
–
N.B if the same and CV are used by different service providers the relevant companies
will be disqualified
17
Slide 18
PHASE 1: Administrative Compliance (Continues)
• Proof/Evidence that the bidder’s company has national representation
(not necessary offices)
• Proof that the members /staff to be deployed to DWA have SAP
knowledge and
– SAP certification will add as an advantage in the functionality stage
• Submission of the detail costing of the billing project
18
Slide 19
Phase 2: Functional Compliance
CRITERIA
Track record and relevant
experience:
Both Billing & Debt
Management
Methodology :
Both Billing & Debt
Management
Team Capability:
Knowledge, Skills &
Experience in Debt and Billing
Management functions
Knowledge of complex
Information Technology
system interface
WEIGHT
VALUE
TOTAL
15
20
30
Other Capacity to provide
tracing and debt collection
services
10
Other Capacity to perform
Billing Management
10
Involvement of HDI
participation
15
Total
100
19
Slide 20
Phase 2: Functional Compliance
Continues
•
Note to Bidders: The bidder is expected to achieve a minimum
threshold/required score for functionality of 70% in order to qualify for further
evaluation.
•
Further evaluation is based on price (90 points) and preference (10 points) after
the minimum score has been achieved by the bidder.
20
Slide 21
Phase 3: Price And Ownership
• Proposals that score 70 points or more will be evaluated on
price and ownership as follows:
– Price (90)
– BBBEE (10)
21
Slide 22
Question and Answer
22
Slide 23
Thank You
23