Price Review 2024 Professional services – Prior Information Notice

Procurement timeline

Ofwat intends to publish an invitation to tender in September 2022 for professional services relating to economics, engineering and management consultant expertise to help us deliver our Price Review 2024 (PR24). The intention is to have the contract in place for Spring 2023, a core team established by April 2023 and full ramp-up in Autumn 2023 prior to business plan submission on 2 October 2023.

What a Price Review is

Ofwat is the economic regulator of the water and wastewater sector in England and Wales. One of the ways we regulate is to set the price, investment, and service package that customers receive. Monopoly water companies, working with their customers, will develop business plans to cover the period of the next price control (2025-2029). Our role is to:

set the framework and methodology

check and challenge the company’s business plans, and

determine the five-year price, service and incentive package for each company

The problem that we intend to solve

During the final determination stage of the price review, from September 2023 to December 2024, our outputs as a regulator will increase significantly. As part of our resourcing solution, we want to procure flexible resourcing options from the private sector to help with the peaks of activity. They will also provide additional skills in regulatory and corporate finance and tax, engineering, economics, financial modelling and regulatory policy advice. By way of an example of the issue we face, over the course of the 18-month contract from our last price review (PR19) our peak resource requirement from consultancy and engineering firms peaked at 31 staff members in one month but in others it was as low as 5 FTE.

The options that we are considering for PR24

There are currently two options we are considering to meet this requirement.

A consortium of companies with one acting as Lead

Two or three separate contracts with companies to cover the main areas of expertise that we require: economics, engineering and management consultancy.

Next steps

We will hold a workshop via MS Teams on 20 July 2022 before proceeding with the procurement process. Please let us know if you are interested in attending the event by emailing pr24.pmo@ofwat.gov.uk. We welcome questions and comments in advance and there will be a full Q&A session during the workshop.