Retail Business Plan Terms of Reference - National Housing ...

CONTRACT: ZA/16/03/ 2011Request for ProposalTreasury Management SystemFEBRUARY 2011

Table of Contents1. BACKGROUND .......................................................................................... 41.1 INTRODUCTION ............................................................................. 41.2 PURPOSE OF RFP ......................................................................... 41.3 CURRENT SCENARIO ................................................................... 42. REQUIREMENTS ...................................................................................... 52.1 PROPOSED SYSTEM .................................................................... 52.1.1 TREASURY MANAGEMENT SYSTEM ................................ 52.1.2 CASH MANAGEMENT .......................................................... 72.2 IT PLATFORM ................................................................................. 82.3 INSTALLATION AND IMPLEMENTATION OF THE TMS ............... 82.4 CREATION OF INTERFACE FACILITIES ....................................... 82.5 SUPPORT AND MAINTENANCE.................................................... 82.6 TRAINING ....................................................................................... 93. SELECTION CRITERIA ............................................................................. 93.1 MINIMUM ELIGIBILITY CRITERIA .................................................. 93.2 KEY ASSUMPTIONS ...................................................................... 94. APPOINTMENT, COMMENCEMENT AND DURATION OF SSIGNMENT104.1 TIMING .......................................................................................... 104.2 PROPOSAL COST ........................................................................ 105. TECHNICAL PROPOSAL ........................................................................ 105.1 INTRODUCTION ........................................................................... 105.2 COMPANY PROFILE .................................................................... 105.3 PRODUCT ..................................................................................... 105.4 UNDERSTANDING OF REQUIREMENTS ................................... 115.5 EXECUTION PLAN ....................................................................... 116. COMMERCIAL OBLIGATIONS ................................................................ 116.1 MATERIAL RIGHTS ...................................................................... 11Page 2 of 15

7. PROPOSAL REQUIREMENTS ................................................................ 127.1 FORMAT ....................................................................................... 127.2 COPIES ......................................................................................... 127.3 SUBMISSION ADDRESS .............................................................. 127.4 SUBMISSION DATE ..................................................................... 127.5 FINANCIAL PROPOSAL ............................................................... 128. THE NHFC’S RESPONSIBLITIES ........................................................... 139. EVALUATION CRITERIA ......................................................................... 1310. RULES OF BIDDING ............................................................................... 1411. DOCUMENTS TO BE SUBMITTED ......................................................... 1512. CONTACT PERSON ................................................................................ 15

1. BACKGROUND1.1 INTRODUCTIONThe NHFC was established in 1996, by the National Department ofHuman Settlements as a Development Finance Institution (DFI),with the principal mandate of broadening access to affordablehousing finance for the low and moderate income South Africanhouseholds.The NHFC’s strategic objectives are as follows:Expand housing finance activities, through the effectiveprovision of housing finance solutions, thus enabling low tomiddle income households to have choice of renting or owningor incrementally building, to meet their housing needs.Facilitate the increased and sustained lending by financialinstitutions to the lower end of the housing market.Mobilise finance into the human settlement space, on asustainable basis, in partnership with the broadest range ofinstitutions.Conduct the business activities of the NHFC in a manner thatensures the continued economic sustainability of theCorporation whilst promoting lasting social development.Stimulate the low to middle income housing sector, by providingrobust, relevant and timely research and market analysis topractitioners and housing consumers.1.2 PURPOSE OF RFPThe Corporation wishes to implement a Treasury System and isseeking to appoint a service provider based on the terms andconditions elsewhere provided in this documentation.1.3 CURRENT SCENARIOThe NHFC Treasury department is mainly responsible for themanagement of financial risks emanating from the businessoperations and treasury activities whilst ensuring regulatorycompliance and remaining within the approved Treasury policy

and Enterprise Risk Management Framework. The Treasuryactivities include liquidity and cash management, investments,funding and assets and liability management.The Treasury department consist of a Front, Middle and Backoffice.Figure. 1: Treasury Structure2. REQUIREMENTS2.1 PROPOSED SYSTEMThe scope of the project should deliver a complete integratedsolution for Front, Middle and Back office to provide optimaloperation efficiency through seamless integration of treasuryfunctions. Although all three Treasury components providegeneral Treasury functions, the Middle office also provide anAsset and Liability function.2.1.1 TREASURY MANAGEMENT SYSTEMFunctionalityIntegrated straight through process incorporating theFront, Middle and Back office.Recognise hierarchical structure for portfolio.management and consolidation.Interface and integration of required inputs.Page 5 of 15

Application of various limits and instruments in terms ofTreasury Policy (monitoring, alerts, breaches).Standard instrument coverage.Standard settlement instructions.Scenario planning and monitoring of trade positions.Risk Management : managing interest rate risk, liquidityrisk and capital adequacy risk.Gap Analysis, which should include modified gapanalysis, duration gap analysis, value at risk andsimulation.Interest rate sensitivity Matrix, valuating and analysis ofmismatches in the interest rate sensitive asset andliabilities.Back office functionalityo Inter account transfer instructiono Deal confirmationo Settlement instructiono Creation of payment file to banko Messaging capability, multimedia e.g. faxingGeneration of accounting entries.IFRS compliant.Interface with Reuters.Interface with Electronic Banking Platforms.Interface with Accounting System.Management InformationRecognise hierarchical structure for consolidationDealer position reportsProfit and loss reportsRisk management reportsAnalysis reportingFlexibility of pre-packaged reportsReport writer functionality to facilitate customised reportsAbility for user to define reporting aggregationDrill down to the detail supporting any displayed resultsCapability to be export reports to excel, pdf and otheraccounting systems.System operations Scheduling according to trigger such as time and event Event logging Print queue management Archiving and backup of informationPage 6 of 15

GeneralMulti user applicationSimultaneous access for more than one userUser friendlyAccess controlsSegregation of dutiesProvide workflow functionality to facilitate delegatedlevels of approval.Audit trail linking the transaction to the initiatorValidation rulesDatabase administration2.1.2 CASH MANAGEMENTInputsBudget and estimatesSources of cash flow information from divisionsSources of cash flow information from treasury activitiesSources of cash flow information from asset and liabilitymanagementInformation from financial systemInformation from Banking platformSource for market information, eg exchange and interestratesOutputs Recognise hierarchical structure for consolidation Net cash position reports at various intervals Cash flow forecasting reports at various intervals Variance analysis reports at various intervals Cash balances reports Reconciliation of balances per the financial system vsCash balances report. Reports to measure performance indicators eg ForecastVs Actual Flexibility to create customer reports based onrequirements Provide customisable report templates that users maysave for individual or team use. Capability to be export reports to excel, pdf and otheraccounting systems. Risk management reports Analysis reportsPage 7 of 15

2.2 IT PLATFORMSince the NHFC IT platform operates on Microsoft technology, it isexpected that any solution provided should be configurable on sucha platform.2.3 INSTALLATION AND IMPLEMENTATION OF THE TMSThe solution proposed must ensure integrated functionality andwork flow control between the front, middle and back officefunctions. Scope will include the set-up, configuration, migration ofexisting systems data as well as training of all staffThe NHFC Treasury operation must provide for a minimum of 5user work environment.The successful bidder is expected to provide the necessarycustomisation to the product to meet the requirements as detailedin the abovementioned requirements definition. These changes willbe based on an approved Gap Analysis conducted on acceptanceof the bidder’s proposal.2.4 CREATION OF INTERFACE FACILITIESThe system should support integration or automated upload ofdata to and from the following systems:Standard Bank Business Online / CATSDebtors sub system(s)ReutersAccpac Financials2.5 SUPPORT AND MAINTENANCEThe successful bidder will be expected to provide ongoing supportfor the system implemented and is expected to sign a Service LevelAgreement (SLA) with the NHFC to this effect.Page 8 of 15

2.6 TRAININGTraining and the provision the adequate training manuals for allusers, including NHFC internal technical support team, is amandatory requirement as part of the scope of delivery. Should theproduct require ongoing training, this must be highlighted in theproposal.3. SELECTION CRITERIA3.1 MINIMUM ELIGIBILITY CRITERIAThe bidder must satisfy the following minimum criteriaa. The company must have been in operation for a minimum of 5years, providing similar services to the industry and profitableat least in the last two years. The company must have apresence in South Africa with support staff available locally.b. The company should have developed /architected and / orsuccessfully implemented the proposed TreasuryManagement System which is currently in operation withinSouth Africa.3.2 KEY ASSUMPTIONSAdequate experience by the service provider to deliver on theabove- mentioned project.Capacity to execute the assignment.Have carried out several similar exercises elsewhere.Service Provider will recommend any additional approaches ormethodologies based on experience.NB: Proposals should be able to not only provide what is mentionedabove but also indicate areas of importance pertinent to the process.Page 9 of 15

4. APPOINTMENT, COMMENCEMENT AND DURATION OF SSIGNMENT4.1 TIMINGThe service provider will be expected to commence in April 2011and the assignment must be completed on agreed timelines.NHFC understand that certain components of the work aredependent on NHFC providing the input information and theavailability of the relevant personnel.4.2 PROPOSAL COSTRespondents shall bear all costs incurred in the process ofresponding to the RFP and in any subsequent negotiation.5. TECHNICAL PROPOSALThe Technical Proposal must include the following:5.1 INTRODUCTIONOutline of the proposal and summary of key aspects of theproposal.5.2 COMPANY PROFILEAppropriate information about the company / consortium;Full and comprehensive description of similar work undertakenin the past 3 years;List of current clients and references;Composition of team; andAbridged CV of each member of the team (qualifications,experience, expertise etc).5.3 PRODUCTProduct history when first developed;Notable recent developments in past 24 months;Page 10 of 15

Policy and process for functional system enhancements;Future development plans for the product;What differentiates product; andDevelopment technology platform.5.4 UNDERSTANDING OF REQUIREMENTSExplanation of the service provider’s understanding andinterpretation of this RFP.5.5 EXECUTION PLANProposed methodology and approach to be used in keeping withthe scope of the work to achieve the purpose and objectives.6. COMMERCIAL OBLIGATIONSOnce you have reviewed this “Request for Proposal”, please express yourinterest to submit your proposal to the NHFC within seven days of receiptof the RFP.Given the shortness of time, the final proposal should be delivered to theNHFC offices, by 16 th March 2011, deposited into the TENDER BOX atthe Reception. This proposal should summarise the work plan, the levelof effort, estimated costs including fees, expenses and taxes, and includea copy of a proposed contract between NHFC and your firm.6.1 MATERIAL RIGHTSThe product of the services will be confidential information whichwill be the property of the NHFC and no disclosure of information toother parties may be made without prior written approval of theNHFC.Page 11 of 15

7. PROPOSAL REQUIREMENTS7.1 FORMATProposals must be submitted in the MS Word Format, Arial 11 andExcel.7.2 COPIESThree hard copies and an electronic copy must be submitted in asealed envelope, duly addressed.7.3 SUBMISSION ADDRESSThe proposal should be endorsed with the words “RFP TreasuryManagement System” and hand delivered to NHFC Tender Box,1 st Floor, Isle of Houghton, Old Trafford 3, 11 Boundary Road,Houghton, Johannesburg.7.4 SUBMISSION DATEProposals must reach the NHFC by 11h00, Wednesday 16 March2011.7.5 FINANCIAL PROPOSALThe Financial Proposal must follow the following framework:a) Total Price for the Project, inclusive of VAT.b) Project Cost Calculation (itemised), derived from the workcontent.c) Breakdown for various modules, system solution(s).d) Proposal to cover both purchase and lease options ifapplicable.Page 12 of 15

8. THE NHFC’S RESPONSIBLITIESProviding the suppliers executives with all necessary information onbusiness operations and management requirements. All suchinformation shall be treated strictly with confidence by the supplierReview the documents that are delivered by the supplier and respondwithin the agreed time with the review comments,The NHFC will make available the concerned staff for discussions andfeedback etc.9. EVALUATION CRITERIA Tender proposals will be evaluated in accordance with the 80/20preference point system, as contemplated in the PreferentialProcurement Policy Framework Act (Act 5 of 2000). The points out of 80 will be calculated on the basis of functionality andprice as shown below.1) Experience and Skills mix of the service provider’s team in terms ofthe stated requirements of the project.2) Track record/potential of the tendering company/firm to serve as astable contractual partner.3) Understanding the assignment, proposed methodology andapproach, level of clarity in proposal, feasibility and alignment ofproposed methodology with the required outputs and NHFC'stimeframes per work stream.1515254) Price as per proposal submission 255) BEE Equity OwnershipManagement ControlEmployment Equity ProgrammeSkills DevelopmentPreferential Procurement20Page 13 of 15

Enterprise DevelopmentSocio-Economic DevelopmentBBBEE Criteria-level four (4) of the DTI generic score card shall bea minimum hurdleTOTAL 100The point out of 20 will be allocated as contemplated in Annexure SC2in the Preferential Procurement Policy Framework Act, 2000.Kindly take note that if a bidder scores below the minimum of 50% interms of the BEE requirement / status, they may be disqualified.Bidders must provide proof of the shareholding of the company, if notsupplied the bid will be invalidated.10. RULES OF BIDDING NHFC reserves the right to amend or cancel this RFP at any time, at itssole discretion; Tax Clearance certificates dated within six months of the closing dateof this bid must be submitted by those tendering for the business; The NHFC is not bound to accept any of the proposal submitted, andreserves the right to call for best and final offers from the short-listedbidders before final selection; The NHFC reserves the right to call for interviews with short-listedbidder before final selection; The NHFC reserves the right to negotiate price with the preferredbidder; An eligible Bidder, if requested, must be prepared to present evidenceof experience, ability, service facilities, and financial standingnecessary to satisfactorily meet the requirements set forth or impliedin this proposal;Page 14 of 15

NHFC reserves the right to award a contract in part, to reject any andall quotations in whole or in part, to waive technical defects,irregularities and omissions, at its sole discretion; and Late submissions will not be considered.11. DOCUMENTS TO BE SUBMITTEDCompany profile and proposalOriginal Tax Clearance CertificateCopies of any Shareholders agreementID copies of Shareholder/DirectorsA copy of the current memorandum and articles of association of thecompany or constitutional documents of the companyBEE CredentialsVat registration evidenceDeclaration of interestDeclaration statement12. CONTACT PERSONThe contact person for information pertaining to the proposal is Mr EzekielRadinne, telephone numbers 011-644 9800 fax number 011 – 484 0204,e-mail ezekielr@nhfc.co.za and Ms Desiree Sithole telephone numbers011-644 9800 fax number 011 – 484 0204, e-mail desirees@nhfc.co.za.Page 15 of 15