# Adviser for Ofwat's response to CMA document

> Contract award record from UK public-sector procurement sources.

## Key facts

- Public buyer: [Water Services Regulation Authority \(Ofwat\)](/buyers/water-services-regulation-authority-ofwat/contract-awards)
- Contract winner: Seth Armitage
- Award value: £20,000
- Tender value: £20,000
- Award date: 4 October 2020
- Published: 4 February 2021
- Contract start: 5 October 2020
- Contract end: 30 November 2020
- Stage: awarded
- Procurement category: services
- Notice ID: 9125ae21-9679-4a4d-831a-28753af83198-408408
- OCID: ocds-b5fd17-1a5bb337-d69e-4ee0-9527-1a6fa24baa00

## Description

The Supplier shall provide the following Services to the Customer: Review of issues related to the allowed return in the Competition and Markets Authority \(CMA's\) provisional findings report on Ofwat's 2019 Price Review in response to 4 water companies' appeal, including:  Risk free rate - Comment on CMA's use of AAA corporate bonds to inform RFR, with reference to assumptions required by CAPM to hold\.  Total market return - Comment on the CMA's range, point estimate and overall approach\.  Total market return - Comment on need for volatility bias adjustment and point estimate used by the CMA for 'ex-ante' approaches\.  Aiming up - comment on the CMA's approach to aiming up, applicability to the water sector  Gearing outperformance mechanism - comment on the CMA's critique of our mechanism\. The response should address concerns Order Form - Consultancy Services Commercial - Sensitive about the presence and level of gearing outperformance and lack of evidence that high gearing is harmful\. It should also reference the Modigliani Miller theorem and provide a view on whether it is consistent with our mechanism, given the particular characteristics of the water sector\. The Supplier shall provide the following Deliverables to the Customer as part of the Services:  A report of professional opinion and findings related to the Services described above, to form part of Ofwat's response to the CMA's provisional findings \(deadline 27 October 2020\) and published on Ofwat's website\. To meet this deadline, the Supplier is to produce a draft report by 9am 19 October 2020, with some preliminary work shared for discussion in advance; final report by 9am 26 October 2020\.  Final report to be published on Ofwat's website\.  Potential attendance by videolink at any hearings related to the above matters\.  Any follow-up work related to the above matters \(e\.g\. advice on response to any questions from the CMA\)\. Additional information: For further information, please contact procurement@ofwat\.gov\.uk

## Related contract awards

- [Ofwat Innovation Fund delivery partner 2025-30](/contracts/ocds-b5fd17-f5b314d0-3c71-4af5-8083-8484cbde4dbd): Water Services Regulation Authority \(Ofwat\)
- [Delivery Partner for Price Review 2024](/contracts/ocds-b5fd17-ac353536-07a3-46e6-998c-cd4aa1eef82d): Water Services Regulation Authority \(Ofwat\)
- [Interim Learning and Organisation Development Partner](/contracts/ocds-b5fd17-26609017-ddff-44d1-a244-274b27d17fa9): Water Services Regulation Authority \(Ofwat\)

## Source

[View the original notice on Contracts Finder](https://www.contractsfinder.service.gov.uk/Notice/9125ae21-9679-4a4d-831a-28753af83198-408408)