Format of Written Proposals

Format of Written Proposals The CPA desires your complete and candid response to the questions and issues raised in the sections below. Please respond in a clear, concise, and comprehensive manner. "Parroting" or restating sections will be viewed adversely. Excessive or elaborate proposals, or departures from the stipulated format, could cause your firm’s proposal to be disqualified. If there are explicit expectations or implicit assumptions in the RFP that are unrealistic, please provide information to clarify the issue for the Selection Committee. 1. General Description Please provide a general description of your international commercial bank, including its asset size, number of employees, location of headquarters, capitalization, and credit ratings. If the response to this RFP is made by a bank consortium, please include this data for all participants. State the name of your firm and the address, telephone, and fax numbers of the office providing the proposal. Also state the name, address, telephone, and fax numbers of the lead banker(s) who will ultimately be held accountable for the services and performance under this proposal. If the response to the RFP is made by a consortium, please include this information for each participant. 2. International Presence Describe in general terms your bank or bank consortium’s international presence. Provide data on the number of branches and offices on a world-wide basis. Data on your correspondent banking relationships and how they might be used to facilitate Trade Bank activities would also be helpful. Please provide more detailed information on your firm’s activities in the Middle East and countries surrounding Iraq. In addition to the statistical data, provide background information on how this project would fit into your institutional strategy or your strategy for operations in the Middle East. If the response to the RFP is made by a consortium, please include this data for all participants. 3. Trade Finance Profile Please provide background information about your bank’s (or bank consortium’s) trade finance business with an emphasis of transactions originating or having their final destination the Middle East. Note how long your firm has been in the business of trade service and provide information on the volume of business handled on a principal basis. This should include trade finance statistics by location for the last 3 years, including volume (US$) and number of transactions. The Selection Committee is also interested in learning more about your bank’s third-party trade finance processing business. State when your firm began third-party trade finance processing and provide volume statistics by location for the last three years, including volume (US$) and number of transactions. In addition to L/Cs, describe the other trade finance products you provide on an outsourced basis, including Issuance/Re-issuance/Restricted Negotiation of L/Cs in other countries; L/C advising; Documentary Collections; and any other such products. If possible, the Selection Committee would appreciate receiving contact information from three clients for whom your bank (or bank consortia) provides third-party trade finance processing services. In addition, the Selection Committee would be interested in knowing if your bank won any awards from the financial press (i.e. Institutional Investor, Euromoney, Trade Finance, or International Financial Review, etc.) for its trade finance expertise in the last 5 years. 4. Project Work Plan Please describe how your bank, or bank consortium, proposes to carry out the assignment summarized in the "Overview" section, above. Describe the services that will be provided to the CPA, the Government of Iraq, State-owned Enterprises, and private sector importers and exporters. Describe the legal structure you would propose to use for Trade Bank operations. If you propose utilizing a cash collateral fund, or other security mechanism for payments under L/Cs, describe the legal structure which you propose using in some detail. Provide a detailed work plan for the project with projected time frames for the accomplishment of key milestones used to measure progress. This work plan should include initial measures to more completely establish Trade Bank operations, staffing inside and outside Iraq, transitioning the bank to full-scale operations in Baghdad, and turning the bank over to Iraqi management upon expiry of the APA. 5. Team Organization The OC will list all key personnel that will be assigned to the OC and describe their responsibilities. At a minimum, the OC will provide a team composed of a General Manager, Section Heads/Senior Clerks, Structure and Transactions Specialists, and Clerical Staff. To ensure that the Trade Bank rapidly progresses to an operational stage, it may initially be located outside Iraq. However, it is an intermediate goal to establish the core operating unit in Baghdad as soon as suitable facilities can be identified and the security situation permits normal bank operations. As its operations shift to Iraq, it will be the OC’s responsibility to find secure living quarters for its personnel, and the OC will be responsible for the logistical support of its people in the field. While the OC can rely on a certain amount of security being provided by Coalition troops, the OC will bear the responsibility for security needs of its employees in the field. The OC will identify in detail the staffing, skill mix, the level of expertise and minimum qualification requirements for its personnel, and the distribution and effective use of work force necessary to support this requirement. Resumes for all key personnel should be provided. 6. Technology Transfer The OC will need both front and back office systems to process trade finance transactions. In addition, it will need the computer hardware and communications equipment to make these systems operational. Initially, much of this information technology could be located outside Iraq, but an intermediate objective is to migrate these systems to the Trade Bank offices in Baghdad. This transfer will be done when the CPA locates and secures suitable office space for the Trade Bank and the security situation improves to the extent that location of these functions in Baghdad becomes practical. These information and communications systems will be transferred to the Trade Bank once the Processing Agreement expires endowing it with the essential infrastructure that it needs to continue operations on its own. These systems would include, but not be limited to the following: Back-office trade processing system; Customer access system for trade transaction inquiry and reporting; Secure authenticated e-mail capability with guaranteed delivery between back-office and clients; Letter of credit and collection initiation system; and Electronic document preparation system with connectivity to shippers and other third parties. The CPA will identify and make available suitable office space for the Trade Bank in Baghdad. This will include modern, air conditioned offices appropriate for the functioning of the Trade Bank. The OC will be responsible for procuring the information technology equipment for the Trade Bank, including all computer hardware, software, and communications technology. The OC will be responsible for the functionality of the communications and information technology systems, including their ability to work in the challenging environment of post-conflict Iraq. Maintenance of this equipment will be an OC responsibility until the expiry of the Agency Processing Agreement (APA). All communications and information technology equipment, including the related software, will become the property of the Trade Bank upon expiry of the APA. Please identify the hardware, software, and communication systems noted above that your firm or operating consortium would be prepared to utilize on behalf of the Trade Bank. Specify any assumptions, in particular on necessary inputs, which you may be making in assembling these physical assets. Note which of these systems are available for TBI use, and those that could be left with the Trade Bank when the Processing Agreement expires. Also note which systems are proprietary. If licensing agreements, or other charges, apply to the Trade Bank’s usage of such systems, please outline what these charges will be. 7. Credit Structure (See Tab B. for additional information) The OC submission should respond to this section by proposing credit structures that they would use for issuing Letters of Credit on behalf of the Trade Bank or for confirming L/Cs issued by the Trade Bank. No specific structure will be dictated, and banks and the bank consortium are encouraged to propose variations on the structures noted below, as well as new approaches. However, responses should clearly articulate concerns about and suggested solutions to issues raised by the need to obtain reimbursement from the Trade Bank directly, or reimbursement from the DFI on behalf of the Trade Bank. Broadly speaking, there are three distinct credit structures for Trade Bank Credit: Cash collateralized L/Cs; L/Cs with export credit agency (ECA) support (including support from bi-lateral and multi-lateral agencies); and commercial bank acceptance of CPA reimbursement obligations (as evidenced by a Reimbursement Certificate "RC" issued by CPA drawing on the resources of the DFI). These are described in greater detail below. Cash collateralized L/Cs: Under this structure, a commercial bank would issue an L/C on behalf of the TBI or confirm a TBI L/C after funds covering the L/C (or an individual draw under an L/C) have been paid to the Issuing/Confirming Bank. For proposals that stipulate cash collateralized credit exposures, the OC should offer the method for paying interest on funds it holds prior to making any payments under a L/C. The risk of attachment for any funds not held in the DFI also should be addressed. ECA Support: The commercial bank issuing/confirming the L/C would do so after obtaining export credit agency support (e.g., 180 day L/C insurance policy). Such support could also be in the form of guarantees or insurance provided by bi-lateral agencies (e.g., OPIC) and multi-lateral agencies (e.g., IFC). Responders to the RFP should outline how such transactions would be structured under their proposal. Reimbursement Certificates: The third structure would involve the commercial bank issuing/confirming a Trade Bank L/C based solely on a Reimbursement Certificate (RC) issued by the CPA. Under this structure, the CPA would issue an RC to the Trade Bank approving an allocation of DFI funds for a particular transaction that has been recommended by the Program Review Board (PRB) and approved by the CPA. Funds may or may not be segregated from the main DFI account into a sub-account pending transfer at the end of the credit period provided under the L/C. These funds would retain the privileges and immunities as set forth in paragraph 22 of UNSCR 1483 until finally transferred out of the DFI in fulfillment of the L/C obligations. A draft copy of the RC is attached (see Tab C). In order to meet the CPA’s strategic objectives for the Trade Bank, TBI credit activities should evolve from exclusively supporting CPA procurement to supporting funded requests from Iraqi ministries. Different credit structures may be used to support this evolution of TBI activities. Ultimately, the goal is to have the OC accept RCs as evidence of CPA repayment obligations. Responses to the RFP should comment on the utilization of the RC as evidence of the CPA’s repayment obligation. In so doing, it should be noted that the OC candidates are responsible for consulting their respective regulators for questions regarding treatment of the risk inherent in any structure they propose. 8. Training Training will be a crucial element of OC activities, and training programs should be initiated immediately on a needs-appropriate basis. While the OC will play a large, direct role at the beginning, it is anticipated that many of the responsibilities will devolve to Trade Bank personnel over time. The need for training is broad based ranging from basic logistics and L/C training, to data entry training on the L/C system, to familiarization with market practices and legal issues. Depending on security and infrastructure constraints, training sessions may be held outside of Iraq for a period of months, and sites might include locations in the Middle East, as well as bank headquarters locations. Training should not only focus on trade finance procedures but also should include records management and control procedures. Please describe your approach to training Trade Bank personnel in some detail. The OC will need to absorb all in-country training costs, and any additional training costs needed to make the Trade Bank operational, as part of the Agency Processing Agreement. As such, these training costs will need to be incorporated into the Pricing section of responses to this RFP (see Section 10., below). Costs related to more extensive training exercises outside of Iraq will be covered by a separate agreement negotiated once the Trade Bank becomes operational and these needs can be better assessed. 9. Agency Processing Agreement (APA) As previously noted, individual banks (or bank consortia) will be invited to negotiate an Agency Processing Agreement to provide the services described in detail in the Statement of Work attached as Tab A. The operating agreement between the CPA and the Operating Consortium will be for an initial term of twelve [12] months. The APA may be extended for an additional twenty four [24] months at the option of the CPA. All pricing data (see Section 10., below) should reflect charges for the first 12-month period and the 24-month extension period. The Processing Agreement will govern the operating relationship between the CPA, OC, and the Trade Bank, including (but not limited to) the following: Rights and obligations of the parties and other legal aspects of the operating procedures for a third-party processing program; Inclusion of language stating that the OC follows ICC rules and guidelines; Indemnification of the Trade Bank for OC failure to examine documents in accordance with UCP 500/ISP 98 standards; Procedures to resolve documentary disputes, including: Assuming the Trade Bank is the Issuing Bank, handling discrepancies between beneficiaries, negotiating banks, and applicants; Assuming the Trade Bank is the Issuing Bank, handling discrepancies found by the Applicant that the OC failed to identify; Assuming the Trade Bank is the Confirming Bank, handling discrepancies with beneficiaries, negotiating banks, and the issuing bank; Assuming the Trade Bank is the Confirming Bank, handling discrepancies found by Issuing Bank that the OC failed to identify; Processing turnaround goals; and Pricing of services (see Section 10., below). Please include a draft copy of the proposed Agency Processing Agreement between your bank (or bank consortium) and the CPA. This will serve as the basis for final negotiations between the parties on the structure and pricing of the services provided. 10. Pricing There are a number of options for pricing the services related to the Statement of Work (Tab A.) to be provided by the bank (or consortium of banks) under the Agency Processing Agreement. These include (but are not limited to) the following: Pricing based on a one-time up-front fee paid when the initial 12-month Agency Processing Agreement is executed. This could include charges for start-up costs related to the following: Information technology equipment; Computer software and consulting services; Secure communications equipment; Refurbishment of Trade Bank offices in Baghdad; and Make-ready costs of living quarters for expatriate staff in Baghdad Pricing based on a per transaction basis; Fees needed to provide logistical support to expatriate staff in Baghdad, including meals and incidental expenses, lodging, security, and salaries; Pricing for the training to be delivered pursuant to 8. above; and Interest paid for credit balances if L/Cs (or confirmations of a Trade Bank L/Cs) are issued on a "cash collateralized" basis. Please provide your pricing proposal (in dollars) directly in the draft Agency Processing Agreement submitted pursuant to Section 9., above. The structure of any fees and charges, as well as the levels for these fees and charges, should be included in any response to this section. Responses to this section should also reflect the pricing proposed for the first 12-month term of the Processing Agreement and that which would be applied for the subsequent 24-month option period. Additional Items In order to expedite a rapid conclusion of the selection process, please include, as part of your proposal, a draft copy of any legal documents that you will require to be executed either by the Coalition Provisional Authority or the Trade Bank of Iraq in order that your firm or consortia can act as the Operational Consortium. Please attach your firm’s most recent annual report. The Coalition Provisional Authority thanks you in advance for your interest in this potential assignment. Return Wednesday, 10-Dec-03 15:10:23