2012-05-10

Distribution of Liquor Project Di t ib ti f Li P j t NRFP SATP-301 Proponents Meeting

May 10, 2012

Panel introductions
Roger Bissoondatt - Chief Financial Officer Gord Hall - Director, Corporate Policy Richard Poutney - Executive Lead Pelle Agerup Senior Director of Procurement Mike Kishimoto - Director Leigh Martin - Project Director Frank Catala Financial Advisor George Macauley - Fairness Monitor

2012-05-10

Agenda
Time Before 9 AM 9:00 11:00 11:00 - 11:45 11:45 12:00 Item Sign in Presentations followed by questions and answers Tour of the warehouse (Ken and Donna) Any questions from the tour

Transcription
A transcript of todays meeting will be posted in the proponents VDRs Our court reporter today is: Kari Dickinson One at the time rule One-at-the-time

2012-05-10

Before Stage 1
VDR Proponents meeting and site tour Q&A process

Proposal Submission
Proposals are due: June 29, 2012
prior to 4 PM local Victoria, BC time

Proposals can be submitted electronically via the BCBid website.

6

2012-05-10

Stage 1
Screen and Review Proposals for satisfaction of requirements:
Signed Declaration Government Reference check - Past 3 years over $1Million with Government
This will be rated on a pass/fail. No prior contract with Government is an automatic pass.

Review of Proposal Submission Form for completeness.

In the event the Province determines a Proposal Submission Form is incomplete, Proponents will have 7 days to rectify 7 deficiencies.

Stage 2
Up to top 3 Proponents will be deemed the ShortListed Proponents and be invited to enter into Stage Three based on:
1. A satisfactory conclusion of customer reference checks by the Province 2. Evaluation of Proposal responses based on the evaluation criteria outlined in the NRFP

2012-05-10

Stage 3 Proposal Refinement Process

1. Feedback sessions 2. Proposal Refinement Process 3. Submit final Proposal

Stage 2 & 3 Evaluation Criteria

EvaluationCriteriaTable InScope DistributionServices 1. 2. 3. 4. 5. 6. 7. ProponentCapabilityandCapacity DistributionServicesSolution GovernanceandStakeholderRelationshipPlan TransitionstrategyincludingRampUpschedule gy g p p RiskManagementandBusinessContinuity LabourRelationsStrategyandStaffSuccessorship Plan Financial Model and Pricing Submission TOTAL Weighting StageTwo 15% 30% 5% 10% 5% 10% 25% 100% Weighting StageThree 5% 35% 5% 5% 5% 5% 40% 100%

10

2012-05-10

Stage 4
1. Negotiation of agreements with the Selected Proponent 2. Execution of agreement

11

NRFP Process: Timeline

Stage 1 NRFP Stage 2 Evaluation Stage 3 Proposal Refinement Process
Off-Ramp Decision Point

Stage 4 Due Diligence and Negotiations

TB Approvals, Off-Ramp Decision Point

NRFP posting time 8 weeks

Declaration Of Interest NRFP Document

Up to top 3 Short-Listed Proponents

Off-Ramp Decision Point

~ 90 days P1
Proposal Refinement Sessions Refined Proposal submissions Refined Proposal Evaluations Selected Proponent Identified

Accept P1

P1

Negotiation of Agreement

Transition Commences Debriefings

P3
If negotiations fail with P1 then option to go to P2 next in line

April 30, 2012 July 20, 2012

July 23, 2012 October 16, 2012

October 19, 2012 March 1, 2013

12

2012-05-10

NRFP Process: Timeline

DateRange April30 June29 July3 July13 July16 July20 July23 July27 Sept4 Sept21 Sept24 Oct5 Oct8 Oct12 Oct16 Nov1,2012 March1,2013 NRFPoutonstreet Evaluationsofproposals Internalpreparationandbriefings. FeedbackSessions WkofSept4 InternalPreparationindividualProponentmeetings WkofSept10 IndividualProponent meetings WkofSept17 VDRQ&A Wk of Sept 17 VDR Q&A Proponentspreparetheirfinalproposals Evaluationsoffinalproposals AnnouncementofselectedProponent Negotiationsandexecution ofagreement Activity

13

Tour
2 representatives per proponent The tour will end back here Save questions for the end We d W do not have permission to take h i i k pictures at this time
14

2012-05-10

Questions
Emailed questions after this meeting will be responded to in the Q&A amendment posted in the VDRs Pelle Agerup@gov bc ca Pelle.Agerup@gov.bc.ca

15

Q&A
Within the RFP there are several references (e.g. 3.1.2A) to Inventory Replenishment - what is the Government's expectation? Supplier and agents working with the service provider they will determine inventory demand and forecasting. The supplier and agents will own the inventory. What role would the Proponent play regarding this expectation? The service provider will work with the supplier and agents. For warehouse replenishment what role will the Proponent provide other than processing purchase order requests from suppliers and agents? See above.

16

2012-05-10

Q&A
Is the Government expecting any regulatory changes to occur over the next 5 years? The project procurement team is not aware of any changes at this time. Who will pay for delivery charges? For GLS? For non-GLS? Depending on the responses we receive. 4.3.2.1 - (Second paragraph) - What will the role of the BCLDB's Purchasing Department be in the future? The LDB will still need to purchase the product immediately before sale to wholesale customers.
17

Q&A
5.2.3.1 - In the new model will the Government continue to cover the credit card fees for sales to Wholesale customers? This is outside of the scope of the NRFP. What is VDC Parts and IC Operations as noted within Appendix E.7? [See transcript for correct answers] Please define the role and responsibility of the Contract Management office (as it relates to 5.2.9.6)? This will be clarified during the negotiation process.
18

2012-05-10

Financial Model and Pricing Submission Frank Catala

May 10, 2012

Submission Considerations
Financial Model and Pricing Submission needs to address the broad objectives in provided in Section 3.2 and the financial objectives described in in Section 5.5. More specifically, the financial objectives are: 1. Demonstration of value for money; 2. Financial transparency into services prices and cost drivers; 3. Pricing certainty over the shortterm with visibility into future year prices; 4. Achievement of onongoing cost savings from innovation and productivity gains; 5. Flexibility to handle permanent and temporary changes in scale; 6. Ongoing risk management, including the quantification of risks with clearly defined accountability for each risk; 7. Capacity and willingness to make the required investments to support the proposedServices; and 8. Provide equal or improved service quality as of the services commencement date, while improving service quality over the term of the Agreement.

20

10

2012-05-10

Financial Response Requirements

Two part response: 1. Proponents are to provide a description of the proposed financial model by responding to the requirements in Section 8.2.8.1. 2. 2 Prices for all proposed services are to be provided by completing Appendix K. Prices must take into account the normalizing modelling assumption listed in Section 8.2.8.2.

21

Appendix K - Structure
Table of Contents Sections Introduction General Instructions Services Services to Suppliers and Agents Services to Wholesale Customers Investments and Capital Plan Scale Impacts 1.0 Suppliers and Agent Prices 2.0 Wholesale Customer Prices 3.0 Investment & Capital Plan 4.0 Scale Impacts Worksheet Name 0.0 Introduction 0.1 Instructions

Proponents are directed to worksheets 0.0 Introduction and 0.1 Instructions for an overview and completion instructions .
Some Key Instructions to Note: Password protect Appendix K when submitting to MLCS Do not delete, protect, hide, lock any cells, rows, columns or worksheets Proponents are to enter inputs into Blue Cells

22

11

2012-05-10

Appendix K - Components
1.0 Suppliers and Agent Prices Purpose: Provide full descriptions of all proposed services to be provided to Suppliers and Agents along with the associated prices for each service. Key Data Elements Required for each service: service name, full descriptions, assumptions, billing unit, price and pricing components. Purpose: Provide full descriptions of all proposed services to be provided to Wholesale Customers along with the associated prices for each service. Key Data Elements Required for each service: service name, full descriptions, assumptions, billing unit, price and pricing components. Purpose: Provide a full descriptions of all investments required to support the proposed services. Key Data Elements Required for each investment: full descriptions, assumptions, investment amounts, recovery amounts method of recovery. Purpose: Provide a list of the proposed services impacted by changes in volume, and identify the impact of growth on the proposed prices. Key Data Elements Required : % change in services prices against proposed pricing for each growth scenario.

2.0 Wholesale Customer Prices

3.0 Investment & Capital Plan

4.0 Scale Impacts

12