The Swedish Fund Selection Agency (Fondtorgsnämnden, FTN) has extended the deadline for its major procurement of global equity funds for the reformed premium pension funds platform it is currently re-populating with procured funds.
Sweden’s funds lobby has responded to the delay, saying the changes in mandatory requirements the agency has made at a late stage in this procurement process is a big worry for bidders, and said the FTN could have avoided most of the adjustments.
The FTN said yesterday the tender period for the process – which covers more than SEK200bn (€17.4bn) of pension savings – has been extended to 6 February, with a new set of corresponding earlier deadlines for potential bidders to ask questions, and for the authority to give answers.
When the agency launched the procurement on 4 November last year, the deadline for submitting tenders was originally set at 16 December.
On 9 December, that deadline was then extended to 30 January, with the FTN citing the significant interest there had been in the procurement, as well as clarifications and changes that had been made to mandatory requirements in the procurement specifications and supplementary information as reasons for the extra time.
In details of why the tender period was being extended, the FTN yesterday listed some corrections it was making to its instructions about which questions were or were not mandatory for tenderers to answer, and pointed out that an answer box had been missing following one particular question, clarifying that tenderers could attach a separate file containing their answer instead.
Since it began its huge task of procuring funds for the premium pension platform in 2023, the FTN has extended tender deadlines several times.
Asked for comment on this, Fredrik Hård, pension expert and economist at the Swedish Investment Fund Association (Fondbolagens förening), told IPE: “Of course it’s regrettable that the procurement documents contain so many ambiguities and outright errors that the material – and on several occasions – had to be adjusted with significant changes as a result.”
Hård said it was a natural part of the procurement process for certain clarifications to happen.
“In this case, however, mandatory requirements have changed at a late stage, which causes great concern for bidders,” he said.
Fund companies invested a lot of resources taking part in the procurements, and then to burden the process even more by introducing new conditions and forcing them to revise their tenders was “extremely unfortunate”, he said.
“Especially since the adjustments mainly appear to be due to carelessly-designed procurement documents that could have been avoided,” he said.
A potential consequence of the conditions for the procurement being significantly changed after the announcement could, he said, be fund firms not taking part because of how the requirements were first set – and then missing the chance to offer funds later found to meet the revised conditions.
“Should this be the case, this is a problem not only for the fund companies in question, but also in terms of competition between bidders, and by extension for the premium pension system and pension savers,” Hård said.
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