Revised Request for Standing Offer
August 6, 2019
The Office of the Superintendent of Bankruptcy (OSB) is seeking to establish a new list of pre-qualified Licensed Insolvency Trustees (LITs), which can be accessed on an as-needed basis, in all regions of the country, further to the issuance of Conservatory Measures. This revised Request for Standing Offer (RFSO) will replace the existing Standing Offer for LIT Services.
Establishing Standing Offer Agreements (SOAs) allows for the timely, transparent and cost effective transfer of insolvency estates from an LIT who is the subject of Conservatory Measures to a private sector LIT who is responsible for completing the estate administrations.
This process consists of an application accessible on Buyandsell.ca, the Government of Canada’s procurement website available at the following address: https://buyandsell.gc.ca/procurement-data/tender-notice/PW-19-00884275. There is no charge for registration or access to any of the procurement documents associated to the RFSO.
The OSB will use the SOA list to select LITs to administer seized estates. SOA Holders will be offered a limited and specified period of time to conduct due diligence on the estate files seized prior to accepting or declining the work, submitting their offer for a no cost option, or submitting their Schedule of Costs.
Procedures regarding both the no cost option and the Schedule of Costs have been revised to offer greater clarity to LIT bidders. The highest ranked SOA Holder to accept an assignment of all the estates at no cost to the OSB will be assigned the seized estates pursuant to Conservatory Measures. If no bids are submitted at no cost to the OSB, the determination will be based on the lowest Schedule of Costs.
We encourage LITs to participate in the Standing Offer Agreement as it is essential for the integrity of the insolvency system that the OSB have an adequate number of qualified bidders across Canada so that estates that are subject to Conservatory Measures can be administered in the private sector where appropriate.
For more detail on the purpose and process of the RFSO, please refer to the following information:
- Overview of the RFSO process
- Anticipated responsibilities of an LIT awarded a contract
- Questions and Answers (covering: eligibility, changes to requirements, fee payment approach and likelihood of contracts).
Please note that LITs qualified under the previous RFSO are still required to submit a new bid and fulfill the qualification requirements.
Office of the Superintendent of Bankruptcy of Canada
Overview of the Process
- Parties must register in order to log in to the Buyandsell.ca website. There is no charge for registration or access to all applicable RFSO procurement documents.
- The documentation will include information such as: objectives and requirements of the project, the scope of work, the mandatory requirements, the evaluation grid, remuneration and the selection process.
- Bidders must show that they meet all mandatory requirements and submit all required information by the date and time indicated.
- Following the review of all bids, the OSB will inform the bidders of the results of the review and of the list of pre-qualified LITs.
Anticipated Responsibility of Licenced Insolvency Trustee (LIT) Awarded a Contract
The contracted LIT will take the necessary actions to protect the seized estates. The contracted LIT’s responsibilities are to:
- Take possession and control of estate assets, realize and collect assets for dividend distribution among the creditors based on the order of payment provided for in the BIA;
- Take possession and control of and keep the paper and/or electronic books, records and documents related to estates;
- Protect and preserve the property and the paper and/or electronic books, records and documents related to the estates being administered;
- Continue and complete the administration of the seized estates and perform the duties relative to the estates in accordance with the provisions of the BIA, the Bankruptcy and Insolvency Rules and the directives issued by the Superintendent of Bankruptcy; and
- Ensure that the parties involved receive the services that a LIT is required to provide pursuant to the provisions of the BIA, the Bankruptcy and Insolvency Rules and the directives of the Superintendent of Bankruptcy.
Questions and Answers
- Why is the Office of the Superintendent of Bankruptcy (OSB) launching a revised Request for Standing Offer (RFSO)?
The OSB is launching a revised RFSO as the original terms and conditions are set to expire in September 2019. In addition, the OSB wishes to have the maximum number of Licensed Insolvency Trustees (LITs) available in every province to administer the seized estates.
- Who is eligible to apply under the RFSO?
The mandatory requirements are fully described in the RFSO, however, generally speaking, all LITs in good standing who, have the capacity, financial resources and adequate facilities to administer estates as an LIT are eligible to apply. LITs have the choice to apply to administer either consumer files, corporate files, or both.
- Is the new RFSO identical to current SOA?
No. The OSB is seeking to enable more suppliers to offer their services and obtain contracts as Guardian LITs. As a result, the OSB has revised its requirements to better meet its needs and provide it with the necessary flexibility to respond to the various circumstances that may result from Conservatory Measures. The OSB has also taken into consideration the fees and rates set out in the BIA, as well as its fiscal responsibilities. Consequently, the OSB has determined that it is necessary to have SOAs that will more fully address these requirements.
- Am I likely to be contacted to complete the administration of seized estates?
Despite an increase in Conservatory Measures in recent years, the OSB cannot provide a guarantee of work to any of the qualified LITs. That said, in the past five years, the OSB has taken considerable steps to place seized files in the hands of private-sector LITs.
The OSB will communicate with SOA Holders qualified in the province or territory(ies) where they want to offer their services simultaneously, providing dates on which information regarding the estates seized pursuant to Conservatory Measures will be made available for review. SOA Holders will be offered a limited and specified period of time to conduct due diligence on the estate files seized prior to accepting or declining the work, submitting their offer for a no cost option, or submitting their fee-based bid.
Upon receiving the qualified SOA Holders’ submissions within the prescribed timelines, the OSB will assess the submissions by order of rank. The SOA Holders list will be ranked based on the considerations identified in the RFSO.
The highest ranked SOA Holder to accept an assignment of all the estates at no cost to the OSB will be assigned the estates seized pursuant to Conservatory Measures. If no bids are submitted at no cost to the OSB, the determination will be based on the lowest Schedule of Costs.
Collectively, all the enhancements are considered to be in the best interest of the insolvency system. Estates which were seized as part of Conservatory Measures will be more likely to be placed with a private-sector LIT, where the infrastructure to administer estates already exists. This will result in reduced costs to the entire system and less disruption to the debtors and creditors of the seized files.
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