Procurement of Framework Agreement on Auction Consulting Services. Reference no

Transcription

1 Procurement of Framework Agreement on Auction Consulting Services Reference no

2 INVITATION TO TENDER Contents 1 Introducing PTS Aim of the procurement Requirements for tenderers Technical skill and capacity Legal status etc Registration certificate Tax verification Affirmation Requirements for the Auction Consulting Services Price and Commercial Terms Price Part 1 Consulting services for auction design Part 2 Development, implementation and operation of electronic auctions over the public Internet Part 2 Model Auction Case price estimate Framework Agreement Term of contract Commercial conditions generally Evaluation Price for Part Price for Part General preconditions for the tender Time limits Form of procurement Form and number of the tender Language Confirmation Questions Additions/amendments to this Invitation to Tender Secrecy Signing, authorised signatories Submission of tenders... 8 Appendices 1. Service Specification 2. Framework Agreement Template 3. Checklist to be completed by the tenderer 4. Affirmation 5. Begäran/Svar Offentliga uppgifter RSV General terms of contract The National Post and Telecom Agency 2

3 INVITATION TO TENDER 1 Introducing PTS Post- och telestyrelsen, PTS (The Swedish National Post and Telecom Agency) is the national regulatory authority for the electronic communications and postal sectors. The concept electronic communications includes telecommunications, IT and radio. PTS works in four primary areas: consumer issues; competition issues; efficient utilisation of resources and secure communications. It is PTS vision that everyone in Sweden should have access to efficient, affordable and secure communication services. One of our key tasks is to ensure the development of functioning postal and telecom markets. We actively promote healthy competition, supervise price trends and have the consumer's interests at heart. PTS also issues regulations and ensures that existing legislation is followed. PTS is also in charge of the Swedish numbering plan and allocates number resources to telecom operators. As the radio spectrum is a limited natural resource, frequencies must be allocated fairly among the various interested parties. PTS is responsible for spectrum management in Sweden, as well as coordinating spectrum matters with other countries. Those who want to use radio transmitters must apply to PTS for a licence. If there are more applicants for a licenses in a frequency band than possible licenses, one way for PTS to award licenses is through an auction process. PTS is also responsible for the Swedish national numbering plan. One way for PTS to award numbers to telephony operators is through an auction process. PTS has approximately 250 employees, of which the majority work at the head office, located in central Stockholm. More general information about PTS is available at 2 Aim of the procurement The National Post and Telecom Agency (PTS) intends to conclude Framework Agreements with one or two Consultants for the provision of Auction Consulting Services. The Framework Agreement shall consist of two parts: 1. Consulting services for auction design 2. Development, implementation and operation of electronic auctions over the public Internet Tenderers are required to offer tenders for both parts of the Framework Agreement. Tenders for only one part will not be considered. After the Framework Agreement has been concluded, PTS intends to request offers from the Consultant(s) for services under Parts 1 or 2 (or both) of the Framework Agreement. The offers received from Consultants shall adhere to the terms of the Framework Agreement. If more than one Consultant submits offers in response to PTS request, then PTS shall select the offer with the lowest estimated price. The National Post and Telecom Agency 3

4 INVITATION TO TENDER Please note that PTS cannot guarantee any minimum hours or consulting work volumes within the scope of the Framework Agreement. 3 Requirements for tenderers 3.1 Technical skill and capacity A description of the tendering firm, its operations, resources and capacity for the delivery shall be attached to the tender. The Consultant must have knowledge in the areas of auction theory, spectrum regulation, and telecom markets. The Consultant must also have participated in designing, developing, implementing and operating at least one (1) complex auction, that shall have been completed at the time of the tender. A complex auction is defined as an auction with a number of auction objects, more than one bid round, and auction objects that are characterised by substitutability and complementarity. To substantiate the knowledge and experience requirements detailed above, the Consultant shall provide CV:s for the key personnel working for the Consultant that have knowledge and/or the experience. The Consultant shall also include a list of auction projects to which the Consultant has provided services. The list shall include a description of completed auction projects (however, the Consultant is not obliged to disclose information that is subject to nondisclosure agreements) and the extent and scope of the work carried out in each project. 3.2 Legal status etc Registration certificate A current registration certificate from the Swedish Companies Registration Office (Bolagsverket) for the company shall be attached to the tender. For foreign tenderers, similar registration certificates from the corresponding authority in the tenderer s home country shall be submitted Tax verification The tenderer must not have any debts for taxes and social insurance charges and shall certify this by attaching a completed Swedish Tax Authority standard form 4820 Begäran/Svar Offentliga uppgifter [ Request response Public information ], see Appendix 5 for Swedish tenderers. Foreign tenderers shall satisfy corresponding conditions in their home country, which shall be verified by a certificate from the relevant authority in the tenderer s home country. The certificate may not be older than three months, computed from the last date for tenders Affirmation The tenderer shall attach an affirmation, see Appendix 4, in original, signed by an authorised signatory. 4 Requirements for the Auction Consulting Services The tenderer shall provide tender for a Framework Agreement on Auction Consulting Services, as specified in Appendix 1 to this Invitation to Tender (Service Specification). The National Post and Telecom Agency 4

5 INVITATION TO TENDER The tender shall contain a confirmation that all conditions for the service offered are completely satisfied. The confirmation may be limited to the word Satisfied, which will be interpreted to mean that the requirement is entirely satisfied. 5 Price and Commercial Terms 5.1 Price The tender shall contain the tenderer s price offer in Swedish kronor (SEK) for the Framework Agreement, specified in the tender corresponding to the following structure Part 1 Consulting services for auction design The tenderer shall specify the price per hour for services under Part 1 of the Framework Agreement Part 2 Development, implementation and operation of electronic auctions over the public Internet The tenderer shall specify the price per hour for services under Part 2 of the Framework Agreement. The tenderer may differentiate the price per hour according to the following categories: Category A Senior auction consultants Category B General auction services, including support services Category C Software development For each offer for auction services that PTS requests from the Consultant within the terms of Part 2 of the Framework Agreement, the Consultant shall offer: 1. A preliminary estimated total price for consulting services, based on the offered Framework Agreement prices per hour, and 2. A fixed price in addition to the estimated price under 1. This fixed price may be different for each offer and is not specified in the Framework Agreement. The fixed price shall cover costs and expenses for the Consultant (e.g. software licenses, infrastructure, travel, and accommodation) Part 2 Model Auction Case price estimate The tenderer shall provide a price estimate for the full development, implementation and operation (up to and including the announcement of the auction results to PTS) of the Model Auction Case, as described in Annexes 1 and 2 of the Service Specification (Appendix 1). The tenderer shall provide a breakdown of the offered price estimate in the categories detailed above under section 5.1.2, i.e. the estimate price for consulting services based on the offered Framework Agreement prices per hour and a fixed price. PTS will use the provided price estimate for the Model Auction Case to evaluate the tenders, as detailed in section 6 of this Invitation to Tender. 5.2 Framework Agreement Term of contract The Framework Agreement shall be valid between the parties for a period of two (2) years, from the date of signing. PTS shall have the right to request an extension of the Framework Agreement term for one (1) year, on substantially unchanged terms and conditions. The National Post and Telecom Agency 5

6 INVITATION TO TENDER The prices shall be fixed through the entire term of contract including extension. 5.3 Commercial conditions generally The attached Framework Agreement, including the General terms of contract shall apply (Appendix 2 and Appendix 6). The tender shall contain a confirmation that all commercial conditions are accepted completely. This confirmation may be limited to the word Accepted, which will be interpreted to mean that the above-mentioned commercial conditions shall apply. 6 Evaluation PTS will award Framework Agreements to a maximum of two (2) tenderers that fulfil all the requirements detailed in this Invitation to Tender. If only one tender fulfils all the requirements, then that tenderer shall be awarded the Framework Agreement. The selection criterium shall be the lowest price. The lowest price shall be computed in the following manner: Criteria Weighting factor Price for Part 1 25 % Price for Part 2 75 % Following evaluation of the prices of Part 1 and Part 2, points will be aggregated as a final point sum. 6.1 Price for Part 1 25 points are allocated to the tender that has the lowest price per hour for consulting services under Part 1 of the Framework Agreement. Other tenders are allocated points on the basis of their inverted proportional relationship to the tender that has the lowest price, i.e. 25 points divided by a factor that represents the inverted relation between the higher relevant price and the lowest price. (Example: A price that is 15% higher than the lowest tender receives 25/1.15=22 points. The factor in this case is thus 1.15). 6.2 Price for Part 2 75 points are allocated to the tender that has the lowest price estimate for the Model Auction Case (see above section 5.1.3) under Part 2 of the Framework Agreement. Other tenders are allocated points on the basis of their inverted proportional relationship to the tender that has the lowest price, i.e. 75 points divided by a factor that represents the inverted relation between the higher relevant price and the lowest price. 7 General preconditions for the tender 7.1 Time limits Written tenders shall be submitted to PTS no later than Wednesday May 2, 2007 and shall be binding up to and including September 30, The National Post and Telecom Agency 6

7 INVITATION TO TENDER 7.2 Form of procurement This procurement is being implemented under the open procedure for procurement of services according to the Public Procurement Act, lagen (1992:1528) om offentlig upphandling (LOU). Tenders may be accepted without preceding negotiation. The opportunities for supplementing or clarifying details in the tender are strictly limited. A tender that is not complete may be excluded. 7.3 Form and number of the tender The tender shall satisfy the requirements and instructions imposed in this Invitation to Tender. Tenders including reservations may be excluded. If information is omitted, this may be interpreted to mean that the requirements cannot be satisfied. In order for PTS to be able to evaluate the tender, it is of great importance that it contains all the information requested. The tender shall be drawn up in the same sequence and according to the same structure as the Invitation to Tender, and shall refer to the items mentioned in it. Tenders and information material shall be submitted as two (2) copies, one (1) original and one (1) copy. The documents and certificates according to sections 3.2, 7.5 and 7.10 can be submitted as one (1) copy. The tender should also be submitted on a data CD, except documents and certificates according to sections 3.2, 7.5. and Language Tenders shall be submitted in Swedish or English. All documentation and correspondence in the matter shall be in Swedish or English. 7.5 Confirmation The tenderer shall confirm that the conditions contained in this Invitation to Tender are accepted by completing the enclosed Checklist (Appendix 3), which shall be signed by an authorised signatory. 7.6 Questions Questions concerning this Invitation to Tender and other documents included shall be presented in writing or via to Helena Klasson, helena.klasson@pts.se. The final date for presenting questions is April 19, All answers to questions will be published on the PTS website. 7.7 Additions/amendments to this Invitation to Tender All amendments, additions and/or deletions in this specification of requirements must be in writing to be valid. 7.8 Secrecy Tenders that have been submitted to PTS are subject to absolute secrecy until such time as all tenders or offers are made public, a decision regarding supplier and tender is made or the matter has been completed before then, i.e. in the normal case until the date when the award decision has been made (see Chapter 6, Section 2, third paragraph of the Official Secrets Act (1980:100)). The National Post and Telecom Agency 7

8 INVITATION TO TENDER According to Chapter 8, Section 10 of the same Act, after an award decision has been made, secrecy shall apply to among other things details held by the authority concerning business and operational circumstances of a private party, who [ ] has entered into a business relationship with the authority, if it may for a special reason be assumed that the private party will suffer damage if the information were to be disclosed. You are hereby given an opportunity to state what information you consider sensitive from the perspective of secrecy and also for what special reason it may be assumed that you would suffer damage if this information were to be disclosed. However, note that PTS is not bound by the tenderer s assessment but will make an independent assessment. 7.9 Signing, authorised signatories The tender shall be signed by an authorised signatory. In the event that an authorised signatory s powers are not indicated by an extract from the Swedish Companies Registration Office, the power shall be verified by another appropriate document, for example a power of attorney. For foreign tenderers, this power shall be verified by a document from the corresponding authority in the tenderer s home country Submission of tenders Tenders shall be submitted in an anonymous sealed envelope marked Anbud Auction Consulting Services dnr to: The Registrar National Post and Telecom Agency Box STOCKHOLM Tenders may also be delivered to the PTS reception desk on Birger Jarlsgatan 16 in Stockholm, which is open every weekday that is not a public holiday, except for certain weekdays preceding public holidays. On April 30, 2007 the reception desk will close at and May 1, 2007 is a public holiday. Stockholm March 9, 2007 Helena Klasson Legal Officer Karin Peedu Head of the Procurement Section The National Post and Telecom Agency 8

9 KRAVSPECIFIKATION Appendix 1 DATUM VÅR REFERENS 9 mars Invitation to tender for Auction Consulting Services Service Specification 1 Introduction Please note that the specifications detailed in this document are mandatory requirements for all tenders. 2 Overview of Services The Framework Agreement will consist of two parts: 1. Consulting services for auction design 2. Development, implementation and operation of electronic auctions over the public Internet Tenderers are required to offer tenders for both parts of the Framework Agreement. Tenders for only one part will not be considered. 3 Part 1 Consulting services for auction design Under the first part of the Framework Agreement, the Consultant shall provide consulting services to PTS in the field of auction design. This means that the consultant shall advise PTS on technical and economic issues relating to the design of auctions. 4 Part 2 Development, implementation and operation of electronic auctions over the public Internet Under the second part of the Framework Agreement, the Consultant shall provide an integrated solution for the development, implementation and operation of electronic auctions over the public Internet. This means that the Consultant shall be able to provide an IT system for auctions, adapt this system to the auction POSTADRESS Box 5398, Stockholm BESÖKSADRESS Birger Jarlsgatan 16 TELEFON FAX E-POST pts@pts.se WEBBADRESS

10 2 design chosen by PTS, implement the auction (including the supply of IT infrastructure for the auction) and operate the actual auction process, under the supervision of PTS. It is important to note that PTS does not intend to run auction server software on PTS own IT infrastructure. In addition to the requirements below, it must be possible to adapt or develop, implement and start the operation of the auction process of the Model Auction Case as described in Annexes 1 and 2 within a four (4) month period from the date when PTS requests an offer for such an auction. Consultants shall expect that PTS immediately after the signing of the Framework Agreement will request an offer for development, implementation and operation of an auction comparable to the Model Auction Case. 4.1 Development and adaptations of the electronic auction system It shall be possible to adapt the Consultant s electronic auction system to provide at least the following auction designs: Sealed bid auctions, both discriminatory and uniform price formats. Simultaneous, multiple round auctions (SMRA) with capabilities comparable to those implemented in standard SMRA formats, i.e. as used in most FCC auctions. 4.2 Implementation of the auction system The Consultant shall implement the auction system on IT infrastructure provided by the Consultant. This infrastructure shall include the connection to the public Internet. The IT infrastructure is subject to the requirements detailed below Reliability requirements The Consultant shall provide an auction system implementation with functional redundancy. In the case of an infrastructure or software failure that falls within the Consultant s responsibility, it must be possible to reset the system to the system state after the last completed auction round. It must be possible for the auction process to restart from the point of the last completed auction round within 30 minutes. The Consultant shall describe the IT infrastructure solution chosen to reach the redundancy and restart requirements in the tender, to substantiate the fulfilment of the requirements detailed above. Connections over the public internet to the bidders that are outside the control of the Consultant are not within the scope of the reliability requirements. Also, any

11 3 bidders IT infrastructure problems are not within the scope of the reliability requirements, with the exception of reliability problems that can be traced back to the bidder interface functionality that is provided by the Consultant Interfaces a) PTS interface The Consultant shall provide at least the following interface to PTS to control and/or monitor the auction process and for presentation of the auction results. The interface shall allow PTS to connect from at least two different terminals. It is however only a requirement to support one active connection from one of the terminals at each instance in time. There shall be a possibility to set minimum / starting prices for each offered object before the start of the auction. There shall be an interface whereby PTS can control the presentation of the following information regarding the next auction round to the bidders. Start time and date in 1 min increments Duration and/or end time and date in 1 min increments. There must be a secure communication interface to all bidders, the distributed information should be sent simultaneously to all bidders. There shall be an interface whereby the auctioneer can set the bid increments for the following. Each of the offered objects separately. A predefined group of objects. All objects. It must be possible to set bid increments in at least the following ways. As a percentage increase with a predefined rounding of the result. As an absolute amount. For each object in the auction the following information should at least be presented after each round of the auction: Number of active bids for the object. Number of new bids placed on the object in the latest round. The name of all the bidders that have posted a bid.

12 4 The amount of each bid. The name of the legal entity that has the standing high bid. The amount of standing high bid. After the conclusion of the auction result, the result shall be delivered to PTS as a standard text file and on paper. For each object the following information should at least be included: The name of the bidder that has posted the winning bid The amount of the winning bid b) Bidder interface It must be possible to run the bidder interface on industry standard PC HW and operating systems and/or standard web-browsers. It must be possible for the bidders to use the bidder interface over a standard internet connection over the public Internet. It must be possible to present the following information to the bidder. Star time and date, duration and/or end time of the next round in the auction. Current high bid for each of the objects in the auction. All active bids for each of the objects in the latest round of the auction The possible bid increments for each object in the next round of the auction. Current total eligibility / bidding entitlement. Used eligibility / bidding entitlement in the current auction round. Number of waivers still to be used for the bidder. The number of active bidders in the latest auction round for each object The name of all active bidders in the latest auction round for each object There Consultant shall provide the bidders with the result of each auction round as a text file or another commonly used downloadable data format. The purpose of this is to allow bidders to post-process and analyze the auction data between each round.

13 c) Public interface The Consultant shall provide a web interface for the public information on the auction and the auction results PTS chooses to release. This interface should at least be able to handle the following information. An updated list of current high bid and the number of active bids for each lot. The auction result after the termination of the auction. The Consultant shall, on request from PTS, display the PTS logotype on the public web interface. PTS will provide the logotype in a standard picture format Authentication and security The Consultant shall provide a solution allowing secure authentication of the bidders and PTS over the public Internet. The authentication solution shall allow the bidder to connect from at least two different terminals. It is however only required to support one active connection from one of the terminals at each instance in time. An encryption solution for protecting the secrecy of the bid over the public internet shall be supported. The Consultant shall describe the authentication and security solution, to substantiate the fulfilment of the requirements detailed above Traceability of the auction process The Consultant shall store interactions during the auction process between the bidders, the system and the auctioneer in a database so that a detailed audit trail can be ensured after the end of auction process. This information shall be securely stored by the Consultant for at least 6 months after the end of the auction process. The following information must at least be stored. The content and timestamp of all information that is sent from the bidders interface. The content and timestamp of all information that is received by the system from the bidders. The content and timestamp of all information that is sent to the bidders interface. The content and timestamp of all information that is entered into the system by the auctioneer.

14 6 It shall be possible to provide the information above to PTS in the form of a standard text file. The Consultant shall, on request from PTS, provide the original database file to PTS. 4.3 Auction operation The Consultant shall operate the auction process based on instructions from PTS. On request from PTS, one or more Consultant staff shall work together with the PTS auction team at the PTS premises in central Stockholm, Sweden. After the auction process is completed, the Consultant shall present the auction results to PTS as described in section a). On request from PTS, the Consultant shall present the auction results to the public as required in section c). Payment solutions are not within the scope of the Framework Agreement.

15 7 Annex 1 Model Auction Case The description below of the Model Auction Case is based on PTS current assumptions, at the time of this Invitation to Tender, about the planned GHz auction. This auction is planned to be held in August or September The time available to the consultant to adapt and/or develop, implement and run this auction is expected to be four (4) months from the date when PTS requests an offer for an auction comparable to the Model Auction Case. It is therefore a requirement that the price estimate for the Model Auction Case in the tender is based on these time constraints. Extent of the Consultant s responsibility The Consultant shall develop/adapt, implement and operate an auction system for the auction described in this Annex and Annex 2. The Consultant shall implement and run the auction system on IT infrastructure that fulfils the reliability and restart requirements of the Service Specification, section The supply of this IT infrastructure is the responsibility of the Consultant. For this tender it shall also be assumed that the auction process will be the responsibility of the consultant. This will also include the position as auctioneer. It shall further be assumed that the auctioneer will be working together with the PTS auction team at PTS facilities in Stockholm during the auction. PTS will also supply Swedish speaking support personnel to handle first line support to the bidders. Description of the Model Auction Case For the purpose of this tender the Consultant shall assume that the auction as described in Annex 2 is to be developed, implemented and operated. The following assumptions shall be made. Bidder registration is the responsibility of PTS. The Consultant will receive a list with registered and approved bidders. This list will contain the eligibility/bidding entitlement for each of the registered bidders. There are 200 registered bidders for the auction. It shall be possible for all bidders to be simultaneously connected to the auction in an authenticated and secured manner (as described in section of the Service Specification). The auction is assumed to span over 10 working days. The Consultant shall supply the information texts of the bidder interface in English. PTS will translate these texts into Swedish and the Consultant shall adapt the bidder interface to use these Swedish texts.

16 8 It shall be possible to select a view in the bidder interface that presents a user-defined selection of municipalities. It shall be possible to add or remove municipalities from this user-defined view during the auction. There shall be a function which enables the bidder to, in a single action, place a higher bid in all municipalities in the user-defined selection where the bidder does not have the current high bid on this frequency block. The total bid amount shall be presented before the bids are submitted.

17 9 Annex 2 Auction rules for the Model Auction Case A.1 Information A.1.1 Registration [Registration will be handled by PTS.] A.1.2 Legal consequences of bidding The receipt of the offered security solution by the Authorised Representatives of the bidders implies that PTS may assume that any bids submitted in the auction are submitted on behalf of the relevant bidder. The bidder is responsible for reporting any suspicion of loss or breach of confidential security codes immediately. A.1.3 Bidding Contingency Plan Prior to the start of the auction bidders should develop contingency plans that can be quickly implemented if bidders experience difficulty participating in the auction. While PTS will correct any problems within PTS-controlled facilities, bidders are solely responsible for anticipating and overcoming problems such as bidder technical failures, local telephone service interruptions, adverse local weather conditions, unavailability of Authorised Representative, or the loss or breach of confidential security codes. A.2 The lots (objects of the auction) A.2.1 Frequency blocks The GHz band is divided into 2 duplex frequency blocks (F1 and F2) and 4 simplex channels (T1 to T4) in 290 regions, adding up to 1740 lots. Each duplex channel is 2 x 20 MHz. Simplex channels are 20 MHz. All lots will be assigned as rights to use a specific frequency block. A.2.2 Reserve prices There will be different reserve prices for the channels, depending on their spectrum endowment (bandwidth) and the population size of the regions. Reserve prices will be set by PTS, it should be assumed that it is the responsibility of the consultant to feed these reserve prices into the system for all auction objects. In addition to the reserve price, a one-off administrative charge of SEK 1000 / license will be payable by those who win licenses in the auction. Bidders should, for the purpose of calculating the total cost of buying and holding a licence, also

18 10 consider the annual administrative charge payable to PTS. The collection of this administrative charge is assumed to be within the responsibility of PTS. A.3 Auction rules A.3.1 General structure of auction The auction will proceed in discrete rounds, with bidders making decisions simultaneously within a fixed time window. At the end of the round, standing highest bids will be determined and the results of the round communicated to bidders. Rounds will continue in this way until there are no new bids or waivers, or the auctioneer otherwise terminates the auction. A.3.2 Spectrum Cap: No person or undertaking may acquire an attributable interest in more than 40 MHz of spectrum in the GHz band, in any region, in the auction. A.3.3 Definitions Key terms Bid Withdrawal Committed bid Standing high bid Switching Activity Definition A legally binding offer to pay a specified amount of money, normally in exchange for a license to use the relevant spectrum lot. The withdrawal of a bid submitted in a previous round. This terminates a bidder s offer to pay for the relevant lot. Bidders can only withdraw a bid if they: (a) submit a corresponding number of appropriate new bids on lots on which the bidder does not previously have committed bids; and (b) have sufficient eligibility (see below). A bid that has not been withdrawn. A committed bid may or may not be a standing high bid. A bid that is designated as the current highest bid on a lot. Bids that are standing highest bids when the auction ends are the winning bids. Moving a committed bid from one lot to another. This is achieved by making a bid on one or two lot on which the bidder did not previously have a committed bid and withdrawing one or two committed bids on other lots in the same region, in the same round. The amount of bandwidth in a region on which a bidder is active. For each bidder, their total activity in a region at the end of a round is the sum of: the bandwidth of the lots on which they had standing high bids at the beginning of the round; plus the amount of bandwidth on which new bids placed in the current round (excluding any increases in standing high bids); minus the bandwidth of the lots on which withdrawals of standing high bids were performed.

19 11 Activity is determined separately for each region and may not exceed eligibility. Eligibility The maximum bandwidth per region on which a bidder is permitted to bid in the current round. A bidder s eligibility is determined separately for each region. Initial eligibility (in round 1) is determined prior to the auction for each bidder. Eligibility in round 2 is set by the bids submitted in each region in round 1. From round 3, eligibility is determined by the activity in the previous round. A.3.4 Bids Bids will be made at a predetermined level calculated by the PTS. Bidders will simply tick a check-box if they want to bid at the new price level. In the first round, each bidder will be able to bid for one FDD lot or up to two TDD lots in each region, unless they have not submitted a sufficient deposit or guarantee to bid for this number of lots. The sum of the number of inhabitants multiplied with the number of MHz of the lot(s) in each region for which the bidder places a bid in round 1, can not be higher than the number of inhabitants x MHz for which the bidder has submitted a guarantee or deposit. This means that the value of the guarantee or deposit may restrict the number of lots that the bidder is permitted to bid for in the auction. Example: Region 1 Region 2 Population FDD (40 MHz) TDD (20 MHz) TDD (20 MHz) Table: units of pops x MHz for two regions A bidder who has submitted a guarantee or a deposit covering 800 units of pops x MHz may bid for up to: - one FDD lot in region 2, or - two TDD lots in region 2, or - one FDD lot in region 1 and one TDD lot in region 2, or - two TDD lots in region 1 and one TDD lot in region 2. Due to the spectrum cap, the bidder can not bid for three lots (one FDD lot and two TDD lots) in region 1 regardless of the size of the guarantee / deposit.

20 12 In subsequent rounds, once a lot has received a bid, bids will be set equal to the current highest bid plus (one or more) increment(s). The increment will be determined by the auctioneer and announced in advance of each round. The increment may be varied in the course of the auction and set at different levels for different regions. The bidder that submits the highest bid on a lot will be designated as having the standing high bid on that lot. All committed bids on a lot are ranked on the basis of the value of the bid. Where there are ties between bids, these will be broken randomly by the auction software. The software will randomly determine a rank order amongst all the tied bids, regardless of how many there are. The bid designated as first in the rank order will be the standing high bid. Bids not designated as the standing high bid are still committed bids. They remain legally binding, and may become the standing high bid, in the event that higher ranked bids are withdrawn. The bandwidth of each bidder s committed bids per region is determined by the bids that they make in round 1, and remains constant throughout the auction. In other words; the bandwidth of the committed bids can not be increased or decreased after round 1. A.3.5 Bid increments After the first bid has been placed on a license, bid increments for each license in each round of the auction will normally be calculated by the software. In addition to the minimum bid amount for each license, bidders may place bids of amounts calculated using multiple bid increments. The smoothing formula calculates minimum acceptable bids by first calculating a percentage increment for each license based on a weighted average of the activity received on each license in all previous rounds. At the end of each round, the percentage increment is used to determine the bid increment for each license for the next round. The computation is based on an activity index. The current activity index is equal to a weighting factor times the number of new bids received on the license in the most recent bidding round plus one minus the weighting factor times the activity index from the prior round. The activity index is then used to calculate a percentage increment by multiplying a minimum percentage increment by one plus the activity index with that result being subject to a maximum percentage increment. The weighing factor, minimum and maximum percentage increments is determined by the PTS, and may change during the auction. As an example, the weighting factor may be 0.5, the minimum percentage increment at 0.1 (10%), and the maximum percentage increment at 0.3 (30%). Variables and parameters: Index i denotes round number. Ai = activity index for the current round (round i), i = 1,2,3,., A0 = 0

21 13 C = activity weight factor, 0 C 1 Bi = number of bids in round i Ai-1 = activity index from previous round N = minimum percentage increment (percentage increment floor, e.g. 10 %) M = maximum percentage increment (percentage increment ceiling, e.g. 30%) Ii+1 = percentage increment for the next round (N Ii+1 M) X i+1 = increment in SEK associated with the percentage increment Yi = high bid from the current round Equations (1) Ai = C * Bi + (1-C) * Ai-1 Ai is the weighted average of number of bids in current round and activity index from previous round. (2) Ii+1 = min {(1 + Ai) * N, M} The percentage increment Ii+1 is the smallest of (i) the percentage increment floor multiplied by the sum of the activity index and one, and (ii) the percentage increment ceiling. (3) X i+1 = Ii+1 * Yi The minimum increment in SEK is the product of the percentage increment and the current high bid, determined with three significant digits. A.3.6 Switching and withdrawals Bidders who have the standing high bid on a lot may switch their bid to another lot in the same region on which they do not already have a committed bid. It is not permitted to switch bids across regions or to switch to lots within the same region on which the bidder already has committed bids. Bidders may also switch committed bids that are not standing high bids. Again, it is only permitted to switch to a lot in the same region on which the bidder does not already have a committed bid. This means that bidders must have sufficient eligibility to perform the switches. In practical terms, switches are performed by submitting an (in terms of bandwidth) equal amount of new bids on lots on which the bidder did not previously have committed bids and withdrawals in a region in the same round.

22 14 It is not possible to submit more withdrawals than valid new bids (excluding any increases in standing high bids) in a region in any round. Therefore, the bandwidth of a bidder s committed bids in a region cannot decrease. (Even if the bidder stops bidding and his bids are overbid by others, the bids remain committing). In the same way that they submit bids, bidders will simply tick a check-box if they want to withdraw a bid. The withdrawal option on a lot will only be available if a bidder has both an existing committed bid on that lot and sufficient eligibility to submit the withdrawal. In the event that a standing high bid is withdrawn: If, in the same round as the withdrawal, one or more new bids are placed on the same lot, then one of the new bidders will become standing high bidder on that lot at the level of their bid. If no new bids are placed in the same round, the lot will revert to the bidder with the next highest ranked committed bid, at the price of that bid. If there is no highest ranked bidder, the lot reverts to PTS at a price determined by PTS. This price will not exceed the level of the withdrawn bid. Any bidders that withdraw a committed bid on a lot will only be allowed to bid again on that lot at a price that is the highest of: the current price; and The value of the committed bid at the time when the bidder switched from that lot plus one current bid increment for that region. A.3.7 Activity rules Prior to the auction, each bidder is allocated an initial level of eligibility, determining the maximum number of bids that they can submit in round 1. The maximum level of initial eligibility per bidder per region is 40 MHz. In subsequent rounds, eligibility is determined by the level of activity in the previous round. In round 2, eligibility per region is equal to the bandwidth of bids submitted in that region in round 1, which also equals the bandwidth of committed bids. Thereafter, eligibility may fall below the total bandwidth of committed bids, if bidders do not maintain sufficient activity (see example I). Example I Bidder A has an initial eligibility of 40 MHz in Region 1, but submits bids on only 20 MHz in round 1. Its committed bid in Region A is therefore fixed at 20 MHz throughout the auction. Its eligibility in round 2 is also 20 MHz. Bidder B has an initial eligibility of 40 MHz in Region 1, and submits bids on 40 MHz in round 1. Its committed bids in Region A correspond to 40 MHz

23 15 throughout the auction. Its eligibility in round 2 is also 40 MHz. Assume that, at the end of round 1, Bidder B has the standing high bid on one TDD lot. It needs to be active on at least two TDD lots or one FDD lot 40 MHz in round 4. Assume that it submits one bid for an FDD lot (40 MHz) and withdraws both its TDD bids, including one standing high bids. In this case, its activity = 20 MHz + 2*20 MHz 20 MHz= 40 MHz= Thus its eligibility in round 3 will be 40 MHz. A bidder s eligibility by region will normally stay the same or decrease over successive rounds, depending on the level of activity. However, in the event that a lot reverts to the next highest ranked committed bid (see Section 4.4 above), then the eligibility of the new standing high bidder will be increased by a amount corresponding to the bandwidth of that lot. This means that it is possible for a bidder whose eligibility has fallen to zero to reenter the auction, in the event that one or more of its committed bids become standing high bids. Note that under no circumstances can a bidder s total eligibility in any region be increased above the bandwidth of the (committed) bids that it submitted in round 1. Example II Assume that bidder A were not standing high bidder on the lot it bid for in round 1 but was ranked as number 2 on that lot. It submits no new bids in round 2, so that its eligibility drops to zero. In round 2, one of the other bidders withdrew its standing high bid from the lot on which bidder A had a committed bid and no other bidders placed bids on this. In this case, the lot reverts to bidder A at the price of its first round bid. Bidder A s eligibility is increased by 20 MHz to reflect this. Hence, its eligibility in round 3 will be 20 MHz. Subject to not exceeding their eligibility by region (and initial cap that applies in round 1 only), bidders can bid on any lots. They may: increase their bid amount on a lot on which they are currently the standing high bid; submit a new bid on a lot on which they already have a committed bid that is not the standing high bid; and/or submit new bids on lots where they do not have committed bids provided that they make a corresponding number of withdrawals. A.3.8 Waivers Each bidder will be granted three waivers from the start of the auction. Additional waivers may be allocated to all bidders in the course of the auction at the discretion of the auctioneer. It is recommended that bidders use waivers to guard

24 16 against technical failures. No waivers can be played in the first round of the auction. In a round in which a waiver is played, a bidder s eligibility points in each region are carried over to the following round, regardless of its activity level. Waivers can be submitted in two ways: Bidders may actively decide to submit a waiver. In this case, they may also submit some bids at the same time, in accordance with the normal auction rules. The auction software will automatically play a waiver for a bidder to protect their eligibility if the bidder fails to register a decision during the round and eligibility in at least one region would otherwise be reduced in the following round. A.3.9 Termination of auction The auction would conclude if a round passed in which there were no new bids or actively played waivers. The auctioneer has the right to suspend or terminate the auction at any time if exceptional circumstances occur. Server failure or suspicion of bidders involved in prohibited collusion is examples of exceptional circumstances. Such a decision is the absolute discretion of the auctioneer. The auctioneer may in case of exceptional circumstances e.g. declare a time-out or suspend the auction until further notice, in which case the auction would be re-started from the point of suspension; declare the previous round as void, in which case no round results will be released and the round will be re-run from the same starting position; void the entire auction, in which case all bids submitted will become void; or A.3.10 Information Before each round, bidders will have received information about: the start and end time and duration of the round; and the bid increment that will apply for each region. Information revealed at the end of each round will be anonymous and aggregated. Information revealed to all bidders about the previous round will be limited to: the total number of committed bids on each lot; the total number of new bids received on each lot;

25 17 the value of the current highest bid on each lot; and the aggregate of prices across all lots in a region and the average price per lot per region. This information will be provided in the form of history pages accessible through the bidder interface at any time during the auction. The history pages will provide information about all completed rounds. In addition, bidders will receive information about their own bids: their total number of committed bids the identity and price of lots on which they are highest bidder; the identity of other lots where they have committed bids, the amount of these committed bids and the rank of these bids amongst all bids received on these lots (which is relevant to withdrawals); their activity level in the previous round and eligibility in the next round; and the number of waivers that they have left. This information will be provided in a one-off summary to individual bidders once the results of the round have been processed. During a round, the bid form will provide bidders with the same information as included in the one-off summary, plus: for each lot, whether they are entitled to submit a bid and/or withdraw; for each lot, the current price and the new bid amount. Bidders will not receive any information about the identity of other standing high bids or committed bids, only the rank of their own bid relative to these other bids. A.4 Grant stage (end of the auction procedure) [The grant stage and payment stage will be the responsibility of PTS, after the Consultant has provided the full auction results to PTS.]

26 Appendix 2 1 The following FRAMEWORK AGREEMENT CONCERNING AUCTION CONSULTING SERVICES has been concluded between Post- och telestyrelsen (the National Post & Telecom Agency), organisation number (referred to below as PTS) and, company/organisation number.. (referred to below as the Consultant). Clause 1 Scope of the Framework Agreement The Framework Agreement between PTS and the Consultant consists of the following two parts: Part 1: Consulting services for auction design Part 2: Development, implementation and operation of electronic auctions over the public Internet Within the scope of the Framework Agreement, PTS will request offers from the Consultant for services under Part 1 and/or Part 2. In case more than one Consultant bound by a Framework Agreement submit offers, PTS will select the offer with the lowest estimated price. PTS reserves the right to request offers from the Consultant at such times as PTS considers that a need for services arises. No particular volume or particular number of hours can be guaranteed. The scope and performance of the services shall take place in accordance with the Service Specification. The terms in this Framework Agreement, the terms of the Service Specification, and PTS General Terms of Contract for services shall apply to the services in the order of priority given here. The parties shall continuously provide information to each other concerning changes that are of importance for the implementation of the Framework Agreement. Clause 2 Entry into force and term of Framework Agreement The Framework Agreement enters into force after the PTS contract award decision has entered into final legal force and the contract has been signed by authorised signatories for both parties. The term of the contract is two (2) years. The term of the contract may be extended by one (1) year if PTS, no later than three months prior to the end of the term of the contract, so requests in writing. Clause 3 Personnel Part 1: Consulting services for auction design