Technical know-how to outweigh fees in EPFO bid

The organisation will give higher weightage to technical qualifications against financial bids while selecting fund managers for its Rs 3.5 lakh crore corpus

Keen to beat the zero fees bids quoted by prospective fund managers,the Employees Provident Fund Organisation (EPFO) has decided to revamp its bid documents. The organisation will give higher weightage to technical qualifications against financial bids while selecting fund managers for its Rs 3.5 lakh crore corpus.

Under the plan,which has also been vetted by the Central Vigilance Commission,the EPFO will give as much as 80 per cent weightage to technical qualifications of bidders and only 20 per cent to the fund management fees that they quote. However,to qualify for the financial bidding,the players will have to earn at least 65 points in their technical bids.

On Thursday,it also held discussions with rating agency Crisil which is working as a consultant in the selection process.

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We do not want companies to quote very low or very high fees as we are more interested in getting the best people on board to manage our funds. This kind of a weightage system in the bidding document will,hopefully,discourage bidders from playing with their financial quotes, an EPFO official said.

The technical bid will give additional points to bidders for their past experience in the business. So firms that have managed funds over Rs 15,000 crore will earn additional points. The qualifications of the fund management team will also get them bonus marks. The EPFO is expected to issue Requests for Proposal by the first week of May and hopes to complete the appointment process by month-end.

We will then hold a meeting of our Central Board of Trustees to ratify the selection, the official said.

Meanwhile,the term of its fund managers ICICI Pru,HSBC and Reliance Capital and SBI came to an end on March 31 and SBI was made the sole fund manager for a three month period till June 30.

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Earlier,the department of disinvestment has also faced the problem of getting near zero financial bids from investment banks that are keen to manage public offers by state run firms.