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Frequently Asked Questions - #71

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An entity enters into a bidding agreement, joint venture for the purpose of bidding in the auction, bidding consortium, or other arrangement pertaining to bidding in an auction and the entity becomes a qualified bidder. If the bidding partner subsequently withdraws its support at a later time, would the entity still be a qualified bidder able to continue its participation in the Auction Process?

Any bidding agreement, joint venture for the purpose of bidding in the auction, bidding consortium, or other arrangement pertaining to bidding in an auction must be disclosed in the Part 1 Application using the Insert prepared for this purpose. Any such agreement cannot be first disclosed at a later point in time. If the parties to this agreement qualify, the parties do so as a single “Joint Bidder”. Joint Bidder receives a single notification of qualification naming the entities that are parties to the agreement. The list of Qualified Bidders included with the notification of qualification has a single entry for the Joint Bidder, naming all entities participating in the Arrangement (e.g., the entities are listed as “Entity A and Entity B” on a single line or in some other manner that makes it clear that the entities have qualified as a single joint bidder).

Thus it is the Joint Bidder that becomes the Qualified Bidder able to submit a Part 2 Application; each party separately does not have the status of a Qualified Bidder and cannot continue in the Auction Process separately. Status as a Qualified Bidder cannot be rescinded or changed after the Auction Manager has issued the Notification of Qualification. In particular, the Qualified Bidder status of the Joint Bidder cannot be assigned or transferred to one of the parties to the agreement. Applicants certify in their Part 1 Application that they will not assign or transfer their status as a Qualified Bidder to another party.

For the Joint Bidder to continue in the Auction Process after the Joint Bidder has become a Qualified Bidder, the entity that presented its financial information for creditworthiness purposes (“Entity A”) submits the Part 2 Application including any required pre-auction security. For the Pre-Auction Letter of Credit, Joint Bidder has the following options: (i) Entity A submits a single Pre-Auction Letter of Credit that names all parties to the agreement as the “Bidder”; or (ii) Entity A names Entity A as the “Bidder” strictly for the purposes of the Pre-Auction Letter of Credit and the Authorized Representative from Entity A acknowledges in writing that the EDCs may draw upon the letter of credit if any of the parties to the agreement have made a material omission or misrepresentation in the Part 1 Application or the Part 2 Application submitted to participate in the auction or has violated the Auction Rules; or (iii) each party to the agreement separately submits a Pre-Auction Letter of Credit for the full required amount. Entity A submits any additional pre-auction security that is required. The Part 2 Application for Joint Bidder must include the certifications for compliance with the Association and Confidential Information Rules (or appropriate information disclosures) from each party to the agreement.

11/15/2021, in Association and Confidential Information Rules.

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