U.S. Small Business Administration, Office of Procurement and Grants Management, 409 3rd Street, SUITE 5000,5th Floor, Washington, D.C. 20416

L -- PORTFOLIO SECURITY VALUATION SERVICES SOL SBAHQ-98-R-0018 DUE 040398 POC Dionna Martin (202) 205-7029 The Investment Division of the U.S. Small Business Administration (SBA), which administers the Small Business Investment Company (SBIC) program, is seeking qualified sources that would be interested in providing portfolio security valuation services to the SBA for certain investments which have been made by SBIC's. The SBIC program is a private sector led partnership with the government. SBICs invest in small businesses in the United States using capital raised from private sources supplemented by funds provided by SBA. The SBIC program currently represents $6.72 billion of long term capital that has been invested in U.S. based small bsuinesses. As of September 30, 1997, there were 300 active SBICs (including 80 SSBICs) with $5.14 billion of private capital and $1.58 billion of SBA funding. One hundred ten of these, representing $1.437 billion of initial private capital, were licensed during the four fiscal years ended September 30, 1997. During fiscal year 1997, SBICs invested approximately $2.37 billion in the long term debt and equity of 2,371 small businesses. As the SBIC program continues to expand, increasing amounts of investments will be made in SBICs by SBA, and in turn the SBICs will make additional investments in small businesses. These investments in small businesses will continue to be relatively illiquid, and difficult to value. Since SBA is either a creditor or limited partner investor in SBICs which obtain SBA funds, SBA's financial position and the decisions SBA makes as a creditor or investor are a function of the valuation of the underlying investments in the operating small businesses. For this reason, SBA is seeking the assistance of private sector parties in valuing specified portfolio security investments of SBICs. THIS IS NOT A REQEST FOR COMPETITIVE PROPOSALS. The purpose of this notice is to develop a list of qualified firms to fulfill the Government's minimum requirements. The SBA desires to enter into a contractual arrangement with an organization which is knowledgeable aboutand experienced in the valuations of illiquid investments in small operating companies. The organization should have the ability to demonstrate significant experience in several related areas, specifically a comprehensive knowledge of the venture capital industry (to include investment techniques and investment vehicles), experience in the management and oversight of venture capital investments (to include early stage, mid stage and later stage investments) with successful investment performance, and knowledge of an successful experience with exit strategies and techniques relevant to venture capital investments. It should also be able to demonstrate industry-specific involvement (high technology, medical related, or retail) as an investor, investment manager, consultant or "gate keeper." This involvement should reflect in-depth knowledge of current conditions, critical issues facing the industry, and an understanding of key elements for successful investing in the area. Ideally, the organization should posses at least five years experience with the financial markets and maket makers which deal in small capitalization stocks; extensive contacts with industry sources and experts; and a geopraphic presence in or connection with key locations for these industries (e.g, Silicon Valley for high technology). Capabilities should include the ability to provide analysis and evaluation in a timely manner, insight into the current condition of the industry in which the portfolio company is operating, the relative position of the subject company within its industry, recent technological developments which may effect the company, and the current financial position of the company. In addition, the organization must be able to provide training in valuation techniques and methods to the staff of the Office of SBIC Operations. Such training will include the use of analytic models and methods, determination of sources of information, and data collection activities. The organization is under no obligation to provide members of SBA's staff with proprietary information in its possession, any may redact or otherwise disguise the origin of training materials which are considered sensitive in nature. Organizations having the required expertise and capabilities are invited to submit complete information discussing such capabilities. Information furnished should include an outline of specific related experience. The information provided will pertain to this synopsis only. Any interested organization must submit appropriate data in two copies by April 3, 1998. The government does not intend to pay for the information solicited or received. Respondents will not be notified of any conclusions related to the source data received, nor will a source list be provided. No telephone or fax request for this solicitation package will be accepted. (0076)

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