2.16 Medium value changes can encompass a very large variety of changes and bespoke works and services. Medium value changes are likely to cost either more than the amount agreed for low value changes but less than £200,000 to implement or may require an adjustment to the unitary charge which is less than 2%. As with low value changes, the sums should be negotiated. Unlike low value changes, these are neither standard enough to allow a pre-priced approach nor are they large enough to warrant the competitive tendering process suggested for high value changes.
2.17 Authorities are advised to adopt an approach with their SPV for medium value changes whereby there is recognition that this type of service will be required and there should be a standard way of pricing for and providing the service. Authorities will need to negotiate the cost of any materials necessary, with the prices based upon existing market rates (e.g. derived from their catalogue for small works or from standard market indexes such as the BMI price book). They will also need to agree a schedule of rates for specialist labour and standard schedules of allowances for the professional fees which may be incurred on some changes. SPVs and contractors should not seek to charge a standard mark-up or profit margin on medium value change, however Authorities should be prepared to pay for the SPVs own staff costs (ideally beyond an agreed annual floor) in preparing the estimates/change documents at agreed rates - and provided they have complied with their responsibilities under the change protocol.
2.18 Authorities should also try to agree with the SPV and its funders that no funder due diligence is required for medium value changes below an aggregate threshold. If there are lifecycle and maintenance costs resulting from this scale of change, the costs claimed should be consistent with the rates quoted in the original bid. Similarly, if there are increased FM costs from the change, the cost should be the current rate being paid by the authority unless there is an upgrade in the service or a cost saving from the change. If there are risks arising from the change e.g. a latent defects risk, the pricing of these should be done on an open book basis. The framework for costing and processing the medium value changes can be reviewed probably every five years or when value testing of services is to be carried out but should last for at least a two year period