5.28 The approach of SOPC3 is not to require contractors to maintain finance facilities in excess of what is expected to be required to finance known capital works, on the grounds that it is poor VfM to pay (through the unitary payment) fees to financiers for commitments which are unforeseen or cannot be costed at the outset. In consequence, the contractor's obligation to procure future finance is limited to a "best efforts" basis and if finance is not procured, the procuring authority may need to consider paying directly for capital works.
5.29 It may be possible to build in some more flexibility in a debt structure to accommodate the contractor raising additional funds to cover the cost of procuring authority changes, but it is important that this issue is addressed when the original finance is put in place. If this is not done the original lenders' security rights may prevent new debt being added without their consent, and hence the original lenders will have a monopoly supplier position.
5.30 SoPC recognises that over time changes to the service specifications may be required to cater for changes in procuring authority requirements, and incorporates Authority Change Mechanisms to meet these requirements. Where procuring authorities judge that additional flexibility would deliver better VfM they should incorporate measures within the contract so as to:
• Include pre-priced options for changes in scope of services;
• Have pre-priced call off rates for small changes; Maintain reserve contingencies; and
• Require the contractor to maintain suitable back-up facilities (such as contingent equity).