The contract has in place mechanisms to protect value for money in the future

2.29  The contract with Consul has in place a number of procedures which should protect the Service in the future and which will help to deliver value for money. These include:

  Benchmarking - every five years, Consul is obliged to undertake a benchmarking exercise for the services detailed in the contract. If, based on these results, Consul is no longer providing a reasonable standard of service, negotiations will take place to achieve better value. Where the benchmarking exercise indicates the cost of providing the services has changed (either an increase or decrease), the Unitary Service Charge would be amended accordingly. Consul will bear 75 per cent of any such change and the Service 25 per cent.

  Market-testing - where either party is unhappy with the results of the benchmarking exercise, they can require the soft services (for example, ground maintenance, cleaning, waste disposal, catering, security) to be market-tested. Any cost increase or decrease arising from this process will be applied in the same way as for the benchmarking exercise. Where negotiations are not successful for hard services (e.g maintenance of the building fabric), these can be addressed through a dispute resolution procedure.

  Service variation - the Service can request a change in the method of delivery or in the scope of the services provided by Consul. It will trigger the procedure by issuing a preliminary notice of the proposed variation. Consul will then provide a cost of the variation in advance and proposals for implementation. The Service will decide whether or not to proceed within 10 working days. If there is any dispute about the valuation of the service variation, the matter can be referred to the disputes procedure.

  Step-in rights - where Consul has failed to deliver to certain standards, the Service can exercise its right to step-in and perform (or procure from a third party) a particular service or services for a temporary period. Where Consul performs certain services at or below an agreed Default Level for six consecutive months, the Service can terminate Consul's right to provide that service.

  Dispute resolution procedures - there are a number of steps in the dispute resolution procedure. These are: negotiation in good faith between the Project Managers; meeting of the Joint Project Board (involving Consul's Chief Executive, the Service's Director and Deputy Directors and the Project Managers); and, if there is a failure to reach agreement, adjudication followed by arbitration.

2.30 As part of the deal, the Service sold three sites to the private sector property company involved with the successful consortium bid, two of them for more than their market valuation. The Service negotiated a clawback arrangement for one of these sites, the Crumlin Road Courthouse (which had a net negative value and was sold for a nominal sum). The clawback arrangement stipulated that should the site be sold at a profit within five years, without redevelopment, the Service will be entitled to 25 per cent of the net profit.