4.6. The contract payment mechanism is intended to encourage the contractors to deliver a satisfactory service, and to protect the commercial and operational interests of DVTA. If the contractors fail to provide the required outputs and performance levels (see paragraph 1.9), DVTA can implement a range of sanctions, ranging from financial deductions to contract termination (for serious or consistent performance shortfalls - see Figure 7).
Figure 7: Summary of MOT2 contract requirements and penalties/measures for inadequate contractor performance
• If the service is unavailable, due either to equipment breakdown, or to vehicle tests taking longer than an average of 18 minutes to complete, DVTA may make deductions from the contractors' unitary payment (the period of unavailability determines the extent of deductions). Test fees may also be reclaimed from the contractors if unavailability of the service results in cancellation of vehicle tests; • If test waiting times exceed 14 days overall, or 21 days at any time, at any test centre, DVTA may recoup from the contractors the costs of any changes made to working patterns, or of any overtime worked to meet demand for vehicle testing. DVTA may also instruct the contractors to provide additional testing facilities (equipment, test lanes or test centres) if the capacity provided is insufficient to meet actual demand for vehicle testing; and • If deductions from the unitary payment exceed 5 percent in one month, or 2.5 percent for three consecutive months, DVTA is entitled to award performance points against the contractors. Should nine or more performance points be awarded within a 12-month period, DVTA becomes entitled to terminate the contract. |
Source: MOT2 contract
4.7 In September 2002, DVTA formally notified the contractors that it intended to make limited deductions from their unitary payment on the basis that they were failing to achieve the 18-minute test time required by the contract, for cars/light goods vehicles at the Larne test centre. However, DVTA did not proceed with this course of action, in light of increased commitment by the contractors to the Joint Working Group (see paragraph 4.4), and made no further moves to implement deductions during negotiations, in order to provide the best possible environment for resolving the problems.