4.8 A contract may or may not describe the procedures to be followed in the event of a failure to agree on benchmarks. Failures to agree may occur on the detail of how the process is to be managed (e.g. timescales, reporting formats, comparators) or on the outcome of the benchmarking exercise itself. There will also need to be agreement on the triggers that, at the end of the benchmarking process, lead to market testing being applied.
4.9 Both parties need to be clear, before the process starts, what the dispute resolution procedures are to deal with any failures to agree, and agree how they will be applied. The public sector client should also consider whether there are alternative procedures which might be more appropriate and, if necessary, seek to agree such alternative arrangements with the PPP contractor. Some contracts prescribe that, where there has been a failure to agree the benchmarks, the parties automatically move to market testing. Where such a provision does not exist in the contract, the steps that might typically follow a failure to agree the benchmarks could be:
• parties agree to market test
• escalation to more senior levels
• dispute resolution procedure
• mediation