3.2.1 The design, construction, integration, installation, testing, commissioning, operation, maintenance and ultimate performance of any asset procured or developed for the purposes of meeting the requirements of the output specification are all the Contractor's responsibility and the Authority should not (save in exceptional circumstances) take any responsibility for this risk. Correspondingly, the Contractor should be afforded the freedom to manage its activities without interference from the Authority. It is the Contractor's risk whether the design and development it has carried out and the operational procedures it has put in place are capable of satisfying the Authority's service requirements. The Authority should not, save in exceptional circumstances (for example, those giving rise to Authority step-in (see Section 29 (Authority Step-In)), agree to any role before or following Service Commencement which involves the Authority taking back any part of the Contractor's risk. In this context, the issues referred to in Section 3.3.2 are important.
3.2.2 The Authority's role prior to signature of the Contract includes:
• defining the output requirements and any constraints within which the output requirements must be achieved;
• reviewing the Contractor's proposals for achieving the outputs in terms of approach, methods, resources, timetable, management and organisation (including design, maintenance and operational procedures and method statements); and
• negotiating and agreeing with the Contractor all contractual terms, including the procedure for either party proposing and implementing a change in Service (see Section 13 (Change in Service)), the consequences of a failure to meet the Service Commencement Date (see Section 4 (Protections Against Late Service Commencement)), and the procedure for accepting the Service Commencement (see Section 3.6 (Acceptance and Service Commencement)). See generally Section 32 (Competitive Dialogue and Commitment Letters).
In accordance with the principle outlined in Section 3.2.1, the Authority should not confirm to the Contractor that the Contractor's proposals will meet the Service requirement. In practice, however, the Authority should be confident before signing the Contract that the Contractor's proposals (including method statements) will be capable of delivering the Service once fully developed and implemented.50 The Authority should also ensure that the Contractor's basic design proposal is incorporated into the Contract (see Section 3.4 (Submission of Designs and Information to the Authority)).
3.2.3 The Authority's role after signature of the Contract and prior to Service Commencement will normally include:
• reviewing and commenting upon the Contractor's designs, maintenance and operational procedures and method statements as they are developed (see Section 3.4 (Submission of Designs and Information to the Authority));
• viewing and observing tests of any equipment being developed;
• administering the agreed process for either the Contractor or itself to propose and implement changes to the output requirements, constraints on inputs or the Contractor's proposals (see Sections 3.5 (Quality Management Systems) and 13 (Change in Service));
• following the agreed procedure by which the Contractor demonstrates to the Authority that Service Commencement can be accepted (see Section 3.6 (Acceptance and Service Commencement));
• following the agreed procedure in relation to a failure to meet the Service Commencement Date and agreeing with the Contractor the measures to be taken and the financial consequences (see Sections 4 (Protections Against Late Service Commencement) and 5 (Supervening Events)); and
• auditing the Contractor's activities in accordance with an acceptable Quality Management Systems regime (see Section 3.5 (Quality Management Systems)).
3.2.4 The Authority should require enough management information to be reassured that the delivery timetable is on track and any overriding safety issues are being satisfactorily addressed. This will involve having access to the site.
3.2.5 The principle outlined in Section 3.2.1 must be upheld to ensure the appropriate risk transfer during the pre-Service Commencement period. The Authority should not, for example, retain any rights to approve or accept interim stages such as practical completion of construction or detailed design prior to acceptance of Service Commencement, as this may dilute any risk transfer (unless, of course, the Authority takes the risk of commissioning as the NHS does for clinical services in relation to the technical interface in hospital projects). This is different to the point made in Section 3.6.4 in relation to accepting Service Commencement before all construction requirements are completed. In the case of certain defence projects involving very specialised or necessarily subjective requirements there may be a case for the Authority to accept some aspects of the design by agreeing a methodology for meeting such requirements in the Contract (see Section 3.6.2). This should only be contemplated where transfer of all aspects of the design risk would clearly not offer the best value for money.
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50 The Department of Health in Great Britain has issued guidance on how NHS Trusts should deal with design sign-off on PFI Projects (see The Design Development Protocol for PFI Schemes - Jan 2001 and updated September 2004). However, Northern Ireland has taken the benefit of previous strong experience in healthcare design and in the acute hospital programme is using a hybrid model for design proposals which reduces the cost to the private sector.