10.2.1 There must be a mechanism under the Contract which enables the Authority to monitor the Contractor's performance against the payment mechanism so that the payment mechanism can operate effectively. The Authority should also be able to identify other performance problems so that any other remedies for poor performance can be pursued if necessary.
10.2.2 The monitoring requirement should be set out in the main bid documents155 and a full methodology included in the bid. The methodology will normally include a substantial element of monitoring by the Contractor, subject to periodic Authority audits.156 Additional Authority monitoring will also take place on an exceptional basis, for example teachers, or medical staff identifying and reporting performance failures.
10.2.3 The reports relied upon for monitoring performance will be key to the management of the Contract and the payment mechanism, and should be specifically tailored to meet these requirements. Monitoring reports should be set out in detail in the Contract sufficient to minimise the scope for future disagreement.
10.2.4 Monitoring involves the collection and evaluation of data that should be objective, relevant, quantifiable and agreed with the Contractor. There should be a clear connection between the data collected, unavailability and the financial penalties for poor performance.
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155 Including an indication of who should bear the costs associated with performance monitoring (see Section 10.5 (Who pays for the Monitoring?)).