13.5  INCENTIVISATION

13.5.1  An important consideration for Authorities in managing changes to their projects is how to ensure the Contractor is incentivised to perform in accordance with the Change Protocol. The procedures set out in the Change Protocol should generally encourage a collaborative working relationship between the Authority and the Contractor, but explicit incentivisation through the payment and performance mechanism is nevertheless recommended.

13.5.2  The Contract should contain some performance indicators for the "change management service" that the Contractor is asked to provide in accordance with the Change Protocol. This should set reasonable targets for the Contractor's performance (particularly in respect of meeting the agreed timescales for processing and implementing changes). Failure to meet these timescales should attract deductions, which should increase with further delay. The Authority could also consider whether it would offer value for money to reward performance in excess of the targets (i.e. changes processed or implemented earlier than expected) through e.g. bonus payments or reward points that can be used to offset other deductions.193

13.5.3  Wherever possible, the Contractor and the Authority should both establish a framework of delegated authority to local representatives, so that changes can be agreed and processed quickly with minimum bureaucracy.

13.5.4  Experience from the management of earlier PFI contracts shows that tiers of sub-sub-contracting by the Contractor can slow-down and, potentially, impair the process of communication between the Authority and those providing the Services on the ground. Accordingly, the Change Protocol should include an obligation on the Contractor to ensure that regardless of whether it performs all the Services itself, or through Sub-Contracts or through sub-sub-contracts to any level, the speed and responsiveness of those providing the Service to requests and other communications from the Authority should be in accordance with performance standards set out in the payment and performance mechanism.




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193  See section 7.2.6.