(a)  Required outcome

(i)  The establishment of a supply chain that that has the experience, ability and resources to deliver, across the whole of the Territory, the services required of Participants to deliver the TDP and all Approved Projects. 

(ii)  Selection of supply chain partners and ongoing management of supply chain such that continuous improvement is achieved.

(b)  Scope

(i)  Establish hubco's Supply Chain

(1)  hubco shall select and appoint a supply chain commensurate with the Participants' values, goals and vision having regard to a number of areas including, but not limited to, health and safety, quality and sustainability. Subject to the terms of this Agreement, the supply chain will be established and managed in a manner that will:

(A)  optimise and clearly demonstrate value for money;

(B)  ensure the effective performance of the Project Services and the other Partnering Services;

(C)  provide optimal risk transfer to achieve certainty of delivery;

(D)  mitigate the risk of time and/or cost overrun; 

(E)  secure and maximise tangible benefits from repeat business and long-term business relationships;

(F)  deliver and demonstrate continuous improvement in value for money over the term of this Agreement; and

(G)  be undertaken in a transparent and auditable manner with clearly identified selection criteria and evaluation methodology and so as to satisfy the TPB (under exclusion of hubco's representative) that decisions have been made on a proper, arm's length basis where hubco proposes to include within the supply chain any C Shareholder Member or any Associate of any of hubco, the PSDP or any C Shareholder Member.

(2)  The assessment and selection of supply chain partners shall be conducted following a robust and clear procedure with suitable levels of checking to ensure that supply chain partners are selected with the ability to demonstrate:

(A)  appropriate professional accreditation;

(B)  financial robustness;

(C)  capacity to undertake the required services;

(D)  established and successful management systems including quality, environment and health and safety;

(E)  sufficient resources;

(F)  an appropriate level of support to the key resources; and

(G)  an appropriate level of quality in deliverables.

(3)  hubco shall maintain an awareness of any Participant targets in relation to recruitment and training initiatives and, where applicable and appropriate, shall take due cognisance of these in their supply chain resourcing plans. hubco shall record and report how their supply chain resourcing activities are commensurate with, or impact upon, Participant recruitment and development targets. Consideration shall be given to relevant guidance such as OGC: Promoting skills through procurement.

(4)  hubco shall establish supply chain agreements based on goals common to those of hubco, the Participants and service users. 

(ii)  Continuous Improvement in relation to Performance of Supply Chain partners 

(1)  Performance of supply chain partners shall be reviewed in accordance with hubco's continuous improvement targets and performance measurement requirements in Section 3 (Performance Measurement) of Schedule Part 3 (Partnering Services). 

(2)  hubco shall promote long-term high-quality working relationships between hubco and the supply chain to benefit the Participants and service users in terms of quality outcomes and value for money.

(3)  hubco shall ensure the effective measurement of Supply Chain Member performance and implement effective processes for removal of under-performing supply chain partners from the supply chain.

(4)  The testing of performance of supply chain partners should be undertaken, as a minimum, on each New Project in which they participate, and should include, but not be limited to, their:

(A)  performance against the supply chain selection criteria;

(B)  ability to complete their agreed scope of works in accordance with hubco's Quality System;

(C)  ability to provide a service that continues to demonstrate value for money;

(D)  capacity to undertake the required services in a manner which promotes partnership working; and

(E)  continuing ability to demonstrate that their practices and principles are aligned with those of the Participants.

(5)  Reporting on performance of supply chain partners shall be undertaken annually and form part of the process to review and update the supply chain.

(6)  The output of this annual review shall be reported to the TPB along with any proposed actions.

(iii)  Review and Update the Supply Chain

(1)  hubco shall develop and implement robust, transparent and auditable processes (clearly dealing with any conflicts of interest, potential or actual) for: 

(A)  performance measurement, performance management and periodic review of the supply chain members; 

(B)  (not less than [every five years]) carrying out a full review and assessment of the performance of incumbent supply chain members and implementing a robust, transparent and auditable open-market exercise to select the most appropriate new supply chain members so as to update its supply chain by the addition, removal, retention and/or substitution of its members from time to time (such process being known as the Supply Chain "refresh"),

in either case, so as to maintain a high quality and value for money service.

(2)  In reviewing the performance of individual supply chain partners, hubco shall consider the ongoing performance of the supply chain partner in comparison to the open market of suppliers able to provide the required services and to other supply chain partners providing comparable services.

(3)  The output of such periodic review shall be reported to the TPB along with any proposed actions.

(4)  hubco should ensure that its proposals for updating the supply chain (whether by removing, replacing or adding supply chain partners) take into account the whole range of consultants, contractors and suppliers who can demonstrate an ability to meet the requirements imposed under this Agreement in relation to the Territory.

(5)  The review and updating of the supply chain (whether by removing, replacing or adding supply chain partners) from time to time, shall be undertaken in a transparent and auditable manner with clearly identified selection criteria and evaluation methodology and so as to satisfy the TPB (under exclusion of hubco's representative) that decisions have been made on a proper, arm's length basis where hubco proposes to retain or include within the supply chain the PSDP, any C Shareholder Member or any Associate of any of hubco, the PSDP or any C Shareholder Member from time to time.

(6)  The selection of new supply chain partners shall be commensurate with the principles and guidelines set-out in paragraph 1.2.2(b)(i) above.

(7)  The selection of new supply chain partners shall ensure that innovative, sustainable and cost effective approaches, if applicable, appropriate and add value, are rewarded.