In the event the Contractor fails to meet a Performance Standard (after due allowance for the rectification period) then this should attract a Performance Deduction. The level of deduction will depend on the relative importance of the Performance Standard. The rectification period for each Performance Standard should be reviewed by the Authority together with the applicable Performance Deduction and set at a level that reflects the importance attached to the particular Performance Standard.
The Performance Deduction allocated to each category should ensure the level of overall deductions through the Payment Mechanism for different levels of performance are adequate to incentivise the Contractor to promptly rectify the failure without being punitive.