14 Payment Mechanism
| Schedule Part | Comment |
| 14 | Payment Mechanism |
| This is an amalgam of the NHS payment mechanism and some aspects of the SSSC payment mechanism and will require to be tailored to each specific project (including to take account of phased completion where applicable). It includes the following principal features: • It assumes that the Facilities will not be required to be Available 24/7 and operates Deductions on the basis of whole days rather than several sessions within a day. This can be adapted to suit the circumstances. • There are minimum Deductions for Performance Failures and for Availability Failures. • Whole Facility unavailability remains an option for Facilities where loss of key areas or more than a specific percentage of the areas in the facility renders the whole of the Facilities unusable by the Authority. The relevant criteria will be project specific. • The concept of Unavailable but Used is retained where the Authority elects to continue to occupy areas despite them not meeting the Availability Standards and the Deduction will be at 50% of the rate for Unavailability. • Deductions for Performance Failures are fixed monetary amounts at one of three levels according to the severity of the failure. • Repeated failures will incur increased Deductions • Reporting failures incur Deductions in addition to any Deduction for the original failure. • Insurance premiums, energy (NHS bodies only), rates and water charges are pass-through costs. • Temporary rectification is potentially acceptable to rectify Service failures. Authorities must contact SFT for further guidance in calibrating the Payment Mechanism / Service Level Specification. | |
| | Core Times These should be the times during which the Facilities are generally expected to be in use. It may be that different Core Times apply to different Functional Areas within the Facilities (e.g. limited to sports facilities at a school at weekends). See comments below for the implications this will have in relation to the Service Unit Rate. External Utility Failure No relief for External Utility Failure should be required where the SPV is required to provide back-up arrangements and so this definition may require amendment on a project by project basis. Logged Rectification Time & Logged Report Time The drafting in these definitions should be aligned with the Service Level Specification requirements for record keeping in the event of Helpdesk system failure. Rectification Period The drafting assumes that Service Events reported outside Core Times will be relatively rare and will generally be of a type that requires the SPV to Respond by attending and making safe. Rectification Periods will, therefore, only begin at the start of the next Core Time. If an Authority wishes a higher level of service so that Rectification Periods are the same irrespective of when the Logged Report Time it should evaluate the costs and benefits of that requirement. Service Unit Rate If a single set of Core Times applies to the whole of the Facilities, then the SUR for a Contract Year is the Annual Service Payment for that Contract Year divided by the product of multiplying the Service Units for the Facilities and the number of Days in the relevant Contract Year. If on some days only some Functional Areas have Core Times (such as sports facilities at a school at weekends) the SUR should be calculated using TAGSUF. The SFT can supply a simple model to assist with this calculation. It must remembered that SUR will need to be recalculated if there is a change to Core Times that affects the number of days on which only some Functional Areas have Core Times or the total GSUs of the Functional Areas on such days changes. |
| | IF The indexation factor should reflect the proportion of the Annual Service Payment that represents the indexing SPV costs. RPIo and RPIn The Authority should consider whether RPI is the most appropriate index to use. Authorities may wish to consider the application of multipliers to Deductions affecting certain Functional Areas at certain times (e.g. school halls during exam periods) in which case the standard drafting will require to be amended. |
| | The former NHS drafting on Temporary Alternative Accommodation has been omitted as unnecessary on the basis that any such arrangement is likely to be achieved through pragmatic negotiation at the time, especially given the economic test in the Business Interruption insurance. |
| Delete this paragraph if the Authority procures Energy, water and telecoms service in its own name. To be decided by the Authority on a project by project basis whether it wants to make the SPV responsible for paying Rates, and reimburse these as a Pass Through Cost or pay Rates itself Reference to malicious damage or vandalism is relevant only on projects where these risks lie with the Authority. |