34.1  Market Testing Procedure

The Authority shall, other than where Clause 34.2 applies, consider which of the Market Tested Services shall be subject to Market Testing pursuant to the remainder of this Clause 34 and shall inform the Contractor at least seven (7) months prior to each Market Testing Review Date of its decision.  Any Market Tested Service not subject to Market Testing shall be subject to a benchmarking exercise in accordance with Clause 34.4 (Benchmarking following Market Testing).  The following procedure shall apply in relation to Market Tested Services that are to be Market Tested:

34.1.1  At least one hundred and twenty (120) Business Days before each Market Testing Review Date the Parties shall endeavour to agree:

(a)  the number and identity of prospective tenderers that will be invited to prepare and submit tenders for the Market Tested Services in question provided that any prospective tenderer shall possess an appropriate degree of skill, resources, reputation and financial standing relative to the provision of the Market Tested Services in question (and any dispute as to the selection of a prospective tenderer shall be determined in accordance with the Dispute Resolution Procedure);

(b)  whether any changes are required to the relevant Market Tested Services;

(c)  whether or not an independent tender manager needs to be appointed by the Contractor to manage the tender process; and

(d)  the form and contents of the tender documents (which shall include the Service Requirements to the extent that it relates to the Market Tested Services) to be delivered to prospective tenderers (the "Tender Documents"). The Tender Documents shall specify that (i) tenderers may submit tenders for all or any of the Market Tested Services and (ii) if a tenderer submits a tender for a group or groups of market tested services, then it may be required to provide all or any of the services in such group or groups.

34.1.2  No later than one hundred (100) Business Days before each Market Testing Review Date, the Contractor shall prepare and deliver to the Authority a draft market testing proposal (the "Market Testing Proposal") which shall incorporate all of the matters agreed by the Parties and shall reflect the payment structure contained in this Contract.

34.1.3  If the Parties are unable to agree any of the matters set out in the Market Testing Proposal or if the Authority reasonably considers that the Contractor has made a material error or omission in the Market Testing Proposal, the Authority may (subject to Clause 34.1.1(d)) amend the provisions of the Market Testing Proposal to accord with statutory and government requirements at its sole discretion.

34.1.4  The Contractor may upon receiving any amendments made by the Authority in accordance with Clause 34.1.3 refer the matter to the Dispute Resolution Procedure.

34.1.5  The Contractor shall manage (or procure the management by the Operating Sub-Contractor of) the Market Testing tendering process in accordance with the Market Testing Proposal agreed or determined in accordance with this Clause 34 (Market Testing).

34.1.6  The Contractor shall provide to the Authority as soon as reasonably practicable a copy of the Tender Documents and each response to the Tender Documents.

34.1.7  Subject to Clause 34.1.8, following the expiry of the tender period for the return of responses to the Tender Documents the Contractor shall determine, following consultation with the Authority, which tender to select, if any, in respect of each relevant Market Tested Services.

34.1.8  The Contractor shall by no later than seventy (70) Business Days before the Market Testing Review Date select:

(a)  in respect of tenders for the provision of an individual Market Tested Service, the most economically advantageous tender received in respect of the provision of that Market Tested Service; and

(b)  in respect of tenders for the provision of more than one (1) Market Tested Service, the most economically advantageous tender in respect of the provision of those Market Tested Services,

provided that nothing in this Clause 34.1.8 shall oblige the Contractor to accept the lowest tender.  The Contractor shall procure that the selected tenderer becomes a Sub-Contractor to it or a sub-contractor to the Operating Sub-Contractor.  Any dispute under this Clause 34.1.8 shall be determined in accordance with the Dispute Resolution Procedure.

34.1.9  The Authority shall have the right to object to the selection of a tenderer where the tenderer has committed a Prohibited Act and such tenderer shall not be selected.

34.1.10  Where in relation to any Market Tested Service there are no valid tenders, or where the only valid tender is that submitted by the current provider of the relevant Market Tested Services, the Contractor shall conduct a benchmarking exercise in accordance with Clause 34.4 (Benchmarking following Market Tendering).