34.4  Benchmarking following Market Testing

34.4.1  Where Clause 34.1.10 applies, the Contractor shall conduct a benchmarking exercise as follows.

34.4.2  Each benchmarking exercise will be undertaken to ascertain the relative quality and competitiveness of the Market Tested Services in question.  The benchmarking exercise will be undertaken in good faith by the Contractor (and with the reasonable co-operation of the Authority) and on the basis of an objective and like for like comparison by comparing the standards and prices of the  Market Tested Services in question and the costs of providing them with the standards and prices of equivalent services and the costs of providing them in similar circumstances provided by reputable organisations possessing an appropriate degree of skill, resources, reputation and financial standing relative to the provision of the  Market Tested Services in question.

34.4.3  The Contractor will make the results of any benchmarking exercise available to the Authority by the date occurring one (1) month before the relevant Market Testing Review Date with a view to the Authority and the Contractor making the appropriate adjustments to the Unitary Charge on the basis set out in Clause 34.4.4.  The results shall indicate the extent to which (if at all) the Market Costs differ (in percentage terms) from the Latest Services Element.

34.4.4  Where the Market Costs are between ninety five percent (95%) and one hundred and five percent (105%) of the Latest Services Element, no change shall be made to the Monthly Payment or the Latest Services Element.  Where the Market Costs are less than ninety five percent (95%) or more than one hundred and five percent (105%) of the Latest Services Element or a benchmarking exercise cannot be carried out, the Parties shall adjust the Monthly Payment on the basis that if a benchmarking exercise is carried out:

(a)  the Authority will assume the risk of any agreed increase in the Monthly Payment arising as a result of the Market Costs exceeding one hundred and five percent (105%) of the Latest Services Element;

(b)  the Contractor will assume the risk of any agreed decrease in the Monthly Payment arising as a result of the Market Costs being less than ninety five percent (95%) of the Latest Services Element; and

(c)  the Latest Services Element shall be increased or decreased (as the case may be) to reflect the Market Costs,

and the Monthly Payment shall be adjusted in accordance with Clause 53 (Revision of Base Case and Custody).  Any dispute under this Clause 34.4.4 shall be determined in accordance with the Dispute Resolution Procedure.