81.6  Refusal of Consent

The Authority shall be entitled to refuse to give consent pursuant to Clause 81.3.2 where, in the Authority's reasonable opinion:

81.6.1  the proposed new or replacement Sub-Contract does not include provisions acceptable to the Authority (acting reasonably) in respect of the assignment of the sub-contract provided  that reasonable provisions allowing an assignment for the purposes of a bona fide internal restructuring within the proposed sub-contractor's group of companies shall be deemed to be acceptable to the Authority where the assignee remains within the proposed replacement sub-contractor's group of companies and that if it ceases to be such a group company there are appropriate obligations requiring the assignee to assign the sub-contract to a company within the proposed sub-contractor's group of companies;

81.6.2  the proposed new or replacement Sub-Contract contains terms materially less advantageous158 to the Authority than the Sub-Contract or heads of terms entered into on the date of this Contract (including the quantum of breakage costs payable by the Authority on termination);

81.6.3  the proposed new or replacement Sub-Contractor does not have the competence, technical ability or sufficient financial standing to satisfactorily carry out the Works or Services proposing to be sub-let or sub-contracted to it;

81.6.4  the proposed new or replacement Sub-Contractor will not fully and properly perform all the duties, obligations or responsibilities of the Contractor to be sub-contracted to it;

81.6.5  the proposed new or replacement Sub-Contractor is not (so far as applicable to the proposed replacement sub-contractor's obligations under the replacement sub-contract) subject to provisions equivalent to those set out in the Payment Mechanism;

81.6.6  the proposed new or replacement Sub-Contractor is not being engaged in accordance with terms and conditions which are consistent with Good Industry Practice;

81.6.7  the proposed new or replacement Sub-Contractor does not have the legal capacity, power or authority to become a party to the replacement sub-contract;

81.6.8  the new or replacement Sub-Contractor will not enter into an Authority Collateral Warranty or direct agreement in the form set out in Schedule 25 (Form of Collateral Warranty);

save that, without prejudice to the provisions of Clause 81.5 (Replacement of Sub-Contractors) the Authority shall not be entitled to refuse to give such consent on the basis of Clause 81.6.5 if:

a)  the replacement of the Sub-Contractor has been necessitated on account of default on the part of a Sub-Contractor in circumstances where the Contractor is entitled to terminate the relevant Sub-Contract and it is reasonable to do so having regard to such circumstances; and

b)  the Contractor can demonstrate that it has used reasonable endeavours to ensure that the proposed replacement Sub-Contractor is (so far as it is applicable to the subcontracted services) subject to provisions equivalent to those set out in the Payment Mechanism,

provided that notwithstanding the foregoing, no replacement of any sub-contract shall have the effect of increasing the Authority's liabilities on early termination or otherwise of this Contract.

______________________________________________________________________________________

158  The scope of the term "materially less advantageous" may be defined during dialogue.  Where this is done the term should include as a minimum, (i) assignability/failure to provide a Collateral Warranty to the Authority, (ii) terms which increase the Authority's liability on a termination/Relevant Event, and (iii) terms which dilute the Authority's share of any third party income.