Under the WIDP Contract (Clause 20), if the Contractor anticipates that the Acceptance Test Certificate will not be issued by the Planned Services Commencement Date, the Contractor must notify the Authority of the reason for the (likely) delay and its view of the likely effect of the delay in terms of the Acceptance Test Certificate, factoring in the Contractor's duty to mitigate the effects of the delay under Clause 20.3. The Authority can then ask for further information relating to the delay. Assuming the Contractor gave proper notice of the delay at the outset, the WIDP Contract (Clause 20.4) brings into play the provisions relating to Compensation Events, Relief Events or Force Majeure Events as appropriate.
Until commissioning is completed the Contractor will not be entitled to the full Unitary Charge and the Authority will not have its waste treated in the way envisaged and alternative arrangements will be needed for the treatment of at least some of its residual waste. The Contract will specify whether it is the Authority or the Contractor which is responsible for finding an alternative disposal solution during the period of delay.
If it is the Authority's responsibility the Contract Manager will need to implement the contingency plan that should have been developed during the planning/construction period. This is likely to involve the extension of an existing Contract in the short-term but if the delay is prolonged the Authority may need to procure an entirely new interim service.
If the cost of the alternative solution is more than would have been payable to the Contractor had the Services commenced on time and the Contract provides for liquidated damages to be payable in this scenario the Contract Manager should ensure that these contractual provisions are enforced.
If it is the Contractor's responsibility for implementing a contingency plan then the Authority is still likely to be liable to make a payment to the Contractor. The Contract Manager should take care to check that the payment provisions have been applied correctly in this scenario.
The Contract Manager should also be mindful that prolonged delay during the commissioning period will ultimately trigger Contractor Default28. The Contract will normally define a specific long stop date somewhere between 12 and 18 months after the planned Services Commencement Date. The Contract Manager should therefore be very familiar with the relevant element of the definition of Contractor Default and make plans in advance if commissioning proves to be problematic.
If commissioning is not completed by the longstop date and Contractor Default is triggered the Contract Manager will have a number of key issues to manage including notifying the Contract Management Board at the earliest opportunity. See Section 8 for further details.
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28 Before Contractor Default is triggered it is highly likely that the construction subcontractor will have defaulted under its contract with the Contractor. At this stage the Contractor will have to decide whether to terminate the construction subcontract or possibly to re-negotiate the terms of the sub-contract. Under the WIDP Contract the subcontract falls within the definition of Ancillary Documents and hence under Clause 91 any costs incurred by the Contractor in amending the subcontract should be borne by the Contractor.