Ultimately poor performance by the Contractor can lead to the option for the Authority to terminate the Contract for Contractor Default. The definition of Contractor Default is generally relatively lengthy and complex and may contain more than one limb relating to the non performance of the services (as well as other limbs relating to the non performance of other Contractual obligations).
The WIDP Contract definition of Contractor Default (Schedule 1) includes limbs covering the following potential service failures:
• a failure to achieve Service Commencement by a specified date;
• a breach that materially and adversely affects the performance of the Services;
• a Persistent Breach (see Section 4.5.9);
• on acceptance of more than a specified tonnage in a specified period;
• a failure to process a specified percentage of the Contract Waste accepted at the facility;
• the landfilling of more than a specified percentage of a specified limit; and
• service failures measured by the performance framework and the Payment Mechanism.
The substance and the precise form of these triggers vary significantly from project to project. The Contract Management Team should be aware of the exact wording of the Authority's Contract. WIDP therefore recommends that the exact wording in the Contract should be included in the Contract Management Manual together with the internal procedures to be adopted if it appears likely that a Contractor Default may arise. The procedures should include the process for escalating the issue within the Authority and for engaging in dialogue with the Contractor. They should also highlight the need for early liaison with the Authority's Legal Department and potentially the need for external advice. Such advice may include the need for Counsel's opinion on certain matters and the budgetary issues will also need to be addressed in the Contract Management Manual.
Further guidance in relation to Contractor Default is included in Section 8.8.