As described in Section 4.3.2 above, the Contractor's obligations in relation to the delivery of the Services are extensive and go well beyond the standards for which Performance Deductions or other adjustments to the Unitary Charge can be made under the Payment Mechanism. For breaches of such obligation not covered by the Payment Mechanism the Contract may provide for a termination right if the breach occurs persistently over time.
The WIDP Contract (Clause 67.4) allows for termination for Persistent Breach as one of the limbs of Contractor Default. However there is a set iterative procedure that must be followed precisely by the Authority if it wishes to enforce a termination by this route.
First, the Authority must establish that the breach has truly been persistent. In the WIDP Contract this is defined as a breach continuing for more than fourteen days or occurring more than three times in a six month period.
Secondly, the Authority must formally notify the Contractor stating that if the breach is repeated frequently or continues it may result in termination.
Thirdly, if the breach then continues for more than thirty Business Days or recurs two or more times in a six month period, then the Authority must serve a Final Warning Notice stating that if the breach continues or recurs for more than fourteen days or recurs more than a specified number of times within the next six months then the Contract may be terminated.
The Contract Management Manual should include a section on Persistent Breach that sets out the definition of a relevant breach and highlights the need to seek input from the Legal Department as soon as any consideration is given to initiating the process.