3.4  Unavailability Deduction

♦  Unavailability Deductions will be calculated with reference to the following formula. The calculation is carried out on a monthly basis according to all the Unavailability events during that month.

♦  The Unavailability Deduction shall be calculated as follows:

UDn  =  ARn x WFn x DPn x UUn x RDmx-3

where:

♦  Area Rate

The Area Rate for each year will be calculated in accordance with the following:

where:

An example of how the key metrics used to determine the Unavailability Deduction is calculated is provided as follows. This is based on the assumption that all areas require a 2 hour rectification with a potential maximum of 12 Deduction Periods per day.

If an Area with a Weighting Factor of 30 (such as a Custody Suite) is unavailable within Station 1 for 3 Deduction Periods (i.e. 6 hours being 3 deduction periods based on 2 hr rectifications) the deduction can be calculated as:

Where:

The Unavailability Deduction would therefore be equal to 30 multiplied by £2 multiplied by 3, which equals £180. The deduction for Unavailability will apply each time that a rectification period relating to the same instance of Unavailability is missed. In this example one failure to rectify within a 2 hour period would have equalled a deduction of £60, once the next two hour rectification is missed the deduction increases to £120 and then once the third rectification of two hours is missed it increases as shown to £180. In this example therefore the loss represents a deduction for a core Area being Unavailable for over six hours (based on a two hour rectification). The Contractor will also have the ability to mitigate this deduction through the other options available such as providing a Temporary Rectification or Temporary Alternative Accommodation.

The level of abatement in the example is based on a 200% gearing ratio before the application of escalation for repeat unavailability. The increase in deduction per point is factored in by dividing the area weighting by 2 (after multiplying it by 365 days and 12 deduction periods per day). This reduces the denominator thereby increasing the Area Rate by a factor of 200%.   Taking the previous example Station 1 has a total area weighting factor of 125 (being 2 areas * 30, 2 areas * 20, 1 areas * 15 and 1 areas * 10) which equals 11% of the total (i.e. 125 divided by 1,150). If Station 1 was out for a day (excluding escalation) the abatement would be £3,000. This compares with taking 11% of the £5 million per annum payment, which equals £550k and dividing by 365 days, which equals £1507. The abatement for the station therefore equals circa. 200%

It should be noted that the Area Rate will change according to the number of Areas and their weightings along with the number of rectification periods. Care should be taken to follow a methodology and logic for preparing the figure that delivers an equivalent abatement based on the example. It is also worth noting that some schemes may need to set minimum deductions for availability within an Area where the Area Rate multiplied by the weighting is deemed to be too low. This could arise where lots of Areas are defined and some of the lower weighted Areas end up having a very low abatement.