Repetition Deduction for Unavailability

An additional escalator is provided to cover instances where the Contractor repeatedly fails to address Unavailability in the same Area of accommodation resulting through the repeated failure of one of the Availability Criterion. This does not need to be on a consecutive basis and is measured by the total number of times that the same Area is Unavailable due to the failure of the same Availability Criterion within a month.  Once Unavailability occurs on four or more occasions for the same Area during the month the Unavailability Deduction for that Area is multiplied by a factor of 1.5 to produce a Repetition Deduction. Above a level of eight failures in the same area due to the same Availability Criterion the Unavailability Deduction will be multiplied by a factor of 2 which will apply to all subsequent failures above this level within the month.

Persistent failure to meet the Availability and Performance Standards will result in Contractor Default which is covered under provisions in the Project Agreement. The risk associated with the likelihood of deductions occurring and their impact however will need to be assessed in order to determine the length of time and level of deductions that are acceptable before the Contractor is in default of their obligations.

In terms of the total risk associated from unavailability the gearing is obviously higher post the application of the repetition deduction for unavailability. This is intentional and represents the views of stakeholders at the payment mechanism workshop that the escalation should provide a more punitive means of ensuring availability is maintained in the context of an emergency service.

The following graph highlights the impact that repeat failure has on the availability of one critical Area over the course of a day. If the same availability criterion continues to fail for a whole day (i.e. over 12 Deduction Periods – assuming a two hour rectification) then the gearing for that Area would increase to 308%. If Station 1 was out for a month this would increase the gearing to 397%.