4 Stage 2 Approval
Development of a Full Business Case
4.1 In relation to any Stage 1 Approved Further Services, the Service Provider shall proceed regularly and diligently to develop a detailed business submission to be provided to the Authority (a Full Business Case) and shall present it to the Authority as soon as is reasonably practicable.
Liaison between the Service Provider, the Authority and relevant end users
4.2 In developing a Full Business Case the Service Provider shall continue to liaise with the Authority and relevant end users as the Authority in consultation with the Service Provider considers appropriate. The Authority shall provide to the Service Provider such information as to its requirements necessary to enable the Service Provider to submit a full and complete Full Business Case and any such other information as the Service Provider may reasonably require and shall assist the Service Provider in the development of aspects of the Full Business Case (but not where this would involve the Authority incurring additional expense). Any and all information and other input or feedback provided by the Authority to the Service Provider shall be provided without warranty pursuant to clause 39 (Exclusion of Warranty) and shall be without prejudice to the Authority's rights under this Schedule 15.
Content requirements in relation to a Full Business Case
4.3 The Service Provider shall procure that a Full Business Case shall include (but not be limited to):
(a) the estimated Capital Expenditure, including any capital replacement costs arising from the provision of the Stage 1 Approved Further Services;
(b) the estimated increase or reduction in operating expenditure relating to the provision of the Stage 1 Approved Further Services, with an analysis showing the increase or reduction in the cost of staff, consumables, sub-contracted and brought in services, after the Stage 1 Approved Further Services are implemented;
(c) any interest, expenses or other third party financing costs to be incurred as a result of implementing the Further Services;
(d) details of any estimated overhead recoveries that are anticipated after the Stage 1 Approved Further Services are implemented;
(e) the profit which the Service Provider seeks to achieve in the provision of the Stage 1 Approved Further Services, including any profit element forming any part of the overhead recoveries disclosed by reason of paragraph 4.3 (d) above; and
(f) any material changes or amendments proposed to the Agreement in respect of the Stage 1 Approved Further Services, together with the reasons for any such changes or amendments proposed.
Co-operation of the Authority
4.4 The Authority will co-operate with the Service Provider in relation to any Full Business Case being developed by the Service Provider, including (without limitation) promptly providing:
(a) written confirmation of the Target Costs and/or Authority Requirements or any change to such Target Costs;
(b) any information reasonably required by the Service Provider to enable it to satisfy the requirements of paragraph 2 or paragraph 4.3;
4.5 For the purposes of this Schedule 15, Approval Criteria means the criteria against which any Stage 1 Approved Further Services are to be judged by the Authority in determining whether it will grant Stage 2 Approval (as defined in paragraph 4.6(b)(i)). The criteria are:
(a) whether the costs of the Stage 1 Approved Further Services are within the Target Cost notified to the Service Provider by the Authority pursuant to paragraph 4.4(a);
(b) whether it has been demonstrated that the Stage 1 Approved Project provides value for money;
(c) whether the Authority, acting reasonably, is satisfied that the Full Business Case meets the Authority Requirements;
(d) whether any material changes or amendments to the Agreement as detailed pursuant to paragraph 4.3(f) are reasonably acceptable to the Authority;
(e) whether the Full Business Case contains all the information required pursuant to paragraph 4.3 (or as otherwise agreed by the parties); and
(f) whether the implementation of the Stage 1 Approved Further Services would breach any Legislation or is inconsistent with Good Industry Practice;
(g) whether the implementation of the Stage 1 Approved Further Services would cause any Consent to be revoked (or would require a new Consent required to implement the relevant change in the Services which is likely to be unobtainable);
(h) whether the implementation of the Stage 1 Approved Further Services would result in a change in the nature of the Project;
(i) whether the implementation of the Stage 1 Approved Further Services would materially and adversely affect the Service Provider's ability to deliver the Services;
(j) whether the implementation of the Stage 1 Approved Further Services would materially and adversely affect the health and safety of any person; or
(k) whether the Authority has the legal powers to require the implementation of the Stage 1 Approved Further Services.
Submission of the Full Business Case to the Authority
4.6
(a) The Service Provider shall submit the Full Business Case to the Authority. The Authority shall consider in good faith Full Business Cases put forward by the Service Provider. The Authority shall be entitled to request such reasonable information as it considers appropriate to enable it to decide whether the Full Business Case meets the Approval Criteria. The Service Provider shall reply promptly to all such requests for further information and assistance. If, acting reasonably, the Authority finds that any material aspects of the Full Business Case is unsatisfactory to it, it shall notify the Service Provider of the same and offer reasonable assistance to the Service Provider to address such deficiencies. If the Service Provider addresses such deficiencies to the Authority's satisfaction, acting reasonably, paragraph 4.6(b)(i) shall apply. If the Service Provider is unable to resolve such deficiencies to the satisfaction of the Authority (acting reasonably) paragraph 4.6(b)(ii) shall apply.
(b) As soon as reasonably practicable after the submission to it of a Full Business Case the Authority shall give written notice of whether it:
(i) approves the relevant Stage 1 Approved Further Services (in which case the Stage 1 Approved Further Services shall be referred to as having received Stage 2 Approval or as being a Stage 2 Approved Further Services or Approved Further Services as the context requires); or
(ii) rejects the Full Business :
(A) subject to sub-clause (B) 1), on the grounds that the Full Business Case in relation to the relevant Stage 1 Approved Further Services has failed to meet one or more of the Approval Criteria, in which case paragraph 4.7 shall apply;
(B)
1) because, as a result of any change to the Target Cost referred to in paragraph 3.1, the Stage 1 Approved Further Services are not in fact affordable despite the Full Business Case being within the Target Costs referred to in paragraph 3.1; or
2) otherwise on grounds other than those set out in sub-paragraph (b)(ii)(A) above,
in which case paragraph 4.8 shall apply.
If a Full Business Case is properly rejected by the Authority
4.7 Where paragraph 4.6(b)(ii)(A) applies, the Authority shall be entitled to procure the Stage 1 Approved Further Services (which are the subject matter of the rejected Full Business Case) from a third party, or not to proceed with procurement of such Stage 1 Approved Further Services. The Authority shall not be required to reimburse or compensate the Service Provider in respect of any costs incurred by it pursuant to this Schedule 15, including its costs of preparing the Draft Business Case and Full Business Case:
If a Full Business Case is improperly rejected by the Authority
4.8 Where paragraph 4.6(b)(ii)(B) or paragraph 5.2(b) applies:
(a) Subject to sub-paragraph (b), the Service Provider's reasonable costs of preparing the Draft Business Case and Full Business Case in relation to the relevant Stage 1 Approved Further Services shall be paid by the Authority.
(b) If the parties are unable to agree the amount of the costs for the purposes of sub-paragraph 4.8(a) the matter shall be resolved by reference to the Dispute Resolution Procedure.
Implementation of a Stage 2 Approved Project
4.9 In the event the Stage 1 Approved Further Services receive Stage 2 Approval then:-
(a) the Service Provider shall implement the Stage 2 Approved Further Services in accordance with the [Further Services Implementation Plan]; and
(b) the parties shall, following good faith discussions with each other agree, whether the Authority shall:
(i) make adjustments to the Payment to be effective from the date of the next payment following the agreement or determination of the [Further Services Implementation Plan] to take account of the [Further Services Cost Estimate]; or
(ii) pay a lump sum to the Service Provider as soon as reasonably practicable in settlement of the [Further Services Cost Estimate];
4.10 For the avoidance of doubt the Authority is not obliged to request that the Service Provider will provide any Further Services.