35.3  Annual Service Report and Annual Service Plan

35.3.1  Without prejudice to any other provision in this Agreement the Contractor shall, no later than the [date to be inserted] in each year of the Contract Period, at its own cost provide to the Authority a written report (the Annual Service Report) in accordance with the requirements of the Output Specification.

35.3.2  The Contractor shall upon a written request from the Authority promptly provide such written evidence or other supporting information as the Authority may reasonably require to verify and audit the information and other material contained in the Annual Service Report.

35.3.3  If, in the Authority's reasonable opinion, the provision, performance or delivery of the Services (or any part) may be more effective, efficient and economic having regard to the Annual Service Report and the Best Value Duty, then the Authority may serve a written notice upon the Contractor (a CAA Change Notice) stating the nature and timing of the changes to the provision, performance or delivery of the Services (or the relevant part) which the Authority desires.

35.3.4  The Contractor shall, within twenty (20) Business Days of the date of receipt of the CAA Change Notice, provide the Authority, at its own cost with a written statement (the Annual Service Plan) containing the Contractor's Proposals to achieve the change to the Services (or the relevant part) in accordance with the CAA Change Notice.

35.3.5  As soon as practicable after the Authority receives the Annual Service Plan, the parties shall discuss and agree the issues set out in the Annual Service Plan. In such discussions the Authority may modify the CAA Change Notice, in which case the Contractor shall, as soon as practicable, and in any event not more than twenty (20) Business Days after the receipt of such modification, notify the Authority of any consequential changes to the Annual Service Plan.

35.3.6  If the parties cannot agree on the contents of the Annual Service Plan then the dispute will be determined in accordance with the Disputes Resolution Procedure.

35.3.7  As soon as practicable after the content of the Annual Service Plan has been agreed or otherwise determined pursuant to the Disputes Resolution Procedure the Authority shall:

(a)  confirm in writing the Annual Service Plan; or

(b)  withdraw the CAA Change Notice.

35.3.8  If the Authority either withdraws the CAA Change Notice or does not confirm the Annual Service Plan within twenty (20) Business Days of the Annual Service Plan having been agreed or otherwise determined pursuant to the Disputes Resolution Procedure, then the Annual Service Plan and the CAA Change Notice shall be deemed to have been withdrawn.

35.3.9  If the Authority confirms the Annual Service Plan then the Authority shall issue an Authority Change Notice (which shall contain the information set out in the CAA Change Notice and Annual Service Plan) and the provisions of the Change Protocol shall apply.

35.3.10  [The Contractor shall take all reasonable steps to mitigate any costs and maximise any savings arising as a consequence of a CAA Change Notice, and for the avoidance of doubt, the corresponding Authority Change Notice served pursuant to clause 35.3.9 (Annual Service Report).]