27.3  Market Testing Procedure193

Where this Agreement requires Market Testing the following procedure shall apply:-

27.3.1  at least forty (40) weeks194 before each Market Testing Review Date the parties shall meet together as often as may be necessary in respect of all Market Tested Services to discuss and seek to agree:

(a)  the appropriate manner of advertising the Market Tested Services required and the means of identifying prospective tenderers;

(b)  the number and identity of prospective tenderers that will be invited to prepare and submit tenders for the Market Tested Services in question provided that any prospective tenderer shall possess an appropriate degree of skill, resources, reputation and financial standing relative to the provision of the Market Tested Services in question (and any dispute as to the selection of a prospective tenderer shall be determined in accordance with the Dispute Resolution Procedure);

(c)  the form and contents of the tender documents (which shall include the Output Specification to the extent that it relates to the Market Tested Services) to be delivered to prospective tenderers (the Tender Documents); and

(d)  the tender requirements, which must include:

(i)  a statement of the tender validity period;

(ii)  details of the tender evaluation criteria;

(iii)  the terms and conditions under which the Market Tested Services will be contracted;

(iv)  information relating to employees and their conditions of employment;

(v)  the information that tenderers are required to provide;

(vi)  how many tenders are required for the Market Testing to be valid; and

(vii)  whether or not an independent tender manager needs to be appointed by the Contractor to manage the tender process.

27.3.2  No later than thirty (30) Business Days before each Market Testing Review Date, the Contractor shall prepare and deliver to the Authority a draft market testing proposal (the Market Testing Proposal) describing in detail the Contractor's proposed tenderers, the Tender Documents for each of the Market Tested Services in question and the tender requirements specified in clause 27.3.1(d) (Market Testing Procedure), and the Market Testing Proposal shall incorporate all of the matters agreed by the parties and shall reflect the payment structure contained in this Agreement.

27.3.3  If the parties are unable to agree any of the matters set out in the Market Testing Proposal or if the Authority reasonably considers that the Contractor has made a material error or omission in the Market Testing Proposal, the Authority may (subject to clause 27.3.4 (Market Testing Procedure)) amend the provisions of the Market Testing Proposal to accord with statutory and government requirements at its sole discretion.

27.3.4  The Contractor may upon receiving any amendments made by the Authority in accordance with clause 27.3.3 (Market Testing Procedure) refer the matter to the Dispute Resolution Procedure.

27.3.5  The Contractor shall manage (or procure the management by the Housing Management Contractor of) the Market Testing tendering process in accordance with the Market Testing Proposal agreed or determined in accordance with this clause 27.3 (Market Testing Procedure).

27.3.6  The Contractor shall bear all of its own costs, fees and expenses associated with the Market Testing.

27.3.7  The Contractor shall provide to the Authority as soon as reasonably practicable a copy of the Tender Documents and each response to the Tender Documents.

27.3.8  Subject to clause 27.3 (Market Testing Procedure), following the expiry of the tender period for the return of responses to the Tender Documents the Contractor shall determine, following consultation with the Authority, which tender to select, if any, in respect of each relevant Market Tested Services.

27.3.9  The Contractor shall select:

(a)  in respect of tenders for the provision of an individual Market Tested Service, the most economically advantageous tender received in respect of the provision of that Market Tested Service; and

(b)  in respect of tenders for the provision of more than one (1) Market Tested Services, the most economically advantageous tender in respect of the provision of those Market Tested Services,

provided that nothing in this clause 27.3.9 (Market Testing Procedure) shall oblige the Contractor to accept the lowest tender195.

27.3.10  Any dispute under clause 27.3.9 (Market Testing Procedure) shall be determined in accordance with the Dispute Resolution Procedure.

27.3.11  The Authority shall have the right to object to the selection of a tenderer where the tenderer has committed a Prohibited Act and such tenderer shall not be selected.

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193 This clause will not be relevant for non‑ HRA projects where the Contractor owns and operates the Dwellings and also HRA projects where an RSL is the Contractor and takes the project on balance sheet (similar considerations may also apply to a special purpose company which is a subsidiary undertaking of an RSL).  

194 This may need to change on a project specific basis.

195 On a project specific basis, the Authority may wish to expressly state what is to happen if only one compliant tender is received or if no compliant tenders are received.  See the guidance on the issue set out in the procurement packs.