4.4 Calculation of Performance Deductions
4.4.1 Performance Deduction Points will be awarded against the Contractor for each Service Performance Shortfall. The number of Performance Deduction Points attributable to the Service Performance Shortfall will be as set out in the Services Specification.
4.4.2 For the avoidance of doubt when awarding Performance Deduction Points, where a further Service Performance Shortfall is deemed to have occurred because Rectification is not carried out within the relevant Rectification Period, the appropriate number of Performance Deduction Points will be awarded in respect of each Service Performance shortfall that has not been rectified within the Rectification Period even though they arise from the same circumstances.
4.4.3 Performance Deduction Points will be awarded against the Contractor and a new Service Performance Shortfall will be automatically logged. The Logged Failure time for this new Service Performance Shortfall shall be the time of expiry of the previous Permanent Rectification Period. Performance Deduction Points shall continue to accrue in this manner until the Service Performance Shortfall has been permanently rectified.
4.4.4 Where the total Performance Deduction Points incurred by the Contractor in any Payment Period exceeds 20 Performance Deduction Points on an accommodation by accommodation basis in respect of that Payment Period, Performance Deduction Points shall be calculated using the following formula.15
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Where: | ||
PDm | = | the Service Failure Deductions calculated in respect of the current month; |
DPem | = | the Performance Deduction Points awarded to the Contractor in respect of a Service Performance Shortfall event (e) occurring in month (m); |
R | = | the Ratchet which may be applied, where applicable, pursuant to paragraph 5.2 based on a banded approach to the number of Performance Deduction Points incurred in the Month; |
PVy | = | the Performance Deduction Point Value in £ sterling, indexed as required, for year (y), in accordance with paragraph 44.2 below. |
4.4.5 Subject to Paragraph 5.3 the categories of Performance Point set out in the following table shall attract the number of Performance Points listed next to them. This represents the relative importance of the KPI in relation to determining the amount of potential deduction that applies to the Contractor for failure to perform.
Performance Point Category | Number of Performance Points |
Category 1 - Low Points | 1 |
Category 2 - Medium Points | 3 |
Category 3 - High Points | 5 |
4.4.6 The Performance Deduction Point Value will be £3 for each Performance Deduction Point awarded to the Contractor. The Performance Deduction Point Value will be subject to indexation on the anniversary of the Base Date for each Contract Year in accordance with the following formula and subject to the indexation provisions contained within paragraph 2.2.1 of this Schedule.
4.4.7 The Performance Deduction Point Value shall be indexed using the following formula:
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Where: | ||
PVy | = | the Performance Deduction Point Value in £ sterling, indexed as required, for month (m); |
PVb | = | the Performance Deduction Point Value in £ sterling, at the Base Date (taken as [£3]); |
RPI(X)y | = | the value of the RPI excluding mortgage repayments (RPI(X)) as at the date when the indexation is to be given effect; |
RPI(X)b | = | |
Indexation will be applied annually on the anniversary of the Base Date.
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15 This calculation will need to be carried out for each service failure during the month and then calculated in total for the month to determine whether deductions apply, based on the number of points incurred above the threshold