3  Accrual of Project Network Parts

3.1  Where the Authority requires the Service Provider to accept into the scope of the Service a Proposed Accruable Project Network Part the procedure set out in this paragraph 3 shall apply.   

3.2  The Authority, shall provide to the Service Provider written notice (an Accrual Notice) including the following information:

(a)  that the Authority requires the Accrual of the Proposed Accruable Project Network Part(s);

(b)  the identity of the parties involved;

(c)  if the Proposed Accruable Project Network Part(s) includes a Road Section Length, which category it belongs to;   

(d)  the nature, location and extent of the works and a description of the Proposed Accruable Project Network Part(s);

(e)  when "as-built" plans of the Proposed Accruable Project Network Part(s) will be available to the Service Provider;

(f)  substantial completion certificates (where available and relevant);

(g)  details of any Underground Apparatus (including cable distribution networks) forming part of the Proposed Accruable Project Network Part(s) intended to be taken over by the Service Provider;

(h)  information concerning any defects liability period in respect of the Proposed Accruable Project Network Part(s) together with any relevant snagging list;  

(i)  whether the Authority considers that any Project Network Part(s) do not comply with the Output Specification (including identification of any Category 1 Defect);

(j)  if paragraph 3.2(i) applies, that the Authority:

(i)  requires the Service Provider to undertake works to any Proposed Accruable Project Network Part(s) so that they comply with the Output Specification and any Category 1 Defects are rectified, setting out a reasonable period for undertaking such works having regard to the nature and complexity of such works; or

(ii)  shall undertake (or shall procure) the necessary works to the Proposed Accruable Project Network Part(s) so that they comply with the Output Specification and any Category 1 Defects are rectified, setting out a date by which such works shall be completed; or

(iii)  requires such Proposed Accruable Project Network Part(s) to be deemed to comply with specific paragraphs of the Output Specification for the remainder of the Contract Period in which case specify which paragraphs of the Output Specification the Proposed Accruable Project Network Parts shall be deemed to comply with and whether any relief should be provided from any other obligations on the Service Provider under this Contract in respect of proposed works to be carried out pursuant to paragraph 3.2(j)(i) or 3.2(j)(ii) until the date on which the works are completed;

(k)  whether the Authority considers there to be an appropriate Y value, applicable to the Proposed Accruable Project Network Part(s); and

(l)  if the Proposed Accruable Project Network Part(s) includes Powered Apparatus, the electrical test certificates for such Proposed Accruable Project Network Part or Project Network Part(s).

3.3  The Service Provider shall, within [ten (10)] Business Days of receipt of the Accrual Notice, inspect the Proposed Accruable Project Network Part(s) and, within [five (5)] Business Days of such inspection, shall serve a written notice on the Authority (a Accrual Confirmation Notice) stating that the Service Provider:

(a)  accepts the Accrual Notice and in particular considers that the Proposed Accruable Project Network Part(s) meet the standard referred to in the Accrual Notice and where the Authority requires the Service Provider to carry out works, that the period for carrying out such works is reasonable; or

(b)  does not agree with the contents of the Accrual Notice, in which case, the Service Provider shall submit to the Authority written proposed amendments to the Accrual Notice.

3.4  If the Service Provider fails to give written notice within the time period specified in paragraph 3.3 then the Service Provider shall be deemed to have accepted the Accrual Notice without amendment.

3.5  If the Authority does not agree the contents of the Accrual Confirmation Notice, the parties shall meet within ten (10) Business Days to discuss and agree the appropriate works and/or period and/or relief that should be provided to the Service Provider.  If the parties cannot agree the contents of the Accrual Confirmation Notice within [♦] Business Days then either party may refer the matter to the Dispute Resolution Procedure.  Upon agreement or determination of all matters referred to in the Accrual Notice, the Service Provider shall issue a revised Accrual Confirmation Notice.

3.6  Upon issue of the agreed Accrual Confirmation Notice:

(a)  the relevant party shall undertake (or shall procure the undertaking) of the necessary works to the Proposed Accruable Project Network Part(s) within the agreed periods, so that they meet the Output Specification and all Category 1 Defects are rectified;

(b)  the party carrying out the works referred to in paragraph 3.6(a) shall notify the other party when it considers the works have been satisfactorily completed and the other party shall inspect such works;

(c)  where, after an inspection, the relevant party does not consider the Proposed Accruable Project Network Part(s) complies with the Output Specification /or all Category 1 Defects have been rectified), then written notice of the additional works required will be given and the relevant party shall undertake any works necessary in order that the Proposed Accruable Project Network Part(s) comply with the Output Specification; and

(d)  the relevant party shall notify the other party within five (5) Business Days of becoming satisfied that the Project Network Parts meet the Output Specification and any Category 1 Defect has been rectified.

3.7  The Authority shall pay the Service Provider for any works carried out as specified in the Accrual Confirmation Notice in accordance with the rates set out in the Catalogue of Low Value Changes and where no applicable rates are included in the Catalogue of Low Value Changes, paragraph 2.2 of Part 2 of the Change Protocol (irrespective of whether such payment exceeds the amounts specified in the definition of a Low Value Change).  The Service Provider shall, following completion of such works, notify the Authority of the amount calculated in accordance with this paragraph 3.7.  The Service Provider shall include the agreed amount in the next Draft Monthly Monitoring Report following completion of such works.

3.8  From the Accrual Date:

(a)  the Proposed Accruable Project Network Part(s) shall become Accrued and the Service Provider shall, subject to any provision to the contrary in the Accrual Confirmation Notice, provide the Service to such Project Network Part(s) and the risk in such Accrued Project Network Part(s) shall transfer to the Service Provider from such date;

(b)  the Service Provider shall update the Management Information System with information provided by the Authority or otherwise received by it in accordance with those timescales set out in Part [♦] of the Output Specification;

(c)  the Service Provider shall revise the Forecast Energy Consumption in accordance with paragraph [♦] of the Payment Mechanism where any relevant Project Network Part(s) are Powered Apparatus; and

(d)  the Authority shall revise the Monthly Unitary Charge in accordance with paragraph 5 of this Schedule 14.

3.9  The Authority shall use reasonable endeavours to procure and transfer or assign to the Service Provider or any Service Provider Party the benefit of any warranties or guarantees provided to it by third parties in relation to any Accrued Project Network Part(s) provided that the Authority shall not be obliged to use reasonable endeavours where to do so would require the Authority to incur material expenditure and/or where the Authority is not permitted to assign or transfer the warranty or guarantee pursuant to the terms and conditions therein.