Adjustment Formula

3.1  Each failure to comply with the requirements of the PS3 Performance Target A shall lead to an Adjustment to the Monthly Payment in accordance with the following formula:

An Adjustment shall be made where a failure to comply with the requirements of the PS3 Performance Target A exists in any Month irrespective of whether such failure is rectified in that Month.  Where a failure to comply with the requirements of the PS3 Performance Target A is not rectified in any Month the Hours required to calculate the Multiplier in PS3 Table 1 shall be based on the period until end of the Month for which the Adjustment is being calculated.

PS3 Table 1

3.2  For the avoidance of doubt:

(a)  if an Emergency Fault continues in to the following Month (or beyond) the Adjustment for that (and each following) Month (until the Emergency Fault is fully remedied or rendered a Non-Emergency Fault) shall be calculated as in paragraph 3.1, with the relevant M factor being calculated in accordance with PS3 Table 1 in paragraph 3.1 and the number of hours in that table continuing to be based upon the date and time when the Emergency Fault was first notified or first came to the attention of the Service Provider (that is the M factor shall continue to increase until it reaches eight (8), or remain at eight (8) and shall not be reduced by virtue of the commencement of the following Month);

(b)  each part hour will be regarded as a full hour for the purposes of this Performance Standard PS3.  Therefore if an Emergency Fault is not remedied for 1 hour 20 minutes after the specified response time, then this counts as two (2) hours for the purposes of PS3 Table 2 in paragraph 3.1.

3.3  The sum of the Adjustments for failures to comply with the requirements set out in PS3 Performance Target B shall be the total Adjustments under the Adjustment formula set out in paragraph 3.1 for the Month.11

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11 Example for PS3 Performance Target A (similar example could be used for:

31 January 2008 at 9pm – rectification period expires

1 February 2008 at 12.01am – failure corrected

Adjustment for January under PS3A = £1,100 x 4 = £4,400

- M is 4 because Adjustments are calculated on a Monthly basis and under paragraph 3.1 the Adjustment is calculated using the hours in excess of the rectification period.  The problem isn't fixed in January but the failure to comply still exists and as at the end of the Month (i.e. midnight on 31/1/08) it has existed for 3 hours which equates to a Multiplier of 4.

Adjustment for February under PS3A = £1,100 x 8 = £8,800

- M is 8 because the failure was fixed after 3 hours and 1 minute. – The M factor for Feb 2008 is calculated on the date the failure started (as per 3.2(a) – "continuing to be based upon the date and time when the Emergency Fault was first notified or first came to the attention of the Service Provider")

- Under PS3 Table 2 and paragraph 3.2(b) the hours are rounded up.  Hence the failure was for 4 hours and so the appropriate Multiplier is 8.

This may seem harsh on the Service Provider but this example shows an exceptional position for them.  The need for repeat Adjustments on a Monthly basis is driven by the need to keep some incentivisation for the Service Provider after a failure has reached the maximum multiplier.