4 Contractor Stage 2 Response

4.1 Within the time period specified in the Authority Stage 1 Confirmation (or if no time is specified within sixty (60) Business Days of receipt of the Authority Stage 1 Confirmation), the Contractor shall submit a report (a Contractor Stage 2 Response) which shall where applicable, include but not be limited to the following information:

(a) (where applicable) a detailed design solution (at the minimum to RIBA Stage D);

(b) the proposed consultants, sub-contractors and suppliers which the Contractor intends to appoint to process the High Value Change;

(d) details of any impact (stoppage or changes) on the carrying out of the Works and/or the provision of the Services and in particular whether (and what) relief from compliance with obligations set out in this Contract is required, including the obligations to meet the performance regime during the implementation of the High Value Change and the duration of such relief;

(e) the proposed method of certification of any construction or operational aspects of the High Value Change if not covered by the procedures in this Contract;

(f) a detailed timetable for implementation of the High Value Change29;

(g) any surveys and investigations and associated reports that are reasonably necessary to ascertain (in relation to a High Value Change which involves the construction of additional buildings) information as to the nature, location and condition of the relevant land (including hydrological, geological, geotechnical and sub-surface conditions) together with information relating to archaeological finds, areas of archaeological, scientific or natural interest and (in relation to the refurbishment of any existing buildings) information on the condition and quality of existing structures and, in particular, the presence of any latent defects;

(h) a completed risk register showing the potential risks identified in relation to the delivery of the High Value Change the occurrence of which are capable of adversely affecting the time for completion, cost and/or quality of the Project, the probability of such risks occurring and a financial estimate of the most likely consequences of each risk occurring together with the prioritisation of all continuing risks and an action plan in respect of, and risk owners for, all risks prioritised as serious risks;

(i) any approval required from the insurers and/or the Senior Lenders together with details of the [fixed] [capped] sum for the due diligence costs incurred or to be incurred in obtaining the same;

(j) details of any third-party costs incurred in preparing the Contractor Stage 2 Response and/or to be incurred in implementing the High Value Change together with details of Authority approvals given to sums already expended and confirmation that costs to be incurred are included in the Change in Project Costs.

(k) a draft deed of amendment setting out any amendment(s) to this Contract and/or any Project Document and/or any Financing Agreement required as a result of the High Value Change;

(l) the amount of any loss of or increase in third-party revenues that may result from the High Value Change and confirmation that the effect is included in the Change in Project Costs;

(m) if requested by the Authority, details of any funding obtained and the adjustments required to the Unitary Charge together with a proposed revised financial model including the detailed price estimates;

(n) a final Change in Project Costs that result from the High Value Change, taking into account any Capital Expenditure that is required or no longer required as a result of the High Value Change, all reasonable third-party costs incurred or likely to be incurred by the Contractor and any increase or decrease in operating costs and any loss of or increase in third-party revenue that results from the High Value Change;

(o) evidence that the Contractor has used reasonable endeavours (including, where practicable and without prejudice to the provisions of paragraph 6.4, the use of competitive quotes) to oblige sub-contractors and suppliers to minimise any increase in costs and maximise any reduction in costs;

(p) a demonstration of how any Capital Expenditure to be incurred or avoided is being measured in a cost effective manner, including showing that when such expenditure is incurred, foreseeable Changes in Law at that time would be taken into account by the Contractor;

(q) a demonstration that any expenditure that has been avoided, which was anticipated to be incurred that has been affected by the High Value Change, has been taken into account in the Capital Expenditure and/or Estimated Change in Project Costs;

(r) a value for money assessment explaining why the Contractor's proposals represent value for money taking into account both the proposed Capital Expenditure and Whole Life Cost; and

(s) an explanation (together with appropriate supporting evidence) as to why the Contractor Stage 2 Response meets the Approval Criteria.

4.2 The Contractor shall also include in the Contractor Stage 2 Response the following information:

(a) if the Authority specified in the Authority Change Notice that paragraph 7 will apply, the Tendering Report;

(b) if the Authority specified in the Authority Change Notice that paragraph 8 will apply, a benchmarking report demonstrating that the unit rates for construction, lifecycle and maintenance services used to calculate the final and fixed Change in Project Costs fall within reasonable ranges compared to [benchmarks derived from the [♦ Benchmarking System]30 or (where such benchmarks are not available)] industry benchmarks obtained from [a reputable, independent source] [the Comparable Market]; or

(c) if the Authority specified in the Authority Change Notice that paragraph 9 will apply, the Reference Price with details of how the Reference Price was used to calculate the Change in Project Costs and any comments made by the Independent Technical Adviser on the Change in Project Costs.

4.3 In developing a Contractor Stage 2 Response, the Contractor shall continue to liaise with the Authority [and relevant end users (being such persons or organisations as the Authority in consultation with the Contractor considers appropriate)]31. .

4.4 Without prejudice to paragraph 4.3, the Authority shall co-operate with the Contractor in relation to any Contractor Stage 2 Response being developed by the Contractor, including (without limitation) promptly providing:

(a) written confirmation of any change to the affordability thresholds and any amendment to the Authority's requirements both as set out in the Authority Change Notice;

(b) changes to funding which the Authority receives or to the way in which funding may be applied, either or both of which may affect whether a High Value Change is affordable;

(c) any information reasonably required by the Contractor to enable the Contractor to submit a full and complete Contractor Stage 2 Response and any such other information as the Contractor may reasonably require and shall assist the Contractor in the review of any draft designs and in the development of other aspects of the Contractor Stage 2 Response (but not where this would involve the Authority incurring additional material expense); and

(d) reasonable assistance to the Contractor in relation to procurement by the Contractor of all relevant Necessary Consents

provided that any and all information and other input or feedback provided by the Authority to the Contractor shall be provided without warranty and shall be without prejudice to the Authority's rights under this Change Protocol.

4.5 The Contractor shall notify the Authority as soon as it becomes aware of any matter which may have a reasonably foreseeable material adverse effect on the viability of any High Value Change including any planning issues likely to cause a material delay in the anticipated programme for the High Value Change or material cost increases.

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29 The timetable should identify the different phases of the detailed design development, and indicate which of the deliverables will be issued in which phase, and the points at which the Contractor will require the Authority to issue any further confirmations to proceed, to trigger the activities necessary to delivery the next phase of the implementation programme.

30 Sector Specific Depends on whether there is an appropriate Benchmarking System.

31 Authority to decide whether this is appropriate on a project specific basis.