4  Benchmarking Report

4.1  The Benchmark Consultant shall determine the Adjustment Amount taking into account the terms of reference and the provisions of this Part 2.

4.2  The Benchmark Consultant shall provide the Income Benchmarking Report as soon as is reasonably practicable and, in any event, within not more than three (3) months of his appointment  and shall deliver a copy of the Income Benchmarking Report to each of the Authority and the Contractor.

4.3  The Benchmark Consultant shall provide in the Income Benchmarking Report full supporting evidence of the assumptions, source of market pricing information and conclusions reached, including:

4.3.1  the proposed Adjustment Amount showing anticipated Leisure Operator Income, Related Operating Costs and the net profit or net loss to the [Contractor] [Leisure Operator] separately;

4.3.2  the methodology and all assumptions by which the Adjustment Amount was determined;

4.3.3  assumptions made in respect of the Comparable Market;

4.3.4  how the representations made by each Party have been taken into account in determining the Adjustment;

4.3.5  full evidence to support the difference between the Leisure Operator Income shown in the Leisure Operator's Base Trading Account and the actual Leisure Operator Income during the Income Benchmarking Period;

4.3.6  evidence in support of each of the criteria used to determine the Adjustment Amount;

4.3.7  full details of sources of information used in establishing the Adjustment Amount;  

4.3.8  in respect of each component of the Adjustment Amount a breakdown of how each is comprised;

4.3.9  costs of the Leisure Operator's staff including management (but not the Contractor) during the Income Benchmarking Period and anticipated costs in the period up to the next Income Benchmarking Date;

4.3.10  details of the Leisure Operator's management and head office overhead costs during the Income Benchmarking Period and anticipated costs in the period up to the next Income Benchmarking Date;

4.3.11  any efficiencies and innovations in accordance with Good Industry Practice, and Sport England Guidance relevant to the delivery of the Leisure Service at the Facility that shall be taken by the Leisure Operator;

4.3.12  any changes to the Services Specification and/or the Service Delivery Plans and/or the Authority's Pricing Requirements any/or any part of this Agreement which need to be made to reflect the Adjustment Amount; and

4.3.13  such other details as the Parties may agree when appointing and instructing the Benchmark Consultant.

4.4  Either Party may within twenty (20) Business Days of receiving the Income Benchmarking Report, serve notice on the other Party specifying either:

4.4.1  it agrees with the Income Benchmarking Report and paragraph of this Part 5 of this Schedule shall apply; or

4.4.2  it disagrees with the Income Benchmarking Report (or any part of it), in which case paragraph 4.6 shall apply.  

4.5  In the event that neither Party issues a notice pursuant to paragraph 4.4 of this Part 2 (unless such period is extended by agreement) the Parties shall be deemed to have approved the Income Benchmarking Report and paragraph 1 of Part 4 of this Schedule shall apply.

4.6  If paragraph 3.7 or paragraph 4.4.2 of this Part 2 applies, the Parties shall meet as soon as practicable (and where paragraph 4.4.2 of this Part 2 applies, in any event within five (5) Business Days of receipt of a notice pursuant to paragraph 4.4 of this Part 2) and negotiate in good faith to agree the appropriate Adjustment Amount within thirty (30) Business Days of the first meeting.  

4.7  If the Parties are unable to agree an appropriate Adjustment Amount or (as an the case may be) the contents of an appropriate Authority Notice of Change the effect of which would be to mitigate the negative or adverse implications to both Parties of any adjustment to the Unitary Charge which would otherwise result from the Income Benchmarking Process and/or any other change to this Agreement that may be required, then the matter shall be submitted to the Dispute Resolution Procedure and (for the purposes of this paragraph 4.7) the Adjudicator shall determine the Dispute in accordance with the provisions of this Part 2.  Provided that nothing will prevent the Parties from agreeing that a Market Test be carried out pursuant to Part 3 of this Schedule.

4.8  Subject to paragraph 2.7.1 of this Part 2, the Parties shall bear their own costs, fees and expenses associated with the preparation, review and analysis of the Benchmarking Procedure Provided always that the Benchmark Consultant shall be paid his reasonable and proper costs in connection with the carrying out of his duties pursuant to the terms of his appointment and (subject to paragraph 2.7.1 of this Part 2) such costs shall be borne equally between the Parties.