1 Definitions

In each part of this Schedule ♦ the following expressions (in addition to those specified in Schedule 1 (Definitions, Interpretation and Construction)) shall, save where the context or the express provisions of this Contract otherwise requires or admits, have the following meanings:

Agreed Abatement means:

(a) in the case of a Low Value Change [£20] indexed;

(b) in the case of a Medium Value Change [£50] indexed; and

Approval Criteria means the criteria against which any Contractor Stage 2 Response will be evaluated by the Authority and which will be specified by the Authority in the Authority Change Notice and which shall be based on:

(a) compliance with the Authority's specifications for the Change;

(b) evidencing value for money;

(d) compliance with all relevant Legislation, Guidance and Necessary Consents

Authority Change means a Change that is initiated by the Authority by submitting an Authority Change Notice to the Contractor

Authority Change Notice means a written notice submitted by the Authority requiring a Change and setting out the information specified in the relevant paragraph of this Change Protocol

Authority Stage 1 Confirmation has the meaning given in paragraph 3.2(a) of Part 4 (High Value Changes) of this Change Protocol

Authority Stage 2 Confirmation has the meaning given in paragraph 6.1(a) of Part 4 (High Value Changes) of this Change Protocol

Benchmarking Process means the process set out in paragraph 8 of Part 4 (High Value Changes) of this Change Protocol

Benchmarking Report means the report produced by the Contractor in accordance with the requirements of paragraph 8 of Part 4 (High Value Changes) (which shall, for the avoidance of doubt, include the information required by paragraph 8.2 of Part 4 (High Value Change)) of this Change Protocol

Best Value Change means a Change required by the provisions of clause ♦ (Best Value)

Capital Expenditure means any expenditure which falls to be treated as capital expenditure in accordance with generally accepted accounting principles in the UK from time to time

Catalogue of Low Value Changes and Catalogue means the schedule setting out:

(a) the prices and time periods for Low Value Changes;

(b) the Small Works Rates

as is set out in Appendix 1 to this Change Protocol, as shall be amended from time to time in accordance with paragraph 1 of Part 2 (Low Value Changes)of this Change Protocol2

Change means any change, variation, extension or reduction in the Works and/or the Facilities and/or the Services

Change Notice means an Authority Change Notice and/or Contractor Change Notice as the context shall require

Change in Project Costs means a fixed and final price for carrying out the relevant Change

Comparable Market means local authority ♦ [facilities] [projects] operated under PFI or other forms of PPP including Private Finance Transactions as defined in Regulation 16 of the Local Authorities (Capital Finance) Regulations 1997 (as amended) provided that where there are less than five (5) such [facilities] [projects] of similar content or less than three (3) contractors operating such contracts the Comparable Market shall be the market for operation of ♦ [facilities] [projects] by a private sector operator 3

Confirmation Notice means a written notice issued by the Authority pursuant to the relevant provision of this Change Protocol setting out the agreed details of the Change, including the agreed cost, method of payment and the times of its implementation [which shall be in the form set out in Appendix 4 to this Change Protocol]

Contractor Change means a Change that is initiated by the Contractor by submitting a Contractor Change Notice to the Authority

Contractor Change Notice means a written notice submitted by the Contractor requesting a change and setting out the information required by the relevant paragraph of this Change Protocol

Contractor Response means the written response of the Contractor to an Authority Change Notice which shall include the information listed in the relevant paragraph of this Change Protocol

Contractor Stage 1 Response shall have the meaning given in paragraph 2.1 of Part 4 (High Value Changes) of this Change Protocol

Contractor Stage 2 Response shall have the meaning given in paragraph 4.1 of Part 4 (High Value Changes) of this Change Protocol

Estimated Change in Project Costs means the aggregate of any estimated increased construction costs, operating costs and financing costs less the aggregate of any estimated reduced construction costs, operating costs and financing costs

High Value Changes means a Change, which is not listed in the Catalogue, and which, in the reasonable opinion of the Authority, is likely to either cost more than £[200,000]4 to implement, or require an adjustment to the Unitary Charge that is greater than [2]% of the annual Unitary Charge (as the case may be)

Independent Technical Advisor means a person who is independent of the Authority or any Contractor Party who has not less than [five (5)] years experience in PFI funded projects and expertise in pricing works and/or services of the type required by the relevant High Value Change and has relevant experience in the [♦]5 sector

Low Value Change means:

(a) works of a minor nature, having a cost, in the reasonable opinion of the Authority, not exceeding [£10,000]6 (indexed linked); or

(b) any change to the Works, having an individual cost, in the reasonable opinion of the Authority, not exceeding [£10,000] (indexed linked) and which does not effect achievement of the Programmed Completion Date; or

(c) any change or amendment (whether temporary or permanent) of the Services or any of them where the cost, in the reasonable opinion of the Authority, of the implementation does not exceed [£10,000] (indexed linked) [and does not require adjustment of the Unitary Charge]; or

(d) provision of plant or equipment by the Contractor, the cost of which (including installation), in the reasonable opinion of the Authority, does not exceed [£2,000];

and, for the avoidance of doubt, includes those Low Value Changes listed in the Catalogue of Low Value Changes

Low Value Change Request means a request for a Low Value Change [in the form set out in Appendix 3 to this Change Protocol]

Low Value Change Threshold means where the Low Value Changes in any Payment Year exceeds [♦] in number or cost in excess of the aggregate sum of [♦]7

Medium Value Changes means a Change, which is not a Low Value Change, and which, in the reasonable opinion of the Authority, is likely to either cost less than £[200,000]8 to implement, or require an adjustment to the Unitary Charge that is less than [2]3% of the annual Unitary Charge in the relevant Payment Year (as the case may be)

Medium Value Change Threshold means where the Medium Value Changes in any Payment Year exceeds [♦] in number or cost in excess of the aggregated sum of [♦]

Original Facilities means the Facilities as at the Service Commencement Date (including any Changes incorporated into the Works)

Project Management Fee means a fee in respect of project management services calculated in accordance with paragraph 2.2 of Part 4 (High Value Changes) of this Change Protocol

Reference Price means a high level price calculated by the Independent Technical Advisor which is his estimate of the cost of implementing a proposed High Value Change and which shall include and show separately the information specified in paragraph 9.3 of Part 4 (High Value Changes) of this Change Protocol

Small Works Rates means the hourly rates for specified categories of labour set out in the Catalogue

Tendering Report means a report prepared by the Contractor which shall include the information required by paragraph 7.5 of Part 4 (High Value Changes) of this Change Protocol

Whole Life Cost means, in relation to any High Value Change, the estimated and (to the extent that such information is available) the actual cost of operating and maintaining such High Value Change over its intended design life (consistent with the Contractor Response)

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1 Figures recommended by PUK – to be discussed. The Payment Mechanism will need to be amended to reflect this provision and it should also be linked to any Change Protocol Service.

2 Authorities could choose to specify what type of labour rates should be included. See the guidance accompanying this Change Protocol for how the Catalogue should be drafted and be treated as part of the competitive dialogue process.

3 To be amended/reviewed on a sector/project specific basis.

4 The values will (obviously) depend on the value of the Medium Value Changes.

5 Sector to be specified . Alternatively, this could be a person/practice named in the Contract.

6 Authority to specify or could be a bid back item. PUK recommend that this should generally have an individual cost not exceeding £10,000 indexed and are assumed not to be relevant to the Contract Period (note that in this Protocol, there can be a Low Value Change to the Works).

7 Bid Back items. However the Authority should specify minimum number/cost and request bidders to better the minimum. The Contractor may be prepared to offer a discount if the Changes are "batched" and processed at regular intervals e.g. monthly or annually. Assuming there is a Change Protocol Service, some of these costs should be part of the fee for that Service.

8 Authority to specify or could be a bid back item. This is PUK's recommended maximums.