20 | Values that the Agency assigned to proposals, issues and ommissions in GeneSYS's bids that, while not in full accord with the Agency's most desired outcome, the Agency was prepared to consider |
| The Agency's estimates of the costs of material differences in GeneSyS's bids | Movement in positions on material issues between the Best and Final Offer and the Revise and Confirm offer | ||||
Issue | Invitation to | Evaluation after | Best and | Revise and |
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Consequential Issues | - | - | 5 | 0 | In its Best and Final Offer, GeneSYS submitted an altered version of the proposed contract. The consortium caveated the bid with a statement informing the Agency that the bid did not address issues that were consequential to the alterations. As part of its Revise and Confirm offer, GeneSYS stated that changes likely to affect price or risk allocation had been expressly included in the bids. | |
Access Regime | No value assigned | - | 5 | 0.5 | GeneSYS had wanted the Agency to bear more risk in circumstances where the contractor experienced difficulties gaining access to the telecommunications network. The Agency and GeneSYS agreed to prepare a protocol that would set out broad principles for the contractor's access regime, including provisions covering the contractor's entitlement to relief and compensation when unable to obtain access. | |
Change in Law | 1 | 1 | 2.5 | 0 | GeneSYS had proposed extending the definitions of changes in law that would entitle the contractor to compensation for resulting costs. The Agency agreed to some of the changes, noting in these cases that GeneSYS's definition was consistent with the then current version of the Standardisation of PFI Contracts. GeneSYS also agreed to reduce the scope of its demands. | |
Compensation Events | - | - | 5 | 1 | GeneSYS had extended the definition and application of Compensation Events. The Agency agreed to GeneSYS's request that provisions governing Compensation Events cover the full term of the contract. GeneSYS agreed that Compensation Events would not include losses flowing from affected commercial contracts. | |
Employees | - | - | 1 | 0.5 | GeneSYS wanted the Agency to indemnify the contractor in respect of pre-transfer employee claims. GeneSYS also wanted the Agency to warrant supplied employment information. The Agency refused both requests. In response, GeneSYS set out the assumptions that governed its pricing relating to transferred employees. | |
Force Majeure | No value assigned | 0 | 1 | 0.5 | GeneSYS had inserted a provision that left the Agency liable for the uninsured portion of any remedial works following a force majeure event. GeneSYS agreed to substitute the insertion with an agreement to agree approach. | |
Indemnity and Liability Limitation | 15 | 15 | 15 | 4 | GeneSYS had sought material amendments to four types of indemnities that the contractor would have to provide in favour of the Agency. The Agency accepted three of the changes. For the fourth type of indemnity, which covered third party losses, GeneSYS accepted most of the indemnities sought by the Agency. It rejected an indemnity covering reasonably foreseeable, third party consequential losses, where the third party was a party to a contract with the Agency. | |
Insurance | 5 | 5 | 4 | 0 | GeneSYS informed the Agency that obtaining firm insurance prices for anything other than relatively short periods had proved difficult. The quoted prices were therefore only indicative. The parties agreed to discuss commercial issues relating to insurance during the preferred bidder stage. | |
Intellectual Property | 2 | 2 | 1 | 1 | GeneSYS and the Agency agreed to discuss differences about Intellectual Property Rights during the preferred bidder stage. | |
Latent Defect/ Information Risk/Assets | - | - | 1 | 1 | The Agency agreed to provide GeneSYS with warranties about the type, location and quantity of existing assets. This warranty did not extend to the condition of the assets. The Agency also asked GeneSYS to submit its Revise and Confirm bid on the basis of a set of assumptions about the condition of existing assets rather than wait for GeneSYS to complete further due diligence. | |
Relief Event | 3 | 3 | 0.5 | 0.5 | The Agency accepted GeneSYS's extension of the definition of relief events. | |
Sub-contractors | No value assigned | - | 10.5 | 1 | GeneSYS had wanted the provisions that would restrict the contractor's ability to terminate and appoint sub-contractors to apply to only two sub-contractors. GeneSYS agreed that the provisions could apply to an "A-list" of sub-contractors and should the contractor wish to terminate a sub-contact with a listed sub-contractor, the Agency would not unreasonably withhold its acceptance. GeneSYS had not wanted to be constrained to payment periods for its sub-contractors of 30 working days. GeneSYS agreed to the Agency's demand for the inclusion of such a provision. | |
Termination and handback | 8 | 8 | 1 | 0 | GeneSYS and the Agency agreed to concede some ground about their respective definitions of termination events. GeneSYS did not concede ground on the calculation of compensation upon termination, which would not be less than the outstanding senior debt when termination was for anything, other than for contractor default. In the case of termination for contractor default, the Agency agreed to drop the valuation through re-tendering if the Treasury agreed. | |
Variations | 10 | 5 | 1 | 0.5 | GeneSYS secured amendments to provisions governing the variation mechanisms. The amendments affected: the means by which variations would be funded; the contractor's rights to object to variations if the execution period is judged unreasonable; and recovery of costs incurred in preparing variations that are later cancelled. GeneSYS agreed to drop a limitation on the Agency's right to reject variations proposed by the contractor. | |
Transparency of Costs | No value assigned | - | 2 | 0 | GeneSYS secured changes to the contractor's obligations to provide cost related information. The contractor would not have to provide the Agency with copies of information provided to the contractor's lenders. Also, the Agency agreed to drop its demand for access to sub-contractors' accounts. under the proposed contract, the Agency would receive breakdowns of costs and profit margins for variations and could compare the costs against those in the cost model or, when the capital cost of the variation exceeded £250,000, could instruct the contractor to put elements of the variation out to tender. | |
Miscellaneous Issues | 1 | 1 | 2.5 | 0 | GeneSYS secured an amendment that lifted the obligation to remove redundant cables from the ground where the cables were not in ducts. | |
Total | 45 | 40 | 58 | 10.5 |
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Source: The National Audit Office |
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