Discussion

In the majority of cases contracts can be let in the confidence that the requirement for the services being procured is robust and, within the limits of what is allowable under the change control process, will remain valid over the full contract term. It is however in the nature of the public sector that relatively sudden change can occur either in the way that government is organised or in its policy priorities.  Such changes can be partly or totally outside the influence of the contracting authority and can fundamentally change or remove the requirement for contracted services. Where the situation is volatile (e.g. an election is imminent or a relevant extant policy is under review), the Authority may feel that it needs additional termination rights to mitigate the risk that in the event of any such change, taxpayers' money is wasted continuing to pay for services that are no longer required.

Provisions to consider

Provision and reference

Considerations

Authority termination right for convenience

See discussion in section 5.A above.

Users should read Section 3 of "A negotiating guide for the public sector", published by OGC in March 2010 with support from Partnerships UK and Intellect.

Compensation on Termination

See discussion in Section 5.A above.