(a) The Risk or Reward Regime is separated into two components, namely:
(1) the cost component - AOC underrun or overrun (which may result in a Gainshare Amount or Painshare Amount); and
(2) the non-cost component - KRA and Performance Modifier performance (which may result in a Performance Reward Amount or Performance Liability Amount).
(b) This Schedule sets out the general principles as to the manner in which the above components of the Risk or Reward Regime are to operate. Further details and matters in respect of the Risk or Reward Regime are set out in the Project Proposal.
Guidance Note - Prior to the payment of any Gainshare Amount by the Project Owner, paragraph (c) below requires the NOPs to provide details of the cost savings against the TOC, and to demonstrate to the Project Owner how these cost savings have been achieved. This mechanism is not intended to allow the Project Owner to withhold or delay the payment of Gainshare Amounts to which the NOPs are entitled. Rather, the clause has been included to ensure that the Project Owner is able to satisfy standards of public sector accountability, and to meet the Auditor-General's requirements for the expenditure of public monies. |
(c) The NOPs acknowledge and agree that:
(1) there will be no payment of any Gainshare Amount under this Agreement at any time unless the NOPs can demonstrate to the Project Owner that the AOC underrun has been achieved by performing the Works in accordance with the Alliance Charter and otherwise in accordance with this Agreement and not as a result of an over-estimation of the cost of performing the Works when setting the TOC. In demonstrating the matters set out in this clause 1(c)(1) of this Schedule, the NOPs must submit a report to the Project Owner at each time that any Gainshare Amount is calculated to be payable under this Agreement which:
(A) details each of the cost savings which have achieved by the NOPs against the AOC;
(B) provides reasoning as to how the cost savings have been achieved by the NOPs and could not have otherwise been identified as part of the development of the TOC;
(C) provides evidence that the NOPs, in achieving the cost savings, performed the Works in accordance with the Alliance Charter and otherwise in accordance with this Agreement; and
(D) otherwise meets the requirements of the guidelines set out in the Project Proposal for demonstrating the matters set out in this clause 1(c)(1) of this Schedule; and
(2) there will be no payment of any Performance Reward Amount to the NOPs under this Agreement at any time unless the NOPs can demonstrate to the Project Owner that the Performance Reward Amount has been calculated to reflect Stretch Performance against the KRAs under this Agreement, and not simply MCOS Performance against the KRAs. In demonstrating the matters set out in this clause 1(c)(2) of this Schedule, the NOPs must submit a report to the Project Owner at each time that any Performance Reward Amount is calculated to be payable to the NOPs under this Agreement which meets the requirements of the guidelines set out in the Project Proposal for demonstrating the matters set out in this clause 1(c)(2) of this Schedule; and
(3) if the NOPs are unable to demonstrate the matters set out in clauses 1(c)(1) and 1(c)(2) of this Schedule, then the Project Owner will be entitled to adjust the payment of any Gainshare Amount or Performance Reward Amount under this Agreement to reflect the principles set out in those clauses.