7.2.1 The design, construction, integration, installation, testing, maintenance and ultimate performance of any asset procured or developed for the purposes of meeting the requirements of the output specification are all the Contractor's responsibility and the Authority should not (save in exceptional circumstances) take any responsibility for this risk. Correspondingly, the Contractor should be afforded the freedom to manage its activities without interference from the Authority. The Contractor will however have a role in liaising with any Authority Service Provider and in developing an Interface Protocol with the Authority, any Authority Service Provider and the Contractor regarding co-operation, liaison and access between the Authority Service Provider and the Contractor and/or Contractor Related Parties and commissioning of the Facility between Handover and the Service Commencement Date (see Section 7.10 (Interface) below). It is the Contractor's risk whether the design and development it has carried out and the operational procedures it has put in place are capable of satisfying the Authority's service requirements. The Authority should not, save in exceptional circumstances (for example, those giving rise to Authority step-in (see Section 18 (Authority Step-In)), agree to any role before or following Handover which involves the Authority taking back any part of the Contractor's risk. In this context, the issues referred to in Section 7.2.2 are important.
7.2.2 The Authority's role prior to signature of the Contract includes:
• defining the output requirements and any constraints within which the output requirements must be achieved;
• reviewing the Contractor's proposals for achieving the outputs in terms of approach, methods, resources, timetable, management and organisation (including design, maintenance and operational procedures and method statements);
• negotiating and agreeing with the Contractor all contractual terms, including the procedure for either party proposing and implementing a change in Service (see Section 11 (Change in Service)), the consequences of a failure to meet the Handover Date (see Section 8 (Late Service Commencement)); and commissioning during the Handover Period, and the procedure for accepting Service Commencement (see Section 7.8 (Handover, Commissioning, Mobilisation, Acceptance and Service Commencement));
• reviewing, negotiating and agreeing an Interface Protocol with the Contractor In accordance with the principle outlined in Section 7.2.1; and
• ensuring that the Contractor's basic design proposal is incorporated into the Contract (see Section 7.4 (Submission of Designs and Information to the Authority)).
The Authority should not however confirm to the Contractor that the Contractor's proposals will meet the Works and Service requirement. In practice, however, the Authority should be confident before signing the Contract that the Contractor's proposals (including method statements) will be capable of delivering the Works and Service once fully developed and implemented.5
7.2.3 The Authority's role after signature of the Contract and prior to Service Commencement will normally include:
• reviewing and commenting upon the Contractor's designs, maintenance and operational procedures and method statements as they are developed (see Section 7.4 (Submission of Designs and Information to the Authority));
• viewing and observing tests of any equipment being developed;
• administering the agreed process for either the Contractor or itself to propose and implement changes to the output requirements, constraints on inputs or the Contractor's proposals (see Sections 7.5 (Quality Management Systems) and 11 (Change in Service));
• following the agreed procedure by which the Contractor demonstrates to the Authority that Handover can take place (to allow for a commissioning / testing period) and thereafter that Service Commencement can take place (see Section 7.8 (Handover, Commissioning, Mobilisation, Acceptance and Service Commencement));
• liaising with any Authority Service Provider and operating relevant sections of the Interface Protocol relating to Service Commencement;
• following the agreed procedure in relation to a failure to meet the Handover Date and/or Service Commencement Date and agreeing with the Contractor the measures to be taken and the financial consequences (see Sections 8 (Late Service Commencement) and 15 (Supervening Events)); and
• auditing the Contractor's activities in accordance with an acceptable Quality Management Systems regime (see Section 7.5 (Quality Management Systems)).
7.2.4 The Authority should require enough management information to be reassured that the delivery timetable is on track and any overriding safety issues are being satisfactorily addressed. This will involve having access to the Site. The Authority should also require formal notice of the expected Handover Date and subsequent Service Commencement Date and the grant of access to the Facility to the Authority Service Provider from the Handover Date to ensure commissioning and readiness of delivery of the Soft Services. For a project such as a school this commissioning period may be in the region of 4 weeks.
7.2.5 The principle outlined in Section 7.2.1 must be upheld to ensure the appropriate risk transfer during the pre-Service Commencement period. The Authority should not, for example, retain any rights to approve or accept interim stages such as practical completion of construction or detailed design prior to the Handover Date, as this may dilute any risk transfer. This is different to the point made in Section 7.8.4 (Handover) in relation to accepting Service Commencement before all construction requirements are completed. In the case of certain defence projects involving very specialised or necessarily subjective requirements there may be a case for the Authority to accept some aspects of the design by agreeing a methodology for meeting such requirements in the Contract (see Section 7.8.2 (Handover)). This should only be contemplated where transfer of all aspects of the design risk would clearly not offer the best value for money.
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5 The Department of Health has issued guidance on how NHS Trusts should deal with design sign-off on PFI Projects (see The Design Development Protocol for PFI Schemes - Jan 2001).