9.1.1 As set out in Section 7 (Services and Service Commencement), hard FM maintenance services will be the core of the Contractor Services. The Contractor will base its costings on a forecast capital replacement programme of plant, machinery, equipment, fixtures, fittings and furniture designed to maintain the building environment to the specified output standards. The Contractor will also consider the means of funding this expenditure throughout the life of the Project. The risk associated with assessing what will need replacing, and when and how much this will cost, is one that the Contractor should take and therefore the Authority should not attempt to be prescriptive in this respect.
9.1.2 The Authority will find it easier to achieve this risk transfer if it starts by expressing its service requirements as an output specification. A template hard FM maintenance services output specification is set out in Schedule 3 (Services Output Specification). Authorities are expected to adopt this specification with such amendments as are required for their sector and the specific requirements of the Project. There should be no element of "gold-plating" or "over-specification" when Authorities adapt the output specification to their sector. Bidders should be allowed to develop their own proposals which may, for example, incorporate alternative programmes of maintenance where Assets with a longer life are used or used differently. An Authority should not attempt to impose its own system of asset replacement on bidders.
9.1.3 The parties should, however, establish a planned preventative maintenance programme so that both parties know when parts of the Service are expected to be "unavailable," because of programmed maintenance, without any payment deductions being made (see Section 19.5.11 (Planned Maintenance)). The Contract should also contain a mechanism by which either party can propose reasonable alterations to the planned programme (i.e. alterations which will not adversely affect the delivery of the Service) see Clause 9.1.5 below.
9.1.4 Required drafting for a maintenance Clause is as follows:
9.1.4.1 Maintenance
The Contractor shall ensure on a continuing basis that at all times its maintenance and operating procedures are sufficient to ensure that:
(a) the Service is continuously available as required by this Contract;
(b) subject to any relaxation in standards agreed in accordance with Clause 9.1.5 (Accelerated or Deferred Maintenance), the Assets are kept in good structural and decorative order (subject to fair wear and tear) in accordance with this Contract;
(c) it can maintain the design intention of the Assets to achieve their full working life;1 and
(d) subject to any relaxation in standards agreed in accordance with Clause 9.6 (Relaxation of Handback Requirements),the Assets are handed back to the Authority on the Expiry Date in a condition complying with the requirements of this Clause.2
9.1.4.2 The Contractor shall undertake routine repair and maintenance of the Assets in accordance with a Schedule of Planned Maintenance which has been approved by the Authority.
9.1.5 As mentioned above, the Contract should include provisions enabling flexibility as to the timing of planned maintenance enabling this to be accelerated or deferred, thereby providing the Authority with flexibility over the maintenance programme. To the extent that any such deferral results in a reduction in the cost of Planned Maintenance or Lifecycle Spend, the Authority should be entitled to share in the saving or surplus, which, unless otherwise agreed the Contractor, it would receive at the end of the Contract as referred to in Section 9.2 (Lifecycle Fund).
Suitable drafting is as follows:
9.1.5 Accelerated Deferred Maintenance
(a) The Authority may, at any time, propose that the Contractor should accelerate or defer any Planned Maintenance or Lifecycle replacement by giving no less than [forty (40)] Business Days written notice to the Contractor, (unless otherwise agreed) prior to the scheduled date for carrying out such Planned Maintenance or Lifecycle replacement, which notice shall set out the time and/or periods at or during which the Authority proposes the Planned Maintenance or Lifecycle replacement to be performed. The Contractor shall, within [ten (10)] Business Days, notify the Authority of the amount of any additional reasonable costs which it will incur or save as a direct consequence of such acceleration or deferment (the "Estimated Increased or Decreased Maintenance Costs"). The Authority shall, within a further period of [ten (10)] Business Days following receipt by the Authority of notification of the amount of the Estimated Increased or Decreased Maintenance Costs, at its option, either confirm or withdraw its request to accelerate or defer the Schedule of Planned Maintenance or Lifecycle Schedule, as the case may be. The Authority shall reimburse the Contractor for the direct and reasonable costs actually incurred by the Contractor as a consequence of such acceleration or deferment up to, but not exceeding, the amount of the Estimated Increased Maintenance Costs.
(b) Where Planned Maintenance or Lifecycle replacement scheduled to be carried out in accordance with the Schedule of Planned Maintenance or Lifecycle Schedule, as the case may be, has been deferred by the Authority's Representative under this Clause 9.1.5 the Contractor shall not be treated as having failed to perform the Services on account of the condition of the Assets or any part of them from the time the Planned Maintenance or Lifecycle replacement was scheduled to have been completed until the time the deferred Planned Maintenance or Lifecycle replacement is completed, but not afterwards, provided always that the Contractor shall not be relieved from the consequences of any failure to maintain the Assets in respect of any period prior to the period for performing the particular work according to the Schedule of Planned Maintenance or Lifecycle Schedule, as the case may be.
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1 This will often be for the life of the Contract. To the extent a significantly longer period is required then this should be made clear as soon as possible in the competitive process (and certainly not after the bid documentation has been issued). If relevant, reference could be made to the output specification.
2 Paragraph (d) assumes that the Authority acquires the Assets at expiry (or has an option to) and the Contractor does not bear the residual value risk (see Section 25 (Treatment of Assets on Termination Land Expiry)).