31.2 CONTRACTOR'S RECORDS AND PROVISION OF INFORMATION

31.2.1 Required drafting is set out below:

31.2 Contractor's Records and Provision of Information

(a) The Contractor shall:

(i) at all times maintain a full record of particulars of the costs of performing the Service, including those relating to the design, construction, maintenance, operation and finance;1

(ii) when requested by the Authority, provide any of the costs referred to in paragraph (i), including details of any funds held by the Contractor specifically to cover such costs, in such form and detail as the Authority may require;

(iii) provide such facilities as the Authority may reasonably require for its representatives to visit any place where the records are held and examine the records maintained under this Clause;2

(iv) within twenty Business Days following signature of this Contract, provide to the Authority a summary of the Contract and of the Contractor's operating procedures written in plain English to aid the Authority's management of the Contract (the "Operating Manual"), containing the following items:3

(v) update the Operating Manual within twenty Business Days of:

(A) any change to the Contract made under the Change Protocol;4

(B) any change to its operating procedures; and

(C) Service Commencement.

(vi) within twenty Business Days following Service Commencement, provide to the Authority a final and complete version of the Building Manual, the contents of the Building Manual to be to the reasonable satisfaction of the Independent Certifier and the CDM Co-ordinator.5

(b) The Contractor shall keep (and procure that the sub-contractors shall keep) books of account in accordance with best accountancy practice with respect to the Contract showing in detail:

(i) administrative overheads;

(ii) payments made to Sub-Contractors and to sub-contractors and any other operating costs;

(iii) capital and revenue expenditure;

(iv) such other items as the Authority may require to conduct cost audits for verification of cost expenditure or estimated expenditure, for the purpose of this Contract,

and the Contractor shall have (and procure that the sub-contractors shall have) the books of account evidencing the items listed in paragraphs (i) to (iv) available for inspection by the Authority (and any expert) upon reasonable notice, and shall provide a copy of these to the Authority as and when requested.

(c) The Contractor shall maintain or procure that the following are maintained:6

(i) a full record of all incidents relating to health, safety and security which occur during the term of the Contract;

(ii) full records of all maintenance procedures carried out during the term of the Contract;

(iii) full records of all staff matters including turnover, pay and disciplinary matters; and

(iv) full records of Helpdesk7 data (including providing a live link direct access)

and the Contractor shall have the items referred to in paragraphs (i) and (iv) available for inspection by the Authority upon reasonable notice, and shall provide copies of these to the Authority as and when requested.

(d) Without prejudice to any other clause of this Contract, the Contractor shall make available to the Authority free of charge (and hereby irrevocably licences the Authority to use) all Project Data that is requested by the Authority and the Contractor shall ensure that it obtains all necessary licences, permissions and consents to ensure that it can make the Project Data available to the Authority on these terms,8 and in this Clause "use" shall include the acts of copying, modifying, adapting and translating the material in question and/or incorporating them with other materials and the term "the right to use" shall be construed accordingly.

(e) The Contractor shall permit records referred to in this Clause to be examined and copied by the Controller and other representatives of the Authority, and by [the Comptroller and Auditor General and his representatives].9

(f) The records referred to in this Clause shall be retained for a period of at least [5] years after the Contractor's obligations under the Contract have come to an end.

(g) Upon termination of the Contract, and in the event that the Authority wishes to enter into another contract for the operation and management of the Project, the Contractor shall (and shall ensure that the sub-contractors will) comply with all requests of the Authority to provide information relating to the Contractor's costs of operating and maintaining the Project.

(h) The Contractor shall:

(i) provide to the Authority on 31 March, 30 June, 30 September and 31 December each year a document listing all information provided by it to the Senior Lenders during the preceding three month period and, at the request of the Authority, provide to the Authority any information provided by it to the Senior Lenders during the term of the Contract10 and any other information relating to the Project that the Authority may require including, if requested, any Technical Adviser's report;

(ii) provide to the Authority copies of its annual report and accounts within 30 days of publication;

(iii) provide to the Authority a copy of the Senior Credit Agreement at Financial Close and (as the same may be amended) within 30 days of any amendment thereto;

(iv) provide to both the Authority and HM Treasury (addressed to [HM Address to follow]) or such other address as HM Treasury may notify to the Contractor from time to time) the following information : a calculation of the equity internal rate of return (for both an actual cumulative return to the date of preparation and for the expected forecast return up to the Expiry Date) for the Project and for each of the Shareholders to be prepared using the Senior Credit Agreement Financial Model and calculated on a cash basis to include all Distributions and any other payments made to Shareholders in respect of fees. This is to be provided on each 31 March and 30 September throughout the Contract Period (or such other 6 month reporting cycle as the Parties may agree);

(v) promptly upon the occurrence of a [Financing Default]11 notify the Authority of such Financing Default;

(vi) use all reasonable endeavours to assist the Authority in its preparation of any report required by a government department, from time to time;

(vii) provide all information required by the Authority in connection with Changes ; in accordance with the provisions of the [Change Protocol] and

(viii) provide regular project reports in the Agreed Form12 in accordance with the Service Output Specification which are clearly written and include analysis of utility consumption, key performance indicators, detailed illustrations of the continuous improvement achieved and explanations of any failures suffered, planned maintenance (and associated FM unit cost information and lifecycle schedule), accompanied by appropriate graphic interpretations of the underlying performance data and including explicit links to the actual deductions to be made and any warning notices accrued in accordance with the payment mechanism.

(i) The Authority may, in the circumstances referred to in paragraph (h) above (regardless of whether the Senior Lenders have exercised any enforcement or similar rights under the Senior Financing Agreements) require the Contractor to provide an Interim Project Report13 and to attend, and use all reasonable endeavours to ensure that the Senior Lenders attend, such meetings as the Authority may convene to discuss such Interim Project Report and the circumstances giving rise to it.

(j) The obligations:

(i) contained in this clause 31.2 (Contactor's Records and Provision of Information);

(ii) contained in clauses 9.1 and 9.2 (Maintenance and Lifecycle Profile and Lifecycle Spend)

(iii) to provide a Joint Insurance Cost Report under Clause 17 (Insurance);

(iv) to provide information relating to a proposed Refinancing pursuant to clauses 28 (Refinancing);

(v) to provide ownership information pursuant to Clause 6.1 (Change in Ownership); and

(vi) to provide information pursuant to Clause 11 (Flexibility and Change)

constitute part of the Service requirements in accordance with the Services Output Specification and any breach of them by the Contractor shall be a failure in performance of the Service triggering deductions in accordance with the Payment mechanism, in addition to any Authority rights which may arise under Clause 23.2.3 (Persistent Breach).

31.2.2 It is important that the Authority, and its staff, develop a working knowledge of the Project Operations (including training from the Contractor where necessary) so that they can review the efficient working of the Project, ask for the right information, and behave as an intelligent client (see generally Section 20.1 (Contract management)). in this regard, suitable content for the Agreed Form reports referred to in Section 31.2(h) (viii) should include the following categories:

1.0 PERFORMANCE MONITORING / HELPDESK CALLS IN MONTH

1.1 Summary of helpdesk calls in period

1.2 Measurement of performance against KPIs

1.3 Helpdesk performance

1.4 Details of any recurring helpdesk calls where further action is required

1.5 Details of defects reported in period

2.0 PLANNED MAINTENANCE

2.1 Summary of PM carried out in period

2.2 Future maintenance for discussion / agreement

2.3 Maintenance plans

3.0 LIFECYCLE

3.1 [5] year lifecycle planned work / spend

3.2 Lifecycle progress against agreed plan

3.3 Lifecycle reconciliation

4.0 UTILITIES / ENERGY

4.1 Utilities Consumption - Summary

4.2 Energy Targets review

4.3 Energy initiatives for discussion

5.0 QUALITY MANAGEMENT

5.1 Audits / Inspections

5.2 Supply Chain Reviews

6.0 CONTRACT MANAGEMENT

6.1 FM Personnel changes / training

6.2 Annual Service Report

6.3 Small Works / Graffiti rates

6.4 Customer Satisfaction Survey

6.5 Continuous improvement initiatives for discussion

6.6 Spares being held on site

7.0 HEALTH & SAFETY

7.1 Accidents in period

7.2 Accidents within Contract year

7.3 Health & Safety updates

7.4 Health & Safety review

8.0 FINANCIALS

8.1 Performance deductions in period

8.2 Unavailability deductions in period

8.3 Payment notices / invoices raised in period

8.4 Variation raised / closed in period

8.5 Operating costs in the period

APPENDICES

1 Minutes from last meeting

2 KPI measurements

3 Helpdesk performance

4 Defect feedback report

5 Energy / utility reports

6 Schedule of FM deliverables

31.2.3 Suitable drafting for definitions used above are as follows:

"Technical Adviser"

means any adviser appointed by the Senior Lenders for the purposes of providing technical support or reports.

"Project Data"

means :

(a) all Design Data; and

(b) any other materials, documents or data acquired or brought into existence or used in relation to the Works, the Services or this Contract;14

in each case that is used or created by the Contractor or any Contractor Related Party for the purpose of the provision of the Works or Services or otherwise for this Contract;

"Design Data"

means all drawings, reports, documents, plans, software, formulae, calculations and other data relating to the design, construction, testing, maintenance, or operation of the Facilities.15

"Senior Credit Agreement Financial Model"

means the [Financial Model]16 as defined in the Senior Credit Agreement as the same may be updated from time to time in accordance with the provisions of the Senior Credit Agreement (provided always that such model shall continue on the same basis after the Senior Debt has been repaid until the end of the Contract Period;

31.2.4 If the Contract includes wording to the effect that rights under the Contract may not be enforceable by any person who is not a party to the contract, it is necessary to disapply this prohibition to HM Treasury so that HM Treasury can enforce its rights to receive IRR information from the Contractor pursuant to Clause 31.2 (h) (iv) (Provision of Information). In such cases the following would be required drafting:

31.2 Third Party Rights

Save in respect of HM Treasury's rights pursuant to Clause 31.2 (h)(iv) of this Contract [ + refer to any other clause in the Contract for the Act to be disapplied from as relevant +] no term of this Contract is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Contract. This Clause does not affect any right or remedy of any person that exists or is available otherwise than pursuant to that Act.

____________________________________________________________________________________________

1 The records should include details of any commitments made by the Contractor for future expenditure and details of any funds held by the Contractor.

2 See Section 18.5 (Rights of Access).

3 Further guidance is available for local authorities at the following link: http://www.partnershipsuk.org.uk/uploads/documents/OTF4ps_ContractManagers_guide.pdf. Authorities may add to the table.

4 Definition will be needed

5 Definitions of Building Manual, Independent Certifier and CDM Co-ordinator will be needed.

6 Other items may be needed depending on the project.

7 A definition of Helpdesk will be needed.

8 See Section 33.3 (Ownership and Licensing of IP) for guidance on whether or not this license should be limited to "Approved Purposes", or unqualified. If it should be limited, the following wording, is suitable drafting for insertion above : " for the purposes of:

(i) the Authority's performance of its [insert relevant statutory purposes and functions] and/or

(ii) the Authority's duties under this Contract; and/or

(iii) the provision of the Authority Services; and/or

(iv) following termination of this Contract, the design or construction of the Facilities , the operation, maintenance or improvement of the Facilities and/or the provision of works and/or services the same as or similar to the Works and/or Services, (together, the Approved Purposes)".

If the Project Data is critical to the Authority, it may be more appropriate for the Contractor to assign the Project Data and related IPR to the Authority absolutely with full title guarantee. Further, if IP is critical to the Authority it may wish to ask for a copy of all Contractor Materials and Third Party Materials in the Contractor's possession or control. See generally Section 33.2 (Intellectual Property Rights, Definitions)

9 Local authorities and Scotland have their own equivalent bodies.

10 This enables financial information such as audited accounts to be obtained. Alternatively, the precise financial information required can be listed.

11 This should be defined by reference to the borrower defaults under the Senior Financing Agreements (and applies whether or not the Senior Lenders choose to accelerate their loan). Please note that this obligation is additional to the obligations of the Agent under clause 11 (d) of the Funders' Direct Agreement (see Section 26.6).

12 An indication form of project report is set out at Section 31.2.2

13 The Authority should insert a definition of Interim Project Report, setting out in this the broad headings and issues which it requires it to cover.

14 See Footnote 8 above

15 See Footnote 8 above.

16 Insert here reference to the Senior Lender's financial model as defined in the Senior Credit Agreement