STANDARDISATION OF PF2 CONTRACTS PROVISION

SOURCE OF CHANGE WHERE RELEVANT

EXPLANATION OF HOW PROVISION HAS CHANGED THE SoPC4 POSITION

Chapter 19: Price and Payment, Availability and Performance Mechanism

Chapter 19

Policy

The price, payment and performance regime (Chapters 7, 8 and 9 of SoPC4) has been overhauled and restated with additional guidance.

Section 19.1.5 (Introduction)

Policy

A pro forma Payment Mechanism (Schedule 5) will be issued shortly and added to Guidance after consultation.

Section 19.2.1 (Features of the Payment Mechanism)

Policy

A key feature of the Payment Mechanism has been added, namely that it must be fully auditable with sufficient information provided by the Contractor to allow the Authority to validate the calculation of the monthly Unitary Charge.

Section 19.3.1 (Structuring the Payment Mechanism)

Policy

The overall approach has been changed to make it clear that a simpler mechanism that leads directly to cash deductions for failure is preferable to a complex two stage system whereby failure leads firstly to points which in turn lead to cash implications (eg once a certain number of points has been reached).

Section 19.4 (Usage-based Systems)

Policy

A presumption has been introduced against transferring usage risk unless there is a clear rationale for doing so.

Section 19.5.2 (Definition of Availability)

Policy

Changes have been made to reflect the presumption that soft FM services will be excluded from the scope of the Services.

Section 19.5.7 (Rectification of Unavailability)

Market up-date

Draws attention to the fact that the market position for deductions for Unavailable but Used areas is commonly 50% of the full unavailability deduction.

Section 19.5.10 (Enforcement)

Market up-date

A change to specify that if the Authority and Contractor disagree over whether an incident of unavailability has arisen, or whether it has been rectified, then the Authority's decision shall prevail for the purposes of calculating unavailability deductions. If this is not reflected in the calculation of the monthly Unitary Charge then the Authority is entitled to withhold payment of the amount of the relevant alleged deduction and if the Contractor so wishes it can refer the matter to Dispute Resolution.

Section 19.8 (Flexibility)

Policy

The concept of Elective Services has been introduced.

Section 19.9 (Utility Costs)

Policy

Shifts the emphasis of Utility consumption risk towards the Authority from the point two years after the buildings have been accepted and demonstrated that they exhibit required utility efficiency characteristics. The Authority should also take tariff risk.

Section 19.11 (Indexation)

Guidance on indexation (which was in SoPC4 Chapter 15 and Section 1.7.2(c)) is included here.