The Output-Based Specification as a Contract Obligation

15.  The position of the OBS in the Contract is illustrated at Figure 2 below.

Figure 2 - Contract Order of Precedence

16.  The effect of this order of precedence is that even if the Contractor successfully delivers the inputs in accordance with the Contractor's Proposal, but fails to satisfy the requirements of the OBS, then the Contractor will be in contractual default and the remedies in the PPM will apply.

17.  This is further reinforced by other provisions of the Contract whereby:

•  The Contractor warrants that his proposal will meet the requirements of the OBS;

•  The Authority does not 'accept' that the inputs have been delivered in accordance with the Contractor's proposal, but merely certifies that payment should commence when the construction and commissioning of the inputs has been completed;

•  Under the PPM, the Authority only makes payment for the delivery of outputs, rather than the provision of the inputs, and either pays on each and every occasion when the output is delivered or pays for the availability of outputs, and levies deductions (remedies) when the output is not delivered or is not available when required in accordance with the OBS.