32. It is inevitable that changes will need to be made to the Contract (between the MOD and the service provider) and the Direct Agreement (between the MOD and the bank) because of the refinancing. These intrinsic changes are necessary for the refinancing to proceed and are described as 'basic amendments'. However, the investor may consider that the refinancing offers an opportunity to revisit the contract and direct agreement and make changes that are not related to the refinancing. These are known as 'additional amendments'. A separate VFM assessment should be conducted on these additional amendments and the gain split between the two parties in accordance with negotiations.
Changes to the unitary charge profile or amendments to the indexation regime should be evaluated separately to the refinancing proposal and as a rule do not represent value for money. Similarly, contract extensions should be assessed on a stand-alone basis to establish if they represent value for money.