Installation/Integration Costs

3. This is the risk that the cost of installation/integration will exceed the price estimated by the PPP/PFI contractor due, for example, to technical problems that result in additional downtime to that included by the SPV in their quote. In many PPP/PFI arrangements within the FsAST acquisition team installation and integration is undertaken by a sub-contractor of the SPV who is also a major shareholder. Where this is the case the cost risk arising from installation or integration will lie with the sub-contractor. The reason for this is that the sub-contractor will bear the cost of undertaking any additional work, and any service credits/deductions likely to arise may be flowed down by the SPV. Whether the change is a Replacement Change or an Addition Change, the cost for this risk is likely to be included in the sub-contractor element of the price (e.g. its estimate of hours required will include a contingency to cover this risk), and should not be a factor to be considered in calculating the SPV's profit level. In cases where the SPV undertakes installation or integration, this risk should be included in the cost of the work undertaken by the SPV and should not be considered in calculating the SPV profit level.