6. This is the risk that the installation will take longer than estimated. There are a number of aspects associated with this. First from service credits/deductions arising from the change not being available when originally planned. Second, and more importantly, service credits/deductions arising from the unavailability of the whole service. Generally it is likely that these risks will be at least partially mitigated by the contractor:
• building some contingency into the downtime agreed with the MOD;
• agreeing a period of grace under which no service credits/deductions will be applied following initial installation;
• flowing down some or all of the risk down to the sub-contractor(s);
• include a contingency in the price based on a calculation of the number of service credits/deductions that may arise (any such approach would require careful scrutiny by the MOD to ensure additional costs could be justified).
7. Alternatively the contractor may prefer to cover the risk of additional service credits/deductions through an element of the SPV profit. Therefore whether the change is a Replacement Change or an Addition Change the cost for this risk may be built into the cost build up or be an element for consideration when calculating the SPV profit level.