No payments should be made until the service which has been contracted is available. For example, in a water treatment project, no payments would begin until the plant has been commissioned and water of the required quality is being received, ie, no payments should be made for inputs.
The payment should only be paid to the extent that the service is available, ie, it should be proportionate to the quality or quantity of units. There should not be a fixed element which the contractor receives irrespective of performance. In principle, abatements for non-performance (or penalties) should be large enough so that the contractor's incentive to perform or to remedy performance defects is fully aligned with the government's interests.
Where future changes to the services are anticipated but not quantifiable at the point of contracting, the arrangement should allow government adequate flexibility to require, and reward, changes in the nature or volume of services to be delivered over time.
As far as possible, payment provisions should be sufficiently flexible to accommodate future expansions or additional requirements on a commercial basis without needing to negotiate a separate arrangement.