This section is used to describe the payment mechanism and help understand its operation. The performance regime and abatement provisions should be clearly spelt out. This section may include an overview to outline its objectives and structure, and a worked example to show how the mechanism is applied.
The payment history for the project should be recorded by the contract management team in a systematic and easily retrievable form. The contract administration manual should outline how performance is to be recorded and monitored. This documentation should record the outcome of any abatement made, the rationale and any challenge by the private party. This documentation should also include a full history of occasions where abatement was triggered under the performance regime but the government party chose not to abate. In such instances, the reason for non-abatement should be documented along with communications made to the private party on this matter.
In the event abatements are applied, the manual should outline the treatment of any retained funds. This may include use within the project, the related business of the agency/department or return to the State's consolidated fund.