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NETWORK RAIL 21 Network Rail Project Alliance Agreement [brief description] Agreement Number: [Insert] VERSION 1.1
Transcript of NETWORK RAIL 21
NETWORK RAIL 21
Network Rail
Project Alliance Agreement [brief description]
Agreement Number: [Insert]
VERSION 1.1
NOTES This template Project Alliance Agreement (“PAA”) was developed following discussions with various industry bodies and many issues raised were incorporated in the final drafting.
It is published to facilitate understanding of Network Rail’s intended approach to alliance contracting and to save management time for us and our suppliers and contractors when setting up and managing alliance contracts in the future.
However the creation of an alliance is a complex process. This agreement is a template only and subject to tailoring by Network Rail on a project by project basis to reflect the needs of the individual circumstance.
NOTES included in this agreement are for information only and do not form part of the contract or any commitment on the part of Network Rail to a particular approach.
All NOTES including this note and the Introduction Notes below are to be deleted prior to use.
INTRODUCTION NOTES
Outline of the PAA
The relationship between the parties to the PAA is very different to the “Employer” and “Contractor” relationship typically found in more traditional construction contracts.
It contains a risk allocation structure where both cost risk and delivery risk are shared between the parties forming the “Alliance” (the “Participants”).
Subject to certain rights and obligations retained by Network Rail as “Owner”, both Network Rail (as “Owner Participant”) and its contractor partners (as “Non-Owner Participant” or “NOPs”) are Participants in the Alliance.
In addition, the PAA is founded upon a “no claim” and “no blame” approach and decisions in relation to delivery of the Project must generally be made on the basis of unanimous agreement between the Participants.
All of these features have the same objective in that they are seeking to align the interests of Network Rail and its contractor partners within the Alliance created by the PAA. The intention is that all of the Alliance parties should perform the PAA and make all decisions on the basis of “Best for Project” rather than “best for the individual”.
In effect, it will be the joint responsibility of the Owner Participant and the NOPs to deliver and complete the Project the subject of the PAA in accordance with the Owner’s stated requirements.
Therefore the traditional “Employer” and “Contractor” divide in relation to performance of the Works is largely removed. In effect the Network Rail and its contractor partners become a “virtual delivery vehicle” for the Project.
Alliancing Principles and NR’s Approach to Alliancing
At its core, the PAA is a target cost based contract - Participants are paid by the Owner on a cost reimbursable basis with “gain” or “pain” calculated by reference to a pre-agreed Target Price. In a traditional target cost construction contract, with the exception of the sharing of cost risk through the pain/gain share arrangements, most risks are allocated to either the Employer or the Contractor.
However, in the PAA the majority of risks will be jointly shared by the Owner Participant and the NOPs. As most risks are shared between the Participants, most Project related matters that arise are therefore decided by all Participants on a unanimous basis.
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Summary of key principles under the PAA:
■ Network Rail plays a dual role, as owner of the Project and separately as an Alliance Participant jointly responsible for delivering the Project with the NOPs;
■ most Project risks are shared Alliance risks, jointly held between Network Rail and the NOPs;
■ time, cost and quality failures relating to the Works are generally shared Alliance risks, meaning that Network Rail cannot make claims against the NOPs for time, cost or quality failures and vice versa;
■ commercial risk is shared through a joint Alliance target cost and pain/gain share model;
■ most decisions relating to Project matters are generally jointly made between Network Rail and the NOPs.
This is different from, for example, Network Rail’s NR12 target cost contract. NR12 is part of Network Rail’s standard suite of construction contracts. It is based on the Infrastructure Conditions of Contract (ICC) Target Cost Version 2011. NR12 is available on Network Rail’s website . Some of the key differences are highlighted in the following sections.
Employer/Contractor relationship
Under the NR12, there is a traditional Employer and Contractor relationship, with each party accepting its own ring-fenced obligations. For example, Network Rail must make the site available to the Contractor and must organise possessions. Network Rail must also of course pay the Contractor. In exchange, the Contractor is generally responsible for carrying out the Works and completing them on time and is liable for any failure to do so.
Under the PAA structure, Network Rail has two different roles. In some circumstances it will continue to act in a traditional Employer role (i.e. the Owner). The Owner will still have a duty to pay the NOPs for the work they perform. However, in its role as Owner Participant it will be part of the Alliance team responsible for performance of the Works.
In effect therefore, although no legal joint venture or partnership is created, there is a merging of responsibility between the Owner Participant and the NOPs for performing and completing the Works. This “joint delivery” arrangement is to recognise the fact that efficient performance by both the Owner Participant as well as the NOPs can positively influence the delivery of the Project.
Risk Allocation
Under the NR12 there is a traditional Employer/Contractor risk allocation and division of responsibility between them. There is no joint delivery obligation in relation to performing the Works although the commercial risk may be shared, for example through pain/gain share arrangements in a target cost contract. Network Rail as the Employer can enforce its contractual rights against the Contractor with regard to time, cost or quality failures in relation to the Works.
Under the PAA there are broadly three main types of risk:
■ Owner held risks. If these risks occur, a Target Price change is allowed to compensate the contractor Participants for the resulting cost incurred to deal with the risk. Therefore each contractor Participant obtains full actual cost and fee recovery;
■ Shared Alliance risks. These risks are jointly held by the Participants. The cost of dealing with those risks is paid as “actual cost” but the Target Price will not be adjusted. The Participants (including the Owner Participant) therefore jointly share the commercial impact of such risks through the pain/gain share mechanism in the PAA;
■ NOP held risks. There are only a small number of these types of risk and they generally cover areas where, for regulatory and governance reasons, NOPs are required to retain full liability. These risks therefore include matters such as breach of statute by the NOPs or fraud.
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The majority of risks under the PAA are shared Alliance risks in order to firmly establish the concept of joint Alliance responsibility that underpins the PAA.
Therefore under the PAA Network Rail cannot generally make claims against the NOPs for time, cost or quality failures in relation to the Works and nor can the NOPs make equivalent claims against Network Rail. In the event that problems arise, the onus is therefore on the Participants to seek to resolve the issues without resorting to trying to enforce their rights under the contract. The longer it takes to resolve a problem, then typically the more it will cost all parties financially through the operation of the pain/gain share arrangements.
Note also that, in line with many UK construction industry alliances, Network Rail will typically maintain an Owner Controlled Insurance Policy (or “OCIP” policy) to cover public liability and certain other claims arising from performance of the Project.
Delivery Risk
Under the NR12, the Contractor generally takes the risk of performing and completing the Works, including the risk of latent defects in the design, construction, workmanship or the cost risk involved with late completion. The Contractor is therefore potentially liable for the costs of failing to deliver the Works in accordance with the Employer’s requirements, including liability for paying liquidated damages if completion is late and for rectifying post-completion defects at its own cost.
Under the PAA, the Participants (including the Owner Participant) share the risk of delivery including defects in design, construction or workmanship. The NOPs are therefore not solely liable for delivering the Works, as the risk is an Alliance risk shared through the pain/gain share cost model. This means that the NOPs are not liable for liquidated damages if the Works are completed late. In addition, the NOPs are paid their actual cost for rectifying defects subject to the pain/gain share arrangements.
In the event of late completion delay costs incurred by Network Rail may be charged as actual cost to the Project, again on the basis that the liability for most costs incurred by the Alliance relating to the Project will be shared between all the Participants.
Commercial Risk
In the traditional NR12, the target cost includes only the Contractor’s costs. The onus is therefore on the Contractor to control its own costs in order to achieve “gain” through the pain/gain share mechanism. The Contractor’s target cost will be adjusted where typical Employer risk events occur, for example as a result of all instructed variations. In many NR Suite contracts such as the lump sum NR9 or target cost NR12 versions, the Contractor’s liability is capped in certain areas, such as in relation to reimbursing NR for railway costs incurred by it due to the Contractor’s performance.
Under the PAA, the Participants (including the Owner Participant) share the commercial risk of delivering the Project through a joint target cost and pain/gain share mechanism which includes both the Owner Participants and the NOPs incurred costs. The target cost will only be changed as a result of a small number of Owner held risks and is not changed at all as a result of the occurrence of Alliance risks.
The net result of this approach in the Project Alliance Agreement is that both Network Rail and the NOPs have some “skin in the game” commercially. It is therefore in all of their interests to collaborate and work in an integrated way in order to help each other minimize each other’s costs incurred in relation to the Project. The lower the actual cost collectively incurred to perform the Project (in NR’s case meaning the cost notionally reimbursed to it and charged to the Project’s actual cost) then the greater the reward for all of the Alliance members though increased gainshare.
“No Claims” Agreement
As noted above, in the NR12 there exists a traditional Employer and Contractor relationship with each party retaining its own rights and remedies against the other party. For example:
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■ Network Rail will typically possess a right to be paid liquidated damages in the event of late completion by the Contractor; and
■ the Contractor will be obliged to indemnify Network Rail for public liability claims or breaches of statute.
However, the PAA is founded on the basis that it is largely a “no claims” contract under which Network Rail and the NOPs waive many of their rights to take action against each other for events that would traditionally be a breach of contract.
A small number of items are excluded from this “no claims” arrangement, including:
■ the Owner’s obligation to pay the NOPs for their work; and
■ each Participant’s liability for breaches of statute or wilful default/fraud.
The reason for the “no claims” approach is again to encourage all Alliance members to focus on problem solving rather than taking legal action against each other when a problem occurs.
Variations
In the NR12, Network Rail is generally entitled to instruct any variations to the Works, usually through the Employer’s Representative. Unless caused by the Contractor’s breach, instructed variations generally result in a change to the contract price or target cost making variations a full Employer risk.
Under the PAA, Network Rail generally remain entitled to instruct any variations to the Works without the NOPs’ consent. This includes variations which are needed to address “Reserved Powers”, which include the occurrence of events that potentially have a major impact on the Works. For example, Network Rail would need to rapidly instruct a variation to deal with any event that jeopardizes the operation of its railway network or could result in a statutory or regulatory breach.
However, in terms of payment for variations, under the PAA only “Scope Variations”, which are material changes to Network Rail’s original required scope, result in a change to the Target Price. A guidelines document must be agreed between the parties in each Project to assist with the definition of what constitutes a Scope Variation.
The reason why only larger variations will result in a change to the Target Price is to discourage the Alliance from looking to claim for reimbursement of cost for minor variations. This seeks to avoid a claims culture. When a minor variation is needed, the focus of the Alliance must be on treating it as an issue for all Alliance members to resolve in the most cost and time efficient manner rather than seeking to treat it as a claim.
Decision making
Under the PAA, except in the very limited circumstances noted earlier where Network Rail is acting as “Owner”, Network Rail (as Owner Participant) and the NOPs must make all decisions in good faith in the best interests of the Project and not just in their own interests.
In the event of any disagreement, including failure of the joint Alliance Leadership Team to unanimously agree on any matter, then unless that matter is one that is excluded from the “no claims” agreement, it may not be referred to arbitration, litigation or to an expert for final determination. In order to preserve the Alliance the Participants must agree a way forward.
Summary of key principles
General
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1. The “Alliance” comprises the “Participants”.
2. NR acts in two capacities under the PAA: (1) as “Owner” (i.e. the client) and (2) as “Owner Participant”.
3. The Owner Participant is a Participant and therefore an Alliance member.
4. The NOPs are the Participants other than the Owner Participant.
5. The Owner has the right to instruct the Participants to undertake “Works” under the PAA in relation to the “Project”.
6. The “Project” is the whole of the project. Works are the works and services to be performed by the Participants following the issue by the Owner of a “Proposal Approval Notice” – see below.
7. The Alliance Leadership Team (“ALT”) is the leadership team for the Alliance. It operates similarly to an executive group. NR and each NOP will each have representation on this team with all members having equal rights and responsibilities.
8. The “Alliance Manager” is the person selected by the ALT to lead the Alliance. He or she reports to the ALT and is responsible for the delivery of the Project.
9. The Alliance Management Team (“AMT”) is the management team responsible for day-to-day delivery of the Project. Normally NR and each NOP will each have at least one representative on this team. This team is appointed by the Alliance Manager (subject to ALT approval).
10. The Alliance Project Team (“APT”) is the integrated, collaborative team of NR’s and the NOPs’ professional and support staff that plan, design and manage construction and delivery of the Project.
11. The “Responsibilities Matrix” sets out the division and description of roles and responsibilities within the Alliance between the ALT, the Alliance Manager, the AMT and/or the APT.
Key Alliancing Concepts
12. The Participants agree at all times to act in “Good Faith”. The Owner is not subject to the Good Faith obligation in order to preserve as distinct from the Project its commitments and responsibilities as operator of the rail network.
13. Each approach, decision, solution or resolution that is taken or made by the Participants must be developed collaboratively and agreed by the Participants on the basis that it is “Best for Project”.
14. Best for Project does not mean just delivery of the Project under budget, to programme and specification. It means meeting the “VFM Statement” and “Alliance Charter”
15. The VFM Statement is an Owner document. It sets out the project deliverables to be achieved by the Alliance and the success criteria by which it will ultimately be judged. This is crucial for establishing what is meant by “Best for Project”. The content will vary depending on the procurement strategy and individual project but typically it would include (amongst other things):
• the Owner’s objectives and outputs for the Project; • requirements relating to health, safety, environment and governance; • process for development of Sections (see below); • rules for performance of design/works e.g. standards, requirements for consultations,
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compliance with laws; • process such as reporting and auditing requirements.
16. The “Alliance Charter” is an Alliance document. It comprises the “Alliance Principles”, the “Alliance Purpose” and the “Alliance Objectives” for the performance of the Works. This sets up a model of agreed behavioural principles to drive decision making processes and issue resolution as between the Participants. This is crucial in establishing how the Alliance will behave in seeking to achieve “Best for Project”.
17. The PAA contains “no claims” provisions which prohibits the parties to the PAA bringing claims for breaches of contract (subject to certain exceptions e.g. where a claim under a Statutory Requirement cannot be excluded by law).
18. The no claims principle underpins the “no blame” culture envisaged by the PAA where an error, mistake or poor performance will not result in the assignment of blame but acceptance of joint responsibility (financial or otherwise). Similarly no delay damages will be payable to the Owner if the Works are not completed by the Date for Completion.
19. The operation of the “Risk or Reward Regime” is essentially a “pain/gain” mechanism. The Owner Participants costs are included within this mechanism in addition to those of the NOPs. It is the principle tool which aligns the achievement of the Owner’s project objectives with the commercial objectives of the NOPs. Participants share the benefit of cost underrun and the “pain” of a cost overrun.
20. The Participants make an “open book” commitment to each other, the Owner, the Office of Rail and Road, the Department for Transport and to the “Alliance Auditor”. The Alliance Auditor is an independent auditor appointed by the ALT and has a defined audit role under the PAA.
21. The “open book” commitment is subject to an express statement that it will not apply in the following circumstances:
• to NR when exercising rights and performing obligations under the PAA in its capacity as Owner;
• to records/documents which may be subject to legal professional privilege or are confidential lawyer/client communications; and
• to information which the ALT determines could (if disclosed) breach a Statutory Requirement, involve a breach of recognised best practice corporate governance guidelines or a Participant’s existing confidentiality obligations.
Roles and Responsibilities
22. NR’s role as Owner includes:
• Defining the contractual matrix of the alliance by agreeing and finalising the PAA;
• Setting out its objectives in the VFM Statement;
• Instructing and approving/rejecting Section Proposals;
• Approving Adjustment Event Guidelines and Scope Variation Benchmarking Guidelines proposed by the Alliance;
• Making payments to the NOPs;
• Issuing “directions” (i.e. instructions which may change the Works);
• Exercising rights of suspension and termination; and
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• Matters of operation or safety concerning the Network (“Reserved Powers”).
23. Reserved Powers are decisions expressly reserved under the PAA for the unilateral decision making of the Owner (rather than the ALT).
24. The Owner must perform its role through the “Owner’s Representative”. This person represents NR as Owner and NOT as Owner Participant. The Alliance is not permitted to accept directions from any other person on behalf of the Owner other than the Owner’s Representative. This is to avoid confusion over whether a representative of NR is acting in an “Owner” or “Owner Participant” capacity.
25. NR’s role as Owner (including the Owner’s Representative) does not include:
• Certifying interim and final payments (the Alliance Manager certifies); • Certifying incentivisation payments (including measuring KPI performance against each
KRA and the resulting financial effects) (the ALT certifies); • Determining Completion (the ALT determines and gives notice to the Owner’s
Representative who is required to then issue a certificate); • Determining whether an Adjustment Event (including a Scope Variation) has occurred
(the ALT determines this); • Determining adjustments to the Section Target Price for Adjustments Events (the ALT
determines this with the Alliance Auditor); or • Determining whether the exercise of the Reserved Powers amounts to an Adjustment
Event or not (the ALT determines this).
26. In addition to being the “executive body” for the Alliance the ALT must therefore also in effect undertake some of the features of the role of the “contract administrator” under a traditional contract.
27. The ALT must undertake all the roles placed on it in accordance with the PAA; the PAA does not give the ALT a discretion to decide a matter on any basis it sees fit. It must do so on a Best for Project basis (see above).
28. Decisions of the ALT are on a unanimous basis only, with no deadlock resolution or referral to an Expert resolution procedure. This should ensure the ALT makes difficult and/or contentious decisions, and is not tempted to avoid such decisions by passing responsibility onto someone else.
29. Whilst the ALT is the final decision making body for the Alliance, it should ensure that decisions are delegated to an appropriate level (and only referred to the ALT if deadlock is reached at AMT or APT level) and/or ensure appropriate alliance or external expertise is utilised on a non-binding basis to assist the ALT make informed decisions.
Project Proposal
30. The “Project Proposal” is the Participants’ proposals for delivering the Works and meeting the VfM Statement and is set out as a Schedule to the PAA.
31. Typically it will include:
• Design and engineering strategy
• Organisation structure
• Target cost validation strategy
• Adjustment Event Guidelines
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• Scope Variation Guidelines
• Governance Plan
• Project Management System including: Environmental & Sustainability Strategy; Safety and Health and Management Strategy; Contracting Strategy; Training and Skills Strategy.
Section Proposals
32. The PAA envisages that the Works will be delivered in Sections. A Section may either be:
• A stage in the overall development of the “Alliance”. For example Section 1 could be “Mobilisation, Design and Consents” and Section 2 “Single Option Development/Outline Design.
• Works which comprise: o a smaller discrete “project” within the overall Project. For example Section 3
could be “electrification”; o works to be undertaken within an “area” forming part of the Project. For
example Section 4 could be works to be undertaken “between x and y”)
33. A Section may be further sub-divided into Section Elements. The content of the Section Element depends on the nature of the Section. For example, the Section Elements for the example Sections described above might comprise:
• Section 1: 1.1 Mobilisation, Section Target Price Development, Exit strategy; 1.2 Option selection, AiP design and development; 1.3 Planning and consents application.
• Section 2: 2.1: Section Target Price Development; Design and methodology; Planning and consent process and approvals.
• Section 3: 3.1 Detailed design; 3.2 Construction. • Section 4: 4.1 Detailed design; 4.2 Construction.
34. Where agreed prior to the date on which the PAA is entered into the “Proposal” for one or more Sections or Section Elements may be included within the Project Proposal (see above) – i.e. it is in effect pre-approved.
35. To the extent a Section or Section Element is not pre-approved the Owner initiates a Section Proposal by issuing a Section Development Notice. A Section Development Notice may be for either a whole Section or for a Section Element.
36. Each Section Proposal is prepared by the Participants in accordance with rules and parameters to be set out in the PAA (including the Project Proposal). The PAA lists the information to be set out in the Section Proposal.
37. The Section Proposal is either accepted or rejected by the Owner. The Owner is not bound to accept any Section Proposal.
38. If the Owner elects to accept a Section Proposal, it issues a “Proposal Approval Notice”. On receipt of Proposal Approval Notice, the Participants proceed to deliver the relevant design services and/or construction works by the Date for Completion for that Section or Section Element in accordance with that Section Proposal.
Design standard
39. In providing the Works and the design of the Works, each Participant must exercise “Diligence” (meaning the degree of skill, care, expertise, diligence and foresight which would be expected of skilled and experienced professional persons engaged in
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undertakings of a similar size, scope, nature and complexity as the Works).
40. Participants take responsibility for any design in a Proposal including any design which has been provided by the Owner before or after the date of the PAA or the date of the Proposal Approval Notice for the relevant Section.
41. There is an express statement that nothing in the PAA implies a “fitness for purpose” obligation.
42. The fact that the Participants take responsibility for design does not remove the need for appropriate NR design approvals to be obtained. The role of “Design Authority” is the defined person authorised to confirm the safety case compliance of a design.
Sharing Arrangements
43. The NOPs provide a commitment that there are no sharing arrangements in place between them not documented in the PAA. This is to ensure that there are no “hidden” arrangements which may distort the “Best for Project” decision making process.
Defects
44. The Participants must rectify Defects notified to them during the Defects Correction Period. The Defects Correction Period for each Section starts on the Date of Completion of the relevant Section and ends 2 years later.
45. The NOPs are entitled to the Actual Cost incurred in rectifying Defects is a Reimbursable Cost and is therefore included in the Painshare/Gainshare calculation. The cost of rectification of Defects may therefore reduce Gainshare or increase Painshare.
46. Participants cease to be responsible for rectification of Defects following the issue of the Final Certificate for the relevant Section.
Further NOTES are included as footnotes to the PAA terms and conditions.
End of Introduction Notes
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Part 1 DEFINITIONS AND INTERPRETATION ................................................................... 1 1 DEFINITIONS AND INTERPRETATION .................................................................................. 1
1.1 Definitions and interpretation ..................................................................................... 1 Part 2 ALLIANCING PRINCIPLES AND COMMITMENTS .................................................. 2
2 THE OWNER AS CLIENT AND AS OWNER PARTICIPANT .................................................. 2 2.1 Distinction between Owner and Owner Participant ................................................... 2 2.2 Owner’s Representative ............................................................................................ 2 2.3 Exercise of rights by the Owner ................................................................................. 2
3 VALUE FOR MONEY STATEMENT ........................................................................................ 2 3.1 Value for money outcome .......................................................................................... 2 3.2 Achieving the VFM Statement ................................................................................... 3 3.3 Amendment of the VFM Statement ........................................................................... 3
4 ALLIANCE CHARTER .............................................................................................................. 3 4.1 Purpose of Alliance Charter ....................................................................................... 3 4.2 Compliance with Alliance Charter .............................................................................. 3 4.3 Amending the Alliance Charter .................................................................................. 3
5 THE PARTICIPANTS’ COMMITMENTS .................................................................................. 3 5.1 Good Faith obligation ................................................................................................. 3 5.2 Achievement of Objectives ........................................................................................ 3 5.3 Best For Project ......................................................................................................... 3 5.4 Open book commitment............................................................................................. 3 5.5 Commitment to ‘no-blame’ culture ............................................................................. 4 5.6 Sharing Arrangements ............................................................................................... 4
6 NO CLAIMS BETWEEN THE PARTIES .................................................................................. 5 6.1 Commitment to avoid and resolve issues .................................................................. 5 6.2 No litigation, arbitration or adjudication ..................................................................... 5 6.3 Non-application of enforceable rights or obligation ................................................... 5 6.4 Saving of certain legal and equitable rights ............................................................... 5 6.5 Early notification of issues ......................................................................................... 6
7 ALLIANCE LEADERSHIP TEAM ............................................................................................. 6 7.1 Membership of the ALT ............................................................................................. 6 7.2 Appointment of chairman ........................................................................................... 6 7.3 Roles and functions of the ALT ................................................................................. 6 7.4 Authorisation of ALT representatives ........................................................................ 7 7.5 ALT Meetings ............................................................................................................. 7 7.8 ALT decisions must be unanimous ............................................................................ 8 7.9 Implementing ALT decisions ..................................................................................... 8 7.10 Consultation with Others............................................................................................ 9
Contents
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7.11 Disclosure of conflict of interest ................................................................................. 9 8 ALLIANCE MANAGEMENT TEAM .......................................................................................... 9
8.1 ALT to appoint the Alliance Manager ........................................................................ 9 8.2 Membership of the AMT ............................................................................................ 9 8.3 Owner Participant to nominate its AMT representatives ......................................... 10 8.4 Participants to ensure continuity of membership of the AMT .................................. 10 8.5 Functions of the AMT ............................................................................................... 10
9 ALLIANCE PROJECT TEAM.................................................................................................. 10 9.1 Membership of the APT ........................................................................................... 10 9.2 Owner Participant to nominate its APT representatives .......................................... 10 9.3 Participants to ensure continuity of membership of the APT ................................... 10 9.4 Functions of the APT ............................................................................................... 11
10 PROJECT OFFICE ................................................................................................................. 11 10.1 Provision of Project Office ....................................................................................... 11
11 STAKEHOLDER ENGAGEMENT WITH THE ALLIANCE .................................................... 11 11.1 Definition of Stakeholder.......................................................................................... 11 11.2 Consultation with Stakeholder ................................................................................. 11 11.3 Attendance of Stakeholders at meetings ................................................................. 11 11.4 Representations by Stakeholders at ALT meetings ................................................ 11 11.5 Participants to develop proposals with Stakeholders .............................................. 12 11.6 Owner’s direction in respect of a proposal .............................................................. 12 11.7 Costs of Stakeholder attendance and representations ........................................... 12 11.8 Stakeholder is not a Party........................................................................................ 12 Part 3 SECTIONS .............................................................................................................. 12
12 SECTIONS ............................................................................................................................. 12 12.1 Instruction of Sections ............................................................................................. 12 12.2 Section Element ....................................................................................................... 13 12.3 Owner’s Brief ........................................................................................................... 14 12.4 Revisions to the Owner’s Brief ................................................................................ 14
13 SECTION PROPOSALS......................................................................................................... 14 13.1 Preparation of a Section Proposal ........................................................................... 14 13.2 NOPs’ Costs of Preparing a Section Proposal ........................................................ 15 13.3 Review of a Section Proposal .................................................................................. 16 13.4 Approval of a Section Proposal ............................................................................... 16 13.5 Rejection of a Section Proposal .............................................................................. 16 13.6 Revision of a Section Proposal ................................................................................ 16 13.7 Effect of a Proposal Approval Notice ....................................................................... 16 13.8 VFM Statement ........................................................................................................ 17 13.9 Discretion on Approval of Section Proposals .......................................................... 17 13.10 Design responsibility for Section Proposals ............................................................ 17 Part 4 DESIGN PHASE ...................................................................................................... 17
14 DESIGN OF THE WORKS ..................................................................................................... 17 14.1 Instruction by the ALT .............................................................................................. 17 14.2 Standard of design ................................................................................................... 17 14.3 Design Authority ...................................................................................................... 18 14.4 Owner is responsible for the contents of the VFM Statement ................................. 18 14.5 Participants’ Design Responsibility .......................................................................... 18 14.6 Whole of Life Cost ................................................................................................... 19
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14.7 Exclusion of fitness for purpose ............................................................................... 19 Part 5 WORKS PHASE ...................................................................................................... 19
15 COMMENCEMENT OF THE WORKS ................................................................................... 19 15.1 Instruction by the ALT .............................................................................................. 19 15.2 Commencement of the Works ................................................................................. 19
16 SITE ........................................................................................................................................ 20 16.1 Access to Sites and Consents ................................................................................. 20 16.2 Access for the Owner .............................................................................................. 20 16.3 The Owner’s other Contractors ............................................................................... 21
17 CONSTRUCTION OF THE WORKS ...................................................................................... 21 17.1 Quality of the Works ................................................................................................ 21 17.2 Project Management System .................................................................................. 21 17.3 Care of the Works .................................................................................................... 21 17.4 Health and safety measures to be taken by the Participants .................................. 21 17.5 Prevention of nuisance and environmental damage ............................................... 22
18 SITE SECURITY ..................................................................................................................... 22 18.1 Appointment of Relevant NOP by ALT .................................................................... 22 18.2 Prevention of unauthorised access ......................................................................... 22 18.3 Access over the Owner’s land ................................................................................. 22 18.4 Trespass onto the railway ........................................................................................ 22 18.5 Issue of Owner passes ............................................................................................ 23 18.6 Record of visitors ..................................................................................................... 23
19 CDM REGULATIONS ............................................................................................................. 23 19.1 Alliance as only client .............................................................................................. 23 19.2 Principal Designer .................................................................................................... 23 19.3 Principal Contractor ................................................................................................. 23 19.4 Other designers and contractors ............................................................................. 24 19.5 Compliance with directions ...................................................................................... 24
20 STATUTORY REQUIREMENTS AND CONSENTS .............................................................. 24 20.1 Compliance with Statutory Requirements and Consents ........................................ 24 20.2 Enforcement and exceptions to clauses 6.2 and 6.3 ............................................... 24
21 SUBCONTRACTING .............................................................................................................. 25 21.1 Subcontracting to be authorised by the ALT ........................................................... 25 21.2 Subcontracting on a Best For Project basis ............................................................ 25 21.3 Subcontracting with connected persons .................................................................. 25
22 IMPLEMENTATION WORKS SUBCONTRACT..................................................................... 25 22.1 Existence of Implementation Works Subcontract .................................................... 25 22.2 Incorporation of Implementation Works Subcontract .............................................. 25
23 TRACK POSSESSIONS......................................................................................................... 26 23.1 Track possessions as stated in the relevant Proposal ............................................ 26 23.2 Additional, adjusted or cancelled track possessions ............................................... 26 23.3 Owner’s right to cancel or adjust track possessions ............................................... 27 23.4 Adequate arrangements to complete track possessions ......................................... 27 23.5 Cancellation of track possessions due to Participant default .................................. 27 23.6 Adjustment of track possessions due to Participant default .................................... 27 23.7 Owner’s costs due to unplanned track interruptions ............................................... 28
24 USE OF THE WORKS BY THE OWNER PRIOR TO COMPLETION ................................... 28 24.1 The Owner’s use of the Works pre-completion ....................................................... 28
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25 COMPLETION ........................................................................................................................ 28 25.1 Obligation to complete the Works ............................................................................ 28 25.2 Completion of a Section Element ............................................................................ 28 25.3 Completion of a Final Section Element ................................................................... 29 25.4 Issue of Certificate of Completion ............................................................................ 29 25.5 ALT decides Completion has not been reached ..................................................... 29 25.6 Certificate of Completion does not constitute approval ........................................... 29 25.7 No liability for delayed Completion .......................................................................... 29
26 DEFECTS ............................................................................................................................... 30 26.1 Care of the Works during Defects Correction Period .............................................. 30 26.2 Rectifying Defects and completion of outstanding works ........................................ 30 26.3 Actual Cost for rectifying Defects ............................................................................ 30 26.4 Network Operation Issue and Defects ..................................................................... 30 26.5 No liability for latent defects ..................................................................................... 30 26.6 Completion of the Project ........................................................................................ 31
27 SECTION FINAL CERTIFICATE ............................................................................................ 31 27.1 Issue of Section Final Certificate for each Section .................................................. 31 27.2 Section Final Certificate is evidence that all payments have been made ............... 31 27.3 Final Completion of the Project ............................................................................... 31 Part 6 DIRECTIONS, SCOPE VARIATIONS AND ADJUSTMENT EVENTS.................... 31
28 DIRECTIONS .......................................................................................................................... 31 28.1 Directions by the Owner’s Representative only ....................................................... 31 28.2 Type of Directions .................................................................................................... 31 28.3 Reserved Powers .................................................................................................... 32 28.4 Scope Variations ...................................................................................................... 32 28.5 Scope Variation Report............................................................................................ 33 28.6 Adjustment to the Target Price ................................................................................ 33 28.7 Directions do not invalidate this Agreement ............................................................ 34
29 ADJUSTMENT EVENTS ........................................................................................................ 34 29.2 ALT determines an Adjustment Event has occurred ............................................... 34 29.3 ALT to determine adjustment to Target Price .......................................................... 34 29.4 Owner’s acknowledgement of adjustment to Target Price ...................................... 34 29.5 ALT may engage independent adviser .................................................................... 35 29.6 Participants to mitigate effects of an Adjustment Event .......................................... 35 Part 7 PAYMENT, REPORTING AND AUDITING ............................................................. 35
30 PAYMENT .............................................................................................................................. 35 30.1 General principles of payment ................................................................................. 35 30.2 Payment of Reimbursable Cost ............................................................................... 35 30.3 Payment under Risk or Reward Regime ................................................................. 35 30.4 Sole right to payment ............................................................................................... 35 30.5 Payment is not evidence of satisfactory workmanship ............................................ 35
31 BENCHMARK PERFORMANCE OF THE PARTICIPANTS .................................................. 36 31.1 Benchmarking to demonstrate value for money ...................................................... 36 31.2 Disclosure of information for benchmarking ............................................................ 36 31.3 Exemption to disclosure for benchmarking.............................................................. 36
32 REPORTS, RECORDS, ACCESS AND AUDIT ..................................................................... 37 32.1 Retention of Records for each Project ..................................................................... 37 32.2 Audit by the Alliance Auditor .................................................................................... 37
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32.3 Reporting Requirements .......................................................................................... 39 32.4 Content of Works Status Reports ............................................................................ 40 32.5 Reporting to the Owner............................................................................................ 40 32.6 Cost control and recording....................................................................................... 40 Part 8 SUSPENSION, DEFAULT, EXPULSION AND TERMINATION ............................. 40
33 SUSPENSION ........................................................................................................................ 40 33.1 Suspension by the Participants ............................................................................... 40 33.2 Suspension by the Owner........................................................................................ 41 33.3 Costs of suspension ................................................................................................ 41 33.4 Adjustment Event arising from certain suspensions ................................................ 41 33.5 Re-mobilise after suspension .................................................................................. 41
34 DEFAULT NOTICE ................................................................................................................. 41 34.1 Default by a Participant............................................................................................ 41 34.2 Default by the Owner ............................................................................................... 42 34.3 Default Notice due to Default by a NOP .................................................................. 42 34.4 Default Notice due to Default by the Owner ............................................................ 42 34.5 Default Notice due to Default by the Owner Participant .......................................... 42 34.6 Payment on termination for Default ......................................................................... 42
35 NO FAULT TERMINATION .................................................................................................... 43 35.1 The Owner’s right to terminate at any time.............................................................. 43 35.2 Payment on no fault termination .............................................................................. 43 35.3 Release agreement ................................................................................................. 43
36 EXCLUSION OF DEFAULTING PARTICIPANT .................................................................... 43 36.1 Exclusion of Defaulting Participant .......................................................................... 43
37 CONSEQUENCES OF TERMINATION ................................................................................. 43 37.1 Immediate cessation of Works ................................................................................ 43 37.2 The Owner’s directions on termination .................................................................... 44 37.3 The Owner’s right to continue with others ............................................................... 44 37.4 Materials, Construction Plant etc. on default termination ........................................ 44 37.5 Survival clause ......................................................................................................... 44 Part 9 INSURANCES, INDEMNITIES AND LIABILITIES .................................................. 45
38 INSURANCES ........................................................................................................................ 45 38.1 The Owner insurances ............................................................................................. 45 38.2 The Owner’s insurance manual ............................................................................... 45 38.3 Insurance to be taken out by each NOP .................................................................. 45 38.4 No relief from obligations under this Agreement ..................................................... 45 38.5 Insurance claims procedure..................................................................................... 45 38.6 Payments received from insurers ............................................................................ 45
39 INDEMNITIES ......................................................................................................................... 46 39.1 Non-compliance with insurance requirements by a NOP ........................................ 46 39.2 Non-compliance with insurance requirements by the Owner .................................. 46 39.3 Wilful Default by a NOP ........................................................................................... 46 39.4 Wilful Default by the Owner Participant ................................................................... 46 39.5 Proportionate liability under the indemnities ............................................................ 47
40 LIABILITY OF NOPS .............................................................................................................. 47 40.1 Liability of the NOPs is several ................................................................................ 47 40.2 NOP’s Liability under the Risk or Reward Regime .................................................. 47
41 LIMITATION OF LIABILITY .................................................................................................... 47
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41.1 Cap on Liability ........................................................................................................ 47 41.2 Exclusion of consequential loss ............................................................................... 48 41.3 Exception to the exclusion of consequential loss .................................................... 48 41.4 Liability of the Owner Participant ............................................................................. 48
42 SUBCONTRACTOR CLAIMS ................................................................................................ 48 42.1 Suspension or adjudication by Subcontractors ....................................................... 48 42.2 Obligation to recover from Subcontractors .............................................................. 49 42.3 Losses recoverable from a Subcontractor to be repaid ........................................... 49 42.4 Subcontracts to exclude no loss claims ................................................................... 49 42.5 Repayment of amounts not recovered from defaulting Subcontractors .................. 49 42.6 Costs of proceeding are Actual Cost ....................................................................... 49 Part 10 MISCELLANEOUS PROVISIONS .......................................................................... 50
43 PARENT COMPANY GUARANTEE ...................................................................................... 50 43.1 Form of guarantee ................................................................................................... 50 43.2 Failure to provide guarantees by the Commencement Date ................................... 50 43.3 Recourse by the Owner ........................................................................................... 50 43.4 Maintenance of guarantees ..................................................................................... 50 43.5 Demand is without prejudice to other rights ............................................................ 50 43.6 Costs of procuring guarantees are within the Fee ................................................... 50
44 INTELLECTUAL PROPERTY................................................................................................. 50 44.1 Intellectual Property remains vested in owner ......................................................... 50 44.2 Grant of licence to use ............................................................................................. 51 44.3 Sub-licences and transfer ........................................................................................ 51 44.4 Extent of licences for software and proprietary equipment ..................................... 51 44.5 Infringement indemnity ............................................................................................ 51 44.6 No liability for unlicensed use .................................................................................. 52 44.7 Waiver of moral rights .............................................................................................. 52
45 TUPE ...................................................................................................................................... 52 45.1 TUPE provisions ...................................................................................................... 52
46 NOTICES ................................................................................................................................ 52 46.1 Form and methods of delivery ................................................................................. 52 46.2 Notice by email ........................................................................................................ 53 46.3 Notice by a corporate entity ..................................................................................... 53
47 GENERAL ............................................................................................................................... 53 47.2 Costs of this Agreement .......................................................................................... 53 47.3 Severability .............................................................................................................. 53 47.4 Waiver ...................................................................................................................... 53 47.5 Amendments to this Agreement .............................................................................. 54 47.6 Entire Agreement ..................................................................................................... 54 47.7 Assignment .............................................................................................................. 54 47.8 Change in Control .................................................................................................... 54 47.9 Confidentiality and Comptroller and Auditor General .............................................. 54 47.10 Freedom of Information ........................................................................................... 56 47.11 Information Security ................................................................................................. 57 47.12 No partnership created ............................................................................................ 57 47.13 Power to enter into this Agreement ......................................................................... 57 47.14 Inability to comply with financial obligations ............................................................ 57 47.15 No fetter of the Owner’s statutory rights and obligations ......................................... 57
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47.16 Compliance .............................................................................................................. 57 47.17 Equality and Diversity .............................................................................................. 58 47.18 Third party rights excluded ...................................................................................... 59 47.19 Governing law .......................................................................................................... 59 47.20 BIM Building Information Modelling ......................................................................... 59 47.21 Corporate Tax .......................................................................................................... 59 47.23 [London Living Wage ............................................................................................... 61 47.24 Intermediaries Legislation – Engagement of Off-Payroll service providers
through the NOPs .................................................................................................... 62 Schedules 1 DEFINITIONS AND INTERPRETATION ...................................................................................... 64 2 SECTIONS ............................................................................................................................... 86 3 REPRESENTATIVES ................................................................................................................ 87 4 OWNER’S AND PARTICIPANTS’ CONTACT DETAILS ................................................................ 88 5 OWNER’S REPRESENTATIVE .................................................................................................. 90 6 ALLIANCE CHARTER ................................................................................................................ 93 7 RESPONSIBILITIES MATRIX ..................................................................................................... 94 8 VFM STATEMENT .................................................................................................................. 123 9 PROJECT PROPOSAL ............................................................................................................ 123 10 ACTUAL COST ....................................................................................................................... 124 11 FEE ........................................................................................................................................ 139 12 [TARGET PRICES] .................................................................................................................. 142 13 RISK OR REWARD REGIME ................................................................................................... 144 14 PAYMENT PROCEDURES ...................................................................................................... 154 15 VESTING CERTIFICATE ......................................................................................................... 164 16 INSURANCE POLICIES ........................................................................................................... 166 17 GUARANTORS ....................................................................................................................... 167 18 PARENT COMPANY GUARANTEE .......................................................................................... 168 19 EXCLUSION AND TERMINATION ............................................................................................ 171 20 TUPE ..................................................................................................................................... 177
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THIS PROJECT ALLIANCE AGREEMENT is dated BETWEEN:
(1) NETWORK RAIL INFRASTRUCTURE LIMITED, a company registered in England and Wales (company number 2904587) whose registered office is at 2nd Floor, One Eversholt Street, London, NW1 2DN (“the Owner”);
(2) [NOP 1], a company registered in England and Wales (company number [ ]) whose registered office is at [ ] (“NOP 1”);
(3) [NOP 2] a company registered in England and Wales (company number [ ]) whose registered office is at [ ] (“NOP 2”); and
(4) [NOP 3] a company registered in England and Wales (company number [ ]) whose registered office is at [ ] (“NOP 3”)1.
(together the “Parties”).
BACKGROUND:
(A) The Parties have agreed to enter into this Agreement for the delivery of the Project and the performance of the Works in return for specified payments.
(B) The Owner has developed the VFM Statement for the Project and which may be further developed by the Owner.
(C) The Participants have developed a Project Proposal for delivering the Project in accordance with the VFM Statement.
(D) The Participants have undertaken to enter into an alliance and perform their respective roles in relation to the Project in a spirit of co-operation and openness with the objective of delivering the Project using an alliance relationship.
(E) The Participants are committed to:
• achieving the Owner’s VFM Statement; and
• meeting the Alliance Objectives.
(F) The Risk or Reward Regime incentivises the Participants to meet or exceed the Alliance Objectives.
IT IS AGREED:
Part 1 DEFINITIONS AND INTERPRETATION
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions and interpretation
The definitions and interpretation are set out in Schedule 1 (Definitions and Interpretation).
1 NOTE: To be amended to reflect the relevant number of NOPs
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Part 2 ALLIANCING PRINCIPLES AND COMMITMENTS
2. THE OWNER AS CLIENT AND AS OWNER PARTICIPANT
2.1 Distinction between Owner and Owner Participant
Although the Owner and the Owner Participant are the same entity, throughout this Agreement references are made to “Owner” and “Owner Participant” respectively to indicate the distinction between when that entity is acting as the client for the delivery of the Works and when it is acting as one of the Participants in the alliance for the delivery of the Works.
2.2 Owner’s Representative
2.2.1 The Owner may perform any of its obligations under this Agreement through the Owner’s Representative.
2.2.2 The Owner must ensure that the Owner’s Representative promptly performs the roles and functions and is given the powers and rights allocated to the Owner’s Representative as set out in Schedule 5 (Owner’s Representative).
2.2.3 The Participants will provide all assistance necessary to ensure the Owner and the Owner’s Representative can fulfil the responsibilities, perform those roles and functions and exercise those rights.
2.2.4 The Owner has initially selected the person named in Schedule 3 (Representatives) as the Owner’s Representative.
2.2.5 The Owner may, from time to time, change its representative by giving notice to the Participants.
2.2.6 All Notices to or from the Owner under this Agreement must be sent to or from the Owner’s Representative.
2.2.7 The Owner’s Representative may from time to time on prior notice to the ALT appoint named delegates to perform any specified role or roles of the Owner’s Representative (including specifying limits of authority) and may vary or remove any such appointment or authority at any time on prior notice to the ALT.
2.2.8 The ALT and the Participants are entitled to rely on any act or omission of a delegate of the Owner’s Representative which such person is authorised to make in accordance with clause 2.2.7 as though it were a direction of the Owner’s Representative.
2.3 Exercise of rights by the Owner
Notwithstanding the alliance relationship established under this Agreement, the Participants acknowledge that, where the Owner is exercising its rights (including the Reserved Powers under clause 28.3) and performing its obligations under this Agreement in its role as client for the delivery of the Works (rather than as a Participant in the alliance), the Owner will not be subject to the commitments made under clauses 4 and 5.
3. VALUE FOR MONEY STATEMENT
3.1 Value for money outcome
The Participants acknowledge and agree that the key purpose of this Agreement is, and they commit themselves to achieving, a value for money outcome in respect of the Project.
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3.2 Achieving the VFM Statement
The Participants acknowledge and agree that the key purpose referred to at clause 3.1 is achieved by the Participants meeting the VFM Statement.
3.3 Amendment of the VFM Statement
3.3.1 The VFM Statement may be amended by the Owner for the purpose of developing a Section pursuant to clauses 12 and 13 or by a direction pursuant to clause 28.
3.3.2 The VFM Statement cannot be amended by any Participant or the ALT.
3.3.3 An amended VFM Statement is deemed to be a Scope Variation.
4. ALLIANCE CHARTER
4.1 Purpose of Alliance Charter
The Alliance Charter (including the Alliance Objectives) has been developed with the aim of carrying out the Project and performing the Works so as to achieve the VFM Statement.
4.2 Compliance with Alliance Charter
4.2.1 The Participants will perform the Works in accordance with the Alliance Charter.
4.2.2 The Alliance Charter, together with the other terms of this Agreement, will govern the relationship between the Participants at all levels of the alliance.
4.3 Amending the Alliance Charter
The ALT may review and amend any part of the Alliance Charter.
5. THE PARTICIPANTS’ COMMITMENTS
5.1 Good Faith obligation
In exercising their rights and performing their obligations under this Agreement, the Participants agree at all times to act in Good Faith.
5.2 Achievement of Objectives
In delivering the Project, the Participants commit to working together to:
5.2.1 achieve the VFM Statement; and
5.2.2 meet the Alliance Objectives.
5.3 Best For Project
The Participants commit to establishing an alliance culture based on the Alliance Charter and to act at all times in a manner that is consistent with a Best For Project approach.
5.4 Open book commitment
5.4.1 Each Participant commits to:
5.4.1.1 maintain, for at least the Relevant Period, all of their records and other documentation referred to in this Agreement that relate to
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the Works in accordance with, where applicable, good accounting practices, standards and procedures;
5.4.1.2 fully disclose any corporate or other objectives or affiliations that could reasonably be considered to have an adverse impact on the achievement of the VFM Statement or the Alliance Objectives;
5.4.1.3 make their records and other documentation referred to in this Agreement that relate to the Works available to each other, the Owner and the Alliance Auditor on request; and
5.4.1.4 make available to each other, the Owner and the Alliance Auditor any existing documentation or information in whatever form relating to the Works, including documentation and information relating to its Actual Cost incurred by it directly or relating to any of its Affiliate Undertakings or Subcontractors undertaking any part of the Works.
5.4.2 The obligation to make records and documentation available pursuant to this clause 5.4 does not apply to records or documentation that may be the subject of legal professional privilege or are confidential lawyer/client communications.
5.4.3 For the purposes of this clause 5.4, references to the Owner include the Office of Rail Regulation and the Department for Transport.
5.5 Commitment to “no-blame” culture
The Participants acknowledge and agree that a key purpose of this Agreement is, and they will commit themselves to:
5.5.1 the promotion and maintenance of a “no-blame” culture between the Participants in relation to disputes, errors, mistakes, Defects, poor performance and other issues which may arise within the Alliance; and
5.5.2 the prompt and mutual resolution of all disputes, differences and other issues by all Participants within the framework created by this Agreement.
5.6 Sharing Arrangements
5.6.1 The Participants acknowledge that the transparency and visibility of the legal and commercial arrangements between them and between the Participants and the Owner is essential for the successful delivery of the Project and in order to deliver the commitments set out in this clause 5.
5.6.2 Accordingly, at the Commencement Date and at all times thereafter, each Participant severally warrants to each other Participant and the Owner that it and none of its Affiliated Undertakings have entered and will not enter into any sharing arrangement, joint venture, partnership or other similar arrangement with any of the other Participants or any of their Affiliated Undertakings in relation to any legal or beneficial interest in its:
5.6.2.1 allocation under this Agreement of any Reimbursable Cost; or
5.6.2.2 rights or liabilities arising under clause 6.4,
(”Sharing Arrangement”), and that all legal, commercial and financial arrangements between it or any of its Affiliated Undertakings and the other Participants or any of their Affiliated Undertakings in relation to the Project and its rights and liabilities under this Agreement are exclusively and exhaustively set out in this Agreement.
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5.6.3 A breach of this clause 5.6 will be deemed to be a Wilful Default by any Participant who is party to the relevant Sharing Arrangement.
6. NO CLAIMS BETWEEN THE PARTIES
6.1 Commitment to avoid and resolve issues
The Participants must acting in accordance with the commitments given under clause 5 seek to avoid issues arising as between each other and, to the extent an issue arises, must resolve the issue within the Alliance.
6.2 No litigation, arbitration or adjudication
Subject to clause 6.4, the Parties agree that there will be no litigation, arbitration or adjudication between them arising out of or in connection with this Agreement.
6.3 Non-application of enforceable rights or obligation
6.3.1 Subject to the exceptions listed in clause 6.4, a failure by a Party to perform any obligation or to discharge any duty under, or arising out of or in connection with this Agreement, or which is otherwise an obligation to or duty owed to another Party however arising, does not give rise to any enforceable right or obligation at law and, to the extent that it does, the other Parties releases that Party from any consequences at law for that failure.
6.3.2 Subject to the exceptions listed in clause 6.4, the sole remedy arising under contract, tort, statute or otherwise for failure by any Party to perform any obligation or to discharge any duty under, or arising out of or in connection with this Agreement, or which is otherwise an obligation to or duty owed by it to another Party however arising is the operation of Schedule 13 (Risk or Reward Regime) and Schedule 14 (Payment Procedures).
6.4 Saving of certain legal and equitable rights
Clauses 6.2 and 6.3 have no force or effect:
6.4.1 in respect of a Wilful Default by a Party;
6.4.2 [in respect of a Parties’ construction and equipment insurer, motor vehicle insurer or employer’s liability insurer exercising a right of subrogation, to the extent it is permitted to do so, against another Party] 2;
6.4.3 where a Party has a right to bring a claim or cause of action against under a Statutory Requirement which cannot be excluded by the Parties as a matter of law;
6.4.4 in respect of any claim for breach of any Statutory Requirement (including any prosecution brought against a Party by a Relevant Authority) in connection with the Works, except and to the extent:
6.4.4.1 any claim for legal expenses, demands, losses, costs, expenses, damages and/or fines arising from such breach (including additional Reimbursable Costs incurred by any Participant) is or ought to be reimbursable under the insurances required to be taken out by the Parties pursuant to clause 38.1 or 38.3; and/or
2 NOTE – May only be excluded where confirmed by the Owner’s insurers
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6.4.4.2 the ALT determines otherwise by notice in writing to the Owner and all the Participants, having regard to the nature of the breach and the effect of the breach on the Project, the Works. Where and to the extent that this clause 6.4.4.2 applies any such legal expenses, demands, losses, costs, expenses, damages and/or fines arising from the relevant breach are to be treated as Actual Cost (and in the case of the Owner treated as Actual Cost incurred by the Owner Participant);
6.4.5 in respect of a failure by a Party to make payment under:
6.4.5.1 clauses 27, 30 or 35.2.1;
6.4.5.2 Schedules 14 (Payment Procedures), 19 (Exclusion and Termination), or 20 (TUPE); or
6.4.5.3 any indemnity under this Agreement; or
6.4.6 where this Agreement expressly states that clauses 6.2 and 6.3 do not apply.
6.5 Early notification of issues
Each Party agrees to immediately notify the others of any matter which may amount to or result in an issue between the Parties in relation to this Agreement.
7. ALLIANCE LEADERSHIP TEAM
7.1 Membership of the ALT
7.1.1 The Participants have established the ALT.
7.1.2 The initial ALT representatives for each Participant are named in Schedule 3 (Representatives).
7.1.3 Each Participant must use its reasonable endeavours to ensure that, where appropriate, its representatives appointed to the ALT remain as representatives on the ALT for the Project.
7.1.4 Any removal and replacement by a Participant of any of its representatives appointed to the ALT must be to a replacement representative agreed by the ALT and with the level of experience and capability in project alliancing considered appropriate by the ALT.
7.1.5 Each Participant must at all times be represented on the ALT.
7.2 Appointment of chairman
The ALT, from time to time, must appoint one of the ALT representatives to be chairperson.
7.3 Roles and functions of the ALT
7.3.1 The primary functions of the ALT are to:
7.3.1.1 establish and ensure the implementation of the strategic leadership and direction of the Participants;
7.3.1.2 establish and implement transparent governance and accountability structures for the Participants; and
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7.3.1.3 assume responsibility for the performance of the Participants under this Agreement.
7.3.2 The roles and responsibilities of the ALT are more fully described in the:
7.3.2.1 Governance Plan; and
7.3.2.2 Responsibilities Matrix.
7.3.3 The Participants acknowledge and agree that the ALT will be responsible for ensuring that all members of the AMT understand the Alliance Charter and the requirement to perform the Works in accordance with the Alliance Charter.
7.3.4 The ALT must ensure that at all times it:
7.3.4.1 monitors and predicts each NOP’s potential liability to make payment of Section Painshare or Painshare; and
does not allow the AMT to apply for payment under Schedule 14 (Payment Procedures) which includes an amount which may subsequently be required to be repaid as Painshare.
7.4 Authorisation of ALT representatives
7.4.1 Each Participant’s representative is authorised to represent and bind their appointer on any matter relating to this Agreement.
7.4.2 Any ALT representative of the Owner Participant may only represent and bind the Owner Participant in its capacity as such under this Agreement, and not in its capacity as the Owner.
7.5 ALT Meetings
7.5.1 The ALT must hold a meeting at no greater than monthly intervals and otherwise when reasonably required by any Participant.
7.5.2 Meetings of the ALT must be conducted in accordance with the Governance Plan.
7.5.3 The Participants acknowledge that:
7.5.3.1 the continuous involvement in and attendance at the ALT meetings of the nominated ALT representatives is critical to the success of the alliance; and
7.5.3.2 there may be limited circumstances when a ALT representative cannot attend a ALT meeting through reasons beyond its reasonable control.
7.5.4 Each of the Participants has appointed an alternative representative or representatives who may attend a ALT meeting in substitution for a nominated ALT representative in the limited circumstances referred to in clause 7.5.3.2.
7.5.5 Each Participant’s alternative representatives are set out in Schedule 3 (Representatives) and a Participant may only change one of its alternative representatives to a replacement alternative representative agreed by the ALT and with the level of experience and capability in project alliancing considered appropriate by the ALT.
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7.6 Attendance of Third Parties at ALT Meetings
7.6.1 The ALT may agree to invite:
7.6.1.1 the Owner’s Representative;
7.6.1.2 any person representing any Party (including the Owner);
7.6.1.3 any Subcontractor (including a Supply Chain Partner or Implementation Works Subcontractor); and/or
7.6.1.4 any subcontractor, designer or supplier of any tier of any Subcontractor,
to attend any ALT meeting and make representations to the ALT.
7.6.2 If requested to do so by any Party, the ALT must invite any person to attend and make representation to an ALT meeting in accordance with clause 7.6, unless the ALT agrees that any such request is unreasonable or would create a conflict of interest having regard to the matters to be discussed at that meeting.
7.6.3 Any person attending an ALT meeting pursuant to clauses 7.6.1 or 7.6.2 has no voting rights.
7.7 Attendance of an alliance facilitator at ALT meetings
The ALT may from time to time appoint a non-voting independent person as an alliancing facilitator to attend meetings of the ALT and the cost of such a facilitator will be Actual Costs.
7.8 ALT decisions must be unanimous
7.8.1 All decisions of the ALT must be unanimous.
7.8.2 No decision can be made by the ALT unless:
7.8.2.1 a representative of each Participant is present at the meeting;
7.8.2.2 it is within the matters contemplated by this Agreement and is made in accordance with this Agreement; and
7.8.2.3 it is recorded in writing.
7.9 Implementing ALT decisions
7.9.1 Subject to clause 7.9.2, each Participant must comply with all ALT decisions.
7.9.2 If a Participant considers that compliance with an ALT decision would cause the Participant or a Participant’s officer, director, agent, or employee to do or omit to do anything that contravenes:
7.9.2.1 any law or Statutory Requirement; or
7.9.2.2 that Participant’s constituent statute, constitution, memorandum or articles of association,
that Participant need not comply, but must immediately give notice in writing to the remaining Participants providing the details of the law or Statutory Requirement, or the Participant’s constituent statute, constitution, memorandum
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or articles of association, as the case may be, that will be so contravened and, where appropriate, the ALT will then make a further decision in respect of the relevant matter.
7.10 Consultation with Others
7.10.1 The Participants recognise the importance of having access to all appropriate resources, information and/or skills to determine certain matters under this Agreement which are required to be determined on a Best For Project basis in accordance with the VFM Statement.
7.10.2 In particular, the Participants acknowledge that to achieve the VFM Statement, acting on a Best For Project basis and complying with the commitments at clause 5, they will need to take into account the Owner’s reasonable operational, maintenance and safety requirements for using or taking over the Project and its interface with other infrastructure (including with other projects).
7.11 Disclosure of conflict of interest
7.11.1 A Participant’s representative on the ALT, AMT or APT (as the case may be) must fully disclose to an ALT, AMT or APT meeting (as the case may be), any conflicting interest or duty, or potential conflict of interest or duty, the representative may have (whether personally or as a representative) before participating in a discussion on any relevant issue or making a decision about that issue.
7.11.2 A Participant’s representative who has made full disclosure under clause 7.11.1 may fully participate in any discussion and decision, even though the representative has or may have a conflicting interest or duty.
7.11.3 For the purposes of this clause 7.11, a conflict of interest will include any corporate or other objective or affiliations of a Participant that could reasonably be considered to have an adverse impact on the achievement of either or both of the VFM Statement or the Alliance Objectives.
7.11.4 A conflict of interest is not created merely by the fact that a representative is an appointee and/or an employee of a Participant.
8. ALLIANCE MANAGEMENT TEAM
8.1 ALT to appoint the Alliance Manager
8.1.1 The ALT has selected and appointed the person named in Schedule 3 (Representatives) as the Alliance Manager.
8.1.2 The functions and responsibilities of the Alliance Manager are described in the Governance Plan and Responsibilities Matrix.
8.2 Membership of the AMT
8.2.1 Subject to the requirements of this clause 8, the AMT membership will be selected by the Alliance Manager and approved by the ALT prior to commencing the Works.
8.2.2 Membership of the AMT may only be amended with the approval of the ALT.
8.2.3 Subject to clause 8.3, the AMT must comprise:
8.2.3.1 the Alliance Manager; and
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8.2.3.2 senior individuals drawn from the Participants reporting to the Alliance Manager,
provided that at all times there will be at least one representative drawn from each Participant on the AMT.
8.3 Owner Participant to nominate its AMT representatives
The Owner Participant may at any time by notice to the ALT, nominate personnel for inclusion in the AMT and those persons nominated must form part of the AMT as stated in the notice.
8.4 Participants to ensure continuity of membership of the AMT
8.4.1 Each Participant must (subject to satisfactory performance by the relevant personnel) use reasonable endeavours to ensure that, where appropriate, each person that has been assigned to the AMT by the relevant Participant remains as a member of the AMT for the delivery of the Project or otherwise until the ALT decides that he or she is no longer required for the Project.
8.4.2 If a member of the AMT ceases to be a member without the approval of the ALT, any costs incurred by that member’s Participant in replacing that member (including any costs incurred in familiarising the replacement member with that Project) will not be Actual Cost under this Agreement.
8.5 Functions of the AMT
The AMT must perform the functions:
8.5.1 described in the relevant Proposal;
8.5.2 described in the Governance Plan; and
8.5.3 as otherwise determined by the ALT from time to time.
9. ALLIANCE PROJECT TEAM
9.1 Membership of the APT
9.1.1 Subject to the requirements of this clause 9, an Alliance Project Team must be selected by the Alliance Manager prior to commencing the Works.
9.1.2 The APT must include personnel drawn from each Participant.
9.1.3 Membership of the APT may only be amended with the approval of the AMT.
9.2 Owner Participant to nominate its APT representatives
The Owner Participant may at any time by notice to the Alliance Manager, nominate personnel for inclusion in the APT (including nominating some personnel for the purpose of gaining training and experience in alliancing) and those persons nominated must form part of the APT as stated in the notice.
9.3 Participants to ensure continuity of membership of the APT
9.3.1 Each Participant must (subject to satisfactory performance by the relevant personnel) use reasonable endeavours to ensure that, where appropriate, each person that has been assigned to the APT by the relevant Participant remains as
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a member of the APT for the delivery of that Project or otherwise until the ALT or AMT decides that he or she is no longer required for the Project.
9.3.2 If a member of the APT ceases to be a member without the approval of the ALT or the AMT, any costs incurred by that member’s Participant in replacing that member (including any costs incurred in familiarising the replacement member with the Project) will not be recoverable as Actual Cost.
9.4 Functions of the APT
The APT must, under the guidance of the ALT and the AMT, perform:
9.4.1 all the functions determined by the ALT and AMT; and
9.4.2 the roles and responsibilities designated to the APT in the Governance Plan and Responsibilities Matrix.
10. PROJECT OFFICE
10.1 Provision of Project Office
Unless otherwise stated in the Project Proposal or any Proposal Approval Notice, the Participants must provide a Project Office from the Commencement Date to the Date of Project Final Completion or such other period as specified by the ALT.
11. STAKEHOLDER ENGAGEMENT WITH THE ALLIANCE
11.1 Definition of Stakeholder
Stakeholders for the purpose of this clause 11 includes representatives of any Train Operating Company, Freight Operating Company, Rolling Stock Operating Company, Local Authority, Government Department, Office of the Rail Regulator, Third Party developer, utility provider or the like (each a “Stakeholder”).
11.2 Consultation with Stakeholder
Notwithstanding this clause 11, the Participants acknowledge that from time to time they may need to:
11.2.1 consult with various Stakeholders;
11.2.2 take in to account comments received from Stakeholders following such consultation; and
11.2.3 comply with certain requirements of Stakeholders,
in order to deliver the Works in accordance with the VFM Statement and this Agreement.
11.3 Attendance of Stakeholders at meetings
The Owner, ALT, AMT or APT may from time to time invite certain Stakeholders attend and participate in specified activities of the ALT, AMP and/or APT (including meetings) and the Participants will allow those Stakeholders to so attend and participate.
11.4 Representations by Stakeholders at ALT meetings
The Participants will give full and fair consideration to all representations made by any Stakeholder (whether or not arising at any meeting pursuant to clause 11.2) including any
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proposals for innovation and savings in either the costs of performing the Works and/or the costs which any Stakeholder may incur directly or indirectly arising out of the Works.
11.5 Participants to develop proposals with Stakeholders
Without prejudice to clause 11.2, the Participants will use reasonable endeavours to initiate the development of and to develop proposals jointly with any Stakeholder to achieve capital or operating cost savings for:
11.5.1 any Stakeholder;
11.5.2 any Participant; and/or
11.5.3 the Owner.
11.6 Owner’s direction in respect of a proposal
11.6.1 The ALT must refer to the Owner any proposals agreed with a Stakeholder in accordance with clause 11.5.
11.6.2 Following receipt of a proposal under clause 11.6.1 the Owner may:
11.6.2.1 issue a direction under clause 28 to proceed with the proposal; or
11.6.2.2 direct the ALT not to proceed with the proposal.
11.7 Costs of Stakeholder attendance and representations
11.7.1 The Participants’ costs in complying with this clause 11 are Actual Cost and do not give rise to any adjustment of the Target Price, Date for Completion or Key Result Areas.
11.7.2 The Owner and any Stakeholder must bear their own costs of complying with this clause 11. The Owner may enter into separate arrangements with any Stakeholder to pay for such attendance, representations and proposals.
11.8 Stakeholder is not a Party
11.8.1 No Stakeholder has any rights or obligations under this Agreement. As such, no Stakeholder is required to act in Good Faith and the provisions of clauses 6.2 and 6.3 do not apply to any issue arising between a Stakeholder and a Participant.
11.8.2 For the avoidance of doubt, this clause 11 is not intended to nor does create any liability of a Participant to any Stakeholder.
Part 3 SECTIONS
12. SECTIONS
12.1 Instruction of Sections
12.1.1 Subject to clause 12.1.8, the Parties acknowledge that, this Agreement is made on the basis that the Owner intends to instruct the Project by way of Sections and/or Section Elements (and any such Section may contain one or more Section Elements).
12.1.2 Sections and Section Elements may be:
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12.1.2.1 identified in Schedule 2 (Sections); and/or
12.1.2.2 instructed under this clause 12.
12.1.3 If the Owner wishes to instruct a Section or Section Element, the Owner must issue a notice to the ALT seeking a proposal for that Section or Section Element (a "Section Development Notice").
12.1.4 The Parties acknowledge that, subject to clause 13.4, the instruction of any Section or Section Element to deliver the Project under this clause 12 is not a Scope Variation or otherwise a change to this Agreement.
12.1.5 A Section or Section Element identified in Schedule 2 (Sections) may:
12.1.5.1 contain a corresponding Section Proposal included as part of the Project Proposal appended to this Agreement at Schedule 9 (Project Proposal); or
12.1.5.2 the corresponding Section Proposal may be developed in accordance with this clause 12.
12.1.6 This clause 12 and clause 13 do not apply to any Section or Section Element identified in Schedule 2 (Sections) for which a Section Proposal is included as part of the Project Proposal appended to this Agreement at Schedule 9 (Project Proposal).
12.1.7 The Owner may from time to time require the:
12.1.7.1 development of all or part of an additional Section beyond that or those stated in Schedule 2 (Sections); or
12.1.7.2 the further development of all or part of a Section identified in Schedule 2 (Sections) or previously notified under this clause 12.1.
12.1.8 The Owner may at any time on or after the Commencement Date and notwithstanding any other provision of this Agreement (including Schedule 2 (Sections)):
12.1.8.1 not instruct any Section or Section Element under this clause 12 (and to deliver such outside this Agreement by any means and using any person); or
12.1.8.2 reject a Section Proposal in accordance with clause 13.3.3.
12.2 Section Element
12.2.1 A Section Development Notice may require the Participants to develop:
12.2.1.1 all of the design services and/or construction works required to achieve Completion of the relevant Section; or
12.2.1.2 part only of the design services and/or construction works which are required to achieve Completion of that Section (such services and/or works being referred to in this Agreement as a “Section Element”).
12.2.2 A Section may consist of two or more Section Elements notified under clause 12.1 at the same or different times.
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12.2.3 By notifying a Section Element for any Section under clause 12.1, the Owner does not warrant that it will notify any further Section Elements for that Section and, for the avoidance of doubt, the Owner may not notify sufficient Section Elements to achieve Completion of any Section.
12.3 Owner’s Brief
12.3.1 With each Section Development Notice, the Owner must attach a brief setting out the:
12.3.1.1 summary of the scope of design services and/or construction works comprising the Section or Section Element (providing that, for the avoidance of doubt, the Participants are responsible for determining and including within the relevant Section Proposal the extent and nature of all services and/or work required to deliver that Section or Section Element and the Owner is not responsible for any error or omission in such summary);
12.3.1.2 the requirements for completion of that Section or Section Element for the purpose of clause 25.2.2;
12.3.1.3 proposed dates for commencement and Dates for Completion of the Work (if the Owner wishes to specify such dates);
12.3.1.4 proposed amendments to the VFM Statement specific to the Section or Section Element;
12.3.1.5 time for submission of that Section Proposal;
12.3.1.6 Owner’s budget for the Participants’ Reimbursable Costs of preparing the Section Proposal which is not to be exceeded without the prior approval of the Owner; and
12.3.1.7 required period of validity of the Section Proposal,
(referred to in this Agreement as the “Owner’s Brief”).
12.3.2 For the avoidance of doubt, the Owner’s Brief does not form part of the VFM Statement or constitute a direction for the purpose of clause 28, and is issued for the sole purpose of the Participants preparing a Section Proposal and is disregarded for all purposes of this Agreement (other than clause 12.3.1.6) upon issue of the relevant Project Approval Notice or the rejection of that Section Proposal under clause 13.5.
12.4 Revisions to the Owner’s Brief
Without prejudice to the Owner’s rights under clause 28, the Owner may at any time issue to the ALT a revised Owner’s Brief under clause 12.1.3 for any Section Proposal (including an increased or reduced budget under clause 12.3.1.6, provided such revision does not reduce that budget below the amount of Reimbursable Costs incurred by the Participants at the date of such revision).
13. SECTION PROPOSALS
13.1 Preparation of a Section Proposal
If the Owner issues a Section Development Notice, the ALT must submit to the Owner a Section or Section Element Proposal which:
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13.1.1 meets the requirements of the Owner’s Brief (subject to clause 13.1.2); and
13.1.2 contains:
13.1.2.1 outline proposals for the design and/or construction of the Works comprised in the Section or Section Element;
13.1.2.2 the proposed Date(s) for Completion;
13.1.2.3 the proposed Section Target Price(s);
13.1.2.4 any proposed adjustment to the Key Result Areas; and
13.1.2.5 full details of the Reimbursable Costs incurred in producing that Section Proposal,
and identifying clearly and explicitly all aspects (if any) in which that Section Proposal does not meet the requirements of the relevant Owner’s Brief (including the proposed amendments to the VFM Statement and the project proposal).
13.2 NOPs’ Costs of Preparing a Section Proposal
13.2.1 Each NOP is entitled to be paid its:
13.2.1.1 Actual Cost in accordance Schedule 10 (Actual Cost); and
13.2.1.2 Overhead and Profit in accordance with Schedule 11 (Fee),
of preparing each Section Proposal required under clause 12 in accordance with clause 30 and Schedule 14 (Payment Procedures), subject to not exceeding the Owner’s budget notified from time to time in accordance with clause 12.3.1.6.
13.2.2 For any Section, Schedule 11 (Fee) may provide that a NOP’s Overhead in relation to the Actual Cost of preparing a Section Proposal for that Section is:
13.2.2.1 payable with and as Actual Cost is payable in accordance with this Agreement during preparation of that Section Proposal; or
13.2.2.2 conditional on that Section Proposal being accepted by the Owner in accordance with clause 13.3.2,
in any such case, as more particularly described in Schedule 11 (Fee).
13.2.3 For any Section, Schedule 11 (Fee) may provide that a NOP’s Profit in relation to the Actual Cost of preparing a Section Proposal for that Section is:
13.2.3.1 payable with and as Actual Cost is payable in accordance with this Agreement during preparation of that Section Proposal;
13.2.3.2 conditional on that Section Proposal being accepted by the Owner in accordance with clause 13.3.2; or
13.2.3.3 nil, such that no profit is recoverable in relation to the Actual Cost of preparing that Section Proposal,
in any such case, as more particularly described in Schedule 11 (Fee).
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13.3 Review of a Section Proposal
On receipt of a Section Proposal (including a revised Section Proposal) the Owner must:
13.3.1 query, discuss or explore any aspect of that Section Proposal with the ALT, and request a revised (or further revised) Section Proposal;
13.3.2 accept that Section Proposal; or
13.3.3 reject that Section Proposal.
13.4 Approval of a Section Proposal
If the Owner accepts a Section Proposal, the Owner must promptly issue a notice (“Proposal Approval Notice”) to the ALT confirming such approval and appending the approved Section Proposal.
13.5 Rejection of a Section Proposal
If the Owner rejects a Section Proposal, the Owner shall notify the ALT, the Target Price will be established or adjusted (as the case may be) 3 to include only the Reimbursable Costs of providing that Sectional Proposal and the Owner shall pay only the Reimbursable Costs of providing that Section Proposal.
13.6 Revision of a Section Proposal
If the Owner requires revision of a Section Proposal (whether or not the Owner’s Brief is amended pursuant to clause 12.4), the Owner shall notify the ALT and the ALT shall prepare a revised Section Proposal in accordance with clause 13.1.
13.7 Effect of a Proposal Approval Notice
Upon receipt of a Proposal Approval Notice by the ALT:
13.7.1 the ALT must immediately notify each of the Participants in writing of such approval attaching a copy of the relevant Section Proposal and Proposal Approval Notices;
13.7.2 the Participants will carry out the relevant design services and/or construction works (as the case may be)4 by the Date for Completion in accordance with that Section Proposal;
13.7.3 such design services and/or construction works will form all or part (as the case may be) of the Works for the relevant Section and the provisions of this Agreement will apply to such Works;
13.7.4 the Target Price will be established or adjusted (as the case may be)5 in accordance with that Proposal Approval Notice and shall include the:
13.7.4.1 Reimbursable Costs incurred in producing that Section Proposal; and
13.7.4.2 the Section Target Price; and
3 NOTE: this may depend on the Risk or Reward Regime commercial model 4 NOTE: this may depend on the Risk or Reward Regime commercial model 5 NOTE: this may depend on the Risk or Reward Regime commercial model
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13.7.5 the Date for Completion and Key Result Areas of the relevant Section will be established or adjusted (as the case may be) in accordance with the Proposal Approval Notice as an Adjustment Event.
13.8 VFM Statement
The Owner must issue with each Section Approval Notice:
13.8.1 the revised VFM Statement; or
13.8.2 confirmation that the VFM Statement is not amended,
(as the case may be) which is in accordance with the:
13.8.3 proposed amendments to the VFM Statement included within the Owner’s Brief (if any); and
13.8.4 as amended by any aspects of the Section Proposal accepted by the Owner pursuant to clause 13.3.2.
13.9 Discretion on Approval of Section Proposals
13.9.1 The Participants acknowledge that the Owner may at any time in its sole and unfettered discretion exercise its election under clause 13.2.1 and may elect not to proceed with the design services or construction works covered by any Section Development Notice or may have those design services or construction works carried out by others and by any means.
13.9.2 Save as expressly set out in this Agreement, the Owner is not liable for any losses, damages or claims suffered by the Participants arising from any or all proposed design services or construction works not being delivered under this Agreement, except for the payment of Reimbursable Costs in accordance with this Agreement.
13.10 Design responsibility for Section Proposals
The Participants are entirely responsible for the design contained in any Section Proposal and must undertake such design in accordance with the standard of design required at clause 14.2.
Part 4 DESIGN PHASE
14. DESIGN OF THE WORKS
14.1 Instruction by the ALT
The Participants must carry out the design of the Works in accordance with this Agreement and as directed by the ALT.
14.2 Standard of design
Subject to clause 14.5, the Participants must ensure that design of the Works is undertaken by it:
14.2.1 so as to enable the Works to be completed at the lowest Reimbursable Cost consistent with meeting all the requirements of this Agreement (including the VfM Statement);
14.2.2 with Diligence; and
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14.2.3 in accordance with:
14.2.3.1 the commitments in clause 5;
14.2.3.2 the VFM Statement;
14.2.3.3 the relevant Proposal;
14.2.3.4 the Scope of Works;
14.2.3.5 all applicable Standards and Statutory Regulations; and
14.2.3.6 all requirements of the Design Authority insofar as ensuring that all applicable Standards and Statutory Regulations are met.
14.3 Design Authority
Nothing in this Agreement fetters the Design Authority’s ability to act in accordance with any Statutory Requirements or Standards of the Owner or in any way restrict the ability of such person to comment, reject or disapprove any Documentation as though that person was the Owner.
14.4 Owner is responsible for the contents of the VFM Statement
The Participants are not responsible for the contents of the VFM Statement.
14.5 Participants’ Design Responsibility
14.5.1 Subject to clause 14.4, the Participants are responsible for the entire design of the Works including all design:
14.5.1.1 in the relevant Proposal;
14.5.1.2 developed in accordance with this Agreement; and
14.5.1.3 provided by the Owner for the Works (whether before or after the Commencement Date or the date of any Proposal Approval Notice).
14.5.2 The Participants must ensure that the design of the Works meets the VFM Statement.
14.5.3 Subject to clause 14.4, any error, omission and/or discrepancy:
14.5.3.1 between the VFM Statement and any Participant Document;
14.5.3.2 between a Statutory Requirement and any Participant Document; or
14.5.3.3 within or between any Participant Document,
must be corrected by the Participants as directed by the ALT to meet the VFM Statement and on a Best For Project basis. Any such correction is not an Adjustment Event.
14.5.4 For the avoidance of doubt, any failure of the design of the Works to comply with this clause 14 is a Defect and is subject to clauses 6.2 and 6.3.
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14.6 Whole of Life Cost
14.6.1 Subject to clause 14.6.2, the Participants must design the Works to minimise the whole of life cost of the Works having regard to the:
14.6.1.1 requirements of the VFM Statement;
14.6.1.2 operating and maintenance requirement stated or reasonably inferred for the use of the Works by the Owner; and
14.6.1.3 design lives stated or reasonably inferred for each component of the Works.
14.6.2 Nothing in clause 14.6 requires any Participant to materially vary the design of the Project insofar as it is contained in the relevant Proposal, and the Participants do not warrant under clause 14.6.1 that any reduction in whole of life costs will arise when the Works are placed into operation.
14.7 Exclusion of fitness for purpose
14.7.1 Each Participant warrants that the Works in each Section and Section Element (if any) will at the relevant Date of Completion, comply with any performance specification or requirement included or referred to in the VFM Statement or Proposal or otherwise required by this Agreement for that Section or Section Element, provided always that nothing in this Agreement is be construed as imposing a fitness for purpose obligation for the Works in that Section or Section Element.
14.7.2 For the avoidance of doubt, a failure to meet any requirement of this clause 14 or any other requirement of this Agreement may constitute a Defect notwithstanding that the Participants carried out the Works with Diligence.
Part 5 WORKS PHASE
15. COMMENCEMENT OF THE WORKS
15.1 Instruction by the ALT
The Participants must carry out and complete the construction of the Works in accordance with this Agreement and as directed by the ALT.
15.2 Commencement of the Works
Subject to the provisions in respect of track possessions at clause 23, each Participant may only commence the Works on the Site to the extent that:
15.2.1 prior notice of such commencement has been given by the ALT to the Owner;
15.2.2 the Owner or the relevant Participant has procured insurance pursuant to clause 38 which provides cover in respect of any aspect of carrying out the Works at the Site by that Participant;
15.2.3 the Principal Contractor has been appointed in accordance with clause 19.1; or
15.2.4 that Participant has received all Consents or access rights required to lawfully commence the Works at the Site, whether such are to be procured by that or any other Participant or the Owner.
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16. SITE
16.1 Access to Sites and Consents
16.1.1 Subject to the provisions in respect of track possessions at clause 23, the Participants are responsible for obtaining all:
16.1.1.1 access to and within the Site (including access from the nearest public highway to the Site); and
16.1.1.2 Consents,
required to deliver the Works and discharge all the Participants obligations under this Agreement, except to the extent to be provided by the Owner pursuant to clause 16.1.2.
16.1.2 Subject to the provisions in respect of track possessions at clause 23, the Owner will procure for the benefit of the Participants and their subcontractors, suppliers, agents and employees (of any tier):
16.1.2.1 non-exclusive access to and/or within the Site (or part thereof); and
16.1.2.2 necessary Consents,
to the extent and during the dates stated in the relevant Proposal.
16.1.3 Except as provided in clause 16.1.2 and subject to the provisions in respect of track possessions at clause 23, the Owner has no obligation to procure any access to or rights over land or any Consents required in connection with the Project (whether or not such are in the ownership, possession or control of the Owner).
16.1.4 Any third party or statutory fees, expenses and/or charges properly and reasonably incurred by the Participants (including the Owner Participant) in obtaining Consents and/or non-exclusive access in accordance with this clause 16.1 are to be treated as Actual Cost.
16.2 Access for the Owner
16.2.1 Subject to the provisions in respect of track possessions at clause 23, the Owner, the Owner’s employees and agents and any other person nominated by the Owner may at any time have access to any part of any Site or any other areas where the Participants are performing the Works for any purpose.
16.2.2 At all reasonable times, the Participants will give the Owner and any other person authorised in writing by the Owner access to the Site or any place where Works are being carried out or Materials or Construction Plant are being prepared or stored.
16.2.3 In exercising any right of access under this clause 16.2, the Owner must, and must ensure that its employees, agents and invitees, comply with the relevant Site procedures, security requirements and health, safety and Environmental conditions.
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16.3 The Owner’s other Contractors
16.3.1 The Participants acknowledge that the Owner may arrange for other contractors to execute works or services on or adjacent to the Site concurrently with the performance of the Works.
16.3.2 The Participants must cooperate with the other contractors referred to at clause 16.3.1 to ensure the coordination of the works or services of the other contractors with the performance of the Works by the Participants and compliance with the Participants’ obligations under this Agreement and to facilitate the works or services of the other contractors.
17. CONSTRUCTION OF THE WORKS
17.1 Quality of the Works
Without prejudice to their obligations in respect of design of the Works at clause 14, the Participants must ensure that the Works are constructed:
17.1.1 so as to enable the Works to be completed at the lowest Reimbursable Cost consistent with meeting all the requirements of this Agreement;
17.1.2 with Diligence; and
17.1.3 in accordance:
17.1.3.1 the commitments in clause 5;
17.1.3.2 the VFM Statement;
17.1.3.3 any relevant Proposal;
17.1.3.4 the Scope of Works;
17.1.3.5 all applicable Standards and Statutory Regulations; and
17.1.3.6 all requirements of the Design Authority insofar as ensuring that all applicable Standards and Statutory Regulations are met.
17.2 Project Management System
The Participants must implement and comply with the Project Management System in performing the Works.
17.3 Care of the Works
From the Commencement Date or date of the relevant Proposal Approval Notice (as the case may be) and until the Date of Completion, the Participants are responsible for the care of the Works.
17.4 Health and safety measures to be taken by the Participants
Without limiting any other obligations of the Participants under this Agreement relating to health and safety, in performing the Works the Participants must ensure compliance at all times with the Network Rail Lifesaving Rules from time to time as published at https://safety.networkrail.co.uk/Commitment-and-Rules/Lifesaving-Rules or as otherwise notified by the Owner.
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17.5 Prevention of nuisance and environmental damage
The Participants must ensure that the Works:
17.5.1 do not cause any unlawful damage to or pollution of the Environment; and
17.5.2 cause as little disturbance as possible (having regard to the nature of the Works) to the general public, the Owner, the Owner’s employees and other contractors and service providers engaged by the Owner.
18. SITE SECURITY
18.1 Appointment of Relevant NOP by ALT
18.1.1 The ALT must promptly after the Commencement Date and before any work or services are performed at the Site appoint a NOP (the “Relevant NOP”) to be responsible for site security under this clause 18 in relation to all or any part of the Site (the “Relevant Part”).
18.1.2 The ALT may decide that a single Relevant NOP is appointed for the entirety of the Site (such that the Relevant Part in that case is the entire Site) or that a different Relevant NOP is appointed for each Relevant Part within the Site.
18.1.3 The ALT may amend an appointment of a Relevant NOP from time to time, including amending the number and extent of Relevant NOPs and/or Relevant Parts, providing that at all times the ALT ensures it has appointed a Relevant NOP for every part of the Site.
18.1.4 The ALT must concurrently notify the Owner of each appointment of a Relevant NOP and its Relevant Part, including any amendment thereof from time to time.
18.2 Prevention of unauthorised access
18.2.1 Each Relevant NOP must take all reasonable steps to prevent unauthorised persons being admitted to the Relevant Part.
18.2.2 If the Owner gives a Relevant NOP notice that any person is not to be admitted to the Relevant Part, the Relevant NOP must take all practicable steps to prevent that person being admitted.
18.3 Access over the Owner’s land
18.3.1 Where access to the Site (and each Relevant Part thereof) is required by any NOP by way of the Owner’s land, the route of such access must submitted by the Alliance Manager for approval by the Owner and no such access is permitted until such approval is granted.
18.3.2 Each Relevant NOP is responsible for ensuring that no person employed by any Participant trespasses beyond the agreed limits of the working area or access route within or adjoining the Relevant Part.
18.4 Trespass onto the railway
Each Relevant NOP must provide and maintain all necessary temporary fencing required to prevent trespass on the railway or neighbouring land in or adjoining the Relevant Part and which is in accordance with all requirements of this Agreement.
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18.5 Issue of Owner passes
18.5.1 No person employed or engaged in connection with the Works by any Participant (or any of their subcontractors of any tier) or any of their visitors will be permitted to enter any Relevant Part unless the Owner has issued to the Relevant NOP in respect of that person a pass (in the form notified by the Owner from time to time), following a request to do so by the Relevant NOP.
18.5.2 Each Relevant NOP must submit to the Owner a list of the names of the relevant employees and other persons issued or to be issued with passes under this clause 18.5 in relation to the Relevant Part, and any other information which the Owner reasonably requires in this connection.
18.5.3 All passes issued under this clause 18.5 must be returned at any time on the demand of the Owner and in any case on the Date of Completion.
18.6 Record of visitors
The Relevant NOP must maintain a record of all visitors to each Relevant Part and must, if and when instructed by the Owner, give to the Owner a list of names and addresses of all persons who are or may be at any time concerned with the Works or any part thereof in relation to that Relevant Part, specifying the capacities in which they are so concerned, and giving such other particulars as the Owner may reasonably require.
19. CDM REGULATIONS
19.1 Alliance as only client
The Owner acknowledges that it is the client in accordance with Regulation 4 of the CDM Regulations for the purpose of the Project.
19.2 Principal Designer
The Owner will appoint and nominate a Principal Designer for all purposes of the CDM Regulations for each Relevant Portion. The Owner will be entitled to appoint one or more NOPs as the Principal Designer in respect of all or part of the Site (the “Relevant Portion”).
19.3 Principal Contractor
19.3.1 Immediately following the Commencement Date and before any work or services are performed at the Site, the Owner must appoint one or more NOPs as the Principal Contractor in respect of the Relevant Portion.
19.3.2 The Owner:
19.3.2.1 may, from time to time, terminate or amend any appointment of a NOP as the Principal Contractor, or enter into a new appointment of a NOP as the Principal Contractor, including by amending any Relevant Portion;
19.3.2.2 must ensure that in respect of each Relevant Portion, there is a Principal Contractor appointed at all times from the initial appointment under clause 19.3.1 until the end of the Defects Correction Period (or later as may be required by clause 26.5.2); and
19.3.2.3 must ensure that all necessary authority is given to allow each NOP appointed as a Principal Contractor to discharge the responsibilities imposed on the Principal Contractor by the CDM Regulations in respect of the Relevant Portion.
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19.3.3 Each NOP appointed as a Principal Contractor will complete all forms and take any other action required to accept its appointment in relation to the Relevant Portion.
19.3.4 Each NOP appointed as a Principal Contractor must discharge and perform its responsibilities and functions as a Principal Contractor in respect of the performance of the Works under the CDM Regulations in relation to the Relevant Portion.
19.3.5 Each NOP appointed as a Principal Contractor for a Relevant Portion warrants to the other Participants that it is competent to perform all the duties required of a Principal Contractor under the CDM Regulations for that appointment, including liaising with the CDM Coordinator.
19.4 Other designers and contractors
The ALT will notify the Owner of each designer and contractor it or the other NOPs intend to appoint for the purpose of the CDM Regulations for each Relevant Portion and shall confirm to the Owner that it has satisfied itself that each designer and contractor complies with the conditions set out in regulation 8(1) of the CDM Regulations and if requested to do so by the Owner shall provide evidence of such compliance.
19.5 Compliance with directions
Each Participant will, when accessing any Relevant Portion:
19.5.1 comply with directions given by the Principal Designer or Principal Contractor under the CDM Regulations in relation to the Relevant Portion; and
19.5.2 ensure its Affiliated Undertakings and Subcontractors do likewise.
20. STATUTORY REQUIREMENTS AND CONSENTS
20.1 Compliance with Statutory Requirements and Consents
Subject to clause 16.1.2, the Participants must:
20.1.1 obtain and comply with all Consents necessary to perform each particular portion of the Works prior to undertaking that particular portion of the Works;
20.1.2 comply with all Statutory Requirements that affect or relate to the performance of the Works; and
20.1.3 pay all costs, charges, fees, compensation and other amounts required to obtain and comply with all Consents and Statutory Requirements pursuant to this clause 20.1.
20.2 Enforcement and exceptions to clauses 6.2 and 6.3
Notwithstanding clauses 6.2 and 6.3 (but subject to any determination to the contrary made by the ALT under clause 6.4.4), a failure by a Participant to comply with the requirements of clause 20 confers on the other Participants an enforceable right at law to seek any one of or a combination of specific performance, injunction or damages and, to the extent that any right under an Act of Parliament otherwise may be excluded by this Agreement, under that Act of Parliament.
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21. SUBCONTRACTING
21.1 Subcontracting to be authorised by the ALT
21.1.1 All subcontracting (of any tier) by the Participants must be as set out in the Project Proposal or any relevant Section Proposal or as agreed by the ALT.
21.1.2 For the purpose of this clause 21, the ALT or the AMT (as the case may be) may agree criteria for subcontracts (of any tier) which do not need separate notification or agreement under clause 5.6.
21.2 Subcontracting on a Best For Project basis
Save in respect of any subcontract between a Participant and its Supply Chain Partner or Implementation Works Subcontractor, Subcontracts may only be entered into by any or all of the Participants on a Best For Project basis and otherwise in accordance with the Contracting Strategy.
21.3 Subcontracting with connected persons
The Participants recognise that difficulties may arise in the proper calculation of Actual Cost if one or more of the Participants enters into a contract, arrangement or understanding related to this Agreement with a person that is in any way related to or associated with the Participant concerned. The Participants agree that before any of them enters into any contract, arrangement or understanding with any person which is in any way related to or associated with the Participant and the Works, they must first seek the approval of the ALT to that contract, arrangement or understanding.
22. IMPLEMENTATION WORKS SUBCONTRACT
22.1 Existence of Implementation Works Subcontract
To the extent that:
22.1.1 the Owner has entered into an Implementation Works Subcontract in connection with the Works prior to the Commencement Date or date of the relevant Proposal Approval Notice (as the case may be); and
22.1.2 those Implementation Works are described in the relevant Proposal,
the provisions of clause 22.2 apply.
22.2 Incorporation of Implementation Works Subcontract
22.2.1 Implementation Works are to be treated as part of the Works and to have been procured by the Participants under this Agreement.
22.2.2 An Implementation Works Subcontract is to be treated as a Subcontract entered into by the Owner Participant under this Agreement in compliance with the Contracting Strategy for the Works and with the approval of the ALT, and:
22.2.2.1 the Owner Participant is to be treated as having been the counterparty to the Implementation Works Subcontractor under an Implementation Works Subcontract at all times prior to the Date of Commencement or date of the relevant Proposal Approval Notice (as the case may be);
22.2.2.2 all payments to or from an Implementation Works Subcontractor under its Implementation Works Subcontract prior to the
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Commencement Date or date of the relevant Proposal Approval Notice (as the case may be) are to be treated as having been made or received under a Subcontract for the purpose of this Agreement, and all amounts paid or incurred by the Owner under that Implementation Works Subcontract are to be treated as incurred by the Owner Participant under a Subcontract for the purpose of this Agreement; and
22.2.2.3 any right, benefit, liability or obligation of the Owner as counterparty to an Implementation Works Subcontract arising prior to the Commencement Date or date of the relevant Proposal Approval Notice (as the case may be) will be treated thereafter for the purpose of this Agreement as a right, benefit, liability or obligation of the Owner Participant under a Subcontract.
22.2.3 Without prejudice to clauses 22.1 and 22.2, the ALT may decide to request the Owner to seek to:
22.2.3.1 amend or terminate any Implementation Works Subcontract at any time after the Commencement Date or date of the relevant Proposal Approval Notice (as the case may be);
22.2.3.2 procure any outstanding Implementation Works relating to any Implementation Works Subcontract in such other manner as the Participants agree; and/or
22.2.3.3 novate any Implementation Works Subcontract to a NOP.
23. TRACK POSSESSIONS
23.1 Track possessions as stated in the relevant Proposal
23.1.1 The Participants are entitled to have, and are treated as having, allowed for such speed restrictions, track possession or isolation requirements in relation to the Site as are specified in the relevant Proposal.
23.1.2 In the event the Participants require any additional or adjusted speed restrictions, track possession or isolation requirements or become aware that any such requirement is not needed (in whole or in part) the ALT may issue a notice to the Owner requesting such additional, adjusted or cancelled requirements in accordance with the Owner’s current planning procedures (unless otherwise required by this Agreement) in advance of the proposed commencement of work on or near any railway lines (or any part of the Site which the Owner has designated as falling within the railway environment).
23.2 Additional, adjusted or cancelled track possessions
23.2.1 While the Owner will use reasonable endeavours to obtain any additional, adjusted and/or cancelled requirements requested by the Participants pursuant to clause 23.1 by the date and time requested, it gives no warranty in that regard.
23.2.2 The costs of obtaining any additional, adjusted and/or cancelled requirements under this clause 23.2 (including any amount payable to Third Party as a result thereof) which are reasonably and actually incurred by the Owner are to be treated as Actual Cost incurred by the Owner Participant and do not give rise to any adjustment to the Target Price.
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23.3 Owner’s right to cancel or adjust track possessions
23.3.1 The Owner reserves the right to cancel or alter the dates and times of the agreed speed restrictions, track possessions or isolations at short notice if this proves necessary because of any emergency affecting the safe or uninterrupted running of rail traffic or other operational reasons.
23.3.2 If a cancellation or alteration occurs under clause 23.3.1:
23.3.2.1 the Owner will use reasonable endeavours to arrange alternative arrangements as soon as the Owner’s programme permits; and
23.3.2.2 unless this arises as a result of any act or omission of a Participant, such will be deemed to be a Scope Variation, subject to the requirements of clause 28.4 of this Agreement being satisfied.
23.3.3 Where such cancellation or alteration arises as a result of any act or omission of a Participant the consequences arising therefrom are Actual Cost and do not give rise to any adjustment to the Target Price.
23.4 Adequate arrangements to complete track possessions
Where part of the Works has to be carried out during an agreed period of a speed restriction, track possession or isolation, the Participants must ensure that such part can commence as programmed, and can be completed as early as possible, and in any case within that period.
23.5 Cancellation of track possessions due to Participant default
23.5.1 Prior to the commencement of any speed restriction, track possession or isolation, if the Owner considers that the Participants have failed to comply with the requirements of clause 23.4, it may at its discretion cancel the speed restriction, track possession or isolation, or reduce the extent of the work that the Participants may carry out during such speed restriction, track possession or isolation, and must notify the Participants accordingly.
23.5.2 A cancellation under clause 23.5 and the consequences arising therefrom are Actual Cost and does not give rise to any adjustment to the Target Price.
23.5.3 The Participants acknowledge that the Owner may incur additional costs as a result of the requirement to use and/or obtain additional speed restrictions, track possessions or isolations in accordance with this clause 23.5, and that the amount of such costs reasonably and actually incurred by the Owner are to be treated as Actual Cost incurred by the Owner Participant and do not give rise to any adjustment to the Target Price.
23.6 Adjustment of track possessions due to Participant default
23.6.1 If, during a speed restriction, track possession or isolation, the Owner is of the opinion that the Participants will be unable to complete the planned work (or any revision thereof proposed by the Participants) to its satisfaction so as to permit the termination of the speed restriction, track possession or isolation at the time agreed, the Owner may direct the Participants to reduce the extent of or vary the dates and times of the work to be carried out during such speed restriction, track possession or isolation.
23.6.2 A reduction or variation directed under clause 23.6 and the consequences arising therefrom (including the Owner’s costs reasonably and actually incurred
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in connection with clause 23.6.1) are to be treated as Actual Cost incurred by the Owner Participant and do not give rise to any adjustment to the Target Price.
23.6.3 The Participants acknowledge that the Owner may incur additional costs as a result of the requirement to use and/or obtain additional speed restrictions, track possessions or isolations in accordance with this clause 23.6, and that the amount of such costs reasonably and actually incurred by the Owner are to be treated as Actual Cost incurred by the Owner Participant and do not give rise to any adjustment to the Target Price.
23.7 Owner’s costs due to unplanned track interruptions
23.7.1 The Participants acknowledge that the Owner may incur:
23.7.1.1 Schedule 8 Costs; and
23.7.1.2 other liabilities,
under its contractual and regulatory arrangements with Third Parties (including passenger train and freight operators) caused by unplanned interruption in the use of track or station areas or other railway infrastructure in the performance of their obligations under this Agreement.
23.7.2 The cost treatment of Schedule 8 and/or other liabilities incurred by the Owner pursuant to clause 23.7.1 is set out in Schedule 10 (Actual Cost).
24. USE OF THE WORKS BY THE OWNER PRIOR TO COMPLETION
24.1 The Owner’s use of the Works pre-completion
The Owner may at any time direct use of any part of:
24.1.1 the Works in a Section (whether or not such part is completed); or
24.1.2 any existing rail infrastructure or assets within, over or adjoining the Site relating to that Section,
prior to Completion of that Section whether or not such use is contemplated in the relevant VFM Statement or Proposal.
25. COMPLETION
25.1 Obligation to complete the Works
For each Section, the Participants must perform the Works to reach Completion by the Date for Completion.
25.2 Completion of a Section Element
25.2.1 Notwithstanding any other provision in this Agreement, but subject to clauses 25.2.2 and 25.3, the provision of this clause 25 and clauses 26 and 27 and paragraph 4 of Schedule 14 (Payment Procedures) do not apply to any Section Element.
25.2.2 The ALT will promptly notify the Owner of Completion of each Section Element in accordance with (as the case may be):
25.2.2.1 the Project Proposal; or
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25.2.2.2 the relevant Proposal Notice and approved Section Proposal.
25.2.3 Where one or more Section Elements for a Section are instructed under this Agreement and the Final Section Element for that Section Element has not been instructed:
25.2.3.1 the Date for Completion of that Section is the Date for Completion of the last Section Element for that Section instructed; and
25.2.3.2 the Date of Completion of that Section is the Date of Completion of that Section Element.
25.3 Completion of a Final Section Element
Upon completion of a Final Section Element for any Section in accordance with clause 25.2.2, the provision of this clause 25 and clauses 26 and 27 and paragraph 4 of Schedule 14 (Payment Procedures) apply to the entirety of that Section, including to all services and/or works comprised in each Section Element of that Section.
25.4 Issue of Certificate of Completion
For each Section:
25.4.1 by no later than the date that is 20 Business Days before the date the ALT anticipates that Completion will be reached, the ALT must notify the Owner of the date when Completion is anticipated to be reached;
25.4.2 as soon as the ALT decides that Completion has been reached, it must notify the Owner of the date when Completion was reached; and
25.4.3 the Owner must within 20 Business Days after receiving the notification of Completion from the ALT, issue a certificate of Completion (“Certificate of Completion”) to the Participants, stating the Date of Completion as notified by the ALT.
25.5 ALT decides Completion has not been reached
Where the ALT decides that Completion for any Section has not been reached, the ALT must notify the Participants giving reasons for doing so following which the Participants must promptly address the matters so notified by the ALT as preventing Completion, and when those matters have been addressed or if the Participants consider they do not need addressing, the ALT must reconsider whether Completion has been reached.
25.6 Certificate of Completion does not constitute approval
The issue of a Certificate of Completion for any Section does not constitute approval of the Works in that Section.
25.7 No liability for delayed Completion
Without prejudice to each NOP’s and the Owner Participant’s right to recover Actual Cost in relation to such costs properly incurred by each of them after the Date for Completion for any Section in performing their respective obligations in accordance with this Agreement (including any costs incurred by the Owner under clause 23.7 which are to be treated as Actual Cost incurred by the Owner Participant), if Completion of that Section has not been reached by its Date for Completion, any and all losses, damages, costs and expenses suffered by the Owner arising out of the delay in reaching Completion of that Section are not recoverable by the Owner against the NOPs under this Agreement or otherwise.
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26. DEFECTS
26.1 Care of the Works during Defects Correction Period
For each Section, after the Date of Completion and until the end of the Defects Correction Period, the Participants remain responsible for the care of outstanding works and services (including the rectification of Defects during such period) forming part of the Works in that Section.
26.2 Rectifying Defects and completion of outstanding works
For each Section, the Participants are responsible for the:
26.2.1 completion of all parts of the Works in that Section which are not completed at the Date of Completion; and
26.2.2 rectification of all Defects existing at the Date of Completion for that Section or arising during the Defects Correction Period for that Section,
as soon as reasonably practicable to the reasonable satisfaction of the Owner and in any event before the end of the Defects Correction Period for that Section.
26.3 Actual Cost for rectifying Defects
The NOPs are entitled to the Actual Cost incurred in undertaking their responsibilities for the care of the Works, completing any outstanding Works and rectifying Defects under this clause 26 including during the Defects Correction Period.
26.4 Network Operation Issue and Defects
26.4.1 Without prejudice to the Owner’s Reserved Powers under clause 28.3, where a Defect or outstanding work pursuant to this clause 26 is causing a Network Operation Issue, either before or during the relevant Defects Correction Period, the Owner is entitled to direct the ALT to procure that the Participants undertake any works or services when and as the Owner considers necessary to prevent, address, alleviate or comply with (as applicable) that Network Operation Issue and the costs of doing so are Actual Cost and such do not give rise to any adjustment to the Target Price.
26.4.2 Where the ALT or Participants are unable or unwilling to carry out or procure the carrying out of any works or services which the Owner is entitled to direct under clause 26.4.1 (including where the Owner require such works or services to be carried out immediately), the Owner may carry out such works or services itself or procure the carrying out of such works or services by a Third Party and the Owner’s reasonable costs of doing so are to be treated as though they were Actual Cost incurred by the Owner Participant and do not give rise to any adjustment to the Target Price.
26.5 No liability for latent defects
26.5.1 The Participants must rectify a Defect identified as such before or during the relevant Defects Correction Period and which has not been rectified notwithstanding the end of that Defects Correction Period.
26.5.2 Subject to clause 26.5.1, if a Defect in any Section is identified or occurs at any time after the Section Final Certificate for that Section has been issued (whether it is a Defect which had not existed or which the Parties had not identified prior to the end of the relevant Defects Correction Period or a Defect which had previously been the subject of remedial works), notwithstanding any other provision in this Agreement, the Participants do not have any liability under this
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Agreement or otherwise to the Owner or any other Participant in respect of such Defect including in respect of any subsequent rectification, removal or mitigation of that Defect by the Owner or other consequences of such Defect.
26.6 Completion of the Project
For all purposes of this Agreement, Completion of the Project occurs when the last Section to be certified as being Complete is so certified.
27. SECTION FINAL CERTIFICATE
27.1 Issue of Section Final Certificate for each Section
The Section Final Certificate is issued for each Section in accordance with Schedule 14, and includes ascertainment and reconciliation of final payments due to or from each NOP and the Owner (as applicable).
27.2 Section Final Certificate is evidence that all payments have been made
Except in the case of Wilful Default, once payment has been made on the Section Final Certificate for any Section, that certificate is evidence that the Works in that Section have been completed in accordance with this Agreement on the Date of Section Final Completion for that Section and that all payments required to be made by the Owner or by each NOP (as the case may be) in respect of the Works in that Section have been made in full.
27.3 Final Completion of the Project
For all purposes of this Agreement, the Date of Project Final Completion is the Date of Section Final Completion as stated in the Section Final Certificate of the last Section to receive such certification under this Agreement.
Part 6 DIRECTIONS, SCOPE VARIATIONS AND ADJUSTMENT EVENTS
28. DIRECTIONS
28.1 Directions by the Owner’s Representative only
28.1.1 Any direction under this clause 28 (including a Scope Variation) may only be instructed by notice from the Owner’s Representative.
28.1.2 Any direction purported to be made by the Owner under this clause 28 which is made by a person (whether or not an employee of the Owner) who is not entitled to do so in accordance with clause 28.1.1 is to be disregarded by the Participants and must not be complied with, and any costs incurred by any Participant in complying with any such direction are not recoverable as Actual Cost.
28.1.3 The Participants may rely on clause 28.1.2 to refuse to comply with any direction purported to be made by the Owner which is not in accordance with clause 28.1.1.
28.2 Type of Directions
The Owner’s Representative may by notice to the ALT direct the Participants to:
28.2.1 change the Works;
28.2.2 increase, decrease or omit any part of the Works;
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28.2.3 change the character or quality of any material or work that will form part of the Works;
28.2.4 change the levels, lines, positions or dimensions of any part of the Works;
28.2.5 execute additional work, such additional work to be within the general scope of this Agreement;
28.2.6 demolish or remove material or work forming part of the Works no longer required by the Owner;
28.2.7 change, alter or amend the Scope of Works;
28.2.8 change any specified sequence, method or timing of construction; or
28.2.9 change the conditions under which the Works are to be carried out,
28.2.10 allow the Owner to use any part of:
28.2.10.1 the Works (whether or not such part is completed); or
28.2.10.2 any existing rail infrastructure or assets within, over or adjoining the Site,
prior to Completion whether or not such use is contemplated in the VFM Statement, Project Proposal or any Section Proposal,
and the Participants must, subject to obtaining any necessary Consent or amendment to an existing Consent and, in the case of a Scope Variation, the Owner’s Representative’s acknowledgement of receipt of the relevant Scope Variation Report issued by the ALT under clause 28.5.3, within a reasonable time, implement that direction.
28.3 Reserved Powers
28.3.1 Without prejudice to the Owner’s Representative’s rights under clause 28.1, the Participants acknowledge that the final decision on the following matters (“Reserved Powers”) is reserved for unilateral determination by the Owner’s Representative:
28.3.1.1 any decisions, directions or actions the Owner’s Representative determines are necessary following any event which significantly impacts on the whole or any part of the Works or the achievement of the VFM Statement;
28.3.1.2 any decisions, directions or actions the Owner’s Representative determines are necessary following the occurrence of a Network Operation Issue; and
28.3.1.3 any decision, direction, matter, approval or thing expressed under this Agreement as being at the discretion, or the like, of the Owner’s Representative.
28.3.2 For the avoidance of doubt, the exercise of any the Reserved Power may result in or amount to an Adjustment Event (including a Scope Variation).
28.4 Scope Variations
28.4.1 A scope change is a direction by the Owner’s Representative under this clause 28 which amounts to either:
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28.4.1.1 a significant change, amendment or alteration to the Scope of Works; or
28.4.1.2 a significant change to the fundamental requirements of the Works (including the conditions under which the Works are to be performed),
and is referred to in this Agreement as a “Scope Variation”.
28.4.2 Examples of when a direction by the Owner’s Representative in accordance with clauses 28 is also a Scope Variation are set out in the Scope Variation Benchmarking Guidelines.
28.4.3 The Participants acknowledge and agree that it is their expectation that Scope Variations are unlikely to occur during the performance of this Agreement.
28.5 Scope Variation Report
28.5.1 Where the AMT considers that a direction by the Owner under clause 28 is a Scope Variation, the AMT must, prior to implementation by the Participants of the direction, submit a scope change report (“Scope Variation Report”) to the ALT:
28.5.1.1 identifying the basis on which it considers the direction to be a Scope Variation;
28.5.1.2 providing submissions or recommendations that it believes are appropriate to reduce and/or optimise the impact of the direction on the Reimbursable Cost, the Participants’ performance against the Key Result Areas and the achievement of Completion by the Date for Completion and compliance by the Participants with the VFM Statement and the Alliance Charter; and
28.5.1.3 providing submissions or recommendations on any alteration to the Target Price, Key Result Areas and Date for Completion (as the case may be) which are required as a result of the direction.
28.5.2 The ALT will consider any Scope Variation Report submitted to it under clause 28.5 and determine whether the direction the subject of the Scope Variation Report is a Scope Variation having regard to:
28.5.2.1 the Works and the assumptions adopted by the Participants in developing the relevant Proposal; and
28.5.2.2 the Scope Variation Benchmarking Guidelines.
28.5.3 If the ALT determines that a direction the subject of the Scope Variation Report is a Scope Variation, the ALT must issue that Scope Variation Report to the Owner’s Representative.
28.5.4 Unless agreed otherwise with the Owner’s Representative, the ALT must ensure that no work on a Scope Variation is performed until the Owner’s Representative has acknowledged receipt of the Scope Variation Report and has elected whether or not the Participants should proceed with the relevant services or works.
28.6 Adjustment to the Target Price
28.6.1 Unless the direction is a Scope Variation, no direction by the Owner’s Representative under this clause 28 will result in a change to the Target Price, Key Result Areas or Date for Completion.
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28.6.2 Other than directions determined by the ALT to be a Scope Variation, the NOPs acknowledge and agree that an amount for directions by the Owner’s Representative of the kind contemplated by clause 28 is included in the Risk and Contingency Provision component of the Target Price.
28.7 Directions do not invalidate this Agreement
No direction by the Owner’s Representative under this clause 28 will invalidate this Agreement.
29. ADJUSTMENT EVENTS
29.1 No adjustment of Target Price except in accordance with clause 29
The Target Price is fixed and not subject to adjustment under this Agreement except in accordance with this clause 29.
29.2 ALT determines an Adjustment Event has occurred
If the ALT determines that an Adjustment Event has occurred, it must immediately notify the Owner of that determination.
29.3 ALT to determine adjustment to Target Price
29.3.1 Following or with any determination under clause 29.2, the ALT must working with the Alliance Auditor determine any adjustment to the Target Price, Key Result Areas and Date for Completion which needs to be made in accordance with this Agreement.
29.3.2 The ALT, in determining an adjustment to the Target Price, Key Result Areas and Date for Completion under clause 29.2, must have regard to:
29.3.2.1 the provisions of this Agreement (including the Scope Variation Benchmarking Guidelines and the Adjustment Event Guidelines).
29.3.2.2 the recommendations and verifications of the Alliance Auditor in respect of any such proposed adjustment;
29.3.2.3 the assumptions adopted by the Participants in the relevant Proposal (including the Target Price or any part thereof) so as to ensure that any adjustment to the Target Price, Key Result Areas or Date for Completion is Best For Project;
29.3.2.4 the Owner’s timing requirements and the Date for Completion being of fundamental importance in respect of the carrying out of the Works; and
29.3.2.5 any other matters considered relevant by the ALT in making a Best For Project determination.
29.3.3 Upon making any determination under this clause 29 the ALT must promptly notify the Owner of such determination.
29.4 Owner’s acknowledgement of adjustment to Target Price
Upon receipt of the ALT’s determination under clause 29.3, the Owner must promptly acknowledge receipt of the adjustment to the Date for Completion, Target Price and Key Result Areas as determined by the ALT.
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29.5 ALT may engage independent adviser
The ALT may engage an independent adviser to review and advise on any determination to be made by the ALT under this clause 29. The costs of the ALT engaging such an independent adviser are Actual Cost.
29.6 Participants to mitigate effects of an Adjustment Event
The Participants must take every reasonable measure available to them to:
29.6.1 mitigate or avoid any adverse or prejudicial effects; and/or
29.6.2 optimise any improvement or positive effects;
of the acts, events or circumstances giving rise to or contributing to the Adjustment Event.
Part 7 PAYMENT, REPORTING AND AUDITING
30. PAYMENT
30.1 General principles of payment
30.1.1 Payments are determined and made to or by each NOP individually.
30.1.2 Actual Cost determined in respect of the Owner Participant or the Owner under this Agreement are not payments made and are accounted for as notional payments for determining the Actual Cost incurred by the Owner Participant for the purposes of the Risk or Reward Regime.
30.2 Payment of Reimbursable Cost
Payments of Reimbursable Cost are determined in accordance with Schedules 10 (Actual Cost) and 11 (Fee) and paid under Schedule 14 (Payment Procedures).
30.3 Payment under Risk or Reward Regime
Payments under the Risk or Reward Regime are determined in accordance with Schedules 13 (Risk or Reward Regime) and paid under Schedule 14 (Payment Procedures).
30.4 Sole right to payment
Unless otherwise expressly provided in this Agreement, no matter what events, circumstances, contingencies, conditions, or degree of difficulty is encountered by the Participants in performing the Works, each NOP’s entitlement, and only entitlement, to payment by the Owner for the Works is as set out and determined in Schedules 8 (Actual Cost), 11 (Fee) and 13 (Risk or Reward Regime) and paid under Schedule 14 (Payment Procedures).
30.5 Payment is not evidence of satisfactory workmanship
Subject to clauses 27.2 and 42 and paragraph 4.6 of Schedule 14 (Payment Procedures), payment of monies is not evidence of the value of the Works, or that the Works have been executed satisfactorily, or an admission of liability, and is payment on account only.
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31. BENCHMARK PERFORMANCE OF THE PARTICIPANTS
31.1 Benchmarking to demonstrate value for money
31.1.1 The Participants acknowledge that it is the fundamental obligation of the Participants to demonstrate, ensure and deliver value for money in performing the Works.
31.1.2 To demonstrate that value for money outcomes are and will be achieved under this Agreement, the Participants have agreed that the Owner may benchmark the performance of each Participant against the performance of other alliances delivering other works or projects similar to the Project.
31.1.3 The Owner must share the results of any benchmarking exercise with the ALT unless it is able to demonstrate (acting reasonably) that disclosure of any information within the results would cause it to be in breach of a Statutory Requirement, a breach of recognised best practice corporate governance guidelines or its existing confidentiality obligations.
31.1.4 In the event that disclosure of any information contained within the benchmarking exercise by the Owner to the ALT would, in the reasonable opinion of the Owner, cause it to be in breach of a Statutory Requirement, a breach of recognised best practice corporate governance guidelines or its existing confidentiality obligations, the Owner shall only be required to share with the ALT a version of the results from which any such information has been redacted or deleted or provide it in a form where it would not breach such requirements (e.g. anonymised and/or aggregated where applicable).
31.2 Disclosure of information for benchmarking
31.2.1 Subject to any Statutory Requirements preventing disclosure of information, the Participants agree that, for the purposes of benchmarking the performance of the Participants, they will, in a manner consistent with the Alliance Charter, fully disclose all information relating to the actual outturn performance of all aspects of this Agreement, other than that which the ALT determines, in consultation with the Owner, is genuinely commercial in confidence or financially sensitive (“Sensitive Information”).
31.2.2 Where the ALT determines, in consultation with the Owner, that information is Sensitive Information, the ALT will determine an acceptable and appropriate manner to mask and/or protect the commercial in confidence or financially sensitive nature of the Sensitive Information but will still be obliged to share the Sensitive Information for the purposes of benchmarking the actual outturn performance of all aspects of this Agreement.
31.2.3 Any information determined by the ALT as being Sensitive Information must not be utilised or further disclosed by any member of the ALT outside of the ALT and must only be used by the members of the ALT solely for the purpose of performing their obligations as members of the ALT.
31.2.4 Any breach by any member of the ALT of the obligations set out in clause 31.2.3 is a Default by the Participant which that ALT member represents for the purpose of clause 34.1.
31.3 Exemption to disclosure for benchmarking
31.3.1 Nothing in clauses 31.1 and 31.2 will oblige a Participant to make a disclosure of information where the ALT determines that to do so would, or could potentially, involve a breach of a Statutory Requirement, a breach of recognised best
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practice corporate governance guidelines or a Participant’s existing confidentiality obligations.
31.3.2 In the event that a Participant seeks to invoke and rely upon the exemption from disclosure set out in clause 31.3.1, the ALT representative of that Participant must notify the other ALT representatives of the ALT of:
31.3.2.1 the nature of the information which the ALT representative intends not to disclose; and
31.3.2.2 the genuine reasons for non-disclosure,
and the ALT will consult with that Participant in order to determine whether the information can be provided in a form which would not breach a Statutory Requirement, recognised best practice corporate governance guidelines or that Participant’s existing confidentiality obligations or whether the exemption from disclosure set out in clause 31.3 will apply to the information.
32. REPORTS, RECORDS, ACCESS AND AUDIT
32.1 Retention of Records for each Project
32.1.1 The Participants must maintain for the Relevant Period:
32.1.1.1 an adequate internal control system (including policies, controls and procedures) for the effective planning, performance and reporting of the Works in accordance with this Agreement;
32.1.1.2 books of account kept in accordance with recognised accounting principles which, among other things, clearly show the amounts that are payable by the Owner under this Agreement and ledgers solely related to the performance of the Works; and
32.1.1.3 all of their records and other documentation referred to in this Agreement that relate to the Works, at the principal place of business in England of any NOP.
32.1.2 The Participants must maintain for the Relevant Period a complete set of:
32.1.2.1 all records which show how the Target Price was calculated and how any Adjustment Events were valued for the purposes of clause 28.7;
32.1.2.2 all purchase orders, invoices, accounts, records, bank statements, cost records, timesheets, expenses incurred (to the extent they relate to the Works) under good and accepted accounting principles showing all of the Actual Cost reasonably and actually incurred in the performance of the Works; and
32.1.2.3 all correspondence, tenders, Subcontracts, minutes of meetings, notes, reports, drawings, as-constructed information and all other documentation associated with the Works.
32.2 Audit by the Alliance Auditor
32.2.1 The ALT must promptly after the Commencement Date engage and thereafter maintain the appointment of an independent alliance auditor to undertake the regular audit of the Reimbursable Cost, the application of the Risk or Reward Regime and any audit of the type required or permitted under this clause 32.
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32.2.2 The minimum scope of audit is set out in the VFM Statement.
32.2.3 The ALT may appoint remove and replace an Alliance Auditor at any time, and must do so if an existing Alliance Auditor retires, dies or is otherwise removed.
32.2.4 The Alliance Auditor must undertake such audits as may be directed by the ALT and the costs of doing so are Actual Cost.
32.2.5 The Alliance Auditor may inspect and audit documentation referred to in clause 32.1 and during the period from Commencement Date to the Date of Section Final Completion:
32.2.5.1 at the times identified in the audit plan to be developed by the Alliance Auditor promptly after the Commencement Date and approved by the ALT; or
32.2.5.2 at any other time as required by the ALT.
32.2.6 The ALT must procure that the Alliance Auditor develops and thereafter maintains an audit plan promptly after his or her appointment.
32.2.7 The Owner may at any time require the ALT to procure that the Alliance Auditor carries out any audit permitted by this clause 32.2 within such period as the Owner may reasonably specify. Any costs incurred by the Owner or the Alliance Auditor in relation to any such request or audit are to be borne or paid by the Owner and are not Actual Cost.
32.2.8 The ALT must procure that any audit undertaken by the Alliance Auditor is made available to all Participants and the Owner (including for this purpose the Office of the Rail Regulator).
32.2.9 Each Participant and the Owner (but only to the extent such access relates to the audit of any Actual Cost incurred by the Owner or Owner Participant) must provide the Alliance Auditor with proper access to their personnel and facilities and all assistance required to enable the Alliance Auditor to undertake any audit of the kind set out in this clause 32.2.
32.2.10 For the purposes of this clause 32.2, the Participants and the Owner (but only to the extent such access relates to the audit of any Actual Cost incurred by the Owner or Owner Participant) will on request provide whatever records, documents, access, facilities or assistance is necessary to conduct whatever audit, inspection, transcription, investigation or copying is required by the Alliance Auditor for the purposes of an audit under this clause 32.2.
32.2.11 The Participant who holds the original of any of the records referred to in clause 32.1 must on request, make them available to the Alliance Auditor.
32.2.12 If an audit under this clause reveals that any Participant is in Default (as that term is defined in clause 34.1), then without limiting any other rights and obligations of a Participant, the Participant in Default is responsible for all costs incurred by the Alliance Auditor undertaking the audit and those costs are not Actual Cost for any Project and clause clauses 6.2 and 6.3 does not apply to the recovery of such costs.
32.2.13 In the course of an audit under clause 32.2, the Alliance Auditor may:
32.2.13.1 review and assess the reliability, integrity, timeliness and accuracy of financial operating information relating to the Works, and the means and systems used to identify, measure, classify and report such information; and
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32.2.13.2 interview relevant staff of the Participants and the Owner (but only to the extent such interview relates to the audit of any Actual Cost incurred by the Owner or any Participant).
32.2.14 At the conclusion of any audit under clause 32.2, the ALT must, acting reasonably, determine the actions (if any) required to be taken by any Participant to rectify problems, weaknesses, deficiencies or non-compliance detected during the audit.
32.2.15 Any records or documents provided to the Alliance Auditor or to which the Alliance Auditor has access to or any information obtained through any audit under this clause 32.2 must be treated as Confidential Information in accordance with clause 47.9.
32.2.16 If this Agreement is terminated or if a Defaulting Participant is excluded under clause 36 and Schedule 19 (Exclusion and Termination), each NOP or the NOP which is the Defaulting Participant (as the case may be) must give the Owner any records referred to in clause 32.1.1 and must allow the Owner access to those books of account and records for a period of 2 years after the last day of the Accounting Period to which the record relates.
32.3 Reporting Requirements
Unless otherwise stated in the relevant Proposal, the Participants must ensure that the Alliance Manager (using the AMT) prepares, as a minimum, the following reports for the Project:
32.3.1 work status reports;
32.3.2 Key Result Areas performance reports;
32.3.3 an updated health and safety report (including accident frequency reports and safety statistics as required by the VFM Statement and Proposal);
32.3.4 periodic earned value reports which must be prepared in relation to every Accounting Period and which must include:
32.3.4.1 a reconciliation, as at the date of the report, of the Reimbursable Cost of performing the Works against the Target Price;
32.3.4.2 any innovations or breakthroughs which have been made or opportunities which have been realised by the Participants in performing the Works and any innovations or breakthroughs or opportunities which are forecast to be made or realised by the Participants (including as set out in the Alliance Risk and Opportunity Report);
32.3.4.3 the Participants’ risk management performance in performing the Works as against the Risk and Contingency Provision; and
32.3.4.4 any material errors or mistakes which have been made in the development of the Target Price and identified by the Participants; and
32.3.5 periodic cash flow statements covering a 28 day rolling period relating to the Works, in a format and at times which are acceptable to the Owner.
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32.4 Content of Works Status Reports
The Participants must procure that Works Status Reports for the Works are submitted in such form and detail as is notified by the Owner showing:
32.4.1 work completed;
32.4.2 work to be completed;
32.4.3 summary of the Actual Cost relating to the work completed (including accrued costs);
32.4.4 the earned value calculation based upon the approved integrated programme;
32.4.5 forecast programme to Completion;
32.4.6 forecast Actual Cost to Completion and Final Completion;
32.4.7 update report of the Alliance Risk and Opportunity Report;
32.4.8 cash flow forecast up to Completion and Final Completion;
32.4.9 current change register for Scope Variations and Adjustment Events; and
32.4.10 current Section Target Prices and forecast [Gainshare and/or Painshare]6 (if any).
32.5 Reporting to the Owner
The results of any audit by the Alliance Auditor under clause 32.2 and each report prepared under clause 32.3 must be promptly copied to the Owner.
32.6 Cost control and recording
The ALT must ensure that cost control and cost recovery is in accordance with the relevant VFM Statement and Proposal.
Part 8 SUSPENSION, DEFAULT, EXPULSION AND TERMINATION
33. SUSPENSION
33.1 Suspension by the Participants
Unless agreed otherwise with the Owner, and without prejudice to the right of any NOP to suspend the whole or any part of the Works for non-payment, the Participants may only suspend the whole or any part of the Works if there is a real risk of:
33.1.1 injury to persons;
33.1.2 damage to the Environment in breach of any law or Statutory Requirement; or
33.1.3 material physical damage to any third party property or property of the Owner (other than the Works).
6 NOTE: this may depend on the Risk or Reward commercial model
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33.2 Suspension by the Owner
If the Owner considers that suspension of the whole or part of the Works is necessary or appropriate for any reason, the Owner may direct the Participants in writing to immediately suspend the whole or any part of the Works for the period specified by the Owner in writing.
33.3 Costs of suspension
The Owner must continue to pay any Reimbursable Cost due during the period of suspension for the relevant Project if:
33.3.1 the Owner directs suspension (other than as a result of a breach of this Agreement by a NOP or where the suspension is necessary to ensure that the Works comply with the requirements of this Agreement); or
33.3.2 the Participants suspend the whole or any part of the Works under clause 33.1.
33.4 Adjustment Event arising from certain suspensions
If the Owner directs suspension of the whole or any part of the Works (other than as a result of a breach of this Agreement by a Participant or where the suspension is necessary to ensure that the Works comply with the requirements of this Agreement), that suspension will be an Adjustment Event.
33.5 Re-mobilise after suspension
When the Owner becomes aware that the reason for suspension of the whole or any part of the Works no longer exists, the Owner must direct the Participants to recommence the whole or the relevant part of the Works and the Participants must recommence those Works at the time directed by the Owner or, if no time is stated, within a reasonable time after the direction.
34. DEFAULT NOTICE
34.1 Default by a Participant
34.1.1 Clause 34.2 or 34.5 applies if any Participant (“Defaulting Participant”):
34.1.1.1 commits a Wilful Default;
34.1.1.2 commits any material breach of clauses 32, 38, 43, 47.7, 47.8, 47.9, 47.10, 47.16, 47.17, 47.21 or 47.24 whether or not amounting to a Wilful Default;
34.1.1.3 commits a serious breach of clause 17.4, or law, standards or best practice applicable to the Works in relation to health and safety;
34.1.1.4 is the subject of an Insolvency Event; or
34.1.1.5 is the subject of any of the circumstances set out in regulation 89(1)(b) of the Utilities Contracts Regulations 2016 SI 2016/274 (“UCR”) or regulation 73(1)(b) of the Public Contracts Regulations 2015 SI 2015/102 (“PCR”) as applicable (in each case as amended from time to time),
(each a “Default”).
34.1.2 The relevant NOP shall notify the Owner in writing immediately upon becoming aware of the circumstances referred to in clause 34.1.1.5 applying.
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34.2 Default by the Owner
Clause 34.4 applies if the Owner is the subject of an Insolvency Event.
34.3 Default Notice due to Default by a NOP
Where a NOP is the Defaulting Participant, the Owner may give notice to the Defaulting Participant and each other Participant of:
34.3.1 the Default and of its intention to exercise its rights under paragraph 1.1.1 or 2.1.1 of Schedule 19 (Exclusion and Termination) on the expiration of 15 Business Days if the Default is capable of being rectified but is not rectified within the 15 Business Days period; or
34.3.2 its intention to exercise its rights under paragraph 1.1.1 or 2.1.1 of Schedule 19 (Exclusion and Termination) immediately if the Default is not capable of being rectified, or in the case of an Insolvency Event,
and a notice given under this clause 34.2 must specify that it is a Default Notice.
34.4 Default Notice due to Default by the Owner
Where the Owner is the subject of a Default Notice by any NOP may give notice to the Owner and each other NOP of its intention to exercise its rights under paragraph 2.2.1 of Schedule 19 (Exclusion and Termination) immediately, and a notice given under this clause 34.4 must specify that it is a Default Notice.
34.5 Default Notice due to Default by the Owner Participant
Where the Owner Participant is the Defaulting Participant, any NOP may give notice to the Owner, the Defaulting Participant and each other NOP of:
34.5.1 the Default and of its intention to exercise its rights under paragraph 2.2.1 of Schedule 19 (Exclusion and Termination) on the expiration of 15 Business Days if the Default is capable of being rectified but is not rectified within the 15 Business Days period; or
34.5.2 its intention to exercise its rights under paragraph 2.2.1 of Schedule 19 (Exclusion and Termination) immediately if the Default is not capable of being rectified,
and a notice given under this clause 34.5 must specify that it is a Default Notice.
34.6 Payment on termination for Default
34.6.1 If the this Agreement is terminated under clauses 34.3, 34.4 or 34.5 the provisions of paragraph 2 of Schedule 19 (Exclusion and Termination) shall apply and, subject to the Owner’s rights under or in connection with this Agreement:
34.6.1.1 the Owner must pay each NOP; or
34.6.1.2 each NOP must pay the Owner.
(as the case may be), an amount calculated or decided under paragraph 2 of Schedule 19 (Exclusion and Termination).
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34.6.2 The Participants must take all reasonable steps to minimise and mitigate any costs incurred by them arising from termination of this Agreement under clause 35.1.
35. NO FAULT TERMINATION
35.1 The Owner’s right to terminate at any time
35.1.1 The Owner may terminate this Agreement at any time by serving a notice in writing on each of the NOPs.
35.1.2 Without prejudice to clause 35.1.1, the Owner may terminate this Agreement in the event that it considers any of the circumstances set out in regulations 89(1)(a) or (c) of the UCR or regulations 73(1)(a) or (c) of the PCR (in each case as amended from time to time) have arisen.
35.2 Payment on no fault termination
35.2.1 If the Owner elects to terminate this Agreement under clause 35.1, subject to the Owner’s rights under or in connection with this Agreement:
35.2.1.1 the Owner must pay each NOP; or
35.2.1.2 each NOP must pay the Owner.
(as the case may be), an amount calculated or decided under paragraph 3 of Schedule 19 (Exclusion and Termination).
35.2.2 The Participants must take all reasonable steps to minimise and mitigate any costs incurred by them arising from termination of this Agreement under clause 35.1.
35.3 Release agreement
Upon payment of any termination payment by the Owner to each NOP or each NOP to the Owner (as the case may be) under clause 35.2, the Owner and each NOP must enter into a release agreement under which the Owner and each NOP:
35.3.1 agree that all payments required to be made by the Owner or by each NOP (as the case may be) in respect of this Agreement have been made in full; and
35.3.2 release each other from any claims arising out or on in connection with this Agreement other than any claims arising out of clauses 32, 38, 44, 45, 47.9, 47.10, 47.16, 47.17, 47.19 and 47.21.
36. EXCLUSION OF DEFAULTING PARTICIPANT
36.1 Exclusion of Defaulting Participant
The provisions relating to expulsion by the Owner of a Defaulting Participant are at paragraph 1 of Schedule 19 (Exclusion and Termination).
37. CONSEQUENCES OF TERMINATION
37.1 Immediate cessation of Works
If this Agreement is terminated for any reason, the Participants must immediately at the date of the Termination Notice cease all Works under this Agreement, unless:
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37.1.1 agreed otherwise by the Owner and the ALT prior to the date of the Termination Notice; or
37.1.2 such are work and/or services to be performed by the Participants under clauses 37.2 and/or 37.4.
37.2 The Owner’s directions on termination
If this Agreement is terminated for any reason, the Participants must promptly comply with any directions by the Owner including, and to the extent directed, to:
37.2.1 protect property in the possession of any NOP in which the Owner has or may acquire an interest;
37.2.2 demobilise from the Site persons, Construction Plant, vehicles, equipment and other things;
37.2.3 assign or novate to the Owner all rights and benefits under contracts with Third Parties; and
37.2.4 provide the Owner with drawings, documents, the relevant Proposals, design, any other information, samples, models, patterns and the like relating to the Project.
37.3 The Owner’s right to continue with others
If this Agreement is terminated for any reason, the NOPs acknowledge and agree that the Owner is free to continue with the Works and the Project:
37.3.1 with entirely new contractors and/or consultants; or
37.3.2 on an alliance, conventional contractual or any other basis that the Owner may decide,
and each NOP must do all things and execute all further documents necessary to ensure that the Owner is free to continue with the Works and the Project in the manner set out in this clause 37.3 within the time period prescribed by the Owner.
37.4 Materials, Construction Plant etc. on default termination
If this Agreement is terminated by the Owner for Default by a NOP pursuant to paragraph 2.1 of Schedule 19 (Exclusion and Termination), any NOP that is a Defaulting Participant must provide the Owner with possession of all Materials, Construction Plant, vehicles, equipment and other things on the Site or off-site, which are required by the Owner for the purpose of, and for such time as necessary, to complete the Works.
37.5 Survival clause
Clauses 5.1, 6, 26.5 30, 32, 35, 36, 38, 39, 40, 41, 44, 45, 46, 47.3, 47.4, 47.6, 47.7 47.9, 47.10, 47.16, 47.17, 47.19 and 47.21 together with Schedules 10 (Actual Cost), 11 (Fee), 13 (Risk or Reward Regime), 14 (Payment Procedures), 19 (Exclusion and Termination), and 20 (TUPE) survive the termination of this Agreement and without prejudice to Schedule 19 (Exclusion and Termination) continue to bind an Excluded NOP.
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Part 9 INSURANCES, INDEMNITIES AND LIABILITIES
38. INSURANCES
38.1 The Owner insurances
The Owner will take out on or prior to the Commencement Date and maintain the insurance policies set out in the Project Insurance Manual annexed to Schedule 16 (Insurance Policies) unless otherwise stated in the relevant Proposal.
38.2 The Owner’s insurance manual
38.2.1 A summary of the insurance policies taken out and maintained by the Owner under clause 38.1 is included in the Project Insurance Manual annexed to Schedule 16 (Insurance Policies), unless otherwise stated in the relevant Proposal.
38.2.2 Further details of the Owner’s insurance policies will be provided to each NOP on request to the Owner by the ALT.
38.3 Insurance to be taken out by each NOP
38.3.1 Each NOP must each take out on or prior to the date of this Agreement and maintain the insurance policies set out in the Project Insurance Manual annexed to Schedule 16 (Insurance Policies), unless otherwise stated in the relevant Proposal.
38.3.2 Each NOP is free to take out and maintain any other insurance policies they consider necessary in respect of the Works, but the costs of such other insurance policies will not be treated as Actual Cost under this Agreement unless otherwise stated in the relevant Proposal.
38.3.3 Each NOP must make available to the other Participants on request certificates of currency evidencing that the insurance policies required to be taken out by it under clause 38.3 have been taken out and are in force.
38.4 No relief from obligations under this Agreement
Taking out and maintaining the insurance policies required by this Agreement does not in any way limit the liabilities, responsibilities and obligations of the Participants under other provisions of this Agreement.
38.5 Insurance claims procedure
Each Participant must comply with the Insurance Claims Notification and Handling Instructions in the Project Insurance Manual annexed to Schedule 16 (Insurance Policies).
38.6 Payments received from insurers
All payments received by the Owner or any Participant from insurers on account of claims in respect of additional Actual Cost:
38.6.1 incurred or to be incurred by any Participant; and
38.6.2 arising from an insured event under an insurance policy taken out by the Owner under clause 38.1 or a NOP under clause 38.3,
are credited to the Actual Cost, but the Target Price is not adjusted.
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39. INDEMNITIES
39.1 Non-compliance with insurance requirements by a NOP
Each NOP (each an “Indemnifying NOP”) indemnifies and must keep indemnified:
39.1.1 the Owner;
39.1.2 the Owner Participant; and
39.1.3 each other NOP,
(each an “Indemnified Person”), and each Indemnified Person’s directors, officers, employees and agents against losses, damages or claims suffered by any Indemnified Person or its directors, officers, employees and agents as a consequence of non-compliance by the Indemnifying NOP with:
39.1.4 the terms and conditions of clause 38 (including any failure of the Indemnifying NOP to take out and maintain any of the insurances required to be taken out and maintained by the Indemnifying NOP under this Agreement); or
39.1.5 the terms and conditions of the insurance policies required to be taken out and maintained by the Owner or the Indemnified NOP under this Agreement (including any act or omission of the Indemnifying NOP which causes an insurance policy required to be taken out and maintained by the Owner or the Indemnified NOP under this Agreement to not respond to any claim in respect of this Agreement).
39.2 Non-compliance with insurance requirements by the Owner
The Owner indemnifies and must keep indemnified each NOP (each an “Indemnified NOP”) and the directors, officers, employees and agents of the Indemnified NOP against losses, damages or claims suffered by the Indemnified NOP and the directors, officers, employees and agents of the Indemnified NOP as a consequence of non-compliance by the Owner and/or the Owner Participant with:
39.2.1 the terms and conditions of clause 38 (including any failure of the Owner to take out and maintain any of the insurances required to be taken out and maintained by the Owner under this Agreement); or
39.2.2 the terms and conditions of the insurance policies required to be taken out and maintained by the Indemnified NOP under this Agreement (including any act or omission of the Owner and/or the Owner Participant which causes an insurance policy required to be taken out and maintained by the Indemnified NOP under this Agreement to not respond to any claim in respect of this Agreement).
39.3 Wilful Default by a NOP
Each Indemnifying NOP indemnifies and must keep indemnified each Indemnified Person and its directors, officers, employees and agents against losses, damages or claims suffered by any Indemnified Person or its respective directors, officers, employees and agents as a consequence of or arising from any Wilful Default by the Indemnifying NOP.
39.4 Wilful Default by the Owner Participant
The Owner indemnifies and must keep indemnified each Indemnified NOP and its directors, officers, employees and agents against losses, damages or claims suffered by the Indemnified NOP or its directors, officers, employees and agents as a consequence of or arising from any Wilful Default by the Owner Participant.
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39.5 Proportionate liability under the indemnities
39.5.1 The liability of the Indemnifying NOP under the indemnities contained in clauses 39.1 and 39.3 is reduced proportionately to the extent that an act or omission of the Owner and/or the Owner Participant, its directors, officers, employees, agents, contractors or subcontractors (of any tier) (other than the Indemnifying NOP and its subcontractors (of any tier) and agents) has contributed to the loss, damage or claim.
39.5.2 The liability of the Owner under the indemnities contained in clauses 39.2 and 39.4 is reduced proportionately to the extent that an act or omission of a NOP, its directors, officers, employees, agents, contractors or subcontractors (of any tier) has contributed to the loss, damage or claim.
40. LIABILITY OF NOPS
40.1 Liability of the NOPs is several
Subject to clause 41, the Parties agree and acknowledge that the liability of any NOP to:
40.1.1 the Owner; or
40.1.2 any other Participant,
in respect of any and all liability, costs, losses, claims, damages or expenses (which will include all interest, legal costs and disbursements) arising out of or in connection with this Agreement and whether in contract, in tort, in negligence, for breach of statutory duty, or otherwise is several.
40.2 NOP’s Liability under the Risk or Reward Regime
Each NOP’s share of any Incentive Amount under the Risk or Reward Regime is apportioned as stated in Schedule 13 (Risk or Reward Regime), and the amount of any such share incurred by a NOP is not taken into account in determining any cap on liability for that NOP under clause 41.1.1.
41. LIMITATION OF LIABILITY
41.1 Cap on Liability
41.1.1 Subject to clauses 40.2, 41.1.2 and 41.4, the total aggregate liability of any NOP to the Owner arising out of or in connection with this Agreement in contract, in tort, in negligence, for breach of statutory duty, in respect of any indemnity, or otherwise must not exceed whichever is the greater of:
41.1.1.1 the aggregate Fee paid or payable to that Party under this Agreement at the date the relevant liability arose); or
41.1.1.2 £15,000,0007
and for the purpose of this clause 41.1.1, any liability of a NOP to the Owner Participant is treated as a liability to the Owner.
41.1.2 Nothing in clause 41.1.1 or 41.2 limits any liability of a NOP to the Owner (including in its capacity as Owner Participant):
7NOTE – The Owner will determine the minimum liability amount on a project specific basis. The default position is £15,000,000 unless otherwise stated.
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41.1.2.1 for any Painshare due under Schedule 14 (Payment Procedures);
41.1.2.2 in respect of an amount which is recoverable under a policy of insurance required to be taken out under clause 38 (or would be recoverable but for the relevant NOP’s own default);
41.1.2.3 for fraud in connection with this Agreement;
41.1.2.4 for Wilful Default;
41.1.2.5 under or in connection with this Agreement that cannot be excluded by any Statutory Requirement,
and the amount of any such liability is not taken into account in determining any cap on liability under clause 41.1.1.
41.1.3 For the avoidance of doubt, the Owner is liable to each NOP for any liability of the Owner Participant to the relevant NOP under this Agreement.
41.2 Exclusion of consequential loss
Without prejudice to the inclusion of amounts under clause 23.7 as Actual Cost, and subject to clause 41.1.2 and 41.3, no Party is liable to any other Party for any Consequential Loss sustained by that other Party, whether caused by that Party’s breach of this Agreement, negligence or otherwise.
41.3 Exception to the exclusion of consequential loss
A Liable Party will be liable to any Beneficiary for Consequential Loss to the extent that such Consequential Loss is covered and is recovered under a policy of insurance which is required to be taken out under this Agreement, except that Liable Party’s liability for Consequential Loss is not limited or excluded by this clause 41.3 to the extent that any non-recovery under any such insurance policy is the result of that Liable Party breaching its obligations under clause 38 or the terms of any such insurance policy.
41.4 Liability of the Owner Participant
41.4.1 For the purpose of this clause 41 only, the Owner Participant is deemed to be a Party.
41.4.2 For the avoidance of doubt, under this Agreement:
41.4.2.1 any liability of the Owner Participant is deemed to be a liability of the Owner; and
41.4.2.2 no liability of the Owner is to be treated as a liability of the Owner Participant.
42. SUBCONTRACTOR CLAIMS
42.1 Suspension or adjudication by Subcontractors
If any Subcontractor serves notice of an intention to suspend its works for non-payment and/or bring adjudication proceedings pursuant to the Construction Act, the NOP which is the counterparty to that Subcontract must promptly notify the ALT of such notice.
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42.2 Obligation to recover from Subcontractors
To the extent that any Subcontractor has any liability under a Subcontract to a Participant in connection with the Works whether arising before or after the relevant Date of Section Final Completion, that Participant must:
42.2.1 on notice to the ALT take all reasonable and proper measures (including by way of legal proceedings, advice or negotiations approved by the ALT) to recover any costs, loss, expense, damages, legal costs and/or interest suffered or incurred by that or any other Participant or the Owner from the defaulting Subcontractor to the extent that the defaulting Subcontractor is liable for such amounts under or in connection with the relevant Subcontract on the basis that the relevant On-Account Subcontractor Payment is repayable to the Owner or another Participant (as the case may be) under clause 42.5; and
42.2.2 account and promptly repay to the Owner or another Participant (as the case may be) for any On-Account Subcontractor Payment (or part thereof) recovered from the defaulting Subcontractor.
42.3 Losses recoverable from a Subcontractor to be repaid
Where the relevant Participant under clause 42.1 is a NOP, any payment:
42.3.1 to that NOP or to any other Participant or Subcontractor;
42.3.2 from the Owner or another Participant; and
42.3.3 made under this Agreement and/or the relevant Subcontract,
of an amount incurred as a result of the default of the relevant defaulting Subcontractor (an “On-Account Subcontractor Payment”) is for the purpose of this clause 42 an interim on-account payment repayable to the Owner or another Participant (as the case may be).
42.4 Subcontracts to exclude no loss claims
Each NOP must use reasonable endeavours to enter into Subcontracts which exclude any claim that an amount is not recoverable from the relevant Subcontractor solely on the basis that the relevant NOP or any other NOP or Subcontractor has received a payment of the type referred to in clause 42.3.
42.5 Repayment of amounts not recovered from defaulting Subcontractors
Unless the ALT directs otherwise, to the extent that any NOP is unable to recover from a defaulting Subcontractor (having taken all measures required under clause 42.2.1) any On-Account Subcontractor Payment due pursuant to clause 42.2, other than as the result of an Insolvency Event preventing the defaulting Subcontractor’s ability to pay such amount, that NOP must promptly pay the Owner or another Participant (as the case may be) that amount. Clauses 6.2 and 6.3 do not apply to this clause 42.5.
42.6 Costs of proceeding are Actual Cost
The costs of any legal proceedings, advice or negotiations approved by the ALT under this clause 42 are reimbursable as Actual Cost.
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Part 10 MISCELLANEOUS PROVISIONS
43. PARENT COMPANY GUARANTEE
43.1 Form of guarantee
Each NOP must ensure that a parent company guarantee in the form, or substantially the same form acceptable to the Owner, set out in Schedule 18 (Parent Company Guarantee) is provided to the Owner on or before the Commencement Date from:
43.1.1 the relevant NOP’s ultimate holding company (meaning the parent company of the group of companies of which that NOP is a member as each of those terms is defined in Section 170 of the Taxation of Chargeable Gains Act 1992); or
43.1.2 the company (if any) identified in Schedule 1 (Guarantors) as the guarantor in respect of that NOP.
43.2 Failure to provide guarantees by the Commencement Date
If any NOP fails to provide a guarantee in accordance with and by the date required by clause 43.1, the Owner is entitled to withhold payment of any amount due to that NOP under this Agreement until such time as a guarantee in accordance with clause 43.1 is provided by that NOP, and if such guarantee is not provided within 1 month of the Commencement Date such is deemed to be a Default by that NOP for the purpose of clause 34.1.
43.3 Recourse by the Owner
The Owner may have recourse to the parent company guarantees in the circumstances contemplated by the parent company guarantees.
43.4 Maintenance of guarantees
Each NOP must ensure that, from the Commencement Date until the Date of Project Final Completion, each parent company guarantee is maintained in the terms specified in Schedule 18 (Parent Company Guarantee) and is otherwise kept in full force and effect.
43.5 Demand is without prejudice to other rights
Any agreement between the provider of a parent company guarantee and the Owner with respect to any demands made and amounts paid by the provider to the Owner under that parent company guarantee is without prejudice to the Owner’s right to make continuing claims against the relevant NOP in relation to matters for which that parent company guarantee is provided.
43.6 Costs of procuring guarantees are within the Fee
The costs incurred by each NOP in establishing and maintaining a parent company guarantee are to be treated as included in its Overhead and are not recoverable as Actual Cost.
44. INTELLECTUAL PROPERTY
44.1 Intellectual Property remains vested in owner
44.1.1 Intellectual Property which any NOP has supplied to the Owner or any other Participant in accordance with this Agreement and which that NOP has owns or has created and/or developed for the purposes of performing its obligation under this Agreement will remain vested in that NOP.
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44.1.2 Intellectual Property which the Owner or the Owner Participant has supplied to any NOP in accordance with this Agreement and which the Owner or the Owner Participant owns or has created and/or developed for the purposes of performing its obligation under this Agreement will remain vested in the Owner or the Owner Participant.
44.2 Grant of licence to use
44.2.1 Subject to clause 44.4 each NOP hereby grants to:
44.2.1.1 the Owner, an irrevocable royalty free non-exclusive licence to copy use adapt and reproduce the relevant NOP’s Intellectual Property for any purpose whatsoever in connection with this Agreement, the Project and the Works and the Owner’s operation or maintenance of the Project (including the performance of any works and/or services by others which were capable of forming part of the Works under this Agreement); and
44.2.1.2 each other NOP and the Owner Participant, an irrevocable royalty free non-exclusive licence to copy use adapt and reproduce the relevant NOP’s Intellectual Property for any purpose whatsoever in connection with the Works.
44.2.2 Subject to clause 44.4 the Owner and the Owner Participant hereby grants to the NOPs, an irrevocable royalty free non-exclusive licence to copy use adapt and reproduce the Owner’s and the Owner Participant’s Intellectual Property for any purpose whatsoever in connection with the Works.
44.3 Sub-licences and transfer
The licences granted at clauses 44.2 must carry with them the right for the relevant Licensee to grant sub-licences and must be transferable to third parties.
44.4 Extent of licences for software and proprietary equipment
Any Licensee under a licence pursuant to clause 44.2.1 or 44.3 granted by any NOP has no right to:
44.4.1 decompile any computer software which forms part of the Intellectual Property licensed by that NOP to that Licensee in respect of Proprietary Plant;
44.4.2 attempt to derive any algorithms, techniques or other features of the software or modify or attempt to create any derivative works from the software supplied by that NOP in respect of Proprietary Plant;
44.4.3 reproduce or have reproduced the Proprietary Plant supplied by that NOP in part or in whole; and
44.4.4 make or have made components or spare parts for the Proprietary Plant which are protected by Intellectual Property vested in that NOP or any of its sub-contractors or suppliers for any purposes whatsoever,
and any sub-licence granted by a licensee must similarly apply these prohibitions to the relevant sub-licensee.
44.5 Infringement indemnity
44.5.1 Unless and to the extent caused by any breach by the Owner of this Agreement, each NOP indemnifies the Owner against all loss damage costs and expenses for which the Owner is or becomes liable as a result of any infringement or
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alleged infringement by that NOP of any Third Party’s intellectual property rights, provided the Owner or the Owner Participant:
44.5.1.1 promptly gives the relevant NOP notice of any such claim being received or any proceedings in relation to such a claim being threatened or served on the Owner; and
44.5.1.2 permits the relevant NOP (at that NOP’s expense and on the basis that such NOP indemnifies the Owner for all legal costs and expenses the Owner may properly incur in respect of such proceedings) to conduct the defence of any such claim and all negotiations for its settlement.
44.5.2 Unless and to the extent caused by any breach by any NOP of this Agreement, the Owner indemnifies each NOP against all loss damage costs and expenses for which the relevant NOP is or becomes liable as a result of any infringement or alleged infringement by the Owner or the Owner Participant of any Third Party’s intellectual property rights, provided that the relevant NOP:
44.5.2.1 promptly gives the Owner and the Owner Participant notice of any such claim being received or any proceedings in relation to such a claim being threatened or served on that NOP; and
44.5.2.2 permits the Owner (at the Owner’s expense and on the basis that the Owner indemnifies that NOP for all legal costs and expenses that NOP may properly incur in respect of such proceedings) to conduct the defence of any such claim and all negotiations for its settlement.
44.6 No liability for unlicensed use
The Owner, the Owner Participant nor any NOP are liable for any use of any of their respective Intellectual Property licensed under this clause 44 for any purpose other than that for which it was originally prepared or supplied by the supplying party.
44.7 Waiver of moral rights
44.7.1 Each NOP waives in favour of the Owner and each other NOP any and all moral rights in any of its designs and drawings.
44.7.2 The Owner and the Owner Participant waive in favour of each NOP any and all moral rights in any of their respective designs and drawings.
45. TUPE
45.1 TUPE provisions
The Parties do not consider that TUPE will apply in relation to this Agreement. The provisions of Schedule 20 (TUPE) will apply in respect of any transfer of employment subject to TUPE that may arise.
46. NOTICES
46.1 Form and methods of delivery
46.1.1 A notice or other communication under this Agreement (“Notice”) must be in writing and delivered by hand or sent by pre-paid post or by email to a Participant at the address or the email addressees for that Participant set out in Schedule 4 (Owner’s and Participants’ Contact Details) or as otherwise specified by a Participant by Notice.
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46.1.2 A Notice sent by post is regarded as given and received on the second Business Day following the date of postage.
46.1.3 A Notice delivered or received by hand other than on a Business Day or after 5.00pm (recipient’s time) is regarded as received at 9.00am on the following Business Day and a Notice delivered or received before 9.00am (recipient’s time) is regarded as received at 9.00am.
46.2 Notice by email
46.2.1 Any notice by email under clause 46.1 must be sent to the persons or positions and email addresses listed in Schedule 4 (Owner’s and Participants’ Contact Details) for each Participant, and attaching the relevant signed notice in “PDF” format.
46.2.2 A Notice sent by email is deemed effected on the Business Day after the date of delivery of the email providing a read receipt is received for that email or an acknowledgement of receipt is sent by the recipient by email or other permitted means.
46.3 Notice by a corporate entity
A Notice sent by a company must be signed by a duly authorised officer of the sender.
47. GENERAL
47.1 Owner Participant under this clause 47
For the purpose of this clause 47, the Owner Participant is treated as a Party unless the context requires otherwise.
47.2 Costs of this Agreement
Each Party must pay its own costs and disbursements in connection with the negotiations, preparation and execution of this Agreement, and these costs are not recoverable as Actual Cost.
47.3 Severability
If any term or part of this Agreement is or becomes for any reason invalid or unenforceable at law, then in that event, that term or part of this Agreement will be and be hereby deemed to be severed from this Agreement without thereby affecting the remainder of this Agreement and the remainder of this Agreement will continue to be valid and enforceable in all things.
47.4 Waiver
47.4.1 No Party to this Agreement may rely on the words or conduct of any other Party as a waiver of any right unless the waiver is in writing and signed by the Party granting the waiver.
47.4.2 In this clause 47.4:
47.4.2.1 “conduct” includes delay in the exercise of a right;
47.4.2.2 “right” means any right arising under or in connection with this Agreement and includes the right to rely on this clause; and
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47.4.2.3 “waiver” includes an election between rights and remedies, and conduct which might otherwise give rise to personal bar.
47.5 Amendments to this Agreement
Amendment of this Agreement must be in writing and signed by each Party (and in the case of the Owner in its capacity as client and not as or by the Owner Participant).
47.6 Entire Agreement
47.6.1 This Agreement states all the express terms of the agreement between each Party in respect of its subject matter.
47.6.2 This Agreement supersedes all prior discussions, negotiations, understandings and agreements in respect of its subject matter.
47.7 Assignment
47.7.1 A NOP shall not assign charge or transfer this Agreement or any of its rights under it without the prior written consent of the Owner (such consent not to be unreasonably withheld or delayed).
47.7.2 The Owner may not assign charge or transfer this Agreement or any of its rights under it without the prior written consent of the NOPs (such consent not to be unreasonably withheld or delayed), provided that the NOPs’ consent shall not be required where it is between the Owner and its direct or indirect holding companies and its direct or indirect subsidiaries (within the meaning of s1159 Companies Act 2006).
47.8 Change in Control
47.8.1 Each NOP must ensure that there is no Change in Control in respect of it or its guarantor under the parent company guarantee to be provided under clause 43.1 without the Owner’s and the other NOPs’ prior approval (which must not be unreasonably withheld), except where law or regulatory guidance prevent a NOP from disclosing a proposed Change of Control to the Owner on a confidential basis prior to it occurring, that NOP must as soon as reasonably practicable following such Change of Control notify the Owner of such change.
47.8.2 Without limiting clause 47.8.1, in the event of a proposed Change in Control occurring, the relevant NOPs must:
47.8.2.1 provide the Owner with any documentation or information requested by the Owner in respect of the proposed or actual Change in Control (including information in respect of the financial and technical capability of the Third Party acquiring or exercising control over the relevant NOP); and
47.8.2.2 attend any meetings requested by the Owner including arranging for attendance at those meetings by the Third Party acquiring or exercising control over the relevant NOP.
47.9 Confidentiality and Comptroller and Auditor General
47.9.1 Subject to clause 47.9.2, all Confidential Information obtained by the Parties in the course or conduct of this Agreement must be held confidential and must not be divulged by the Parties to any Third Party save to the extent necessary to comply with any obligations under this Agreement and then only on the basis that the recipient of such information shall be bound by similar confidentiality obligations to those undertaken by the Parties hereunder.
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47.9.2 Clause 47.9.1 does not apply if the relevant disclosure or information:
47.9.2.1 is or shall become part of the public domain otherwise than in consequence of a breach under this clause;
47.9.2.2 was in the relevant Party’s possession prior to award of this Agreement and was not notified by any other Party as being confidential or which would not reasonably be regarded as confidential by its very nature;
47.9.2.3 was received from Third Parties having to the best of the relevant Party’s knowledge the right to disclose such information;
47.9.2.4 is required to be disclosed to any Government Minister, Parliament or Relevant Authority whether in connection with the granting of any licence or otherwise;
47.9.2.5 is required to be disclosed pursuant to a court order or Statutory Requirement provided that the relevant Party shall to the extent permitted by the relevant Statutory Requirement: (i) provide the other Parties with prompt written notice of any such requirement before such disclosure is made and (ii) take all reasonable action to avoid and limit such disclosure as may be requested by the other Parties;
47.9.2.6 is to a servant, employee, agent, professional adviser, insurer, auditor or contractor of any Party, when that disclosure is reasonably necessary for the conduct of this Agreement;
47.9.2.7 is to an Affiliated Undertaking of any Party;
47.9.2.8 was consented to in writing by each Party (as the case may be); or
47.9.2.9 is required to be disclosed to any internationally recognised stock exchange.
47.9.3 Each NOP must ensure that the provisions of this clause 47.9 are incorporated in any Subcontracts or supply orders and that the employees, agents or representatives of all or any of the Subcontractors or suppliers comply with the same.
47.9.4 Each NOP must not make any announcement in relation to this Agreement or its subject matter without the prior written approval of the Owner except as required by law or by any legal or regulatory authority.
47.9.5 Nothing in this Agreement shall prevent the Owner from disclosing the NOPs’ Confidential Information:
47.9.5.1 to the Crown, any other Contracting Authority or any government department. All government departments receiving such Confidential Information shall be entitled to further disclose the Confidential Information to other government departments on the basis that the information is confidential and is not disclosed to a third party which is not part of the Crown, any Contracting Authority or any government department;
47.9.5.2 for the purpose of the examination and certification of the Owner’s accounts; or
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47.9.5.3 for any examination pursuant to Section 6(1) of the National Audit Act 1983 of the economy, efficiency and effectiveness with which the Owner has used its resources.
47.9.6 Each NOP must and must procure that its Subcontractors must provide such access to its or their books and records as may be required from time to time by the Comptroller and Auditor General of the National Audit Office for the purpose of their audit and examination of the accounts of the Owner and its group companies, the Department for Transport and the consolidated set of financial statements for the UK public sector.
47.9.7 Notwithstanding clauses 6.2 and 6.3, a failure by a Party to comply with the requirements of this clause 47.9 confers on the other Parties an enforceable right at law or in equity to seek any one of or a combination of specific performance, injunction or damages and, to the extent that any right under a Statutory Requirement may be excluded by this Agreement, under that Statutory Requirement.
47.9.8 This clause 47.9 shall remain binding on the NOPs notwithstanding the completion or termination of this Agreement for any reason
47.10 Freedom of Information
47.10.1 The NOPs acknowledge that the Owner may be required, under the Freedom of Information Act 2000 and/or the Environmental Information Regulations 2004 (collectively, the “Information Acts”), to respond to requests for information relating to the subject matter of this Agreement.
47.10.2 Each NOP must and must procure that its Subcontractors must:
47.10.2.1 provide all necessary assistance and cooperation as reasonably requested by the Owner to enable it to comply with its obligations under the Information Acts;
47.10.2.2 transfer to the Owner all requests for information relating to this Agreement that it receives as soon as practicable and in any event within 2 Business Days of receipt;
47.10.2.3 provide the Owner with a copy of all information belonging to the Owner requested in the request for information which is in its possession or control in the form that the Owner requires within 5 Business Days (or such other period as the Owner may reasonably specify) of the Owner requesting such information; and
47.10.2.4 not respond directly to a request for information unless authorised in writing to do so by the Owner.
47.10.3 Each NOP acknowledges that the Owner may be required under the Information Acts to disclose information (including Confidential Information) without consulting or obtaining consent from any NOP.
47.10.4 The Owner shall take reasonable steps to notify the NOPs of a request for Confidential Information (in accordance with the Secretary of State’s section 45 Code of Practice on the Discharge of the Functions of Public Authorities under Part 1 of the Freedom of Information Act 2000) to the extent that it is permissible and reasonably practical for it to do so and must consider any reasonable and timely representations made by any NOP regarding the application of exemptions to the requested information.
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47.10.5 Notwithstanding any other provision in this Agreement, the Owner is responsible for determining in its absolute discretion whether any Confidential Information and/or any other information is exempt from disclosure in accordance with the Information Acts.
47.10.6 Clauses 6.2 and 6.3 do not apply in respect of this clause 47.10.
47.11 Information Security
The NOPs shall comply with Network Rail’s Security Policy for Procurement for the level of security risk stated in the Proposal Approval Notice.8
47.12 No partnership created
47.12.1 Nothing in this Agreement gives any Party authority to bind any other Party.
47.12.2 Each NOP is an independent contractor of the Owner and of each other.
47.12.3 The employees, agents and Subcontractors of any Party will not be deemed to be employees, agents or Subcontractors of any other Party.
47.12.4 This Agreement, and the alliance relationship created by it, is not intended to create, nor will it be construed as creating, any partnership, joint venture or fiduciary obligation with regard to, or as between, any of the Parties.
47.13 Power to enter into this Agreement
Each Party represents and warrants to each other Party that it has full power to enter into and perform its obligations under this Agreement and that when executed this Agreement will constitute legal, valid and binding obligations subject to its terms.
47.14 Inability to comply with financial obligations
Each Party must immediately notify each other Party in writing if it forms the opinion that it will be unable to, or be unlikely to be able to, satisfy any of its financial obligations in relation to this Agreement from the financial resources available, or likely to be available to it, at the time the financial obligation is due.
47.15 No fetter of the Owner’s statutory rights and obligations
Nothing contained in or implied by this Agreement or any document contemplated by this Agreement has the effect of constraining:
47.15.1 the Owner’s, or placing any fetter on the Owner’s, statutory rights, duties, powers and functions, including those contained or referred to in any Statutory Requirement; and
47.15.2 the Office of Rail Regulation, Department of Transport or placing any fetter on their statutory rights, duties, powers and functions.
47.16 Compliance
47.16.1 Each NOP must comply with all applicable anti-bribery, anti-corruption and anti-slavery legislation including, without limitation, the Bribery Act 2010 and Modern Slavery Act 2015.
8 NOTE: This may be: low or no risk (no additional requirements)/medium/high.
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47.16.2 Each NOP must comply with the Owner’s Code of Business Ethics and Code of Conduct, corporate hospitality, conflicts of interests and speak out (whistleblowing) policies and any updates thereof.
47.16.3 Bribery Act compliance:
47.16.3.1 Each NOP shall maintain and enforce its own policies and procedures, including adequate procedures under the Bribery Act 2010, to ensure compliance with all applicable anti-bribery and anti-corruption legislation.
47.16.3.2 Adequate procedures for the purpose of clause 47.16.3.1 must be determined in accordance with section 7(2) of the Bribery Act 2010 (and any guidance issued under section 9 of the Bribery Act 2010).
47.16.3.3 Each NOP must use all reasonable endeavours to ensure that all persons associated with it (as defined by section 8 of the Bribery Act 2010) including all its Subcontractors comply with this clause.
47.16.4 Modern Slavery Act compliance:
47.16.4.1 Each NOP must implement due diligence procedures for its own Subcontractors and other participants in its supply chains, to ensure that there is no slavery or human trafficking in its supply chains.
47.16.4.2 Each NOP must use reasonable endeavours not to purchase any raw materials, resources or products from any country that has been sourced from producers or manufacturers using forced labour in its operations or practice.
47.16.5 Any breach of this clause 47.16 by a NOP will be deemed a Default under the Agreement.
47.16.6 Clauses 6.2 and 6.3 do not apply in respect of this clause 47.16.
47.17 Equality and Diversity
47.17.1 Each NOP must perform its obligations under this Agreement in accordance with:
47.17.1.1 all applicable equality law (whether in relation to age, disability, gender reassignment, marriage or civil partnership status, pregnancy or maternity, race, religion or belief, sex or sexual orientation (each a "Relevant Protected Characteristic") or otherwise).
47.17.1.2 the Owner's equality, diversity an inclusion policy as published by the Owner from time to time; and
47.17.1.3 any other requirements and instructions which the Owner reasonably imposes in connection with any equality obligations imposed on the Owner at any time under applicable equality Statutory Requirement.
47.17.2 Each NOP must take all reasonable steps to secure the observance of clause 47.17.1 by its employees, agents, representatives and Subcontractors.
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47.17.3 Each NOP acknowledges that the Owner is under a duty under section 149 of the Equality Act 2010 to have due regard to the need to eliminate unlawful discrimination (on the grounds of a Relevant Protected Characteristic); to advance equality of opportunity, and to foster good relations, between persons who share a Relevant Protected Characteristic and persons who do not share it. In performing its obligations under this Agreement, each NOP must assist and cooperate with the Owner where possible in satisfying this duty.
47.17.4 Clauses 6.2 and 6.3 do not apply in respect of this clause 47.17.
47.18 Third party rights excluded
Any person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement provided always that this will not affect any right or remedy of such person which exists or is available apart from this Act.
47.19 Governing law
47.19.1 This Agreement is governed by the law of England.
47.19.2 Each Party irrevocably submits to the exclusive jurisdiction of the courts of England and Wales in respect of any proceedings arising out of or in connection with this Agreement.
47.19.3 Each Party irrevocably waives any objection to the venue of any legal process in these courts on the basis that the process has been brought in an inconvenient forum.
47.20 BIM Building Information Modelling
The Parties shall comply with respective obligations set out in any BIM Protocol stated in a Proposal Approval Notice. Any additional procedures or requirements which the Participants are to adopt in support of or as part of the BIM Protocol and/or associated IT systems shall be set out in the Information Protocol. The Parties shall have the benefit of any rights granted to them in the BIM Protocol and of any limitations or exclusions of liability contained within it.
47.21 Corporate Tax
47.21.1 Each NOP shall keep (and shall procure that its Subcontractors keep) records of all expenditure, costs and other outgoings incurred in the performance of its obligations under this Agreement, to enable, validate and support claims and compliance requirements made by the Owner under UK tax legislation with particular reference, but not limited to, reliefs provided under the Capital Allowances Act 2001 (“CAA2001”). In particular, but without limitation, the NOPs shall provide (and shall procure that any Subcontractors provide) a breakdown of costs at a sufficiently granular level to enable identification of costs attributable to assets qualifying for tax relief under CAA2001.
47.21.2 Each NOP shall provide (and shall procure that its Subcontractors provide) such records in the form that the Owner may request and such other documentation as they may have in their possession for the purposes set out in clause 47.21.1 above.
47.22 Data Protection
47.22.1 Each NOP must take all necessary steps under the Data Protection Act 1998 and the General Data Protection Regulation (EU) 2016/679 once in force (including, where appropriate, the procurement of any consent) to allow for
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disclosure to appropriate Owner personnel of all information required by this Agreement.
47.22.2 If the Supplier is required to handle Personal Data the following sub-clauses 47.22.3– 47.22.7 shall apply.
47.22.3 In this clause 47.21 the following definitions apply until the General Data Protection Regulation (EU) 2016/679 comes into force when the definitions therein shall apply:
“Directive” means the European Data Protection Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data;
“Losses” means all losses, liabilities (including provision for contingent liabilities), fines, damages, costs and expenses including legal fees on a solicitor/client basis and disbursements and costs of investigation, litigation, settlement, judgment, interest and penalties;
“Personal Data” has the meaning given to such term in the Directive and relates only to personal data, or any part of such personal data, of which the Owner is the Data Controller and in relation to which the Providers are providing services under this Agreement.
“Providers” refers to the NOPs, which are the data processors carrying out the work on behalf of the Owner, the data controller.
“Provider Personnel” means all employees, officers and individuals contracted to the Providers or any of their subcontractors and involved to any extent in the performance of the Works and the performance of this Agreement;
47.22.4 References to “processing”, “process”, “processor” and “controller” in this clause 47 shall have the meaning set out in the Directive and the General data Protection Regulation (EU) 2016/679 once in force. The Parties acknowledge that the Owner is the “controller” of the Personal Data and the Providers are acting as “processors” on behalf of the Owner.
47.22.5 The Providers undertake:
47.22.5.1 to process the Personal Data in accordance with the provisions of this Agreement and the Owner’s instructions from time to time;
47.22.5.2 to ensure that only those Provider Personnel required by the Providers to assist them in meeting their obligations under this Agreement shall have access to the Personal Data and that such Provider Personnel have received training and instruction in the care and handling of Personal Data;
47.22.5.3 to assist the Owner promptly with all data subject requests for access to Personal Data which may be received by the Owner from time to time. The Owner shall reimburse the Providers for any reasonable costs which the Providers incur in complying with this requirement;
47.22.5.4 not to disclose the Personal Data to a third party in any circumstances other than disclosure to the Provider Personnel in accordance with this clause 47.21 or disclosure at the specific request of the Owner or if otherwise compelled by law to make such disclosure;
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47.22.5.5 to allow its data processing facilities, procedures and documentation which relate to the processing of Personal Data, to be scrutinised by the Owner or the auditors of the Owner in order to ascertain compliance with this clause 47.21;
47.22.5.6 to have in place such technical and organisational measures as are reasonably necessary and appropriate to safeguard against the unauthorised or unlawful processing of Personal Data and against accidental loss or destruction of, or damage to, Personal Data; and
47.22.5.7 to indemnify the Owner against all Losses incurred or suffered by or made against it and whether, wholly or in part, resulting directly or indirectly from, or connected in any way with, any breach of this clause 47.21.
47.22.6 On termination of this Agreement, for whatever reason, the Providers must cease to use the Personal Data and must arrange for the prompt and safe return to the Owner (or its nominated Third Party) or destruction, at the Owner’s sole option, of all Personal Data, together with all copies in its possession or control. The Owner may require the Providers to promptly confirm in writing to the Owner that the Providers have destroyed all copies of the Personal Data.
47.22.7 Where Personal Data is to be exported outside the EEA as part of any processing by or on behalf of the Providers, the Providers must obtain prior written consent from the Owner. Any such consent given by the Owner will be subject to additional requirements in relation to the processing of Personal Data set out in the EU Standard Contract Clauses published by the European Commission.
47.22.8 The Providers must promptly notify the Owner by telephone and within 24 hours by written notice with all relevant details reasonably available of any actual or suspected breach of security and/or of the Agreement and/or clause 47.21 in relation to Owner Personal Data including unauthorised or unlawful access or processing of, or accidental loss, destruction or damage of any Owner Personal Data.
47.22.9 Clauses 6.2 and 6.3 do not apply in respect of this clause 47.21.
47.23 [London Living Wage
47.23.1 Each NOP shall and shall also procure that its relevant Subcontractors shall
47.23.1.1 ensure that none of its workers or its Subcontractor’s workers engaged in the performance of this Agreement in the Greater London Area (but not otherwise) and who would also satisfy the eligibility criteria set by the Living Wage Foundation (or any replacement thereof) (referred to in this clause 47.23 as “Qualifying Workers and its Subcontractor’s Workers”) is paid an hourly wage (or equivalent of an hourly wage) less than the London Living Wage; and
47.23.1.2 co-operate and provide all reasonable assistance to the Owner in monitoring the effect of the London Living Wage.
47.23.2 If the London Living Wage increases during the term of this Agreement, the Participants shall not be entitled to adjust the [Target Price] and the Parties agree and acknowledge that any increases in the London Living Wage
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anticipated during the term of this Agreement have been factored into the [Target Price] 9.
47.23.3 Any failure by the Contractor to comply with the provisions of this clause 47.23 shall be treated as a Default under this Agreement.
47.23.4 Clauses 6.2 and 6.3 do not apply in respect of this clause 47.23.]10
47.24 Intermediaries Legislation – Engagement of Off-Payroll service providers through the NOPs
If stated in any Owner’s Brief, that the Works provided through this Agreement are assessed by the Owner to fall under the Intermediaries Legislation then:
47.24.1 Each NOP shall comply with the Intermediaries Legislation and all reasonable instructions and requests for information from the Owner in respect thereof.
47.24.2 Each NOP shall supply all the information required, and to any specified time, for the Owner to report to the Department for Transport and HM Treasury as to compliance with the Intermediaries Legislation including the number of workers affected.
47.24.3 Each NOP shall be liable for and shall indemnify the Owner against all and any loss, damage, cost, expense, liability, claims and proceedings whatsoever in respect of a failure of the NOP to comply with this clause 47.24.
47.24.4 The Owner shall provide all reasonably requested information within a reasonable timescale to support the NOPs in their compliance with the Intermediaries Legislation.
IN WITNESS whereof the Owner and each NOP have caused this Agreement to be executed as a Deed in duplicate on the date first stated above, as follows:
THE COMMON SEAL of ) NETWORK RAIL INFRASTRUCTURE ) LIMITED ) was affixed to this DEED in ) the presence of: )
Authorised Signatory………………………………………..
9 NOTE: Terminology depends on the Risk or Reward Regime commercial model 10 NOTE: Delete where not applicable
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SIGNED as a DEED for and on behalf of )
[NOP 1] by )
…………………………………………………………….
Director
……………………………………………………………. Director/Company Secretary
SIGNED as a DEED for and on behalf of )
[NOP 2] by )
…………………………………………………………….
Director
……………………………………………………………. Director/Company Secretary
SIGNED as a DEED for and on behalf of )
[NOP 3] by )
…………………………………………………………….
Director
……………………………………………………………. Director/Company Secretary
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SCHEDULE 1
DEFINITIONS AND INTERPRETATION
1. Definitions
Unless the context otherwise requires, in this Agreement the following words and expressions have the meanings set out below:
“Accounting Period” each or any of the Owner’s 13 consecutive accounting periods commencing on 1 April in each calendar year.
“Act of Parliament” all Acts of the United Kingdom Parliament including any ordinance, rule, regulation, by-law, local law, order, code of practice, guideline, instruction and proclamation made or issued under any such Act now in existence or which comes into existence prior to the Date of Project Final Completion.
“Actual Cost”
has the meaning given at paragraph 1.1 of Schedule 10 (Actual Cost).
“Adjustment Event” any of the following acts, events or circumstances:
(a) a Scope Variation;
(b) a change to a Statutory Requirement after the Commencement Date or the relevant Proposal Approval Notice (as the case may be) which substantially and materially affects the Works (including the carrying out and/or performance of any works or services forming part of the Works);
(c) a change to a Standard after the Commencement Date or the date of the relevant Proposal Approval Notice (as the case may be) which substantially and materially affects the Works (including the carrying out and/or performance of any works or services forming part of the Works);
(d) any suspension by the Owner of all or part of the Works under clause 33 (other than as a result of a breach of this Agreement by a Participant or where the suspension is necessary to ensure that the Works comply with this Agreement);
(e) excluding any late or non-payment by the Owner of an amount due under this Agreement, any other breach or default by the Owner of or under this Agreement (which for the avoidance of doubt, excludes any breach or default by the Owner Participant of or under this Agreement);
(f) the issue of a Proposal Approval Notice; or
(g) any event which constitutes an “Adjustment Event” in accordance with the Adjustment Event Guidelines.
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“Adjustment Event Guidelines”
for each Section, the “adjustment event guidelines” identified as such in the Project Proposal or the relevant Section Proposal (as the case may be) which may:
(a) identify additional Adjustment Events; and/or
(b) provide examples of events or circumstances which amount (or do not amount) to an Adjustment Event to be used as a comparative tool in determining whether an Adjustment Event has occurred.
“Affiliated Undertaking” any:
(a) subsidiary or parent undertaking of a NOP (within the meaning of Section 1162 of the Companies Act 2006 save that for the purposes of subsection (2) of that Section an undertaking is to be treated as a member of another undertaking if any shares in that other undertaking are held by a person or that person’s nominee by way of security or in connection with the taking of security granted by the undertaking); or
(b) fellow subsidiary undertaking or group undertaking of a NOP (within the meaning of Section 1161 of the Companies Act 2006).
“Agreement” this agreement.
“Alliance” the collaborative team and relationships formed by the Participants as set out and subject to this Agreement for the purposes of delivering the Project in accordance with the Alliance Charter.
“Alliance Auditor” the independent auditor appointed by the ALT under clause 32.2.1.
“Alliance Charter” the alliance charter (including the Alliance Principles, Alliance Purpose and Alliance Objectives) for the performance of the Works as set out in Schedule 6 (Alliance Charter) or as may be amended by any Section Proposal in respect of the Section to which that Section Proposal relates which, together with the other terms of this Agreement, governs the relationship between the Participants under this Agreement.
“Alliance Manager” the person specified in clause 8.1 or any other person appointed by the ALT as the Alliance Manager for the purposes of this Agreement from time to time.
“Alliance Leadership Team” or “ALT”
the leadership team for the Alliance established under clause 7.1.
“Alliance Management Team” or “AMT”
the management and project team for the Alliance established under clause 8.2.
“Alliance Objectives” are set out in Schedule 6 (Alliance Charter).
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“Alliance Principles” are set out in Schedule 6 (Alliance Charter).
“Alliance Project Team” or “APT”
the project team for the Alliance to be established under clause 9.1.
“Alliance Purpose” is set out in Schedule 6 (Alliance Charter).
“Alliance Risk” any risk, instruction, decision, determination, direction, approval, event, circumstance or the like occurring under this Agreement or in connection with the carrying out of the Works which (and to that extent):
(a) is not an Adjustment Event; or
(b) does not entitle the Participants to receive any loss, expenses, costs, damages or payment under this Agreement, other than any payment due to any NOP in respect of Actual Cost, Overhead, or Profit.
“Alliance Risk and Opportunity Report”
the alliance risk and opportunity report set out in the relevant Proposal which includes the Risk and Contingency Provision.
“Authorised Person” a person identified as such by name or role in Schedule 1 (Representatives).
“Bank Account” for each NOP, its nominated bank account for payments by the Owner as described in paragraph 3.1 of Schedule 14 (Payment Procedures).
“Best For Project” an approach, determination, decision, method, solution, interpretation, outcome or resolution that is consistent with the VFM Statement and the Alliance Charter.
“BIM Protocol” where stated to apply in the Proposal Approval Notice is the CIC/BIM Protocol first edition 2013 or such other Building Information Modelling protocol stated in the Section Development Notice11.
“Business Day” a day on which banks are open for business in England and Wales excluding a Saturday and Sunday.
“CDM Regulations” the Construction (Design and Management) Regulations 2015 and the approved code of practice issued pursuant thereto.
“Certificate of Completion” the certificate defined in clause 25.4.3 for each Section.
“Change in Control” if, in relation to any person (the first mentioned person):
(a) there is a change in the person that controls the first mentioned person (other than if the ultimate holding company of the first mentioned person remains the same following the change);
(b) a person that controls the first mentioned person
11 NOTE: BIM Protocol must be reviewed and tailored to an alliancing environment where applicable.
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ceases to control that person (other than if the ultimate holding company of the first mentioned person remains the same following the change); or
(c) if the first mentioned person is not controlled, another person acquires control of the first mentioned person.
For the purpose of this definition, the term ‘control’ (including the term ‘controlled’) has the same meaning as in section 450 of the Corporation Tax Act 2010.
“Commencement Date” is the date of this Agreement.
“Completion” the stage in the performance of each Section when:
(a) the Works are complete and in accordance with this Agreement except for minor Defects:
(i) which do not prevent the Owner’s reasonable and beneficial use of the Works;
(ii) which the Participants have reasonable grounds for not promptly rectifying; and
(iii) rectification of which will not prejudice the immediate and convenient use of the Works for their intended purpose as set out, identified or referred to in, or as may reasonably be inferred from the relevant Proposal; and
(b) the Owner has received all documents and information about the design and construction of the Works including all design documentation, surveys and as constructed information and drawings and any other documentation reasonably required by the Owner with respect to the Works.
“Confidential Information” any information that ought to be considered as confidential (however it is conveyed or on whatever media it is stored) and may include information whose disclosure would, or would be likely to, prejudice the commercial interests of any person and Intellectual Property and all personal data and sensitive personal data within the meaning of the Data Protection Act 1998 and the General Data Protection Regulation (EU) 2016/679 once in force.
“Consent” any agreement, approval, authorisation, authority certificate consent, exemption, filing, notarisation, licence, permission, permit or registration from, by or with a Relevant Authority or a Third Party.
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“Consequential Loss” loss of use and/or interruption of operations (save to the extent provided for under clause 23.7), loss of production, loss of revenue, loss of profit or anticipated profit or loss of business reputation, any indirect losses, but does not include any loss expressly stated in clause 41.3 or any loss or increased costs to a Party caused by:
(a) reduction in the Actual Cost or Fee payable by the Owner to any NOP by virtue of Schedule 10 (Actual Cost) or Schedule 11 (Fee);
(b) an increase in the Actual Cost or Fee payable by the Owner to any NOP by virtue of Schedule 10 (Actual Cost) or Schedule 11 (Fee);
(c) a reduction in the amount payable by the Owner to any NOP by virtue of Schedule 13 (Risk or Reward Regime); or
(d) an increase in the amount payable by the Owner to any NOP by virtue of Schedule 13 (Risk or Reward Regime),
in each case to the extent caused by the act or omission giving rise to such loss.
“Construction Act” the Housing Grants, Construction and Regeneration Act 1996 as amended by the Local Democracy, Economic Development and Construction Act 2009.
“Construction Plant” apparatus, facilities, plant, equipment, materials, products, processes, temporary works, machinery and other things used in performing the Works but not forming part of the Works.
“Contracting Authority” any contracting authority as defined in Regulation 4 of the UCR.
“Contracting Strategy” the contracting strategy set out in the Project Management System in the relevant Proposal.
“Cost Element Allocation Tables”
the tables at Annex 1 to Schedule 10 (Actual Cost).
“Crown” the government of the United Kingdom (including the Northern Ireland Executive Committee and Northern Ireland Departments, the Scottish Government and the National Assembly for Wales), including, but not limited to, government ministers, government departments, government and particular bodies and government agencies.
”Date for Completion” the date for Completion of any Section as stated in the Proposal for that Section.
“Date of Completion” the date of Completion of any Section as stated in the Certificate of Completion for that Section.
“Date of Project Final the final completion date of the Works as stated in the
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Completion” Project Final Certificate.
“Date of Section Final Completion”
for any Section, the final completion date of the Works as stated in the Section Final Certificate for that section.
“Date of Works Commencement”
for any Section, the earliest date for commencement of the Works stated in the relevant Proposal.
“Default” is defined in clause 34.1.
“Default Interest Rate” is 4% above the base rate from time to time of the Bank of England.
“Default Notice” a notice given by the Owner under clause 34.2 or by any NOP under clause 34.5.
“Defaulting Participant” is defined in clause 34.1.
“Defect” any error, omission, defect, non-conformity, deficiency or discrepancy in any part of the Works or any other matter that is not in accordance with this Agreement.
“Department for Transport” the governmental body known as the “Department of Transport” of the United Kingdom.
“Defects Correction Period” for any Section, unless stated otherwise in the Proposal for that Section, a period of 2 years commencing from the Date of Completion of that Section.
“Design Authority” for any Section, the person within the Owner Participant notified by the Owner to the ALT from time to time12, as authorised to confirm the safety case compliance with the Standards and Statutory Requirements for the design of the Works.
“Diligence” the exercise of the degree of skill, care, expertise, diligence and foresight which would from time to time be expected of skilled and experienced professional persons engaged in undertakings of a similar scope, type and complexity as the Works.
“Employment Costs” all salaries, wages, commissions, bonuses, all statutory contributions, holiday pay (including payment for accrued but untaken holiday), national insurance contributions, pension contributions made to or on behalf of an employee, taxation (including all income tax deductible under PAYE) and all other employment costs (such as the provision of non-pecuniary benefits).
“Environment” has the same meaning as in the Environment Act 1995.
“Excluded NOP” is defined in paragraph 1.1.1 of Schedule 19 (Exclusion and Termination).
“Exclusion Notice” a notice in accordance with paragraph 1.1.1 of Schedule
12 NOTE – On a project specific basis the Owner may stipulate that this could be any suitable and qualified person agreed by the ALT from time to time whether engaged by the Owner Participant or any NOP. The default position is that the Owner notifies the Design Authority to the ALT.
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19 (Exclusion and Termination).
“Fee” for each NOP, the amount of Overhead and Profit either stated in or determined by the Project Proposal and/or Schedule 11 (Fee) at the Commencement Date in connection with the Works, as adjusted from time to time:
(a) by each Section Proposal in accordance with clause 13.7.4;
(b) in accordance with Schedule 11 (Fee); or
(c) otherwise in accordance with this Agreement.
“Financial Year” any period of 12 months commencing on 1 April and ending on the next 31 March.
“Final Section Element” for any Section, the Section Element completion of which will result in Completion of that Section.
“Freight Access Agreement”
any agreement (excluding Track Access Agreements) entered into between the Owner and any other party for non-passenger services and incorporating the Network Code.
[“Gainshare” the gainshare (if any) which will be calculated as at the Date of Project Final Completion in accordance with the Risk or Reward Regime and in accordance with Schedule 13 (Risk or Reward Regime).] 13
“Good Faith” in the context of this Agreement means:
(a) acting in accordance with the Alliance Principles, Alliance Purpose and Alliance Objectives both in a literal sense and with their intent;
(b) undertaking, adopting and implementing all things reasonably necessary to ensure a Best For Project outcome; and
(c) being fair, honest and reasonable and acting with integrity at all times.
“Governance Plan” the governance plan set out in the Project Proposal.
[“Greater London Area means the area administered by the Greater London Authority or any relevant person or body which replaces the Greater London Authority.]14
“Home Office” has the meaning given at Table A of the Cost Element Allocation Tables.
“Implementation Works” the work and services provided and/or to be provided by an Implementation Works Subcontractor as described in the relevant Proposal.
13 NOTE: Definition depends on the Risk or Reward Regime commercial model 14 NOTE: Retain where applicable.
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“Implementation Works Subcontractor”
any subcontractor named in the relevant Proposal and engaged by or to be engaged by the Owner to provide Implementation Works.
“Implementation Works Subcontract”
a contract between the Owner and the Implementation Works Subcontractor for Implementation Works.
“Incentive Amount” an amount determined under the Risk or Reward Regime relating to the Participants’ performance of the Project which is due from the Owner to the NOPs or the NOPs to the Owner (as the case may be) and in either case to be shared between the NOPs in accordance with this Agreement.
“Index” the index or indices stated in the relevant Proposal.
“Indemnified Party” is defined in paragraph 3.2.1 of Schedule 20 (TUPE).
“Indemnifying Party” is defined in paragraph 3.2.1 of Schedule 20 (TUPE).
“Information Acts” has the meaning given in clause 47.10.1.
“Information Protocols” if BIM is applicable (clause 47.20) shall be as detailed in the Owner’s Brief.
“Insolvency Event” in relation to the Owner, a Participant or Subcontractor means:
(a) such entity stopping or suspending or threatening to stop or suspend payment of all or a material part of its debts, or becoming unable to pay its debts, or being deemed unable to pay its debts under section 123(1) or (2) of the Insolvency Act 1986, except that in the interpretation of this paragraph section 123(1) of the Insolvency Act 1986 has effect as if for “£750” there were substituted “£10,000”;
(b) any person presenting a winding-up petition which is not dismissed within 5 Business Days;
(c) a receiver, manager, administrative receiver or administrator being appointed in respect of such entity;
(d) such entity ceasing or threatening to cease to carry on all or a material part of its business, except in respect of any NOP or Subcontractor for the purpose of and followed by a reconstruction, amalgamation, reorganisation, merger or consolidation on terms approved by the Owner before that step is taken (which approval must not be unreasonably withheld or delayed); or
(e) any event occurring which, under the law of any relevant jurisdiction, has an analogous effect to any of the events listed above.
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“Intellectual Property” all intellectual and industrial property and all rights therein in any part of the world including any patent, patent application, trade mark, trade mark application, registered design, registered design application, trade name, trade secret, business name, discovery, invention, process, formula, know-how, specification, improvement, technique, copyright, unregistered design right, technical information or drawing including rights in computer software, database rights, topography rights.
[“Interim Gainshare” the estimated amount of Gainshare which the ALT determines is payable to the NOPs prior to the Date of Project Final Completion in accordance with Schedule 13 (Risk or Reward Regime)] 15.
“Intermediaries Legislation”
Income Tax (Earnings and Pensions) Act 2003 (ITEPA), Social Security Contributions and Benefits Act 1992 (SSCBA) and all other related statutes and regulations.
“IP Documents” drawings, documents, specifications, software, design, calculations, samples, models, patterns and the like and any other information required by this Agreement prepared, developed or used by any Participant or the Owner in connection with this Agreement.
“Key Result Areas” are defined in Schedule 13 (Risk or Reward Regime).
“Licensee” the Owner or any NOP being a person granted a licence in respect of Intellectual Property under clause 44.
[“London Living Wage” means the basic hourly rate which is set as the London Living Wage by the Mayor of London and/or the Greater London Authority and/or another relevant person, body or agency (before tax, other deductions and any increase for overtime), as may be revised from time to time by the Mayor of London, the Greater London Authority or another relevant person, body or agency.] 16
“Losses” all liabilities (including liabilities related to rights and benefits under an occupational or personal pension scheme (including to the Railways Pension Scheme) and including liabilities arising under any applicable legislation or regulation and/or arising from any failure to provide pension benefits on early retirement or redundancy), damages, expenses, claims, demands, costs (including legal costs on an indemnity basis) and awards.
“Materials” materials, plant, machinery, equipment and products for incorporation into the Works.
“MCOS Performance” the minimum conditions of satisfaction or benchmark level of performance for each Key Result Area, as set out in the relevant Proposal.
“Month” any calendar month.
15 NOTE: Definition depends on the Risk or Reward Regime commercial model 16 NOTE: Retain where applicable.
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“Network” the railway network of which the Owner is the facility owner (as defined in Project 17(6) of the Railways Act 1993).
“Network Code” the document entitled “Network Code” dated 23 September 2009, as amended and modified from time to time.
“Network Operation Issue”
any:
(a) risk to the health and safety of any individual or risk of damage or destruction to any property, or any incident which may reduce the safety integrity levels of any item of infrastructure;
(b) situation or circumstance which the Owner reasonably considers requires immediate or urgent action in order to maintain or restore the effective operation of the Network or any part of it;
(c) compliance with a Statutory Requirement;
(d) direction, requirement, instruction or rule of a Relevant Authority legally binding on any of the Participants;
(e) requirement of the licence to operate the Network granted to the Owner (pursuant to section 8 of the Railways Act 1993);
(f) contractual commitment of the Owner existing on or prior to the Commencement Date or the date of the relevant Section Proposal Delivery Notice; or
(g) requirement to utilise the original copy held by a Third Party of any approved engineering record, drawing or other document in respect of the Network, which is immediately necessary to address an issue arising under any of paragraphs (a) to (f) above.
“Non Owner Participant” or “NOP”
(a) any of the persons other than the Owner listed as a Party to this Agreement as the context so requires and “NOPs” is all of them;
(b) “NOP 1”, “NOP 2” or “NOP 3” is respectively the Party named and defined as such in this Agreement; and
(c) for the avoidance of doubt, NOP excludes the Owner in its capacity as the Owner and as Owner Participant.
“Notice” is defined in clause 46.1.
“Notification” is defined in paragraph 3.2.3 of Schedule 20 (TUPE).
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“Notified Sum” is defined in paragraphs 3.5 and 4.8 of Schedule 14 (Payment Procedures).
“Officer” in respect of any Participant:
(a) a director or secretary of a Participant; or
(b) a person:
(i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the Participant;
(ii) who has the capacity to affect significantly the Participant’s financial standing; or
(iii) in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person's professional capacity or their business relationship with the directors or the Participant).
“On-Account Subcontractor Payment”
has the meaning given in clause 42.3.
“Overhead” for each NOP and Section, the amount of corporate overhead for the relevant NOP deterimined in accordance with Schedule 11 (Fee) and/or the Proposal for the relevant Section, as may be adjusted from time to time in accordance with this Agreement.
“Owner’s Brief” has the meaning given in clause 12.3;
“Owner Participant” the Owner in its capacity as a Participant for the performance of the Works, excluding the Owner in its capacity as the client under this Agreement.
“Owner’s Representative”
the person named as such in Schedule 1 (Representatives), as may be amended from time to time by the Owner in accordance with this Agreement.
[“Painshare” the painshare (if any) which will be calculated as at the Date of Project Final Completion in accordance with the Risk or Reward Regime and in accordance with Schedule 13 (Risk or Reward Regime).] 17
“Participant” is any of the NOPs or the Owner Participant and “Participants” means all of them.
“Participant Document” is any document, calculation, design, drawing, measurement, record or information (whether in physical
17 NOTE: Definition depends on the Risk or Reward Regime commercial model
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or electronic form):
(a) forming part of a Proposal;
(b) forming part of the Pricing Document;
(c) used by the Participants to determine the Target Price (or any adjustment or component thereof) or
(d) otherwise used or submitted by a Participant for performing its obligations under this Agreement (whether before or after the Commencement Date or relevant Proposal Approval Notice),
notwithstanding that such document may be provided in whole or part by the Owner before or after the Commencement Date or relevant Proposal Approval Notice, but excluding the VFM Statement.
“Pay Less Notice” has the meaning given in paragraphs 3.5 and 4.9 of Schedule 14 (Payment Procedure).
“Payment Certificate” has the meaning given in paragraph 3.2.1 of Schedule 14 (Payment Procedure).
“Payment Notice” has the meaning given in paragraph and 3.3.1 and 4.8 of Schedule 14 (Payment Procedure).
“Payment Period Amount” has the meaning given in paragraph 2.4.7 of Schedule 14 (Payment Procedure).
“PCR” has the meaning given in clause 34.1.1.5.
[“Performance Liability Amount”
the amount (if any) determined as payable for Poor Performance in the Key Result Areas calculated in accordance with Schedule 13 (Risk or Reward Regime).] 18
[“Performance Modifier” the performance modifiers for each Section set out in Annex 1 to Schedule 13 (Risk or Reward Regime) and each Section Proposal.] 19
[“Performance Pool Amount”
has the meaning given in Schedule 13.] 20
[“Performance Reward Amount”
the amount (if any) determined as payable for Stretch Performance in the Key Result Areas calculated in accordance with Schedule 13 (Risk or Reward Regime).] 21
“Pollution” a solid, liquid, gas, odour, heat, sound, vibration, radiation or substance of any kind which makes or may make any
18 NOTE: Definition depends on the Risk or Reward Regime commercial model 19 NOTE: Definition depends on the Risk or Reward Regime commercial model 20 NOTE: Definition depends on the Risk or Reward Regime commercial model 21 NOTE: Definition depends on the Risk or Reward Regime commercial model
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segment of the Environment:
(a) unsafe, unfit or harmful for habitation, use or occupation by any person or animal;
(b) degraded in any way; or
(c) not comply with any Statutory Requirements.
“Poor Performance” the level of poor performance for each Key Result Area, being worse than MCOS Performance, as set out in the relevant Proposal).
[“Pricing Document” the document containing the rates and prices for [the development of Section Target Prices in accordance with Schedule 12 (Section Target Prices)]:
(a) tendered by each NOP and included in the Project Proposal; or
(b) agreed between the Parties and appended to the Proposal for that Section,
(if any and as the case may be) and which may be used to determine an adjustment to a NOP’s Target Cost for that Section in accordance with this Agreement] 22.
“Principal Contractor” the principal contractor in accordance with the CDM Regulations.
“Principal Designer” the principal designer in accordance with the CDM Regulations.
“Profit” for each NOP and Section, the amount for profit for the relevant NOP stated in Schedule 11 (Fee) and/or the Proposal for the relevant Section, as may be adjusted from time to time in accordance with this Agreement.
“Project” [describe overall project (should reflect OJEU notice)] as more fully described in the VFM Statement, as may be varied by the Owner from time to time in accordance with clauses 13.7 and 28.
“Project Final Certificate” for the Works, the Section Final Certificate issued in accordance with paragraph 4.5 of Schedule 14 (Payment Procedures) in respect of the last Section in respect of which such a certificate is issued.
“Project Management Plan” for each Section, the project management plan forming part of the Project Management System.
“Project Management System”
for each Section, the project management system set out in the Proposal for the relevant Section, which incorporates the systems and plans required by the VFM Statement.
22 NOTE: Definition depends on methodology for developing target prices
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“Project Office” the office or offices provided by any Participant (which is not a Home Office of that Participant) in accordance with clause 10 for the purpose of performing the Works.
“Project Proposal” the Participant’s proposals for the Project set out at Schedule 9 (Project Proposal) (if any) for delivering the Works and meeting the VFM Statement as at the Commencement Date, as such proposals may be:
(a) varied by the Owner from time to time in accordance with clause 28; and/or
(b) supplemented and modified by Section Proposals in accordance with clause 13.
For the avoidance of doubt, the Project Proposal relates to the Scope of Works for each Section identified in Schedule 2 (Sections) (if any) unless expressly stated otherwise in the Project Proposal.
“Proposal” any Project Proposal or Section Proposal, as may be varied by the Owner from time to time in accordance with clause 28.
“Proposal Approval Notice” for each Section (other than a Section identified in Schedule 2 (Sections), has the meaning given in clause 13.4.
“Proprietary Plant” any part of the Works identified in the relevant Proposal as being proprietary plant to be supplied by a NOP.
“Railway Costs” the Actual Cost referred to in clauses 23.6.3 to 23.7 and paragraph 3 of Annex 2 to Schedule 10 (Actual Cost).
“Reimbursable Cost” the aggregate of all:
(a) Actual Cost incurred or to be treated as incurred by the Owner Participant and each NOP; and
(b) Fee due to each NOP,
in each case in accordance with this Agreement.
“Relevant Accounting Period”
is defined in paragraph 2.1 of Schedule 14 (Payment Procedures).
“Relevant Authority” any court with the relevant jurisdiction and any local, national or supra–national agency, inspectorate, minister, ministry, official or public or statutory person of the government of the United Kingdom or of the European Union, including the Office of the Rail Regulator and the Health and Safety Executive.
“Relevant NOP” has the meaning given in clause 18.1.
“Relevant Participant” has the meaning given in the definition of Wilful Default.
“Relevant Period” 7 years from the Date of Project Final Completion or date
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of termination of this Agreement (as the case may be).
“Relevant Portion” has the meaning given in clause 19.2.
“Relevant Protected Characteristic”
has the meaning given in clause 47.17.1.1.
“Replacement Contractor” any replacement contractor or provider appointed (or proposed to be appointed) by the Owner to provide services the same as or substantially similar to the delivery of the Project or the performance of the Works (or any part of them), or which will, or may, be received in place of or in substitution for the delivery of the Project or the performance of the Work (or any part of them), or otherwise have the same or similar use or application as the delivery of the Project or the performance of the Work (or any part of them).
“Replacement NOP” is defined in paragraph 1.6.1 of Schedule 19 (Exclusion and Termination).
“Reserved Powers” the Owner’s powers as set out in clause 28.3.1.
“Responsibilities Matrix” the responsibilities matrix showing the division and the description of role and responsibilities between the ALT, Alliance Manager, AMT and/or APT at Schedule 7 (Responsibilities Matrix), as may be amended from time to time by the ALT or any Proposal.
“Risk and Contingency Provision”
for all Participants the provision for all possible Actual Cost which may be incurred by the relevant Participant or all Participants (as the case may be) associated with Alliance Risks that may arise in performing the Works as set out in the Project Proposal at the Commencement Date and as adjusted from time to time:
(a) by each Section Proposal in accordance with clause 13.7.4;
(b) in accordance with paragraph 1.3 of Schedule 12 (Target Cost and Target Price); or
(c) otherwise in accordance with this Agreement.
“Risk or Reward Regime” the risk or reward regime set out in Schedule 13 (Risk or Reward Regime).
“Route Services” the Owner’s internal business unit known as “Route Services”.
“Schedule 8 Costs” the compensation payable by the Owner to any operator for unplanned disruption to the Network in accordance with Schedule 8 of any Track Access Agreement or Freight Access Agreement.
“Scope of Works” for each Section or Section Element, the physical scope of the Works as set out in the Project Proposal and/or Section Proposal for the relevant Section or Section Element, as may be varied from time to time in
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accordance with clause 28.
“Scope Variation” a direction to vary the Works in accordance with clause 28.4.1.
“Scope Variation Benchmarking Guidelines”
for each Section, the Scope Variation benchmarking guidelines included in the Proposal for the relevant Section which set out indicative examples of when a direction by the Owner’s Representative in accordance with clause 28.1 may also be a Scope Variation.
“Scope Variation Report” the report defined in clause 28.5.
“Section” any Section identified in Schedule 2 (Sections) or notified by the Owner from time to time in accordance with clause 12.1 provided that for the avoidance of doubt:
(a) if no Sections are identified in Schedule 2 (Sections) at the Commencement Date, and subject to any Sections notified by the Owner from time to time in accordance with clause 12.1, the Works defined by the Project Proposal constitutes the only Section for the Project at that date and the Project Proposal is deemed to be the Section Proposal for that Section at that date; or
(b) if one or more Sections are identified in Schedule 2 (Sections) at the Commencement Date, and subject to any Sections notified by the Owner from time to time in accordance with clause 12.1, those Sections constitutes the entirety of the Works at that date and the Project Proposal is deemed to be the Section Proposals for those Sections at that date.
“Section Development Notice”
has the meaning given in clause 12.1.3.
“Section Element” has the meaning given in clause 12.2.1.
“Section Final Certificate” for each Section, the certificate defined in paragraph 4.5.1 of Schedule 14 (Payment Procedures).
“Section Proposal” a proposal submitted by the ALT for a Section or Section Element (other than any Section or Section Element identified in Schedule 2 (Sections)) in accordance with clause 13 and as attached to the relevant Proposal Approval Notice, and as subsequently amended from time to time in accordance with this Agreement. For the avoidance of doubt, unless the context requires otherwise, a reference to a Section Proposal is to that Section Proposal as accepted by the Owner and attached to the relevant Proposal Approval Notice.
[“Section Target Cost” for any Section, the estimated Actual Costs (including the Risk and Contingency Provision for that Section) of the Participants delivering that Section in accordance with this Agreement [as developed in accordance with Schedule 12
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(Section Target Prices) and] 23 stated in the relevant Section Proposal and accepted by the Owner in accordance with clause 13.2.1.] 24
[“Section Target Price” the specific sum developed in accordance with Schedule 12 (Section Target Prices) and identified as the Section Target Price for all Participants in a Section Proposal which is the subject of a Proposal Approval Notice being the estimate of all Reimbursable Cost for the relevant Section required to:
(a) achieve MCOS Performance;
(b) perform the Works; and
(c) bring the Works to a stage where the Section Final Certificate can be issued in accordance with this Agreement,
in connection with that Section.] 25
“Sensitive Information” is defined in clause 31.2.
“Sharing Arrangement” is defined in clause 5.6.2.
“Site” for each Section or Section Element, any land, or any part of land, where any part of the Works is to be performed or to which access is reasonably required in order to perform such Works.
“Site Labour” for any NOP, any person employed by that NOP to which Table C of the Cost Element Allocation Tables.
“Staff” for any NOP, any person employed by that NOP to which Table B of the Cost Element Allocation Tables.
“Stakeholder” is defined in clause 11.1.
“Standards” (a) all:
(i) technical standards to which railway assets or equipment used on or as part of the Network must conform; and
(ii) operating procedures with which the operators of railway assets must comply;
in each case as issued by the Rail Safety and Standards Board Limited and authorised pursuant to the Railway Group Standard Code from time to time; and
(a) all standards documents (or the equivalent of
23 NOTE: Definition depends on methodology for developing target prices 24 NOTE: Definition depends on the Risk or Reward Regime commercial model 25 NOTE: Definition depends on the Risk or Reward Regime commercial model
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such documents) issued by the Owner for its own use as amended by the Owner from time to time in relation to the Network as a whole.
“Statement” has the meaning given in paragraph 2.1 of Schedule 14 (Payment Procedures).
“Statutory Requirements” (a) Acts of Parliament;
(b) any regulation made by the Council or the Commission of the European Union to the extent that it applies to that Participant or a decision taken by the Commission which is binding on that Participant to the extent that it is so binding:
(c) Consents required by or from a Relevant Authority;
(d) directions given under a statute that affect the performance of the Works; and
(e) all other laws, regulations, conventions, orders, directions, guidelines and policies given by or on behalf of any Relevant Authority which may apply to the Works.
“Stretch Performance” the level of stretch performance for each Key Result Area, being better than MCOS Performance.
“Subcontract” any contract or purchase order, or arrangement made in respect of the Works between any Participant and a Subcontractor.
“Subcontractor” any person engaged by a Participant to perform any part of the Works and includes, where it is not inconsistent with the context, that person’s subcontractors, suppliers agents and consultants. A Subcontractor includes a Supply Chain Partner and any Implementation Works Subcontractor and, for the avoidance of doubt, a Subcontractor may include the counterparty to a subcontract with the Owner Participant.
“Supply Chain Partner” any person engaged by a Participant prior to the Commencement Date or date of the relevant Proposal Approval Notice (as the case may be) as a Subcontractor and identified as such in the relevant Proposal (including any person engaged by the Owner where such engagement is notified by the Owner to each NOP prior to the Commencement Date or date of the relevant Proposal Approval Notice (as the case may be). For the purpose of this Agreement, any such engagement is deemed to be by the Owner Participant from the Commencement Date or date of the relevant Proposal Approval Notice (as the case may be)).
“Suspension Costs” Actual Cost paid by the Owner in respect of the period of suspension under clause 33 which arise solely and as a direct result of the suspension and would not otherwise have been incurred but for the suspension.
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[“Target Cost” for each Participant or all Participants (as the context so requires) the amount identified as such in the Project Proposal at the Commencement Date in connection with the Works as adjusted from time to time:
(a) by each Section Proposal in accordance with clause 13.7.4; or
(b) otherwise in accordance with this Agreement.] 26
[“Target Price” for all Participants, the specific sum identified as the Target Price for all Participants in the Project Proposal at the Commencement Date in connection with the Works as adjusted:
(a) by each Section Proposal in accordance with clause 13.7.4; and
(b) otherwise from time to time in accordance with this Agreement,
being the estimate of all Reimbursable Cost to be incurred in connections with the Works required to:
(c) achieve MCOS Performance;
(d) perform the Works; and
(e) bring the Works to a stage where the Project Final Certificate can be issued in accordance with this Agreement,
and comprises the:
(f) Target Cost for each Participant;
(g) Risk and Contingency Provision for all the Participants;
(h) the Fee for each NOP,
in each case for the Works (including any and all Sections) as adjusted in accordance with this Agreement at the relevant time.] 27
“Termination Notice” a notice in accordance with paragraph 2.1.1 or 2.2.1 of Schedule 19 (Exclusion and Termination).
“Termination Option Date” is defined in paragraph 3.2.6 of Schedule 20 (TUPE).
“Third Party” a person who is not the Owner, the Owner Participant or a NOP or a director, officer or employee of the Owner, Owner Participant or a NOP or an Affiliated Undertaking of the Owner, the Owner Participant or a NOP.
26 NOTE: Definition depends on the Risk or Reward Regime commercial model 27 NOTE: Definition depends on the Risk or Reward Regime commercial model
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“Track Access Agreement” any agreement (excluding Freight Access Agreements) entered into between the Owner and any other party and incorporating the Network Code.
“TUPE” the Transfer of Undertakings (Protection of Employment) Regulations 2006 as amended or re-enacted from time to time.
“UCR” has the meaning given in clause 34.1.1.5;
“Unexpected Person” is defined in paragraph 3.2.1 of Schedule 20 (TUPE).
“VAT Exclusive Consideration”
is defined in paragraph 6 of Schedule 14 (Payment Procedures).
“VFM Statement” the value for money proposition as set out in Schedule 8 (VFM Statement), as may be amended from time to time in accordance with clause 13 or 28.
“Wilful Default” in respect of any Participant (including the Owner Participant but excluding the Owner) (the ”Relevant Participant”):
(a) a deliberate and purposeful act or omission carried out, or real and substantial evidence of a deliberate and purposeful act or omission carried out, with a reckless disregard or calculated regard for the consequences of the act or omission by the Relevant Participant, its respective Officers, or any representative of the Relevant Participant on the ALT or AMT or any Supply Chain Partner of the Relevant Participant, which is a breach of a duty or any obligation arising out of or under this Agreement, or which is a breach of a duty or obligation owed by the Relevant Participant to the Owner or any other NOP however arising (which includes a breach of the Alliance Charter);
(b) a fraudulent act or omission by the Relevant Participant, any director, officer, employee or agent the Relevant Participant, any representative of the Relevant Participant on the ALT or AMT or any Supply Chain Partner of the Relevant Participant;
(c) a repudiation or abandonment of this Agreement by the Relevant Participant; or
(d) any act or omission by an officer, representative or employee of the Relevant Participant that:
(a) would, if done by an Officer, constitute a Wilful Default;
(b) has come to the attention of an Officer of the Relevant Participant, or any representative of the Relevant Participant appointed to the ALT or AMT; and
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(c) the relevant Officer or representative of the Relevant Participant appointed by the ALT or AMT has not taken reasonable action to address,
but does not include any error of judgement, mistake, act or omission, whether negligent or not, which is made in Good Faith by:
(a) the Relevant Participant;
(b) any director, officer, employee or agent of the Relevant Participant;
(c) any representative of the Relevant Participant on the ALT, AMT or APT; or
(d) any Supply Chain Partner of the Relevant Participant.
“Works” for each Section or Section Element, the whole of the works, services and obligations to be performed by the Participants from the Date of Works Commencement until the Date of Section Final Completion in:
(a) adopting, preparing and completing all design required to deliver the Works;
(b) delivering the Scope of Works;
(c) compliance with any direction by the Owner in accordance with clause 28 (including any Scope Variation);
(d) managing any Adjustment Event;
(e) managing all Alliance Risks;
(f) the supply of any Construction Plant;
(g) all things reasonably necessary to meet the VFM Statement and MCOS Performance;
(h) preparing a Proposal in accordance with clauses 12 and 13 for a proposed Section;
(i) rectification work necessary to make good any Defects arising before and during any Defects Correction Period; and
(j) the performance of all other obligations under this Agreement in connection with the relevant Section,
provided that the Works excludes any works or services performed by the Participants which are not directly referable to the VFM Statement, the Scope of Works or any assumption upon which the element of the Target
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Price or the relevant Section is based.
“Works Status Reports” for each Section, the four weekly reports prepared by the AMT and submitted to the ALT in accordance with clause 32.4.
2. Interpretation
2.1 A reference to any statute, treaty or legislative provision or to a provision of it must be construed, at any particular time, as including any amendments, consolidations, extensions, replacements or re-enactments at any time in force and to all subordinate legislation made under it.
2.2 A reference to a clause, party, Schedule, attachment, annexure or exhibit is a reference to a clause of, and a party, Schedule, attachment, annexure or exhibit to, this Agreement and a reference to this Agreement includes any clause, Schedule, attachment, annexure and exhibit.
2.3 The singular includes the plural and vice versa.
2.4 Words of any gender include all genders.
2.5 Words denoting natural persons include any other persons.
2.6 Headings and bold type are for convenience only and do not affect the interpretation or construction of this Agreement.
2.7 A reference to a document (including this Agreement) is that document as varied, amended, novated, supplemented, modified, ratified or replaced at that time.
2.8 Other parts of speech and grammatical forms of a word or phrase defined in this Agreement have a corresponding meaning.
2.9 The words “include” or “for example” or similar expressions do not limit what else is included.
2.10 The word “law” includes common law and any constitution, decree, judgement, legislation, order, ordinance, regulation, statute, treaty or other legislative measure.
2.11 The word “Party” means a party to this Agreement and includes its successors in title, permitted assignees and permitted transferees.
2.12 An expression importing a person includes any company, partnership, joint venture, association, corporation or other body corporate and any government, state or any agency of a government or state as well as an individual.
2.13 A reference to a body (including an institute, association or authority), other than a party to this Agreement, whether statutory or not which ceases to exist or whose powers or functions are transferred to another body, is a reference to the body which replaces it or which substantially succeeds to its powers or functions.
2.14 All money referred to under this Agreement is in pounds sterling.
2.15 Where the day on or by which any thing is to be done is not a Business Day, that thing must be done on or by the next Business Day.
2.16 Subject to clauses 25.2, 25.3, 26 and 27 and paragraph 4 of Schedule 14 (Payment Procedures), all references in this Agreement to a “Section” apply to a Section Element unless the context requires otherwise.
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SCHEDULE 2
SECTIONS
[To be inserted by Network Rail if applicable]
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SCHEDULE 3
REPRESENTATIVES
Clause Representative Particular
Clause 2.2 Owner’s Representative [insert name]
Schedule 5 paragraph 1.3.2
Authorised Person [insert name and/or role of each such person]
Clause 7.1 ALT representatives Owner Participant
[insert]
NOP 1
[insert]
NOP 2
[insert]
NOP 3
[insert]
Clause 7.5 Alternative ALT representatives Owner Participant
[insert]
NOP 1
[insert]
NOP 2
[insert]
NOP 3
[insert]
Clause 8.1 Alliance Manager [insert]
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SCHEDULE 4
OWNER’S AND PARTICIPANTS’ CONTACT DETAILS
1. The Owner
Address:
[insert address]
[insert name]
Email addresses: [insert email addresses]
Attention: [insert name]
2. Owner Participant
Address:
[insert address]
[insert name]
Email addresses: [insert email addresses]
Attention: [insert name]
3. NOP 1
Address:
[insert address]
[insert name]
Email addresses: [insert email addresses]
Attention: [insert name]
4. NOP 2
Address:
[insert address]
[insert name]
Email addresses: [insert email addresses]
Attention: [insert name]
5. NOP 3
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Address:
[insert address]
[insert name]
Email addresses: [insert email addresses]
Attention: [insert name]
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SCHEDULE 5
OWNER’S REPRESENTATIVE
1. ROLE OF THE OWNER’S REPRESENTATIVE
1.1 Extent of role
Unless otherwise stated in the relevant Proposal, the Owner’s Representative performs the roles and responsibilities of the Owner’s Representative stated in this Schedule 5 (Owner’s Representative).
1.2 The Owner Representative acts on behalf of the Owner
In performing any role under this Agreement, the Owner’s Representative acts on behalf of the Owner in its capacity as the client for the performance of the Works and not as Owner Participant.
1.3 Reliance on Owner Representative
1.3.1 The Participants are entitled to rely on any act or omission of the Owner’s Representative which is made by the Owner’s Representative (or any authorised delegate) pursuant to or in accordance with this Schedule 5 (Owner’s Representative) as an act or omission of the Owner.
1.3.2 Except as provided in paragraph 1.3.1, the Participants may only rely on any act of the Owner (including in respect of any of the matters in this Schedule 5 (Owner’s Representative)) if that act is made or confirmed by a corporate instruction of the Owner signed by an Authorised Person or a registered director or company secretary of the Owner.
1.3.3 The Participants must and are entitled to ignore any act purported to be made by any person representing the Owner (other the Owner’s Representative), including in respect of any of the matters in this Schedule 5 (Owner’s Representative), which is not in accordance with paragraph 1.3.2.
1.3.4 This paragraph 1.3 is without prejudice to any obligation under this Agreement (including under any Statutory Requirement) of a NOP whether as a Party, the Alliance Manager or member of the ALT, AMT or APT to notify the Owner of matters arising under or connected with the Works or this Agreement.
2. SPECIFIC ROLES OF THE OWNER’S REPRESENTATIVE
2.1 Scope of Works
2.1.1 The Owner’s Representative must facilitate the Participants’ access to documentation, which describes the Owner’s requirements for the design, documentation and construction of the Works; and
2.1.2 may direct the Participants in writing to change the Works in accordance with clause 28.1 (including for any Scope Variation).
2.2 Financial Accountability
The Owner’s Representative must:
2.2.1 specify the required format and intervals for reporting to the Owner on financial and other matters;
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2.2.2 formally acknowledge on behalf of the Owner adjustments to the Target Price, Key Result Areas and any Date of Completion where an Adjustment Event occurs as such are agreed and notified by the ALT;
2.2.3 check that all payments by the Owner to each NOP for the Actual Cost that the relevant NOP incurs are made in accordance with this Agreement;
2.2.4 check that all payments by the Owner to each NOP of any [Gainshare][and Performance Reward Amount] due are made in accordance with this Agreement (after taking into account any [Interim Gainshare] and/or [Painshare] previously paid or due from that NOP); 28
2.2.5 receive the security for performance required to be provided by each NOP under this Agreement;
2.2.6 return the security provided by each NOP to the relevant NOP within 1 Month of the issue of the Project Final Certificate; and
2.2.7 check that all payments by the Owner on the Section Final Certificate to each NOP are made in accordance with this Agreement.
2.3 Liaison and facilitation
The Owner’s Representative must:
2.3.1 communicate directly with the chairperson of the ALT, Alliance Manager and the AMT on operational issues;
2.3.2 attend ALT meetings as required, and other meetings by agreement with the Alliance Manager or as required by this Agreement;
2.3.3 ensure that the Owner provides relevant information in a timely manner;
2.3.4 communicate to the Owner issues arising from the Participants;
2.3.5 facilitate access to relevant resources and expertise in the Owner for the benefit of the Participants; and
2.3.6 ensure relevant support staff within the Owner understand the nature of the alliance, and the obligations placed on the Participants.
2.4 Ownership
The Owner’s Representative must:
2.4.1 to the extent that the Owner is required to do so under clause 16.1.2, ensure the Participants are given such non-exclusive access to the Site or part thereof (provided that the Owner’s Representative is not required to procure any access for the Project which is the responsibly of the Owner Participant and/or any NOP to procure under this Agreement);
2.4.2 issue the Certificate of Completion to the Participants on behalf of the Owner in accordance with this Agreement when notified by the ALT in accordance with clause 25.4.3;
2.4.3 confirm to the Participants that defects or omissions are rectified by the end of the Defects Correction Period when so notified by the ALT;
28 NOTE: Terminology depends on the Risk or Reward Regime commercial model
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2.4.4 receive all documents and information in respect of the design and construction of the Works, including all design documentation, surveys and as constructed information together with any other documentation, which is held by the Owner with respect to the Works;
2.4.5 to the extent required, make payment to each NOP on the Section Final Certificate in accordance with this Agreement; and
2.4.6 if necessary, suspend the progress of the whole or part of the Works in accordance with clause 33.2.
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SCHEDULE 6
ALLIANCE CHARTER
1. ALLIANCE CHARTER
1.1 Purpose of Our Alliance Charter
1.1.1 [Alliance to develop pre-contract].
1.2 Our Mission
1.2.1 [Alliance to develop pre-contract].
1.3 Our Alliance Commercial Principles
1.3.1 [Alliance to develop pre-contract].
1.4 Our Alliance Behavioural Principles
1.4.1 [Alliance to develop pre-contract].
2. ALLIANCE PURPOSE
2.1 Alliance Purpose
2.1.1 [Alliance to develop pre-contract consistent with VFM Statement].
3. ALLIANCE OBJECTIVES
3.1 Alliance Objectives
3.1.1 [Alliance to develop pre-contract consistent with VFM Statement].
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SCHEDULE 7
RESPONSIBILITIES MATRIX29
Description of role or responsibility Responsibility
ALT Alliance Manager
AMT
1. Delivery and performance of the obligations of the Participants in connection with this Agreement.
X
2. Provide corporate support for the Participants in connection with their obligations as such under this Agreement.
X
3. Development and deployment of the strategic Alliance framework.
X X
4. Creating a culture necessary to achieve exceptional results in delivery
X X
5. Ensuring that all actions, decisions and behaviours are consistent with Alliance Principles.
X
6. Development and deployment of a transparent Governance Plan for the Participants in connection with their obligations as such under this Agreement.
X
7. Compliance with the Governance Plan and the Responsibilities Matrix.
X X X
8. Determining the functions of the Alliance Manager from time to time.
X
9. Determining the functions of the AMT from time to time.
X X
10. Reviewing and amending (as necessary) the Alliance Charter from time to time.
X
11. Making recommendations to the Owner as to how to resolve any ambiguity, discrepancy or inconsistency in this Agreement and the documents comprised in it.
X
12. Establishing and ensuring the implementation of the strategic leadership and direction of the Participants.
X
13. Establishing and implementing transparent governance and accountability structures for the Participants.
X X
14. Assuming responsibility for the performance of the Participants under this Agreement.
X
15. Ensuring that structure and resourcing of the Participants for the performance of their obligation under this Agreement is such that the MCOS Performance will be met or exceeded.
X
16. Ensuring that all members of the AMT understand the Alliance Charter and perform the Works in accordance with the Alliance Charter.
X X
29 NOTE – Sample Responsibilities Matrix may be reviewed and updated/revised by the Participants pre-contract
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Description of role or responsibility Responsibility
ALT Alliance Manager
AMT
17. Making recommendations to the Owner where required to do so under this Agreement.
X
18. Endorsing the appointment of the AMT. X
19. Approving amendments to the AMT. X
20. Determining the period required for the Project Office. X
21. Notifying the Owner no later than 20 Business Days from the date it is anticipated that Completion will be reached.
X
22. Notifying the Owner when Completion has been reached. X
23. If necessary, ensuring matters raised by the Owner to allow the Certificate of Completion to be issued are dealt with promptly and re-notifying the Owner when those matters have been addressed.
X
24. Issuing the Section Final Certificate (containing the information referred to in paragraph 4.5 of Schedule 14 (Payment Procedures)) to the Owner.
X
25. If necessary, ensuring that the matters raised by in relation to the Section Final Certificate are dealt with promptly and re-submitting the Section Final Certificate when those matters have been addressed.
X
26. Ensuring that the Target Price proposed to the Owner is the minimum amount necessary to achieve the MCOS Performance
X
27. Determining if an Adjustment Event has occurred. X
28. Determining any adjustment to the Target Price, Key Result Areas, Date for Completion where an Adjustment Event has occurred and notifying the Owner.
X
29. If necessary, considering the reasons for not approving an adjustment to the Target Price, Key Result Areas, Date for Completion where an Adjustment Event has occurred.
X
30. Considering Scope Variation Reports and determining whether or not they are a Scope Variation.
X
31. Submitting a Scope Variation Report to the Owner where a Scope Variation has occurred and ensuring that the Scope Variation is not performed until Scope Variation Report is agreed by the ALT.
X
32. Considering approvals sought by Participants to enter into any contract, arrangement or understanding which is in any way associated with the Participant and the Works.
X
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Description of role or responsibility Responsibility
ALT Alliance Manager
AMT
33. Determining what information is sensitive information in conjunction with the Owner.
X
34. Determining an acceptable and appropriate manner to mask and/or protect sensitive information.
X
35. Determining where disclosure of information would, or could potentially, involve a breach of a Statutory Requirement, recognised best practice corporate governance guidelines or an Participant’s existing confidentiality obligations.
X
36. Approving the audit plan developed by the Participants. X
37. Determining if any Participant is not to be allocated responsibility for the performance of any obligation under this Agreement.
X
38. Determining how the costs associated with intellectual property licences under this Agreement are to be borne.
X
39. Determining the basis for allocation of costs if Construction Plant is to be used for purposes other than the Works.
X
40. Determining the basis for allocation of costs if a Site’s accommodation and storage facilities are also used for purposes other than the Works.
X
41. Determining the extent that the cost of insurances not specific to this Agreement should be apportioned for the purpose of being Actual Cost.
X
42. Determining costs that should be Actual Cost. X
43. Establishing the procedure for payment in accordance with clause 30 and Schedule 14.
X
44. Calculating [Interim Gainshare] or [Painshare] at any time. 30 X
45. Calculating the [Gainshare] or [Painshare] at the Date of Project Final Completion. 31
X
46. [Calculating the Performance Reward Amount or Performance Liability Amount as and when required by this Agreement] 32
47. Appointing an Alliance Auditor and determining his or her duties (from time to time).
X
30 NOTE: Terminology depends on the Risk or Reward Regime commercial model 31 NOTE: Terminology depends on the Risk or Reward Regime commercial model 32 NOTE: Terminology depends on the Risk or Reward Regime commercial model
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Description of role or responsibility Responsibility
ALT Alliance Manager
AMT
48. Acting in accordance with the commitments given under clause 5 to resolve all issues arising.
X
49. Approving the processes for payment proposed by the AMT. X
50. Provide the leadership of the AMT and APT X
51. Development and deployment of the AMT and APT and definition of roles and responsibilities
X
52. Prepare and implement training plans for the APT and workforce to ensure continuous improvement of personnel and methods of working
X X
53. Development and oversight of the compilation of the Target Price and ensure that a value assured Target Price is developed
X X
54. Development and deployment of management plans and processes for the AMT and APT
X X
55. Develop and implement a communications strategy for the Participants in connection the performance of their obligation as such under this Agreement
X X
56. Development of process and procedures as required under the terms of this Agreement
X X
57. Performing the Works in accordance with the Alliance Charter.
X X
58. Preparing work status reports in a format and at times acceptable to the Owner.
X X
59. Achieve the Key Result Areas set by the Owner and develop with the ALT the KPIs necessary to measure achievement of progress
X X
60. Preparing Key Result Areas performance reports in a format and at times acceptable to the Owner.
X X
61. Preparing of periodic earned value reports (incorporating the information set out in clause 32.3.3 in a format and at times acceptable to the Owner.
X X
62. Preparing periodic cash flow statements covering a 28 day rolling period in a format and at times acceptable to the Owner.
X X
63. Performing the functions determined by the ALT from time to time.
X X
64. Exercising Diligence in the performance of the Works. X X
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Description of role or responsibility Responsibility
ALT Alliance Manager
AMT
65. Selecting the APT. X
66. Attending ALT meetings as required by the ALT. X
67. Submitting a Scope Variation Report (that complies with clause 28.5) to the ALT where a direction by the Owner is considered to be a Scope Variation prior to implementing it.
X X
68. Developing and implementing a system to manage the VAT implications of the Works as soon as practicable after the date of the relevant Services Request.
X X
69. Preparing and delivering a Notice in respect of each Accounting Period to the ALT at a time and in a format approved by the ALT which details Actual Cost payable under this Agreement and the entitlement of each NOP to Overhead and Profit.
X X
70. Satisfying the Owner’s concerns with any Notice issued in accordance with item 69 above.
X X
71. Developing necessary procedures to define in detail the processes for payment (based on the principles set out in this Agreement) and seek the approval of the ALT to them.
X X
72. Performing the functions determined by the ALT as required. X X
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TITLE: ALT
ROLE: to promote strategic direction, support, governance and oversight to the Alliance and continuity over the Project.
VFM RESPONSIBILITIES
1. Provide the overall management and coordination of the Alliance and act as the governing body for the administration of this Agreement.
2. At all times act in the best interest of the Alliance and not for the individual interest of the Participant that they represent.
3. To act as the prudent financial managers of the Alliance and its budgets
4. Provide strategic direction and set policy.
5. Set stretch targets particularly those that represent outstanding performance in each of the Key Result Areas and champion these with the alliance organisation.
6. Commit the resources of their respective organisations as required by the Project.
7. Make timely decisions, informed by alliance principles and characteristics.
8. Empower the Alliance Manager.
9. Challenge the Alliance Manager and AMT, to ensure effective leadership and top performance.
10. Ratify the Alliance Manager’s recommendation for membership and structure of the AMT.
11. Set, review and revise as required limits of delegation to the Alliance Manager.
12. Conduct periodic performance and development reviews of the Alliance Manager.
13. Review the Alliance Manager’s engagement plan of interventions designed to engage and maintain engagement of members of AMT.
14. Review the Alliance Manager’s role definition tree, covering key group and individual roles definitions.
15. Provide support and advice to the Alliance Manager when appropriate.
16. Facilitate the development of an inspirational mission that engages all the Participants.
17. Provide high level support and stakeholder interfaces requested by the Alliance Manager.
18. Monitor the performance of the alliance against the programme and Key Result Areas and take corrective action as required.
19. Monitor the health of the alliance culture, the volume of collaboration and take corrective actions as required.
20. Set reporting requirements for the Alliance Manager and AMT.
21. Agree to and support the delivery of Key Result Areas set by the Owner in the Request for Estimate
22. Review the Works Status Reports prepared by the AMT and investigate and advise on measures to overcome any adverse trends.
23. Confirm approval of the Works Status Reports for the relevant period or where no approval is given instruct the Alliance Manager to take appropriate steps at the meeting to allow the ALT to approve the same or if this is not possible to take appropriate steps to re-submit the
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Works Statue Report for approval at the earliest opportunity.
24. To approve as appropriate the recommendations of the AMT for scope re-allocation between Participants and the subsequent reallocation of Fee between the NOPs and any adjustment of [Gainshare Percentage]33 for each NOP.
25. Issue directions, approvals and decisions as required by the Agreement.
33 NOTE – May depend on the Risk or Reward Regime commercial model
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TITLE: Alliance Manager
ROLE: To provide the leadership of the AMT and APT, to deliver the Works and ensure that the quality of the Works meets the VFM Statement and that the Key Result Areas where set are met or exceeded
VFM RESPONSIBILITIES
1. Undertake the day to day management of the AMT and APT acting as the leader thereof
2. To deliver to the ALT the Works Status Reports and such other reports and data required
3. To take and implement the instructions of the ALT
4. To act as the daily point of contact with the Owner’s Representative
5. To develop an organisation structure for the AMT and APT and recommend to the PAB the appointment of the ALT members
6. To optimise through the life of that Project the size of the APT as necessary to ensure the delivery of the Works for that Project and the careful management of the budget for the APT
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Title: AMT
Role: To undertake the day to day management and administration of the Project through the leadership of the Alliance Manager including the audit of quality and the maintenance of the Project.
VFM RESPONSIBILITIES
1. Ensure that all necessary resources are available to undertake the Works
2. Implement actions necessary to meet objectives and stretch targets set by the ALT
3. Seek out areas of scope re-allocation between the Participants for consideration by the ALT
4. Consider strategies to contain adverse trends or increase value provision recommended by the Participants and respond accordingly
5. Establish procedures in conjunction with the ALT where applicable for the commissioning of the Works and the issue of Completion notices when ready
6. Manage interfaces between the Alliance and any Implementation Works Subcontractors
7. Develop and maintain an execution plan for the Project
8. Develop and maintain risk mitigation and value management plans, submit reports to the ALT and ensure that the Risk Register is properly managed and controlled
9. Ensure that all applicable health and safety, environmental and quality requirements are maintained in accordance with the policies of the Alliance and its objectives
10. Monitor the overall status of the Project against measures covering cost, quality, programme, behaviour and in particular where Key Result Areas are set. Prepare the Works Status Reports for the Alliance Manager to present to the ALT
11. Ensure compliance with all applicable laws, regulations, standards relevant to the Works
12. Establish health and safety regimes and monitoring to ensure that the impartial and fair monitoring of the Participants is undertaken
13. Establish roles and responsibilities with regards to safety approvals and the like
14. Develop and implement in association with the ALT agreed procedures for the submission, approval and use of drawings and other data for that Project
15. Develop and maintain procedures for the inspection, examination and testing and certification of all materials and workmanship and the performance of all Plant
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SCHEDULE 8
VFM STATEMENT
[The VFM Statement will be inserted here. The VFM Statement is an “Owner” document and not an “Alliance” document. The VFM Statement may be amended by Scope Variations. The VFM Statement may be updated by the Owner to reflect any Section Proposal.]34
34 NOTE: Typically the VFM Statement may include the following parts: (1) The Owner’s narrative business case for the Project; (2) The Owner’s required outputs from the Project; and (3) The Owner’s mandatory requirements (e.g. required specifications and processes such as Railway Standards). The VFM Statement will contain limited, if any, “input” requirements, and nothing which is to be an Alliance risk, as the Owner takes the entire risk in respect of the contents of the VFM Statement. This may mean any designs developed pre-contract between the Owner and the Alliance, or by the Owner independent of the Alliance (which the Alliance is required to adopt or confirm), should be included in the Project Proposal or Section Proposal as the case may be.
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SCHEDULE 9
PROJECT PROPOSAL
[The Project Proposal may contain the Pricing Document and information prepared by the NOPs during the tender process to and/or design/information developed by the Owner pre-contract which the Alliance adopt for the whole or the part of the Project. The Project Proposal may be fully developed for the Project or will be supplemented by Section Proposals for new Sections and/or Section Elements introduced pursuant to clause 13. As a minimum must contain sufficient information at the point of signature for the Alliance to function for initial phases of the Project (even if detailed procedures etc are developed later).]
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SCHEDULE 10
ACTUAL COST
1. INTRODUCTION
1.1 Definition of Actual Cost
Subject to specific exclusions contained in this Agreement for the Works, all costs which are reasonably and actually incurred by the Participants in connection with the Works (excluding any corporate overhead component not specific to the Works and any profit or mark up of any kind) will be recoverable as actual cost subject to and in accordance with this Schedule 10 (“Actual Cost”).
1.2 Exclusion of overheads and profit from Actual Cost
It is a fundamental underlying principle of this Agreement that, except for the Overhead and Profit, no Participant will derive any mark up, overhead, profit or unreasonable advantage from the utilisation of their resources for the Works.
2. COST ELEMENT ALLOCATION TABLE
2.1 Allocation of cost elements in Tables A to I
Tables A to I at Annex 1 to this Schedule 10 (Actual Cost) (“Cost Element Allocation Tables”) allocate various cost elements between Actual Cost, Overhead or Profit.
3. OWNER PARTICIPANT
3.1 Owner Participant Actual Costs
The categories of Owner Participant Actual Cost are included at Annex 2 to this Schedule 10 (Actual Cost).
4. THE ALT MAY DETERMINE ACTUAL COST
4.1 The ALT may determine Actual Cost
The ALT may determine that any cost notwithstanding that it is not otherwise an Actual Cost in accordance with this Schedule 10 (Actual Cost) should be an Actual Cost.
5. EXCLUSIONS
5.1 Exclusions from Actual Cost
The following costs incurred by the Participants will not be Actual Cost (and to the extent that they have previously been recognised as Actual Cost will be credited against Actual Cost):
5.1.1 any costs incurred by a Participant in performing any works or services which are not directly referable to the VFM Statement, the Scope of Works and the assumptions adopted by the Participants in developing the Target Price or which do not otherwise form part of the Works;
5.1.2 any legal costs incurred by a Participant in defending any prosecution or claim brought against a Participant by a Relevant Authority by reason of an alleged breach of any Statutory Requirement, except where the ALT determines otherwise by notice in writing to the Participants, having regard to the nature of the breach and the effect of the breach on the Project, the Works and the Owner;
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5.1.3 any costs associated with Participants’ representatives attending an ALT meeting;
5.1.4 any costs, liabilities or payments incurred or made by a Participant in indemnifying another Participant in accordance with this Agreement;
5.1.5 any costs, liabilities or payments incurred by a Participant in defending or prosecuting lawsuits of claims (including payment of judgments, awards, orders, damages, restitution, compensation or interest) by or against another Participant in accordance with clauses 6.2 and 6.3;
5.1.6 any costs incurred by a Participant in providing any difference in cover insurance to supplement the insurances referred to in this Agreement;
5.1.7 any and all costs, losses, damages and expenses suffered or incurred by the Defaulting Participant arising out of or in connection with a Default and/or exclusion and/or termination under clauses 34 and 36;
5.1.8 any corporate or personal income tax or capital gains tax imposed on a Participant;
5.1.9 VAT;
5.1.10 any penalties or fines in respect of the payment of any fees, charges, duties royalties, licences and statutory charges of any kind imposed with respect to the Works;
5.1.11 any costs incurred by a NOP, or to be incurred by a NOP, which were excluded from Actual Cost as part of a Proposal; and
5.1.12 any costs incurred by a Participant, or to be incurred by a Participant, specifically excluded under this Agreement as being an Actual Cost.
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Annex 1 to Schedule 10 (Actual Cost) – Cost Element Allocation Tables
Table A NOP’s General / Overhead and Home Office* Costs
Ref Cost Element Cost Category
Actual Cost
Overhead
A. Head office and corporate overhead costs √
B. Divisional Overhead costs of any type within the same legal entity
√
C. Franchises, royalties, licences √
D. Taxes (e.g. Council Tax/Business Rate etc) √
E. Interest, financing charges, banking charges √
F. Company accounting / auditing √
G. Research and development √
H. Business insurance, warranties, professional indemnity (excluding insurances taken out by the Owner), product liability insurance
√
I. Works contract insurance premiums (excluding premiums in respect of insurances taken out by the Owner or by the NOP where stated in the Project Proposal or approved Section Proposal for the relevant Section), including the cost of insurance premiums for events which are at the NOP’s or the Owner’s risk and which this Agreement requires the NOP or the Owner to insure as individual legal entities – e.g. employer’s liability insurance
√
J. Home Office* stationery √
K. Marketing, sales, exhibitions √
L. General fees paid on a regular basis (excluding project specific general fees instructed by the the Owner)
√
M. Legal advice, fees and services (excluding project specific advice, fees and services instructed by the ALT)
√
N. Advertising including agency fees and publication costs √
O. Home Office* management, technical, administration and service staff and non-project-specific staff including HR, Finance, Commercial, Accounts, Purchasing, HSQE and IT
√
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P. Company cars, where not allocated directly to project specific staff, including all costs and expenses (except for expenses pre-authorised by the ALT)
√
Q. All Home Office* accommodation costs including all services, administration, maintenance, furniture, equipment, rent, rates, taxes, telephone, fax, reprographics, couriers, postage
√
R. Home Office* computer hardware and software systems √
S. Head office recruitment both staff and agency costs and redundancy
√
T. Tendering costs (except where expressly permitted under this Agreement or approved beforehand by the ALT)
√
U. Charitable donations and entertaining unless approved beforehand by the ALT
√
V. Design costs (subject to pre-authorisation by the ALT). The cost of design of the Works and equipment done outside the Site must include the cost of people as set out in Table B and payments made to consultants for subcontracted design work
√
W. Training √
X. Parent Company Performance Guarantee √
Y. Bonds √
Z. Trade bodies and professional fees √
* Home Office means any office where the Participant operates its business from that is not a Project Office. It includes the Participant’s main office as well as any regional or subsidiary offices.
Table B
Designated Project Specific** NOP’s Employed Staff – Including AMT Members
Ref Cost Element Cost Category
Actual Cost
Overhead
A. NOP’s staff who are carrying out work on the Project and those detailed on the staff organogram (and approved by the ALT)
√
B. Secretarial/clerical personnel as detailed on the staff √
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organogram (and approved by the ALT)
C. Staff payroll burden consisting of:
i. actual salaries and other emoluments including contractual bonuses (excluding bonuses related to the profitability of the NOP’s business)
ii. pre-authorised overtime, week-end or bank holiday allowances and sick pay
iii. subsistence and lodging allowances including location allowances
iv. fares, daily travelling allowances, car and fuel allowances and expenses
v. private medical, permanent health and life insurance as per the personnel’s contract of employment
vi. employer’s contributions to approved pension schemes (excluding special pension contributions that the employer may have to make to the pension fund to make up any shortfall)
vii. employer’s National Insurance contributions
viii. project specific** training inclusive of time spent and course fees, subject to prior authorisation by the ALT
√
D. All costs for company cars for project specific** staff (where allocated directly to staff) including insurance, tax, depreciation, maintenance and non-recoverable VAT. Fuel to be reimbursed in accordance with the conditions of employment for individual members of the NOP’s project specific** staff
√
E. Staff employee benefits √
F. Travel, accommodation and subsistence costs for Site based UK and non-UK personnel, to Site and other authorised project specific** destinations, subject to the cost and other limits set out in the NOP’s expenses policy
√
G. Travel, accommodation and subsistence costs for non-Site based UK and non-UK personnel, to Site and other authorised project specific** destinations, subject to the cost and other limits set out in the NOP’s expenses policy
√
H. Travel, accommodation and subsistence costs for Home Office* based personnel, to Site and other authorised project specific** destinations, subject to the cost and other limits set out in the NOP’s expenses policy
√
I. Maternity payments (and any other similar payments to persons arising from any statutory re-enactment or modification or new legislation made or effective after the Commencement Date) in excess of statutory payments where the recipient has been engaged on the Works for a reasonable
√
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period of time
J. Statutory maternity payments (and any other similar payments to persons arising from any statutory re-enactment or modification or new legislation made or effective after the Commencement Date) where the recipient has been engaged on the Works for a reasonable period of time
√
K. Maternity or paternity support pay (and any other similar payments to persons arising from any statutory re-enactment or modification or new legislation made or effective after the Commencement Date) of up to 2 weeks full pay where the recipient has been engaged on the Works for a reasonable period of time
√
L. Long term sickness payments in excess of three months pay (unless approved by the ALT as Actual Cost)
√
M. Long term sickness payments up to 3 months pay where the recipient has been engaged on the Works for a reasonable period of time
√
N. Recruitments payments relating to work on the Works and approved by the ALT
√
O. Redundancy where the recipient has been engaged on the Works for a reasonable period of time and apporved by the ALT
√
**Project Specific means staff members who carry out work of any description on the Project with the prior approval of the ALT, excluding staff who fall within the definition of Home Office staff. No distinction shall be made between staff working for different divisions within the same legal entity.
Table C
NOP’s Site Labour
Ref Cost Element Cost Category
Actual Cost Overhead
A. Labour costs burden consisting of:
i. Workpeople’s total earnings, including pre-authorised overtime and including contractual bonuses (excluding bonuses related to the profitability of the NOP’s business)
ii. Payments in respect of public holidays and pre-authorised periodic leave
iii. Sickness or injury payments
iv. Pre-authorised bonus or incentive payments
√
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v. Employer’s contributions to annual holiday credits, pensions, death benefit and other welfare schemes (excluding special pension contributions that the NOP (as employer) may have to make to the pension fund to make up any shortfall)
vi. Employer’s National Insurance contributions
vii. Fares, daily travelling allowances or pre-authorised lodging allowances (not relocation allowances)
viii. Tool allowances
ix. Medical examinations where approved by the AMT
x. Protective clothing
xi. Project specific** training inclusive of time spent and course fees, subject to prior authorisation by the ALT
B. Labour only sub-contract √
C. Redundancy where the recipient has been engaged on the Works for a reasonable period of time and approved by the ALT
√
Table D
NOP’s Site Establishment and Site Charges (NOP’s Equipment)
Ref Cost Element Cost Category
Actual Cost Overhead
A. Offices stores and workshops etc. √*
B. Partitioning, racking and fitting out √*
C. Temporary foundations and services √*
D. Installation and running costs of utilities including water, gas, electricity and other services
√*
E. Documentation, printing, photocopying and consumables √*
F. Computer hardware and software systems √*
G. Cleaning and maintenance √*
H. Safety requirements including first aid, clothing, training, protection systems, inspecting and all other measures required to satisfy current legislation
√*
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I. Telephones, mobile phones, site communication systems, fax
√*
J. Security and CCTV √*
K. Consumables, tea coffee, paper and the like √*
L. Furniture, fixtures, fittings and Equipment √*
M. Stationery, postage, courier services and the like √*
N. Photography √*
O. Temporary roads and hard-standings √*
P. Temporary fencing, hoarding and security √*
Q. Petty cash √*
R. Welfare facilities, canteens, drying and messing rooms as may be required including maintenance
√*
S. Road-sweeping, waste disposal √*
T. Technical equipment for surveying and testing etc √*
U. Rent (including other lease costs incurred by virtue of a property lease approved by the ALT), rates, taxes, and other local authority and statutory charges.
√*
V. Any other related site establishment and site charges not included in the above (to be listed by the AMT)
√*
√* May be charged at agreed quoted rates subject to approval by the ALT.
Table E
Other NOP’s Machinery Equipment and Plant
Ref Cost Element Cost Category
Actual Cost Overhead
A. Plant purchased for incorporation within the Works √
B. Machinery, tools, consumables and equipment required for the design, installation, testing, commissioning and management of the Works, either purchased, hired or leased (including track installation and tamping plant;
√
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cranes; wheeled and tracked machinery; engineering trains; locomotives and wagons)
C. Own ‘internal’ NOP’s Machinery Equipment and Plant.
Where the equipment is purchased specifically for use by the NOP to execute the Works, the cost is the purchase price or the first cost if the NOP assembled, fabricated or otherwise produced the item of equipment. The cost is credited with residual values, as actually realised or if not, as approved by the ALT after that equipment is no longer required by the NOP to execute the Works.
Where the equipment is hired by the NOP from an Affiliate Undertaking, the costs should be at reasonable market hire rates approved by the ALT.
Where the equipment is owned by the NOP but not purchased specifically for use by the NOP to execute the Works, the costs should be at reasonable market hire rates approved by the ALT
√
D. Hired ‘external’ NOP’s Machinery Equipment and Plant √
E. Transportation, erection and dismantling, fuels oils and other consumables for Participant’s own and hired NOP’s Machinery Equipment and Plant
√
F. Spare parts, tax, maintenance and insurance for NOP’s own and hired Machinery Equipment and Plant
√
G. Site transport (if specified) √
Table F
Materials
Ref Cost Element Cost Category
Actual Cost Overhead
A. Materials for incorporation as part of the Works including transportation of Materials and insurance whilst in storage and transit. Also included is the cost of samples and tests and providing and removing packaging. The cost is credited with payments received for the disposal of materials and return packaging.
√
B. Subcontractor’s materials √
C. Materials for temporary works including formwork, earthwork support etc
√
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Table G
Miscellaneous
Ref Cost Element Cost Category
Actual Cost Overhead
A. Small tools (picks, shovels, barrows, buckets and similar non-mechanical tools, including small portable power tools)
√
B. Tipping, including all taxes and charges, haulage √
C. The cost of scrap recovery where undertaken by the NOP shall be credited with the payments received for scrap sold or held by the NOP
√
D. Consumables (e.g. welding rods, oxyacetylene, protective clothing etc)
√
E. Project expenses, (except where incurred for the furtherance or promotion of the individual NOP’s business or other interests outside the Alliance), either purchased, rented, leased, or hired and approved by the ALT
√
F. Team building events and other special team functions approved by the ALT
√
G. Manufactured products and goods at the lowest discounted market price current at the date of their supply. The cost is credited with payments received for the disposal of materials and return packaging
√
Table H
Costs Payable to the NOPs for Subcontractors (including consultants, agency staff and specialists)
Ref Cost Element Cost Category
Actual Cost Overhead
A. Design supply and construct √
B. Supply and construct √
C. Construct only √
D. Design only √
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E. Supply only √
F. Labour only √
G. Implementation Works Contracts √
H. Specialist contractors including legal advisors engaged for the purposes of making or defending a claim in connection with the Project against any supplier or subcontractor and where specifically approved by the ALT
√
I. Consultants and Agency Staff Ω √
Ω Consultants and Agency Staff means any person who is not engaged by the Participant under a contract of employment within the meaning ascribed under the Employment Rights Act 1996
Table I
Profit
Ref Cost Element Cost Category
Profit Actual Cost
Overhead
A. Profit / return for the NOP √ - -
B. Loss of potential profit/return arising from the performance of the Works and the actual recovery of Actual Cost, Overhead and Profit in accordance with this Agreement being less than the amount the NOP had anticipated or budgeted on recovering in respect of profit/return at the Commencement Date as result of the project, performance and business risks borne by the NOP under or in connection with this Agreement
√ - -
C. Loss of potential profit/return arising from the performance of the Services and the actual recovery of Actual Cost, Overhead and Profit in accordance with this Agreement being less than the amount the NOP could had recovered had it been able to utilise all or part of the resources undertaking the Works to undertake other works or services in the market as result of market forces increasing the potential profit/return on such otherworks or services and/or reducing the project, performance or business risks to be borne by the NOP in connection with such other works or services
√ - -
D. Bonuses paid to staff and labour which is √ - -
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related to the profitability of the NOP’s business
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Annex 2 to Schedule 10 (Actual Cost)
Owner Participant’s Actual Cost
1. OWNER PARTICIPANT’S ACTUAL COST
1.1 Actual Cost of Owner Participant’s staff
2. [The actual direct salary costs of staff employed by the Owner Participant and assigned to the AMT and APT for the performance of the Works, calculated on the basis of the relevant individual’s base salary as established by pay roll records, excluding all costs other than base salary which is directly applicable to remuneration (for example accrual costs or statutory on-costs), multiplied by a factor of [INSERT].]35
2.1 Owner Participant’s Actual Cost table
The categories of Owner Participant’s Actual Cost are included in the table below. This list is non-exhaustive. Any additional costs which are to be included within the scope of Owner Participant’s Actual Cost shall be agreed and stated in the relevant Section Proposal.
Owner Participant’s Actual Cost Table
Ref Cost Element Cost Category
Profit Actual Cost Overhead
A. Possessions and Isolations Management
_ √ _
B. Route Services – Bulk Railway Materials _ √ _
C. Route Services - Engineering Trains and Train Haulage
_ √ _
D. Route Services - Tampers _ √ _
E. Route Services - Railway Spares _ √ _
F. Route Services - Delivery by Road _ √ _
G. Temporary Land Access and Compensation Costs
_ √ _
H. TWAO or DCO Costs _ √ _
I. Consents and Consultation Costs _ √ _
J. Environmental Management Costs _ √ _
35 NOTE – To be developed by Network Rail on a Project specific basis as part of the Risk or Reward commercial model. Typically this may include Route Services costs and Railway Costs, as well as Owner Participant staff within the Alliance. This Annex must reflect the extent of the “role” to be performed by the Owner Participant and/or the extent of Owner’s risks borne by the Alliance, and the basis on which such costs are calculated. The same methodology must apply in determining the Target Price (and associated Target Cost and Risk and Contingency Provision). This may also take the form of an agreed table of “rates” for some or all of such costs, rather than a methodology to determine actual costs. any such costs incurred by the Owner, must be expressed to be treated as “Actual Cost incurred by the Owner Participant. The general principle should be that all such costs (whether truly “actual” or a “rate”) must be “actually and reasonably incurred by the Owner or Owner Participant in connection with the Works”.
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K. Signal Sighting Costs _ √ _
L. Operational Publications (Yellow Peril, Section C Notices, Energisation Notices)
_ √ _
M. Public Relations Communication specific to the [Alliance]
_ √ _
N. Shift Costs for Test Trains _ √ _
O. CEEQUAL, BS11000 and BREEAM Accreditation
_ √ _
P. TASS Design and Data Changes to WCML trains
_ √ _
Q. Network Change Costs _ √ _
R. National Records Group (NRG) Administration Fee for historical railway and Signalling information
_ √ _
S. Maintenance Framework requirements for the Project (e.g. fencing, contingent labour, security guards etc.)
_ √ _
T. Independent Advisors as required by the Alliance detailed in the VFM Statement
_ √ _
U. Network Rail In-House design teams such as SDG, BDG, EPDG as required by the Alliance
_ √ _
V. NR Property management team _ √ _
W. Timetable and/or performance modelling _ √ _
3. RAILWAY COSTS
3.1 Railway Costs : Schedule 4
Amounts payable whether in contract, tort, delict or otherwise by the Owner pursuant to Schedule 4 of any Track Access Agreement (or the equivalent provisions of any Freight Access Agreement) reasonably and actually incurred by the Owner are treated as Actual Cost incurred by the Owner Participant.
3.2 Railway Costs : Schedule 8
Amounts payable whether in contract, tort, delict or otherwise by the Owner pursuant to Schedule 8 of any Track Access Agreement (or the equivalent provisions of any Freight Access Agreement) as a result of any overrun possession or speed restriction where any part of the Works affect the running of the Network which [are reasonably and actually incurred by the Owner are treated as Actual Cost incurred by the Owner
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Participant][incurred by the Owner are not recoverable as Actual Cost under this Agreement or otherwise] 36.
36 NOTE – To be stipulated by Network Rail. Alternatively Network Rail may determine that “actual” costs incurred by the Owner should be reflected in a table of agreed “rates” (i.e. a form of “liquidated damages”) for Schedule 4 and/or Schedule 8 costs. In either case this will be a Project specific decision determined prior to the procurement process for the relevant project.
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SCHEDULE 11
FEE37
[ALTERNATIVE 1]
1. OVERHEAD AND PROFIT
1.1 Overhead
The total Overhead payable by the Owner to each NOP under this Agreement is [insert percentage]% of the relevant NOP’s Actual Cost payable under this Agreement. Overhead is a mark-up on this amount.
1.2 Profit
The total Profit payable by the Owner to each NOP under this Agreement is [insert percentage]% of the relevant NOP’s Actual Cost payable under this Agreement. Profit is a mark-up on this amount.
1.3 Percentage is not adjusted
The percentage figures specified above will apply for the duration of the Project and will not be adjusted, split, modified or altered in any way for any reason or purpose including (or the purpose of recognising that each NOP may have a different internal percentage figure that is normally applied in other contracting arrangements).
1.4 Payment Procedure
The procedure for payment must be established by the ALT in accordance with Schedule 14 (Payment Procedures).
1.5 Overhead is inclusive of all overheads
37 NOTE – The Owner will determine for each Project whether Overhead and Profit will be payable to the NOPs under the Agreement as: Alternative 1 - a mark-up percentage on the NOPs’ Actual Costs incurred under the Agreement; Alternative 2 – as a fixed amount with reference to the NOPs’ Actual Costs component of the Target Price; or Alternative 3 – as a fixed lump sum. This election will be reflected in this Schedule.
In addition, the Owner will determine whether a single Overhead and Profit percentage figure or amount will be specified in the Agreement or individual percentage figures or amounts specified for each of the NOPs in the Agreement. This Schedule contemplates single Overhead and Profit percentage figures or amounts being specified applicable to all NOPs.
Whichever alternative is utilised, the Owner will seek to ensure that any amounts payable by the Owner to the NOPs as Overhead and Profit under the Agreement have not otherwise been reimbursed to the NOPs as Actual Costs (i.e. there is no double recovery of costs by the NOPs under the Agreement). The Owner may request a detailed breakdown of the NOPs’ proposed Profit prior to entering into this Agreement.
This Schedule assumes Overhead and Profit is calculated for each NOP individually. In Alternatives 2 and 3 consideration will need to be given to the effect of scope transfers etc. during the delivery of the Project. Conversely, if a single amount/percentage is agreed for all NOP’s for Overhead and Profit in Alternatives 2 and 3, the contract will need to state how this is to be shared between the NOPs.
Consideration must be given to any potential “fee on fee” issues (particularly Affiliates). Network Rail will determine in respect of each Project whether this is included in the Schedule or managed by the ALT on a “Best For Project“ basis when awarding sub-contracts.
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The Participants agree that Overhead is, unless the Agreement otherwise provides, inclusive of all overhead costs.
1.6 Overhead and Profit in relation to preparing a Sectional Proposal
[set out provisions in relation to Overhead and Profit in connection with preparing any Section Proposal: these may vary between Sections and/or NOPs].
[ALTERNATIVE 2]
2. OVERHEAD AND PROFIT
2.1 Overhead
The total Overhead payable by the Owner to each NOP under this Agreement is [insert percentage]% of the relevant NOP’s Actual Costs component of the Target Price. Overhead is a mark-up on this amount.
2.2 Profit
The total Profit payable by the Owner to each NOP under this Agreement is [insert percentage]% of the relevant NOP’s Actual Costs component of the Target Price. Profit is a mark-up on this amount.
2.3 Percentage is not adjusted
The percentage figures specified above will apply for the duration of the Project and will not be adjusted, split, modified or altered in any way for any reason or purpose including for the purpose of recognising that each NOP may have a different internal percentage figure that is normally applied in other contracting arrangement.
2.4 Payment Procedure
The procedure for payment must be established by the ALT in accordance with Schedule 14 (Payment Procedures).
2.5 Overhead is inclusive of all overheads
The Participants agree that Overhead is, unless the Agreement otherwise provides, inclusive of all overhead costs.
2.6 Overhead and Profit in relation to preparing a Sectional Proposal
[set out provisions in relation to Overhead and Profit in connection with preparing any Section Proposal: these may vary between Sections and/or NOPs].
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[ALTERNATIVE 3]
3. OVERHEAD AND PROFIT
3.1 Overhead
The total Overhead payable by the Owner to each NOP under this Agreement is £[insert amount for Overhead separately for each NOP as a table].
3.2 Profit
The total Profit payable by the Owner to each NOP under this Agreement is £[insert amount for Profit separately for each NOP as a table].
3.3 Overhead and Profit are not adjusted38
The amounts specified above will apply for the duration of the Project and will not be adjusted, split, modified or altered in any way for any reason or purpose, [including for any Adjustment Event pursuant to clause 29]39.
3.4 Payment Procedure
The procedure for payment must be established by the ALT in accordance with Schedule 14 (Payment Procedures).
3.5 Overhead is inclusive of all overheads
The Participants agree that Overhead is, unless the Agreement otherwise provides, inclusive of all overhead costs.
3.6 Overhead and Profit in relation to preparing a Sectional Proposal
[set out provisions in relation to Overhead and Profit in connection with preparing any Section Proposal: these may vary between Sections and/or NOPs].
38 NOTE – The Owner may provide that there is an adjustment of the fixed amount for Overhead and/or Profit due to Adjustment Events under clause 29. A hybrid between Alternative 2 and 3 may be utilised if commercially appropriate. See footnote below. 39 NOTE – This may require amendment to clauses and other schedules which refer to adjustment of the Fee (or Overhead and Profit) including in particular clause 29. Particular consideration is needed if there is no adjustment for an Owner breach (ground (e)).
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SCHEDULE 12
[TARGET PRICES]
This Schedule 12 comprises two parts: Part A: Determination of the [[Section] Target Price] Part B: Adjustments to the [[Section] Target Price] Part A – Determination of [[Section] Target Price] 1. Introduction
1.1 The [[Section] Target Price] is the aggregate of the amounts stated in each [Section] Proposal for the:
1.1.1 [[Section] Target Cost] for each NOP;
1.1.2 [[Section] Target Cost] for the Owner Participant;
1.1.3 Risk and Contingency Provision;
1.1.4 Overhead for each NOP; and
1.1.5 Profit for each NOP,
as such amounts may be adjusted in accordance with this Agreement.40 [Project specific arrangements for calculation of target prices to be inserted – e.g. use of Pricing Document] 41 Part B – Adjustments to the [[Section] Target Price] 1. ADJUSTMENT TO THE [[SECTION TARGET] PRICE]
1.1 Adjustment to the [[Section] Target Price]
1.1.1 The [[Section] Target Price] is only adjusted in respect of an Adjustment Event.
1.1.2 The adjusted [[Section] Target Price] consists of the aggregate of each of the adjusted elements of the Section Target Price.
1.1.3 The ALT determines any adjustment to the [[Section] Target Price] in accordance with clause 29 and this Schedule 12 (Target Price) 42.
1.2 Adjustment of [[Section] Target Cost] 43
For each Participant, the adjustment to its [[Section] Target Cost] must be determined:
40 NOTE – Depends on Risk or Reward commercial model. Note this assume amounts are identified for each NOP, rather than an aggregate amount for all NOPs 41 NOTE – Depends on Risk or Reward commercial model 42 NOTE – Depends on Risk or Reward commercial model 43 NOTE – Depends on Risk or Reward commercial model
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1.2.1 so far as fair and reasonable in accordance with the [Pricing Document] (including using all rates and prices stated therein so far as reasonably applicable); and
1.2.2 otherwise in accordance with fair market rates and prices at the relevant time.
1.3 Adjustment of Risk and Contingency Provision
[insert basis of adjustment by ALT]44
1.4 Adjustment of Overhead and Profit
[insert reference to Schedule 11 (Fee) and clause 29 if relevant]45
44 NOTE – Depends on Risk or Reward Regime commercial model 45 NOTE – Depends on Risk or Reward Regime commercial model
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SCHEDULE 13
RISK OR REWARD REGIME46
[ALTERNATIVE 1]
1. GENERAL
1.1 Components of Risk or Reward Regime
The Risk or Reward Regime is separated into two components, namely:
1.1.1 the cost component - outturn Actual Cost underrun or overrun (which may result in a Gainshare or Painshare); and
1.1.2 the non-cost component – Key Result Areas and Performance Modifier performance (which may result in a Performance Reward Amount or Performance Liability Amount).
46 NOTE – Prior to entering into this Agreement and as part of the procurement for each Project, the detailed Risk or Reward Regime will be developed. This Schedule only sets out the general principles of the Risk or Reward Regime (and is intended to set out the Owner’s requirements for the Risk or Reward Regime). Further details and matters in respect of the Risk or Reward Regime may be set out in the relevant Proposals. The information relating to the Risk or Reward Regime which is developed as part of any Proposal must be consistent with the general principles (and the Owner’s requirement) set out in this Schedule 13 (Risk or Reward Regime).
Therefore, once the Project Alliance Agreement is entered into, the general principles of the Risk or Reward Regime will be set out in this Schedule 13 (Risk or Reward Regime) and further details of the Risk or Reward Regime will be set out in Schedule 9 (Project Proposal) and/or the relevant other Proposals.
This Schedule sets out two alternative frameworks for the Risk or Reward Regime. There may be other alternatives which the Owner considers more appropriate in the context of the Project and the VFM Statement. It is important to understand that the two alternative below are provided as suggested frameworks only, and the Risk or Reward Regime will be considered and developed by the Owner to reflect the unique circumstances of the Project.
Alternative 1 – The Risk or Reward Regime is separated into two components, being a cost component (resulting in payment of a Gainshare to the NOPs or payment of a Painshare by the NOPs (if any) for performance against the Target Price) and a non-cost component (resulting in a separate payment of a Performance Reward Amount to the NOPs for Stretch Performance (i.e. performance which is better that MCOS Performance) or payment of a Performance Liability Amount by the NOPs for Poor Performance (i.e. performance which is worse than MCOS Performance) against the Key Result Areas, as modified for performance against the Performance Modifiers (if any)).
Alternative 2 – The Risk or Reward Regime does not contain separate components, but rather the calculation of a Gainshare or Painshare (if any) for performance against the Target Price will be modified by performance against the Key Result Areas and Performance Modifiers to arrive at a final calculation of the Gainshare or Painshare (if any) (i.e. if there is Stretch Performance against the Key Result Areas, the Gainshare will be increased or the Painshare will be decreased and, if there is Poor Performance, the Gainshare will be decreased or the Painshare will be increased, as modified for performance against the Performance Modifiers).
Under each of the alternatives, at the time of calculating whether any amount is payable under the Risk or Reward Regime, the NOPs will be required to demonstrate to the Owner that any Gainshare payable to the NOPs (and therefore outturn Actual Costs underrun) has been achieved by performing the Works for each Section in accordance with the Alliance Charter and otherwise in accordance with the Agreement and not as a result of an over estimate of the cost of performing the Works when setting the Target Price. For example, the NOPs may demonstrate that an outturn Actual Costs underrun has occurred by reason of:
• innovation; • risks which did not materialise; • outstanding risk management under the Agreement; or • systemic changes in the market (i.e. changes which are not Project specific, such as commodity price fluctuations.
In respect of any Performance Reward Amount calculated to be payable to the NOPs, the NOPs will be required to demonstrate to the Owner that the Performance Reward Amount has been calculated to reflect Stretch Performance against the Key Result Areas, and not simply MCOS Performance against the Key Result Areas. The intention of this mechanism is not to avoid any payment properly due to the NOPs under the Risk or Reward Regime, but to address public sector accountability requirements.
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1.2 Risk or Reward Regime details contained in the Proposals
This Schedule 13 (Risk or Reward Regime) sets out the general principles as to the manner in which the above components of the Risk or Reward Regime are to operate. Further details and matters in respect of the Risk or Reward Regime are set out in the Project Proposal and each relevant Proposal.
1.3 Demonstrating reasons for cost savings
The NOPs acknowledge and agree that:47
1.3.1 there will be no payment of any Gainshare under this Agreement at any time unless the NOPs can demonstrate to the Owner that the outturn Actual Cost underrun has been achieved by performing the Works in accordance with the Alliance Charter and otherwise in accordance with this Agreement and not as a result of an over estimate of the cost of performing the Works when setting the Target Price;
1.3.2 in demonstrating the matters set out in paragraph 1.3.1, NOPs must submit a report to the Owner at each time that any Gainshare is calculated to be payable under this Agreement which:
1.3.2.1 details each of the cost savings which have been achieved by the NOPs against the outturn Actual Cost;
1.3.2.2 provides reasoning as to how the cost savings have been achieved by the NOPs and could not have otherwise been identified as part of the development of the Target Price;
1.3.2.3 provides evidence that the NOPs, in achieving the cost savings, performed the Works in accordance with the Alliance Charter and otherwise in accordance with this Agreement; and
1.3.2.4 otherwise meets the requirements of the guidelines set out in any relevant Proposal for demonstrating the matters set out in paragraph 1.3.1;
1.3.3 there will be no payment of any Performance Reward Amount to the NOPs under this Agreement at any time unless the NOPs can demonstrate to the Owner that the Performance Rewards Amount has been calculated to reflect Stretch Performance against the Key Result Areas under this Agreement, and not simply MCOS Performance against the Key Result Areas;
1.3.4 in demonstrating the matters set out in paragraph 1.3.3, the NOPs must submit a report to the Owner at each time that any Performance Reward Amount is calculated to be payable to the NOPs under this Agreement which meets the requirements of the guidelines set out in any relevant Proposal for demonstrating the matters set out in paragraph 1.3.3; and
1.3.5 if the NOPs are unable to demonstrate the matters set out in paragraphs 1.3.1 and 1.3.3, the Owner will be entitled to adjust the payment of any Gainshare or Performance Reward Amount under this Agreement to reflect the principles set out in those paragraphs.
47 NOTE – Prior to the payment of any Gainshare by the Owner, paragraph 1.3 below requires the NOPs to provide details of the cost savings against the Target Price, and to demonstrate to the Owner how these cost savings have been achieved. This mechanism is not intended to allow the Owner to withhold or delay the payment of Gainshares to which the NOPs are entitled. Rather, the paragraph has been included to ensure that the Owner is able to satisfy standards of public sector accountability, and to meet the Government’s requirements for the expenditure of public monies.
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2. OUTTURN ACTUAL COST UNDERRUN OR OVERRUN
2.1 Sharing underrun or overrun
The Outturn Actual Cost underrun or overrun component of the Risk or Reward Regime for the Project will be applied in accordance with the Project Proposal and each relevant Proposal.
2.2 Diagram illustrating the sharing mechanism
A diagram illustrating the mechanism for calculating the Gainshare or Painshare (as the case may be) based on Outturn Actual Cost is shown in the Project Proposal and each relevant Proposal.
3. CALCULATION AND PAYMENT OF INTERIM GAINSHARE, GAINSHARE OR PAINSHARE
3.1 [Interim Gainshare or Painshare at the [Date of Final Completion]
As soon as practicable after the [Date of Final Completion]:
3.1.1 the ALT will calculate the Interim Gainshare or Painshare (if any and as the case may be) following determination of the sum of the outturn Actual Cost in performing the Works to reach the [Date of Final Completion]; and
3.1.2 subject to paragraph 1.3.1, the Owner will make a payment (if any) to the NOPs or the NOPs will make a payment (if any) to the Owner (as the case may be) in accordance with Schedule 14 (Payment Procedures).] 48
3.2 Gainshare or Painshare at the Date of Project Final Completion49
As soon as practicable after the Date of Project Final Completion:
3.2.1 the ALT will calculate the Gainshare or Painshare (if any and as the case may be) following determination of the sum of the outturn Actual Cost in performing the Works to the Date of Project Final Completion; and
3.2.2 subject to paragraph 1.3.1, the Owner will make a payment (if any) to the NOPs or the NOPs will make a payment (if any) to the Owner (as the case may be) in accordance with Schedule 14 (Payment Procedures).
4. KEY RESULT AREAS AND PERFORMANCE MODIFIERS50
4.1 Principles
The non-cost component of the Risk or Reward Regime will be applied such that:
48 NOTE – Depends on the Risk or Reward commercial model. This assume an interim release of Interim Gainshare (if any) at the conclusion of the final certificate for each Section. Alternatively, the Owner may determine prior to procurement of the Project that Interim Gainshare may be payable at earlier stages with ALT approval. 49 NOTE – Depends on the Risk or Reward commercial model, but final incentivisation payments must be made at the Date of Project Final Completion in any event. 50 NOTE – As noted above, as part of the development of the Project Proposal and each relevant Proposal, the detailed Risk or Reward Regime will be developed. This will include the development of the matters set out in the paragraphs below (within parameters established during the procurement process) which will determine the manner in which performance against the Key Result Areas and Performance Modifiers will translate to adjustment of the Gainshare or Painshare (if any and as the case may be) under the Risk or Reward Regime.
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4.1.1 Stretch Performance against the Key Result Areas (i.e. performance which is better than MCOS Performance against the Key Result Areas) will result in a Performance Reward Amount being payable by the Owner to the NOPs; and
4.1.2 Poor Performance against the Key Result Areas (i.e. performance which is worse than MCOS Performance against the Key Result Areas) will result in a Performance Liability Amount being payable by the NOPs to the Owner,
as modified for performance against the Performance Modifiers.
4.2 Key Result Areas
The Key Result Areas for each Section are set out in the Project Proposal and each relevant Proposal.
4.3 Performance against Key Result Areas
The Project Proposal and each relevant Proposal set out for each of the Key Result Areas:
4.3.1 they key performance indicators;
4.3.2 the weightings;
4.3.3 what constitutes MCOS Performance, Stretch Performance and Poor Performance;
4.3.4 methodologies for measuring performance and calculating a performance score; and
4.3.5 the relationship between the performance score and calculation of the Performance Reward Amount or Performance Liability Amount (if any and as the case may be).
4.4 Performance Modifiers
4.4.1 The Performance Modifiers for each Section are set out in the Project Proposal and each relevant Proposal.
4.4.2 The Project Proposal and each relevant Proposal set out for each Performance Modifier:
4.4.2.1 what constitutes a recordable event;
4.4.2.2 methodologies for recording these events; and
4.4.2.3 the relationship between the occurrence of these events and calculation of the Performance Reward Amount or Performance Liability Amount (if any and as the case may be).
5. GAINSHARE, PAINSHARE AND KEY RESULT AREAS ON TERMINATION OR EXCLUSION
5.1 Exclusion
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On expulsion of a NOP under clause 36 and Schedule 19 (Exclusion and Termination, Gainshare, Painshare and Key Result Areas are determined in accordance with clause 36 and Schedule 19 (Exclusion and Termination).51
5.2 Default termination
On default termination of this Agreement by the Owner under clause 37 and Schedule 19 (Exclusion and Termination), Gainshare, Painshare and Key Result Areas are determined in accordance with clause 37 and Schedule 19 (Exclusion and Termination).52
51 NOTE – Schedule 19 may require amendment to reflect the actual Risk or Reward commercial model. 52 NOTE – Schedule 19 may require amendment to reflect the actual Risk or Reward commercial model. Note that loss of profit per se is not recoverable
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[ALTERNATIVE 2]
1. GENERAL
1.1 Components of Risk or Reward Regime
The Risk or Reward Regime measures performance in the following areas:
1.1.1 outturn Actual Cost underrun or overrun; and
1.1.2 performance against the Key Result Areas and Performance Modifiers,
and may result in a Gainshare payable by the Owner to the NOPs or a Painshare payable by the NOPs to the Owner (if any and as the case may be) in accordance with this Schedule 13 (Risk or Reward Regime).
1.2 Risk or Reward Regime details contained in the Proposals
This Schedule 13 (Risk or Reward Regime) sets out the general principles as to the manner in which the Risk or Reward Regime is to operate. Further details and matters in respect of the Risk or Reward Regime are set out in the Project Proposal and each relevant Proposal.
1.3 Demonstrating reasons for cost savings
The NOPs acknowledge and agree that: 53
1.3.1 there will be no payment of any Gainshare under this Agreement at any time unless the NOPs can demonstrate to the Owner (as appropriate) that any outturn Actual Cost underrun has been achieved by the NOPs by performing the Works in accordance with the Alliance Charter and otherwise in accordance with this Agreement and not as a result of an over estimate of the cost of performing the Works when setting the Target Price;
1.3.2 in demonstrating the matters set out in paragraph 1.3.1, the NOPs must submit a report to the Owner at each time that any Gainshare in calculated to be payable under this Agreement which (as appropriate):
1.3.2.1 details each of the cost savings which have achieved by the NOPs against the outturn Actual Cost;
1.3.2.2 provides reasoning as to how the cost savings performed the Works in accordance with the Alliance Charter and otherwise in accordance with this Agreement;
1.3.2.3 provides evidence that the NOPs, in achieving the cost savings, performed the Works in accordance with the Alliance Charter and otherwise in accordance with this Agreement; and
1.3.2.4 otherwise meets the requirements of the guidelines set out in the Project Proposal and each relevant Proposal for demonstrating the matters set out in paragraph 1.3.1; and
1.3.3 any Gainshare calculated under the outturn Actual Cost underrun or overrun component of the Risk or Reward Regime at any time will not be increased or
53 NOTE – Prior to the payment of any Gainshare by the Owner, paragraph 1.3 below requires the NOPs to provide details of the cost savings against the Target Price, and to demonstrate to the Owner how these cost savings have been achieved. This mechanism is not intended to allow the Owner to withhold or delay the payment of Gainshares to which the NOPs are entitled. Rather, the paragraph has been included to ensure that the Owner is able to satisfy standards of public sector accountability, and to meet the Government’s requirements for the expenditure of public monies.
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any Painshare will not be decreased (as the case may be) unless the NOPs can demonstrate to the Owner (as appropriate) that there has been Stretch performance against the Key Result Areas under this Agreement, and not simply MCOS performance against the Key Result Areas;
1.3.4 in demonstrating the matters set out in paragraph 1.3.3, the NOPs must submit a report to the Owner at each time that any Gainshare or Painshare is calculated to be payable under this Agreement which meets the requirements of the guidelines set out in the Project Proposal and each relevant Proposal for demonstrating the matters set out in this paragraph 1.3.3;
1.3.5 if the NOPs are unable to demonstrate the matters set out in paragraph 1.3.1, the Owner will be entitle to adjust the payment of any Gainshare under this Agreement to reflect the principles set out in that paragraph; and
1.3.6 if the NOPs are unable to demonstrate the matters set out in paragraph 1.3.3, the Owner will be entitled to adjust the payment of any Gainshare or Painshare (as the case may be) under this Agreement to reflect the principles set out in that paragraph.
2. OUTTURN ACTUAL COST UNDERRUN OR OVERRUN
2.1 Sharing underrun or overrun
The Outturn Actual Cost underrun or overrun component of the Risk or Reward Regime for the Project will be applied in accordance with the Project Proposal and each relevant Proposal.
2.2 Diagram illustrating the sharing mechanism
A diagram illustrating the mechanism for calculating the Gainshare or Painshare (as the case may be) based on Outturn Actual Cost is shown in the Project Proposal and each relevant Proposal.
3. KEY RESULT AREAS AND PERFORMANCE MODIFIERS54
3.1 Modification of Gainshare and Painshare by performance
The Gainshare or Painshare (as the case may be) based on Outturn Actual Cost will be modified to reflect performance against the Key Result Areas and Performance Modifiers such that:
3.1.1 Stretch Performance against the Key Result Areas (i.e. performance which is better than MCOS Performance against the Key Result Areas) will result in the Gainshare being increased or the Painshare being decreased (as the case may be); and
3.1.2 Poor Performance against the Key Result Areas (i.e. performance which is worse that MCOS Performance against the Key Result Areas) will result in the Gainshare being decreased or the Painshare being increased (as the case may be),
as further modified for performance against the Performance Modifiers.
54 NOTE – As noted above, as part of the development of the Project Proposal and each relevant Proposal, the detailed Risk or Reward Regime will be developed. This will include the development of the matters set out in the paragraphs below (within parameters established during the procurement process) which will determine the manner in which performance against the Key Result Areas and Performance Modifiers will translate to adjustment of the Gainshare or Painshare (if any and as the case may be) under the Risk or Reward Regime.
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3.2 Key Result Areas
The Key Result Areas for each Section are set out in the Project Proposal and each relevant Proposal.
3.3 Performance against Key Result Areas
The Project Proposal and each relevant Proposal sets out for each of the Key Result Areas:
3.3.1 the key performance indicators;
3.3.2 the weightings;
3.3.3 what constitutes MCOS Performance, Stretch Performance and Poor Performance;
3.3.4 methodologies for measuring performance and calculating a performance score; and
3.3.5 the relationship between the performance score and the calculation of any modification to the Gainshare or Painshare (as the case may be).
3.4 Performance Modifiers
3.4.1 The Performance Modifiers for each Section are set out in the Project Proposal and relevant Proposal.
3.4.2 The Project Proposal and each relevant Proposal sets out for each Performance Modifier:
3.4.2.1 what constitutes a recordable event;
3.4.2.2 methodologies for recording these events; and
3.4.2.3 the relationship between the occurrence of these events and the calculation of any modification to the Gainshare or Painshare (as the case may be).
4. CALCULATION AND PAYMENT OF INTERIM GAINSHARE, GAINSHARE OR PAINSHARE
4.1 [Interim Gainshare or Painshare at the [Date of Final Completion]
As soon as practicable after the [Date of Final Completion]:
4.1.1 the ALT will calculate the Interim Gainshare or Painshare (if any and as the case may be) following determination of:
4.1.1.1 the sum of the outturn Actual Cost in performing the Works to reach the [Date of Final Completion]; and
4.1.1.2 the performance of the Participants against the Key Result Areas and the Performance Modifiers for the period from [Date of Works Commencement] until the [Date of Final Completion]; and
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4.1.2 subject to paragraph 1.3.1 and 1.3.3, the Owner will make a payment (if any) to the NOPs or the NOPs will make a payment (if any) to the Owner (as the case may be) in accordance with Schedule 14 (Payment Procedures).]55
4.2 Gainshare or Painshare at Project Final Completion
As soon as practicable after the Date of Project Final Completion:56
4.2.1 the ALT will calculate the Gainshare or Painshare (if any and as the case may be) following determination of:
4.2.1.1 the sum of the outturn Actual Cost in performing the Works to the Date of Project Final Completion; and
4.2.1.2 the performance of the participants against the Key Result Areas and the performance Modifiers for the period from the Commencement Date until the Date of Project Final Completion; and
4.2.2 subject to paragraph 1.3.1 and 1.3.3, the Owner will make a payment (if any) to the NOPs or the NOPs will make a payment (if any) to the Owner (as the case may be) in accordance with Schedule 14 (Payment Procedures).
5. GAINSHARE, PAINSHARE AND KEY RESULT AREAS ON TERMINATION OR EXCLUSION
5.1 Exclusion
On expulsion of a NOP under clause 36 and Schedule 19 (Exclusion and Termination, Gainshare, Painshare and Key Result Areas are determined in accordance with clause 36 and Schedule 19 (Exclusion and Termination).57
5.2 Default termination by the Owner
On default termination of this Agreement by the Owner under clause 37 and Schedule 19 (Exclusion and Termination), Gainshare, Painshare and Key Result Areas are determined as follows:
5.2.1 [set out how the incentivisation payments are determined on a default termination due to Default by a NOP and the consequential payments to be made].58
5.3 Default termination by any NOP
On default termination of this Agreement by any NOP under clause 37 and Schedule 19 (Exclusion and Termination), Gainshare, Painshare and Key Result Areas are determined as follows:
[set out how the incentivisation payments are determined on a default termination due to Default by the Owner Participant and the consequential payments to be made].59
55 NOTE – Depends on the Risk or Reward commercial model. This assume an interim release of Interim Gainshare (if any) at the conclusion of the final certificate for each Section. Alternatively, the Owner may determine prior to procurement of the Project that Interim Gainshare may be payable at earlier stages with ALT approval. 56 NOTE – Depends on the Risk or Reward commercial model, but final incentivisation payments must be made at the Date of Project Final Completion in any event. 57 NOTE – Schedule 19 may require amendment to reflect the actual Risk or Reward commercial model. 58 NOTE – Schedule 19 may require amendment to reflect the actual Risk or Reward commercial model. Note that loss of profit per se is not recoverable.
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59 NOTE: Schedule 13 may require amendment to reflect the actual Risk or Reward commercial model.
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SCHEDULE 14
PAYMENT PROCEDURES
1. INTRODUCTION
1.1 General principles for Reimbursable Cost
For each Section and Relevant Accounting Period and in the final payment for each Section, the Owner will pay each NOP amounts (if any) in respect of:
1.1.1 Actual Cost; and
1.1.2 Overhead and Profit,
as determined in accordance with Schedules 10 (Actual Cost) and 11 (Fee) and this Schedule 14 (Payment Procedures).
1.2 Calculation of aggregate amount due to each NOP
Payments due to or from the NOPs under this Agreement are to be determined by calculating for each Section:
1.2.1 the aggregate amount due to the NOPs from the Commencement Date to the relevant payment ascertainment date; and
1.2.2 deducting the aggregate of all previous payments due to the NOPs under this Agreement.
1.3 General principles for payments under Risk or Reward Regime
For each Relevant Accounting Period and in the final payment:
1.3.1 the Owner will pay each NOP its share (if any and as the case may be) of60:
1.3.1.1 [Gainshare]; and/or
1.3.1.2 [Painshare] previously deducted where and to the extent subsequent Painshare is reduced or extinguished; and/or
1.3.1.3 [Performance Reward Amount],
as determined in accordance with Schedule 13 (Risk or Reward Regime).
1.3.2 Each NOP will pay the Owner its share (if any and as the case may be) of61:
1.3.2.1 [Painshare], and any [Painshare] previously paid or payable by the Owner must be deducted from any subsequent Painshare; and/or
1.3.2.2 [Interim] Gainshare previously paid or payable by the Owner where and to the extent subsequent [Interim] Gainshare or Gainshare is reduced or extinguished; and/or
1.3.2.3 [Performance Liability Amount],
as determined in accordance with Schedule 13 (Risk or Reward Regime).
60 NOTE: Terminology depends on the Risk or Reward Regime commercial model 61 NOTE: Terminology depends on the Risk or Reward Regime commercial model
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2. APPLICATION FOR PAYMENT BY STATEMENTS
2.1 Submission for each Accounting Period
Each Participant must submit a statement (which is aligned to the Work Breakdown Structure) to the Alliance Manager for each Accounting Period and all Sections (each such statement being the “Statement” for the purposes of this Schedule 14 (Payment Procedures)) no earlier than the first day of the Accounting Period to which the Statement relates (the “Relevant Accounting Period”) provided that the first Statement is submitted no earlier than the Commencement Date and the first Accounting Period under this Agreement may consist of less than 4 weeks.
2.2 Agreed form of statement
On or as soon as possible after the Commencement Date, the ALT must agree a form of Statement for each NOP detailing the information referred to in paragraph 2.3 and which will enable ready identification of costs as design, engineering and other support services, site overheads, site labour, equipment, materials, insurance and payments to Subcontractors.
2.3 Contents of Statement
Each Statement submitted by a Participant must:
2.3.1 show separately the amounts due for each Section;
2.3.2 set out the Reimbursable Cost and other amounts due to or from all the Participants for all the Works performed by all the Participants up to the end of the Relevant Accounting Period for each Section; and
2.3.3 identify the amounts due to or from each Participant for each Section and the calculation of each such amount, together will all supporting information and verification as may be required by this Agreement.
2.4 Statement of amount due
Each Statement must set out for each NOP and each Section:
2.4.1 the cumulative estimated Actual Cost certified up to the end of the Accounting Period immediately prior to the Relevant Accounting Period;
2.4.2 any adjustment to the cumulative estimated Actual Cost previously certified up to the end of the Accounting Period immediately prior to the Relevant Accounting Period, including any adjustments required in accordance with this Agreement (and for the avoidance of doubt, the amount determined at this paragraph 2.4.2 may be a negative amount);
2.4.3 the estimated Actual Cost for the Relevant Accounting Period (being the period commencing on or immediately prior to the date of submission of the Statement);
2.4.4 the cumulative estimated Actual Cost up to the end of the Relevant Accounting Period, being the sum of the amounts determined at paragraphs 2.4.1 to 2.4.3;
2.4.5 the cumulative Fee due up to the end of the Relevant Accounting Period in accordance with Schedule 11 (Fee);
2.4.6 its share of62 [Gainshare], [Painshare], [Performance Reward Amount] or [Performance Liability Amount] 63 (if any) determined in accordance with
62 NOTE: Terminology depends on the Risk or Reward Regime commercial model
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Schedule 13 (Risk or Reward Regime) (and any [Painshare] and [Performance Liability Amount] 64 is treated as a negative amount); and
2.4.7 the net amount for the current Accounting Period (“Payment Period Amount”), being:
2.4.7.1 the total amount due in accordance with paragraphs 2.4.4 to 2.4.6 (and for the avoidance of doubt, this may be a negative amount);
2.4.7.2 the total of all other amounts due to the relevant NOP from the Owner in accordance with this Agreement; less
2.4.7.3 the aggregate of all previous payments paid or payable in respect of the relevant NOP; less
2.4.7.4 the total of all other amounts due to the Owner from the relevant NOP in accordance with this Agreement,
and if the amount determined in accordance with this paragraph 2.4.7 is a negative amount, the amount due under the relevant Statement is an amount from that NOP to the Owner.
2.5 Owner Participant’s Statement
2.5.1 The Owner Participant’s Statement must set out the costs referred to in paragraph 2.4.1 to 2.4.4 notionally incurred by it for each Section.
2.5.2 For the avoidance of doubt, the Owner Participant’s share of any [Gainshare] or [Painshare] is nil and the Owner Participant is not entitled to any Fee65.
3. PAYMENT PROCEDURE FOR INTERIM PAYMENTS
3.1 Establishing Bank Account
3.1.1 Within 5 Business Days of the Commencement Date, each NOP must notify the Owner in writing of its nominated bank account for payment by the Owner to each NOP under this Agreement (“Bank Account”).
3.1.2 Any NOP may change its Bank Account by notifying the Owner in writing of that NOP’s new nominated bank account for payments by the Owner to that NOP under this Agreement, provided that notice under this paragraph 3.1.2 is given by that NOP to the Owner at least 10 Business Days prior to the due date for payment under this Agreement.
3.2 Alliance Manager to certify
3.2.1 The Alliance Manager must certify the amount due for payment in accordance with paragraph 2.4.7 by:
3.2.1.1 the Owner to the relevant NOP; or
3.2.1.2 the relevant NOP to the Owner,
63 NOTE: Depends on the Risk or Reward Regime commercial model 64 NOTE: Depends on the Risk or Reward Regime commercial model 65 NOTE: Terminology depends on the Risk or Reward Regime commercial model
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and the basis on which that amount is calculated (“Payment Certificate”) by no later than 21 days after receipt by the Alliance Manager of the Statement submitted by the relevant Participant.
3.2.2 The Payment Certificate issued by the Alliance Manager must be issued to the Owner, the Owner Participant and to each NOP on the date of it is certified.
3.2.3 A Payment Certificate must be issued even if the Alliance Manager considers the amount due to be zero.
3.3 Payment notice for the purpose of the Construction Act
3.3.1 In respect of any Statement, the Payment Certificate for that Statement (or where paragraph 3.3.2 applies, that Statement itself) is a payment notice for the purposes of the Housing Grants Construction and Regeneration Act 1996 (as amended) and the amount stated as due therein is the notified sum for the purposes of that Act (“Notified Sum”).
3.3.2 In the absence of the issue of any Payment Certificate by the Alliance Manager by the relevant final date for payment for any Statement, the relevant Statement is deemed to be the Notified Sum.
3.4 Due Dates for payment
In respect of any Statement submitted by a NOP:
3.4.1 the due date for payment of each Statement (“Due Date for Payment”) is the date that is 21 days after receipt by the Alliance Manager of the relevant Statement;
3.4.2 the Owner must pay the sum certified by the Alliance Manager in the Payment Certificate (together with any VAT thereon) to the relevant NOP no later than the final date for payment which is the date that is 7 days after the Due Date for Payment (“Final Date for Payment”); and
3.4.3 where there is a sum due to the Owner from any NOP, that NOP must pay the sum due to the Owner no later than the final date for payment which is the date that is 7 days after the Due Date for Payment.
3.5 Pay Less Notice
In respect of any Statement submitted by a NOP, if the Owner wishes to pay that NOP less than the Notified Sum for that Statement, it notifies that NOP not later than 2 days before the Final Date for Payment for that Statement by stating the amount considered to be due and the basis on which that sum is calculated.
4. FINAL PAYMENT
4.1 Final submission by NOPs
For each Section, within 56 days of all the Participants’ having complied with all of their respective obligations relating to the Works, including all obligations arising during each Defects Correction Period, each NOP must each submit to the AMT (copied to the ALT) a statement of final account stating the final amounts due to or from it under this Agreement (if any and as the case may be) in respect of:
4.1.1 Actual Cost;
4.1.2 Overhead;
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4.1.3 Profit;
4.1.4 its share of any [Gainshare] or [Painshare] (but only where the relevant Section Final Certificate relates to the last Section to be so certified); 66
4.1.5 [its share of any [Performance Reward Amount] or [Performance Liability Amount] (but only where the relevant Section Final Certificate relates to the last Section to be so certified);] 67
4.1.6 any other amounts due to or from it under this Agreement; and
4.1.7 all payments received or made by that NOP.
4.2 Final submission by the Owner Participant
For each Section, within 56 days of all the Participants’ having complied with all of their respective obligations relating to the Works, including all obligations arising during the Defects Correction Period, the Owner Participant must submit to the AMT (copied to the ALT) a statement of final account stating the final amounts due to or from it under this Agreement (if any and as the case may be) in respect of Actual Cost.
4.3 AMT to prepare final account
4.3.1 For each Section, the AMT must calculate the Reimbursable Cost on the basis of the final statements provided by the Participants under paragraphs 4.1 and 4.2 and submit a consolidated statement of final account to the ALT copied to each Participant stating for each Participant all:
4.3.1.1 Reimbursable Cost;
4.3.1.2 payments due under the Risk or Reward Regime (if any) (but only where the relevant Section Final Certificate relates to the last Section to be so certified);
4.3.1.3 other payments due under this Agreement; and
4.3.1.4 all payments made to or from the relevant Participant.
4.3.2 For each Section, the AMT must prepare the draft Section Final Certificate in accordance with paragraph 4.5 and submit if for approval by the ALT and Alliance Auditor with the final account prepared under paragraph 4.3.1 for the Project.
4.4 Agreement of final account by ALT and Alliance Auditor
4.4.1 The ALT and the Alliance Auditor must consider each consolidated statement of final account and draft Section Final Certificate submitted by the AMT under paragraph 4.3 within 3 months.
4.4.2 The ALT and/or Alliance Auditor may request the AMT to provide further information and/or substantiation of any final account and draft Section Final Certificate submitted by the AMT under paragraph 4.3. The Alliance Auditor may provide comments to the ALT on each final account and draft Section Final Certificate.
66 NOTE: Terminology depends on the Risk or Reward Regime commercial model 67 NOTE: Depends on the Risk or Reward Regime commercial model
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4.4.3 Should the ALT disagree with any final account and/or draft Section Final Certificate submitted by the AMT under paragraph 4.3, it must promptly notify the Participants and AMT giving all the reasons for the failure to agree.
4.4.4 The ALT must ensure that the Participants promptly address the reasons for disagreement given by the ALT under paragraph 4.4.3 and when those reasons have been addressed, re-consider and seek to agree all matters relating to the relevant final account and draft Section Final Certificate.
4.4.5 The process in this paragraph 4.4 is repeated until each final account and draft Section Final Certificate is agreed by the ALT and the Alliance Auditor and the Alliance Manager is notified by the ALT of such agreement.
4.4.6 The AMT must endeavour to re-determine and resubmit each final account and draft Section Final Certificate in accordance with the ALT’s requirements within 10 Business Days (or such later date as is fair and reasonable having regard to any delay by the Participants) and in any case within such period to enable the Alliance Manager to issue a Section Final Certificate in accordance with paragraph 4.5.
4.5 Final Account and Section Final Certificate
4.5.1 For each Section, the Alliance Manager must issue a final payment certificate to reflect the final account and draft Section Final Certificate notified and agreed in accordance with paragraph 4.4 (“Section Final Certificate”).
4.5.2 For each Section, the Alliance Manager must issue the Section Final Certificate to the Owner and each Participant within
4.5.2.1 20 Business Days of the agreement of the Section Final Certificate by the ALT; or
4.5.2.2 3 months of the agreement by the ALT of the final account or the Participants having complied with all of their obligations relating to the Works, including all obligations arising during the Defects Correction Period (whichever is the later),
whichever is the later.
4.5.3 A Section Final Certificate must be issued even if the amount due is zero.
4.5.4 In each Section Final Certificate, the Alliance Manager must certify:
4.5.4.1 that all the Participants’ obligations relating to the Works have been properly completed in accordance with this Agreement; and
4.5.4.2 the Final Completion Date;
4.5.5 In each Section Final Certificate, the Alliance Manager must certify the following amounts for the relevant Section:
4.5.5.1 the Reimbursable Cost due to each NOP;
4.5.5.2 the Actual Cost incurred by the Owner Participant;
4.5.5.3 the amount paid by the Owner to each NOP prior to the date of the relevant Section Final Certificate (including its share of any Section Gainshare);
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4.5.5.4 the amount paid by each NOP to the Owner prior to the date of that Section Final Certificate (including its share of any Section Painshare);
4.5.5.5 the calculation of any [Gainshare] or [Painshare] under the Risk or Reward Regime and each NOP’s share thereof (but only where the relevant Section Final Certificate relates to the last Section to be so certified); 68
4.5.5.6 [the calculation of any [Performance Reward Amount] or [Performance Liability Amount] under the Risk or Reward Regime and each NOP’s share thereo (but only where the relevant Section Final Certificate relates to the last Section to be so certified);] 69
4.5.5.7 any other amounts due to each NOP from the Owner;
4.5.5.8 any other amounts due from each NOP to the Owner under this Agreement; and
4.5.5.9 the net amount which is finally due and payable to each NOP by the Owner or from each NOP to the Owner (as the case may be).
4.6 Final Payment
The Owner makes payment to each NOP and/or each NOP makes payment to the Owner (as the case may be) of any amount certified in each Section Final Certificate issued in accordance with paragraph 4.5.
4.7 Due date for final payment
4.7.1 The due date for any payment due under a Section Final Certificate is 3 months from the date of receipt by the ALT of a consolidated statement of final account in accordance with paragraph 4.1 and 4.2 and the information reasonably required for its verification (“Due Date for Final Payment”).
4.7.2 The Owner and/or each NOP (as the case may be) must make the payment certified in each Section Final Certificate within 7 days of the Due Date for Final Payment, which is the final date for payment of the final payment (“Final Date for Final Payment”).
4.8 Payment notice under the Construction Act
A Section Final Certificate given in accordance with paragraph 4.5 is a payment notice for the purpose of the Housing Grants Construction and Regeneration Act 1996 (as amended) and the amount certified is the Notified Sum.
4.9 Pay less notice for final payment
If either the Owner or any NOP intends to pay less than the Notified Sum in accordance with paragraph 4.8, it must notify the recipient not later than 2 days before the Final Date for Final Payment referred to in paragraph 4.7 by stating the amount considered to be due and the basis on which such sum is calculated.
5. OVERPAYMENTS AND UNDERPAYMENTS
5.1 Overpayment by the Owner
68 NOTE: Terminology depends on the Risk or Reward Regime commercial model 69 NOTE: Depends on the Risk or Reward Regime commercial model
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If the total payments made to any NOP is greater than that NOP’s entitlement to payment under this Agreement, the Owner may either:
5.1.1 deduct an amount equal to the excess from monies due or becoming due to the relevant NOP whether under this Agreement or otherwise; or
5.1.2 require the relevant NOP to reimburse the excess to the Owner.
5.2 Underpayment by the Owner
If the total payments made to any NOP is less than that NOP’s entitlement to payment under this Agreement, the relevant NOP may require the Owner to pay any shortfall to the relevant NOP.
5.3 Adjustment to payments to be made within 21 days
If the Owner or any NOP is required to make a payment under this paragraph 5, it must make that payment within 21 days of a request for payment being made.
5.4 Proceedings
The Owner or any NOP may take steps to recover any amount payable to them under this paragraph 5 which is not paid on time.
6. VALUE ADDED TAX
6.1 Target Price is exclusive of VAT
Each NOP is treated as not to have allowed in the Target Price for the tax payable by it as a taxable person to the Commissioners for her Majesty’s Revenue and Customs being tax chargeable on any taxable supplies to the Owner which are made under this Agreement.
6.2 Payment notices under Schedule 14 (Payment Procedures) to be exclusive of VAT
6.2.1 All Statements and other payment notices or claims under this Schedule 14 (Payment Procedures) must be exclusive of Value Added Tax.
6.2.2 When requesting or claiming payment under this Schedule 14 (Payment Procedures) each NOP must state how the work or supply in question is rated for the purposes of Value Added Tax, and show separately any relevant rates of Value Added Tax relating to the work or supplies.
6.3 Payment of VAT by the Owner
In addition to the payments due under this Schedule 14 (Payment Procedures), the Owner must separately identify and pay to each NOP any Value Added Tax properly chargeable by the Commissioners for Her Majesty’s Revenue and Customs on the supply to the Owner of any goods and/or services by that NOP under this Agreement.
6.4 VAT receipt
Each NOP must issue to the Owner, upon receipt of any amount paid by the Owner under this Agreement and any Value Added Tax properly paid under paragraph 6.3, an authenticated receipt of the kind referred to in Regulation 13(4) of the Value Added Tax Regulations 1995 (or any amendment or re-enactment thereof) containing the particulars required under Regulation 14(1) of such regulations to be contained in a VAT invoice.
6.5 VAT Rebate
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Where under this Agreement any rebate or repayment of any amount is payable by one Participant to another or to or from the Owner, and the payor is entitled as a matter of law or of Customs and Excise practice to issue a valid VAT credit note, such rebate or repayment must be paid together with an amount representing the VAT paid on that part of the consideration in respect of which the rebate or repayment is made and the payor must issue an appropriate VAT credit note to the payee.
6.6 Recovery of additional VAT from defaulting NOP
If a NOP fails to carry out its obligations under this Agreement and the Owner is entitled under this Agreement to employ a Third Party to fulfil them, and a payment of Value Added Tax is made or falls to be made to that Third Party, the Owner is entitled to recover from that NOP any Value Added Tax (which it is not otherwise able to recover) additional to what it would have paid had the NOP carried out its obligations under this Agreement.
6.7 VAT disputes
If any dispute arises between the Owner or any NOP and the Commissioner for Her Majesty’s Revenue and Custom in relation to any tax chargeable or alleged to be chargeable in connection with this Agreement or the Works, each shall render to the other such support and assistance as may be necessary to resolve the dispute.
7. CONSTRUCTION INDUSTRY SCHEME
7.1 Definition of Scheme
For the purposes of this paragraph 7, “Scheme” means the Construction Industry Scheme, as provided for in Chapter 3 of the Finance Act 2004 and the Income Tax (Construction Industry Scheme) Regulations 2005.
7.2 Provision of information by NOPs
Not later than 21 days before the first payment under this Agreement is due to a NOP, that NOP must provide to the Owner the information specified in regulation 6(2)(b)(iii) of the Income Tax (Construction Industry Scheme) Regulations 2005.
7.3 Each NOP to be registered for gross payment
Each NOP must ensure that at all times it is registered for gross payment under the Scheme.
7.4 Failure to comply
If a NOP fails to comply with the provisions of paragraph 7.2 or 7.3, the Owner is not obliged to make any further payment to that NOP until such time as the failure is remedied.
8. LATE PAYMENTS
8.1 Interest on late payments
Without prejudice to any other rights a NOP may have in respect of late payments due to it from the Owner or the Owner may have in respect of late payments due to it from any NOP under this Agreement (as the case may be), to the extent that any such amount due to the Owner or any NOP is not paid to that person in accordance with this Schedule 14 (Payment Procedures) by:
8.1.1 the Final Date for Payment of such amount under paragraph 3.4.2; or
8.1.2 the Final Date for Final Payment under paragraph 4.7.2,
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interest will accumulate on such unpaid amount at the Default Interest Rate until the date of payment by the Owner or the relevant NOP (as the case may be) in accordance with this Agreement and such interest is payable by the Owner to the relevant NOP or by the relevant NOP to the Owner (as the case may be) to that NOP as an amount due under this Agreement.
8.2 Suspension for Late Payment by the Owner
Where the Owner fails to make any payment due and payable to a NOP under this Agreement by the Final Date of Payment of such amount, that NOP may give 7 days’ written notice of its intention to suspend the execution of the Works or part thereof by it and such suspension will continue until payment in full is made. For the avoidance of doubt, any such suspension is not an Adjustment Event.
9. SET OFF
9.1 The Owner’s right of set off
Without prejudice to any other rights the Owner may have under this Agreement or at law, the Owner may on notice to any NOP set off any amount due to it from that NOP under this Agreement against any amount due by the Owner to that NOP under this Agreement.
9.2 No set off of amounts between NOPs
For the avoidance of doubt, the Owner is not entitled to set-off against any amount due to a NOP any amount for which another NOP is liable to the Owner.
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SCHEDULE 15
VESTING CERTIFICATE
This certificate is for the benefit of:
NETWORK RAIL INFRASTRUCTURE LIMITED whose registered office is at 2nd Floor, One Eversholt Street, London, NW1 2DN (“the Owner”),
and relates to the Materials and Contract described in the Schedule attached hereto.
We [insert name of NOP] of [insert registered address] being a NOP as defined in the Contract, in consideration of the Owner’s agreement to include in the next payment of Actual Cost under the Contract the sum of [amount] (£[amount]) in respect of the Materials, warrant and undertake to the Owner that:
1. the Materials are intended for incorporation in [describe] (the “Works”);
2. nothing remains to be done to the Materials to complete the same up to the point of their incorporation in the Works;
3. the Materials have been set apart and stored at the Premises described in the Schedule attached and have been clearly and visibly marked as follows:
“These materials are for use at [location]”;
4. property in the Materials (including but not limited to supplies received by us from a third party for incorporation in the Materials) is vested absolutely in us and the Materials are free from all encumbrances and charges and we are able to pass title in the Materials absolutely;
5. the Materials are in every respect in accordance with the requirements of the Contract;
6. the Materials shall at all times after the date of this Certificate until the Materials are delivered to and placed on or adjacent to the Works be insured for their full reinstatement value under a policy of insurance protecting the interests of the Owner and us against any loss or damage howsoever arising and we have provided to the Owner evidence of the existence of the said insurance policy;
7. the Materials can be inspected at any time upon reasonable notice by the Owner and/or any person authorised by the Owner to act on its behalf for this purpose; and
8. we shall not, except for use on the Works, remove or cause or permit the Materials to be moved or removed from the Premises named in the Schedule attached.
We declare that property in the Materials shall unconditionally vest in the Owner upon receipt of the interim payment referred to above.
Nothing contained in this Certificate or the Contract or any payment that may be made to us in respect of the Materials shall be taken as any approval by the Owner that the Materials are in accordance with the Contract.
A liability of a Non-Client Participant to the Owner under this Certificate to pay any amount (whether as sums due, damages or costs or otherwise) is to be treated as an obligation to pay a Painshare under the Contract at the date the liability arises under this Certificate, irrespective of which Non-Client Participant contracted with the supplier of the Materials.
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Each Non-Client Participant is liable to the Owner for the Painshare arising under this Certificate in proportion to its liability to the Owner for any Painshare due under the Contract (and where the Painshare contribution between the Non-Client Participants varies with the aggregate amount of the Painshare, the proportion is to be determined as at the date the liability arises under this Certificate taking into account Painshare for which the Non-Client Participants are already liable to pay or have paid (if any)).
Payment of its proportion of any Painshare arising under this Certificate by a Non-Client Participant is to be treated as full discharge of that Non-Client Participant’s liability under this Certificate in respect of the matter giving rise to that Painshare.
Dated: ......................................................
Signed by: ......................................................
on behalf of [insert name of NOP]
We [name of subcontractor] of [address] engaged under a subcontract dated [date] by [insert name of NOP] in consideration of the payment to us of £1 (one pound) by the Owner warrant that the statements made in provisions 1 to 7 above are true and correct and that all the actions referred to have been taken. 70
Dated: ......................................................
Signed by: ......................................................
on behalf of [subcontractor]
SCHEDULE
Contract:
Premises:
Materials:
70 NOTE – To be used if a subcontractor’s/supplier’s confirmation is also required.
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SCHEDULE 16
INSURANCE POLICIES
1. Insurance policies to be effected and maintained by the Owners and the Participants
1.1 The Owner and each Participant must take-out maintain and operate the insurances for the Project as required by the Owner’s Project Insurance Manual attached to this Schedule, as such manual may be updated from time to the by the Owner and notified to the Participants.
1.2 All references in the Project Insurance Manual to:
1.2.1 “Network Rail” are deemed to be reference to the Owner;
1.2.2 a “contractor” are deemed to be references to a Participant or NOP as the case may be; and
1.2.3 “works” or “services” and the like are deemed to be references to the Works, any Section or the Project as the case may be.
2. No requirement for professional indemnity insurance
Neither the Owner nor any Participant is required to take-out or maintain professional indemnity insurance for the purpose of this Agreement or the Project, and all references in the Project Insurance Manual to "professional indemnity insurance” are to be disregarded and are of no effect for the purpose of this Agreement and the Project.
3. Project Insurance Manual
The Owner’s Project Insurance Manual at the Commencement Date is attached below:
Project Insurance Manual 30 April 201 71
71 NOTE – latest Network Rail manual to be attached. Any deviation from this position must be approved by the Owner’s insurance and legal teams
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SCHEDULE 17
GUARANTORS
NOP Name of Guarantor Company Number Address of Registered Office
NOP 1
NOP 2
NOP 3
etc
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SCHEDULE 18
PARENT COMPANY GUARANTEE
NETWORK RAIL INFRASTRUCTURE LIMITED
PARENT COMPANY CONTRACT PERFORMANCE GUARANTEE
THIS DEED is made…………………………..day of…………………………………………………….
BETWEEN
(1) …………………………………………………………………………………………………………[(registered in ………..…………. as company number …………………………………………. and having its registered office at)] ……………………………………………………………….. OR [of] ………………………………………………………………………………………………..(“Guarantor” which term shall include its successors and assigns); and
(2) NETWORK RAIL INFRASTRUCTURE LIMITED (registered in England & Wales as company number 2904587) and having its registered office at 2nd Floor, One Eversholt Street, London, NW1 2DN (“Owner”, which term shall include its successors and assigns).
WHEREAS
By an Agreement (“Project Alliance Agreement”) dated …………………………………… and made between the Owner of the one part and ……………………………………………………………… (“NOP”) of the other part, the NOP has agreed to …………………………describe the supplies, services or works …………………………..…………………………………………………………… in accordance with the terms and conditions of the Project Alliance Agreement.
NOW THIS DEED WITNESSETH as follows:
1. Acknowledgement of Project Alliance Agreement
In consideration of the Owner entering into the Project Alliance Agreement with the NOP, as the Guarantor hereby acknowledges, the Guarantor enters into this Deed.
2. Guarantee of payment and due and punctual performance
The Guarantor hereby unconditionally and irrevocably guarantees to the Owner:
2.1 the due and punctual payment by the NOP of all sums payable under or pursuant to the Project Alliance Agreement to the Owner as and when the same fall due (with the intention that any amount not recoverable for any reason from the Guarantor under this Deed on the basis of a guarantee shall nevertheless be recoverable on the basis of an indemnity); and
2.2 the due and punctual performance and observance by the NOP of all other acts, covenants and obligations to be performed or observed by the NOP under or pursuant to the Project Alliance Agreement.
3. Guarantor’s indemnity
Subject to clause 5, the Guarantor hereby undertakes to keep the Owner full and effectually indemnified against all losses, damages, costs, claims and expenses whatsoever arising out of or in connection with any failure on the part of the NOP to effect due and punctual payment of any sum as aforesaid or to perform or observe all or any of the other acts,
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covenants and obligations as aforesaid for any reason whatsoever, including the administration, receivership, insolvency, bankruptcy, winding-up, liquidation, dissolution, reconstruction, re-organisation, amalgamation or incapacity of the NOP or the termination of the Project Alliance Agreement or the employment of the NOP under the Project Alliance Agreement.
4. Payment of indemnified sums on demand
Subject to clause 5, the Guarantor hereby undertakes to pay all sums covered by the indemnity at clause 3 the Owner’s first written demand without set-off or counterclaim and free and clear of, and without deduction for or on account of, any present or future taxes, duties, charges, fees, deductions or withholdings of any nature whatsoever.
5. Extent of Guarantor’s Liability under this Deed
The Guarantor’s liability under or pursuant to this Deed shall not exceed the NOP’s liability under or pursuant to the Project Alliance Agreement and the Guarantor shall be entitled in relation to any written demand by the Owner and in any actions or proceedings by the Owner to raise any equivalent rights in defence of liability as the NOP would have against the Owner under the Project Alliance Agreement.
6. Discharge of Guarantor’s obligations
The obligations of the Guarantor under or pursuant to this Deed shall not be discharged except by performance or the procurement of performance by the Guarantor.
7. No requirement for the Owner to take any steps or action
The obligations of the Guarantor under this Deed shall not be subject to the Owner taking any steps or action, including, without limitation:
7.1 the granting of any time or indulgence to the NOP;
7.2 the taking of any legal proceedings or action;
7.3 the obtaining of any judgment against the NOP;
7.4 the making or filing of any claim in bankruptcy, liquidation, winding-up or dissolution of the NOP; or
7.5 the pursuance or exhaustion of any other right or remedy against the NOP.
8. Rights and obligations under this Deed not prejudiced or effected other matters
The rights of the Owner and the obligations of the Guarantor under or pursuant to this Deed shall not be prejudiced or affected by:
8.1 any extension of time, indulgence, forbearance or concession given to the NOP;
8.2 any assertion of or failure to assert any right or remedy against the NOP;
8.3 any modification or variation of the provisions of the Project Alliance Agreement;
8.4 the administration, receivership, insolvency, bankruptcy, winding-up, liquidation, dissolution, reconstruction, re-organisation, amalgamation or incapacity of the NOP;
8.5 any change in the status, function, control or ownership of the NOP;
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8.6 the Owner holding or taking any other or further guarantees or securities or by the invalidity of any such guarantees or securities;
8.7 the Owner varying, releasing, exchanging, enforcing or omitting or neglecting to enforce any such guarantees or securities; or
8.8 any other thing which might otherwise wholly or partially discharge the Guarantor from its obligations under this Deed.
9. Continuing guarantee and indemnity
The guarantee and indemnity contained in this Deed shall be a continuing guarantee and indemnity and shall remain in full force and effect until all monies payable to the Owner by the NOP under or pursuant to the Project Alliance Agreement shall have been duly paid and all the NOP’s obligations under or pursuant to the Project Alliance Agreement shall have been duly performed.
10. Avoidance on subsequent insolvency
If any payment received by the Owner pursuant to the provisions of this Deed or the Project Alliance Agreement shall on the subsequent insolvency of the NOP or of the Guarantor be avoided under any laws relating to insolvency, such payment shall not be considered as having discharged or diminished the liability of the Guarantor hereunder; and the liability of the Guarantor hereunder shall continue to apply as if such payment had at all times remained owing by the NOP and the Guarantor shall indemnify the Owner in respect thereof.
11. Governing Law
This Deed shall be governed by English law.
IN WITNESS whereof the Guarantor has executed and delivered this Deed on the date first stated above:
THE COMMON SEAL of
was affixed to this DEED in the presence of the following persons who have signed this DEED for and on behalf in the capacities herein after stated
Director
Director/Company Secretary
OR
SIGNED as a DEED for and on behalf of ……………………………by:
Director
Director/Company Secretary
* Delete as appropriate
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SCHEDULE 19
EXCLUSION AND TERMINATION72
1. EXCLUSION OF A DEFAULTING PARTICIPANT
1.1 Exclusion Notice
1.1.1 Without prejudice to paragraph 2.1.2, where the Owner has served a Default Notice in respect of any Default by a NOP; and either:
1.1.1.1 that Default has not been rectified in accordance with clause 34.3.1; or
1.1.1.2 clause 34.3.2 applies,
without prejudice to its rights under this Agreement or otherwise, the Owner may by notice to the Defaulting Participant and the other NOPs exclude the Defaulting Participant from further participation in the performance of the Works (“Excluded NOP”).
1.1.2 For the avoidance of doubt, where paragraph 2.1.2 applies the Owner:
1.1.2.1 is not entitled to serve an Exclusion Notice; and
1.1.2.2 may serve a Termination Notice under paragraph 2.1.1.
1.1.3 Any notice given under paragraph 1.1.1 must specify that it is an Exclusion Notice.
1.2 Rights and obligations of the Excluded NOP
1.2.1 Except for any rights or obligations under this paragraph 1.2, an Excluded NOP will no longer be subject to any obligation under this Agreement the time for performance of which has not accrued prior to the date of the relevant Exclusion Notice and clause 37 applies in respect of an Excluded NOP as if this Agreement had been terminated.
1.2.2 Upon the date of the relevant Exclusion Notice an Excluded NOP will lose all rights of representation, participation and attendance at any meeting of the AMT or ALT and any right for a representative of it to remain as the Alliance Manager and any such body may elect to conduct all or part of its business on the basis that it is not disclosable to that Excluded NOP save to the extent otherwise required by law.
1.2.3 An Excluded NOP will continue to be and will remain liable in respect of its acts or omissions under this Agreement prior the date of the relevant Exclusion Notice.
1.2.4 An Excluded NOP will continue to be subject to the requirements of this Agreement in relation to Reimbursable Cost already incurred and will be entitled to be paid by the Owner its Reimbursable Cost incurred prior to the date of the relevant Exclusion Notice.
1.2.5 If and to the extent required by the non-defaulting Participants, an Excluded NOP will promptly assign or novate to the non-defaulting Participants, without
72 NOTE – Depends on Risk or Reward commercial model. To be reviewed on a project by project basis.
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payment, the benefit of any agreements for the delivery of the whole or any part of the Works at the date of the relevant Exclusion Notice.
1.2.6 If and to the extent required by the non-defaulting Participants (and not before), an Excluded NOP will remove from the Site any Construction Plant and other property provided by that Excluded NOP. If that Excluded NOP fails to do so not less than 15 Business Days after notice to it of the non-defaulting Participants’ intention to do so (but without being responsible for any loss or damage), the non-defaulting Participants may remove and/or sell any such Construction Plant or other property.
1.2.7 An Excluded NOP must execute all documents and do all things necessary to give effect to this paragraph 1.2 and paragraph 1.3.1.
1.2.8 Notwithstanding clauses 6.2, 6.3, but subject to clause 41, each other Party may recover from an Excluded NOP following service of the relevant Exclusion Notice any and all losses, damages, costs and expenses suffered by it arising out of:
1.2.8.1 the relevant Default;
1.2.8.2 any neglect, default or non-performance by the Excluded NOP under this Agreement prior to the date of the relevant Exclusion Notice;
1.2.8.3 any breach of this paragraph 1.2 or paragraph 1.3 by that Excluded NOP after the date of the relevant Exclusion Notice; and/or
1.2.8.4 any increased Painshare and/or reduced Gainshare in relation to all Sections and Section Elements for which a Proposal Approval Notice has been issued at the date of the relevant Exclusion Notice caused by:
(a) the exclusion of that Excluded NOP; or
(b) any failure to appoint or delay in appointing a Replacement NOP (and it is the ALT’s and Owner’s sole discretion as to whether a Replacement NOP should be sought following an exclusion), providing the Parties have acted in accordance with this Agreement in seeking to appoint such a replacement,
(but not, for the avoidance of doubt, arising from the performance of the Works by any Participant or any Replacement NOP after the date of the relevant Exclusion Notice).
1.3 Rights and obligations of the non-defaulting Participants following an exclusion
1.3.1 Save for any rights or obligations under this paragraph 1, following an Exclusion Notice the obligations of the non-defaulting Participants under this Agreement are not affected or discharged by that Exclusion Notice and the non-defaulting NOPs acknowledge and agree that they remain liable under this Agreement notwithstanding the discharge of the relevant Excluded NOP under paragraph 1.2.1.
1.3.2 The non-defaulting Participants may employ and pay other persons to replace the Exclude NOP in the performance of the Works and may use all Construction Plant provided by the Excluded NOP as necessary to perform the Works.
1.3.3 The non-defaulting Participants must execute all documents and do all such things on behalf of an Excluded NOP, including making decisions on behalf of
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the Excluded NOP’s representatives at the ALT, as are necessary to give effect to this paragraph 1.
1.3.4 Subject to paragraph 1.6, if agreed by the ALT a Replacement NOP may be appointed by the Owner to replace an Excluded NOP.
1.3.5 For the purpose of paragraph 1.3.6 only, the Owner Participant may attend and make representations, but is not entitled to vote at the relevant ALT meeting.
1.3.6 Following any exclusion under this paragraph 1, as soon as the Owner is aware that it is unable to procure a Replacement NOP in accordance with paragraph 1.6 the Owner must promptly notify the ALT of such inability, and the ALT may then on such notice from the Owner decide:
1.3.6.1 to proceed with the Works without a Replacement NOP; or
1.3.6.2 require that this Agreement is terminated for default under paragraph 2, and for this purpose the Owner must on receipt of such notice from the ALT promptly serve a notice under paragraph 2.1.1, and the Excluded NOP is deemed to be the Defaulting Participant for the purpose of paragraph 2.
1.4 No adjustment of the Fee or Target Price following an exclusion
There is no adjustment to the Target Price arising from the exclusion of an Excluded NOP or the service of an Exclusion Notice.
1.5 Payment of Actual Cost due to an exclusion
Additional costs reasonably and actually incurred by the Participants following an Exclusion Notice, including additional amounts:
1.5.1 payable to the Participants;
1.5.2 payable to any Subcontractor;
1.5.3 arising from the appointment of additional Subcontractors; and/or
1.5.4 arising from the appointment of a Replacement NOP,
are payable as Actual Cost in accordance with this Agreement, save to the extent such are amounts which are to be covered by or included as part of the Fee.
1.6 Appointment of replacement NOP following an expulsion
1.6.1 Following an Exclusion Notice the ALT may seek the Owner’s approval to the appointment of one or more additional NOPs to replace the Excluded NOP (“Replacement NOP”).
1.6.2 The Owner must act reasonably in considering the approval of a proposed Replacement NOP pursuant to paragraph 1.6.1. A reason for not approving or delaying the approval of any replacement NOP is a requirement for the Owner to comply with procurement law or any regulatory requirement, and any such approval may be immediate or subject to a competitive procurement process. The Owner does not warrant it will be able to procure a Replacement NOP.
1.6.3 All costs incurred by the Participants in connection with the appointment of any Replacement NOP or approval thereof are recoverable as Actual Cost including costs of the Owner Participant.
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1.6.4 Any costs reasonably and actually incurred by the Owner in accordance with this paragraph 1.6.2 are deemed to be recoverable as Actual Cost by the Owner Participant.
1.6.5 For the avoidance of doubt, a failure or delay in appointing a Replacement NOP for any reason (including any act or omission of the Owner) does not relieve any NOP from its liabilities or obligations under this Agreement.
1.6.6 The ALT may withdraw a request for approval of a proposed Replacement NOP pursuant to paragraph 1.6.1 at any time by notice to the Owner.
Unless the Owner and the non-defaulting NOPs agree otherwise (and this Agreement, including the Risk or Reward Regime, is amended to reflect such Agreement), and subject to approval by the Owner under paragraph 1.6.2 and any Replacement NOP must be appointed on the same terms as (and as a new party) to this Agreement without adjustment of the Target Price.
2. TERMINATION FOR DEFAULT
2.1 Termination by the Owner following a Default Notice
2.1.1 Subject to paragraph 2.1.2, where the Owner has served a Default Notice in respect of any Default by a NOP and either:
2.1.1.1 that Default has not been rectified in accordance with clause 34.3.1; or
2.1.1.2 clause 34.3.2 applies,
without prejudice to its rights under this Agreement or otherwise, the Owner may by notice to all Defaulting Participants and the other NOPs (if any) terminate this Agreement.
2.1.2 Paragraph 2.1.1 applies only where:
2.1.2.1 only one NOP is party to this Agreement;
2.1.2.2 all NOPs are Defaulting Participants;
2.1.2.3 paragraph 1.3.6.2 applies; [or
2.1.2.4 [a NOP has][no more than [insert number] NOPs have] previously been excluded from this Agreement pursuant to paragraph 1.1.1] 73,
and, for the avoidance of doubt, where this paragraph 2.1.2 does not apply the Owner is not entitled to serve a Termination Notice, but may serve an Exclusion Notice under paragraph 1.1.1.
2.1.3 A notice given under paragraph 2.1.1 must specify that it is a Termination Notice
2.2 Termination by a NOP following a Default Notice
2.2.1 Where any NOP has served a Default Notice in respect of a Default by the Owner Participant or the Owner and either that Default has not been rectified in accordance with clause 34.5.1 or clauses 34.4 or 34.5.2 applies, without
73 NOTE – Depends on Risk or Reward commercial model. The Parties may agree that any exclusion is not practical. For larger Alliances, it may be possible to exclude 2 or more NOPs and still continue.
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prejudice to its rights under this Agreement or otherwise, that NOP may by notice to the Owner and the other NOPs terminate this Agreement.
2.2.2 A notice given under paragraph 2.2.1 must specify that it is a Termination Notice.
2.3 Liability on termination for Default
Notwithstanding clauses 6.2 and 6.3, but subject to clauses 38 and 41.2, if:
2.3.1 the Owner elects to terminate this Agreement under paragraph 2.1.1;or
2.3.2 a NOP elects to terminate this Agreement under paragraph 2.2.1,
the terminating Party and any non-defaulting Participants may recover from any Defaulting Participant or the Owner (including where the Owner Participant is the Defaulting Participant) any and all losses, damages, costs and expenses suffered by it arising out of (without double counting):
2.3.3 the relevant Default;
2.3.4 any neglect, default or non-performance by the Defaulting Participant under this Agreement prior to the date of the relevant Termination Notice;
2.3.5 any breach of clause 37 by that Defaulting Participant after the date of the relevant Termination Notice;
2.3.6 the estimated outturn loss of Gainshare and/or increased Painshare of the Owner and any NOP caused by the termination (estimated at the date of termination and based on all the circumstances existing at the date of termination) less any interim Gainshare or Painshare paid or payable on or before the date of termination; and/or
2.3.7 the estimated additional costs to the Owner of completing the Works caused by the termination (estimated at the date of termination and based on all the circumstances existing at the date of termination), notwithstanding that on or following such termination the Owner may elect not to complete the Works.
and, for the avoidance of doubt, on any termination (including where the Owner is in Default or the Owner Participant is the Defaulting Participant), the Owner is not liable to any NOP for any loss of profit in relation to the parts of the Project which are not completed at the date of such termination whether or not such parts are never completed by the Owner or are completed by others and clause 41.2 does not limit recovery under paragraph 2.3.6 or 2.3.7.
3. TERMINATION AT WILL
3.1 Termination payments
Subject to the Owner’s rights under or in connection with this Agreement, if this Agreement is terminated in accordance with clause 35:
3.1.1 the Owner must pay the NOP; or
3.1.2 the NOPs must pay the Owner,
(as the case may be), an amount determined in accordance with this paragraph 3.
3.2 Matters to be taken into account in determining the payment due
The amount payable under this paragraph 3 is the aggregate of the:
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3.2.1 Reimbursable Costs payable in accordance with clause 30 and Schedule 14 (Payment Procedures) for the Works which were performed prior to the date of termination and which have not been paid at the date of termination;
3.2.2 the estimated outturn loss of Gainshare and/or increased Painshare of the Owner and any NOP caused by the termination (estimated at the date of termination and based on all the circumstances existing at the date of termination) less any interim Gainshare or Painshare paid or payable on or before the date of termination (and clause 41.2 does not limit recovery under this paragraph 3.2.2);
3.2.3 the cost of Materials reasonably ordered by the NOPs for the Works, which the NOPs are legally liable to accept, but only if the Materials become the property of the Owner upon payment;
3.2.4 costs reasonably and actually incurred by the NOPs in the expectation of completing the whole of the Works, including any costs or damages incurred by reason of any of the NOPs having to terminate contractual arrangements with a Subcontractor that was entered into in accordance with this Agreement for the purposes of the Works, providing any such costs and damages not having been accounted for in any payment by the Owner (including any payment to be made by the Owner under a new agreement pursuant to paragraph 3.2.7);
3.2.5 the NOP’s reasonable costs of demobilisation;
3.2.6 the reasonable costs of the NOP’s complying with any directions given by the Owner upon, or subsequent to, termination;
3.2.7 if any of the NOPs agree to continue with the Works for any Project as contemplated by clause 37.3, the extent to which Materials, orders made and other matters the subject of the costs outlined in this paragraph 3.2 can be used in any new agreement entered into between those NOPs for the continuation of those Works; and
3.2.8 all other amounts payable under this Agreement at the date of termination from the Owner to any NOP or from any NOP to the Owner at the date of termination.
3.3 The Owner’s sole rights on termination
3.3.1 Any payment due to a NOP under this paragraph 3 is the Owner’s only liability to that NOP in relation to or in connection with a termination under clause 35.
3.3.2 Notwithstanding any other provision in this Agreement, save for any payments due under this paragraph 3, the Owner is not liable to the NOPs for any cost, loss (including Consequential Loss), expense or damage incurred by the NOPs as a consequence of, or in connection with, this Agreement, the Works, or the termination.
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SCHEDULE 20
TUPE
1. Application of this TUPE schedule
1.1 TUPE provisions prevail over no claims clause
The following provisions apply and take precedence notwithstanding anything to the contrary elsewhere in the Agreement including clause 6.2 or 6.3.
1.2 Acknowledgment that TUPE is not intended to apply
The Parties do not consider that TUPE will apply upon:
1.2.1 the commencement or whole or partial termination or expiry of this Agreement;
1.2.2 the date on which any NOP or its Affiliated Undertakings or Subcontractors begin performing part of the Works;
1.2.3 the addition of any Replacement NOP pursuant to Schedule 19 (Exclusion and Termination);
1.2.4 any expulsion of a NOP under paragraph 1.1.1 of Schedule 19 (Exclusion and Termination);
1.2.5 the award by the Owner of any work or services which might have been awarded to the NOPs under this Agreement as part of the Works to a Replacement Contractor; or
1.2.6 the Owner completing the Works on its own behalf.
2. Warranties in respect of TUPE
2.1 Owner warranty of no transfer at commencement
The Owner warrants to the NOPs that no contracts of employment or any collective agreements applicable to any employee, worker or other personnel of the Owner or any service provider, contractor or subcontractor of the Owner which is providing enabling works (including Implementation Works) immediately prior to the commencement of the Works will transfer to the NOPs, their Affiliated Undertakings or Subcontractors under TUPE:
2.1.1 as a consequence of the NOPs or any of their Affiliated Undertakings and Subcontractors commencing the Works (or any of them) or otherwise due to this Agreement; or
2.1.2 upon the date on which any NOP or its Affiliated Undertakings or Subcontractors begin performing part of the Works.
2.2 Each Party’s warranty of no transfer in respect of any other Party undertaking the Works
Each Party warrants to the other Parties that no contracts of employment or any collective agreements applicable to any employee of that Party or any of that Party’s Affiliated Undertakings or Subcontractors will transfer to another Party or that Party’s Affiliated Undertakings or Subcontractors under TUPE:
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2.2.1 as a consequence of any Party undertaking the Works or otherwise due to this Agreement;
2.2.2 upon the Commencement Date;
2.2.3 upon the date on which any NOP or its Affiliated Undertakings or Subcontractors begin performing part of the Works;
2.2.4 upon the addition of any Replacement NOP pursuant to Schedule 19 (Exclusion and Termination);
2.2.5 upon the completion of all works and services required to be performed under this Agreement;
2.2.6 upon the issue of the Section Final Certificate;
2.2.7 upon the whole or partial termination or expiry of this Agreement;
2.2.8 upon the expulsion or termination of a NOP under paragraph 1 or 2 of Schedule 19 (Exclusion and Termination); or
2.2.9 upon the award by the Owner of any work or services which might have been awarded to any NOP under this Agreement as part of the Works to a Replacement Contractor.
2.3 Each NOP’s warranty of no transfer to a Replacement Contractor
Each NOP warrants to any Replacement Contractor that no contracts of employment or any collective agreements applicable to any employee of that NOP or any of that NOP’s Affiliated Undertakings or Subcontractors will transfer to the Replacement Contractor or its Affiliated Undertakings or subcontractors under TUPE:
2.3.1 upon the Commencement Date;
2.3.2 upon the date on which any NOP or its Affiliated Undertakings or Subcontractors begin performing part of the Works;
2.3.3 upon the addition of any Replacement NOP pursuant to Schedule 19 (Exclusion and Termination);
2.3.4 upon the completion of all works and services required to be performed under this Agreement;
2.3.5 upon the issue of the Section Final Certificate;
2.3.6 upon the whole or partial termination or expiry of this Agreement;
2.3.7 upon the expulsion or termination of a NOP under paragraph 1 or 2 of Schedule 19 (Exclusion and Termination); or
2.3.8 upon the award by the Owner of any work or services which might have been awarded to any NOP under this Agreement as part of the Works to a Replacement Contractor
3. Mutual TUPE indemnities
3.1 Indemnities in relation to matters prior to transfer
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Each Party will indemnify the other Parties and those Parties’ Affiliated Undertakings and Subcontractors, and each NOP will indemnify any Replacement Contractor and its Affiliated Undertakings and subcontractors against all Losses that they incur directly or indirectly in connection with or arising out of any act or omission or default by or on behalf of that Party or NOP (as applicable) and its Affiliated Undertakings and Subcontractors in respect of any person who is or was employed or engaged by any of them, including their termination of any such person’s employment or engagement and any failure to comply with their obligations under TUPE (except where such act or omission or default arises out of a failure by the other Party to comply with its obligations under TUPE).
3.2 Notice and procedure upon an intended transfer
If, notwithstanding paragraphs 2.2 and 2.3:
3.2.1 any person (an “Unexpected Person”) employed or engaged by one Party (an “Indemnifying Party”) or its Affiliated Undertakings or Subcontractors claims that their employment has transferred to another Party or its Affiliated Undertakings or Subcontractors (each an “Indemnified Party”) pursuant to TUPE; or
3.2.2 any person (also an “Unexpected Person”) employed or engaged by a NOP (also an “Indemnifying Party”) or its Affiliated Undertakings or Subcontractors claims that their employment has transferred to any Replacement Contractor or its Affiliated Undertakings or subcontractors (each also an “Indemnified Party”) pursuant to TUPE,
the following shall apply:
3.2.3 the relevant Indemnified Party must notify the relevant Indemnifying Party within 28 days of becoming aware of such claim (the “Notification”);
3.2.4 within 28 days of the Notification, the relevant Indemnifying Party or its Affiliated Undertaking or Subcontractor (as applicable) may either offer employment to that person, or take, at its own cost, such other steps as it considers necessary to effect a written withdrawal of that person’s claim;
3.2.5 if the relevant Indemnifying Party or its Affiliated Undertaking or Subcontractor (as applicable) offers employment to that person and that offer of employment is accepted, the relevant Indemnified Party must immediately release that person from his or her employment; and
3.2.6 if the relevant Indemnifying Party or its Affiliated Undertaking or Subcontractor (as applicable) makes no offer or offers employment to that person and that offer of employment is not accepted within 56 days of the Notification, or if that person fails to withdraw his or her claim within 56 days of the Notification, the relevant Indemnified Party may give notice to terminate the employment of that person within 21 days of the expiry of the 56 day period from the Notification (the final day of that 21 day period being the “Termination Option Date”).
3.3 Indemnity upon unintended transfer
The relevant Indemnifying Party shall indemnify and keep indemnified the relevant Indemnified Party against all Losses that the relevant Indemnified Party incurs directly or indirectly in connection with or arising out of:
3.3.1 the relevant Indemnified Party’s employment or alleged employment of any Unexpected Person until the Termination Option Date and the termination of employment of any Unexpected Person on or before the Termination Option Date; and
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3.3.2 any Employment Costs in respect of any Unexpected Person incurred in respect of the period up to and including the Termination Option Date; and
3.3.3 the time the Unexpected Person was employed by the relevant Indemnifying Party or its Affiliated Undertakings or Subcontractors (as applicable); and
3.3.4 acts or omissions of the relevant Indemnifying Party or its Affiliated Undertakings or Subcontractors during any period when the Unexpected Person is or is alleged to be employed by the relevant Indemnified Party.
4. Enforcement and liability
4.1 Enforcement of third party rights
Notwithstanding clause 47.17, the Parties agree that each Party’s Affiliated Undertakings and Subcontractors and any Replacement Contractors and their Affiliated Undertakings and subcontractors may enforce any term of this Schedule 20 which expressly or impliedly confers a benefit or an entitlement on that person against the relevant Party in accordance with the provisions of the Contracts (Rights of Third Parties) Act 1999.
4.2 Several liability
The liability of the each Party to any other Party under this Schedule 20 is several only.
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