NAWSARH Project

Norwegian All Weather Search and Rescue Helicopters (NAWSARH)

CONTRACT FOR DELIVERY OF SAR HELICOPTERS AND TRAINING AND SUPPORT SERVICES ANNEX 6 SERVICE LEVEL AGREEMENT

11-July-2012

Annex 6

Service Level Agreement

Table of Contents
1. 1.1 1.2 1.3 2. 2.1 2.1.1 2.1.2 2.2 2.3 3. 3.1 3.2 3.3 3.4 4. 4.1 4.2 4.3 5. 5.1 5.2 5.3 5.4 5.5 6. 7. INTRODUCTION................................................................................................................................... 4 BACKGROUND.......................................................................................................................................... 4 AVAILABILITY INDICATORS AND KEY PERFORMANCE INDICATORS AND INSTRUCTIONS FOR COMPLETING THE SLA ............................................................................................................................. 4 SAR HELICOPTER STATES........................................................................................................................ 6 AVAILABILITY REQUIREMENTS ..................................................................................................... 9 THE DUTY HELICOPTER ........................................................................................................................... 9 Helicopter Availability ...................................................................................................................... 9 Helicopter Availability ...................................................................................................................... 9 THE BACKUP HELICOPTER ....................................................................................................................... 9 THE RESERVE HELICOPTER ...................................................................................................................... 9 AVAILABILITY AND KEY PERFORMANCE INDICATORS (KPI) - REWARDS AND PENALTIES ......................................................................................................................................... 10 AVAILABILITY INDICATORS ................................................................................................................... 10 KPI 1 - LOGISTICS EFFICIENCY............................................................................................................... 11 KPI 2 - RELIABILITY AND MAINTAINABILITY ......................................................................................... 12 EARNBACK............................................................................................................................................. 12 REPORTING AND AUDIT ................................................................................................................. 13 SERVICE LEVEL REPORTS ...................................................................................................................... 13 AUDITS .................................................................................................................................................. 14 SERVICE LEVEL MEETINGS ..................................................................................................................... 14 THIRD PARTY BENCHMARKING OF MINISTRY MAN HOURS ................................................ 14 GENERAL ............................................................................................................................................... 14 APPOINTING THE THIRD PARTY AND SCOPE OF THE BENCHMARK ........................................................... 14 CONDUCTING THE BENCHMARK ............................................................................................................. 15 THE BENCHMARK RESULT ...................................................................................................................... 15 COSTS .................................................................................................................................................... 15 PAYMENT OF REWARDS, PENALTIES AND EARN BACK ........................................................ 15 NUMBER OF HELICOPTERS ............................................................................................................ 15

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List of Tables
Table 1 SAR Helicopter states............................................................................................... 8 Table 2 Availability indicators ............................................................................................ 11 Table 3 KPI 1 Logistics efficiency ................................................................................... 12 Table 4 KPI 2 Reliability and maintainability .................................................................. 12

Table of Figures
Figure 1 Performance analyses as means of continuous improvement ................................. 6 Figure 2 SAR Helicopter states ............................................................................................. 8

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1. INTRODUCTION 1.1 BACKGROUND This Service Level Agreement (SLA) provides the incentive mechanisms intended to ensure optimum performance of the SAR Helicopter over time. Furthermore, the objective is to encourage cooperation and collective ownership of challenges that may affect the emergency response preparedness (Preparedness) of the SAR Helicopter Service. Availability of SAR Helicopters at each of the six SAR Operating Bases at any given time is an essential prerequisite to ensure Preparedness. The overall goal is to achieve and sustain 100% Preparedness at each of the Bases, with margins to ensure robustness in the event of unforeseen circumstances. Good individual Helicopter availability together with effective interventions to avoid aircraft-on-ground (AOG) situations are both key elements in achieving this goal. The RNoAF has managed to sustain high levels of preparedness with the twelve Sea King helicopters. Historically, the average preparedness has exceeded 99%. One of the requirements of the acquisition programme is to maintain at least this level. The way to achieve this goal is described below. In addition to a reliable SAR Helicopter, personnel professionalism and a flexible and comprehensive support infrastructure is needed to prepare and support all aspects of the SAR Helicopters, from competence training, technical advice and decision support, through material and logistics support etc. As described in the Statement of Operating Intent and the Statement of Support Intent, the Ministry will maintain focus on the front-line activities, whilst the Provider will be responsible for providing the comprehensive support necessary to enable a successful operation of the SAR Helicopter. This recognises that the Provider, together with their Subcontractors, know best the support requirements for their particular helicopter type. The Ministry will ensure that work for which they are responsible, is carried out by adequately qualified personnel trained according to the Providers training programme, cf. Annex 2C, and otherwise with normal efficiency and quality of workmanship. This division of responsibilities enables the Parties to add greatest value at minimum risk for each. The success of the introduction and operation of the SAR Helicopter will be dependent upon the ability of both Parties to cooperate and to work as one team towards a common goal. At the same time it is essential that the cooperation is based on a clear division of responsibilities and measurable performance. This SLA reflects this strategy by associating incentives, i.e. reward and/or penalties, to appropriate Availability indicators and key performance indicators (KPIs). 1.2 AVAILABILITY INDICATORS AND KEY PERFORMANCE INDICATORS AND INSTRUCTIONS FOR COMPLETING THE SLA Availability indicators and KPIs are agreed for selected elements that are considered essential to avoid eroding the margins of Availability. For this purpose this Annex 6 establishes the Availability indicators and KPIs. Furthermore the Ministry has provided a set of measurement and reporting requirements, as well as the positive and negative consequences of achieving the goals or failing to meet the Availability indicators and/or KPIs. The Ministry will acquire up to a maximum of 16 SAR Helicopters, taking account of:

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SAR Helicopters on Bases: 12 SAR Helicopters (6 Bases x 2 SAR Helicopters) National reserve helicopters: up to 4 SAR Helicopters, of which: o Tentatively 2 SAR Helicopters to address scheduled and unscheduled maintenance requirements and Aircraft On Ground situations at the Bases considering geographical constraints. Tentatively 1 SAR Helicopter to take account of heavy maintenance and modification programmes. 1 SAR Helicopter as a replacement SAR Helicopter to safeguard against incidents or accidents.

o o

Bidder is requested to calculate the number of SAR Helicopters required to ensure that the SLA targets are achieved giving consideration to the above tentative analysis and substantiating any deviations therefrom. The SLA targets must be achieved also in the event of the number of available SAR Helicopters being reduced as a consequence of heavy maintenance or accidents. For the avoidance of doubt, the following absolute requirements apply: Maximum 16 SAR Helicopters. Minimum 2 SAR Helicopters per Base (a total of 12 SAR Helicopters on Bases) at any given time through life. 1 replacement SAR Helicopter. Additionally 1-3 SAR Helicopters to account for scheduled and unscheduled maintenance, heavy maintenance and modification programmes.

The SAR Helicopters will have three different roles: Duty Helicopter: o Each of the 6 SAR Operating Bases will have two SAR Helicopters to enable both scheduled and unscheduled maintenance to be performed without affecting SAR Operating Base Preparedness. The two SAR Helicopters will share the Duty Helicopter role to cover for each other and maintain a balance of utilization across the SAR Helicopter fleet.

Backup Helicopter: o The SAR Helicopter that is not in the Duty Helicopter role provides partial redundancy and a margin to minimise the probability of an unscheduled defect or event causing the base Preparedness to be directly adversely affected, as would be the case with only one SAR Helicopter. The Availability of the Backup SAR Helicopter is considered key to providing a robust service at each Base.

Reserve Helicopter(s): o This/these SAR Helicopter(s) shall enable accomplishment of scheduled and unscheduled maintenance, heavy maintenance and modification programmes, as well as serving as replacement in case of accident, without degradation of SAR Operating Base Preparedness. The number of Reserve Helicopters takes account of the inherent reliability and maintainability of the SAR Helicopter.

The Availability indicators will address the required SAR Helicopter states for the different SAR Helicopter roles separately. The primary role is the Duty Helicopter, and the term Availability (1)

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is reserved for this role. When referring to the availability requirements for the Backup Helicopter the term Availability (2) is used. Selected key performance indicators (KPIs) considered essential to avoid eroding the margins of SAR Helicopter Availability are listed in Section 3 below. In the event of performance deficiencies, analyses will be performed to identify root causes and effective remedial actions will be implemented. This will, as indicated below, necessitate analyses and systematic measurement and reporting of performance at lower process levels.

Incentives Analysis

Emergency response Preparedness and Helicopter Availability Key Performance Indicators

Continuous improvement

Figure 1 Performance analyses as means of continuous improvement

Where text in this Annex is installed in brackets [thus], the Provider shall submit his own proposal (irrespectively of whether the Ministry has proposed a text there or not). Other reservations must be included in the List of reservations, cf. the ITT Document Section 36.7.1. Notwithstanding the KPIs and SLA rewards and penalties set out herein, the Provider understands and agrees that error-free service provision and 24 hour year round Availability of the SAR Helicopters is of paramount importance in order to enable the SAR Helicopter Service to secure life and health. 1.3 SAR HELICOPTER STATES The SAR Helicopter states are defined in the table below:
Helicopter states Conditions Criteria for change of state

Crew embarking with the intention of initiating flight. Concluding in shutdown and disembarking. On-mission

1. From Alert: with Crew embarking 2. To Serviceable: provided no defects arising (snags) during flight and Flight Hours remaining minimum 5 hours 3. To Unserviceable: if defect(s) arising (snags) during start-up or flight or Flight Hours remaining less than 5 hours

Alert

Pre-flight (including turn-round) inspections performed and SAR

1. From Serviceable: with satisfactory completion of pre-flight inspection

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Helicopter states

Conditions

Criteria for change of state

Helicopter quarantined awaiting Crew.

2. To Serviceable: following expiry of quarantine time limitation 3. To Unserviceable: if defect identified or if calendar time limitation expires

All maintenance performed and certification of release to service issued for the SAR Helicopter for at least 10 Flight Hours.

1. From On-mission: provided no defects arising (snags) during flight and Flight Hours remaining minimum 5 hours 2. From Alert: following expiry of quarantine time limitation

Serviceable (fully mission capable)

3. From Unserviceable: following completion of maintenance 4. From Degraded serviceability: following deferred defect rectification 5. To Alert: with satisfactory completion of pre-flight inspection 6. To Unserviceable: if calendar time limitation expires Otherwise serviceable SAR Helicopter with defect(s) on systems that affect mission capability but not the airworthiness. Defect(s) can be deferred but mission capability is degraded, pending rectification. 1. From Unserviceable: if defect rectification is not complete and can be deferred 2. To Serviceable: following deferred defect rectification 3. To Alert or On-mission but with degraded capability (with same criteria as Serviceable SAR Helicopter) 4. To Unserviceable: if remaining calendar time less than 24 hours Defect identified (during flight, maintenance or pre-flight inspection) that requires rectification (unscheduled maintenance). Or, scheduled maintenance becoming due (imminent) resulting from accumulated Flight Hours / cycles / elapsed calendar time. 1. From On-mission: if defect(s) identified or remaining Flight Hours / cycles less than 5 Flight Hours 2. From Alert: if defect identified during pre-flight inspection or if remaining calendar time less than 24 hours 3. From Serviceable: if remaining calendar time less than 24 hours 4. From Degraded Mission Capable: if remaining calendar time less than 24 hours 5. To Serviceable: following completion of maintenance 6. To Degraded Mission Capable:

Degraded Mission Capable

Unserviceable (due maintenance)

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Helicopter states

Conditions

Criteria for change of state

following completion of maintenance except deferred defect 7. To AOG: if required maintenance action (unscheduled and scheduled) cannot be initiated due to absence of required spare parts, technical data, special tooling etc. AOG (aircraft-onground) Prolonged Unserviceable, resulting from absence of spare parts, technical data, special tooling etc. 1. To Unserviceable: following receipt of all necessary parts, data, tooling etc. allowing initiation of required maintenance.

Table 1 SAR Helicopter states

It is required that a SAR Helicopter from an Alert state must be able to become airborne within 10 minutes of the Crew boarding (i.e. within the Reaction Time). It shall for this purpose be assumed that the Crew will need 5 minutes to board following alarm. The set of maintenance task to be performed must be split or grouped accordingly to enable completion or reversion within 15 minutes, thus allowing the maintenance to be interrupted and mission undertaken without the Duty Helicopter requiring to be changed. Figure 2 depicts the SAR Helicopter states with the most common transition between states:

Degrade d
Serviceable Onmission Degrade

Alert

d
Available (1)

Degraded Mission Capable

Un-serviceable

AOG

Figure 2 SAR Helicopter states

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2. AVAILABILITY REQUIREMENTS 2.1 THE DUTY HELICOPTER 2.1.1 Helicopter Availability

The overall goal is that each SAR Operating Base sustains 100% Preparedness. The required Reaction Time is 15 minutes. Several levels of redundancy are required to ensure a robust service able to accomplish this ambitious target. The Provider shall always endeavour to support the Ministry with the objective of reaching the highest Preparedness possible within the available resources and other preconditions set out in the Contracts. 2.1.2 Helicopter Availability

The Availability of the Duty Helicopter is measured in terms of Availability (1). The minimum acceptable Availability (1) is 99% on average and [99%] on each SAR Operating Base. The cumulative time on average not having a Duty Helicopter Available is correspondingly limited to (i.e. must not exceed) 1% equalling [87.6] Hours per SAR Operating Base in any one-year period (12 months rolling average). When a SAR Helicopter has a state Serviceable, Alert or On-mission, it is considered Available (1) and may be utilized in the role Duty Helicopter. In the event that no SAR Helicopter is Available (1) at a particular SAR Operating Base, in order to preserve base Preparedness, a SAR Helicopter with the state Degraded Mission Capable may take the role Duty Helicopter. When the Duty Helicopter has a state of Degraded Mission Capable, the SAR Helicopter availability will be factored by 50%, i.e. if the Duty Helicopter has a state of Degraded Mission Capable for two hours, the Duty Helicopter is considered being Available (1) for one hour (two hours * 50%). 2.2 THE BACKUP HELICOPTER The Availability of the Backup Helicopter is measured in terms of Availability (2). The Backup Helicopter will assume the role of Duty Helicopter in the event of the Duty Helicopter being removed from its role for whatever reason (staggering, scheduled maintenance or unscheduled maintenance). Availability (2) of the Backup Helicopter is necessary to minimise and ideally avoid the Preparedness being affected. Maintenance may be performed on the Backup Helicopter. If the elapsed time required to reinstate the Backup Helicopter to Serviceable is less than 1 hour, the Backup Helicopter is considered to be Available (2). The Availability (2) requirement for the Backup Helicopter is [50%] on each SAR Operating Base in any one-year period (12 months rolling average). 2.3 THE RESERVE HELICOPTER To enhance the robustness on a national level additional SAR Helicopters are intended to be available to provide a contingency resource for the SAR Operating Bases to avoid the loss of Preparedness by repositioning to the subject SAR Operating Base.

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In addition, two Reserve Helicopters shall be made available for secondary missions simultaneously for up to three consecutive weeks every year on six months notice. 3. AVAILABILITY AND KEY PERFORMANCE INDICATORS (KPI) - REWARDS AND PENALTIES The Providers performance shall be measured and incentivized as set out below. For the first 3 months following PAC1 the indicators shall be measured and reported, but not result in any penalties or rewards (the Grace Period). 3.1 AVAILABILITY INDICATORS No Availability indicator Percentage of time, measured as an average of all SAR Operating Bases, where the Duty Helicopter is Available (1). Report interval Agreed requirement Measurement period 12 months rolling average (First measurement at end of first month following end of Grace Period. Until 12 months after end of Grace Period, average shall be based on elapsed time from end of Grace Period) 12 months rolling average (First measurement at end of first month following end of Grace Period. Until 12 months after end of Grace Period, average shall be based on elapsed time Reward/penalty > 99.3% => Reward of [0.5]% of ILS Running for the last full month prior to reporting. 98.5%-99% => Penalty of [2]% of ILS Running for the last full month prior to reporting. 98%-98.49% => Penalty of [4]% of ILS Running for the last full month prior to reporting. Below 98%: Penalty increases by [0.5]% of ILS Running for the last full month prior to reporting per additional 0.1% below 98%.

1a

1M

99%

1b

Percentage of time, measured at each SAR Operating Base, where the Duty Helicopter is Available (1).

[98.5%-99%] => Penalty of [1]% of ILS Running for the last full month prior to reporting. [98%-98.5%] => Penalty of [2]% of ILS Running for the last full month prior to reporting. Below [98%]: Penalty increases by [0.1]% of ILS Running for the last full month prior to reporting per additional 0.1% below 98%.

1M

[99%]

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from end of Grace Period)

1c

Percentage of time, measured at each SAR Operating Base, when the Backup Helicopter is Available (2).

1M

50%

12 months rolling average (First measurement at end of first month following end of Grace Period. Until 12 months after end of Grace Period, average shall be based on elapsed time from end of Grace Period)

48%-50% => Penalty of [1]% of ILS Running for the last full month prior to reporting. 45%-47.99% => Penalty of [2]% of ILS Running for the last full month prior to reporting. Below 45%: Penalty increases by [0.1]% of ILS Running for the last full month prior to reporting per additional 1% below 45%.

Table 2 Availability indicators

3.2 KPI 1 - LOGISTICS EFFICIENCY Report interval Agreed requireme nt 0 Measurement Reward/penalty period First measurement at end of first month following end of Grace Period. Each occurrence between 12 hours and 24 hours => Penalty of 25% of one Hourly Rate per hour Each occurrence > 24 Hours => Penalty of 50% of one Hourly Rate per hour Number of Days delayed delivery of parts (or kits) for scheduled maintenance tasks prior to tasks falling due. 20 Days in advance 6M First measurement at end of sixth month following end of Grace Each occurrence of delay => Penalty of 25% of one Hourly Rate per commenced Day

No

KPI

2a

Duration (measured in whole hours) of any AOG (Duty Helicopter and Backup Helicopter at each SAR Operating Base) situation due to lack of parts.

1M

2b

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Period.

delay

Number of Days delayed replenishment of maintenance facility stocks. 2c 6M

15 working days after withdrawal of any item with a unit value higher than EUR 5000

First measurement at end of sixth month following end of Grace Period.

Each occurrence of delay => Penalty of 25% of one Hourly Rate per commenced Day delay

Table 3 KPI 1 Logistics efficiency

3.3 KPI 2 - RELIABILITY AND MAINTAINABILITY No 3a KPI Engine unscheduled removal rate. Report interval 1Y Agreed requirement Ref data issued by Provider Measurement period Based on last 12 months prior to report. First report second year end following end of Grace Period. Based on last 12 months prior to report. First report second year end following end of Grace Period. Based on last 12 months prior to report. First report third year end following PAC1. Reward/penalty >20% excess => [0.5%] of total ILS Running (refer to FBEM) for measurement period.

3b

Major component (6 most time consuming) unscheduled removal rate.

1Y

Ref data issued by Provider

>20% excess => [0.1%] of total ILS Running (refer to FBEM) for measurement period for each major component.

3c

SAR Helicopter fleet average total Line Maintenance man hours per Flight Hour.

1Y

Ref data issued by Provider

Excess => Reimbursement of Ministrys excess cost.

Table 4 KPI 2 Reliability and maintainability

3.4 EARNBACK Report Period is defined as the period between two report dates for an Availability indicator or KPI. If the Provider can show, for any KPI, that the target for Availability (1) has been met in the Report Period for the KPI, any penalty related to that KPI respective of the Report Period shall be reduced by 50% multiplied by number of Report Periods for Availability (1) above target divided by total number of Report Periods for Availability (1) measured through the Report Period for the KPI.

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Example: KPI 2b has not been met through the last report period. A penalty of 100 has accrued. The Report Period for KPI 2b is the last 6 months prior to the report date. In this period, Availability (1) has been reported 6 times (including the reporting due at the same date as the report date of KPI 2b). The target of Availability (1) has been met 5 out of these 6 months. Earnback corresponds to: 100 * (50% * 5/6) = 41.7, hence penalty is reduced to 100 41.7 = 58.3. If the Provider can show, for any KPI that the target for that KPI has been met throughout the period following the Report Period, any remaining penalty related to that KPI for that previous Report Period shall be reduced by 25%. 4. REPORTING AND AUDIT 4.1 SERVICE LEVEL REPORTS Service Level Reports shall be provided at the end of each calendar month. The Ministry may request that Service Level Reports are provided more frequently. The Service Level Report shall as a minimum include the following information: The achieved Availability (1) related to each SAR Operating Base and the average for all Bases. The overview shall include details on accrued time for each state for Duty Helicopters at each SAR Operating Base, including information on which SAR Helicopters having occupied the role. The achieved Availability (2) related to each SAR Operating Base. The overview shall include details on accrued time for each state for Backup Helicopters at each SAR Operating Base, including information on which SAR Helicopters having occupied the role. Details on accrued time for each state shall also include accrued time in states below Serviceable where elapsed time required to reinstate the Backup Helicopter to Serviceable is less than 1 hour. The accrued time for each state for each SAR Helicopter while having the role of Reserve Helicopter, as well as a description of the maintenance performed on these SAR Helicopters. The achieved performance for each individual KPI having completed its Report Period. If Availability and/or KPI targets have not been achieved, the Provider shall: o o o o Provide calculation showing consequential penalties or rewards following such deviation from the Availability and/or KPI targets. Describe root causes of the deviations. Propose remedial actions to avoid future deviations. Provide calculation showing any earnback.

Where the Provider is of the opinion that any situations of deviations from the agreed Availability or KPI target is not the Providers responsibility, the Service Level Report shall set out the reasons for the Providers opinion.

To the extent information from the Ministry is required to complete the Service Level Report, the Ministry shall provide such information upon request from the Provider. If information is not provided from the Ministry, the Provider shall issue the Service Level Report with the information

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available, and shall clearly set out in the Service Level Report what information in the Providers opinion is missing. Notwithstanding the foregoing, the Provider shall at all times notify the Ministry of any discrepancies which has or may have detrimental effect on the Service. 4.2 AUDITS The Ministry shall have the right to perform audits, by itself or by appointed consultants, of the Providers systems to ensure that the Service Level Reports are accurate and complete. 4.3 SERVICE LEVEL MEETINGS The Parties shall in connection with each Service Level Report, unless both Parties agree that a meeting is unnecessary, conduct meetings to review the Service Level Report and discuss any issues related to the report or to the Service as a whole. The Parties may additionally agree to have additional meetings throughout the Term. 5. THIRD PARTY BENCHMARKING OF MINISTRY MAN HOURS 5.1 GENERAL Where a KPI refers to a requirement for how many Ministry man hours that are necessary for performing a task, the Provider may request that the Ministrys performance is benchmarked as set out in this Section 5. The Provider may request that the Ministry man hours, used for undertaking a task, shall be benchmarked by an independent third party. The Provider may request a benchmark maximum once for each Report Period. 5.2 APPOINTING THE THIRD PARTY AND SCOPE OF THE BENCHMARK Upon requesting a benchmark, the Provider shall submit to the Ministry for approval a suggested third party with the necessary competence and organization to undertake a benchmark review. The Ministry may refuse a suggested third party with reasonable cause. The Ministry shall have the right to conduct interviews with the management of the third party as well as the personnel that will conduct the benchmark to form a basis for the Ministrys conclusion, and to request further documentation from the third party. When the Parties have agreed on a third party to conduct the benchmark, the Parties shall agree on the scope of the benchmark and a detailed plan for the review to be performed. The benchmark shall determine if the Ministry man hours used by the Ministry in the Report Period are within good industry practice. If the Parties do not agree on the review plan, the benchmarker shall develop the plan based on the Parties input and based on best practice within the industry. The Provider shall enter into a contract with the benchmarker after the Ministry has reviewed and accepted the draft contract with the benchmarker. The Ministry may refuse acceptance of a draft contract with reasonable cause. The Party requesting the benchmark shall pay any advance payments agreed with benchmarker.

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5.3 CONDUCTING THE BENCHMARK Following the appointment of the benchmarker, the benchmarker shall undertake the benchmark according to the plan. Any questions or request for clarifications from the benchmarker shall be sent to both Parties. Upon completion of the benchmark, the benchmarker shall provide both Parties with a benchmark report, setting out the benchmarkers findings and its conclusion of the benchmark. 5.4 THE BENCHMARK RESULT If the benchmark concludes that the Ministry man hours used are within good industry practice, no action shall be taken. If the benchmark concludes that the Ministry man hours used are not within good industry practice, the Ministry man hours used for the relevant period shall be reduced and the penalty, if any, shall be calculated based on the benchmark. 5.5 COSTS If the benchmark review concludes that the Ministry man hours were in accordance with good industry practice, the costs in connection with the benchmark review shall be covered by the Provider. If the benchmark review concludes that the Ministry man hours were not in accordance with good industry practice, all costs in connection with the benchmark review shall be added to the next invoice from the Provider to the Ministry. 6. PAYMENT OF REWARDS, PENALTIES AND EARN BACK Payment mechanisms for rewards, penalties and earn back are set out in Annex 7. 7. NUMBER OF HELICOPTERS The Provider shall reimburse the Ministry with additional SAR Helicopters if the following criterion is not met: Availability (1) measured as average of all Bases (refer to Availability indicator 1a), calculated without the use of the replacement SAR Helicopter (if in place), is on a level below the requirement for more than 20 of 24 consecutive months. First measurement shall be made at FAC, based on the 24 months prior to FAC. If the number of SAR Helicopters, excluding Optional Helicopters, but including the replacement SAR Helicopter, is 16 or more, the Ministry shall pay 25% of the price of an Optional Helicopter (based on price at the date of the measurement) for each additional SAR Helicopter reimbursed by the Provider according to the above rule.

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