Vous êtes sur la page 1sur 256

 

OFFICIAL SENSITIVE - COMMERCIAL


 

SCHEDULE 2

MOBILISATION PLAN

Part A: Authority Mobilisation Activities

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
A. Administration
AUT Authority Authority to establish DIGA and Written confirmation from The Authority is Prior to
001 DIDO, by: Authority that operational satisfied that an completion of
DIGA is in place (i.e. DIGA operational DIGA is Mobilisation
 confirming the organisation Period.
has the following functions in place.
design of DIGA, to include
in place: Finance, Scrutiny,
the following appointments: Letters of Delegation
Commercial, Contract and
Senior Duty Holder, Senior have been issued to
Senior Duty Holder)
Risk Owner, Senior Data relevant DIGA
Protection Officer, Letters of Delegation for personnel and Named
Information Asset Owner, relevant DIGA personnel Contractors.
Sustainable Development and Named Contractors.
Champion and Fraud Focal
Point
 recruiting and resourcing

Page 157 
OFFICIAL SENSITIVE - COMMERCIAL  
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
posts in DIGA, to include the
following functions: Finance,
Scrutiny, Commercial,
Contract and Senior Duty
Holder
 putting in place Letters of
Delegation for relevant DIGA
personnel and Named
Contractors
AUT Authority Authority to notify its reporting List and (where appropriate) Authority has Prior to
002 requirements regarding the Contractor templates of documents provided relevant completion of
and DIDO (including financial and required for reporting evidence to the Mobilisation
Period.
operational reporting) to the process. Contractor.
Contractor.
AUT Authority Authority to establish terms of Terms of reference for the Authority has Prior to
003 reference for the Monitoring Group. Monitoring Group. provided relevant completion of
evidence to the Mobilisation
Period.
Contractor.
AUT Authority In accordance with the procedures Authority sponsorship on Authority has Within 5 Business

Page 158 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
004 laid out in JSP440, Director Business individual security clearance provided all relevant Days of
Partnering to sponsor all named request forms. certificates to the Commencement
contractors to have security Authority’s Date.
certificates issued by Defence nominated contact.
Business Services – National Security
Vetting.
AUT Authority All Named Contractors to be issued Security passes for relevant All Named Within 5 Business
005 with security passes to relevant Authority Sites for all Contractors provided Days of
Authority Sites. Named Contractors. with security pass(es) Commencement
for relevant Authority Date.
Site(s).
N.b. Pass will be
required before any
Named Contractor is
permitted access to
relevant Authority
Sites.
AUT Authority DII accounts established for all Written confirmation of DII Authority has Within 5 Business
006 Named Contractors. account creation for all provided relevant Days of
Named Contractors from evidence to the Commencement

Page 159 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
Authority. Contractor. Date.
DII accounts for all
Named Contractors
visible on the Global
Address list.
AUT Authority DII folder permissions to have been Written confirmation of Authority has Within 5 Business
007 established for all Named relevant folder permissions provided relevant Days of
Contractors. (including to relevant DII evidence to the Commencement
role folders, group folders Contractor. Date.
and MOSS) for all Named
Contractors from Authority.
AUT Authority Access to DII provided to all Named Written confirmation of DII Authority has Within 5 Business
008 Contractors. account activation for all provided relevant Days of
Named Contractors from evidence to the Commencement
Authority. Contractor. Date.
AUT Authority Authority to provide an up-to-date list List of mandatory training. Authority has Within 5 Business
009 of all mandatory training required. provided relevant Days of
evidence to the Commencement
N.b. List as at March 2013 attached at
Contractor. Date.

Page 160 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
Annex A.
B. Induction
AUT Authority Authority to identify key personnel Key personnel and Authority has Within 5 Business
010 and stakeholders for the Named stakeholders list. provided relevant Days of
Contractors to meet during the evidence to the Commencement
Mobilisation Period. Contractor. Date.

Page 161 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Part B: Contractor Mobilisation Activities

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
A. Integration Plan
CON Contractor Completion of all activities Written confirmation of Completion of all Completion of all
001 relevant to the Mobilisation completion of all Mobilisation Mobilisation Period Mobilisation Period
Period set out in the Integration Period activities identified in activities identified in activities in
Plan. Integration Plan, with Integration Plan to accordance with
supporting evidence. the Authority’s timeline set out in
reasonable Integration Plan, and
satisfaction. at the latest, prior to
completion of
Mobilisation Period.
B. Compliance

Page 162 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
CON Contractor All Named Contractors to Written confirmation from all All Letters of Prior to completion
002 accept responsibilities set out in Named Contractors that Delegation signed of Mobilisation
relevant Letters of Delegation Letters of Delegation and received by the Period.
and to demonstrate responsibilities accepted and Authority.
understanding of understood. Contractor has
responsibilities, including Written confirmation from all provided relevant
compliance requirements. Named Contractors that key evidence to the
N.b. A list of the key compliance requirements have Authority, and the
compliance requirements as at been reviewed and Authority is
March 2013 is attached at understood, together with reasonably satisfied
Annex B. documented procedures and that requirements
practices for ensuring have been understood
compliance. and that procedures
and practices are
appropriate.

Page 163 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
CON003 Contractor Contractor to carry out Rehearsal DIGA to agree with the The Contractor to To be completed prior
of Concept (ROC) Drill exercises Contractor (at the Mobilisation provide a written to the end of the
with Authority teams for the key Monitoring Group) a reasonable record of each scenario Mobilisation Period.
DIDO services, processes and sample list of scenarios covering run as a Rehearsal of
organisation, relevant to the a range of activities that the Concept.
performance of the Contractor’s Contractor-led DIDO will be
Each report will be
obligations under this Contract. expected to manage from
presented to The
This should model the key Effective Date. DIGA and the
Monitoring Group. The
interactions between DIDO and Contractor to determine together
Authority will accept
DIGA, customers and suppliers. a detailed timeline for the
these reports as
satisfactory completion of the
sufficient evidence.
scenario and to agree the
satisfaction criteria for the
evaluation of the Contractor.
DIDO teams and the Contractor
to develop a joint plan for each
scenario pertaining to a
workstream or division,
incorporating existing DIO
process and practice and
Contractor IIP.
Contractor to co-ordinate and
run the scenarios with the
support of DIDO teams through
the process agreed with the
Page 164 
Authority, via the Mobilisation
OFFICIAL SENSITIVE - COMMERCIAL
  Monitoring Group.
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
C. Administration
CON Contractor Agree TOR with the Authority Terms of reference developed Agreed TOR for the Prior to completion
004 for the Monitoring Group (if for the Monitoring Group. Monitoring Group. of Mobilisation
any). Period.

CON Contractor Contractor to prepare a risk Documented escalation Contractor has Prior to completion
005 issues and opportunities process. provided relevant of Mobilisation
escalation process that is evidence to the Period.
compatible with the Authority’s Authority, and the
risk and issues processes as process has been
described in the Acquisition demonstrated to the
Operating Framework and the Authority’s
DIO Enhanced Operating reasonable
Enhanced Operating Model satisfaction through a
Processes and demonstrate such process agreed with
process. the Authority.

Page 165 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
CON Contractor Contractor to appoint an Letter of Delegation for Contractor has Prior to completion
006 Operating Duty Holder within Operating Duty Holder to be provided relevant of Mobilisation
DIDO responsible for the in place. evidence to the Period.
delivery of a ‘safe place’ for Authority.
infrastructure for health, safety
and environment.
CON Contractor All Named Contractors to sign Two signed copies of Official Contractor has Within 5 Business
007 two copies of Official Secrets Secrets Act from all Named provided relevant Days of
Act (one held by Authority, one Contractors. evidence to the Commencement
retained by individual). Authority. Date.

Page 166 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
CON Contractor All Named Contractors to have Regarding application for SC, Contractor has Regarding
008 submitted a valid application for evidence of submission of provided relevant application for SC,
Security Clearance (SC) to DBS application from all Named evidence to the within 10 Business
National Security Vetting. Contractors. Authority. Days of
All Named Contractors to have Commencement
Regarding SC itself, proof of
Date.
SC in place. SC for all Named Contractors.
Regarding SC itself,
prior to completion
of Mobilisation
Period.

Page 167 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
CON Contractor All Named Contractors to have Training plan for all Named Contractor has Prior to completion
009 a training plan in place to Contractors. provided relevant of Mobilisation
undertake mandatory training, evidence to the Period.
For the avoidance of doubt,
to include (but is not limited to) Authority, and
the Authority may waive any
the training identified in Annex Authority is
requirement to undertake
A. reasonably satisfied
mandatory training (including
the training identified in that training plan is
acceptable.
Annex A) where the
Contractor provides adequate
evidence to the Authority that
such (or, where appropriate,
equivalent) training has
already been undertaken by
that Named Contractor.
Whether or not such evidence
is adequate for the Authority’s
purposes shall be at the
Authority’s sole discretion.

Page 168 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
CON Contractor For those Named Contractors Proof of BPSS for all Named Contractor has Prior to
010 without extant SC, BPSS is Contractors requiring SC. provided relevant Commencement
required to be in place whilst evidence to the Date.
the SC process is undertaken. Authority.

D. Induction
CON Contractor All Named Contractors to Schedule of meetings with Contractor has Prior to completion
011 undertake: key Authority personnel (as provided relevant of Mobilisation
agreed with the Authority) evidence to the Period.
 a series of office calls /
and plan to visit key Authority, and
introduction visits with
Authority Sites during Authority is
all key Authority
Mobilisation Period. reasonably satisfied
personnel and relevant
that schedule of
stakeholders Written confirmation that all
meetings is
scheduled meetings have
 series of site acceptable.
taken place.
familiarisation visits to Contractor has
key DIO locations attended all
scheduled meetings.

Page 169 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Serial Responsibility Mobilisation Activity Acceptance Test


Evidence required Testing and Timeline
evaluation
methodology
CON Contractor Named Contractors to Plan in place for engagement Contractor has Prior to completion
012 undertake a series of sessions with Authority provided relevant of Mobilisation
introductory briefing events to Personnel within the evidence to the Period.
all Authority Personnel at key Mobilisation Period. Authority, and
Authority Sites to engage Authority is
Written confirmation that
workforce and outline new reasonably satisfied
engagement sessions have
arrangements. that schedule of
taken place.
engagement sessions
is acceptable.

Page 170 

 
OFFICIAL SENSITIVE - COMMERCIAL
 
OFFICIAL SENSITIVE - COMMERCIAL
 

ANNEX A TO SCHEDULE 2

Subject Who? When? What? Refreshment/Notes Duration

Selection All Named Prior to taking any part in CSL – Face to DA Text Based Distance Learning 1 Day
Interviewing Contractors with the civilian sifts or face training. (TBDL) package ‘Recruitment –
Line Management interview process. Managing People Getting it Right’, Reference G066
responsibilities - Recruitment & for those who wish to refresh or
Selection. when identified as a developmental
Managing People or business need. Course pre-
- Recruitment and requisition – Equality and
Selection for Diversity Training. DLP e-learning
Senior Managers. package ‘E&D Awareness – Clued
Up?’ Reference VR008N.

Armed All Named Prior to undertaking DA - One day When identified as a 1 Day
Forces Contractors with appraisals on Service workshop. developmental or business need.
Appraisal military line Personnel. ‘Military
management Appraisal Writing
responsibilities for Civilian
Reporting
Officers’.
Reference R084

Managing All Named ASAP after joining DA - Face to face When identified as a 4 Days
People in Contractors with (within 6 months) workshop. New developmental or business need.
Defence Line Management to Managing
responsibilities People in Defence
– Course Code

Page 171 
OFFICIAL SENSITIVE - COMMERCIAL  
OFFICIAL SENSITIVE - COMMERCIAL

Subject Who? When? What? Refreshment/Notes Duration

R064

Equality & All Named Within first 6 months DLP e-learning When identified as a development Approx. 3
Diversity Contractors upon package ‘E&D or business need. The CSL course Hours
(E&D) joining Awareness – can be used as refresher training.
Clued Up? The DLP course is used as the
Reference mandatory course as it covers
VR008N service and civilian personnel.

Equality & All Named As soon as practicable DA at Shrivenham Refreshed every 3 years. 1 Day (plus 3
Diversity Contractors at after appointment ‘Senior Officer hours)
(E&D) B1/above or E&D Awareness
equivalent grade. Day’- Reference
R057 Plus DLP e-
learning package
as above.

Health & All Named H&S training relevant to Courses available: Refresh as required locally. Approx. 1
Safety (H&S) Contractors upon your role and CSL e-learning Hour (per
joining. responsibilities. Line package; H&S course)
Managers to determine Awareness – All
Named Contractors what training is required Staff H&S
with Line to fulfil H&S legislation. Awareness for
Management H&S Training Strategy Managers
responsibility need and Competence Annex

Page 172 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Subject Who? When? What? Refreshment/Notes Duration

to complete the located in JSP 375 Vol. 1


H&S awareness for - Annex B refers.
managers course.
Within first 2 months

Fire Safety All Named Within 1 month CSL -Basic Fire Annually Approx. 35
Contractors upon Awareness for all Minutes
joining. staff – Course This training does not replace any
code – BSFM01 local fire awareness training which
has been mandated by the unit.

Office Safety All Named Within first 2 months DLP online course Annually
Contractors upon ‘Office Safety’
joining. VL 386

Security All Named Within first 3 months General threat Annually Varies by
Contractors upon brief run by location. MB
joining. site/TLB. Approx. 2
Hours

Display All Named Within first 2 months V397 Display DSE refresher training should be Approx 1.5
Screen Contractors upon Screen Equipment undertaken at least every two years Hours
Equipment joining. or when there is a significant
change to the DSE, workstation or
software.

Page 173 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Subject Who? When? What? Refreshment/Notes Duration

Information All Named ASAP after joining (but DLP e-learning Training to be undertaken before Varies
Security Contractors upon within 3 months) package -MOD access to IT. Includes
joining. Basic IT Security assessment.
Code: TOC1-V2.1
Defence
Document
Handling Security
- Code: DDHS-01

Information All Named ASAP after joining Responsible for Version covers staying safe online Approx 1 hour
Security Contractors upon Information & small Fraud Module With
joining. (Listed as Assessment
Protecting
Information Level
1)

Information All Named Annually Responsible for Version covers IA family, IA Approx 1 hour
Security Contractors with Information Risk/Threat & Reporting, staying
Line Management ASAP after first (Listed as safe online & small Fraud module A revised
responsibility. appointment to line Protecting Role Based
management post.(but Information product for
within 6 months) Levels 2/3) Training Year
13/14 With
Assessment

Page 174 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Subject Who? When? What? Refreshment/Notes Duration

Information Staff with an IA Role based training on Responsible for Version covers Threat/Cyber Approx 40
Security role (e.g. SIRO, appointment followed by Information Security, Risk & a small Fraud mins
NEDs and Board relevant annual training. (Listed as module
Level Directors) Protecting A revised
ASAP after joining (but Information Level Role Based
All Named within 6 months) 3) Product for
Contractors at SCS Training Year
or above. 13/14 With
Assessment

Business All Named ASAP after joining but CSL – e-learning Every 5 years or as a business Approx 1
Continuity Contractors upon within 6 months BCSP001 - need. Hour
joining 'Business
Continuity’

Defence All Named As soon as practicable Defence Strategic Contact the HRD SCS 2 x 4 days
Strategic Contractors at SCS after appointment Leadership Management Team who will
Leadership or equivalent grade Programme arrange attendance on this
Programme (DSLP). Face to programme.
face workshop.

Cabinet New appointments On appointment to SCS SCS Base Camp - Contact the HRD SCS 1.5 Days
Office SCS to SCS Taking leadership Management Team who will
Induction As soon as practicable to the next level. arrange attendance on this
Event All Named after appointment Face to face programme.
Contractors at SCS workshop.
or equivalent grade

Page 175 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

ANNEX B TO SCHEDULE 2

Page 176 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Page 177 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

Page 178 

 
OFFICIAL SENSITIVE - COMMERCIAL
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 3

INFRASTRUCTURE IMPLEMENTATION PLAN

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 179 
OFFICIAL SENSITIVE - COMMERCIAL

THIS PAGE IS INTENTIONALLY LEFT BLANK

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 180 
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 4

EXIT PLAN

1. INTRODUCTION

1.1 The purpose of this Schedule is to define the arrangements for exit
management prior to, and following, the end of the Contract Period.

1.2 The provisions of this Schedule shall operate at any time, whether before or
after commencing retendering this Contract, and irrespective of whether exit is a
result of expiry or termination of this Contract.

1.3 The Contractor shall perform its obligations as described in this Schedule 4 at
no additional cost to the Authority, notwithstanding the Contractor’s rights to request
contract adjustments for partial termination in accordance with Clause 36.12 of the
Contract, and the provision of services post expiry or termination described in
paragraph 5 of this Schedule 4.

2. PREPARATION OF EXIT PLAN

2.1 The Exit Plan (attached as Annex A to this Schedule 4) will be updated by the
Contractor within 90 Business Days following the end of the Transformation Period
and thereafter in accordance with Clauses 36.4 and 36.5 of the Contract.

3. RE-PROCUREMENT PERIOD

3.1 On request or within a maximum of 30 Business Days following the start of


the Re-Procurement Period, the Contractor shall provide access to personnel and data
identified in the Exit Plan. Provided that the exercise of such access rights by the
Authority and its representatives and advisers, does not unduly interfere with the
continuing provision of the services supplied under this Contract.

4. PARTIAL TERMINATION EXIT PLAN

4.1 A Partial Termination Exit Plan will be prepared in the same manner as the
full Exit Plan, with the same deliverable and requirements defined therein. The
primary difference being the inclusion of materials associated specifically with the
partial termination.

5. POST EXPIRY

5.1 Where the Contractor is required to comply with Clause 36.17 of the Contract
the Authority shall reimburse the Contractor with any direct costs which the
Contractor incurs for permitting or making available the items set out in Clause 36.17
or cooperating with the Authority or Follow-On-Contractor.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 513 
OFFICIAL SENSITIVE - COMMERCIAL

ANNEX A TO SCHEDULE 4
THE EXIT PLAN

1 PURPOSE AND SCOPE

The purpose of this plan is to establish a method for the organised closeout of the
project or any partial closeout based on a request for a partial termination plan. The
scope of this plan includes the provisions needed to enable the Contractor to cease
providing the services supplied under this Contract at the Expiry Date or Termination
Date and to permit the Authority or a Follow-On Contractor to commence provision
of those services while minimising any disruption to or deterioration of the
performance of the services supplied under this Contract during and after the
retendering period or partial termination. The plan provides for the definition of the
exit assistance services that the Contractor will perform to ensure a successful transfer
to the Authority or a Follow-On Contractor with no or minimal disruption or
deterioration to the services supplied under this Contract.

It is important to note that the Contractor will be providing management services to


the Authority through DIDO. This Exit Plan is written to organise the actions needed
to turnover and/or complete the requirements of this management team. There is no
intention to discuss actions needed to turnover various works and contracts, activities
and projects that are managed directly by the Authority staff under the management of
the Contractor personnel in DIDO. This plan specifically will address only those
activities under the direct control of the Named Contractors.

2 [NOT USED]

3 Exit Timeline

3.1 Initial Development of Exit Plan


Month
Activity 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Complete Initial Transformation ▼
Submit final Contract Exit Plan
DIGA Review
Final Exit Plan
Notification of Intent to Terminate/Recompete ▼
Handover Plan Completion
Handover Activities
Contract Termination Date ▼
Post Termination Support Team ▼

This Exit Plan will be updated within ninety (90) calendar days following the
completion of the Short Term Transformation Period. The initial Exit Strategy
Succession Planning Documents and the Initial checklists in the Handover plan will
be brought up to date and actions required by the contractor will be updated for
delivery to the Authority, for the Authority’s consideration and comment.

The Authority shall respond with written comments to the Contractor within 30
Business Days following receipt of the draft Exit Plan.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 514 
OFFICIAL SENSITIVE - COMMERCIAL

The Contractor shall submit a final version of the Exit Plan to the Authority for
approval within thirty (30) Business Days of receipt by the Contractor of the
Authority’s written comments on the Exit Plan and, provided such final version
properly addresses the comments of the Authority, the Authority shall reasonably
approve the plan.

3.2 Updates to Exit Plan

The Exit Plan shall be reviewed by the Contractor on an annual basis following the
approval of the plan identified in Section 3.1. Where updates are required, the Exit
Plan shall be updated and submitted to the Authority for consideration, comment and
approval as part of the annual review process.

4 Critical Deliverables in the Exit Plan

4.1 Exit Strategy Succession Plan

Included with the original Exit Plan delivery is a succession plan for the Named
Contractors. Each Named Contractor will develop a unique succession planning
chain for their position which will be reviewed annually (following the initial
submission after the Short Term Transformation Period) by the Talent Management
team and the CEO. This succession plan will be developed in accordance with the
annual talent management program referred to in paragraph 2.5 of Part 10 of Schedule
3.

4.2 Handover Plan

The Handover Plan will describe the physical documents, deliverables, data, software,
manuals, equipment, etc., that will be turned over from the Contractor to the Authority
Staff or named agent of the Authority. These items will be defined initially following
the Short Term Transformation period, but will need to be updated annually as new
data elements and new items are developed and/or identified by the Contractor. This
plan will consist of the following elements:

 Description of Turnover packages

 Demobilisation Checklist

 Named Contractors responsible for the Exit Plan

5 Critical Controls

This plan is owned by the CEO of DIDO. All requests for Retendering Data based on
a notice from the Authority to the Contractor that the Authority intends to retender
this Contract (a Notice of Intent to Retender), or Exit Data related to a partial
termination, will be requested through the CEO of DIDO. All changes to the
document or any part of this document will be approved by signature by the CEO of
DIDO.

6 Transfer of Retendering Materials and/or Exit Data

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 515 
OFFICIAL SENSITIVE - COMMERCIAL

Retendering Materials and any Exit Data will be transferred to DIGA upon written
request, or as defined in the Handover Plan. All requests will be delivered within 30
Business Days of the request unless otherwise specified. Confidential data will be
marked as such or redacted to protect proprietary information related to the
Contractor.

7 Exit Assistance Services

The following exit assistance services are available to the Authority. Unless
otherwise requested by the Authority, the services are delivered in accordance with
this Exit Plan or as requested for early termination or after a Notice of Intent to
Retender. Any services beyond this list are available following a request through
Schedule 12 of the Contract:

 Succession planning within DIDO to replace the Named Contractors at


contract termination or expiry

 On the Job training and knowledge transfer to Authority personnel or other


named contractors if required at termination or expiry

 Retendering or Exit Data retrieval, packaging and delivery to requested


Authority designated personnel at termination or expiry

 Handover planning and contract termination services as defined in the


Handover Plan

8 Continuity of Services

The Contractor will maintain the Named Contractors in position and they will execute
the final exit strategy in accordance with timelines developed in the Handover Plan.
The removal of resources will occur in a planned sequence in full cooperation with
the Authority. Furthermore, the Contractor will identify personnel available to
support any transition (full or partial termination) following the Expiry Date or
Termination Date.

9 Work in Progress

It is the nature of this project that there will be work in progress and therefore,
definition of orderly transfer of open work is limited to the turnover of work under the
direct control of Named Contractors, notwithstanding the work being implemented by
Authority personnel working as subordinates to the Named Contractors. The
Turnover of work in progress will be detailed in the Handover Plan as this work is
unknown at this time.

10 Identification of Named Contractors

Named Contractors who are responsible for the delivery of exit services are identified
in the Handover Plan.

11 Minimise Costs due to Partial Termination

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 516 
OFFICIAL SENSITIVE - COMMERCIAL

The Contractor will work closely with the Authority at all times to minimise cost.
When a request for partial termination or Notice of Intent to Retender is provided to
the CEO, an action officer will be appointed and all interaction with the Authority will
be coordinated with this one individual. The action officer will manage the response,
maintaining control of the cost and schedule to provide the response and assure to the
CEO that the requirement will be met with minimal disruption and cost impact to the
overall project.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 517 
OFFICIAL SENSITIVE - COMMERCIAL

ANNEX B TO SCHEDULE 4
EXIT STRATEGY SUCCESSION PLAN

The purpose of the Exit Strategy succession planning program in the DIDO is to
ensure a ready supply of internal talent for key positions at the time of contract expiry
or termination. It is the intent of the Contractor to help the Authority develop
Authority Personnel to the full extent of their potential and, to the extent possible for
the organisation, to help them achieve realistic career goals that satisfy both individual
and organisational requirements. The Contractor organisation is firmly committed to
helping Authority Personnel develop their potential so that they are prepared and
qualified to assume positions in line with individual career goals and organisational
requirements.

At least once each year, the CEO will sponsor as part of the annual performance and
development process:

 A succession planning activity that will assess how well the organisation is
positioned to meet replacement requirements by promotions or other personnel
movements from within

 Individual performance appraisal to assess how well individuals are meeting


their current job requirements

 Individual potential assessment to assess how well individuals are presently


equipped for future advancement. Unlike performance appraisal—which is
typically focused on past or present performance—the focus of individual
potential assessment will be on the future, and

 Individual development planning to provide the means for action plans to help
individuals narrow the developmental gap between what they already know or
can do and what they must know or do to qualify for advancement.

To prepare for the eventual replacement of Named Contractors with Authority


personnel by the expiry of the contract, we will work within the MOD's Talent
Management Strategy, to identify those individuals with the potential to replace our
Named Contractors and, with their line managers, help them to develop individual
action plans.

The output from the performance and potential assessments will be collated and
presented for review by the senior teams in DIGA and DIDO. The senior teams will
review and discuss those staff identified as ‘star performers’ and ‘high potential’ staff.
An example of the output we will produce is shown below:

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 518 
OFFICIAL SENSITIVE - COMMERCIAL

Potential assessment of number of Grades 6 and 7 ready for promotion

This annual review with the senior staff team facilitates cross-departmental review of
individuals, in an effort to gain full knowledge of the staff available for promotion.
The team will recommend various annual developmental tasks for the high potential
staff such as:

 secondments to the wider Capita Team companies (Capita, URS or PA


Consulting) in order to provide access specialist market knowledge and
broaden experience
 stretch assignments
 in-house training
 external training, and
 cross governmental secondments.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 519 
OFFICIAL SENSITIVE - COMMERCIAL

ANNEX C TO SCHEDULE 4
HANDOVER PLAN

The Handover plan contains a brief description of the knowledge, data, materials, and
specific items that will be handed over upon termination or expiry of the Contract.
The plan will define all work in progress, documents, deliverables, books, items and
equipment that must be handed over to the Authority and/or to the Authority’s named
designate. This plan is updated annually as information is developed and data items
are created or disposed from the Project. A final handover plan is developed at one
year from the Expiry Date or within 30 Business Days of the Authority’s notice of
termination or Notice of Intent to Retender is planned. This final handover plan will
contain the data elements required for turnover to the Authority.

Structure and Purpose

The Handover Plan is structured into a series of Turnover Packages. Each package is
focused on a particular topic and each package will be owned by a Named Contractor.
There will be minor differences in the content of each package between the
incorporated and unincorporated models, but the concept remains the same. During
the life-cycle of the Contract, as items are identified that will require turnover or a
defined exit strategy, they are listed in the package and materials are defined and
developed for eventual turnover.

Turnover Package Definition

The current packages are defined as:

1. Contract Deliverables

a. Exit Strategy Succession Plan

b. Handover Plan

2. Active Subcontracts managed directly by the Contractor

a. URS Subcontract

b. PA Consulting Subcontract

3. Claims or Disputes

a. Item

b. Item

4. Exit Data/Retender Data

a. Statutory Records

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 520 
OFFICIAL SENSITIVE - COMMERCIAL

b. Regulatory Records

c. Books of Account

d. Other

5. Contract Items

a. Change orders (Schedule 12)

b. Partial Termination Records

6. Personnel Records

a. Authority Personnel Records under DIDO control

b. Contractor Personnel Records being transferred under TUPE’d to the


Authority

7. Financial Records

a. Incentive Fees paid

b. Outstanding incentive fees

c. Pending Payments

d. Payments in Arrears

e. Final Invoice

f. Release of Retention

8. Demobilisation

a. Facilities Turnover

b. Vehicles Turnover

c. Equipment Turnover

d. Keys/Access Cards/Badges/Parking permits

Package Completion Checklist

This checklist will document the final turnover of work in progress related items that
are being managed directly by the Contractor which will require a turnover or exit
strategy resulting in some transfer of knowledge or equipment such as, technical data,
equipment, facilities and other items or other knowledge. This checklist will be
modified annually to maintain configuration control of the required items.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 521 
OFFICIAL SENSITIVE - COMMERCIAL

Contact Details for Named Contractors responsible for each package in the
Handover Period

Listing of Named Contractors who are responsible for the completion of Handover
Activities

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 522 
OFFICIAL SENSITIVE - COMMERCIAL

Demobilisation Checklist

Accepting for Authority

Date of Acceptance
Responsible Party

Date of Turnover

Comment
Contract Deliverables

Succession Plan

Handover Plan

Active Subcontracts Managed


Directly by the Contractor

URS Subcontract

PA Consulting Subcontract

Claims or Disputes

Item

Item

Exit Data/Retender Data

Statutory Records

Regulatory Records

Books of Account

Other Item

Contract Items

Change Orders (Schedule 12)

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 523 
OFFICIAL SENSITIVE - COMMERCIAL

Accepting for Authority

Date of Acceptance
Responsible Party

Date of Turnover

Comment
Partial Termination Records

Personnel Records

Authority Personnel Records


under DIDO Control

Contractor Personnel Records


under TUPE consideration

Financial Records

Incentive Fees Paid

Outstanding Incentive Fees

Schedule of Pending Payments

Service Deductions

Payment in Arrears

Final Invoice

Release of Retention

Demobilisation

Facilities Turnover

Vehicles Turnover

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 524 
OFFICIAL SENSITIVE - COMMERCIAL

Accepting for Authority

Date of Acceptance
Responsible Party

Date of Turnover

Comment
Equipment Turnover

Keys

Access Cards

Badges

Parking Permits

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 525 
OFFICIAL SENSITIVE - COMMERCIAL

Named Contractors Responsible for Package Handover Activities

Package Name Office Telephone Mobile Phone

Contract
Deliverables

Active
Subcontracts
managed directly
by the Contractor

Claims or Disputes

Exit Data/Retender
Data

Contract Items

Personnel Records

Financial Records

Demobilisation

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 526 
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 5

GOVERNANCE

1. GENERAL

1.1 The following diagram illustrates the hierarchy of governance entities relevant
to DIDO:

Secretary of State for Defence 

Defence Board 

Defence Infrastructure Board

Authority (represented by 
DIGA) 

                   

Named Contractors 
 

2. MONITORING GROUP

2.1 The Parties shall establish a Monitoring Group to review and discuss the
Contractor’s performance under this Contract. The Monitoring Group shall comprise
of:

(a) the Representatives;

(b) the Authority’s Commercial Officer;

(c) the following representatives of the Contractor:

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 527 
OFFICIAL SENSITIVE - COMMERCIAL

(i) Chief Operations Officer;

(ii) Director of Finance and Commercial; and

(iii) Director of Asset Strategy and Portfolio; Director of Transformation


and Change; and

(d) any other person the Authority or the Contractor requires.

2.2 The Monitoring Group shall only be quorate if representatives of the Authority
form the majority of the attendees.

2.3 The Monitoring Group shall meet monthly throughout the Contract Period
(excluding the Mobilisation Period) and at such other times as may be required by the
Authority’s Representatives, save that the Monitoring Group shall not be required to
meet in any month in which a Transformation Review or Annual Performance Review
take place.

2.4 The Authority’s Representative shall convene and chair meetings of the
Monitoring Group, and the Contractor’s Representative shall:

(a) prepare an agenda for each meeting of the Monitoring Group and provide the
agenda to the Monitoring Group members at least five Business Days before
each meeting (and if the Authority’s Representative disagrees with the agenda,
make such amendments as may be necessary in order to reach agreement);

(b) take minutes of meetings held by the Monitoring Group (such minutes to
include amongst other things, actions arising from the meetings);

(c) provide a draft of such minutes to the Authority’s Representative;

(d) if the Authority’s Representative disagrees with the draft minutes, make such
amendments as may be necessary to reach agreement. Where the Parties are
unable to agree draft minutes they shall refer the matter to the next meeting of
the Monitoring Group for resolution; and

(e) provide the Monitoring Group members with a copy of the agreed minutes.

2.5 At least five Business Days before each meeting of the Monitoring Group, the
Contractor shall procure that DIDO provides a monthly report which is in a form
approved by the Authority and which includes:

(a) the information required under Clause 9.4 of the Contract;

(b) the reports required under Clause 24.6 of the Contract; and

(c) without limiting Clauses 26 and 27 of the Contract, such other information as
the Authority may require to comply with the Authority’s statutory duties
and/or to exercise its departmental functions including duties and obligations
in respect of FOIA, EIR and Parliamentary Business.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 528 
OFFICIAL SENSITIVE - COMMERCIAL

2.6 The Authority reserves the right to request further information or an


amendment to the reports provided under paragraph 2.5 if it considers the reports to
be incomplete and/or inaccurate. Such request shall be made within a reasonable time
after the relevant monthly meeting.

2.7 Notwithstanding the contents of the reports provided under paragraph 2.5,
each Party shall be entitled to notify the other Party of additional items to be discussed
at each meeting of the Monitoring Group, provided that such notice is given at least
five Business Days before the appropriate meeting.

3. [NOT USED]

4. GENERAL SCHEME OF GOVERNANCE

4.1 The Named Contractors shall be responsible for the overall direction,
supervision and management of DIDO in accordance with the Infrastructure
Implementation Plan, which shall align with the Authority’s Command Plan, Control
Totals and Footprint Strategy.

4.2 The interrelationship of the Plans is set out in the diagram below. In the event
of inconsistency between the Plans, the Plan set out higher in the diagram shall prevail
to the extent of the inconsistency.]

Command Plan 

Footprint Strategy 

Infrastructure Implementation Plan  

Plan 
Prepared by the Authority with support from DIDO.

Plan 
Prepared by DIDO for approval by the Authority.

4.3 The Contractor shall be entitled to participate in the following:

(a) the Owners Strategy Board (chaired by DG HOCS) which shall provide
strategic direction, support and challenge to the Monitoring Group and DIDO;
and

(b) the Infrastructure Joint Committee (chaired by DCDS(MilCap)), which shall


be responsible for understanding and prioritising the Head Office and Front
 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 529 
OFFICIAL SENSITIVE - COMMERCIAL

Line Command demands for infrastructure, aligning infrastructure planning


and opportunities against other capability investment planning.

4.4 The extent to which the Named Contractors will be entitled to participate in
the Owners Strategy Board and the Infrastructure Joint Committee shall be established
in terms of reference to be determined.

5. MATTERS RESERVED FOR DECISION OF THE AUTHORITY

5.1 The Authority, represented by DIGA (which the Authority shall procure shall
remain part of the Authority throughout the Contract Period), shall be solely
responsible for the following activities, and each Party shall, so far as it is legally
able, exercise all powers (direct or indirect) available to it to procure that no action or
decision is taken or purported to be taken by DIDO in respect of the following
activities:

(a) approving any extension to the Contract Period by up to one year in


accordance with Clause 2.4 of the Contract;

(b) exercising an Option in accordance with Clause 5 of the Contract;

(c) appointing the Authority Representative in accordance with Clause 6.5 of the
Contract;

(d) establishing DIGA and DIDO within the Mobilisation Period;

(e) setting DIDO’s strategy, including by development of the Command Plan and
Control Totals;

(f) approving the Infrastructure Implementation Plan on an annual basis in


accordance with the process set out in Clause 12 of this Contract (including
approving variations to the Payment Mechanism and/or Base Case required as
a result of any changes to the Infrastructure Implementation Plan in
accordance with Clauses 12.24(d)(ii) or (iii);

(g) approving Funding Initiatives in accordance with Clause 13 of this Contract;

(h) monitoring the performance of both the Contractor and DIDO under this
Contract in accordance with Clause 14 of the Contract;

(i) provision of the Authority Dependencies;

(j) approving additional or replacement Named Contractors and/or Contractor


Key Personnel in accordance with Clause 17.7 or 17.9 of the Contract;

(k) approving any amendments to the Base Case in accordance with Clause 18 of
the Contract;

(l) paying the Contractor sums due to it under this Contract in accordance with
Clause 19 of the Contract;

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 530 
OFFICIAL SENSITIVE - COMMERCIAL

(m) approving any Changes to this Contract in accordance with Schedule 12 of the
Contract;

(n) retendering of the Contract;

(o) approving Sub-Contractors, including the terms of the Sub-Contracts in


accordance with Clause 39.8 of the Contract;

(p) approving DIDO entering into any contracts on behalf of the Secretary of
State, save where the Contractor has been granted appropriate authority
pursuant to a Letter of Delegation and that all required approvals have been
granted in accordance with Authority Policy Rules and Guidance;

(q) approving amendments to the Authority Policy Rules and Guidance in


accordance with Schedule 6; and

(r) issuing Letter(s) of Delegation to Named Contractors; and

(s) giving or withholding consent or approval as required by the terms of this


Contract.

5.2 If the Authority’s approval is required for any of the activities referred to in
this Contract, the Contractor shall procure that the Contractor’s Representative (on
behalf of the Named Contractors) seeks approval from the Authority in accordance
with the relevant terms of the Contract. Where no approval process is required for an
activity listed above, the Contractor shall procure that the Contractor’s Representative
complies with the following process:

(a) the Contractor’s Representative shall give written notice to the Authority,
identifying itself as a notice served pursuant to this Schedule 5, and containing
such information as is reasonably necessary for the Authority to consider the
matter contained in the notice;

(b) within five Business Days of receipt of a notice pursuant to paragraph 5.2(a),
or such other period as may be agreed between the Parties, the Authority shall
give written notice to the Contractor’s Representative stating:

(i) the Authority’s consent to the matter contained in the notice; or

(ii) the Authority’s refusal to consent to the matter contained in the notice,
including where possible the reasons for such refusal;

(c) the Authority may, at any time, request further information from the
Contractor to allow it to consider the matter contained in the notice.

6. OBLIGATIONS OF THE CONTRACTOR AND DIDO

6.1 The Contractor shall procure that DIDO does not:

(a) make any political donations; or

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 531 
OFFICIAL SENSITIVE - COMMERCIAL

(b) make any non-commercial payments, except where the Authority has given its
prior written approval.

6.2 The Contractor shall procure that DIDO:

(a) provides adequate and sufficient management information to the Authority, to


allow the Authority to undertake performance monitoring of DIDO;

(b) provides to the Authority any documents provided to the Monitoring Group;

(c) has due regard to relevant Authority Policy Rules and Guidance when
tendering for any goods or services; and

(d) provides such assets, services, advice or assistance as is required to ensure that
the Authority can comply fully and promptly with any function or obligation
imposed on it by virtue of any statutory requirement (which includes any and
all legislation, statutes, statutory instruments, orders, rules, regulations or other
subordinate legislation whether in force or enacted as at the date of this
contract and any amendment, variation, consolidation, extension or
replacement of such matters from time to time, whether before or after the date
of this contract).

6.3 Nothing in this Schedule 5 shall have effect so as to require the Contractor or
DIDO to take any action or omit to take any action where such action or omission
would, in the reasonable opinion of the Contractor, give rise to:

(a) criminal liability on the part of the Contractor or DIDO; or

(b) any other liability for breach of any statutory or common law or regulatory
duty or requirement.

6.4 The Contractor shall procure that DIDO keeps under review potential
opportunities to implement the Ministerial mandate described in the Memorandum of
Understanding between the Ministry of Defence and the Cabinet Office in respect of
common goods and services dated 29 April 2014 (details of such Ministerial mandate
to be provided by the Authority to the Contractor as soon as reasonable practicable).

7. EHS DUTY HOLDER CONSTRUCT

7.1 The DIO Duty Holder Construct (or such replacement Authority policy, rule
or procedure established from time to time in accordance with Schedule 6) shall apply
to DIDO in respect of any Regulatory Requirement under Environmental Legislation
which imposes a duty on DIDO, provided that for the purposes of that DIO Duty
Holder Construct:

(a) from time to time, the Authority shall identify to the Contractor a person
within the Authority who will act as the Senior Duty Holder; and

(b) the Contractor shall ensure that at all times during the term of the Contract, a
Contractor employee who is suitably qualified and experienced, and approved

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 532 
OFFICIAL SENSITIVE - COMMERCIAL

in advance by the Authority, is identified to the Authority and acts as the EHS
Operating Duty Holder.

7.2 Subject always to the provisions of paragraph 7.1 above, the Contractor shall
procure that the EHS Operating Duty Holder complies with the requirements of an
Operating Duty Holder identified in the DIO Duty Holder Construct in respect of
DIDO’s operations, or such replacement policy, rule or guidance established from
time to time in accordance with Schedule 6, including without limitation:

(a) complying with requirements in the DIO Duty Holder Construct to provide
reports to the Authority’s Senior Duty Holder; and

(b) procuring compliance by DIDO with any directions from the Authority’s
Senior Duty Holder issued in accordance with the DIO Duty Holder Construct.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 533 
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 6

AUTHORITY POLICY RULES AND GUIDANCE

1. GENERAL OBLIGATION

1.1 In accordance with Clause 9.1(k)(iv) of the Contract and subject to paragraph
8 of this Schedule 6, the Contractor shall procure that DIDO complies with all
Authority Policy Rules and Guidance, save where the Authority has granted a
derogation from compliance in accordance with this Schedule 6.

2. REVIEW EXERCISE

2.1 Within six months of the Effective Date, the Contractor shall procure that
DIDO carries out a review of the Authority Policy Rules and Guidance and provides a
report to the Authority identifying those Authority Policy Rules and Guidance which
are:

(a) set, owned and managed by entities other than the Authority;

(b) set, owned and managed by the Authority (other than DIDO); and

(c) set, owned and managed by DIDO.

2.2 If the Contractor or DIDO becomes aware of Authority Policy Rules and
Guidance throughout the Contract Period, which are not included in the report
produced pursuant to paragraph 2.1, the Contractor shall procure that DIDO:

(a) notifies the Authority of such policy or procedure; and

(b) updates the report produced pursuant to paragraph 2.1.

2.3 Unless a derogation from compliance is granted by the Authority in


accordance with this Schedule 6, the general obligation referred to in paragraph 1.1
shall apply to any Authority Policy Rules and Guidance.

3. AMENDMENTS TO AUTHORITY POLICY RULES AND GUIDANCE

3.1 Throughout the Contract Period, the Contractor shall procure that DIDO
proactively promotes the development of Authority Policy Rules and Guidance, and
makes proposals for improving them or withdrawing them as appropriate.

3.2 In order to request an amendment to, or withdrawal of, any Authority Policy
Rules and Guidance, the Contractor shall procure that DIDO submits a written
application to the Authority, providing such details as would reasonably be necessary
for the Authority to fully consider the proposed amendment or withdrawal.

3.3 Within 40 Business Days of receipt of a request for an amendment or


withdrawal pursuant to paragraph 3.2, the Authority shall consider the request in its
absolute discretion and provide written notice to DIDO that:
 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 534 
OFFICIAL SENSITIVE - COMMERCIAL

(a) the amendment or withdrawal is permitted, in which case the Authority may
state in the notice that the amendment or withdrawal is to take effect from a
certain date; or

(b) the amendment or withdrawal is not permitted.

4. NEW AUTHORITY POLICY RULES AND GUIDANCE

4.1 The Authority shall be entitled to create new Authority Policy Rules and
Guidance.

4.2 Where paragraph 4.1 applies, the Authority shall take reasonable steps, where
appropriate and practicable, to give DIDO advance notice of any new Authority
Policy Rules and Guidance and to allow DIDO to make representations on any new
Authority Policy Rules and Guidance before they come into effect. The Authority
shall in any event take reasonable steps to draw any new Authority Policy Rules and
Guidance to DIDO’s attention following such Authority Policy Rules and Guidance
coming into effect.

5. DEROGATIONS FROM COMPLIANCE

5.1 DIDO may apply for a derogation from compliance with any Authority Policy
Rules and Guidance by sending a written request to the Authority, together with
details as to the reasons for the derogation requested.

5.2 The Authority shall have absolute discretion as to whether or not to grant any
derogation. Where requested by the Authority, the Contractor shall procure that DIDO
provides additional information supporting the request for a derogation.

5.3 Derogations may be granted on a temporary or permanent basis. A temporary


derogation shall state the date by which compliance with the relevant policy or
procedure must be achieved.

6. REGISTER OF AMENDMENTS, WITHDRAWALS AND DEROGATIONS

6.1 The Contractor shall procure that DIDO maintains:

(a) a register of amendments to, or withdrawals of, any Authority Policy Rules
and Guidance made in accordance with this Schedule 6, which shall record the
basis upon which it was determined that the amendment or withdrawal should
be permitted; and

(b) a register of derogations granted in accordance with this Schedule 6, which


shall record the basis upon which it was determined that the derogation should
be granted.

7. DISPUTES

7.1 The Authority’s authorisation, confirmation or refusal to authorise:

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 535 
OFFICIAL SENSITIVE - COMMERCIAL

(a) an amendment to, or withdrawal of, any Authority Policy Rules and Guidance;
or

(b) the grant of a derogation against any Authority Policy Rules and Guidance,

shall be final and binding on the Contractor and DIDO, and shall not be challenged
nor referred to dispute resolution, except upon the grounds that the procedures of this
Schedule 6 have not been followed.

7.2 For the avoidance of doubt, any decision of the Authority referred to in
paragraph 7.1 shall be binding upon the Contractor and DIDO pending any
determination made in accordance with the dispute resolution procedure.

8. CONTRACTOR RELIEF FOR DIDO NON-COMPLIANCE

8.1 For the period starting on the Commencement Date until a date falling six
months after the end of the Transformation Period the Authority shall grant the
Contractor relief from the Contractor’s obligation to procure that DIDO complies at
all times with Clause 9.1(k) of the Contract where there is reasonable evidence that
there is a corresponding non-compliance of any of the Sub-Clauses 9.1(k) (i) to (v)
which can reasonably be shown to have pre-dated the Effective Date, provided that
the Contractor:

(a) promptly upon becoming aware identifies such a non-compliance and notifies
the Authority of such non-compliance at the next Monitoring Group meeting
(and in any case identifies all such non-compliances prior to the end of the
Transformation Period); and

(b) where the non-compliance relates to:

(i) Sub-Clauses 9.1(k) (iv) and (v), the Authority may, in its absolute
discretion:

(A) grant an on-going derogation in accordance with paragraph 5;


and/or

(B) require the Contractor to propose an outline rectification plan to


address non-compliance within a timescale to be agreed
between the Parties; or

(ii) Sub-Clauses 9.1(k) (i) to (iii), the Authority may, in its absolute
discretion:

(A) grant an on-going waiver of the Contractor’s obligation to


procure DIDO complies with such item; and/or

(B) require the Contractor to propose an outline rectification plan to


address the non-compliance within a timescale to be agreed
between the Parties.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 536 
OFFICIAL SENSITIVE - COMMERCIAL

8.2 If the Contractor has complied with its obligations pursuant to paragraph 8.1
above then:

(a) the Authority shall not be entitled to exercise its right to terminate this
Contract for Contractor Default under Clause 34.10; and/or

(b) to the extent that the Contractor’s failure to comply with its obligations under
the Contract arises as a result of such non-compliance any such failure shall be
deemed not to have occurred so that the Contractor shall be entitled to
payment under the Contract as if there has been no such failure.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 537 
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 7

PAYMENT MECHANISM

Part A – Introduction and Definitions

1. INTRODUCTION

1.1 The payment due to the Contractor under this Contract is made up of a number
of elements described in this Schedule 7, which are as follows:

(a) a Transformation Fee, determined in accordance with Part B;

(b) a Management Fee, determined in accordance with Part C;

(c) an Operational Cash RDEL Incentive Fee, determined in accordance with


paragraph 3.1 of Part D (including both a sustainable and non-sustainable
element);

(d) a Utilities Cash RDEL Incentive Fee, determined in accordance with


paragraph 4.1 of Part D (including both a sustainable and non-sustainable
element);

(e) a Capital Projects Incentive Fee, determined in accordance with paragraph 5.1
of Part D; and

(f) a Disposals Incentive Fee, determined in accordance with paragraph 6 of


Part D.

1.2 A number of adjustments and deductions are made from the incentive fee
elements referred to in paragraph 1.1(c) to (f) above (and in the case of Service
Deductions, from the Management Fee also), which are:

(a) a Balancing Payment, determined in accordance with paragraph 7 of Part D;


and

(b) Service Deductions, determined in accordance with Part E.

1.3 For the purposes of this Schedule 7 any reference to:

(a) the “first to third Quarters” shall be deemed to exclude any Quarter which is
the last Quarter of this Contract; and

(b) a “fourth Quarter” shall be deemed also to refer to any Quarter which is the
last Quarter of this Contract.

2. DEFINITIONS

2.1 In this Schedule 7, unless the context otherwise requires:

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 538 
OFFICIAL SENSITIVE - COMMERCIAL

Actual Operational Costs means in respect of any Financial Year the sum of all
Operational Costs evidenced by the Contractor in
accordance with Clause 24 as having been properly
incurred by DIDO during such Financial Year plus an
adjustment amount equal to the value of all Non-
Sustainable Operational Cash RDEL Savings realised
in such Financial Year

Actual Operational means in respect of any Operational Overspend Year


Overspend the:

(a) Audited Actual Operational Costs for such


Operational Savings Year; less

(b) Operational Cash RDEL Financial Baseline


(adjusted in accordance with paragraph 8.1 of
Part D) for such Operational Savings Year

Actual Operational Saving means in respect of any Operational Savings Year the:

(a) Operational Cash RDEL Financial Baseline


(adjusted in accordance with paragraph 8.1 of
Part D) for such Operational Savings Year; less

(b) Audited Actual Operational Costs for such


Operational Savings Year

Actual Utilities Costs means in respect of any Financial Year the sum of all
Utilities Costs evidenced by the Contractor in
accordance with Clause 24 as having been properly
incurred by DIDO during such Financial Year plus an
adjustment amount equal to the value of all Non-
Sustainable Utilities Cash RDEL Savings realised in
such Financial Year

Actual Utilities Overspend means in respect of any Utilities Overspend Year the:

(a) Audited Actual Utilities Costs for such Utilities


Savings Year; less

(b) Utilities Cash RDEL Financial Baseline


(adjusted in accordance with paragraph 8.1 of
Part D) for such Utilities Savings Year

Actual Utilities Saving means in respect of any Utilities Savings Year the:

(a) Utilities Cash RDEL Financial Baseline


(adjusted in accordance with paragraph 8.1 of
Part D) for such Financial Year; less

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 539 
OFFICIAL SENSITIVE - COMMERCIAL

(b) Audited Actual Utilities Costs for such


preceding Financial Year

Amortised Voluntary Early has the meaning given in paragraph 3.3 of Part D
Release Costs

Applicable Benchmark means in respect of any Capital Project the standard


against which a Capital Project of that particular type
may be compared, including a construction cost
benchmark by geography for each type of construction
involved in such Capital Project

Assumptions at Authority means the DIGA Key Assumptions


Risk

Audited Accounts means in respect of any Financial Year the DIDO


books of account for such Financial Year as audited by
the National Audit Office and, following Incorporation,
in respect of DIDO Ltd by the appointed auditors

Audited Actual Operational means, in respect of any Financial Year, the sum of all
Costs Operational Costs actually incurred in that Financial
Year as evidenced by the relevant Audited Accounts
plus an adjustment amount equal to the value of all
Non-Sustainable Operational Cash RDEL Savings
realised in such Financial Year

Audited Actual Projects means, in respect of any Financial Year, the sum of all
Costs Projects Costs actually incurred in that Financial Year
as evidenced by the relevant Audited Accounts

Audited Actual Utilities means, in respect of any Financial Year, the sum of all
Costs Utilities Costs actually incurred in that Financial Year
as evidenced by the relevant Audited Accounts plus an
adjustment amount equal to the value of all Non-
Sustainable Utilities Cash RDEL Savings realised in
such Financial Year

Balancing Payment means the payment determined in accordance with


paragraph 7 of Part D

Budgeted Cost means in respect of any Capital Project the costs


budgeted in the final approved business case or
approved review note for such Capital Project as to be
incurred by DIDO in achieving successful completion
of the same (including any amounts included in such
budget by way of provision against contingent risks)

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 540 
OFFICIAL SENSITIVE - COMMERCIAL

Cap Increase Request has the meaning given in paragraph 9.2 of Part D

Capital Project means a capital works project identified in the


Infrastructure Implementation Plan

Capital Projects Incentive means the fee payable by the Authority to the
Fee Contractor determined in accordance with paragraph
5.1 of Part D

Capital Projects Incentive means the Capital Projects Incentive Percentage


Fee Cap multiplied by the sum of:

1.15 times the Projects Baseline (i.e. 15% above) plus

1.0 times any CDEL expenditure related to disposal


proceeds used for re-provisioning work

Capital Projects Incentive means 0.85%


Percentage

Capital Projects Service means the amounts set out in paragraph 5.1 of Part D
Deductions under the CPSDyn abbreviation

Cash RDEL means all current expenditure such as pay, contractual


and other running costs but excluding depreciation,
amortisation or impairment charges in respect of non
current assets which are included in Non Cash RDEL

CP Baseline means in respect of any Capital Project a scope of


work, Budgeted Cost, User Acceptance Criteria and a
schedule of activities required in order to successfully
complete such Capital Project each supported by a
work breakdown structure and cost forecast sufficient
to support analysis on an “earned value management”
basis such that going forward work and costs can be
tracked against such detailed schedule of activities in
order to identify and measure time and cost shortfalls
or discrepancies as they arise

Disposal Costs means in respect of any Estate Disposal any and all
costs expenses and liabilities incurred by the Authority
(including DIGA and/or DIDO) as a result of or in
relation to such Estate Disposal, including but not
limited to costs in relation to the:

(a) advertising, marketing and publicising of the


Estate Disposal;

(b) drafting, negotiation and execution of any


 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 541 
OFFICIAL SENSITIVE - COMMERCIAL

documents or agreements;

(c) the preparation and issue of any report on or


certificate of title or building survey, the
obtaining of any land or building quality or
environmental assessment and of searches and
enquiries of public bodies and other third
parties, and the commissioning of any other
vendor due diligence, appraisal or feasibility
report (whether or not made available to any
third party);

(d) obtaining of or making of appeals in relation to


any permits, licences, permissions, consents,
approvals, certificates and authorisations
(whether statutory or otherwise);

(e) cancellation, variation or registration of any


land or property rights or title;

(f) services of professional advisers including but


not limited to valuers, property or sales agents
and surveyors, measurement, building and
quantity surveyors, legal, financial technical
and other advisers;

(g) exercise of any legal rights or remedies


including costs of enforcement;

(h) making safe or securing any asset, structure or


site including by means of private security
equipment or personnel;

(i) additional RDEL expenditure (other than


Rebasing Cash RDEL and RDEL expenditure
relating to the Existing Disposals Programme);

(j) additional CDEL expenditure (other than


Rebasing CDEL and CDEL expenditure
relating to the Existing Disposals Programme);

(k) any expenditure incurred with a view to


enhancing the value of the Estate Asset which
is the subject of the relevant Estate Disposal;
and/or

(l) incurral of any liability in relation to any Tax


(including the costs of assessing or disputing
any such liability),

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 542 
OFFICIAL SENSITIVE - COMMERCIAL

in each case arising by reason of the relevant Estate


Disposal

Disposals Incentive Fee means the fee payable by the Authority to the
Contractor determined in accordance with paragraph 6
of Part D

Disposals Incentive Fee means 1.4 times the projected Disposals Incentive Fee
Cap for such year, calculated using the Disposals Incentive
Fee tiered banding/percentages set out in the table
contained in paragraph 6.3 of Part D and the total net
disposal receipts targeted by the Authority for that
year, as set out in the Infrastructure Implementation
Plan

Disposal Proceeds means the proceeds received or receivable by DIDO


which are:

(a) in respect of an Estate Disposal;

(b) accounted for in accordance with International


Accounting Standard 18;

(c) irrevocable and unconditional,

which proceeds shall:

(d) include any amount of clawback and overage


payments where and to the extent such
payments are irrevocably and unconditionally
receivable; and

(e) exclude in each case any amounts that on


completion of an individual Estate Disposal
would create a debtor for DIDO in an amount
greater than £20 million which debtor would be
due for payment more than one calendar year
from the date of such completion (provided that
such amounts shall cease to be so excluded
once irrevocably and unconditionally received)

Disposal Proceeds means the amounts set out in paragraph 6.3 of Part D
Percentage

Evidence Letter means the letter (and, where appropriate, report) sent
by the Contractor to the Authority in accordance with
Clause 19.2

Existing Disposals means the list of existing sites and projected disposal
dates for sites already identified by the Authority for
 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 543 
OFFICIAL SENSITIVE - COMMERCIAL

Programme disposal prior to the Commencement Date and as


detailed in the Footprint Strategy

Excess Deductions has the meaning given in paragraph 3.4 of Part C

Fee Cap means each of the Operational Cash RDEL Incentive


Fee Cap, Utilities Cash RDEL Incentive Fee Cap,
Capital Projects Incentive Fee Cap and Disposals
Incentive Fee Cap

Handover means in respect of any Capital Project that capital


works in relation to the built asset or assets comprising
such Capital Project have been completed (subject to
snagging) and that such asset or assets have been tested
against the applicable User Acceptance Criteria and
accepted into operation and handed over for use by end
users (whether or not actually used by such users)

Index Corrected Utilities means the Utilities Cash RDEL Financial Baseline as
Cash RDEL Financial indexed according to the following Department of
Baseline Energy & Climate Change publication:
https://www.gov.uk/government/publications/quarterly-
energy-prices using Table 3.1.3 “Annual prices of
fuels purchased by manufacturing industry” in the UK
for a “Large” consumer for each of the relevant fuel
types

KPI Table has the meaning given in paragraph 2.2(a) of Part E

Main Gate means the review and approval process to which all
Capital Projects (among other things) are subject,
commonly referred to as “Main Gate”;

Management Fee means the fee payable to the Contractor for providing
DIDO’s management function as such fee is profiled at
the date hereof and as specified in paragraph 1.1 of
Part C

Net Disposal Proceeds means in respect of any Estate Disposal the Disposal
Proceeds less the Disposal Costs

Net Operational Savings means in respect of any Financial Year:

(a) the sum of the:

(i) Operational Cash RDEL Financial


Baseline (adjusted in accordance with
paragraph 8.1 of Part D) for such
Financial Year; less

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 544 
OFFICIAL SENSITIVE - COMMERCIAL

(ii) the Net Prior Year Operational Savings


as calculated in respect of each previous
Financial Year which was an
Operational Savings Year; less

(b) the sum of:

(i) Audited Actual Operational Costs for


such Financial Year; less

(ii) Voluntary Early Release Costs incurred


by DIDO (if any) in such Financial Year

Net Operational Savings means in respect of any Financial Year the additional
Delta amount of Net Operational Savings which would have
been achieved but for the Net Prior Year Operational
Savings in such Financial Year being a negative
amount

Net Prior Year Operational has the meaning given in paragraph 3.1 of Part D
Savings

Net Prior Year Utilities has the meaning given in paragraph 4.1 of Part D
Savings

Net Utilities Savings means in respect of any Financial Year:

(a) the sum of the:

(i) Index Corrected Utilities Cash RDEL


Financial Baseline for such Financial
Year; less

(ii) Net Prior Year Utilities Savings as


calculated in respect of each previous
Financial Year which was a Utilities
Savings Year; less

(b) the Audited Actual Utilities Costs for such


Financial Year

Net Utilities Savings Delta means in respect of any Financial Year the additional
amount of Net Utilities Savings which would have
been achieved but for the Net Prior Year Utilities
Savings in such Financial Year being a negative
amount

Non Cash RDEL means all depreciation, amortisation and impairment


charges in respect of non current assets

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 545 
OFFICIAL SENSITIVE - COMMERCIAL

Non-Compliant Project means a Capital Project which has achieved Handover


despite having failed (either wholly or in part) to
satisfy all of the User Acceptance Criteria for such
Capital Project

Non-sustainable means a discrete and non-sustained saving of


Operational Cash RDEL Operational Cash RDEL, for example a rent free period
Savings at the commencement of a lease renewal

Non-sustainable Utilities means a discrete and non-sustained saving of Utilities


Cash RDEL Savings Cash RDEL, for example a provision of free energy
supply at the commencement of a new supply
arrangement

On-boarded means the completion of the process through which


DIDO reviews “in-flight” Capital Works Projects
against reported actual costs and reported schedule
accomplishments, validates CP Baselines, adjusts
budgeted cost, adjusts budgeted schedules and adjusts
End User Acceptance Criteria (where necessary).

Operational Cash RDEL means the payment specified as such in, and
Balancing Payment determined in accordance with, paragraph 7 of Part D

Operational Cash RDEL means in respect of any Financial Year the Cash RDEL
Financial Baseline expenditure identified as such in the Base Case and as
anticipated to be incurred by DIDO in such Financial
Year, and excluding any amounts included within the
Utilities Cash RDEL Financial Baseline

Operational Cash RDEL means the fee payable by the Authority to the
Incentive Fee Contractor determined in accordance with paragraph
3.1 of Part D

Operational Cash RDEL means an amount which in any given Financial Year is
Incentive Fee Cap 1.19 times the Operational Cash RDEL Incentive Fee
as projected for that year

Operational Costs means all Cash RDEL expenditure incurred by DIDO


which, were it included in the Base Case, would
constitute part of the Operational Cash RDEL
Financial Baseline

Operational Overspend means any Financial Year in which Audited Actual


Year Operational Costs were greater than the Operational
Cash RDEL Financial Baseline (adjusted pursuant to
paragraph 8.1 of Part D)

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 546 
OFFICIAL SENSITIVE - COMMERCIAL

Operational Savings means OSPyn in paragraph 3.1 in Part D


Percentage

Operational Savings Year means any Financial Year in which the Audited Actual
Operational Costs were less than the Operational Cash
RDEL Financial Baseline (adjusted pursuant to
paragraph 8.1 of Part D)

Performance Levels means performance levels set out in “Performance


Bands” in Table 2 in Appendix 2 to this schedule

Portfolio CPI means in respect of any Quarter the number determined


by dividing:

(a) the cumulative Budgeted Cost for all work


actually performed up to the end of that Quarter
in delivery of all On-boarded Capital Projects;
by

(b) the cumulative total cost actually incurred by


DIDO for all work actually performed up to the
end of that Quarter in delivery of all On-
boarded Capital Projects

Portfolio SPI means in respect of any Quarter the number determined


by dividing:

(a) the cumulative Budgeted Cost for all work


actually performed up to the end of that Quarter
in delivery of all Capital Projects which have
been On-boarded; by

(b) the cumulative Budgeted Cost for the work


scheduled to have been performed up to the end
of that Quarter in delivery of such On-boarded
Capital Projects (whether or not actually
performed) 

Projected Operational means in respect of any Financial Year an amount


Savings Amount equal to the:

(a) Operational Cash RDEL Financial Baseline for


such Financial Year less the Net Prior Year
Operational Savings for such Financial Year;
less

(b) Operational Costs forecast in the Infrastructure


Implementation Plan as to be incurred in such
Financial Year plus an adjustment amount

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 547 
OFFICIAL SENSITIVE - COMMERCIAL

equal to the value of all Non-Sustainable


Operational Cash RDEL Savings forecast as to
be realised in such Financial Year

Projected Utilities Savings means in respect of any Financial Year an amount


Amount equal to the:

(a) Utilities Cash RDEL Financial Baseline for


such Financial Year less the Net Prior Year
Utilities Savings for such Financial Year; less

(b) Utilities Costs forecast in the Infrastructure


Implementation Plan as to be incurred in such
Financial Year plus an adjustment amount
equal to the value of all Non-Sustainable
Utilities Cash RDEL Savings forecast as to be
realised in such Financial Year

Projects Baseline means in respect of any Financial Year the CDEL


expenditure identified as such in the Base Case and as
anticipated to be incurred by DIDO in such Financial
Year

Projects Costs means all CDEL expenditure incurred by DIDO

Rebasing CDEL means CDEL expenditure identified as such in the


Base Case and incurred in relation to the rebasing of
personnel from Germany and any CDEL expenditure
not in the Base Case but used to rebase personnel from
any location to another location and funded through
disposal proceeds

Rebasing Cash RDEL means RDEL expenditure identified as such in the


Base Case and incurred in relation to the rebasing of
personnel from Germany and any RDEL expenditure
not in the Base Case but used to rebase personnel from
any location to another location and funded through
disposal proceeds

Required CPI means for each Quarter which falls within the
Transformation Period an Portfolio CPI of at least 0.95
and for each Quarter that does not fall within the
Transformation Period an Portfolio CPI of at least 1.0

Required SPI means for each Quarter which falls within the
Transformation Period an Portfolio SPI of at least 0.95
and for each Quarter that does not fall within the
Transformation Period an Portfolio SPI of at least 1.0

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 548 
OFFICIAL SENSITIVE - COMMERCIAL

Retention has the meaning given in the relevant part of paragraph


3.1 of Part D

Service Deduction means in respect of any Quarter the amount calculated


in accordance with paragraph 2 of Part E

Service Deduction Table has the meaning given in paragraph 2.2(b) of Part E

Transformation Fee means the amounts payable by the Authority to the


Contractor, as determined in accordance with Part B

Transformation Milestone means those milestones which are identified in the


Transformation Plan as collectively comprising a
“Transformation Requirement”

Transformation Milestone has the meaning given in Clause 4.6(a)


Completion Certificate

Transformation Milestone means in respect of each Transformation Milestone the


Fee amount set out against such Transformation Milestone
in the column headed “Transformation Milestone Fee”
of the table at paragraph 1.1 of Part B

Transformation has the meaning given in Clause 4.8


Requirement Completion
Certificate

True Cost Variance has the meaning given in paragraph 8.1 of Part D

User Acceptance Criteria means the criteria agreed at Main Gate as meeting end
user requirements for a built asset or assets comprising
a Capital Project and against which the quality of such
built asset or assets are measured

Utilities Cash RDEL means the payment specified as such in, and
Balancing Payment determined in accordance with, paragraph 7 of Part D

Utilities Cash RDEL means the fee payable by the Authority to the
Incentive Fee Contractor determined in accordance with paragraph
4.1 of Part D

Utilities Cash RDEL means the amount which in any given Financial Year is
Incentive Fee Cap a multiple of 1.39 times the Utilities Cash RDEL
Incentive Fee as projected for that year

Utilities Cash RDEL means in respect of any Financial Year the Utilities
Financial Baseline Costs identified as such in the Base Case and as
anticipated to be incurred by DIDO in such Financial
Year

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 549 
OFFICIAL SENSITIVE - COMMERCIAL

Utilities Costs means all Cash RDEL expenditure incurred by DIDO


in relation to the procuring of the supply of each Utility
Service to the Estate where it is accounted for within
the Utilities Cash RDEL Financial Baseline under the
Utilities Sub-strategy classification, i.e. excluding
Aquatrine PFI

Utilities Overspend Year means any Financial Year in which Audited Actual
Utilities Costs were greater than the Utilities Cash
RDEL Financial Baseline (adjusted pursuant to
paragraph 8.1 of Part D)

Utilities Savings means the amounts set out in paragraph 4.1(b) of Part
Percentage D under the USPyn abbreviation

Utilities Savings Year means any Financial Year in which the Audited Actual
Utilities Costs were less than the Utilities Cash RDEL
Financial Baseline (adjusted pursuant to paragraph 8.1
of Part D)

Voluntary Early Release means any costs incurred by DIDO and/or the
Costs Authority as a result of the release from employment of
persons employed by DIDO under and in accordance
with the Authority’s “voluntary early release scheme”
provided in each case that such release was carried out
in line with all relevant Authority Policy Rules and
Guidance

2.2 In this Schedule 7:

(a) any reference to a “Part” is to the relevant part of this Schedule 7; and

(b) unless otherwise stated, any reference to a “paragraph” is to the relevant


paragraph within that Part.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 550 
OFFICIAL SENSITIVE - COMMERCIAL

Part B – Transformation Fee

1. TRANSFORMATION FEE PROFILE

1.1 The Transformation Milestone Fee in respect of each Transformation


Milestone shall be:

Transformation Milestone Fee Table (£s excluding VAT)


Milestone / Date MS1 MS2 MS3 MS4 MS5 MS6 Total

TR1 Footprint Strategy n/a 1,973,431 628,313 628,313 471,129 471,129 4,172,316

TR2 Disposals – Existing DSG programme n/a n/a 194,699 n/a n/a n/a 194,699

Prepare business cases for


TR3 n/a n/a n/a n/a n/a 438,035 438,035
Whiteboard sites

TR4 Disposals – White Board sites n/a n/a n/a n/a n/a 25,512 25,512

Soft FM future contracting strategy


TR5 26,789 133,947 214,315 428,630 n/a 817,076 1,620,758
HESTIA enhancements

Programme & Projects: collate data


TR6 and recommend strategy for delivery of n/a n/a 234,419 998,359 n/a 285,450 1,518,228
capital works.
Develop and implement a workforce
TR7 plan for the IIP (enhanced from EOM) n/a 1,161,769 n/a 868,643 17,510 17,510 2,065,433
with regard to TUPE

Total 26,789 3,269,147 1,271,747 2,923,945 488,640 2,054,713 10,034,981

1.2 The target dates for achieving the Transformation Milestone and high level
requirements are as follows (with MS1 to MS6 inclusive being as set in the
immediately following table):

Transformation Milestone target dates table

MS1 The last day of the third month after the Effective Date.

MS2 The last day of the sixth month after the Effective Date

MS3 The last day of the ninth month after the Effective Date.

MS4 The last day of the twelfth month after the Effective Date.

MS5 The last day of the fifteenth month after the Effective Date.

MS6 The last day of the Transformation Period.

Transformation Milestone requirements table (clause 4 refers)

1.3 The Transformation Milestone requirements table and the Test On Completion
table (which shall comprise test, evaluation & acceptance points) for each
Transformation Milestone is contained within Part 2 of Schedule 3 along with a
detailed description of activities.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 551 
OFFICIAL SENSITIVE - COMMERCIAL

These Test Points do not take precedence over the more detailed descriptions set out
in the Short-term Transformation plan within Schedule 3, Part 2 - they are instead
intended to act as interim test points leading towards the final ultimate test on the last
row of the Test on Completion table.

2. TRANSFORMATION MILESTONE FEES

2.1 Upon issue by the Authority of a Transformation Milestone Completion


Certificate pursuant to Clause 4.6(a), the Contractor shall be entitled to submit to the
Authority an Evidence Letter (for the purposes of which, the relevant evidence shall
be the Transformation Milestone Completion Certificate) in accordance with Clause
19.2 immediately for the Transformation Milestone Fee for the relevant
Transformation Milestone.

2.2 Except where all Transformation Milestones have been accepted for a
Transformation Requirement, where the Contractor does not receive a Transformation
Requirement Completion Certificate in respect of any Transformation Requirement by
the date of expiry of the Transformation Period, the Authority shall be entitled at its
election either to:

(a) deduct an amount equal to 50% of all the Transformation Milestone Fees
previously paid to the Contractor in respect of such Transformation
Requirement (the Applicable Deduction); or

(b) commission a third party to deliver such Transformation Requirement in


which case the Authority shall be entitled to deduct an amount equal to the
lower of the Applicable Deduction and the combination of the reasonable
actual and forecast additional costs incurred by the Authority as a result of the
commissioning of such third party to deliver such Transformation
Requirement,

in each case from subsequent monthly instalments of Management Fee or the


subsequent Quarterly Payments (as applicable).

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 552 
OFFICIAL SENSITIVE - COMMERCIAL

Part C - Management Fee

1. MANAGEMENT FEE

1.1 Subject to indexation in accordance with paragraph 1.2 below, the


Management Fee shall be as set out below and shall be payable in a single instalment
during the period to the Effective Date and in monthly instalments for each 12 month
period from the Effective Date thereafter in accordance with paragraphs 3.1 and 3.2
respectively:

Comments
Y Annual £ Monthly £
Year End
ea Excluding Excluding
Date
r VAT VAT
Period to
the One off payment on the Effective
0 3,066,606 3,066,606
Effective Date for mobilisation
Date
12 months
from but
not 12 monthly equal instalments
1 including 11,248,156 937,346
the
Effective
Date
12 months
from but
not
including 12 monthly equal instalments
2 the first 9,309,110 775,759
anniversary
of the
Effective
Date
12 months
from but
not
including 12 monthly equal instalments
3 the second 7,296,513 608,043
anniversary
of the
Effective
Date
12 months
from but
12 monthly equal instalments
not
4 6,051,832 504,319
including
the third
anniversary
 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 553 
OFFICIAL SENSITIVE - COMMERCIAL

of the
Effective
Date
12 months
from but
not
including 12 monthly equal instalments
5 the fourth 4,695,722 391,310
anniversary
of the
Effective
Date
12 months
from but
not
including 12 monthly equal instalments
6 the fifth 3,980,780 331,732
anniversary
of the
Effective
Date
12 months
from but
not
including 12 monthly equal instalments
7 the sixth 3,553,716 296,143
anniversary
of the
Effective
Date
12 months
from but
not
including 12 monthly equal instalments
8 the seventh 3,553,716 296,143
anniversary
of the
Effective
Date
12 months
from but
not
including 12 monthly equal instalments
9 the eighth 3,553,716 296,143
anniversary
of the
Effective
Date

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 554 
OFFICIAL SENSITIVE - COMMERCIAL

The period
from but
not
Monthly equal instalments for
including
each month during such period
10 the ninth 3,044,233 338,248
anniversary
of the
Effective
Date
10 year
59,354,099
total

Up to three
months
from the Monthly equal instalments for
tenth Up to each of the first 3 months of the
11 338,248
anniversary 1,014,744 optional extension year for which
of the an option is granted
Effective
Date
Up to nine
months
from but
not
including
Monthly equal instalments for
the end of
Up to each of the last 9 months of the
11 the third 338,248
3,044,233 optional extension year for which
month from
an extension is granted
the tenth
anniversary
of the
Effective
Date
Extension
4,058,977
year total

1.2 The Management Fee shall be indexed for each year on the anniversary of the
Commencement Date by reference to the Consumer Price Index. Such indexation will
be derived by reference to (A/B) expressed as a percentage, where: A = the index for
the relevant month; and B = the index for the Contract signature month. The index in
each case will be the monthly CPI index.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 555 
OFFICIAL SENSITIVE - COMMERCIAL

2. [NOT USED]

3. PAYMENT OF THE MANAGEMENT FEE

3.1 The Management Fee for the period ending on the Effective Date shall be
payable in a single payment in accordance with the table above, which the Contractor
shall be entitled to include within an Evidence Letter on the Effective Date.

3.2 Following the Effective Date the Management Fee for each 12 month period
from the Effective Date shall be payable in monthly instalments in accordance with
the table set out in paragraph 1.1 above, each of which the Contractor shall be entitled
to include within the Evidence Letter for each month.

3.3 The Contractor shall not be entitled to include instalments of Management Fee
within any Evidence Letter:

(a) for any month falling within the Mobilisation Period, but rather shall include
such instalments within the Evidence Letter provided to the Authority in the
first month following the Mobilisation Period (together with the instalment for
such Payment Period); or

(b) subject to Clause 3.14, where any Contractor Mobilisation Activities have not
been satisfied or waived.

3.4 The Authority shall be entitled to deduct from the third monthly instalment of
Management Fee in any Quarter any amount of Service Deductions accruing in
respect of such Quarter. In the event the amount of Service Deductions in any month
are greater than the instalment of Management Fee payable in such month (such
excess sum, the Excess Deductions) the Authority shall be entitled to deduct an
amount equal to the Excess Deductions from subsequent monthly instalments of
Management Fee or the subsequent Quarterly Payments (as applicable).

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 556 
OFFICIAL SENSITIVE - COMMERCIAL

Part D – Quarterly Payment

1. QUARTERLY PAYMENT CONCEPTS

1.1 The Quarterly Payment consists of a number of incentive fee elements, each as
set out in this Part D. These are:

(a) an Operational Cash RDEL Incentive Fee, determined in accordance with


paragraph 3.1;

(b) a Utilities Cash RDEL Incentive Fee, determined in accordance with


paragraph 4.1;

(c) a Capital Projects Incentive Fee, determined in accordance with paragraph 5.1;
and

(d) a Disposals Incentive Fee, determined in accordance with paragraph 6.1.

1.2 A number of adjustments and deductions are made from the above incentive
fee elements. These are:

(a) Service Deductions (save for Capital Projects Incentive Fee), determined in
accordance with Part E; and

(b) a Balancing Payment, determined in accordance with paragraph 7.1.

1.3 Paragraph 2 below sets out the overall formula for determining the Quarterly
Payment for any given Quarter. Paragraphs 3 to 8 set out how each individual
component of the formula is calculated. Paragraph 9 sets out certain caps that apply to
the fees described in paragraph 1.1 above.

2. QUARTERLY PAYMENT FORMULA

2.1 The Quarterly Payment in respect of a particular Quarter “qn” shall be


calculated in accordance with the following formulae:

(a) for each Quarter other than the fourth Quarter in any Financial Year “yn”,

QPqn = (OCRIFqn + UCRIFqn + CPIFqn + DIFqn) - (SDqn + BPqn); and

(b) for the fourth Quarter in any Financial Year “yn”,

QPqn = ((OCRIFq4 - OCRIF∑qn1-3) + (UCRIFq4 - UCRIF∑qn1-3) + (CPIFq4 -


CPIF∑qn1-3) + DIFq4) - (SDq4 + BPqn),

where:

QPqn = the Quarterly Payment for the Quarter “qn”

OCRIFqn = the Operational Cash RDEL Incentive Fee for the Quarter “qn”,

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 557 
OFFICIAL SENSITIVE - COMMERCIAL

determined in accordance with paragraph 3.1

UCRIFqn = the Utilities Cash RDEL Incentive Fee for the Quarter ”qn”,
determined in accordance with paragraph 4.1

CPIFqn = the Capital Projects Incentive Fee for the first, second or third
Quarter (as the case may be) of the Financial Year ”yn”,
determined in accordance with paragraph 5.1

DIFqn = the Disposals Incentive Fee for the first, second or third Quarter
(as the case may be) of the Financial Year ”yn”, determined in
accordance with paragraph 6.1

SDqn = the aggregate of all applicable Service Deductions for the first,
second or third Quarter (as the case may be) of the Financial Year
”yn”, determined in accordance with Part E

OCRIFq4 = the Operational Cash RDEL Incentive Fee for the fourth Quarter
in the Financial Year “yn”, determined in accordance with
paragraph 3.1(b)

OCRIF∑qn1- = the aggregate of all amounts of Operational Cash RDEL Incentive


3 Fee payable in respect of the first to third Quarters of the
Financial Year “yn”

UCRIFq4 = the Utilities Cash RDEL Incentive Fee for the fourth Quarter in
the Financial Year “yn”, determined in accordance with paragraph
4.1(b)

UCRIF∑qn1- = the aggregate of all amounts of Utilities Cash RDEL Incentive Fee
3 payable in respect of the first to third Quarters in the Financial
Year “yn”

CPIFq4 = the Capital Projects Incentive Fee for the fourth Quarter in the
Financial Year “yn”, determined in accordance with paragraph 5.1

CPIF∑qn1-3 = the aggregate of all amounts of Capital Projects Incentive Fee


payable in respect of the first to third Quarters of the Financial
Year “yn”

DIFq4 = the Disposals Incentive Fee for the fourth Quarter in the Financial
Year “yn”, calculated in accordance with paragraph 6.1

SDq4 = the aggregate of all applicable Service Deductions for the fourth
Quarter in the Financial Year “yn”, determined in accordance with
Part E

BPqn = the Balancing Payment for the Quarter “qn” of the Financial Year
”yn”, determined in accordance with paragraph 7.1

provided that:
 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 558 
OFFICIAL SENSITIVE - COMMERCIAL

(c) where any Service Deductions are to be made in respect of any Quarter such
Service Deductions shall be made following the application of any relevant
Fee Cap(s); and

(d) the Incentive Fee in respect of any Quarter falling within the Mobilisation
Period shall be zero, and in respect of any Quarter falling in part within the
Mobilisation Period shall be reduced pro rata to that proportion of the relevant
Quarter as falls outside the Mobilisation Period.

2.2 The Contractor shall calculate the Quarterly Payment due for each Quarter and
shall be entitled to include such Quarterly Payment within the Evidence Letter for the
second Payment Period of the immediately following Quarter. In the event the
Authority does not agree with the Contractor’s calculation of any Quarterly Payment
the provisions of Clause 19.10 to 19.13 shall apply.

3. OPERATIONAL CASH RDEL INCENTIVE FEE

3.1 The Operational Cash RDEL Incentive Fee in respect of a particular Quarter
“qn” shall be:

(a) for each Quarter other than the fourth Quarter in any Financial Year “yn”,
90% x 25% of the Operational Savings Percentage(s) of the Projected
Operational Savings Amount (with the remaining 10% x 25% of the
Operational Savings Percentage(s) of the Projected Operational Savings
Amount being retained (the Retention) and released in accordance with
3.1.(c); and

(b) for the fourth Quarter in each Financial Year “yn”, an amount calculated in
accordance with the following formula:

OCRIFq4 = ((OSPyn((OCRFBAyn - NPYOSyn) – (AOCyn – VERCyn +


AVERCyn))) + (NSOCRSyn x30%) x90% (with the remaining 10% being retained
(the Retention) and released in accordance with paragraph 3.2 (and where this
calculation would result in a negative amount the provisions of Clause 19.8 shall
apply)

where:

OCRIFq4 = the Operational Cash RDEL Incentive Fee for the fourth
Quarter in the Financial Year “yn”

OSPyn = the Operational Savings Percentage as determined by the


following table

Operational
Lower Upper Incentive
Cash RDEL
boundary boundary fee %
Savings

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 559 
OFFICIAL SENSITIVE - COMMERCIAL

Band 1: £0M
to £17.5M 0 17,500,000 0.0%
Savings

Band 2:
£17.5M to
17,500,001 65,000,000 20.0%
£65M
Savings

Band 3:
£65M to
65,000,001 105,000,000 30.0%
£105M
Savings

Band 4:
£105M to
105,000,001 145,000,000 40.0%
£145M
Savings

Band 5:
£145M to
145,000,001 185,000,000 50.0%
£185M
Savings

Band 6:
£185M to
185,000,001 225,000,000 55.0%
£225M
Savings

Band 7:
Above
225,000,001 n/a 59.0%
£225M
Savings

OCRFBAyn = the Operational Cash RDEL Financial Baseline for the


Financial Year “yn”, as adjusted in accordance with
paragraph 7

NPYOSyn = the Net Prior Year Operational Savings for the Financial
Year “yn”, determined in accordance with paragraphs 3.4
to 3.6

AOCyn = the Actual Operational Costs for the Financial Year “yn”

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 560 
OFFICIAL SENSITIVE - COMMERCIAL

VERCyn = the Voluntary Early Release Costs incurred by DIDO (if


any) for the Financial Year “yn”

AVERCyn = the Amortised Voluntary Early Release Costs for the


Financial Year “yn”, determined in accordance with
paragraph 3.3

NSOCRSyn = the aggregate total of all Non-sustainable Operational


Cash RDEL Savings for the Financial Year “yn” which
Non-sustainable Operational Cash RDEL Savings were
identified in the Infrastructure Implementation Plan for
such Financial Year “yn” approved by the Authority in
accordance with Clause 12.

3.1A Each Party agrees to:

(a) provide the other Party with all information reasonably required to enable the
calculation of projected Operational Cash RDEL Incentive Fees using the risk
adjusted Operational Costs savings as determined by the Authority during the
tender evaluation;

(b) remove any Non-Sustainable Operational Cash RDEL Savings; and

(c) recalibrate the gain-share percentages set out in the table at paragraph 3.1 of
Part D so that, following such recalibration, the combined total of the
aggregate projected Operational Cash RDEL Incentive Fees and the projected
Non-Sustainable Operational Cash RDEL Savings are the same as would have
been payable prior to such removal,

in each case within 10 Business Days of the Commencement Date.

3.2 The Retention is payable immediately following National Audit Office


approval of DIDO’s accounts for the previous Financial Year (in the event that the
final audited numbers are different to the provisional numbers a credit/debit shall be
generated as soon as is practical after the audited numbers are available in accordance
with the Balancing Payments procedure in paragraph 7 of Part D) or, where such
approval is delayed is payable as follows:

(a) where approval is still outstanding four months after the Financial Year end,
75% x the Retention (i.e. 7.5% of the Operational Savings Percentage(s) of the
Actual Operational Saving) using provisional (unaudited) numbers;

(b) where approval is still outstanding 12 months after the financial year end, 25%
x the Retention of the Operational Savings Percentage(s) of the Actual
Operational Saving using provisional (unaudited) numbers.

Voluntary Early Release Costs

3.3 Where in any Quarter the Authority (including DIDO) incurs any Voluntary
Early Release Costs in respect of Authority Personnel such costs shall be amortised

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 561 
OFFICIAL SENSITIVE - COMMERCIAL

over the Financial Years from and including the Financial Year in which such costs
were incurred until and including the Financial Year in which the Expiry Date is
scheduled to fall (each such amortised amount, the Amortised Voluntary Early
Release Costs).

Net Prior Year Operational Savings

3.4 The Net Prior Year Operational Savings as calculated for the first Financial
Year shall be zero.

3.5 The Net Prior Year Operational Savings for any Financial Year “yn” where
every prior Financial Year up to and including Financial Year “yn-1” has been an
Operational Savings Year shall be equal to the highest Actual Operational Savings
achieved in any single Financial Year.

3.6 The Net Prior Year Operational Savings for any Financial Year “yn” after the
first Financial Year where any prior Financial Year up to and including Financial
Year “yn-1” was an Operational Overspend Year shall be an amount equal to:

(a) the sum of:

(i) the aggregate of the Actual Operational Overspend for each prior
Financial Year which was an Operational Overspend Year (this
calculation being performed on a cumulative basis such that, by way of
example only, in determining the product of this limb (i) in Financial
Year six, the Actual Operational Overspend for each of Financial
Years one to five which was an Operational Overspend Year would be
calculated individually and then combined to form an aggregate sum);
and

(ii) the aggregate of the Net Operational Savings achieved in each prior
Financial Year:

(A) which is an Operational Savings Year; and

(B) in which the product of the Operational Cash RDEL Incentive


Fee calculation was an amount greater than zero,

(this calculation being performed on a cumulative basis such that, by


way of example only, in determining the product of this limb (ii) in
Financial Year six, the above calculation would be carried out in
respect of each of Financial Years one to five which was both an
Operational Savings Year and a year in which an Operational Cash
RDEL Incentive Fee was potentially payable and the resulting Net
Operational Savings for each such year would be combined into an
aggregate sum),

less

(b) the Net Operational Savings Delta in each prior Financial Year:

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 562 
OFFICIAL SENSITIVE - COMMERCIAL

(i) which is an Operational Savings Year; and

(ii) in which the product of the Operational Cash RDEL Incentive Fee
calculation was an amount equal to or less than zero,

(this calculation being performed on a cumulative basis such that, by way of


example only, in determining the product of this limb (b) in Financial Year
six, the above calculation would be carried out in respect of each of Financial
Years one to five which was both an Operational Savings Year and a year in
which an Operational Cash RDEL Incentive Fee was not potentially payable
and the resulting Net Operational Savings Delta for each such year would be
combined into an aggregate sum).

3.7 Worked examples of the calculation of Net Prior Year Operational Savings are
attached for illustrative effect at Appendix 3. These worked examples are included in
order to aid interpretation of paragraph 3.6 above, but are not intended of themselves
to have operative effect.

4. UTILITIES CASH RDEL INCENTIVE FEE

4.1 The Utilities Cash RDEL Incentive Fee in respect of a particular Quarter “qn”
shall be:

(a) for each Quarter other than the fourth Quarter in any Financial Year “yn”,
25% of the Utilities Savings Percentage of the Projected Utilities Savings
Amount; and

(b) for the fourth Quarter in each Financial Year “yn”, an amount calculated in
accordance with the following formula:

UCRIFq4 = (USPyn((ICUCRFByn - NPYUSyn) - AUCyn)) + (NSUCRSyn x30%)


(and where this calculation would result in a negative amount the provisions of Clause
19.8 shall apply)

where:

UCRIFq4 = the Utilities Cash RDEL Incentive Fee for the fourth Quarter in the
Financial Year “qn”

USPyn = Utilities
Utilities Cash Lower Upper
Savings
RDEL Savings boundary boundary
Percentage

Band 1: £0M to
n/a 1,500,000 -
£1.5M Savings

Band 2: £1.5M 1,500,001 36,500,000 20.0%


to £36.5M

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 563 
OFFICIAL SENSITIVE - COMMERCIAL

Savings

Band 3:
£36.5M to
36,500,001 71,500,000 30.0%
£71.5M
Savings

Band 4:
£71.5M to
71,500,001 40.0%
£106.5M 106,500,000
Savings

Band 5:
£106.5M to
106,500,001 50.0%
£141.5M 141,500,000
Savings

Band 6:
£141.5M to
141,500,001 55.0%
£176.5M 176,500,000
Savings

Band 7: Above
£176.5M 176,500,001 n/a 59.0%
Savings

ICUCRFByn = the Index Corrected Utilities Cash RDEL Financial Baseline for
the Financial Year “yn”

NPYUSyn = the Net Prior Year Utilities Savings for the Financial Year “yn”,
determined in accordance with paragraph 0 to 4.4

AUCyn = the four year rolling average of the Actual Utilities Costs for the
Financial Year “yn”, being the average of the sum of all Actual
Utilities Costs for each of the current and preceding three Financial
Years (or, in the third Financial Year the current and preceding
two Financial Years, in the second Financial Year the current and
preceding Financial Year and in the first Financial Year that
Financial Year only with no averaging applied)

NSUCRSyn = the aggregate total of all Non-sustainable Utilities Cash RDEL


Savings for the Financial Year “yn” which Non-sustainable
Utilities Cash RDEL Savings were identified in the Infrastructure
Implementation Plan for such Financial Year “yn” approved by the
Authority in accordance with Clause 12

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 564 
OFFICIAL SENSITIVE - COMMERCIAL

4.1A Each Party agrees to:

(a) provide the other Party with all information reasonably required to enable the
calculation of projected Utilities Cash RDEL Incentive Fees using the risk
adjusted Utilities Costs savings as determined by the Authority during the
tender evaluation;

(b) remove any Non-Sustainable Utilities Cash RDEL Savings; and

(c) recalibrate the gain-share percentages set out in the table at paragraph 4.1 of
Part D so that, following such recalibration, the combined total of the
aggregate projected Utilities Cash RDEL Incentive Fees and the projected
Non-Sustainable Utilities Cash RDEL Savings are the same as would have
been payable prior to such removal,

in each case within 10 Business Days of the Commencement Date.

Net Prior Year Utilities Savings

4.2 The Net Prior Year Utilities Savings as calculated for the first Financial Year
shall be zero.

4.3 The Net Prior Year Utilities Savings for any Financial Year “yn” where every
prior Financial Year up to and including Financial Year “yn-1” has been a Utilities
Savings Year shall be equal to the highest Actual Utilities Savings achieved in any
single Financial Year.

4.4 The Net Prior Year Utilities Savings for any Financial Year “yn” after the first
Financial Year where any prior Financial Year up to and including Financial Year
“yn-1” was a Utilities Overspend Year shall be an amount equal to:

the sum of:

(i) the aggregate of the Actual Utilities Overspend for each prior Financial
Year which was a Utilities Overspend Year (this calculation being
performed on a cumulative basis such that, by way of example only, in
determining the product of this limb (i) in Financial Year six, the
Actual Utilities Overspend for each of Financial Years one to five
which was a Utilities Overspend Year would be calculated individually
and then combined to form an aggregate sum); and

(ii) the aggregate of the Net Utilities Savings achieved in each prior
Financial Year:

(A) which is a Utilities Savings Year; and

(B) in which the product of the Utilities Cash RDEL Incentive Fee
calculation was an amount greater than zero,

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 565 
OFFICIAL SENSITIVE - COMMERCIAL

(this calculation being performed on a cumulative basis such that, by


way of example only, in determining the product of this limb (ii) in
Financial Year six, the above calculation would be carried out in
respect of each of Financial Years one to five which was both a
Utilities Savings Year and a year in which a Utilities Cash RDEL
Incentive Fee was potentially payable and the resulting Net Utilities
Savings for each such year would be combined into an aggregate sum),

less

(b) the Net Utilities Savings Delta in each prior Financial Year:

(i) which is a Utilities Savings Year; and

(ii) in which the product of the Utilities Cash RDEL Incentive Fee
calculation was an amount equal to or less than zero,

(this calculation being performed on a cumulative basis such that, by way of


example only, in determining the product of this limb (b) in Financial Year
six, the above calculation would be carried out in respect of each of Financial
Years one to five which was both a Utilities Savings Year and a year in which
a Utilities Cash RDEL Incentive Fee was not potentially payable and the
resulting Net Utilities Savings Delta for each such year would be combined
into an aggregate sum).

4.5 Worked examples of the calculation of Net Prior Year Utilities Savings are
attached for illustrative effect at Appendix 3. These worked examples are included in
order to aid interpretation of paragraph 4.4 above, but are not intended of themselves
to have operative effect.

5. CAPITAL PROJECTS INCENTIVE FEE

5.1 The Capital Projects Incentive Fee in respect of a particular Quarter “qn” shall
be: an amount calculated in accordance with the following formula:

CPIFqn = (((CPIPqn x PBAqn) – CPSDqn)/3) x QOM (provided that where this


calculation would result in a negative amount the provisions of Clause 19.8 shall
apply)

where:

QOM = in respect of any Quarter which is the first Quarter of this Contract or
the Last Quarter of this Contract, the combined number of whole and
part months in such Quarter, and for any other Quarter shall equal
three

CPIFqn = the Capital Projects Incentive Fee for the Quarter “qn”

CPIPqn = the Capital Projects Incentive Percentage for the Quarter “qn”

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 566 
OFFICIAL SENSITIVE - COMMERCIAL

PBAqn = the Projects Baseline for the Quarter “qn”, as adjusted in accordance
with paragraph 7.1 of Part D

CPSDqn = the sum of all Capital Projects Service Deductions for the Quarter
“qn”, determined in accordance with the table below:

Element Criteria Applicable Capital Projects Service


Deduction

Schedule Achievement of an Portfolio For each Quarter “qn” a deduction of


Performance SPI equal to or better than 2% of the Capital Projects Incentive
Index the applicable Required SPI Fee for such Quarter for each 0.01 by
which the Portfolio SPI for that
Quarter falls below the Required SPI
for such Quarter, up to a maximum of
25% total deduction in such Quarter

Cost Achievement of an Portfolio For each Quarter “qn” a deduction of


Performance CPI equal to or better than 2% of the Capital Projects Incentive
Index the applicable Required CPI Fee for such Quarter for each 0.01 by
which the Portfolio CPI for that
Quarter falls below the Required CPI
for such Quarter, up to a maximum of
25% total deduction in such Quarter

Benchmark 93% of Capital Projects For each Quarter “qn” a deduction of


requirement submitted to Main Gate in a 2% of the Capital Projects Incentive
Quarter are evidenced at Fee for such Quarter for each 1%
such Main Gate to be costed increment by which the percentage of
at a level equal to or lower Capital Projects which were:
than the relevant Applicable
Benchmarks for such Capital (a) submitted to Main Gate in such
Projects. Quarter; and

(b) costed at a level equal to or below


the relevant Applicable Benchmark
for such Capital Projects,

falls below the required standard of at


least 93% of all Capital Projects
which were submitted to Main Gate in
any Quarter being costed at a level
equal to or below the relevant
Applicable Benchmark for such
Capital Projects, up to a maximum of
25% total deduction in such Quarter

By way of example only, if in a given


Quarter ten Capital Projects were
submitted to Main Gate of which one
 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 567 
OFFICIAL SENSITIVE - COMMERCIAL

was costed at a level higher than its


Applicable Benchmark, a deduction of
6% would apply (as only 90% of the
ten submitted Capital Projects were
costed at a level equal to or lower than
their relevant Applicable Benchmarks
which leads to a deduction of 6% after
applying the rate of 2% for each 1%
below 93%)

User Achievement of User For each Quarter “qn” a deduction of


satisfaction Acceptance Criteria 2% of the Capital Projects Incentive
requirement Fee for such Quarter for each 1% of
the total number of Capital Projects
which achieved Handover in such
Quarter which were Non-Compliant
Projects, up to a maximum of 25%
total deduction in such Quarter

By way of example only, if in a given


Quarter five Capital Projects achieve
Handover and one of those Capital
Projects is a Non-Compliant Project, a
deduction of 25% would apply (as
only 80% of the five Capital Projects
which achieved Handover did so
having achieved their User
Acceptance Criteria. This would lead
to a deduction of 40% after applying
the rate of 2% for each 1% increment,
therefore the cap would apply
reducing the actual deduction to 25%)

Measurement and reporting

5.2 In respect of Capital Projects that have commenced prior to the Effective Date,
during the Transformation Period and in any event no later than:

(a) 180 days following the Effective Date, the Contractor shall procure that DIDO
determines a CP Baseline for each of the ten highest ranked Capital Projects
(such ranking being as determined by the Authority, taking account of their
strategic military importance and CDEL budget); and

(b) 270 days following the Effective Date, the Contractor shall procure that DIDO
determines a CP Baseline for all remaining Capital Projects for which a CP
Baseline has not already been determined.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 568 
OFFICIAL SENSITIVE - COMMERCIAL

5.3 In respect of Capital Projects that commence on or following the Effective


Date the Contractor shall procure that DIDO determines a CP Baseline for each such
Capital Project on a timely basis.

5.4 In determining the CP Baseline for any Capital Project DIDO shall follow the
“Project Review Boards” process described in paragraph 22.1 of Part 2 of Schedule 3.

5.5 Where a CP Baseline has not been determined for any Capital Project in
accordance with the time requirements set out in paragraphs 5.2 or 5.3 (as applicable),
the Authority shall be entitled to notify the Contractor of its estimate of the scope of
work, cost budget and of activities for such Capital Project which estimate shall be
deemed to be the CP Baseline (and which estimated cost budget shall be deemed to be
the Budgeted Cost) for the purposes of calculating Capital Projects Service
Deductions pursuant to paragraph 5.1 until such time as a CP Baseline has been
determined.

5.6 The Contractor shall procure that DIDO provides to the Authority all reports
and information required by the Authority in order to carry out the calculations
required to determine in any Quarter whether any Capital Projects Service Deductions
have accrued in such Quarter in respect of any Capital Projects, and in the absence of
such reports and information the Authority shall be entitled to make such assumptions
as to the actual performance of such Capital Projects as it considers appropriate.

Benchmarked Costs and User Acceptance Criteria

5.7 The Contractor shall procure that DIDO does not submit any Capital Projects
to Main Gate for which the Authority has not yet approved Applicable Benchmarks
and User Acceptance Criteria except with the prior written approval of the Authority
to the contrary. The Parties agree that such Applicable Benchmarks can reasonably
be provided, taking account in each case of relevant government and commercial data.

Applicable Benchmarks

5.8 The Contractor shall procure that DIDO:

(a) by the date falling six months from the Effective Date develops a schedule of
Applicable Benchmarks and Applicable Benchmark component elements,
which schedule shall be as detailed and comprehensive as is reasonably
practicable having regard to the information available at any given time with
respect to proposed Capital Projects and of relevant industry and other
applicable standards;

(b) reviews and keeps current such schedule (having regard to relevant industry
and other applicable standards and taking reasonable account of any comments
provided by the Authority from time to time); and

(c) submits annually to the Authority and from time to time on the Authority’s
reasonable request a copy of such schedule for Authority review and approval.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 569 
OFFICIAL SENSITIVE - COMMERCIAL

6. DISPOSALS INCENTIVE FEE

6.1 Subject to paragraph 6.2, the Disposals Incentive Fee in respect of a particular
Quarter “qn” shall be equal to the Disposal Proceeds Percentage of all Net Disposal
Proceeds received in the immediately preceding Quarter.

6.2 Where and to the extent at the time of calculation of any Disposals Incentive
Fee any Disposal Costs are known only on an estimated basis or are otherwise
uncertain the Authority shall be entitled to make a reasonable assessment of such
Disposal Costs and the Disposals Incentive Fee shall be calculated as if such
assessment were the relevant Disposal Costs. Where subsequently the Disposal Costs
which were the subject of such assessment are finally agreed or determined an amount
shall be included in the next Disposals Incentive Fee amount as an increase or
deduction to the same (as applicable) to reflect the difference between the amount of
the assessed Disposal Costs and the amount of the actual Disposal Costs.

6.3 The Disposal Proceeds Percentage is found by reference to the Net Disposal
Proceeds bands in the table below:

Net Disposals Payment Lower Upper Incentive


Mechanism boundary £ boundary £ fee %

Band 1: £1 to £500M Net


1 500,000,000 0.2%
Disposal

Band 2: £500M to £750M


500,000,001 750,000,000 0.3%
Net Disposal

Band 3: £750M to
750,000,001 0.5%
£1,000M Net Disposal 1,000,000,000

Band 4: £1,000M to
1.0%
£1,500M Net Disposal 1,000,000,001 1,500,000,000

Band 5: £1,500M to
2.0%
£1,750M Net Disposal 1,500,000,001 1,750,000,000

Band 6: £1,750M to
3.0%
£2,000M Net Disposal 1,750,000,001 2,000,000,000

Band 7: Above £2,000M n/a 4.0%


2,000,000,001

7. BALANCING PAYMENT

7.1 Subject to the Retention in paragraphs 3.1 and 4.1 of Part D, the Balancing
Payment for any Quarter:
 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 570 
OFFICIAL SENSITIVE - COMMERCIAL

(a) which:

(i) immediately follows a Quarter in which the National Audit Office has
audited DIDO’s accounts in respect of the Financial Year immediately
preceding the then current Financial Year; or

(ii) is the last Quarter within the Contract Period,

shall be equal to the sum of the Operational Cash RDEL Balancing Payment and the
Utilities Cash RDEL Balancing Payment, each calculated in accordance with the
following formulae:

OCRBPqn = OSPyn(AOCyn – AAOCyn)

and

UCRBPqn = USPyn(AUCyn – AAUCyn)

where:

OCRBPqn = the Operational Cash RDEL Balancing Payment for the Quarter “qn”

OSPyn = the Operational Savings Percentage for the Financial Year “yn”

AOCyn = the Actual Operational Costs for the Financial Year “yn”

AAOCyn = the Audited cash Actual Operational Costs for the Financial Year
“yn”

UCRBPqn = the Utilities Cash RDEL Balancing Payment for the Quarter “qn”

USPyn = the Utilities Savings Percentage for the Financial Year “yn”

AUCyn = the four year rolling average of the Actual Utilities Costs for the
Financial Year “yn”, being the average of the sum of all Actual
Utilities Costs for each of the current and preceding three Financial
Years (or, in the third Financial Year the current and preceding two
Financial Years, in the second Financial Year the current and
preceding Financial Year and in the first Financial Year that
Financial Year only with no averaging applied)

AAUCyn = the Audited Actual Utilities Costs for the Financial Year “yn”

which amount may be a negative amount; and

(b) for any other Quarter shall be zero. The Retention does not limit the
Balancing Payment.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 571 
OFFICIAL SENSITIVE - COMMERCIAL

8. TRUE COST VARIANCE

8.1 The Operational Cash RDEL Financial Baseline, Utilities Cash RDEL
Financial Baseline and/or Projects Baseline (as applicable) shall be adjusted for the
purposes of the calculations contained in paragraphs 3.1, 4.1 and 5.1 of Part D by an
amount equal to the sum of:

(a) the aggregate total of all amounts identified by the Authority as having been
erroneously included in the Operational Cash RDEL Financial Baseline, the
Utilities Cash RDEL Financial Baseline and/or Projects Baseline and which
have been agreed or determined to have been so erroneously included
(including where such inclusion arises from an error in the annual profiling of
the Projected NGEC Savings);

(b) any amount determined by the Authority (acting reasonably and having regard
to the matters set out in Clauses 12.26 and 12.27) as being required to be
added to or deducted from the Operational Cash RDEL Financial Baseline,
Utilities Cash RDEL Financial Baseline and/or Projects Baseline (as
applicable) in order to adjust for the effects of any Assumptions At Authority
Risk proving materially incorrect;

(c) subject always to paragraphs 8.2 and 8.3 of this Part D, any amount by which,
in any given Financial Year, the savings delivered by the Next Generation
Estate Contracts (“NGEC”) are less than the Projected NGEC Savings for that
Financial Year;

(d) any amount determined by the Authority as being required to be added to or


deducted from the Operational Cash RDEL Financial Baseline, Utilities Cash
RDEL Financial Baseline and/or Projects Baseline (as applicable) pursuant to
Clause 12.24(d)(ii) or (iii);

(e) any amount which the Authority has determined (acting reasonably) is
required to be deducted from the Projects Baseline in order to reflect Projects
Baseline expenditure which was anticipated in the Base Case as to be incurred
but which was agreed by the Parties should not be so incurred or which would
have been incurred but for the Contractor's failure to act in accordance with
the standard of care set out in Clause 9.1(h); and

(f) such other amounts as the Parties may agree are necessary to include in order
to accurately compare the Audited Actual Operational Costs, Audited Actual
Utilities Costs and Audited Actual Projects Costs for any Financial Year with
the Operational Cash RDEL Financial Baseline, the Utilities Cash RDEL
Financial Baseline and Projects Baseline for such Financial Year,

(the True Cost Variance Adjustment), provided in each case that the True Cost
Variance for any Quarter “qn” shall not include any amount included in any True Cost
Variance calculation for any previous Quarter.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 572 
OFFICIAL SENSITIVE - COMMERCIAL

8.2 Within two months of the end of each Financial Year, the Contractor shall
provide such information as the Authority requires to demonstrate to the Authority’s
reasonable satisfaction:

(a) the actual savings delivered by NGEC for the previous Financial Year; 

(b) where the savings referred to in (a) above are less than the Projected NGEC
Savings for the Financial Year in question: 

(i) an explanatory statement detailing the reasons for the shortfall; and 

(ii) adequate supporting evidence to demonstrate that the Contractor has


procured that DIDO has managed NGEC in accordance with the
standard of care set out in Clause 9.1(h) during the Financial Year in
question.

8.3 The Authority shall be entitled to make a reasonable adjustment to the amount
by which the Operational Cash RDEL Financial Baseline, Utilities Cash RDEL
Financial Baseline and/or Projects Baseline (as applicable) shall be adjusted pursuant
to paragraph 8.1(c) to take into account any circumstances in respect of which the
Contractor bears some responsibility, whether or not it amounts to liability for the
purposes of this Contract. This shall include where the Authority, acting reasonably,
does not accept that the Contractor has procured that DIDO has managed NGEC in
accordance with the standard of care set out in Clause 9.1(h) during the Financial
Year in question.

9. FEE CAPS

9.1 In any Financial Year the:

(a) Operational Cash RDEL Incentive Fee shall not be greater than the
Operational Cash RDEL Incentive Fee Cap;

(b) Utilities Cash RDEL Incentive Fee shall not be greater than the Utilities Cash
RDEL Incentive Fee Cap;

(c) Capital Projects Incentive Fee shall not be greater than the Capital Projects
Incentive Fee Cap; and

(d) Disposals Incentive Fee shall not be greater than the Disposals Incentive Fee
Cap,

in each case for such Financial Year.

9.2 If at any time the Contractor anticipates that:

(a) the aggregate of all Operational Cash RDEL Incentive Fee amounts (taking
account of any relevant True Cost Variation Adjustments) in any Financial
Year would exceed the Operational Cash RDEL Incentive Fee Cap for that
Financial Year;

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 573 
OFFICIAL SENSITIVE - COMMERCIAL

(b) the aggregate of all Utilities Cash RDEL Incentive Fee amounts (taking
account of any relevant True Cost Variation Adjustments) in any Financial
Year would exceed the Utilities Cash RDEL Incentive Fee Cap for that
Financial Year;

(c) the aggregate of all Disposals Incentive Fee amounts in any Financial Year
would exceed the Disposals Incentive Fee Cap for that Financial Year,

the Contractor shall be entitled to request in writing that the Authority increase the
Operational Cash RDEL Incentive Fee Cap, Utilities Cash RDEL Incentive Fee Cap
and/or Disposals Incentive Fee Cap (as applicable) for such Financial Year (a Cap
Increase Request).

9.3 On receipt of a Cap Increase Request the Authority shall be entitled (but not
required) to increase the Operational Cash RDEL Incentive Fee Cap, Utilities Cash
RDEL Incentive Fee Cap and/or Disposals Incentive Fee Cap (as applicable) for such
Financial Year by such amount as the Authority may consider appropriate. Where the
Authority considers such an increase appropriate the Authority shall similarly be
entitled (but not required) to reduce the Operational Cash RDEL Incentive Fee Cap,
Utilities Cash RDEL Incentive Fee Cap and/or Disposals Incentive Fee Cap (as
applicable) for the next (or a subsequent) Financial Year by an equal or lesser amount.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 574 
OFFICIAL SENSITIVE - COMMERCIAL

Part E - Service Deductions

1. INTRODUCTION

1.1 This Part E sets out the Service Deduction regime applicable to this Contract
in the event of under achievement of the agreed Performance Levels.

1.2 The Parties acknowledge that the purpose of Service Deductions is to:

(a) incentivise the Contractor to meet the Performance Levels and to remedy any
failure to meet the Performance Levels promptly; and

(b) provide a mechanism whereby the Authority can attain meaningful recognition
of loss resulting from the Contractor’s failure to meet the Key Performance
Indicators (KPIs).

1.3 During the period from the Commencement Date until the end of the
Transformation Period, the Authority shall not apply Service Deductions to any KPI
in respect of which relevant performance data is unavailable, provided that the
Contractor and/or DIDO (as appropriate) has used reasonable endeavours to obtain
such information, either through Authority systems or by other methods. Upon the
expiry of the Transformation Period, Service Deductions shall be applied in respect of
all KPIs in accordance with the remainder of this Part E.

2. SERVICE DEDUCTIONS

2.1 The Service Deductions to be included in the calculation of the Quarterly


Payment (as set out in paragraph 2.1 of Part D) in respect of a particular Quarter “n-
1” shall be equal to the sum of all individual Service Deductions made in respect of
each KPI for such Quarter “n-1”, each such individual Service Deduction being as
determined in accordance with paragraph 2.2.

2.2 The Service Deduction for each KPI shall be calculated as follows:

(a) comparing actual performance in respect of such KPI to the applicable


performance target for such KPI (as set out in the column headed “Baseline
performance targets” in Table 1 of Appendix 1 of this Schedule 7 (the KPI
Table));

(b) if the actual performance in respect of such KPI does not meet the
performance target for such KPI specified in the KPI Table, but instead falls
into performance band 2, 3 or 4 (as set out in the column headed “Performance
Bands” in Table 2 of Appendix 2 of this Schedule 7 (the Service Deduction
Table)), a service deduction shall be applied (as set out in the column headed
“Service Deduction Percentages” in the Service Deduction Table)
corresponding to the relevant performance band (for example, if the relevant
performance band is band 2, the corresponding service deduction shall be that
in the column headed “Service Deduction Percentages” and “Band 2”; and

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 575 
OFFICIAL SENSITIVE - COMMERCIAL

(c) the appropriate service deduction percentage for such KPI (as identified in
accordance with paragraph 2.2(b) above) shall then be multiplied by the
escalation factor set out in the Escalation Factor Table below and for any
Quarter forming part of the first two Contract Years after the Effective Date
(but not thereafter) shall be further multiplied by a factor of 20%:

Escalation Factor Table

Quarterly Yearly & Half Binary KPIs Escalation


measured Yearly measured (marked as Factor
“Ratchet” KPIs KPIs (per “Binary” in Service (used to
(per Frequency Frequency column Deduction Table) multiply
column in the KPI in the KPI Table ) Number of repeat Service
Table) Number of repeat Quarters within a 2 Deduction
Number of repeat Years within a 5 year period in amount in
Quarters within a 3 year period in which performance Service
year period in which performance for a KPI is below Deduction
which performance for a KPI is below Band 1 “Target Table)
for a KPI is below Band 1 “Target Met”
Band 1 “Target Met”
Met”
1 1 n/a 1.0
2 n/a n/a 1.1
3 2 1 1.25
4+ 3+ 2+ 1.5

2.3 During the period from the Commencement Date until the Effective Date no
Service Deductions shall apply. Thereafter Service Deductions shall apply subject to
the provisions of this Part E.

2.4 Subject to Clause 30, the Authority shall grant relief from specific Service
Deductions where a Relief Event occurs in respect of an Authority Dependency
provided that such relief is limited to the extent described in Schedule 25 for the
Authority Dependency in question.

2.5 The Service Deductions to be included in the calculation of the Quarterly


Payment for any Quarter falling after the first two Contract Years after the Effective
Date shall be subject to an overall cap equal to 50% of the maximum possible Service
Deductions that could have been levied in respect of such Quarter.

3. KEY PERFORMANCE INDICATORS

3.1 The KPI Table sets out the KPIs which the Contractor is required to achieve in
the performance of this Contract (which may relate to the performance of the
Contractor or DIDO, as appropriate). The KPIs are categorised in the KPI Table into
three colours:

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 576 
OFFICIAL SENSITIVE - COMMERCIAL

(a) Green: these KPIs are consistent with the historic levels achieved in the year
prior to the Commencement Date. Service Deductions in respect of the KPIs
categorised as green shall apply from the Effective Date.

(b) Amber: these KPIs require baselining in accordance with the process set out in
paragraph 5 of this Part E on the basis that the relevant historic data is either
missing or unreliable. This baselining shall be completed as soon as
practicable following the Effective Date, and in any event within 12 months of
the Effective Date. Service Deductions in respect of the KPIs categorised as
amber shall apply immediately upon the completion of this baselining process.

(c) Red: these KPIs are currently unmeasured and require further collaborative
development by the Parties to clearly define the “Smart Measures” and the
relevant “Baseline performance targets” to be included in the KPI Table for
such KPIs. The Parties shall cooperate in good faith to achieve this by the end
of the Transformation Period following the process set out paragraph 5 of this
Part E, failing which the Authority shall instruct such amendments to the KPIs
categorised as red as it reasonably considers appropriate having regard to the
principles set out in paragraph 6 of this Part E. Service Deductions in respect
of the KPIs categorised as red shall apply immediately upon the completion of
this development process.

3.2 Subject to the principles set out in paragraph 6 of this Part E:

(a) the Contractor shall be permitted to propose (and/or the Authority may require
the Contractor to bring forward) adjustments to the KPIs in accordance with
the process set out in paragraph 4 of this Part E;

(b) the Authority may instruct additional KPIs or adjustments to existing KPIs
during the Transformation Period in accordance with paragraphs 5.1 to 5.2 of
this Part E; and

(c) either party may propose an adjustment to the KPIs in accordance with
paragraphs 5.3 to 5.4 of this Part E.

4. ANNUAL PROCESS FOR AGREEING THE KPIS

4.1 By no later than 31 January in each Financial Year the Contractor shall
provide to the Authority:

(a) its proposal as to any amendments it reasonably considers are required to be


made to the KPIs in order to ensure that the KPIs continue to effectively
monitor and reflect DIDO’s activities and objectives during the Contract
Period (the draft KPI Amendments Proposal), which draft KPI Amendments
Proposal:

(i) may comprise any combination of the addition of new KPIs, the
deletion of existing KPIs and/or the amendment of existing KPIs in
each case subject to the principles set out in paragraph 6 of this Part E;
and

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 577 
OFFICIAL SENSITIVE - COMMERCIAL

(ii) shall be consistent with the draft Infrastructure Implementation Plan


provided to the Authority by DIDO on or about the same date pursuant
to Clause 12.4 of the Contract;

(b) adequate details of

(i) the factual basis for each KPI addition, deletion or amendment and the
specific reasons for, and benefits to be derived from implementation
of, the same;

(ii) the Contractor’s assumptions underpinning the demonstration of its


achievement of each existing KPI together with, in the case of any
additional KPI, details of DIDO’s current and historic performance
against such KPI to the extent known or available (and the Contractor
shall if so requested by the Authority obtain and collate such data to
the extent possible);

(iii) the criteria by which the Contractor or DIDO’s performance (as


appropriate) would be measured were such draft KPI Amendments
Proposal to be implemented, including full details of:

(A) the applicable Baseline Performance Target, Units and


Frequency for each KPI;

(B) the applicable Performance Bands for each KPI;

(C) whether, in respect of each KPI, such KPI is a Binary or


Ratchet KPI;

(D) the Service Deduction applicable to each KPI,

in each case following such implementation;

(iv) how the Contractor or DIDO’s performance under and in respect of


each KPI (as appropriate) following implementation of the draft KPI
Amendments Proposal would be recorded and measured; and

(v) in the case of any additional KPI, an assessment of any projected


increase or decrease in deductions (identifying the resulting impact on
each individually affected KPI and in aggregate across all KPIs) by
reason of the addition of such KPI over the period of 24 months from
the date on which Service Deductions could first be made against such
KPI together with the projected consequential impact on each
Quarterly Payment during such period.

For the purposes of this paragraph 4.1(b), whether or not the details provided
are adequate will be at the Authority’s discretion.

4.2 Within 10 Business Days of receipt of the draft KPI Amendments Proposal
pursuant to paragraph 4.1 of this Part E, the Authority (acting reasonably and having

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 578 
OFFICIAL SENSITIVE - COMMERCIAL

regard to the Infrastructure Implementation Plan, Command Plan, Footprint Strategy


and Control Totals for the Financial Year to which the draft KPI Amendments
Proposal relates and to the principles set out in paragraph 6 of this Part E) shall:

(a) provisionally approve all or part of the draft KPI Amendments Proposal;

(b) request that the Contractor provides supplemental information and/or meets
with the Authority to discuss the draft KPI Amendments Proposal; or

(c) notify DIDO of any objections and/or proposed modifications to the draft
Infrastructure Implementation Plan that are required in order to obtain the
Authority’s approval of the draft KPI Amendments Proposal.

4.3 If the Authority proposes modifications to the draft KPI Amendments


Proposal under paragraph 4.2(c) of this Part E, the Contractor shall modify and
resubmit the draft KPI Amendments Proposal to the Authority and the procedure
under paragraph 4.2 and this paragraph 4.3 shall apply until approval is given by the
Authority.

4.4 The Contractor shall update the draft KPI Amendments Proposal provided
pursuant to paragraph 4.1 of this Part E to reflect the final Command Plan and Control
Totals by no later than 31 March in each Financial Year, and (subject to paragraph 4.5
of this Part E) the approval process set out in paragraphs 4.2 and 4.3 of this Part E
shall then apply until the Authority has approved the final KPI Amendments Proposal.

4.5 If it is necessary for the approval process set out in paragraphs 4.2 and 4.3 of
this Part E to be followed three or more times in one year before approval has been
granted by the Authority, the Parties shall meet to discuss:

(a) the reason(s) why the draft KPI Amendments Proposal has not been approved
in each case; and

(b) methods of minimising approval time for future KPI Amendments Proposals.

4.6 If the Authority has approved part of the KPI Amendments Proposal pursuant
to paragraph 4.2(a) of this Part E:

(a) the Contractor shall implement the parts of the KPI Amendments Proposal
which have been approved; and

(b) in respect of those parts of the KPI Amendments Proposal which have not
been approved, the unamended KPIs for the forthcoming Financial Year shall
apply unless and until approval of the relevant parts of the KPI Amendments
Proposal is given by the Authority.

4.7 Subject to paragraph 4.8 of this Part E, any dispute as to the contents of the
KPI Amendments Proposal shall be resolved in accordance with Clause 43, provided
that the Contractor may only dispute whether the Authority is being reasonable in
withholding any approval pursuant to paragraphs 4.2, 4.3 or 4.4 of this Part E.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 579 
OFFICIAL SENSITIVE - COMMERCIAL

4.8 If the addition, deletion or amendment of any KPI has not been agreed within
three months of receipt by the Authority of the draft KPI Amendments Proposal the
Authority shall be entitled to determine (acting reasonably) whether such KPI is
added, deleted or amended.

4.9 If at any stage (including during the process referred to in paragraphs 4.1 to
4.4 of this Part E) any of the circumstances contemplated in limbs (a) to (c) of Clause
12.17 of the Contract occur then the provisions of Clauses 12.18 to 12.23 shall apply
save that references to variations or amendments to the Infrastructure Implementation
Plan shall be deemed to be references to variations or amendments of the KPIs.

4.10 The provisions of Clauses 12.24 to 12.30 of the Contract shall apply to the
KPI Amendments Proposal as if set out in this Part E save that for the purposes of this
paragraph all references in such clauses to the Infrastructure Implementation Plan
shall be deemed to be references to the KPI Amendments Proposal.

5. CHANGES TO KPIS DURING THE CONTRACT YEAR

Transformation Review

5.1 In addition to the process set out in paragraph 4 of this Part E, the Parties shall
review progress against the KPIs in place as at the Commencement Date as part of the
Transformation Review, and where necessary the Authority may propose:

(a) adjustments to the KPIs to reflect any greater clarity achieved in respect of the
measurement of performance against KPIs and service levels achieved during
the Transformation Period, so as to ensure that the KPIs are up to date and
relevant for the remainder of the Contract Period; and

(b) additional KPIs or adjustments to the existing KPIs to ensure that the KPIs
remain effective measurements of the Contractor or DIDO’s performance (as
appropriate)for the remainder of the Contract Period,

(such proposed additional or adjusted KPIs being the Authority Adjusted KPIs).

5.2 The process for proposing the Authority Adjusted KPIs following the
Transformation Period will be as set out in paragraph 4 of this Part E.

Material change

5.3 If a material change occurs to the assumptions underlying or relating to the


KPIs, either Party may notify the other Party of the change and propose that one or
more of the KPIs are adjusted in light of the change and the Authority shall consider
whether any such proposed adjustments should be implemented or not. If the
Authority considers that one or more of the KPIs should be adjusted pursuant to any
such proposal the Authority shall instruct that the KPIs be adjusted accordingly and
shall also instruct any redistribution of the Quarterly Payment between the KPIs
required as a result of the adjustment.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 580 
OFFICIAL SENSITIVE - COMMERCIAL

5.4 Disputes as to whether any adjustments to the KPIs instructed by the Authority
pursuant to paragraph 5.3 are necessary in order to address the relevant material
change in assumptions will be determined in accordance with Clause 43.

6. PRINCIPLES FOR ADJUSTMENT OF KPIS

6.1 It is expected that, unless and to the extent both Parties agree in writing to the
contrary, the following principles shall apply to any adjustments to the KPIs pursuant
to the process set out above:

(a) KPIs shall be based on information that is collected in the normal course of
DIDO’s business and is either measured or readily measurable;

(b) such adjustments shall not make the KPIs more or less onerous overall (except
those KPIs that include a pre-determined improvement target within the
narrative of the “Baseline Performance Targets” column within the KPI Table
or where it is agreed or determined that a particular KPI has proven materially
more or less onerous that the Parties contemplated, and/or is not working as
intended); and

(c) such adjustments shall not reduce the number of KPIs or to redistribute the
Quarterly Payment between them in a way which increases the proportionate
risk of the Contractor of losing its fee where the Contractor fails to meet one
or more KPIs (for the avoidance of doubt, the intention of this restriction is not
to prevent fee being redistributed between KPIs to reflect adjusted priorities).

7. TERMINATION

7.1 Where termination of this Contract occurs:

(a) in the first half of a Quarter, the Authority shall consider the level of
abatement to the Quarterly Payment for the previous Quarter as a result of any
Service Deductions. If there was such an abatement, the Authority shall base
the abatement for the final Quarter on the abatement for the previous Quarter
(pro–rated as appropriate); or

(b) in the second half of a Quarter, the Authority shall measure the Contractor’s
progress against the relevant KPIs at the point of termination, and the KPI
abatement for the final Quarter shall be based on that measurement.

8. AUTHORITY REMEDIES

8.1 Without prejudice to the Authority’s right under Clauses 34.10 or 44 of the
Contract, Service Deductions shall be the sole financial remedy for the Contractor’s
failure to procure that DIDO operates to the baseline performance targets set out in
the KPI Table, and any costs to rectify the performance of DIDO to the baseline
performance targets set out in the KPI Table shall be met out of the DIDO RDEL or
CDEL budgets as appropriate.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 581 
OFFICIAL SENSITIVE - COMMERCIAL

9. CHANGES TO CAPITAL PROJECTS KPIS 

9.1 Following the end of the Transformation Period, the procedures for agreeing,
changing and adjusting KPIs as set out in paragraphs 4, 5.3 and 6 of this Part E shall
apply to the Capital Projects Service Deductions mechanisms contained in the table at
paragraph 5 of Part D (the Capital Projects KPIs), mutatis mutandis and disregarding
limbs (A) to (D) of paragraph 4.1(a)(iii), such that from such date the Capital Projects
KPIs are agreed, changed and adjusted in accordance with those paragraphs.

9.2 Without prejudice to the principles set out in paragraph 6 of this Part E, where
and to the extent the Authority is of the opinion in any Financial Year that the ranking
of any Capital Project does not properly reflect the strategic military importance of
such Capital Project, the Authority shall be entitled to take account of such proper
ranking as part of the process for agreeing, changing and adjusting Capital Projects
KPIs pursuant to paragraph 9.1 above.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 582 
OFFICIAL SENSITIVE - COMMERCIAL

Part F - Windfall Gain Sharing

1. INTRODUCTION

1.1 This Part F sets out the Windfall Gain Sharing arrangements

1.2 In this Part F, unless the contact otherwise requires the following words shall
have the following meanings:

Adjusted Windfall Gain shall have the meaning given in paragraph 2.1 below;

Exit Certificate shall have the meaning given in paragraph 2.2 below;

Gain means the monetary value (assessed on a fair and reasonable basis) received as
consideration by the Contractor for disposing of its interest in the Contract; and

Windfall Gain means a sum of money equating to 30% of the Gain.

2. WINDFALL GAIN SHARING

2.1 Subject to Clauses 37 and 38, if the Contractor makes a Gain from:

(a) assigning or novating this Contract to a third party that is not a Contractor
Affiliate; or

(b) a restructuring which results in the transfer of this Contract to a Contractor


Affiliate which Contractor Affiliate is subsequently sold to a third party; or

(c) a restructuring which results in the transfer of this Contract to a Contractor


Affiliate in which third party equity subsequently participates; or

(d) subsequently creating a special purpose vehicle (SPV) with third party
investors and transfers this Contract into that SPV,

then the Contractor shall pay (in accordance with the remaining paragraphs below) the
Windfall Gain to the Authority except where the Affiliate or SPV (being divested in
accordance with sub-paragraphs (a) to (d)) supplies services to more than one
customer under contract (including this Contract) then such Windfall Gain shall be
multiplied by a ‘fair percentage’ (such fair percentage to be determined by a jointly
appointed independent third party that has regard to the value of the other customer
contracts) (the Adjusted Windfall Gain) and the Contractor shall instead pay (in
accordance with the remaining paragraphs below) the Adjusted Windfall Gain to the
Authority.

2.2 By the date falling no later than 30 Business Days from the date of any Gain
the Contractor shall provide a certificate to the Authority's Representative stating
details of:

(a) the sums received from the Gain; and


 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 583 
OFFICIAL SENSITIVE - COMMERCIAL

(b) the calculation of the Windfall Gain or the Adjusted Windfall Gain (subject to
the fair percentage having been decided),

(the Exit Certificate).

2.3 The Contractor shall procure that the Exit Certificate is signed by two officers
of the Contractor and the calculation of the Windfall Gain or the Adjusted Windfall
Gain shall be confirmed in writing by the Contractor's auditor who shall provide a
report addressed to the Authority on its review of such calculation.

2.4 By the date falling no later than five Business Days from the date of issue of
the Exit Certificate the Contractor shall pay to the Authority an amount equal to the
Windfall Gain or Adjusted Windfall Gain (as applicable).

2.5 In the event that the Contractor does not provide an Exit Certificate in
accordance with paragraph 2.2, the Authority reserves the right to estimate the
Windfall Gain or Adjusted Windfall Gain from the Gain and to issue an Exit
Certificate, in which case paragraph 2.3 shall not apply but the Contractor shall
remain subject to paragraph 2.4.

2.6 Any dispute arising in relation to paragraph 2.5 shall be determined in


accordance with Clause 43.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 584 
 
OFFICIAL SENSITIVE - COMMERCIAL
 
DIO currently measures the requirements and supporting data is
available
SCHEDULE 7, APPENDIX 1
DIO currently measures the Requirements to some extent and data is
available
Table 1: Key Performance Indicators (KPIs) Table
DIO has identified the Requirements but does not measure its
delivery/no data is available

This is a new requirement for the Contractor to deliver, related to its


own performance

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

Provide 01 Actual provision of dedicated skilled technical 100% of requested % of people monthly
infrastructur Provision of
services staff members in support of military dedicated skilled
e support to Professional
Technical operations, compared to requested number of resource in place in line
enable skilled staff members each month. with request, i.e.
success in services/advi
ce to appropriate competency,
Afghanistan
and on other operations experience and in line
standing and on with timescales
commitment standing
s commitments 02 Customer satisfaction of the quality of standing 1% improvement in Survey Half yearly
operations advice provided by DIDO in relation customer satisfaction score
Standing
to KPI 01, and measured on a six monthly survey each 6 months improveme
commitment
up to a maximum of 90%

Page 585 
OFFICIAL SENSITIVE - COMMERCIAL  
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

s basis, will commence immediately following customer satisfaction. nt %


the Transformation Period based on the
following question - "How satisfied were you
with the provision of the dedicated, skilled
technical services staff members?", such
question to be answered by the relevant TLB
Lead for each of the provided staff members

03 Proportion of Urgent Operational Requirements 85% of Urgent % of UORs Monthly


1.4 Provision (UORs) met compared to UORs requested on a Operational
of UERs and
monthly basis. Requirements met.
support to
UORs Pre-determined
Urgent Ops improvement target of
100% of UORs met.

Provision of 04 100% of Priority 1 training requirements met, 100% of training Priority 1 Monthly
training safely, through the delivery of training estate requirements met. training
facilities and facilities, where Priority 1 training is as requirement
defined in JSP 907 and where such s
Training
requirements are consistent with the Footprint

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 586 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

Strategy.

05 End Transient User satisfaction relating to the At least 93% End User Survey Half Yearly
fit for purpose condition of the training satisfaction in each 6 score
facilities, where End Transient User means a monthly survey.
military person who is undergoing training.
The measure relates to the infrastructure
facilities but not the training materials provided
(i.e. course materials). The satisfaction
questions are to be agreed during the
Transformation Period.

Provide 3.5 Deliver 06 UK Hard FM – Statutory Compliance - Based 96% of assets meeting % Quarterly
effective Users/Defenc on a rolling programme of asset inspections SL3 standard.
and (with the frequency of inspections configured
e Lines of Pre-determined
coherent to ensure compliance with Authority Policy and
affordable Development improvement target of
(DLoD) legislation as appropriate) and save for surplus
infrastructur 100% of assets meeting

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 587 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

satisfaction and code 4&5 assets, the % of all Level 2 SL3 standard.
e solutions with assets (where Level 2 is as defined in the
to support infrastructure Regional Prime Contracts / NGEC contracts or
human support other relevant maintenance contracts), meeting
capability minimum statutory compliance requirements
(defined as service level 3, SL3).
User
07 UK Hard FM - Asset condition 87% of Level 2 assets at % Quarterly
Satisfaction
Save for surplus assets, the percentage of or above Target Asset
Level 2 assets at or above Target Asset Condition and up to a
Condition (where Level 2 assets and Target maximum of 20% of the
Asset Condition are as defined in the Regional L2 assets at Target Asset
Prime Contracts / NGEC contracts or other Condition having
relevant maintenance contracts) and the elements at C or D.
percentage of Level 2 assets at or above Target
Asset Condition but with worst Level 3 Pre-determined
elements at C or D (as defined in the Regional improvement target of
Prime Contracts / NGEC contracts or other 90% of Level 2 assets at
relevant maintenance contracts) or above Target Asset
Condition.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 588 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

08 UK Hard FM – Customer satisfaction - In line with the %Quarterly Quarterly


Quantum of complaints to the Helpdesk and procedure in paragraph 5 reduction in
average times taken to resolve complaints of Part E Contractor to the volume
satisfactorily, where the target average time to work with NGEC of
resolve complaints is to be baselined during the contractors (or other complaints;
Transformation Period. The Contractor shall relevant third party and
put forward proposals to define resolution as contractors/suppliers) average
part of the procedure in paragraph 5 of Part E and DIDO to review the resolution
where it is envisaged that service response last 3 years performance, times
times will be within 24 hours and the customer establish a baseline and relative to
resolution timescales will be developed then set targets to reduce the previous
working with the customer and NGEC the quantum of Quarter’s
contractors (or other relevant third party complaints by 5% target
contractors/suppliers), and take account of the annually over the 5 years performanc
severity of complaints. of the NGEC contracts e
(i.e. a reduction of 1.25%
per Quarter in the
volume of complaints
and. in relation to

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 589 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

resolving complaints),

09 Soft FM – Availability of Catering, Retail and Contractor to work with % Quarterly Quarterly
facilities - The Contractor shall put forward CRL contractors to improveme
proposals as part of the procedure in paragraph review last 3 years nt relative
5 of Part E, with the measurement focus performance to establish to the
proposed to be food quality and availability of a baseline and then set previous
facilities. targets to improve quarter’s
availability by 5% target
annually (1.25% per performanc
quarter relative to the e
previous quarter’s Target
performance) over the 5
years of the HESTIA
contracts

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 590 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

10 Soft FM – Customer satisfaction – Quantum of Contractor to work with % Quarterly Quarterly


complaints to the Helpdesk and average times HESTIA contractors and improveme
taken to resolve complaints satisfactorily DIDO to review last 3 nt relative
where the target average time to resolve years performance, to the
complaints is to be baselined during the establish a baseline and previous
Transformation Period. The Contractor shall then set targets to reduce quarter’s
put forward proposals to define resolution as the quantum of target
part of the procedure in paragraph 5 of Part E. complaints by 5% performanc
annually (1.25% per e
quarter relative to the
previous quarter’s Target
performance) over the 5
years of the HESTIA
contracts. In relation to
resolving complaints
satisfactorily, we will
look to provide a
customer response within
24 hours and develop
customer resolution

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 591 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

timescales working with


both the customer and
HESTIA contractors
depending on severity of
complaints.

11 UK Accommodation – SFA condition - 95% of SFA at SFC2 or % Quarterly


Proportions of SFA at SfC1 and SfC2 grades. better and subject to a
minimum of 45% at
SfC1

11a Overseas Accommodation – SFA condition - The Contractor shall put % Quarterly
Proportions of SFA at SfC1 and SfC2 grades. forward proposals in line
with paragraph 5 of Part
E to establish a baseline
target during the
Transformation Period

12 UK Accommodation – SFA upgrades - 100% of SFA upgrades % Quarterly


Proportion of SFA upgrades completed in line completed in line with

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 592 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

with scheduled programmes. scheduled programmes.

12a Overseas Accommodation – SFA upgrades - The Contractor shall put % Quarterly
Proportion of SFA upgrades completed in line forward proposals in line
with scheduled programmes. with paragraph 5 of Part
E to establish a baseline
target during the
Transformation Period

13 UK Accommodation – Voids – Proportion of 11% or less void rate % Quarterly


UK SFA categorised as void (excluding maintained
properties held deliberately void, including the
impact of Future Basing requirements). Pre-determined
improvement target of
10% or less void rate
maintained.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 593 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

13a Overseas Accommodation – Voids – The Contractor shall put % Quarterly


Proportion of UK SFA categorised as void forward proposals in line
(excluding properties held deliberately void, with paragraph 5 of Part
including the impact of Future Basing E to establish a baseline
requirements). target during the
Transformation Period

14 UK Services Family Accommodation - Emergency 99-% % Monthly


Maintenance response rates: percentage of
Emergency, Urgent and Routine response Urgent 93% or higher
repairs carried out within the contractually Routine 97% or higher
agreed times.

The definitions of Emergency, Urgent and The Contractor shall, as


Routine have the same meaning as set out in appropriate, put forward
the Authority’s existing contracting proposals as part of the
arrangements with the maintenance provider(s). procedure in paragraph 5
of Part E for a new
category of Critical

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 594 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

concurrent with the


ability to flow this down
into the maintenance
contracting arrangements
and a baseline being
created.

14a Overseas Services Family Accommodation - The Contractor shall put % Monthly
Maintenance response rates: percentage of forward proposals as part
Emergency, Urgent and Routine response of the procedure in
repairs carried out within the contractually paragraph 5 of Part E to
agreed times. develop equivalent KPI
measurements and
targets for a) Overseas
The definitions of Emergency, Urgent and SFA, b) UK SLA and c)
Routine have the same meaning as set out in Overseas SLA
the Authority’s existing contracting
arrangements with the maintenance provider(s).

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 595 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

15 UK Accommodation – Customer satisfaction - Contractor to work with % quarterly Quarterly


Quantum of complaints to the Helpdesk and NGEC contractors (or improveme
average times taken to resolve complaints other relevant third party nt relative
satisfactorily where the target average times to contractors/suppliers) to the
resolve complaints is to be baselined within 12 and DIDO to review the previous
months from the Effective Date. The last 3 years performance, quarter’s
Contractor shall put forward proposals to establish a baseline and target
define resolution as part of the procedure in then set targets to reduce performanc
paragraph 5 of Part E where it is envisaged that quantum of complaints e
customer response times will be within 24 by 5% annually (1.25%
hours and the customer resolution timescales per quarter relative to the
will be developed working with the customer previous quarter’s target
and NGEC contractors (or other relevant third performance) over the 5
party contractors/suppliers) and take account of years of the NGEC.
the severity of complaints.

15a Overseas Accommodation – Customer The Contractor shall put % Quarterly


satisfaction - Quantum of complaints to the forward proposals in line
Helpdesk and average times taken to resolve with paragraph 5 of Part
complaints satisfactorily where the target E to establish a baseline

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 596 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

average times to resolve complaints is to be target during the


baselined within 12 months from the Effective Transformation Period
Date. The Contractor shall put forward
proposals to define resolution as part of the
procedure in paragraph 5 of Part E where it is
envisaged that customer response times will be
within 24 hours and the customer resolution
timescales will be developed working with the
customer and NGEC contractors or other
relevant third party contractors/suppliers and
take account of the severity of complaints.

16 Overseas - Statutory compliance (as set out in 95% of assets meeting % Quarterly
English Law or the relevant jurisdiction that SL3 standard.
applies if not English Law) - % of Level 2
assets (excluding any surplus assets) meeting Pre-determined
minimum Statutory Compliance requirements improvement target of
(defined as Service Level 3) 100% of assets meeting
SL3 standard.
where Level 2 assets are as defined in the

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 597 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

overseas maintenance contracts

17 Overseas - Asset condition 90% of Level 2 assets at % Quarterly


Save for Germany, the percentage of Level 2 or above Target Asset
assets at or above Target Asset Condition Condition and up to a
where Level 2 assets and Target Asset maximum proportion of
Condition are as defined in the maintenance those assets to be
contracts and baselined of the L2 assets
the % Level 2 assets at or above Target Asset at Target Asset Condition
Condition but with worst Level 3 elements at C having elements at C or
or D as defined in the maintenance contracts D. The Baselining of
condition elements C and
D is to be established in
line with the procedure in
paragraph 5 of Part E.

18 Overseas – Customer satisfaction - Complaints Contractor to work with %Quarterly Quarterly


to the Helpdesk and average times taken to contractors and DIDO to improveme
resolve complaints satisfactorily where the review the last 3 years nt relative
target average time to resolve complaints is to performance, establish a to the

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 598 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

be baselined during Transformation. The baseline and then set previous


Contractor shall put forward proposals to targets to reduce quarter’s
define resolution as part of the procedure in quantum of complaints target
paragraph 5 of Part E where it is envisaged that by 5% annually anually performanc
customer response times will be within 24 (1.25% per quarter e in ,
hours and the customer resolution timescales relative to the previous average
will be developed, working with the customer quarter’s target resolution
and NGEC contractors (or other relevant third performance) over the 5 times
party contractors/suppliers), and take account years of the NGEC.
of the severity of complaints.

19 Programme and Projects Delivery - Supporting 20% reduction in % Annual


the MOD to achieve its Government construction costs by assessment
Construction Strategy target. 2015 (with reference to up to 2015
2010 costs) per the
Government
Construction Strategy as
applied to MOD

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 599 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

20 Programme and Projects Delivery - proportion This is a summary % Quarterly


of projects completed to Time, Cost and measure of paragraph 5.1
Quality parameters. of Part D which sets out
100% success rate and
100% of the Capital
projects fee at risk.

21 Programme and Projects Delivery - Proportion 100% of projects % Quarterly


of projects achieving a Value for Money score achieving a Value for
of 70% or greater Money score greater than
or equal to 70%.

22 Programme and Projects Delivery - Percentage To reduce construction % Quarterly


reduction in Construction Waste. Measured as waste to landfill (% over
the percentage of construction waste sent to time) against 07/08
landfill in the UK (to be baselined). baseline, target 80%
recycled. The Contractor
shall put forward KPI
review proposals under
paragraph 5 of Part E so
as to achieve the higher
 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 600 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

of 80% recycled or upper


quartile for Government
Construction based
output or higher.

Deliver 4.1 Deliver 23 Provision of updated Infrastructure Each IIP provided in a n/a Annually
business performance Implementation Plans (IIPs) in a form capable form capable of approval
efficiency in of the of timely acceptance by the Authority. approved by the
the Defence Authority before the start
managemen
Infrastructure of the relevant IIP period
t and
delivery of Programme or as otherwise agreed
defence with DIGA.
infrastructur
e 24 Delivery of the IIP Milestones (such Delivery of all (100%) % of Quarterly
Performance
Milestones to be the Transformation IIP Milestones milestones
- DIP
Milestones during the Transformation Period,
and thereafter those milestones included within
the IIP as a result of the annual update pursuant
to Clauses 12.9 to 12.18).

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 601 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

25 Compliance with DIGA reporting requirements Full compliance with n/a Quarterly
as required in accordance with the Contract. DIGA reporting
requirements.

4.8 26 Maintenance of appropriate risk registers and Risk registers maintained n/a Quarterly
Understandin the Contractor shall produce a summary of in accordance with
g and DIDO risks to the Authority at Quarterly Authority Policy, Rules
managing the intervals. and Guidance JSP 892.
risks DIDO
holds

Risk

5.1 Meeting 27 Fatalities attributable to Health and Safety Zero Fatalities # of Quarterly
5. Provide
sustainable, the statutory failures. fatalities

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 602 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

safe and commitments 28 Number of occurrences of Major Injuries (as Less than 57 injuries per # of Quarterly
legally defined in the Reporting of Injuries, Diseases 100,000 employees RIDDOR
compliant and Dangerous Occurrences Regulations incidents
infrastructur Pre-determined
(RIDDOR) for DIO
e to Defence Statutory improvement target of
Commitmen less than 45 injuries per
ts 100,000 employees per
annum by the end of the
Transformation Period
and less than 33 injuries
per 100,000 employees
per annum by the end of
the third year after the
Effective Date or sooner
if possible.

29 DIO contractors to reduce rate of occurrence of Less than 184 injuries # of Quarterly
Major Injuries (as defined in RIDDOR) for per 100,000 employees, RIDDOR
their employees on DIO Business save where it is proven incidents
that the Contractor has
taken reasonable action

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 603 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

to comply with this


performance level

30 Number of Crown Improvement / Enforcement Zero Crown # of Crown Quarterly


/ Prohibition Notices2 or Crown Censures Improvement Notices INs and
served following the Effective Date, save (INs) and Censures, Censures
where such notices relate to conditions that
existed prior to the Effective Date where the
process set out in paragraph 5 of Schedule 6
shall apply

31 Completion rates of mandatory employee No more than 5% # of Quarterly


training, outstanding mandatory outstanding
training training
requirements requirement
s

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 604 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

32 Number of Environmental Warning Notices Zero EWNs subject to # of EWNs Quarterly


(EWNs) issued each quarter excluding any relief from any Service
EWNs where the EWN is issued as a result of Deduction for one such
military users actions EWN every 24 months

33 Compliance with findings and Full compliance with n/a Quarterly


recommendations of external and financial findings and
Audit and Assurance reviews (as approved / recommendations.
amended by the Audit & Assurance
Committee) within 12 months of the date of
such a recommendation having been notified to
DIDO or any other timescales agreed with
DIGA.

5.2 Delivery 34 Proportion of Defence Related Environmental 95% of all projects to % Quarterly
of sustainable Assessment Methodology (DREAM) achieve target rating at
infrastructure assessment rating at or above target for new the survey stage; New
solutions builds / major refurbishments Builds – Excellent;
Refurbishments – Very
Good,

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 605 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

Working with DIGA the


Contractor shall put
forward proposals for
equivalent baseline
performance targets for
the design, construction
and operation stages.

35 Reduction in the level of non-operational Reduce MOD non- % Annually


Sustainabilit energy consumption across the MOD estate operational energy
y consumption (kwh) by
25% by 2014/15
compared to a baseline
set in 2009/10. A
baseline is included
within the IIP and
Financial Model for
KwH for each year of the
Contract

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 606 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

36 Compliance with the procedural requirements 97% of requests dealt % Quarterly


of relevant data protection regulations and within the statutory
information management requirements, timescales. Compliance
5.4 Meeting including DPA, FOIA, EIR, PQs and general with all relevant
our security confidentiality procedural requirements
commitments of data protection
regulations and
information management
requirements.
Security
commitment Pre-determined
s improvement target of
100% of requests dealt
within the statutory
timescales.

37 Compliance with MOD Security Requirements No more than 3 security # of security Quarterly
(other than compliance with JSP 440 in relation breaches requiring breaches
to the property infrastructure of the Authority’s investigation requiring

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 607 
OFFICIAL SENSITIVE - COMMERCIAL

Strategic Performance Re SMART Measures Baseline performance Units Frequency


objective Parameter f targets
(need to be controlled by the DIDO)
(ref to DIEC
KPIs)

38 premises which is covered below). Pre-determined investigatio


improvement target of 0 n
security breaches
requiring investigation.

Compliance with JSP 440 in relation to the All premises shall


property infrastructure of the Authority’s comply except for pre-
premises existing non-compliances Annually
in accordance with the
procedure set out in
Schedule 6.

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 608 
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 7, APPENDIX 2

TABLE 2: PERFORMANCE BANDS AND ASSOCIATED SERVICE DEDUCTIONS

Performance Bands Service Deduction Percentages

Band
Band 1 Band 2 Band 3 Band 4 Band 1 Band 3 Band 4
2

Max
Service Modera
KP Minor Major
Deduction Minor Moderate Major Target te
I Type Target Met Shortf Shortfa
including Shortfall Shortfall Shortfall Met Shortfal
ref all ll
repeat l
failure

1. Binary 6.00% 100% or above Below Band 1 n/a n/a 0.00% 4.00% 4.00% 4.00%

Ratche
2. 4.00%
t 1% or above 0.5% to 0.99% 0% to 0.49% below 0% 0.00% 0.70% 1.30% 2.70%

3. Binary 10.00% 85% or above Below Band 1 n/a n/a 0.00% 6.70% 6.70% 6.70%

Ratche
4. 3.00%
t 85% or above 80% to 84.99% 75% to 79.99% below 75% 0.00% 0.50% 1.00% 2.00%

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 609 
OFFICIAL SENSITIVE - COMMERCIAL

Performance Bands Service Deduction Percentages

Band
Band 1 Band 2 Band 3 Band 4 Band 1 Band 3 Band 4
2

Max
Service Modera
KP Minor Major
Deduction Minor Moderate Major Target te
I Type Target Met Shortf Shortfa
including Shortfall Shortfall Shortfall Met Shortfal
ref all ll
repeat l
failure

Ratche
5. 2.00%
t 93% or above 87% to 92.99% 85% to 86.99% below 85% 0.00% 0.30% 0.70% 1.30%

96% or above
6. Binary 4.00%
Below Band 1 n/a n/a 0.00% 2.70% 2.70% 2.70%

Ratche 87% or above


7. 3.00% 82.5% to
t 86.99% 80% to 82.49% below 80% 0.00% 0.50% 1.00% 2.00%

Ratche
8. 3.00%
t to calibrate per the procedure in paragraph 5 of Part E 0.00% 0.50% 1.00% 2.00%

Ratche
9. 6.00% 99% or above 97% to 98.99% 95% to 96.99% below 95% or
t 0.00% 1.00% 2.00% 4.00%
of the agreed or above of the or above of the above of the

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 610 
OFFICIAL SENSITIVE - COMMERCIAL

Performance Bands Service Deduction Percentages

Band
Band 1 Band 2 Band 3 Band 4 Band 1 Band 3 Band 4
2

Max
Service Modera
KP Minor Major
Deduction Minor Moderate Major Target te
I Type Target Met Shortf Shortfa
including Shortfall Shortfall Shortfall Met Shortfal
ref all ll
repeat l
failure

Target agreed Target agreed Target agreed Target

Ratche
2.00%
10. t to calibrate per the procedure in paragraph 5 of Part E 0.00% 0.30% 0.70% 1.30%

45%or above up to 5% less


up to 1% less up to 3% less
Ratche at SFC1 and than f the
2.25% than the target than the target
11. t 94% or above target
numbers numbers
at SFC2 numbers 0.00% 0.35% 0.75% 1.50%

11
TBC 0.75%
a to calibrate per the procedure in paragraph 5 of Part E 0.00% 0.15% 0.25% 0.50%

Binary 0.75%
12. 100% or above Below Band 1 n/a n/a 0.00% 1.50% 1.50% 1.50%

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 611 
OFFICIAL SENSITIVE - COMMERCIAL

Performance Bands Service Deduction Percentages

Band
Band 1 Band 2 Band 3 Band 4 Band 1 Band 3 Band 4
2

Max
Service Modera
KP Minor Major
Deduction Minor Moderate Major Target te
I Type Target Met Shortf Shortfa
including Shortfall Shortfall Shortfall Met Shortfal
ref all ll
repeat l
failure

12
TBC 0.75%
a to calibrate per the procedure in paragraph 5 of Part E 0.00% 0.50% 0.50% 0.50%

Ratche 11% or less


2.25%
13. t 13% to 11.01% 15% to 13.01% above 15% 0.00% 0.35% 0.75% 1.5%

13
TBC
a to calibrate per the procedure in paragraph 5 of Part E 0.00% 0.15% 0.25% 0.50%

90% to
99% or above 95% to 98.99% 94.99%of the below 90% of
Ratche
2.25% of the Baseline of the Baseline Baseline the Baseline
14. t
Performance Performance Performance Performance
targets targets targets targets 0.00% 0.35% 0.75% 1.50%

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 612 
OFFICIAL SENSITIVE - COMMERCIAL

Performance Bands Service Deduction Percentages

Band
Band 1 Band 2 Band 3 Band 4 Band 1 Band 3 Band 4
2

Max
Service Modera
KP Minor Major
Deduction Minor Moderate Major Target te
I Type Target Met Shortf Shortfa
including Shortfall Shortfall Shortfall Met Shortfal
ref all ll
repeat l
failure

14
TBC 0.75%
a to calibrate per the procedure in paragraph 5 of Part E 0.00% 0.15% 0.25% 0.50%

Ratche
3.80%
15. t to calibrate per the procedure in paragraph 5 of Part E 0.00% 0.60% 1.30% 2.50%

15
TBC 1.20%
a to calibrate per the procedure in paragraph 5 of Part E 0.00% 0.20% 0.40% 0.80%

95% or above
Binary 2.00% Below Band 1 n/a n/a
16. 0.00% 1.30% 1.30% 1.30%

90% or above 84% to 89.99% 80% to 83.99% below


Ratche
2.00% (subject to (subject to (subject to 80%(subject
17. t
baseline) baseline) baseline) to baseline) 0.00% 0.30% 0.70% 1.30%

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 613 
OFFICIAL SENSITIVE - COMMERCIAL

Performance Bands Service Deduction Percentages

Band
Band 1 Band 2 Band 3 Band 4 Band 1 Band 3 Band 4
2

Max
Service Modera
KP Minor Major
Deduction Minor Moderate Major Target te
I Type Target Met Shortf Shortfa
including Shortfall Shortfall Shortfall Met Shortfal
ref all ll
repeat l
failure

Ratche
1.00%
18. t to calibrate per the procedure in paragraph 5 of Part E 0.00% 0.20% 0.30% 0.70%

The weighting may be re-distributed to other measures by the 0.00%  0.00%  0.00% 
Binary 0.00%
19. Authority 0.00%

Ratche The weighting may be re-distributed to other measures by the 0.00%  0.00%  0.00% 
0.00%
20. t Authority 0.00%

Ratche The weighting may be re-distributed to other measures by the 0.00%  0.00%  0.00% 
0.00%
21. t Authority 0.00%

Ratche
2.00%
22. t to calibrate per the procedure in paragraph 5 of Part E 0.00% 0.30% 0.70% 1.30%

23. Binary 5.00% Approved Below Band 1 Below Band 1 Below Band 1 0.00% 3.30% 3.30% 3.30%

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 614 
OFFICIAL SENSITIVE - COMMERCIAL

Performance Bands Service Deduction Percentages

Band
Band 1 Band 2 Band 3 Band 4 Band 1 Band 3 Band 4
2

Max
Service Modera
KP Minor Major
Deduction Minor Moderate Major Target te
I Type Target Met Shortf Shortfa
including Shortfall Shortfall Shortfall Met Shortfal
ref all ll
repeat l
failure

Ratche
24. 5.00% 95% or above 90% to 94.99% 85% to 89.99% below 85% 0.00% 0.80% 1.70% 3.30%
t

25. Binary 5.00% 100% or above Below Band 1 Below Band 1 Below Band 1 0.00% 3.30% 3.30% 3.30%

26. Binary 5.00% 100% or above Below Band 1 Below Band 1 Below Band 1 0.00% 3.30% 3.30% 3.30%

27. Binary 1.00% 0% or above Below Band 1 Below Band 1 Below Band 1 0.00% 0.70% 0.70% 0.70%

28. Binary 1.00% Less than 57 Below Band 1 Below Band 1 Below Band 1 0.00% 0.70% 0.70% 0.70%

29. Binary 1.00% Less than 184 Below Band 1 Below Band 1 Below Band 1 0.00% 0.70% 0.70% 0.70%

30. Binary 1.00% 0% Below Band 1 Below Band 1 Below Band 1 0.00% 0.70% 0.70% 0.70%

31. Binary 1.00% 5% or less Below Band 1 Below Band 1 Below Band 1 0.00% 0.70% 0.70% 0.70%

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 615 
OFFICIAL SENSITIVE - COMMERCIAL

Performance Bands Service Deduction Percentages

Band
Band 1 Band 2 Band 3 Band 4 Band 1 Band 3 Band 4
2

Max
Service Modera
KP Minor Major
Deduction Minor Moderate Major Target te
I Type Target Met Shortf Shortfa
including Shortfall Shortfall Shortfall Met Shortfal
ref all ll
repeat l
failure

32. Binary 1.00% 0% or above Below Band 1 Below Band 1 Below Band 1 0.00% 0.70% 0.70% 0.70%

Full
Compliance
33. Binary 1.00% Below Band 1 Below Band 1 Below Band 1 0.00% 0.70% 0.70% 0.70%
inside 12
months

Ratche
34. 3.00% 95% or above 90% to 94.99% 85% to 89.99% below 85%% 0.00% 0.50% 1.00% 2.00%
t

Ratche The weighting may be re-distributed to other measures by the 0.00%  0.00%  0.00% 
35. 0.00% 0.00%
t Authority

97% or above
36. Binary 1.50% Below Band 1 Below Band 1 Below Band 1 0.00% 1.00% 1.00% 1.00%

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 616 
OFFICIAL SENSITIVE - COMMERCIAL

Performance Bands Service Deduction Percentages

Band
Band 1 Band 2 Band 3 Band 4 Band 1 Band 3 Band 4
2

Max
Service Modera
KP Minor Major
Deduction Minor Moderate Major Target te
I Type Target Met Shortf Shortfa
including Shortfall Shortfall Shortfall Met Shortfal
ref all ll
repeat l
failure

3 or below
37. Binary 1.50% Below Band 1 Below Band 1 Below Band 1 0.00% 1.00% 1.00% 1.00%

38. To develop To develop To develop To develop To develop 0.00% 1.00% 1.00% 1.00%

0.0% 41.7% 50.0% 66.7%

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 617 
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 7, APPENDIX 3 INCENTIVE FEE BANDS WORKED EXAMPLES

Scenario Name Commentary


A: In year 1 the final outturn spend is £60m less than the Operational Cash RDEL Baseline.
SUSTAINABLE SAVINGS EACH The first £17.5m savings are at 0% incentive fee.
YEAR The next £42.5m all falls into band 2 and is subject to 20%, generating £8.5m incentive fee.
The following year’s Baseline is reduced by the £60m year 1 savings to create an adjusted
baseline
B: Similar to the above scenario with different yearly amounts of savings to demonstrate how the
SUSTAINABLE SAVINGS EACH year model is intended to work
(ALTERNATIVE PROFILE)
C: There are no savings in year 1
OVERSPENDS IN YEARS 2 AND 4 In year 2 the Baseline is exceeded / overspent by £30m
In year 3 the original Baseline is under spent by £90m however this is treated as a £60m saving
as the previous overspend of £30m is offset against this saving
D: In year 4 there is a saving of £2m incremental over the previous years cumulative incremental
PER SCENARIO B WITH NON- savings
SUSTAINABLE SAVING IN YEAR 4 In year 4 it is assumed that £1m of the £2m increment relates to a non-sustainable (“one-off”)
initiative.
This example will be updated in At the end of year 4 the True Cost Variance process is used to agree the actual outturn
accordance with paragraph 3.1A of Part expenditure related to that “one-off” initiative and consequently this is not counted as a net prior
D year operational saving in so far as calculating the adjusted baseline is concerned for the
following year.
This is demonstrated by reducing year 4’s £112m cumulative incremental savings to £111m in
year 5.
This also means that in year 4, the £1m one-off saving is included together with the £1m
sustainable saving within fee band 4 to calculate £0.8m of Incentive Fee, i.e. £2m x 40%
It should be noted that the £1m non-sustainable (“one-off”) saving is not reversed out of the fee
band cumulative saving (the hopper remains at the maximum level previously reached)

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 618 
OFFICIAL SENSITIVE - COMMERCIAL

SCENARIO A: SUSTAINABLE SAVINGS EACH YEAR

Period From 01-Apr-14 01-Apr-15 01-Apr-16 01-Apr-17 01-Apr-18


Period To 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 31-Mar-19
Authority Financial Year 1 2 3 4 5
Months In Period 12 12 12 12 12

Operational Cash RDEL Incentive Fee Summary

Operational Cash RDEL Fee Summary

Operational Cash RDEL (OCRFBAyn) 26,003.0 2,575.0 2,652.0 2,732.0 2,814.0 2,898.0

Previous Years Net Savings (excluding overspends) = NPYOSyn (873.3) - (60.0) (70.0) (85.0) (112.0)
Previous Years non sustainable savings added back (actual sum agreed as part of TCV) - - - - - -
Previous Years Net Savings excluding Non Sustainable savings and overspends NPYOSyn (873.3) - (60.0) (70.0) (85.0) (112.0)

Adjusted baseline excluding previous years non sustainable savings (OCRFBAyn - NPYOSyn) 25,129.8 2,575.0 2,592.0 2,662.0 2,729.0 2,786.0

Operational Cash RDEL (OCRFBAyn) 26,003.0 2,575.0 2,652.0 2,732.0 2,814.0 2,898.0
RDEL (Savings) / Overspends (988.3) (60.0) (70.0) (85.0) (112.0) (115.0)
Current Year RDEL Cost (Excluding One Off Savings) = AOCyn 25,014.8 2,515.0 2,582.0 2,647.0 2,702.0 2,783.0

o/b including (Overspends) / Savings - 60.0 70.0 85.0 112.0


Incremental Savings = ((OCRFBAyn - NPYOSyn) - AOCyn) 115.0 60.0 10.0 15.0 27.0 3.0
c/b including (Overspends) / Savings 60.0 70.0 85.0 112.0 115.0

Change in c/b excluding overspends 60.0 10.0 15.0 27.0 3.0


Cumulative incremental savings excluding overspends 60.0 70.0 85.0 112.0 115.0

Incremental Savings Shared

1. Band 1: £0M to £25M Savings 25.0 25.0 25.0 25.0 - - - -


2. Band 2: £25M to £65M Savings 65.0 40.0 40.0 35.0 5.0 - - -
3. Band 3: £65M to £105M Savings 105.0 40.0 40.0 - 5.0 15.0 20.0 -
4. Band 4: £105M to £145M Savings 145.0 40.0 10.0 - - - 7.0 3.0
5. Band 5: £145M to £185M Savings 185.0 40.0 - - - - - -
6. Band 6: £185M to £225M Savings 225.0 40.0 - - - - - -
7. Band 7: Above £225M Savings n/a n/a - - - - - -

Total Savings 115.0 60.0 10.0 15.0 27.0 3.0

Fee

1. Band 1: £0M to £25M Savings - - - - - - -


2. Band 2: £25M to £65M Savings 20.0% 8.0 7.0 1.0 - - -
3. Band 3: £65M to £105M Savings 30.0% 12.0 - 1.5 4.5 6.0 -
4. Band 4: £105M to £145M Savings 40.0% 4.0 - - - 2.8 1.2
5. Band 5: £145M to £185M Savings 50.0% - - - - - -
6. Band 6: £185M to £225M Savings 55.0% - - - - - -
7. Band 7: Above £225M Savings 59.0% - - - - - -

Total Fee 24.0 7.0 2.5 4.5 8.8 1.2

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 619 
OFFICIAL SENSITIVE - COMMERCIAL

SCENARIO B: SUSTAINABLE SAVINGS EACH YEAR (ALTERNATIVE PROFILE)

Period From 01-Apr-14 01-Apr-15 01-Apr-16 01-Apr-17 01-Apr-18


Period To 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 31-Mar-19
Authority Financial Year 1 2 3 4 5
Months In Period 12 12 12 12 12

Operational Cash RDEL Incentive Fee Summary

Operational Cash RDEL Fee Summary

Operational Cash RDEL (OCRFBAyn) 26,003.0 2,575.0 2,652.0 2,732.0 2,814.0 2,898.0

Previous Years Net Savings (excluding overspends) = NPYOSyn (898.3) - (60.0) (70.0) (110.0) (112.0)
Previous Years non sustainable savings added back (actual sum agreed as part of TCV) - - - - - -
Previous Years Net Savings excluding Non Sustainable savings and overspends NPYOSyn (898.3) - (60.0) (70.0) (110.0) (112.0)

Adjusted baseline excluding previous years non sustainable savings (OCRFBAyn - NPYOSyn) 25,104.8 2,575.0 2,592.0 2,662.0 2,704.0 2,786.0

Operational Cash RDEL (OCRFBAyn) 26,003.0 2,575.0 2,652.0 2,732.0 2,814.0 2,898.0
RDEL (Savings) / Overspends (1,013.3) (60.0) (70.0) (110.0) (112.0) (115.0)
Current Year RDEL Cost (Excluding One Off Savings) = AOCyn 24,989.8 2,515.0 2,582.0 2,622.0 2,702.0 2,783.0

o/b including (Overspends) / Savings - 60.0 70.0 110.0 112.0


Incremental Savings = ((OCRFBAyn - NPYOSyn) - AOCyn) 115.0 60.0 10.0 40.0 2.0 3.0
c/b including (Overspends) / Savings 60.0 70.0 110.0 112.0 115.0

Change in c/b excluding overspends 60.0 10.0 40.0 2.0 3.0


Cumulative incremental savings excluding overspends 60.0 70.0 110.0 112.0 115.0

Incremental Savings Shared

1. Band 1: £0M to £25M Savings 25.0 25.0 25.0 25.0 - - - -


2. Band 2: £25M to £65M Savings 65.0 40.0 40.0 35.0 5.0 - - -
3. Band 3: £65M to £105M Savings 105.0 40.0 40.0 - 5.0 35.0 - -
4. Band 4: £105M to £145M Savings 145.0 40.0 10.0 - - 5.0 2.0 3.0
5. Band 5: £145M to £185M Savings 185.0 40.0 - - - - - -
6. Band 6: £185M to £225M Savings 225.0 40.0 - - - - - -
7. Band 7: Above £225M Savings n/a n/a - - - - - -

Total Savings 115.0 60.0 10.0 40.0 2.0 3.0

Fee

1. Band 1: £0M to £25M Savings - - - - - - -


2. Band 2: £25M to £65M Savings 20.0% 8.0 7.0 1.0 - - -
3. Band 3: £65M to £105M Savings 30.0% 12.0 - 1.5 10.5 - -
4. Band 4: £105M to £145M Savings 40.0% 4.0 - - 2.0 0.8 1.2
5. Band 5: £145M to £185M Savings 50.0% - - - - - -
6. Band 6: £185M to £225M Savings 55.0% - - - - - -
7. Band 7: Above £225M Savings 59.0% - - - - - -

Total Fee 24.0 7.0 2.5 12.5 0.8 1.2

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 620 
OFFICIAL SENSITIVE - COMMERCIAL

SCENARIO C: OVERSPENDS IN YEARS 2 AND 4

Period From 01-Apr-14 01-Apr-15 01-Apr-16 01-Apr-17 01-Apr-18


Period To 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 31-Mar-19
Authority Financial Year 1 2 3 4 5
Months In Period 12 12 12 12 12

Operational Cash RDEL Incentive Fee Summary

Operational Cash RDEL Fee Summary

Operational Cash RDEL (OCRFBAyn) 26,003.0 2,575.0 2,652.0 2,732.0 2,814.0 2,898.0

Previous Years Net Savings (excluding overspends) = NPYOSyn (446.3) - - - (90.0) -


Previous Years non sustainable savings added back (actual sum agreed as part of TCV) - - - - - -
Previous Years Net Savings excluding Non Sustainable savings and overspends NPYOSyn (446.3) - - - (90.0) -

Adjusted baseline excluding previous years non sustainable savings (OCRFBAyn - NPYOSyn) 25,556.8 2,575.0 2,652.0 2,732.0 2,724.0 2,898.0

Operational Cash RDEL (OCRFBAyn) 26,003.0 2,575.0 2,652.0 2,732.0 2,814.0 2,898.0
RDEL (Savings) / Overspends (421.3) - 30.0 (90.0) 70.0 (75.0)
Current Year RDEL Cost (Excluding One Off Savings) = AOCyn 25,581.8 2,575.0 2,682.0 2,642.0 2,884.0 2,823.0

o/b including (Overspends) / Savings - - (30.0) 60.0 (100.0)


Incremental Savings = ((OCRFBAyn - NPYOSyn) - AOCyn) (25.0) - (30.0) 90.0 (160.0) 75.0
c/b including (Overspends) / Savings - (30.0) 60.0 (100.0) (25.0)

Change in c/b excluding overspends - - 60.0 - -


Cumulative incremental savings excluding overspends - - 60.0 60.0 60.0

Incremental Savings Shared

1. Band 1: £0M to £25M Savings 25.0 25.0 25.0 - - 25.0 - -


2. Band 2: £25M to £65M Savings 65.0 40.0 35.0 - - 35.0 - -
3. Band 3: £65M to £105M Savings 105.0 40.0 - - - - - -
4. Band 4: £105M to £145M Savings 145.0 40.0 - - - - - -
5. Band 5: £145M to £185M Savings 185.0 40.0 - - - - - -
6. Band 6: £185M to £225M Savings 225.0 40.0 - - - - - -
7. Band 7: Above £225M Savings n/a n/a - - - - - -

Total Savings 60.0 - - 60.0 - -

Fee

1. Band 1: £0M to £25M Savings - - - - - - -


2. Band 2: £25M to £65M Savings 20.0% 7.0 - - 7.0 - -
3. Band 3: £65M to £105M Savings 30.0% - - - - - -
4. Band 4: £105M to £145M Savings 40.0% - - - - - -
5. Band 5: £145M to £185M Savings 50.0% - - - - - -
6. Band 6: £185M to £225M Savings 55.0% - - - - - -
7. Band 7: Above £225M Savings 59.0% - - - - - -

Total Fee 7.0 - - 7.0 - -

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 621 
OFFICIAL SENSITIVE - COMMERCIAL

SCENARIO D: PER SCENARIO B WITH NON-SUSTAINABLE SAVING IN YEAR 4

Period From 01-Apr-14 01-Apr-15 01-Apr-16 01-Apr-17 01-Apr-18


Period To 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 31-Mar-19
Authority Financial Year 1 2 3 4 5
Months In Period 12 12 12 12 12

Operational Cash RDEL Incentive Fee Summary

Operational Cash RDEL Fee Summary

Operational Cash RDEL (OCRFBAyn) 26,003.0 2,575.0 2,652.0 2,732.0 2,814.0 2,898.0

Previous Years Net Savings (excluding overspends) = NPYOSyn (898.3) - (60.0) (70.0) (110.0) (112.0)
Previous Years non sustainable savings added back (actual sum agreed as part of TCV) 1.0 - - - - 1.0
Previous Years Net Savings excluding Non Sustainable savings and overspends NPYOSyn (897.3) - (60.0) (70.0) (110.0) (111.0)

Adjusted baseline excluding previous years non sustainable savings (OCRFBAyn - NPYOSyn) 25,105.8 2,575.0 2,592.0 2,662.0 2,704.0 2,787.0

Operational Cash RDEL (OCRFBAyn) 26,003.0 2,575.0 2,652.0 2,732.0 2,814.0 2,898.0
RDEL (Savings) / Overspends (1,013.3) (60.0) (70.0) (110.0) (112.0) (115.0)
Current Year RDEL Cost (Excluding One Off Savings) = AOCyn 24,989.8 2,515.0 2,582.0 2,622.0 2,702.0 2,783.0

o/b including (Overspends) / Savings - 60.0 70.0 110.0 112.0


Incremental Savings = ((OCRFBAyn - NPYOSyn) - AOCyn) 116.0 60.0 10.0 40.0 2.0 4.0
c/b including (Overspends) / Savings 60.0 70.0 110.0 112.0 116.0

Change in c/b excluding overspends 60.0 10.0 40.0 2.0 4.0


Cumulative incremental savings excluding overspends 60.0 70.0 110.0 112.0 116.0

Incremental Savings Shared

1. Band 1: £0M to £25M Savings 25.0 25.0 25.0 25.0 - - - -


2. Band 2: £25M to £65M Savings 65.0 40.0 40.0 35.0 5.0 - - -
3. Band 3: £65M to £105M Savings 105.0 40.0 40.0 - 5.0 35.0 - -
4. Band 4: £105M to £145M Savings 145.0 40.0 11.0 - - 5.0 2.0 4.0
5. Band 5: £145M to £185M Savings 185.0 40.0 - - - - - -
6. Band 6: £185M to £225M Savings 225.0 40.0 - - - - - -
7. Band 7: Above £225M Savings n/a n/a - - - - - -

Total Savings 116.0 60.0 10.0 40.0 2.0 4.0

Fee

1. Band 1: £0M to £25M Savings - - - - - - -


2. Band 2: £25M to £65M Savings 20.0% 8.0 7.0 1.0 - - -
3. Band 3: £65M to £105M Savings 30.0% 12.0 - 1.5 10.5 - -
4. Band 4: £105M to £145M Savings 40.0% 4.4 - - 2.0 0.8 1.6
5. Band 5: £145M to £185M Savings 50.0% - - - - - -
6. Band 6: £185M to £225M Savings 55.0% - - - - - -
7. Band 7: Above £225M Savings 59.0% - - - - - -

Total Fee 24.4 7.0 2.5 12.5 0.8 1.6

 
OFFICIAL SENSITIVE - COMMERCIAL 
Page 622 
 
OFFICIAL SENSITIVE - COMMERCIAL
 

SCHEDULE 8
BASE CASE

The Base Case details the Cash RDEL Financial Baseline, the Disposals Baseline and the Projects Baseline

(£m) 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

RDEL

Cash RDEL
Operational Cash RDEL Financial Baseline 2,468 2,313 2,205 2,172 2,139 2,170 2,195 2,228 2,278 2,322 2,373
Ring-fenced Baseline adjustments 8 37 32 40 53 57 59 62 65 57 59
Operational Cash RDEL Financial Baseline (unspecified projects) 3 2 49 54 54 52 55 57 47 48 49
Total Operational Cash RDEL Financial Baseline 2,480 2,352 2,286 2,266 2,246 2,280 2,308 2,347 2,391 2,427 2,481
Utilities Cash RDEL Financial Baseline 343 360 333 306 306 300 303 306 308 314 321
Cash RDEL Financial Baseline 2,823 2,712 2,620 2,572 2,552 2,580 2,611 2,653 2,698 2,742 2,802

Financial Baseline (RDEL) 2,823 2,712 2,620 2,572 2,552 2,580 2,611 2,653 2,698 2,742 2,802
RDEL Control Totals 2,654 2,398 2,456 2,342 2,257 2,261 2,250 2,228 2,229 2,240 2,289
Cash RDEL CT "delta" (169) (314) (164) (230) (295) (319) (361) (424) (469) (502) (513)

CDEL

Baseline
Projects Financial Baseline 965 875 997 993 1,015 738 501 560 637 632 624
Disposals Financial Baseline (179) (179) (184) (250) (197) (178) (179) (182) (80) (60) (40)
Financial Baseline (CDEL) 787 696 812 743 819 560 322 378 557 572 584
Note 2 Note 2 Note 2 Note 2 Note 2

Comparison to CTs
Projects and Disposals 787 696 812 743 819 560 322 378 557 572 584
CDEL Control Totals 787 696 812 743 819 560 322 378 557 572 584

Page 623 
OFFICIAL SENSITIVE - COMMERCIAL  
 
OFFICIAL SENSITIVE - COMMERCIAL
 

Notes:
1. As Control Totals have only been issued for 10 years to DIO, figures for 24/25
are based on 23/24 uplifted by 2.2%
2. Disposal targets and CDEL funding from 20/21onwards are still subject to
discussion and further agreement with DG Fin. The disposal targets are
currently derived from the final issued ABC14 CDEL Control Totals
3. "unspecified projects". The Authority to approve expenditure against this
funding has not been delegated by the Authority to DIDO. Delegation to
approve expenditure against this funding will be given when requirements are
confirmed.

The Authority shall make available additional funding (in addition to that contained
within the Base Case) of £20m to fund any additional costs directly related to
implementation of DIDO’s Information Management System (“IMS”). Subject
always to the Contractor having procured that DIDO has managed the implementation
of the IMS system in accordance with standards required by Clause 9.1(h) such
funding shall be available to be drawn down by DIDO as and when needed for such
purposes. The Parties acknowledge and agree that the full costs of IMS
implementation cannot be predicted with certainty and that, in the event that
additional funds above £20m are required, the Contractor shall be entitled to submit
business cases for any additional funding which may be required to complete the
implementation of the IMS system (such cases to be considered by the Authority
acting reasonably). For the avoidance of doubt, this does not constitute any form of
commitment on the part of the Authority to approve any such business cases.

Page 624 
OFFICIAL SENSITIVE - COMMERCIAL  
 
OFFICIAL SENSITIVE - COMMERCIAL
 

SCHEDULE 9

PARENT COMPANY GUARANTEE

CAPITA PLC

and

THE SECRETARY OF STATE FOR DEFENCE

GUARANTEE

Page 625 
OFFICIAL SENSITIVE - COMMERCIAL  
 
OFFICIAL SENSITIVE - COMMERCIAL
 
 
THIS GUARANTEE is made on 2014

BETWEEN:

(1) CAPITA PLC, (registered number 2081330), a company incorporated in


England, whose registered office (and address for correspondence) is 71
Victoria Street, Westminster, London, SW1H 0XA (the Guarantor); and

(2) THE SECRETARY OF STATE FOR DEFENCE (the Authority).

WHEREAS:

(A) Capita Busines Services Ltd (Contractor), and the Authority have entered into
an agreement on [____] pursuant to which the Contractor has agreed to place an
executive management team into the Defence Infrastructure Delivery Organisation
(DIDO) and transform DIDO into a world class public sector infrastructure delivery
organisation (the Contract).

(B) It is a condition of the Contract that the Contractor procures the execution and
delivery to the Authority of a guarantee in the form set out herein.

(C) The Guarantor has agreed to guarantee the due performance of the Contract by
the Contractor in accordance with the terms and conditions of this Guarantee.

IT IS AGREED:

1. DEFINITIONS AND INTERPRETATION

1.1 Words and expressions defined in the Contract have the same meaning when
used in this Guarantee unless the context otherwise requires or unless otherwise
defined or provided for in this Guarantee.

2. GUARANTEE

2.1 In consideration of the Authority entering into the Contract (a copy of which
the Guarantor acknowledges having received) with the Contractor, the Guarantor
hereby irrevocably and unconditionally:

(a) guarantees to the Authority, as a continuing obligation, the due, proper and
punctual observance and performance by the Contractor, of each and all of the
obligations, warranties, duties and undertakings of the Contractor under, or
pursuant to, the Contract (the Guaranteed Obligations) as and when such
Guaranteed Obligations shall become due in accordance with the terms of the
Contract;

(b) undertakes to provide all resources and facilities, whether financial or


otherwise, to enable the Contractor to fulfil the Guaranteed Obligations; and

OFFICIAL SENSITIVE - COMMERCIAL

Page 626
OFFICIAL SENSITIVE - COMMERCIAL

(c) undertakes to pay to the Authority, if the Contractor fails to pay the Authority
when due, all such unpaid amounts whatsoever which the Contract provides
are to be paid by the Contractor. Any such amounts shall be due from the
Guarantor as principal debtor and not merely as surety.

2.2 The Guarantor shall perform:

(a) its Guaranteed Obligations under this Guarantee within five Business Days or
such period as is reasonable in the circumstances; and

(b) its payment obligations under this Guarantee within five Business Days,

in each case, after receipt of written notice from Authority in accordance with clause
14, provided only that the Authority shall have first made a demand in writing for
performance of the relevant obligation(s) to the Contractor.

3. INDEMNITY

The Guarantor, as principal obligor and as a separate and independent obligation and
liability from its obligations and liabilities under clause 2.1, undertakes that if any of
its obligations or liabilities under clause 2.1 are or become unenforceable, invalid or
illegal for any reason whatsoever attributable to any act or omission of the Guarantor
or the Contractor (whether or not they are aware of the same), the Guarantor will
separately indemnify and keep indemnified the Authority on demand against any and
all losses, actions, claims, proceedings, liabilities, expenditure or costs suffered or
incurred by the Authority arising out of or in connection with such unenforceability,
invalidity or illegality. The amount payable by the Guarantor under this indemnity
will be equal to the amount it would have had to pay under clause 2 had the relevant
obligations not been unenforceable, invalid or illegal.

4. VARIATION TO THE CONTRACT

The Guarantor hereby authorises the Authority and the Contractor to make any
changes, modifications or variations to the Contract, including a Change under and in
accordance with the Contract, and the Guarantor irrevocably agrees:

(a) that any such change, modification and variation, including a Change under
and in accordance with the Contract, shall be binding on the Guarantor in all
circumstances;

(b) to guarantee the due and punctual performance of the Guaranteed Obligations,
as so amended, modified and varied; and

(c) to perform its obligations in accordance with the terms of this Guarantee,
notwithstanding that such amendment, modification or variation may increase
or otherwise affect the liability of the Guarantor under this Guarantee.

OFFICIAL SENSITIVE – COMMERCIAL


Page 627
OFFICIAL SENSITIVE - COMMERCIAL

5. UNDERTAKINGS

5.1 The Guarantor waives any right it may have to require the Authority (or any
agent on its behalf) to demand, proceed against or enforce any other right or claim for
payment against the Contractor or any other person before claiming from the
Guarantor under this Guarantee, save only for the making of a demand to the
Contractor in accordance with clause 2.2.

6. LIMITATION OF LIABILITY AND DEFENCES

6.1 The Guarantor may:

(a) raise hereunder all objections and defences the Contractor has or would have
under the Contract; and

(b) assume all rights of set-off, defence, counterclaim, limitation and/or exclusion
of liability as the Contractor may have against the Authority under the
Contract,

save for any such rights, objections and defences that arise on grounds of any of the
events or matters set out in clause 6.4.

6.2 The liability of the Guarantor pursuant to this Guarantee shall not exceed
(when taken together with any other amount recovered under the Contract and/or this
Guarantee, the value of any Guaranteed Obligation performed or procured by the
Guarantor, and/or from any other security provided under or pursuant to the terms of
the Contract (excluding any such security provided by the Contractor to the
Authority)) the limits of liability set out in Clause 45 of the Contract.

6.3 The Authority shall not be entitled to receive and retain any amount paid under
this Guarantee to the extent that the Authority has already received payment in respect
of the same claim, whether such payment was made under the Contract or any other
guarantee or security issued to the Authority in respect of the obligations of the
Contractor under the Contract. Any amount received by the Authority which, in
accordance with this clause 6.3, the Authority is not entitled to receive and retain shall
be held by the Authority on trust for the Guarantor, and shall be promptly returned to
the Guarantor, upon the Authority becoming aware that it is not entitled to receive and
retain such amount.

6.4 Save as expressly stated in this Guarantee, the obligations and liability of the
Guarantor under this Guarantee shall remain in full force and effect notwithstanding
any act, omission, event or matter whatsoever, whether or not known to the
Guarantor, the Contractor or the Authority (other than irrevocable payment to the
Authority of amounts under and in accordance with this Guarantee and performance
in full of all Guaranteed Obligations), and nothing shall affect, impair, discharge,
release or otherwise exonerate the Guarantor from any of its liabilities or obligations
under this Guarantee, including the following:

(a) anything (other than such rights, objections and defences of the Contractor
under the Contract as the Guarantor is entitled to raise or assume in

OFFICIAL SENSITIVE – COMMERCIAL


Page 628
OFFICIAL SENSITIVE - COMMERCIAL

accordance with clause 6.1) which would have discharged, reduced or


otherwise adversely affected the liability of the Guarantor, whether as surety,
co-obligor or otherwise, or which would have afforded the Guarantor any legal
or equitable defences;

(b) the existence, validity, obtaining or renewal of any other guarantee, security or
right of recourse, set-off or other right or interest held by the Authority in
relation to the Contract or any other document entered into pursuant to the
Contract or any demand or enforcement, failure to demand or enforce or the
release or waiver of any such guarantee, security, right of recourse, set-off or
other right or interest;

(c) any amendment, variation, assignment, novation, modification or waiver


(express or implied and however substantial or material), to the Contract or
any other document relating to the Contract (which shall be binding upon the
Guarantor in all circumstances, notwithstanding that such amendment,
variation, assignment, novation, modification or waiver may increase or
otherwise affect the liability of the Guarantor);

(d) any release of or granting of time or any other indulgence to the Contractor or
any third party;

(e) any winding up, insolvency, dissolution, reconstruction, reorganisation, legal


limitation, disability, incapacity or lack of corporate power or authority or
other circumstances of, or any change in the constitution or corporate identity
by, the Contractor or any other person; and

(f) any circumstances which might render illegal, invalid, void, voidable or
unenforceable the obligations of the Contractor under the Contract or which
might affect the Authority’s ability to recover amounts from the Contractor,
unless the same effect would also have applied had the Guarantor been party
to the Contract instead of the Contractor.

6.5 The Authority shall be entitled to make multiple claims under this Guarantee
in accordance with clause 16.

7. CONDITIONAL DISCHARGE

7.1 Any release, compromise, discharge or settlement by the Guarantor and the
Authority in relation to this Guarantee shall be conditional on no right, security,
disposition or payment to the Authority by the Guarantor, the Contractor or any other
person being avoided, set aside or ordered to be refunded pursuant to any enactment
or law relating to breach of duty by any person, bankruptcy, liquidation,
administration, protection from creditors generally or insolvency for any other reason.

7.2 If any such right, security or disposition is avoided, set aside or ordered to be
refunded, the Authority shall be entitled subsequently to enforce this Guarantee as if
such release, compromise, discharge or settlement had not occurred and any such
security, disposition or payment had not been made.

OFFICIAL SENSITIVE – COMMERCIAL


Page 629
OFFICIAL SENSITIVE - COMMERCIAL

8. EXPIRY

8.1 The obligations and liabilities of the Guarantor under this Guarantee shall
constitute and be continuing obligations and shall remain in full force and effect until
the date on which all the obligations and liabilities of the Contractor under the
Contract have been satisfied or performed in full in accordance with the Contract,
notwithstanding any intermediate satisfaction or performance of such obligations by
the Contractor, the Guarantor or any other party.

8.2 The expiry of this Guarantee in accordance with clause 8.1 shall not affect any
liabilities or obligations of the Guarantor which have arisen or accrued or are related
or attributable to matters occurring prior to the date of expiry of this Guarantee.

9. REPRESENTATIONS

The Guarantor represents and warrants to the Authority that:

(a) it is duly organised, validly existing and in good standing under the law of the
jurisdiction of its organisation;

(b) it has all necessary requisite power and authority, and has taken all necessary
corporate action, to enable it to enter into this Guarantee and perform its
obligations under this Guarantee;

(c) its obligations under this Guarantee shall, when executed, constitute valid and
legally binding obligations of the Guarantor;

(d) the Guarantor does not require the consent, approval or authority of any other
person to enter into or perform its obligations under this Guarantee;

(e) it has no contemplation of filing, and has not filed for, insolvency or any other
form of analogous proceedings;

(f) it is not engaged in any actions, litigation or arbitration proceedings or


investigations which may impair its capacity or ability to perform its
obligations and duties under this Guarantee and, to its knowledge, no such
actions, litigation or arbitration proceedings or investigations have been
threatened or are pending against it;

(g) it has not been subject to any fines, penalties, injunctive relief or any other
civil or criminal liabilities which have or may adversely effect its ability to
perform its obligations and duties under this Guarantee;

(h) the execution of this Guarantee (and the performance of all obligations
contained in the Guarantee) does not and will not constitute a breach of, or a
default under, any law, regulation or official directive to which the Guarantor
is subject or any agreement by which the Guarantor is bound and the
Guarantee will be valid, binding and enforceable in accordance with the terms
of all such agreements;

OFFICIAL SENSITIVE – COMMERCIAL


Page 630
OFFICIAL SENSITIVE - COMMERCIAL

(i) to the best of its knowledge, there are no pending notices of violation of any
rules, decrees, awards, permits or orders which may have a material effect on
its ability to perform its obligations under this Guarantee;

(j) it has taken all necessary action to perform the obligations it is assuming
pursuant to the terms of this Guarantee; and

(k) it has not entered into this Guarantee in reliance on any representation,
warranty or undertaking which is not set out in this Guarantee.

10. PAYMENTS

10.1 All sums payable by the Guarantor under this Guarantee shall be paid, no later
than the time required under clause 2.2, in full to the Authority without any set-off or
counterclaim and free and clear of any present or future deduction or withholding on
account of taxes, duties, levies, assessments and/or charges of any kind (except for
those required by any law or regulation binding on the Guarantor), in freely
transferable, cleared funds in Sterling.

10.2 If any deduction or withholding is required to be made by law or regulation


binding on the Guarantor, the Guarantor shall pay that additional amount which is
necessary to ensure that the Authority receives a net amount equal to the full amount
which it would have received if the payment had been made without the deduction or
withholding.

10.3 If the Guarantor fails to pay any amount payable by it under this Guarantee on
its due date in accordance with clause 2.2, interest shall accrue on the overdue amount
from the date on which it fell due up to the date of actual payment (both before and
after judgment) at the Prescribed Rate, but without any double-counting with any
interest accruing on the relevant overdue amount under Clause 19.21 of the Contract.
Any interest accruing under this clause shall be immediately due and payable by the
Guarantor on demand by the Authority. Notwithstanding the foregoing, no interest
under this clause 10.3 shall accrue or be payable in addition to interest accruing on the
relevant overdue amount in accordance with Clause 19.21 of the Contract.

10.4 Any certificate or determination by the Authority of the amount due under this
Guarantee shall, in the absence of any manifest error, be conclusive evidence of the
matters to which it relates.

11. COSTS

The Guarantor shall, on a full indemnity basis, pay to the Authority on demand the
amount of all costs and expenses (including reasonable legal and out of pocket
expenses and any value added tax on those costs and expenses) which the Authority
incurs in connection with:

(a) any discharge or release under this Guarantee; and

(b) the preservation, exercise or enforcement of any rights under or in connection


with this Guarantee or any attempt to (an Enforcement Action), provided that:

OFFICIAL SENSITIVE – COMMERCIAL


Page 631
OFFICIAL SENSITIVE - COMMERCIAL

(i) the Guarantor takes any action to perform any of the Guaranteed
Obligations in respect of such Enforcement Action; or

(ii) the Guarantor makes any payment in connection with the Contract in
respect of such Enforcement Action;

(iii) any court, arbitration or other dispute resolution process finds that the
Guarantor is required to perform any of the Guaranteed Obligations or
make any payment in connection with the Contract, in respect of such
Enforcement Action.

12. ASSIGNMENT

12.1 The Guarantor shall not, without the Authority’s prior written consent (such
consent to be granted at the absolute discretion of the Authority), assign, novate or
otherwise transfer its rights or obligations under this Guarantee.

12.2 The Authority may assign, transfer or novate all or any of its rights, title and
interest in this Guarantee to any person to whom its rights, title and interest in the
Contract is or are assigned, transferred or novated in accordance with Clause 37.1 of
the Contract. The Authority hereby undertakes to notify the Guarantor in writing of
any such assignment, transfer or novation.

12.3 In the event that this Guarantee should become invalid or otherwise cease to
exist as a result of:

(a) the exercise by the Authority of its rights under Clause 37.1 of the Contract to
assign, transfer or novate its rights, title and interest in the Contract; or

(b) the accession of another person to the Contract as Authority thereunder in


accordance with the terms of the Contract,

the Guarantor undertakes to replace this Guarantee with a valid guarantee on the same
terms and conditions as this Guarantee in respect of the remainder of the term of this
Guarantee.

12.4 Clause 12.3 shall survive any termination or expiration of this Guarantee that
occurs as a result of any of the events described in paragraphs (a) and (b) of clause
12.3, and shall remain valid and enforceable by the Authority and/or any person to
whom the relevant rights, title or interest are assigned or transferred or who accedes to
the Contract as described therein, at any time up to the expiry of this Guarantee in
accordance with clause 8.1.

13. FURTHER ASSURANCE

The Guarantor agrees to perform (or procure the performance of) all further acts and
execute and deliver such further documents, as may be required by law or as may be
reasonably necessary, to implement and/or give effect to this Guarantee and the
matters set out herein.

OFFICIAL SENSITIVE – COMMERCIAL


Page 632
OFFICIAL SENSITIVE - COMMERCIAL

14. NOTICES

14.1 All notices under, or in connection, with this Guarantee shall, unless otherwise
stated, be given in writing by hand or recorded delivery to the relevant party at the
address for service set out below, or to such other address in the United Kingdom as
each party may specify by notice in writing to the other party.

14.2 The address details of the Guarantor and the Authority are as follows (or such
other address details which may be subsequently notified by the relevant party):

Guarantor: Address: 71 Victoria Street, Westminster, London,


SW1H 0XA

Name: Mr Lawrence Eaton

Title: Head of Legal and Commercial Group

Authority: Address: Building 18, Piave Lines, Catterick Garison

Name: Mrs R. Pearson

Title: Authority’s Commercial Officer

14.3 Any such notice or other communication shall be deemed to have been
received by the party to whom it is addressed when delivered, provided that, if any
such notice, demand or other communication would otherwise be deemed to be given
or made later than 17.00 hours (London time), such notice, demand or other
communication shall be deemed to be given or made at 09.00 hours (London time) on
the next Business Day.

15. WAIVER

15.1 No delay or omission by the Authority in exercising any right, power or


privilege under this Guarantee shall impair or be construed as a waiver of such right,
power or privilege nor shall any single or partial exercise of any such right, power or
privilege preclude any further exercise of such right, power or privilege or the
exercise of any other right, power or privilege.

15.2 A waiver or variation given or consent granted by the Authority under this
Guarantee shall be effective only if given in writing, signed by the Authority and then
only in the instance and for the purpose for which it is given.

16. RIGHTS CUMULATIVE AND CONTINUING

The Authority’s rights under the Guarantee are cumulative and may be exercised as
often as the Authority considers appropriate. This Guarantee is a continuing guarantee
for the payment of all Guaranteed Obligations and shall not be satisfied by any
intermediate payment or discharge of the Guaranteed Obligations in whole or in part.

OFFICIAL SENSITIVE – COMMERCIAL


Page 633
OFFICIAL SENSITIVE - COMMERCIAL

17. PARTIAL INVALIDITY

The invalidity, illegality or unenforceability in whole or in part of any of the


provisions of this Guarantee, in any respect under any law, shall not affect the
validity, legality and enforceability of the remaining part or provisions of this
Guarantee.

18. ENTIRE AGREEMENT

This Guarantee sets out the entire agreement and understanding between the parties in
respect of this Guarantee. It is agreed that:

(a) no party has entered into this Guarantee in reliance upon any representation,
warranty or undertaking of any other party which is not expressly set out or
referred to in this Guarantee;

(b) (except for any breach of any express warranty under this Guarantee) no party
shall have any claim or remedy under this Guarantee in respect of
misrepresentation (whether negligent or otherwise, and whether made prior to
or in this Guarantee) or untrue statement made by any other party; and

(c) this clause shall not exclude liability for fraudulent misrepresentation.

19. COUNTERPARTS

This Guarantee may be executed in any number of counterparts and by the parties to it
on separate counterparts, each of which shall be original but all of which together
shall constitute one and the same instrument.

20. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

Subject to clause 12.4, a person who is not a party to this Guarantee shall have no
right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its
terms.

21. GOVERNING LAW

This Guarantee (including any non-contractual obligations arising out of or in


connection with it), and any dispute or claim arising out of or in connection with it or
its subject matter, is governed by and shall be construed in accordance with the laws
of England and Wales and the parties irrevocably agree that the courts of England and
Wales are to have exclusive jurisdiction to settle any disputes which may arise out of
or in connection with this Guarantee (including any non-contractual obligations
arising out of or in connection with it).

OFFICIAL SENSITIVE – COMMERCIAL


Page 634
OFFICIAL SENSITIVE - COMMERCIAL

IN WITNESS whereof this Guarantee has been executed as a deed and delivered on the day and
date referred to above.

Executed as a deed, but not delivered until )


the first date specified on page 1, by )
CAPITA PLC by a director in the )
presence of a witness: ) Signature

Name (block
capitals)
Director

Witness
signature

Witness name
(block capitals)

Witness address

The Corporate Seal of the )


SECRETARY OF STATE )
hereto affixed is authenticated by: )

……………………………….
 

OFFICIAL SENSITIVE – COMMERCIAL


Page 635
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 10

INSURANCE

1. THIRD PARTY PUBLIC & PRODUCTS LIABILITY INSURANCE

1.1 Insured

Contractor

1.2 Interest

To indemnify the Insured in respect of all sums which the Insured shall become legally
liable to pay as damages, including claimant's costs and expenses, in respect of
accidental:

(a) death or bodily injury to or sickness, illness or disease contracted by any person;
and

(b) loss of or damage to property,

happening during the Period of Insurance and arising out of or in connection with the
Contract.

1.3 Limit of Indemnity

Not less than £10,000,000 in respect of any one occurrence, the number of occurrences
being unlimited, but £10,000,000 any one occurrence and in the aggregate per annum in
respect of products and pollution liability.

1.4 Territorial Limits

Worldwide

1.5 Jurisdiction and choice of law relating to policy interpretation

English Courts and in accordance with the laws of England & Wales

1.6 Period of Insurance

From the Commencement Date for the duration of this Contract and renewable on an
annual basis unless agreed otherwise.

1.7 Cover Features and Extensions

Indemnity to principals clause.

1.8 Principal Exclusions

(a) War and related perils.

(b) Nuclear and radioactive risks.


OFFICIAL SENSITIVE – COMMERCIAL
Page 636
OFFICIAL SENSITIVE - COMMERCIAL

(c) Liability for death, illness, disease or bodily injury sustained by employees of the
Insured during the course of their employment.

(d) Liability arising out of the use of mechanically propelled vehicles whilst required
to be compulsorily insured by legislation in respect of such vehicles.

(e) Liability in respect of predetermined penalties or liquidated damages imposed


under any contract entered into by the Insured.

(f) Liability arising out of technical or professional advice other than in respect of
death or bodily injury to persons or damage to third party property.

(g) Liability arising from the ownership, possession or use of any aircraft or marine
vessel.

(h) Liability arising from seepage and pollution unless caused by a sudden,
unintended and unexpected occurrence.

1.9 Maximum Deductible

Not to exceed £750 for each and every third party property damage claim (personal
injury claims to be paid in full).

2. PROFESSIONAL INDEMNITY INSURANCE

2.1 Insured

Contractor

2.2 Interest

To indemnify the Insured for all sums which the Insured shall become legally liable to
pay (including claimant’s costs and expenses) as a result of claims first made against the
Insured during the Period of Insurance by reason of any negligent act, error and/or
omission arising from or in connection with the Contract.

2.3 Limit of Indemnity

Not less than £10,000,000 in respect of any one claim and in the aggregate per annum.

2.4 Territorial Limits

Worldwide

2.5 Jurisdiction and choice of law relating to policy interpretation

English Courts and in accordance with the laws of England & Wales

2.6 Period of Insurance

OFFICIAL SENSITIVE – COMMERCIAL


Page 637
OFFICIAL SENSITIVE - COMMERCIAL

From the Commencement Date for the duration of this Contract and renewable on an
annual basis unless agreed otherwise and a period of six years following the Expiry Date
or Termination Date, whichever occurs earlier.

2.7 Cover Features and Extensions

Retroactive cover to apply to any claims made policy wording in respect of this Contract
or retroactive date to be no later than the date of this Contract.

2.8 Principal Exclusions

(a) War and related perils

(b) Nuclear and radioactive risks

2.9 Maximum Deductible

Not to exceed £500,000 each and every claim.

3. UNITED KINGDOM COMPULSORY INSURANCES

3.1 The Contractor is required to meet its United Kingdom, and all other statutory insurance
obligations in full. Insurances are required to comply with all statutory requirements
including, but not limited to, United Kingdom employers' liability insurance and motor
third party liability insurance.

3.3 The employers' liability insurance shall contain an indemnity to principals clause under
which the Authority shall be indemnified in respect of claims made against the
Authority arising from the acts or omissions of, or the performance by, the Contractor of
the services under this Contract.

OFFICIAL SENSITIVE – COMMERCIAL


Page 638
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 11

OPTIONS

In this Schedule 11, unless the context otherwise requires:

Asset Strategy & means the directorate established within DIDO by the Contractor at
Portfolio Directorate the Effective Date to manage all matters relating to footprint,
strategic asset management and disposals

Commercial function means the function established within DIDO by the Contractor at the
Effective Date to manage commercial matters both in relation to
DIDO and the Contractor

Customers means end users, service personnel, civilian support staff or any
individual or group receiving Soft FM services from DIDO or
DIDO’s Industry Partners

Defence End Users means Installation Commanders, Commanding Officers and senior
site managers

DIDO Academy means the mechanism by which the Contractor will supplement
existing Authority training and development courses with targeted
approaches and training interventions to provide a dedicated learning
and development resource to give managers advice and co-ordinate
learning activities across DIDO

Director of Service means a Named Contractor established to manage the resources and
Delivery the delivery of all service functions in training, Hard FM, Soft FM,
utilities and accommodation. The position will report to the COO of
DIDO

Evaluation Point means the meeting to be scheduled by the Authority three months
after the Effective Date to evaluate the success of the first three
months of DIDO

Finance Function means the function established within DIDO by the Contractor at the
Effective Date to manage financial matters both in relation to DIDO
and the Contractor

Finance & Commercial means the directorate established within DIDO by the Contractor at
Directorate the Effective Date to manage financial and commercial matters both
in relation to DIDO and the Contractor

HESTIA means the Authority’s change programme to consolidate existing

OFFICIAL SENSITIVE – COMMERCIAL


Page 639
OFFICIAL SENSITIVE - COMMERCIAL

Soft FM contracts into nine multi-activity regional contracts

Industry Partners means any contractor supporting the delivery of services to DIDO,
excluding the Contractor

Infrastructure means the Authority’s information management system based on the


Management System IBM Tririga technology platform
(IMS)

JSPs means Joint Service Publications

MGS means MoD Guarding Services

Operations means the function retained within DIDO by the Contractor at the
Development & Effective Date within the Operations directorate to ensure that all
Coherence services delivered by DIDO are joined up and integrated and that
projects and programmes are best designed to meet the requirements
of the Defence End User and Customer

Operations Directorate means the directorate established within DIDO by the Contractor at
the Effective Date to manage and deliver service in Hard and Soft
FM, Training, Accommodation, Capital Projects & Programmes,
PFI, Contingency Operations and Operations Development &
Coherence

Regional Service means the organisational plan for service delivery describing heads
Delivery Matrix of function and regional service delivery

Strategic Initiatives means the function established within the Transformation & Change
Function directorate within DIDO by the Contractor at the Effective Date to
lead continuous improvement and innovation across DIDO

Strategic Stakeholder means the function established within DIDO by the Contractor at the
Engagement & Effective Date to manage internal and external communications and
Communications stakeholder management matters across DIDO

Total FM Service Line means the combined resources and service delivery functions of the
current Hard FM and Soft FM work streams

VERs means the MOD Voluntary Early Release scheme as described in the
MOD Agreement on Managing Staff Surpluses document of that title
dated 9 January 2012 as provided in the Data Room and as may be
amended by the MOD from time to time

Workforce Plan means the output from the workforce planning activities

OFFICIAL SENSITIVE – COMMERCIAL


Page 640
OFFICIAL SENSITIVE - COMMERCIAL

1. GENERAL PRINCIPLES

1.1 The Contractor shall, and shall procure that DIDO will implement requirements to
deliver the Options such that:

(a) services to deliver options will be integrated into the proposed top-level DIDO
organisation structure with no additional Named Contractors required services;

(b) services will be provided through the proposed service delivery matrix within DIDO, in
the Service Delivery function of the Operations directorate under the Chief Operating
Officer and Head of Service Delivery;

(c) best practices proposed within other IIP sub-strategies (e.g. Soft FM, Hard FM, training)
will be adopted, as appropriate, in the provision of the options services;

(d) services will be provided by the most efficient and effective means, exploiting the
expertise and capabilities of Industry Partners were possible; and

(e) all key stakeholder groups and individuals impacted by exercising the Option are
identified and consulted with to ensure that changes are designed and implemented in a
considered manner.

1.2 The Authority shall, upon execution of any Option, revise the Financial Baseline to
account for the expanded scope of services, the increased number of staff brought into DIDO to
provide the service, and any existing efficiency plans.

1.3 The Contractor shall, and shall procure that DIDO will manage surplus staff, staff
outsourcing and VERS in accordance with the provisions of Schedule 3 Part 10 Workforce
planning, development and staff engagement.

2. OPTION 1 - UNARMED GUARDING

2.1 The Contractor shall, and shall procure that DIDO will, in order to implement the
requirement of the exercised option:

(a) within three months of the option being exercised:

(i) retain the guarding service within DIDO as a directly employed service;

(ii) establish the unarmed guarding service office within Operations Development &
Coherence;

(iii) integrate the existing MGS management team into DIDO’s service delivery
structure retaining the existing Head of MOD Guard Services to fulfil the
unarmed guard service line lead role;

(b) from the end of the Transformation Period or within three months of the option being
exercised, whichever is the sooner:

(i) integrate the unarmed guard service into the Regional Service Delivery Matrix as
a service line alongside other service lines of Total FM, Accommodation,
Training and Energy, Utilities & Sustainability;

OFFICIAL SENSITIVE – COMMERCIAL


Page 641
OFFICIAL SENSITIVE - COMMERCIAL

(c) within 24 months of the date at which the option is exercised:

(i) analyse guarding requirements, manning levels, technology solutions and the
application of JSP440 across the Defence Estate through a security review and
design with Security Services Group/seek approval from DIGA for guarding
requirements for each site;

(ii) integrate these requirements with the Defence Estate disposals requirements as
defined in Schedule 3 Part 5 Strategic Asset Management and Disposals;

(d) from the point at which the new HESTIA contracts are procured, include modifications
to allow unarmed guarding services to be integrated into the Soft FM contracts in the
future;

(e) within 48 months of the date at which the option is exercised:

(i) have completed the programme of physical updates to security across the
Defence Estate as approved in the security review in 2.1(c);

(ii) integrate the unarmed guard service into the Total FM service line;

(iii) make the Director of Service Delivery accountable for the provision of unarmed
guarding services and the assurance to the Chief Operating Officer that the
unarmed guarding service is efficient, adequate and meeting the policy
requirements established by DIGA throughout the transition and then ultimately,
in an enduring manner throughout the Contract Period;

(iv) deliver unarmed guarding services through Industry Partners procured through
HESTIA contract modifications, subject to the development and approval by the
Authority of a suitable business case;

(v) transfer MGS staff to Industry Partners; and

(vi) liaise with local Heads of Establishment through local service delivery teams to
ensure that the service being provided by Industry Partners is meeting their
requirements.

2.2 The Contractor shall, and shall procure that DIDO will, in order to implement the
requirement of the exercised option, adjust the Infrastructure Implementation Plans as shown
below:

IIP component Modification


Hard/Soft FM sub-  Modification to Soft FM HESTIA contracts will be required to
strategy (inc. short include unarmed guarding services (model to be agreed with
term transformation) relevant Soft FM supplier)
PFI sub-strategy  Modification to PFI sites that operate guarding contracts
Accommodation sub-  Modification to NHP NGEC contract to include unarmed
strategy guarding into new contract
Training sub-strategy  Modification to Soft FM modules of NTEP contract will be
required to include unarmed guarding (where training estate is
OFFICIAL SENSITIVE – COMMERCIAL
Page 642
OFFICIAL SENSITIVE - COMMERCIAL

IIP component Modification


standalone outside of main defence estate and has its own
guarding requirement)
Programme & projects Security review and assessment could reasonably require minor
delivery (inc. short facility modifications which would need to be delivered through
term transformation) appropriate contract mechanisms
Strategic asset  Consideration to the resources deployed for guarding services will
management/disposals be required in the plan for strategic asset management and
(inc. short term disposals, acquisitions and base optimisation (e.g. can the lay
transformation) down of a base be refined to reduce its guarding requirement)
Workforce planning,  Modification to Workforce Plan, both updating the plan to include
development and staff MGS and ensuring that the MGS lead is involved in the
engagement (inc. workforce planning process through the Director of Service
short term Delivery
transformation)  Modification to skills strategy and plan - whilst MGS have some
Authority-provided 'special to role' training courses, we will
ensure that they are able to access the additional development
opportunities offered by the DIDO Academy and review the
offerings of the Academy to ensure they meet their needs
 Modification to talent management and succession planning -
identification of C1 grades' (and above) potential and/or
absorption of any existing MGS succession planning approach
 Modification to engagement and communications - inclusion of
MGS staff in all engagement and staff communication activities
and interventions, tailored where necessary to meet any lack of
easy access to IT, and
 Modification to performance management - inclusion in the
planned intervention to help line managers to use performance
management processes, tools and techniques to build high
performance and a clear line of sight to mission readiness
 Managing the day to day recruitment, retirement or redundancy of
transferred personnel must be considered; and the actions required
in respect of the eventual TUPE process, including consultation,
to support the transfer to an industry partner must be planned
SBP resource and  Modifications to team structure are as defined in 2.1
management  Modifications to integration and transformation:
o Head of MOD Guard Service to be integrated into the
new proposed Service Delivery function within
Operations directorate as part of the DIDO top-level
organisational structure of Named Contractors and
Authority Personnel staff and include the Head of
MOD Guard Service in the wider DIDO leadership
team
o Director of Service Delivery to understand the increase
in scope of service under his remit as a result of
integrating the unarmed guard service into DIDO (both
OFFICIAL SENSITIVE – COMMERCIAL
Page 643
OFFICIAL SENSITIVE - COMMERCIAL

IIP component Modification


at the Effective Date as a function reporting to them,
and then by the end of the Transformation Period as a
part of the service delivery matrix), and then,
following transition to an Industry Partner, the Total
FM Service Line Lead (not a Named Contractor) needs
to understand the modifications that have been made to
the soft FM contracts under his/her stewardship to
deliver the unarmed guarding service
o Increase in the DIDO staff engagement required at all
levels as part of the Integration Plan by the Named
Contractors fulfilling the Chief Operating Officer and
Director of Service Delivery, with the need to engage
with the 2,800 guarding staff inherited in DIDO at the
Effective Date to update them on the position of the
Contractor within DIDO, the top-level management
structure and reporting lines and accountabilities plus
to engage with relevant Trade Unions
o Extend the on-going engagement plan scope to cover
guard service staff on all sites and make provision for
communicating with them wherever they are based
and whatever shifts they are working
o Mandatory training to be reviewed for the Director of
Service Delivery and the Chief Operating Officer,
based on inheriting the guarding service into
Operations
o Named Contractors and other management to
understand any additional policies or procedures
relating to provision of the guarding service by DIDO
o Details of how the service will be monitored by the
Defence Infrastructure Governing Authority (DIGA)
will need to be formulated including the development
of appropriate key performance indicators and
reporting lines
o Hold a wider evaluation point review at the end of the
Integration Period to ensure that the top-level
organisational design, including the unarmed guarding
function, is operating efficiently and effectively
SBP governance  Modifications to the terms of reference of the DIDO Operations
Board and DIDO Executive Committee whose remit will need to
be extended to cover the provision of unarmed guarding
Interactions and  Modifications to the interactions in the service delivery matrix
dependencies between the Total FM service line and the Regional Service
Delivery Leads are anticipated due to the increase of scope in
covering unarmed guarding
 Modifications to the interactions between DIDO and DIGA are
anticipated due to the need to develop and maintain an integrated
OFFICIAL SENSITIVE – COMMERCIAL
Page 644
OFFICIAL SENSITIVE - COMMERCIAL

IIP component Modification


security management policy (covering not just unarmed guarding
but wider Authority guarding requirements)

2.3 The Contractor anticipates that the following resources shall implement the day to day
operational requirements:

(a) Named Contractor - Chief Operating Officer: shall be accountable for the integration of
the unarmed guarding service into the Operations directorate and for ensuring alignment
with wider DIDO activities;

(b) Named Contractor – Head of Service Delivery: shall be responsible for the integration of
the unarmed guarding service into the Operations directorate, into the Regional Service
Delivery Matrix and will work with the Head of Commercial Named Contractor in the
procurement of an Industry Partner;

(c) Named Contractor – Director of Asset Strategy & Portfolio: shall be responsible for
ensuring unarmed guarding services are aligned to and support land and building
disposal activities;

(d) Head of MoD Guard Services – the Contractor shall procure that the Head of MoD
Guard Services provides leadership and support to the existing MGS team in the
integration into DIDO and transferral of service provision to Industry Partners;

(e) Named Contractor - Head of Workforce & Talent Management: shall lead all workforce
planning and staff engagement activities with regard to integration of the MGS into
DIDO and transferral to Industry Partners;

(f) Named Contractor - Head of Strategic Stakeholder Engagement & Communications:


shall provide support to other Named Contractors in the development of effective
internal and external communications and stakeholder engagement in the design and
integration process;

(g) Named Contractor – Head of Commercial: shall lead the procurement activities to
modify contracts to integrate unarmed guarding services;

(h) Named Contractor – Head of Strategic Initiatives: shall lead activities to identify
continuous improvement and innovation opportunities in the unarmed guarding service;
and

(i) Named Contractor – Associate Finance Director: shall lead activities to revise the
financial baseline to include the revised service.

2.4 The Contractor anticipates the following timeline to implement the requirements, should
the Option be exercised:

Date Milestone

OFFICIAL SENSITIVE – COMMERCIAL


Page 645
OFFICIAL SENSITIVE - COMMERCIAL

Date Milestone
Option exercise +  Retain the guarding service within DIDO as a directly employed
3 months service
 Establish the unarmed guarding service office within Operations
Development & Coherence
 Integrate the existing MGS management team into DIDO’s service
delivery structure retaining the existing Head of MOD Guard Services
to fulfil the unarmed guard service line lead role
End of the  Integrate the unarmed guard service into the Regional Service
Transformation Delivery Matrix as a service line alongside other service lines of Total
Period or Option FM, Accommodation, Training and Energy, Utilities & Sustainability
exercise + 3
months (whichever
is sooner)
Effective Date +  Analyse guarding requirements, manning levels, technology solutions
24 months and the application of JSP440 across the Defence Estate through a
security review and design with Security Services Group/seek
approval from DIGA for guarding requirements for each site
 Integrate these requirements with the Defence Estate disposals
requirements as defined in Schedule 3 Part 5 Strategic Asset
Management and Disposals
HESTIA contract  Include modifications to allow unarmed guarding services to be
procurement integrated into the Soft FM contracts in the future
Effective Date +  Have completed the programme of physical updates to security across
48 months the Defence Estate as approved in the security review in 2.1.3
 Integrate the unarmed guard service into the Total FM service line
 Make the Director of Service Delivery accountable for the provision
of unarmed guarding services and the assurance to the Chief
Operating Officer that the unarmed guarding service is efficient,
adequate and meeting the policy requirements established by the
DIGA throughout the transition and then ultimately, in an enduring
manner through the continuation of service delivery
 Deliver unarmed guarding services through Industry Partners procured
through HESTIA contract modifications
 Transfer MGS staff to Industry Partners
 Liaise with local Heads of Establishment through local service
delivery teams to ensure that the service being provided by Industry
Partners is meeting their requirements

3. OPTION 2 – EXPLOSIVE ORDNANCE CLEARANCE (EOC) GROUP

3.1 The Contractor shall, and shall procure that DIDO will, in order to implement the
requirement of the exercised option:

(a) within three months of the Option being exercised:


OFFICIAL SENSITIVE – COMMERCIAL
Page 646
OFFICIAL SENSITIVE - COMMERCIAL

(i) establish the EOC Assurance Office within Operations Development &
Coherence with responsibility for policy, plans and programmes; and

(ii) assess the EOC requirements across the Defence Estate;

(b) within four months of the Option being exercised:

(i) develop the strategy and procurement documentation in order to procure the
services of an Industry Partner to provide EOC services;

(c) within eight months of the Option being exercised:

(i) have completed the procurement exercise to identify a framework of pre-


approved Industry Partners to provide EOC geophysical survey and/or
excavation services as required, in accordance with taskings developed by the
EOC Assurance Office; and

(d) throughout the Contract Period:

(i) use the IMS system to hold and manage all ordnance data across the Defence
Estate.

3.2 The Contractor shall, and shall procure that DIDO will, in order to implement the
requirement of the exercised option, adjust the Infrastructure Implementation Plans as shown
below:

IIP component Description


Hard/Soft FM sub-  Modifications to HESTIA contracts to include EOC services
strategy (inc. short (model TBA with relevant SFM supplier)
term transformation)
Training sub-strategy  Modifications to HESTIA contracts to include EOC services
(model TBA with relevant Soft FM supplier)
Strategic asset  Consideration to the cost and scheduling for EOC activities will
management/disposals be required in the plan for strategic asset management and
(inc. short term disposals in order to ensure the process is expedited
transformation)
Workforce planning,  Modification to Workforce Plan, both updating the plan to include
development and staff EOC and ensuring that the EOC lead is involved in the workforce
engagement (inc. short planning process through the Director of Service Delivery
term transformation)  Modification to skills strategy and plan - whilst EOC have some
Authority-provided 'special to role' training courses, we will
ensure that they are able to access the additional development
opportunities offered by the DIDO Academy and review the
offerings of the Academy to ensure they meet their needs
 Modification to talent management and succession planning -
identification of C1 grades' (and above) potential and/or
absorption of any existing EOC succession planning approach

OFFICIAL SENSITIVE – COMMERCIAL


Page 647
OFFICIAL SENSITIVE - COMMERCIAL

IIP component Description


 Modification to engagement and communications - inclusion of
EOC staff in all engagement and staff communication activities
and interventions, tailored where necessary to meet any lack of
easy access to IT
 Modification to performance management - inclusion in the
planned intervention to help line managers to use performance
management processes, tools and techniques to build high
performance and a clear line of sight to mission readiness
 Managing the day to day recruitment, retirement or redundancy of
transferred personnel; and actions required in respect of the
eventual TUPE process, including consultation, to support the
transfer to an Industry Partner
SBP resource and  Modifications to team structure are as defined in 3.1
management  Modifications to Integration and transformation:
o Current EOC to be integrated into the new proposed
Service Delivery function within Operations
directorate as part of the DIDO top-level
organisational structure of Named Contractors and
Authority Personnel
o Director of Service Delivery to understand the
increase in scope of service under his remit as a result
of integrating the EOC service into DIDO (both at the
Effective Date as a function reporting to them, and
then by the end of the Transformation Period as a part
of the service delivery matrix), and then, following
transition to an Industry Partner, the Total FM Service
Line Lead (not a Named Contractor) needs to
understand the modifications that have been made to
the Soft FM contracts under his/her stewardship to
deliver the unarmed guarding service
o DIDO staff engagement required at all levels as part of
the Integration Plan by the Named Contractors
fulfilling the Chief Operating Officer and Director of
Service Delivery, with the need to engage with the
newly integrated staff inherited in DIDO at the
Effective Date to update them on the position of the
Contractor within DIDO, the top-level management
structure and reporting lines and accountabilities plus
to engage with relevant Trade Unions
o Extend the on-going engagement plan scope to cover
EOC staff on all sites and make provision for
communicating with them wherever they are based
and whatever shifts they are working
o Mandatory training to be reviewed for the Director of
Service Delivery and the Chief Operating Officer,
based on inheriting the EOC service into Operations

OFFICIAL SENSITIVE – COMMERCIAL


Page 648
OFFICIAL SENSITIVE - COMMERCIAL

IIP component Description


o Named Contractors to understand any additional
policies or procedures relating to provision of the EOC
service by DIDO
o Details of how the service will be monitored by the
Defence Infrastructure Governing Authority (DIGA)
will need to be formulated including the development
of appropriate key performance indicators and
reporting lines
o Hold a wider evaluation point review at some point
after the EOC service is integrated into DIDO to
ensure that the top-level organisational design,
including the EOC service, is operating efficiently and
effectively
SBP governance  Modifications to the terms of reference of the DIDO Operations
Board and DIDO Executive Committee whose remit will need to
be extended to cover the provision of EOC services
Interactions and  Modifications to the interactions in the service delivery matrix
dependencies between the Total FM service line and the Regional Service
Delivery Leads are anticipated due to the increase of scope in
covering EOC
 Modifications to the interactions between DIDO and DIGA are
anticipated due to the need to develop and maintain an integrated
EOC policy

3.3 The Contractor anticipates that the following resources shall implement the day to day
operational requirements:

(a) Named Contractor - Chief Operating Officer: shall be accountable for the integration of
the EOC service into the Operations directorate and for ensuring alignment with wider
DIDO activities;

(b) Named Contractor – Head of Service Delivery: shall be responsible for the integration of
the EOC service into the Operations directorate, into the Regional Service Delivery
Matrix and will work with the Head of Commercial Named Contractor in the
procurement of an Industry Partner;

(c) Named Contractor – Director of Asset Strategy & Portfolio: shall be responsible for
ensuring EOC services are aligned to and support land and building disposal activities;

(d) Head of Operations Development & Coherence – the Contractor shall procure that the
Head of Operations Development & Coherence provides leadership and support to the
existing EOC team in DIDO, on the implementation of the EOC Assurance Offices and
transferral of service provision to Industry Partners;

OFFICIAL SENSITIVE – COMMERCIAL


Page 649
OFFICIAL SENSITIVE - COMMERCIAL

(e) Named Contractor - Head of Workforce & Talent Management: shall lead all workforce
planning and staff engagement activities with regard to integration of EOC services into
DIDO and transferral to Industry Partners;

(f) Named Contractor - Head of Strategic Stakeholder Engagement & Communications:


shall provide support to other Named Contractors in the development of effective
internal and external communications and stakeholder engagement in the design and
integration process;

(g) Named Contractor – Head of Commercial: shall lead the procurement activities to
modify contracts to integrate EOC services;

(h) Named Contractor – Head of Strategic Initiatives: shall lead activities to identify
continuous improvement and innovation opportunities in the EOC service; and

(i) Named Contractor – Associate Finance Director: shall lead activities to revise the
financial baseline to include the revised service.

3.4 The Contractor anticipates the following timeline to implement the requirements, should
the Option be exercised:

Date Milestone
Option exercise +  Establish the EOC Assurance Office within Operations Development
3 months & Coherence with responsibility for policy, plans and programmes;
and
 Assess the EOC requirements across the Defence Estate
Option exercise +  Develop the strategy and procurement documentation in order to
4 months procure the services of an Industry Partner to provide EOC services

Option exercise +  Have completed the procurement exercise to identify a framework of


8 months pre-approved Industry Partners to provide EOC geophysical survey
and/or excavation services as required, in accordance with taskings
developed by the EOC Assurance Office

4. OPTION 3 – PROVISION OF CERTAIN SOFT FM SERVICES ON THE AUTHORITY SITES


THAT ARE NOT CURRENTLY DELIVERED BY DIO THAT MAY BE TRANSFERRED INTO DIO FROM
OTHER TLBS BEFORE OR DURING THE COURSE OF THE CONTRACT

4.1 The Contractor shall, and shall procure that DIDO will, in order to implement the
requirement of the exercised option:

(a) include modifications to allow additional Soft FM services to be integrated into


HESTIA contracts;

(b) where HESTIA contracts have been procured for the region in which the Soft FM
service is to be provided, and within six months of the Option being exercised, deliver
service through modifications to these HESTIA contracts; and

OFFICIAL SENSITIVE – COMMERCIAL


Page 650
OFFICIAL SENSITIVE - COMMERCIAL

(c) where HESTIA contracts have not been procured for the region in which the Soft FM
service is to be provided, and within six months of the Option being exercised, deliver
service through bespoke contracts with the provision to be able to exit from these and
integrate into HESTIA contracts once procured.

4.2 The Contractor shall, and shall procure that DIDO will, in order to implement the
requirement of the exercised option, adjust the Infrastructure Implementation Plans as shown
below:

IIP component Description


Hard/Soft FM sub-  Modifications to HESTIA Soft FM contracts will be required to
strategy (inc. short account for the expansion of the new service in the existing
term transformation) delivery locations.

Training sub-strategy  Where a new site is a training establishment, a modification to the


NTEP contract to include Soft FM provision at this site will be
required.
Overseas sub-strategy  If the new sites are located outside of the UK, changes to overseas
service delivery contracts will need to be implemented to account
for the increase in scope
 Existing Soft FM contracts will need to be backed out of at
appropriate points in time.
Workforce planning,  Existing workforce planning, development and staff engagement
development and staff activities will need to be extended to the newly integrated service.
engagement (inc.
short term
transformation)

4.3 The Contractor anticipates that the following resources shall implement the day to day
operational requirements:

(a) Named Contractor - Chief Operating Officer: shall be accountable for the integration of
the additional Soft FM services into the Operations directorate and for ensuring
alignment with wider DIDO activities;

(b) Named Contractor – Director of Service Delivery: shall be responsible for the
integration of the additional Soft FM services into the Operations directorate, into the
Regional Service Delivery Matrix and will work with the Head of Commercial Named
Contractor in the procurement of an Industry Partner;

(c) Named Contractor - Head of Strategic Stakeholder Engagement & Communications:


shall provide support to other Named Contractors in the development of effective
internal and external communications and stakeholder engagement in the design and
integration process;

(d) Named Contractor – Head of Commercial: shall lead the procurement activities to
modify contracts to integrate the additional Soft FM services; and
OFFICIAL SENSITIVE – COMMERCIAL
Page 651
OFFICIAL SENSITIVE - COMMERCIAL

(e) Named Contractor – Associate Finance Director: shall lead activities to revise the
financial baseline to include the revised service.

4.4 The Contractor anticipates the following timeline to implement the requirements, should
the Option be exercised:

Date Milestone
HESTIA contract  Include modifications to allow additional Soft FM services to be
procurement integrated into HESTIA contracts

Option exercise +  Where HESTIA contracts have been procured for the region in which
6 months the Soft FM service is to be provided, and within six months of the
Option being exercised, deliver service through modifications to these
HESTIA contracts
 Where HESTIA contracts have not been procured for the region in
which the Soft FM service is to be provided, and within six months of
the Option being exercised, deliver service through bespoke contracts
with the provision to be able to exit from these and integrate into
HESTIA contracts once procured

5. OPTION 4 – PROVISION OF SERVICES TO ANY AUTHORITY SITE NOT CURRENTLY


MANAGED BY DIO THAT MAY BE TRANSFERRED INTO DIO FROM OTHER TLBS BEFORE OR
DURING THE COURSE OF THE CONTRACT

5.1 The Contractor shall, and shall procure that DIDO will, in order to implement the
requirement of the exercised option:

(a) include modifications to allow additional sites to be integrated into NGEC/HESTIA


contracts;

(b) where NGEC/HESTIA contracts have been procured for the region in which the site is
located, and within six months of the Option being exercised, deliver service through
modifications to these HESTIA contracts; and

(c) where NGEC/HESTIA contracts have not been procured for the region in which the site
is located, and within six months of the Option being exercised, deliver service through
bespoke contracts with the provision to be able to exit from these and integrate into
NGEC/HESTIA contracts once procured.

5.2 The Contractor shall, and shall procure that DIDO will, in order to implement the
requirement of the exercised option, adjust the Infrastructure Implementation Plans as shown
below:

IIP component Description


Hard/Soft FM sub-  Modifications in NGEC/HESTIA contracts will be required to
strategy (inc. short account for the expansion of service in the new delivery locations
term transformation)

OFFICIAL SENSITIVE – COMMERCIAL


Page 652
OFFICIAL SENSITIVE - COMMERCIAL

Training sub-strategy  Where a new site is a training establishment, a modification to the


NTEP contract to include Hard/Soft FM provision at this site will
be required
Overseas sub-strategy  If the new sites are located outside of the UK, changes to overseas
service delivery contracts will need to be implemented to account
for the increase in scope
 Existing Hard/Soft FM contracts will need to be backed out of at
appropriate points in time
Workforce planning,  Existing workforce planning, development and staff engagement
development and staff activities will need to be extended to the newly integrated service
engagement (inc.
short term
transformation)

5.3 The Contractor anticipates that the following resources shall implement the day to day
operational requirements:

(a) Named Contractor - Chief Operating Officer: shall be accountable for the integration of
the additional sites into the Operations directorate and for ensuring alignment with wider
DIDO activities;

(b) Named Contractor – Director of Service Delivery: shall be responsible for the
integration of the additional sites into the Operations directorate, into the Regional
Service Delivery Matrix and will work with the Head of Commercial Named Contractor
in the procurement of an Industry Partner;

(c) Named Contractor - Head of Strategic Stakeholder Engagement & Communications:


shall provide support to other Named Contractors in the development of effective
internal and external communications and stakeholder engagement in the design and
integration process;

(d) Named Contractor – Head of Commercial: shall lead the procurement activities to
modify contracts to integrate the additional sites; and

(e) Named Contractor – Associate Finance Director: shall lead activities to revise the
financial baseline to include the revised service.

5.4 The Contractor anticipates the following timeline to implement the requirements, should
the Option be exercised:

Date Milestone
NGEC/HESTIA  Include modifications to allow additional sites be integrated into
contract NGEC/HESTIA contracts
procurement

OFFICIAL SENSITIVE – COMMERCIAL


Page 653
OFFICIAL SENSITIVE - COMMERCIAL

Date Milestone
Option exercise +  Where NGEC/HESTIA contracts have been procured for the region in
6 months which the site is located, and within six months of the Option being
exercised, deliver service through modifications to these
NGEC/HESTIA contracts
 Where NGEC/HESTIA contracts have not been procured for the
region in which the site is located, and within six months of the
Option being exercised, deliver service through bespoke contracts
with the provision to be able to exit from these and integrate into
NGEC/HESTIA contracts once procured

6. OPTION 5 – EXTENSION OF THE CONTRACT BY ONE YEAR AT THE SOLE DISCRETION OF


THE AUTHORITY

6.1 The Authority shall have the option to extend the terms of the Contract by up to one year
as defined in clause 2.4 of the Contract.

6.2 The Contractor shall, and shall procure that DIDO will, prior to the original Expiry Date
and considering the additional year:

(a) confirm the availability of any Named Contractors;

(b) make any necessary updates to the Exit Plan; and

(c) develop an updated IIP.

7. DIDO RESOURCE IMPACT ANALYSIS

7.1 The Contractor anticipates that existing DIDO resources within existing roles will be
used to implement changes to meet Option requirements, if executed, through:

(a) utilising efficiency gains as a result of implementing the Regional Service Delivery
Matrix; and

(b) load balancing work across other parts of the service delivery team.

7.2 The parties involved in the delivery of the Options, if executed, are summarised in the
table below where:

(a) R stands for responsible - means those who do the work to achieve the task. There is at
least one role with a participation type of responsible, although others can be delegated
to assist in the work required;

(b) A stands for accountable - means the one ultimately answerable for the correct and
thorough completion of the deliverable or task, and the one who delegates the work to
those responsible;

(c) C stands for consulted - means those whose opinions are sought, typically subject matter
experts; and with whom there is two-way communication; and

OFFICIAL SENSITIVE – COMMERCIAL


Page 654
OFFICIAL SENSITIVE - COMMERCIAL

(d) I stands for informed - means those who are kept up-to-date on progress, often only on
completion of the task or deliverable; and with whom there is just one-way
communication.

Contractor

IIP Corporate
Reach Back
Contractor
STTP staff

Authority
Named

DIDO

DIGA
staff

Ops
Service
Delivery

(R)
Finance

A (C)
Option 1 - Unarmed Guarding Head
R 
Office
Commerci
Commerci
al (C)
al/ Finance
(C)

SAPT (C)

Ops
Service
Delivery

(R)
Finance

Option 2 - Explosive Ordnance A (C)
Head
Clearance Group R 
Office
Commerci
Commerci
al (C)
al/ Finance
(C)

SAPT (C)

Ops
Option 3 - Provision of certain
Service 
Soft FM services on the Authority
Delivery Finance
sites that are not currently
A (R) (C)
delivered by DIO that may be
R  Head 
transferred into DIO from other
Office Commerci
TLBs before or during the course
Commerci al (C)
of the Contract
al/ Finance
(C)
OFFICIAL SENSITIVE – COMMERCIAL
Page 655
OFFICIAL SENSITIVE - COMMERCIAL

Contractor

IIP Corporate
Reach Back
Contractor
STTP staff

Authority
Named

DIDO

DIGA
staff

Ops
Service
Option 4 - Provision of services 
Delivery
to any Authority site not currently Finance
(R)
managed by DIO that may be A (C)

transferred into DIO from other R 
Head
TLBs before or during the course Commerci
Office
of the Contract al (C)
Commerci
al/ Finance
(C)
Option 5 - Extension of the
A  
Contract by one year at the sole
R All All
discretion of the Authority

7.3 The Contractor anticipates, over the Contract Period, that DIDO staff skills and
capabilities will be improved in the following areas:

(a) Defence End User requirements definition, prioritisation and challenge to meet
operational requirements and translate these requirements into cost effective solution
designs;

(b) budget and requirements baselining and monitoring; and

(c) Industry Partner procurement and contract management (including performance


oversight and assurance) and good practice sharing across regions.

8. OPTIONS ASSUMPTIONS

8.1 The Contractor shall procure that DIDO manage the following assumptions for Options
implementation, where executed by the Authority:

Option Assumption Consequence

Unarmed Provision of unarmed guarding services is Potential requirement to rework


guarding limited to sites requiring GL3 and GL4 service design
guarding levels only
Potential negative impact to savings
projections

OFFICIAL SENSITIVE – COMMERCIAL


Page 656
OFFICIAL SENSITIVE - COMMERCIAL

Option Assumption Consequence

Unarmed Provision of unarmed guarding services is Potential requirement to rework


guarding limited to service provided by MoD service design
Guard Service (MGS) staff only
Potential negative impact to savings
projections

Unarmed Provision of unarmed guarding services is Potential requirement to rework


guarding limited to sites within the United service design
Kingdom only
Potential negative impact to savings
projections

Unarmed MGS is transferred to the DIO as a going Potential requirement to rework


guarding concern on 1 April 2013 (by simply service design
'bolting on' the service to the DIO
Enhanced Operating Model (EOM)), with Potential negative impact to savings
an expectation of outsourcing (with projections
Transfer of Undertakings (Protection of
Employment) Regulations (TUPE) as a
major consideration) by the end of 2017

Unarmed MGS will reduce the management Potential requirement to rework


guarding component of MGS at a regional, area and service design
group level from 5, 22 and 107 to 3, 12
and 71 respectively Potential negative impact to savings
projections

Unarmed MGS is reducing from a current (June Potential requirement to rework


guarding 2013) complement of approximately service design
3,000 to approximately 2,100 operating
across approximately 150 sites by April Potential negative impact to savings
2014 through replacement of MGS staff projections
with MPGS staff

Unarmed MGS is supported by guarding contracts Potential requirement to rework


guarding that are currently let by DIO to guard sites service design
scheduled for disposal and at least one
wider service contract (Brize Norton) as Potential negative impact to savings
well as at the PFI site at Colchester projections

Unarmed Current budgets for the provision of Potential requirement to rework


guarding unarmed guarding services will be service design
transitioned to DIO with the service
Potential negative impact to savings

OFFICIAL SENSITIVE – COMMERCIAL


Page 657
OFFICIAL SENSITIVE - COMMERCIAL

Option Assumption Consequence

projections

Unarmed HESTIA contracts can include Potential requirement to rework


guarding modifications to allow guarding services service design
to be integrated into them
Potential negative impact to savings
projections

EOC High Level Policy shall remain with Potential requirement to rework
Defence Explosive Ordnance Disposal service design
and Search
Potential negative impact to savings
projections

EOC Intelligent customer role (assurance, Potential requirement to rework


archive management, scoping service design
/reconnaissance, desk top study, initial
assessment, task design, authorisation and Potential negative impact to savings
prioritisation, task review and projections
interpretation) shall be part of DIDO

EOC Ordnance search, excavation and Potential requirement to rework


identification (including geophysical service design
survey) shall be part of DIDO
Potential negative impact to savings
projections

EOC Disposal and certification free from Potential requirement to rework


explosives shall be agree at the time of service design
execution of the Option
Potential negative impact to savings
projections

8.2 The Contractor’s assumptions with respect to the entire IIP are contained at Annex F to
Schedule 3.

OFFICIAL SENSITIVE – COMMERCIAL


Page 658
OFFICIAL SENSITIVE - COMMERCIAL

9. OPTIONS RISKS

9.1 The Contractor’s Named Contractor – Head of Business Assurance and Risk, shall
procure that the DIDO Business Assurance and Risk Team manage the risks and mitigation
efforts of the consolidated DIDO risk register and shall manage them in accordance with the
process set out in Annex D to Schedule 3.

The Contractor shall, at the point at which an Option(s) is/are executed, update the baseline risk
register with risks associated with the exercised Option(s).

OFFICIAL SENSITIVE – COMMERCIAL


Page 659
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 12

CHANGES

1. ASSESSMENT OF FUTURE CHANGE

1.1 If the Authority is considering proposing any Change to this Contract, it will notify the
Contractor of its proposals (a Notice of Possible Future Change) as soon as reasonably
practicable. The Authority will involve the Contractor as early as is practicable in the
development of the specification of the Change to solicit input from the Contractor for the
detailed specification and to provide sufficient detail to enable the Contractor to respond to the
notice further to paragraph 1.3.

1.2 Subject to paragraph 2.4, the Contractor may also make a proposal to the Authority for
any Change which would improve the effectiveness, availability, efficiency, economy and/or
quality of the services supplied by the Contractor under this Contract.

1.3 The Contractor shall consider the Notice of Possible Future Change served by the
Authority pursuant to paragraph 1.1, or develop the proposal envisaged at paragraph 1.2, and
provide a non-binding rough order of magnitude estimate of the potential impact of the Change
on, where relevant in each case:

(a) the cost of the proposed Change to the Authority; and

(b) the risk profile of the proposed Change,

within 20 Business Days of the Authority issuing its Notice of Possible Future Change.

1.4 As soon as practicable after the Authority's Representative receives the estimate from
the Contractor pursuant to paragraph 1.3, the Parties shall discuss such estimate for the purpose
of assisting the preparation of a Notice of Change in accordance with paragraph 2.

1.5 If, following the Parties’ discussion pursuant to paragraph 1.4, either Party wishes to
proceed with a Change it shall follow the process set out in this Schedule 12.

1.6 If during, or on completion of, the process set out in paragraphs 2 to 3 the Authority
chooses not to proceed with a Change, no costs incurred by the Contractor for any work carried
out in relation to the process set out in this paragraph 1 shall be reimbursed by the Authority.

2. PROPOSING A CHANGE

2.1 Both Parties have the right to propose Changes in accordance with this Schedule 12.

2.2 If either Party wishes to propose a Change, such Party (the Change Proposer) shall
initiate the procedure set out in this Schedule 12 by sending a notice to the other Party (the
Change Recipient) (a Notice of Change). The Change Proposer shall specify in the Notice of
Change whether it considers that the Change is:

(a) an Administrative Change;

(b) a Minor Change; or


OFFICIAL SENSITIVE – COMMERCIAL
Page 660
OFFICIAL SENSITIVE - COMMERCIAL

(c) a Major Change.

Change refusals

2.3 If the Authority is the Change Proposer, the Contractor may refuse to implement the
Change if it:

(a) requires the services supplied by the Contractor under this Contract to be performed in a
way that infringes any Legislation including, for the purposes of this paragraph 2.3 only,
any applicable Legislation relating to export control or economic sanctions programmes
or is inconsistent with good industry practice;

(b) would cause any existing Necessary Consent to be revoked or would require a new
Necessary Consent to be obtained to implement the Change (which, after using
reasonable efforts, the Contractor has been unable to obtain and reasonably believes it
will be unable to obtain using reasonable efforts);

(c) would materially and adversely affect the Contractor’s ability to deliver the services
supplied by the Contractor under this Contract (except those services which have been
specified as requiring to be amended in the Authority’s Notice of Change) in a manner
not compensated pursuant to this Schedule 12;

(d) would materially and adversely affect the health and safety of any person;

(e) would, if implemented, materially and adversely change the nature of this Contract
(including its risk profile) in a manner not compensated pursuant to this Schedule 12; or

(f) is outside the Authority's legal power or capacity to require implementation of the
Change.

2.4 If the Contractor is the Change Proposer, the Authority may, unless the Change is
necessary to comply with a Change in Law, at its absolute discretion, refuse to allow the
Change and the Contractor shall not implement such Change. The Authority shall not be
obliged to give reasons for such refusal.

Notice of Change

2.5 Subject to paragraph 2.6, the Notice of Change shall include sufficient detail to:

(a) enable the Change Recipient to determine whether the Change is an Administrative
Change, a Minor Change or a Major Change;

(b) in the case of an Administrative Change or Minor Change, enable the Contractor to
prepare a proposal (an Administrative Change Proposal or a Minor Change Proposal,
as appropriate, and each a Proposal); and

(c) in the case of a Major Change, enable the Contractor to provide the Initial Business Case
in accordance with paragraph 2.13.

2.6 If the Authority is the Change Proposer of a Major Change, it shall also include in the
Notice of Change (where reasonably practicable and where applicable):

OFFICIAL SENSITIVE – COMMERCIAL


Page 661
OFFICIAL SENSITIVE - COMMERCIAL

(a) affordability thresholds for any proposed services comprising the Major Change;

(b) a specification of the proposed variation to the services in sufficient detail to allow the
indicative pricing of the Major Change;

(c) the location for the services required, no longer required or to be modified;

(d) the timing of the services required, no longer required or to be modified;

(e) whether the Contractor is expected to provide services in respect of any additional sites
or assets;

(f) an outline risk allocation matrix setting out the Authority’s preferred risk profile in
respect of the Major Change; and

(g) the time period for submission of the Initial Business Case, which shall be reasonable,
taking into account the complexity of the Major Change and, in any event, shall not be
less than 30 Business Days.

2.7 If the Contractor does not intend to use its own resources to implement any Authority
Change it shall comply with good industry practice with the objective of ensuring that it obtains
best value for money (taking into account all relevant circumstances including, in particular, the
requirements that the Contractor should not be worse off as a result of the implementation of the
Authority Change) when procuring any work, services, supplies, materials or equipment
required in relation to the Authority Change.

Administrative Changes

2.8 Within five Business Days of receiving a Notice of Change in respect of an


Administrative Change (or such other time period as may be agreed between the Parties), the
Contractor shall deliver to the Authority the Administrative Change Proposal.

2.9 The Administrative Change Proposal shall set out the steps which the Contractor
proposes to take to implement the Administrative Change and the consequences of the
Administrative Change, giving such level of detail as is reasonable and appropriate having
regard to the nature of the Administrative Change.

2.10 The Contractor shall not request and shall not receive any increase to the Management
Fee for an Administrative Change or any adjustment to the Payment Mechanism.

Minor Changes

2.11 Within 10 Business Days of receiving a Notice of Change in respect of an Minor


Change (or such other time period as may be agreed between the Parties), the Contractor shall
deliver to the Authority the Minor Change Proposal.

2.12 The Minor Change Proposal shall set out the steps which the Contractor proposes to take
to implement the Minor Change and the consequences of the Minor Change, giving such level
of detail as is reasonable and appropriate having regard to the nature of the Minor Change
including, where relevant, the Contractor's opinion on any of the matters set out below:

OFFICIAL SENSITIVE – COMMERCIAL


Page 662
OFFICIAL SENSITIVE - COMMERCIAL

(a) whether relief from compliance with the Contractor’s obligations under this Contract
would be required during the implementation of the Change;

(b) any impact on the provision of the services supplied by the Contractor under this
Contract;

(c) any amendment which would be required to this Contract (including Schedule 7) as a
result of the Change;

(d) the costs of implementing the Change, including details of any impact on the Payment
Mechanism and/or Base Case of the Change;

(e) the proposed timing of the Minor Change, so as to minimise any inconvenience to the
Authority; and

(f) any other effects of the Minor Change, including interference in the relationship of the
Authority with third parties or material effects on the risks or costs to which either Party
is exposed.

Major Changes

Initial Business Case

2.13 Where the Notice of Change relates to a Major Change, within the time period agreed
pursuant to paragraph 2.6, the Contractor shall deliver to the Authority the Initial Business
Case. The Initial Business Case shall include the Contractor’s opinion on the matters set out in
paragraph 2.12.

2.14 As soon as practicable after the Authority receives the Initial Business Case, the Parties
shall discuss and agree the issues set out in the Initial Business Case. In such discussions the
Authority may modify the Authority’s Notice of Change. The Contractor shall, as soon as
practicable, and in any event not more than 10 Business Days (unless otherwise agreed by the
Authority) after receipt of such modification, notify the Authority of any consequential changes
to the Initial Business Case.

2.15 As soon as practicable after the discussion referred to in paragraph 2.14, the Authority
shall:

(a) request that Contractor prepares a Detailed Business Case;

(b) where the Contractor is the Change Proposer, notify the Contractor that it will not allow
the Change in accordance with paragraph 2.4; or

(c) where the Authority is the Change Proposer, notify the Contractor that it withdraws the
relevant Notice of Change.

2.16 If the Authority does not request that the Contractor prepares a Detailed Business Case
within three months of the discussion referred to in paragraph 2.14 (or such other time period as
the Parties may agree), then the Notice of Change shall be deemed to have been withdrawn.

OFFICIAL SENSITIVE – COMMERCIAL


Page 663
OFFICIAL SENSITIVE - COMMERCIAL

Detailed Business Case

2.17 Where the Authority requests that the Contractor prepare a Detailed Business Case
pursuant to paragraph 2.15(a), the Contractor shall liaise with the Authority in developing the
Detailed Business Case. The Authority shall provide to the Contractor such information as to its
requirements as the Contractor may reasonably require. Any and all information and other input
or feedback provided by the Authority to the Contractor shall, unless expressly stated otherwise
by the Authority, be provided without warranty and shall be without prejudice to the
Authority’s rights under this Schedule 12.

2.18 The Contractor shall submit the Detailed Business Case within a time period to be
agreed between the Parties.

2.19 The Detailed Business Case shall include (where applicable), but not be limited to, the
following information, which shall contain sufficient detail to enable the Authority to make an
informed decision as to whether to approve the Change and shall take account of any
affordability thresholds notified to the Contractor by the Authority:

(a) an outline programme for implementation of the Major Change, including anticipated
dates of any applications for Necessary Consents (including planning applications) and
time periods for the provision and training of staff;

(b) a broad indication of the impact of carrying out and implementing the Major Change on
the provision of the services supplied by the Contractor under this Contract, and in
particular whether relief from compliance with any obligations set out in this Contract is
likely to be required during the implementation of the Major Change;

(c) the costs of implementing the Change, including details of any impact on the Payment
Mechanism and/or Base Case of the Change;

(d) a budget (or budgets) together with a capped fee for third party costs (not including costs
of the Contractor’s contracted supply chain) and details of the third party activity likely
to be incurred by the Contractor, such as third party advice, the carrying out of surveys,
obtaining Necessary Consents and independent certification that may be required to be
completed prior to agreement of the Major Change, together with a proposed process for
approval of such costs by the Authority before they are incurred;

(e) a summary of any amendments required to this Contract as a result of the Major Change;
and

(f) a value for money assessment explaining why the Contractor's proposals represent value
for money for the Authority.

2.20 The Authority may conduct a full technical and cost audit of a Detailed Business Case
(which if it is a Major Change proposed by the Authority shall be at the Authority's cost and if it
is a Major Change proposed by the Contractor shall be at the Contractor’s cost) and the
Contractor shall give the Authority access to all reasonable information requested by the
Authority.

2.21 The Authority shall consider in good faith the Detailed Business Case. If the Authority
finds the Detailed Business Case to be satisfactory, it shall notify the Contractor that the
Detailed Business Case is agreed, in which case the agreement shall be documented in
OFFICIAL SENSITIVE – COMMERCIAL
Page 664
OFFICIAL SENSITIVE - COMMERCIAL

accordance with paragraph 3.8. If the Authority finds any aspects of the Detailed Business Case
to be unsatisfactory, it shall notify the Contractor of the same and request that the Contractor
address such deficiencies and resubmit the Detailed Business Case as soon as reasonably
practicable.

Advice and assistance

2.22 In all cases where a Change will, or is likely to, result in an increased cost to the
Authority (of any type whatsoever), the Authority shall be entitled to request that the Contractor
and/or DIDO (as appropriate) provide such advice and assistance as reasonably required by the
Authority to allow the Authority to determine how (if at all) savings could be made elsewhere
within DIDO to compensate for the increased cost.

3. APPROVING A CHANGE

Administrative Changes and Minor Changes

3.1 As soon as reasonably practicable after the Authority receives a Proposal, the Authority
shall evaluate the Proposal in good faith, taking into account all relevant issues, and shall notify
the Contractor either that:

(a) the Proposal is agreed, in which case the agreement shall be documented in accordance
with paragraph 3.8; or

(b) the Proposal is not yet agreed, in which case the Parties shall discuss and endeavour to
agree the issues set out in the Proposal and any such agreement shall be documented in
accordance with paragraph 3.8.

3.2 If the Authority does not provide any notification pursuant to paragraph 3.1 within 20
Business Days of receiving the Proposal, then the Notice of Change shall be deemed to have
been withdrawn.

3.3 If the Parties cannot agree the Proposal then the dispute shall be determined in
accordance with Clause 43 of the Contract.

Major Changes

3.4 Within 40 Business Days of agreeing the Detailed Business Case pursuant to paragraph
2.21 (or such other time period as notified to the Contractor), the Authority shall either:

(a) confirm that the Contractor shall implement the Major Change by sending written notice
to that effect to the Contractor (the Notice to Proceed);

(b) if the Authority is the Change Proposer, withdraw the Notice of Change by giving
written notice to the Contractor; or

(c) if the Contractor is the Change Proposer and the Authority is entitled to refuse to
implement such Change pursuant to paragraph 2.4, refuse the Change by giving written
notice to the Contractor.

3.5 For all Major Changes not necessary to comply with a Change in Law, if the Authority
does not provide a Notice to Proceed within 40 Business Days of agreeing the Detailed
OFFICIAL SENSITIVE – COMMERCIAL
Page 665
OFFICIAL SENSITIVE - COMMERCIAL

Business Case pursuant to paragraph 3.4(a), then the Notice of Change shall be deemed to have
been withdrawn.

3.6 If:

(a) the Authority is the Change Proposer of a Major Change; or

(b) the Contractor is the Change Proposer of a Major Change and the Notice of Change is
withdrawn pursuant to paragraph 3.4(b),

then the Authority shall pay to the Contractor any actual direct costs reasonably incurred
in preparing the Detailed Business Case, provided that:

(i) the Contractor has used all reasonable endeavours to submit a reasonably priced
Detailed Business Case;

(ii) the Contractor has made available to the Authority a cost breakdown in the
Detailed Business Case, including an estimate of the actual direct costs to be
incurred by the Authority if the Notice of Change is withdrawn or deemed to be
withdrawn; and

(iii) the Authority:

(A) approved the Initial Business Case and any actual direct costs incurred
prior to any such costs being incurred;

(B) agreed that, given the nature of the proposed Change, it is reasonable to
expect the Contractor to incur costs in preparing the Detailed Business
Case on the basis of the extent of the proposed Change to the services
supplied by the Contractor under this Contract and the work required in
submitting a Detailed Business Case; and

(C) the Contractor has provided the Authority with such evidence as it may
reasonably require in order to verify the actual direct costs incurred by
the Contractor.

For the avoidance of doubt, the Contractor shall not be entitled to reimbursement for any
costs incurred in preparing the Initial Business Case.

3.7 Any dispute arising in relation to paragraph 3.6 shall be determined in accordance with
Clause 43 of the Contract.

Documenting agreement

3.8 Subject to paragraph 2.3, the Parties shall document their agreement and any effect on
the Fee and/or the Base Case for all Changes other than Administrative Changes, and any other
matters which are relevant, including the following:

(a) the agreed relief to be given to the Contractor; and

(b) any other agreed effects of the Change.

OFFICIAL SENSITIVE – COMMERCIAL


Page 666
OFFICIAL SENSITIVE - COMMERCIAL

4. IMPLEMENTING A CHANGE

4.1 If a Proposal or Detailed Business Case has been agreed by the Authority pursuant to
paragraphs 3.1(a) or 2.21 (as appropriate), then the Contractor shall implement the Change in
accordance with the terms agreed between the Parties as documented pursuant to paragraph 3.8.

4.2 If a Change is implemented pursuant to paragraph 4.1, and the Change has a material
adverse or beneficial impact upon:

(a) the obligations required to be undertaken by the Contractor under this Contract;

(b) the liabilities incurred or to be incurred by the Contractor under this Contract;

(c) the rights of the Contractor accrued or arising under this Contract; or

(d) the benefits (including any payment to the Contractor under this Contract) obtained or to
be obtained by the Contractor under this Contract,

the Authority shall also instruct (acting reasonably and taking into account any submissions
provided by the Contractor to the Authority in this regard) any variations or amendments to the
Payment Mechanism and/or Base Case that are reasonably required to ensure that the Payment
Mechanism and/or Base Case are reasonably commensurate with the impact upon, or the impact
reasonably expected upon, the matters in this paragraph 4.2(a) to (d) as a result of the Change.

5. URGENT CHANGES

5.1 The Authority may (in its absolute discretion) for a Change other than an Administrative
Change issue a Notice of Change authorising the implementation of such Change
notwithstanding that the Proposal or Detailed Business Case has not been agreed in accordance
with this Schedule 12.

5.2 If the Contractor receives a Notice of Change pursuant to paragraph 5.1, the Contractor
shall provide to the Authority an estimate of costs to undertake the Urgent Change before
proceeding.

5.3 The Parties shall use their reasonable endeavours to reach agreement on the estimate
submitted by the Contractor pursuant to paragraph 5.2 as soon as possible following the issue of
the Notice of Change authorising the implementation of an Urgent Change and the following
conditions shall apply:

(a) immediately following confirmation by the Authority's Representative that the estimate
provided pursuant to paragraph 5.2 is acceptable, the Contractor shall (unless it is
entitled to refuse to implement such Change pursuant to paragraph 2.4) proceed to
implement the Change promptly and shall inform the Authority on a regular basis as to
the progress of implementation of the Change;

(b) while the Contractor is implementing the Change, the Contractor shall take all necessary
steps to agree the estimate relating to the Change and paragraphs 2 to 4 of this Schedule
12 shall apply to the Change; and

(c) the Authority may at any time instruct the Contractor to discontinue the implementation
of the Change.
OFFICIAL SENSITIVE – COMMERCIAL
Page 667
OFFICIAL SENSITIVE - COMMERCIAL

5.4 Unless and until the estimate is agreed pursuant to paragraph 5.3(b) and/or the Authority
instructs the Contractor to discontinue the Change pursuant to paragraph 5.3(c), the Authority
shall reimburse the Contractor's costs incurred as a result of implementing the Change up to a
maximum sum of the Contractor's estimate provided pursuant to paragraph 5.2.

OFFICIAL SENSITIVE – COMMERCIAL


Page 668
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 13

INCORPORATION

1. INCORPORATION PROCESS PLAN

1.1 From the Effective Date, the Contractor shall procure that DIDO prepares a written plan
for effecting the Incorporation Process (the Incorporation Process Plan). The Contractor shall
procure that DIDO shall submit written versions of the Incorporation Process Plan to the
Authority on the first Business Day of each full three month accounting period after the
Effective Date, and shall take into account the Authority’s comments on such drafts when
procuring that DIDO prepares its next versions of the Incorporation Process Plan.

1.2 The Incorporation Process Plan shall:

(a) set out the steps required to implement the Incorporation Process, including so as to
ensure DIDO Ltd will be able to perform the DIDO Ltd Functions and DIDO Property
can be transferred from the Authority to DIDO Ltd;

(b) identify issues to be addressed relating to such transfers and the Incorporation Process
more generally;

(c) set out the Contractor’s reasonable estimate of the time required for the completion of
each step (or work stream, or the resolution of each identified issue); and

(d) propose how to manage risks and costs arising in respect of the identified steps, issues
and timing.

1.3 The Incorporation Process Plan shall, as a minimum, address the following matters:

(a) the timing and manner of the incorporation of DIDO Ltd (as to which see paragraph 2 of
this Schedule 13);

(b) the functions that DIDO performs which are to be transferred to DIDO Ltd (the DIDO
Ltd Functions);

(c) the functions that DIDO performs which should not be transferred to DIDO Ltd;

(d) generally the property, rights and liabilities DIDO Ltd will require from its incorporation
to perform the DIDO Ltd Functions and to ensure the Contractor can fulfil its
obligations under the Contract (the DIDO Property), and what powers, commercial and
financial delegations and Authority Dependencies DIDO Ltd, the directors of DIDO Ltd
and the employees of DIDO Ltd may otherwise require in order to fulfil the DIDO Ltd
Functions;

(e) those employees who should transfer to DIDO Ltd, and whether the Transfer
Regulations (or equivalent legislation) will apply in respect of the transfer of such
employees;

(f) steps are required to ensure appropriate employees will transfer to DIDO Ltd in
accordance with the Transfer Regulations (or equivalent legislation), including where
OFFICIAL SENSITIVE – COMMERCIAL
Page 669
OFFICIAL SENSITIVE - COMMERCIAL

such employees are at the time of the relevant draft or final plan performing services in
central Authority functions (such as in Defence Business Services), appropriate steps
(where possible) to ensure such transfers can occur;

(g) steps which it is necessary or desirable to take in respect of military personnel and
secondees, to ensure that DIDO can perform the DIDO Ltd Functions;

(h) any Transfer Regulations consultation process (or any equivalent consultation process),
and any other trades union or other employee consultation process;

(i) how to ensure the effective transfer of appropriate employees (for the avoidance of
doubt, including locally engaged civilians) to DIDO Ltd in jurisdictions where
legislation equivalent to the Transfer Regulations does not apply;

(j) considerations as to the ongoing payment of the salaries of employees who are to be
transferred to DIDO Ltd;

(k) satisfying obligations in respect of pensions, including (to the extent it will be
applicable) those set out at Clause 17 of the provisions at Annex A of this Schedule 13;

(l) the appropriate Named Contractor to act as the sole director of DIDO Ltd;

(m) appropriate training for the proposed director of DIDO Ltd on his or her responsibilities
as a director, under the Companies Act 2006 and other Legislation;

(n) duties of the DIDO Ltd director, and proposals on how to best to address any potential
risks of breach of such duties;

(o) intellectual property of the Authority or third parties (in particular software licence
providers) which DIDO Ltd will require the benefit of in order to fulfil the DIDO Ltd
Functions;

(p) whether the benefits of any contracts between the Authority and third parties need to be
transferred to, or provided on to, DIDO Ltd, in whole or in part (and if in part, how the
relevant benefits of such contracts may best be assumed by DIDO Ltd);

(q) whether it is necessary or desirable to renegotiate contracts between the Authority and
third parties to provide that DIDO Ltd will receive contractual benefits in respect of
DIDO Ltd Functions equivalent to those received by the Authority before of the transfer
to DIDO Ltd of the DIDO Ltd Functions, and in each case whether the Authority or
Contractor should have primary responsibility and authority for such negotiations;

(r) other than with respect to employees and more generally contractual rights and
obligations, what assets and obligations (if any) will transfer from the Authority to the
Contractor;

(s) what Authority Dependencies are, and what other support is, required from the
Authority, any changes required to the Authority Dependencies, and if necessary or
desirable suggested improvements or alternative service providers in respect of such
Authority Dependency or support;

OFFICIAL SENSITIVE – COMMERCIAL


Page 670
OFFICIAL SENSITIVE - COMMERCIAL

(t) any changes required to the Government Furnished Services, and if necessary or
desirable suggested improvements or alternative service providers in respect of such
Government Furnished Services;

(u) in relation to Authority Policy Rules and Guidance:

(i) what Authority Policy Rules and Guidance DIDO Ltd will be required to comply
with;

(ii) what Authority Policy Rules and Guidance DIDO Ltd will not be required to
comply with, in which case the plan shall address:

(A) whether DIDO Ltd should be required to comply with the relevant policy,
rule or guidance in full or in part on a voluntary basis;

(B) any desirable suggested improvements or alternative policies, rules or


guidance; or

(C) whether DIDO Ltd should not comply with the relevant policy, rule or
guidance after Incorporation, in which case the plan shall address the
process for phasing out the existing policy, rule or guidance;

(v) insurance cover that DIDO Ltd and its director will require, or which it will be desirable
for DIDO Ltd or its director to have, after incorporation;

(w) any changes necessary to the Exit Plan as a result of incorporation;

(x) process and authorisations required for the transfer of DIDO books and records from the
Authority to DIDO Ltd to ensure continuity of management processes;

(y) anticipated nature of balance sheet, income statement and accounting policies of DIDO
Ltd, identifying (for instance) items of anticipated regular income (if any) and regular
outgoings, how employee costs (and any tax charges) are paid and accounted for, and
whether or not it is desirable or necessary for DIDO Ltd to open its own bank account;

(z) anticipated tax liabilities and registrations (including any registrations relating to value
added tax and “pay as you earn” obligations) of DIDO Ltd; and

(aa) the appropriate initial capitalisation of DIDO Ltd.

1.4 The Authority may, by serving written notice on the Contractor, require the Contractor
to (and the Contractor shall then) procure that DIDO implements certain steps, items or work
streams on the Incorporation Process Plan, or implements the Incorporation Process Plan as a
whole. For the avoidance of doubt, the decision whether or not to serve such a notice (or such
notices) on the Contractor shall be at the sole discretion of the Authority.

Regulatory exemption analysis

1.5 Without prejudice to the generality of paragraphs 1.1 to 1.4 of this Schedule 13, the
Authority may direct the Contractor at any time following commencement of this Contract to,
following which the Contractor shall, procure that DIDO:

OFFICIAL SENSITIVE – COMMERCIAL


Page 671
OFFICIAL SENSITIVE - COMMERCIAL

(c) undertakes such analysis as is necessary to identify any Legislation and/or Regulatory
Requirements (including without limitation any requirement for a Necessary Consent)
which will apply to DIDO Ltd which do not apply or apply in a different way to DIDO;

(d) applies for and uses best endeavours to secure any Necessary Consents which are
required by DIDO Ltd from the Transfer Date; and

(e) provides reports to the Authority addressing the outcomes of its analysis undertaken in
accordance with paragraph (a) and progress towards obtaining the Necessary Consents
in accordance with paragraph (b) above as regularly as the Authority requests.

1.6 The Authority shall procure that all information and cooperation necessary to procure
any Necessary Consents shall be provided, including liaising with Relevant Authorities.

1.7 To the extent that DIDO is unable to obtain a Necessary Consent prior to the Transfer
Date, the Authority may from the date of the Transfer Date provide for DIDO Ltd, to the extent
permissible by law, to act as agent of the Authority in order to enable the continued reliance on
any relevant exemption from a requirement to hold a Necessary Consent, to the extent necessary
to facilitate continuation of DIDO’s operations.

1.8 In accordance with Schedule 6, the Parties shall cooperate to update any Authority
Policy Rules and Guidance to the extent necessary to reflect any changes in Regulatory
Requirements likely to arise from the Transfer Date, including without limitation practices
relating to substantive operations and reporting.

2. INCORPORATION OF DIDO LTD

2.1 If the Authority authorises the Contractor to incorporate DIDO Ltd, the Contractor shall
procure that DIDO ensures that DIDO Ltd is incorporated as soon as reasonably practicable and
in accordance with the Companies Act 2006 and other Legislation, and that:

(a) DIDO Ltd shall be incorporated with the name that the Authority specifies to the
Contractor in writing;

(b) DIDO Ltd shall be registered as a private company limited by shares;

(c) DIDO Ltd shall have the registered office that the Authority specifies to the Contractor
in writing;

(d) DIDO Ltd shall be incorporated with the articles of association as the Authority may
specify to the Contractor in writing or, failing that, the model articles for a private
company limited by shares as set out at Schedule 1 of the Companies (Model Articles)
Regulations 2008 (SI 2008/3229);

(e) a Named Contractor (as agreed between the Contractor and the Authority) shall act as
the sole director of DIDO Ltd from its incorporation (the DIDO Ltd Director);

(f) the Authority shall be the sole subscriber to the memorandum of association;

(g) DIDO Ltd’s accounting reference date shall be 31 March, or such other date as may be
specified by the Authority; and

OFFICIAL SENSITIVE – COMMERCIAL


Page 672
OFFICIAL SENSITIVE - COMMERCIAL

(h) DIDO Ltd’s auditor shall be the Auditor General, within the meaning of section 1226 of
the Companies Act 2006, unless otherwise specified by the Authority.

2.2 The Contractor shall procure that (to the extent permissible by law) the DIDO Ltd
Director approves the execution of all documents, and all other acts and things as may be
necessary, to give effect to the transfer of DIDO Property from the Authority to DIDO Ltd.

2.3 The Contractor shall procure that, from DIDO Ltd’s incorporation, DIDO Ltd shall meet
all statutory requirements to make filings (including at Companies House), and keep registers
and documents, including the register of directors and secretary, copies of all directors’ service
contracts and memoranda of terms, register of members, register of charges, and records of
resolutions and shareholder meetings.

3. COSTS

As between the parties, all Companies House charges and fees, and ancillary related costs,
arising directly out of the incorporation of DIDO Ltd shall be borne by the Authority.

4. FURTHER ASSURANCES

The Authority and the Contractor shall perform (or procure the performance of) all further acts
and things and execute and deliver (or procure the delivery of) such further documents, as may
be required by Legislation or as may be necessary or required by the Authority to implement
and give effect to paragraphs 1 and 2.

OFFICIAL SENSITIVE – COMMERCIAL


Page 673
OFFICIAL SENSITIVE - COMMERCIAL

ANNEX A TO SCHEDULE 13

INCORPORATED CONTRACT

OFFICIAL SENSITIVE – COMMERCIAL


Page 674
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 14

CONFLICTS MANAGEMENT POLICY

1. GENERAL OBLIGATION

1.1 Unless expressly stated to the contrary, any reference in this Schedule 14 to an
obligation on the Contractor to perform a particular activity shall be construed as an
obligation on the Contractor to perform for itself and to procure that each Related Party
shall also perform.

1.2 The Contractor acknowledges that as a result of its participation in the Project:

(a) it will be in possession of information that could give rise to an unfair advantage in the
pursuit of a matter other than the Project;

(b) it has the ability to directly influence the affairs and commercial activities of DIDO; and

(c) an actual or potential conflict of interest could arise on account of its interest in a matter
other than the Project.

1.3 The Contractor shall comply with this Conflicts Management Policy.

2. IDENTIFICATION OF ACTUAL AND POTENTIAL CONFLICTS OF INTEREST

2.1 The Contractor shall, within 20 Business Days of the Commencement Date:

(a) carry out a review of its business to determine whether information passing between the
Authority and the Contractor and/or any Related Party during the Contract Period is or
may be material to any matter other than the Project in which the Contractor, or a
Related Party has, or may be contemplating, a commercial interest; and

(b) provide to the Authority a report setting out the results of the review referred to in
paragraph 2.1(a).

2.2 The Contractor shall monitor its business throughout the Contract Period and notify the
Authority immediately upon becoming aware of any material changes to the results of the
review referred to in paragraph 2.1(a).

2.3 Notwithstanding paragraph 2.2, the Contractor shall be required to provide an update on
the matters set out in paragraph 2.1(a) in the Quarterly Performance Report.

3. FORMATION OF PROJECT TEAM

3.1 Within 10 Business Days of the Commencement Date, the Contractor shall provide the
Authority with a list of all members of the Project Team categorised into the following sub
teams as follows:

(a) Named Contractors who are within the executive management team;

(b) Named Contractors and Contractor Personnel who are not within the executive
management team; and
OFFICIAL SENSITIVE – COMMERCIAL
Page 1177
OFFICIAL SENSITIVE - COMMERCIAL

(c) other Contractor Personnel with limited and controlled access to DIDO data and
facilities.

Where a member’s details are unavailable within the time period stated above the Contractor
shall promptly provide such member information to the Authority when it becomes available.

3.2 The Contractor shall procure that all members of the Project Team sign:

(a) the Conflict of Interest Declaration attached as Appendix 1 to this Conflicts


Management Policy; and

(b) the Confidentiality Declaration attached as Appendix 2 to this Conflicts Management


Policy, save where a member of the Project Team has already provided a declaration in
the form attached at Schedule 16 pursuant to Clause 9.1(a).

3.3 Except as expressly permitted by the Authority in writing, such permission not to be
unreasonably withheld or delayed, the following restrictions shall apply in relation to the
individuals in the Project Team:

(a) no individual shall be allocated a role within the Project Team where performing that
role would result in a breach by the individual of any duty owed to the Authority or any
other UK government department or agency;

(b) Named Contractors within the Project Team shall not undertake any activity that might
be considered to compromise their position as a Named Contractor undertaking the role
of a public servant working in a Government Department;

(c) where the Contractor seeks to employ or appoint any individual on the Project Team or
intends to involve as a member of the Project Team any advisor who has left the
Authority within the last two years it will in each case:

(i) immediately notify the Authority, at the email address in paragraph 3.4 below,
following the making of an offer of employment to any such individual or in the
case of an advisor before such advisor becomes a member of the Project Team;
and

(ii) ensure and the Contractor undertakes to ensure that any conditions imposed on
the individual’s employment or any engagement entered into by him by the
Authority’s business appointment process are complied with;

(d) no member of the Project Team shall be involved concurrently with the Project and:

(i) the tendering for or the performance of any other contract with the Authority or
with any other Government Department or agency where such Project Team
member is the Chief Executive of DIDO except when acting on behalf of DIDO
or the Authority;

(ii) the tendering for or the performance of any other contract with the Authority or
with another Government Department or agency for estate and property related
infrastructure services where such Project Team member is a Named Contractor
and is within the executive management team (other than the Chief Executive of
DIDO); or
OFFICIAL SENSITIVE – COMMERCIAL
Page 1178
OFFICIAL SENSITIVE - COMMERCIAL

(iii) the tendering for or performance of any other land, estate, construction, facilities
management or infrastructure related contract with the Authority;

(e) to the extent that a member of the Project Team retires, withdraws, is removed from or
otherwise ceases to be involved with the Project, he shall not perform a role involving:

(i) the tendering for or the performance of any other contract with the Authority
where such Project Team member was a Named Contractor and is within the
executive management team (including the Chief Executive of DIDO);

(ii) the tendering for or performance of any other land, estate, construction, facilities
management or infrastructure related contract with the Authority where such
Project Team member does not fall within the scope of paragraphs 3.3(e)(i) of
this Schedule 14;

for a period of:

(A) 12 months if the member of the Project Team is a Named Contractor


within the executive management team (including the Chief Executive of
DIDO);

(B) six months for other Named Contractors and Contractor Personnel who
are members of the Project Team; or

(C) three months for identified Contractor Personnel with limited and
controlled access to DIDO data and facilities

from their departure from the Project Team, unless the Authority agrees that
there is no actual or potential conflict of interest in the individual taking such a
role.

3.4 The Contractor shall send any requests for exceptions to paragraph 3.3 to the following
address:

Defence Infrastructure Organisation

Email: DIO-Transformation-SBM@mod.uk

Building 18

Piave Lines

Catterick Garrison

Richmond, DL9 3LR

Attention: Rachel Pearson

The Authority expects that such requests will only be made on an exceptional basis.

3.5 Subject to any requests for exceptions pursuant to paragraph 3.4 only being made on an
exceptional basis, the Authority shall deal with such requests without undue delay and shall

OFFICIAL SENSITIVE – COMMERCIAL


Page 1179
OFFICIAL SENSITIVE - COMMERCIAL

provide an initial response to such request within two weeks of the Authority’s receipt of such
request.

4. INFORMATION AND CONFLICT MANAGEMENT

4.1 The Contractor shall manage information relating to the Project in accordance with the
Contract and Authority Policy Rules and Guidance. The obligations on the Contractor as part of
this paragraph 4.1 shall include but not be limited to:

(a) maintaining a log of all current and past members of the Project Team;

(b) notifying all members of the Project Team of the restrictions at paragraph 3.3;

(c) complying with obligations in the Contract and Authority Policy Rules and Guidance
regarding secure and separate storage and filing space for any electronic and hard copy
documents and communications relating to the Contract;

(d) appointing and maintaining the appointment of an individual (or individuals) to be


responsible for monitoring the arrangements under this Conflicts Management Policy
during the Contract Period and ensuring compliance, and notifying the Authority
promptly and in any event within five Business Days of the name of the individual (or
individuals) appointed; and

(e) establishing, maintaining and implementing an effective disciplinary policy in respect of


breach of this Conflicts Management Policy by any members of the Project Team (such
policy to include notification to all members of the Project Team that any breach by
them of this Conflicts Management Policy could lead to the imposition of disciplinary
sanctions).

5. INTEGRITY OF DIDO PROCUREMENT PROCESSES

5.1 The Contractor acknowledges that DIDO is subject to obligations under Legislation
relating to the procurement of public contracts and that such obligations may be affected by the
Contractor’s conduct in managing DIDO to conduct such procurement processes.

5.2 Notwithstanding any Letter of Delegation, the Contractor shall not, without the prior
written agreement of the Authority, allow DIDO to or procure that DIDO:

(a) awards any contract to the Contractor or a Key Sub-Contractor or an Affiliate of the
Contractor or Key Sub-Contractor directly and without competition; or

(b) subject to paragraph 5.3, commences or continues with any DIDO contract award
procedure where the Contractor is aware, should reasonably be aware, or becomes aware
that a participant or intended participant in any procurement by DIDO of a public
contract is or will be:

(i) the Contractor;

(ii) a Sub-Contractor; or

(iii) an Affiliate of the Contractor or a Sub-Contractor.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1180
OFFICIAL SENSITIVE - COMMERCIAL

5.3 If the Contractor wishes to proceed with procurement in which any of the parties listed
in paragraph 5.2(b) are, or are expected to, participate, the Contractor shall provide the
Authority with a detailed plan setting out how the procurement process will be conducted so as
to minimise the risk of an actual or perceived conflict of interest. The Authority reserves the
right to withhold its agreement if it does not reasonably believe that a procurement process
could be conducted by DIDO without a risk of a breach of Legislation.

6. CONFIDENTIALITY

6.1 The Contractor acknowledges that, in performing its obligations under this Contract, it is
likely to come into possession of Confidential Information and that this may give rise to an
actual or potential conflict of interests.

6.2 The Contractor shall not use or copy any Confidential Information unless necessary in
order to perform its obligations under this Contract, and shall procure that all members of the
Project Team shall use all Confidential Information strictly in accordance with the terms of this
Contract.

6.3 In order to preserve the integrity of Confidential Information the Contractor shall
implement the following measures in addition to the measures set out elsewhere in this
Conflicts Management Policy:

(a) a log of all members of the Project Team;

(b) a schedule recording all internal movements of members of the Project Team indicating,
if applicable, when their restriction ends;

(c) notification to all members of the Project Team of the restrictions;

(d) secure and separate storage and filing space for all hard copy documents and
communications relating to the Contract;

(e) marking documents in relation to the Project as ‘confidential and subject to an


information barrier’ before being handled by any of the Project Parties’ general
administrative staff;

(f) identification of a member of Project Team with responsibility for monitoring the above
arrangements and ensuring they are being followed by all members of the Project Team;

(g) notification to members of the Project Team that any breach by them of this Conflicts
Management Policy could lead to the imposition of disciplinary sanctions.

7. COMPLIANCE

7.1 The Authority shall be entitled to audit the Contractor for compliance with this Schedule
14 and the Contractor shall provide such information, documents and co-operation as the
Authority reasonably requests for the purposes of any such audit.

7.2 The Contractor shall not utilise (whether directly or indirectly) DIDO and/or any
Authority Personnel to endorse or promote the Contractor’s business or other interests.

7.3 The Contractor shall:


OFFICIAL SENSITIVE – COMMERCIAL
Page 1181
OFFICIAL SENSITIVE - COMMERCIAL

(a) continually monitor compliance with this Schedule 14 by the Project Team (including
with the obligations set out in the Conflicts of Interest Declaration and the
Confidentiality Declaration) during the Contract Period;

(b) continually monitor whether this Schedule 14 remains effective and relevant for its
purpose;

(c) provide an update on compliance and monitoring pursuant to paragraphs 7.3 (a) and (b)
in the Quarterly Performance Report; and

(d) notify the Authority immediately upon becoming aware of any breaches of this Schedule
14.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1182
OFFICIAL SENSITIVE - COMMERCIAL

APPENDIX 1

CONFLICT OF INTEREST DECLARATION

Employer:

Employee:

I, the above named employee, confirm that I have read the Contract between the Secretary of
State for Defence, and [•] dated [•] (the Contract) as well as the Conflicts Management Policy
set out in Schedule 14 to the Contract. Capitalised terms used in this document are as defined in
the Contract or the Conflicts Management Policy (as applicable).

In consideration of being made a member of the Project Team, I agree to comply with the
restrictions set out in paragraphs 3.3 and 4.1 of the Conflicts Management Policy.

I understand that any failure on my part to adhere to my obligations may (among other things)
render me subject to disciplinary measures under the terms of my employment.

Signed:

Date:

OFFICIAL SENSITIVE – COMMERCIAL


Page 1183
OFFICIAL SENSITIVE - COMMERCIAL

APPENDIX 2

CONFIDENTIALITY DECLARATION

To: The Secretary of State for Defence

Date: [insert]

Dear Sirs

Name of employee:

Employer:

MOD Contract/Task No:

I, the above named employee, confirm that I am fully aware that, as part of my duties with my
Employer in performing the above Contract, I shall receive confidential information of a
sensitive nature (which may include particularly commercially sensitive information), whether
documentary, electronic, aural or in any other form, belonging to or controlled by the Secretary
of State for Defence or third parties. I may also become aware, as a result of my work in
connection with the Contract, of other information concerning the business of the Secretary of
State for Defence or third parties, which is by its nature confidential.

I am aware that I should not use or copy for purposes other than assisting my Employer in
carrying out the Contract, or disclose to any person not authorised to receive the same, any
information mentioned in paragraph 1 unless my Employer (whether through me or by
alternative means) has obtained the consent of the Secretary of State for Defence. I understand
that “disclose”, in this context, includes informing other employees of my Employer who are
not entitled to receive the information.

Unless otherwise instructed by my Employer, if I have in the course of my employment


received documents, software or other materials from the Secretary of State for Defence or
other third party for the purposes of my duties under the above Contract then I shall promptly
OFFICIAL SENSITIVE – COMMERCIAL
Page 1184
OFFICIAL SENSITIVE - COMMERCIAL

return them to the Secretary of State for Defence or third party (as the case may be) at the
completion of the Contract via a representative of my Employer who is an authorised point of
contact under the Contract and (in the case of information referred to under paragraph 1 above)
is also authorised under paragraph 2. Alternatively, at the option of the Secretary of State for
Defence or the third party concerned, I shall arrange for their proper destruction and notify the
above authorised point of contact under the Contract to supply a certificate of destruction to the
Secretary of State for Defence. Where my Employer may legitimately retain materials to which
this paragraph applies after the end of the Contract, I shall notify the authorised representative
of my Employer to ensure that they are stored and access is controlled in accordance with my
Employer’s rules concerning third party confidential information.

I understand that, under the above Contract, my Employer has agreed with the Secretary of
State for Defence that certain intellectual property rights created in the course of the Contract,
including by me, shall be either (1) the property of the Secretary of State for Defence or (2)
licensed to the Secretary of State for Defence by my Employer. Where this is the case, I shall
execute any documents and do any other acts that are necessary for the Secretary of State for
Defence to obtain the benefit of that agreement regarding intellectual property rights, and, in
particular, waive any moral or other rights in any works I create in the course of the Contract.

I understand that any failure on my part to adhere to my obligations in respect of confidentiality


and intellectual property may render me subject to disciplinary measures under the terms of my
employment.

Signed as a DEED by:

____________________________

[Individual contractor name]

Date:

In the presence of:

Witness signature : ____________________

Witness name:

Address:

Occupation:

Date:

OFFICIAL SENSITIVE – COMMERCIAL


Page 1185
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 15

KEY PERSONNEL

Named Contractors

Senior Management Team

Name Role

Richard McCarthy DIDO Chief Executive

Colin Wood Chief Operating Officer

Leo O'Shea D/ Service Delivery

Marcus Leek D/ Finance & Commercial

Matthew Punshon D/ Asset Strategy & Portfolio

Tony Gosling D/ Data Analytics & Insight

Richard Trevor D/ Transformation & Change

Ian Galloway H/ Commercial

Rosie Boorne PPP/PFI Finance & Commercial Advisor

Iain Sale Associate Finance Director

Senior Advisor to D/ PPD (previously H/ Project & Programme


Damian Belgeonne
Delivery)

Amanda Wharton Energy, Utilities & Sustainability Service Line Lead

Kevin Smith H/ Contingency Operations

Dan Roh H/ Strategic Initiatives

Simon deVere H/ Acquisitions, Disposals and Commercialisation

DCLG secondee H/ Accommodation Strategy

H/ Data Analytics & Insight (previously Senior Data Analytics &


Ian Wallis
Insight Manager)

Gary Bell Deputy Director of Transformation & Change

Angela Owen H/ Workforce and Talent Management

Peter Henderson H/ Programme Change

OFFICIAL SENSITIVE – COMMERCIAL


Page 1186
OFFICIAL SENSITIVE - COMMERCIAL

Iain Irving H/ Strategic Stakeholder Engagement & Communications

Gordon Kennedy H/ Business Assurance & Risk

Principal Staff Officer / Executive Advisor to the Chief Executive


To Be Confirmed
(previously Head of Strategic Requirements)

Owners Strategy Board

Name Role

Dawn Marriott-
Owners Strategy Board (not full-time)
Sims

David Swindle Owners Strategy Board (not full-time)

Programme Management Team

Name Role

JJ O'Brien FM Project Manager

Alan Parvez FM Procurement Manager

Gemma Russell Business Relationship Director (previously BS11000 Advisor)

Mike Johnson Soft FM Franchise Advisor

Richard Stephenson Capital Projects & Programmes Manager 1

Paul Townsend Capital Projects & Programmes Manager 2

Martin Whife Capital Projects & Programmes Manager 3

Paul Landsborough Programme Manager

Paul Clark Development Manager

Esther Howe Property Strategist 1

Jeremy Watt Property Strategist 2

Daniel Edwards People Change Co-ordinator 1

Jo Dunne People Change Co-ordinator 2

OFFICIAL SENSITIVE – COMMERCIAL


Page 1187
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 16

NAMED CONTRACTOR DECLARATION

To: The Secretary of State for Defence

Date: [insert]

Dear Sirs

Name of Named Contractor:

Employer:

MOD Contract/Task No:

I, the above named employee, confirm that I am fully aware that, as part of my duties with my
Employer in performing the above Contract, I shall receive confidential information of a
sensitive nature (which may include particularly commercially sensitive information), whether
documentary, electronic, aural or in any other form, belonging to or controlled by the Secretary
of State for Defence or third parties. I may also become aware, as a result of my work in
connection with the Contract, of other information concerning the business of the Secretary of
State for Defence or third parties, which is by its nature confidential.

I am aware that I should not use or copy for purposes other than assisting my Employer in
carrying out the Contract, or disclose to any person not authorised to receive the same, any
information mentioned in paragraph 1 unless my Employer (whether through me or by
alternative means) has obtained the consent of the Secretary of State for Defence. I understand
that “disclose”, in this context, includes informing other employees of my Employer who are
not entitled to receive the information.

Unless otherwise instructed by my Employer, if I have in the course of my employment


received documents, software or other materials from the Secretary of State for Defence or
other third party for the purposes of my duties under the above Contract then I shall promptly
return them to the Secretary of State for Defence or third party (as the case may be) at the
completion of the Contract via a representative of my Employer who is an authorised point of
contact under the Contract and (in the case of information referred to under paragraph 1 above)
is also authorised under paragraph 2. Alternatively, at the option of the Secretary of State for
Defence or the third party concerned, I shall arrange for their proper destruction and notify the
above authorised point of contact under the Contract to supply a certificate of destruction to the
Secretary of State for Defence. Where my Employer may legitimately retain materials to which
this paragraph applies after the end of the Contract, I shall notify the authorised representative
of my Employer to ensure that they are stored and access is controlled in accordance with my
Employer’s rules concerning third party confidential information.
OFFICIAL SENSITIVE – COMMERCIAL
Page 1188
OFFICIAL SENSITIVE - COMMERCIAL

I understand that, under the above Contract, my Employer has agreed with the Secretary of
State for Defence that certain intellectual property rights created in the course of the Contract,
including by me, shall be either (1) the property of the Secretary of State for Defence or (2)
licensed to the Secretary of State for Defence by my Employer. Where this is the case, I shall
execute any documents and do any other acts that are necessary for the Secretary of State for
Defence to obtain the benefit of that agreement regarding intellectual property rights, and, in
particular, waive any moral or other rights in any works I create in the course of the Contract.

I understand that any failure on my part to adhere to my obligations in respect of confidentiality


and intellectual property may render me subject to disciplinary measures under the terms of my
employment.

Signed as a DEED by:

____________________________

[Individual contractor name]

Date:

In the presence of:

Witness signature : ____________________

Witness name:

Address:

Occupation:

Date:

OFFICIAL SENSITIVE – COMMERCIAL


Page 1189
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 17

KEY SUB-CONTRACTORS

Name Registered Number Registered Address


URS (E&C) UK Limited 03909808 Washington House
Birchwood Park Avenue
Birchwood
Warrington
Cheshire WA3 6GR
PA Consulting Services Limited 00414220 123 Buckingham Palace
Road
Victoria
London SW1W 9SR

OFFICIAL SENSITIVE – COMMERCIAL


Page 1190
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 18

PROJECT DOCUMENTS

Description Parties Date

Key Sub-Contract Capita Business Services Ltd (1)


and URS (E&C) UK Limited (2)

Key Sub-Contract Capita Business Services Ltd (1)


and PA Consulting Services
Limited (2)

OFFICIAL SENSITIVE – COMMERCIAL


Page 1191
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 19

CONTRACTOR WARRANTED DATA

Registered name of Capita Business Services Limited


Contractor:

Registered office of 71 Victoria Street, Westminster, London SW1H 0XA


Contractor:

Company registration 02299747


number of Contractor

Directors of Contractor: Michael Barnard

Maggi Bell

Kevin Dady

Victor Gysin

Gordon Hurst

Andrew Parker

Richard Shearer

Clare Waters

Craig Rodgerson

Peter Hands

Dawn Mariott-Sims

Stephen Sharp

James Parkhouse

Nick Greatorex

Shareholders of Contractor Capita Holdings Limited (100%)


(with respective
shareholdings):

Registered name of Capita plc


Contractor's ultimate
holding company:

OFFICIAL SENSITIVE – COMMERCIAL


Page 1192
OFFICIAL SENSITIVE - COMMERCIAL

Registered office of 71 Victoria Street, Westminster, London SW1H 0XA


Contractor's ultimate
holding company:

Company registration 2081330


number of Contractor's
ultimate holding company:

Directors of Contractor's Maggi Bell


ultimate holding company:
Victor Gysin

Andrew Parker

Gordon Hurst

Dawn Mariott-Simms

OFFICIAL SENSITIVE – COMMERCIAL


Page 1193
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 20

AUTHORITY DISCLOSED DATA

OFFICIAL SENSITIVE – COMMERCIAL


Page 1194
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 21

COMMERCIALLY SENSITIVE INFORMATION

In this Schedule the Parties have sought to identify the Contractor’s Confidential Information
that is genuinely commercially sensitive and the disclosure of which would be contrary to the
public interest.

Row Commercially Sensitive Information Duration of Reasons


protection
1 Limitation of Liability – Clause 45 of the Contract Contract Note 1
Period plus 2
years
2 Insurance – Clause 25 and Schedule 10 (Insurance) of the Contract Note 1
Contract Period plus 2
years
3 Payment and KPIs – Clause 19 and Schedule 7 (Payment Contract Note 1
Mechanism) of the Contract Period plus 2
years
4 Compensation on Termination – Clause 35 of the Contract Contract Note 1
Period plus 2
years
5 Financial model (together with any preparatory versions of it Without limit Notes 1
and any updates, revisions or subsequent versions of it (or in time and 2
any similar financial models) provided by the Contractor
pursuant to this Contract and provided prior to the
Commencement Date for discussion.
6 Any information on Contractor’s costs including any Without limit Notes 1
disclosed pursuant to or in connection with the Contract. in time and 2
7 Any information of a financial nature, or other information Without limit Notes 1
which might reasonably be considered to be of a confidential in time and 2
nature, relating to the Contractor’s business disclosed
pursuant to this Contract (including audit information) and
Clause 24 (Information Documents and Records).
8 Change Notices, invoices, minutes of meetings between the Contract Notes 1
Parties, other documents and correspondence displaying any Period plus 2 and 2
of the foregoing information in this Schedule years

Note 1: The Contractor would be commercially disadvantaged by disclosure because the


information listed is of potential value to its competitors both in relation to any future re-
tendering of this Contract and in relation to other bids where obtaining a copy of the
Contractor’s negotiated positions and other sensitive information would place the Contractor at
a material disadvantage in competitive procurements.

Note 2: In addition to the concerns relating to other information, the Contractor would be
materially commercially disadvantaged by disclosure at any time of cost and financial
information related to its charges and the performance of this Contract because such
OFFICIAL SENSITIVE – COMMERCIAL
Page 1255
OFFICIAL SENSITIVE - COMMERCIAL

information is of value to its competitors both in relation to any future competitive tendering
and general market positioning.

Note 3: Notwithstanding the above table and Notes 1 and 2, the Contractor agrees that all
information relating to DIDO’s performance (including records and information that DIDO
must create and/or maintain and minutes of meetings relating to DIDO performance) is not
Commercially Sensitive Information. The Contractor also acknowledges that certain
information relating to this Contract will need to made available to entities involved in any
retendering of this Contract in accordance with Clause 36, and that nothing in rows 1 to 4 and 8
of the above table is intended to limit the provisions of the Contract in this regard.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1256
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 22

CORPORATE REACH BACK: PRINCIPLES PAPER

1. INTRODUCTION

1.1 Award Criterion B.2.3 refers Bidders to:

(a) demonstrate an effective strategy to access specialist market knowledge, resources and
wider skills beyond its Named Contractors on an ongoing basis to support the delivery
of the Authority’s requirements and the Infrastructure Implementation Plan (IIP); and

(b) confirm that it will provide such corporate reach-back and additional specialist market
knowledge in order to deliver the IIP at its own risk and at no cost to the Authority.

Further guidance on corporate reach-back is set out below.

2. OVERARCHING PRINCIPLES

2.1 The following section sets out the Authority’s overarching principles to be considered
by Bidders when developing its reach-back proposals:

(a) The primary purpose of reach-back is to allow for access to corporate knowledge and
additional corporate resources outside of the SBP management team (“Named
Contractors”). This may be where the SBP considers that the IIP and/or additional
financial savings can be better or more quickly delivered through the injection of
additional resources.

(b) The costs of providing reach-back must be met entirely by the SBP.

(c) When considering the use of reach-back, the SBP needs to ensure that DIDO remains a
sustainable organisation in the long term. The primary role of the SBP is therefore to
embed the required skills into DIDO (for example through training and recruitment)
rather than through implanting additional SBP resources in the organisation that will be
removed when the SBP relationship ceases.

(d) The concept of reach-back is one of accessing SBP corporate capability so that DIDO
can deliver its requirements on an ongoing basis.

(e) When considering its options to fill any skills gaps or posts, DIDO must demonstrate
that it has considered the use of normal recruitment processes and not merely relied on
the availability of SBP resource. Any arrangements for temporary filling of posts
through reach-back that are put in place must consider and comply with legislation and
Authority Policy Rules and Guidance (including in relation to TUPE, public
procurement and the approvals process for use of consultants).

(f) The Authority wishes to encourage the use of reach-back to promote best practice
through DIDO and considers this could be done through, but is not limited to: provision
of corporate best practice, information, red team reviews, joint training, secondments or
interchange of DIDO staff to the SBP partner organisations (and vice versa) and other

OFFICIAL SENSITIVE – COMMERCIAL


Page 1257
OFFICIAL SENSITIVE - COMMERCIAL

similar mechanisms. Any secondments must comply with Authority Policy Rules and
Guidance.

(g) It is expected that proposals in relation to reach-back will be set out in the IIP and
updated as part of the IIP on an annual basis

3. SPECIFIC OPERATIONAL REACH-BACK

3.1 The following section sets out where the Authority’s believes corporate reach-back
could be used by an SBP.

Short term resource requirement

3.2 The provision of SBP staff to DIDO to temporarily plug any unfilled long term post.
The SBP will be required to demonstrate that DIDO has first tried or is trying to fill the shortage
through the normal channels, which are likely to include:

(a) Backfilling posts from DIDO

(b) Recruitment routes available to DIDO

(c) Agency staff and existing supply chain arrangements.

3.3 Any short term posts will be subject to the manpower substitution provisions which
provide for a maximum duration of 11 months.

Access to SBP corporate processes/knowledge

3.4 The provision of information on how its corporate uses processes/ best market practice
for the benefit of DIDO.

Additional projects volume

3.5 Additional reach-back resource may be required to manage projects volume, spikes in
activity or specialist activity.

3.6 Projects resources required will be determined on an annual basis through the IIP
process. The SBP will be expected to provide reach-back to support the programme of work
where required. There may also be other spikes in activity, one off projects or specialists
requirements that do not merit the recruitment of a long term post where the SBP will be able to
offer support from its organisation on a temporary basis.

Supplemental training

3.7 The provision of reach-back to supplement existing Authority training to up-skill the
DIDO workforce and gain and maintain market knowledge. For example, it is envisaged that
the SBP may use its reach-back to provide onsite and offsite training to DIDO resources as well
as the use of seminars and ad hoc training courses to enable DIDO staff to better perform its
functions and deliver the IIP.

3.8 Whilst the Authority sees up-skilling and training DIDO staff as an important part of
reach-back, formal training must adhere to any Authority Policy Rules and Guidance and use
the training facilities / personnel presently provided to the wider Authority.
OFFICIAL SENSITIVE – COMMERCIAL
Page 1258
OFFICIAL SENSITIVE - COMMERCIAL

SBP staff injection for specific procurement / activity

3.9 The SBP may wish to use reach-back to inject temporary SBP staff into DIDO to help
support procurements to accelerate the timetable and therefore savings available.

Access to specialist skill set

3.10 Reach-back may be used where DIDO requires access to a limited specialist skill set to
complete a task which is not a full time position. The SBP is encouraged to provide support
subject to demonstrating that they have tried to fill the requirement through normal channels as
set out above or where it is not value for money or cost effective to do so i.e. for a short term/
one off task.

4. PROHIBITED USE OF REACH-BACK

4.1 The following section sets out what is not permissible under the concept of reach-back.

Using reach-back for the long term filling of DIDO posts and/ or requirement for specific
technical specialist requirement on an on-going basis:

4.2 Such ongoing or long term needs are to be filled in the long term by a permanent
employee where that post is considered necessary in the long term.

4.3 Where a lack of resources has been identified by DIDO and/ or DIDO does not have the
relevant skills set, DIDO supported by the SBP, would review the options for addressing that
shortage or skills gap. This may include the use of agency staff, existing frameworks or
external recruitment where the post cannot be filled internally. As per the existing DIO process,
a business case would need to be made to establish the need and review the options. It is
considered that it would not be appropriate for the SBP to fill this gap through corporate reach-
back on a long term basis.

Using reach-back to fill Urgent Operational Requirements:

4.4 DIDO should be a sustainable organisation with appropriate internal skills and supply
chain to manage Urgent Operational Requirements (“UOR”). Therefore, DIDO should not be
reliant on the SBP Corporate reach-back to fill Urgent Operational Requirements. However the
Authority does recognises that there may be certain instances where reach-back may be required
for UOR on a short term resource requirement basis (as per 3.1 above), and in such
circumstances this may be permissible.

Filling a DIDO post with reach-back resources which is not vacant:

4.5 The SBP cannot substitute its own staff for DIDO staff through corporate reach-back.
DIDO wants to ensure that it is appropriately up-skilled and staffed so that there is a sustainable
organisation going forward, rather than an organisation filled with temporary posts.

Using reach-back to replace elements of the DIDO supply chain:

4.6 Corporate reach-back should not be used to plug any gaps in the delivery supply chain.
The role of the SBP is strategic only and not delivery focused. The use of corporate reach-back
should not result in any conflict of interest with any existing delivery frameworks and must be
in compliance with the Contractor’s Conflicts Management Policy.
OFFICIAL SENSITIVE – COMMERCIAL
Page 1259
OFFICIAL SENSITIVE - COMMERCIAL

Using reach- back to increase the scope of the contract or role of the SBP:

4.7 The use of reach-back should not be used as a way to increase the scope of the contract
or role of the SBP so that it falls outside the scope that was advertised in the original OJEU
notice.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1260
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 23

SPEND TO SAVE INITIATIVES AND PUMP PRIMING INITIATIVES: PRINCIPLES

PAPER

1. INTRODUCTION

1.1 The overarching principles are as follows:

(a) The Authority would like to pursue further Spend to Save and Pump Priming
initiatives but may not have the funds available to pursue them itself.

(b) As such it would wish to have a facility whereby it can request that the SBP funds
such initiatives on behalf of the Authority.

(c) Primarily the Authority envisages that it will be DIDO that pursues the initiative
with the support of the SBP and any corporate reach back facility (see principles for
reach-back at the end of this paper).

(d) The Authority would, however, be unable to invest alongside the SBP as it is not
permitted to mix public and private funds. The Authority would, however, retain
the right to fund the initiative in its entirety.

(e) The SBP would earn a return on its money investment and be reimbursed its
money investment. This would tend to be a priority return (assuming no senior debt
funding) and payable from the savings or disposal receipts generated.

(f) The SBP is to bid a cap and collar for this return, providing the parameters for the
return that can be earned by the SBP. These are to be bid during the process together
with any other conditions.

(g) Costs to be incurred by DIDO pursuing such initiatives must be transparent and pre-
agreed with the Authority.

(h) At the start of each stage (see below), the SBP and DIDO will document how VFM
will be measured and assessed at each subsequent stage.

2. SPEND TO SAVE INITIATIVES

2.1 Overarching intention is that this relates to upfront money investment to drive future
revenue savings.

2.2 The PMPP provides for:

(a) Stage 1 – DIDO to put forward its initial proposals (options analysis, costings,
projected savings and SBP proposed return on investment, accounting treatment) for
Authority to consider.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1261
OFFICIAL SENSITIVE - COMMERCIAL

(b) As part of its initial proposal, the SBP should set out its proposed role in the initiative
and consider whether the initiative is in compliance with the procurement rules, together
with any other options the Authority may have to procure the initiative.

(c) If acceptable, DIDO would develop the proposal further to a point where it is ready to
be implemented including the detailed costing proposed etc. (stage 2).

(d) The return on the SBP’s money investment is contingent on the delivery of the
savings and payable only once. However that capital invested and return may be
recouped over a period of time where the savings are delivered over a period of time.

(e) The return is to be agreed on a case by case basis – subject to a cap and collar to be bid
at ITN.

(f) If the principle of the initiative is accepted at stage 1 and DIDO develops the detailed
costing (stage 2), and the Authority does not then approve the detailed proposal (and the
SBP demonstrates that it would have delivered VFM), the Authority will reimburse the
SBP’s reasonable costs.

(g) Reasonable costs include any third party costs and reach-back costs the SBP has
incurred as a result of pursuing that initiative beyond stage 1. Such costs are to be
agreed prior to the commencement of the work and capped at that level as being the
maximum to be reimbursed should the Authority not pursue the initiative beyond
stage 2 (subject to the VFM assessment above).

2.3 Spend to save scenarios are set out below for illustrative purposes only.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1262
OFFICIAL SENSITIVE - COMMERCIAL

Stage 1 Stage 2 Assumptions


Scenario 1
SBP recommends Authority accepts Authority accept SBP uses both its own staff and DIDO staff to work up the
that the Authority proposal. Proceeds stage 2 proposals detailed proposals. Please note that the overarching principle is for
invests in capital to stage 2 and DIDO DIDO to pursue the initiative with the support of the SBP and any
expenditure to fund progresses with corporate reach back facility; if SBP uses its own staff then this must
future revenue initiative comply with the corporate reach-back principles and any return on
savings e.g. replace its staff will be at risk for the SBP and recouped through the
some boilers across incentive fee.
the accommodation
where the SBP has the in-house skills it should use its own
estate to drive down staff via corporate reach-back rather than procure third parties.
future energy
consumption if any third party input is needed to develop the detailed proposals
e.g. needs specialist heating engineers, then this is to be procured
The capital through the DIDO normal procurement routes.
investment is
not affordable DIDO procures the boilers i.e. goes to the market to acquire and
by the install boilers (as opposed to SBP)
Authority DIDO manages the procurement and oversees installation as it
would do now on behalf of Authority.
the Authority owns the boilers from day 1.
the Authority request that the SBP to provide the capital to pay
for the boilers once installed and fund future maintenance until such
time as the SBP is reimbursed for its investment.
If the SBP wants to provide DIDO with any support to do this (for
example so it is done quicker) then any support is via corporate reach
back and must adhere to those principles.
the Authority repays the SBP its capital (and any maintenance
funded by the SBP) and a return on its investment from the savings
delivered.
A ll i li d b i id h SBP l
OFFICIAL SENSITIVE – COMMERCIAL
Page 1263  
OFFICIAL SENSITIVE - COMMERCIAL

Authority accepts Authority rejects The Authority must reimburse the SBP reasonable costs including
proposal. Proceeds stage 2 proposals and SBP staff costs (corporate reach back) in working up the detailed
to stage 2 proposal would have proposal, advisers or third party costs if applicable, albeit the
offered VFM latter should be minimal as should mainly be DIDO costs as the
assumption is that it is procured through it rather than the SBP.
Costs are to be agreed prior to the commencement of the work and
capped at that level as being the maximum to be reimbursed should
the Authority not pursue the initiative beyond stage 2 (subject to the
VFM assessment below)
Authority accepts Authority rejects No reimbursement of any costs by the Authority.
proposal. Proceeds stage 2 proposals VFM methodology would have been documented at the start of stage
to stage 2 and/or the detailed 2 as per the overarching principle.
proposal would not
Authority rejects No reimbursement of any costs by the Authority.
proposals at stage 1
Scenario 2 Authority accepts Authority accept SBP uses both its own staff and DIDO staff to work up the
proposal. Proceeds stage 2 proposals detailed proposals. Please note that the overarching principle is for
SBP proposes to
to stage 2 and the SBP DIDO to pursue the initiative with the support of the SBP and any
invest directly in
an initiative eg progresses with corporate reach back facility; if SBP uses its own staff then this must
initiative comply with the corporate reach-back principles and any return on its
installation of
solar panels on staff will be at risk for the SBP and recouped through the incentive
the Authority’s fee.
assets. where the SBP has the in-house skills it should use its own
staff via corporate reach-back rather than procure third parties.
the SBP procures/ arranges for the installation of the panels under
licence from the Authority and pays for any maintenance costs over
the period of the investment.
the SBP would own the panels.
the Authority pays a return on the SBP’s investment (but not the
investment itself) from the savings delivered.
as well as the return being paid, the SBP also shares in the future
OFFICIAL SENSITIVE – COMMERCIAL
Page 1264  
OFFICIAL SENSITIVE - COMMERCIAL

revenue savings delivered as a result of the upfront investment. This is


the mechanism by which the SBP gets its return on the corporate
reach-back used.
at the end of the contract or on early termination, the SBP may be
required to remove the panels or the Authority will reimburse
certain of the SBP’s costs (which will be agreed in advance).
Authority accepts Authority rejects the Authority must reimburse the SBP reasonable costs ie assumed
proposal. Proceeds stage 2 proposals and to be staff costs (including corporate reach back) in working up the
to stage 2 proposal would have detailed proposal, advisers or third party costs if applicable (ie
offered VFM architects etc) albeit the latter should be minimal as should mainly be
DIDO costs as the assumption is that it is procured through it rather
than the SBP.
costs are to be agreed prior to the commencement of the work and
capped at that level as being the maximum to be reimbursed should
the Authority not pursue the initiative beyond Stage 2 (subject to
Authority accepts Authority rejects h reimbursement
no VFM b l costs
of any ) by the Authority.
proposal. Proceeds stage 2 proposals VFM methodology would have been documented at the start of Stage
to stage 2 and/or the detailed 2 as per the overarching principle.
proposal would not
have offered VFM
Authority rejects no reimbursement of any costs by the Authority.
proposals at stage 1

OFFICIAL SENSITIVE – COMMERCIAL


Page 1265  
OFFICIAL SENSITIVE - COMMERCIAL

3. PUMP PRIMING INITIATIVES

3.1 The overarching intention is that this relates to capital investment to kick start an
initiative that will result in a capital receipt (rather than the primary purpose being to
deliver on-going savings as per spend to save, although future savings may occur as a result
of the pump priming). Examples might include:

(a) funding the provision of upfront infrastructure in-order to improve the value of land to
be brought to the market. i.e. one off capital injection and associated works upfront to
deliver a future capital receipt.

(b) investing in planning advice to change the use of land or improve the value of that
land. i.e. one off capital injection for third party services to improve the value of an
asset or to maximise future sale proceeds.

(c) acquisition of ransom strips.

3.2 It is considered this will not involve the SBP providing strategic management input
upfront to maximise value – as this is part of the remit in any event, needs to be compliant
with the principles of corporate reach-back and the SBP would get rewarded through the
incentive fee mechanism for disposals and projects.

3.3 As for spend the save, the PMPP provides for:

(a) Stage 1 - DIDO to put forward its initial proposals (options analysis, costings, projected
receipts and associated capital expenditure, planning implications and SBP proposed
return on investment, accounting treatment) for Authority to consider. The stage 1
proposal is also to consider wider issues such as re-provisioning costs, stakeholder
management etc.

(b) As part of its initial proposal, the SBP should set out its proposed role in the initiative
and consider whether the initiative is in compliance with the procurement rules, together
with any other options the Authority may have to procure the initiative.

(c) If acceptable to the Authority, DIDO is to develop the proposal further to a point
where it is ready to go to market including detailed costing proposed etc. (stage 2).
Projected receipts are to be supported by independent third party valuations.

(d) The return on investment is contingent on the delivery of the initiative and payable
from subsequent net disposal receipts.

(e) If the net proceeds from disposal are insufficient to repay the capital and the return as a
result of the disposal not generating the level of receipts envisaged by the SBP, the
SBP’s capital and return will be limited to that increase in value. If no additional value
is generated, no capital or return will be payable.

(f) The return is to be agreed on a case by case basis – subject to a cap and collar to be bid
at ITN

OFFICIAL SENSITIVE – COMMERCIAL


Page 1266 
 
OFFICIAL SENSITIVE - COMMERCIAL

(g) The SBP will additionally share in the net disposal incentive fee as per the PMPP. For
the avoidance of doubt this will also be net of any investment made by the SBP so there
is no double counting.

(h) If the principle of the initiative is accepted at stage 1 and DIDO develops to the
detailed costing (stage 2), and the Authority does not then approve the detailed proposal
(and the SBP demonstrates that it would have delivered VFM), the Authority will
reimburse the SBP’s reasonable costs.

(i) Reasonable costs include any third party costs or reach-back costs the SBP has incurred
as a result of pursuing that initiative beyond stage 1. Such costs are to be agreed prior to
the commencement of the work and capped at that level as being the maximum to be
reimbursed should the Authority not pursue the initiative beyond Stage 2 (subject to
the VFM assessment above)

(j) Unlike the spend to save there is an additional provision which allows for the Authority
to get independent input / advisers to look at the proposals to make sure proposals are
competitive. DIDO is to meet the cost of such advice.

3.4 Pump priming scenarios set out below for illustrative purposes only.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1267 
 
OFFICIAL SENSITIVE - COMMERCIAL

Stage 1 Stage 2 Assumptions


Scenario 1
SBP proposes investment Authority Authority accept SBP uses both its own staff and DIDO staff to work up the detailed proposals.
In upfront accepts stage 2 Please note that the overarching principle is for DIDO to pursue the initiative
infrastructure costs in proposal. proposals and with the support of the SBP and any corporate reach back facility; if SBP uses
order to sell an asset. Proceeds to DIDO its own staff then this must comply with the corporate reach-back principles
stage 2 progresses with and any return on its staff will be at risk for the SBP and recouped through the
For example initiative subsequent disposal fees.
Infrastructure works
where the SBP has the in-house skills to work up the proposal it should use
needed before the asset
can be sold e.g. putting its own staff via corporate reach-back rather than procure third parties.
in a road to sell off if any specialist third party input is needed to develop the detailed
serviced plots to third proposals or it doesn’t sit well with the SBP skills set, that this is input is
party developers. procured through the DIDO normal procurement routes.
The investment cannot the Authority procures the infrastructure
be funded by the DIDO manages the procurement and oversees the works as they would do now.
Authority
the Authority owns the infrastructure (given it owns the land) from day 1.
the Authority requests the SBP to provide funding for the infrastructure and
for its maintenance until such time as the SBP is reimbursed for its investment .
If SBP wants to provide DIDO with any support to do the procurement (for
example so it is done quicker) then any support is via corporate reach back
and must adhere to those principles (see end of paper for principles)
the Authority repays SBP its capital and a return on its investment from the
capital receipt (subject to the overarching principle that this is limited to
the uplift in the receipt above the value that would otherwise have been
realised if the receipt is insufficient to cover both capital and the return)
as well as capital investment and return being paid, the SBP will also share
in the future capital receipt delivered as a result of the upfront investment
OFFICIAL SENSITIVE – COMMERCIAL
Page 1268 

 
OFFICIAL SENSITIVE - COMMERCIAL

under the PMPP. This is the mechanism by which the SBP gets its return on
the corporate reach-back used. This is net of any investment of the SBP to
ensure no double counting.
alternatively, the SBP could invest directly in the road and procure it direct.
In this instance, as per the spend to save, the SBP would be obliged to transfer
the road at cost to the Authority or to a subsequent purchaser of the land
subject to any reimbursement of that cost to the SBP from the sale proceeds.
Authority Authority rejects the Authority must reimburse the SBP reasonable costs ie assumed to be staff
accepts stage 2 costs (including corporate reach back) in working up the detailed proposal,
proposal. proposals and advisers or third party costs if applicable, albeit the latter should be minimal as
Proceeds to proposal would should mainly be DIDO costs as assumption is that it is procured through it
stage 2 have offered rather than the SBP.
VFM costs are to be agreed prior to the commencement of the work and capped at
that level as being the maximum to be reimbursed should the Authority not
pursue the initiative beyond Stage 2 (subject to the VFM assessment below)
Authority Authority rejects no reimbursement of any costs by the Authority.
accepts stage 2 proposals VFM methodology would have been documented at the start of Stage 2 as
proposal. and/ or the per the overarching principle.
Proceeds to detailed proposal
stage 2 would not have
offered VFM
Authority no reimbursement of any costs by the Authority.
rejects
proposals at
stage 1
Scenario 2
SBP proposes to invest Authorit Authority accept SBP uses both its own staff and DIDO staff to work up the detailed proposals.
in cap ex to fund a y stage 2 proposals Please note that the overarching principle is for DIDO to pursue the initiative
change of use on a accepts and DIDO with the support of the SBP and any corporate reach back facility; if SBP uses
property. proposal. progresses with its own staff then this must comply with the corporate reach-back principles
OFFICIAL SENSITIVE – COMMERCIAL
Page 1269 

 
OFFICIAL SENSITIVE - COMMERCIAL

Proceeds to initiative and any return on its staff will be at risk for the SBP and recouped through the
stage 2 subsequent disposal fees.
where the SBP has the in-house skills to work up the proposal it should use
its own staff via corporate reach-back rather than procure third parties.
if any third party input is needed to develop the detailed planning
application this input can be procured direct by the SBP as part of its pump
priming capital invested.
the Authority repays the SBP its capital and a return on its investment out
of the subsequent disposals receipts, (subject to the overarching principle that
this is limited to actual net disposal receipts over the value that would
otherwise have been realised if there are insufficient proceeds)
as well as capital investment and return being paid, the SBP will also share
in the future net capital receipt delivered as a result of the asset subsequently
being sold through the disposals incentive regime. This is the mechanism by
which the SBP gets its return on the corporate reach-back used, subject to
there being no double counting as above.
Authority Authority rejects the Authority must reimburse the SBP reasonable costs ie assumed to be staff
accepts stage 2 costs (including corporate reach back) in working up the detailed proposal,
proposal. proposals and advisers or third party costs if applicable.
costs are to be agreed prior to the commencement of the work and capped at
Proceeds to proposal would
that level as being the maximum to be reimbursed should the Authority not
stage 2 have offered
pursue the initiative beyond Stage 2 (subject to the VFM assessment below)
VFM
Authority Authority rejects no reimbursement of any costs by the Authority.
accepts stage 2 VFM methodology would have been documented at the start of Stage 2 as
proposal. proposals and/or per the overarching principle.
Proceeds to the detailed
stage 2 proposal would
not have offered

OFFICIAL SENSITIVE – COMMERCIAL


Page 1270 

 
OFFICIAL SENSITIVE - COMMERCIAL

Authority no reimbursement of any costs by the Authority.


rejects
proposals at
stage 1

OFFICIAL SENSITIVE – COMMERCIAL


Page 1271 

 
OFFICIAL SENSITIVE - COMMERCIAL

4. CAP ON FUNDING

4.1 For both spend to save and pump priming the maximum amount outstanding
at any one time is to be £40m.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1272 

 
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 24

DIDO SERVICES

The table below broadly sets out the scope of services/activities DIDO provides to the
Authority and other entities as at the Commencement Date. The scope of the DIDO
Services may change from time to time, at the Authority’s discretion, in response to
changed requirements of the Authority.

For the avoidance of doubt, any material changes to the scope of the DIDO Services
shall be reflected in revisions to this Schedule 24. Such Changes, and any other
Changes to this Contract which may flow from such amended scope, shall be dealt
with in accordance with the Change process set out in Schedule 12.

Services/ Activity Description


Strategic  Managing construction projects (via third party sub-
management of
contractors and project managers) as detailed below:
capital projects
 Provide interface with SAPT and customers in relation
to their capital projects requirements.
 Develop and update strategy for capital projects
delivery.
 Support production of the projects sub-programme of
the DIP.
 Strategic and day to day contract / project management
of existing contractors / suppliers.
 Develop user requirements.
 Develop user requirements into specifications for
service delivery / implementation.
 Provide detailed budget monitoring and reporting (e.g.
five (5) year / triennial / annual) based on DIGA
specific requirements.
 Business case production and manage approval
process, presently part outsourced to third party
providers.
 Review outputs from cost and schedule analysis at
option appraisals and approval gates.
 Assessment studies and feasibility studies (presently
part outsourced to third party providers).
 Cost planning for all capital projects and cost reviews
as project programme progresses (presently part

OFFICIAL SENSITIVE – COMMERCIAL


Page 1273 

 
OFFICIAL SENSITIVE - COMMERCIAL

Services/ Activity Description


outsourced to third party providers).
 Risk management and critical appraisal of risk
documentation (presently part outsourced to third
party providers).
 Oversee contract procurement and monitor framework
contractors and procurement service providers
presently part outsourced to third party providers).
 Ensure standardisation and savings across portfolio
solutions.
 Compare and report performance to agreed
benchmarks.
 Contract procurement, performance oversight and
assurance.
 Key programme management, including mitigating
escalated risks.
 Provide senior stakeholder management and liaison
with military end user customers.
Soft FM  Managing the provision of soft FM across the estate.
 Procuring and managing the soft FM suppliers.
 Develop and update strategy for soft FM delivery.
 Provide interface with SAPT and customers in relation to
their soft FM requirements.
 Develop detailed strategy for future soft FM to drive
savings and efficiencies.
 Identify, assess and draft detailed requirement for services.
 Set up a performance framework for management of KPI
reporting and collect KPI data for analysis (presently part
outsourced to third party contractors).
 Strategic and day to day contract / project management of
existing contractors / providers.
 Analyse, calculate and collect financial information
(presently part outsourced to third party contractors).
 Ensure compliance with statutory / mandatory obligations
(presently part outsourced to third party contractors).
 Provide senior stakeholder management and liaison with
Defence end user.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1274 

 
OFFICIAL SENSITIVE - COMMERCIAL

Services/ Activity Description


 Convert Government wide standards into relevant military
standards.
 Maintain and provide analysis of central database of
documentation and performance reports (presently part
outsourced to third party contractors).
 Providing high level contract performance oversight and
assurance reports.
 Key programme management: Key investment / financial
decisions; mitigate escalated risks; provide senior
stakeholder management and liaison with military end user
customers.
 Manage any soft FM procurements
Land Management  Develop and update strategy for LMS delivery and make
Services (“LMS”)
recommendations / implement where approved.
 Communicate with senior stakeholders and liaise with
other Government bodies / statutory non-Government
bodies and other Government departments.
 Stakeholder management and provide interface with SAPT
and customers to include translating high level user
requirement and feedback performance of LMS services.
 Letting and lettings management e.g. lease renewals,
dilapidations, debt recovery etc (presently part outsourced
to third party contractors).
 New hirings i.e. where DIO is a tenant e.g. rights of way,
offices, training on private land, and including cash office
responsibilities.
 Town and Country planning, valuations and ratings
(presently part outsourced to third party contractors).
 Disposals / acquisitions (presently part outsourced to third
party contractors).
 Claims (presently part outsourced to third party
contractors).
 Safeguarding (environmental issues such as wind energy,
development plan consultation) supporting the production
of byelaws (presently part outsourced to third party
contractors).
 Forestry and woodland management (presently part

OFFICIAL SENSITIVE – COMMERCIAL


Page 1275 

 
OFFICIAL SENSITIVE - COMMERCIAL

Services/ Activity Description


outsourced to third party contractors).
 Property ownership issues (e.g. boundary disputes,
maintenance of legal deeds, land condition) - presently
part outsourced to third party contractors.
 Policy interpretation (general initiatives) – presently part
outsourced to third party contractors.
 Geospatial services (includes management of estate
records) – presently part outsourced to third party
contractors.
 Performance management against benchmarks - presently
part outsourced to third party contractors.
 Policy help desk and advice and strategy for property
related issues (presently part outsourced to third party).
Hard FM  To include the management of the supply chain to execute
the strategy (which in the future will be set out in the IIP)
to better manage costs and services and delivering the
activities set out below:
 Managing the NGEC procurements.
 Manage any further procurements.
 Provide interface with SAPT and customers to include
translating high level user requirement and feedback
performance of hard FM.
 Develop and update strategy for hard FM delivery.
 Produce contract performance oversight and assurance
reports.
 Key programme management.
 Mitigate escalated risks.
 Provide senior stakeholder management and liaison with
Defence end user.
 Strategic and day to day contract / project management.
 Contract development – change control, documenting and
agreeing on any changes or amendments that may arise
during its execution; value for money testing (presently
part outsourced to third party contractors).

OFFICIAL SENSITIVE – COMMERCIAL


Page 1276 

 
OFFICIAL SENSITIVE - COMMERCIAL

Services/ Activity Description


 Risk management – managing contractual and supplier
risk (presently part outsourced to third party contractors).
 Market management – benchmarking, contingency
planning, re-competition strategies and procurement
(presently part outsourced to third party contractors).
 Delivery of hard FM services (presently part outsourced to
third party contractors).
 Specification and business case for any new requirements
over £2,500.
 Comparing performance to agreed benchmarks.
 Provide operational estate solutions to other Government
departments / public bodies who are in occupancy of
MOD assets and dealing with estate issues concerning
their occupancy needs.
Accommodation  To include the management of any supply chain to execute
the strategy set out in the IIP to better manage costs,
services, supply and demand including the delivery of the
activities set out below:
 Develop and update strategy for accommodation
delivery and make recommendations / implement
where approved.
 Communicate with customers.
 Stakeholder management and provision of interface
with SAPT and customers to include translating high
level user requirement and feedback performance of
accommodation services.

 Day to day contract management (presently part


outsourced to third party).
 Site management (presently part outsourced to third
party).
 Housing and accommodation provision (presently part
outsourced to third party).
 Defence Accommodation Stores (presently part
outsourced to third party).
 Liaise with Annington Homes for the subletting of
MOD properties to the public on a rolling six (6)

OFFICIAL SENSITIVE – COMMERCIAL


Page 1277 

 
OFFICIAL SENSITIVE - COMMERCIAL

Services/ Activity Description


monthly basis (presently part outsourced to third
party).
Strategic asset The SBP will work with DIDO (and in particular its current
management SAPT function) to:

 Identify and pursue further opportunities to reduce


costs across the estate so that DIDO is able to better
meet its CTs whilst still delivering the requirements of
the Authority.

 Pursue opportunities to release funding for


reinvestment into the estate to meet the requirements
of the Footprint Strategy.

 Improve the service to users and better respond to its


needs.

 Ensure that strategic asset management opportunities


are identified and pursued.

 Manage DIDO to deliver the core activities set out


below:

 Assist DIGA to develop the DICP as and when


required by the Authority.

 Deliver, monitor and review compliance of DICP.

 Support audit function.

 Advise on best procurement and delivery strategy.

 Drafting the DIP, liaising with third parties where


appropriate.

 Monitor the DIP, undertake prioritisation to determine


the funded programme providing the prioritised
position to the SAPT, allocate resources and monitor
DIP against strategic objectives.

 Challenge prioritisation process through a strategic


understanding of assets and identify efficiency
savings.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1278 

 
OFFICIAL SENSITIVE - COMMERCIAL

Services/ Activity Description


 Advise on efficient and effective asset management
practice across the DIO portfolio (including housing
allocation).

 Suggest and implement large scale rationalisation


activities (from programme perspective).

 Prepare and support submission of IAC business cases


and provide commentary.

 Advise on procurement strategy to help deliver


outputs.

 Develop, manage, and maintain the risk / opportunity


plan and benefits realisation plan in support of the
DIP.

 Assist DIGA in maintaining the Footprint Strategy


consulting with third parties where appropriate and
provide subject matter expert advice.

 Produce and maintain the asset management strategy


and plan.

 Undertake periodic reviews of the portfolio and update


the information systems.

 Receive and evaluate reactive optimisation


opportunities.

 Check compliance of portfolio against existing


policies.

 Provide operational estate solutions to other


Government departments / public bodies who are in
occupancy of MOD assets and dealing with estate
issues concerning their occupancy needs.

PFI  Develop and update future contracting strategy and review


of contracts (including contributing to the Renegotiation
Programme and the delivery of benefits from that
programme).

OFFICIAL SENSITIVE – COMMERCIAL


Page 1279 

 
OFFICIAL SENSITIVE - COMMERCIAL

Services/ Activity Description


 Stakeholder management and provision of interface with
SAPT and customers to include translating high level user
requirement and feedback performance of PFI contracts.
 Managing the current 19 estate PFI contracts in place.
 Managing the Health and Safety and legal roles where
necessary (presently part outsourced to third party).
Overseas estate  Efficiently and effectively manages the Overseas estate,
complying with the International Protocols set out in the
Data Room
Infrastructure  Land & property: complex planning advice, heritage,
Professional Services
access and safeguarding
(“IPS”)
 Engineering & construction: airfield inspections, explosive
(specialist technical storage inspections, weapons effects on structures,
expertise and advice) electrical, mechanical and fuel infrastructure.
 Environmental: environmental liability management,
explosive ordnance clearance, sustainable development
support, rural estate management and ecology.
 Provide technical authority sign off as per MOD policy
documentation.
 Provide intelligent client role to provide expert technical
challenge to supplier proposals.
Utilities  Manage the efficient provision of all utilities to the estate
(apart from that procured through PFI arrangements),
pursuing opportunities to consolidate contracts and reduce
costs where appropriate. In particular:
 To accurately track and forecast demand for energy
and water on the Defence estate worldwide, and from
this ensure sufficient supplies at best value for money
to meet Defence needs, using wherever possible,
common Government or MOD supply contracts.
 To accurately track and forecast waste generated on
the Defence estate worldwide, and the extent of waste
recycling achieved.
 Working closely with industry partners and the user
community, deliver improvements in energy and water

OFFICIAL SENSITIVE – COMMERCIAL


Page 1280 

 
OFFICIAL SENSITIVE - COMMERCIAL

Services/ Activity Description


efficiency in new and existing buildings so as to
reduce MOD demand and consequent greenhouse gas
emissions, and to deliver improvements in waste
reduction measures and recycling facilities.
 To optimise security of energy supply, especially to
critical Defence facilities and installations. To ensure
prompt and accurate payment of energy and water bills
and related costs such as carbon permits.
 Compliance with energy and water supply legislation,
and to report on progress against Government and
MOD targets and policy for energy, water, and waste.
Training estate  Develop and update the strategy for training estate
delivery and make recommendations /implement
where approved.
 Stakeholder management and provide interface with
SAPT and customers to include translating high level
user requirements and feedback performance of
training estate services.
 The provision / allocation of training facilities (where
required including accommodation and catering) in
accordance with the agreed customer training
priorities.
 Translation of high level user requirement.
 Day to day contract / project management / estate
support and compliance (presently part outsourced to
third party).
 Delivery of training facilities (presently part
outsourced to third party).
 Management of training areas (presently part
outsourced to third party).
Additional DIO  The provision of facilities for the benefit of the Met Office
activities
 Ad-hoc property advice for the benefit of all third party
including non MOD users of the Defence Estate
customer service
arrangements
Day to day  Draft production of answers to Parliamentary questions

OFFICIAL SENSITIVE – COMMERCIAL


Page 1281 

 
OFFICIAL SENSITIVE - COMMERCIAL

Services/ Activity Description


operations and Ministerial submissions to standard required by
Ministers.
 Provide support to the DIB in terms of secretariat.
 Support policy production and implementation.
 Policy setting based on Defence priorities.
 Upward reporting of DIDO performance to DIGA.
 Co-ordinate security clearance and support business
continuity plans.
 Accountable for technology data integrity and assurance.
 Administration and support to DIDO board (if applicable)
and committee(s) where required.
 Technology support and administration.
 Provide support for financial reporting and management
information, including managing bill payment across
DIDO.
 Collate data for Freedom of Information requests.
 Produce performance management reports.
 Co-ordinate staff training and development.
 Liaising on internal communications and external
communications / press.
 Financial management of DIDO ensuring regularity,
propriety and value for money of all expenditure proposals
and proposals to generate income and that DIDO remains
within the Control Totals allocated by DIGA
Volunteer estate  Stakeholder management and providing interface with
SAPT, Reserve Forces and Cadet Associations (“RFCA”)
and customers to include translating high level user
requirement and feedback performance of volunteer estate.
 Strategic and contract management (presently part
outsourced to third party).
 Managing the delivery of hard / soft FM (presently part
outsourced to third party).

OFFICIAL SENSITIVE – COMMERCIAL


Page 1282 

 
OFFICIAL SENSITIVE - COMMERCIAL

OFFICIAL SENSITIVE – COMMERCIAL


Page 1283 

 
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 25

AUTHORITY DEPENDENCIES

In addition to limbs (a) to (f) of the definition of Authority Dependencies, the additional dependencies set out in this Schedule 25 shall also
constitute Authority Dependencies. The Authority shall have no obligation to perform any dependency unless specifically set out in the
Contract or in this Schedule 25.

The Authority Dependencies shall be provided to the Contractor free of charge (which may be accounted for either within the DIDO budgets
(RDEL or CDEL as appropriate) or within other wider Authority budgets), unless otherwise agreed in writing between the Parties.

Nothing within this Schedule 25 is intended to replace the obligations of the Contractor to undertake the day to day management of DIDO or
and to mitigate any dependency failure.

The Authority shall, in relation to this Contract, perform the Authority Dependencies identified below. Subject to Clause 30, where the
Dependency Requirement listed in this Schedule 25 has not been met, the specified ‘Relief’ shall apply and the Mitigation Plan shall be
implemented. Each Authority Dependency shall be made continually available to the Contractor (including Named Contractors and/or
Contractor Personnel unless otherwise stated) from the Start Date to the End Date specified:

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

MOB PMO The Authority shall provide Co-located Commence Effectiv If no PMO An alternative location
1 programme management office PMO including ment Date e Date office spaces are could be agreed
with approximately 20 desk dovetailing in available at all including a non-DIO
spaces in Sutton Coldfield with the existing and the specific (Contractor) office or an
including a civilian and transformation mitigation alternative Authority

OFFICIAL SENSITIVE – COMMERCIAL


Page 1284 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

military transition liaison / team is more proposals are location.


manager during the optimal than a not acceptable to
Mobilisation Period so that the new stand-alone the Authority,
Named Contractors and Contractor team then the
existing DIO people can work Effective Date
together on meeting the will be deemed
mobilisation obligations to have been
met in so far as
payment of fees
is concerned.

MOB Access The Authority shall provide Strategic and Commence Effectiv If no access has The Contractor will
2 to DIO access to DIO teams for Operational ment Date e Date been permitted submit a communication
staff Named Contractor leadership Requirement then the plan with dates that the
during meetings/briefings to facilitate Effective Date Named Contractors will
mobilis integration. will be deemed wish to hold leadership
ation to have been meetings/briefings.
met in so far as
payment of fees
is concerned.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1285 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

IIP1 Access The Authority shall provide Line Effective Expiry The Authority The Authority will
to access for the Contractor’s management Date Date will not deem provide the Named
HRMS relevant staff (Named requirement and that the Contractors with their
Contractors and potentially Transformation Contractor has login details to their
Contractor Personnel) to requirement. failed to fulfil HRMS profiles by the
HRMS systems and data. the STTP end of the first month of
Milestones the Mobilisation Period.
related to These profiles should be
Workforce configured to reflect the
planning as set individual line
out in section management
31.1 of Part 2 of responsibilities of each
Schedule 3, Named Contractors. The
reference Contractor will advise
Milestone TR7 the Authority by the end
of the second month of
the Mobilisation Period
of any outstanding issues
with these profiles, and
the Authority will
complete all remedial

OFFICIAL SENSITIVE – COMMERCIAL


Page 1286 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

action to ensure the


profiles are fit for
purpose by the end of the
Mobilisation Period.

IIP2 Authori The Authority shall allow the Strategic and Effective Expiry Any failures by Appropriate Letter of
ty Contractor to, either directly or Operational Date Date the Named Delegation to the CEO
supply via the Authority’s Requirement Contractors Named Contractor.
arrange Representative, act as the against the KPIs
ments Authority’s authorised person due to the
in its supply arrangements inability to act
subject always to any Letter of on behalf of the
Delegations and acting within Authority for
Authority Policy, Rules & supply will be
Guidance. discounted when
calculating the
Service
Deductions.

IIP3 Militar The Authority (via military DIDO can rely Effective Expiry Where there is a Back filling gapped
y personnel centres) shall on military Date Date significant posts with civilians on

OFFICIAL SENSITIVE – COMMERCIAL


Page 1287 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

Service provide the military personnel personnel shortfall relative temporary placements
Personn per the manning levels in the availability in to the planned and, only when all other
el EOM (or as amended as with broad terms military staffing avenues have been
the Authority’s agreement as without the staff levels the exhausted, use of the
part of the short term being withdrawn Contractor may Contractor’s own
Transformation Plan and as set and leaving apply for KPI personnel and/or
out in Part 10 of Schedule 3 DIDO to relief or Base resources
and the Letters of Delegation challenge of Case adjustment
shall allow Named Contractors filling posts as appropriate,
to manage the performance of without a providing it can
the military personnel within corresponding evidence an
DIDO subject always to RDEL budget impact.
compliance with Authority
Policy Rules and Guidance.

IIP4 Pay and The Authority shall pay any Clarity that Effective Expiry Not applicable Not applicable
Discipli military personnel within DIDO does not Date Date
ne DIDO (including travel and pay military
expenses) and any employment staff
costs.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1288 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

IIP5A Smart In respect of pan government Strategic and Effective Expiry Not applicable. The Authority (DIGA or
Procure or pan-MOD contracts, the Operational Date Date MOD Commercial) shall
ment Authority shall permit DIDO Requirement at its own behest or at
(and the Contractor) access to the request of the CEO
the details of contracts and of DIDO, notify the CCS
access to the appropriate of this change and ask
commercial team for example them to cooperate with
the Crown Commercial Service DIDO.
(CCS) and/or the wider
Authority in respect of
procuring utilities and energy.

IIP5B Historic The Authority shall provide Strategic and Effective Expiry Not applicable The Authority will
al access rights to the Contractor Operational Date Date provide the Contractor
spend to the historical expenditure Requirement confirmation that it will
data data for example in order to permit access to the
verify utilities billing data. historical utilities billing
data by the end of the
first month after the
Effective Date.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1289 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

IIP6 Freedo The Authority will ensure that Compliance Commence Expiry Relief to KPI 36 Use of permitted
m of all requests received by it and with legislation ment Date Date extension of time and if
Informa that DIDO is required to and avoids the Parties discover that
tion answer shall be handed on to confused a request has been
and DIDO promptly to enable accountability flagged in the internal
PQs responses to be prepared in communication chain
good time to meet the KPIs and then the Contractor will
where information is held by direct DIDO Personnel
itself that is required to give a to prioritise the response.
complete answer to the
question that it shall share such
information

IIP7 Authori The Authority will allow and The Commence Expiry Where a Use of Contractor leased
ty facilitate Named Contractors management fee ment Date Date Phoenix (or its vehicle or private
Hire/Le and Contractor Personnel to and incentive successor) vehicle.
ased use hire/leased vehicles under fees do not contract
Vehicle the MOD Phoenix (or its include payment hire/leased
s successor) contract for DIDO of these costs vehicle is not
related activities subject available the
always to Authority Policy Contractor shall

OFFICIAL SENSITIVE – COMMERCIAL


Page 1290 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

Rules and Guidance. For the be entitled to


purposes of which, the recover its
Contractor Personnel and expenditure
Named Contractors shall be from DIDO
deemed to be Authority (which will have
employees and shall be treated avoided the
as such with regard to: Phoenix (or its
successor) cost).
a) costs incurred under the
MOD Phoenix (or its
successor) contract;

b) the requirement for


insurance and liability for any
uninsured losses;

c) reimbursement of incidental
expenses incurred

in accordance with Authority


Policy Rules and Guidance.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1291 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

IIP8 DII In respect of the Named Mandatory Commence Expiry Any resultant Access to data within the
UADs, Contractors and Contractor requirement ment Date Date impact will not DIDO IMS will be via a
printers Personnel, the Authority be deemed a DIDO employee subject
and (through its MOD wide breach of the to compliance at all
scanner contract) shall make available Contractor’s times with Authority
s the use of DII (or its successor) obligations. Policy Rules and
or UADS, printers and Guidance.
scanners and shall be
responsible for refreshing and
maintaining such DII
computers, including any
consumables with such costs
being met by DIDO.

IIP9 Faciliti The Authority (DIDO RDEL Saves double Commence Expiry None. Included n/a as part of the DIDO
es budget) shall meet all costs handling of ment Date Date here for clarity BCP managed by the
Manage associated with the Contractor costs. that the Contractor.
ment occupying Authority locations Contractor is not
for the purposes of this providing their
Contract only as set out in own office
paragraph 1.7 of Part 8 of

OFFICIAL SENSITIVE – COMMERCIAL


Page 1292 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

Schedule 3 solution.

IIP10 Health The Authority shall permit Needed to Commence Expiry Relief from Contractor to procure
and DIDO access to health and ensure ment Date Date KPIs 28 and 29 that DIDO identifies any
Safety safety records including those Contractor staff where causality access issues that it has
Record held by the military where work within is reasonably been unable to resolve
s DIDO is dependent on access Authority safety evidenced. itself without the support
to ensure the safety of processes of DIGA intervention.
personnel, for example any
COSHH records held by the
Army for Contractor occupied
premises.

IIP11 Hosting The wider Authority shall Atlas and DFTS Commence Expiry It is envisaged Authority DR/BC plans
Support provide rights for the need to know ment Date Date that this may apply
Desk Contractor to access technical that Contractor have a delay on
support helpdesks for hosting, staff are Mobilisation
DII and telecoms in respect of authorised users and
its Named Contractors and Transformation
where appropriate Contractor activities only.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1293 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

Personnel.

IIP12 Insuran In respect of DIDO activities, The scope of the Commence Expiry In respect of any n/a
ce and the Authority (through its Contractor does ment Date Date uninsured loss
Claims RDEL or CDEL budgets for not include of greater than
DIDO) shall be responsible for management of £50m the Base
all accident or professional claims or Case will be
indemnity claims and insurance upwardly
uninsured losses including provision for adjusted.
property damage. For the DIDO (per
avoidance of doubt, nothing in MOD Policy)
this Authority Dependency is
intended to affect the
Contractor’s obligation to
maintain insurance in respect
of its own activities in
accordance with Clause 25.

IIP13 Interfac The Authority shall maintain The IMS and Commence Expiry The Authority The Parties should
es provide the ICT hosting, file Atlas Hosting ment Date Date shall not be periodically check with
servers, network and interfaces and network are entitled to the part of the Authority

OFFICIAL SENSITIVE – COMMERCIAL


Page 1294 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

so as to allow DIDO and the all part of terminate the responsible for these
Contractor to use the DIDO separate Contract for contracts to make sure
IMS and for example if any procurements Contractor that DR and BC are
serving military staff who are not within the Default where robust and have been
part of DIDO need to access gift of the such a default tested so as to mitigate
the Joint Personnel Contractor to has been caused any failure risk.
Administration system for manage. by a failure to
their pay and allowances they provide the
will be able to do so. Authority
Dependencies.
The Contractor
may request
relief from any
impacted KPIs.

IIP14 Securit The wider Authority's DSAS Derogation from Commence Expiry The Base Case Where the security
y accreditors will continue to JSP440 is ment Date Date will be adjusted posture changes then the
Approv provide statements of required from a for material Contractor will procure
als permitted derogation from wider MOD changes to the that DIDO liaises with
Process security policy for premises DSAS existing the military TLB
(broadly in line with historic derogations representatives to

OFFICIAL SENSITIVE – COMMERCIAL


Page 1295 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

derogations from policy.) accreditor. subject to an mitigate the impact


Impact
Assessment, or
alternatively the
Contractor may
apply for relief
from the second
part of KPI 37.

IIP15 Teleph The wider Authority shall Mandated policy Commence Expiry KPIs related to Short term (up to 3 days)
ony make available the telephony ment Date Date customer incoming call diversion
functionality provided under satisfaction may to mobile phones and
the Defence Fixed be given relief if Contractor Personnel
Telecommunications Service the Contractor will use email for
supplied by British Telecom can demonstrate outgoing
for DIDO (and the Contractor) that DIDO was communications.
to use in performance of the not able to meet Longer disruption to be
services. the KPIs owing discussed at the time.
to any ‘outage’

OFFICIAL SENSITIVE – COMMERCIAL


Page 1296 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

IIP16 Trainin The Authority shall facilitate Mandatory Commence Expiry During the Course to be completed
g and provide access to the requirement ment Date Date Mobilisation as soon as an alternative
Courses booking system and make Period the date becomes available
/ Place available appropriate training Authority shall after the Effective Date.
allocati to Named Contractors and waive any If this is not possible
on Contractor Personnel where impacted then the Parties will
such training is required by the requirement in discuss in good faith the
Contract (for example during respect of appropriate remedial
the Mobilisation Period) and Clause 3.18 and action.
thereafter shall continue to after the
allow DIDO (and the Transformation
Contractor) to access wider Period shall give
Authority training. relief in respect
of KPI 31
(Mandatory
Training)

IIP17 Travel The wider Authority shall Saves double Commence Expiry Not applicable Contractor permitted to
provide access to the Defence handling ment Date Date as cost impact make its own travel
Travel portal. expenses and only. arrangements and re-
ensures that charges costs to the

OFFICIAL SENSITIVE – COMMERCIAL


Page 1297 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

Named Authority
Contractors are
treated the same
way as their
Authority
counterparts

DIDO Financi The Named Contractors shall Need for Effective Expiry The Contractor The Contractor will
Finan al have access to appropriate Contractor to Date Date shall be relieved work with DIDO to
ce Control financial reports showing monitor Control from liability implement financial
details of DIDO’s; Control Totals for cash under the reporting
Totals, budgets, forecasts, RDEL and indemnity in systems/procedures
committed expenditure, actual CDEL in Clause 14.17 to within DIDO in
expenditure and income, such accordance with the extent that accordance with best
reports to be available on a Clause 14 costs incurred commercial practice
monthly basis or more by DIDO are not
frequently if requested and accurately
shall be a true reflection of the reported by
transactions that have been DIDO’s finance
input into the underlying systems.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1298 

 
OFFICIAL SENSITIVE - COMMERCIAL

Ref Subject Dependency Requirement Rationale Start Date End Relief Mitigation Plan to
Date reduce probability and/or
avoid impact of
dependency failure.

systems.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1299 

 
OFFICIAL SENSITIVE - COMMERCIAL

SCHEDULE 26

TEMPLATE LETTER OF DELEGATION

Dear [Name]

LETTER OF DELEGATION

Introduction

1. As the Top Level Budget Holder for the Defence Infrastructure Organisation
(DIO), I am responsible for the delivery of a range of outputs, directly related
to the MOD’s infrastructure requirements. To discharge my responsibilities,
the Permanent Under Secretary (the MOD’s Principal Accounting Officer) has
delegated to me a range of financial and other authorities. A copy of PUS’s
letter of delegation to me is enclosed.

2. The purpose of this letter is to delegate to you specific authorities to enable


you to deliver the outputs for which you are accountable, consulting me as
appropriate when significant challenges or opportunities arise. You will be
accountable to me for the use and management of these delegations, as set out
in the delegation matrix enclosed.

3. In your role as Chief Executive you are responsible for the delivery of the
agreed outputs of DIDO.

4. Whilst you must exercise discretion, set appropriate limits and follow
government and Departmental guidelines, I encourage you to sub-delegate
your authorities to the maximum extent consistent with sound management,
and within the limits I have set. Sub-delegation must be undertaken formally
in writing to named individuals, who are to acknowledge receipt and confirm
that they understand the terms and extent of their delegated authorities. You
will ensure that a copy of all letters of delegation (down to B1 appointment) is
provided to the Deputy CFO as they are agreed.

Conduct of Business

5. In delivering those outputs, you need to recognise the distinction between the
authority to approve new expenditure, and the authority to execute approved
expenditure within your issued Control Totals.

6. You are personally accountable to me for:

a. Delivering your directed outputs and targets as effectively, efficiently and


economically as possible, while remaining within your issued Control
Totals. You are responsible for ensuring that any direction you give is
within your delegated authority, and has the appropriate approval in place;

OFFICIAL SENSITIVE – COMMERCIAL


Page 1300 

 
OFFICIAL SENSITIVE - COMMERCIAL

b. Executing the responsibilities and delegations set out at in the attached


delegation matrix;

c. Ensuring that publicly funded assets and other resources are used only in
the public service and that a clear distinction is maintained between public
and non-public funds; if in doubt you must consult the Senior Finance
Officer (SFO) of DIDO; and

d. Ensuring rigorous adherence to MOD’s zero tolerance policy on fraud,


theft, corruption and irregularity.

7. You are responsible for supporting me in ensuring that the systems of internal
control and business risk management across DIDO are operating efficiently
and effectively. Systems of control should ensure:

a. The reliability and integrity of financial and operating information and the
means for capturing and reporting such information;

b. Compliance with policies, plans, procedures and regulations;

c. The safeguarding of assets from loss or theft and ensuring that all losses
are reported and investigated to prevent any recurrence;

d. The economic and efficient use of resources and the achievement of value
for money; and

e. Effective corporate governance, risk management and assurance.

Financial Approvals & Financial Delegations

8. When exercising your approval authority, you must comply with the DIDO
and IAC Control Framework, including development and scrutiny of robust
business cases.

9. You are to ensure that expenditure is committed or incurred only in


accordance with the delegated financial authorities set out in this letter and the
associated guidance material, and through the advice of the SFO. You are fully
accountable for decisions taken within the scope of these delegations.

10. You have authority to execute the delivery of approved contracts, pay bills,
recover costs, make low value purchases through the use of the Government
Procurement Card (GPC) mechanism, and approve expenditure against your
outputs up to your agreed Control Total, and in line with agreed outputs and
targets. I recognise that you will be required to commit expenditure beyond the
financial year prior to formal agreement of your subsequent annual budget and
you have the authority to do so. You should base your decision on your current
issued Control Totals and recognising any future spending restrictions. If you

OFFICIAL SENSITIVE – COMMERCIAL


Page 1301 

 
OFFICIAL SENSITIVE - COMMERCIAL

have any concerns in this area you will discuss the situation with me prior to
making the commitment.

11. You are to provide a monthly statement of expenditure and a forecast of


outturn for the full year covering all aspects of expenditure within DIDO to the
SFO in accordance with In Year Management Instructions issued by Defence
Resources and the SFO.

Financial scrutiny

12. When exercising your delegated authority, you must ensure that:

a. All expenditure is consistent with the HM Treasury document ‘Managing


Public Money’, including the requirement to conform to International
Accounting Standards, and relevant MOD guidance 1 ;

b. The costs incurred can be met within existing budgetary limits issued to
you as a result of the Annual Budget Cycle, and, in particular, that Control
Totals (as adjusted during the in-year management process) are not
breached;

c. You have approval 2 from the appropriate approving authorities, including


Ministers where necessary;

d. You have complied with the current Cabinet Office / Efficiency Reform
Group (ERG) controls 3 ; noting that these controls are subject to regular
change; and

e. Any issues relating to the use of public funds which risk conflicting with
legislative requirements, HMT’s Managing Public Money or other HMT
guidance, or are novel or contentious or raise issues of financial principle
which are outside your delegated powers, must be raised with the SFO. 4
You do not have the authority to make any commitment until that advice
has been received and the commitment has been authorised.

f. All expenditure proposals and proposals to generate income must be


subject to financial scrutiny against the criteria of regularity and propriety,
value for money, and affordability and be carried out in accordance with
the letter of delegation provided by DG Fin to the SFO of DIDO.

                                                            
1
In particular JSP 462 – Financial Management Policy Manual, JSP 472 – Resource Accounting Policy
Manual and JSP 368 – Guide to Repayment, JSP 507 – Investment Appraisal Guidance
2
Approval categories and levels of expenditure are set out in the SMART Approvals guidance issued on behalf
of the IAC and within the DIDO Control Framework.
3
Cabinet Office – Guidance on Actions & Processes – Version 3.1 dated June 2012 – Source
http://www.cabinet-office.gsi.gov.uk/guides.htm.
4
See JSP 462 – Financial Management Policy Manual (Chapter 3) for guidance.

OFFICIAL SENSITIVE – COMMERCIAL


Page 1302 

 
OFFICIAL SENSITIVE - COMMERCIAL

The SFO is responsible for ensuring compliance with the guidance.


Proceeding with expenditure proposals which fail to satisfy the criteria of
regularity and propriety, value for money and affordability, or proceeding with
novel or contentious proposals without seeking the necessary HM Treasury
clearance, may be considered an abuse of financial authority and may result in
formal disciplinary action. If in doubt, you must seek advice from the SFO.

Delegated Staffing Authority and Complementing Powers

13. Your civilian workforce is an essential element of the resource available to


you in support of the delivery of your outputs and key targets. You will be
supported by the DIDO Civilian Workforce Advisor.

14. You will wish to note in particular that:

a. You have been delegated the authority to recruit into all civilian posts
within the agreed organisational design for DIDO. However, you have no
authority to commit to external recruitment without the approval of the
SFO, in line with Departmental policy.

b. You have the authority to create and abolish posts, re-grade existing posts
and/or change the grade mix (up to and including Pay Band B) – subject to
remaining within your resource control total and acting in accordance with
the limits of your delegated complementing powers as set out in JSP 462.
In exercising your authority you must observe the principles and standards
as laid down in the Civil Service Management Code.

c. You have the authority to manage your civilian workforce in accordance


with all the relevant Civil Service and Departmental regulations, UK
employment legislation and, in the case of Locally Engaged Civilians
(LECs) and UK Based Civilians serving overseas, local employment law
and other legal provisions or binding arrangements.

Delegated Commercial Authority

15. You have the authority to execute contractual commitments from the resources
available within your issued Control Totals. However the authority to enter
into any arrangement, in whatever form, which places a commitment upon the
MOD such as placing, amending contracts, or dealing with claims arising, can
only be exercised by staff holding written authority from the MOD
Commercial Director through DIDO Hd Commercial. This letter does not
convey any commercial authority. Any sub-delegations you make should
ensure you maintain complete clarity and separation between financial
authority and Commercial authority.

16. Contracts or arrangements that have been negotiated on a pan-Government


basis to secure best value for money for the public purse must be used by all
procurement staff as the default option. In exceptional circumstances, where

OFFICIAL SENSITIVE – COMMERCIAL


Page 1303 

 
OFFICIAL SENSITIVE - COMMERCIAL

an alternative source has been identified and considered to provide better


overall value for money for the Department, an exemption may be sought.
You should seek the advice of DIDO commercial staff as soon as you have
identified a requirement in order that they can advise on the most appropriate
Contracting route.

Business Continuity

17. You should ensure that appropriate Business Continuity plans and processes
are in place to manage the risks associated with the continuation of business 5
in your area of responsibility. The SFO is the senior responsible person for
Business Continuity in DIDO.

Parliamentary & Public Business, Advice to Ministers and Presentation

18. In exercising your duties, you should be mindful of potential parliamentary,


political, policy and presentational issues and the interests of other government
departments and should ensure that Departmental instructions, guidance and
standards in this area are adhered to. Where necessary the SFO should be
consulted for clarification and assistance.

Freedom of Information and Data Protection

19. In the event of a request under the Freedom of Information Act 2000, you
should provide the information requested accurately and within the time
constraints allowed as guided by the SFO.

20. You should ensure that the processing of information relating to individuals
(both Service and civilian), including the obtaining, recording, holding or use
or disclosure of such information within DIDO, complies with relevant
guidance. 6 The Chief Information and Process Officer (CIPO) has been
appointed as Data Protection Officer, Chief Information Officer and Senior
Information Risk Owner (SIRO), and is the principal TLB source of
authoritative advice on this issue.

Health and Safety

21. Responsibility for the provision of a safe working environment rests with us
all. Wherever DIDO staff or their contractors are employed they are required
to follow the site H&S rules and requirements at all times, and where DIDO is
the Hd of Establishment appropriate arrangements should be set in place and
rigorously applied. This in no way removes the duty of care from the chain of
at command all levels and their obligations in respect of the Health and Safety
at Work etc Act 1974 and associated legislation. The SHEP requirements for

                                                            
5
JSP 503: Business Continuity Management. 3rd Edition
6
Data Protection Act 1998 and JSP 400 Disclosure of Information

OFFICIAL SENSITIVE – COMMERCIAL


Page 1304 

 
OFFICIAL SENSITIVE - COMMERCIAL

DIDO posts are set out in the CE’s SHEP Organisation & Arrangement
Statement. 7

22. In the case of multi-occupier sites, the lead unit, normally the headquarters or
the largest unit, is to set up arrangements to ensure that there is co-operation
between the lead and all lodger units, including contractors. The safety and
environmental protection command and control arrangements will normally
follow those of the lead headquarters or unit. Arrangements are to be covered
by formal letters of agreement for each such site.

23. I have copied this letter to the Senior Finance Officer and will publish it, and
any subsequent amendments, on the DIDO Intranet. All subsequent letters of
delegation to SCS and military equivalents that you issue will also be
published.

24. Finally, you should write to me to confirm that you understand the terms and
extent of your delegated authorities and the accountability that they entail.

Yours sincerely,

TLB Holder

                                                            
7
Safety Health & Environmental Protection (SHEP)

OFFICIAL SENSITIVE – COMMERCIAL


Page 1305 

 
OFFICIAL SENSITIVE - COMMERCIAL

RECEIPT OF LETTER OF DELEGATION

1. I, [Name] acknowledge receipt of my personal letter of delegation dated [xx


2014] from [TLB Holder]. This delegation is to the value specified and is
valid only whilst I hold my present post.

2. I confirm that I have read and understood my letter of delegation.

SIGNED …………………………………………………………………………..

NAME …………………………………………………………………………..

DATE …………………………………………………………………………..

When completed please return to:

[xxx]

OFFICIAL SENSITIVE – COMMERCIAL


Page 1306