SCHEDULE 2 - NEC MODEL CONTRACT Contents

NEC Model Contract (NEC Term Service Contract)

Facilities Management Framework Agreement

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SCHEDULE 2 - NEC MODEL CONTRACT

Contents

Page

2 Deed of Agreement incorporating the NEC3 Term Service Contract June 2005 (with amendments June 2006)

Contract Schedules

5 A. Contract Data Part One – Data provided by the Employer

17 B. – Option Z: Additional conditions of contract

65 C. Contract Data Part Two – Data provided by the Contractor

68 D. The Service Information

70 E. The price list

Optional Contract Schedules

72 F. Collateral warranty agreements

74 G. Performance bond

76 H. Arbitration procedure

78 I. TUPE and related matters

86 J. Security provisions

99 K. Management information

Contract Guidance Notes

102 Introduction

104 Deed of Agreement

105 Contract Schedule A: Contract Data provided by the Employer

108 Contract Schedule B: Option Z: Additional conditions of contract

116 Contract Schedule C: Contract Data provided by the Contractor

117 Contract Schedule D: The Service Information

119 Contract Schedule E: The price list

120 Contract Schedule F: Collateral warranty agreements

122 Contract Schedule G: Performance bond

123 Contract Schedule H: Arbitration procedure

124 Contract Schedule I: TUPE and related matters




125 Contract Schedule J: Security provisions

126 Contract Schedule K: Management information

Date ..................................

Deed of Agreement

incorporating the NEC3 Term Service Contract

June 2005 (with amendments June 2006)

Between

.......................................................................................................................................

and

.......................................................................................................................................

for the provision of

.......................................................................................................................................




THIS DEED is made the ............... day of ...................................................... 20..........

BETWEEN

(1) ............................................................................................................................ of ........................................................................................................................ (the “Employer”); and

(2) ............................................................................................................................ (Company Number ...................................... ) of/whose registered address is at ........................................................................................................................ (the “Contractor”).

BACKGROUND

(A) The Lords Commissioners of Her Majesty’s Treasury as represented by Buying Solutions being an Executive Agency of the Office of Government Commerce in Her Majesty’s Treasury without separate legal personality (“the Authority”) selected service providers including the Contractor, to provide Facilities Management.

(B) The Contractor undertook to provide the same on the terms set out in a framework agreement number RM708 dated 28th July 2010 (the Framework Agreement).

(C) The Authority has established a number of framework agreements, including the Framework Agreement, in consultation with and for the benefit of public sector bodies. The Authority has overall responsibility for the management of those framework agreements.

(D) The Authority and the Contractor have agreed that public sector bodies within the UK may enter into contracts with the Contractor in the manner provided for in the Framework Agreement.

(E) The Employer is such a public sector body and has been granted rights by the Authority in accordance with the Contracts (Rights of Third Parties) Act 1999 to enter into a Contract under the Framework Agreement pursuant to an Order served by the Employer on the Contractor. In the Framework Agreement, the Employer is identified as the Customer.

(F) The Employer served an Order for the service on the Contractor dated ..........

(G) The Contractor accepted the Order and hereby duly executes this contract.

IT IS AGREED AS FOLLOWS:

1. Definitions and Interpretation

1.1 “this contract” means this deed of agreement together with the terms and conditions of the NEC3 Term Service Contract June 2005 (with amendments




June 2006), the Contract Data, the Option Z Additional Conditions of Contract and all such information and supplementary provisions as are provided in the Contract Schedules.

1.2 “Contract Schedule” means any one of the contract schedules appended to this agreement.

1.3 Terms for which no interpretation is provided in this contract shall have the meaning ordinarily given to them by the legal profession where appropriate but otherwise shall be interpreted in accordance with their dictionary meaning.

2. Entire Agreement

This contract is the entire agreement between the Parties in relation to the service and supersedes all prior representations, arrangements, understandings, agreements, statements, representations or warranties (whether written or oral) relating thereto.

IN WITNESS WHEREOF the Parties have caused this contract to be executed as a deed by their duly authorised representatives and delivered on the date first above written.

Signed as a Deed for and on behalf of the EMPLOYER

By : .....................................................

Name : .....................................................

Title : Authorised signatory

Date : .....................................................

Signed as a Deed for and on behalf of the CONTRACTOR

By : .....................................................

Name : .....................................................

Title : Company Secretary / Director

Date : .....................................................

Signed as a Deed for and on behalf of the CONTRACTOR




By : .....................................................

Name : .....................................................

Title : Company Secretary / Director

Date : .....................................................




CONTRACT SCHEDULE A

CONTRACT DATA PART ONE – DATA PROVIDED BY THE EMPLOYER




CONTRACT DATA Part one – Data provided by the Employer

Statements given in all contracts

1 General The conditions of contract are the core clauses of the NEC3 Term Service Contract June 2005 (with amendments June 2006) together with:-

main Option ............A............................ Insert A, C or E

dispute resolution Option W2.................... Insert W1 or W2

Note: Insert W1 unless the Housing Grants, Construction and Regeneration Act 1996 applies, in which case insert W2. If nothing is inserted, W2 shall apply.

secondary Options :

X1 Price adjustment for inflation Options A or C only. Delete if not required. If using, complete Optional Statement

X19 Task Order Delete unless specifically required

X20 Key Performance Indicators

Delete unless specifically required. Always delete if using Options X12 and/or X17

Y(UK)2 The Housing Grants, Construction and Regeneration Act 1996

Delete if service does NOT involve construction work

Option Z: Additional conditions of contract: (delete below any that are not required)

SECTION 1 Recommended for all contracts

Z2 Waiver

Z3 Retention of documents

Z4 Freedom of information

Z5 Notices

Z6 Examination of documents

Z7 Liaison Meetings

Z8 Fair payment charter




Z9 Conditions affecting the provision of the service

Z10 Persons dealing with this contract

Z11 Disputes with Others

Z12 Conflicts of interest

Z13 Assignment

Z14 Novation

Z15 Confidentiality

Z16 Official secrets

Z17 Evidence of standards

Z18 Suspension for non-payment

Z19 Insurance

Z20 Professional indemnity insurance

Z21 Public liability insurance

Z22 Termination Events

Z23 Security concern

Z24 Corrupt gifts and payment of commission

Z25 Unincorporated joint venture

Z26 Termination of part of the service

Z27 Option W3 Negotiation

Z28 Option W4 Mediation

SECTION 2 Recommended for appropriate contracts only

Z29 Responsibility for work by Others

Z30 Contractor’s obligation to ensure

Z31 Direct appointment of Others

Z32 Approval of Subcontractors




Z33 Environmental requirements

Z34 Access to property

Z35 Presentations

Z36 Tender documents and contracts

Z37 Collateral warranty agreements

Z38 Recovery of VAT

Z39 Recovery of other sums

Z40 Performance bond

Z41 The Housing Grants, Construction and Regeneration Act 1996

Z42 Timber and wood-derived products

SECTION 3 Recommended for limited use only

Z43 Contract Standard

Z44 Contractor’s records

Z45 Copyright

Z46 Security measures

Z47 Access to MOD Sites

Z48 Criminal Records Bureau

Z49 The Transfer of Undertakings (Protection of Employment) Regulations 2006

Z50 Employer’s Property

Z51 Security provisions

Z52 Small and Medium Sized Enterprises (SMEs)

Z53 Apprenticeships

Z54 Management information

SECTION 4 Further Z clauses required by the Employer




Z55 Insert further clause if required

Z56 Insert further clause if required




The Employer is:

Name...Coal Authority.

Address 200 Lichfield Lane, Mansfield..

The Service Manager is:

Name ..Shirley Hurst -Cox.

Address ........................................................................................

The Adjudicator is:

Name ............................................................................................

Address ........................................................................................

The Affected Property is:

......Coal Authority.. ...................................................................................................... (see NEC clause 11.2(2), 15.1, 20.2 and 31.1)

The service is identified in the Service Information.

The Service Information is in Contract Schedule D.

The language of this contract is English.

The law of the contract is the law of .....England..

The period for reply is 2. weeks (see NEC clause 13.3).

The period for retention is ......................... years following the end of the service period or earlier termination (see the Guidance Notes).

The Adjudicator nominating body is ..NEC... (see the Guidance Notes)

The tribunal is litigation unless both Parties agree to refer a dispute to arbitration in accordance with Contract Schedule H.

The following matters will be included in the Risk Register (see the Guidance Notes):

.......................................................................................................




.......................................................................................................

.......................................................................................................

The period of notice on termination (for a reason other than R1 - R21) is .......................................................................................... (If left blank, the period of notice on termination for a reason other than R1 - R21 will be a

minimum of 90 days)

3 Time The starting date is ................................................. (see NEC clause 30.1)

The service period is ............................................... (see NEC clause 30.1) (The service period must not exceed 7 years including all extensions)

5 Payment The assessment interval is ..calender monthly..

The currency of this contract is GBP (pounds sterling)

The interest rate is 2 % per annum (not less than 2) above the base rate of the Bank of England.

8 Risks and insurance

The minimum amount of cover for insurance against loss of or damage caused by the Contractor to the Employer’s property is .Five Million GBP (pounds sterling)

The minimum amount of cover for insurance in respect of loss of or damage to property (except the Employer’s property, Plant and materials and Equipment) and liability for bodily injury to or death of a person (not an employee of the Contractor) arising from or in connection with the Contractor’s Providing the Service for any one event is ........................................................... GBP (pounds sterling)

The minimum limit of indemnity for insurance in respect of death of or bodily injury to employees of the Contractor arising out of and in the course of their employment in connection with this contract for any one event is ............................................. GBP (pounds sterling)

Optional statements

If Option A is used

The Contractor prepares forecasts of the final total of the Prices for the whole of the service at intervals no longer than 12. weeks.

If Option X1 is used




The proportions used to calculate the Price Adjustment Factor are

A maximum percentage increase is set within the Framework Agreement for each contractor.

If Option X19 is used

The Contractor submits a Task Order programme to the Service Manager within 5 days of receiving the Task Order.

If Option X20 is used (but not if Option X12 is also used)

The incentive schedule for Key Performance Indicators is in TBA .......

A report of performance against each Key Performance Indicator is provided at intervals of one month.

If Option Z is used

The additional conditions of contract are contained in Contract Schedule B.

If Option Z52 is used

The SME Percentage is .25% %




CONTRACT SCHEDULE B

OPTION Z – ADDITIONAL CONDITIONS OF CONTRACT

Option Z: Additional conditions of contract

The following provisions supplement, modify or replace the normal published provisions of the NEC3 Term Service Contract (the “NEC3 TSC”).

Each Option Z provision will apply unless deleted below or in the list of Option Z provisions which appears in “CONTRACT DATA Part One – Data provided by the Employer, 1 General, Option Z: Additional conditions of contract”.

SECTION 1 : RECOMMENDED FOR ALL CONTRACTS

Option Z 2 Waiver

Supplement to NEC3 TSC clause 12

12.5 The failure of either of the Parties to exercise any right or remedy does not constitute a waiver of that right or remedy.

12.6 No waiver has effect unless it has been agreed, confirmed in writing and signed by the Parties and no such waiver as arises from a breach of contract constitutes a waiver of any other breach of contract.

Option Z 3 Retention of documents


13.9 The Contractor retains throughout the period for retention copies of drawings, specifications, reports and other documents which record the service. The copies are retained in the form stated in the Service Information.

Option Z 4 Freedom of information


13.10 The Contractor acknowledges that unless the Service Manager has notified the Contractor that the Employer is exempt from the provisions of the FOIA, the Employer is subject to the requirements of the Code of Practice on Government Information, FOIA and the Environmental Information Regulations. The Contractor cooperates with and assists the Employer so as to enable the Employer to comply with its information disclosure obligations.




13.11 In this clause:

13.11.1 “Environmental Information Regulations” means the Environmental Information Regulations 2004 and any guidance and/or codes of practice issued by the information Commissioner in relation to such regulations;

13.11.2 “FOIA” means the Freedom of Information Act 2000 and any subordinate legislation made under this Act from time to time together with any guidance and/or codes of practice issued by the Information Commissioner in relation to such legislation;

13.11.3 “Information” has the meaning given under section 84 of the Freedom of Information Act 2000; and

13.11.4 “Request for Information” means a request for information or an apparent request under the Code of Practice on Access to government Information, FOIA or the Environmental Information Regulations.

13.12 The Contractor:

13.12.1 transfers to the Service Manager all Requests for Information that it receives as soon as practicable and in any event within two working days of receiving a Request for Information;

13.12.2 provides the Service Manager with a copy of all Information in its possession, or power in the form that the Service Manager requires within five working days (or such other period as the Service Manager may specify) of the Service Manager’s request; and

13.12.3 provides all necessary assistance as reasonably requested by the Service Manager to enable the Employer to respond to the Request for Information within the time for compliance set out in section 10 of the FOIA or regulation 5 of the Environmental Information Regulations

and procures that its Subcontractors do likewise.

13.13 The Employer is responsible for determining in its absolute discretion whether any information is exempt from disclosure in accordance with the provisions of the Code of Practice on Government Information, FOIA or the Environmental Information Regulations.

13.14 The Contractor does not respond directly to a Request for Information unless authorised to do so by the Service Manager.




13.15 The Contractor acknowledges that the Employer may, acting in accordance with the Department of Constitutional Affairs’ Code of Practice on the Discharge of the Functions of Public Authorities under Part 1 of the Freedom of information Act 2000, be obliged to disclose Information without consulting or obtaining consent from the Contractor or despite the Contractor having expressed negative views when consulted.

13.16 The Contractor ensures that all Information is retained for disclosure throughout the period for retention and permits the Service Manager to inspect such records as and when reasonably requested from time to time.

Option Z 5 Notices


13.17 All communications between the Contractor and the Service Manager required by or authorised under this contract must comply with NEC3 TSC clause 13 but are deemed to be duly given or made:

13.17.1 two working days after being sent by prepaid special delivery post; or

13.17.2 when delivered by hand if a signature acknowledging its receipt has been obtained; or

13.17.3 when received by facsimile if the relevant fax delivery confirmation is obtained.

13.18 In each case the notice must:-

13.18.1 refer to this contract, and

13.18.2 be marked for the attention of the appropriate officer, person or department as notified to the other party in writing.

13.19 Each Party notifies the other in writing within five working days of any change in its address for service.

13.20 Any notice served on a non working day or outside of normal working hours is deemed to be served on the following working day.




13.21 For the avoidance of doubt, electronic mail does not constitute a valid form of notice for the purpose of this contract unless specifically agreed between the Parties in writing for an express purpose set out in such agreement.

Option Z 6 Examination of documents


14.5 The Service Manager may at any reasonable time examine schedules, calculations, surveys, reports, specifications, drawings and/or any other documents and information which are in the possession of the Contractor and which concern this contract, but no such examination relieves the Contractor of any responsibility for the service to be provided under this contract.

Option Z 7 Liaison Meetings


16.5 In addition to any risk reduction meetings convened under clause 16.2 of the contract, the Contractor attends regular meetings (“Liaison Meetings”) with the Service Manager to assess the performance of the service and to facilitate due and satisfactory performance in accordance with the contract. The Service Manager arranges for an initial Liaison Meeting to be held within one month of the starting date and thereafter at monthly intervals.

16.6 The Contractor submits to the Service Manager no later than five days before each Liaison Meeting a written report which:

16.6.1 describes the performance of the service by reference to the contract and relevant instructions;

16.6.2 specifies all outstanding requests by the Contractor for information or instructions; and

16.6.3 explains any new circumstances arising since any previous meeting which in the opinion of the Contractor have affected the performance of the service adversely or beneficially.

16.7 The Service Manager issues to the Contractor no later than seven days after each Liaison Meeting a written record of the Liaison Meeting and where practicable a response to any requests by the Contractor for information or instructions.




Option Z 8 Fair payment charter

Additional clause 19

19.1 The Contractor delivers to the Service Manager a signed copy of the current version of the Model Fair Payment Charter published by the OGC within ten working days of the Service Manager providing to the Contractor a copy suitable for execution.

19.2 It is a condition of the Service Manager’s approval of any Subcontractor that the Contractor shall deliver to the Service Manager a signed copy of the current version of the Model Fair Payment Charter published by the OGC within ten working days of the Service Manager providing to the Contractor a copy suitable for execution, or within twenty-eight days of the Service Manager’s approval of the relevant Subcontractor (whichever is the latest). If this condition is not fulfilled, the Service Manager’s approval of the relevant Subcontractor is null and void, and the Contractor ceases to employ that Subcontractor.

Option Z 9 Conditions affecting the provision of the service


20.6 The Contractor satisfies himself as regards the nature and extent of the service and conditions of or affecting the Affected Property, means of communication, the supply of and conditions affecting labour, the suitability, nature and extent of the Affected Property and the Equipment required for the service.

20.7 No failure by the Contractor to satisfy himself as envisaged by NEC3 TSC clause 20.6 nor failure to foresee any matter affecting the provision of the service, nor inaccuracy in any document or other information provided by the Employer or Others (unless that information is part of the Service Information) is a Compensation Event.

Option Z 10 Persons dealing with this contract


24.3 The Contractor appoints a partner or director of the Contractor, to be the Contract Manager and to be duly authorised to receive instructions and to be the point of contact between the Contractor and the Service Manager throughout the course of this contract and, subject to reasonable notice, on behalf of the Contractor to attend all meetings with the Service Manager regarding this contract and to approve and sign all reports submitted to the Service Manager by the Contractor. No change in this named individual is made without the prior written approval of the Service Manager.




Option Z 11 Disputes with Others


25.3 If any difference arises between the Contractor and Others, the Contractor uses its best endeavours to achieve a reconciliation. If the reconciliation is not achieved and is not likely to be achieved before such difference becomes detrimental to the delivery of the service, the Contractor refers the matter or difference to the Service Manager for instructions.

Option Z 12 Conflicts of interest


27.5 The Contractor discloses to the Service Manager any actual or potential conflict of interest arising from the Contractor’s provision of the service as soon as practicable after becoming aware of such actual or potential conflict.

27.6 The Contractor immediately notifies the Service Manager of any circumstances giving rise to or potentially giving rise to conflicts of interest relating to the Contractor and/or the Employer (including without limitation its reputation and standing) of which it is aware or anticipates may justify the Employer taking action to protect its interests.

27.7 If the Parties are unable to either remove the conflict of interest and/or to reduce its damaging effect to a reasonably acceptable level the Employer has the right to terminate this contract whereupon the provisions of NEC3 TSC clause 90.2 apply to the termination as though the termination had been in respect of reason R11.

Option Z 13 Assignment


27.8 The Contractor does not, without the written consent of the Service Manager, assign or transfer this contract, or any part of, share of or interest in it. In the absence of the Service Manager’s written consent no sum of money becoming due under this contract is payable to any person other than the Contractor.

27.9 In this clause “Contracting Authority” means a contracting authority as defined in the current Public Contracts Regulations or relevant succeeding rules.




27.10 The Employer is entitled to:

27.10.1 assign or otherwise dispose of its rights under this contract or any part thereof to any Contracting Authority, or

27.10.2 assign or otherwise dispose of its rights under this contract or any part thereof to any other body (including any private sector body) which substantially performs any of the functions that previously had been performed by the Employer

provided always that where such assignment or other disposal increases the burden of the Contractor’s obligations pursuant to this contract, the Contractor is entitled to such additional payment as may be reasonable to compensate for such additional burden.

Option Z 14 Novation


27.11 In this clause “Contracting Authority” means a contracting authority as defined in the current Public Contracts Regulations or relevant succeeding rules.

27.12 The Employer is entitled, without the need to obtain the Contractor’s consent, to:

27.12.1 novate this contract or any part thereof to any Contracting Authority; or

27.12.2 novate its rights and obligations under this contract to any other body (including any private sector body) which substantially performs any of the functions that previously had been performed by the Employer;

upon such terms as the Employer proposes, provided that where such novation increases the burden of the Contractor’s obligations pursuant to this contract, the Contractor is entitled to such additional payment as may be reasonable to compensate for such additional burden.

27.13 Any change in the legal status of the Employer such that it ceases to be a Contracting Authority does not affect the validity of this contract. In such circumstances, this contract binds and inures to the benefit of any successor body to the Employer.




27.14 If this contract is novated to a body which is not a Contracting Authority or if a successor body which is not a Contracting Authority becomes the Employer (both such bodies being referred to in the remainder of this clause as the “transferee”) the transferee is only able to assign, novate or otherwise dispose of its rights and obligations under this contract or any part thereof with the written consent of the Contractor.

Option Z 15 Confidentiality


27.15 The Contractor ensures that neither he nor his employees do, without the written consent of the Service Manager, make use of, or disclose to any other person (other than in accordance with the provision of the service or as may be required by law) any documents or information provided by the Employer or Service Manager pursuant to this contract, or which may come into the possession or knowledge of the Contractor or of any of his employees by virtue of this contract. All of the above information is confidential to the Employer, and the Contractor and his employees are bound by this clause during the period of this contract and at all times thereafter.

27.16 The Contractor indemnifies and keeps indemnified the Employer against all actions, demands, proceedings, damages, costs, charges and expenses whatsoever in respect of any breach by the Contractor of this clause. Such indemnity is without prejudice to any other rights of the Employer.

27.17 The Contractor maintains as confidential at all times and does not divulge by any means of communication (whether oral, written, digital or by some other means) any information supplied by the Employer or Service Manager or produced for the Employer or Service Manager by the Contractor in accordance with this contract.

27.18 The Contractor does not without the consent of the Service Manager publish, discuss or issue alone or in conjunction with any other person any articles, press releases, or other information relating to the provision of the service.

27.19 The provisions of this clause survive indefinitely following the expiry of this contract.

Option Z 16 Official secrets





27.20 The Contractor takes all reasonable steps to ensure that all persons employed by the Contractor or Subcontractors in connection with this contract are aware:

27.20.1 of the provisions of the Official Secrets Act 1989, and

27.20.2 of the provisions of the Atomic Energy Act 1946 (where appropriate) and

27.20.3 that these Acts apply to them both throughout the duration and after the expiry or termination of this contract.

Option Z 17 Evidence of standards


44.1 Upon reasonable request from the Service Manager, the Contractor provides the Service Manager with evidence that materials, workmanship and processes used or intended to be used in performing the service comply with the standards required by the contract.

Option Z 18 Suspension for non-payment


51.5 Without prejudice to any other right or remedy of the Contractor, where a sum due under this contract is not paid in full by the final date for payment and no effective notice to withhold payment has been given in accordance with NEC3 TSC clause Y2.3 and such failure continues for 7 days after the Contractor has given to the Service Manager written notice of his intention to suspend the performance of his obligations under this contract and stating the ground or grounds on which it is intended to suspend performance, the Contractor may suspend performance of the service until full payment is made.

51.6 If the Contractor exercises his right to suspend performance in accordance with this clause it is dealt with as a compensation event in accordance with clause 6 of the NEC3 TSC.

Option Z 19 Insurance





83.3 All insurances required to be effected or maintained by the insuring party under NEC3 TSC clause 83 are placed with reputable insurers, to whom the other party has no reasonable objection, lawfully carrying on such insurance business in the United Kingdom, and upon customary and usual terms prevailing for the time being in the insurance market. The said terms and conditions do not include any term or condition to the effect that any insured must discharge any liability before being entitled to recover from the insurers, or any other term or condition which might adversely affect the rights of any person to recover from the insurers pursuant to the Third Parties (Rights Against Insurers) Act 1930 or the Third Parties (Rights Against Insurers) Act (Northern Ireland) 1930 as amended by the Insolvency (Northern Ireland) Order 1989.

83.4 If, without the approval of the Service Manager, the Contractor fails to effect and maintain any insurance that it is required to effect and maintain under NEC3 TSC clause 83 or obtains a different policy of insurance or fails to provide a copy of insurances or certificates when required to do so, the Employer may, but is not required to, effect and maintain appropriate insurance cover and deduct the cost of doing so from any payment due to the Contractor under this contract, or recover such sum from the Contractor as a debt.

83.5 For the avoidance of doubt, it is agreed that nothing in this clause relieves the Contractor from any of its obligations and liabilities under this contract.

Option Z 20 Professional indemnity insurance





83.6 If required to obtain professional indemnity insurance providing cover against a failure of the Contractor to use the skill and care normally used by professional designers providing services similar to the service, the Contractor obtains and maintains the professional indemnity insurance upon customary and usual terms and conditions prevailing for the time being in the insurance market, and with reputable insurers lawfully carrying on such insurance business in the United Kingdom on the basis and in an amount not less than that stated in the Contract Data, provided always that such insurance is available at commercially reasonable rates. The said terms and conditions do not include any term or condition to the effect that the Contractor must discharge any liability before being entitled to recover from the insurers, or any other term or condition which might adversely affect the rights of any person to recover from the insurers pursuant to the Third Parties (Rights Against Insurers) Act 1930 or the Third Parties (Rights Against Insurers) Act (Northern Ireland) 1930 as amended by the Insolvency (Northern Ireland) Order 1989.

83.7 The Contractor does not without the prior written approval of the Service Manager settle or compromise with the insurers any claim which the Contractor may have against the insurers and which relates to a claim by the Employer against the Contractor, nor by any act or omission lose or prejudice the Contractor’s right to make or proceed with such a claim against the insurers.

83.8 The Contractor immediately informs the Service Manager if the professional indemnity insurance ceases to be available at rates and on terms that the Contractor considers to be commercially reasonable. Any increased or additional premium required by insurers by reason of the Contractor’s own claims record or other acts, omissions, matters or things particular to the Contractor is deemed to be within commercially reasonable rates.




83.9 The Contractor co-operates fully with any measures reasonably required by the Service Manager including (without limitation) completing any proposals for insurance and associated documents, maintaining such insurance at rates above commercially reasonable rates if the Employer undertakes in writing to reimburse the Contractor in respect of the net cost of such insurance to the Contractor above commercially reasonable rates or, if the Employer effects such insurance at rates at or above commercially reasonable rates, reimbursing the Employer in respect of what the net cost of such insurance to the Employer would have been at commercially reasonable rates.

83.10 The above obligation in respect of professional indemnity insurance continues notwithstanding termination of the Contractor’s employment under this contract for any reason whatsoever, including (without limitation) breach by the Employer.

Option Z 21 Public liability insurance


83.11 The public liability insurance required by NEC3 TSC clause 83 to be provided is in the joint names of the Employer and such other person as the Service Manager may reasonably require including, without limitation, the Employer’s consultants and contractors, the Contractor and all Subcontractors.

Option Z 22 Termination Events





91.8 The Employer may at any time by notice in writing to the Service Manager terminate the Contractor’s obligation to Provide the Service if any of the events specified below (the “Termination Events”) occur, namely, if the Contractor:

91.8.1 is convicted or has been convicted of a criminal offence relating to the conduct of its business or profession; or

91.8.2 commits or is found to have committed an act of grave misconduct in the course of its business or profession; or

91.8.3 fails or has failed to comply with any obligations relating to the payment of any taxes or social security contributions; or

91.8.4 has made any serious misrepresentations in the tendering process for any project or matter in which the public sector has or had a significant participation; or

91.8.5 fails to obtain any necessary licences or to obtain or maintain membership of any relevant body; or

91.8.6 demerges into two or more firms, merges with another firm, incorporates or otherwise changes its legal form or there is a change of control as defined by section 416 of the Income and Corporation taxes Act 1988 (any such case being a “Change of Control”) and, in any such Change of Control, there are reasonable grounds for the Employer to withhold its consent relating to the financial standing of the new entity through which it is proposed that the service will be delivered or there are security concerns arising from the provision of the service by the new entity;

whereupon the Service Manager promptly issues a termination certificate to both Parties and the provisions of NEC3 TSC clause 90.2 apply to the termination as though the termination had been in respect of reason R11.

91.9 The Contractor promptly notifies the Service Manager in writing on each occasion of the occurrence of any Change of Control. The Employer is permitted to exercise its rights pursuant to this clause for only six months after service of each and any notice by the Contractor pursuant to this clause and is not permitted to exercise such rights where the Employer has agreed in advance in writing to the particular Change of Control provided such Change of Control takes place as agreed.

Option Z 23 Security concern





91.10 The Employer may by notice in writing to the Service Manager terminate the Contractor’s obligation to Provide the Service if the Employer has any reasonable security concern in respect of the Contractor, whereupon the Service Manager promptly issues a termination certificate to both Parties and the provisions of NEC3 TSC clause 90.2 apply to the termination as though the termination had been in respect of reason R11.

Option Z 24 Corrupt gifts and payment of commission





91.11 The Employer may by notice in writing to the Service Manager terminate the Contractor’s obligation to Provide the Service if the Contractor or anyone employed by him:

91.11.1 offers to give or agrees to give any person any gift or consideration of any kind as an inducement or reward for doing, forbearing to do, or for having done or forborne to do any act in relation to the obtaining or execution of this contract or any other contract for the Employer or Her Majesty’s Service or for showing favour or disfavour to any person in relation to this or any other contract for the Employer or Her Majesty’s Services; or

91.11.2 enters into this contract or any other contract with the Employer or with a person or body employed by the Employer or acting on its behalf or with Her Majesty’s Service in connection with which commission has been paid or agreed to be paid by him or on his behalf, or to his knowledge, unless before this contract is made particulars of any such commission and of the terms and conditions of any agreement for the payment thereof have been disclosed in writing to the Employer; or

91.11.3 commits an offence under the Prevention of Corruption Acts 1889 to 1916 in relation to this contract or any other contract with the Employer or Her Majesty’s Service

whereupon the Service Manager promptly issues a termination certificate to both Parties and the provisions of NEC3 TSC clause 90.2 apply to the termination as though the termination had been in respect of reason R11.

91.12 If the Employer terminates under clause 91.11 (Corrupt gifts and payment of commission, in addition the Employer recovers from the Contractor the amount or value of any such gift, consideration or commission.

Option Z 25 Unincorporated joint venture





91.13 The Employer may by notice in writing to the Service Manager terminate the Contractor’s obligation to Provide the Service if the Contractor is an unincorporated joint venture and any of the events entitling the Service Manager to terminate occur in relation to any member of that unincorporated joint venture, whereupon the Service Manager promptly issues a termination certificate to both Parties and the provisions of NEC3 TSC clause 90.2 apply to the termination as though the termination had been in respect of reason R11.

Option Z 26 Termination of part of the service


91.14 The Employer may terminate a part only of the service if it is practicable for the Contractor to continue to provide separately the remaining part or parts of the service. In that event:

91.14.1 with regard to the part of the service terminated, the procedures followed and the amounts due on termination are in accordance with the Termination Table;

91.14.2 the provisions of NEC3 TSC clause 9 which would have been applicable if the service had been terminated in its entirety are applicable to the part of the service terminated; and

91.14.3 all other provisions of NEC3 TSC continue to apply to the part or parts of the service which are not terminated.

Option Z 27 Option W3 Negotiation

Additional NEC3 TSC option W3

W3.1 Without prejudice to either party’s right to refer a dispute to the Adjudicator at any time, any dispute or difference between the Parties arising out of or relating to this contract is referred by either Party initially to representatives of the Employer and Contractor for negotiation and resolution.

W3.2 If any dispute is not resolved within ten working days after it has been referred to the Parties’ representatives (or such longer period as the Parties may agree), it is referred to an authorised senior officer of the Employer and an authorised senior officer of the Contractor for negotiation and resolution.

W3.3 If any dispute cannot be resolved within ten working days after it has been referred to the authorised senior officers of the Employer and Contractor (or such longer period as the Parties may agree) either Party may decline to continue to participate in the negotiation.




Option Z 28 Option W4 Mediation

Additional NEC3 TSC option W4

W4.1 Without prejudice to either Party’s right to refer a dispute to the Adjudicator at any time, any dispute or difference between the Parties arising out of or relating to this contract and which has not be resolved by negotiation is referred to mediation in accordance with the provisions of this clause.

W4.2 The procedure and associated provisions for mediation pursuant to this clause are as follows:

W4.2.1 a neutral adviser or mediator (‘the Mediator’) is chosen by agreement between the Employer and the Contractor or, if they are unable to agree upon the identity of the Mediator within ten working days after a request by one party to the other, or if the Mediator agreed upon is unable or unwilling to act, either Party may within ten working days from the date of the proposal to appoint a Mediator or within ten working days of notice to either party that he is unable or unwilling to act, apply to the Centre for Effective Dispute Resolution (“CEDR”) to appoint a Mediator;

W4.2.2 the Parties meet with the Mediator within ten working days of his appointment in order to agree the programme for exchange of all relevant information and the procedure under which negotiations will be held. The Parties may at any stage seek guidance from CEDR regarding a suitable procedure.

W4.3 Unless otherwise agreed by the Parties, all negotiations connected with the dispute and any settlement agreement relating to it are confidential and without prejudice to the rights of the Parties in any future proceedings.

W4.4 In the event that the Parties reach agreement on the resolution of the dispute, the agreement is reduced to writing and is binding on both Parties once it is signed by a duly authorised senior officer of the Employer and a duly authorised senior officer of the Contractor.

W4.5 Failing agreement, the Employer or Contractor may agree to invite the Mediator to provide a non-binding but informative opinion in writing. No such invitation is made without the written consent of both Parties. If it is agreed that such an invitation is to be made, the opinion is provided on a without prejudice basis and is not used in evidence in any proceedings relating to this contract without the written consent of both Parties.




W4.6 The Employer and the Contractor each bears their own costs in relation to any reference made to the Mediator and the fees and all other costs of the Mediator are borne jointly in equal proportions by both Parties unless otherwise directed by the Mediator.

W4.7 In the event that the Employer and the Contractor fail to reach agreement within forty working days after the Mediator’s appointment, or such longer period as may be agreed, the dispute may be referred to the tribunal.

SECTION 2 : RECOMMENDED FOR APPROPRIATE CONTRACTS ONLY

Option Z 29 Responsibility for work by Others


17.2 Where the Contractor is required to incorporate work provided by Others, the Contractor’s responsibility in respect of such work is limited to reviewing it to the extent required to ensure the satisfactory performance of the service.

17.3 Notwithstanding NEC3 TSC clause 17.1, if the Contractor finds any discrepancy in or divergence between any documents and/or information, including any found in documents and/or information provided by Others, the Contractor immediately notifies the Service Manager of the discrepancy or divergence.

Option Z 30 Contractor’s obligation to ensure


25.4 Where in this contract the Contractor is under an obligation to ensure that events occur which are under the direct control of Others and, due to Others, the Contractor is unable to comply with that obligation, the Contractor is liable to the Employer only in the event that the Contractor has failed to use reasonable endeavours to ensure the occurrence of the event.

25.5 The Contractor does not warrant the work of Others but the Contractor is nevertheless required to inform the Service Manager in writing of the action taken by the Contractor in seeking to ensure that the event occurred and recommend to the Service Manager a further course or courses of action to ensure the occurrence of the event.

Option Z 31 Direct appointment of Others





25.6 Where Others are appointed by the Employer, the Contractor co-operates fully with those Others in order to ensure that production of the Contractor’s drawings, design information or other relevant documents or information is fully co-ordinated with the work of the Others.

Option Z 32 Approval of Subcontractors


26.5 The Contractor may, upon prior written notice to the Service Manager, sub-contract work to any of the approved Subcontractors listed in the Schedule of subcontractors appended to the Framework Agreement provided the Subcontractor satisfies the requirements of this clause.

26.6 Reasons for not accepting a Subcontractor may include:

26.6.1 the Contractor failing to submit for the approval of the Service Manager, a Certificate of Professional Indemnity Insurance (if the relevant Subcontractor is required to have Professional Indemnity Insurance) and a Certificate of Employer’s and Public Liability Insurance, all duly completed on behalf of each of the proposed Subcontractors, or

26.6.2 the Subcontractor not agreeing to enter into the collateral warranty agreements in the form specified in this contract or in such other form as the Service Manager may agree.

26.7 It is a condition of the Service Manager’s approval of the Subcontractor that the Contractor delivers to the Service Manager all collateral warranty agreements required from the Subcontractor, duly executed, within twenty-eight days of the Service Manager’s approval of the relevant Subcontractor. If this condition is not fulfilled, the Service Manager’s approval of the relevant Subcontractor is null and void and the Contractor ceases to employ that Subcontractor.

Option Z 33 Environmental requirements


27.21 The Contractor complies with all applicable environmental laws and regulations in force from time to time in relation to the service and promptly provides evidence of compliance when reasonably requested by the Service Manager.

27.22 The Contractor satisfies all reasonable requests by the Service Manager for information regarding the environmental impact of the service.




Option Z 34 Access to property


27.23 If in the course of providing the service the Contractor is required to enter any premises not owned or occupied by the Contractor, the Contractor complies with the requirements of the Service Manager and with the occupier’s rules and regulations regarding admission and only visits the premises at times acceptable to the Service Manager and/or the occupier.

27.24 The Contractor complies with any changes to the above requirements, rules or regulations notified to him as an instruction requiring a change in the Service Information in accordance with NEC3 TSC clause 14.3.

27.25 The names and addresses of all the Contractor’s or Subcontractors’ staff to be employed in connection with this contract and requiring access to such premises are submitted to the Service Manager or the occupier concerned to enable the necessary clearances to be obtained.

Option Z 35 Presentations


27.26 If in the course of providing the service the Contractor is required to report to the Service Manager with recommendations, the Contractor if so requested makes a formal presentation to the Service Manager, without additional charge, of matters relevant to those recommendations.

Option Z 36 Tender documents and contracts


27.27 The Contractor has due regard to all statutory requirements when conducting a procurement exercise and obtains written instructions from the Service Manager regarding the Employer’s procedures for obtaining tenders, the forms of contract to be used and any specification requirements or other matters relevant to the type of work to be addressed by the Contractor.

27.28 In the event that the Contractor is required as part of the service to produce tender documents, the Contractor submits to the Service Manager and to other advisers, if so directed by the Service Manager, drafts of the proposed tender documents and obtains the Service Manager’s approval of the drafts prior to finalising and issuing the finished documents to tenderers.

Option Z 37 Collateral warranty agreements





28.1 The Contractor enters into the collateral warranty agreements in the formats appended in Contract Schedule F and delivers executed copies in duplicate to the Service Manager no later than ten working days after the Service Manager has provided the Contractor with appropriate collateral warranty agreements suitable for execution.

28.2 The Contractor procures from every Subcontractor collateral warranty agreements in the formats appended in Contract Schedule F and delivers executed copies in duplicate to the Service Manager no later than fifteen working days after the Service Manager has provided the Contractor with appropriate collateral warranty agreements suitable for execution.

28.3 If the Contractor fails to deliver the required collateral warranty agreements in the manner and within the time stipulated by this contract, one quarter of the Price for Services Provided to Date is retained in assessments of the amount due until the Contractor has remedied the failure.

Option Z 38 Recovery of VAT


55.1 The Contractor pays to the Employer within 7 days of a written demand by the Service Manager any VAT or amount in respect of VAT incurred by the Employer as a result of the Contractor’s failure to carry out his obligations under this contract where the failure results in the Employer engaging another person to fulfil the Contractor’s obligations and incurring expenditure on which the Employer is unable to recover the VAT from HM Customs & Excise.

55.2 Sub-clause 52.1 does not apply to the extent that the Employer would have been unable to recover VAT even if the Contractor had fulfilled its obligations under this contract.

55.3 Where either party is liable to reimburse or indemnify the other party for costs incurred by that other party, the amount to be paid does not include any VAT charged on such costs, save where the payee is unable to recover such VAT from HM Customs & Excise as input tax.

Option Z 39 Recovery of other sums





56.1 In this Clause:

56.1.1 “Contracting Authority” means a contracting authority as defined in the current Public Contracts Regulations or relevant succeeding rules;

56.1.2 “Private Authority” means a commercial organisation to whom service provision has been outsourced by a Contracting Authority, which assumes the role and responsibilities of the Employer under this contract.

56.2 The Service Manager is permitted to deduct and withhold from any sums otherwise due to the Contractor under this contract any sum of money due from the Contractor to the other parties under any one or more of:

56.2.1 this contract; or

56.2.2 any other agreement between the Contractor and the Employer; or

56.2.3 any other agreement between the Contractor and the Authority; or

56.2.4 (except where the Employer is a Private Authority) any other agreement between the Contractor and another department, office or agency of the Crown,

provided that the terms of such other agreement provide for sums of money due from the Contractor under that agreement to be recovered by way of a deduction from sums of money due to the Contractor under this contract or any other contracts.

Option Z 40 Performance bond

Supplement to NEC3 TSC option X13

X13.2 If the form of the performance bond is not set out in the Service Information, the form of the performance bond is that appended in Contract Schedule G.

Option Z 41 The Housing Grants, Construction and Regeneration Act 1996

Supplement to NEC3 TSC option Y(UK)2

Y2.5 If Option Y(UK)2 is said to apply then notwithstanding that this contract relates to the carrying out of construction operations other than in England or Wales or Scotland, the Act is deemed to apply to this contract.

Option Z 42 Timber and wood-derived products




New clause Requirement for timber

All timber and wood-derived products supplied or used by the Contractor in the performance of the Contract (including all timber and wood-derived products supplied or used by Subcontractors shall comply with the Service Information.

In addition to the requirement of the clause above, all timber and wood-derived products supplied or used by the Contractor in performance of the Contract (including all timber and wood-derived products supplied or used by Subcontractors) shall originate from a forest source where management of the forest has full regard for:

Identification, documentation and respect of legal, customary and traditional tenure and use rights related to the forest;

Mechanisms for resolving grievances and disputes including those relating to tenure and use rights, to forest management practices and to work conditions; and

Safeguarding the basic labour rights and health and safety of forest workers.

The Employer reserves the right at any time during the execution of the Contract and for a period of 6 years from final delivery under the Contract to require the Contractor to produce the evidence required for the Employer’s inspection within 14 days of the Employer’s written request.

The Contractor shall maintain records of all timber and wood-derived products delivered to and accepted by the Employer. Such information shall be made available to the Employer if requested, for a period of 6 years from final delivery under the Contract.




Independent verification

The Employer reserves the right to decide whether the evidence submitted to it demonstrates legality and sustainability, or FLEGT-licence or equivalent, and is adequate to satisfy the Employer that the timber and wood-derived product complies with the Service Information. The Employer reserves the right to decide whether the evidence submitted to it is adequate to satisfy the Employer that the timber and wood-derived products complies with the requirements of the social criteria defined in the bullet points above. In the event that the Employer is not satisfied, the Contractor shall commission and meet the costs of an “independent verification” and resulting report that will (a) verify the forest source of the timber or wood and (b) assess whether the source meets the relevant criteria.

In this clause, “Independent Verification” means that an evaluation is undertaken and reported by an individual or body whose organisation, systems and procedures conform to ‘ISO Guide 65:1996 (EN 45011:1998) General requirements for bodies operating product certification systems’ or equivalent, and who is accredited to audit against forest management standards by a body whose organisation, systems and procedures conform to ‘ISO 17011: 20044 General Requirements for Providing Assessment and Accreditation of Conformity Assessment Bodies’ or equivalent.

Employer’s right to reject timber

The Employer reserves the right to reject any timber and wood-derived products that do not comply with the Service Information. The Employer reserves the right to reject any timber and wood-derived products that do not comply with the requirements of the social criteria defined in the bullet points above. Where the Employer exercises its right to reject any timber and wood-derived products, the Contractor shall supply alternative timber and wood-derived products, which do so comply, at no additional cost to the Employer and without causing delay to the Contract completion period.




SECTION 3 : RECOMMENDED FOR LIMITED USE ONLY

Option Z 43 Contract Standard

Modification of NEC3 TSC clause 20

20.8 In carrying out the service the Contractor’s obligation is to use:

20.8.1 the reasonable skill, care and diligence as would be expected of a competent and appropriately qualified contractor experienced in carrying out services of a similar nature, scope, size and complexity as the service, and

20.8.2 to the extent that the service includes design, the skill, care and diligence in the design service as would be expected of an appropriately qualified and competent professional designer holding himself out as experienced in carrying out design activities of a similar nature, scope, size and complexity to those entailed in the service;

herein referred to as the “Contract Standard”.

Consequential modification of NEC3 TSC Contract Data

Part one

Optional statements

If additional insurances are to be provided

Under the sub-heading “The Contractor provides these additional insurances”, item 1 is deemed to be amended to read:

“1. Professional indemnity insurance providing cover against a failure of the Contractor to use the skill, care and diligence required by the Contract Standard”.

Option Z 44 Contractor’s records





27.29 The Contractor maintains and procures that any Subcontractors maintain for the period for retention detailed records of all time spent on any part of the service assessed on a time charge basis and when requested the Contractor makes those records available to the Service Manager.

Option Z 45 Copyright


27.30 In this contract:

27.30.1 “Intellectual Property Rights” means any and all patents, trade marks, service marks, copyright, moral rights, rights in a design, know-how, Confidential Information and all or any other intellectual or industrial property rights whether or not registered or capable of registration and whether subsisting in the United Kingdom or any other part of the world together with all or any goodwill relating or attached thereto;

27.30.2 “Confidential Information” means any information designated as such by the party disclosing that information; and

27.30.3 “Document” means all designs, drawings, specifications, photographs, plans, surveys, reports, and all other documents and/or information prepared by or on behalf of the Contractor in relation to this contract.




27.31 The copyright and all other Intellectual Property Rights in all Documents prepared by or on behalf of the Contractor in relation to this contract and the work executed from them is the property of and vested in the Employer. The Employer reserves the right to reproduce such Documents or to execute, or to have executed, such work or services in accordance therewith as may be required by the Employer.

27.32 In the event that the Contractor does not own the copyright or any Intellectual Property Right in any Document the Contractor uses all reasonable endeavours to procure the right to grant such rights to the Employer to use any such copyright or Intellectual Property Rights from any third party owner of the copyright or Intellectual Property Rights. In the event that the Contractor is unable to procure the right to grant to the Employer in accordance with the foregoing the Contractor procures that the third party grants a direct licence to the Employer on industry acceptable terms.

27.33 The Contractor waives any moral right to be identified as author of the Documents in accordance with section 77, Copyright Designs and Patents Acts 1988 and any right not to have the Documents subjected to derogatory treatment in accordance with section 8 of that Act as against the Employer or any licensee or assignee of the Employer.

27.34 In the event that any act unauthorised by the Employer infringes a moral right of the Contractor in relation to the Documents the Contractor undertakes, if the Employer so requests and at the Employer’s expense, to institute proceedings for infringement of the moral rights.

27.35 The Contractor warrants to the Employer that he has not granted and shall not (unless authorised by the Employer) grant any rights to any third party to use or otherwise exploit the Documents.

27.36 The Contractor warrants that the use of the Documents for the purposes of this contract will not infringe the rights of any third party.

27.37 The Contractor supplies copies of the Documents to the Service Manager and to the Employer’s other contractors and consultants for no additional fee to the extent necessary to enable them to discharge their respective functions in relation to this contract or related works.




27.38 After the termination or conclusion of the Contractor’s employment hereunder, the Contractor supplies the Service Manager with copies and/or computer discs of such of the Documents as the Service Manager may from time to time request and the Employer pays the Contractor’s reasonable costs for producing such copies or discs.

27.39 Priced documents prepared by the Contractor may be used by the Employer for the purposes of indexing and analysis without prior approval by the Contractor and the Contractor shall ensure that a similar clause is inserted in all agreements with its Subcontractors.

Option Z 46 Security measures






29.1.1 “secret matter” means any matter connected with or arising out of the performance of this contract which by a notice in writing given by the Service Manager to the Contractor is designated ‘top secret’, ‘secret’, or ‘confidential’;

29.1.2 “document” includes specifications, plans, drawings, photographs and books;

29.1.3 references to a person employed by the Contractor is construed as references to any person employed or engaged by the Contractor to do anything in connection with this contract, whether under a contract of service with the Contractor or under any other contract or arrangement whatsoever; and

29.1.4 “servant” where the Contractor is a body corporate includes a director of that body and any person occupying in relation to that body the position of director by whatever name called.

29.2 The Contractor does not, either before or after the completion or termination of this contract, do or permit to be done anything which it knows or ought reasonably to know may result in information about a secret matter being:

29.2.1 without the prior consent in writing of the Service Manager, disclosed to or acquired by a person who is an alien or who is a British subject by virtue only of a certificate of naturalisation in which his name was included;

29.2.2 disclosed to or acquired by a person with respect to whom the Service Manager has given to the Contractor a notice in writing which has not been cancelled stating that the Service Manager requires that secret matters shall not be disclosed to that person;

29.2.3 without the prior consent in writing of the Service Manager, disclosed to or acquired by any person who is not a servant of the Contractor; or

29.2.4 disclosed to or acquired by a person who is an employee of the Contractor except in a case where it is necessary for the proper performance of this contract that such person shall have the information.




29.3 Without prejudice to the provisions of clause 29.2, the Contractor, both before and after the completion or termination of this contract, takes all reasonable steps to ensure:

29.3.1 that no such person as is mentioned in clauses 29.2.1, 29.2.2 or 29.2.3 hereof shall have access to any item or document under the control of the Contractor containing information about a secret matter except with the prior consent in writing of the Service Manager;

29.3.2 that no visitor to any premises in which there is any item to be supplied under this contract or where the service is being provided sees or discusses with the Contractor or any person employed by him any secret matter unless the visitor is authorised in writing by the Service Manager so to do;

29.3.3 that no photograph of any item to be supplied under this contract or of any portion of the service is taken except insofar as may be necessary for the proper performance of this contract or with the prior consent in writing of the Service Manager and that no such photograph is, without such consent, published or otherwise circulated;

29.3.4 that all information about any secret matter and every document model or other item which contains or may reveal any such information is at all times strictly safeguarded and that, except insofar as may be necessary for the proper performance of this contract or with the prior consent in writing of the Service Manager, no copies of or extracts from any such document, model or item is made or used and no designation or description which may reveal information about the nature or contents of any such document, model or item is placed, recorded or stored in or on any media; and

29.3.5 that if the Service Manager gives notice in writing to the Contractor at any time requiring the delivery to the Service Manager of any such document, model or item as is mentioned in clause 29.3.4, that document, model or item (including all copies of or extracts therefrom) is forthwith delivered to the Service Manager on behalf of the Employer who is thereafter entitled to retain the same.

29.3.6 The decision of the Service Manager on the question of whether the Contractor has taken or is taking all reasonable steps as required by the foregoing provisions of this clause is final and conclusive.




29.4 If and when directed by the Service Manager, the Contractor furnishes full particulars of all people who are at any time concerned with any secret matter.

29.5 If and when directed by the Service Manager, the Contractor secures that any person employed by it who is specified in the direction, or is one of a class of people who may be so specified, signs a statement confirming that he understands that the Official Secrets Act, 1911 to1989 and, where applicable, the Atomic Energy Act, 1946, applies to the person signing the statement both during the carrying out and after expiry or termination of this contract.

29.6 If at any time either before or after the expiry or termination of this contract it comes to the notice of the Contractor that any person acting without lawful authority is seeking or has sought to obtain information concerning this contract or any thing done or to be done in pursuance thereof, the matter is forthwith reported by the Contractor to the Service Manager and the report is in each case accompanied by a statement of the facts including, if possible, the name, address and occupation of that person, and the Contractor is responsible for making all such arrangements as it may consider appropriate to ensure that if any such occurrence comes to the knowledge of any person employed by it, that person forthwith reports the matter to the Contractor with a statement of the facts as aforesaid.

29.7 The Contractor places every person employed by it, other than any Subcontractor who in its opinion has or will have such knowledge of any secret matter as to appreciate its significance, under a duty to the Contractor to observe the same obligations in relation to that matter as are imposed on the Contractor by clauses 29.2 and 29.3 and, if directed by the Service Manager, places every person who is specified in the direction or is one of a class of people so specified, under the like duty in relation to any secret matter which may be specified in the direction and at all times uses its best endeavours to ensure that every person upon whom obligations are imposed by virtue of this clause 29.7 observes the said obligations, and the Contractor gives such instructions and information to every such person as may be necessary for that purpose, and immediately upon becoming aware of any act or omission which is or would be a breach of the said obligations, reports the facts to the Service Manager with all necessary particulars.




29.8 The Contractor, if directed by the Service Manager, includes in its Subcontractors’ conditions of contract such provisions as the Service Manager considers appropriate for placing the Subcontractors under obligations in relation to secrecy and security corresponding to those placed on the Contractor by this clause 29 but with such variations (if any) as the Service Manager may consider necessary. Furthermore the Contractor:

29.8.1 gives such notices, directions, requirements and decisions to its Subcontractors as may be necessary to bring the provisions relating to secrecy and security which are included in its Subcontractors’ contracts under this clause 29 into operation in such cases and to such extent as the Service Manager may direct;

29.8.2 if there comes to its notice any breach by any of the Subcontractors of the obligations of secrecy and security included in the Subcontractor’s conditions of contract in pursuance of this clause 29, notifies such breach forthwith to the Service Manager; and

29.8.3 if and when so required by the Service Manager, exercises its power to determine the Subcontractor’s employment under the provision in that Subcontractor’s conditions of contract that correspond to clause 29.11

29.9 The Contractor gives the Service Manager such information and particulars as the Service Manager may from time to time require for the purposes of satisfying the Service Manager that the obligations imposed by or under the foregoing provisions of this clause 29 have been and are being observed and as to what the Contractor has done or is doing or proposes to do to secure the observance of those obligations and to prevent any breach thereof, and the Contractor secures that a representative of the Service Manager duly authorised in writing is entitled at reasonable times to enter and inspect any premises in which any thing is being done or is to be done under this contract or in which there is or will be any item to be supplied under this contract, and also to inspect any document or item in any such premises or which is being made or used for the purposes of this contract and that any such representative is given all such information as he may require on the occasion of, or arising out of, any such inspection.

29.10 Nothing in this clause prevents any person from giving any information or doing any thing on any occasion when it is, by virtue of any enactment, the duty of that person to give that information or do that thing.




29.11 If the Employer considers that:

29.11.1 the Contractor has committed a breach of, or failed to comply with any of, the foregoing provisions of this clause 29; or

29.11.2 the Contractor has committed a breach of any obligations in relation to secrecy or security imposed upon it by any other contract with the Employer, or with any department or person acting on behalf of the Crown; or

29.11.3 by reason of an act or omission on the part of the Contractor, or of a person employed by the Contractor, which does not constitute such a breach or failure as is mentioned in clauses 29.11.1 or 29.11.2, information about a secret matter has been or is likely to be acquired by a person who, in the opinion of the Employer ought not to have such information,

and the Employer decides that the interests of the State require the termination of this contract, the Employer may by notice in writing to the Contractor and Service Manager terminate this contract. The Service Manager issues a termination certificate to both parties forthwith.




29.12 If this contract is terminated in accordance with the provisions of clause 29.11:

29.12.1 such termination is without prejudice to any rights of either party which shall have accrued before the date of such termination;

29.12.2 the decision of the Employer to terminate this contract in accordance with the provisions of clause 29.11 is final and conclusive and it is not necessary for any notice of such termination to specify or refer in any way to the event or considerations upon which the Employer’s decision is based;

29.12.3 the Contractor may within five working days of the termination give to the Service Manager notice in writing requesting that the Employer state whether the event upon which the Employer’s decision to terminate is based is an event mentioned in clauses 29.11.1, 29.11.2 or 29.11.3 and to give particulars of that event and, if the Contractor does so request, the Employer must within ten working days of receipt of such a request give notice in writing to the Contractor containing such a statement and particulars as are required by the request;

29.12.4 the Contractor is entitled to be paid for any work or thing done under this contract and accepted but not paid for by the Employer at the date of such termination either at the price which would have been payable under this contract if the contract had not been terminated, or at a reasonable price;

29.12.5 the Employer may decide to take over any work or thing done or made under this contract (whether completed or not) and not accepted at the date of such termination. In this event:

(a) the Service Manager gives notice in writing to the Contractor within thirty days from the date of such termination, electing to take over; and

(b) the Contractor is entitled to be paid for any work or thing so taken over a price which, having regard to the stage which that work or thing has reached and its condition at the time it is taken over, is reasonable; and

(c) the Contractor in accordance with directions given by the Service Manager, delivers any work or thing taken over under this clause 29.12.5 and takes all such other steps as may be reasonably necessary to enable the Employer to have the full benefit of any work or thing taken over; and

29.12.6 save as above, the Contractor is not entitled to any other payment from the Employer.




29.13 If after notice of termination of this contract pursuant to the provisions of clause 29.11:

29.13.1 the Employer does not within ten working days of the receipt of a request from the Contractor respond with the statement and particulars detailed in clause 29.12.3; or

29.13.2 the Employer states in the statement and particulars detailed in clause 29.12.3 that the event upon which the Employer’s decision to terminate this contract was based is an event mentioned in clause 29.11.3

the respective rights and obligations of the Contractor and the Employer terminate in accordance with the following provisions:

29.13.3 the Employer takes over from the Contractor at a fair and reasonable price all unused and undamaged materials, bought-out parts and components and articles in course of manufacture in the possession of the Contractor upon the termination of this contract under the provisions of clause 29.11 and properly provided by or supplied to the Contractor for the performance of this Contract, except such materials, bought-out parts and components and articles in course of manufacture as the Contractor, with the concurrence of the Employer, elects to retain;

29.13.4 the Contractor prepares and delivers to the Service Manager within an agreed period or in default of agreement within such period as the Service Manager specifies, a list of all such unused and undamaged materials, bought-out parts and components and articles in course of manufacture liable to be taken over by or previously belonging to the Employer and delivers such materials and items in accordance with the directions of the Service Manager who pays to the Contractor fair and reasonable handling and delivery charges incurred in complying with such directions;

29.13.5 the Employer indemnifies the Contractor against any commitments, liabilities or expenditure which are reasonably and properly chargeable by the Contractor in connection with this contract to the extent to which the said commitments, liabilities or expenditure would otherwise represent an unavoidable loss by the Contractor by reason of the termination of this contract;

29.13.6 if hardship to the Contractor should arise from the operation of this clause 29.13 it is open to the Contractor to refer the circumstances to the Employer who, on being satisfied that such hardship exists makes such allowance, if any, as in its opinion is reasonable and the decision of the Employer on any




matter arising out of this clause 29.13.6 shall be final and conclusive; and

29.13.7 subject to the operation of clauses 29.13.3, 29.13.4, 29.13.5 and 29.13.6, termination of this contract is without prejudice to any rights of either party that may have accrued before the date of such termination.

Option Z 47 Access to MOD Sites



29.14.1 “Site” includes any of Her Majesty’s Ships or Vessels and Service Stations; and

29.14.2 “Officer in charge” includes Officers Commanding Service Stations, Ships’ Masters or Senior Officers, and Officers superintending Government Establishments.

29.15 The Service Manager issues passes for those representatives of the Contractor who are approved for admission to the Site and a representative is not admitted unless in possession of such a pass. Passes remain the property of the Employer and are surrendered on demand or on completion of the service.

29.16 The Contractor‘s representatives when employed within the boundaries of a Site comply with such rules, regulations and requirements (including those relating to security arrangements) as may be in force for the time being for the conduct of personnel at that Site. When on board ship, compliance is with the Ship’s Regulations as interpreted by the Officer in charge. Details of such rules, regulations and requirements are provided on request by the Officer in charge.




29.17 The Contractor is responsible for the living accommodation and maintenance of its representatives while they are employed at a Site. Sleeping accommodation and messing facilities, if required, may be provided by the Employer wherever possible, at the discretion of the Officer in charge, at a cost fixed in accordance with current Ministry of Defence regulations. At Sites overseas, accommodation and messing facilities, if required, are provided wherever possible. The status accorded to the Contractor ‘s personnel for messing purposes is at the discretion of the Officer in charge who, wherever possible, gives his decision before the commencement of this contract where so asked by the Contractor. When sleeping accommodation and messing facilities are not available, a certificate to this effect may be required by the Service Manager and is obtained by the Contractor from the Officer in charge. Such certificate is presented to the Service Manager with other evidence relating to the costs of this contract.

29.18 Where the Contractor’s representatives are required by this contract to join or visit a Site overseas, transport between the United Kingdom and the place of duty (but excluding transport within the United Kingdom) is provided for them free of charge by the Ministry of Defence whenever possible, normally by Royal Air Force or by MOD chartered aircraft. The Contractor makes such arrangements through the Technical Branch named for this purpose in this Contract. When such transport is not available within a reasonable time, or in circumstances where the Contractor wishes its representatives to accompany material for installation which it is to arrange to be delivered, the Contractor makes its own transport arrangements. The Employer reimburses the Contractor’s reasonable costs for such transport of its representatives on presentation of evidence supporting the use of alternative transport and of the costs involved. Transport of the Contractor’s representatives locally overseas which is necessary for the purpose of this Contract is provided wherever possible by the Ministry of Defence, or by the Officer in charge and, where so provided, is free of charge.




29.19 Out-patient medical treatment given to the Contractor’s representatives by a Service Medical Officer or other Government Medical Officer at a Site overseas is free of charge. Treatment in a Service hospital or medical centre, dental treatment, the provision of dentures or spectacles, conveyance to and from a hospital, medical centre or surgery not within the Site and transportation of the Contractor’s representatives back to the United Kingdom, or elsewhere, for medical reasons, is charged to the Contractor at rates fixed in accordance with current Ministry of Defence regulations.

29.20 Accidents to the Contractor’s representatives which ordinarily require to be reported in accordance with Health and Safety at Work etc Act 1974, are reported to the Officer in charge so that the Inspector of Factories may be informed.

29.21 No assistance from public funds, and no messing facilities, accommodation or transport overseas is provided for dependants or members of the families of the Contractor’s representatives. Medical or necessary dental treatment may, however, be provided for dependants or members of families on repayment at current Ministry of Defence rates.

29.22 The Contractor, wherever possible, arranges for funds to be provided to its representatives overseas through normal banking channels (e.g. by travellers’ cheques). If banking or other suitable facilities are not available, the Employer, upon request by the Contractor and subject to any limitation required by the Contractor, makes arrangements for payments, converted at the prevailing rate of exchange (where applicable), to be made at the Site to which the Contractor’s representatives are attached. All such advances made by the Employer are recovered from the Contractor.

Option Z 48 Criminal Records Bureau





29.23 The Contractor procures that, in respect of all potential staff or persons performing any part of the service (each an “Identified Employee”), before an Identified Employee attends any site or premises at which the service is to be performed:

29.23.1 each Identified Employee is questioned as to whether he or she has any convictions; and

29.23.2 the results are obtained of a check of the most extensive available kind made with the Criminal Records Bureau in respect of each Identified Employee; and

the results of such check are promptly notified in writing to the Authority and Service Manager.

29.24 The Contractor procures that no person to whom the Authority or Service Manager reasonably objects as a consequence of information obtained under this clause is employed to Provide the Service.

Option Z 49 The Transfer of Undertakings (Protection of Employment) Regulations 2006


29.25 The provisions of Contract Schedule I apply *.

* Note: Sections 1 to 3 of Schedule I are recommended for use in all Contracts where TUPE applies. Section 4 of Schedule I should only be used if specifically required.

Option Z 50 Employer’s Property


71.1 If the Contractor is permitted to use equipment, Plant and Materials or other such property belonging to the Employer (the “Employer’s Property”) the following provisions apply.

71.1.1 All Employer’s Property remains the property of the Employer.

71.1.2 The Contractor is responsible for his own costs resulting from any failure of Employer’s Property, unless he can demonstrate that the Employer was responsible for repair and replacement of the Employer’s Property and caused undue delay in its repair or replacement.

71.1.3 The Contractor maintains all items of Employer’s Property in good and serviceable condition and in accordance with the manufacturer’s recommendations.




71.1.4 The Contractor is liable for any loss of or damage to any Employer’s Property save to the extent that the Contractor is able to demonstrate that such loss or damage was caused or contributed to by the negligence or default of the Employer.

71.1.5 The Contractor does not in any circumstances have a lien on any Employer’s Property. The Contractor takes all steps necessary to ensure that the title of the Employer and the exclusion of any lien are brought to the attention of any third party dealing with any Employer’s Property.

Option Z 51 Security provisions




New clauses Contract Schedule J applies in cases where any of the Z51 sections A to F are used.

A - CONTRACTOR PERSONNEL

Staffing Security:

The Contractor shall comply with the Staff Vetting Procedures in respect of all Contractor Personnel employed or engaged in the provision of the service. The Contractor confirms that all Contractor Personnel employed or engaged by the Contractor at the Contract Date were vetted and recruited on a basis that is equivalent to and no less strict than the Staff Vetting Procedures.

The Contractor shall provide training on a continuing basis for all Contractor Personnel employed or engaged in the provision of the service in compliance with the Security Policy and Security Management Plan.

[Note: The clauses below are suggested in line with the guidance set out in PPN 09/08. Employers should consider including these clauses in contracts where technical roles are relevant such as systems administration and telecommunications. These clauses may not be relevant to roles such as commercial programming, analysis or management functions where supervision pending clearance is straightforward. If supervision is available, pre clearance should not be required.]

The Contractor agrees that it will not require that the persons engaged by any Subcontractor obtain Clearance who have not previously held Clearance except where there is an urgent priority requirement including:

- Clearance being genuinely necessary and proportionate; or

- the work must be completed by the relevant person within 30 days (in relation to Defence Vetting Agency Security Checks and Defence Vetting Agency Counter Terrorist Checks ("CTC") and 100 days (in relation to Defence Vetting Agency Developed Vetting of the contract start date; or

- the role of the Subcontractor requires immediate and routine unsupervised access to:

(a) sites or persons at risk of terrorist attack, in which case a CTC can be required; or

(b) assets protectively marked as at least SECRET.

Save in respect of the circumstances set out in the clause outlined above, in the event that it will take longer for the Contractor to carry out the work than to secure Clearance, the




Employer's existing practices for escorting and supervising un-cleared Subcontractors will be followed until such time as the Subcontractor's Clearance is confirmed.

Where the persons engaged by a Subcontractor have previously held Clearance, the Contractor may consider such person's Clearance as current if that person has not worked continuously on jobs where Clearance is required, only where the following conditions are met:

- that person's existing Clearance is not more than three years old in relation to non List X or five years old in relation to List X;

- the Subcontractor has worked on a job where the clearance was required in the past 12 months; or

- the Subcontractor has not resided overseas for more than six months since its last cleared post.




B - EMPLOYER DATA

The Contractor shall not delete or remove any proprietary notices contained within or relating to the Employer Data.

The Contractor shall not store, copy, disclose, or use the Employer Data except as necessary for the performance by the Contractor of its obligations under this contract or as otherwise expressly authorised in writing by the Employer.

To the extent that Employer Data is held and/or processed by the Contractor, the Contractor shall supply that Employer Data to the Employer as requested by the Employer and in the format specified in this contract (if any) and in any event as specified by the Employer from time to time in writing.

The Contractor shall take responsibility for preserving the integrity of Employer Data and preventing the corruption or loss of Employer Data.

The Contractor shall perform secure back-ups of all Employer Data and shall ensure that up-to-date back-ups are stored off-site in accordance with:

- any business continuity and/or disaster recovery plan created as part of the contract (if any);

- the Employer's requirements set out in the contract (if any);

- Good Industry Practice; and

- such reasonable instructions in relation to business continuity and disaster recovery as the Employer may notify to the Contractor from time to time

(together the "BCDR Requirements")




and the Contractor shall ensure that such back-ups are available to the Employer at all times upon request and are delivered to the Employer at regular intervals prescribed by the Employer from time to time acting reasonably.

The Contractor shall ensure that any system on which the Contractor holds any Employer Data, including back-up data, is a secure system that complies with the Security Policy.

If the Employer Data is corrupted, lost or sufficiently degraded as a result of the Contractor's Default so as to be unusable, the Employer may:

- require the Contractor (at the Contractor's expense) to restore or procure the restoration of Employer Data to the extent and in accordance with the BCDR Requirements and the Contractor shall do so as soon as practicable but in any event not later than such date as is notified to the Contractor by the Employer acting reasonably; and/or

- itself restore or procure the restoration of Employer Data, and shall be repaid by the Contractor any reasonable expenses incurred in doing so to the extent and in accordance with the requirements specified the BCDR Requirements.

If at any time the Contractor suspects or has reason to believe that Employer Data has or may become corrupted, lost or sufficiently degraded in any way for any reason, then the Contractor shall notify the Employer immediately and inform the Employer of the remedial action the Contractor proposes to take.




C - PROTECTION OF PERSONAL DATA

With respect to the parties' rights and obligations under this contract, the parties agree that the Employer is the Data Controller and that the Contractor is the Data Processor.

The Contractor shall:

- Process the Personal Data only in accordance with instructions from the Employer (which may be specific instructions or instructions of a general nature as set out in this contract or as otherwise notified by the Employer to the Contractor during the service period);

- Process the Personal Data only to the extent, and in such manner, as is necessary for the provision of the service or as is required by Law or any Regulatory Body;

- implement appropriate technical and organisational measures to protect the Personal Data against unauthorised or unlawful processing and against




accidental loss, destruction, damage, alteration or disclosure. These measures shall be appropriate to the harm which might result from any unauthorised or unlawful Processing, accidental loss, destruction or damage to the Personal Data and having regard to the nature of the Personal Data which is to be protected;

- take reasonable steps to ensure the reliability of any Contractor Personnel who have access to the Personal Data;

- obtain prior written consent from the Employer in order to transfer the Personal Data to any Subcontractors or Affiliates for the provision of the service;

- ensure that all Contractor Personnel required to access the Personal Data are informed of the confidential nature of the Personal Data and comply with the obligations set out in this clause C;

- ensure that none of Contractor Personnel publish, disclose or divulge any of the Personal Data to any third party unless directed in writing to do so by the Employer;

- notify the Employer (within five Working Days) if it receives:

o a request from a Data Subject to have access to that person's Personal Data; or

o a complaint or request relating to the Employer's obligations under the Data Protection Legislation;

- provide the Employer with full cooperation and assistance in relation to any complaint or request made, including by:

o providing the Employer with full details of the complaint or request;

o complying with a data access request within the relevant timescales set out in the Data Protection Legislation and in accordance with the Employer's instructions;

o providing the Employer with any Personal Data it holds in relation to a Data Subject (within the timescales required by the Employer); and

o providing the Employer with any information requested by the Employer;

- permit the Employer or the Service Manager (subject to reasonable and appropriate confidentiality undertakings), to inspect and audit the Contractor's data Processing activities (and/or those of its agents, subsidiaries and Subcontractors) and comply with all




reasonable requests or directions by the Employer to enable the Employer to verify and/or procure that the Contractor is in full compliance with its obligations under this contract;

- provide a written description of the technical and organisational methods employed by the Contractor for processing Personal Data (within the timescales required by the Employer); and

- not Process or otherwise transfer any Personal Data outside the European Economic Area. If, after the Contract Date, the Contractor (or any Subcontractor) wishes to Process and/or transfer any Personal Data outside the European Economic Area, the following provisions shall apply:

o the Contractor shall submit a Change Request to the Employer which shall be dealt with in accordance with the Change Control Procedure and the clauses listed below;

o the Contractor shall set out in its Change Request and/or Impact Assessment details of the following:

(a) the Personal Data which will be Processed and/or transferred outside the European Economic Area;

(b) the country or countries in which the Personal Data will be Processed and/or to which the Personal Data will be transferred outside the European Economic Area;

(c) any Subcontractors or other third parties who will be Processing and/or transferring Personal Data outside the European Economic Area; and

(d) how the Contractor will ensure an adequate level of protection and adequate safeguards (in accordance with the Data Protection Legislation and in particular so as to ensure the Employer’s compliance with the Data Protection Legislation) in respect of the Personal Data that will be Processed and/or transferred outside the European Economic Area;

o in providing and evaluating the Change Request and Impact Assessment, the parties shall ensure that they have regard to and comply with then-current Employer, Government and Information Commissioner Office policies, procedures, guidance and codes of practice on, and any approvals processes in connection with, the




Processing and/or transfers of Personal Data outside the European Economic Area and/orm overseas generally; and

o the Contractor shall comply with such other instructions and shall carry out such other actions as the Employer may notify in writing, including:

(a) incorporating standard and/or model clauses (which are approved by the European Commission as offering adequate safeguards under the Data Protection Legislation) in this contract or a separate data processing agreement between the parties; and

(b) procuring that any Subcontractor or other third party who will be Processing and/or transferring the Personal Data outside the European Economic Area enters into a direct data processing agreement with the Employer on such terms as may be required by the Employer, which the Contractor acknowledges may include the incorporation of standard and/or model clauses (which are approved by the European Commission as offering adequate safeguards under the Data Protection Legislation).

- The Contractor shall comply at all times with the Data Protection Legislation and shall not perform its obligations under this contract in such a way as to cause the Employer to breach any of its applicable obligations under the Data Protection Legislation.




D - CONFIDENTIALITY

Except to the extent set out in this clause or where disclosure is expressly permitted elsewhere in this contract, each party shall:

- treat the other party's Confidential Information as confidential and safeguard it accordingly; and

- not disclose the other party's Confidential Information to any other person without the owner's prior written consent.

The clause above shall not apply to the extent that:

- such disclosure is a requirement of Law placed upon the party making the disclosure, including any requirements for disclosure under the FOIA or the Environmental Information Regulations pursuant to clause Z4 (Freedom of Information);




- such information was in the possession of the party making the disclosure without obligation of confidentiality prior to its disclosure by the information owner;

- such information was obtained from a third party without obligation of confidentiality;

- such information was already in the public domain at the time of disclosure otherwise than by a breach of this contract; or

- it is independently developed without access to the other party's Confidential Information.

The Contractor may only disclose the Employer Confidential Information to the Contractor Personnel who are directly involved in the provision of the service and who need to know the information, and shall ensure that such Contractor Personnel are aware of and shall comply with these obligations as to confidentiality.

The Contractor shall not, and shall procure that the Contractor Personnel do not, use any of the Employer Confidential Information received otherwise than for the purposes of this contract.

The Contractor may only disclose the Employer Confidential Information to the Contractor Personnel and who need to know the information, and shall ensure that such Contractor Personnel are aware of, acknowledge the importance of, and comply with these obligations as to confidentiality. In the event that any default, act or omission of any Contractor Personnel causes or contributes (or could cause or contribute) to the Contractor breaching its obligations as to confidentiality under or in connection with this contract, the Contractor shall take such action as may be appropriate in the circumstances, including the use of disciplinary procedures in serious cases. To the fullest extent permitted by its own obligations of confidentiality to any Contractor Personnel, the Contractor shall provide such evidence to the Employer as the Employer may reasonably require (though not so as to risk compromising or prejudicing the case) to demonstrate that the Contractor is taking appropriate steps to comply with this clause, including copies of any written communications to and/or from Contractor Personnel, and any minutes of meetings and any other records which provide an audit trail of any discussions or exchanges with Contractor Personnel in connection with obligations as to confidentiality.

At the written request of the Employer, the Contractor shall procure that those members of the Contractor Personnel identified in the Employer's notice signs a confidentiality undertaking prior to commencing any work in accordance with this contract.




Nothing in this contract shall prevent the Employer from disclosing the Contractor's Confidential Information:

- to any Crown Body or any other Contracting Employer. All Crown Bodies or Contracting Authorities receiving such Confidential Information shall be entitled to further disclose the Confidential Information to other Crown Bodies or other Contracting Authorities on the basis that the information is confidential and is not to be disclosed to a third party which is not part of any Crown Body or any Contracting Employer;

- to any consultant, contractor or other person engaged by the Employer or any person conducting an Office of Government Commerce gateway review;

- for the purpose of the examination and certification of the Employer 's accounts; or

- for any examination pursuant to Section 6(1) of the National Audit Act 1983 of the economy, efficiency and effectiveness with which the Employer has used its resources.

The Employer shall use all reasonable endeavours to ensure that any government department, Contracting Employer, employee, third party or Subcontractor to whom the Contractor's Confidential Information is disclosed pursuant to the above clause is made aware of the Employer's obligations of confidentiality.

Nothing in this Z51 clause D shall prevent either party from using any techniques, ideas or know-how gained during the performance of the contract in the course of its normal business to the extent that this use does not result in a disclosure of the other party's Confidential Information or an infringement of IPR.

E - WARRANTIES

The Contractor warrants, represents and undertakes for the duration of the service period that all personnel used to provide the service will be vetted in accordance with Good Industry Practice, the Security Policy and the Standards.




F - SECURITY REQUIREMENTS

The Contractor shall comply, and shall procure the compliance of the Contractor Personnel, with the Security Policy and the Security Management Plan and the Contractor shall ensure that the Security Management Plan produced by the Contractor fully complies with the Security Policy.

The Employer shall notify the Contractor of any changes or proposed changes to the Security Policy.




If the Contractor believes that a change or proposed change to the Security Policy will have a material and unavoidable cost implication to the service it may submit a Change Request. In doing so, the Contractor must support its request by providing evidence of the cause of any increased costs and the steps that it has taken to mitigate those costs. Any change to the Prices shall then be agreed in accordance with the Change Control Procedure.

Until and/or unless a change to the Prices is agreed by the Employer pursuant to the above clause the Contractor shall continue to perform the service in accordance with its existing obligations.

Malicious Software:

The Contractor shall, as an enduring obligation throughout the service period, use the latest versions of anti-virus definitions and software available from an industry accepted anti-virus software vendor to check for, contain the spread of, and minimise the impact of Malicious Software in the ICT Environment (or as otherwise agreed by the parties).

Notwithstanding the above clause, if Malicious Software is found, the parties shall co-operate to reduce the effect of the Malicious Software and, particularly if Malicious Software causes loss of operational efficiency or loss or corruption of Employer Data, assist each other to mitigate any losses and to restore the service to their desired operating efficiency.

Any cost arising out of the actions of the parties taken in compliance with the provisions of the above clause shall be borne by the parties as follows:

- by the Contractor where the Malicious Software originates from the Contractor Software, the Third Party Software supplied by the Contractor (except where the Employer has waived the obligation) or the Employer Data (whilst the Employer Data was under the control of the Contractor) unless the Contractor can demonstrate that such Malicious Software was present and not quarantined or otherwise identified by the Employer when provided to the Contractor; and

- by the Employer if the Malicious Software originates from the Employer Software (in respect of which the Employer has waived its obligation) or the Employer Data (whilst the Employer Data was under the control of the Employer).




Option Z 52 Small and Medium Sized Enterprises (SMEs)


26.8 The Contractor is required to take all reasonable steps to engage SMEs as Subcontractors and to seek to ensure that no less than the percentage of the Subcontractors stated in the Contract Data (the “SME Percentage”) are SMEs or that a similar proportion of the Defined Cost of the service is undertaken by SMEs.

26.9 The Contractor is required to report to the Employer in its regular contract management monthly reporting cycle the numbers of SMEs engaged as Subcontractors and the value of the Defined Cost of the service that has been undertaken by SMEs.

26.10 Where available, the Contractor is required to tender its Subcontracts using the same online electronic portal as was provided by the Employer for the purposes of tendering this contract.

26.11 The Contractor is to ensure that the terms and conditions used to engage Subcontractors are no less favourable than those of this contract. A reason for the Service Manager not accepting subcontract conditions proposed by the Contractor is that they are unduly disadvantageous to the Subcontractor.

Option Z 53 Apprenticeships


24.4 The Contractor is required to take all reasonable steps to employ apprentices, and report to the Employer the numbers of apprentices employed and the wider skills training provided, during the delivery of the service.

24.5 The Contractor is required to take all reasonable steps to ensure that no less than the percentage of its employees stated in the Contract Data (the “Apprenticeship Percentage”) are on formal apprenticeship programmes or that a similar proportion of hours worked in delivering the service, (which may include support staff and Subcontractors) are provided by employees on formal apprenticeship programmes.

24.6 The Contractor is required to make available to its employees and Subcontractors working on the contract, information about the Government’s Apprenticeship programme and wider skills opportunities.




24.7 The Contractor is to provide any further skills training opportunities that are appropriate for its employees engaged in Providing the Service.

24.8 The Contractor is to provide a written report detailing the following measures in its regular contract management monthly reporting cycle and be prepared to discuss apprenticeships at its regular meetings with the Service Manager:

24.8.1 the number of people during the reporting period employed on the contract, including support staff and Subcontractors;

24.8.2 the number of apprentices and number of new starts on apprenticeships directly initiated through the procurement process;

24.8.3 the percentage of all employees taking part in an apprenticeship programme;

24.8.4 if applicable, an explanation from the Contractor as to why it is not managing to meet the specified percentage target;

24.8.5 actions being taken to improve the take up of apprenticeships;

24.8.6 other training/skills development being undertaken by employees in relation to this contract, including:

(a) work experience placements for 14 to 16 year olds;

(b) work experience /work trial placements for other ages;

(c) student sandwich/gap year placements;

(d) graduate placements;

(e) vocational training;

(f) basic skills training; and

(g) on site training provision/ facilities.

Option Z 54 Management information

New clause Contract Schedule K applies in cases where Z54 is used.




SECTION 4 : FURTHER Z CLAUSES REQUIRED BY THE EMPLOYER

Option Z 55 Insert heading for further Z clause

Insert text of further clause

Option Z 56 Insert heading for further Z clause

Insert text of further clause




CONTRACT SCHEDULE C

CONTRACT DATA PART 2 – DATA PROVIDED BY THE CONTRACTOR




CONTRACT DATA Part two – Data provided by the Contractor

Statements given in all contracts

The Contractor is:

Name ............................................................................................

Address ........................................................................................

.......................................................................................................

The direct fee percentage is ........................................................... %

The subcontracted fee percentage is ............................................. %

The key persons are:

(1) Name ........................................................................................

Job ............................................................................................

Responsibilities .........................................................................

Qualifications ............................................................................

Experience ................................................................................

(2) Name ........................................................................................

Job ............................................................................................


Qualifications ............................................................................

Experience ................................................................................

(3) Name ........................................................................................

Job ............................................................................................


Qualifications ............................................................................

Experience ................................................................................

The following matters will be included in the Risk Register




.............................................................................................................

.............................................................................................................

Optional statements

If the Contractor is to provide Service Information for his plan

The Service Information for the Contractor’s plan is in .................

If a plan is identified in the Contract Data

The plan identified in the Contract Data is ....................................

If Option A, C or E is used

The price list is in Contract Schedule E.

If Option A or C is used

The tendered total of the Prices is ................................................




CONTRACT SCHEDULE D

THE SERVICE INFORMATION





Insert or append here the Service Information agreed by the Employer and Contractor.




CONTRACT SCHEDULE E

THE PRICE LIST




THE PRICE LIST

Insert or append here the priced documents completed by the Contractor.




CONTRACT SCHEDULE F

COLLATERAL WARRANTY AGREEMENTS





If Option Z 37, clause 28.1 is used and no alternative forms of collateral warranty are appended here, the collateral warranty agreements which may be required from the Contractor, are those published by the Joint Contracts Tribunal Ltd (“JCT”), namely:

Contractor – Purchaser, Tenant or Operator: JCT collateral warranty reference CWa/P&T

Contractor – Fund: JCT collateral warranty reference CWa/F

If Option Z 37, clause 28.2 is used and no alternative forms of collateral warranty are appended here, the collateral warranty agreements which may be required from the Subcontractors are those published by the JCT, namely:

Subcontractor – Employer: JCT collateral warranty reference SCWa/E

Subcontractor – Purchaser, Tenant or Operator: JCT collateral warranty reference SCWa/P&T

Subcontractor – Fund: JCT collateral warranty reference SCWa/F




CONTRACT SCHEDULE G

PERFORMANCE BOND




PERFORMANCE BOND

If Option X13 is used and no alternative form of performance bond is appended here, the format of the performance bond which may be required from the Contractor is the “ABI Model Form of Guarantee Bond” published by the Association of British Insurers.




CONTRACT SCHEDULE H

ARBITRATION PROCEDURE





1. Instead of referring a dispute to litigation the Parties may, if they both agree, refer any dispute to arbitration in accordance with this procedure.

2. The party seeking to initiate the arbitration shall give a written Notice of Arbitration to the other party. The Notice of Arbitration shall –

2.1 state that the dispute is referred to arbitration;

2.2 state the particulars of this contract; and

2.3 provide a brief summary of the subject of the dispute.

3. Unless otherwise agreed in writing by the Employer and the Contractor, the provisions of the Arbitration Act 1996 shall govern the arbitration commenced pursuant to this paragraph 3.

4. Any Dispute, if referred to arbitration in accordance with this procedure, shall be resolved by arbitration under the procedural rules of the London Court of International Arbitration.

5. It is agreed between the Employer and the Contractor that for the purposes of the arbitration, the arbitrator shall have the power to make provisional awards as provided for in Section 39 of the Arbitration Act 1996.

6. For the avoidance of doubt it is agreed by the Employer and the Contractor that the arbitration process and anything said, done or produced in or in relation to the arbitration process (including any awards) shall be confidential between the Parties, except as may be lawfully required in judicial proceedings relating to the arbitration or otherwise. No report relating to anything said, done or produced in or in relation to the arbitration process may be made to any body other than the tribunal, the Employer and the Contractor, their legal representatives and any person necessary to the conduct of the proceedings, without the agreement of the Parties.

7. The arbitration proceedings shall take place in London and in the English language and the arbitration proceedings shall be governed by, and interpretations made in accordance with, English law.

8. The Employer and the Contractor shall each bear their own costs in relation to any reference made to the arbitrator and the fees and all other costs of the arbitrator shall be borne jointly in equal proportions by both Parties unless otherwise directed by the arbitrator.

9. This procedure shall be without prejudice to either party’s right to refer any dispute to adjudication in accordance with this contract.







CONTRACT SCHEDULE I

TUPE AND RELATED MATTERS




TUPE AND RELATED MATTERS1

1. Definitions In this Contract Schedule, the interpretations set out in the Framework Agreement shall apply and the following words and expressions shall have the meanings set out below: -

Phrase Meaning

Code means the Code of Practice on Workforce Matters in Local Authority Service Contracts issued by the Office of the Deputy Prime Minister which took effect on 3 March 2003 or the Code of Practice on Workforce Matters in Public Sector Service Contracts which took effect on 18 March 2005, whichever is applicable2;

Code Obligations means the express obligations of the Contractor in Clause 4 of this Contract Schedule which derive from the Code;

Directive means the European Directive 2001/23/EC as amended from time to time;

New Employees means those new employees employed by the Contractor to provide the service who will be working alongside the Transferring Employees;

Regulations means the Transfer of Undertakings (Protection of Employment) Regulations 2006 as amended from time to time;

Relevant Employees means employees who are the subject of a Relevant Transfer;

Relevant Transfer means a relevant transfer for the purposes of the Regulations;

Transfer Date means the date Transferring Employees are transferred to the employment of the Contractor;

1 Note that this schedule only contains skeleton provisions on the application of TUPE and related issues and is essentially designed to alert Employers to the range of issues that may need to be considered where the entering into of a Specific Contract (and/or its subsequent expiry) is likely to entail a TUPE transfer. Employers should always take specialist legal advice on the specific TUPE and pensions drafting requirements relevant to their project. 2 Note that there are a number of exemptions where neither Code applies (as at October 2007). These include public corporations and trading funds; independent sector treatment centres; transfers where the “Retention of Employment Model” is being used; and higher and further education institutions and academies. Note also that there is some doubt concerning the application of the Code where the Employer’s staff transferred from the Employer’s employment before the relevant Code took effect.




Transferring Employees means the employees of the Employer or a third party whose contracts of employment become, by virtue of the application of the Regulations in relation to what is done for the purposes of carrying out this contract, a contract of employment with someone other than the Employer.




2. TUPE Compliance and General Employment Matters 2.1. Application of the Regulations and the Code 2.1.1. The Employer and the Contractor acknowledge that where the identity of a

provider (including the Employer) of any service which constitutes or which will constitute part of the service is changed pursuant to this contract (including upon termination of this contract) then the change shall constitute a Relevant Transfer and be subject to the Regulations, the Directive and the Code.

2.1.2. On the occasion of each Relevant Transfer except a Relevant Transfer upon

termination of this contract, the Contractor shall and shall procure that any new service provider of the relevant service shall comply with all of its obligations under the Regulations, the Directive and the Code in respect of the Relevant Employees.

2.2. Emoluments and Outgoings 2.2.1. The Employer shall be responsible for or shall use reasonable endeavours to

procure that any other employer of a Relevant Employee is responsible for all remuneration, benefits, entitlements and outgoings in respect of the Relevant Employees, including without limitation all wages, holiday pay, bonuses, commissions, payment of PAYE, national insurance contributions, pension contributions and otherwise, up to the Transfer Date.

2.2.2. The Contractor shall be responsible for all remuneration, benefits,

entitlements and outgoings in respect of the Relevant Employees, including without limitation all wages, holiday pay, bonuses, commissions, payment of PAYE, national insurance contributions, pension contributions and otherwise, from and including the Transfer Date.

2.3. Pensions [ ]3 2.4. Employment Information The Employer has provided the information set out in the Appendix to this Schedule regarding the identity, number, age, sex, length of service, job title, grade and terms and conditions of employment relating to the Relevant Employees but does not warrant that the information is accurate and complete as at the date of this contract, and undertakes to advise the Contractor on a three monthly basis up to the Transfer

3 Specialist legal advice must be sought on the drafting of the necessary pension provisions relevant to a Specific Contract - which may well have sector specific requirements. Note that in certain sectors transferring employees may be granted third party rights under the Contracts (Rights of Third Parties) Act 1999 in which case this would need to be addressed in the relevant clause dealing with that Act in the Specific Contract conditions.




Date of any changes in the information provided, but again will not warrant the accuracy or completeness of such changed information.




2.5. Information as to Measures The Contractor shall within 10 (ten) working days of receiving a request from the Employer, provide to the Employer any information deemed by the Employer necessary concerning any measures (within the meaning of the Regulations and the Directive) that the Contractor intends to take in relation to any Relevant Employee and shall indemnify the Employer against all losses, costs, claims, demands, actions, fines, penalties, liabilities and expenses (including legal expenses) in relation to any breach of this obligation. 2.6. Further Obligations on the Contractor 2.6.1. The Contractor shall not assign or redeploy to the undertaking or relevant part

of the undertaking which provides the service any persons in its employment who do not meet the standards of qualification and competence required for the purposes of this contract or whose assignment or redeployment would cause the total number of Staff to exceed the number required for the purposes of this contract.

2.6.2. The Contractor shall recognise, and procure that any Subcontractor shall

recognise, the trade unions representing the Transferring Employees to the same extent as they were recognised before the Transfer Date.

2.7. Indemnities 2.7.1. The Employer shall indemnify the Contractor from and against all losses,

costs, claims, demands, actions, fines, penalties, liabilities and expenses (including legal expenses), which the Contractor shall take all reasonable steps to mitigate, in connection with or as a result of any claim or demand by any Relevant Employee arising out of the employment of any Relevant Employee provided that this arises from any act, negligence, fault or omission of the Employer in relation to any Relevant Employee prior to the date of the Relevant Transfer and any such claim is not in connection with the Relevant Transfer.

2.7.2. The Contractor shall indemnify the Employer from and against all losses,

costs, claims, demands, actions, fines, penalties, liabilities and expenses (including legal expenses), which the Contractor shall take all reasonable steps to mitigate, in connection with or as a result of any claim or demand by any Relevant Employee arising out of the employment of or termination of the employment of any Relevant Employee provided that this arises from any act, negligence, fault or omission of the Contractor in relation to any Relevant Employee, on or after the date of the Relevant Transfer.

2.7.3. The Contractor shall indemnify and hold harmless the Employer from and

against all losses, costs, claims, demands, actions, fines, penalties, awards, liabilities and expenses (including legal expenses) which the Employer shall take all reasonable steps to mitigate, in connection with or as a result of any claim by any trade union or staff association or employee representative




(whether or not recognised by the Contractor in respect of all or any of the Relevant Employees) arising from or connected with any failure by the Contractor to comply with any legal obligation to such trade union staff associated or other employee representative whether under Regulation 13 of the Regulations, under the Directive or otherwise and, whether any such claim arises or has its origin before or after the date of the Relevant Transfer.

2.7.4. The Contractor shall indemnify the Employer from and against all losses,

costs, claims, demands, actions, fines, penalties, awards, liabilities and expenses (including legal expenses) which the Employer shall take all reasonable steps to mitigate, in connection with or as a result of any claim by any Relevant Employee that the identity of the Contractor or Subcontractor is to that Relevant Employee's detriment or that the terms and conditions to be provided by the Contractor or any Subcontractor or any proposed measures of the Contractor or any Subcontractor are to that employee's detriment whether such claim arises before or after the Transfer Date.

3. TUPE Compliance on Termination 3.1. Handover on Termination 3.1.1. During the 12 (twelve) months preceding the expiry of this contract or after

the Employer has given notice to terminate this contract or at any other time as directed by the Employer, and within 15 (fifteen) working days of being so requested by the Employer, the Contractor shall fully and accurately disclose to the Employer any and all information in relation to all staff engaged in providing the service (including all Relevant Employees who are to transfer as a consequence of a Relevant Transfer) (the “Staff”) as the Employer may request, in particular but not necessarily restricted to any of the following:-

3.1.1.1.a list of the Staff; 3.1.1.2.in respect of the Staff, their age, sex, salary, hours of work, date continuous

employment commenced, enhancement rates and any other factors affecting their redundancy entitlement and any outstanding claims arising from their employment;

3.1.1.3.the general terms and conditions applicable to the Staff, including

probationary periods, retirement age, periods of notice, current pay agreements, working hours, entitlement to annual leave, sick leave, maternity and other forms of leave, terms of mobility, facility time arrangements and additional employment benefits;

3.1.1.4.details of all changes to the matters listed at 3.1.1.2 and 3.1.1.3 promised to

or discussed with any member of Staff; 3.1.1.5.details of all dismissals and other terminations of employment of anyone

previously engaged in connection with the provision of the service ;




3.1.1.6 details of all agreements or arrangements (whether or not legally binding) entered into in relation to the Staff with any trade union or other employee representatives;

3.1.1.7.details of all trade disputes and industrial action occurring at any time during

the service period; 3.1.1.8.a list of agency workers, agents and independent contractors engaged by the

Contractor; 3.1.1.9.the total payroll bill (i.e. total taxable pay and allowances including employer's

contributions to pension schemes) of the Staff. 3.1.2 The Contractor shall warrant the accuracy and completeness of all the

information provided to the Employer pursuant to Clause 3.1.1 of this Contract Schedule and authorises the Employer to use any and all the information as it may consider necessary for the purposes of its businesses or for informing any tenderer for any future contract for services which are substantially the same as the service (or any part thereof).

3.1.3. During the 12 (twelve) months preceding the expiry of this contract or where

notice to terminate this contract for whatever reason has been given, the Contractor shall allow the Employer or such other persons as may be authorised by the Employer to communicate with and meet the Relevant Employees and their trade union or employee representatives as the Employer may reasonably request.

3.1.4. During the 12 (twelve) months preceding the expiry of this contract or where

notice to terminate this contract for whatever reason has been given, the Contractor shall not without the prior written consent of the Employer unless bona fide in the ordinary course of business:

3.1.4.1.vary or purport or promise to vary the terms and conditions of employment of

any employee employed in connection with the service; 3.1.4.2.increase or decrease the number of employees employed in connection with

the service; or 3.1.4.3.assign or redeploy any employee employed in connection with the service to

other duties unconnected with the service. 3.2. Indemnities The Contractor shall indemnify the Employer and any new service provider appointed by the Employer and keep the Employer and any new service provider appointed by the Employer indemnified in full from and against all direct, indirect or consequential liability, loss, damages, injury, claims, costs and expenses (including legal expenses) which the Employer and any new service provider appointed by the Employer shall take all reasonable steps to mitigate, awarded against or incurred or




paid by the Employer or any new service provider appointed by the Employer as a result of or in connection with the employment or termination of employment of any employee of the Contractor during any period prior to the date of expiry or termination of this contract. 3.3. Subcontractors In the event that the Contractor enters into any Sub-contract, it shall impose obligations on its Subcontractor in the same terms as those imposed on it pursuant to Clause 3 of this Contract Schedule and shall procure that the Subcontractor complies with such terms. The Contractor shall indemnify the Employer and keep the Employer indemnified in full from and against all direct, indirect or consequential liability, loss, damages, injury, claims, costs and expenses (including legal expenses) awarded against or incurred or paid by the Employer as a result of or in connection with any failure on the part of the Subcontractor to comply with such terms. 4. Application of Code to New Employees 4.1. New Employees 4.1.1. The Employer and the Contractor shall have regard to the Code in

interpreting and applying the Code Obligations. 4.1.2. Subject to Clause 4.1.1 of this Contract Schedule the Contractor shall employ

New Employees on terms and conditions of employment which are, overall no less favourable than those of the Transferring Employees engaged in the provision of the service who is working alongside and holding the same or a similar position to that of the New Employees.

4.1.3. The Contractor shall consult with the recognised trade unions and where

there is no recognised trade union any other employee representative body on the terms to be offered to the New Employees pursuant to Clause 4.1.2 of this Contract Schedule.

4.1.4. [Pensions]4 4.2. ADR and other Code Obligations relating to New Employees 4.2.1. During the term of this contract, the Contractor shall on request by the

Employer provide the Employer with accurate and complete information as soon as reasonably practicable, including the terms and conditions of employment of the Transferring Employees and the New Employees, where this is required to monitor the Contractor's compliance with its Code Obligations.

4 Specialist legal advice must be sought on the drafting of the necessary pension provisions relevant to a Specific Contract - which may well have sector specific requirements.




4.2.2. The Contractor shall support any central Government sponsored review and monitoring programme on the impact of the Codes and on request by the Employer provide the Employer with accurate and complete information as soon as reasonably practicable in order to assist the Employer in doing this.

4.2.3. The Employer and the Contractor shall in the first instance seek to resolve by

discussions between them any complaints from any employee or any recognised trade union in relation to compliance by the Contractor of its Code Obligations.

4.2.4. Where it appears to the Employer or the Contractor that it is not possible to

resolve the matter by continuing discussions between them pursuant to Clause 4.2.3 of this Contract Schedule or where an employee of the Contractor or any recognised trade union writes to the Employer to confirm that it has been unable to resolve its complaint directly with the Contractor in relation to the Contractor's Code Obligations:

4.2.4.1.the Employer shall first write to the Contractor to seek an explanation for the

alleged failure by the Contractor to comply with its Code Obligations. The Contractor shall provide such an explanation in writing within 5 (five) working days of receipt of the request from the Employer;

4.2.4.2.if the response provided by the Contractor satisfies the Employer that the

Code Obligations have been met, then the Employer will inform the complainant of this and the matter will be deemed to have been concluded;

4.2.4.3.in the event that the Employer is not satisfied with the response provided by

the Contractor the Employer shall write to the Contractor within 5 (five) working days to require the Contractor to take immediate action to resolve this dispute; and

4.2.4.4.if, following such a request by the Employer the Contractor still appears to the

Employer not to be complying with its Code Obligations, the matter shall be dealt with in accordance with whichever dispute resolution Option is applicable to this contract or, if both Parties agree, in accordance with the Alternative Dispute Resolution Procedure set out in the Code.




CONTRACT SCHEDULE J

SECURITY PROVISIONS




1. Definitions

For the purposes of Z51 sections A to F, the following terms shall have the meanings given below:

"Affiliates" in relation to a body corporate, any other entity which directly or indirectly Controls, is Controlled by, or is under direct or indirect common Control with, that body corporate from time to time;

"Change Control Procedure" the procedure for changing this contract, as set out in this contract (if any) and in any event as agreed between the parties from time to time;

"Change Request" a written request for a Contract Change;

"Clearance" means national security clearance and employment checks undertaken by and/or obtained from the Defence Vetting Agency;

"Commercially Sensitive Information" the information agreed between the parties (if any) [comprising the information of a commercially sensitive nature relating to the Contractor, its IPR or its business or which the Contractor has indicated to the Employer that, if disclosed by the Employer, would cause the Contractor significant commercial disadvantage or material financial loss];

[Note: The Contractor's Commercially Sensitive Information should be agreed between the Employer and the Contractor, together with the duration (if applicable) for which such information should remain confidential. OGC Guidance states that this information is a subset of the Contractor's Confidential Information and should contain a narrow list of information. This will assist the Employer in respect of compliance with FOIA and the section 45 code published by the Department of Constitutional Affairs. If such information is listed in a specific document, please include the wording in square brackets in the above definition. If the information is not specifically listed in a specific document, please ensure that the above wording in square brackets in this definition is deleted.]

"Confidential Information" the Employer's Confidential Information and/or the Contractor's Confidential Information;

"Contract Change" any change to this contract other than an Operational Change;

"Contracting Authority" any contracting authority as defined in Regulation 5(2) of the Public Contracts (Works, Service and Supply) (Amendment) Regulations 2000 other than the Employer;

"Contractor's Confidential Information" any information, however it is conveyed, that relates to the business, affairs, developments, trade secrets, know-how, personnel and suppliers of the Contractor, including IPRs, together with all information derived from the above, and any other information clearly designated as being confidential (whether or




not it is marked as "confidential") or which ought reasonably to be considered to be confidential, including the Commercially Sensitive Information;

"Contractor Equipment" the hardware, computer and telecoms devices and equipment supplied by the Contractor or its Subcontractors (but not hired, leased or loaned from the Employer) for the provision of the service;

"Contractor Personnel" all employees, agents, consultants and contractors of the Contractor and/or of any Subcontractor;

"Contractor Software" software which is proprietary to the Contractor, including software which is or will be used by the Contractor for the purposes of providing the service;

"Contractor System" the information and communications technology system used by the Contractor in performing the service including the Software, the Contractor Equipment and related cabling (but excluding the Employer System);

"Control" means that a person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other person (whether through the ownership of voting shares, by contract or otherwise) and "Controls" and "Controlled" shall be interpreted accordingly;

"Crown Body" any department, office or agency of the Crown;

"Data Controller" shall have the same meaning as set out in the Data Protection Act 1998;

"Data Processor" shall have the same meaning as set out in the Data Protection Act 1998;

"Data Protection Legislation" the Data Protection Act 1998, the EU Data Protection Directive 95/46/EC, the Regulation of Investigatory Powers Act 2000, the Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000 (SI 2000/2699), the Electronic Communications Data Protection Directive 2002/58/EC, the Privacy and Electronic Communications (EC Directive) Regulations 2003 and all applicable laws and regulations relating to processing of personal data and privacy, including where applicable the guidance and codes of practice issued by the Information Commissioner;

"Data Subject" shall have the same meaning as set out in the Data Protection Act 1998;

"Default" any breach of the obligations of the relevant party (including but not limited to fundamental breach or breach of a fundamental term) or any other default, act, omission, negligence or statement of the relevant party, its employees, servants, agents or Sub contractors in connection with or in relation to the subject-matter of this contract and in respect of which such party is liable to the other;




"Dispute Resolution Procedure" the dispute resolution procedure set out in this contract (if any) or as agreed between the parties;

"Employer Confidential Information" all Personal Data and any information, however it is conveyed, that relates to the business, affairs, developments, trade secrets, know-how, personnel, and suppliers of the Employer, including all IPRs, together with all information derived from any of the above, and any other information clearly designated as being confidential (whether or not it is marked "confidential") or which ought reasonably be considered to be confidential;

"Employer Data"

(a) the data, text, drawings, diagrams, images or sounds (together with any database made up of any of these) which are embodied in any electronic, magnetic, optical or tangible media, and which are:

(i) supplied to the Contractor by or on behalf of the Employer; or

(ii) which the Contractor is required to generate, process, store or transmit pursuant to this contract; or

(b) any Personal Data for which the Employer is the Data Controller;

"Employer Premises" means premises owned, controlled or occupied by the Employer or its Affiliates which are made available for use by the Contractor or its Subcontractors for provision of the service (or any of them) on the terms set out in this contract or any separate agreement or licence;

"Employer System" the Employer's computing environment (consisting of hardware, software and/or telecommunications networks or equipment) used by the Employer or the Contractor in connection with this contract which is owned by or licensed to the Employer by a third party and which interfaces with the Contractor System or which is necessary for the Employer to receive the service;

"Environmental Information Regulations" the Environmental Information Regulations 2004 together with any guidance and/or codes of practice issues by the Information Commissioner or relevant Government Department in relation to such regulations;

"FOIA" the Freedom of Information Act 2000 and any subordinate legislation made under this Act from time to time together with any guidance and/or codes of practice issued by the Information Commissioner or relevant Government Department in relation to such legislation;

"Good Industry Practice" the exercise of that degree of skill, care, prudence, efficiency, foresight and timeliness as would be expected from a leading company within the relevant industry or business sector;

"ICT" information and communications technology;




"ICT Environment" the Employer System and the Contractor System;

"Impact Assessment" an assessment of a Change Request;

"Information" has the meaning given under section 84 of the Freedom of Information Act 2000;

"Information Assets Register" the register of information assets to be created and maintained by the Contractor throughout the service period as described in the contract (if any) or as otherwise agreed between the parties;

"Intellectual Property Rights" or "IPRs"

(a) copyright, rights related to or affording protection similar to copyright, rights in databases, patents and rights in inventions, semi-conductor topography rights, trade marks, rights in internet domain names and website addresses and other rights in trade names, designs, Know-How, trade secrets and other rights in Confidential Information;

(b) applications for registration, and the right to apply for registration, for any of the rights listed at (a) that are capable of being registered in any country or jurisdiction; and

(c) all other rights having equivalent or similar effect in any country or jurisdiction;

"Know-How" all ideas, concepts, schemes, information, knowledge, techniques, methodology, and anything else in the nature of know how relating to the service but excluding know how already in the Contractor’s or the Employer’s possession before this contract;

"Law" any applicable law, statute, bye-law, regulation, order, regulatory policy, guidance or industry code, rule of court or directives or requirements of any Regulatory Body, delegated or subordinate legislation or notice of any Regulatory Body;

"List x" means, in relation to a Subcontractor, one who has been placed on List x in accordance with Ministry of Defence guidelines and procedures, due to that Sub contractor undertaking work on its premises marked as CONFIDENTIAL or above;

"Malicious Software" any software program or code intended to destroy, interfere with, corrupt, or cause undesired effects on program files, data or other information, executable code or application software macros, whether or not its operation is immediate or delayed, and whether the malicious software is introduced wilfully, negligently or without knowledge of its existence;

"Operational Change" any change in the Contractor's operational procedures which in all respects, when implemented:

(a) will not affect the Prices or the Contractor's costs of performing the service and will not result in any other costs to the Employer; and/or




(b) may change the way in which the service are delivered but will not adversely affect the output of the service or increase the risks in performing or receiving the service; and/or

(c) will not adversely affect the interfaces or interoperability of the service with any of the Employer's IT infrastructure; and/or

(d) will not require a change to the contract;

"Personal Data" shall have the same meaning as set out in the Data Protection Act 1998;

"Process" has the meaning given to it under the Data Protection Legislation but, for the purposes of this contract, it shall include both manual and automatic processing;

"Regulatory Bodies" those government departments and regulatory, statutory and other entities, committees and bodies which, whether under statute, rules, regulations, codes of practice or otherwise, are entitled to regulate, investigate, or influence the matters dealt with in this contract or any other affairs of the Employer and "Regulatory Body" shall be construed accordingly;

"Request for Information" a request for information or an apparent request under the Code of Practice on Access to Government Information, FOIA or the Environmental Information Regulations;

"Security Management Plan" the Contractor's security plan prepared pursuant to paragraph 3 of schedule 1 (Security Management Plan) an outline of which is set out in Appendix of schedule 1 (Security Management Plan);

"Security Policy" the Employer's security policy annexed to schedule 1 (Security Management Plan) as updated from time to time;

"Service Levels" the levels of service required to be provided, as prescribed in this contract (if any) or as otherwise agreed by the parties;

"Sites" any premises from which the service are provided or from which the Contractor manages, organises or otherwise directs the provision or the use of the service or where any part of the Contractor System is situated or where any physical interface with the Employer System takes place;

"Software" Specially Written Software, Contractor Software and Third Party Software;

"Specially Written Software" any software created by the Contractor (or by a third party on behalf of the Contractor) specifically for the purposes of this contract;

"Staff Vetting Procedures" the Employer's procedures and departmental policies for the vetting of personnel whose role will involve the handling of information of a sensitive or confidential nature or the handling of information which is subject to any relevant




security measures, including, but not limited to, the provisions of the Official Secrets Act 1911 to 1989;

"Standards" the British or international standards,[ Employer's internal policies and procedures, Government codes of practice and guidance together with any other specified policies or procedures referred to in this contract (if any) or as otherwise agreed by the parties;

"Sub-contract" any contract or agreement or proposed contract or agreement between the Contractor and any third party whereby that third party agrees to provide to the Contractor the service or any part thereof or facilities or services necessary for the provision of the service or any part thereof or necessary for the management, direction or control of the service or any part thereof;

"Third Party Software" software which is proprietary to any third party other than an Affiliate of the Contractor which is or will be used by the Contractor for the purposes of providing the service; and

"Working Day" means any day other than a Saturday, Sunday or public holiday in England and Wales.




2. Security Management Plan

In contracts which include any of the Z51 sections A to F, the following Security Management Plan can be used:

"Breach of Security"

in accordance with the Security Requirements and the Security Policy, the occurrence of:

(a) any unauthorised access to or use of the service, the Employer Premises, the Sites, the Contractor System and/or any ICT, information or data (including the Confidential Information and the Employer Data) used by the Employer and/or the Contractor in connection with this contract; and/or

(b) the loss and/or unauthorised disclosure of any information or data (including the Confidential Information and the Employer Data), including any copies of such information or data, used by the Employer and/or the Contractor in connection with this contract.

"ISMS" the Information Security Management System as defined by ISO/IEC 27001. The scope of the ISMS will be as agreed by the parties and will directly reflect the scope of the service;

"Protectively Marked" shall have the meaning as set out in the Security Policy Framework.

"Security Management Plan"

the Contractor's security plan prepared pursuant to paragraph 3 of this Part 2 of Contract Schedule J (Security Management Plan) and as attached as Appendix 2 to this Part 2 of this Contract Schedule J (Security Management Plan);

"Security Policy" the Employer's security policy as attached as Appendix 1 to this Part 2 of this Contract Schedule J (Security Management Plan) as updated from time to time;

"Security Policy Framework"

means the Cabinet Office Security Policy Framework (available from the Cabinet Office Security Policy Division);

"Security Requirements"

means the requirements in the contract relating to security of the provision of the service (if any) or such other requirements as the Employer may notify to the Contractor from time to time

"Security Tests" shall have the meaning set out in paragraph 2.4.1 of this Part 2 of this Contract Schedule J (Security Management




Plan);

"Statement of Applicability"

shall have the meaning set out in ISO/IEC 27001 and as agreed by the parties during the procurement phase;

2.1. Introduction

2.1.1 This schedule covers:

2.1.1.1 principles of protective security to be applied in delivering the service;

2.1.1.2 wider aspects of security relating to the service;

2.1.1.3 the development, implementation, operation, maintenance and continual improvement of an ISMS;

2.1.1.4 the creation and maintenance of the Security Management Plan;

2.1.1.5 audit and testing of ISMS compliance with the Security Requirements;

2.1.1.6 conformance to ISO/IEC 27001 (Information Security Requirements Specification) and ISO/IEC27002 (Information Security Code of Practice) and;

2.1.1.7 obligations in the event of actual, potential or attempted breaches of security.

2.2. Principles of Security

2.2.1. The Contractor acknowledges that the Employer places great emphasis on the confidentiality, integrity and availability of information and consequently on the security provided by the ISMS.

2.2.2. The Contractor shall be responsible for the effective performance of the ISMS and shall at all times provide a level of security which:

2.2.2.1 is in accordance with Good Industry Practice, Law and this contract;

2.2.2.2. complies with the Security Policy;

2.2.2.3. complies with at least the minimum set of security measures and standards as determined by the Security Policy Framework (Tiers 1-4) available from the Cabinet Office Security Policy Division (COSPD);

2.2.2.4. meets any specific security threats to the ISMS; and

2.2.2.5. complies with ISO/IEC27001 and ISO/IEC27002 in accordance with paragraph 2.5 of this schedule;




2.2.2.6. complies with the Security Requirements; and

2.2.2.7. complies with the Employer’s ICT standards.

2.2.3. Subject to clause Z51 section F, the references to standards, guidance and policies set out in paragraph 2.2.2 shall be deemed to be references to such items as developed and updated and to any successor to or replacement for such standards, guidance and policies, from time to time.

2.2.4. In the event of any inconsistency in the provisions of the above standards, guidance and policies, the Contractor should notify the Employer's Representative of such inconsistency immediately upon becoming aware of the same, and the Employer's Representative shall, as soon as practicable, advise the Contractor which provision the Contractor shall be required to comply with.

2.3. ISMS and Security Management Plan

2.3.1. Introduction:

2.3.1.1. The Contractor shall develop, implement, operate, maintain and continuously improve and maintain an ISMS which will, without prejudice to paragraph 2.2.2, be approved, by the Employer, tested in accordance with the provisions relating to testing as set out in the contract (if any) or as otherwise agreed between the parties, periodically updated and audited in accordance with ISO/IEC 27001.

2.3.1.2. The Contractor shall develop and maintain a Security Management Plan in accordance with this Schedule to apply during the service period.

2.3.1.3. The Contractor shall comply with its obligations set out in the Security Management Plan.

2.3.1.4. Both the ISMS and the Security Management Plan shall, unless otherwise specified by the Employer, aim to protect all aspects of the service and all processes associated with the delivery of the service, including the Employer Premises, the Sites, the Contractor System and any ICT, information and data (including the Employer Confidential Information and the Employer Data) to the extent used by the Employer or the Contractor in connection with this contract.

2.3.2. Development of the Security Management Plan:

2.3.2.1 Within 20 Working Days after the Contract Date and in accordance with paragraph 2.3.4 (Amendment and Revision), the Contractor will prepare and deliver to the Employer for approval a fully complete and up to date Security Management Plan which will be based on the draft Security Management Plan set out in Appendix 2 of this Part 2 of this Contract Schedule J.




2.3.2.2. If the Security Management Plan, or any subsequent revision to it in accordance with paragraph 2.3.4 (Amendment and Revision), is approved by the Employer it will be adopted immediately and will replace the previous version of the Security Management Plan at Appendix 2 of this Part 2 of this Contract Schedule J. If the Security Management Plan is not approved by the Employer the Contractor shall amend it within 10 Working Days or such other period as the parties may agree in writing of a notice of non-approval from the Employer and re-submit to the Employer for approval. The parties will use all reasonable endeavours to ensure that the approval process takes as little time as possible and in any event no longer than 15 Working Days (or such other period as the parties may agree in writing) from the date of its first submission to the Employer. If the Employer does not approve the Security Management Plan following its resubmission, the matter will be resolved in accordance with the Dispute Resolution Procedure. No approval to be given by the Employer pursuant to this paragraph 2.3.2.2 of this schedule may be unreasonably withheld or delayed. However any failure to approve the Security Management Plan on the grounds that it does not comply with the requirements set out in paragraph 2.3.3.4 shall be deemed to be reasonable.

2.3.3. Content of the Security Management Plan:

2.3.3.1. The Security Management Plan will set out the security measures to be implemented and maintained by the Contractor in relation to all aspects of the service and all processes associated with the delivery of the service and shall at all times comply with and specify security measures and procedures which are sufficient to ensure that the service comply with the provisions of this schedule (including the principles set out in paragraph 2.2.2);

2.3.3.2. The Security Management Plan (including the draft version) should also set out the plans for transiting all security arrangements and responsibilities from those in place at the Contract Date to those incorporated in the Contractor’s ISMS at the date notified by the Employer to the Contractor for the Contractor to meet the full obligations of the Security Requirements.

2.3.3.3. The Security Management Plan will be structured in accordance with ISO/IEC27001 and ISO/IEC27002, cross-referencing if necessary to other schedules of this contract which cover specific areas included within that standard.

2.3.3.4 The Security Management Plan shall be written in plain English in language which is readily comprehensible to the staff of the Contractor and the Employer engaged in the service and shall only reference documents which are in the possession of the Employer or whose location is otherwise specified in this schedule.




2.3.4. Amendment and Revision of the ISMS and Security Management Plan:

2.3.4.1. The ISMS and Security Management Plan will be fully reviewed and updated by the Contractor annually, or from time to time to reflect:

2.3.4.1.1. emerging changes in Good Industry Practice;

2.3.4.1.2. any change or proposed change to the Contractor System, the service and/or associated processes;

2.3.4.1.3. any new perceived or changed security threats; and

2.3.4.1.4. any reasonable request by the Employer.

2.3.4.2. The Contractor will provide the Employer with the results of such reviews as soon as reasonably practicable after their completion and amend the ISMS and Security Management Plan at no additional cost to the Employer. The results of the review should include, without limitation:

2.3.4.2.1. suggested improvements to the effectiveness of the ISMS;

2.3.4.2.2. updates to the risk assessments;

2.3.4.2.3. proposed modifications to the procedures and controls that effect information security to respond to events that may impact on the ISMS; and

2.3.4.2.4. suggested improvements in measuring the effectiveness of controls.

2.3.4.3. On receipt of the results of such reviews, the Employer will approve any amendments or revisions to the ISMS or Security Management Plan in accordance with the process set out at paragraph 2.3.2.2.

2.3.4.4. Any change or amendment which the Contractor proposes to make to the ISMS or Security Management Plan (as a result of an Employer request or change to the service or otherwise) shall be subject to the Change Control Procedure and shall not be implemented until approved in writing by the Employer.

2.4. Testing

2.4.1. The Contractor shall conduct tests of the ISMS ("Security Tests") on an annual basis or as otherwise agreed by the parties. The date, timing, content and conduct of such Security Tests shall be agreed in advance with the Employer.

2.4.2. The Employer shall be entitled to send a representative to witness the conduct of the Security Tests. The Contractor shall provide the Employer with the results of




such tests (in a form approved by the Employer in advance) as soon as practicable after completion of each Security Test.

2.4.3. Without prejudice to any other right of audit or access granted to the Employer pursuant to this contract, the Employer and/or its authorised representatives shall be entitled, at any time and without giving notice to the Contractor, to carry out such tests (including penetration tests) as it may deem necessary in relation to the ISMS and the Contractor's compliance with the ISMS and the Security Management Plan. The Employer may notify the Contractor of the results of such tests after completion of each such test. Security Tests shall be designed and implemented so as to minimise the impact on the delivery of the service. If such tests adversely affect the Contractor’s ability to deliver the service to the agreed Service Levels, the Contractor shall be granted relief against any resultant under-performance for the period of the tests.

2.4.4. Where any Security Test carried out pursuant to paragraphs 2.4.2 or 2.4.3 above reveals any actual or potential Breach of Security, the Contractor shall promptly notify the Employer of any changes to the ISMS and to the Security Management Plan (and the implementation thereof) which the Contractor proposes to make in order to correct such failure or weakness. Subject to the Employer's approval in accordance with paragraph 2.3.4.4, the Contractor shall implement such changes to the ISMS and the Security Management Plan in accordance with the timetable agreed with the Employer or, otherwise, as soon as reasonably possible. For the avoidance of doubt, where the change to the ISMS or Security Management Plan to address a non-compliance with the Security Policy or Security Requirements the change to the ISMS or Security Management Plan shall be at no cost to the Employer.

2.5. Compliance with ISO/IEC 27001

2.5.1. Unless otherwise agreed by the parties, the Contractor shall obtain independent certification of the ISMS to ISO/IEC 27001 within 12 months of the Contract Date and shall maintain such certification for the duration of the contract.

2.5.2. In the event that paragraph 2.5.1 above applies, if certain parts of the ISMS do not conform to good industry practice, or controls as described in ISO/IEC 27002 are not consistent with the Security Policy, and, as a result, the Contractor reasonably believes that it is not compliant with ISO/IEC 27001, the Contractor shall promptly notify the Employer of this and the Employer in its absolute discretion may waive the requirement for certification in respect of the relevant parts.

2.5.3. The Employer shall be entitled to carry out such regular security audits as may be required, and in accordance with Good Industry Practice, in order to ensure that the ISMS maintains compliance with the principles and practices of ISO 27001.

2.5.4. If, on the basis of evidence provided by such audits, it is the Employer's reasonable opinion that compliance with the principles and practices of ISO/IEC 27001 is not being achieved by the Contractor, then the Employer shall notify the




Contractor of the same and give the Contractor a reasonable time (having regard to the extent and criticality of any non-compliance and any other relevant circumstances) to become compliant with the principles and practices of ISO/IEC 27001. If the Contractor does not become compliant within the required time then the Employer has the right to obtain an independent audit against these standards in whole or in part.

2.5.5. If, as a result of any such independent audit as described in paragraph 2.5.4 the Contractor is found to be non-compliant with the principles and practices of ISO/IEC 27001 then the Contractor shall, at its own expense, undertake those actions required in order to achieve the necessary compliance and shall reimburse in full the costs incurred by the Employer in obtaining such audit.

2.6. Breach of Security

2.6.1. Either party shall notify the other in accordance with the agreed security incident management process as defined by the ISMS upon becoming aware of any Breach of Security or any potential or attempted Breach of Security.

2.6.2. Without prejudice to the security incident management process, upon becoming aware of any of the circumstances referred to in paragraph 2.6.1, the Contractor shall:

2.6.2.1. immediately take all reasonable steps necessary to:

2.6.2.1.1. remedy such breach or protect the integrity of the ISMS against any such potential or attempted breach or threat; and

2.6.2.1.2. prevent an equivalent breach in the future.

Such steps shall include any action or changes reasonably required by the Employer. In the event that such action is taken in response to a breach that is determined by the Employer acting reasonably not to be covered by the obligations of the Contractor under this contract, then the Contractor shall be entitled to refer the matter to the Change Control Procedure; and

2.6.2.2. as soon as reasonably practicable provide to the Employer full details (using such reporting mechanism as defined by the ISMS) of the Breach of Security or the potential or attempted Breach of Security.

APPENDIX 1 – Security Policy

[Note: Append Security Policy]

APPENDIX 2 – Security Management Plan




[Note: Append Security Management Plan]




CONTRACT SCHEDULE K

MANAGEMENT INFORMATION





If Option Z54 is used, the Contractor must submit the following management information to the Employer on a monthly basis:

Field Description

Region The region where the service is provided

Cost of Rent The cost of rent for the facility in the invoiced period

Cost of Rates The cost of rates for the facility in the invoiced period

Cost of Furniture The cost of furniture maintenance, cleaning, repair and replacement in the invoiced period.

Cost of Insurance The cost of insurance for the facility in the invoiced period.

Cost of maintenance The cost of building maintenance in the invoiced period

Cost of Security The cost of security in the invoiced period

Cost of Cleaning The cost of cleaning in the invoiced period

Cost of Waste Disposal The cost of waste disposal for the invoiced period

Cost of internal decoration

The cost of internal decoration in the invoiced period (e.g. Flowers, art etc)

Ground maintenance The cost of maintenance of the wider grounds in the invoiced period

Cost of Telephony The cost of building telephony services in the invoiced period.

Cost of catering The cost of catering services provided in the invoiced period.

Cost of Reception Services

The cost of reception services provided in the invoiced period.

Cost of Courier/Messenger Services

The cost of messenger/courier services provided in the invoiced period

Cost of Postal Facilities The cost of Postal facilities in the invoiced period

Cost of Reprographics The cost of Reprographics services in the invoiced period

Cost of Transport The cost of transport services in the period invoiced

Cost of Leisure Services The cost of any leisure/fitness facilities provided in the period invoiced

Cost of accommodation Services

The cost of any accommodation services provided in the period invoiced

Cost of archive The cost of any archive services provided in the period invoiced




Cost of projects The costs of any facilities management projects carried out during the period invoiced

Guidance Notes to the NEC Model Contract (NEC Term Service Contract)



Contract Guidance Notes for the NEC Model Form of Contract comprising the

Deed of Agreement incorporating the NEC3 Term Service Contract

June 2005 (with amendments June 2006)




INTRODUCTION

These guidance notes are intended to assist users who have responsibility for preparing tender information as well as those who are responsible for preparing the resulting agreements for signing by the parties.

The Guidance Notes

These notes should be read in conjunction with the relevant edition of the NEC3 Term Service Contract (the “NEC3 TSC”) and the Model Form of Agreement incorporating the NEC3 Term Service Contract (the “NEC Model Contract”).

The “NEC3 TSC” is available for purchase at:

http://www.neccontract.com/products/bookshop_main.asp?page=bookshop_main.asp&ISBN=9780727733764&NEC=True&UK4ITJTV63YD2CH5XUFYH

The NEC3 TSC

The NEC3 Term Service Contract has been developed as part of the New Engineering Contract (NEC) system of contract documents. It was drafted with the same objectives as the NEC and adopted clauses from the NEC Engineering and Construction Contract where appropriate. It is, however, different in some significant aspects from most of the more standard forms of construction contract produced for the NEC suite.

Firstly, it is intended to be used for the appointment of an organisation to provide and manage a service for a period of time, rather than for a specific project or task. The service might be provided continuously over the period of the contract or it could be commissioned on a task by task call-off basis throughout the period of the contract.

Secondly, the NEC3 TSC is not limited to construction operations performed by contractors or consultants. It is intended to be used for a variety of services, on or outside of the Employer’s premises and involving physical or non-physical activities. The publisher’s guidance states that in the public sector, the NEC3 TSC is designed to be used for all contracted-out services and their suggestions for possible uses include maintenance of highways, maintaining public parks, maintaining heating, lighting and ventilation systems in buildings, maintaining canals and leisure facilities, periodic inspection of bridges and reporting, cleaning of streets in urban areas, refuse collection and disposal, snow clearance on highways, providing security personnel for an installation, site or building, providing ambulance services for a group of hospitals, servicing and maintaining airport buildings, providing data processing services by a computer systems company and even providing commercial television programmes in a geographical area.

The NEC3 TSC was drafted as a “shell” contract which requires important information to be provided separately. The most critical document to be provided is the Service Information. This contains the detailed requirements of the Employer and is frequently referred to by the contract conditions.

The NEC Model Contract

The NEC Model Contract is intended to facilitate the use of the NEC3 TSC with or without amendments. It comprises a Deed of Agreement (to be executed by the Parties




when a formal contract has been agreed) and a number of Contract Schedules which identify the information that are unique to the Parties and/or the particular project and which will be appended to the Deed of Agreement when it is executed.

The OGC not only recommends the use of NEC3 by public sector procurers but also recommends that, where NEC3 forms are being used, they should be used with as few amendments as possible. As currently presented, Contract Schedule B (Additional Conditions of Contract) contains a number of provisions which various public bodies have found useful in the past. The additional provisions are presented in four sections, section 1 containing provisions which it is believed will be useful and appropriate for most suppliers’ engagements, section 2 containing conditions which are likely to be appropriate only in the specific circumstances which each specific provision addresses, section 3 containing arrangements which are likely to be appropriate only in very limited circumstances and section 4 providing a location for users to insert their own specific additional requirements.

Users should not however feel compelled to use all or any of the amendments, even those provided in section 1. The OGC recommends that NEC3 forms are used with as few amendments as possible and users are urged to be selective when contemplating utilising any of the additional provisions and to use only such options and Z clauses as are necessitated by the individual circumstances of each project.

If amendments to the standard published NEC3 provisions are considered necessary, users should identify which of the provisions in Contract Schedule B are to apply. This may be done by deleting those that will not apply from the list that appears in Contract Schedule A (Contract Data – Part One) and, in the interests of certainty, from Contract Schedule B also.

Users should note that many of the numbered Option Z provisions which appear in Contract Schedule B contain two or more clauses. Users should utilise or delete each individual option Z provision in its entirety, rather than deleting some clauses from an option whilst retaining others.

Whatever choice is made regarding additional or amended provisions, users will also have to complete all information required in Contract Schedules A and D to I and to identify in Contract Schedule C any information required to be provided by the prospective contractors.

The following notes provide guidance in respect of the individual component documents which together make up the NEC Model Contract.




DEED OF AGREEMENT

The purpose of the Deed of Agreement is to summarise the events and circumstances which preceded the issuing to the Contractor of an Order for the service, to incorporate that Order by reference into the formal contract and to identify and incorporate the specific contract provisions agreed between the Employer and Contractor. Those provisions are drawn from both the standard published NEC3 Term Service Contract and from the specific options and Z clauses provided within the NEC Model Contract which accompanies these Guidance Notes.

The format of the NEC Model Contract has been prepared on the basis that the Deed of Agreement will be completed as follows.

Date: it is preferable to leave the Deed undated until both parties have had the opportunity to examine the final version of the agreement in detail and to execute their respective parts. At that point, agreement as to the date on which the Deed has been “delivered” is likely to be easy to reach. The parties should however be aware that, for reasons unrelated to the carrying out of the Contractor’s service, the most advantageous date of delivery of the agreement may be different to the date on which the parties reached consensus, signed the Deed or intend to commence the service. It may be advisable to obtain specific legal advice concerning the date of the agreement in light of the particular circumstances of the project, particularly where collateral agreements of any nature are likely to be a factor.

Party 1: identify the Employer by reference to its official / formal name and address.

Party 2: identify the Contractor by reference to its registered name and address or, if unregistered, by reference to its formal trading name and address.

Recital A: identify the service for which the contract is intended.

Recital B: identify the Framework Agreement under which the contract arose by reference to the framework agreement number and date.

Recital F: identify the Order for service by reference to its date of issue.




CONTRACT SCHEDULE A

CONTRACT DATA part one – data provided by the Employer

Main Option

Insert:

“A” if the payment to the Contractor is to be based upon the agreed Price List,

“C” if the payment to the Contractor is to be based upon its actual costs and subjected to subsequent adjustment in accordance with “pain/gain sharing” arrangements, and

“E” if the payment to the Contractor is to be based upon its actual costs.

Dispute Resolution Option

Insert:

“W1” if the contract is not related to construction operations, or

“W2” in all other circumstances.

Secondary Options

The full range of Options available under the NEC3 TSC are listed, for the sake of completeness, but a number of those options are considered to be inappropriate or inconsistent with the terms of the Framework Agreement and are marked “Delete. Not used”.

Other Options must be selected or rejected by the user and these are marked “Delete unless specifically required”, accompanied by additional guidance where appropriate.

Users should consider each Option carefully and use only those that are specifically required for the project. Having selected the Options that are required for the project, users should ensure that Options that are not required are clearly deleted from the list.

Option Z: Additional conditions of contract

The full range of optional additional clauses are listed in four separate sections, under the self explanatory headings:

Section 1: Recommended for all contracts,

Section 2: Recommended for appropriate contracts only, and

Section 3: Recommended for limited use only

Section 4: Further Z clauses required by the Employer




Users should ensure that the Option Z additional clauses that are not required are clearly deleted from the list and, in the interests of certainty, it will be safer to delete the body of their associated text in Contract Schedule B also.

The remaining parts of Contract Schedule A identify items of information which are required for each individual contract. Most of those items are self-explanatory or are accompanied by individual explanatory notes, but for the avoidance of doubt, the following should be noted.

Period for retention

The period for retention is not a standard provision of the NEC3 TSC but has been included in the Contract Data because it may be useful in a number of situations. It is specifically required by various Z clauses and might be utilised in the Service Information in connection with specific requirements for the service.

Adjudicator nominating body

The adjudicator nominating body (“ANB”) is referred to in clause W1.2(3) and W2.2(3). These clauses explain that the ANB will only be called upon to nominate an adjudicator if:

the Parties have not named an adjudicator in the Contract Data Part One, and/or

the Parties have not jointly appointed an adjudicator, and/or

the named or jointly appointed adjudicator has resigned or is unable to act.

A number of reputable institutions, institutes and other organisations within the UK offer services as ANB’s. Unless the Contract states otherwise, there is no legal obligation to refer matters to any particular one of them. Nevertheless, it is suggested that, as a general rule:

the Royal Institution of Chartered Surveyors (RICS) may be the most suitable ANB for nominating adjudicators to settle disputes involving primarily matters of quantum,

the Technology and Construction Solicitors’ Association (TeCSA) may be the most suitable ANB for nominating adjudicators to settle disputes involving primarily matters of law, and

the Chartered Institute of Arbitrators (CIArb) may be the most suitable ANB for nominating adjudicators to settle disputes involving a mixture of such matters.

Risk Register The Risk Register is described in NEC3 TSC clauses 11.2(14), 16.1, 16.3 and 16.4. It is intended to provide a comprehensive list of the risks identified by both Parties, before or during the currency of the works, together with details of the measures to be taken to avoid or reduce each




risk.

Contractual obligations and entitlements associated with the registered risks are dealt with separately under the Contract. It will therefore be important to ensure that, when a risk is identified and included in the Risk Register, the associated measures intended to avoid or reduce that risk do not conflict with the provisions of the Contract.




CONTRACT SCHEDULE B

OPTION Z: ADDITIONAL CONDITIONS OF CONTRACT

The Option Z clauses, contained in Contract Schedule B, supplement, modify or replace the normal published provisions of the NEC3 Term Service Contract (the “NEC3 TSC”).

Contract Schedule B states that each Option Z provision will apply unless deleted in the Schedule or in the list of Option Z provisions which appears in “CONTRACT DATA Part One – Data provided by the Employer, 1 General, Option Z: Additional conditions of contract”. However, in the interests of complete certainty, any Option Z clauses that are not to apply should be deleted in both the list and the Schedule.

To assist users to prioritise their review of the optional provisions, the provisions are grouped into 3 categories of applicability and/or importance, the provisions in section 1 being considered to be useful and appropriate in almost all contracts (each option should therefore ordinarily be retained), those in section 2 being considered useful and appropriate in a number of circumstances but not all (each option will therefore require consideration in light of the circumstances of each intended contract), whilst those in section 3 are considered appropriate only in relatively limited circumstances (and therefore should ordinarily be deleted).

Users should note that many of the numbered Option Z provisions which appear in Contract Schedule B contain two or more clauses. Users should utilise or delete each individual option Z provision in its entirety, rather than deleting some clauses from an option whilst retaining others.

Most of the Option Z clauses are self-explanatory but, for the avoidance of doubt, the following should be noted.

Option Z 1 Additional conditions of contract

Option Z 1 is a standard provision of the NEC3 TSC contract which enables the addition of further conditions of contract. As a result the first “optional” clause is numbered Z 2, rather than Z 1.

Option Z 2 Waiver

This provision ensures that a Party’s failure to use a contractual right or a remedy will not result in that Party losing the right to use that right or remedy in the future.

Option Z3 Retention of documents

This provision ensures that essential documentary records are retained for an adequate period of time following completion or termination of the service.

Option Z 4 Freedom of information

These provisions ensure that the Employer will be able to comply with its obligations under the Freedom of information Act and Environmental Information Regulations.




Option Z 5 Notices

These provisions clarify and expand upon the NEC3 TSC notice provisions.

Option Z 6 Examination of documents

These provisions build upon the provisions of Z2 in empowering the Service Manager to examine any documents related to the service and held by the Contractor.

Option Z 7 Liaison Meetings

These provisions require the Parties to meet at monthly intervals to review the performance of the service even where there are no reported or known problems. Such meetings are expected to support good management and communication by encouraging the early airing of potential concerns and grievances before they become serious enough to merit the more formal early warning and risk reduction meeting processes. If every aspect of the contract is proceeding satisfactorily the Liaison Meeting may be brief.

Option Z 8 Fair payment charter

These provisions ensure that the Employer is able to comply with the OGC’s policies on fair payment.

Option Z 9 Conditions affecting the provision of the service

These provisions ensure that the Contractor’s failure to inspect the Affected Premises, the means of access, communication, availability of labour or the like nor the Contractor’s reliance upon documents or other information which was not part of the Service Information will not constitute a Compensation Event and therefore will not entitle the Contractor to additional payment or time.

Option Z 10 Persons dealing with this contract

These provisions ensure that the Contractor has a single, clearly defined point of contact for communications with the Service Manager.

Option Z 11 Disputes with Others

These provisions describe the process by which any disputes between the Contractor and other parties may be resolved, if necessary with the assistance of the Service Manager.

Option Z 12 Conflicts of interest

These provisions ensure that there is a mechanism in place to deal with any conflict of interest with potential to damage the project.

Option Z 13 Assignment

These provisions clarify the Parties’ rights to assign their interests in the contract.




Option Z 14 Novation

These provisions ensure that the Employer is able to transfer its obligations, as well as its entitlements, to any other Contracting Authority or private sector body.

Option Z 15 Confidentiality

These provisions ensure that an appropriate degree of confidentiality is maintained in documents provided by the Employer or Service Manager for the purposes of the contract.

Option Z 16 Official secrets

These provisions draw the Contractor’s attention to the possible ramifications of the Official Secrets Act and the Atomic Energy Act.

Option Z 17 Evidence of standards

These provisions enable the Service Manager to require the Contractor to prove that it is complying with the contract’s specifications.

Option Z 18 Suspension for non-payment

These provisions supplement the Contractor’s remedies for non-payment to include suspension of the service, even when Option Y(UK)2 does not apply.

Option Z 19 Insurance

These provisions expand upon the standard NEC3 TSC insurance provisions, imposing specific criteria concerning the quality of insurers and expanding upon the circumstances in which the Employer may, in the event of default by the Contractor, obtain its own insurance at the Contractor’s cost.

Option Z 20 Professional indemnity insurance

These provisions expand upon the standard insurance provisions by imposing specific criteria as to the terms of any professional indemnity policy, limiting the Contractor’s entitlement to settle potential claims and providing alternative arrangements in the event that the required insurance ceases to be available at commercially reasonable rates.

Option Z 21 Public liability insurance

These provisions empower the Service Manager to expand the range of parties to be covered by the Contractor’s public liability insurance.

Option Z 22 Termination Events

These provisions expand upon the events in respect of which the Employer is entitled to terminate the contract.

Option Z 23 Security concern





Option Z 24 Corrupt gifts and payment of commission


Option Z 25 Unincorporated joint venture

These provisions address the situation in which the Contractor is a joint venture and one of its component members becomes insolvent.

Option Z 26 Termination of part of the service

These provisions address the situation in which the Employer may wish to terminate a part of the service only, either as a result of default by the Contractor in that part of the service, or as a result of events or circumstances for which the Contractor is not responsible. In any event, the contract arrangements regarding procedures and amounts of payment due on termination of the whole of the service will apply instead to the part of the service terminated and all other provisions of the contract will continue to apply to the remaining parts of the service.

Option Z 27 Option W3 Negotiation

These provisions expand upon the alternative dispute resolution arrangements available to the Parties.

Option Z 28 Option W4 Mediation

These provisions expand upon the alternative dispute resolution arrangements available to the Parties.

Option Z 29 Responsibility for work by Others

These provisions clarify the extent to which the Contractor will be responsible for work prepared by other parties.

Option Z 30 Contractor’s obligation to ensure

These provisions clarify the extent to which the Contractor will be responsible for delays and non-completion of the service which is caused by other parties.

Option Z 31 Direct appointment of Others

These provisions clarify the extent to which the Contractor is obliged to co-operate with and co-ordinate work by other parties.

Option Z 32 Approval of Subcontractors

These provisions explain the conditions under which the Contractor will be allowed to sublet parts of the service to Subcontractors.

Option Z 33 Environmental requirements

These provisions ensure that the Service Manager is able to require the Contractor to provide evidence of compliance with environmental regulations.




Option Z 34 Access to property

These provisions ensure that basic security arrangements and regulations are available and enforceable if the Contractor or its work people have to enter premises which are owned and/or occupied by other parties.

Option Z 35 Presentations

These provisions add detail concerning the range of reporting measures which the Contractor may be required to undertake when presenting recommendations to the Service Manager.

Option Z 36 Tender documents and contracts

These provisions ensure that the Contractor is informed regarding the Employer’s standard procedures and that any tender or contract documents produced by the Contractor are consistent with the content and format of the Employer’s standard documents.

Option Z 37 Collateral warranty agreements

These provisions enable the Service Manager to require the Contractor to execute collateral warranties in favour of financers, tenants, purchasers and the like and also to require the Contractor to procure similar collateral warranties from its Subcontractors.

If this Z clause is selected for use and no alternative collateral warranties are inserted in Contract Schedule F, the required collateral warranties will be the Contractors’ and Subcontractors’ standard collateral warranties in favour of purchasers, tenants, financers and employers as published by the Joint Contracts Tribunal Limited.

Option Z 38 Recovery of VAT

These provisions enable the Employer to recover from the Contractor any VAT incurred by the Employer as a result of default by the Contractor.

Option Z 39 Recovery of other sums

These provisions expand the Employer’s rights of set-off enabling the Service Manager to deduct, from sums owed to the Contractor under this contract, any sums owed to the Employer, the OGC or by any other representative of the Crown under any other contract.

Option Z 40 Performance bond

These provisions provide a default format for the performance bond if no alternative format is identified in the Service Information.

Option Z 41 The Housing Grants, Construction and Regeneration Act 1996

These provisions ensure that the provisions of the Construction Act will apply to the contract even though the site of the service may not be in England, Wales or Scotland.




Option Z 42 Timber and wood-derived products

These provisions ensure that timber and wood-derived products supplied or used by the Contractor in the performance of the Contract originate from a forest source which is managed in line with set social criteria.

Option Z 43 Contract Standard

These provisions raise the standard of care required of the Contractor from the ordinary level of skill and care expected of a contractor of like discipline to the higher level of skill, care and diligence expected of a contractor with particular experience of providing a like service.

With regard to design duties, the required standard of care is raised to that of a professional designer experienced in carrying out a similar design service.

The provisions also amend the required professional indemnity insurance so as to cover the higher standard of care.

Option Z 44 Contractor’s records

These provisions oblige the Contractor to preserve records of any time charged elements of the service throughout the period for retention and if so requested to provide copies to the Service Manager. This provision expands upon the requirements of Z1 and Z5 in that it includes time charge records kept by Subcontractors.

Option Z 45 Copyright

These provisions transfer the copyright in the Contractor’s documents to the Employer.

Option Z 46 Security measures

These provisions impose significantly more stringent controls over the Contractor and its personnel than would be possible under the more normal arrangements provided by Option Z13 (Confidentiality) and Option Z14 (Official Secrets).

It should however be borne in mind that the significant inconvenience of operating the restrictions on access to documents and other information envisaged by Option Z 43 is likely only be justified where there is a risk that the security of the most sensitive of data will be compromised. Other arrangements, such as “clear desk” policies in conjunction with locked filing cabinets, may provide adequate security for most circumstances.

Option Z 47 Access to MOD Sites

These provisions address a number of issues associated with contractors working at MOD sites, including special arrangements for security clearance and transport of the Contractor and its personnel to MOD sites both in the UK and, potentially more problematically, abroad.

It is worth noting that the transport requirements may on occasions be unusually specialised since, in this context, “Sites” may include military vessels at sea.




Option Z 48 Criminal Records Bureau

These provisions enable the Employer and Authority to have a right of veto over any employees of the Contractor who generate unsatisfactory results from criminal records checks.

Option Z 49 The Transfer of Undertakings (Protection of Employment) Regulations 2006

This provision confirms that The Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE’) applies to the intended transaction as outlined in Schedule I.

Option Z 50 Employer’s Property

These provisions ensure that, in the event that the Contractor is permitted to use the Employer’s equipment, Plant or Materials in providing the service, the Parties’ are clear as to their entitlements and liabilities.

Option Z 51 Security provisions

These provisions (sections A to F) should be used in contracts where additional security provisions are required.

Option Z 52 Small and Medium Sized Enterprises (SMEs)

These provisions support the first objective announced in the Government’s “Policy through Procurement Action Plan”, the intention being to promote the engagement of small and medium sized enterprises on public contracts by lowering barriers to their participation. The optional clauses have been prepared in accordance with the recommendations of the Glover Committee in its final report “Accelerating the SME Economic Engine”, published in 2008.

Users should note that a percentage must be inserted into the Contract Data to identify the minimum proportion of SMEs that the Contractor is required to engage. A figure of 25% is suggested but users are, of course, free to insert any figure they consider suitable and practicable and may feel that a significantly higher proportion is appropriate given the nature of the service to be delivered. Whatever percentage is decided upon, it may be applied either as a percentage of the total number of Subcontractors engaged in Providing the Service or as a percentage of the total Defined Cost of the service incurred on the contract.

Users should note that tendering opportunities thought especially suitable for SMEs or consortia of SMEs should be flagged by the Employer during the tender advertising process.

Option Z 53 Apprenticeships

These provisions support the second objective announced in the Government’s “Policy through Procurement Action Plan”, the intention being to promote apprenticeships.

Under the Public Contract Regulations 2006, contracting authorities can include special contract performance requirements that the Contractor is required to meet,




providing the requirements relate to the performance of the contract and do not discriminate against suppliers from other EC member states.

Users should note that a percentage must be inserted into the Contract Data to identify the minimum proportion of apprentices that the Contractor is required to employ.

It is not considered appropriate to set a prescriptive indicator that can be applied to all public contracts. In determining an indicator a public authority could, for example, use their own knowledge of the sector to determine a suitable figure and/or discuss the requirement with the relevant Sector Skills Council or the National Apprenticeship Service. As a guide, early experience shows that an appropriate proportion of apprentices to include in Government contracts, where training is applicable, would be up to 5%. Users are of course free to whatever figure if they feel is appropriate. Whatever percentage is decided upon, it may be applied either as a percentage of the workforce or as a percentage of the hours worked on the contract.

Users should note that in order to measure the effectiveness of these measures, it is recommended that the Employer gather and collate contract management information for future analysis.

Option Z 54 Management information

These provisions require the Contractor to submit the management information detailed within Schedule K to the Employer on a monthly basis.

Option Z 55 Further Z clause required by the Employer

This is a blank Z clause which identifies the starting point for any additional contract clauses required by individual users (to be inserted as Z 55, Z 56, etc). It is hoped that such additional provisions will be extremely rare. The OGC recommends that NEC3 forms are used with as few amendments as possible and users are urged to be selective when contemplating adding bespoke clauses and to add such clauses only when necessitated by the circumstances of the project.




CONTRACT SCHEDULE C

CONTRACT DATA Part two – Data provided by the Contractor

Contract Schedule C identifies items of information which are required for each individual contract but which have not already been dealt with by the Employer in Contract Schedule A.

Most of those items are self-explanatory but, for the avoidance of doubt, the following should be noted.

Risk Register The Risk Register is described in NEC3 TSC clauses 11.2(14), 16.1, 16.3 and 16.4. It is intended to provide a comprehensive list of the risks identified by both Parties, before or during the currency of the works, together with details of the measures to be taken to avoid or reduce each risk.

Contractual obligations and entitlements associated with the registered risks are dealt with separately under the Contract. It will therefore be important to ensure that, when a risk is identified and included in the Risk Register, the associated measures intended to avoid or reduce that risk do not conflict with the provisions of the Contract.

Clearly, it will be important to eliminate from Contract Schedule C any items which have been dealt with in Contract Schedule A.




CONTRACT SCHEDULE D


The Service Information is information which:

specifies and describes the service to be provided by the Contractor or

states any constraints on how the Contractor is to Provide the Service.

CONTENT OF THE SERVICE INFORMATION

The provisions of the NEC3 TSC refer to a number of matters which should be addressed by the Service Information. Specifically, it is suggested that the Service Information should:-

11.2(6) identify any acceptance or procurement procedure which the Contractor will be required to follow;

11.2(7) identify any items of equipment that the Contractor is to provide, whether for use by the Contractor or others, as part of the service;

11.2(15) specify and describe the service and state any constraints on how the Contractor is to Provide the Service;

15.1 identify any constraints on the means of access or manner of working in properties owned by the Employer or others;

15.2 identify anything that the Employer is to provide to the Contractor;

21.2 identify the order and timing of any work to be carried out by the Employer and others (if any);

identify the arrangements for access by the Contractor to properties owned by the Employer or others;

identify any information (over and above that listed in NEC3 TSC clause 21.2) which the Contractor is required to show on his plan;

23.1 identify any equipment or constraints on equipment to be designed, supplied and/or utilised by the Contractor to provide the service;

25.1 identify arrangements under which the Contractor will co-operate and share with other contractors occupying or working in properties owned by the Employer or others;

25.2 identify the facilities and any other things to be provided by the Employer and the Contractor during the service period;

identify any information and other things to be provided by the Contractor at the end of the service period;

27.4 state the Health and Safety requirements in accordance with which the Contractor must act;

40.1 identify all required tests and inspections;

40.2 state the materials, facilities and samples to be provided by the Contractor and the Employer for tests and inspections;




41.1 state which Plant and Materials are to be tested or inspected before delivery;

52.2 identify any records (over and above those identified in NEC3 TSC clause 52.2) that the Contractor is required to keep;

54.1 not rely upon any information provided in the Price List;

60.1(5) identify any conditions within which the Employer or others are to work;

70.2 identify any Equipment which the Contractor is to provide for the Employer’s use during, or at the end of, the service period;

X 13.1 (if Option X13 is applicable) set out the “form” in which the performance bond is to be provided by the Contractor. In the NEC Model Contract a provision has been included in Option Z 37 which (if both options X13 and Z37 are selected) will result in a default performance bond (to be appended at Contract Schedule G) being incorporated into the contract if the Service Information does not set out some other form. See later Guidance Notes relating to Contract Schedule G;

X 19.6 (if Option X 19 is applicable) identify any information (over and above that identified in NEC3 TSC clause X19.6) that the Contractor is required to show on each Task Order programme;

X19.10(4) (if Option X 19 is applicable) identify anything that the Employer is to provide under a Task Order; and

Z 3 (if Option Z 3 is applicable) identify the format in which copy documents are to be retained.




CONTRACT SCHEDULE E

THE PRICE LIST

The Prices, quantities and rates to be identified in the Price List and the extent to which they will be utilised in identifying the Price for Services Provided to Date (and therefore in assessing the amounts due at each assessment date) are described in NEC3 TSC clause 11.2 within each of the main Options A, C and E.

In brief:

Main Option A provides for the Contractor’s payments to be based upon the agreed Price List,

Main Option C provides for the Contractor to be paid its actual costs, subject to defined controls initially and subject subsequently to adjustment in accordance with “pain/gain sharing” arrangements, the Price List serving to identify the target costs with which those pain/gain sharing arrangements are to operate, and

Main Option E creates a cost reimbursable contract, the Price List being used only for forecasting and budgeting purposes.

In each case it is expected that the Prices to be included in the Price List will have been derived from rates and prices which were originally tendered by the Contractor in the Framework Agreement.




CONTRACT SCHEDULE F


If Option Z 35 is used collateral warranties may be obtained from the Contractor.

Unless clause 28.2 is deleted (see Contract Schedule B : Option Z 35) collateral warranties may also be obtained from the Subcontractors. Because the Employer will not have a contract with the Subcontractors, the obligation to obtain these collateral warranties must be placed on the Contractor, who must in turn include the obligation to provide collateral warranties in all relevant subcontracts.

A mere obligation to provide a collateral warranty will not suffice. In order to provide sufficient certainty for the obligation to be meaningful and enforceable, it is essential that all of the material terms of the collateral warranties to be provided are identified before the contract and subcontracts are agreed. This is most easily achieved by including model formats within the contract documentation.

The NEC Model Contract assumes that 5 model collateral warranty agreements will be required, namely:

1. Contractor to future purchasers, tenants or operators of the Affected Property

2. Contractor to organisations providing funding for the service

3. Subcontractors to the Employer

4. Subcontractors to future purchasers, tenants or operators of Affected Property

5. Subcontractors to organisations providing funding for the service.

Whilst there is nothing to prevent the use of entirely bespoke collateral warranties in the above roles, the OGC recommends that industry standard forms should be used wherever possible. It is worth noting that there are a number of existing published collateral warranties that might be used. For the purposes of this NEC Model Contract, the following collateral warranties will apply unless alternative forms are appended at Contract Schedule F.

Reference Parties Description

Contractor – PTO

Contractor – future purchasers, tenants or operators of the Affected Property

JCT collateral warranty “(CWa05) CWa/P and T”

Contractor – F

Contractor – organisations providing funding for the service

JCT collateral warranty “(CWa05) CWa/F”

Subcontractor – E

Subcontractors – the Employer JCT collateral warranty “(CWa05) SCWa/E”

Subcontractor – PTO

Subcontractors – future purchasers, tenants or operators of Affected Property

JCT collateral warranty “(CWa05) SCWa/P and T”




Subcontractor – F

Subcontractors – organisations providing funding for the service

JCT collateral warranty “(CWa05) SCWa/F”.




CONTRACT SCHEDULE G

PERFORMANCE BOND

In view of the probability that the surety for the performance bond will be an insurer or similar organisation, the preferred form of performance bond is likely to be the ABI Model Form of Guarantee Bond, published by the Association of British Insurers, the current version having been issued in April 2004.

A copy of the ABI Model Form and its guidance notes are appended at Contract Schedule G. Further copies can be obtained without charge by downloading from the Association’s website at http://www.abi.org.uk .




CONTRACT SCHEDULE H


The standard NEC TSC terms provide that the parties may not refer a dispute to the “tribunal” (meaning to the courts or to arbitration) until after the dispute has been decided by an adjudicator.

In the standard NEC3 TSC, if the tribunal is to be arbitration, this will be stated in the Contract Data Part One, Optional Statements. In the absence of a statement to the contrary, the tribunal will be litigation.

The NEC Model Contract modifies this arrangement slightly by stating that the tribunal will be litigation unless both parties agree to refer the matter to arbitration. This may be an ad-hoc agreement (reached at the time a dispute emerges) or could be agreed in advance of the signing of the contract.

If the parties do agree to refer a dispute to arbitration, Contract Schedule H identifies the place of arbitration as London and explains the arbitration procedure, language and Law that will apply.




CONTRACT SCHEDULE I

TUPE AND RELATED MATTERS

This schedule outlines The Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE’).

Sections 1 to 3 are recommended for use in all contracts. Section 4 should only be used if specifically required.




CONTRACT SCHEDULE J

SECURITY PROVISION

This schedule provides the definitions related to security provisions for contracts where Z51 sections A to F are used. It also provides the required details of a Security Management Plan.




CONTRACT SCHEDULE K


This schedule outlines the management information that must be submitted to the Empoyer on a monthly basis by the Contractor.